Fact Sheet: Union Monopoly Bargaining Contracts Hurtful

On September 27, 2013, in Fact Sheets, by NILRR Staff

nilrrfsheetUnion Nonmembers Are ‘Made Worse Off’

 Monopolistic Unionism Hurts Talented Employees Economically, and Top Union Officials Seem Aware of That

(Click to download Fact Sheet)

By Stan Greer

Because the National Labor Relations Act (NLRA) empowers union bosses to represent workers who don’t want a union, Big Labor apologists contend, it must also empower union bosses to force unwilling workers to pay union dues or fees.  Otherwise, the workers who wish to remain union-free will get a so-called “free ride.”

Ever since the Right to Work challenge to compulsory union membership, dues and fees emerged during the early 1940’s, this thin broth has been the mainstay argument of union officials and other opponents of voluntary unionism.

To justify their opposition to Right to Work laws prohibiting the termination of employees for refusal to join or pay dues or fees to an unwanted union, union officials and their allies invoke, time and again, Section 9(a) of the National Labor Relations Act (NLRA) and analogous provisions in the federal Railway Labor Act (RLA) and multiple state statutes covering government employer-employee relations that are patterned after the NLRA.

As one scholar has explained,

[U]nder Section 9(a) of the NLRA, American unions are not organizations that represent only their voluntary members.  If they are certified by majority vote among workers in a bargaining unit they become the exclusive (monopoly) bargaining agents of all workers in the unit, whether individuals agree or not.  Individuals are even forbidden to represent themselves. . . .

Unions and their apologists . . . argue that since a certified union is forced by law to represent all workers in the bargaining unit whether they approve of the union or not, all such workers must be forced to pay the union.  Otherwise, they would get the benefits of union representation for free . . . .[1]

One simple and obvious response to Big Labor’s self-inflicted “burden” is to advocate repeal of NLRA Section 9(a) and all other federal and state labor-law provisions granting union officials either the power or the obligation to bargain contract terms for union nonmembers under any circumstances.  It is, in fact, the longstanding position of the National Right to Work Committee that Section 9(a) should be abolished and replaced with a provision establishing that union officials would represent only members of their union in contract negotiations.[2]

But even if one accepts, for the sake of argument, that Section 9(a) will remain in place despite its evident flaws, Big Labor apologists’ case for compulsory union dues is still mortallly deficient.

In June 2012, Union Officials Tacitly Conceded Workers Are Captive Passengers

The extraordinary weakness of Section 9(a)-based arguments in support of forced union dues and fees was in plain sight for all Capitol Hill observers in June 2012, when legislation modestly limiting the scope of union officials’ monopoly-bargaining power under the NLRA was debated and voted on in the U.S. Senate.

On June 21 last year, the Senate considered an amendment to S.3240 (the “Agriculture Reform, Food and Jobs Act”) sponsored by Sen. Marco Rubio (R-Fla.).  The Rubio amendment, also known as the Rewarding Achievement and Incentivizing Successful Employees (RAISE) Act, would have allowed employers subject to union monopoly-bargaining agreements to reward their best workers with pay increases based solely on their merit, without first receiving union officials’ permission.

Under the RAISE Act, unionized employers would have only to establish that employees are receiving extra pay based on their demonstrable accomplishments, and that all employees have the opportunity to secure such rewards by meeting the same standards.  If these conditions were satisfied, union bosses could no longer be a roadblock to higher pay.

The reaction of top union officials to the Rubio amendment makes it absolutely clear that, contrary to the rhetoric they use when propagandizing against Right to Work laws, in practice they regard NLRA Section 9(a) as a means of keeping union nonmembers under Big Labor control rather than as a means of “benefiting” union nonmembers.

The union brass vociferously opposed the RAISE Act. Teamster President Jim Hoffa’s explanation for his opposition was typical.  The RAISE Act, Hoffa bitterly complained, would “allow employers to grant wage increases unilaterally to workers of their choosing.”  By enabling employers to “grant pay raises to selected employees in the bargaining unit” based on their demonstrable accomplishments, without Big Labor permission, the RAISE Act “would undermine the ability of the union . . . to create uniform standards for all employees.”[3]

Similarly, William Samuel, director of the AFL-CIO union conglomerate’s government affairs department, condemned the RAISE Act for giving a unionized employer “the right to ignore a negotiated and ratified agreement and grant pay increases to selected employees in a bargaining unit.”  Samuel further complained that the bill would “undermine” the monopoly-bargaining system authorized by the NLRA by permitting companies to “ignore agreed upon wages and benefits . . . .”[4]

And Mary Kay Henry, president of the Service Employees International Union, blasted the RAISE Act as “an unnecessary attack on workers’ rights” that “undermines the fairness collective bargaining contracts bring into the workplace.”[5]

Hoffa, Samuel, Henry, and other union officials and Big Labor apologists brought up the red herring of unionized employers’ “arbitrarily” granting particular employees compensation increases out of “favoritism” if the RAISE Act became law.  However, the text of the amendment itself permitted “greater wages, pay, or other compensation” than the union contract dictates for a particular employee only “for, or by reason of, his or her services as an employee . . . .”

In practice, this would mean, as noted above, that unionized employers who granted individual pay raises to employees without being able to point to those employees’ demonstrable accomplishments, or without making the same raises available to all other employees meeting the same standards, would still be violating the NLRA as amended by the RAISE Act.

Wages of Lower Paid Workers Are Raised Above the Market Rate, With the Increase Offset . . . [in Part] by Reducing Pay of the Most Productive Workers’

Moreover, ample evidence indicates union officials’ actual aim is to deny unionized employers the discretion to reward employees in a way that maximizes the business’s profits, productivity and value.

Over the years, a number of academic apologists for Organized Labor have made no bones about the fact that workers whose productivity is above-average typically get paid less when they are unionized.  Take, for example, Richard Rothstein, a longtime research associate with the Washington, D.C.-based (Big Labor’s) Economic Policy Institute (EPI).

A little over a quarter a century ago, top officials of eight unions “pooled their resources,” primarily derived from compulsory union dues and fees, “to fund a liberal think tank.”  That think tank is the EPI, bluntly described by Washington Post writer Paul Taylor a few months after it was established as a “collaboration of academicians and [organized] labor . . . .” The Post’s headline writer went so far as to label the EPI “[Organized] Labor’s Think Tank.”[6]

In a brief survey of union-friendly academic literature on the impact of exclusive union bargaining on the pay of employees with divergent levels of skill and industriousness, Rothstein has written:

In [unionized] firms, wages of lower paid workers are raised above the market rate, with the increase offset . . . [in part] by reducing pay of the most productive workers.  If firms with this practice are rare, competitors will be able to bid away their best workers.[7]

Rothstein’s understanding of how union contracts work is perfectly standard.  Indeed, the late Clyde Summers, a Pennsylvania law professor who personally supported monopoly unionism generally and Section 9(a) in particular, acknowledged that especially productive workers are far from the only subset who typically get shortchanged under union contracts.

Summers elucidated his problems with the “free rider” excuse for compulsory union dues in a 1995 review for the Comparative Labor Law Journal of a book by fellow workplace-policy specialist Sheldon Leader.

Quoting Leader with approval, Summers explained that the excuse is deficient first of all because under monopoly bargaining workers who don’t want a union are “often actually made worse off” than they were before.  He elaborated in his own words:

Full-timers may bargain to limit the jobs of part-timers, seniority provisions may disadvantage younger workers, and wage increases of the low skilled may be a the expense of the highly skilled. . . .  Determining whether the long-term benefits to a particular employee are greater than the burdens and risks of union membership is practically impossible.[8]

Summers was one of the most influential and respected labor-law scholars of the 20th Century. His obituary in 2010 quoted several glowing tributes from other specialists in his field, including this one from Martin Malin, a professor at the Chicago-Kent College of Law:  “In so many areas, Clyde was on the cutting edge of labor and employment law.”[9]

Are Proponents of Compulsory Union Dues Arguing in Bad Faith?

Of course, it is possible for a scholar to have a sharp difference of opinion with a specialist in his field whom he respects.  And Malin seems on the surface to have a sharp disagreement with Summers about whether it is “practically impossible” to determine “whether the long-term benefits to a particular employee are greater than the burdens and risks of union membership.”

Malin seems to believe that, on the contrary, it’s easy to make such a determination, and summarily concludes that the benefits of unionization outweigh the risks in every case.

In a journal article published this spring, Malin casually wrote:

Absent a union security agreement requiring those who choose not to join to pay a service fee, . . .  all workers will receive the benefits the union achieves regardless of whether they join and pay dues.[10]

Nowhere in this article does Malin make an argument, or cite an argument, countering the evidence and logic used by scholars such as Summers and Leader to advance their claim that workers who oppose unionization are in reality “often actually made worse off” once it occurs.[11]  Malin’s sole reference for his assertion is Mancur Olson’s famous, but controversial Logic of Collection Action.  Olson’s original 1965 book and its subsequent editions are certainly pro-forced union dues.  But Olson never actually claimed, much less proved, that all workers who are subject to union monopoly bargaining benefit from it.

On September 11, I e-mailed Malin, asking him to explain for me the basis of his disagreement with Summers and Leader.  Instead of responding directly, he sent me a long list of conditions for having any discussion with me, including my pledge not to publish any account of what we discussed without first supplying him an “exact copy” and receiving his approval.

I would not agree to such extraordinary conditions, though I certainly would have agreed, as I indicated to him, to allow him to check anything I wrote to make sure I had quoted him accurately.

Malin’s evident reluctance to defend his presumption that all workers benefit from unionization regardless of their personal views about it appears to be common.   Over the past few weeks, I have contacted four other academics who have publicly made the “all workers benefit” claim in support of compulsory union dues, and asked each of them to defend this claim.

Of the four, Matthew Bodie of St. Louis University, who had previously publicly written that union officials wield their exclusive bargaining power “to increase wages and benefits of all represented employees,”[12] acknowledged to me that it “may be that some workers are made better off, and some workers are made worse off.”  The other three — Benjamin Sachs of Harvard University, Anne Marie Lofaso of West Virginia University, and Michael Dorf of Cornell University — have yet to respond at all as this is written.

If, as it seems, no one is willing to step forward to defend the key assumption behind the so-called “free rider” argument for forced unionism once it has been challenged, then it seems reasonable to conclude that this is actually a bad-faith argument, that is, an argument that proponents know or at least suspect to be false, but use anyway.

Forced Union Dues and Fees Are a Special Privilege

Clyde Summers recognized that denying private organizations the legal power to collect compulsory assessments, even from people who really do benefit from their activities, is a “hallmark of a free society.”[13]

If private organizations are not typically granted what is effectively taxation power, why do union bosses deserve this special privilege?  The vast majority of Big Labor apologists today try to sidestep this question by pretending that forced union dues and fees aren’t a special privilege.

Summers was honest enough to admit the truth, but suggested union bosses should be specially privileged because it’s in the public interest for Organized Labor to be powerful.

For their part, Right to Work advocates insist that no genuine interests of society as a whole or workers in particular are advanced by union officials who have the power to get workers fired for refusal to bankroll an unwanted union.  But at the same time, they commend pro-forced unionism scholars like Summers who don’t try to brush aside the unpleasant consequences of the system they support.  Unfortunately, it seems there are very few workplace-policy academics of his ilk in Big Labor’s camp today.

# # #

Stan Greer is the National Institute for Labor Relations Research’s senior research associate.  Nothing here is to be construed as an attempt to aid or hinder the passage of any bill before Congress or any state legislature.



[1] Charles W. Baird, “The Government-Created Right-to-Work Issue,” The Freeman, January-February 2006, pp. 47-48.
[2] See, e.g., “Committee Moves to End Forced Union ‘Representation,’” National Right to Work Newsletter, April 1993, pp. 6-7.
[3] Letter from Jim Hoffa to every U.S. senator regarding the RAISE Act (S.3221), June 7, 2012.
[4] Letter from William Samuel to every U.S. senator regarding S.3221, June 1, 2012.
[5] Mary Kay Henry, “A Federal Attack on Your Rights at Work,” blog post on the SEIU.org web site, June 19, 2012.
[6] “Analyzing Alternatives in Labor’s Think Tank,” Washington Post, February 19, 1987.
[7] “Productivity Forever,” The American Prospect, Summer 1993, pp. 36-37.
[8] From Summers’ review of Leader’s Freedom of Association: A Study in Labor Law and Political Theory, Comparative Labor Law Journal, Volume 16, No. 2, Winter 1995, pp. 262-272.
[9] Steven Greenhouse, “Clyde Summers, Advocate of Labor Union Democracy, Is Dead at 91,” New York Times, November 11, 2010.
[10] “Does Public Employee Collective Bargaining Distort Democracy?  A Perspective From the United States.  Comparative Labor Law & Policy Journal 299 (2013)
[11] See, e.g., pp. 174-78 of Sheldon Leader’s Freedom of Association:  A Study in Labor Law and Political Theory, Yale University Press, New Haven and London, 1992.
[12] “Bodie on Knox Decision:  Political Spending = Business Spending (by Unions as Well as Corporations” (response to a commenter), Workplace Prof Blog, June 26, 2012.
[13] See Footnote 8.

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