Unions And Free Market Labor
Published: June 09, 2020
Unions obtain higher wages for their members at the expense of others by restricting entry into their occupations. In contrast, higher wages and better opportunities for workers arise in the free-market system through competition, greater productivity, and increased investment. Higher wages in free markets come at no one’s expense.
- Where do unions help? Where do they hurt?
- If you were running a company, would you want to have unionized employees?
- Watch “Milton Friedman on Labor Unions,” available here.
When unions get higher wages for their members by restricting entry into an occupation, those higher wages are at the expense of other workers who find their opportunities reduced.
When government pays its employees higher wages, those higher wages are at the expense of the taxpayer.
But when workers get higher wages and more civilized working conditions through the free market, when they get them by firms competing with one another for the best workers, by workers competing with one another for the best jobs- those higher wages are at nobody’s expense.
They can only come from higher productivity, greater capital investment, more widely-diffused skills. The whole pie is bigger.
There is more for the worker, but there’s also more for the employer, the investor, the consumer and even the taxpayer.
That’s the way a free market system distributes the fruits of economic progress among all the people.