Should conservatives make peace with private-sector unions? Two views

There is an argument breaking out on the right, and it is a good one, which is rare enough in politics to deserve notice. On one side, conservatives who say the free-market consensus failed the American worker, that the factory towns hollowed out, and that a union may be the last institution standing between a working family and a quarterly earnings call. On the other, conservatives who say the union was always a cartel with a nicer logo, and that the towns hollowed out because of it, not in spite of it.

I am going to state both positions the way their own defenders would, and then I am going to pick one and say why. The thesis I will defend is this: private-sector workers should be free to organize and to bargain, and conservatives should defend that freedom, but the government should not hand any union a monopoly it cannot win by persuasion. That is a narrower position than either camp wants, and I think it is the right one.

Terms, so we are arguing about the same thing

A union is an association of workers that bargains with an employer on their behalf. Exclusive representation means that once a majority of a group votes for a union, that union is the only bargaining agent for everyone in the group, including those who voted no. A union shop is a contract requiring workers to join or pay the union as a condition of keeping a job. A right-to-work law is a state law that forbids such a requirement, so that no worker can be forced to pay a union to hold a job. A works council is a body of elected employee representatives inside a single workplace that consults with management on conditions, as in Germany, without being a national union.

Three of those terms do most of the work in this debate. Exclusive representation, compulsory payment and the legal framework that makes them possible are what conservatives are really arguing about. Whether a worker may join a union is not in dispute at all. Of course a worker may.

A short history of how the framework got built

The Wagner Act, 1935. The National Labor Relations Act, signed by President Roosevelt on July 5, 1935, guaranteed private-sector employees the right to organize and to bargain collectively through representatives of their own choosing. It forbade employers from interfering with that right and created the National Labor Relations Board to enforce it. It also made exclusive representation the national rule: the union that wins a majority speaks for the whole unit. Bear in mind what came before. Before 1935, employers could and did fire workers for joining unions, and sometimes called in force. The Act was a response to real abuses.

The auto and steel years. The heroic age of the American union runs through two industries. In the winter of 1936 and 1937 the United Auto Workers struck General Motors with a sit-down strike in Flint, and in February 1937 General Motors agreed to recognize the union. In steel, the great strike of 1959 shut down much of the industry for about four months, and it is remembered because of what it foreshadowed: once settled, the industry's contracts raised costs just as foreign steel began to arrive. These were the decades when a union card meant a middle-class life, and those who say that unions built the postwar middle class are not making that up.

Taft-Hartley, 1947. After a wave of postwar strikes, Congress passed the Labor Management Relations Act over President Truman's veto. It banned the closed shop, the arrangement that required a worker to be a union member before being hired. It allowed the president to seek an injunction against strikes that imperil national health or safety, and it added a provision of enormous consequence: Section 14(b), which lets each state decide whether to ban compulsory union payment. States that exercise the option are the right-to-work states. The Act is the reason that the union shop is legal in some states and illegal in others, and it is why the geography of American unionism has the shape it does.

The decline in the data

The Bureau of Labor Statistics has tracked union membership for decades, and its series is the cleanest evidence we have. In the early 1980s about one in five American workers belonged to a union. Today the figure is about one in ten, and in the private sector it is a small share of the workforce, well under ten percent. The decline is not new, and it is not owed to one law or one President. It has run through administrations of both parties for forty years.

Explanations compete. Global trade and automation reduced employment in the most unionized industries. Manufacturing shrank as a share of the economy while services, historically harder to organize, grew. Employers have become sophisticated at resisting organizing drives. The legal process, which can take months between petition and election, gives employers time to campaign. And in the right-to-work states, a union must persuade workers to pay dues, which weakens it. I would ask the reader to hold all of those causes at once. Anyone who offers you only one is selling something.

The first view: unions as a pillar of family and community

Here is the case from the newer right, at its strongest.

Markets are tools, the argument goes, not ends. A nation is not an economy, and a family is not a unit of labor supply. The post-1980 economy delivered cheaper televisions and higher stock prices, but it also delivered shuttered plants, lost pensions and a sense among working Americans that nobody was looking out for them. A union is a voluntary association, what Burke called a "little platoon," and civil society is something conservatives claim to love. Unions give workers a voice, a way to bargain with a far larger and richer counterparty, and a sense of belonging to something. The old union hall was a church-basement kind of institution: dues, meetings, neighbors. When the union goes, the argument says, the family and the town often go with it, and nothing arrives to replace them.

This is a serious argument. It rests on a true observation, that the people who bear the costs of a changing economy are often not the people who get the benefits, and a true moral instinct, that a worker should not be a mere input. Conservatives who dismiss it with a sneer are not defending the free market, merely their own comfort.

The second view: unions as a cartel of insiders

Here is the case from the older, free-market right, at its strongest.

A union's bargaining power comes from controlling the supply of labor to a firm, and its aim is to raise wages above what the market would pay. That raise has a price. The firm that pays more than its competitors will hire fewer workers, invest less or lose customers, and someone pays: the unemployed outsider who would have taken the job, the consumer who pays more, and, in the end, the union's own members when the company fails. The insiders gain and the outsiders lose, and that is precisely the structure of a cartel. The Detroit automakers' history, with its legacy costs and its decline against nonunion plants and foreign competitors, is the standard example. Meanwhile exclusive representation means that a worker who disagrees with the union still cannot bargain for himself, and compulsory dues mean that he cannot even stay out of the union and keep his job. In a free country, the argument concludes, people should not be compelled to pay an organization in order to work.

This case, too, deserves respect. It is the argument of Milton Friedman and of every labor economist who studied the question from the angle of the employer's costs. It is also the argument that has persuaded legislatures in roughly half the states to adopt right-to-work laws.

Where each view goes wrong

Each position has a blind spot, and an honest conservative should say where.

The community case tends to forget that unions are not magic. A union that bargains for wages the business cannot pay does not build community. It builds a closed plant. A union is also an institution with its own interests: its leaders and staff have careers, its dues finance politics, and its political spending has often gone to causes many of its own members reject. The Detroit story is a story of union-negotiated benefits that firms could not sustain, as much as it is a story of foreign competition.

The cartel case, for its part, tends to forget that the labor market is not a perfectly competitive textbook. A single large employer in a one-company town has bargaining power over workers, and a worker with a mortgage and children cannot easily walk away. Economists call that monopsony, and it exists in some labor markets, a point conservatives who have read Adam Smith should be able to concede. Smith himself wrote that employers are in a kind of standing combination to keep wages from rising. The free-market case is stronger when it admits that.

Alternatives that deserve a hearing

If the choice were between the Wagner-Taft-Hartley framework and nothing, the debate would be a stalemate. It is not. There are intermediate options worth taking seriously.

Works councils. In Germany, firms above a certain size have elected councils that share decisions about working conditions, schedules and layoffs, while wages are bargained separately through industry agreements. In the United States, such councils run into a legal obstacle. Section 8(a)(2) of the Wagner Act forbids employer-dominated labor organizations, and in Electromation (1992) the NLRB applied that provision to employee committees set up by management. A reform that allowed non-union employee committees, with safeguards against employer abuse, would give workers a voice without a monopoly.

Members-only and opt-in representation. Under exclusive representation a union speaks for everyone in the unit. A system in which a union could represent only the workers who choose it,, would let a minority of workers organize without forcing the rest.

Right-to-work as a universal rule. If every worker may decline to pay, every union must earn its dues, and a union that earns them is stronger than one that collects them by contract.

Portable benefits. Much of what a union once provided, such as health coverage and retirement savings, could be provided through accounts that travel with the worker. Reform here helps those who never had a union and cannot get one.

Faster, fairer elections with secret ballots. Both sides should want a process in which workers can vote in private, free from pressure by either management or organizers. Card-check schemes that replace the secret ballot with public signatures do the opposite, and conservatives are right to resist them.

The verdict

I side with the free-market view on the question of law and with the community view on the question of sympathy. That sounds like a dodge, so let me spell it out in numbered premises.

1. Freedom of association includes the freedom not to associate. The same liberty that lets workers form a union lets a worker decline to join one. A rule that compels payment as a condition of employment is a government-enforced fee for a private organization. The Founders' tradition does not support it.

1. Exclusive representation is a government privilege, not a natural right. The state gives a union that wins an election a monopoly over bargaining for everyone in the unit. Conservatives who oppose monopolies elsewhere should ask why they accept this one without inquiry.

1. A union that wins voluntarily deserves respect. If workers choose to organize, pay dues freely and bargain with an employer in good faith, there is no conservative objection. A strong, voluntary union is a classic example of civil society doing what government should not.

1. The decline in membership is mostly an economic story, not a legal one. Repealing the Wagner Act would not restore the factory towns, and neither would strengthening it. Trade, technology and the shift to services drove most of the change. Pretending that the right law can reverse them is a fantasy shared by both camps.

1. The right response to insecurity is a stronger family and a stronger economy, not a larger cartel. Higher growth, lower costs, portable benefits and a path to ownership do more for a worker than a contract that covers the lucky.

That is a position that can live with the newer right's sympathy and the older right's rigor. It treats the worker as a free person, not a ward and not a factor of production.

The Founding angle

The First Amendment protects the right "peaceably to assemble", and the Founding tradition of voluntary association, which Tocqueville found so striking in the 1830s, is one of the sources of American strength. A conservative should defend the right of workers to form any association they please. What a conservative should refuse is the state's thumb on the scale, whether it comes from an employer's lawyer or a union's lobbyist.

For more on the public side of this debate, where the argument against exclusive bargaining is far stronger, see Public-sector unions, and why FDR doubted they could bargain at all. For the sharpest example of what happens when a union and a government collide, see PATCO 1981, the strike that ended with 11,000 controllers fired. And for an older chapter in the story of courts and labor, read In re Debs and the 1894 Pullman Strike That Made the Labor Injunction.

The case in brief

1. The real conservative argument over unions is about government-granted privileges, exclusive representation and compelled payment, not about whether workers may organize.
2. The Wagner Act (1935) made exclusive representation the rule, and Taft-Hartley (1947), through Section 14(b), let states ban compulsory union payment, which is why right-to-work laws exist.
3. BLS data show private-sector union membership falling for four decades under both parties, mostly for economic reasons.
4. The community case for unions is right about belonging and wrong to ignore costs; the cartel case is right about incentives and wrong to ignore employer power in some labor markets.
5. Defend voluntary unions, end compelled payment, consider works councils and members-only bargaining, and keep the secret ballot.

What you can do: look up whether your state has a right-to-work law, read what it says on your legislature's website, and ask your own state representative where they stand on it.