John C. Goodman

Michigan has now become the 24th state to give workers the right to work without having to join a union. The event provoked more than vigorous debate. State police had to be on duty to guarantee the safety and the ability of Michigan legislators to actually go vote on the measure.

So what is the controversy all about? I agree with folks on the left about the real issue. It's not about right to work. It's about unions themselves. Why do we have them? Why do we need them? What public purpose do they serve?

There's no mystery here. A union is an attempt to monopolize the supply of labor to an employer or group of employers. Like all monopolies, unions try to restrict supply and get a price (in this case a wage) above the free market level.

How is that possible? It's not possible without coercion ? both private and public. Faced with demands for above-market wages, employers will try to hire workers who aren't in the union. These are the laborers who the union is trying to keep out of the market. Although the unions call these workers "scabs," in the past they have disproportionately included minorities and women.

That's where coercion comes in. Professor Donald Dewey, my teacher at Columbia University, used to tell students, "There's no such thing as a peaceful picket line; a picket line has no other purpose than to intimidate." It's not an accident that the history of the labor movement is strewn with violence. Without the threat of coercion, competition in the marketplace will produce market level wages, just like competition for other goods and services produce market level prices.

Then there is the government. Although an attempt to restrain trade through monopoly agreement is actually a crime in this country, the law not only exempts labor unions, it includes provisions that encourage them. And although freedom of association is supposed to be enshrined in the First Amendment, the law creates a path for unions to force both employer and employees into a union monopoly contractual arrangement, whether they want to or not.

Let's put aside one widely believed myth: that unions somehow lift the wages of people who aren't in unions. Actually, the reverse is true. By restricting the supply of labor in the unionized sectors of the economy, unions artificially increase the supply (and therefore suppress the market clearing wage) in the non-unionized sectors.

John C. Goodman

John C. Goodman is President of the Goodman Institute and Senior Fellow at The Independent Institute. His books include the widely acclaimed A Better Choice: Healthcare Solutions for America and the award-winning Priceless: Curing the Healthcare Crisis. The Wall Street Journal and National Journal, among other media, have called him the "Father of Health Savings Accounts.”