That’s the title of a paper by Michael Kremer and Benjamin Olken. The bottom line is:
…a union that implements workers’ preferences will not be evolutionarily stable.
The union that survives must either extract fewer rents for the workers (thus lowering anti-union expenditures from the employer, or helping keep the employer in business) or spend excess funds on organizing and bolstering union membership in the broader economy. A union that spends on membership and organizing drives tends to spread from one firm to the next. If a union were truly controlled by its members it would take lots of current rents with little concern for the longer-term future of the firm or for the longer-term future of the union.
Here’s a neat paragraph:
The dynamics of unionization levels also bear a similarity to those under the Susceptible-Infected (SI) model of epidemiological dynamics…In that model, new potential hosts are born uninfected; the chance that they become infected increases with the number of hosts already infected; and once hosts are infected, they stay infected until they die. Note that this comparison is purely positive, not normative.
Yes the paper does offer some evidence but it is more interesting as a theory piece. Here is an earlier ungated version, there is also 2001 version listed at NBER and here is the current version.
…and a republic that implements voters’ preferences will not be evolutionarily stable either?
This may well be true for unions “as we know them”. Company unions providing local public goods [safety vs. cash, eg.] seem to me to be efficiency enhancing. Japan is the best example. The constraint would have to be “company unions” only are allowed, and no company has to have a union. No unions for government workers, either. Let them deal with the HR department!
Oh to be a fly on the wall at the next union meeting in which this paper is discussed.
I’ll let you know how it goes unless I morph into a pariah.
Company unions providing local public goods [safety vs. cash, eg.] seem to me to be efficiency enhancing.
If company unions are efficiency enhancing, why aren’t they ubiquitous? Even more obviously, wouldn’t companies and HR depts find it optimal to provide these “local public goods” on their own and capture the surplus?
If company unions are efficiency enhancing, why aren’t they ubiquitous?
I checked my Labor Economics textbook and according to Ehrenberg, most unions in the United States are company unions or locals.
@lxm: The best way to fight abusing is to provide full employment in an economy.
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