An Extension of Unions

So, Nathan was nice enough to point out that all the great economists say that unions are OK. That's fine, I don't care. In my current area of study, unions depress pay and fundamentally stifle the quality of the supply of labor. (Don't be verbose...)

For instance, in education, unions serve to create across-the-board equally scheduled pay based on tenure. Simultaneously, they advocate iron-clad job security, and even in states that do not have unions, the State does a good job of securing even pay and iron-clad security. This prevents us from paying people for their merit and firing the ones not worth paying.

The abolition of unions would increase wages for those better-suited for teaching and put some not-as-well-suited out of a job (but they don't need to be teaching our kids anyway). In other words (and this is important):

It would more-efficiently allocate wages.

As the science of economics seeks study the maximization of wealth through the efficient allocation of resources, this seems like a good step for policy-makers to take.

The extension of the argument, as suggested by Nathan: "The existence of unions, though beneficial in the short run, is ultimately detrimental to the individual." Brilliant! And almost Keynsian. But I won't tell any of your libby friends. Hush, hush.

My extension to his: "Yes, and unions are ultimately detrimental to society. As it is unfair to the individual, it is unfair to all collectively: the ones working for a depressed wage may be better suited for and earn more in another position, or at the very least will consume less of our resources; the ones not working in whatever position (teacher in my above example) may now have another option that replaces their first or even second choice of a career, changing the whole set of opportunity costs the individual weighs in the efficient allocation of his own fiscal or human capital."

A Note on Unions

If I dislike unions so much (and I do), would I join one? Hell, yes! Elaborate, you say... Fine, but I'm going to do what an economist does best and assume (and forgive the following jargon):

A1) Institutionalized collective bargaining does not increase efficiency in a labor market that can be treated as a commodity market. That is to say more elaborately, for quality-undifferentiated labor or unskilled labor, the labor may be assumed to be readily available and treatable as a classic commodity--only efficiently allocated when fully exposed to the the functions of a free market (given constant transportation costs).

A2) Unions exist and I can only talk about not-having-them in my theoretical econ-world.

The existence of unions works against labor market efficiencies and causes a total loss to society. However, it would be unwise for me not to exploit the system for personal gain. Therefore, a fallacy of composition occurs and Smith's invisible hand slaps us around a little bit.

Now for my crack-pot pet theory for the day (see previous post): labor unions are a byproduct of market failures and themselves failures of the organized labor market. Therefore, governments should protect me, nay all of society, from myself by banning unions. This will increase welfare, or at least keep me from hurting others due to my inability to comprehend the consequences of my actions of the inability to make the best decision for society as a whole due to imperfect information.