RECOMMENDED READING
It is no coincidence that America has grown more unequal as its labor movement has lost power.
Economists since Adam Smith have recognized that, without organizing, workers cannot negotiate on equal terms with an employer — much less a large corporation.
In theory, workers individually negotiate their wages and benefits. In practice, they are presented a take-it-or-leave-it offer. Organized labor affords workers representation in the workplace and a more equal footing in negotiation, securing higher wages (up to 25 percent higher) and greater access to basic benefits like retirement, health and life insurance as well as paid leave.
Recommended Reading
Give Workers Power to Boost Productivity, Reduce Inequality
It’s an approach that echoes themes of the recent American Compass statement: a well-functioning system of organized labor should both “render[] much bureaucratic oversight superfluous” and reinforce the benefits of tight labor markets “through economic agency and self-reliance, rather than retreat to dependence on redistribution.”
The Wagner Act’s Original Sin
Would sectoral bargaining provide a better framework for American labor law?
Can Antitrust Be Pro-Worker?
In 1776, Adam Smith made perhaps the most famous statement linking monopoly power to labor. “Masters,” he wrote in The Wealth of Nations, “are always and everywhere in a sort of tacit, but constant and uniform, combination, not to raise the wages of labor above their actual rate.” Today, however, rather than taking Smith’s maxim as a warning, most lawyers and judges have come to treat it as a guidebook.
