Defeating the unions

Patrick Gibbons

A recent Las Vegas Business Press article notes the growing strength of union membership in Nevada despite the national trend. Across the nation, unions have been greatly weakened thanks to global trade and market competition.

Labor unions become a liability for any company trying to provide a reliable, cost-effective service in an economy where competition gives consumers a choice.

Unions in America today only find themselves thriving in one of two situations.

  • Unionization of government workers. The government faces no competition. Without competition it has little accountability to its customers – it does not have to provide you a quality service at a low price. It gets your dollars whether you want to pay them or not. The larger government grows, the more opportunity a union has to grow with government.
  • Monopsonistic economies. A monopsony is a market condition where there is a single buyer of goods and services (as opposed to a monopoly, where there is a single seller). Again, this is a situation that involves a lack of competition. Nevada has for decades suffered from a powerful segment of the gaming industry seeking monopsonistic power over the economy. The market power enjoyed by the gaming industry allowed them to reap substantial profits making them a fat target for unions, while also giving them the ability to push down the price of labor making unionization more desirable.

Today, gaming unions and casinos enjoy an amiable relationship as both wish to maintain market power for their mutual benefit at the expense of Nevada's economy.

Nevada has both a quasi-monopsonistic economy and a government with an unquenched appetite for expansion (it raised taxes in 2003 and now it wants more).

So can Nevadans beat the labor unions and take back their state?  Can Nevada's government serve the people instead of special interests? Can Nevada's economy serve customers instead of certain privileged employees?

Yes, the unions can be defeated. Here's how:

  • To combat the growth of government, Nevada needs spending limits. This will force the government to find smart and effective ways of spending taxpayer money to provide the most productive ways of serving its citizens. In the long run, Nevada's government will find it difficult to serve the interests of the unions over the interests of the citizens.
  • Nevada needs a diversified economy and an educated work force. This means Nevada needs to keep business taxes and regulations low, thereby making the state attractive for growth. To increase our educated workforce, we need serious education reforms. By doing these things, Nevada will increase economic diversification, improve productivity and increase wages. Unions become less attractive and labor freely chooses to avoid unionization.

Other smaller strategies can also help weaken union strength such as paycheck protection (ensuring that union dues aren't used to fund political campaigns), protecting private ballots (ensuring unions can't bully workers into unionizing), and even increasing competition among unions themselves. For example, if multiple unions exist for a profession, switching union membership is difficult and sometimes narrowed to about a seven day period over the course of an entire year. Allowing members to switch unions more frequently forces unions to compete with each other to attract union members. This may actually lead to better representation of union members rather than union bosses, which is good for Nevada's labor.

The stronger, more educated and better paid the private sector is, the weaker union power becomes. The unions will fight to keep government spending high, try to increase taxes on the business community, and keep our labor force as uneducated as possible. But like blood-sucking vampires, unions can't stand the piercing light – of free-market competition.