Friday, March 04, 2011

Aggressively neutral on the Wisconsin walk-out

A few people have asked me what I think about the Wisconsin collective bargaining rights walk-out, so I'll just tell the world my thoughts on the matter here.

Unions cause monopoly pricing in a market. What this means is they cause a "deadweight loss" - the union gains less of a benefit than the buyers (governments in this case) lose; the market loses overall efficiency. The exception is when there is only one entity buying all the labor - although this is true for some government positions, most (police, firefighters, teachers, etc) can work for a nearby town instead.

But when it comes to labor, there are other considerations besides pure efficiency in one market. If labor prices drop too low, people who can't support their families will simply turn to crime, or take dangerous risks to solve immediate problems. Put simply, poverty has a cost too. Efficiency in the labor market isn't always worth it overall.

EVERYONE, not just union members, deserves a life free of poverty, but unions are not the best way to do it. Governments can subsidize food, shelter, health care, etc, and provide it more efficiently through taxes (land taxes for example have no deadweight loss) than unions can.

So here's why I'm aggressively neutral. The proposed union-busting legislation does nothing to address how union members will be worse off afterwards. No raise to the minimum wage, no health care reform, no improvements to the working environment. It was entirely possible for the Republicans to propose something that helps literally everyone but they did not. They know better, too, but the tea party will not accept any socialism whatsoever, even if it merely guarantees what union members already have in a less disruptive way.

This is why we can't have nice things, people.

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