Working Paper No. 08-12:
The Market for Union Representation: an Information Deficit or Rational Behavior

Author(s):

Harry Hutchison

Date Posted: 2008

Availability:
Abstract (below) | Full text (most recent) on SSRN

Abstract:

In his forthcoming Virginia Law Review article, Information and the Market for Union Representation, Professor Matthew Bodie asserts the NLRB’s model fails to ensure the inclusion of sufficient relevant information. Offering a “purchase of services” paradigm as an alternative way to understand the decision to choose or refrain from choosing to join a union, Bodie conceives the representation election as a collective economic decision rather than the end result of a political campaign. In order for the market for union representation to function satisfactorily, adequate knowledge is required. Professor Bodie tenders a provisional solution—mandatory disclosure aimed at boosting public confidence in the market for union representation.

Although Professor Bodie’s approach is a welcome addition to the literature, it suffers from a few shortcomings. First, labor unions have historically opposed transparency. They are unlikely to welcome additional disclosure initiatives.  Second, his proposal appears to offer a constrained conception of capture that concentrates on employers. Public choice shows that the possibility of capture, grounded in self-interest, is not limited to employers. A more robust conception of capture would include union hierarchs and their ideological allies who see unions as a staging area for the achievement of ideological goals that few workers share. Third, Bodie’s article offers a prevailing but contestable conception of free-riding that appears to overestimate the economic benefits that workers receive from unions. Lastly, Professor Bodie appears to underestimate the capacity of workers as autonomous and adaptive principals to acquire adequate information about the cost and benefits of unionization over a period of time. Even within the existing disclosure framework, workers respond to the information provided by the market, by choosing, or more likely by declining to choose union representation.