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Time for a new model of union




Organized labor has become a funding mechanism for the Democratic Party while failing to serve the interests of workers. What to do? Oren Cass writes that co-ops could provide workers the support they need without relying on the adversarial and coercive arrangements created by U.S. labor law:

“One potential path for this new kind of organization, taken by unions operating under the ‘Ghent system’ of many European countries, is to establish relationships with workers and provide benefits to them outside the employment context. In Denmark and Sweden, for instance, unions administer an unemployment-insurance system that workers join, independent of their employer. Those countries don’t require workplace elections, good-faith bargaining by employers, or compulsory dues payments; yet a majority of workers are union members. […]

“Co-ops also could partner with employers to improve the job-readiness of new hires and offer job training for all workers. When business leaders complain that they can’t find enough qualified employees, the solution seems self-evident: if they need a better-trained workforce, perhaps they should invest more in training. But the economics of human capital are complex. If an employer improves a worker’s skills, the worker can demand to be compensated accordingly—or leave for another firm. The employer might design his training so that the worker’s skills are inapplicable elsewhere, but this leaves him far more vulnerable to an organizing campaign and strike; if his specially trained workers walk out, in other words, they can’t easily be replaced.

“Employers thus would like to hire high-skilled workers whom they don’t pay to train, just as workers would like to acquire more skills and work in systems that value them accordingly. But how to get there? Co-ops could fund and conduct training programs, negotiate with employers to share costs and provide access to apprenticeships, and draw on government education programs as well. While workers would pay for a portion of their own training via co-op dues, they would benefit from substantial employer and government support—as well as, eventually, the full value of their improved skills. […]

“The ‘gig economy’ introduces efficiency and dynamism into certain markets, while offering valuable flexibility to workers. But as George Mason University economist Tyler Cowen observes, that kind of labor-market flexibility implies that ‘more workers will have to teach and train themselves, whether for their current jobs or for a future job they might have later on. I submit many people cannot train themselves very well, even when the pecuniary returns from such training are fairly strongly positive.’

“Given the burdens of current employment regulation and labor law, the transportation-network firm Uber is understandably reluctant to engage with its drivers as employees or to risk collective bargaining. But what if its drivers formed co-ops, independent of their relationship to Uber, to support one another and discuss with the firm arrangements like human-capital investment, which might benefit both sides?” [City Journal]


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