I saw a sign in a park recently that said “our community supports Amazon workers. Vote union yes!”
Will a union help Amazon workers? Maybe. Will it help workers in general? Almost certainly not, for two reasons. First, other workers will be the ones who pay for Amazon’s higher wages and better working conditions by paying higher prices. Second, other workers will find their own wages lowered or their own working conditions deteriorate as the union pushes workers out of the now-restricted labor market. This video from MRU.org (for whom I have done compensated work in the past) offers a convenient explanation.
I’ll note that the effect will likely be very subtle. I doubt people will see their wages fall and their working conditions deteriorate as much as they will see their wages rise and their working conditions improve more slowly than they otherwise would have. When they announced they would pay no less than $15 per hour a few years ago, they cut back on some other workplace perks.
So what should people do if they want Amazon workers to have better wages and working conditions? Here are four possibilities.
1. Buy more stuff from Amazon specifically. This is the case economists like Benjamin Powell make when they defend sweatshops: if you want people to have higher wages and better working conditions, buy more of the stuff they make. To be clear, Powell and economists who agree with him are most definitely not saying sweatshops are good in some very broad, cosmic sense. Rather, they are saying that sweatshops are often the best of a lot of very bad options, and as David R. Henderson put it, “You don’t make someone better off by taking away the best of a bunch of bad choices.”
2. See What Would Lead to Better Options. Workers’ wages and working conditions depend on their best alternatives. We can make people better off by looking for ways to expand their options. The labor market, unfortunately, has become more sclerotic as it has been burdened with more regulations, licensing requirements, and other restrictions. Getting rid of the barriers to competition in the labor market would make it easier for Amazon workers to work somewhere other than Amazon—and that would make Amazon have to work harder to keep them around.
3. Save More. Workers are more productive when they have more skills and more tools to work with. When you save more, you free up the resources needed to finance education and make tools. This handy playlist from MRU.org explains how tools and skills make us more productive and how more saving leads to more tools and skills.
4. Buy Low, Sell High, and Innovate. In chapter 19 of our book Leave Me Alone and I’ll Make You Rich: How the Bourgeois Deal Enriched the World, the economic historian Deirdre McCloskey and I explain how, contrary to what Martin Sheen’s character in Wall Street says, unions and regulation are not the big drivers of the Great Enrichment of ordinary people over the last couple of centuries. It has been, rather, a change in how we think about the bankers, builders, programmers, and tinkerers who have made fortunes getting new and improved goods and services to…ordinary people.
Everyone wants to help other people—or at least, everyone should. The solution isn’t in collective bargaining, however. It’s in better options, better tools, and better ideas. So let’s have more of those.
Reprinted from Forbes