Unions, Economic Freedom, and Growth

22 Pages Posted: 25 Apr 2013

See all articles by Randall G. Holcombe

Randall G. Holcombe

Florida State University - Department of Economics

James D. Gwartney

Florida State University - Department of Economics

Date Written: February 24, 2010

Abstract

The freedom to enter into contracts and to direct the use of economic resources one owns are essential to the operation of a market economy. Allowing employees to form unions to bargain collectively over wages and employment conditions is consistent with economic freedom, and any government intervention preventing unionization would be a violation of economic freedom. Nevertheless, American labor law, especially since the 1930s, has altered the terms and conditions under which unions collectively bargain to heavily favor unions over the firms that hire union labor. Labor law has given unions the power to dictate to employees collective bargaining conditions, and has deprived employees of the right to bargain for themselves regarding their conditions of employment. While unions and economic freedom are conceptually compatible, labor law in the United States, and throughout the world, has restricted the freedom of contract between employees and employers.

Keywords: economic freedom, U.S. labor law, collective bargaining, right to work laws, unionization, Fair Labor Standards Act, Taft-Hartley Act

JEL Classification: J30, J50, J58, L51, J08, K31

Suggested Citation

Holcombe, Randall G. and Gwartney, James D., Unions, Economic Freedom, and Growth (February 24, 2010). Cato Journal, Vol. 30, No. 1, 2010, Available at SSRN: https://ssrn.com/abstract=2256190

Randall G. Holcombe (Contact Author)

Florida State University - Department of Economics ( email )

Tallahassee, FL 30306-2180
United States
850-644-7095 (Phone)
850-644-4535 (Fax)

James D. Gwartney

Florida State University - Department of Economics ( email )

Tallahassee, FL 30306-2180
United States

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