Are Labor Unions Consistent with the Assumptions of Perfect Competition?

摘要

The percentage of U.S. workers organized by a labor union has steadily declined from a peak of 35 percent in 1954 to 12.9 percent today (U.S. Bureau of Labor Statistics 2005). Institutionalists have suggested policies to revitalize the labor movement, but such a task is difficult in today's ideological climate in which "a united front seeks to impose the discipline of the market" (Jennings 2004, 142). In order to restore labor's strength, effective policy must resonate with "the nation's commitment to individualism, self-reliance, and economic freedom" (Toruno 2004, 281). A formidable ideological obstacle, however, is the perfectly competitive model (PCM) under which resources are efficiently allocated as if by an invisible hand, without need for institutional intervention.