Unions And the Fallacy of Composition Considered

Perhaps you haven’t heard the term “fallacy of composition” or maybe you have had some logic classes in the past, and you understand mathematically that if something works for one person, that’s fine, but if everyone else starts doing it, it generally won’t work. Nevertheless, this is something that one should consider when they talk about the philosophy and economic modeling of labor unions in our civilization.

Now then, I’d like you to consider for just a moment what would happen if everyone worked union, therefore everyone was paid a higher wage, and after you’ve thought about that for a few moments, let’s continue this dialogue.

There is a very good book I think you should read titled; “Economic Facts and Fallacies,” by Thomas Sowell. Interestingly enough, he does bring up this issue of unions in his book. Okay so, if everyone worked union then all of those workers would demand a higher wage. This would cost the companies more money, and therefore those additional costs would be figured into the products and services the company makes. This would cause the prices to go up, meaning everything that you bought, borrowed, or rented would cost you more.

If everything cost you more, then you probably wouldn’t be any better off than you are right now, sure, you might make more money, but that money you made would go right back out, so it’s kind of a Catch-22 isn’t it? Have you ever heard of wage inflation? If everyone gets paid more money, and everyone has more money to spend, then there is more money floating around the economy, therefore there is a greater demand for the products available. Therefore the price of the products goes up. When those companies raise their price, the labor unions will demand more money.

If everyone works union, and all the wages are already preset, you eventually have a situation of uncontrolled inflation, not to mention that no one is better off than they were before, in fact they’d be worse off. It’s amazing that all this gets lost in the debate, because it seems like something fair to do, to pay people more money. From a business standpoint it’s a horrible situation because the unions demand more money for doing less work, and more benefits which have nothing to do with the products and services the company to sell; it just as cost – which must be passed on. If the prices get too expensive, no one buys the products, company goes out of business, and laid off workers.

Indeed, if you work union did you don’t like this article, but it’s the truth, there’s nothing I can do about that, I can’t change reality of economics, supply and demand, or human desire to purchase goods and services. All that is predetermined by the individual wants and needs of the consumer, you can’t fix that issue by paying people more so they can buy anything they would want, and if you did, you certainly couldn’t give that to everyone, or the system would collapse.

In fact, most of the bubbles that we have in our economy often have the unions for at least one of the components to blame when that bubble pops. Indeed I hope you will please consider all this, and if you work union, and you’ve taken on is some sort of religion, I hope you’re able to look in the mirror and be honest with yourself, and have the integrity to face the facts and reality. It’s time that you do.