Unions, Firms, and Competition Within the Workplace

I. Centralized Bargaining, Card Checking, and an Alternative 

Is there a way to make joining a union easier for employees? And in the process of making it easier for employees to join a union, is there a way to maximize a person’s freedom to associate (or not associate) without weakening the support structures that workers require to achieve at least some level of parity with capital? I think there is a way, and as I’ll explain in this article, the process I outline reveals important insights into the nature of labour, firms, and the labour market (or, more accurately, lack thereof) under capitalism. But this process is quite a bit different from the majoritarian, centralized bargaining units that unions represent today: Indeed, my proposal is much closer to a radical form of unionization popularized by the Industrial Workers of the World (IWW), and arguably offers a number of benefits that are utterly lacking in the Wagner Act-system that most OECD countries employ today.  

For contrast, an alternative road to unionizing a workplace that doesn’t do away with the centralized bargaining system of most contemporary economies is known as “card checking.” Card checking is where employees present a card saying that they want to join a union, rather than going through a secret-ballot electoral process. If fifty percent of employees present one of these cards, then whatever labour board has jurisdiction is supposed to recognize the workplace as being unionized. 

Obviously this idea has detractors, especially since in some instances it would bypass any secret ballot elections. The loudest detractors—from the so-called “free market” crowd—say that a card checking election would allow the union to know who voted what way, and open people up to harassment and bullying if they don’t present a card. But that’s a pretty simplistic analysis, even though I’m critical of the idea as well. For one thing, as supporters of card checking have pointed out, the election process is so thoroughly skewed towards business owners and managers in North American jurisdictions (and elsewhere) and doesn’t present a fair choice to employees. Managers can force employees to attend “information sessions” where all sorts of “facts” about the “dangers of unionization” are presented to them, and they have free access to disseminating whatever “arguments” they see fit during the lead-up to the election, while unions are barred from presenting their own arguments directly. In reality, the reason secret ballots prevent unions from bullying and harassing employees is because business owners and managers have exclusive rights to that practice

If the worry is that the union might bully or harass people after the election, because they know who voted one way or another, then that worry makes even less sense: what incentive does a union have to bully its own members, especially since the democratic mechanisms of a union require the union to rely on the support of its members to be effective? If the concern is that employees themselves might bully or harass people who didn’t vote to join a union, something that might be publicly available knowledge in a card checking process, then while this is a legitimate concern, the fact that businesses are supposed to have anti-bullying policies and HR departments means that there are mechanisms in place (supposedly) to mitigate this, since bullying and harassment by individual coworkers are a risk in any business setting. The personal experiences shared through the #MeToo movement and the multitude of other harassment and discrimination stories that have emerged should show everyone that HR departments and anti-bullying policies aren’t nearly as effective as they should be, whether there was a union vote or not, so if business managers and owners and “free-market” supporters really are concerned about the possibility of harassment, they’d be pushing for greater reforms in these areas rather than trying to point fingers at unions. A union and stronger protections for workers—indeed, the creation of another forum for airing out grievances—would, at least in theory, be a welcome addition. Again, only if eliminating bullying truly was the aim of those who oppose card checking. 

To me, it seems like the biggest issue is that card checking makes forming a union easier. 

But leaving intentions out of this, what about the alternative proposal that I mentioned? Is this alternative a way to make unionizing a workplace easier while keeping the possibility of harassment down to a minimum? And could we implement this alternative without changing the labour laws in such a way that they explicitly even out the election process between labour and capital? Unions have had to compromise a great deal of their radicalism just to be allowed at the table, and there are numerous reasons why relying on the State to effect positive change is inadvisable, the least of which being the general right-ward shift of labour parties over the years. 

Indeed, I think there is. Competition might be the key. But I mean competition in the sense of real internal competition in the workplace, between support structures for employees on one side and managers and owners on the other. 

What I’m proposing is that we should let employees freely join whatever union they want, without restriction, and without requiring that the majority of a workplace vote in favour of unionization. In many respects, as I said earlier, my proposal here is similar to the model of “minority unionism” that the IWW supports; in particular, that which has been advocated by Alexis Buss in the Industrial Worker I recommend you read those articles, both for more on this model of unionism and so you can compare and contrast; the rest of this article will be laying out how I think the model would work in practice, as well as responding to critiques from both the labour and capital side. In responding to capital, in particular, I hope to tease out an analysis of just how little of a labour market actually exists, and why unionization is so desperately needed in an economy that separates employees and employers, labour and owners.

II. The Pitfalls of State Intervention to Protect Labour

Suppose it was the case that the unionization of a workplace’s employees wasn’t an all-or-nothing affair: Any individual employee could join whatever union they wanted on their own, whether anyone else in their cohort wanted to as well. And they could do so at any time as well, which is to say that they could join a union after they were hired if they decided that such a move would improve their working conditions. That employee would enjoy all the benefits in terms of access to information, bargaining assistance, and protections that their union provides. Access to a union-supported pension fund? Check. Dedicated staff with knowledge of labour laws that can assist an employee in contract negotiations? Check. A network with contacts to other workplaces in case the employee needs to leave their current job? Also check. And the fact that an individual employee now has additional means to articulate grievances, rather than relying on departments internal to the firm that may suffer from incentive problems? Check and check. 

Importantly, letting an individual employee join whatever union they want bypasses the need for an election—secret ballot or card check. Because any portion of the workforce can join of their own accord, or refuse to do so if that is, in fact, their choice. If Amy desperately wants to join a union but knows that Bob and Chris, who do not, will end up skewing the “for” vote below fifty percent, then a perverse incentive exists for Amy to change Bob and Chris’s minds through less than benevolent means; similarly, if Bob and Chris desperately don’t want to join a union, and know that Amy does and will be the one vote that pushes the “for” side over fifty percent, then they have the same perverse incentive to change her mind through less than benevolent means. But if Amy can freely join a union without the requirement that everyone in her workplace is unionized, then this dilemma disappears. Amy can join a union of her own volition, and Bob and Chris can continue being company men for as long as their bosses still have a use for them. 

The need for a State to enforce labour law legislation diminishes greatly under this scheme: In fact, standardized labour laws would be anathema to this form of unionization. The idea would be to individualize the workplace, and the typical labour-board approach to unionization we see now relies on employees existing in standardized production units (something I get into in Section IV of this article). What’s needed for this scheme to work is for the laws identifying the entire firm with the owners to be eliminated, the abolition of legal restrictions on union activities within the workplace, and a loosening of State support for owners and managers to unilaterally determine policy within the corporation. Far from relying on the State to protect workers, then, this approach requires the State to take a massive step away from firms, and allow employees to exercise their agency in creating a workspace that’s up to their own subjective standards. 

III. Possible Objections from Labour and My Responses

Are there any drawbacks from the labour-side of things to this kind of proposal? Initially, we might think that individualizing union membership undermines collective action and solidarity. After all, unions draw their equalizing power from uniting an entire workforce, making it costly for management, so long as labour is scarce, to ignore their employee’s needs.² If we take away the all-or-nothing nature of unionization as it currently exists, then we rob the union’s ability to fight against businesses. Alternatively, this undermines the collective spirit that unions are supposed to support by allowing, or possibly even encouraging, differential treatment of unionized and non-unionized employees in the same workplace

But I think the nature of being a labourer actually helps mitigate these issues. Classical rational choice models ala Mancur Olsen assumed that unions would have as much of a problem with defection as other forms of organization, however historically this hasn’t been the case. Labour tends to find it easier to preserve a sense of solidarity and defects far less often than owners of capital do, likely because of the close interactions labour requires and their ability to cultivate sympathy. And while certain theories of labour unions argue that craft unionism preserves or possibly even increases wage inequality, while industrial unionism—being more centralized in its bargaining—suppresses this tendency, Shergold (1977: 495) presents evidence from the early days of unionization in America that the actual reality is far more complicated. Craft unionism does not necessarily increase worker inequality, given the right conditions; and those conditions, such as the forming of social bonds through proximity, are certainly present within the same workspace. Indeed, close proximity and communication between fellow employees—giving each hold-out a chance to re-evaluate their preferences—will no doubt increase the likelihood of other employees joining a union in order to secure the benefits I listed. There’s a good chance, based off the flow of information and the way that social bonds form, that most people in a single workplace will join up with the same union as well. 

There are other benefits, too; though, at first glance, they might seem incredibly counter-intuitive. The first is that the focus of unions would have to shift away from wages (and frequently nothing but wages) to broader concerns of labour power. In a workplace where only a minority of employees are unionized the workers won’t be able to leverage collective action in the same way that they would in a majority-unionized workplace: That is to say, depending on how small the percentage of unionized employees are, the union might not have the option to suggest striking as a means of addressing workplace grievances. Strikes are, in many cases, assumed to be the most powerful option a union has to ensure that management listens; but the rapidly changing nature of the economy and historical evidence (to say nothing of the other, more radical tactics that unions used to employ but are barred from doing) to my mind suggests that strikes are only minimally effective anyways.³ The lack of striking ability in minority-unionized workplaces, though, means that union staff will have to forge close relationships with employees in order to make being a union member worth their time. Getting employees actively involved in labour politics, problems with labour’s reduced share of power, the idea of controlling your own work, and interlocking concerns of economic and social justice are not only far closer to the spirit of socialism than bureaucratic unionization, but are also far more effective strategically at utilizing local knowledge and actively affecting positive change. Reaching out into the larger public sphere and focusing, as a strategy, on employees utilizing their social networks to help bolster support is similarly close to the spirit of socialism, breaking down class distinctions and ensuring that people know they’re not defined by their job or their association to their boss; it’s also something that’s undervalued in the current model of collective bargaining, especially since the nature of work is changing so rapidly.⁴ And employees committed to radicalism would have much more space to discourse and organize in a bottom-up fashion, while the necessity of blending union administration with on-the-ground activism from members further decentralizes power within the union into the hands of the people it’s supposed to protect. 

It’s easy to see, from my perspective, why the IWW would advocate for a similar position to the one I’m laying out here: the scope for radicalism is greatly expanded as compared to the model we have now. After all, despite the Wagner Act banning company unions, the top-down, bureaucratic style of unionism that we see now—predicated on exclusive and majoritarian representation—is nonetheless identical in form to those same company unions created by management to control and deradicalize their workers, rather than be a vehicle for positive social change.⁵ 

Secondly, this type of union organizing could actually leverage the mechanisms underlying the “free-rider problem” to better shore up working conditions for all, rather than fall victim to free-rider tendencies. Brad Walchuk, who is a critic of minority-unionism, raises the concern that if 

the voice of the minority is counted in establishing a non-traditional minority union, the political right would certainly argue that the voice of the minority wishing to disassociate itself from [a majority of unionized employees in a workplace] should be likewise counted

which opens up the door for “right-to-work” laws or situations where non-union workers benefit without having to pay dues (2016: 6-7).⁶ But this is a problem if and only if the union has to spend resources to represent or fight for these free-riding employees (by virtue of the entire workplace being unionized) and yet, thanks to right-to-work laws, they ultimately can’t guarantee that they’ll receive dues from everyone they’re working to represent. This isn’t the case in a unionization system where non-unionized employees are a separate bargaining unit. 

Managers and owners face a dilemma, though: Replacing, underutilizing, or marginalizing the unionized majority of your workforce is extremely costly and, in a legal regime with zero restrictions on joining a union, unlikely to be avoided simply by repeatedly hiring and firing workers. Signaling to union members that you’ll refuse to recognize their status as union members, without State coercion and protection against worker revolt, is simply not a sustainable business model. At the same time, squeezing or overworking your non-unionized employees to compensate for lost margins isn’t sustainable either: Even if an employee is completely committed to being a “company man”, there’s only so much productivity you can force out of an individual or small group. If an employee doesn’t fully hate the idea of unionization, then there’s a risk that too much pressure or exploitation could drive them directly into the arms of the union; this is especially true if there aren’t any restrictions on what one employee can say to another vis-à-vis comparative working conditions and the nature of their union contract. The union doesn’t actually have to expend resources to directly fight for non-union employees: It simply has to be a presence that firms have to deal with, which becomes all the more likely when the path to joining a union is open and free of legal restrictions.

As if by an invisible hand, then, workplaces that allow for individual workers to join a union without forcing the process through a majoritarian vote might nonetheless lead to a majority-unionized workplace anyways. And, in those types of work-environments, the ease with which an employee can join a union likely will only increase the positive spill-over effects that unions have, without requiring the union to directly expend resources for which they might not receive compensation in the form of dues.

IV. Objections from Capital

Most of the objections towards treating unionization this way would come, I’d argue, from the side of capital. This internal competition would undermine manager’s ability to set policies, would be one argument. Employees would identify less with the company and more with the union, and that could create internal tensions or negatively affect production—that would be another. How can the owners of a business have any consistent negotiations with their employees if some are unionized, some aren’t, and those that are unionized might belong to different unions? These are objections that are frequently leveled against unions of any form and—especially regarding the conflict between identifying with the union versus identifying with the firm in particular—the approach to unionization I outlined above would, in fact, lean into competition to only make these divisions that much more salient.

The literature on worker cooperatives and social enterprises suggests that the assumed efficiency gains from traditional, capitalist firms don’t actually hold much empirical (or theoretical) validity. Indeed, as Kevin Bryan (2016) explains, despite numerous attempts to theorize why firms exist, there still isn’t any explanation that satisfactorily answers the question.⁷ Diving deeply into the question of why firms exist at all is beyond the scope of this article, but suffice it to say, the notion that only traditional firms provide the appropriate incentives for productive activity seems to be a by-product of trying (and ultimately failing) to explain the existence of firms in light of critiques of rational planning. It’s not something that flows naturally from empirical observation or rigorous theorizing.

But note how this wouldn’t be a problem if we existed in a true labour market. Bargaining over wages and contracts is supposed to be done on the individual level—conditions and compensation are supposed to vary depending on the participants to a contract and the haggling that each side engages in. A business engaging in different negotiating strategies based on whether an employee was a part of a union or not, or based on what union that employee was a part of, should be normal operating procedure—i.e., the firm should be treating each worker as an individual anyway, if this is a true labour market, and making adjustments on the basis of individual demands and context.

But the history of firms has been a history of standardizing contracts, and splitting workers up into similar units—with uniform responsibilities and a pay-scale that’s “appropriate” to their position. The division of labour, after all, was predicated on splitting up the production process into standardized units who performed the same task over and over again; this supposedly allowed us to produce more and more things, but as Adam Smith pointed out, came at the cost of us becoming “as stupid and ignorant as it is possible for a human creature to become” (2000: 840).

In fact, it’s more accurate to say that “negotiations” over contracts involve employees attempting to pick through pre-created positions in a firm and trying to decide between ones that they’re simultaneously qualified for and which ones seem the least objectionable to them.⁸ Contrast this with Hall and Milgrom (2008), who claim that both employers and “job-seekers” incur similar costs during the bargaining process at hiring and, thus, are less likely to break off negotiations than standard economic models assume. I’d argue that they overestimate the costs an employer incurs during job-searching relative to the costs incurred by a “job-seeker”. The firm begins the bargaining process by publicly announcing a vacancy and detailing the requirements that an applicant must have if they want to fill it. The job seeker then has to prove that they do, in fact, fulfill these requirements. The information-gathering processes that follows involves the firm attempting to confirm that the candidate job-seeker does, in fact, meet the requirements that have been laid out; this information is relatively simple to acquire since things like educational experience or previous work are all easily verifiable, to say nothing of the fact that the firm has vast institutional resources at its disposal to actually track this information down. The job-seeker, by contrast, even if they command the same amount of resources as an entire firm, has to rely on word-of-mouth and informal networks to be sure that the firm is accurately describing its internal working conditions, things that are not only hard to verify as accurate but are indeed suppressed by most firms through things like non-disclosure agreements. There’s little to no incentive, then, for the firm to adjust the conditions of the contract where-as it’s essential, on the part of the job-seeker, to change their demands to conform to the job as its being presented to them. The firm could modify the contract through repeated bargaining, after the hire has been made, but managerial prerogative and ownership claims over the firm place strict institutional limits on how adaptable the firm is to individual conditions. Standardization is maintained, “bargaining” occurs only in the very limited sense, and with regards to Hall and Milgrom’s model of unemployment’s effects on wages, the costs of a firm breaking off negotiations are substantially lower than the costs of a job-seeker breaking off negotiations; this disparity provides job-seekers an (again, perverse) incentive to stick with the firm even though they may have deep disagreements with the nature of the position for which they’re applying. In both respects, there are strict limits to an employee’s ability to say no and/or renegotiate their contract, either in the hiring phase or further down the line.

I could make more critiques of the assumption that a labour market exists wherever there are firms. Asking for a raise is less a process of renegotiating your contract and more an employee asking to be promoted to a unit with more prestige within the firm. Performance bonuses may differentiate the pay of some employees from others, as might something like commission, but even in these situations, an employee is a part of a standardized unit and can be swapped out for any other person as easily as an engineer can choose between different types of lug-nuts. The promise of the labour market (in theory) treating each worker as an individual becomes, instead, another part of the “supermarket model” that Rose and Milton Freidman found so endearing within capitalism (1980: 66). It’s not the fault of collective bargaining (which has simply been a response to this sort of standardization) nor of unions in general; in fact, radical unions historically, and still to the present day, have been pushing against the commodification of labour generally and the lack of democratic participation within the firm more specifically, both of which entail treating the worker as an individual human being, rather than as labour-power to fill a predefined mold. It is, instead, an inherent part of the structure of capitalist firms.

But a deeper dive into this particular problem deserves its own article: I’m only sketching out how a potential objection, present in a lot of criticisms of labour unions from the business side of things, helps reveal a fundamental contradiction between markets and capitalist institutions. Ultimately, what I proposed above might actually help create a labour market by forcing firms to negotiate with individual workers, rather than treat them as standardized production units. The inclusion of some form of support network for employees is an additional (and necessary) step to ensuring that an employee has the ability to, at the very least, say no.

Finally, for reasons that I hope are obvious, the idea that unions could undermine an employee identifying with their company is, to me, an eminently good thing. Human beings are far too complex and carry too much creative potential to have their identities defined by their job; attempting to breed loyalty without creating space for an employee to truly personalize their work is, in my mind, on the same level as encouraging nationalism.

V. A Voice for Labour

Ultimately this is still only a reformist fix towards economic democracy—there are still a great number of barriers towards full equitable participation in economic decision-making that are not addressed under this model. For example, unions that are focused more on providing voice mechanisms for employees, and pushing for internal democracy, have different concerns than the business unionism we associate with conflicts over economic rent. I don’t think my proposal conflicts with this, especially as solidarity begins to increase between employees within a firm, but re-analyzing what I’ve argued for from the lens of increasing voice rather than simply making unionization an easier process is required. Just to fully flesh out potential problems. 

Creating new unions (that is to say, employees in a workplace organizing outside of existing union structures) isn’t necessarily improved by this approach, simply because workers require resources to set up a new organization and there isn’t any institutional guarantee that they’ll have the access they require. Such is the problem with an inequality of resources: The ability to create new institutions that might work to your benefit is skewed towards those who accumulate the most (whether any institution can survive in the long run under these conditions is a different discussion). 

But I would argue that this approach—creating competition between support structures for employees versus managers and owners—doesn’t isolate workers from solidarity. Above all, capital’s potential opposition to this model highlights the many areas where a lack of choice and freedom on the part of employees is built into the very structure of the firm, even those that pride themselves on incorporating employee feedback and initiative. Competition necessarily requires an equal playing field (otherwise it’s just domination and privilege), and so long as there’s a separation between labour and capital, then competition can be an important tool in protecting human rights in the workplace. The model that I propose—and which Buss and the IWW have suggested in similar forms—also offers up numerous avenues for re-radicalizing the labour movement, rather than simply tolerating business unionism as better than unfettered exploitation. 

Solidarity can survive a more individualized unionization style; capitalism probably can’t.


  1. Buss’s reports can be found on the IWW website under “Minority Report”. “Minority Report #2” (2002), for example, is an excerpt from a panel from the IWW’s then-most recent General Assembly. 
  2. This has been interpreted by “free market” supporters as unions making labour artificially scarce, but this is a by-product of such analyses assuming that labour is just like any other commodity. Bodily autonomy, self-respect and self-ownership, universal human dignity, etc, all sorts of ethical ground exists that says that human beings have a right to say no to work if it doesn’t meet the conditions that they, as sentient creatures, wish it to meet. Ideally, as free creatures, human beings have even more say in adjusting working conditions on their own, and any system that assumes that managers or owners have prerogative over the desires of free people, as though managerial control trumps the ethical basis of equal dignity and respect amongst people, is a system that has no ethical support. So if refusing to do work unless certain conditions are met is inducing “artificial scarcity,” then beyond such a statement being barbaric, it’s hard not to then tie this perspective to the argument that anti-slavery laws are just as much a creator of artificial scarcity. 
  3. Kevin Carson talks about the defanging of unions through State legislation in a few of his works. See, for example, “Labor Struggle in a Free Market” (2015), which goes into excellent detail on how the National Labour Relations Board and similar bodies have actually worked against the cause of labour in many cases, as well as other critiques of the centralized, bureaucratic model outlined in this article. Some of his comments on the political economy of management’s power in the firm also dovetails nicely with some of my points made in Section IV.
  4. The AFL-CIO has connections to progressive causes, but nothing to the extent I’ve listed above; same goes for the members of the Canadian Labour Congress. The Teamsters, at least historically, have had far less of an association with progressive causes, having supported both Reagan and Nixon, for example. Both organizations have a spotty, protectionist record on immigration, it should be said, which is yet another reason to push for more inclusivity.  
  5. For a Canadian perspective, see Wells (1995) and Thompson (1995). Both contain discussions on what labour unions had to give up in order to retain a right to strike, which in and of itself is subject to strict legal restrictions.
  6. He cites New Zealand, which allows some form of minority unionism, as an example. While I can only speculate, as I don’t have much knowledge on the state of labour relations in New Zealand, I’d argue that the underlying effects of “Rogernomics” still reverberate to this day, and make it difficult to separate the problems unions face in the region from broader government policies. I think the data can be explained without implicating it as the fault of minority unionism-style organization strategies.
  7. One of the articles mentioned, by Maskin and Triole (1999), makes the comment that in certain conditions, incomplete contracts can be solved for using an effective truth-telling mechanism to ensure incentive compatibility. But this mechanism “entails joint-ownership”, which in a simple model means that each party can only exercise their right to trade if both parties agree (ibid: 140, 142). I’d argue that, in the case of employees within a firm, joint-ownership would further entail that the owner of the firm and the managers they empower to enforce policy don’t have unconditional control over the organization. This conflicts with “managerial prerogative”, naturally enough, and it also means that without specific mechanisms for an employee to constantly renegotiate their working conditions—independent of any standardized units within the firm—then the contract will remain incomplete. It’s not only a suboptimal contract, but it undermines the notion that the incompleteness of contracts justifies the existence of firms.
  8. I’m assuming here—and I think it’s a fair assumption—that the overwhelming majority of jobs, working conditions, responsibilities, and so on are not and cannot be ex-ante perfectly fitted to a worker’s preferences; such a thing could only happen if a position is made specifically for one individual worker.


Bryan, K. 2016. “Oliver Hart and the nature of the firm”, VoxEU/CEPR, retrieved from: https://voxeu.org/article/oliver-hart-and-nature-firm 

Buss, A. 2002. “Minority Report #2”, Industrial Worker. Retrieved from: https://archive.iww.org/about/solidarityunionism/explained/minority2/ 

Carson, K. 2015 [2008]. “Labor Struggle in a Free Market”, Center for a Stateless Society. Retrieved from: https://c4ss.org/content/34897 

Friedman, M. and Rose Friedman. 1980. Tyranny of the Status Quo. New York: Harcourt.

Hall, R. and Paul Milgrom. 2008. “The Limited Influence of Unemployment on the Wage Bargain”, American Economic Review 98(4): 1653-1674.

Maskin, E. and Jean Triole. 1999. “Two Remarks on the Property Rights Literature”, Review of Economic Studies 66(1): 139-149.

Shergold, P. 1977. “Wage differentials based on skill in the United States, 1899-1914: A case study”, Labour History 4(1): 485-508.

Smith, A. 2000 [1776]. The Wealth of Nations. New York: Modern Library Classics.

Thompson, T. 1995. “Wagnerism in Canada: Compared to What?”, Proceedings of the XXXIst Conference (Quebec: Canadian Industrial Relations Association).

Walchuk, B. 2016. “The Pitfalls of Embracing Minority Unionism”, Journal of Workplace Rights 6(3): 1-12

Wells, D.M. 1995. “Origins of Canada’s Wagner Model of Industrial Relations: The United Auto Workers in Canada and the Suppression of ‘Rank and File’ Unionism, 1936-1953”, The Canadian Journal of Sociology 20(2): 193-225.

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