Free rider

Many working conditions are what economists call public goods. A public good is some product or service that many people can consume together without reducing the total amount of it. A second feature of a public good is that it is difficult or impossible to deny people who have not helped to pay for it from consuming it. The classic example of a public good is national defense.

Many working conditions are also public goods. One example is the speed of the assembly line and a second is the installation of an improved ventilation system. The problem with public goods is that each individual has incentive to be a ‘free rider’ hoping  that someone else will pay for the good and that he or she can then enjoy it for free. 

Thus each worker may be concerned about safety in the plant yet none will actually speak up, hoping someone else will do so. While this behavior is non optimal from the group’s point of view, however from the perspective of each worker it is entirely rational since he or she would bear the cost of possible management retribution or displeasure while everyone else would reap the gain. As a result a system of individual bargaining may produce less than optimal working conditions. In TWU Local 100 who are the ‘free riders’?

Questions - 1. Unionization among nurses and school teachers increased substantially in the 1970s. Among bank employees on the other hand unions made few inroads - can you explain what factors might account for this difference? 2. What do you think are the growth prospects for labor unions in the next 10 years? 3. In a number of respects the Teamsters union has a poor public image. Each year, however more workers vote to join the Teamsters than any other union - do you have an explanation for this phenomenon?