Epstein on American Labor Law Reform

Anti-union, anti-collective bargaining advocates are all agitated these days  in the U.S. by the possibility that the Obama administration may try to address the astounding income gap between the rich and the poor in the U.S. by enouraging more collective bargaining.  One of the leading academic voices against collective bargaining in the U.S. over the past 30 years has been Professor Richard Epstein of the University of Chicago.  Epstein, along with his former Chicago colleague Richard Posner long ago attacked collective bargaining in a series of articles applying the “law and economics” paradigm.
They’ve been pretty silent on labor law recently because, quite frankly, nothing of note has changed in American labor law since the 1940s, and American unions represent only about  7% of private sector workers.  So, really, Esptein/Posner’s preference for no unions has pretty much been the model in place for the past 20 years.  Trouble is, its pretty hard to argue that the ‘no union’ model they adore has been good for American workers.  As I’ve noted before, the trajectory of America’s slide to the worst income inequality in the advanced economic world roughly parallels the country’s decline in union density.  Can any economists out there explain how these two statistics are unrelated?  The New York Times, hardly a pro-union think tank, thinks there’s a link.  That is why it has endorsed passage of labor law reform.
The possibility that the Employee Free Choice Act might pass has awakened Epstein from his labor law slumber.  He quickly scrambled to put together this booklet explaining the evils of the legislation. Its obviously a good piece of work, well worth the read for anyone interesting in these subjects.  I’ve only scanned it so far.  It seems to be less of a ‘law and economics’ critique than a typical normative argument against unions and collective bargaining.  So most of the arguments are predictable and have been said before.
I find the arguments unpersuasive I must say, and often contradictory.  One example:  a main reason Esptein argues that allowing unions to be certified by means of collective membership cards on behalf of a majority of workers rather than by means of a hotly contested and (usually) nasty election is that union organizers will bully and intimidate workers into signing cards, so we won’t know if the card represents a voluntary choice by the employee to support collective bargaining.  The irony in this argument is that it is the same one made by advocates of a card-check model, but in reverse:  they argue that a vote cannot ensure employees have a freely chosen to reject unions when the employer has told employees that bad things will happen to them if they vote for the union.
Epstein is against proposals to increase the penalty for employers who threaten employees before the vote because he argues that this doesn’t happen that much and the law should not focus on the exceptional, ‘hard cases’ in any event.   However, he is very interested in focusing on the exceptional case  when it comes to the possibility of unions threatening employees.  He  writes quite a lot about  that, although I am not aware of any studies that show this happens all that often.  I doubt it does, at least in Canada, and the reason is not hard to see.  If a union threatens an employee to sign a union card, there is a very strong possiblity the entire application for certification will be thrown out by the labour board.  Therefore, the incentives  work against unions using threats to obtain support.  The employer, on the other hand, can benefit in the American model (where there is no ”remedial certification”) by threatening workers before a vote, since the penalties for doing so are so weak.  If the employer can cause employees to vote ‘no’ by threatening to fire them all if the union wins, it has a good chance of defeating the union in the end, even if its threat is found to have been unlawful.
This is one problem the Employee Free Choice Act is trying to address.  But even if you are convinced by Epstein’s arguments, the big question remains:  How would you fix the fact that  the middle class in the U.S. has largely disappeared and that the real wages of most workers has been falling for years while the rich are getting richer?   Espteins’ argument is to preserve the status quo in which unions are weak, collective bargaining is all but irrelevant, and the individual employment contract model predominates (see p. 103-104).  Do you agree with this approach, or would you suppport Obama trying to rejuvinate collective bargaining in the U.S.?