Ask most western economists today, and they’ll tell you that a free market is the most efficient and fair economic system that exists. They’ll show through the laws of supply and demand that price caps cause shortages, that subsidies cause undue surpluses, that monopolies and inter-company collusion cause higher prices and lower wages for workers, and that labor unions and minimum wage laws cause higher unemployment and less efficiency in the economy as a whole.
Economists will typically preface such analyses with a phrase such as, “All else held equal” that simplifies their argument and allows them to talk about one thing at a time and extrapolate useful patterns. However, the real world does not exist in an economic vacuum. The way our political system works today greatly influences the economic realities in our country. Today’s Mega-corporations control vast amount of capital that can be used to fund lobbies that can greatly influence policy regarding antitrust laws, hiring practices and other such political-economic decisions. Thus, the political power of corporations can lead to artificially lower wages and higher prices than would be the case in a fully free market.
In an otherwise free market, labor unions typically cause artificially high wages, causing higher unemployment across each unionized industry. This means that those worker who would have had jobs in the industry at a lower pay rate move to other industries which they are not as well suited. Since they are not well suited to their second choice job, they are contributing to the economy as much as they otherwise would. Therefore, in a truly free market labor unions are unnecessary and counter productive.
However, with the power large employers can gain in our political world, the price of labor is already lower than it would otherwise be in a free market. Thus, there are two possible solutions to this problem: (1.) raise the wages of laborers to their natural level by restructuring the political system through campaign finance laws and lobbying reform or (2.) by allowing workers to organize and negotiate high wages as a unit. Clearly, given the existing political power already realized by corporate America, the former solution wold be difficult and timely. In the later solution, labor can be organized without the explicit help of the political system. Workers can use their collective power to raise wages without the intervention of the government, and have.
Labor unions (in most cases) are not raising their wages beyond what they would be in a free market, they are simply raising them to the level they would be under a truly free market. Labor unions create the same economic tension with large corporations that a large group of individual workers, acting in their own self interest create against a large market of potential employers. Unions are not the result of greed and laziness on the part of worker, but simply an economic response to balance the increased power of large politically interested companies.