Traditionally, legislators and jurists have justified union and agency shops by resorting to the twin spectors of unequal bargaining power and free riders. Recently, the Supreme Court of the United States upheld the constitutionality of a state statute requiring an exclusive agency shop in the public educational labor market. Using this decision as a reference point, the authors present a Critical economic analysis of exclusive agency shops in the public sector labor market utilizing both a competitive and monopoly labor market model. They argue that the social and economic costs of a labor monopoly, the exclusive agency shop, may outweigh any possible benefits. Furthermore, they argue that the free rider hypothesis does not have an empirical foundation. Thus, they conclude that the arguments in favor of intervention in the competitive labor market are not persuasive.
Robert J. Staaf and Edwin G. West,
Agency Shops and the Public Sector: An Economic Analysis,
33 U. Miami L. Rev.
Available at: http://repository.law.miami.edu/umlr/vol33/iss3/4