Labor unions

Labor unions are associations of workers formed to bargain collectively with employers. Objectivism holds that forming one, joining one, and striking are exercises of the right of free association and of the right to set the terms on which one will work, and that what is objectionable about actual unions is not the association but the body of law that makes membership compulsory, grants exclusive bargaining status, and exempts union conduct from rules that apply to everyone else.

“No coercive monopoly has ever been or ever can be established by means of free trade on a free market. Every coercive monopoly was created by government intervention into the economy: by special privileges, such as franchises or subsidies, which closed the entry of competitors into a given field by legislative action.”
~ Ayn Rand, "Antitrust: The Rule of Unreason", The Voice of Reason

Ayn Rand did not write a dedicated essay on labor unions. The position stated here is derived from her account of rights, force, and coercive monopoly, and the article says which parts are derivation rather than citation.

The right to associate and to strike

Start with what a job is. Employment is a trade: an employer offers terms and a worker accepts or refuses them. Nobody is entitled to another person's labour, and nobody is entitled to a particular job at a particular wage. See Trader Principle and Rights.

Everything a voluntary union does follows from that.

Workers may agree among themselves to ask for better terms, and to negotiate through a representative they choose. Two people making an agreement do not lose the right to make it by being two hundred.
Workers may quit, individually or together. A strike is a collective refusal to work, and a refusal to work is not force. Nobody may be compelled to labour on terms he rejects; that is the meaning of the prohibition on involuntary servitude.
An employer may in turn refuse those terms, hire replacements, or close.

None of this requires special legislation and none of it violates anyone's rights. This is the answer to the forum's question about what role unions would have in a free society: the role of any voluntary association, which is whatever its members can persuade others to agree to.

Why the answer is not a ban

The forum raises the argument, attributed to some Objectivists, that unions should be prohibited because they exert collective force on employers, because politicians court them, and because they are collectivist in character. The member who raised it also identified the flaw, and he was right.

A ban is the initiation of force against people who are doing something they have a right to do. That a group's ideas are collectivist is not grounds for prohibiting the group; on the same reasoning a government could ban a political party. That politicians court a constituency is a fact about politicians. And "collective force" is a misdescription: a mass refusal to work applies no force at all, however much economic pressure it creates. Objectivism distinguishes sharply between economic power, which is the power to offer or withhold a trade, and political power, which is the power to compel. See Initiation of force and Free speech for the same distinction applied to associations.

So the Objectivist position is not that unions should be illegal. It is that they should be ordinary voluntary associations with no legal powers nobody else has.

What the objection is actually to

The substance of the criticism is directed at privileges granted by law, not at association. The recurring ones:

Compulsory membership. Where a worker must join a union, or pay it, in order to hold a job in an industry, the arrangement is not an association he entered. Money taken from him under that compulsion and spent on political advocacy he opposes compounds it: the wrong is the compulsion to pay rather than the speech that follows. See Free speech.

Exclusive representation. A law making one union the sole legal bargaining agent for all workers in a unit, including those who voted against it and those who would prefer to negotiate individually, removes their right to contract on their own behalf.

Legal immunities. Where union conduct during a strike is exempted from ordinary law, or where employers are legally required to bargain and forbidden to replace strikers, the state has placed its thumb on one side of a private negotiation.

Public-sector unions are a distinct case, because the employer is a government spending taxpayers' money and the counterparty across the table is elected in part by the union's members. There is no owner with an interest in resisting.

The pattern is the one Rand identified generally: what turns an association into a coercive monopoly is legislative privilege, not size. A union that can be left, and whose demands can be refused, is a party to a negotiation. A union nobody may leave and whose terms nobody may decline is an arm of the state.

Wages

A separate strand of the criticism is economic rather than political, and it should be kept separate because it is a factual claim rather than a moral one.

The claim is that unions cannot raise real wages generally, because the level of real wages is set by the productivity of labour, which is set by the accumulation of capital and the state of technology, and bargaining redistributes rather than creates. On this view union gains in one trade come at the expense of workers elsewhere, of consumers, or of investment that would have raised wages generally.

This is standard free-market economics rather than a distinctively Objectivist doctrine, and Objectivism does not stand or fall on it. The moral argument above holds whether or not the economic one does.

Common misunderstandings

That Objectivism is anti-union. It is against compulsory unionism and legal privilege. A voluntary union in a free market is an exercise of rights.
That strikes are coercive. A strike is a refusal to work. Violence against replacement workers, destruction of property, and preventing others from entering a workplace are coercive, and they are ordinary crimes committed during a strike rather than features of striking.
That an employer has a right to his workforce. He has a right to his property and to offer terms. He has no claim on anyone's labour.
That collective bargaining is inherently collectivist. Individuals delegating negotiation to a representative they chose are acting individually. What is collectivist is treating the group as having authority over members who did not choose it.
That because unions historically improved conditions, the legal privileges were justified. The historical claim and the rights claim are separate questions, and improvements in real wages over the industrial era track productivity growth far more closely than union density.

Discussion

Should Labor Unions be banned ?
Unions (the role in an ideal capitalist society)
question about unions (a plain explanation requested)
Group rights to free speech (compelled dues funding advocacy)

References

Rand, Ayn. "Antitrust: The Rule of Unreason". The Voice of Reason: Essays in Objectivist Thought. New American Library, 1989.
Rand, Ayn. "Man's Rights" and "The Nature of Government". The Virtue of Selfishness. New American Library, 1964.
Rand, Ayn. "America's Persecuted Minority: Big Business". Capitalism: The Unknown Ideal. New American Library, 1966.

External links

Competition at the Ayn Rand Lexicon