In all seriousness—unions have never been “great,” but they should be.

A union is a corporation that sells labor as a product. In a competitive market, it should succeed like any other enterprise: by delivering value to its owners and allocating capital and resources efficiently.

Unions were not created as ordinary corporations, though, but as collectivist organizations “by the people for the people.” The union was supposed to represent workers and look out for their interests, drawing on a fantastical model of benevolent leadership while fighting capital and empowering the masses.

If this sounds familiar, it should. It mirrors Marxist economic theory where labor is the lifeblood of the system and class struggle replaces market negotiation.

But unions are needed. History has shown that coercion and exploitation are easy when the alternative is starvation or exposure. Charity exists as a counterbalance, but forced charity inevitably becomes political and extractive.

The problem with collectivist organizations is simple: someone must be in charge, and human self-interest doesn’t disappear because we declare an institution “fair.”

Once organizations scale, political incentives replace economic ones.

Modern unions function as legally protected labor cartels — restricting entry, fixing labor pricing, suppressing individual negotiation, and capturing rents. Like every cartel in history, those rents concentrate at the top.

Unions are made up of people — and the same traits that create corporate executives exist inside union leadership. Unlike private firms where performance can be measured economically, unions evolve through political processes and inevitably drift into personality-driven power structures.

Economic systems don’t reward the nicest people — they reward those best at exploiting the system they operate in.

Capitalist Approach to Labor

So what about a thought experiment where we end the dalliance with Marxism and embrace a capitalist approach to labor, one that generates better outcomes without pretending altruism can replace incentives?

The core failure of the current system is forced exclusivity and benefit lock-in. Remove those two and labor representation becomes a competitive market overnight.

First: Convert Unions into CLOs

CLOs are federally chartered, pass-through labor companies that:

  • Employ workers as the employer of record.
  • Administer portable, worker-owned benefits.
  • Compete to supply blocks of labor to firms.

Workers can switch CLOs at will. Benefits follow automatically.

These are profit-seeking organizations, but they operate under hard constraints around benefit solvency and mandate.

One of the problems with the current framework is that neither management nor union leadership bear long-term consequences. Executives chase short-term optics and exit; union bosses chase political wins. Companies fail, workers lose, leadership walks away intact.

CLOs force both sides to care about outcomes.

Legal & Regulatory Framework (minimal, durable)

  • Federal chartering: Charter via statute; registration with a single regulator (CLO registrar) with light prudential standards (solvency, disclosures).
  • Ownership: Public or private; let the market decide which works best.
  • Pass-through status: Amend the Internal Revenue Code to designate CLOs as pass-throughs if:
    • ≥90% of gross receipts from labor services,
    • ≥90% of benefits spend flows to worker-owned accounts,
    • independent board audit of worker-benefit liabilities.

CLO Governance & Fiduciary Duties

  • Dual fiduciary duty: To (a) worker-benefit solvency and (b) shareholder capital, with benefit solvency senior (like insurer reserve priority).
  • Independent actuary & auditor: Annual opinions filed with the registrar.
  • Disclosure pack: Rate cards, benefit summaries, historical fulfillment, safety incidents, training completion, and wage distributions.
  • The registrar enforces disclosures, solvency tests, and BPR integrity.
  • DOJ enforces anti-coercion and existing antitrust law (no bespoke caps).

ERISA-Compatible Portability

  • A Benefits Portability Registry (BPR) records each worker’s permanent health policy and retirement entitlements.
  • Preemption: Federal law supersedes state impediments to portability.

Worker-Owned, Portable Benefits

  • Health (Permanent Individual Contract)
    • Owner: Worker; Payer: CLO.
    • Characteristics: Non-cancelable, guaranteed renewable; no lapse on exit; no pre-existing condition reset; COBRA-style continuity unnecessary.
  • Training: Experience-rated premiums paid by CLO; portability enforced by BPR.
  • Paid time off (PTO), disability, and training stipends accrue to the individual ledger and travel with the worker.
  • Retirement
    • Portable pension/401(k): Immediate vesting; zero transfer penalty; T+1 rollover across CLOs.
    • Employer match: Flows to the worker account daily (no cliffs).

Mandatory KPIs & Public Dashboards “Food Labels”

  • Worker churn by CLO (voluntary exits per 100 workers, monthly).
  • Wage growth vs. fee growth (transparency discipline).
  • Training uplift (share of hours at higher skill tiers).
  • Safety rate per 100,000 hours; service-level agreement (SLA) credits issued.
  • Time from offer to start and benefits-transfer turnaround time.
  • All GAAP and other financial disclosure requirements apply, with no carve-outs.

Anti-Coercion Criminal Statute (model text)

Coercive Retention of Labor. Whoever knowingly uses threats, deception, blacklisting, withholding earned compensation or benefits, or abusive process to materially hinder a worker’s exit or benefits transfer from a CLO commits a felony punishable by up to 20 years; life when violence, restraint, or conspiracy is involved. Each affected worker constitutes a separate offense.

Economic & Middle-Class Impact

  • Wages & conditions: Competition for talent + transparent fee stacks raise take-home and reduce hidden skims.
  • Mobility & entrepreneurship: No benefit loss when switching or founding a small business; COBRA becomes obsolete.
  • Lower employer overhead: One contract vs. duplicative HR stacks.
  • Policy quality: “Worker protection” rules apply system-wide to CLOs—less brinkmanship, more durable design.

Risks & Mitigations

  • Concentration risk: If a few CLOs dominate, new entrants can bid immediately; there are no licensing bottlenecks, and BPR APIs remain open. Normal antitrust law remains in force, and anti-coercion law applies at both the employee and marketplace levels. A new entrant’s only constraint is its ability to satisfy its benefits obligations.
  • Underfunded benefits: Statutory reserve ratios + independent actuarial opinions + daily funding sweeps through the BPR.
  • Quality variance: Public SLAs, safety stats, and training metrics; firms churn away from poor performers; workers exit instantly.
  • Regulatory creep: Sunset reviews; bright-line preemption protecting portability and anti-coercion while prohibiting new exclusive privileges.

Why This Doesn’t Become Another Rent-Seeking Industry

This system can’t evolve into another cartel because:

  • workers can switch instantly
  • benefits are legally owned and portable
  • no exclusivity is permitted
  • pricing is public and comparable
  • new entrants face no licensing choke points
  • normal antitrust law applies

Retention must be positive-sum. Coercion becomes criminal.

Transition Strategy

  • Voluntary conversion: Existing unions may become CLOs or partner as talent guilds providing training/placement funnels.
  • On-ramp incentives (sunset in 3–5 years): Tax credits for early CLO adoption, grants for upskilling academies, one-time migration allowances for legacy pensions and health plans.
  • Grandfathering: Existing collective bargaining agreements (CBAs) honored to term; new work must route through CLO blocks or direct hire (status quo allowed during transition).

How this new marketplace works:

Block Bidding

  • Firms post requisitions (quantity, skill tiers, shifts, SLAs, safety/clearance requirements, location).
  • CLOs submit all-in bids: wage floor + CLO fee + benefits load + statutory on-costs.
  • Firms may mix-and-match multiple CLOs per site/shift.

Example Cost Stack (illustrative)

  • Role: CNC machinist, third shift, Midwest.
  • Wage floor: $40/h
  • Benefits load (health + retirement + PTO): $8/h
  • Statutory on-costs (payroll taxes, workers’ compensation): $3/h
  • CLO fee (ops + margin): $4/h
  • Total bill rate: $55/h
    Transparency forces fee competition and rewards better training (higher productivity supports higher wage floors without raising bill rates).

Training-as-a-Profit-Center

  • In-house academies & credentials: OSHA, NIMS, AWS, CompTIA, CDL, etc.
  • Paid upskilling between assignments: Workers remain on payroll.
  • Outcome-linked pricing: Tiered rate cards reward certified skills (documented by CLO and verified on BPR).
  • Capital cycle: CLOs invest in curricula to unlock higher-margin placements.

Procurement & SLAs

  • Service levels: Fill time, no-show rates, injury rates, training compliance, quality-assurance defects per 1,000 hours.
  • Remedies: Credits for SLA breaches; termination for cause; step-in rights to reassign blocks across CLOs.

Labor Mobility—By Design

  • No exclusivity (workers or firms).
  • Same-day switching: Worker can accept a better offer tonight; benefits and accrued PTO follow automatically via BPR.
  • No non-competes / no liquidated damages: Prohibited by statute.
  • Retention must be positive-sum: Bonuses and career pathways, not lock-ins.

Industry Illustrations

Airlines:

  • Multiple CLOs supply ramp, cabin, and maintenance, repair, and overhaul labor across hubs; carriers smooth cycles by flexing blocks without layoffs; workers keep benefits between carriers.

Construction:

  • CLOs bundle certified trades per project phase; training ladders raise journeyman wages; safety records priced into bids.

Healthcare:

  • Capacity managed via blocks for nurses/techs; burnout mitigated by bid-based differentials and rotation credits; portable health is moot but retirement/PTO portability unlocks mobility across systems.

Sample Contract Snippets

Master Services Agreement (Firm ↔ CLO)

1. Scope: CLO supplies [N] workers at Tier [X] for Site [Y].
2. Rate: All-in bill rate per Exhibit A. No exclusivity.
3. SLAs: Fill time, no-show ≤ Z%, incident rate ≤ R.
4. Remedies: Service credits per Table 1; termination for cause on 2x breach.
5. Data: CLO updates BPR daily with hours, credentials, incidents (de-identified).

Worker Agreement (CLO ↔ Worker)

1. At-will employment; no non-compete or non-solicit.
2. Benefits: Permanent health policy ID [#], retirement custodian [#]; worker owns.
3. Switching: Immediate exit permitted; CLO to initiate BPR transfer within 24h.
4. Retention: Only voluntary bonuses; no forfeiture on exit beyond unearned pay.

We don’t have to accept the current system.

The political forces that have captured labor’s wealth will cry foul, but entrenched interests always do when rents are threatened.

Inspiration credit for this note goes to Harold Daggett, whose threat to “bring the economy to its knees” made it clear that modern unions no longer bargain for workers, they ransom the economy.

Harold Daggett, President of the ILA, lives in a 7,000+ square foot mansion, owns a 76-foot yacht, drives a Bentley, and earns roughly $900,000 a year.

By any measure he is management, just operating inside a protected parallel market pretending to exist for collective benefit.