I live in a neighborhood with a homeowner’s association (HOA) and monthly dues of $60. I recently learned that $9 of that $60 is to pay for trash and recycling service. $9 per month is an amazingly low rate! When I lived just a few miles away and had to pick one of the 4 trash service providers the lowest rate was $18 per month. So why am I paying only half the price for the same service while living in this subdivision? Because it is the power and efficiency of collective bargaining.
When I only represented myself and I went to the trash service companies and I told them I didn’t want to pay $18 a month for their service they simply said they didn’t care. I had no negotiating power. But when our HOA went to several trash service providers and said we represent 300 homes and we want a lower rate per house to pick up all 300 houses, the trash service providers dropped the rate to just $9 per house.
If the law prevented collective bargaining, we would not be allowed to negotiate a group discount, but the law (currently) does not prevent collective bargaining and thus we can negotiate lower rates.
This lower rate is not only a benefit to those living in our subdivision, but it also benefits the trash services. When the truck drives down the street they simply pick up the trash at every house. The truck drivers don’t have to determine which houses are part of their service and which houses are not. This is part of the reason why the trash services will charge lower rates for large areas, because it decreases their time and thus their costs to do the pickups.
Collective bargaining is an important feature in capitalist societies to help control prices, especially prices for essential services. In this case it allows a win/win scenario where the resources of our society and be implemented most efficiently at a price that is satisfactory to all.