Unless there’s a valid reason for treating these two political actors differently, moreover, imposing stricter rules on unions than corporations violates core American ideals of equal treatment. And, despite their differences, unions and corporations are actually analogous in the way that matters most.
Think about it this way. A union’s general treasury is made up of dues paid by employees. Under current law, a union can require employees to pay these dues in order to work at a unionized firm. But, labor law mandates that any employee who pays dues to the union gets the right to insist that the union not use any of her dues for politics. Why? Because we think it is unjust for a union to withhold access to an economic opportunity — a job — unless employees provide support for the union’s political agenda.
Although we might not be used to thinking about it this way, the corporate context presents a similar kind of problem. Just as employment in a unionized firm can be conditioned on an employee’s willingness to pay union dues, investment in corporate stock is conditioned on the shareholder’s willingness to give a company’s management the authority to decide how to spend corporate assets. Under current corporate law rules, this means if you want to take advantage of the economic opportunity to invest in a corporation and reap the profits that come with that opportunity, you have to surrender your share of the corporate assets to the firm’s political agenda.
The most common objection to treating unions and corporations as equivalents is that workers are “forced” or “compelled” to pay union dues, while investing is always voluntary. But, when you think about it, this turns out to be not quite right either. No one is actually “forced” to pay union dues because no one is actually ever forced to take a job with a unionized employer. In fact, in the U.S. today, only about 7 percent of the jobs in the private sector (and only around 12 percent of jobs if you include the public sector) are union. So, avoiding union dues requires you to work in any one of the (vast majority of) jobs that doesn’t have a union.
This is not to deny that avoiding union employment has very real costs. Indeed — and especially for workers already in a union job or for workers who’s occupation is heavily unionized — these costs can be significant. Working in the nonunion sector can mean lower wages and benefits, and changing jobs can also lead to losses in lifetime earnings (not to mention the stress and incumbent costs of changing careers). So, it’s fair to say that avoiding union dues can be very costly.
Now compare the shareholder context. Just like in the union context, no one is actually forced to buy stocks. But if, in order to avoid corporate politics, you choose not to invest in the stock market, you will bear some significant costs too. That’s because stocks are a critical investment vehicle that should be part of any well-advised investor’s portfolio. For example, although past performance is no guarantee of future results, over the last 80 years or so, the average returns on stocks was about 11 percent. For Treasury Bonds it was only 5 percent; T-bills brought in 3.7 percent. These figures vary depending on the period of time we pick – and at times stocks underperform other vehicles – but giving up stocks because you do not want to support corporate politics means giving up very real money. For, say, the middle class investor trying to put her kids through college, it can be a make-it or break-it difference.