TNR has an interesting article about SEIU chief Andy Stern. SEIU has been one of the few big success stories for unions over the past decade. They have added one million workers over the past decade–a period in which most unions have contracted.One of the techniques Stern has utilized is offering something to businesses in return for the opportunity to unionize workers:

But, along with the confrontational tactics he had helped craft in his earlier days, Stern was now experimenting with more conciliatory approaches.During the 1980s and ’90s, SEIU had waged a scorched-earth battle with Beverly Enterprises, one of the nation’s largest nursing-home operators. Stern had once threatened to “use every means at our disposal” to expose Beverly’s labor practices and force the company to bargain with SEIU. The union staged a strike ending in a lockout, flooded the air with radio ads, and enlisted local politicians to denounce the company. But SEIU didn’t achieve any of its goals. So, in 2003, Stern approached Beverly COO David Devereaux with a deal: SEIU would lobby state legislatures to win funding for the nursing homes in exchange for organizing…

This seems crazy to me. Essentially, Stern is offering to pay businesses to let them unionize. Wouldn’t everyone be better off (except for Stern, the middle man) if workers just kept their union dues and the businesses spent their own money on lobbying?There has to be some pretty large transaction costs here.