Employee unions, whatever else they
do, perform as monitors for employees.
Employers monitor employees and similarly
employees monitor an employer's performance.
Are correct wages paid on time
and in good currency? Usually, this is
extremely easy to check. But some forms
of employer performance are less easy to
meter and are more subject to employer
shirking. Fringe benefits often are in nonpecuniary,
contingent form; medical, hospital,
and accident insurance, and retirement
pensions are contingent payments
or performances partly in kind by employers
to employees. Each employee
cannot judge the character of such payments
as easily as money wages. Insurance
is a contingent payment-what the
employee will get upon the contingent
event may come as a disappointment. If
he could easily determine what other
employees had gotten upon such contingent
events he could judge more accurately
the performance by the employer.
He could "trust" the employer not to
shirk in such fringe contingent payments,
but he would prefer an effective and economic
monitor of those payments. We see
a specialist monitor-the union employees'
agent-hired by them and monitoring
those aspects of employer payment most
difficult for the employees to monitor. Employees
should be willing to employ a
specialist monitor to administer such
hard-to-detect employer performance,
even though their monitor has incentives
to use pension and retirement funds not
entirely for the benefit of employees.