How inflation pushes people toward collectivism

The Wall Street Journal reported earlier this month that 50,000 drivers recently (exactly when is unclear) officially signed cards to join the California Gig Workers Union (CGWU). That is a formality given that the union was already recognized by the state as the workers’ representative regardless of whether workers had signed on. Still, it’s not uncommon for people in organized workplaces who don’t particularly like their company’s union to nevertheless sign up as members. The workers may fear that the union won’t provide services, such as bringing grievances to management, if they’re not card-carrying members. Members may also believe that signing up gives them more say in the union’s activities.

Another reason fueling the sign-ups is, well, fuel. Uber and Lyft don’t cover the cost of gas, which rose from $4.66 a gallon in California in 2025 to $6.26 today, according to AAA. That’s eaten up a huge chunk of the drivers’ earnings, and many are understandably upset.

“The gas is killing me,” Uber driver Artur Gevorkyan told the Journal. But while the drivers are hurting, it is not something that Uber or Lyft did to them. It is a problem that everyone is dealing with. The newly organized drivers may yet demand that Uber and Lyft offset the fuel costs and join the union in pressuring the companies to do so.

But transferring the costs of fuel from the driver to the union doesn’t solve the underlying problem. The end result will be worse. Because costs tend to trickle down to the consumer, the cost of using rideshares will go up, both because of the fuel surcharge and any other new benefits the union will demand. This will cause the same chain of events as in other industries: customers will use rideshare services less, rideshare drivers will get fewer pickups. Every group will be worse off than they were before, except for the union reps.

Inflation is a particularly insidious economic ill because it causes people to lose faith in the free market system itself. If people work hard and save but their savings diminish, or if they get raises but still feel like they’re struggling to pay bills, then things like collective bargaining become more attractive because that can seem like a way to protect themselves even if, ultimately, it just contributes to the underlying problems.

The way out of this is to alleviate inflation. The current administration needs to find a way out of both its destructive tariff wars with other countries – the main function of a tariff is to make goods more expensive than they would otherwise be – and its war with Iran, which has driven fuel prices to record highs and raised transportation costs that also trickle down to the rest of the economy.