Belligerent unions are a sign of economic health

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In America, unions represent 37% of public-sector workers and 7% of private-sector ones

could hardly have been more apparent. America’s most recent employment figures captured a jobs market in fine fettle: firms added 128,000 new workers in October, while unemployment held near historically low levels and wages rose at a respectable clip. The data would probably have looked better, however, had they not been depressed by a costly labour dispute, only recently ended, at General Motors .

In their book on organised labour, “What Do Unions Do?”, Richard Freeman and James Medoff argue that unions play two principal economic roles. They provide workers with a voice; through a union frustrated workers, who might otherwise simply quit, can communicate their dissatisfaction to the firm. Communication can raise efficiency by boosting morale, and by helping firms to retain workers and identify and fix problems. But unions also function as monopoly providers of labour.

Unions, though weakened, survive. In America they represent 37% of public-sector workers and 7% of private-sector ones. In 2018 nearly half a million American workers were involved in work stoppages, the most since 1986. That militancy owes something to labour-market conditions. One might expect periods of economic strength to be placid ones, because firms can be conciliatory.

But strong labour markets lend more encouragement to frustrated workers than pause to firms. Striking workers face the loss of pay and, potentially, of employment—threats that frighten less when good jobs are plentiful. Workers can more credibly withhold their labour from firms when there are no long lines of unemployed workers waiting to replace them. A strong jobs market may also give workers more to bargain for.

In the latter case, interventions by unions could prove economically useful. In a paper published last year, Mark Stelzner of Connecticut College and Mark Paul of the New College of Florida, argued that in the presence of monopsony power, collective bargaining can reduce the rents collected by dominant firms and increase economic efficiency.

 

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it gives Democrats a bad name The unions r affiliated with them

- If militant unions are a sign of economic health, Britain’s economy must have really flourished in the 1970s before Maggie!

Slow clap, well done 40 years late, but really, well done

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The decline in capex marks the calm before the storm for American workers. Once it picks up, each new round of capex of will see an increasing number of workers replaced by technology, particularly robotization, AI and automation. By 2030, UBI will be hottest topic in politics.

Unions traditionally regarded immigrants as a competitive threat to American workers. But after seeing their membership plummet in recent decades, unions have come to regard immigrants as a source of recruits.

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