10 March, 2009

Economists for EFCA

So, while I'm busy having no life in preparation for this weekend, here I am reading about union mobilization in Latin America and it reminds me of the renewed debate over unions here in the US. Brad DeLong provides the text of a pro-Employee Free Choice Act letter, signed by a raft of economists. It makes the essentially progressive argument that a more pro-labor negotiating framework is not just good for self-interested union bosses and their patsies in electoral politics, but also for broad and sustained economic growth. Soaring productivity and stagnating wages means that the gains from productivity are being funnelled almost exclusivly upward to executives who do things like invest in high-risk financial bubbles rather than to middle-class workers who invest in things like homes, cars, health care and consumer goods.

I just thought the collection of economists was interesting. Some outright progressives like Dean Baker and James Galbraith, but also a lot who I would call more liberal/centrist in their politics such as DeLong, Rodrik, and Sachs. Also notable are Jagdish Bhagwati and Robert Solow. There is also quite the raft of MIT signers...but no Krugman!


spencer said...

I don't think it's obvious that we have fewer unions than is optimal. Production has shifted away from factory towns, where workers could easily be exploited, to a service economy, where labor markets are more competitive and unions don't make as much sense. Inequality is at very high levels, but there are better solutions to this, like more progressive taxation, better education, and universal health care.

Elliot said...

No, that argument definitely makes sense and I didn't mean to claim that anything was "obvious". I just thought it was interesting to see some very respected professionals lining up behind EFCA when it seems like the almost completely dominant conventional wisdom in the debate (outside of academia, at least) is that unionization is per se a drag on the economy and that the only reason to support it is crass political reasons (ie electing more Democrats).

But I do thing that there are deeper "political" reasons to support EFCA - along the lines that the framework for labor-management relations is an important political institution in capitalist democracies. Handicapping that framework towards one side (or the other!), inasmuch as it skews negotiations, is a violation of a political right to be properly represented.

What does seem pretty clear (I won't say obvious...) is that more workplaces want to be unionized than currently are, and at least part of the reason for that is a set of faulty institutions that allow management more heft in negotiations - either through violating the spirit and/or letter of labor laws - than they should in in a negotiating framework that seeks to mediate fairly between the two.

spencer said...

The argument that labor unions are a necessary device to organize the working class (perhaps as a way to eliminate free riders) is an interesting one. But it's hard to know where the "fair" point is in any negotiation between the interests of many different parties (workers, corporations, consumers). So while perhaps more workplaces would unionize under EFCA, it's not clear that this is necessarily desirable.