State of the Unions

An article at the Bloomberg Business Week website makes interesting reading - a defence of trade unionism . It appears that a Obama nomination of pro-labour lawyer to the National Labor Relations Board has rattled some on the Right who accuse the unions of corruption and thuggery . For decades, Republican appointees to the board have weakened the laws protecting workers who want to organiSe. The balance in current law to which conservatives are so committed has tilted the playing field in favor of management - the reason why they are so enamored of the legal status quo.


Harry J. Holzer a professor of public policy at Georgetown University and a former chief economist at the U.S. Labor Department pointed out a few home truths .

" Without a doubt, unions raise the wages and benefits of their workers and tend to reduce economic inequality. The increase in economic inequality in America over the past three decades was at least partially caused by the decline in private-sector union coverage.

Beyond that, evidence shows unions reduce costly worker turnover, raise the skill levels of employees, and often lead to more productivity. And any negative union effects on employment or economic growth in the U.S. and abroad are mostly modest.

Unions aren’t to blame for recent firm closures and bankruptcies. Richard Freeman, of Harvard University, and Morris Kleiner, of the University of Minnesota, found no statistical effect of unionization on corporate-bankruptcy rates in a 1994 study. The U.S. economy destroys and creates millions of jobs each year, with tens of thousands of establishments closing and opening, often in the same industries. Little of this is driven by unions."

And the thuggery?

"A lot is written about union corruption, especially among the Teamster. But whatever sins some Teamsters have committed, tarring the entire movement with such charges because of one union is akin to claiming all business leaders are corrupt due to Bernard Madoff. “Thuggery” and violence are prominent parts of American labor history, but most of it has been perpetrated by employers and their cronies against pro-union workers."

Holzer also offers some home-truths for the unions , describing their limitations within capitalism .

"If markets are less than fully competitive, if alternative modes of production are limited, if unions generate more skilled and productive workers, or if nonunion demand is strong enough to absorb any workers displaced by unions, economic analysis predicts unions won’t reduce employment by very much or at all."