Saturday, October 16

Do Labor Unions benefit labor?

Economist, Claudia Goldin, suggest the benefit may not be as significant as we think. The following is an excerpt from Dr. Goldin's interview with The Region, a quarterly publication of the Minneapolis Fed. This is the core of Goldin’s response to a question on the role that labor unions played in increasing wages and reducing work hours for American workers:
[A]lmost all of these changes began before the great rise of private-sector unions and federal government labor regulations. Real wages have increased for a very long time, long before the rise of union activity and in sectors in which there were no unions. Real wage increases occur because workers are more productive, so it could be technological change or it could be education....

What about hours declines? Unions, as you know, were quite insistent about hours reductions. But hours declined in manufacturing from the early part of the 19th century to the midpart of the 20th century both per day and in terms of days per week. The big rise of unions in the United States was from the mid-1930s to the early 1950s. Thus the decline in hours preceded the rise of unions, although increased union activity in the late 1910s and in the 1930s may have furthered the decrease in hours and the increase in leisure.

1 Comments:

Blogger david burnstein said...

I agree with point 1, but disagree with points 2 and 3. Re: 2, one would think the rising tide of wages during the periods that coincided with union strength were largely due to the spillover of that strength. i.e., non union labor were indirect winners too. However, the point of Goldin's emperics is that too much weight may be given to this spillover and not enough weight to the trend in productivity. Wages were going up not necessarily b/c Unions were forcing employers' hands but b/c labor was becoming a more productive input.

Re: 3, are you saying that employers feared the threat of unionization prior to the creation of unions? I hypothesis is that one must understand the threat in order to be afraid.

2:19 AM  

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