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Pro-Monopoly Economists

As Prof. Mankiw notes, it’s strange to see well-known economists supporting the bill in Congress to eliminate the secret ballot in union elections, allowing instead for the union organizers to pressure workers to sign cards publicly that the organizers then collect and turn in. I wonder if those economists would also oppose the secret ballot in Congressional elections?

As Prof. Mankiw notes, unions are cartels of labors, so a second question is why economists like those cartels. Unions get a special exemption from anti-trust laws, but they are just monopoly sellers of labor. They aren’t even cartels that redistribute income from rich to poor— they do the opposite. Unionized workers are, I think, on average richer than the average person, so when they get higher wages by restricting the amount of labor hired those workers who lose their jobs in the industry end up with lower wages, and also end up paying the higher prices for things such as cars that the unions produce.

Anyway, here are the economists who signed the open letter that I’ve heard of in a scholarly context:

Katharine Abraham, University of Maryland
Philippe Aghion, Massachusetts Institute of Technology
Kenneth Arrow, Stanford University
Jagdish Bhagwati, Columbia University
Rebecca Blank, Brookings Institution
Joseph Blasi, Rutgers University
Alan S. Blinder, Princeton University
William A. Darity, Duke University
Brad DeLong, University of California/Berkeley
John DiNardo, University of Michigan
Henry Farber, Princeton University
Robert H. Frank, Cornell University
Richard Freeman, Harvard University
James K. Galbraith, University of Texas
Robert J. Gordon, Northwestern University
Lawrence Katz, Harvard University
Dani Rodrik, Harvard University
Jeffrey D. Sachs, Columbia University
Robert M. Solow, Massachusetts Institute of Technology
Joseph E. Stiglitz, Columbia University
Peter Temin, Massachusetts Institute of Technology
Lester C. Thurow, Massachusetts Institute of Technology
David Weil, Boston University
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  1. Jim Johnson
    March 2nd, 2009 at 08:52 | #1

    PS: Contrary to what you say here,my understanding is that higher levels of union density work to raise the wages/benefits of workers even where they do not belong to a union.

    Arguably the problem with teh auto industry is not unions but the lack of publicly supplied health care. That is where the cost is bearing most heavily on US auto makers.

  2. Jim Johnson
    March 2nd, 2009 at 08:49 | #2


    This post reads like a press release from CATO or some other ideology (fantasy) based outfit.

    First, there are all sorts of reasons to support unions. Empirically they increase political participation in elections. And there is lots of evidence too that they dampen the sorts of outrageous economic inequality (wealth and income) that we witness in the U.S.. The sort of market fundamentalism (unions are ‘cartels’ and so forth) you’re articulating on this is no more persuasive than it is elsewhere. (And massive inequality has been linked by good conservative political economists to political polarization and other ills, so this is not simply a socialist conspiracy.)

    Second, the secret ballot is useless against the sort of collective threats that employers typically issue during organizing campaigns. (Yes, it is a fact too that in response to organizing drives employers regularly threaten to shut plants, layoff entire sifts, move elesewhere and so forth. That, of course is illegal.) The SB may protect me against an individual threat (‘I will fire you if you support the union.’) but not do a thing about collective threats (‘I will shut the plant and move all the jobs to Timbuktu if you support the union.’). So all the right-wing complaints about trampling democracy and so forth don’t bother to ask the simple question: what is the secret ballot good for?

    Third, democracy does not entail the secret ballot. We do not use secrecy in Congress all the time, for instance. And card check was part of the original Wagner Act and was replaced by the demand for secret ballot elections only because opponents of unions pushed through the Taft-Hartley ‘reforms.’ In short, the use of secret ballot in union organizing is an artifact of political pressure on the part of employers.
    (We can set aside the issue of why they should have any standing in the matter of whether workers choose to associate or not.)

    Fourth, unfortunately, there is virtually no evidence of widespread intimidation and coercion of workers by union organizers. the well orchestrated corporate campaign against the EFCA has produced none.

    Fifth, if you are so concerned with democracy in the workplace, I am happy to follow out the implications of that too. But I suspect you don’t want to go there. What if stockholders actually were able to hold incompetent execs accountable? Ther is plenty of incompetence out there and ‘the market’ is doing very little to punish it. What if workers actually had some real influence on decisions? There are lots of reasons to recognize that the institutions we actually have are not the unique embodiment of an efficient, firm-based market economy.

    Finally, get out your intro micro text. Markets work when participants are roughly free and equal (parametric choice) and it is really quite difficult to see how bargaining between employers and individual employees fits that bill. (That they can make the sorts of collective threats I mentioned above is just one sort of remarkable asymmetry.)The economists you deride are not ‘pro-monopoly’ they arguably are interested in making sure the initial conditions demanded by well functioning markets might exist. That just might mean that unions, as vehicles of collective action on the part of workers, are justified by a commitment to markets.

    Jim Johnson

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