Economists Do It With Models

Warning: “graphic” content…

Bookmark and Share
Unions And Small Government…Wait, What?

March 15th, 2011 · 4 Comments
Markets · Uncategorizable

My latest piece over at the Huffington Post examines how these two concepts don’t have to be at odds with each other. (Disclaimer: I do not mean to contend that there are no differences between public and private-sector unions, nor am I unaware of the perverse incentives that arise with public-sector unions. I just think that proponents of small government are jumping on the anti-union bandwagon without fully thinking things through.)

Tags: Markets · Uncategorizable

4 responses so far ↓

  • 1 Dan L // Mar 15, 2011 at 5:35 pm

    A worthy point. But like all worthy points, it is completely irrelevant to the political debate. Most of the anti-union crowd is also anti-regulation (anti-OHSA, anti-minimum wage, etc.), so there’s really no tension there.

  • 2 Punditus Maximus // Mar 15, 2011 at 6:29 pm

    Yeah, you’re assuming the anti-union arguments are in good faith, and that’s just not so.

  • 3 Chris // Mar 19, 2011 at 3:52 pm

    Honestly, I think you should write a piece explaining why people in public-sector need unions more than anyone else.

    I recommend pointing out that the structure of the private-sector labor market more closely resembles perfectly competitive markets, while the public-sector is, in fact, one giant monopoly power– addressing the greater need for bargaining which doesn’t exist in markets where another employer can lure you away from Firm X with the promise of wages and benefits.

    Anyway, thanks for reading, love what you do on this site. Someday I hope to bring the wonderful world of Econ to people too.

  • 4 Alex J. // Mar 23, 2011 at 11:42 pm

    Chris. Workers can flow between public and private freely if they like. One reason this doesn’t happen is a large part of many public workers salaries is the present value of future pension payments.

    Your article is interesting but sort of outdated. Workplaces are very safe today, partly because of unions but mostly because of public pressure. But why it’s like that now is irrelevant. I’d say unions do more harm then good to the overall economy.

    Just look at GM. in 2005 an average US worker made $76 an hour in wages and benefits. Toyota on the other hand was only paying about $46 to US workers. Of course they went bankrupt overpaying like that.

    Now GM pays about $57 and Toyota pays about $51, and of course the unions are trying to get more money out of them. Do they really think GM or even Ford is competitive enough to start paying their US employees more than Toyota does? No but the unions don’t care.

    Just saying, GM will be bankrupt again in 5 years if they go down the same path.


Leave a Comment