« Predistribution, human capital & equality | Main | The machismo paradox »

September 10, 2012

TrackBack

TrackBack URL for this entry:
http://www.typepad.com/services/trackback/6a00d83451cbef69e2017d3bf34a0c970c

Listed below are links to weblogs that reference Conservatives - support unions!:

Comments

Feed You can follow this conversation by subscribing to the comment feed for this post.

Francis Sedgemore

Chris - As you know, correlation does not equate to causation. I can show you a clear correlation between historical sunspot numbers and terrestrial political revolutions, but of course it's entirely meaningless.

The paper you cite makes comparisons between very different countries and socio-economic realities, and I take issue with its referral to the "Nordic countries". Although they have in common an absence of national minimum wage laws, the Scandinavian countries are quite different in their political and economic characteristics.

Denmark, about which I can speak from personal experience as a taxpaying resident and trade union member, has minimum wage agreements negotiated by trade unions and union groups on an industry basis. But, more importantly, Denmark has a 'hire and fire' economy that is arguably more dynamic and efficient than the British or German models, which, like all national economies, are a product of national economic circumstance.

Denmark's relatively free-market economy is combined with a welfare system that leads to only a modest income drop on losing one's job, and there are extensive, state-funded opportunities for employment retraining. National minimum wage legislation may not be necessary in such a situation, but that is certainly not a consensus view in Denmark, and in any case it has relatively little to do with union membership.

Danish trade unions have guild-like characteristics, and that bothers me, as it can so easily result in closed shops. While industry-based wage floors can work in the more established sectors of the economy, they do not help in the emerging markets, and for the increasing numbers of people working in industries in which unions have yet to effectively organise. Denmark's market economy may be more dynamic than that of UK plc, but that doesn't mean it is any better suited to 21st century post-industrial reality.

marc

Small positive correlation. With a massive error term, probably enough to make it the correlation statistically insignificant. With x= 40, y ranges from about 0.6 to 2.1. With x=75, y ranges from around 1.3 to 1.9. So can have 2%-ish GDP growth with 75% union density or 40%. The x-axis doesn't seem to be explaining very much.

chris

@ marc - whether the correlation is statistically significant or not depends which points you include/exclude. It is the case that long-run economic growth is much the same from one rich country to another, implying that there's little that anything can explain about growth differences:
http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2009/07/can-governments-increase-growth.html
But my point is merely that the rightist view that strong unions are bad for an economy is not obviously true, and might be false, because there are several theoretical mechanisms linking the two, at least one of which implies that unions might help the economy.

JohnO

Inasmuch as "conservatives" support the dominance of market capitalism they will oppose unions. Capital has the choice of only entering a market when they can be profitable. While workers, since they don't have money or sustainable land, are forced to enter the market at all times for their lively-hood, even when it is not profitable or beneficial. Unions with the ability to negotiate, strike, and when successful accumulate capital, can then offer the workers the possibility of not entering the market when it is not profitable for them to do so, while offering them a full-time lively-hood.

SimonF

Do the unions in Nordic countries enforce national pay rates in, say, their equivalent of NHS, teaching and other services?

I ask out of curiosity rather than to make apolitical point.

Tim Newman

Unions may well in some circumstances be food for the economy. Whether British unions with British union leaders are good for the British economy is another matter entirely.

Francis Sedgemore

"Do the unions in Nordic countries enforce national pay rates in, say, their equivalent of NHS, teaching and other services?"

Effectively, yes. And they also have a great influence in limiting pay differentials within these professions.

Does this 'disincentivise' managers? In my own (former) trade, academia, probably not, but then academics are universally bad at managing. The stakes are too low to encourage them to pull their fingers out.

As for schools and hospitals, in Denmark these institutions appear to be well run, and, among those in my social circle at least, those who work within the Danish education and health sectors tend to be happy campers. Well, happy when compared with the whingers on this side of the North Sea.

guthrie

Whingers? You've got to be joking, given how much higher education and the NHS have been pushed about, ripped apart and finally dropped from a great height onto a hard surface, over the last decade.

Statistical Arbitrage

Hi Cris, I agree. I suspect that what's true of minimum wages might also be true of other aspects of regulation. Elf n safety laws also increased after the decline of unions.

celine handbags

You've got to be joking, given how much higher education and the NHS have been pushed about, ripped apart and finally dropped from a great height onto a hard surface, over the last decade.

The comments to this entry are closed.

Why S&M?

Blog powered by Typepad