Resurgent unions and the global economy

[Omaha Steve]

http://www.businessday.co.za/articles/topstories.aspx?ID=BD4A676171

Posted to the web on: 10 January 2008
Resurgent unions and the global economy
Kenneth Rogoff

WILL the political resurgence of labour unions throw a wrench into the wheels of globalisation? Or will their growing strength serve to make globalisation more sustainable by fostering greater equality and fairness? One way or the other, unions stand as a major wild card for the evolution of our economic system this year and beyond.

Unions’ rising influence is evident in many recent events: German Chancellor Angela Merkel’s controversial deal to raise minimum wages for postal employees; several US presidential candidates’ open misgivings about trade and immigration; and the Chinese leadership’s nascent concerns about labour standards.

Along with their political clout, unions’ intellectual respectability is also experiencing a renaissance. After decades of vilification by economists for raising unemployment and strangling growth, the union movement is now receiving backing from thought leaders such as Paul Krugman, who argues stronger unions are needed to counter globalisation’s worst excesses.

The sudden emergence of unions as a political force is particularly surprising in the US, where private-sector union membership has fallen from 25% in 1975 to 8% today. Only the public sector, where the membership rate is 35%, has remained a union bastion.

Today, US political leaders such as Congressman Barney Frank want to bring back unions. But there is good reason to be sceptical. For a relatively poor country such as China, real unions could help balance employers’ power, bringing quality-of-life benefits that outweigh the growth costs.

But, for the US and rich countries in Europe, the argument that stronger unions would bring more benefits than costs is far more dubious.

FULL story at link.

[stravu9]

1. We Need John MORE THAN EVER!

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[AX10]

2. Collective bargaining is the only tool the worker has against...

the out of control corporations these days.

"For rich countries, income redistribution is much better handled through taxes and benefits system, rather than by government edicts to strengthen unions. The rich today pay so little in taxes in many countries that it would be a big improvement simply to move to a flat tax, with a very high exemption level so that lower-income families pay nothing."

So the rich would rather pay more taxes then have "free trade" curtailed. Interesting.