Editore"s Note
Tilting at Windmills

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October 19, 2003
By: Kevin Drum

UNIONS AND THE ECONOMY....Via Jeanne d'Arc, here's a pretty good article in the San Diego Union-Tribune about what the grocery strike really symbolizes:

"In the last 20 years, there has been a polarization of jobs into low wage and high wage jobs," said [Ruth] Milkman. "In Southern California it has been extreme. This is an attack on the remaining middle."

...."This is a strike about whether supermarket workers will be part of the middle class or the working poor," said Harley Shaiken, a University of California Berkeley professor who specializes in labor issues.

It's a short article, but it does a good job of explaining what's really going on with the American economy. If you want to know why this kind of stuff bothers me so much, read the article and then use your imagination to project current trends for another 20 or 30 years. If "Latin America" is what comes to mind, then you understand.

Free market economies depend on competition, which in turn depends on the ability of parties to bargain freely. But while all bargains have a stronger party and a weaker one, genuine bargaining requires that the strength of both sides is in most cases and most of the time at least roughly similar.

However, if corporations or entire industries are routinely allowed to bargain on behalf of a large number of owners and shareholders while workers are allowed to represent only themselves, no honest bargain is possible. Individual workers have no leverage in such a situation, and wages are inexorably pushed to subsistence levels.

Maximizing economic growth and minimizing subsistence labor should be the twin goals of any rich, modern society. That's why unions are important, both to the workers who belong to them and to the health of society as a whole: they keep workers out of poverty and, as we saw during the middle part of the 20th century, are perfectly compatible with strong economic growth.

Unionized workers won't always make fair demands, and they won't always get what they want. You take the good with the bad. But at least they have a fair chance to bargain, and that's all we owe them. The end result genuine free market capitalism with all parties bargaining from a position of strength is better for them, and better for all of us.

Kevin Drum 9:38 PM Permalink | Trackbacks

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