Economics Questions

Re: Krugman Loves Unions

Neodoxy — Fri, 01 Mar 2013 00:03:41 GMT

Thanks for the perspective Student, that actually makes a lot more sense than I thought it would, although I think that Krugman still has a massive hole in his logic in terms of how a lack of labor unions would slow the rate of real-wage growth which I think he implies in places.

Re: Krugman Loves Unions

Eric — Thu, 21 Feb 2013 00:53:37 GMT

Unions as free entities are defintly important! Its just Krugmans conflating free associating individuals with individuals who are lobbying to use political power to force their agenda, instead of just having a general safety net type situation with their fellow employees.

Re: Krugman Loves Unions

Student — Tue, 19 Feb 2013 05:01:16 GMT

It's a good question, since pining for unions strikes me as a bit of baby-boomer nostalgia. But judging from some of Krugman's op-eds it seems at least part of his support for unions comes from the role he believes that they play in the political process. They serve as an outlet for working-class Americans to be heard.

In principle, every American citizen has an equal say in our political process. In practice, of course, some of us are more equal than others. Billionaires can field armies of lobbyists; they can finance think tanks that put the desired spin on policy issues; they can funnel cash to politicians with sympathetic views (as the Koch brothers did in the case of Mr. Walker). On paper, we’re a one-person-one-vote nation; in reality, we’re more than a bit of an oligarchy, in which a handful of wealthy people dominate.

Given this reality, it’s important to have institutions that can act as counterweights to the power of big money. And unions are among the most important of these institutions.

You don’t have to love unions, you don’t have to believe that their policy positions are always right, to recognize that they’re among the few influential players in our political system representing the interests of middle- and working-class Americans, as opposed to the wealthy.

http://www.nytimes.com/2011/02/21/opinion/21krugman.html?src=tptw&_r=0

In terms of the role unions play in the labor market, I think he would argue that the labor market isn't perfectly competitive, so wages are not determined by supply and demand. Instead, we have a situation where employer's have some degree of market power that they can use to bid down wages. Unions would be one way of countering that in the same as hike in the minimum wage would.

http://krugman.blogs.nytimes.com/2013/02/16/minimum-wage-economics/

Of course, this argument strikes me as a little odd. "The problem with labor markets is that they are not competitve...so let's make them less competitive." :P But, I can still sympathize with where Krugman is comming from. It seems to him that workers have the deck stacked against them in both political and maket interactions. From that perspective, I'm sure unions do seem like a tried-and-true way for countering that imbalance.

Krugman Loves Unions

Neodoxy — Mon, 18 Feb 2013 17:17:45 GMT

Paul Krugman loves unions. He loves unions so much that he wants the entire American economy to bend over and happily accept, or even demand, large union membership inside the economy. He says it will make wages rise and increase the strength and size of the American economy.

I've written about Mr. Krugman's ~~fetish~~ love of unions here

Does anyone know this Nobel Prize winner thinks that unions will increase the size of real wages for the working class and that the labor market doesn't follow the laws of supply, demand, and marginal productivity? Furthermore does anyone know how Dr. Krugman reconciles his belief in sticky wages that cover the entire economy with his deep longing for larger unions?

Thanks.