The Economist quotes our Kate Bahn from here at Equitable Growth: Economist: Belligerent unions are a sign of economic health - Free exchange https://www.economist.com/finance-and-economics/2019/11/07/belligerent-unions-are-a-sign-of-economic-health: 'When economists argue that unions impose economic costs, they typically assume that markets are competitive. Across much of the American economy that is not always the case. Sometimes one or a few big employers dominate local labour markets, and can thus impose below-market wages on vulnerable workers, a condition economists call “monopsony”. In recent testimony in a congressional hearing on antitrust issues, Kate Bahn of the Washington Centre for Equitable Growth, a think-tank, noted that though wages in manufacturing industries are close to the level one would expect in competitive markets, those in some others, like health care, are not. For workers frustrated by stagnant pay, a work stoppage may be the only way to determine if an employer is constrained by competitive markets or abusing its market power. In the latter case, interventions by unions could prove economically useful. In a paper published last year, Mark Stelzner of Connecticut College and Mark Paul of the New College of Florida, argued that in the presence of monopsony power, collective bargaining can reduce the rents collected by dominant firms and increase economic efficiency. In practice, America’s diminished labour movement cannot on its own fix the problem of uncompetitive markets, or strike much fear into the hearts of employers. Nonetheless, workers are daring to try...
#noted #2019-12-09
