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	<title>Comments on: Debunking the Notion That Unions Hurt Productivity</title>
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		<title>By: Yves Smith</title>
		<link>http://www.nakedcapitalism.com/2007/06/debunking-notion-that-unions-hurt.html#comment-111</link>
		<dc:creator>Yves Smith</dc:creator>
		<pubDate>Sun, 24 Jun 2007 04:14:00 +0000</pubDate>
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		<description>There was a very interesting post on the Economist&#039;s blog, Free Exchange, &quot;Do unions increase productivity?&quot;  (http://www.economist.com/blogs/freeexchange/2007/02/do_unions_increase_productivit.cfm).  Some illustrative arguments:&lt;br/&gt;&lt;br/&gt;&lt;i&gt;....unions often do very good work.  New York&#039;s Local 3 (electricians) is widely known for the slow pace at which union jobs proceed, but also for the extremely high quality of their installations.  This is not inconsistent with economic theory.  Union electricians get paid more to do the same work, which predicts that they will get more skilled workers than non-union shops, and the workers will be more keen to keep their jobs.  Plus the union, eager to prove that there is some sort of value proposition to employing their workers, enforces a higher standard on its members....&lt;br/&gt;&lt;br/&gt;[S]ome unions are equally well known for their lack of productivity; the American teachers&#039; unions are generally believed (by everyone outside of the teachers&#039; unions) to be the primary obstacle to improving America&#039;s appalling public schools.&lt;br/&gt;&lt;br/&gt;One possibility is that, to the extent that unions do increase productivity, they do so by forcing less competent workers out of the labour market, because they are not worth union pay.  In teaching, where the average wages are nothing special for the target, college educated applicant pool, this doesn&#039;t work.  Indeed, by compressing wages, it makes the problem worse.  In areas where there is an oversupply of graduates, such as English and history, teaching programmes choose from the applicants who have relatively few other opportunities; while in areas like science and math, where almost any qualified applicant has higher-paying alternative opportunities, they face permanent shortages. &lt;/i&gt;&lt;br/&gt;&lt;br/&gt;I have no doubt other factors come into play, such as cultural attitudes, and the prevailing  level of social safety nets.  &lt;br/&gt;&lt;br/&gt;And the focusing on collective bargaining may miss the broader issue of labor cartelization (after all, what are doctors, lawyers, and accountants?  They do appear to create more favorable employment conditions for themselves.   I  know of many un- and underemployed MBAs in their 50s, but no members of any true profession).</description>
		<content:encoded><![CDATA[<p>There was a very interesting post on the Economist&#8217;s blog, Free Exchange, &#8220;Do unions increase productivity?&#8221;  (<a href="http://www.economist.com/blogs/freeexchange/2007/02/do_unions_increase_productivit.cfm)" rel="nofollow">http://www.economist.com/blogs/freeexchange/2007/02/do_unions_increase_productivit.cfm)</a>.  Some illustrative arguments:</p>
<p><i>&#8230;.unions often do very good work.  New York&#8217;s Local 3 (electricians) is widely known for the slow pace at which union jobs proceed, but also for the extremely high quality of their installations.  This is not inconsistent with economic theory.  Union electricians get paid more to do the same work, which predicts that they will get more skilled workers than non-union shops, and the workers will be more keen to keep their jobs.  Plus the union, eager to prove that there is some sort of value proposition to employing their workers, enforces a higher standard on its members&#8230;.</p>
<p>[S]ome unions are equally well known for their lack of productivity; the American teachers&#8217; unions are generally believed (by everyone outside of the teachers&#8217; unions) to be the primary obstacle to improving America&#8217;s appalling public schools.</p>
<p>One possibility is that, to the extent that unions do increase productivity, they do so by forcing less competent workers out of the labour market, because they are not worth union pay.  In teaching, where the average wages are nothing special for the target, college educated applicant pool, this doesn&#8217;t work.  Indeed, by compressing wages, it makes the problem worse.  In areas where there is an oversupply of graduates, such as English and history, teaching programmes choose from the applicants who have relatively few other opportunities; while in areas like science and math, where almost any qualified applicant has higher-paying alternative opportunities, they face permanent shortages. </i></p>
<p>I have no doubt other factors come into play, such as cultural attitudes, and the prevailing  level of social safety nets.  </p>
<p>And the focusing on collective bargaining may miss the broader issue of labor cartelization (after all, what are doctors, lawyers, and accountants?  They do appear to create more favorable employment conditions for themselves.   I  know of many un- and underemployed MBAs in their 50s, but no members of any true profession).</p>
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		<title>By: Steve Diamond</title>
		<link>http://www.nakedcapitalism.com/2007/06/debunking-notion-that-unions-hurt.html#comment-110</link>
		<dc:creator>Steve Diamond</dc:creator>
		<pubDate>Sun, 24 Jun 2007 03:47:00 +0000</pubDate>
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		<description>Strange - he glosses over the fact that unionionization in France is about the same as in the US.  The fact that workers there are covered by nationwide collective bargaining misses the problem - employers here face much tougher workplace based unions and of course unions here face much tougher bosses on the shop floor.  Unions here could easily be a factor in limiting productivity and profitability - how else to explain the higher wages that unionized workers here receive?</description>
		<content:encoded><![CDATA[<p>Strange &#8211; he glosses over the fact that unionionization in France is about the same as in the US.  The fact that workers there are covered by nationwide collective bargaining misses the problem &#8211; employers here face much tougher workplace based unions and of course unions here face much tougher bosses on the shop floor.  Unions here could easily be a factor in limiting productivity and profitability &#8211; how else to explain the higher wages that unionized workers here receive?</p>
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