13-02-2003 19:50									#1
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hello? hellooooo?

	13-02-2003 20:05									#2
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Best thread ever!

	13-02-2003 20:05									#3
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Best thread ever!

	13-02-2003 20:14									#4
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How is this possible, it posted my tread but not my post

Oke here is post:

http://story.news.yahoo.com/news?tm..._1045143315&e=2

	13-02-2003 20:30									#5
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In a report based on more than a thousand studies of the effects of labor unions and collective bargaining on the performance of national economies, the Bank found that workers who belong to trade unions earn higher wages, work fewer hours, receive more training, and have longer job tenure on average, than their non-unionized counterparts.

Duh. Unions are the reason that modern western nations did not have Commie revolutions. Unions should be nurtured and encouraged.

	13-02-2003 21:13									#6
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<----- V.P., Local 910

	13-02-2003 21:45									#7
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Unions are good for Work Safety but bad for Employment.
Ban Unions!

	13-02-2003 22:56									#8
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From the article:

"High rates of unionization also lead to lower inequality of earnings, especially for women and minority groups, and can improve economic performance in the form of lower unemployment and inflation, higher productivity, and speedier adjustments to economic shocks, according to the report, 'Unions and Collective Bargaining: Economic Effects in a Global Environment.' "

	13-02-2003 23:06									#9
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The World Bank is a little slow to come around. Kind of like some of the people here at poly. But they will come around eventually.

	14-02-2003 01:30									#10
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Just a pity they massively contribute to unemployment.

See Germany.

	14-02-2003 02:10									#11
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There's never evidence for that and I don't think its true. When workers get pay raises they spend more money which creates further job growth. Appearantly even the World Bank sees that now.

	14-02-2003 02:15									#12
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OK, I'll bite.

Lets go to the source, and see what the
World Bank has to say about this.

quote: Workers who belong to trade unions earn higher wages,

No surprise.

quote: work fewer hours

No surprise.

quote: receive more training

ditto

quote: and have longer job tenure on average, than their non-unionized counterparts

ditto.

quote: On the other hand, temporary layoffs can be more frequent in unionized firms.

Somebody forgot to quote this part.

quote: At the macroeconomic level, high unionization rates lead to lower inequality of earnings

The results vary across country. See below.

quote: and can improve economic performance (in the form of lower unemployment and inflation

The results vary across country. See below

quote: higher productivity

This is to be expected, given higher wages

quote: and speedier adjustment to shocks

See the temporary layoffs comment above.

Now for the unemployment effects. The results here are driven by different types of labor markets, a point which is not made clear in the original link in this thread. Labor markets in various countries can be divided into three groups: developing, newly industrialized (NIC’s), and industrialized.

In developing countries, workers tend not to be very mobile, tend not to have information about working conditions, and often do not have access to institutions which can enforce explict or implicit employment contracts. In this case, an employer can act as a local monopsonist, effectively the only buyer of local labor. A monopolistic labor supplier (ie union) facing a monopsonistic employer will both increase wages and increase employment. You can find this in any decent micoreconomics text.

In NIC’s you have a mixture of less developed and developed labor markets. Hence you get a mixture of effects.

quote: In developing and middle-income countries, the markup can be higher or lower. For example, it appears high in Ghana, Malaysia, Mexico, and South Africa but relatively low in the Republic of Korea (in 1988, before the expansion of unionism).

Note also the observation that

quote: Countries with highly-coordinated collective bargaining tend to be associated with lower and less persistent unemployment, lower earnings inequality, and fewer and shorter strikes than uncoordinated ones. In particular, coordination among employers (my emphasis) tends to produce low unemployment.

While I cannot find a copy of the whole study, this appears to indicate that coordinated labor relations as practiced in East Asian NIC’s appears to smooth out labor market problems while still developing.

In industrialized countries you have the standard effects of increased wages and increased unemployment. As the report notes,

quote: union members, and other workers covered by collective agreements in industrial as well as in developing countries, get significantly higher average wages than workers who are not affiliated with a trade union. The wage markup can be larger in the United States (15 percent) than in most other industrial countries (5 to 10 percent).

quote: fragmented unionism and many different union confederations are often associated with higher inflation and unemployment.

though it is not clear from the press release whether the authors controlled for level of industrialization in making this finding.

On the inflation front, unions can be considered labor monopolists. In setting wages, the union needs to balance gains or losses to existing members vs. gains in employment for new members. A competitive labor market only takes into account the latter effect in determining wages. A monopoly union would therefore change its wages only half as much either up or down as a competitive market would under similar conditions. So the inflation result is not surprising, but only half the story.

Lastly, studies on the effect of unionization or relative wages are notoriously difficult to do. For example, unionization can cause a reduction in employment in one sector, and a reduction in wages as people flow to other, non-unionized sectors. A good study must take account of both effects. Of the “over a thousand” studies cited, I would be willing to bet that less than a hundred are done well.

Class dismissed.

	14-02-2003 02:19									#13
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quote: Originally posted by DuncanK There's never evidence for that and I don't think its true. When workers get pay raises they spend more money which creates further job growth. Appearantly even the World Bank sees that now.

Please see H. G. Lewis "Relative Employment Effects of Unionism", 1963, for the original study, and any good Labor Economics text for a review of the dozens of studies which followed the original.

	14-02-2003 02:19									#14
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The effect of uneconomical union activity on efficiency and investment also should be considered.

	14-02-2003 02:27									#15
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I always hated when my economics professors rambled on throughout the whole class period about something that didn't make sense at all and then dismissed the class without allowing you to ask questions.

	14-02-2003 02:30									#16
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Adam Smith. I've taken Labor Economics. There are some Labor Economists who mistake the labor market as being something close to a perfect market. I dismissed their dribble long ago.

	14-02-2003 02:30									#17
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DuncanK:
You are entitled to ask anything you like.
You are free to point out anything you feel does not make sense.
But remember that my words are backed by economic studies.

edit:
Did I ever say it was a perfect market?
Have you provided any evidence otherwise?

	14-02-2003 02:32									#18
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Economics studies don't mean ****. Try using common sense for once.

	14-02-2003 02:39									#19
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The World Bank has been following the economic studies of the Chicago School since the beginning of the birth of the institution. Look where it has gotten them. They have turned the dismal science into a total joke, because of their lack of common sense.

With this report I was hoping that that had changed. We'll see.

	14-02-2003 02:39									#20
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quote: Originally posted by DuncanK Economics studies don't mean ****.

In other words, "don't confuse me with the facts"

quote: Originally posted by DuncanK Try using common sense for once.

I see nothing more than your dismissal of the argument as "dribble". Are you running for BAM?

	14-02-2003 02:44									#21
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quote: Originally posted by Adam Smith In other words, "don't confuse me with the facts"

Economic studies don't establish facts. That would make it a true science. That's why you need to use common sense. Looking at studies and trying to figure out if they establish fact or not is point less. Just using your common sense is much more valuable.

	14-02-2003 03:12									#22
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Does your common sense have anything in common with my common sense?

If not then it isn't

	14-02-2003 03:19									#23
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I am not about to get dragged into a discussion of the philosophy of science. You claimed that economic studies are "dribble", but provided no factual or methodological basis for the statement.

Both labor economics and common sense indicate that people need to be compensated for the labor they provide. Since I am not being paid for teaching economics in this thread, and I have other things to do right now, I'm out of here.

	14-02-2003 03:48									#24
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quote: When workers get pay raises they spend more money which creates further job growth

unlikely in States with Social systems where it more goes like this:
Pay raises-> Firms lay off unproductive Workers->More Unemployment-> Higher Social Costs -> More Money needed by gov -> The workers dont have more money

	14-02-2003 03:56									#25
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quote: Originally posted by Adam Smith I am not about to get dragged into a discussion of the philosophy of science. You claimed that economic studies are "dribble", but provided no factual or methodological basis for the statement.

You and Milton Freidman are the only ones that I know of that claim that economics is an exact science, and Milton Freidman is now in support of buget deficits. So that only leaves you. No wonder you don't want to discuss it.

quote: Originally posted by Adam Smith Both labor economics and common sense indicate that people need to be compensated for the labor they provide.

Oh, you do have some common sense. Now lets go from there.

	14-02-2003 04:00									#26
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quote: Originally posted by Main_Brain unlikely in States with Social systems where it more goes like this: Pay raises-> Firms lay off unproductive Workers->More Unemployment-> Higher Social Costs -> More Money needed by gov -> The workers dont have more money

Your thinking very short term and only in the example of the workers of only one firm unionizing. You aren't looking at the long term and the action of the bulk of workers unionizing. In the long run when unionization increases you see increases in the standard of living. That's because workers have more negotiating power.

	14-02-2003 04:10									#27
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Nope.
Unions negotiate only for those who have Jobs. They dont care about unemployment etc.
the standard of Living may rise for Union Workers( of which less are working)

If there are only Union Workers even less Ppl will find Work so whats the Point?

but Time will tell...
If the Common view is right Power of Unions will decrease.

	14-02-2003 04:26									#28
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As more people join unions the overall negotiating power of workers increases even for those who aren't in unions.

Right now corporations have been able to stop unionization here in the US, by moving factories overseas etc., but if those workers unionize then the corporations will have more trouble finding workers with little negotiating power and wages will go up.

As long as there is demand for goods corporations will not let resources go unused. Therefore there will not be unemployment. It's easy to say that unionization causes unemployment, because locations that have high unionization have high unemployment. But you have to look at the overall unionization of the world workforce in a global economy. unionization is actually quite low and that is why you see unemployment and low wages overall.

Look at periods of high unionization in the US when corporations had little opportunity to use other labor. These are the periods of greatest growth in wages and the lowest periods of unemployment.

	14-02-2003 04:43									#29
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DuncanK:Speaking as someone well to the Left of you politically, you'd do well to listen to what AS is saying rather than dismissing as he knows far more about economics than either of us ever will, and he's hardly a Milton Friedman.
In any case the real point in having unions (except in unindustrialized countries where AS pointed out their use in combatting labor monopsonies (sp?)) is to provide an organizational base from which to take over the economy (ie Syndicalism) rather than because of any short-term good they do.

	14-02-2003 04:49									#30
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Boshko,

That's true about unionization too.

About AS, I can assure you that there are no laws in economics and no economic study can establish a fact. It's not possible. AS is very knowledgable, but if you believe everything he says just because you don't understand it you're naive.