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Unionism boost. Sounds like a rational approach to increase national output and address America’s global economic decline. I think it’s a major component of the more general economic theory of “Prosperity Through Decreased Incentives to Produce”.


As Mr. Posner suggests, Nominal Wages are sticky. But there is something stickier. The belief that:

“Sooner or later, someone smarter, or someone more competent, or someone harder working will be either convinced or coerced into working to increase my standard of living through government transfers which I will vote for in the next election”.

Hope springs eternal. And the relative wealth position of the United States compared to the rest of the world continues to slide.


government transfers http://zysb88.com/cp46.htmwhich I will vote for in the next election”.

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Design Vibe

Another great article, really interesting read. Thanks for sharing!


Not a disagreement, but a clarification: "pro-worker" and "pro-union" are significantly different. Some of us are the former, but not the latter.


"Has their pro-union orientation seriously retarded the recovery from the recession? Probably"

Hmmm.....you say "probably" and I interpret that to mean that you are unsure but commensurate with your ideological beliefs, you believe that it is "probably" retarding the recovery. Please, supply some evidence of this because those of us who are moderate demand it.


"The real threat to a robust recovery on the labor side has come from employer and entrepreneurial fears that once the economic environment improves, a Democratic Congress and administration will pass pro-union and other pro-worker legislation that will raise the cost of doing business and cut profits."

Again, where the hell is all of the evidence of this fear?

You wouldn't be making grand statements consistent with your ideology, Krugman style, which confirms your opposing worldview, now would you?

I just love how market fundamentalists are so convenient with their profound theories of how the economy works despite any evidence.

Instead of coming to terms with epic market failures like a catastrophic financial crisis and deep recession (and jobless recovery for that matter) that instead there is incessant chatter emanating from them about "anti-business policies" and "pro-union sentiment"?

Way to be an apologist for failure!

"Ummm....yeah, they would just start hiring again if there were less anti-business talk (however the hell that is defined and measured) out there."

I mean, it's never the market's fault.

"What? Painfully elevated unemployment for years? Nah, it's not the markets fault. Too damn bad pal, maybe if you were nicer to businesses and took a tough stance on unions they would spend and hire."

I think this political cartoon best sums it up:

"There, there it is again—the invisible hand of the marketplace giving us the finger."
(One poor man to another as they stand.)




You know, if we eliminate wages completely profits will go through the roof.

Greg King

Dr. Becker, do you have any evidence to cite that it is worries about possible pro-union moves by the government at some point in the future is causing companies not to hire now? Or that this will become the biggest threat to a robust recovery on the labor side? It seems, for example, like uncertainty over health care might play a part. There seem to be a lot of factors other than fear about "possible pro-union or pro-worker" actions on the part of the administration or congress.

It also seems far fetched that companies will hire more workers if they can only further depress wages and benefits. This column by Bob Herbert (http://www.nytimes.com/2010/07/31/opinion/31herbert.html?_r=1) cites work by Andrew Sum at Northeastern showing that American corporations have more cash on hand as a percentage of GDP than at any time in the past fifty years. Payrolls have been cut by more than twice as much as output has fallen in the recession. Profits are up considerably (more than half a trillion) in 2010 while payroll is down more than a hundred billion. Essentially companies are getting more work out of fewer employees, or the same number of employees being paid less. So why would the fact that you could pay workers less without unions make them want to hire more people?

Scott Free

Union membership has been declining steadily for the last 40 (http://en.wikipedia.org/wiki/File:Union_Membership_and_Support.svg) years so employment so our manufacturing industries must be booming! Right? What bogeyman will the right flog when there are no unions left?


"The real threat to a robust recovery on the labor side has come from employer and entrepreneurial fears that once the economic environment improves, a Democratic Congress and administration will pass pro-union and other pro-worker legislation that will raise the cost of doing business and cut profits."

You made an assertion.

Now why didn't you actually give any evidence at all to back this up?

Please do so immediately.

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so nice a good article,thanks your Unique perspective.although i do not understand the political very much,but i really learn a lot from your article,and have some my own idea,i still believe one workd:In this world, nothing is certain but death and taxes.

not tracking this

Professor Becker,

Using your Nobel prize as a pulpit to make unsupported assertions outside of your field of expertise is irresponsible and you should know that.

Eric Kades

I read this as emanating from Professor Becker, so I direct this comment to him. I assume the audience would welcome Judge Posner's thoughts as well; perhaps you do not care to join in your co-blogger's unfounded assertions.

To reformulate what other have said, without benefit of anonymity:

As a fellow academic, I ask what empirical evidence you have that this particular causal chain, in our enormous economy, explains even a modest part of the slow recovery? Your fellow Nobelist Paul Krugman, a bona fide macroeconomist, has argued from day one that the stimulus package was far too small -- about 1/3 of that necessary based on relatively simple calculations. There is significant statistical evidence to support the efficacy of fiscal policy (e.g. the empirical work of outgoing CEA director Christine Romer, sometimes labeled a monetarist, which I assume retains positive connotations in Hyde Park). This is called evidence, evidence that insufficient aggregate demand explains, entirely, the weak recovery.

Where is *your* evidence, your hard empirical evidence, that the expectation of future labor law revisions is inhibiting investment? Or are your anti-union priors so strong that no amount of evidence (or lack of evidence) would change your posterior distribution of outcomes? That is religion, not science.

Prof Eric Kades
William & Mary Law School


For those who want evidence should go to http://www.heritage.org and plot the relationship between Labor Freedom and GDP per capita.

Unions are just a way to reduce freedom for those who want to work and negotiate wages and for those who want to hire.


There is little evidence that support for unions alone, has a catastrophic effect on the economy.

However, support for unions is indicative of an overall drive towards socialist policies which taken all together demonstrably and severely cripple the overall correlation between personal productivity and personal reward. With decreased incentives to produce, overall production falls, and the economy, wealth and once enviable prosperity of America will simply go down the toilet.

America discovers socialism and central planning. That ought to have the rest of the world laughing…

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Pandora Bracelet

No matter Obama will how to administrate the Unions ,I will support he!!!


You comment:

"The real threat to a robust recovery on the labor side has come from employer and entrepreneurial fears that once the economic environment improves, a Democratic Congress and administration will pass pro-union and other pro-worker legislation that will raise the cost of doing business and cut profits. In this way the obvious pro-union-pro-worker bias of the present government has contributed to a slower recovery, especially in labor markets"

Such a conclusory comment. Would likely earn you a incomplete grade, no Professor? Economists at JPMorgan recently took a look at NFIB data to see if small business surveys had picked up anything related to hiring reluctance related to regulation. They found that weak demand, rather than the political climate, is responsible for firms’ reluctance to expand. Specifically, taxes and regulation accounted for only 12% of the deterioration in firms’ assessment of the climate for expansion. The NFIB surveys around 2,000 firms out of 5 million, so there’s room for sampling error. Clearly, the U.S. is facing is a demand problem, more than a regulatory one. But now that I have found evidence disproving you statement, please show me some kind of evidence in support of your statement.


I think the article is silly. I am a business owner and I am not hiring because i do not see demand to hire not because I am afraid of unions. Furthermore, profits do not go down in unionization, but rather prices go up. Profit margins may actually increase. Corporations have more than one cost, they have product cots, labor cots, and shipping, RD and advertising cots. If one goes up the others will come down and/or price will go up. Stop BSing the American people, let us balance the extreme crony capitalism with a balanced social and capital market space.

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I think the article is silly. I am a business owner and I am not hiring because i do not see demand to hire not because I am afraid of unions

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