So when Tim Lee writes that "Competitive labor markets have steadily displaced top-down collective bargaining," I just have to shake my head. Competitive for whom? For the upper middle class, labor markets are fairly competitive, but then, they always have been. They never needed collective bargaining to begin with. For everyone else, though, employers have been steadily gaining at their expense for decades. Your average middle class worker has very little real bargaining power anymore, and this isn't due to chance or to fundamental changes in the economy. (You can organize the service sector just as effectively as the manufacturing sector as long as the law gives you the power to organize effectively in the first place.) Rather, it's due to a long series of deliberate policy choices that we've made over the past 40 years.
Please read the whole post. Kevin has been on quite a roll recently when discussing the impact of the decline of labor unions on the American economy and this post is among his best.
But I do want to point out one other issue I think that all good liberals should have with Tim Lee's description of the world. How can anyone possibly refer to collective bargaining as a "top down" model? Collective bargaining is about workers asserting themselves and leveraging their numbers to extract wage and benefit concessions from employers. Lee's rhetorical sleight of hand turns this construct entirely on it's head - as if it were the workers who controlled the capital. This is, of course, utterly asinine.
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"You can organize the service sector just as effectively as the manufacturing sector as long as the law gives you the power to organize effectively in the first place."
This is not at all obvious. Labor unions have historically been more effective in industries with large employers concentrated mostly in fairly compact geographical areas (e.g. the Rust Belt). Hundreds or thousand of workers united can cut a better deal for themselves, especially if the employer delivers a good that no one else can -- at least not easily -- because they lack vigorous competition (think the post-War/pre-import Big Three).
But, when you have an industry with a lot of small service employers, and if the employers themselves face fierce competition from other participants providing the same service, they may not have much room to deal themselves without going out of business. And, the viability of a collective bargaining model is based on the idea the workers should get a larger share of profit margin.
Indeed, one way to interpret the demise of private sector unions in big business sectors is that globalization had undermined the employer's economic position and as a result, the room that the employer has to cut a more favorable deal while remaining in business. The big profits of the last twenty years or so have been in finance, not comparatively, within real economy firms and particularly, not in manufacturing. Collective bargaining has been undermined because the fat that the workers want to share in isn't as fat.
Not surprisingly, the not offshorable public sector which also has large enterprises, has been the source of most union growth. Collective bargaining there can provide advantages that employers are able to provide in a deal.
Organizing laws can influence outcomes. But, it isn't obvious to me that the main factors driving the decline of private sector unionization are the legal framework. After all, those laws came into being as a result of union strength despite far less favorable laws in place as unions grew in power due to economic imperatives.
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