INTERNATIONAL LABOUR:

UNIONS AND 'COMPETITIVENESS':

Right wing opponents of unions have a seemingly unending supply of "crackerjack economics" arguments against this, that or the other policy or situation that benefits ordinary people rather than business management. One of their arguments is that unions undermine "competitiveness". Is this true ? Not according to a study done by the Economic Policy Institute and reported on the AFL-CIO Blog. Here's the story.

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EPI: Unions Don’t Hurt International Competitiveness:
by Seth Michaels, Feb 27, 2009



A new snapshot study from the Economic Policy Institute (EPI) debunks the myth that unions have a negative effect on a nation’s ability to compete in a global economy.

Check out the above graph, comparing current account deficit—a measure of international competitiveness—with rates of union membership in major industrialized nations. As we’ve noted, strong unions are compatible with a strong economy, and yet another measure shows it: many nations with higher levels of union membership than the United States, like Canada, Germany and Denmark, have very strong export sectors and a positive trade balance.

As EPI’s Josh Bivens notes, the relationship between competitiveness and union density doesn’t show that unions hurt a nation’s ability to compete:

Note that the United States has the lowest union coverage rate in the sample yet
also has the biggest current account deficit. There is, in short, nothing about
highly unionized economies that suggests they can’t be internationally
competitive

.

This analysis proves the falsity of opponents who contend the increased union membership resulting from the Employee Free Choice Act will harm the nation’s standing in the global economy.

Find more EPI research on labor policy here.