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Strong Labor, Strong Economy

"Labor union" is a dirty phrase in South Dakota. We tout our status as a "right-to-work" state, which translates into more power for management, not labor. Our attorney general is eagerly preparing to defend the union-weakening constitutional amendment the voters just passed to abrogate federal labor law. My conservative friends view unions as a force inimical to the taxpayers' bottom line and decry efforts by unions to protect basic worker rights like receiving overtime for working an overnight snowplow shift.

But labor unions aren't just about protecting worker rights. Labor unions check the concentration of wealth and power that is leaving us hungover from the December 2007--June 2009 recession. Our GDP is bouncing back better than in other countries, but employment is not. Our unemployment rate is higher than that in Britain, Russia, Germany, Japan, and China. Part of the problem, says David Leonhardt, may be the relative weakness of American labor unions:

Relative to the situation in most other countries — or in this country for most of the last century — American employers operate with few restraints. Unions have withered, at least in the private sector, and courts have grown friendlier to business. Many companies can now come much closer to setting the terms of their relationship with employees, letting them go when they become a drag on profits and relying on remaining workers or temporary ones when business picks up.

Just consider the main measure of corporate health: profits. In Canada, Japan and most of Europe, corporate profits have still not recovered to precrisis levels. In the United States, profits have more than recovered, rising 12 percent since late 2007.

For corporate America, the Great Recession is over. For the American work force, it's not [David Leonhardt, "In Wreckage of Lost Jobs, Lost Power," New York Times, 2011.01.19].

Checks and balances is one of the most important concepts of the American Constitution. It's also important in the American economy. When employers have more power to set the terms of work and to treat employees more as inputs than as partners, the economy as a whole suffers.

Unions aren't a socialist plot or a detriment to democracy. Strong unions contribute to a strong middle class and a strong economy.

2 Comments

  1. Michael Black 2011.01.19

    Small businesses are the source of new jobs for Americans and not big corporations and unions. Their is a lack of short term capital for small businesses. As the credit has dried up, many have been forced to liquidate rather than continue operations as usual.

  2. Vincent Gormley 2011.01.19

    there, not their. Proving once again an investment in education is sorely needed in South Dakota. Without a robust and well educated work force how does anyone expect to build the economy? Oh yeah, an uneducated workforce with no rights at the lowest possible wages and no benefits. Yup, that'll work! Duh!

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