Furthermore, it’s clear that “insuring against loss of benefits” is not the sole goal of unions, and this is why they persist in Europe, and why they would persist in the U.S. if we passed the proposed legislation.
The end of the article, as Christian notes, refers to political capital constraints. Of course the easiest way to eliminate unions is to make them illegal just as producer collusion is. But since this is not likely to happen given the political constraints, we might look to alternate methods. And so this thought led the author to suggesting the government benefits.
The power of private unions has been decreasing drastically over time, and hence I don’t see a need to introduce another massive government program in an attempt to offset social welfare loss caused by unions. Indeed, the government program would have its own welfare loss. As Christian mentions, the most powerful unions today are government employee unions. Considering that the government already pays for these employees, we already have such a benefit system as suggested by the author. Clearly this has not offset the power of these unions.
]]>Of course, the correspondent is living in La-la-land and seems blind to the labor woes of continental Europe. Setting aside the distortions created by government provided benefits, European countries are very generous by American standards, but are still faced with intransigent unions. Austria in particular has very large unions (industry wide, I think) which help to drive up the price of labor. (Of course, farm and business groups are also to blame for European intransigence—much like here in the states—but unions are particularly nasty over there).
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