RI Unionization and First Preferences

Amidst a parade of economists and business advisers who see the prominence of unionized labor in Rhode Island to be a hindrance to economic growth in the state, the labor point of view is interesting:

George H. Nee is the secretary-treasurer of the Rhode Island AFL-CIO and a member of the state Economic Policy Council, which advises the governor on economic issues. He says the state’s unions prop up the Ocean State economy, making sure workers, after covering basic needs, have enough money left to afford a dinner out or a shopping trip to the Providence Place mall.
“It’s a different perspective on the economy. If workers have disposable income, that benefits the whole business community,” Nee said. “We don’t benefit as a country or a state with a race to the bottom.”
A pamphlet promoting unions in Rhode Island says the states with the highest levels of unionization have higher hourly wages, lower rates of poverty and fewer residents without medical insurance.

In contrast:

In 2008, the Chamber started a campaign — the Workforce Freedom Initiative — to slow the growth of unions. It says states with the highest levels of unionization have lower levels of economic growth and higher levels of unemployment than areas where unions are weak.

At issue, here, is a basic question of cultural preference that relates to national — and international — debates about the shape that our society should take. The dominant view in Europe, also ascendant in the campaign and victory of President Barack Obama, is that our focus should be on individuals’ well-being: by union and by force of law “making sure workers, after covering basic needs, have enough money left to afford a dinner out or a shopping trip to the Providence Place mall.” The source of that money is a secondary consideration, which is why public-sector unions are so harmful.
The alternate perspective, heretofore characteristic of the United States of America, is that an environment of economic freedom will foster a system of creative destruction that will, yes, permit some to fall into economic hardship, but that over time will improve the economy and advance technology such that everybody will benefit. The definition of hardship will shift from scrounging to eat to scrounging to pay for a television to scrounging to afford monthly Internet bills. (Suffering persists, of course, but it comes to be seen as extreme hardship.)
I’d suggest that strength of the first point of view is largely attributable to the success of the second. That is, unions haven’t really had to explain from where the money would come, because the economic system was sufficiently healthy that nobody’s minded much the bleeding. As the give-a-man-a-fish paradigm comes to dominate — drawing the productive toward itself with a gravity of comparative circumstances — the economy will atrophy, and the trajectory of hardship will head back the other way.

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Robert Balliot
14 years ago

China just bought the Hummer. Where did they get the money? Corporations based in the United States of America outsourced manufacturing jobs. Products designed in the US were copied and dumped in the US marketplace – undercutting the profits of companies still manufacturing in the US.

Now that more and more US companies are being bought out by China – the downward pressure on wages is extraordinary. How can they still extract the profit without matching the Chinese labor costs? The focus on Union costs, outside of the public employee sector, is simply spin to pit middle class against middle class. Do you really want our labor force to be on par with communist China?

If you sincerely want to help our economy, buy local, regional and US manufactured goods. Profits reinvested locally help all of us.

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