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Is Strengthening Union Rights Good or Bad for Society? Don't Ask the Economists.

by David Doorey September 2, 2010
written by David Doorey September 2, 2010

We’ve been following here at the blog the fascinating debates in the U.S. surrounding the proposed Employee Free Choice Act, a labor law reform bill that is supported by President Obama.
You will recall that the two main features of the law would be (1) a move to a “card-check” method of determining if a majority of workers support unionization, and (2) the introduction of a process for mandatory first contract arbitration if the parties are unable to reach a first collective agreement themselves after the union is certified to represent the workers.
While the debates continue in the U.S., the opposition of a few Democrats to the law seems to have killed its chances of being accepted in Congress.  It is hardly suprising that American employers went berserk at the prospects of a law that would make union organizing easier.  Nothing scares the crap out of employers like the threat of a union (which, by the way, is why I have proposed elsewhere that the state harness that threat to encourage greater compliance with employment-related statutes).
But what I find very interesting about the American labor law reform debates is the complete polarization of economists into two distinct camps.

One group of economists that included big-whig classical law and economics gurus Richard Posner, Gary Becker, and Richard Epstein (here a podcast of Epstein and his take on the EFCA here) argued that the EFCA would destroy the American economy. Here’s a story about a “survey” of economists conducted by an anti-union lobby group apparently showing economists oppose the EFCA.
Another group of leading economists argued the complete opposite, that the EFCA was necessary to save the American economy. This latter group included many heavy hitters, including Nobel Prize winners Joseph Stiglitz (former Chief Economist of the World Bank) and Robert Solow.

What can explain the gaping difference of opinion among leading economists who, after all, are supposed to speak the same language and use the same analytical tools when analyzing labour markets?
I’m just a lowly lawyer, and economists have always confused me, so don’t ask me to explain. Although, I think there is some strong hints of the answer in Joseph Stiglitz’s writings.  See, for example, “Employment, Social Justice, and Societal Well-Being”. Stiglitz argues that the economists in the Posner, Becker, Epstein camp have bound themselves to assumptions about how labor markets work that have no application to the real world.
Contrary to the classical economic models those economists rely on, in the real world, workers do not have near full information to make rational decisions, workers are not mobile, workers and employers do not make rationale choices driven by self-interest, and so on.  Once you strip away the assumptions of the classical economic model, you are left with a model that has little predictive or prescriptive value for policy-makers.
Fascinating debates.  Of course, what we can take from this fight among the  economists is that economics can provide no answer to labour law debates.  Economists can be found to back up any argument you want to put forward about whether unions and collective bargaining are good or bad.  Just change your assumptions, alter your methodology, and “poof”, you have new “evidence” in support of whatever policy you like.
Is this an unfair assessment of economics contribution to labour law?

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David Doorey

Professor Doorey is an Associate Professor of Work Law and Industrial Relations at York University. He is Academic Director of Osgoode Hall Law School’s executive LLM Program in Labour and Employment Law and a Senior Research Associate at Harvard Law School’s Labor and Worklife Program. Professor Doorey is a graduate of Osgoode Hall Law School (LL.B., Ph.D), London School of Economics (LLM Labour Law), and the University of Toronto (B.A., M.I.R.).

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David J. Doorey🇨🇦 @TheLawofWork@mas.to Follow

Law Prof. Talking #labor & #employment #law to the masses. @YorkUniversity @OsgoodeNews @LSELaw @CLJEHarvard @Jacobin @OnLaborBlog https://t.co/5V9r8VPHsh

TheLawofWork
thelawofwork David J. Doorey🇨🇦 @TheLawofWork@mas.to @thelawofwork ·
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My fingers are just too big to play an A chord on the #guitar.

Otherwise I would be a rock star. This is the only thing holding me back.

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thelawofwork David J. Doorey🇨🇦 @TheLawofWork@mas.to @thelawofwork ·
4h

Not seen comparable stats for Canada.There are terminations, but also better laws in most Canadian jurisdictions, including

- remedial certification
- interim reinstatement
- card-check/quick votes

“1 in 5 workers in US is fired for organizing a union” https://onlabor.org/labor-law-reform-is-needed-for-unions-to-succeed/

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thelawofwork David J. Doorey🇨🇦 @TheLawofWork@mas.to @thelawofwork ·
4h

This is Canada's federal Minister of Labour.

Bill 377 was a labor bill disguised as a tax law (so Cons could pretend it was federal jurisdiction) that buried unions in red tape & reporting requirements not applicable to any other orgs.

https://www.parl.ca/Content/Bills/411/Private/C-377/C-377_3/C-377_3.PDF

Bill 525 ...

1/2

Seamus O'Regan Jr @SeamusORegan

Bills 377 and 525 were two of the most anti-worker, union-bashing bills this country has ever seen - put forward by the Harper Conservatives.

We scrapped them. We believe in unions. We believe in workers.

Reply on Twitter 1623097471407644673 Retweet on Twitter 1623097471407644673 10 Like on Twitter 1623097471407644673 33 Twitter 1623097471407644673
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