NEWS

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August 22, 2006

Unions lead to equality? Since when?

Many in the blogosphere are talking about Paul Krugman's column last week where he argues that Republican leadership leads to an upswing in inequality. My feeling is along that of Brad DeLong's, which is that the President has no where near enough power over the economy to cause the spikes in income inequality that Krugman attributes to Republicans.But one thing that peaved me was what Ezra Klein had to say:

Seems to me we have a causal problem here. Politics, after all, tends to follow societal trends, not the other way around. So during periods when conservatism is ascendant across the country, conservative politicians will win elections. But it's probably the grassroots sentiment, not the legislation, that accounts for much of the difference in income distribution. During these periods, support for unions (and thus their strikes), will weaken, pressure on corporations to ensure wages keep pace with productivity will essentially evaporate, CEO pay will skyrocket, etc and so on. These trends aren't created by the regime in Washington, but they're enabled by conservative politicians who won't attempt a governmental correction, and preserved by a populace that, for whatever reason, is unwilling to take a populist turn. Eventually, though, that changes, and corporations have to react, and unions win some strikes, and the general trend is towards higher salaries and better benefits and whatever else, and during all this some progressives get elected to office, and so we assume it's all their fault, when all they did was raise the minimum wage fifteen cents. But because we can see which party controlled Congress easier than we can track societal attitudes, we tend to blame the shifts on political changes without knowing exactly why.
My problem with this is the casual way Klein links union power to income equality. If anything unions would lead to increased inequality with a certain number of people blocking entry to other interested workers thus protecting themselves and their high salaries from competition while those that can't enter languish in a lower paying job. For some reason, unions have become associated with equality, democracy, and egalitarianism but for no logical reason I can figure out.