From the TUC

Nobel laureate backs union rights in the USA

24 Jan 2009, By

Paul Krugman, the winner of the Nobel prize for economics, says that the US needs the Employee Free Choice Act that US unions are campaigning for. Writing in Rolling Stone magazine (a journal of economic record, of course!) he says that the US economy needs unions just as much as workers do. Last time US unions were actively promoted – after the Great Depression – they managed to increase the share of the national income that went in workers’ wages, massively reduced inequality, and doubled living standards in a generation. The unions themselves tripled in size.

Krugman’s article is mostly about what President Obama needs to do to save the US economy, but he’s very clear about the need for workers to have the freedom to join a union, and it’s a very persuasive argument, because one of the root causes of the current climate was sub-prime housing loans. Workers needed those loans but couldn’t pay them back. Because they weren’t earning enough. Similarly, in the UK, low wages have led to massive amounts of personal debt over the last generation – just ask your parents how much THEY had to borrow to buy houses and essential goods!

Here are some quotes from Krugman’s article picked out for me by Seth Michaels (hat tip) at the AFLCIO blog:

…you can do a lot to enhance workers’ rights. One is to start laying the groundwork to pass the Employee Free Choice Act, which would make it much harder for employers to intimidate workers who want to join a union…the legislation will enable America to take a huge step toward recapturing the middle-class society we’ve lost.

…one important factor was the rise of organized labor: Union membership tripled between 1935 and 1945. Unions not only negotiated better wages for their own members, they also enhanced the bargaining power of workers throughout the economy. At the time, conservatives warned that wage gains would have disastrous economic effects—that the rise of unions would cripple employment and economic growth. But in fact, the Great Compression was followed by the great postwar boom, which doubled American living standards over the course of a generation.