Ezra Klein writes:
So what makes us [the United States]
different. In a word, power. Or the distribution of it. Europe has strong unions
and active governments; countervailing powers that wrest a portion of
the pie for their constituencies. We don’t.
Many intelligent Democrat bloggers are converging upon this meme.
A few years ago five separate German trade unions, drawing heavily from service industries, merged to form the very large Vereinigte Dienstleistungsgewerkschaft.
It is hard for me to believe that the American hi-tech sector would create more prosperity — and I mean for the middle class, never mind the rich — if it had a Vereinigte Dienstleistungsgewerkschaft.
Here is an article about the current and forthcoming death of German trade unions. Germany is now moving toward a two-tier labor market; guess which tier the new jobs are being created in? I have never known a Vereinigte Dienstleistungsgewerkschaft to support the "creative destruction" which is the lifeblood of capitalist innovation. Unions are better suited for a relatively static set of manufacturing tasks, precisely the jobs which are disappearing from Germany and also from the United States. Read this too; German unionization is down to about one out of every five jobs. Unions are declining more generally throughout the OECD.
Here is how German unions have responded to the Airbus crisis; it is not pretty. Here is a German complaining about German unions.
German unions were an instrumental part of postwar recovery and democratization. And I do not doubt the standard evidence that, in partial equilibrium terms, there is a union wage premium of about ten to fifteen percent (though, interestingly, such a premium cannot be found for Sweden, France, or Germany; union defenders claim that the collective bargaining benefits spill over into all sectors. Maybe.).
But today? I do not see the appeal of a Vereinigte Dienstleistungsgewerkschaft, most of all for the relatively dynamic United States. It would bring a one-time boost in some wages and a long run decline in growth and job creation. That is not a good deal. And if I imagine the counterfactual world in which I am a Democrat, I would not feel any differently about this question.