Agreeing on unions?

Ezra Klein has an interesting post on union elections, favoring greater unionization; Jane Galt is not persuaded. [Addendum: Mark Thoma has more.] 

I propose a deal.  I’ll agree that unions, in the best natural experiments we have, boost wages by about 10 to 20 percent.  On the other hand, will Ezra (and others) agree that unions are mostly detrimental to the rate of economic growth?

If so, the utilitarian evaluation will boil down to the choice of discount rate, keeping in mind that under the left-wing account the gains follow mostly from redistribution more than from wealth creation.

Admittedly the empirical literature on unions and economic growth is murky.  But it does seem that in non-socialist societies, more unionization lowers the growth rate.  (In socialist societies, it may be that economy-wide unions internalize some poliitical externalities and lead to better policy, a’la Mancur Olson.)  These papers are easy enough to criticize, so I’ll admit I am more convinced by simple theory here than by any empirics.  Unionization raises the cost of many growth-enhancing business decisions, such as layoffs or implementing technical progress.

Union supporters?  Do we have an epistemic deal about how you are willing to lower the growth rate?  And can we pull your true discount rate from the Stern/global warming debates?  (I recall Jane once writing that a zero discount rate would require her to revise everything she believed, but I think the opposite is sooner true.)

Oh, did I mention that the union wage premium, especially for private sector employees, has been declining and may be disappearing altogether?

And no, I will not be moved by sarcastic attempted reductios which pretend that enslaving the workers would raise the growth rate too.  Figure out yourself what is wrong with that.

Addendum: Johan Richter asked for: "Your preferred policy towards unions," so I’m calling this #12 out of 50.  My preferred policy is laissez-faire, noting I have never been a right-wing, union basher, Morgan Reynolds sort of guy.  But I see encouraging unions through the law as a relatively short-sighted solution to the problems of labor and the desire to raise living standards.


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