The incidence of unions

To some extent higher union wages translate into higher prices for consumer goods.  Over a five year time horizon I’ll guess at 50 percent pass through, adding that most of these goods are bought by other laborers.  Just to be flippant, for each dollar gained by a union member, I’ll guess that labor market "outsiders" lose 50 cents.

Notice we haven’t even counted negative effects on the rate of future economic growth, or for that matter costs to employers.

We already don’t have workers, viewed as a class, coming out ahead.

I would be curious to hear the numbers assumed by those who wish to encourage labor markets by law.  I would be curious to hear how much they think, over say a ten-year time horizon, wages deviate from labor productivity.

Inquiring minds wish to know.


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