What do unions do for economic performance?

I’ve spent the last few days perusing the economics of unions.  I’ve unearthed Barry T. Hirsch’s useful and serious piece, which looks at whether the Freeman-Medoff pro-union work from the 1980s has held up.  Here are a few select quotations from the article:

…while it is true that much of the negative relationship between unions and growth is not causal, slower growth is partly attributable to the lower profits and investment resulting from union rent seeking.

Empirical evidence on unions and productivity was rather sketchy in 1984; it remains less than clear-cut today.

…union firms reduce investment in physical and innovative capital, leading to slower growth in sales and employment and shrinkage of the union sector.

…empirical evidence for skill upgrading [through union participation] is weak.

The thesis that unions substantially increase productivity has not held up well.  Subsequent studies are as likely to find negative as positive union effects on productivity.

…employment declines have been concentrated in the unionized sectors of the economy.

…the empirical evidence finds that U.S. unions are associated with slower employment growth…

I am genuinely puzzled why the highly intelligent segment of the left-wing blogosphere is so attached to the legal encouragement of labor unions.


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