Uncertainty and Unemployment
By Mary Theroux • Monday December 5, 2011 3:30 PM PDT • 5 Comments
While last week’s news of the unemployment rate falling to its lowest in more than two years was very welcome, as the Wall Street Journal pointed out:
...the main reason for the big drop in that number and the fall in the jobless rate wasn’t more people working, but fewer people looking for work....
...There are still six million fewer Americans working today than before the financial meltdown, making this by far the worst jobs recovery in modern times.
And in this current “jobless recovery,” nearly every discussion of the failure of businesses to add employment—including one I heard on NPR last week!—now includes consideration of regime uncertainty as the most likely explanation.
This only makes the Obama administration’s decision to pile more regulation and uncertainty onto the very businesses they purport to want to see create jobs more nonsensical. Under orders of the National Labor Relations Board (NLRB), private-sector employers must post a new notice in their places of business by January 31, 2012, detailing their employees’ “rights” to collude in seeking higher wages and changes in working conditions; to form, join and assist a union; and to bargain collectively with their employer.
Meanwhile, on December 1, in a contentious 2-1 vote, the NLRB moved a step further towards implementing new rules that will grant unions significantly greater advantages against employers they are attempting to unionize, including denying many pre-election challenges.
Since employment declines in highly unionized sectors (except, of course, the public sector), with six million fewer jobs in three years, one wonders how many more will be lost—and if their loss will continue to be touted as “lower unemployment.”
Tags: American History, Business, Economics, Employment, Great Depression, Labor, Nationalization, Property Rights, Regulation, Unemployment 
I am trained as an economist and I was taught that unions are monopolistic and anti-competitive. As I have aged and worked in the business world its become clearer to me that individual bargaining power without unions is asymmetric. I’m not saying I like the effect unions have on our industrial complex but I can’t blame those who join them. When management and stockholders have plans for their workers and offer them a path to improve their lives unions will recede into history. Right now in this ever-growing plutocracy of ours, something is needed to assist the individual with bargaining.
John Donnelly | Dec 5, 2011 | Reply
Thanks, John:
Agreed that what is most needed is a level playing field for all participants in every market, which can only be achieved by government staying out of granting special favors. As noted in the article to which I linked from the word “union,” above—”Labor Unions,” in the online Concise Encyclopedia of Economics—U.S. unions enjoy many special legal privileges, and could not, in fact prosper in a competitive environment. “Like other successful cartels, they depend on government patronage and protection.”
I encourage you to read the entire entry, here.
With best wishes,
Mary
Mary Theroux | Dec 5, 2011 | Reply
Mary Theroux believes the economy’s uncertainty is due to the administration’s regulatory policies.
As the private sector heads for a run-away inflation or great depression, as happens throughout history, is it the free market or government that can pull us out?
Please view our Website & Video showing how this problem can be resolved.
Daniel J. Roque | Dec 6, 2011 | Reply
Mary
I liked the article very much. Of course I expected to based on your talk at the Mises birthday party in San Jose.
erne lewis | Dec 6, 2011 | Reply
Private unions are entirely appropriate for the members to choose to join. However so-called “Public sector” or government unions should be illegal since there is not the mitigating effect of competition what with governments being a monopoly.
Tom Parrish | Dec 7, 2011 | Reply