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Krugman: Employee Free Choice Key to Economic Recovery


Krugman: Employee Free Choice Key to Economic Recovery

by Seth Michaels, Jan 22, 2009

In the latest issue of Rolling Stone, Nobel Prize-winning Princeton economist Paul Krugman has written an open letter to President Obama detailing the steps needed to end our economic crisis and turn the country around.

Krugman’s prescription includes quick and large-scale actions to save jobs, rebuild infrastructure and protect those whose health care, housing and retirement have been put at risk—but it also includes longer-term strategies to make sure America is “a more just and secure society.” High on Krugman’s list? In addition to health care reform and an economic recovery package, he stresses restoring workers’ freedom to form unions and bargain for a better life by passing the Employee Free Choice Act.

…you can do a lot to enhance workers’ rights. One is to start laying the groundwork to pass the Employee Free Choice Act, which would make it much harder for employers to intimidate workers who want to join a union…the legislation will enable America to take a huge step toward recapturing the middle-class society we’ve lost.

Krugman looks at another time when the United States and the world faced a serious threat to economic prosperity—the Great Depression—and says one of the most important factors to help the economy rise out of the Depression and into growth was what he describes as the “Great Compression”—the change from an unequal and economically divided society, rife with poverty, to a strong middle-class society. The ability of workers to form unions and bargain, made real by reforms to labor law, pulled the economy into prosperity:

…one important factor was the rise of organized labor: Union membership tripled between 1935 and 1945. Unions not only negotiated better wages for their own members, they also enhanced the bargaining power of workers throughout the economy. At the time, conservatives warned that wage gains would have disastrous economic effects—that the rise of unions would cripple employment and economic growth. But in fact, the Great Compression was followed by the great postwar boom, which doubled American living standards over the course of a generation.

As we’ve stated before, the economy is reeling from inter-related crises in housing, credit, manufacturing and health care, and one of the big factors fueling the nation’s economic crisis is the fact that workers have lost power in the workplace and have fallen behind as a result. Krugman, an economist respected around the world, recognizes that restoring balance to the economy will depend upon restoring power to workers.

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