Monday, March 7, 2011

Five best books on labor unions

Richard B. Freeman holds the Herbert Ascherman Chair in Economics at Harvard University.

He recommended a few books on labor unions to Eve Gerber at FiveBooks, including:
Exit, Voice, and Loyalty: Responses to Decline in Firms, Organizations, and States
Albert O. Hirschman

[Gerber:] Your work seems greatly influenced by that of economist Albert O Hirschman. Can you please expound on the theory put forth in Hirschman’s treatise, Exit, Voice, and Loyalty, and explain how you applied it to unions?

[Freeman:] Albert Hirschman is one of the most creative thinkers we have in economics. Exit, Voice, and Loyalty was picked by the Times Literary Supplement as one of the most influential books of the last century.

They key idea is that when things are going wrong in democratic societies and market economies, people have two options: exit and voice. Now, what did Hirschman mean by exit and voice? Say you are in a restaurant and your soup is too salty. One option is too storm out. That’s exit. The other option is to call the waiter over and say, ‘Please bring the soup back and ask the chef to make it less salty.’ That’s voice.

His book inspired me to look at unions through somewhat different eyes than most economists. People too often think that workers have only one choice in the competitive market: if you don’t like your job, get another. But there is another choice – you can go to the employer, individually or as a group, and say, ‘let’s change what’s not working’. That’s what unions do.

This simple notion of voice runs through Hirschman’s work. Voice is what democracy is all about. When we don’t like how things are going in America, we don’t exit or expatriate. We vote – we voice our concerns to our elected representatives; we try to effect change to make our country better.

I took the key insight of Hirschman’s analysis and applied it to unions, pointing out that unions give workers a mechanism for voice as a group. They help resolve workplace grievances; bring helpful suggestions to the attention of management; and lower turnover, which benefits firms. These hypotheses were strongly backed up by the all the data we and other people have looked at. Giving voice to workers is one of the key benefits that unions bring, to society, to the economy and to the individual firms where they are organised. There is one other element. Organised labour represents workers’ voices in our broader democracy. Of course, when they support one party, the other party doesn’t like them too much. I think that’s what we are seeing now.
Read about the other books on Freeman's list.

--Marshal Zeringue