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American Economic Growth and Unions

Looking at America’s economy today, Former U.S. Labor Secretary Robert Reich has pointed to the decline of unions as a contributor to the stagnation of American wages.

When unions are strong, is the economy strong?

Stephen Herzenberg, Executive Director of the Keystone Research Center says job growth and America’s recovery from the great recession have been too slow. With the decline in unions over the past few decades, he says wages have been flattened and even declined since the recovery began.

“A strong middle class is absolutely what created 3 and 4 decades of 3% growth every year from the 1930’s to the 70’s,” explains Herzenberg “So, a strong middle class is still a powerful engine for a healthy economy and the decline of unions is part of the problem that our current economy has.”

But Matthew Brouillette, president and CEO of the Commonwealth Foundation doesn’t agree. “There is no direct correlation,” he says “Ultimately we find that you will have greater economic prosperity when you give workers more freedom, not less.”

Brouillette says he supports the ability of employees to collectively bargain and negotiate with employers for work rules and wages. But he advocates for “Right to Work,” which he describes as the freedom to join or not join a union as a condition of employment.

Herzenberg counters that workers aren’t forced to join unions. They make the decision collectively to unionize. He goes on to say that states with right to work laws also have the weakest upward mobility based on a recent report.

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