In our tenth installment of The Cato Journal’s January 2010 “Are unions good for America?” issue, we cover the tenth myth. Here is The Homeland Stupidity web site’s synopsis of this myth, and a link to each of the 12 Cato articles.
Myth Number Ten: Labor unions support trade liberalization because it lowers the prices of goods that workers buy. Fact: This used to be true, but today’s labor unions oppose trade liberalization. They believe that increasing globalization has directly led to the decline of their unions, and thus their power. This isn’t exactly true, according to Daniel Griswold, director of the Center for Trade Policy Studies at the Cato Institute. “Although the evidence is lacking to implicate globalization as a whole, two aspects of the trend have been found to have significant negative effects on labor unions: inward foreign direct investment (FDI), and ’social integration’ across borders.” When foreign companies invest in the U.S., companies here realize that they can also invest in other countries. “The correlation of FDI and declining rates of union density suggests that ‘many workers feel greater insecurity from seeing capital mobility in their sectors, even if not in their own particular firms,’ Slaughter (2007: 344–45) concluded.”
Download the PDF here. Check out the Cato Journal and access all 12 PDFs here.
