Economists Told Us “Flexible” Labor Markets Were a Good Thing. Now They’re Plunging the US Into an Economic Catastrophe
For decades, America’s “flexible” labor markets have been celebrated by economists and favorably compared to Europe’s “sclerotic” labor institutions — the products of a century of militant worker struggle. Now, thanks to that very flexibility, the US stands on the brink of an economic disaster.
A couple who both lost their jobs recently as unemployment claims skyrocket watch local news in their apartment on March 25, 2020 in Norwalk, Connecticut.John Moore / Getty
As the United States suffers its greatest bonfire of job destruction since the Great Depression, millions of workers in Europe who might otherwise have lost their jobs are remaining on their employers’ payrolls. In country after country, a dense web of labor laws that militant workers’ movements fought for over the course of decades — policies that restrict firing, entrench unions, and limit unilateral employer control of the workplace — have more recently made it possible to operate highly effective “short-time work” and “wage compensation” schemes, policies that have shown promise in radically reducing the incidence of mass layoffs in a depression.
To learn more about the importance of such institutions, Jacobin’s Seth Ackerman spoke with Harvard labor economist Richard Freeman, co-author of the classic study, What Do Unions Do? (1984).
Freeman spoke to Jacobin by telephone from Berlin.
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