« Marginal tax rates: flat and fuzzy | Main | Average cost pricing at Statistics Canada »

Comments

Feed You can follow this conversation by subscribing to the comment feed for this post.

I'm not able to access the paper mentioned, so apologies beforehand if my comment is off.

Vanderborght apparently says that GAI would reduce the costs to workers of going on strike, but assuming the GAI operates like a negative income tax (NIT), it doesn't seem likely that it would offset the workers' losses unless the strike was expected to be quite long and expensive. Wouldn't the strike have to take enough of a chunk out of a low-income earners' annual earnings to allow him/her to qualify for GAI? Perhaps this isn't enough of an incentive for union leaders.

I can't help but think that GAI would decrease a union's bargaining power.
Unions have strength in numbers. Assuming that a major priority of union leaders is to secure competitive wages for their upper-tenure members, they wouldn't prefer the increased risk that GAI creates (the work disincentive of low-wage earners). If low-wage earners can cover their basic needs while living on GAI, union membership may fall and unions would lose bargaining power.

Studies on work disincentives such as the one conducted on NIT by The Stanford Research Institute (found here: http://www.econlib.org/library/Enc/NegativeIncomeTax.html)
probably won't help win over unions. Still, I find it interesting that some economists (such as Milton Friedman) have argued that GAI holds such promise in cutting the social costs of other programmes, that the burden caused by work disincentives could actually be offset.

I have blogged about this too. I refer to it as a social wage http://www.technorati.com/search/Social%20Wage?from=http://plawiuk.blogspot.com

and sometimes a Living Wage.
http://www.technorati.com/search/Living%20Wage?from=http://plawiuk.blogspot.com

I also include the need for wages for house work.
http://www.technorati.com/search/wages%20for%20housework?from=http://plawiuk.blogspot.com

The reason unions may be opposed to this, is the same reason that unions in Australia in the 19th and in the early years of the 20th Cnetury opposed minimum wages laws. With a strong labour movement, they felt wages should be bargained directly and that state laws undermined collective bargaining.

Also you might check out Andre Gorz for his take on the social wage.

PS. good blog.

The comments to this entry are closed.

Search this site

  • Google

    WWW
    worthwhile.typepad.com
Blog powered by Typepad