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im not advocating no trade. im condemning free trade.
tariffs, and other protectionst policies, make sense to protect local economies.
and, yes, i have studied economics, though it was only required courses in college and high school.
if you dont wish to discuss anymore, that is fine. but, if i may insult your pallet with one last bite of meatloaf. its in the vein of Industrialism vs Free Trade okay, and what is responsible for real gains. just because we have more pie, doesnt mean that our percentage of that pie is bigger, it could in fact be less. the whole pie is now bigger, and even though we have more "pie"... we actually have less of it as a percentage. the wealth distributions in the world now, are, worse than they have ever been, and continue to widen.
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oh, i also found out that both ron paul and dennis kucinich cited each other as the candiate that they most liked in the field, besides themselves.
and ironically, they both stated that it was their agreement on foreign policy, of all things, that made them friends. lol
i hope you didnt miss my post about the Bailout opinions?
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lol, it's really easy to tell those who've taken econ apart from those who have not
I was going to respond to cursor, but ahrara_, you covered all the key points i wanted to use and hence said exactly what I wanted to say
^^
(i've actually got an econ midterm tomorrow on international trade lol)
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>.>
edit: 9009 posts? shouldnt you complain that youre not on the top of the "Top 50 posters" thread!?!?
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United States22883 Posts
On March 03 2009 12:09 ahrara_ wrote:
The problem with your examples is that each did not operate in a globalized world. When your competition is not benefiting from free trade, it's meaningless to cite your own protectionist policies as a boon. Britain had the benefit of an empire that allowed it to extract the natural resources it needed for England's industrial machine. Free-trade within its empire, as with all empires, gave it a competitive edge. There's no knowing how much faster growth may have progressed in an 19th century were trade barriers lower between empires. Protective policies intended to nurture domestic industries would be disastrous in today's globalized world, where such industries would never be able to compete, even if you could somehow overcome the political resistence to "unprotecting" any such industry. Some people (Adam Smith included) believed globalization began in 1492. I think that position is overstating the significance of inter-connectedness but I think there's a fair amount of evidence that point to a big boom happening in the early 19th century, and it certainly didn't start with Thomas Friedman. Look at the Civil War, for instance. Who is one of the main producers of cotton in the world today? Do you know when and why they rose to dominance? When the South was getting its ass kicked and because the rest of the world wanted a new source. Then it bounced back to further weaken the Southern economy during reconstruction.
Granted, I'm not as well informed on history, but what protectionist tendencies are you talking about in US history that was unique from the rest of the world and was not a consequence of natural trade barriers arising from the oceans? And isn't the fact that the US had large tracts of undeveloped and unexploited land unique?
The most famous was the Tariff of Abominations, which led to the Nullification Crisis which led to Andrew Jackson kicking some serious ass in Congress. The South took issue with it, not because they were actually in great support of free trade, but because it was hurting their economy. They were forced into buying Northern goods rather than cheaper British goods and it hurt their own cotton trade with Europe.
As for the economies of scale thing, I'm not sure what you're getting at. It's true developing nations can't compete in a global market, but they retain a comparative advantage because sustenance farming is always less productive, and because wages are cheaper. Say I have a choice between producing a shitty tshirt for $1 or farm .50 cents worth of food. My overseas competitor, in the same period of time, produces the same tshirt for $10 and $50 of food. It is advantageous for me to sell him tshirts and for him to sell me food. Foreign investment also improves technology.
What if your foreign competitor actually produces everything in a free trade zone in your country and because of economies of scale (competitor is bigger, bigger = cheaper) can sell at lower prices? If a US company sets up a T-shirt shop in a South American country with heavy free trade policies, how much of the profits are actually being invested back into the country?
Lets look at this another way. Developing countries don't have the infrastructure to support high tech jobs as their advantage. Brazil attempted to get in on CPUs but eventually they lost out and it set them back a while. What countries are able to do is supply low quality, often raw goods. Now, their comparative advantage (if it works at all) will work for a short time period, but they quickly need to develop other industries or they'll be a slave to conditions, weather, other countries who produce the same good, etc. It's extremely difficult to build an infrastructure quick enough before these problems start setting in, and very few countries have been able to do it. The Tigers had the US holding their hand on the way through and giving them money, Canada was able to do it on lumber/furs but Canadians were Europeans who already had much of the existing infrastructure and technology in place.
I've never denied there is a cost in the short-run. But the long-run benefits always outweigh because they are perpetual.
I don't think that's provable, but I think it's fairly easy to qualitatively consider things and see that it's not true, or at least not due to free trade. Industrialization widens the gap, and then the government steps in to close it. Singapore might be the only example of the market being used to help polarization, but their government has done some pretty ingenious things and they're got pretty unique characteristics.
I'm certainly not advocating serious protectionism but I think you know that. Again, "strategic trade policy" is what all modern states use because free trade is just an ideal. Japan's massive support for their auto industry is part of the reason our auto industry is hurting right now. A push for freer trade wouldn't help that sector. Look at it using game theory.
Many of the problems might be alleviated if Obama gets his social plan through, but we'll see. Oh, I also learned today that we were incredibly close to getting national health care in the 1940s. The Southern veto stopped it, but their main issue was the fact that they're racist assholes, which is the same reason they almost killed the GI Bill as well. Luckily for veterans (and the US economy) denying black veterans benefits was too much of a stretch, even for Bourbon Southerners, but they were still able to block the health care.
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On March 03 2009 11:33 PobTheCad wrote:Show nested quote +On March 02 2009 13:15 Choros wrote:
Edit: Did you know that in 1970 the average worker in the United States earned 30% more than they do today and worked 2 weeks less. This is a very important symptom of the economic problems of the United States today. As long as wages are falling there is nowhere your economy can go but backwards. personal income grew 0.4% last month in the US heck , you can't have hyperinflation without higher personal income and i think that is where the US is heading considering Obummers 2 trillion dollar budget.who does he expect to buy all those bonds?
The spike in personal income comes from increased pay to federal employees and military personnel that took effect last month. It's not inflation. Also, Choros is right when he says the average American worker earned more in the '70s -- and not in nominal terms. As a percentage of GDP, wages and salaries were much higher then than they are now. In fact, wages are at their lowest share of GDP on record.* Real wages have not kept up with corporate profits or inflation.
*That statement is a couple years dated, but I think still holds.
Now, I think Choros' point was that this shows globalization has eroded real wages in the U.S. While that certainly is partly true, I think this was inevitable to some degree. Our period of post-war prosperity was destined to end (or, at least, lessen) as productivity around the globe began to match ours. That's unfortunate for us, but is it really a bad thing? The success of the Asian Tigers and India and other developing countries has brought millions out of poverty.
Also don't ignore a dramatic redistribution of wealth to the rich in this country through tax policy, deregulation and the demise of the labor movement (among other things). That, more than anything I think, explains why real wages are askew.
And I know I'm a newcomer to this thread -- uh, and board -- but I think Ahara's analysis on globalization is pretty damn accurate.
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ya globalization!! more cafta and ftaa... if they are lucky, all of latin america will end up like mexico. if only we can find a way to keep em all from fleeing to the US 
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I'm actually impressed by ahara's continual commitment to explaining economics to every person posting in here without basic understanding of economics. Especially moreso considering that this is the internet. Having tried my fair share of explanations, I've already given up arguing on this thread because it just takes way too much time to make a 3 page post.
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there seems to be quite a bit of discussion about wether or not "globalization" as you call it, or free trade, is actually good for devloping nations on: http://www.nber.org/
perphaps you guys should inform them that the debate is indeed over.
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Ahara, would you update your original post with what you think about the new bailout.
And also about the economy in 1981 and the great depression, and perhaps 1921 if you can find anything about it.
If you're full of shit, it would become quite obvious in your opinions of the other three economic crisis' from our history.
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On March 03 2009 15:16 i_heart_nukes wrote:Show nested quote +On March 03 2009 11:33 PobTheCad wrote:On March 02 2009 13:15 Choros wrote:
Edit: Did you know that in 1970 the average worker in the United States earned 30% more than they do today and worked 2 weeks less. This is a very important symptom of the economic problems of the United States today. As long as wages are falling there is nowhere your economy can go but backwards. personal income grew 0.4% last month in the US heck , you can't have hyperinflation without higher personal income and i think that is where the US is heading considering Obummers 2 trillion dollar budget.who does he expect to buy all those bonds? Now, I think Choros' point was that this shows globalization has eroded real wages in the U.S. While that certainly is partly true, I think this was inevitable to some degree. Our period of post-war prosperity was destined to end (or, at least, lessen) as productivity around the globe began to match ours. That's unfortunate for us, but is it really a bad thing? The success of the Asian Tigers and India and other developing countries has brought millions out of poverty. And I know I'm a newcomer to this thread -- uh, and board -- but I think Ahara's analysis on globalization is pretty damn accurate.
Id just like to point out that although at that time it may have appeared that I was claiming globalisation has lead to deteriorating incomes. I believe this is partly true but generally overstated and it has no practical policy impacts for today. The most important reason that wages have been falling is basically what you said.
Also don't ignore a dramatic redistribution of wealth to the rich in this country through tax policy, deregulation and the demise of the labor movement (among other things). That, more than anything I think, explains why real wages are askew.
The most important factor certainly is labor market policy specifically deunionisation. I believe it is not inaccurate to say that this entire crisis is the consequence of deunionisation.
In order for the labor market to function properly you have the power of workers on the one hand and the power of business on the other, they compete with each other and set wages. The economically optimum wage setting is the highest workers can possibly be paid without undermining the profitability of the business. This means workers earn more money, so they spend more money so businesses earn more money. Business and individuals alike benefit from a functioning labor market. Unions are the natural manifestation of the power of workers and are fundamentally important in the functioning of the labor market.
If you impose destructive regulation into the labor market by making it illegal to strike you physically remove the power of workers and throw the entire equation out of balance. Instead of
sustained positive wage growth you get the exact opposite, sustained negative wage growth. The second the United States started deunionising wages started falling and they have not looked back since (back in 1980) for some time workers would work longer and longer hours and picking up second jobs to maintain the same income so through the 80's and 90's wages show stagnant growth, but it got to the point around ten years ago where either people could work no longer or there was no demand for those extra hours of labor (probably a bit of both) and wages right across the economy started falling quite severely, I shouldnt need to tell you that this is simply disastrous for an economy.
The debt bubble is partly the consequence of people borrowing to offset these falling wages.
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On March 03 2009 15:16 i_heart_nukes wrote:
[..]
Also don't ignore a dramatic redistribution of wealth to the rich in this country through tax policy, deregulation and the demise of the labor movement (among other things). That, more than anything I think, explains why real wages are askew.
[..]
How exactly can wealth be redistributed to the rich through tax policy? By definition, taxes can only take money from people, not give it to them. So there are really only two possible ways you could skew them as 'redistributing to the rich': You somehow think other people are entitled to the money the rich are now not paying due to tax cuts, or you think that government tends to spend money on projects which help the richer to become much richer due to their political connectedness (which I would agree with, but thats really a whole different issue).
As for deregulation, where exactly has that happened any time recently? Cause I'm not really seeing that: as far as I can tell, government has gotten immensely larger in recent years.
And lastly: unions. Unions *cannot* drive up wages for labor in general, they can only redirect wages to themselves and them members, at the expense of the rest of the economy. For instance, if you have a union (with government afforded privileges, of course) in steel, any sort of action they take to push wages away from the equilibrium price for their labor will drive up costs by at least that amount, thereby increasing the equilibrium price for steel. Such a price increase would increase costs for any industry that utilizes steel, thereby increasing the overhead of all those industries. So really then, unions function as a sort of vampire, stealing income from the rest of the economy and contributing little-to-no value in return. I see no issue with people forming unions voluntarily, or really any voluntary association of people. Unions today, however, are certainly not such an organization, and have been consistently granted government privilege that allows them to coerce and force people to join them or not work in certain industries. These privileges allow them to negatively effect the rest of the economy, and thats a huge, huge issue. Globalization has fortunately allowed people to get around the higher prices caused by unions, but at the expense of the industries the unions hijacked. Want to see real wages rise? Get rid of all that pro-union legislation and maybe then America can start producing things again and generating real wealth.
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isnt china, economically, one of the most protectionist nations ever? didnt they vigoursly defend against imports for like the entire 20th centruy? so wouldnt their economic growth actually be an arguement against free trade?
and isnt the crushing of our economy, in some ways, simmilar to that of latin american countries that recieve our cheap food imports?
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On March 03 2009 17:36 tec27 wrote:
How exactly can wealth be redistributed to the rich through tax policy? By definition, taxes can only take money from people, not give it to them. So there are really only two possible ways you could skew them as 'redistributing to the rich': You somehow think other people are entitled to the money the rich are now not paying due to tax cuts, or you think that government tends to spend money on projects which help the richer to become much richer due to their political connectedness (which I would agree with, but thats really a whole different issue).
Tax policies in the US have been cutting taxes for the rich and increasing taxes for the poor and middle class for at least 8 years now. Of course he doesnt mean that taxes give money to people, just that current tax policy has been favoring the elite.
On March 03 2009 17:36 tec27 wrote:
As for deregulation, where exactly has that happened any time recently?
Clearly the financial sector experienced excessive deregulation, or we wouldn't be facing the current crisis.
On March 03 2009 17:36 tec27 wrote:
And lastly: unions. Unions *cannot* drive up wages for labor in general, they can only redirect wages to themselves and them members, at the expense of the rest of the economy. For instance, if you have a union (with government afforded privileges, of course) in steel, any sort of action they take to push wages away from the equilibrium price for their labor will drive up costs by at least that amount, thereby increasing the equilibrium price for steel. Such a price increase would increase costs for any industry that utilizes steel, thereby increasing the overhead of all those industries. So really then, unions function as a sort of vampire, stealing income from the rest of the economy and contributing little-to-no value in return. I see no issue with people forming unions voluntarily, or really any voluntary association of people. Unions today, however, are certainly not such an organization, and have been consistently granted government privilege that allows them to coerce and force people to join them or not work in certain industries. These privileges allow them to negatively effect the rest of the economy, and thats a huge, huge issue. Globalization has fortunately allowed people to get around the higher prices caused by unions, but at the expense of the industries the unions hijacked. Want to see real wages rise? Get rid of all that pro-union legislation and maybe then America can start producing things again and generating real wealth.
What a load of bull. Here you say that unions drive up costs of products and therefore destroy the economy. This is clearly wrong, because, as was posted earlier, wages have fallen behind profits as a share of the economy. US workers earn less than they did 20 years ago. On the other hand, CEOs and other executives earn huge sums (not sure about the exact number, but it's something like 300 times the average employee) and profits have been skyrocketing. Economic growth over the past 20 years has therefore been quite imbalanced. Strong unions would have been able to secure more income growth.
I think the people at the top of the system earning exorbiant sums are vampires, instead of the decent hardworking people who have been pushed around for too long now.
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On March 03 2009 17:36 tec27 wrote:
How exactly can wealth be redistributed to the rich through tax policy?
check the recent bailouts? check sweetheart government contracts... not limited to but especially in the defense sector? and check the last 8 years of presidential politics as essentially a lesson for driving up the share the top 1% has of the country's wealth.
and unions.... have given us the 8 hour day. overtime. the weekend. i mean... child labor is part of our history in the US. the US has a brutal labor history that isnt really taught in our schools. i think the 1830s saw the first labor laws, but real ground was broken in the early 20th century. its not just about wages, its about workplace safety. its about having a say in how your company is run. its about negotiating with "owners" who dont deserve a 60% cut of proffits in a company. unions heads may give them a bad name, i understand that, but im all for anything that gives workers more of a say in how their company is run. if it were up to any corporation- we would all still be working 7 day weeks, 12 hour days, and in whatever conditions made production absolutely cheapest. its not a pretty thought.
edit (whoa whoa i missed his comment on deregulation. see the removal of the glass-steagal act in 1999 under Clinton. there is some bank De-Regulation that was put into place after the market crash of 1929. kind of ironic?)
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the strange thing being that if the current system manages to survive then in 10 years the govt will be privatizing these banks and other things they have bought out , only to need to nationalize them the next time we have a crisis of this scale (usually every 60 years or so)
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On March 03 2009 17:29 Choros wrote:
Id just like to point out that although at that time it may have appeared that I was claiming globalisation has lead to deteriorating incomes. I believe this is partly true but generally overstated and it has no practical policy impacts for today. The most important reason that wages have been falling is basically what you said.
Ah. My bad.
The most important factor certainly is labor market policy specifically deunionisation. I believe it is not inaccurate to say that this entire crisis is the consequence of deunionisation.
In order for the labor market to function properly you have the power of workers on the one hand and the power of business on the other, they compete with each other and set wages. The economically optimum wage setting is the highest workers can possibly be paid without undermining the profitability of the business. This means workers earn more money, so they spend more money so businesses earn more money. Business and individuals alike benefit from a functioning labor market.
I will go ahead and disagree that the current crisis is entirely the consequence of deunionisation, but a healthy labor movement is certainly beneficial in a society. As Cursor points out, much of the policies we take for granted (minimum wage, 5-day week, workplace safety etc.) come from the labor movement. Unions provide a level of fairness to the system that is good. Of course, if labor forces too many concessions, it can be problematic. It's definitely a balancing act. But I would rather have a viable labor movement than none at all. Unfortunately, organized labor in the U.S. appears all but dead.
On March 03 2009 17:36 tec27 wrote:
How exactly can wealth be redistributed to the rich through tax policy? By definition, taxes can only take money from people, not give it to them. So there are really only two possible ways you could skew them as 'redistributing to the rich': You somehow think other people are entitled to the money the rich are now not paying due to tax cuts, or you think that government tends to spend money on projects which help the richer to become much richer due to their political connectedness (which I would agree with, but thats really a whole different issue).
First, when I said we've witnessed a dramatic redistribution of wealth from the poor to the rich, I should've also included the middle class, because they're ones really getting the shaft. Now as for tax policy, the rich have made out like bandits. Seriously, look no farther than TARP and practically all of the bailouts. Ditto to the sweetheart contracts and corporate tax giveaways other posters mentioned. Talk about the rich getting richer due to "political connectedness."
But if you don't buy that, consider this: We have a tax code so riddled with holes, it allows a man like Warren Buffet (one of the richest people in the world) to play a lower marginal tax rate than his secretary. And yes, I do think "other people" are entitled to some of the money rich folks earn. I favor a progressive tax policy, which means I want the rich paying a larger share for the common good (to build infrastructure, provide health care, etc). Bush's tax cuts? They were extremely regressive.
Again, the overarching point is that over the last 10 years, the rich have gotten richer and the middle class is worse off or stagnant. To put it plainly, that's bullshit.
As for deregulation, where exactly has that happened any time recently? Cause I'm not really seeing that: as far as I can tell, government has gotten immensely larger in recent years.
When I said "deregulation," I meant the unraveling of government oversight of private industry, primarily the financial sector.
And lastly: unions. Unions *cannot* drive up wages for labor in general, they can only redirect wages to themselves and them members, at the expense of the rest of the economy. For instance, if you have a union (with government afforded privileges, of course) in steel, any sort of action they take to push wages away from the equilibrium price for their labor will drive up costs by at least that amount, thereby increasing the equilibrium price for steel. Such a price increase would increase costs for any industry that utilizes steel, thereby increasing the overhead of all those industries. So really then, unions function as a sort of vampire, stealing income from the rest of the economy and contributing little-to-no value in return. I see no issue with people forming unions voluntarily, or really any voluntary association of people. Unions today, however, are certainly not such an organization, and have been consistently granted government privilege that allows them to coerce and force people to join them or not work in certain industries. These privileges allow them to negatively effect the rest of the economy, and thats a huge, huge issue. Globalization has fortunately allowed people to get around the higher prices caused by unions, but at the expense of the industries the unions hijacked. Want to see real wages rise? Get rid of all that pro-union legislation and maybe then America can start producing things again and generating real wealth.
A strong labor movement can force capital owners to accept a smaller share of GDP, thereby driving up wages "in general." But I agree the price phenomenon you described can, and does, occur. It really does depend on the market, I think.
I'm not sure what you're talking about with respect to unions enjoying "government privilege." Unions have wanted card checks for a long time, but corporations have been able to block them. If anything, current laws (e.g. so-called "Right to Work" legislation) hinder union growth.
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"Unions *cannot* drive up wages for labor in general, they can only redirect wages to themselves and them members, at the expense of the rest of the economy."
This is simply wrong. Unions drive up wages (by redirecting that money away from profits) but by doing so workers earn more money so they spend more money. Businesses then enjoy higher revenues allowing them to increase profits to compensate for the original loss. You do not understand that the economy works through a cyclical system, money flows from one sector to another sector to another sector and onwards. Higher wages do take away from the economy at first, but they speed up the flow of wealth through the economy and as a consequence they end up giving more than they take and at the end of the day the entire economy benefits.
If you keep giving money to the rich at the same time that you are taking money away from the incomes spending cycle it will achieve nothing good for the economy. Why should I invest when I know wages are falling and thus demand will be weak? I will not hire more workers if there is not the demand for the goods and services those workers will produce. This is why there has been so much unproductive investment (in housing and stock market speculation) there are very few opportunities to actually create jobs as the income spending cycle which is at the heart of the economy is so weak.
Higher wages create opportunities for the private sector to take advantage by increasing demand. Thus it will actually increase investment, the lack of investment today is not the consequence of the rich having too little money, it is because there are too few opportunities. Pushing wages down through deunionisation has takes those opportunities away. It is a self defeating policy.
Those people who preach the evils of unionisation completely ignore the fact that unions were fundamental in increasing the quality of the economic growth of the post war period. The economy grew, and unions made sure that workers would get some of that money for themselves. Thus the growth of this period did not lead to deteriorating income inequality and that money was preserved in the incomes spending cycle leading to self perpetuating economic benefit. We started deunionising in 1980 and have been going backwards ever since. At least in all the ways that actually matter.
Monetary policy was used to offset the contractionary force coming out of falling wages but it can only do so at the cost of increasing debt. As wages continued to fall debt continued to rise. The contractionary force never went away so neither could the expansionary monetary policy. We have seen permanently expansionary monetary policy for 18 years now. The United States finally reached a point in 2007 where monetary policy just stopped working. People could increase their levels of debt no further and so this artificial demand keeping the economy afloat disappeared sending it immediately into a rapid and accelerating recession.
Deunionisation was fundamental in creating the contractionary force right at the start and for this reason it deserves considerable blame for the crisis that exists today (the other reason is the misuse of fiscal policy imo).
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On March 03 2009 18:26 cUrsOr wrote:
isnt china, economically, one of the most protectionist nations ever? didnt they vigoursly defend against imports for like the entire 20th centruy? so wouldnt their economic growth actually be an arguement against free trade?
Yes I would agree on this.
and isnt the crushing of our economy, in some ways, simmilar to that of latin american countries that recieve our cheap food imports?
What is happening in the American economy is very very similar to what happened in South American countries and for the same reasons. Argentina is a good example of this. American economists when to Argentina and directed their economic policy. They told the government to fire most their teachers nurses and public sector workers in general, they reduced unemployment benefits to zero, they completely stopped any infrastructure investment. Basically they followed a small government philosophy aggressively. Then they opened up to free trade, deunionised their labor market (by simply executing and torturing union leaders) and privatised all government industry. The consequence was a dramatic deterioration in the levels of employment (govt fire workers > less demand > more job losses > falling govt revenue > cut spending > less demand > more job losses) wages immediately started to plummet further reducing demand and accelerating the recession, free trade lead to the destruction of many industries making things even worse. They then used expansionary monetary policy to try to create demand but all this did was create very high inflation (I would agree that it is unlikely we will see an inflation crisis in the United States).
This is very similar to what is happening in the United States today, same policies, same consequences. The only difference is that monetary policy has worked very well to cover up this decline, and these policies were carried out much slower leading to a much slower decay.
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On March 03 2009 20:40 Choros wrote:
"Unions *cannot* drive up wages for labor in general, they can only redirect wages to themselves and them members, at the expense of the rest of the economy."
This is simply wrong. Unions drive up wages (by redirecting that money away from profits) but by doing so workers earn more money so they spend more money. Businesses then enjoy higher revenues allowing them to increase profits to compensate for the original loss. You do not understand that the economy works through a cyclical system, money flows from one sector to another sector to another sector and onwards. Higher wages do take away from the economy at first, but they speed up the flow of wealth through the economy and as a consequence they end up giving more than they take and at the end of the day the entire economy benefits.
You're suggesting that increasing salaries by itself creates economic growth?
First off, if you increase salaries then you're increasing companies' costs too, so they wouldn't have any profit. Worse even, part of that increased pay would go to imports, so american companies would be worse off. You can't create economic growth this way, if you did it would only be nominal, not real. Go look at some macroeconomics models. In the long run, you're always staying with the potential output, and that's not gonna shift with hollow wage increases.
On deunionisation, here's Larry Summers:
"Another cause of long-term unemployment is unionization. High union wages that exceed the competitive market rate are likely to cause job losses in the unionized sector of the economy. Also, those who lose high-wage union jobs are often reluctant to accept alternative low-wage employment. Between 1970 and 1985, for example, a state with a 20 percent unionization rate, approximately the average for the fifty states and the District of Columbia, experienced an unemployment rate that was 1.2 percentage points higher than that of a hypothetical state that had no unions."
http://www.econlib.org/library/Enc/Unemployment.html
You may also look at what over market-price wages did to the american automobile industry. While supposedly providing america with all this marvelous fairness and "quality growth" (lovely concept btw), they were a major factor for GM, Chrysler and Ford's uncompetitiveness against foreign manufacturers, and a massive burden on the companies leading them to bankruptcy-unless-bailed-out.
Collective bargaining may have made some sense in clearly monopsony labour markets of the industrialisation era, but today's world is much different.
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EPT
