THE ECONOMIC INFLUENCE
OF AMERICAN UNIONS
George H. Hildebrand
Economics is an observational rather than an experimental science. It lacks recourse to the laboratory. In consequence it cannot conduct experiments under ideally controlled conditions in which some single influence can be varied deliberately to discern its separate effects with all other determining forces held constant. Instead, it must rely on statistical procedures that, at best, are but imperfect substitutes for the method of controlled experiment. Failing these, it must fall back on descriptive insight and even a measure of intuition.
This is the underlying technical problem posed when one asks: what is the influence of labor unions on the American economy? The same difficulty besets an attempt to predict, in any precise way, the effect on GNP of a tax cut of 10 billion dollars. Many variables influence the behavior of GNP, of which tax levies are but one. Similarly, many variables affect relative wages, the share of wages in the national income, and the behavior of the levels of wages and of prices. Among them is the institution of unionism and collective bargaining, but it is only one. In consequence, the issue of union impact cannot be finally resolved. For the same reason, pronounced differences of opinion exist among the experts who have studied these questions. Nonetheless, there is a measure of agreement in some areas, and we are not entirely bereft of knowledge or of well-based opinions at some points.