Matt Nolan

Bleg: The role of unions

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I see that Bloomberg is stating that Economists are changing their minds about unions – moving from seeing them negatively to seeing them positively.

Unions are an interesting topic, but are also inseparable from a discussion about the relative welfare state and competition policy embedded in a nation.  Nordic and German trade unions are quite different from the trade unions of the US, UK, and Australiasia – and any evaluation of an institution in this way requires a model that allows us to represent the institution relative to other institutions in the economy, the way individuals behaviour relates to that, and how the outcomes for individuals will vary.

So does anyone want to do some of that in the comments below?  I will hopefully be writing up some things on these issues over time – but as a starting point for discussion I will put up this oversimplification.  Unions help to correct issues of insufficient bargaining power for labour, but like any monopoly their existence leads to deadweight losses which hurt those outside of the unionised industry, and are unfair to capital owners in competitive markets.  Evaluating whether more unionisation is good relies on comparing the costs and benefits given in this oversimplification.

Off we go …

Matt Nolan

Bleg: Is this due to capitalism?

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I hear this sort of thing a lot – and want to hear your views.  I will give a view in the future.

Also we used to just play Sim City 2000 in economics class at high school and I thought it would be cool if the individuals in the city followed rules – something they talked about for the latest Sim City but didn’t really do.  So remember any model we build to explain this is sort of like that, just maybe less entertaining with a dearth of colourful sounds.

Matt Nolan

Bleg: Child poverty, problem definition and solutions

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Hey all.  I see that National has made child poverty a focus of their new term – cool.  Obviously “Child Poverty in New Zealand” has been a persuasive book, and I really need to read and review it here.

This is an issue that is definitely important to consider, which means we need to think carefully about what issues we are looking at addressing, what policy tools there are, and what trade-offs exist when you use them.

I first noticed the National party focus from this tweet:

Followed by this tweet:

Ignore the fact that this is a Labour person trying to claim that they’ve “won” some argument here – in truth this really illustrates to me how poor the “left vs right” divide is at saying anything.  Child poverty and lack of opportunities is an important issue, moving towards restrictions on foreigners buying land is not comparable and not part of the “same agenda”.  We can be internationalists and care about poverty.

Still, I’m getting off tack – I would like you guys to have a crack at stating some of the “problems” and policy “solutions” involved in the space of child poverty.  If you know anyone who has some views on this, would you be able to send this to them and get them to write in the comments.  I’d like to get a bunch of feedback in, and see if we can do a series of posts on the issue.

And in case someone turns up here saying economists don’t care or think about the issue, thereby illustrating they don’t know anything about either me or the economics discipline, read what I said about food in schools.  And take into account that the vast majority of working economists I’ve talked to about that post have said they agree with me.  And further note that economics is the study of trade-offs, we only agree with this policy as the trade-offs involved fit our personal value judgments, so we are more than accepting of disagreement – in that way, please try to come at us with a neutral stance 😉