Summers Offers Philosophical Defense Of Employee Free Choice Act

Barack Obama's chief economic adviser, Larry Summers, offered a firm philosophical defense of the Employee Free Choice Act during a speech at the Brookings Institution on Friday.

Saying that increased unionization would create higher wages, which in turn would lead to greater purchasing power and demand -- the keystone of economic recovery -- Summers declared it impossible to not see "the need for some adjustment in an environment that has proven so problematic for labor union organizing."

Summers warned that people should be "mindful of the risks of swinging pendulums too far" in one direction or another, but nevertheless argued that "public policy" should "correct" some of the impediments toward unionization.

"If we want to propel this economy forward and we want to have a sound expansion, it has to be an expansion whose benefits are more broadly shared. And that goes to questions of tax policy... It goes to the questions of education over the longer term. And it goes to the question of having a healthy and well-functioning trade union movement. And I think it is hard to avoid the conclusion that the way in which our labor laws have functioned, and have been enforced and been acted on over many years, have not been constructive from the point of view of having a healthy trade union movement. And an attempt to redress that balance seems to me something that is appropriate at such a time."

It wasn't an endorsement of the Employee Free Choice Act by name, but in principle. Certainly, his remarks on the labor movement's top legislative priority were stronger than anything that has come from the White House since EFCA was introduced in Congress on Tuesday (the administration has remained largely quiet, though the president, vice president and labor secretary all endorsed EFCA roughly one week ago).

Summers has been critical of the economic impact of increased unionization in writings in the past labeling it a cause of long-term unemployment.

"High union wages that exceed the competitive market rate are likely to cause job losses in the unionized sector of the economy," he wrote several decades ago in The Concise Encyclopedia of Economics.

Asked about that writing by the Washington Post's Ruth Marcus, Summers insisted that different analyses are bound to accompany different economic periods.

Today, he said, "I don't see how anyone who looks at the consolation of facts can't see the need for some adjustment in an environment that has proven so problematic for labor union organizing."

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