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An Economic Analysis of Public Labor Policy Lester Blum Iowa State College Iowa State University Capstones, Theses and Retrospective Theses and Dissertations Dissertations 1949 An economic analysis of public labor policy Lester Blum Iowa State College Follow this and additional works at: https://lib.dr.iastate.edu/rtd Part of the Economics Commons Recommended Citation Blum, Lester, "An economic analysis of public labor policy " (1949). Retrospective Theses and Dissertations. 13218. https://lib.dr.iastate.edu/rtd/13218 This Dissertation is brought to you for free and open access by the Iowa State University Capstones, Theses and Dissertations at Iowa State University Digital Repository. It has been accepted for inclusion in Retrospective Theses and Dissertations by an authorized administrator of Iowa State University Digital Repository. For more information, please contact [email protected]. INFORMATION TO USERS This manuscript has been reproduced from the microfilm master. UMI films the text directly from the original or copy submitted. Thus, some thesis and dissertation copies are in typewriter face, while others may be from any type of computer printer. The quality of this reproduction is dependent upon the quality of the copy submitted. Broken or indistinct print, colored or poor quality illustrations and photographs, print bleedthrough, substandard margins, and improper alignment can adversely affect reproduction. In the unlikely event that the author did not send UMI a complete manuscript and there are missing pages, these will be noted. Also, if unauthorized copyright material had to be removed, a note will indicate the deletion. Oversize materials (e.g., maps, drawings, charts) are reproduced by sectioning the original, beginning at the upper left-hand comer and continuing from left to right in equal sections with small overiaps. ProQuest Information and Learning 300 North Zeeb Road. Ann Arijor. Ml 48106-1346 USA 800-521-0000 NOTE TO USERS This reproduction is the best copy available. UMT AN ECONOMIC ANALYSIS OF PUBLIC LABOR POLIGT by Lester Blum A Dissertation Submitted to the Graduate Faculty in partial Fulfillment of The Requirements for the Degree of DOCTOR OF PHILOSOPrir Major Subject: Economics Approved: Signature was redacted for privacy. n chaS^ge of M^orn/fork Signature was redacted for privacy. Ktsad or M33br Department Signature was redacted for privacy. DeSin of Graduater College Iowa State College UMI Number: DP12587 ® UMI UMI Microform DP12587 Copyright 2005 by ProQuest information and Learning Company. All rights reserved. This microform edition is protected against unauthorized copying under Title 17, United States Code. ProQuest information and Learning Company 300 North Zeeb Road P.O. Box 1346 Ann Arbor, Ml 48106-1346 V\-D 6'10 G PUDliJC POLICY AKD ••••••*••••••••••>•• • 1 Econcnnic Anal^raia And Tho Labor i'roblem 1 Government Policjr /Jid The Labor Problem. k I^ar3^ labor pol^o^Ci Labor in a t'roTfjnp iiicuabrial econoray 20 The period of movem ent intervention 37 Labor in a complex society 52 Ecoiio2iic Guidepoats For i^olicy Decisions 65 The allocation problem 73 The inccKoe problem*...... 77 Aim And Scope Of Study* 80 LAEOa FOUGY iilJD iiCO.iOLIC EiiiTAEILITY 06 The Problem Of Adaptation 36 technological innovation 87 Labor immobility*... 101 Non-economic "codes of conduct" lU Cyclical insecurity Il5 Income stabilization 117 Employment stabilization ll|6 Summaxy..... l56 Secular xJaladjustcents In Labor Markets 157 The svipp3y of labor resources l60 The in^iact of population changes 162 The demand for labor resources 170 The impact of economic progress 178 Qyclical Maladjustments In Labor i^arkets l85 T/ages, prices and production 187 Labor markets end full en^Jloyment 191 Restrained bargaining thesis 192 Limited control thesis 197 Labor markets and depwasion. 203 MSIC CRITERIA FOR A LABOR rOLICY 212 Aggregate Wage Income And The Task Of Full iiimployment 2m Limited government intervention 216 f Economic totalitarianism*217 Relatively free collective bargaining 220 7^ iii. Page The Optiaium Allocation of Labor Resources 223 Econo.-nic totalitarianism 22? Limited covemment inturvontion 229 Relatively free collective bargaining 233 The Political Problem 2liO Foundations of economic discord 2ii3 Th<? reconciliation of opposing interests 2kl The democratic solution in theory .ind practice 2$0 GENERAL CONCLUSIONS 2$k LITERATURE CITED 2^7 Books Miscellaneous Publications 260 ACKNOiTLEDOJJBNTS 266 APPENDIX 267 PUBLIC fOLIGI JUffi ECOWOLIIC liiiSfONaiBILITY Economic Analysis and the Labor Problem The broad field of labor economics has been experiencing the pattern of expansion undergone by most other specialisns in the past. Numerous studies have been made dealing vri.th labor legislation, trade-union behavior, unem­ ployment insurance, ivage theory, and labor problems during prosperity and depression. Although labor economists divide the field into rather arbitraiy categories fet? include perhaps the most significant area: labor policy. This may at first seem odd, since the term labor policy appears frequently in the literature. This study, however, atteajits to show that the term, as it is currently being used in the field, is misleading. A distinction should be made betrreen "industrial relations policy" and "labor policy". IndTistrial relations policy deals -ndth the rights and duties of the parties in their contractual relations with each other and the extent to •?riiich government ought to intervene in the settlement of lavsful industrial disputes. Labor policy concerns itself iiYith the regulation and control of labor markets for the purpose of modifying the play of economic forces affecting the allocation of resources and the level of employment in the economy. It is the latter rather than tlie former area "Bhich this study intends to investigate. contrast, such fields as agricultural economics and public finance both provide positions of ±E5)ortance to agricultural policy and monetary- fiscal policy, re^ectively. This is not intended as a criticism of indi­ viduals fjorking in the field of labor. It reflects a somenhat unsatisfactory state of econotaic theory itself. Policy questions frequently arise which uitfortunately involve tools of anail^sis yet to be developed* Furthermore the borderlands of labor economics — the sociology, psychology and politics of labor problems are not easily excluded. In fact thegr perhaps will ultiioately provide the economist with the required analytical tools. These difficulties hoirever are not Insuperable. It is still possible / to block out the major criteria to be used in analysing policy questions. And a neir orientation lying iirlthin the framenrork of economic analysis rather than legislative or historical description needs to be developed. Ey no stretch of the imagination is the discussion of labor legislation in the purely legal sense adequate for dealing with governments' activities affecting labor-ntanagement relations. Government lny its very nature most follow the path of legality in effecting its policies. An evsQaiation of the policies themselves, however, requires criteria of an extra-lagal nature — in the present case, the economic consequences of specific governmental decisions. Moreover, Tdth the proper economic orientation, appropriate legislative en­ actments designed to meet specific labor problems may in fact lie outside of the labor framofwork., per se. A coiaplete history of labor legislation transcends the framework of this study. Althou^ many cases and legislative enaclments are included in the discussion they serve only to illustrate the long-time transformation of the public's interest in labor questions. The en^ihasis placed on -tiie early period of our histozy reflects the author's feeling that the requirements of a labor policy, directed toward fxmdamental economic problems, are most clearly ex­ pressed in a relatively sinqple, primitive econongr. ^e issues of the time are not clouded by a major concern over "industrial relations". !Fhe effects of imga - r^rico iicciaiona on ro.Jturcc allocation aa "..til SJS the Juipact of econoailc progress on labor marketo are clcurly poreolvod. As the atudy profprcssos ohrcnoloi;lcallyy eooiiotalc pro^Toss and Its attendant privation act aa a atlaulua to tho growth of T/orJooan's organi­ zations* Initially, this m&nifojta itsolf in the form of socio-jiolitical dmnands by the JO organizations* Later, with the advent of the factory systoD, Qoro iijoodlato cloluo oro oado for Incroaocd incone, shorter hours and better working conditions* The growth of trade unions, a necessary COQ~ dltlon for aclilcving these claims, is at once hindered by prevailing concepts of property rights and legal insbituticms* Labw's struggle to overcome these barriers end the events leading V53 to the present period wherein the public concerns itsolf increasingly with "industrial relations" problems are briefly considered and doouoented* The passage of the V.'agner Act serves to iUastrate this concezTi* The Act is of interest to us, however, only because it represents the fulfiUment of labor's long search for equality of status* Since it does not represent a coiq>lete labor policy, it receives rather limited treatrient* The Taft-Hartley law is also treated in a per­ functory manner for the same rea .on. It ::;crcly represents £ continuation of the power struggle between labor and management. Tliis stateii.ent is not intended to deprecate the importance of this struggle. It serves sii^ly to reinforce our initial distinction between "Industrial relations policy" and "labor policy" * The
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