Neoliberalisms Effects on Unions

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Neoliberalism began to rise in the 1970’s as the more dominate view in macro-economic policy making. This was a switch from Keynesian macro-economic policy used after world war two. This switch in policy led to more free trade agreements, which opened up markets all over the world to cheaper sources of labor. This cheaper labor lead to manufacturers in developed countries to switch there manufacturing to third world countries were labor is much lower to maximize their profits. This has led to the downfall of unions since their jobs don’t exist anymore. Any attempt for a union to gain leverage for benefits or wages is met with a plant closure and a move to a non-union country. Organized labor should respond to these challenges by developing social movement unions which transcend the institutionalized trade unions. These unions act on their own outside of state institutions and recruit people of all walks of life. I will compare this method with radical political unionism which is similar to social movement unions but is class centered and also has a political focus. After world war two the dominant economic theoretical framework was Keynesianism which was focused on getting full employment and to help people out of extreme poverty (Thorsen and Lie 8). Keynesian economics lead to a highly unionized work force that was able to band together and create jobs with high wages and good benefits. Unions flourished at this time becoming highly politically active and a powerful opponent to business on behalf of labor. In the 1970s there was a shift in economic thinking from a Keynesian economics to neoliberalism. This meant that the states would stay out of the economy and which would lead to fewer regulations on business letting the market regulate itself (Thorsen and Lie 8). To find the effects of neoliberalism on trade unions we must find a definition that adequately

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