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Unions Key to Reviving the Middle Class, Krugman Says

Nobel Prize-winning economist Paul Krugman. Photo by Mike Campbell.   Many of the remedies being misapplied to the nation's ailing economy are nothing more than public policy myths that grew out of the oil-shock recessions of 40 years ago, Nobel Prize-winning economist Paul Krugman told an AFT TEACH conference audience on July 11.

These misdirected policies—reckless deregulation, union-busting tactics and attacks on the public sector—have led to nearly a half-century of increasingly weak growth for Main Street America, the loss of a half-million government workers, and a redistribution of wealth away from the middle class that rival Gilded Age excesses, said Krugman, a Princeton University economist and author of a widely syndicated column in the New York Times.

"Myths trump realities" in today's political landscape, Krugman said. The nation's rekindled interest in disco-era policies with bad track records—from the "notion of government as the problem" to "beating down workers as the route to prosperity"—is moving the country away from sustainable recovery and transforming the United States into a weak outlier among developed nations.

"People who say we can't have effective collective bargaining and compete in the world should look around a little bit," said Krugman, pointing to Canada, Sweden and Germany as examples of highly competitive nations where the unionized workforce is up to five times as large as in the United States. Not only do unions fight the decline in average wealth for their members, they also work to preserve and expand a strong safety net for ordinary citizens, to lift wages and working conditions across the board, and to promote public education and other institutions vital to renewed growth and continued prosperity.

"You can't bring back the middle class without unions," he said. [Mike Rose/photo by Michael Campbell]

July 12, 2011