There’s a fair amount of literature as to whether there is a causal relationship between labor union membership and higher wages, and the evidence is mixed. However, in a recent study (h/t In These Times), two political scientists from Notre Dame, Patrick Flavin and Benjamin Radcliff, and Alexander Pacek from Texas A&M, examine the relationship between labor union membership and subjective well-being, or happiness. They use individual and aggregate data from 14 countries.
Our findings strongly suggest that unions increase the life satisfaction of citizens, and that that this effect holds for non-union members as well. Moreover, we also find that labor organization has the strongest impact on the subjective well-being of citizens with lower incomes…We show these relationships to have an independent and separable impact from other economic, political, and cultural determinants.
Their methodology seems sound, as they have a robust set of controls at both the aggregate and individual level- in aggregate, they control for social expenditure, GDP, and unemployment, and for individuals, they control for education, self-reported health, self-reported trust levels, and others. They use OLS, and in some specifications, interact union membership with income to see how the relationship varies with income. OLS certainly leaves the study prone to omitted variable bias, but they do their best with the controls mentioned above.
I find striking the result that union density has an equally strong effect on reported well-being of non-members. However, though American society may not value worker solidarity so high, that could be because we don’t have much of it. I think that this study is a great example of political scientists asking the right questions, both in their outcome variable and they key variable of interest. Subjective well-being is receiving more attention in economics, it seems, and perhaps this will lead policymakers to make decisions are metrics other than economic efficiency.
…but given that subjective well-being and objective well-being only move together at lower levels while objecive one breaks out after a certain threshold, it follows that, given emphasis on subjective measures, that you will end up conducting left-wingeed policies. As the logical consequence is to redistribute high incomes to lower groups on a large scale which is anything but compatible with our capitalistic system.
I would agree with your premises. Your conclusion is flawed, just ask Adam Smith- it is fully compatible with capitalism to have redistribution. I also urge you to think beyond capitalism as the only way of organizing society.
Sorry, I should have put more emphasis on the “large scale” redistribution. That means it is alright to tax away higher incomes in favour of the poorer resp. for the community – up to a certain degree! What I catch from the local media is, that many richer people are not necessarily against giving away their incomes and even feel some responsibility to do so.
Now the question is how much goodwill can we risk. What happens if we create an environment where the richer refuse to see a certain responsibility? I also assume that choosing your residence is a matter of taste if you belong to the better percentile. And what about those entrepreneurs doing their job to get a higher income? It might become even worse when choosing the wrong subjective measures. Say you use a compound measure, it will be likely that taken single elements isolated could lead to the exact opposite direction.
Now since subjective well-being has an upper limit it can only lead to collectivistic outcome but which is incompatible with the individual human nature. Also recall marketing: humans have unlimited needs.
And although I share your view that there are better ways than capitalism so far it is the only thing that works. And indeed driving the discussion in economics might be a good start. But I believe we are not ready on the political level and hence in our society. Well at least the western cultures. Asian cultures have better prequisites in this respect (see e.g. Hofstede).
Personally, I prefer the society in the Star Trek universe. But I guess we need some fancy aliens at first.