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Assessing the Political Aspects of Full Employment: Evidence from Strikes and Lockouts

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  • Luke Petach

Abstract

Using monthly state-level data on work stoppages from the Bureau of Labor Statistics (BLS) and state-level labor market data from the Current Population Survey (CPS) this paper estimates the effect of state-level labor market conditions on strike activity from 1993 to 2023. Panel fixed-effects estimates suggest a one percentage-point increase in the unemployment rate reduces the number of work stoppages involving 1,000 or more workers (per million) by approximately 14%. The fixed-effects estimates are supported by a propensity-score based specification that exploits the differential timing of national recessions across US States. Entering a recession is negatively related to state-level strike activity as measured by both work stoppages and the share of employed workers reporting an absence from work due to a labor dispute. The results in this paper provide empirical support for Kalecki (1943)’s argument regarding the “political aspects of full employment”: weak labor markets reduce direct action by labor, thereby providing a rationalization for capitalist opposition to full employment policy.

Suggested Citation

  • Luke Petach, 2024. "Assessing the Political Aspects of Full Employment: Evidence from Strikes and Lockouts," Working Papers PKWP2407, Post Keynesian Economics Society (PKES).
    • Handle: RePEc:pke:wpaper:pkwp2407
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    References listed on IDEAS

    as
    1. Luke Petach, 2021. "Spatial Keynesian policy and the decline of regional income convergence in the USA," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 45(3), pages 487-510.
    2. Malcolm Sawyer, 2023. "Political Aspects of Full Employment: Eight Decades On," Review of Political Economy, Taylor & Francis Journals, vol. 35(4), pages 1109-1123, October.
    3. Michalis Nikiforos & Duncan K. Foley, 2012. "Distribution And Capacity Utilization: Conceptual Issues And Empirical Evidence," Metroeconomica, Wiley Blackwell, vol. 63(1), pages 200-229, February.
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    Cited by:

    1. Luke Petach & Daniele Tavani, 2025. "The end of laissez-faire in classical-Marxian models of growth and distribution," Working Papers PKWP2514, Post Keynesian Economics Society (PKES).

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    More about this item

    Keywords

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    JEL classification:

    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation

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