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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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    File URL: https://www.postkeynesian.net/downloads/working-papers/PKWP2407.pdf
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    References listed on IDEAS

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    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.
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    More about this item

    Keywords

    Michal Kalecki; Strikes; Work Stoppages; Labor Relations; Business Cycles;
    All these keywords.

    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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