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

Luke Petach

No PKWP2407, Working Papers from Post Keynesian Economics Society (PKES)

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.

Keywords: Michal Kalecki; Strikes; Work Stoppages; Labor Relations; Business Cycles (search for similar items in EconPapers)
JEL-codes: D33 E11 J52 (search for similar items in EconPapers)
Pages: 27
Date: 2024-05
New Economics Papers: this item is included in nep-lab
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