A movement to break with Republican orthodoxy and craft a platform that is clearly pro-worker has gained traction over the past few years. When Donald Trump selected J.D. Vance as his running mate and invited the head of the Teamsters union to speak at the Republican National Convention, the idea that the Republican Party should more fully assert itself as “the party of workers” — — has been consolidated.
Voters are likely to welcome new Republican priorities that are shared in many ways by Democrats and even our friends across the Atlantic. But let’s be clear: An agenda to empower American workers through unions and job protection policies will require trade-offs. The question is how much Republicans can do without undermining America’s greatest strength: the dynamic nature of the labor market.
Traditionally, the United States has earned its reputation as the “Land of Opportunity” by creating a thriving entrepreneurial environment and labor market that creates numerous job opportunities for millions of Americans. Mr. Vance’s story about his own American Dream is a prime example of how the American Dream empowers the working class.
Vance achieved success not by protecting his job and wages through union membership, but by moving from one job to another, jumping between vastly different careers. , chasing high growth (and high growth). This approach worked for him and millions of others.
Americans are accustomed to the idea that pro-worker policies—similar to those in Europe—are those that provide broad job security, encourage unions, and ensure structural increases in wages and advancement opportunities. A European-style approach could improve job security and ensure wage stability for existing workers. However, this comes at the expense of new and inexperienced workers, job opportunities and job mobility. Much of Europe has chosen to put labor market dynamism on the back burner.
Italy is a prime example of this tension. Despite everything this country has to offer, it’s not known for its thriving labor market. In fact, my husband and almost all of his well-educated classmates from top Italian universities were forced to look for work abroad after graduation. Less than 10 years ago, youth unemployment in Italy was a staggering 45%. Even today, this ratio stands at 23%, one of the highest among developed countries.
It is no coincidence that Italy is also known for having some of the most worker-friendly labor policies among Western countries, characterized by high unionization rates and policies that provide broad employment protections. Yet no one immigrates to Italy to pursue the Italian dream (unless, of course, that means living the dolce vita in a charming cliffside villa on an American income).
In fact, a series of studies found that when Italy slightly reduced its protected employment regulations, it resulted in increased employment and more jobs, especially for younger and less experienced workers. Italy is not a unique example; economists have long documented how stricter labor regulations that protect existing jobs can lead to lower labor mobility, fewer jobs and higher unemployment.
That doesn’t mean we shouldn’t create unions or safety net policies for American workers. But if conservatives hope to pursue a European-style pro-labor policy path, they must be careful not to limit our economy’s most powerful asset.
Economists have proposed a variety of unique ideas to protect workers, from the Earned Income Tax Credit to some variation of a negative income tax policy. U.S. unions could also transform by eliminating government-granted exclusive bargaining representative status so that multiple unions can represent workers at any given employer. Doing so would increase union membership and provide workers with more diverse institutions and the protections or benefits they seek in the workplace.
Donald Trump and J.D. Vance are right that conservatives should pursue a pro-worker agenda. But it must rely on what has traditionally made the U.S. labor market dynamic—entrepreneurial energy—rather than on rigid European-style labor policies.
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