Labor unions should have an important leadership role in democratizing finance. Sponsoring new risk management policies and procedures could be a life saver for their members, protecting them against a harsh outcome in the event of great income inequality, protecting them perhaps far better than any ongoing collective bargaining ever could. Unions are in a particularly good position to understand the risk management needs of their members, needs that are connected to their occupational niche and their personal circumstances. These unions could help design occupational insurance for their members and select labor income indexes that are particularly relevant to them. They could advocate home equity insurance policies for their members, with attention to the special needs of members - attention, for instance, to the risk that a plant closing in an isolated community could harm the home values there. They could advocate pension plans that invest in macro securities that serve to offset risks to occupational income fluctuations. They could also provide information about the specific needs of their members.
Sunday, 6 April 2008
Robert Shiller on unions and democratizing finance
The quote below is from The New Financial Order. It makes a lot of sense to me.