Government Transfer Payments and Strike Activity: Reforming Public Policy

Abstract

[Excerpt] One of the most controversial labor policy issues is whether strikers should be eligible for government transfer payments, such as unemployment compensation, public assistance, and food stamps. The controversy often focuses on whether payment of such benefits to strikers increases the magnitude of strike activity. In this article, we argue that that is the wrong focus. The key issue is not whether strikers receive benefits, but who finances them. We contend that to the extent that the benefits are financed by the parties to the conflict (the employer and union), the transfers will not affect strike activity. This article extends our recent book on this topic, by briefly describing current and past policies, summarizing our argument for why financing is key, and presenting a proposal for reforming strike-related government transfers.