Saturday, December 24, 2005

ON STRIKE: Pareto optimality and labor disputes

 Image from the photo gallery (http://depts.washington.edu/pcls/gallery.htm) of the Harry Bridges Center for Labor Studies at the University of Washington.  Visit the Center online at http://depts.washington.edu/pcls/index.htm.Negotiators, economists, game theorists, and mediators alike are probably familiar with Pareto optimality, which envisions the reallocation of resources among individuals so that the outcome for at least one individual can be improved without leaving anyone else worse off.

Here’s an interesting reflection on the recent New York City transit workers strike, from blogger Mike Goelzer, who wonders whether strikers and the city could have achieved Pareto optimality—avoiding disruption to commuters and loss to New York businesses while enabling the city and union to continue negotiating.

Goelzer links to “A Better Way to Go on Strike,” an essay originally published in the Wall Street Journal back in ’97 which proposes a creative way to address labor disputes while reducing the costs and collateral damage which traditional strikes result in.

(Thanks to Amit Gupta’s blog for this link.)