6 ms·

> The reason, economists reckon, is power. New hires generate a surplus, reflecting the fact that both worker and firm expect to gain from the transaction. Wage

> The reason, economists reckon, is power. New hires generate a surplus, reflecting the fact that both worker and firm expect to gain from the transaction. Wage bargaining is a negotiation over how to split this surplus. Hello Marx. > If firms have the upper hand, because a new job is harder to find than a new worker, employers capture most of the surplus, creating a gap between the value created by workers and what they are paid. US has full employment, so this explanation does not take into account that finding a job is super easy. Im skeptical. The plea for unions is so unique coming from The economist.

moorhosj 8y ago
If we are truly at full employment, why aren’t wages rising 3-4%?
- petermcneeley 8y ago
  https://www.youtube.com/watch?v=1i0eQzMRrrc&feature=youtu.be&t=268 https://www.youtube.com/watch?v=1i0eQzMRrrc&feature=youtu.be...
pjc50 8y ago
"Surplus" is a respectable concept in mainstream economics, e.g. "consumer surplus": https://www.britannica.com/topic/consumer-surplus https://www.britannica.com/topic/consumer-surplus ; it's not intrinsically linked to labour theory of value, and the statement as written is true. > The plea for unions is so unique coming from The economist. The Economist and the FT often say things which are considered "radical" by popular economic discourse standards, because their readers are interested in what's actually happening while the popular discourse is extremely dogmatic and driven by the right.
- conanbatt 8y ago
  Yes, but the idea that labor and company are splitting a same pie and that with organized labor you will increase that pie is a veiled labor theory of value. It goes contrary to other concepts like increasing profits , increasing capital investment, increasing wages, etc. > The Economist and the FT often say things which are considered "radical" by popular economic discourse standards, because their readers are interested in what's actually happening while the popular discourse is extremely dogmatic and driven by the right. I do not mind, but the economist is an economically liberal news source and Unions(as they are known by the public) are enemies of liberal economics. I hope Unions don't make a comeback.
  - pjc50 8y ago
    > but the idea that labor and company are splitting a same pie and that with organized labor you will increase that pie is a veiled labor theory of value. It goes contrary to other concepts like increasing profits , increasing capital investment, increasing wages, Eh? Increasing wages is exactly what we're talking about here. For any given firm, after accounting for external costs there is a quantity of money left over which may be re-invested, given out as wages in some distribution (how much to the CEO?), or returned to investors. Some re-investment may also be in the employees in the form of training or retention perks. Exactly how this is distributed is up for questioning. > Unions(as they are known by the public) are enemies of liberal economics I think the point of the Economist is that this is a political view, and that it needn't be this way: Germany is always cited as a country where it works differently. Having adversarial relations with the union is a choice. A leader can also choose to consult them on mutually beneficial changes in working practice.
    - conanbatt 8y ago
      > A leader can also choose to consult them on mutually beneficial changes in working practice. For sure, I believe people should unionize if they want to, but should be given no special benefits for doing so. Argentina has constitutional level protections for unions, they cant be jailed, etc. They own soccer clubs, and threaten politicians families and cant be incarcerated, while also having highest and increasing poverty and lower employment.
      - s73v3r_ 8y ago
        "For sure, I believe people should unionize if they want to, but should be given no special benefits for doing so." Why is it fair for the company to be given special benefits for incorporating, but not for labor?
        conanbatt 8y ago
        The equivalent legal protection of a union for a company would be monopoly licenses, and mandatory consumption of services and goods of a specific company. They are not comparable sets of protections. Plus, unions can also incorporate, but the legal protections asked by unions are not of legal organization, but of protection from other workers or coercion to employers.
pault 8y ago
Full employment? What about all the people that have dropped out of the workforce?
- fastball 8y ago
  They're not counted?
- gowld 8y ago
  Everyone with a job is employed, therefore the economy is great; what's to complain about?
- s73v3r_ 8y ago
  There are lots of people who don't participate in the workforce, for various reasons. You have to decide how many of them are doing so because they can't find a job, and how many of them are for other reasons (retired, student, stay at home parent, disabled, etc).
paganel 8y ago
> The plea for unions is so unique coming from The economist. They've slightly changed their discourse in the last couple of years (not sure if it coincides with their change of editor). My guess is that the sort of people that work at newspapers/magazines like the Economist started to realize that the "working classes" (in which I include most of the actual middle-class) need a bigger share of the economic pie, otherwise they (the working classes) will keep voting into power more and more populist leaders, and that's very bad for business. A similar thing happened in the 1870s and especially after the Bolshevik conquest of power in 1917, the capitalists in the West realized that they need to better take care of their workers otherwise they and their families might end up in a common grave, their properties nationalized.
- cryoshon 8y ago
  yeah, this is my takeaway here as well. their fundamental view is always that stability is preferable to chaos -- and they prioritize that higher than maintaining their economic views. capitalism has become so exaggerated that it threatens stability thanks to its inequality. the economist recognizes that and is trying to do some thought leadership to course-correct.

moorhosj 8y ago

If we are truly at full employment, why aren’t wages rising 3-4%?

petermcneeley 8y ago
https://www.youtube.com/watch?v=1i0eQzMRrrc&feature=youtu.be&t=268 https://www.youtube.com/watch?v=1i0eQzMRrrc&feature=youtu.be...

pjc50 8y ago

"Surplus" is a respectable concept in mainstream economics, e.g. "consumer surplus": https://www.britannica.com/topic/consumer-surplus https://www.britannica.com/topic/consumer-surplus ; it's not intrinsically linked to labour theory of value, and the statement as written is true. > The plea for unions is so unique coming from The economist. The Economist and the FT often say things which are considered "radical" by popular economic discourse standards, because their readers are interested in what's actually happening while the popular discourse is extremely dogmatic and driven by the right.

conanbatt 8y ago
Yes, but the idea that labor and company are splitting a same pie and that with organized labor you will increase that pie is a veiled labor theory of value. It goes contrary to other concepts like increasing profits , increasing capital investment, increasing wages, etc. > The Economist and the FT often say things which are considered "radical" by popular economic discourse standards, because their readers are interested in what's actually happening while the popular discourse is extremely dogmatic and driven by the right. I do not mind, but the economist is an economically liberal news source and Unions(as they are known by the public) are enemies of liberal economics. I hope Unions don't make a comeback.
- pjc50 8y ago
  > but the idea that labor and company are splitting a same pie and that with organized labor you will increase that pie is a veiled labor theory of value. It goes contrary to other concepts like increasing profits , increasing capital investment, increasing wages, Eh? Increasing wages is exactly what we're talking about here. For any given firm, after accounting for external costs there is a quantity of money left over which may be re-invested, given out as wages in some distribution (how much to the CEO?), or returned to investors. Some re-investment may also be in the employees in the form of training or retention perks. Exactly how this is distributed is up for questioning. > Unions(as they are known by the public) are enemies of liberal economics I think the point of the Economist is that this is a political view, and that it needn't be this way: Germany is always cited as a country where it works differently. Having adversarial relations with the union is a choice. A leader can also choose to consult them on mutually beneficial changes in working practice.
  - conanbatt 8y ago
    > A leader can also choose to consult them on mutually beneficial changes in working practice. For sure, I believe people should unionize if they want to, but should be given no special benefits for doing so. Argentina has constitutional level protections for unions, they cant be jailed, etc. They own soccer clubs, and threaten politicians families and cant be incarcerated, while also having highest and increasing poverty and lower employment.
    - s73v3r_ 8y ago
      "For sure, I believe people should unionize if they want to, but should be given no special benefits for doing so." Why is it fair for the company to be given special benefits for incorporating, but not for labor?
      - conanbatt 8y ago
        The equivalent legal protection of a union for a company would be monopoly licenses, and mandatory consumption of services and goods of a specific company. They are not comparable sets of protections. Plus, unions can also incorporate, but the legal protections asked by unions are not of legal organization, but of protection from other workers or coercion to employers.

pault 8y ago

Full employment? What about all the people that have dropped out of the workforce?

fastball 8y ago
They're not counted?
gowld 8y ago
Everyone with a job is employed, therefore the economy is great; what's to complain about?
s73v3r_ 8y ago
There are lots of people who don't participate in the workforce, for various reasons. You have to decide how many of them are doing so because they can't find a job, and how many of them are for other reasons (retired, student, stay at home parent, disabled, etc).

paganel 8y ago

> The plea for unions is so unique coming from The economist. They've slightly changed their discourse in the last couple of years (not sure if it coincides with their change of editor). My guess is that the sort of people that work at newspapers/magazines like the Economist started to realize that the "working classes" (in which I include most of the actual middle-class) need a bigger share of the economic pie, otherwise they (the working classes) will keep voting into power more and more populist leaders, and that's very bad for business. A similar thing happened in the 1870s and especially after the Bolshevik conquest of power in 1917, the capitalists in the West realized that they need to better take care of their workers otherwise they and their families might end up in a common grave, their properties nationalized.

cryoshon 8y ago
yeah, this is my takeaway here as well. their fundamental view is always that stability is preferable to chaos -- and they prioritize that higher than maintaining their economic views. capitalism has become so exaggerated that it threatens stability thanks to its inequality. the economist recognizes that and is trying to do some thought leadership to course-correct.