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But you don't care about market outcomes, but about your own personal outcome (and I assume the economic theory alluded to wasn't macroeconomic but micro). The

by pron 8y ago

But you don't care about market outcomes, but about your own personal outcome (and I assume the economic theory alluded to wasn't macroeconomic but micro). The market can converge to fair non-union wages, or it can converge to fair union wages, which would be higher. Capitalists claim that unions reduce overall profit and harm the market, but workers shouldn't care about that (i.e. lower stock performance and higher wages are better for workers, at least in practice, given actual wealth distribution).

slavik81 8y ago
You are forgetting about customers. I own no companies and work for one company, but I am a customer of many. A personal cost/benefit analysis like the one you're describing would have to take that into account.
- pron 8y ago
  The way it works is that management involves the union in its decisions, and they reach compromises. After all, it is also in the union's interest that the company stays viable. If all the increase in wages gets is paid for by an increase in prices, and management isn't willing to cut profits, then that's unlikely to be acceptable to the union. The goal is to keep the company performing well, but to even the playing field when negotiating the distribution of profit among management, shareholders and employees. This is called co-determination: https://en.wikipedia.org/wiki/Co-determination https://en.wikipedia.org/wiki/Co-determination
harryh 8y ago
Individuals might prioritize personal outcomes over market outcomes, but societies and governments should prioritize the latter.
- pron 8y ago
  > but societies and governments should prioritize the latter Societies should prioritize according to their values. I don't think that maximizing GDP is a universal value.
  - wpietri 8y ago
    Yeah. The consumer optimum is heavily exploited workers, as that drives labor costs down as much as possible. We're looking for a reasonable balance, so the value created by labor is shared between consumer, producer, and the many other people in the value chain.

by pron 8y ago

slavik81 8y ago

You are forgetting about customers. I own no companies and work for one company, but I am a customer of many. A personal cost/benefit analysis like the one you're describing would have to take that into account.

pron 8y ago
The way it works is that management involves the union in its decisions, and they reach compromises. After all, it is also in the union's interest that the company stays viable. If all the increase in wages gets is paid for by an increase in prices, and management isn't willing to cut profits, then that's unlikely to be acceptable to the union. The goal is to keep the company performing well, but to even the playing field when negotiating the distribution of profit among management, shareholders and employees. This is called co-determination: https://en.wikipedia.org/wiki/Co-determination https://en.wikipedia.org/wiki/Co-determination

harryh 8y ago

Individuals might prioritize personal outcomes over market outcomes, but societies and governments should prioritize the latter.

pron 8y ago
> but societies and governments should prioritize the latter Societies should prioritize according to their values. I don't think that maximizing GDP is a universal value.
- wpietri 8y ago
  Yeah. The consumer optimum is heavily exploited workers, as that drives labor costs down as much as possible. We're looking for a reasonable balance, so the value created by labor is shared between consumer, producer, and the many other people in the value chain.