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> One way to think about it is in terms of economic theory. Negotiations are fairest when both sides have equal power. But you have approximately one job, and a

> One way to think about it is in terms of economic theory. Negotiations are fairest when both sides have equal power. But you have approximately one job, and a company typically has way more employees. It's more painful to lose a job than to have 1 employee quit. So the negotiation is fundamentally unfair. This is not correct. The company competes with all other companies for the same job. Not only that, but companies go bankrupt more often than people do. Businesses are the frail side of the equation, if you make any. > o when it comes time to negotiate your annual raise, it's not you alone dueling with your boss (and the whole corporate hierarchy backing him up). Instead it's you and all your colleagues getting together, sending in some representatives, and saying, "Profits are way up this year, so we all deserve decent raises. Let's talk numbers." Now let me answer with actual economic theory: microeconomics. The fundamental way to make something get a higher price is to increase its utility or to decrease its supply. Unions can increase salaries if they increase productivity (which they dont, in fact they do the exact opposite in the majority of cases, worker health being the best exception to this rule) and decrease supply (not allowing to hire other workers).

UweSchmidt 8y ago
Suggesting businesses are the frail side of the equation is absurd. If you ever talk to anyone stressed out by being unemployed, by applying for jobs, by worrying about leaving a terrible job but staying because of risk and transaction costs, this would be quite obvious. So strong is the business side, that business in many industries can afford to be quite terrible to their workers for a long long time. Regarding your other point, unions can also increase salaries by getting workers a larger piece of the pie. Not sure why you left out this obvious aspect of any negotiation?
- conanbatt 8y ago
  Thats because you are looking at the businesses that survive, not the ones that die off. 8/10 businesses fail in 5~10 year range. The fact that you havent seen people stressed out for their business running into the ground is entirely due to not talking to people that have businesses that can be run into the ground. > Regarding your other point, unions can also increase salaries by getting workers a larger piece of the pie. Not sure why you left out this obvious aspect of any negotiation? Because that is a labor theory of value proposition. The pie does not work that way: the moment a businesses loses its competitive returns due to higher demands, it will stop investing capital unto itself and remain stagnant, while the capital goes to areas where it does not have such restrictions. Companies compete with each other fiercely, and a company that has workers that cant unionize will very much welcome such problems on their competitors!
blub 8y ago
Competition among companies is not so tough, because many employees can't easily move cities or countries to find another job, but companies can (and do) always import workers from all over the world, or outsource projects. When it is tough, companies collude so that they can keep salaries down (see Google & co). Negotiating as part of a group is not about supply and demand, it's about reaching a fair agreement between a specific company and a specific group of workers. Nobody cares about supply and demand on the market, most people would rather have a stable place to work and get decent raises if the company is doing well, instead of all the profits going to the management and shareholders.
- conanbatt 8y ago
  I'll have to ask for a more objective criteria to say competition is not tough. Businsses are very hard to bring about to profitability and sustainability. And they are vulnerable to market wages and capital returns just like any worker. I agree that there is a different flexibility of labor and capital, but unions do not make labor and capital more flexible or inflexible. If anything, it makes labor inflexible and affects capital in the short term. > Negotiating as part of a group is not about supply and demand, it's about reaching a fair agreement between a specific company and a specific group of workers. Nobody cares about supply and demand on the market, most people would rather have a stable place to work and get decent raises if the company is doing well, instead of all the profits going to the management and shareholders. That sounds all good and well, but the union's interests are not its worker's interest. Its another organization that can feed of workers. Unless they make the pie bigger, they eat a generous slice, and if the company goes bust they will not eat at all. Unions have strong incentives to work in tandem with the company than with the worker.
  - blub 8y ago
    Start-ups are very hard to bring to profitability and sustainability. An existing business, once off the ground can usually live for a long time unless the management team really screws up or their market gets disrupted. Even in these cases they can drastically reduce their costs by firing personnel and limp along to better times. There are also huge conglomerates which gobble up smaller brands, e.g. Kraft Heinz, Time Warner, Alphabet, 3M, etc. They couldn't give a fuck about fragility. Established businesses are in no way fragile. It's so ridiculous having to read this type of defensive argument. Employees are a bunch of peons for the big corps, but they shouldn't try to organise because it will be somehow worse for them, right. Any type of group dynamic will not perfectly represent the interests of the group, and yet there are very successful unions out there even in the US, where capital had an long and bloody history trying to suppress them.
lovich 8y ago
>Businesses are the frail side of the equation, if you make any If this were true, real salaries would have increased as the GDP increased. Instead they've been stagnant for over 30 years. You're argument is incredible and would need some sort of evidence to back it up against what is being observed in real life
- conanbatt 8y ago
  Salaries and Profits do account for GDP, but that doesnt meant that all salaries and all profits are divided equally. There is concentration on both sides of that equation. Small businesses do not have the profits and margins big companies have.
  - lovich 8y ago
    You weren't specifying small businesses and even then I'd say you have to get super small, <20 employees for that effect to start making them equivalent. I will concede that if every business was a small business, then unions likely would be unnecessary as the negotiating power is more equal
    - conanbatt 8y ago
      I didnt, i mean all business which includes small business. Unions are a super-business organization, they affect both big and small business, and unions dont represent all workers. If all workers were unionized, there would also be little point for unions.
wpietri 8y ago
You're conflating two different things. It's obvious in the case of a monopsony, like a company town. Employees can raise productivity all they want, but they will not see a bigger paycheck, because if employees don't have negotiating power, the employer will capture all the cash from that. Your "pity the poor companies bit" is just bizarre to me. It's true that companies compete for workers, which is why employees have any negotiating power at all. But it doesn't change the fact that employers still have more negotiating power because of relative size. The same is true when companies negotiate with one another: Walmart, for example, is famous for jerking suppliers around because of the relative need.

UweSchmidt 8y ago

Suggesting businesses are the frail side of the equation is absurd. If you ever talk to anyone stressed out by being unemployed, by applying for jobs, by worrying about leaving a terrible job but staying because of risk and transaction costs, this would be quite obvious. So strong is the business side, that business in many industries can afford to be quite terrible to their workers for a long long time. Regarding your other point, unions can also increase salaries by getting workers a larger piece of the pie. Not sure why you left out this obvious aspect of any negotiation?

conanbatt 8y ago
Thats because you are looking at the businesses that survive, not the ones that die off. 8/10 businesses fail in 5~10 year range. The fact that you havent seen people stressed out for their business running into the ground is entirely due to not talking to people that have businesses that can be run into the ground. > Regarding your other point, unions can also increase salaries by getting workers a larger piece of the pie. Not sure why you left out this obvious aspect of any negotiation? Because that is a labor theory of value proposition. The pie does not work that way: the moment a businesses loses its competitive returns due to higher demands, it will stop investing capital unto itself and remain stagnant, while the capital goes to areas where it does not have such restrictions. Companies compete with each other fiercely, and a company that has workers that cant unionize will very much welcome such problems on their competitors!

blub 8y ago

Competition among companies is not so tough, because many employees can't easily move cities or countries to find another job, but companies can (and do) always import workers from all over the world, or outsource projects. When it is tough, companies collude so that they can keep salaries down (see Google & co). Negotiating as part of a group is not about supply and demand, it's about reaching a fair agreement between a specific company and a specific group of workers. Nobody cares about supply and demand on the market, most people would rather have a stable place to work and get decent raises if the company is doing well, instead of all the profits going to the management and shareholders.

conanbatt 8y ago
I'll have to ask for a more objective criteria to say competition is not tough. Businsses are very hard to bring about to profitability and sustainability. And they are vulnerable to market wages and capital returns just like any worker. I agree that there is a different flexibility of labor and capital, but unions do not make labor and capital more flexible or inflexible. If anything, it makes labor inflexible and affects capital in the short term. > Negotiating as part of a group is not about supply and demand, it's about reaching a fair agreement between a specific company and a specific group of workers. Nobody cares about supply and demand on the market, most people would rather have a stable place to work and get decent raises if the company is doing well, instead of all the profits going to the management and shareholders. That sounds all good and well, but the union's interests are not its worker's interest. Its another organization that can feed of workers. Unless they make the pie bigger, they eat a generous slice, and if the company goes bust they will not eat at all. Unions have strong incentives to work in tandem with the company than with the worker.
- blub 8y ago
  Start-ups are very hard to bring to profitability and sustainability. An existing business, once off the ground can usually live for a long time unless the management team really screws up or their market gets disrupted. Even in these cases they can drastically reduce their costs by firing personnel and limp along to better times. There are also huge conglomerates which gobble up smaller brands, e.g. Kraft Heinz, Time Warner, Alphabet, 3M, etc. They couldn't give a fuck about fragility. Established businesses are in no way fragile. It's so ridiculous having to read this type of defensive argument. Employees are a bunch of peons for the big corps, but they shouldn't try to organise because it will be somehow worse for them, right. Any type of group dynamic will not perfectly represent the interests of the group, and yet there are very successful unions out there even in the US, where capital had an long and bloody history trying to suppress them.

lovich 8y ago

>Businesses are the frail side of the equation, if you make any If this were true, real salaries would have increased as the GDP increased. Instead they've been stagnant for over 30 years. You're argument is incredible and would need some sort of evidence to back it up against what is being observed in real life

conanbatt 8y ago
Salaries and Profits do account for GDP, but that doesnt meant that all salaries and all profits are divided equally. There is concentration on both sides of that equation. Small businesses do not have the profits and margins big companies have.
- lovich 8y ago
  You weren't specifying small businesses and even then I'd say you have to get super small, <20 employees for that effect to start making them equivalent. I will concede that if every business was a small business, then unions likely would be unnecessary as the negotiating power is more equal
  - conanbatt 8y ago
    I didnt, i mean all business which includes small business. Unions are a super-business organization, they affect both big and small business, and unions dont represent all workers. If all workers were unionized, there would also be little point for unions.

wpietri 8y ago

You're conflating two different things. It's obvious in the case of a monopsony, like a company town. Employees can raise productivity all they want, but they will not see a bigger paycheck, because if employees don't have negotiating power, the employer will capture all the cash from that. Your "pity the poor companies bit" is just bizarre to me. It's true that companies compete for workers, which is why employees have any negotiating power at all. But it doesn't change the fact that employers still have more negotiating power because of relative size. The same is true when companies negotiate with one another: Walmart, for example, is famous for jerking suppliers around because of the relative need.