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That causal chain only works in perfect competition where prices are convergent with marginal cost. In real market conditions perfect competition doesn't exist

That causal chain only works in perfect competition where prices are convergent with marginal cost. In real market conditions perfect competition doesn't exist just as perfect monopolies are rare. Google and Apple are competing on selling phones, Google and Facebook are competing on selling ads, yet all sit on billions of dollars of cash. I don't see their workers being able to "extract" more from their companies?

AnthonyMouse 6y ago
> That causal chain only works in perfect competition where prices are convergent with marginal cost. In real market conditions perfect competition doesn't exist just as perfect monopolies are rare. Only "close enough" is required, not perfection. Sure, a union could negotiate a 1% raise without destroying most companies, but then they'd eat that amount in union dues and time value of doing paperwork etc. Meanwhile if they demand a 30% raise, that's more than the companies in a lot of industries could absorb. > Google and Apple are competing on selling phones, Google and Facebook are competing on selling ads, yet all sit on billions of dollars of cash. I don't see their workers being able to "extract" more from their companies? Are you not familiar with the level of compensation paid by these employers? They are also hardly exemplars of competitive markets. Think restaurants or farmers.
- acituan 6y ago
  > They are also hardly exemplars of competitive markets. Yet in 2013 they found the necessity in colluding in no-poach wage suppression. > but then they'd eat that amount in union dues and time value of doing paperwork etc Finland has several software engineer unions. They still seem to be rather competitive both nationally and internationally.
  - AnthonyMouse 6y ago
    > Yet in 2013 they found the necessity in colluding in no-poach wage suppression. You find it unusual that companies in less competitive markets would collude? They're the only ones who can, because otherwise there are too many entities to coordinate. Yet another disadvantage of uncompetitive markets. > Finland has several software engineer unions. They still seem to be rather competitive both nationally and internationally. Finland has unions all over. They also have a different culture and different labor regulations. They're also not the first country that comes to mind as a place to hire software engineers.
    - acituan 6y ago
      > You find it unusual that companies in less competitive markets would collude? They're the only ones who can, because otherwise there are too many entities to coordinate. I agree that it was simply easier to coordinate as a function of low number of agents in the game. But I doubt the convenience of it was the motivating factor. > They're also not the first country that comes to mind as a place to hire software engineers. They don’t come to mind for anything, because they are a very small country. Yet they have the ICT giant Nokia (which is not just the phones). Still with high unionization. In fact, after Nokia sold its mobile division to Microsoft, there has been an influx of ICT companies to Finland to capture the newly unemployed talent. I take your point regarding culture and other contextual variables, but there is hardly an macroeconomic reality that makes unions unworkable as you generalized.
      - AnthonyMouse 6y ago
        > I agree that it was simply easier to coordinate as a function of low number of agents in the game. But I doubt the convenience of it was the motivating factor. Well of course the motivation was to suppress wages so they could make more money. All companies have that incentive. Which is why that's illegal independent of unions -- it's an antitrust violation. > I take your point regarding culture and other contextual variables, but there is hardly an macroeconomic reality that makes unions unworkable as you generalized. Let's put it a different way though: Do union software engineers in Finland get paid more or less than non-union software engineers in San Francisco? Because it's possible for a union to make its workers globally competitive by accepting lower wages to offset the cost of dealing with the union, but that's obviously not what we're after, right?

AnthonyMouse 6y ago

> That causal chain only works in perfect competition where prices are convergent with marginal cost. In real market conditions perfect competition doesn't exist just as perfect monopolies are rare. Only "close enough" is required, not perfection. Sure, a union could negotiate a 1% raise without destroying most companies, but then they'd eat that amount in union dues and time value of doing paperwork etc. Meanwhile if they demand a 30% raise, that's more than the companies in a lot of industries could absorb. > Google and Apple are competing on selling phones, Google and Facebook are competing on selling ads, yet all sit on billions of dollars of cash. I don't see their workers being able to "extract" more from their companies? Are you not familiar with the level of compensation paid by these employers? They are also hardly exemplars of competitive markets. Think restaurants or farmers.

acituan 6y ago
> They are also hardly exemplars of competitive markets. Yet in 2013 they found the necessity in colluding in no-poach wage suppression. > but then they'd eat that amount in union dues and time value of doing paperwork etc Finland has several software engineer unions. They still seem to be rather competitive both nationally and internationally.
- AnthonyMouse 6y ago
  > Yet in 2013 they found the necessity in colluding in no-poach wage suppression. You find it unusual that companies in less competitive markets would collude? They're the only ones who can, because otherwise there are too many entities to coordinate. Yet another disadvantage of uncompetitive markets. > Finland has several software engineer unions. They still seem to be rather competitive both nationally and internationally. Finland has unions all over. They also have a different culture and different labor regulations. They're also not the first country that comes to mind as a place to hire software engineers.
  - acituan 6y ago
    > You find it unusual that companies in less competitive markets would collude? They're the only ones who can, because otherwise there are too many entities to coordinate. I agree that it was simply easier to coordinate as a function of low number of agents in the game. But I doubt the convenience of it was the motivating factor. > They're also not the first country that comes to mind as a place to hire software engineers. They don’t come to mind for anything, because they are a very small country. Yet they have the ICT giant Nokia (which is not just the phones). Still with high unionization. In fact, after Nokia sold its mobile division to Microsoft, there has been an influx of ICT companies to Finland to capture the newly unemployed talent. I take your point regarding culture and other contextual variables, but there is hardly an macroeconomic reality that makes unions unworkable as you generalized.
    - AnthonyMouse 6y ago
      > I agree that it was simply easier to coordinate as a function of low number of agents in the game. But I doubt the convenience of it was the motivating factor. Well of course the motivation was to suppress wages so they could make more money. All companies have that incentive. Which is why that's illegal independent of unions -- it's an antitrust violation. > I take your point regarding culture and other contextual variables, but there is hardly an macroeconomic reality that makes unions unworkable as you generalized. Let's put it a different way though: Do union software engineers in Finland get paid more or less than non-union software engineers in San Francisco? Because it's possible for a union to make its workers globally competitive by accepting lower wages to offset the cost of dealing with the union, but that's obviously not what we're after, right?