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>>High schoolers who get rotated out every six month won't exactly be the best at negotiating or even think of unionization efforts. Artificially raising pay a

>>High schoolers who get rotated out every six month won't exactly be the best at negotiating or even think of unionization efforts. Artificially raising pay above market rates leads to higher consumer prices, and massive deadweight loss from greater unrealized production/earnings. Between 1870 and 1900, when there was no minimum wage, or labor regulations to empower unions, US wages doubled in inflation-adjusted terms, while US industry expanded and became financially healthier. This was very much unlike the post-war period, where US industry was running on borrowed time, making increasingly burdensome concessions to unions that led to huge bankruptcies and retrenchment in the 1970s in many industries.

vharuck 5y ago
A better explanation of the growth from 1870 to 1900 is the Second Industrial Revolution[1]. This was a short period of massive changes to logistics (better railways), society (electric lights improved factory productivity), and what was even possible to make (improved materials and precision machining). Labor only comes into the story because less labor was needed to make things. Wages went up because productivity shot up. I would be more convinced if you showed two similar nations who had very different outcomes during the 1870s to 1900s because of wages. [1] https://en.wikipedia.org/wiki/Second_Industrial_Revolution https://en.wikipedia.org/wiki/Second_Industrial_Revolution
- CryptoPunk 5y ago
  >>This was a short period of massive changes to logistics (better railways), society (electric lights improved factory productivity), and what was even possible to make (improved materials and precision machining). There have been just as many opportunities to raise productivity in modern times, with the development of computerized production, internet communication, robotics, rocketry and space-based industries, plastics, the standardized shipping container, nanotechnology, biotechnology, machine learning, distributed blockchains, etc Nations like Hong Kong and Singapore, which maintained comparatively free-market oriented economies, and ranked number 1 and 2 in the Economic Freedom Index for decades, vastly outperformed more social democratic economies. They not only saw vastly greater economic and wage growth, but closed the huge deficit they had with Western nations in life expectancy in 1960, and eventually surpassed them. HK and Singapore today have a higher life expectancy than even the Scandinavian countries, which in 1960 were #1, 2 and 3. Beyond these anecdotes, you can look at basic correlations found in large datasets covering dozens of economies over a span of decades, which suggest lower government spending, as a percentage of GDP, tends to be beneficial to economic performance: https://web.archive.org/web/20170821004405/http://ime.bg/uploads/335309_OptimalSizeOfGovernment.pdf https://web.archive.org/web/20170821004405/http://ime.bg/upl...
  - blix 5y ago
    The changes in productivity due to computers, robotics etc. are probably closer in economic impact to the first industrial revolution than the second. The second industrial revolution increased demand for labor, raising wages. The first vastly decreased demand for labor, leading to falling wages, increasing inequality and social unrest.
    - CryptoPunk 5y ago
      All productivity enhancing technology, whether those that emerged in the first industrial revolution, second industrial revolution or information technology revolution, reduce the amount of labor required to do a task, and thereby increase how much the population as a whole produces, leading to wages increasing. The decline in wage growth since the 1970s does not appear to be due to any special properties of more recent technological innovations, given countries like Hong Kong and Singapore, which were more restrained in their growth of labor regulations and taxation, saw massive wage growth into the 21st century. It appears simply to be due to a huge transition to social democracy: https://ourworldindata.org/grapher/social-spending-oecd-longrun https://ourworldindata.org/grapher/social-spending-oecd-long... Which has resulted in a larger portion of economic output being directed by coercive non-market forces, which are less efficient than the consumer-directed allocation of resources caused by market forces.
      - blix 5y ago
        It took over a century for the median wage in Great Britain to return to pre-industrial levels after the first industrial revolution. > reduce the amount of labor required to do a task... leading to wages increasing. I'm not aware of this "reduced demand leads to increased prices" economic theory. Can you tell me where I can read more about it? Great Britian increased it's total output while wages fell dramatically. I'm not sure your point is supported by evidence here. How appicable are the stories of Hong Kong and Singapore to countries that aren't single cities that occupy unique geopolitical positions? Hong Kong is no longer a country. Surely this is a property of unique relationship with China. Surely many other characterisitics of Hong Kong are related to it's relationship with China.
chmod775 5y ago
This argument that unions somehow "artificially" increase prices doesn't hold water for a second under scrutiny. In a free market you can see unions as an actor who sells labor. They're not opposed to a free market at all - they merely even the playing field at the negotiating table and generally make the process smoother. You only have a problem when unions achieve a monopoly position and abuse it - same as with any other kind of actor in a free market.
- CryptoPunk 5y ago
  >>they merely even the playing field at the negotiating table and generally make the process smoother. The negotiating table is completely even in a free market, i.e. a society where contract liberty is intact. For example, it's irrelevant to my negotiation with Apple that Apple is worth $2.4 trillion. It can't force me to buy Apple products. Once the free-market ruleset is undermined, then Apple can, through taxing authorities and regulatory gatekeepers and the armed government agents that enforce their taxes and restrictions, force me to buy its products. The free market ruleset protects our most basic rights, and is the most important institution for protecting the weak from the strong. That you believe otherwise is a deliberate outcome by those who want to abolish those safeguards. Labor unions are one such organization that wants you to believe otherwise. The wage gains they get their members is not a result of them "even[ing] the playing field at the negotiating table". It's a result of the government MANDATING, on their behalf, that the employer collectively bargain with them, i.e. prohibiting the employer from negotiating with any party other than the union. This blatantly violates the free market principle of all parties having contract liberty, and allows the union to blackmail the employer into paying above market wages via the threat of striking.
  - chmod775 5y ago
    > > It's a result of the government MANDATING, on their behalf, that the employer collectively bargain with them, i.e. prohibiting the employer from negotiating with any party other than the union. You can have unions without the government mandating anything. This is a total straw man. Here's an example: I know I'm worth considerably more to my employer than they're paying me, but were I to ask for appropriate compensation they'd rather let me go than pay up - because it would set a bad precedent. Any other employer I could turn to would do the same. So I can't demand that compensation because unlike corporations I need to eat. And you're going to tell me this kind of situation isn't an asymmetrical power dynamic? The corporation can chalk it up as a strategic loss and survive, I can't. The "war chests" here are so disproportionally unbalanced it isn't even funny. It would be a different picture if most people they could replace me with (if they even find anyone) would negotiate 'properly'. But people don't - it doesn't make sense for any individual. Hence, unions. Also you bringing up the situation of unions in the US is nice and all, but this article is about Germany. You might want to research the situation there and reevaluate.
engineeringwoke 5y ago
> This was very much unlike the post-war period, where US industry was running on borrowed time, making increasingly burdensome concessions to unions that led to huge bankruptcies and retrenchment in the 1970s in many industries. You mean the adjustment from the post-war period of 1945-1975? Just like the one you referenced from 1870-1900? The post-war boom in wages here, that you can see many times in history, occurs due to demographics. You are essentially arguing to the contrary of your point, that large-scale wage increases for average people translate to better outcomes for all. Higher velocity of money, more innovation. You do realize that society as a whole is a large union, correct? And if suddenly there are far less people for work, then it has the same effect as a group holding out for higher wages? That is functionally what a strike is; it's as if a large portion of the young population is all striking at once (they're in fact dead). > massive deadweight loss from greater unrealized production/earnings And what does this deadweight loss thing mean exactly... coming from someone who studied economics? This is completely made up, more casual libertarian groupthink from people who got rich and conveniently stop believing in society. Can we stay grounded on this board please?
- CryptoPunk 5y ago
  >>You mean the adjustment from the post-war period of 1945-1975? Just like the one you referenced from 1870-1900? I just explained that the 1945-1975 period was not the same as the 1870-1900 period. The latter was associated with massive gains in the market position of US industry. The former was associated with the degradation of the market position of major US industrial firms, making those wage gains unsustainable. >>The post-war boom in wages here, that you can see many times in history, occurs due to demographics. Why would demographics cause the post-war boom? I see you reference death ("they're in fact dead"), which I take to mean you are implying that WW2 caused a large enough decline in the working age population so as to explain the large post-war wage gains, but 420,000 military deaths out of a total US population of 139 million in 1945, cannot explain the magnitude of wage growth in the post-war period. >>And what does this deadweight loss thing mean exactly... coming from someone who studied economics? This is the Wikipedia page defining the term if you're unfamiliar with it: https://en.wikipedia.org/wiki/Deadweight_loss https://en.wikipedia.org/wiki/Deadweight_loss It's a basic economics term, and has nothing to do with "casual libertarian groupthink". Maybe you should assume good faith and debate on the merits of the arguments, instead of caricaturing me as a member of some group of libertarians "who got rich and conveniently stop believing in society". These kinds of comments are NOT grounded.

vharuck 5y ago

A better explanation of the growth from 1870 to 1900 is the Second Industrial Revolution[1]. This was a short period of massive changes to logistics (better railways), society (electric lights improved factory productivity), and what was even possible to make (improved materials and precision machining). Labor only comes into the story because less labor was needed to make things. Wages went up because productivity shot up. I would be more convinced if you showed two similar nations who had very different outcomes during the 1870s to 1900s because of wages. [1] https://en.wikipedia.org/wiki/Second_Industrial_Revolution https://en.wikipedia.org/wiki/Second_Industrial_Revolution

CryptoPunk 5y ago
>>This was a short period of massive changes to logistics (better railways), society (electric lights improved factory productivity), and what was even possible to make (improved materials and precision machining). There have been just as many opportunities to raise productivity in modern times, with the development of computerized production, internet communication, robotics, rocketry and space-based industries, plastics, the standardized shipping container, nanotechnology, biotechnology, machine learning, distributed blockchains, etc Nations like Hong Kong and Singapore, which maintained comparatively free-market oriented economies, and ranked number 1 and 2 in the Economic Freedom Index for decades, vastly outperformed more social democratic economies. They not only saw vastly greater economic and wage growth, but closed the huge deficit they had with Western nations in life expectancy in 1960, and eventually surpassed them. HK and Singapore today have a higher life expectancy than even the Scandinavian countries, which in 1960 were #1, 2 and 3. Beyond these anecdotes, you can look at basic correlations found in large datasets covering dozens of economies over a span of decades, which suggest lower government spending, as a percentage of GDP, tends to be beneficial to economic performance: https://web.archive.org/web/20170821004405/http://ime.bg/uploads/335309_OptimalSizeOfGovernment.pdf https://web.archive.org/web/20170821004405/http://ime.bg/upl...
- blix 5y ago
  The changes in productivity due to computers, robotics etc. are probably closer in economic impact to the first industrial revolution than the second. The second industrial revolution increased demand for labor, raising wages. The first vastly decreased demand for labor, leading to falling wages, increasing inequality and social unrest.
  - CryptoPunk 5y ago
    All productivity enhancing technology, whether those that emerged in the first industrial revolution, second industrial revolution or information technology revolution, reduce the amount of labor required to do a task, and thereby increase how much the population as a whole produces, leading to wages increasing. The decline in wage growth since the 1970s does not appear to be due to any special properties of more recent technological innovations, given countries like Hong Kong and Singapore, which were more restrained in their growth of labor regulations and taxation, saw massive wage growth into the 21st century. It appears simply to be due to a huge transition to social democracy: https://ourworldindata.org/grapher/social-spending-oecd-longrun https://ourworldindata.org/grapher/social-spending-oecd-long... Which has resulted in a larger portion of economic output being directed by coercive non-market forces, which are less efficient than the consumer-directed allocation of resources caused by market forces.
    - blix 5y ago
      It took over a century for the median wage in Great Britain to return to pre-industrial levels after the first industrial revolution. > reduce the amount of labor required to do a task... leading to wages increasing. I'm not aware of this "reduced demand leads to increased prices" economic theory. Can you tell me where I can read more about it? Great Britian increased it's total output while wages fell dramatically. I'm not sure your point is supported by evidence here. How appicable are the stories of Hong Kong and Singapore to countries that aren't single cities that occupy unique geopolitical positions? Hong Kong is no longer a country. Surely this is a property of unique relationship with China. Surely many other characterisitics of Hong Kong are related to it's relationship with China.

chmod775 5y ago

This argument that unions somehow "artificially" increase prices doesn't hold water for a second under scrutiny. In a free market you can see unions as an actor who sells labor. They're not opposed to a free market at all - they merely even the playing field at the negotiating table and generally make the process smoother. You only have a problem when unions achieve a monopoly position and abuse it - same as with any other kind of actor in a free market.

CryptoPunk 5y ago
>>they merely even the playing field at the negotiating table and generally make the process smoother. The negotiating table is completely even in a free market, i.e. a society where contract liberty is intact. For example, it's irrelevant to my negotiation with Apple that Apple is worth $2.4 trillion. It can't force me to buy Apple products. Once the free-market ruleset is undermined, then Apple can, through taxing authorities and regulatory gatekeepers and the armed government agents that enforce their taxes and restrictions, force me to buy its products. The free market ruleset protects our most basic rights, and is the most important institution for protecting the weak from the strong. That you believe otherwise is a deliberate outcome by those who want to abolish those safeguards. Labor unions are one such organization that wants you to believe otherwise. The wage gains they get their members is not a result of them "even[ing] the playing field at the negotiating table". It's a result of the government MANDATING, on their behalf, that the employer collectively bargain with them, i.e. prohibiting the employer from negotiating with any party other than the union. This blatantly violates the free market principle of all parties having contract liberty, and allows the union to blackmail the employer into paying above market wages via the threat of striking.
- chmod775 5y ago
  > > It's a result of the government MANDATING, on their behalf, that the employer collectively bargain with them, i.e. prohibiting the employer from negotiating with any party other than the union. You can have unions without the government mandating anything. This is a total straw man. Here's an example: I know I'm worth considerably more to my employer than they're paying me, but were I to ask for appropriate compensation they'd rather let me go than pay up - because it would set a bad precedent. Any other employer I could turn to would do the same. So I can't demand that compensation because unlike corporations I need to eat. And you're going to tell me this kind of situation isn't an asymmetrical power dynamic? The corporation can chalk it up as a strategic loss and survive, I can't. The "war chests" here are so disproportionally unbalanced it isn't even funny. It would be a different picture if most people they could replace me with (if they even find anyone) would negotiate 'properly'. But people don't - it doesn't make sense for any individual. Hence, unions. Also you bringing up the situation of unions in the US is nice and all, but this article is about Germany. You might want to research the situation there and reevaluate.

engineeringwoke 5y ago

> This was very much unlike the post-war period, where US industry was running on borrowed time, making increasingly burdensome concessions to unions that led to huge bankruptcies and retrenchment in the 1970s in many industries. You mean the adjustment from the post-war period of 1945-1975? Just like the one you referenced from 1870-1900? The post-war boom in wages here, that you can see many times in history, occurs due to demographics. You are essentially arguing to the contrary of your point, that large-scale wage increases for average people translate to better outcomes for all. Higher velocity of money, more innovation. You do realize that society as a whole is a large union, correct? And if suddenly there are far less people for work, then it has the same effect as a group holding out for higher wages? That is functionally what a strike is; it's as if a large portion of the young population is all striking at once (they're in fact dead). > massive deadweight loss from greater unrealized production/earnings And what does this deadweight loss thing mean exactly... coming from someone who studied economics? This is completely made up, more casual libertarian groupthink from people who got rich and conveniently stop believing in society. Can we stay grounded on this board please?

CryptoPunk 5y ago
>>You mean the adjustment from the post-war period of 1945-1975? Just like the one you referenced from 1870-1900? I just explained that the 1945-1975 period was not the same as the 1870-1900 period. The latter was associated with massive gains in the market position of US industry. The former was associated with the degradation of the market position of major US industrial firms, making those wage gains unsustainable. >>The post-war boom in wages here, that you can see many times in history, occurs due to demographics. Why would demographics cause the post-war boom? I see you reference death ("they're in fact dead"), which I take to mean you are implying that WW2 caused a large enough decline in the working age population so as to explain the large post-war wage gains, but 420,000 military deaths out of a total US population of 139 million in 1945, cannot explain the magnitude of wage growth in the post-war period. >>And what does this deadweight loss thing mean exactly... coming from someone who studied economics? This is the Wikipedia page defining the term if you're unfamiliar with it: https://en.wikipedia.org/wiki/Deadweight_loss https://en.wikipedia.org/wiki/Deadweight_loss It's a basic economics term, and has nothing to do with "casual libertarian groupthink". Maybe you should assume good faith and debate on the merits of the arguments, instead of caricaturing me as a member of some group of libertarians "who got rich and conveniently stop believing in society". These kinds of comments are NOT grounded.