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That's exactly what unions do. They consider what a reasonable salary for their members are, usually in long and meticulous negotiations with the employers. The

That's exactly what unions do. They consider what a reasonable salary for their members are, usually in long and meticulous negotiations with the employers. They are not idiots. They know that if you drive labor prices too high then there are fewer jobs to go around. It's about striking a balance where businesses get to be profitable and expansive, while some of that gets redistributed to workers. The reason that we don't want the government to set minimum wages and benefits is because that's too crude a tool. The best trade-offs, sacrifices and share of spoils varies, and having the unions of different sectors negotiate with the employers (themselves usually organized in unions) is that you can optimize a lot more so that everyone wins.

yxwvut 5y ago
Unions have an incumbency problem in which, yes, they're concerned with the effects of pushing too hard, but only insofar as it affects their existing members. See also: significantly tenure-based pay scales for unskilled labor.
- doikor 5y ago
  The contracts the unions negotiate in the nordics apply to everyone in the sector. So it makes no difference whatsoever for the pay of anyone if they are a union member or not. The main benefits of being part of an union here is stuff like union lawyer being made available to you if you have a dispute with your employer. And obviously more voice in who will represent you in the negotiations between the government, employers and employees.
jollybean 5y ago
This is definitely not true - and a misunderstanding of the power equation. Unions represent their members (sometimes not equally). That's it. They try to extract the most. That's it. They are not looking out for anyone's best interests but their own, they are not setting prices necessarily rationally, they are not acting for the benefit of the community at large. There are 5 'factions' in a companies power dynamic: 1) Owners 2) Executives 3) Labour (i.e. Unions) 4) Customers 5) Suppliers + Arguably 'other financiers' (i.e.lenders) make up a 6th. + There are externalities, like 'the environment' The surpluses will be divided among those parties given wherever the power equilibrium rests. If a company is very weak compared to it's customer (like having Apple as a main customer), it won't make a lot of profit so not a ton of surpluses for the other groups. This is called a 'Monopsony' (i.e. Apple has power over it's supply chain). If a company is very weak compared to it's supply chain (like a small retail store), they're not going to capture much surplus either. If the investors have great leverage because capital is sparse, they get more surplus. If money is everywhere, they have less leverage. Union power is an odd one because it's driven by non-market forces i.e. the regulatory limits of what unions can and cannot do given the local laws. In some regions, they are very powerful with (aka Germany, Denmark) with varying kinds of influence. In the US, the auto-workers Unions are incredibly powerful, so much so that the standards that they establish fold-over into the non-unionized plants. In a sense, the government roughly sets union wages by imparting the degree of power that unions have to strike etc...
- Cederfjard 5y ago
  > They are not looking out for anyone's best interests but their own So you don’t think they care that their members can keep their jobs long-term? Is that not in their interest? To imply that all unions without fail will push for maximum possible compensation in the short-term, at the expense of any other concern, is simplified to such a degree that it no longer matches reality.
  - jollybean 5y ago
    I didn't write those things though. "So you don’t think they care that their members can keep their jobs long-term? Is that not in their interest?" I don't care one way or the other. I'm saying that a Union is an organized body of power that protects it's own self-interest, and nobody else's. "To imply that all unions without fail will push for maximum possible compensation in the short-term, at the expense of any other concern, " I didn't write or imply that. I'm wrote that Unions will use their power to maximize the returns above all else. Obviously, if they try to negotiate $200K salaries for their staff, they know they will be out of jobs. However - every single dollar of profit to shareholders, added surplus to buyers/suppliers would be considered 'their money' in this equation, to the extent they can, they'll want to take all of those surpluses - exactly like other participants. Do you think their suppliers will sell for a dime less than they can? Will their customers pay a dollar more than they have to? Will management want to pay more than they have to? A Union is not a benevolent thing, it's just a power centre acting in it's own interest and that's it.
    - Cederfjard 5y ago
      > I didn't write or imply that. Well, that’s how I interpreted it, in large part because you flat-out replied ”this is definitely not true” to the person who was making the point I pretty much reiterated in response to you. > A Union is not a benevolent thing, it's just a power centre acting in it's own interest Yes, the interest of its members, which is the whole point.
- imtringued 5y ago
  >They try to extract the most. Yeah so what? The other side does the same thing and runs into the very same issues. If unions go to far they struggle with job retention. If employers go too far they struggle with employee retention. These forces balance closer to the middle than if you only had one of them. Now, you know what's stupid? Letting the government become the union of last resort via the minimum wage. The government doesn't negotiate with anyone. It doesn't know what wages are justified. So it will get it wrong. Either it's too low or it's too high. No feedback from the actual economy. With no clue whether it makes things better, worse or simply does nothing (95% of the time). I'll choose the unions rather than the government.

yxwvut 5y ago

Unions have an incumbency problem in which, yes, they're concerned with the effects of pushing too hard, but only insofar as it affects their existing members. See also: significantly tenure-based pay scales for unskilled labor.

doikor 5y ago
The contracts the unions negotiate in the nordics apply to everyone in the sector. So it makes no difference whatsoever for the pay of anyone if they are a union member or not. The main benefits of being part of an union here is stuff like union lawyer being made available to you if you have a dispute with your employer. And obviously more voice in who will represent you in the negotiations between the government, employers and employees.

jollybean 5y ago

This is definitely not true - and a misunderstanding of the power equation. Unions represent their members (sometimes not equally). That's it. They try to extract the most. That's it. They are not looking out for anyone's best interests but their own, they are not setting prices necessarily rationally, they are not acting for the benefit of the community at large. There are 5 'factions' in a companies power dynamic: 1) Owners 2) Executives 3) Labour (i.e. Unions) 4) Customers 5) Suppliers + Arguably 'other financiers' (i.e.lenders) make up a 6th. + There are externalities, like 'the environment' The surpluses will be divided among those parties given wherever the power equilibrium rests. If a company is very weak compared to it's customer (like having Apple as a main customer), it won't make a lot of profit so not a ton of surpluses for the other groups. This is called a 'Monopsony' (i.e. Apple has power over it's supply chain). If a company is very weak compared to it's supply chain (like a small retail store), they're not going to capture much surplus either. If the investors have great leverage because capital is sparse, they get more surplus. If money is everywhere, they have less leverage. Union power is an odd one because it's driven by non-market forces i.e. the regulatory limits of what unions can and cannot do given the local laws. In some regions, they are very powerful with (aka Germany, Denmark) with varying kinds of influence. In the US, the auto-workers Unions are incredibly powerful, so much so that the standards that they establish fold-over into the non-unionized plants. In a sense, the government roughly sets union wages by imparting the degree of power that unions have to strike etc...

Cederfjard 5y ago
> They are not looking out for anyone's best interests but their own So you don’t think they care that their members can keep their jobs long-term? Is that not in their interest? To imply that all unions without fail will push for maximum possible compensation in the short-term, at the expense of any other concern, is simplified to such a degree that it no longer matches reality.
- jollybean 5y ago
  I didn't write those things though. "So you don’t think they care that their members can keep their jobs long-term? Is that not in their interest?" I don't care one way or the other. I'm saying that a Union is an organized body of power that protects it's own self-interest, and nobody else's. "To imply that all unions without fail will push for maximum possible compensation in the short-term, at the expense of any other concern, " I didn't write or imply that. I'm wrote that Unions will use their power to maximize the returns above all else. Obviously, if they try to negotiate $200K salaries for their staff, they know they will be out of jobs. However - every single dollar of profit to shareholders, added surplus to buyers/suppliers would be considered 'their money' in this equation, to the extent they can, they'll want to take all of those surpluses - exactly like other participants. Do you think their suppliers will sell for a dime less than they can? Will their customers pay a dollar more than they have to? Will management want to pay more than they have to? A Union is not a benevolent thing, it's just a power centre acting in it's own interest and that's it.
  - Cederfjard 5y ago
    > I didn't write or imply that. Well, that’s how I interpreted it, in large part because you flat-out replied ”this is definitely not true” to the person who was making the point I pretty much reiterated in response to you. > A Union is not a benevolent thing, it's just a power centre acting in it's own interest Yes, the interest of its members, which is the whole point.
imtringued 5y ago
>They try to extract the most. Yeah so what? The other side does the same thing and runs into the very same issues. If unions go to far they struggle with job retention. If employers go too far they struggle with employee retention. These forces balance closer to the middle than if you only had one of them. Now, you know what's stupid? Letting the government become the union of last resort via the minimum wage. The government doesn't negotiate with anyone. It doesn't know what wages are justified. So it will get it wrong. Either it's too low or it's too high. No feedback from the actual economy. With no clue whether it makes things better, worse or simply does nothing (95% of the time). I'll choose the unions rather than the government.