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Debatable. Unions can also be seen as there to benefit current union workers only. Milton Friedman is as libertarian as it gets, but he makes a good case about

Debatable. Unions can also be seen as there to benefit current union workers only. Milton Friedman is as libertarian as it gets, but he makes a good case about how unions only serve current employees, and have no incentive to see the business grow and serve & hire more people if it does not lead to higher wages for employees.

hcarvalhoalves 3y ago
> no incentive to see the business grow and serve & hire more people if it does not lead to higher wages for employees The alternative being lower wages for the same work? This argument doesn’t make sense to me, unless he implicitly agrees companies only grow by exploiting workers.
- hnbad 3y ago
  It makes sense if you don't assume any of this has anything to do with the workers benefiting long-term because Friedman doesn't care about that: being able to suppress wages gives a business more room to grow by redirecting surplus to the owners, who can choose to reinvest the money by hiring more workers or buying machines that increase the productivity per worker. Unions on the other hand would use their leverage to redirect some of that surplus back to workers by increasing wages, reducing the overall profit. Unions can also use their leverage to mandate a better and safer working environment and reduce workloads, which reduces the short-term productivity whereas a business owner could otherwise weigh the benefits of these measures reducing churn (i.e. people being too exhausted/injured/maimed/burnt out to continue doing their job and having to be replaced) against the overall increase in productivity. "Growth" means increasing profits. Profit means surplus from income that is not paid out to workers (wages, bonuses, etc) or spent on sustaining the business itself (operating costs, rentals, service contracts, etc). Payroll can easily be one of the biggest cost factors and productivity one of the biggest factors to income, so being able to squeeze both of these liberally makes it much easier to grow a company. This is completely tangential to the interests of the workers.
hnbad 3y ago
I don't know how Milton Friedman being extremely libertarian is a reason his criticism of unions should be taken more seriously. Libertarians (in the modern political sense, i.e. right libertarians) are generally anti-union because they want free enterprise and unions interfere with the freedom of business/capital owners. But you're right to an extent: unions are a stop gap. The better option would be collectivization, turning the business into a cooperative so all workers have a stake in the success of the company and unlike shareholders have a strong interest in its sustainability, which may in some cases involve lowering wages (to weather a loss of income during a market downturn or to allow more room for investments, not to increase profits in quarterly reports).
thunky 3y ago
Not only that, it's also possible for current employees to get the short end of the stick after union negotiations, possibly leading to the end of their job after many years of employment.
mc32 3y ago
Sometimes unions will cut their nose to spite their face. In other words their demands may ultimately bring a company down (slowed innovation, resistance to change) but their directives are more immediate -higher wages, less work. These things are desirable for a worker but ultimately may doom the company. It’s not too different from not understanding balanced diets. Sure, some things taste better, are easier to prepare, but they may not be the best choice for long term health. Unions in some other countries are less antagonistic )zero-sum)and more symbiotic (grow the pie).
gadders 3y ago
Probably not a term we should use anymore: https://en.wikipedia.org/wiki/Spanish_practices https://en.wikipedia.org/wiki/Spanish_practices but often the result of negotiations with unions.

hcarvalhoalves 3y ago

> no incentive to see the business grow and serve & hire more people if it does not lead to higher wages for employees The alternative being lower wages for the same work? This argument doesn’t make sense to me, unless he implicitly agrees companies only grow by exploiting workers.

hnbad 3y ago
It makes sense if you don't assume any of this has anything to do with the workers benefiting long-term because Friedman doesn't care about that: being able to suppress wages gives a business more room to grow by redirecting surplus to the owners, who can choose to reinvest the money by hiring more workers or buying machines that increase the productivity per worker. Unions on the other hand would use their leverage to redirect some of that surplus back to workers by increasing wages, reducing the overall profit. Unions can also use their leverage to mandate a better and safer working environment and reduce workloads, which reduces the short-term productivity whereas a business owner could otherwise weigh the benefits of these measures reducing churn (i.e. people being too exhausted/injured/maimed/burnt out to continue doing their job and having to be replaced) against the overall increase in productivity. "Growth" means increasing profits. Profit means surplus from income that is not paid out to workers (wages, bonuses, etc) or spent on sustaining the business itself (operating costs, rentals, service contracts, etc). Payroll can easily be one of the biggest cost factors and productivity one of the biggest factors to income, so being able to squeeze both of these liberally makes it much easier to grow a company. This is completely tangential to the interests of the workers.

hnbad 3y ago

I don't know how Milton Friedman being extremely libertarian is a reason his criticism of unions should be taken more seriously. Libertarians (in the modern political sense, i.e. right libertarians) are generally anti-union because they want free enterprise and unions interfere with the freedom of business/capital owners. But you're right to an extent: unions are a stop gap. The better option would be collectivization, turning the business into a cooperative so all workers have a stake in the success of the company and unlike shareholders have a strong interest in its sustainability, which may in some cases involve lowering wages (to weather a loss of income during a market downturn or to allow more room for investments, not to increase profits in quarterly reports).

thunky 3y ago

Not only that, it's also possible for current employees to get the short end of the stick after union negotiations, possibly leading to the end of their job after many years of employment.

mc32 3y ago

Sometimes unions will cut their nose to spite their face. In other words their demands may ultimately bring a company down (slowed innovation, resistance to change) but their directives are more immediate -higher wages, less work. These things are desirable for a worker but ultimately may doom the company. It’s not too different from not understanding balanced diets. Sure, some things taste better, are easier to prepare, but they may not be the best choice for long term health. Unions in some other countries are less antagonistic )zero-sum)and more symbiotic (grow the pie).

gadders 3y ago

Probably not a term we should use anymore: https://en.wikipedia.org/wiki/Spanish_practices https://en.wikipedia.org/wiki/Spanish_practices but often the result of negotiations with unions.