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"if unions actually rewarded blue collar employees worse, why would the corporate executives be rallying so hard with propaganda against organized labor?!" Bec

"if unions actually rewarded blue collar employees worse, why would the corporate executives be rallying so hard with propaganda against organized labor?!" Because the world isn't a war between workers and employers. It's not a zero-sum game. Businesses create value by turning less-valuable inputs from society (fundamentally, labor) into more-valuable outputs to society (cars, haircuts, etc). It's a positive-sum game. Unions add a lot of friction to this process, causing everybody to be worse off overall. Business leaders care about creating more outputs to society. Unions work against that goal. Some of the best, highest-paying companies aren't unionized, even within a specific industry, unless legally required. Unions succeed by suppressing change, which works well enough in government and stodgy old industries which often amount to arms of the government anyway: education, healthcare, automotive, transportation, etc. Businesses fight against unions because they don't want the light to go out.

MrJohz 3y ago
You've got a couple of statements here that belie assumptions that aren't very accurate. > Business leaders care about creating more outputs to society. This is untrue. The reason markets work at all is arguably that it's untrue. Business leaders care about generating rewards for themselves. Markets are a mechanism that ensure that it is profitable to create more outputs to society. This is a really important concept. Amazon doesn't exist because Jeff Bezos is a selfless individual who cares deeply about making sure every American has free next-day shipping. It exists because Jeff Bezos wants to make money, and the market demonstrates that selling products with free next-day shipping is a desire that other people have, and therefore it will be profitable for him to fulfil that need. Markets are about assigning value to desires, and using that value to ensure that goods and services are traded efficiently and flexibly across the whole market without someone needing to coordinate things from the top. This is (mostly) a good thing - efficient distribution of services across a market is why we like markets and tend to use them a lot across our economy. But we need to be honest about how and why they with, and it's not because business leaders are trying to be selfless to society. On the other hand, > Unions work against that goal. This is also untrue. From a market perspective, unions are a collective bargaining tool used by workers selling their work. In the same way that it's easier for a handful of truck drivers to collect together and form a business, rather than each independently set their own price for their labour, so is it often easier and more efficient for a group of workers to collect together to form a union. But like with any market, while people can haggle over the best price, the item must be sold at some point in order for all parties to get their rewards. If you've got a melon that you want to sell for $100, but no-one will buy it at that price, then all you'll have at the end of the day is a mouldy melon. Similarly, workers in a union want to sell their labour, because if they don't and the business collapses, they're all out of a job. In that regard, a union is a tool used by people selling their labour in the market in order to achieve the best price for them (in this regard, they are just like the business owners from before, where the market uses their personal desires to generate value across the whole market). In fairness, this is a very simple model, and so it doesn't tell the whole story. Markets have failure modes such as monopolies where the simple analysis of market efficiency tends to break down. On the other hand, if a worker cannot sell their labour, then they cannot eat and cannot access housing, which in practice puts a lot more power in the hands of the person buying labour then the person selling it. It's important to remember that the market model is just one tool that we have for managing resources, and in practice most successful countries use a mix of markets and government intervention to provide efficient access to goods and services across the economy while also preventing common failure modes. Rules to protect workers and unions are part of that mix. But, despite its simplicity, the market model still helps explain the interactions between businesses and workers better than the naive approach that says that unions are bad and want businesses to die, and business owners are good and want to freely distribute value to the economy. I hope this comment demonstrates that a bit.
unclebucknasty 3y ago
>Because the world isn't a war between workers and employers. It's not a zero-sum game. >Business leaders care about creating more outputs to society. How do you square these ideas with record profits and record executive compensation, juxtaposed with decades of wage stagnation and the dramatically expanding wealth gap? That gap now has 1% of the population owning over 30.6% of the wealth. In the context of this discussion, it doesn't matter if the game is positive-sum, if the overwhelming rewards from the created value accrue to a tiny percentage.
- orochimaaru 3y ago
  Wasn’t that always the case? There may have been a small post world war 2 blip where the distribution was slightly flatter in the United States. But in the past that may have been worse (as in a few kings and nobles owning most of the wealth). Executive compensation is an issue. And it is regularly brought up when unions are mentioned. But I doubt cutting executive compensation even by 75% would result in the amount of money to satisfy union demands on healthcare, job security and retirement. Your problem is the stock market punishes companies that don’t have cash flow. Union demands ebb that cash flow and no amount of executive compensation reduction will make up for it. Keep in mind I’m specifically talking executives, not founders. Founders own shares in their companies and that cannot be considered compensation.
  - icandoit 3y ago
    No, productivity and wages climbed in lock step until the 70s. After that productivity kept climbing and wages went flat.
    - orochimaaru 3y ago
      Globalization. There’s people on the planet who get paid a lot less to do a lot more. Not necessarily bad for them. But definitely bad for US workers.
      - unclebucknasty 3y ago

MrJohz 3y ago

You've got a couple of statements here that belie assumptions that aren't very accurate. > Business leaders care about creating more outputs to society. This is untrue. The reason markets work at all is arguably that it's untrue. Business leaders care about generating rewards for themselves. Markets are a mechanism that ensure that it is profitable to create more outputs to society. This is a really important concept. Amazon doesn't exist because Jeff Bezos is a selfless individual who cares deeply about making sure every American has free next-day shipping. It exists because Jeff Bezos wants to make money, and the market demonstrates that selling products with free next-day shipping is a desire that other people have, and therefore it will be profitable for him to fulfil that need. Markets are about assigning value to desires, and using that value to ensure that goods and services are traded efficiently and flexibly across the whole market without someone needing to coordinate things from the top. This is (mostly) a good thing - efficient distribution of services across a market is why we like markets and tend to use them a lot across our economy. But we need to be honest about how and why they with, and it's not because business leaders are trying to be selfless to society. On the other hand, > Unions work against that goal. This is also untrue. From a market perspective, unions are a collective bargaining tool used by workers selling their work. In the same way that it's easier for a handful of truck drivers to collect together and form a business, rather than each independently set their own price for their labour, so is it often easier and more efficient for a group of workers to collect together to form a union. But like with any market, while people can haggle over the best price, the item must be sold at some point in order for all parties to get their rewards. If you've got a melon that you want to sell for $100, but no-one will buy it at that price, then all you'll have at the end of the day is a mouldy melon. Similarly, workers in a union want to sell their labour, because if they don't and the business collapses, they're all out of a job. In that regard, a union is a tool used by people selling their labour in the market in order to achieve the best price for them (in this regard, they are just like the business owners from before, where the market uses their personal desires to generate value across the whole market). In fairness, this is a very simple model, and so it doesn't tell the whole story. Markets have failure modes such as monopolies where the simple analysis of market efficiency tends to break down. On the other hand, if a worker cannot sell their labour, then they cannot eat and cannot access housing, which in practice puts a lot more power in the hands of the person buying labour then the person selling it. It's important to remember that the market model is just one tool that we have for managing resources, and in practice most successful countries use a mix of markets and government intervention to provide efficient access to goods and services across the economy while also preventing common failure modes. Rules to protect workers and unions are part of that mix. But, despite its simplicity, the market model still helps explain the interactions between businesses and workers better than the naive approach that says that unions are bad and want businesses to die, and business owners are good and want to freely distribute value to the economy. I hope this comment demonstrates that a bit.

unclebucknasty 3y ago

>Because the world isn't a war between workers and employers. It's not a zero-sum game. >Business leaders care about creating more outputs to society. How do you square these ideas with record profits and record executive compensation, juxtaposed with decades of wage stagnation and the dramatically expanding wealth gap? That gap now has 1% of the population owning over 30.6% of the wealth. In the context of this discussion, it doesn't matter if the game is positive-sum, if the overwhelming rewards from the created value accrue to a tiny percentage.

orochimaaru 3y ago
Wasn’t that always the case? There may have been a small post world war 2 blip where the distribution was slightly flatter in the United States. But in the past that may have been worse (as in a few kings and nobles owning most of the wealth). Executive compensation is an issue. And it is regularly brought up when unions are mentioned. But I doubt cutting executive compensation even by 75% would result in the amount of money to satisfy union demands on healthcare, job security and retirement. Your problem is the stock market punishes companies that don’t have cash flow. Union demands ebb that cash flow and no amount of executive compensation reduction will make up for it. Keep in mind I’m specifically talking executives, not founders. Founders own shares in their companies and that cannot be considered compensation.
- icandoit 3y ago
  No, productivity and wages climbed in lock step until the 70s. After that productivity kept climbing and wages went flat.
  - orochimaaru 3y ago
    Globalization. There’s people on the planet who get paid a lot less to do a lot more. Not necessarily bad for them. But definitely bad for US workers.
    - unclebucknasty 3y ago