Re: The Week in Blog: Selling Pain (Bill Scher & Kristen Soltis)
 

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Re: The Week in Blog: Selling Pain (Bill Scher & Kristen Soltis)
 

Five star comment!

Re: The Week in Blog: Selling Pain (Bill Scher & Kristen Soltis)
 

I guess you're not familiar with that history either. Try reading up on the role of unions in Apartheid South Africa, or the way they were used to protect "white" jobs in this country. Here's a link:

http://www.law.gmu.edu/assets/files/...pers/00-40.pdf

Re: The Week in Blog: Selling Pain (Bill Scher & Kristen Soltis)
 

You're flailing; losing the argument by default. The question under discussion is about whether unions have been a net good for workers in this country. The answer is unambiguous, even if the history is not.

Re: The Week in Blog: Selling Pain (Bill Scher & Kristen Soltis)
 

Your ability to miss the point is nothing short of astounding.

Re: The Week in Blog: Selling Pain (Bill Scher & Kristen Soltis)
 

That's not an argument regarding the effect of unions across the board. It was an example as to why a particular employee might not have as high a salary due to the particular union he is in as he would if he weren't subject to a collectively bargained-for contract, which isn't in dispute, but is a separate issue. It's certainly true that certain employees will may make less because they are in a union and choose to stay in their unionized job, even if overall compensation is higher than it would be in the absence of that union (and even if the person's compensation is higher than it would be if the union or unions in general did not exist).

Also, with unions, employers compete for the best workers, so the compensation offered by unionized jobs affects what non-unionized jobs that are filled by people with similar experience/education will offer and vice versa.

There's no reason to assume wages would plummet to zero (which was your example) without unions. That they don't does not address the question of whether they have an upward effect on compensation. Employees have some bargaining power even without unions, just less (and how much less depends on the job, since obviously many sorts of employees have lots of bargaining power without unions).

Re: The Week in Blog: Selling Pain (Bill Scher & Kristen Soltis)
 

Second!

Re: The Week in Blog: Selling Pain (Bill Scher & Kristen Soltis)
 

The bolded statement is a completely subjective concept, which you obviously want to be determined only by the employers. This is a "perfect world" solution, in which the employers are all knowing, all seeing, and serve nothing but the company's best interest, while balancing this with fair and humane treatment of those they would, in your world, have absolute power over. If an employee wants a better situation, you argue, they have bargaining power in that they can move to another entity that will have the exact same power over them.
Your point is nullified by the fact that we don't live in your imaginary perfect world, and history is rich with proof that we never did. But even in your scenario, competing for powerless employees creates a downward wage spiral. Because if you want to pay less for people you just fire as many as it takes to intimidate the others. Here in the real world, it's already happening. Wages have literally already gone to zero for 9.0% of Americans, And I gotta wonder who is getting the profit from this trend:

I sure as shit hope it isn't you.

Re: The Week in Blog: Selling Pain (Bill Scher & Kristen Soltis)
 

i heard this analogy today:

A CEO, a union member, and a tea partier all sit down at a table with 12 cookies. The CEO takes 11 cookies, looks over at the tea partier and says "that union guy wants your cookie!"


The staggering number of conservatives and tea partiers that can't even begin to think about the 11 other cookies and just want to demonize unions is both sad and frightening.

Re: The Week in Blog: Selling Pain (Bill Scher & Kristen Soltis)
 

I don't understand what you're trying to say: what do you mean by "even if the person's compensation is higher than it would be if the union did not exist"? If the compensation is higher then they would want to stay in their unionized job.


It seems you're taking it as a given that union-jobs are better compensated here, which is the whole contention. Also a number I threw around earlier is that only 7% of the work-force is unionized in the private sector, so if indeed there's such an effect it would be quite small.

You don't have to tell me, you have to tell Handle who just repeated this very claim in a post parallel to yours. I was also responding to his claim

What do you mean by "upward effect"? As compared to what? Ultimately people get paid their productivity (in the absence of other distortions).

Why less? Individual employees have less bargaining power if they're unionized: they can't point to their accomplishments and ask for a raise, because they don't individual bargaining power anymore.

Re: The Week in Blog: Selling Pain (Bill Scher & Kristen Soltis)
 

I'm talking about the effect of the union on total compensation. We could find that in certain circumstances the union members with the most bargaining power might be paid less in union jobs than they would be in non-union jobs (and so if they care about compensation first, they may choose to leave for another job). That does not mean that in a world in which that union never existed or had ceased years ago to exist that the top paid person would make more.

Unions give workers more bargaining power, which is one reason to assume that they lead to more compensation. Also, that unions increase compensation (and costs) is a major assumption behind the opposition that they have traditionally faced from employers and the current argument that the budget crisis requires that we get rid of public employee unions. Thus, I think the burden is on you to demonstrate that workers would on average make more in the absence of unions.

Your conclusion does not follow from the facts cited. First, it ignores the historical effect -- it's easier to maintain benefits (including increased compensation) then to achieve them in the first place. It's always harder to take away things once they have been given. Second, it ignores the effect that unions have on non-union jobs. As you said, the existence of higher paying jobs tends to lead to an upward pressure on compensation in other jobs, as otherwise the most marketable employees will go to the higher paying jobs. Third, it ignores the fact that the benefits of a union vary depending on the job -- lots of jobs are such that employees have bargaining power without them. In my job, for example, there are various mechanisms that result in some of the same effects unions have without unions when it comes to pay scales for lower level employees.

Re: The Week in Blog: Selling Pain (Bill Scher & Kristen Soltis)
 

This is just a bizarrely idealistic claim that has no relationship to reality. Even from a perfect world economic POV (which does not exist and would not be a perfect world), people get paid based on the market, and employers won't pay more than they have to.

Re: The Week in Blog: Selling Pain (Bill Scher & Kristen Soltis)
 

Read my comment again. Read the paragraph where I mentioned you.


See this:

Read (if you haven't) why labor unions were created, what were the conditions that lead to their creation, and what were the market forces and societal changes that made it imperative that workers developed means of exercising collective bargaining power to counteract the absolute power of employers.

Once you understand what was happening before the creation of unions, you will then understand why your above comment seems to ignore historical facts. As I said in my original comment:

In terms of racism, I don't think unions have escaped a social phenomenon which has been part of this country since its origins until today. Fortunately, much less now than before, everywhere.

Other commenters have contributed to the topic quite substantially. I don't have anything else to add.

Re: The Week in Blog: Selling Pain (Bill Scher & Kristen Soltis)
 

I've already explained the mechanism of why workers might be better off without unions. I'll say it again: if they have options and they have valuable skills employers will bid up their salary. What you haven't given me yet is an explanation of why union-jobs should give higher bargaining power to individual workers. You've assumed this in various instances, but why?

I'm not sure what conclusion you're referring to.


This is a good point, I'll have to think about that.

The original claim (by Zeko if I recall) was that unionized jobs are paid less overall, though. So it's not clear in which direction this effect might be working.


Agreed.

Re: The Week in Blog: Selling Pain (Bill Scher & Kristen Soltis)
 

You're saying the same thing. Wages are set by marginal productivity, it's just econ 101.

Re: The Week in Blog: Selling Pain (Bill Scher & Kristen Soltis)
 

But that's just one version of history. Just because an institution was created for a reason, doesn't mean that it achieved what it set out to do, or that it continues to do so. The fact that things have gotten better could have a myriad of other causes. Unionization is one possibility. But there are many other. Here I'll give just a few: technological progress, political competition that weakened established and traditional legal monopolies of various sort, free trade (the expansion of markets), etc....

Re: The Week in Blog: Selling Pain (Bill Scher & Kristen Soltis)
 

Can't wait til you reach the 200 level. Wages are also set by socio-economic environments. That's why they are lower in Taipei. Especially since our import tariffs appear to have been set by econ 101 students.

Re: The Week in Blog: Selling Pain (Bill Scher & Kristen Soltis)
 

Labor and trade unions started well before the twentieth century. You have to go to the roots. Labor conditions were very different from what they are today.

Re: The Week in Blog: Selling Pain (Bill Scher & Kristen Soltis)
 

There's much more wisdom in econ 101 than econ 200.

BTW you're also saying the same thing: "socio-economic environments" do affect productivity.

Re: The Week in Blog: Selling Pain (Bill Scher & Kristen Soltis)
 

I'm thinking of the ones that arose with the industrial revolution.

Re: The Week in Blog: Selling Pain (Bill Scher & Kristen Soltis)
 

(*scratching record noise*)

This seems as good a place as any to insert this thing that I just happened across:

Not that it'll persuade our associate from the Von Mises Junior League, Special Zealot Section, but some of the rest of you may enjoy reading it.

Re: The Week in Blog: Selling Pain (Bill Scher & Kristen Soltis)
 

No, while you can't see to see the difference, what you've explained is why an individual worker might be able to get a higher salary if he or she is not in a union. That's not the same thing.

This is entirely dependent on the bargaining power of workers with comparable skills as a whole. It's not something that magically happens because of the skills that a particular worker has to offer independent of all the rest. It's entirely possible, if the workers are in a market in which they lack bargaining power that super skilled and hardworking workers will nonetheless have very little ability to bargain for a higher salary.

Given the paucity of unions, as you have pointed out, it also is not likely (even if it otherwise were, which the very nature of the conversation and participants on both sides demonstrates it is not) that unions restrict the benefits of any individual, since if an individual has the type of bargaining power you are talking about and is in a union job that prevents him or her from taking advantage of it, there's the ability to leave. The loss of employees is likely to have some effect (though a more limited one in the public sector than in the private sector) on salaries offered.

I think it was that public sector jobs are paid less than private sector, despite the unions (although I'll have to check). That's hardly surprising. Plus, if getting rid of unions were (counterintuitively and contrary to the assumptions of basically everyone) to increase public sector salaries, why would there be some necessity to deal with the issue right now! because of the budget!

Re: The Week in Blog: Selling Pain (Bill Scher & Kristen Soltis)
 

What handle said, but in any case it's not the same thing, even in econ 101. What you initially asserted was that productivity will determine wages, as if that were the only factor and that if we just were hands off workers would be paid what they deserve, based on their *productivity*. That fails to account for the vast majority of what's involved in setting prices.

Re: The Week in Blog: Selling Pain (Bill Scher & Kristen Soltis)
 

Unit can obviously argue for himself but both your "if"s seem to be what is oddly asserted and your point about setting prices certainly does not counter anything concerning productivity and wages. Unfortunately, with government (or we the people?) paying for "whatever", profit is taken out of the picture. Leaving us with just cost. With the monopoly that is government-run, education you also are removing much of the supply and demand factors. I guess what I am trying to say is that very little in Econ 101 or 200 applies to or covers the social programs being discussed.

Re: The Week in Blog: Selling Pain (Bill Scher & Kristen Soltis)
 

I'm surprised there's little discussion around this diavlog on the distinction between public sector and private sector unionization.

Private sector unions hold fat-cat corporations hostage until they share their profits in a reasonable way. That makes perfect sense, especially in an environment where there are competing corporations and all kinds of market forces at work (e.g., unions know that if they demand too much from a sickly company they can destroy jobs).

But what is the reason for having public sector collective bargaining? Is state government a fat-cat profit center that needs to share it's wealth more equitably? Who's really being held hostage in a strike? Isn't it the people who are being held hostage? Is it really a function of government to provide good middle-class jobs to a certain sector of the population? Isn't it essentially illiberal to have strikes that constrain government's ability to allocate it's resources efficiently? Or is the argument that Wisconsinners need to be forced to provide high quality education against their will?

There's a strong argument to be made that there is no justification for public-sector collective bargaining. I don't doubt that union pressure keeps wages elevated. Isn't that the wrong goal when it's the public's money? Can any commenter provide a solid philosophical justification?

Re: The Week in Blog: Selling Pain (Bill Scher & Kristen Soltis)
 

How so, Whatfur?

Re: The Week in Blog: Selling Pain (Bill Scher & Kristen Soltis)
 

If the public sector acts as an employer, then the bargaining power considerations are similar. Indeed, to the extent the public sector is permitted to create near monopolies, the power imbalance may be even greater than with many private sector jobs.

Your argument seems to suggest that rather than bargaining like an ordinary employer, the public employer will decide, based on an analysis of competing public interests, what teachers or firefighters or the like deserve to get paid. But I don't think that's how it does -- or should -- work. Teachers get paid based on market considerations like everyone else, at least to some extent. If that weren't the case it would (according to economic doctrine, anyway) fail to properly allocate choices among professions, as teachers would be paid more (or less, I suppose, if you don't value them) than careers with similar education requirements and skill sets that have compensation set by market forces.

In any event, the idea that unions somehow mess with some idealistic determination of wages just isn't reflective of reality. Public entities, like any employer, will pay what the market requires be paid. Unions don't exist because employers are "fat cats" or in any way the bad guy (although some certainly have been), but because a group of individuals generally have much weaker bargaining power than a large employer (unless the jobs require more unique skills than the ones we are talking about), and thus unions are a way that workers can elect to improve their bargaining power.

Most likely we haven't been discussing the public vs. private element, however, because most of the people strongly behind Walker's efforts just don't like unions and want to get rid of them, private too.

Re: The Week in Blog: Selling Pain (Bill Scher & Kristen Soltis)
 

If my conjecture that collective bargaining actually provides downward pressure on total compensation is correct, then that invalidates your argument against public-sector unions. In fact it would mean that the govt is a "mean" employer and is in a sense "exploiting" its employees. Now the govt has other ways to offer perks to its workforce, namely it can legislate the competition away by granting legal monopolies to the people it employs.

Re: The Week in Blog: Selling Pain (Bill Scher & Kristen Soltis)
 

Yes I guess I'm missing something. What is not the same thing?

Marginal productivity is the key here: your super skills and hard work needs to contribute a notable difference in output in order to be valuable. Of course you could have incredible skills at shoveling with spoons, and you might also have incredible stamina, but you would shovel as much dirt per hour as someone with a back hoe would.


Agreed, I'm just not sure in which direction the effect would go.

Of course. I never make political arguments. I couldn't care less about political agendas (I think we had this discussion before).

Re: The Week in Blog: Selling Pain (Bill Scher & Kristen Soltis)
 

I'm not clear on what you're saying. You say that unions don't "mess with" the way wages are set, because it ultimately correlates with market considerations. Maybe so: I'm not an expert on the matter. But then what is the reason for collective bargaining? To establish more even power balance? To what end?

Or maybe I'm incorrectly reading your post as providing justification for public sector collective bargaining. You didn't explicitly say that. Is it your position that the unions are fine because they don't really make a difference?

Re: The Week in Blog: Selling Pain (Bill Scher & Kristen Soltis)
 

Question 1: is it possible that worker X would make more money without leaving his current job if he and his employer were not contrained by union rules. This is your example.

Question 2: if we say yes to Question 1, can we assume that in the absence of that union worker X would make more money? This is what doesn't follow.

Question 3: if we say yes to Question 1, can we assume that workers, on average, would make more in the absence of unions. This also does not follow.

Sure, but that says nothing about the other factors that are relevant (i.e., employers aren't going to pay more because you are valuable to them, they are going to pay as much as they need to keep you -- relative to others they could hire and what other employers will pay -- if your marginal productivity is worth that extra amount). It's obviously quite possible that you could contribute a notable difference from the employer's perspective without the employer needing to pay more. It's also true that in many cases there aren't such easily identifiable effects, many unionized jobs (and public sector jobs) being obvious examples.

I think that when your speculations require you to assume that everyone on the various sides of the particular argument in question are misunderstanding the side they should be on (including employers who you'd think -- if you believe econ 101 -- would do a better job of analyzing the effect on their costs), then you should question whether your speculations are really grounded in fact. It's certainly possibly that they are, but some better evidence would seem to be called for.

Re: The Week in Blog: Selling Pain (Bill Scher & Kristen Soltis)
 

To give those in the negotiations who tend to have less bargaining power more bargaining power than they would otherwise have.

No, I think they probably do make a difference.

Re: The Week in Blog: Selling Pain (Bill Scher & Kristen Soltis)
 

I didn't read anywhere where Unit wrote what you chose to infer with your "if"s. I admit bouncing through things pretty quickly so feel free to point me to any specifics I may have missed and I will retract.

The concept of wages being set by productivity of workers has nothing to do with the price. The amount of the employee expenses? Sure, but not the concept. I am not, Whatfur.

Re: The Week in Blog: Selling Pain (Bill Scher & Kristen Soltis)
 

Is it really necessary to ask "to what end" would one want to establish a "more even power balance?" I don't understand what ambiguity that's intended to address.

Re: The Week in Blog: Selling Pain (Bill Scher & Kristen Soltis)
 

Your last post alone (including the comma in the sentence quoted above) would have convinced me that you are, were I not already convinced of that.

Thus, reassured I am not, Whatfur.

In any case, I see no point in getting into a debate with you about what Unit meant and whether I understood him properly.

Re: The Week in Blog: Selling Pain (Bill Scher & Kristen Soltis)
 

The ambiguity is between Stephanie's assertion that that the employees need (or desire) the additional power of collective bargaining and Stephanie's other assertion that (I hope I'm not misrepresenting) collective bargaining doesn't significantly affect wages.

Re: The Week in Blog: Selling Pain (Bill Scher & Kristen Soltis)
 

Besides what everyone else has contributed in terms of the functions that public employee unions may serve, I think that public employees are to some degree subject to the change in tides every few years when the political parties in power change. It's not uncommon that jobs may be created or destroyed depending on the specific projects. There may be political pressures to give employment to party favorites, and the like. Unions try to buffer the effects of such changes.

Re: The Week in Blog: Selling Pain (Bill Scher & Kristen Soltis)
 

Ok, I understand what you meant, now. I don't think she agrees with that interpretation of her argument, especially given this.

Re: The Week in Blog: Selling Pain (Bill Scher & Kristen Soltis)
 

OK, glad we cleared that up. Here is the question on the table: Given that public sector employees can force their compensation higher through the action of collective bargaining, why does anyone (outside the union) think this is a good thing?

Re: The Week in Blog: Selling Pain (Bill Scher & Kristen Soltis)
 

"Force" is too strong. They have greater power to affect that quality of their side of a deal, if they can bargain collectively - regardless of with whom they're bargaining, that's a good thing, I think - unless we're going to assume that people working in the public sector have fewer rights than those who don't.