Democrats’ fetish for unions is increasingly counterproductive.
Unions do not help the neediest workers. Public sector workers are six times as likely to be unionized as their private sector peers (35% vs. 6%). This means a major purpose of unions is squeezing rents out of taxpayers.
Indeed, union workers are relatively privileged. Their average wage is $1263 per week versus $1090 per week for workers generally. The rents unions extract are upward redistribution.
Fighting for union workers very different fighting for the underdog. It means fighting for a relatively privileged group of workers who has organized to claw out more privilege still. There is no reason for a fast food or warehouse worker to feel solidarity for the UAW, they inhabit completely different worlds.
In fact, unions only work when there are rents to extract, so they are great for fleecing county boards of education and sticking it to big three car manufacturers but useless for most small business employees. Focusing on a privileged sliver of workers and calling it class solidarity is bad politics.
Redistribution should occur through the tax code. A reasonable, explicit scheme of redistribution that takes more from the top 5% and gives social guarantees to all could cement a durable center left coalition. Coddling 10% of workers because they belong to unions is divisive.
<<There is no reason for a fast food or warehouse worker to feel solidarity for the UAW, they inhabit completely different worlds.>>
I previously had done some political comms work for the Alabama Democratic Party. And they did this whole campaign about solidarity between striking Starbucks workers and striking miners in Muscle Shoals. Needless to say, it didn't quite work.
I guess I’ll stand up for myself a bit here from the perspective of a public safety worker and union member in good standing. I’m reading some true and fair points, but what one might call “rent seeking” by public sector unionization could also be described as investment in the robust safety net which is the second part of Matt’s equation. In a full employment economy with a tight labor market, collective bargaining is a way to keep wages competitive with other options. I have seen this firsthand, with applicant pools lesser than even a decade ago. Thin ranks leave organizations stressed and hollowed out, while elevating chances of injury and burnout among those still on duty.
Stipulating that unions must adapt to new realities, political and otherwise, I doubt that hollowing them out utterly is in line with the Slow Boring ethos, to say the least.
I see three broad things private sector unions do:
1) Physical job protection (don't make me work in unsafe conditions, don't make me work so much overtime that it hurts my health / makes me work in unsafe conditions due to being tired).
2) Negotiate on wages/benefits (better health care, vacation, sick leave, salary)
3) "Having a job" protection (difficult to fire underperforming, tenure-type work, etc)
===
If there is some large category I left out please let me know.
I'm 100% sympathetic to unions on issue 1. I'm not saying they'll _always_ be right that something is actually unsafe, but it broadly strikes me as a good thing to negotiate on. One problem with union power here may be that they've won so many victories (OSHA, 40-hour work week, overtime pay) etc, in the U.S. that the most important parts of this are already covered, especially for service sector jobs.
For #2 it depends for me way too much on specifics. If the _sector_ is doing well but wages are low at all companies (bad labor market?) then I can see unionization to bargain for wages helping to lift them without really hurting competitiveness, but it would have to be something more like UAW rather than a particular company. At a particular company, if the company is profitable enough, this rebalance the profits to the owners vs the wages to the employees, but it could also start strangling the company, especially if it can't change benefits later in response to changing conditions. The main thing here is I'm less sure how much forced unionization laws are necessary.
#3 is probably the issue where unions suffer the most culturally/politically and seems (to an outsider like me) like the area to give up on the most.
I think the largest category you left out would be what I'd call "work rules". Overtime, division of labor, promotion ladder, rules on contractors, etc...
Thanks. I covered _some_ of overtime under #1 but I agree this should be its own category.
This one I'm overall more neutral on. Overtime seems good to negotiate on, promotion ladder seems neutral. Division of Labor unsure (is that where 'featherbedding' comes in? But also helps you not asked to do BS tasks outside your normal remit).
It’s good to recall the bankruptcy of Hostess, which could get no concessions from its unions. One example is that Hostess had to operate multiple delivery systems because the trucks were permitted to deliver only certain brands, not the full range of Hostess products. I believe that this kind of arrangement negotiated to maximize the number of union workers is common, and destructive.
1. Negotiating the split. How much of the product of my labor goes to me vs. goes to my employer.
2. Collectively agreeing to terms. How much of the compensation package is paid out in cash vs. workplace safety, health insurance, job security, etc.
Negotiating the split is, I think, mostly boring and pointless. Monopsony in labor is a weak force in practice so I think total compensation is usually pretty close to as high as it could be sustainably.
Collective bargaining on the components of the compensation package is potentially much more useful. People like a safe workplace, job security, paid time off, etc. but they’ll trade most of those things away for more cash. When they get the extra cash, a lot of it goes to zero-sum positional spending that doesn’t improve aggregate utility. The union is nice because it encourages more compensation that’s fundamentally not zero-sum, like paid time off or better working conditions, which does improve aggregate utility.
I consider job security in that same category, so I’m more sympathetic to it than you are I think. No idea how the politics of this will work though.
I will admit: that last argument sounds to me like "the union knows what's good for you better than you do". And I will also admit that if that's what it means to say, that sort of attitude really rubs me (and many others) the wrong way. Someone else who does not know the exact details of my situation (e.g. whether I value money more because I need to make child support payments or time more because I have to care for their aging parents) does not in fact know what's good for me better than I do.
Sorry if I was unclear, I was assuming that union leadership would reflect the views and interests of membership, and would function primarily as a coordinating mechanism to resolve a collective action problem.
It’s not “The union knows better than you”, it’s more “We’re all in this together”
I’ll admit it’s tough though, politically. People have some good intuitions about this kind of stuff, but if you try to explain it like an economist you probably sound pretty crazy to most.
“No no, if we let you trade away more time for more money, can’t you see that you’ll all lose much of the windfall bidding against each other for zero-sum positional goods?” -> Patronizing, totalitarian
“Eight hours for work, eight hours for rest, eight hours for what you will.” -> Inspiring! My heart thumps harder just typing it out!
Isn't it weird that the AMA is a reasonably powerful union yet doctors routinely work unsafe hours? I guess the revealed preference is for doctors to take money over job quality, but this also jeopardizes patient safety.
Overtime hours are also sometimes psychologically weird. Some people view them as a "badge of honor" of how hard they worked, despite the research about how bad it is for productivity. "I worked 80 hours saving lives, what did you do"
"1) Physical job protection (don't make me work in unsafe conditions, don't make me work so much overtime that it hurts my health / makes me work in unsafe conditions due to being tired)."
My impression is that most blue-collar unions do the opposite. They restrict hiring and demand generous overtime pay, so that their workers rack up good take home pay but at the cost of working crazy high overtime hours which takes a terrible toll on their health.
One way to think about it is that the bargain for "better working conditions" and that can be allocated in different buckets; better pay, safer jobsite, better hours, better benefits, etc.
But the total amount of surplus to be captured remains constant.
Maybe, but does that require a more consistent exchange rate between them (Consistent across jobs/companies)
Some safety rules are relatively cheap to implement for their benefit, some are prohibitively expensive. E.g. My office had 2? emergency defib machines and a written list of people who had undergone recent training (I was on that list after attending CPR training prior to the birth of my children)). I'm not sure of the cost of the machines but the cost of "put a list up there of people who did this on their own" is a super-cheap intervention. Alternatively "provide this training for all employees" is a much more expensive intervention with probably almost no better outcome.
I'm not sure there's a "total amount of surplus" to be captured that can be moved back and forth. There's definitely a "total amount of cost" that can be spent by the company though.
The cost eats away at the surplus. I think we're getting at the same thing but you're phrasing it better. There is an upper limit to the amount of demands a union can make. At a certain point, they can ask for higher wages OR better workplace safety if the safety measures are costly.
If union workers stuck only do wages and benefits I might be ok with that (at least if they were requiring full funding of benefits with current tax payer dollars at reasonable discount rates and not pushing it on future tax payers).
But instead they spend far too much time making it impossible to hold bad or poor performing employees to account and/or just introducing anti-efficiency rules.
Easy example of this would be police union rules that make it hard to fire bad cops. But the same principles apply to the rest/
It's interesting. There is an old leftist idea that all employees share the same real interest, to increase the power and the income share of workers against employers, or to unite the working class everywhere against the capitalist class everywhere. And yet workers consistently reject it in every country with democratic elections and a truly capitalist economy, and communist revolutions succeed only through civil wars in authoritarian, not fully industrialized states (Russia in the 1910s, China in the 1940s) or through conquest (eastern Europe). And to my understanding, the western postwar social democracies weren't powered by uniting the workers of the world to fight together -- the motives were more like national solidarity within the country, combined with blunting the allure of communism by providing some of the benefits of socialism through milder means.
It would be interesting to understand (1) what's wrong with the theory of class solidarity, and (2) why it nonetheless remans popular on the left.
That question is easy to answer. The working class is not unitary, it contains multitudes with different material interests. Harbor pilots and day laborers are both working class, but they are in different markets and different social strata.
If capitalists successfully coordinate to exploit labor, then workers get systematically underpaid relative to the marginal product of their labor, then you’ve got deadweight loss, so then a coordinated worker movement has space to raise real wages while actually increasing aggregate economic output.
In most places most of the time, capitalists have not in practice been good at doing this kind of coordinated exploitation, especially not in democracies, so workers are mostly paid more or less fairly already. On some level, this filters out into the popular consciousness and blunts the appeal of class politics.
In other words, businesses that “defect” and pay their employees unusually well haven’t already outcompeted and taken over everywhere, this can be seen by just looking around, so maybe reorganizing the entire economy along these lines won’t generate large gains.
Which is another argument for enabling efficient and robust markets. A lot of that probably looks like promoting “free “ markets, but it also looks like antitrust, promotion of entrepreneurship with low barriers and financial incentives, promotion of science to enable technical change, good bankruptcy regimes and good financial engineering environments to enable exploration of differ business models. It might even include things like universal healthcare or similar that make it easier for employees to change employers or start their own. Good workplace safety rules also help prevent race to the bottom competition.
Lots of things can be done to ensure healthy competition and creative destruction. The zero-sum mindset of unionism is what I think holds it back. Would Starbucks employees be better off with a union or better with clearer overtime regulation and state capacity improved at the county labor board?
I don't think Noah Smith has read my comment, but he nonetheless wrote a long-form answer to the related question of "why isn't working-class solidarity a winning strategy for the left in 2020s America?"
One potential problem I see with trying to unionize Starbucks employees is that most of those people intend to only be there for a short period of time. I wouldn't say "give up" if that's what you really want to do, but service sector work is fundamentally different than mid-century factory jobs.
The percentage of unionized Starbucks employees is still pretty small (about 11K out of ~240K in the US) but it has shown impressive growth in just a couple years.
Let's see how it plays out before confirming your view.
Sure, let's see how it plays out. I didnt say it's impossible. I'm just pointing out one reason unionizing service workers is difficult; time horizons.
Yes, Matt's claim that progressives are for "Good schools and Good infrastructure" is a bit hard to square with their positions on (a) extended school closures during covid and (b) management of US ports.
In both cases, supporting unions took precedence. To a truly astonishing degree.
Yeah the particular intransigence of Teacher's unions circa Fall 2021 was eye opening.
I'm actually a defender of Teacher's unions actions in 2020. Before vaccines were available, being very Covid cautious made sense to me. I'm one of the people who believes we should have been more like continental Europe in 2020. And a union at the day is at its core supposed to look for the safety and well being of its members.
But denying that lack of in person instruction had any negative impact on learning was galling (I know it was just one person, but the idea that kids were somehow "learning" by just being part of their community was insulting to my intelligence). It's also like an amazing self own in the sense of "ok if in person instruction doesn't matter than why do teachers matter?"
I think of Unions as more like prosecutors or defenders. They aren't supposed to get at "truth". They are supposed to present facts only as far as they help their client.
And many times they seem to be operating even more like trial attorneys, in as much they are trying to win the current case, without much long-term planning beyond winning the current round.
I'm not a lawyer or union member, so maybe someone can correct this perspective if it's way off.
I think this is right — but on the other hand, having been in a union and then having worked in the same role in a non-union shop, it was night and day how management treated us. So whatever they were doing seemed to work.
Of course, it’s a good thing we have prosecutors and defenders! We do a better job getting at the truth when there’s an advocate on each side than we do when we just have a bunch of impartial people looking around.
Similarly with work conditions - the company has organized representation, and it makes sense for workers to as well. Though in this case there’s also a third and fourth side that need representation too, in terms of consumers, and other stakeholders (like potential bearers of pollution).
"We do a better job getting at the truth when there’s an advocate on each side than we do when we just have a bunch of impartial people looking around."
Is that true? The only point of comparison I'm aware of are the systems of continental Europe, which I understand are more geared towards finding "truth" and less permissive of sophistry or dismissing prosecutions based on misconduct.
It always seemed like that's better to me. In terms of criminal law, it's left us stuck with situations where a large fraction of likely guilty people are let go because of "technicalities" and in response we jack up sentencing to compensate. ie, "we might not be able to make the charges stick (if we mess something up on our end) but if we do, we'll hit you hard!"
I'm not sure where you get this idea that a large fraction of likely guilty people are let go on technicalities. After being charged the rate of guilty pleas is anywhere from 90-98%!
If you're talking about people who are released without any charges, then that's probably because the prosecutors lack enough evidence to secure a conviction were the case to go to trial. The European system would be no better in cases where there are no witnesses to cooperate or physical evidence.
I’m mainly thinking about science here. We make more progress when there are advocates for different scientific theories arguing and doing the experiments they hope will show themself to be right (and re-doing the experiments over and over to get past the problems that make most experiments fail the first time you try), and perhaps more importantly, coming up with the tortured arguments for why the other person’s experiment doesn’t show what they claim it shows. We sometimes talk as though we could have a community of dispassionate truth seekers, but that has never been able to deal well with big open ended questions.
Correct. The U.S. has more lawyers per capita than Europe and it’s not clear what we get for that, other then a safety valve that keeps demi elites like me from playing leftist politics full time.
I agree that caution early on was very reasonable. I have no beef with people closing schools in Spring 2020. Then there is a gray zone where reasonable people can disagree, but by the time vaccines were widely available, it was indefensible to argue that school should remain closed.
(Fwiw, I was in 2020 outraged at the Swedish approach of basically letting the virus quickly rip through the young and the middle-aged population. But it's been humbling to see that three years down the road, their numbers compare very favorably on almost every metric. They had sky high deaths among the elderly early on, but it seems the main thing that happened was that people who were about to die within a couple of years anyway just died sooner. That is a tragedy, but perhaps less of a tragedy than throwing a whole generation of low ses kids under the bus.)
I look forward to the day when we all unanimously agree that for the first part of the COVID plague, it was so new and so daunting that wide swaths of society took action amidst great uncertainty that later turned out to be ineffective, and that we grant some forgiveness for not having 20/20 hindsight at the time.
This does *not* apply to cases where people obviously should have known better and were too blind to do the right thing: public health people supporting George Floyd protests, teacher unions keeping schools closed far too long, right wing media convincing their gullible followers to forego getting vaccinated, etc.
What should have happened is that schools should have promptly reopened no later than the start of May 2020 once we had a grasp on its lack of danger to kids, and some mitigation we could do, and then keep them open through the summer, overwhelmingly taking place outdoors, as a catchup from what was missed in March and April, and also to get ahead of the curve for a potential need to take a societywide hibernation in the late fall and into winter, which we very much needed the instant news of the vaccines being around the corner dropped.
A lot of states opened schools in Fall 2020 and never closed again. It was fine. If Costco is open, schools should be open. Thank goodness for federalism!
Our schools reopened in September 2020, and students' families could choose whether they were in-person or remote. Fewer than half of the families chose in-person. This doesn't necessarily mean that our schools should have offered the remote option, but it is easy to forget how scared people were before the vaccine came out.
And also, many of our schools had to either suddenly go remote on any particular day, or have an entire grade go to the gym and basically do remote lessons on their computers because so many staff members were out sick. In some cases, there was not enough supervision for student safety to be assured, and I know many parents who kept their kids home if they knew it was going to be an "in-school remote" day. I live in a high-poverty urban district. The same safety issues may not have applied in wealthier suburban districts, but parents were definitely considering these issues where I live.
I don't think opening schools in May 2020 would have been the panacea many here think.
Fall 2020 was the right time to open schools, but May 2020 feels like pushing it a bit. Remember, May is very close to the end of the school year, and I don't think it makes logistical sense to open schools for just 1-2 weeks before breaking for the summer.
That lack of pivot is my big beef. My older son's private daycare/preK re opened in June 2020 with precautions. The Catholic schools re-opened in fall with precautions. The public school system was closed and/or in some weird ever evolving state of remote or hybrid for the better part of 2 years. That latter fact was decisive in where we send our kids now. One system cared about the children. One cared about a union that unlike the factory workers of yore is organized against the wider public.
Was it that obvious by May 2020? That was barely at the start of the pandemic!
Maybe my memory is colored here, but I recall vast amounts of uncertainty that early in the pandemic and for some time after. I think you have a better argument for criticizing schools that stayed close the following autumn.
On Sweden, what numbers do you look at? Can you find deaths by age bracket and test scores by SES? I'm just curious because I would like to dig into it myself.
Was there a big impact on learning? Very little it turns out, and basically none for white students, but some noticeable impact on poor minority students who don't have access to as many resources.
Yes, of course, it was bad for those students so affected, but in many cases I recall their parents *wanted* them to stay home.
Bottom line, the school closure debate does not have a clear, indisputable answer.
Right. When the unions came out against requiring their members to be vaccinated (with appropriate exemptions available!) it really showed how little they cared about their members and their students. Big wake up for me to hear them say “let’s not request a minor inconvenience that could save lives and certainly will reduce suffering of our members due to illness.”
My brother is an airline pilot and his stories about union impacts are eye-opening. A couple things stand out to me, notably how unions enforce seniority over meritocracy and how it seems that a lot of entry requirements for airline pilots seem designed to control supply and keep pilot incomes high.
How would a pilot meritocracy work? It’s not like it’s Top Gun and they can fight it out. Would it just be simulator, check ride and written test based?
The same ways people working in basically any job are evaluated: observation and evaluation by supervisors, written tests, practical tests, success/failure rates at tasks, so on.
Yeah, there was a period where their position was that teachers should not be required to get vaccinated but their students should be required to mask at all times to protect the teachers.
If you’re that concerned about being protected against a virus, a vaccine sounds like a much sounder proposition than requiring 7 year olds to do something than many of them find unpleasant or uncomfortable at all times.
And on grading, gifted and talented education, and what we should do about disruptive students. I think Matt will get to this when he discusses that public services need to be run for their users, not their employees or some ideological goal.
Even in this article note the distortionary effects: longshoreman’s (economy threatening) strike against automation, snubbing Tesla when EVs are a major policy goal, and I’d argue jones act and buy American protectionism fits into union support because it creates rents to extract and prevents foreign labor from competing. The later common sense bullet about government existing to provide services not employment also is very in tension with unions.
Here in CA the big one is prevailing wage requirements to receive affordable housing subsidies, or other entitlements for multi-family housing. Basically "we can't make you hire union labor but you do have to pay union rates".
Similar to the EV mandate it's not objectionable on the face of it but it shows where the administration's priorities are. Is affordable housing important? "Yes!" Important enough that non-union workers get jobs? "Well, no." Is electrification of the US auto market important? "Yes!" Important enough to subsidize non-union cars? "No, not that important."
Someone on this blog commented a year or so ago that government policies should be "one goal, one lever." The more I think about it, the more accurate that is.
Want below-market housing? Then just subsidize deed-restricted housing with no other requirements.
I don't think that works. First, something we learned post facto can't be used as a justification ex ante, because how crazy and bad he was wasn't known at the time. Second, to the extent we knew that he was bad and vindictive, that makes the administration's decision worse, not better: when someone is both mercurial and influential you often have to play ball with them! You don't get to say, "what, were we supposed to be NICE to him?!" right after he's shown you why the answer to that question is yes.
I'm of two minds on unions. The first mind has been strengthened in recent years by this site, that includes many of the reasons you state here--very broadly speaking, the ability to rent seek. But I also can't shake the other mind that sees that abuse of workers can still happen, and that collective bargaining can help reduce asymmetric information that's to the disadvantage of workers.
But I'll be curious to see if Matt expounds more on unions in particular in point 8 so we can discuss further there--I sure hope he does!
I'm really of the mind that unions are a vestige of an era when there were real asymmetries of mobility/knowledge and governmental didn't have much regulatory strength.
Unions make a ton of sense in company towns full of people with 4th grade educations.
Unions make a ton of sense in uninspected mines or unregulated iron foundries.
Unions don't make sense for skilled workers in workplaces that are heavily regulated and regularly inspected. They especially don't make sense for government workers.
Yeah, I feel like even in a perfect information environment, it's often vastly more painful for an individual to lose their job than it is for a company to lose a single employee (especially given how much healthcare is bound to employment in the US).
Which means there's a power imbalance there that I'm not sure is solved in the private sector without collective bargaining. In the public sector, there's at least the ballot box to make our collective desires known.
How do you think those workplaces came to be well inspected? What force do you think will keep them that way when business interests can donate unlimited sums to politicians? We’re already seeing rollbacks on child labor laws in the meat packing industry across several states. Don’t kind yourself that this world we live in is something you can take for granted.
+1 would love a deep dive on unions, especially how (if) they're making progress, if they're still a viable political constituency, and if a union push from Democrats still makes sense.
I'm not usually the type to stand up for unions, but a lot of this seems off base to me.
Whether unions are public or private doesn't have anything to do with whether the workers they're protecting really need union protection or not. I dislike the negotiation dynamics of public sector unions, but how to balance, say the needs of teachers vs. the needs of students, is actually an important question. One that politicians are mostly uninterested in answering.
The fact that unions make more on average is a good thing! If they didn't you'd wonder what the point of them was. A union that failed to negotiate for something as basic as higher wages would be clear example of waste and rent seeking!
Speaking of rent seeking, I find it weird that you refer to it that way when a union wants a higher share of corporate profits, but just call it taxation when the government does it. Either way it's redistribution. Is it more efficient when the government does it? I sort of doubt it. Is it better targeted? That seems more plausible. The government will catch people who aren't in a union after all. But it still seems weird to condemn the unions for doing the government's job for them!
Lastly while I agree that McDonalds's workers have no cause to feel solidarity with the UAW I don't think it would be unreasonable to feel solidarity with their fellow McDonald's workers! If they wanted to unionize then they should be able to do so.
Whether a union is public or private absolutely impacts the utility of a union. Private corporations (especially closely held ones) have strong incentives to keep wages as low as possible. Every dollar they don’t pay employees increases profits. This is not the case with public jobs. Furthermore, public sector employers can influence elected officials through voting and campaign contributions, a lever private employees completely lack.
The wage case doesn't seem as strong to me as you make it out to be. If it was neither teachers nor police would have such backloaded benefits. The federal government may not care about deficits, but cities, counties, and even states have real budget constraints. Constraints that are hard to manage because the public hates tax increases.
That's why lots of public sector unions have amazingly generous pensions. Both unions and politicians are agreed that the best way to reward workers is to push costs onto future voters and politicians who for some reason are unable to object, like not being around.
This has been really bad especially here in California.
As a first approximation, if I pay my assistant $1 less, my profit increases $1. There may be second order effects and the world is a complicated place, but anything I pay my employees comes straight out of my top line.
I’d argue public sector unions make the government’s job easier. Imagine needing to negotiate salary and benefits with every single new postal worker or police officer or teacher who gets hired. It would be an incredible use (waste) of time and resources. Much easier to just inform them of the union scale.
Wages, profits, prices, and third party protections (like pollution controls) all compete with each other. By default, profits are the only one with organized representation. Unions ensure that wages do, and government regulation can sometimes step in for third party protections. It’s important that these four-way negotiations aren’t run by just one or two of the interest groups with no organized representation from the others. So unions matter, but they shouldn’t be *too* powerful.
I didn't say that. I said its not that mechanically different than the effect of a tax increase. Raising taxes on a business will also cause them to raise prices.
If unions are going to remain relevant politically, unionizing the service sector is the sort of thing that would have to happen. Problem right now is that the labor movement's relationship with the Democratic Party seems more focused on achieving more benefits for existing members than expanding membership.
People are only going to take the effort to organize if they plan to keep jobs for a while. The smartest and most ambitious baristas are either doing it for a few years during school or else are lower middle class proprietors who own their businesses. This is why service workers are hard to organize. Also, restaurants create very few economic profits, so there aren’t really rents to fight over.
Democrats’ fetish for unions is increasingly counterproductive.
Unions do not help the neediest workers. Public sector workers are six times as likely to be unionized as their private sector peers (35% vs. 6%). This means a major purpose of unions is squeezing rents out of taxpayers.
Indeed, union workers are relatively privileged. Their average wage is $1263 per week versus $1090 per week for workers generally. The rents unions extract are upward redistribution.
Fighting for union workers very different fighting for the underdog. It means fighting for a relatively privileged group of workers who has organized to claw out more privilege still. There is no reason for a fast food or warehouse worker to feel solidarity for the UAW, they inhabit completely different worlds.
In fact, unions only work when there are rents to extract, so they are great for fleecing county boards of education and sticking it to big three car manufacturers but useless for most small business employees. Focusing on a privileged sliver of workers and calling it class solidarity is bad politics.
Redistribution should occur through the tax code. A reasonable, explicit scheme of redistribution that takes more from the top 5% and gives social guarantees to all could cement a durable center left coalition. Coddling 10% of workers because they belong to unions is divisive.
<<There is no reason for a fast food or warehouse worker to feel solidarity for the UAW, they inhabit completely different worlds.>>
I previously had done some political comms work for the Alabama Democratic Party. And they did this whole campaign about solidarity between striking Starbucks workers and striking miners in Muscle Shoals. Needless to say, it didn't quite work.
I guess I’ll stand up for myself a bit here from the perspective of a public safety worker and union member in good standing. I’m reading some true and fair points, but what one might call “rent seeking” by public sector unionization could also be described as investment in the robust safety net which is the second part of Matt’s equation. In a full employment economy with a tight labor market, collective bargaining is a way to keep wages competitive with other options. I have seen this firsthand, with applicant pools lesser than even a decade ago. Thin ranks leave organizations stressed and hollowed out, while elevating chances of injury and burnout among those still on duty.
Stipulating that unions must adapt to new realities, political and otherwise, I doubt that hollowing them out utterly is in line with the Slow Boring ethos, to say the least.
I see three broad things private sector unions do:
1) Physical job protection (don't make me work in unsafe conditions, don't make me work so much overtime that it hurts my health / makes me work in unsafe conditions due to being tired).
2) Negotiate on wages/benefits (better health care, vacation, sick leave, salary)
3) "Having a job" protection (difficult to fire underperforming, tenure-type work, etc)
===
If there is some large category I left out please let me know.
I'm 100% sympathetic to unions on issue 1. I'm not saying they'll _always_ be right that something is actually unsafe, but it broadly strikes me as a good thing to negotiate on. One problem with union power here may be that they've won so many victories (OSHA, 40-hour work week, overtime pay) etc, in the U.S. that the most important parts of this are already covered, especially for service sector jobs.
For #2 it depends for me way too much on specifics. If the _sector_ is doing well but wages are low at all companies (bad labor market?) then I can see unionization to bargain for wages helping to lift them without really hurting competitiveness, but it would have to be something more like UAW rather than a particular company. At a particular company, if the company is profitable enough, this rebalance the profits to the owners vs the wages to the employees, but it could also start strangling the company, especially if it can't change benefits later in response to changing conditions. The main thing here is I'm less sure how much forced unionization laws are necessary.
#3 is probably the issue where unions suffer the most culturally/politically and seems (to an outsider like me) like the area to give up on the most.
I think the largest category you left out would be what I'd call "work rules". Overtime, division of labor, promotion ladder, rules on contractors, etc...
Thanks. I covered _some_ of overtime under #1 but I agree this should be its own category.
This one I'm overall more neutral on. Overtime seems good to negotiate on, promotion ladder seems neutral. Division of Labor unsure (is that where 'featherbedding' comes in? But also helps you not asked to do BS tasks outside your normal remit).
It’s good to recall the bankruptcy of Hostess, which could get no concessions from its unions. One example is that Hostess had to operate multiple delivery systems because the trucks were permitted to deliver only certain brands, not the full range of Hostess products. I believe that this kind of arrangement negotiated to maximize the number of union workers is common, and destructive.
I’d divide it differently.
1. Negotiating the split. How much of the product of my labor goes to me vs. goes to my employer.
2. Collectively agreeing to terms. How much of the compensation package is paid out in cash vs. workplace safety, health insurance, job security, etc.
Negotiating the split is, I think, mostly boring and pointless. Monopsony in labor is a weak force in practice so I think total compensation is usually pretty close to as high as it could be sustainably.
Collective bargaining on the components of the compensation package is potentially much more useful. People like a safe workplace, job security, paid time off, etc. but they’ll trade most of those things away for more cash. When they get the extra cash, a lot of it goes to zero-sum positional spending that doesn’t improve aggregate utility. The union is nice because it encourages more compensation that’s fundamentally not zero-sum, like paid time off or better working conditions, which does improve aggregate utility.
I consider job security in that same category, so I’m more sympathetic to it than you are I think. No idea how the politics of this will work though.
I will admit: that last argument sounds to me like "the union knows what's good for you better than you do". And I will also admit that if that's what it means to say, that sort of attitude really rubs me (and many others) the wrong way. Someone else who does not know the exact details of my situation (e.g. whether I value money more because I need to make child support payments or time more because I have to care for their aging parents) does not in fact know what's good for me better than I do.
Sorry if I was unclear, I was assuming that union leadership would reflect the views and interests of membership, and would function primarily as a coordinating mechanism to resolve a collective action problem.
It’s not “The union knows better than you”, it’s more “We’re all in this together”
I’ll admit it’s tough though, politically. People have some good intuitions about this kind of stuff, but if you try to explain it like an economist you probably sound pretty crazy to most.
“No no, if we let you trade away more time for more money, can’t you see that you’ll all lose much of the windfall bidding against each other for zero-sum positional goods?” -> Patronizing, totalitarian
“Eight hours for work, eight hours for rest, eight hours for what you will.” -> Inspiring! My heart thumps harder just typing it out!
I meant "care for my aging parents". Edited the comment from third to first person and missed that one.
Isn't it weird that the AMA is a reasonably powerful union yet doctors routinely work unsafe hours? I guess the revealed preference is for doctors to take money over job quality, but this also jeopardizes patient safety.
I don't think they're a labor union, it's more of a professional guild.
Isn't the AMA a trade org not a union?
I think it's stronger than a trade org. I mean they basically set wages by restricting MD supply. Even "real" unions have to negotiate
Overtime hours are also sometimes psychologically weird. Some people view them as a "badge of honor" of how hard they worked, despite the research about how bad it is for productivity. "I worked 80 hours saving lives, what did you do"
"1) Physical job protection (don't make me work in unsafe conditions, don't make me work so much overtime that it hurts my health / makes me work in unsafe conditions due to being tired)."
My impression is that most blue-collar unions do the opposite. They restrict hiring and demand generous overtime pay, so that their workers rack up good take home pay but at the cost of working crazy high overtime hours which takes a terrible toll on their health.
One way to think about it is that the bargain for "better working conditions" and that can be allocated in different buckets; better pay, safer jobsite, better hours, better benefits, etc.
But the total amount of surplus to be captured remains constant.
Maybe, but does that require a more consistent exchange rate between them (Consistent across jobs/companies)
Some safety rules are relatively cheap to implement for their benefit, some are prohibitively expensive. E.g. My office had 2? emergency defib machines and a written list of people who had undergone recent training (I was on that list after attending CPR training prior to the birth of my children)). I'm not sure of the cost of the machines but the cost of "put a list up there of people who did this on their own" is a super-cheap intervention. Alternatively "provide this training for all employees" is a much more expensive intervention with probably almost no better outcome.
I'm not sure there's a "total amount of surplus" to be captured that can be moved back and forth. There's definitely a "total amount of cost" that can be spent by the company though.
The cost eats away at the surplus. I think we're getting at the same thing but you're phrasing it better. There is an upper limit to the amount of demands a union can make. At a certain point, they can ask for higher wages OR better workplace safety if the safety measures are costly.
If union workers stuck only do wages and benefits I might be ok with that (at least if they were requiring full funding of benefits with current tax payer dollars at reasonable discount rates and not pushing it on future tax payers).
But instead they spend far too much time making it impossible to hold bad or poor performing employees to account and/or just introducing anti-efficiency rules.
Easy example of this would be police union rules that make it hard to fire bad cops. But the same principles apply to the rest/
It's interesting. There is an old leftist idea that all employees share the same real interest, to increase the power and the income share of workers against employers, or to unite the working class everywhere against the capitalist class everywhere. And yet workers consistently reject it in every country with democratic elections and a truly capitalist economy, and communist revolutions succeed only through civil wars in authoritarian, not fully industrialized states (Russia in the 1910s, China in the 1940s) or through conquest (eastern Europe). And to my understanding, the western postwar social democracies weren't powered by uniting the workers of the world to fight together -- the motives were more like national solidarity within the country, combined with blunting the allure of communism by providing some of the benefits of socialism through milder means.
It would be interesting to understand (1) what's wrong with the theory of class solidarity, and (2) why it nonetheless remans popular on the left.
That question is easy to answer. The working class is not unitary, it contains multitudes with different material interests. Harbor pilots and day laborers are both working class, but they are in different markets and different social strata.
If capitalists successfully coordinate to exploit labor, then workers get systematically underpaid relative to the marginal product of their labor, then you’ve got deadweight loss, so then a coordinated worker movement has space to raise real wages while actually increasing aggregate economic output.
In most places most of the time, capitalists have not in practice been good at doing this kind of coordinated exploitation, especially not in democracies, so workers are mostly paid more or less fairly already. On some level, this filters out into the popular consciousness and blunts the appeal of class politics.
In other words, businesses that “defect” and pay their employees unusually well haven’t already outcompeted and taken over everywhere, this can be seen by just looking around, so maybe reorganizing the entire economy along these lines won’t generate large gains.
Which is another argument for enabling efficient and robust markets. A lot of that probably looks like promoting “free “ markets, but it also looks like antitrust, promotion of entrepreneurship with low barriers and financial incentives, promotion of science to enable technical change, good bankruptcy regimes and good financial engineering environments to enable exploration of differ business models. It might even include things like universal healthcare or similar that make it easier for employees to change employers or start their own. Good workplace safety rules also help prevent race to the bottom competition.
Lots of things can be done to ensure healthy competition and creative destruction. The zero-sum mindset of unionism is what I think holds it back. Would Starbucks employees be better off with a union or better with clearer overtime regulation and state capacity improved at the county labor board?
I don't think Noah Smith has read my comment, but he nonetheless wrote a long-form answer to the related question of "why isn't working-class solidarity a winning strategy for the left in 2020s America?"
https://www.noahpinion.blog/p/america-doesnt-really-have-a-working
One potential problem I see with trying to unionize Starbucks employees is that most of those people intend to only be there for a short period of time. I wouldn't say "give up" if that's what you really want to do, but service sector work is fundamentally different than mid-century factory jobs.
The percentage of unionized Starbucks employees is still pretty small (about 11K out of ~240K in the US) but it has shown impressive growth in just a couple years.
Let's see how it plays out before confirming your view.
Sure, let's see how it plays out. I didnt say it's impossible. I'm just pointing out one reason unionizing service workers is difficult; time horizons.
The original Omnicause was one singular OmniLabor movement.
Yes, Matt's claim that progressives are for "Good schools and Good infrastructure" is a bit hard to square with their positions on (a) extended school closures during covid and (b) management of US ports.
In both cases, supporting unions took precedence. To a truly astonishing degree.
Yeah the particular intransigence of Teacher's unions circa Fall 2021 was eye opening.
I'm actually a defender of Teacher's unions actions in 2020. Before vaccines were available, being very Covid cautious made sense to me. I'm one of the people who believes we should have been more like continental Europe in 2020. And a union at the day is at its core supposed to look for the safety and well being of its members.
But denying that lack of in person instruction had any negative impact on learning was galling (I know it was just one person, but the idea that kids were somehow "learning" by just being part of their community was insulting to my intelligence). It's also like an amazing self own in the sense of "ok if in person instruction doesn't matter than why do teachers matter?"
I think of Unions as more like prosecutors or defenders. They aren't supposed to get at "truth". They are supposed to present facts only as far as they help their client.
And many times they seem to be operating even more like trial attorneys, in as much they are trying to win the current case, without much long-term planning beyond winning the current round.
I'm not a lawyer or union member, so maybe someone can correct this perspective if it's way off.
I think this is right — but on the other hand, having been in a union and then having worked in the same role in a non-union shop, it was night and day how management treated us. So whatever they were doing seemed to work.
Of course, it’s a good thing we have prosecutors and defenders! We do a better job getting at the truth when there’s an advocate on each side than we do when we just have a bunch of impartial people looking around.
Similarly with work conditions - the company has organized representation, and it makes sense for workers to as well. Though in this case there’s also a third and fourth side that need representation too, in terms of consumers, and other stakeholders (like potential bearers of pollution).
"We do a better job getting at the truth when there’s an advocate on each side than we do when we just have a bunch of impartial people looking around."
Is that true? The only point of comparison I'm aware of are the systems of continental Europe, which I understand are more geared towards finding "truth" and less permissive of sophistry or dismissing prosecutions based on misconduct.
It always seemed like that's better to me. In terms of criminal law, it's left us stuck with situations where a large fraction of likely guilty people are let go because of "technicalities" and in response we jack up sentencing to compensate. ie, "we might not be able to make the charges stick (if we mess something up on our end) but if we do, we'll hit you hard!"
I'm not sure where you get this idea that a large fraction of likely guilty people are let go on technicalities. After being charged the rate of guilty pleas is anywhere from 90-98%!
If you're talking about people who are released without any charges, then that's probably because the prosecutors lack enough evidence to secure a conviction were the case to go to trial. The European system would be no better in cases where there are no witnesses to cooperate or physical evidence.
I’m mainly thinking about science here. We make more progress when there are advocates for different scientific theories arguing and doing the experiments they hope will show themself to be right (and re-doing the experiments over and over to get past the problems that make most experiments fail the first time you try), and perhaps more importantly, coming up with the tortured arguments for why the other person’s experiment doesn’t show what they claim it shows. We sometimes talk as though we could have a community of dispassionate truth seekers, but that has never been able to deal well with big open ended questions.
Correct. The U.S. has more lawyers per capita than Europe and it’s not clear what we get for that, other then a safety valve that keeps demi elites like me from playing leftist politics full time.
The analogy is apt
I agree that caution early on was very reasonable. I have no beef with people closing schools in Spring 2020. Then there is a gray zone where reasonable people can disagree, but by the time vaccines were widely available, it was indefensible to argue that school should remain closed.
(Fwiw, I was in 2020 outraged at the Swedish approach of basically letting the virus quickly rip through the young and the middle-aged population. But it's been humbling to see that three years down the road, their numbers compare very favorably on almost every metric. They had sky high deaths among the elderly early on, but it seems the main thing that happened was that people who were about to die within a couple of years anyway just died sooner. That is a tragedy, but perhaps less of a tragedy than throwing a whole generation of low ses kids under the bus.)
I look forward to the day when we all unanimously agree that for the first part of the COVID plague, it was so new and so daunting that wide swaths of society took action amidst great uncertainty that later turned out to be ineffective, and that we grant some forgiveness for not having 20/20 hindsight at the time.
This does *not* apply to cases where people obviously should have known better and were too blind to do the right thing: public health people supporting George Floyd protests, teacher unions keeping schools closed far too long, right wing media convincing their gullible followers to forego getting vaccinated, etc.
"20/20 hindsight"
Or 2020 hindsight
What should have happened is that schools should have promptly reopened no later than the start of May 2020 once we had a grasp on its lack of danger to kids, and some mitigation we could do, and then keep them open through the summer, overwhelmingly taking place outdoors, as a catchup from what was missed in March and April, and also to get ahead of the curve for a potential need to take a societywide hibernation in the late fall and into winter, which we very much needed the instant news of the vaccines being around the corner dropped.
A lot of states opened schools in Fall 2020 and never closed again. It was fine. If Costco is open, schools should be open. Thank goodness for federalism!
Our schools reopened in September 2020, and students' families could choose whether they were in-person or remote. Fewer than half of the families chose in-person. This doesn't necessarily mean that our schools should have offered the remote option, but it is easy to forget how scared people were before the vaccine came out.
And also, many of our schools had to either suddenly go remote on any particular day, or have an entire grade go to the gym and basically do remote lessons on their computers because so many staff members were out sick. In some cases, there was not enough supervision for student safety to be assured, and I know many parents who kept their kids home if they knew it was going to be an "in-school remote" day. I live in a high-poverty urban district. The same safety issues may not have applied in wealthier suburban districts, but parents were definitely considering these issues where I live.
I don't think opening schools in May 2020 would have been the panacea many here think.
If we had just stayed on lockdown for a few more years, we could have had True Socialism™ In Our Lifetime. =[
Fall 2020 was the right time to open schools, but May 2020 feels like pushing it a bit. Remember, May is very close to the end of the school year, and I don't think it makes logistical sense to open schools for just 1-2 weeks before breaking for the summer.
As I said, there should have been no summer break.
That lack of pivot is my big beef. My older son's private daycare/preK re opened in June 2020 with precautions. The Catholic schools re-opened in fall with precautions. The public school system was closed and/or in some weird ever evolving state of remote or hybrid for the better part of 2 years. That latter fact was decisive in where we send our kids now. One system cared about the children. One cared about a union that unlike the factory workers of yore is organized against the wider public.
Was it that obvious by May 2020? That was barely at the start of the pandemic!
Maybe my memory is colored here, but I recall vast amounts of uncertainty that early in the pandemic and for some time after. I think you have a better argument for criticizing schools that stayed close the following autumn.
On Sweden, what numbers do you look at? Can you find deaths by age bracket and test scores by SES? I'm just curious because I would like to dig into it myself.
“ But denying that lack of in person instruction had any negative impact on learning was galling”
But everyone works better at home, right? /s
Was there a big impact on learning? Very little it turns out, and basically none for white students, but some noticeable impact on poor minority students who don't have access to as many resources.
Yes, of course, it was bad for those students so affected, but in many cases I recall their parents *wanted* them to stay home.
Bottom line, the school closure debate does not have a clear, indisputable answer.
https://jabberwocking.com/remote-learning-during-covid-was-harmful-but-limited/
I find Drum to be a very shoddy thinker these days, and I think the data suggest longer-lasting problems than he acknowledges. https://www.washingtonpost.com/education/2024/07/23/covid-test-scores-learning-loss-absenteeism/
https://www.vox.com/education/372475/math-reading-school-covid-education-learning-loss-kids
Right. When the unions came out against requiring their members to be vaccinated (with appropriate exemptions available!) it really showed how little they cared about their members and their students. Big wake up for me to hear them say “let’s not request a minor inconvenience that could save lives and certainly will reduce suffering of our members due to illness.”
My brother is an airline pilot and his stories about union impacts are eye-opening. A couple things stand out to me, notably how unions enforce seniority over meritocracy and how it seems that a lot of entry requirements for airline pilots seem designed to control supply and keep pilot incomes high.
How would a pilot meritocracy work? It’s not like it’s Top Gun and they can fight it out. Would it just be simulator, check ride and written test based?
The same ways people working in basically any job are evaluated: observation and evaluation by supervisors, written tests, practical tests, success/failure rates at tasks, so on.
Yeah, there was a period where their position was that teachers should not be required to get vaccinated but their students should be required to mask at all times to protect the teachers.
If you’re that concerned about being protected against a virus, a vaccine sounds like a much sounder proposition than requiring 7 year olds to do something than many of them find unpleasant or uncomfortable at all times.
And on grading, gifted and talented education, and what we should do about disruptive students. I think Matt will get to this when he discusses that public services need to be run for their users, not their employees or some ideological goal.
Even in this article note the distortionary effects: longshoreman’s (economy threatening) strike against automation, snubbing Tesla when EVs are a major policy goal, and I’d argue jones act and buy American protectionism fits into union support because it creates rents to extract and prevents foreign labor from competing. The later common sense bullet about government existing to provide services not employment also is very in tension with unions.
Here in CA the big one is prevailing wage requirements to receive affordable housing subsidies, or other entitlements for multi-family housing. Basically "we can't make you hire union labor but you do have to pay union rates".
Similar to the EV mandate it's not objectionable on the face of it but it shows where the administration's priorities are. Is affordable housing important? "Yes!" Important enough that non-union workers get jobs? "Well, no." Is electrification of the US auto market important? "Yes!" Important enough to subsidize non-union cars? "No, not that important."
Someone on this blog commented a year or so ago that government policies should be "one goal, one lever." The more I think about it, the more accurate that is.
Want below-market housing? Then just subsidize deed-restricted housing with no other requirements.
I'd say that snubbing Elon Musk was a forgivable act given what we've learned about him.
Was the result of that snub that Tesla refused to sell any more EVs?
Poor Elon. What a beautiful, fragile hothouse flower who can only be sustained with loving care and devoted attention.
I don't think that works. First, something we learned post facto can't be used as a justification ex ante, because how crazy and bad he was wasn't known at the time. Second, to the extent we knew that he was bad and vindictive, that makes the administration's decision worse, not better: when someone is both mercurial and influential you often have to play ball with them! You don't get to say, "what, were we supposed to be NICE to him?!" right after he's shown you why the answer to that question is yes.
I'm of two minds on unions. The first mind has been strengthened in recent years by this site, that includes many of the reasons you state here--very broadly speaking, the ability to rent seek. But I also can't shake the other mind that sees that abuse of workers can still happen, and that collective bargaining can help reduce asymmetric information that's to the disadvantage of workers.
But I'll be curious to see if Matt expounds more on unions in particular in point 8 so we can discuss further there--I sure hope he does!
I'm really of the mind that unions are a vestige of an era when there were real asymmetries of mobility/knowledge and governmental didn't have much regulatory strength.
Unions make a ton of sense in company towns full of people with 4th grade educations.
Unions make a ton of sense in uninspected mines or unregulated iron foundries.
Unions don't make sense for skilled workers in workplaces that are heavily regulated and regularly inspected. They especially don't make sense for government workers.
Yeah, I feel like even in a perfect information environment, it's often vastly more painful for an individual to lose their job than it is for a company to lose a single employee (especially given how much healthcare is bound to employment in the US).
Which means there's a power imbalance there that I'm not sure is solved in the private sector without collective bargaining. In the public sector, there's at least the ballot box to make our collective desires known.
How do you think those workplaces came to be well inspected? What force do you think will keep them that way when business interests can donate unlimited sums to politicians? We’re already seeing rollbacks on child labor laws in the meat packing industry across several states. Don’t kind yourself that this world we live in is something you can take for granted.
Economic growth happened, along with massive advancements in quality of life.
I don't see how economic growth is a brake on any of the things that Matthew listed; if anything, search for more growth feels like the opposite.
Economic growth provides vastly improved opportunities and quality of life to people, meaning that people can avoid dangerous or unpleasant work.
Economic growth also expands resources available to the government, allowing it to provide more regulation and enforcement.
Union advocates so often act as if 2024 Americans would be working in Triangle Shirtwaist conditions without them, but that's just not true.
+1 would love a deep dive on unions, especially how (if) they're making progress, if they're still a viable political constituency, and if a union push from Democrats still makes sense.
I'm not usually the type to stand up for unions, but a lot of this seems off base to me.
Whether unions are public or private doesn't have anything to do with whether the workers they're protecting really need union protection or not. I dislike the negotiation dynamics of public sector unions, but how to balance, say the needs of teachers vs. the needs of students, is actually an important question. One that politicians are mostly uninterested in answering.
The fact that unions make more on average is a good thing! If they didn't you'd wonder what the point of them was. A union that failed to negotiate for something as basic as higher wages would be clear example of waste and rent seeking!
Speaking of rent seeking, I find it weird that you refer to it that way when a union wants a higher share of corporate profits, but just call it taxation when the government does it. Either way it's redistribution. Is it more efficient when the government does it? I sort of doubt it. Is it better targeted? That seems more plausible. The government will catch people who aren't in a union after all. But it still seems weird to condemn the unions for doing the government's job for them!
Lastly while I agree that McDonalds's workers have no cause to feel solidarity with the UAW I don't think it would be unreasonable to feel solidarity with their fellow McDonald's workers! If they wanted to unionize then they should be able to do so.
Whether a union is public or private absolutely impacts the utility of a union. Private corporations (especially closely held ones) have strong incentives to keep wages as low as possible. Every dollar they don’t pay employees increases profits. This is not the case with public jobs. Furthermore, public sector employers can influence elected officials through voting and campaign contributions, a lever private employees completely lack.
The wage case doesn't seem as strong to me as you make it out to be. If it was neither teachers nor police would have such backloaded benefits. The federal government may not care about deficits, but cities, counties, and even states have real budget constraints. Constraints that are hard to manage because the public hates tax increases.
That's why lots of public sector unions have amazingly generous pensions. Both unions and politicians are agreed that the best way to reward workers is to push costs onto future voters and politicians who for some reason are unable to object, like not being around.
This has been really bad especially here in California.
Benefits are the accounting fudge that keeps the party going.
“Every dollar they don’t pay employees increases profits”
Or enables the firm to better compete on price, and thereby grow market share. (You run a business, no? You should know better.)
As a first approximation, if I pay my assistant $1 less, my profit increases $1. There may be second order effects and the world is a complicated place, but anything I pay my employees comes straight out of my top line.
Not to be pedantic but it comes out of your bottom line. Top line would be sales.
Paying your employees more wouldn't decrease sales, it would increase expenses which would decrease your net income.
it comes out of my top line. i take in my top
line and then disburse. i am the residual claimant
I’d argue public sector unions make the government’s job easier. Imagine needing to negotiate salary and benefits with every single new postal worker or police officer or teacher who gets hired. It would be an incredible use (waste) of time and resources. Much easier to just inform them of the union scale.
“…rent seeking…when a union wants a higher share of corporate profits”
It’s telling that you believe union wage increases come from lower profits rather than increased prices and/or inferior products.
Wages, profits, prices, and third party protections (like pollution controls) all compete with each other. By default, profits are the only one with organized representation. Unions ensure that wages do, and government regulation can sometimes step in for third party protections. It’s important that these four-way negotiations aren’t run by just one or two of the interest groups with no organized representation from the others. So unions matter, but they shouldn’t be *too* powerful.
There are non wage costs, too.
I didn't say that. I said its not that mechanically different than the effect of a tax increase. Raising taxes on a business will also cause them to raise prices.
“Raising taxes on a business will also cause them to raise prices”
Or not. It depends.
If unions are going to remain relevant politically, unionizing the service sector is the sort of thing that would have to happen. Problem right now is that the labor movement's relationship with the Democratic Party seems more focused on achieving more benefits for existing members than expanding membership.
https://www.statista.com/statistics/195349/union-membership-rate-of-employees-in-the-us-since-2000/
Really? Hasn’t there been a lot of campaigning to unionize Starbucks and Amazon and the like?
People are only going to take the effort to organize if they plan to keep jobs for a while. The smartest and most ambitious baristas are either doing it for a few years during school or else are lower middle class proprietors who own their businesses. This is why service workers are hard to organize. Also, restaurants create very few economic profits, so there aren’t really rents to fight over.