Re:Big companies collude to hold down pay.
by _delirium on Thursday September 16, 2010 @11:43PM
(#1700045)
Indeed a mirror image, and possibly causally related. In the U.S. at least, the big union-organization frenzy was, perhaps not coincidentally, mostly in industries dominated by large industrial trusts that colluded with each other. It seems like a reasonable defensive reaction, even if not ideal: if your counterparts are all colluding with each other, so you have no real choice of employers, you pretty much have to collude as well if you want any chance of negotiating a decent deal.
(And, often, the industrialists were colluding with local governments in addition to each other, making it even worse; especially during the period of the "mine wars".)
I don't really like unions, but collusion like this is an understandable reason to form them: if the companies are all agreeing behind closed doors to do X and not do Y, the only real ways to force them (since they've removed the ability of market competition to do so) are to either: 1) pass a law banning the objectionable practice, e.g. California's prohibition of non-compete agreements; or 2) get a large enough group of people to all agree not to work for any company unless certain terms are met.
(And, often, the industrialists were colluding with local governments in addition to each other, making it even worse; especially during the period of the "mine wars".)
I don't really like unions, but collusion like this is an understandable reason to form them: if the companies are all agreeing behind closed doors to do X and not do Y, the only real ways to force them (since they've removed the ability of market competition to do so) are to either: 1) pass a law banning the objectionable practice, e.g. California's prohibition of non-compete agreements; or 2) get a large enough group of people to all agree not to work for any company unless certain terms are met.