Re:The New Yorker has formed a union
by pron on Wednesday June 06, 2018 @01:29PM
(#17249147)
But you don't care about market outcomes, but about your own personal outcome (and I assume the economic theory alluded to wasn't macroeconomic but micro). The market can converge to fair non-union wages, or it can converge to fair union wages, which would be higher. Capitalists claim that unions reduce overall profit and harm the market, but workers shouldn't care about that (i.e. lower stock performance and higher wages are better for workers, at least in practice, given actual wealth distribution).
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You are forgetting about customers. I own no companies and work for one company, but I am a customer of many. A personal cost/benefit analysis like the one you're describing would have to take that into account.
The way it works is that management involves the union in its decisions, and they reach compromises. After all, it is also in the union's interest that the company stays viable. If all the increase in wages gets is paid for by an increase in prices, and management isn't willing to cut profits, then that's unlikely to be acceptable to the union. The goal is to keep the company performing well, but to even the playing field when negotiating the distribution of profit among management, shareholders and employees. This is called co-determination: https://en.wikipedia.org/wiki/Co-determination
Individuals might prioritize personal outcomes over market outcomes, but societies and governments should prioritize the latter.
> but societies and governments should prioritize the latter
Societies should prioritize according to their values. I don't think that maximizing GDP is a universal value.
Yeah. The consumer optimum is heavily exploited workers, as that drives labor costs down as much as possible. We're looking for a reasonable balance, so the value created by labor is shared between consumer, producer, and the many other people in the value chain.