The reason that we don't want the government to set minimum wages and benefits is because that's too crude a tool. The best trade-offs, sacrifices and share of spoils varies, and having the unions of different sectors negotiate with the employers (themselves usually organized in unions) is that you can optimize a lot more so that everyone wins.
The main benefits of being part of an union here is stuff like union lawyer being made available to you if you have a dispute with your employer. And obviously more voice in who will represent you in the negotiations between the government, employers and employees.
Unions represent their members (sometimes not equally).
That's it.
They try to extract the most.
That's it.
They are not looking out for anyone's best interests but their own, they are not setting prices necessarily rationally, they are not acting for the benefit of the community at large.
There are 5 'factions' in a companies power dynamic:
1) Owners 2) Executives 3) Labour (i.e. Unions) 4) Customers 5) Suppliers
+ Arguably 'other financiers' (i.e.lenders) make up a 6th.
+ There are externalities, like 'the environment'
The surpluses will be divided among those parties given wherever the power equilibrium rests.
If a company is very weak compared to it's customer (like having Apple as a main customer), it won't make a lot of profit so not a ton of surpluses for the other groups. This is called a 'Monopsony' (i.e. Apple has power over it's supply chain).
If a company is very weak compared to it's supply chain (like a small retail store), they're not going to capture much surplus either.
If the investors have great leverage because capital is sparse, they get more surplus. If money is everywhere, they have less leverage.
Union power is an odd one because it's driven by non-market forces i.e. the regulatory limits of what unions can and cannot do given the local laws. In some regions, they are very powerful with (aka Germany, Denmark) with varying kinds of influence.
In the US, the auto-workers Unions are incredibly powerful, so much so that the standards that they establish fold-over into the non-unionized plants.
In a sense, the government roughly sets union wages by imparting the degree of power that unions have to strike etc...
So you don’t think they care that their members can keep their jobs long-term? Is that not in their interest?
To imply that all unions without fail will push for maximum possible compensation in the short-term, at the expense of any other concern, is simplified to such a degree that it no longer matches reality.
"So you don’t think they care that their members can keep their jobs long-term? Is that not in their interest?"
I don't care one way or the other. I'm saying that a Union is an organized body of power that protects it's own self-interest, and nobody else's.
"To imply that all unions without fail will push for maximum possible compensation in the short-term, at the expense of any other concern, "
I didn't write or imply that.
I'm wrote that Unions will use their power to maximize the returns above all else. Obviously, if they try to negotiate $200K salaries for their staff, they know they will be out of jobs.
However - every single dollar of profit to shareholders, added surplus to buyers/suppliers would be considered 'their money' in this equation, to the extent they can, they'll want to take all of those surpluses - exactly like other participants. Do you think their suppliers will sell for a dime less than they can? Will their customers pay a dollar more than they have to? Will management want to pay more than they have to?
A Union is not a benevolent thing, it's just a power centre acting in it's own interest and that's it.
Well, that’s how I interpreted it, in large part because you flat-out replied ”this is definitely not true” to the person who was making the point I pretty much reiterated in response to you.
> A Union is not a benevolent thing, it's just a power centre acting in it's own interest
Yes, the interest of its members, which is the whole point.
Yeah so what? The other side does the same thing and runs into the very same issues. If unions go to far they struggle with job retention. If employers go too far they struggle with employee retention. These forces balance closer to the middle than if you only had one of them.
Now, you know what's stupid? Letting the government become the union of last resort via the minimum wage. The government doesn't negotiate with anyone. It doesn't know what wages are justified. So it will get it wrong. Either it's too low or it's too high. No feedback from the actual economy. With no clue whether it makes things better, worse or simply does nothing (95% of the time).
I'll choose the unions rather than the government.
What this means is that using Unions, arbitrary employees can possibly take over companies and consume all of the surpluses, which is not good.
"Now, you know what's stupid? Letting the government become the union of last resort via the minimum wage. "
It seems odd because a 'min. wage' is a broad, crude measure, and a 'negotiation' feels more market oriented.
The problem is, those negotiations are not market oriented.
Union-Company negotiations are based on a very arbitrary power that we give to Unions to basically hold the operations of the company hostage unless certain demands are met.
It's not efficient at all.
Given that, I think it's just better if government sets a floor for work.
They could improve it by 1) using economic measures instead of making it political, and 2) possibly have different min wages for different sectors.
In reality - we don't need Unions. Where they are 'most needed' today is where pay is really how, and or there are some unfair practices, arguably at Wallmart and Amazon.
If we increased minimum wage to something reasonable, and got a bit more nuanced with regulation and enforcement ... then that would solve most of the problem.
Worker safety + regulations take care of most of the reasons unions needed to exist and min wage takes care of most of the rest.
Non-unionized auto workers make well above min-wage salary because market-driven salaries work well enough in those areas.
I didn't read that they'd strike until a specific pay number was reached from that page, just that McDonald's had to operate under the same conditions as their same industry peers
The Danish model allow for continuous adaptation of the compensation and benefits. The companies have just as much influence as the unions do. The model allows companies to avoid a minimum wage, which may not be beneficial to companies if a particular sector has a slowdown.
I'm not sure how hugely helpful this is without considering all of the knock on effects and what all of that means.
We could demand $50/h for them as well or otherwise demand that everyone in the country have the same pay.
It would be better if someone could make the case for some kind of net gain in having such prices fixed at any given place.