Yes, it does, in each scenario you presented.
> We are free to change the perceived value of workers through the power of worker solidarity
It's more like using the power of government to ensure the company has no alternative to the union.
Company leaders have no actual power over the workers. They cannot force anyone to come to work. They cannot have you arrested. They cannot confiscate your property. They cannot beat you. They cannot prevent you from accepting a job at another company. They cannot prevent you from leaving. They cannot extort, libel, slander, blackmail, or threaten you. They cannot put a hit on you.
All they can do is offer you money in exchange for your labor. That's it.
They can totally do that with a non-compete clause. Just not in California.
In some states, and in some circumstances, they may be able to prevent you from accepting a job at a competitive company.
Unions absolutely do not need the government to exist. It is only through government attempts to control and curtail unions that the government has involved itself in unions. See for example the Taft-Hartley act:
That's absolutely correct. But in America, the unions use the government to tilt the balance heavily in their favor.
Demand isn't the same thing as value. When we create an economy where a few people have all of the disposable income then we also create one where the only business interests represented are theirs. We should let value dictate demand, which only happens when we spread the money around.
It's not that supply and demand is wrong. It's that supply and demand is not the whole story. It is an open question whether workers should change the market forces at play by unionizing and demanding collective bargaining of their wages. This does not subvert supply and demand, it simply alters the pressures the company leadership experiences in the market. I said that the original comment was "wrong" because the comment stated clearly that "wages are only set by supply and demand". This seemed to me to imply that nothing could be done about low worker wages, which is clearly wrong. What workers can do, and apparently in this situation have done, is unionize and strike for better wages.
If supply and demand worked as theorized in the labor market then there would necessarily be a loss of employment when the minimum wage is raised, but that is not always the case [1].
Some studies find effects and some don't, which is a good indication that the labor market is more complicated than Econ 101 principles.
[1]https://en.wikipedia.org/wiki/Minimum_wage#Empirical_studies
It seems to me that what the union is asking for is that the corporation act more like a benevolent force than one that is restricted by market pressures. Of course, you could use the power of government as one poster mentioned to force this issue, but those violent delights have violent ends.
I disagree. The union is simply changing the market pressures that the corporation experiences. There is no benevolence required when you are faced with a strike. You either negotiate acceptable terms, or you have to deal with the consequences.
If someone's selling you a simple explanation, they're likely wrong.
Do you feel this to be illegitimate? If so, why?
Wouldn’t that be simply favouritism/cronyism rather than a free market?
See "A Principled Approach to Executive Pay", Chapter 1.F in The Essays of Warren Buffet, arranged by Cunningham.
The issue I take with your line of reasoning is that executive compensation is often at odds with investor interests in more ways than just its amount. Buffet describes "heads I win, tails you lose" executive compensation plans in an essay from the 80s/90s. He describes how they do things at Berkshire Hathaway - they're doing very well and I doubt have any issue recruiting good executives.
Despite this, and decades later, we see terrible compensation plans being approved by boards. We see executives exiting failed businesses with enormous paychecks. We see boards offering those same executives new management positions with terrible (for investors) compensation plans. What gives?
It certainly looks like cronyism to me, but maybe I ought to be applying Hanlon's Razor.
1. Cronyism looks like something totally different if you are inside of it or close enough to see it, which helps explain why it can happen.
2. The "economics 101" picture has no problems with adapting to non-financial preferences like nepotism. In fact the basic models make no statement about why buyers would prefer one thing over another whatsoever.
The farther actors are from perfect information, the more asymmetry in the system there is, the slower the system is to react, the more the relationship between supply and demand breaks down.
You’re both right. Power dynamics and supply and demand are interrelated.
Most forms of human organization involve hierarchy. Even co-ops have a CEO and that CEO makes a multiple of base worker pay.
What that multiple is and how it gets decided is a fair question: in co-ops, voting rights are built-in, but for private corporations you need collective bargaining
It's not that they're wrong. Worse, they're thought-stopping.
They're mantras we all know and we are trained to "accept their wisdom" and stop questioning.
This is a description of the status quo of capitalist competition, but is not a fact of nature. We can arrange our economies to work in cooperation with one another, rather than in competition. Competition is used specifically to depress all worker wages for the benefit of the ownership class, and we do not have to accept that at face value.
Supply and demand is the imbalance. The workers, individually have no control over supply. The whole point of a union is to control the supply of labour and shift the balance of power.
Most of the time that I see people invoke "Econ 101" concepts, they are wrong. Supply and demand does not account for the power imbalance between workers and leadership, which unions specifically attempt to address. It does not account for the class differences between workers trying to make ends meet and the board of directors who believe they deserve much higher pay than workers. We are free to change the perceived value of workers through the power of worker solidarity - ensuring that individual workers are not so easily replaced to keep wages suppressed. You can simply say "it's supply and demand" and do nothing to support the workers whose labor is so clearly needed for our economy to function, or we can support collective bargaining rights to make sure that individual workers are not crushed under the power of company leadership. How you view this is up to you, and not a simple fact of natural laws of economics.