The Big Ragu
Well-Known Member
- Joined
- Nov 14, 2002
- Messages
- 30,281
I apologize if I am about to bog down the thread with the discusion about unionization you are starting. But you are confusing the chicken and the egg. Unions have died off in this country (other than public unions / government jobs, which don't exist in a market-based economy, and are supported by the fantasy of escalating government debt) BECAUSE most unions don't have the magical leverage you think. Not all -- for example, an mlb baseball player has such a rare skill that they can't be replaced (i.e. -- they have actual leverage), so collective bargaining does cash in the leverage their irreplaceability gives them. But for the average worker thinking all they need to do is unionize and it creates some magical leverage that they didn't otherwise have?
For decades, many unions essentially bought political favor in exchange for money and votes to politicians, which gave them government-sanctioned leverage at the negotiating table that they didn't have due to their actual value. That came with a steep price. It created above-market wages and benefits in a lot of industries, with the externality being that it drove up costs for American consumers (never talked about), created a union club with fewer people earning a higher wage, but lots of people who would otherwise have had jobs earning nothing. As importantly, in a globalized world, and with consumers always more interested in less expensive goods and services, market forces reasserted themselves -- as they always do, even if you can create an artifical price floor on wages in one country and manage to keep it propped up for even a few decades.
Look at all of the booming American industries (when America produced things and was an economic powerhouse) that once thrived, then unionized. ... and no longer exist in the U.S. (i.e. -- the "union erosion" from your study). Textiles, Mining, Steel, Autos. All of those industries are largely gone, all largely in other parts of the world where wages and other costs are more in line with market forces.
There are a lot of things that have led to esclating income inequality over the last 5 or 6 decades, with reckless monetary "policy" creating stealth inflation that has driven up asset values, while putting a lid on wages -- it is the main reason why the rich have gotten richer and virtually everyone else has stagnated. Any study that looks at the world in a vaccuum, and concludes, "We used to have unions and working stiffs earned more, and now we don't have them and they are doing worse," is mind boggling to me in its childish reasoning. It's like saying, "the Soviet Union was doing so well in the 1970s, but by the late 1980s it was collapsing, so what they needed to do was go back to the 1970s when things were great. The artificiality of a command economy or price floors or price ceilings can create the temporary appearance of prosperity, but it comes with prices attached in the immediate term, such as people who were employed no longer having jobs (while a small group earn more) or product and service shortages (even though what is available is artificially kept cheaper). Longer term, those kinds of things have always proven unsustainable -- either poorer parts of the world will happily step in happy to have the jobs and the economic activity or you get underground economies that work more efficiently, but at higher costs.
If you dictate that the price of labor has to be higher than what the market is willing bear, it doesn't create the economic value to actually support your dictate. And if you can actually enforce the dictate, there is a steep price for it that costs more people than it helps. When are people going to learn this?
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