Unions: good for workers or bad for business?

[sbr]

Unions were a good idea when 12 year-olds were working 15 hour days in the coal mines.  IMO they have outlived their usefulness here in the US. 

[Martinus]

Ever heard of monopolies?

Interesting you should mention monopolies.  I was just on the verge of responding to your previous post by pointing out that it's based on company town thinking.  IF employees realize that they don't have to work in the mine just because their father and grandfather did, and IF they realize they don't have to live in the same town forever, then the fantastic economic power of the employer is meaningless.  If the mean old mine owner tries to pay them less than the market value of their labor, they can shop their services elsewhere.

As to actual modern day monopolies, I weep for the poor oppressed workers at Microsoft,  but I can't think of many other monopolies.

First of all, I used the example of monopolies as an area where law must intervene to protect freedom of trade, because without it, the freedom becomes illusory. It is not to say that workers only need to be protected when they are dealing with monopolistic employers, of course - not sure if you are arguing with that point, but it's a strawman.

In principle, there are three areas where it is recognized that state should intervene to preserve fair trading balance:
- dealings between undertakings where one of them has market dominance (we use the term "monopoly" here in a loose sense, but what we mean is market dominance, btw, which is broader and can include certain forms of oligopolies - also market dominance can be established at a much lower market share than a monopoly - for example, depending on the market structure, an entity with a market share even below 40% can be considered dominant),
- dealings between employers and employees, and
- dealings between businesses and consumers.

Both consumers and employees are, per se, in a much weaker economic position than the businesses, which makes their protection necessary irrespective of whether the business they are dealing with is dominant or not.

[Martinus]

Unions were a good idea when 12 year-olds were working 15 hour days in the coal mines.  IMO they have outlived their usefulness here in the US.

Considering that in the US there are states with the barbaric concept of "at will employment", I would say that trade unions are still very much necessary.

[Admiral Yi]

Both consumers and employees are, per se, in a much weaker economic position than the businesses, which makes their protection necessary irrespective of whether the business they are dealing with is dominant or not.

How so?

[Martinus]

Both consumers and employees are, per se, in a much weaker economic position than the businesses, which makes their protection necessary irrespective of whether the business they are dealing with is dominant or not.

How so?

What do you mean "How so"? It's a fucking axiom. 

[Zanza]

The unions here are fairly reasonable for the most part, so I'd say that while they may not be good for business, they serve a useful function in society.

[Admiral Yi]

What do you mean "How so"? It's a fucking axiom. 

There are no axioms in economics. 

[The Larch]

I was just on the verge of responding to your previous post by pointing out that it's based on company town thinking.  IF employees realize that they don't have to work in the mine just because their father and grandfather did, and IF they realize they don't have to live in the same town forever, then the fantastic economic power of the employer is meaningless.  If the mean old mine owner tries to pay them less than the market value of their labor, they can shop their services elsewhere.

Plenty of people don't have the mobility that you advocate.

[Magnus]

What do you mean "How so"? It's a fucking axiom. 

There are no axioms in economics.

The statement the consumers and employees are in a "weaker economic position" is not an axiom, it is though true, generally.
Consumers and employees have less market power than a buisness, which is what I assume marti means by "economic position".
Unions improve an employees market market power, consumers are harder to improve the market power of, but there are methods, mostly govermental.

To quickly explain why a business has more market power, ask yourself how much of the market does a generic widget making buisness control, vs a customer buying widgets, or an employee trained in widget making.

Edit: side note there are a few axioms in economics, one is that people in sufficent quantity, act rationaly, or more accurately rationaly enough to make predictions of.

[Admiral Yi]

To quickly explain why a business has more market power, ask yourself how much of the market does a generic widget making buisness control, vs a customer buying widgets, or an employee trained in widget making.

By "control" do you mean the ability to influence price and quantity?  A generic widget maker is the textbook example of a price taker so none of them can influence price and quantity.  If the maker can influence price and quantity then he has to be a monopolist or an oligopolist, and in those situations I agree that he has greater power than the consumer, which is why we have antitrust laws.

Edit: side note there are a few axioms in economics, one is that people in sufficent quantity, act rationaly, or more accurately rationaly enough to make predictions of.

Actually that's an assumption, but one that is being challenged very vigorously by behavioral economists.

[katmai]

I'm a member of two unions. Frankly i can't get the best pay without being in those unions, so i tolerate them.

[Magnus]

By "control" do you mean the ability to influence price and quantity?  A generic widget maker is the textbook example of a price taker so none of them can influence price and quantity.  If the maker can influence price and quantity then he has to be a monopolist or an oligopolist, and in those situations I agree that he has greater power than the consumer, which is why we have antitrust laws.

Widgets were a bad example, as they are used to show perfectly competitive markets.
Eitherway, anti trust laws to not do well in a oligopsony, supply side groups, aka unions or farmers orgs do.
Also the need for anti-trust laws shows that the market is not inherently perfectly competative, much as min-wage laws show that labor markets are not perfectly competative.

Edit: side note there are a few axioms in economics, one is that people in sufficent quantity, act rationaly, or more accurately rationaly enough to make predictions of.

Actually that's an assumption, but one that is being challenged very vigorously by behavioral economists.

In undergrad studies it is an axiom.
In later studies, depending what you deal with, it can be attacked, but as it is the underpinning of most economic theories, it is used as a first principle in most discussions. It is taken to be true, quacks like a duck and what not.
Actually I'll concide this point, because either it will lead to a discussion about first principles vs axioms, or the old "what is rationality" argument. Honeslty I'd prefer to stay away from the phil.

[Josquius]

Had this question before.
They are a VERY good thing.
The trouble is in the west most of the stuff that unions push for- good working conditions, fair pay, etc... we already have. They're victims of their own success and have made themselves slightly redundant.
In less developed countries though they've still work to do.
To the question though...well yeah. Of course they're bad for buisness. Paying your workers anything at all rather than just keeping them in cages at night is bad for buisness.

[Grey Fox]

Without Unions none of us (except maybe Garbon) would be here, we'd be too poor, too busy going week to week to afford any of the quality of life we have.

That being said, modern unions are a travesty & nothing more then a mafia.

[Scipio]

Without unions, I'd be living on the family farm outside of Riga, instead of in Mississippi.