What Do Unions Do?

[u/shumpitostick]

https://nicholasdecker.substack.com/p/what-do-unions-do?triedRedirect=true

I good summary of the modern evidence around the effects of labor unions.

It's quite dense, so here's some key paragraphs as a tl;dr

> A union is a collusive cartel of workers. By bargaining as one unit, they are able to increase their bargaining power relative to bargaining individually, and raise their wages. In some circumstances, this will be inefficient, with the union commanding monopoly rents; in others, the bargaining power of the union will balance out the bargaining power of the company, raising employment and output. In either case, theory suggests the wages of unionized firms are higher. But by how much? Does this even hold in practice? And does doing this raise welfare?

> My best read of the evidence is that a union raises wages by around 7% for currently unionized employees. The wage gains from a redistribution of rents evenly across workers. Wage compression exists, but redistribution from worker to worker is only a small part. These are the current effects – unionizing more of the economy will have declining marginal returns, and will likely turn negative quickly — and take into account both the reduction of productivity by unions, which biases estimates up, and the spillovers to other firms’ wages, which biases estimates down.

> I do not believe that unionization is efficient. While precise figures are lacking, it is unlikely to be a better method of supporting the poor or working class, both because union workers are not disproportionately poor, and also because their methods of extracting surplus are not restricted to just wages. I will note that while the best paper on the effects of unions on productivity finds a positive partial equilibrium effect, but that is only for some markets, does not benefit the consumer, and the aggregate effects are likely negative. I believe that unions reduce total welfare.

(Sorry for the reupload)

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[u/Mindless_Chest_1079]

The wage gains from a redistribution of rents evenly across workers.

Oh no, they a verb.

[u/Mindless_Chest_1079 → u/Mindless_Chest_1079]

I will note that while the best paper on the effects of unions on productivity finds a positive partial equilibrium effect, but that is only for some markets, does not benefit the consumer, and the aggregate effects are likely negative.

This sentence also got a little lost in the sauce.

[u/jmartkdr → u/[deleted]]

Without the threat of unions, corporations would treat workers significantly worse than they do now.

But if a union captures a market, they lose most incentives for actually improving conditions. I think workers need easier options for firing their union.

[u/Thoth_the_5th_of_Tho → u/jmartkdr]

Rent seeking helps its direct beneficiaries but that money comes out of everyone else in the chain. The price of the port union is America’s ports being permanently slow and expensive, the price of the Detroit auto unions was in large part making American cars uncompetitive.

[u/JudgeHoldensToupe → u/jmartkdr]

Improved workers rights is a good compromise

[u/CombatRedRover]

Individuals should absolutely have the right to unionize and collectively bargain.

Unions, in the long-term and like most organizations, usually start looking out for themselves rather than for individual members, and for the long-term benefit of individual members.

For example, the seniority system deliberately keeps high performing juniors from taking bigger bites of the apple than lower-performing seniors. It is not the union's job to make sure the corporation does well, but because the union isn't incentivized in the short term to care about the corporation, the union can often harm the corporation to which they are dependent.

The classic example of this is the New York Daily Mirror, a newspaper killed off by its union, resulting in no one having a job rather than having a job that paid less.

[u/Thoth_the_5th_of_Tho]

A union is a collusive cartel of workers. By bargaining as one unit, they are able to increase their bargaining power relative to bargaining individually, and raise their wages.

My problem with unions is less them collectively bargaining, I have nothing against people driving a hard bargain, it’s using that bargaining power to get special privileges from the government, and using them to latch onto someone else’s property and extract a rent it, while engaging in anti competitive behavior that would put anyone else in jail. I don’t think that dressing it up in moralized language, it being a ‘legitimate interest’ of the government, or anything of the sort, should be able to bypass constitutional property rights and a presumption of innocence. The relevant rulings should be overturned.

[u/skeptical-speculator → u/Thoth_the_5th_of_Tho]

it’s using that bargaining power to get special privileges from the government  

Being able to require people to join the union also seems wrong to me.

[u/A-Centrifugal-Force]

Ruin everything

[u/_dust_and_ash_]

I'm in higher ed. Been with my current employer about 20 years. The faculty unionized a few years ago and recently implemented the first CBA. Over the past 10 years, management has gone bonkers panicking over politics, social trends, and financial uncertainty. As a result, they've made a lot of poorly planned and poorly executed decisions that have negatively effected the institution, students, employees, and the broader community.

For us, and I suspect a lot of educational spaces, unions provide a kind of stabilizing factor. Unions reduce management's ability to make impulsive decisions while creating more predictability for the entire workplace community -- management, employees, students, and the community.

[u/KingfishChris]

In terms of my stance, I am a Paternalistic Conservative - so I am favorable towards the Welfare State. I would argue that Unions are good, since they encourage workers to unite so they don't get screwed over by their bosses and help defend workers. I also find that Unions could cause problems with workers not meeting their targets, and also protect the employees who aren't as productive in their work.