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<blockquote data-quote="Serf" data-source="post: 1281706" data-attributes="member: 50254"><p>The thing is, if one were a hardcore, one might argue that private-sector unions are merely bargaining against everyone who buys the products they produce, in an effort to drive up prices. Unions are trying to set industry-wide uniform wages, not argue with the owners of a particular firm about how to divide that firm's profits based on this year's results. That would result in different wages for workers at different firms, which is one thing unions generally don't want. In a capitalist world where competition is always driving down prices and profits, and where firms have to compete on efficiency, you'd think the only way unions could make more money for workers is by raising prices for everyone.</p><p></p><p>In fact, the world isn't ideal, there's a whole lot of wiggle room for firms to increase profits by driving down wages, and, private-sector unions provide workers with a counterweight to management power in bargaining over compensation. And the evidence is very clear that, while they may also lead to reduced investment, unions provide a wage premium for their workers in the firms and industries where they operate. If you had a situation in which the private sector was largely unionised and the public sector wasn't, you'd expect to see private-sector workers making more than public-sector ones for similar jobs.</p><p></p><p>In fact, however, we don't have such a world. We have a world in which private-sector unions have shriveled while public-sector ones have grown. And I think it's pretty clear how this came about. Back in the 1940s and 1950s, the standard jobs that provided decent salaries and job security for the working and middle class were all pretty heavily unionised, whether private- or public-sector. Auto workers were unionised, police officers were unionised, newspaper reporters were unionised, postal workers were unionised. In my family, one branch was in the (private) ladies' garment workers' union, the other branch was in the (public) teachers' union. (Then there was my Great-aunt Marcia, who was in the Screen Cartoonists' Guild, which Walt Disney claimed was a Stalinist front group taking orders directly from Moscow. She used to draw a mean Popeye.) In that generation, people who worked in government jobs would have reacted angrily to the idea that they didn't have the right to organise and demand better wages the same way their private counterparts did.</p><p></p><p>Private-sector unionisation began to decline in the 1970s for a reason: private industry had an incentive to seek a non-unionised labour force and to break union control wherever possible, in order to increase profitability. So the auto and steel industries shifted factories to right-to-work states, leading to the tautological result trumpeted in papers like this one that unionised areas have lower rates of investment than non-unionised ones. The government doesn't have such a clear incentive to seek low-cost non-unionised labour. Moreover, a lot of governing tasks can't be outsourced to cheap non-union locales; you can't move an elementary school to Arkansas because the unionised teachers in New Jersey are too expensive. So government unionisation has risen from 23% in 1973 to 36% today, while private-sector unionisation has declined from 24% in 1973 to 7% today. In this environment, it's bizarre to argue that private-sector unions (which are withering) are legitimate, while public-sector ones aren't. It might be interesting to consider the merits of an economy with 50% private-sector unionisation and no public-sector unionisation at all, but that's not an economy we could conceivably get at this point.</p><p></p><p>Taken from <a href="http://www.economist.com" target="_blank">www.economist.com</a></p></blockquote><p></p>
[QUOTE="Serf, post: 1281706, member: 50254"] The thing is, if one were a hardcore, one might argue that private-sector unions are merely bargaining against everyone who buys the products they produce, in an effort to drive up prices. Unions are trying to set industry-wide uniform wages, not argue with the owners of a particular firm about how to divide that firm's profits based on this year's results. That would result in different wages for workers at different firms, which is one thing unions generally don't want. In a capitalist world where competition is always driving down prices and profits, and where firms have to compete on efficiency, you'd think the only way unions could make more money for workers is by raising prices for everyone. In fact, the world isn't ideal, there's a whole lot of wiggle room for firms to increase profits by driving down wages, and, private-sector unions provide workers with a counterweight to management power in bargaining over compensation. And the evidence is very clear that, while they may also lead to reduced investment, unions provide a wage premium for their workers in the firms and industries where they operate. If you had a situation in which the private sector was largely unionised and the public sector wasn't, you'd expect to see private-sector workers making more than public-sector ones for similar jobs. In fact, however, we don't have such a world. We have a world in which private-sector unions have shriveled while public-sector ones have grown. And I think it's pretty clear how this came about. Back in the 1940s and 1950s, the standard jobs that provided decent salaries and job security for the working and middle class were all pretty heavily unionised, whether private- or public-sector. Auto workers were unionised, police officers were unionised, newspaper reporters were unionised, postal workers were unionised. In my family, one branch was in the (private) ladies' garment workers' union, the other branch was in the (public) teachers' union. (Then there was my Great-aunt Marcia, who was in the Screen Cartoonists' Guild, which Walt Disney claimed was a Stalinist front group taking orders directly from Moscow. She used to draw a mean Popeye.) In that generation, people who worked in government jobs would have reacted angrily to the idea that they didn't have the right to organise and demand better wages the same way their private counterparts did. Private-sector unionisation began to decline in the 1970s for a reason: private industry had an incentive to seek a non-unionised labour force and to break union control wherever possible, in order to increase profitability. So the auto and steel industries shifted factories to right-to-work states, leading to the tautological result trumpeted in papers like this one that unionised areas have lower rates of investment than non-unionised ones. The government doesn't have such a clear incentive to seek low-cost non-unionised labour. Moreover, a lot of governing tasks can't be outsourced to cheap non-union locales; you can't move an elementary school to Arkansas because the unionised teachers in New Jersey are too expensive. So government unionisation has risen from 23% in 1973 to 36% today, while private-sector unionisation has declined from 24% in 1973 to 7% today. In this environment, it's bizarre to argue that private-sector unions (which are withering) are legitimate, while public-sector ones aren't. It might be interesting to consider the merits of an economy with 50% private-sector unionisation and no public-sector unionisation at all, but that's not an economy we could conceivably get at this point. Taken from [url="http://www.economist.com"]www.economist.com[/url] [/QUOTE]
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