What's odd to me is that in many cases people who purport to be "pro free market" are also anti-union. As far as I can see, unions are the free market.
Unions in the US always have specific views that employees often don't share. Everything is about retirement, preservation of existing employees, and supporting other unions.
The problem is that most tech workers want incompetent workers fired, since they make other workers lives more difficult. The field also moves fast enough that credentialization is not particularly helpful. In fact, it can be harmful.
Unions would call for rules like "10% of new projects must be in COBOL" to help older workers that don't want to re-train.
German style unions aren't as opposed to guaranteeing worker performance, I'm not really sure why. That might fly, but keeping it German style would be difficult.
The other option is something along the lines of the WGA/SAG. But individual developers are treated well enough that that isn't seen as worthwhile.
Also there are the problems unions have with corrupt elections and organized crime.
My point is that unions are a mixed bag, and for many tech workers they're a bad deal.
Sure, but my point is that a die hard free market advocate should either disagree with what you just said, or swallow that hard pill and say that the problems with unions are just a necessary evil. Instead, many seem to be vehemently anti-union while still holding to a "the free market will solve everything" point of view.
I'm not saying that unions are perfect. I'm saying that it's inconsistent to admit that they can be problematic while still holding that the free market is the ideal.
You should be careful imputing views to others, then criticizing them, it's easy to miss nuances, then jump on the nuances you missed. For instance, here's a consistent view: "Unions can be forces for good but the government has gone too far in empowering them, creating a monster." I live in Michigan, a state that, no matter how much unions would love to deny it, has been badly damaged by them.
I'm a libertarian, and I support the existence of unions... but I also support the existence of Right to Work laws. A union should have to work to justify itself to its members, not be empowered by law to collect funds from individuals who do not wish to be in the union. Unions should be shielded from punitive violence by their employers... which I wouldn't even see fit to mention except that history says it needs to be mentioned... but if the employer can "just" hire replacements then the simple truth is that the union is negotiating itself right out of its market, and it needs to be forced to face up to that, not hide behind the government.
Unions are part of the free market, and should remain part of the free market. They should come and go as companies do, and the very fact that so many are The Union for their industry and that the same unions are nearly-permanent fixtures of the landscape is significant evidence that they are themselves artificially-created government monopolies, and I view them with the same suspicion I would any other government-created monopoly.
I don't see that as inconsistent at all. Why can't you be pro-free-market and anti-union? You can agree with the concept of a free market, but disagree with how unions currently operate. You appear to be confusing "I hate how unions tend to behave" with "I think unions should be forbidden".
I think unions can do great things to protect the workers they represent, but I hate that many (most?) of them seem more focused on things like retirement benefits and policies that have the effect of making it difficult to impossible to fire bad employees.
I'm pro free market, and against unions, just as I am against fascist political parties. One could analogously say 'the choice to vote oneself into serfdom is the ultimate freedom' - this is the age old 'problem' with freedom, and while I acknowledge that it's a paradox in the ideology of freedom, I also find it hardly ever a problem in practice. Just as with unions, since they invariably turn into choice- and freedom-restricting guild-like entities.
Meeeehhhhh... I'd join a tech union that allowed me to participate in bargaining over working conditions and benefits. I've seen a surprising number of companies (coughAmazoncough) that pay very high base salaries and nice bonuses but completely crap out on health insurance, pension/retirement account, vacation time, work hours, etc.
I've thought that too. The difference seems to be that in general, an entire workforce in a company is either 'union' or 'non-union'. In places I've worked in that had unions, you didn't have a choice as to whether you wanted to join or not - you want the job, you join the union. At the macro-level, perhaps 'the market' for labor has said "union", but the choice is not there for the individual to join or not.
I took at job in a grocery store where the union was on strike - the only reason I didn't have to join the union was because they were striking and I was working directly for the corporate HQ. Pay wasn't bad, though I suspect they were having to pay more to get us scabs to come in through the picket lines :)
I'd prefer union places where you could elect to join the union or not. If they actually lobbied for better conditions for union members, and got those, there'd be more incentive to join - you'd be making the union mgrs work for their jobs, essentially.
The concept you're talking about is the so-called "right-to-work law" (http://en.wikipedia.org/wiki/Right-to-work_law). The problem seems to be exactly what jiggy mentions: it's much cheaper not to join the union, and you still enjoy at least some of the benefits of the collective bargaining. The reality seems to be that right-to-work states have weaker unions, lower pay, and lousier benefits than non-right-to-work states. Whether this is directly related to right-to-work laws or not is not entirely clear, but there's no evidence to suggest that right-to-work actually makes unions stronger or better for their members.
In terms of "making the union managers work for their jobs," is that really a problem right now? I haven't often heard arguments suggesting unions are just collecting dues and doing nothing. Generally the only anti-union argument I've heard is that unions are too powerful and their members have overly generous compensation.
In places I've worked in that had unions, you didn't have a choice as to whether you wanted to join or not - you want the job, you join the union.
Huh. Those sort of closed shops are illegal in the European Union, and have been for years, your right to join a trade union must mean you have the right to not join a union. Needless to say, unions and socialists in EU were not so happy with that.
It's weird to think that part of the USA have more union friendly than the EU
I guess the problem here is that from a purely selfish point of view it is better to not join the union (thus saving dues money) and let other people pay the union to negotiate on your behalf.
Perhaps it would be possible for an employer to offer separate union and non-union contracts with different pay rates (employers can already sort of do this by outsourcing) but the issue here is that not all union issues are about contracts.
For example , a union might negotiate for a factory to provide extra safety measures at the employers cost. All employees union or not would get the advantages provided by this unless the employer provided separate more dangerous machines for the non union workers to use.
While it's not a position I hold myself, I imagine such people would argue that unions are not the free market because of the legal protections and privileges they enjoy.
I'm no expert, but I know that in at least some jurisdictions a union-endorsed strike carries protections against worker dismissal.
It's odd for you to point out one of the legal protections unions have without also pointing out the things they are prohibited from doing, such as sympathy strikes, mass picketing, and (in some states) the ability to require a union shop.
And the law gives company owners protection against personal liability, and taxes companies different from personal income, while it also prohibits employers from having an unsafe workplace, child labor, and practicing various types of discrimination.
We are far from a free market. I agree with the earlier poster - I think a free market enthusiast should also want unions.
A union: some sellers of labor merge into a single legal entity, and it becomes illegal for some purchasers of labor to buy from alternate suppliers. To translate to another field: Apple and MS merge, and now consumers can't use Linux.
Laws enforcing a requirement to purchase from a cartel are about as far from a free market as you can get.
Saying free market supporters should favor unionization is like saying free market supporters should oppose net neutrality. In a free market, net neutrality is certainly something to oppose, but in the world we live in it's necessary to counteract the government granted duopoly held by Verizon/Cable.
At issue is the part "laws enforcing a requirement."
I'm hard pressed to think of any advocate of a free market who wants this law in place.
But a closed shop arose not from legal statute but by an agreement between the company and the union. There's no need for government involvement, except to settle contract disagreement.
In fact, it's quite the opposite! Closed shops are illegal in the US, under Taft-Hartley Act, though they are legal in some other countries. Union shops are legal, except where the states have prohibited that practice.
The question to the audience is, shouldn't a free market advocate want to reduce both the laws which give unions specific power AND those which take power away from unions?
If your concern is about monopoly powers, well, 1) that's a restriction of free trade, so our hypothetical free market advocate might not want those restrictions either, and 2) why aren't they regulated under anti-monopoly laws, rather than specific anti-union laws?
As to the net neutrality issue, well, that's a mixture of morality and an abuse of monopoly power. I believe you're only focusing on the latter issue for now. (And I think our government is and has been entirely too closely intertwined with business, and especially big business, for too long, which has allowed these abuses to grow.)
Is an employer a sort of monopolist? I believe they are. While there are exceptions (IT in the Bay Area during the dot-com era being an obvious one), for many people it is not easy to quit and easily find new employment. Otherwise Nevada wouldn't have a 10% unemployment rate. The problem with monopolies though isn't that they are monopolies, but that they can abuse their monopoly power.
You rightly pointed out that unions can abuse their monopoly power. But so too can companies.
So the modified question to the audience is: shouldn't a free market advocate want to reduce both the laws which give unions specific power AND which take power away from unions, so long as there is no abuse of the monopoly power?
Unfortunately, the easy answer by an anti-union person is that unions are, by definition, an abuse of monopoly power, so this question has no real utility. And I can't come up with a better phrasing.
The question to the audience is, shouldn't a free market advocate want to reduce both the laws which give unions specific power AND those which take power away from unions?
Yes. I'd love to scrap all laws relating to unions and have the law treat them as worker-owned consulting companies.
Is an employer a sort of monopolist? I believe they are. While there are exceptions (IT in the Bay Area during the dot-com era being an obvious one), for many people it is not easy to quit and easily find new employment. Otherwise Nevada wouldn't have a 10% unemployment rate.
Can you explain this claim? What prevents any employee from leaving and selling their labor to another willing party?
Many people find it difficult to leave and find higher paying work, but that just means their current employer is paying them at or above market [1].
Unemployment is (according to Keynesians at least) a mismatch between employee's desired wages and market wages. It has nothing to do with monopoly power. A simple way to test this - is unemployment higher in sectors with a smaller number of firms?
[1] A common reason for this is the accumulation of firm-specific knowledge. That is to say, an employee's value to the employer is X+Y, where X is general knowledge (useful to all employers) and Y is useful only to the current employer. I.e., X is general programming, Y is knowledge of a specific legacy system. This is a situation with both a monopoly and a monopsony - the employer can't find outside employees with legacy system knowledge and the employee can't find outside employers with that specific legacy system.
There are many organizational forms. I wouldn't choose a company. It should be a cooperative, as described at http://www.sba.gov/content/cooperative . "Not all cooperatives are incorporated, though many choose to do so." And "Democracy is a defining element of cooperatives. The democratic structure of a cooperative ensures that it serves its members' needs."
"Can you explain this claim? What prevents any employee from leaving and selling their labor to another willing party?"
Sure. You mentioned Keynesians. Quoting the Wikipedia section about cyclical/Keynesian unemployment: "With cyclical unemployment, the number of unemployed workers exceeds the number of job vacancies, so that even if full employment were attained and all open jobs were filled, some workers would still remain unemployed."
In that scenario, there are few willing parties to sell one's labor to. How is that not structurally similar to a monopoly? An employer in that situation can abuse their monopoly power, and take advantage that the switching costs for the employee to get another job are so high. In short "you take a 5% cut in pay or I fire you and hire the next person who walks in that door." It doesn't even need to be said: "you will take a 5% cut in pay" implies "or you'll have to quit and find another job."
We don't need to be in a Great Depression for that to happen. Or do you think the 2009-2010 spike to 14% unemployment rate for Michigan was all due to people deciding to stay unemployed while holding out for higher paying work?
Using a similar calculus to your model, the switching cost for an employee includes [1] the difficulty of finding a nearby job, or moving and feeling uprooted (and finding new schools, new job for the spouse, etc.), [2] potentially being called a 'complainer' or 'quitter' or labeled 'unable to handle heat' by members of the community or black-balled by industry, [3] the lost wages/opportunity cost between quitting one job and starting the next, [4] the basic stress of having to get up to speed with a new job, meeting new people, and understanding the new social environment, [5] the emotional impact of looking for a job and getting a bunch of 'no's (My Mom got her EE degree, as a 50 year old woman, and tried looking for a job. The many 'no's she got became quite discouraging. People may stay with a job, with its external torments, than deal with the internal.)
You may object, and saying that if a person stays after a 5% pay cut then it shows that the job was priced above market rates. However, I would consider that practice an abuse of monopoly power.
Further, there's a Gambler's ruin issue to quitting, with the employer taking the role of the casino. It might be that a person has a job lined up, moves across the country, only to find that the position is soon no longer there. If that person's unlucky (as what happened with my Dad when I was little), then that could happen twice in a year. (We moved in with his parents for a few years while my parents built up savings again.)
When someone quits, they take the admittedly small chance that they may end up sleeping in a car or other situation drastically worse than what they would had had, should they stayed. While the likelihood that the employer will have correspondingly large negative impact when an non-key employee quits is significantly, even laughably, smaller.
This too makes the employer/employee relationship more unbalanced, and so open to abuse by the side of the employer.
"A union: some sellers of labor merge into a single legal entity, and it becomes illegal for some purchasers of labor to buy from alternate suppliers."
I have seen references to this many times. Is this true in the States? I was once a teacher (not in the States) and did not have to sign up to any union. Apart from lawyers and medical personel and maybe a few other "special" professions you don't have to belong to a union to offer your services - at least here in the EU.
Yes. It is illegal for the employer to fire union workers and replace them with non-union workers. It is illegal to hire new workers at wages lower than the union wage, and in many states to even hire non-union workers.
Unionization is by employer, not by profession, though a few professions (e.g. managers) do lack the ability to gain legal protections by unionizing.
They obtain a monopoly or oligopoly through market power.
So if a union lacks market power, an employer is legally free to fire the union employees and replace them with non-union employees at market wages?
The problem being that without unions, labor becomes subject to oligopsony buying power and Ricardo's Law of Rent kicks in.
Can you explain this claim? While it's certainly true in a few narrow fields (chemistry/biotech, various specialized corners of academia), it's hardly true in the economy at large. In what fields do you believe an oligopsony is present?
In any field in which there is a concentration of employers relative to employees. Which is to say: most of them.
Quoting from Wikipedia: "The Law of Rent states that the rent of a land site is equal to the economic advantage obtained by using the site in its most productive use, relative to the advantage obtained by using marginal (i.e., the best rent-free) land for the same purpose, given the same inputs of labor and capital."
Where "land" is taken as capital, equipment, and/or alternate business opportunities, the employee's wage-bargaining leverage, in the absence of collective bargaining, is what s/he could make by going elsewhere and starting up a new firm. Where no new business opportunities exist, wage bargaining falls to subsistence levels (employers will pay employees the bare necessities for staying alive).
In the economy at large, the situation still remains true. An employer need pay an employee no more than that employee could claim at another job (or by going into business for him or herself), given the employee's skillset.
Given that skills tend to wed to experience, should the employee transition to a different line of work (at which they are less skilled), unless there is a peculiarly high demand for that work, their wages will fall. Also, the employer's surplus (that is, productivity above wages) is governed by the Law of Rent.
Given collective bargaining, through the threat of withholding labor (with skills that, collectively, the employer would be hard-pressed to replace), a negotiation for total compensation (wages, hours, benefits) in which more of the employee's surplus is distributed to the employee may be arranged.
I don't necessarily disagree with the argument that a free market enthusiast should desire unions. I disagree that a free market enthusiast should desire unions in their current form, which we both agree is far from a free market.
In other words, I don't think it's unreasonable to say "Device X would be desirable in ideal situation Y, but as the current situation is far from ideal, device X currently does more harm than good".
And again, I don't necessarily personally believe that to be true of unions.
Unions have very little to do with free markets, and they typically do not actually benefit everyone in labor (they benefit some folks who are already in the union). Because of the way our labor laws work unions, in the instances where they are prevalent, tend to end up being a monopoly on labor for a given industry. This creates distortions in the market just as great as monopolies of capital. Also, unions tend to erode meritocratic systems of compensation and advancement and replace them with systems based on seniority and union membership, which tends to disadvantage the business, customers, and most workers except those few at the top of the seniority ladder.
Let's say you are a tech worker in silicon valley. Your wages and the sorts of jobs you have access to are dependent on the sorts of companies in existence, their needs, and your skillset. If you have a highly sought after skillset then you will be courted by multiple companies who will try to woo you with jobs that you find desirable and competitive compensation packages. Let's say instead you are a dock worker in long beach. In that case your compensation and career opportunities are far more dependent on your union membership and seniority.
Certainly playing corporate politics can also have an effect, depending on the company, but that's also true in union shops as well.
Very few unions have a mandatory favored nations policy. If you were significantly better at dock workering, such that a company sought you out, they can easily pay you more. That being said, many union labor positions don't have a wild variety of skillsets. They often do need protection.
Most people claiming to be "pro free market" still oppose cartels. A cartel is the banding together of multiple companies or parties in an agreement to work together to raise prices.
A union is a cartel. I don't mean that in as a normative statement. Unions may still be worth having, even if they are a cartel in that they workers band together to raise what they charge for their labor.
But, that is the logic by which many "free market" advocates oppose unions.
Well, "pro free market" is usually (and silently) taken to mean "whatever benefit me as an employeer and screw the workers".
As in: "if I want to have people working 20 hours per day, with no overtime for less than minimum wage, I should be FREE to do so, and people are FREE not to work for me".
That's the kind of "FREE" the free market stands for usually.
Of course, when all employers follow the same idea, or when people are desperate to find any work to survive (e.g because of a lack of jobs in their city), the latter point about "choice" becomes moot.
This train of thought leads to the philosophy of freedom: positive freedom (free to) and negative freedom (free from). I think the best way to think about freedom is not as a binary relationship (X is free from/to Y), but as a ternary relationship (X is free from Y to Z).
As kylebrown noted the distinction between 'free from' and 'free to', your interpretation suggests that the free market is the freedom to screw everyone you could manage to. I like this description, but the question is: is it net negative for people / production / indvidual?
The problem is that most tech workers want incompetent workers fired, since they make other workers lives more difficult. The field also moves fast enough that credentialization is not particularly helpful. In fact, it can be harmful.
Unions would call for rules like "10% of new projects must be in COBOL" to help older workers that don't want to re-train.
German style unions aren't as opposed to guaranteeing worker performance, I'm not really sure why. That might fly, but keeping it German style would be difficult.
The other option is something along the lines of the WGA/SAG. But individual developers are treated well enough that that isn't seen as worthwhile.
Also there are the problems unions have with corrupt elections and organized crime.
My point is that unions are a mixed bag, and for many tech workers they're a bad deal.