Kachi wrote:
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You're making the mistake that most people make. Labor is a service that is purchased by an employer. The employer is the "consumer" of labor, just as you are a consumer when you go into a store.
Wow, do you mean to say that competition in the labor force is good for the employer? How insightful. Well thank god. I was so worried about those struggling employers.
You're still only seeing one side of the equation. Laborers compete for jobs, but employers also compete for labor. Both sides work at the same time. One can drive labor values down, the other drives them up. The assumption of the market is that over time, these forces balance out. Too much competition for the same job drives down the value of that job. This in turn reduces the attractiveness of that job to the worker, and he shifts to doing something else where there is more demand, in turn receiving a higher wage.
This process ensures that labor is paid what it is worth to the economy. This value is based on the productive output that the labor generates and not via some other artificial method. It also ensures that labor is doing what is most needed within the economy. What's missed by most labor advocates is that without allowing the supply/demand forces on the labor market to work, you stop the mechanism that automatically ensures you don't get too far away from the "sweet spot" from working.
By attempting to artificially correct for a short term imbalance between demand for a skill set and the supply of that skill set, unions perpetuate that imbalance. Not only that, but they make it worse over time by artificially making that skillset more attractive to labor. Had the natural market forces been allowed to operate, that job might be worth $10/hour, but is now paying $20/hour. Thus, you'll end up with a greater imbalance over time, since more people will seek out that job. Perhaps there's an alternative job they could have worked that paid $15/hour. The worker would have been better off in the long run working that job. The economy would be better off if he worked that job. But instead he's going to choose the job that's "worth" $10/hour to the economy because it's artificially been inflated to pay $20/hour instead.
That's a bad thing. It's bad for the worker (in the long term). It's bad for other workers. It's bad for employers. It's bad for consumers of the goods produced at those artificially inflated prices. It's bad for the country as a whole since our products can't compete with other nations.
It's just bad all the way around...
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The problem is that employers don't tend to increase the wages for jobs that don't require high levels of skill (the kind you have to seek independent certification/degrees in). Why would they?
They will if there aren't 10 times more people wanting to work that job then there is need for that job. The reason there are more people wanting the job is because it's been artificially inflated via a union process.
Pay minimum wage for that job and the demand for it will drop. Those workers will move elsewhere. Over time, the match between job requirements and labor skill sets will balance out and the wages for that job will rise to their natural levels.
I think the key point here is that we should be adjusting our labor to meet the demands of the economy, and not the other way around. Labor should seek out the jobs and opportunities that employers make available. Do that and employers will make those jobs. It's in their best interest to do so.
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If they offer $1 more an hour, are they really going to attract workers of a substantially greater quality? Not likely, and they really don't know how well a worker is going to perform across the board no matter how well that interview goes or how good their references are. They may do worse than the person with no experience or references. There's no reliable method for determining how well a laborer will perform. It's a crapshoot, and employers know this.
Yes. But here's the deal. If the two sides of the equation are balanced, then both sides meet in the middle with neither having an advantage over the other. Labor can make the employer compete for their skills, and employers can make labor compete for their jobs. When both are in balance, then an "ideal" result occurs. When they are out of balance is when you see problems.
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From the employer's vantage, it's always better to offer as low a wage as possible while not offering substantially less than competing businesses.
Of course! But from the workers perspective, it's always better to work the minimum amount while demanding the highest wage possible. One "failure" is no better then the other. When both sides are in play, they balance each other and both sides get a fair deal. Each would love to get more, but as long as natural market forces are determining the end pay rates, then it's "fair" by definition.
Remember. Labor can play this game too. But not by using artificial controls over a group of laborers to strike and demand more pay. That's a collective process that violates the free market methodology. Rather, laborers individually force their employers to compete for their skills. This does requires that those laborers have skills that are "in demand", but it's the union process that ensures that they aren't in demand. A free market solution over time ensures that the balance of supply and demand is reached.
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It's not a matter of paying people for the quality of the work they do. It's a matter of paying people for how replaceable they are.
Absolutely. So don't make yourself replaceable. Unions make their members replaceable by inflating their cost and their numbers beyond what the demand for their jobs is naturally. The union uses unfair practices to force themselves on the employer, but they *also* do this to their own members. By enticing them into a job market that wont support them naturally, the laborers are also forced to continue to support the union in order to secure their jobs.
Without a union, they'd have no need of a union. That's the great irony...
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It's easy to offer as low a wage as possible because the competitors are doing the same thing. I know, to you, this sounds like it's how the system is supposed to work. You think unions artifically raise wages. Well to me, it sounds like employers are trying to artifically lower wagers. I know, why would they do that?
But employers don't do this artificially. When they do, we call that a violation of anti-trust laws and shut them down. See. There are laws in place that prevent the employer from doing this. We ought to have similar laws preventing it on the union side, but for some reason, we don't.
Unions are monopolies of labor. Actually, they're worse then monopolies. In a monopoly, the supplier of goods only has control as long as he actually controls the supply of that good. His ability to artificially inflate prices is a direct function of his ability to artificially reduce supply. Unions control the supply of labor, but they don't have to maintain that artificial reduction of supply (aka: a labor strike). They can force the employer to sign a contract promising them set wages, hiring rates, benefits, etc that apply even when the supply of labor is increased. They can also add stipulations that the employer can't hire someone who isn't working for the union, or if he does, he has to pay them the same wage (so there's no benefit to the employer to do this).
And the truly amazing thing is that many states actually have laws that support this rather then oppose it. They're called "prevailing wage" laws. Any government contract work must pay labor union wages to anyone they hire whether they are in a union or not. This is yet another layer of artificiality designed to ensure that businesses that hire union labor can compete with those that don't.
It's also unfair and should be illegal. But oddly, isn't...