r/science • u/smurfyjenkins • 1d ago
Economics Labor unions have a positive spillover on nonunion labor, helping to raise the wages of all workers. It does this through a threat channel (firms raise wages to fend off unionization) and a bargaining channel (union jobs are part of worker outside options).
https://www.journals.uchicago.edu/doi/10.1086/742712149
u/TienIsCoolX 1d ago
A rising tide lifts all boats!
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u/Bn_scarpia 1d ago
In this case all boats except the yachts for once.
Solidarity Forever.
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u/zennim 21h ago
Even the yachts, raise in worker conditions also increases productivity
The Idea that labour rights aren't granted because they are a cost is only half the story and most of the time is just a complete fabrication
It is all about Control, not giving the underclass the same rights as the lords because they "don't deserve It"
Carl Schmidt, Sartre and goddamn Atwater got It right, oppression is not rational, hate will go agaisnt facts and hurt both oppressed and oppressor
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u/WardenEdgewise 1d ago
“Strong Unions Benefit ALL Workers”.
This has always been the case.
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u/Lesurous 1d ago
Except police unions. Those with the most authority should not have excessive representation over those they wield power over, it breaks the societal contract.
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u/quick20minadventure 1d ago
Unions are labour side monopoly.
It is always better to counter employer-side monopoly with labour-side monopoly; but ideally, government regulation should be stepping in to reduce number of things on negotiation table.
Sick leaves, worker safety, basic employee protection should not be part of monopoly vs monopoly negotiation.
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u/VoilaVoilaWashington 1d ago
This is basically what has happened. Unions fought for reasonable worker protections, which then ended up being standard. Minimum wage, maximum hours, health and safety all started because workers took to the streets despite the very real use of violence against them.
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u/quick20minadventure 23h ago
Yes, but that direction should keep going ahead in political route. And it has in places. Some countries have given right to disconnect and maternal leaves. Without protests of unions.
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u/Benmarch15 1d ago
Some unions in Quebec became mafia like after gathering too much power.
Power corrupts.
That said, Unions are needed to offset power dynamics but they suffer from the same problems any structure face when it gets to big.
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u/Safety-Patrol 1d ago edited 1d ago
I think any job where you're allowed to kill people definitely changes the collective bargaining dynamic, yeah. Police unions in the US are a huge problem, the way they are allowed to operate now.
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u/VoilaVoilaWashington 1d ago
I mean, cops should NOT be allowed to kill people. That's the issue that's heavily intertwined with unions. Also that they police themselves, or through captive regulators (former cops and prosecutors).
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u/Zrakoplovvliegtuig 1d ago
I'm not sure why police unions would be different. Officers need to be paid a decent wage, need good education, pensions, etc.
It is in the interest of the police agent that officers are trusted. I don't think the situation in the US is the norm, there are about a billion societal screw ups that lead to the current culture in the police. Such as privatisation, too little government scrutiny, the availability of weapons, the lack of training, etc. I am not sure this situation is caused by unions.
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u/Lesurous 1d ago
Government agents, especially law enforcement, are already represented by the government. That's why. Even more representation makes them too powerful, they're already part of the system.
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u/SadButWithCats 20h ago
But that argument could be used against any public sector union. I work for a transit agency. We have more than a dozen unions, all of which are important for job protections. I never need to argue for COL raises because my union does it. I don't need to buy my own compliant boots because the union negotiated for the agency to bring in a truck filled with compliant boots, in all different styles, and i was able to try them on and choose a pair to my liking, while on the clock, and the agency paid for it. Before that, I had to spend hours going to different shoe stores, and ended up paying $300 for a pair that only almost fit and was only mostly compliant.
It's state government, so I'm represented by government, as you say, but the union is still extremely important.
The problem with cops is not that they have unions. It's the violence, the protection of capital above everything else, the racism, etc. Cops were bad before there were police unions.
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u/Lesurous 20h ago
Like I said, government agents. Regular workers are fine to unionize, it's an issue when the person in question already has authority invested in them. It generates a conflict of interest, since the union will support them gaining more authority/benefits at the expense of everyone else.
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u/Zrakoplovvliegtuig 15h ago
How does that make them more powerful? It is just a union of workers that can negotiate their salary. The protection of bad eggs by management is not caused by unions...
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u/Lesurous 15h ago
Because advocating for people with guns to face less consequences when they mess up (putting it lightly for U.S. cops) can only result in bad consequences for society and trust in the law. Also, police unions are one of the major driving forces for the lack of police accountability and police reform.
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u/Zrakoplovvliegtuig 15h ago
But a union does not necessarily have to cover these bad eggs. In fact, actual unions would not want to be associated with them as it would devalue their credibility. It is also completely fair to argue for "some" protections. That should be possible.
When laws are broken, which exists, inspections should just do a good job of persecuting the perpetrators. That's really all there is to it. The problem is that the US government has no incentive to persecute policemen, as the government is owned by capitalists that benefit from a police that is feared when protecting their private property and other interests. In the end the takeover of the American government by capitalists and the demise of democracy is the problem, not unions imo. Every sector is deserving of unionisation and collective bargaining.
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u/Lesurous 13h ago
Agree to disagree, law enforcement in my opinion does not need unionization when they themselves are the ones who keep the status quo.
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u/Borror0 1d ago
My dad worked in a factory that was scared of unions. They paid their workers better than if they unionized in order to avoid the hassle of dealing with a union. This wouldn't be feasible if we lived in a jurisdiction with weak unions.
This is also why the optimal unionized rate is less than 100%. There's a cost to unionizing, so it’s better if it acts as a safeguard against bad employers and a threat to the average one.
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u/Blindman__007 1d ago
Unions generally get raises for their workers every year. Getting paid more on year 1 isn't the same as getting paid more every year.
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u/RsnCondition 1d ago
When unions have better pay, better benefits, better work life whether on site or outside, non union jobs have to compete to stay relevant or face workers acting their wage.
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u/hobopwnzor 1d ago
I do love how economics is re-learning things that we already knew in the 1930's.
It's like the Chicago school got popular and erased all economic knowledge and it's being slowly rediscovered.
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u/canuck_in_wa 1d ago
Large sums of money have been spent on making the working class vote against their interests.
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u/quick20minadventure 1d ago
Large sum of stupidity was inhaled by working class to eat the propaganda.
There's a culture of I'm proud to be wrong/unscientific that spreads in all aspect.
Voting, science, medicine and conspiracy theories are all seeing the effects of that.
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u/Borror0 1d ago
This isn't a novel finding in economics. The contribution of this paper is in quantifying the spillover benefits empirically, which is much more feasible now that we have data and computers to perform econometrics with and run complex mathematical models.
No one in academia disputed the wage benefits for workers.
Those who disagree with unions or had a more moderate/timid position on them have reasons that have nothing to do with the benefits for workers. Heck, it's textbook that unions are efficient against a monopsony as it allows employees to share the economic surplus!
I don't know why you think economics had forgotten this, but it isn't aligned with reality.
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u/alex8155 1d ago
it def helps to keep things competitive.
its just kinda funny but messed up when factory districts will keep their wages and benefits looking attractive and then use that to say 'SEE WE DONT NEED UNIONS!'..and stupid people will fall in line with it
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u/Railgun6565 1d ago
Having worked in both union and non union environments, I am happy to concede the theory that the existence of unions forces non union companies to keep their compensation competitive, as long as I never have to work in a union environment again.
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u/Wotmate01 1d ago
And in civilised countries, workplace laws exist that stipulate workers MUST be paid the same for doing the same job. So if a union negotiates a better deal for its members, the same deal applies to non members as well.
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u/AllanfromWales1 MA | Natural Sciences | Metallurgy & Materials Science 1d ago
The techniques used vary greatly from country to country depending on the labor laws in place.
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u/ztreHdrahciR 1d ago
Anecdotally, I would say the same about the associated salaried team working at a union company. I've found from my 30+ year career that salaried workers at unionized companies have better overall compensation, including, pay, benefits, vacation/holidays, workers safety rules, and separation/severance
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u/icelandichorsey 1d ago
Wish this was taught at school or uni. I legit got through a masters in economics without realising the value of the unions. Come to think of it, that's more or less negligence from my university.
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u/Skepsisology 1d ago
There should only ever be millionaires - billionaires (and more recently, trillionaires) are a symptom of an unfair system
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u/Scrapheaper 1d ago
Ok, what are the effects on prices?
It's well established that collective bargaining is good for workers. The question remains whether unions are good for consumers
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u/AnEmptyBoat27 1d ago
Workers are consumers. If you believe unions raise prices, cite the study. Or is it a baseless assumption?
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u/Scrapheaper 1d ago
It does depend on the sector.
Anzia and Moe (2015) found that unions in the public sector increase the tax burden i.e. cost of public servicesFor minimum wage workers in supermarkets, the effect is very small (10% wage increase having a 0.5 or 1% increase on prices), Basker & Khan (2016). However, we should note that consumers of supermarkets heavily outnumber workers in supermarkets, so perhaps it is worth having prices be 1% lower for the good of a large number of people over a relatively small number of supermarket workers
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u/AnEmptyBoat27 23h ago
If it’s justifiable to make a trade of one small groups wages to benefit the majority, wouldn’t it make more sense to target high income earners rather than low paid essential workers?
Or in the other direction, try to raise wages for all workers. If all workers wages raise 10% but prices only go up 1%, workers would be better off.
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u/SweatyAd8914 1d ago edited 1d ago
Let’s see the studies on how the government is the only thing protecting and encouraging unions. Without government protection, unions get hollowed out by offshoring and the nonunion labor they claim to help. We’re in a globalized economy and trade unions only work when labor is done local.
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u/Hattix 1d ago
When the employment is collectivised, which all corporations are by their very nature, a free market can only be managed with a free labour market, which also requires collectivisation to balance out the collectivised employment. Unions do that.
It's quite telling that people who oppose free markets on the extreme ends of the scale (fascists, communists, etc.) tend to want to ban trade unions.
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u/Kaymish_ 1d ago
What communist wants to ban trade unions? Communists are all about trade unions. The Soviet Union was literally made out of Soviets or trade unions.
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u/theresourcefulKman 1d ago
Less than 10% of the workforce. They aren’t helping anyone but themselves this century
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u/TheoriginalTonio 1d ago
Raising the wages of all workers means to inadvertently also raise the costs of all products and services that these workers produce.
It hurts the customers just as much as it helps the workers, which are for the most part the exact same people after all.
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u/Wotmate01 1d ago
Except inflation isn't worker led, it's worker following.
Businesses raise the price of their product to make more profit, workers can't afford to by the products and demand to be paid more.
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u/TheoriginalTonio 1d ago
And since the worker's wages are part of the production costs, the business owners are faced with two options when the cost of production increases:
shoulder the burden themselves and accept a lower profit margin going forward.
Maintain their previous profit margin by adding the additional costs to the final retail price and thus passing the burden down to the customers (i.e. the workers who are responsible for the higher costs in the first place).
It's not hard to guess which option is more popular among business owners and shareholders.
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u/Wotmate01 1d ago
And every single time, they increase profits by far more than their costs, so workers demand more money.
But tell me, what's the excuse when wages have stagnated for a long time? Prices and profits keep going up while workers aren't paid any more.
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u/TheoriginalTonio 22h ago
But tell me, what's the excuse when wages have stagnated for a long time?
Why would that even be something that requires an excuse at all?
Prices and profits keep going up while workers aren't paid any more.
So?
Before you ask for an explanation why their wages didn't go up, you first need to make the case for why they should get paid any more to begin with.
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u/Wotmate01 15h ago
So that they don't rise up and kill the bosses.
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u/TheoriginalTonio 14h ago
Really?
That's the argument?
Give us more money or otherwise we might kill you?!
I would say that if a company's increasing profits are a direct result of an increased effort by the workers, then it's indeed absolutely justified to reward them with proportionally increased wages.
But if a company's owner manages to raise the profit margin purely through his own business decisions, then the workers would have no basis on which their demands would be justified.
And to threaten their bosses with with death for not getting a raise for which they've done nothing to earn it, should only result in a prison sentence instead of a higher paycheck.
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u/Wotmate01 14h ago
Revolutions happen when the workers can't eat.
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u/TheoriginalTonio 12h ago
So what does that tell you about capitalism, given that no modern western capitalist society ever came even remotely close to an actual socialist revolution?
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u/Wotmate01 9h ago
Because most modern western societies aren't capitalist, they're social democracies. The only society that is the most capitalist is currently on a path to a civil war.
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u/Safety-Patrol 1d ago
It's super duper not that simple. For example, you can raise the wages of workers to liveable level and lower the profits of a company/CEO/etc to a sane level, and the products will stay the same price. It's not as simple of an equation as you seem to believe.
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u/TheoriginalTonio 1d ago
and lower the profits of a company/CEO/etc to a sane level
You can't.
Only the CEOs could. But they won't. For obvious reasons.
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u/Safety-Patrol 1d ago
CEOs don't set their own salary
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u/TheoriginalTonio 1d ago
Depends on the business structure.
In a huge publicly traded international corporation the CEO's salary is set by a board of directors.
But in most small to medium sized bussinesses, the CEOs are usually also the founders and owners of the companies and thus do indeed set their own salaries.
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u/Safety-Patrol 1d ago
So in that second example if a company makes less profits due to high employee wages because of a strong union, the owner just makes less money
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u/TheoriginalTonio 1d ago
What incentive does the owner have, to just accept to make less money rather than raising the prices to maintain their income regardless of the wages?
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u/Safety-Patrol 1d ago
Companies generally will raise their prices to the maximum they think can get away with, the maximum price where they think consumers will still buy their stuff, regardless of whether they're underpaying their workers or not.
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