Labor Unions

Unions

are private sector unions actually worse than mega corps? are public sector unions actually worse than politicians and their unelected bureaucrats that lead govt agencies?

in theory, a mega corp could be awesome, moral, productive, etc. but similarly, in theory, a union could be fine and reasonable.

there’s a massive power imbalance and the companies offer unfair contractual terms. and there’s essentially collusion where all the big cos offer unfair terms (while also lobbying for barriers to entry) so you have little choice.

this applies to individuals too e.g. trying to buy stuff from an industry that offers shitty deals and problematic contracts. maybe we should have some collective bargaining for that…

there are difficulties, e.g. i might not have the same priorities as the group. but trying to deal with companies without having power tends not to work well in various contexts (sometimes being an individual customer does work fine).

individual people are mostly clueless and disorganized. their ignorance is often exploited including by managers who do not have their workers’ best interests at heart. having an organization to try to help and educate workers, and negotiate on their behalf with more leverage, makes conceptual sense. and that’s different than particular historical tactics like violence against people who don’t participate in strikes, or being very hostile to any workers who don’t join the union and pay membership dues and increase its power by letting it represent them. coercing people to participate in a union, who don’t want to, is really bad (but a lot of the actions of mega corps like Amazon and Facebook are also really bad – maybe similarly bad or even worse? so maybe focusing complaining on the bad actions of unions is a bias. or maybe big corps were better in the past but have gotten worse, so we should update our views to recognize how bad they are and become more open to counters like unions.).

in Atlas Shrugged, Rearden doesn’t have trouble with union issues b/c he treats his workers well including paying them well. until the society gets really corrupt and the govt sends minions under the guise of workers who want a union.

also, i don’t see libertarian types talking about how evil Amazon and Facebook are and what we can/should do about it and offering alternatives to unionizing. (admittedly i haven’t looked a lot.) instead I’ve seen them e.g. defend deplatforming as the free actions of private companies and therefore non-censorship or praise rich businessmen like Bezos who are assumed to deserve their wealth (something I have a lot of skepticism about – and they ought to too since Bezos got that wealth in a non-free market. in other contexts, they know and say that we have a mixed economy, but then somehow when judging Bezos they act like his wealth proves his merit, and don’t consider that he might have similarities to James Taggert or Orren Boyle). what do libertarians want instead of unions? a free market? sure that would help some, e.g. by making it easier to start new businesses instead of working for an awful company. but i don’t think it’s a complete or adequate answer. if the government changed the laws in a way more free market direction, we’d still have big corporations with a lot of terrible managers and abusive policies. (many small companies are also bad, btw. but small companies are more varied. there’s more broad similarity between big companies in a whole industry or even just the whole economy being bad in similar ways.) do libertarians have any better answers than “lobby for a freer market then wait for market forces to make things better”? is it just because they are so biased in favor of business against labor that they deny the problems exist? they may own the reason.com domain (and praise rationality) and be less popular (i.e., members of a smaller group) but that doesn’t stop them from being super tribalist.

Related:

I think this is a good thing. Informing people and being transparent is a good thing.

What happens if most companies do not want to negotiate with these organizations but directly with the employee? One guess is that competing companies would get started that treat their employees better and the better employees would move to those companies over time.

How do you mean? What kind of “actions of mega corps” and “terrible managers and abusive policies” are you talking about? Do you mean lobbying and political influence? Could you give examples?

Have you read the deplatforming and fraud examples and explanations that I and others have posted at curi.us and here? Have you read Curiosity – Crony Capitalists ?

But the example I primarily had in mind, for this post, is Amazon’s treatment of its low-skill labor. Are you familiar with that? That’s more relevant to unionizing than examples about treatment of users or customers.

Several years ago there was a group trying to unionize the employees where I worked (a large tech company). Then, as now, I thought it was a good idea in theory to increase our bargaining power with the company. The implied goal of the union, which I supported, was to secure a larger amount of money and benefits for employees. They had a discussion list I joined and participated on some.

As I investigated I developed several objections to the specific union that wanted me to join. None of my objections were about the idea of a union, or getting more pay & benefits by increasing market power through collective bargaining. And as a practical matter I wouldn’t guess the objections are all applicable to most or all existing unions (but I don’t know / haven’t researched). They were applicable to the particular union I was considering joining, and I would guess they could represent common themes/problems with unions as they actually exist in the world.

My main objections were:

  • Bias toward equality. While it’s true they wanted employees to receive an overall increase in pay/benefits, They also clearly wanted employees’ incomes to be more equal across the company instead of more reflective of the value of each employee’s work. And they were opposed to systems that tended to empower individuals based on their choices, like defined contribution plans & health savings accounts. Instead they favored plans with less personal choice and uniform guarantees.
  • Bias toward seniority. The main source of inequality among employees that they did support was inequality based on length of employment. They wanted whoever had been there longest to get the best positions, most pay, and best job security.
  • Leftist political tribalism. They wanted to use the union organization and some of the union dues to support leftist politicians and leftist causes.
  • Hostility and Zero Sum outlook. They couched their purpose in terms of a “fight” or “struggle” rather than a negotiation where everyone could win. They were explicitly about taking money from managers and shareholders to give to employees, rather than seeking changes where everyone is better off.

I didn’t join the union. Neither did enough other people so the effort eventually died.

I don’t know. Not recently at least. I will read those links.

I am not particularly familiar with the treatment of Amazon’s low-skill labor. I did watch the Chris Smalls video on hight speed (and not with full attention) that you posted though. It seemed bad. But that is pretty much all familiarity I have with Amazon and their workers.

I think what I am most confused about is that I’m not sure how unions can be helpful in dealing with:

(Maybe I misunderstood you on this point though.)

From how I understand it, from a free market perspective, unions could roughly do what you wrote:

But maybe some companies do not want to negotiate with unions. If Amazon doesn’t want to negotiate with a union, what help, other than educating worker, can unions have from a free market perspective?

I will read what you recommended. Maybe I find some answers there.

But maybe some companies do not want to negotiate with unions. If Amazon doesn’t want to negotiate with a union, what help, other than educating worker, can unions have from a free market perspective?

The labor supply for Amazon to hire is finite. Refusing to hire some workers changes the supply/demand balance. It leaves a smaller labor pool for Amazon to hire from. That raises wages. That’s just like e.g. lower vacancies in rental housing units (e.g. imagine ten thousand units of vacant housing burned down overnight) would raise prices. Or if all the supermarkets refuse to buy beef from a certain farm, so a million pounds of beef are thrown out, then the price of the beef they do buy will go up. Further, if the union provides education to many non-members, Amazon may find those people more difficult to hire at low wages with harsh contractual terms, further reducing the labor supply.

Would increased wages help the union members or would it be an altruistic sacrifice to help non-union members? One way it could help union members is if they didn’t tell amazon they were union members and applied for jobs at the higher wages (but refused to take jobs at the lower wages, to avoid driving the pricing of labor back down). That can be done without collective bargaining. It can fail if too many people “cheat” and take jobs at lower wages than they are supposed to, but it can also succeed.

Amazon hires a lot of workers indirectly through things like staffing agencies. They might find it difficult to control who they hire and implement a “reject all union members” policy which applies to hiring mangers who don’t actually work for Amazon.

Also, if a significant proportion of your existing workforce joins a union, it’s hard to fire and replace them all. Hiring and training people takes work. Hiring a lot of people at once pushes wages up (the same as how buying or selling a ton of a company’s stock at once can move the price). And your current employees often know a lot of stuff that isn’t written down (or which is difficult to learn from documents), so training replacements can be unrealistic and fail. People with experience getting your jobs done are valuable.

Education is a big deal. Three examples:

First, suppose the union members shared salary information. Then when applying for a job, you might know that Amazon tends to offer $20/h but can negotiate up to a maximum of $25/h. That would be beneficial information that would help you individually negotiate a higher wage than you would have otherwise. Salary information could either be made available to and collected from non-union members or kept private for union members. Note that hiring managers talk with each other (both at the same company and with their peers at other companies in the same industry) and share tons of information while simultaneously our culture (and many specific companies too) discourages labor from discussing salary information. Many people are underpaid compared to peers doing the same work, and would demand a raise if they knew that.

Second education example: members could share information about workplace abuses. They could find out that they aren’t alone in being mistreated certain ways. They could find out what is their boss being a jerk and what is widespread company policy. When they figure out something is a widespread company policy and is illegal, a lawsuit could be organized. When someone finds out that his lame boss is not following general company policy, he could try to transfer to work under another boss, or could complain to his boss’ supervisor. This is similar to how it’s helpful for students to have online forums or other options to share information about which teachers are awful, which are easy graders, how much homework they give, what teachers react really negatively to what (in other words, what landmines to avoid where), etc. Talking with other people who are going through a shared experience, and exchanging information about how to deal with the system, can be really helpful instead of trying to navigate it alone.

Third, a useful type of education is information about salaries and worker treatment at other companies offering similar jobs. Imagine you had up-to-date information about who was hiring, how desperate (or not) they were to hire more workers, how much they were paying, and how well they would treat you. Then you’d know when to go apply for jobs elsewhere and try to leave your current job. The better information spreads among workers about the market conditions, the more labor supply can shift to the best deals and away from employers offers poor deals. The more efficient the market becomes, the more companies have to compete against each other for labor and pay actual market rates instead of exploiting inefficiencies (the inefficiencies from limited information tend to disproportionately favor large employers not labor. large corporations have lots of information.).

So: the labor supply is finite, education and information sharing is powerful in multiple ways, existing employees matter, Amazon lacks full control over its hiring, and if collective bargaining isn’t currently working then union members don’t have to tell Amazon they are members.

Here are some examples of criticism of amazon by libertarians.

Certainly, this group includes those who seek to blackmail state legislatures with boycotts and pressure tactics. But we find plutocrats using more subtle tactics as well.

For example, Amazon corporation now supports raising the minimum wage. This may seem like some great populist and magnanimous move on Amazon’s part. But it is just what we’ve come to expect from plutocrats. In fact, Amazon’s senior managers know that it can endure paying a higher wage than can Amazon’s smaller and less capitalized competition. Smaller operations have fewer financing options to weather a cash flow crunch and are thus more financially fragile. Basically, Amazon is likely to support a wide variety of government regulations, because government regulations are anticompetitive. Amazon, of course, being the dominant firm, is motivated to crush the competition through state action.

Silicon Valley used to be a hotbed of libertarian thought, a place where innovation mattered more than government. Today, companies like Twitter and Facebook serve as de facto editors, banning users like Alex Jones for “wrong-think.” Google dominates search, but may steer search results. And Amazon serves nefarious clients like the NSA with its cloud infrastructure. And all of them employ plenty of lobbyists to avoid the kind of government anti-trust suit Microsoft faced nearly 20 years ago.

Libertarians oppose regulation, but also oppose censorship and politically correct culling of opinion. Dr. Peter Klein recently addressed these topics and more, in a talk illustrating how the technology sector has drastically changed in recent years—and how tech firms evolved into media companies focused on influence instead of innovation. He argues that social-media companies put on a public facade of being private and free of government influence, but behind the scenes they really lobby for protection against competition.

In the lead-up to the election, Facebook and Twitter censored conservative users, forcing them to leave in droves for alternative platforms like Parler. According to CNN Business, “The platform became the most downloaded app on the weekend of November 8—the day major media outlets called the election for Joe Biden.” A month later Parler had 2.3 million active users which exploded to 15 million after the Capitol breach. (Twitter reported 187 million daily active users as of September 30.)

Twitter initially put Trump’s account in the penalty box for twelve hours but two days later banned him permanently. That weekend brought a wave of purges from social media companies in which Twitter suspended seventy thousand “far-right” accounts. Parler shot to #1 in Apple’s App Store on Saturday but by Sunday evening had been kicked off the Apple and Android (owned by Google) platforms. Meanwhile, Amazon suspended its cloud hosting services, effectively turning out the lights.

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Thanks, those are pretty good. Comments:

Politicians Are Rushing to Ink Cronyist Deal with Amazon | Mises Wire

OK but short and too vague. And it has a significant flaw. It brings up local governments trying to make deals with businesses and give them incentives (in return the local govt who gets jurisdiction gets to tax them and their workers). That is something a innocent, virtuous business could be offered. You don’t have to lobby for it because there is self-interest by the local govts offering it.

The Plutocrats of Wall Street and Silicon Valley Are Scamming America | Mises Wire

Good stuff.

Moving the goalpost, but… none of of the articles had the level of detail I’d like to see about what (e.g.) Bezos, Zuckerberg, Amazon or Facebook actually do. I’d like to see better documentation of what’s going on instead of e.g. kinda vague external speculation about “Amazon advocated a higher minimum wage, therefore they are crony capitalists” (which I think is a good point, and the article gives some reasoning for it, but I’d like to see more facts too, along with a timeline).

Dr. Peter Klein on Silicon Valley Socialism | Mises Institute

Didn’t listen. Maybe later.

The Dystopian Bubble: George Orwell Meets Charles Mackay | Mises Wire

Mostly about other (related) topics but pretty good. I disliked one paragraph:

Interventions will only impede the market. As intellectual property lawyer Stephan Kinsella warns, “The only just solution is to shame them and build alternatives.”

That was tried with e.g. Parler, as discussed earlier in this very article. It didn’t work… No explanation is given for how the plan “just build (more) alternatives” will actually work in the future.