From: WorkerUnit (WU)
Freetrader (FT): "Collective bargaining is for wage-earners what price-fixing is for businesses. Unions are a means by which wage-earners do something which is criminal for businesses to do."
I'm pretty sure if two unions got together and colluded to set wages it would be just as criminal as two businesses trying to set prices. Collective bargaining, however, is something entirely different.
FT: "It is the individual workers who are colluding to set wages. Except they do it openly and legally. It is illegal for two businesspeople to do this."
Bullshit; the individual workers are no more colluding to set wages through their union than are the individual stockholders, through the Board of Directors' Compensation Committee.
Collective bargaining is where a group of workers come together and outsource negotiation of their wage, hour, and working condition benefits to a labor union, which then negotiates a contract with the stockholder's union (aka, the Board of Directors).
It's a simple analogy:
Worker is to Union as Stockholder is to BoD.
Workers hire a Union to get the best wages possible; Stockholders hire a Board of Directors to pay the lowest wages possible, right? Which part is the illegal wage fixing: the folks who present the initial contract proposal, or the folks dropping the last, best, and final offer?
FT: "Competing businesses are not allowed to come together in any form to agree on prices they charge."
But competing unions can? News to me.
I'm pretty sure that if Northwest's Aircraft Mechanics Fraternal Association and US Airways' International Association of Machinists and Aerospace Workers unions colluded to set airline mechanics' wages, it would most certainly be illegal.
But is it price fixing for an airline's stockholders to have set minimum acceptable profit margins for the services they provide? If not, why do you believe it wage fixing for the airline's workers to agree to a set minimum acceptable wage standards for the labor they work?
WU: "This is far less 'wage fixing' than, oh, say that which companies in your home town collude in targeting the local Chamber of Commerce's (alleged) 'market based wage statistics' to develop their (equally alleged) 'competitive' compensation plans."
FT: "Keeping statistics is not illegal, nor is keeping price statistics. If companies want to look at each others' prices, or other figures, it is not illegal. Nor to look at these figures published by a third entity."
BWAH-HA-HA-HA-HA!
Funny, innit... businesses can share wage data all they want, but let a worker try it and there's hell to pay.
From Hedgwitch (HW):
Re: Unions are anticompetitive, anticonsumer.
I beg to differ! Collective bargaining is, for wage earners, what investing in corporations is for the "monied class" -- a pooling of resources.
FT: "When companies engage in price-fixing, they are doing the same thing union workers do when they vote on terms for their contract. They are collaborating on what price (wage) to charge their customer (employer).
"In both cases, the reason for doing it is the same: to avoid having to compete. And in both cases the consumers are victimized.
"All competition is good for consumers. Whatever stifles competition, anywhere in the economy, is bad for consumers."
You missed the point, completely. I'll put it bluntly:
If wage earners are forced to go it alone and not combine their efforts to get ahead, then the prospective businessmen/employers should be forced to do the same -- no business partnerships, or corporations -- only individual entrepreneurs should be allowed.
from Freetrader (FT):
hedgwitch: "If wage earners are forced to go it alone and not combine their efforts to get ahead, then the prospective businessmen/employers should be forced to do the same -- no business partnerships, or corporations -- only individual entrepreneurs should be allowed."
There is nothing wrong with combining efforts, for wage-earners or businesses. Nothing illegal or anticompetitive.
What is anticompetitive and thus wrong is for competing entities to make agreements with each other on what prices or fees (e.g., wages) to charge for their service.
This is illegal for businesses to do. But not illegal for wage-earners/employees, such as Sammy Sosa, Jay Leno, etc. Thus, there is a double standard.
You have not answered why there should be this double standard.
Workerunit (WU): "The individual workers are no more colluding to set wages through their union than are the individual stockholders, through the Board of Directors' Compensation Committee.
If what you are saying is true, then any individual worker for a company, or job-seeker, could offer his/her services for a wage lower than that set by the union for those workers, and the union would have no objection.
A job-seeker, desperate to get hired, could offer his/her services at a lower wage, or at lower benefits, in order to underbid the other workers or job-seekers, thus hoping to displace a current worker or get preference over the other job-seekers.
Are you saying job-seekers are free to do this without any objection from the union or the other workers?
Your analogy to stockholders needs clarification to make any sense.
It is the sellers of products and services who are prohibited from setting prices through collusion with their competitors. And yet, employees, who sell a service, their labor, are allowed to join together with competing employees to set the price for their service.
WU: "But competing unions can? News to me."
Don't be silly. It's not the unions which are in competition with one another. It is the individual workers who compete with each other, just as individual entrepreneurs are in competition with one another.
And these individuals are agreeing with each other on the price (wage) they will charge for their service. Which businesses, including sole proprietors, are prohibited from doing.
That is the double standard. Now quit pretending to be stupid and answer the question why we permit this double standard.
Why should Joe's Plumbing Service, who may consist of only Joe by himself, be prohibited from colluding with Fred's Plumbing Service on their prices, while fat cats like Sammy Sosa and Jay Leno are permitted, through their unions, to collude with their competitors to raise their million-dollar salaries?
Are you going to finally answer this question, or will you continue to pretend not to understand it and invent more obfuscations?
WU: "I'm pretty sure that if Northwest's Aircraft Mechanics Fraternal Association and US Airways' International Association of Machinists and Aerospace Workers unions colluded to set airline mechanics' wages, it would most certainly be illegal."
The workers in those unions are colluding with one another when they demand the agreed terms set by those unions. Joe's Plumbing Service and Sam's Shoe Shine Service and Barbara's Taco Stand are prohibited by law from doing the same.
WU: "But is it price fixing for an airline's stockholders to have set minimum acceptable profit margins for the services they provide? If not, why do you believe it wage-fixing for the airline's workers to agree to a set of minimum acceptable wage standards for the labor they work?"
If stockholders are doing something analogous to wage-fixing/price-fixing, then this too should be illegal. All anticompetitive price-fixing and wage-fixing should be illegal, including anticompetitive dividend-fixing.
If stockholders join a stockholders' "union" which fixes minimum dividends or other payout terms, and then all the stockholders must comply with those terms and are forbidden by the union rules from "underbidding" the other stockholders, then that cartel should be prohibited as in violation of antitrust laws or perhaps SEC regulations.
In any case, this analogy does not explain why Judy's Maid Service and Hank's Bakery and Farmer Zeke's roadside tomatoe stand should be forced to compete in the marketplace with their competitors, but higher-paid airline pilots and TV entertainers and pro football referees should be shielded from competing by having unions fix their wages for them.
FT: "Keeping statistics is not illegal, nor is keeping price statistics. If companies want to look at each others' prices, or other figures, it is not illegal. Nor to look at these figures published by a third entity."
WU: "Funny, innit... businesses can share wage data all they want, but let a worker try it and there's hell to pay."
Nothing prevents a wage-earner from surveying the wage levels paid to others and deciding to set his/her own demand at the same or slightly lower level. What is anticompetitive and thus wrong is for him/her to make a deal with the other worker to demand the same wage level, thus pushing their price/wage up above the competitive market price.
There is a line which is crossed at a certain point. In fact, companies which publish price lists have sometimes been prosecuted for antitrust violations, because the practice became a form of de facto price-fixing. There is a thin line they must not cross. There are many border-line cases.
Anticompetitive practices are harmful to consumers, whether it is competing businesses or competing wage-earners who do it. Yet it is illegal only for businesses and not for wage-earners.
I'm still waiting for someone to explain why.
From: WorkerUnit (WU)
WU: "The individual workers are no more colluding to set wages through their union than are the individual stockholders, through the Board of Directors' Compensation Committee."
FT: "If what you are saying is true, then any individual worker for a company, or job-seeker, could offer his/her services for a wage lower than that set by the union for those workers, and the union would have no objection ..."
No, in that situation, the union would most certainly object.
(I'll... type... slower... this... time.)
Business is made up of three entities: Land (brick, mortar, raw mat'l), Labor, and Capital (investment). A union is a legal entity which represents Labor in the business enterprise; a worker is an individual Labor Unit. The Board of Directors is a legal entity which represents Land and Capital in the business enterprise; a stockholder is an individual Land/Capital Unit.
In the union relationship, individual Labor Units can not sell labor cheaper directly to the employer.
But neither can individual Land/Capital Units pay the union more for labor. For example, suppose I have all $210 thou of my 401(k) in my employers' stock, and their alleged Return On Investment (ROI) is 10%. Can I take my $21,000 profit this year and direct that it be given as a bonus to the coworker who sits in the workstation next to me? Of course not.
So, just where, specifically, do you believe the differences between individual stockholders and individual workers lie?
You're mixing scale here, man.
On the macro, Businesses -- a company's individual Land, Labor, and Capital Units, combined as a single entity -- are prohibited from colluding with other Business Units to set wages to workers, prices to consumers, or dividends to stockholders. But neither are unions allowed to collude to set employer wages or member dues.
On the micro, however, individual Labor units ARE allowed to collude with each other, through their union, to negotiate wages, much as Land/Capital Units are allowed to collude, through the BoD, to set the Company's prices. (Whether Land/Capital Units should be allowed to collude to raise their own dividends is an exercise left to the reader...)
Again, if you compare apples to apples, what's the diff?
Of course they are a single entity, at least under the law; that's why there's only a single contract that's signed.
I ain't in competition with any of my union coworkers, pal. We're a team of "stakeholder investors" out to maximize our profit through a mutually acceptable business arrangement in which we outsource part of our work to folks with more experience and efficacy than we posssess on-site.
Look, Ace, the union contract has nothing whatsoever to do with Sammy Sosa's huge salary: a union contract only guarantees the MINIMUM the team owners must pay the rookies and the third string utility infielders. Sammy's multi-million dollar salary is INDIVIDUALLY negotiated, over and above the guarantees a union negotiated contract affords.
FT: "The workers in those unions are colluding with one another when they demand the agreed terms set by those unions. Joe's Plumbing Service and Sam's Shoe Shine Service and Barbara's Taco Stand are prohibited by law from doing the same."
Again, you continue to confuse the macro and micro: neither can the Plumbers Int'l Union, the Brotherhood of BootBlacks, and the Taquiera Workers of America collude to set the wages at Joe, Sam, and Bab's factories.
Because, Ace, group entities, like unions and businesses, are DIFFERENT than individual entities, like stockholders and workers, and are treated differently. The group entities are treated the same and the individual entities are treated the same, however, so I still don't understand your complaint about a double standard.
From: Freetrader
FT: "If what you are saying is true, then any individual worker for a company, or job-seeker, could offer his/her services for a wage lower than that set by the union for those workers, and the union would have no objection."
WU: "No, in that situation, the union would most certainly object."
And that's what makes it collusion. The individual workers are avoiding competing with each other and instead are cooperating to set their compensation at a common level for them all. That is what companies are doing when they engage in illegal price-fixing.
Collusion/cooperation rather competition. When will you stop pretending you don't understand the similarity? Instead of pretending you don't see it, just explain why it should be permissible for wage-earners to do this but not entrepreneurs.
Right, just as members of a cartel cannot undersell each other, as long as they keep faith with the cartel. However, individuals may break faith, workers can cross the picket line, and cartel companies can also break ranks. The two cases are the same except that in one case the cartel members are companies while in the other case they are union members/wage-earners.
But their behavior is the same and is done for the same reason, i.e., they make more money by colluding rather than by competing. How is a union not doing for the workers essentially the same thing an illegal cartel does for competing companies (i.e., companies which should be competing)?
WU: "But neither can individual Land/Capital Units pay the union more for labor. For example, suppose I have all $210 thou of my 401(k) in my employers' stock, and their alleged Return On Investment (ROI) is 10%. Can I take my $21,000 profit this year and direct that it be given as a bonus to the coworker who sits in the workstation next to me? Of course not."
I won't pretend to understand your example. But if what you're describing here is a scheme by competing producer-entities (stockholders?) who collaborate in some way to fix a price for their service rather than competing with each other, then that too is the same as illegal price-fixing, and I'd want to know why it is not illegal. But if this is not what your example means, then it is irrelevant to our topic.
I am asking why any competing entities should be allowed to collude in order to set the price for their product/service rather than having to compete.
WU: "So, just where, specifically, do you believe the differences between individual stockholders and individual workers lie?"
The only difference is this: I know that the wage-earners, if they are union members, engage in collusion in order to set their wages/compensation at an agreed level, rather than compete, whereas I am waiting to see how stockholders are doing such a thing. If stockholders are doing it, then that too is price-fixing of a kind and should be illegal. Probably the SEC should impose regulations to prevent it.
WU: "You're mixing scale here, man.
"On the macro, Businesses -- a company's individual Land, Labor, and Capital Units, combined as a single entity -- are prohibited from colluding with other Business Units to set wages to workers, prices to consumers, or dividends to stockholders. But neither are unions allowed to collude to set employee wages or member dues."
You are ignoring the fact that individual entrepreneurs or independent contractors are also prohibited from colluding with their competitors. Anti-price-fixing laws apply equally to all businesses, big and small, including individual operators. And so, why shouldn?t they also apply to individual wage-earners, who are also selling something for a price in the marketplace?
An independent contractor operating alone is just as "micro" as a wage-earner. Your categorizing is false. The dichotomy is not between "micro" and "macro" but between wage-earners and businesses.
What prices? If you mean prices to consumers, that is not collusion unless there are competing companies involved in the price-setting.
If you mean stockholders setting the price paid to them (dividends), you?ve not made it clear that they are doing that. But if they are it should be illegal just as much as it should be illegal for Joe's Janitor Service to collude with Spanky's Janitor Service, or Mary's sandwich stand to collude with Pedro's taco stand on the prices of sodas.
You have not clarified how the stockholders collude and are thus analogous to either wage-fixing union workers or price-fixing companies. Your references to the BoD are meaningless. To collude, the stockholders must get together and conspire outside the BoD and agree that if the BoD does not grant their demands, then they will as a group sell off all their stock in the company.
That would be collusion. That would be the same as the workers agreeing on terms and then threatening to go on strike if their terms are not met.
FT: "That's a false analogy. The stockholders are not hiring the services of the BoD. The corporation pays the stockholders for a service, i.e., for the use of their investment money. The stockholders do not pay the directors for a service as wage-earners pay the union for its services."
WU: "Maybe I'm missing something here, but I thought the corporation was the property of the stockholders, who get to hire and fire (and pay) the BoD for managing the direction and assets and policies of the company for them."
If it makes you feel good to say this is what they?re doing, then go ahead and say it. This doesn?t answer the question why wage-fixing should be legal but price-fixing illegal. If it?s true that the stockholders are engaging in some disguised form of price-fixing, then that should be just as illegal as any other kind. Stockholders are producer-entities in the marketplace who should also have to compete. Everyone who is paid to do something should have to compete with the other operators performing the same service.
Again, if there really is collusion among stockholders to fix the terms (dividend payments) and they call a strike (sell-off) if they don't get their terms met, then there isn't any significant difference. Both are price-fixing cartels in that case. But you have not shown that this is what stockholders do.
If this little piece of nonsense is intended to show that stockholders somehow collude to set prices like a cartel, or like workers do through their union, you'll have to explain it. When someone buys stock, I don't think their purpose in doing so is to repress someone's wages somewhere.
The stockholders are basically gamblers, with a little better chance of winning than horse-race betters and bingo players, etc. That's all they are. They don't basically care how the company operates.
Nevertheless, if the stockholders are doing the same thing as the union workers, i.e., fixing the price they are paid for a service, then that should also be just as illegal as it is for companies to do. If they walk into the BoD and offer their terms and threaten to sell off all their stock unless their demands are met, then yes, that is the same as price-fixing.
You have not shown that they are doing this. And even if you can somehow prove they are doing this, what is your point? Two wrongs don?t make a right. Any form of price-fixing is anticompetitive and harmful to consumers, no matter who is doing it. You don?t justify union wage-fixing by making the charge that stockholders are also doing the same thing (dividend-fixing?) in their own disguised way.
If this is your only defense of union wage-fixing, then you are conceding that union members do the same thing (i.e., inflict the same harm onto society) that companies/entrepreneurs do when they engage in illegal price-fixing. You are not answering why they should be allowed to do this and companies should not be.
Even if this mumbo-jumbo is correct (i.e., when someone buys stock, s/he is buying buildings, computers, and lumber), how does this make the stockholders-BoD relation analogous to that of the union members to the union?
If this analogy is correct --- stockholder is to BoD as union member is to union --- then what is the company in this analogy? In other words,
union member : union : company
as stockholder : BoD : ???
Fill in the question mark above to make the analogy complete.
What entity does the BoD go to with its set of terms on behalf of the stockholders? as the union goes to the company with its set of terms on behalf of the workers? Is there a third entity, "company", outside the stockholders and the BoD? What is that entity? The architect who designed the building? the computer programmer? the lumberjack who chopped down the tree? the squirrels/termites/woodpeckers who originally owned the tree?
WU: "Of course they are a single entity, at least under the law;"
But why should the law be thus? That's the question. Why should they be allowed to join as a "single entity" to make demands as a group, when they are obviously competing individuals, offering the same service in competition with each other just as individual entrepreneurs do but who are not allowed to join as a single entity to set their terms?
WU: ". . . that's why there's only a single contract that's signed."
But why shouldn't the entrepreneur janitors be allowed to operate under a single contract and be a single entity?
WU: "I ain't in competition with any of my union coworkers, pal."
You're in competition with the ones who are unemployed and are lined up at the personnel office seeking to get the same job you have. Those ones are driving down your wage. PAL. And so are the ones working next to you if they work faster and more efficiently than you. If they get too good, you better watch out.
How are you not in competition with them just as much as Sam's shoeshine service is in competition with Pete's shoeshine service across the street?
WU: "We're a team of "stakeholder investors" out to maximize our profit through a mutually acceptable business arrangement in which we outsource part of our work to folks with more experience and efficacy than we possess on-site."
Shifting around the rhetoric doesn't change the reality. If competing entrepreneurs did the same thing it would be illegal. Why are they prohibited from colluding, but union workers are not?
This is a double standard. Competition is good for the economy. All competition, including among wage-earners. No one has explained why it's good for everyone else to compete, including small low-income entrepreneurs, but not wage-earners.
WU: "Look, Ace, the union contract has nothing whatsoever to do with Sammy Sosa's huge salary: a union contract only guarantees the minimum the team owners must pay the rookies and the third string utility infielders."
No, union contracts protect the fat cats too. There are many terms which benefit the highest-paid. It's not just the negotiated salaries. And when the union members call a strike, the fat cats are right in there with them. And the better salary terms negotiated for the lower-paid ones have a ripple effect which drives up the higher salaries indirectly. Also, the free agent rule is one which benefits the highest-paid, and that rule was imposed by the players? union.
If there were no baseball players' union, Sammy's salary would probably be only half what it is.
FT: "The workers in those unions are colluding with one another when they demand the agreed terms set by those unions. Joe's Plumbing Service and Sam's Shoe Shine Service and Barbara's Taco Stand are prohibited by law from doing the same."
WU: "Again, you continue to confuse the macro and micro: neither can the Plumbers Int'l Union, the Brotherhood of BootBlacks, and the Taquiera Workers of America collude to set the wages at Joe, Sam, and Bab's factories."
But entrepreneur plumbers, shoe-shiners, and taco stand operators are not allowed to hire ?unions? to represent them and their competitors in setting prices, as wage-earners are allowed to do. They are required by law to compete and not to collaborate in any form of price-setting, because it is for the good of consumers that all competing producer-entities compete. Yet, only non-wage-earners are required by law to compete, i.e., are prohibited from engaging in price-fixing.
All individual operators/producers in the marketplace, as long as they are not wage-earners, are prohibited from colluding, i.e., collaborating with their competitors to set the price for their service. It doesn?t matter whether you call it ?macro? or ?micro? or ?shmacro? --- putting jargonistic names on things does not explain or clarify the issue in question. Only wage-earners are granted this indulgence to not have to compete. Why should that be?
WU: "Because, Ace, group entities, like unions and businesses, are DIFFERENT than individual entities, like stockholders and workers, and are treated differently."
For purposes of our topic, they are not different. They are both producer-entities which compete in the marketplace with other producer-entities providing the same product/service. And it is a fact that all competition benefits consumers, not just competition among groups, but also among individuals. And further, individual entrepreneurs, who are individuals and not groups, are required to compete and are prohibited from colluding with their competitors to set prices.
No they are not. Again, individual entrepreneurs are prohibited by law from collaborating with their competitors to set their prices. They may not legally join together to do this, nor may they legally hire a third entity, similar to a union, to do the price-setting for them, as wage-earners are allowed to do.
Yes you do.
You just don?t want to try to explain the double standard or justify it. Instead you find it more comfortable to deny that the double standard exists. You are embarrassed to admit that you and your union colleagues are leeching off society by having this privilege which is denied to all non-wage-earner producers. All other producers must compete, but wage-earners are granted the unique privilege to collude and escape competition, to the detriment of consumers.
Why do wage-earners get this privilege which is denied to other producers? What is the basis for this double standard? Why is competition preferable to collusion in the case of all other producers, but not in the case of wage-earners?
If you have an answer, post it here in this page. Click here.