Public-sector unions: why must they exist?

[ElFenix]

Just an FYI.

The argument for labor unions in the public sector is because the government is a monopoly. When working with a monopolistic employer, whether it be private or public sector, you must have collective bargaining to insure concessions. If we allowed multiple governments, the fair market would set what a true government wage should be. Without there isn't a market directed rate for the supply and demand of wages, only a set rate.

Set rates = bad = needs union.

Do I get a cookie?

if government is competing against private interest for workers then there very much is a market set rate of wages for supply and demand. and i'd garner that there are very few public sector bureaucrats with special skill sets that can't be properly utilized in the private sector.

 

[The-Noid]

Unions do not restrict the supply of labor and the free market will determine if the .gov pays far to little for a specific job because very few if any will work for the pay they are offering. The .gov DOES have to compete for labor with private employers.

The purpose of a union is to restrict the supply of labor, while simultaneously increasing the demand.

I am glad you guys are attempting to counter the age old public sector union argument.

Like I said the pro-public union stance goes back to the idea that the government is a monopoly. Whether that is correct or whether the private sector acts as a substitute good.

I do like that now three people have come out against an economic statement that is in almost every economics book, from basic to doctoral level that has ever been printed.

 

[The-Noid]

if government is competing against private interest for workers then there very much is a market set rate of wages for supply and demand. and i'd garner that there are very few public sector bureaucrats with special skill sets that can't be properly utilized in the private sector.

First, I will say, I think the government monopoly argument is a crock of shit. When I was an econ major many years ago, I heard it in every class.

Second, there is study after study that will argue that private sector labor is not a substitute for government sector labor. You can find 100's to 1000's or more if you want to take the time.

Personally (not that anyone cares) I am very much anti-union (as in any debate, you have to be able to take the other side to really understand any argument), however the monopoly argument is what people have gone back to for 100 or so years and will continue to go back to.

 

[Ausm]

Because taxpayers should not be held hostage to a group of public employees who collectively think they're worth more and more each year.

How can Taxpayers be held hostage when you said money wasn't the crux of your argument?

 

[The-Noid]

Look at my charts I posted above.

I agree with you on this, there is a major difference between the private sector, public sector (federal) and public sector state.

I do think most when talking about public sector, mean federal, not state or local.

 

[zsdersw]

How can Taxpayers be held hostage when you said money wasn't the crux of your argument?

You didn't ask initially if money was the crux of my argument, you asked if I think they're paid too much. I don't think they're paid too much in all circumstances, but what troubles me is the relative ease with which they can demand increases in pay or benefits regardless of whether or not they've done anything to earn it. So yes it is about money, but not specifically that all of them are paid too much.

 

[Ausm]

Why are you worried about their power if it doesn't revolve around the all mighty dollar?

Yeah I did....

 

[Ausm]

You didn't ask initially if money was the crux of my argument, you asked if I think they're paid too much. I don't think they're paid too much in all circumstances, but what troubles me is the relative ease with which they can demand increases in pay or benefits regardless of whether or not they've done anything to earn it. So yes it is about money, but not specifically that all of them are paid too much.

Umm read the above post.

 

[zsdersw]

Umm read the above post.

Not initially... see post #36

 

[Ausm]

Not initially... see post #36

You are worried about Taxpayers but why?

 

[zsdersw]

You are worried about Taxpayers but why?

You didn't ask initially if money was the crux of my argument, you asked if I think they're paid too much. I don't think they're paid too much in all circumstances, but what troubles me is the relative ease with which they can demand increases in pay or benefits regardless of whether or not they've done anything to earn it. So yes it is about money, but not specifically that all of them are paid too much.

 

[Ausm]

You didn't ask initially if money was the crux of my argument, you asked if I think they're paid too much. I don't think they're paid too much in all circumstances, but what troubles me is the relative ease with which they can demand increases in pay or benefits regardless of whether or not they've done anything to earn it. So yes it is about money, but not specifically that all of them are paid too much.

Read post 36 and also checkout the link that refutes the need to worry at all.

 

[zsdersw]

Read post 36 and also checkout the link that refutes the need to worry at all.

I already did... and it refutes nothing. Unions remain more of an obstacle than an aid to the financial health of public-sector employers (federal and state/local). What they concede during one contract negotiation they'll just ask for (and likely get) the next time around, whether or not the employer has the funds or whether or not it requires the employer to raise additional revenues.

 

[Ldir]

It's not refuted by anything. The benefit packages are indeed very lavish by private-sector standards.

Like I said. Your theory is refuted by reality.

So you think Public sector workers are paid to much is the crux of your op then?

Benefits make up a slightly larger share of compensation for the state and local sector. But even after accounting for the value of retirement, healthcare, and other benefits, state and local employees earn less than private sector counterparts. On average, total compensation is 6.8% lower for state employees and 7.4% lower for local employees than for comparable private sector employees.

http://www.nirsonline.org/index.php?option=com_content&task=view&id=395&Itemid=48

 

[ElFenix]

Second, there is study after study that will argue that private sector labor is not a substitute for government sector labor.

what exactly is meant by that?

 

[The-Noid]

what exactly is meant by that?

It means there is only one provider of government labor (assuming each government entity is its own monopoly supplier, local, state, federal). Using private sector labor as the substitute good, i.e. how wages are set is improper. It goes back to the idea that government labor is monopolistic, private sector labor is a perfect competition good, neither good is a substitute for the other or if you relax restrictions they are only a partial substitute at best.

Setting rates based on one for the other is akin to comparing apples and oranges.

Again, I agree that private sector at this point could be considered almost a full substitute to government, however the classical economics definition does not follow that logic.

If there were multiple governments, able to set a government rate then prices would be set by more market forces.

In a simple sense the government monopoly has to equal union monopoly, for rates to be set in a competitive fashion with maximum benefit to both the supplier and user of labor.

The anti-union argument is much more simple. Even if the government is a monopoly if they don't pay a fair wage, then people won't work. Nothing fancy about that. Even if the wage is not set in an competitive fashion and one party has the monopoly power, it is always the supplier of labor that have the upper hand, even if not collectively bargained. i.e. they can always decide not to work, having said that in this day and age it is a bit more difficult to find your own food, etc.

 

[piasabird]

I was more of a slave when I worked for a union job.

 

[piasabird]

Just hire mexicans to teach.

 

[Darwin333]

The purpose of a union is to restrict the supply of labor, while simultaneously increasing the demand.

I am glad you guys are attempting to counter the age old public sector union argument.

Like I said the pro-public union stance goes back to the idea that the government is a monopoly. Whether that is correct or whether the private sector acts as a substitute good.

I do like that now three people have come out against an economic statement that is in almost every economics book, from basic to doctoral level that has ever been printed.

I would like to see the economic book that states in a free market society the Government has a monopoly on labor and the prices set for that labor (leaving out minimum wage which applies to both public and private).

I would also like to see the book that states that without force the .gov will be able to hire and retain workers for $1 an hour for similar jobs that the private market pays $15 an hour. Thanks in advance.

Edit: Also, could you show me an example of unions decreasing the supply of labor on a wide scale basis? I will agree that they can increase the demand with their contracts (worker XYZ can only do X type of work therefore another worker is needed to do Y even though the original worker had the skills and ability to do it) but I don't think that is a big enough issue to be a factor.

 

[theeedude]

I didn't say unions, just public unions. I wouldn't have a problem with a no-strike law on private hospitals especially if they are the only one serving a region. These days the average person can switch to 3 or 4 different phone companies in a days time if they so choose.

BTW, I am not against ANYONE negotiating contracts. I am against a large group of the public getting together and negotiating with the public with virtually no checks and balances on that groups power. If workers at a private hospital negotiate wages that are unsustainable the hospital eventually goes bankrupt which means there are two sides in the negotiations. There really aren't two sides in a negotiation between a large group of the public and the public.

What if there is only one hospital in a town? Should they be barred from negotiating prices as a group of physicians, and each doctor required to negotiate their own rate?

 

[The-Noid]

I would like to see the economic book that states in a free market society the Government has a monopoly on labor and the prices set for that labor (leaving out minimum wage which applies to both public and private).

I would also like to see the book that states that without force the .gov will be able to hire and retain workers for $1 an hour for similar jobs that the private market pays $15 an hour. Thanks in advance.

http://www.amazon.com/Economics-9th...9491/ref=sr_1_1?ie=UTF8&qid=1330555889&sr=8-1

No problem for the help. I am fairly sure McConnell will have it as well, but it's been a while since I was in school...

Again, you can relax the assumptions and make them at best partial substitutes, the point remains however that the government has a monopoly on government labor and in many circumstances you can't relax the assumption as there is NO PRIVATE alternative under the current system. In that case you are left with a full monopoly to the demand of that labor.

If you come up with a whole bunch of assumptions, i.e. 0 unemployment, full labor force participation, all projects have a positive economic NPV you could possibly come up with a case where the private sector is fully comparable, however in reality it's not the case.

Thus you are left with monopoly supplier vs. monopoly user.

 

[Rainsford]

I think that fundamentally labor should be able to organize for the same reason capital is able to organize...it increases the power of the individual to get what they want. The fact that unions can negatively impact the overall system is unfortunate, but totally irrelevant, as companies/government agencies do EXACTLY the same thing. The UAW demanding pensions you feel are unearned is basically the same as Verizon deciding to charge you more for less cell data plan bandwidth.

As far as private vs public sector unions, I don't see anything that suggests public sector unions are especially unneeded compared to their private sector counterparts. The government is completely capable of taking advantage of their workforce the same as any company. More so because, while private sector companies can be a replacement for government employment, it's not as direct a relationship as between private sector companies.

 

[The-Noid]

Edit: Also, could you show me an example of unions decreasing the supply of labor on a wide scale basis? I will agree that they can increase the demand with their contracts (worker XYZ can only do X type of work therefore another worker is needed to do Y even though the original worker had the skills and ability to do it) but I don't think that is a big enough issue to be a factor.

This is the fundamental definition of a union in that they decrease supply/increase demand.

Even many of the pro-union book writers such as Freeman, Medoff, etc. argue for the restriction/decrease of supply.

I would very much recommend the Parkin book as a good refresher.

 

[bfdd]

I really think you morons who promote public unions are fucking idiots. You put even more layers between everyone, you push the bottom further from the top. Bullshit. We do not need extra groups inside of our government. Retarded ass motherfuckers.

 

[The-Noid]

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