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From: mjk@tty3b.UUCP (Mike Kelly)
Newsgroups: net.politics
Subject: Re: Wage Rates: Unions, Minimum Wage Laws, and Employer Oligopoly
Message-ID: <593@tty3b.UUCP>
Date: Thu, 31-Jan-85 11:07:50 EST
Article-I.D.: tty3b.593
Posted: Thu Jan 31 11:07:50 1985
Date-Received: Sat, 2-Feb-85 08:34:07 EST
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 >From: mck@ratex.UUCP (Daniel Kian Mc Kiernan)
 >     In a Free Economy, wage-rates are established by the Law of Supply and
 >Demand  ... 

Fine, live in a make-believe world if you like.  Do you mind if the rest of
us discuss reality?  As someone once said, the world economy today resembles
a "free market" about as closely as a super highway resembles a dirt path.
I understand the need to apply simplified models to gain understanding -- just
don't start believing too much in the simplified models.

 >     Unions and Minimum Wage Laws coercively prevent surplus workers from
 >bidding down the wage rate (assuming, of course, that the wage-floor set is
 >below the equilibrium wage rate).  Wages are high, but there are associated
 >costs.  Employers continue the practice of hiring until wages equal MVP,
 >but at this higher wage rate, this means that they hire fewer workers, thus
 >there are workers who would have had jobs at the lower wage rate but are
 >now unemployed.  Additionally, workers who would not have been attracted by
 >the equilibrium wage rate are attracted by the higher wage rate; this adds
 >to the unemployed (assuming that we define 'unemployed' as seeking but not
 >having a job).  

You may economically "prove" to your own satisfaction that unions are bad.
The reality is that workers must organize because management is already
organized.  An employee does not have the freedom, within a company, to go
from manager to manager and gain bids on wages or working conditions.  These
are set on a company-wide level.  If individual workers are bargaining with
a corporation  -- well, it is rather obvious who holds the power in that
relationship.   Only when workers are able to *collectively* negotiate with
the already collective management are the power relationships brought more into
parity.  That is simple reality in the real economy in which we live.

Mike Kelly