Do unions raise wages?

[Axulus]

The answer is no, says professor Alex Tabarrok - we see no empirical evidence that unions raise wages of workers as a whole, evidence between heavily unionized countries and countries with low rates of unionization is discussed. They can, however, raise wages for some workers, primarily by restricting supply:

[youtube]https://www.youtube.com/watch?v=S3EUrI63SnA[/youtube]

Do any of the pro-union supporters who believe they raise wages have evidence they can post to suggest otherwise, that they raise wages for workers across the economy as a whole?

 

[AthenaAwakened]

Unions, inequality, and faltering middle-class wages

• The union wage premium—the percentage-higher wage earned by those covered by a collective bargain*ing contract—is 13.6 percent over*all (17.3 percent for men and 9.1 percent for women).
• Unionized workers are 28.2 percent more likely to be covered by employer-provided health insurance and 53.9 percent more likely to have employer-provided pensions.
• From 1973 to 2011, the share of the workforce represented by unions declined from 26.7 percent to 13.1 percent.
• The decline of unions has affected middle-wage men more than any other group and explains about three-fourths of the expanded wage gap between white- and blue-collar men and over a fifth of the expanded wage gap between high school– and college-edu*cated men from 1978 to 2011.

An expanded analysis that includes the direct and norm-setting impact of unions shows that deunionization can explain about a third of the entire growth of wage inequality among men and around a fifth of the growth among women from 1973 to 2007.

 

[Ford]

Do any of the pro-union supporters who believe they raise wages have evidence they can post to suggest otherwise, that they raise wages for workers across the economy as a whole?

I must admit, I don't have a link to a well produced propaganda video.

But if you've got evidence that proves wages were actually higher before the advent of unions, you are welcome to post it here.

 

[Axulus]

Do any of the pro-union supporters who believe they raise wages have evidence they can post to suggest otherwise, that they raise wages for workers across the economy as a whole?

I must admit, I don't have a link to a well produced propaganda video.

But if you've got evidence that proves wages were actually higher before the advent of unions, you are welcome to post it here.

Did you just go Ben Stein on me? Universities as fortresses of nonsense and propaganda?

https://www.youtube.com/watch?v=ihYq2dGa29M#t=7m46s

 

[Ford]

Universities as fortresses of nonsense and propaganda?

Help me out here...the video you linked to has a whopping 16 views, and as near as I can tell the "professors" are not actual professors.

Who are these guys, again?

 

[Axulus]

Universities as fortresses of nonsense and propaganda?

Help me out here...the video you linked to has a whopping 16 views, and as near as I can tell the "professors" are not actual professors.

Who are these guys, again?

The video was just posted today. They are produced by economics professors Alex Tabarrok and Tyler Cowen from George Mason University. This video is part of a series for their Principles of Economics online course and would therefore be similar to what they teach in their class. They are also authors of economics textbooks used in high school and college courses.

 

[Ford]

The video was just posted today.

So you're tasked with promoting it, or you are one of the authors?

 

[Axulus]

The video was just posted today.

So you're tasked with promoting it, or you are one of the authors?

It is apparently far easier for you to go off on bizarre insinuations and red herrings than to actually address the content of the OP. Duly noted.

- - - Updated - - -

Unions, inequality, and faltering middle-class wages

• The union wage premium—the percentage-higher wage earned by those covered by a collective bargain*ing contract—is 13.6 percent over*all (17.3 percent for men and 9.1 percent for women).
• Unionized workers are 28.2 percent more likely to be covered by employer-provided health insurance and 53.9 percent more likely to have employer-provided pensions.
• From 1973 to 2011, the share of the workforce represented by unions declined from 26.7 percent to 13.1 percent.
• The decline of unions has affected middle-wage men more than any other group and explains about three-fourths of the expanded wage gap between white- and blue-collar men and over a fifth of the expanded wage gap between high school– and college-edu*cated men from 1978 to 2011.

An expanded analysis that includes the direct and norm-setting impact of unions shows that deunionization can explain about a third of the entire growth of wage inequality among men and around a fifth of the growth among women from 1973 to 2007.

As the video mentions, unions do in fact raise wages for the few lucky ones who are able to obtain membership in one, but at the expense of everyone else, resulting in a net loss overall (higher prices, lower wages, less efficient companies, lower levels of employment). This is evidenced by analysis of countries with high union membership vs those with lower union membership - there is no increase in prosperity to the working class in the high union membership countries.

 

[Ford]

So you're tasked with promoting it, or you are one of the authors?

It must be easier to go off on bizarre insinuations and red herrings than to actually address the content of the OP.

It isn't bizarre at all.

You posted a video which had about a dozen views on the same day it was posted.

I very much doubt that you simply stumbled across this video the same day it appeared and said "oh, this makes my point perfectly!"


Is it so hard to admit that you're promoting the video in question?

 

[Axulus]

It must be easier to go off on bizarre insinuations and red herrings than to actually address the content of the OP.

It isn't bizarre at all.

You posted a video which had about a dozen views on the same day it was posted.

I very much doubt that you simply stumbled across this video the same day it appeared and said "oh, this makes my point perfectly!"


Is it so hard to admit that you're promoting the video in question?

I'm using it as a tool for discussion purposes. I'm a subscriber of that channel on youtube. I noticed it and thought I would start a topic on it after watching it and found it relevant to this forum, as I do with all sorts of content I find if you haven't noticed. What's so strange about that? Once again, I can only imagine your only angle to attack this is to try to attack the messenger, both myself and the producers of the video - a sign of desperation and a lack of argument and evidence to be able to rebut it. Discomfort about your core beliefs being challenged with empirical evidence, perhaps?

 

[lpetrich]

Axulus, why don't you tell all your friends and ideological compatriots how wrong they are in believing that labor unions make people overpaid?

Also, George Mason University is the home of the Mercatus Center, yet another right-wing think tank.

 

[Canard DuJour]

It doesn't follow from their international comparison that unions don't raise wages for workers "as a whole". They don't put an explicit argument so there's nothing to address.

If, as they concede, unions raise wages for "some workers," then they raise them for workers as a whole unless one worker's gain is another's loss. They try to imply that (but daren't spell it out) in a nonsense analysis of what unions do. Unions don't raise electricians' wages by "restricting the number of electricians who can get jobs," but by restricting the conditions under which they'll work. Both might qualify as "supply" in formal economic terms but they're different things. They then claim that their putative "dispalced electricians" depress wages in "other sectors". Erm, no, no more so than among elctricians if they weren't unionised and not if said other sectors are unionised.

Then they claim that unions reduce wages by reducing productivity, citing the sole example of 1970s Britain. Which conveniently ignores umpteen counterexamples, not least ..wait for it.. their international poster child, the US, which had higher unionisation rates and lost more manhours per capita through strikes than Britain at that time. Ho ho.

There's something very wrong when bare propaganda like this is presented as "Principles of Economics" It ought to be shocking and would be in any proper science.

 

[AthenaAwakened]

So you're tasked with promoting it, or you are one of the authors?

It is apparently far easier for you to go off on bizarre insinuations and red herrings than to actually address the content of the OP. Duly noted.

- - - Updated - - -

Unions, inequality, and faltering middle-class wages

• The union wage premium—the percentage-higher wage earned by those covered by a collective bargain*ing contract—is 13.6 percent over*all (17.3 percent for men and 9.1 percent for women).
• Unionized workers are 28.2 percent more likely to be covered by employer-provided health insurance and 53.9 percent more likely to have employer-provided pensions.
• From 1973 to 2011, the share of the workforce represented by unions declined from 26.7 percent to 13.1 percent.
• The decline of unions has affected middle-wage men more than any other group and explains about three-fourths of the expanded wage gap between white- and blue-collar men and over a fifth of the expanded wage gap between high school– and college-edu*cated men from 1978 to 2011.

An expanded analysis that includes the direct and norm-setting impact of unions shows that deunionization can explain about a third of the entire growth of wage inequality among men and around a fifth of the growth among women from 1973 to 2007.

As the video mentions, unions do in fact raise wages for the few lucky ones who are able to obtain membership in one, but at the expense of everyone else, resulting in a net loss overall (higher prices, lower wages, less efficient companies, lower levels of employment). This is evidenced by analysis of countries with high union membership vs those with lower union membership - there is no increase in prosperity to the working class in the high union membership countries.

And Prior to the unions, how was the working class doing then?

 

[untermensche]

What raises wages is the willingness of owners and managers to give up some of their perks and benefits and profits and wage raises.

Nobody is claiming a union is the only way to do this.

Basic humanity is enough. And in many places people are more humane than in others.

 

[SimpleDon]

You should be more careful of your sources. George Mason University is one of the homes of Austrian economics in the US. Along with other points Austrian economics prides itself on the disdain with which it holds the use of such tools as mathematics and comparing their theories against actual data.

The arguments that they make here are what is classified as the lump of labor fallacy. It is the idea that there is only so much work that needs to be done in the world. It is what is behind the idea that automation will result in mass unemployment someday. Or that government spending crowds out private enterprise and doesn't increase the overall number of jobs in the economy. Or that the number of jobs will increase if the work week is shortened. Or that increased immigration results in unemployment.

It is closely connected to the idea of Say's law, that supply creates its own demand, which has also been shown to be wrong. Its connection to the Say's law fallacy is interesting because it should be in conflict with the lump of labor fallacy, if supply creates its own demand it should create more need for labor and more jobs. And yet it is not unusual to see both used to make a point, especially in faulty logic based arguments like this one.

Austrian economics is prone to the selective use of these and many other fallacies. It wouldn't be far wrong to say that Austrian economics is based on such fallacies. This video is just one more example.

 

[ksen]

Unions, inequality, and faltering middle-class wages

• The union wage premium—the percentage-higher wage earned by those covered by a collective bargain*ing contract—is 13.6 percent over*all (17.3 percent for men and 9.1 percent for women).
• Unionized workers are 28.2 percent more likely to be covered by employer-provided health insurance and 53.9 percent more likely to have employer-provided pensions.
• From 1973 to 2011, the share of the workforce represented by unions declined from 26.7 percent to 13.1 percent.
• The decline of unions has affected middle-wage men more than any other group and explains about three-fourths of the expanded wage gap between white- and blue-collar men and over a fifth of the expanded wage gap between high school– and college-edu*cated men from 1978 to 2011.

An expanded analysis that includes the direct and norm-setting impact of unions shows that deunionization can explain about a third of the entire growth of wage inequality among men and around a fifth of the growth among women from 1973 to 2007.

As the video mentions, unions do in fact raise wages for the few lucky ones who are able to obtain membership in one, but at the expense of everyone else, resulting in a net loss overall (higher prices, lower wages, less efficient companies, lower levels of employment). This is evidenced by analysis of countries with high union membership vs those with lower union membership - there is no increase in prosperity to the working class in the high union membership countries.

Help me out here. How do union member get higher wages at the expense of everyone else but executives with earnings hundreds of times more than anyone else and corporations earning more and more profits (wages of capital) is not at the expense of everyone else?

How does that work?

 

[SimpleDon]

Unions raise the wages of their members versus non-members. I don't think that anyone is disputing that.

So the question of if overall unionization increases wages in aggregate is pretty much settled, ignoring the fallacious lump of labor arguments that is. It does.

10% of the population receiving 20% higher wages results in 2% higher wages in aggregate from simple mathematics.

But there are also spill over effects. Increased unionization will result in higher wages being paid to non-union workers. In part from the increased competition but also non-union employers will increase wages to try to keep the unions out of their shop, to avoid having the union voted in to their shop.

This spill over effect increases as the percentage of workers covered by unions increases.

There is also what we have been seeing recently a negative spill over effect where decreasing unionization results in the premium that union worker earn.

This negative spill over effect increases as the number of workers covered by the unions decreases.

 

[ksen]

Axulus, why don't you tell all your friends and ideological compatriots how wrong they are in believing that labor unions make people overpaid?

Also, George Mason University is the home of the Mercatus Center, yet another right-wing think tank.

Tyler Cowen and Alex Tabarrok also run the Marginal Revolution blog which is at least moderately libertarian.

If their data is good and their conclusions flow from the data then their political stance shouldn't matter.

 

[Underseer]

I must admit, I don't have a link to a well produced propaganda video.

But if you've got evidence that proves wages were actually higher before the advent of unions, you are welcome to post it here.

Did you just go Ben Stein on me? Universities as fortresses of nonsense and propaganda?

https://www.youtube.com/watch?v=ihYq2dGa29M#t=7m46s

So Alex Tabarrok represents all universities now?

Wow, I didn't know he was that important.

No wonder the right wingers chose him for this propaganda piece.

 

[SimpleDon]

Unions, inequality, and faltering middle-class wages

• The union wage premium—the percentage-higher wage earned by those covered by a collective bargain*ing contract—is 13.6 percent over*all (17.3 percent for men and 9.1 percent for women).
• Unionized workers are 28.2 percent more likely to be covered by employer-provided health insurance and 53.9 percent more likely to have employer-provided pensions.
• From 1973 to 2011, the share of the workforce represented by unions declined from 26.7 percent to 13.1 percent.
• The decline of unions has affected middle-wage men more than any other group and explains about three-fourths of the expanded wage gap between white- and blue-collar men and over a fifth of the expanded wage gap between high school– and college-edu*cated men from 1978 to 2011.

An expanded analysis that includes the direct and norm-setting impact of unions shows that deunionization can explain about a third of the entire growth of wage inequality among men and around a fifth of the growth among women from 1973 to 2007.

As the video mentions, unions do in fact raise wages for the few lucky ones who are able to obtain membership in one, but at the expense of everyone else, resulting in a net loss overall (higher prices, lower wages, less efficient companies, lower levels of employment). This is evidenced by analysis of countries with high union membership vs those with lower union membership - there is no increase in prosperity to the working class in the high union membership countries.

Help me out here. How do union member get higher wages at the expense of everyone else but executives with earnings hundreds of times more than anyone else and corporations earning more and more profits (wages of capital) is not at the expense of everyone else?

How does that work?

The same way that increases in the minimum wage result in unemployment but increases in other wages including executive pay doesn't result in unemployment.

The need to bend reality to support ideology.