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Comment by mal10c | Hacker News Reader

I've never been part of a union and really don't know much about them. Could be a dumb question, but could someone describe the pros and cons in layman's terms? I usually hear the terms "workers rights", "wadges" and "unions" in the same sentence, so I assume unions are a way to ensure members are all treated the same - in terms of salaries, PTO, etc. If I had an opportunity to join a union, would I accept the wadges that were previously agreed upon by the union/administrative reps? Or, would I have some wiggle room in my salary? For instance, let's say I feel that I'm worth $40/hr, but the union is only paying $30/hr, could I negotiate the higher rate? Sorry for my lack of understanding on this, but I appreciate any helpful comments.

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One way to think about it is in terms of economic theory. Negotiations are fairest when both sides have equal power. But you have approximately one job, and a company typically has way more employees. It's more painful to lose a job than to have 1 employee quit. So the negotiation is fundamentally unfair.

So when it comes time to negotiate your annual raise, it's not you alone dueling with your boss (and the whole corporate hierarchy backing him up). Instead it's you and all your colleagues getting together, sending in some representatives, and saying, "Profits are way up this year, so we all deserve decent raises. Let's talk numbers."

(This is less interesting to tech workers, in that we already have a ton of salary negotiating power due to supply/demand differences. But personally I'd still like to see more collective action to deal with other issues. A good example is the way employees recently forced Google to get out of military contracting. Or imagine how different Uber might have treated employees if they'd had a union that helped keep awful managers in check.)

I think we should all be less confident in this idea that software engineers have tons of bargaining power. The salary is relatively high compared to the US average, but it's not obscene compared to say, product managers, high performing salespeople, etc.

On occasion I've tried to pick up side jobs for 10-20 hours per week for a second company, and I've always been refused, not because I wasn't technically qualified but because they just weren't interested in considering non-standard work arrangements. If there were TRULY such a huge gulf in supply/demand, I would've been able to get a side job at 60-70% of my normal hourly-equivalent rate, for 10-20 hours per week, is my thinking.

I've also observed a lot of stubbornness in salary bands and so on.

By the way, I speak as a person who has previously made in excess of $200,000 per year in non-stock compensation.

Exactly. We should also keep in mind that developers have already seen their wages depressed by collusion between the big tech firms (which was punished with a slap on the wrist). And that's just the case we found out about.

Sure. I mentioned we have decent salary negotiating power because for many other industries that's the #1 reason to unionize, but I don't think many tech workers would find it compelling.

Also, I'm not entirely sure your case is proof that there isn't a big supply/demand difference. I would be very unlikely to hire a developer 10 hours per week because software is collaborative intellectual work, and I'd have a hard time using somebody who wasn't around for much of the thinking and constantly needed to be brought up to date. Their efficiency (in terms of hours of actual coding versus hours of communication and keeping up with codebase changes) would be low, but their cost in terms of time spent by other workers would be at least the same.

Occasionally I'll see small units of work that could safely be done by part-time contractors working on something solo. I definitely looked for this at my last startup, as my cofounder was correctly eager to accelerate things. But it was pretty rare that I found things where the cost/benefit ratio was at all decent.

Is there economic theory supporting unions? Asymmetric negotiating leverage is not generally recognized as something that undermines market outcomes.

To the extent that it's difficult or impossible for the workers to get another job, the employer has buyer's market power (in the extreme, a monopsony). It's a well-recognized phenomenon in economics literature.

https://www.investopedia.com/terms/m/monopsony.asp https://en.wikipedia.org/wiki/Monopsony

Like a monopolistic market, a monopsonistic market is inefficient compared to a competitive one. Employers gain "utility" at the expense of workers, but less than the workers lose compared to a competitive market.

Unions can remedy this by becoming a monopolistic (or near monopolistic) supplier of labour, by negotiating a higher wage (price floor), bringing the wage closer to it would be in a competitive market.

Long story short: if you're pro competitive markets, you need to recognize the benefits of unions. They're not an ideal solution, but the alternative is not a competitive market outcome.

Edit: this seems like a pretty good explanation: http://www.economicsonline.co.uk/Business_economics/Monopson...

But you don't care about market outcomes, but about your own personal outcome (and I assume the economic theory alluded to wasn't macroeconomic but micro). The market can converge to fair non-union wages, or it can converge to fair union wages, which would be higher. Capitalists claim that unions reduce overall profit and harm the market, but workers shouldn't care about that (i.e. lower stock performance and higher wages are better for workers, at least in practice, given actual wealth distribution).

You are forgetting about customers. I own no companies and work for one company, but I am a customer of many. A personal cost/benefit analysis like the one you're describing would have to take that into account.

The way it works is that management involves the union in its decisions, and they reach compromises. After all, it is also in the union's interest that the company stays viable. If all the increase in wages gets is paid for by an increase in prices, and management isn't willing to cut profits, then that's unlikely to be acceptable to the union. The goal is to keep the company performing well, but to even the playing field when negotiating the distribution of profit among management, shareholders and employees. This is called co-determination: https://en.wikipedia.org/wiki/Co-determination

Individuals might prioritize personal outcomes over market outcomes, but societies and governments should prioritize the latter.

> but societies and governments should prioritize the latter

Societies should prioritize according to their values. I don't think that maximizing GDP is a universal value.

Yeah. The consumer optimum is heavily exploited workers, as that drives labor costs down as much as possible. We're looking for a reasonable balance, so the value created by labor is shared between consumer, producer, and the many other people in the value chain.

I'm not an economist, but, free market theory favors lots of competitors, fully informed customers, and low barriers of entry which can be thought of as trying to keep consumer and supplier with a balanced amount of leverage (too much leverage on the supplier's side creates monopolies, for example).

Also, it's not really about positive market outcome in general (optimized market), but about positive outcomes for the employees.

> I'm not an economist, but, free market theory favors lots of competitors, fully informed customers, and low barriers of entry which can be thought of as trying to keep consumer and supplier with a balanced amount of leverage (too much leverage on the supplier's side creates monopolies, for example).

That's a pretty strong argument against unions in the US, then, since (unlike in other countries) there's no competition between unions at an employer, there's almost no ability to deauthorize a union in practice (ie, choose a different union), and very high barriers to entry (very difficult to authorize a different union for representation in place of an existing one).

But the problem is that employers also have high barriers of entry (it's not easy to switch jobs, especially if you have to relocate), and there's usually low competition for blue collar work, since there's higher demand, which makes employers have overwhelming leverage. There are industries where that doesn't apply as much, and you can see that workers can get better compensation and benefits in those. Unions can equalize that leverage.

I do think that unions could also have too much leverage, but I think that finding a happy medium is a worthy legislative goal.

Asymmetric negotiating leverage is a key element of Marx's theory with regard to profit.

The power of unions is not just negotiating on behalf of a large group of employees. Imagine if instead of forming a union, the employees formed a worker's cooperative to contract out their labour. The two companies could then negotiate as equals. However, that cooperative would still not have nearly as much power as unions can have, because it would not be guaranteed an exclusive contract.

> One way to think about it is in terms of economic theory. Negotiations are fairest when both sides have equal power. But you have approximately one job, and a company typically has way more employees. It's more painful to lose a job than to have 1 employee quit. So the negotiation is fundamentally unfair.

This is not correct. The company competes with all other companies for the same job. Not only that, but companies go bankrupt more often than people do. Businesses are the frail side of the equation, if you make any.

> o when it comes time to negotiate your annual raise, it's not you alone dueling with your boss (and the whole corporate hierarchy backing him up). Instead it's you and all your colleagues getting together, sending in some representatives, and saying, "Profits are way up this year, so we all deserve decent raises. Let's talk numbers."

Now let me answer with actual economic theory: microeconomics. The fundamental way to make something get a higher price is to increase its utility or to decrease its supply. Unions can increase salaries if they increase productivity (which they dont, in fact they do the exact opposite in the majority of cases, worker health being the best exception to this rule) and decrease supply (not allowing to hire other workers).

Suggesting businesses are the frail side of the equation is absurd. If you ever talk to anyone stressed out by being unemployed, by applying for jobs, by worrying about leaving a terrible job but staying because of risk and transaction costs, this would be quite obvious. So strong is the business side, that business in many industries can afford to be quite terrible to their workers for a long long time.

Regarding your other point, unions can also increase salaries by getting workers a larger piece of the pie. Not sure why you left out this obvious aspect of any negotiation?

Thats because you are looking at the businesses that survive, not the ones that die off. 8/10 businesses fail in 5~10 year range.

The fact that you havent seen people stressed out for their business running into the ground is entirely due to not talking to people that have businesses that can be run into the ground.

> Regarding your other point, unions can also increase salaries by getting workers a larger piece of the pie. Not sure why you left out this obvious aspect of any negotiation?

Because that is a labor theory of value proposition. The pie does not work that way: the moment a businesses loses its competitive returns due to higher demands, it will stop investing capital unto itself and remain stagnant, while the capital goes to areas where it does not have such restrictions.

Companies compete with each other fiercely, and a company that has workers that cant unionize will very much welcome such problems on their competitors!

Competition among companies is not so tough, because many employees can't easily move cities or countries to find another job, but companies can (and do) always import workers from all over the world, or outsource projects.

When it is tough, companies collude so that they can keep salaries down (see Google & co).

Negotiating as part of a group is not about supply and demand, it's about reaching a fair agreement between a specific company and a specific group of workers. Nobody cares about supply and demand on the market, most people would rather have a stable place to work and get decent raises if the company is doing well, instead of all the profits going to the management and shareholders.

I'll have to ask for a more objective criteria to say competition is not tough. Businsses are very hard to bring about to profitability and sustainability. And they are vulnerable to market wages and capital returns just like any worker.

I agree that there is a different flexibility of labor and capital, but unions do not make labor and capital more flexible or inflexible. If anything, it makes labor inflexible and affects capital in the short term.

> Negotiating as part of a group is not about supply and demand, it's about reaching a fair agreement between a specific company and a specific group of workers. Nobody cares about supply and demand on the market, most people would rather have a stable place to work and get decent raises if the company is doing well, instead of all the profits going to the management and shareholders.

That sounds all good and well, but the union's interests are not its worker's interest. Its another organization that can feed of workers. Unless they make the pie bigger, they eat a generous slice, and if the company goes bust they will not eat at all. Unions have strong incentives to work in tandem with the company than with the worker.

Start-ups are very hard to bring to profitability and sustainability. An existing business, once off the ground can usually live for a long time unless the management team really screws up or their market gets disrupted. Even in these cases they can drastically reduce their costs by firing personnel and limp along to better times.

There are also huge conglomerates which gobble up smaller brands, e.g. Kraft Heinz, Time Warner, Alphabet, 3M, etc. They couldn't give a fuck about fragility.

Established businesses are in no way fragile. It's so ridiculous having to read this type of defensive argument.

Employees are a bunch of peons for the big corps, but they shouldn't try to organise because it will be somehow worse for them, right. Any type of group dynamic will not perfectly represent the interests of the group, and yet there are very successful unions out there even in the US, where capital had an long and bloody history trying to suppress them.

There are more employees in small businesses than in big ones..

Also management and corporate are employees as well.

You are conflating startups vs small businesses. And small businesses are mostly irrelevant in unionization discussions. Employees rarely bother to unionize at a small business because the more equal balance of power and the closer human relationships between employee and employer yield more reasonable outcomes.

You're conflating two different things. It's obvious in the case of a monopsony, like a company town. Employees can raise productivity all they want, but they will not see a bigger paycheck, because if employees don't have negotiating power, the employer will capture all the cash from that.

Your "pity the poor companies bit" is just bizarre to me. It's true that companies compete for workers, which is why employees have any negotiating power at all. But it doesn't change the fact that employers still have more negotiating power because of relative size. The same is true when companies negotiate with one another: Walmart, for example, is famous for jerking suppliers around because of the relative need.

>Businesses are the frail side of the equation, if you make any

If this were true, real salaries would have increased as the GDP increased. Instead they've been stagnant for over 30 years. You're argument is incredible and would need some sort of evidence to back it up against what is being observed in real life

Salaries and Profits do account for GDP, but that doesnt meant that all salaries and all profits are divided equally.

There is concentration on both sides of that equation. Small businesses do not have the profits and margins big companies have.

You weren't specifying small businesses and even then I'd say you have to get super small, <20 employees for that effect to start making them equivalent.

I will concede that if every business was a small business, then unions likely would be unnecessary as the negotiating power is more equal

I didnt, i mean all business which includes small business.

Unions are a super-business organization, they affect both big and small business, and unions dont represent all workers.

If all workers were unionized, there would also be little point for unions.

Dane here - we have a pretty mature union culture which is about more than just maximizing the salary. Unions actually become a boon for both employer and employee.

The way we see it, unions are best used when there is a power discrepancy between employer and employee. In the end, your value as an employee is how much it costs to replace you. Simple as that.

So if you are educated in a specialized field, you have bargaining power (and you don't need a union). If you are working in a more generalist area, you have none whatsoever - it is an illusion (exception being if the demographics means 100% employment).

What the union does is of course to band generalists together so they have strike power. That sucks for the company. But what the Danish unions tend to do is demand eduction, lifting the generalist work into a more specialized position. You can always get good at a job.

This means that the company may have to pay a more expensive salary, but get a much improved worker and/or product. Paying 50% extra for twice the productivity is a good investments, even if you have to pay for some of the education of the former generalist.

So rather than just demand more pay, the unions demand more education and higher standards. They also demand better pay, of course - but in the end they are interested in many members working rather than few members getting ridiculous payments.

Mature unions are good for the economy. Corrupt or immature unions can be a terrible ball-and-chain for a society.

Well, that is until China can make the same technology for a fraction of the price...

Btw, this doesnt address how unions can benefit things like commodities. From your post, it wouldnt. It can only benefit if you are leading the industry.

But 'China' (as in 'current boogeyman') has been around for a while now, and so have strong European economies with strong Unions and employee-friendly laws. In itself, your statement does not refute the op.

If there is one thing you are underestimating-

Change.

Things do not stay the same, and while Europe has survived this far, I have watched my company remove Europe from the supply chain and development of products.

Everything is made in China or south America.

That is an even better argument for unions pushing for education and ensuring people qualify for specialist work rather than being solely focused on salary.

But if specialist work is a commodity in china, wouldnt that make it no longer 'specialist'?

Well then wouldn't you be surprised to hear that labor strikes are also common in China.

https://en.wikipedia.org/wiki/Labor_relations_in_China#All-C...

Usually there is a salary scale, and usually that scale is consistent and favors tenure. People start at a consistent level -- "Bob" doesn't start as a "Developer 2" making $80k, while "Sally" starts as a "Developer 2" at $50k.

The biggest "upside" is that there is usually more stability in terms of work rules, benefits and compensation, and when there are changes, you know about them. There are defined work rules, disciplinary procedures, etc. Your health insurance doesn't randomly change every year, etc.

The union itself is at least a nominally democratic institution. The downsides are that shitty employees can work the system. And just like how you have bad IT, HR or other teams, some unions suck. Dealing with a shitty union is difficult.

In general, if there are a bunch of people around you doing the same things, the company is making money, and you'd like long tenure, a union probably is a net benefit. If you work for a mega-org or .gov, it's essential. If you're in a high-growth business, or a profession where you expect to bounce from employer to employer, it's not a good value.

Everyone on HN is a 10x employee making a $500k/year, so it's not a good value in that situation either. ;)

Also, sometimes your union might decide to tank your employer to strengthen their negotiating position with another employer. A shitty union can go really shitty.

This isn't a hypothetical worst-case scenario. I mean, it is a worst-case, but it did actually happen to Hostess.

Sort of.

The union and Hostess had already agreed to a round of salary cuts and decreased benefits. When the management still "couldn't" make it work that they went nuclear.

If memory serves, there were two unions Hostess was negotiating with. One represented most of Hostess' workers and was negotiating in good faith. The other represented a small percentage of Hostess' workers, and was willing to sacrifice their members at Hostess to gain an advantage in their negotiations with different companies who had more employers.

Arguably, this is a reason unions shouldn't get too big. It creates scenarios where some workers get their interests sacrificed, precisely the thing unions exist to forestall.

That may well be true, but doesn’t really make any point.

Oracle is an awful software company. Does that mean that we should use paper ledgers for corporate accounting?

No, but it might mean you should be careful about proprietary databases.

Which is to say I believe there is a point to be made in there about what can and has happened. And what there is to be cautious of.

The point there is that you don’t really have much of a choice once you’re a business of a certain size, you pretty much do Oracle Financials or SAP!

> If you work for a mega-org or .gov, it's essential.

Government jobs?

People dont get fired from those anyway.

You have a monopoly service and monopoly workforce. This is recipe for disaster.

At least a monopoly workforce in the private sector can bleed a company dry and force it out of business.

The government? Well they raise taxes + increase debt... Or the service just sucks.

It can be much, much worse. I would offer in reply:

https://en.wikipedia.org/wiki/Spoils_system

https://en.wikipedia.org/wiki/Tammany_Hall

>or .gov, it's essential

No. That is wrong. All of government is overhead, it's like an operating system that way. Public employees should not be collectively bargain to extract more money from taxpayers. If compensation is so bad in the gov't then the employees can organize to get someone else voted in to turn things around. Furthermore, because so much of what happens in government is subject to public scrutiny (as it should be, it's our money) there's much less space for the government to poorly compensate its employees or treat them like crap.

Edit: did people forget what a great contribution to society police unions have made?

It does vary some based on the nature of the workplace and the union.

Usually, the best pros of the best unions are: Strong representatives negotiating for better PTO, healthcare, work practices, wages/salaries, etc. Some recourse besides quitting or suing if your manager is treating you badly.

The cons can be: Fixed salary ranges and benefits - want more money as a star employee? Want to try to negotiate a different benefits package? Too bad, you get what the union negotiated. Pay and promotions may be based on time in role rather than productivity or skills. It's usually difficult to fire poor workers.

Essentially, unions foster an environment of distrust between management and workers, so they generally try to remove any way for management to affect your work. Management evaluation of who is a good and bad worker is not to be trusted, since they are presumed to want to use that power to stop the union. Management is less encouraged to care about giving the workers a fair shake - that's the union's job now, management isn't expected to push for anything but more money for themselves.

I suspect that this may vary depending on your country of residence, industry and union, but what you're describing is at least not how it works in my country and within the unions I've been part of.

My situation is such that the union together with the employer negotiate a base agreement. It might detail things like making sure you received compensation for overtime, what the requirements for termination are, rights in regards to parental leave, minimum annual wage adjustments, etc. My country has very little legislation in regards to workers rights, because we've traditionally had very strong unions instead, so workers rights could be mandated through agreements rather than law. To give you an ideal, the standard collective bargaining agreement within my industry is a few hundred pages. If you are not part of such an agreement, it is instead on you to make sure that your employment contract covers all those aspects.

The benefit for the employer is that they have to deal with less legislation, don't have to negotiate a complex contract with every employee (i.e. we already agree on the vast majority of issues, and can focus on the few things where I want individual adjustment), and finally, as long as the employer follows the agreement, the workers through their union agree not to go on strike.

Now, to your question, just because you have an agreement through your union does not mean that you cannot exceed that agreement. You can certainly negotiate a higher salary, for example. It only ensures the minimum level.

From my understanding, wage scale is often a point that is negotiated, so it varies from union to union.

Some unions have rules where you can get more pay based on performance, holding certain certifications, or experience. Other unions have rules where pay is related to tenure, and employees compensation is directly proportional to their tenure.

The concept of white-collar unions is really interesting. I know a lot of white-collar workers think unions would mean that their crappy coworkers would abuse the system to make the same money while doing just enough work to avoid being fired.

I can understand the argument behind that, but I think unionization could help certain white-collar workers force their employers to support changes that improve quality of life and reduce burnout and stress.

For example, a sysadmin union might be able to dictate only a certain number of on-call nights a month, or prevent companies from calling sysadmins while they are on vacation. A developer union could mandate a certain number of hours a developer could work before getting comp time or paid overtime. A union could give developers who are worried about what they are being asked to do might be illegal or immoral the ability to say no without being punished (think the VW scandal).

A lot of white collar fields already have a body performing the role of a defacto union because they have licensing bodies. I can see why techy types don't have a licensing body, since techy types are a bit more rebellious than engineers as a whole, and we haven't had any 'major' disasters to force regulation of the profession. That being said developers are constantly working in environments that hurt their productivity and the quality of their work and at some point we need a way to enforce better working standards on organizations.

This is casual observation, but in the US, it seems like unions are much more likely to form when there are fairly egregious labor practices in a company. Though there are practical salary benefits to unions, it seems that safety and/or quality-of-treatment are bigger drivers of union formation. And I think a lot of news organizations are seeing them now, in part because of the decline of the profitability of those businesses leading to harsher labor practices.

Unions (usually) put a floor on your salary, not a ceiling. I'm a member of a union, and my salary is a good 20-30% above the union minimum.

I've never had to contact my union (though I've benefited from it indirectly), but my sense is that they're useful as advocates for their members interests, especially in larger organizations. Often, this can even be for simple "common sense" proposals that are not controversial, but are difficult for individual employees to make happen. Navigating the bureaucracy of large organizations is not easy, and unions help with this (by creating an additional bureaucracy admittedly, so they're not a perfect solution).

Variable and performance based pay is entirely possible within a union. Actors and professional athletes are all unionized and have these things.

The best way to think about a union is using the collective power of workers to set a floor on wages and labor conditions, not a ceiling. And best of all, they're democratically controlled, so they're members can create whatever structures and rules they think best serve their interests.

Pros: Collective bargaining for benefits, legal counseling, unemployment insurance

Cons: Union dues to pay for the above, possibility for corruption

It's basically like joining an additional, tiny government.

> possibility for corruption

Did we prove 99.99999=1? Not sure if that was a youtube myth or a reality.

Whatever the case, union corruption is worse than the petty fee they charge.

Simply put, a union just refers to the formation of a formal group of employees for the purpose of collective bargaining. I.e., the workers feel like individually their attempts to negotiate are not working so they get together to discuss rules, compensation, safety conditions, whatever as a group.

The questions you are asking likely have different answers for every union out there. The pros are collective bargaining. The cons are variable.

It is possible to get paid above the union negotiated rate, called above scale, or to start out at a higher than entry level pay step. It depends on the specific circumstances and collective bargaining agreement.

It depends a lot on the union and a lot on the culture of the union (and a lot of that culture is largely dictated by country), and on the agreement with the employer.

There's plenty of unionised workplaces (especially when it comes to professionals) that have large variation in pay, and there's other examples where pay is based on some formula with no variation (this is vastly more common when it comes to labourers and tradesmen).

I have only been a member in one union, it was during a summer job where the hourly employees were unionized. There was some special deal where I didn't have to pay the annual dues but got a prorated cost.

However, I did have to sit though the day long session where the union told everyone how they were there for the members and what that meant in terms of their interaction with the employer. Most of it was around insuring that I knew what things the union had negotiated and that I should not feel bad about demanding the employer honor their commitment when that happened. For example there were two 20 minute breaks (10AM and 2PM), there was 50 minutes for lunch including time to get to and from the lunch area, and if I was asked to work more than 40 hours a week it had to be paid at 1.5x my hourly rate, weekends at 2x my hourly rate, and holidays 3x my hourly rate. There were medical benefits that I pretty much ignored, and a formal grievance process if I felt I was being asked to do something outside my job scope.

The big message was that if my manager didn't live up to their obligations, the big union would make sure that the manager was made to understand what they could and could not do.

Every other job I've held I was not in a union. The difference in experience was pretty stark. Managers at non-union companies had no problem with intimidating employees to work additional hours to meet an unreasonable deadline that they had set, I've known managers who played head games on their direct reports to instill confusion and obedience, and have known managers who have gotten away with grossly unfair pay discrepancies between people they liked and people they disliked with little to no regard to their performance at the company.

Is it all managers? No of course not. And I have been extremely fortunate that if things were ridiculous and I couldn't influence change within the company I could leave and work somewhere else. That is much easier in the technical/engineering world than it is in a more trades oriented type of job.

On your question of wages, of the unions I've been in direct contact with, and the ones we've read about their negotiations in the news (Transit, Teachers, SEIU, etc) the wages are negotiated. You get what you get. Although at least some people augment their salary with overtime (for example a member of law enforcement providing security for an event).

Unions can also create definitions of when someone can be fired, which would be different for tech workers in California. Most employment in tech is "At Will" which means you can quit for any reason at any time and they can fire you at any time for nearly any reason. Unions often replace 'At Will' with contractual terms which define what it takes to fire someone and what their recourse is.

One of the most amazing things about unions I found in my career is that talking about organizing one at a tech company will get you fired faster than having relations with the CEO's spouse. It is a really touchy subject.

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