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Comment by st26 | Hacker News Reader

on balance, we do better when workers have actual bargaining power.

I don't know, look at some of the cities around the country going bankrupt as the bill comes due for union-imposed obligations. I'm not against collective bargaining, but it seems like unions as they were known fifty years ago were destined to eventually collapse and/or make their communities eventually collapse.

Now, collective bargaining could just be a cyclical thing- power to the bosses, power to the workers, power back to the bosses. We could be approaching the swing back in the other direction.

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That can just as easily be explained by government officials not doing their duty, and not funding the obligations they promised. During the boom times, they assumed growth would always be huge, so they diverted money meant to go to these funds to cover other shortfalls in budget.

If party A makes unreasonable demands and party B accepts, responsibility does not lie solely with party B.

This doesn't tell the whole story. In states like Illinois, the pension assumptions were unrealistic to begin with. From what I've read, they assumed 7% annual growth and included 3% annual increases to account for inflation. Even if government officials had property invested the funds, we still would've ended up with a massive shortfall compounded over several decades.

Unions are incentivized to bargain for as much compensation as possible and politicians are incentivized to give it to them if union workers make up a significant chunk of votes. Politicians don't have to be concerned with whether or not those obligations are realistic because they'll be out of office by the time the whole thing falls apart.

"Unions are incentivized to bargain for as much compensation as possible"

Yes, they are. And companies are incentivized to bargain for as much profit and as little employee compensation as possible, yet people here seem to consider that a moral imperative. I cannot, and will not begrudge unions for trying to get the best deal for their members while that is the case.

The problem isn't so much that unions are incentivized to bargain for as much as possible. Every one who participates in the economy is trying to get the best deal for themselves. The problem is that politicians aren't restrained by cost. If a union demands that hole diggers be paid $100 an hour instead of $10 an hour, a politician will gladly give it to them even if it will bankrupt the state.

Edit: I think I should note that I'm specifically referring to unionized government workers.

That's entirely wrong; those politicians are still accountable to the voters.

>companies are incentivized to bargain for as much profit and as little employee compensation as possible

Not necessarily, especially when employees are in high demand. Netflix has done quite well by paying employees well above average in order to effectively have their pick of the talent.

Paying employees poorly can increase training costs, recruiting costs, cause negative customer perception, etc.

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