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Comment by umvi | Hacker News Reader

> Then they should help local unions (not that local unions would be useful for, say Amazon or Walmart) become a thing and give them incentives not to become part of a big union.

Or, even easier, just pay your workers well, give them decent benefits, and do union busting to prevent them from forming in your company. Why outsource treating workers well to a bureaucratic middleman when you can just treat workers well yourself? (keep in mind this is for small businesses, not mega-corporations)

> Otherwise, substituting some compensation with part-ownership makes it so that the interests of big unions align more with the interests of other stakeholders.

Wouldn't that corrupt union leadership over time?

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>Or, even easier, just pay your workers well, give them decent benefits, and do union busting to prevent them from forming.

Never going to happen, there will always be a point where the company will try to minimize worker salaries as far as it can get away with.

>Wouldn't that corrupt union leadership over time?

No, you would pay employees using profits in part, and implicate them into the decision-making process. That way the incentives of union-leadership, workers, and stakeholders align. You can also push for union structures that minimize the power of union leadership and instead give it to the rank and file. Basically, making your company a bit more into a worker-coop fixes the issue.

> Never going to happen, there will always be a point where the company will try to minimize worker salaries as far as it can get away with.

I disagree. Not every company is public, first of all. So not every company is beholden to shareholders who demand endless growth at any cost. There are lots of private companies that are content with the size they are at, and with the revenue they are generating and aren't tempted to start squeezing their employees.

But that's not the issue. The issue is competition. Eventually, you have to cut costs in order to be competitive even if you're very nice, and if you read business administration textbooks cutting employee compensation is often the primary way.

Ok, so then how does a unionized company stay competitive if it isn't allowed to cut costs by reducing employee compensation? You are suggesting only unions know the effective secret methods of cutting costs that business-textbook-writers are unaware of?

It's quite simple. They either cut profits, or offer employees equity in compensation for lower wages. That goes against what the owners want, but it helps the workers and maintains the usefulness of the enterprise.

I believe in the competitive scenario, there are no profits to cut. It's not clear to me if equity is worth anything if there are no profits to distribute and the company is not growing.

I think the point is that whether it is a "nice employer" or a union, the company will be less competitive. This strikes me as a tragedy of the commons which would have to be resolved by legislation to force all market participants to offer the same benefits. (Of course, the difficulty then are participants putside of your legal system, but taroffs could hopefully capture this detail.)

Equity is always worth something, because companies own capital, and capital is inherently valuable.

In this scenario, there is no loss in competitiveness. The union bargains for pay when there is profit, and when there is no profit it bargains for capital. At the limit, when the workers own the company entirely, then their own self-interest will be to reduce their salary in order to protect their equity. In this sense, their salaries will fall in line with what they would earn in another company, or slightly higher, but they will have massively more assets and equity than if they didn't have a union.

Of course, in reality, if there was no growth there would be bigger problems, but you get the gist.

I really fail to see how unions in this scenario make the company less competitive, or create worse conditions for the workers than without the union.

Because that runs counter to profit?

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