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Comment by glasss | Hacker News Reader

I know a few small business owners that have said if their staff unionized they would just close the business.

These aren't bad bosses or people who don't know how to run a business. They just know if their staff unionized and the rest of their industry didn't, they wouldn't be able to compete on price or keep the necessary number of staff.

I think it's easier to pick on Amazon or bezos than it is to deal with the political forces that you've mentioned, or come to terms with needing to unionizing a whole industry before it would stop hurting small businesses.

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It's in the union's interest to keep the company alive too.

But then what is its purpose?

Management has no reason to oppose changes that cost them nothing with or without a union. In an industry with thin margins, anything that does cost them money puts them out of business. Meanwhile a union that can't achieve meaningful concessions is collecting dues for no benefit, requiring the company to pay more to retain talent and thereby putting them out of business just by existing.

This is a very simplified way of thinking about it. Costco manages to be profitable while paying more than the average to retail workers in an industry with thin margins. Whole Foods managed this too until it was acquired.

It's funny how the US is often presented hyper innovative, and economically dynamic, while at the same time it is claimed that basic issues like universal health care and workers rights - problems that are solved in many other developed countries - are intractable in the US because of "thin margins" or "the deficit".

Costco operates in the same market conditions Walmart. It's just that their revenue to employee over twice as high, so they can sustainably pay a small number of high-quality workers more rather than a large number of lower-quality workers.

Pro-labor operates under the false assumption that employing a small number of well-paid workers is better for society than employing a large number of lower paid workers. Let's say Walmart could afford to pay a "living wage" by replacing their shelves with pallets, laying off most of their shelvers, and redistributing their wages to the other employees. Would that really be any better?

In my experience, the union's interest is more in keeping the union alive.

Which business and union are you talking about specifically?

As unions usually live on either/and employee dues and government grants, making sure both the company and the industry overall is doing well is in their best interest, as otherwise the union will certainly not be alive.

So would be useful to see an example of a union NOT wanting good for the company/industry as that would be an outlier compared the the rest of them.

That's just an empty threat similar to the threats to do the same if the minimum wage is increased. Every time it happens, businesses adjust.

> people who don't know how to run a business

I submit that if business can't exist without a government subsidy that allows them to pay their employees less than a living wage, then the people running the business do not, in fact, know how to run it.

I agree, but I know first hand that the businesses I'm referring to pay a minimum salary of $45K and the vast majority of employees are above $55K. These businesses are IT service providers, providing their services to other small or medium businesses. The clients in this industry are very price conscious and wouldn't care that the staff unionized at one company, they wouldn't be able to justify a significant price increase for the same services / value.

That's $22.50/hr before taxes. It's barely a living wage in for a single adult with no kids some places.

Do you run a business? I do. Industry-wide races to the bottom that have existed for decades before I was even born have put margins so razor-thin that paying more than slightly higher than the usual industry thresholds is untenable for smaller businesses. You raise your price too much to compensate, and your business dries up. Regulations designed to curtail abuses by large corporations can be devastating for small businesses.

I don't like this fact, and this obviously isn't going to be true for every industry, but these twee 'truisms' don't accurately represent reality.

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