Hacker News Reader

Comment by jasonlotito | Hacker News Reader

> Competitive markets produce societally best outcomes

Define "societally best outcomes". By using the word "societally", you are saying it's not he best outcome for the business, nor is it the best outcome for the employees, nor the best outcome for the customers, but the best outcome for the society at large. Your MTA example shows that a union is great for workers. Please explain.

Considering unions are used successfully in many industries and are supported by both major parties in the US, you'll have a difficult time explaining how they are all wrong.

> Smaller and wide set of unions in an industry can be effective,

Isn't this the KickStarter union?

Also, what's a "Smaller and wide union"?

Finally, if unions are so bad, why do many of the largest companies in the world continue to hire from unions?

View on HN

> Finally, if unions are so bad, why do many of the largest companies in the world continue to hire from unions?

Because it's illegal not to. I dunno if you know this but if you have a union shop, the company can't just hire non-union employees. (In most cases) Once your company unionizes you can hire union employees, or go out of business.

Realistically what companies do is incorporate a subsidiary in a non-union jurisdiction and outsource the jobs to the subsidiary.

MTA is great for MTA employees. The remaining 10 million or so New Yorkers pay the cost.

You can't assess these things in isolation.

If the Foxconn factory unionized, you can bet iPhones would cost hundreds of dollars more. Who bears that cost?

Consumers of iPhone/society at large (when extrapolating to other businesses)

>If the Foxconn factory unionized, you can bet iPhones would cost hundreds of dollars more.

I'd be willing to bet that they don't. iPhone prices are set at the highest price that Apple determines people are willing to pay, not by the cost to produce it; even the costs that do exist are mostly materials, not labor costs. Labor costs are close to 1% of the sticker price [1]. This is the same as the argument that erroneously claims that if you paid fast food workers well it would lead to $10 big macs, when other countries with much higher wages have comparable prices to ours.

[1] https://www.investopedia.com/news/what-it-costs-apple-make-i...

Apple sets prices based on what they think will maximize their profitability. If iPhone cost $1M dollars, there are still people who would buy it. Demand is a curve, not a fixed value.

Sorry, I was being unclear. I meant "people" in the aggregate, as perhaps a stand in for the demand curve. And that Apple sets their price based on the highest point on that curve which still maximizes revenue, then uses their absolutely ridiculous amount of cash-on-hand to reserve capacity and set the supply curve wherever it would intersect that point on the demand curve. (Which is part of why Apple weathered the chip shortage better than most)

i.e., at the scale they operate, they are beholden almost exclusively to demand, rather than supply, and what supply constraints they do have are mostly a matter of material costs and logistics as opposed to labor.

As the other commenter points out, my argument is that this pricing method (and the comparatively tiny input labor costs) mean that the cost of labor has an effectively negligible effect on pricing, and only would eat into profits.

I'm not sure what you're saying, but GP was arguing that an increase in wages for manufacturing iPhone would eat at apples profit margins, not add to the products final price.

Yes, and if margins decline or go negative, then price must be raised

Reply on news.ycombinator.com