Union households tend to have $100k more in wealth than nonunion families | Hacker News Reader

Union households tend to have $100k more in wealth than nonunion families

businessinsider.com

120 pointsmooreds82 comments

This is basic economics.

The rise of income and wealth inequality is directly tied to the weakening of collective bargaining, corporate consolidation and globalization.

Source: https://home.treasury.gov/news/featured-stories/labor-unions....

Unionized workers are the only real backstop against corporate interests.

>Unionized workers are the only real backstop against corporate interests.

This is only true if you yourself do not possess greater bargaining power by having certain rare skills, that are in demand. Which is why the report shows that higher educated people benefit far less.

Someone would have to be incredibly full of themselves to think they have more bargaining power than an entire union would.

Unless you are literally one of a kind, there's always someone out there who could replace you. Replacing all of the workers that an entire union represents is a way more difficult proposition

The overall bargaining power is greater, sure. But the relative power isn't. They can always just leave and work somewhere else, a union literally does not have that option.

As an individual it is far easier to negotiate of you have an in demand skill. Which is obvious if you look at the study in the OP. College educated people benefit far less from unionization, they can negotiate for their own.

spoken like a fairly recent grad. an ambitious young person's perspective.

you will eventually learn that you are beyond expendable in this world, despite how 'skilled' or adept at 'negotiating' you believe yourself to be (or actually are for that matter). we all are. what you fail to see yet is that you are not more skilled nor more adept than 'The Man.' and you're characterizing yourself as being anything 'more' than non-'college educated people' is simply successful divide-and-conquer—a power struggle strategy immemorial.

What people fail to realize is that the leadership systems of Corporations: Boards of Directors, Executives, Management and HR are all effectively organized against them, to make sure the business gets what it wants as much as possible

When you ask your manager for a raise, they might be your biggest fan and want you to get that raise, but there is a whole system that is going to resist it, because paying you less is better for the company. You're not bargaining with a person you're bargaining with a system. And the system is built in such a way that it is incredibly difficult to persuade at an individual level

Workers can benefit from having their own system inside of the larger corporate system that is working for them, instead of this every man for themselves stuff

Both can be true at the same time.

Companies both treat senior engineers as expendable and will fire them on a whim - while paying them whatever they dictate and rehiring them few months after the layoffs for 1.5x compensation.

I'm happy being expendable. It means I can just pick up my things and go somewhere else whenever I please - any place I go has some spot for me and will pay me many multiples of the national average wage.

> I'm happy being expendable. > It means I can just pick up my things and go somewhere else whenever I please.

You are conflating expendability with redundancy.

Two sides of the same coin, IMHO

Oh my that’s a skewed perspective. That lack of perspective—specialty of the long-gone Jack Welch—-is what’s led us to the rapid fall and third-tier engineering of Boeing today.

They are definitely not the two sides of the same coin.

What happens when your education is no longer relevant to the market? And you’ve had kids and don’t really have the time to retool and level up your skills to regain your leverage. Or your industry becomes saturated with highly skilled people and your leverage is steadily reduced in ways you can’t address. Virtually no one is special enough to avoid some or even all of this.

As I am approaching the retirement age, I don't see this happening. I actually can't even imagine education expiring somehow or marketable skills needing "retooling". But even if these scenarios all happened, you are basically advocating that somebody still have to provide highly paying job for you even though you don't have an education or skill and there are plenty of people who are higher skilled than you? Would you hire somebody like that to do work on your house or, perhaps, you'd like to receive medical treatment from a doctor like that? If not, why others should hire you?

Then you are of very low value to your employer and a union acts as a social benefits organization. Essentially you are payed by the people whose skills are more valuable than yours.

> College educated people benefit far less from unionization

They benefit far less but they still do benefit on the whole

So... Not seeing the advantage for not unionizing, unless you think you're one of the top top top performers who might potentially be capped by a union instead of one of the mass of people who would be lifted up by it

It’s been a hot minute since I watched this episode[1] so the points aren’t fresh on my mind, but unions are good for everyone even if you aren’t in one.

And yes, in demand skills do make it easier to bargain as an individual, however, that’s assuming those skills are needed at the level which you posses. In my field (web development) I’ve seen much less money go to far more people of a similar but lesser skill than my colleagues because you can throw a handful of people at a fairly decent project and get the desired immediate result. Long-term that code probably won’t stand, but that’s not really important for things like agency work where there’s some incentive to continue having work to do anyways.

[1] https://youtu.be/rFDP4hS7j98 - Unions Make Things Better (Even If You’re Not In One)

At some point, higher individual compensation doesn't matter much if everyone else in your community is overworked and underpaid.

I think many Dutch or French software developers are living better lives than developers in California, all things considered.

>At some point, higher individual compensation doesn't matter much if everyone else in your community is overworked and underpaid.

I think that totally depends on the individual and their circumstances.

>I think many Dutch or French software developers are living better lives than developers in California, all things considered.

European developers generally earn much less than Americans, especially after taxes you can get to a 2x difference with comparable cost of living depending on area. In generally wages in Europe are much more even, here in Germany you have a heavily bracketed income tax system, even significant increases in wage usually become much smaller if you consider the additional taxes.

Developers the world over earn much less than Americans. It's why I've always told American developers to be careful what they wish for when it comes to remote work.

But it might just be possible that there's more to life than money.

>But it might just be possible that there's more to life than money.

There is yes, but a house is still paid in money.

Housing is universally messed up everywhere in Western world, no matter salaries. Where the salaries are higher, houses prices are accordingly higher as well. Only places where housing is affordable are the ones with no jobs. Good for remote workers, but not much else.

>Housing is universally messed up everywhere in Western world, no matter salaries.

Not to the same scale though. IN Europe and especially Canada housing is way more expensive to buy than in the US relative to local wages. Americans forget how good the4y have it.

This is definitely the case for me. The number one thing bringing down my quality of life is that my friends don't have time/money to do things and I'm worried about their physical, mental, and financial health.

All individual compensation is a delta over what a low skill worker would get.

Pay fast food workers 80k a year and software engineers would start at 300k.

This is not true even as a rule of thumb, because it neglects that aggregate wages can increase at the expense of returns to capital (i.e. profits).

But more to the point, it neglects elasticities of demand.

Also known as inflation.

No. Independent from that.

Jobs that require more skill or jobs that are more difficult have to offer more to get people to work for them. Raise the bar at the bottom and all wages will go up, otherwise workers will "demote" themselves. This is a distinct effect from prices raising and workers asking higher wages to counteract inflation (if they could do that why aren't they?).

FWIW, I think you have this exactly backward. It’s higher incomes at the top that drive higher incomes at the bottom. Low skill workers in developed countries make more because they are part of what is essentially a labor cartel: there are certain jobs which can only be performed by, e.g., an English speaking person who understands the American cultural context and who is physically located in America. And restricted immigration and language barriers prevent competition from new entrants. So as more people are pulled into high skill, high pay work, incomes for even low skilled people go up, because their competition decreases and overall wealth in the society, ie wealth available to pay for their time, increases.

"Raise the bar at the bottom and all wages will go up"

The people at the bottom might be making more, but they won't have spending power for very long because the cost of everything will go up. This cycle will just continue forever, unless the government starts fixing prices, which never leads to a good outcome.

When fast food workers wages are raised, we might see a few dollars more for meals. When you raise the wages in every other industry, it has a cascading effect. Just look at the number of jobs between products on the store shelf and how it gets there. Delivery, trucking, packing, shipping, etc. In this one example, it would raise prices 10X.

Then everyone gets to benefit, no? All developing nations have far lower wages than the west, but that's often offset by lower living costs. But try to buy something out of the international market and you'll quickly feel envy. If there is an issue with higher wages then I don't see it

Nobody would benefit because if fast food workers start at 80k, then a basic hamburger would start at $20. And an iPhone pro would start at $2000.

Your argument doesn't match reality. We don't need hypotheticals here:

McDonalds workers in EU countries earn significantly more than their US counterparts, yet a Big Mac costs the same of just a few pennies more.

>… yet a Big Mac costs the same of just a few pennies more.

What? Do you not know how to check Big mac prices online in other countries?

Don't you know how to check?

Danish McD's workers earn $20/hr+ but their Big Mac costs just 80 cents more.

https://www.nytimes.com/2014/10/28/business/international/li...

You linked an article from 2014…

Plus it doesn’t pass the smell test, there are plenty of photos online of danish mcdonalds menus going back to at least 2018, that I could find in two minutes of searching. That clearly shows a standard Big Mac meal is 60 Danish Krone. Which was 9 USD to 10 USD depending on when you pick the exchange rate in 2018.

In the US, depending on location, the same meal would have been 5.5 USD to 7 USD in 2018. Maybe a bit more in Hawaii.

Maybe there were a few places in Denmark selling it for much cheaper, and it was being compared to Hawaii prices, hence why this notion came about, but that’s a ridiculous stretch.

A hamburger meal is already $20

No, it isn't distinct from inflation. Higher wages necessarily means increased cost for product, leading to an overall increase in cost.

This is exactly what inflation is.

Let's map that opinion to higher ed, where we can agree there's a high concentration of education:

https://www.aaup.org/programs/collective-bargaining

https://www.insidehighered.com/news/faculty-issues/labor-uni...

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

Highly educated people (and I'm including more than terminal degree holders) may be more reluctant to join unions out of a misplaced sense of self-sufficiency and pride, or a perceived association with "class issues", despite constant pressure and complaints about their individual compensation.

That's very deluded and short-sighted. More often than not, investors and shareholders hold more weight in large companies than whatever you can bring to the table. Not to mention skills that are rare often don't have huge markets, otherwise there'd be colleges teaching it in a degree and it'd be no more rarer than other skills, don't you think?

I don’t think this is true - the development of the baseball players union in the 1970s is a quite strong counterpoint. I’d be interested how you think about that?

Funnily enough, even if they don't call it explicitly, some of the highest paying professions in the world - consulting, finance, law, medicine - all have pseudo-unionized structures in place. The only difference being uniformity in pay, which is a feature I've mostly seen only in US unions.

Lawers are unionized but just name it something else. Etc.

Lawyers essentially have a guild. They set up systems like the Bar to prevent outsiders from plying their trade.

It has similar functions as a union but predates it by several centuries.

I think our are taking about a professional organization. Those do not perform the same function unions do.

The point of unions is to gain bargaining power against massive corporations. If you are self employed, part of a small company or easily replaceable (which is the case for most lawyers), because your professional is only a tiny part of the company a union does nothing for you.

Professional associations exist for different reasons and have different goals.

Ah yes, as everyone knows, "having a trillion dollars" is famously no match for "being able to code".

Yes. No trillion dollar company can tell me to work for them. If they want to employee me I have all of the bargaining power I could possibly have.

> The rise of income and wealth inequality is directly tied to the weakening of collective bargaining

That would make sense, but the data in the article do not seem to be cooperating.

1917-1950: Union membership up 3X. Top 1% share of income reduced by 2/3rds. Looks like a causal relationship!

1950-1980: Union membership is reduced by 1/2. Top 1% share of income... is reduced by 8/10ths? Huh.

1980-2020: Union membership is reduced by 1/2. Top 1% share of income goes up 10X. Basically the opposite of the previous period.

When the geese come in, you can buy these little concrete coyotes that keep them from colonizing everything and crapping everywhere. In general, it takes just a year or two until they completely avoid the area, and it lasts for about a (goose) generation.

I'm sure there's a parallel in there about beating back the rentseekers and vulture capitalists.

> Unionized workers are the only real backstop against corporate interests.

This isn't true, and is often undesirable since unions serve workers, not customers.

Competition is what keeps corporations in check, and is most likely to benefit everyone. Of course unions are important to workers and also have their part to play.

The restaurant industry is an extremely competitive industry, yet I don't see their employees at the large enjoying any sort of prosperity.

Competition helps customers. Unionization helps workers. Both should happen in tandem, not exclusively.

The majority of unionized workers in the united states are government employees. The union protects the incompetent, shields them from responsibilities, and argues against the public interest. Public sector unions are corruption and a plot against the citizenry.

Being that powerful, think of what unions could do for everyone else! Hell yeah!

> Unionized workers are the only real backstop against corporate interests.

The problem is just like you said, though: Wealth inequality weakens collective bargaining.

A union only holds power by being able to force a stoppage of work, but workers can only afford to stop work if they are rich. Without the arrow of wealth inequality reversing, unions will continue to falter anywhere the workers are poor.

That's just basic economics. However, figuring out how to reverse said arrow is extremely complex economics. If we knew how, we'd have done it already.

Cool. How do I start a unionize my family and how do I get my wife on board.

Watch out, I would try to union bust all teenagers. I guess it might be ok since parents have seniority.

I remember "turn out day," where all the recently turned out [apprenticeship graduates] become journeymen. You start noticing all the new trucks your idiot co-workers are financing, and wonder how much better it'll be once you've turned out.

At least in my union experience, the greatest "cost savings" that most families have is that our health insurance premiums cost exactly the same whether a single male, or married father to dozens. Collective bargaining has some of its greatest strengths for Joe D. Everyman.

It is worth it to look at the actual report. Sadly it makes no attempt to actually compare equivalent works, it just has two categories. Obviously union membership differs greatly between job types.

The report shows that people who benefit from unions are those of low education levels, there the leveling effect of unions makes the biggest relative and absolute difference.

For college educated people the benefits are very small in terms of wealth. I highly suspect the more worthwhile your degree is the less valuable unions are. If your personal skills are more in demand than the average employee of the union, then being part of a union will drag you down. Which is a big reason why few people here would see any actual benefit from a union. Aside from that, my personal views on some unions where I live are extremely negative and certainly should not be allowed to act the way they are acting.

It should also include the households where the people worked in union shops that went out of business. Tesla, a non-union shop, makes the best selling car now. The union places in Detroit can't sell electric vehicles period.

Or consider the "wealth" of the people in Hollywood who are pretty much out of work because most of the production has stopped during the various strikes. Their savings are evaporating because one union after another wants to strike.

This is a pretty biased analysis. Unions tend to concentrate in certain sectors - thus to draw a conclusion it's the union, and not the type of job, that is driving high wages seems to miss a major confounding factor.

The article claims it knows the direction of causation, but has no proof.

Aren’t these just both caused by other factors? (Skill level, desire for stability over spending, etc)?

Unions work, unionize.

Confusing that the article has different numbers on the wealth gap than the source material:

“Working-class union households hold nearly four times as much median wealth ($201,240) as the typical working-class nonunion household ($52,221), suggesting that membership vastly increases wealth for working-class families.”

https://www.americanprogress.org/article/unions-build-wealth...

This is a poorly done study. Doesn’t even control for profession.

Take union electricians vs. fast food workers. Union electricians will make much more, like the article it saying. So what? What’s the conclusion here as it relates to unions?

I’m not sure what the study says, but I can tell you that union electricians make more money than non-union electricians. This goes for all skilled construction trades: union plumbers, fitters (both pipe and sprinkler), and tinners all make more than their non-union counterparts.

Prevailing wage requirements are mandated in government funded construction contracts specifically because non-union labor is paid less and the government is willing to pay living wages for their projects by forcing non-union contractors to pay the union wage + fringes.

FWIW I manage union electricians at a NECA member shop that hires union labor from IBEW locals and only subcontracts labor to union subcontractors.

I believe this to be the case too, but what conclusion can be made?

It’s like saying OpenAI researchers make more than university AI researchers. OK, but the rates of employment and ability to attain such positions are different.

One shouldn’t use that fact to say unequivocally industry is better than academia.

I know some folks in the trades, both union and non-union - getting a union job is difficult.

Of course the government is willing to pay, it's a grift. The union is shaking down the taxpayer, the politicians are buying union votes with the taxpayer's money.

What an absurd study - confounding variables crawling out of every corner.

At the expense of other families not a party to the monopoly.

Unions: join us, let's increase our bargaining power together and improve all our economic situations.

Anti-union workers: No.

Also anti-union workers: Look at these union workers making more money than us, at our expense.

That's not a contradiction. Unions can and often do become just as dysfunctional as any other kind of government. People abuse their power and force out those that won't go along with it.

So do companies. What's your point?

> At the expense of other families not a party to the monopoly.

Corporate profits are unpaid wages. Non union workers can organize, it is a choice. Otherwise, continue being economically impaired by corporate shareholder and management actors on your own time. If you don’t organize against corporations, they would extract until there is nothing left (broadly speaking, some companies don’t embody this ethos, but many do).

Union support is highest amongst Gen Z, so you’re just waiting for older conservatives and anti union folks to age out for the pendulum to swing back from the damage Reagan did. 1.8M voters age 55+ age out every year, half of those folks are still in labor force participation, while 4M voters turn 18 ever year. It’s a demographics and electorate turnover story more than anything (trajectory + time horizon).

https://www.marketplace.org/2023/01/03/gen-z-is-the-most-pro... (“Marketplace: Gen Z is the most pro-union generation”)

> Corporate profits are unpaid wages.

what about corporate losses then?

Layoffs, pay freezes, cuts to wages/bonus/raises, etc?

They're not reasons for a CEO to get a multi million exit package.

A lot of leftist argue for worker owned businesses. Wouldn't that mean that losses would effectively be owned by the workers?

What do you think happens when a company is losing money?

It's not like the shareholders are just eating that loss out of the goodness of their hearts. Instead there are layoffs, cancelled projects, and pay cuts. All of those are workers bearing the cost of the losses.

Are discounts then customers pilfering the pockets of the workers? Combo deals?

How consistent is your ideology really?

> Are discounts then customers pilfering the pockets of the workers? Combo deals?

No. That's marketing. Marketing is a strategy used to help turn a profit. Giving away that profit to shareholders makes absolutely no contribution to the ability of a business to turn a profit. Those aren't remotely close to similar.

And what's wrong with that?

I'm sorry you're choosing to let corporations exploit you instead of fighting with us for better wages. But that's kind of on you, not on us.

People can have bad individual experiences with unions. A not very pro-union friend ("They're not all good, you know.") told me about her early career as a typesetter, how she taught herself how to repair the linotypes and letterpresses, the difficulties after unionization, and their shop's eventual shuttering. She felt that the union had taken things over and then failed them.

When I asked her how the hell non-computerized typesetting was even still a job in the 80s, she looked kind of thoughtful for a minute and just said "huh".

The world is shades of grey, not black and white. My only experience with union work is as a non-union developer brought in to fix the software of union government developers. They were legitimately terrible at their jobs, unable to code anything or be useful outside of QA work. I made significantly more money than their capped government salaries as well. The flip side is their job, healthcare, and families were much more secure than mine.

I’m fine with people being lifted up, but it’s very frustrating when your coworkers carry no burden and do nothing. I have no idea about other industry, but in government it’s so hard to let people go that no one bothers to even start the paperwork, they just hire non-union contractors to do the actual labor. Worst of all worlds.

This is average middle America, not a tech hub in any way. I’m a fairly average dev.

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