Comment by fny | Hacker News Reader

Comment by fny | Hacker News Reader

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This is a really out of touch answer akin to how globalists and economists argued for off-shoring because “competitve advantage.” The reality is far more nuanced. For example, one could argue wage growth stagnated in the US and instead we had tremendous growth in developing countries. For many Americans, globalization was a tax that further exacerbated income inequality. Congratulations: this is Pareto optimal! Some company’s bottom line is improving, some shareholder is profiting, and wages stagnant—so society is “better off as a whole” definitionally… but is it really?

The same can be said about unions and market power. Sure deadweight loss exists. Someone will absorb the cost, but it’s not necessarily “the people”.

Companies cannot pass costs onto consumers as easily as economists claim, so often profits take the brunt of the deadweight loss. Think of it this way: if companies could just pass on the cost, why go through the expense of fighting the union when they could do just that?

Mind you, I’m talking about unions in general: it’s nuanced. I honestly don’t know enough about the specific demands here to have an opinion, but I encourage everyone to listen to an interview with the longshoremen.

>Someone is going to absorb the cost, and at times, corporations cannot pass that cost onto consumers, so shareholders take the brunt of the deadweight loss.

Why can't they pass it on? It's not like consumers would have other options, because you know, globalization just got killed.

Because more often than economists realize consumers can and will reject a higher price. There’s A LOT of substitutes for most things outside of commodities.

Try selling products on Amazon, and you’ll experience this. There’s a clearing price for your product, your costs be damned. If you try to “pass it on” some other product—-probably in a different category—-will out compete you, so you must forgo profit to stay competitive.

It’s a little different when the price goes up across the board (COVID inflation), because everyone experiences the same increase and everyone passes along the cost.

As a concrete example, I sell a card game on Amazon. If I shift the price up and down, I can see supply and demand in action: there’s an optimal price for my product where I maximize units sold. If I try to raise my price customers will go buy another card game. If we all raise our prices, customers will switch to some other toy. If all toy prices go up too far, people will send their kids to the park.

My point is that unions are a nuanced topic. I disagree with the terms of this strike, but if you listen to the longshoremen you can hear their anxiety.

There’s some middle ground we need to find, and throwing supply and demand curves around in absolutist terms won’t do that.

> Because sometimes consumers can and will reject a higher price

Often times this is because they don't have enough money because some jackoff keeps cutting their wages.

I think the ports will just pass along the cost. Whatever bargain the union strikes will be uniform across all of the ports and so they won't be able to undercut one another.

>It’s a little different when the price goes up across the board (COVID inflation), because everyone experiences the same increase and everyone passes along the cost.

What do you think will happen if globalization was killed? Given how interlinked economies are right now and how much US imports, widespread price rises like you described is almost inevitable.

This is a really out of touch answer because it goes off for a paragraph on an unrelated economics topic that also makes the writer similarly uncomfortable to the reality that unions are often bad before finally bringing it back around to relevance in the last sentence, which misses the point. Of course someone is going to have the cost somewhere. That it can be shareholders in the situation where there is monopsony without causing other pricing ripple effects is entirely the point of why a union may be doing good in that situation. In pretty much every other situation that could apply to the specific dock workers situation from the article, a union is doing zero good to actively doing harm via price manipulation on labor costs.

>Of course someone is going to have the cost somewhere.

unions also exist because employees are almost always where the cost goes if corporations have a choice. lower wages, less hours, or straight up cutting staff while forcing remaining staff to work harder under duress.

you can cynically call unions "blame shifting", but everyone is simply playing their best cards, since loyalty is not longer a center ideal for a modern company.

Of course everyone is playing their best cards. The question is which cards are good and which cards are bad for society and the union card is clearly bad because it is exercising market power (by withholding all labor) to artificially push labor prices higher. You guys act like corporate abuses are bad and labor abuses are virtuous when you should be against both because both are the same damn thing: Market power abuse.

Well if we consider the government as "managers of society", they require an educated populace stimulating the economy that they collect taxes from. They have to balance it with company taxes, but at the extreme of all automation, "society" suffers in this lens.

Previous means of automation managed to create jobs and boost productivity to unseen levels, but I think we're approaching the physical version of "speed of light" on how productive we can get in manufacturing by vertically optimizing. So automation will soon start to remove jobs instead of add them.

>You guys act like corporate abuses are bad and labor abuses are virtuous

In a general concept, yes. Because corporate abuses always benefit the people who need the money the least for survival. That's a pretty hard notion to shake.

Likewise, you can consider civil disobedience (which strikes are) "bad", but we only get there due to the former happening for too long. When it's easier to collectively walk out than to petition your representatives to give society a living wage, that's says a lot about "society"

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