Comment by EvanMiller | Hacker News Reader

Comment by EvanMiller | Hacker News Reader

This has been a knock-down drag-out fight and a lot of fun to watch. VW hates the UAW, but they can't say as much because being seen as anti-union would hurt their image back in Germany. Thanks to NRLB rules, VW can't make any statements about rewarding the workers for not unionizing, but that hasn't stopped Senator Corker from saying he heard it on good authority that VW would bring production of a second car to the Chattanooga plant if the workers rejected the UAW. That was a dirty/brilliant move on Corker's part, which both advanced his anti-union agenda and set the expectation that VW will add a second production line to its factory, which VW has been considering since the Passat hasn't been selling as well as they initially planned.

Framing the unionization effort as a "works council" was ingenious marketing on UAW's part, but apparently wasn't enough to persuade the Tennessee good old boys to take the Rust Belt gambit. If you've ever heard stories about how GM & Co. run their factories you'll be amazed anything gets built at all.

I want to ask you. Do you know anything about Detroit? Everything I read from people who've left there blame the unions for driving out the industry through ever increasing pay raises to the point where industry can't afford to stay. You seem to be more knowledgeable about the unions so I figured I'd ask you.

I think there's definitely a localization problem with Unions. If Unions were everywhere and manufacturers had nowhere to run to, we'd probably have a really healthy middle class.

you don't need globalization to kill the stillborn unions from the us.

the same dysfunctional individualism that make so many workers opt out for the short term (or in this case the promise of middle term) extra profit also make the leaders shaft the ones that join for a little criminal profit.

german workers have the cultural pragmatism on their favour.

Translation: everyone who wasn't an auto worker would be slightly poorer.

American auto unions fundamentally undermined any incentive auto manufacturers had to innovate. If a man with dynamite digs more holes than one with a shovel, is that man's increased productivity the result of his own effort? No. Auto unions claim pay raises proportional to increases in output per worker (productivity), regardless of the sources of these increases. This means manufacturers have no incentive to invest in better facilities or to innovate, as any profit from this innovation would be eaten up as wages.

>Translation: everyone who wasn't an auto worker would be slightly poorer.

I think the theory is that if all workers were unionized, they would be able to negotiate for a larger share of the profits that are currently taken by the owners of capital.

>Auto unions claim pay raises proportional to increases in output per worker (productivity), regardless of the sources of these increases.

You are assuming a world where the union has absolute power; The role of a union in a market system is to negotiate with the owners of capitol.

Agree or not, (and my personal beliefs are closer to yours than to the comment you are responding to.) it's important to at least understand what your opponent is trying to say.

>I think the theory is that if all workers were unionized, they would be able to negotiate for a larger share of the profits that are currently taken by the owners of capital.

How would them negotiating for a larger share of the profits be a good thing when they were already taking enough of a share of the profits to drive auto companies into bankruptcy?

>You are assuming a world where the union has absolute power; The role of a union in a market system is to negotiate with the owners of capitol.

If you have laws where only union members are allowed to work in auto factories, or that non-union members aren't allowed to work there, then the unions do have absolute power within those industries.

>It's important to at least understand what your opponent is trying to say.

I understand what they're trying to say. I'm just responding that paying auto workers more would not result in a net benefit to the middle class. If as the parent's scenario implies there is nowhere else for manufacturers to find labor (which implies no outsourcing), then for every increase in automobile prices that's brought about by increases in auto workers' wages, that means less resources available for car buyers to spend on other things.

Unions in the American style cannot make the pie bigger, they can only divide it differently. More pie to unionised workers hence means less pie for everyone else (including the other workers who now can't find work as auto makers can afford fewer employees as they have to pay them more).

>I'm just responding that paying auto workers more would not result in a net benefit to the middle class. If as the parent's scenario implies there is nowhere else for manufacturers to find labor (which implies no outsourcing), then for every increase in automobile prices that's brought about by increases in auto workers' wages, that means less resources available for car buyers to spend on other things.

There is another party to the transaction, the owners of capital. Generally speaking, pro-union people argue that capital is in too strong of a negotiating position, and the workers need to unionize to negotiate against the owners of capital. If capital takes less profit, in theory, you can have lower prices and higher wages.

Yes, in the real world, it's messier than that. But, in all real-world business deals, yes, there is surplus value, but who gets that surplus value?

But the bit you are missing here, I think, is that the owners of the capital are a third party, and the more profit they take, the less surplus value is left for consumers or workers. (I'm not saying that eliminating profit would be a good thing, or even that minimizing profit is a good goal. I'm just saying, there are three parties to that negotiation. Three parties negotiating over that surplus value.)

you said:

>Unions in the American style cannot make the pie bigger, they can only divide it differently.

Which is exactly the point. Joining a union is very much the equivalent of hiring a lawyer (or other professional negotiator) to negotiate a business deal for me.

So yes, there is a conflict of interest. but there is /always/ a conflict of interest when trying to decide who gets the surplus value.

> but they can't say as much because being seen as anti-union would hurt their image back in Germany.

That's not about their image. The German steelworkers union, IG Metal, has several seats on the Volkswagen board and they made sure that Volkswagen wouldn't oppose the unionization. Actually, between the Union and the Workers Councils, they hold half of the board.

Reply on news.ycombinator.com