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Comment by roughly | Hacker News Reader

> Unions by definition are exercising market power to withhold labor and force a higher than market price on said labor. Thus, they are causing dead weight loss to society and making everyone worse off in the base case.

Well, everyone except the people who work for money.

> Then one has to ask themselves in which situations could a union pushing up labor prices make things better?

In the situation where people get paid that higher labor price, those people are better off.

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yes, but everyone else is worse off by a greater amount because that higher price causes other reactions and repricings in the supply chain. There are some really nice graphs in first year economics that explain this. That we are in a potential situation where there is market power being exercised by the employer is basically the only reason we have to even consider that a union could make things better off is because the person with the monopsony doesn't benefit from decreasing output as the union pushes wages higher if the end result is at or below the efficient price for labor.

> There are some really nice graphs in first year economics that explain this.

Yes, and they’re bullshit, as are the ones that suggest firms price competitively, that markets tend towards competition and not consolidation, that government spending is inherently bad, and all the other Chicago-school Reagan-revolution bullshit that’s left this country with third-world infrastructure, income inequality that would embarrass a Rockefeller, and no industrial base to speak of.

Economy is a prime example of a field where a bit of knowledge is worse than no knowledge, and nothing is more deranged than someone who has completed Econ 101, and thinking they now understand the world.

The basic reason this happens is that people's wages are only worth what they can buy, and in order for them to be able to buy those things they need to be produced and shipped. Sure, you could argue that this doesn't actually matter in practice because the corporations will always have enough excess profit to just pay people higher wages and employ more people to do less when the unions demand it, and that they'll have to do so rather than increasing prices, and that these cuts in profits will somehow always come out of the pockets of unsympathetic billionaires rather than ordinary workers' pension funds. That requires a lot more about the world to work out just right compared to the economics 101 version though.

>There are some really nice graphs in first year economics that explain this.

One of the first things I learned when I started to seriously study economics is that economists never let objective reality interfere with their theories or charts.

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