IBCoupe wrote:smockers83 wrote:In a union environment, there are contractual rules and regulations towards having to let someone go. Putting in regulations inherently isn't a free market. For example, if a Teamster is caught on video violating policy (and maybe even law), he cannot be fired because in the contract it says that Teamsters can only be fired if directly observed. Yeah, that's a free market labor force.
You asked how the labor market was free. Not the labor force. The labor market is still free, and further: NEGOTIATE A BETTER CONTRACT, IF IT BOTHERS YOU. If you're not a party to the negotiations, BUTT OUT. It's that simple. You want a free market? Let the parties contract.
I'm sorry, did I hit a nerve? Sorry, I don't work in a union environment. I'm too smart for that, I'm what they call a white shirt.
Again, you failed. Follow me here. Remember when I first posed the question about a free labor market? I said that the essence of a free market is that resources are free to move around, in this case capital and labor. If a company cannot manage it's own workforce as it deems necessary, such as getting rid of a Brother for legitimate reasons that any other company in its right mind would get rid of a person for, it's capital is tied up in that worker, thus the market is not a free one.
Of course the labor force is free, it lives in America.
Now, if a company decides to screw its workforce, its workforce will be unhappy and they will leave. But those that will leave bring the market back to equilibrium because the amount the company is willing to pay the ones who stuck around felt it wasn't worth it to move. Sure, they may be upset, but they're also making an economic decision. If a company keeps screwing its employees with wages and what not, eventually it can't stay staffed for the amount of work required to generate profits due to too many people leaving. Two things can happen, the company keeps hurting itself by thinking it needs to cut costs, screwing more employees or it comes to its senses and recognizes the true problem. But if they're making the wrong decisions and continue to screw people over, it is better that the company goes down because they're not making good economic decisions. The capital and labor of the company can be better applied within the economy.
IBCoupe wrote:smockers83 wrote:When you get a union involved, most of them put the labor market out of equilibrium by demanding higher wages and other compensation than what the free market would normally produce for that level of skill and talent.
Which isn't bad. A "free market" has slavery and indentured servitude. Why is it that unions are a bridge too far in limiting what the market can do to those producing its labor?
You have the thinking from the late 1800s/early 1900s. A free market does not mean no $$$ silly. C'mon, you're just being childish. There are labor laws, there is minimum wage. If a company wants to pay minimum wage for a position, they can, however if the labor force demands a higher wage for said position, the qualified labor will take a pass and the company will get what it pays for...under-qualified individuals. But lets say the big mean company realizes it's not attracting the higher skills it needs for that position, it realizes it needs to pay more for it. It's a novel concept called price discovery. A big bad company will find a wage in which it can attract the right skill set over time.
A union on the other hand, with it's demanded, strong-armed higher wages relative to the free market equilibrium, is no doubt, a better deal for those individuals as they are now getting more money and puts them in a better financial position. But that capital could be better allocated due to the market being out of equilibrium and/or the labor could also be better allocated to where it's needed.
Also, just for clarification, in case you need it, when I say labor, I mean the labor force.
IBCoupe wrote:smockers83 wrote:Now, at the same time, employers can compete with each other for labor in that they bid up their wages relative to other employers in order to steal labor. If an employer is expecting production to increase and the labor market is relatively tapped out, thus meaning labor supply is low, it can raise it's wages to broaden it's labor supply by extracting labor from another employer that doesn't pay as much. That is all of one example of free market labor.
Are you under the impression that employers can't offer more pay? That a union somehow prevents wage competition? Huh?
Absolutely not. I think I made that perfectly clear in that example that an employer can offer more pay, but only if it sees the benefit of increased capital allocation towards labor. And yes, unions can prevent wage competition. Going back to the Brotherhood, they have a national contract. YRC Worldwide's labor voted in wage concessions which has caused ABF to sue the Brotherhood because they haven't gotten the same concessions. The same thing happens at the Big 3 with the UAW. If one company gets concessions, the others usually follow, or vice versa (union gets more, the other companies usually end up following suit). This is clearly not wage competition. In fact, it's exactly the opposite of my example that you are questioning, for some unknown reason.