Comments on: Industrial relations reform in Australia

By: lakelobos

lakelobos — Fri, 03 Jun 2005 21:47:06 +0000

Jet,
And your conclusion is based on the UAW only? It’s General Motors no Right to Generalize based on a single reading. Also, the number of UAW members is decreasing. In its peak years—1969, 1973 and 1979—the UAW had over 1.5 million members. Last year, by the UAW’s count, it had 675,898 members, a number not seen since the 1940s.

By: jet

jet — Fri, 03 Jun 2005 12:16:16 +0000

Who says US labor doesn’t have bargaining power in the US? Just look at the UAW which members start at $17/hour and in 5 years are at $23/hour. And this is with full benefits, overtime, and more job security than most. Not too shabby for unskilled labor.

So since Union pay is so great compared to skills offered to the employer, I’m gonna have to go with the commonly accepted theme that as workers become more skilled and better educated, they need unions less and less.

By: lakelobos

lakelobos — Fri, 03 Jun 2005 09:46:14 +0000

DD, I doubt there is much support to the thinking that labor has a lot of bargaining power (US). You have it right that in a refined measurement, one may allocate some bargaining power to labor, though small or even tiny. However, in a 2 short paragraphs, my recommended comment length, a binary allocation of bargaining power, i.e. rich=1, labor=0, is a decent approximation.

What do you mean by “labour market is healthy?” And by the way, bargaining power exists in a context of negotiation of sorts, which implies constraints outside which nothing happens. Therefore, Harvey cannot raise prices at will; labor will simply not buy (i.e. no negotiation).

By: Bob McGrew

Bob McGrew — Fri, 03 Jun 2005 03:54:33 +0000

Doesn’t the whole “Low-income families have experienced almost no income growth since
1970” argument depend on looking at government measures of inflation, which most people estimate overestimates by about 1% per year?

By: John Quiggin

John Quiggin — Fri, 03 Jun 2005 03:03:23 +0000

DD, I don’t think your version of the argument works properly. Consider my dealings with a monopsonist. The monopsonist has the bargaining power, but if the price is (exogenously) reduced enough the quantity demanded will be high, and I will be in a position to demand more. But that doesn’t change the fact that in an unregulated bargain, the monopsonist gets all the rent.

You might want to deny that employers have monopsony power. I think this is generally false in an existing employment relationship (unless the outside labour market is booming) and commonly false in relation to new hires.

By: derrida derider

derrida derider — Fri, 03 Jun 2005 01:49:09 +0000

But surely the balance of bargaining power and the state of the labour market are closely related. A deregulator would say that where the labour market is healthy the workers are in a great position to extract any rents available. Where it is unhealthy, lower labour costs are exactly what is called for to restore it to health. While I personally reckon its a bit more complicated than that, this is an argument that the lefties have really failed to engage with.

And lakelobos’ view that only “the rich” have bargaining power is ridiculous. Harvey Norman stores are rich, lakelobos – but does that mean that they can charge what they like, or that you automatically pay their asking price?

By: lakelobos

lakelobos — Thu, 02 Jun 2005 23:33:40 +0000

The low number of comments tells the sad story of “labor” in the US (and may be in other places). The “balance of bargaining power” is with the rich and the workers, even university professors, have almost no power to bargain. This inequality is directly translated in the rich getting richer and more powerful and the workers, i.e. us, getting poorer and powerless.

The two comments above mentioned entitlement and pensions, seems the same concern to me, as a danger or a burden. I believe the societies they advocate will be difficult to live in for most.

By: Rob Read

Rob Read — Thu, 02 Jun 2005 20:18:41 +0000

Why not make these rather inneficient (and failure rewarding) entitlements optional?

Just Let people opt out of the Pension, Unemployment and Health schemes and keep their own money.

Collectivist Equality is just a measure of how much the jealous can hold the financially succesful back.

By: jet

jet — Thu, 02 Jun 2005 17:47:22 +0000

I’m not sure I understand your implication that the economic model of English speaking countries is causally related to the English speaking debt. Isn’t it more likely that the economic model performs better than European models, but can not pay for European styled entitlement programs, which are the cause of the huge deficits?