TRADE AND SERVICE UNIONS

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TRADE AND SERVICE UNIONS

By mikiesmoky2

Economy • February 2011 • Views: 1,299

DEFINITION: A number of persons joining together for some common purpose.

TYPES OF UNIONS: Private and public

FACTS: Private and public unions negotiate with employers to obtain specific goals for those persons being represented.

Subjects for negotiations include wages, benefits, and working conditions.

If negotiations result in additional costs to an employer:

a. A private employer will absorbed those costs or will pass some or all to the customers.

b. A public employer will have its “rainy-day” funds reduced or will raise additional revenue from its taxpayers.

ANALYSIS:

a. If a private employer absorbs additional negotiated costs, margins will be affected, which will reduce taxable income, which will cause a reduction in the value of the employer’s business. If the employer passes on the additional costs to its customers, it would be inflationary and the customers would have less spendable funds for other expenditures, which may adversely affect the economics. In most instances of higher costs, those costs will be passed on to the customers.

b. If a public employer raises additional revenue from its taxpayers, the taxpayers will have less spendable funds and that may adversely affect the economics.

c. When a politician, economist, or anyone else calls for high-paying union jobs, they are implying that there be a shift of wealth from customers to the high-paying union jobs.

February 26, 2011

-6

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44 comments

Great White Snark Feb 27, 2011 • 4:37:01pm

Okay who is calling for “high paying union jobs”? The folks in Wisconsin?

Decatur Deb Feb 27, 2011 • 4:39:13pm

All true, and if we hadn’t outlawed slavery and the workhouse we could save a bundle.

Prononymous, rogue demon hunter Feb 27, 2011 • 4:41:19pm

b. If a public employer raises additional revenue from its taxpayers, the taxpayers will have less spendable funds and that may adversely affect the economics.

The effect of this is hugely overstated by conservatives. People don’t suddenly stop buying things when they have a few dollars less in their paycheck. Nor do they decide to go out and buy things just because they have a few extra bucks. There is a threshold and considering how small the effect of $300 back from the government was, I doubt a few bucks difference in their paycheck will make any difference at all.

Also, the economics are affected, but not always in a negative direction. More about this in my next point.

c. When a politician, economist, or anyone else calls for high-paying union jobs, they are implying that there be a shift of wealth from customers to the high-paying union jobs.

Whenever you buy ANYTHING there is a shift of wealth from the customer to the seller/provder. When you buy education there is a shift in wealth from you to the school. When you buy an ipod there is a shift in wealth from you to Apple.

However, there is something important to note here. Teachers, principals, etc are in a union. But they are also local consumers. So when you pay a local teacher a high wage, your kids get an education out of it but also the teacher goes on to spend much of their money within the local economy.

A global business doesn’t keep the local economy going in the same way. When you buy an ipod a bunch of people in a global supply chain get paid, employees and executives get paid, and shareholders earn wealth. But very little if any of that money you spent on the ipod is still in the local economy.

Bob Levin Feb 27, 2011 • 4:56:37pm

The misdirection here is that higher labor cost are automatically passed on to the consumer or taxpayer.

Not true at all. These costs can be passed on, but only if the person setting prices thinks that such an increase wouldn’t negatively affect sales and profits.

Simply put, if you produce a product or offer a service, then other folks will need to have enough money to buy it.

mikiesmoky2 Feb 27, 2011 • 5:35:56pm

re: #1 Rightwingconspirator

REGARDING: Okay who is calling for “high paying union jobs”? The folks in Wisconsin?

RESPONSE: President Obama (consistently-which may to union constituents), other politicians, and others.

Great White Snark Feb 27, 2011 • 5:42:10pm

re: #5 mikiesmoky2
I just do not recall the specificity of “high paying” which may not hold up anyway. At least not in comparison to degreed private sector salaries.

voices.washingtonpost.com

Or this
Are Public Sector Workers Undercompensated?
But according to a new study published by the Center for State & Local Government Excellence and the National Institute on Retirement Security, these aggregate compensation comparisons are misleading. The authors, University of Wisconsin-Milwaukee economics professors Keith A. Bender and John S. Heywood, assert that state and local government workers are better educated and have more work experience, on average, than do private sector workers, so it is natural that their overall average compensation would be higher. “Thus,” they conclude, “the fact that public sector workers receive greater average compensation than private sector workers should be no more surprising than the fact that those with more skills and education earn more.”

Prononymous, rogue demon hunter Feb 27, 2011 • 5:44:14pm

re: #5 mikiesmoky2

REGARDING: Okay who is calling for “high paying union jobs”? The folks in Wisconsin?

RESPONSE: President Obama (consistently-which may to union constituents), other politicians, and others.

Except that despite whatever the politicians are saying, they aren’t really that high-paid. And they already agreed to cuts. Just ignore that.

Meanwhile in the same bill, some of what is currently Wisconsin wealth will be sold off. A one-time infusion of cash followed by a continuous stream of wealth leaving the local economy.

mikiesmoky2 Feb 27, 2011 • 5:44:45pm

re: #2 Decatur Deb

REGARDING: All true, and if we hadn’t outlawed slavery and the workhouse we could save a bundle.

RESPONSE: Your response, while sincerely appreciated, may be an oxymoron:
1. “all true” - reflects no disagreement with my offering
2. “if we hadn’t outlawed slavery and the workhouse we could save a bundle” - this appears (I may be wrong) to be facetious, at best.

My reason for posting is to stimulate “thinking” and “rational” discussion in the hopes of creating “better mousetraps”.

Again…, thank you for your comments.

Great White Snark Feb 27, 2011 • 5:57:26pm

re: #8 mikiesmoky2

Is your point about Wisconsin or just a general “white paper” statement of facts as you see them? This matters because the unions in Wisconsin agreed to the financial concessions yet still face the end of their collective bargaining rights. I am just not sure what or where your point refers to.

Great White Snark Feb 27, 2011 • 6:03:25pm

Mikiesmoky2, you should read this page and comment there.

Prononymous, rogue demon hunter Feb 27, 2011 • 6:22:24pm

So you want to discuss things, but don’t have anything to say about my points on the subject?

I’m getting a subtle astroturf feeling.

freetoken Feb 27, 2011 • 8:16:32pm

re: #11 prononymous

I’m getting a subtle astroturf feeling.

Not quite, but the poster does have a history.

He appears to be the same person behind the content of this Page entry:
littlegreenfootballs.com

Based on how he signed comment #2 on that page, and the actual page content, it looks like he is the same person as this poster over at Seeking Alpha:
seekingalpha.com

The trend I see in all those posts is one towards excessive reductionism.

Prononymous, rogue demon hunter Feb 27, 2011 • 8:21:26pm

re: #12 freetoken

You are probably right. Though in my defense astroturfing, trolling, and low intelligence can appear quite similar and use similar tactics.

mikiesmoky2 Feb 27, 2011 • 8:53:19pm

re: #3 prononymous

REGARDING: People don’t suddenly stop buying things when they have a few dollars less in their paycheck. Nor do they decide to go out and buy things just because they have a few extra bucks.
RESPONSE: “Suddenly” and “few”? Are those “key” words? Most (key word) people do make spending and budget decisions based upon income and the fluctuations thereof. Of course, there are many who don’t need to worry about such fluctuations.

REGARDING: There is a threshold and considering how small the effect of $300 back from the government was, I doubt a few bucks difference in their paycheck will make any difference at al

REGARDING: Whenever you buy ANYTHING there is a shift of wealth from the customer to the seller/provder. When you buy an ipod there is a shift in wealth from you to Apple.
RESPONSE: Using your iPod example, if within an instant the price were increased from X to X + $10.00, there would have been a shift of wealth of $10.00 from the customer to the iPod seller. And, conversely, if in that instant, the price were reduced $10.00, the customer will have an additional $10.00 to spend on other goods and services.

REGARDING: So when you pay a local teacher a high wage, your kids get an education out of it but also the teacher goes on to spend much of their money within the local economy.
RESPONSE: Oh key doe key…, let’s put this example on steroids and raise the salaries to the extent that taxpayers need to cough up another $2,000 apiece. Would that be stimulative or detrimental to the local economy?

mikiesmoky2 Feb 27, 2011 • 9:28:10pm

re: #4 Bob Levin

REGARDING: The misdirection here is that higher labor cost are automatically passed on to the consumer or taxpayer.
RESPONSE: What “misdirection”? I didn’t say that the negotiated costs are “automatically” passed on to the consumer. Please re-read.

REGARDING: Not true at all. These costs can be passed on, but only if the person setting prices thinks that such an increase wouldn’t negatively affect sales and profits.
RESPONSE: That is from the perspective of the seller. If the costs are passed on, the consumers will have fewer funds with which to purchase other goods and services.

mikiesmoky2 Feb 27, 2011 • 9:47:24pm

re: #7 prononymous

re: #9 Rightwingconspirator

REGARDING: Except that despite whatever the politicians are saying, they aren’t really that high-paid. And they already agreed to cuts. Just ignore that.
RESPONSE: Who are referring to and why? Please re-read my comments.

REGARDING: Meanwhile in the same bill, some of what is currently Wisconsin wealth will be sold off. A one-time infusion of cash followed by a continuous stream of wealth leaving the local economy.
RESPONSE: Wherein my comments have I referred to Wisconsin?

mikiesmoky2 Feb 27, 2011 • 9:51:02pm

re: #9 Rightwingconspirator

REGARDING: Is your point about Wisconsin or just a general “white paper” statement of facts as you see them?
RESPONSE: The latter, of course. Wherein my comments did I refer to Wisconsin?

REGARDING: This matters because the unions in Wisconsin agreed to the financial concessions yet still face the end of their collective bargaining rights. I am just not sure what or where your point refers to.
RESPONSE: I have not address “collective bargaining”.

mikiesmoky2 Feb 27, 2011 • 9:58:12pm

re: #12 freetoken

REGARDING: He appears to be the same person behind the content of this Page entry:
[Link: littlegreenfootballs.com…]

RESPONSE: Yes, that posting includes my comments. If you believe ANYTHING within that posting is misleading or incorrect, please let me/us know.

Thankx

Bob Levin Feb 27, 2011 • 11:41:10pm

re: #18 mikiesmoky2

RESPONSE: Yes, that posting includes my comments. If you believe ANYTHING within that posting is misleading or incorrect, please let me/us know.

[Beep.] I think we’ve been doing that. [Beep.]

Bob Levin Feb 27, 2011 • 11:47:23pm

re: #15 mikiesmoky2

[Beep.] Your responses do not make any sense. They are either redundant or non sequiturs. [Beep.]

mikiesmoky2 Feb 28, 2011 • 12:16:25am

re: #19 Bob Levin

REGARDING: [Beep.] I think we’ve been doing that. [Beep.]

RESPONSE: Apparently, I have been misled about this site. I was told one could find intelligent commentary here. Sadly, your nonsense is off-putting.
You seem to lack the intellectual honesty and wherewithal to be direct.

mikiesmoky2 Feb 28, 2011 • 12:28:24am

re: #20 Bob Levin

REGARDING: [Beep.] Your responses do not make any sense. They are either redundant or non sequiturs. [Beep.]

RESPONSE: Again…, you appear to lack the ability to be specific.

If you are an example of the best this site can offer, then, obviously, I was seriously misled about its quality.

There has been only ONE quality question in response to my original comments…….

Posting No. 9: Is your point about Wisconsin or just a general “white paper” statement of facts as you see them?”

Prononymous, rogue demon hunter Feb 28, 2011 • 12:33:42am

re: #22 mikiesmoky2

REGARDING: [Beep.] Your responses do not make any sense. They are either redundant or non sequiturs. [Beep.]

RESPONSE: Again…, you appear to lack the ability to be specific.

If you are an example of the best this site can offer, then, obviously, I was seriously misled about its quality.

There has been only ONE quality question in response to my original comments…

Posting No. 9: Is your point about Wisconsin or just a general “white paper” statement of facts as you see them?”

I’m writing my response to your other posts now, but I’ll comment on this quickly.

I addressed your analysis point c and my conclusion was, that’s the way it is supposed to be. Except for your characterization of union jobs as necessarily high paying.

mikiesmoky2 Feb 28, 2011 • 2:25:54am

re: #23 prononymous

REGARDING: I addressed your analysis point c and my conclusion was, that’s the way it is supposed to be.
RESPONSE: My point c. is “When a politician, economist, or anyone else calls for high-paying union jobs, they are implying that there be a shift of wealth from customers to the high-paying union jobs”.

If my understanding of your comment is correct, you advocate for the shift of wealth from non-union consumers to union workers. Is my assessment correct?

REGARDING: Except for your characterization of union jobs as necessarily high paying.
RESPONSE: My reference was to the fact that President Obama and others have suggested that we should create “high-paying union jobs”, without realizing, understanding, or caring that the freight is paid by the “non-union” customers.
“High-paying” is a relative term.

I withdraw my criticism since you have been very specific.

Prononymous, rogue demon hunter Feb 28, 2011 • 2:28:44am

Firstly, Mikiesmoky2, would you please use the quote function? It is annoying when everyone uses their own quote style. Just click the quotes icon and then paste the part you want quoted between the blockquote tags.

re: #14 mikiesmoky2

RESPONSE: “Suddenly” and “few”? Are those “key” words? Most (key word) people do make spending and budget decisions based upon income and the fluctuations thereof. Of course, there are many who don’t need to worry about such fluctuations.

Nice try. Those aren’t keywords, they are the facts.

I know you don’t care for the Wisconsin example, but it is in everyone’s mind and convenient because the numbers are available. If you want me to use a different example, name it and I’ll see what I can do.

Wisconsin has a budget shortfall of $137 million. They have a population of 5,686,986. If they were to fix the budget shortfall by only raising taxes on the human population (ie, keep the business tax cuts, don’t add any special new taxes on things like cigarettes, gasoline, property, etc), each person would pay an additional (137,000,000 / 5,686,986 =) $24 a year in taxes.

Do you honestly believe that people will act significantly different with $2 more or less a month? In my own experience, an extra dollar on a bi-weekly paycheck wouldn’t affect my budget at all.

RESPONSE: Using your iPod example, if within an instant the price were increased from X to X + $10.00, there would have been a shift of wealth of $10.00 from the customer to the iPod seller. And, conversely, if in that instant, the price were reduced $10.00, the customer will have an additional $10.00 to spend on other goods and services.

I agree, sort of, but so what? If it cost Apple more to make why shouldn’t they charge you more?

I’m failing to see the economic argument here. Is it economically advantageous to spend less on an Ipod and spend more on other goods and services? How could you even determine that for an arbitrary product without doing a detailed analysis of the supply chain, workforce, business structure, etc of the respective companies? Obviously it would be advantageous to you because you’d have more products/services. And it would be advantageous to the second business. But it would be a disadvantage to Apple. Which course of action will have a bigger, and positive, effect on economics at the local, federal, or global level depends highly on specifics being discussed.

RESPONSE: Oh key doe key…, let’s put this example on steroids and raise the salaries to the extent that taxpayers need to cough up another $2,000 apiece. Would that be stimulative or detrimental to the local economy?

This is a false dichotomy. It could have an indeterminate effect on the economy, or none at all.

This isn’t a question I can answer because there are just too many variables. At first glance I’d suggest that there would be a negative effect on the local economy. Wealthy people spend a smaller percentage of their income on essentials and save a lot more. The extra money might just sit in teacher’s bank accounts, doing little economic work. But what if teachers, being educated, invest their new found wealth more intelligently than the public? Or what if the extra money means that teachers start hiring skilled helpers and the quality of teaching goes up? And/or what if the extra money is able to attract more highly skilled professionals from industry? What if improved education means we are more competitive in high-tech fields? Would we be better off pocketing the money and being less competitive in the long run? IMO, it depends.

RESPONSE: The latter, of course. Wherein my comments did I refer to Wisconsin?

I referred to Wisconsin as an example. If you have a better example for our dialectic to revolve around, please suggest it.

Prononymous, rogue demon hunter Feb 28, 2011 • 2:36:11am

re: #24 mikiesmoky2

RESPONSE: My point c. is “When a politician, economist, or anyone else calls for high-paying union jobs, they are implying that there be a shift of wealth from customers to the high-paying union jobs”.

If my understanding of your comment is correct, you advocate for the shift of wealth from non-union consumers to union workers. Is my assessment correct?.

No, it is not correct. I’m not advocating or rejecting such a transfer of wealth. I am simply saying that the effect on the economy will be complex and highly dependent on the specific details.

Great White Snark Feb 28, 2011 • 8:07:19am

re: #21 mikiesmoky2

REGARDING: [Beep.] I think we’ve been doing that. [Beep.]

RESPONSE: Apparently, I have been misled about this site. I was told one could find intelligent commentary here. Sadly, your nonsense is off-putting.
You seem to lack the intellectual honesty and wherewithal to be direct.

From complex discussions on economics to well sourced commentary about foreign policy intelligence abounds at this site. Yet, you look at a couple dozen responses to this page and you judge a site with tens of thousands of threads and eight million plus comments by the reaction to your umm unique point of view.

mikiesmoky2 Feb 28, 2011 • 12:27:51pm

re: #27 Rightwingconspirator

REGARDING: From complex discussions on economics to well sourced commentary about foreign policy intelligence abounds at this site. Yet, you look at a couple dozen responses to this page and you judge a site with tens of thousands of threads and eight million plus comments by the reaction to your umm unique point of view.

RESPONSE: Whereas you may be accurate regarding the quality of those minds which frequent this site, I haven’t sensed that perception.
But you are correct in that I have made an extrapolation based upon a minuscule sampling.

Thanks for your comments.

Bob Levin Feb 28, 2011 • 1:22:14pm

A few days ago someone posted a link to a trend where computer generated identities are signed up on sites, and have the ability to argue their programmed point of view? This argument doesn’t feel right, it hasn’t since the beginning.

Bob Levin Feb 28, 2011 • 1:23:01pm

view.

PIMF but only with enough coffee.

Prononymous, rogue demon hunter Feb 28, 2011 • 1:55:09pm

re: #29 Bob Levin

A few days ago someone posted a link to a trend where computer generated identities are signed up on sites, and have the ability to argue their programmed point of view? This argument doesn’t feel right, it hasn’t since the beginning.

I don’t know about automated systems that do this. But there are many “astroturf” campaigns that use real people. They pay people to go out and pretend to be dozens or hundreds of different identities. Using the fake identities they shill on forums and blogs - pretending to be a disinterested 3rd party for a while to build a reputation and trust. But then they start floating the talking points the company pays them to make.

My initial feeling about mikiesmoky2 was of an astroturfer. But as Freetoken pointed out, that may not be the case. We really couldn’t know without taking a look at his bank account. That’s not something I think he’d agree to.

Of course accusing him of being a shill is an Ad hominem attack. A logical fallacy. It doesn’t address the truth/untruth of the statements he has made. However it can help you understand mindset, tactics, etc to recognize that someone might not really be an independent agent.

Bob Levin Feb 28, 2011 • 3:08:25pm

re: #31 prononymous

I agree with that, and perhaps I wasn’t fair. But it just didn’t feel right. Perhaps, I was making light of someone who actually has problems relating to people. I thought about that, and felt badly if that was the case. And I’ll apologize right now.

But if this is a computer program….

Great White Snark Feb 28, 2011 • 5:12:21pm

re: #31 prononymous

I can vouch Mikiesmoky2 is a real person espousing his own views. Not my place to mention his profession, but suffice to say money and economics are more than a passing interest to him. He is also a person brand new to blogging in a format like LGF.

Mikie and I debate or discuss frequently via email, I had suggested he try his view out at a larger forum than his email list. Since I blog here some, I suggested LGF.

Bob Levin Feb 28, 2011 • 5:53:49pm

I understand. I’ll behave differently. My apologies.

freetoken Feb 28, 2011 • 5:57:49pm

re: #33 Rightwingconspirator

The style of interaction at LGF seems unfamiliar to him.

Anyway, this has always been a somewhat rough and ready place to play. If someone makes an assertion it is likely to be challenged by someone else.

Prononymous, rogue demon hunter Feb 28, 2011 • 6:07:45pm

re: #33 Rightwingconspirator

I can vouch Mikiesmoky2 is a real person espousing his own views. Not my place to mention his profession, but suffice to say money and economics are more than a passing interest to him. He is also a person brand new to blogging in a format like LGF.

Mikie and I debate or discuss frequently via email, I had suggested he try his view out at a larger forum than his email list. Since I blog here some, I suggested LGF.

Fair enough.

He may want to check out some forums also. This sort of debate is often more suited to those formats that aren’t so fast paced. I find it easier to get a deep point across on such a venue rather than in a blog format.

mikiesmoky2 Feb 28, 2011 • 6:08:57pm

re: #31 prononymous

REGARDING: It doesn’t address the truth/untruth of the statements he has made.

RESPONSE: That is a very sagacious observation.

It would be logical to attack a message, not the messenger, i.e., one should review a message and those comments, with which one believes to be incorrect or misleading, should be addressed with rational reasons.

NOTE: The purpose of my original posting was to present a relationship between union and non-union workers/consumers/taxpayers.
It was to present a framework of pragmatic reality to be used to understand and, secondarily, to elicit a discussion which might improve this “white paper” effort.

mikiesmoky2 Feb 28, 2011 • 6:11:10pm

re: #32 Bob Levin

REGARDING: But it just didn’t feel right.

RESPONSE: What doesn’t “feel” right?
Hmmmmmmmmmmmmmmmm…..

mikiesmoky2 Feb 28, 2011 • 6:23:17pm

re: #35 freetoken

REGARDING: If someone makes an assertion it is likely to be challenged by someone else.

RESPONSE: Trust me…, I want my posting to be challenged, assuming the challenges are rational and offer increments of knowledge. That’s what it is all about.

NOTE: Man’s greatest legacy is the accumulation of knowledge.

Great White Snark Feb 28, 2011 • 6:37:30pm

re: #35 freetoken

It is unfamiliar to him. Completely.

Great White Snark Feb 28, 2011 • 6:38:56pm

re: #37 mikiesmoky2

Rather than your REGARDING try the quote feature like this, I’ll click quote on your post-
re: #39 mikiesmoky2

REGARDING: If someone makes an assertion it is likely to be challenged by someone else.

RESPONSE: Trust me…, I want my posting to be challenged, assuming the challenges are rational and offer increments of knowledge. That’s what it is all about.

NOTE: Man’s greatest legacy is the accumulation of knowledge.

Anything I type here is recognized as a response to what was quoted.

Bob Levin Feb 28, 2011 • 7:05:16pm

re: #38 mikiesmoky2

Someone else posted an article here, about various groups creating computer generated personalities to influence the direction of discussions at various websites, on various topics.

The format with which you chose to respond is highly structured, almost in outline form, and literally labeled.

You don’t have to do that.

My overall response to your point is that businesses and government need to be very aware of purchasing power among consumers. The wisest economic decisions weigh this factor properly. And that is why not all increased costs are passed on to the consumer/taxpayer.

mikiesmoky2 Mar 1, 2011 • 2:31:51am

re: #42 Bob Levin

My overall response to your point is that businesses and government need to be very aware of purchasing power among consumers. The wisest economic decisions weigh this factor properly. And that is why not all increased costs are passed on to the consumer/taxpayer.

In general, all increases in costs will be passed on IF the bottom-line will be improved without the loss of a material number of customers.

Bob Levin Mar 1, 2011 • 2:58:30am

re: #43 mikiesmoky2

That was my original point. We do not disagree.

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