Republicans survive Recall effort in WI, what will happen in PA, PGH? (Pittsburgh: house, to buy)

[MathmanMathman]

Originally Posted by BrianTH

Exactly. There is a job description for management, and then there are the actual human beings filling those jobs. In the real world, we recognize the difference, and equity investors struggle with making sure that their managers are faithfully fulfilling their duties--which frequently doesn't happen.

In fact, economic models of corporate governance typically start with the assumption that managers are as self-interested as anyone else, which is probably a safe assumption.

We're getting into an area that is very complicated with a lot of variables. Maybe we should publish a paper at the conclusion of this thread.

But companies are not about providing jobs and giving people a living wage. A company wants to maximize profits by selling to the free marketplace. If a company can achieve its goals with fewer people or by outsourcing, it should pursue a lower cost model. It's for the best in the long run. As long as people have options in buying and working, that should take care of wages and prices. We just have to make sure there are no monopolies and cartels that remove our choices (which makes oil a problem). Government purchases unfortunately are politics rather than market driven.

People also invest in companies directly or through their pension plans so a lot of that money that companies make goes back to the "owners" which is more than management. But if you are going to hate on the CEO's etc. then hate on the high price actors and athletes too. Their product is a team effort but the "stars" get much better compensation.

[hnsq]

Originally Posted by h_curtis

Yeah sure and I have a bridge to sell you in the desert. All the execs hang out play a round of golf and discuss how much they can all make and how many lowly people they can lay off so they can make more. Then they think of ways to outsource to China or where ever, so... guess what? They can make more money for themselves. Then they cut some other deals in some back room to manipulate whatever they can to.... make more money for themselves.

The trickle down thing didn't work very well. If you look at how much the super rich make compared to the lowlifes, you will see the gap is getting bigger and bigger.

Have you ever worked for a poor person? The trickle down effect does work. You have absolutely no clue what execs do on a day to day basis. Good lord.

Originally Posted by BrianTH

I don't think this is an entirely accurate with respect to a typical CEO's role in a firm--the Board of Directors, for example, often has ultimate say on important capital issues.

But more importantly--so what? Providing management is an important job, but it is just another job, as is being the baker. So this still tells us nothing in particular about how the cookies should be split up.

In a realistic setting, a CEO has final say on capital issues much more than a board. You missed my point. A CEO has a MUCH more important job than a single line worker, they have much more responsibility and pressure and are paid accordingly.

I think you are stretching this analogy past its breaking point--unions only make sense in the context of a large number of employees collectively bargaining with a large firm, so an analogy with only one employee and one owner/manager is inherently unhelpful.

My example also applies at a macro scale.

As an aside, studies of CEO value-added call a lot of your assertions in this passage into question. Moreover, in the past U.S. CEOs have been paid less, and today in other developed countries CEOs of large countries are paid less. So there is good evidence that in the U.S. we are systematically overpaying CEOs.

A person deserves exactly what they make. The market would not support that wage if they did not deserve it. That is the benefit of a free market system.

Um, there was no such assumption. If you understand the specific issue in question, it is that Europeans and the U.S. have been using different methods for comparing GDP in different periods, so if the U.S. was using the European method, its reported GDP growth would be lower (alternatively, if the Europeans were using the U.S. method, their reported GDP growth would be higher). Note nothing is actually changing in the real world--this is just adopting a common standard of GDP measurement to allow more accurate comparisons.

Measures of national productivity in turn use GDP as an input, so if you decrease your index of GDP growth, you will decrease your index of productivity growth. That's not an assumption about the factors contributing to GDP growth, that is simply applying the formula for calculating productivity.

Did you even read the study you posted? It is 100% based on assumptions of single-source causality to GDP.

I agree international crosstemporal comparisons are difficult, but prima facie, this evidence is not supporting the hypothesis that unions hamper productivity growth. If you want more rigorous studies, the metastudy I linked goes into all that.

You made the claim that unions create more productivity. I merely pointed out why those studies do not in any way prove that. The onus is on you to prove that point.

Of course not. I assume you didn't actually read the study if you are asserting that.

Please post the text from the studies which refutes what I said, as I did read the studies and found them to be extraordinarily poor from an intellectual standpoint.

I honestly have no idea what you are talking about here. This is a metastudy, and the studies in question can't be treated as "samples"--they aren't remotely the same thing.

Did you even look into the math behind the sampling that was the basis of the study? If you trace the equations, they are very erroneous. Please go back and re-check the author's math with calculating their weighted average samples. The authors treated the results of the 53 smaller studies as samples and extrapolated and expanded into the metastudy. Again - look at their math.

You seem to be ignoring your own point that setting wage terms necessarily has an effect on who actually gets employed. Moreover, as I pointed out before, unions do a lot more than just set wage terms.

When your overly simplistic model fails to explain the data, it is time to get a new model, not insist the data must be wrong.

But this does not address the fact that unions create a worse environment from a macro-fiscal point of view!

Are you asking why collective bargaining achieves different results than individual bargaining? It obviously does--you are admitting that yourself when you claim unions actually achieve higher wage terms, and there is no particular reason to believe they would fail to achieve different results in any other area. But precisely how collective bargaining achieves its observable results is a very complex question, and the academic models have varied over time. Personally, I don't have any firm convictions on that subject, and in fact I think it very likely varies considerably by case.

I admit unions achieve higher wage terms for the individual worker. They merely do so at an unacceptable cost to the country's economic system.

Um, there is a whole literature about observable agency problems in corporations for precisely this reason. The goals of upper management in some idealized model and how they actually behave in the real world are two very different things.

As an aside, this is an obvious double standard. In an idealized model, the point of the union is only to ensure fair working terms for its represented workers. In the real world, corporations have serious agency problems with upper management, and unions overreach, but you can't apply a real world analysis to unions and an idealized analysis to management.

What double standard are you talking about? Top management works individually to produce personal gains, while union employees set out to regulate their way into gain. Even in an idealized analysis, unions have a net negative effect on a society's economic system. That was part of my point. Also, given the structure of executive compensation, the ONLY way to maximize personal gain is to add more value to shareholders. I have some great literature on the subject. If you want to read it, PM me.

But in any event, this is all beside the point. Maximizing equity value is not the same thing as maximizing firm productivity. So even if it were true that management was diligently working to maximize the return to equity investors, that still wouldn't mean they were diligently working to maximize productivity, and all the same analysis would apply: if they can shift enough income share from labor to equity, that could more than make up for losses in productivity.

So you believe management should work harder on financial restructuring but the line worker belonging to the union should not work harder to maximize productivity? Talk about a double standard...

Again, you are asserting all this with no proof, and if anything the evidence is that unions lead to more cookies, not less. The problem is that upper management (or equity investors) may prefer to get 11 out of 12 cookies rather than 10 out of 13 cookies.

If the worker doesn't like it, then why doesn't he work to become top management? I don't see why it is a problem that upper management or investments gets the lions share. If a worker doesn't like it, that person is more than welcome to (and has the freedom to!) start their own company. If you work for someone else, you play by their rules.

I know, I just think you are misapplying it.

How am I misapplying it? deadweight loss due to price floors is an economically proven phenomenon. It is not a debate, it is pure math. If I am misapplying it, please show me how I am doing so.

Whoa, that assumption is clearly erroneous. Unions set their wages through collective bargaining, and a minimum wage is set through an entity not party to the transaction. You clearly cannot use the same model for both situations.

I don't want to get too sidetracked since it should be quite clear you cannot use the minimum wage model in this context. But I would note a few things if you want to try to build a real model. For one, you can't treat workers as an undistinguished commodity. For another, you are going to have to model the firm correctly. For the last, you will need to account for the fact everyone has imperfect information, and the contracts in question typically last over significant periods of time.

I will repeat myself. From a mathematical standpoint, they are both price floors. The economic system doesn't care about the politics of HOW they were put in place. The mathematical and economic models for the effects of both (from a financial point of view) are the same.

But workers ARE a commodity. So are managers. So is the CEO. A commodity is nothing more than an input in a process. In the business process, labor IS a commodity. What I posted on this subject is pure math. If the math in the article I posted is wrong, please let me know (and let me know how).

By the way, as I noted earlier, there is actually a large and complex literature about how to model this. Way back, people tried to model unions as monopolies (which is essentially what you are trying to do), but those models have long since been abandoned as unworkable.

Those models are not been abandoned! I presented you with a study which goes through the math (and the math for price floors and societal deadweight loss is very straightforward). Now, the question of whether that DWL is worth it is another one entirely. But before you continue this discussion, please do the math from an economics point of view.

[gg]

Originally Posted by hnsq

Have you ever worked for a poor person? The trickle down effect does work. You have absolutely no clue what execs do on a day to day basis. Good lord.

Sure it has been working wonders!

[soniqV]

Trickle-down economics is kind of a BS phrase. It implies that money is always going to do the same thing no matter where it came from and how it is allocated. Of course when you have bailouts and a federal reserve freely creating money out of thin air and operating under a shroud of secrecy, nothing is going to trickle down. But when there are true free markets, abundant competition, stable currency, no special government support of any one business, then both labor and enterprise benefit, and the phenomenon is quite real.

[BrianTH]

Originally Posted by hnsq

A CEO has a MUCH more important job than a single line worker, they have much more responsibility and pressure and are paid accordingly.

That bolded part is under dispute. You can't just assume it away.

My example also applies at a macro scale.

Without collective bargaining and a large unified firm, no, it doesn't.

A person deserves exactly what they make.

Then what's your problem with union wages? That's what they make.

It is 100% based on assumptions of single-source causality to GDP.

Of course it isn't. You got caught making a silly argument that misunderstood the issue and now are trying to bluff your way through.

You made the claim that unions create more productivity. I merely pointed out why those studies do not in any way prove that. The onus is on you to prove that point.

Well, originally someone else made the opposite claim, and I said there was little evidence to support that view, and in fact there were studies that suggested unions increased productivity. I provided citations to support that claim (such studies exist).

Please post the text from the studies which refutes what I said, as I did read the studies and found them to be extraordinarily poor from an intellectual standpoint.

I'm not entirely sure how to prove a negative with a citation. And to be blunt, you seem not to understand what a meta-analysis is.

But here is one example. You claimed:

"So the authors look at total productivity differences between whole firms, without regard to industry . . . ."

From the prospectus:

"The available evidence points to a positive and statistically significant association between unions and productivity in the U.S. manufacturing and education sectors, of around 10% and 7%, respectively."

So obviously your statement was wrong.

The authors treated the results of the 53 smaller studies as samples and extrapolated and expanded into the metastudy.

Goodness, no, not at all. Each study contained a certain number of samples. This meta-analysis is a way of combining all that data into one large set. But that isn't at all like treating the 53 studies as samples themselves. You are seriously confused about this.

But this does not address the fact that unions create a worse environment from a macro-fiscal point of view! I admit unions achieve higher wage terms for the individual worker. They merely do so at an unacceptable cost to the country's economic system.

So is the onus now safely on you to back up these claims? What is your actual evidence for the adverse macroeconomic impact of unions in the United States? And no, obviously inappropriate models do not count as evidence.

What double standard are you talking about? Top management works individually to produce personal gains

I thought you were claiming upper management always acted in the interests of the shareholders. Are we dropping that claim now?

while union employees set out to regulate their way into gain.

Collective bargaining is not regulation. You seem to have trouble maintaining this mental separation, but it is a rather important one.

Also, given the structure of executive compensation, the ONLY way to maximize personal gain is to add more value to shareholders.

Hah! About a gazillion successful shareholder derivative suits say otherwise.

I have some great literature on the subject. If you want to read it, PM me.

None of it is available on the Internet?

Google "corporate governance" and "agency problem" and you will get many, many hits describing the problem.

So you believe management should work harder on financial restructuring but the line worker belonging to the union should not work harder to maximize productivity?

Um, no, and I obviously said nothing of the kind.

To repeat, my point was just that maximizing return to equity is not the same thing as maximizing productivity. So it isn't all that surprising that equity investors always getting their way in labor relations doesn't necessarily maximize productivity.

If the worker doesn't like it, then why doesn't he work to become top management?

Because he likes being a baker? Because not everyone can be top management?

If a worker doesn't like it, that person is more than welcome to (and has the freedom to!) start their own company.

Or they could collectively bargain!

If you work for someone else, you play by their rules.

Nah, you bargain for the terms of your employment. That's what freedom actually looks like.

How am I misapplying it? deadweight loss due to price floors is an economically proven phenomenon.

First, even in the proper context, those are models, and they can fail to apply in the real world if the assumptions on which the models are based (explicit and implicit) are not true. In fact everyone knows those assumptions are never perfectly true--the question is under what circumstances they are close enough.

Second, a bargained-for wage is not the same thing as a legislative minimum wage. I think that is such a clearly true statement I am not sure what else to say. I mean by your logic, even if an individual and a firm agree to a wage, blammo!, there is deadweight loss, because now there is a "price floor", the agreed wage. That's obviously nonsensical, and the fact collective bargaining is involved doesn't save your logic.

But workers ARE a commodity.

"Commodity" is a technical term for a good that is supplied without qualitative differentiation in the relevant market. By that definition, most workers are not in fact commodities.

A commodity is nothing more than an input in a process.

No, that's not how the term is used in the relevant literature. "Input" is a fine term, and you could also use "factor of production". Understanding those terms properly, not all inputs or factors of production are commodities.

What I posted on this subject is pure math.

To be blunt, if you every see someone claiming they have proved an important economic claim with "pure math", you know they are likely full of it. Real world economic situations are full of complexities that can't all easily be reduced to observable quantitative variables. Economic models in that sense always rely on a large number of simplifying assumptions, and it is always important to ask, and test, whether or not those simplifying assumptions have rendered the model inapplicable.

Those models are not been abandoned!

They sure have when it comes to modeling collective bargaining.

I presented you with a study which goes through the math (and the math for price floors and societal deadweight loss is very straightforward).

That wasn't purportedly a model of collective bargaining. Seriously, you can't just assert any old model you like of any other thing is good enough for a different purpose, and then claim your views are "pure math"! It is like you aren't even trying.

[BrianTH]

Originally Posted by soniqV

Of course when you have bailouts and a federal reserve freely creating money out of thin air and operating under a shroud of secrecy, nothing is going to trickle down.

Right. Before the Federal Reserve, there was no process for increasing concentration of wealth in industrialized economies. Just ask Andrew Carnegie, Henry Clay Frick, the Mellons, and so forth.

But when there are true free markets, abundant competition, stable currency, no special government support of any one business, then both labor and enterprise benefit, and the phenomenon is quite real.

Ah yes, the no true Scotsman argument. It has never shown up in the real world, but that is because it has never TRULY been tried.

So we could go looking for this mystical Utopia that has never yet been found. Or we could do the things we know actually work. Confronted with that choice--let's look for Utopia!

[hnsq]

Originally Posted by h_curtis

Sure it has been working wonders!

Can you please answer the question I asked?

Originally Posted by BrianTH

That bolded part is under dispute. You can't just assume it away.

You are worth what the market dictates the wage is for the job you have. How is that disputed?

Then what's your problem with union wages? That's what they make.

Union jobs pay more than the person deserves. Union jobs pay a wage inflated beyond the market rate.

Of course it isn't. You got caught making a silly argument that misunderstood the issue and now are trying to bluff your way through.

Did you even READ the studies that you posted? Please re-read them before posting blatant lies like this!

Well, originally someone else made the opposite claim, and I said there was little evidence to support that view, and in fact there were studies that suggested unions increased productivity. I provided citations to support that claim (such studies exist).

But you posted very poor studies, that did not support the point you were making. Again, did you read the studies you posted?

I'm not entirely sure how to prove a negative with a citation. And to be blunt, you seem not to understand what a meta-analysis is.

But here is one example. You claimed:

"So the authors look at total productivity differences between whole firms, without regard to industry . . . ."

From the prospectus:

"The available evidence points to a positive and statistically significant association between unions and productivity in the U.S. manufacturing and education sectors, of around 10% and 7%, respectively."

So obviously your statement was wrong.

So 'manufacturing' is now an industry? market sectors and market industries are very different. 'Manufacturing' is a field as a whole, it is not an industry in any way....

Goodness, no, not at all. Each study contained a certain number of samples. This meta-analysis is a way of combining all that data into one large set. But that isn't at all like treating the 53 studies as samples themselves. You are seriously confused about this.

I have to say it again, read the studies you posted. It has become very apparent to me that you have not done that at all.

The original text from your study: Bootstrapping was undertaken using 1000 iterations (with replacement) from which the distribution of U.S. union-total productivity effects were generated.

Do you understand what statistical bootstrapping is? You need to look this up. It might clarify things for you.

Another point is that statistical bootstrapping has an unusually optimistic bias in terms of results. Why would you post a study that uses statistical techniques which are mathematically proven to be biased in favor of your side of the argument?

So is the onus now safely on you to back up these claims? What is your actual evidence for the adverse macroeconomic impact of unions in the United States? And no, obviously inappropriate models do not count as evidence.

I already posted this (please again, read the study I linked to regard price floors and economic deadweight loss). I concretely proved this and you blatantly ignored the economics of deadweight loss caused by unions setting wages.

I thought you were claiming upper management always acted in the interests of the shareholders. Are we dropping that claim now?

Please do not be so deceptive as to quote me out of context like this. It is not a way to have a rational discussion. Re-read what I said in context and try again. Quoting an individual sentence from an entire paragraph is deceptive, at best.

Collective bargaining is not regulation. You seem to have trouble maintaining this mental separation, but it is a rather important one.

It absolutely is. Regulation is defined as follows:

regulation [ˌrɛgjʊˈleɪʃən]
n
1. the act or process of regulating
2. a rule, principle, or condition that governs procedure or behavior

look at definition #2. Collective bargaining puts in place rules by which a company must adhere. I said regulation. Not government regulation. You seem to have trouble researching before you post....

Hah! About a gazillion successful shareholder derivative suits say otherwise.

Please expand on this. I strongly disagree.

None of it is available on the Internet?

Google "corporate governance" and "agency problem" and you will get many, many hits describing the problem.

I don't get most of my information by randomly googling in the middle of an internet debate. I have actual books and articles on the subject. I don't trust random websites as much as you might.

Um, no, and I obviously said nothing of the kind.

To repeat, my point was just that maximizing return to equity is not the same thing as maximizing productivity. So it isn't all that surprising that equity investors always getting their way in labor relations doesn't necessarily maximize productivity.

Providing the kind of job stability that unions provide teach someone that they can work less hard and have a large organization to catch them if they slack off. If a CEO makes one mistake, they are fired. To fire a union worker (I know from personal experience), it takes approximately TWO YEARS of documented misconduct, and even then it is difficult. Knowing it is difficult to be fired is not an incentive to be more productive.

Because he likes being a baker? Because not everyone can be top management?

Right, and not everyone can have the same wage. Not everyone adds equal value to a company.

Or they could collectively bargain!

I see, so they can sit back and let someone else do the work for them...got it.

Nah, you bargain for the terms of your employment. That's what freedom actually looks like.

So you don't think a person has the freedom to do what they want with their own resources (their company)? Lets suppose you hire me to mow your lawn for $20. I complain that it isn't enough. Should it be OK for an external agency to force you to pay me $40, or should you be allowed to fire me and find someone else who will do it for $20? The first way doesn't seem like freedom to me.

First, even in the proper context, those are models, and they can fail to apply in the real world if the assumptions on which the models are based (explicit and implicit) are not true. In fact everyone knows those assumptions are never perfectly true--the question is under what circumstances they are close enough.

Second, a bargained-for wage is not the same thing as a legislative minimum wage. I think that is such a clearly true statement I am not sure what else to say. I mean by your logic, even if an individual and a firm agree to a wage, blammo!, there is deadweight loss, because now there is a "price floor", the agreed wage. That's obviously nonsensical, and the fact collective bargaining is involved doesn't save your logic.

This isn't 'my logic'. This is tried-and-true economic fact. You are arguing against pure mathematics. It has become painfully apparent to me that you (to be honest) know very little about economics. I am going to ask yet again. Show me why this doesn't work. It is a fact that price floors cause net deadweight loss in an economic system! If you can prove otherwise, you will win a nobel prize.

It is not the fact that they 'agreed to a wage', it is the fact that they have a wage they WOULD agree to (let's say I would be willing to do the work for $10/hr, but you get a union to negotiate for $15/hr), then that creates deadweight loss.

Look - you research more than many people on this forum. Please read into economic deadweight loss. I don't know how else to say it other than you are flat out incorrect on this. DWL is a quantitative matter, and as I said before, if you are right about this, you would disprove every economist for the last 100 years. Please do some research.

"Commodity" is a technical term for a good that is supplied without qualitative differentiation in the relevant market. By that definition, most workers are not in fact commodities.

No, that's not how the term is used in the relevant literature. "Input" is a fine term, and you could also use "factor of production". Understanding those terms properly, not all inputs or factors of production are commodities.

com·mod·i·ty   [kuh-mod-i-tee] Show IPA
noun, plural -ties.
1.
something of use, advantage, or value.

People (specifically people's effort) are absolutely commodities.

To be blunt, if you every see someone claiming they have proved an important economic claim with "pure math", you know they are likely full of it. Real world economic situations are full of complexities that can't all easily be reduced to observable quantitative variables. Economic models in that sense always rely on a large number of simplifying assumptions, and it is always important to ask, and test, whether or not those simplifying assumptions have rendered the model inapplicable.

But here is the problem. You haven't looked at the math at all! Base assumptions (such as price floors) are PROVEN by people smarter than you or I. To claim that deadweight loss can't be explained by math is like claiming that gravity can't be expressed in mathematical terms. Obviously this is a complex issue, but you refuse to even LOOK at an equation. I am starting this discussion on the basis of mathematical analysis and reviewed, observed studies. You are basing it on your opinion. It is very obvious you have never bothered to even read about economics.

They sure have when it comes to modeling collective bargaining.

Really? Please post your sources for this.

That wasn't purportedly a model of collective bargaining. Seriously, you can't just assert any old model you like of any other thing is good enough for a different purpose, and then claim your views are "pure math"! It is like you aren't even trying.

When you have no basis for discussion, it is very difficult to have an intelligent conversation. To be honest, I am trying to dumb-down the economics for this conversation, as it is obvious you have never studied or researched anything in that field. Deadweight loss is a very, very common thing, and is a proven fact in the real world. I don't know how to say that any simpler. Things are much more complex than we are discussing, but as you point-blank refuse to accept the basic economic models of supply and demand (of which deadweight loss is a simple byproduct), it is very difficult to dive deeper into the economics of the situation.

Please do a little research. Please. Do you understand the concept of an equilibrium market price when we are talking about set wages? That is the first thing to understand. Form your opinions on the basis of tested principles and mathematical models which have proven correct over decades, not on your personal emotions, thoughts, feelings and experiences.

[Faer]

It absolutely is. Regulation is defined as follows:

regulation [ˌrɛgjʊˈleɪʃən]
n
1. the act or process of regulating
2. a rule, principle, or condition that governs procedure or behavior

look at definition #2. Collective bargaining puts in place rules by which a company must adhere. I said regulation. Not government regulation. You seem to have trouble researching before you post....

You realize that stopping collective bargaining is "regulating" right? And even worse, the dreaded government kind. Basic capitalism doesn't claim markets are "unregulated", but that free markets effectively self-regulate. Crazy enough, this can include the workers' side too.

[ditchdigger]

regulation [ˌrɛgjʊˈleɪʃən]
n
1. the act or process of regulating
2. a rule, principle, or condition that governs procedure or behavior

look at definition #2. Collective bargaining puts in place rules by which a company must adhere. I said regulation. Not government regulation. You seem to have trouble researching before you post....

So any time a company enters into a contract, to deliver/purchase good/services, it's "regulation"?

Union jobs pay more than the person deserves. Union jobs pay a wage inflated beyond the market rate.

Union jobs set the market rate, for that workforce and that employer.

All unions do is level the playing field between one monolithic entity, "the company" by allowing individual employees to join together to form a balancing monolithic entity, "the union". Whatever deal they arrive at is by mutual consent. Didn't we recently have a thread about Consol coming to an agreement with the UMW? That's what that process looks like.

[BrianTH]

Originally Posted by hnsq

You are worth what the market dictates the wage is for the job you have. How is that disputed?

Well, for one thing we live in a world of imperfect information. For example, I might defraud you about my qualifications, in which case I'm not necessarily worth what you agree to pay me.

Union jobs pay more than the person deserves. Union jobs pay a wage inflated beyond the market rate.

How do you figure? Collective bargaining doesn't mean there is no market rate, it just means the product in question (the desired labor) is brought to market in a certain way.

If a business negotiates all of its purchases of paper in one big contract, does that mean it didn't get a market rate for its paper purchases? Why would it be different if it does the same for labor?

Did you even READ the studies that you posted? Please re-read them before posting blatant lies like this!

I explained what the study in question actually said, and since then you have had exactly nothing of substance to say in reply. I'm not sure you are lying, but I think you are deeply confused.

But you posted very poor studies, that did not support the point you were making. Again, did you read the studies you posted?

Again, I explained what the studies actually said contrary to your assertions, and this is not a substantive response in defense of your claims.

So 'manufacturing' is now an industry? market sectors and market industries are very different. 'Manufacturing' is a field as a whole, it is not an industry in any way....

You don't expect me to accept this is a defense of your original claim, do you? You were implying they didn't differentiate firms. Are you saying they had to report individual results for each six-digit NAIC? Please.

But OK, look instead at the actual studies in question. They get pretty specific about what industries are being studied. Thus their methodology inherently controls for industry. In fact, if you don't like the meta-analysis, you can just look at the studies they reference (it will take some time, of course).

Do you understand what statistical bootstrapping is? You need to look this up. It might clarify things for you.

You know, I've noticed you are making a lot of arguments of the form: "You are wrong, but I won't tell you why." That makes me suspicious.

But yes, I know what bootstrapping is, and it is an appropriate (indeed standard) method for this sort of meta-analysis.

Another point is that statistical bootstrapping has an unusually optimistic bias in terms of results.

I have no idea why you are claiming this. I'm aware of an optimism issue in the decision tree context, but not this context.

I already posted this (please again, read the study I linked to regard price floors and economic deadweight loss).

Once again, I am asking for something actually about unions or collective bargaining. Your attempt to cite unrelated literature isn't helpful.

Please do not be so deceptive as to quote me out of context like this.

Ah, another "you are wrong but I won't tell you why" moment.

The fact is that no respectable model of management actions would simply assume they did what they were supposed to do regardless of self-interest.

Collective bargaining puts in place rules by which a company must adhere. I said regulation. Not government regulation.

Again, by this logic any agreed price is a "regulated" price because it constitutes a "rule" on price the parties to the transaction must follow. So by your logic, every agreement on price creates deadweight loss, since all "regulated" prices are the same as a minimum wage law.

It shouldn't be hard to figure out where you are going wrong.

Please expand on this. I strongly disagree.

There have been many successful shareholder derivative suits against corporate officers, including both directors and management, for breaching their fiduciary duties to the shareholders. To succeed in such a suit, the shareholders have to prove the officers did not act in the shareholder's best interests. Again, they have often succeeded in proving so.

I don't get most of my information by randomly googling in the middle of an internet debate. I have actual books and articles on the subject. I don't trust random websites as much as you might.

I was just pointing out that it seems odd to me that you can't provide links, given that this is an extremely well-discussed issue with lots of online sources.

Providing the kind of job stability that unions provide teach someone that they can work less hard and have a large organization to catch them if they slack off.

That job security also encourages workers to invest in improving their own productivity. Again, the research says that in the United States, the net benefits are positive.

If a CEO makes one mistake, they are fired.

Hah! Good one.

Also, "firing" for a CEO often constitutes a huge payoff.

Right, and not everyone can have the same wage. Not everyone adds equal value to a company.

Good thing no one is arguing otherwise, then.

I see, so they can sit back and let someone else do the work for them...got it.

Again, your hypotheses are not well-confirmed by the empirical evidence. And again, so much for freedom.

So you don't think a person has the freedom to do what they want with their own resources (their company)?

So why does the company get this freedom, and not the union?

Lets suppose you hire me to mow your lawn for $20. I complain that it isn't enough. Should it be OK for an external agency to force you to pay me $40, or should you be allowed to fire me and find someone else who will do it for $20? The first way doesn't seem like freedom to me.

"External agency"? Once again, you don't seem to want to deal with an actual collective bargaining situation, just things you assert (without basis) are analogous.

A group of guys with lawnmowers wants to negotiate with a group of guys who want to mow lawns. Both sides agree amongst themselves to collectively bargain. Who isn't free?

This is tried-and-true economic fact. You are arguing against pure mathematics. It has become painfully apparent to me that you (to be honest) know very little about economics.

Says the guy who thinks economics is about "pure mathematics". Always, always, you have to demonstrate your model is actually applicable. You can't just assume it.

Show me why this doesn't work.

Because it depends on assumptions that simply aren't applicable. As I have explained, and once again, you refuse to respond with any substance other than to repeat "pure mathematics!" over and over again.

It is not the fact that they 'agreed to a wage', it is the fact that they have a wage they WOULD agree to (let's say I would be willing to do the work for $10/hr, but you get a union to negotiate for $15/hr), then that creates deadweight loss.

See, right there is a bunch of invalid assumptions in your model. If the union didn't exist, it wouldn't be the same people working for less, it would end up being different people working for less. And they don't just bargain over wages, they bargain over the amount of work, and all sorts of other terms. Your model assumes all this away, and those are not valid assumptions in the real world.

Look - you research more than many people on this forum. Please read into economic deadweight loss.

Trust me, I know all about it. You simply have to try to grasp that your deadweight loss model depends on a variety of assumptions, which are not valid in these cases, and therefore your model doesn't apply.

com·mod·i·ty

I don't know where you are getting that definition from, but I am talking about "commodity" as it is defined in the relevant literature. This might help you:

What Is a Commodity?

Question: What Is a Commodity?
Answer: When an economist, economics professor, or economics textbook talks about a commodity, they mean a good that possesses the following properties:

* usually produced and/or sold by many different companies
* Is uniform in quality between companies that produce/sell it. You cannot tell the difference between one firm's product and another.

But here is the problem. You haven't looked at the math at all!

You would not BELIEVE the number of times I have gone through the mathematics of deadweight loss. Again, you can't seem to grasp that this model simply isn't applicable.

Base assumptions (such as price floors) are PROVEN by people smarter than you or I.

Wow, that's a completely crazy thing to say. Assumptions aren't validated by smartness. Assumptions are validated by gathering data/evidence and determining whether that data/evidence supports the necessary assumption.

To claim that deadweight loss can't be explained by math is like claiming that gravity can't be expressed in mathematical terms.

Of course that's not what I claimed--I claimed math couldn't tell you whether your deadweight loss model actually applies to a given real world situation.

And interestingly, the history of physics is full of examples of people constructing elegant mathematical models, and then experiments showing their models weren't applicable to the real world. In fact, Newton's model of gravity, while still a decent approximation, has strictly speaking been replaced with the General Relativity model. There wasn't anything wrong with Newton's math skills, he just made incorrect assumptions.

It is very obvious you have never bothered to even read about economics.

Uh-huh. More "you're wrong even if I can't tell you why".

Really? Please post your sources for this.

This is another "prove a negative" issue. If you are aware of someone in the literature using the classic, unmodified monopoly model after, say, 1980, give me the citation.

To be honest, I am trying to dumb-down the economics for this conversation

Try going smarter.

Things are much more complex than we are discussing, but as you point-blank refuse to accept the basic economic models of supply and demand (of which deadweight loss is a simple byproduct)

Wow, no again. You obviously need additional assumptions in your model to get deadweight loss--you've mentioned them yourself several times.

Form your opinions on the basis of tested principles and mathematical models which have proven correct over decades, not on your personal emotions, thoughts, feelings and experiences.

Right back at you.

Look, I get what is going on here. You've read a little about deadweight loss and you have asserted it applies to union wages. Prima facie that makes some sense, as long as you don't think too much about what you are assuming when you make that assertion.

But the fact is that anyone familiar with, oh, the last 30+ years of labor relation research knows that the model you are using is too overly simplified to work. In other words, applying it to collective bargaining cases requires assumptions you simply are not entitled to make.

However, rather than accept that I not only know exactly what argument you are making, but I also know why it is wrong, you are retreating to claiming I must not know anything because I have dared to disagree with you. Well, sorry, but you have done nothing to indicate to me you understand these issues better than I do, and a lot to indicate to me you really don't understand them at all.

And that's where I will leave this conversation, unless you can come up with something interesting that is either substantive or at least a citation to actual labor relations research. Because if all you have is deadweight loss literature from other contexts, sorry, that isn't interesting or helpful, no matter how much you insist to the contrary.