Hi There !

I am trying to understand the economics of unions.  It would appear
capitalists (companies) want to keep the overall price of labor at or
below the market price, and labor unions want to keep it at or above
the market price.

Seems to me that keeping the price of labor either above or below the
market price is doomed to failure.  If I am right, then how could labor
unions hope for longevity?  Similarly, why do companies try to
artificially suppress wages (below the market rate) when that is also
doomed in the long run?

Is this Capitalist/Labor battle always a Win-Lose/Lose-Lose?  Has any
such battle ever resulted in a Win-Win?  Would ever make sense for a
company to actually welcome a union?  (Please humor me...I'm a novice
at this.)

A 5-star answer would be one link to an article (preferably academic,
but practical) which addresses most of these questions.  (Please note
an article on the *politics* of unions would be much less interesting
to me than the *economics* of unions.)

All comments greatly appreciated !

Thanks.
ron

Hi Ron,

I'm glad that the materail I've found was useful. Here it is again for the answer.

~ czh ~

http://www.econlib.org/library/Enc/LaborUnions.html
Labor Unions 
by Morgan O. Reynolds 

For more than a century now, labor unions have been celebrated in folk
songs and popular myth as fearless champions of the downtrodden
working man, while "the bosses" are depicted as coldhearted exploiters
of employees. But from the standpoint of economists?including many who
are avowedly pro-union?unions are simply cartels that raise wages
above competitive levels by capturing monopolies over who companies
can hire and what they must pay.

http://myphliputil.pearsoncmg.com/student/casefair6/ch19.pdf
The Economics of Labor Markets and Labor Unions.

Thanks, czh.  Terrific !

ron

Hello Ron,

I?ve found an article that might meet your need for a good discussion
of the issues you raised. The second reference is a 24-page chapter
from a textbook. I hope this will get the ball rolling on what you're
looking for.

~ czh ~

http://www.econlib.org/library/Enc/LaborUnions.html
Labor Unions 
by Morgan O. Reynolds 

For more than a century now, labor unions have been celebrated in folk
songs and popular myth as fearless champions of the downtrodden
working man, while "the bosses" are depicted as coldhearted exploiters
of employees. But from the standpoint of economists?including many who
are avowedly pro-union?unions are simply cartels that raise wages
above competitive levels by capturing monopolies over who companies
can hire and what they must pay.

http://myphliputil.pearsoncmg.com/student/casefair6/ch19.pdf
The Economics of Labor Markets and Labor Unions.

czh---this is terrific !

I just read the entire chapter.  Seems unions do raise wages 15%-30%
for members.  But unions also lead to unemployment and disruption of
supply and demand.

This is just what I needed, czh.  Please post so I can give you 5 stars !

Thanks.
ron