On unions "raising prices"

[Labor Shall Rule]

Do unions push up the price of consumer goods whenever they succeed in giving their members a higher rate of compensation? And as so, are they negative for the economy?

[Nwoye]

Yes they raise prices up. Those in control of the company are not going to take a pay cut in order to compensate their workers, so they raise their prices in order to offset the costs.

Or they outsource the labor.

[GPDP]

And that is why our struggles should not, indeed must not be limited to simply attaining higher wages and/or benefits for workers. While such struggles are progressive and raise consciousness, stopping there gives the bosses ample time to propagandize the workers as being the "greedy ones".

[alhop10]

It is essential that we eventually steer struggles in a political direction otherwise all we can hope for is limited economic reform.

[cyu]

No matter who controls a company, anybody can raise prices. If company execs control the company, then the profits go into their private jets. If union members control the company, then the profits go back into the working class.

What is the difference between buying private jets and money going into things the working class consumes? The first funds an industry that services only a tiny minority - the more money going to execs, the less economic resources available for everyone else. The second funds industries that serve just about everyone - the more money being spent by the working class, the more likely you'll see advances in health care for everyone or general products targeted at making everyone's life better.

[Die Neue Zeit]

The bigger question is: throughout the history of capitalism, hasn't real GDP per capita increased? If so, why aren't all wages and salaries indexed against upward inflation?

[Diagoras]

Do unions push up the price of consumer goods whenever they succeed in giving their members a higher rate of compensation? And as so, are they negative for the economy?

It depends on what you mean. Negative for whom... and who is "the economy"?

In the general boom-bust cycle of capitalism, during periods of expansion wages rise and numbers of jobs increase, along with profits. As this expansion dwindles due to higher competition and the rising wages (and strength of organized labor) that accompanied the "good times", capitalists begin to try and cut costs. One route is innovation. The other, cheaper route is cutting wages and jobs, which generally marks the beginning of the bust cycle, as fewer people have purchasing power and the initial expansion to meet a market demand has withered.

So, yes, higher wages push up production costs, and unions lead to higher wages. However, this cyclical process is inherent in any profit-based economic system using price indicators on a market for deciding how resources are going to be allocated... blaming increased unemployment, etc., on unions is simple scapegoating, and ignores the processes of the system as a whole. Highlighting the pure irrationality of our current means of operating an economy, the answer to higher wages being negative or not is even yes and no to the capitalist. He needs low wages for his employees in order to make a profit when he sells, but he needs workers to have high wages to buy his products.... but competition with his lowered wages pushes other companies to lower their wages as well... guaranteeing your next recession.:confused::rolleyes::laugh: