Quote Of The Day

“This is actually a pretty big issue in labor relations.  You have a situation where employers are paying much more for compensation, but it isn’t making workers feel better compensated.  Probably the best argument against allowing collective bargaining for non-wage benefits is this: it reduces the transparency of the employer-employee bargain.  When your employer gives you an extra $1,000 in your paycheck, you understand (almost) exactly what this has cost them.  When they change the formula for calculating pension benefits fifteen years hence, give you a work rule change that makes your life more pleasant but will cost them an aggregate $100,000 in lost productivity, or add chiropractic care to your health insurance, you have at best a hazy idea of the cost on the other side.  Of course, the employer may tell you, but these things are often hard to quantify precisely, and collective bargaining tends to take place in a fairly mistrustful atmosphere.  This leads to worker pressure for “small concessions” that aren’t small–and the asymmetry between the employee and the employer perception can further poison the negotiations.” — Megan McArdle

2 Responses to “Quote Of The Day”

  1. Darf Ferrara says:

    I don’t agree with this. With pensions she’s claiming that people aren’t able to judge future discount, which I find questionable. With respect to health care costs, the problem is health care laws, not unions negotiations per se.

  2. Right – all that is true. But given two options: the ability to negotiate for wages (something easily seen and measured) is more transparent than negotiating for greater healthcare coverage. Both, from the employers and employees perspective. That is her main point.

Leave a Reply