Would reducing union wages affect the price of your next car?

Many anti-union people believe that if you could reduce the union labor costs that go into creating a Hummer from $30,000 to $20,000; then the price of the Hummer would go down from $100,000 to $90,000.  This is certainly false.  In fact, it is entirely possible that the sales price of a Hummer would not change at all.  It is entirely possible that the $10,000 “savings” would simply become profit and bonus money to the chief officers that already have salaries in the tens of millions of dollars.  If that is the case, why should the union workers give up their income?  Why take this money from the poor to give it to the rich? 

Now, allow me to continue.  If the union labor costs for creating a Malibu went from $15,000 to $10,000; then I believe the price of the car may very well go from $25,000 to $21,000.  The reason for the difference is that the Malibu is under intense price pressure from competitors; but the Hummer is not.  The price consumers pay for cars is not determined by the cost of the car, it is determined by the price people are willing to pay.  The people buying Malibus are much more likely to do so if the price is lower because price is a major factor in the buying decision; but for the people buying Hummers, price is generally irrelevant.  Hummers are bought as status symbols.  (Yes, for those of you simpletons that see the whole world as black or white, price is sometimes a partial factor in some Hummer purchases, but it is certainly true that price is more of a factor for Malibu buyers than for Hummer buyers).

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