In theory, labor organizers shouldn't demand so much that their industries become uncompetitive. In practice, however, as we've seen with Chrysler and GM, they can and do.I am not very familiar with the details of collective bargaining theory, but I would be surprised if this was really true. McArdle is usually right with her references to theory, so I'm asking what assumptions about industry survival preferences by unions are commonplace?
I would assume that the objective of a labor union would be to maximize the wealth of its current members. The union members of Generation t would probably want their firm during Generation t+1 to remain competitive enough to pay its pensions and liabilities, but why would they care about Generation t+2 and forward?