The ruling class *and its supporters*. Pinochet's fascist Chile saw support from many middle class members of the Junta's enfranchised. But it wasn't an economic process that did that, it's a political process. Allow me to entertain:
1) Wages
Any wage level of any actor inherently moves the rest of the market towards that wage level. When a union bargains better pay, it actually raises the general wage level of the macro economy minus the union! In other words, the average wages of non-union workers rises when unions exist.
There's a few mechanisms but one you can graphically visualize is that the union has just forced the firm to raise its demand for labor.
Because, as I'm describing, wages are not a zero-sum game, this causes other firms to have to compete for labor. The firm with the union now damn sure wants new hires to be worth the money. But other firms are not going to give up so easy, now they have to bid UP.
The money for these wage increases comes mainly from the unemployment of other workers (and to a much lesser extent from the thinning of profit margins by companies).
2) Employment
The workweek has never, in America, shortened without political intervention. Improved technology in a classical capitalist system (like, before progressivism and unions etc) always lead to longer workweeks. The preferred method of the classic capitalist is to hire as few people to do as much work as possible. This leaves lots of unemployed hungry people eager to take jobs before they die. In turn, it means those who have jobs have virtually no bargaining power, and take high risk, long workweek, low pay jobs. Hooray gilded age! And what happens when you are working 98 hour weeks for subsistence pay? You don't have the energy to better your circumstance. It's the lukewarm bath from hell. Too cold to get out, but you hate every second of it.
Unions have no incentive to keep unemployment high. It eats at their backsides, hardcore.
Fortunately, unionism leads to improved employment! What happens when the capitalist needs 100 man hours a week but can only employ each person for 40? Instead of hiring one person to slave away, he hires two or three. Two or three who now have the time and energy to maintain worker mobilization to keep the union alive.
It means fewer hungry reserve labor force people bidding down wages. It means more people can get the jobs.
While I agree companies want to spend the lowest amount of their money on labor as possible, there is no reason for them to necessarily hire fewer people unless they are required by law to provide benefits to every worker. Especially considering that as workers fatigue, they work more inefficiently.
3) Macroeconomics and the investment schedule
With wages up
With employment up
With leisure time increased (shorter workweeks)
You have effectively created both the financial and the time-means for people to consume more. All employment is driven by investment, but all investment is driven by future consumption expectations. Future consumption expectations are most driven by present consumption circumstances.
Basically, aggregate demand has increased due to unionism, which results in increased consumption, leads to further employment and improved competition for labor which leads to more increased consumption, which leads to greater aggregate demand, etc., all the while increasing investment until you reach asymptotic levels of employment (full employment).
Well, you won't actually reach and maintain full employment in the capitalist system without constant government stimulus, but unionism brings capitalism a whole lot closer.
By full employment do you mean the literal definition or the definition generally used by economists?
If the former, in theory it is never possible to reach even with government stimulus.
If the latter, then it can be reached without government stimulus...?
