It’s Official: Card Check Will Cost Jobs
Last week an eye-opening study by economist Dr. Anne Layne-Farrar was released concerning the possible impact of the Employee Free Choice Act on unemployment. As unemployment in the U.S. topped 8% last week, the study’s findings might give lawmakers pause before embarking on a major rewrite of American labor law.
The bottom line of the study is clear and stark:
The precise effect on unemployment will depend on the degree to which EFCA increases union density, but for every 3 percentage points gained in union membership through card checks and mandatory arbitration, the following year’s unemployment rate is predicted to increase by 1 percentage point and job creation is predicted to fall by around 1.5 million jobs. Thus, if EFCA passed today and resulted in an increase in unionization from the current rate of about 12% to 15%, then unionized workers would increase from 15.5 to 19.6 million while unemployment a year from now would rise by 1.5 million, to 10.4 million. If EFCA were to increase the percentage of private sector union membership by between 5 and 10 percentage points, as some have suggested, my analysis indicates that unemployment would increase by 2.3 to 5.4 million in the following year and the unemployment rate would increase by 1.5 to 3.5 percentage points in the following year.
The study explains that by increasing unionization, EFCA will have an adverse impact on current and future employment:
I find that, while card check union certification backed by mandatory two-year “contract” arbitration could be expected to increase union membership as hoped by EFCA proponents, EFCA is unlikely to achieve its main goal of improving social welfare, which should take into account possible consequences not only for union members but for all other individuals, because the proposed rules would likely have detrimental effects on the unemployment rate and job creation. These are two adverse effects that America can ill afford at any time, but especially at this time of recession. … Starting from the finding in the literature that card check systems increase in union density in comparison to an election system, I demonstrate empirically that an increase in union density this year would lead to an increase in the unemployment rate and a drop in the job creation rate in the following year.
The study also disputes a central premise of EFCA, namely that employers’ purported illegal tactics have prevented employees from unionizing. In fact, unionization has been decreasing worldwide and “there is ample evidence that modern employees have an array of likes and dislikes that differ significantly from past generations such that workers have found it less attractive to join unions than they have in previous years.” Dr. Layne-Farrar notes that other studies have already undercut the argument that alleged unfair labor practices by employers impede union organizing attempts.
I hope they pass card-check. I do. It’s a poor sword that doesn’t cut both ways. Card-check can be used by employers to decertify a union, too. “Well, Joe, if we don’t decertify the union, I’ll enter bankruptcy. Then, I can dispense with the union contract. Hiring and firing will be back at my discretion… and I’ll know which way you voted. So, just sign here….” In practice, it hasn’t worked that way, but I think that’s because no one thought to try it.
What I find funny about the whole “we need to create jobs” argument is, you can only “create” so many jobs within a set system IE the US. Once you hit a point, from then on all your doing is causing a bubble which will burst down the road and cause problems. Even if we lose another 1 million jobs… even 5 million jobs I still think we will be above the point of sustainable jobs.
A simpler and far more effective why to make open up jobs is to reduce the work force. I can think of a good 20 million or so workers who we could easily get rid of and would open up a whole lot of jobs… but hey you know maybe its better just to create a giant government job bubble spending money that doesn’t exist. You know what, that sounds great… o wait obama’s already doing that.
In the interests of transparency–you remember what that is, right Jennifer?–maybe you should tell your readers that the economist whom you’re swooning over in this article was paid by the hilariously-named “Alliance To Save Main Street,” described by Politico as “chaired by an association of human resources executives.” So what a surprise that a pro-management client pays an economist to look at a pro-union bill, and she finds–drum roll!–that the pro-union bill would actually cost jobs! Who’da thunk!?
Boy, you people are suckers a thousand times over. Reality check time: you supported Bush, lost two wars, destroyed the economy, and lost the elections. You’re not only losers, but you’re retards as well. And guess what? You’re absolutely right that socialism is coming. Not only socialism, but GULAGs run by communist KGB leftwingers. Every single one of you is being monitored by Obama in his evil lair, and you will all be thrown into re-education camps. Mwah-hah-hah-hah. No wonder pajamas went bankrupt, this place smells like the nerd’s table in the school cafeteria. Later, suckers! Dress warmly, the GULAGs are mighty cold!
The Dow Jones will probably drop over three hundred points in one day if Card Check becomes law. I think we can take it for granted that it will go under 4500. The poorly read and shallow Barack Obama wasted his years at Harvard University. He didn’t bother to do any serious reading and thinking. No, he instead focussed on networking and manipulating guilt tripped whites. The man is not even close to being ready to handle the responsibilities of the presidency. Can we survive the next four years? This is so awful.
For Clinton, the slogan was “It’s the ECONOMY, stupid.” For Obama, the slogan should be: “It’s the POLITICS, stupid.” Everything this President has done – the Spendulus/Porkulus Bill, the proposed budget with new taxes, cap and trade, Card Check, etc. – is done to promote the President’s political allies regardless of the cost to the economy or any other segment. There is nothing but the Agenda, and the Agenda is to build bigger government, thereby increasing government dependence and tying more people to the Democrat Party. It worked for FDR and BHO hopes it will work for him.
SD . . . Don’t write too hard, you make everybody else look bad (Oops! I mean don’t “work” too hard). The union movement in this country is corrupt, has been for a long time, first by organized crime, now by politics (is the party a wholly owned subsidiary, or is it the other way around?), regardless, incestuous relationships bring offspring damaged by recessives . . . Well, don’t work too hard (you make everyone else look bad) . . .
I have no doubt that EFCA and the increased unionization that result from it will cost American jobs. To see the reasons why, simply put yourselves in the shoes of a manufacturing executive whose workforce is not yet unionized.
Unions usually write some kind of employment guarantee into their contracts. If your work force is unionized, it’s far more difficult to downsize in the face of an economic decline. In addition, union seniority rules require you to shed the youngest portion of your work force, not the least effective. A secondary consequence is that when the economy improves, you will add as few workers as possible, because any excess workers will be more difficult to lay off later. Your labor costs are increased because you pay overtime instead of adding workers.
Effective managers will choose to ship more jobs overseas instead. Between EFCA and cap-n-trade, Democrats are well on their way to killing what little is left of U.S. industry.
Marc Malone….Please inform yourself on the issue of unionization before making stupid statements. The card check act will give union bosses a blank check on American businesses. Period. There is no back door to “decertify” a union as you claim. “No one has ever thought of it…”. Seriously? In the history of unionization of this country which has brought about the decline of the auto industry, the steel industry and the clothing industry and you think YOU’VE discovered something that no one else has noticed? Pathetic. The card check act is anti-American. Don’t candy coat what you don’t understand.
Since it’s not applicable overseas, it won’t affect employment overall. It’ll only affect American employment, at first.
However, actions have consequences, and unemployed Americans don’t buy as much. Can we call this what it is, namely a lose-lose idea?
Mr. Malone’s forecast is quite possible. Most unions are quite weak. They’re simply tolerated by employers who know they can break them in half anytime they chose.
SD:
Why is it that only non-progressive funding corrupts a study and progressive funding makes it believable?
By the way, we won in Iraq.
Paul S….Do you have a job? Do you read or are you illiterate? Unions are “tolerated” and are “weak”? Geez buddy, why don’t you send a quicky email to GM and tell them the news. Apparently they haven’t figured out what you and Malone know! You two must be closet geniuses. Pathetic. This is proof that the American educational system is in tatters.
jerryofva says: “By the way, we won in Iraq.”
A suicide bomber killed 33 people on Tuesday. It was the second attack since Sunday to kill more than two dozen people. The Iraqi Interior Ministry put the death toll at 33, with 46 injured. Two days earlier, on Sunday, a suicide bomber killed 28 people in Baghdad.
Please tell me what you “won.”
I agree, card check will strengthen unions, decrease jobs, increase Democrat coffers and election dominance, but what seems to have escaped notice is it will increase prices because of higher wages, not necessarily take-home pay because of union dues. Again, like cap and trade, this is another hidden tax on the 95% of Americans that won’t have their income taxes raised (except by the States and Local Governments). Unionization, look how well it worked for the taxpayer when public employees were allowed to collectively bargain. Can’t fire, can’t inspire, can’t perspire!
Steve the Moron:
There is a function Republic in place in Iraq which probably has less violence over a month per capita then Detroit or New Orleans, neither of which have a functioning democratic government.
Why the Orwellian naming conventions? Aren’t the polititians proud of their baby? Just go ahead and call it the “Employee intimidation act”.
And Steve P., for a number of years after World War II the German “Werewolves” were active in terrorism. We still won.
jerryofva: Yeah, you tell ‘em! Steve is a moron! Steve, don’t you remember the reason why we invaded Iraq? Our goal was–and I quote jerryofva– to put in place “a functioning Republic…which probably has less violence over a month per capita than Detroit or New Orleans.” And guess what! We achieved it! True, America suffered over 30,000 casualties and the bill will ultimately run about $2-3 trillion dollars to make this dream of a “functioning Republic” which “probably” has less violence per capita than Detroit come true, but it was worth it! We won! Woo-hoo! We put in a functioning Republic! And all along our goal was to spend $2-3 trillion and suffer over 30,000 casualties to do it, and then get thrown out after a few years. If that’s not winning, then seriously, I don’t know what is. Oh yeah, and the Easter Bunny is real, Steve, ya big moron!
Sleaze-Detector the Moron….My, you do wax poetic on occasion don’t you? Apparently you fall into the tree-sitting moonbat crowd? Let me guess, you have all of Jane Fonda’s movies and exercise video’s and are a card carrying member of Marxist for America right? I think you’re sitting too close to your “Sleaze-Detector”. I hear it going off.
Unions in this day and age only exist to protect the lowest common denominator which results in higher costs and less quality. I can’t wait to see who will take on the powerful teachers union but this will never happen.
3. Sleaze-Detector:
This is all that lefties have: personal invective. Just as they constantly bash Bush for a Democrat-created credit-crisis, they are unable to prove any of what they assert.
Would you enjoy losing the secrecy of your ballot? One can only imagine the fallout of this- union thugs paying visits to families letting them know how unhappy bosses would be if they voted the wrong way.
You’ll be able to tell if and when EFCA passes by the sound of doors slamming shut on small businesses all over the country.
Hey Sleaze, you might not want to say “we lost” in Iraq to any military member. They understand the sacrafice that was made in order to save millions of American’s and Iraqi’s from what was brewing over there. Even they youngest E-1′s know more about war than your Obama!
All of America lost with the election of Obama.
OBAMA = One Bad Ass Move America!!!!
There is a good article on Employee Free Choice Act in this month’s Washington Monthly. Basically, opponents want to talk about card check because it is the easiest to attack part of the bill. The rest of the bill is what they’re really afraid of, but they don’t talk about it, because it would expose their true motives. Currently, there are almost no penalties for violating workers rights through union busting efforts. The slap on the wrist that an unscrupulous company can receive is simply part of the cost of doing business. The non-Card Check part of the Employee Free Choice would simply give NLRB power to crack down on union-busters who fire or intimidate or illegally coerce workers trying to organize. I support card check, since we need to unionize the SERVICE industries, which can’t be outsourced. But card check or not, the other provisions of Employee Free Choice Act are even more important.
http://www.washingtonmonthly.com/features/2009/0901.frank.html
Markus:
You like, most union supporters, are living in the past. There are no more Pinkertons lying in wait to beat up brave union organizers. Today’s thugs are hired and used by corrupt union officials to keep their captive members in line.
The “bosses” have found a better way of keeping unions out. They treat their work force to good but sustainable wages and benifits. They also employ unfair tactics by showing their employees how corrupt union officials live high on their dues.
Markus….So basically hearing Fortune 500 companies say that the Card Check act would be bad for business is a moot point for you? Hearing Warren Buffett say the Card Check act would be a disaster for American business is a moot point for you? I will never understand the liberal willingness to sell out American workers in favor of furthering their socialist agenda.
The Employee Free Choice Act is a thinly veiled attempt by union mob bosses to bring American workers to their knees and more money into the union coffers.
Markus….Why do you hate the average working man so much? Are you an illegal immigrant? Are you a mob boss with a vacation house to pay for?
SD and Steve P: Can’t we all just get along?
If you had any background in the requirements for Barack’s transformative programs, you’d realize that if we can even get there from here they will take more than 8 years and likely will cost trillions of dollars as well. But hey, you’d rather focus on Iraq…your choice.
There is no “Employee Free Choice Act”, it is on the face of it, and can’t be called anything else with a strait face, the “Employee Intimidation Act”.
By the way I am not anti union. I am anti union as most exist today. I am all for unions who negotiat good compensation for work done. My father was union until the union self destructed in a fit of hubris. I am union and I am sometimes ashamed because of the use of dues for political ends I don’t agree with. I stay beause there is a need that no one else fills for the very rare occation when a supervisor abuses their position.
I have seen too many unions who are political, corrupt, self serving entities whose only concern about the worker is how to manipulate them and take their money for the advancement of their POLITICAL agendas. Very little difference between them and ACORN.
Under present law, a union can be de-certified by a card-check method without a secret ballot of the workers. Isn’t it only fair to allow such a method to unionize a company as well? Not to mention the fact that under The Employee Free Choice Act, the Workers now have the power to call for secret elections through the NLRB, not the company, as is the case now under present law.
Lastly, this whole idea about thugist union mob bosses forcing workers to sign union cards is a red herring. Most union organizing is done through fellow workers. Suggesting that the law can somehow be easily broken during the organizing process is just plain not true. The fact is, it is company officials who hold the overwhelming power to unlawfully obstruct union organizing.
ex animo
davidfarrar
David Farrar….Wrong. Most union organizing is done by union plants who get themselves hired specifically to unionize. Happens all the time in the retail sector. Secondly, you are wrong that the company holds overwhelming power to obstruct union organizing. Au contraire. The company has to stand idly by while union officials talk to employees who express an interest in a union. Companies are prohibited by law from interjecting any facts or ideas to these employees about how their decision to unionize would affect the company as a whole or the employees jobs. Your basic assertions that the company holds the power under any circumstances are wrong. Ask GM.
Thinking Person,
think some more. The Fortune 500 company’s for the most part are not interesting in or involved with creating sustainable profits by providing good, productive jobs for American workers. In fact most Fortune 500 companies have no loyalty to America, they are about maximizing the short-term profits of their investments, and if they can do it by moving jobs overseas, or importing third world workers to the USA, so much the better.
Don’t confuse me with a socialist or open-borders advocate. I’m a paleoconservative populist. We need to go back to America-first foreign policy, immigration, trade and economic policies.
Markus:
If American companies don’t care about American why didn’t the former Big Three just close down shop in the United States and become foreign car companies incorporated say in a low corporate income tax country like the Netherlands? GM and Ford have been quite profitable in Europe and Asia. It has been their domestic operations that have put them on the ropes.
A “paleoconservative and populist” is just another name for rhw fine American tradion of Know-Nothing nativism. If you are a follower of Pat Buchanan then an even better descripter would be American Neo-Nazi.
Markus…You aren’t seeing the forest for the trees. You state that Fortune 500 companies have no loyalty to America because they are more interested in profits, and they do it by moving jobs overseas, etc., etc. You are missing the point. Business is IN business to make a profit. That’s the part of the equation you don’t get. If unions are forcing themselves on business, would it not stand to reason that that companies would seek to function elsewhere? Apparently you aren’t a business minded person. A “paleoconservative populist”? Whatever, but definitely not a business person. You are basically wanting American business to be saddled with a union yoke and not find another way to make a profit? Methinks you’d enjoy the N. Korean business model better. It better fits your idea of what American business should be.
PS to Markus…..You also cannot claim (at least not with straight face ) that unions are concerned with “creating sustainable profits”. Yeah. Right. They’ve sure helped the big 3 attain “sustainable profits” alright. You forget that unions are a BUSINESS and their sole interest is to get DUES. How you can reconcile giving part of a hard-earned American workers paycheck to some union fatcat is beyond me. I’d suggest more education Markus.
The interesting thing here, and the amusing one, is that people like Sleaze-Detector aren’t that far from the truth. Sure, the study was funded by someone opposed to card check. I would assume she’s affiliated with the U.S. Chamber of Commerce or some business organization. So what? The idea that businesses would unionize, and wages *wouldn’t* increase, costs to business owners *wouldn’t* go up, and unemployment *wouldn’t* increase as a result, is pretty silly on its face, isn’t it? But ideologues like SD don’t pay attention to such things. Rich people, to them, are personified by Hollywood’s view of them: they’re evil, exceptionally greedy, and most of all they’re *stupid*. That means you can trick them, easily. Raise the cost of doing business, and they’ll just adjust their portfolios, but they’ll never actually notice the extra money they’re paying, because they’re so rich.
The other thing to note here is that much of what the Obama administration is doing is directing the infrastructure of the country towards a few large businesses, rather than many small ones. The administration, and all administrations, give lip service to the idea that small businesses are the engines of growth in the job sector. The problem is you can’t unionize them. I suspect that’ll be a deciding factor in Obama’s policies, and he’ll direct his energies in different directions. Then it’ll be a function of which large businesses contribute money to the Democratic party. Those who do will get subsidies, those who don’t will be left alone with their unions, more powerful and less restrained. A bit scary, isn’t it?
Oh, and the Gulags that Sleaze-Detector was talking about? Yeah, it could never happen here…which is what everyone who was ever in a country where such a thing was done said, right up until it happened. Good thing he can joke about it: he’ll probably be one of the guards.
Ms. Rubin,
Clearly you have a limited perspective on this topic.
There is no reason to believe that unemployment would rise significantly under card check. Despite the statistics in this study, the benefits of unionized labor for the economy are clear. The projected impact on unemployment is unlikely. If it were accurate, one could make the argument that the inverse should hold as well (that lowered union membership would reduce unemployment). Obviously this is not the case. Moreover, increased union membership has not historically been associated with such increases in unemployment. The true causation is the reverse of the conclusion you arrive at. High unemployment drives union membership, as workers seek to protect themselves from becoming unemployed.
The benefits of unionization for workers far outweigh the potential harm. Increased wages, job security, health benefits and improved working conditions are all tangible benefits secured by unionization. All the EFCA does is prevent management from interfering with the organizers of a union. It’s about leveling a playing field that has been tilted against labor for decades. Trying to scare folks away from supporting unions by claiming that unions drive up unemployment is dishonest, and also irresponsible.
Peace.
DS
http://www.dartmouth.edu/~blnchflr/papers/w3251.pdf
David S…Faulty research done with a pre-conclusion. It will be interesting though to come back to this issue when the card check act passes (as it will in this liberal climate). Small businesses will close. Fortune 500′s will downsize, move operations overseas or outsource. No unemployment from that David? See, your arguments are so easily shown to be flawed. If you worked in the business sector you’d see it from a real perspective instead of from your Ivory Tower.
It’s always nice to be able to do a study on a topic that concerns people’s livelihoods and come up with a conclusion that is based on inaccuracies. In this economic climate you do a great disservice to the American worker to lead them to believe that paying union DUES will protect them when in reality it will do just the opposite.
You need to start adding some truth to your Peace friend. The two are not mutually exclusive.
Just a few important Democratic voices AGAINST the card-check act…
http://www.workerfreedom.com/warren-buffet-joins-prominent-democrats-opposing-a3611
Unions are the ultimate wealth redistributors. They take money from all of us who aren’t union and give it to the union workers who then give it to the union bosses. The unionized companies aren’t going to lower their slim margins, they’re going to raise prices. It’s true that the union workers have to pay the higher prices, too. However, they’re increase in compensation more than makes up for it thanks to the rest of us. In fact, the only reason unions can exist at all is because there are non-union workers to offset.
Employee Free Choice Act
~~~~~~~~~~~
That’s an Orwellian name if ever I heard one. Free choice my eye. My friends husband was approached by two “enforcers” of said act. They were quite threatening, and we don’t even live in Chicago.
I am quite sympathetic, Thinking Person, to the problems that unions can cause when they’re unwilling to work with management. I’m particularly hostile to public employee unions, because I think public service ought to be a privilege, and also because I’ve seen up-close the deleterious effects that can occur when its impossible to fire a worker at a government job. With the big three car companies, the unions arguably have been somewhat of a problem as well. But NOT the main problem, which is the burden that car companies face providing benefits for employees and ESPECIALLY retireess. Toyota and other companies can survive in USA because they’ve only been here for a couple of decades and don’t have huge retiree benefit costs. All of these costs should be spread out among tax payers. Ideally payed for with an export-friendly VAT tax.
But the one sector of the economy were we REALLY need plenty of union help however is with unskilled labor in the service industry. Driving up the wages of unskilled labor is essential if we are not to become a third world country.
@36. AThinkingPerson:
That was my assessment of Dr. Anne Layne-Farrar’s work as well. You claim that businesses will close or move overseas – but that is exactly what has been happening because of the union-busting anti-worker policies of the GOP. When workers are not allowed to organize to protect their interests, corporations wield enormous power over our government and economy without a counter-balance.
Unions are historically the one force that could create a long term mutually beneficial relationship with corporate capital – a partnership that led to decades of prosperity after WWII. It is the decline of unions under GOP pressure that led to a government operated for the benefit of corporations, without regard for the rights of the people.
I’d much rather be able to choose a card-check process than be forced to endure intimidation and retaliation from my employer under the current rules.
A return to unionized labor is a good thing for all Americans, as it raises the overall wage level, increases job security and stability, and provides a political voice to the interests of workers. Without adequate wages, job security or a political voice, Americans lack the tools to defend their nation from rapacious global interests. To restore the USA, we must restore the right to organize – or we court revolution.
Peace.
DS
Markus….Why do the big 3 have huge retiree and benefit costs? You and I both know the answer….unions. Is it fair that they’ve made our own American auto industry into a big behemoth that cannot compete with foreign carmakers? No. Do they care? Are the GM unions making any concessions to help the company survive? No. Unionizing unskilled workers will lead to a dearth of unemployed unskilled workers. Look at the employment figures for Las Vegas where the unskilled service workers are unionized. See any benefit there? Neither do I.
David S….Workers who organize have NO power to keep their company/job in this country. In case you didn’t know, I’ll let you in on a little known secret…unions have 2 and only 2 powers BY LAW…..the power to 1)power to organize a strike and 2) collect dues. That’s it. The company on the other hand when faced with union demands has the power to 1)hire interim workers (scabs), 2) outsource, 3) move operations overseas/across borders, 4) close up shop and put workers, scabs and management out of work. It’s idealistic of you to assume that Norma Rae is reality and that unions are the first step to a chicken in every pot. Quite the opposite. It stifles business, profits and ideas. Not exactly what we need to be doing in a recession. For reference, please see what union “ideals” have wrought on the steel industry in PA, the clothing industry in NY, the coal industry in VA and on American automakers. Not exactly a trend I’d like to see sweep the nation.
@42. AThinkingPerson:
Where do I start?
Because they have many more retirees than they have current employees – they have reduced the workforce by adding automation, and in the process have also reduced their market share by ceding the small car market to the Japanese. Management being the ultimate arbiters, blaming the unions is absurd. Unionized employees have given back quite a lot in concessions to assist management in recovering from decades of incompetence, but much of the damage will be difficult to reverse.
You really are a desperate one.
Data from the Bureau of Labor Statistics clearly shows that Unionized workers earn higher average wages than non-Union workers in the same industry. Also, Union jobs are more likely to include benefits such as health insurance and a pension. Through collective bargaining, workers in a Union are able to negotiate for better wages and benefits with one voice from a position of strength.
In Union workplaces, there is an established, agreed upon grievance procedure for resolving workplace problems. If an employer wants to discipline a worker, they have to follow the process and prove their case. If a worker has a grievance against an employer, they can get their complaints heard and force the boss to change.
Unions also give workers a voice in workplace decisions that affect their lives. Through negotiating a contract with their employer, workers have the opportunity to shape workplace policies on a wide range of issues like hours and working conditions. In addition, the grievance procedure provides a voice for workers in policy decisions made between contract negotiations.
When unions succeed in achieving solidarity in an industry, finding interim workers is not practical. Many service industries cannot be outsourced – your plumber can’t be a 3rd world contractor, and neither can your children’s teachers. The vast majority of our economy is in service industries, and these are on site services that are not going to be moved overseas.
Again, blaming unions is foolish. Poor management at private companies and unregulated free trade policies are to blame for any difficulties in these industries. Steel manufacturing uses far less labor now than at any time in the past – modern automated processes allow a skeleton crew to run an entire mill with great efficiency. Similar technological improvements apply in the other industries you mention as well. Unions cannot be blamed for the incompetence of company management.
Peace.
DS
David S. :
Do you actually have any real world experience in dealing with unions or is your knowledge purely academic?
Let me fill you in on some things.
My father was a union organizer for much of my childhood. I grew up handing out Democratic campaign literature outside our local polling place and spending most of our “social” time at the Union Hall. My father was the assistant manager of the local electrician’s union (and my grandfather had been the manager of one of California’s heavy equipment operators union). When my father’s boss, the manager of the union, was voted out he lost his job. Thankfully he had pursued a juris doctorate in Labor Relations and was able to get a job at a corporation in Human Resources.
Let’s skip forward a few years. At the plant my father worked at the union voted to strike every two years – every time the contract came up for renewal. The plant was owned by a Japanese company, and they became progressively upset by the actions of the union.
I had a VERY good paying job at the plant, and I (along with a number of others) refused to join the union. Thank God for Right to Work states! I had no intention of losing two to three months of income due to a union strike when annual layoffs always deprived the majority of workers of at least two months wages. You do the math.
The time came, the union voted. It was supposed to be a secret ballot vote. My boyfriend at the time was a union member – what he (and others) told me was that the president of the union told all of those who wanted to strike to go to one side of the room, and those that did not want to strike go to the other side of the room. FYI, that was illegal. FYI, it made no difference. There were a number of people I personally knew who DID NOT want to strike – yet they were so scared of the management of the union and some of their coworkers, that they went to the “strike” side of the room.
There is a very serious reason why the secret ballot is so important.
So. The union “voted” to strike. What were the issues they were losing wages over?
1) Management wanted to staff lines by seniority so that they did not have to retrain hundreds of workers during each layoff, they could just lay off each line by seniority. The union claimed that workers would be “losing their seniority benefits”.
2) Management wanted to standardize the health insurance program and make the salaried employees’ insurance plan the plan for the entire company. This would have raised the physician co-pay from $10 per office visit to $15 per office visit.
That’s it. Those issues caused a strike that lasted almost three months, depriving union employees of those wages and costing the company money in lost productivity and increased security costs.
My father tried to negotiate with the union. There was no negotiating. When the strike came the company moved my family to a hotel in another town because of death threats and what had happened to previous HR management in my father’s position. Think rattlesnakes in the mail box, bombs wired to the car, shots fired towards the house. These things had all happened in previous strikes.
I crossed the strike lines to work. I was HAPPY with my benefits and wages, and had no problem with the plans management had. Strikers tried to overturn cars entering the plant. They succeeded with one, a small car belonging to one of the managers. They threw rocks and other missiles at cars as they entered or exited. There is news footage out there of them attacking my father’s truck, throwing rocks and trying to rock it over.
Eventually the strike ended. The Japanese who owned the plant were losing too much money and were most unhappy – so they signed on the dotted line and union workers went back to work. Temporarily.
They immediately started researching alternate locations for their plant. They decided upon Tijuana, Mexico. They transferred those in management they deemed essential to their operation (including my father) to San Diego. They closed the plant, which was the primary employer for all the small towns in the area.
All those wonderful union members lost their jobs. Except the president of the union.
Oh, and as a side note. Did you know that it’s almost impossible to join the AFL/CIO as a national employee unless you’ve run a “successful” strike? After the strike, the president of our union left the state to go to work for – you guessed it, the AFL/CIO.
So, David S., until you have real world experience in dealing with unions your opinion is worth exactly jack. I’ve been around them my entire life, and while they once served a purpose, they are now totally corrupt. They exist not for the betterment of the worker – but for the advancement of the union leaders. The workers are just fodder.
#35 David S:
“The benefits of unionization for workers far outweigh the potential harm. Increased wages, job security, health benefits and improved working conditions are all tangible benefits secured by unionization.”
There you go again…singing “Solidarity Forever” in three-part harmony.
But you never did answer my question from last time around.
What union are you personally a member of?
Big Labor has consistently pushed for higher unemployment via minimum-wage supports, certification boards and card-check policies.
Shrinking the supply of labor is the primary tool Big Labor employs to drive up wages.
The EFCA is a constiuency builder for Labor Bosses and the political shrills their money endorses and laborers who support it are merely useful idiots.
More of David S’s naive crap:
“A return to unionized labor is a good thing for all Americans, as it raises the overall wage level, increases job security and stability, and provides a political voice to the interests of workers.”
Really, dude, put down the AFL-CIO press release and look at the evidence that’s in front of your face.
Every time the Democrats want to hike the minimum wage, the AFL-CIO hires a brass band and supports the initiative…despite the fact that most minimum-wage workers are members of no union whatsoever.
So what is REALLY going on, despite what you choose to believe and to repeat, ad infinitum and ad nauseam, is that union members’ dues and PAC contributions are being used to agitate for raises for people who aren’t even union members.
And why do you think this is so…altruism?
Hardly. The Democrats own the union leadership. If the union bosses don’t cough up the cash and buy the airtime and put shoe-leather on sidewalks for the Dems’ socialist notions, the Department of Labor all of a sudden discovers that there’s corruption among the Labor bosses,and prosecutions follow lickety-split.
And David, DO try to get this through your head…just because it’s CALLED a “union”, doesn’t necessarily MAKE it a union. A lot of so-called unions are little more than “fronts” for the companies, or consortia of comanies,that they supposedly have organized.
BTW, David, do you know that the last Union president to sit in the White House was Ronald Reagan of the Screen Actors Guild?
Reagan was honcho of that crew back when Mickey Cohen owned Los Angeles, so he had the AFL-CIO’s number…
It was remarked by “Malone” that an employer might use card check to his advantage. In practice this would not work if a contract is in force since then the union is the only recognized spokesman for any one or group of employees. An employer who tried this would be taken to court for ‘unfair labor practices’ and would most probably lose with prejudice. This has happened in Canada and the employer did lose.
David S…. You show your ignorance by using date from the Labor Dept. The LABOR dept. See any misnomer there sir? You easily brushed off my questions about how unions have affected the steel industry (more automation?? what???), the textile industry, etc. I guess the information you absorbed in academia doesn’t translate into the REAL WORLD.
You remind me of college professors that teach things like business management. They know all the theories and why everything should work, the problem is that they’ve never functioned in that capacity in the real world and have no idea how to apply that knowledge in the real world.
I am choosing to give you a pass on your lack of knowledge on the subject of unions. I have a feeling you’ve never functioned in any capacity in a real world business situation. That become crystal clear when you’re using “data” from the labor debt. Welcome to the real world of unions David S. Please, do yourself a favor and educate yourself outside of the confines of what you’ve been taught in college. You’ve shown your apparent limitations in this area and it would behoove you to talk and learn from people who are working and living through this.
#48 Hrimathurs:
“It was remarked by “Malone” that an employer might use card check to his advantage.”
Indeed he might.
“In practice this would not work if a contract is in force since then the union is the only recognized spokesman for any one or group of employees. An employer who tried this would be taken to court for ‘unfair labor practices’ and would most probably lose with prejudice.”
It wouldn’t take all that much to get a “pet” judge to vacate the contract as null and void.
(Obama is apparently all for this kind of thing in the mortgage contract context), and most contracts I’ve worked under have a fairly boilerplate severability clause to render any parts of the CBA severed should they be found against local, state or Federal laws.
Once His Honor gets the envelope of small unmarked bills and renders his decision, then it’s open season for a card check decertification campaign.
@44. ElvenPhoenix:
Yes, I actually have had real world experience in dealing with unions. And thanks for your anecdote. The idea that a corporation would shut down over $5 in copays and maintaining work rules is comic. Obviously you aren’t sharing the big picture here – you were a scab, and you helped this company to fight a union that your own family worked to organize, so you were also a fool. I won’t defend violence, but property damage is nothing compared to the brutality that has been inflicted on union members over the years. Your sob story is great, but union employment is the foundation of prosperity – as you said, you liked your wages and benefits, which were no doubt negotiated by the union you refused to support.
@47. Bilgeman:
Exactly. Unionized labor helps raise the overall wage level. You were paying attention!
Yes, because it is in the interest of all that people be able to make a living – even those who aren’t organized.
@49. AThinkingPerson:
Yes, because you didn’t get very specific. In my opinion, the impact of unions in all the manufacturing sectors you described has been reduced by the advent of highly automated processes that reduce human labor inputs.
@50. Bilgeman:
Around here, that judge would probably be impeached. Labor contracts are not taken lightly. Appeals aren’t hard to get in such cases, either.
Now we see how you envision Justice. Thanks for sharing your vision of a corrupted Republic. Who needs laws, anyway, right?
Peace.
DS
David S….We will overlook your inane comments and attribute them to your apparent youth and inexperience. Trust me….it’s OBVIOUS from your replies. You are living in a dream world friend. Utopia doesn’t exist. I’d suggest further research into your beloved labor laws. It’s the American workers that count in this country David. Why you insist on wanting power taken from the worker and given to a labor boss is beyond me. One of these days, when you get a real job in the real world, remember your idiotic statements here and try and dissuade the next imbecile from making the same conclusions you have. You’d do yourself good by reading a bit…maybe some Ayn Rynd or the Communist Manifesto perhaps? Of course that might be required reading in your junior or senior year. Apparently you haven’t reached that level of awareness quite yet.
#51 David S:
“Exactly. Unionized labor helps raise the overall wage level. You were paying attention!”
As a union member, which you apparently are not, I paid my union officials to get ME a raise.
The minimum wage guy can damn well negotiate his own compensation package.
This is not a good thing, David. If Burger King now has to pay their fry-cook $15.00 an hour, then how much more is a Whopper going to cost the unionized pipefitter who STILL makes $40.00 an hour?
Yeesh, man…think it through! Remember the McDonald’s “Two for $2.00″ ad campaign?
In a short time it became “Two for $2.42″. Hiking the minimum wage begets an inflationary spiral, since the labor costs are passed through to the consumer…and which end of the socio-economic scale gets hurt the most from inflation David?
Let’s see if YOU are paying attention…
“Now we see how you envision Justice. Thanks for sharing your vision of a corrupted Republic. Who needs laws, anyway, right?”
You know where I met my first “pet judge”, David?
When I was organizing a British-flag cableship in Baltimore Harbor.
It was a “handshake organizing drive”, with both management and the unions agreeing to climb in bed together,and my outfit brought this weaselly little schlub onboard to certify the card-check.
See, we didn’t have a secret-ballot election, since the company agreed to accept the pledge cards as ballots.
By the way, the wages in that contract were maybe 3% LESS than the contract the same union had with the American cable ship company, (Tyco).
That’s a bogus “union” for ya…and a “pet judge”.
So don’t sniff too hard at the vision of justice I’ve experienced on the waterfront…the stench you’re smelling is wafting over from those bums in the AFL-CIO whose song you sing and whose dance you tap.
Reading the garden-variety pro-union comments from the leftists on this thread astounds me. It’s incredible the extent to which they hide from – not theory, not even empirical knowledge – but the simple metaphysics of economics.
Consider: Labor costs, like every other cost of business and along with profits, are paid for with revenues.
QUESTION: Where else would the money come from?
Consider: Labor costs account for between 60-70% of revenues. Sometimes as high as 75%. Profit margins tend to hover around the 5% margin. The remaining revenues are used to pay for the other costs of production and reinvestment.
QUESTION: When unions procure (coerce) pay rises for the workers, where does that money come from? Profits?
Consider: Indeed, pro-union leftists labor under the delusion that pay rises are obtained at the expense of “the greedy capitalists,” who will fund the raises out of their profits. Right on! Yet even halving profit margins – which would decimate the motivation to be in business in the first place – would not account for any significant rise in wages.
QUESTION: So where do these raises come from? The question seems fair to ask, since these pay hikes are submitted as “proof” of the “success” of unions (see comments from pro-union leftists above).
Consider: There are two main ways in which such pay rises can be funded. “Wishes” and “whims” aren’t either of them. The first way is by increasing the productivity of each worker, so that each worker generates more revenue from which to be paid wages. Since unions have throughout history fought tooth and nail to decrease the productivity of workers, we can cross that one off the list when considering how union wage hikes are paid for. That leaves us with the only other way to increase revenue – raise the consumer price of the product.
QUESTION: Do these pro-union saps understand the difference between real wages and nominal wages?
Consider: Nominal wages are the absolute numerical amount, in dollars, earned by workers. Real wages are a measure of how much those dollars are worth, i.e. how much spending power they represent.
QUESTION: What happens to the value of “real wages” when consumer prices rise as a result of unions demanding higher pay?
Consider: The value of real wages go down. Additionally, since consumers are paying more for goods produced by union labor, they have less money to spend on other things. This causes unemployment in the industries that supply those “other things.”
QUESTION: So what if everyone was unionized and everyone got a raise?
ANSWER: Nobody would be better off. The price of everything produced by everyone would be higher in order to fund those pay rises. Without increasing worker productivity, there is no alternative source for those pay rises. The money has to come from somewhere.
The pro-union rhetoric is based on lies and impossibilities. Unions are not responsible for increases in prosperity since the Industrial Revolution – advances in the means of production are. The ONLY possible way to increase prosperity is to produce more wealth. Pro-union leftists labor under the delusion that money is wealth. The conclusion of this logic is that our prosperity is only limited by the amount of paper and ink that we have access to. Since this is obviously not the case then the real conclusion is that wealth consists of things – things that are produced. Produce more and there is more wealth to go around. This is how the value of real wages has risen over the years and is why even the poorest among us in this country are wealthier than the wealthy of hundreds of years ago, in terms of the health care and technology they have access to.
Leftists don’t understand this. They see everything through the infantile prism of class warfare. It’s “us against them.” It’s the poor downtrodden worker versus the greedy capitalist bastards. When they demand pay rises, they don’t care where the money comes from. It never occurs to them that the money comes from other workers just like them – consumers just like you and me. It doesn’t occur to them that every raise they take is taken at the expense of others – not capitalists, who couldn’t afford to fund such raises out of their profits even if they wanted to, but from ordinary families struggling to make ends meet like anyone else, people for whom an increase in consumer prices affects their level of prosperity immediately. No, lefties don’t think of any of this. Like children who don’t understand why their parents can’t “just give them” more pocket money, they assume in their wistful, woolen minds that there is a mythical stash of money “out there somewhere” to which only the greedy leaders of industry have access to – and obtaining wage hikes is simply a matter of persuading the greedy bastards to shovel some of it their way.
Such thinking is the mark of a child, not an adult. It really is about time these simpletons began to look at the world through rational eyes.
George Reisman has an excellent article out this week which explains the reality of unions perfectly.
http://mises.org/story/3370
I’m still thinking David S. is a young college kid full of false notions implanted into his as-yet-unformed brain by a college professor who has never worked outside of the ivy institution walls. You can read it in is posts. It’s all theoretical and no reality.
I wish for David S. a job in the real world faced with a union boss, a union card and a pen (and the prospect of being paid not according to quality of work but seniority). That’ll snap him back to reality.
A greater effect of the “Card Check” will come from the unions organising more illegal immigrants into their organizations, which will be a protected activity under the law, Click Link:
http://rebuildtheparty.ning.com/profiles/blogs/america-1
Look at the last 20 years of business activity here. When the cost of labor goes above the level of profitability, many business’s chose to outsource manufacturing to Mexico and China. Leaving the local workforce (unionized or not) out in the cold. Card check will result in more of the same or in the case of big business (GM, Chrysler, Ford, etc) government subsidies or bankruptcy.
That greedy rich bastard can only carry so many people on his back.
@52. AThinkingPerson:
That’s what I’ve been trying to explain. Unions give workers a collective voice through organization, which is a fundamental right.
@53. Bilgeman:
Your understanding of the relations of labor & capital is lacking. Unions negotiate for their members, and for their potential members. All those minimum wage workers are quite happy with their extra take home pay, and they can see who is fighting with them to grow their slice of the pie. It would be quite shortsighted to negotiate raises for union members and not also raise the wage floor for all workers to make sure that the poor can still make ends meet.
It is true that minimum wage increases will be in some part passed on to consumers – but ultimately, minimum wage standards raise the standard of living of all citizens. A 10% increase in the minimum wage puts real money into the hands of hard working Americans, and this gain is greater than any attendant price increases.
Your ragging on company unions doesn’t dissuade me at all from my support for organized labor. If you don’t like your union – organize your members to get yourself put in charge. A 3% discount is not a massive difference – and as you say, this is a “bogus” union – imagine what a “genuine” union would do for workers. I’d imagine wage parity would be the answer…
@54. Jason:
Your simplistic analysis has more holes than a sieve. Most of your questions are not even relevant.
Do you not understand that even under your simplistic analysis, if everyone was unionized and got a raise, they would be better off? You claim that labor represents most of the cost of goods sold – but unless you change your tune to claim that labor represents 100% of the cost, a raise in wages is a raise in real income, which by definition means everyone is better off unionized. Simple. It’s about re-assessing the real value of labor.
Think about it…
55. AThinkingPerson:
Sounds good to me. I could get behind that wish. It’s the boss that threatens to fire anyone who dares to mention organizing that worries me.
Peace.
DS
#58 David S:
“Your understanding of the relations of labor & capital is lacking.”
It must be. I’ve seen it from inside the bilges and the deckplates of ships. It must look quite different from wherever it is that you sit. (A basement office at AFL-CIO headquarters on 15th Street in DC?).
“Unions negotiate for their members, and for their potential members.”
That’s the theory. The reality is that the Union negotiates for itself FIRST. There is a VAST difference between rank and file, (workers), and the union hierarchy,(Labor bosses).
“All those minimum wage workers are quite happy with their extra take home pay, and they can see who is fighting with them to grow their slice of the pie.”
If those min wagers are so grateful, then why has union membership been dropping like a sinking ship for the past 40 years?
The answer, fella, is that the min wage workers don;t have to do a damned thing to get their raises, except for get a skill or an education in a trade or profession that pays decently.
Seriously, David, how many people who dream of making a career out of wearing a plastic hair-bag and working a deep-fat fryer at the drive-thru “Choke n’ Puke” do you think are out there?
” It would be quite shortsighted to negotiate raises for union members and not also raise the wage floor for all workers to make sure that the poor can still make ends meet.”
Sigh…unions aren’t supposed to be bastions of social engineering, bubba. They’re supposed to be business organizations dedicated to securing as much return for their members’ labor as they can.
Let me tell you about shortsighted. If I was the President of the Almagamated Brotherhood of Thugs, I’d campaign AGAINST minimum wage laws, “living-wage” laws and all the other subsidies for the unskilled or the over-supplied.
Let ‘em make pennies on the dollars they earmn today…let them earn what the market will bear and live in abject poverty.
MY Lads and Lasses, I’d be right in there swinging to get ‘em good pay, great training and bennies second to none…and I’d bust their asses if they pulled any shenanigans. No dopers or drunks, no slacking, no goofing off on the Company’s time.
Woe the management ass-kisser who tries breaking my peoples’ rice bowl to make him or herself look good.
You don’t owe the Company your labor, but the Company doesn’t owe you employment either.
So, the point is that MY union’s people would be doing well because they’d be a quality, dependable and honest workforce. An asset not just to the union, but to the companies smart enough to employ ‘em.
And people being how they are, they’d display it. My guys and gals would be living in nice homes, driving new cars and trucks, hauling boats…
And back to that former minimum wage schlub who’s now living under a bridge or in a cardboard box in the bushes behind the “McVomit’s” franchise parking lot.
He looks out one day and sees a blinged out, righteously phat Cadillac Escalade drive up, and on he rear bumper is an “Amalgamated Brotherhood of Thugs” bumpersticker.
And he wants to get him some of that.
THAT, chum, is how you recruit for the Labor movement.
The way the unions are doing it now, I got at least a one hundred dollar a day raise when I told those lazy greedy bums to go piss up a rope.
“Your simplistic analysis has more holes than a sieve. Most of your questions are not even relevant.
Do you not understand that even under your simplistic analysis, if everyone was unionized and got a raise, they would be better off? You claim that labor represents most of the cost of goods sold – but unless you change your tune to claim that labor represents 100% of the cost, a raise in wages is a raise in real income, which by definition means everyone is better off unionized. Simple. It’s about re-assessing the real value of labor.
Think about it…”
I have thought about it David – evidently you haven’t. You are still trying to evade the most basic common sense. Nor do you show any signs of understanding what real wages are and how they’re affected by the level of consumer prices. What is so hard about understanding that union wage hikes are paid for by an increase in consumer prices? What is so hard about understanding that if everyone got a union raise, the only way to pay for that raise would be by raising prices? Therefore no, everyone would NOT be better off.
You’re still laboring under the delusion that we can simply print more money to make us all wealthier. You’re still don’t understand that prosperity comes from productivity and NOT nominal wage levels.
And most of all, you still don’t understand that union wage hikes are paid for by workers in non-unionized industries – and ultimately, consumers. They are NOT paid for out of the profits of business owners. If you don’t want to believe that consumers pay for union wage hikes then it’s as simple as this: show me where the money comes from.
You deride my analysis for being “simple.” You’re right, it’s as simple as abc – you cannot increase prosperity by distributing wealth that doesn’t exist. Unless you increase productivity, the best you can achieve is to snatch wealth away from one worker and give it to another. This is what unions do.
Please DavidS, for the sake of your own self respect, grow up and learn to start thinking straight about the realities of life.
David S:“Unions give workers a collective voice through organization, which is a fundamental right.”
You’re right, it is a fundamental right to join any union or collective you like. But there is a flip side to that. It is also the fundamental right of the business owner to hire whomever he likes and to offer them whatever rate of pay he likes. Those are the fundamental rights of property, the cornerstone of civilization and freedom.
We should keep the secret ballot so the companies can keep secret intimidation.
There’s a business where the north had a union and the south was non-union. The owner sold the property of the south business during the real estate boom at a huge profit and did not put it back in the business which is ,of course, his business. The business started dying a long slow painful death, the owner stopped putting money into it, and eventually was remiss in paying employees and stopped paying their health insurance. Now the north branch was unionized so it didn’t take too long for the union to start legal proceedings against the owner and before too long the employees up north were payed and their health insurance brought up to date.
Meanwhile the non-union branch was still not payed and health benefits stopped. No notice was ever given of lay-offs, no severance packages were ever offered. The owner continued to live an extravagant lifestyle off the backs of the workers he had milked. The president of the company, his girlfriend (head of HR) and a few minions went on a weeks vacation, the owner signed part ownership to his new wife and sold the rest of the company to someone who has not showed his face. So there you have it.
In this modern day of buy and sell to turn a quick profit or buy and tear apart and sell off piece by piece for self gratification, there is a new business owner who’s only concern IS self profit and is not in the business of creating a business that profits not only the owner but the workers also. I think many companies use lay-offs to get rid of workers before they reach what the business considers a unsustainable salary level and then bring in new workers at a lower wage. Workers are brought in and out like merchandise or office supplies. I don’t think they do it because the workers are bad, but just because they are a part of what a company considers an expense. Seniority might let some lazy or older workers stay but it does let the workers know where they stand and gives time for planning for the worst.
Of course a few are allowed to feed at the trough because everyone knows that divide and conquer is the oldest most successful war strategy.
Unions on the other hand have a reputation of being just as greedy and corrupt as many businesses (we’re paying that price now of greedy businesses) and the American car industry stumbled and might fall not because of unions but because of a reputation of poor quality they have not been able to overcome yet. Unions can be good just as companies can be bad and visa versa but to me in the end business can do a lot more harm to people as evidenced today, than the union of workers ever did or could do.
That’s my story and I’m sticking to it.
@60. Jason:
Of course wage hikes are paid for by an increase in prices. However, the price increases are not larger than the salary increases, so everyone is better off.
(@54. Jason:)
So, taking your example, let’s compare a $75 wage with a $100 wage, accounting for price increases…
At $75/hr, the laborer needs to work 1.33 hours to generate one unit of revenue (that’s the cost of living). Revenue = $100/hr, Labor = $75/hr
At $100/hr, the laborer generates the same unit of revenue in 1.25 hours. The difference is how much better off he is. Revenue = $125, Labor = $100/hr
That’s using your own figures. Just bump the portion of labor costs from 75% of revenues to 80%, and every laborer is better off, because the value of their labor has been increased relative to other factors. Is that so hard to understand?
The simple truth is that you can increase median prosperity by distributing existing wealth more broadly – by dictating a higher wage for labor.
I am happy to demean myself in the cause of the education of others. Your misapplication of logic and misunderstanding of arithmetic are troubling, and I hope to assist you in improving your comprehension. The realities of life show clearly that workers benefit when they mobilize to win improved compensation, working conditions and benefits through unionization.
That’s a grown up thought for you to grow into.
Peace.
DS
@63. David S:
The price increases are not larger than the salary increases? In your example, maybe not – they’re exactly the same.
At $100/hr, the laborer generates the same unit of revenue in 1.25 hours. The difference is how much better off he is. Revenue = $125, Labor = $100/hr
Labor goes up $25, revenues go up $25. Why? Because in this hypothetical example, the increase in labor costs is being funded entirely by an increase in consumer prices. It’s not being funded by either a decrease in production costs or a decrease in profits. So the consumer is paying every single cent of the increase. You are merely taking the simple fact that two numbers, when increased in a linear fashion alongside each other, will yield a smaller and smaller ratio, headed towards 1 – and using it out of context in order to make an entirely fallacious point.
Once again you are completely ignoring the simple fact that wealth and prosperity are not measured by nominal sums of money but by actual tangible things that have value to humans. A piece of paper with an amount printed on it is not wealth. So when you talk about shorter times to produce a unit of revenue, you are talking about a shorter time to produce a unit of revenue that is worth less in a climate of higher prices.
Also, if you raise everyone’s wages across the board then the other costs of production – materials, fuel, transport etc – rise too.
What I’m really finding hard to understand is that someone can so thoroughly misunderstand something which isn’t that hard to understand at all. The quote above shows the extent to which you misunderstand. Let’s consider ‘bumping the portion of labor costs from 75% of revenues to 80%,’ for instance. It doesn’t matter what those revenues are in nominal dollars, the proportions remain the same. If you increase prices by raising wages then all other costs of production increase too (what do you think happens to the price of steel when steelworkers get a raise?). So what 5% of the revenue pie are you going to shove aside in order to give the workers an extra 5% slice? You’re laboring under the delusion that you can simply increase wages and consumer prices to your hearts content while freezing all other costs of production. Sure you can – in the make believe world of pen and paper.
The only extent to which you can increase median prosperity by distributing existing wealth ‘more broadly’ is by taking from the rich – confiscating their profits – and giving it to the not so rich. It’s a simple socialist redistribution of wealth that you’re proposing. It’s a shame that such an economic philosophy has never managed to increase median prosperity anywhere – unless of course you’re talking about a median level of poverty.
I will say this again. Since wealth consists not of banknotes but of the things which those banknotes are exchanged for (at a rate of exchange which is not fixed in any sense of the word) then the only way in which you can increase the prosperity of the worker is by increasing their output.
Hilarious. The realities of life show no such thing, since unions exist not to improve the productivity of workers but instead to jack their wages above market levels, which will never improve general prosperity. The only prosperity it will improve, to some extent, is that of union workers – but only to the extent to which other workers are not unionized. In other words, their increases in prosperity come at the expense of other workers and those increases become less and less as a higher proportion of the workforce becomes unionized and procures the same gains. The only legitimate, non-destructive role of unions is to ensure that market rates are being paid and to ensure safe working conditions. Unfortunately this is not the role that unions have assumed.
@64. Jason:
Let me try once more to help you see the errors in your “argument”:
This is a serious error on your part. We have already accounted for the total cost of labor – you can’t count that cost twice. Either a cost is labor, or it is something else. We have already assessed the increased cost as labor – using your own formula. Regardless, unless 100% of all cost is for labor, increased wages benefit the employee. As you say – it approaches 1, but unless it reaches 1, a raise in wages is just that – a real raise.
This is called taxation. It has been practiced for millennia, and is one of the basic foundations of civilization. The state has a monopoly on power, and those who have more wealth to lose naturally spend more to defend their larger interest.
On the other hand, unions increase median prosperity by compounding the value of labor. There is no downside for the capitalist, who is still free to charge the prices the market will bear – which is increased when laborers collect increased wages. It is quite shortsighted to ignore that rising purchasing power on the lower end of the economy is what drives true growth in the economy.
It is precisely these two implementations of such an economic policy, along with technological innovation, that have made possible the increase in prosperity in western nations over the past 150 years. Without progressive taxation and unionized labor, the west would not exist as you know it today.
Unions exist, as you indicate, to promote the welfare of their workers first, but they also play a direct roll in improving the situation of all labor, by supporting workers’ rights, minimum wage laws, and other pro-worker initiatives. Unions can improve the relative situation of all wage-labor – and have been shown to do so through the history of the USA over the last 150 years. Did you miss the economic vitality of post-war America? Need a refresher? Unions make prosperity possible.
Your disdain for the value and contributions of unions demonstrates a very transparent disgust for those who work with their hands, and is very distasteful to most people who actually do work for a living. There is a good reason that most workers support unionization when given the opportunity – unions work.
Peace.
DS