Unions help U.S. workers

Letter writer Pat Nolan (5/8) asks, “When will unions learn that they, and they alone, are responsible for ruining the American economy over the past 40 years?” I had to wonder what version of history he has been witnessing. My recollection of eight years of Reaganomics and eight years of George Bush make me think maybe they had more than a little to do with it.

Heaven forbid that the GM workers might be concerned with the fact that GM management wants to alter work rules that they and the union negotiated in previous contracts. It’s not called extortion. It’s called good faith bargaining, Mr. Nolan.

I sure hope that you have never gotten extra pay for overtime, sick days or a paid vacation, or been subject to a 40-hour workweek. I hope you haven’t been covered by a company-sponsored health plan or had to work in a safer work environment.

These are just a few of the things those evil, pesky unions have done for me.

S.A. Kirk
Basehor

Leave it to the uninformed such as Pat Nolan to write wishing ill to the GM Fairfax employees currently on strike. We are just trying to keep what little we haven’t previously given up. No employee is getting rich at GM, and it’s hard to believe how many in the area wish for our demise.

Each of our jobs has a direct influence on approximately 12 other jobs in the KC area. If GM were to close the plant, it would be just a matter of time before even Mr. Nolan might realize that he knows or cares about somebody affected.

I invite Mr. Nolan to journey to Oklahoma City and see how that community is doing since the closing of its GM plant.

Mike Thomas
Lawson, Mo.

What unions are responsible for:

A 40-hour workweek.

Safety rules in the workplace.

Time-and-a-half wages for more than a 40-hour workweek.

Child labor laws.

The list is endless.

Guyen Morrison
Kansas City

Comments

[devin]

Thanks for the explanation, Marc. I'd never heard of that law before. Based on your explanation, that does sound pretty kooky. I'll have to research it further.

[Marctnts]

Devin,

There are two basic categories states fall within. These categories determine what the "real" minimum wage for any job is.

The first category are "right to work" states, in which a business is allowed to pay any wage that they can find an employee to work for, subject to minimum wage laws.

The second category are "prevailing wage" states, in which businesses must pay what the state determines is the prevailing wage similar employees work for. For all intents and purposes, most states that have a prevailing wage law determine this to be union scale, or something very close to it. Michigan is a prevailing wage state.

Prevailing wage laws are another one of those negative things (in my opinion) that union's are responsible for. Originally conceived as protection for union pay scales, they are in actuality an adverse system in which the "market" value of labor is disregarded in favor of an artificial and bloated scale.

[NoMoreMrNiceGuy]

devin - I understand perfectly what a budget is and I understand what a deficit is. People praise Bill Jeff for doing nothing more than raising taxes and cutting military spending. Big deal, nothing genius about that. What is genius about taking from others to afford for yourself? He did NOT create jobs, those jobs happened during a shirt window of the dotcom bubble of which had nothing to do with anything he did. NO one ever mentions the 11 million jobs that dissolved on his watch in 2000. Again it is more of indoctrination and wanting to believe what is not fact. He also ammended NAFTA which certainly did not help the jobs in this country. He is given way too much credit when he does not desrve such. He is a book smart guy, sure thing.
Missouri is a non-right to work state, Kansas is a right to work state. Meaning in Kansas you can work at a union shop without having to join the union.

[devin]

$5 Trillion dollar "deficit", eh, NMMNG? I'm not even gonna bother with you anymore. Somebody else can explain the difference between deficit and debt and how it's possible to balance the budget and still have a debt. I'm done. The guy doesn't want to learn.

However, I'm interested in learning what a non-right-to-work state is. Ekan, I've never heard that term before. Does that mean some states require auto companies to use union labor? That certainly changes things if that's the case. Please explain further. Thanks.

[NoMoreMrNiceGuy]

The economy was not any worse or better. The dotcom craze had nothing to do Bill. How was it better for you? Obviously you are not a business owner, higher taxation on cpital gains does not help the economy.
I made $10 an hour in the 90's, I make over $50 an hour now. We had a 5 Trillion dollar deficit from in the late 90's that increased throughout the Clinton administration. I remember the military pay and retirement cuts in the 90's.

[EKAN]

" I don't see how this is fair as management must agree to all union contracts, it's not like union members held guns to their heads and forced them to pay those wages."

Devin, let's be clear about this. The auto companies are based in a non-right-to-work state and, as such, the unions have a monopoly on the work performed inside the auto factories. This labor monopoly can then use extortion to drive their pay and benefits up. Do you seriously think that any manager would pay a high-school dropout more than a degreed engineer based on market forces?

Their pay is based on a politically enforced monopoly, not market forces. If it were based on market forces, why would they care so much about losing their jobs when they could easily shop thier skills elsewhere for the same pay?

[EKAN]

" I don't see how this is fair as management must agree to all union contracts, it's not like union members held guns to their heads and forced them to pay those wages."

Devin, let's be clear about this. The auto companies are based in a non-right-to-work state and, as such, the unions have a monopoly on the work performed inside the auto factories. This labor monopoly can then use extortion to drive their pay and benefits up. Do you seriously think that any manager would pay a high-school dropout more than a degreed engineer based on market forces?

Their pay is based on a politically enforced monopoly, not market forces. If it were based on market forces, why would they care so much about losing their jobs when they could easily shop thier skills elsewhere for the same pay?

[Not Your Average Joe]

I remember a great economy in the 1990s.

[Not Your Average Joe]

I remember a great economy in the 1990s.

[NoMoreMrNiceGuy]

Proponents often credit trade unions with leading the labor movement in the early 20th century, which generally sought to end child labor practices, improve worker safety, increase wages for both union workers, raise the entire society's standard of living,reduce the hours in a work week, provide public education for children and bring of other benefits to working class families.

Advocates of unions claim that the higher wages that unions bring come at the expense of profits. However, as Milton Friedman pointed out, profits aren't high enough. 80% of national income is wages, and only about 6% is profits after tax, providing very little room for higher wages, even if profits could be totally used up. Moreover, profits are invested leading to an increase in capital: which raises the value of labour, increasing wages. If profits were totally removed, this source of wage increase would be removed.

Instead of harming profits, unions increase the wages of about 10 to 15% of workers by about 10 to 15% by reducing the wages of the other 85 to 90% of workers by about 4%.[As the price of labour increases, the demand for it will decrease. Unions targets of industry protectionism and limits on immigration also have this effect, benefiting unionised workers at the cost of those without union membership.

The effect of union activities to influence pricing is potentially very harnmful, making the market system ineffective. By raising the price of labour, above the market rate deadweight loss is created. Additional non-monetary benefits exacibate the problem.

Cost-push Inflation
“ There can be little doubt that union activities lead to continuous and progressive inflation. ”

F. A. Hayek, the Constitution of Liberty
By causing wage increases above the market rate, unions increase the cost to buisnesses, causing them to raise their prices, leading to a general increase in the price level. Austrian economists such as Robert P. Murphy, however, dispute this, arguing that the increase in the cost of labour simply means that less of other goods can be bought. He writes:

If unions succeed in wage hikes, and employers raise the prices they charge consumers to maintain their own profit margins, and the supply of money remains the same, then something else has to "give." Either the prices of goods and services in nonunion sectors have to fall and offset the union sector hikes, or people's cash balances need to fall, in terms of their purchasing power.

Trade unions have been accused of benefiting the insider workers, those having secure jobs, at the cost of the outsider workers, consumers of the goods or services produced, and the shareholders of the unionized business. Those who are likely to be disadvantaged most from unionization are the unemployed, those at risk of unemployment or workers who are unable to get the job they want in a particular line of work.

Dr. Charles Baird of California State University East Bay argues that as labor is a commodity, and unions essentially operate by centralizing labor, forming a monopoly on the commodity. This monopoly on labor has the same negative effects as any other monopoly, of reducing the amount sold (in this case, this means increasing unemployment) raising the price in the short term and decreasing efficiency.

In the United States, the outsourcing of labor to Asia, Latin America, and Africa has been partially driven by increasing costs of union partnership, which gives other countries a comparative advantage in labor, making it more efficient to perform labor-intensive work there.

Milton Friedman, Nobel Prize winning economist and advocate of laissez-faire capitalism points out that unionization produces higher wages (for the union members) at the expense of fewer jobs, and that, if some industries are unionized while others are not, wages will decline in non-unionized industries.

In the late nineteenth century, unions were sometimes regarded as a form of legalized conspiracy and extortion. American racketeering statutes still include an exemption for union activity.

Unions are sometimes accused of holding society to ransom by taking strike actions that result in the disruption of public services.

Unions have also been known to prevent skilled, hard-working individuals who refuse to engage in corruption from working by means of slander, blacklisting, and ostracism under the guise of "following protocol".

[devin]

I agree with you Marc about this current strike; I could only shake my head as I listened to one of the union reps explain what they were striking over. On the other hand, you fault the unions for excessive labor expenses. I don't see how this is fair as management must agree to all union contracts, it's not like union members held guns to their heads and forced them to pay those wages. If companies are free to hire full-time workers at minimum wage, and that's fair because it's what the market allows, then why is it unfair for unions to negotiate whatever wages the market will bear?

I agree that unions seem to be going too far in their demands sometimes. However, that's what many people have always said about unions, even when all they wanted was things like working conditions where workers weren't getting killed on a regular basis. America already has the longest work weeks and least vacation time of any developed country. I can't help but think the slow demise of unions has at least something to do with this.

One last comment, I just read an article about how well Oklahoma City is weathering the current economy--one of the five fastest growing economies in the country right now according to the article I saw in YahooFinance. Seems they're doing alright without that GM plant, after all.

[Marctnts]

Let's be clear on this one. According to union leadership, the #1 issue in this strike is the modification of "work rules", specifically those existing rules which state that the company must fill jobs on the basis of seniority. What evil thing does GM want to do? They want the ability to fill certain jobs, usually the more complex ones, with a union employee they deem capable of handling it, not the most senior man on the totem pole. To translate this into "non-union" terms, the company wants the right to promote the hardest working or most qualified employee, not the one who has punched-in the longest. Sounds absolutely horrible, doesn't it?

Unions served a purpose when minimum wage laws did not exist and men worked for a dollar a day. The situation has drastically changed, and yet business still finds itself handcuffed to a set of rules which give unions excessive abilities to demand unjust things without a just path of recourse. There is nothing wrong with the right to collectively bargian, what's wrong is the inability of the company to do anything about it.

Unions may historically be resonsible for greater safety and a 40-hour workweek, but what recently can they be credited with? How about things like crippling debt due to excessive labor expenses, hostile labor-managment relations, and a sytem that rewards mediocrity while failing to reward hard work and ingenuity. Companies like GM, which are suffocating under excessive labor and benifit costs, will soon be forced into drastic measures in an attempt to survive. What will that fat salary and pension package be worth when your employer no longer exists?

If you want to strike against what you feel are unjust proposals, fine, but the company should have the right to replace you when you don't show up for work with someone who will. One tip though, when your compensation rises above the level that the market determines your productivity is worth (which it has), be careful about walking out. There will always be someone willing to work for a balanced wage.

[Rogue]

Yeah boy, that is why GM and Ford are seeing all "those record profit", and "hiring more and more folks", thanks to the good old unions.......