About Unions
Unions Are Obsolete and Unnecessary
Once upon a time, American workers were at the complete and utter mercy of their employers. There was no OSHA making sure that people were provided safe working environments. There was no Fair Housing and Employment Departments to make sure people were treated fairly and were not taken advantage of by their employers. People worked long hours for little pay in poor conditions. Children worked like adults. Benefits were not common and life was pretty rough. Unemployment was high enough that people tolerated gross injustices for fear of loosing their precious income. The only power workers had was to organize themselves into groups and collectively demand concessions from their employers and threaten to stop working until these demands were met.
Now we have government agencies, private activist groups, armies of lawyers and the knowledge that there is always a better job somewhere else out there. Frankly, we don't need unions to make enough money to avoid starvation or to have reasonably safe working conditions. One disgruntled employee can file a complaint with a number of government agencies and within weeks, the employer is investigated and often forced to change their policy and pay damages for any wrong they have done. This is probably why unions are finding it increasingly difficult to obtain new members.
Unions often are little better than extortionists
If I say "Give me what I want or I will financially ruin you" I am committing the crime of extortion. If however, I get together with a group of co-workers and say the same thing to a business, I am working man fighting an evil thieving corporation that exploits society. How does this make sense? Teachers periodically deny children education until the government gives them more money and benefits. Teamsters and longshoremen shut down shipping and state economies by refusing to work until their employers bow to their wills. Right now, as I type, grocery store clerks are picketing in front of countless CA grocery stores demanding free health care and free contributions to their retirement savings plans. (In reality, the union leaders are often more greedy than the companies they attack.) In all of these cases, the unions claim to be fighting the good fight against greedy corporations. While these battles take place, those who disagree with the unions are harassed if they attempt to patronize or work for the "evil" entity that they are attacking. Society as a whole suffers from decreased availability of goods and services, economic damages and loss of tax revenue.
There is No Free Lunch
Think about how our supply and demand economy works when purchasing goods. If 1000 bicycles are in a store and only 100 people really want to buy them, the store selling the bicycles is faced with a choice: Lower the price on the remaining 900 bicycles until people start buying them or go out of business. Inversely, if the 1000 bicycles cost so little money that everyone can easily afford them they will sell very quickly and everyone who wants one won't necessarily get one. Faced with this opportunity, the store will raise the price of the bicycle until it is high enough that it maximizes their profit yet just low enough that they can sell all of them.
This analogy applies to all products that aren't controlled by government legislation. Thus, milk, eggs, toilet paper and just about every other kind of product will get more expensive when the average, typical consumer has more money to spend. Thus, even if employers could print money for free and pay their employees as much as they wanted or as much as minimum wage nuts desire, it would result in an increased cost of goods over time.
Here's where it gets even more interesting:
Take that same example of a bicycle shop. Let's say the employer pays four employees $10/hr and standard healthcare benefits that requires the employees to pay $40 per month to use. Imagine this is what it costs to run the shop:$83,200 yr in wages for 4 employees, who make $10hr
$16,640 yr in minimal employee benefits (based on 20% of wages)
$36,000 yr in rent for the shop
$100,000 yr in bicycles and parts to sell to people
$14,160 yr in electricity, insurance, office supplies, misc. expenses
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$250,000 Total Yearly ExpensesThis means that if the shop keep wants to break even, they must sell the bicycles for $250 ($250,000 / 1000 bicycles = $250/bike)
This doesn't even leave the store owner with any profit, which means the owner got absolutely nothing out of the deal. No money to pay for his home, feed his kids and clothe his family. For the sake of simplicity, I will ignore this and assume the shop keeper just wants to cover his expenses and break even.
One day the employees tell the employer that they have formed a union. They tell the employer that he must promise to pay them $12 an hour and sign an agreement to never hire any other employees unless they are also union members. Finally, they tell the employer that they don't want to pay any health care costs and that he must pay all of this too. The employer stupidly agrees and this is how it affects the cost of running the shop:
$99,840 yr in wages for 4 employees, who make $12hr
$19,968 yr in minimal employee benefits (based on 20% of wages)
$1,920 yr in increased health care benefits
$36,000 yr in rent for the shop
$100,000 yr in bicycles and parts to sell to people
$14,160 yr in electricity, insurance, office supplies, misc. expenses
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$271,888 Total Yearly ExpensesUnder these conditions, the shopkeeper must charge $271.89 per bicycle in order to break even. This means it now will cost the consumer $21.89 more to buy the same bicycle.
I have demonstrated two different ways increased wages raise the price of goods. If we achieve a high minimum wage or if all workers in this country formed unions and demanded higher wages, the cost of goods would increase dramatically, meaning that the people who receive these higher wages would still have the same lifestyle as their higher wages would be needed to pay for the more expensive goods. People who do not receive increased wages, such as retired people, disabled, unemployed, etc., would get no more money yet suddenly would have to pay more for everything and would face serious financial difficulties. In order to save these poor souls from disaster, the government would demand more taxes to hand out in welfare and social security programs, so that these unemployed can continue to survive. This tax money would come from the workers, which means they would have less money to spend on the expensive goods, and would then complain that they needed higher wages to keep up with the cost of living.
Consequences of Increased Wages/Costs
The above examples left out a very important detail: We are in a global economy and no matter what wages we force American companies to pay, the rest of the world can do as they like. Thus, although our bicycles now cost $21.89 more to make, foreign bicycles did not go up in price. Americans then start buying foreign bicycles because they are cheaper. American companies now MUST find a way to reduce their costs to compete with foreign sellers or they will go out of business. In order to avoid bankruptcy, companies must escape the burden of higher wages and increased benefits by sending jobs to foreign countries that pay less money to their workers. Companies also have a financial incentive to hire illegal aliens. Illegal aliens are willing to work for less than the standard rate, usually don't receive benefits and since they are illegal, employers do not pay social security and workers compensation for them. Suddenly, the American union workers who thought they had a great deal are now unemployed. They join the ranks of people who have no money to pay for expensive goods and now need tax supported government benefits.
Moral of The Story
Don't aid and abet unions. Cross picket lines, tell strikers what you think and vote against minimum wage laws. If you can help it, don't join a union. It is time people drop their false sense of entitlement and realize that we are capitalist and not a socialist society. Value is set by supply and demand and should not be arbitrarily fixed via extortion and legislation. If you want more money, get more skills, work harder and become more valuable to employers. If you are good at what you do and your employer isn't paying you what you are worth, look elsewhere. Our economic climate is such that companies throughout the country cannot easily afford to give out money and benefits for the sheer joy of it. If you are unable to give your employer more output, they have little ability to give you more compensation. My company just eliminated nearly half of its work force because of financial difficulties. I'm thankful to have a job at all. Enter "Massive Layoff" into a search engine and look at how many companies are getting rid of employees.
A Special Message for CA Grocery Store Workers who Failed with Their Strike
Did you ever think of what could happen if you voted to strike? Did it not occur to you that sooner or later the stores would get tired of being bullied by your union? The very fact that so many people rushed to take the jobs you walked away from proves you didn't have it that bad. For those of you in California, haven't you heard that WalMart® is planning to build 30 grocery stores in this state soon? What do you think they pay their employees? Television news has repeatedly stated they sell their groceries for up to 30% less than competitors and they pay little more than minimum wage and virtually no benefits. Is now really the best time to deny your stores revenue so that this new low paying competitor can wipe them out? How many months will you have to work to make up for the lost wages of the past several months? Do you really feel that at this moment in time your very highly compensated union leaders are putting your dues to good use? Have you noticed how angry many of your customers are getting at your attempt to interfere with their food purchases?
Do you have any idea how rapidly the cost of health care in this country is increasing? Employers AND employees are both paying HUNDREDS of dollars more per person per year to provide and receive healthcare benefits. Prescription co-pays, deductibles and insurance premiums have increased nationwide at an unprecedented rate for the last few years. Why should I pay more for my food so you can be immune to this?
It's time for you to accept reality and either appreciate what you've got or find other employment. Stop racing to your financial doom like lemmings, stand up to your union leadership and tell them to accept what the companies have offered you. Or better yet, get a non-union job where you can get compensated based on your skills and production rather than based on what a socialist group can extort from employers for all employees, regardless of merit.
