Let's Stop this MessAPolitico!

Monday, February 24, 2014

Why Do We Have Unions?

Nobody seems to remember the real reason that workers unionized in America.  In the early days of the industrial revolution, workers had very poor pay and working conditions.  The number of deaths and injuries to workers was extremely high.  Machinery wasn't guarded.  People worked very long hours for low pay.  Children were taken out of school and put to work in these conditions.  There were none of the benefits that we take for granted today.  It's not hard to see why the workers organized and stood together to demand fair treatment and safe working conditions.

Now unions seem to be thought of differently.  My impression is that workers unionize so they can squeeze every penny available out of their employer.  The union workers pay dues out of every paycheck.  The unions then take the money and donate it to the Democratic party.  Today, the unions are more like an extension of the Democratic party than representatives of the workers.  Corporations that earn a profit are vilified by the Democrats in office.  I was doing work recently at a company with a union, and the workers were reading some union propaganda about Walmart profits.  I heard them talking about the low pay for Walmart employees, while the corporation earns "outrageous" profits.  Somehow Walmart owes the employees above average pay.  Karl Marx certainly would agree with that sentiment.  Return on investment or return on total capital employed are not even considered by the Marxists.  Of course, there would be no jobs without capital investment, and their wouldn't be any capital investment without return on that investment.

In the 1950's, 1960's, and 1970's, most of the things we bought in the United States were made in the USA.  My personal career is involved with equipment sold to industrial customers primarily.  My employers and their competitor's were all US companies until the 1990's.  Things started gradually changing through the 1990's with the Japanese companies first.  Today, there are plenty of Japanese, European, and Korean companies in the business, and most of the products we deal with are manufactured in China or Mexico.

Why do I bring this up?  Well, the unions had the upper hand in American industry until about 20 years ago.  Today manufacturers will build new plants filled with state-of-the-art equipment in low cost countries around the world.  Alternatively, they will purchase finished product or components from other manufacturers in these same countries.  With this environment, anytime a union drives costs up with higher wages, lower productivity, higher costs of benefits, or anything else, those jobs are likely to move offshore.  Consequently, union jobs are at a very low level in the private sector of the USA.

Of course, the unions donate a lot of money to the Democrats, and they are paid back with increases in the minimum wage or regulations forcing employers to provide more benefits.  You might ask why the unions care about minimum wage when their workers all make significantly more than minimum wage.  Did you know that some union contracts are indexed against minimum wage?  That's right; the workers make minimum wage plus an offset.  If the minimum wage was raised by $2.85/hour, those union members would also get a $2.85/hour raise.  Well these folks will get the raise unless their jobs are moved out of the country or replaced with automation.

It is interesting that private sector unions are losing membership at a rapid rate, whereas public sector unions are growing.  Why do we need public sector unions?  Do government employees really need the protections of a union from unfair treatment?  Are their jobs unsafe?  They make more than the average private sector employee.  Do government employees have to worry about losing their jobs?  We've seen that the government overreach is creating an employment explosion in government, and performance quality doesn't seem to be much of a factor.

So the minimum wage and the unions are driving up the costs of manufacturing in the USA.  Pretty soon the MessAPolitico will have driven every job offshore that can be moved out of the country.  Then, they can blame the "greedy" corporate profiteers and the Republicans that "support" them.  The losers are the American workers.  If you want to end unemployment in the USA, get rid of the minimum wage and make all states "right to work."  Don't be fooled by the slick talking MessAPolitico.  Keep your job, and keep America working.

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