Unions...The Death of Industry in the US

I wanted to take a moment today during my lunch break and write a little about something that has been bothering me for quite a while. However, I have been sitting here for the last few minutes thinking about how to begin this entry. It is not that I am short on words at the moment. In fact, it is the exact opposite. I have so many thoughts going through my head, I'm not sure how to translate them to words.

Over the last few weeks, many stories have been flowing through the media about the government bailing out the "Big 3" auto-makers in the US. One of the biggest arguments focused on how the unionized companies couldn't compete with the non-unionized because of labor costs.

This made me think for a moment. Is organized labor going to kill industry in the US?

I then began to think a little bit more close to home. I work in the Freight industry. This industry has many big players. Some are big names that pretty much everybody will know (like FedEx Freight and UPS Freight) and others are players that may (or may not) be big players in the industry but people aren't as familiar with them (i.e. Yellow, Roadway, etc...). YRC (Yellow/Roadway) is a unionized company that is struggling because the teamsters demand to be paid high wages and strong pension benefits in an economy that cannot support such benefits.

Then you have the non-unionized players like FedEx Freight. Many union supporters in this company would suggest that employees would be better off if they were union. The funny thing is, the employees may or may not get a better deal if they were unionized. However, one thing is for sure, the company won't last long once it becomes unionized. Companies can't be profitable if they are forced to conform to antiquated union rules (see YRC).

Since 1983, union membership in the US has been on a steady decline. Is this coincidence? Is this because employers aren't following the guidelines of the National Labor Relations Act? Is this because the NLRA doesn't go far enough in protecting the employee's right to organize? I don't think so. I think it is because labor law has been steadily replacing the need for unions. Employees are starting to realize that unions, for the most part, are no longer needed.

Unions on the other hand, would have you think that membership decline is because of the underhanded actions of the evil employers. To remedy this, they introduced and are trying to push through the ill-named Employee Free Choice Act. Now, I am not going to go through this act, but needless to say, it will make it extremely unfair for employers and anti-union employees. It will not even give a voice to those employees that are logical and don't want a union.

Unions are killing US companies. Those companies that aren't killed, are going elsewhere to do business. People, we do not live in a vacuum. If companies don't like the rules, regulations, or restrictions, they will go somewhere else. Don't be stupid and restrict business in some attempt to get back at the "man." You don't "deserve" to be paid high wages or receive a big pension. You deserve what you are worth. If somebody else can do your job better for cheaper, then you aren't worth what you think.

If you want to make more money, get an education or set yourself apart so that you are truly not replaceable.

Bailouts or Capitalism, People Are Lazy

I know that for many people, capitalism is a bad word. However, for better of for worse, one of the fundamental ideals in our society is that if you work hard, you will get rewarded for working hard. Now it seems that because it is getting a little hard out there, everybody wants a free buck.

First it started with greedy mortgage investment firms wanting a bailout because they made risky investments. When those investments went south, they wanted "mom and dad" to make everything better. I was against this from the beginning. However, I had no idea where it would lead to.

Now the Big 3 car makers want some money. Give me a break. You make a product that can't be sold for more than it takes to make it, and you want the taxpayer to give you money so you can keep doing it? AHHHH!!! This is soooo frustrating. Let them go into bankruptcy. Then, if/when they emerge from bankruptcy, they will be able to better compete because of reorganization.

Bottom line, we need to allow capitalism to work. You can't say we live in a capitalist society, then bailout companies that can't survive for whatever reason. There is a reason that communist and socialist societies tend to fail at some point. At some point, people realize that they can receive the same amount from society if they do nothing as they do when they work really hard. There is NO incentive to working hard if there is reward tied to hard work. By and large, most people would rather slack off than work 60-80 hours a week.

Recession...Really???

In a capitalist society (or semi-capitalist in the case of US), the strength of the economy is largely based on consumer confidence. If the consumers of the nation think the economy is on its way up, then they tend to spend more. Conversely, when the consumers of the nation think the economy is on the way to the crapper, consumers will cut spending.

It was recently announced that the United States has been in a recession since December of 2007. Immediately following this news, the stock markets took a big hit.

While I don't doubt the existence of an economic down turn, I think the impact of that downturn is a whole lot greater than it really needed to be. Every time there is some bad news, everybody talks about it like it is the next great depression. This in turn causes more bad news which causes consumer confidence to go south, which causes causes more bad news. It is a big vicious cycle.

I don't have the answer. Obviously we can't keep the media from reporting on the current state of affairs. However, I would think that some "brilliant" economist could come up with some answer.

This brings me to my next point. Somewhat related but mostly not related at all. The crappy economy has hit California's State Budget. Now, politicians want to raise taxes to cover the revenue shortfalls. Are they mad??? You don't raise taxes during a recessionary period. That will cause taxpayers to have less disposable income and cause them to spend less. This will, in turn, cause more tax shortfalls and worsen the recession. In the immortal words of Will Farrel, "I feel like I am taking crazy pills." I realize that cutting state programs is not the most popular idea. However, it has to be done. First and easiest is to comply with Federal requirements for welfare. This will force many people off of the welfare roles.

It is possible to balance the budget without raising taxes (and definitely without more borrowing). It will just take some liberals to realize that you can't solve every person's problems by throwing money at it. Sometimes, you have to let them fall on their face before they realize that the concrete is hard.

There are many ideas. The politicians just need to treat California more like a business. If revenues decrease, you cut spending. You don't go to your customers and force them to pay more than they are able. This will just cause them to spend less. Then you are just going to end up where you started.