I have a love and hate relationship with business and unions.
I am not a historian, but this is what I do remember from my business and history classes. Capitalism, Free Market, Free Enterprise. A great concept, go to market and let the market decide which product wins and which one looses.
Why did unions develop? From my recollection it was because our Capitalistic and Free Market Businesses were working their workers almost to death and paying them hardly enough money to survive all the mean while the management lived big.
The unions got laws passed regarding child labor laws, pay, overtime, reasonable hours and working conditions. Our Capitalists were greedy and many of them were willing to work anyone for as little as possible and it did not matter how dangerous or how many hours – working conditions and so on. The unions did something that one might believe the capitalists should of done, but they chose not to.
Now as purist of decision making, I believe if we were a nation of character, we the people would of stuck together and not gone to work for these companies until they provided what the unions eded up getting for them. But, there was always someone who was willing to do the job, try the job and thus, the business owners did not have to change. It was not until the unions organized and got the backing of the majority of the works. Now, the unions were good because they prevented people from working for a company unless they were a member of the union. Thus, they controlled the people that would do the job for nothing.
Today, I think the unions do have a place, but I am not sure where. Because of a world economy, we have products on our shelves which are manufactured much more cheaply and even with higher quality than the ones we can create in the United States.
In these other countries, many of them are going through an industrial revolution, which they are using labor as a way to gain market share. They may also have less fixed asset overhead such as cost of running the business outside labor, taxes and maybe even subsidies from their government.
The world auto industry was creaming us and for the most part still is. Back in the 70’s the US owened their own market, in fact I believe GM had over 50% of the car market in the US, now they teeter around 16-18%. And they did not loose it to the other American manufactures, they lost it to competition from Asia primarily.
We are in somewhat of an equalized world. The reason being now is there are so many other manufactures out there that in order for one to attract and maintain a worker they have to be competitive with the other, which means reasonable wages and benefits. Or does it?
We shop by price and quality. And of course the best quality for the price. Now, if we are paying American workers 29.00 an hour and they are paying there worker 15.00 plus there cost of doing the manufacturing, such as electric, gas, real estate, taxes are cheaper too, then how do we compete with them on price/ quality?
Unions want to keep wages up, which is good for them. But, if the American manufactures keep loosing market share to the Asian manufactures because they cannot compete on the price / quality scale, then the American manufacture starts shedding costs, that is in the name of workers. So, we have less people making more money. And if this keeps happening, then the Am. Manuf. cannot sell enough cars to be prifitable, which did happen.
So, we ask the unions to back down wages and benefits, they don’t want to because the fear it will dwindle back to the days of the industrial revolution and the labor market will again go to the lowest bidder.
So there has to be concession on both sides. If we want to be competitive, we have to flex in order to be. But what prevents competitors that could possibly come to the US to compete that is supported by a government that in a sense has no cost, they simply want our business, how do we answer this?
Well, we have tarrifs, tarrifs are put on products to rise the cost of ownership so this is preventable. Great, but look what the Asian manufactures did, they build plants in American and are paying their workers less, getting the same good quality as their plans in asia and taking up market share.
In writing this thought out loud, I am wondering if we compared retail market to retail market how the US Manufactures of cars are really doing. So many cars are bought by businesses. From Government cars, to farms, heavy equipment and so on. What about the cars I drive, how are we doing just on the retail market side. If it was not for the commercial side, we may have gon bankrupt a long time ago. I will try and check into this.
Personally, I think the labor folks have to take the hit. We have to try and compete. At the same time, we could sustain ourselves if we bought American, but we won’t because we don’t have to. Why would I want to buy a car that has a life span shorter and higher maintenance, lower gas mile and higher cost to run when I can buy one that is much better for equal or less cost? Isn’t that why we shop a wal-mark?
I think Unions have to take the hit too. I think it the Michigan law passed for the right to work is a good one. I worked for a company that was union, I did not like it. that means they can represent me for things I do not support, such as political candidates.
I agree there is some fear here, what if, but right now we have to compete, we need to keep the jobs here, we need to keep folks employed and we need to continue to support the economy or if the economy fails, then everyone fails.