Commentary - 05/06/2008

Unions Can't Keep Up Anymore

Awhile back, Tim from South Carolina wrote:
I have a friend who often sends me articles such as this on the destructive practices of corporations on the American economy. However, I notice none of the stories on companies moving operations out of the US lays any blame on Unions and their destructive practices and policies. It would be refreshing to see an article like that once in a while. Things that move corporations to look elsewhere for their labor force, such as Unions defending unproductive workers; adversarial attitudes towards companies; excessive pay & benefits demands. The list goes on and on as to the ways Unions have crippled companies' efforts to keep jobs in America. Wouldn't it be far easier logistically for businesses to keep their labor force local?

Makes me wonder if some of these stories are backed by Unions as part of their anti-corporation agenda. Or maybe it's just a pro-Union/anti-management agenda by journalists. Whichever it is, I rarely see any responsibility laid on Unions in any of these articles.

And no, I don't work for management of a corporation, no do any of my immediate family or friends, and no I haven't been hassled by Union thugs in my lifetime, nor have any family members or friends. I just find it curious that there's never any mention of the other side of the coin. It's always the fault of management.

I've thought about this for awhile, and then in yesterday's New York Times, this article G.M. Workers Strike Malibu Plant in Kansas was posted, saying that:
About 3,650 workers at American Axle factories in Michigan and New York went on strike Feb. 26, saying the company’s demands that wages be cut nearly in half were too harsh. The company says it cannot afford to continue paying its workers about $28 an hour while rivals like the Dana Corporation, which also has a U.A.W.-represented work force, pay about $14 for similar work.
Most folks don't understand inflation, as it just creeps up on just about everyone. It easy to keep thinking that you're making more and more, but things just cost more and more, too. Folks start realizing that their labor just doesn't trade as much today and it did before. People think $28 per hour is outrageous for labor, but that only buys 7 gallons of gasoline to get to and from work. When I was 21 in 1968, the average wage was $3.50 per hour, but that bought 10 gallons of gasoline at 34 cents per gallon. So just to be even, the laborer would have to make $34.00 per hour to have the same buying power as in 1968.

I was fortunate to buy a top-of-the-line 1968 Firebird 400 for $3900. Being in computers, I was making $5.00 per hour, $200 per week, about $10,000 per year. Today $28 per hour is $1120 per week, or about $56,000 per year. Buying a top of the line Pontiac today is about $40,000 or more. The difference is that in 1968, my car was 40% of my year's wages. Today at $28/hour, it's about 72%. My point is that even with union wages, they haven't kept up.

What's most interesting is 1968 was also when the Professional Air Traffic Controllers Organization was founded. Thirteen short years later, then President Reagan made an example of PATCO, even though they had helped elect him to office. Knowing that replacements had been secretly trained, over 11 thousand controllers lost their jobs. Reagan was also the first to sell out our country by starting to turn it into a debtor nation, but that's another story.

Back to management and the union laborer. Let's evaluate the average executive's pay. Some folks say it's 400 times the plant workers' pay, when it used to be 40 times. That's where the middle class loses out. Gas was 34 cents then and $3.40 now. Ten times. The union workers' pay is NOT 10 times what he was paid then, especially when now being reduced to $14 per hour. But the executives' pay is MORE than 10 times. It's obvious that it had to come out of the workers' share.

That's why the unions exist. Yes, sometimes they demanded perhaps too much, but mainly it was to counterbalance executive pay scales. Management would and is trying to get back folks back to slave wages. They claim to want to be competitive. If so, why did they take the workers' pension fund money, invest it overseas, then shave their workers' pay down to almost nothing. If the workers can't buy the products they manufacture, who can?

Labor has been treated so badly recently that nurses have had to form unions to fight back against the hospital owners. The main culprit in this battle is HCA. You can thank Senator Frist for these problems. He got very rich off consolidating Hospital Corporation of America. Just like another organization named Corrections Corporation of America. Fancy names, huh?

Unions are usually formed by the workers in order to protect themselves from abusive management. A recent example was at the local hospital where the nursing staff had been abused by HCA practices. In 1997, I saw first hand what the nurses were up against when my father became too ill to walk. HCA had just taken over the hospital and cut the staff. Several times my father had to wait up to 45 minutes to be helped off the toilet and back into bed. It's not the nurse's fault. They were spread way too thin. However, they did brag about the Ramada Chef they hired so that the food would be more appealing.

My father belonged to the auto union back in the early days of the 1940s. He wasn't happy about it, but if you didn't show up because of a bout with the flu or something, you no longer had a job, period. There was always someone ready to take your place, not even considering that the same thing would happen to them next.

Having lived in Detroit, I also saw the other side, such as Tim from South Carolina correctly described above. I saw laziness and pampering like I'd never seen before. Even at my little non-union software development business there, certain employees would at times come in late with no warning, execuse nor apology, but always leave exactly at 5pm. What blew me away was that they'd set the alarm on their wristwatch to leave right at 5pm, no matter when they came to work.

Perhaps the pendulum had swung to the other extreme. Jimmy Hoffa would certainly be a good example of that. Especially using his members's money to build Las Vegas with 3rd, 4th and 5th mortgages on hotels and casinos. Just like some of the hedge funds we read about today.

The main reason for attacking corporations these days is foreign ownership. That's always been the case, here in America, but never so burdensome to the workers, or the white-collar staff. My own business collapsed from the consolidation of my customers into ever larger corporations, usually publicly owned, with major holders from foreign soil.

Plantations are back. Everyone had a job on the plantation, but few had liberty.
Perhaps this is the reason: Sometimes The Dragon Wins

© 2008 by Edward Ulysses Cate
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