Tuesday, December 11, 2012

Quality of Work or Irrelevance of Wages

When Karl Marx was writing "Das Kapital" he was living at the end of the Industrial Revolution. Industrialization had taken individual craftsmen out of the marketplace. Handmade products had been replaced by machine made mass production. The result was that thousands of individual craftsmen were replaced by dozens of machine monitors. The impact on the workplace was that factory owners could control wages and simply say "we won't pay you any more, stand aside someone else wants your job."

In short order, factory owners found that they could demand outrageous work hours and effort at low pay. Organization of workers into unions to protect the lower classes and ensure reasonable working conditions and appropriate wage levels was proper.

Something occurred over the last 120 years. The marketplace developed a middle-class. Society was no longer an us-versus- them environment. Competition among manufacturers resulted in a necessity for providing benefits, retirement and competitive wages. Today we find successful companies recognizing the fact that a trained and experienced worker is more valuable than a low-wage replacement. Keeping quality in your labor force is more important than repeatedly hiring new workers for the lowest possible wage.

It is expected that a quality company will provide healthcare, dental care, educational benefits, retirement, profit sharing, and opportunity to move up in the company hierarchy. These benefits do not have to be demanded by a high cost union, that is generally interested in dues which can contribute to political activity and pressure on the marketplace. Successful companies compete for labor without union pressure.

Strangely enough the private enterprise marketplace with owners versus workers is no longer the main function of unions. Go back and review the fact that unions were established to protect helpless workers against oppressive business owners. Now notice that most unions in America are public-sector unions. Why is that noteworthy? Because the public sector doesn't make profit! There is no motivation or even evidence that government tries to benefit at the bottom line by impression of government workers. Government serves the people. Workers in government do so to serve themselves. There is no reason for government to pay government workers a noncompetitive wage. Workers can choose to work for government at the wages offered or not to work for government. If the wage offered by government is satisfactory, government will provide the services. If the wage offered is below the market, workers will not be available and government will have to adjust their level of compensation.

It doesn't take long to examine public-sector unions to confirm the fact that their wages are irrelevant to market factors, and their dues are used to control elections and legislator doors so as to continually milk the tax base for the benefit of the workers who were not at all motivated to succeed or perform at adequate levels.

Michigan Fights Right to Work

How is Michigan doing with regard to union labor? You may recall it was General Motors and Chrysler that entered bankruptcy and required government bailout to survive. The assertion was that these were "the American car industry" but they were only two unionized companies and arguably well less than the major manufacturers of cars in America. Nonunion companies such as Toyota, Honda, Mercedes, Volkswagen, Nissan, and dozens of others are American automobile producers paying very adequate wages in a highly competitive marketplace. Along the way they are profitable and very successful on behalf of their workers.

And if we look at the question of unionized teachers, we find literally the majority of states not requiring teacher participation in unions such as the National Education Association and the American Federation of Teachers.

Democracy in America is a legislative process conducted by elected representatives. The legislature of the state of Michigan, Wisconsin, Ohio, and other states represents the majority of the people across the state. Screaming union workers in the rotunda of the state capital do not represent the majority, and we have to remember that when the legislature acts, it is reflecting the will of the people.

Now, maybe we should pass that message on to the President of the United States who apparently believes that the unions take precedence over the majority of the people.


an Donalbane said...

In August 1981 we had a President who knew how to deal with unions.

Anonymous said...

NZ, like the US, has witnessed the displacement of skilled jobs to other countries and/or those with lower skillsets. Now we have this...


I had to give Six a heads up on this, he could make a lot of money.

FlyingBarrister said...

The Left lost its efforts to gain total control of he economy through the labor movement. But it is more that compensating for it with entitlement programs and environmentalism, specifically global warming.

The legislation does not force one worker to drop the union or cease paying dues. It simply provides a choice. The union bosses and Dims know how dangerous the choice is and how much money they will lose. All of a sudden, workers have the choice to give themselves a pay raise by simply not belonging and paying union dues. Then the largesse is no longer there.

Indiana has made advancements under Daniel. Now MI is pushing through reforms on labor and taxes, and it will improve if the economy does not collapse.