Labor Unions: bane of the common man

[SeleucusNicator]

First off, let me congratulate Wal-Mart for continued success in their crusade against Unions.

Second, I will make an argument about the usefulness, or lack thereof, of labor unions in first-world countries, particularly the United States.

I would argue that labor unions in the United States have outlived their usefulness, and now constitute much more of a problem rather than a solution. By continuing to demand unreasonable wages and benefits, they are in effect increasing the cost of doing business in the United States and are contributing greatly to the problems of outsourcing and unemployment. The United States already cannot compete with the likes of China, India, or even Mexico when it comes to labor costs, and the more Unions manage to raise those costs in the United States, the more incentive there is for companies to get out of the United States.

Not only would I argue that unions actually contribute to unemployment, but I would also argue that they are problematic for the United States in other ways. A nation with high unemployment will suffer economically, and these sufferings are going to be reflected not only in economic strength, which is a measure of power, but also in other measures of power, such as military strength and capability, which often need economic power as a sort of fuel.

That said, I would not really oppose unions were it not for the fact that there are currently laws related to them that, among other things, say what you cannot do to them if you are an employer. If employers were able to fire labor union members on sight, you would see a lot fewer unions out there, and they certainly would not be able to force the great concessions that they do now. Realize, of course, that this would not make labor unions obsolete; large enough groups of skilled enough workers will always be able to force concessions, simply because there is no alternative source of labor.

 

[Archer 007]

This is one of those occasions where we do not agree. Unless you would agree that Walmart would be broken up for its unfair business practices?

 

[WillJ]

Why are you worried about companies moving outward, causing unemployment? Are you worried that these unemployed Americans will grow poor? Well as soon as they do, labor costs will go down, will they not?

 

[SeleucusNicator]

I am by no means a fan of large corporations; don't get me wrong. My faults with large corporations can be found in the other topic dealing with them.

I was just using Wal-Mart as an example; it has been a source of good news for me in recent weeks.

 

[SeleucusNicator]

Why are you worried about companies moving outward, causing unemployment?

Unemployment is not particularly healthy for any state. It follows that the state should therefore eliminate things that cause unemployment.

Protection of labor unions is one of those things.

 

[Yom]

Unemployment is not particularly healthy for any state. It follows that the state should therefore eliminate things that cause unemployment.

Protection of labor unions is one of those things.

It's no secret that labor unions raise the unemployment. A national minimum wage has the same effect. However, both have positive effects. A low unemployment rate is good, but I would prefer a slightly higher unemployment rate but better standards of living for those who get work.

 

[SeleucusNicator]

It's no secret that labor unions raise the unemployment. A national minimum wage has the same effect. However, both have positive effects. A low unemployment rate is good, but I would prefer a slightly higher unemployment rate but better standards of living for those who get work.

Certainly; I don't think the United States should become a nation of sweatshops.

It could be argued that right now we are in an imbalance, but on the other side, which I would argue is equally undesirable.

 

[WillJ]

Unemployment is not particularly healthy for any state. It follows that the state should therefore eliminate things that cause unemployment.

Protection of labor unions is one of those things.

I don't think that adequately countered my point, so I'll repeat and ellaborate. Here's what I imagine will happen with these gosh-darned unions that you mention:

1. Unions demand outrageous wages.
2. The corporations don't like these wages and notice that they can pay their workers less in Indonesia.
3. The corporations move to Indonesia.
4. The workers of America grow desperate for work. They begin to accept wages that aren't so outrageous.
5. The corporations move back, and/or new corporations spring up to take care of American workers.
6. The wonderful cycle of life continues.

If this doesn't make any sense (and it very well might not, I'm no expert after all), please explain why.

 

[SeleucusNicator]

I don't think that adequately countered my point, so I'll repeat and ellaborate. Here's what I imagine will happen with these gosh-darned unions that you mention:

1. Unions demand outrageous wages.
2. The corporations don't like these wages and notice that they can pay their workers less in Indonesia.
3. The corporations move to Indonesia.
4. The workers of America grow desperate for work. They begin to accept wages that aren't so outrageous.
5. The corporations move back, and/or new corporations spring up to take care of American workers.
6. The wonderful cycle of life continues.

If this doesn't make any sense (and it very well might not, I'm no expert after all), please explain why.

That's far too idealistic a view.

I imagine the costs of coming back to America would still be high, perhaps so high as to be prohibitive. What you want to do is kill the impetus for outsourcing before it happens, because once it does, you have very small chances to reverse it.

 

[Archer 007]

Most of the problem is caused now by minimum wage laws. I dont favor repealing them, but I do favor stop raising them.

 

[SeleucusNicator]

Most of the problem is caused now by minimum wage laws. I dont favor repealing them, but I do favor stop raising them.

Yes; eventually, the mimimum wage will become so small in terms of how much $5 is that it will become irrelevant, a vestige of the past, sort of like the clause in the constitution that says you can't sue for less than $20.

 

[Yom]

Certainly; I don't think the United States should become a nation of sweatshops.

It could be argued that right now we are in an imbalance, but on the other side, which I would argue is equally undesirable.

The problem with your argument (outlined in the first post) is that you assume that outsourcing is bad. From an economist's point of view, there's nothing wrong with it. Only when you take into consideration politics does it begin to seem harmful to the economy. In reality, jobs are not "lost" from trade (and outsourcing); rather, they are transfered. Granted, they are no longer American jobs, but that is not the point. Those jobs overseas translate into cheaper goods for American consumers. As all members of society are consumers, it benefits everyone. Preventing outsourcing is essentially forcing corporations to produce goods at higher prices than necessary.

If the jobs were being outsourced to Russia, then would you still be against it?

 

[SeleucusNicator]

The problem with your argument (outlined in the first post) is that you assume that outsourcing is bad. From an economist's point of view, there's nothing wrong with it. Only when you take into consideration politics does it begin to seem harmful to the economy. In reality, jobs are not "lost" from trade (and outsourcing); rather, they are transfered. Granted, they are no longer American jobs, but that is not the point. Those jobs overseas translate into cheaper goods for American consumers. As all members of society are consumers, it benefits everyone. Preventing outsourcing is essentially forcing corporations to produce goods at higher prices than necessary.

The only way jobs can be "transfered" via outsourcing is if corporations and American consumers allocate saved money into activity that produces new jobs. I believe that the failure of Reaganomics shows that you cannot assume that money saved will always be allocated to such ends; some money will always be lost to the environment or to other, non-job creating activities.

If the jobs were being outsourced to Russia, then would you still be against it?

Good comeback and good question.

 

[sysyphus]

The wealth gap is consistenly widening thoughout the Western world. WHo's going to stop that if not unions?

 

[SeleucusNicator]

The wealth gap is consistenly widening thoughout the Western world. WHo's going to stop that if not unions?

1) Why is this a problem?

2) I have always been a fan of taxing the rich. I hear it often results in the rich getting poorer.

 

[WillJ]

That's far too idealistic a view.

I imagine the costs of coming back to America would still be high, perhaps so high as to be prohibitive. What you want to do is kill the impetus for outsourcing before it happens, because once it does, you have very small chances to reverse it.

Is there a reason new entrepreneurs couldn't open businesses in America? And this is assuming you're right in the first place that unions are too stupid to be aware of their self-interest.

Basically are you just advocating protectionism? Well then I'll have to agree with Yom on the grounds that America as a whole benefits from globalization. Other countries also benefit, which is bad if you see them as enemies, which I imagine you do but I don't.

 

[SeleucusNicator]

And this is assuming you're right in the first place that unions are too stupid to be aware of their self-interest.

I think the empirical evidence will show that.

 

[sysyphus]

1) Why is this a problem?

Because an increased walth gap leads to greater insecurity and lower social stability, which in turn lead to a weakened nation.

2) I have always been a fan of taxing the rich. I hear it often results in the rich getting poorer.

Taxing the rich doesn't necessarily mean a better standard of living for the working class. That requires better wages.

Higher wages also does not mean companies leaving countries like the USA. There are other factors including economic stability, political stability, infrastrucure and the skill level of the workforce. These other countries you fear that are stealing America's jobs can't even come close to competing with your country.

 

[sysyphus]

I think the empirical evidence will show that.

Such as?

My union, like many, is well aware of the common interest we share with our company, and work with the company to further our common goals. Where our interests differ, then we defend them.

And contrary to the image you may like to draw up, we don't "force" or "demand" our compensation, we negotiate for it.

 

[Yom]

The only way jobs can be "transfered" via outsourcing is if corporations and American consumers allocate saved money into activity that produces new jobs. I believe that the failure of Reaganomics shows that you cannot assume that money saved will always be allocated to such ends; some money will always be lost to the environment or to other, non-job creating activities.

I'm not a fan of Reaganomics myself. While I cannot assert that such saved money will directly result in new jobs, it will nevertheless help the economy grow, which in turn will result in new jobs. Obviously, every dollar saved will not result in one dollar going towards job production.

Good comeback and good question.

I'm actually interested as to how you would feel in such a situation.

Going back to the politics of the matter, perhaps a better solution would be to get China to be more friendly towards the U.S. rather than the E.U. Whereas the E.U. is considering measures to drop bans on selling China weapons, China's relations with the U.S. are still lukewarm. If the U.S. government were to back down on the issue of Taiwan and took a more relaxed stance towards China, then who knows what will result.