UAW - Game Over!

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GM is losing money hand over fist... If you really care about the American labor force, maybe it's time to create something profitable and offer millions of the high-paying jobs you believe everyone is entitled to.

I'd applaud the effort.

It cuts both ways. Give businesses unfair advantages in the labor market and we don't have a level playing field. Give unskilled workers an unfair advantages--government-sanctioned monopolies that drive out other workers and artificially boost wages for the members of the club--and it creates an unfair playing field skewed the other way.

Too bad you can't stop others from acting competitively and handing GM its lunch--without adopting the 1970s Eastern European model of economic management.

This is a relic story, though. Unions outside the public sector--which doesn't have to worry about competition and can be inefficient without scrutiny--have been dead for more than 20 years. People caught onto the fact that they cost them jobs a long time ago.

The sad thing is that some people will never understand that well-intentioned as their ideas are, they create bigger problems for everyone with some of the things they advocate. I'll never understand why they refuse to learn from experience, instead of denying and rewriting history.

 

jg, absolutely agree with the first part of your post. And in a way, agree with the second part of your post.

I've never said anywhere that it isn't sensible for workers to try to negotiate the best terms they can for their employment. We all do that, don't we? You don't take a $25,000 salary if you can negotiate a $30,000 salary.

Unions are predicated on collective bargaining for higher wages. In order to bargain effectively, though, you need some sort of leverage... or you need some kind of muscle (in the case of American unions, government protection) giving you that leverage artificially. Without leverage, you can try to negotiate that $30,000 salary all you want, but you are not going to get it if the market really dictates that what you do is worth $25,000.

Most unions have represented largely unskilled workforces that had little leverage. Unions may have made a difference in working conditions a long time ago, but past a certain point they had nothing to bargain with without some kind of unfair advantage giving them leverage. Or else a company like GM would walk outside and hire one of the thousands of non-union members eager for a job and willing to work for a lower market-based wage (this GM story is all about wages and the higher operating expenses GM has been saddled with for decades and what it has done to the company, which has had to deal with competition not saddled by those higher costs).

Unions managed to boost wages by creating leverage in two ways: 1) creating a monopoly that doesn't allow a competitive labor marketplace (limiting the number of jobs, shutting out workers who can't get into the "club," who are hurt by the below-market wages they earn to balance the inflated wages the union garners... and eventually making operating costs so high for the companies they worked for that they got their clocks cleaned by non-unionized companies), and 2) getting government protection that allows you to keep that monopoly.

I don't blame people for trying to boost their salaries using that tact. It's just that there were zillions of people like me decades ago, and in the subsequent decades, pointing out how short-sighted that was and what the ultimate consequences would be. It's destroyed whole companies that couldn't compete and it's hurt workers in the aggregate--both in the short-term and long-term--because while boosting wages of a select few, it did it at the expense of workers outside the union (very often minorities) and it ultimately cost the union workers their higher-paying jobs when their jobs were exported elsewhere.

What boggles me, is that we have seen it all play out exactly as you would predict, and there are STILL people don't get it. What remnants survive of unions now try to protect their monopoly by fighting free trade that might erode their power even further. I agree with the first part of your post. In order to allow equilibrium, you don't artificially block trade or competition giving capital OR labor an unfair advantage.