*Note, this post is t l. So I've bolded a couple sentences to facilitate the skim reader, not because I'm trying to shout or because I think anyone isn't reading previous points I've posted.
I hesitated to post at all to this thread. I pretty well understand that most JREF posters will have pretty much knee jerk reactions to this kind of story and we will favor one side of the other regardless of the discussion.
I thought what Skeptic Ginger posted here was relevant to this:
I think most people that have her view of the world think something very similar to this. In the context of this thread she was implying that being on the side of the "little guy" was being on the side of the unions in this dispute. This belief is so deeply ingrained that I think it has become essentially an unfalsifiable view. People either because of their self interest or just through constant repetition of the mantra about how important unions are to the worker come to believe to a near certainty that their pro-union ideas favor the "little guy".
They held on to this belief even while they watched Detroit crumbling into the ground as the substantially above market wages drove car manufacturing out of the city. Of course, they come up with all sorts of rationalizations for the disaster that their ideas impose on people, "little guy" or not but they never confront the idea that government special interest union legislation is an economically unsound approach to helping the "little guy".
First,
I was talking about who was in the rich and who was in the poor categories when one talks about things that benefit one group or the other, not which political side people were on. Clearly if income made one a Progressive or Conservative, we wouldn't be having this discussion. The majority would vote in their own best interest instead of voting in the best interest of the people who have the money to control the message and influence the legislators who do get elected. Looking back, I wasn't very clear how I said that.
Moving on, let's see if you are as willing to take a serious look at your own beliefs as you hope we might be in looking at yours.
Your claim, the unions are the root of financial failure of any company, assumes an underlying premise I doubt you could support. You are claiming the
workers are incompetent when it comes to understanding the marketplace. You are claiming they are too stupid or poorly informed as to the effect of their wages on the company.
I give most workers more credit than you apparently give them. Typically when workers see the company's profits increase and their wages stagnant, workers want more compensation. If employees see the company is losing money, especially when they see a company is threatened with going out of business, you'll see employees agreeing to serious wage and benefit cuts. WORKERS ARE NOT STUPID.
Of course the stockholders and company owners feel they own the company and they should reap as much profit as the market will bear. They often don't see the employees as people, only as a cost of goods sold with unions being a thorn in the company's side.
But workers OWN THEIR SKILLS as well.
So what about labor monopolies? We don't want suppliers colluding to increase the price of goods sold. Most people recognize monopolies inhibit the good market force of competition. (A few people argue monopolies die on their own, I don't agree, but that's another issue.) Labor monopolies don't work the same as supplier monopolies and you among other people are making the mistake of believing they do.
Workers can only take a share of profits. You imagine they take more than what's in the profit pool driving the company out of business. But that means they'd lose their jobs. You believe workers are too stupid to recognize that. I know for a fact union workers are not stupid. And if you look at the history of unions such as Boeing workers (I use this example because I've seen all their disputes and strikes in the news for the last 30 years) they ask for more when company profits go up, they agree to less when company sales are down.
Supplier monopolies are also subject to charging what the market will bear. Where the problem arises is when suppliers are selling the public things the public cannot forego. Now the monopoly of the Telcom and the oil giant
can severely impact people's lives, not just their consumer choices.
By the same token,
employers with only a few exceptions, have an unequal advantage over workers. That is not a guess or a philosophy, history is full of examples of what fate workers can expect without unions to level the playing field.
So what about your claim that the troubled car manufacturers provides an example where unions demanding higher wages resulted in the cost of labor making the cost of American brand cars uncompetitive. Doesn't history also support that conclusion? Well it's a cherry picked or oversimplified view of the problem.
You have to broaden your view to
include other compounding variables. Look, for example, at the contribution to the outcome of American workers increasingly competing with global workers. If one took your premise (I don't, but say I did) then autoworkers would have to accept lower and lower wages until they earned as little as workers in India and China. Considering that the cost of living differs, auto workers would be in abject poverty. That's not a tenable outcome. Nor is it fair to blame unions for an outcome without considering the part inevitable globalization is contributing to a company becoming uncompetitive.
We cannot stop the world from becoming more and more interconnected. We have to change with the world.
Second,
you may be blaming the employees for poor management decisions. The quality of the cars had a lot to do with my choice to buy foreign 'brand' cars, not the cost. Now that Toyota has been troubled by quality issues, American brands have a chance to take a bigger market share.
Then there is the management decision to push big gas guzzlers and go for that target market. Gas prices went up, people wanted smaller cars. That had nothing to do with price or union wages. As soon as gas prices went down, out came the gas guzzling promos all over again. Management decisions to resist fuel efficiency standards, IMO, is poor long term management.
Safety is another issue. In crash test scores American brands have trailed foreign car brands like Subaru and Volvo. I'm not an expert in the auto market. Clearly Americans have an ongoing love affair with big cars. But for myself as a car consumer, I want a smaller, fuel efficient, safe car. And I was buying a new car every couple years. I didn't buy a new one as usual 2 years ago because the 2009 Subaru Outback was re-designed into a big SUV. So I'm hanging on to my old one because there isn't a better choice on the market. I may be in a small market share,
in the short term. I doubt I'm part of a small market in the long term.
The bottom line, management decisions and inevitable globalization are two variables you left out of your blame-union-wages conclusion. In addition, you have an unsupportable underlying premise in your conclusion that workers demands are divorced from the economic reality.
In the case of Wisconsin and in the case of a lot of other states and municipalities unions have driven wages and benefits substantially above market.
This 'fact' is contradicted in many sources.
This is, of course, in the short term good for the "little guys" that the pro-union folks focus on, the people in the unions that have the jobs. But do they ever give a thought to the fact that the high wages come at the expense of taking more money out of the economy thereby reducing the wages and benefits for the people that compete in the free market? Do they give much thought to the problem that the driving force for getting out of a recession is the reduction in prices and wages leads to more hiring, spending and eventually increased economic efficiencies and are a net benefit to everybody.
Oh the irony. More than a few very good economists agree with me, we will set the recovery back if we slow government investment in infrastructure and services, and in exchange all we get is lower taxes on the top 2% of the income earners.
Supposedly these upper income earners create jobs with that income. No they don't. I own a small business. If I paid
wages to employees, that comes out of GROSS income. Income tax is based on NET income. Employee wages, unless you think the rich are going to fire their maids and gardeners, do not come out of the income which is taxed.
...I don't think they do. They focus on the fact that the "little people" they think about are being harmed by their reduction in wages and benefits without thinking for a minute about the millions of other people that are making similar sacrifices imposed on them by the need to face economic realities.
Whether it is a myth or Ford really believed it,
the idea paying workers enough to afford what you produce has a basis in truth. If you want to slow the economy, squeeze the workers to the point they can no longer consume.
While the conservative claim is, it is taxes that are squeezing the workers, high taxes and government deficits didn't set the recession off, mortgage asset fraud by the banks did. One can believe the consumers getting their tax refunds will stimulate the economy. That's the philosophy the government is inefficient when it spends. History tells us public investment in infrastructure and services creates jobs. Tax breaks for the top income earners do not.
So
unless you want to increase the tax on top income brackets and give other people more tax refunds to spend, giving people a little more money while cutting government funded jobs can only get you one step forward one step back.
You blame workers' wages and benefits for government deficits. I blame tax cuts for the wealthy, who don't need the cuts and aren't creating jobs with the money as the Repub Party line claims. There are corporations flush with cash. Where are the jobs?
Creating the demon government deficit, demon government size, the demon spending and the demon union wages and pensions is a very unfortunate and dangerous campaign platform.
Look at your Repub legislators just recently refusing to stop massive oil company subsidies. Why isn't that the demon? Why is a 4% increase in the tax only on wages greater than $200,000 not the demon? Why isn't government investment in services and infrastructure seen as the economic stimulus history shows us it is?
This kind of stimulus is not the same as the bank bailouts.
IMO, the reason people believe in the wrong demons is because the false demons were created in a campaign to get Repubs back in office. Yes, that is an oversimplified answer. I have a longer one, but the post is already tl, dr.
IMy guess, is that this post will not change one person's mind about all this.
I'm going to be more optimistic. I think you are a reasonable, skilled critical thinker. I'm going to guess you might just consider a few variables you've been discounting. But I'll take that back if your reply just repeats your view without addressing what I've brought up.
One of the deeply held views of standard Democratic Party ideology is that markets can be manipulated without unintended consequences.
It's very unfortunate you believe this
straw man. Belief in these stereotypes is a barrier to having a debate that gets to the real issues.
Of course, one could say the same about my statement on the Repub created demons they have based their campaign propaganda messages on. I'm willing to debate the real issues if they are presented with supporting evidence or examples. So for example, if you can show that it is realistic for union workers to compete with international labor costs, I'd be interested in how they should do that.
If you have evidence it is the norm for unions to ignore economic realities when negotiating, I'd be interested in the specific evidence. I have lots of examples of unions taking pay and benefit cuts. (coughWisconsincough)
A little off topic but worth answering:
Rents are too high, pass a law that limits them.
Was Nixon a Democrat?
I'm pretty sure the Democratic Party approach would be to let the landlords charge what the market will bear and subsidize renters who would be homeless if they were not given assistance. In local markets like NYC, I don't know the specifics. Democrats are no less concerned about controlled rents resulting in less housing being available than Repubs are. Clearly the problem is very complex.
You are wrong if you believe Progressive Democrats don't appreciate the market forces. That seems to be a theme in your post.
A related Democratic Party approach would also include regulating developers to include lower cost housing when building big developments. Yes, it's social engineering. I'm sure there are many people who don't like it. But there are many people who also see the benefit in not creating economically segregated neighborhoods. And there are more people who agree that city and urban planning is a legitimate function of local government, even if they don't agree with all the specifics. When a developer builds it impacts roads and schools outside of the development. It impacts the property values of people who have property adjacent to the development and so on.
We live in a community. Like it or not, we don't live in isolation from each other. Democrats, at least Progressive Democrats, recognize that little bit of reality. It's a straw man, however, to go from there to, Democrats are all socialists and communists.
Farm prices are too low, pass a law that sets them artificially high. Wages are too low, pass a law that sets them above market. All these strategies are always done in the name of the "little guy" and the people that fight for them just are not open to the idea that their cherished notions have unintended consequences that outweigh the benefits.
It's not the little guy that created the system of farm subsidies. It was the family farmer competing with the large corporate farmer that started it. But it is the large corporate farmer that now sustains it and benefits from it.
