Unions

[philunderwood]

Killing The Goose

By Thomas Sowell

www.JewishWorldReview.com |

Killing the goose that lays the golden egg is one of those old fairy tales for children which has a heavy message that a lot of adults should listen to. The labor unions which have driven the makers of Twinkies into bankruptcy, potentially destroying 18,500 jobs, could have learned a lot from that old children's fairy tale.

Many people think of labor unions as organizations to benefit workers, and think of employers who are opposed to unions as just people who don't want to pay their employees more money. But some employers have made it a point to pay their employees more than the union wages, just to keep them from joining a union.

Why would they do that, if it is just a question of not wanting to pay union wages? The Twinkies bankruptcy is a classic example of costs created by labor unions that are not confined to paychecks.

The work rules imposed in union contracts required the company that makes Twinkies, which also makes Wonder Bread, to deliver these two products to stores in separate trucks. Moreover, truck drivers were not allowed to load either of these products into their trucks. And the people who did load Twinkies into trucks were not allowed to load Wonder Bread, and vice versa.

All of this was obviously intended to create more jobs for the unions' members. But the needless additional costs that these make-work rules created ended up driving the company into bankruptcy, which can cost 18,500 jobs. The union is killing the goose that laid the golden egg.

Not only are there reasons for employers to pay their workers enough to keep them from joining unions, there are reasons why workers in the private sector have increasingly voted against joining unions. They have seen unions driving jobs away to non-union competitors at home or driving them overseas, whether with costly work rules or in other ways.

The old-time legendary labor leader John L. Lewis called so many strikes in the coal mines that many people switched to using oil instead, because they couldn't depend on coal deliveries. A professor of labor economics at the University of Chicago called John L. Lewis "the world's greatest oil salesman."

There is no question that Lewis' United Mine Workers Union raised the pay and other benefits for coal miners. But the higher costs of producing coal not only led many consumers to switch to oil, these costs also led coal companies to substitute machinery for labor, reducing the number of miners.

By the 1960s, many coal-mining towns were almost ghost towns. But few people connected the dots back to the glory years of John L. Lewis. The United Mine Workers Union did not kill the goose that laid the golden eggs, but it created a situation where fewer of those golden eggs reached the miners.

It was much the same story in the automobile industry and the steel industry, where large pensions and costly work rules drove up the prices of finished products and drove down the number of jobs. There is a reason why there was a major decline in the proportion of private sector employees who joined unions. It was not just the number of union workers who ended up losing their jobs. Other workers saw the handwriting on the wall and refused to join unions.

There is also a reason why labor unions are flourishing among people who work for government. No matter how much these public sector unions drive up costs, government agencies do not go out of business. They simply go back to the taxpayers for more money.

Consumers in the private sector have the option of buying products and services from competing, non-union companies— from Toyota instead of General Motors, for example, even though most Toyotas sold in America are made in America. Consumers of other products can buy things made in non-union factories overseas.

But government agencies are monopolies. You cannot get your Social Security checks from anywhere except the Social Security Administration or your driver's license from anywhere but the DMV.

Is it surprising that government employees have seen their pay go up, even during the downturn, and their pensions rise to levels undreamed of in the private sector? None of this will kill the goose that lays the golden egg, so long as there are both current taxpayers and future taxpayers to pay off debts passed on to them.

[mikekerstetter]

www.portal.state.pa.us/portal/server.pt/community/perc_home/2513

I just got done reading some testimony at a recent PERC hearing (Public Employee Retirement Commission). It has some facts in it that I've been saying all along.... that the biggest effect on the shortfall is that the Governments failed to put in their share. The report I got is in .pdf format so I can't post it here and I can't cut and paste it either. There is some testimony listed, but the links aren't working right.

[philunderwood]

www.qando.net/?tag=unions

So why are private unions in decline and government unions still strong?

Published November 28, 2012. | By Bruce McQuain.


If you haven’t figured it out yet, it has to do with competition in one area and none in the other.

How so? James Taranto sums it up pretty nicely on the private union side of things:


The trouble for private-sector unions is that the global economy vastly increases the supply of labor, diminishing their bargaining power. If it’s too expensive to run a factory in the U.S., companies can simply move their facilities to other countries.

Or, labor isn’t worth what it once was thanks to globalization. We call that “economic reality”. Back in the good old days for unions, they were getting wonderful pensions, outrageous benefits and $20 bucks an hour for a guy to open and close a blast furnace door. Now they can make and ship steel across the Pacific Ocean and truck it to its destination in the US cheaper than we can make it. Thus the shift of the industry from here.

The bonus for these companies? No labor negotiation hassles, lower wages to pay (comparatively) and the option to move again if the costs again become onerous (and the steel industry has done that a couple of times).

However labor hasn’t yet allowed that lesson to sink in – well, at least unions haven’t.

Taranto points to a very recent example of the point as well as some union members who “get it”:


Last May, after contract negotiations stalled, nearly 800 IAM-represented employees walked off the job at Caterpillar’s hydraulic-parts factory. After a few weeks, more than 100 returned to work, fed up over the lack of progress in the talks and pinched by the union’s $150-a-week strike pay, some workers say.


When an agreement was reached in mid-August, the contract provided less than the one before it: The IAM gave in to an hourly pay freeze for veteran employees, an end to pensions, a doubling of health care premiums and a one-time ratification bonus of $3,100 instead of $5,000 under the previously proposed pact. The terms were almost identical to a Cat contract ratified by the UAW [United Auto Workers] a year earlier.


Doug Oberhelman, chairman and chief executive of the Peoria-based heavy-equipment maker, acknowledges that the givebacks hurt employees. But, in a recent speech in Chicago, he explained that management compared compensation to factory hands across Illinois and around the world and concluded that to be “market competitive,” Caterpillar had to insist on the concessions.

100 of the members of the International Association of Machinists apparently saw the handwriting on the wall, figured their family came first and returned to work.

So much for solidarity.

Hostess is another example of out of touch private sector unions. When the Teamster’s union confronted Hostess over its claims it couldn’t afford their demands and giving into them would cause the company to have to liquidate, the Teamsters examined Hostess’s books and agreed. They backed off. Not the Baker’s union though. Apparently their union chief never bothered to examine the books or negotiate. He just advised his union to strike. The result is well known and, by the way, the Teamsters were livid – not at Hostess, but at the Baker’s union.

Meanwhile a few facts have surfaced about the Baker’s union boss that should make members of unions everywhere recognize at least this guy for what he is:


BCTGM boss Frank Hurt encouraged the strike (knowing it could shut down the company).

As BCTGM membership has fallen 30% since 2000, Hurt’s salary has gone up nearly 45% to over $260,000

The bakery industry union pension fund is less than 50% funded ($10 billion in liabilities), yet bakery union bosses have their own fully-funded (100%) pension plan — funded by members.

Bakery union bosses Hurt and the Sec.-Treasurer both have their kids on union payroll.

We often hear complaints about CEOs who get pay raises while their companies go down the tubes. I wonder if the left is willing to apply the same criticism to a guy who raises his own pay 45% while losing 30% of the membership and funds his own pension 100% while shorting the union member’s fund by over 50%?

Unions also tend to play at stupid games that simply frustrate people trying to run a business and make a profit. In this case it is two different unions fighting about who gets to plug in and unplug refrigerated containers.


A federal judge has been forced to intervene in a dispute between two unions over who is in charge of plugging and unplugging refrigerated shipping containers at the Port of Portland.

Oregon district court judge Michael H. Simon ordered the International Longshore and Warehouse Union (ILWU) to abandon its efforts to snatch the responsibility of manning the outlets from the rival International Brotherhood of Electrical Workers (IBEW).

“[The ruling] simply means that the same people who have been doing the work since 1974 will continue to do it,” said IBEW spokesman Norman Malbin.

Absurd.

The ILWU’s reaction? It said the contract with the electrical workers represented a “lost work opportunity” for members. Of course it was a job they’d never had nor had when they tried to take it over. But these are the sorts of things private unions are reduced too these days. Stealing each other’s jobs.

As we’ve covered here, the great Wal-Mart walkout wasn’t a spontaneous event or even an event demanded by the workers of Wal-Mart. In fact, as mentioned, only 50 of 1.4 million Wal-Mart workers even walked out.

It was a union event using the front group “OUR Wal-Mart (Organization United for Respect at Wal-Mart)”, it was all set up by the United Food and Commercial Worker’s Union. And if flopped, hideously. In fact, the real reason the UFCWU tried to make this happen is because their stores are uncompetitive with Wal-Mart grocery stores. If you can drive up salaries and benefits, you’ll eventually drive up prices. You? They couldn’t care less about you, Mr. and Ms. Consumer.

Those examples all deal with private unions. Competition and the cost of labor are driving the reality of today’s wages. Unions can’t deliver on the big promises anymore. Many have not done a good job of managing their members benefits either. Smart companies make it clear that they will willingly provide good wages and benefits without unions. Tack on tough economic times and the need for a union becomes even less apparent. At one point paying union dues was considered to be a positive thing. Workers got something for the dues that they felt was greater than the cost of the dues. Today? More and more are seeing those same dues as a liability.

Finally, government unions. They remain strong because there is no competition. And, their bosses are in bed with them, negotiating with your money, not theirs. Government’s don’t have to make a profit to stay in business, do they?

But perhaps even their act is wearing a little thin. Take the LAX protests by the SEIU:


At LAX, although a large crowd of union members came out to protester, CBS LA notes that ”the majority of them [the protesters] were not airport workers.” They were other members of the SEIU.

So troubled were the airport workers by the Thanksgiving Day protest, the Associated Press reports that according to a press release from former union members, “a majority had signed petitions to leave the union and called upon the SEIU to cancel the demonstration.” One former union member Fred McNeill admitted to CBS LA that it had gotten “personal” for the leadership of the SEIU, “And that’s just not right.”

Another woman, who CBS LA interviewed through her car window at the airport, said she she was a union member (she did not specify which union she belonged to), but even she didn’t agree with the way the union was blocking traffic on one of the busiest travel days of the year.

Unions on both sides have become short-sighted and petulant because their golden age is demonstrably dead. Economic reality and a changing world have dealt them severe blows and instead of looking at ways to shore up their base and maintain their presence, they’re reduced to throwing tantrums and thumbing their noses at the very people they need to suppor their cause.

Government unions can still get away with that. Private unions can’t. And the only reason that difference is made is because competition and economic reality rule one side and monopoly and government protection rule the other.

~McQ

[mikekerstetter]

www.sungazette.com/page/blogs.detail/display/1079/Hostess-bankruptcy--The-latest-example-of-contempt-for-hard-work.html

Hostess bankruptcy: The latest example of contempt for hard work
The Intersection
November 26, 2012 - Mike Maneval


The manufacturer of Twinkies and Ding Dongs is folding, with competing companies mulling offers to buy the branding and names of the defunct employer's products after a preliminary approval on Nov. 21 for the business to liquidate. And one segment of America's political establishment isn't wasting the opportunity to yet again demonize working Americans, without regard for the consequences of their anti-labor philosophy.
A headline at the National Review's leading blog, the Corner, instructed readers to "blame unions for the Hostess bankruptcy." The website of conservative columnist Michelle Malkin bemoaned the jobs lost before saying "union bosses ... will now move on to 'help' the next batch of union workers elsewhere." The conservative website HotAir.com calls the union's behavior "insane" while approvingly citing an analysis by the Weekly Standard's Mark Hemingway, who says the pay rates for the unionized workers were "overly generous" and calls the bankruptcy "a classic example of workers not being served well by their union leaders." The anonymous commenters at Hot Air go even further, calling the workforce that produced the snack cakes central to the company existing in the first place "parasites."

The vitriolic reactions to the failures of Hostess are important, for at least two reasons: They are contradicted by the facts and conjured by fantasy, and they are illustrative of modern conservatism's deep contempt for working Americans.

As Michael Hiltzik reported in the Los Angeles Times, the unionized employees already had accepted wage cuts, benefit cuts, and layoffs shifting greater workloads on to a smaller workforce, totaling $110 million a year in value for five years. Additionally, as this most recent collapse approached, the company withheld $8 million a month in promised pension funding from workers. All, Hiltzik reports, while pay rates in the administrative or "managerial" sectors of the company were doubled or more.

But the baseless attacks on working Americans being well compensated hardly is isolated to one chain of snack cake bakeries. It's the same attitude that led many to seize the troubles two years ago at General Motors and Chrysler as a chance to scapegoat unionized assembly-line workers. It's the same attitude driving calls to cut public-sector pay and benefits for firefighters, public school teachers, prison guards and others, locally and across the state and nation. It's the same mentality that saw the Gulf of Mexico oil spill as a golden opportunity to weaken protections for cargo ship workers and that consistently opposes minimum wage increases.

And it's the same mentality responsible for at least three decades of stagnant earnings for too many Americans as prices for essential goods and services climb, and for today's unemployment, as those working Americans have less disposable income to purchase the goods and services that once kept the now jobless employed.

[philunderwood]

www.qando.net/?tag=right-to-work

How does one oppose a “right to work?”

Published December 10, 2012. | By Bruce McQuain.


Well, if you’re wondering, just take a gander at what is happening in Michigan.

The Democrats will be the first to tell you “elections have consequences”, usually followed by ” … and Obama won”. Well the same can be said of state level elections and in the case of MI, the GOP won. In fact, they won everything at the state level, enough to pass “right to work” legislation which essentially says one doesn’t have to join a union to work.

The unions, of course, pitched a tantrum.

And, now that he’s solved all the nation’s problems, balanced the budget, reduced the deficit and has long-term debt on a downward trend, President Obama has weighed in on this situation:


“President Obama has long opposed so-called ‘right to work’ laws and he continues to oppose them now,” said White House spokesman Matt Lehrich. “The president believes our economy is stronger when workers get good wages and good benefits, and he opposes attempts to roll back their rights. Michigan — and its workers’ role in the revival of the US automobile industry -– is a prime example of how unions have helped build a strong middle class and a strong American economy.”

The union’s “role in the revival of the US automobile industry”?!

Is he kidding? It is the unions which essentially helped make two of the big three financially unsustainable. Remember, GM and Chrysler went bankrupt and had to be bailed out. And the federal government screwed with the bankruptcy proceedings and handed a large portion of GM to the union while stiffing bond holders.

That’s the “prime example” in reality.

And the president’s “belief” that our “economy is stronger when workers get good wages and good benefits” doesn’t mean those things only happen with unions. Apparently, in right-to-work states, unions continue to lose out when they try to organize because workers are getting both good wage and benefits and seem happy with their situation. What they don’t see is a benefit to unionizing – i.e. paying dues to a union which will be unlikely to do any better.

Finally, how is allowing someone to choose whether or not to join a union “rolling back rights?”

I knew Obama wouldn’t be able to stay out of state level politics, given his base and their demands. The Democrats have become the party of unions. Private unions are dying off and they’re getting pretty desperate. First WI and now MI? My goodness, can NY and IL be far behind? How dare the GOP give workers the right to chose not to join a union as a prerequisite to working. For a party that brags about being the party of choice, other than one particular choice they champion, the Democrats are pretty much opposed to all others.

Unions are the buggy whip of the latest evolution in labor. Improved communications, a global economy and the realization that businesses have options as well have made unions an anachronism. Reality and economics say labor is a commodity – a factor of production. What labor is increasingly realizing is that the jobs they have can be exported or, given today’s technology, mechanized when costs exceed their worth. Wages are leveling out and in today’s economy, the demands that were once commonly made by unions are no longer economically feasible. But additionally, bad companies can no longer exist in the dark of a communications vacuum and pay and treat their workers poorly without there being repercussions. Competition drives wages and benefits as well or better than unions ever did.

It’s a different world. Unions are 19th century holdovers.

Time they shuffled off into Obsolete-land where they belong.

~McQ