Comments on: What the Ohio vote means http://blogs.reuters.com/great-debate/2011/11/11/what-the-ohio-vote-means/ Thu, 21 Jul 2016 07:57:19 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: jacklecou http://blogs.reuters.com/great-debate/2011/11/11/what-the-ohio-vote-means/#comment-40143 Mon, 05 Dec 2011 20:01:29 +0000 http://blogs.reuters.com/great-debate/?p=11041#comment-40143 >>”When a company with union labor goes out of business, you attribute this as evidence of “management failure” or “luck”.
Hear this. It doesn’t MATTER! It’s history! Management is “on the stree” and the union hall has permanantly lost ALL associated jobs FOREVER! Lose-lose! Guess who winds up alone on the stage grinning like Charlie Sheen saying “Winning” when everyone is losing?”

This is utterly bizarre. I honestly don’t know the answer to this one. Who is it that you think ends up grinning?

And yes, it does matter: you are trying to make a case against unions by claiming that “greedy” unionized employees are somehow — and for some unknown reason — driving otherwise healthy and well-run firms out of business left and right. The fact is that firms actually fail because of either mistakes their managers make (including negotiating unsustainable deals with suppliers) or circumstances beyond their control (luck – e.g., changing market conditions making them obsolete or unable to compete). Or both. I’d be astonished if you had figures showing that unionized firms failed more frequently than non-union ones (controlling for similar size, industry, etc.).

>>”An educated well paid middle class is an excellent goal for a developing country, but your point is not clear because such people are not typically union members…they are management (with the exception of government unions, which hold a special place of outrage in my mind).”

Facts are not your friends, are they?

I mean, seriously? You think the middle class is made up of either managers or government workers? Bizarre.

Historically, the US middle class was made up of large numbers of blue collar — mostly unionized — workers. People in trades or with good factory jobs. That’s in decline, obviously, but in addition to managers, the middles class still has a lot of non-management white collar workers and professionals (writers, engineers, analysts, assistants, accountants, salesmen, etc.)

And that’s true of developing countries as well, as far as I know.

Note also that:

(1) Managers are not, and should not ever be, a large enough segment of the workforce to produce anything like a broad based middle class – I mean, if your country’s workforce is running 40%, 50%, 70% management, you have serious problems (I suppose it depends on how you define it, but if you’re defining practically everyone as a manager, the distinction is meaningless).

(2) As we’ve already covered, government workers, including union represented ones, typically make less than private sector workers in comparable jobs. So to whatever extent government workers are in the middle class, it is because those government functions require high-skill workers meriting middle-class wages. If you could somehow effectively privatize some or all of those functions, average wages would, if anything, *increase*. (Note also that the extent to which unionized government workers are in the middle class is quite limited. For example, the average worker represented by AFSCME makes only about $20k/yr.)

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By: jacklecou http://blogs.reuters.com/great-debate/2011/11/11/what-the-ohio-vote-means/#comment-40142 Mon, 05 Dec 2011 19:28:40 +0000 http://blogs.reuters.com/great-debate/?p=11041#comment-40142 >>”You then attempt to use haggling as evidencing your “surplus”. Doesn’t work..my point was that whenever the presence of a union raises a restaurant’s costs it is no different from increases in such costs if a restaurant “goes organic”.”

I think you may be missing the point. (As well as apparently continuing to fail in your grasp of the economics term “surplus”. Really, check wikipedia or an intro textbook. It’s basic stuff.)

The point is not that labor costs do not rise.

The point is that labor costs are just one input of many. And you do not seem to object when other inputs negotiate or set prices – e.g., if the cost of electricity goes up, and cuts into a companies profit margins or forces it out of business, I’m guessing you wouldn’t characterize that as an unconsionable assault on their freedomz.

And yet, if workers try to negotiate and level the playing field a bit, it suddenly is. It’s deeply weird. (I mean, at least the workers, unlike the power company or a big produce vendor, have a stake in the health of the company.)

If a company’s management strikes a lousy deal with one of their unions and ends up going out of business, that’s no different than striking a lousy deal with their landlord, or their steel or widget or whatever supplier and going out of business.

And if a company strikes a lousy deal with one of it’s suppliers – whether those be suppliers of labor, vegetables, machinery, parts, energy, consultants, whatever – and has to raise prices on customers, those customers are free to go elsewhere if they prefer.

In other words, “raising costs on consumers” is not somehow *inherently* objectionable. And yet this is the sum total of your argument.

(However, I will reiterate, yet again, that raising the wage paid to labor is special however. Consider that if you raise the price of steel, or energy, or microchips, you will increase the well being of makers of steel or energy or microchips. But if you raise the wage paid to *labor* you increase the well being of the entire population. And since labor is necessarily only a fraction of the cost of any given item, the increase in income will tend to be larger than any increases in prices that might be necessary as a result. A claim which the evidence bears out.)

(Which brings us to:)

>>”Again, we do not and will not agree as to whether the higher union wage is available to or significantly benefits the non-union workman”

Whether you agree or not, this is a contrary-to-evidence assertion. The numbers simply do not support your unfounded gut feeling.

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By: jacklecou http://blogs.reuters.com/great-debate/2011/11/11/what-the-ohio-vote-means/#comment-40140 Mon, 05 Dec 2011 18:40:33 +0000 http://blogs.reuters.com/great-debate/?p=11041#comment-40140 >>”If I am the newest employee, but also the brightest and most useful of my peers, in a non-union shop I will be better paid and more quickly promoted. How much I can earn is limited solely by how much potential the boss, manager or owner sees in my services and wants to keep them in his/her company.”

Well, there’s lots to unpack there

For one thing, it’s hardly universally true that managers promote and reward the best and brightest. They may be just as likely to promote the loudest, tallest, or best suckups or golf partners. And of course it’s well documented that they tend to promote the whitest and male-est. It doesn’t help your case to overstate the degree of meritocracy *actually* (as opposed to “theoretically”) present in real workplaces. Unions — and seniority — are in part an effort to address exactly these sorts of concerns about fairness and actual merit.

You’re also forgetting about the other limit to how much you can earn: whether you have any individual bargaining power. Most people don’t have much, or don’t have any expertise in exercising what they do have. In many (probably the vast majority) of cases, it’s not even possible to get the basic information that might help you make your case (like how much your lazier co-workers might be making). That information is “confidential”: i.e., available to your boss, but not to you. That’s an institutionalized power disparity that keeps you from earning what you’re worth.

No, most people take whatever they’re offered, which is not necessarily anything close to what they’re actually producing for the organization. That (combined with the decline of unions) is why real wages have stagnated even as labor productivity has soared over the last couple of decades. If Americans were actually paid what they’re worth, everyone would be due about a 40-50% raise (that’s the amount wages have lagged productivity over the last couple decades).

>>”In a union shop, seniority trumps everything. People like me are warned, gently at first, to quit making others “look bad”. ”

This is neither the law, the ideal, or universal. Depending on the details of the contract, seniority may be owed certain considerations, but employers are

>>”Please. I acknowledged that you and I would never agree on this, but please at least acknowledge that my point of view is more than abstract speculation.”

I did acknowledge it: I acknowledge that your arbitrarily held view that one particular right (Boeing’s “right” to put factories anywhere they please) trumps all other rights and considerations (e.g., considerations of fair dealing and the other principles underlying labor law, the general well being of American workers, etc.) is *dystopian*.

I say that because idolizing and sanctifying corporate decisionmaking in that way over other social considerations would literally lead to dystopia. (Note that it’s not just labor law. There are a a wide variety of good reasons to restrict Boeing’s decisionmking on plant siting. Labor law, environmental law, zoning law, urban planning, etc.)

>>”…and so calls the hall for “George, that excellent and efficient fellow who did the work last year”.

Let me just stop your right there.

This is kind of ironic, since a paragraph before this you accuse me of being in denial of “that which I do not understand”, but I’m going to have to point this out: you appear to be the one in the dark about how things work here.

You do realize that American Airlines mechanics *are employees of American Airlines* right? That, in that case, there’s no union hall involved in hiring?

The whole “call down to the hall” model is only one model of unionization – and by the numbers, not the most common. By it’s nature, it only applies a fairly small segment of the unionized workforce: workers involved in habitual short-term employment – freelancers, basically. And mostly in a few construction related trades, or other areas where short term employment is common (e.g., the movie industry). The union is basically acting as a sort of employment agency, or a guild. We could maybe argue about a situation where that model actually applies, but note that it’s really a special case.

When permanent positions are involved – like mechanics working for an airline or an aircraft maintenence firm – the union is basically only involved during occasional contract negotiations or grievances. Day to day supervision and work assignment are entirely the employer’s responsibility. And this is what we’re discussing in the majority of cases.

Both AFSCME and, AFAICT, TWU (representing AA flight attendents, maintenance personnel, etc.) are staff unions. As are unions representing auto workers, pulp mill workers, grocery store workers, teachers, hotel workers, etc. They represent only those workers – and only those workers – who have in fact been hired by the organization in which a bargaining unit sits.

So if an AA manager wants George — *an AA employee* — to work on a particular project, all he has to do is call the AA maintenance hanger (or whatever) and ask George’s supervisor to make it happen.

And if Joe, another AA employee, is an idiot who can’t tie his shoelaces, then Joe’s supervisor can fire him, and AA will never have to have anything to do with him again. (Joe might try to file a grievance, but assuming Joe’s supervisor documented Joe’s failings even moderately well, it will be denied.)

So, who’s railing against something they don’t understand?

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By: Marybagnaschi http://blogs.reuters.com/great-debate/2011/11/11/what-the-ohio-vote-means/#comment-40018 Thu, 01 Dec 2011 01:12:48 +0000 http://blogs.reuters.com/great-debate/?p=11041#comment-40018 AFSCME is the biggest fraud against the tax payer, along with every dime they rob from the tax payer to force us to pay overinflated wage and benefit packages that very few non-union employees will ever see. I was an AFSCME employee for over 6 years and was illegally fired and retaliated against as a government whistle blower. AFSCME did not bring my illegal firing to arbitration, nor has Gerald McEntee answer my letter of complaint against my local for their discrimination and the fact that my union failed to represent me. I was a victim of work place violence known as work place bullying that was created and fostered by my union steward and the silly office politics and games the union plays, including intentionally black balling skilled hard workers out the door. I have seen more waste and gross mismanagement I have plenty of proof of the union’s gross failure and contribution to gross government mismanagement, the money for union dues paid for with tax payer money buys votes, this is unconstitutional! I had one grandfather work in a union factory in my city, that factory is gone. My other grandfather worked in another non union factory, which is still a thriving company in my community. My father was a postal employee for over a dozen years, the postal union did nothing to help my dad with issues regarding his pension eligibility, he quit the post office an angry, bitter man at this countries and the unions betrayal of a disabled Vietnam Veteran! AFSCME’s failure to represent me is proof enough of the waste of valuable resources that do little more than undermine any businesses legitimate business needs, at the cost of the tax payer. If all these public servants are doing such a great job, then why is our country failing, why is government corruption, fraud, abuse so rampant. If I were a wealthy person, the last place I would give my money to is the government for them to waste it. Every tax payer tries to find a way to give less and get more, not just the wealthy. We cannot afford the inequitable wages and benefits to our public servants who serve themselves and each other, not the public, the public is paying for higher taxes and less freedom because we are enslaved by the government industrial complex and the services they don’t provide!

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By: OneOfTheSheep http://blogs.reuters.com/great-debate/2011/11/11/what-the-ohio-vote-means/#comment-39791 Thu, 24 Nov 2011 04:38:47 +0000 http://blogs.reuters.com/great-debate/?p=11041#comment-39791 @jacklecou,

I didn’t say the well-being of citizens isn’t important, only that it is not a consideration of a “for profit” business unless tax incentives make it possible to do well by doing good. Of necessity, the ethics acceptable in business and those as practiced by the Sisters of Charity are both entirely appropriate in their proper place; but they will never be the same.

The concept of merit in employment outside of a union is real and beneficial. If I am the newest employee, but also the brightest and most useful of my peers, in a non-union shop I will be better paid and more quickly promoted. How much I can earn is limited solely by how much potential the boss, manager or owner sees in my services and wants to keep them in his/her company.

In a union shop, seniority trumps everything. People like me are warned, gently at first, to quit making others “look bad”. If I don’t take the hint, I may suddenly find myself not getting work through the hall, or only such work as others don’t want. There have been historical situations when such workers were injured or killed as a “lesson” to others to “toe the (union) line”. Never, so long as I breathe, would I submit that the mediocre should dictate the future of the exceptional.

You speak of Boeing’s right to open a plant in a right-to-work state as a “flaunting of labor laws”, a “dystopian travesty. Please. I acknowledged that you and I would never agree on this, but please at least acknowledge that my point of view is more than abstract speculation.

You live in a world of denial of that with which you do not understand or agree. A union is able to magically suspend the economic laws of supply and demand and create an alternate reality by the “boilerplate” of union contracts as evolved over the years.

Let’s say an American maintenance gets a government directive to make certain aircraft modifications. It did these on a different airframe not long ago, and so calls the hall for “George, that excellent and efficient fellow who did the work last year”.

The hall calls back and says, well, a lot of our people haven’t worked lately, and so I’ll have to send out Joe instead.” American says “Joe! That idiot can’t tie his own shoelaces, and he takes twice as long as George to do anything if he can do it at all.”

Says the hall, well if that’s your attitude you’re going to have to take Joe and his brother as an assistant or we can’t send you anyone. Says American, never mind, we’ll transfer a man from our St. Louis hub temoporarily. Says the hall: “If you do we’ll strike, because that’s contrary to your contract.” Without a union, conversations like this don’t happen.

You then attempt to use haggling as evidencing your “surplus”. Doesn’t work..my point was that whenever the presence of a union raises a restaurant’s costs it is no different from increases in such costs if a restaurant “goes organic”.

In either case, the final menu price must include all costs and a profit to stay in business. Some would say the extra cost of union labor worth the increase. Some would sat the extra cost of organic ingredients or “fait trade” coffee is. In both cases, I’ll choose to go somewhere else. Like it or lump it. My decision, not yours.

Again, we do not and will not agree as to whether the higher union wage is available to or significantly benefits the non-union workman. When a company with union labor goes out of business, you attribute this as evidence of “management failure” or “luck”.

Hear this. It doesn’t MATTER! It’s history! Management is “on the stree” and the union hall has permanantly lost ALL associated jobs FOREVER! Lose-lose! Guess who winds up alone on the stage grinning like Charlie Sheen saying “Winning” when everyone is losing?

An educated well paid middle class is an excellent goal for a developing country, but your point is not clear because such people are not typically union members…they are management (with the exception of government unions, which hold a special place of outrage in my mind).

Who pays for the union steward? Well, the union “negotiates hourly rates” with the company and the company writes checks to union members. Out of that pay comes, guess what? UNION DUES! Blah, blah…ad infinitum.

So yeah, the consumer is the ultimate sucker that pays all company and union costs, including the steward. The consumer saves that money and more when they buy from non-union companies with non-union labor.

If GM gets a corporate jet, and it increases the productivity of their CEO, the cost of that jet LOWERS GM production costs. I have yet to see ANY way in which a union lowers ANY production costs.

I doubt it possible for you to come up with a clear definition separating ambition and greed. In each there is the desire for “more”, but the difference is at what point “more” becomes “too much”. Good luck with that.

Back to “surplus”. You try to compare an abstraction with reality. Impossible. If someone asks what your house is “worth” there is only one answer. “What someone will offer that you will accept”. There may be a range of selling proces for houses similar to yours in neighborhoods similar to yours, but there is only one house identical in every detail and that is YOURS. That price becomes a matter of record when escrow closes.

It’s the identical same thing when someone seeks employment in the free market and is hired. So long as I have a choice I would never accept a management position at a “union” shop. It’s still a free country!

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By: jacklecou http://blogs.reuters.com/great-debate/2011/11/11/what-the-ohio-vote-means/#comment-39748 Tue, 22 Nov 2011 16:16:22 +0000 http://blogs.reuters.com/great-debate/?p=11041#comment-39748 >>”The only contribution of a union to the employment contract is one more means by which the decision to shut a business down is reached.”

“The only contribution,” eh?

So the well-being of employees (i.e., citizens)? That doesn’t count for anything in your book, huh?

And once again – you could probably count on one hand the number of business “shut downs” that can be attributed to unions (as opposed to management misstept or malfeasance). You could probably still do so if you were a snail. (No hands, get it?)

There’s this whole middle ground between “worker gets bare minimum or slightly less” and “workers stubbornly insist on so much that business literally shuts down” that you’re ignoring. There’s a word for that kind of fallacy…

>>”It isn’t about “strength”, or mistreatment in America today. It is freedom. I think Boeing should be free to build some of their aircraft in southerm, right-to-work states. You don’t. You and I will never agree on this. I can live with that.”

There are many kinds of freedoms. Freedom of speech, of press, of assembly. The right and ability to stand up and substantively address one’s own mistreatment is a freedom. Health is a freedom. Economic security is a freedom. Receiving a fair reward for one’s labor is a freedom.

Your conception of freedom as the ability of a major corporation to flaunt labor laws is…a rather constricted one. That hardly seems like the most important freedom out there. And before you say it, no, the “freedom” to work all your life, chased by the whip of starvation, and all too often for less than a living wage, is no kind of freedom at all.

Freedom is a great thing, but you’re defining it down into a dystopian travesty.

>>”Right now American Airlines is in a dispute with it’s pilot’s union. I think those pilots are well treated and well compensated…I’d take a job like that (I’m a pilot) in a minute, but the very presence of a union suspends the economic laws of supply and demand and creates an alternate reality that costs consumers more money absolutely without exception.”

Your understanding of basic economics is…well, ‘poor’ would be being pretty generous. Would you care to explain how a union is able to magically “suspend the economic laws of supply and demand and create an alternate reality”? This I’d like to hear.

Please also explain how haggling with a vegetable vendor at the farmer’s market “suspends the laws of supply and demand”. Since that process – negotiation – is essentially the same. (If you like, pretend the person doing the haggling is a restaurant owner. Explain how this process of haggling creates an “alternate reality” where restaurant customers in general pay “more money absolutely without exception.”)

>>”The union wage is evidence of privilege unavailable to the average person.”

The average person benefits substantially from the existence of higher union wages. We’ve gone over this. All workers get a boost from higher union wages, union negotiated working conditions, etc. Partly because over time those things become the norm — or the law — and partly because the existence of unions – the mere possibility of unionization – encourages employers to keep wages and conditions better than they otherwise might. (And no, again, price level and wage level are not the same thing. We can measure both. Weirdly enough, higher real wages are actually …better. For everyone.)

>>”It is my expectation that American Airlines is going into bankruptcy as a result of their union dispute.”

Please. They’ve been in negotiations for what, five years? Both sides have made plenty concessions, and they may even be near a deal.

Which is not to say AA won’t go bankrupt at some point. And, at that point, you, or people like you, will likely be very quick to believe wholeheartedly whatever excuses AA management may make to blame *their* failure on the union.

Make no mistake though – it will have been a management failure. It is their responsibility to run their company, and to negotiate workable settlements with their employees (who are not, after all, trying to drive the company out of business – only trying to get what to the best of their knowledge should be fair and reasonable for both parties). I would remind you that there are other airlines, and other airline unions. Most of them seem to be doing just fine, by the standards of the airline industry any way. In that or any other industry, the presence of unions is a very, very poor explanatory variable for business success or failure. (That’s statistical parlance, in case you don’t understand: I’m saying the correlation isn’t there. Some businesses succeed and some fail, some have unions, some don’t. It’s about management and luck, not “greedy unions”.)

>>”If everyone was in a union, then we would all be equal, right? Nope. America would go broke. That would make us even more economically uncompetitive in the world that we alrready are because of our EXISTING standard of living being so much higher.”

Again, higher wagers and better conditions are…better. I’m not sure where you’re getting this idea that paying everyone less would make us…richer? Again, *real* wages – adjusted for price level – are a thing we can measure with some precision. Those studies do not bear out your naive assumptions.

And yes, there’s an international element. But it baffles me how you think climbing down some kind of low-wage death spiral in order to compete better with Honduras or Laos or wherever would be a good idea. You know what distinguishes the most successful developing countries from the rest? Successfully cultivating an educated, well paid middle class. That is, roughly: making people in your country rich enough to afford the very stuff they’re making.

And yet you think that’s a mark of failure. Weird. (The way forward for the US and everyone else is no different. We need more, not fewer, healthy, educated, creative, well paid workers. A stronger middle class, not a weaker one.)

I would strongly suggest that you open an economic textbook sometime and try to catch up. (Modern economics is…wrong, but it’s wrong in “needs to be reworked a bit” sense, not the “completely out to lunch” sense. You’d still come out ahead.)

>>”OSHA doesn’t “cover all the bases”? So? Who PAYS for that “union rep”? Consumers.”

No, union members pay. With dues.

They use a paycheck to pay dues. They also use their paychecks to pay rent, and babysitters, and for muffler repairs. Much as you do. And that paycheck comes from an employer. Which earns its money from ‘consumers’. Who earn their money from employers. Etc. Round and round it goes.

So saying that union dues are raising costs for consumers is *exactly* like me saying that you buying a television or a dinner out is raising costs for your employer (you have no right!). Or saying that the president of a supplier of steel is raising costs on GM if they get a corporate jet.

It’s all true, sorta, in a twisted indirect sense, but a completely insensible way to look at the world. And if you follow it to the logical conclusion, we should all be living in stone huts at subsistence level, because, hey, what right do we have to actually negotiate a fair price for stuff and raise somebody’s costs?

It’s also wrong at the big picture level. See above about wages and price levels. I think you might JUST be missing the fact that consumers are also — except for a lucky idle few — _workers_. Many consumers are workers and even (GASP!) union members. Slightly lower prices are no good unless you have the wages to afford them, and all the evidence points toward unions raising REAL wages, not just the price level. Higher real wages are *good* – and unions, or even just having unions around, does that.

>>”Do you REALLY believe that all non-union workers suffer “unchecked systematic abuse” because there’s no “union rep”.”

ALL workers? Of course not. SOME workers? Absolutely.

And IF and WHEN a group of workers might be suffering in such a fashion, piecemeal approaches are obviously going to be much less effective than addressing the problem employer-wide.

>>”So the goal of bettering one’s life by making money is a “mercenary attitude” corrosive to hard work and honest enterprise? Snap out of it! Making money IS “ hard work and honest enterprise”.”

The history of this attitude of yours (and a lot of other people) is interesting. At one point in Western culture, earning a lot of money from trade or commerce (as opposed to having a noble title and conquering people) was viewed as a bit unseemly. If you were rich enough, you’d still get invited to parties – probably because the people holding the parties owed you money – but you wouldn’t necessarily be popular. There was a religious attitude in many quarters that having a lot of “earthly” reward might even mean you were doing something quite wrong. The really good people had to wait until heaven.

I’d agree that that was maybe not the healthiest attitude for a commercial society to have. And at some point, certain protestant sects turned that around a bit. Their argument was that, if you worked hard and did good things, you might well be rewarded with success – so we shouldn’t look on successful people with automatic skepticism or disdain.

Adam Smith was more or less in this school. He had the insight that trade made both sides better off (an insight you now bizarrely deny, but I digress), and as a consequence society as a whole better off. But he never went so far as “greed is good”. He held belief – and hope – that people should still be moral, even successful people. That they had an obligation to be good people, to do business ethically (which means a good deal more than just carefully treading exactly inside the technical letter of the law!), to do right – in a broad sense – by their employees, their communities, and their country.

Which is all to say, it came to be viewed that financial success was compatible with decency IF it came about through hard work and honest enterprise. Financial success should not be looked down on automatically, but it is still hard work and good acts that should be honored, NOT the success itself. That was a rather healthy attitude. And it lasted for quite a time – it’s not entirely dead even today.

But at some point, in some quarters, it became twisted. Rather than merely saying that *good* people *could* be successful, we have now the rather odd idea that successful people *ARE* good – apparently by mere virtue of their success, without examination of what they did to get there or what they’re doing now. And this has gone even further, to the point where some people seem to believe that ONLY successful people are good – that relatively modest or unsuccessful people must owe their poor fortune to laziness, stupidity, or some other character flaw. (This is reinforced by the ludicrous mythology that a bit of hard work is the ONLY component of success – that birth and good or bad fortune have nothing to do with it.)

And so we come finally to your strange assertion. Now we have not merely that hard work and honest enterprise MIGHT lead to monetary success, but that it is SYNONYMOUS.

This is a fairly radical upset to the normal rules of not only reality but also semantics. Suddenly, the activities of the likes of Enron, Bear Stearns and Philip Morris executives, Charles Ponzi, Al Capone and Blackbeard the pirate are all “hard work and honest enterprise”, while at the same time, the lifelong efforts of poorer workers and laborers to put food on the table for their families…aren’t.

It’s a very odd world you live in.

>>”It is as unwise that a business fall in love with every employee as it is wise for an investor to fall in love with a stock. Emotioinal decisions are a luxury usually associated with red ink and undesirable outcome(s).”

A flawed analogy that is quite revealing.

You might want to observe that a share of stock cannot choose how hard to work, or whether they hate their boss, or whether to jump at the first better offer that might come along (or any offer…), or to continue to work hard for an employer that has shown them and their coworkers loyalty and consideration.

But these are all factors that a *good* manager or businessman absolutely must consider. They’re hard to define, hard to measure, they’re soft and human. “Emotional.” And they all go directly to the bottom line.

Believe it or not, sometimes the brave, hard nosed business decision is to NOT fire people…

>>”As previously stated, there is no “surplus”. What you describe is a mirage without substance. In the cost of everything sold there is the price of labor, materials, overhead (the cost of the plant, associated expenses, management, and profit.”

Again, crack a book sometime. Or even just look it up on wikipedia.

When a buyer and a seller meet, there are a range of prices each would be willing to accept to make a deal. They make a deal somewhere in the region where those ranges overlap. Unless there is literally only one infitinely tiny point of intersection, then one or both parties have a “surplus”. For example, you go to the store to buy a candy bar. You are willing to pay as much as $1 for the candy, but the store is offering it for $0.90. That’s a “consumer surplus” of 10 cents.
(And on the other side, a store or a merchant might be willing to sell something for a bare minimum of $X, but strike a deal with a buyer at some slightly higher amount, $Y. $Y-$X is the “producer surplus” [which is similar but not necessarily the same as profit]. In most transactions, there will be at least a small surplus for both producer and consumer. That’s what motivates the parties to enter the deal. This is all part of that “law of supply and demand” you apparently are only invoking by rote.)

If it’s less confusing to you, you can think of it as “profit”. That’s not really quite the right term, but it’ll do. Logically, BOTH sides to any deal have to “profit” – get somewhat more out of the deal than they put in. An employer only hires a worker if they “profit” by it – if what the worker does for them is worth slightly more than the wage they pay out. Similarly, a worker should only work (in theory) if they “profit” by it – if the wage they make is slightly more than the effort and time they put in to their labor.

So there is a surplus on both sides, and the point where the deal is struck while leaving the transaction worthwhile (“profitable”) to both parties. Moving that point back and forth is the WHOLE PURPOSE of negotation, union or otherwise.

>>”It is fortunately a business decision, not a union decision, as to whether it is better to sell one CD for a million dollars or 100,000 for $10 each.”

Sure. And it’s a business decision for a plastic supplier whether to sell the plastic for the CD for $X a ton or $y a ton. And it’s a “business” decision for a musician whether to enter into a contract to record some music on the CD for $P or $Q. And it’s a “business” decision for the worker stamping out the disks whether to work for $J/hr or join a union/get a job at a union plant and make $K/hr.

>>” I have observed very little difference in non-union wages in union states and in states with right to work laws if unusual imbalances in the supplyof local labor and the demand for local labor are not present.”

Feel free to come up with substantive objections to the study methodology, but this is fundamentally a statistics question. So stats win over anecdotes, period.

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By: OneOfTheSheep http://blogs.reuters.com/great-debate/2011/11/11/what-the-ohio-vote-means/#comment-39693 Sat, 19 Nov 2011 22:40:37 +0000 http://blogs.reuters.com/great-debate/?p=11041#comment-39693 @jacklecou, Sorry for the delay in response.

I think we can agree that ALL employers prefer “…unilateral control over their fiefdoms”. The only contribution of a union to the employment contract is one more means by which the decision to shut a business down is reached.

It isn’t about “strength”, or mistreatment in America today. It is freedom. I think Boeing should be free to build some of their aircraft in southerm, right-to-work states. You don’t. You and I will never agree on this. I can live with that.

Right now American Airlines is in a dispute with it’s pilot’s union. I think those pilots are well treated and well compensated…I’d take a job like that (I’m a pilot) in a minute, but the very presence of a union suspends the economic laws of supply and demand and creates an alternate reality that costs consumers more money absolutely without exception. The union wage is evidence of privilege unavailable to the average person. It is my expectation that American Airlines is going into bankruptcy as a result of their union dispute.

If everyone was in a union, then we would all be equal, right? Nope. America would go broke. That would make us even more economically uncompetitive in the world that we alrready are because of our EXISTING standard of living being so much higher.

OSHA doesn’t “cover all the bases”? So? Who PAYS for that “union rep”? Consumers. Do you REALLY believe that all non-union workers suffer “unchecked systematic abuse” because there’s no “union rep”.

So the goal of bettering one’s life by making money is a “mercenary attitude” corrosive to hard work and honest enterprise? Snap out of it! Making money IS “ hard work and honest enterprise”. These things are ESSENTIAL to a modern, sustainable, above-subsistance society. I agree that businesses should be “responsible citizens”, but to do that they must STAY viable economically as a business and you and I would never agree on just what “responsible” means in this context. I certainly agree when a competent, productive employee for whom there is work is arbitrarily let go it is bad for both the business and the community.

It is as unwise that a business fall in love with every employee as it is wise for an investor to fall in love with a stock. Emotioinal decisions are a luxury usually associated with red ink and undesirable outcome(s).

As previously stated, there is no “surplus”. What you describe is a mirage without substance. In the cost of everything sold there is the price of labor, materials, overhead (the cost of the plant, associated expenses, management, and profit.

It isn’t “surplus” that makes things go,,,it is profit. It’s a honorable goal and an absolute necessity of any going business. It is fortunately a business decision, not a union decision, as to whether it is better to sell one CD for a million dollars or 100,000 for $10 each.

I think “…states with strong union laws and labor movements are…undesireable (sic) places to live…”. I have observed very little difference in non-union wages in union states and in states with right to work laws if unusual imbalances in the supplyof local labor and the demand for local labor are not present. Happy Thanksgiving!

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By: OneOfTheSheep http://blogs.reuters.com/great-debate/2011/11/11/what-the-ohio-vote-means/#comment-39690 Sat, 19 Nov 2011 21:08:19 +0000 http://blogs.reuters.com/great-debate/?p=11041#comment-39690 @SilverKnighth,

I’m sure in the wild west the stagecoach drivers considered their horses “valued team members”. But when one is sick or injured and can no longer pull their share of the load they must be replaced or one gets out of the stagecoach business and into something else.

Any employer that is losing money and cannot turn that around either cuts staff or goes out of business. It’s pretty basic reality…emotion must be set aside and logic must prevail.

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By: SilverKnight http://blogs.reuters.com/great-debate/2011/11/11/what-the-ohio-vote-means/#comment-39632 Fri, 18 Nov 2011 06:08:36 +0000 http://blogs.reuters.com/great-debate/?p=11041#comment-39632 Easiest way to avoid unionization : Treat your workers as valued team members, not like widgets to be discarded when convenient or fashionable.

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By: jacklecou http://blogs.reuters.com/great-debate/2011/11/11/what-the-ohio-vote-means/#comment-39501 Mon, 14 Nov 2011 22:27:52 +0000 http://blogs.reuters.com/great-debate/?p=11041#comment-39501 >>”All workers in states where unions pay more for much that they must purchase in day-to-day life. Just a fact. And, guess what? In non-union states, the cost of living is lower — for everyone. You have not refuted what I said, but proved it!”

Which explains why those states with strong union laws and labor movements are so poor and backwards compared to states with anti-union laws and no or lower minimum wage. Why they’re such undesireable places to live, with such weak public services, and such unhappy, unhealthy, destitute populations.

Oh. Wait.

Well, I’m sure slightly cheaper houses and fast food completely makes up for it.

(If only economists had some way of emprically measuring real wages and costs of living and actually comparing them state-to-state, to see if slightly lower cost of living really made up for the substantial wage penalties of things like right to work laws. Ohhh, if only… http://www.epi.org/publication/datazone_ rtw_index/)

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