Unions: The Beginning of the Beginning?


One thing is true.  Unions increase unemployment and raise the cost of goods.

Period.

The modern concept of Union is able to accomplish this by the force of sword and gun.  Laws have been passed that allow Unions to access the police force of the state to intervene on the Union’s behalf.  With this access, the Unions are able to negotiate benefits for themselves that would not otherwise be possible in a relationship between two parties.  In short, the Union uses legal coercion to obtain their benefits.

And this increases unemployment and raises the cost of good above what they otherwise would be.

To think this is not true requires an absolute suspension of the belief that people act in their own selfish self interests.  That a person, who believe she has complete knowledge, would make a choice that is less desirable than another.  That, given everything else equal, she would choose to purchase a good or service at a more expensive price to herself.

Consider gasoline.

Consider two gas stations.  One is a mile away, owned by a pillar of the community who makes sure that he keeps a mechanic on staff to assist folks with their needs.  Who takes care to have attendants to pump the gas, wash the windows and check the air pressure on the tires.  Further, this owner often hands out tickets to the local AAA team to the kids so they can catch a game now and then.

The other station is on the intersection just in front of the interstate.  The owner lives out-of-state and provides none of the services of the small town station.  And baseball games….?  He doesn’t even know there’s a team in town.

The first station sells gas at 3-5 cents higher than the second station.  Question: Where do you buy your gas?

I suspect it depends.  And it should and WILL depend.  Some won’t mind drivin’ that extra mile [or two] to pay that extra 5 cents; others will.

But that’s not what I’m talking about.  I’m talking about when everything is equal, what will you choose.  Suppose you DO support the first station.  And he has 2 rows of gas pumps.  The one row he has gas 2 cents higher than the second row.  Same station.  Same gas.  2 more cents.

I’ll betcha a beer at the game more gas is sold at the cheaper pump.

The same concept applies to labor.  People, acting in what they think is complete knowledge, will, when free to do so, act in their best interest.  And when those people, acting in their own self-interest, interact, they will develop a market.  And the good or service will “clear” at a certain price.

Unions, however, have changed that market such that they are able to force the rules to be changed.  And this rules change allows their members to enjoy higher wages, better benefits and higher pensions.  And so, when given the choice between higher labor or cheaper labor, the business will choose cheaper labor.  And in this case, because the RATE is set, it means fewer workers.

Anyway, this is a long-winded set up for the worst kind of Unions; Public Unions.  See, at some point, even Unions at private corporations understand that they need their “host” to survive.  Demand too much and the company fails, goes bankrupt and the Unions loses out.  This dynamic doesn’t exist in the public sector.  The State is able to continually provide the Union with money and can’t go bankrupt.  They are safe.

Until now:

MADISON, Wis. – Wisconsin Gov. Scott Walker told The Associated Press in an exclusive interview Thursday that he will propose removing nearly all public employee collective bargaining rights to help plug a $3.6 billion budget hole.

BOOM!

In one stroke the sword and the gun are taken from the Unions.  They now have to negotiate on equal standing as the State when it comes to labor.

What would this new law do?

…all collective bargaining rights would be removed for state and local public employees starting July 1, except when it comes to wages. But any salary increase they seek could be no more than the consumer price index, unless voters in the affected jurisdiction approved a higher raise.

Contracts would be limited to one year and wages would be frozen until the next contract is settled. Public employers would be prohibited from collecting union dues and members of collective bargaining units would not be required to pay dues.

But wait.  WAIT!  There’s more:

Walker’s plan also calls for state employees to contribute 5.8 percent of their salaries to their pensions starting April 1. They would have to contribute at least 12.6 percent toward their health care…

And in these areas, the Unions are unable to exercise collective bargaining.  If the folks don’t wanna work under those conditions, they don’t have to.  If they do, they can.  Plain and simple.

It’s a beautiful day in the land of the Cheesehead!

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