Wednesday, December 12, 2012

Michigan & Labor Unions, Myth Versus Reality

The most fundamental fact about labor unions is that they do not create any wealth. They are one of a growing number of institutions which specialize in siphoning off wealth created by others, whether they are businesses or the taxpayers.

There are limits to how long unions can siphon off money from businesses without facing serious economic repercussions.

Thomas Sowell, Union Myths, NRO, 8 March 2011

Congrats to Michigan for passing a right to work law. No person should ever be forced to pay union dues as a condition of working in their chosen field. It is nothing more than state sanctioned indentured servitude.

The most oft repeated myth about labor unions are that they created the middle class and that they protect the rights of workers. The reality is that our increasing productivity since the civil war created the middle class, and labor unions today are nothing more than parasites on the economy, in addition to being the piggy bank for the left. Labor union numbers have been dwindling for half a century because of market realities, and without government mandates, they will go extinct. There is a reason GM and Chrysler went bankrupt, while foreign car manufacturers with plants in the U.S. did not. And can you say "Twinkies?"

The great economist Milton Friedman gave a short lecture on unions and their lack of any role in the free market several years ago. It is worth taking a few minutes to watch.

And just as a reminder, the real threat to our nation today comes not from the dying private sector unions that ultimately are governed by markets, but public sector unions that are not so governed. To see the effects, one need look no further than California.

Updates & Related Posts:

Powerline notes that the NYT's coverage of the Michigan right to work law omits some of the relevant facts - such as all the ones that would make the unions look bad.

At NRO, a Hillsdale Prof. gives a short history of Right-To-Work, Unions & Trust-Busting.

From Michelle Malkin, a primer on union thuggery in the age of Obama.

From Nice Deb, the union thug violence in Lansing and the left's effort to cover-up, calling it a "false flag" operation. Many links.

Via Instapundit, Byron Preston at PJM notes that the MSM has been wholly silent on the violence, hanging their hat on the canard that the video taped violence by union thugs was a false flag.

From NRO, a discussion of Michigan's modest right-to-work reform and an analysis of why the unions and the Dems are ready to go to war over it:

Democrats are panicked by the spread of right-to-work reforms because the mandatory deduction of dues from the paychecks of public-sector employees provides the party’s financial lifeblood. There are not that many UAW members or Teamsters in the country, but there are legions of bureaucrats, school workers, and surly DMV clerks — and, through its relationship with the public-sector unions, the Democratic party has a direct pipeline into the pockets of practically each and every one of them. The shrieking in Michigan isn’t about workingmen’s wages, but campaign coffers. That is why there is blood.


Joseph Garcia said...

I find it interesting that this bullshit is going around again.

Instead of siphoning all your information from Rush Limbaugh, or being a corporate sycophant, you need to do a little more reading on the subject.

Let me introduce you to the concept of right to work with a personal anecdote.

While living in North Carolina I worked for a company called Dallas Electric (a slight misnomer considering the only licensed electrician was the owner) and Plumbing.

I was an 'electrician helper', meaning I followed around the electrician (who was not required to be licensed or have a formal education at all.) and helped do electrical service calls and new construction installations.

NONE of the electricians I worked with were Journeyman. While the owner, let's call him Mr. Stroupe, owned several cars, houses, motorcycles and other small businesses, none of the wealth he had attained with his ventures "trickled down" to his employees.

I worked with an electrician who was a 12 year employee of Mr. Stroupe, who once solemnly confided in me that he made 13 dollars an hour. While he was a very good parts installer, he didn't have a clue as to how electricity worked, none of it. He could barely read prints (instead, he relied mostly on me to do most of his print reading and "ciphering" (mathematical calculations) and code reading for him.

Don't get me wrong. This was a very nice, very humble man. That is why your bullshit pisses me off. This man, we'll call him Frank, has no retirement, has no benefits, lives in a house OWNED by his boss (with rent taken from his check monthly.), and he is not a properly trained electrician.

Fast forward 3 years and I found myself learning about the unions and becoming a member of IBEW local 532, out of Billings, Montana, and going through a four year apprenticeship program paid for by both the union and the union contractors, with on the job training and a qualification to take the state test afterwards. (In Montana, you must take an NEC code test, and have at least 1100 hours of classroom training and 8000 hours of on the job training to become a licensed journeyman electrician.)

Joseph Garcia said...

The company I worked for in Montana, CEI, was a much more ethically inclined and employee based company. It was started by three electricians who felt that they would, up until the company began being successful, pay themselves only what they paid their journeyman, and they would also work with their men as well.

The company started to grow and was eventually consolidated to be owned by one individual who still operates the company on those same principles to this day. He is very rich, he has a very low turn over rate, and all of his employees are highly regarded and highly paid. This is because Montana is not a right to work state. Hiring any old Joe off the street to do your electrical work for 10 dollars an hour is a terrible idea, not only for your own liability as a business owner, but also for your customer and the welfare of his workers or family.

The unions as we know them today are necessary. Not all companies operate like Costco, with the CEO only paying himself a meager 300,000 dollars a year and paying his employees 15 dollars an hour with benefits. Most companies, even small ones, are run like WalMart. Operating at maximum profit with little to no regard for the workers or responsibility to the places where they are located.

Unions came about because people like the Rockefellors, when building railroads and mines, were paying their employees with company scrip, forcing them to live in company housing and work ungodly hours for minimal pay. They threw out workers who were too old, or if an employee died, they would kick the family out of the company housing to make way for the replacement workers family.

Unions came about to fight greed and corporate abuse, pure and simple. What you see today is unions simply asking for renewed contracts, not raises. They're asking that their benefits not be subsidized by a fractured Wall Street, and instead that they start their own programs. These people are asking for reasonable things and being demonized by idiots like you.

I refuse to feel sorry for the billionare royalty in this company crying because they have to pay benefits and a living wage. And I can't believe someone of seeming intelligence, such as yourself, would buy into this bullshit hook line and sinker.

When you have nobody to hold accountable, and nobody to report to besides arbitrary shareholders, running a business anything goes. To hell with the American economy, right? Lets open sweatshops in China and pay their workers 50 cents an hour, and treat them just as the Rockefellors treated us here in the 20s and 30s. You're an idiot.

GW said...

Mr. Garcia:

Thanks very much for stopping by and leaving your well articulated comments. You raise many points and I will be glad to address them, though let's try and do so without the personal invective. It will be the weekend before I have time to address most of the points.

OBloodyHell said...

THIS really needs to make the main thread.

Union Thugs Demolish Lansing,Michigan Hot Dog Vendor Clint Tarver’s Equipment, shouting “N*Gger, Uncle Tom”

Yeah, Republicans and Tea Party types are the racists in America....

OBloodyHell said...

I'll address them:

}}} This is because Montana is not a right to work state.

No, this has NOTHING to do with RTW or not. Every single thing you describe could be done in a RTW state. EVERY ONE. The difference is, either the company, and its operators, are professional people, or not. This has not the slightest thing to do with UNIONS. You have made a false association, one that unions love to promote, which is that "union" == "professionalism".

I am a computer programmer. We're an unruly lot, there has been occasional attempts to create unions, but they go nowhere, because programmers are too independently minded.

I can state to you that, beyond a doubt, I have met both scrupulous and unscrupulous computer people. Some who were very professional, and others who were markedly unprofessional.

I've been working for decades in a shirtsleeve environment, and I can state that professionalism is an ATTITUDE, not a "membership" quality. And this is true of every person I know in the so-called "professional" class, many of whom were non-union.

}}} This was a very nice, very humble man. That is why your bullshit pisses me off. This man, we'll call him Frank, has no retirement, has no benefits, lives in a house OWNED by his boss (with rent taken from his check monthly.), and he is not a properly trained electrician.

So? This is at least partly his own choice. Is there no community college nearby, no technical school, where he can take classes and learn these things on his own? Why does the employer have to train someone to do the job they've clearly selected as a career? Do I, as a programmer, expect IBM to train me? Or do I go to college, learn my skills, and THEN go to work for IBM? Again -- you make a false association, this time "employer" == "job training".

This doesn't mean that the employer CAN'T train me -- certainly some businesses can finance scholarships that entail the recipient to work for their company for a set period of time.

But the employers are not OBLIGATED to do so.


OBloodyHell said...

}}}} Most companies, even small ones, are run like WalMart. Operating at maximum profit with little to no regard for the workers or responsibility to the places where they are located.

And again, you make a false association. Wal-Mart is there to MAKE MONEY for their shareholders. They do things to do that, period. Wal-mart has positioned itself as the low-price leader -- the place you go to if you care about low prices and nothing more.

The fact that Wal-Marts don't provide tremendous benefits for low-level employees is part of the way they do that. Every dime paid out to those employees is going to be -- HAS TO BE -- passed on to the consumers in the form of higher prices.

If people care more about the wages paid to employees, then they can make that clear, and go shop somewhere else... This is one reason "Target" is so popular.

If Wal-Mart starts losing too much business to Target, then they will make adjustments to change that. That's the way business works.

As it is, the fact that Wal-Mart generally eats Target's lunch says more than enough about what CONSUMERS want.

"Consumers are too stupid to make their own choices"? Eph ANYONE who says that. Who died and made THEM the Dictator of "What Is Right And Proper"?

Consumers are NOT idiots, at least not on the pure level. They make rational choices sufficiently often that they make the RIGHT choices most of the time.

Not saying YOU are one to promote such nonsense, but it's a common refrain after pointing out that what consumers choose is what American business is all about.

BBC - The Code - The Wisdom of the Crowd

OBloodyHell said...

}}} Not all companies operate like Costco, with the CEO only paying himself a meager 300,000 dollars a year and paying his employees 15 dollars an hour with benefits.

My uncle used to work for Costco. They were paying cashiers 2x min wage even back in the 1980s.


Nothing to do with ethics. Nothing to do with "employee consideration".

The answer is "shrinkage".

In any given business, "shrinkage" can be a tremendous factor. Shrinkage is the term for "stuff we no longer have but didn't sell or return". That is -- it's been shoplifted. Now, there are TWO sources of shoplifting, and you really only hear about one of them most of the time, that is "customer shoplifting". That's actually the LESSER of the two forms of shoplifting, representing something like 20-25% of all "shrinkage".

The remainder comes from employees walking out the back door with a case of beer, or a new shirt, or whatever.

It's the vast majority of "shrinkage", this employee theft.

And the better you pay employees, the less willing they are to risk a decent job by taking five-fingered discounts.

Costco, my uncle told me, had its "shrinkage" rates down to under 2%, when retail at the time typically had rates up as high as 4%.

Costco, therefore, felt it worthwhile to have higher wages, it paid for itself holistically.

Why don't others follow suit? I can't answer that -- possibly corporate resistance to the idea, possibly just plain orneriness on the part of some mid-to-high-level bureaucrat. Companies sometimes do stupid things...

OBloodyHell said...

I have no idea if you're open minded or not. Typically, in my experience, people who espouse the views you do do so expecting only an echo of their own views, as opposed to reasoned opposition. Faced with reasoned opposition, they devolve into personal attacks and general invective.

Bertrand Russell's 10 commandments for philosophizers:

#8 - Find more pleasure in intelligent dissent than in passive agreement, for, if you value intelligence as you should, the former implies a deeper agreement than the latter.

I'm going to presume you're actually open to reasoned discourse, and that's why you've posted your comments.

I will offer you a few things that I believe will help you better grasp things than here -- while GW does touch on topics like this, Dr. Mark Perry, a professor of Economics at the U of Michigan, runs a blog which he regularly posts information about different aspects of the economy, including unions. Dr. Perry is, you will find, a largely anti-union, pro-choice advocate. He has a lively comment base, some of whom you will find are in line with your current views. While there is certainly some heat (I'm a contributor to that, I have little tolerance for people who repeat the same BS no matter how many times you refute it), you will find more than an adequate amount of reasoned responses to arguments such as your own above.

Carpe Diem

I would also recommend you read the archived editorials of both
Thomas Sowell
Walter Williams

Both are economics professors, and both have a considerable amount to say about not just unions, but economics in general and how it applies to race (both are black, and elderly enough to have made it up when true racism was widespread in America).

If you listen to these economics professors, you can compare their arguments to those of the opposition, and think for yourself about which one has the more valid arguments.

Dr. Perry provides data to back his arguments, while both Dr. Sowell and Dr. Williams are editorials. But all three make their cases very effectively, generally without a lot of reference to specialist understanding of Economics, and you can learn an awful lot about how the quacks and charlatans (notably Paul Krugman, who openly lies in his own economics columns) in politics and the media openly lie to you about a vast array of things.

I will also note for you a couple specific links:

Union Myths, by Thomas Sowell

Michigan becomes 24th right-to-work state and joins states creating jobs at almost 3X the rate of forced unionism states

America on the move in 2011: Away from forced-unionism states to right-to-work states
None of the 10 states experiencing the greatest net out-migration of residents in absolute terms (Alaska, California, Connecticut, Illinois, Indiana, Maryland, Michigan, New Jersey, New York, and Ohio) had a Right to Work law in 2011. But seven of the eight states with the greatest net domestic in-migration in absolute numbers were Right to Work states

Public Employee Unions, by Walter Williams

OBloodyHell said...

BTW, one final comment.

I'm not saying unions NEVER do any good. Certainly they can push for better working conditions that can be hard to obtain by other means. But this does not mean that they are always operate for the benefit of their union brethren, much less for the benefit of society as a whole.


BTW, another link I meant to include, illustrating my point...

THIS, these days, is what unions are all too much about:

13 UAW workers at Chrysler who were caught red-handed drinking and smoking weed during work hours are reinstated

"Oh, that's just a single case!!"

Well, so were your anecdotes. Why are your anecdotes "general cases", while my anecdotes are "special exceptions"?

Anecdotes are always suspect. They can always be one-off instances and not a generalizable case.

But let's tack on a few more "anecdotes":

Wisconsin Teacher's Union defends teacher who had sex with a freshman
A Wausaukee High School teacher is facing charges for allegedly sexually assaulting a female student.

Kurt Kostelecky, 35, has been charged with 11 felonies and one misdemeanor. The alleged incidents happened in Kostelecky's classroom when the girl was a freshman.


Child Molesting Teacher Can’t Be Fired Thanks to Union
In 1997 a Brooklyn teacher was accused of attempting to molest a sixth-grade girl at PS 138. As it happened, he admitted the behavior, but no criminal charges were filed when all was said and done. Still one would think the fact that he inappropriately fondled a teen should be enough to get him fired from his teaching position. But then again, in New York you can’t even fire a child molester if he happens to be a teachers union member.

Thanks to the fact that it is nearly impossible to fire a teacher, this lowlife has been drawing his almost $100,000-a-year salary to do nothing. You heard that right, to do nothing.

In short -- Unions should be defending people who are wrongly accused. They should not be defending people who clearly are NOT being wrongly accused, and ARE guilty of behavior inappropriate to their field of employment.

They make no such distinction.

And this is a large part of what has turned the public against them.

GW said...

This comment chain is sufficiently interesting that I have turned it into a separate post - along with my response - at