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June 30, 2012

I spout off a lot about unions, and in fact my blood pressure starts to raise whenever I think about them.  Lots to say on this.

To be clear, I think the concept of the worker union is sound, or at least was sound.  Back ‘in the day’, probably post WW 1, there were very few if any labor laws in existence.  The primary source of work in the US was factory work, we were in the beginnings of the industrial age and we loved to make things.  We were good at it.  Cars, steel, airplanes, ships, roads, bridges, buildings, big stuff that you could look at and be proud.  However, the plight of the worker, the actual guy turning a bold or welding a seam, was not so positive.  Working conditions were miserable, unsafe and wages were unregulated by anything.  It was a total free-market.  If you didn’t want to do the work for what they were offering, the guy behind you in line would. Your choice, although starving to death was probably the alternative.  This part maybe we should have left alone.

Unsafe working conditions were definitely a problem.  Unions allowed the workers to start having some way to fix this and other issues.  And it worked.  Things did get better for the worker, and today we have thousands and thousands of labor laws on the books to protect the worker from pretty much everything.

But we still have unions.  What, exactly, are they protecting anyone from that labor laws don’t?  The biggest problem I have today with the employee union is that they destroy free-market pricing.  No longer is the wage for a specific job relative to the pool of people available and qualified to do that job.  Wages are disconnected from performance.  Raises are automatic, eliminating any incentive to be better than anyone else at what you do.

In the private sector, I actually don’t have a problem with this as there is a very clear check-and-balance in place.  If the union demands more than the company can provide, the company may go away.  The parasite is self-aware enough to not kill the host and thusly kill itself.

The public sector is a very different beast, as we are now seeing all across the country, and in fact the world.  There is no check-and-balance, the parasite is willing to demand as much as possible from the host because the host can’t die.  Governments have to exist.  Unfortunately, the public sector union knows this and believes that taxing authority is infinite.  The parasite is not capable of asking for more than the host can provide.

Hence, the issues we see regarding bankrupt governments everywhere.  Have you noticed that the one consistent reason seems to be retiree pensions and health benefits?



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