How To Kiss Your Job Goodbye

There is no such thing as ‘a right to a job’—there is only the right of free trade, that is: a man’s right to take a job if another man chooses to hire him.” —Ayn Rand, “Man’s Rights,” 1963—

If you want to understand the most common reason for unemployment in America—the real unemployment rate of which is now well into the double digits—you need only look as far as Washington, D.C., home of the federal government, for the answer: bureaucratic intervention in the economy in the form of minimum wage laws, “public works” projects, “stimulus” programs and the regulation of business.

When some workers are making more than the market value for their efforts (which all minimum-wage laws promote, else there would be no point to them) it follows, by the law of supply and demand, that other workers elsewhere will lose their jobs. “Public works” projects and “stimulus” programs, in addition, forcibly shift capital from more productive sectors of the economy to less productive sectors, while intrusive and non-property-protective regulations raise the costs of production and drive the marginal producers out of the marketplace.

And if you want to understand the second most common reason for unemployment, you need only look as far as Fond du Lac, Wisconsin, home of the Mercury Marine company, for the answer: labor unions seeking to extort more than the fair market share for their work from their employers.

According to news reports, “Officials in Wisconsin were working to keep Mercury Marine from moving its manufacturing operations to Oklahoma after union workers rejected a package of wage and benefit concessions the boat engine maker said was necessary. Leaders of the International Association of Machinists and Aerospace Workers, Local 1947 did not release the tally from Sunday’s [Aug. 23rd] vote but said it was ‘overwhelming’ to reject what Mercury Marine called its final offer.” (Associated Press, Aug. 24th.)

Hard-hit by slumping sales as a result of the recession, Mercury Marine management has, in the last year, frozen salaries, cut spending and unloaded assets in order to stay afloat. What makes their union employees in Fond du Lac think they should be exempted from downsizing as well?

The same thing that has allowed many unions, historically, to engage in other similar, counter productive collective bargaining practices: the National Labor Relations Act of 1935, government legislation permitting “closed shops,” whereby employees were legally required to join a union whether they wanted to or not. And, while the Taft-Hartley Act of 1947 outlawed the “closed shop,” it still permitted the existence of the “union shop,” whereby union membership itself was no longer required as a condition of continued employment—merely the payment of union dues whether an employee was actually a member of the union or not.

One of the provisions of the Taft-Hartley Act, however, Section 14(b), grants individual states the power to outlaw the “union shop” as well, thereby opening employment opportunities to all seekers. To date, such “right-to-work” laws have been passed in 22 of the 50 states, thereby freeing employers in those states from non-market-based union dictates and demands. Wisconsin, as you might imagine, is not on the list—but Oklahoma sure is. What a surprise.

Should the “officials in Wisconsin” that are “working to keep Mercury Marine from moving its manufacturing operations to Oklahoma” actually be serious in that endeavor, the one single thing they could do to promote that occurrence would be to declaw their own unions by making Wisconsin the 23rd “right-to-work” state. Studies have shown, time and time again, the benefits of such a move. As John Cooper concludes, for instance, “right-to-work” laws “spur a state’s economic activity, lead to lower unemployment and higher job growth and make a state more attractive to business.” (“Effects of Right-to-Work Laws on Employees, Unions and Businesses,” 2004.)

Instead of recognizing such realities of such interstate competition, however, the shortsighted members of Local 1947 have chosen to reject Mercury Marine’s offer instead, seemingly unaware that the final joke is on them: for they have just priced themselves right out of the market.

Meanwhile, the article continues, “Oklahoma officials have offered to cover Mercury’s moving expenses in return for the jobs and tax revenue brought to their state.” And in Wisconsin? Union members can kiss their jobs goodbye, and are now free to go and pick their next job—if they can find one—off the tree they seem to think jobs grow on. Too bad for them, but they’ve got it coming: because the last time I looked, a lower-paying job was better than no job at all.

they voted no because they are mostly near retirement. if they accept less in wages and benefits now, it means less in retirement as well. they know the company is going to close down the Wisconsin plant, but it will take 3 years to do the transition. furthermore, by moving to Oklahoma, the company will survive and be able to continue to pay the benefits. so, they vote no....the company moves, survives, and continues to pay them. and they are going to retire anyway. its a simple, logical, self-serving calculation. and totally reasonable.

The article makes an important point: Unions are, in the end, self-destructing due to the fact that they inevitably overreach with their salary and benefit demands resulting in the bankruptcy of the businesses that employ their members. Or, as in this example, the businesses just pick up and move to a more business friendly state.

There is no question that this is the historical trend. Union membership is, in general, on the decline. The major exception: government employee unions - a source of solid Democrat voters who operate free of competition. That is the fertile ground where union membership is still on the rise and I see nothing on the horizon to stop it short of the bankruptcy of states and eventually the Federal Government.

...government employee unions - a source of solid Democrat voters...

And that tops the list of evils inherent in the 'central government.'

The only 'business' that continues to add thousands more employees each quarter is the government. The money we get mugged for that is erroneously labeled 'taxpayer dollars' goes to prop up a scandalously evil machine that is eating America!

When we look at rats like the Clinton Duo who indeed came from absolutely nothing and were as close to 'trailer trash' as is possible are today enriched by millions of dollars due to their political careers!

And now we can watch the Obomba Duo, who indeed were nothing, but will leave, after their short but successful White House run, as fabulously rich. In one term their assignment will be completed: ruin the USA!

I'se regusted!

I recently had a thought that while not directly related to the subject, it is close enough.

When the labor cost exceeds the value of the “product” or “service” produced the employer has several options. One, increase price and that only works if the consumer agrees the product’s value is still worth the price.

Or, Move the work to where labor is cheaper.

Or, replace the labor with machines. We have seen this occur in my lifetime as many entry level jobs have disapeared never to return. Think self service gas stations, voice mail, automatic elevators, secretaries and the countless jobs once done by dedicated staff members but now by everyone with the proper software.

Or, simply do away with that “product” or “service”. I wonder how many jobs go undone simply because it would cost more to get someone to do it then it is worth?

The point is, machines do not pay taxes. Machines do not spend money (excluding maintenance and replacement). An unemployed person is not going to be paying much in taxes and their ability to buy things also decreases.

An increase in minimum wage with its decrease in number of people that can find employement is a net loss for the state in tax revenue (both in income and sales taxes).

Do away with minimum wage, do away with mandatory unions, do away with regulations that get in the way of a new business, restrict the environmental regulations to realistic goals and watch our economy take off.

In order to accomplish this we'd have to chop off about 75% of the 'central government' and that chore is impossible given the number of socialist pansies we've elected to Congress.

You are correct.

I am not sure if we are too far gone or not.

However, if there is one thing history has taught us, nothing remains the same.

Socialism (and central control over an economy) does not, cannot work. Like a dam holding back a powerful river, sooner or later that dam will give way and there will be a lot of destruction while the river finds its true route.

Our policticians (from both parties) will have a lot to answer for sometime in the future.

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