Saturday, September 13, 2008

Unions

Prices always depend on supply and demand, right? It's a free country, and I can always buy what I need from whoever offers me the lowest price, right? Not always. The price of labor can be fixed by unions, which exercise absolute control over labor supply. You might say a union has a monopoly on labor, or that they are a sort of labor cartel. This system can be detrimental to the economy, and does little to satisfy the needs of the company.
If, for instance, you are a large aerospace company with a multi-billion dollar deal on the horizon, and you need a lot of laborers, and you are willing to pay out (demand) $25 an hour along with excellent benefits, stock options, etc., and there are heaps of guys (supply) who are willing to work for you for said price, you can't hire them unless you meet the demands of the union. So the union says $30 an hour, and a $5000 bonus, and Mariners tickets along with a large bag of cotton candy to sweeten the deal. You can't move forward until you come to an agreement, meanwhile your stock is dropping $2 every day and you are paying millions in penalties and there is a growing possibility of losing some of the business altogether. You see where the damage to the economy comes into play as well as the potential to seriously mess up important business deals that have been years in the making.
It seems to me that most of what unions do these days is get their members riled up to bite the hand that feeds them. They call for strikes and file grievances at the drop of a hat while communication and negotiation would be more in the interest of the laborers, as well as, of course, for the company. Strikes are a last resort, as in the 1800's when working conditions were hazardous and guys working 80 hours a week could hardly feed their families. I think Samuel Gompers would turn over in his grave if he could see what unions are doing nowadays. And I think today we could do without unions altogether.

No comments: