I have no problem with unions whatsoever, although I’ve never been in one, but…
If a union is trying to protect jobs that can be shipped to another country (where there are lower wages), by definition most of the gains will be short-term in nature. Because once the disparity between domestic wages (and benefits) and foreign wages gets large enough (and adjusted for differences in productivity), the jobs will start moving and the jig is up.
Look at the US auto industry. Absent an organized, effective global union, almost any job that can be shipped to another country where the task can be performed for less money, and adjusted for productivity and quality, that job will eventually move. That is reality. And if the jobs DON’T move… then the companies that continue to pay the higher-than-market wages will eventually go bust. Again, see the US auto industry. The UAW is reaping what it’s sowed over the last few decades. (File under: Be careful what you wish for.)
That’s the really disturbing part regarding the auto companies. Even if the unions agree to sharp cuts in wages and benefits, the auto companies will still barely survive. And the Japanese auto makers aren’t making any money either. The business is just brutally competitive.
And who’s to blame for that? Consumers are. We are. We want the best car we can buy at the best price. And there’s no room for any wage inflation in that game when you’re dealing with a global market.
So, yes, unions will fight for fairness – as they should – and they’ll get it for a while. Until they price themselves out of the labor market altogether.
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But you’re assuming that they’re adjusting for quality and productivity, which they’re not, IMHO. We’ve discussed here before that we are NOT getting a higher-quality product, and when one considers the obsolescence built into today’s products, it’s easy to see we are not being less resource intensive, either.
For instance, which is better:
-a well-built product that is three times as expensive, but last five times as long
OR
-a cheaply-made piece of plastic garbage that is one-third of the price, but has to be entirely replaced five times as often?
While it’s certainly more profitable for the corporations to use wage slaves in third-world countries and accelerate turnover/obsolescence, our environment suffers because we pollute more and use more resources to manufacture these products (vs. the lifespan of a high-quality product), and we pollute more on the disposal side, too (not to mention the energy resources used to recycle/dump the trash).
Additionally, we lose the middle class that has held up all these companies, because it’s the middle class in the U.S. that has been the world’s greatest consumer — and that’s entirely due to the fact that we’ve made more money than the workers in developing nations, and we have historically had a much healthier middle class.
Free trade should exist when another country can grow or manufacture a product which we cannot produce ourselves (due to lack of natural resources, geography, climate, etc.), or where they use far fewer resources than we would for the same outcome — same quality, lifespan, etc.
I support fair trade where we trade with countries who share the same environmental and labor protections that we have, and where labor and consumers actually benefit from the trade.
If we allow the middle class to implode, then who is expected to buy from all of those corporations that have excess supply capacity, but no demand? Do they honestly expect the third-world slaves who earn $500/year to take our place? We need to bring them UP to our standards, not bring ourselves down to theirs.
The credit bubble has masked our declining purchasing power for a long time, and this credit crisis was a very obvious outcome of what’s transpired over the past few decades when corporations were allowed to take total control of our government and financial system.
