Wednesday, December 10, 2008

Unions are so last century

So, we've all heard about this auto bail-out thing-a-ma-bob being discussed, deliberated, and which will ultimately be passed..... only to fail. Or need another huge "life line" in the next few years. But, whatever, it's not a big deal. The $700 billion bail-out is supposed to help save American companies that are near failing, right? But, wait a second...isn't that what capitalism is all about? Good companies succeed and bad companies go bye-bye? No, that can't be right ... we live in an all-too-pc-world where we can't just let a company go bye-bye. That isn't fair. Or nice. It's much nicer to throw $$ at companies that have already failed on their own...just to post-pone the inevitable.

You are probably, it's been a long time since Krista's posted anything remotely political. It has...and yes, a month or two is a long time. Not to worry, though, because I do throw up a little in my mouth each time I hear President-elect Obama's voice on TV. So, I'm still alive. I am really trying to be a glass-half-full-person and hope that he proves me wrong and that he turns out to be a great president. Doubtful, but there is that 1% chance. And hey, there was only a 1% chance that one of the embryos we implanted would split into two, and that happened. So, you never know.

Ok, now to the point of all of this: unions suck. Yes, they do (or did) serve a very important purpose with helping labor conditions in factories to be improved and to make the work environment much more safe for workers. And don't forget child labor laws. What we need to ask ourselves is are they really necessary in 2008? Unions are so last century.

Just take a look at what's happened to the auto makers. Now, I'm not suggesting that all of the problems these companies are facing are due to the unions, but let's not overlook the big (or HUGE) contribution they've made towards pushing these companies over the edge.

Can you guess at what a union worker makes at one of the Big 3? $73/hour. Wow, that's a big number. It's especially big when you compare it to $44/hour (average) for Honda, Nissan, and Toyota employees. And $73/hour is especially big when you compare it to the average $31.50/hour that manufacturing workers make in the US. This is just asinine. With these companies spending SO MUCH of their employees, how can they be competitive? At a bare minimum, it raises prices for all of us.

Y'know, this kind-of makes you want to go to work for a union, doesn't it? You just join and then you make upwards of 150% what someone else in the industry is making in a non-unionized setting. You do the same work for more money. No difference between you and them except the money.

It's been suggested that the Dem's are in bed with the unions, as well they should be. Unions contributed about $80 million (or $450 million, depending on which source you use) towards the most recent election (for Dem's, of course) and they want their payback.

I also find it interesting that people say that the CEO's or other high ranking officials at these companies need to forego their high salaries, give up their private jets, and refuse any type of bonus. What have the unions offered to do to help in the same regard? Wait...nothing. They've ruled out any discussions of concessions. Now, that's pretty nice and fair, isn't it?


Martyn Oliver said...

hey Krista, glad you're back to politics, I missed having your, for me, contrarian voice!

A couple of questions: How do you see the difference between the auto bailout (still unsettled) and the financial bailout (passed, and so far pathetic)?

Second, what do you suppose a low-level Wall Street trader makes hourly? (by the by, I've read that the $73/hour rate is, well, no exactly accurate.)

Third, don't you think, given your "glass half full" proposition, that it's important to note that these bailouts are occurring under Pres. Bush and that Pres-elect Obama isn't in fact in office yet?

Fourth, and finally, how would you think characterize the cost of employer supplied health-care as a cost for auto companies? This seems to be a big issue (and, at least I've read, unions originally didn't ask for this but the companies insisted, thinking that they could provide health insurance more cheaply than any govt. program. That, as they say, is a sticky wicket).

Best to you, Dennis, and the expected!

Krista said...

Hey Martyn! Thanks for your nice wishes.

To answer your questions before I've had my coffee this morning, here are my thoughts;

1. I think that the auto bailout and the $700 billion bailout are both a bunch of junk. We're supposedly a free market and so we should let the free market do what it does best - - good companies succeed, poorly run companies fail. Yes, it may lead us into a depression, but who is to say that we aren't headed there anyway? Either way the economic mess we're in isn't going to go away any time soon (in my not-at-all-a-financial-expert opinion).

Secondly, I do not know what a wall-street trader makes hourly. And that number is up to the free market to decide, so I assume that there aren't huge discrepancies in pay between people doing equal work. From what I understand, they aren't paid a higher dollar amount just because they are part of a certain group, or union.

Thirdly, I agree that this is happening under president Bush's clock, but the Dem's in The House and in The Senate are really the group making the decisions here. I think anyone who runs for President must be atleast slightly crazy because there are so many forces that we don't even know about that are working behind the scenes. In my unexpert opinion, he's trying to make do with the cards he's been given - the $700 bailout passed and now he (and Congress) has the ability to use it as they see fit. He has stated on many occasions that he is a fan of the free market and not 'propping up' companies but those decisions weren't always entirely in his hands. So, to answer your question, I support Bush's underlying beliefs about the market but do not support the bailout.
Lastly, I am not aware of the healthcare and auto worker union situation. According to the research I saw, the $73/hour amount included healthcare and benefits, as did the other numbers that I quoted. So, I'm not really a good one to speak about this question.

Are you a supporter of the proposed auto bailout and/or the 700 billion package?

Martyn Oliver said...


Let me first celebrate the fact that we both agree all of the various bailouts are complete BS! Although I understand, in the abstract, the reasoning, I oppose them--the US needs to toughen up, take its medicine, let the market work its power and purge bad business models, and then we need to start over.

That said, I've got a little push back for you (you did expect that, didn't you?): first, unionized auto workers don't *make* $73/hour--that's the cost to the company, but not take home pay. The article you cite says as much. Another good explanation can be found here:

In short, the unions, the manufacturers and the high cost of health care all share the blame. I'm not explicitly defending unions, I'm just saying that aren't the sole boogey-man in this case.

Second, I find your defense of Pres. Bush disingenuous. It was his Fed chairman Bernanke, backed by Bush, who proposed the first bailout, and then the stampede for federal dollars followed. Congress did its duty in instituting some oversight into the manner.

But following on that, Bush is big into "listen to what I say but don't look at what I do": he opposed international nation building, but we're rebuilding two countries; he supports small government, but his eight years saw one of the largest expansions of federal spending in history; he opposes federal bailouts, and yet is signing off on them left and right.

I just want us to be honest about this, and Congress was controlled by his party for 6 of those 8 years.

Reactions to that?


Krista said...

Thanks for your comments.

Yes, I agree about the $73 figure. We're comparing apples to apples, though, when we compare the high cost of unionized workers to non-unionized workers as the numbers cited reflect all benefits - including pensions, etc.

And, I agree that unions are not the only culprit here. They are one of many. The thing that I disagree with the most is the suggestion that the auto bailout is necessary but yet these companies aren't working in a fair market based system right now. Without the unions (and associated costs), the companies could become atleast slightly more competitive by paying a market rate for these employees. That case is proven when you look at other countries making these same products - - they aren't asking for any sort of bailout right now. Again, unions aren't the only cause but one that needs to be addressed before the American people are put on the line for paying for them to survive. I agree with you - - the marketplace determines the best companies. Some survive, some don't. That's life.

Martyn, I am excited, too, that we each agree on this topic. Let's let the free market work on it's own without gov intervention! That will force companies like The Big 3 to re-evaluate their policies and find ways to become more competitive. I bet one of those ways will be either to re-negotiate these contracts or to minimize their impact at the company level.

I do support President Bush's stated beliefs (for the most part) but his actions don't always appear to follow what he believes. I am not defending him, but I am saying that I cannot even imagine the type of things that he has to deal with in the House/Senate and other complicating factors that may limit his ability to act as he believes he should. I really think he has intended well, the American people just haven't always seen it that way. (And the media seems to like portraying him a poor light, too, which doesn't help him out.) Regardless, it's water under the bridge now.

Your thoughts?

Krista said...

WTF?? Pres Bush to rescue the auto workers?

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