Wednesday, December 17, 2008

Unions are still needed, but barely

The problem with the Detroit unions is that they became so powerful they were able to demand deals from the automakers that weren't justified economically, but the laws and our culture gave the companies no choice but to make a deal.

We need unions to protect individuals from being rendered powerless in the job market versus a "big company". Otherwise, the market forces would force the pay, benefits, and working conditions downward in many cases. For example, a worker who earns $50,000 a year in a factory would be compelled to deal with a person willing to do the same work at the same quality level (or better) for $10,000 less. And as education and immigration improved and increased this cycle would continue to put downward pressure on pay and benefits because there are millions of people whose current situation is so much worse than that of say an autoworker that they can and would underbid them in the labor market. This has positive consequences in terms of a more efficient economy and lower prices; but it is damaging emotionally and otherwise to our workforce to deal with this pressure.

In a truly free market, companies would be able to hire/fire as they wished, presumably based on what was best for the company overall. This would be good for consumers (lower prices), and business owners (higher profits) because of more productivity. Yet, this would be a strain on the workers.

But we must remember that the workers for one business may be a consumer for that same product and others throughout our society. So, though it harms a few people (workers), it would help the general society.

So we have to balance the competing needs of the workers with the economic value to society. This is a moral question. What should a person be entitled to after years of hard work. We assume they should get the agreed upon money they've earned, but should they accrue any rights in terms of a guaranteed position or work conditions or health benefits?

Sad to say, most people address these kinds of issues in a very personal manner, and their overall perspective doesn't deviate very far from their particular reality. So people with less skills and less aptitude to be educated in other field will side with having more unionized type benefits that protect the masses. Whereas others who are mores interested in diversity of jobs, education, society, etc. are more willing to look at the benefits of having a more free market free from Unionized rules.

The government should pay for the legacy costs of the Unions. These would include pensions an health care for retirees that are legally obligated, but don't contribute to any production today.

The government should void any union contracts in effect today, and force a re-negotiation.

In doing so, the government should ensure any final deal gives the automakers a fair chance over the next five years to compete with other U.S. automakers.

Inevitably this willl mean less pay and benefits for the workers.

After five years, the government should leave the industry alone and let the market-place rule.

This would allow all the people in the industry, both directly and indirectly to take stock of their position and make arrangements if it won't work out for them.

It would set the principle that the government is encouraging a free and fair market, in which case there will be "losers" whose products aren't wanted at the price they are being offered.

This is the approach that we as Democrats should advance . We should always remember that Government really stands for we the people acting together through the government; which means we should always try to act in the best interest of the country both for now and in future.

Craig Farmer
making the word "liberal" safe again!

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