Labor in America – What is the future?

[Informal Logic]

"Teamsters, SEIU split from AFL-CIO"
http://msnbc.msn.com/id/8682415/

"This Would Be A Very Painful Divorce"
http://cc.msnscache.com/cache.aspx?q=2118733539359&lang=en-US&FORM=CVRE2

"Democrats alarmed by labor rift; AFL-CIO president bitter, calls move by breakaway unions a `grievous insult'"
http://msnbc.msn.com/id/8712926/

I believe Americans are getting fed up with the lack of interest in their well being, whether it is unfair trade agreements, illegal immigration, loss of pensions, corporate corruption, and add to that Bush’s push for privatization of Social Security.

If I were a foreign adversary who wanted to destroy America, I would be in favor of all the things above, as well as dividing America, engaging in a long war(s) of attrition, and removing democracy in any way I could--be it the Patriot Act, or suppressing the “free” press, etc. (I wonder who Bush really works for).

The question in my mind is not so much the effects of union splits, but why. Union membership has dropped from something like 35% down to 8%, and it seems labor wants to regain power again. Perhaps we are seeing the beginning of revolt as it were, and hopefully this will carry through to a changing of the guard at the election polls in 2006 and 2008. Maybe this is good, not bad.

 

[Townsend]

Perhaps we are seeing the beginning of revolt as it were, and hopefully this will carry through to a changing of the guard at the election polls in 2006 and 2008. Maybe this is good, not bad.

Perhaps America will fall into a major recession and take most of the rest of the world with her. It might not be such a bad thing you know...

Regards

 

[Pengwuino]

Why would there be an effect at the election polls in the way you say? The AFL-CIO is one of the democrat icons in this country and is nearing the extreme of the left. A breakoff surely doesn't mean people are going even deeper into the left-wing ideology! I mean these people are workers, not savage ideological animals.

 

[Astronuc]

Perhaps America will fall into a major recession and take most of the rest of the world with her. It might not be such a bad thing you know...

except for the needless suffering and premature deaths.

 

[Astronuc]

The AFL-CIO is one of the democrat icons in this country and is nearing the extreme of the left.

Just curious, and certainly no offense, but how does one qualify this statement. What is meant by "nearing the extreme left"?

I think most union workers simply want fair pay for an honest day of hard work.

Or am I being naive? Which is entirely possible.

 

[Pengwuino]

The AFL-CIO representatives are nearing the extreme left. And actually, it is naive to think they would want fair pay for an honest day of hard work. You join a union to get more and more just like you do when you join any political organization. The NRA doesn't want reasonable and fair gun laws, they want less and less. Environmentalists don't want reasonable environmental laws, they want entire industries destroyed.

What group with a reasonable agenda ever gets a voice in washington ;)

 

[Townsend]

except for the needless suffering and premature deaths.

Not all suffering and death is needless...

 

[Smurf]

I think most union workers simply want fair pay for an honest day of hard work.

Yeah, and most bushies just want to make the world a better place for everyone.

Or am I being naive? Which is entirely possible.

 

[Townsend]

I think most union workers simply want fair pay for an honest day of hard work.

Why do you suppose it is so hard for companies like GM to compete in the global market place?

 

[Smurf]

Not all suffering and death is needless...

Well master townsend. please explain to us uninitiated why this is necessary then? or beneficial?

 

[Smurf]

Why do you suppose it is so hard for companies like GM to compete in the global market place?

I'm confused, GM is doing fine in the global market.

 

[Art]

Why do you suppose it is so hard for companies like GM to compete in the global market place?

Simple - GM in the USA do not have a technological advantage over their competitors and so their competitors in low wage economies have a competitive advantage over them as they can pay their workers and suppliers a fraction of the cost an american worker could afford to live on at even the most basic level.

 

[Townsend]

Simple - GM in the USA do not have a technological advantage over their competitors and so their competitors in low wage economies have a competitive advantage over them as they can pay their workers and suppliers a fraction of the cost an american worker could afford to live on at even the most basic level.

Exactly...

America cannot compete in the global economy because of things like labor unions that keep the price of labor at an artificially imposed value. If the US economy were to completely collapse then perhaps we could undue the damage that has been done by things like the New Deal.

 

[Townsend]

Well master townsend. please explain to us uninitiated why this is necessary then? or beneficial?

I say it would be beneficial because as of right now people believe that the government is there to protect them from poverty. As long as people rely on the government to maintain their standard of living they can afford to play such dangerous games like inflating the price of labor. Not only that but knowing that you can collect unemployment and welfare means that people are less concerned about keeping a job or even working to their full potential.

My favorite analogy for the economy is the forest fire.

If a forest fire burns down a bunch of trees in the woods a lot plant and animals are going to die. Some people think this is a needless thing-but by preventing the occasional forest fire we set ourselves up for massive fires the cause much more aggregate damage than would have been caused otherwise.

It is for that reason that I think it is long over due for the US fall into a major economic recession. Once the fire starts it will be impossible to put out...we will just have to let it burn out. After that new life will have a chance to start and maybe we will learn from the mistakes of our past.

 

[Art]

Exactly...

America cannot compete in the global economy because of things like labor unions that keep the price of labor at an artificially imposed value. If the US economy were to completely collapse then perhaps we could undue the damage that caused by things like the New Deal.

I'm sorry but that is nonsense. If low labour rates were the key to economic success then countries such as Mexico and all of sub-Saharan Africa would be economic power houses.

The way high wage economies gain a competitive advantage is not by driving down wages but by increasing value to the customer and by being innovative in their production processes to increase productivity. The problem with big, old companies such as GM is they are too set in their ways to make the fundamental changes they need to in the way they do business.

A quintessential example is Dell computers. Michael Dell came up with the simple idea of only building computers to order and shipping direct to the end customers cutting out all the non-value added activity in between. The result is despite most of Dell's computers being made in high wage economies sales have continued to grow at a phenomenal rate at the cost of his competition in what is one of the tightest commodity priced items in the world.

 

[Smurf]

I say it would be beneficial because as of right now people believe that the government is there to protect them from poverty. As long as people rely on the government to maintain their standard of living they can afford to play such dangerous games like inflating the price of labor. Not only that but knowing that you can collect unemployment and welfare means that people are less concerned about keeping a job or even working to their full potential.

My favorite analogy for the economy is the forest fire.

If a forest fire burns down a bunch of trees in the woods a lot plant and animals are going to die. Some people think this is a needless thing-but by preventing the occasional forest fire we set ourselves up for massive fires the cause much more aggregate damage than would have been caused otherwise.

It is for that reason that I think it is long over due for the US fall into a major economic recession. Once the fire starts it will be impossible to put out...we will just have to let it burn out. After that new life will have a chance to start and maybe we will learn from the mistakes of our past.

Bet you five bucks the anarchists come out on top in the next revolution.

 

[Townsend]

I'm sorry but that is nonsense. If low labour rates were the key to economic success then countries such as Mexico and all of sub-Saharan Africa would be economic power houses.

I never said it was key...but it is a factor.

The way high wage economies gain a competitive advantage is not by driving down wages but by increasing value to the customer and by being innovative in their production processes to increase productivity. The problem with big, old companies such as GM is they are too set in their ways to make the fundamental changes they need to in the way they do business.

Do you have any idea how much GM has to pay out in pensions? That is a cost that no amount of innovation will reduce. That is a product of labor unions.

A quintessential example is Dell computers. Michael Dell came up with the simple idea of only building computers to order and shipping direct to the end customers cutting out all the non-value added activity in between. The result is despite most of Dell's computers being made in high wage economies sales have continued to grow at a phenomenal rate at the cost of his competition in what is one of the tightest commodity priced items in the world.

I didn't know Mr. Dell came up the idea...I actually thought it was the guy who started Gateway 2000.

The difference is that Dell is a new company and I don't think they have fight much with high powered labor unions. If they were an old company they would have a lot more problems. The initial cost of labor in America is nothing compared to the total cost of labor. I can't blame companies for wanting to out source as much as possible.

 

[Townsend]

Bet you five bucks the anarchists come out on top in the next revolution.

There won't be another successful revolution smurf...The world is way past that point.

 

[Smurf]

At least they make life hard for the big guys to give small businesses a better chance.

 

[Smurf]

There won't be another successful revolution smurf...The world is way past that point.

Ah, not a "history repeats it's self" guy?

 

[Townsend]

At least they make life hard for the big guys to give small businesses a better chance.

That is true...Does walmart have a labor union?

 

[The Smoking Man]

That is true...Does walmart have a labor union?

The PRC? (Got Nukes too!)

 

[Art]

Townsend - You do not seem to be very familiar with manufacturing industry and so let me help you. Typically the total wage bill (both direct and indirect labour) of a manufacturing company is around 10% of total costs and so even a 10% reduction in wages would yield only a 1% reduction in overall costs. Whereas technology driven improvements resulting in a 10% reduction in component costs yields an 8.5% (approx) reduction in overall costs.

So given these numbers where do you think a company's efforts are best expended? Process improvement or beating down people's wages?

 

[Townsend]

Townsend - You do not seem to be very familiar with manufacturing industry and so let me help you. Typically the total wage bill (both direct and indirect labour) of a manufacturing company is around 10% of total costs and so even a 10% reduction in wages would yield only a 1% reduction in overall costs. Whereas technology driven improvements resulting in a 10% reduction in component costs yields an 8.5% (approx) reduction in overall costs.

So given these numbers where do you think a company's efforts are best expended? Process improvement or beating down people's wages?

Well, given those numbers process improvement is clearly a better option.

Maybe I should take microeconomics next semester...na...macro was bad enough.

 

[Art]

Well, given those numbers process improvement is clearly a better option.

So that is why companies such as GM are struggling, as I said they are too set in their old-fashioned ways with no clearly defined business model to work to. Many manufacturers and not just of cars are still trying to catch up with where Toyota was 15 years ago in terms of process controls.

IMO if a US company was to set up a car manufacturing plant using the Dell business model he would literally wipe the floor with his competition both at home and internationally all else being equal.

 

[2CentsWorth]

I think the split just means labor doesn't feel any representation and that their voice isn't heard anymore within the rut of the existing labor union. Personally I don't think this will hurt the Democrats. First, until membership starts to increase it isn't the voting block it used to be. Second, and most importantly, these labor groups have said they will support candidates that support labor, no matter which party. Republicans sure as heck haven't been pro labor.

If issues such as illegal immigration is important to labor unions, and also important to Republicans, the candidate that is taking a stand is Clinton:

"Hillary goes conservative on immigration"

http://cc.msnscache.com/cache.aspx?q=2081827538459&lang=en-US&FORM=CVRE5

Mrs. Clinton...is taking an increasingly vocal and hard-line stance on an issue that ranks among the highest concerns for voters, particularly Republicans

 

[SOS2008]

Perhaps America will fall into a major recession and take most of the rest of the world with her. It might not be such a bad thing you know...

Oh m'gosh, you work for the same person Bush works for?!

The AFL-CIO representatives are nearing the extreme left.

Yeh, those blue collar workers are bleeding heart liberals for sure!

Why do you suppose it is so hard for companies like GM to compete in the global market place?

Because their product is crappy? If you own an import, tell us honestly why that is.

I say it would be beneficial because as of right now people believe that the government is there to protect them from poverty. As long as people rely on the government to maintain their standard of living they can afford to play such dangerous games like inflating the price of labor..

So, do you think American labor should compete with cheap labor in other countries making $2/hour, or perhaps you would be willing to work for $2/hour too so that the U.S. can be competitive in the global market?

Not only that but knowing that you can collect unemployment and welfare means that people are less concerned about keeping a job or even working to their full potential.

Yeh, who wants job security, with increasing vacation time, vested 401k plans, ability to have two years W2's to get a loan for a home, and all that nonsense. After the small percentage unemployment checks run out, welfare is so much more preferable, and really easy/pleasant to qualify for.

My favorite analogy for the economy is the forest fire.

What the? Here's my favorite. There was a bear and a bunny taking a c**p in the woods...

 

[BobG]

Why do you suppose it is so hard for companies like GM to compete in the global market place?

Because their product is crappy? If you own an import, tell us honestly why that is.

So are Dell computers. What are you trying to say? That GM workers are overpaid and deserve whatever screwing they get (did you buy a lemon from GM or something?)

Regardless, if it gets too hard to compete, watch for GM to bail on its pension commitments the way United Airlines did. Now a days, a person is much better off being in control of their own retirement plan.

My favorite analogy for the economy is the forest fire.

What the? Here's my favorite. There was a bear and a bunny taking a c**p in the woods...

That's just plain funny
And I guess the bear is the corporation that promised the pension and the bunny is the poor worker who trusted his employer? Silly wabbit - pensions and social security are promises - nothing more.

 

[solutions in a box]

History of labor unions

No matter what your current view of the labor unions, the historical fact is that the unions brought American workers out of the dark ages in the workplace.

http://www.maineaflcio.org/labor_union_history.htm

They had training programs for new members to serve five year apprenticeships, assuring that a tradesman knew all aspects of his trade. The unions also were a source of pride and family tradition. Those things are mostly gone and forgotten now.

The last bastion of the union workers is with the defence contractors. Those who build America's war machinery still prefer to hire the best of the best.

 

[SOS2008]

So are Dell computers. What are you trying to say? That GM workers are overpaid and deserve whatever screwing they get (did you buy a lemon from GM or something?)

Yes, I've had problems with American made autos. I'm happy with my Nissan, and so far my Dell too.

Regardless, if it gets too hard to compete, watch for GM to bail on its pension commitments the way United Airlines did. Now a days, a person is much better off being in control of their own retirement plan.

Exactly.

That's just plain funny
And I guess the bear is the corporation that promised the pension and the bunny is the poor worker who trusted his employer? Silly wabbit - pensions and social security are promises - nothing more.

Thanks. And yes, let's remember that employees pay into these systems, so it should be a little more than a promise.