In 1935, the United States Congress passed the National Labor Relations Act, which secured effectively the right of employees to unionize and subsequently enter into collective bargaining agreements with employers. The intent of the law was to provide fair labor conditions, and increased wages. While the spirit of intent of the law was favorable, the inevitable side effect of this was that workers were protected based on payment of dues to their union, rather than the merits of their respective performance. A worker who metaphorically "mails it in" and puts forth the bare minimum effort is given basically the same compensation as a worker who is a top performer. Performance is no longer an incentive for most of these workers. As a result, companies are not able to achieve at top-tier performance, as they are not getting the most out of their respective labor forces.
In addition to labor inefficiencies, the process of collective bargaining brought about substantial pension obligations that companies will have to fund in the future. Making matters more complicated (and expensive) is an increased life expectancy of Americans overall, and advances in medical technology which also promote longevity (and, consequently, increased expense).
The environment for business created by unions has made companies which are union-heavy at a decided disadvantage in competing with non-union shops. Detroit is a glaring example of this, with the automotive manufacturing business virtually dried up, and the highest rate of poverty and unemployment in America. GM, Chrysler, and Ford all have to account for the costs of union obligations in the price of their respective automobiles. We, as consumers, pay for this with the purchase of each car we buy made by union shops. Hostess, the maker of Twinkies, was the most recent large business to fail as a result of union pressures and strikes. Concurrently, with each purchase of a simple snack cake, the cost of the union labor was included.....all of which is a cost that adds no intrinsic value to the product at the end of the day. The United States Postal Service is yet another glaring example of union inefficiency....it is my opinion that it is simply a matter of time before the Post Office is insolvent, goes bankrupt, and must be taken over by private enterprise (oh, did I mention my capstone project in grad school was an intensive study on the US Postal Service?).
The worst part of all of this? When large companies fail and their pension is declared insolvent, the Pension Benefit Guarantee Corporation is forced to pick up the tab, all at taxpayer expense. Even worse, the workers who were counting on a sound pension when they retire are now being paid pennies on the dollar for their retirement, placing additional economic strain on local welfare programs (and yes, we the taxpayers get to pick this tab up, too).
Bottom line is that business is smart, and when you are hit in the pocketbook, you learn quickly. The automotive industry, for example, has been moving vehicle manufacturing operations from the north to the south. Hyundai, Toyota, and Kia have all successfully been building cars that were traditionally imported in Tennessee, Georgia, and Alabama....all in non-union shops. They are providing good paying jobs to a local economy that welcomed the business, and producing cars that do not have the "tax" created by unions. The real tale of the tape was in 2008 during the Global Financial Crisis. Chrysler and GM were forced to accept a government bailout, while Ford chose to implement cost-cutting measures that ensured solvency. During this same time, the foreign-owned manufacturers were profitable and gained market share.
Most recently, the United Auto Workers attempted to form a union-shop in Tennessee at a Volkswagen factory. For those not familiar, for a shop to unionize, employees must approve a measure of this nature by vote. Volkswagen had taken a stance of neutrality on unionization, and publicly indicated they did not care if the shop unionized or not. When the vote took place, the UAW move was defeated, and the factory will remain non-union. Naturally, the UAW is pushing an appeal, has threatened litigation, and just about anything else you can think of. More importantly, there is extreme significance with this vote - workers in the south do not feel they require the influence of unions to earn a living wage. This is symbolic of unions in the United States overall.....they do more harm than good. There is a reason why their respective membership is shrinking. Eventually, unions will go they way of the goonie bird......
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