The editorial really brings up two points. First, the editorial board compares Alabama to a stereotypical Communist country with the "show us your papers" line. Second, they try to gloss over the whole reason that MB is in Alabama in the first place, the right to work law. I will briefly take a shot at both of these points.
First, I am sure the police in Vance, Tuscaloosa, and Jefferson county have all gotten a "refresher" on how to treat people that drive the cars with a tag the says "Manufacturer". Either way, the police in Alabama are a far cry from the Polizei, who don't have the troublesome Bill of Rights to deal with. Having lived in Tuscaloosa for almost 5 years, I can say that MB is welcomed into the community more than any other auto company in the state. Also, the govenor is from Tuscaloosa, so I am sure somewhere along the way before the bill was passed, MB was asked how they feel about it. A few years ago Germany had several protests about its immigration policy and the impact it had on unemployment. This issue is not unique to America and other countries have had to deal with floods of immigrants too.
Secondly, the right to work law is the first criteria on the list for car companies. BMW, Honda, Hyundai, KIA, Audi, WV, and Toyota have all made similar decisions. Boeing even tried to do the same thing until the NLRB intervened. EADS had plans to build a $1B+ plant in Mobile, if they has won a major defense contract. The plant in Vance what MB's first plant outside of Germany. So this law may have social implications or even make Alabama less of a vacation spot, but it has no impact to the real reasons why MB is in Alabama, cost of labor versus quality of product.
None of the editorial was very legitamate in its recruitment of MB. Overall, the financial condition that the EU is in is much more of a concern to the company, than 1 manager getting arrested for a miore violation.
Jeremy, I really hate it when you make valid points. Good thing it doesn't happen very often (just kidding, of course).
I personally believe that this article is more of a way for Missouri, especially the more progressive St. Louis area, to say, "Hey, we aren't as bad as Alabama," more than it is a serious attempt to recruit MB.
So, I really thought that this was going to be a discussion on immigration, but I like labor discussions as well.
What struck me about your comment was the idea that the real reason MB is in Alabama is the "cost of labor vs. quality of product." I totally agree that it is, in fact, the reason MB is in Alabama and not Ohio. However, it does raise some questions.
A while ago, I was listing to a This American Life episode (essential listening for all progressive, middle class white people) entitled "How to Create a Job." Here is a link if anyone is interested, it starts at Act 3...
Basically, this guy went to a convention where people from various cities were meeting about how to recruit businesses to their. The narrator of the story got frustrated. Here's what he writes,
"This is what drove me crazy about this conference, actually about the whole profession of economic development. They're not creating jobs. They're just moving jobs around. Arizona steals a company from California by offering some tax break and lighter regulation. Then Texas cuts taxes a bit more, does away with even more regulation, and gets the company to move there. That doesn't help anything. We still have the same number of jobs. But now we have this race to the bottom. Who can cut back government services the most? Who can eliminate the most regulation?"
Unless I'm mistaken, you are saying that Right to Work states get more industry because they are harder on unions and are more lax on regulations, resulting in a lower cost of labor with an equal quality of product.
found that Right to Work states have much higher industrial /occupational fatalities than non-right to work states. Other studies have shown that right to work state employees have much lower salaries - which makes perfect sense, why else would the businesses move there?
So, my questions (for anyone, but I'm really interested in what you libertarians think) are...
1. Is there a proper balance between worker rights and employer demand (minimum wage, 40 hour work weeks, holiday pay, maternity leave, etc), or should workers just take what is offered?
2. If there is a balance, who determines what it should be - the free market? The government?
3. Was there a period in American History when things were really good from an libertarian / pro-business point of view (I defiantly think there was, but I will withhold my opinion for now)?
I will refute only a few of your points. First, all the automotive jobs that were created in Alabama were from foreign companies building new plants. You can argue that the jobs were going to go somewhere, but you have to agree that someone did not lose a job in another state so Hyundai could build the plant in Hope Hull. Second, your race to the bottom can be looked at in another way. In economics, the cost of production is supposed to go down over time. That is usually reached through innovation or higher efficiency by some other means. I wonder how the study found right to work states had lower salaries? Did they compare only similar industries? Did they factor in overall cost of living to balance it out? A number like salary is one thing, but the real question is how much buying power do you have with your salary?
As far as regulation goes, I will have to ask the question of when will it be enough? There are new rules every year. Are we safer this year than last year? When I worked as an electrician's helper in 1997, I felt pretty safe. How many regulations have been created since then? As long as someone has a job to create new regulation, then they will do it. Companies that want to focus on what they do, rather than meeting new government guidelines should seek a better place to do that.
To answer your questions, 1 and 2. The free market works when there are about the same supply as demand. When there is more supply, then job seekers get alot of benefits and perks. They get to dictate the terms of their employment. When demand is high those perks give way and the company gets to have more leverage. Information, like job websites, and freedom to move to a new job helps create that equilibrium. The housing issues damper that a little, but its better than it was 60 years ago. In fact, its easier than ever to get retrained for a new job. CBA's eliminate the supply versus demand, because they tell the company that they can have as many workers as they need, aka endless demand. AND, we say that each worker we send will be of equal utility. Therefore, companies don't have to work harder to keep good employees and don't have to worry about weeding out the bad, because there aren't any. The only catch is the union will make if very hard to eliminate jobs once you take them on. So, a company will wait for a long time to take on new workers, depressing supply. Each worker of the union is willing to give up their own economic liberty to flatten out the lows. Unions, however, want more of the pie when the company does well. So, how is the company supposed to respond? They have bought into a system that is supposed to cost them more in the bad, but less in the highs.
So the point of this blog is to try to figure out exactly where every disagrees and why. So, I think we can conclude a few things.
We (let us know if you don't) all agree that...
1. Some basic worker / labor protections are good - child labor laws, the right to a safe workplace, protection against harassment, etc.
2. In the late 1800's and early 1900's, organized labor was instrumental in helping to establish basic worker protections, increasing wages, and making workplaces safer.
3. Unions can become corrupt, and can begin to place the interest of the union itself (and its leaders) over the interest of the individual members.
4. Unions often protect workers who aren't very good or "don't want to work." We all have stories about tenured teachers that read the newspaper in class.
Areas where we likely disagree...
In my opinion, rather than trying to find a balance between the strength of labor and industry, republicans such as Scott Walker and the Koch Brothers are hell bent on destroying organized labor.
I think this for two reasons. First of all, when a company has the single objective of making money, especially for shareholders, they always want to lower cost. This makes perfect sense, and I don't blame them at all. But if they aren't balanced in some way, they will always out power the individual worker. Second, organized labor usually votes democratic, so disbanding unions is good for the ballot box.
Also, I do get what you are saying that when jobs are more plentiful than workers, that the power will shift back to labor. I just think we have passed that time in history. Technology allows for fewer and fewer jobs, and I don't think the pendulum is gong to swing back any time soon.
Anyway, am I correct in assuming that our major area of disagreement is in how power organized labor should be rather than the need for it?
Close. First of all, let's not throw Scott Walker under the bus yet. Organized labor in the general economy is easier to deal with than in government. FDR, the patron saint of progressives was against unions in government.
If you pick through their communist slant and read the part of the letter that is not highlighted, by accident I'm sure, then you see he said that government cannot collectively bargain with union as they do in the private sector. The reason has to do with the difference between publicly elected officials and management of the company.
Lower costs can only be achieved through balance. The creation of Walmart and their lost cost leader strategy is an exception. And even they are witnessing the market swing against them. The public is willing to be a little more for more quality. See the rise in Target and other stores in their segment of the market. Balance of costs is a balance between lower cost of labor and higher efficiency through skilled labor.
Lastly, what you see is a generational gap. Baby boomers are being laid off. They believe that they are too old to get retrained and just are unwilling to change their skill set. The unions are fighting to keep something that is not worth holding onto. This is very similar to people that worked 20+ years in a textile plant in the south. Once NAFTA was passed then that officially killed that industry in America. Even though Clinton signed it, I believe it was a good thing. Like the unionized north, the south would have never let go of the textile mills without drastic change. It appears that timber and logging is just about to hit the same wall unless someone comes up with some innovation to save it. The Rust Belt need to let the old economy go and start focusing on what it takes to bring in new industries.
First of all, I really do enjoy reading your opinions and feel like I learn a lot talking to someone with a business background. But come on man, making comments like "communist slant," really isn't going to get us anywhere and just puts up everyone's defenses. And I promise I will try my best not to refer to Dick Cheney as Satan incarnate.
Anyway, you believe that public sector employees should not be able to unionize at all, correct?
In 2011, do you believe unions are still a benefit to society?
Should every state be a right to work state?
I understand your argument about people being willing to spend a little more for quality, giving rise to the popularity of Target, but I got to wondering if Target employees have it any better than Wal-Mart employees. I found the following link...
Seems like they are almost exactly the same. Target may pay a little better, especially to managers, but Wal-Mart seems to give better bonuses. So how does this type of competition help the worker?
I was looking at the supply chain side of Walmart versus Target instead of the employees themselves. Retail jobs are at the bottom of the ladder and are all basically the same.
Public employees can unionize if they want to talk about work rules or whatever, but they should not collectively bargain on wages and benefits. That is what FDR was saying. As I said before, unions in private industry may be ok. I am not sure what marginal good they do now, but that is different. Basically, I am for free choice. I'm not as socially liberal as a libertarian, but employees and employers should have freedom to do what they want. Yes, states should all be right to work. I should have the right to go anywhere in America and be paid to do anything that is legal without having to pay someone else for the privilege of working. What's wrong about that?
It is easy to see what companies treat people fairly and which don't. The problem that many employees have is that they believe that just because they work somewhere, they have a right to direct the course of the company. They don't. They didn't risk their money on building the business, so they don't have a say. You want to see a company that doesn't have labor problems, research the few companies that are employee-owned.
You will also notice that they usually don't do very well. There are lots of reasons for that, but this is already too long of a response.
Of course dailykos has a liberal slant. Im just saying that using words like communist, socialist, dictator, hitler, etc. are loaded words that add so much baggage and just put up defenses. Thats all im saying.
You say that employee owned companies generally don't have labor issues, but that they don't do very well. Would you say that a major (but not the only) reason for this is that the benefits they give to their employees places then at a financial disadvantage over companies who don't treat people fairly? That their cost of labor per value of product is just too high?
I thinks its more of an issue of entrepreneurial spirit. Not everyone is built to be an owner. A business owner is very different from someone that wants to be an employee. Owners make sacrifices by taking less money in bad times in hopes for a payoff later. An owner works crazy hours and is willing to do everything from selling to CEO's in the morning to cleaning a toilet that afternoon. Just like people that get paid by the hour are different from salary people. Its very psychological.
The editorial really brings up two points. First, the editorial board compares Alabama to a stereotypical Communist country with the "show us your papers" line. Second, they try to gloss over the whole reason that MB is in Alabama in the first place, the right to work law. I will briefly take a shot at both of these points.
ReplyDeleteFirst, I am sure the police in Vance, Tuscaloosa, and Jefferson county have all gotten a "refresher" on how to treat people that drive the cars with a tag the says "Manufacturer". Either way, the police in Alabama are a far cry from the Polizei, who don't have the troublesome Bill of Rights to deal with. Having lived in Tuscaloosa for almost 5 years, I can say that MB is welcomed into the community more than any other auto company in the state. Also, the govenor is from Tuscaloosa, so I am sure somewhere along the way before the bill was passed, MB was asked how they feel about it. A few years ago Germany had several protests about its immigration policy and the impact it had on unemployment. This issue is not unique to America and other countries have had to deal with floods of immigrants too.
Secondly, the right to work law is the first criteria on the list for car companies. BMW, Honda, Hyundai, KIA, Audi, WV, and Toyota have all made similar decisions. Boeing even tried to do the same thing until the NLRB intervened. EADS had plans to build a $1B+ plant in Mobile, if they has won a major defense contract. The plant in Vance what MB's first plant outside of Germany. So this law may have social implications or even make Alabama less of a vacation spot, but it has no impact to the real reasons why MB is in Alabama, cost of labor versus quality of product.
None of the editorial was very legitamate in its recruitment of MB. Overall, the financial condition that the EU is in is much more of a concern to the company, than 1 manager getting arrested for a miore violation.
Jeremy, I really hate it when you make valid points. Good thing it doesn't happen very often (just kidding, of course).
ReplyDeleteI personally believe that this article is more of a way for Missouri, especially the more progressive St. Louis area, to say, "Hey, we aren't as bad as Alabama," more than it is a serious attempt to recruit MB.
So, I really thought that this was going to be a discussion on immigration, but I like labor discussions as well.
What struck me about your comment was the idea that the real reason MB is in Alabama is the "cost of labor vs. quality of product." I totally agree that it is, in fact, the reason MB is in Alabama and not Ohio. However, it does raise some questions.
A while ago, I was listing to a This American Life episode (essential listening for all progressive, middle class white people) entitled "How to Create a Job." Here is a link if anyone is interested, it starts at Act 3...
http://www.thisamericanlife.org/radio-archives/episode/435/transcript
Basically, this guy went to a convention where people from various cities were meeting about how to recruit businesses to their. The narrator of the story got frustrated. Here's what he writes,
"This is what drove me crazy about this conference, actually about the whole profession of economic development. They're not creating jobs. They're just moving jobs around. Arizona steals a company from California by offering some tax break and lighter regulation. Then Texas cuts taxes a bit more, does away with even more regulation, and gets the company to move there. That doesn't help anything. We still have the same number of jobs. But now we have this race to the bottom. Who can cut back government services the most? Who can eliminate the most regulation?"
Unless I'm mistaken, you are saying that Right to Work states get more industry because they are harder on unions and are more lax on regulations, resulting in a lower cost of labor with an equal quality of product.
A recent University of Michigan study...
http://irlee.umich.edu/Publications/Docs/RightToWorkLawsAndFatalitiesInConstruction.pdf
found that Right to Work states have much higher industrial /occupational fatalities than non-right to work states. Other studies have shown that right to work state employees have much lower salaries - which makes perfect sense, why else would the businesses move there?
So, my questions (for anyone, but I'm really interested in what you libertarians think) are...
1. Is there a proper balance between worker rights and employer demand (minimum wage, 40 hour work weeks, holiday pay, maternity leave, etc), or should workers just take what is offered?
2. If there is a balance, who determines what it should be - the free market? The government?
3. Was there a period in American History when things were really good from an libertarian / pro-business point of view (I defiantly think there was, but I will withhold my opinion for now)?
I will refute only a few of your points. First, all the automotive jobs that were created in Alabama were from foreign companies building new plants. You can argue that the jobs were going to go somewhere, but you have to agree that someone did not lose a job in another state so Hyundai could build the plant in Hope Hull. Second, your race to the bottom can be looked at in another way. In economics, the cost of production is supposed to go down over time. That is usually reached through innovation or higher efficiency by some other means. I wonder how the study found right to work states had lower salaries? Did they compare only similar industries? Did they factor in overall cost of living to balance it out? A number like salary is one thing, but the real question is how much buying power do you have with your salary?
ReplyDeleteAs far as regulation goes, I will have to ask the question of when will it be enough? There are new rules every year. Are we safer this year than last year? When I worked as an electrician's helper in 1997, I felt pretty safe. How many regulations have been created since then? As long as someone has a job to create new regulation, then they will do it. Companies that want to focus on what they do, rather than meeting new government guidelines should seek a better place to do that.
To answer your questions,
1 and 2. The free market works when there are about the same supply as demand. When there is more supply, then job seekers get alot of benefits and perks. They get to dictate the terms of their employment. When demand is high those perks give way and the company gets to have more leverage. Information, like job websites, and freedom to move to a new job helps create that equilibrium. The housing issues damper that a little, but its better than it was 60 years ago. In fact, its easier than ever to get retrained for a new job. CBA's eliminate the supply versus demand, because they tell the company that they can have as many workers as they need, aka endless demand. AND, we say that each worker we send will be of equal utility. Therefore, companies don't have to work harder to keep good employees and don't have to worry about weeding out the bad, because there aren't any. The only catch is the union will make if very hard to eliminate jobs once you take them on. So, a company will wait for a long time to take on new workers, depressing supply. Each worker of the union is willing to give up their own economic liberty to flatten out the lows. Unions, however, want more of the pie when the company does well. So, how is the company supposed to respond? They have bought into a system that is supposed to cost them more in the bad, but less in the highs.
So the point of this blog is to try to figure out exactly where every disagrees and why. So, I think we can conclude a few things.
ReplyDeleteWe (let us know if you don't) all agree that...
1. Some basic worker / labor protections are good - child labor laws, the right to a safe workplace, protection against harassment, etc.
2. In the late 1800's and early 1900's, organized labor was instrumental in helping to establish basic worker protections, increasing wages, and making workplaces safer.
3. Unions can become corrupt, and can begin to place the interest of the union itself (and its leaders) over the interest of the individual members.
4. Unions often protect workers who aren't very good or "don't want to work." We all have stories about tenured teachers that read the newspaper in class.
Areas where we likely disagree...
In my opinion, rather than trying to find a balance between the strength of labor and industry, republicans such as Scott Walker and the Koch Brothers are hell bent on destroying organized labor.
I think this for two reasons. First of all, when a company has the single objective of making money, especially for shareholders, they always want to lower cost. This makes perfect sense, and I don't blame them at all. But if they aren't balanced in some way, they will always out power the individual worker. Second, organized labor usually votes democratic, so disbanding unions is good for the ballot box.
Also, I do get what you are saying that when jobs are more plentiful than workers, that the power will shift back to labor. I just think we have passed that time in history. Technology allows for fewer and fewer jobs, and I don't think the pendulum is gong to swing back any time soon.
Anyway, am I correct in assuming that our major area of disagreement is in how power organized labor should be rather than the need for it?
Close. First of all, let's not throw Scott Walker under the bus yet. Organized labor in the general economy is easier to deal with than in government. FDR, the patron saint of progressives was against unions in government.
ReplyDeletehttp://www.dailykos.com/story/2011/02/21/948033/-Wisconsin:-GOP-Lying-About-FDR-Again
If you pick through their communist slant and read the part of the letter that is not highlighted, by accident I'm sure, then you see he said that government cannot collectively bargain with union as they do in the private sector. The reason has to do with the difference between publicly elected officials and management of the company.
Lower costs can only be achieved through balance. The creation of Walmart and their lost cost leader strategy is an exception. And even they are witnessing the market swing against them. The public is willing to be a little more for more quality. See the rise in Target and other stores in their segment of the market. Balance of costs is a balance between lower cost of labor and higher efficiency through skilled labor.
Lastly, what you see is a generational gap. Baby boomers are being laid off. They believe that they are too old to get retrained and just are unwilling to change their skill set. The unions are fighting to keep something that is not worth holding onto. This is very similar to people that worked 20+ years in a textile plant in the south. Once NAFTA was passed then that officially killed that industry in America. Even though Clinton signed it, I believe it was a good thing. Like the unionized north, the south would have never let go of the textile mills without drastic change. It appears that timber and logging is just about to hit the same wall unless someone comes up with some innovation to save it. The Rust Belt need to let the old economy go and start focusing on what it takes to bring in new industries.
First of all, I really do enjoy reading your opinions and feel like I learn a lot talking to someone with a business background. But come on man, making comments like "communist slant," really isn't going to get us anywhere and just puts up everyone's defenses. And I promise I will try my best not to refer to Dick Cheney as Satan incarnate.
ReplyDeleteAnyway, you believe that public sector employees should not be able to unionize at all, correct?
In 2011, do you believe unions are still a benefit to society?
Should every state be a right to work state?
I understand your argument about people being willing to spend a little more for quality, giving rise to the popularity of Target, but I got to wondering if Target employees have it any better than Wal-Mart employees. I found the following link...
http://jobs.aol.com/articles/2011/05/02/target-vs-walmart-which-one-is-a-better-place-to-work/
Seems like they are almost exactly the same. Target may pay a little better, especially to managers, but Wal-Mart seems to give better bonuses. So how does this type of competition help the worker?
I was looking at the supply chain side of Walmart versus Target instead of the employees themselves. Retail jobs are at the bottom of the ladder and are all basically the same.
ReplyDeletePublic employees can unionize if they want to talk about work rules or whatever, but they should not collectively bargain on wages and benefits. That is what FDR was saying. As I said before, unions in private industry may be ok. I am not sure what marginal good they do now, but that is different. Basically, I am for free choice. I'm not as socially liberal as a libertarian, but employees and employers should have freedom to do what they want. Yes, states should all be right to work. I should have the right to go anywhere in America and be paid to do anything that is legal without having to pay someone else for the privilege of working. What's wrong about that?
It is easy to see what companies treat people fairly and which don't. The problem that many employees have is that they believe that just because they work somewhere, they have a right to direct the course of the company. They don't. They didn't risk their money on building the business, so they don't have a say. You want to see a company that doesn't have labor problems, research the few companies that are employee-owned.
You will also notice that they usually don't do very well. There are lots of reasons for that, but this is already too long of a response.
Furthermore, if you dont'believe that the dailykos is slanted, just as I believe Fox is slanted, then we have a big mountain to climb.
ReplyDeleteOf course dailykos has a liberal slant. Im just saying that using words like communist, socialist, dictator, hitler, etc. are loaded words that add so much baggage and just put up defenses. Thats all im saying.
ReplyDeleteI do think that Ayn Rand would like your answer.
ReplyDeleteYou say that employee owned companies generally don't have labor issues, but that they don't do very well. Would you say that a major (but not the only) reason for this is that the benefits they give to their employees places then at a financial disadvantage over companies who don't treat people fairly? That their cost of labor per value of product is just too high?
I thinks its more of an issue of entrepreneurial spirit. Not everyone is built to be an owner. A business owner is very different from someone that wants to be an employee. Owners make sacrifices by taking less money in bad times in hopes for a payoff later. An owner works crazy hours and is willing to do everything from selling to CEO's in the morning to cleaning a toilet that afternoon. Just like people that get paid by the hour are different from salary people. Its very psychological.
ReplyDelete