Saturday, January 22, 2011

Public Disregard

It's all a bit vexing to see misinformed citizens commenting, on the Journal website, about greedy union members, bailouts, and the public sector as the cause of all ills. The commenter even throws in 401Ks to complete the gauntlet of unintelligible proclamations.

First, union members are declared the cause of all fiscal woes for Chrysler and General Motors. Next, we are told Harley-Davidson, Mercury Marine, and Kohler were brought to their negotiating knees by the diabolically nefarious unions.

Ah, to have such ignorance fueling misplaced anger.

The only reason any private sector company pays public-equivalent salaries, offers health care, and has some sort of retirement account in place, at all, is because of the years of struggle of organized labor. You'd all still be sleeping in the factory, making widgets 16 hours a day, if it wasn't for unions.

Business owners don't dislike unions because of any true principles the owners may hold. Unions more equitably spread the gains of a business amongst it shareholders (workers), rather than allowing the productivity gains to simply be gathered by a select few at the top of the organization.

It's amazing how angry working- and middle-class people get at other low-income, working- and middle-class people. Yet, none of their vitriol and contempt is ever heaved upon the CEOs making 400 times what their shop-floor worker is making.

Even Fritz Henderson, CEO of GM, said, "They [the United Auto Workers] have been more a part of the solution than part of the problem."

The more naysayers continue to belittle union's gains - living wage, health care, and a retirement plan - the more we see those workers' rights disappearing for all workers - public or private. So, if you don't like having a health care plan at your job, if you'd rather work until you drop - without a chance at ever being able to retire, and if you're happy getting by on a minimum wage (surely buttressed with crippling credit card debt), by all means, continue to criticize unions. What a paradise it will be when we are all WalMart workers.

The 401K story is a perfect example, a microcosm, of the problem with putting our full faith into an all-knowing free market. As many have realized, more so since the Great Recession, defined contribution plans are highly volatile and a very bad vehicle to hitch one's retirement dream to.

Let's also remember some crucial facts about our much, recently, maligned unionized workers:

  • They are more educated than their private sector counterparts - 48% versus 23%.
  • The public sector acts as a safety cushion. During economic recessions they still spend - using restaurants, movie theaters, concerts, buying appliances, doing remodeling, etc. - enabling businesses to stay open and workers to keep their jobs.
  • The total unionized workforce represents 11 percent of total employment.
  • Overall, public workers total compensation is 3 percent less than their private sector counterparts. The wage penalty for working in the state-and-local sector is even higher for higher-wage workers.
  • For every $1.00 invested in state and localities, $1.41 is returned. A very good bang for the buck.
These are tough times and sometimes venting and blaming the other can make us feel better for a short period. But this doesn't change the fact that unions have been more a part of the solution than the problem. To claim differently is delusion and a stubborn disregard of the evidence.

For Further Reading:

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