Skip to comments.The Fall of the House of Labor
Posted on 12/14/2012 5:42:22 AM PST by Kaslin
In 1958, Senate Minority Leader William Knowland, his eye on the 1960 GOP nomination coveted by fellow Californian Richard Nixon, went home and declared for governor.
Knowland's plan: Ride to victory on the back of Proposition 18, the initiative to make right-to-work the law in the Golden Land. Prop. 18 was rejected 2 to 1. Knowland's career was over, and the Republicans were decimated nationally for backing right-to-work.
Badly burned, the party for years ran away from the issue.
This history makes what happened in Michigan, cradle of the United Auto Workers, astonishing. A GOP legislature passed and Gov. Rick Snyder signed a right-to-work law as libertarian as any in Red State America.
The closed shop, where a worker must belong to the union before being hired, is dead. The union shop, where an individual must join the union once hired, is dead. The agency shop, where a worker cannot be made to join a union but can be required to pay dues if the union is the agent negotiating the contract for all workers, is dead.
Michigan just legislated the open shop.
And behind the blue-collar bellicosity in Lansing is this new reality. Non-union workers can now "free ride" on union contracts. This is close to a non-survivable wound for labor.
Workers who do not belong to unions will cease paying dues, and union members will begin quietly to quit and pocket their dues money.
Why pay dues if you don't have to? Why contribute a dime to a union PAC if you don't have to, or don't like labor's candidates?
Michigan workers are not going to suffer. They have simply been given the freedom to join or not join a union, to pay or not pay dues. And while wages in right-to-work states such as Virginia, Tennessee, Texas and Florida are slightly below those of other states, employment in right-to-work states is higher.
For these are the states where domestic and foreign investors look to site new plants. The BMW assembly plant is in Greenville-Spartanburg, S.C., the Mercedes plant in Tuscaloosa, Ala., the Volkswagen and Nissan plants in Tennessee. As Gov. Rick Perry boasts, Texas has been the biggest job creator in the Obama recession.
But union power is going to be circumscribed as non-union workers elect to free-ride and union members start resigning. And just as Michigan saw Indiana creating jobs after passing right-to-work, other states may observe Michigan and go forth and do likewise.
There are now 24 right-to-work states. But while these laws arrested the rise of the house of labor, there was an inevitability to its fall. Who are the collective killers? Like the murder on the Orient Express, just about everyone on the train.
First came automation. A third of U.S. workers were unionized in the 1950s. But with new technologies, we discovered we did not need so many men to dig coal, make steel or print newspapers. We did not need firemen riding in the cabs of diesel locomotives.
A second blow came with the postwar rise of Germany and Japan. Their plants and equipment were all newer than ours. Their wages were far lower, as they did not carry the burden of defending the Free World. Under our defense umbrella, they began to invade and capture our markets.
And Uncle Sam let them do it.
A third blow to Big Labor, concentrated in the Frost Belt, came from the Sun Belt. With air conditioning making summers tolerable, the South offered less expensive and more reliable labor than a North where union demands were constant and strikes common.
But the mortal blow to American unions came from globalization.
With the collapse of communism in Eastern Europe, the Soviet Union and China propelling hundreds of millions of new workers into the global hiring hall, U.S. multinationals saw historic opportunity.
If they could move factories out of the U.S.A., they would be free of union demands, wage-and-hour laws, occupational health and safety laws, environmental laws and civil rights law. By outsourcing, they could produce for a fraction of the cost of doing so in the U.S.A.
And if they could get the U.S. political class, in return for corporate generosity at election time, to let them bring their foreign-made goods back to the U.S.A., tax and tariff free, profits would explode, and salaries and bonuses with them.
The corporate establishment and political establishment shook hands, the deed was done, and the fate of U.S. industrial unions sealed. So came NAFTA, GATT, the World Trade Organization, MFN for China, free trade with all.
And with globalization came trade deficits unlike any the world had ever seen, a loss of one-third of U.S. manufacturing jobs in the last decade, a U.S. dependence on foreign-made goods almost as great as in colonial days, the enrichment of our corporate and financial elites beyond the dreams of avarice, and the decline and fall of the house of labor.
Unions are dying because, in America, economic patriotism is dead.
The author says this, If they could move factories out of the U.S.A., they would be free of union demands, wage-and-hour laws, occupational health and safety laws, environmental laws and civil rights law. By outsourcing, they could produce for a fraction of the cost of doing so in the U.S.A. Then the author concludes this, Unions are dying because, in America, economic patriotism is dead.
Having been an employee in companies that moved overseas or simply shut down, I can tell you it had nothing to do with economic patriotism. It had to do with strangulating regulations, EPA inspectors from the city, county, state and federal government who can show up and shut you down instantly. It has to do with the IRS, which can and did (illegally) threaten to shut companies down if they didnt (fill-in-the-blank). It had to do with the fact that the government will supply a lawyer and encourages employees to sue their employer. (A lawyer told me, I dont care if somebody is lying to me. If theyre one of the protected classes Ill take the case because the government is paying the bill. The company knows that and I can force a settlement.)
Thats why were becoming an economic basket case. Not because unions have fallen or economic patriotism is dead.
"Economic patriotism" is a nonsensical concept. People aren't going to buy crap just because it was made locally. Detroit's auto industry killed itself by thinking it could get away with making crap and coasting on its reputation. No one is under any obligation to buy inferior products out of loyalty - that violates the whole ethic of capitalism to begin with.
Eliminate entire Departments. Many of which were created beyond any reasonable interpretation of the Constitution. And instead of “contributing” they are totally destructive to the nation and hugely expensive.
All these epitaphs for the unions are a tad premature IMHO.
They are a massive GOTV operation for the Democrats. Not to mention a huge funding mechanism. The deck is about to be restacked heavily in their favor. Obama owes them, bigtime. Card check, thru the back door or over the transom, is coming. Soon.
This is just the best news. If unions are so great for workers, they shouldn’t need big nasty goons beating up people to protest the new law.
Do you consider the communionists to be patriotic? You know, those same thugs that try to shut up the dissenting voice with a sucker punch to the mouth? You know, those same thugs that contribute so heavily to Obammie the Commie and the DNC machine that hates the free market, capitalism, small business, entrepreneurialism? You know, those same thugs that strike in order to extort pay and benefits their employers cannot afford, thus destroying their employers and their jobs? You know, those same socialist-/communist-minded folks who, in making and effecting these demands, forces their neighbor, the consumer to pay for those demands? You know, those same thugs that teach in our government-run schools and brainwash our children with anti-American lies and fill their heads with sugar-plum visions of a Socialist Utopia? You know, those same tyrants in the EPA who put such punitive and unnecessary regulations on manufacturing that businesses are forced to relocate in other countries just to survive? You know, those same socialists in the legislature that have exacted such confiscatory taxation on employers that they are forced to relocate in other countries just to survive?
You see, Pat, it really is fairly simple The unions and other assorted leftists are what is destroying manufacturing and jobs in the country. We wouldn’t need all the protections that you keep espousing if we would get rid of the anti-American, anti-business, anti-right-to-work employee policies are the root cause of that which you lament.
Indeed. See my post #9.
“No one is under any obligation to buy inferior products out of loyalty - that violates the whole ethic of capitalism to begin with.”
Well, starting in 18 days, there will just be an obligation to buy an inferior product called Obamacare. And that also violates the whole ethic of Capitalism.
-——the mortal blow to American unions came from globalization-——
This is the money phrase. This is the fact many here refuse to believe or to accept as reality. Even the author of the article doesn’t really get it.
While Buy America may be dead and there is no economic patriotism there are other stronger forces. Patriotism does not really apply in market operation. Competition is the driving force. The author fails to consider the wills and desires of the global business world that has millions of extremely capable have nots intent om becoming haves.
For those not involved in the day by day operation of the global business world it is difficult to see how well it functions. It is now to the point where for any given transaction, an e mail chain may develop involving participants from multiple companies in many many widely separated locations getting the product delivered or solving a problem that crops up.
Last May I crossed the width of America on the Butterfield trail. It was the route of the first US Mail contract to deliver mail from the coasts. It was all about communications. It was in large part, in California, the instrument of the Wells Fargo Co. Being both a bank and a freight company, Wells Fargo had the ability to influence communications and thus transcontinental trade.
The globalization presently underway and growing is similar. communications, instant 24 hour continuous communications, coupled with a tremendously pent up desire to improve life, has led to fantastic global trade. The same traits and tendencies that drove the growth and development of America are now at work on a global scale.
The American and even more threatened the European unions are being tossed aside by the people of the world wanting a better life. The competition is intense. The unions can’t stand the onslaught and death is their fate.
America will continue to thrive by innovating and increasingly becoming competitive. Unions and businesses that do not throw off the old ways and actively engage in the competitive fray will die.
Either change or die
To work, the Economic Patriotism concept needs to be supported by ALL THREE PARTIES in the manufacturing sector; Labor, Management and the Consumer. As unions demanded more and more for less and less, Management quite rightly started to see they were economically doomed unless something changed, and they turned to outsourcing. That didnt happen out of some greedy malevolence; it happened because American labor costs were far too high.
The funny thing about all of this is that we are on the cusp of a manufacturing revolution that will change EVERYTHING. Its already happening. Automation has already caused some companies to reverse outsourcing - they need far fewer workers so suddenly international shipping has become their largest price concern.
The next level will come with 3-D printing; a lot of cheap low-level manufacturing (plastic forks for example) is about to become a print-on-demand commodity; people will have their own printers to make what they need, or will be able to do to the local Print Shop to print up a bag of forks. When that really takes hold, much of the 'plastic crap' outsourcing will come to an end - why ship a container of cups from Indonesia when I can print them locally and save the shipping cost and inconvenience?
Great post. The union bosses have apparently decided that if they are doomed to die, they are going to take the rest of us with them. We are nearing the endgame - the US economy is far weaker than is being reported and one Black Swan event could break it permanently.
Unions are dying because, in America, some brave politicians/citizens are standing up to FORCE by TOTALITARIAN/socialist collectives. Next stop...BIG GOVERNMENT. BIG GOVERNMENT IS CRONY SOCIALISM.
Wake up, Pat. Pat, wake up.
———when I can print them locally——
How about “when I can print them at home”
There is a long article in the current Forbes about a printer company producing a machine for $2,200 that has an online library of 10,000 down loadable things. The object is down loaded to the printer and produced. The library is open source and can be added to by posters putting up their effort for all.
After Christmas, in the winter doldrums, I think I will study the piece and the various web libraries and maybe buy to play with. I might even get rich by selling my replications on ebay!
Star Trek was prescient....... the day of the replicator, the personal replicator is here.
Which issue exactly?
I looked at the Forbes website but couldn’t find it.
It turns out to be in a Forbes Special Edition....... Get Rich From Obama .....Investment Guide 2013. In the Technology, Manufacturing section. The article is titled Infinite Factory by Hank Greenberg. it is the most recent edition I have.
This is a recent companion article with a video. The article referenced above concerned the company Makerbot but I can’t find it on line. The online library is caled thingaverse and actually contains 25,000 objects to make on the Makerbot replicators
Thanks. I’ll look for it in the bookstore this weekend.
Econ 101: This is not true. The cost of a manufactured good can be broken down into:
For the lion share of products the cost of labor is between 5 and 10 percent.
So even if labor was free the cost would not be "astronomically" reduced as some think.