I think union wages are not the biggest issue for companies. Union rules are far more of an issue. Companies can handle higher wages pretty easily. But labor flexibility is far more important. Most companies create a process and then change it, evolve it, shrink it or grow it. If unions did not stand in the way, or slow down the modern adaptation of a company, I would think many companies would not mind the higher salaries.
I just retired as a CEO of a public company. And I can tell you that costs are a simple issue that is easily handled. There are input costs, labor costs, energy costs, communication costs, administration and healthcare costs. These go up and down all the time. And we handle them. But what we spend most of our time doing, is adapting to the market place to bring in more revenue. We compete to stay relevant. And we need to change constantly. Dr. Edward Deming pointed out that companies change or die.
Unions want to control change. They want to get paid to accept change. And they want a voice in the change. This puts a CEO at a distinct disadvantage from a CEO that can evolve more quickly. If steel costs go up, a CEO deals with it. If Labor costs go up, a CEO deals with it. But if a CEO can’t adapt to the market. The CEO goes where he can adapt. Or the company slowly dies.
Walker is lining up for a big battle with the EPA here in Wisconsin next as he’s correctly pointed out that government regulation is a real job strangler here in the State.
Checking the list off one at a time.