Killing the goose that lays the golden egg is one of those old
fairy tales for children which has a heavy message that a lot of
adults should listen to. The labor unions which have driven the
makers of Twinkies into bankruptcy, potentially destroying 18,500
jobs, could have learned a lot from that old children’s fairy
tale.
Many people think of labor unions as organizations to benefit
workers, and think of employers who are opposed to unions as just
people who don’t want to pay their employees more money. But some
employers have made it a point to pay their employees more than the
union wages, just to keep them from joining a union.
Why would they do that, if it is just a question of not wanting
to pay union wages? The Twinkies bankruptcy is a classic example of
costs created by labor unions that are not confined to
paychecks.
The work rules imposed in union contracts required the company
that makes Twinkies, which also makes Wonder Bread, to deliver
these two products to stores in separate trucks. Moreover, truck
drivers were not allowed to load either of these products into
their trucks. And the people who did load Twinkies into trucks were
not allowed to load Wonder Bread, and vice versa.
All of this was obviously intended to create more jobs for the
unions’ members. But the needless additional costs that these
make-work rules created ended up driving the company into
bankruptcy, which can cost 18,500 jobs. The union is killing the
goose that laid the golden egg.
Not only are there reasons for employers to pay their workers
enough to keep them from joining unions, there are reasons why
workers in the private sector have increasingly voted against
joining unions. They have seen unions driving jobs away to
non-union competitors at home or driving them overseas, whether
with costly work rules or in other ways.
The old-time legendary labor leader John L. Lewis called so many
strikes in the coal mines that many people switched to using oil
instead, because they couldn’t depend on coal deliveries. A
professor of labor economics at the University of Chicago called
John L. Lewis “the world’s greatest oil salesman.”
There is no question that Lewis’ United Mine Workers Union
raised the pay and other benefits for coal miners. But the higher
costs of producing coal not only led many consumers to switch to
oil, these costs also led coal companies to substitute machinery
for labor, reducing the number of miners.
By the 1960s, many coal-mining towns were almost ghost towns.
But few people connected the dots back to the glory years of John
L. Lewis. The United Mine Workers Union did not kill the goose that
laid the golden eggs, but it created a situation where fewer of
those golden eggs reached the miners.
It was much the same story in the automobile industry and the
steel industry, where large pensions and costly work rules drove up
the prices of finished products and drove down the number of jobs.
There is a reason why there was a major decline in the proportion
of private sector employees who joined unions. It was not just the
number of union workers who ended up losing their jobs. Other
workers saw the handwriting on the wall and refused to join
unions.
There is also a reason why labor unions are flourishing among
people who work for government. No matter how much these public
sector unions drive up costs, government agencies do not go out of
business. They simply go back to the taxpayers for more money.
Consumers in the private sector have the option of buying
products and services from competing, non-union companies — from
Toyota instead of General Motors, for example, even though most
Toyotas sold in America are made in America. Consumers of other
products can buy things made in non-union factories overseas.
But government agencies are monopolies. You cannot get your
Social Security checks from anywhere except the Social Security
Administration or your driver’s license from anywhere but the
DMV.
Is it surprising that government employees have seen their pay
go up, even during the downturn, and their pensions rise to levels
undreamed of in the private sector? None of this will kill the
goose that lays the golden egg, so long as there are both current
taxpayers and future taxpayers to pay off debts passed on to
them.
COPYRIGHT 2012 CREATORS.COM
