A friend suggested this story by Bill Moyers about the economic state of the Republic.
In connection with this I wonder:
It seems that no one discusses the question:
What did you think would happen when the rest of the world started to catch up with us?
That being said it does seem that the thing to do is recognize that we have an income disparity problem and decide how to deal with it.
I do not want to just take the money away from the well off and send it to the poor. That will make one side mad and undermine the confidence of the other.
I, for one, want to unionize the service workers industry, starting with walmart.
That could achieve the same result as the previous without the bad sideeffects.
Sunday, November 7, 2010
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A few months ago there was a great post on this blog about “Stasis Fallacy”. That is, the failure to search for and identify the consequences of a change before you make or advocate the change. I will use that concept to examine the suggestion that we should unionize Wal-Mart.
ReplyDeleteI assume that the purpose of unionizing is to get higher wages and more benefits through collective bargaining – what else could it be? If Wal-Mart’s labor cost increase then the cost of goods sold by Wal-Mart MUST increase. I know, some think that Wal-Mart and all of those nasty businesses have a money bin like Scrooge McDuck where they go and wallow in the money from their excessive profits ever day, and they will be forced to simply absorb the increased labor cost, but it simply does not work that way. Increased labor cost will cause a change.
Now let’s assume that every Wal-Mart employee services 100 customers. I made that number up because I have no idea what the real ratio of employees to customers is, but 100 seems to be a reasonable discussion figure. So here is my concern. If I increase wages and benefits for ONE Wal-Mart employee I increase the cost of living for 100 Wal-Mart customers. How can that possibly mesh with the concept of “Social Justice”?
One last concern and perhaps it is only semantics. I have no problem with letting nature take its course and if employees unionize then they unionize. But, the phrase “I want to unionize the service industry” suggests a desire for a government mandate to unionize. That would scare me.
Good post. People shouldn't work at Walmart if it is not providing the wage they need. If Walmart can't find anybody to work at the low-prices they are charging, then they will increase the wages to attract the workers and raise the prices appropriately. The government should not intrude unless Walmart is illegally supressing wages in their sector or hiring children or forcing indentured servitude...
ReplyDelete"There doesn't seem to be anybody in the White House who's got any idea what it's like to lie awake at night worried about money and worried about things slipping away. They're all intellectually smart. They've got their numbers. But they don't feel any of it, and I think people sense that."
ReplyDelete-- Gov. Phil Bredesen (D-TN) to the Washington Post.
How do we get from: "I, for one, would like" ... to "government coercion"? my my
ReplyDeleteI will do a more extensive post on unionizing.
Here I will only note that none of these comments dealt with the fundamental question:
What did you think would happen when the rest of the world started to catch up with us?
OK, no government mandate to unionize just a wish that they would. I will wish that they will not.
ReplyDeleteAs for the world catching up with us - It is survival of the fittest on a world stage. We have not done as well as we could have. It did not have to be that way and it does not have to stay that way.
You are right it is competition on the world stage. Is our best competitive chance to continue the drift toward a division of our people into the very rich and very poor? How do you rejuvenate the middle class?
ReplyDeleteTo follow David’s lead and say that if what Walmart pays is not enough for them, then they shouldn’t work there is just the modern version of “Let them eat cake.” If you want to share Marie Antoinette’s fate, then the best way to get there is to look down your nose at the working people of America and claim that they do not deserve a living wage for working life.
ReplyDeleteWe can have compassion for the downtrodden without destroying the fabric of our economy. Unions had there place in the 30's, but now they are a drag on commerce and hold company's like GM and Ford to barely surviving (or not surviving without a government bailout). I think Obama just views GM as highpaying welfare system. We should have let GM fail and reorganize without the unions. Let them eat cake. What's wrong with cake?
ReplyDeleteDid you read about the legislation coming up in the lameduck congress concerning companies with multistate operations having to give uniform salaries across state lines. This is crazy and will really put a knife in interstate commerce. You can't pay someone in California the same wage as in idaho. It's just more liberal nonsense.
ReplyDeleteIs income disparity really a bad thing? Take this scenario. My compeditor and I both sell widgets for $1 each. I run a very efficient operation and can afford to pay my widget makers $15/hour. My competitor’s operation is very inefficient and he can only afford to pay his widget makers $10/hour. So fine! My competitor’s employees become aware of the disparity, come to work for me, and they are all making $15/hour. Problem solved.
ReplyDeleteDavid 9PM, 20101108
ReplyDeleteI never said anything about "compassion". Opposition to your point of view is not necessarily emotional.
I'm talking about fairness and national self interest.
Henry Ford didn't pay his workers good wages because he was compassionate. He did it because they would then be able to buy one of his cars.
Tom 20101109 6:34
ReplyDeleteA. Yes, extreme income disparity in the country is a bad thing.
If 20% of the population has 80% of the income then one of two things will follow: a) some sort of democratic socialism or b) the end of democracy.
B. Suppose your scenario continues like this:
Your competitor goes to Guatemala hires twice as many people as you have who are only half as efficient. He pays them $1.50 so his wage costs are 20% of yours and he sells his widgets for 50 cents. Who do your employees go to work for when you go under?