insomnomaniac

Jacques Chirac in American Drag

Quick:
What do GM, France and Albany have in common?

Answer:
UNIONS ARE RUINING THEM.

At first glance, they seem to have little in common. But the riots in France over labor reform, the slow-motion suicide of General Motors, and the continuing decline of the New York economy all share one defining trait: entrenched and unchangeable union power.

These columns have always favored the right to collectively bargain, and any private company that allows a union to organize its workers deserves what it gets. But that doesn't mean we should fail to appreciate the consequences when unions become entrenched inside any organization. On the evidence throughout business and politics today, unions do not provide individual job or income security. On the contrary, they undermine security by contributing to broader business and economic decline.

In other words: United we fall.

The current French protests are in response to a modest change that would allow employers to fire people under age 26 more easily. So entrenched has the politics of union entitlement become in France that even at the onset of their careers these young protesters are demanding security over opportunity. In the global economy, this means they will end up with less of both.

Is it me, or is it a tad arrogant for kids practically fresh out of diapers to be demanding lifetime job security? How dense do you have to be not to realize that your job won't be secure if your employer ceases to exist because your demands have run him into the ground?

Speaking of being run into the ground by unions:

Here in the U.S., the same burden is slowly crippling New York, once a bulwark of American industry. Power in the state capital of Albany is shared by Republicans and Democrats. But both parties bow before the public-sector unions, especially the teachers, and the health-care workers led by perhaps the most powerful man in the state, Dennis Rivera.

Thanks to his political clout, New York's Medicaid costs are higher than those of Texas and Florida combined; a health-care insurance premium for a young family of four is roughly six times what it is across the border in Connecticut; and high-deductible health-savings accounts that can help the self-employed afford insurance can't even be offered in the state. New York is also a rare state that actually taxes private health insurance, to the tune of about $2.4 billion a year.

Another union-driven business cost is workers' compensation, and in New York the average cost per claim is second highest in the nation (after Louisiana) and 72% higher than the national average. Governor George Pataki has proposed a reform that would lower costs while actually raising the average payout for the truly disabled, but he's run up against a French-like union roadblock in the legislature.

I think if I had to pay taxes on our health insurance, it would be reason enough to move to a different state. There's a neat trick. Tax people twice: Once to pay for people with no private insurance, and once to pay for the private insurance you do have. What's next? Public flogging for having a job that isn't in a union shop? New York voters put up with this shit?

And what about GM? How do they fit into all this?

In retrospect, GM management should have provoked a union showdown. Yet only a very brave CEO would have been willing to risk a potentially catastrophic strike on his watch for the sake of making the company more competitive after he retired. In any case, would the United Auto Workers really have budged? In 1998, young executive and future CEO Rick Wagoner endured a 54-day UAW wildcat strike at two plants in Flint, Michigan, after GM had tried to change some production rules. The strike shut down most GM production in North America and cost the company some $2 billion. In the end GM caved and the UAW escaped, having made virtually no concessions.

Even now at auto-parts maker Delphi -- which is already in Chapter 11 -- the UAW is declaring it will take a strike that could destroy both Delphi and GM rather than agree to Delphi's proposed job cuts and work changes. As in France and New York, these union leaders would rather sink the company than make concessions that would reduce their own power

We recount all this because, even amid GM's decline and France's economic turmoil, most of America's liberal elites refuse to draw the right lesson. They cling to the belief that if only the Democrats can retake Congress, or the union movement can once again organize more of the American labor force, the old economy of union-backed job security and egalité will return. Or, worse, they propose seceding from global competition via protectionism. It is all a delusion. Down that road lies France -- a nice place to vacation, but you wouldn't want to work there.

Amen to that!

What angers me most is that the unions are still able to pass themselves off as representing "the little guy," the otherwise disenfranchised worker against "the man" or the "management."

I worked in a union shop--in a restaurant in NYC--and I have to tell you, I never felt so powerless in all my working life. I'd never do it again. I am not livestock, I am not a moron. I can speak for myself thank you very much, with my feet if necessary. These days, the way they are currently organized and run, unions are nothing more than a legalized mafia. Perhaps unions once had a place when the federal government did its job stayed out of labor affairs altogether. But now that we have OSHA and all kinds of other laws and regulations on the books about how employers may contract with and treat their workers, unions seem largely obsolete. But try saying that out loud in public, especially if you're in politics, and you're liable to end up dead. I would personally vote to have them outlawed, for the good of the nation if not for their members.

Posted by insomnomaniac at April 8, 2006 2:13 PM | TrackBack