inflexible unions cost jobs

inflexible unions cost jobs

Posted in the Minneapolis Forum

From A

Ankeny, IA

#1 Aug 16, 2013
In order for markets to work, wages and prices must be free to adjust so that supply and demand can be brought into balance.

Unions prevent wages from adjusting to decreases in demand or increases in the supply of competition. The result is entire businesses fail.

Let me explain. Assume the cost of your union labor is $15 per hour. Also assume that your sales are $25 per hour. This yields a profit of $10 per hour. Things are looking good for the capitalist pigs.

But assume that competition from upstarts such as Mrs. Fields, Dolly Madison or Orville Redenbacher cut into sales. Assume sales fall as a result of this new competition and are no longer $25 per hour. Assume sales now only are $13 per hour.

If sales now are $13 per hour and union labor costs are inflexibly stuck at $15 per hour, we now are losing $2 every hour we remain open. Herein is revealed the problem. If sales fall, if margins decline, if any change turns a profit into a loss, the end is near.

No one can continue to lose money. Failure to profit is not an option for you, or for anyone.
The result is the company must shut down. It must close its doors, and all those workers who were employed yesterday are unemployed today.

There was an alternative, however, and a very good one. What if the workers had accepted a pay cut? What if labor costs could be cut to $11 per hour?

Now a sales level of $13 per hour, with a wage rate of $11 per hour, yields us a profit of $2 per hour. The company remains in business, and the workers remain employed. Is this not a better result?

Absolutely. A job at $11 per hour is better than no job at all.

Since: Sep 11

Rogers, MN

#4 Aug 16, 2013
Some 5000 stubborn, greedy, selfish, members of the bakers union destroyed the livelihoods of 18,500 of their union brothers. That's some solidarity there by golly. Go unions!

Since: Jul 10

Minneapolis, MN

#5 Aug 16, 2013
Also, when unions become mandatory things to join. Then the person is really working for TWO bosses - the company and the union.
The problem with unions is that if they are mandatory groups to join. Then they do not fight as hard for the worker. They are more fighting for the union's share of the 'pie' aka cash made by the company/county/etc.....
Thin Skinned Obama

Minneapolis, MN

#11 Aug 17, 2013
A friend is a Union meber and says lately his Union means nothing because of low cost Mexican labor. Mexicans do the work for 1/2 the cost.

“GiveMe Liberty or GiveMe Death”

Since: Jun 13

Land of Liberty

#14 Aug 17, 2013
Thin Skinned Obama wrote:
A friend is a Union meber and says lately his Union means nothing because of low cost Mexican labor. Mexicans do the work for 1/2 the cost.
So true,

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