One of the things that I am not thrilled about with the Obama administration is how tightly the democrats are bound to the labor unions. One of the first questions I asked when I was a kid learning about the unions was, "Wouldn't that make fewer jobs and hurt entrepreneurs?" The answer to that question, from my teacher, was that in the early 20th century companies treated their workers awfully, and that there was little to no choice in the types of companies you could choose to work for and that someone needed to stand up to the big companies. I agreed because I was 13 or whatever.
Now, however, I have a different opinion, first of all, it isn't the early 20th century any more, and we do have government regulations about working conditions. Having worked in many different industries, I have even for a time had my own company, my current opinion is somewhat complicated, but I can enumerate.
First, that labor unions, in their current configuration, demolish job creation, and inspire automation. This has the obvious effect on society. The current configuration of a union is usually to pay dues to a larger union that hires labor lawyers who will sue a single company to get whatever for the specific employees of the given company. The problem with this part is that the benefits, occasionally help all workers, but typically only help the union workers at a specific location. This creates a conflict of interest within the union. Unions usually claim that they are out for all of the workers in the world, but realistically, they are out for their fellow workers at a specific location. So certain companies or sectors will suffer under high wages for relatively low productivity, especially since the unions frequently block adoption of technological innovations that would make companies more efficient, I.E. GM, all airlines, medicine, etc...
If unions were organizations like the EFF that instead of picking specific issues at specific companies to go after, but instead were trying to better the lot of all workers everywhere, and get the government at the state and federal levels to improve protections and conditions for laborers, then perhaps I could get behind it. But to me they appear to be self-serving organizations who exist only to enrich themselves.
It limits companies to a particular definition of what a company is and how it should be organized. One of the things that will keep the world in recession at this time is protectionism. Unions have been notorious protectionists. Not just in the United States, but everywhere. For some reason they seem to think that if you make stuff, you don't really need for anyone outside of your region or country to buy it, or perhaps they think that it is OK for them to make stuff and sell it abroad, but the consumers in their market should only buy from them. This sort of double standard is insane and dangerous with the current scale of the world's economies.
If labor had its way, there would be 2 percent growth continuously in every industry all around the world, basically matching the increase in the population, jobs would be inherited from parent to child, and everyone would have a job, but no one would have an opportunity to really change things.
If my company has half workers in another country, and another half temporary or contract workers in the US, and I am an unprofitable startup, how in the world am I going to pay or negotiate contracts with all of them. Why would I want to, as the head of the company I am just trying to make a profit, and make sure everyone keeps their job. If I had to pay full benefits to everyone, domestic or foreign, I would never get my company off the ground. What is more likely, I wouldn't even try, that potential entrepreneur would just fold into some other company pressing widgets and never try out his fantastic invention, because the startup costs would be too high in an over-regulated environment.
People are freaking out right now about the economy, but really over-regulation is not the answer. We have gotten where we are because of the relative freedom of our markets, and the great rewards of taking risks and having fabulous success. Sure I am frustrated that a handful of individuals caused good, solid companies to fail and basically undermined the entire system. But you can't have the fabulous standard of living that most of us enjoy without that risk.
There are things we can do short of socializing the system, I think some degree of moderation is necessary and I am not really seeing that from the initial overtures from the Obama administration. I'd like to see a bit more pragmatism about labor, and the oversight of the industry in general. One simple thing, instead of punishing banks by limiting CEO pay and whatnot, which is just plain stupid, would be to incentivize the regulators the same way. When they discover a 162 billion dollar fraud ring, give them a piece of that, say 1%. You'd see some of the best and brightest getting into the regulatory circle. The best part is that you would have big business watching the regulators, to make sure they didn't trump up charges, and on the other side you'd have the regulators watching big business. It sounds like a stalemate to me, which is what you really want to have.
I think a return to big labor, protectionism, and limiting the entrepreneurial environment is a huge mistake that our children will complain about more than inflation or deflation. The ability to have a big idea, and do whatever you can to nurture that idea to become a world changing phenomenon is too important to get wrong. Without that, I fear for not just the U.S., I fear for humanity.
There are some big problems out there, and the best minds need to see the reward for solving those problems. Having a living wage, or guaranteeing pension, those things are much smaller than that. If there is a problem with the wages, the state and federal government should fix that, if there is a problem with hours, the government should fix that, if there are toxic working conditions, the government should fix that. Labor should turn their guns away from businesses, and lobby congress for the problems in the labor market. If they feel that people should only work 37.5 hours, get a law passed, don't pester the poor business owner about that. If you get everyone involved in voting on this stuff, it is much less likely to happen once it is put under full scrutiny.
The reality of life is that everyone should not get paid the same amount, everyone should not have the same standard of living, and all workers are not equal. It goes back to what all of our parents told us. Life is not fair, we shouldn't expect it to be. If you don't like what your company is doing, leave and start your own company, make your own choices. That is what it means to have free will. That is why, allegedly, we go around the world fighting, to allow people to make their own choices. We shouldn't blow up someone because they are limiting the choices of their people, while doing the same thing at home. That would be just as hypocritical as the previous administration.
