Labor On

There is an element of poignancy surrounding this holiday weekend. Labor Day was first celebrated as a national holiday in 1894 after President Grover Cleveland signed legislation designating the first Monday of September as “dedicated to the social and economic achievements of American workers.” The painful reality is that roughly 20% of our nation’s workforce is either unemployed or working part-time while seeking full-time employment. One out of 5 of our country’s workers are suffering from this devastating economy. An impact so grave and massive must radiate throughout the economy and negatively influence the lives and livelihoods of most of our citizens. Thus, even many enterprises that haven’t been directly impacted by the sputtering economy are experiencing lost business and revenues because of the huge number of workers who are not receiving their typical pay check.

Given the agenda of the Obama administration and the historic taxation and spending policies of Congress, maybe we should rename this day as Former Labor Day. A nation that works will prosper and a country “at ease” will falter. The regulatory and taxation environments in the United States are the antithesis of good policy for economic growth and by extension, job opportunities for willing workers. When everyone is working, the nation prospers. Oh yes, there are always pockets of the economy that may be in transition or decline, but active enterprise encourages innovation and development. When the government over-controls and over-regulates, the pace of the nation’s economy slows as manufacturers, distributors and retailers attempt to discern the impact of the government’s latest intervention. Rules, laws and regulations have direct influences on the producing sector, but many economists fail to detect or acknowledge the indirect aspects …. uncertainty, apprehension and frustration which, in turn, lead to a tentative approach.

It has often been stated that Government does not produce anything. I disagree. Government does produce chaos and confusion. In my rare moments of clarity I have wondered how a nation so rich, so vibrant and so innovative could allow its wealth-creation mechanism to be controlled by elected career politicians and appointed bureaucrats. They are not creators or generators of wealth and value. They are parasitic blood-sucking consumers of the labor and inspiration of others. In Atlas Shrugged the producers withdraw from the distorted market created by the insatiable government and its sycophantic corporate enablers. Scarily, we find ourselves in a similar environment today.

The ideological underpinnings of the United States’ labor movement are rooted in the “proletarian rights” movement of the late 19^th and early 20^th Centuries. These socialist/communist efforts capitalized on the glaring inequities in labor-management encounters. Local disputes were expanded to company-wide and sector-wide negotiating (demanding) units. As a result, entire sectors of the economy could be brought to a screeching halt because of some real or imaginary slight or rule violation in some plant in Peoria. The powerless worker of the 19^th Century has become the surly tail that wags the dog.

Although the increased power of organized labor has had a powerful influence in the private sector, the greatest and most ominous element is in the public sector of the United States. As the private enterprise union membership has been dwindling in market share throughout the country because of many corporations moving offshore or relying on hi-tech automation systems to control costs and enhance productivity, the public sector organizing has gained momentum. Even though fewer than one in six workers in the nation belong to either a private or public sector union or bargaining unit, their power and potential far exceed their true numerical proportion.

Their real power is based on the fact that they are organized and generally sympathetic with one another plus they have penetrated critical sectors of the economy and the government. If unions were dogs, I would compare them to Yorkies……with rabies. Certainly, organized labor has in many respects benefited workers and the nation by assuring safety and reasonable wages in the workplace. Too much of a good thing can topple the pyramid of prosperity, however as corporations are forced to downsize or move, and governments are trapped by unreasonable contractual commitments. The never-ending gravy train has run out of gravy.

Finally, this little Labor Day diatribe will conclude with my puzzled query. This is the United States of America….a nation founded on liberty and individual rights….how is it that so many of our work force have become dedicated to the collective control of our country while risking everything? At the risk of appearing calloused or insensitive, I suggest that those among you who are absolutely committed to your union under any and all circumstances are not worthy of liberty. True freedom requires responsibility, and anyone who voluntarily transfers your freedom to a union or the government deserves to be perpetually shackled in serfdom to your chosen master….and it seems that you are.

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UofA vs. EPA

In these perilous times for our nation and several of our states and communities, it seems as if new fissure points are deepening in our civil structure. For several decades union membership in the private sector has been declining as our heavy manufacturing industries have relocated to right-to-work states, moved offshore or upgraded to highly automated facilities. The labor unions, thirsting for the constant inflow of dues money, have shifted their focus toward retail establishments, service jobs and public sector employees to maintain their accustomed level of financial and political viability. Overall union membership continues to decline as a percentage of the population, but the militant unionization of the public sector has dramatically altered the dynamics of labor-management relations. Public sector employees negotiate their contracts with unelected supervisors and elected officials who can claim to be neutral even though many of them receive campaign contributions and union-based volunteers at election time.

Because of the dwindling private sector union base, the public sector organization efforts have become more robust and intense. This development, I believe, will become a self-defeating movement for public sector labor and for taxpayer-supported government. By unionizing public sector employees at a dizzying rate, unions have placed the civil service rules of the past century on steroids regarding the government’s ability to remove ineffective or corrupt workers. Many union contracts have constructed various hurdles and barriers to protect the unworthy employee, thereby requiring that others be hired to do the work that doesn’t get completed.

In addition, by funneling millions of dollars of campaign contributions and thousands of campaign “volunteers” into the election efforts of liberals and progressives (primarily), the unions are contributors toward the massive growth of government that so many of them are lusting for. Growing governments yield exploding bureaucracies that exceed the abilities of the political class or the people to control them. The union, nevertheless, is somewhat satiated because of their increasing rolls in the public sector even though their numbers for growth appear to lag behind the private sector losses. So, how many “good-paying middle class jobs” has an overzealous Environmental Protection Agency cost our nation, our local communities….and the unions who organized the laborers? How many union jobs have nit-picking bureaucracies from the entire spectrum of government, controlling departments lost because of their senseless oversight policies? While union leaders and their fundraisers scamper to expand their reach in the public sector, they continue to place private sector jobs at risk. Union members should ask their elitist, socialist-leaning organizers why they insist on killing or maiming hefty private sector jobs so they can squeeze more money for their political cronies.

Private sector workers must realize that their “leaders” are not looking out for them or their welfare. They are merely exchanging public and service dues-paying members for the losers who built their organizations. Every time some big-government rule from the bureaucracy impedes a private sector employer from growing or functioning well, a laid-off or ‘pink-slipped” union employee may be the ultimate recipient of the Big Brother overreach. Big government increases the tax burden for private sector union workers and places their jobs in jeopardy by over-regulating, over-licensing and bureaucratic foot dragging. Big Government’s inherent hostility toward the private sector has undermined its capacity for growth and prosperity…thus diminishing good job opportunities for the workforce.

It should be noted that a labor union wields the most power when it represents skilled workers in a labor-shortage environment. The union leadership’s efforts to organize service and retail workers will fill their financial coffers, but will not result in significant gains for the members. Maids, clerks and wait staff can be hired off the street after a couple of day’s work stoppage. It is more difficult to hire machinists and mechanics because so few people possess the requisite skill set. It seems, therefore, the modern movement to bolster union membership in the public sector could be the saving grace for a dwindling private sector group. The unions may be signing their own death knell with their new emphasis. Private sector workers may finally get a clue, and ignore or dismiss the leaders who have undermined them by promoting big government and massive bureaucracies. The public, the taxpayers, the people may withdraw or resist the expansionist efforts of the unions and big-government advocates.  The basket of tolerance can hold only so many eggs of higher taxes, government indebtedness and bureaucratic meddling before the eggs begin to break. The people’s discontent may rise to the point that the entire public sector will be either radically restructured or become so powerful that there will be no one remaining to pay the freight. Either way, the Marxist-leaning unionist’s strategy may backfire….as it should.

Comment:   cearlwriting@hotmail.com      or     www.littlestuff-minoosha.blogspot.com

Liberty's Laggards

A recent article in “MailOnline” the internet version of the Daily Mail from the United Kingdom provided an individual freedom analysis for the 50 states of the United States. There’s some irony in the fact that a British paper sought to examine liberty in the former colonies. Clearly when describing liberty within states there are subjective parameters at work. The 50 “laboratories for democracy” have considerable leeway in determining how their states will be organized and function. The three largest areas of limitation for them within the federal Constitution are the mandated federal obligations as given in the enumerated powers, the prohibitions for curtailing inalienable rights, and the states must be democratic republics. If the fifty states take their freedoms seriously, there are multiple opportunities to experiment with laws and rulemaking to generate environments for prosperity and liberty.

Alas, too many of our formerly-sovereign states have followed the lead of Big Brother by implementing restrictive regulatory structures and punitive tax policies. Where they might have flourished as laboratories of freedom and opportunity, they, instead, overregulated, overtaxed and overwhelmed their citizens with obstacles and constraints. The “MailOnline” piece by Mark Duell lists New York and California as the worst offenders in the limitation of individual freedom. These are two of the largest states in the union…rich in resources, talent and population. It defies logic for states so richly endowed to squander their natural wealth for the false dream of centralized government. Another state that Duell has categorized as “less free” is my own native Ohio. As a candidate for statewide office in 2010, I drove across the entire state. It was clear to me how statism impacts the economic environment of the state. Certainly there were pockets of prosperity, but most of my beloved Buckeye state was staggered by the loss of industry…and the tangential businesses, suppliers and service companies that thrive when the industries are doing well.

The federal government and the state regulatory apparatus combined to construct high hurdles and elongated approval processes for plants to upgrade. In addition the labor union situation in Ohio has strangled attempts to innovate and create a competitive cost profile. Big government, lousy business opportunities and excessive union power are a troika for job killing. A corollary indicator of the relative freedom of the respective states is the apportionment of congressional seats following the census. One of the freer states, Texas, picks up 4 additional congress critters while New York and Ohio each lose two seats…and the corresponding national influence. Florida with its friendly atmosphere for freedom will gain 2 seats while Illinois, Iowa, Massachusetts, Michigan, New Jersey and Pennsylvania will have one fewer congressperson in 2012. Missouri also loses one seat as does Louisiana…probably an after effect of Katrina. Indeed, there is a very high correlation between a state’s level of freedom and its growth and prosperity. You might ask why California is not on the “loser list” if it is rated as “less free.” The census counts people not citizens, and the continuing migration of non-citizens to California has kept the population large enough to offset the out migration of business, jobs and citizens.

Freedom and prosperity are linked. Where the people have the freedom to function without an oppressive regulatory environment or restrictive workplace rules, they will capitalize and maximize their opportunity. Lower taxes will encourage businesses to reinvest in growth and technology. Lower taxes and spending by state governments will encourage commerce and industry. Sadly, states, cities or any other government entity cannot resist the urge to grow and control. Only one of the original thirteen states was considered to be relatively free by Duell’s analysis: New Hampshire, the state with the stirring “Live Free or Die” motto. The other two top-ranked states were South Dakota and Indiana.

As a former researcher, I am aware that correlation does NOT confirm causality. Common sense suggests, however, that states that are growing may be doing so because of lower taxes, fewer union complications and sensible regulatory environments. Those liberty-lagging laboratories of democracy who have selected more government, more regulation and higher taxes as their modus operandi are faltering … staggering. As their businesses close or move, their tax bases dwindle and their social network costs increase. It’s a downward spiral that can be corrected by choosing liberty. Some experiments fail and others succeed. The intelligent observer can discern the difference and respond accordingly. Liberty, freedom always wins. Tyranny is a loser.

Comment:   cearlwriting@hotmail.com       or    www.littlestuff-minoosha.blogspot.com

Tail, Meet Dog.

The late nineteenth and the twentieth century was a period of amazing global economic growth. Resources were discovered and new industries blossomed as the world, and particularly the United States, became powerful industrial enterprises. The drilling of the oil well at Titusville, Pennsylvania, added a new dimension to the coal-fired industrial movement already in progress. Mining, manufacturing, drilling, smelting, assembly and transportation all experienced phenomenal growth. New workers migrated from the farms and small villages of America to seek jobs in the new industrial environment. Although the jobs were plentiful as the economy accelerated, some of the titans of industry abused their workers as they sought to capitalize on the growth and secure near-monopolistic market share.

If you are familiar with the Tennessee Ernie Ford song, “Sixteen Tons,” you probably recall the line “and I owe my soul to the company store.” Some manufacturing and mining companies constructed entire villages complete with stores nearby the worksite. These developments were constructed for the hordes of workers who arrived from the towns and farms of rural America. A worker could receive staples and other items from the store, and his purchases would be deducted from his weekly paycheck. Some of the “company stores” charged exorbitant prices, and the workers would find themselves in debt to the store…a position of virtual bondage.

Workplace safety was a huge issue in the early days of the United States’ economic expansion. The old technologies and some of the newer ones were extremely dangerous, and workers would suffer debilitating injuries or even die. Though the owners of the mining and industrial appear to be insensitive and calloused, their recognition of the dangers associated with their work places may have been somewhat blunted by the steady stream of new workers arriving from offshore and rural America. There were some workers or their advocates who rightly recognized that many of the working conditions in industrial America were deplorable and dangerous. As a result, they sought to organize the workers to achieve safer conditions at the worksites and better contracts for the employees. There are several nuanced elements of the early labor movement in the United States that I have left out of this little flashback…such as some of the international unions’ affiliations with the socialists or communists. My purpose was to provide a thumbnail sketch of the environment when industrial unionization began.

Zoom forward to the present time. For the most part unionization of the industrial and extraction industries has been successful. Conditions have dramatically improved as technology and contracts have provided safer, more humane worksites and conditions. In addition the unionization movement has spread to other sectors of the national scene such as retail workers, the craft trades and government employees. The unions’ efforts have been so successful and pervasive that it is difficult to identify a sector of the national economy that has not been impacted by them. The power of the labor movement has been assisted by various states allowing the “closed shop” rules that make it mandatory for an employee to join the union at a given company. The forced membership has generated huge amounts of money to underwrite full-time union officers and employees and provides vast sums for political activities to assure that union-friendly politicians are elected to office in local, state and national positions.

Just like a government program that seeks to over regulate within its sphere after its original mandate has been achieved, the labor movement has morphed beyond its initial purpose. Nonsensical workplace rules, restrictive prevailing wage laws and massive political power have transformed the union movement from that which protects the abused into one which often is the abuser. The public good and the community’s, state’s and nation’s best interests have been thrust aside to protect the greedy interests of the “working people.” Incompetent or slothful employees are protected by the system while energetic and creative ones are discouraged. As a result, the balance has shifted from insensitive industrial barons to greedy, power hungry union bosses and capos whose primary interest is their own self-interest. They do not serve the nation, and consequently they do not serve their membership. If the nation falters or fails, so do the “workers.” The bosses will slink off to their island retreats, smoke their high-priced stogies and enjoy the good life. Our country, our people and our children will be left holding the bag. The new dangerous alliance in America is the government, big weak-willed corporations, and huge immoral unions. It is a mixture and a recipe for disaster.

Comment:  cearlwriting@hotmail.com     or   www.littlestuff-minoosha.blogspot.co     

Shirts and Skins

Who has the “skin in the game?” That question defines the stakeholders in any confrontation or negotiation. It is the greatest problem or issue with public sector bargaining. “Skin’ is also germane for huge corporations and their labor negotiating processes. Does the negotiator or arbitrator who represents the government or the company have a stake in the outcome? A reasonable bargaining process must involve two parties who can either gain or lose in order for an equitable solution that does not drastically favor one side more than the other.

Although I have problems with national and international labor organizations, I am not opposed to local organizing per se. If workers are dissatisfied with their conditions or pay, they inherently and constitutionally have the right to organize (1^st Amendment, peaceable assembly). If their grievances are legitimate, and management/ownership fears losing their knowledge, experience and expertise, then they’ll work out a solution. On the other hand, management may conclude that they can replace the entire workforce with others and therefore fire all of the former employees. In this scenario both parties have “skin in the game.” The owners or managers want to continue production at a profitable level while the workers wish to retain their jobs but under improved circumstances.

There are private sector negotiations where the corporate leadership assumes the same role as do public sector officials. When bargaining takes place in huge corporate environments, the representatives for the company are employees or consultants who have limited personal stakes in the outcome. Just like their political brethren, they are more likely to “give away the candy store” in order to maintain peace and goodwill. Except for the highly skilled trades, there is no obvious reason for large corporations or government entities to succumb to the demands of the unions. Some negotiators, however, have minimal financial or emotional investment in the company or governmental entity, and thus, seek the fastest means for resolving the issues. Other negotiators may have the public interest as their paramount concern, but could be undermined by politicians who would rather “cave.” The corporate officers who may be engaged in the negotiating process are aware that if they fail to protect the interests of the company, they’ll receive their golden parachute and surface with another corporation or retire to Aruba. The people responsible for the political bargaining process trust that their citizens will have short memories. They believe that irresponsible concessions are less damaging for them politically than a strike, shutdown or slowdown might be.

While collective bargaining for public employees does have potential for fiscal abuse, the more onerous element is the “binding arbitration” requirement. Arbitrators are people too. They want to be liked. They want to be employed. If negotiations stall and either side requests arbitration, then the process calls for both sides to agree on an arbitrator. The arbitrator goes through a “fact finding” process and makes a determination that is binding for both sides. The arbitrator is generally limited to the two proposals submitted by the competing sides. It becomes an “either or” situation.  Again, the only “skin” in the game for the arbitrator is the desire to be gainfully employed to arbitrate a future dispute. The arbitrator’s motives may be pure, but self-interest can be an unintended persuader.

Who does have the “skin in the game?” Clearly for public sector bargaining the taxpayers are the ones whose well-being should be weighed against the benefits for the union members. The current mess that exists for so many states and local governments came about because concern for the taxpayers was a secondary consideration. The political class and the arbitrators (when used) were more focused on avoiding discord and strife than they were as stewards of the public treasury. Consequently, benefit and wage packages have grown to the point that the state and local governments are in perilous financial circumstances. Understandably, public employees become irate when efforts are made to bring their packages into sync with financial reality. As the public employees grouse and protest, the taxpayers become more aggravated and hostile.  The tension will continue to build all across the nation as those who do have “skin in the game” draw their lines in the sand in a hostile environment.

In Ohio as in most states, our present circumstances can be laid at the feet of previous legislators who lacked the courage and the wisdom to say “no.” They passed the legislation that gave public sector unions a stranglehold on state and local budgets. No such “negotiated contract rights” exist at the federal level. Former legislatures took the easy route by granting extraordinary powers to public sector unions, and now their lousy decisions have caused the fiscal situations to reach critical mass. It’s the same old story. Our state and federal elected officials have no real skin in the game, and the taxpayers lose their shirts.

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