Posts Tagged ‘unions’

Working in Wisconsin.

25. February 2011

Last week I had three tests and a mock trial tournament that I had to attend to, so I was somewhat out of the loop, merely breezing past most headlines in my RSS reader and largely skipping the first section of the Wall Street Journal, opting to go straight for the Money & Investing section. What I did manage to see was about Libya and Egypt for the most part. I had heard a little about what’s happening in Wisconsin from the guys at BoingBoing and while their coverage was rather tilted, it was still informative.

I took some time today to read up on what’s been going on. Wisconsin has no money for its public sector unions and the union members don’t want to lose their awesome benefit packages, which is understandable, as they have negotiated a rather sweet deal for themselves.

The following video was brought to my attention by the folks at Reason and created by the Heritage Foundation.

Now, obviously it’s slightly biased as it is from Heritage, but I think that the union supporters were given a reasonably fair chance to make their points. I noticed a few things in the videos that made me snicker, like the repeated references to Nazi Germany, the “Care about educators like they care for your children” signs and the prevailing “Us vs. The World” mentality exhibited by the union supporters and members.

The simple truth is this: this is both a union-busting bill and a budget bill. Of course the governor wants to bust the unions; they’re horribly inefficient, expensive and powerful and to boot, their ideology is largely homogeneous, which is a problem come election time. That they are inefficient and expensive are a large part of the budget problem, and to help bring the budget into line, things must be done to cut spending, which includes cutting union expenses.

The governor doesn’t want to cut spending on the unions because he hates the union members, he’s doing it because he can’t afford to do anything else. If he doesn’t cut union expenses, then he’ll have to cut from other budgets, and no one wants to see reduced budgets for state highway maintenance or education or whatever else state governments do that most people actually like. (As a libertarian, I have trouble naming any state programs that I wouldn’t mind seeing cut, either marginally or in their entirety. Use your imagination for this bit if you don’t mind.)

I just don’t see why teachers and postal workers and the like need collective bargaining. I really don’t understand it. If a teacher can’t teach, why should they keep their job? What is it about working for the government that changes the broadest requirements for keeping one’s job: being able to do that job? Teachers are, as they claim, some of the most important people in societies; the information they give to kids effectively shapes the future. They might ought to get more money for what they do, and if we privatized the system, I’d wager that they actually would. The trade-off, though, is that they would have to produce results that justify that extra money, and they might not have a job if they’re bad enough.

Wisconsin public-sector union employees, you’ve just got to hold your breath and get through the next few years.┬áThe perk of working for the government is increased job security. The trade-off is reduced compensation. You can’t have both, and you risk additional reductions in compensation when your employer, the government, is having a bad year or decade, as it were, just as private non-union employees do. But at least you don’t have to be as worried about being fired. Unfortunately for the taxpayers, I’m sure you’ll be back at your original compensation levels or higher when revenues go back up.

In Which I Take On a Protectionist.

10. November 2010

This video is an excellent starting point for the topic today. I wouldn’t ordinarily use South Park as a basis for a post, but I think this is fitting.:

You see, whenever I hear people complaining about outsourced jobs, this is all I can think about because it’s usually the only argument the protectionist can come up with. In my experience, I find the most adamant protectionists amongst union members and conservatives whose area of interest is primarily in social conservatism. After my long neglect of twitter, I started logging on and found one user in particular who seemed to fall into that latter category. Naturally, I couldn’t help myself and responded to one of her tweets touting protectionism. After a few rather content-less tweets, she finally produced this:

@alyxwi If you read my profile, it says I am anti-freetrade AGREEMENTS. I am not and never have been against free trade. But the ability to trade freely with anyone in the world and freetrade AGREEMENTS where neither side pays tariffs is not fair and the reason is because the only way it could be is if our economy was equal to the other country’s. We’ve been singing this song for decades. America invents a new technology and decides because of a freetrade agreement to have it manufactured in China. However, China copies the technology in short order and starts selling the product for half the price the inventor does. Of course, they can, because they have no R&D costs to recoup and their manufacturing costs are much lower because they are not paying their workers even half of what American workers make. So time goes on and the original company is driven out of business because of lagging sales…afterall, the same product can be bought for half the price of their model. Their employees all lose their jobs. Once that company goes out of business, the copying company raises its price based on other competitors’ prices.
Just look at the negative trade balances we have with China, Japan, Mexico and Canada. Compare them with the figures even 20 yrs ago. In fact, before NAFTA, we actually had a positive trade balance with Mexico…now the figures are a float in red ink. And to make it worse, the government wants to sign more free trade agreements with South America. We just built a plant in Brazil for GM with stimulus money they were given. We have to realize that the politicians on either side will not stop. They are being paid too well to go along with these programs. The only way we can stop the decline of jobs in this country is to Buy American and be stubborn about it. I’ll guarantee there will be plenty of items you will still need to buy from other countries because there are entire product lines that aren’t even made here anymore!
If you look at the history of America, you will find that its strength & prosperity came after WWII with the industrialization during and following the war.
Economic experts will tell you something different and that’s part of the problem. America was alot better off before experts. I view experts like I do educators…Those who can, do and those who can’t teach (or claim to be experts).

to which I responded with (approximately*) this:

@ConservativeGal Pseudoeconomics can be so alluring, can’t it? Your remarks betray you as a protectionist making a poor attempt at masking herself as a patriot (though coming off more as a nationalist than anything else). One cannot be pro-free trade sometimes, or pro-free trade only when it benefits one’s city/state/country. It is simply inconsistent and does not serve the country well as the basis for fiscal or monetary policy.

Protectionism is what the Fed is (only somewhat inadvertently) doing right now by devaluing the dollar and by extension attempting to boost exports in a way that only a weak dollar can. Too bad that’s going to manifest as skyrocketing inflation in a year or so when the credit markets loosen up. Inflation will kill as many, if not more, jobs as this recession has. And it’ll hit everyone and spur more government spending. That sure doesn’t sound like it’s a good thing.

Protectionism is not realizing that a growing global economy is the result of the growth of emerging market countries and that it helps Americans too. When the Chinese are making our cars more cheaply than American laborers ever could (as a result of the inefficiency of minimum wage laws and union monopolies on blue collar labor) it allows the American car companies to grow their domestic businesses too. It can expand into new markets, it can create new domestic, higher-paying jobs and invest in new capital, thereby creating profits and jobs in other markets and companies.

In addition, we can get cheaper goods and after the initial wave of frictional unemployment, the laid-off workers will acquire other skills and find new jobs, likely doing something taking more skill. See, when we don’t have to waste time and capital on easily produced goods, we can spend our time creating higher-value or higher-quality goods which can be sold at a higher profit margin than the lower-quality goods the foreigners are now producing. And those foreign workers are getting paid much more than they ever have been in their lives before now, so their buying power is much increased, growing their economy and the global economy on the whole. This emerging market provides investment opportunities for American venture capitalists and investment firms, which provides more profit opportunities for Americans.

The alternative is Americans making the same goods they’ve always made. The alternative is more expensive goods everywhere. The alternative is economic stagnation and chilled international commerce. The alternative is weaker international relations, achieved through the absence of international trade. That’s what protectionism, your brand of “free trade”, has to offer. That sure doesn’t sound like it’s a good thing.

You don’t like experts? I’m no expert. I’m a college sophomore. But the principles of economics I’ve put forth here are so noncontroversial, so absolutely basic that they are taught in every macroeconomics class and required for any Liberal Arts student at my school. But aside from that, your absolute rejection of knowledge offered by these thoroughly abhorrent and evil (your idea, not mine) experts casts a veil of ignorance over your argument from the start. Paul Krugman may be a moron in the “intellectual” tradition of Keynes, but Friedman, Hayek, Mises and their intellectual heirs are correct about economics and many of them have doctorates. They’re all well-educated and regarded as experts. Before condemning them all on some hatred for the abstract idea of expertise, think about it. Your doctor is an expert in the human body. Do you wish he were less of an expert? How about the professors at your child’s college, whom you pay to thoroughly and correctly educate him? How about the engineer designing the bridge over which you have to drive every day, or the architect who drew up the plans for the house in which you to live every day? Want them to be less expert?

*I was typing this on my phone around 1 a.m. which resulted in a few incorrectly autocorrected words that I did not see last night. That’s all I changed.

If you disagree with me about anything, I’d love for you to contribute to the discussion.