Pennsylvania in California?

There has been a California in Pennsylvania for a long time, as confusing as that is for many who learn of it for the first time. Now we learn that one of Pennsylvania’s worst flaws is having a painful impact in San Francisco. To wit, the Bay area transit workers have gone out on strike, something that Pittsburghers and Philadelphians have seen and are threatened with every contract negotiation.

One is tempted to say, well, Californians, you voted for the people who gave transit unions the right to strike and you keep returning rabid union supporters to office. So when you are stuck in a massive traffic jam trying to get to work or when the old and sick cannot get to their doctor’s appointment or the poor cannot get to the grocery store, just remember who is responsible for this situation. Look in the mirror.

Perhaps a lesson will be learned but past electoral experience in California and Pennsylvania does not offer much hope that any lesson will be taken away from the strike caused hardships. Indeed, the transit strikers are supported by many of the most harshly affected on the grounds that the strikers are part of the downtrodden who are fighting for justice. And that is tied to their inability or unwillingness to see that well paid unionized public employees are a major cause of high taxes and inefficient service delivery.

It is a story being played out all over the country in non-right to work states.

Totalitarianism Cloaked as Do-Goodism

Unions in Milwaukee, Detroit and other cities have held demonstrations at McDonalds’ restaurants demanding wages be raised to $15 per hour. And no doubt they also want full health care and retirement benefits. Some editorial writers in have opined that this not radicalism but a reasoned response to the decline of America’s middle class.

This argument is so economically stupid on so many levels that one hardly knows where to begin. Since when have low skilled workers in fast food restaurants been a linchpin of creating the middle class? Indeed, it was the growth of the middle class that led to the massive increase in discretionary income that permitted more eating out and the enormous rise of the relatively inexpensive food services. Restaurants that have provided entry level work experiences for millions of people.

A near doubling of market determined wages will not be achieved any time soon unless there is a huge increase in total spendable income, or a dramatic drop in available workers. Good luck with that if the unions are successful in getting amnesty for illegal immigrants, a virtual guarantee of a flood of cheap labor. The unions must know that and what they are really after is to have the government force companies to pay far higher wages while also maintaining or increasing benefits. This at a time when these companies are already reducing full time employment and taking other steps to avoid the costs that are coming with the implementation of the Affordable Care Act.

The inability and unwillingness of some groups and ideologies to understand the damage done by their do-good policies is nothing short of astounding. No lessons have been learned by the unions and their overweening demands on private sector employers with the attendant calamities those consequences have had for cities all over the once prosperous industrial heartland. Now they are wrecking municipal governments as well.

What the workers chanting "hold the burgers, hold the fries, make my wages supersize" are really mean is: forget the notion that what someone earns is a reflection of what their efforts contribute to the earnings of the business. If wages were somehow to double without a comparable rise in revenue, the firm would go out of business. Then wages would be zero and the employees would be on welfare or unemployment benefits. How is that for a strategy to build a middle class?

Better wages require jobs with higher productivity in terms of contribution to company revenue. With national economic policies and many state policies creating disincentives for businesses that inhibit good paying job formation. Nothing in the union chanting suggests there is any understanding of this reality.

What Do Union Members Want for Their Children and Grandchildren?

If someone were to ask a rank and file member of a teachers’ union or a transit drivers’ union what they want for their children, what would the typical answer be? It would not be a far stretch to believe they would say something along the lines of, "I would like them to get a good education and have a nice career with opportunities for advancement, to go as far as their abilities and drive will take them, to live and raise their kids in a safe neighborhood with good schools, parks, and recreational facilities." One would hope that all parents, except perhaps a handful constrained by religious beliefs, would want a more prosperous and rewarding life for their children.

How many would want their children to be more successful than themselves? Odds are most would. And being more successful would mean becoming economically and financially better off. Do union members want their children to become professors, doctors, great writers, chemists, engineers? For those who have children who have become well paid engineers or doctors are they proud of those children? Are they proud of children with MBAs who have important positions with major companies? When the children work for banks or brokerage firms are the members happy about the nice homes and luxury cars the children are able to afford? Or do they view them as traitors to their upbringing?

In short, do union members think they are breaking faith with the labor movement if they want a much better life for their kids?

The irony is that in order for there to be an economy strong enough to offer a vast array of great opportunities for everyone’s children, it has to be a free economy with few constraints on its ability to allocate resources efficiently and reward entrepreneurs and risk taking investors. Otherwise, the economy grinds its way into permanent stagnation or worse.

Thus, for labor union members who want a better world for their children and grandchildren, their continuing virulent attacks on free enterprise, profits, and freedom of workers to join or not join a union are exactly the wrong message and policy stance. Instead, they are insidious poisons that threaten the ongoing ability of the economy to offer a better world for their children-or anyone else’s. One need only look at Greece, Italy, Spain, and France to see where the animus toward the free economy leads. Economies are organic creatures that, like the goose laying the golden eggs, cannot be strangled and abused if they are to keep producing. The biggest error in the thinking of unions is that the economy will keep going at a high rate of speed no matter what regulations, tax burdens and price distortions are forced upon it.

It is hard to imagine the mixed emotions of died-in-the-wool labor stalwarts when they see their offspring thriving as well paid corporate executives or engineers in the free enterprise, profit driven economy they so despise. But that was always their conundrum. Unions have always been a one generation at a time oriented institution. If it were not for public sector unions and their incestuous relationship with elected officials, total union membership would now be 5 percent or less of the total work force despite the overwhelmingly legal advantages they enjoy. Why? Because they are not focused on building something other than ways to extract as many current member benefits as they can; nor do they care about the longer term future. Watching transit drivers hold the public hostage by threatening to strike or teachers walking out and leaving children in the lurch should be evidence enough of the single mindedness of unions. To recall that unions went on strike at war materiel plants during World War II while their fellow countrymen were being killed or wounded to protect them is profound in its implications about the union sense of entitlement and privilege.

And yet as parents union members almost certainly have parental aspirations for their children’s futures. How do they live with the mental gymnastics required to be good foot soldiers for the cause which, in its full flower, destroys the hopes they have for their children’s and grandchildren’s future? The only way they can is to deny that their demands on their employer are harmful; indeed they will argue that it is helpful to their employers and the economy despite all the pain filled historical evidence to the contrary.

Labor Day in the ‘Burgh Will Find No Joy in the Employment Situation

Compounding the litany of financial difficulties confronting the City of Pittsburgh the latest jobless figures (July 2010) show a recession-high unemployment rate in the City’s labor force of 9.1 percent-a level not experienced in well over a decade.  The unemployment rate has almost doubled since the July 2007 reading of 4.7 percent.


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