To some extent the analysis that Stimplyu32 presented is correct, with the exception of the section regarding wages being the major cause of price increases in union made products and this causing a loss in sales of those products to non-union and foreign produced products due to price, because it fails to account for increases in productivity of domestic workers. The average annuals hours worked by American workers and our productivity are higher than other industrialized countries.
Ultimately unions in general will face a continued weakening of influence due to simply supply and demand. The birth rates of developed nations have been falling for some time now, thus creating a scarcity in the labor market, lower supply versus greater demand equals high price for labor. However we are no longer limited to only the labor supply in our domestic market area. It cost less to export the means of production, plant, materials, and capitol and use the local labor supply, than to import a labor supply, therefore production moves to a location with lower labor supply costs. There are other factors aside from normal natural market forces that will also tend to influence this migration.
Most notable are government policies, regarding public policy and spending priorities. These would include such things such as infrastructure development. Look at your phone bill, we still have a federal universal access tax on it, because years ago we decided that universal phone service was good. Yet today with the changes in technology, we have not reached a similar consensus on wireless or cellular technology or internet access, and have left it to the market place, while the rest of the world by enlarge, especially in emerging and developing nation, have made it a matter of national policy and a priority.
Over eighty years ago we reached a consensus that electrification was good, witness the creation of the rural electric cooperatives. We now have a haphazard collection of suppliers to a power grid with varying degrees of reliability and venerability, and have not built a major generating plant in over 20 years. While in most parts of the world, the electrical supply is centralized.
Before you go off on an anti-socialist bender, infrastructure items are akin to a road system, I have yet to hear the most fervent free marketer suggest that privatizing our roads and highways would be an improvement. There are some areas where public or government, is better suited to foster progress than to rely solely upon the market place. Unfortunately ideological and political tripe preclude a discussion.
Look at oil, we have maybe 3% of the worlds oil reserves, we are stalled over the NWR, but instead of examining an issue we politicize it and demonize one group for the delay in exploration, mean while the group doing the demonizing, puts an even larger supply of oil, off the coast of Florida, out of bounds. Being oil is needed by an industrialized nation; maybe it is time to rethink our approach. We are vilifying oil companies for their pricing yet we have enacted public policy that limits their ability to bring oil to the market.
As we become a nation that produces more intellectual products than tangibles, you would think this would be a major focus of foreign policy. Yet we have done little with our trading partners to protect the value of this intellectual property, aside from complain. Whether it is chip architecture, software coding, movies, music, or medicine, some of our trading partners allow patent infringement with relative impunity, and in some cases encourage it, and yet our government has been completely ineffective in addressing the issue.
There are also legislative issues, such as pollution, worker safety, and health care. Pollution was for many years an intangible cost of production. While some may rail against the EPA, do you really want to go back to the days of the Monongahela River catching fire? Are industrial accidents like the one in Bhopal or the toxic spill in China acceptable cost of production? What of the annual scaffolding collapses in China are these acceptable?
Then there is health care. When we debated national health care, an issue that was little mentioned, was the cost of the delivery system we now have. My clients spend approximately $300 per month per employee to provide health insurance to an employee, on a labor cost basis this puts them at a considerable disadvantage, when competing against a company is not directly incurring a similar cost, like the majority of companies in the rest of the world. This is a huge expense, and it compounded by the fact that our work force is rather aged compared to the developing and emerging nations. Yet because of ideology, rational discussion does not take place, it is dismissed as socialist, and while it may be it is also a factor that leads to a competitive disadvantage. No doubt Organized labors positions on issues have resulted in outcomes contrary to their goals, however our nations increasing inability to engage in rational explorations of issues because of some ideological dogma, usually not evidenced by the actions of the party or parties who claim it, has done more to lessen our competitive position in the world than anything else that is controllable. After all, at their peak unions only represented around 30% of the labor force, and at present barely represent 13% of the labor force.
Life is no joke but funny things happen
jon
