Regarding the idea of re-unionizing America (Power to Speak, 11/24), I’m struck by numerous erroneous assumptions and outright fallacies in the guest essay by Brian Lee Rencher. Interestingly, Mr. Rencher fails to provide any sources for his claims. Let’s examine these statements individually.
First, the phrase “distribution of wealth” throws up a red flag, because it implies that there is some cosmic or utopian ideal regarding in whose hands wealth is supposed to reside. This conviction that one is inherently owed wealth is a prime example of the entitlement mindset. No one is owed anything.
Second, let’s define “wealth.” Does Mr. Rencher mean only income, or total assets? For the purposes of this discussion, we’ll choose income, as seizure of another’s assets is theft.
According to an article published in the New York Times (Floyd Norris, July 23, 2010), “The I.R.S. disclosure of combined tax return information for the wealthiest taxpayers — those with annual incomes of $10 million or more — provides glimpses into the lives of the super-rich. Most people in that rarefied group are there because of their investments, not their work. Only19 percent of [income] came from wages and salaries, much less than came from capital gains, even in such a bad year for stocks.”
So, when Mr. Rencher decries the accumulation of wealth in the hands of a few, it seems he is faulting them for daring to put their money to work. Using your money to make more money is hardly an unknown or secret concept, but somehow Mr. Rencher labels those who do as “robber barons.”
When labor unions were first instituted, they were a critical and vital force for combating the excesses and exploitation of the original robber barons and their companies. The song “Sixteen Tons” by Tennessee Ernie Ford encapsulates this situation with crystalline clarity. Yes, the common laborers were relegated to the same situation as medieval serfs, what was in effect indentured servitude. Banding together to stand up to the company ownership and their hired muscle took courage and strength. As with so many human endeavors, however, the pendulum swung too far the other way.
Mr. Rencher’s example of the public sector workers as “the last vestiges of the unionized American worker” is fatally flawed. Public sector workers are not concerned with productivity, profits or competitiveness of their organization.
Since there is no profit to worry about or customers to satisfy, public workers exemplify the absolute worst aspects and traits of “the unionized American worker.” Is Mr. Rencher seriously trying to claim that the people behind the counter at City Hall, the DMV or the IRS (to cover three levels of public sector) are shining examples of what unionization produces?
Let’s look at the effect that a unionized labor force has in a for-profit organization. First, it artificially increases the overhead (operating expenses, which include salaries and benefits) of a company. This increase is not accompanied by any greater contribution of value to the organization’s operations or productivity, which means that the organization’s overall worth actually declines. It also typically makes it more difficult to remove non-competitive employees from the payroll, regardless of the reason. So the organization has increased costs to produce the same amount of profit.
The company passes on the cost to its customers, the very same unionized workers who are demanding ever-higher wages and benefits to buy ever-more costly products and services. Is the vicious cycle becoming clearer now?
As labor unions continually inflated the cost of the labor force, businesses searched for ways to keep those costs under control to continue making a profit. Inevitably, establishing operations in other countries became cheaper than continuing to employ American workers, thanks to their unions. This is not quantum mechanics, dear readers.
I fail to see how the “huge wealth transfer” of “bank bailouts” got “short shrift” in the media. Not only that, the wealth that was supposedly transferred went to the stockholders of those banks, some of it, retirement funds for Mr. Rencher’s unions. So the retirement fund manager who is charged with ensuring that the unionized workers will get money for doing nothing is being demonized by Mr. Rencher for encouraging the banks in which the fund invested to achieve maximum profits no matter how risky the method. Then, when the bubbles burst (as they inevitably do), people like Mr. Rencher rail on about robber barons, greedy capitalists and thieving management. Wow.
Somehow, I doubt that Mr. Rencher has a problem buying any of these products that greedy “capitalists” produce. I’m sure he wears clothing, buys food, owns some sort of vehicle, and probably lives in a domicile of some sort. Funny thing is, all of these things are nearly always produced by greedy capitalists. I just cannot see how profit is a dirty word. I can see, however, that wanting something for nothing is foolish and moronic, as is being convinced that the universe owes you anything. A business owner owes you nothing more than what you can prove you’re able to provide to the benefit of his company, and that is subject to negotiation betwixt the two of you.
Do you want more wealth? Work hard, save harder, invest wisely, and stop whining. Buy from small businesses, preferably local if possible. Be sure your investments are managed correctly and placed with companies that engage in sound strategies and whose ownership and management are fairly compensated. Unions have become part and parcel of the problem, rather than the remedy that they once were. Corporate management whose compensation isn’t linked to company performance is another facet of the same problem. These are all varying degrees of the me-first mentality that has pervaded American society at every level: higher wages for me (the worker) even if the company suffers; bonuses and compensation packages for me even if the company implodes (the executive); keep me (the politician) in office even though I fail to responsibly represent my constituents. The American Dream has always been that you can prosper by the sweat of your own brow, the strength of your hands, and the desire in your heart. It was NEVER a guarantee.
Dion Hansen, a Ventura resident, is an average citizen, critic of all levels of government, Heinlein devotee.