The history of unions in the American workforce is wrapped up in their quest for political power.
Originally unions sought equality in the workforce with the holders of the capital that employed them. Unifying was a natural choice. But their power devolved because the critical industries that employed them devolved. Foreign competition put their employers at a growing disadvantage. New information intensive industries such as Google and Facebook became financial powerhouses with few employees. Much of this was just natural evolution.
Political pressure to promote unionism often had opposite effects. Factories relocated to less union friendly states and countries. Read the New York Times article How the U.S. Lost Out on iPhone Work.
Why can’t that work come home? Mr. Obama asked.
Mr. Jobs’s reply was unambiguous. “Those jobs aren’t coming back,” he said, according to another dinner guest.
The president’s question touched upon a central conviction at Apple. It isn’t just that workers are cheaper abroad. Rather, Apple’s executives believe the vast scale of overseas factories as well as the flexibility, diligence and industrial skills of foreign workers have so outpaced their American counterparts that “Made in the U.S.A.” is no longer a viable option for most Apple products.
Apple has become one of the best-known, most admired and most imitated companies on earth, in part through an unrelenting mastery of global operations. Last year, it earned over $400,000 in profit per employee, more than Goldman Sachs, Exxon Mobil or Google.
But unions have also lost ground to enlightened management. As old-line steel companies, a major source of union workers, faded they were replaced by companies such as Nucor. Nucor is now the largest American steel producer and mostly nonunion.
As unions lost their grip on American industry they sought to maintain their membership by representing government workers. This was a radical departure and infected with political repercussions. FDR opposed this and state and local governments largely forbade union representation until JFK in 1962.
Government unions collect union dues from workers, use the funds to promote strongly pro union political leaders, who further enrich the coffers of the unions. It is a vicious cycle that raises the cost of government at the taxpayers’ expense.
It is no wonder that government pay and benefits have thus outstripped the private sector. And it is no wonder that states have had to push back on the never-ending growth. Chris Christie from New Jersey, Mitch Daniels of Indiana have fought hard battles with state unions, but the big battle brewing is Wisconsin Governor Scott Walker’s recall vote. The state’s unions are trying to remove from the office the governor who sought to reduce their power. This, hopefully, will be the unions’ Waterloo.
From the Wall Street Journal Stephen Moore writes The Most Important Non-Presidential Election of the Decade, 1/28/12.
The stakes here “go well beyond who will be governor of Wisconsin,” Mr. Walker explains. The recall’s ultimate objective is to intimidate any official across the country who’s thinking of crossing swords with the empire of teachers and other public-employee unions. “This is about killing reform initiatives in every state in the country,” says Mr. Walker.
In Wisconsin, the evidence is mounting that Mr. Walker hasn’t brought economic Armageddon but financial stability. Last year’s $3 billion deficit is now a $300 million surplus—and it was accomplished without the new taxes that unions favored. “If a business is failing, you don’t raise the prices on your customers,” Mr. Walker scoffs.
Obama has been the ferocious proponent for unions that they expected when they elected him. The card check bill (which though proposed was never voted on) was a major job killer and he has sought to accomplish through the NLRB what he was unable to get through Congress.
It will be a long touch fight but Walker, Daniels and Christie are at the forefront. Public sector unions must go.