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I was in a union (not by choice) the first ten years or so of my professional life. To put it in simple terms: I despise them. Yes, of course, they had reason
by robomartin 5y ago
I was in a union (not by choice) the first ten years or so of my professional life. To put it in simple terms: I despise them. Yes, of course, they had reason to exist in the dark ages. Today, I think they are in a range between counterproductive and dangerous.
Before anyone make a move for the jugular: I make a distinction between union members and union management (the entity). Union members are hard working folks, just like anyone else. They want the best for their families. That's their driving force. Nothing wrong with that at all. We all want the same things. Union management, on the other hand, well, I the tend to be between evil and criminal.
Today, US unions, in my opinion, destroy jobs. And they have done this in massive numbers. I still remember having a long conversation with a guy who retired from the printing industry. He explained, in great detail, how the union that ruled his industry absolutely decimated it. He lost his pension, benefits, etc.
The problem with US unions is that they exist to squeeze as much from companies as humanly possible. One of the most egregious examples I have seen of this is what the UAW (United Auto Workers) contracts that made US auto companies have more than 10,000 employees getting paid full wages and benefits (about $130K/year) to do nothing. Non-US car companies don't have this unbelievably destructive expense.
The effect of squeezing every possible drop out of a business is that you simply cannot be competitive over the long run. The other side effect is that economics and competitive pressures will force you to move portions of your process offshore and automate as much as you possibly can.
So, yeah, union leaders likely gave themselves a huge pat in the back for pulling that one off. And they made millions themselves (they get paid very well). And yet, a the ground level, they destroyed jobs, damaged companies, likely caused people to have serious psychological problems and damaged the long term viability of jobs.
When a company had hundreds of millions of dollars in dead-weight over head for years and years, sooner or later, there will be consequences. This is like fundamental laws of physics that cannot be violated.
In my little slice of the universe, as we are building a new manufacturing business, everything that can be automated will be so. There is no way we can pay someone $15 per hour (EDIT: to put screws into holes). If there was a way to do so and remain viable, I would have no problem with it. The truth of the matter is, this wage is a job killer. The US is already not competitive due to the huge cost of doing business here. This makes it worse.
On top of that, the combination of the $15/hr minimum wage, pandemic and other world issues has resulted in serious inflationary issues. Which means that the people who got that $15/hr wage (if they have a job at all), did not, in reality, get a raise at all. So, all we've done by pushing this nonsense is increase costs and destroy jobs.
Brilliant.
I know they look at all of this in China and cannot believe the US seems intent on destroying itself from the inside. I know because I also manufacture in China and talk to our suppliers all the time. They always tell me about how they are getting new customers because the cost of doing business in the US increases year after year.
As I said. Brilliant.
Sadly, people will not learn this lesson until things are bad enough to be obvious to nearly everyone. To be fair, what I am saying above requires having a reasonable understanding of business and skin in the game. Most people, the vast majority of people, go through life in complete ignorance of these realities. And so it is to be expected that, when the time comes to make decisions (voting) they are easily swayed into making truly dumb choices from the perspective of those who do have context.
- hotpotamus 5y agoSo you won't even be making $15/hour at this new business?
- robomartin 5y agoNo. That sentence should have read "There is no way I am paying someone $15/hr to put screws into holes". The problem this forced wage has created is that you can't hire people without some pretty solid justification for what they will deliver in exchange. Businesses are forced to make an ROI choice on everything, including people and their wages. This is why you are seeing things like burger flipping and fries making robots. You just can't pay people that much and stay in business. There will be plenty of high paid jobs. Just not jobs that cannot justify an artificially forced minimum wage that is not sustainable in the context of a global economy. I'll give you a simple and real example from a recent job we sent out to bid to nearly two dozen manufacturers in the US and China. It consists of a part made by a wire forming machine and with some manual labor. The average US-cost for that part was in the order of $6.00 per unit PLUS shipping. The average cost of the same part made in China INCLUDING shipping, was $1.00. Now, somebody tell me how we can make that part in the US when minimum wage, taxes, regulatory costs, etc. make it impossible to get anywhere even close to Chinese prices. I mean, you can't make the part in the US for even TWICE the Chinese price. And, keep in mind that shipping from China costs 10x more today that it did not too long ago. People might not like what I have to say. That does not invalidate the truth of it, you can't invalidate reality with a down-vote. Like it or not. Most people replying to my comment have never even tried to manufacture something at a non-trivial scale in the US. In other words, they don't even know what they are talking about, yet they are quick to have an opinion because words like mine hurt their feelings. Well, economics cares not one bit about feelings. Again, like it or not.
- hotpotamus 5y agoSo if your product can be made entirely in China by cheap workers and shipped here, why would I order from you? What value do you add? I can already order directly on Aliexpress and even talk to Chinese customer service agents in English - and they've been delightful to work with by the way.