Sunday, February 27, 2011

Actual Impact of Unions

I read this and think about how much further We must go to gain Understanding. It is simply another caricature examination of the position of Labor by Management. Neither even wants to understand the position of the Other. Labor desires to believe Management wants to suppress their interests under a proclamation of necessary support of Stockholder rights; while simply desirous of vast Wages, Benefits, and Profits for themselves. Management holds to the illusion that they are granting privileges to Labor, like negotiating with them, all the way to the idea that Wages were a Gift; under some illusion that they could get Labor for some type of Slave Wages. The article outlines that it is a question of different Mind-sets, but it might not go far enough to explain the rationale.

I once drew a sketch outlining various Costs of Labor under Slave Conditions, Starvation Wages, Management Desires and Union Desires. It was particularly loose, and Most would consider it untruthful, but I only utilized it for reference to Labor Costs. I adopted the estimated Costs of Slavery: thinking of the Cost of Warehousing and Heat of the Slaves, the Cost of feeding the Slaves, and such ascetic Costs of Slave Catchers to catch escaped Slaves; finishing with the inevitable Cost of purchase of Slaves in the first place. I found that paying Starvation Wages was actually cheaper than Slavery if one did not have to maintain the health of Workers; there being a truly heightened rise in pandemic conditions from poor Housing and poor Food quality. I ran through a uniform Wage rate on the order of what Management would likely desire to pay, all without Labor ability to improve its position. Then I ran in that which Union and Labor would desire to be paid.

The humor I found in my personal model, since destroyed, consisted of there being only a 39% Wage difference between Starvation Wages and Union Demands, and the difference would only make up about a 2% difference in the Profitability of most Businesses. Talk about your marginal utilities of which Tyler Cowen is so fond! It all seems like a tremendous lot of trouble for little Gain for Anyone. My model was created in the early 1970s, and could possibly differ greatly from the Present, though I doubt by very much. Subsequent work at the time estimated it would cost Stockholders a possible Penny per Share in dividends in the difference, and Management a possible 12% of their Pay Packages. The Range may have altered greatly under the current matrix of Business, but I doubt it. One wonders how such sharp animosities could develop over the Issue in the Present Day. lgl

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