Labor Unions?

Recently in Chicago, a windows and door factory closed its doors. Republic Windows and Doors held a company meeting and the told all of its 200+ workers that they were going to be picking up their last paycheck on Friday. [Source: NY Times]

Here are a couple of points I would like to point out on this story.

The ILL Governor (Rod R. Balgojevich) then started to throw his weight around. He told the workers that Chicago is no longer going to do business with Bank of America until they give the failing company a line of credit so they can pay their employees their vacation owed. (Note: Bank of America will NEVER see repayment of this money if they agree to the line of credit, they would have to write it off). No wonder the ILL Governor is currently under arrest by the FBI for throwing his weight around and forcing companies to give him money. [Source: NY Times]

It has been rumored that the owner of the company in the last month formed a new windows business called Echo Windows, LLC. And that he is going to open up a new business and start over. This has made people upset. I would also like to point out that this same owner lowered operating costs and tried over the last while to save the company after he bought out Republic. But was unable to turn the company around. Why could he not turn the company around and found it necessary to move to a different state to start his business again? Two words: LABOR UNIONS. Notice who is fighting for the workers? They are all members of the “United Electrical, radio and Machine Workers of American” UNION. Instead of being able to cut wages to keep these people employed, the owner had to bend to the Unions. If the industry was not unionized, I would venture to guess that he would of been able to of kept costs down and actually made a go with this business.
Here is just one example of how Unions can mess with supply and demand and make a company go belly up because of inflated wages.
Why does this scare me so much? Because our current President-Elect is pro Union and wants to unionize all industries. From his website it says:

Labor

Obama and Biden will strengthen the ability of workers to organize unions. He will fight for passage of the Employee Free Choice Act. Obama and Biden will ensure that his labor appointees support workers’ rights and will work to ban the permanent replacement of striking workers. Obama and Biden will also increase the minimum wage and index it to inflation to ensure it rises every year.

  • Ensure Freedom to Unionize: Obama and Biden believe that workers should have the freedom to choose whether to join a union without harassment or intimidation from their employers. Obama cosponsored and is strong advocate for the Employee Free Choice Act, a bipartisan effort to assure that workers can exercise their right to organize. He will continue to fight for EFCA’s passage and sign it into law.
  • Fight Attacks on Workers’ Right to Organize: Obama has fought the Bush National Labor Relations Board (NLRB) efforts to strip workers of their right to organize. He is a cosponsor of legislation to overturn the NLRB’s “Kentucky River” decisions classifying hundreds of thousands of nurses, construction, and professional workers as “supervisors” who are not protected by federal labor
    laws.
  • Protect Striking Workers: Obama and Biden support the right of workers to bargain collectively and strike if necessary. They will work to ban the permanent replacement of striking workers, so workers can stand up for themselves without worrying about losing their livelihoods.
  • Raise the Minimum Wage: Barack Obama and Joe Biden will raise the minimum wage, index it to inflation and increase the Earned Income Tax Credit to make sure that full-time workers earn a living wage that allows them to raise their families and pay for basic needs.

[Source: BarackObama.com]

Lets look at what the Employee Free Choice Act contains. Here are some of the scary points that I want to point out.
  1. Card Check recognition of Unions – WITHOUT a secret ballot election
  2. Government-imposed “Fast-track” union contracts
  3. Punitive damages and penalties for companies (not unions)

The last thing you want to do in an economy that is suffering is make it so that the labor force is not affordable. If you unionize all industries, then you will raise wages. Which is not a bad thing, but that also makes it so that a lot of companies can’t compete because of the inflated wages.

Just my two cents. We are going to see a lot more companies close their doors, and if the statistics are collect, you will see that the majority of them are unionized industries. If I remember right, DHL just went out of business in the US and they are unionized. The automakers are now saying they need help, and they are unionized. It will be interesting to see if this trend continues.