Here’s Why Labor Unions Never Own Businesses

For the last 80 years American labor unions have claimed to allegedly be fighting for the well-being of workers. But in fact unions have destroyed the livelihoods of countless millions of workers by driving companies, and even entire industries, out of operation with outrageous wage demands, strikes, violence and endless confrontation.

They also have discouraged the creation of millions of new jobs. For instance Toyota in 2006 wanted to build a non-union engine production factory in Michigan, but the unions made such a stink that Toyota opted out.

This is why unions represented 40% of the private-sector work force after World War II but only about 7% today. After all, when you wreck the company you work for you lose the jobs. Obviously.

The most recent union destruction happened in Autumn 2012 when Hostess Bakeries (Wonder Bread, Twinkies) was having financial problems. Rather than make concessions to keep Hostess afloat its baker union went on strike and Hostess closed immediately, throwing 18,000 workers nationwide out of work.

This has been going on for decades. The US steel industry was destroyed by greedy unions in the 1970s. Union avarice contributed significantly to the ruin of the American freight railroads in the 1960s and 1970s. The auto companies started shrinking and moving jobs overseas decades ago to get away from high union labor costs, strikes, confrontation and violence. Unions obliterated much of the industrial infrastructure of America from Illinois to Maine; they even drove 11,000 jobs out of the Massachusetts hometown of The only reason that General Motors and Chrysler are even still in business is because Obama used taxpayer money to bail them out in 2009 from their astronomical union labor costs.

Now the unions are trying to organize minimum-wage fast-food workers who currently are earning roughly $7.25 to $9 an hour. The unions are seeking to raise their minimum wage to $15 an hour. This shows how low the unions have sunk, and how desperate they are. They no longer are organizing auto workers or steel workers earning $25 or $35 an hour. Because the unions killed most of those jobs or drove them out of the US.

Today, for instance, the unionized US auto companies like General Motors and Chrysler must pay high-school-educated assembly-line workers up to $50 an hour and even more, while the average American private-sector worker earns about $25. That is why Ford recently opened its new plant in Mexico.

Meanwhile foreign “transplant” auto companies like BMW and Hyundai have located intentionally in the non-union American South and are thriving there making great cars and profits since labor costs, and even taxes and regulations, are lower. Toyota recently moved its US headquarters out of ultra-liberal California to low-tax, conservative Texas.

At the same time, the Southern workers don’t want the unions. Because those workers are happy earning solid wages, benefits and pensions, and they don’t want unions to come in and spread strife and kill their companies and their jobs.

Meanwhile very liberal states like California and New York are withering economically because their public-employee unions control those states and earn outrageous salaries, pensions and benefits, building a bigger and bigger and more expensive government bureaucracy and jacking up taxes to pay for it. This is ruining the economies of those states with unsustainable labor costs, just like the unions have done to private industry.

Now here is the Big Question: Why don’t labor unions simply purchase a major national business like, say, the Wendy’s hamburger chain and pay all of their workers $15 an hour or even $20 an hour and give them every possible benefit, and show us how to make the employees truly happy?

After all labor unions have access to hundreds of billions of dollars of investment capital through their own pension funds, union dues, union investors, sympathetic pension fund investors, sympathetic investors and investment banks. Yet they never purchase and operate their own businesses. Why not?

Here are four reasons why not: First, unions are controlled by corrupt, incompetent thugs who couldn’t operate a mini-mart without stealing every candy bar in sight. Second, if the unions really paid these high wages their Wendy’s chain would go out of business in months. Third, unions are only interested in milking the wealth out of existing businesses run by other people. Fourth, unions never risk their own wealth on anything since they are too greedy.

The fast-food minimum-wage campaign, if successful, will lead to the demise of the fast-food industry in America. Because if you start paying your workers $15 an hour for an $8 job you then have to raise prices significantly, and fast food will eventually be priced out of existence just like the steel industry was priced out of America by the unions.

And then remember that this drive does not just apply to minimum wage workers. It means that any employee making less than $15 an hour goes up to at least $15.

Already the ramifications of $15 an hour are being felt in a Seattle airport suburb called SeaTac where the minimum wage has been raised for all workers. Even though it is being phased in over several years, there already are negative effects being felt and they are getting worse as time passes in anticipation of $15. One effect is that other workers are not getting raises in order to make up for the higher minimum. This is causing unhappiness in the workplace. Another effect is that jobs are being cut or not created, which always happens with minimum wage increases.

But even though these negative things are happening they are not necessarily directly discernible and so the unions and their media and liberal cronies claim that there is nothing amiss. But slowly these government interventions in the economy cause long-term decay. It’s like watching a candle burn; you can’t see it getting shorter, but it is.

Then it is important to remember that these minimum-wage fast-food jobs require no training or education, which is why the wages are low. These jobs are at the bottom of the economy. If these workers want to make more money then they must go to school and/or train for a better job. Many do. These fast-food jobs are temporary for many workers, as they should be, or part time. But not for all, by any means. In fact many fast-food workers have been happy making these wages for easy-to-get jobs. But no longer, thanks to Obama. Look at these facts:

A worker making $9 an hour should earn $18,000 a year gross for 2,000 hours a year (40 hours a week for 50 weeks). And since people at that income level pay virtually no taxes except Social Security and Medicare (mandated by the same liberals who want the higher wages) they should have about $16,623 a year net to live on or $1,385 a month.

That is enough for a basic no-frills standard of living (rent, food, transportation), particularly in a small town or rural area and/or when sharing rent/car (like a teenager living with parents) or as a second income earner. Two people working at such jobs should bring home more than $33K a year into a household, which is pretty good for no-skill jobs that can be picked up anytime, with hardly even a resume.

But alas, under Obamacare anyone working 30 hours a week or more must get employer-provided health insurance and so employers have responded by often eliminating the 40 hour work week, and replacing it with the 29 hour week ($13,050 annual gross, $1,000 per month after SS/Medicare deductions) or even less. This is a huge 25% blow to the earnings potential of minimum-wage workers thanks to the Democrats. Then the same Democrats want $15 an hour. Amazing…

Employers themselves should always set the wages that they pay. Here’s how: If a worker earns $9 an hour and demands a raise and the employer does not think that the job or the employee is worth more, then the employer should advertise the job. If a suitable applicant is found willing to work at $9 an hour then that applicant should get the job.

Because the economy – the private labor market – is providing a supply of willing workers at $9 an hour and thus there is no natural pressure for higher wages. And under Obama tens of millions of people are desperate for any type of work at any wage. Thus the Obama Depression, and not stingy employers, is holding wages down.

Liberals always tell us that every business certainly has tons of cash stashed away for wages and other benefits. That is untrue. Millions of businesses are marginal operations that can’t afford big increases in their costs, or they are small-margin businesses that cannot increase their costs significantly, like McDonald’s, or they have to raise their prices, which will hurt their business. Here are other negative effects of an artificially high minimum wage:

Increases the likelihood and duration of unemployment for low-wage workers; encourages employers to install labor-saving devices like customer-activated computer screens to replace human order-takers at McDonald’s; increases inflationary pressure; increases teenage idleness, mischief and even crime rates as a result of higher unemployment; and encourages employers to hire cheaper illegal aliens.

So here’s a suggestion – all Democrat-owned businesses in the US should voluntarily pay $15 an hour minimum to show us how it works. And the unions should buy a hamburger chain to demonstrate their theory to us. But don’t hold your breath for either.

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