Interesting article titled: How Germany Builds Twice as Many Cars as the U.S. While Paying Its Workers Twice as Much.
Brian Dennert likes
I'm dying to hear the responses to this one!
Sounds like an institutionalized version of Socialism that isn't being called Socialism, but, nevertheless, that's exactly what it is. If it walks like a duck and talks like a duck........
The downfall of the auto industry in the U.S. was due to the unrelenting greediness of the UAW. Everyone with half a brain recognizes this.
The same phenomenon is occurring with public sector employee unions right now. They won't be happy 'til they break the bank and that's exactly what they're in the process of doing.
Most cities, counties, and school districts in California have seen a precipitous drop in services over the past few years while our taxes remain higher than most states in the U.S. You can thank SEIU and the CTA for this. Most of our tax dollars are going into the unsustainable wage and benefits packages and gold-plated retirement plans of public employees.
I hope Brian isn't suggesting that we aspire to become the next Germany. Europe is facing a financial meltdown of epic proportions right now. I would think they would be the last economic system we would be trying to emulate.
Can we take it that you DIDN'T read the article? If you had, you'd be asking WHY is it that German auto workers are more productive, get paid far more and receive far more benefits than their US counterparts, and yet their companies are doing far better than US manufacturers. Why? If you'd try to answer that question, maybe you'll realize you've been bamboozled into believing a big lie.
They didn't read the article.
Oh yes, I read the article completely. It contrasts how the German auto workers' union operates vs. the UAW and tries to make a case for a collaborative approach in resolving management vs. labor issues, which enables the Germans to produce twice the number of automobiles per year as the U.S. while paying their workers twice as much.
And my point remains that the UAW and all the other major labor organizations in the U.S. are working at cross-purposes with management and, in turn, consumers by their greedy, highly political approach to resolving their issues.
Then you can't avoid the logic trap you've created by insisting that worker pay and benefits is the cause of auto industry failure. The likely culprit, as you also suggest, is the collaboration divide between labor and management; a problem that the Germans seem to have overcome by a labor union successful enough to devote its attention to making the industry successful, rather than spending all its time and effort to guarantee a minimum standard of living for its members.
The economic moral: when employees don't have to wage a constant fight for survival, they can become an extremely valuable resource to their employers.
I don't think most people in the U.S. "blame the workers"--they blame the self-serving union. Unfortunately, the workers are too often pawns in the struggle between a combative union and management.
Worker pay and benefits isn't the cause of auto industry failure. If workers are allowed to be productive enough, they should be able to earn based on merit. Unions prevent that by forcing companies to pay the same wage to superior employees as the duds, which ultimately produces mediocrity.
Workers and management should both understand that they both have to compete in the marketplace in a worldwide economy and that it is a constant fight for survival that they should fight together, not at odds with each other.
David, I agree with some of what you wrote. But obviously it isn't just a union problem since they are working well in Germany. Unions and corporations are the same in that some of them are good and effective while others are not.
Is the auto industry in Germany successful? Are the workers highly paid? You somehow totally skipped those facts. Germany has powerful unions with highly compensated employees. Seems like that would show those can work together. Are you saying American workers are less productive or that they cannot do the same work?
I am not sure how familiar you are with the retirement system for teachers but it isn't a lifetime of medical care and there isn't pension spiking like you see for other public employees. Most teachers don't retire young either. Your example would be better if it addressed the most egregious stories.
My point is the unions are at the heart of the problem in America. Apparently, they do things differently in Germany and that's good for them. Their system seems to work fine over there.
To try and get the unions to function in a more collaborative manner here in the U.S. is a dream and only a dream. The unions here operate in an antagonistic fashion and use political pressure as well as downright threats and thuggery to achieve their goals. Look at how berserk things got in Wisconsin if you don't believe me. The unions are also behind a lot of these Occupy movements, which again employ hate and thuggery to achieve their goals (whatever their goals might be).
My point is that many in this country are getting fed up with unions and their nasty tactics. Germany is Germany, but we haven't changed at all here.
Well, talking it out is good, because it seems both arguments point to a direction for positive change. (1) Union recalcitrance helps foster a divide between Labor vs Management, as does Owner's relationship with management. (2) Management has adopted a policy of cutting Labor's compensation while Labor has adopted a policy of damaging Owner in an effort to hold on to their compensation. (3) The German auto industry provides an example of Unions, Labor, Management and Owner ALL working together to generate higher compensation for Labor and higher ROI for Owner.
So then, how do we get US Unions, Labor, Management and Owners on the same page, in hopes of copying Germany's success?
As a side note, Google the success that Brockton, Mass' public schools have had by developing a union, teacher, district collaboration. From the accounts I've read, Brockton high (once on the verge of being closed due to low performance) has surpassed all challengers in raising test scores and student performance.
Pay and benefits should be a function of the market forces of supply and demand plus the productivity and skills of individual empoyees. There is really no legitimate roll for a union--companies should strive to hire the best people available and work hard to keep them happy and motivated. You cannot compete successfully without good employees. That is the proper roll of management, and American Unions just make that job more difficult. Look at what a great American company--Apple-- has done without unions. Apple has created an amazing retail experience by hiring and training really great people who really know their products in a really consumer friendly atmosphere. Now there is a move to unionize the Apple retail stores. I guarantee if they are successful they will harm the Apple experience, not improve it.
If employers routinely tamper with the Market to lower the demand for employees, shouldn't employees tamper with the supply, to create a higher demand for their labor?
What you describe, David, is a free market Eden, where both employer AND employees voluntarily allow market forces to dictate the price of labor. There is no such thing in the real world. Both employers and employees use every legal and extra-legal means to gain an advantage over the supply and demand of labor.
As for Apple....there's no question that Apple treats its most visible employees well and in their case, there's little need to organize their efforts to seek more compensation. But the bulk of its labor is supplied by overseas workers who are being increasingly exploited by Apple and its suppliers, with no recourse other than to accept their conditions or be dismissed arbitrarily. Even Apple is concerned enough that it's sending teams of investigators around the world to check on claims of worker abuse and has publicly announced it will not tolerate such abuse. Now, that's a good thing. But what about companies who will NOT act as responsibly as Apple? Who stands up for their employees?
The idiots in the tea party and GOP hate Unions because they prevent them from destroying the middle class and allowing the richest 1% from stealing everything. The idiots in the tea party just tried to raise taxes on 160 million Americans before Obama kicked the crap outa them! Just look at the gang of morons running for the GOP Presidential nod!
Can't wait to see Newt Gingrich rip Obama to shreds in a debate. Now that would be fun to watch.
GS, I don't know what you are talking about when you say "tamper with the market" or "tamper with supply"? I would welcome examples of what you mean.
It is not possible to "tamper with supply to create a higher demand for labor." (The only potential exception would be for lawyers who by suing create the need for a defendant to hire a lawyer to defend them).
However, you are correct to label the free market as an "Eden" but the good news is that there are many industries and workplaces in America where wages are set by free market forces. Employers are free to choose what they offer for pay and employees are free to accept or decline employment. These "Edens" are usually healthy, vibrant and competitive industries.
By contrast, American industries/companies that are unionized are almost all troubled and/or in decline. Unions have chased jobs and industries overseas and have done great harm to our public education system. They may help raise the wages of select employees temporarily, but over time they destroy individual initiative, promote mediocrity and cause less capital to be invested/reinvested into the enterprises that are unionized, ultimately leading to their demise.
I glad both of you have been able to keep it civil when so many times conversations on blogs are not. I like reading both of your comments.
Brian, it's far more interesting to discuss these issues than to simply lash out.
David, for years transportation industry lobbyists have been trying to relax regulations in re cross-border trucking. Soon, drivers from all points south will have unfettered access to drive their vehicles in the US...threatening the jobs of tens of thousands of American drivers. Certainly you can argue that by doing so, these new rules offer industry owners a free market option for higher profits but their lobbying efforts has indeed tampered with labor demand. Those new owner profits come at a high cost to those drivers and their families, so why shouldn't the American drivers use every legal means to protect their families?
As for free market Eden, there are also places where unions and owners work hand in hand to maximize a win-win for each other. In other places, labor has made the choice to NOT accept the compensation offers by owners, just as owners are free to refuse additional compensation..leading to lose-lose situations.
I don't believe the claim that most union firms are in trouble any more than non-union firms. That's anecdotal at best and the drop in union membership is more a symptom of the dramatic shift of wealth from the middle class to the wealthiest during the past forty years. US firms have realized that the biggest boost to their bottom lines is to export jobs. Doing so creates an immediate rise in share value and if you're a publicly-traded company, it is necessary to your survival to keep your share value growing. That's the biggest impetus to exporting jobs...not labor costs...as the German auto industry shows.