Unions are great at exporting jobs to China

An American icon has fallen.

Although repellent as a food item, the Twinkie did exemplify America of the old days. In that time, there is no nanny state. If you want to eat a sugar-filled inflated cake, it’s not our job to stop you.

That kind of system works only where each person is responsible for the consequences of their own actions. The instant we start paying for their retirement, health care or other issues, we the collective have an interest in what they do.

America of the old days would scare many kids today. There were not many warning labels. Firecrackers came in sizes big enough to actually blow your hand off. You were expected to know that things like live wires, chainsaws, snakes, bats, explosives and drugs could kill you.

This kind of America is great for those who have a purpose in life. There are few restrictions and thanks to the low overhead and socialized cost, you can do what you need to in a short period of time with low cost. There’s not much surface tension.

Amerika on the other hand is designed around the idea that we take care of everyone. This means warning tags, many rules and regulations, a safety net and subsidized services.

For the last 220 years our intellectuals have been enamored of this model. Why? Because it is a bribe. It’s a bribe to the great unwashed, the workers, the angry mob, or whomever, that we pay them to be (minimally) fat and happy in exchange for no riots or revolutions.

The problem with this model is that there’s huge surface tension. Getting anything off the ground takes more effort, and everything costs more, because instead of support two waitresses, a cook and a restaurant owner when you buy a sandwich, you’re supporting those people, a legion of bureaucrats and dependents, and the government required to enforce it. Society becomes stable to a point of fault.

You can get away with these changes for some time, like you can get away with anything for some time. European and American history is like a heroin addict winning the lottery. The lottery we won was based on the strength of our people and our technology, which enabled us to cruise by under bad government because we were naturally going to be prosperous with our above-average intelligence, health, strength and abilities.

We can call this surface tension socialism, which is somewhat true, or just cut to the root of both socialism and other forms of this idea: it’s a universal subsidy. To make people equal, you need to stop enforcing quality and start forcing acceptance. That means you subsidize, whether by knocking down the mighty or sending monthly checks to the lowly.

One form of this subsidy is the union. Unions, long linked in American lore to organized crime and corrupt political machines like the one that dominates Chicago, Illinois, are collective bargaining agreements by workers. More accurately, they represent the threat of workers walking off the job and stalling the company. These events, called “strikes,” are massively destructive to industry.

Unions know this and they keep the strike in hand as a nuclear option of sorts. Like most subsidists, they are liberals, and support liberal candidates exclusively. Protected by laws made by left-wing presidents, and generally defended by the political machine in their hometowns, they can strike with impunity. And like most leftists, they win — in the short term.

The example of Hostess and its disgusting little yellow cakes provides us with yet another instance of unions destroying the power of American labor. Most of these instances go unseen. For example, in the 1990s, many firms moved labor offshore or moved some production to lower-cost nations. What helped encourage them to do this? The instability of American labor scared them, as did the high costs created by subsidist regulation.

That’s not to say that American workers will not always be more expensive than third world workers. For now, we are a first world country. We will always cost more to some degree as a result. However, setting up in the third world has other costs that we do not in the first world. Private security is a big one, as is reproduction of the infrastructure we have here in places without consistent electricity, water, transportation, etc. But the subsidists crank this up to a whole new level.

“We deeply regret the necessity of today’s decision, but we do not have the financial resources to weather an extended nationwide strike,” said CEO Gregory Rayburn in a statement.

Businesses respond differently to challenges than private individuals. If something is unstable and too expensive, like the internet, you route around it. You don’t fight it, or take your case to court or Congress, unless you really just have too much money sitting around. Instead, when the union comes, you open that new plant …in China. You delay that expansion. You hire a call center in India, replace workers with robots and machines, perhaps even hire illegals. You work around the problem.

Part I of II.

14 Comments

  1. josef H says:

    how can a company that sells 500 million twinkie a year and more than 100 million loaves of bread a year (among others), still close down altogether?
    cant it get leaner? slash its size in half? why close entirely? i dont understand.

    1. EvilBuzzard says:

      It’s the old parable of how to boil a frog. You turn up the heat on the frog a little bit at a time. The frog could just jump out at any time. However, most frogs are too stupid to figure this out and just sit there thinking they’ve won a free vacation to the local sauna. I commend the BOD of Hostess for figuring why the ater just seemed to keep on getting warmer and warmer.

      1. Unions by their nature are snowballs. In order to justify their existence, they have to get raises or new bennies every year for their constituency. To do that, they need to hire more people. To do that, they need to raise dues. To do that, they need to justify their existence. Back to raises and new bennies every year for the wage-slave proles.

    2. You can sell millions of anything and still not make a profit. If you have too many internal costs, you can sell a product at a good price and still not break even. The market keeps you from raising prices, and the internal cost rise keeps you from being solvent.

      This is why unions were poison to the American auto industry, resulting in the bloat of middle management to maintain plausible deniability. The unions insisted on hard bargaining tactics which required the auto industries to insulate themselves through layers of bureaucracy and managers.

      In fact, the human situation repeats like wallpaper: every time the proles demand more, the bureaucracy grows and the rules grow, and no one gets fat but the lawyers and bankers. The prole is his own worst enemy every time, but he will always blame someone else.

  2. The American worker always overrates himself. He believes that because he does “real work” he’s important, when the fact is that what he’s doing is something that millions if not billions of people can do equally well.

    This thought upsets him, so he goes out and finds other malcontents who are upset by the fact their lives are worth so little. They then go demand money from the company. The company goes along with it a little bit, as is normal negotiation. The workers, who aren’t CEOs, don’t know when to stop. They demand more, the company says no, the workers strike. The result is catastrophic: the company loses money, competent management leaves, lawyers and regulators infest the carcass. Now the company has many more restrictions and costs, and is still trying to make the same money.

    A smart company just raises prices, which causes it to become less competitive in the market. This is the long way around. The less competitive causes it to go nearly bankrupt, and it can shrug off its parasites through chapter 11 or union deals. A good union deal fixes earnings to the value of currency and ends the debate forever; unions hate this, because then all the management at the union have no justification for its job.

    Dumb companies keep trying to buy off the parasite. They lower profits, drop staff, and cut corners. This makes them less competitive but more slowly, so it goes unnoticed. Soon labor costs are unreal and the company can’t make any money, so they declare an end as has happened with Hostess.

    The whole thing is both not as simple and far more simple than you’ll see in the media.

    It’s more complex because the balance sheet is not as easy as “either cut management or cut the workers.”

    It’s more simple because they have to make a product at a competitive price, and that determines everyone’s salary, including that of management, who get paid more because their jobs require more.

    Unions killed so many industries we have lost count. They exist on a fundamental principle, which is anti-competition, which states that a company must keep its current workers instead of hiring people for whom its salary would be a good deal.

    1. Most people are interchangeable parts. There’s nothing wrong with this, so long as they realize that the market sets their value. Were I the worker, I’d lobby hard against welfare and immigration as those two things increase the population of desperate people likely to take my job for less money.

  3. deadite says:

    It’s a shame that organizations which were initially in place to help workers deal with inhumane conditions brought on by some companies are now ultimately working against those they were founded to help.

    1. A shame? I think it was predictable that they would.

      Unions just another layer of management. Their goal is to make the union rich and powerful. You don’t achieve that by being reasonable. This is one of the countless reasons why unions are stupid.

      It may be that there’s a better method of helping the worker, like letting the free market dictate wages and benefits, and using antitrust law against companies that in isolated areas take advantage of the desperate labor pool.

      Then again, I’m not holding my breath. Having worked my share of shitty jobs, the one salient fact that’s consistent among all of them is that most of the people do nothing productive at all. A small group of people do most of the work. The ones who do the least work are the most certain that they’re being victimized by management.

      1. deadite says:

        Oh, I didn’t deny it was inevitable. These kinds of things tend to get corrupted. It’s a shame nonetheless.

        However, your suggestions concerning help to give the worker are reasonable; I would further suggest harsher penalties for companies who repeatedly offend. I would never put the laws of labor exclusively in an individual company’s hands though – a high probability for corruption there, too.

        The problem is, we’ve created too many busy work jobs that are redundant or really not needed. But there are people who pay for school for 6 years to get those jobs, so THOSE people think that it’s important.

        But hey, we’re all equal right? So we’ll all get that dream job with the nice property, right? At least that’s what the movie tells me.

      2. ferret says:

        1. “It may be that there’s a better method of helping the worker, like letting the free market dictate wages and benefits,”
        2. “and using antitrust law against companies that in isolated areas take advantage of the desperate labor pool.”

        The first one looks like a laissez-faire, and the second – Keynesian economics. They are incompatible: with the free market highly competitive type of economy this “desperate labor pool” is welcome. According to Milton Friedman (Chicago School), regulations kill the free market economy.

        Perhaps, as long as the goal is profit, it is impossible to solve the problem of inhumane condition for the workers, and there is no way to avoid recessions. If not these problems, there were no unions at all. That is, the unions are merely a by-product of the economy’s development, and thusly shouldn’t be considered as a source of all our problems.

        1. Perhaps, as long as the goal is profit, it is impossible to solve the problem of inhumane condition for the workers, and there is no way to avoid recessions.

          Profit is not a terrible way of measuring effectiveness, but it needs some kind of cultural limit, e.g. “the goal is to make profit without destroying the community.” We already have some standards regarding what is acceptable for companies to do, but without broader agreement (through ethnocultural unity) we will not have any broader restrictions. In particular I’d like to see a public horror and paranoia of environmental damage.

          1. ferret says:

            Effectiveness means in this case the capability of survival, growth, and capital accumulation. These goals conflict with the comunity health and cultural values and ethnic unity.

            In the market economy it is profitable to bring new immigrants as a cheap labor, “increas[ing] the population of desperate people”, as you have mentioned above. This profit kills community.

            “We already have some standards regarding what is acceptable for companies to do”.

            But these standards are hardly a result of cultural achievements, but rather a fear of strikes, riots, and revolutions. Indeed, more regulations/limitations means more wellfare but less culture/traditions, and, therefore, lesser cultural influence on these standards.

            Also, it is much easier to make profit producing low quality material and cultural products keeping the average cultural level as low as possible. Here is a conflict too. It is profitable to kill the culture.

            Making money on stock market oscillaitons is highly profitable. The question is: this is a case of good effectiveness in what, if there was no creation of products or services involved at all?

            “I’d like to see a public horror and paranoia of environmental damage.”

            Me too. Though, most likely, it will end up with making good profit without helping the nature. Profit and morality are conflicting here.

            The problem, as I see it, is that in competition win those who make profit; those who care about environment, community, culture, traditions, quality of life – they simply do not survive.

    2. I think it’s liberal re-writing of history that these organizations every existed to “help” the worker. Like Communism, they were a handy way for a new elite to come into power using the worker as a justification. The free market ensured more worker liberty than unions have.

      1. deadite says:

        Fair enough, but I think it’s too sweeping of a generalization to say that none of the people in the unions ever wanted to help the workers.

        In their infancy unions were usually formed and headed by workers who actually did the jobs in shitty positions/conditions and wanted to change things. It’s only in the mid 1800s, when unions got larger and more bureaucratic that shit started hitting the fan. It gradually became more about $, not better lives for the workers.

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