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Monday, January 08, 2007

When Unions Cause Unemployment

Back in October of last year the United Steel Workers Local 566 of Bismarck put 780 workers on strike against the Bobcat company.  The picketers were demanding a payraise plus total health care coverage, and they resorted to thug tactics like throwing nails under the tires of buses carrying replacement workers (something that prompted Bobcat to get a restraining order against the union goons).  Eventually Bobcat caved and gave the workers a pay raise and expanded health care coverage, though union chief Steve Chmielewski said he was “disappointed” with the expanded health care coverage.

Regardless, Bobcat clearly gave the 780 striking workers a pay raise and more health benefits.

Now, about two months later, Bobcat is announcing about 155 firings at its plants in Gwinner and Bismarck.  The company is saying that these layoffs are the result of decreased market demand for their product, but it’s pretty clear to this observer that Bobcat is cutting costs in order to comply with the new contract they signed with the USW.

Is demand for Bobcat’s products slowing down?  I don’t doubt it, but wouldn’t the company be able to keep more employees on if they hadn’t had to cave to the demands of the United Steel Workers?  Or maybe have been able to avoid layoffs altogether?

This is the harm unions do to our job markets.  They artificially inflate the price of labor to the point where employers are actually forced to either drive up price of their products or services or simply employ fewer workers, neither option being especially good for our overall economy.

Things like market slowdowns and layoffs happen.  They are unavoidable in any industry, but their impact wouldn’t be as severe were our job markets not manipulated and made inflexible by greedy unions and the contracts they force down the throats of business owners.

Comments

And because it is union…
Management won’t get to lay off the crappy workers.  The union will choose to lay off the workers with the least amount of time in service.

Unions are awesome… AWESOME, I tell ya!

Paulie B on January 8, 2007 at 02:44 am
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Well, they’re awesome if you’re a union member, I guess.  For business owners and people who have to pay inflated prices caused by inflated union compensations they aren’t so hot.


When the people fear their government, there is tyranny; when the government fears the people, there is liberty.

-- Thomas Jefferson

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Rob on January 8, 2007 at 02:48 am

I have an example right here in the Petroleum Valley. A plant here had a major strike last winter, 94 days on the picket line, several major vandalism incidents. Final score? Workers returned to the job for less money and fewer benefits, and 36 lost their jobs. Yea Union!!!!!


Una Salus Victus Nullam Sperare Salutem

2Hotel9 on January 8, 2007 at 05:02 am
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Well, they’re awesome if you’re a union member, I guess.--Rob

Damn straight.

Anarchist Vegetarian on January 8, 2007 at 05:16 am

Wrong FR. Union membership is plummeting, Union members are losing their jobs at record rates. So again you show yourself to be a complete f**king retard.


Una Salus Victus Nullam Sperare Salutem

2Hotel9 on January 8, 2007 at 05:38 am
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Some would say union membership is plummeting because they are bankrupting the companies that they work for there by eliminating themselves from the equation.

It never ceases to amaze me that unions will literally run the thing that feeds them into the ground with out a care in the world.

richard on January 8, 2007 at 06:33 am

Of course if union labor is too expensive the consumers will buy from somewhere else.

I thought I heard that Bobcats were selling very well right now. 

Of course that’s only around here, not a national thing.


What’s going to happen to US industry when the global warming extremists like John McCain double the price of electricity?  I would think all these factories will close and set up in countries where they aren’t scared of technology.


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The Whistler on January 8, 2007 at 06:53 am
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Didn’t we just heard a few weeks ago that new housing starts had dropped like a rock?

While I am sure the strike played into it, this is likely just good market tracking on the business’s part.  Businesses that have sophistocated market tracking know what direction the economy is going long before we or the government do.

Watch what other heavy equipment manufactures do as far as payroll and we will know whether the economy or the unions are to blame.  My guess, the economy is tipping downward and the stikes sealed the deal.

FreeRepublicans.com on January 8, 2007 at 07:01 am

Freep, the main reason housing starts are down is a glut of new and existing housing/commercial buildings nation wide. That, and it is winter. Starts always drop from November to March, into April in the northern tier states.

Bobcat is seeing the price fall produced by their competitors in the equipment industry, and they are still selling quite well. Toro, Mahindra, and Komitsu are moving into the market that Bobcat and John Deere/DitchWitch have been dominant in for many years.

Another point, turnover in light and medium equipment is dropping due to higher quality/longer operational life. You don’t sell as much when your product has a longer operational life.


Una Salus Victus Nullam Sperare Salutem

2Hotel9 on January 8, 2007 at 07:24 am

And this strike hurts the local bobcat factory when it comes to competing against foreign manufacture.

Or Bobcat could be saving some money by outsourcing some of the work.


What’s going to happen to US industry when the global warming extremists like John McCain double the price of electricity?  I would think all these factories will close and set up in countries where they aren’t scared of technology.


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The Whistler on January 8, 2007 at 07:27 am
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Housing slowdown: I heard last week on Cavuto state that there is a glut of unfinished houses that are coming to completion right now and this accounts in part for the slowdown. The reason I point this out is I don’t believe that there is a single over-riding reason for the slowdown, but rather many different reasons converging at the same time to have a greater effect on that particular market.

Union members losing their jobs: I have to wonder if the union bosses are going to be helping these men and women as they have to start looking for other work, as well as provide for their families. Will they be dipping into their savings, selling any stocks or bonds, selling their home to find a cheaper one, to help these guys out? Some how I doubt it!

Will the union members who keep their jobs and the ones who find new union jobs think twice before they attempt to strike their way into more money, remembering their fellow workers who ended up losing their jobs? Past union member behavior suggests that they will suffer from SSML (Selective Short Term Memory Loss) and will repeat this behavior again.

Will unions in general see what is happing to companies like Ford who are losing market share, suffering financial trouble directly because of union contracts with UAW. (Want more info on this type of stuff; just look up Thomas Sowell the economist from Stanford.)

And as a final thought, how many marriages are going to be negatively affected by this result of a strike? How many marriages are going to come under undue strain, and fail because of financial hardship? Of the 155 families affected how many will suffer domestic violence, increased alcoholism, divorce, neglect and abuse of children, increased infidelity, and so on? Wouldn’t that make a great study; to follow these particular 155 families and document this information, see how many have to resort to the government, and then get stuck in that loop of dependence on the state for subsistence, as well as the other effects.

C.

Chris Brownell on January 8, 2007 at 11:03 am

I have much personal experience with unions and how thuggish they can be.  There is a nationwide campaign against my company (Cintas) in an attempt to unionize us.  Until we the employees agree, they have been visiting our customers and trash talking us, visiting employees homes and freaking out their wives and kids when the employee isn’t home, etc.  Their publicly stated goal is to continue to intimidate us until we start paying union dues. Plenty of information about this if you google Cintas and UNITE

This union is downright evil…


I think Rob hates me… I mean, just look at the pic he took of me!

Sphagnum on January 8, 2007 at 11:09 am
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The funny part is that they will probably go into non-union shops and try to re-create the union atmosphere.

Union are way past what they were originally intended to do. Now they are nothing better than leeches feasting until the host is dead.

richard on January 8, 2007 at 11:13 am
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Spaghetti, there’s a reason why unions have a traditionally friendly relationship with organized crime.  The way the treat some of these businesses is all but extortion.

As for Bobcat, I wasn’t trying to say that demand for their product hasn’t declined.  I was only saying that Bobcat would probably have had to make fewer cuts in their employment rolls if they hadn’t had to cave in to the USW with a new contract.


When the people fear their government, there is tyranny; when the government fears the people, there is liberty.

-- Thomas Jefferson

Rob’s recently listened-to songs:

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Rob on January 8, 2007 at 11:25 am

Furthermore the employees that didn’t get laid off may be better off, but those that got laid off aren’t.

Maybe the senior employees that supported the strike will step in and help out the laid off workers?


What’s going to happen to US industry when the global warming extremists like John McCain double the price of electricity?  I would think all these factories will close and set up in countries where they aren’t scared of technology.


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The Whistler on January 8, 2007 at 11:28 am
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That was funny whistler. You know as well as I do that those seniors guys rushed to strike because they knew they were high enough aabove the stink that their jobs were safe.

richard on January 8, 2007 at 11:33 am

Rob, it is all part of the same beautiful tapestry. This strike damaged Bobcat’s ability to stay above their competitors. The strike here convinced the parent company to move two of the petro-chemical operations this plant used to do to Texas and Louisianna. With an aging structure and plant combined with this strike they have moved irrevocably towards shutting this plant. Thank you, Union.


Una Salus Victus Nullam Sperare Salutem

2Hotel9 on January 8, 2007 at 11:47 am
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