Saturday, April 28, 2012

How much are you worth?

Why does anyone have a job? It is not complicated. You and everyone has a job for one reason, and only one reason.  Someone has a great idea for something, say they want to produce food, people need food and want a variety of it. So this one person (lets call him Stan) figures out a way to produce his food product, and lots of people like it. But now he has a problem, more people like his product than he can produce by himself, so here is where your job comes in. He needs to have someone help him produce his product, so he finds you to help him (we'll call you Joe). In exchange for helping him produce, you agree to take X amount of dollars as compensation for your labor. So we now have an exchange of something (usually a wage) for something of value to him (your labor). TA DA! the first job is created.

This is the only reason you or anyone else has a job, there is too much work for one person to do for himself, so he finds other people to handle the excess labor. In our small world everything is working great. Stan now can produce enough, and Joe has negotiated a price for his labor that he thinks is "fair". Until..... the day that Joe sees another person (Phil) doing a similar job and making X+1 dollars. So you now feels slighted because you are not making the same wage as Phil. So you ask Stan for an increase in your compensation (a raise), Stan says okay, because he has more customers and can pay more for your labor. Yippee! you are now compensated more for your labor.

But now Phil finds out that you are getting the same as he is getting, only he is actually doing more labor, so now he feels that he is making less than he is worth, so he goes to his boss to get a raise. Competition has now been entered into the whole labor market. And it works, Stan is happy, Joe is happy, and Phil is happy.  The system works. It is called Capitalism.

Now we add the labor union leader (Norma) into the picture. Norma thinks that Joe is being wronged, and should be making the same  as Phil, it doesn't matter that Joe is happy, all that matters is that Norma thinks he is not being treated "fairly". So Norma convinces Joe to have her represent him in labor negotiations where she will guarantee better wages and better working conditions. She believes that Joe should be making X+3, but Stan cannot afford to pay Joe X+3. This, of course, doesn't stop Norma from demanding x+3, in fact she will make it impossible for Stan to make any money because she will have Joe not do any work (a strike) for a time to force Stan to pay Joe x+3.

Before Norma came in our little system was happy. Nobody felt slighted that they were not being paid less than they were worth. But Norma now introduces class envy into the labor exchange process. "Stan is making his money off the back of Joe's labor, and isn't sharing sufficiently," Norma whispers in Joe's ear. Stan negotiates with Norma and is forced to pay Joe X+3, but it puts him at a great disadvantage in the market in which he is competing. Eventually Stan cannot afford to pay Joe anymore and lays him off. Now Joe isn't even making X, much less the X+3 Norma negotiated for him. So who get the fingers pointed at them? Stan the "greedy, selfish Capitalist". But who is really to blame in this scenario? I think its Norma, who thought that she could demand more for Joe than Stan could pay.

So that leaves us with today's dilemma, labor unions have been demanding higher wages and more benefits from the taxpayers for years. They have told workers that they are worth X+10 ( it doesn't matter that the society cannot continue to pay them X+10 any longer), they are worth it and feel slighted if they do not get it, because of their "intrinsic value to society".  Who is to say that a teacher, or a firefighter or cop has more "intrinsic value" to society than a farmer, or a truck driver? We cannot continue to demand that one portion of society (non-union labor) continue to sacrifice more each year for another, smaller, portion of society (unionized labor).

Just because the labor union says you are worth X+10 dollars, doesn't mean that the society can pay you X+10 dollars. So what happens when society says, "Enough, we can only pay you X+8 dollars"? Well look at the Capital Square in Madison, WI to see what happens. We the people are not saying you are not worthy of our compensation, what we are saying is we don't have the resources that you believe, and we cannot continue to give you more of those resources than we ourselves need.

This is not a fight over a pile of excess money laying around (as the labor unions would like their members to believe), this is about an ever decreasing pool of money, that we all need access to.  Just because you are a member of a labor union doesn't mean you get more access to it than I do. If you think Phil will willingly chip into Joe's wages when he is now getting less compensation than Joe, you are not thinking clearly. Phil is tapped out, and now he is outraged as well.

We cannot continue to listen to Norma and have Joe get mad at Phil. Both Joe and Phil are laborers, even Stan is not evil and corrupt because he wants to keep the fruits of his labor as well. Nope! Our problem is Norma's class envy, and meddling into a system that has worked for a very long time.  The enemy is not Capitalism, it is class envy! Have we sold our souls for a bowl of cheap oatmeal?

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