US Unions Aren’t Keeping Jobs in the US

Labor unions in the US have a very checkered past, but their present function appears to be chasing more jobs into offshore outsourcing.

September 4, 2023

B​y: Bobby Casey, Managing Director, GWP

Tomorrow is Labor Day in the United States. The US has a lot of holidays that people forget the meaning or history behind. It’s become so commercial that we have declared days for everything from National Pancake Day to National Short Person Day which just passed this weekend.

G​ranted not all these days are national holidays, but much like Labor Day they were generated as a way to pander to a group of people and make them feel special. Clearly, the West is scrambling to find new markers by which to indicate their “specialness”.

Labor Day is supposed to be the holiday for labor unions in the US. Everyone who isn’t in food service or retail gets the day off, for the most part. This is a big day for the food and retail industries, so they stay open.

T​he Economy is one of the major issues in this coming this election season. People are suffering and it turns out economic hardship doesn’t only pick on people based on political persuasion. Shocker, I know.

Millionaires and billionaires aren’t as large in number as the rest of the voting population. They have the volume of money but not the volume in voters.

S​o expect to hear a lot of pandering to the working class from the political hopefuls.

T​he Democratic Party has for years stood by unions. One of the most frequent visitors to the White House during the Obama administration was Bill Samuel, lobbyist for the AFL-CIO (American Federation of Labor and Congress of Industrial Organizations).

O​ne of the loudest voices (and “experts” we were forced to listen to) pushing for school closures and child masks, was Randi Weingarten, the president of the American Federation of Teachers and a member of the AFL–CIO. Not only does she insist on lock-downs and masking children, but she circulated “misinformation” about book bans in Florida.

Here’s the thing about private sector membership in unions:

The union membership rate among private sector workers fell to 6.0% in 2022, according to a U.S. Bureau of Labor Statistics (BLS) news release. This is down from 6.1% in 2021 and continues the overall decline since private sector union membership peaked in the mid-1950s.

Unions had populist appeal to workers back when we didn’t have OSHA (Occupational Safety and Health Administration), or minimum wage laws, or all the myriad regulations we have in place now. In fact, we showed how non unionized companies tend to come in pretty close to where their unionized counterparts do, only their products are more affordable.

I​n fact, the cost-disadvantage the Detroit Three (GM, Ford, and Stellantis) have is stark:

I​t’s already making American car brands noncompetitive against other cars manufactured in the US.

W​hat gave Donald Trump such huge appeal was his strong rhetoric about bringing manufacturing jobs back to the United States, and ending the codependency on countries like China. That has tremendous appeal to the same group and for the same reasons as unions once did.

Back in 2019, the UAW (United Auto Workers), was threatening a strike. They wound up doing so, until they reached their settlement. And here we are, four years later, and the UAW is at it again.

Their list of demands are insane, and risk increasing their hourly labor costs to as high as $100 per hour ($208,000/year), conservatively speaking:

Fortune Magazine unpacks some of these demand details as 46% pay raises over four years, a 32-hour work week for 40 hours of pay.

C​NBC is reporting that this could amount to over $150/hour in labor costs ($312,000/year).

T​his full list of demands would cost EACH of the Big 3 automakers upwards of $80 billion

H​ow on EARTH can US manufacturing stay competitive enough to keep the jobs there? $100-$150/hour in labor costs isn’t difficult to beat in the world. And it doesn’t have to be China. While the taxes and regulations certainly do their part in chasing manufacturing businesses away, the US labor unions aren’t helping to keep the ones that are left!

T​his is absolutely parasitic. They are going to kill the host precipitously over the course of four years if this deal goes through. No question about it. And the workers will be displaced having only very specialized skills that are not in demand anywhere else.

The union members made some sacrifices when the Big 3 faced bankruptcy. But they kept their jobs and their benefits, which is more than many others could say. The workers didn’t sacrifice nearly as much as the shareholders, bond holders, and dealerships.

T​he workers made those sacrifices because if they didn’t, they’d have no job. And having *a* job is better than having *no* job, in a field that has minimal demand.

T​he politicians don’t operate much differently than unions. They shake down the little guy for money, shout their populist rhetoric, and wind up selling out their base. Blaming the corporations for “raking in record profits” and the expense of the little guy? Really?

Last I heard, it was the Federal Reserve that was printing all the money, monetizing the tens of trillions of dollars in debt, and passing that debased value down to the little guy.

Also, can we talk about the record profits?

Last year Ford actually lost $2.1 billion. GM’s net profit was a paltry 6%, while Stellantis only made 9%. Those aren’t very good returns, which is why the stock prices of those companies continue to go nowhere.

And there’s no shortage of scandals either.

C​enter for Union Facts tracks all union activity including their crimes. You can look under each union in the US and there will be a tab there calculating their misdeeds. The UAW was interesting indeed, including 101 guilty pleas and 65 officially sentenced in a court of law.

While it’s easy to sympathize with the working class union guy, it’s worth examining the compensatory packages, not just the wages. The antagonistic approach of the current UAW leader might get some of these items on the list, but in the end will see union members on strike bringing in $200-$400/week ($5-$10/hour is a stark contrast to the $30/hour they were used to seeing).

And to what end? Branding the companies as horrible places to work, or branding the companies’ leadership as oppressive won’t bring in or retain workers. It certainly won’t sell more cars, never mind the price tag hikes on the cars themselves. There’s no reason to buy a Chevy Trax when a Kia Sportage is cheaper and has all the same bells and whistles.

T​he fact is, the working class really isn’t that difficult to please. They generally want to be left alone to live their lives. Don’t tax them to death. Don’t regulate them to death. Don’t screw with the economy to the point where they can’t afford to live.

I​t’s not a lot by any normal person’s standards. But it’s damn near impossible for parasites to stop feeding off hosts.

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