I saw this article on CNN money this morning http://money.cnn.com/2011/01/24/news/economy/budget_backlash/index.htm
I think it highlights a few things from this class, as well as some others from the past. I find it interesting that most Americans feel that we need to address our serious budget issues, unless it means affecting something that they like, or want. I am not a big fan of unions in general, so I tend to get irritated anytime I read an article about union folks who usually make a good living complaining about wages, or cuts thereto. There was a time when unions were an invaluable asset where worker protection was concerned, but with all of the labor laws in place, they seem to be more of a hinderance these days. We should all be so lucky as to have automatic wage increases regardless of our production or quality. I want that kind of job! I currently work full time, and my company has frozen wages for the last 2 1/2 years. It sucks, but its also business. The fastest way to save money is to cut labor costs (ECON 101). When I read the "The unions are also warning that government agencies won't be able to function properly." I laughed. As opposed to what we currently have? I'll take my chances. So where does your opinion lie? Do you think Federal workers should be fair game for budget cuts??
Unions are not my favorite cup of tea. I understand their importance in history. I see why people in my work and labor class (whom never have taken the best class we offer, econ 101) love unions and hate capitalism. In my experience, construction unions allow people to slack on the quality and quantity of their labor and reap the benefits.
ReplyDeleteFederal workers, especially those who's salaries greater than the per capita GDP, should be fair game for budget cuts. We can use all that technology capital we have been investing in to allow us to cut labor costs. Y=f(K,L)
I think you make a good argument, Richard. Like you said, your company has frozen its wages for two and a half years already, as have many other companies. I think it's far to say that the same can be done for Federal workers. Just because they work for the government doesn't mean they deserve automatic yearly wage raises when the majority of the rest of the working population isn't seeing these raises either.
ReplyDeleteYes, this is a little ridiculous. Like previously stated, unions were a great resource for workers thirty years ago, heck, even 10 years ago when discrimination and unfair labor practices were in full effect. However, these unions today I feel cause more turmoil than they prevent.
ReplyDeleteWith the current condition our country is in, along with the several related blog posts we've discussed in the past, with all the expenses and cuts our government is facing, this seems like a fairly easy/rational decision to make
Another aspect of unions that I didn't see mentioned here is the extremely generous pensions and retirement funds which many government employees benefit from. While workers at other jobs have seen their retirement funds stock options and 401k plans greatly diminished, union members are typically much better off after retirement. I am more concerned with the impact that these large payment obligations will have on the government and national debt.
ReplyDeleteThis quote "introduced a bill that would eliminate automatic pay increases for civilian federal workers for five years and cut the civilian workforce by a total of 15% through attrition" really struck me as scary from the article. This just basically means that workers will have their pay frozen for five years and the number of workers are going to be cut, which helps a firm save money, but does nothing for the community of the workers around. This is presenting a problem for the average worker in the United States, but effectively helps the firms make profits. This is such a self-interested thing to do as an economist would do.
ReplyDeleteWhile I concur with much of what has been said above about how unions were relevant 30 or so years ago when the labor force emancipated and achieved good working conditions etc etc, I don't know much of the role these unions play in America today.
ReplyDeleteHowever, it seems that these unions typically represent thousands if not hundreds of thousands of workers and if these are trying to make sure that workers are better off no matter what the state of the economy then, from a public welfare perspective, I can see how unions can actually be a good thing. Imagine if every single industry out there had unions that had some sway at least and could ensure some benefits (current and/or future) for the workers. Wouldn't society be more equitable then?
I agree that temporarily freezing union wages seems like a fair way for these organizations to cut costs in the future. However, I do not think that these federal workers should have to receive wage cuts; I don't think union workers should have to be penalized for the federal government's frivolous spending. This sounds like a contradiction because freezing wages is a penalty too; but, I think it's one thing to take away wage increases, but actually cutting wages is another story. Sorry if this doesn't make much sense; it makes sense in my head! Wage cuts are the last things these thousands of workers and their families need in today's struggling economy.
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