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PrintApril 20, 2014
The Changing of the Land of Opportunity
Let’s suppose that in a rural section of a state, the unemployment rate was twice that of the national average, and the residents had difficulty merely trying to survive. And let’s imagine further, that you and a small group of people had developed a widget that all of you believed would be in great demand, because it made life easier, if only it could become available.
As we develop this tale further, you and your partners figure that land for a manufacturing plant could be acquired less expensively in that depressed area and the high unemployment rate would mean that sufficient labor would be available to start a new enterprise with good prospects that it would be able operate successfully.
So, your company raises money to buy the land, build the manufacturing facility and place help wanted adds announcing that 400 employees would be needed. All of this where nothing existed before -- no building, no employment.
In response to the ads, over one thousand people come from miles around to apply for the jobs offered at a specific published wage, and the 400 needed are hired and begin work. Everyone who was hired had applied voluntarily at the wage offered. The choice was theirs whether or not to apply for the jobs offered at the advertised benefits.
Once your company proved to be successful, union officials arrived and tried to convince your employees that they were being paid unfairly and less than a living wage. That “living wage” is a real crowd pleaser and makes people feel that employers are greedy and taking advantage of their helpless employees. Has anyone ever heard someone say how much a living wage is, other than it’s more than one is making now?
Bear in mind, that before your company came and began operations that created a prosperous community, the people were “living," but at severely depressed levels. Just who is greedy, the company that provided opportunities for people to get ahead or the union, which offered nothing for the community to build on, but would reap many dollars from union dues collected from the employees?
Further, should employees agree to be represented by a union, the cost of the widget would be increased by any increase in labor costs (higher wages, more benefits) and passed along to the consumer, who could, then, refuse to buy the product at the higher price, thereby forcing the company to fire employees no longer needed to produce a smaller amount of the product. Consumers who would continue to buy your widgets at the higher price would have less money to buy other needed items thereby hurting other providers and their employees.
It is a given that companies want to pay less and employees want to be paid more for a specific job. A free market allows a fair compromise to be reached automatically, based to a large extent on the availability of labor. Scarcity increases cost; surpluses reduce cost. Unions and “minimum wages” imposed by governments impose arbitrary conditions that may offer some immediate benefits, but eventually come around to bite those who would be helped.
A look at Detroit, once a vibrant city of one and a half million residents known as the Automobile Capital of the country, is now a decrepit, mostly slum-ravaged area of 500,000 welfare recipients and in bankruptcy. It is a result of about 50 years of union-controlled politicians that eventually drove the wealthy, tax-paying population to other climes.
Tennessee, a Right-To-Work state (a state in which employees are not forced to belong to unions to have a job) now produces more cars than any other state. Capital and free markets walk away from where they are not welcome to where they are.
Envy is one of the mortal sins, and we all have some in our being. However, we should not be envious of the “Rich," because capital is required before jobs can be created, and the Rich have capital. They are not going to hide it in a mattress, but use it to become richer, and, in so doing, create jobs and prosperity for all who want to work for it.
Unfortunately, American psyche seems to have changed from one in which a person is encouraged to become more affluent by means of hard work and perseverance to one in which dependency on food stamps and welfare checks is accepted as his lot in life and who votes for politicians who offer them nothing more. What a shame.
