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In Reply to: Example of Why Unions Are Formed posted by Mister Pig on March 30, 2007 at 07:59:33:
Mr. Pig,Just out of curiosity, what exactly about this is "unethical"? I think there is a need to separate emotion - i.e. what "Feels" right or wrong - from what actually is right or wrong. (Or Ethical)
Circuit City is headquartered in VA which is a strong "At Will" State. This means you are employed "at the will" of the company and if the "will" of the company is to layoff employees or reduce wages - the company can do it. Circuit City is not doing well and has not been doing well for a long time - hence these things happen.
Now, we could discuss how this does not seem fair, or does not feel good and that it's unfortunate for those workers. And I would agree with you on all points - it is unfortunate and it does not feel good. However, "unethical" is a bit of a stretch. For comparison purposes - ENRON & Adelphia - now THAT's unethical.
Now, the reality check is no one ever said business is fair - it's business.
As the global economy is starting to include emerging "power houses" such as China & India - as an industrial nation we need to figure out how we fit into the new scheme of things. IMO - saying protect wages, protect workers - does not take us to where we need to go as a nation. We need to get better, faster, smarter because those countries are. Saying protect our wages and workers does not make us smarter, faster, or better - it just makes us slow and non-competitive. Then one day we will wake up and ask ourselves "what happened".
The world ain't fair either - we make our own future and I for one would prefer we focus on how to get smarter, better, and faster as opposed to Unions. (Which results in one day the Unions waking up and asking "where are all the companies we used to work for - ohh, they all went out of business because we could not compete with China)
(I have been laid off before and in fact just went through another one where many of my co-workers got laid off - 2 week ago. It's not fair - but it is business. Quite frankly - as the company I work for tries to turn things around - a union would make things 1000 times worse)
Follow Ups:
Now, the reality check is no one ever said business is fair - it's business.To me this is the crux of the discussion. Should business be fair? The culture of the U.S. says it values fair play, integrity, and the competitive spirit. We require that our citizens be honest and fair. Since corportions and large businesses are also citizens of this country, they should be held accountable for their behavior also. A company does not have the right to conduct business with no regard to the social effects of their behavior. Unfortunately business does not think this way, which has led to the rise of labor unions and government regulation. Both of these entities are a check and balance to ensure that the business sector acknowledges the societal responsibilities it has. Due to their past behavior business has created the need for both goverment oversight and labor unions. These parties did not come into existence on their own.
The point of being competitve in the world economy with new powerhouses such as China and India is an intereting topic. the U.S. advocates "free trade", but the playing field with these countries is not level. For instance China does not let free market determine the value of thier national currency. The Chinese government sets an arbitrary exhange rate, which will of course benefit them. If it were to float in the marketplace like other currencies, then Chinese goods would not be as inexpensive as they are. Other countries have close alliances between government and business. Tax breaks, lienent environmental laws, and no worker rights give these comapnies a significant competitive advantage when it comes to producing the lowest cost unit. The playing field needs to be level in order for free trade to be "fair".
So how did US companies get into this situation. I don't beleive that it was all the lazy, protected union workers that got us into this position. I thik the problem is an inherent flaw of our current business model. Companies no longer look to long term profibility and market position. Corportations are quite often being run by executives who have come up the financial side of the ledger. CFO's are now president or chairman. The value of a stock, or a minimum return on a cash investment are the tools used to measure a companies performance these days. Capital investment has to meet short term rate of return hurdles before they are considered. The control of US industry needs to come back into the hands of people who design and build products, not the individuals who track where the money flows.
One last point to consider. Every dollar of consumer spending flows through the economy. If a dollar is spent by the government, it turns over 3 times. In the private sector it turns over 7 or 8 times. Basic numbers from macro-economics. When you spend it on imports, it leaves the country and does not turn over at all. So it does not support other businesses, create new jobs, or enter the banking system as savings. It drains the economy fo a valuable resource.
If you will not pay the middle and working class of this country a susstainable wage, then who will buy the items we produce? Who will buy 25 to 30K cars? How can people afford to maintain a home? Or raise a family? This is a fundamental question of business ethics. Henry Ford understood this concept when he made the Model T. Ford paid his workers an unbelievably high wage, one which allowed his workers to be able to afford the product they were building. In the long term the US business sector needs to pay it's workers a fair wage that allows them to purchase the goods and servics being produced by the same businesses. this is only common sense, what is occuring now is not a sustainable economy.
Mr. Pig,I think the question of whether business should or should not be fair is unrealistic. Likewise we could ask is life fair??
Business in our country is a function of the market - and the market has no sense of fairness one way or another.
I do agree that CEO's and the current corporate enviroment is to focused on the short term and making the #'s look right for the street. Partly because many CEO's have short term incentive bonuses built into thier contracts. (Good and bad, if the stock is rising and I have a bunch of stock options - I like this)
In the end, our model is not perfect however it is MUCH better then all of the existing alternatives.
I am not a fan of corporate leadership today, however I think Union's days are long gone along with the value they provided. They did a lot of good back in the day, but today IMO they get in the way.
As I said, I have been laid off - and I am sure I will be again. It is what it is - and it's MY job to ensure I am ahead of that curve and keeping myself marketable. If I expect the companies I work for to take care of me, then I will have a lot of anger and dissapointment in my life. The world is a different place - we either change with it or get left behind.
Nothing fair about it, but history has taught us many times that if we fail to change - we WILL be left behind.
They day unions get in front of the issues our national industries face is the day they will begin adding value again.
This is an interesting discussion - my background being in Economics I obviously have a very pro free market stance.
the market has no sense of fairness one way or another.I would agree with that. this is why federal regulation and labor unions came into existence. They create a boundary for business to operate within.
In the end, our model is not perfect however it is MUCH better then all of the existing alternatives.
I would also agree with this statement. Or at least our model has the POTENTIAL to be much better. Corporations and business owners need to acknowledge their social responsibilities to the society they reside in. Business does not exist in a vacuum, and the profits they recieve come from people(workers) who they have an ethical obligation. It's kind of a chicken and egg scenerio. Which came first the business or the customer? The majority of customers are really just a worker for some business. They need to earn a respectable income so that they can be a good customer.
What is happening now is a gradual concentration of wealth. The middle and working class are shrinking. Industrial jobs have been exported. The post industrial stage of country was supposed to have a new class of tehcnical positions for individuals. Now those jobs are being outsourced too. Try getting ahold of technical support at Dell Computers. Since you have an economics background, you know that people must have a deent wage in order to buy goods and services. Without this the economy will shrink. As an example, look at the debt level being carried by the American family today. Now it's well over 12K a family. Either people have been convinced to live beyond their means. Or wages have not kept up with increases in the cost of living.
They day unions get in front of the issues our national industries face is the day they will begin adding value again.
Unions traditionally are looked at as a function of the workplace. But they have a social facet as well. They can be the vehicle that brings forth the thoughts and concerns of regular working people. After all, there really is no one else who will speak for the common person. Actually, you can look at a union as a PAC for working people. As a side note, unions were considere socialist and subversive groups by business. their treatment of union organizers was quite brutal. Anyways, to me, this is the true purpose of a union. To make bring the concerns of regular working people to thier employers and government.
As a bit of background. I have a BA from Eastern Washington University in Business Administration. And a BA from EWU in sociology. In some ways those degrees can be diametrically opposed. For the lst 12 years I have worked in the paper industry as an hourly operator. I currently run heavy equipment. I have been a lab tech, and worked on paper machines.
What is interesting is that we were bought last year by one of the largest investment companies in the country. Madison-Dearborn has systematically stripped our corporation of every long term assett we hold. First they sold all our timber holdings, which was the crown jewel of our company. they began to sell other long term assets and holdings to reduce the debt level they acquired from the purchase. We are a profitble company, but all the cash we generate flows to their coffers, with very little being re-invested in maintenance or capital expenditures. We are falling behind the curve every year, since our machinery is wearing out, and foregin machines come on line which are faster and newer. Quite frankly, our long term survivability depends on strategic desisions made by management. The mill workers really don't hae any influence over the important decisions.
What happens to these people if the mill were to close? I have an education that gives me a level of flexibility in changing jobs. The skill set of a 20 year papermaker is specific to this industry. Their ability to retrain or relocate is quite limited. From my perspective, the question of business ethics has a very pratical application.
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