Labor Needs Less, Not More, Government
Andy Puzder (Source: Wikimedia Commons)
With the nomination of business executive Andy Puzder, CEO of CKE Restaurants, to be labor secretary, president-elect Donald Trump has picked a businessman who is economically literate and who understands the power of freedom and capitalism.
This is good news because the best thing that can happen for those that want a job and who want to work under the best economic circumstances, is a growing, prosperous, competitive, job-generating economy.
In other words, exactly the opposite of what we’ve had in recent years.
As Puzder points out in a column he wrote for the Wall Street Journal last year, “Businesses create jobs; labor unions do not.”
Economic growth proponent John Cochrane of the Hoover Institution has pointed out that economic growth in the U.S. since 2000 has been half what it was from the end of World War II to 2000. It has dropped from 3.5 percent per year to 1.75 per year.
This means both lower wages and a lot of people not working that otherwise would be.
Cochrane notes that if the U.S. economy grew at the same rate from 1950 to 2000 that it has grown since 2000 to now, incomes today would be half what they are now.
According to Puzder, “about 2.5 million more people are working than were employed when the Great Recession began in December 2007. However, the employable population has increased by about 18 million people — seven times the number of people who found jobs.”
What has been going on is that rather than government policy focusing on ensuring a free and secure economy in which entrepreneurs can create, in which businesses can grow, the focus has been on larding down businesses with regulations and larding down the nation with social programs and government spending.
The Fraser Institute in Vancouver produces annually an Economic Freedom of the World Index. It measures economic freedom — the extent to which individuals and businesses can freely conduct their economic affairs without government interference — using 42 different factors.
From 2000 to 2014 the U.S. dropped from being No. 3 in the world to No. 16.
President Obama has explained the anemic economic recovery because he inherited an economy that had already entered into a severe recession.
But Harvard economist Robert Barro reports from his research that, historically, the stronger a recession, the stronger the economic recovery that follows. What is happening now, the very weak recovery following a strong recession, is unusual.
Why? Again because rather than Washington serving up more freedom and capitalism to reinvigorate our economy, we got more regulations, more government.
Barro notes that federal social benefits — Medicaid, Medicare, Social Security, including disability insurance, food stamps and unemployment insurance — increased from 8.7 percent of GDP in 2007 to 11.7 percent in 2010.
And in the middle of all this businesses were hit with Obamacare.
According a Heritage Foundation study, in the first six years of the Obama administration, 184 major new regulations were imposed on businesses and the private sector, each with an impact of at least $100 million. And per a Mercatus Center report, the Dodd-Frank law passed in 2010 added 27,669 new regulatory restrictions on financial markets.
Productivity, per Barro — economic output per worker — dropped to a third from 2010 — 2015 from what is was from 1949-2009, as result of this economic strangulation.
Puzder wrote last year “…if a politician wants to help workers win a raise, he should help businesses add jobs by simplifying the tax code, enacting regulatory reform, and replacing Obamacare with something that works.”
It should also be noted that research shows that when incomes rise, they rise across the board — for low-income workers as well as high-income workers.
If we want to restore robust job and income growth, we need more economic freedom not more government.
Given all this, Andy Puzder appears to be a great pick for labor secretary.
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Something surely was wrong for the past 8 or more years. But ruining or eliminating Unions will not be the answer. Once you take the checks and balances away companies can and will revert back to the days when they paid low wages, had mandatory overtime, low to no benefits, dangerous working conditions and etc. In fact it’s happening now because of the poor leadership in Washington and at the state level and the uncontrolled tactics of Big Business. That’s history starting to repeat itself. There are ways to work together, governments, companies and workers without attacking each other. I know, I was a Union leader for 28 years and I’ve participated in adversarial bargaining, win-win bargaining and concessionary bargaining in order to keep the company in business and jobs. It can be done.
Unions are only part of the problem facing the American economy right now, but they are a significant part of it.
Workers voluntarily organizing into unions and companies that want to negotiate with unions is perfectly fine and in harmony with American principles.
FORCED unionism, where you must join a union in order to work a particular job, as well as government FORCING businesses to negotiate with unions (as well as government unions, which are nothing but taxpayer extortion), are completely at odds with American principles.
Workers should be free to negotiate individually or collectively for wages and benefits, and businesses should be free to negotiate or not negotiate with a union. The business owner(s) owns the business, and according to American principles of liberty, should be able to exercise their property rights and right of freedom of association to negotiate wages and benefits any way they see fit. It’s THEIR business, after all; it isn’t owned by the government (not in a free society) and it isn’t owned by workers who have no legal ownership of the enterprise.
Workers are free to take the wages and benefits being offered by a business, and if they don’t like what’s being offered, they’re free to go down the road and market their labor to another business.
If a business doesn’t want to see one or more laborers leave that company and give their labor to another company, they are free to pay more in wages or benefits. And if they don’t believe the labor is worth what the worker(s) asks, then both may sever their voluntary association and go their separate ways.
THAT is how freedom works in a free society.
Hello Bob,
Thanks for the insight. Unions are not as much of a problem as some lead people to believe. Mismanagement has always been a thorn in businesses side and continues to be. Waste is also a big one. We had a program were I worked that was agreed to by the company and the union workers where we would turn off the lights when the shift was done. In the heat treating dept.s to turn off the water wherever it could be turned off. Lower the thermostats and etc. Why did we do that? Because we worked under the team concept and both sides looked at areas where money could be saved. You’d be surprised at how much was saved just from the small number of things I mentioned. Quality was another area we succeeded in. Union workers put some of their wages at risk to foster better performance and thus less scrape and reduced repair costs.
The abusive history of big business states the case very well for the reason unions were formed in the first place. Greed cannot be controlled by taking away from the workers, whether union or non-union and that’s where the full blame lies, not on union workers or any worker. It’s not a crime to want family supporting wages, benefits and etc. as some would lead people to believe.
Unions aren’t perfect, never will be, but to eliminate them would surely allow a repeat of the sorry history big business etched into the history of the world.
What plagues business more than anything today is government meddling in it. While state governments have the constitutional authority to meddle in business to some degree, it is unwise and contrary to American values to do so. The federal government has no authority to do so, period.
As I said, people are free to form a union and attempt to negotiate collectively with a business. Business, in a free state, is free to choose to negotiate with such a union…and is also free to choose not to negotiate with the union.
Government forcing businesses to negotiate with unions is un-American and unconstitutional. Forcing workers to belong to a union is also un-American.
The American form of government rests on principles such as limited government, the free market, property rights, and freedom of association.
Bob,
I don’t disagree with you on government meddling in business. But sometimes it took a law to get the companies to do the right thing for their employees. But it is no secret that in today’s world, government interference has hindered business, especially small businesses. Giving special incentives to foreign companies and not American companies is un-American, but that’s not the union workers or non-union workers fault. It is the federal and local governments.
However, once a company recognizes a union the collective bargaining agreement calls for negotiating between the parties. That contract falls under the Federal Law so no one has to force a company to negotiate, they have to by law. A company nor union does not have the right to not bargain at that point. They can and do stop during a negotiations because of a dispute over an issue/s but in the majority of cases that gets worked out now without a strike. Why? Because both parties have come to realize nobody wins from a strike.
The ‘Right to Work’ is a cleverly devised scheme to destroy unions and as intelligent as you appear to me, you know that. If someone doesn’t want to work at a unionized company and pay dues for the representation said dues pays for then they should move down the street. Unfortunately the elitists found another way to destroy unions through the liberal ant-union courts and have forced unions to represent all workers in said company, union or not. So I guess I should be able to join the YMCA, not pay the dues but be allowed to use the facilities just like the dues paying folks!
God’s continued blessing to you and yours.
All it takes to get a company to compensate their employees fairly is for employees to market their labor wisely…and/or take it somewhere else. That’s freedom. That’s the American way.
I agree that giving incentives and breaks to this company over that one is also harmful to business. It’s government deciding who succeeds and who fails. Government has no place helping or hurting business. Government best helps business when it leaves it alone and gets out of the way. z
If a person wants to join an organization (e.g. the YMCA or a union), they should expect to pay fair dues for the services rendered by that organization. Americans should not be forced to belong to an organization just to be employed by a free market business, nor should they be forced to go through an organization to negotiate for fair compensation in exchange for their labor. If they want to, fine. They should not be forced to. Both employees and employers should enjoy the right of free association, independent of interference from anyone or anything else.
“Right to work” is in harmony with American values of freedom and limited government. If someone wants to work at Company A, that person and Company A should be free to negotiate a deal that works for them, or free to go their separate ways if they cannot agree to a compensation for labor rendered. Forcing people to belong to a union and surrender part of their property and their free choice to that union is un-American.
Once again Bob you’ve put the onus on the employee and leave the impression that the company will reward a good worker automatically. While I do know some small businesses that operate like that I know of many more who don’t. Most companies and small businesses have the mindset that an employee should be glad just to have a job, and as such just do what you are told. But tell me, how long would any business be in business without any employees?
Don’t get me wrong Bob, I always gave 8 hours of work for 8 hours of pay. That’s how I was raised and that’s what God wants from me, but I don’t see that in todays work force. Many want to get paid but don’t want to put in the effort. That bothers me. Nobody forces people to join a union. Closed shops were an agreement between a company and it’s union’s – that is until the elitists and liberals invented ‘Right to Work’ and forcing unions to represent non-union members. Where’s your “free choice” here? Companies have the right to do this and that according to your way of thinking but unions don’t, even though they have a binding agreement between them? I’m sorry Bob, I can’t agree.
But I can see we have a lot of common ground as it relates to the role of government and business. I wonder where else we might have some common ground? Religious Freedom? 2nd Amendment? Illegal Immigration?
God’s blessings.
You seem to be under some strange impression that the employee owns the business. He doesn’t. The person who owns something gets to decide what that something will and will not do. That’s how it works in a free society.
Why do you despise the freedom of a person do do with their property what they, the owner, choose? And why do you despise the right of freedom of association?
Bob, Bob, don’t assume you know me. You are much more intelligent to say such an unwise statement. Although I do know of some businesses that are employee owned for the most part they are not. But my question remains, how many businesses would be in business without employees? Employees are more than just a paid clock number subject to anything and everything the company wants to do to you.
I have no problem with a company deciding how to run their business. Hell I ran it their way but I did not have to give up my ability to think and make suggestions. I even had the right to refuse to do something I thought was unsafe for me and my fellow workers. An employers freedom to make decisions about their employees is not all inclusive Bob. You know that.
A free society doesn’t include in it’s definition that a worker has no freedoms in the workplace. That would be an oxymoron. I do not think you really believe I am opposed to freedom of a person to do with their property as they choose. I think you are more of a anti-union person, but an employee is not a company owned property Bob. They are an asset to a company but most of the time they are not seen in that light. A good employee is just as much a part of that company as the owner. Together they make it work. So how is it I am opposed to a free society?
Lastly, pardon my ignorance, but what do you mean by ‘freedom by association’ in this conversation?
You’ve made it clear that you despise property rights and freedom of association. I don’t have to assume anything. You can’t advocate using government force to compel someone to surrender their right to run their business as they see fit, and to force someone into an association with another person that they do not want, and NOT despise property rights and freedom of association.
If a worker doesn’t like the level of compensation offered by an employer, or doesn’t like the conditions of their employment in any way, they are free to take their skills and market them to another employer who might want them. The employee is not a slave who cannot leave their employer…yet you make it very clear that you believe an employer should be forced into a relationship with an employee, whether they want that relationship or not.
Since you don’t seem to understand what freedom of association is (a rather basic and fundamental concept), maybe you don’t really despise liberty. Maybe, like so many Americans these days who have been misled by the siren song of Marxism, you simply don’t understand freedoms like property rights and freedom of association. Freedom of association is the right to choose who you will and who you will not associate with. If you want to be in a relationship with another person or entry, and that person or entity agrees to be in a relationship with you, you both enjoy freedom of association to associate with one another. Freedom of association also means if one or both parties do NOT want to associate with each other, you both have the freedom NOT to associate with one another.
It just doesn’t get much simpler and more elemental than that. Forced unionism is a direct assault on not only property rights (the right of an employer to run their business-their property-the way they see fit), but the right to associate or not associate with a person or entity of your choice.
That’s freedom. That’s Americanism at its most basic.
Wow Bob,
I’m sorry I’ve gotten under your skin. I didn’t mean to do that but I have no problem with property rights my friend, I just don’t agree with you that employees are property owned by business owners. That’s all I said and you can make out of it what you want to.
I’ll defend the rights of people to own property, and have done so, I’ll defend the rights of people to have a say in what and how they want to run their businesses. I do agree with you our government has no business telling companies how to run their business like when they tell Christian run businesses who they can and can’t serve. Many companies are under a microscope on that issue right now and they don’t have that right in many cases.
But I have to be honest Bob, I have never in my life ever seen a company forced to allow a union into their shop by the government or any union. I have seen the employees fight for union rights and win, I’ve seen them fight and loose. It’s clear to me that you feel that when employees succeed in getting a union in they are forcing the company into it. Not so. Many companies have shut their doors and moved somewhere else. That’s part of the freedom in our society as well. Do I advocate that, certainly not. I wish we could do away with the need for unionized work places, but the fact remains, given a free hand most companies will revert back to the old ways that created the need for unions in the first place. Just the fact they are willing to leave the U.S.A. for cheaper labor and less to know benefits for the new workers speaks volumes to their need for greed.
So you’ve broadened the scope of association to the work place. I have a problem with that. I don’t call working for someone a place to associate or a place to hang around. I go to work, I go home. Then I choose to hang around with whom I want to. I agree with that concept. I guess under your scenario I could say I agree to work there or not. I agree with that concept to. See Bob, I can understand even if you think not.
Great talking with you. Have a great night and God bless.
Anything that undermines liberty “gets under my skin.” I’m sick and tired of watching several generations of Americans embrace Marxist poison that runs counter to every principle of American liberty that this nation was founded upon.
Are you really dense enough to believe that I said “employees are property owned by business owners”? Really? REALLY???
I don’t know how to even have a meaningful conversation with someone so unbelievably dense as to make a statement like that. I never even remotely came within 10,000 light-years of saying employees are property owned by business owners. In fact, I made it abundantly and repeatedly clear that workers are free agents who can come and go as they will, who can associate or NOT associate as they see fit.
To be 150%, crystal, beyond any shadow of even semi-rational doubt: employees are NOT the property of a business. Workers are also not PART of the business. Workers voluntarily enter into a relationship with a business, marketing their labor to that business owner, or if they choose, taking their labor elsewhere.
The business-the actual BUSINESS is the company (i.e. the building, the equipment, the legally recognized business entity) owned by the person or persons who put up the money and effort to form and start that business. THAT is what the business owner owns, and THAT is what the business owner(s) has a right to make decisions concerning-including whether or not to associate with someone who attempts to market their labor to them.
In typical Leftist Marxist fashion, you attempt to hold two contradictory ideas at once (trying to have your cake and eat it, too).
On one hand, you want people to believe that the American worker (who has historically enjoyed unparalleled liberty to market his labor to any business willing to consider an association with him, regardless of his background, lineage, or other status) is utterly powerless and at the complete mercy of evil, tyrannical business owners.
Yet you point out that businesses would be unable to function without workers. That is absolutely true.
That is why, in a free society, the push/pull of free market forces makes it possible for a worker to market his labor to a prospective employer for the best compensation he can get from an employer. If the worker doesn’t like the compensation and/or working conditions offered, he is free to take his labor down the road and market that labor to another prospective employer.
If enough workers do this, free market forces will compel the employer to either go out of business, or provide better compensation/better working conditions in order to attract the labor force he needs to carry out his business.
If a worker or group of workers insist on compensation that costs more than the value of their labor to the employer, the employer cannot and will not pay it. The worker then has the choice of working somewhere else, or settling for less.
That’s the way it works in a free society. Both sides are free to market what they’re offering (for the worker, his labor; for the business, his compensation) to get the best deal possible…and both are free to walk away if either is not willing to meet the expectations of the other.
It is fundamentally un-American to force either of them into an association that one or the other does not want, on terms that one or the other is not agreeable to. There is no constitutional authority for the federal government to do so, and it runs counter to free market principles and the basic principles of American liberty.
Unbelievably pathetic that I have to explain such simple concepts to someone who went out of their way to come to this website and broadcast their astonishing ignorance to the world. There are a lot of things about which I have no clue; I don’t go around the internet making opinion statements about those things.
One of the biggest, and critical, things that a business owner or investment group invests in a business is RISK. This is almost never born by employees, who exchange time engaged in labor for monetary compensation. I don’t know why people don’t see this extraordinary expense. If the business goes under, the owner(s) will be out the money, but employees just have to find another job.
I agree. The Marxists never seem to get that (or if they do, they just don’t care).
What chaps the living hell out of me is the attitude that people who don’t own the business, who didn’t invest their capital in getting it started, don’t invest the risk (which includes legal liability, bankruptcy, destroyed credit, etc), who don’t put in the hard work (when the employees go home after 8 hours, the owners and often senior managers still put in another 4-8 hours a day, weekends, holidays, rare vacations, etc.). Even the wealthy ones are usually chained to their businesses 24/7. But somehow the Marxists think the guy who showed up last week and puts in 8 hours a day deserves to tell the business owner how to run his-HIS-business! No respect whatsoever for the investment of the business owner, not to mention their very rights.
No, that self-centered, greedy crap doesn’t fly at all with me. In a free country, if it’s your property, YOU get to call the shots about how it’s run.
With the exception of small businesses, most major companies and industries in America are not really run by the owners. They’re run by other employees. CEOs and those on the Board of Directors are rarely “owners” in the truest sense, yet they make most of the key decisions regarding how a company is run.
I’ve worked for a number of billion dollar companies, and I can tell you that while those in leadership take on a lot of responsibility, they almost never take on personal risk to their own assets. Quite the contrary: it seems that, in America, you can run a company into the ground and still walk away with multi-million dollar golden parachutes while your fellow employees are left with pink slips and no severance pay.
“It should also be noted that research shows that when incomes rise, they rise across the board ”
Not exactly. According to Fortune magazine, between 1978 and 2014, CEO pay increased 1000% while the average worker saw an increase of 11%. In 1965, CEOs made 20 times the average worker. Today, it’s closer to 300 times.
I’m not really arguing for more regulation or even that unions are always useful or helpful. I’m suggesting that just because you can legally get away with something doesn’t mean you should.
Even if companies may not have a legal obligation to be more equitable in how they treat their employees, I think they have an ethical one. Ethically speaking, compensation should have some relation to the value one brings to an organization, not merely on whether one has a higher position of authority.
You’ll get no argument from me that compensation for labor should be commensurate with it’s value. It’s a Biblical value, in addition to being a good business practice and just plain fair.
But government force to dictate compensation and other business decisions, that’s un-American and flat-out wrong.