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Friday, October 14, 2005

Cheap Labor Conservatives

It probably is not possible any more to graduate from high school and expect to have a middle class life. That's the reality. Otherwise, those workers are, indeed, competing against workers in countries where the standard of living is much, much lower.
That's from Washington Post columnist Steve Pearlstein, writing in an online chat on Wednesday. The discussion dealt mostly with the Delphi wage cuts and bankruptcy. Unfortunately, Pearlstein is probably right--IF you accept his assumptions. Those assumptions, which are either stated explicitly or implied throughout the chat, include:
  • Free market capitalism is the best way to run things.
  • Unfettered global competition is not only inevitable, but actually good.
  • The United States will not adopt universal health care.
  • Greedy unions demanding decent wages and benefits for their workers are to blame for all of the auto industry's problems, not greedier executives demanding and getting outrageous salaries and golden parachutes.
If we accept all of that, then we probably have to accept what Pearlstein said above, along with the idea that eventually everyone will be working 80-hour weeks for $1 an hour or less (except, of course, the CEO's). But Pearlstein, believing those assumptions, sees the days of high wages and benefits as a problem and a big mistake:
The implications of that is that if all industries paid higher wages to their workers, they would increase the demand for products produced by American companies, and--voila--everyone would be richer. In fact, that's economic nonsense. If every company was unionized and paid higher wages, all it would create in the end is inflation, and nobody would be better off. There are only two ways to get richer in a market economy. One, is to distort labor and product markets in a way that makes you richer at the expense of someone else. The other is to figure out how to work more productively. And in the golden years of the unionized industrial unions, alot of the gains were of the first sort rather than the second.

In short, the generous wage and beneits negotiated by the unions back then were only possible because the companies operated in uncompetitive markets that allowed them to overcharge their customers and get away with it.
Pearlstein, like all of the cheap-labor conservatives who dominate our corporations, government and media, PREFERS the situation where workers are scrambling for minimum-wage jobs to the bad old days when one high-school-educated wage earner could support an entire family--on just one job! Oh, the horror of it all.

The system is broken, and the only way to fix it is to question and even outright reject the assumptions above. Global competition may be good for business (read CEO's and shareholders), but it is very bad for people. Almost anything we make or grow or do here in Michigan can probably be made, grown or done cheaper somewhere else, no matter how many college degrees we have. (And that would be true for any place on earth.) By following Pearlstein's and the globaloneyists' logic, we should probably just shut down the state and give up (which has already been done in Flint, pretty much).

For a better option, check this out from Dave Pollard. Shorter Dave Pollard: No state, region or country should import anything that it can reasonably make itself, even if it costs more.

PS: Here's another take on Pearlstein's chat.