Unions Shirk Blame for Killing Jobs

John Seiler:

Although public-sector unions are the worst at turning California into a toxic jobs climate, private-sector workers aren’t much better.

Union workers now are protesting in Ontario because, according to the Inland Valley Daily Bulletin, “Officials from the Teamsters said the contract of 65 union employees ends Aug. 31 and that the automaker will bring in a contractor to run the distribution center.”

Well, what did they expect? If unions lobby government to increase business costs, then business has to cut something to still make a profit. The California Teamsters Public Affairs Council lists several bills they have advanced that would greatly increase business costs, while also backing Gov. Jerry Brown’s proposed “tax extensions” — increases.

Don’t they realize that the higher taxes go, the less money people will have to by BMWs — or anything else?

Deutschland Resurgent

The action against BMW also is instructive because it, of course, is a major German company. In the early 1990s, Germany was suffering from much the same problems as America and California: excessive union power had increased taxes and regulations to the breaking point, and the once-powerful Germany economy was stagnating.

Then in the mid-1990s the German unions and their Social Democratic Party came to their senses and worked out agreements with business and the conservative parties to keep down the costs of taxes and union regulations. And unlike the governments of the United States and California, the German government avoided massive deficits.

Reported the New York Times:

But the roots of Germany’s export-driven success reach back to the painful restructuring under the previous government of [Social Democrat, that is, socialist] Chancellor Gerhard Schröder.

By paring unemployment benefits, easing rules for hiring and firing, and management and labor’s working together to keep a lid on wages, Germany ensured that it could again export its way to growth with competitive, nimble companies producing the cars and machine tools the world’s economies — emerging and developed alike — demanded.

The result: the Germany economy came roaring back and now again leads the world in several economic areas, including luxury cars such as BMWs. Everybody benefited, beginning with private-sector union workers.

Unlike here, in Germany even socialists like Schroeder understand that the private sector first has to make something before it can be taxed and regulated.

O, Canada

Curiously, something similar happened in Canada at about the same time in the mid-1990s. Even its socialist Labour Party realized that Canada had to stop taxing, regulating and borrowing so much. The result: today Canada’s economy is much stronger than America’s. Canada still has its awful socialized medicine system . But taxes and regulations have been cut to below American levels.

According to a study by Peter J. Nicholson in the International Productivity Monitor:

Canada’s economy turned a corner in the1990s. What happened?

Most Canadians would give a lot of credit to the dramatic about face on the deficit in middecade. We finally began to live within ourmeans; made room for taxes to be cut; and cameto rely less on bureaucrats and more on entrepreneurs.

By contrast, America under presidents Bush and Obama, and California under governors Davis and Schwarzenegger, went on wild spending sprees, while greatly increasing regulations.

If socialist Germany and Canada can cut taxes, regulations and debt to promote strong economic growth — all with the cooperation of their powerful unions — why can’t supposedly capitalist California and America?

June 17, 2011