Minnesota Patriots

I was disheartened to learn about GM adding third shift jobs at their Oshawa assembly plant in Ingersoll, Ontario.

GM Media – 20100326PressRelease

It’s an awkward mix of emotions in the heart of every American hoping for better days to return. The initial report creates elation that jobs are coming back to the marketplace. Then the realization that these jobs are not in America, they are in Canada. Anger quickly wells up with the Machiavellian realization that:

“We OWN G.overnment M.otors. No Canadian forked over one red cent to bail out the incompetent management and Union leadership at GM. Those should be the jobs of Americans! Divest EVERY Canadian production facility immediately! Fire EVERY Canadian working at any GM plant! And fire EVERY GM executive that had anything to do with placing jobs in Canada instead of America.”

I put that in quotes, not because any American had the guts to publicly state it, but because every American thought it as they read the GM report. I’m confident that cooler heads will prevail.

In this day of hyper-capitalism (defined as one party being disinterested in the social implications of a transaction), competition for jobs has no loyalty to community, or country. Even loyalty to family is not immune to accusations of ‘nepotism.’ We have come to worship at the altar of bottom-line dollars and cents. This is not the doing of Obama, or GM, or the Dems, or the GOP, or the Canadians. We are experiencing the results of policy decisions made decades ago by previous generations of Americans. This is “new age” economics re-working the family budget of millions of Americans.

Those jobs were added in Canada for a reason. You guessed it. Follow the money. The bottom-line dollar looked better in Canada than in the US. The pencil-pushers determined that Canadians working at GM’s Ontario facility are more competitive than the ones working for GM in the US. GM customers can apparently get better cars (measured by price, quality, service) when they are built in Canada. And GM shareholders make a better return. We can complain about it. You can call me a liar. Call me names if it makes you feel better. Why do you blame the messenger? Blame the pencil pushers? Why not blame Wal-Mart while you are at it! Or blame the Unions. Blame whoever you want. Only realize that the real enemy here is ‘managed’ society. Never underestimate the power of the market to violate every encumbrance placed before it.

“You are no longer free when freedom to succeed is protected from freedom to fail.”

I put that in quotes because I have the guts to believe it, put it in print, and attach my name to it. The Senate voted to approve managed society’s latest ‘program’ when they recently approved the Health Care reform bill. But I digress…

What dictates GM’s US worker’s competitiveness? There are two things: 1) Collective bargaining, and 2) US social and tax policy. At GM, individual workers surrendered their right to negotiate their pay with the company individually. Those US workers must face the burdensome cost of living in a free society, a society where you can vote to elect bureaucrats who can tax away your wages, your profits, your freedoms, in exchange for a promise of better service. The founding fathers feared one-man-one-vote for this very reason. The collective masses can vote themselves benefits, which cannot be maintained by the status quo. In the extreme, this can become ‘mob rule.’

COLLECTIVE BARGAINING:

Now before an ad hoc team of Union members muster a damage control team to burn down my house, understand this. I did not say “Unions” are to blame. I said Unions are in a position to be a serious player when it comes to determining a GM worker’s competitiveness.

We can agree that in this case (GM), the UAW has a role in the competitiveness of a US worker. Those workers’ legal right to use collective bargaining to protect themselves from an otherwise merciless tyrant is a foundational principle of American life, earned by the spilling of blood of many Americans. Some blood was shed in violent protest
http://en.wikipedia.org/wiki/Minneapolis_Teamsters_Strike_of_1934 . Too much blood has been shed for the sake of the almighty buck
http://en.wikipedia.org/wiki/Battle_of_Matewan .

Collective bargaining is a lightning rod phrase for many conservatives and liberals alike. Yet Unions have secured deep roots in our history’s halls. Famous organizing campaigns have been led by people who were devout Socialists or Communists, which is why Unions get saddled with leftist labels and derogatory slander. Entire Communist countries have been ‘organized.’ When it comes to Social Security, Medicare, and now Universal Health Care, quite a few Americans want to be a ‘collective.’ With respect to health care, recent polls indicate that we seem to be split roughly 50%-50% on the subject.

There is a place for Unions. The unbridled greed of hyper-capitalism assures the need for Labor Unions. Our history is filled with the violence of greed. My wife has been in a Nursing Union for most of her professional life. She is not a communist, and I’m thankful for the protections afforded by her contract. We can all agree with absolute certainty that coal miners live longer and healthier lives because of Unions. Airline pilots are in better control of their aircraft because of Unions. Teachers make more than minimum wages because of Unions. And my wife (a Registered Nurse) cannot be FORCED to clean up AIDs infected blood without suitable training and precautions, or be FORCED to care for the sick for a third or fourth straight 10-hour shift without rest simply because hospital management thinks it would be more profitable. Union leadership and the Union membership must understand the implications of uncompetitive contract awards and negotiate accordingly. Individual Union members must move to push their own leadership to be certain that they are, first-and-foremost, competitive.

SOCIAL AND TAX POLICY:

According to the Tax Foundation, the cost of federal, state, and local taxes, per capita, in 2005, was 30.5% of personal income. This suggests an income of $40,000 would pay $12,200 in taxes to somebody (federal, state, or local). It is paramount to remember that total taxes extracted are not measured on April 15. There are corporate taxes, excise taxes, fees, etc. which sneak out of the family budget through higher cost of products produced here. Services provided by government are not paid for by the individuals receiving benefits. The bill is often laid at the feet of the collective masses to be paid by extracting what can be confiscated through many circuitous routes. Possibly the most onerous uncompetitive tax is the corporate income tax.

How we choose to pay for our services is a matter of continual debate. The tax is paid through tax on personal income, corporate income, property, payroll, sales, use, etc. “Competitiveness” is therefore a measure of how expensive it is to do business here compared to elsewhere. Wages, overhead costs, and taxes are the enemy of competitiveness. A greater disparity between corporate taxes confiscated here versus elsewhere is becoming increasingly suspect as a significant detriment to US competitiveness. If taxes are high, wages must be correspondingly low to compensate. It’s not a family budget friendly equation. (click graph to enlarge)

http://www.taxfoundation.org/news/show/23561.html

Companies have been running across the border like rats leaving a sinking ship since 2000. The hemorrhage of jobs is taking its toll on the US worker. Unless the US chooses to alter the mix of taxes collected, the US worker will become increasingly less competitive, making jobs more precious than ever.

Think about it… Many countries have no taxes on wages or income per-se, choosing instead to tax consumption in the form of sales taxes or value added taxes. The US has several taxes on wages paid—unemployment, social security, and medicare are specific taxes on wages. Products produced here must be marked-up to reflect the onerous payroll taxes and corporate income taxes before they can be exported. It’s become more efficient for multi-national companies to produce goods elsewhere. Jobs have been leaving the US at unprecedented rates.

What’s the cure? Reduce services, and alter the mix of taxes collected to reflect the true cost of those services back to the within-our-borders consumer. Stop pushing our social tax burden into the cost of exported products and its foreign consumer. We become more competitive in the world by becoming more efficient. And the bill for services must be laid directly at the feet of the ultimate “decider” and consumer, the voting public. Until we set a course correction, the implications of high unemployment are obvious.

This entry was posted on Sunday, March 28th, 2010 at 5:18 pm and is filed under Ideology. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.