The counter balance

What is worse, a business that pays people so poorly that they cannot afford to live without support from the government or a union that places such restrictive rules on a business that it cannot change to keep healthy?

Obviously this question is a trap. But it is a trap that can and should be avoidable, (and generally is avoided).

When employees of a business feel well treated they tend not to need the power of unionization. And when companies consider themselves the sum of all their employees, investors and customers then the company treats everyone well and doesn’t need to fear that unions will limit their ability to thrive.

When a business finds ways to consider it’s employees in different “classes” there is always the risk that the disparity between the classes will grow in ways that are not reasonable.

Everyone loves to be treated as an individual, and want’s to be rewarded for his or her unique skills. When a cake decorator becomes a master at his/her profession they would like to be rewarded for their excellence. If they get the same pay as someone else who is not as skilled at piping, they have less incentive to hone that skill.

When someone founds a business and spend decades nurturing and growing that business they obviously deserve the rewards that come with that level of dedication.

And when an employee is hired to perform a function for that business they don’t expect to get the riches associated with being the business owner.

There are well documented corruptions of the worker – business relationship, where workers were coerced to either take on highly risky behaviors or were placed in positions of financial subservience where they could not afford to lose their job yet were not paid enough to live. The Spector of these relationships can be seen in many large organizations today.

When unions negotiated benefits as an offset for lower wages, this was a way of a business delaying these payments to their workers. But often the long term costs of these benefits are now causing these very businesses to try and renegotiate. Some of these negotiations see pensions being reduced, while other are through the courts with companies asking for their previous agreements to be swept aside as part of pre-bankruptcy considerations.

I always thought that unions accepting lower pay in exchange for amazing retirement plans was naïve, as there is always the risk that companies can change the rules later.

Companies that treat every employee as a unique individual, providing healthy profit sharing between all levels of employees, investors and customers and not creating barriers between any levels of employees are most likely to not suffer the excesses of union mandates.

But the pressure to reduce costs and increase profits is always going to make this very hard.


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