Flawed Logic # 7: Outsourcing, Unions and Cheap Labor‏

During the course of a wonderful family reunion visit with my grandfather in Mid-Coast Maine I encountered a case of.......(Duh,Duh,Duh!) "Flawed Logic!"

This time it came about in a discussion with a family member while paroozing the isles of a local grocery chain. The subject was jobs, and more specifically, the lack of them in America. The discussion, quite logically, led to the topic of outsourcing. It was then that the.....(Duh,Duh,Duh!) "Flawed Logic!" Reared its ugly head.

The reasoning, rather simply, went something like this: "Unions are destroying our country. These greedy workers are hurting businesses and forcing them to outsource work overseas."

I, being a loving family member and on (a very short and low-budget) vacation thought twice before responding. I decided instead to change the subject; "I can't believe they can sell liquor, wine and beer in the grocery store here!"

This very troubling logic and understanding of the world came from a known-to-be conservative family member whom I love very much, but have had unfruitful disagreements with in the past. It was definitely best to enjoy our short stay together and not spend time trying to convince each other of things that neither of us would likely concede.

The problem, however, was that this comment kept repeating itself in my mind all afternoon and was driving me nuts! So, at last, when my wife and I lugged our bags and three sleeping children into the hotel at 9pm, I picked up my phone and began typing this general response. (Yes, I said cell phone, and yes my thumbs are killing me right now!)

Response: Unions are the cause of outsourcing? Do you know how many private sector workers are actually in unions? They only make up 7.2% of the workforce.* Even in the 70s and 80s, when the outsourcing madness began, they only numbered 13%! Now think about all of the countless companies that shipped jobs over seas; the overwhelming majority were non-union businesses. How could unions have caused their non-union competitors (who already had a competitive advantage because of lower bottom lines due to cheaper labor expenditures) to start shipping their production lines overseas? Better yet, suppose we went back in time to 1978 and passed a constitutional amendment that outlawed unions. Would this have stopped outsourcing? Would all of these profit-seeking corporations have ignored the incredible competitive advantage of using cheap labor overseas? Absolutely, positively NOT! They want maximum profit, and are required by law to do whatever it takes to deliver this.

[Side note for my well intentioned "liberal" friends: I've got to say that even if the Democrats had defeated Reagan the problem would still exist in essentially the same way it does today.]

The problem is not unions, as conservatives argue. The problem is not Republicans, as liberals argue. The problem is "the coercive laws of competition."

Capitalists are always seeking a competitive advantage over other companies in order to increase their profits. So, as soon as one corporation sees how much more cheese it can rake in by capitalizing on cheap labor and weak environmental laws abroad, then every other capitalist must do the same in order to stay competitive and remain in business.

The problem is inherent in the system itself.

One possible solution, I might add, could actually be more unions! Unions in places like China. This would force stronger labor protections and higher wages in these countries which would in turn remove the incentive of U.S. Companies to seek outsourced production overseas.....

Well, that's it for this time folks. From "Up North" Maine, this has been another case of......(Duh,Duh,Duh!) "Flawed Logic!"

See you next time!

*union member statistics can be verified here: http://www.bls.gov/news.release/union2.nr0.htm