Cartoon 760: Soufflé

The Capitalist system is a tug of war. Business and industry will do whatever they can get away with in the pursuit of profits, nothing is out of bounds. Yet we persist in ascribing moralism to these institutions. In a Capitalist system business and industry is only kept in bounds through regulation and leverage. The labor movement provided the leverage.

The major attack on the labor movement really started with Reagan. The Air Traffic Controller’s strike was his hallmark action. In case you do not remember it, Reagan fired all the Air Traffic Controller strikers. But the real poster child of labor relations during this period was Caterpillar, the maker of heavy construction machines. They went so far as to shut down for over a year until the union collapsed.

The labor unions also shot themselves in the foot. The knowledge workers and the college educated were on the rise. The unions took the initial position that they did not want them in their ranks. It proved to be a very, very bad decision. By the time they realized they needed this group it was too late. The National Labor Relations Board had allowed this new class of employees to fall into the labor classifications of “exempt and non-exempt used for management. Therefore they could not unionize and be guaranteed to keep their job. The unions were also strategically blindsided by automation and “off-shoring”. Finally, the national labor unions cohesian and leadership fragmented.

Looking at things today, it is hard to imagine how the unions could have been so blind about the need for knowledge workers in their ranks. But if you look at things through the eyes of its members it made sense. The knowledge workers were people that did not do years of apprenticeship and move up a seniority ladder. They would by-pass the union system of things. A system union members had invested years for previledge and advancement. The knowledge workers also tended to be younger, self confident and no respecter of age.

Since the 1970s the American standard of living of the workforce has been declining. The decline has been masked with credit that allowed the life style to still advance. It was masked with a liberal housing market. It was masked with low interest rates. It was masked with a message of prosperity. The reality has been business and industry using massive lay-offs to boost share holder value. The reality has been stagnate and retreating wages. The reality has been take backs in benefits. The reality has been a rising cost of living not reflected in government inflation calculations.

These events track with waning power of the labor movement. Today, they are nailing the coffin shut. In the end it will back fire. The American Capitalist system is a balloon constantly being blown larger. The hand writing is on the wall. In a generation or two America will be communist.