F. A. Hayek – How Unions Cause Unemployment
Posted by iusbvision on January 12, 2011
Indeed when the price of labor is artificially increased beyond the value of that labor several things happen:
1 – Since there is only so much of the percentage available from variable costs for labor therefore union over reach causes there to be less employees.
Think about it. How often do you stand in line at Kroger when they obviously have a shortage of cashiers? So the result is not management vs. employee, it becomes employee vs. employee; which employee will get whacked because there is only so much available for labor?
2 – At first this causes companies to be more efficient, but eventually that efficiency comes at the cost of labor. For example: have you noticed that self checkout machines came first at union grocery stores? The stores will increase technology to eliminate positions.
Ford Motor Company has a new high tech plant that can make five cars on a single production line. Since union rules do not allow workers to use that technology and make so many different lies Ford has made these new plants in Canada, Mexico and Brazil.
3 – When is the last time you went to a gas station and got service by a young apprentice? Why do you think that is?