Supply and demand.
When a company is producing a product there are a lot of things that goes into the equation that allows it to determine a sales price. One big factor is labor cost. Obviously the more expensive labor is to produce a product then the company will have to raise the price in order to meeting profit goals. Of course there are limits to the price a company can charge for a product in order to remain competitive. Who would buy a box of Cheerios for $10 per box when you can get a box of Frosted Flakes for $4.
The other side of that coin is the labor market. Just as a company’s goal is to increase profits employees want to maximize their earning potential. Also like a company there are limits that employees can demand for their work before they price themselves out of the market. In other words if you demand too much you might lose your job to your competition. Add labor unions to that situation and you have this (h/t to Ed Morrissey @ Hot Air):
In 2009 Boeing announced plans to build a new plant to meet demand for its new 787 Dreamliner. Though its union contract didn’t require it, Boeing executives negotiated with the International Association of Machinists and Aerospace Workers to build the plane at its existing plant in Washington state. The talks broke down because the union wanted, among other things, a seat on Boeing’s board and a promise that Boeing would build all future airplanes in Puget Sound.
So Boeing management did what it judged to be best for its shareholders and customers and looked elsewhere. In October 2009, the company settled on South Carolina, which, like the 21 other right-to-work states, has friendlier labor laws than Washington. As Boeing chief Jim McNerney noted on a conference call at the time, the company couldn’t have “strikes happening every three to four years.” The union has shut down Boeing’s commercial aircraft production line four times since 1989, and a 58-day strike in 2008 cost the company $1.8 billion.
This reasonable business decision created more than 1,000 jobs and has brought around $2 billion of investment to South Carolina. The aerospace workers in Puget Sound remain among the best paid in America, but the union nonetheless asked the NLRB to stop Boeing’s plans before the company starts to assemble planes in North Charleston this July.
The NLRB obliged with its complaint yesterday asking an administrative law judge to stop Boeing’s South Carolina production because its executives had cited the risk of strikes as a reason for the move. Boeing acted out of “anti-union animus,” says the complaint by acting general counsel Lafe Solomon, and its decision to move had the effect of “discouraging membership in a labor organization” and thus violates federal law.
The argument used by the NLRB is quite absurd to say the least. As Morrissey points out this issue almost seems like it was ripped right out of the pages of Atlas Shrugged. Anti-Dog-Eat-Dog law anyone? Their logic is that it is unfair for Boeing to move their jobs to another state that has workers willing to do the job without all of the disruption caused by unions in Washington. A law prevent them from moving their jobs to another state that is more business-friendly…A company should be required to provide jobs regardless of the labor costs…It’s about fairness…and responsibility…and the public good…This is unfair…waaaaa!!!
More from Fox News:
The complaint hinged on claims that Boeing made “coercive statements” regarding union-led strikes, and then retaliated by transferring its second line to a non-union facility. As evidence, the NLRB noted that a Boeing executive said in an interview that the overriding factor in going to South Carolina — a right-to-work state where unions cannot force employees to join — was a desire to avoid disruptions. The union in Washington state has led several strikes against Boeing since the 1970s, most recently in 2005 and 2008.
But Schaumber said the complaint is a big stretch and would mark a departure. He said that if the claim is upheld, it could jeopardize any company with unionized workers that wants to expand to a right-to-work state.
“It would be fair to say it’s unprecedented,” he said.
Schaumber, a Bush administration appointee who served on the board for almost eight years including as chairman, argued that the NLRB counsel offered “no basis” for the central claim that Boeing retaliated by transferring work from Washington to South Carolina.
“The workers don’t have any claim to the work,” he said. “If the workers don’t have any claim to the work, it wasn’t retaliatory to open a new second production line. … It is simply expanding its business operation.”
It is obvious that unions do not want to play by the rules. Well, that has been obvious since the late 1800s. They need laws and restrictions in place to sustain their power and influence. Otherwise people would have to actually work for wages the market is willing to pay. What a scary idea!