Labor Day – What Should We Celebrate?
The Labor Day holiday has been an official United States holiday since 1894. It was a day created to recognize "the strength and esprit de corps of the trade and labor organizations." It was another symbol of the growing power of the Progressive movement and its Socialist philosophy with its intent to involve Government in regulating all aspects of society deemed unfair.
What is organized Labor? What really allowed it to come into being? There have long been trade organizations that have sought to reduce competition by using Government to restrict entry into a field. The real growth of labor however could not come until the 1880s when the first real corporations, the railroads, came into being. These new business entities with their vast pools of working men provided fertile ground for the new labor movement. These new corporations with their vast resources, along with the rapid rise of new industries, brought into play new free-market dynamics – complex industrial products that could take months or longer to produce. This required businessmen and corporations to invest large amounts of money in material and labor long before any product was sold.
When these new corporations finally sold their products and some began making substantial profits the labor movement felt cheated. They felt workers were being deprived of the full value of their work. Some of the most limited government thinkers of the time such as Robert Ingersoll preached the idea that factory workers were not paid fairly. He stated, “There is something wrong in a Government where they who do the most have the least.”
A modern example may best explain why this philosophy is invalid. Currently I know an engineer who works for Boeing Aircraft on the 787 Dreamliner production line. The B787 design started in the late 1990s. In 2000-2003 time frame the design progressed and final production plans were announced. Instead of attempting to manufacture much of the plan by itself, the B787 was to be a worldwide effort. Almost all major components were to be manufactured at plants around the world and shipped to the Boeing plant at Evertt, Washington. The list of producers is staggering and is explained in detail in this Wikipedia article: HYPERLINK "http://en.wikipedia.org/wiki/Boeing_787" http://en.wikipedia.org/wiki/Boeing_787
Production of the aircraft officially started in 2005 with planned deliveries in late 2008. Today due to production delays, that date in now late 2009. If that holds that will be almost 10 years of development and production before the first plane is sold. The cost of this must be in the tens of billions of dollars. All invested by people and organizations who believe there will someday be a profit form this aircraft – maybe. The aircraft business has not been kind over the last 100 years. Of the scores of initial companies there are only a handful left in operation.
This brings us back to the concept of “Giving every man the fruit of his own labor.” Currently at Boeing the Machinist Union is considering a final contract offer before voting whether or not to strike on September 3rd. According to the engineer who works on the assembly line, there have been loud union activities on the assembly line for weeks. Air horns, music, rivet guns tapping on steel girders. Activities designed to create the emotion necessary to support a strike among the machinists. News articles relate that IAM-represented employees (machinists) earn an average base wage of nearly $27 per hour, or nearly $56,000 per year before overtime. With benefits and other compensation, total compensation for IAM-represented employees is valued at around $91,500 per year. According to IAM official this is not enough; they want more. These machinists and every other individual at Boeing working on the design and development of the B787 as well as numerous foreign workers over the last decade have been paid full wages and benefits. No matter how many more years it takes for the B787 to turn a profit, if ever, they will continue to receive their wages.
This concept seems lost on organized labor. They only view the short-term. They believe there are no bounds to the wages, benefits or pensions a corporation can pay. They are wrong. As the employees of the once great American automobile manufacturers have found out, there is a long-term. There is competition in the world. Now they face plant closure after plant closure and soon they will find their pensions are lost when GM, Ford, and Chrysler fall into bankruptcy as they must.
When Labor Day began a little over 100 years ago, the United States was the greatest manufacturing power in the World. Without the capital and finance, without industry, without individuals who dream and take risks this could not have happened – the holiday we call Labor Day would not have been possible. Let’s hope the next 100 years see a return to those free market values.