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Location: New Albany, Indiana (Greater Louisville)
11,974 posts, read 25,483,414 times
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Let's say that Mr Yang Wang opens a Chinese restaurant in Kansas. All his workers are unionized and get paid twice as much as workers at any other Chinese restaurant in town. Despite growing consumer demand for smaller portions he continues to only sale very large and expensive lunch and dinner specials. He gives all his retired workers lifetime benefits that a millionaire would love. Despite constant costumer complaints that his food and service aren't as good as other restaurants he refuses to improve his restaurant's quality.
Question: Should Mr Yang Wang get a government bailout so he can remain competitive with other Chinese restaurants???
Last edited by censusdata; 12-21-2008 at 06:50 PM..
Maybe he should improve his food and service (#1) so that he can afford to pay for his poor desision to pay high benefits to his former employees (#2).Sounds more like maybe he should get out of the business if he's constantly in the red or concentrate on how the other guy is getting all the customers to visit his "restaurant".Maybe you're putting cheap ingredients in your recipes-thus ending up with food that makes people sick and causing them to visit the "doctor" for the same problem time after time.If all else fails then close down the business - there's plenty of restaurants that serve good food and have happy customers.Competition is a good thing - only the strong survive.
Kind of a poor analogy, in a union situation the union pays the pension to the worker who worked some 30 years to supplement the social security payment of $850 a month.
Mr. Wang is selling only to those that would not have bought from him unless he was union.
Yes, I am a union employee. I know others who try to work as I do who complain that they do not want the union telling them what to do. "They must not love their families as much as I do". Yes, I bring home twice as much as they do, and it is not enough. You should see the stars in their eyes when they get to go to a prevailing wage job.
1. If Mr. Wang's goes out of business, a handful of people will be unemployed. Suppliers of everything from food to napkins to booze will barley notice that the restaurant has gone under. If GM goes under we have hundreds of thousands of unemployed, decreased tax revenue to the states and federal government, combined with increases in food stamps, and welfare.
2. The commitment that I have trying Mr. Wang's again after hearing the menu has improved is the cost of a meal... under $100 so if it turns out that portions are big and the food has not improved, I have wasted an hour of my life and a hundred bucks. If I buy a Buick next time around, the commitment is to $25K+ depending on the car that I buy, plus car payments for 3-5 years. Along with that I may get lower resale for my Buick in years to come.
Yet another problem to add to this analogy...Most of Yang Wangs competition has been receiving generous tax breaks and other financial incentives for building new "restauarants" in various states. Meanwhile, Yang Wang still operates in an ancient "restaurant" and is forced to pay taxes and other infrasturcture fees that his competiton does not pay...
The money that the Union or the company pays the retired employee does not come from thin air. It has to come from the added price of the car. The company doesn't print it's own money, neither does the Union. In the end, it comes from the buyer.
If Mr. Wang could reduce the cost of his employees, he might be able to improve the quality of his food. The bottom line is that he is charging too much for a meal, that the customer is not convinced, is worth it.
If the employee didn't have to pay union dues, it would just like getting a raise.
Yet another problem to add to this analogy...Most of Yang Wangs competition has been receiving generous tax breaks and other financial incentives for building new "restauarants" in various states. Meanwhile, Yang Wang still operates in an ancient "restaurant" and is forced to pay taxes and other infrasturcture fees that his competiton does not pay...
The big three receive just as much in the way incentives and tax breaks from the various states and cities they operate in as the imports do.
Additionally, Detroit trio are now getting bailouts from Canadian and Australian governments
Lastly, the imports have to meet the same governmental criteria and standards imposed on all vehicles sold here.
The "unfair advantage" argument is smoke and mirrors.
The American automakers had home court advantage and threw it away.
Check please!
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