December 11, 2012

Labor and Oligarchs

In the 1960's the auto industry was part of an oligopoly that included the UAW. Before imports, they could raise prices and pass on some of the profits to union workers in the form of higher wages. Now they longer can do that.

Today more industries are controlled by oligarchs that do not include unions. These oligarchs are not buying off the unions because world competition does not allow it. If Apple raised its prices on their smart phones to pay their workers more they would lose business to Samsung in South Korea.

By "crushing" oligopolies the consumer would have more choices because of competition and labor would have higher wages because there would be more companies seeking to hire good workers.

The problem of competing against foreign labor would still exist, however it would be somewhat offset by technology, shipping costs, etc. It would also force shareholders at the domestic companies to put the squeeze on wages paid to their board members and senior executives in order to remain competitive.

Today the "Captains of Industry" are paid egregious salaries to maintain the companies monopolistic position in their respective industry. After enforcing anti-trust laws they will once again be paid to deliver the products and services the consumer wants and to run an efficient operation.

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