We have reached the point where private unions should switch their allegiance from the Democrats who have only made workers’ plight worse to the libertarian Republicans. Now that would have sounded ludicrous 6 years ago, but today it makes perfect sense. I’ll try to explain why with a bit of history, analogy and stats.
The Democrats have done a wonderful job raking in campaign dollars from the unions regardless of what the workers believe. Union dues going directly to a single party is a bad idea b/c it will breed division. Division has been sown between the unions and the Republicans, and between unions and their employers, meanwhile cheap imports have flooded the US market in automobiles, electronics, clothing, furniture and damn near everything else we use to make. This division has also fueled employers like the meat packing industry to hire illegals to drive wages down…this has also occurred in non-unionized industries like technology as well. Both outsourcing overseas and HB1s have also driven wages down (albeit much slower). Divisions between US citizens does not help us win against a flood of cheap labor and cheap goods from abroad, but it does drive campaign funding.
My father worked at Cincinnati Gear for 25 years, and was a proud member of the AFL/CIO. He went through a number of strikes with the union to try to drive wages up. I remember the 2nd to last strike where they actually lost ground on wages and that hurt our family a great deal. The last strike they went on was after my father lost his sight and had to go on disability. This last strike was during a recession. Cincinnati Gear warned the workers that if they went on strike they would go bankrupt. The division between the union and the company caused distrust between the two…the strike happened, the company folded and ultimately only the workers were hurt. The AFL/CIO had the auto plants, and GE to keep paying off their political stooges…the workers…were screwed.
The typical talking track of old school Republicans would be that the union was greedy, while Democrats claimed that the company was unpatriotic or greedy. Neither talking track helps the workers, but it does drive politics. In the grand scheme it wasn’t either the union or the company that was the problem, it was distraction driven by division. The distraction is simple: The US under both parties has devalued our currency thereby making our money worth less and your salary worth less. The distraction is: The US has driven up taxes and regulations to the point where you cannot compete with cheap foreign labor, and cheap foreign goods b/c your dollar doesn’t go as far at Walmart. The distraction is: We have entered into agreements with the World Trade Organization and NAFTA that we cannot tax cheap, low quality goods costing us good American jobs. The distraction is: the Divisions keep us occupied pointing fingers at each other while China gets the upper hand, and our parties move farther from the middle.
42% of Americans now identify themselves as independent. Not Republican, not Democrat…Independent. Why? B/c the parties don’t represent the great middle, but instead the fringe of both sides and Division sown between workers and companies run and worked by Americans drives politics. The politics of division and distraction offer workers nothing but empty promises, empty paychecks, and no future.
This is why the unions need to turn their back on the Democrats and support libertarian Republicans. The new libertarian Republicans want to end the IRS and income tax and replace it with the FAIR Tax. I won’t get into great detail here, but read up on it at FAIRTAX.org. Think of this. You get taxed somewhere between 10-38% in Income Tax, 15.1% in FICA (yes your company pays about half of that), X% income tax at the state level, 2% in Obamacare tax, your benefits that you have fought for in the way of good healthcare has or will be eliminated/taxed in favor of crappy government mandates. Now the company you work for also pays 38% in corporate tax, plus 15-35% in Capital gains. How can you compete again with cheap overseas labor and goods?
Yes, there are write offs and tax deductions, but there is a phenomenon called “good enough.” Americans with their reduced income and buying power are happy to buy something that is “good enough.” I am continually told that Americans want to buy the best American made item they can…sure. We buy the cheapest thing that meets the need, fully knowing the cheap good from overseas will break and we can buy the next cheapest thing with more features next year. The division mentioned above also drives some Americans to deliberately buy foreign almost as retaliation. Both scenarios help no one but China.
Let me give you 2 more examples. When I was in college studying broadcasting, we were told that when HD came out no one would watch anything again in low quality analog. The quality would be so good people would forsake their old TVs for HD. Years of delays, and government subsidizing people did buy new TVs but did so b/c they were flat….most cable channels are still broadcasting in low Def. To make the point even more so…look at YouTube, Vine and other online videos taken on phones. Low quality is watched more than network TV. Even the News has video taken from phones, Skype and other low quality devices b/c the market seems to still cater to “good enough” which is even lower quality than old standard TV. And now all the TVs and accompanying devise are made abroad…no more RCA.
Another example is the housing industry. Gone are craftman homes, and instead we have pre-fabbed junk going up as McMansions. Low skill labor can insert tab A, into slot B and put these things together. People buy them knowing they will move in 5-7 years when they begin to fall apart. Forget repairs, just build a new one farther out where the schools are “better.”
To level the playing field for both our workers and companies we need a FAIR TAX. The FAIR TAX works similar to a sales tax, but only applies to new goods which are non-essential. If you buy a new car, it’s taxed. If you buy a used car there is no tax. If you buy food at the supermarket, there is no tax. Buy food at a restaurant, it’s taxed. Items coming from overseas are taxed when they land b/c transactions occur here. NOTE: this is not an import tax b/c the above WTO and NAFTA treaties forbid import taxes, instead it’s a transaction tax as the cheap goods are purchased at the docks. The combination of no Income tax for workers and companies make us competitive again, and the FAIR Tax ensures that cheap labor and goods have to pay to have access to the US market.
Now I understand entrenched loyalties in the unions and the Democrat party would prevent such thinking. The media would tell you that the FAIR Tax would cost jobs…but the CBO says it would greatly enhance our domestic output and bring in the same amount of tax dollars to the Treasury. There is even a prebate refund in the tax to pay for low wage earners rent and food. Labor used offshore would be treated as a good and taxed as well, driving good paying jobs in Tech back to the states as too. Keep this in mind, the CBO has estimated that over $3 Trillion dollars are being held overseas by US headquartered companies b/c the US has the second highest corporate tax rate…that is almost double our current budget deficit. How much of that money would come back in the form of investment and new jobs if we were no longer punitive and instead had a FAIR TAX (estimates are almost 90%)? We are a connected world, we need to acknowledge this and play the correct game.
Division based on politics, salary, and greed would disappear with the introduction of the FAIR TAX. The unions should break their single party policy and support the goals of bringing manufacturing and manufacturing jobs back to the US instead of policies developed in the 1930s which have only driven jobs out of the US. It’s time to partner instead of divide and distract. The game has changed, our allegiances should as well.