Union Power Undercuts Business Flexibility

By Kevin Mooney



Successful business leaders who must navigate their way through challenging economic climates understand how important it is to maintain flexibility and dexterity in their decision making.



Apparently, no less than the U.S. Postmaster General John Potter has come around to this way of thinking in response to three separate studies that show his agency stands to lose $238 billion over the next decade with radical issue.



Recalcitrant labor unions figure prominently into the equation here as unreasonable demands intersect with economic realities. Three studies -- by Accenture, the Boston Consulting Group and McKinsey and Co. -- reviewed the Postal Service's books and presented 50 options for cuts and new services. The agency's business model is so irredeemably bad to the point where it cannot be salvaged.



In upcoming negotiations, Post Office officials will pursue greater latitude with their union counterparts especially where health-care costs are concerned, Potter said. He also insists that Congress revoke a 2006 law requiring the Postal Service to prepay its retiree health benefits, to the tune of $5 billion per year.



No other federal agency or Fortune 500 company makes such payments, Potter observed.

There is a larger issue at work concerning the relevance of organized labor to the needs of workers in the 21st Century and its impact on America's competitive posture.



The manufacturing economy of the 1940s and 1950s has been replaced with an information-based and knowledge-based economy. Robotics and computers have replaced the kinds of jobs where the same functions were performed day in and day out, James Sherk, a labor expert with the Heritage Foundation has noted.



"Who you are is what matters," Sherk says. "You are not just a cog in the machine. Individual talents, skills and initiatives are what count. In an economy where workers are much more mobile between jobs and there is no expectation of having one job for life unions make less sense because collective contracts are not as relevant."



The political influence labor bosses have over the Obama Administration and Congressional leaders also translates into business uncertainty. Pending legislation that would dramatically benefit Big Labor has worked against business and job creation as investors and owners question whether or not to expand.



Making matters worse, coercive measures like the anti-democratic card check bill and the binding arbitration would most likely drive small business owners out of business.



Policymakers should look for ways to reward and encourage entrepreneurs who risk their capital instead of legislating in favor of union bosses who blithely ignore economic realities.



Kevin Mooney is a contributing editor to ALG News Bureau and the Executive Editor of Timescheck.com.