Auto Industry Bailout

Auto Industry Bailout

There is a lot of news recently about the Democrat’s leadership supporting a bailout of the US automobile industry. US automakers have arrogantly managed themselves out of their market. Yet they have convinced Congressional Democrats to bail them out. That seems odd since Democrats are big union supporters and big businesses are anti-union. So why would Democrats want to bail out the big automakers?

For the sake of big labor unions, the Democrat’s leadership is willing to rescue big businesses. Labor unions need big business. Unions lose their effectiveness when their workforces are spread over many companies in an industry. When that happens unions are forced to compete with each other. It becomes almost impossible for a union to dominate an industry when the industry is dominated by many employers. A strike called by a union under these conditions only affects a few unionized companies.

A labor union controlling the workforce of a company that dominates an industry also dominates that industry. When that union calls a strike the entire industry suffers. And it is easier for unions in an industry dominated by only a few companies to coordinate their efforts. These big unionized businesses are forced to share their profit advantage with their unionized workers. The workers, of course, must share their extra pay with the union’s management by paying dues. And big business’s domination over workers is replaced by big union’s dominance.
It has been said that the power of big business is limited only by the power of government. In other words, a business cannot impose either it’s will on consumers or forcibly acquire rights to property without the government’s ability to give it that power. The same relationship to power exists for unions. They can only be as powerful as the businesses whose labor force they control. Congressional Democrats need to save big businesses to save their big union constituents.