Saturday, April 16, 2011

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Business And Labor

Michael Barone, in his book “Hard America Soft America”, explains how ‘incentive and striving for excellence, by doing the best job he could, was removed from employees by unions and government regulation’. There must be a balance between business and labor, and also government oversight of them both. An industry, if it is crushed by the controls of government and labor unions, cannot survive any more than a worker can look toward a better future from his own industriousness under the same restraints. If incentive is removed from both industry and labor the result is mediocre production with inadequate results and low quality. A worker’s incentive and satisfaction is directly tied to the employer’s recognition of his efforts. Industries’ incentive and satisfaction are directly tied to the production of the employee. When either entity gets the upper hand, the result is distraction and destruction.

Generally speaking, entrepreneurs will not invest their time, treasure and effort if they know that labor and government will control their destiny to the point where they cannot make a just return. Workers would not, and should not, work for employers who do not respect their efforts with just reward. As I have said in the past, you should not be in business if you are not willing and able to pay your employees an adequate and livable wage. A head of household should make enough to supply his family with their basic needs. Based on his increased production, the ‘wants’ of his family should be supplied out of the amount of that increased production and its compensation. In other words, the more and harder he works, the more he makes and the family can have those extras.

Prosperity is the answer. Employers and employees, that work in harmony, for the betterment of all involved, leads to increased income for both. My grandfather started a delivery business similar to what UPS does today. He started with one horse and wagon in Baltimore, in 1915, and built what eventually became “Consolidated Delivery Co.” into a large fleet of delivery vehicles. It was the first to home deliver for Montgomery Wards and The Hecht Company. He treated his employees well, and they in turn worked hard for him. When the teamsters tried to organize in his business, both he and his employees were against it. He treated his employees better and paid them better than similar businesses. Because of this, he was respected and admired by those employees and they were loyal to him. When union tactics were employed, such as threats, intimidation and even being shot at, his employees protected him. In the end the union failed because his company was run like a family, each helping out the other. Today, due to government regulations and the fact that Maryland is not a right to work state, this joint effort of employer and employees probably couldn’t happen.

Employers who supply the least amount possible in wage and benefits to their employees do so at the detriment of their company. Employees that operate at less than optimum efficiency do so at the risk of their employment. Thus we see the rise of the labor unions, and the adversarial atmosphere in the workplace. When a business is run the way my grandfather ran his company (like a family) both sides win. “A workman is worthy of his hire” and “those who will not work, should not eat” .

Businesses, whose employees are less than satisfactory in their duties, will look for better employees. Employees who are not treated well by their employers look for better employment. I once worked for an auto parts company that had set a limit of $10.00 per hour for their countermen (the people who service the customers). Their theory, as stated to me, was that they wanted only those workers who wanted to be promoted and needed that incentive of limited income as the stimulus. The result was a generalized lack of good countermen. Professional countermen were appreciated by some of their competitors, and thus hindered their expansion into the commercial end of the business.

Both the employer and employee should be able to look on the other as “good and faithful servant” . Those organizations in which respect is supplied by both sides are normally and rightfully prosperous.

Rick Rahn


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