Friday, February 25, 2011


In my opinion, labor unions have shot themselves in their collective feet over and over again.  Wisconsin and Ohio government employees are picketing the respective Capitols and have called in recruits from other labor unions to add support.  These government employees would like to keep the status quo, however times have changed, the economy has changed and most of us have to budget our hard earned dollars.

At issue are things that have been common in private sector industries for many years.

Wisconsin and Ohio workers are now asked to contribute to their pensions, as the States cannot bear this burden.  I am extremely familiar with the way pensions work and current industry issues.  Most pension plans have not allowed individual contributions for years.

Many, many companies have frozen the employees pension, meaning the company no longer contributes, but allows the plan and trust to remain for employee retirement.

Some of these companies encourage workers to contribute to their 401(k) plan by offering a higher match.  Too many companies have recently had their pensions taken over by the Pension Benefit Guaranty Corporation (quasi government agent that acts as an insurer for pensions) since their pension plans have fallen at or below 60% funding.

401(k) plans have been around since the early 1980's as a way to save money for retirement.  The employee puts in a little money every payday and in many cases the company puts in some matching contributions.

However the picketing government workers do not want to have to contribute to their retirement plan as all the private sector employees must.  They have been used to being taken care of all these years.

They are squabbling about healthcare insurance.  Despite ObamaCare that promised us affordable health insurance, it is anything but.

Each year most private sector employees are asked to pay a larger share of the companies health insurance premium.  These union folks do not want this to happen.

I spent over ten years working in Middletown Ohio starting in 1977.  Middletown was the home of Armco Steel and was a strong union town.

Working at Armco was a rough and sometimes dangerous job. The workers took pride in the fact they were American and produced an American product.

Woe to anyone that purchased a Toyota or Honda vehicle.  They would find their car with a smashed windshield.  Armco folks didn't cotton up to no foreigners.

These workers were well compensated with many making $60 to 80,000 annually.  This is in 1980 dollars.

I knew many Armco employees that bragged about the fact they had twelve weeks of vacation.  The high salaries, the 3 month vacations and the other benefits the employees were given was a result of their union.

Several years after I left Middletown things began to change.  More steel was being imported from Japan and Korea by U.S. automobile manufacturers since it was cheaper.  Bethlehem Steel in Pennsylvania folded. Any stock given to the employees was worthless.

Armco tried to survive, but feared the worst. In 1989, Armco's management reached a deal with Kawasaki Steel of Japan to purchase 40% of the company.  The name changed to AK Steel.

In 2004 union workers threatened a strike and the company held a lockout that resulted in loss of unions jobs and eventually closed their Ashland Kentucky plant.  The company moved their headquarters out of Middletown to nearby West Chester Ohio.  The American and Japanese flags both fly over the plant these days.  The once strong union is now a shadow of things that were.

I foresee this happening with government unions throughout our Country.  The government is not busting unions, unions are doing it to themselves.

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