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September 2, 2013

Labor Day Economics

Steven R. Berryman

Happy Labor Day, America; many of you are reading this later in the day because the long weekend allowed for sleeping in. As opposed to the original justifications from the Industrial Revolution gone-by, strangely we celebrate mass consumerism on this holiday weekend, and “shop ‘til we drop.”


Be nice to the retailers you meet along the way; they work hard, and most are not unionized. For them, Maryland is literally a “right to fire” state!


Today, those associated with the retail community will actually be suffering the exact opposite of the benefits of the celebrated inroads made by reforming labor law; they will be working extended shifts with few breaks, standing for hours on end to service. Federal, state, and county employees are enjoying their three day weekend benefit package.


Government unions have surely done their jobs well.


Conversely, the private sector accounts for far less union membership. Overall, 11% of workers belong to a union; in Maryland just nine percent do; a record low with a declining trend.


Why fewer unions in the private sector? Perhaps private sector unions would do better if they did not concentrate their members’ dues into liberal political campaign war chests?


Of course, the “Hatch Act” prohibits meddling in politics by government unions.


A huge “half-boxcar” sized ad, courtesy of union dues paid into the AFL-CIO, ran on the back of the “Local” section of the Frederick News-Post on Sunday, as they self-congratulate. It reminds all to THANK A LABOR UNION. Featured sponsors in the fine print include: Communications workers, government unions, teachers unions, auto manufacturers unions, building trade unions, air traffic controllers, municipal unions, utility workers, boilermakers, letter carriers, fire fighters, and many more. Quite a long list.


No retailers.


In nearby Washington, there are calls to force a raised minimum wage on Walmart to be $4 higher than the federal minimum wage. In response, Walmart has threatened to shutter their existing stores, and to forgo any new store starts. The pro-argument is that all workers deserve a livable wage, no matter what the job.


Frederick is entertaining – no, is inviting – Walmart to build a third superstore on its west-end now; amazing draw is needed as the city itself is but 60,000 strong. That’s retail power...born on the back of a profit margin supported by line-level workers.


Of course, without the competitive cost of doing business advantage Walmart enjoys by fostering an environment of low-cost operation, there would be no Walmart. They do battle based upon pricing, and leave product knowledge and customer service reputations to others.


[One other leading factor contributing to Walmart’s market dominance is that their “brand” is – ironically – considered to be very American, in the league of Coke, Harley-Davidson, Betty Crocker, etc., as they promote so many Chinese goods.]




Do take advantage of the favorable buyers market today, as retailers cut each other’s throats for market share. And some of the proceeds do eventually trickle down to even the lowliest cashier and shelf-stock workers…


…who take pride in working for the day, as opposed to leaching off of the social safety net of our entitlement society.


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