We all make judgments based on our prior experiences, so for a moment or two, I would like to wax autobiographical. When I was growing up, my father had a retail establishment that was extremely busy during the Christmas season. In the early 1960’s, before it was mandated that high school students were to be paid at least minimum wage, my father used to hire teenagers to wrap gifts, run errands and do some stock work. Once Washington required he pay them minimum wage, the benefit they provided the business was less than what he had to pay them. Those jobs for teenagers disappeared.
In that same time frame, the town where I grew up, Beaumont, Jefferson County, Texas, had a very large oil refining industry which employed a huge percentage of the local residents. The union, the Oil, Chemical and Atomic Workers, were extremely powerful, and managed to gain enormous concessions from industry. What many did not recognize was that as part of routine maintenance, about 20% to 25% of a refinery was dismantled and rebuilt every year. Management of the oil refining companies realized that as part of the existing protocol, they could rebuild in a different community, where the OCAW was not as strong. The jobs left Jefferson County.
A dozen years ago, I became curious, so I went online and researched a number of parameters from 1890, when unions were being organized, until 1941, when we entered World War II. I looked at the unemployment rate, as published, the GNP, as it was recorded at that time, average wage, and the political issues of the times. Until 1929, there was a progressive increase in GNP, employment rate, and wages, until the bubble burst. We did not return to 1929 employment rate and GNP until we started manufacturing war materials for Europe in 1939. The interesting side observation was that the average wage was about what it was in 1890, or about 1/3 of what it was in 1929.
Where are we today? Certainly it is expensive to hire American workers. Why else are so many illegal immigrants taking American jobs for less than union wage. Why are states with right to work laws experiencing less pain of unemployment than states where unions are dictating who can get jobs and at what compensation? We cannot blame unions, alone. What does it cost in the way of payroll taxes to hire an American worker? Where have all the jobs gone? They have gone where the cost of labor is not more than the value it provides – other countries. What can be done to restore American jobs and productivity? I can think of two things that would provide immediate help. First, let’s stop legislating unfair advantage to unions. Second, decrease payroll taxes, or even provide a prolonged holiday from such taxation. It is counter productive. Can we expect to see either happen? I doubt it. Our current legislative bodies are addicted to the tax revenue and union contributions. So, we will continue our downward spiral, until we change the population of law makers.
Dr. Barry Jacobs is a Reproductive Endocrinologist, practicing in Carrollton, Texas, a northern suburb of Dallas. He completed his residency training in obstetrics and gynecology at Baylor College of Medicine in Houston, and remained at that institution to become its first fellow once Baylor achieved accreditation for an advanced training program in Reproductive Endocrinology and Infertility. Dr. Jacobs has served on the faculty of several medical schools and was director of Reproductive Endocrinology at Texas Tech Health Science Center in Amarillo. Currently, in addition to his clinical activities caring for infertile patients and those with recurrent pregnancy loss, he is Chairman of the IVF committee at Baylor Medical Center in Carrollton.