This page was last updated on August 29, 2004.

Is Mr. Finch writing from a labor union script?

Below is a detailed critique of the subject letter.

“To quote a famous infomercial: ‘Stop the insanity.’  The insanity that I’m speaking of is the constant attack on the American wage-earner.  How much more are we supposed to endure?  First came NAFTA, which sent countless jobs out of the country.  Next was our current president’s idea of outsourcing.”

[RWC] What attack is it, competition?  Sure NAFTA sent some jobs out of the country, but unemployment after NAFTA continued to drop.  That’s because we generated more jobs and imported more jobs than left.

Oh, by the way, the real disposable income of American workers has increased every month since at least January 2003 with the exception of September 2003.  That’s some “attack on the American wage-earner.”

If you believe President Bush invented outsourcing, you’ve missed at least several hundred years of history.  Production of goods has always taken place where it made the most economic sense.

“Now, let’s take away people’s overtime pay, pay that is badly needed just to make ends meet.  I thought that we, as Americans, wanted to bring the rest of the world up to our standard of living.”

[RWC] Regarding overtime, a net one million workers will gain overtime protection.¹  Some of us need to stop relying on our labor union officials for information.

“It seems that we are lowering ourselves to the standards of other countries.  We are led to believe that these measures are needed to make us more competitive in the global market.”

[RWC] We are lowering our standards?  “The average poor American has more living space than the average individual living in Paris, London, Vienna, Athens, and other cities throughout Europe. (These comparisons are to the average citizens in foreign countries, not to those classified as poor.)” ²

“Why do the people with the five-figure incomes always bear the brunt of the sacrifice?  When was the last time you heard of our government launching an attack on the outrageous salaries, stock options and benefit packages of CEOs?”

[RWC] Before I respond, I must admit I feel some executive compensation packages are over the top.

“Why do the people with the five-figure incomes always bear the brunt of the sacrifice?”  It’s simple; it’s a matter of numbers.  Let’s assume a CEO makes a salary of $5 million and the company has 20,000 employees.  Let’s also assume the company has done all it can do to improve its performance without touching employee pay but the company still needs to cut expenses by $100 million.  You could eliminate the CEO salary – and that of all other high-level officers – entirely and not make much of a dent.  The only way to get the required expense cut is to spread the cut across 20,000 people.

With some exceptions – like minimum wage laws, business owners can pay their employees whatever they want.  That includes CEOs.  If owners want to overpay their CEO and other business officers, that’s their business because it’s their money.

That said, the government did “launch an attack” on the high salaries of company officers.  Beginning in 1993, only the first $1 million of nonperformance-based salary is tax deductible.

“The labor movement’s many accomplishments are systematically being stripped away.”

[RWC] Please provide a list.  The fact is, this statement is false.

“How do you justify handing out so much as one cent in bonuses when in the same corporate structure, people are losing pay, benefits or even their jobs?  Conservatives say that liberal policies handcuff the American capitalist spirit.  That government should just mind its own business.

“Why don’t they take their own advice?  Implementing government measures that turn the American work force into basically a slave workforce isn’t exactly minding their own business.”

 [RWC] The goal of business management is to maximize the wealth of the business owners, not the workers.  In some cases, maximizing the wealth of the owners requires increasing worker compensation and hiring more workers.  In other cases, maximizing the wealth of the owners requires cutting worker compensation and jobs.  If the strategy does indeed increase owner wealth, the management has earned its potential bonuses.  That’s not going to go down well with the workers, but management’s first responsibility is to the owners, not the workers.  I don’t agree with bonuses not tied to relevant performance goals.  For example, I have a tough time buying bonuses for U.S. Airways executives.

Please explain which measures are turning us into slaves.

If you want the government to mind its own business, we must eliminate the federal and state Departments of Labor and void all labor laws.  Is that what you want?

By the way, conservatives tend to believe in limited government, not no government.  There’s a big difference.

“Whether you are Republican or Democrat, labor or management, union or nonunion, very powerful forces are trying to decrease your standard of living.  Please remember that in November you have the opportunity to tell Washington, D.C., and Harrisburg to ‘Stop the insanity.’”

[RWC] No one in the United States, with the possible exception of liberals, is “trying to decrease your standard of living.”  Reducing the standard of living makes no economic sense for anyone.

The quickest way to cut into our standard of living is to embrace socialist economic, political, and social beliefs.  Our conservative beliefs relative to the rest of the world account for most of our success.

1. Who Benefits From the New Overtime Regulations?; Kirk A. Johnson, Ph.D.; The Heritage Foundation; August 16, 2004.

2. Understanding Poverty in America (Backgrounder #1713); Robert E. Rector and Kirk A. Johnson, Ph.D.; The Heritage Foundation; January 5, 2004.

© 2004 Robert W. Cox, all rights reserved.