Daniel J. Morrison – 12/19/04

This page was last updated on December 21, 2004.

Don’t blame the workers; Daniel J. Morrison; Beaver County Times; December 19, 2004.

This is Mr. Morrison’s second pro-labor union management letter since December 5^th.

Below is a detailed critique of the subject letter.

“I’ve read letters this month that ranged from intelligent to communistic and sometimes just plain idiotic.”

[RWC] Since Mr. Morrison is pro-labor union management, I assume he lumps “intelligent” and “communistic” letters together.

“As far as the turnpike workers go, good for them. They have a strong union and they’re making a living wage. And with that money they will buy houses, furnishings cars and pay taxes.”

[RWC] As many unskilled workers before them, the toll takers will price themselves out of jobs. One way to reduce labor costs is to reduce the number of workers. The higher toll taker compensation rises, the fewer jobs there will be to fill. The E-ZPass program is only the latest in an ongoing series of programs to reduce the number of toll takers. The machines that catch your coins were the first. Will it be a labor union victory when compensation reaches $100,000/yr, but there’s only one toll taker?

“The turnpike workers are an example that unions do have power.”

[RWC] “Power” can be fleeting. Let’s not forget that labor union membership has been on the decline for decades.

“I couldn’t believe somebody is still blaming the steelworkers for the collapse of American steel. It couldn’t be the fact that Japan and China were given preferred trade status, would it?”

[RWC] Company management, labor union management, government, and the workers themselves were to blame.

Mr. Morrison’s position exemplifies the denial common in Pennsylvania and supports the ‘we’re victims’ mentality.

Consider the following points with respect to steel.

· Everyone knew the high steel demand/low supply bubble after World War II would be temporary. After all, pent-up consumer demand from the Depression and the war and the need to rebuild caused the bubble.

· European and Japanese steel mills destroyed during the war were rebuilt using the latest technology, providing cost and quality advantages compared to U.S. mills.

· Steel demand dropped in 1958, a clear sign the high demand bubble ended.

· Steel imports from Europe and Japan began in earnest during the four-month 1959 steel industry strike, a clear sign the supply shortage ended.

· Imports continued to rise even after the strike ended because consumers liked the quality and price.

· Western Pennsylvania, West Virginia, and southeastern Ohio steel producers were at a transportation cost disadvantage relative to producers on the Great Lakes.

· Courting both consumers and unions, lawmakers bullied companies to increase wages and benefits without increasing steel prices, squeezing mediocre profits and delaying long overdue modernization.

With so many clear signs, company management, union management, and lawmakers of the day can’t claim they didn’t know what would happen if they didn’t change course. Instead, they chose to act like the post-war period was the norm.

That said, downsizing the U.S. steel industry was inevitable even if we made all the right moves. However, heeding the signs may have allowed a planned, though still painful, evolution.

We need to acknowledge our mistakes and learn from them, not deny them. Otherwise, we’re condemned to repeat our past.

“Also, the fact that they did make decent money had a lot to do with the nature of their work, from being burned, maimed or just being killed in an explosion. My father and grandfather worked for J&L (later LTV), and I can remember my father had slag ground out (like a dentist would clean a cavity) of his eye on two different occasions. I can’t even imagine how painful that was, and my Pap had a finger missing. I think they were underpaid.

“By the way, LTV raided a very large retirement fund, filed for bankruptcy and closed its last mill in Cleveland - and the CEO picked up a $77 million check on his way out. When the dust settled, your federal tax money pays for the steelworkers’ pensions.”

[RWC] Tax money doesn’t pay for failed pension programs, so far. Pension plans pay premiums to the government-run Pension Benefit Guaranty Corporation (PBGC). Premiums plus the remnants of the failed pension plans pay the way, so far. That said, it is possible PBGC liabilities may eventually exceed PBGC assets and income.

“At US Airways, you again have people saying the employees are making too much money and it’s their fault that the airline is going under.

“It seems people forgot about the last time they went bankrupt. David N. Siegel passed out $7 million bonuses to the top dogs because you have to pay good money to keep good people. Well, he’s gone and so is the money.”

[RWC] I don’t believe anyone credible is placing all the blame for US Airways on the workers. The fact is, company management should not have let their costs – labor and otherwise – get out of line. When labor union management demanded ever-higher compensation over the years, company management should have taken harder positions. Instead, company management caved in to achieve labor “peace.”

“I suggest a lot of people visit the AFL-CIO Web site. They’ll find a lot of information, especially the executive pay watch.”

[RWC] The AFL-CIO web site is nothing more than propaganda supporting the cause of labor union management and Marxism. Union management constantly talks about “corporate greed” but doesn’t mention its own corruption. You can see a list of recent criminal enforcement actions against union management at the U.S. Department of Labor web site.