University of Kentucky economist Ken Troske nailed it in the Lexington Herald Leader today when talking about the proposed auto bailout:
"But the long-term situation is completely different, he said."
"A bankruptcy would allow them to “break promises they made in the past," Troske said. "That's clearly going to hurt workers ... but they've got to get out of those promises.""
The "promises" he mentions are the outlandish union contracts that have played a major role in bringing the domestic automakers down.
And as Kentucky politicians mull how to get their own federal bailout, they should turn their attention instead to repealing prevailing wage laws that make school construction projects too expensive.
2 comments:
Let the domestic automakers go bankrupt if for no other reason than to do away with the unions and the outrageous pay they continually ask for. The politicians need to pay more attention to the prevailing wage laws that the state needs, and stop worrying about the backing they would lose by doing so.
The auto industry put itself into this bind by its bad management. Unions didn't do that. It was unions along with the WWII GI Bill that grew the middle class in this country.
If you're such a die-hard capitalist, I'd suggest you start reading Adam Smith's Wealth of Nations. In it Smith advocated that the wage earner be paid enough to provide his family with the "necessaries and conveniences." Today, we'd call that a living family wage.
Prevailing wage laws should be set to the same standard as a living family wage. It's labor that creates wealth.
Throughout this history of mankind, it's government that provides the work. That's whether it be the leader of the hunter-gathers, the builders of the Ziggurats of Sumer, the pyramids of Egypt or the Incas and Mayan cultures, the Stonehenge or Roman road builders, or the US government providing land for the railroads or the WPA projects of the Great Depression, or the Interstate highway system built under the Eisenhower administration.
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