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Yahoo Finance Show Lays Out the Case for Why Unions Are Important

 

The Yahoo Finance show "The Daily Ticker" uses its latest episode to lay out the case for why labor unions are important, particularly in the current economy. Really.

The show isn't exactly pro-working families—and it runs through a litany of false and misleading attacks on unions—but the hosts, Aaron Task and Henry Blodget, argue that owners and management have gone too far in accumulating wealth and power and it's important for unions to counter-balance that. They argue that not only are growing inequality and exploitation of workers bad for society, they're bad for business.

But unions came into being because company owners weren't sharing enough of their companies' wealth with the rank-and-file employees who helped produce it. Look at the news headlines over the past few weeks—employees are speaking out against low pay and no benefits. Hostess Brands, the maker of the iconic Twinkie, is closing because of a standoff with its union employees, but a judge recently ruled that Hostess management will still receive bonuses before the company is liquidated. Employees at American Airlines, Walmart and fast-food chains in New York City are protesting unfair pay practices. Members of the Office Clerical Unit of International Longshore and Warehouse Union Local 63 in California are striking over charges that terminal operators have outsourced jobs.

And, unfortunately, with the decline of labor unions, that lack of sharing is again increasing.

Namely, we've developed inequality so extreme that it is worse than any time since the late 1920s.

Contributing to this inequality is a new religion of shareholder value that has come to be defined only by "today's stock price" and not by many other less-visible attributes that build long-term economic value.

Like many religions, the "shareholder value" religion started well: In the 1980s, American companies were bloated and lethargic, and senior management pay was so detached from performance that shareholders were an afterthought.

But now the pendulum has swung too far the other way. Now, it's all about stock performance—to the point where even good companies are now quietly shafting other constituencies that should benefit from their existence.

As an example, Task and Blodget point to the differences between Walmart and Costco in the way they treat their employees. The fact that Costco treats its employees well has not stopped it from being profitable.

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