Michigan economy

I just listened to a Democrat strategist on Neil Cavuto's program, and it was very interesting to hear her blame Michigan's economic woes on Republican philosophies, especially NAFTA and the deteriorating auto market. I concur that Michigan's problems are largely due to the erosion of the automotive business in Michigan.

First, NAFTA was pushed through during the Clinton era. While I have mixed emotions on NAFTA, there have been good things as well as bad things that have resulted from NAFTA. Yes, some jobs have gone overseas, but at the same time, the price of goods that consumers purchase has been lowered because other countries can produce those goods cheaper than we can. This brings me to my second point in my rebuttal.

One of the reasons that the Michigan's economy has suffered is because of the high cost of labor and overhead related to labor such as pension plans, workers compensation, health insurance, social security and other taxes. A lot of these exorbitant costs were exacerbated by the union's demands. While technology has reduced much of the labor content associated with automobile production while at the same time making it safer, unions in the automotive industry (much like the steel industry) continued pushing for higher pay and better benefits. All of this while at the same time, reducing the operational efficiency due to more middle-men between the management and labor force through the unions. Most people are familiar with the common practices of unions - if somebody is hired to be a welder, they won't perform another task even if it makes sense to get some product out of production and to the customer. The overhead associated with unions is a real drain to manufacturing plants and ultimately our society.

Even in a non-union plant, the increasing costs associated with all the new legislation such as FMLA, HIPPA, etc. make supervisors, managers, and owners spending more time and more money dealing with lawyers than dealing with real business issues such as making things more productive or developing new products.

I've oftentimes marveled at the fact that enterprising people still go the entrepreneurial route of developing new products and new businesses. Just the risk associated with product liability claims makes it pretty unattractive. All you have to do is read the headlines about how so many in our society are filing lawsuits in get rich quick schemes because they were scalded by a cup of hot coffee from McDonald's they spilled on themselves. Perhaps the best business to be in is making warning labels. Have you ever read some of the ridiculous warning labels that exist? Warning: Coffee is hot and may result in burns. Warning: Do not immerse this plugged appliance in the bathtub. Or, as evidenced by the influx of new lawyers, a person could pursue a law degree for some job security.