Thett3 Tournament: Labor Unions are a net benefit to humanity

I had two charts cut off in the last round, they are posted below. Income Inequality: PRO states that increasing the wealth is bad if the wealth only goes towards the very wealthy. However, this view that economic growth only goes towards the very wealthy is misguided. This process of economic growth benefits everyone, the poor included. Businesses can only generate wealth for people. They cannot take wealth from them. A business is unable able to raise profits beyond other competitors unless its goods are of better quality or made more efficiently than competitors. The volunteer nature of trade ensures that a business cannot steal a consumer’s wealth, but must obtain it voluntarily. A business can only obtain it through increasing the wealth of the consumer, otherwise trade does not occur. Theoretically, a business can create an efficient process, and sell the good at its same price, thus capturing all the wealth generated. However, in practice this does not occur. If a business can produce a good or service more efficiently, then the company can produce enough of it so that the quantity of that good or service will increase significantly. As the quantity of good increases, based on the law of demand, the price must decrease. This makes all consumers, even of poor class, better off due to cheaper goods and services. Rockefeller was considered one of the richest people in human history. However, he also created loads of wealth for everyone. Before Standard Oil, the most common source of oil was from whales. However, whales were becoming scarcer and there was a worry about shortages. Rockefeller figured out to use kerosene oil, and make it cheaper to produce then whale oil. Prices became three times cheaper under him.[1] But it gets even better. Efficient ideas spread. Once patents expire, and businesses learn how to copy other models, the real prices of goods have to lower even more and the quality has to increase due to more competitors or potential competitors. This real reduction in prices increases people’s real income and makes poor people better off. When the Wright Brothers created the airplane, they weren’t the only ones in the airplane business. Instead many companies starting making airplanes. Air flight has improved and made the world better thanks to innovation combined with competition. Now air flight is so cheap that people from working class and middle class background can afford them. The benefits of economic growth cannot be overstated either. Small changes in economic growth create large long-term benefits. An economy with 3% continuous growth will be 20 times larger in 100 years, while an economy with 2% continuous growth will only be 7.4 times larger. As a form of alleviating poverty, economic growth does much more to help the poor then labor unions could ever. Not only have that, but economic indicators like GDP underestimated present prosperity. Not even Rockefeller could use lifesaving drugs, benefit from modern medicine or use the internet for instant text and video communication. This is because these goods and services did not exist. Even poor countries have greater life expectancy then 50 years ago. Thus everyone benefits.[2] Pro believes that unions can resolve problems of economic equality. However, more efficient polices can be made to help the poor. Welfare programs and a progressive tax system can alleviate problems of poverty. These solutions are better for the following reasons: a) Unions do not seek to reduce income inequality. Thus there’s no reason to assume they will, since they only seek to increase their own member’s income. As stated earlier, this often occurs at the expense of non-union workers. b) They do not harm the institutions necessary for economic growth as outlined above, while unions do. Con also asserts that workers are paid too low, without justification. My theoretical and empirical evidence counters this. In a competitive market, workers are paid based on their productivity. Top-down Economics Pro seems to believe I believe the rich are job-creators. Solving problems of unemployment are beyond the scope of this debate. These can be explained based on reduction in aggregate demand, and be resolved using monetary or fiscal policy. Some TARP money was needed to avoid a Great Depression. Regardless, this is all a red-herring. The institutions I outlined previously are about creating long-term economic growth. PRO seems to agree with my initial statements that profits are needed to reward businesses for innovation and capital development. However, I never stated that the profits would be used to create jobs. This is akin to stating that “grades are needed so that students will be rewarded for studying and demonstrating that they understand the material.” If a student gets an “A” for doing nothing, and does not do well, this does not demonstrate that grades should not exist. Just like an “A” itself makes one know the material, profit does not itself make the nation rich. The profits have to be earned through increasing capital or innovation, not through government subsidizing profits. This is what grows the economy. PRO uses tax-cuts to explain why he thinks I am wrong. Yet, taxes are necessary for the government to raise revenue, and allow businesses to keep a predictable portion of their profits if they innovate. When unions bargains the same cannot be said. I’ve stated that government is necessary, so taxation is necessary. This is comparing apples to oranges. Pro seems to think that higher union wages can be supported through taking income from higher management. While the CEO of McDonald’s makes millions, he also employees hundreds of thousands. Taking away his income and giving it to the workers would only raise the workers’ wages by a couple dollars a year. The administrators are there to keep the company afloat otherwise they would not be hired in the first place. Take away the good management, and the company loses its profitability. If a company cannot be profitable, the workers cannot bargain anymore, as the bankruptcy of Hostess demonstrated. Pro’s own source contradicts this as cost was passed off to consumers, not the managers. Passing costs onto the consumer is not necessarily optimal to economic equality. This is because higher prices affect the poor the most. Any increase in wages from the workers, is offset through higher prices. Public labor unions PRO seems to believe that government problems can be solved as long as we tax the rich. This is false based on evidence of marginal taxes and the idea that money is the only problem. Taxing the rich more does not generate revenues [3] and US schools have increased funding since the 1960s, but test scores remain the same [4]. Solving government inefficiency requires reforms that unions routinely block. PRO believes that unionization is needed to protect themselves from the government. But government is an institution filled with many self-interested individuals, not some mystical entity. The people in the government ARE the government. They are the ones that get to practice their monopoly and coercion. It’s absurd to think that workers need to be protected, when government atrocious and inefficiencies been committed against non-government workers. The ones in danger of government control are the public and taxpayers, which as outlined, unions harm. PRO goes on to state that teachers should be protected from firings due to the difficulty of finding a job. However If incompetent teachers are not fired, then it means that recent college graduates and component teachers are unable to do so. It’s absurd to believe that only “unjust” terminations occur, since the problem of teacher unions are so bad that it’s easier to put bad teachers in a room not to teach then to actually fire them [5]. [1] http://tinyurl.com... [2] http://tinyurl.com... [3] http://tinyurl.com... [4] http://tinyurl.com... [5]http://tinyurl.com...