Tuesday, November 06, 2007

The Human Profit Margin

A More Perfect Union - Megan McArdle

The first question that springs to mind in McMegan's wrap-up is "what if the executives don't want to implement new production-enhancing techniques but wants to make the profit margin larger in quick order?" The obvious answer is, of course, to fire some employees. I'm not going to make the executives look like the big bad wolf here, because one part of what unions do that McArdle clearly misses is unions also seek to provide job security, which in turn lead to some absurd practices like auto workers who sit around simply because the company can't fire them. But this is just another instance where the interests of one party taken to an extreme can become an absurd boondoggle, thus making unions look absurd as well.

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