The Dismal Science in action

I have always wondered why economics is called ‘the dismal science’. I know that my beginning economics course in college was taught by a man who had all the charisma of a polyester leisure suit. When I took a macroeconomics course at a community college it was taught by a retired Marine officer and more often than not the lectures sounded like a hellfire and brimstone sermen. At that younger age I enjoyed the lectures but did not fully appreciate that the instructor was passionate about economics because of the overwhelming effect it has on everyones lives. I would liken it to any other science, just because you never learned about gravity in school does not give you the ability (a la Bugs Bunny) to walk off of a cliff with no ill effects. Likewise, just because ‘the dismal science’ bored you to tears in school (if you toook the course at all) does not give you the ability to ignore the market forces that economics study. I would especially like to point this out to anyone who thinks that companies are their just to employ people. Companies are there for just one reason, to make a profit. Your employment is a favorable side effect of your companies success, but it is NOT the reason for your companies existance. In Colorado we have a looming grocery workers strike. Why? Because the union workers in the big chain stores are demanding insurance benefits and the stores are not willing to put them on the bargaining table. Why are the stores not willing to provide their workers with company paid insurance. The reason is called Wal-Mart. This huge ‘evil’ non-union shop does not pay for insurance for their employees or even pay union wages to its workers. By doing this Wal-Mart is able to gain a significant competitive advantage over the chain stores. The thing that makes this possible is because the labor market will support Wal-Mart. Wal-Mart has no problem hiring workers with little or no skills and offering them jobs that do not provide insurance benefits. The chain stores are hiring out of the same labor pool and if they are required to provide their union employees with insurance benefits they will suffer another competitive disadvantage to Wal-Mart. The unions have adopted the idea that companies are their to provide workers with jobs and in pursuit of this idea they may destroy the companies that provide their union members with jobs because they are attempting to ignore a basic law of a market economy. The companies are there to make a profit and by taking on too many comparitive disadvantages the companies will not make a profit because their customers will have gone to Wal-Mart and the company will have to close up shop. There are some sectors of our economy where the unions can and do control the labor pool and can call their own shots but grocery stores workers are not one of those labor pools and the unions are dancing dangerously close to destroying the companies their workers depend on.

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