Unions just do not get it!

In the coming up series under the label 'Depression 2.0' I will try to pool together sources that suggest we are heading down a path last traveled by Americans over 70 years ago.  While the reasoning behind the coming depression are complex the basic idea has been covered in many previous posts about the Federal Reserve and the credit expansion we have experienced in the past 20+ years. 

Today we learn that Arizona's grocery stores may be soon experiencing a strike for the first time in decades.  United Food & Commercial Local 99 cannot seem to compromise on who should be responsible for health care costs and unfortunately Safeway stores and local union bosses cannot seem to reach a compromise.

Safeway spokeswoman Cathy Kloos said it was a shame the union has put the parties on a collision course over health-care costs similar to or less than what many other workers already pay.

The problem is rooted in the fact that minimum wage laws or the cost of living wage has been artificially propped up and the companies are finding they cannot sustain these payments any longer.  We should be well into an economic contraction as the purchasing power of the consumer has dwindled and drowned in debt due to rising unemployment and rising taxation.  Instead of lowering wage rates and expanding employment to so many needy people, unions accustomed to their style of living refuse to consider this sacrifice for the collective good of society.  Just like in the 1930s unions (in some cases encouraged by politicians) fought for wage fixing rooted in a silly belief that high wages lead to prosperity.  Similarly just like in the 1930s the prevention of wage reductions in the face of obvious deflationary pressures lead to severe job shortages.  After all, how exactly can a company retain the same level of employment when prices are falling everywhere due to reduced consumption?  

Nobody likes reduced wages, but what if prices fell everywhere too?  In fact if prices fall faster than wages, everyone who is not holding debt is relatively content.   Union power must be broken up as it creates unemployment, but in the case of Safeway they will move to hire temporary workers who will be willing to work for much less than the unions demand.  If people just do not get it, you have to teach them the hard way, of course in our perverse economy prices will not fall because politicians are hell bent on "stimulating" and unions never lose because they are "just".  We will end up mopping up all the costs as our dollar loses values and corporations raise costs to deal with dense union leadership.