How Unions and Small Businesses Clash in Our Economy

Most people do not see small businesses and unions as adversaries in our free-market economy, however from a philosophical standpoint and from 30 years in business, observing what goes on, I think I disagree. I think there is some almost direct competition between the unions and small businesses and I’d like to explain some of my thoughts over the years and present this information for you to consider. If you have a few moments I’d like to discuss this.

Small businesses have lower cost structures in therefore they can compete better in the free-market and deliver the products and services to the customers, clients, and consumers which desire them. However, unions often go out of their way to have increased regulations on industry crowding out the little guys. Little businesses cannot comply with all the stringent regulations, and therefore it provides a barrier to entry for larger corporations which are often union. Once there are more regulations and the corporation has little if any competition from small business they can continually raise their prices.

As these corporations raise their price, the unions demand more money, better benefits, Cadillac healthcare programs, and incredible pension contributions. Meanwhile, the small businesses have been shut out of the game, and the consumers are forced to pay more because there really isn’t any competition on price. Later, another large company comes along perhaps through consolidation lining-up regional players and small businesses which were able to borrow the money to grow and compete anyway. Next thing you know we have a duopoly, or an industry were only large players (unionized companies) exist and no small companies can compete.

The consumer is harmed with higher prices, small business owners end up losing their businesses, and the unions can continue to get their gravy train at the expense of the small company job creators. If we reduce regulation it puts the corporations on notice that they can’t charge those high prices, and they are not protected by the government regulations to crowd out the little guy, and that they must compete in the free-market for a fair and equitable price (real value). Now if you ask a union person about this scenario they will tell you that I don’t know what I’m talking about.

They will tell you that union workers work harder, and are more highly skilled and trained than their small business competitors. It’s just that I’ve never found that to be the case, I’ve always found the small businesses, especially the owners often more qualified than the union workers who granted did receive all that training. We have a real problem in the US when the government provides barriers to entry for smaller companies allowing larger corporations to take a major portion of the pie, while the unions also work the political spectrum to ensure this continues so they can get more than they deserve from wherever they work.

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