Here’s a little insight into the way investors view the Supreme Court’s recent ruling that requiring non-members to pay agency fees to public employee unions is a violation of the First Amendment.
An analysis from the folks at Charles Schwab cites research showing that “unions raise wages of unionized workers by roughly 20%” and “unionized workers receive better pension plans.”
And Schwab then notes: “The ruling could result in lower revenues for unions, and therefore reduce their political clout and negotiating abilities.”
Since wage earners have been left behind by the growing economy that is richly rewarding the already wealthy while wages remain relatively stagnant, this rightly sounds like bad news.
But Schwab tends not to speak of “wages.” They use language to mask the impact of the court’s ruling on people who work by instead using the term “labor costs” when talking about what employee’s earn.
So in Schwab’s simplified view of the world, cutting pay of working people is seen as good news: “Since unions regularly negotiate for higher wages and higher benefits for those they represent, if their negotiating abilities are reduced it (the high court’s ruling) could result in lower labor costs for municipal governments.”
There’s no attempt to delve into whether lower wages also mean a lower level of public services. Or the inability of public employees to decent lifestyles. No interest in taking the analysis in that direction.
The Schwab analysis is accompanied by a chart showing the annual wages of elementary school teachers by state, but once again Schwab refers to “labor costs.”
And, no surprise, wages/labor costs are lowest in anti-union, “right to work” states that have been hostile to labor rights. Of course, I’m betting that, in general, the higher wage states tend to have provide better education, and better lives for their teachers.
But again that doesn’t seem to factor into the Schwab analysis.
The pretty callous disregard for the situation of wage earners seems to call the question…Which side are you on?
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HSTA has done a pretty good job of letting the teachers know how the Supreme Court decision will affect public employees pay and benefits. Non-members choose not to pay union dues, but reap the benefits of whatever the union gains at the negotiation table. Resentment builds as non-members get a free ride.
If I am reading something relating to investing, I prefer it be free of editorializing. For example, I could be personally convinced that burning coal is a horrible way to generate electricity. But I don’t need to be told that in an investment report about coal companies unless the analysis is that the negative sentiment about coal is affecting sales. If there was no negative sentiment about burning coal affecting sales, then I wouldn’t expect an editorial from an investment guy telling me that burning it is a really bad thing to do nonetheless.
As to Schwab talking about labor costs instead of the people behind the costs, I could care less. I would actually think less of them if they were trying to inject social justice into this type of report.