Sowell decides to stick to something he knows (I guess) – economics:
Neither unions nor minimum wage laws change the productivity of workers. All they can do is forbid the employer from paying less than what the government or the unions want the employer to pay. When that is more than the labor in question produces, some workers who are perfectly capable become “unemployable” only because of wages set above the level of their productivity. In the short run – which is what matters to politicians and to union leaders, who both get elected in the short run – workers who are already on the payroll may get a windfall gain before the market adjusts.
Well – that’s one theory. As far as the minimum wage – the evidence that a higher real wage floor leads to lots of unemployment just isn’t there. So Sowell turns to the automobile market:
But, sooner or later, the chickens come home to roost. They have been coming home to roost big time in the automobile industry, where hundreds of thousands of jobs have been lost over the years. It is not that people don’t want automobiles. Toyota is selling plenty of cars made in its American factories with non-union labor. Some claim that it is automation, rather than union wages and benefits, that is responsible for declining employment among the Detroit auto workers. But why are automobile companies buying expensive automated machinery, except that labor has been made expensive enough to make that their next best option?
Why would Sowell be setting up this straw man argument that “some claim that it is automation … that is responsible for declining employment”? Who is this someone? I thought the counter claim was that GM and Ford are just badly managed and they make terrible decision on the product mix. I know Thomas Sowell portrays himself as a Ph.D. in economics, but his expertise on the automobile sector isn’t exactly on display here.