Principles of Finance: Unit 9, Ethical Tussles in Government Projects

Ethical tussles in government projects…à la Shmoop

CoursesFinance Concepts
Principles of Finance
FinanceFinancial Responsibility
Personal Finance
Finance and EconomicsPrinciples of Finance
LanguageEnglish Language
Life SkillsPersonal Finance
SubjectsFinance and Economics

Transcript

00:22

hourly wage stipulated which you know basically requires union work

00:27

there or should the bid be quote labor blind unquote

00:30

and just get the best price for the same product

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or service as would happen in normal corporate america A

00:38

given project cost one hundred million dollars for a minimum

00:41

wage slash union embracing buyer slash employer calling a new

00:47

sewer system for a big city or a a dam

00:49

in front of a big river to provide water to

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the city below are you know a road that's the

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cost If it's a union job one hundred million bucks

00:59

union bidders union workers union pension fund contributions one hundred

01:04

million box overhead with union workers that job will be

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vastly more pleasant to build for the workers Unions look

01:12

out for their own workers They negotiate most often not

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just for higher wages for their employees but rather for

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the employer to be required tohave mohr employees like mohr

01:22

workers Why Well because those workers pay union dues and

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the math basically works out so that it's more favorable

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to the union to get dues from lots of modestly

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paid workers than from a smaller number of meaningfully higher

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paid workers right the unions just doing what it was

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hired to do so instead of four hundred thirty seven

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workers in a non union sewer system build this particular

01:45

Job will take 680 two workers because it's a union

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job it's union friendly well there will be additional tracking

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layers and craft service costs for whatever that union was

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able to negotiate on behalf of the members who paid

01:59

the lawyers there of the union to negotiate for him

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right there Good The nonunion flavor of this Job would

02:05

have cost 70000000 thirty million box and our hundred million

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union job The nonunion rock collars cost twenty dollars an

02:13

hour The union guys cost forty The union workers get

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a five dollars an hour overhead quote burden unquote for

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their labors That burden covers things like health insurance and

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accident insurance and all kinds of other things that we're

02:27

not going to hear the project comprises a lot of

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spend on labor but it isn't only labor that rings

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up that seventy two then one hundred million dollars in

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extra cost should the workers be required to by end

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or only used parts and supplies from companies that produce

02:45

those parts in america in buying parts made in america

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by only union labor Yeah those parts cost a lot

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more than the parts made in russia by the conglomerate

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polluters are us any individual employees and given project could

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on ly work thirty six hours in a union job

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any hour worked after that was charged at time and

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a half meaning that a twenty six dollars an hour

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worker would then get thirty nine dollars an hour for

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having worked that thirty seventh hour that week Well whenever

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a box over fifty pounds has moved in a union

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Job contracts required that 2 workers move that box not

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one lunch hour had to actually be a full hour

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with a smoking area reserved and all holidays had to

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be respected Yeah like even talk like a pirate day

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And if you didn't respect it whole you would hear

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About it from hr so union job a hundred million

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non union seventy million so what's thirty million box among

03:41

friends they're among taxpayers Well it's a lot If you

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had wanted the local library to stay afloat or tohave

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the community college move out of the decrepit old military

03:52

barrack buildings or to have your local pinch and funds

03:55

solvent so that retiring old people didn't actually you know

03:58

starve or just keep the tax dollars in your pocket

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Yeah well none of these things will happen now that

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we've gone with one hundred million dollars union job instead

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of just taking the cheapest bidder And remember that it's

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you you the taxpayer paying that extra thirty million dollars

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normal taxpayers we pay it all So if your tax

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bill last year was eleven thousand three hundred forty five

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dollars do you think you should have been ableto vote

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for non union government bidders and paid eleven thousand two

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hundred eleven dollars in tax instead The government mandate of

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union bid jobs cost you the taxpayer exactly one hundred

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thirty four dollars last year and yeah it's a totally

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arbitrary number we just made up But if you go

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back and look at the numbers and we're probably not

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far off here and not that the number is bad

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but was it fair Was it ethical Was it the

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right thing to do What if half the tax paying

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voting population runs their own small businesses and dry cleaners

04:50

Teo golf supply shops and they hate unions Is it

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fair to them to give that extra bill that hundred

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thirty four dollars out of their pockets That how many's

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golf tees did you have to sell the urn than

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hundred thirty four dollars Is it fair to make them

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give that money to union labours And what about workers

05:07

in the union What if they don't want or need

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the union benefits Maybe they're married and they get health

05:13

care elsewhere on someone else's nickel or maybe they're massacre

05:17

ist and they just enjoy physical pain Is it fair

05:20

to make those union workers you know forcibly pay dues

05:23

to the union They're a bunch of supreme court cases

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coming down the line that address this issue from a

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few different angles and will be largely up to those

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nine folks and the black robes to decide what's quote

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Fair unquote So a lot to think about Union workers

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benefit from unions obviously But what about those who are

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harmed like small business owners who were entirely non union

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which by the way is a lot of people and

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some would say the core of our nation's economy So

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yeah should uncle sam be so involved or should he 00:05:53.08 --> [endTime] you know keep his hands to himself