Yellen & The Big Push To Offshore US Labor

For small businesses which already struggle to remain profitable, increasing the cost of "Labor" is problematic.

The cost of a "Union shop" costs nearly 1/3rd more to operate than a "Non-union" shop.

"The administrative budgets of the unionized plants were 30% higher. In addition to obvious increased costs, there are those that affect morale, creativity, and resiliency. Ultimately, an organization's profit margin can decline. Productivity appears to be lower in unionized environments." - Adams, Nash, Haskell & Sheridan.

"Increasing the cost of employing low-wage workers generally leads employers to reduce the size of their workforce. The effects on employment cause changes in prices and different labor and capital types."

"Higher wages increase the cost to employers of producing goods and services. The employers pass some of those increased costs on to consumers in the form of higher prices. Those higher prices, in turn, lead consumers to purchase fewer goods and services. The employers consequently produce fewer goods and services, reducing their employment of low-wage and higher-wage workers."

While U.S. workers believe they are entitled to higher wages, employment is ultimately driven by competition, costs, and relative skills.

In order to justify keeping the Indiana plant open, the company injected $16 million to drive down the cost of production and reduce the operating gap between the US and Mexico.

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