There is a lot of whining going on over the movement of a large slice JD production to Mexico. The Daily Mail has an extensive write-up detailing all of the hurt this brings to middle America. There is much crying and gnashing of teeth.
First two lines in the article:
–John Deere is sparking outrage by laying off American workers and moving more of its agricultural equipment manufacturing to Mexico.
–Since October 2023, more than 1,000 John Deere workers have either been laid off or pushed into an early retirement across several plants in Iowa and Illinois.
Then there is this at around the 55th paragraph mark:
–The layoffs began after 10,000 unionized John Deere workers went on strike for five weeks in October 2021.
The JD folk were not all pleased with what they gained in the 2021 negotiations, almost a full third wanted to hold out for more than was was finally settled on:
–a 10 percent pay raise
–a $250 a month increase for retiring employees
–100 percent coverage of medical insurance costs
–a one time $8,500 cash incentive
— a $2,000 dollar bonus for each previous year worked at the firm
Well shit folks, you didn’t think that John Deere became a 187 year old king of jungle by rolling over every time the natives became restless did you? In this instance the natives were all upset about the company making good profit and the CEO making his millions. Consider this:
The CEO managed to triple the value of the company stock and improve the quarterly dividend it pays to all stockholders. Given that level of wealth creation I think the CEO was worthy of his pay.
When the union made the employee-employer all about the money and promoted a we vs they mentality among their members they also promoted that same mentality in the leadership of JD. If it’s all about the money then there is a much greater value proposition to be found in dozens of far flung locales on this planet.
Congrats to the union and the union employees, you’ve proven that Adam Smith’s invisible hand was correctly extrapolated by Samuelson:
—–Free markets are self-regulating systems that create economically optimal outcomes, which can’t be improved upon by government intervention.
—-The idea of trade and market exchange perfectly channeling self-interest toward socially desirable ends is a central justification for newer versions of the laissez-faire economic philosophy which lie behind neoclassical economics.
Unfortunately for the those in Iowa and Illinois the ‘economically optimal outcome’ favored the folk in Mexico. Had the legal tender, the value proposition, been based on mutually favorable outcomes then this would never had happened.