***** NYT March 26, 2002
Europe Versus United States in Steel War
By EDMUND L. ANDREWS
...European executives also tend to agree with American steel executives on an important point: the biggest hindrance to consolidation in the United States is the huge burden of paying pension and health benefits for retirees.
American steel companies lobbied unsuccessfully last year for the federal government to assume those liabilities, which would have allowed them to merge more freely because, with their costs lower, they would have been more desirable takeover candidates.
The European companies do not have that problem. In most countries, pension and health care benefits are government responsibilities. On top of that, the European Commission carried out a sweeping plan in the 1970's and 1980's to help finance early retirement for companies that reduced their capacity.
"We had government assistance on retirement and health benefits, I admit that," Mr. Dollé said....
<http://www.nytimes.com/2002/03/26/business/26STEE.html> *****
To the extent that maintenance of the old, the young, the disabled, etc. remains un-socialized by the government, unions seek to gain pension, health insurance, etc. through company-wide or at most industry-wide collective bargaining; and if unions are successful in doing so, they make production costs higher, and companies and even industries can be beaten by competitors from nations that have already socialized such costs (although Euro steel competitiveness also comes from economy of scale gained by mergers, radical reduction of steel employment ["from nearly 800,000 workers in 1980 to fewer than 280,000 today," <http://www.nytimes.com/2002/03/26/business/26STEE.html>], etc.). Some degree of social democracy makes economic sense, but the US power elite have preferred class power to efficient production, and the weak, fragmented, and politically backward US labor movement has never put much efforts into creating and maintaining social programs that go beyond serving already existing union members. As Jenny Brown says, the American model of capital-labor relations has placed huge burdens on women. -- Yoshie
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