why LABOR DAY is Bad For Self-Directed Investors | Episode 127 - a podcast by Bryan Ellis - SelfDirected.org

What is LABOR DAY really all about?  And why does it matter for Self Directed Investors?  I’m Bryan Ellis.  I’ll tell you in today’s special episode #127.

-------

Hello, SDI Nation!  This is your raspy-voiced host Bryan Ellis… welcome to the podcast of record for savvy self-directed investors like you!

My friends, I regret that you’re hearing me in this condition, and hopefully my voice will improve quickly.  I’ve got both bronchitis and pneumonia at the moment, and in general am really just feeling rotten.

So today’s show will be a little shorter than normal…  But being with you is truly one of the high points of my day, and I didn’t want to miss this chance, so here I am… and more importantly, there you are… and I thank you for that!

My friends, before the next 7 minutes are done, you’re likely to be tempted to think that today’s show is political in nature.  It’s not.  It’s all about Core Value #1 of self-directed investors:  To respect your own capital.  You’ll see exactly why that’s true in just a moment, so hang with me.

So, Labor Day was yesterday.  By the way… I had no voice at all yesterday, which explains why you’re hearing this today rather than on the actual day itself.

Americans look forward to Labor day because it’s a paid vacation day from work.  And sure, what’s not to like about that?

Well, my friends, the truth of the matter is that labor day is NOT a celebration of you as a worker, or an expression of gratitude for your efforts.  Historically, it’s actually a celebration of labor UNIONS, not laborers.

Yes, labor unions.  Those quasi-governmental organizations that, while they represent a measly 11% of the work force, still somehow manage to be the second most HORRIBLE drag on our economy, behind only overreaching government regulations.

There was a time when workers weren’t treated well in this country, and labor unions played a useful role in ending that abuse.

But like a Congressman getting a taste of power and remaining entrenched for decades in Washington DC’s Capital building, labor unions have stuck around endlessly, far beyond their necessary or useful lives, and have become a clear force for BAD in our economy.

This isn’t a political statement.  It’s a factual observation.  And it’s relevant to your portfolio, either as an investor in stocks OR real estate, and I’ll tell you exactly how:

Let’s consider the business community.  There is one observation that is indisputable:  The presence of labor unions SUBSTANTIALLY and CONSISTENTLY drives UP the cost of production.  There’s simply no questioning of that reality.  Feel free to check it out yourself online if you’re interested.  They drive up costs in regular, consistent ways because it’s virtually always the case that labor unions are the most expensive option versus all other choices… and they drive up costs because the presence of unions inherently means higher legal costs for the company, along with the fact that there will likely be strikes from time to time.

As a business owner, this outrages me.  It’s the blood, sweat, tears and CAPITAL of the owners of the company that matter.  Without that vision, that sacrifice, and that risk, the business – the source of the employment – simply wouldn’t exist to begin with.  Yet in many states, labor unions have the legal authority to blackmail and harass these employers into paying far more for the same work than they’d otherwise have to pay.

And let’s not forget… those costs come out of YOUR pocket, and my POCKET… and those profits that are lost to labor unions come out of the pockets of the families of the people who had the vision, and who took the risk, to start the business in the first place, and to grow it to a point of success… success substantial enough to attract the attention of blood-sucking labor unions.

So if labor unions are such bad news for business, why does anyone ever choose to do business with them?

Well, it’s because those businesses don’t have a choice.

Only 25 states in America – mostly in the southern and western part of the country – have what’s called “right to work” laws.  Right to work laws prohibit unions from imposing restrictions on employers and their employees in terms of requiring payment of membership dues, minimum salaries and benefits.  In all other states, unions are free to move into a company, pressure employees to unionize – and the thuggish, illegal nature of that pressure is well documented – and thereby drive UP the costs for the business, the costs for consumers like you and me, and DESTROY the control a company’s owners and managers need in order to make the business as successful as it could be.

To compound that problem, the national labor relations board – the government entity that regulates labor unions – is not an unbiased bystander.  It’s an activist organization that aggressively advocates FOR unions, not for regular people.

Oh, by the way – union membership is WAY down.  Only about 11% of the workers in America are union members – that’s less than half of what it was back in the 80’s.  So a lot of people are catching on.

But because union are so entrenched in GOVERNMENT, their power has NOT declined commensurately, even though the U.S. public clearly recognizes that there’s no legitimate motivation to work for labor unions.

In fact, a huge percentage of those who DO work for labor unions at this time do so for legacy reasons.  They were working at a company that was unionized and then became union-dominated, and they were forced to join in order not to lose their jobs.  It’s disgusting.

So a good thing to consider when choosing STOCKS in which to invest is to evaluate their exposure to labor unions.  You’ll not likely be able to wholly avoid stocks just based on whether they use union labor, but to the greatest extent possible, you should do so.  Because, remember:  The overwhelming additional expense of union labor comes out of profits… and profits are what drive your stock price.  The other thing that drives your stock values are the wisdom of good management decisions.  And in a business where unions dominate, the authority of management to do the right thing for the business is SUBSTANTIALLY hindered, because labor unions invariably force a seat at the management table for themselves… and their ONLY objective is to expand the power of the labor unions.  There’s nothing admirable about what they do.

And if you’re a real estate investor… particularly in multi-family or commercial real estate… and if your property is in a non-right-to-work state, you’ve got to think about these issues as well.  Because when the inevitable time comes for repairs, maintenance or even reconstruction, you’re going to see exactly how painful it is to use union labor rather than work directly with good companies whose only motivation is to build the best, most profitable company they can.

Because my friends, a business that achieves and sustains profitability long-term only does so by performing very, very well, and by becoming valuable to its customers.

And THAT is why today’s show is all about respecting your own capital.  If you have a choice to invest in two companies, and one of them is subject to labor union influence and the other is not, you should give STRONG preference to the one that has no labor union influence.

If you’re considering investing in real estate in multiple states, but only one of those states has right-to-work laws that prohibit labor unions from infesting businesses that will serve you, you should give STRONG preference to investing in real estate in the places where there’s no forced labor union influence.

It’s all about respecting… and protecting… your capital, my friends.

How do we know labor unions are bad for America’s economy?  It’s because the only way they exist and survive is by protection of law.  Without that legal protection, labor unions would disappear even more quickly than they have.

My friends… politics frequently collides directly with the interests of your portfolio.  And for your reference, in the upcoming political season, there are 3 presidential candidates or potential candidates who are loud advocates of empowering unions – and are thus in favor of bringing harm to YOUR portfolio as a result.  Those candidates are Hillary Clinton, Bernie Sanders and Joe Biden.  So, vote carefully.

Folks… I appreciate you. I really do.  Thank you for suffering through my raspy voice today.  And one more thing:

 

Invest wisely today… and live well forever!

---

Hosted on Acast. See acast.com/privacy for more information.

Further episodes of Self Directed Investor Talk: Alternative Asset Investing through Self-Directed IRA's & Solo 401k's

Further podcasts by Bryan Ellis - SelfDirected.org

Website of Bryan Ellis - SelfDirected.org