May Day 2009

Did you know that this day has ancient origins? It was a pagan holiday that marked the end of the winter season in the Northern Hemisphere. The spread of Christianity throughout the European continent resulted in the abandonment of the raucous celebration of pagan holidays. Instead May Day became a secular holiday to honor the arrival of spring. You may recall the dancing of the Maypole, the Queen of May and May baskets. May Day is also the International Workers’ Day, a celebration of labor achievements around the world.

What does any of this have to do with investing? Actually there is a significant movement in this country to increase the size and strength of organized labor. Unions are seeking to make it easier to enlist new members through more liberal sign up provisions called “card check.” Under this procedure, if the National Labor Relations Board were to verify that over 50% of the workers signed authorization cards, the traditional secret election would be bypassed and the union would automatically form.

If this legislation were to pass into law, it would strengthen labor’s ability to form unions. Historically, organized labor has bargained with employers over a wide range of compensation, benefits and rights issues. This would potentially cause a shift in the balance of power between labor and management.

We invest in companies, because we believe the people who work in the company will produce products and services that will results in profits for the company. It is the balanced and fair relationship between the employer and the workers that results in harmony in the work place. Stable companies are more likely to thrive than those characterized by rancor and strife. They are also more likely to reward their shareholder’s through dividends and capital gains.