What people need to realize is its a constant interaction between labor, capital and raw materials.

If you take too much to labor (read: GM and Chysler in the US with the UAW union demanding so much in labor rules, benefits (including for retirees) and wages) the company can't sell products for a high enough price to invest enough in new products and engineering to continue to sell 5 brands of cars. Eventually, the company cannibalized 3 of its 5 brands. It also went bankrupt and countless jobs were lost. All investment capital (both stocks and bonds) were effectively wiped out).

Thus, investing in businesses with union labor in the US has been badly hurt. If these businesses want to raise equity or sell bonds, the costs will be higher. This directly translates into fewer jobs paying less competitive wages, or businesses that fail losing all jobs.

There is no magic to the interaction of labor, capital and raw materials. The US is facing a major test here. It's not clear what the answer is.

However, with high unemployment in South Africa, the unions should be making it enticing for businesses to locate there and expand - rather, they are doing the opposite. Those without jobs and those whose jobs will be at risk should be outraged!