The saying is, "Survival of the fittest," not "survival of the stupidest." Apparently, some people in the newspaper business haven't gotten the news flash that their industry is in survival mode, and that seems nothing short of ironic -- not to mention stupid.

Word today that the largest union at New York Times' (NYSE:NYT) The Boston Globe rejected concessions required for The Globe's survival really makes me wonder about the way common sense seems to have gone out the window these days. Hey guys: Have you noticed certain things, like the fact that your industry's in trouble, and that, hey, General Motors (NYSE:GM) is dead, and that might offer some related lessons about troubled industries? Maybe you figure you're just playing chicken, but you know, that's a pretty dangerous game, especially in an industry as beleaguered as yours.

Another dangerous game
Here's another saying: "Cutting off your nose to spite your face." Basically, that's the kind of thing the largest union, the Boston Newspaper Guild, seems to be doing here.

The union voted down a package of wage and benefit cuts that would have made it easier for the unprofitable newspaper to survive, according to The Wall Street Journal. Several months ago, New York Times management said that The Boston Globe was expected to lose $85 million this year and that it would close down the newspaper if unions didn't agree to $20 million in concessions.

These concessions would have included an 8.4% reduction in salaries, some unpaid furloughs and a pension freeze, as well as ditching lifetime job guarantees for 190 individuals in the Guild. The real irony here is that now that the Guild has rejected that proposal, New York Times will cut salaries by 23% to save the $10 million the Guild represents. Apparently the Guild plans to launch a legal battle over the 23% pay cuts, and of course, that's exactly what everybody needs when a company is already struggling.

New York Times, like many newspaper companies, is burdened by the weight of debt as sales and profits dwindle in a nasty, downer economy. Plus, the competitive landscape has been ugly for years; it's not just its hungry rivals like Gannett (NYSE:GCI) and News Corp. (NYSE:NWS), which owns The Wall Street Journal. It's also about the Internet, which has opened up avenues through which many consumers would rather get their news and information, such as Google's (NASDAQ:GOOG) Google News feature.

Applying others' hard-learned lessons
Too much debt ... tons of savvy competition ... consumers who are turning to other options ... unions that refuse to address economic realities and just keep fighting for unsustainable pay and perks. Does it sound familiar? It should; it sounds an awful lot like the plight of General Motors, which is now in bankruptcy. (Unions' roles in an industry's malaise is something I complained about in The Fall of the House of UAW.)

News flash (and I'm paraphrasing my own words from when I complained about the UAW): Sure, companies should treat their employees well, but that can't come at the price of running a truly efficient organization. An inefficient money drain simply isn't sustainable, and then what happens to the jobs? I can only hope our government doesn't deem the newspaper industry the next one that's too big to fail; governments and unions often don't address or acknowledge economic realities in how to run truly competitive businesses, and good intentions can have terrible results.

Dealing with reality
There are a lot of industries that need to think long and hard about economic realities and be willing to innovate, exercise flexibility, or die. Look at the traditional music industry, which has been disrupted by digital piracy, not to mention legitimate rivals like Apple's (NASDAQ:AAPL) iTunes and Internet radio. And even though Sirius XM (NASDAQ:SIRI) was originally on the right side of the disruptive spirit shaking up the music industry, the shifting competitive landscape and the combined companies' debt-ridden businesses have put it on a precarious path indeed. The traditional music industry's lawsuit-centric strategy (exemplified by the Recording Industry Association of America) often struck me as one that wasn't dealing with the truth in the marketplace and was instead a dinosaur.

As investors, we need to remember economic realities. The reality right now is that many industries are in survival mode, and it's about more than the ugly economy: It's also about serious competitive challenges. Employees and unions have to remember that, too, though. Economic realities have everything to do with whether they have jobs six months or a year from now, and if they're not willing to make some sacrifices, they may end up out of luck pretty darn fast. (Granted, I'm not giving managements a free pass, either -- I believe CEOs should do the right thing and take their own fair share of pay cuts to keep struggling companies afloat, too. Um, hello, there's no "I" in team.)

Who knows, maybe the bailout mentality has become so prevalent these days that many people in struggling industries see no reason to question their own short-term thinking and figure somebody's always going to save the day. (I'm getting the impression the day definitely might not be saved for The Boston Globe.)

However, it might be high time to realize that the writing's on the wall, and maybe many workers should wake up from the inertia and unrealistic, backward thinking that often permeates unions and instead flee for more promising industries and companies. And of course, investors should consider fleeing for greener pastures, too. Because guess what? In the long run, the backward-thinking industries don't survive -- nor should they.

For related Foolishness on similar reality disconnects:

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Alyce Lomax does not own shares of any of the companies mentioned. The Fool has a disclosure policy.