Tuesday, October 6, 2015

Pepper spray can restrict an active shooter

How to protect schools — and other public places — from active shooters: available pepper spray cans should be emptied into the hallways; then, doors closed and windows opened. That could make it impossibly uncomfortable for the shooter to move around the building.

Back in the early 70s, I stayed for a while in a “pre-detention center” down the block from Washington Square Park, formerly known as the Village Plaza Hotel. Every so often we had a “Mace party” — sprayed one shot of pepper spray up in the air in the lobby and then all ran outside until we could breath inside again. Once a couple of dope fiends came downstairs to the Coke machine — we yelled for them to come outside in the street but at that point in their day you could have comfortably removed their appendixes.

In grade and high schools the teachers could carry. Elsewhere managements could carry. Would definitely work sometimes.

How to protect schools — and other public places — from active shooters: available pepper spray cans should be emptied into the hallways; then, doors closed and windows opened. That could make it impossibly uncomfortable for the shooter to move around the building.
Back in the early 70s, I stayed for a while in a “pre-detention center” down the block from Washington Square Park, formerly known as the Village Plaza Hotel. Every so often we had a “Mace party” — sprayed one shot of pepper spray up in the air in the lobby and then all ran outside until we could breath inside again. Once a couple of dope fiends came downstairs to the Coke machine — we yelled for them to come outside in the street but at that point in their day you could have comfortably removed their appendixes.
In grade and high schools the teachers could carry. Elsewhere managements could carry. Would definitely work sometimes.
- See more at: http://angrybearblog.com/2015/10/open-thread-october-6-2015.html#comment-2684939

Wednesday, September 30, 2015

Missing "MATHINESS" in minimum wage discussions

Re: Where Does the Minimum Wage Max Out? - EconoSpeak

AT LAST! Someone actually thinks of (thinks out) the practical trade off between the size of a minimum wage raise and the possible cost in jobs. IOW, if the wage rose 100% (which $15 today would in many places) and employment in that category (below 45 percentile) dropped even disastrously, 25%, labor would still be way ahead. Average raise across the 45% would be 50%.

Noto bene: $15, five years from now is $13.50.

Differential minimum wage depending on local living costs? As hinted just above, a higher wage ($15) in, say, South Carolina could mean the same overall amount of money going to the same overall demographic cohort (low-wage workers) -- but many would get more while a some got nothing (at least in their personal short run). So in a way that could count as A WASH. OTH, a differential would encourage $15 jobs in Ohio to move to $12 South Caroling -- A GIANT LABOR DEFICIT; another version of the race-to-the-bottom.
* * * * * * * * * *
This scaled concept needs to be articulated almost every time -- and if objections to practicality of academic researchers "guesstimating" about this arise they should at least be stated and probably some such framework should at least be hazarded.

Within this framework should be delineated the different sales -- and therefore employment -- effects at different low wage businesses depending on differing labor costs. Walmart with 7% labor costs will feel much less impact on prices (not necessarily on sales) of a large wage raise than than McDonald's with 33% ($15 raise prices there 25%).
* * * * * * * * * *
There is the possibility that raising wages an average 50% for the 45% of employees who take 10% of overall income (plausible representation of $15 federal minimum wage) would actually increase employment at their level -- as 5% of overall income were shifted to them from the 55% who now take 90% -- and they spent (do spend) disproportionately in lower wage businesses.
* * * * * * * * * *
I read a couple of days ago of some samplings of economists views of the possible employment effects of raising the fed min -- mostly of the eco 101 variety. I suspected that if whether the min was $5.15 or $11.15, they would be saying exactly the same things. I suspected they took (take) whatever the min is presently as some kind of "natural" starting point -- close enough anyway. I didn't think most of these progressives had any idea or even any curiosity about how $7.25 came to be in 2015.

Is the current labor price just a little low because of past moderate neglect -- or is today's price world-turned-upside-down low because of decades of mad, mad neglect -- just to state the outside ranges? Employees in Fight-For-Fifteen have no "mathi" idea for their price points either -- or do they? They are in touch at least intuitively with how much their wage demands would push prices up in different businesses -- and at least intuitively with how customers will react.

The chart below should have no trouble answering the range of neglect question (not that it will necessarily get past ivory tower intuition). In a nutshell: LBJ's 1968 min wage was $11 an hour -- per capita income has about doubled since.
* * * * * * * * * *

yr  per capita    real     nominal  dbl-index   %-of
(2013  dollars)

68    15,473    10.74      (1.60)        10.74      100%
69-70-71-72-73     [real, low point- 8.41]
74    18,284      9.47      (2.00)        12.61          
75    18,313      9.11      (2.10)        12.61
76    18,945      9.44      (2.30)        13.04        72%
77                                                    [8.86]
78     20,422     9.49      (2.65)        14.11
79     20,696     9.33      (2.90)        14.32
80     20,236     8.78      (3.10)        14.00     
81     20,112     8.61      (3.35)        13.89        62%
82-83-84-85-86-87-88-89               [6.31]
90     24,000     6.79      (3.80)        16.56  
91     23,540     7.29      (4.25)        16.24        44%
92-93-94-95                                    [6.51]
96     25,887     7.07      (4.75)        17.85
97     26,884     7.49      (5.15)        19.02        39%
98-99-00-01-02-03-04-05-06          [5.97]
07     29,075     6.59       (5.85)       20.09
08     28,166     7.10       (6.55)       19.45
09     27,819     7.89       (7.25)         9.42        40%
10-11-12                                          [7.37]  

13     28,829     7.25       (7.25)       19.32        38%

Saturday, August 8, 2015

Mexican-only open border more efficient and more humane at same time

“Yet some economists and demographers who have studied Mexican immigration suggest that stricter security at the border could actually increase the number of undocumented immigrants in the country. One group of researchers estimates that by 2010, increased border enforcement over the decades had increased the number of unauthorized migrants in this country by 44 percent."

If this is so, then, maybe we should give thought to making the border with Mexico open to Mexicans only. They could move freely back and forth through designated check points — thinning out to the point of manageability all the other illegal immigration which now hides among the movement of millions of undocumented Mexicans. Make things much easier for the border patrol which would be much less inundated with numbers.

Be infinitely more humane for Mexican families too who are now sealed on this side of the border once they get here.

Monday, July 27, 2015

My labor market -- any labor market

The American labor market I see traveling around my (middle) middle class Chicago neighborhood:

Bus drivers: American born (mostly), decently paid, unionized;
Drug chain employees: American born, $400-500/wk;
Supermarket employees: American born, a little bit better;
Fast food employees: (all) foreign born, $300/wk (can't get 40 hours);
Taxi drivers (my 3 decade gig): foreign born, don't know how they make minimum wage in Chicago (50 cents/mile below 1981 when I started here -- post 1991 built subways to both airports, opened up unlimited limos, put on free trolleys between the hot spots downtown and added 40% more cabs.)
UPS drivers: American born, well compensated, Jimmy Hoffa's union.


Almost forgot one cohort of American born workers who like the former cab drivers wont work for today's sub-LBJ-minimum wage: 100,000 out of my guesstimate 200,000 Chicago, gang age, minority males.
 * * * * * * * * * *
The labor market -- any labor market -- as I see:

Large swings in wages may effect small to even no changes in product price -- and very little or very big changes in profit. If labor is 10% costs and ups its price 50% (5% more cost), sales and profits may suffer only 5%.  Conversely, If labor costs are 15% and a firm can squeeze down 5% (33% cut) of that the firm may double profits at the same product price.

Labor must sell what it has to offer every day or what it offers disappears. If labor does not sell what it has to offer labor itself may disappear (into the "workhouse").

Given the giant incentive to squeeze labor costs and labor's intrinsic vulnerability in the market, some mechanism(s) must be put in place to give labor a chance to extract the highest price the market (meaning the ultimate consumer) is willing to pay for its efforts. Which means a useful collective bargaining function and/or a sensibly calibrated minimum wage. 
  * * * * * * * * * *
Acquire an effective American collective bargaining function by simply treating labor market arm twisting the same way every other form of market arm twisting -- or arm twisting in every other market -- is treated: as a felony (state or federal invokes 33 state and federal RICO statutes).

Only Sovaldi can save us! For 300 billion dollars!

Sovaldi: Hepatitis C can be wiped out for $300 billion (that's a "b") -- the same amount we now pay for all other prescriptions. Cost to manufacture: half a billion dollars.

Now comes: "Amgen scores a victory for PCSK9, halving cardio risks after one year"  " ... new [cholesterol] drugs could eventually add as much as $150 billion to the national health-care bill."   

[how much will we be willing to pay to cure the incurable?]

"Of the 2,644 patients, eight exhibited signs of dementia. Two were younger than 65, five were aged from 65-74 and one was aged between 75-84."
"for the first time in human subjects, our notion that calcineurin inhibition has a protective effect on the development and possible progression and even reversal of Alzheimer's disease," 


C-Pulse - a cuff that wraps around the aorta and pumps blood from the heart around the body - has proved effective in reversing [formerly incurable] heart failure, even in some patients with severe cases. 

[the list of potential pharma rent collectors grows by day]

"And they also found that azoramide greatly improved blood glucose levels in obese mice and mice with type 2 diabetes. They showed this improvement was the result of two things: better functioning of insulin-producing beta cells and greater insulin sensitivity in tissues."


My $500 Pill Revealed -- Revlimid -- by Kevin Drum 

[just a sample of monopoly possibilities; more -- surely -- to come] 

Potential target for future Huntington's disease treatment discovered
"... MNT reported on a study that confirmed an activating protein called Rhes plays a pivotal role in Huntington's disease. This protein could become a drug target in future treatments. 


PLEKHA7 -- puts brakes on cancer -- better get ready to sell the Statue of Liberty back to France
"He notes this is like a speeding car that has a lot of gas (E-cadherin and p120) but no brakes (the PLEKHA7 complex), and concludes:"By administering the affected miRNAs in cancer cells to restore their normal levels, we should be able to re-establish the brakes and restore normal cell function. Initial experiments in some aggressive types of cancer are indeed very promising."

[just another day for potential new drug monopolies -- we will all owe our souls to the corner drug store]

Why Insulin Costs So Much
July 19th, 2015 by David Mendosa
"Dr. Hirsch reviewed the cost of insulin from 1921 when Drs. Frederick Banting and Charles Best discovered it. “In a generous gesture that unfortunately didn’t start a trend, they sold the patent for $1 so that cheap insulin would quickly become available.
"By 2005, people worldwide were spending more than $7.3 billion for insulin. “But no one could have predicted what would happen over the next decade,” Dr. Hirsch said. By 2013 we were spending $21 billion for it.
"Between 2005 and 2015 the cost of a lispro vial went up 264 percent, while a vial of insulin glargine went up 348 percent, and a vial of NPH went up 364 percent. That’s a lot, but other insulins went up even more.
"The cost of an aspart pen rose in this 10-year period by 389 percent. And the cost of a vial of U-500 regular insulin jumped a staggering 508 percent.
Price Fixing?
"Dr. Hirsch noted that one year ago Sanofi increased the price insulin glargine 16.1 percent. “And literally the next day, Novo Nordisk increased the price of insulin detemir (Levemir) 16.1 percent. In fact, this pattern repeated six months later, and this has actually happened 13 times for these two products that have total U.S. sales of $11 billion.”

[Such an collection of greed-driven price bleeding that I cannot encapsulate it -- yet.]

Drug Goes From $13.50 a Tablet to $750, Overnight
Andrew Pollack   The New York Times


That Guy Who Is Price-Gouging AIDS Patients (see just above) Also Did It to Kids with Kidney Disease

"The former hedge fund manager whose pharmaceutical company has come under withering attack for allegations of  egregious price-gouging on life-saving medication (just above) ... and it turns out he once tried a similar price hike scheme ... During Martin Shkreli's tenure as CEO of Retrophin ... the company increased prices on a decades-old kidney medication by about 20 times its original cost ... ."

[One Washington Post story]

The drug industry wants us to think Martin Shkreli is a [unique] rogue CEO. He isn’t [unique at all].

Plant used for gout 3,000 years -- in pill form since 1800s.  Pharma somehow got exclusive rights (normal apparently) -- price shot up from 9 cents a tablet to $4.85.
2013 increase in price of brand name drugs (higher every year): 12.9%.  That approaches 200% added (300%) every 10 years.
Tetracycline, 1948 drug: 5 cents a capsule until 2013 -- now $11.
Clomipramine, 1960s antidepressent, 22 cents a pill up to 2012 -- now $8.17.
In Australia, 2010, Amedra Pharmaceuticals bought the rights to abendazole, off patent, intestinal parasite drug selling for $6 a day -- raised to $120.

[Another day, another drug]

Nitropress, generic blood pressure drug went for $44 a vial way, way back in the year 2013.  Now sold by Valeant Pharaceuticals for $806. 

According to a spokesman, no one will ever be denied this medication: “These are drugs that are only used by hospitals — they are not sold in pharmacies — in accordance with specific surgical procedures. This means that whenever the protocol calls for use of these drugs, they are used.” 

[$2,000 in far away Canada -- $20,000 for us in the US]

"The price of a 30-milligram injection of the drug, according to the bill, was $19,827.90. Because at least four shots would be needed, they were looking at pharmacy charges approaching $80,000 and nearly $16,000 in copays.

"A 30-mg dose of Lupron Depot is available from Canadian pharmacies for under $2,000, according to the website PharmacyChecker.com."

The list keeps growing -- I've moved the ever elongating version of this post to On Today's Page Links -- which only has about 10 posts.

[Post Script]

Is it too late to recount the tale off a sleeping pill whose name I forget, but which cost $10 a month in 10mg dose -- and $200 a month in a lower 5mg dose: a "new drug"; trials having shown that some patients do better on the half dose.  That's how today's law is written. 

Thursday, June 25, 2015


Tom Geoghegan -- in his recent book "Only One Thing Can Save Us" -- portrays US auto manufacturers dumbing assembly jobs down (it’s called “simplicity”) — I’m just starting to write about this for the first time — it genuinely means gutting productivity nationwide in the usual short-sighted quest to squeeze labor.

In Germany (labor having a big say because of the co-determination worker councils) employees are brought into the design and manufacturing process to the nth degree. Which makes them productive enough to average $66 an hour including benefits.

In the US manufacturing jobs are now being reduced to simpler and simpler component portions — why auto workers can be reduced from $28 an hour to $14.

Thing is we only have X amount of workers — a fixed number. If we are now on a nationwide race to shrink the productivity of individual workers — that may look good for an individual company — fallacy of composition — but we are on a head long charge to lower and lower our overall output per worker. !!!

Meantime all other economies in the world — especially in the third world — are desperately attempting to pick up (and/or steal) product manufacturing skills so they can achieve maximum possible prosperity some day. We can wave to them going up while we are going down.

Saturday, June 20, 2015

90% income tax for the top 1%?

I just had one of my usual eighth-grade math flashes.

The way things are going nowadays the top 1% will continue to garner 95% of all income growth to themselves into the foreseeable future.  In 25 years per capita income should grow 50% -- meaning top 1% should go from 25% of today's 100% to 75% of tomorrow's 150%.  40 or so years down the road top 1% incomes should take 125% of 200%.

Just tax future top 1% income at 90% -- we have 99% of the votes, don't we? -- and redistribute to government programs (e.g., health, education) and/or helicopter money, etc., whatever -- and we should all live happily ever after. 

Come to think of it we could start that 90% tax today (say on income over $2 million). 

Monday, June 15, 2015

Americans under 30 support unions almost two-to-one

Pew poll reports 55% of Americans under 30 years of age approve of labor unions -- only 29% disapprove.  Among Republicans under 35, approval edges out disapproval 45% to 44%.  The propaganda hasn't worked – the culture is ours.

All that remains is to graft onto existing labor organizing laws those itty-bitty structures they are plainly short of: call them dentures.  Imposing compelling economic pressure to obstruct employees from exercising a legally spelled out process for organizing collective bargaining units is every bit as free market warping as anything the Rockefellers or the Carnegies carried off -- while atrophying the political sinews of the majority of Americans to boot. 

Making union busting a felony at state level (job loss not core offense -- free market warping core offense) opens the door for federal RICO prosecution.  33 states have their own RICO statutes.  All other forms of free market arm twisting are heavily sanctioned by law.

“But when Pew sliced and diced its responses (which Gallup did not), it found that young Americans were unions’ most fervent supporters. While 46 percent of its respondents in each of its three older age groups (30 to 49, 50 to 64, and 65-plus) viewed unions in a favorable light, fully 55 percent of Americans aged 18 to 29 held a favorable view of unions, while just 29 percent held unfavorable ones. Pew even found that a slim plurality of Republicans under 35 thought well of unions: 45 percent held positive views, 44 percent negative. For that matter, 65 percent of Democrats (of all ages) thought favorably of unions, and given the towering share of Democrats (or left-of-Democrats) working in the media, new or old, the Gawker vote should have surprised no one.”

Friday, June 12, 2015

Did Chicago public school teachers crack the ghetto code?!

Chicago public schools may have uniquely cracked what I call the ghetto code: that ghetto schools fail because students (and teachers!) don’t seen anything remunerative enough waiting for them in the labor market post graduation to make it worth putting out the extra effort. This down and discouraged vicious circle was revealed by Berkeley political scientist Martín Sánchez-Jankowski in his book Cracks in the Pavement. The professor spent nine years on the ground in five NYC and LA impoverished neighborhoods. He spent the previous ten years with street gangs. 

“U.S. News and World Report just released its annual rankings of the nation’s best high schools: Six of the top 10 in Illinois are in CPS and another three in the top 20.”

“from 2003 to 2013 and found Chicago students grew 11 points on the 8th grade math test and 7 points on the 4th grade reading test. The state grew just 7 points and 3 points, respectively.”

“[B]etween 2006 and 2014, the percentage of CPS students earning a bachelor’s degree within 6 years of high school graduation jumped from 8 percent to 14 percent. The national rate is 18 percent. … They found that Latino students enrolled in CPS are more likely to graduate high school than their counterparts in many suburban districts, including Maine Township High Schools and Evanston Township High School.”

“Salary figures provided by the Chicago Public Schools show teachers here have the highest average salary of any city in the nation. But, according to the Chicago Teachers Union’s calculations, Chicago teachers would rank second behind New York City.”

On Wisconsin; to nearby states with your children where they can still get a first-class education without you reaching into your pockets to waste 300 million tax payer dollars. 

Monday, June 8, 2015

Take the biggest bite out of street crime: police union busting

Chicago's Stop-And-Frisk Rate Four Times New York At Its Worst, ACLU Says 
12Killed, 43 Wounded In [Chicago] Memorial Day Weekend Shootings 

Maybe Chicago should switch off from New York's now former macro intrusion on the poor to New York's continuing micro intrusion (to the last horizon) on everyone; so-called broken windows policing:
A woman puts her dog leash down for a moment to scoop up poop – a plainclothesman pops out of the shadows to ticket her;
A man leaves his car door open while gassing up, allowing his radio to be heard by others – a ticket;
Riding a bicycle on the sidewalk (ooh; pedestrians are killed by bicycles in the street – particularly crosswalks – do the cops tell 15-year-old boys to go bike in traffic?);
Riding a bicycle the wrong way down a one-way street (oooh; good way to avoid being doored – broken hip if you get one is 25% fatal; DVT becomes PE);
Walking between subway cars – will never get hit by a bicycle;
”Manspreading” -- the latest: spreading knees too wide in subway seat; not touching anyone.
If someone breaks a window and nobody repairs it that may invite others to break more windows – an out-of-control atmosphere supposedly may develop.

I was there when Times Square transformed from the Great White Way into Robert De Niro's Hell. It all began with the US Supreme Court protecting pornography under the First Amendment (which of course it had to do) which for whatever reason resulted in an explosion of naughty shops throughout the area, followed by an influx of massage parlors and the lowest supply and demand of the oldest profession.

This coincided with a heroin explosion that nobody who was not there to witness it can imagine.  Methadone quelled the panic in needle park – doppies now had a way to avoid getting sick that didn’t include crawling up your fire escape. 

During the 1990s 75% of robberies and burglaries, etc., nationwide faded away. Everything from less lead in the atmosphere to legalized abortion has been credited for the drop.  My first pick is the nationwide emergence of massive drug dealing street gangs.  Now a boy going wayward (and many who were not) has a criminal franchise right on his own block (often to join whether he wants to or not) which will put him to work immediately for sub-minimum wage ("Five-O!") and offer the promise of promotion to guns and more macho mayhem later.  No need to snatch purses or climb in your window for your costume jewelry.  

In Chicago, 100,000 out of (my guesstimate) 200,000 gang age, minority males are in street gangs: dealing drugs, shooting each other (along with an amazing amount of innocent bystanders) and doing hard time (where some catch up on robbery and burglary).

As long what starts in the Black and Hispanic neighborhoods in Chicago stays in Black and Hispanic neighborhoods, the city government seems content to leave the police department sitting on the lids on the garbage cans.  Conventional wisdom has it that there is not a lot that even progressive local officials can do about the national economic maladies underlying the permanent underclass.  There’s certainly not much police can do – macro or micro – beyond cleaning up messes afterwards (think Taxi Driver).

I came of age in an America where the federal minimum wage kept up with inflation – and -- economic growth.  In 1956, Senate majority leader Lyndon Johnson guided passage of an $8.75 minimum wage in today's dollars (which a Republican president duly signed).  In 1968, President Lyndon Johnson oversaw a $10.75 minimum wage – reflecting 23% average income growth in between.  Union density in that era was in the neighborhood of 35%.

Today, a $600 a week minimum wage coupled with an $800 normal expectation for everyday positions like supermarket employee would disappear the Crips and Bloods faster than they appeared.  I read Wilson’s When Work Disappears at the same time as Venkatesh’s American Project.  Project went on longer than Work and Chicago housing projects only descended into gang infested hell as the minimum wage descended to nearly half its 1968 purchasing power – double the average income later. 

Chicago has scheduled a minimum wage hike to $13 for 2019 – make that $12 with inflation (2% a year – 8 cents X 13 = 1.04) – a dollar more than LBJ's peak, half a century -- and -- double average income later.  The poor will still be poor but better off.  

Missing union density?  As easy as saying “lost employee price setting mechanism” – a restraint of trade wrought via ruthless economic pressure under the shadow of union organizing legislation that has gone practicably toothless in old age.  Simple enough resolution: new dentures -- make union busting a felony in as many states as possible to begin – which will make it subject to federal RICO prosecution also (33 states have RICO laws).

To take the biggest possible bite out of inner city crime: prosecute union busting.

Sunday, May 31, 2015

The "side impact" of aminimum wage hike

IMAGINE that all fast food restaurants (the only ones I know the numbers for — also, I never see the inside of a full-service :-)) were somehow able to conspire to raise their prices 25% all at the same time (about how much a $15 an hour minimum wage would impact fast food prices). Demand for food is inelastic so it is in the realm of possibility that fast food might make out like gang busters. Possible.

Now imagine that fast food was able to conspire at the same time to have the federal minimum wage raised to $15 except for fast food. Most industries average 10-15% labor costs and don’t pay as low as fast food to start with (fast food 33% labor costs; 25% price hike because not all at minimum) — let’s say average price hikes in other industries that use low wage labor average about 6%; not enough to heavily hurt employment.

Wage levels tend to patronize their own wage levels. Allow me to cite an example from the opposite wage end: from a 1/ll/14, NYT article “The Vicious Circle of Income Inequality” by Professor Robert H. Frank of Cornell: “… higher incomes of top earners have been shifting consumer demand in favor of goods whose value stems from the talents of other top earners. … as the rich get richer, the talented people they patronize get richer, too. Their spending, in turn, increases the incomes of other elite practitioners, and so on.” http://www.nytimes.com/2014/01/12/business/the-vicious-circle-of-income-inequality.html?src=me&_r=0

In the double conspiracy case fast food should surely make out like a bandit because its low wage customers would benefit more from the wage hike than the food price hike would hurt them: driving business up …
… driving business up no matter who benefits from the price rise: labor or management. 

Where is all the extra dough ultimately supposed to materialize from? From higher income employees or agents who have been getting relatively more of what consumers are willing to pay — than lower wage employees in our particular economy who have been getting squeezed unmercifully below what I call their natural market value for decades (minimum wage one-third below peak, double average income later! — time to mark the minimum wage to market).

This “side impact” on fast food businesses from employees of firms that did not have to raise prices relatively as much to meet the same wage hike is probably what Card and Kruger observed in their seminal study. It is probably why business went up in the states that raised their minimum wage.

Friday, May 22, 2015

The landlords are coming; the landlords are coming!

IMAGINE we magically (without unions) mark wages to market (what the consumer will pay) -- could we hold on to the money?

"The landlord reaps what he does not sow." Familiar is the plight of the business that grows and grows as the landlord raises and raises the storefront rent. Ever more apartment renters in this country are gouged for everything they earn over subsistence. The Lord made the Earth and He's not making anymore. Also more and more rentals are going condo. If retail workers go from $500/wk to $800/wk, how much will the landlords milk?

Wednesday, May 13, 2015

The missing link in macro economics: labor extracting what the market will bear

Glad I watched Stiglitz video to the very end -- to the part where he contradicts the (fading) free market consensus that pursuing LOWER inequality inevitably causes market distortions that lead to a loss of overall efficiency.

A more fundamental understanding than even progressive economists present (the missing link in macro economics if you ask me) for why HIGHER inequality is associated with higher in-efficiency, higher in-stability and lower growth is that the true market distortion results when labor is unable to test -- indirectly -- what the ultimate consumer would have been willing to pay for the combined product of capital and labor -- through collective bargaining with capital.

When labor is priced only in comparison with other labor – what I call a subsistence-plus labor market -- I think that the most serious miscalculation of relative value occurs.


Thursday, May 7, 2015

Labor Unions Trump Luddites

Mere civil penalties -- if you can call reinstatement a penalty -- carry zero deterrent against union busting.  Firing employees who attempt to organize a collective bargaining unit can be overwhelmingly profitable (unlike practicing forms of discrimination).  Firing a few organizers packs the same tactical punch as locking out the entire workforce but with zero economic inconvenience to the boss.  An employer may even feel compelled to bust a union because the firm down the road does so and he wont be able to compete equally.

Labor unions have no chance to ever resume their role as the natural  counterweight to employer interests unless union blocking/busting will be met with serious jail time.

Disappearing organizers deprives them of more than a job: it strips them of -- both -- the economic and political sinews they need to interact effectively against competing interests. Employees may be able to find another job but they cannot find another fair and balanced society (unless they emigrate to Denmark).
 * * * * * * * * * *
Once a state legislature makes union busting a felony, federal and state RICO prosecution will kick in (there are 33 state RICO laws).

A business (which is not the defendant and which can be perfectly legit) fits the case law definition of an ongoing enterprise -- if it has:
(a) a purpose,
(b) a life outside the crime (a bank robbery gang is not an enterprise),
(c) longevity -- which is taken as over a year or substantially over. Longevity however may be considered built in: for example, if a demand is made for $1,000 a month. I imagine union busting action could be taken as having a common sense expectation of longevity -- if not, wait a year, then factor in the common sense expectation and start your prosecution.
 * * * * * * * * * *

The Industrial Revolution replaced fairly paid individual cloth weavers with steam loom operators whose incomes were squeezed below subsistence by the “Iron Law of (unorganized) Labor.” Over the same period, anyone in England who publicly advocated universal suffrage for all males was on his way to jail and then to Australia.  
The Making of the English Working Class (1966) -- E. P. Thompson

How much happier employees would have been to successfully support legislation protecting collective bargaining -- than to burn down looms.  Labor unions trump Luddites.  :-)

PS.  At first I couldn't believe reading that four years ago, California Governor Jerry Brown vetoed card check legislation for farm workers (of all most desperately in need).  Then, further informed that California has the strongest labor law in the country -- 10% cards signed, the union gets the names and addresses of all employees; 50% gets an election within 7 days, no delays.  Also been suggested Brown traded this off for support for his deficit fighting bill -- possibly figuring he wasn't giving away much even if the other side thought he was.  ???  Important revelation for many here is that states may and do pass their own, even stronger than federal, labor legislation.

[LATE NOTE:  Just came up with this gem -- in Wisconsin it is a crime to force collection of dues for a union:
"Right to work comes with a Class A misdemeanor. Requiring dues payments could mean nine months in jail and/or a $10,000 fine for each violation."

[So when are we going pass state (and eventually federal) rules criminalizing employers thwarting employees exercise of their right to follow the federally prescribed formula to organize a collective bargaining unit by firing them?]