Tuesday, April 19, 2016

99% of African Americans to vote? -- just donate one hour every two years


A thought just starting to germinate in my mind: you know how in Chicago our political parties used to pay citizens $10-20 to vote. First, I thought of getting out the African-American vote — and I’m thinking 99% — by pointing out that if they all voted they would benefit thousands of dollars a year in government paybacks.

I started out thinking African-American because they are so classically left out of so much government concern whether it’s second-class schools, unconscionable medical care (I went to Stroger emergency once before I got Medicare — practically in the heart of downtown here — so-called “fast track” was 10 hours, for chest pain, difficulty breathing and obstetrics; everyone else waited 24 hours, maybe should sign in and come back tomorrow), lead in the water, intrusive policing, etc., etc.

Then I thought of 99% African-American voting as donating one hour of time to a movement every two years — to get the politicians coming on their knees to find out what people want. Seems like an irresistible appeal, doesn’t it? Donate one hour of your time, change your whole world for yourself and your family.

50% voting is getting them nothing (well the Post Office delivers). !00% would raise such a “scary” political organization specter that it could have the effect of 150%.

Then of course other minorities or whomever would follow suit. One way to take the country back from the oligarchs. Just starting to germinate.

Saturday, April 9, 2016

Transgender bathrooms -- has anyone ever heard of AC/DC (bisexual)?


Transgender bathrooms -- has anyone ever heard of AC/DC (bisexual)?


Transgender is a tragic condition — actually having the wrong sex body to go with your brain. 19 times the suicide rate according to a New York Times story.  “Although transsexualism (defined as those who want to change or do change their body) is very rare — a recent meta-analysis estimated the prevalence at about 5 per 100,000 … ”
http://www.nytimes.com/2015/08/23/opinion/sunday/richard-a-friedman-how-changeable-is-gender.html?_r=0

San Francisco school adopting gender-neutral bathrooms
By Jill Tucker Updated 7:11 am, Thursday, September 3, 2015
“The boys’ bathrooms and girls’ bathrooms will become just bathrooms at the first San Francisco school to go gender-neutral.”

“In schools across the country, though, bathrooms have become a battleground for transgender rights. On Monday, more than 100 high school students walked out of class in a small Missouri town to protest the use of the girls’ restrooms and locker room by a transgender teen.”

“So far, bathrooms in kindergarten and first-grade classrooms at Miraloma, as well as a centralized bathroom, are gender-neutral. The school will phase in the other restrooms used by older children over the next few years, including outside bathrooms with multiple stalls.”

“The school district’s responsibility is to create a safe environment for all students so they can learn and thrive, said Kevin Gogan, the district’s director of safety and wellness. That, he said, means accepting and accommodating the 1 percent of all middle and high school students who identify as transgender — who add up to more than 300 students.” [my emphasis]

“First grade twins Ari Braverman (left), and Ella Braverman (right), both 6 years old, show first grade gender neutral bathrooms at Miraloma Elementary school in San Francisco, Calif., on Wednesday, September 2, 2015.” [caption for multi stall bathroom -- Photo: Liz Hafalia, The Chronicle (pic since changed)]

"The boys’ bathrooms and girls’ bathrooms will become just bathrooms at the first San Francisco school to go gender-neutral [for everybody -- that's what the story seems to say!?]."
http://www.sfgate.com/bayarea/article/Bathrooms-at-Miraloma-Elementary-in-S-F-go-6481544.php
* * * * * *
Anybody ever hear about AC/DC as in switch-hitter, as in bisexual? Bruce made a lot of kids before he became Caitlyn (nothing funny here — see above). Really want to allow males who may or may not be sexually attracted to females into the womens’ bathrooms.

“A transgender woman says she was raped in a unisex bathroom at the Stonewall Inn — and police are searching for the suspect who they say regularly frequents the landmark gay bar.”
http://nypost.com/2016/03/28/transgender-woman-says-she-was-raped-in-stonewall-inn-bathroom/

One in 20,000 may be transgender (actually wrong body to go with brain) — a lot more than that identify with the opposite body gender. A lot more than one in 20,000 are willing to fake transgender for whatever nefarious or silly motive — maybe just some college frat boys drunk and mischievous.

What sex is attractive to a physical male with a female brain anyway (not to mention the 1% with gender dysphoria)? I have no idea.

I read a story the other day (can’t remember where) of a young guy (male brain — female body) who is now taking male hormones to grow a beard and muscle and hangs out with other guys in bars, etc. Who does he want to have sex with?

Who does a physical male with a female brain want to have sex with — depending on whether heterosexual or homosexual. This is where I totally lose track.

I had a gay teenage boy living with me in the Bronx back in the late 70s. I quickly picked up that he approached every older woman with a salute — careful not to brush her toes (“lest she lash out at him for no reason” — as I like to put this). Me, he wasn’t too afraid of — not bad to, but sort of like you are less afraid of your mother than you father (if you are hetero).

One of his little buddies, 16 years old, would come at me disrespectfully — I would back him off — he would be visibly intimidated — next time he would be right back at me; never caught on what he was up against in a male — I was just Hillary, a noisy girl.

You can’t be sexually dangerous to the dangerous sex — you can’t be sexually endangered except by the dangerous sex. Depending on who you think is the dangerous sex.

But, how does this understanding of homosexuality — and heterosexuality — translate into which sex a (truly rare) truly transgender person is attracted to? ??? Anybody care to clear this up for me?

Those of the apparently not so rare gender dysphoric (see above) are guaranteed to be all over the place.

The only good thing I can say for the not so rare dysphoric use is that it would have come in handy when I was a taxi driver (NYC, Chi, SF): if the mens' room was dirty or out of order I could have just tried the lady's room figuring they were used to seeing men dressed as men in there -- if not used to it -- and when you have to go you have to go.



PS.  If you go by the SF school, 1% of males who look and dress like males are going to claim gender dysphoria -- genuinelyYoung children are not going to fake this for phony reasons.  Possibly another 1% of similarly dressed males may use the ladies room for dumb to nefarious reasons: perversion, mugging, pranking or just cab drivers in a hurry.  Ergo, one out of 50 males may wish to use the ladies room.  (I often do the eighth-grade math side of things.)

PPS.  Just saw Catlin Jenner using Trump ladies room.  Wonder how Trump would handle Bruce Jenner (pre-op), you know, Olympic Pentathlon champ, using ladies? 

Thursday, April 7, 2016

Re: Seattle’ s Minimum Wage:


Cautionary Note on use of Data - by Shaefer and Wilson
http://static1.squarespace.com/static/551caca4e4b0a26ceeee87c5/t/5702ae13b6aa607cbb96f406/1459793428392/Shaefer-Wilson-Employment-Losses-Seattle.pdf

Seems the anti-min wage fellow was using two different data sources for the same chart -- typical anti-min slovenliness.

What is not noted out loud in the study is that the job loss was only 10,000 out of 410,000. Why do pro-mins (slovenly too? :-]) never take note that may be seen as a positive trade off - the trade off being that the other 400,000 got paid a lot more money.
 


The 10,000 may mostly represent the difference between the number of those who quit voluntarily because they no longer needed two (or more) jobs minus the lesser number who (re?)entered the workforce in response to a higher wage incentive ...
... that is, assuming the figures were valid in the first place.

Somebody really ought to do a survey on what proportion actually get laid off as opposed to other inputs to the minimum wage raise employment number.

Wednesday, April 6, 2016

Wages not raised by uneducated immigrants in de-unionized US -- Social Security Trust Fund II (that's two)? -- Prisoner's Dilemma explains de-unionized labor's race-to-the-bottom


Economists Mette Foged and Giovanni Peri have issued a paper reporting that sprinkling some uneducated immigrants around (more or less randomly) in Denmark actually raised the wages of uneducated natives.  The positive outcome seems down to some immigrants having skills that complemented rather than completely replaced natives', to some natives moving up to better paying office jobs and to some uneducated natives (re?)entering the workforce (possibly for newly improved wages?).

Not very helpful over here.

The Danish labor market is unionized -- with centralized bargaining even -- while the American is on the very opposite end of spectrum. American born taxi drivers (me for 28 years) used to earn $800-900/wk up to a couple of decades ago -- now probably more like $400-500/wk for 60 grueling hours -- American born wont work for such. Ditto for fast food -- at $10/wk, Chicago's labor still all Mexican and Indian.

100,000 out of my guesstimate 200,000 Chicago gang-age minority males are in street gangs, I presume because they wont slave for $400/wk. Fed min was $440 half of today's per capita income ago (1968).
http://www.cbsnews.com/news/gang-wars-at-the-root-of-chicagos-high-murder-rate/
http://data.bls.gov/cgi-bin/cpicalc.pl?cost1=1.60&year1=1968&year2=2016

Sociological point: both our "gangs" would work for half of today's taxi or low skill wages if only it were 100 years ago and if only we understood that was the best the economy could share with us -- and we'd be happy. Beautiful thing about collective bargaining is that it makes you know you have squeezed all there is to squeeze out of the consumer/economy.

With collective bargaining disappeared from the US and with immigrants sociologically willing to work-for-less, a "market clearance" gap opens into which our de-unionized natives fall -- out of sight of the data by definition because they not looking for work.
 * * * * * *
The Social Security Trust Fund should -- as in is supposed to -- run down/run out -- why else did we save it up all that "cash" if not to pay it back out  to the generation who "saved" it?  Before it runs out -- quick! -- we ought start a new Trust Fund for the following generation -- and we need to do it in time for the new FICA money used to buy the  new Trust Fund II (that's "two") bonds can be used to cash out the old Trust Fund I bonds -- continuing to "guarantee" the next generation of Social Security retirees will get theirs (or whatever phony purpose Trust Fund I is supposed to fulfill).  :-)
 * * * * * *


Reading Sandwichman today I realized that the "Prisoner's Dilemma" can be used to explain why the ability of un-organized labor to "just go down the road" to offer their services does not constitute effective bargaining power in the labor market.

Friday, March 4, 2016

Diverting minimum wage dollars -- Perfect labor market competition? -- Re-framinig collective bargaining rights -- SS TF


If a minimum wage hike is priced right it will bring in more dollars for fewer hours of work – but the employment picture doesn’t end there.  The extra dollars will be diverted from purchases higher wage people might have made to buying decisions lower wage people make.

If lower wage people make exactly the same buying decisions as higher, then, the effect on employment will be null (it's a little trickier, but that's the idea).  The difference will be in consumption: the lower wage will consume more and the upper less (that's the idea).

In practice, consumers tend to aim their purchases somewhat more towards vendors who hire in the same pay spectrum.  Poor people buy other poor people's second-hand cars -- used car lot too pricey.  Middle wage people buy off the used car lot.  Higher wages put you in the showroom.

1/11/14, 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&f_r=0.

Upshot, a higher minimum wage – if priced right – should predict a few more customers at Mickey D’s and a few less at Olive Garden.  Likely that’s what we saw in Card and Krueger (1992) -- studying firms with “giant” 33% labor costs no less.

Further clarification: if orange sellers and apple sellers started out charging the same price but orange sellers toyed with their price until they could get more money for fewer oranges out of apple sellers, then, businesses that apple sellers like to buy from, cabbage sellers, would suffer – but firms that orange sellers buy from, lettuce sellers, would prosper.
 * * * * * *
Given the perpetual motion aspect of shifting demand it might seem that what economists call collecting rents via excess market power might not – as a mathematical question – make any difference to overall efficiency or output.

As a human equation top one-percenters cannot figure out to spend all their money (could you?), slowing down overall demand.  The less well educated, less healthy, less happy more under paid, etc., employees will make for a less productive economy (drug dealing doesn’t count).  But, today we are focusing on the implications of the math.

“Efficient-market hypothesis”/”rational expectations”/”perfect competition” focused folks are often caught up in the presumption that -- assuming we let every market actor just do their thing – maximum output will result (could be) along with fairest distribution (“by definition?”).
 
But, like random atoms blown out by the Big Bang, individual economic actors tend to coalesce into structures that do not automatically maximize fairest distribution.  Businesses tend to coalesce into one-buyer monopsonies.  Labor, where in the world it can, will gravitate to collective bargaining units (unions).

If we didn’t know the topic of conversation was labor unions I don’t think anybody would disagree with the statement that: efficiency and output cannot be any better than if economic output is sorted out by pure consumer choice rather than by monopsony putting maximum squeeze on whatever random parts of the supply chain.

When we calibrate the minimum wage we think consumer choice.  Ditto for collective bargaining.

Further down the slide-to-the-bottom:  monopsonist (by definition) employers competing with other monopsonists would if they could squeeze employees harder and harder – not just for extra profit, but for survival. Think formerly sanguine supermarket managements squeezing employees to Walmart pay levels (can happen if both are unionized -- centralized bargaining solves the latter -- Walmart closed 88 big boxes in sector-wide bargaining Germany).
 
Further clarification: legally prescribed and protected balancing of monopsony power (one buyer -- ownership) with monopoly power (one seller -- labor union) sounds much closer to the definition of perfect competition (for those concerned with such) than what results when employees are cut loose to fend for themselves.
* * * * * *
The idea that more progressive states (WA, OR, CA, NV, IL, MD?) could individually make union busting a felony -- make prohibitions against coercion in the labor market actually enforceable -- doesn't seem to be getting much traction -- though it is so simple and so vital. There's no legal bar to states adding to federal labor protections that I know of -- California's labor laws for instance are stricter than Uncle Sam's.

Maybe it's more a matter of the culture. We are just so used to looking upon the firing of organizers and joiners as civil matters -- un-enforced by laughable-at remedies -- rather than as criminal matters that we just can't shake off the habit.

Try to manipulate or coerce markets for goods or services (try to take a movie in the movies and tell them you were only kidding -- see you in a couple of years, for real) and it is big jail time. But in the most important market of all -- that decides the personal lives and political influence of the broad majority of Americans -- coercion of employees is just our (not any other modern economy's or culture's) way of life.

Union racketeering does less harm to pocketbooks (maybe no political damage at all) than eliminating unions altogether. But, racketeers are identifiable bad guys, leg breaking hoods. Union busters happen to be the pillars of the community -- really are -- who organize and operate our economy. That image may help sneak them by our usual sense of outrage. Time to get past outmoded habitudes (no sic) and flawed culture and to get logical about the economic and politically ruinous truth of union busting. 
 * * * * * *
Last little tasty: why would we build a Social Security retirement Trust Fund (TF) if we did not intend to deplete it at some point?  Possible real usefulness: to cover any temporary shortfall in FICA revenue while Congress gets around to upping FICA or cutting benefits.  From that standpoint, today’s TF is equipped for about a 20 year long “emergency.”

Would it make sense to maintain today’s giant TF at today’s level forever – “slush fund”? – if income and outgo varied back and forth year to year but basically balanced out?  Even less sense to keep inflating the TF?  That would just define a permanent mechanism for converting FICA revenue – supposedly being saved for the future – into cash for current expenses that would otherwise be funded with income tax.

No fear.  By the time the TF is running out it will be paying 25% of SS retirement – with income tax – or as much as $250 billion (quarter of a trillion!) a year.  Just lower the income tax by the same amount we hike the FICA tax.  Without further ado: by then per capita income should be up 20-30% (along with whatever free gifts of technology).  What me worry?


ADDENDUM
Ultimately I think it boils down to this: If the trust fund is really "savings" to cover the retirement of one generation -- that's all it can do, no? -- WHERE ARE ALL THE TRUST FUNDS FOR ALL THE SUBSEQUENT GENERATIONS? 

Maybe the real solution (to frozen-thinking, that we have to use the trust fund the way it was un-thinkingly designed) is to start another trust fund for the next generation -- and pay for it with the same dollars we would have used to cash the trust fund bonds. 

IOW, raise the FICA tax to extract as much money as the income tax would have been raised to cash the bonds. This will go down great with Republicans since FICA money is extracted from the bottom 90% -- and 40% (!) of income tax is extracted from the top 10%. Can't have that -- "47%" Mitt and the Donald will go along with that.

Of course we could cover bond cashing with income tax by printing money -- can't run a deficit with FICA. OTH, with the new trust fund you could say we are printing the bonds. :-)


EXTRA  ADDENDUM (to first part above)
Just to think min wage re-distribution of spending through a little further (a little is all I'm capable of):
 -- Suppose higher income people usually spent 100 dollars on lower wage hours (fast food) and 100 dollars on medium wage hours (widget making).
 -- Suppose after a minimum wage raise they spent 110 dollars on 90 minimum wage hours with only 90 for medium wage hours.
 -- Suppose the minimum wage workers spent the extra 10 dollars in exactly the same places (almost): 10 on fast food and 10 on widgets.

Same hours worked -- different consumption of goodies?

Problem with that is that 10 dollars now spent for min wager hours will now buy 9 only hours of work.

But wait; the 9 min wage hours will now pay an extra 10%. Suppose those workers in turn spend them in the same proportion. Then, the extra money that goes to the next min wage hour in turn ...
... starts to sound like how banks create money with credit while holding back 10% for liquidity doesn't it?

Just saying. 

 

Tuesday, February 16, 2016

What is the multiplier effect of investing political capital in increasing union density?


I wonder what is the multiplier effect of investing political capital in increasing union density?
 

http://www.nytimes.com/2016/02/16/us/politics/left-leaning-economists-question-cost-of-bernie-sanderss-plans.html?smid=tw-share&_r=1

” They worry that Mr. Sanders, as president, would exhaust his political capital on what they call a fool’s errand, at the expense of other initiatives on education, infrastructure, climate change, worker benefits — and the Affordable Care Act itself. "

” if Mr. Sanders were elected and fought for a single-payer plan, it ‘would rapidly destroy his administration by using up every ounce of political capital he’s got.’ ”

My comment over at Economists View:
The answer is to build up an unbeatable mountain of political capita by rebuilding union density. How? Starting in progressive states with Democratic legislative majorities — make union busting a felony.

There are all sorts of restrictions on union bargaining methods — e.g., no secondary picket lines — that are enforceable. None of the restrictions on illegal union busting are the slightest bit enforceable.

Make unions attractive by example — let people in red states see how positively they work — make people in red states jealous. Change the culture — get more union states. Then — on only then — we can get everything we want.

Sunday, February 14, 2016

Social welfare spending hasn't reduced poverty much? No surprise.


Social welfare spending hasn't reduced poverty much?  No surprise. Example: EITC, $60 billion -- sound like a lot?  Equals 1/3 of one percent of GDP in an economy where 45% of the workers are earning less than what the minimum wage could very practicably be: $15 an hour.

BTW, that minimum wage would shift 5% of income from the 55% who now take 90% of overall income to the 45% (or should we say shift 5% of income from the 54% who now take 70%?).


What are needed are non-skilled jobs that pay between $600 and $800 a week -- the same jobs that exist now but don't pay enough to keep 100,000 Chicago gang age males (out of approx 200,000) out of street gangs.  My old job doesn't pay even near $800 any more: taxi driving (NYC, Chi, SF).  Fast food work in Chi is owned by Mexican and Indian immigrants because American born wont work for so little (even $10 an hour minimum in Chi -- of course the min was $11 in 1968 when per capita income was half today's).


The money is there -- to pay people to work.  If it isn't there we can forever forget about reducing poverty.

Wednesday, February 3, 2016

Re: "The costs of inequality: When a fair shake isn’t" by Alivin Powell


Re: “Inequality, it’s not just about wealth, it’s about power. It isn’t just that somebody has some yachts, it’s the effect on democracy. For me, the big issue is the power problem. … I think we’re in a really scary place.”
— Marshall Ganz
http://news.harvard.edu/gazette/story/2016/02/the-costs-of-inequality-when-a-fair-shake-isnt/


We can trace poor education in ghetto schools down to low pay in the low skill (entry level, e.g., retail clerk) job market. We can trace crime (especially homicides -- e.g., Chicago's daily shoot-em-ups) down low pay in the low skill job market.

Berkeley professor Martín Sánchez-Jankowski learned that ghetto schools don't work because students (and teachers!) didn't see anything remunerative enough waiting for them in the job market to make any extra effort -- while spending nine years on the streets of five poverty stricken neighborhoods in NYC and LA.
http://www.amazon.com/gp/product/0520256751?keywords=cracks%20in%20the%20pavement&qid=1454510958&ref_=sr_1_1&s=books&sr=1-1

100,000 out of my guesstimate 200,000 Chicago, gang-age minority males are in street gangs. My assumption -- based on my and my fellow co-workers parallel experience (below)-- because the kind of jobs easily available pay about half a grown man minimally needs to earn to live like an adult (even with another adult): only about $400 a week.
http://www.cbsnews.com/news/gang-wars-at-the-root-of-chicagos-high-murder-rate/

Noto Bene: Back when Lydon Johnson was president -- and per capita income was only half of today's ($15,000 v. $30,000) the federal minimum wage was $440 a week! !!!
http://data.bls.gov/cgi-bin/cpicalc.pl?cost1=1.60&year1=1968&year2=2015

My old (especially "old" -- I'm 71) Chicago taxi drivers "gang" used to make about twice what I guess these guys make today. That was before the fare dropped off 50 cents a mile, while 40% more cabs were added, opened unlimited limos and build subways to both airports. Unlike the former lease system (60/40 split) ALL the fare shortfall now comes out of the drivers' ends.

The money is obviously there for the drivers -- it was there before. $15 an hour is there (without waiting 5 years to sneak up on it) for high labor costs businesses like fast food (uniquely 33%). $20 an hour should be there for 10-15% labor costs businesses. Was before in supermarkets -- before Walmart two-tiered their contracts. Is definitely there for very high skilled regional airline pilots who are making $500 a week hoping to move up to the "big time" while living on food stamps!

The money is there because the consumer has it (two generations after the minimum wage was $11 -- something about economic growth) and is willing to pay it. But, the only way employees can test consumers' willingness to pay (other than a minimum wage at the very bottom) is collective bargaining with the employer (with one eye on how far to push the consumer -- just like when you set the minimum wage).

There's not even that much money involved: about 5% of income shift will pay for $15 min wage -- maybe 10% (pure guess) to get most low skill jobs more in the range of $20 (collective bargaining will keep a sharp eye on the consumer here). Remember, per capita income typically grows 20% over 10 years -- along with the free gifts of technology -- so the consumer will get it back. That is, if the top 1% stops bleeding off all the growth; high labor density (AND ONLY HIGH UNION DENSITY!) will take care of that -- by hook or by crook.

At one time we had high union density and everything worked fine. The legal mechanism even then didn't say too much more than that if management stole it had to give some of the money back -- meaning if they fired organizers and joiners they had to re-hire. As such labor union law as sort of on the honor system, but because of social consensus it somehow worked ...

... which consensus has long since disappeared and taken the whole nation's economic and political health down system with it.

Union busting is much more pernicious than labor union racketeering. Racketeering only bleeds some of what you've got. Busting steals it all (including your political sinews) before you get it -- but busting is done by the upstanding natural leaders of the community, so we just don't seem to catch on.
 

To approach perfect competition the monopsony condition of the labor market (one buyer) must be balanced off by the monopoly of a labor union (one seller) -- only way for half the means of production (the labor half) to test the willingness of the (ultimate) consumer to pay.

Management can claim there are many monopsonists in the labor market (therefore many buyers) but that just prevents on super monopsonist from paying computer programmers as much (as little) as burger flippers. That sets up what we have in the US -- what I call a subsistence-plus labor market where labor's price is set according to what it has to offer compared to other labor -- rather than what the consumer market is willing to pay.

The perfectly competitive market is exactly what labor needs -- as long as you know exactly what a perfectly competitive labor market really means.

Any other form of market warping and muscling is quite rightly heavily penalized (try to take a movie in the movies and tell them you were only kidding -- see you in a couple of years). Forget Congressional help for now. Progressive states are beginning to understand that they can set their own labor standards that add but not subtract (federal preemption) from federal law (just as with local minimum wages).

To restore American economic and political health, progressive states can make union busting a felony -- automatically invoking RICO for persistent abusers (which can deter "playing at" union busting -- 33 states have their own RICO statutes).

In Maryland for just one instance Democrats have a 33-17 edge in the State Senate and a 91-50 edge in the House. WA, OR, CA, IL, NY, anybody listening?

Tuesday, February 2, 2016

Collective bargaining is closer to perfect competition


Collective bargaining moves closer to the definition of "perfect competition" -- for whatever that's worth.

Jimmy Hoffa would say that labor owned half the means of production -- the labor half -- and that short of a law requiring labor, ownership and the (ultimate) consumer to get together to set all product prices (an impractical way to sell candy bars), that collective bargaining is the only way to keep labor in the price setting game.

I know the dictionary definition of "perfect competition."  I don't know if economists (or some economists and not others) think that any deviation from such results in lower efficiency.  Seems to me that unblanced market power just rearranges distribution of the "lump of product."  No matter.

What I want to load on the balance in favor of labor union practicality is that, by definition, unions bring the market closer to perfect competition -- by balancing the monopoly power of labor -- one seller (ask any conservative if a labor union is a monopoly) -- against the monopsony power of ownership -- one buyer.

Ownership could counter that there are many "one buyers" in today's labor market.  Which surely moves the market closer to perfect competition than the extreme of one big buyer hiring all labor: which might allow ownership to pay computer programmers the same as burger flippers.  What multiple monopsonists do create (what we do have in the US today) is a subsistence-plus market wherein labor's price is set by subsistence (if that much) plus how ever much more labor is worth compared to other labor -- working up a skill increment ladder -- rather than paying labor by however much the ultimate consumer might have been willing to shell out.

If another definition of perfect competion/efficiency might be the balancing of market satisfactions/dissatisfactions all around -- as is achieved when labor/owner/(ultimate) buyer get together to make a deal -- then collective bargaining is the only known way to achieve that kind of balance. 

US labor market monopsony hits the lower skill labor market three-ways hard: the customary race-to-the-bottom price problem, aggravated by the infinite supply of interchangeable employees, which employees have to sell today or "throw away" (maybe miss meals).  

A subsistence-plus labor market ultimately distorts output in favor of which employees may be manhandled the most/least.  Collective bargaining more structures an economy to produce in accordance with pure consumer preference.

Tuesday, January 26, 2016

My Southern Bronx strategy to down Bloomberg


My Southern Bronx strategy to down a Bloomberg candidacy -- one picture is worth a thousand words (two even better):

My art-deco high school -- opened 1941

Picture when still operating of Bronx County Court House -- opened 1939 -- a ten minute walk north from Cardinal Hayes
 
Both remain in pristine condition, today. 
*******************************************
In 1977, in response to the national crime wave, the Bronx was forced to open a new $120 million (2016 dollars) courthouse down the hill to catch the overflow.

In 2004, long after the crime wave had diminished 75%, Mayor Bloomberg opened a new $500 million courthouse across the street from the old-new one -- closing down both beautiful courthouses -- nobody knows why.  Giving the Bronx two more derelict structures -- just what we needed.

Bloomberg perpetrated the same financial folly in Brooklyn in the same year to the tune of $750 million.  Don't have personal knowledge of Brooklyn courthouse(s) that existed but I never spotted any dilapidated structures passing through Brooklyn civic center (just the other side of the Brooklyn Bridge).

Before posting the new-new courthouse pictures I should throw in my eighth-grade math take on Bloomberg's stop-and-frisk circus.  Stops went up 7X under Bloomberg -- again -- after crime had subsided 4X = 28 times as many stops per reported crimes.  Thought this funny: if it is a thousand to one that a cop has justification to stop one kid on the way to school, it must be a million to one against two together, a billion, etc. etc. -- but it would be the same four, five kids together over and over again.



The old and old-old Bronx courthouses are probably being put to some use by now -- don't know; been gone from the Bronx a long time.

Imagine the Donald (not my favorite person) at debate comparing his building billions of dollars of commercially viable buildings in New York to Mike wasting billions duplicating perfectly functional courthouses.

Friday, January 15, 2016

Re: Is Vast Inequality Necessary?, Paul Krugman, JAN. 15, 2016


If the question is whether cutting rewards at the top will cut incentives for the most able to produce -- here is the final MOTIVATIONAL answer; look no further. The power of incentives are RELATIVE not ABSOLUTE -- in the way human nature works.

Relative, that is, to what we PERCEIVE to be the maximum capability of the economy (of our time and place) to reward us -- for our skill set.

Lately, I've been explaining why two sets of gangs -- Chicago street gangs which have something like half (100,000!) of our young, minority males and my old American born taxi driver gang -- refuse to work at jobs available: because the pay may be half of what they (we) are willing to work for (in our time and place). While we (our two gangs) might enthusiastically have been willing work for HALF OF THAT PAY -- in 1915 (100 years ago) if we perceived that that was the maximum (there's that word) that that much less productive economy was capable of rewarding us with, then.

Ditto for CEOs, QBs and TV anchors who now make 20X what their fellows made two generations ago even though US per capita income only doubled since.
* * * * * *
Meantime (back in the ghetto) the federal minimum wage is almost $4 an hour below what it was in 1968 -- er, uh, double the per capita income since. I personally see $800 a week as the norm for most low skill work (at firms like supermarkets with 10-15% labor costs) -- with the very minimum wage at $600 (for firms like fast food with 33% labor costs).

The beauty of collective bargaining is that we know we have extracted the maximum that the (ultimate) consumer (not the boss) is willing to fork over.

Unless I'm mistaken, labor racketeering does much less harm to the worker than outright union busting. Why is the later subject to no market warping felony? Especially since the latter makes any other form of democratic governance impossible.

Friday, January 8, 2016

Low union density = secular stagnation (and a host of other ills)


What is the core economic difference between Germany and it’s’ economic dynamism — and — the US and our (secular?) stagnation?

Union density. Anybody offer a more important — or even any another — core difference?

Leaving other macro angles aside -- wouldn’t abandoning the vast majority of economic actors in a theoretical economy trapped in unopposed monopsony (one buyer: the employer --  unopposed by one seller: a collective bargaining unit) be expected to result in economic stagnation? Couple the inevitable demand log jam at the top (actors who cannot spend it as fast as they make it) — with — debilitated personal lives (tens of millions) at the bottom (sub-par education, health, job networks, etc., etc. — paired with much economic drag on everybody else trying to partially remedy the symptoms) and what else could be expected of our imaginary economy.

The universal union busting that leaves our (the US’s) working majority in an inescapable monopsony black hole happens to be ipso facto against the laws — both state and federal. So when are Americans simply going to attach felony penalties instead of no penalties to breaking what should be our most important economic empowering and politically enabling laws on our books?

What other form of market muscling is left completely unsanctioned? What other form of market muscling is not treated as a felony? Every form of market muscling except the most important one.

Almost forgot to mention -- for those not in the know (I didn't used to be) -- federal labor law preemption means individual states cannot subtract but they may add. In Maryland for just one instance Democrats have a 33-17 edge in the State Senate and a 91-50 edge in the House. WA, OR, CA, IL, NY, anybody listening?

Tuesday, January 5, 2016

Re: The Closed Marketplace of Economic Ideas - Federico Fubi


 " ... you might wonder what to make of Robert Lucas’s view that rational expectations enable perfectly calculating “agents” to maximize economic utility."
https://www.project-syndicate.org/commentary/top-economists-rankings-unchanged-by-federico-fubini-2016-01

Not totally on topic but, the rational expectations thing triggers this response from me: Economists as a whole (including too many progressives?) fail to appreciate what can truly be likened (explanation below) to a "black hole" of monopsony that the vast majority of American "economic agents" (a.k.a., employees) are (doubly) sucked into, unable to escape.

A black holes works on a vicious circle of increasing mass which in turn increases gravitational acceleration which in turn increases mass -- it all starts when a neutron star creates gravitational acceleration at a fraction of the speed of light that is able to increases its mass.

Simpler labor market explanation: one buyer (an employer) unopposed by one monopoly (a collective bargaining unit) pays subsistence-plus wages: subsistence plus an increment or increments more depending on added increments of value to be gained from labor -- to be sold as cheaply as possible to the (ultimate) consumer. Unorganized labor for its part cannot escape whatever such wage scale employers lay out without LITERALLY starving to death. Wheels within wheels of monopsony.

To round out the picture: the check on the balance of monopoly v. monopsony should be the (ultimate) consumer of the mutually produced product. First balance off the power to trap and hold labor (which accounts for the vast majority of "economic agents") -- then rational expectations theory might better represent reality.

Saturday, January 2, 2016

Hell for minimum wage "opo researchers"?


FUN TIME:

I’ve been thinking that minimum wage advocates should launch a national challenge to minimum wage opposition researchers (e.g., Richard Neumark) — daring them to admit that minimum wage hikes very well may (actually) cost job losses in the middle income range.

As I theorize, some money spent on (diverted to) higher prices for low income produced products would have been spent on middle income produced products — had not the minimum wage risen. This is based on the assumption that people in different income ranges tend to spend somewhat disproportionately for products produced by employees in their own income range.

Allow me to cite: 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

The fun is: if we can get minimum wage “opo researchers” to admit that min wage increases very possibly mean money and jobs are lost to middle income earners, they are forced to admit min wage increase must help low income earners overall. Our position is unassailable (in public debate credibility) because it admits (is based upon!) admitted job loses caused by higher min wage.

What a hell for “opos”?!    :-0