My trade tirade for today

Outsource enough jobs and that floods the home market with extra workers – a labor market in the American case where labor has uniquely little collective bargaining power due to thorough de-unionization.

I guess that outsourcing our jobs on a scale that can grow prosperity for nation of 1.3 billion people, almost by definition must have caused a flood in the labor market here.

But labor here also has “insourcing” as I (a cab driver) call it to deal with. Meatpacking companies build plants seemingly incongruously far from any source of domestic labor. Build them and Mexicans will come – at half the pay and next to no benefits. Ditto for a minimum wage of $5.15/hr for which American born workers simply will not show up.

So today’s American workers may face not only a flooded labor market due to workers who will work cheap someplace else – but they are also beset in the labor market place by an additional flood workers who will work cheap right here.
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Additionally, even if lower income earners recouped enough money from buying cheap foreign manufactures to make up for some of their lost pay – upper incomes gain equally from cheap priced manufactures without any trade off in lost pay for the most part: ratcheting up inequality.

Inequality or not, lower incomes do not get any break in the price of expensive goods and services produced by upper income Americans so their pay loss to globalization is mostly unrecouped.
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For all this, I don’t believe the root of American labor’s deprivations is not mostly globalization or immigration. It is labor’s gaping lack of understanding of the need to collective bargain from a strong position in a free market – not to just work hard and play by the rules and believe you will get your fair share.

Dual-answer whenever American labor wakes up: 1) sector-wide labor agreements (collective-collective bargaining: the only answer to the race to the bottom) and, I think, 2) revolving (like every four years) union certification and RE-certification elections in every workplace (the only way to keep some union leaders permanently on their toes I am afraid – no need to fear decertification with sector-wide agreements: non union firms are forced to work under conditions negotiated by union terms).

Posted by: Denis Drew | June 10, 2008 at 03:35 PM