Monday, May 2, 2011
The answer to the American labor "Disaster" is not a floor under inadequate incomes
TODAY'S COMMENT ON THOMA'S ECONOMIST'S VIEW: http://economistsview.typepad.com/economistsview/2011/05/links-for-2011-05-01.html#tpe-action-posted-6a00d83451b33869e201543212b890970c
Re: Economics Principals
Here we go again. David Warsh -- a commentator whose breadth of understanding normally dazzles me -- quoting this as a good summary of what to do about so called "inequality": “The only things that can possibly address inequality of a magnitude that will soon be judged to be unacceptable in this country are much higher levels of taxation on the well-to-do and a negative income tax for the poor.”
If, first, our progressive elite understood that it is not about wan "inequality" but more like what the Palestinians call the "Disaster", they would understand that what American workers need is not a guaranteed floor under inadequate incomes but the median wage to double over time whenever average income doubles, not grow only 25%, for the minimum wage not to drop in half (by early 2007) over the same doubling per capita span.
We, American workers, would like to earn $25/hr on the average with a $15/hr minimum wage in the poorest parts of the country (the latter with all of 2% direct inflation*). We American (Chicago) cab drivers do not want the mile rate on our meters to get one (1!) 30 cent increase over the course of 16 years (81-97) period, at which mid point the city began adding 40% more cabs while cutting the business nearly in half with subways to both airports, unlimited limos and (the coup de grace) free trolleys between all the hot spots downtown (fine transportation progress, but what's with 40% more cabs?!).
What American workers need is the power to protect themselves in the market place -- and in the legislature. Of course nobody in America from cab drivers to dazzling progressives has any idea anything is so fundamentally out of whack.
I caught the answer to the Disaster (A.K.A., Great Wage Depression) -- assuming anybody in apparently brain isolated America knows there is a question -- the first time I saw it; wondered why I never thought of it myself, so obvious from the purely theoretical point: legally mandated, sector-wide labor agreements. The one and only answer to the race to the bottom. Canada has a lite version right next door: is Canada like the South Pole?
See these two books for how it works so well in Germany, undoubtedly the leading example of a successful capitalist economy:
"Were You Born on the Wrong Continent?: How the European Model Can Help You Get a Life" by Thomas Geoghegan. http://www.amazon.com/Were-You-Born-Wrong-Continen/dp/159558403X
Union of Parts: Labor Politics in Postwar Germany (Cornell Studies in Political Economy) by Kathleen Ann Thelen
Reply to myself -- just another insight of a sort, not yet sorted out itself:
The presumably (supposedly?) avant guarde Berkeley economics faculty feels no personal responsibility at all (as far as I know) for the violent goings on at their public schools. If they don't feel any personal responsibility for making Berkeley public schools safe (attended mostly by poor minorities?) -- especially safe -- good learning places we cannot in the least expect them to take serious responsibility for the poor side of town(s) across America.
OTW, if you are from the poor side of town where you live we can expect you to be seriously anxious about what is going bad in Berkeley public schools thousands of miles away.
It's not what you know -- that makes you useful -- it's apparently who you identify with -- that makes you useful -- think LBJ v. Obama. As I would say midbrain outflanks forebrain (no matter how dazzling) again and again.