Saturday, May 17, 2014

Labor extracting the max consumers will pay -- versus -- the road to subsistence-plus serfdom

What I call a subsistence-plus labor market exists when employees have no mechanism with which to withhold labor from employers in attempt to extract the maximum price consumers may be willing to pay -- pay levels set to suit employers needs only.

Examples: Fast food pays subsistence (or less).  Starbucks -- pays up a rung -- a couple of dollars an hour more plus benefits for more yuppie-attuned employees (English as a first language).  Starbucks employees may expect they are headed for better things (likely) -- may be why they endure pay too close to bottom money.  Whole Foods -- up another rung -- pays a couple of more bucks plus benefits (to the 80% who turn over) because it needs what Starbucks needs plus some additional industry.

My (un)favorite example of subsistence-plus is regional airline pilots whose pay and benefits may hover around Whole Foods level – with typically $100,000 educations and years of building flight hours – but who hope for much better things (which may be getting less hopeful all the time).

When employees whose wages extract the max consumers will pay have the opportunity to purchase products made by employees whose wage potentials are skinned (skimmed) under subsistence-plus, then, the labor price/value spectrum as assessed by consumers only becomes distorted.  Ditto for any labor-price extraction differential.   

If all employees were paid according to the maximum price their products could command from consumers – instead of too many by how little (how few rungs) above subsistence the boss can skin them – the working rubric would be: from each consumer according to their needs; to each employee according to their abilities.  (You had it all backwards, Vladimir Ilyich. :-])

There is only one modality -- introduced by legal mandate in late 1940s continental Europe, since picked up elsewhere in the world and established 
by the Teamsters Union National Master Freight Agreement in 1964 in the US -- that ownership cannot work its ratcheting-down, subsistence-plus ways around: centralized bargaining – where all employees doing the same category of work in the same locale (nationwide where applicable) work under a single collectively bargained contract with all employers.  (This should eliminate the use of scabs who don’t have a legal contract – I've never heard of scabs in Europe.) 

My old Teamsters local 804 (left in 1970, age 26) recently won (as they like to phrase it) a 30-and-out retirement benefit of $3900 a month.  Which may double what regional pilots earn while still active.

Time is a-waisting.  Not extremely long ago, Northwest Airlines squeezed a billion dollars in givebacks out of its major airline flight crews only to next year award a billion dollars in bonuses to a thousand of its execs.  The pace on the road to serfdom may be speeding up.  Help!  Now!