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LATEST: It's the labor market, stupid (that's us) -- AND the psychology
Forget monetary and/or fiscal policy — it’s the labor-market policy, stupid (to borrow a familiar phrase from somewhere).
As long as ownership monopsony unopposed by labor union monopoly is able to mercilessly squeeze wages and benefits down …
… squeezing what is squeezed to the top who cannot spend it as fast as we shovel it to them — THINK $100,000,000 QBs, $20,000,000 CEOs, ETC., ACTUALLY REDUCING DEMAND …
… squeezing so much out of the bottom that too many (very many) lives become less well educated, less healthy, LESS PRODUCTIVE, or even so dysfunctional we have to spend heavy on police and jailers to chase some around ...
... or squeezing so much out of wages of former middle class jobs that people end up on the bottom because they refuse to work AT ALL for “chump change” wages: think me, American born former taxi driver (okay I’m too old now — but I wouldn’t if I could) who won’t work for $500 a week (if they do that well today) for a job that used to pay $800 a week for 60 grueling hours.
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This last takes a little development. Today’s Chicago gang bangers would gladly labor for the equivalent of $200 a week -- in 1915. Because, that would have been all the less productive economy of that era could have paid them. Today’s 100,000 Chicago gang bangers (out of my guesstimate 200,000 Chicago gang age, minority males) wont work for $400 a week for jobs that today’s economy should be able to pay $600 to $800 a week for (e.g., super market clerk).
At my old Teamsters Union local 804 (Gimble’s furniture warehouse) we spent half the day breathing hard and wet with sweat for $800 a week — in 1970; when per capita income was 66% of today’s level. Today’s 804 UPS drivers do $1200 a week, “breathing hard” — the market still demands a lot from them but they at least can demand commensurate pay -- commensurate in 2015.
The beauty of collective bargaining -- much the better if under-girded by centralized bargaining to keep the balance between monopsony and monopoly fair -- is that it informs you that you have squeezed out the last penny the ultimate consumer is willing to pay — so you have that natural incentive to give your work all you’ve got.
A lot of it seems to be the psychology too, stupid (just to use a familiar phrase :-] — see snake head) especially on the dysfunctional side of town.
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Until the American labor market is rescued from it’s pathological union-free condition there will be no change in direction from the gradual descent into more demand stagnation and greater human dysfunction -- and of course progressive political corrosion for the disempowered majority).
Easy-to-rescue: just start in most progressive states, moving to less progressive states of the union, treating labor market muscling and manipulation as seriously as we sanction every other form of unfair market warping: MAKE UNION BUSTING A STATE FELONY, backed by RICO prosecution for persistent abuse. Could it be easier?
The laws are already in place; the issues presumably long settled; the laws are curiously missing one thing: dentures. :-)
It’s really just a matter of freedom, isn't it — free to chose to collectively bargain?