Tuesday, February 16, 2016
I wonder what is the multiplier effect of investing political capital in increasing union density?
” 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. 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
Tuesday, February 2, 2016
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.