Wednesday, March 7, 2018

Labor unions transform “price takers” into “price negotiators”

Labor unions transform “price takers” into “price negotiators.” About 20% of our labor force thrives under what could be described as perfect competition. Perfect simply
defined as ability to extract pretty much the max consumers are willing to pay for their inputs to products and services — never mind that long winded academic definition, right?

To raise most our workforce to "price negotiators" our coming blue wave Congress simply need mandate union certification and re-certification elections at every private workplace; every one, three or five years, plurality rules on the latter.

Should have done decades ago — been only way to hold on to democracy in America's unique in all the first world, anti-union labor market. Much of second and third world not fanatically anti-union culture either: Argentina and Indonesia do sector-wide labor contracts for instance.

Bottom 40% of US workforce takes about 10% share of overall income. Mid 40% plus upper-mid 19% (total 59%) take near 67.5%. Top 1% take the 22.5% — up from 10% over last two generations. See where this is going?

Newly unionized employees to take back 10% overall share through higher prices for their labor — or they won’t show up for work …

… if McDonald’s can pay $15/hr with 33% labor costs, Target can pay $20/hr with 10-15% labor costs and Walmart (bless it’s efficient heart) could pay $25/hr with 7% labor costs.

Bobby Kennedy’s son Chris was running for governor in the Democratic primary in Illinois. His father wanted to fight poverty — I remember something called "Model Cities" — but with only half today’s per capita income I’m not sure what he was thinking. Now, with doubled per capita income it should mostly be a matter of sloshing it all around better.

The bottom 40% will gently (and persistently) nudge the mid 59% to take back 12.5% of overall income from the top 1% through confiscatory taxation — of the kind we had in the Eisenhower years; and nobody gave it much thought either. With twenty times the personal income going to the same top 1% jobs, this time around we are going to get really serious about confiscation -- obviously leaving all the incentive the economy needs.

Top paid 1968 NFLer, Joe Namath made $600,000/yr in today’s money. Quarterback pays more like $12 million now. Sorry Colin (I’m sure you’re not greedy).  :-) 

 Why Not Hold Union Representation Elections on a Regular Schedule?
Andrew Strom — November 1st, 2017

Bonus: federally mandated certification and re-certification elections automatically move up to hottest issue (maybe in a hundred years) because transformative in some way for almost every household.  Dreadful for Republicans to defend against the directed-cert-election page from their own anti-local-government-union playbook.

Friday, March 2, 2018

Natural Rate of Collective Bargaining -- 100%? -- not 6%!

I'm trying to come up with an abstraction that is able to alert progressive academics that a 94% de-unionized labor market is AUTOMATICALLY a 94% defective market.  Something akin to the so-called natural rate of unemployment -- which has a certain bar that mostly everybody recognizes.  A "natural rate of collective bargaining" (NRCB)? 

Let's look a the US.  Let's say 20% of our workforce is in what could be called perfect competition condition -- meaning they get paid about the max the ultimate consumer of their services would be willing to pay (near the top 1% a lot more).  _Equal-gratification_ equilibrium.  I would expect the natural collective bargaining rate should be close to 100% of those outside this perfect competition zone (effectively moving them into the perfect zone).

94% of the other 80% of the US labor force cannot bargain effectively without collective bargaining.  I call that _split equilibrium_: labor takes whatever price it can get along the subsistence-plus/race-to-the-bottom market scale.

A high NRCB looks a lot like a lot of continental Europe -- a lot like Germany or Canada.  The NRCB measure could even point out something deficient in the latter.  And expose the Grand Canyon wide gap between other modern economy's moderate NRCB deficiencies and the almost 100% defective American rate.
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AUTOMATIC solution: our coming Dem Congress can mandate union certification and re-certification elections in every private workplace; one, three or five years, plurality rules on the latter.  Labor in other counties does not have to run the kind of almost impossible gauntlet that American employees do (unique in all the first world -- and a lot of the second and third; Argentina and Indonesia even have sector-wide bargaining). 

Mandated elections would AUTOMATICALLY become the hottest issue (maybe in a hundred years) by simple logistics, not even by merit, for the simple reason that it would impact nearly every single household and most to the core.

Why Not Hold Union Representation Elections on a Regular Schedule?
Andrew Strom — November 1st, 2017