Thursday, October 9, 2008

Chinese snake dance theory -- v. -- reptilian (economic) geek responses

If we could put everyone in the labor market to sleep and change their pay around without them remembering what they used to earn when the woke up (I saw a movie like this once) -- if we shaved what we thought was the excessive wages of the top 3 percentile in today's American labor market and spread it over the pay of the bottom 90 percentile so that the overall result resembled 1973 wage distribution -- and then woke everybody up: the top 3 percentile would still compete with each other with the same skill sets, they just would be competing in a (now) poorer country; the bottom 90 would do the same in a (now) richer country.

Otherwise all should go on as before. Well, not completely as before: more goods would be produced for lower wage workers (more cars, fewer boats) which -- since lower wage workers tend to some extent to work in businesses serving lower wage consumers -- might result in more demand for lower wage workers. Corresponding lower demand for to top 3 percentile earners could just mean they had to lower their labor prices a bit -- but we are being overly theoretical.

That is my (cab driver) "Chinese snake dance" theory of wage and employment. :-).

Is such adjustment dangerous to the economy if too far out of proportion? Too far out of proportion is top earners making 5-25X what similar employees made 25-35 years ago for doing the same thing -- while the minimum wage drops almost in half as average income doubles. The latter is something to worry about!
Boys who are on the hunt for new ideas cannot come up with new ideas because they are on the hunt -- for a kill today -- not the time to introduce new thoughts, no, no; time to cooperate using what we all know already.

Unfortunately, this modus operandi -- this rigid hunter/not-gather instinct -- follows geek (economic) boys into the library when they are all alone at 1 AM. Just as surely as a cat's eyes will follow a moving object back and forth, back and forth, geek boys will internally coordinate all (not some or only most) of their thinking with what every other geek boy is thinking all over the country when they are involved in a national conversation. CANNOT COME HOME EMPTY HANDED TODAY -- EMBARRASSING. :-)

Could this be why the abstract answer to the race to the bottom -- which is lying around waiting to be picked up all over the world from Indonesia to Canada: sector-wide labor agreements NEVER (!!!) makes it to the national conversation table while some last sliver of brain dead 1940s labor law, the card-check, spotted by some smart labor lawyer, is pressed into service as the salvation of labor organizing.

What if he had not come across it? Can we not think for ourselves? Are we to have fourth-world labor law behind Indonesia, Argentina and modern OECD economies?

[Addendum: Maybe if I could talk some Republicans into pushing sector-wide collective bargaining -- as a means of one-upping Democrats with the blue collar who Republicans are about to lose (David Frum a good prospect?) -- maybe then progressives would scramble to get out front on sector-wide even if they did not fully understand what they were pushing. He, He. Maybe if I could just scare progressives into thinking I was getting Republicans to go alone when I wasn't really getting anywhere with them -- maybe that would be enough to panic Democrats and progressives into pushing sector-wide. He, he, he.]

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