Thursday, June 10, 2010

Answer to the question: "where will the good jobs come from?"


I never stop being shocked at how the most obvious solution to the "good jobs" question eternally escapes our best and brightest economic brains. BIG HINT: such a question does not exist in Europe in the same desperate way it does here -- in Europe where they work many fewer hours yet.

Anybody ever going to recognize what is America's CORE economic problem: quite a bit more than anemic labor strength at the bargaining table. Opps; what bargaining table? That is the CORE problem; Americans -- including apparently our best and brightest and most progressive (they think -- but totally useless to working folks like myself!) -- have no idea you are supposed have an actually working ability to withhold your labor from the production process until you get the right price.

Simple, no-sweat way of going about this used all over the much better compensated and insured OECD world (excepting labor squeezed Japan) -- legally mandated by the labor majorities everywhere: sector-wide labor agreements.
My personal experience as a starved American worker -- in particular as a Chicago cab driver -- which used to be what Mark Thoma would have called a "good job":

1) one 30 cent increase in the meter mileage rate between 1981 and 1997 (by which 16 year mark I was hacking in San Francisco);
2) at which 1990 point the city began building subways to both airports and making the number of limo licenses unlimited, taking away most profitable long rides (a bit of explanation here: as taxi drivers were paid less and less, the quality of drivers naturally enough got worse and worse, scaring everybody into limos);
3) at which 1990 point the city also began putting on 40% more taxis (now on the way to 50% -- the city profits selling medallions to drivers willing to work for more than the steel mill in Pakistan paid).

This would never happen in labor market conscious (that doesn't sound very Marxist) Europe. Maybe you can tell me how to get cab drivers paid again (in America that is) -- and make that job a "good job" again, Mark and Rdan. Oh; I already explained the basic process for reinstituting American labor power in the comment above -- used all over the better paid OECD world: sector-wide labor agreements.
The Crips and the Bloods could not whip an honest Ronald Mcdonald and would be the first to say so. Double the minimum wage and end all street gangs. Double the minimum wage and the price of a Big Mac goes up 1/3. Who buys Big Macs: people earning less than $15/hr -- seems no problem for Ronald there. Nothing else goes up much at all.

Double the minimum wage and overall prices may jump 5% -- haven't worked it out lately. [See an earlier computation here: ] Double the minimum wage and end crime and the worst poverty for a bit of inflation (what the economy needs right now?). DOUBLE THE MINIMUM WAGE AND MAKE EVEN FAST FOOD JOBS BECOME "GOOD JOBS" AGAIN -- FOR THOSE THAT NEED IT MOST.

Anyone ever expect Obama to ever so much as inform American labor that his minimum wage is now 75 cents below Eisenhower's minimum wage -- 250% the average income later?
Whoa (re: my "good jobs" post above)! $15/hr, double today's federal minimum wage, is today's median wage. Double the minimum wage and half of America will be restored to some sort of "good job" -- if today's median wage job is considered some sort of "good job."

Why not double it -- 40 years after LBJ's minimum wage was $10/hr (adjusted) and 200% the average income increase later? If LBJ's minimum wage had kept up with average income increase, then, today's MINIMUM wage would be $5/hr more than Obama's MEDIAN wage.

Wake up America. Good jobs are just a matter of getting paid fairly for your present jobs. "Wage Up America" might be the right good slogan.

1 comment:

Denis Drew said...


Sector-wide is the only way I know of to halt the race to the bottom. Supermarket workers all over this country have been forced into two-tier contracts, paying new employees less, permanently removing one more "good job" from the labor market (giving in only after a long, painful strike in California) because minimal paying Wal-Mart decided to get into the retail food business.

Alternately, Wal-Mart, last year, closed 88 big boxes in Germany (don't worry; they still have 3000+ here) because they could not compete paying the same as the competition.

Guess what? Employers actually like one giant thing about sector-wide: they know their competition will have to pay whatever the increase in pay is (average income doubles over 40 years due to increased productivity -- in a word maturing technologies: xerox machine, internet -- but not pay, not in the US that is) so they can relax about labor cost anyway.

I was in Teamsters local 804 in the late '60s. Recent read they raised their defined retirement benefit from $3300 a year to $3600 a montH. They are just high school graduates driving trucks and working in warehouses but they have retained the power to bargain on an equal power basis. Have to have equal power with business -- called checks and balanced in politics -- or inequity always follows (from unions too if they have the chance -- "fallen" human nature). Only sector-wide contracts provide equal balance around the OECD world (in some second and third world economies too).

The Lord made the earth and He's not making any more. As long as a huge pack of money (15% of US income -- did not happen in Europe) switches from the bottom 90% of earners to the tippy-tippy top (top 3% -- but largely to the top 1/10th of 1%) all the housing construction is going to go where the money is. No new housing gets built for the majority of Americans -- which majority grows 50% in numbers every 40 years while the earth does not grow at all -- and the rest of us pay more and more for the stagnant housing stock till we are literally threatened with homelessness (or doubling up the double ups).

The Bronx apartment in the then very middle class neighborhood I left 30 years ago cost only $400/mo in today's dollars. In the now poorer neighborhood it would go about $800/mo.
The federal minimum wage was raised to $2/hr ($8.91 adjusted*) in 1974. Average income has increased 60% since (not a lot for 36 years -- slow productivity growth era) -- but 60% is still 60%.

[* ]
Parkinson's Law? :-) Expenses rise to meet income; work expands to fill the time available.

If Germans receive more compensation per hour in the labor market -- and therefore receive the same total market compensation Americans receive but for fewer hours -- then, the added benefit from more homework hours added to equally matched (total) market compensation means more overall pay for the same hours for Germans. (Teamster's Union version of life anyway.)