Sunday, November 6, 2011


I have been spamming around that $10.15/hr [was the] 1968 federal minimum wage ($1.60/hr adjusted) -- going by the Minneapolis fed reserve bank online inflation calculator...
...and that today's US median wage is $15/hr going by chart 3.5 on p. 134 of "The State of Working America, 2008/2009."

The lost growth facts may be more extreme.

According to the BLS online calculator -- which uses the most widely accepted index (CPI-U) -- $10.43/hr was the 1968 minimum...
...and dividing an annual median wage of $26,363 -- reported by Harold Myerson -- by 2080 hours, today's US median wage comes in at $12.68/hr.

All -- following 43 years of improving productivity
(we are both old enough to remember the typing pool) -- double the per capita income since.

Somebody -- please! -- just say the words out loud: sector wide labor agreements, sector wide labor agreements, sector wide labor agreements.
Yesterday, 11:02:59 AM

I think Germany got a min wage for the first time of $7.50 a couple of years ago. I supposed then it was mostly for the east. Last I heard -- a few years back -- the German 10 percentile wage was $15/hr (the American median wage; perhaps even that optimistically), so the min seems not a critical measure of German worker conditions -- Germany pretty much having invented sector wide labor agreements, which labor market setup chased Wal-Mart 88 big boxes out of the country a couple of years back for not being competitive at the same wages everybody else pays.

New theory comes in -- like Richard C. Koo's "government as the BORROWER of last resort"; the answer to the Great Depression?; the obvious angle both Keynes and Milton missed? -- and people at least discuss it. Decades old, round the world successful practice -- like sector wide labor agreements; the only possible out of the race to the bottom that I have ever learned of or can think of (it's one of those things you wish you had though of) -- and nobody even says the words out loud. ???
Yesterday, 5:04:11 PM
I don't care if the minimum wage is $30,000/yr if the median wage is $100,000 (in today's buying power) as some day it undoubtedly will be (if we don't blow ourselves up or Jesus comes first) -- I want the minimum to reflect the maximum that could be extracted for that job without harming the worker more than helping (because I am very likely to be that worker). Suppose you dignified life wage is lower than that.

If -- at that "maximum extraction point" (don't look for that phrase in any text book :-]) -- there is still not enough for a dignified life, then it is time for the earned income tax credit or a subsidized higher minimum. Since the minimum should minimally be (in this cab driver's indubitable wisdom) $31,200/yr (2080 hours) this should not be a problem.

Yesterday, 3:07:06 PM

You are right. I am pushing sector wide labor agreements here without even explaining what they are all about. Under legally mandated, sector wide labor agreements every worker doing the same type of job (e.g., retail sales) in the same geographic local must work under one common contract for all employers.

This originated on continental Europe after WWII as a program Republicans would have loved in the beginning. It was intended to restrain labor unions from beginning a race to the TOP (we actually had some of that here in the late 60s and early 70s): each workplace claiming they deserved more money because another company was paying more -- and round and round. Keeping labor's price down was intended to free up more money to go to reconstruction of war torn nations. (England didn't do it which is why England fell behind according to Barry Eichengreen in "The European Economy [Since] 1945."

The fabled European welfare state was considered at the time a compensation to get labor to accept sector wide collective bargaining.

Upshot: sector wide also fends off the race to the bottom -- seemingly creating the perfectly fair and balanced labor market -- seemingly perfect compared to the labor market craziness we have here anyway.

I was like one of those nineteenth century farmers who read pamphlets to try to understand how they were be crucified (on a cross of gold). Endless stories like this: My husband worked as a unionized butcher for whatever chain for 25 years and then one day they just told his local that next week they would start getting their meat from an outside nonunion firm. All the stories seemed in one direction -- down, down; with no way out.

Then I accidentally read about sector wide somewhere and instantly recognized a way out -- because I was desperately looking for one -- unlike our progressive economists, even our very best ones.

A few weeks ago Brad DeLong -- one of our very few top progressive economists -- was musing on his blog about Matthew Yglesias' -- one of our very few top progressive columnists -- speculating (they were just talking; not seriously proposing) whether breaking up the barber cartel would help the poor people. THE BARBER CARTEL!? On commenter on DeLong's blog told of doing his two barbers' tax return to insure they got their earned income tax credit. DeLong was apparently embarrassed enough by the reaction that he (I think) deleted his own post.

The lack of sense of proportion about the real world by even our very top progressive shows why they never pick up on sector wide -- I guess. They are not desperately looking for a way out. They never even notice that the median wage may now be way down below what the minimum wage could very workably could have been.

So I do what I can to wake them up from my home computer -- like above comparing how a new idea ("BORROWER of last resort") gets at least some discussion while a decades old, world wide proven idea like sector wide never sees the light of day between the oceans here (not quite: it is used in Canada). Something, somehow has to wake our best progressives up.
Today, 8:12:33 AM

All that has to happen is for someone to tell the people what has happened to them -- that the median wage is now lower than what the minimum could very workably have been.

If we could have foretold to Americans of 1968 that by early 2007 the minimum wage would have shrunk almost half ($5.50 adjusted) and that 25% of our hourly workforce would be earning less than LBJ's minimum ($10.15?, $10.43?) they would have assumed some disaster happened on the level of a comet strike. If we told them that, no, per capita income would have doubled they might have burned us at the stake for mad witchery.

Americans of today are in the position of the proverbial frog put in cold water, gradually heated to boiling, doesn't notice and jump out. Tell wage starved Americans their boiling point should have been reached and tell them how easy it is to jump out (sector wide, fair rebalancing of the labor market) and don't vote for anybody who does not support (careful introduction of) madated, sector wide collective bargaining ? :-)

Point out that mandatory union formation will correct the political imbalances too with financing equal to special interests and the overwhelming majority of votes.

Let's not commit Obama's cardinal sin and never discuss the most opportune way out with the people. I believe supermarket and airline workers would kill for sector wide. Just tell them where to vote!

Today, 12:39:27 PM

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