Thursday, June 7, 2012

How sector-wide labor agreements could reshape the American labor market

If McDonald's (not to pick on one brand name) had to come to a labor agreement -- ACTUALLY IF ALL FAST FOOD businesses had to come to a common labor agreement with all employees, so called sector wide labor agreements -- the price of labor would tend to come to equilibrium where the most money would get split by labor and ownership.

A wage of $15/hr would double the take home pay of fast food labor while raising prices one-third. Fast food has the largest by far labor usage (one-third of all costs).

Other businesses tend towards one-tenth of costs.  Think Target ("Can somebody help me?")

If fast food can pay $15/hr, most any business should be able to (sounds like).

$15/hr is now the median wage in the US labor market.  Give half the country (the half at or below the median) a raise to $15/hr and McDonald's should do wonderfully.
Roughly, 90-97 percentile earners have kept the same share of income the same earners had in 1968 -- double the average income since.  This suggests that the reason for so-called "inequality" (would the average non-academic recognize that phrase -- how about something like the "post-apocalyptic American labor market"?) is not a higher-tech economy making unskilled labor worth less.  Ball players, CEOs and news anchors are not the reason for economic growth.  Robots and programs are -- humans, I suspect, retain the same economic worth relative to each other.

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