Sunday, September 28, 2014

In 30 years 1% may take 50% of income -- check the math!

If the top 1% income continues to receive all the economic growth, then, by the time the output per person expands 50% (25-30 years?) the top 1% income will “earn” half of a half-larger economy (25% + 50% = 75% of 150%). By the time output per person doubles (typically 40-50 years) the equation will read 25% + 100% out of 200% = 62.5% of a twice-as-large economy.

Throw in Piketty’s projections — inherited rentier incomes swallowing up even more income share (like the England of old) -- and the bottom drops out for pretty much everyone.

There is a decades old, around the world tested answer. Ask Jimmy Hoffa as I always say — who spent 30 years, fighting (by fair means and admittedly sometimes foul) to spread the negotiation of one, single collectively bargained contract for all employees doing similar work with all employers — spreading outward from the jungle of Detroit’s Depression era labor market, finally to the whole country with the Teamsters 1964 National Master Freight Agreement (covering 400,000 truckers then, 50,000 now). Without so-called centralized bargaining every union these days is subjected to the race-to-the-bottom if employers can point to someone down the road paying less — more is needed than just organizing, as with card check. Ask poverty level wage supermarket employees since Walmart, etc., destroyed their middle class one-union-with-one-employer contracts.

Oddly enough to an American (me), legally mandated, centralized bargaining was instituted by the industrialists in post WWII Europe — something about fending off a labor union race to the top; thereby conserving more money for rebuilding. Today centralized bargaining can be found over the world from nearby French Canada to Argentina to Indonesia.

Which is to say that the most successful labor union (relatively speaking *) in this country and the most successful economies in the world have instituted the only labor setup I have ever heard of that results in a fair and balanced market. The way back for America must begin by everyone talking about that way back -- to everyone.

Campaign financing and lobbying equal to the 1%'s plus 99% of the vote would neatly fall into place.

A Pattern of Retreat: The Decline of Pattern Bargaining

PS.  Where the would the money come from to pay a $15 an hour federal minimum wage: the 55% of the workforce that takes 90% of income share would pay 3.5% higher prices -- shift approx. 3.5% income -- to the 45% who take only 10% share today.  Not going to lay off 45% of the workforce.  The economy grows that much every few years!  :-)  70 million X average $8,000 raise = $560 billion out of our $16,000 billion economy.

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