Monday, November 9, 2015

Despair, American style ? -- ask Jimmy Hoffa :-)

Paul Krugman:  "At this point you probably expect me to offer a solution. But while universal health care, higher minimum wages, aid to education, and so on would do a lot to help Americans in trouble, I’m not sure whether they’re enough to cure existential despair."  

Unionized and (therefore shall we say) politicized: you are in control of your narrative -- win or lose. Can it get any more hopeful than that? And you will probably win.

Winning being defined as labor eeking out equally emotionally satisfying/dissatisfying market results -- equal that is with the satisfaction of ownership and the consumer. That's what happens when all three interface in the market -- labor interfacing indirectly through collective bargaining.

(Labor's monopoly neutralizes ownership's monopsony -- the consumers' willingness to pay providing the checks and balances on labor's monopoly.)

If you feel you've done well relative to the standards of your own economic era you will feel you've done well subjectively.

For instance, my generation of (American born) cab drivers earned about $750 for a 60 hour (grueling) work week up to the early 80s. With multiples strip-offs I won't detail here (will on request -- diff for diff cities) that has been reduced to about $500 a week I believe (at best I suspect!) and that is just not enough to get guys like me out there for that grueling work.

Let's take the minimum wage comparison from peak-to-peak instead of from trough-to-peak: $11 and hour in 1968 -- at half today's per capita income (economic output) -- to $7.25 today. How many American born workers are going to show up for $7.25 in the day of SUVs and "up-to-date kitchens" all around us. $8.75 was perfectly enticing for Americans working in 1956 ($8.75 thanks to the "Master of the Senate"). The recent raise to $10 is not good enough for Chicago's 100,000 gang members (out of my estimate 200,000 gang age minority males). Can hustle that much on the street w/o the subjective feeling of wage slavery.

Ditto middle class hiring results for two-tier supermarket contracts after Walmart undercut the unions.

Centralized bargaining is the gold standard: only thing that fends off Walmart type contract muscling. Done that way since 1966 with the Teamsters Union's National Master Freight Agreement; the long practiced law or custom from continental Europe to French Canada to Argentina to Indonesia.

It occurred to me this morning that if the quintessential example of centralized bargaining Germany has 25% or our population and produces 200% as many vehicles as we do, meaning Germans produces 8X as many vehicles per capita!

And thoroughly union organized Germans feel very much in control of the narrative of their lives.


Very rough figures: half a million Chicago employees may make less than $800 a week -- almost everybody should earn $800 ...

... putative minimum wage? -- might allow some slippage in high labor businesses like fast food restaurants; 33% labor costs! -- sort of like the Teamsters will allow exceptions when needed from the Nation Master Freight Agreement if you open up your books, they need your working business too, consumer ultimately sets limits.

Average raise of $200 a week -- $10,000 a year equals $5 billion shift in income -- out of a $170 billion Chicago GDP (1% of national) -- not too shabby to bring an end to gang wars and Despair American Style.

Merely make union busting a felony like every other form of unfair market muscling (even taking a movie in the movies). The body of laws are there -- the issues presumably settled -- the enforcement just needs "dentures."

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