Thursday, November 12, 2015

High union density = balanced satisfaction for labor, owner and consumer -- almost by definition

Labor is almost by definition able to reach a subjectively satisfactory wage level by collectively bargaining with ownership and of course with the ultimate arbiter of price, the consumer. Almost by definition because all three gravitate to similar satisfactory/unsatisfactory human emotional results – not ideal by their lights, but similar enough to other participants’.

High union density was how the “Great Compression” ran this kind of relative satisfaction regime sort of on autopilot in the late 40s, the 50s and 60s in the US (if you were white).

Relative satisfaction regime almost by definition disappears when the labor market reverts to what I call subsistence-plus wages, in which labor is paid subsistence plus whatever extra it just barely takes to procure additional increments of skill and/or effort from it – instead of paid the max the consumer is willing to up.

One (partially made up) example of relative expectations: in the 50s, $500 a week would have kept American born cab drivers satisfied for their grueling 60 hour work week – and on the job. By the late 70s, early 80s the needed incentive had become $750 (I can attest).

Minimum wage example (why don’t we see peak to peak comparisons instead of trough to peak?): in 1968, $11 an hour was satisfactory at half today’s per capita income. The US wasn’t yet flooded with SUVs, up-to-date kitchens and $4000 a month two-bed room apartments for the top 10% (what’s an up-to-date kitchen?). See many American born fast food workers lately (as in decades)?

Today, 100,000 out of my guesstimate 200,000 Chicago, gang-age males are in drug dealing street gangs. Getting the minimum wage up to $15 and the median wage (via collective bargaining) up to $20 – would in total add something like an average $10,000 a year to 500,000 Chicago low wages (by extremely rough guesstimate, but puts the multipliers in place), adding all of $5 billion to the cost of Chicago’s $170 billion (figuring 1% of national) economic output.

Clean up Chicago street gangs by making an offense that is not even a ticket now into a big felony (persistent abuses triggering RICO prosecutions) …

… by making union busting a felony (like every other form of market gouging) and allow, by then (at last!), unfettered-labor to do its best in the truly unfettered market. If nothing else it should be a question of freedom – people should simply be free to collectively bargain with their employer (and inherently with the consumer) if they please – that’s a form of economic satisfaction in itself.

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