Monday, April 17, 2017

$700 billion Earned Income Tax Credit?! -- or organize labor :-)

Paul Krugman: " ... we can limit the human damage when they do happen. We can guarantee health care and adequate retirement income... We can provide aid to the newly unemployed. And we can act to keep the overall economy strong — which means doing things like investing in infrastructure and education, not cutting taxes on rich people and hoping the benefits trickle down."

We can rebuild union density so half the workforce isn't getting paid way less than they would be paid if we had say German union density.

If McDonald's can pay $15 an hour with 33% labor costs, Target pay pay $20 with 10-15% labor costs, Walmart can pay $25 an hour with 7% labor costs. At least that's the hope -- and labor being able to flex its bargaining muscles in the (truly) free market is the only way we are going to find out.

Labor unions are the only way to end punishing just-in-time work scheduling.

Labor unions are the only thing ever going to end endemic abuses like ...
big pharma gouging,
ever growing financialization,
etc., etc., etc.
by supplying the permanent political machinery to back up the average person.

 * * * * * * * * * *

If EITC could somehow be used to restore the 5% overall income share lost by the bottom 45% over a couple of generations -- that would come in at something like $700 billion a year, not today's $70 billion. Before we tear out hair figuring out how to distribute that -- it would obviously upend the whole (consumer) market-based direction of production.

I'm not nearly as interested in the min wage as I am in rebuilding labor union density. That would sort out production by the max the consumer will pay rather than the min labor will suffer with.

I'm guessing that, if what-I-call the "mid" 54% incomes pay 7% more of their incomes through higher consumer prices (that's 5% of overall income share) -- they in turn with their newly reconstituted labor union political power will be willing to just confiscatory-tax back that 5% income lost to higher consumer prices -- plus another 5% to re-capture the total 10% of overall income -- that the top 1% squeezed out of everybody over the last two generations.

Their moral question could be phrased as: do the mids (don't have ask the bottoms) want to keep the lower 45% in penury (may not be a choice if the 45% refuse to show up for work [strike]) or would they rather pro quarterbacks work for a million a year instead of ten million. When faced with questions like this I ask myself: what would Jimmy Hoffa do? :-)

Finally occurred to me that the bottom 45% will heartily encourage the mid 54% to lay on those confiscatory-taxes (e.g., 90% tax on all income over say $2 million?) -- so they can get at some of that money with even higher consumer prices! :-O

Friday, April 7, 2017

Could gang affiliaition qualify Chicago students to graduate, Mayor Emmanuel? ???

Chicago's Mayor Rham Emmanuel wants to require city high school students to submit a plan for future life backed by official documents (like college acceptance or promise for a job) -- or they cannot graduate! 

Given that 100,000 out of my guesstimate 200,000 Chicago minority, gang-age males are in street gangs -- because they wont commit to a long life of $10 an hour wage slavery in an economy where the same jobs could pay $20-$25 an hour -- but where there is no hope of wage betterment without a restoration of healthy union density that is nowhere in sight ...

 ... I'd like to ask the mayor if under present day dire labor market conditions, would street gang affiliation qualify?  :-O


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For those who like to do eighth-grade math:
The bottom 45% of earners now take 10% of overall income instead of 20% like in 1968 -- but -- that is half of twice as much overall income: leaving the bottom 45% right back where they started in absolute terms (on average of course: less at the bottom/more at the top).

The next 54% up take the same 70% of overall income as they did 50 years ago -- but-- that is of double the overall income, therefore they have twice what they started with in absolute terms (on average of course: less at the bottom/more at the top).

If collective bargaining on the part of the bottom 45% can raise prices enough on the next 54% up to recoup their lost 10% of overall share -- meaning 14% of the middle 54%'s share -- then the 54% will still end up with 172% of what they started with in 1968 in absolute terms.

To get that absolute 28% back from the top 1% ...

... who now take 20% of overall income instead of 10% like before -- which means they doubled their share of doubling per capita income ...

 ... the 54% will not be able to rely on raising the price of burgers.  More direct means will be necessary -- more likely the tax ax -- like the death tax to use one currently operating example.

When I was a kid in the 50s, the top federal income tax rate was (technically) 92% on incomes over one million dollars (today's money -- close enough I think).  The president of the United States was a five star general Republican who was not in too huge a hurry to do anything about American Apartheid.  IOW, should be nothing too alien (if that scares) about confiscatory taxes in today's culture.

In an ideal world we could tax 10% of income share back from the top 1%, first, and in turn use that pay higher consumer prices to restore the share of the lowest 45% -- painlessly.  But we really have to restore union density first to accomplish any of this.

CEOs and quarterbacks now take home 10X more than is needed to get them to show up and work productively.  When enough union density is built up tax axing this should not be a problem.  In the 60s the top paid NFLer Joe Namath made $600,000 in today's money.  Double that for doubled productivity (or what have you) and you still get only one-tenth of what Chicago Bears' Jay Cutler gets.

In an ideal world we could tax 10% of income share back from the top 1%, first, and in turn use that pay higher consumer prices to restore the share of the lowest 45% -- painlessly.  But we really have to restore union density first to accomplish any of this.

 * * * * * *

Not to mention other ways -- multiple efficiencies -- to get multiple-10%s back:
 + squeezing out financialization;
sniffing out things like for-profit edus (unions providing the personnel quantity necessary to keep up with society's many schemers;
snuffing out $100,000 Hep C treatments that cost $150 to make (unions supplying the necessary volume of lobbying and political financing;
 + less (mostly gone) poverty = mostly gone crime and its criminal justice expenses.

IOW, labor unions = a normal country.

PS.  I'm quite sure that the mayor's idea qualifies as a Fourth Amendment privacy violation: government insisting on knowing your personal plans (documented -- not just some high school essay) or suffer severe penalty.

Neither rust-belt Americans nor Chicago gang-bangers are ...

Neither rust-belt Americans nor Chicago gang-bangers are interested in up-to-date kitchens or two vans in the driveway.  Both are most especially not interested in $10 an hour jobs.

Both would be very, very especially interested in $20 an hour jobs.

80 years ago Congress forgot to put criminal enforcement in the NLRA(a).  Had union busting been a felony all along we would be like Germany today.  Maybe at some point our progressives might note that collective bargaining is the T-Rex in the room -- or the missing T-Rex.

The money is there for $20 jobs.  49 years -- and half the per capita income ago -- the fed min wage was $11.  Since then the bottom 45% went from 20% overall income share to 10% -- while the top 1% went from 10% to 20%.

How to get it -- how to get collective bargaining set up? States can make union busting a felony without worrying about so-called federal preemption:
 + a state law sanctioning wholesalers, for instance, using market power to block small retail establishments from combining their bargaining power could be the same one that makes union busting a felony -- overlap like min wage laws -- especially since on crim penalties the fed has left nothing to overlap since 1935
 + First Amendment right to collectively bargain cannot be forced by the fed down (the current) impassable road.  Double ditto for FedEx Express employees who have to hurdle the whole-nation-at-once certification election barrier

 + for contrast, examples of state infringement on federal preemption might be a state finding of union busting leading to a mandate for an election under the fed setup -- or any state certification setup for labor already covered by NLRA(a) or RLA(a).  (Okay for excluded farm workers.)

Collective bargaining would ameliorate much competition for jobs from immigrants because labor's price would be set by how much the consumer can be squeezed before (s)he goes somewhere else -- not by how little the most desperate worker will hire on for.  Your kid will be grabbed before somebody still mastering English.

Centralized bargaining (sector wide labor agreements) practiced by the Teamster's National Master Freight Agreement -- also by French Canada, continental Europe and I think Argentina and Indonesia -- blocks the Walmart-killing-supermarket-contracts race to the bottom.  Airline employees would kill for centralized too.

Republicans would have no place to hide -- rehabs US labor market -- all (truly) free market.

Truly populist up politics in the long run reduce financialization, for-profit scams, phara gouging, etc. etc., etc.  Dean of Washington press corps said when he came to Washington (1950s?) all the lobbyists were union.

PS. After I explained the American spinning wheels labor market to my late brother John (we were not even talking about race), he came back with: "Martin Luther King got his people on the up escalator just in time for it to start going down for everybody."