Wednesday, July 18, 2018

Markets over machinery / Labor civil war -- or regulated peace

“Successful labor cartels benefit their members. But their gains come at the expense of other workers and consumers.”  James Sherk

Higher union wages turn into consumer dollars next payday – forming a new equilibrium.  Consumers of unionized firms do end up consuming less; unionized employees do get to consume more: but the market sees only the same number of dollars coming at it – it knows not from what direction.
The only difference the market may perceive is different preferences where to spend those dollars: some firms may see less demand and drop employment slots; others see more demand and add slots.
Nothing about this takes a dollar from non-union wage earners.
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Know your markets before you know your machinery.  Two decades of looking at the dismal science has convinced me that learning your machinery before learning your markets is comparable to learning molecular biology and hoping you know how a bear works without looking inside.

For instance Mr. Sherk above will fill you ears with tears about labor union “monopolies” forcing unfair prices – OPEC like!  Knowing that lower 40% of households take only 10% of overall income while the rest take 90% tells you right away that the 40% are nowhere near sporting monopoly market power to cower everyone else.  :-O 

Ditto, even if (hopefully) the bottom 40% doubles their take from 10% to 20% by raising consumer prices (average firm labor cost 12%) through collective bargaining – they’d only be “muscling” their way into barely living wages.

No need to argue that union monopoly (one seller) offsets employer monopsony (one buyer).  No need even to state that consumers have millions of other choices and are always the ultimate arbiters (and limiters) of every labor/ownership contract – that it is always a three-sided deal with the ultimate consumer easily able to walk away from the other two (unless it’s the only restaurant in town).

No need; but nice to back yourself up with – once you know your labor market, first.
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A multi-point labor market may be harder to labor organize but it is more long term survivable.  Retail firms may open and close but employees can shoot back and forth between.  Once the big steel mill or town factory shuts down employees may hit a dead end.  Medicine is another multi-point labor market – it is everywhere and becoming ever more evenly spread as government financing spreads.

Imagine the happy labor market if every employee could join a union any time she wanted to – and said free labor/consumer market balanced equal-equal welfare transactions among all (no race-to-the-bottom for the labor side).

I used to think that making (already illegal) union busting a felony – even at state level – was the way back to a free labor market.  I didn’t imagine the management/labor civil war that could be unleashed cross country as criminal justice systems grappled with the decades emboldened (illegal) union busting genie resisting with all its bloated might being squished back into the law abiding bottle:

Instituting a brand new enforcement arm to cover 160 million employees trying to retake collective bargaining rights?
New enforcement branch office buildings?
New courthouses?!
New prisons to put away losing managements – if this works?
Legions of lawyers dragging every last (criminal) case down to its last appeal within appeals?
Management with a million and one excuses for “easing out” organizers?
Billions of billionaire backing emboldening every last line of defense?
RICO prosecutions (plural) to begin when management excuses start to pile up and overlap – after the necessary years to qualify as a pattern?

Elliot Ness had it easy with Al Capone compared with corralling millions of “legit” business owners back into (lawful) collective bargaining ways with 160 million solidarity deprived employees.    

Imagine the happy labor market if:
Why Not Hold Union Representation Elections on a Regular Schedule?
Andrew Strom — November 1st, 2017
"Republicans in Congress have already proposed a bill [Repub amend] that would require a new election in each unionized bargaining unit whenever, through turnover, expansion, or merger, a unit experiences at least 50 percent turnover.  While no union would be happy about expending limited resources on regular retention elections, I think it would be hard to turn down a trade that would allow the 93% of workers who are unrepresented to have a chance to opt for unionization on a regular schedule."

Wheels within wheels of justice: the Democratic market-make-over amendment to the NLRA would corral a lot of blue collar voters (former Obama voters, remember?) back into the Democratic win column – so we could pass said amendment in the first place.