Sunday, February 17, 2019

See US Labor market from bottom up -- a syllogism in four parts


If America’s highest labor costs firms (low pay type – not medical) could afford to fork over $15/hr wages (practical example: fast food with 25% labor costs -- $15/hr minimum wage would pump prices about 10% in Chicago where I live – but gotta eat)
 -- and --
if no more than 10% of US labor force works for such highest labor costs businesses (I’d hazard a guess, substantially fewer)
-- and --
if 40% of US workers presently earn less than $15/hr (most, substantially less)
-- then --
at least 30% of our workforce (for sure, substantially more) are receiving punishingly lower wages than consumers would willingly support, were employees able to (collectively) withhold their labor for a better price.
http://fortune.com/2015/04/13/who-makes-15-per-hour/

Remedies for long (illegally) lost bargaining power?

EITC: Shifts 2% of overall income ($70 billion out of $13 trillion) while 40% or our workforce earns 11% of overall income ($1.4 trillion).

Minimum wage(s): If Americans of 1968 could have been foretold that the 2019 fed min wage would be shorter by $5/hr ($12/hr then), what catastrophe could they have conjured up that could lay such waste to future incomes (doubling per capita expected over 50 years, since the industrial revolution): a comet strike, a limited nuclear exchange, multiple world plagues?!   :-O
https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=1.60&year1=196802&year2=201901

(Relatively) strong labor state, Illinois, just raised min wage to $15/hr by 2025.  AP report projects inflation to reduce to $13/hr. 
https://apnews.com/669381ab258541f38439b7a21641b762


Restoring (ever diminishing) labor union density (under 7% private now): One stop shopping: 
Why Not Hold Union Representation Elections on a Regular Schedule?  Andrew Strom — November 1st, 2017

"Republicans in Congress have already proposed a bill that would require a new election in each [private employer] 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." 
https://onlabor.org/why-not-hold-union-representation-elections-on-a-regular-schedule/

It only dawned on me while writing this, why Strom’s eminently sensible union certifying proposal – politically perfect, too, for repatriating prodigal blue collar Dems – failed to gain any traction.  Progressives have been looking at this whole inequality thing from the middle class, down – from top, down – where lost collective bargaining power appears but one component in a complex narrative.  Looking from bottom up, the story couldn’t look plainer and simpler, from McDonald’s (25% labor costs) to Target (15%) to Walmart (7%): zero haggling power.

40% -- 50%, 60%, 70% (?) – of our workforce unconscionably underpaid; that’s a helluva bottom.

Tuesday, February 5, 2019

Why the minimum wage must always be too minimal


It came to me, while eating at McDonald's, that the minimum wage can never be pushed higher than highest labor costs businesses can pay -- like McDonald's.  Meaning the minimum wage can never squeeze out all the pay that lower labor costs businesses can possibly pay -- like Walgreen's, Target or especially Walmart.  Like almost everywhere else.

McDonald's has 25% labor costs;
Walgreen's and Target have 15% labor costs;
Walmart has only 7% labor costs.

If Ronald can pay $15 an hour, then;
big retail stores could pay $20 an hour;
and super efficient Walmart should be able to pay $25 an hour.

Unions are the only way back and here is the only way back to unions that I've ever heard of:
Why Not Hold Union Representation Elections on a Regular Schedule?
Andrew Strom — November 1st, 2017
“Republicans in Congress have already proposed a bill that would require a new election in each [private employer] 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.”
https://onlabor.org/why-not-hold-union-representation-elections-on-a-regular-schedule/