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.

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

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

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."

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.

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