Thursday, April 18, 2019

If you have four flats -- meaning the NLRA -- you need a new set of tires

Scenario:  Bottom 40% earners double wages (on average) through collective bargaining (some 50% more, most 100%, some 150%).  Bottom 40% labor averages 15% of production costs.  Doubling wages adds 15% to consumer prices – which bites off 15% of sales – before we factor in new sales from the newly flush 40%.

Common sense dictates that bottom 40ers spend proportionately more of their income buying bottom 40er made products – and (what I call) the mid 59% spend proportionately less on 40er prods.  Let’s make that spread 20/10%.  (We won’t concern ourselves with the top 1% here.)

85% of previous sales retained.  Extra 10% sales from the doubled half of wages (with 15% fewer jobs) adds 8.5%.  Sales retained = 93.5%.  (Sales actually cascade up a bit from there as added jobs add jobs – but just a bit of eighth-grade math mind candy.)

To make sure we are not picking a sweet spot scenario:
 -- 10% sales lost to higher prices – 20/10% spending spread – 90% + 9% = 99% sales retained.
 -- 15% sales lost to higher prices – 40/20% spending spread – 85% + 17% = 102% sales retained.
 -- 10% sales lost to higher prices – 40/20% spending spread – 90% + 18% = 108% sales retained.  (Thinking Card and Krueger anyone?)

Most of American labor can no longer reach their sweet spots.  The bottom 40% is never going to reach them by being interchangeable workers in interchangeable jobs. 
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There’s all ways to do things. 

In Mexico -- you cannot hire scabs: "when a union officially declares a strike, ‘a workplace cannot be opened.’"  (last item)

Interesting article on the ways Japanese labor law differentiates between employees and independent contractors – more by income level.

In continental Europe, French Canada, Argentina and Indonesia, everybody doing the same kind of work in the same geographic locale may work under a single (sector wide) labor contract – union and non union employees together – thwarting the race-to-the-bottom before it starts.
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The only sure way to restore American labor union density to a healthy level – up from today's pathologically depressed 7% in private (non-gov) employment:
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] 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."

When you have a flat tire, you fix it; when you have four flats you need a new set of tires.  Forty-plus years of busting American unions under the unwatchful eye of the National Labor Relations Act demands a radically new return path to collective bargaining: skip organizing in private workplaces altogether; go straight to regularly scheduled union certification elections.  Nothing less looks plausibly workable.  Ask the 40%.