[UNDER DE-STRUCTION?]

[UNDER DE-STRUCTION:  See "Labor Unions Trump Luddites" above:  http://ontodayspage.blogspot.com/2015/05/working-on-angles-to-make-criminalizing.html ]

There are two RICO prosecutable sides to firing employees for attempting to organize labor.  The side everybody naturally thinks of is the extortionate side – the pain of unemployment.  The side everybody seems to miss is the illegal blocking of participation in the legally prescribed process of assembling a collective bargaining unit – solely for the sake of depriving employees of monies they could win from the employer in true free market negotiating.

Think almost perfect parallel with prolifers sued under RICO for blocking clinics – except that prolifers slipped off the RICO hook because they were not seeking to squeeze clinics for financial gain.
 
Let’s make up a situation which is all blocking -- no firing; no extortion.  Imagine that the federal organizing formula required online application (Obamacare style) and that for some reason the computers needed to be on the work site – and that the employer permanently barred employees from computer access.  If this is RICO/Hobbs prosecutable, then, firing is too.

Firing employees means they no longer have anything to organize -- inherently severs them from the legal prescribed process. 

Deprivation of economic participation for attempting to organize – not to reduce staff or for poor performance -- ought to be RICO/Hobbs prosecutable all by itself.  But the offense has been practiced without prosecution so much for so long (the free market?) that it may be hard for the courts to ever get their heads around the extortionate side of it.

Unions do not have to wait for prosecutors to catch on – should be able to seek injunctions against blocking of the federally prescribed organizing process – or sue after the fact.  Get cases going; watch the perps run for the hills while the cases run their courses (not sure what their liability will be) – we can organize the country out from under them before the rulings come down.

Alternate route: states can make blocking of and/or extortion against union organizing activity a felony punishable by one year – that would meet a requirement for RICO prosecution.  If pro union legislators everywhere attempt to pass such legislation every year – whether successful or not – I can think of no better ed-u-cational process about the criminality of habitually depriving most Americans of their economic and political wherewithal that Americans have gotten so used to tolerating (except maybe if our ed-u-cator-in-chief decides to make it his or her number one topic).

SS Trust Fund foie gras?

When FICA income no longer covers SS retirement outgo we will do one of three things: raise the FICA rate, raise the FICA cap or raise the income tax (or expand the deficit) to cash the Trust Fund bonds.

When the TF bonds run out (should keep one year of full replacement, not shortfall coverage -- the statutory definition of solvency) we can easily make a rule that income tax will from then on will cover the FICA shortfall -- easily because that's what we would have been doing for a couple of decades prior.

Politically, cashing the TF bonds may be the most doubtful outcome because that would in effect reverse the cap: the bottom 50% would pay nothing, the top 10% would take the biggest hit.  Most doubtful under today's 1% rule politics anyway.  Which doubtfulness makes today's Trust Fund stuffing remind me of foie gras.  :-)

Dem party seems at best to want to hang on to the paltry past

Dem party seems at best to want to hang on to the paltry past:
Obamacare that leaves tens of millions out -- too expensive for too many;
General support for some kind of minimum wage hike (min now several dollars below 1968 -- double per capita income later!)
Hang on to SS, Medicare, Medicaid;
Hang on to Dodd-Frank;
Nothing to do about the defining economic -- and political -- pathology of de-unionization.

Nothing to wake voters out of their deep sleep and rouse them to the polls.

How about selling:
$15 an hour min wage (45% of workforce gets raise -- only 3.5% shift of GDP);
Push some version of single-payer -- or perhaps just the intention to work out or at least work on some version of single-payer like Obama worked on Ocare (squeezed most out of political lemon: told industries they are either at the table or the meal; promised more business to pay for lower costs);
Face up to core task of re-unionization in concrete way -- how about sicking RICO on union busters: arguable; and while the arguments go on in court, hopefully, the busters will run for the hills, not wanting to pile up anymore liabilities while waiting for rulings to come down, while we organize the country out from under them, too late for them whatever the rulings. Just one idea. Where are the others? Must do in any case: centralized bargaining (one labor contract with different similar firms) the only way to end the race-to-the-bottom, unionized or not.

Need a (non-paltry) party that can actually get our lives back.

Union contracts steer employees and consumers (not employers) towards mutual comfort(/discomfort) zone

 
Imagine a simple market where cloth weavers sell their wares to clothing sewers — many individual sellers, many individual buyers. Prices set at the mutually comfortable level — as in a level at which seller and buyer are equally happy/unhappy. At what other possible level?. Came the steam looms. …

… But wait. I heard a lecture today (by a Hathaway vice-pres yet) which described how investors in steam looms expected to recoup their money in three years and reap the bounty of mechanization for seventeen more. Only to discover of course that the bounty would be reaped instead by consumers — as competition drove prices down. …

… Back to the post-steam loom — separate employees from bargaining directly with the ultimate consumer — labor market. It’s almost too simple to describe. Steam loom operators did not — could not — set the price of their labor at the mutual comfort level with the ultimate consumers — who benefited from the price competition noted above and could surely have afforded to pay a few extra bob. Labor’s price was set instead at bare subsistence level — take it or leave it; we can hire the next starving sod who comes along (not very comfortable). Leaving loom operators families living on oat cakes three times a day because they could not afford wheat bread (forget about meat from my readings).

Unions in centralized bargaining labor markets tend to set labor’s price back at mutual comfort level with the ultimate consumers. There should be plenty of comfort to go around.

"Virtual co-ops" [see post below] can clear the American labor market -- and Chicago's drop-dead ghettos

Under "virtual co-ops" [see post below] the market will clear at a higher price for labor then under what I call our current "two-tier" labor market (unorganized) where labor's price is set relative to other labor instead of consumer preference (bring back the steam looms!).

Actually today's American labor market is NOT clearing because the price of labor is too low to clear: e.g., 100,000 out of (I estimate) 200,000 Chicago gang-age males are in street gangs because the minimum wage (to cite one thing) is $3.50 below LBJ's 1968 $10.75 DOUBLE THE PER CAPITA INCOME LATER!
http://www.cbsnews.com/news/gang-wars-at-the-root-of-chicagos-high-murder-rate/

The proportion out of the labor market may be worse. Somebody pointed me to a Forbes article stating half of Ferguson's young African-American males are missing from the census.

"While the problem of missing African American men is especially severe in Ferguson, young black men are absent from most U.S. cities. In the neighboring cities of East St. Louis, IL and St. Louis, about 38% and 24% of African American men age 25 to 34 are absent from their communities, respectively. On average, about 18 percent of young African American men are absent from large cities. (This calculation is based on the combined population of 33 cities with the largest African American populations, home to about one quarter of African Americans in the U.S.) In contrast, outside of large cities only about 4% of young black men are absent from their communities. The challenges posed by an absence of black men in Ferguson are problems faced primarily by larger cities."
http://www.forbes.com/sites/modeledbehavior/2015/03/18/half-of-fergusons-young-african-american-men-are-missing/

Actually, there may be a ray of hope in this for the long run solution to Chicago's seemingly permanent drop-dead ghettos. Fix the American labor market as a whole and the men and women who live there may be very flexible about commuting or even emigrating to where the jobs are. Then, they can bring demand back into the neighborhood -- or send money back like foreign immigrants! Gradually, economically healthy neighborhoods can emerge.

A NATION of VIRTUAL co-ops

Sure as the pricking of my thumbs something unraveling inequality this way comes. 

Apply RICO and the Hobbs Act to the practice and (in the case of consultants) profession of union-busting -- firing workers who try to carry out the federally prescribed steps to establish collective bargaining with their employer -- and when the prosecutions begin all the busters may head for the hills waiting (how ever many years it takes) for the cases to reach a conclusion in the higher courts. 

Meantime we can unionize the country right out from under them -- be too late to do anything about no matter how the rulings come down (could work).

Be nice if every firm were a co-operative -- where labor squeezed the consumer as hard as ownership? Combine ACROSS THE BOARD UNIONIZATION -- with -- CENTRALIZED BARGAINING (all similar jobs under one contract with different employers) and you have the equivalent of A NATION OF CO-OPS. 

Ask Germany; ask Denmark. Remember, unions are the average persons only political counterweight -- which should make right-to-work legislation allowing free riding employees a serious (devastating) First Amendment infringement on the mass of employees.

Big Pharma more market distorting than John D Rockerfeller?

We have to start looking at these drug monopolies as if they were John D. Rockefeller land. They may be temporary monopolies but when 5 million Hep C patients can use a new drug that costs $84,000 a treatment that adds up to $400 billion+ for one treatment of one ailment.

Steven Brill reports the government paid for the initial research on the med but when the researchers smelled money they switched to private funding. Brill says 1/10 the price would be reasonable. The endocrinologist at the heart of the research made $440 million for himself.

If you can go to India and stay 12 weeks you can do the same course of treatment for $1,000 (maybe you can sneak the pills back; don't know if that'd be legal -- why not?). Wouldn't it make the point if Medicare did something outlandish (I wont say crazy) like approving payment for the Indian trip to save tens of thousands of dollars (I've seen an estimate of $54,000)?

Planting progressive feet on labor market terra-firma

The big thing -- and it is a very big thing -- that progressive economists (I could understand if it were CATO) perpetually leave out of minimum wage/employment discussions is any acknowledgement of the tradeoff between the proportion of the wage gain and the proportion of the possible job losses.  Simply, if we double the min wage and some of the jobs are automated out (in Australia the customer may operate her own order on the key pad) the workers are way (way!) ahead.  This should be at the center of every discussion or we are leaving out what could be -- literally -- the most important factor.

Another huge factor -- which I don't expect individual store owners to grok (they might)-- but which should be the alpha and omega of progressive economists' thinking, is how the income shift of, say, 45% of employees getting an $8,000 average raise ($15 min) will affect the demand at the businesses those employees work in (and don't forget the businesses/employees whose wages get pushed up as a secondary result).

Toughest case: fast-food?  Doubt it.  The 25% increase in prices (33% labor costs) may not even be noticed by the 65% of customers coming through Ronald's drive-thrus if they don't listen hard before they pop the plastic -- what are they going to do, bring peanut butter sandwiches?  When Illinois raised its min wage pretty quickly from $5.15 to $8, I and retired teacher who were regulars in the Ronald's across the street from me noticed a pickup in what we might call the third-world end of the business, mostly Mexican.  Now the new owners across the street have just raised prices on many items 20-25% seemly because they think they can get away with it -- didn't seem to worry them.

The 35% coming through the doors will have more money to spend -- which wont cost the consumers of businesses they work in very much -- SORT OF A "MAKE-BELIEVE" MULTIPLIER.  Un-toughest example: Walmart.  $15 min wage raises Walmart prices 4% (7% labor costs).  Wonder how many jobs lost at Walmart -- unless their newly flush low income buyers decide to move upscale -- Walmart can always move their merch upscale.

When people argue whether the economics profession knows what it is doing on macro-micro theory -- way above my (NY-Chi-SF cab driver) pay grade.  But when economists perpetually leave out the most important labor market factors (to people actually in the labor market!) I wish they would plant their feet more solidly on terra firma.

HOW TO CLOSE PHONEY ONLINE UNIVERSITIES

JUST HAD AN IDEA THAT MIGHT LIMIT THE DAMAGE OF THESE PHONEY ONLINE COLLEGES (pardon shouting, but I think it's justified):

Only allow government guaranteed loans (and the accompanying you-can-never-get-out-of-paying) IF a built for that purpose government agency APPROVES said loan.

The threshold step should be to allow bankruptcies.  This is not costless and clearly limits "moral hazard."  Think of it as amnesty -- we  goofed and went in the wrong direction (in more ways than one -- don't forget exponentially rising tuition, and for profit pirates) -- time to reverse what's looking more and more like irreparable harm to the newest generation.  

Junking states: Republican style

Insofar as Right-to-Work legislation under-prices a state’s labor – extracts less than consumers would be willing to pay – it draws down the income a state receives from the 49 other states, either from exports to or visitors from.

I understand there’s a lot of chicken/or egg-six/half-dozen in economics – but before legislators agree to Right-to-Work legislation, I think this concept would be a good place to start.  If you build what they want, they will come and buy.
 * * * * *
Another conundrum: states will abate billions in tax giveaways in the hope of drawing thousands of jobs – but the very same states refuse billions in Medicaid giveaways (er, actually returning their own tax dollars) from the federal government which would fund tens of thousands of high quality medical jobs – not to mention bringing unquestionably needed health care.
 * * * * * *
Illinois governor Rauner wants to squish the incomes of the bottom 50% of employees (keep the minimum wage low; wage war on unions public and private) who take 10-12% of overall income share – to make the state more competitive (with where: Bangladesh?).  Poorer people get less education, become a lot less competitive, more educated people want to emigrate out of such an unproductive milieu.

Wisconsin governor Walker wants to cut straight to the chase on cutting education: $300 million off the state university.

Both Republican governors want to turn their big industrial states into South Carolina.

Medicine: the un-exportable, rust-proof industry of the future?

Why do economists never look at the medical industry as the growth industry of the future -- the un-exportable growth industry?

When it comes to products that come in shiny packages we want growth, growth, growth.  But, when it comes to not being sick there isn't the same natural intuition.  Last week I read of a doctor saying medical knowledge doubles every two  years.

Here's an article from yesterday: Alzheimer's 'breakthrough:' noninvasive ultrasound technique restores memory in mice

This readable online professional mag has several new such articles daily: http://www.medicalnewstoday.com/ 

Of course most economists are still working age and therefore young enough not to think of the volume of medical care.  I took my mom to the cardiologist yesterday -- I'm seeing my PCP this afternoon.  Which brings up another growth prospect: as medicine keeps patients alive longer it creates an ever larger consumer base for itself (take that John D. Rockefeller).  Medical jobs pay better than average too -- the new (unexportable, rust-belt proof) factory.

Okay, okay; American (that is American, not medical science-an which latter is universal) cost twice as much as it should.  I read Brill.  I would not worry about what (most) doctors make; their pre-tax is only 10% of overall costs (dental folks seem to have doubled their prices in real terms over the last 20 years w/o justification -- probably watching medicine double and figured nobody would notice if they did too).  If Germany wants to pay pilots more than surgeons then Germany has a problem.

Once we get drug and medical device and insurance bureaucracies costs under control then we can welcome growth in the real new high-tech economy. 

BTW; nothing like this will ever take place without a German/Danish style labor union take over.  May be just around the corner.  Once RICO and Hobbs cases begin (if they ever begin) against union busting, all the union busters will cease and desist until they see the outcome of these cases.  In the time it will take for these cases to go through the courts we can have the whole country organized.
http://ontodayspage.blogspot.com/2014/12/collective-bargaining-constitutionally.html


[Late  note: looking at health care as a (rust-proof, non-off-shorable, non-polluting, even robot-resistant) growth industry, no state or locality has any advantage over any other.  That in turn has the potential to build broad based support for government based payment which would insure equal employment opportunity in every state (think bomber built in 50 states).]

USING RICO-HOBBS TO BUST UNION BUSTERS NEVER GET PAST THE USSC? -- think many times again

We have a lot of in between courts -- think trial courts in 50 states; think West Coast liberal appeal courts.

They tried to use RICO on prolife demonstrators. Prolife only got away because they did not seek any economic gain. One of the USSC dissenters (Stevens?) argued that prolife took the power to operate their business from the clinics and gained it for themselves. This may be a very stretchable drum skin -- very straight forward criminal law that can't easily be ducked -- even if nobody thought to do it up to now; everyone trasfixed on the ONE-DIMENSIONAL legality of firing a non-contract worker.

Even if it all dies at USSC the flurry of cases across country must change the CULTURE -- waking sleeping Americans to the UNDEMOCRATIC REALITY they have descended into economically AND politically via creeping de-unionization; to their current desperately helpless condition.

BTW; While I'm not looking forward to locking up half the business owners in the country or all the union busting consultants; once the first guiltys come down the consultants will run for the hills as the fines come down -- wont want to chance it until it settles out. Businesses the same. Matter of fact, once the first cases go to court -- probably one word gets around that cases MIGHT go to court -- the same should run for the hills til they see what happens.

Meantime labor may be able to organize with impunity so that by the time the cases make USSC it's too late: we're all organized! :-O
* * * * * *
Teamsters Union motto: "Greed is good (for us too).

Teamsters' song (hope Mad Magazine's copyright, circa 1960, has run out):
Over hill, over dale, we will hit the union trail;
As the Teamsters go rolling along;
And it's high, high, hey when we want a raise in pay;
we shout out our grievance loud and strong!

Short-hand explanation for $50K minimum needs (poverty) line for a family of three

My short-hand, shore up of $50K minimum needs (poverty) line for a family of three -- detailed in chart 3-2, on p.44 of the MS Foundation book Raise the Floor.   
(You may want an inflation calculator -- I possess the 2001 book: http://data.bls.gov/cgi-bin/cpicalc.pl)

My quick look:
$11,000 Obamacare for a family of four (not three), $498 a month (after $541 subsidy) + $4900 deductible (from Brill, p. 346, close enough);
$4,000 payroll taxes (not even counting all those regressive taxes that we take for granted in consumer prices);
$15,000 rent and utilities for any place decent;
leaving a big $400 a week to feed, cloth, transport (entertain?; MS does not allow a cent for entertainment) four people.  I would call that minimum needs. 

Meanwhile the median income is $26,000. 

3.5% shift in income would pay for a $15 minimum wage (half the workforce is seriously treading water between $300 a week (assuming min wagers get 40 hours; most may not) and $500.  If the 16% of income that shifted to the top 1% after the mid-seventies had instead shifted to the bottom 90% (the top 10% mostly held on to their income share until recent years) the latter would be swimming in money (and FICA collections would be going through the roof -- would stop diverting funds to over bloated TF at some point).

Gov. Rauner would raise the min wage 50 cents over 7 years (adjusted for expected inflation)

Governor Bruce Rauner wants to raise the minimum wage from $8.25 to $8.75 – if adjusted for expected inflation -- over seven years.

The fed inflation target is 2% – compounded over 7 years that comes to 15%.  Which would chop 13% off the $10 (100% inflation cuts buying power 50%).  Round off to $8.75.

This amounts to about a 6% increase in real buying power after 7 years – about half the expected rate of average income growth in the US –for people who work two jobs for the pay of one now.

1956’s per capita income was about 40% of 2015’s – back when the US Senate Majority Leader took advantage of a few opponents missing from his chamber to quick on the sneak, slip through an $8.75 federal minimum wage (in today’s dollars).  In 1956.  
 
12 years later, that same leader, now president of US, steamrollered a $10.75 minimum wage through Congress – in step with 23% increase in per capita income over the same span.  We knew LBJ, and Rauner’s no LBJ.
 * * * * * * * * *
E.I.T.C., $55 billion out of a $16,000 billion economy – 1/3 of 1% of GDP – is too small to have a measurable effect on poverty; lost in the noise.
 
$15 is the 45 percentile US wage -- $26,000 is the median income (must have lost some hours in there somewhere).  Table 2-3 on p. 44 of the Ms Foundation Book Raise the Floor calculates the minimum needs of a family of three that has to pay its own health insurance at $1,000 a week.  (Quack fed poverty line is based on three X price of an emergency diet, dried beans, no expensive canned!).
 * * * * * * * * * *
The Governor wants a low minimum wage to keep Illinois competitive – with whom?  Basket weaving factories in Estonia?  Illinois ranks sixth best out of fifty-one states and D.C. on high income and low local prices.   
http://wallstcheatsheet.com/personal-finance/10-states-where-salaries-are-too-low.html/?a=viewall