Maybe we Americans should be less concerned about “job creators” and more concerned about “asset creators”—the workers whose toil and skill creates wealth, rather than owners of that wealth who supposedly enable workers to work (or not).
Archive for the ‘Labor’ Category
During the past 40 years, the productivity of American workers has continued to increase but their wages (adjusted for inflation) have barely increased at all.
Labor lawyer Thomas Geoghegan, in his new book, Only One Thing Can Save Us, says this is because corporate America has decided that it doesn’t want highly-skilled, well-paid workers; it wants low-paid, replaceable workers.
Many evils flow from this. Working people and the middle class have take on more debt in order to buy homes, pay for higher education or maintain their material standard of living.
Bankers and financiers find it more profitable to invest in debt than in the production of goods and services.
This results in the financialization and hollowing-out of the U.S. economy.
Geoghegan thinks the one thing that can save us is a labor union movement strong enough to win wage increases sufficient to keep up with the increase in the production of wealth.
This will give working people and the middle class enough buying power to generate a real economic recovery.
It will enable them to pay down debt. Shrinking the debt industry will free up money to be invested in producing real goods and services.
Labor union contracts will make it harder to lay people off at will. This will give employers an incentive to invest in training to make their workers more productive, which union apprenticeship programs can help with.
With more Americans earning good incomes, tax revenues will increase and governmental budgets will be more in balance. With fewer jobs being shipped overseas, the U.S. trade deficit may shrink.
A politically powerful union movement will bring American politics into balance. The USA will have both a left wing and a right wing rather than, as at present, only a right wing.
He advocates reforms to strengthen labor unions, including:
1. Making union membership a civil right.
2. Allowing members-only unions without NLRB elections.
I was a member of Local 17 of the Newspaper Guild in Rochester for 24 years, and I’m still a strong supporter of the labor union movement.
Labor unions have their faults, just as churches, political parties and other institutions do, because they’re merely structures in which people can operate, for good or ill.
But they’re the only structure created for the specific purpose of defending the rights and interests of working people. Without a strong and independent labor movement, there’s little to stand between individual working people and the structures of corporate and governmental power.
Even a weak labor union, if truly independent, is better than none. Local 17’s contracts with Gannett Newspapers were highly favorable to the company, but the fact that there was a contract meant that the company could not operate arbitrarily. Even if the company wrote the rules, it had to follow these rules.
Another thing that helped us was the strength of the International Typographers Unions and other printing trades unions, until they were wiped out by new technologies that didn’t require their skills. Their high wages and good benefits set a benchmark that benefited all other employees in the building.
A lot of people used to take the gains won by labor unions for granted. They thought that the eight-hour day, overtime pay, paid vacations, sick pay and medical insurance were something that employers granted out of the goodness of their hearts. Now that all these things are under attack, I think some of these people are reconsidering.
Most Americans in labor unions are better off than Americans not in labor unions. I hear non-union workers ask why the union members should have benefits that they lack. I think they should ask themselves why they themselves shouldn’t have these benefits.
Here are some articles about American labor and labor unions that I read recently and recommend. If you have the time and interest, they might make for good reading over our Labor Day weekend.
Here are some links to article I found interesting, and perhaps you will, too.
How Close Was Donald Trump to the Mob? by David Marcus for The Federalist.
Maybe there are innocent explanations tof Donald Trump’s business connections with known Mafia bosses in New York City and Atlantic City. If such exist, we the voting public deserve to hear them.
Katrina Washed Away New Orleans Black Middle Class by Ben Casselman for FiveThirtyEight.
Black homeowners and business owners lost the most in Hurricane Katrina. Black professionals such as physicians and lawyers have moved on. And black school teachers are losing their jobs to supposed school “reform.”
Hat tip for the following to Bill Harvey—
The Myth of the Middle Class: Have Most Americans Always Been Poor? by Alan Nasser for Counterpunch.
The United States was the first country in which a majority of the people were taught to think of themselves as middle class. In Victorian English novels, the middle class are the doctors, lawyers and other professionals who aren’t working class, but not truly upper class.
One big mistake that white people, especially white liberals like me, make is to anoint some particular group of African-Americans as representatives of all black people.
In the case of people like me, it is naivety and jumping to conclusions. In other cases, it can be cynicism, a way to divide and rule.
When representatives of #BlackLivesMatter seize a podium, spectators not only have no way of knowing how many black people they represent, they have no way of knowing how many supporters of #BlackLivesMatter they represent, because #BlackLivesMatter is a movement and a Twitter account, not an organization.
I don’t know how representative the guy in the video is, either.
I presume that many or most black people are up in arms about the many times unarmed black people are killed by police. I presume that many are concerned about Social Security, minimum wage and other issues. The fact that one group concentrates on one of these issues doesn’t mean the others are unimportant. There ought to be room for different groups, different priorities and different approaches.
Black Lives Matter and The Failure to Build a New Movement by Douglas Williams for South Lawn.
A Short Follow-Up to the Previous Post on Black Lives Matter by Douglas Williams for South Lawn.
What No One Is Saying About the Killings of Blacks in America by Benjamin A. Dixon.
Dear #BlackLivesMatter: We Don’t Need Black Leadership by R.L. Stephens II for Orchestrated Pulse.
A Future for Workers: A Contribution From Black Labor, executive summary of a report by the Black Labor Collaborative. (Hat tip to Bill Harvey)
Ronald Reagan’s attacks on the minimum wage, families being helped by welfare, those receiving unemployment insurance when the economy failed, became racialized attacks, and not viewed as attacks on the foundation of worker survival.
So in the 1980s, the real value of minimum wage drifted to unprecedented lows, states rolled back eligibility to, and benefit levels for, unemployment insurance and the foundation was laid to attack women who needed help in raising their children to force them into low-wage work.
Without providing any gains to American workers, Reagan mastered the appearance of worker advancement by succeeding not by having wages rise with productivity, as had been the case, but by having wages rise relative to the poor who could not find jobs, or could only find minimum wage jobs.
The silence of the labor movement in the sinking fortunes of the poor meant there was political space, for the first time since the 1930s, to have the economy improve and expand while the poverty rate increased.
==From A Future for Workers: A Contribution From Black Labor. (Hat tip to Bill Harvey)
Seven Myths about the Greek Debt Crisis by Stergios Skaperdas, a University of California economics professor. (Hat tip to naked capitalism).
An economist argues that (1) default would not be the worst outcome for Greece, (2) the troika (European Central Bank, International Monetary Fund, European Commission) is not trying to rescue Greece, (3) Greece’s problems are not caused by corruption and bad policy, (4) no Greek government could have carried out the troika’s policies, (5) the troika’s policies would not have benefited Greece, (6) exiting the Eurozone would not be catastrophic for Greece and (7) the Greek government in fact does have bargaining power.
Hillary Clinton Doesn’t Care That Much About Abortion Rights by Ted Rall for Counterpunch.
Instead of trying to persuade judges that abortion is a constitutional right, why don’t Hillary Clinton and other liberal Democrats support legislation to guarantee abortion rights? Ted Rall thinks Democrats hold back because they cynically want to keep abortion alive as a issue. But maybe they’re just timid.
The creator of the Dilbert cartoons thinks most people probably would buy a used car from Donald Trump because his campaign demonstrates mastery of the classic techniques of salesmanship.
The Artful Puppet Master by Doug Muder for The Weekly Sift. How Fox News managed the Republican debate so as to minimize political damage to the GOP.
Game of Groans: How Focus on Trump Taunts Hides GOP War on Middle Class, Workers by Juan Cole for Informed Comment.
Get Ready for Scott Walker … and the Ruthless Politics of Walkerism by John Nichols for The Nation.
The United States Infrastructure Is Failing Dramatically But No One Is Paying Attention by Kendyl Kearly for Bustle.
Employee or contractor? Labor seeks to clarify rules by Christopher H. Rugiber for the Associated Press.
You Can Bet on These Racetrack Workers to Fight for a Raise From Their Billionaire Boss by Bruce Vail for In These Times. (Bill Harvey) Union organizing at Pimlico racetrack.
Another example of American exceptionalism.
A report by CNN Money indicates that, since the year 2000, the American labor force participation rate—the proportion of working-age Americans with jobs or looking for work—has fallen, while the rate has been increasing in other industrial countries.
I don’t think CNN’s theory—that other countries make it easier for women to work—is the whole story.
Hourly wages, adjusted for inflation, have been falling in the USA since the late 1970s. For a long time Americans maintained their material standard of living by working longer hours, sending more families into the work force and borrowing money.
Now this has collapsed. The good jobs are no longer available. In many cases it makes more sense to cut back on spending than to get a job where low wages are offset by the costs of transportation, child care and the like.
I think—although I don’t claim to be able to prove—that the other countries on the CNN chart are following the same path as the United States, but are not so far along.
One straw in the wind is the increasing number of Europeans who are working “extreme” working hours—50 hours a week or more. This is pretty much the trend in the USA during the 1990s.
I think the best explanation for what is going on is the Marxist one. In all the rich countries, there is an increasing flow of income to holders of financial assets and to people in executive positions and a decreasing flow to the middle class, working people and the poor.
Why America’s workforce is shrinking and Europe’s isn’t by CNN Money.
Extreme working hours have radically increased in many western European countries since the start of the 1990s by Anna S. Burger of the London School of Economics.
David Rotman, writing in MIT Technology Review, made the case that advances in technology and growth in productivity have not paid off for working Americans.
He considered whether there is something in the nature of technology that rewards highly-trained employees and eliminates the jobs of unskilled employees.
I think the problem is the priorities of the people in charge, not the nature of technology.
It is not technological progress that leads to public libraries having shorter hours, or public utilities have deferred maintenance, or customer service centers keeping people on “hold” for endless minutes. Rather it is the priorities of the people in charge.
To the extent technology is the cause, I think the reason is that the impetus has been to develop technologies that eliminate jobs rather than technologies that provide better services and improve the quality of life for the majority of Americans.
How Technology Is Destroying Jobs by David Rotman for MIT Technology Review.
Technology primarily benefits those who own it. Applied science primarily benefits those who fund it, or at least reflects what the funders are interested in. There can be spillover effects that benefit everyone, but these don’t necessarily happen of their own accord.
I came across a good article on this topic in Technology Review. The lesson I draw from it is (1) technology is not a substitute for social and economic reform and (2) there is a need for scientific and technological research outside the domains of for-profit corporations and the military.
Who Will Own the Robots? in Technology Review. (Hat tip to naked capitalism}
The AFL-CIO is withholding support from congressional representatives until it sees how they vote on the Trade Promotion Authority and Trans Pacific Partnership Agreement.
The TPP is an anti-labor international agreement, and the TPA, also known as Fast Track, is a procedure for pushing it through with limited time for debate.
Good! It’s about time that organized labor stop supporting politicians that don’t vote in the interests of working people—even if such politicians are supposedly a lesser evil.
Democrats Frustrated by Unions’ Cash Freeze Over Fast Track by Emily Cahn and Emma Dumain for Roll Call.
AFL-CIO Says Labor Has Been Blocked from Trans Pacific Partnership Debate by Marc Daalder for In These Times.
There’s a new documentary film out about how college administrators frequently ignore rape of students on campus.
I think there is an inherent problem with pursuing charges of rape through complaints about violations of Title IX of the Education Amendments rather than the criminal courts.
Title IX bans discrimination based on sex, on penalty of losing federal aid. The argument is that failure to punish rapists is a form of sex discrimination. The standard of proof violation of Title IX in an administrative proceeding is less than that required for conviction of a felony in the criminal courts.
I can understand why rape victims hesitate to complain to the police. Rape is the only crime which, sadly, is regarded as shaming to the victim, and also is difficult to prove beyond a reasonable doubt.
The problem is that college administrations are not set up to administer criminal justice and they have a conflict of interest between doing justice and protecting the good name of the college.
A trained prosecutor is the best qualified person to deal with an actual crime, and college students should be subject to the same laws as everybody else. Keeping college rape cases out of the criminal courts is the equivalent of the “benefit of clergy” during the Middle Ages.
A survey by the National Low Income Housing Coalition shows that if you work full-time for minimum wage, 40 hours a week and 52 weeks a year, and set aside 30 percent of your income for housing, you can’t afford to rent a moderately priced standard one-room apartment in any state in the USA. And that goes for states with minimum wages higher than the federal minimum wage.
That doesn’t mean that minimum wage workers have to be homeless. But they do have to work more than 40 hours a week, or devote more than 30 percent of their incomes to apartment rent, or settle for cheap substandard quarters, or all three. Most Americans are struggling these days, but some of us are struggling harder than others.
Out of Reach 2015: Low Wages and High Rents Lock Renters Out by the National Low Income Housing Coalition.
In No State Can A Minimum Wage Worker Afford a One-Bedroom Apartment by Tyler Durden for Zero Hedge.
In These 21 Countries, a 40-Hour Work Week Still Keeps Families in Poverty by Flavia Krause-Jackson for Bloomberg News.
Yves Smith wrote on her naked capitalism blog:
… … The claim that outsourcing and off-shoring lower costs is greatly exaggerated.
Off-shoring and outsourcing … … do lower direct factor and lower-level worker costs.
But they do so at the increase of greater coordination costs of much more highly-paid managers. And they also increase shipping and financing costs, and downside risk.
Having people work at a distance, whether managerially or by virtue of being in an outside organization where the relationship is governed by contract, increases rigidity (harder to respond to changes in market demand) and the odds of screw-ups due to communication lapses.
And outsourcing also reduces an organization’s skills. Those lower-level people have a lot of product know-how that you lose when you transfer activities to an outside operation.
It’s nice to think that you can hollow out your organization and just do all the sexy design and marketing stuff and dump the grunt work on other players. But over time you are breeding future competitors.
Thus off-shoring is best understood as a device for transferring income from the rank and file to middle level and senior executives.
via naked capitalism.
In short, off-shoring lowers the wages of production workers, and raises the salaries and importance of managers. And who makes the decision about off-shoring? The managers!
This reminds me of America by Design and Forces of Production, books I read by an economic historian named David Noble. He wrote that there was no evidence of an overall economic benefit in replacing skilled workers with automatic machinery. The benefit was in increasing the power of managers and industrial engineers, and decreasing the power of workers.
There’s something called public choice theory, which is about how public officials, when making decisions, consider their own good as well as the public good. I’d say this theory applies just as much to decisions within corporations or any other organization.
What it means is that when corporate officials say “the market” determines this or that, we the people are entitled to ask—the market for what and for whom?
German manufacturing companies have a reputation for high wages and good labor relations. That may be justified at home, when labor unions are strong and labor rights are established by law. It doesn’t necessarily apply to their operations in the USA.
Chris Brooks, writing in Labor News, wrote about how Volkwagen manages its Tennessee plant on the theory that workers are most productive when pushed to their physical limits.
At the Chattanooga plant, permanent employees work alongside “temporary” workers, some of whom have actually worked there for years. Pitted against one another, both groups fear to speak up.
“Every employee there busts their ass and is injured and is working through the pain because they don’t want their job taken by a temp,” Amanda says. “It is made clear to all of us that we are easy to replace.”
That’s lean production in a nutshell: ruthless efficiency, produced by a system of efficient ruthlessness. Workers are deliberately stretched to their limits, by a combination of competitive pressure, inadequate training, repetitive stress, and rotating shifts—so that the weakest links can be identified and eliminated.
Conservatives have long portrayed minimum wage increases as a harbingers of economic doom, but their fears simply haven’t played out. San Francisco, Santa Fe, and Washington, DC, were among the first major cities to raise their minimum wages to substantially above state and national averages. The Center for Economic and Policy Research found that the increases had little effect on employment rates in traditionally low-wage sectors of their economies.
Economists with the Institute for Research on Labor and Employment at the University of California-Berkeley have found similar results in studies of the six other cities that have raised their minimum wages in the past decade, and in the 21 states with higher base pay than the federal minimum. Businesses, they found, absorbed the costs through lower job turnover, small price increases, and higher productivity.
via Mother Jones.
The key economic problem for the USA is that American wages are too low.
American consumer demand is the engine that has driven not only the U.S. economy, but much of the world economy, for the past 60 years.
If people don’t have enough money to buy things, there is no economic incentive to make things.
If there is no economic incentive to make things, the world’s wealth does not increase relative to the population.
If there is no economic incentive to make things, rich people and institutions invest in debt, which in the long run makes the problem worse.
If there is no economic incentive to make things, unemployment increases.
There is an economic theory that says that the way to cure unemployment is to allow wages.
It is true that, in a generally prosperous economy, an individual employer might hire more workers if they were available at a lower wage. But that wouldn’t work for the economy as a whole because workers are customers. Without mass prosperity, economic activity is devoted to serving the desires of a tiny economic elite.
One way to wage raises is to raise the minimum wage. This is good for all working people, not just those earning minimum wage or slightly above. It pushes up the general wage level and increases the market for goods and services.
And aside from all these other considerations, do we really want to live in a rich nation in which millions of hard-working people are poor?
Answer to the question: Yes.
An individual fast food restaurant manager might not be able to pay $15 an hour minimum wage and still compete with other restaurants paying $7.25 an hour. But there would be no competitive disadvantage if there was a floor under all wages.
Answer to the question: No.
Sam Seder’s interview of Thomas Geoghegan is about 45 minutes long.
The rest of the running time is a repeat.
Thomas Geoghegan says American labor needs a new strategy, which would include the following.
- The right to join a labor union or engage in labor action should be a civil right.
- Workers should have the right to form unions that represent only their members, instead of a government-determined bargaining unit.
- On the other hand, unions should strive for works councils in big organizations, which would represent all the employees and not just the union members.
American labor unions have been unable to stop “right to work” laws from being enacted in state after state—even in Michigan.
These laws forbid labor-management contracts in which an employer hires only labor union members, or requires new employees to pay dues to a union. Yet, by law, the union contract must cover all the employees in the bargaining unit, regardless of whether they join or pay dues.
Thomas Geoghegan wrote in Only One Thing Can Save Us that it may not be possible to stop right-to-work from becoming national law. To the average person, it doesn’t seem right that they should be forced to join an organization or make payments to it against their will. And as fewer and fewer people have any experience with unions, the counter-argument becomes harder to make.
But if unions lose that battle, as well they might, all is not lost. It is much easier to make the case for the right to join a labor union if there never are any circumstances in which union membership is compulsory.
Source: The Atlantic.
Now President Obama didn’t exactly say that in the 2012 campaign, not in so many words, but the focus of his policy is that high schools should make their graduates “college-ready” and that a college diploma is a key to economic success.
This is a red herring. It is a diversion from the real economic problems, especially the erosion of the wage-earning middle class.
Thomas Geoghegan pointed out in his new book, Only One Thing Can Save Us, that when the President says lack of higher education is the cause of economic inequality, he is writing off the 68 percent of Americans age 24 to 64 who don’t have college diplomas and never will.
Suppose, he asked, that Obama and the Democrats succeed in pushing the college graduation rate up to 35 percent or even 40 percent, which would be hard to do. Obama is still writing off the majority of working-age Americans.
The President is in effect telling high school graduates that the reason it is so hard for them to find decent-paying jobs is that they didn’t go to college. And as for the the one in five male college graduates and one in seven women graduates whose income is less than that of the average high school graduate, it is because they attended the wrong college or majored in the wrong subject.
I grew up with a stereotype of the Germans as prisoners of hierarchy, bureaucracy and rules, who would never be a match for us democratic, freedom-loving practical Americans.
But if that ever was true, our two countries have since traded places.
Thomas Geoghegan, a Chicago labor lawyer whose writings I admire, wrote a book in 2010 entitled WERE YOU BORN ON THE WRONG CONTINENT? How the European Model Can Help You Get a Life about how Germany is an economic role model for the United States.
He still says so in his newest book, ONLY ONE THING CAN SAVE US: Why America Needs a New Kind of Labor Movement.
In Germany, Geoghegan wrote, the laws, strong labor unions, worker representatives in management make it difficult to fire anybody. So layoffs are a last resort, not a first resort.
German management is forced to concentrate on figuring out how to get the most out of the work force, not on making workers powerless and replaceable. The result is that German corporations invest in lifelong learning for their workers, on the justified assumption that they’re going to remain with the same employer and become permanent assets to the firm.
CEOs of American companies complain of a lack of skilled workers and the lack of job training.
But if you look at what most of them do, and not what they say, they don’t really want productive workers. They want replaceable workers.
One obvious example of this is Boeing’s decision to have its new Dreamliner made by inexperienced, low-paid workers in South Carolina rather than members of the International Association of Machinists in Seattle. They had production and quality problems in South Carolina, but their priority evidently was to get away from the union.
Now the same management philosophy is being applied to public schools, universities and hospitals. Well-trained, well-paid professionals are harassed, laid off and replaced with inexperienced newcomers.
If you define efficiency as that which is most convenient for managers, there is something to be said for this. An ignorant subordinate is less likely to give you an argument than an experienced and skilled subordinate. It is easier to treat people as replaceable parts if they lack knowledge and opinions.