Posts Tagged ‘Labor’

The 1% and the 99%: Links & comments 8/11/14

August 11, 2014

Corporate 1% in U.S. Gets Wealthier While Cash Piles Up by Lorraine Woellert for Bloomberg.  (via Naked Capitalism).

In the Future, We’ll All Be Renters: America’s Disappearing Middle Class by Joel Kotkin from his new book, The New Class Conflict.  (via Naked Capitalism)

During the Gilded Age of the late 19th century, U.S. politics was at least as corrupt as it is now, and a tiny oligarchy of wealth had as much power as it does now.   Yet these oligarchs also built railroads, steel mills, grain elevators—what we call physical capital—that was of ultimate benefit to the nation as a whole.  The same is true of the oligarchs of China and Russia today.

In contrast, the super-rich class in the USA today can’t seem to find anything useful to do with their money.  And that’s not because there is nothing useful to be done.  American roads, bridges and water and sewerage systems, as one example, need upgrade and repair.  But, no, I don’t think selling off American public infrastructure to private interests would be the answer.

Going Postal by Peter Byrne from his new book of the same name.  (via Corrente)

A corporation headed by Senator Dianne Feinstein’s husband, Richard C. Blum, has an exclusive contract to sell U.S. post offices as the Postal Service downsizes.   He is selling them to his friends, cheap.

Is ‘shareholder value’ bad for business? by Leon Neyfakh for the Boston Globe (via Mike the Mad Biologist)

Market Basket, a supermarket chain based in New Hampshire,  is an example of how a CEO can run a profitable business that pays good wages and serves customers well, and still be kicked out for failing to “maximize shareholder value”.

Now Is a Critical Moment to Stop Some Scary Global Corporate Deals That Are in the Works by Kevin Zeese and Margaret Flowers for AlterNet.

The Obama administration is pushing Congress to enact the Trans-Pacific Partnership and the Trans-Atlantic Free Trade Agreement, but the public is beginning to catch on that these are schemes to establish corporate power in international law.

People vs. money: the playing field is tilted

June 9, 2014

A labor union is a group of working people working together for a common purpose.   A corporation is a pool of money which has been combined for a common purpose.

In American history, going back to when Thomas Jefferson was Secretary of State and Alexander Hamilton was Secretary of the Treasury in George Washington’s cabinet. there have been two sources of power—people and money.

People power is irresistible when it has been mobilized, but people are prone to be apathetic and short-sighted.   Money power is constant.   It never is bored and never is blind to its own interests.  It is able to tilt the playing field.

Public opinion polls show that a majority of Americans want policies that are the opposite of what millionaires want, yet Washington officials and pundits accept the corporate agenda and treat those who represent public opinion as a lunatic fringe.

minimum_wage_onpageGovernment strictly regulates the internal workings of labor unions to make sure that they are operated honestly and democratically.   No such regulation applies to corporations.

Attorney-General Eric Holder has admitted that the Obama administration has not investigated financial fraud in the biggest banks and Wall Street investment firms because they are too important to the economy.   Imagine someone in the Kennedy administration saying this of Jimmy Hoffa and the Teamsters!

Right now a battle is going on for the rights of low-wage workers who frequently are, among other things, victims of wage theft.  Owners of fast-food restaurants commonly withhold pay for hours worked.  This is illegal.  Progressives are trying to put a stop to it.   Corporate executives are trying to change the laws to make it more difficult to sue.

The big problem for organized workers is that their immediate employer is not always the source of the problem.  Fast-food franchisees operate on extremely narrow profit margins, because of the conditions set by the franchising companies, and (arguably – I don’t really know) may not be able to afford to pay more than they do.  But the battle of the unions is with the franchisees, not with the real decision-maker.

Contract manufacturers in Asia operate under the same conditions.  Their profit margins, as set by their customers in North America and Europe, are so small that (arguably – I don’t really know) they may not be able to pay more than they do.   This is another way that the playing field is tilted against workers and their unions.

Another corporate abuse is the use of private equity to loot corporations at the expense of workers.  The basic idea of private equity is that investors buy out a company’s stockholders and operate it themselves.  In principle, there is nothing wrong with this, if they think they can manage the company better than the previous owners.   Sometimes they succeed in doing this, which is fine.

In practice, private equity investors frequently are looters.  The investors have the company pay themselves or their other companies big fees for management services, consulting services and other fees.  Typically they buy the company with borrowed money, so their own cost is small.  They sell off assets for a quick profit, lay off employees and pocket quick profits while leaving the company a mere shell.   Jimmy Hoffa would never have been allowed to get away with stuff like this.


Poverty-wage professors and higher education

September 24, 2013

Hat tip to corrente.

The passing scene: Links & comments 9/18/13

September 18, 2013

Longshore Union Got a Raw Deal from AFL-CIO by Carl Finamore for Counterpunch.

Labor Leaders, Obamacare and the Fate of the Unions by Shamus Cooke for TruthOut.

I was disappointed that President Obama did not support a public opinion for health insurance, as he promised during the 2008 campaign. But for a long time I hoped that the Affordable Care Act, aka Obamacare, would be an improvement, despite its flaws. I now think my hope was misplaced.

Many labor union members are turning against Obamacare, but AFL-CIO President Richard Trumka is trying to soften criticism because he is committed to supporting the Democratic Party. This is one of the reasons (not the only one) that the International Longshore and Warehouse Union decided to leave the AFL-CIO.

Larry Summers: Goldman Sacked by Greg Palast.

When Larry Summers was Deputy Secretary of the Treasury in the Clinton administration, one of his common questions was, “What would Goldman think of that?”—referring to Goldman Sachs, possibly the most predatory and dishonest of the Wall Street financial firms. Summers’ boss, then Treasury Secretary Robert Rubin, came out of Goldman Sachs.

So it’s no wonder that there was a public outcry against his appointment as chair of the Federal Reserve Board, and that, as a result, he withdrew his name from consideration. The wonder is that President Obama considered him in the first place.  In the article above, Greg Palast reviews Summers entire record of negative accomplishment.

Banks Are Manipulating Gold and Silver Markets by Washington’s Blog for The Big Picture.

A lot of people acquire gold and silver because they believe it has intrinsic value, unlike stocks and bonds.  But writers for The Guardian and The Telegraph in London report that the prices of gold and silver are manipulated by the big banks and trading companies, just like interest rates.

 The post provides a link to that article and links to other articles detailing just about every way the big financial firms rip off the public.

How Detroit went broke: The answers may surprise you—and don’t blame Coleman Young by the Detroit Free Press.

The Detroit Free Press ran a good article about the history of the Detroit city government’s financial mismanagement.  But the key reason Detroit went broke is that the auto industry abandoned the city, and the city’s political and business leaders never developed a strategy for diversifying the city’s economy.  Detroit’s location at the junction of two Great Lakes and a land bridge between the United States and Canada ought to give it some comparative economic advantage.


U.S. corporate profits and Chinese sweatshops

September 17, 2013



Costs and profits for Apple’s i-Phone

Defenders of sweatshop conditions in China say that low wages are the result of the impersonal workers of a hypothetical free market.  But a recent study (links are below) shows the real cause is the structure of the supply chain linking components producers such as Foxconn to customers such as Apple Computer.

When I hire a painter to paint my house, and he hires a helper, the free market works the way it ought to work because there is a rough equality of buying power.  But no such equality exists when individual workers are dealing not just with corporations, but with networks of corporations.

The corporate supply chain represents a concentration of power and a diffusion of responsibility.   When workers try to negotiate with Foxconn, managers can say that there is as limit to what they can do based on Apple’s requirements.   But Apple managers have no direct responsibility.  They can say there is a limit to what they can do based on their fiduciary responsibility to maximize return to stockholders.

You could say government should step in and set minimum wages and labor standards, but at the present time the governments of China and the USA are aligned with management, not workers.  Governments will not heed workers until they organize and create a base of power that governments must heed.  The workers of the world should unite.

Click on A Suicide Survivor: The Life of a Chinese Migrant Worker at Foxconn for a picture of working conditions at Foxconn by Jenny Chan.

Click on The politics of global production: Apple, Foxconn and China’s new working class for the text of the study by Jenny Chan, Ngai Punan and Mark Selden for their full paper.

Click on Apple et al create new working class for a duplicate copy of the study in Asia Times.  This is where I first came across the study.


Who are the real makers and takers?

September 12, 2013


Hat tip to Jobsanger.

The future of labor unions

September 3, 2013

I think workers will always need to organize to protect their own interests.  Labor unions are a structure that exists for that purpose, but it is nothing more than a structure, just as a corporation, a government agency, a charitable organization or a church is a structure.  The people within the structure may or may not be faithful to carrying out the organization’s purpose.

Labor unions are much more democratic and much less corrupt than other institutions in American society, partly because corruption is much less tolerated in unions than in other institutions.  Corrupt labor leaders go to prison; corrupt bankers retire to enjoy their ill-gotten gains.  Under law, the government can, and has, appointed trustees to take over corrupt labor unions and clean house.  Nothing of the sort exists for labor unions.

I think there always will be a need for labor unions, but future labor unions may not be like those of the present day.  In the 1930s, the American Federation of Labor, consisting predominantly of skilled workers organized by craft, did not respond to the discontent of workers in great industries.  Workers acted on their own, and the CIO (Committee for Industrial Organization, later Congress of Industrial Organizations) was formed in response.

The Wagner Act of 1935 recognized the right of unions to exist and to make contracts through collective bargaining, but imposed on them the obligation not to strike for the duration of the contract.  Further restrictions on labor unions were imposed by the Taft-Hartley Act of 1947 and the Landrum-Griffin Act of 1959.

The one-day work stoppages by Wal-Mart and fast-food workers remind me of what I read about the history of the 1930s, with workers taking their fate into their own hands and the recognized labor unions rushing to keep up with them.  These actions could represent a new direction for American workers.  I hope they do.


Those were the good old days

September 2, 2013


Hat tip to Mike the Mad Biologist.

The labor scene: Links and comments 8/30/13

August 30, 2013

graph-the-1-percents-jobless-recovery-01Here are some good articles for reading on Labor Day weekend.

Our Sad, Misunderstood Labor Unions by David Macaray for Counterpunch.

Labor unions are the only organizations whose purpose is to defend the rights of working people.  Why, then, have they gotten such a bad name?

Reversing the Labor Movement’s Free Fall by Stanley Aronowitz in Logos.

Aronowitz argues that labor unions must go beyond collective bargaining and champion the interests of working people across the board.

The AFL-CIO’s New Strategy by Shamus Cooke for Counterpunch.

While the AFL-CIO leadership recognizes the need for new strategy and tactics, it is limited by its commitment to the Democratic Party and the anti-union Obama administration.

unionincomeProductivity Rose 7.7 Percent Post-Recession; Workers Have Seen None of It by David Dayen for Naked Capitalism.

The decline of labor unions is turning the United States into a low-wage nation.

Workers Greatest Power Over Owners and Bosses? The Ability to Stop Work and Walk Out by James Cersonski for AlterNet.

Largest fast food strike ever: 58 cities will be affected by Joseph Eidelson for Salon.

Workers in the fast-food industry use strikes to protest unfair treatment and low wages rather than waiting until they can negotiate contracts.

Fast Food, Retail Worker Strikes Do Honor to King Legacy by David Dayen for Naked Capitalism.

Martin Luther King’s 1963 speech was given for the March on Washington for Jobs and Freedom, and he was murdered while in Memphis, Tenn., to support a strike by municipal garbage collectors.   If he were alive, he would support union organizers of low-wage workers and strikers against low-wage companies.

Click to view

Five reasons for optimism about labor unions this Labor Day by John Logan for The Hill.

The economic scene: Links & comments 8/23/13

August 23, 2013

Here are links to articles I found interesting and you might find interesting, too.

On the Phenomenon of Bullshit Jobs by David Graeber for Britain’s Strike! magazine.

Some 80 years ago the great economist John Maynard Keynes predicted that advances in technology would make it possible to do all the necessary work of society without people having to work long hours at low pay.

David Graeber said that this, in fact, has happened, but the necessary work of society is being crowded out by unnecessary work.  He knows people who say frankly that their work serves no useful purpose, and they do it only to earn an income.

How do you distinguish between necessary and unnecessary work?  Simply imagine what would happen if all the people doing a particular job went on strike?  Society would be seriously inconvenienced if nobody taught school or staffed fast-food restaurants.  But if all tele-marketers ceased work, most people would be glad.

Graeber wrote that it is the people who are doing the meaningful work—teachers, factory workers, health care workers—who are under attack in the current economic struggle, and that they are targets of resentment by people trapped in meaningless work.   This is a good instrument of social control, he thinks.

An Open Letter to President Barack Obama by Ani McHugh, a high school English teacher in New Jersey.

Ani McHugh appealed to President Obama to abandon corporate school “reform” which, she says, prevents teachers from doing their jobs.  She would be an example of people with meaningful and important jobs who are under attack.

How to Become a Part-Time Worker Without Really Trying by Barbara Garson for TomDispatch.

The trend to part-time work is not just a result of fewer factories and more fast-food restaurants.  Barbara Garson described how companies are switching from full-time to part-time work, with the same work requiring the same skills and sometimes by the same people, but with less pay, fewer benefits and no job security.


Chris Hedges on the failure of the liberal elite

August 21, 2013

Click on Death of the Liberal Class (and scroll down through breaks in the text) for more from Chris Hedges.

Why subsidize the job-killer, Wal-mart?

August 16, 2013

Walmart has been given $4 million in financial incentives by the city of Darien, Conn., to convert its store there into a Super Walmart.

walmart-logoThe usual justification for tax abatements and other subisidies for new industry is that they create local jobs.   But, as Kathleen Geier of The Washington Monthly wrote in a recent Salon article, there is no evidence of any net economic benefit to a Walmart moving in.

What Walmart does is to put local mom-and-pop stores out of business.  Some studies indicate that Walmart kills more jobs than it creates; others that it is a standoff.

walmart_moralitySam Walton, the founder of Walmart, was an innovator whose just-in-time system of inventory management reduced costs and enabled his company to reduce prices.   But now the company’s strategy for reducing prices is to use its market power to hold down wages and the prices it pays suppliers.  This does not benefit the areas the stores serve.

It is not just Walmart.   I think it is a mistake for any local government to offer subsidies for a new business to come in and compete with existing businesses.  I say let the businesses compete on a level playing field.

I’ll go further.  If it were up to me, the only business subsidy by American local governments would be free job training.

American businesses complain of lack of skills by new hires, but say they can’t provide training because there’s no way to stop the employees from taking their upgraded skills elsewhere.  Very well.  Let community colleges take over the responsibility for job training.

This is a form of aid that does not discriminate between existing business and new business.   It is not something the business owners can pocket and move elsewhere.  It creates value which benefits the people of the community and stays in the community.

Click on Wal-mart’s big lie: No, it doesn’t create jobs for Kathleen Geier’s complete article in Salon.

Re-shoring: the U.S. manufacturing comeback

August 12, 2013

Last year about a third of U.S. corporations with manufacturing in China told the Boston Consulting Group that they are bringing or plan to bring operations back to the United States.

The trend is called “re-shoring,” and all indications are that it is real.  What’s driving it, according to an article in the Paris Tech Review, are falling U.S. energy costs due to hydrofracking for natural gas, closeness to world’s largest consumer market, a shorter supply chain and, especially, U.S. expertise in automation technology.

Manufacturing Employment

Click to enlarge

There’s the catch.  Automation lowers the cost of U.S. labor compared to other countries, but it also eliminates jobs.  Professor Tim Leunig of the London School of Economics estimated that if 10 percent of the Chinese electronics industry relocated to the United States, it would eliminate 300,000 Chinese jobs but only create 40,000 American jobs.

This doesn’t mean that re-shoring is of no benefit.   It is of great benefit.  The hollowing out of the U.S. manufacturing economy has reached a limit.  Manufacturing jobs are increasing only modestly, but they are no longer declining.

The mere fact that more wealth is being generated in the United States should be of benefit for all American workers, whether they work for suppliers and subcontractors of the manufacturing companies, for providers of goods and services who benefit from a bigger consumer market, or for local governments that benefit from an increased tax base.  But to the extent that the U.S. work force consists of temporary, part-time, low-wage workers, the wealth won’t be spread around.


When inequality rises, well-being declines

August 8, 2013


I am not an envious person.  All my life I have had enough for health and happiness, and I never was bothered that some people had more.  I never worried about the Gini coefficient, which measures inequality.  So long as the vast majority of the population was doing well, and nobody was actually starving, what difference did it make how many houses or race horses rich people owned?

I now think I was wrong,  and the reasons are shown in the above chart, created by economic historian Peter Turchin.  The chart is a historical record of two things.

One is inequality, as measured by the ratio of the size of the largest American fortunes to the median wealth of all Americans.

The other is well-being, a composite of : (1) average life expectancy, (2) the height of the average person, a measure of health, (3) the percentage of American economic growth that goes to wages and (4) the average age of couples getting married the first time, with early marriages a proxy for economic optimism.

The chart shows a cycle of growing inequality and diminishing well-being from about 1830 to 1920, lessening inequality and improving well-being from 1920 to 1980, and a reverse of the cycle from 1980 to the present.  Why would this be?

One reason is that free-market society gives priority to the people with the greatest buying power.  When economic inequality is extreme, the desires of the elite take precedence over the needs of the majority.  Currently 1 percent of the American population has 20 percent of the income and 40 percent of the wealth, so we’re in such a situation now.

The other is that economic power is political power.  Sometimes wealthy families become political dynasties, like the Kennedy and Bush families; sometimes they work behind the scenes, like the Koch brothers or President Obama’s Wall Street golfing partners.   Influential rich people, with few exceptions, veto policies that would make them less rich or less influential.

What brought the first cycle of concentration of wealth to an end, according to Turchin, was literally the threat of revolution—battles of armed labor union members with strikebreakers and sheriff’s deputies.   The upper classes decided it was better to spread wealth around than to risk revolution.

If things keep going the way they are, he wrote, the United States in the near future will likely face another cycle of violent social unrest.  I think he’s right.


A new way to nickel-and-dime low-wage workers

July 18, 2013


This is from a report by the New York Times.

A growing number of American workers are confronting a frustrating predicament on payday: to get their wages, they must first pay a fee.

For these largely hourly workers, paper paychecks and even direct deposit have been replaced by prepaid cards issued by their employers.  Employees can use these cards, which work like debit cards, at an A.T.M. to withdraw their pay.

But in the overwhelming majority of cases, using the card involves a fee.  And those fees can quickly add up: one provider, for example, charges $1.75 to make a withdrawal from most A.T.M.’s, $2.95 for a paper statement and $6 to replace a card. Some users even have to pay $7 inactivity fees for not using their cards.

These fees can take such a big bite out of paychecks that some employees end up making less than the minimum wage once the charges are taken into account, according to interviews with consumer lawyers, employees, and state and federal regulators.

Devonte Yates, 21, who earns $7.25 an hour working a drive-through station at a McDonald’s in Milwaukee, says he spends $40 to $50 a month on fees associated with his JPMorgan Chase payroll card.

Click on Paid via Card, Workers Feel the Sting of Fees for the full New York Times article.

Click on More Than 286K People Ask McDonald’s Franchisees to Stop Paying Employees With Debit Cards for more.



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