According to the BLS online calculator — which uses the most widely accepted index (CPI-U) — $10.43/hr was the 1968 minimum… …and dividing an annual median wage of $26,363 — reported by Harold Myerson — by 2080 hours, today’s US median wage comes in at $12.68/hr.
All — following 43 years of improving productivity (we are both old enough to remember the typing pool) — double the per capita income since.
Somebody — please! — just say the words out loud: sector wide labor agreements, sector wide labor agreements, sector wide labor agreements.
there is no reason the minimum wage should be the median wage, or even that it should rise in real terms, other things being equal.
which of course they are not. what is needed is a minimum wage that allows people to live in some dignity.. decent housing, decent food, decent leisure, decent health care, decent retirement. and that median wage represents decent pay (above minimum) to allow “median” workers a decent share in the wealth they help create.
some kind of labor solidarity is the only hope of achieving that.
coberly, I don’t care if the minimum wage is $30,000/yr if the median wage is $100,000 (in today’s buying power) as some day it undoubtedly will be (if we don’t blow ourselves up or Jesus comes first) — I want the minimum to reflect the maximum that could be extracted for that job without harming the worker more than helping (because I am very likely to be that worker). Suppose you dignified life wage is lower than that.
If — at that “maximum extraction point” (don’t look for that phrase in any text book :-]) — there is still not enough for a dignified life, then it is time for the earned income tax credit or a subsidized higher minimum. Since the minimum should minimally be (in this cab driver’s indubitable wisdom) $31,200/yr (2080 hours) this should not be a problem.
Interestingly I have seen posts that Merkel is proposing a minimum wage of $9.76 in the east and $11.03 in the west. (This from the conservative party btw). Will be an interesting experiment to see the effect of the minimum wage as it appears that at this point Germany does not have one.
I think Germany got a min wage for the first time of $7.50 a couple of years ago. I supposed then it was mostly for the east. Last I heard — a few years back — the German 10 percentile wage was $15/hr (the American median wage; perhaps even that optimistically), so the min seems not a critical measure of German worker conditions — Germany pretty much having invented sector wide labor agreements, which labor market setup chased Wal-Mart 88 big boxes out of the country a couple of years back for not being competitive at the same wages everybody else pays.
New theory comes in — like Richard C. Koo’s “government as the BORROWER of last resort”; the answer to the Great Depression?; the obvious angle both Keynes and Milton missed? — and people at least discuss it. Decades old, round the world successful practice — like sector wide labor agreements; the only possible out of the race to the bottom that I have ever learned of or can think of (it’s one of those things you wish you had though of) — and nobody even says the words out loud. ???
On a different note.. Has anyone noticed what the U.S. Dollar is worth compared to one pound of British currency? Before long it will be worth double. I have been slowly but surely buying trade sized quantities of .999 fine silver. Next i’ll be investing in trade sized amounts of gold. There has never been an economy that has succeeded that was based on paper money. Gold and silver are the only currency that has been worth anything since the beginning of time.
ddrew in all sincerity could you educate me, or at least provide a link to something educational to explain what you call “sector wide labor agreements?” I happen to agree with much of what you describe as a problem, so I would like to have a better grasp of your purported solution. Yes, I am ignorant enough to have interpreted Coberly as asking a real, not rhetorical, question along these lines (more than once). Are you talking about a United Auto Workers, maybe a United Cab Drivers of America, a Union of Nurses, and many more organizations like that? Do you imply that so-called right-to-work laws have to somehow be removed where they exist, and other changes have to happen? Without understanding what you intend to imply by your term, it’s difficult to evaluate what you recommend.
i haven’t the slightest idea what you are talking about. i thought i agreed with you about sector wide.
where i don’t agree with you… or anybody else since Jesus… is that money is the purpose of life. I’ll settle for enough money because it is the medium of exchange, but as something to live for… might as well take cocaine and be done with it.
PJR, You are right. I am pushing sector wide labor agreements here without even explaining what they are all about. Under legally mandated, sector wide labor agreements every worker doing the same type of job (e.g., retail sales) in the same geographic local must work under one common contract for all employers.
This originated on continental Europe after WWII as a program Republicans would have loved in the beginning. It was intended to restrain labor unions from beginning a race to the TOP (we actually had some of that here in the late 60s and early 70s): each workplace claiming they deserved more money because another company was paying more — and round and round. Keeping labor’s price down was intended to free up more money to go to reconstruction of war torn nations. (England didn’t do it which is why England fell behind according to Barry Eichengreen in “The European Economy after 1945.”
The fabled European welfare state was considered at the time a compensation to get labor to accept sector wide collective bargaining.
Upshot: sector wide also fends off the race to the bottom — seemingly creating the perfectly fair and balanced labor market — seemingly perfect compared to the labor market craziness we have here anyway.
I was like one of those nineteenth century farmers who read pamphlets to try to understand how they were be crucified (on a cross of gold). Endless stories like this: My husband worked as a unionized butcher for whatever chain for 25 years and then one day they just told his local that next week they would start getting their meat from an outside nonunion firm. All the stories seemed in one direction — down, down; with no way out.
Then I accidentally read about sector wide somewhere and instantly recognized a way out — because I was desperately looking for one — unlike our progressive economists, even our very best ones.
A few weeks ago Brad DeLong — one of our very few top progressive economists — was musing on his blog about Matthew Yglesias’ — one of our very few top progressive columnists — speculating (they were just talking; not seriously proposing) whether breaking up the barber cartel would help the poor people. THE BARBER CARTEL!? On commenter on DeLong’s blog told of doing his two barbers’ tax return to insure they got their earned income tax credit. DeLong was apparently embarrassed enough by the reaction that he (I think) deleted his own post.
The lack of sense of proportion about the real world by even our very top progressive shows why they never pick up on sector wide — I guess. They are not desperately looking for a way out. They never even notice that the median wage may now be way down below what the minimum wage could very workably could have been.
So I do what I can to wake them up from my home computer — like above comparing how a new idea (“BORROWER of last resort”) gets at least some discussion while a decades old, world wide proven idea like sector wide never sees the light of day between the oceans here (not quite: it is used in Canada). Something, somehow has to wake our best progressives up.
I’m about to tear what hair I have left on my head after reading Russ Douthat’s Op-Ed piece in today”s (Sunday) NY Times. Thank goodness that in the print edition it is on the back page. Maybe, hopefully, it will be read by very few. The column, Our Reckless Meritocracy, http://community.nytimes.com/comments/www.nytimes.com/2011/11/06/opinion/sunday/douthat-our-reckless-meritocracy.html, makes one thing abundantly clear. Douthat is not a part of any meritocracy. The column “explains” how it is the high IQ character of our leaders, both business and government, that has led to their arrogant recklessness in their business thinking and behavior. No mention of greed leading to pernicious points of view that serve only their own best interests. No, it is their intelligence that has driven them to act like fools. While I am tempted to write a letter to the editor, I don’t think that the NY Times editorial board gives a flying fuck about having a complete ass on its payroll and contributing such crap to its pages.
Compare the Douthat column to those referred to on this site written recently by Yves Smith, Naked Capitalism’s Yves Smith is on fire….., Why is Douthat in a national new journal and Smith only blogging on line? The news media’s priorities are ass backwards.
Thank you ddrew for clarifying your term for me and for the background. Labor currently lacks the power to increase its power, so something big would have to upset the apple cart and reverse the dynamic if the outcome is to look anything like what you recommend. That said, the concept is not entirely foreign to our own labor history and is worth examining. (For example, your words “in the same geographic local” might need to be carefully considered in the context of 21st century America.)
I am not so sure the high iq’s haven’t led our leaders into folly. because they are so brilliant they can always tell the professor what he wants to hear without ever thinking very hard about anything or knowing what they are talking about. or maybe as you say they just want the money.
sad to say even certain liberal columnists don’t bother to learn much about what they are talking about. that’s not what they are paid for.
All that has to happen is for someone to tell the people what has happened to them — that the median wage is now lower than what the minimum could very workably have been.
If we could have foretold to Americans of 1968 that by early 2007 the minimum wage would have shrunk almost half ($5.50 adjusted) and that 25% of our hourly workforce would be earning less than LBJ’s minimum ($10.15?, $10.43?) they would have assumed some disaster happened on the level of a comet strike. If we told them that, no, per capita income would have doubled they might have burned us at the stake for mad witchery.
Americans of today are in the position of the proverbial frog put in cold water, gradually heated to boiling, doesn’t notice and jump out. Tell wage starved Americans their boiling point should have been reached and tell them how easy it is to jump out (sector wide, fair rebalancing of the labor market) and don’t vote for anybody who does not support (careful introduction of) madated, sector wide collective bargaining ? 🙂
Point out that mandatory union formation will correct the political imbalances too with financing equal to special interests and the overwhelming majority of votes.
Let’s not commit Obama’s cardinal sin and never discuss the most opportune way out with the people. I believe supermarket and airline workers would kill for sector wide. Just tell them where to vote!
Thanks for the correction Drew, though I’m not sure I want to contribute to any farther distribution of his crap. On the other hand maybe some of our readers will take the time to write to the editor of the Times and make the same observations and complaints. Not that that leads to anything useful, but……
One might add that a large part of the bargin in continental europe was to avoid a communist takeover of France, Greece (where there was communist rebellion 1946-1949) and Italy, where at one time large communist parties existed. Sector wide was a part of the deal with the social democracy to convince people that they would be at least as well off under that system than under a soviet style system (recall that in 1946-1950 it was thought that communism would take over the world). Now that the communist threat has abated they want to take back the bargin because they think folks have no other way to go. (The same sort of applies in the US as a good bit of the New Deal was to prevent rebellions during the 1930s) So its now the 1% desiring to renige on the deal made long ago.
Drew I agree that SWLAs would help american workers tremendously. The problem I have with your prescription is that it ignoers the number of people who will be jailed, maimed and killed while getting there. If you think there is a non-violent way to acheive this goal in the current political and media environment please provide pointers.
If you believe regulators, city councils, state troopers are going to let workers demonstrate for SWLAs I’d like to suggest you go to the video store and rent Matewan, Harlan Country USA and American Dream.
amateur socialist, I think the idea would sell like hot cakes to anyone who is not in the top 1% of income — and maybe a lot who are in the top 1%. Linebackers and TV anchors may benefit from labor’s race-to-the-bottom — benefit under a process similar to squeezing the toothpaste tube at the bottom — where there is no resistance — the paste moves through the middle where resistance equalizes — then all comes out the top. Linebackers and TV anchors have no desire to squeeze the people below. A lot of CEOs may not either — mountains and mountains of cash are squeezed up to them in our crackpot labor market and scooping more than they can ever spend just becomes a game.
PS. Karl Marx reportedly said that America doesn’t need socialism because it had labor unions. I see Marx is ahead of his time on labor’s race-to-the-bottom. I see socialism as his intellectual Jules Vernes guess about the future — intellectual for trying to imagine a whole new world. I think Marx was much too smart to support common ownership of the means of production once he saw how it did not work in the USSR.
Today’s socialists often strike me the most informed on exactly what is wrong with no idea at all how to make it right. With human beings all you can do is balance the power and watch them try to take it all for themselves. Balance of power is the only hope of fairness. Our political system is supposed to do that. Sector wide labor agreements seem as close to perfection as possible for labor market balance.
That is a beautiful picture you painted of the victory dance. Again, I fear it conveniently ignores the violence it would take to accomplish it in a single generation (not to mention the generation of violence it took almost a hundred years ago the first time around).
Coberly’s condescending assessment of progressives in this country is doubly useless in the face of the brave Americans huddling in US occupations under daily assault. Pitiful.
I have been spamming around that $10.15/hr 1968 federal minimum wage ($1.60/hr adjusted) — going by the Minneapolis fed reserve bank online inflation calculator…
…and that today’s US median wage is $15/hr going by chart 3.5 on p. 134 of “The State of Working America, 2008/2009.”
The lost growth facts may be more extreme.
According to the BLS online calculator — which uses the most widely accepted index (CPI-U) — $10.43/hr was the 1968 minimum…
…and dividing an annual median wage of $26,363 — reported by Harold Myerson — by 2080 hours, today’s US median wage comes in at $12.68/hr.
All — following 43 years of improving productivity (we are both old enough to remember the typing pool) — double the per capita income since.
Somebody — please! — just say the words out loud: sector wide labor agreements, sector wide labor agreements, sector wide labor agreements.
drew
don’t say it. explain it.
(and good luck.)
and just to be the devil’s advocate:
there is no reason the minimum wage should be the median wage, or even that it should rise in real terms, other things being equal.
which of course they are not. what is needed is a minimum wage that allows people to live in some dignity.. decent housing, decent food, decent leisure, decent health care, decent retirement. and that median wage represents decent pay (above minimum) to allow “median” workers a decent share in the wealth they help create.
some kind of labor solidarity is the only hope of achieving that.
Here’s something to warm you up this nice Fall afternoon! 😎 NancyO
http://photography.nationalgeographic.com/photography/photo-of-the-day/merced-river-yosemite-melford/
coberly,
I don’t care if the minimum wage is $30,000/yr if the median wage is $100,000 (in today’s buying power) as some day it undoubtedly will be (if we don’t blow ourselves up or Jesus comes first) — I want the minimum to reflect the maximum that could be extracted for that job without harming the worker more than helping (because I am very likely to be that worker). Suppose you dignified life wage is lower than that.
If — at that “maximum extraction point” (don’t look for that phrase in any text book :-]) — there is still not enough for a dignified life, then it is time for the earned income tax credit or a subsidized higher minimum. Since the minimum should minimally be (in this cab driver’s indubitable wisdom) $31,200/yr (2080 hours) this should not be a problem.
Don’t question me coberly. :-[
Interestingly I have seen posts that Merkel is proposing a minimum wage of $9.76 in the east and $11.03 in the west. (This from the conservative party btw). Will be an interesting experiment to see the effect of the minimum wage as it appears that at this point Germany does not have one.
I think Germany got a min wage for the first time of $7.50 a couple of years ago. I supposed then it was mostly for the east. Last I heard — a few years back — the German 10 percentile wage was $15/hr (the American median wage; perhaps even that optimistically), so the min seems not a critical measure of German worker conditions — Germany pretty much having invented sector wide labor agreements, which labor market setup chased Wal-Mart 88 big boxes out of the country a couple of years back for not being competitive at the same wages everybody else pays.
New theory comes in — like Richard C. Koo’s “government as the BORROWER of last resort”; the answer to the Great Depression?; the obvious angle both Keynes and Milton missed? — and people at least discuss it. Decades old, round the world successful practice — like sector wide labor agreements; the only possible out of the race to the bottom that I have ever learned of or can think of (it’s one of those things you wish you had though of) — and nobody even says the words out loud. ???
On a different note.. Has anyone noticed what the U.S. Dollar is worth compared to one pound of British currency? Before long it will be worth double. I have been slowly but surely buying trade sized quantities of .999 fine silver. Next i’ll be investing in trade sized amounts of gold. There has never been an economy that has succeeded that was based on paper money. Gold and silver are the only currency that has been worth anything since the beginning of time.
Scott
Make A Website To Make Money Online
ddrew in all sincerity could you educate me, or at least provide a link to something educational to explain what you call “sector wide labor agreements?” I happen to agree with much of what you describe as a problem, so I would like to have a better grasp of your purported solution. Yes, I am ignorant enough to have interpreted Coberly as asking a real, not rhetorical, question along these lines (more than once). Are you talking about a United Auto Workers, maybe a United Cab Drivers of America, a Union of Nurses, and many more organizations like that? Do you imply that so-called right-to-work laws have to somehow be removed where they exist, and other changes have to happen? Without understanding what you intend to imply by your term, it’s difficult to evaluate what you recommend.
ddrew
i haven’t the slightest idea what you are talking about. i thought i agreed with you about sector wide.
where i don’t agree with you… or anybody else since Jesus… is that money is the purpose of life. I’ll settle for enough money because it is the medium of exchange, but as something to live for… might as well take cocaine and be done with it.
scott
take your gold and silver to the grocery store and offer them a choice between that and you government paper dollars. you might learn something.
PJR,
You are right. I am pushing sector wide labor agreements here without even explaining what they are all about. Under legally mandated, sector wide labor agreements every worker doing the same type of job (e.g., retail sales) in the same geographic local must work under one common contract for all employers.
This originated on continental Europe after WWII as a program Republicans would have loved in the beginning. It was intended to restrain labor unions from beginning a race to the TOP (we actually had some of that here in the late 60s and early 70s): each workplace claiming they deserved more money because another company was paying more — and round and round. Keeping labor’s price down was intended to free up more money to go to reconstruction of war torn nations. (England didn’t do it which is why England fell behind according to Barry Eichengreen in “The European Economy after 1945.”
The fabled European welfare state was considered at the time a compensation to get labor to accept sector wide collective bargaining.
Upshot: sector wide also fends off the race to the bottom — seemingly creating the perfectly fair and balanced labor market — seemingly perfect compared to the labor market craziness we have here anyway.
I was like one of those nineteenth century farmers who read pamphlets to try to understand how they were be crucified (on a cross of gold). Endless stories like this: My husband worked as a unionized butcher for whatever chain for 25 years and then one day they just told his local that next week they would start getting their meat from an outside nonunion firm. All the stories seemed in one direction — down, down; with no way out.
Then I accidentally read about sector wide somewhere and instantly recognized a way out — because I was desperately looking for one — unlike our progressive economists, even our very best ones.
A few weeks ago Brad DeLong — one of our very few top progressive economists — was musing on his blog about Matthew Yglesias’ — one of our very few top progressive columnists — speculating (they were just talking; not seriously proposing) whether breaking up the barber cartel would help the poor people. THE BARBER CARTEL!? On commenter on DeLong’s blog told of doing his two barbers’ tax return to insure they got their earned income tax credit. DeLong was apparently embarrassed enough by the reaction that he (I think) deleted his own post.
The lack of sense of proportion about the real world by even our very top progressive shows why they never pick up on sector wide — I guess. They are not desperately looking for a way out. They never even notice that the median wage may now be way down below what the minimum wage could very workably could have been.
So I do what I can to wake them up from my home computer — like above comparing how a new idea (“BORROWER of last resort”) gets at least some discussion while a decades old, world wide proven idea like sector wide never sees the light of day between the oceans here (not quite: it is used in Canada). Something, somehow has to wake our best progressives up.
I’m about to tear what hair I have left on my head after reading Russ Douthat’s Op-Ed piece in today”s (Sunday) NY Times. Thank goodness that in the print edition it is on the back page. Maybe, hopefully, it will be read by very few. The column, Our Reckless Meritocracy, http://community.nytimes.com/comments/www.nytimes.com/2011/11/06/opinion/sunday/douthat-our-reckless-meritocracy.html, makes one thing abundantly clear. Douthat is not a part of any meritocracy. The column “explains” how it is the high IQ character of our leaders, both business and government, that has led to their arrogant recklessness in their business thinking and behavior. No mention of greed leading to pernicious points of view that serve only their own best interests. No, it is their intelligence that has driven them to act like fools. While I am tempted to write a letter to the editor, I don’t think that the NY Times editorial board gives a flying fuck about having a complete ass on its payroll and contributing such crap to its pages.
Compare the Douthat column to those referred to on this site written recently by Yves Smith, Naked Capitalism’s Yves Smith is on fire…..,
Why is Douthat in a national new journal and Smith only blogging on line? The news media’s priorities are ass backwards.
WORKING LINK TO DOUTHAT’S PIECE:
http://www.nytimes.com/2011/11/06/opinion/sunday/douthat-our-reckless-meritocracy.html
🙂
Thank you ddrew for clarifying your term for me and for the background. Labor currently lacks the power to increase its power, so something big would have to upset the apple cart and reverse the dynamic if the outcome is to look anything like what you recommend. That said, the concept is not entirely foreign to our own labor history and is worth examining. (For example, your words “in the same geographic local” might need to be carefully considered in the context of 21st century America.)
ddrew
thanks for the explanation. you may have to repeat it from time to time.
i think you are right about our best progressives. they can’t seem to think of anything but welfare.
Jack
Douthat is a tool.
I am not so sure the high iq’s haven’t led our leaders into folly. because they are so brilliant they can always tell the professor what he wants to hear without ever thinking very hard about anything or knowing what they are talking about. or maybe as you say they just want the money.
sad to say even certain liberal columnists don’t bother to learn much about what they are talking about. that’s not what they are paid for.
All that has to happen is for someone to tell the people what has happened to them — that the median wage is now lower than what the minimum could very workably have been.
If we could have foretold to Americans of 1968 that by early 2007 the minimum wage would have shrunk almost half ($5.50 adjusted) and that 25% of our hourly workforce would be earning less than LBJ’s minimum ($10.15?, $10.43?) they would have assumed some disaster happened on the level of a comet strike. If we told them that, no, per capita income would have doubled they might have burned us at the stake for mad witchery.
Americans of today are in the position of the proverbial frog put in cold water, gradually heated to boiling, doesn’t notice and jump out. Tell wage starved Americans their boiling point should have been reached and tell them how easy it is to jump out (sector wide, fair rebalancing of the labor market) and don’t vote for anybody who does not support (careful introduction of) madated, sector wide collective bargaining ? 🙂
Point out that mandatory union formation will correct the political imbalances too with financing equal to special interests and the overwhelming majority of votes.
Let’s not commit Obama’s cardinal sin and never discuss the most opportune way out with the people. I believe supermarket and airline workers would kill for sector wide. Just tell them where to vote!
Thanks for the correction Drew, though I’m not sure I want to contribute to any farther distribution of his crap. On the other hand maybe some of our readers will take the time to write to the editor of the Times and make the same observations and complaints. Not that that leads to anything useful, but……
One might add that a large part of the bargin in continental europe was to avoid a communist takeover of France, Greece (where there was communist rebellion 1946-1949) and Italy, where at one time large communist parties existed. Sector wide was a part of the deal with the social democracy to convince people that they would be at least as well off under that system than under a soviet style system (recall that in 1946-1950 it was thought that communism would take over the world). Now that the communist threat has abated they want to take back the bargin because they think folks have no other way to go.
(The same sort of applies in the US as a good bit of the New Deal was to prevent rebellions during the 1930s) So its now the 1% desiring to renige on the deal made long ago.
Note that in the 1920s it was $5.00 per lb. Actually it was higher a couple of years ago.
Gee I guess with professor Beck relegated to the radio they gotta flog that goldline scam somehow. Good luck with that.
A brief postwar history lesson courtesy a commenter at Digby’s Hullabaloo:
“From FDR to Reagan–We hire you, you work hard, we prosper, you prosper.
From Reagan to present–we hire you, you work hard, we prosper.“
Drew I agree that SWLAs would help american workers tremendously. The problem I have with your prescription is that it ignoers the number of people who will be jailed, maimed and killed while getting there. If you think there is a non-violent way to acheive this goal in the current political and media environment please provide pointers.
If you believe regulators, city councils, state troopers are going to let workers demonstrate for SWLAs I’d like to suggest you go to the video store and rent Matewan, Harlan Country USA and American Dream.
amateur socialist,
I think the idea would sell like hot cakes to anyone who is not in the top 1% of income — and maybe a lot who are in the top 1%. Linebackers and TV anchors may benefit from labor’s race-to-the-bottom — benefit under a process similar to squeezing the toothpaste tube at the bottom — where there is no resistance — the paste moves through the middle where resistance equalizes — then all comes out the top. Linebackers and TV anchors have no desire to squeeze the people below. A lot of CEOs may not either — mountains and mountains of cash are squeezed up to them in our crackpot labor market and scooping more than they can ever spend just becomes a game.
PS. Karl Marx reportedly said that America doesn’t need socialism because it had labor unions. I see Marx is ahead of his time on labor’s race-to-the-bottom. I see socialism as his intellectual Jules Vernes guess about the future — intellectual for trying to imagine a whole new world. I think Marx was much too smart to support common ownership of the means of production once he saw how it did not work in the USSR.
Today’s socialists often strike me the most informed on exactly what is wrong with no idea at all how to make it right. With human beings all you can do is balance the power and watch them try to take it all for themselves. Balance of power is the only hope of fairness. Our political system is supposed to do that. Sector wide labor agreements seem as close to perfection as possible for labor market balance.
That is a beautiful picture you painted of the victory dance. Again, I fear it conveniently ignores the violence it would take to accomplish it in a single generation (not to mention the generation of violence it took almost a hundred years ago the first time around).
Coberly’s condescending assessment of progressives in this country is doubly useless in the face of the brave Americans huddling in US occupations under daily assault. Pitiful.