Open thread July 1, 2014 Dan Crawford | July 1, 2014 7:42 am Tags: open thread Comments (5) | Digg Facebook Twitter |
I was shocked, going through salaries at Jobitorial and Glassdoor to find that most of the people I interact with at businesses I attend everyday are lucky to be making $400 a week. How is it possible for most of the American workers I deal with every day to live on such impossible to live on salaries? It’s like it’s one big Depression era workforce out there.
(Let’s get it straight: a true poverty line is about $45,000 for a family of three – if they have to pay for their own medical – which is about 40 percentile. Compute this from the minimum needs table (3-2) on p.44 of the 2001 book Raise the Floor – ignore the official federal guideline based on three times the price of an emergency diet; which some people still carelessly cite.)
This impossible American wage scale is some kind of emergency that cannot wait for five years for a couple of progressive locales to take five years to phase in a $15 minimum wage (and then five more for everybody else to sit around and wonder if they should phase it in). If a strong union were the active agent here it would not take five years to raise wages as long as in knew the money was there.
We’ve gotten over worrying about workers losing their jobs – let’s get over worrying about putting anybody out of business. Fortune magazine currently has an article explaining why Wal-Mart should not even lose stock share price if it voluntarily raised its minimum wage to $15 an hour (we should note w/o even other firms being forced to do the same, flooding Wal-Mart with newly flush customers).
If the federal minimum wage jumped to $15 tomorrow, then, taxi fares would have to be raised a dollar a mile overnight all over the country. Otherwise all the terribly exploited foreign born drivers would jump ship overnight. Will the taxi business survive? The only difference will be an influx of new American born (including African American) drivers. Any progressive reason not to jump the fares right now? (Chicago fare almost 60 cents a mile below 1981 – adjusting for inflation; 50% per capita income increase since then.)
Currently 100,000 out of 200,000 (the latter my guesstimate) gang-age, minority Chicago males are in street gangs – wont work for Egyptian wages. That’s an emergency.
The ultimate social/political/cultural game change – the only possible economic and political rebalancing path – if of course legally mandated, centralized bargaining (ask James Riddle Hoffa).
Centralized bargaining seems the only labor market setup in history that — new theory here? — not exactly puts labor on the same bargaining power level in setting its pay as ownership; but more like puts labor on the same bargaining power level as ownership to set the price of the PRODUCTS with the CONSUMER.
In this setup the hidden hand — the ultimate arbiter of who gets what production — ends up being the wishes of the consumer (we are mostly all employees and consumers).
Imagine if early steam loom operators could have bargained — and not just with their employer but — with every employer at once. Not only would they have had a better life than the individual weavers who preceded them (who had had a good economic life) but they would have tested the max the consumer would pay for their product (with the alternate of cheap, what I call subsistence-plus labor, segregated from the consumer you never know how much consumers might have paid).
Instead, as we historically know, the hundred times more productive steam loom operators were reduced to feeding their families oat cakes three times a day because they could not afford wheat bread.
PS. Forget the Koch brothers once we have the same number of lobbyists, the same aggregate amount of finance and 99% of the votes. It will be time to re-institute what Robert Kuttner calls financial repression, right down to confiscatory taxation — sold to a very eager to please Congress.
It should be obvious to you ladies that legally mandated, centralized bargaining is the only way — in the world, in history — to go. Ladies are willing to talk about anything even if there is no immediate practical result — in any case ladies define practical as how the thing works (what “practical” means, no?).
No; not to gentleman.
Gentleman only want to talk — or THINK — about things they can practicably do something about. “Practical” to an — instinctively pack hunting, much more totally group oriented than he ever suspects — is defined by whether he may PRACTICABLY TALK about how the thing might work — gauged almost purely by what his hunting pack (of 300,000,000) is thinking already. Nothing more intellectually intimidating and mind freezing to a gentleman than a topic that is not currently topical.
All I can say is: Instinctive individual gatherers (and individual thinkers), rock your boys!
Moan progressives moan.
I read everybody from Joseph Stiglitz to Nick Hanauer to David Kay Johnston, moaning about how the right monopolizes the national conversation with their silly big government and big deficit fobias. Whoa, Whoa, Whoaaa is us!
Progressives could completely dominate the national conversation tomorrow if they ever came up with true game changing issues — not phobias — that would capture everyone’s’ imaginations and make an opportunity to really educate the public to what is happening to them. The issues are of course as fast a jump as possible to the minimally survivable $15 an hour minimum wage (not the virtual/impossible $10 minimum of the present — see above) and the ultimate labor market AND political forum make over, legally mandated centralized bargaining.
YOU DON’T EVEN HAVE TO WIN (at first)! The scales will melt away from everybody’s eyes when you take the opportunity to teach them what they really need.
People don’t really sit around coffee shops and discuss what the deficit will be 40 years from now or whether big government is the problem — unless there is nothing else to distract them. And they don’t spend a lot of time discussing climate change or Wall Street re-regulation. Single payer would be great (win OR lose) but most people are covered and everyone was/is scared of Obamacare.
What else can I say? Individual gatherers: Rock your boys!
just a word of encouragement. i agree with most of what you are saying.
on the other hand, i have my own “project” which is an idea so simple and compelling that everyone should stop their yammering and simply “make it so.” only they don’t.
I was just thinking of adding something: that getting past the packers can’t talk/think-block is not so hard in experience. Just seems to take two things where one would be good enough for gatherers.
For instance, above I have two supports for centralized bargaining:
a) the practical necessity (equal bargaining power)
b) the theoretical necessity (consumer choice rules the marketplace if labor can charge the max — instead of being segregated from the consumer — can’t argue with the fairness of that)
I know I’m sounding silly (used to it) but only one would not get past the packers.
Same with the minimum wage:
a) $15 an hour adds only 3.5% to overall prices
b) 45% of workforce not getting fired over 3.5% price increase.
Ditto for fake federal poverty line:
a) media repetition of the fake federal poverty level of $18,000 for a family of three not discouraged by information that the line is based only on three times the price of an emergency diet (dried beans only please, no expensive canned)
b) add to that info that a true minimum needs line is more like $45,000 for a family of three computed from a comprehensive basket of needs in table 3-2) on p.44 of the 2001 book Raise the Floor and we don’t see that fake line very much anymore.
Seriously, find two arguments instead of one — might work. ???
Global Warming and the Which Way Is Up Problem in Economics
It is painful to read Eduardo Porter’s column on the prospects for slowing global warming and China’s greenhouse gas emissions. It’s not that Porter got anything in particular wrong; he is presenting standard projections that are the basis for international negotiations. Rather it is the framing of the trade-offs that is painful.
Porter poses the question of the extent to which China should be willing to slow its economic growth to curb its greenhouse gas emissions, as opposed to rich countries like the United States bearing more of the burden. The reason this is painful is that most folks might recall that our major economic problem at the moment is secular stagnation.
In case people forgot, this is a problem of inadequate demand. The story is that we don’t have enough demand for goods and services to keep our workforce fully employed. As a result we have tens of millions who are unemployed, underemployed, or who have given up looking for work altogether. This is not just a U.S. problem but one that afflicts much of the world.
Okay, now bring in the problem of global warming. Isn’t it horrible that we face this immense environmental problem at the same time that our economies are suffering from this horrible problem of secular stagnation? Arghhhhhh!
The problem of global warming is one that needs lot of work. We need people to retrofit our buildings to make them more energy efficient, to put up solar panels and wind turbines to get clean energy. How about paying people to drive free buses so that that commuters have more incentive to leave their cars at home? We need to build smart grids to minimize energy wastage. The list is really long.
This issue comes up very directly in terms of our economic relations with China. Our big complaint (at least publicly) is that China is deliberately keeping down the value of its currency against the dollar in order to export more to the United States. That’s a too little demand story again. But, we also want them to spend more on curbing greenhouse gas emissions. That’s a perfect way to address the too little demand story.
Instead of subsidizing its exports to the United States (the effect of China’s present trade policy), China could redirect these resources to subsidizing its installation of solar panels. Everyone stays fully employed and we get fewer greenhouse gas emissions.
These transitions are not all simple and easy, but the basic point is that two problems fit together perfectly. The enormous spending associated with World War II was the cure for our last depression. No one in that in their right mind would want to see another catastrophic war, but a massive deployment of resources to curb greenhouse gas emissions worldwide would serve the same purpose.
Come on folks, this really isn’t hard.
i am disposed to agree with you. so why IS it hard?
let me indulge in home-made anthropology:
humans evolved as a kind of cooperative predator. the “individual” hero of Ayn Rand fantasy does not exist. What happens instead is that the most effective predator of any small group of humans becomes the leader of the predator pack. The non leaders cooperation (and submission) is essential to the success of the group and therefore the success of its leader. but successful predators do NOT think in terms of the long run. they are pretty sure that if they take advantage of the immediate opportunity they will do well, and moreover they will then be in a better position to take advantage of whatever comes along next. the idea that what they do to prosper in the short run will make them less prosperous in the long run does not enter their decision making… nor “should” it. it would make them less effective in the short run and less attractive as leaders.
it is only us disgruntled not-leaders and not-really-followers who have the time and inclination to grouse about the leaders and, of course, occasionally be right about the long run.