Open Thread September 15, 2023, Will Union Auto Workers Strike?
The deep roots of the UAW’s current dissatisfaction share much with those taking labor actions to fight back after decades of rising inequality: The pay of typical workers has lagged far behind more-privileged actors in our economy, and the reason for this growing inequality is an erosion of workers’ leverage and bargaining power in labor markets.
Open Thread September 9, 2023 Where do Americans mingle the most? Angry Bear.
How workers lost leverage is a very important subject. My opinion is that a good part of it was employers organizing production in specific ways to reduce the leverage unionized employees had over getting the products (service, sometimes) out the door with an invoice attached. Bill likely had some experiences in this, but I did many Six Sigma projects and nearly all resulted in reductions in labor input and complexity. Not just in unionized areas, for sure.
Maybe the biggest factor was that the consequences of strike action got more and more tolerable for the business and everyone knew it. Machinists with 15 years experience ended up doing work that an inexperienced person might be able to do at about the same productivity after 3 shifts. And over time, the ability of the employer to convert these changes to higher profit proved a bit illusory as it quickly went to the customers. Maybe that’s how it should be.
People think I’m joking when I say that many KwikTrip jobs paying $15/hour with some benefits have more incremental personal productivity potential than lots of jobs where I used to work at about $40/hour with great benefits, but I’m not joking at all. When your workspace is also your customers’ space, unusual stuff happens every hour that someone needs to address in real-time. When you are building $25M machines, there is a huge effort for unusual stuff to not happen.
I did many Six Sigma projects and nearly all resulted in reductions in labor input and complexity….
This is obviously correct, but why then has American manufacturing productivity been so low, say, since 2000 and actually stopped growing entirely these last 12 years?
https://fred.stlouisfed.org/graph/?g=m2mx
January 30, 2018
Manufacturing Productivity, * 1988-2023
* Output per hour of all persons
(Percent change)
https://fred.stlouisfed.org/graph/?g=m2mB
January 30, 2018
Manufacturing Productivity, * 1988-2023
* Output per hour of all persons
(Indexed to 1988)
Interesting. I wonder if the idea that the value of productivity was realized heavily by customers would influence this? We frequently measured all kinds of factors on an “available seat mile (kilometer)” basis. On that basis, labor inputs were much, much lower from 1990 to 2015. But maybe productivity is normalized to $ somehow and if the customer keeps a bunch of those “saved” dollars, productivity is lower somehow?
I wonder if the idea that the value of productivity was realized heavily by customers would influence this (slowing and decline in productivity growth)?
[ This is a very, very important question. The resistance of vehicle manufacturers and labor to electric vehicles meant that productivity growth was largely forgotten. The problem has been hidden by tariffs against Chinese vehicle and vehicle parts manufacturers but the necessary recovering from the productivity decline will take years.
There is a reason Tesla manufactures vehicles and parts in China; not because of labor cost but productivity gains.
General Motors initially refused to produce any electrics in China. ]
I wonder if the idea that the value of productivity was realized heavily by customers would influence this (slowing and decline in productivity growth)?
[ Again, this is an especially fine question. The answer in Germany or China would be “yes.” ]
Eric:
Each time you surprise me with a little bit more knowledge about yourself provided by what you discuss. I am happy you are a part of Angry Bear.
Eric:
You are an engineer, yes? When I was a part of Ingersoll Engineers working in Supply Chain, etc. consulting, my other function was to read the reports and edit them so the customer could read them. Technically, the reports were fine and correct. I had to break them apart and make them legible. My doctorate boss recognized; I could write.
I broke your comment apart into three paragraphs to emphasize each of the topics you are bringing to bear in them. You can always edit them back together again if you disagree. Now you have me thinking about what I can do with you Eric. Nothing bad.
Will Union Auto Workers Strike?
Members of the United Auto Workers began a strike Friday
NY Times – just in
UAW Starts Strike Small, but Repercussions Could Prove Far-Reaching
NY Times – Sep 15
The union targeted three factories: one run by General Motors, one by Ford and one by Stellantis. Prolonged walkouts could hurt the U.S. economy and President Biden.
Biden Defends Striking Autoworkers: They Deserve a ‘Fair Share’
NY Times – Sep 15
https://www.nytimes.com/2023/09/14/opinion/child-poverty-america.html
September 14, 2023
America Betrays Its Children Again
By Paul Krugman
I’ve been writing about economics and politics for many years, and have learned to keep my temper. Politicians and policymakers often make decisions that are simply cruel; they also often make decisions that are stupid, damaging the national interest for no good reason. And all too often they make decisions that are both cruel and stupid. Flying into a rage every time that happens would be exhausting.
But the latest census report on income and poverty made me angry. It showed that child poverty more than doubled between 2021 and 2022. That’s 5.1 million children pushed into misery, for it really is miserable to be poor in America.
And the thing is, this didn’t have to happen. Soaring child poverty wasn’t caused by inflation or other macroeconomic problems. It was instead a political choice. The story is in fact quite simple: Republicans and a handful of conservative Democrats blocked the extension of federal programs that had drastically reduced child poverty over the previous two years, and as a result just about all of the gains were lost.
The cruelty of this choice should be obvious. Maybe you believe (wrongly) that poor American adults are responsible for their own poverty; even if you believe that, poor children aren’t to blame. Maybe you worry that helping low-income families will reduce their incentive to work and improve their lives. Such concerns are greatly exaggerated, but even if you worry about incentive effects, are they big enough to justify keeping children poor?
Why do I say that this policy choice was stupid as well as cruel? Two reasons. First, avoiding much of this human catastrophe would have cost remarkably little money. Second, child poverty is, in the long run, very expensive for the nation as a whole: Americans who live in poverty as children grow up to become less healthy and productive adults than they should be. Even in purely fiscal terms, refusing to help poor children may, over time, actually increase budget deficits.
About the immediate budgetary costs: The thing about helping low-income Americans is that precisely because their initial incomes are so low, fairly modest amounts of aid can make a huge difference to their well-being.
More than half of the rise in child poverty could have been avoided by extending the 2021 enhancement of the child tax credit. Such an extension would probably have had a direct budget cost of about $105 billion a year….
Notice the remarkable advances in science, theoretical and applied, being made month after month in China:
https://www.nature.com/nature-index/institution-outputs/generate/all/global/all
The Nature Index
1 May 2022 – 30 April 2023 *
Rank Institution ( Count) ( Share)
1 Chinese Academy of Sciences ( 7115) ( 2149)
2 Harvard University ( 3485) ( 1114)
3 Max Planck Society ( 2406) ( 642)
4 University of Science and Technology of China ( 1722) ( 637)
5 French National Centre for Scientific Research ( 4313) ( 621)
6 University of Chinese Academy of Sciences ( 2970) ( 608)
7 Nanjing University ( 1366) ( 591)
8 Tsinghua University ( 1668) ( 580)
9 Peking University ( 2111) ( 571)
10 Stanford University ( 1758) ( 524)
11 Zhejiang University ( 1309) ( 514)
12 Helmholtz Association of German Research Centres ( 2467) ( 506)
13 Massachusetts Institute of Technology ( 1844) ( 483)
14 Sun Yat-sen University ( 1152) ( 468)
15 Fudan University ( 1217) ( 439)
16 Shanghai Jiao Tong University ( 1266) ( 434)
17 National Institutes of Health ( 1155) ( 396)
18 University of Cambridge ( 1334) ( 395)
19 University of Oxford ( 1494) ( 386)
20 The University of Tokyo ( 1135) ( 367)
* Annual Tables highlight the most prolific institutions and countries in high-quality research publishing for the year