Relevant and even prescient commentary on news, politics and the economy.

Cowen and truck driving jobs in North Dakota

by Mike Kimel

Tyler Cowen has a post on truck driving jobs in North Dakota:

My poking around showed that some of them start at 75k a year, though with raises for good performance.

The implication, of course – why don’t unemployed people move to North Dakota and drive trucks for good wages rather than stick around and collect unemployment?

I’ve got a theory:

Figure 1

Screenshot from Job Service North Dakota, run by the State Gov’t of North Dakota.

Advertised wages for light truck drivers are quite a bit lower ($21,736 for entry level).

More generally, I imagine there is a reason why unemployed relatively unskilled people, in, say, Lincoln, Nebraska don’t go through the expense of moving their families to Bismark and taking the coursework needed to get certified in order to get a job paying $32K a year or to do the equivalent to become a roughneck at a gas boomtown, even ignoring the fact that the jobs pay less than outsiders believe and the costs of taking them are greater. See… we’ve been through this before many times.

The boom in the new skillset often ends before the new entrants can recoup their investment in gaining the skillset. And not just for the unskilled. Ask the folks who flocked to Silicon Valley in the 1990s for those great jobs as programmers. I’m sure you can find someone who drove out to Palo Alto in 1996 who is still programming and making north of $175K to boot but I’m guessing those people are huge outliers, not the trendline.

Disclosure. I’m now currently looking for a full time job. Given the severance package I accepted from my previous employer and since I have some consulting work to do, I’m pretty sure I’m neither eligible for unemployment benefits nor able to move to North Dakota to train for an exciting new career hauling cargo.

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Is Joe Hill finally dead? (The Ballad of Joe Hill)

by Bruce Webb

As I browsed through the news today it kind of struck me, not like a lightning bolt but more as an accumulation of blows, that capital was going for the final victory over labor. It was not just the realization that the corporatists and their enablers in both parties were willing to accept 9% plus unemployment long-term but offer no relief at all to the 99ers, but equally willing to accept an investment climate where employers simply will not hire even if they are sitting on piles of cash, because after all who knows and why should any individual employer take the first jump. But this article pushed me over the edge: Employers shrink pay raises, focus increases more on top performers

In other cases, employers can afford raises but are holding off to conserve cash in case the economy slips into another recession. They also are recognizing that they don’t have to offer pre-downturn-level raises because of an abundance of unemployed job applicants willing to work for less.

“The companies have the money to pay but they don’t need to pay it because the supply [of highly qualified unemployed people] is still there,” said Tim Namie, managing director of Manpower Professional’s Washington region.

Employers, Namie added, “are willing to roll the dice” that because of the tight job market, meager raises won’t prompt good workers to quit. And if the workers do leave, he said, employers figure they can find replacements willing to work for lower wages.

Gone is even any pretense that wages are somehow magically tied to “marginal productivity”, nope we are reverting right back to 19th century industrial standards where labor is simply replaceable. Don’t want a job that barely pays now? Well screw you, we’ll just hire a homeless 99’er at 10% less, after all it will allow him to pay for a couple of months in a rooming house. These sons-a-bitches are betting they can roll the dice and have it come up ‘1888’. Well a funny thing happened in those years right before the turn of the 19th century when the Gilded Age was truly golden and Robber Barons were building mansions and founding Colleges, a certain segment of labor decided they weren’t going to take it anymore, and things got kind of messy for the capitalists. And a few decades later we had the following ballad going around: (lyrics under the fold).

RandomPottins: blog of Charlie Pottins of the UK: Ballad of Joe Hill

On November 19, 1915, as working men were being sent to slaughter each other for rival imperial powers, working class hero and songwriter Joe Hill was executed by firing squad in the state of Utah.

In 1925, Alfred Hayes wrote a poem about Joe Hill entitled “I Dreamed I Saw Joe Hill Last Night”, but sometimes just called “Joe Hill”. Hayes’s lyrics were turned into a song in 1936 by Earl Robinson.
It has been sung by Paul Robeson and Pete Seeger, and by the Irish singer Luke Kelly. Probably the best known version today was sung and recorded by Joan Baez in 1969, and featured in the film by Joe’s fellow-Swede Bo Widerborg in 1971. Bob Dylan has said that Joe Hill’s story helped inspire him to write his own songs.

But the lyrics as sung have sometimes varied, as the ballad was passed down over the years, sung at benefit concerts, and meetings, around campfires or in pubs.

I dreamed I saw Joe Hill last night,
Alive as you and me.
Says I “But Joe, you’re ten years dead”
“I never died” said he,
“I never died” said he.
“In Salt Lake, Joe,” says I to him,
him standing by my bed,
“They framed you on a murder charge,”
Says Joe, “But I ain’t dead,”
Says Joe, “But I ain’t dead.”

“The Copper Bosses killed you Joe,
they shot you Joe” says I.
“Takes more than guns to kill a man”
Says Joe “I didn’t die”
Says Joe “I didn’t die”

And standing there as big as life
and smiling with his eyes.
Says Joe “What they can never kill
went on to organize,
went on to organize”

From San Diego up to Maine,
in every mine and mill,
where workers fight,
to defend their rights,
That’s where you find Joe Hill,
it’s there you find Joe Hill!

I dreamed I saw Joe Hill last night,
alive as you and me.
Says I “But Joe, you’re ten years dead”
“I never died” said he,
“I never died” said he.

I am not a revolutionary, but on the other hand I am not here to turn my back on the IWW (Wobblies) or Harry Bridges who as head of the ILA (Longshoremen) led the 1934 San Francisco General Strike. The New Deal overall can be seen as the result of a Great Compromise, Labor agreeing to maintain a system fundamentally based on and controlled by Capital in return for a fair share of resultant productivity. And with fits and turns that compromise and deal held up for 50 years. Until in the 1980s Capital decided that with a determined effort they could just roll back the clock a hundred years and tell labor to stuff it, to work or starve.

I mean it is one thing to tolerate high levels of unemployment, it is another to deliberately set out to exploit it in the way outlined by that WaPo article today. Which btw proceeded, without any apparent indignation, to point out that local workers in the DC area had it relatively easy, those workers outside the military-intelligence-national security sectors not even getting Beltway and Wall Street wage increases.

Look no one wants to see violence in the streets, but history shows that it is not only the capitalists that have 2nd amendment remedies. Joe Hill may have more life in him than they like.

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Women and participation in labor force

Nancy Folbre economist at UMass Amherst speaks to the issue of the participation of women in our economy:

Paradoxically, however, the very expansion of paid employment and the success of feminism have weakened gender solidarity. They have also intensified inequalities in family living standards.

Relatively few women in the workplace have made it into Ms. Whitman’s and Ms. Fiorina’s league. Still, earnings differences among women have been growing over time in the United States.

Married women’s rapid movement into paid employment between the 1960s and the mid-1990s helped prop up family incomes. But high-earning women tend to marry high-earning men, while low earners tend either to marry one another or — increasingly — not to marry at all. As women have garnered higher incomes, this marital sorting has intensified family-income inequality.

As more married women started bringing home a paycheck, previous differences in market income among families were reduced.

But the resulting decline in unpaid work had the opposite effect. Married women who don’t work for pay typically devote more than 40 hours a week to child care, meal preparation, house cleaning, shopping and related tasks, making a substantial contribution to family living standards.

Women’s productivity per hour in unpaid work almost certainly varied less than their market earnings, suggesting that housewives exerted an equalizing effect on the distribution of families’ “extended earnings” — the sum of market earnings and the imputed value of unpaid work.

As a result, increases in married women’s labor-force participation probably had a disequalizing effect on this broad measure of living standards.

(You can find more details about this argument in a draft paper of which I was a co-author for a recent conference on inequality and the middle class sponsored by the Luxembourg Income Study).

Rdan here…take a look at the draft paper…interesting.

Andrew Leonard at Atlantic presents a more practical concern of the Great Recession for many women.

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No laboring in economics

by: Divorced one like Bush
at the beach on vacation Ha!

Gee the economics profession is ignoring labor. I wonder why. Could it be who we follow? It’s not like we don’t quote old Adam often. Free market and ghost hand ideas are mentioned all the time as we follow Milton:

According to The Economist, Friedman “was the most influential economist of the second half of the 20th century…possibly of all of it”.[2] Former Federal Reserve Board chairman Alan Greenspan stated, “There are very few people over the generations who have ideas that are sufficiently original to materially alter the direction of civilization. Milton is one of those very few people.”[3]

I would add, a mind who focused on….wait for it…. MONEY.
“Monetarism is a school of economic thought concerning the determination of national income and monetary economics. It focuses on the supply of money in an economy as the primary means by which the rate of inflation is determined.”

In an interview at Right Wing News by John Hawkins (sorry no date)of The Man who is introduced thusly:

But I think the fact that Mr. Friedman finished in a tie for the 15 slot when RWN had conservative bloggers select, “The Greatest Figures Of The 20th Century” gives you some idea of Mr. Friedman’s stature.

we get responses to the questions by Mr Influence of the 20th century of:

From my point of view, we in the United States have gone overboard in respect to the extent of regulation and detailed control of labor standards, industry, and the like. It’s bad for us, but fortunately we had two hundred years of relatively free development to provide a strong basis to sustain the cost.

Well, they only consider half of the problem. If you move jobs overseas, it creates incomes and dollars overseas. What do they do with that dollar income? Sooner or later it will be used to purchase US goods and that produces jobs in the United States.

If the White House were under Bush, and House and Senate were under the Democrats, I do not believe there would be much spending.

How do you get them together by forming industrial cartels and keeping prices and wages up? That’s what Roosevelt’s policies in the New Deal amounted to. Essentially, increasing the role of government, enhancing the monopolistic position of labor, and creating as I said before the equivalent of price fixing cartels made things worse.

Well, who would provide the funds, the capital, and the entrepreneurship for the new industries? In a world in which there were no rich people, how would you have ever gotten the capital to produce steel mills or automobile plants? You can do it through the state, but the world tried that with the Soviet Union.

Well, Social Security is having a bad effect now through the tax system.

So we have a profession which followed a man whose focus was minimally on labor and by the above quotes maybe even condescending to labor as a factor in economics and wonder why the profession of this man has de-emphasized the subject? HELLO!!!!!!!!!!!!!!!!!!!

Maybe the profession really only needs to follow one piece of advice from Mr. Milton:

John Hawkins: Are there any political websites you’d like to recommend to our readers?

Milton Friedman: No, I don’t really follow any political websites. I think they’ll do better reading theWealth of Nations (laughs)…

Ok, lets read the words of the originator of the ghost hand theory:

“Every man is rich or poor according to the degree in which he can afford to enjoy the necessaries, conveniencies, and amusements of human life. But after the division of labour has once thoroughly taken place, it is but a very small part of these with which a man’s own labour can supply him. The far greater part of them he must derive from the labour of other people, and he must be rich or poor according to the quantity of that labour which he can command, or which he can afford to purchase. The value of any commodity, therefore, to the person who possesses it, and who means not to use or consume it himself, but to exchange it for other commodities, is equal to the quantity of labour which it enables him to purchase or command. Labour, therefore, is the real measure of the exchangeable value of all commodities. The real price of every thing, what every thing really costs to the man who wants to acquire it, is the toil and trouble of acquiring it.”[3]

If you will allow me, let’s put a picture to Mr Smith’s concept as it relates to why the economics profession needs to follow this one piece of Mr Influence’s advice.

Then there is this. And this as to why the economic profession needs to study this. Of course if the profession would just think about how the majority (like super duper majority) acquire their money, then maybe they would have not passed on this currently wide open, you can own it, make a name for your self aspect of money making.

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