More on Unions
Damn you “comments closed”! Let me abuse my power to respond to some comments from my Union Rep post.
LauraNo and Roger, I think, make similar points.
LauraNo: I know I’m late with this but I guess I’ll throw it out here anyway. I have always thought that for many working class (white) people, it’s a zero-sum game. If democrats are defending minorities, then they are not defending white people. I think some of the anti-union and anti-government worker and especially anti-USPS feelings stem from the same thought process. The union protects ‘them’ too, which means hard-working, saintly white dude must be losing out somehow…
In my experience, the union protects “them” too more in the sense that they protect the worker who works their tail off as much as the one who sits in the back and reads a magazine, and that’s where the real tension arises. I will get to that in a second because it relates to Roger’s comment. As far as the Democrats go, I think political parties often treat these issues as part of a zero sum game, which is something people pick up on. If they make immigration reform, for instance, their signature issue in a given year, I do think its fair for people who are not immigrants to say, “Okay, but what are they doing for me?”
I’m going to respond to Roger’s points one by one:
You have defaulted to a zero sum conflict value of society and then pondered why those on one side of the paradigm construction don’t rally as you might expect. Workers vs management! Working class vs non working class!
Another possible way to solve the issue is to consider they reject your paradigm in part or whole.
I might have done that… but let’s remember Tonto’s response when the Lone Ranger said “The Indians! They have us surrounded!” Tonto: “What do you mean ‘we’, Pale-face?” I would disagree here with your word “they”. I work two blue-collar labor jobs, live in a blue-collar town, and nearly every member of my family and everyone I see on a regular basis is from that world.I know fairly well how they feel and even a die-hard Republican like my father still has opinions that are pretty close to that paradigm.
Here’s where I am really coming from: at my main job, we just got done with a grueling year-long contract renegotiation with management launched because the administration wanted to force out the long-time custodians who were making four dollars an hour over minimum wage with benefits and replace them with part-timers at less money and without benefits. For the most part, management won. We got shafted. Lots of people are talking about quitting. I might well have to quit. But, let’s just say that some of us adopt paradigms and some of us have them thrust upon us. After holding about a dozen blue-collar jobs in my life, I am way too used to having this paradigm thrust upon me.
For example, they may not think that government’s role is to take stands of one side against another. Indeed anyone who does think this way is kind of an exploitative bastard…no? “FY I Want Mine From You?” Perhaps they think the role of government is to provide just rules which apply to everyone and then get out of our way.
This might be a misreading of what I wrote, or maybe it’s something of a tangent. I said that government doesn’t represent their interests, which makes the answer to “What’s the matter with Kansas?” something like, “Nothing the matter; they’re just paying attention.” I did not say the government’s role is to take sides against another and, ideally, what I would like to see from government is something like: “to provide just rules that apply to everyone and get out of the way.” But they do take sides. That’s the problem. In Canada, at least, very much is done for the unemployed and there are very few protections for those of us who work for a living. This fosters resentments. In the States, it’s a bit more bipolar: much is done for those at the very top and the very bottom and next to nada for the bulk in the middle. This also fosters resentments.
Alternatively to the above, they could, as you suggest, have no faith that a government which takes sides will really take their side as opposed to the side of elites or other special interest groups. For example, if they view democrats as for minority privilege, and they are not a minority, then they realistically see this as a threat to their opportunity and equality.
Yep, that’s pretty much what I’m saying. The government takes sides. They side with elites and special interest groups. The closest they come to addressing the needs of working people is to focus on those in the direst circumstances on the margins and wonder why the larger working class turns away from them.
On the union angle, I am familiar with three working class takes on unions. First, that they are valuable and “help people like me.” Second, that they encourage free riders and loafers at the expense of “hard working responsible people like me.” And third that they are a net drain on value for all workers, often creating a zero sum dynamic and animosity which creates “harm for all of us, and drives jobs away.”
The take that I recently heard from a long-time employee at that main job of mine, following the horrible news about our new contract was: “If you work hard, you should not need a union. Unions are only for lazy people… And yet, what can we do? We need a union.” Our management can blame the union for the current “zero sum dynamic”, yet what they’re asking from their employees is simply not workable. I will quite likely have to quit this job because, under the new contract that they’ve been pushing for ever since they got a new President and Board, they want only part-time employees doing the labor jobs and they define “part-time” as being employed only when needed; thus, I am asked to be available five days a week for a job that might well employ me for zero days a week- and I suppose ask my landlord to be okay with that. I can’t do it.
Again, I’ve worked a lot of blue-collar jobs, most without unions, and none of them existed in the ideal world in which we don’t need unions because we all work hard together and management appreciates it. I think it should be that way. I think it’s stupid to run a business where it’s not that way. But, in my experience, the response to me being an exceptional worker has always, always, fishing always been something like “Rufus, you’re doing a really great job. We were wondering if you could stay tonight and work a few more hours just to help us get caught up. Clock out first.” Everywhere I’ve worked, the free riders were always the ones in charge.
It wasn’t a “zero sum dynamic” but if you’re not the one in charge, trust me, the “bottom line” dynamic feels about the same.
the response to me being an exceptional worker has always, always, fishing always been something like “Rufus, you’re doing a really great job. We were wondering if you could stay tonight and work a few more hours just to help us get caught up. Clock out first.”
You’re not taking advantage of the power that being exceptional workers gives you. If al of you left, the only ones left would be the drones that would have to accept the pay cuts and part-time, no-guaranteed-hours jobs.
Oh, that’s what the bosses wanted in the first place. Never mind.Report
And then, when they leave, you hire more of them. And then, when those ones leave, you hire more of them…
Yeah, it’s kind of insane how some businesses are run.
The response I get to these sorts of gripes is usually something like “so quit and go work somewhere else” and I definitely have done that, once I felt I gave the job a good college try and had found another one to replace it. But, after you’ve been through enough of those sorts of jobs, and seen how many of them are run that way, it’s like you almost start to think there’s an ethos behind it…Report
Yea, my response to “quit and work somewhere else” has been “Um, they’re all like that“.
It’s not “one bad employer”. It’s ALL of them. Especially blue-collar. Unless employment is really, really tight (which, on average, is maybe one small field of labor for maybe five years….so you gotta be in the right spot, at the right time, with the right skills, in the right industry — so basically, no. Never.)
And if you think white collar is any different — I might point out that the one perfect labor market for that (tech/IT/software workers in Silicon Valley — wherein you had really high demand and insufficient supply, meaning an individual could, theoretically, have a ton of leverage) — well, it turns out the employers there were all colluding to fix labor prices. Oops.Report
It’s not “one bad employer”. It’s ALL of them.
Let’s grant for the sake of argument that that’s actually true, and not an overgeneralization based on some anecdotal evidence you picked up from some left-wing news sources. We could draw the conclusion that you two know more about personnel management than every personnel manager in the country. Obviously that’s the correct conclusion, but just for laughs, let’s consider another hypothesis: Perhaps the productivity returns to experience in janitorial work are not actually so great as to justify the higher pay that janitors with several years of experience have been commanding in addition to the new ACA mandate that only applies to full-time employees.
well, it turns out the employers there were all colluding to fix labor prices. Oops.
Of course, that’s not true. A handful of employers—not all—agreed not to actively recruit each other’s employees. They didn’t agree “fix labor prices.” They didn’t even agree not to hire each other’s employees. They just agreed not to cold-call. Said employees remained among the highest-paid workers in the country and in the world, outside of finance, medicine, and law.
You gotta stop making stuff up.Report
@brandon-berg While you are correct about the limit being on poaching, you ignore the fact that poaching is the way that salaries tend to rise the fastest. The majority of jobs are not filled by throwing a job posting on Indeed or LinkedIn, they are recruited for. This is more true at the upper echelons of companies. Anti-poaching means that executive recruiters (and the levels that they recruit for) are not used between. them. So while it is not wage fixing, it has a significant impact on wages.Report
Honestly, Morat, don’t you know that all’s for the best in this best of all possible systems?Report
Oh, golly no! I’d never say I was operating at same the intellectual level as a personnel manager!Report
I’ll admit that I had not considered what impact the ACA mandate might be having on employers here in Canada.Report
“Perhaps the productivity returns to experience in janitorial work are not actually so great as to justify the higher pay that janitors with several years of experience have been commanding in addition to the new ACA mandate that only applies to full-time employees.”
I was reading Rufus as living in Canada.?? That said, this point requires emphasis. In the US, we have been actively forcing mandatory benefits on full time workers. This leads to some employees costing more than their marginal productivity generates. This transfers into higher production costs for customers. Managements’ job is eliminate this waste and inefficiency. They are doing it now in part by converting their workers to part timers.
In other words, misguided regulatory interference has negative unintended consequences (which Brandon and I warned of many times in the past) which makes employers look like jerks and makes employees lives miserable.Report
What you’re suggesting here is that, in the absence of that regulation, they would be perfectly happy to pay all of their employees, even the least skilled, a decent living wage and choose that option over hiring scabs and part-timers who they can pay as little as possible, thus translating those savings into profits. Of course, that’s not been true anywhere.
You can say that government regulation makes the problem worse, which it sure does, but it’s a bit odd that when employers make these decisions of their own accord you see it as the arc of justice bending towards a brighter, better life for all of us; but when they do it to deal with government regulations, you see it as a negative unintended consequence that unfairly makes them look like jerks.Report
“This leads to some employees costing more than their marginal productivity generates. This transfers into higher production costs for customers. Managements’ job is eliminate this waste and inefficiency”
Too bad this thinking isn’t applied to CEO’s.Report
I am not arguing that employers would pay low skilled, low productivity workers any set amount. I am arguing that in a reasonably competitive market that they would pay them based upon their marginal productivity. Paying them any more would be unfair to anyone willing to do the same job for less ( or in your terms a “scab”).
My argument is that is you force employers to pay above market wages (often via costly benefits or regs) to full time workers that the market will respond with more economical replacements to full time workers — part timers, automation, or by redesigning the job to be more complex and demanding.
When employers make the decision on their own it may indeed be bat shit stupid. But competition helps correct for this. Dumb firms lose out to less dumb firms.
When regulations make all firms stupid, then the entire industry becomes stupid looking all at once.
Said another way, stupid is bad. Forced, universal stupid is much worse. And forcing stupidity for benevolent intentions doesn’t make it any better.Report
@mark
When someone argues for privilege for their favored group (existing workers over prospective workers in this case) and I argue against privilege, why do you think I am arguing for another type of privilege? I am anti privilege.
I have read good arguments on both sides of the CEOs are overpaid argument. My personal experience (I know many personally) is that they do have some inefficient bargaining positions aka abuses of agency. I am against this as it is unfair and inefficient. I could be mistaken though.Report
I don’t think you’re arguing for another type of privilege. I was just taking your line of reasoning is asking why it’s not applied consistently in the working world. Wage growth has been stagnant for quite some time, while CEO pay just continues to climb (while more and more studies find next to no correlation between CEO pay and company performance). Workers SHOULD be paid based on their productivity. But why not start at the top when trying to determine who’s pay doesn’t line up with their contributions?Report
Because you are assuming they aren’t paid on increasing productivity and supply and demand in a world of “superstar competitions.” We are seeing similar trends with performers, actors, professional athletes, writers and such as well.
Again I suspect rent seeking does go on with CEO’s. My experience is that they load the boards up with fellow CEOs and ex CEOs and their is some suspicious cronyism going on. But I could be wrong. I fully support regulations which prohibit CEOs from making more than five times the maximum salary of the highest paid pro basketball player. Sounds just to me.Report
Bottom of the rung workers – pay based on productivity. CEO’s – pay based on professional athletes. Nice consistentcy there.Report
I was joking, if that helps any.Report
LauraNo’s comment brings to mind the alleged Jay Gould boost that he “could set one-half of the working class against the other half.” There is historical evidence that management often used racial and ethnic antagonism as a way of preventing their employees from forming Unions and organizing. The biggest areas of Union success in the United States were in the Northeast and Upper Midwest among the immigrants for Southern and Eastern Europe. There was much less Unionization amongst Anglo descended workers like in the South.
There is also a long history of racism and exclusion in early Union history. Samuel Gompers did achieve a lot of good for the American Federation of Labor but he made two very calculated and now morally indefensible political decisions:
1. The American Federation of Labor was only for skilled tradespeople. Samuel Gompers started out as a cigar maker.
2. The union was only for white people. Now this included people like Italians and Jews who might not have been considered white at the time of Gompers but it did exclude people of African, Asian, and other non-European ancestry.
The IWW was a much more inclusive union and did include people of all ancestries and ethnicities and unskilled laborers. The problem was that they were too revolutionary in other ways as well. The IWW wanted to overthrow the entire Capitalist and Ownership system when most workers probably just wanted a decent wage, decent hours, and safe working conditions.
So all of this probably helps create the situation that LauraNo is observing. The idea that Unions are only for lazy people is tough to break as well.Report
@saul-degraw
I’ll dissent from your #1 here. The AFL was primarily for skilled tradespersons, but not exclusively. In part, that may very well have represented a bias in favor of the skilled, but it also represented a bias in favor of organizing along craft lines. Cigar makers in one union, locomotive engineers in another, etc. So conceivably at one work site, you could have several people doing different tasks and members of different unions. That bias had the advantage of preventing one union from raiding the membership of the others.
Even so, there were “industrial” style unions in the AFL fold until the breakup in 1935, when the CIO was created. Those unions were organized by industry and not by the craft that some persons in the industry. The biggest example was the United Mine Workers, but smaller industry, like brewery workers, were also sometimes represented.
It’s probably safe to say that bias in favor of skilled labor and bias in favor of craft organization could go hand in hand, and the one could reinforce the other. And the AFL itself was formed partly in reaction to the much more inclusive Knights of Labor. But I really don’t see the craft-preference as a conscious decision as much as following a certain logic of organizing. Other historians would disagree with me, so I don’t want to present my view as the settled answer.Report
Ok, this one should absolutely not be in OTC.Report
I think it’s stupid to run a business where it’s not that way. But, in my experience, the response to me being an exceptional worker has always, always, fishing always been something like “Rufus, you’re doing a really great job. We were wondering if you could stay tonight and work a few more hours just to help us get caught up. Clock out first.”
I complained about this dynamic when I was still working at the Massive Global Conglomerate and my manager told me “the reward for good hard work is MORE good hard work”
This irritated the ever-living crap out of me at the time. It kinda still does.Report
Yet another SF series everyone here should read is Lois Bujold’s Barrayar books. (It’s funny! It has great characters! It has space battles! What’s not to like?)
Anyway, the emperor of Barrayar has a saying that the reward for a job well done is a harder job. Since “job” usually means saving the planet from Seriously Bad Guys, it kind of works.Report
Well, if that came with a promotion or a bump in pay (or the reward of knowing you saved the planet), that’s one thing. While I’m not its biggest fan, I’ve reconciled myself to The Peter Principle.
I’m irritated by the managers who reward good hard work with good hard work and little else… and who reward slacking off at work with more opportunities to slack off at work.
Then again, I wasn’t hit by the first round of layoffs… but that was cold comfort by the second round.Report
Mostly the reward of knowing you saved the planet. The main protagonist’s cover is that he’s a lowly military courier and that he only got even that job through family pull. Regardless of how many plots against the emperor he foils, he never even gets a public commendation. He understand the necessity, but it still bugs him.Report
“I’m irritated by the managers who reward good hard work with good hard work and little else… and who reward slacking off at work with more opportunities to slack off at work.”
Worse than that. My “Clock out first” was very pointed.Report
Excellent post, Rufus.Report
Thanks!Report
There is no “don’t have rules/gov that take sides.” Any set of rules will have advantages and disadvantages for all the various sides. When people say they want rules that don’t tip the scales for one side, they are working the refs trying to get rules that help them.Report
Unions only work when they represent the dedicated workers and the slackers because management will reward hard work with more hard work. They want a system where they could get the most out of their employees while giving the least because labor is a cost. The various resentments help management because it prevents workers from uniting against management for a better bargain.
People are naturally tribalistic though and like @saul-degraw pointed out, the more inclusive unions in America also tended to be the least effective. The more racially divided areas like the South were the ones where unionization was least effective. The Left traditionally tried to get around this by promoting class-consciousness over other forms of identity but this went out of fashion during the 1960s when anti-imperialism became the defining part of leftism.Report
I might have done that… but let’s remember Tonto’s response when the Lone Ranger said “The Indians! They have us surrounded!” Tonto: “What do you mean ‘we’, Pale-face?”
You blew the line. You don’t have a “we” in the Lone Ranger’s quote.Report
Won’t be the last time.
I still remember the first punchline I screwed up. It was a stupid joke was about a dumb guy (I don’t know- Billy Carter, say) going into a store and ordering a submarine sandwich, chips, and a drink with a long drawn out explanation of how he wanted them and the clerk saying “That’s fine Sir, but this is a hardware store”. First time I tell the joke, at about age five, and I start it: “Okay, so this stupid guy walks into a hardware store and he says…”Report
Speaking only from my experience, I’ve never been told or “asked” to work off the clock. However, in some situations, I was under a lot of pressure to be “efficient,” and that sometimes meant not clocking in or under-reporting the time I worked. It was all done without the approval of management and against official policy. But management knew I did it and were happy because I wasn’t adding as much to labor costs.
Who was to blame for this? Me. The labor market I worked those jobs in was tighter than I imagine the labor market in Rufus’s locality to be. So I probably had more power to stand up for myself more than I did. And of course, my working off the clock made it more difficult for other employees not to do so. To be clear, though, if the labor market were looser, I can see at least some managers “asking” me to work off the clock, as Walmart supposedly, if the rumors are true, to employees as they try to leave after having clocked out. Some managers, though, were conscientious and probably wouldn’t do that.
That’s one reason why whatever my personal feelings (mostly negative) about those unions I’ve had closest contact with, I support unions as a general tool and support policies that would generally make it easier to unionize.Report
What I learned at the restaurant was that, if you offer to do it, they will be impressed by your initiative in doing it. They will also ask you to do it again.Report
I believe the disconnect here is the belief that the unions are actually protecting or supporting any of the membership.
The leadership protects only their own little zone of influence. The membership votes their own interest without regard to what the union is doing.
Whatever interests there are that the union is supposed to be protecting, I have people I pay to take care of that for me, and they’re on the job. Whatever I want to do for my own self is my own business.Report
I get what you’re saying in the first handful of sentences and, sadly, I think you’re right a lot of the time. I don’t know what you’re alluding to here:
“Whatever interests there are that the union is supposed to be protecting, I have people I pay to take care of that for me, and they’re on the job. Whatever I want to do for my own self is my own business.”Report
I’m saying that I pay the leadership to do a job, and when that job is done, I expect them to get out of the way and leave me alone.
I pay my doctor to do a job too, and though I may not vote hand-in-hand with the AMA 100% of the time, I’m still not opposed to medicine.Report
Gotcha. Good point. That is a real issue with unions too.Report
My point exactly.
For years, my business agent was an ex-Marine named Oliver sitting in an office on the second floor. He provides a service to me, the same as the guy at the desk at a hotel provides me a service.
And just like I don’t want the guy at the desk at the hotel following me back to my room, I want Oliver to leave me the hell alone after he’s done providing a service to me.
He’s free to state his position on issues, recommend candidates and what-not.
And I’m free to disregard him.
I never did live at the union hall.
I have my own household to take care of.
As much as they happen to be concerned about my little household, I’m concerned about it even more.Report
Many unions handled training — apprenticeship — particularly in the skilled trades; think electrician. This is also something many employers used to pay for, on-the-job training; often because that’s part of what a union negotiated if it was a company shop and not a trade union. Now, employees generally have to pay college tuition to get those same skills. Economically, we see this shift in the price of college tuition, too; where ‘more’ doesn’t result in efficiencies of scale for cost control, and we have a tuition bubble/student-debt bubble as a result; a huge shifting of the burden of training people to work.
This comment likely inspired by the community-college post on the FP; I should probably reframe it for that discussion if it hasn’t already been made.Report
With the IBEW in particular, the apprenticeship has been re-structured to award a four-year degree upon completion (a 4-yr apprenticeship).
My own union awards a two-year degree upon completion of the apprenticeship, though the apprenticeship is five years. It’s treated as a master’s for emigration purposes; which is just like my guys: slinging graft on the side, but they can’t get anything on the table.Report
Just a note- my father was in the IBEW for 25 years before he decided to quit and become a fisherman.
He was actually a union rep for about twelve of those years and I am very proud that I will sometimes run into guys he worked with who will say: “Hey, I know you! Your dad is a good man!”Report
@rufus-f
“we just got done with a grueling year-long contract renegotiation with management launched because the administration wanted to force out the long-time custodians who were making four dollars an hour over minimum wage with benefits and replace them with part-timers at less money and without benefits. For the most part, management won. We got shafted.”
You are missing who your competition is in the zero sum part of the equation.
Your fellow workers were competing with potential part timers. The part timers won and now have a job. If you guys had won they would have lost and been out that job opportunity.
The real struggle was between more experienced current employees fending off the threat of (I assume) less experienced workers.
The winner was not management. They were ultimately representing the interests of less privileged workers and the customers who will gain from lower production costs. (Industry wide, the margins will revert toward the risk adjusted required rate of return, with market share and share of profits going to the management which anticipates and defends the customer’s interest best.
I repeat. The zero sum dynamic was between your coworkers and potential workers/customers. In this case the customers and less experienced workers won. And we are all potential customers, so we all won. Justice prevailed. Excess overhead unnecessary in the production of this good was eliminated. Prosperity increased.
“Yep, that’s pretty much what I’m saying. The government takes sides. They side with elites and special interest groups.”
I am not for the government taking sides. I am definitely not for them taking your side against customers and less privileged prospective employees. It would be unfair and counterproductive to the broad welfare of all.
As for management demanding things which seem unfair of you, your best approach is to quit and look for a better employer. My guess is you will. That is what I always did with crappy employers. As managers they need to consider the costs and benefits of nickel and diming their workforce away. Any competitor can offer better working conditions and thus try to create a more productive workforce. In the end, the customer will decide which is right. We are all customers. This is the dynamic which has raised living conditions by twenty to thirty fold (or more) over the past two hundred years and can continue to do so in the future.
Employees cooperate with management in the production of goods and services. Employees compete with other prospective or current employees. Firms compete with firms and we all do it to serve customers better. We are all customers and everyone competes to cooperate better with us. This is the recipe of free enterprise, and we owe our unprecedented prosperity to it.
That said it can be a bitch as it unfolds. I’ve felt screwed over too.Report
You’re missing the third group here: There are 1. full timers, still some anyway, 2. part-timers who work a mandatory three shifts a week and more as needed, and 3. “part timers” who only get called when needed and have no guarantee of any hours. They did away with the second group, of which I was a member, and squeezed the full timers by capping their salaries for the next fifteen years, cutting any benefits, and offering them ten thousand dollars to quit immediately. A handful of full timers quit. I am now defined as “part time” but essentially lost most of my hours. So, yes, I am probably quitting. Most of us are. I am at a loss as to who they ultimately want to work these jobs, although my suspicion is they’re looking for people who are fresh off the boat or right out of jail and desperately needing work.
As far as excess overhead translating to the customers, fat chance. The company- and I’m *really* trying NOT to identify them here- recently spent somewhere in the order of two or three hundred million dollars locally to expand the business and basically went overboard in bloating what was already a top-heavy and inefficient administrative structure- something that libertarians recognize the problems with when it comes to government, right? so also the private sector, yes?- and had to cut somewhere to look like they were doing something. The extent of their cost cutting was to fight tooth and nail for a new contract with the cleaners. I can guarantee their “customers” will not see any savings, although again I can’t be more specific without risk. Their service will not- cannot- go down in price, but maybe some new manager can now be hired somewhere.
Much of what you’re saying here reads like a knee-jerk defense of the prerogatives of management- ideally, they wouldn’t have wanted to cut so many corners to save money, but the customers demanded it and it’s a better world as a result. This is nonsense for reasons that have to do with the sort of industry I’m in. If you want to email me, I can explain more, but I can promise you here that the savings they gain will translate only to higher salaries for a few administrators and zilch for customers. It might help you see my point too if you knew just how much of their budget comes from the government. We’re not talking about Walmart here.
I’m 40 years old with a PhD that job counselors tell me to leave off my resume because employers in this area won’t hire someone they think they have to pay very well and I work as a janitor and dishwasher because nobody else has ever called me back about a job. As much as I appreciate that libertarians- sorry if you’re not a libertarian, but you made the stock libertarian argument- think this is the best of all possible worlds and getting better all the time because we’re all customers and we can get cheap high quality goods, I am having trouble getting on board.Report
I would hope that is not the stock libertarian argument. Many here have discussed the detrimental effects of rents/rent seeking that have distorted markets and perpetuated inequality to unreasonable levels.Report
Fair enough. There is a libertarian theory in which inequality is increasing for that reason.Report
Any theory that purports to tell you why inequality is increasing is bunk, because inequality isn’t increasing. Global income inequality has been falling for decades.Report
And you shouldn’t complain about how much an MRI costs, because people in Africa can’t even get them.
And also, we’re better off than our parents because we have iPods. They could afford a house and college and health care, but we can have 5000 songs on one tiny device!
In totally unrelated news, this year’s on track to be the year where 1% of humanity owns 50% of everything. (Not kidding).Report
@morat20 You forgot to add that it is perfectly legitimate, on the other hand, to complain about onerous, oppressive taxation of the rich.Report
Turns out that Peter Singer’s drowning child is really easy to resolve if you’re getting lots of other people to go in after the kid.Report
inequality isn’t increasing.
I just did a Google search of popular and scholarly articles on this topic, and you seem to be in the minority, BB. I even found articles talking about rising income inequality in China. Plenty on rising inequality in the US.
???Report
My question though is why then, when I criticize one way that businesses negotiate with the labor market- one sort of business decision- and say that I think that way of doing business is stupid and short-sighted, do I pretty much expect someone will rush in like a jealous boyfriend to defend the honor of capitalism-as-such? I mean, I know that the consumer revolution improved our standard of living greatly. So what?
Talk about moving the goal posts. The fact that consumer capitalism was a large net gain for humankind doesn’t mean that all criticisms of business practices are somehow invalidated by that. And saying that a specific business practice is dumb, cheap, and will result in negative consequences down the road doesn’t undermine consumer capitalism, or if it did, capitalism would be so weak, it wouldn’t survive. As it is, people are bravely defending something that needs no defenders because it’s the dominant economic system in the world and appeals to the most basic demands of humankind. You might as well mount a philosophical defense of lust.
I mean, ultimately, I’m making what should be a really uncontroversial argument here: when you put people in charge of companies, some of them will, of their own accord, choose the cheaper way of doing things, and that can have very negative consequences down the road. And, when their competitors see them doing things in a cheaper way, they will copy those ways of doing things. So, there could be widespread negative consequences down the road. Yes, the upside is the customer gets a cheaper product. But, trust me, in the particular company where I work, the downside of all of this could be very, very bad. Again, we’re not cleaning Walmarts.Report
I feel ya Ruf. I don’t get it either. Good comment.Report
Rufus, obviously you have the benefit of familiarity with the details of the case. What you seem to be describing though is a firm engaged in some major internal changes. It the manager’s responsibility as stewards of investors to make these decisions. I have no idea if they are right or wrong in their strategic focus. For all I know they are total idiots. Time will tell.
I have disdain for bureaucratic bloat, rent seeking and inefficiency in all its shapes. I fought it all my working life (and in the end lost). I view it as a universal and cancerous tendency in all human social organizations.
Yes, adding fat to one part of the organization often requires cutting elsewhere to survive, and from an internal standpoint you can say there is a trade off between paying more for admin and for front line employees. The optimal strategy is of course to pay just enough for both to maximize returns. No company is ever optimal, and optimal is dynamic and ever changing. Those companies furthest from optimal lose market share and eventually fail. This is the ultimate check on bloat, inefficiency and rent seeking. Customer choice eventually penalizes it. Queue up monologue on creative destruction.
I would be interested in hearing more of the details. I will send an email.
“stock libertarian argument- think this is the best of all possible worlds and getting better all the time because we’re all customers and we can get cheap high quality goods, I am having trouble getting on board.”
Well it is getting better at a rate of approximately 2% per year every year for about two hundred and fifty years in prosperity and substantially faster than this when you add lifespan (double), leisure (almost double), health measures, freedom, opportunity, education and quality. It isn’t by any remote stretch of the imagination “the best of all possible worlds*. It is just better, in many reasonable people’s minds, than any other real alternatives fully considered. More importantly it is on a trajectory to continue to improve and the latest generation has, worldwide improved the fastest of any (with close to a billion out of severe poverty). So, not perfect — just better than real alternatives and getting better at a faster rate.
I get that there are casualties in creative destruction and the continuous uncertainty of market competition. Real casualties. It leads to things like lay offs, office closings, bankruptcy, fewer hours, and so on. I too have personally been burned many times.
The question though is what alternative you would choose. If we throw out competition and creative destruction and the harsh logic of consumer choice we ultimately trade off economic progress for security. I understand how people would choose to do so. People are rationally self interested and are often willing to harm the welfare of others and especially future generations for the well being of themselves and their families. Many logically defect in the prisoners dilemma, if allowed to.
I am simply pointing out the longer term consequences of doing so. I choose a world of long term prosperity and creative competition even if it implies more uncertainty and change. I hope to convince others as well, though arguments may never settle it.
Long term, growth trumps ideology. Free enterprise never really won people’s hearts and minds. The fact that those kind-of-practicing it were thirty times richer than those not practicing it at all did. The alternatives eventually just become irrelevant. **
*the modern breakthrough in human prosperity is not only a market-based breakthrough, but markets are a necessary part.
** I also support extensive social safety nets and education to counter or soften the harmful effects of dynamic change and creative destructionReport
Which sense of capitalism are we discussing?
https://www.youtube.com/watch?v=v6PO4i-3xmw
I hope jealous boyfriends are defending capitalism1. If they are defending 2 or 3, this is defending something else.Report
Rufus,
I agree managers can be stupid. I agree that if they are stupid and saving a penny to lose a pound, that they will be punished, and deservedly so.
The original post was about taking sides. My main point which has long since been lost is that the sides are between competing workers. To characterize the struggle as one between management and workers is simply incomplete. It is a struggle between current and potential workers with managers in the middle. The mistake is to reframe the issue in a way which ignores the third party.
That said, I strongly agree that employee organizations (including voluntary unions) are useful to represent the interests of current employees. I would even support the idea of an organization which represented the interests of prospective employees (these would often conflict strongly with current employees).Report
And an organization representing the interests of consumers.
The consumer advocate organizations I worked with (actually usually against) in the past were usually just fronts for anti-economic social reorganization. The stories I could tell on price controls, product restrictions and such back in Texas. Total cluster fish.Report
@citizen
I try to avoid the C word altogether. I prefer free enterprise. James H and the guy in the video make a case for “freed markets.” Which I agree is another good term.
I will add that I am no anarchist. Markets require rules and enforcement and I am fine with the government doing so sparingly/parsimoniously until such a time as someone can proof competing regulatory methods within that industry or market.Report
Roger,
This is a good discussion. I’m glad we’re having it!
I do see what you mean about the fight being between two groups of workers, but understand too that it’s also somewhat artificial. Management opened the issue by hiring a bunch of part-timers and having a salary cap for the last ten years on full timers, which got some of them to quit. So, they opened the fight and, from the start, backed one side. The customers won nothing tangible and might be negatively impacted. I can’t imagine they cared in the first place. In a sense, it was waged in their interest, but it’s just a minor drop in the bucket as far as they’re concerned.
I have disdain for bureaucratic bloat, rent seeking and inefficiency in all its shapes. I fought it all my working life (and in the end lost). I view it as a universal and cancerous tendency in all human social organizations.
Good! This is one of my key assumptions and I’m glad we agree.
The question though is what alternative you would choose. If we throw out competition and creative destruction and the harsh logic of consumer choice we ultimately trade off economic progress for security.
This is what I was saying is a false choice. I don’t think we have to throw off the economic system for another. I realize that the rest of them have shit the bed in a historical sense.
I think the key thing here is I see this as not an economic issue, but a cultural one. The solutions will be cultural ones. When I look at why my great-Uncle didn’t run his business in the way that, say, my 26 year old restaurant boss does, it’s primarily because he would have been fishing embarrassed to do so. The cultural ethos was that running a business that way made you a “vulgarian” (as my grandfather used to put it). The business culture changed. It did. And it was not forced to by some vague market forces. It was a shift from one way of thinking to another. Even if we say “the market” drove that change, markets are cultural products. Change our ethos- through many, many conversations like this- and the way things are done will change, and you will still have the same economic system, but in my opinion it will run better and more sensibly.
Honestly, I feel like opening the conversation and then asking do we want market capitalism or not is a bit like being in the middle of the ocean in a steamliner and someone says we’re not running the ship the right way and then we ask “So, should we swim? Build a raft?” No, we’re on the ship, it’s better to be on the ship, but we need to be more sensible in what we’re doing as individual crew members.Report
Good comments again, Rufus. Can I take a break and respond tomorrow? Can you keep comments open?Report
Comments typically close one week after the post goes live. You should be fine tomorrow.Report
@rufus-f
“Management opened the issue ….”
It is management’s job to decide the details of production — including job descriptions, pay grades and qualifications. It is also their job to make changes as they deem necessary. I am not defending mistakes, but that is their role in the game.
Incumbency isn’t privilege, and workers do not and in my opinion should not have property rights in employment unless agreed contractually from the start.
“Change our ethos- through many, many conversations like this- and the way things are done will change, and you will still have the same economic system, but in my opinion it will run better and more sensibly. ”
I agree in many ways. I will add that the ethos is often a byproduct of what is usual and customary in that age, and that as what is necessary to survive changes, so does the ethos. It goes both ways. What is necessary to survive and thrive today are different than in the good old days.
Before I retired I had already begun to switch hiring/staffing models. In the old days I would bring on a team of full time workers, usually promoted from within with a few outsiders added for fresh blood (always with care taken to have a diverse team by race and gender of course).
By the end, there were too many barriers and expenses and hassles in hiring or forming full time work teams (we conceived, created, built, tested and rolled out new products). Instead I contracted out for just about everybody. I found people with the skills I needed and they did the paperwork necessary to become am independent contractor (I am not even sure what this entails) and I brought them in on an as needed basis. Short term it was more expensive, but the flexibility was divine. I got the exactly right person for every job without the regulatory and bureaucratic nightmares from the government or even worse, from inside our own company (Human Resources, Finance, Procurement, etc).
I see companies doing similar things everywhere. They replace career employees with short timers, full time with part time, in sourcing with outsourcing, on shore with off, employees with vendors or contractors.
This is probably great for some people looking or qualified for this kind of work. But it isn’t what I was raised in, and it certainly has plenty of negative side effects in terms of uncertainty and work demands. The conditions and culture are changing.Report
@ Rufus
Inspect the life boats often, and stock them well.Report
Stillwater,
yeah, china got richer. therefore global inequality got better. local inequality got worse.Report
The winner was not management. They were ultimately representing the interests of less privileged workers and the customers who will gain from lower production costs. (Industry wide, the margins will revert toward the risk adjusted required rate of return, with market share and share of profits going to the management which anticipates and defends the customer’s interest best.
I repeat. The zero sum dynamic was between your coworkers and potential workers/customers. In this case the customers and less experienced workers won. And we are all potential customers, so we all won. Justice prevailed. Excess overhead unnecessary in the production of this good was eliminated. Prosperity increased.
There is a point where of marginal value here where so many of the laborers are participating in low-wage/part-time/no-benefit jobs that they no longer have the purchasing power to sustain economic activity, let alone to grow it. The economy is driven by consumer purchases, and when consumers cannot purchase because they don’t earn a living wage, at some point, the economy will begin shrinking.Report
@zic
It is a factor of marginal productivity of the larger market. Certainly if we all make little and produce little, then we will all be poor. The key is to make as much as possible as efficiently as possible. This efficiency applies to all costs of production including wages and return on capital.
You don’t become prosperous by arbitrarily paying more to workers, suppliers, managers, investors, middlemen etc. if we pay every one of them twenty times as much for the same service or input, we just raise the price of living by the same amount. If we pay some favored groups (let’s say employees and middlemen, but not anyone else) twenty times more and others the same, we would indeed create winners and losers, at the expense of economic efficiency. The result would be a smaller total pie and the favored groups gaining relatively at the expense of unfavored groups.
I suspect this would be a preferable world to you. I could be wrong though.Report
Appealing to the total size of the pie only works if the people you’re talking to can observe a relationship between the size of the pie and size of their slice.Report
What’s funny is you don’t think this, “If we pay some favored groups (let’s say employees and middlemen, but not anyone else) twenty times more and others the same, we would indeed create winners and losers, at the expense of economic efficiency,” is happening, only they’re not in evil unions, so it’s OK.Report
It isn’t ok for anyone. I am not picking sides. I am against rent seeking and privilege in all forms. This article was trying to defend it for unions. I stepped in. If you want to defend it for Druids, hockey players, talk show hosts, government contractors or harmonica players, I will disagree there too.Report
.”Appealing to the total size of the pie only works if the people you’re talking to can observe a relationship between the size of the pie and size of their slice.”
Which is why argumentation and logic have such a hard time in complex adaptive systems. See my point above. In the end, the debates in science and markets rarely ever are decided decisively. The losing side just slowly becomes irrelevant.Report
@roger I think you must misunderstood me. As i understand it, you’re a big believer in free markets and free trade, right? You think that these things are dramatically increasing human welfare in the developing world. Well while I would disagree that simple market forces are the only thing creating this effect, the fact remains that wage growth has flatlined or gone negative for most workers in the US and Europe since the late 1990’s boom. You can’t just tell these people that they are being paid the market efficient rate and expect them to be ok with it.
This suggests that Choice A is to accept their fate, keep getting tiny or zero returns from economic growth, and feel glad that peasants in China are able to move into factory jobs, while Choice B is to fight for and get some sort of rents at the expense of rich people in the US and the very poor elsewhere in the world. Do you really expect them to pick A? If you want free trade, open borders, low taxes and so forth, the long-term plan can’t just be to hope that the economic interests of working and middle class people in developed countries are completely ignored for the foreseeable future.Report
@don-zeko
First, I agree that markets are not the only thing increasing prosperity and welfare of humanity. Necessary, but not sufficient.
Second, I agree that living standards have gone up less in the past thirty years in developed nations than the historical trend (30 to 100% depending upon segment). I could attempt to explain why, but this may lead is off topic and is controversial to say the least.
Third, I don’t expect people hurt by creative destruction and market competition to “like it”. I never liked it. Who would? This is a continuous feature/bug of markets. When the guilds lost control of their cartels when markets expanded in the 18th century, they didn’t like it and neither did their families. When auto makers lost their jobs to Asian imports in the 70’s the workers who were laid off didn’t like it. When hardware technicians lost their jobs to Chinese outsourcing in the 2000’s they didn’t like it either. When my office closed for restructuring (3 times in my career) I was pissed.
“This suggests that Choice A is to accept their fate, keep getting tiny or zero returns from economic growth, and feel glad that peasants in China are able to move into factory jobs, while Choice B is to fight for and get some sort of rents at the expense of rich people in the US and the very poor elsewhere in the world. Do you really expect them to pick A?”
If people can resist change they will. It is in their selfish interest to resist change, preserve privilege and defect in a prisoners dilemma game. This is one of the most important truths of economic history in my opinion, possibly the most important. So, no I do not expect people to be utilitarians or altruistic. It would be better for all of us long term if we were, but we are not.
Remember, if we play zero sum games, everyone else playing the game will play that way too. Workers vs capital, bureaucrats vs producers, whites vs blacks, industry A vs industry B, US vs China, Texas vs Illinois, my family against yours. This is the primary reason IMO why there was no economic progress for ten thousand years. Everybody loses in zero sum games. What you get, once it takes off full speed is universal poverty, short lifespans and lots of wars. In other words, you get history up until the modern era.
The solution to the dilemma is to create institutions which accept creative destruction and constructive competition and get people to understand that the grand bargain is better on net than the alternative. If you want the medicine you have to accept the bitter taste that goes with it.
Still, as I said above, most people will be selfish and try to defect at the game of cooperation. But not all will, and some states, people, industries and such will prosper by being strong or smart or lucky.
Free markets never won the ideology contest and never will. They won only by making the alternatives irrelevant. When standards of living are ten or a hundred times higher, everyone just tries to be like the successful.
“If you want free trade, open borders, low taxes and so forth, the long-term plan can’t just be to hope that the economic interests of working and middle class people in developed countries are completely ignored for the foreseeable future.”
The short term advantage is always defection. The long term optimal is cooperation and fair play. And, no, I do not believe the average person will ever get this. Luckily they may not have to.
Btw, good discussionReport
Defecting from the prisoners dilemma when the prison is built around capitalism3 involves burning the jailhouse down and routing the guard.
The stability of the modern era is only due in part to the wardens clever attention in creating faction and illusion that capitalism1 is still in play.Report
!!!!REVOLUTION!!!!
Yeah, let’s burn this mutha down. I bet that turns out well.Report
It’s the way capitalism3 historically ends anyway, more whimpers than bangs.Report
@citizen
what are some good examples, Citizen?Report
Unions are the one thing standing in the way of wage deflation. If you’re making under $50k and you’re voting Republican, you’re cutting off your nose to spite your face.Report
I consider the ways of the gauchos as compared to the ranch hands in America, and I see that there is something definitely wrong with the way we see fit to do things.Report
@will-h
This went over my head. Not even sure if it was serious or a joke I just don’t get. What is the way of the gaucho, amigo?Report