The GM Strike is Going to Take a While

Avatar

Vikram Bath

Vikram Bath is the pseudonym of a former business school professor living in the United States with his wife, daughter, and dog. (Dog pictured.) His current interests include amateur philosophy of science, business, and economics. Tweet at him at @vikrambath1.

Related Post Roulette

91 Responses

  1. Avatar Philip H
    Ignored
    says:

    this is a more foundational battle – do unions actually have any power in the market anymore. A generation ago (possibly two) that question was considered settled in the union’s favor. Then St. Ronnie fired the Air traffic controllers and made it illegal for unionized federal employees to strike. Thats when directly misnamed “Right To Work” states arose, and began stripping union protections from others by offering lower wages that were essentially anti-competitive. Unions have continued to suffer.

    The UAW is drawing a big bright line, and they have a point – after American taxpayers bailed out the automakers, those same companies took their record profits and didn’t share them. There was no trickle down. Now thw UAW seeks to create one. And we should thank them for it.Report

    • Avatar Oscar Gordon in reply to Philip H
      Ignored
      says:

      That’s not entirely true, there was trickle down (GM has profit sharing, etc.). The union feels that the trickle down was not aligned with the profit made.

      And perhaps they have a point, but it’s hard to know since neither side has (AFAIK) released details of offers, counters, and the sticking points. All I’ve heard so far is what Vikram mentions, along with noise from GM that they are trying to plan for long term viability and want to invest more in electric vehicles, etc.

      Which is a valid desire from GM, but again, without knowing details, it’s hard to evaluate whether or not GM is going to be stretched for future investment if it offers the Union more.Report

    • Avatar Gabriel Conroy in reply to Philip H
      Ignored
      says:

      I think you’re chronology and some of your facts are a bit off. As I understand it, (most) federal employees either didn’t have the right to unionize or they did, but didn’t have the right to strike before Reagan came to office (I’m not sure which, but at any rate, strictly legally Reagan had the power to fire them, at least according to Daniel McCartin’s book “Collision Course”).

      Right-to-work laws long preceded Reagan’s administration. However, it wouldn’t surprise me if the Reagan Revolution helped inspire more states to choose right to work laws. I honestly don’t know the numbers of RTW states pre 1981 and post 1981, although I assume the number grew.Report

      • Avatar Philip H in reply to Gabriel Conroy
        Ignored
        says:

        Federal employees – I am one – can still join unions. IT has been illegal to strike since Reagan. It wasn’t illegal before but highly frowned on.Report

        • Avatar Gabriel Conroy in reply to Philip H
          Ignored
          says:

          Wikipedia* seems to disagree (as does McCartin): “the Statute [of 1978, before Reagan, that otherwise established the legal right to collective bargaining] does not grant this right to federal employees. In fact, the Statute specifically excludes from the definition of ’employee’ those persons who engage in a workplace strike. It specifies that it is an unfair labor practice for labor unions to call or participate in a strike or a work stoppage that interferes with the operation of a federal agency”

          To me, that suggests it was illegal, but perhaps not a crime, to strike. Of course, Wikipedia could be wrong.

          I was, of course, wrong when I said that federal employees don’t/didn’t have the right to organize or to bargain collectively, as apparently they did at least since 1978.

          * https://en.wikipedia.org/wiki/Federal_Service_Labor-Management_Relations_StatuteReport

          • Avatar gabriel conroy in reply to Gabriel Conroy
            Ignored
            says:

            By the way, now that it’s clear that I was at least a little (and possibly more than a little) wrong, I should go further and acknowledge that whatever the actual legal status of striking ca. 1980 vs. ca. 1989, Reagan’s firing of the air traffic controllers created a pretty strong precedent against collective action at the federal-employee level. So you’re not wrong about that.Report

  2. Avatar JoeSal
    Ignored
    says:

    The unmentioned:
    The US is typically in the top five of highest average wage countries.Report

    • Avatar Dark Matter in reply to JoeSal
      Ignored
      says:

      Include the micro-states (which is silly) and we’re #8. Exclude them and we’re #3 behind Switzerland and Norway.Report

      • Avatar JoeSal in reply to Dark Matter
        Ignored
        says:

        Hell, Even if you shifted the metric to The Top Ten, that still means 90% of the countries are worse off doing whatever it is they are doing.

        I have no doubts that since 70% of the people that are entering this country belong to the church of needs, we will eventually get stupid enough to be in that other 90%. Then the the tears will REALLY flow. Oh the outrage of not having enough of this or that!! How terrible, the sky is bound to fall at any minute!!

        Same outrage, different day.Report

    • Avatar Philip H in reply to JoeSal
      Ignored
      says:

      And yet we have a disproportionately high percentage of our working citizens who – thanks to market forces – can’t afford to eat, get transport to and from work, keep a decent roof over their heads, obtain decent medical care when needed, and save money to retire so as not to be an economic burden on our society.Report

      • Avatar JoeSal in reply to Philip H
        Ignored
        says:

        What we have is a significant portion of the country that is obese and still here you are yammering about enough to eat. People literally come to this country because even as a poor person you can find enough food to be fat.

        Anything medical, that is on you guys. The economics is so screwed up in the church of needs you couldn’t find your way out with a map, nor would yall concern yourself with it. Just keep offering free stuff, and watch the costs magically rise, and the wait times extend like it is some sort of weird mystery.

        There isn’t any economic problem in this economy that can’t be tracked back to a government construct or policy.Report

        • Avatar JoeSal in reply to JoeSal
          Ignored
          says:

          BTW where did that $850 million strike fund come from? If your welfare constructs are SO worried about hungry people, housing, healthcare and transportation, why isn’t this being afforded to every one else?

          It’s weird that there is a layer of priviledged above the priviledged. It’s like some jerks have been picking winners and losers and making the rest of us pay for it.Report

          • Avatar Philip H in reply to JoeSal
            Ignored
            says:

            As I understand it the strike fund comes from union dues which are invested and managed to produce a return. Much like pension funds used to be.Report

            • Avatar JoeSal in reply to Philip H
              Ignored
              says:

              And tell me Philip where do the funds for those dues come from?Report

              • Avatar JoeSal in reply to JoeSal
                Ignored
                says:

                Maybe it tracks all the way back to the price of a vehicle?Report

              • Avatar JoeSal in reply to JoeSal
                Ignored
                says:

                Here is a fun one, how many prices on how many vehicles had to be tinkered with to amass the potential for a $850 million dollar fund to exist?Report

              • Avatar Philip H in reply to JoeSal
                Ignored
                says:

                dues come from primarily from union members paychecks. in some states non-union members can be compelled to pay union dues since its assumed that unions collective action creates opportunities and rewards for non-union members.

                The only way that tracks back to car prices (and then only very indirectly) is in the part that employee compensation plays in the costs that car makers have to recover through sales to create profits.Report

              • Avatar JoeSal in reply to Philip H
                Ignored
                says:

                The bottom line is that the prices have risen to make the fund. There is not much argument that can be made outside of that.

                This affects the demand for things that have a elevated price as compared to something of equal quality that doesn’t have that higher price.

                This eventually makes it back to the velocity of money calculation in the relationship of demand to production. This won’t actually show in GDP loss because things that don’t get produced, don’t get sold and aren’t tracked. I think that is the macro effect I have been looking for, it’s easier to see in smaller models, but not in bigger ones.Report

              • Avatar JoeSal in reply to JoeSal
                Ignored
                says:

                This shows, the battle is being lost on two fronts, non-competitive wages, and non-competitive prices.Report

      • Avatar Dark Matter in reply to Philip H
        Ignored
        says:

        thanks to market forces – can’t afford to eat, get transport to and from work, keep a decent roof over their heads, obtain decent medical care when needed, and save money to retire so as not to be an economic burden on our society.

        Joe has it right, but let’s go into details.

        “obtain decent medical care”.

        Only because the definition of “decent” means “state of the art” and we have vast bureaucracy at war with each other. This country has a “market forces only” market for medicine for pets and it’s amazingly cheap.

        keep a decent roof over their heads

        My locality is fine because we don’t have the gov restricting housing too much via rent control, zoning, etc.

        save money to retire

        This is a “human” thing, not a “market forces” thing. Absurd numbers of people can’t save for the future and will spend every dollar they can get their hands on NOW, even to the point of spending future dollars. Double everyone’s income (which we’ve done) and this will still be a problem.Report

  3. Avatar Oscar Gordon
    Ignored
    says:

    From interviews I’ve heard, one of the sticking points is GMs use of long term temporary workers. People who are hired as temps and still working as temps 2, 3, or 4 years later.

    The union has a point that after a certain amount of time (IMHO, a total of 6+ months or work in a 12 month period), a temp worker should transition to FTE, or be let go.Report

    • Avatar Jaybird in reply to Oscar Gordon
      Ignored
      says:

      Everything old is new again.

      I’ll tell this story again. I got into a job as a temp at Global Conglomerate here in Colorado Springs and one of my awesome co-workers was talking about how his manager pulled him aside and told him that, yeah, he was going to get laid off *BUT* they were going to buy a PS2 for him and pay for his unemployment so he should just see it as a sabbatical of sorts and they were going to hire him back again when 3 months were over.Report

      • Avatar Oscar Gordon in reply to Jaybird
        Ignored
        says:

        I thought this sounded familiar…

        I don’t begrudge employers like GM using temp work to fill in, but at some point, the Master’s of the Universe need to fish or cut bait. Either your temporary demand is a permanent state of affairs, or you are just messing with your employees.Report

        • Avatar PD Shaw in reply to Oscar Gordon
          Ignored
          says:

          They’re saving healthcare cost and other benefits by having workers that aren’t employees. I used to work next door to an engineering firm whose chief work was supplying long-term temporary engineers to a major manufacture. A close relative just got hired as a member of the industrial design “team” at another major manufacture through a similar arrangement. I’m not pleased with that state of affairs, but it all makes me very ambivalent about strikes that seem to guarantee that the company makes off-setting moves like outsourcing more production to other countries. Are other UAW plants joining, or do workers from other companies see themselves as competitors?Report

          • Avatar Oscar Gordon in reply to PD Shaw
            Ignored
            says:

            For me, a lot of it comes down to employee expectations. If I work for a firm who supply long term engineers to companies as temporary workers, and I KNOW* that there is zero expectation that I will be hired on by the customer as an FTE, then I accept this and do the work asked of me under that paradigm.

            However, if I work for a firm (and I have worked for such a firm in the past), and the firm, and the customer, both make noise about hiring temps/contractors as FTEs, but never really do, or do so very infrequently, then someone is being very disingenuous to the employees.

            What I am hearing is that the latter is what is going on. I could be wrong (Unions and companies aren’t always honest regarding the details of such things).

            *This is my primary objection to treating Uber/Lyft drivers as regular employees under the law. Neither company was being dishonest regarding the nature of the work. You don’t get to sign up for the ‘Vinegar of the Month Club’ and then demand that the state pass a law making it the ‘Wine of the Month Club’.Report

            • Avatar PD Shaw in reply to Oscar Gordon
              Ignored
              says:

              Another possibility is that the UAW is only concerned with temporary workers now for fear of their leverage. AFAIK, the longest UAW strike was of CAT in the early 1980s, it lasted 207 days and ended not long after CAT started advertising for permanent replacement workers and got a lot of responses (the unemployment rate was in double-digits at the time). Temps would be good recruits for scabs since they are probably already working for less compensation.

              My main concern for my relation is if he doesn’t get asked to work for the actual company he is working for, and that provides some sort of stigma when he’s looking for other jobs. Right now, he’s just out of college, and he could gain some useful skills to work elsewhere if he’s not hired permanently.Report

              • Avatar Oscar Gordon in reply to PD Shaw
                Ignored
                says:

                It could just be the Union doesn’t like that temp workers aren’t in the Union, and they want them to be. And that’s fine, it’s a Union workplace, they have the right to complain about that.

                But if GM is using temp workers and stringing them along with empty promises of being hired on, that’s a shitty thing to do to people.Report

              • Avatar Dark Matter in reply to PD Shaw
                Ignored
                says:

                My main concern for my relation is if he doesn’t get asked to work for the actual company he is working for, and that provides some sort of stigma when he’s looking for other jobs.

                Have him put “Worked at Company X as a contractor” on his resume. I think the situation is common and commonly understood.Report

    • Avatar Dark Matter in reply to Oscar Gordon
      Ignored
      says:

      People who are hired as temps and still working as temps 2, 3, or 4 years later.

      I’ve been there. I did 13 years on a 3 month contract that was never renewed. I think I got paid more because of the “lack of security” so on the whole I was better off.Report

    • Avatar gabriel conroy in reply to Oscar Gordon
      Ignored
      says:

      I’m of two minds about this. The company, as companies are wont to do, appears from your description to be stringing temp workers along and declining to pay them good wages/benefits that they should be paying. The company shouldn’t be doing that, and it sucks.

      At the same time, though, I can imagine a temp work feeling ambivalent. I suspect they would really like to have the union job, with its benefits, wages, and protections. But if the union wins, that probably means at least some of the temp workers will lose their job, for the greater good of the bargaining unit. I say “probably” because I don’t really know, but I strongly suspect that dynamic holds.Report

    • Avatar Philip H in reply to Oscar Gordon
      Ignored
      says:

      There are already reports of scab temps being hired in behind the UAW workers at wages (at least in Texas) that are at or very slightly below local fast food workers, and with out tenure or benefits. That comes a day after GM stopped paying for the UAW workers medical insurance – which may be an illegal business practice, and is certainly designed to force the UAW to stop the strike. Of course when the strike is resolved, one has to wonder what happens to the scabs.Report

      • Avatar Dark Matter in reply to Philip H
        Ignored
        says:

        Of course when the strike is resolved, one has to wonder what happens to the scabs.

        I assume nothing happens to them. They’re temp workers, they move on. Presumably the union can’t insist they be killed.

        However it’s interesting that this can happen with the economy at full employment. It’s also interesting that people’s assumption is that temp workers are paid less than perm, my experience as a temp was I’d be paid more.

        There are already reports of scab temps being hired in behind the UAW workers at wages (at least in Texas) that are at or very slightly below local fast food workers…

        The mind boggles. I’d always assumed these jobs required a lot more skill than a fast food worker.Report

        • Avatar Chip Daniels in reply to Dark Matter
          Ignored
          says:

          Its almost like the whole point of technology is to reduce the level of human skill needed for a job.Report

          • Avatar Dark Matter in reply to Chip Daniels
            Ignored
            says:

            Its almost like the whole point of technology is to reduce the level of human skill needed for a job.

            I’d say it’s done the reverse, i.e. we need more education now days, not less. Mostly a High School education isn’t enough today.

            Which doesn’t mean I disagree about these jobs. Or maybe it’s just that the general level of education for the society as a whole has gotten so high that Fast Food and Auto jobs are on the same level.Report

            • Avatar Chip Daniels in reply to Dark Matter
              Ignored
              says:

              Fast food workers need to be more educated now than in past years?Report

              • Avatar Dark Matter in reply to Chip Daniels
                Ignored
                says:

                Fast food workers need to be more educated now than in past years?

                Are you claiming UAW jobs are the functional equiv of Fast Food?

                Ignore that I’ve admitted these jobs may have been dumbed down over the last few decades and that I encourage people to be educated so they don’t work fast food.

                We are indeed more educated than before. Everyone knows how to operate the basics of our technology, litterancy is better than a hundred years ago (which matters at the bottom of the education ladder), etc. Everyone is a walking publishing press because everyone has smart phones. Ergo McDonalds can put touch screens behind the counter, or even in front of it, and expect there won’t be a problem.

                So if GM’s jobs require you to know how to operate computerized equipment, well so do McDonalds.Report

              • Avatar Chip Daniels in reply to Dark Matter
                Ignored
                says:

                That’s just what everyone here has been saying, that fast food job skills are plummeting because technology does the hard parts, leaving a worker to just push “chezeburgee, chezeurgee chezeburgee”.

                So if the reports are true that autoworkers are being paid about the same, wouldn’t it stand to reason that the marketplace is signalling their job skills are worth the same?

                In fact, isn’t it the founding criticism of the Labor Theory of Value, that just because you have a college degree doesn’t mean your skills will be rewarded commensurately, but only what is demanded?

                So forget about the supercomputer in your pocket; what does the marketplace say about autoworker’s job skills?Report

              • Avatar Dark Matter in reply to Chip Daniels
                Ignored
                says:

                So if the reports are true that autoworkers are being paid about the same, wouldn’t it stand to reason that the marketplace is signalling their job skills are worth the same?

                Yes and No.

                Fast food lives with a yearly worker replacement rate of something like 100%. Autoworkers have to be a lot more reliable, dependable, functional, etc, but those are just quibbles.

                So forget about the supercomputer in your pocket; what does the marketplace say about autoworker’s job skills?

                They’re overpaid. At GM to the tune of AT LEAST $13/hour.

                A combo of technology and competition has lowered the level of their job in the overall rankings of society by a lot, i.e. from something like 60% (from the bottom) to something like 35% (this is a WAG).

                Obviously the Union can’t face that reality, thus there are serious problems and conflict, maybe to a level where the company goes bankrupt or whatever.

                Thing is, why is any of this bad for the country as a whole?Report

              • Avatar Oscar Gordon in reply to Dark Matter
                Ignored
                says:

                Keep in mind the source of the report of low replacement worker wages. It probably came from the Union, or someone sympathetic to the Union in order to make GM look bad and discourage potential replacement workers.Report

              • Avatar Chip Daniels in reply to Dark Matter
                Ignored
                says:

                Do you think it is just autoworkers whose job skills have been lowered?

                Whenever a new piece of technology comes out that makes it easier for you and me to do our job, doesn’t that just mean that it is easier for someone else to do our job?

                I suppose one could say that the declining value of human labor is more than offset by the declining cost of the goods we produce, but the evidence I’m seeing is that this isn’t a neat and uniform phenomenon , but something that happens in a random hit and miss fashion, where somethings get absurdly cheap while other things actually get more expensive.

                So we have this bizarre world where a homeless transient can afford a supercomputer and six pairs of shoes but not a roof over his head or medicine to save his life.Report

              • Avatar Oscar Gordon in reply to Chip Daniels
                Ignored
                says:

                Roofs and medicine, two things whose supply and markets are artificially manipulated through various mechanisms.Report

              • Avatar Chip Daniels in reply to Oscar Gordon
                Ignored
                says:

                To assert that cell phones are cheap because of market forces would be ridiculous.

                Likewise, to propose the existence of a market in which houses are as cheap as cell phones would be an extraordinary claim, and need some extraordinary evidence.

                Isn’t it more likely that cell phone technology has advanced much more rapidly than construction technology?Report

              • Avatar Oscar Gordon in reply to Chip Daniels
                Ignored
                says:

                You are the architect, so tell me, how much of the techniques and technologies of residential construction remain fixed because of regulatory and industry resistance?

                When I have time to do my tech briefs, I often have a link or two to new construction techniques and technologies that could greatly reduce the cost and time to construct a dwelling. How often do such things become widespread, and how often are they quietly pushed aside by entrenched interests who don’t want to go the way of the Iceman?Report

              • Avatar North in reply to Oscar Gordon
                Ignored
                says:

                To be fair housing costs is significantly a factor of location and without incredible leaps in transportation tech or space/time folding locations aren’t something we can make more of (and hideous political forces that transcend partisanship- NIMBYS- significantly impede our ability to optimize the locations we do have).Report

              • Avatar George Turner in reply to Oscar Gordon
                Ignored
                says:

                A major factor affecting house prices is that real estate is an investment, so in a way pushing a cheaper house is like saying you’ve figured out an innovative way to make dollar bills worth half as much.

                And on top of that, cities and planning commissions, who have to approve everything, are elected by homeowners who want to see their property values go up, not down. Existing homeowners would profit from skyrocketing prices, and there are more homeowners than home buyers. That’s far less of a problem in rural areas where there’s less bureaucracy and endless land owning options.Report

              • Avatar Chip Daniels in reply to Oscar Gordon
                Ignored
                says:

                If the theory is, “Entrenched interests and regulatory requirements have stifled building construction” then we should ask how the consumer electronics industry somehow escaped this fate.

                But maybe the comparison itself is wrong.

                Is there a consumer demand for cheap mass produced buildings?

                The Modernist architects of the 20th century certainly thought so; Walter Gropius asked why people wanted custom dwellings when they never would want a custom automobile.

                And a lot of post-war governments did approach construction like it could be mass produced cheaply.

                There was in fact a very favorable political climate for mass produced buildings then, and the suburbs are a good example where instead of regulation holding them back, the government actually subsidized mass building projects and warped and distorted the market in their favor.

                And the cost of buildings did come down to where a huge middle class could afford homes.

                But the takeaway lesson is just that- the market for buildings is itself a creation of government; It takes government to create the legal, financial, and physical infrastructure that buildings need.

                Over the past 40 years, government has taken a lot of aggressive steps to create such an infrastructure for consumer goods. The global network of trade is the result of government subsidy and support as much as market forces.

                Yet there hasn’t been a similar effort put towards making housing cheaper.Report

              • Avatar Oscar Gordon in reply to Chip Daniels
                Ignored
                says:

                As North and George suggest, most of the cost of housing is not related to production, but, as you also suggest, to government action, or inaction.Report

              • Avatar Oscar Gordon in reply to Chip Daniels
                Ignored
                says:

                My point is that advances in tech make things cheaper. Trade agreements and whatnot certainly contribute to price reductions as well, but I would argue that tech and volume production drive the bulk of the cost reduction.

                Housing and healthcare, on the other, both suffer from government action (often pushed by private interests protecting themselves) pushing costs up when they should be able to go down.Report

              • Avatar Chip Daniels in reply to Oscar Gordon
                Ignored
                says:

                Government action, or inaction, can make things cheap, or it can make things expensive.

                A government dedicated to making houses cheaper would both reduce its scope in areas such as restrictive zoning, and expand its reach, in terms of mortgage subsidies and infrastructure.

                And both of those are probably good ideas!

                But your point- that technology makes things cheaper is the one that should concern us.

                Because one of the ways it does that is by making human labor cheaper.

                And worse, not all labor everywhere by an equal amount; So we get a wildly unpredictable world where one area gets a drought while other areas are flooded.Report

              • Avatar George Turner in reply to Chip Daniels
                Ignored
                says:

                Perhaps cities can learn from Detroit, which figured out how to make homes sell for $1.Report

              • Avatar JoeSal in reply to Chip Daniels
                Ignored
                says:

                America is pretty high tech especially in production. So if your theory holds, we could completely shut the borders, cut off access to the cheapest labor markets in the world, and what we would supposedly see is labor getting cheaper.

                I would propose that constant shifting access to cheaper pools of labor is a much more significant parameter to cheapness of labor than technology.

                One of the better ideas is that eventually all pools of labor would reach some wage equilibrium. I really wished that could have happened by now, I’m not sure that is a possibility with nations that can’t keep their hands off the damn levers.Report

              • Avatar JoeSal in reply to JoeSal
                Ignored
                says:

                Let me also point out the unmentioned, the current tack has lifted a hell of a lot of people out of pretty grim levels of poverty.Report

              • Avatar Chip Daniels in reply to JoeSal
                Ignored
                says:

                The best analogy I’ve seen is that economies are like ecosystems. They are constantly striving towards equilibrium, but the forces that power them are constantly shifting.

                So even absent any intervention which you might see as excessive, technology will continue to make production less reliant upon human labor because thats what we want it to do.Report

              • Avatar JoeSal in reply to Chip Daniels
                Ignored
                says:

                That’s a word salad plus some.

                ‘forces that power them’, Is this some abstraction? This emplies some sort of ‘push’ system instead of a ‘pull’ system.

                This is like saying the sun forces photosynthesis on plants. It’s completely backwards, the plants need the sunlight to survive.

                You can block some of the sunlight to manipulate parameters(exercise of political power), but that isn’t a good situation for the plants.

                Even these auto workers would tell you the same about pull systems. Automation is a way to make your work more efficient and more competitive to that pull.

                It would be the same in rich countries, or in the poorest countries. If given the option to meet that pull with less effort most workers prefer less effort options.

                Let’s say a forklift is a type of automation. It makes one person able to do in a few minutes what it would take a dozen people to do over many hours.

                Would you assume workers would not choose a forklift compared to hauling boxes all day?

                Automation and technology are tools helping us to meet the pull demand.

                The equilibrium would have been much easier to achieve if we didn’t widen the differences in minimum wages over many decades.Report

              • Avatar JoeSal in reply to JoeSal
                Ignored
                says:

                [Implies, not emplies, my spelling is getting horrible, of course i never thought i would be commenting on a blog with any regularity]Report

              • Avatar Oscar Gordon in reply to JoeSal
                Ignored
                says:

                There is also the fact that in large part, automation eliminates difficult, dangerous, or repetitive work (that stresses and damages human bodies).

                So which is better, people getting hurt or killed, or machines getting damaged?

                I worry less about automation itself, than the fact that we have poor resources for people displaced by automation, and even worse attitudes about those displaced*.

                Automation has been around for a long time, and it isn’t going to stop, there is no good reason we don’t have robust social services for those displaced. I know some states do (WA for example, offers educational services and assistance to people laid off by employers in the state), but culturally it shouldn’t be a thing.

                *And the attitudes of those displaced are often just as bad, if not worse. How often do we have displaced workers refusing to accept any kind of training or educational assistance?Report

              • Avatar JoeSal in reply to Oscar Gordon
                Ignored
                says:

                Is true, I’m well aware of the harm of repetitive motion type work and more of what I hear from CEOs is that they want automation to avoid the legal costs of injuries.

                After public education and any other secondary education, I don’t at all blame workers for not going back into such schemes. The truth is they suck. Suck terribly.

                I don’t believe subsidizing non-production is the way to go either, there is a theory that says you get more of what you subsidize, and i think this is true.

                Worse yet, if you take from those whos virtue is to work and give to those that don’t, you are in affect using one’s virtue against themself which is a horrid evil in my opinion.

                And i don’t use that word evil in a light manner. Society using an individuals virtue against themself places a great many virtuous people against a society that would do that.

                I do wish for destruction of all societies that would engage in that activity, because they are the destroyers of what little virtue there is in productive people.

                Nearly no one in this country will admit what minimum wage has done. It is easier to subsidize non-productivity than to become competitive.

                And that is the real topic, automation coupled with the cheapest labor pools available, and absent the circling legal vultures.

                That is the competition, and this country isn’t capable of competing with it. This country isn’t even sustainable without trading with it. We just aren’t going to face it, talk about it, or even acknowledge it.

                What we will do is worship at the feet of political gods that tell us what we want to hear. The ones that will tell us anything but the hard truths we fear the most. The ones that promise but will never be able to deliver, and all the people who act so betrayed when the unsustainable isn’t sustained. At the end, that blank uncurious stare of the herd about the great mystery of where it all went wrong.Report

              • Avatar Dark Matter in reply to Chip Daniels
                Ignored
                says:

                Whenever a new piece of technology comes out that makes it easier for you and me to do our job, doesn’t that just mean that it is easier for someone else to do our job?

                Yes. Thus I’ve been fired multiple times over the decades.

                However, counter intuitively, this technology is a good thing because it’s an increase in productivity which is what ultimately drives wage increases. This increases the value of human labor, it doesn’t decrease it.

                When I’m being victimized by this sort of thing it’s time to find something else to do, i.e. to work smarter at something which is harder.

                not a roof over his head

                This is an issue with the local gov restricting supply, and not an issue with vast economic forces.

                a homeless transient can afford a supercomputer and six pairs of shoes but …medicine to save his life.

                Both of the life saving medicines I take cost about 4 pennies a day combined. It would have been state of the art in the 1970’s(?) A close relative would be a literal drooling idiot without his but his is also many decades old and thus almost free.

                If you can’t afford your meds then that’s because they’re too new, things get better and cheaper as time advances.

                …the evidence I’m seeing is that this isn’t a neat and uniform phenomenon…

                Yes. Which is why we need statistics and graphs to track what the system as a whole is doing. “What I’m seeing” is antidote, not evidence.

                Focus on the UAW and their relative decline and things suck. Being asked to reduce your pay by $13 is not fun.

                Which doesn’t change that even the UAW is better off from an absolute sense and society as a whole is absurdly better off.Report

              • Avatar Chip Daniels in reply to Dark Matter
                Ignored
                says:

                The underlying theory is that in equilibrium, even at lower wages, they will be better off because prices will all be lower as well.
                But that’s demonstrably not true as I pointed out with my examples.

                And the idea that houses and medical care could become as cheap as cell phones would require a massive and aggressive expansion of government, not a reduction of it.Report

              • Avatar Oscar Gordon in reply to Chip Daniels
                Ignored
                says:

                Do we really need to again list all the ways government makes housing and medicine more expensive?Report

              • Avatar Dark Matter in reply to Chip Daniels
                Ignored
                says:

                The underlying theory is that in equilibrium, even at lower wages, they will be better off because prices will all be lower as well.

                No, the underlying theory is that increasing productivity will increase wages.

                the idea that houses and medical care could become as cheap as cell phones would require a massive and aggressive expansion of government, not a reduction of it.

                My “medical care” is cheaper than a cell phone. On the way home today I bought a months supply of drug #1 for $0.27.

                This is an old drug, the capital costs in it’s creation are long since recovered. It’s just the cost to manufacture now days.

                Similarly, without San Fran using their zoning board to restrict housing to the top 15% for the last 40 years, they would have been covered with high rises. Those high rises would also have long since have recovered their capital costs from their creation. An “aggressive expansion of the government” is the source of San Fran’s problem.

                The most productive idea I’ve heard on how to deal with this kind of mess is using the federal government to prevent local governments from kneecapping local supply.

                This would not make housing as cheap as a cell phone, but it’d be enough.Report

              • Avatar North in reply to Dark Matter
                Ignored
                says:

                While I agree with your analysis generally Dark, when speaking of Cali’s housing disaster it is unfair to paint over the massive negative impact that Proposition 13 and its inbred family of associated rules and amendments had on housing supply. Proposition 13 was, of course, a republican invention.
                And looking globally the way that local NIMBYism was generally defeated was by having state or national level governments intervene and take zoning decisions out of the hands of local government. Again, not exactly a right wing position.

                No party or side has their hands clean when it comes to housing. NIMBYism and housing crisis are bipartisan.Report

              • Avatar Dark Matter in reply to North
                Ignored
                says:

                NIMBYism is bipartisan.

                Agreed.

                the massive negative impact that Proposition 13… had on housing supply

                Why is reducing property taxes (and by implication increasing sales tax and income taxes to compensate) going to reduce the supply of housing?Report

              • Avatar North in reply to Dark Matter
                Ignored
                says:

                Because it eliminates a major cost of sitting on property that is astronomically increasing in value. If you are able to pay taxes on your property as if it was worth 200k like it was in 1979 instead of the million or two dollar valuation it actually has it eliminates an major incentive to sell the property to a developer. It’s an incredible distortion.Report

              • Avatar Oscar Gordon in reply to North
                Ignored
                says:

                It’s actually an argument for more progressive property taxes, and/or for assessing taxes from the most recent sale price, rather than some assessed value formula.

                If you know that paying $500K for a $300K house means you will pay taxes on the $500K value, you won’t be so eager to offer $500K.Report

              • Avatar aaron david in reply to North
                Ignored
                says:

                North, re; Prop 13

                “A 2016 report from the California Legislative Analyst’s Office found that property tax revenue to local governments was similarly volatile before and after the passage of Proposition 13. While Proposition 13 stabilized the base, governments would adjust the rate annually to counteract changes to the base prior to Proposition 13.”
                And:
                “According to the California Building Industry Association, construction of a median priced house results in a slight positive fiscal impact, as opposed to the position that housing does not “pay its own way”. The trade association argues that this is because new homes are assessed at the value when they are first sold.[30] Additionally, due to the higher cost of new homes, the trade association claims that new residents are more affluent and may provide more sales tax revenues and use less social services of the host community.” There are numerous further examples.

                I know Prop 13 is often used by the left as a whipping boy, but it was enacted for a very real reason (CA taxes were out of line with the national average) and while there have been some adverse effects, there have been just as many positive effects. Wikipedia has a surprisingly good piece on the whole thing.
                https://en.wikipedia.org/wiki/1978_California_Proposition_13Report

              • Avatar North in reply to aaron david
                Ignored
                says:

                Yeah and rightly so; from your own article:
                “Sales disincentives, higher housing costs
                Proposition 13 alters the balance of the housing market because it provides disincentives for selling property, in favor of remaining at the current property and modifying or transferring to family members to avoid a new, higher property tax assessment.[34] More detailed evidence of this is provided in the book Property Taxes and Tax Revolts: The Legacy of Proposition 13.[35]”Report

              • Avatar aaron david in reply to North
                Ignored
                says:

                Sometimes you gotta take the good with the bad. I see that it is still favored by likely voters at 67%.Report

              • Avatar North in reply to aaron david
                Ignored
                says:

                Perhaps so, but it doesn’t change the fact that the housing crisis in California is bipartisan and Prop 13 is a major element in it (as is local zoning NIMBYism and a lot of antidevelopment kook environmentalism). I’m not at all surprised that it’s popular with likely voters: home owners vote more often and Cali’s current system is spectacular for you- IF you own property in California.Report

              • Avatar Chip Daniels in reply to Dark Matter
                Ignored
                says:

                Sure, boner pills are cheap, but real medical care, like a night in the hospital and chemotherapy is and will continue to be very expensive.

                And yes, an aggressive top-down coercive regime of blocking local land use rules is a good idea (even if I express it in snarky fashion).

                But overall, there isn’t any plausible scenario by which autoworkers who make slightly more than minimum wage will ever be able to afford a house like their fathers did.

                Because their wages are not scaled to match rents in Charlotte or Atlanta, they are scaled to match rents in Bangalore and Shenzen.Report

              • Avatar North in reply to Chip Daniels
                Ignored
                says:

                Uh yeah, but a night in the hospital used to be capable of dealing with a much much narrower range of medical issues and Chemotherapy used to kill and not your cancer a lot more and at one time was “huh, what’s that?”

                And this elides that fact that the standard the you are comparing the present to was a historical aberration that isn’t likely to be repeated- unless we’re rooting for a world war that flattens most of the worlds economies outside of the US (I’m not).Report

              • Avatar Chip Daniels in reply to North
                Ignored
                says:

                Assuming you’re right, isn’t that a devastating comment on things?

                I mean, there are two futures I can foresee- One where we have a truly post-scarcity economy where the machines do all the work, everyone shares in the rich bounty and all we need to is say “Earl Gary, hot” to make it so.

                Or the other where the machines do all the work but the bounty is hoarded by a privileged few while the rest of us beg for scraps.Report

              • Avatar North in reply to Chip Daniels
                Ignored
                says:

                Maybe, but only if one constrains ones scope to a narrow slice of the world that was industrialized first. If you look at it globally the poor have never had it better. Which presents a political challenge, because politics aren’t global-they’re national.

                As for your two futures; as I have found in dungeon mastering; the end states are easy to imagine and fun to think about, it’s the steps in between that are where all the complexity and work rests.

                GM’s management is behaving with no humility or collaboration at all towards the UAW and ignoring entirely that it was a government bailout and restructuring that got them to where they are now- not managerial excellence. And if they don’t wise up they’re gonna destroy GM again.

                But the UAW is operating with no longer time horizon and is treating GM’s current state as just something to pillage for their current members. If they don’t wise up they’re gonna kill the company and then where’re they gonna work?

                But considering the adversarial history between the two I’m not sure how they can get to a better relationship. Maybe forcing the UAW to take an ownership stake in GM?Report

              • Avatar Oscar Gordon in reply to North
                Ignored
                says:

                I have a running thought experiment in my head about how I would manage manufacturing employees.

                I’ve mentioned before that I want to build a WIG (Wing-In-Ground Effect), and I toy with the idea that people would see me flying it around the Sound, and ask me to build one for them, and it would be worth doing it as a business.

                And how would I manage a workforce of skilled technicians to build these craft such that the IAM could never get a foothold, because no one wants them?

                I think I would start by giving all employees an ownership stake. Make it a closely held company and issue shares to all employees. Enough shares that the employees could, if they voted as a bloc, over-ride executive decisions.

                I’d also be as open and honest as possible regarding the cash flow and reserves and long term plans, so employees would feel engaged, and invested in the future.

                Maybe do something like create an employee association (an internal Union, as it were), and leave pay and benefits up to the association, with my only action being to hand them a big chunk of money every month (e.g. Here’s the agreed upon $2M for employee compensation, you guys figure out how to divvy it up amongst yourselves, how to pay for benefits, etc…). That way negotiations are simple. How much more do they want every month? Here’s the cash flow and reserves. Here are the projected costs for the long term plans everyone agreed to support. Is the extra money in there?

                Stuff like that.Report

              • Avatar North in reply to Oscar Gordon
                Ignored
                says:

                Yes, that certainly tracks with my own off the cuff thoughts on how GM would have to restructure to try and get over their poisonous history with their workers. It wouldn’t be easy and it would neither be as stingy to the employees and their union as management would like nor as generous as the employees would prefer.Report

              • Avatar Dark Matter in reply to North
                Ignored
                says:

                From many decades of watching this dance with multiple partners, afaict anyone who needs to deal with the UAW instantly becomes a knuckle dragging idiot, even if they have a history of competence in other situations elsewhere.

                I also think within the margin of error there’s room to think GM’s management is doing this fairly smartly. They’re already paying $13/hour more than their non-union competitors, we’re headed for a recession, and their cash flow is nuts. They’re paying many dozens of Billions to try to stand up electric cars. They also have too much production as it is.

                Unfortunately I’m not sure how much room GM has for “humility or collaboration” with the union in this situation. Getting the union to understand GM needs more give backs and less union labor seems like a hard sell.Report

              • Avatar Dark Matter in reply to Chip Daniels
                Ignored
                says:

                (a future) economy where the machines do all the work

                Not going to happen. Guys are genetically programmed to distinguish ourselves to impress the ladies. Ladies have a lot of the same genes as the guys. This is a core drive and our species is well served by it rather than valuing the length of tail feathers or whatever.

                There are lots of fields to distinguish ourselves in (janitor by day, black belt by night), but leadership, money, job creation, innovation, etc are fields that are difficult to picture being removed by technology.

                Even in a world where people don’t have to work (and we’re already there) there will be social/legal pressure to do so.

                One where we have a truly post-scarcity economy where… everyone shares in the rich bounty and all we need to is say “Earl Gary, hot” to make it so.

                Put any absolute metric on that and we’ll get there.
                Put any relative metric on that and we’ll never get there.

                Just having everyone get enough salt/food/water is an amazing accomplishment by historical standards and the diseases we trivially treat (or exterminate) would put us into “god” territory. Our bottom 10% is better off than history’s upper 1% if you move far enough back in time. A century ago we had a sitting President’s son die from a blister on his foot because that was the state of medicine.

                We could make Star Trek’s society work with our current level of technology if our people behaved like they do. Put real people in Star Trek and they’d be complaining about how not everyone gets to command a starship (or even own a runabout), and the people that work would be passing laws to punish the people that don’t, etc. Star Trek’s big advantage isn’t the replicators (we have mass manufacturing and mass transportation), it’s that everyone is satisfied with what they have.Report

              • Avatar Oscar Gordon in reply to Chip Daniels
                Ignored
                says:

                Let’s keep in mind that, AFAIK, replacement workers being paid minimum wage is a rumor.Report

              • Avatar Dark Matter in reply to Chip Daniels
                Ignored
                says:

                Sure, boner pills are cheap,

                Cheap not because they’re trivial, but because they’re old. I can remember people getting spun up on how expensive they were when they first came out.

                a night in the hospital and chemotherapy is and will continue to be very expensive.

                My expectation is in 50 years current-chemo will be a lot cheaper.

                But overall, there isn’t any plausible scenario by which autoworkers who make slightly more than minimum wage will ever be able to afford a house like their fathers did.

                Not in San Francisco, but that’s just saying they’ll never be in the top X percent.

                In Michigan $40k a year plus overtime (median wage for auto workers hired after 2007 according to Google) is well within “can buy a house” territory for most areas.

                Math time.
                $150k house (starter home), $30k down so $120k loan. Interest rates are 3.92% (30 year fixed).
                Monthly payment is: $567 ($6,804/year).
                Assuming no overtime, that’s 17% of income.

                Good practices say to keep your mortgage below 36%(*) of income so not only does this work but we could double the price of the house and we’d still be fine. You can buy a LOT of house for $300k in Michigan. That’s “3-4 bedrooms and wooded back yard plus really good school” territory. I’ve seen these homes for sale and go to open houses occasionally.

                Now I assume in San Fran they’d be millions of dollars but that’s a different problem, a different market, and a very different cost of living.

                (*) Lots of quibbles here. First that’s “all debt” and not just mortgage. Second 28% would be better. Having said that, hired before 2007 implies an age of 30 or less, so it might be reasonable to take the larger house and hope your income rises over the next few years.

                And yes, an aggressive top-down coercive regime of blocking local land use rules is a good idea (even if I express it in snarky fashion).

                Good.

                Because their wages are not scaled to match rents in Charlotte or Atlanta, they are scaled to match rents in Bangalore and Shenzen.

                This is untrue. Free Trade is about comparative advantages (i.e. maximizing productivity within a country) and not absolute wage advantages. That’s counter intuitive but whatever.Report

              • Avatar Oscar Gordon in reply to Dark Matter
                Ignored
                says:

                Regarding expensive older medicines, whenever you hear a story like EpiPens or PharmaBro, it’s important to keep in mind that such is not possible without government granting monopolies through one method or another.Report

              • Avatar Chip Daniels in reply to Dark Matter
                Ignored
                says:

                Of course wages have to match those in China- that’s the whole point of outsourcing, that you can take advantage of the lower cost of living in the Third World, but sell your goods to First Worlders who earn much more.

                It also demonstrates why auto companies prefer to relocate to Alabama, where the median wage for a factory worker is around $9/hr but acording to Fox News, the minimum living wage is around $60K

                https://www.foxbusiness.com/personal-finance/the-average-living-wage-you-need-to-comfortably-live-in-all-50-statesReport

              • Avatar Dark Matter in reply to Chip Daniels
                Ignored
                says:

                Of course wages have to match those in China- that’s the whole point of outsourcing, that you can take advantage of the lower cost of living in the Third World, but sell your goods to First Worlders who earn much more.

                Yes and no. Outsourcing also has serious costs and risks. We can’t hire a dollar-a-day guy in Africa to do anything useful because at that cost he’s not going to have access to a working power grid/legal system, he probably won’t have useful skills and so forth.

                My Real World experience in the last 7 years dealing with Indian engineers is that while they’re as good as Americans, their situation is a lot less stable. Hiring a guy, training him, and then losing him has been the repeated story of my project. That’s over and above non-trivial issues with keeping the team unified and on task when we’re this many time zones apart.

                …the minimum living wage is around $60K

                “Minimum living wage” needs a heck of a lot more definition if we’re going to use it as a measurement.

                When I look for my local area in that list I see $68k. That seems very, VERY ABSURDLY high. They may have simply taken the median family household income and decided all jobs should be above average.Report

              • Avatar Dark Matter in reply to Dark Matter
                Ignored
                says:

                At a handwave there are 2k working hours in a year so a $15 minimum wage per hour becomes 30k a year.

                So that link is suggesting the minimum living wage in California be $50/hour. Merge that with “all jobs should be living wage jobs” (which is probably the same movement) and I think you’ll have issues.Report

      • Avatar gabriel conroy in reply to Philip H
        Ignored
        says:

        For what it’s worth, I decline to use the terminology “scab.” My working hypothesis is that those who cross the picket line are almost always more disadvantaged than the workers they’re replacing. Or, if they’re employees and part of the bargaining unit, then they often have pretty good reasons for crossing. While I’m sure there are ideologues among their number, I strongly suspect that “screw over the strikers” is usually not their primary motivation.

        My position vis-a-vis the use of such derogatory terms as “scab” does not necessarily imply that unions are wrong to strike. I admit that I have become more and more skeptical of how, whether, and for whom unions are beneficial or just. However, I believe one can support them and support strikes without resorting to dehumanizing those who cross picket lines. One can say it’s wrong to cross picket lines and one can point out and elaborate on the claim that those who cross picket lines damage the interests of workers everywhere….and maybe “one” would be right. I might disagree, but even the wise cannot see all things, and I don’t consider myself wise.Report

        • Avatar Jaybird in reply to gabriel conroy
          Ignored
          says:

          Safeway here in town (and, I presume, nationwide) had a strike in the 90’s and everybody I knew, from my Mom to the folks I worked with at my IT job, told me to not shop at Safeway. Wait until the strike is over and *THEN* go back there, they told me. I shrugged and went to King Soopers.

          In the early oughts, they struck again. Nobody told me to not shop there.

          We felt solidarity with Safeway in the 90’s.
          We didn’t in the oughts.Report

          • Avatar gabriel conroy in reply to Jaybird
            Ignored
            says:

            I grew up in the town about 2 hours north from you, and if memory serves, there was a strike at BOTH Safeway and King Soopers, every three years in the 1980s and 1990s (and maybe early 2000s?….that’s about when I left). My father was adamant that we not patronize those stores during the strikes, which usually lasted about a week.

            At the same time, those were considered good jobs and very hard to get. The fact that they were union jobs probably played a big role in both of those factors: they were good in part because of the union, but it was hard to get a job there, also in part because of the union. So the “scabs,” so called, were (probably, again this is a working hypothesis of mine) less well off and eager to get a job. Maybe some got to stay on after the strike. More likely, they probably got fired. And during the strike, it wouldn’t surprise me if they got, from some union supporters, a lot of “threats that probably aren’t serious enough to be legally considered threats but that put the ‘scab’ in fear for their safety.” That’s why I don’t like to use the word “scab.” They’re usually the collateral damage in these situations. Of course, the calculus changes when the union is broken and the ‘scabs,” so called, become permanent workers. Even so, they’re human beings.

            Now, I would probably honor a strike at my Big City grocery store, and my general predisposition is to decline to cross picket lines. I used to follow that predisposition out of a sense of solidarity. Now I do so out of a sense of “not wanting to create ill will,” or a sense of “if others strike, they probably have a reason,” or a sense of “I have a lot of options available to me personally when it comes to shops I patronize, so I might as well do those for the time being.”

            The members of my own bargaining unit at my workplace, about 6 months ago, was set to go on strike. I strongly disagreed (and disagree) with the union over whether a strike was justified or well-advised. If they had struck, I probably would have wanted to cross the picket lines, but I probably also would have honored the picket lines and not crossed. In part, that’s because of the coercion inherent from union supporters and their might makes right mentality.* But in part, it’s because I didn’t want to go against my colleagues’ sincerely held (even if in my opinion very mistaken) beliefs.

            *Not that anyone ever said or says “might makes right.” But strikes, taken to their logical conclusion, are premised on using the strength (“might”) of worker solidarity to gain their ends from their employer. The fact that employers do the same thing and more viciously, doesn’t mean that unions don’t also do it.Report

            • Avatar gabriel conroy in reply to gabriel conroy
              Ignored
              says:

              I shouldn’t say what I just said without adding the following:

              I’m in very favorable circumstances right now and would be even without my union. In fact–and taking the union completely out of the picture–my circumstances are good for me in no small part thanks to a system that in my considered opinion is based on exploiting others. Even though I’m very skeptical of unions and even though I focus more on the harms they cause than the good, I should be chary of criticizing them without acknowledging the very big advantages I enjoy. My own advantages come at costs to society that are arguably greater than the costs imposed by unions.Report

Leave a Reply

Your email address will not be published. Required fields are marked *