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Flat Wages for the middle and working class - what to do?

Neomalthusian said:
I've managed through a strike, an actual strike is actually not effective for unions at all, or at best, it comes with major risks to both the public's perception of unions as well as to the union members' sentiment for their union. The employees often can scarcely afford to go without wages, which they must if they're striking, members often find it extremely embarrassing to have to go marching and holding signs, hence unions often fly in highly paid "business managers" to keep the troops marching and keep employees from sitting by idly and talking or, worse, just going home. Many employees would simply not strike were it not for fear of the union ordering them fired if they simply continue working in their job (this is only an issue in non-Right-To-Work states though).

Economic strikes allow the employer to find permanent replacements, hence unions avoid economic strikes and instead try to find excuses to call their economic strike an "unfair labor practice strike" so that employers are not allowed to find permanent replacements, but then what resolves the unfair labor practice? Oh, yeah, the state labor board's decision about whether one was actually committed, which can take weeks. Most employees can't easily go that long without pay. So it's really a self-defeating, self-sabotaging tactic to actually engage in a strike.

Unions don't even want to strike, because they know their members will quickly run out of steam, hate what they're having to do, and eventually turn against the union because it sucks so much ass to have to actually go through with it.

Striking is not a power. It's an empty threat, a humiliating charade, and a union vulnerability. More employers (especially public sector ones) should dig their heels in and dare unions to strike. It's awful for unions when they strike.
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The you should have no problems with unions. If you think all they have are empty threats why do you care? And yet you care very deeply. LOL
 
Neomalthusian said:
Buyers and sellers of anything never have "a level playing field." No matter what it is, there is zero way to ensure "a level playing field" when anything is bought or sold.



Sometimes companies need employees more than employees need them. Sometimes employees need jobs more than employers need those particular workers. The market for a particular type of labor is as variable as the market for any good or service. Sometimes it's competitive, sometimes there's a glut.



No one is "equals." Anywhere. You're just imagining a notion of equality because it makes you feel warm and fuzzy. When something is bought and sold, there is no way to create "equality" in the negotiation of its price.



So was the women's suffrage movement. Movements end. They end because laws are passed which prohibit the abuse.
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We can certainly make things more level than they are

Every company needs employees. Every single one

We can certainly give the worker more power which seems to terrify you

You want it to end. It certainly has not ended in Europe where the middle class does much better than here
 
vegas giants said:
It certainly has not ended in Europe where the middle class does much better than here
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For who? Youth unemployment in Europe is 20-50% and raising. Not to speak of youth underemployment, lack of buying power or growth opportunity.

Are there exceptions like Germany? Of course as their implementation of unions are better [a lot more integration, labour laws and a better education system] not to mention contain some counter balancing policies which are superior to our own. Our implementation is far from perfect.

Look at their growth rates compared to ours compared to incoming population / demographic shifts and trend it out. Look at the youth incomes and net-worth comparisons. It makes clear how its going to look 10 years from now. 20 years from now. 30 years from now. Forget the fact they just brought in a huge number of low-skilled high-risk foriegn workers to the mix.

In the end, more equality of a smaller and smaller pie with a growing political class with no private market to counter balance. Socialism 101.

Those high wages and benefits came at the cost of competitiveness,meritocracy, new jobs and innovation and the devloping world is and will continue to eat their lunch. And ours too if we don’t kick our economic problems in the budd.

The worse thing a society can do is artifically live rich, ran up the debt and leave worse conditions for their children. Europe has some great policies we can learn from but their overall philosophy is why they’ve been realtively fading out of relevance for a century. We need to forge a better road. Equality is a feeling. We need sustianability through using rational thinking!
 
Conaeolos said:
For who? Youth unemployment in Europe is 20-50% and raising. Not to speak of youth underemployment, lack of buying power or growth opportunity.

Are there exceptions like Germany? Of course as their implementation of unions are better [a lot more integration, labour laws and a better education system] not to mention contain some counter balancing policies which are superior to our own. Our implementation is far from perfect.

Look at their growth rates compared to ours compared to incoming population / demographic shifts and trend it out. Look at the youth incomes and net-worth comparisons. It makes clear how its going to look 10 years from now. 20 years from now. 30 years from now. Forget the fact they just brought in a huge number of low-skilled high-risk foriegn workers to the mix.

In the end, more equality of a smaller and smaller pie with a growing political class with no private market to counter balance. Socialism 101.

Those high wages and benefits came at the cost of competitiveness,meritocracy, new jobs and innovation and the devloping world is and will continue to eat their lunch. And ours too if we don’t kick our economic problems in the budd.

The worse thing a society can do is artifically live rich, ran up the debt and leave worse conditions for their children. Europe has some great policies we can learn from but their overall philosophy is why they’ve been realtively fading out of relevance for a century. We need to forge a better road. Equality is a feeling. We need sustianability through using rational thinking!
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The middle class as whole does much better in countries with strong unions. It also worked here in the US. We just need to get back to what works
 
vegas giants said:
The you should have no problems with unions. If you think all they have are empty threats why do you care? And yet you care very deeply. LOL
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My intolerance of unions goes way beyond striking, and has everything to do with how they operate when they're not striking. It was your claim that going on strike would restore some sort of power for unions. I explained why striking is actually often horrible for unions, practically an act of self-sabotage with the hail-mary prayer that the damage done to the employer will intimidate them into conceding the union's demands. There is a strong possibility that it won't, though, and thus most of the damage done by the union is to itself.

vegas giants said:
We can certainly make things more level than they are
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Your personal feelings (or anyone else's) about what constitutes "level" have no bearing on anything. Virtually everything you buy and sell with others is from a "playing field" that will never be "level." Buyers and sellers are never on "level playing fields."

Every company needs employees. Every single one
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Yes, and for people to be willing to be the company's employees, they require compensation for their services. It's the same way any other article of commerce functions. Buyers need sellers and sellers need buyers. But in order to execute a sale, both have to mutually agree to the terms. If they don't mutually agree, the sale does not occur.
 
Neomalthusian said:
My intolerance of unions goes way beyond striking, and has everything to do with how they operate when they're not striking. It was your claim that going on strike would restore some sort of power for unions. I explained why striking is actually often horrible for unions, practically an act of self-sabotage with the hail-mary prayer that the damage done to the employer will intimidate them into conceding the union's demands. There is a strong possibility that it won't, though, and thus most of the damage done by the union is to itself.



Your personal feelings (or anyone else's) about what constitutes "level" have no bearing on anything. Virtually everything you buy and sell with others is from a "playing field" that will never be "level." Buyers and sellers are never on "level playing fields."



Yes, and for people to be willing to be the company's employees, they require compensation for their services. It's the same way any other article of commerce functions. Buyers need sellers and sellers need buyers. But in order to execute a sale, both have to mutually agree to the terms. If they don't mutually agree, the sale does not occur.
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Well clearly if a union says to management we are thinking of going on strike negotiations start. They might never start without it. That is real power.

That is your opinion. We can make things more level between labor and management and we should. Unions are the answer to that

If one party has all the power...the terms are far less likely to be fair. All we want is a equal seat at the table. Ignore us at your own peril.
 
Conaeolos said:
Downward pressures compared to the past:
1. Full inclusion of woman to the workforce (increase supply of labour)
2. Automation increasing production power per employee (reducing needs of labour)
3. Foreign trade (eliminating many local industries)
4. Higher specialized training thresholds (can’t just train new employees limiting labour choice)
5. Increased population especially in skilled foreign labour (increase supply of labour)
6. Increase competition (pushing down prices and available customers)
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Well....

Women joining the workforce may be one reason, but might not. Among other things, they stopped joining the workforce around 2001, and wages have not risen since then.

Automation doesn't really hold down wages. What it does is eliminate jobs, while creating other higher-paying jobs.

Same with trade. E.g. in 2016 dollars, the US used to export $50 billion in goods to Mexico, and now exports over $225 billion. Even though we're importing more, and run a deficit, we're obviously exporting huge amounts to Mexico as well. Trade is ultimately beneficial to both parties.

That said, the lack of flexibility in the workforce is an issue. A displaced worker in the Rust Belt, who already has a mortgage and kids in school, cannot easily pack up and move to Montana because there's a fracking boom. So that's an issue.

Foreign workers aren't just competitors; they're also consumers. If the US makes stuff people want (like movies), foreigners will buy it.

What you left out is:

• CEOs and financial industry workers / speculators capturing the benefits of productivity gains

Yep. In 1950, the average ratio of CEO pay to employee pay was 20 to 1. In 1980, it was 42 to 1. Today, it's closer to 350 to 1.

Unfortunately, attempts to rectify this have occasionally backfired. E.g. the requirement to publish CEO pay did not discourage companies from paying big compensation, rather it set competitive benchmarks that CEOs used to demand higher pay.

Add in some tax cuts, and you end up with soaring economic and income inequality. This in turn has all sorts of knock-on effects, such as the wealthy being able to afford extensive higher education, social networks, travel, status and other advantages that are denied to most workers.


Upward pressures compared to the past:
1. Fast Rate of innovation (many new emerging industries and the rate only seems to be increasing)
2. Increase education have a more broder-minded labour force (adaptability in labour)
3. Availability of advance training (most people can be train in any speciality)
4. Opening of global markets (huge new consumer bases coming aboard)
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A better phrasing:

• Increased productivity (which usually benefits workers, but not anymore)
• Increase in rates of college education
• Incredible increases in purchasing power across the globe


My question is what do you see as the policies (left or right) which will start to see either wages raising or prices dropping to allow for a comfortable middle class?
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1) Increased taxes on the upper earners. We don't have to go completely crazy, but

2) Use those taxes mostly to fund better education (college and vocational) and medical care

3) Increase legal immigration, with an emphasis on skilled applicants

4) Review various international policies that have mitigated income inequality

5) Better and stronger free trade agreements

Unfortunately, I believe this will be very difficult to accomplish. The wealthy are just too entrenched, have so many resources, and are so easily able to bribe our elected officials, that making any policy changes will be very tough.

Similarly, changing the culture to make people less consumer-oriented, more willing to save, and willing to cut back on work hours is also difficult. Not impossible -- some Millennials seem to prefer experiences over stuff -- but not easy, and difficult to enact in a conscious manner.
 
Harshaw said:
It isn't the 1950s anymore. The economy is global. Labor will be, and is done, elsewhere when it gets too expensive here. Also, higher wages drive prices up, making products uncompetitive. Sorry, but that's the economic reality that no union can change.
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This flies in the face of the fact that corporations are generating and keeping more profits than ever. They ALREADY HAVE the money to pay their employees more, they simply choose not to.
 
Neomalthusian said:
LOL. The middle class in this country was never so strong as when women stayed home and blacks had few civil rights. Let's bring that back again and we'll be all set!

The economic boom of the 1950s and 1960s was not a result of unionism.
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Right, it was also the result of the need for laborers at a time when women and minorities were under-represented in the workforce, creating a shortage of labor vs. the amount of labor needed. Therefore the labor force had a stronger negotiating position.
 
Critter7r said:
This flies in the face of the fact that corporations are generating and keeping more profits than ever. They ALREADY HAVE the money to pay their employees more, they simply choose not to.
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Substantiate that, with all the math.
 
vegas giants said:
Well clearly if a union says to management we are thinking of going on strike negotiations start. They might never start without it. That is real power.
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Where are you getting this information? Strikes aren't even legal until negotiations and mediation have been done first to demonstrate impasse has been reached. Strike isn't what compels negotiation, strike is a last ditch effort after negotiation hasn't produced whatever unions demand.

That is your opinion. We can make things more level between labor and management and we should. Unions are the answer to that
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It's your opinion that some nebulous notion of "level" doesn't exist or should exist or can exist. Buyers and sellers never have had and never will have "negotiating equality" with one another, whether what's being sold is cabbage or smart phones or labor or a house or consulting services or any other good or service.
 
Visbek said:
What you left out is:

• CEOs and financial industry workers / speculators capturing the benefits of productivity gains
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I wouldn’t disagree with this at all. I wouldn’t say however that is not without it own reasons and upsides same as the other downward pressures listed.

Yep. In 1950, the average ratio of CEO pay to employee pay was 20 to 1. In 1980, it was 42 to 1. Today, it's closer to 350 to 1.
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How do you answer the counter claim argued elsewhere in this thread that: the impact of a CEO/executive compensation today is a lot more than that of an average employee generates in value and their wages difference can be accounted for more on an economical market basis more than manipulation. That is to say, a good/bad ceo often impacts market capitalization in the billions where as the average worker is barely bringing in more than their wage in many cases in terms of revenue. Something not true in 1950.

And thusly, equalization of these wages is making everyone poorer or making wages even more unreflected of “value generated” which would lead to worse outcomes and away from meritocracy and modren prosperity?

the wealthy being able to afford extensive higher education, social networks, travel, status and other advantages that are denied to most workers.
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I am curious where in you would put this advantage divide. Do you think it applies to the top 50%, 20%, the top 1% or 0.01%?

1) Increased taxes on the upper earners. We don't have to go completely crazy
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This is seeming inevitable. I just hope it used wisely.

2) Use those taxes mostly to fund better education (college and vocational) and medical care
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Is this where you seeing the higher buying power for average worker coming?

3) Increase legal immigration, with an emphasis on skilled applicants
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To grow the overall economy?

5) Better and stronger free trade agreements
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To lower prices? Making dollars go further?
 
Harshaw said:
It isn't the 1950s anymore. The economy is global. Labor will be, and is done, elsewhere when it gets too expensive here. Also, higher wages drive prices up, making products uncompetitive. Sorry, but that's the economic reality that no union can change.
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Its not too expensive to manufacture in America when the alternative is to be a banana repubic supplying raw materal to china while Americans are forced to work at walmart
 
Neomalthusian said:
Where are you getting this information? Strikes aren't even legal until negotiations and mediation have been done first to demonstrate impasse has been reached. Strike isn't what compels negotiation, strike is a last ditch effort after negotiation hasn't produced whatever unions demand.



It's your opinion that some nebulous notion of "level" doesn't exist or should exist or can exist. Buyers and sellers never have had and never will have "negotiating equality" with one another, whether what's being sold is cabbage or smart phones or labor or a house or consulting services or any other good or service.
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The threat of a strike at some point in the future is what makes talks happen.

You are entitled to your opinion. Unions help level the playing field. I know you want all the power....I just don't think you should.
 
Mac77 said:
Its not too expensive to manufacture in America when the alternative is to be a banana repubic supplying raw materal to china while Americans are forced to work at walmart
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OK, so lay out the plan.
 
Harshaw said:
You said that they could raise pay for all employees. This doesn't show that.
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Sure it does. If the companies have more after tax (and after payroll) profit, that means they have the ability to pay employees more.
 
Critter7r said:
Sure it does. If the companies have more after tax (and after payroll) profit, that means they have the ability to pay employees more.
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That's your assertion. Show the math as to what exactly they can do.
 
Critter7r said:
Corporate profits -up
https://robotonomics.files.wordpress.com/2013/12/us-corporate-profits.png?w=300&h=180

Wages - down
https://robotonomics.files.wordpress.com/2013/12/wages-to-gdp.png?w=300&h=224

GDP vs household income - diverging
https://upload.wikimedia.org/wikipedia/en/e/e2/US_GDP_per_capita_vs_median_household_income.png
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But aren't global incomes up. So if we are paying out higher domestic wages you'd be killing global capital investment? Basically holding down foreign labour wages to feed domestic and in the long term killing the growing consumer markets? Correct me where i went wrong.
 
Harshaw said:
:shrug: So you say. If they can, you should be able to show it.
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They have more net profit. So they have the ability to accept a lower profit margin and pay their employees higher wages. As you showed, it might not be much, but the ability is there. I feel like I'm talking to someone that says whistling is impossible unless I can teach them how to do it.
 
Critter7r said:
They have more net profit. So they have the ability to accept a lower profit margin and pay their employees higher wages. As you showed, it might not be much, but the ability is there. I feel like I'm talking to someone that says whistling is impossible unless I can teach them how to do it.
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So sorry you're unable to do what I asked, but, alas, that's your burden to bear.
 
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