Editore"s Note
Tilting at Windmills

Email Newsletter icon, E-mail Newsletter icon, Email List icon, E-mail List icon Sign up for Free News & Updates

August 31, 2007
By: Kevin Drum

WHY UNIONS MATTER....Mark Thoma hosts a conversation over at Economist's View today. First, Stephen Gordon writes about the effect of unions on income inequality:

It's hard to conclude from this chart that union density matters much when it comes to reducing inequality. For example, look at Germany (where unions play a crucial role in setting wages) and the US (where they are decidedly less important): both have identical levels of inequality of market income. The distribution of disposable income [i.e., income after taxes and government benefits] is lower in Germany because of its redistributive policies, not because unions are more powerful.

Commenter Anne is aghast:

Rubbish, complete rubbish. Unions in Germany are both a reflection of social-economic attitudes and reinforce those attitudes. Unions have been continually and successfully active politically in Germany, continually shaping policy.

"Rubbish" is a little harsh — and as another commenter says, the data here is a little tricky because reunification probably increased German income inequality after 1989 for reasons unrelated to unionization. (If you look only at the former West Germany, inequality in market income is probably lower than in the U.S.) Still, Anne makes a good point: the bulk of the evidence suggests that unionization raises wages modestly, but not immensely. However, if you're interested in government policies that actively favor the working and middle classes, you need to have some kind of substantial political interest group fighting on their side. That's Politics 101, and right now unions are pretty much all we've got. They aren't perfect, and they frequently act only in their own narrow self-interest, but without them there's no organized opposition to the agenda of corporations and the rich. Warts and all, they're worth supporting until something better comes along.

Kevin Drum 1:42 PM Permalink | Trackbacks | Comments (55)

Bookmark and Share
 
Comments

I've spent quite a bit of time in Germany. Anyone who says that the inequality there is not due to re-unification is just being dishonest.

Posted by: Gore/Edwards 08 on August 31, 2007 at 1:47 PM | PERMALINK

"Still, Anne makes a good point: the bulk of the evidence suggests that unionization raises wages modestly, but not immensely."

Um, when did Anne make that point? Not in the statement you provided. And if "rubbish" is a bit harsh, what is "complete rubbish"? Anne doesn't respond to Gordon' statement at all. And "the bulk of the evidence suggests" is a tepid statement to say the least.

We need an NLRB, and new laws, that will protect the right to unionize. But a unionized Wal-Mart (which would be nice to see) won't bring back the good old days, for the simple fact that today is much better than the good old days ever were.

Posted by: Alan Vanneman on August 31, 2007 at 2:03 PM | PERMALINK

What "Gore/Edwards 08" said. There is no "probably" about it. This is just more use of the "hidden variable" sleight of hand like with the GWB admin claiming that Iraq deaths are down.

Posted by: Disputo on August 31, 2007 at 2:04 PM | PERMALINK

you need to have some kind of substantial political interest group fighting on their side...and right now unions are pretty much all we've got.

Why is it that narrow self-interested unions are all we have to fight against the huge amounts of accumulated capital that threaten our Republic?

The acceptance of a political duopoly to serve as both party in power and opposition by progressives, liberals and moderates may have something to do with the fact America has such a feeble ability to resist the power of so much capital accumulated by so few. Accepting the choice between Cheney and Cheneylite as being the only one realistically available, confines our political discourse to whether taxes should be low or lower.

Posted by: Brojo on August 31, 2007 at 2:08 PM | PERMALINK

I'm not too clear on how unions operate in Germany now, but historically there are two points I recall being very significant.

1. the strength of the union movement, which became a lifestyle, with many social benefits like health clubs, etc., and which is much more tied to a political party than is true in the United States.

2. the concept that management and workers should not be antagonistic, but should work together --- a different dynamic than in countries like the United States.

I don't think a straight comparison of US unions with German unions can work.

Just a few months ago I was looking at figures to try to determine if any countries other than the US had grown a similar gap between the rich and the poor, and while Europeans had increased their gap, it wasn't anything like what we've seen in the United States. Neither were the CEOs getting the kinds of deals they get here. So I'm having some trouble figuring out where your figures come from.

Posted by: catherineD on August 31, 2007 at 2:19 PM | PERMALINK

What Brojo said.
There hasn't been a real left in this country for decades, as witnessed by the fact that radio personalities and other commentators can label any of the "mainstream" Democratic contenders as extreme left-wingers and not have people laugh at them.

Posted by: thersites on August 31, 2007 at 2:22 PM | PERMALINK

. . . the data here is a little tricky because reunification probably increased German income inequality after 1989 for reasons unrelated to unionization.

Not "probably." The "old" E. Germany became something of a China or Mexico for manufacturing firms based in the "old" W. Germany.

Posted by: JeffII on August 31, 2007 at 2:26 PM | PERMALINK

So I'm having some trouble figuring out where your figures come from.

My first blush impression of the gini index is that it's a pretty crude metric for inequalities in income distribution. A high gini index does not necessarily imply that the very highest levels of income tend to have a huge proportion of the wealth, only that some groups -- e.g., people in the former East Germany -- don't get anything near their proportionate share.

Posted by: frankly0 on August 31, 2007 at 2:28 PM | PERMALINK

Anne means well, she just gets a little carried away with just about every post.

To put this in context, a couple of issues:

US employers do not hire legal counsel to tell them how to legally oppose unions, US employers hire legal counsel to tell them how much they can cheat and get away with it (I've been in some of those meetings). The lawyers are happy to oblige. Since the NLRB is toothless this creates a massive tilt toward management.

Since unions traditionally drew much of their strength from manufacturing and construction, and we are shipping the manufacturing jobs overseas and giving the construction jobs to illegals little wonder the influence is waning.

On the opposite side of the coin, some union leaders still think this is 1965.

Posted by: save_the_rustbelt on August 31, 2007 at 2:45 PM | PERMALINK

Brojo: "Why is it that narrow self-interested unions are all we have to fight against the huge amounts of accumulated capital that threaten our Republic?"

Because humanity as a whole consists of narrow self-interested individuals.

I won't disagree with you that political duopolies don't necessarily represent the best interests of working people. But are you offering a viable alternative to unions as a means to organize opposition to Big Capital?

Speaking as someone who cut his teeth in tradirional grassroots politics to combat proposed development of the last open coastline in East Oahu, I can assure you that organizing people in opposition to the prevailing status quo is far easier said than done, no matter how noble the cause.

Quite often, the immediacy or urgency of a given situation is such that you don't have the luxury of time to re-invent the wheel, and you must avail yourself of organizations already in existence if you are to be successful.

Posted by: Donald from Hawaii on August 31, 2007 at 2:46 PM | PERMALINK

Hmm. Isn't "Economist slags unions" up there with "Dog bites man"?

Posted by: Chris on August 31, 2007 at 2:48 PM | PERMALINK

There's also a social-solidarity argument, one that might be hard to quantify, but worth considering.

Here, you are what you earn, and if that isn't much, you aren't worth much, and there's an end on it.

In a highly-unionized country, even if inequality isn't moved much by unions, they at least another way to answer the question 'What are you?' besides 'Poor.' You have a fighting chance at defining yourself by what you do, as well as by how much you make.

Posted by: Davis X. Machina on August 31, 2007 at 3:08 PM | PERMALINK

save_the_rustbelt: "On the opposite side of the coin, some union leaders still think this is 1965."

I'd have to say that current times are such that we could use union leaders more in the mold of the late Jimmy Hoffa.

To be sure, he was never far removed from his roots as a street thug. But it was union leaders like Hoffa who showed little or no fear in the face of an equally vicious Big Capital, and who instilled such confidence in their members that they were wlling to go toe-to-toe with their opponents and slug it out.

In a political street fight, while you may not have particularly liked a ruthless son of a bitch like Jimmy Hoffa, when circumstances dictated the prudence of momentarily setting aside issues of personality, you sure as hell were glad that ruthless son of a bitch was fighting on your side, and not theirs.

Posted by: Donald from Hawaii on August 31, 2007 at 3:23 PM | PERMALINK

Just as the best anti-war advocates have been rejected by their audience, so to have the best advocates for economic reform been marginalized from political participation. There are plenty of organizations, grassroots or otherwise, that advocate for ecomomic reform to better distribute wealth and to cap wealth's political influence, but they have been shut out from the political discourse and maligned by the very people who claim to want those ecomomic reforms. Progressives, liberals and moderates decry the disparity of wealth distribution, but they will tune out ACORN in a NY minute and accuse them of supporting Black police killers. They will not consider voting for the Social Equality Party's candidates, let alone even consider voting Green. What I am saying is that most people who are politically aware of the economic and foreign policiy issues are adamantly opposed to supporting political options already available to them. Like many people, they limit the available solutions to either evil or the lesser evil, which I think is how we arrived at this particular place in history.

There may be times when it is imperative to vote out the evil by supporting the lesser evil. I think the presidential election of 2004 was and 2008 is that time, but I did not think 2000 was. I do not think 2012 will be. If those of us who claim to want better ecomomics and politics do not begin now to plan for the ouster of the Baird's and Pelosi's in 2012, the duopoly will surely be pressing us to choose between the lesser of two evils again in 2016.

Donald from Hawaii, I respect your views, but I think things are only going to become worse unless those who truly oppose the status quo begin to actually oppose it at the ballot box rather than in the PA comments.

Posted by: Brojo on August 31, 2007 at 3:30 PM | PERMALINK

"The distribution of disposable income [i.e., income after taxes and government benefits] is lower in Germany because of its redistributive policies, not because unions are more powerful."

Of course, the reason that Germany has redristributive policies has nothing at all to with the fact that its unions are powerful. It's just a coincidence.

And as for observance of the labor laws: US corporations view the labor laws as a cost of doing business, not as a moral imperative. If disobeying the law has a lower cost than obeying it, they will disobey it without a qualm.

Posted by: Bloix on August 31, 2007 at 3:37 PM | PERMALINK

As you touched on, we do have unions only they're called hedge funds, corporate boards, the Republican Party. Why is it OK for those groups to unite for their self-interest but it's somehow an abomination for workers to do that?

Posted by: Guscat on August 31, 2007 at 3:47 PM | PERMALINK

They aren't perfect, and they frequently act only in their own narrow self-interest, but without them there's no organized opposition to the agenda of corporations and the rich.

Yes, because "corporation" and "the rich" have a uniform "agenda" that they share.

Le me also add that, as a lawyer for mostly mid-sized and large corporations, the next meeting of the "Committee for the Rich and Corporate" will take place on Tuesday at Mr. Burns' house. We'll be taking up action items seven ("How to defraud consumers") and eight ("John Edwards: Making hypocrisy work for you"). Dracula will bring the cookies.

Posted by: von on August 31, 2007 at 4:02 PM | PERMALINK

"They aren't perfect, and they frequently act only in their own narrow self-interest, but without them there's no organized opposition to the agenda of corporations and the rich. Warts and all, they're worth supporting until something better comes along."

Kevin, I've read a lot of forehead slappers on PA, but this is up there with the best. If Norman Podhoretz tried to sell you his mideast agenda, warts and all, until something better came along I doubt you'd be taken in. Yet despite the Falluja-like conditions of every manufacturing industry dominated by Wagner Act shakedown artists, you refuse to try something new because going along is so comfortable.
BTW, about a year I read that German trade unions have their own private Gestapos to go root out any uppity member or private contractor caught moonlighting on their turf. I don't think the American consumer would put up with that amount of social engineering.

Posted by: minion on August 31, 2007 at 4:16 PM | PERMALINK

Sorry, that was a bit too harsh and too flip.

It's just that the almost offhand assumption that "the rich" or "corporations" all have some "agenda" that is contrary to the interests of workers has always irked me. There are, of course, some places and circumstances where interests are at odds. There are also places where unions have made important contributions. But it's also true that if some unions are a good thing on net, some unions are bad on net --little better than expensive relics, which depress standards, prohibit merit advancement, and decrease wages and productivity.

What we need is a more sophistocated way of talking about how the world actually works and the role of unions (and other forms of organized labor) in it -- something that cannot be distilled into a John Edwards-style talking point.

Posted by: von on August 31, 2007 at 4:17 PM | PERMALINK

sophistocated --> sophisticated. Truly, I know how to spell the word -- I just can't seem to stop myself from misspelling it.

Posted by: von on August 31, 2007 at 4:18 PM | PERMALINK

The Catholic Church has long recognized the rights of workers to organize and collectively bargain. I consider people who are anti-union to be anti-Christian.

Posted by: The Conservative Deflator on August 31, 2007 at 4:50 PM | PERMALINK

Here is an idea to consider when the paper bubble of cash and debt finally bursts. I've posted it here before, but I think that when the time comes, it might well be worth including in the larger conversation.

In 1996, Bob Dole had a campaign slogan, "We want you to keep more of your money in your pocket." The first thought to cross my mind was, 'Thank God it's not my money, or it would be worthless.' The logic of this is that the actual currency doesn't belong to the holder, only its value. The monetary system is a function of government, which in a democracy is the people. Therefore money is actually a form of public commons, similar to a public road system. Instead of transportation, it's a system of economic exchange. While you are in total possession of the section of road you're driving on, its value is due to it being connected to those everyone else is on. So is the value of the money in your pocket due to its broad interchangeability. It is not an issue of socializing wealth, but of understanding what money is to begin with. Your home, business, car, etc. are private property, but the roads linking them are not. Money is more like the public road system, than private property. It provides a broad economic connectivity, without which the economy could not function. As economic circulatory system, money is a form of public utility and allowing it to be monopolized is not economically efficient.

oney is a http://www.exterminatingangel.com/index.php?option=com_content&task=view&id=203&Itemid=118


Posted by: brodix on August 31, 2007 at 4:58 PM | PERMALINK

Is there any truth to the rumor that Tony Snow is quitting his WH job because his $170k salary isn't enough to afford the upcoming rate increase in his ARM...?

Posted by: Disputo on August 31, 2007 at 5:01 PM | PERMALINK

[Persistent Trolling Deleted]

Posted by: mhr on August 31, 2007 at 5:11 PM | PERMALINK

The graph refers to comparisons of market income to disposable income excluding capital gains and the like but also excluding non-cash benefits (p12). A study the authors reference using 90s data says:

After augmenting income
to include the value of non-cash benefits for health care and education net of both direct and
indirect taxes, the income of the poor turns out to be much closer to the median and the
distance between the rich and the poor falls in all countries

Unions aren't just about rising cash wages but also benefits (health-care, vacation sick-time etc.). Non-union companies often adopt similar programs to keep unions out (the utilities were often successful at this strategy) thus union benefits provide improvements beyond just their company or industry.
You'll wait a long time, Kevin, for something better to come along.

Posted by: TJM on August 31, 2007 at 5:14 PM | PERMALINK

von,

Here's a question, are your corporate clients in general agreement with each of the points you made in the second paragraph of your last post? Particularly the comments about many unions being relics and being bad on net for workers? If the answer is "yes," you have countered part of your own point about the "rich" and "corporations" not having a common agenda. Yes, corporations compete with each other; yes, corporations take differing positions on many issues; but there are some common issues and assumptions that many of my own corporate/rich clients share -- you've already identified a couple of them.

Offhand, I'd add the following as common issues or assumptions:

-- Union greivance procedures help only slackers and poor workers; good workers don't need these procedures.

-- Union leaders are more interested in their own political advancement and power than in workers' interests.

-- It's BS for a union to object to a company having a mix of union and non-union contractors on a project -- that's the company's business, not the union's.

I'm sure you can come up with more, particularly if you expand the concept beyond traditional labor relations and into governmental regulation or other issues.

My point, by the way, isn't to argue that the companies are right or wrong on a particular union issue, it's that the companies share a core of common views of what's right and what's wrong with unions. And from there it's a very short step to a common "agenda."

Posted by: dbm on August 31, 2007 at 5:21 PM | PERMALINK

It's BS for a union to object to a company having a mix of union and non-union contractors on a project -- that's the company's business, not the union's.

Possibly true in some locales, definitely not true in NYC, for example. And the companies know it too.

Posted by: TJM on August 31, 2007 at 5:26 PM | PERMALINK

TJM raises some good points - income inequality isn't just about salary, it's also about benefits and social programs. Who provides health care, retitrement, education, etc. ? It's not just the job - what kind of society does one live in?

Jerome á Paris who posts over at Daily Kos has mentioned working in France at a salary that draws some derision from headhunters looking to lure him to a job in England - till he points out all the benefits he gets just from living in France, plus good transit systems that mean he doesn't have spend lots of money on cars and gas. By the time they add up all the things he gets as a matter of course, and figure the cost of paying for the equivalent out of a salary from a job in England, they end up walking away shaking their heads.

Posted by: xaxnar on August 31, 2007 at 5:42 PM | PERMALINK

Unions have power to affect wages if they can hurt employers by striking, have enough reserves to hold out, and are not in direct competition with foreign workers making peanuts. Labor intensive manufacturing would be a good example. If they cannot hurt the employer by withholding labor, then they have little effect other than to employ Italian American union officials.

Posted by: Luther on August 31, 2007 at 6:12 PM | PERMALINK

the almost offhand assumption that "the rich" or "corporations" all have some "agenda"

Yes, capitalist collectives have an agenda to maximize profits. Captitalist collectives have board meetings where they plot strategies to maximize a return on investments. Capitalist collectives have accumulated huge amounts of capital that they use to manipulate the political economy in order to ensure they maximize profits and a return on their investments regardless of the cost to other stakeholders in their own companies and their communities. Their capital accumulation allows them to bribe politicians, own communicatins outlets, harrass labor organizers, game regulatory agencies, and hire armed mercenaries to enforce their power. Those who oppose the power of capital collectives do not have the accumulated capital to pay for these things. They rely upon the social contract to protect them from the excess power the politically made marketplace awards capital collectives. However, when the social contract has been compromised by the huge accumulation of capital that these few collectives wield, so that the majority must live in thrall to them, then a change to the contract and the political economy is warranted. That time is now, but if equitable change is not brought about through political change, then the alternative becomes an ugly historical imperative, that even the vast accumulated wealth of the few will not be able to stop.

Posted by: Brojo on August 31, 2007 at 6:13 PM | PERMALINK

For a case study in what the loss of union benefits can mean to an entire town, check out this recent story in The New York Times about the imminent closure of the Maytag plant in Newton, Iowa.

http://www.nytimes.com/2007/08/26/business/yourmoney/26maytag.html

Whirlpool bought out Maytag and is shifting production to a non-union plant in Ohio and another one in Mexico.

The long-time employees are in shock over their loss of membership in the middle class, along with their high wages, health insurance, and pensions.

Also, as the major employer in town, Maytag forced other employers to compete with high wages. Now, they won’t have to bother.

Posted by: emmarose on August 31, 2007 at 6:35 PM | PERMALINK

Site Moderator (to mhr): "[Persistent Trolling Deleted]"

That's exactly what the Minneapolis Police Department was trying to do at that airport men's room.

Posted by: Donald from Hawaii on August 31, 2007 at 6:43 PM | PERMALINK

I don't understand why everyone always slams unions for not being altruistic fairy godmothers of the common good. Unions exist to equalize the bargaining power of workers and employers. No one expects employers to be altruistic. Therefore, why should the workers suddenly be altruistic?

Unions right a market failure (specifically, the unfair information and bargaining power advantages enjoyed by large corporations with respect to individual employees). That's all they do; they shouldn't be expected to also have some kind of great society-improving agenda.

Posted by: dal20402 on August 31, 2007 at 6:57 PM | PERMALINK

dbm: "It's BS for a union to object to a company having a mix of union and non-union contractors on a project -- that's the company's business, not the union's."

Actually, it's your suggestion that's BS. And from your other observations on that post, I'd have to say that you've obviously never been a member of a union.

Unions insist on professional standards for both its members and the job sites. In many instances, unions have actually taken over the training of workers from the contrating corporation, in order to ensure that a person is truly qualified to do the job to which he or she has been assigned. Workers who are unionized have the best safety records and are the most productive per capita in their respective industries. That is a fact.

The United Mine Workers were the primary reason why the death and injury rate in mining accidents had fallen until recently in this country. The major accidents that occurred over the last few years in this country occurred at non-union mines.

As a consumer, I want quality above all else, and I'm willing to pay for it. Same goes for business -- if I'm going to insit on cheap labor costs before anything else, the result will be exactly what I paid for.

Posted by: Donald from Hawaii on August 31, 2007 at 7:12 PM | PERMALINK

Funny thing about two gate policies - That Non-Union side just keeps wider. First, they start with skilled trades, such as electricians, plumbers, HVAC, etc coming through the Union side - The grunt work, say hauling dry wall for example, comes through the NU side - Not long, before more and more trades enlarge that NU side.

It happened in Vegas, once one of the most Union cities in the country. As construction exploded, the reasoning given for enlarging the NU gate, was a lack of skilled workers. There was a time when the non-union Pete King Painting out of Arizona couldn't work in Vegas, even at Nellis - Next thing, he came in with his wed to Del Webb family construction empire, and took over painting in Vegas. Skilled became blow and go.

Posted by: thethirdPaul on August 31, 2007 at 7:59 PM | PERMALINK

Unions are bad. Only top down solutions are good. Smart people are at the top, right? So they should make all the decisions.

There's a secret formula out there that will ensure quality and productivity at low wages and everyone will be happy. We just have to find it.

If only American workers were like the Chinese (sigh)

Posted by: Horatio Parker on August 31, 2007 at 8:53 PM | PERMALINK

Which Stephen Gordon is this? The libertarian, ex-CEO, Ollie North for senator, pol guru type, or another?

Anyhoo, as aleady stated, German management-union cooperation, union members sitting on corporate boards etc., let alone the completely different social cooperative values hardly reflect our own.

Surely a better comparison would have been with the UK where their management-union dynamics run closer to the US, their economy is considered to reflect the US more closely than most other OECD economies, and, coincidentally since 1980, the decline in union influence, membership and antagonism has been matched by a movement in the UK's Gini values from mid-European levels to straddling our own.

There are so many variables that there is no way to be definitive, but there is much evidence of unions benefitting workers overall, at least in the short- and medium-term, in pay, conditions and benefits, plus socio-political spill-over that the argument is a hard one to dispute. Why are the old automakers whining so much now about pensions and healthcare?

On balance, I would come down on the "Rubbish" side.

Posted by: notthere on August 31, 2007 at 11:43 PM | PERMALINK

Wages are more unequal in Germany??? Until the recent slight increase in the American minimum wage, 25% of Americans earned less than the monetary minimum wage in Europe ($9.50/hr) -- not even counting full medical, four weeks paid vacation, etc., etc. -- and Germany is the best paying country. Until the slight increase, 25% of American workers were earning less than the federal minimum wage of 1968 ($9.50/hr adjusted)!

I have been watching the wages of myself and everyone I know tail spin for three decades while per capita output has grown 2/3. Adjusted for "top-coding" the Census figure for average family income of the top 20 percentile is $250,000/yr ($176,000 nominally). Of course that mostly goes to the top 1% -- not their fault; nobody else seems to want it; read below:
***************************
American workers have no idea of the need to bargain collectively AND to bargain sector-wide, as it is done around the better paid world -- that is the alpha and omega of American inequality. In what amounts to a cult: the free market is misunderstood to free us of the responsibility or worry to equalize power in the labor market.

The free market should be seen as just the OS of the economy, the neutral operating system -- nothing more (remarkable as it is) which can run monopoly, monopsony, the race to the bottom or sector-wide bargaining with equal ease.

The ULTRA SIMPLE answer to American inequality is to stop running the race to the bottom and start running sector-wide bargaining.

Most economists can only see unfair market outcomes when the perps are as big and colorful as Standard Oil and John D. Rockefeller -- totally missing the same unfairness (not "distortion" or "failure" -- see below) at the fast food level.

I would no longer use the terms "market failure" or "market distortion" having gained the understanding that the the market (magical as it is at what it does) should be expected to be a value free, morally neutral sorting mechanism -- just the OS.

American labor has to wake up to how unionization is done in the rest of the world -- thats all!

Posted by: Denis Drew on September 1, 2007 at 12:13 AM | PERMALINK

"That's Politics 101, and right now unions are pretty much all we've got. They aren't perfect, and they frequently act only in their own narrow self-interest, but without them there's no organized opposition to the agenda of corporations and the rich. Warts and all, they're worth supporting until something better comes along."


Unions influence working conditions far more than wages. Without unions, working conditions at most businesses would be complete shit. So, yeah, I guess they deserve Kevin's grudging and half-hearted support. But only unitl something better comes along.

Posted by: Pocket Rocket on September 1, 2007 at 1:08 AM | PERMALINK

Donald from Hawaii, you need to read dbm's post more closely. He's presenting the viewpoints of corporate clients, not arguing for them.

Posted by: skeptic on September 1, 2007 at 3:00 AM | PERMALINK

skeptic, you're so right. I misread dbm's final paragraph. He's not a corporate shill. He just played devil's advocate a little too well, and caught me in the process.

Posted by: Donald from Hawaii on September 1, 2007 at 3:45 AM | PERMALINK

dbm wasn't even playing devil's advocate. He was refuting von's suggestion that corporations and the rich don't have a common agenda or perhaps support KD's suggestion that they do.

Posted by: tanstaafl on September 1, 2007 at 4:20 AM | PERMALINK

'Unions are bad. Only top down solutions are good. Smart people are at the top, right? So they should make all the decisions.'
---Horatio Parker

Sounds like the recipe for fascism. Government of the elite, by the elite, and for the elite.

'If only American workers were like the Chinese (sigh)'
---Horatio Parker

You mean, indentured, subject to dangerous, polluted working condtions and having no freedom to change jobs or challenge their employers? No thanks, pal. You have a fucked up view of the universe and apparently don't have much of a problem with slavery.

As Abraham Lincoln said, labor is the superior of capital and should always be given preference. Capital would never exist or be created without labor. You capitalist assholes have it exactly back-ass-wards.


Posted by: The Conservative Deflator on September 1, 2007 at 6:19 AM | PERMALINK

German workers, in addition to having a shorter workweek, enjoy 4-6 weeks of vacation a year compared to our 1-2 weeks.

Oh yeah - and they all have health insurance, are much better educated and can afford college, as well. That has to count for something too.

Posted by: Charles Hammond, Jr, PhD on September 1, 2007 at 8:19 AM | PERMALINK

Gordon is grossly cherry picking. The distribution of market income is extraordinarily unequal in the US compared to almost all other industrialized countries. Germany is another outlier for the reason you explained.

Also one has to be careful with standard data sets. The US numbers are, by convention, based on the CPS which top codes income to preserve anonymity (income is recorded as above x with x changed occasionally as nominal incomes rise). To study the upper tail of the US distribution one has to look at tax records as done by Picketty & Saez and almost no one else http://elsa.berkeley.edu/~saez/ click tables and figures updated to 2005.

I hate hate hate admitting that US market income is very unequal, but it is true.

Posted by: Robert Waldmann on September 1, 2007 at 8:25 AM | PERMALINK

Idaho is a right to work and at-will state, but, nevertheless, Larry C had the courtesy to give his employers a thirty day notice.

Posted by: thethirdPaul on September 1, 2007 at 9:24 AM | PERMALINK

"German workers... can afford college"

Of course they can afford it, Charles - it's free, as it is in many European countries

Posted by: Jussi on September 1, 2007 at 11:45 AM | PERMALINK

Three points:
1. Reunification is likely responsible for higher inequality, which will abate over time.
2. Unions are in a tough spot, due to the global labor surplus, and routinely find themselves making concessions just to hold onto their jobs.
3. Americans are mostly ignorant of labor history, which, like evolution, gets little attention in the school curriculum.

Posted by: Sustainable Middle Class on September 1, 2007 at 12:44 PM | PERMALINK

Sustainable,
Unions or rather unionizable people can get themselves out of the tough spot very easily by passing legislation that makes collective bargaining (presumably sector-wide) a legal requirement -- or at least by making non-union firms work under the same conditions negotiated by union firms (France, I believe, and Quebec).

Sector-wide is the only level of checks and balances that can work vis-a-vis today's hyper-bean counter management. 35% unionization worked after WWII, but that was after 15 years of the "great compression" -- before the big winners and losers had sorted themselves out. By 1973 they had and when slowing productivity dropped growth back the high pressure went on and has been on (excepting the double-bubble of the dot.com/return of productivity boom) ever since. That's my reading anyway.

Before 1850 we didn't have a national currency. Before 1900 we didn't have modern property titles everywhere. In the early twentieth century we learned to rein in Wall Street (or try to). It is time to institute the kind of modern checks and balances in our labor market that exist very profitably for labor in one form or over most of the modern planet.
**************
You are right that Americans have no idea what is happening to them. I get sorely frustrated when even the most progressive commentators keep parroting the federal (three times an emergency diet price) welfare line as if it had any connection to reality. Imagine if people knew the poverty line should really be twice as high (six times the price of an emergency diet :-]) and that the number in poverty was therefore more like 25% (or would be without food stamps, etc.)!

Imagine if the media bothered to inform people constantly that 25% of our workers were earning less than the minimum wage of Europe (not counting full medical and all benefits) -- or less than the American minimum wage of 1968 ($9.50/hr adjusted)!

The media pushes and pushes whatever the latest liberal social agenda is but totally ignores the story of the ripping off of the whole economic life of the former middle class.

Posted by: Denis Drew on September 1, 2007 at 3:12 PM | PERMALINK

Here's a question, are your corporate clients in general agreement with each of the points you made in the second paragraph of your last post? Particularly the comments about many unions being relics and being bad on net for workers? If the answer is "yes," you have countered part of your own point about the "rich" and "corporations" not having a common agenda. Yes, corporations compete with each other; yes, corporations take differing positions on many issues; but there are some common issues and assumptions that many of my own corporate/rich clients share -- you've already identified a couple of them.

1. I'm speaking only for myself, not my clients. 2. Based solely on personal experience, I have found that corporations (and other entities) have divergent views on unions. All corporations want to make money, of course, but the way to make the most money is seldom through a maximalist, "screw-the-workers" approach.

Posted by: von on September 2, 2007 at 5:21 AM | PERMALINK

For clarity, my comment above was in response to dmb.

Posted by: von on September 2, 2007 at 5:22 AM | PERMALINK

Just to clarify here
1. The author is a Canadian progressive economist.
2. The point about unions in Germany was merely an aside. His main point was that tax and cash benefits are more effective in reducing inequality than trying to directly change market outcomes.

He also is in favour of more indirect (i.e. consumption) taxes offset by progressive expenditure (say on health, education and housing).

Now I'm going to be provocative, I think he is right. We all agree on what we want, but there is plenty of room to disagree about how to go about it.

As for people speculating about reunification having something to do with inequality in Germany, you are probably correct. But JeffII doesn't know what he is talking about. Wages in the East are lower than in the West, but Poland, the Czech republic and Slovakia are next door. High unemployment and net emigration are East Germany's lot.

Posted by: reason on September 3, 2007 at 6:59 AM | PERMALINK

Reason,
I hate to be so one-note-tune, but: restructure the labor market in the USA with long, long overdue legislation that sets up some form of sector-wide bargaining (or at the very least brings back a heavy amount of union-local to firm bargaining) and labor will directly change market outcomes for you -- for itself!

The current labor union-free labor market in the USA would be considered a grotesque -- by even conservatives -- in most parts of the first world.

Posted by: Denis Drew on September 3, 2007 at 11:43 AM | PERMALINK

No serious discussion of unions in America can be had without including two huge factors unmentioned in the original post or in any of these many comments: (2) The impact of liberal immigration policies as well as social welfare policies which guarantee a huge underclass whose very existence provides a ready supply of union-busting labor, and (2) The huge difference between unions in the public sector and unions in the private sector. If it weren't for the power amassed by public employee unions, by now unions in the private sector would be all but eliminated.

Posted by: Jack Sprat on October 15, 2007 at 5:37 PM | PERMALINK

Bs66WU comment1 ,

Posted by: Enlknmfw on June 25, 2009 at 1:58 AM | PERMALINK




 

 

Read Jonathan Rowe remembrance and articles
Email Newsletter icon, E-mail Newsletter icon, Email List icon, E-mail List icon Sign up for Free News & Updates

Advertise in WM



buy from Amazon and
support the Monthly