McUnion

This story and the potential for change it brings excites me more than the #funemployment hippie* party, #Occupy, ever did. Insightful, Hamilton Nolan writes:

By 11:30 this morning, several dozen people wrapped in winter coats and wielding hand-drawn posters had assembled on the corner in front of the Wendy’s on the Fulton Mall in downtown Brooklyn, across from the Modell’s and the Bank of America, with the purpose of addressing that most fascinating question in labor relations: Can fast food workers ever be unionized? Here, in New York, today, a lot of fast food workers decided to skip the theory and proceed directly to the “Fuck you, pay me” phase of the process.

“I’m tired of being courteous to guests for $7.25!” thundered one of the workers to her peers. As a former McDonald’s worker who was never asked to work the register due to a lack of enthusiasm for customer service, I find that sentiment very difficult to argue with. The protest at Wendy’s was just one of several throughout New York City today, all part of the launch of a new unionization campaign aimed at NYC’s fast food workers, one which is backed by several activist groups and big unions and dozens of organizers and is not, I daresay, fucking around. Our city is, if you open your eyes, a bit, littered with fast food restaurants—it is only the most affluent neighborhoods that can afford not to have them. All of these restaurants are staffed by our fellow New Yorkers. Many of them are paid $7.25 an hour, the state minimum wage, and they’re scheduled for fewer than 30 hours a week, on average. They’re asking for $15 an hour. Still not all that much to live on. But much more than they get now.

(* Thanks to Mike Farmer for correcting my spelling error in an earlier post.)

In order for unionization to proceed successfully, labor must possess two essential characteristics: (I) it must be undervalued/exploited (at least according to the public,who might boycott), and (II) it must be organized enough to outlast management.

As to whether or not fast food labor is undervalued/exploited, here’s my reasoning on the topic:

(1) $7.25/hr. x 30 hours/wk x 52 weeks/year  = $11,310/yr. – this is not enough to live anywhere in America let alone in New York City. Even outside of New York City, I don’t know how any one person could live off that, let alone people with families they have to support.

(2) I am aware that – like Walmart – many fast food restaurants exploit loopholes in regulations designed to improve the standard of living for everyone by putting a ceiling just below the level of hours worked where benefits start to legally kick in. They can do this because they know their labor force is at the lowest rung of the economic totem pole, and they know the only other alternative for fast food workers is to be unemployed.

That is to say, fast food restaurants prey on cheap labor from marginalized populations because they know such employees are desperate; and then they target those same populations with advertisements.

This is all part of a clear and systematic plan to exploit the poor for their labor, take what little money they have, cause them to die an early cardiovascular death as a direct result of over-consumption of fast food products, and then outsource the cleanup costs of whatever societal/medical ills inevitably result to taxpayers (Guess who’s going to be paying for these people’s medical care/health insurance with Obamacare about to kick in? Guess who’s paying for their medical care/health insurance right now in the more-civilized states?).

It’s fucking ridiculous.

So basically, to sum it up, I’m sold on the idea that fast food labor is undervalued and exploited, and if I were not already boycotting fast food for obvious health reasons, I would boycott for reasons of social and economic justice.

Regarding the second essential characteristic for unionization – organization – when I first read this story, I thought to myself: really!? You’re going to try to unionize now!? When fast food restaurants are enjoying record profits and unemployment rates are stratospheric!? They’ll just fire you and replace you with some immigrant or high school kid immediately.

But the more I think about it, the more I realize that the unionization of fast food workers is an evolutionary phenomenon.

What I mean by that is that, life at minimum wage sucks: more and more people are choosing to join the protests now than would have in the past because fast food employees are desperate now, whereas in the past they may have been too apathetic or too fearful to reach critical mass for unionization. Fast food workers now, when there are no other options, are motivated, maybe even motivated enough to stick it out, make a lot of noise, and inspire the kind of boycott shamelessly opportunistic and amoral, yet unimaginative and predictable fast food management routinely caves in to.

 

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471 thoughts on “McUnion

  1. A few thoughts:

    1. I have absolutely no sympathy for this statement: “I’m tired of being courteous to guests for $7.25!(5)” It is, contra the author, easy to argue with.

    2. I’m not sure if this puts us in disagreement, but I’m not willing to say that a particular wage is too low because when you calculate it out it’s below what can be lived on. I see people do it, but it’s a misdiagnosis in my view because…

    3. The bigger issue is that there are often not better and more economically valuable jobs for them to move on to. On that part, I am a lot more sympathetic to at least some – maybe most – McDonald’s workers.

    4. Because of the above, I don’t particularly have a strong position on any attempt by McDonald’s workers to unionize.

    5. I was actually a tad surprised that they do pay minimum wage in New York, apparently. They didn’t back when I worked there. In fact, I happened to be working there when the minimum wage changed, and my wage went up from 50 cents above minimum wage to remaining 50 cents above minimum wage. It was an incentive buffer to keep their jobs paying more than the minimum wage ones (my first “real” job was a minimum wage job, McDonald’s was #2). The minimum wage has gone up a couple dollars an hour since then, so maybe at some point they couldn’t have the incentive buffer anymore. If so, that might be instructive.

    6. Perhaps a sign of the changing times, but McDonald’s was begging (some) employees to go full time when I worked there. The “(some)” was because this excluded dishwashers who – by and large – did not speak English.

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    • I think what you write is a lot of good food for thought, but I have to disagree with this:

      I have absolutely no sympathy for this statement: “I’m tired of being courteous to guests for $7.25!(5)” It is, contra the author, easy to argue with.

      I have at least some sympathy for this statement. Perhaps it’s a question of temperament and your experiences working fast food or comparable jobs (I infer this from your statement about working in New York at 50 cents above the minimum wage) maybe differs or maybe you took different lessons from it. But in my experience, it can suck at least sometimes to have a job where one has to be courteous to people when those people treat you the way fast food customers often/sometimes treat fast food workers.

      I’ll add that about 10 years ago, I had another customer service job at an in-bound call center for a bank. And in a certain way, it also sucked to be courteous to customers. But I got paid about $13 an hour, with benefits, so it didn’t suck as much.

      Does my position, if true, mean necessarily fast food workers ought to unionize? Probably not. But if the workers here in Chicago tried to unionize, I would boycott until they were recognized. (I should admit that unless they do try to unionize, I will probably still patronize those establishments.)

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      • Pierre, I am not exactly a “people person” and get exhausted dealing with people – often irate people – at a customer service job. So I guess in that way, I am not entirely unsympathetic. I do understand the unpleasantness. But, when you take a customer service job, dealing with customers is the job or at least a huge part of it. I dislike talking on the phone, but when I took a job answering phones for a satellite company several years ago, it wouldn’t have occurred to me to complain about the part of the job that involved talking on the phone. It would have been as unpleasant at $15/hour as it was at half that. But… it’s the job. Take it or leave it, to some extent.

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        • I think I agree, with the qualification, as someone below has noted, that people in CSR jobs often have less of a choice. Even so, as I stated somewhere below, embracing that aspect of the job–or accepting it, as you did–probably makes the job more enjoyable.

          I also say I have a tendency to overinterpret and take literally comments that are meant as hyperbole (“absolutely not sympathy”) when a more charitable reading (by me) would assume some exceptions might be entertained. Having said that, I probably indulge in hyperbole all the time (pun intended) without even realizing it.

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  2. Standard libertarian response to 1: “The wage rate is freely and voluntarily agreed upon by both parties. Do you hate freedom?”

    SLR to 2: “Do you hate the poor?”

    I’m on the side of living wages, myself. I’m also on the side of unions. At least in this context.

    But … what if Wendy’s has to raise it’s prices because of union coercion? Doesn’t that mean Wendy’s is less profitable than McDs or BK or CarlsJr, and won’t that mean that the union is ushering their own future unemployment by actively bankrupting the firm?

    Unfair advantage, eh? Only if McDs and BK and others don’t have to raise their wages as well. Then it’s a level playing field again. How’s that a bad thing?

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          • How does taxation and redistribution lead to a living wage, tho? The argument on the table is that social programs funded by those that make surplus wages are necessary components (maybe sufficient!) in firms paying less than living wages.

            The argument I made on the Walmart thread was that the bare fact that firms exploit the social safety nets to lower their wage costs ought to present a real challenge to libertarians. In short, the dilemma is this: libertarians either need to oppose redistributive social programs or favor greater government intervention and/or unionization to minimize the takings on private citizens.

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            • How exactly do they “exploit” the safety net, or perhaps, more directly, how are you defining exploit?

              Employers pay the going rate. That means it is the rate that they can get the quality of applicant they want to accept the job with other employers competing for the same. If we build safety nets, I am sure that will have some effect on how many apply for jobs, how many hours they need to work, etc. I am not sure if this works out to a higher or lower wage all things considered, but it still leads to a going market rate. This then works out into number of jobs offered, prices of products and so on. I am not sure how this is exploitation, unless you are using a water downed term in a deceptively charged way.

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              • I am not sure if this works out to a higher or lower wage all things considered, but it still leads to a going market rate.

                So government intervention into the market doesn’t effect market rate just so long as there exists a market rate? Nice!

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                • You aren’t following, and you never did define exploitation. When I use the term I mean taking unfair advantage of someone. Not sure how offering someone a job qualifies as exploitation.

                  All I am saying is supply meets demand somewhere. If the conditions change, this is still going to be true, even though the point they meet is different.

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                  • Good morning Roger. I’ll try to be a little clearer about what I think the issue is. I was much too quick about things last night. You wrote:

                    you never did define exploitation. When I use the term I mean taking unfair advantage of someone. Not sure how offering someone a job qualifies as exploitation.

                    Offering someone a job isn’t the issue here. ANd in and of itself it (and as stated – “offering” a job – it isn’t) a form of exploitation. But that’s not the dynamic in play, at least as I’m seeing it.

                    Let’s get hypothetical for a moment. Suppose that that an economic system includes public subsidies to the poor via taxing the income of wage earners. Suppose also that firms hire people who receive subsidies and offer them compensation packages which in effect only supplement government-based benefits, structured in such a way as to not jeopardize the continued receipt of those benefits. So compensation will be tailored to pay low hourly rates on a part-time basis without healthcare and so on.

                    Now, to the question: who’s being exploited here? Well, certainly not the firm offering a job, and not the person who accepts a job offer. I concede that. So that’s not the focus of my criticism.

                    So who’s being exploited? Well, let’s consider the above scenario is entrenched via policy. That is, firms are permitted (legally, morally, pragmatically, whatever) to hire employees without offering them full-time status at a wage rate where they can provide for themselves based solely on their wage-income (that it, without government subsidies to fill in the gap). And suppose that this state of affairs is justified because requiring firms to pay employees more (or even permitting unions to leverage higher wages from a firm) would increase the price of retail goods and services.

                    If so, then it seems to me that lower price is maintained only by subsides from income earning taxpayers. So the policy of prohibiting (legally, morally, whatever) wages from going up to a living compensation rate does a few things. It institutionalizes below-sustainable wage rate for employees which in turn institutionalizes – it in effect makes subsidies logically necessary rather than merely contingent – a program of subsides to the poor. And it institutionalizes a taking from income earning taxpayers for the purpose of subsidizing low prices at the retail level. That is, tax payers are subsidizing low prices (artificially low, at that point) via government intervention.

                    Of course, you seem to hold the view that maintaining low prices is sufficient reason to not raise wage rates for low-skilled employees. If so, then you’re effectively conceding that coercive redistribution of tax revenues to below-subsistence employees for the purpose of keeping prices low is justified. But it’s also clearly a case where maintaining the status quo requires that both the taking from tax payers and government intervention into market activity.

                    So who’s exploited? Tax payers. I mean, I’m just making a standard libertarian argument here against coercive takings by government, one they employ all the time against liberals. But in this case, liberals want wages to go up to a living wage, with the consequence being that prices actually better reflect real cost.

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                    • I was edgy last night too.  I was all hyped up over the huge swell hitting Southern Cal this weekend. Best surf of the year. Five stars. 

                      Thanks for explaining the E word. Yeah, I misunderstood how you were applying it to taxpayers. 

                      I agree that government subsidies to the poor must affect the labor market.  I am not sure how, exactly.  Do they reduce the labor pool by encouraging unemployment,and thus increase wages over what they would otherwise be? Or do they increase the supply of higher qualified applicants that can live off the easier job and thus reduce the going wage rate (heads of households that would otherwise not be interested bid wages down)?  How do the effects of this play out with the lowest skilled vs the relatively higher skilled? I have no idea how this plays out (if guessing I would assume it bids wages down), and would love to see a study analyzing it.  Have you seen one?

                      I will certainly agree that structuring benefits or health care in such a way as FT qualifies and PT doesn’t is going to strongly distort the lower skilled market toward part timers, technological replacement, offshore outsourcing and contractors. This is a scary side effect of Obamacare and our dysfunctional employer paid health care markets. 

                      I am still not sure if the net effect is lower wages or higher wages, but I think I can agree that the unintended side effect of our current social welfare system is sure to affect how labor and employers work.  Different workers will apply for McJobs because they can now afford to.  Some workers won’t apply for jobs at all, because they can afford to. Employers will be strongly penalized to hire full time. 

                      Just to clarify though, this is not a policy “prohibiting wages from going up to a living compensation rate”, though it might be a policy which has the side effect of discouraging wages from going up.  I think the distinction is important. 

                      Also, note that lower/higher? prices and lower/higher? wages are not the only market distortions of our interference.  The number of jobs offered and capital investment are also affected. 

                      So, taxpayers elected representatives that approved safety nets to help people.  Then these representatives approved Obamacare.  Now we increasingly notice this is distorting markets.  And the tax payer who supposedly elected these guys is exploited? And your solution isn’t to fix the distortions (whatever they are) it is to now add on more regulation in the way of mandatory living wages?

                      Here are some questions… Where were all the liberal arguments for less market distortions when you guys built the current safety nets and Obamacare?

                       Is there any path that leads not to more regulation and market distortion, but instead to less? 

                      Would it be more fair to say that the non liberals who voted against the current state of affairs were the ones that were exploited, by being forced to subsidize this interference? 

                      Most importantly can you think of a creative way to construct your living wage in such a way that it has less market distortion? This may be the best area for us to agree on. I am open for suggestions.

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            • Generally, I support unionization. If management is allowed to be organized, labor should also be allowed, and encouraged, to be organized. Corruption should be punished on an individual basis, and CEOs and labor leaders that break laws should be prosecuted with equal vigor. We should lock up the BP executives who were complicit in the destruction in the Gulf of Mexico. Seriously.

              The important point that I think a lot of people miss – both libertarians and non-liberatarians – is that a lot of this is really up to consumers; or, it should be in an ideal system.

              The ideal economy is one in which consumers patronize businesses that have products that offer overall systemic utility gains and that also fairly compensate producers.

              Consumers should evaluate that!

              As for me, I strongly favor redistribution, but I think the system for redistribution that we have now is essentially dysfunctional: redistribution from the have-nots to the haves – i.e. TARP, corn subsidies – is far more pervasive than redistribution from the haves to the have-nots – i.e. our loophole-infested income tax system.

              We should have a tax system that derives most of its revenue from consumption (like a VAT) and that is clear and simple for anyone to understand. The main objective for welfare of the tax collected from such a system should be towards maintaining a minimal income for those individuals who are unfortunate enough to not make a living wage. We should also continue to fund the various unemployment services that help match the skills of individuals to job openings or that encourage such individuals to enroll in training that will increase their accessibility to the labor market. This especially since a huge portion of our unemployed have few marketable skills and our present system does little to nothing to rectify this!

              Like any employee retirement plan, the government should match contributions as much as it can, but in the end there will be people who fail under even these incredibly cooperative standards. These individuals should at least be allowed to receive health care and other rights we as a society deem essential, but the system should be set up to minimize such individuals, and I think it can be if it is restructured in ways that really are threatening to only the present “bipartisan” political establishment in that they threaten to end the stranglehold that various special interests have upon us all.

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              • I’ve worked for BP in inspections, and I can tell you that one thing that I really liked about working for them was their dedication to environmental sensitivity. (Dedication to safety is a big #2.)

                I don’t think there was complicity at the executive level with the Gulf disaster.
                I don’t think there was a lot of oversight at the operations level.
                But this is more an issue of respondeat superior; the owner is liable for the contractor, who is in turn liable for the sub.

                I’ve worked for an awful lot of oil companies, and BP stands out among them all as being environmentally-minded.

                The union issues I’ll reserve for a comment below.

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                • +1. Yeah, I heard an earful from the actual BP engineers, who would never have let half the sloppiness of that site go. They’ve got too much pride in their work.
                  The executive COULD NOT have NOT been complicit, except by willful blindness or sheer incompetence. When competent folks say “this is how much it’s gonna cost” and the other guy underbids by a good deal… well, there’s a reason it was outsourced, capiche?

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      • This libertarian at least would rejoin by saying he supports a minimum income, and I suspect others would as well.

        Roger answered that open question. A living income is “liberal tyranny”!! Nope, there’s market wages and that’s it. And if the government provides all sorts of subsidies that firms leverage their compensation against, well, those are still market wages.

        It’s all about the individual, see. Except when it isn’t.

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        • SW,

          You aren’t trying very hard to understand me, are you? I do not support higher minimum wages or high mandatory benefits. The reason is because they distort the market and eliminate many low skilled jobs. If you wish to dispute this please do, but please don’t just refuse to acknowledge it.

          I do support safety nets, private and public. I think our current safety nets are outrageously inefficient and poorly designed, but they do a good job of taking care of our poor (and would do much better if designed wisely). Are you aware of poor that are better off than ours? Why. Where?

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  3. Actually I suspect that if you went to Williston, ND or Pleasanton, Tx you would find fast food workers makeing more than the minimum wage, or Sonora, Tx (all be it the only fast food place there is a Dairy Queen). As an Oil boomtown, the fast food places have to pay more than the minimum wage to get any workers. (Note that it appears in Sutton County Tx (Sonora) the average wage is 115k, all be it only 4128 folks live in the county. Of course if you can get a commercial drivers license one can do significantly better than minimum wage, but many fail the drug tests. Actually during the height of the Clinton boom I did see signs offereing more than minimum wage at the fast food places as they had to to hire. However with the high unemployment they do not have to now.
    Of course one thing that is coming is to eliminate the human element in order taking, by providing a central location to take an order, or a self service order device.

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    • Out west, there are fast food places that have gone out of business for lack of employees, despite offering very generous wages. So you speak to the truth. That, however, doesn’t help the people in New York as much. (And, it should be said, housing in these boomtowns can be expensive, so you’re not pocketing all the extra money.)

      Actually during the height of the Clinton boom

      That actually may explain my experiences above. I worked at McD’s in the Clinton years. It’s possible they ceased the incentive buffer in response to rising unemployment. On the other hand, even then, there were still places that paid minimum wage.

      Of course one thing that is coming is to eliminate the human element in order taking, by providing a central location to take an order, or a self service order device.

      I’m not sure if that’s coming or not. It’s been tried, with incentives (JITB had “Get two free tacos by ordering from this kiosk”) and it didn’t take. HOWEVER, and this is important, the extent to which customers don’t like the idea may become irrelevant if wages are jacked up high enough.

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  4. Chris, I’ve been thinking about this post in conjunction with the earlier Walmart post, and now I’m wondering something, to wit: I wonder how many firms rely on/exploit the social safety net as a way to keep wages down? It seem to me like it’s systemic. The entire culture of firms which have “entry level” “employment opportunities” leverages it’s wages against the subsidies already received by a substantial number of its “entry level” employees.

    Or in other words: Could American Business in the new millennium be built on the back of redistributive social programs?

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  5. Simply get two part time jobs if you only make minimum wage and get 30 hours a week. Don’t buy shit you don’t need like bling bling and spinner TWIn TwIn rims. Don’t have 20 kids. Do some excercize. Stupid people will fail and there’s nothing we can do about it.

    Unacceptable, unions are worthless. Some union president goon is also getting fat off the union fees. If you want to make more than minimum wage get your shit together and do something about it. Btw, fast food sucks!

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    • Well, now I can post without feeling like the dumbest one in the room. Thanks for that Bojangles.

      Btw, the head of the largest union in the US, the United Federation of Teachers makes just south of 150k and is currently living with his mother in Brooklyn after losing his house to Super Storm Sandy.

      As for the rest of the racist shit you spouted, the idea that one could even afford some of the stuff you mentioned making what fast food workers make is beyond reason. But then again I’m probably the idiot for taking the Troll bate.

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            • Some sort of evidence to support that claim would probably be useful, yes.

              Good luck finding it (anecdotes about guys taking breaks while working on the roads are insufficient.)

              To properly buttress up this claim, of course, you’ll also need to show that union workers are not only lazy, generally, but they’re also lazier than the average American worker.

              Also, a stylistic criticism, if I may… using really crude language to link a specific, really bad stereotype of a minority group (“Don’t buy shit you don’t need like bling bling and spinner TWIn TwIn rims.”) to all minimum wage earners is, frankly, bullshit. If you’re not a racist, you’re clearly attempting to act just enough like one that people who disagree with you will jump on you and you can mewl foul and reverse racism and some other idiocy. Check that at the door or comment somewhere else, please.

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              • Not that a lazy unionized worker is lazier than your average worker, it’s the unionized worker can slack off more without being fired. The union has put in place a series of steps and red tape to punish or fire workers. Must I elaborate more?

                You use the term racist loosely. I think the definition of a racist is to hate a person because of their skin color, ethnicity, etc. a stereotypical statement is far from being racist. It’s ok to dislike a person based on their behavior. I can say I dislike people who drive down the street playing rap music at high volumes without being a racist. You can’t tell me you have never seen a fast food worker who drives car with spinner rims. They do sell cheaper versions you know that a Wendy’s worker could afford I’d they were not smart about their budget.

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                • I understand the logic behind the idea that unions make it more difficult to fire workers. That’s sorta what they’re supposed to do, after all. The idea that they make it significantly more difficult to fire bad workers needs a bit more than just a logic chain, you need some empirical evidence.

                  It’s really freakin hard to fire bad workers at all sorts of institutions, with or without union labor. Making it more or less hard matters only if it actually encourages employers to fire bad workers. In my experience – having not once worked in a union shop, mind you – most employers don’t fire bad workers. I’ve seen them at every job I’ve ever worked at, since I was fifteen. Many of them were in management, no less. I’m unconvinced that all of the bad apples that work in union shops would suddenly disappear tomorrow if their union protection disappeared and finally it was okay to fire that guy. I really doubt it would even be a significant percentage of ’em.

                  I did not call you a racist. However, your comment clearly singled out a particular stereotype and ignored other low-wage earners, using pejorative language. By specifically excluding, say, people who blow money on iPads or blow money on any one of any numerous other purchases I would consider luxury items, you’re either consciously or unconsciously inviting someone to accuse you of being a racist. It’s trollish, and it’s cheap. If you don’t like people on minimum wage blowing money on what you consider to be luxuries, say that. That’s not arguable, really. Most people would agree with you. Framing it the way you did is inviting people to disagree with you for something you’re implying, not saying. Knock that off.

                  I think that might be because you’re an ass, but that doesn’t make you a racist. Jury is still out on that charge, though.

                  It’s certainly legitimate to disapprove of anybody egregiously engaging in noise pollution of any sort. On the other hand, if you start saying, “I hate people who blast rap music” and then you just give the white kids or the Asian kids a break when they’re blasting George Thorogood or K-pop or whatever, you have to take the “blast” qualifier out. You’re not mad about noise pollution. You’re mad about rap music. It’s okay to be mad about rap music, but that’s not the same thing as being disapproving of people who engage in noise pollution. The first is a matter of taste. The second is disapproving of people who are being impolite. When you conflate the two you wind up disliking one group of people who are doing the same thing as another group of people, except they’re doing it with a style you don’t like. Hey, you can do that, but that’s not a principled objection, it’s just a matter of taste.

                  I have never seen a fast food worker with $2,000 rims on his car, no. Not of any ethnicity. I have seen a few fast food workers with expensive luxury items, of course, but those are generally high school kids who get their gadgets from Mom and Pop and sack their part time income in the can for beer money when they’re in college.

                  I see a lot of low-income parents at my kids’ school. 70% of the school population is on free/assisted lunch, which puts them at or near (or under) the poverty line in southern California. These people are poor. Most of them work two or more jobs. Most of them can only have part-time employment, because full-time employment is off the table, as nobody wants to pay their health insurance. I can’t say that I see any of them trucking around with spinny rims or iPhones or Versace purses or ridiculous luxury items.

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                  • Shame on you Mr. Callahan for using an ad hom, tsk, tsk. Calling me an ass. Knock that off.

                    I sir, have worked in a union shop and know by experience that a union has a significant role in the reduction of productivity. One woman in particular would constantly come to work stoned and reeking of weed. She would constantly fall behind in her work and was able to do so under the protection of the union. Had it not been a union shop she would have been fired for showing up to work under the influence.

                    Maybe you need to get out more then if you haven’t seen a fast food worker driving around with Dub spinners. Those parents you speak of probably have cars and TVs, those are a luxury my friend. You are telling me they don’t have cell phones?

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                    • Well now, here’s just the sort of anecdotal evidence that’s useless in a discussion like this. Who’s to say she WOULD have been fired if she weren’t being protected by a union? And in which industry can the union protect an obviously intoxicated worker from getting shown the exit?

                      Much of what you are saying doesn’t pass the smell test. I’m finding it harder and harder to take your comments serious Bojangles.

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        • You are correct sir! Such WOULD be the case if the unqualified rubes who hold sway over matters of education policy, school districts, budget decisions, and the lives of children weren’t equally or more corrupt than the unions tasked with representing teachers.

          You see Mr. Bojangles, elected officials and their cronies come and go; some like to work with all interested stakeholding parties to make decisions that are pragmatic and helpful, while others use their power for personal or political gain. Unfortunately for teachers, they have to work under whatever decent or horrible régime passes through. The point of the union is to help stabilize the perminant labor supply of teachers, principals, aides, and janitors by collectively bargaining on their behalf.

          Hard as this may be to believe, the vast majority of schools systems with unions perform quite well, in fact states where unions are strong generally outperform states where there are so-called right to work laws or where unions are weak. The state with the best educational outcomes, Massachusetts, also has the highest paid teachers and strong statewide teachers unions .

          Teachers Unions have been around since the turn of the last century. Since that time they have acted in the best interests of their members as well as society by pushing back against the repressive responses to various social movements such as The Red Scares of the 30s and 40s, feminism, black power, and currently, the modern reform movement.

          And as far as your last point, are you asserting that all of the nearly 100k public school teachers in New York City are lazy?

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          • California has strong teacher unions if I’m not mistaken and performs not so well but then I think we need to see the numbers to support our claims. Yes, unions have been around forever and now it’s time for them to go. My last point was that 150k is too much compensation for the head of the union.

            Can you tell us how many companies with strong unions outperform companies without? I think the McUnion article was focused on business anyway rather than teaching.

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            • California’s “not performing so well” is largely tied to our per-pupil funding, which is atrociously low, not the union, really.

              FWIW, I’m quite happy with our public school, the teachers are great and the principle does a very good job as well. My biggest complaint is that the school is chronically underfunded and lacks a bunch of the support structures that would really help the kids out, particularly the lower income kids.

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                • Nonsense! If you work at your profession long enough you deserve both a higher degree of respect AND a higher level of compensation. Unions don’t shield bad teachers from getting fired, they negotiate for judicial safeguards in the event a teacher is accused of wrongdoing by a child or supervisor. Teachers at all levels can be removed from the classroom with just cause, the process isn’t actually that difficult. In the past superintendents on down to principals were patronage appointments in many large cities. Some of the worst urban corruption existed in and around the Boards of Ed. Protection from this corruption was hard fought and won by the teacher’s unions. Up until more recently, there were far fewer qualifications required of high level supervisors than there were for teachers. As schools systems have developed higher standards for their managers, so too have unions given back many of the hard fought and won safeguards they once enjoyed.

                  Even though union power has been diminished over the years, it remains the only real counter to the zealotry of many in the so-called Ed. Reform Movement.

                  As for teachers salaries, it’s well known that teachers make less than their peers with the same level education. Only in the wealthiest of school districts do teachers salaries approach six figures, and that’s only after having put in decades of service. And on what planet is 150k too much to earn for the head of an organization with hundreds of thousands of members and a large support staff? If he were a top executive in the private sector he’d be earning 5-10 times more.

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                  • “If you work at your profession long enough you deserve both a higher degree of respect AND a higher level of compensation.”

                    Although this often can be true and often is true, it is not necessarily true in all cases. It depends upon whether the person actually gains in skills and performance, and/or whether the task is still in demand, and/or whether the supply or competition for the profession changes.

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                    • Roger, does a 90% increase in wages over a quarter century seem reasonable to you, even if the worker in question only improves marginally at their field of expertise?

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                    • Can you also explain to me how this works in a world where customer (student) is mandated to receive the service in question? I get that in actual markets businesses compete for customers and staffing needs are based on supply and demand, but how does this square with education, where the expectation is that all students are required to get the same level of service and the demand for teachers is based more on yearly tax collection then on factors like providing a better learning environment and this, a better product?

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              • Ah, but: “California ranks number one in the highest pensions for public employees — outranking even New York and New Jersey. Here there are a whopping 856,000 teachers and other school personnel across 1,900 districts currently within the California State Teachers Retirement System. The average pension for each of those teachers in California is $1 million over a 20-year period. Which means we have created a “millionaire teachers” class within the California economy.”

                http://www.calwatchdog.com/2012/09/21/californias-public-pension-jackpot/

                See also Cato’s Adam Schaeffer, who as of 2010 wrote that CA jiggles the numbers egregiously on per-pupil spending:

                http://www.calwatchdog.com/2010/08/20/lausd-spends-30k-per-student/

                “The research by Adam Schaeffer of the Cato Institute’s Center for Education Freedom seemed shocking: The Los Angeles Unified School District spent $29,780 per student in fiscal year 2007-08. That’s way above the $10,000 as advertised by the school district, and as used in most studies.

                The $29,780 per student figure means a class of 25 students would spend $744,500 a year.

                I talked to Schaeffer and had him send me his research, which I’ll append to this article. He also pointed to a more comprehensive study he conducted in March, “They Spend WHAT? The Real Cost of Public Schools,” which tracked and compared school-district spending around the country. It includes data on LAUSD that was updated in his more recent research. The earlier study found a wide divergence in total spending in California school districts, such as only $11,215 for Linwood Unified and $20,751 for Beverly Hills Unified.

                Basically, what Schaeffer found was that the LAUSD doesn’t count capital spending, such as from local and state bond measures passed by voters.”

                We’re being lied to, as usual. The most heavily-taxed state in the union just raised taxes some more. For the children [although the money will likely go to public unions, not necessarily the schools].

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                  • Not true. Performance on the NEAP, the only accurate measure of students accountability because state tests vary in difficulty and standards (although admittedly the Common Core is attempting to change this), has increased measurably over the last 30 years.

                    This is no small feat considering demographic shifts in income disparity, race, and immigration.

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                    • Roger,
                      These Cato graphs illustrating the rise in educational spending as compared to the percentage change in standardized test scores are a bit misleading to say the least. I understand how easy it can be to think of schools as a mill churning out a certain product that we all want to be able to measure so we can compare one mill with another mill, but that’s how G.W. Bush’s NCLB legislation has trained people to think. America actually does quite well in testing. Its just that we have a lot more poor and immigrant English language learning students who perform poorly on these things than the other countries we’re constantly being compared to.
                      http://super-economy.blogspot.com/2010/12/amazing-truth-about-pisa-scores-usa.html

                      The NEAP and the SAT results in the Cato chart actually show something quite interesting. In the NEAP results Reading and math scores showed growth in most years. Growth is growth. Small gains are usually the best one can expect from one year to the next nationally. For NEAP scores to look anything more than flat on that graph there would have to growth in excess of the prior year for all 40 years. That would be like some sort of education myrical of mythic proportions if that were to take place. I can’t speak to why science shows negative growth from the 70s into the 80s, but as is the case with any testing numbers, what were demographic shifts in income, immigration, and special needs status? These factors influence educational outcomes more than what happens in the classroom on the taxpayer’s dime.

                      With SAT scores the water is a little less muddy. There are just way more people taking the thing now than in 1970. And more means more students with lower incomes and immigrants and kids who weren’t that bright who would have worked in manufacturing or in a union but found that higher education was a better choice because there were fewer factories and fewer union jobs in the 80s and 90s etc. etc.

                      As for expenditures, yes, we are spending 90% more today in inflation-adjusted dollars than we were in 1970. We’ve also had to build more schools, buy more technology, accommodate more special needs students (Americans with Disabilities Act, 1991), and graduate more students from high school than we did in 1970.

                      But the graphs are misleading and they don’t even appear to match each other’s data. One says we’ve raised spending per pupil 90% in 40 years, the other says we’ve raised spending 120% during the same period. The second graph clearly is trying to mislead to make the results appear more striking to the casual observer. The numbers also indicate per pupil spending totals over the course of 13 years, the amount of time it take to complete a full k-12 education. In 1970 that figure was about 4200 a year, per pupil. In 2010 the per pupil per year expenditure was 11,500 – a figure which is not at all accurate according to the census data provided in one of the other threads here.

                      These charts are simply bad. But to rest on this point alone would miss a more salient point about cost effectiveness and education. How does one measure the cost effectiveness of education? Forget about test scores, these bugaboos are great for measuring how good someone is at taking a test or at suggesting the likelihood of future wealth. Is personal wealth the only thing education as to offer us? Aren’t we still the most successful civilization of all time? I know China’s on our heels but, last I checked we still dominate the world in most of the important categories like power and money.

                      And what amount of money would cause us to reach the equilibrium point between expenditures and outcomes? There is not now nor will there ever be a consensus on this because the wealthy will continue to support a system where they pay more and get more while the poor are simply looking for the best option available to them.

                      Finally, teacher’s incomes have not really grown at all over the last 20 years (don’t have the data on 1970-1990 handy). So, I’m going to have to assume that your observation has more to say about policy then the success (of failure!) of teachers union to raise education spending.

                      Hope this clears things.

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                    • Thanks Mr H,

                      Good points. I agree the SAT scores need to be adjusted for numbers taking them, and that all the measures would be improved if adjusted for other factors such as race, income, immigration, special needs, etc.

                      As someone who worked around bureaucrats for thirty years, I am well aware that there are always great reasons to build more, create new programs, hire more, add new red tape, audit more, write more procedures, and give bigger raises. Bureaucracies thrive on this and so do the people that run them. Those that don’t are not attracted to bureaucracies and won’t last if they stumble into one.

                      Bureaucracies are bad,but bureaucratic monopolies (even local monopolies) are catastrophic. There is no effective check on cost effectiveness. Thirty years later, it all adds up to twice as much being spent with no appreciable gain in outcomes.

                      How would I address this inevitability in bureaucracy? I would do the only technique that I have ever seen work. I would encourage schools and teachers to compete for education dollars. I would encourage the creation of institutions which compete to educate more efficiently and effectively. Effectiveness is of course not measured just on results, but on improvement, and based upon the level of challenge. A small gain for a special need kid may be much harder than a big one for a little genius.

                      I am extremely impressed with the tests that my grandson takes in Illinois. They track his performance in all academic fields with amazing granularity. They don’t just score science, but also the component pieces of understanding the discipline. They show where he was, they show where he has progressed, and where his challenge areas are. This is one essential part of tracking learning, but it isn’t everything, There is also graduation rates, success in college, success in later life, and various subjective things that parents and consumer information entities can tabulate.

                      Every parent should be allowed to know how well their dollars are spent and what the composite cost effectiveness of their investment is.

                      I believe there is only one possible outcome in our current system. Increasing inefficiency. Competition and consumer choice offer ways out. The other study I shared validates that freed markets are our best, and probably our only hope.

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                    • Thanks Roger, good discussion.

                      I think tests deserve a place in education and I think there certainly are good ones available. But there’s more and more evidence that tying test results to teacher job security or whether or not a school gets to exist is a recipe for worse, not better long term outcomes. Your grandson no doubt goes to a school where they have a rich curriculum, well trained teachers, and well kept facilities. The results of the tests he takes will reflect this. But many schools, especially ones in urban centers will react to punitive measures by scrambling to do whatever they can to boost their test scores and that usually means drilling students in test-taking techniques. Parents in affluent schools districts reject these methods, why should they be allowed to exist in poorer school districts?

                      Will competition help? Only when schools exist on a level playing field. Throw out the per pupil funding numbers Tom keeps hammering home,in truth, I kind of agree with this line of reasoning. Money doesn’t actually increase results the way, say, better teachers do. What money does accomplish is shrinking class sizes and leveling the playing field.

                      But here’s the thing about competition; besides the fact that competition by definition creates winners and losers and the goal of education is to make everyone a winner, people don’t really want to have an abundance of choices. They want community schools. They want to belong to parent/teacher associations and chaperone Halloween dances with their neighbors and friends. For much of America school choice would be a voucher to opt out of the local public school in order to go to the local parochial school. Expensive prep schools won’t even actor into the equation for all but the best and the brightest, becoming the de facto magnet school for that area. The important thing is that schools receiving public dollars be held accountable in the same ways public schools are. When this doesn’t happen you get poorly financed and run for-profits and zealous, proselytizing religious academies.

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                    • Mr H,

                      I greatly agree. I am not trying to convince you,and I recognize you know much more about the topic than me. Let me add though that I am not arguing for competition within government bureaucracies. I am arguing for structured market competition.

                      I find it unconscionable that schools are all expected to play on an unlevel playing field even though they have totally different populations of students.

                      The point is that I would not want to send my kid to a school that taught him how to take tests so the school can look good. I would not want to send him to the one with best average results either. I want to send him to one where he learns as much as possible to prepare him for life. I do not believe a politically charged bureaucracy is ever capable of that. I don’t think many private firms could do it either. But I think that if given enough time, with enough brilliant and caring minds such as yours that some systems could be built that did a significantly better job than what we have today. Other firms would replicate these successes and add to them. That is the key to progress, and I would not expect it from a monopoly.

                      Yes there are winners and losers, but the competition needs to be set so that what loses is primarily bad ideas or teaching methodologies. If we design a system where parents can choose better firms, better teachers and better methods, then firms will borrow and steal good ideas from each other.

                      I know I am talking pie in the sky. I am talking about a different paradigm from the ground up.

                      And no, I do not approve of the religious crap that parents try to build in. If they want to teach cave men ate dinosaurs, then they need to do that after school.

                      In the end, the question I ask is if you were to start over from the ground up, what kind of education system could be built? I think you could do much, much better than what we have today.

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                    • Roger, thanks for the praise. Countries who outperform us in education are smaller and more homogenous. The best ones, like Finland, are simultaneously top-down and respectful of the teacher’s autonomy in the classroom. In the U.S. financing’s the key and this occurs on the state and local level giving us a sort of patchwork quilt of regional and income diversity.

                      In spite of this our top and middle income students continue to perform well against international competition and have shown some growth over the years. American observers are always amazed at how sparse and limited the facilities are at school in other countries, especially the ones who outperform us on a national level, but in those places education is king, and family pressure to do well in school is much greater than it is here (generally speaking).

                      I’ve argued elsewhere on this site that I think our education system is quite solid. It’s the American culture that needs improving (does this make me conservative?). All this talk about market-based solutions allows parents off the hook somewhat for the immensely important role they have to play in the life-long education of their children. I understand and sympathize with the argument that we pay too much for education. Perhaps creating market-based competition will drive down costs. At the end of the day what we’re really talking about is the high price of educating poor children because those who are better off will continue to have better facilities, teachers, etc.

                      But to answer your culminating question; if we tore it all down and started from scratch what would it look like? I think it would have to start with a clear understanding that parents and teachers are partners in the responsibility of educating children. We’re never going to have a national socialized school system where standards are universally accepted by everyone despite the current attempts being made by Pres. Obama. We’re still a nation with too many regional and economic differences, schools need to reflect and celebrate these differences so children develop a sense of their identity and responsibilities in society. The Puritans created mandatory education because children would one day become adults who would participate in society and they needed to be prepared for this. Today we think of education as a gateway to future financial success, this is exactly the wrong way to go about it. At some point we began looking at schools as a way to close the achievement gap or to give students the tools to succeed and we began measuring them based on this set of unrealistic expectations. Students need to acquire skills so they can be creative and productive members of society, so they can appreciate that knowledge and the life-long pursuit of it are infinitely more valuable than following the path that leads to the right Ivy League school so they can insure job placement post graduation.

                      But let’s get real here, we’ve gone too far down the free market rabbit hole to turn the whole thing around. If I want a school that resembles this sort of thing I can either find one and pay for it or convince other educators to try and create one as a charter. For now, I’m still working on my vision, but I’ll keep you posted when I figure it out.

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                  • The same inflation adjusted cost increase is seen in legal services, financial services (until 2007, likely due to the financial clusterf***), medical services, and veterinary services.

                    Notice a pattern here? Services provided by college-educated and credentialed professionals, not capable of being imported from China, nor under downward wage pressure from illegal immigration.

                    You’re engaging in fallacious, ad-hoc, theorizing rather than any kind of honest search for truth. But… it supports your political commitments so it’s all good, right?

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                    • Exorbitant teacher pensions and dishonest $per-pupil figures.

                      “California ranks number one in the highest pensions for public employees — outranking even New York and New Jersey. Here there are a whopping 856,000 teachers and other school personnel across 1,900 districts currently within the California State Teachers Retirement System. The average pension for each of those teachers in California is $1 million over a 20-year period. Which means we have created a “millionaire teachers” class within the California economy.”

                      http://www.calwatchdog.com/2012/09/21/californias-public-pension-jackpot/

                      See also Cato’s Adam Schaeffer, who as of 2010 wrote that CA jiggles the numbers egregiously on per-pupil spending:

                      http://www.calwatchdog.com/2010/08/20/lausd-spends-30k-per-student/

                      “The research by Adam Schaeffer of the Cato Institute’s Center for Education Freedom seemed shocking: The Los Angeles Unified School District spent $29,780 per student in fiscal year 2007-08. That’s way above the $10,000 as advertised by the school district, and as used in most studies.

                      The $29,780 per student figure means a class of 25 students would spend $744,500 a year.

                      I talked to Schaeffer and had him send me his research, which I’ll append to this article. He also pointed to a more comprehensive study he conducted in March, “They Spend WHAT? The Real Cost of Public Schools,” which tracked and compared school-district spending around the country. It includes data on LAUSD that was updated in his more recent research. The earlier study found a wide divergence in total spending in California school districts, such as only $11,215 for Linwood Unified and $20,751 for Beverly Hills Unified.

                      Basically, what Schaeffer found was that the LAUSD doesn’t count capital spending, such as from local and state bond measures passed by voters.”

                      Playing ad hom on Roger ignores the real problem here, the educrat establishment playing hide the salami on the taxpayer.

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                    • FTR, the legal market is under heavy rate pressure. Not teachers.

                      “Over the past five to ten years, there has been a significant shift in the economics of the legal market. Previously law firms were able to raise rates to increase profit, typically 8-10 percent each year, with costs growing at only 4-5%. These rate increases resulted in increased profit. About 10 years ago, things began to change. The market finally became saturated with a sufficient number of lawyers (a.k.a. supply) so economic forces took over and started to impact prices.

                      Etc. Boldface mine. ;-)

                      http://www.geeklawblog.com/2012/10/the-economics-of-law-and-future-of_26.html

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                  • I’m seriously questioning the hell out of that 30k figure. The richest public schools I’ve ever heard of are less than 10k a student. Texas seems to average around 3 to 5k, with the rich districts hitting maybe 6 to 8k and the rural and urban poor doing it with less than 1500 a year.

                    Suspicious numbers are suspicious, but I’m sure they’re taken as gospel by people who want to believe it.

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                    • The dishonesty in the Cato numbers is similar to their dishonesty on a trillion dollars of welfare.

                      When you count capital construction costs in these figures, they’ll vary wildly depending on when new school construction amd capital development is done.

                      Also, the average cost of tuition obscurs the very, very, very high costs of special needs children, per-pupil. It may be that a public school district’s costs go up 10 or 20 percent just because of a slight increase in the number of special needs kids over the number in private schools. Seriously.

                      I do think there is waste in the public school systems with oversight of teachers and programs to improve teaching and test scores, and all the bureaucrap that goes with it. But that could be cut without scrapping public schools or instituting charters or killing unions.

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                  • There are no superfluous personnel at our school. We don’t even have a full time nurse; the librarian is paid for via a grant, as there is no money in the fund to pay for her out of the general fund. All of the classes are large.

                    I don’t know any of the faculty’s salaries, but I know what the aggregate faculty sum is and it’s not that much. They certainly don’t make anywhere near what I do.

                    Capital expenditures are indeed not counted in the yearly budget, because they’re not paid for via the per-pupil allocation from the state, nor from the supplemental funds we get from the feds for the school lunch program and the economic disadvantaged kids allowance.

                    Note: capital expenditures for private schools are pretty much never put on the budget, either. When the local catholic school rebuilt one of the buildings, that was all special fundraising. No university puts their capital expenditures on their general budget, either.

                    There isn’t enough money, period.

                    Note: the state of California I believe requires all of this stuff to be publicly available. PUSDs numbers are on the web. If Tom wants to see what his local private school spends, he can very likely get their entire budget by looking for it.

                    I think he might be surprised at how much is spent on the actual teachers.

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                    • The point is that capital expenditures are included in other states’ figures. We need to compare apples to apples. CA is playing hide the salami on the taxpayer.

                      Oh look, we just raise taxes [Prop 30] on “the rich.” again. for the children, again. Although it’s bullshit, again.

                      Oh, look–the taxes for the schools go to…the teachers’ pension funds! Who knew?

                      http://www.ocregister.com/opinion/state-379061-tax-budget.html

                      It took less than two weeks to confirm what we suspected: Much of the money from the Proposition 30 tax increases approved by voters is not going to go to schools, as advertised, but to teachers’ pensions.

                      According to CalPensions.com, “More money for the underfunded California State Teachers Retirement System may be considered by the Legislature next year, thanks to new attention from lawmakers and a state budget deficit narrowed by a voter-approved tax increase this month.”

                      Geezus Chrissmus, Pat. People like you are our last hope.

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                  • For those interested, here are the Census Bureau’s statistics on how much is being spent per-pupil. California spends about $9400 while Texas spends $8700. Revenue is counted differently, about $10,600 for each state. Not sure what the deal is with the differential between revenue and spending.

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                  • The article said some don’t. But capital expenditures and pensions seem to be off-budget. Clean numbers, por favor. This is the highest taxed state in the US andeducation gets a constitutionally mandated half or so of revenues.

                    Something’s up, brother, and there ain’t no more money. Something stinks and you need to get to the bottom of it.

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                    • Yes, it’s the figures you cited. They include capitol development — building schools — as part of the per-student costs.

                      That’s akin to assigning the entire R&D of a car company to a single line of cars.

                      Strange as this may seem, those schools will continue to be used by MORE than the current class of students and AFTER the loans have been paid off.

                      Only an idiot or a hack would calculate costs that way.

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                    • Tom:

                      It’s not clear from the CATO source you cite that other states compute per-pupil costs including capital expenditures; it actually looks like the opposite, since they talk about other school districts in other states doing exactly that, excluding capital expenditures.

                      Part of this is undoubtedly driven by expediency – a principal at a public school probably don’t know enough about the capital expenditures at their school, nor about the depreciation factors involved. They report operational costs. The district accounts for capital costs different from operational costs.

                      I get your point; it would be helpful for everybody to know what the real numbers are, if for no other reason “the difference between what we spend per year on teaching and what we spend per year on keeping the heat going is important to note, from a planning perspective.” However, I can also see the flip side to that: if you actually go to the time and expense of calculating all the real costs of a particular school, people are going to compare that with the tuition cost at their local private school, and they’ll be comparing apples to oranges again (the wrong apples and oranges).

                      As to the “the money is going to pay the pensions, not the in-class costs of the school”, the pensions are legally obligated expenditures (as per current understanding, see Tim’s excellent posts on ex-post facto pension obligations). So if the state can’t allocate the funds to that without pulling money away from the schools, they have to do so. Prop 30 may go mostly towards funding the pensions, but it does so by plugging a hole in the general fund, which means there’s no need for additional cuts to in-class expenditures.

                      Look, I’m entirely sympathetic to the shell game accusation, and I’m entirely sympathetic to the problem with the pensions, and I agree that those are separate problems from properly funding the schools. 100% down with you, there.

                      But to properly fund the schools, for their operational costs, they need more money than what they’re getting now, out of the general fund (they’re not likely to get it, but that’s the reality on the ground). Pension reform is going to have to happen, sure.

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                    • Pensions are inextricable from the whole $$. It’s a shell game to pretend otherwise. We’re #1 in pension costs and near-last in $per-pupil advertised figures. Something’s not adding up.

                      Did you know when you voted for Prop 30 that it was the shell game, that the bleat about “the children” was a fiction? [Those who voted “no” sure did.]

                      As for the zillions in bonds we float, that’s an area I haven’t even got to. Because it won’t make a goddam bit of difference in our state, which has just gone off the cliff.

                      http://www.calwatchdog.com/2012/09/24/what-school-bonds-pay-for-from-san-diego-to-burlingame-the-crime-is-whats-legal/

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                    • Did you know when you voted for Prop 30 that it was the shell game, that the bleat about “the children” was a fiction? [Those who voted “no” sure did.]

                      Yes. The issue was, the solution to the problem wasn’t on the ballot. Plugging the dike for the next three years was.

                      I know, the flip side to that is that it encourages everyone to ignore the pension problem for another three years. I don’t fault you for voting “no” on it.

                      I honestly don’t know how to fix California’s problems, at this point, without a Constitutional Convention. We are just seriously screwed up. Breaking the state into two or three pieces seems the least suboptimal solution, and that says something, right there.

                      Some times, you really do need to take off and nuke the entire site from orbit, just to be sure.

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                    • From the Wall Street Journal-
                      http://online.wsj.com/article/SB10001424127887324712504578137291855163334.html

                      Apparently The Marketplace thinks California is doing better, especially since the moochers approved the higher taxes…

                      According to Mr. Donahue [managing director at research advisory firm Municipal Market Advisors] “California is “lucky Proposition 30 passed, because if it didn’t, we’d be having a different conversation right now.”

                      But I am sure Mr. Donahue is a communist or something.

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            • Didn’t feel like stepping into this subthread about McShizzle whatever, but this:
              “California has strong teacher unions if I’m not mistaken and performs not so well ”
              Check out this LAUSD public school, with its awful unionized teachers:
              http://en.wikipedia.org/wiki/El_Camino_Real_High_School

              Short story, this high school has long been a stellar performer, near the top nationally, all the while being part of LAUSD.
              At the same time, some of the worst schools are also LAUSD;
              Some of the worst schools are also private or charter schools.

              In other words, using unions as a driver of poor performance in schools is nonsense. If you have a beef with unions, leave public schools out of it.

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                  • What is the empirical case for the claim that

                    a.) Unions cause lower test scores or worse education

                    b.) A Nordic European level of government spending (or involvement more generally, a la a minimum wage, or rules on the selling of health insurance) on education, healthcare, unemployment insurance, and childcare causes lower quality of life or worse economic growth.

                    Cite the specific evidence yourself, please.

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                    • On unions, the argument is based on efficiency. I am not aware of anyone making a case that unions drive test scores down, though I would be open to reading it if anyone has a link. Our argument is that unions and government monopolies drive the price up. See my link at 3:12 today to Mr Harris for the Cato study.

                      Better yet is the killer of all studies on the effect of government monopolies vs competitive markets in education. The case is solid. Markets are the way to go for effective education…

                      http://www.cato.org/pubs/articles/coulson_comparing_public_private_market_schools_jsc.pdf

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                    • Roger, both of you airtight, slam dunk Cato papers are full of holes and simply not the effective arguments you would like them to be. I’ll be working up my complete rebuttal later this evening.

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                    • So, the problem of education that we are all discussing is that the U.S.has low test scores.

                      But unions do not contribute to that problem. So getting rid of unions, or using non-unionized labor in charter schools, will not improve education in the U.S.

                      Glad we got that problem out of the way.

                      I agree that killing unions will reduce teacher pay. But teachers love students, so they will provide the same value of work. So yes, killing unions would make education spending “more efficient.”

                      It would also drive more and more people out of the middle class, thus lowering overall spending and demand for consumer goods and service, thus harming the economy. And the damage to the social fabric as we kill the middle-class will be incalculably bad,

                      But that is what many of your policy preferences: killing private and public sector unions will do.

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                    • The data that tracks prosperity and economic freedom by country is here.  In general, countries with less regulatory interference in markets get better scores, and better scores are strongly correlated with prosperity. 

                      http://www.heritage.org/index/ranking?src=home

                      And here is a study for Sweden, showing that it has thrived when relatively free and choked up when regulation and taxation have become onerous. 

                      http://www.iea.org.uk/sites/default/files/publications/files/Sweden%20Paper-%20revised.pdf

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                    • Thanks Mr H,

                      I’ve posted the study on free markets a half dozen times and everyone keeps promising to tear it apart, but nobody has followed through yet, I appreciate learning more about it from you.

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                    • Roger,

                      Regarding the Heritage (hacks all of them) economic freedom study. Wikipedia has this:

                      “Critics such as Jeffrey Sachs have contested the Index’s assumption that economic openness necessarily leads to better growth. In his book The End of Poverty, Sachs graphed countries’ ratings on the index against GDP per capita growth between 1995 and 2003, claiming to demonstrate no correlation between a country’s rating and its rate of economic growth. Sachs pointed out, as examples, that countries with good ratings such as Switzerland and Uruguay had sluggish economic performances, others, like China, with poorer rating had very strong economic growth.[19]
                      The UAE questioned the rating of their country’s economic freedom in 2008, comparing its middling rating with the high rating they had received from other indicators such as Transparency International and Moody’s. They also argued that the report is “unreliable”, because its methodology had changed twice in the last two years.[20]
                      Stefan Karlsson of the Ludwig von Mises Institute, challenged the usefulness of the index due to the fuzziness of many of the categories used to determine freedom.[21] John Miller roundly criticizes the “Index”, writing in Dollars & Sense, “In the hands of the Wall Street Journal and the Heritage Foundation, Washington’s foremost right-wing think tank, however, an economic freedom index merely measures corporate and entrepreneurial freedom from accountability. Upon examination, the index turns out to be a poor barometer of either freedom more broadly construed or of prosperity.”[22] According to Left Business Observer, the Index has only a 33% statistical correlation with a standard measure of economic growth, GDP per capita.[23]”

                      In brief, the measure is useless. It doesn’t measure economic growth. It doesn’t measure human well-being. It doesn’t measure happiness. It just measures a country’s level of (usually) corporate regualtion.

                      Singapore and Hong Kong come out well on this study, because they are weird cases: more cities than countries.

                      —-

                      We’ve been over the Swedish case. But it’s one data point. ademnark, Germany, France, Canada, the U.K. all do well by GDP measures (slightly less than the U.S.) but better by measures of quality of life and equality of opportunity.

                      There is very little reason evidence to suggest that U.S. GDP, economic strength is even partially caused by lack of a stronger social safety net, universal health care, more education subsidies, or lower taxes. Just none at all.

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                    • Shazbot,

                      Your same argument was made when we started making agriculture more efficient. And when we threatened the living wages of the home weavers. And then we went for the buggy whip manufacturers.

                      Economists realized that prosperity does not come from saving jobs or paying people high wages. It comes from being more efficient and productive. This leads to high living standards.

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                    • Also, here is what I would say about the Hoover paper (too bad that Noah Smith, actual economist, already said it):

                      “I see that Kip Hagopian and Lee Ohanian have written a lengthy article about inequality. It’s hard – no, impossible – for me to summarize the thesis of the piece, because it’s basically a huge smorgasbord of loosely related, unrelated, and even contradictory reasons why the United States government should not redistribute income…. There’s no thesis here, other than the idea that “income redistribution is bad.” I think this reduces the credibility of the authors. Hagopian and Ohanian clearly started from a policy conclusion (“income redistribution is bad”) and went in search of reasons why this might be true, then went in search of data that supported those reasons. That’s exactly the reverse of how I think scientists ought to do things. First you look at the data, then you make sense of it, and then you decide which policy makes the best sense. The fact that Hagopian and Ohanian seem to have done the reverse of this makes me think “Oh, here are another couple of guys who want lower taxes on the rich, and will grab hold of any theory or statistic that seems like it supports lower taxes on the rich.”

                      In brief, there isn’t an argument in the Ohanlian paper. There are some claims that may or may not be true, but no argument that shows that the inequality that I cited in the Lane Kenworthy paper in Foreig Affairs isn’t a massive problem in and that it can’t be solved by moving to a more European level of public education and public healthcare.

                      The study hasn’t gotten much attention precisely because it is such a mess, IMO.

                      Read the whole thing by Smith, it is fair enough:

                      http://noahpinionblog.blogspot.com/2012/08/flinging-spaghetti-at-inequality.html

                      This is quite good, too, and fair:

                      “The [apparent] implication [of the data in the Ohanian paper] is that income inequality reduction leads to absolute income reduction.

                      We see a similar divergence of opinion in interpreting the following map (showing income inequality per country). Max Fisher gives a negative impression: “[l]ooking for the other countries marked in purple gives you a quick sense of countries with comparable income inequality, and it’s an unflattering list.” Jason Brennan (to whom I owe the hat tip) presents the two alternative interpretations. The one attributed to the second group: “…inequality matters less than I thought.”

                      Does inequality matter? If you take a look at the above-linked map, you’ll notice (as Fisher points out, but poorly interprets) that the list of countries that “out-compete” the United States on income equality include: Russia, Morocco, Spain, Greece, Algeria, Italy, Tunisia, Egypt, China, India, etc. However, the average American lives a higher quality life, in terms of income, than the average citizen in these countries. To this extent, it seems inequality doesn’t matter. Yet, there are countries on the list with equally high living standards (or, even greater living standards): Sweden, Norway, Germany, Canada, et cetera. The map sends mixed signals.

                      What this suggests is that there is an alternative, third road: income inequality matters to some semi-ambiguous extent, but there is no obvious reason to emphasize this quality over others. Further, there are means of reducing income inequality that don’t lead to national poverty or State-heavy, stagnating markets. I’m going to continue to stress the role that the banking industry plays in creating income inequality, although I realize I’m a bit heterodox in holding this position. Reforming banks will go greater lengthens than increasing welfare, and at a much lesser cost — actually, with net benefits.”

                      http://www.economicthought.net/blog/?p=2478

                      I agree about the banking thing, IMO. But the stronger safety net is also necessary.

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                    • Roger, I don’t quite know what you’re referring to in the agriculture case. Efficiency is a good thing when it leads to us as a society spending less resources (time in labor, natural resources, land use, etc.) to get the same or greater level of overall production, e.g,more bread, more textbooks, more kids that can do math, more flying cars, etc.

                      But that likely won’t happen with paying teachers less while paying them the same amount. Sure, the government (state and local in this case) could cut teacher salaries to closer to minimum wage and spend the savings on tax relief. But the lower salaries of such a large group of workers will lead to lower spending, which will lower consumer demand, which will actually make the economy as a whole, less efficient.

                      It is true that there is a theoretical level of taxation and spending that could kill or slowdown the market, but it is not, say, Clinton era rates of tax and spending. Nor is there any reason to think that it Swedish or Danish levels. Those places do very well and we did better under Clintonian rates and levels of spending.

                      All the empirical evidence states that things like the GI bill, the union movement to establish manufacturing as a middle-class job, socialized medicine, free public education, social security, banking regulations, and similar government interventions make the market work better, indeed more efficiently, than it otherwise would.

                      I get

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                    • Related: Teachers union kills vouchers for poor kids. The mainstream news didn’t cover it, so appologies for the “unapproved” source.

                      http://www.nationalreview.com/corner/334568/judge-overturns-la-voucher-program-lindsey-m-burke

                      “The LFT is preventing parents from doing what they think is best for their children,” Louisiana schools superintendent John White said. “It’s time to return our focus to teaching and classrooms, but the LFT keeps dragging us back to politics and courtrooms.”

                      Nearly 5,000 students are enrolled in more than 100 private schools this year thanks to the Louisiana voucher program, which allows children from low- and middle-income families in underperforming schools to attend any private school of their parents’ choice. Sadly, union thuggery now jeopardizes the future of this successful model of school choice.

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                    • Tom,
                      Your unfortunately one-sided National Review article seems keen on overlooking the simple fact that Gov. Jindal has enacted a law that violates Louisiana’s state constitution. Also, the author conveniently fails to mention that there was a broad coalition of professional organizations (the La. Association of Educators and the La. School Boards Association) who were also named in the lawsuit along with the state teachers union. The fact that only 2% of those eligible actually applied for the vouchers tells you how excited these people are to use this program. There’s actually millions of tax dollars being spent by these schools to advertise their services. The Gov. and the State Board of Ed. will no-doubt appeal the lower court’s ruling so we’ll just have to wait and see how this plays out in La.’s racist Supreme Court.
                      http://www.nytimes.com/2012/07/20/opinion/bayou-blues.html?_r=0
                      Folks, it’s a teacher’s union’s job to advocate for its members and yes, often that means fighting programs or laws attempting to minimize union strength such as is the case here. But, more to the point, let’s take a look at the schools that voucher recipients will get to “choose” from.
                      Of the 119 private schools to choose from, most are Christian schools that use a bible-based curriculum. Nearly 1 in 6 will push creationism as science. Mother Jones poured through the Bob Jones University Press textbooks many of these schools will use (your welcome).
                      http://www.reuters.com/article/2012/06/01/us-education-vouchers-idUSL1E8H10AG20120601
                      For a complete explanation of the diverse and not-so-good choices available to those with vouchers check out this from Reuters:
                      http://www.reuters.com/article/2012/06/01/us-education-vouchers-idUSL1E8H10AG20120601
                      La.’s public schools are indeed a mess, and parents should demand and receive better options for their children, but what’s going on in La. is pretty shameless. And yet, it’s nice to know that the good folks at the National Review are doing the hard work of identifying the real villains in all this: those greedy, public school teachers and their big bad union.

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                    • Sorry Tom, been up and down these threads and I have no idea which post you’re referring to. Even went to Jason’s previous articles. Perhaps you can re-link it for me. Otherwise, you’re still avoiding my arguments and repeating your talking points.

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                    • You Democrats gotta get real and stop fronting for the public unions. They are our common enemy, and Rahm, Cuomo and Villiaragosa all see the writing on the wall.

                      http://reason.com/archives/2012/11/19/unions-vs-democratic-mayors

                      The Louisiana union’s concern was selfish in killing the vouchers for poor kids. That they did it for any public good is a laugh. And that’s how it relates to JasonK’s post[s].

                      As for trying to turn this back onto republicans, that’s the tried and true tactic, but it won’t wash. The teachers unions are sacrificing the good of the kids for their own power and they deserve the stinkeye. Attacking the other side is just a diversionary tactic.

                      Get real. These guys are killing us, both in looting the public treasury and blocking educational reform.

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                    • Tom, you keep wanting to make this about how evil public employee unions (or is it all unions?) are – probably becaue thats where you think your arguments are strongest. A for effort, for sure, but I’m really only concerned with what’s going on down in Louisiana and on that score your points are difficult to square. If you want to have a larger argument about the efficacy of voucher programs we can do that dance as well.

                      Bottom line, the private school options available to kids with vouchers in Louisiana are absolutely regressive, unaccountable, unconstitutional, and a recipe for further educational neglect. If this is your idea of “choice” or “freedom” or whatever other focus tested buzz word you want to use than you and I have entirely different definitions of how municipalities should conduct the business of public education in this country.

                      As a delegate for my large public middle school in Brooklyn, NY I get to see from the inside how the nation’s largest union operates. Sure, it isn’t always pretty. Sometimes the personalities and points of view are positively cringe-worthy. But as a democratic body comprised of hundreds of thousands of diverse members who make all major decisions with outstanding majorities of 80-90% vote in a parliamentary proceeding. During the clean-up of Super Storm Sandy I helped with the union’s effort to mobilize an army of teachers to visit places hardest hit. We spent days cleaning, shoveling, and delivering supplies. I can’t tell you how many hours I’ve spent with my union brothers and sisters cold calling people to make sure they went out and voted on election days.

                      Does the union endorse certain candidates? Of course it does, that’s what politics is all about – picking the side you think will do the best job for all concerned. Are unions focussed on the interests of their members? Of course they are, that’s the point of the union. Public opinion blows with the wind, but as a professional I like to think I know a little more about what’s best for children and schools than they, or the politicians do.

                      Certainly the pension question is a real issue, but what you see accross the country are unions willing to negotiate settlements in the spirit of compromise. Don’t kid yourself, one side is more interested in negotiating, the other side is more interested in scoring political points.

                      Louisiana’s public school teachers and their allies stood up to a horrible policy decision and for that, they’re heroes.

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                    • But Tom, more to your point about the Democrats and the unions not getting along; actually makes me very happy. To the extent that any of the mayors you mentioned are or were progressives or pro union, show me the evidence.

                      It would probably be nice and easy to compartmentalize unions as this or that ideology/political affiliation, but that’s proving not to be the case. Rahmbo learned the hard way that swearing and offending may have worked in the White House, but it ain’t going to work in Chi Town.

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                    • True, Mr. Harris, I resist your changing the subject. The kids got screwed by the union’s selfishness, and they are no heroes.

                      And I’m hoping that there are genuine reformers in the Democratic Party [and there may be some]

                      http://reason.com/archives/2012/11/19/unions-vs-democratic-mayors

                      who will stand beside the Scott Walkers and start to straighten out this corrupt mess that has brought us to the brink of disaster.

                      But as a democratic body comprised of hundreds of thousands of diverse members who make all major decisions with outstanding majorities of 80-90% vote in a parliamentary proceeding

                      Such groupthink would be hilarious if it weren’t so creepy. In states like California and cities like Chicago, it’s up to the Democrats now to stop you. I hope they find the guts.

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                    • Yes indeed. Go Democrats and put a stop to the overwhelming and powerful forces marshaled by women named Ms. Rozenthal, she of the Dyker Heights Roenthals.

                      Put an end to the tyranny of middle aged straphangers with their sweater vests and their aged canvas satchels. Their power and influence is stronger than all the Walton’s, Kochs, Gates’, and Broads combined. Bring these poor wretches who couldn’t “do,” so they taught to their knees. Their pensions, mutually agreed upon with the elected powers at be who bare none of the political cost for making these deals in the first place, will surely throw this great nation into the darkest night. They must be stopped with extreme prejudice if necessary, there benefits extracted, and their rights of collective bargaining crushed before these thermos toting, coffee drinking fiends deliver our nations children into the deepest pits of hell.

                      Or… Maybe elected officials could work with the people tasked to do the job of educating children rather than demonizing their union and resorting to sky is falling claptrap just so they can get the credit for “turning the ship around.”

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                    • <blockquote?Their pensions, mutually agreed upon with the elected powers at be who bare none of the political cost for making these deals in the first place, will surely throw this great nation into the darkest night.

                      Sarcasm won’t mask the fact that public pensions [corruptly arrived at via Democrat self-dealing] are a grave threat to the nation’s economic stability.

                      Public unions taking over the Dem Party became self-dealing, which is corrupt. It’s going to take a lot of guts for Democrat leaders to undo this disaster, but the Dems sold us out, and in places like CA and Chi, are the only ones empowered to fix it.

                      Although in WI, the majority were willing to let GOP Gov. Scott Walker be the bad guy and do what’s needed to be done. Lucky us.

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                    • Your right Tom, Democrats and their unions are WAY more corrupt than Republican state legislators who’s generously taken it upon themselves to gerrymander the hell out of all the voting districts so that their Representatives can languish in an indefinite incumbent stupor. The Karl Rove strategy was brilliant and he deserves his due for this, but lets not pretend that one side is playing the game more or less fairly than the other.

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  6. I double checked the date to see if this was opposites day. I still think this is a prank, but…

    1) if we raise the price of something, we can expect to get less of it. Are you really sure you want fewer low skilled, entry level jobs?
    2) if someone doesn’t think they can live off this wage, don’t you think they would do something else? Isn’t it possible that most of these people aren’t trying to live entirely off the wage?
    3). If you raise the minimum wage, and someone can’t get a job because they are less qualified than the other applicants, why do you want to force them to not offer to do the job for less? Are you really sure you are helping them?
    4) McDonalds is offering them a job. You are offering them nothing. Why are you requiring McDonalds to pay more? If it bothers you they dont make more, why don’t you offer to make up their salary to whatever pleases you? In other words, don’t you feel guilty about forcing others to live by your values?
    5). This top down tinkering with the market is not helping recent employment trends. Minimum wages, mandatory licensing, mandatory full time employee benefits, government union wages and pensions, etc etc. If this keeps up we will soon have the standard of living and unemployment rates of Europe.

    We have ( too rapidly) growing safety nets for the truly needy. We have low paying jobs for teens and people who need to supplement their income. We have the highest standard of living of anywhere in the history of the human race. We have class mobility that is as good as ever except in one area as covered in prior discussions.

    The more we interfere with markets, the more we will raise unemployment and the less well off the poor and all of us will be. Obamacare is looking like it is going to be a major blow to the unskilled, let’s not double down on the damage that comes from economic illiteracy.

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          • Then why can’t you educate me on where the error is?
            Show me where the economics reveals substantially raising prices on wages creates more demand for it? Show me how the unemployed are better off than the employed? Show me how the one offering a job is the bad guy? Show me where more top down master planning of markets improves prosperity vs the alternative of freer markets?

            I am fine with Christopher or you boycotting whatever your conscience tells you to. But I can’t figure out why you think a substantial increase in mandatory wages is going to help anyone other than your conscience.

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            • No, actually you are correct in some regards-
              Yes, raising the price of something does lower the demand.
              Sometimes a lot, sometimes a little. Elastic/ inelastic demand and all that.

              So we can show empirically in the fast food industry that raising wages such as by the minimum wage law incentivizes employers to find alternatives like automation such as computerized cash registers.

              But- there are not infinite alternatives to paying higher wages. Automation can only take you so far.

              As we have seen with most minimum wage jobs, while the higher price may restrict slightly the number of employees, the price is passed on to the consumers who ultimately pay for it. The demand for fast food has not been damaged by the minimum wage laws that anyone can tell. Meanwhile, the benefit of the minimum wage laws is that consumers pay slightly higher prices, and the employees are able to be productive consumers themselves.

              And top-down master planning? Empirically we can show that it does improve prosperity, in some circumstances. When the government creates infrastructure such as road, it is normally with the intention of facilitating trade. Government can build roads faster, cheaper, and easier using the power of eminent domain and taxes. This is top-down planning, since it is government deciding which enterprises are to be favored with access, and where and under what conditions. When the government decides that investment income is different than earned income, and taxes it less, that is top-down planning intended to spur investment, not consumption.

              What normally gets missed in these discussions is the concept of moderation and balance.
              That there are limits to how much benefit we get from unfettered economic frreedom, and there are limits to how much benefit we get from top-down master planning.

              Yes, there is a point at which a minimum wage can become an economic drag, just as there is a point at which creative destruction is no longer creative, but just destructive.

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    • Roger, I like you, so I’ll reply to what you wrote one passage at a time, although concisely:

      “I double checked the date to see if this was opposites day. I still think this is a prank, but…”

      It’s not opposite day. That’s 12/12/12. I think you’ll probably strongly disagree with what I write on that day.

      “1) if we raise the price of something, we can expect to get less of it. Are you really sure you want fewer low skilled, entry level jobs?”

      I support technology, so yes, essentially.

      “2) if someone doesn’t think they can live off this wage, don’t you think they would do something else? Isn’t it possible that most of these people aren’t trying to live entirely off the wage?”

      I imagine they would do something else if they could, but, as a well-educated, well-qualified someone who spent six months searching for a part-time job full-time until he finally found one, plus a year and a half searching for a full-time job full-time (see several of my past posts), and who now, for the last three weeks (future post) has one, I would strongly say no – that even if you are well educated, qualified, and articulate, as I like to believe I am, you will have difficulty finding a job; you might even struggle getting employment at a fast food restaurant due to the absurd shittyness infecting our labor market.

      Four months into my job search, I would have considered myself lucky to have been able to work at a fast food restaurant. Unfortunately, the several I submitted applications to never contacted me. I can only assume they weren’t looking for anyone.

      “3). If you raise the minimum wage, and someone can’t get a job because they are less qualified than the other applicants, why do you want to force them to not offer to do the job for less? Are you really sure you are helping them?”

      I don’t really understand what you mean here. Could you elaborate?

      “4) McDonalds is offering them a job. You are offering them nothing. Why are you requiring McDonalds to pay more? If it bothers you they dont make more, why don’t you offer to make up their salary to whatever pleases you? In other words, don’t you feel guilty about forcing others to live by your values?”

      No, I don’t feel guilty. Rather, I would refuse to eat at McDonald’s if I weren’t already doing so for common sense reasons. I think increased consumer consciousness/shunning in extreme cases is a good model for a libertarian. Regarding your insinuation that, if I believe the government should force everyone to pay for the defectors/downtrodden to have a living wage, then why don’t I make up the difference myself, I assure you that I have tried the best I could with my time over the past year and a half. Even though I could not find a full-time paying job until recently, I spent approximately six hours a week volunteering in healthcare for homeless individuals; although I admit that I would not have done that if I had actually been able to – despite constant efforts – find a job, since my own family was living well below the poverty level at the time. Nor do I believe that anyone should be compelled to subsidize laziness. Rather, I believe that it is in the interest of society to subsidize the temporary downtroddeness of individuals, and empiricism vindicates me: just look at the successes of microfinance. And, as someone who personally depended on the welfare state for some time, if I ever achieve a position whereby I am able to impact society for the better, that also vindicates the welfare state.

      “5). This top down tinkering with the market is not helping recent employment trends. Minimum wages, mandatory licensing, mandatory full time employee benefits, government union wages and pensions, etc etc. If this keeps up we will soon have the standard of living and unemployment rates of Europe.”

      This seems like politically-motivated witchdoctory to me. Who and who isn’t blinded in the experiments you reference, and/or what is your deductive reasoning process that allowed such conclusions, and/or what are your X^2/p values in asserting that?

      As an aside, what’s wrong with the standard of living in Europe? The last time I checked, a majority of EU countries had objectively better health care systems that we do, and certainly living in the cradle of Western Civilization can’t be all that bad? The food must be good at least!

      “We have ( too rapidly) growing safety nets for the truly needy. We have low paying jobs for teens and people who need to supplement their income. We have the highest standard of living of anywhere in the history of the human race. We have class mobility that is as good as ever except in one area as covered in prior discussions.”

      I’m not saying things are bad; but they could be better. Much better, I think.

      “The more we interfere with markets, the more we will raise unemployment and the less well off the poor and all of us will be. Obamacare is looking like it is going to be a major blow to the unskilled, let’s not double down on the damage that comes from economic illiteracy.”

      Well sir, I agree that markets should be preserved wherever outcomes coincide with our values. (And in general, as a libertarian, I strongly support markets.) But I will assert that human values ultimately govern everything. (That is, actually, the founding principle behind the blog I was involved in before I came here.) I’m still waiting for you to provide some sort of logic/empiricism/rationalization for your assertion that Obamacare – i.e. providing for poor people’s medical needs – will somehow hurt those same poor people. Should we instead opt to let them die health-care-less? Or should we continue our present system of treating them out of ethical obligation and then just eating the cost? Which do you prefer? Or are you suggesting that trickle-down (for which there is little empirical evidence in our present system) is enough to eclipse an immediate lack in the necessities for human existence? Because personally, I’d rather have health care than slightly cheaper shampoo at Walmart.

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      • Good morning Chris,

        You admit the demand for entry level employees at the current allowable wage is pathetic and back up the claim with personal data. You seemingly acknowledge that raising the minimum wage will further reduce demand, but you are asking for it anyways. I read this as saying lets go ahead and make a bad thing worse. 

        By point 3) I meant that  I fail to understand how it helps someone to be not offered a job.  Specifically it hurts the least skilled the most.  Again, your recommendation is to make a bad thing worse. 

        I already agreed with you last night on the freedom to boycott whomever you want to, though I see it as an act of good intentions and bad secondary results. I am also a strong fan of an effective safety net including medical care. I believe the safety net did what it was intended to do in your case, and should continue to be used in this way rather than having low skilled jobs eliminated. 

        On point 5) you accuse me of witchdoctory for making the case that artificially raising wages will result in higher unemployment, and lead to a lower  overall standard of living. I am unaware of any economic controversy in these claims.  Indeedthrough kind of almost agreed above. What are you suggesting the minimum wage and maximum benefits be? 

        The problem with Europe is that unemployment is as expected higher. Growth lower. Standard of living is substantially lower, outrageously so.

        http://www.hoover.org/publications/policy-review/article/123566

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        • Roger, this piece isn’t about the minimum wage, which I’m more or less against (earlier post) for the reasons you stipulate. I do, however, support a minimal income. Clearly what I’m advocating here is public support for fast food unionization – at least in New York City, and the recognition that unions and markets are not antithetical.

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    • So mich to disagree with. Mostly the idea that a larger welfare state is bad for quality of life or unemployment is just completely unsubstantiated. (The reverese might be substantiated.)

      Look at quality of life metrics for places with a stronger safety need and more generous help for the poor and working class: Sweden, Denmark, Canada, France, U.K., Germany, Australia, etc.

      Their unemployment rates on average are either slightly better or slightly worse than the U.S., a bit better now.

      While quality if life surveys consistently rank most of these countries above the U.S., if you put stock in object measures of quality of life.

      You’re trying to blame the welfare state in Greece or Italy for their current woes and that is just factually wrong. All of their problems are due to the failures of the Euro as a currency project.

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      • I’ve previously provided the data on historical unemployment, standard of living, and long term growth rates.

        I guess current European unemployment could be better today than in the US, but could you link me to the data so I can add it to my files?

        I am not really interested in quality of life surveys, but I would love to see per capita spending comparisons on the poor. I just looked at education per capita and we were the highest spenders. Do you have the other data?

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  7. There’s a difference between organizing a shop and organizing an industry.
    From what I’ve seen, unions tend to work best when they maintain some manner of certification program for their members. The hall then operates as the HR dept. But the skills have to be portable from one company to the next.
    In this model, a worker would be able to go from Wendy’s to McD’s to BK and perform at near-optimal level with very little or no training; and they would likely make that circuit as the need for manpower fluctuates among the signatories.

    There are other issues which are legitimate issues in unionization, but I haven’t seen them touched on yet.
    The big one is that a union doesn’t make it harder for a worker to be fired, but changes the rules for doing so. The pieces on the gameboard start out in a different position; that’s all.

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      • To some extent.
        The power of firing people (or lay-offs, which is much more common) is transferred to another person, who is often in control of, or has undue influence in, the grievance process.
        It invites personality & internal politics to come to the forefront.
        “Lack of production” and “insubordination” are two of the biggest causes for firing.
        A lay-off would typically be “reduction in manpower,” which may actually be real or perceived above causes in nicer wording.

        I’ve been fired myself for having a camera pass issued to me by security, which was the sole issuing authority for camera passes.

        I see nepotism & discrimination regularly.
        I myself am subject to a great deal of discrimination from members of my own union, because 1) I was organized in, and 2) my “home local” is in another state.

        If you’re in a situation where your superintendent is your steward as well, you’re not going to have much representation in the grievance process.
        If the business agent has a choice between a local hand and a traveler in a grievance hearing, the traveler doesn’t stand a hope.

        There’s just as much, if not more, opportunities for under-handedness, but all manner of recourse is foreclosed.

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    • Will H.,

      I’ll answer your post by not addressing specifically your very good points, but going off on a tangent that might help refine what you say (in other words, I’m going to basically do my own thing while claiming that I’m addressing your comment):

      I think the why’s and wherefore’s, in’s and out’s of unionizing depend on the shop and the industry. What is true from your experience and observations might be very different in a fast food industry (unless of course your experience is with union shops in fast food restaurants, in which case my point is vitiated!). The union certification program, and the union-hall employment program seems to work best in trades that require a lot of formally acquired skills. My father, a journeyman electrician and member of IBEW, had and as far as I can tell, benefited from that type of an arrangement. (The counterexample might be longshoremen unions. That is a very skilled job, but to my knowledge it doesn’t require the same formal apprenticeship system that electricians had to undergo when my father entered the work force. Yet their west coast union seems to have adopted the union hall technique.)

      Organizing the fast food industry–with a union card for transferring employment–might not work, or at least if it were imposed might be something I would not endorse because of what I would perceive to be its effect in foreclosing employment to people not already in the union. (Such is one problem or cost with union shops generally, of course.)

      I guess I’m thinking out loud, and having written what I’ve just written, I’m not sure I’m making much of a point or even saying what I thought I would at the outset. Still, I’m going to click “submit.”

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      • Just a few observations:

        As far as the IBEW goes, their training program has gone to where the apprentices receive a bachelor’s degree at completion, from what I understand.
        Our guys get an associates in applied sciences.
        My own specialty is something of a blend of mechanical/electrical engineering. I didn’t get a degree because that was before my time, and I was organized in. I did my college on my own time; first through academic classes at a community college, then through vocational classes at a different school.

        Yes, I understand what you mean about shutting people out of employment, and with fast food, the high school kids in particular would take a hit.
        Still, I could see the need for training & certification in sanitizing equipment and the like, blood-borne pathogens, etc. that would be portable as universal within the industry.

        I’m not sure about the longshoremens’ apprenticeship, but my own union now has a heavy rigging cert that is required for much more than what it’s actually needed for. That’s the bad part about certs.
        For example, an 8000 lb choker will hold 4000 at a 45 degree angle. Of course, three of them at that angle will hold 12,000 lbs.
        Still, I see some things, stupid mistakes, going on with rigging from people that really ought to know better.

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        • Thanks for your answer. I should say that my father would have entered the workforce in the early 1950s (he was born in 1932), and I suppose that was before the BA-and-a-handshake system that appears to have developed since then. In fact, my brother, who is also a journeyman electrician (and was born, if I recall correctly, around 1960), also didn’t get a BA (in the early 1980s). I imagine that by that time, the industry was probably already experimenting with the BA system you describe. (Other than the personal information on birthdates of my family members, the rest of this is mostly speculation on my part….I don’t know many of the facts.)

          As for this, “Still, I could see the need for training & certification in sanitizing equipment and the like,”

          You’re probably right, but I’ll point out that one place I worked at* required me to get a “health training certification” (that wasn’t the real name), which in practice seemed to operate as a kind of $5 tax. I went to some government office (in downtown Denver), and took a “test” about food safety. For the “test,” I was allowed a cheat sheet in a language of my choosing (Spanish or English), with all the answers on it, and the answers on it were obvious anyway to anyone who has ever heard of the germ theory of disease. In addition to being what was to me a very transparent way to charge workers $5 to the government for the privilege of working, all the test really did was to verify a minimum level of literacy. (And I wouldn’t even be surprised if they had special provisions to help people who couldn’t read, provided they pay the $5, of course.) This was in 1998, so things might have changed since then.

          * It was a bagel shop, which was probably a step up from Mc-fast-food. For the sake of simplicity and not to identify the company, I’ll call it “Enrio Fermi’s Bagels.”

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          • Blood-borne pathogens was one of the modules covered in my OSHA-10 training; one of the few I thought would be applicable to fast food workers.
            The awarding of degrees is something that just came in around the last 10 to 15 years or so.

            There have been a number of changes for the better over the last 50 years.
            One of them is the dobie system. A “dobie” was a fee that a worker was charged for being on a job. It was typically collected weekly by the steward, and sometimes arbitrarily determined. That has been replaced by “working dues.” I pay monthly dues to my “home local” (currently $34/mo.) and then working dues to the jurisdiction that I’m in of up to 3% of the gross. A lot of places have mandatory “donations” that are taken out of the check; 50¢/hr for the apprenticeship fund, or a percentage for a “target fund,” which goes to make low-cost loans for the contractors to off-set the price of union labor. Those are the more common ones.

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  8. Good post. I’m not sure I agree with your explanation for why fast food workers are seeking to organize now rather than in the past.

    My theories, with nothing really to back them up:

    A) Immigration enforcement, or the fear of it. There are fewer undocumented workers doing these jobs because 1) fewer are immigrating, 2) more are being deported and 3) fewer companies are willing to hire them.

    B) The various protest movements we’ve seen over the last few years, the Tea Parties, Occupy Wall Street. Organizing is in in a way it hasn’t been in decades.

    C) Food TV. I know for me personally, my views on the restaurant business has changed completely from watching Gordon Ramsey on Kitchen Nightmares and Hell’s Kitchen. I now recognize that running a crappy restaurant is a choice.

    Rather than choose to sell quality food, these fast food joints chose to go for the “ubiquitous, cheap, and gross” model. I mean, yes, these companies have proven you can make money by selling an inferior product and paying low wages to the workers .

    But that ain’t the only way to do it, man….

    If the threat of a unionized workforce makes them rethink their business model, good for us!

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  9. When it comes to unionization or raising the minimum wage, the libertarian argument often sounds like this to non-libertarians like me:

    Whatever people are getting paid is the right amount because they’re agreeing to work for that wage and their employer is agreeing to pay them. Unless it’s a union or minimum wage thing, then they should be getting paid less.

    But that’s not really the libertarian argument, or at least it’s not what most libertarians seem to argue. Instead, they might point out that minimum wages price some workers out of the labor market and raise prices to consumer, and that unions–or more accurately, compulsory union membership, buttressed by state-tolerated “union shop” rules–operate in a way that restricts the number of jobs available and also raises prices to consumers.

    Now, here is is perhaps an ad hominem I might have avoided making but that I’ll make anyway: I sometimes find disingenuous the angst-ridden concern for the one employee priced out at the margin by minimum wages and unions over the ten (or twenty, or one hundred) who are (arguably, at least sometimes) helped by them.

    That ad hominem aside, I suggest that liberal(ish) people like me ignore the libertarian arguments at our peril. I support the notion of fast food workers unionizing. I support it in spite of the probably deleterious effects that some libertarians have pointed out. I have many misgivings about unions and the way unions operate in the post-NLRA/post-Taft-Hartley U.S. But to me, perhaps because I worked in the industry for about five years (and I realize my experiences are probably not unique and that one could have very similar experiences to mine and derive from them different conclusions), I’m much more inclined to endorse unionization among fast food workers before I am inclined to endorse it among other workers.

    Of course, the rent-seeker, as always, is in the details. I reserve the privilege to stand by my stated preference and yet not endorse a particular fast-food unionizing drive if it’s found out that the union in question allocates all the money it makes from dues to support boiling babies for fun or some other nefarious activity. I also might qualify my preference if a successful unionizing drive creates insurmountable barriers to entry for competitors to the big three (McD’s, Wendy’s, BK).

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  10. I couldn’t agree more on your point number one. It is utterly unconscionable that we allow any employer to pay such incredibly low, totally unlivable wages. $11K & change is impossible to live any kind of decent life on.

    Frankly — based on no small amount of experience & observation — I think it’s just about impossible to live a decent, dignified life on anything less than about $100K a year, so I strongly support making that the absolute, bare minimum wage. It’s just beyond ridiculous that we continue to let employers exploit our vulnerable population by forcing them into punitively underpaid work. Make the employers play fair, I say. A decent, upper-middle-class quality of life should be a right provided to all not some rarified privilege accorded only to a tiny elite.

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    • Frankly — based on no small amount of experience & observation — I think it’s just about impossible to live a decent, dignified life on anything less than about $100K a year

      Is there an extra zero in there? That would make it too low, but on the other hand $100K seems much too high. I’d say a single person can live reasonably well on $25,000/yr, although probably not in Manhattan.

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      • No, $100,000. While it may be possible to scrape by on $25,000, why should we — as the richest society ever on the face of the planet — settle for merely establishing some barely adequate living standard for our neediest citizens?

        If we make the minimum $100,000/yr we ensure a much better quality of life for everyone. Just think of increase in living standards obtained by increasing these obviously exploited fast food workers’ annual income by 10 times. And then add to that the enormous new opportunities available to everyone in this country who currently makes less than $100,000/yr once they get their new raise up to the newly deemed acceptable minimum.

        And all of that’s not even to consider the enormous boost to our economy generated by all that extra spending power. Basic humanity & basic economics would both seem to suggest that increasing the minimum income to something like $100,000/yr is the moral & practical thing to do. It’s only our society’s unjust resistance to the idea of putting any limits on the unquenchable greed of corporations & other employers that keeps us from taking a necessary & salutary step like that.

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        • No, $100,000. While it may be possible to scrape by on $25,000, why should we — as the richest society ever on the face of the planet — settle for merely establishing some barely adequate living standard for our neediest citizens?

          It’s not ‘barely adequate’. I’ve lived on it happily (and added to my savings while doing so), though I wouldn’t have liked to try living on much less.

          If we could achieve a society where everyone in the US (or in my case, Canada) made at least $25,000 – which would involve substantially raising the incomes of over 20% of the population – and where there was a substantial degree of social mobility above that amount, then I’d think we had a quite good society, and my primary focus would be, even more so than it is currently, on how the living standards of the rest of the world can be increased.

          But I’m very much in support of the idea that far too much of the money is held by super-rich oligarchs who make no contribution to society of remotely corresponding value, and that that money should be applied to relieving want. The existence of great wealth alongside great poverty is immoral.

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            • The funny thing about that conversation with Hanley, btw, is that my point is that the extent of welfare programs ought to be pragmatically rather than principle-ly determined. And Hanley ended up agreeing with that!

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                • If it’s pragmatics, the line can only be pragmatically determined, yes? But as systems change, pragmatically drawn conclusions will change as well, yes? That was my point.

                  Where would I draw the line right now, in the US, with things as they are? We’d have to get into specifics, of course, but HBY would be excluded. I said as much on that thread.

                  But why wasn’t that answer good enough for Hanley? Because he wanted me to articulate a principled limit beyond which welfare benefits could not go. But even he doesn’t have a principled limit for those things. The limits he accepts are determined by pragmatics. So … why challenge the liberal to provide a principled limit when you already accept that there isn’t one?

                  Hell if I know.

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                  • Exactly. I was frustrated watching your exchange with JH for the same reason.

                    Let me give an example. Much has been made of some supposed program to provide free cell phones to po’ folks. Well is that really so dumb?

                    If you fill out an application for employment they’re going to want a phone number. For all intents and purposes, it’s a pre-condition for gainful employment. And when they call it, they don’t want to get your mother or your girlfriend or your neighbor, they want to get you. Basic cell phones with a minimal voice plan are dirt cheap. Not an iPhone but the kind of things you get your 80-year old mother who doesn’t understand tech.

                    It’s also a vital safety safety device enabling you to summon 911 emergency services from anywhere you get a signal. Considering the real costs and benefits, this doesn’t seem like such a half-baked idea in 2012.

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                    • I was frustrated watching your exchange … for the same reason.

                      Man, I wish to heck you’da jumped into that thread with some clarity. I felt like no matter how many ways I tried to make the point, no one was getting it. And it’s such a small point!

                      And I agree that cell phones are a good example of a welfare bennie that can be justified pragmatically today, but which would have been viewed as a luxury item only a few years ago.

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                    • I’ve helped a couple of people get one dollar phones. They were people living in temporary shelters. Try giving a shelter number to job and see if you ever get a call back. Or tell them you’ll be at this shelter for 2 more weeks then maybe this other shelter or staying with a friend. You will never get a call back. Cheap cell phone are a simple and brilliant idea to help many people get on their own feet.

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                    • My pragmatic answer on cell phones is that if you would choose to enter and pay for a social safety net that includes cell phones if certain conditions are met that you should be free to do so with other like minded individuals. I am OK with the same deal on hookers and blow, BTW.

                      I do not like forcing someone to pay for phones, hookers or blow against their will. To clarify though they can “contractually” agree to pay for it on certain conditions and receive it in others.

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                    • I do not like forcing someone to pay for phones, hookers or blow against their will.

                      That can’t be the standard you really hold, tho, can it? If a single person refuses to pay for X, then government can’t compel people to pay for X? That’s not how policy works, of course, or how it’s justified.

                      I get the idea that we ought to minimize coercion and all that, but to sorta repeat what I wrote earlier, the policy you currently adopt regarding Walmart and fast food employees is the status quo, which amounts to a coercive use of government to subsidize cheap retail prices. It seems to me the only way that policy would be via a utilitarian calculus. But if utilitarian or other consequentialist “best outcome” type arguments work in that scenario, then coercion is justified whenever a “best outcome” can be achieved.

                      In other words, you’re placing a value (in this case, efficiency and cheap retail prices) above coercion in your calculus.

                      I don’t have have a problem with that, I should add. Government coercion must meet at least a minimal burden of justification, and in the case of tax revenues being used to subsidize cheap retail prices (via the social safety nets) as well as corporate profits (let’s not forget that part of the equation!) it very well might be. At least, you seem to think it is. But the point I want to make here is that in this case, pragmatic arguments based on values (not necessarily rights) are enough to justify violating the non-coercion principle. If so, then the non-coercion principle isn’t really a principle, is it? It’s just one of many factors we consider when formulating policies leading to best outcomes?

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                    • SW,

                      The answer to your riddle is that I want government to be as minimal as practical and as optional as possible with free entry and exit options to minimize such coercion.  I do realize that real world gains should be incremental and experimental in this direction.  

                      On Walmart, I view this as a wacky unintended side effect of heavy handed government regulation.  The root cause which I go back to trying to eliminate is excessive government interference in the market.  I am pretty sure Christopher’s minimum wage will just lead to more pernicious side effects and the need for even more meddling. It self amplifies.  

                      The non coercion principle is a pragmatic one. To be honest, I know of nothing in the fundamental warp and woof of the universe which elevates non coercion to a special status. Same for liberty and freedom.  The only reason I am a fan of liberty and an opponent of coercion is that the former tends to lead to value in the eyes of the action taker, and the latter tends to create win/lose, value destroying actions that harm third parties and encourage third parties to ham back.  Coercion leads to a bad dynamic, freedom to a good dynamic. The “sweet spot” is freedom, but never up to the point of coercion, harm or deception. 

                      Yes, if coercion consistently led to a great outcome for all, I would be a fan of coercion.  Who wouldn’t?  As an example, I approve of coercion as a last resort to discourage coercion.  Used in this way, I think coercion leads to good. 

                      The one caveat is that sometimes, it is best to TREAT some values as sacrosanct as opposed to pragmatic. I do not believe they are actually sacrosanct, but I believe they are best treated and embraced as sacrosanct.

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                    • C’mon. This non-coercion business is getting tiresome. You’re starting to sound like some street preacher preaching a Hell Fire Sermon. Yeah. It really is that tiresome. Lay off that line of argument. You have to convince me you understand how capitalism actually works and how those forces might be harnessed to the betterment of the low guy on the totem pole. So far, you’ve done a miserable job of it.

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                    • Blaise,

                      My interpretation of your comment is pretty much summarized as

                      “Blaise believes you are a pathetic idiot.”

                      Please let me know if I missed anything essential. As always, your feedback is appreciated.

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                • Where the line is should be a question for our legislature to decide by democratic process, except that Republicans keep refusing to play the game and instead engage mostly in obstructionist stunts.

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          • I guess no one here is familiar with this blighter character, who used to post similar satirical pieces on Megan McArdle’s blog. Oh joy, now it’s here. These comments are supposed to be caricatures of how liberals think, though they’re interesting only in what they tell us about how certain conservatives view liberals. And by interesting I mean boring. I’d suggest ignoring it, but it probably won’t go away anyway.

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              • If my idea is so obviously stupid perhaps you could use your words to actually, you know, make an argument as to why instead of just casting aspersions & calling names.

                It seems to me that if it’s a good idea to guarantee everyone a 25,000/yr income regardless of ability or willingness to contribute to society then there is no good reason to half-ass it trying to figure out the right line of livable versus obviously-exploited and try to straddle or barely cross it w/ our aid to the less fortunate, rather we should go whole-hog and guarantee not just a barely-adequate livable wage but an income that allows for a high-quality life w/out trying to scrimp & save, etc.

                Contrariwise if it’s self-evidently clear that guaranteeing everyone a $100,000/yr income is stupid & wrong then it’s probably just as stupid & wrong to guarantee them a $25,000/yr income, just apparently less obviously so judging by the ready support that idea attracts.

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                • Because the problem with slippery slope arguments is that if it is correct in one instance, it becomes correct in all instances.

                  On the other hand, if your reductio ad absurdem argument against guaranteed income is valid, why not just exterminate the poor and be done with it?

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                • Your argument ignores positive externalities of making sure everyone has a living wage such as sharply reduced crime rates (i.e – lower police costs) and public health improvements.

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  11. These folks have no valuable skills so I am baffled why the think they should be paid more. Don’t like the pay, then get a better job or get better skills.

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  12. I support unionization of fast-food workers. Everyone should be able to make a living wage, and collective bargaining is a basic right which no business should be able to deny if the majority of workers want it. It shouldn’t be unaffordable – the fast food industry has huge profits, so if the CEOs and shareholders have to accept slightly lower profit margin in order to pay workers more while keeping the food at prices where people will keep buying it, they can do that. It’s not going to bankrupt McDonald’s.

    There are jobs where large wage increases are going to have businesses looking for ways to replace employees (I’ve noticed the rise of automated checkout at grocery stores over the last several years), but you can’t completely automate fast food. And there’s no point in a job that won’t enable people working it to make the bare minimum of living expenses.

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  13. Robert Reich says most low-wage workers are employed by large corporations that have been enjoying healthy profits. Three-quarters of these employers (the fifty biggest employers of low-wage workers) are raking in higher revenues now than they did before the recession.

    Which suggests that a trend in redistributing money is from the poor to those wealthy enough to own stocks in these companies, and from future taxpayers, because the social safety net provides a subsidy for these workers based on deficit spending.

    There’s also another thing to consider as low-wage workers try to organize: the same hours-limits they face when it comes to health insurance also burdens them when it comes to unemployment insurance. If they’re fired for attempting to organize, they’re without income at all.

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      • In WalMart’s case —

        1) reinvestment — the company’s growing, still building new stores in the US and expanding in to other markets around the world.

        2) Crony capitalism kickbacks — have you ever watched WalMart move in to a new community? You’re choices are pretty limited, and don’t actually reflect the real world, so how WalMart relates to the community goes here.

        There’s a tremendous sales pitch about the jobs, the added value they’ll bring; a great build up about the increase in the tax base. This isn’t cronyism/kickbacks/corruption, it’s a full-bored and perfectly legal sales pitch aimed at the decision makers within a town. We’re at the planning process, that part of government that people really should pay more attention to.

        For some places, the things WalMart’s selling pre-build actually hold true; there are more jobs, more choice. But for many other places, the store draws customers from traditional service centers, and ends up damaging the tax base and costing overall net jobs; it helps create ghost towns. I’ve talked to people who measure WalMart’s impact by measuring how an area’s pull factor,changes over time. A WalMart near an existing mall can, if the mall had a small pull factor, put it out of business.

        3) Worker exploitation — is a huge problem with Wal-mart; it’s business plan is designed to exploit both workers and the social safety net. It’s a leech. Just so you know, Roger, I’ve done a bit of job creating, from the investment end. If someone walked up to me with a business plan that was based on a workforce dependent on the social safety net in this way, I’d laugh at them. Because when the public catches on that they’re being scammed, they get to change the regulations, and your whole business plan falls apart.

        I realize you’d probably say this is a problem because we offer social safety nets for WalMarty to exploit; that food stamps keep and Medicaid muck with the labor market. Which totally avoids the responsibility WalMart has to act as an ethical employer. Just because something’s not against the law doesn’t mean it’s ethical; and WalMart’s a pretty good example of why regulation’s necessary to protect markets, because big players who can throw their weight around will find loopholes and weaknesses to exploit, and you have to then figure out how to re-level the playing field.

        Free markets require a good Zamboni.

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        • Hi Zic,

          I totally agree that the effect of a Walmart should be short term to either eliminate jobs or increase output per job. The exact effect by community can differ between these two poles, but that is exactly what is supposed to happen short term when a more efficient operator enters the market. Long term, the displaced workers are expected to do something else. If we try to stop this creative destruction, we dismantle the engine of prosperity. If we build safety nets for it, we can get the best of both worlds.

          If I offered someone getting government aid a minimum wage job I would not be a leach or be doing anything unethical. I would be offering a chance for mutual benefit to someone. Do you really want me to take the high ground and say “I would have hired you, but my conscience insists that I not do so because you get aid. Indeed I will only hire people that don’t get aid.” ??

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          • If I offered someone getting government aid a minimum wage job I would not be a leach or be doing anything unethical. I would be offering a chance for mutual benefit to someone.

            If you’re one of the riches people in the world, yes, you would be a leech.

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              • I think if you actively paid a local poor person a wage so low that they could barely live just to wipe your ass while you spit on them and curse at them, even though you could easily afford to pay them a living wage, then your action is immoral.

                I am not sure that it should be illegal at the individual level (for all sorts of practical reasons, it would be difficult and not very productive to regulate such small transactions amongst individuals), but it should be illegal to do it if you are doing it en mass. This is why I believe you should not be allowed to set up and run a sweatshop. (mmmm…. candy. Oh wait sweet shops aren’t sweatshops.)

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        • A WalMart near an existing mall can, if the mall had a small pull factor, put it out of business.

          Good for Wal Mart, then. Outcompeting other firms is the name of the game, and is what brings the consumer the best outcome. Protecting existing businesses is foolish–there’s no first in time, first in right to prosperity rule.

          If the argument is that it’s not a level playing field because Wal Mart gets special deals from municipal decision-makers, then maybe the beef should be with government, rather than with Wal Mart. Let’s pass some amendments that prohibit the government from picking and choosing who gets what specialized (not-generally-available) benefits. Yes, we’d all have to give up the prospect of governments giving specialized benefits to the firms we like, but if we’re not willing to do that we don’t have much standing to complain when the other side gets benefits we disapprove of.

          It makes no sense to hate on the players because they know how to work the rules of the game–it’s the officials and the rulemakers you need to be targeting.

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          • James, I have repeatedly said that I think a big problem is our lack of re-evaluating the rules, our unwillingness to include that in our budgeting for government.

            But I disagree with you this: Outcompeting other firms is the name of the game, and is what brings the consumer the best outcome. Protecting existing businesses is foolish–there’s no first in time, first in right to prosperity rule.

            It’s not about who comes first; it’s about who has the ability to capture regulation for competitive advantage, which is exactly what WalMart has done. The towns that have become ghost towns end up supporting WalMart because there are no longer any other options, and those options have vanished because WalMart fails to provide a living wage or health insurance and instead turns those tasks over to the social safety net.

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            • I don’t really buy this. First, I truly haven’t seen any of these ghost towns, and I’m pretty darn familiar with a lot of small midwestern towns. On Thanksgiving evening, as my wife and I drove home from my mom’s house, we passed four towns with Wal Marts (we noticed, because we marveled that people would actually go stand in long lines on Thanskgiving night to save $100 on a TV). The town sizes were 7700, 9300, 16500 and 20000. None of them are ghost towns, nor anything like it, and to the extent they are less than vibrant it has to do with loss of manufacturing jobs, not the presence of Wal Mart.

              But if you agree that the real problem is government, let’s join together in criticizing the government, and stop focusing on the corporation.

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              • All the world is not those towns.

                Where I live, WalMart pretty much devastates Main St. unless the town’s got another pull factor. (Freeport, Maine, for instance, has L.L. Bean & various sundry outlet shops. Mexico, Maine? Not so much. Oxford, Maine, used to have three service centers — Oxford’s own, Norway, and South Paris — all suffering and with growing vacancies since the WalMart opened up.)

                So while you may be correct in those necks of the woods, it’s not a truism everywhere.

                But here’s what’s really bothering me — why you’re working so hard to defend one of the largest corporations in the world, as a libertarian, when it is obviously rent seeking and eliminating the ability of smaller companies to compete?

                I don’t get it. WalMart’s model would have the whole world with what WalMart opts to stock and nothing else. Manufacturers who supply WalMart have to be huge, have little in the way of profit margin, and often fail because it’s difficult to comply with their supplier demands; and in the process find they’ve already had to give up their other more profitable markets.

                You’re a smart guy, James. But this seems obtuseness, not smart. As I said: if you brought me a business plan based on this, I’d see it as inevitably doomed; too dependent on oversized suppliers, too dependent on regulatory capture, and too big to be nimble. I see WalMart as a doomed company, though it may take a while. And when it fails, it’s going to destruct a huge chunk of the world’s economy with it, unless folks get smart and start working the antitrust/monopoly laws as intended. But right now, the Waltons are the modern robber barrons. And you’re cheering them on. Like I said, I just don’t get it.

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                • I’m not trying to defend Wal Mart. I’m trying to point out that Wal Mart isn’t the problem, if our concern is governments giving them advantages they don’t give to others. The problem is the government, and there’s no point bitching about Wal Mart because if they cleaned up their act some other firm would come in and play their old strategy.

                  Let’s go after the governments that have the authority to give them those specialized benefits. Quit saying Wal Mart’s destroying our downtowns and get loud and clear about our governments destroying our downtowns.

                  But if you want to know what I’m really cheering on, it’s competition. And I’m completely unconcerned about whether a big firm beats a small firm, or vice versa, or whether they each continue to thrive happily. If there’s a level playing field as far as how government treats all businesses, I truly don’t care if Grandma’s Cookie Shop can’t compete with the Wal Mart bakery. If people don’t find it worthwhile to go to Grandma’s for their cookies anymore, I’m not about to tell them they should or to rig the game so they will.

                  Please understand: the pro-market approach is not a pro-corporation approach; it’s a pro-competition approach.

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                  • WalMart has opted to force the hours of employees down below that where they’d be required to provide health insurance and to pay the absolute minimum the can in wages.

                    That is not a government failure.

                    But it’s a WalMart feature, for their employees can only afford to shop at. . .

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          • Good for Wal Mart, then. Outcompeting other firms is the name of the game, and is what brings the consumer the best outcome.

            Only according to single, very narrow, metric. There are other variables. Wage rates, distribution of profits to community members which get spend in the community, etc. Walmart may have better prices, but individual rationality may lead to a more collectively impoverished community.

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  14. Okay, so they agree that food-service employees ought to be paid fifteen dollars an hour. It’s now cheaper to replace them with an automated assembly line that pulls prefab items from a freezer, microwaves them, and spits them out at the customer.

    “But people want a human touch in food service!”

    Really? Interesting. Tell me more about how you like to make poor people dance for your amusement.

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  15. Shazbot,

    Sorry for the delay, I went for a bike ride.

    I was looking for the other studies on prosperity and finally found the following artile which summarizes five studies and the problems with combining so much data ino a routine, exact score. They do all show the same basic trends.

    http://www.cato.org/pubs/journal/cj17n2-1.html

    One important point on the Heritage and other studies which track prosperity. These ARE NOT measures of growth rate. Thus the criticism above that the studies don’t correlate with growth is because they were not intending to and don’t. As I understand it, this is because catch up technological growth is so easy for laggards. In other words, wealthy countries have a lot harder time sustaining two percent growth than poor countries.

    The Cato summary does point to other studies that measure growth using different methodology.

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    • Roger was that paper written in 1997?

      We’re looking for empirical evidence, I think recent is better. I can’t even find what people on the internet say about the data, because it is so damned old.

      That said, you’ll have to explain the argument in the paper to me. I don’t get it. What data is there and what is the conclusion?

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      • Shazbot,

        The point was to reveal five different methodologies all of which reveal that after a certain point, excess government interference leads to lower growth or lower standards of living. Feel free to explore the different data bases.

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        • Yes, but this isn’t borne out by the data. Country’s with more gov’t interference have higher standards of living, quality of life, equality of opportunity than the U.S. At the very least they are on par.

          The U.S. is the global leader in GDP per capita over the long term, true, but it is not clear how much of that has to do with low taxes at all, even in the U.S.: http://www.theatlantic.com/business/archive/2012/09/tax-cuts-dont-lead-to-economic-growth-a-new-65-year-study-finds/262438/

          What do you see as the evidence in the paper that you cited to show that we need low taxes and less spending to maximize growth?

          I admit, there may be a small GDP-growth drop if we create real equality of opportunity (it’s an empirical question, after all), but I don’t see the evidence. I do see evidence that any such GDP-growth drop is likely to be small (and not connected to a loss in quality of life or standards of living) because there are other countries that are evidence that we can increase social spending, the minimum wage, etc., and still have low unemployment, high GDP per capita, etc.

          Why can’t we be like European countries like Sweden or Denmark? Why shouldn’t we be? You tell me what the evidence is in the paper.

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          • Shazbot,

            The data strongly disagrees with you.*

            Here is an explanation on the empirical data….

            http://www.heritage.org/research/reports/2005/03/the-impact-of-government-spending-on-economic-growth

            And if you would rather watch it in video format with a real live classical liberal…

            http://danieljmitchell.wordpress.com/2012/03/04/a-fiscal-policy-tutorial-everything-you-need-to-know-about-the-economics-of-government-spending/

            *Your link conflates top income rate and the actual effective rates, and was pretty much off topic.

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            • Related, Henry Hazlitt, 1946: “As soon as A observes something which seems to him to be wrong, from which X is suffering, A talks it over with B, and A and B then propose to get a law passed to remedy the evil and help X. Their law always proposes to determine what C shall do for X or, in the better case, what A, B and C shall do for X. . . .

              What I want to do is to look up C. . . . I call him the Forgotten Man. . . . He is the man who never is thought of. He is the victim of the reformer, social speculator and philanthropist, and I hope to show you before I get through that he deserves your notice both for his character and for the many burdens which are laid upon him.

              It is an historic irony that when this phrase, the Forgotten Man, was revived in the nineteen thirties, it was applied, not to C, but to X; and C, who was then being asked to support still more X’s, was more completely forgotten than ever. It is C, the Forgotten Man, who is always called upon to stanch the politician’s bleeding heart by paying for his vicarious generosity.”

              Boldface mine.

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            • Ugh.

              The Rahn Curve and the Laffer Curve.

              Quick question for Roger: Are developing countries and their GDP growth included in the Rahn Curve? (The answer is yes, BTW)

              If so, the Rahn curve “proves” the following two claims with equal validity:

              1. If you want high GDP growth, don’t become a wealthy, democratic, happy country (that has high GDP) because that kills GDP growth
              2. If you want high GDP growth, don’t let government spend more money than about 20-25 of total GDP.

              This is a joke. The data is supposed to show that we would have high GDP growth like developing nations by reducing government spending to their levels. But it might just be that wealthy nations imevitably experience two things: 1. a slowdown in growth, and 2. A use of their wealth to buy equality of opportunity. But thatdoesn’t mean that 2. is the cause of 1.. Not even close.

              Correlation is not causation and all that.

              But I think we are off the rails.

              I propose a ceasefire until a new thread comes up.

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  16. Shazbot,

    On the Kip paper, I was not arguing with you on inequality, and unless you want to start a new front page post, I would rather not deviate into that topic, yes, his paper, which I haven’t read in months, was about inequality, but I was only linking to it for the facts that it quoted on relative income, growth and unemployment between EU and US. (though these strings get long and confusing so if I am mistaken please forgive me)

    The data I have is that we are much more prosperous, despite our higher prosperity have a higher growth rate, and a lower LT unemployment rate.

    You owe me a more current unemployment rate which youve assured me has reversed this trend and I am hoping you also have data on education expenditure, health care expenditure, safety net expenditure comparisons etc. i would also love to see income comparisons of the poor by nation if you hav them. I am unaware of these data, and would love to see them.

    To be more specific, I want to see what it is you are using to say that the poor are so much better off over there. Thanks

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    • Unemployment rates for some European countries with much higher levels of spending and taxation:

      Australia, 5.4
      Austria, 3.9
      Belgium, 7.4
      Canada, 7.4
      Denmark, 6.2
      Finland, 7.6
      France (the Euro trouble!)10.2
      Germany, 5.4
      Netherlands, 6.6
      New Zealand, 6.8
      Norway (oil is good), 3.0
      Sweden, 7.3
      Switzerland, 3.1
      U.K., 7.8

      U.S., 7.3

      http://en.wikipedia.org/wiki/List_of_countries_by_unemployment_rate

      I left out the really troubled victims of the Euro-banking crisis (though it has effects to an extent everywhere.) The Euro-crisis isn’t relevant to our dispute.

      Lots of the countries above have much more government spending (as a percent of GDP) , higher taxes, more gov’t regulation, better minimu wage. Almost all have socialized healthcare and more equal, more subsidized forms of public, higher education. (All spend less on prisons, too.)

      The U.S. spends less as a percentage of GDP, per capita, than most of them, especially Sweden, Denmark, Finland, the U.K., and France

      http://en.wikipedia.org/wiki/Government_spending#As_a_percentage_of_GDP

      The U.S. comes out worse, or very middle of the pack, on many metrics, like quality of life. The U.S. fares worse here than Denmark, Sweden, Finland, Canada. A least there’s no reason to believe the U.S. has a higher average quality of life as a result of lower, less progresive taxation and spending:

      http://en.wikipedia.org/wiki/Quality-of-life_Index

      And as Kenworthy graphs here, the U.S. is desperately far back on intergenerational equality of outcomes, i.e. equality of opportunity. (Your odds of escaping poverty, if your parents are poor, is much worse than in most parts of wealthy Europe.)

      http://lanekenworthy.net/2012/01/31/inequality-mobility-opportunity/

      Finally, my point about the Heritage “Economic Freedom” index as I pointed out, as explained by economists, isn’t correlated with (and surely isn’t causally connected to) things like GDP growth, quality of life, equality of opportunity and intergenerational mobility, or anything that matters. In short it is a useless measure designed to say that countries with more freedom for big businesses to avoid regulation are somehow better. It is just not clear how.

      But we are far afield of everything and have too many disputes on the table for a single thread.

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      • In short, I don’t see much evidence for a worse economy or standard of living if we increase social spending and taxes over time. Other countries do it. So can we.

        We can do it better, maybe.

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      • Shazbot

        I looked up the data and Europe has a higher unemployment rate than the US. You just cherry picked, albeit openly. The fact that you pulled out the ones that have the worst problem with spending to make a point for more spending is especially suspect. If you want to profile Norway, please compare it to North Dakota.

        As you probably guessed, a classical liberal is not going to be a fan of a well being index that assumes a critical component of national well being is weather and union membership. I have other criticisms, but don’t see the point….

        Europe has a substantially lower standard of living. So much so that if you forced Americans to live at that level they would probably have you tarred and feathered. I am still trying to understand if their average person even lives as well as our poor. It is certainly debatable, though I doubt Europe is that much worse off than us. They also have lower growth rates, so they are worse off and losing ground. They have higher unemployment, and have for some time.

        The only area we seem worse off, as discussed earlier, is that lower quintile males seem more stuck in poverty than is true in Europe. I’ve got lots of ideas on how to address this, but they don’t include replicating the European model. Indeed my guess is we are their future on this issue.

        If you would like to read some studies on the harmful effects of government spending levels on prosperity and growth, I have some great links. Just let me know.

        As always, you are a pleasure to chat with.

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        • Always a pleasure, Roger,

          That said, I don’t think we’re getting anywhere. We have too many distinct disagreements all on the table.

          “he data and Europe has a higher unemployment rate than the US.”

          Are you including the countries effected by the Euro crisis, especially Spain, Italy and Greece? We should compare like to like to tet proper arguments by analogy. Wealthy northern european countries like Sweden, France, U.K., U.S., Canada, etc. are all pretty comparable. We should also make our samples as large as possible without entering countries in that are clearly disanalagous, so we should eliminate countries that are effected by a crisis that literally cannot effect the U.S., if we are trying to see what would happen to the U.S. if we became more like such and such countries. This is obvious.

          Comparing the U.S. to its rivals in wealthy Europe (in terms of wealth, education. etc.) we do okay on some measures (especially those that take into account overall GDP or GNI) and pretty average to poor on others (especially those that take into account equality of opportunity, and quality of life more abstractly defined. (The U.S. does well on the HDI, which uses GNI partially, but Euro countries aren’t far behind and some lead on occasion.)

          BTW, here are two smart posts on U.S. and Europe GDP (which is the U.S. claim to success according to Roger) from 2010

          Yglesias points out that Europe lags on GDP per capita because it has always lagged, since 1820, not because of socialism versus more laissez faire markets.

          http://thinkprogress.org/yglesias/2010/01/12/195763/the-united-states-has-always-been-rich/?mobile=wt

          Krugman points out that usual cases for the conclusion that Europe is economically held back or by improved social spending or higher taxes is often based on cherry picked data (or at least Manzi’s case was).

          http://krugman.blogs.nytimes.com/2010/01/09/european-decline-a-further-note/

          I am growing weary of the debate though.

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          • Thanks Shaz,

            Two final points…

            Growth is much harder for the leader and much, much easier on followers. This is because it is easier and more efficient to replicate institutional and technological progress than to create it in the first place. Germany and France have been drafting off GB and the US for centuries. The rest of the workd even more so. Thus Yglesius’ point is really off.

            I honestly see absolutely no evidence that we should drop the gold medal institutions to pick up tips from a distant bronze who owes his position to drafting off the true leaders.

            Second, do you have any data on consumption comparisons between the bottom fifth in your beloved Nordic countries and the US? If so, that could bolster your argument.

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            • Aso, take a look here (especially for first 3-4 posts) for a bunch of cool links and writeups on spending on equality of opportunity and economic growth.

              http://economistsview.typepad.com/economistsview/productivity/

              In brief, there is a lot of evidence that large transfers from the rich to poor children to creete equality of opportunity actually increases GDP and economic growth. Increases!

              See especially the links to articles by Kaplan, Kenworthy, Taylor, and Fischer.

              Note that this is information from a variety of sources, not just Heritage and Cato over and over and over again. When all your info comes from one or two places with stated ideological leanings, you have to take a long look in the mirror.

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  17. Shazbot again,

    Just to clarify, I am not asking to pay teachers less. I am saying prosperity comes about when we can get schools to be more efficient and productive. In general, this will likely lead to higher wages.

    I think great teachers should make a great salary, and that teachers should be allowed to compete with each other for the best and highest paying possible professional salaries. I am well aware that the current Bureacracy that they are enmeshed in at schools makes their productivity almost impossible. It is really hard for a professional level person to understand why a fellow professional would ver want to unionize. I do not have any trouble “getting” why teachers want to to so. Their environments suck and the Bureacracy they work in will stifle their humanity if they don’t fight back.

    I believe good teachers would thrive in a freed market. I think much of the bureaucracy around them would suffer, as would bad teachers. But most importantly, kids would thrive.

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    • “I believe good teachers would thrive in a freed market.”

      No unions for workers = Free Market

      ???

      Organized labor is not antithetic to free markets.

      —-

      So you mean, if the unions just disbanded, teacher pay would sky rocket?

      Why hasn’t it sky rocketed in southern states with no unions or hobbled unions?

      Amd as a former adjunct, I can tell you that without a union, teachers will make crap all without a union, even less than what they make now.

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        • Suppose governments gave unions some operatong cash, thereby nullifying the need for mandatory dues.

          Would they be coercive then?

          BTW, even mandatory union dues are no more “coercive” (we must be careful how we use this word) than bus fare. They are designed to solve a moral-hazard problem of wanting to benefit from the union, but not pay for it. Believe me, your dues are worth more to you through your salary than you would lose without the union.

          The company is free to negotiate with individuals not in the union. (But not in the union.) You are free to sell your labor as a scab and not join the union or pay union dues. And the union is free to ask you to pay union dues if you want the benefit of collective bargaining.

          You are not free to force your employer and a union to hire you at the wages that the union and the employer negotiated without joining the union. Nor are you free to force the union to enter a collective bargaining agreement with the employer that states “The union will allow Roger and thousands of others to work for Shazbotco, without striking, even though Roger isn’t covered by the bargaining agreement.

          This is obvious.

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          • I am not sure my favorite solution would be to convert from coercive dues to coercive taxes.

            Let me instead ask, are coercive dues really required? Why not voluntary dues? Why not supplement this with voluntary donations from like minded non members? Why not build the payment of the dues into the employer requirement in the union contract?

            If the dues are being used to pay salaries for people who specialize in representing workers, why not have it built into the labor contract that one annually elected worker representative will be allowed to specialize full time in this role? Why not have volunteers play this role one evening a month?

            Why not use shame or status to get other employees to join and contribute dues?

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                • That’s how Germany manages things, as I’ve repeatedly said. I don’t see management giving up seats on the board without a fight or a buyout or legislation to that effect, which Germany did.

                  It’s so obvious. In Germany, closed unions are illegal because they are coercive. But since workers have a legal right to have a presence in the boardroom, the entire wretched Marxian Struggle is shunted to ground: workers and management are on the same page. They make it work over there. Sure wish we could, here.

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                  • Again, we find ourselves in agreement. Of course, I’ll add that I don’t really care how any particular company chooses to organize itself, so long as it is allowed to fail if management-labor relations get in the way of producing a product that benefits consumers.

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                • Actually, this requires the government forcing groups of individuals to form the boards one way or another. That actually is coercion (unlike union dues, which are agreed upon within a democratic group of private citizens, like club fees) though it seems perfectly acceptable to me.

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            • The union is a priavate organization. So is the business thatthe union contracts with (bargaining agreements are contracts. If the union votes to have mandatory dues and people can choose to leave the union, how is it coercive.

              Sure, if you leave the union. the company won’t hire you because of the agreement the company has entered into with the union.

              But there is no coercion involved in mandatory dues at all. None.

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                • Yes, once the union has taken a vote and passed mandatory dues, or voted for leaders who institute such dues, then the dues are not “coercion” even if some people don’t want to pay them.

                  But that is how all union dues work, so they are never coercive.

                  Coercion would be if the government forced them to not have mandatory dues.

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    • I am saying prosperity comes about when we can get schools to be more efficient and productive.

      Efficient? Perhaps. Productive? In the sense of more output per unit of labor? That’s a fool’s mission. Education, alongside healthcare, lawyering, and other professional services, is essentially a handicraft, and it always will be. A hundred years ago the optimum class size was about twenty or so. Now? The optimum class size is… about twenty or so.

      Why do you imagine you can realize industrial productivity gains in non-industrial sectors? The real gains from technology and innovation to be realized in non-industrial fields is in quality, not quantity.

      In general, this will likely lead to higher wages.

      And when the hell has this actually happened? At least without active government involvement pushing things in that direction? Roger, the link between productivity gains and wage improvements hasn’t held since 1973 (see my Comment Rescue; BTW, pretty cool, huh?).

      The canard that rising productivity leads to higher wages is, at best, a contingent outcome that assumes facts not currently in evidence. It assumes that the gains from productivity will be shared with the worker rather than applied to lower prices or sopped up by Capital in higher profits. In a slack labor market there’s simply no reason for management to pay higher wages.

      Basically, the theory assumes that wages are a function of the worker’s actual output rather than a result of supply and demand in the labor market. It’s just a permutation on the labor theory of value and I have to wonder why you’re flogging that in stealth when you would soundly reject it when presented in the light of day.

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      • RR,

        I would settle for the efficiency/ productivity adjusted for inflation we had thirty years ago, which was double what it is now. Free markets seek out efficiency and weed out excess bureaucracy and rent seeking via creative destruction. Examples here would include less administration, better teachers, better incentives, better use of technology, etc.

        As for the quality or quantity argument, I am fine with better quality. The quality in question would be better educated students. That is what has flat lined.

        Wage gains have happened pretty much everywhere that productivity has occurred. It is a matket phenomenon though, not necessarily an industry one. Historically this occured in the US and Europe, Asia, etc. A lot of this is due to the effects of comparative advantage. It has occurred since 1973 as well, though the regulatory distortions drove much of the increase to benefits, rather than wages. Recently international competition for lower skilled jobs has put pressure on this, but the reduced rate of gain in our privileged citizens has come from increased gains in wages for the truly needy. The last decade was the best for worldwide human prosperity since the big bang. I am sure you are celebrating.

        You are right that I would reject the labor theory of value. The reason that I believe free market teachers would be paid more is that there would be a high demand for better teachers as the wheat is separated fom the chaff, so to speak. Technically you are right though that schools could compete for the best teachers via better working conditions, less red tape and more freedom.

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        • “Free markets seek out efficiency and weed out excess bureaucracy.”

          1. Not always. Not by any stretch. See healthcare costs in the U.S.

          2. Free markets work better than socialist command economies, but free markets temped with a strong social safety net, regulations, progressive taxation, subsidized public education, do better than more laissez-faire markets.

          The middle ground between Marx and Smith is best on pure GDP terms. The only question is where is the sweetspot: closer to Danish/Swedish/French levels of government involvement or U.S. levels.

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            • Just so we’re clear, what markets aren’t interfered with to some degree?

              Moreover, which of the following has the least government “interference”, in the healthcare system of

              A.) Canada
              B.) The U.K
              C.) France
              D.) The U.S., at least up until the ACA

              If you say anything but D., we’re off the rails in even being able to talk.

              If you do say D., and you recognize that there is always a minimum of “interference” in any large well-functioning market (a la Hanley), and you believe less regulated markets are more efficient, then you absolutely have to (on pain of obvious logical contradiction) claim that the U.S. healthcare system is more efficient than the other 3.

              And to say that the U.S. has the more efficient healthcare system is absurd. So one of the assumptions that lead us there, must be false. I’d say it is the incredibly strong (and not well supported) assumption that less interference is ALWAYS more efficient.

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              • Markets require rules.

                Markets do not require active, constant interference to manipulate outcomes.

                It is very possible that a totally managed system is better than a hodge podge. Their health care markets are better managed than ours. I have previously clarified how the markets could be improved, but this is way off topic.

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  18. Also, I think Pareene is right about the trillion dollar welfare dishonesty here:

    “http://www.salon.com/2012/10/18/new_lie_the_government_spends_more_on_welfare_than_everything_else/”

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    • Shazbot

      Get serious. The point is that means tested aid to those less well off is indeed a really,really big number made up of a lot of programs. This guy is spinning pure rhetoric.

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      • But a lot of it goes to people who are, have been, or will be middle or upper middle class: especially medicaid for seniors in nursing homes, Pell grants for middle class kids, student loan interest payments for middle class and even weathy kids, etc.

        It isn’t “welfare” for the neediest (working poor and the destitute) on whom we spend comparatively little. It is money that is necessary to keep the middle class in the middle class.

        The people who peddle this dishonesty want the rubes to hear that we spend too much on “the undeserving poor” and “welfare queens”, but we spend very little on the unemployed poor and the working poor.

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  19. The libertarian ideal economic theory seems to have two tenants. First, competitive free markets and second, absence of government interference in same. A market is seen as “free” when government doesn’t interfere and then, as a consequence, the natural market forces of supply and demand will produce the “right” or “correct” prices. Therefore, any interference such as minimum wage laws, mandated benefits, workplace safety regulations, or laws aiding and abetting union activity will necessarily distort the natural workings of the marketplace and result in equilibrium levels of wages that are (tautologically!) less than optimum and most efficient.

    Let’s examine this. Competitive market theory presupposes a large number of both buyers and sellers, such that no individual or group of individuals (a cartel) can move the market. In other words, all participants are price takers vs. price makers. It also presupposes that all participants are free to buy or sell with no coercion. No buyers are forced to buy and no sellers are forced to sell.

    So the question is, Does the market for labor, sans government interference, satisfy the preconditions for competitive market theory?

    Answer: No. The primary failure is that workers, who enter the market as sellers of labor services, are compelled by biological imperatives to conclude a transaction. People have to eat (and need shelter, clothing, etc.) to survive, food must be purchased, and they must sell their labor services (get a jerb!) to procure those funds. The labor market comes fresh out of the box, pre-distorted for your convenience.

    Now the reality is, of course, more complex. There isn’t just a market for labor. There are literally hundreds of thousands of labor markets. There are markets for programmers in Kansas City, and waitresses in Memphis, and file clerks in Dallas. Workers can shift, with more or less difficulty, between markets, changing careers or moving to other locales. Some markets are tight and some markets are slack. But the basic dynamic always prevails, that the worker must sell their services, somewhere, somehow, to someone, or, in the absence of social welfare assistance, suffer dire consequences. And while employers, the purchasers of labor services, may on occasion confront a tight market for the needed labor, it is rarely a case of hire-or-die*. It’s also generally the case that there are many more sellers of labor services than buyers, in some locales this can approach a monopsony condition.

    If the libertarian advocate of free markets wishes to flog the same for labor markets, then it is incumbent on this advocate to address this out-of-the-box distortion from competitive market ideal. There are two ways I see to do this. First, remove entirely the requirement to sell labor to live, i.e., a guaranteed minimum income. Or, second, introduce a substitute buyer for labor services other than the private marketplace, i.e., a full-employment guarantee at a “living” wage.

    The first option is the “purest” in the sense of rendering employment totally optional, but it introduces the specter of substantial moral hazard. On the other hand, there’s a lot of people that don’t work that we also don’t castigate for that. Children, the elderly, the disabled, and the well-to-do trust fund babies.

    The second option seems more attractive to me. Institute a policy of guaranteed employment at a locally-determined** living wage, administered by local governments and paid from Federal funds. Simultaneously, eliminate other wage-and-hour laws, etc. These jobs would be guaranteed to any adult who knocks on the door. This agency would also serve as the local labor resource pool for private employers as well as offering job training and retraining services.

    Discussion?

    * The obvious exception being the need to hire specific medical services in dire straits.

    ** A living wage looks a lot different in Buttscratch, WY than it does in Manhattan, NY.

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      • You didn’t even fucking read my post, did you, Roger? Or you didn’t understand it, take your pick.

        If you need clarification, just let me know because your comment had no relationship to anything I wrote.

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        • RR,
          I am respectfully disagreeing with the premise of your essential fifth paragraph.

          I did not weigh in on your recommendations, because I reject the premise. I suppose your recommendation could be better than what we have now in aid, minimum wage, government service unions, etc. But I do not know.

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      • Wages will go where supply meets demand, and need has very little to do with it.

        Because need has no effect on supply.

        I’m beginning to think Roger is performance art.

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          • He treats Econ 101 abstractions as if they’re literally true. E.g. the guy who has to sell his car right away has access to a market with perfect information and no difficulties with contacting all possible buyers or arranging mutually convenient times for test drives, so he can sell it at the magical market price.

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            • Excellent point. Markets are never perfect. Note I said need has little to do with it, not nothing to do with it.

              Now back to jobs. It is true that in a world with no safety nets that an applicant would need to find a job faster than a company would need to fill a single opening. This implies that the company can wait, interview more people, and so on so that the market works better for them. Advantage company.

              If however a person has a job, they can now take their time too, and use their job and their experience to leverage better opportunities within the company and outside. Add in the issues of other family members, unemployment insurance, and other safety nets, and the net result is that the need disparity greatly washes out. In the end, the rate that companies offer for a job is their best approximation of what they need to offer to get the quality of applicant considering that other firms are trying to hire them too. And that is what big firms tend to do. They don’t negotiate wages with people off the street. They set a wage rate and hire to it. If they get all “game theory” with the applicant, they expose themselves to turnover a the applicant takes the first fair offer available. This is why Ford offered higher wages, not so Workers would buy the cars.

              Thus, I disagree with RR’,s two necessary conclusions on mandating living wages.

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  20. “I’m tired of being courteous to guests for $7.25!”

    God forbid anyone be courteous unless they’re paid at least $15 an hour to do so.

    I’ve worked with people like that in the past. My casual observation tells me they’re not particularly courteous at any price, because more money doesn’t change their instincts. They’re also the ones who aren’t in contention for promotions, because promotions go more often to those who say “what else can I do (at this pay rate)” than to those who say “I’m not getting paid enough to do even this much.”

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    • Capitalism does exploit workers, for better and for worse. The question is, how much exploitation is tolerable, considering they do the work and they never see any more profit than their abysmal wages?

      Systematically screw someone over, tell him he’s just being unreasonable, ask him to behave professionally all the while, see where it gets you. Nowhere good.

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      • Exploitation, like Sh!+, happens. The difference between classical liberals and you new breeds is that we are against exploitation, properly defined. The new breeds are for protected classes (as defined by the left) and they will even endorse exploitation if it seems to further the cause of their favored classes.

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        • Sure, it happens. And furthermore, it’s pointless to get all huffy and whiny about Protected Classes, et. al. That sort of parentalism is just bad for business. People ought to be able to stand up for themselves. McDonald’s workers (and many others) are being screwed — by the very sort of Parental System which was instituted to protect part-time workers trying to get out of the welfare trap. See where this is leading? I’m not a garden variety Liberal.

          So let’s get that much clear: if workers are sposta behave professionally, it would seem reasonable to treat them professionally.

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    • So given that these are realities – people have these limitations, and these are increasingly the kinds of jobs that will be created by this economy for people with such limitations – and the fact that opportunities for advancement will always be limited un comparison to the number of of entry-level positions: where does this exactly leave the ideological justification for the whole setup that relies on precisely the notion that people aren’t actually consigned to this kind of work at these kinds of wages for large parts of their lifetimes; that instead the idea that people are stuck in that way (and hence the whole idea of income inequality being much of a problem) is a mirage, and upward mobility and advancement is what really characterizes our system?

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      • I’m not engaging in the larger debate. I’m just mocking someone who thinks that being courteous to people shouldn’t be a normal way of life, but something you shouldn’t have to do until you get paid enough per hour.

        That person’s real problem is not lack of unionization.

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          • Not the fundamental problem, not with a person who makes those kinds of claims.

            I’m imagining a Clerks/Waiting type movie with Samuel Jackson as a server leading a unionization effort. “You want some courtesy out of me, Motherfisher?! You tip first, then I’ll smile and say have very nice fishin’ day!”

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            • Right, because she’s aiming her demands directly at the customer (which is pretty clearly how you internalize it, actually), rather than going out in public and saying to her employer, I’m unwilling to do my job for my wage anymore.

              She did not say she’s unwilling to be courteous in her life for $7.25 an hour. She said she’s unwilling to be courteous to guests, which fairly means, this restaurant’s guests, at their site, in their uniform, when they say she needs to be. How does that say anything about her general willingness to be courteeous, or the extent to which she is in her life. You can read her statement one way – that she must have a problem being courteous – and I can read it another – that with courtesy that far at the top of the list of words she uses when she says what she does for a living, that it’s likely she is one of the most courteous employees to this restaurant’s guests that it has. An employee not inclined to be courteous might have said, “I’m tired of making change and giving people their burgers for $7.25 and hour!” Who really knows?

              Your point is a dodge, or at least a distraction, in any case. Yes, courtesy is a virtue in life. Does that meant that this person should be expected to want to show up on that site day in and day out and be courteous to this business’ guests in their clothes for free? ‘Being courteous to guests’ just happens to be the descriptor she used for her job, which is more involved than that, at that moment. And it just so happens that being courteous is something that you can say she ought to do generally in her life. (It so happens because she happens to be in the position of selling services that don’t require much skill – or rather skills that are perhaps thought to be common rather than rare or difficult to develop, which, I guess, bully for you to be in the position vis-a-vis her.)

              That’s all a distraction because it’s incidental to the real point – her point – which is that she’s demanding a raise. If the statement that instead applied to her position was, “I’m tired of writing code for $725/week (or $72,500 per annum)!”, it wouldn’t make as much sense for you to say, ‘Well, writing code is a trait is a you should be developing in yourself anyway, so this is an indefensible statement.’ She happens to be in a position to have to sell (among other things) her willingness to be courteous to every single person who walks in the door during her shift, which puts us all in a position to be able to judge her for how her emotional relationship to her personal demeanor is changed by her economic relationship to it.

              Well, we could lay off of her for that and just hear her meaning: that she wants a raise to keep doing what she’s doing. We could criticize her for taking her case public, but in all likelihood it’s pretty much written in stone what increases are available to her, and they’re not acceptable (to her, now). She doesn’t have the leverage of, say, a codewriter with a degree of not-immediately-fungible firm-specific intellectual capital and the potentially resulting ability to force a change in terms. She needs to create her own leverage, and she’s doing what workers in her position have been doing for centuries. I don’t see what’s so indefensible here.

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              • Those are good points Michael,

                If all applicants are willing to require more than $7.25 to be courteous, then fast food places will have to pay more. Of course, some people are probably willing to be courteous for less, thus she is likely to find herself either out of a job or delivering better service. In the end the consumer wins.

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                • …Point being, while I like winning in that way as much as the next guy (it really bugs me, for example, when I get a barista who seems unhappy to be there, because I think I actually really would like to be able to serve people good coffee had I acquired those skills somewhere along the way [right now actually a nice coffee shop gig is pretty hard to come by & there’s a lot of people with a supple tamp hand out there looking for espresso machines to work], and I certainly think I’d be able to fake it for people willing to overpay for a non-necessary consumable when I wasn’t feeling that way…), nevertheless, I accept and am interested in hearing from people in other sectors of the service economy whose work environment and compensation seem like much less pleasant experiences to me (i.e. basically anyplace with friers and a business model of getting as many people their lunch as fast as mechanically possible). Service jobs, even ones paying a given wage, are not all the same, and our happiness as consumers rides on the experience of the workers who make that experience possible, all of whom have no choice but to do one thing or another for $7.25 (or $8 or what have you) per hour – otherwise they’d be taking it. That they voluntarily accept their daily bread for their 8 or ten hours of work doesn’t mean we should axiomatically declare them all happy (enough), nor, as far as I am concerned, be unsympathetic to their accounts of what it’s like to be a human whose work is to provide us consumers with a satisfying experience.

                  I appreciate the work service workers do to make my life as a consumer nicer, and I don’t mind a bit when they inevitably get to that place where they need to make some of the internal experience of that work public – not at the wages they command for that work. It’s amazing to me that anyone begrudges them momentary breaches of the illusions some of us apparently allow ourselves to have about the the experience and fulfillment provided by that kind of work.

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        • ” being courteous to people shouldn’t be a normal way of life, but something you shouldn’t have to do until you get paid enough per hour.”

          In retail, you don’t get paid to be courteous in a normal way. You get paid to be courteous even when (especially when) you are getting verbally abused. (Maybe that is strong wording, but you get the point.) That is the job, and it isn’t a natural, normal level of being courteous. Not at all.

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          • I’ve done those jobs, and I’ve got my own stories about them just as much as anyone else. While you’re focusing on how unfair it is to the person to be mistreated, I’ll focus on a lesson I’m still trying to master (and I’m fully aware of how far from mastery I am), which is that being courteous in response to discourtesy is far more emotionally satisfying and de-stressing than letting the discourtesy get to you.

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            • That’s interesting, and maybe more worthwhile discussing than economics and political philosophy. It would make a great OP, IMO. (Though fairness is important too.)

              Courteousness is a good thing to aim at. But it may be too saintly to aim at it always.

              Being virtuous and being saintly might be quite distinct, I suspect. Indeed, being discourteous at the right time, and the right place, for the right reasons might be a necessary part of a virtuous life. I’m not sure and would like to be convinced. Everything according to the golden mean.

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      • These types of jobs are starting points or stepping stones or dead ends. If someone with ambition wants to move up the ladder in a fast food place, there are many opportunities to advance. If someone wants to use a job like to work their way through college or a training education to get a better job, then fine. If someone wants to stay in a job like this and expect the company to change and give them more money because they think they should have more money, then it’s a dead end. Another thing that can happen in a job like this is to learn the business and start a little fast food deal that is unique and has potential to be successful, even if it’s a little more expensive to start with, if the place catches on, it can compete and grow. It’s not all about slaves trapped in by a mad clown.

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    • James,

      Even though I disagreed above with Will Truman on this issue, you (and he, to a large degree* ) are probably right. I don’t know this person specifically, of course, but such people, as you say, probably won’t be courteous at any price.

      I suppose it depends, however, whether it’s a throwaway statement or representative of the worker’s overall attitude. And I didn’t read any of the links, so I don’t know if it’s covered there. And sometimes, I wager, some customers consider “courtesy” to be nothing less than “servile obsequiousness.”

      I will say, in support of your statement, that in my experience, being courteous often has the advantage of making the job easier and making the day go by faster. Although a lot of customers don’t appreciate courtesy, many, maybe even a majority or a strong majority, do.

      *But I wouldn’t say I have “absolutely no sympathy” for that argument, as he says. At the same time, I realize there is such a thing as hyperbole, and that hyperbole is always usually often sometimes lost on me. So perhaps I overreacted.

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      • t in my experience, being courteous often has the advantage of making the job easier and making the day go by faster.
        I hadn’t thought about that, but it’s very true. And despite that small set of customers who are bound and determined to be a**holes, no matter what, in general the courtesy gets awarded by more courtesy from the customer, which is part–not all, but a large part–of what makes the job easier and the day faster (another part is just keeping yourself in a pleasant mood, even when things get upleasant–but that’s a damned sight harder for most of us than being in a pleasant mood because others are being pleasant to us).

        I wouldn’t say I’m entirely unsympathetic to the person, but if it’s actually the job that’s making them discourteous, rather than discourtesy being their natural inclination (and courtesy only a false front they’ll suffer to put on when the price is right), then it’s probably not the pay as much as it is other working conditions; how they’re treated in general. My understanding is that studies have shown that pay actually isn’t one of the top things that affect employee morale.

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        • “understanding is that studies have shown that pay actually isn’t one of the top things that affect employee morale.”

          I’m guessing that is true only up to a point.

          Pay me 2.50 a day, and my morale will suffer, especially if I can’t find better work, even if my work is nice,

          I would say that having to be courteous is incredibly difficult. I had a guy yell at me for 15 minutes about how poor and stupid I was and how awesome he was, because I told him he shouldn’t bother paying 8.50 to get the pant hemmed because they looked good enough. My manager was watching and so was a girl that I liked. I went home and contemplated (briefly) killing myself out of sheer embarrasment about how pathetic I was for not quitting, but I needed the job and was scared to quit. Instead, I got drunk.

          If The best that I could do was keep that job (which would’ve been the case if I had been unlucky enough to be born less able to overcome my addictions), I would start to resent that I had to live in poverty and be berated constantly, and I would be right to think that my wage and my situation was unfair.

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          • Again, it looks like the problem was not the pay so much as how you were treated. A good boss would have stepped in. (Unfortunately, there are few truly good bosses around; most just like being in charge, and mistake that for being in control.)

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            • But retail (and fast food, I imagine) requires that you tolerate being mistreated. The boss won’t always be there, and she will tell you that you should take the abuse, and smile, despite the fact that you feel like your dignity is being taken. The customer is always right. And I can take that attack on my dignity, but it makes the job hard.

              The problem is this: Some people can’t get a job that is better than minimum wage while that job requires them to sometimes have their dignity attacked.

              Really, the complaint that “I won’t deal with obnoxious customers for 7.50 an hour” is similar in form and meaning (though less in degree of awfulness) to “I won’t risk my life in that coal mine for 2.50.”

              In both cases, the quote is -I think this is the point of the quote in the OP- evidence that low-paid workers are unhappy, believe their situation is unfair, and are in a psychological state that might lead them to trying to form a union.

              I get that you think their treatment is fair.

              But that is a dispute for another day, IMO.

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