Posts Tagged ‘labor’


Volkswagen has accepted the United Auto Workers’ attempt to unionize its Chattanooga, Tennessee manufacturing plants.

Scott Wilson, a VW spokesman, said: “Volkswagen values the rights of its employees in all locations to representation of their interests.  In the United States, it is only possible to realize this in conjunction with a union.  This is a decision that ultimately lies in the hands of the employees. For this reason, we have begun a dialogue with the U.A.W.”

But Republican politicians, local businesses, and outside right-wing groups are attempting to derail the drive.

Two of Tennessee’s most prominent Republicans, Gov. Bill Haslam and Senator Bob Corker, a former mayor of Chattanooga, have repeatedly voiced concerns that a U.A.W. victory would hurt the plant’s competitiveness and the state’s business climate.

A business-backed group put up a billboard declaring, “Auto Unions Ate Detroit. Next Meal: Chattanooga,” while a prominent anti-union group, the National Right to Work Committee, has brought legal challenges against the U.A.W.’s effort, asserting that VW officials improperly pressured workers to back a union.

In addition, Grover Norquist, the anti-tax crusader, has set up a group, the Center for Worker Freedom, that has fought the U.A.W. on several fronts, partly to prevent the election of labor’s Democratic allies who might increase government spending.


Thomas Piketty’s new book, Le capital au XXIe siècle (which is supposed to be released soon in English as Capital in the 21st Century), is creating quite a stir. It is the subject of the latest column by Thomas B. Edsall and was recently reviewed by Branco Milanovic [pdf].

In fact, the chart above is taken from Milanovic’s review. It shows the growing gap between (as Piketty defines them) the rate of growth of world production (g) and the rate of return to capital (r) during the nineteenth century and, after the “special period,” from the mid-1970s onward. For Piketty, that gap is the source of growing inequality in both the functional (capital-labor) and size (top 1 percent) distributions of income.

I’ll refrain from further commentary until I’ve had a chance to read the book (which, if all goes well, I’ll probably end up adding to my Topics in Political Economy reading list in the fall). But, I’ll admit, I am both intrigued (by the model and data) and somewhat wary (especially concerning the definition of capital) of Piketty’s approach. Still, given Milanovic’s summary,  Piketty’s methodological reflections alone warrant further attention:

Appropriately for such a wide-ranging book, Piketty closes his book with an essay on the method to be used in economics. He regards economics as a social science (where the emphasis is on “social”) that can flourish only if (i) it asks important, and not trivial, questions (so adieu Freakonomics and randomistas), and (ii) uses empirical and historical methods instead of sterile model-building. These issues have been debated ad nauseum by the economists, and Piketty has nothing new to add to that, except perhaps in a most important way—namely, by showing in his own work how these two desiderata should be combined to create economic works of durable importance.


Pope Francis offered the only possible response to his being accused of being a Marxist. First, that the “Marxist ideology is wrong.” (How could an official of the Catholic Church, much less the Bishop of Rome, assert otherwise?) And then:

“But I have met many Marxists in my life who are good people, so I don’t feel offended.”


That really is the only way to respond to the kinds of outrageous insults right-wing commentators and business pundits have hurled at him after the publication of Evangelii Gaudium.

And Priyamvada Gopal gets it:

The use of “Marxist” as a slur – along with kindred terms such as “socialist” and “communist” – is not a uniquely American phenomenon but is most familiar to us from the era of the infamous House Un-American Activities Committee, established in 1938 and, later, Joseph McCarthy’s committee.

In that context, and during the “red scares” which followed it during the cold war, these were appellations used to identify and punish any criticism of capitalism, however sympathetic or merely reformist. Indeed, any dissent from mainstream dogma was “un-American”.

As we all know, in the United States, any criticism of individual capitalists or capitalism as an economic and social system still is considered to be associated with Marxism or communism, long after the Fall of the Wall.

But I do need to correct Gopal’s rendering of the long tradition of American anticommunism on one point: the first “red scare” wasn’t in 1918 but earlier, in the nineteenth century, in response to the upsurge of union organizing and the related hunger demonstrations and then in reaction to the Paris Commune.

As Patrick C. Jamieson has explained,

News sources, especially in America, were becoming increasingly worried about the rise of what they perceived as a Communist movement in Paris. This ‘red fear’ was based on both fascination and anxiety over the ideology.  Because of the Commune’s close ties with labor unions, the International Working Men’s Association, socialists, and Karl Marx and Friedrich Engels, the Commune thus “further reinforced the bourgeois notion of class war,” as Gay Gullickson notes.  “Journalists regularly referred to the ‘Reds’ in Paris and used ‘communist’ as a synonym for ‘communard’….” Some journalists even used all three terms interchangeably.  Both American newspapers and periodicals followed a similar path in criticizing the Commune and exposing it to the rest of the world. One historian notes that, “[t]he chorus of abuse in the American press quickly mounted as the Commune unfolded, and after its destruction it was frequently used to epitomize all the horrors of ‘communist’ philosophy….The Commune [brought] out [people’s] worst anxieties about the family, religion, property, and social order.” The Paris Commune became the great fear of anti-Communist Americans who saw the actions of the working class in Europe as a major threat.

So, yes, the “red menace” attacks on the pope have a long lineage in the United States, which stretch back to the nineteenth century—and have clearly outlasted the Cold War.


Apparently, Maine’s Republican Governor Paul LePage is continuing his push to loosen the state’s child labor laws, arguing that 12-year-old children should not be restricted from working and learning life skills.

“I went to work at 11 years old,” he said at a town hall meeting in 2011. “I became governor. It’s not a big deal. Work doesn’t hurt anybody.”

“I’m all for not allowing a 12-year-old to work 40 hours,” LePage told Down East magazine in an interview published this month. “But a 12-year-old working eight to 10 hours a week or a 14-year-old working 12 to 15 hours a week is not bad.”

LePage earlier backed legislation that would have allowed businesses to pay students $5.25 an hour, rather than the $7.50 minimum wage. That bill was unsuccessful.


Note: I just learned that U.S. federal law does not prohibit but only regulates child labor: by limiting the maximum hours of employment for youth between the ages of 14 and 16 years old to 3 hours a day and 18 hours a week on school days and, when school is out, 8 hours a day and 40 hours a week; and by establishing a youth minimum wage of $4.25 per hour for employees under 20 years of age during their first 90 consecutive calendar days of employment with an employer.


The other day, I posted a few paragraphs from the new Roman Catholic Pope Francis’s apostolic exhortation Evangelii Gaudium (which translates as “The Joy of the Gospel”).

I’ve now had a chance to read the entire text (available here), which seems to have gotten some notice around the world (although, best I can tell, there’s still no comment from the likes of Paul Ryan, who would steal bread from the mouths of the poor in the name of saving them from anything but the market).

The document as a whole is a call to a new kind of evangelization on the part of Catholics, both clerical and lay. (On Michael Sean Winters’s interpretation, “The Pope is calling the Church to be a missionary Church, an evangelizing Church, and the privileged path of fidelity to the Gospel is service to the poor.”) The main sections on economics are located in chapter 2 (“Amid the Crisis of Communal Commitment”) and chapter 4 (“The Social Dimension of Evangelization”).

The paragraphs I posted before are from chapter 2, in which Francis identifies the nature of the world in which he is making his call for a new missionary church. Permit me to repeat them here:

53. Just as the commandment “Thou shalt not kill” sets a clear limit in order to safeguard the value of human life, today we also have to say “thou shalt not” to an economy of exclusion and inequality. Such an economy kills. How can it be that it is not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses two points? This is a case of exclusion. Can we continue to stand by when food is thrown away while people are starving? This is a case of inequality. Today everything comes under the laws of competition and the survival of the fittest, where the powerful feed upon the powerless. As a consequence, masses of people find themselves excluded and marginalized: without work, without possibilities, without any means of escape.

Human beings are themselves considered consumer goods to be used and then discarded. We have created a “throw away” culture which is now spreading. It is no longer simply about exploitation and oppression, but something new. Exclusion ultimately has to do with what it means to be a part of the society in which we live; those excluded are no longer society’s underside or its fringes or its disenfranchised – they are no longer even a part of it. The excluded are not the “exploited” but the outcast, the “leftovers”.

54. In this context, some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naïve trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system. Meanwhile, the excluded are still waiting. To sustain a lifestyle which excludes others, or to sustain enthusiasm for that selfish ideal, a globalization of indifference has developed. Almost without being aware of it, we end up being incapable of feeling compassion at the outcry of the poor, weeping for other people’s pain, and feeling a need to help them, as though all this were someone else’s responsibility and not our own. The culture of prosperity deadens us; we are thrilled if the market offers us something new to purchase. In the meantime all those lives stunted for lack of opportunity seem a mere spectacle; they fail to move us.

These paragraphs contain a number of remarkable statements. First, as I explained to students in class earlier this week, Francis actually raises opposition to economic inequality and exclusion—to an economy that “kills”—to the level of a commandment. Second, “exclusion” (by an economy that creates “outcasts” and leftovers”) is added to, but does not simply replace, the problems of “oppression” and “exploitation” (of people who presumably join the excluded as the great mass of the “powerless” who are fed on by the “powerful”). Third, he invokes a society of the market spectacle, which both offers us new things to purchase and treats human beings themselves as commodities, “to be used and then discarded.” And, finally, he asserts that “trickle-down” economics, which some people continue to defend, “has never been confirmed by the facts.”*

The following paragraphs expand the critique of current economic arrangements by referring to how money and finance are out of control (in the form of the “idolatry of money and the dictatorship of an impersonal economy lacking a truly human purpose” and “financial speculation”), the existence of increasing inequality (“While the earnings of a minority are growing exponentially, so too is the gap separating the majority from the prosperity enjoyed by those happy few”), the negative effects on the natural environment (“this system, which tends to devour everything which stands in the way of increased profits, whatever is fragile, like the environment, is defenseless before the interests of a deified market, which become the only rule”), and the causes of violence (“until exclusion and inequality in society and between peoples are reversed, it will be impossible to eliminate violence,” and “This is not the case simply because inequality provokes a violent reaction from those excluded from the system, but because the socioeconomic system is unjust at its root”).

Taken together, the various points comprise an honest critique of the existing set of economic arrangements and institutions of the sort we never read or hear from mainstream economists and politicians, who either ignore and seek merely to ameliorate some of the effects of the kind of economic devastation we’ve witnessed in recent years. It’s also as clear an analysis of the current context to be found anywhere, which should serve as the background for any pronouncement of where we are and what should be done.

The second major set of statements about the economy occurs in chapter 4, where Francis outlines what the “preferential option for the poor” actually means. Again, let me reproduce some paragraphs from the text:

202. The need to resolve the structural causes of poverty cannot be delayed, not only for the pragmatic reason of its urgency for the good order of society, but because society needs to be cured of a sickness which is weakening and frustrating it, and which can only lead to new crises. Welfare projects, which meet certain urgent needs, should be considered merely temporary responses. As long as the problems of the poor are not radically resolved by rejecting the absolute autonomy of markets and financial speculation and by attacking the structural causes of inequality, no solution will be found for the world’s problems or, for that matter, to any problems. Inequality is the root of social ills. . .

204. We can no longer trust in the unseen forces and the invisible hand of the market. Growth in justice requires more than economic growth, while presupposing such growth: it requires decisions, programmes, mechanisms and processes specifically geared to a better distribution of income, the creation of sources of employment and an integral promotion of the poor which goes beyond a simple welfare mentality. I am far from proposing an irresponsible populism, but the economy can no longer turn to remedies that are a new poison, such as attempting to increase profits by reducing the work force and thereby adding to the ranks of the excluded.

Here, Francis returns to the issue of inequality (“the root of social ills”), the structural causes of poverty (which cannot be resolved simply by “Welfare projects, which meet certain urgent needs”), and the centrality of the profit motive in creating inequality and exclusion (which means “the economy can no longer turn to remedies that are a new poison”).

And what needs to be done? A bit earlier, Francis provides the broad outlines of an alternative approach:

192. Yet we desire even more than this; our dream soars higher. We are not simply talking about ensuring nourishment or a “dignified sustenance” for all people, but also their “general temporal welfare and prosperity”. This means education, access to health care, and above all employment, for it is through free, creative, participatory and mutually supportive labour that human beings express and enhance the dignity of their lives. A just wage enables them to have adequate access to all the other goods which are destined for our common use.

The challenge, then, is to devise a set of economic institutions that make sure people have access to a basic set of goods and services (including education and access to health care) and employment (based on a “just wage”)—and the work people do, to “express and enhance the dignity of their lives,” needs to be very different from what it is now (inasmuch at it needs to be “free, creative, participatory and mutually supportive”).

In other words, Francis, without providing institutional details, outlines a general approach to work that simply cannot be provided by the current wages system. It creates an opening to imagine a radical reorganization of the economy, at both the microeconomic and macroeconomic levels, in which workers participate in making the fundamental decisions in their workplaces and the economy as a whole is coordinated (might we say planned?) so that existing inequalities and forms of exclusion are eliminated.

In the end, Evangelii Gaudium suggests a fundamental reorientation of the current economic debate: to admit the devastating effects of current economic arrangements on the broad masses of the population and to take up the imperative of restructuring the economy in the interests not of the tiny minority at the top but of those at the bottom who are subjected on a daily basis to processes of exploitation, oppression, and exclusion.

We will know we are in the midst of such a new economic debate when the news of an elderly homeless person who dies of exposure makes at least as much news as when the stock market loses a couple of points.


*The students asked me the other day if, in fact, trickle-down theory had ever been “confirmed by the facts.” I led the usual discussion of different criteria and sets of facts and then showed them this chart:


Not much confirmation of trickle-down economics there.


Menzie Chinn does a good job explaining, with the use of the chart above, how in a purely neoclassical world an increase in the minimum wage can lead to an increase in employment. (The key is, the demand for labor is a derived demand, which will increase as the working poor receive higher incomes as a result of an increase in the minimum wage.)

But why not then explain that employment can be increased even further (and unemployment eliminated entirely) through a jobs program in which workers—especially jobless and low-income workers—are hired directly by government agencies to do jobs that actually benefit society?

Or, alternatively, why not let minimum-wage workers participate in deciding how their enterprises will be run? That will surely increase the level of employment, even as the minimum wage continues to rise.


As hundreds of thousands of Federal government workers prepare to be sent home, the International Federation of Professional & Technical Engineers is urging “all Federal workers to join with our Sisters and Brothers throughout the labor community in fighting back.”

“The underlying problem has become clear. Speaker Boehner has failed in accomplishing his highest responsibility to represent ALL Americans – not just those who elected the small clan of extremists who are waging a scorched-earth and personal war against the President and workers,” [Gregory] Juneman [president of the IFPTE] added. “Instead of rallying the responsible wing of his Caucus, the Speaker has instead allowed his actions to be dictated by those who disrupted the State-of-the-Union, those who claim the President is a Muslim born in Kenya, those who spat on the iconic Representative John Lewis, those who wish to re-prosecute the civil war, and those who never understood the moral of Green Eggs and Ham. This House has reached a new low … and, similar to the results back in the 90’s, the American public will soon respond in a major way.”

Protest of the day

Posted: 17 September 2013 in Uncategorized
Tags: , , ,


More than 100,000 Polish workers [ht: sm] marched through the capital, Warsaw, on Saturday in the last of four days of protest against proposed changes to existing labor laws.

The protesters demanded a higher minimum wage, greater job security and the repeal of a law raising the retirement age to 67.

Many carried banners calling for Prime Minister Donald Tusk to resign.

wages-as-a-of-gdp_chartbuilder corporate-profits-as-of-gdp_chartbuilder

The unevenness of the current economic recovery is so obvious even mainstream economists have been forced to invoke the dreaded “c” word: class.

As I’ve pointed out many times on this blog, the more mainstream economists try to deny the relevance of class—after the crash of 2007-08, in the midst of the Second Great Depression—the more it rears its ugly head.

And so we have the spectacle of even the most vulgar of economists, such as Robert Samuelson, finding themselves in the position where they can’t ignore it. They really hoped the trend for labor’s share of national income to decline and capital’s share to rise would be reversed. But it didn’t. Not by a longshot.

Now, it’s true, mainstream economists like Samuelson have no idea why the two class shares are moving in opposite directions. But they do know that, as things continue in this direction, there are going to be real problems in terms of the fundamental unevenness and injustice of this recovery, and thus of the legitimacy of the current way of organizing economic and social life. That’s why they’re begging capital to do something about it:

What would improve the odds is more exuberance from the custodians of capital. CEOs seem content to sit on their profits and invest only when the needs and the returns are indisputable. Careless capital, which fostered the financial crisis, has given way to ultra-cautious capital, which is making a lackluster economy self-fulfilling.


Even the students at Harvard Business School are now enunciating the dreaded “c” word and admitting that class matters.

Update 2

And Goldman Sachs [ht: sm], it seems, has been busy creating its own in-house class divisions.


Wednesday’s story about the Hydronic Lift, the Italian company that closed its doors while workers were on vacation, forces us to ask the following question: whose uncertainty are we talking about?

In recent years, neoclassical economists and right-wing politicians have focused exclusive attention on employers’ uncertainty in the face of changes in taxes and government regulations. Their idea is, the economic recovery is being held back by the high degree of uncertainty on the part of the nation’s “job-creators.”*

But what about workers’ uncertainty? In Italy, they don’t know if, when they go on vacation, their jobs will be available when they return. In the United States, workers don’t know if their incentive pay will be reduced or, more generally, if benefits will be cut, their wages reduced, their jobs eliminated, or their hours cut back.

Workers’ uncertainty is, of course, nothing new. It begins the moment their ability to work becomes a commodity. As Eric Hobsbawm wrote, during the Age of Capital (p. 258),

If any single factor dominated the lives of nineteenth-century workers it was insecurity. They did not know at the beginning of the week how much they would bring home at the end. They did not know how long their present work would last or, if they lost it, when they would get another job or under what conditions. They did not know when accident or sickness would hit them, and though they knew that some time in middle age—perhaps in the forties for un-skilled laborers, perhaps in the fifties for the more skilled—they would become incapable of doing a full measure of adult physical labour, they did not know what would happen to them between then and death. Theirs was not the insecurity of peasants, at the mercy of periodic—and to be honest, often more murderous—catastrophes such as drought and famine, but capable of predicting with some accuracy how a poor man or woman would spend most days of their lives from birth to graveyard. It was a more profound unpredictability, in spite of the fact that probably a good proportion of workers were employed for long periods of their lives for a single employer. There was no certainty of work even for the most skilled: during the slump of 1857-58 the number of workers in the Berlin engineering industry fell by almost a third. There was nothing that corresponds to modern social security, except charity and relief from actual destitution, and sometimes little of either.

And now, of course, those economists and politicians who are most concerned about employers’ uncertainty want to dismantle the same “modern social security” that has mitigated at least some of the “profound unpredictability” faced by those who are forced to have the freedom to sell their ability to work.

*What they’ve done, of course, is take a fundamentally Keynesian proposition—that investors cannot know what is going to happen in the future, and therefore make rational calculations about expected profitability, which makes investment demand unstable—and transform it into the idea that the government is to blame for the Second Great Depression.


As if on cue, one reader [th: db] directed me to a blog post about the current depression in Harlan County.

While many working Americans enjoyed a paid day off from work Monday, Labor Day meant nothing to many residents in Eastern Kentucky, where the coal industry is shrinking. Harlan County had the state’s highest unemployment rate in July, 17.2 percent. The national average was 7.4 percent. In Harlan County, where 29,000 people live, 1,906 were out of work and actively seeking employment, but there are hundreds more who are unemployed but have exhausted their jobless benefits, says an editorial in the Harlan Daily Enterprise.

“As a result, it is well documented that our entire community — whether you are working in mining, health care, education, private business or any other occupation — is suffering,” the editorial says. “It goes without saying that many are frustrated. Miners who have worked long, hard years have no prospects for jobs at this time. Many of these same miners have, or will soon, exhaust their unemployment compensation benefits. We shudder when thinking of what is next for them and their families. The support industries are seeing the same scenario.”