Archive for September, 2012

Everyone seems to know about employer lockouts in the National Football League (and, now that the union referees have been allowed to resume officiating games, attention has turned to the National Hockey League). But Steven Greenhouse warned back in January about a more general upsurge in employer lockouts.

America’s unionized workers, buffeted by layoffs and stagnating wages, face another phenomenon that is increasingly throwing them on the defensive: lockouts.

From the Cooper Tire factory in Findlay, Ohio, to a country club in Southern California and sugar beet processing plants in North Dakota, employers are turning to lockouts to press their unionized workers to grant concessions after contract negotiations deadlock. . .

“This is a sign of increased employer militancy,” said Gary Chaison, a professor of industrial relations at Clark University. “Lockouts were once so rare they were almost unheard of. Now, not only are employers increasingly on the offensive and trying to call the shots in bargaining, but they’re backing that up with action — in the form of lockouts.”

The number of major work stoppages has, in fact, increased in the past few years.

However, since the Bureau of Labor Statistics does not distinguish between worker-initiated strikes and employer lockouts, the overall number masks a fundamental change: while the number of strikes has declined to just one-sixth the annual level of two decades ago, lockouts have grown to represent a record percentage of the nation’s work stoppages.

Dave Jamieson explains,

In one high-profile case, more than 1,000 workers represented by the Bakery, Confectionery, Tobacco Workers and Grain Millers union have been locked out of their jobs with sugar beet processor American Crystal Sugar for over a year in North Dakota, Iowa and Minnesota. Members of Congress have finally weighed in, trying to pressure the company to come to the table and put union members back to work.

A lockout is different from a strike. In a lockout, the workers do not choose to walk off the job in protest. Instead, they are forced off the job by management as a negotiating tactic. Deprived of a paycheck, workers are more likely to scale back their demands or accept concessions at the bargaining table, management believes.

Nelson Lichtenstein, a labor historian at the University of California, Santa Barbara, said lockouts have historically been used by companies going “on the offensive,” trying to leverage hard economic times or workplace trends.

“In general, it’s safe to say lockouts take place more frequently when management has the upper hand,” Lichtenstein said. “There are a lot of lockouts when wages or conditions are stagnant or going down and management thinks they can do more of that.”

I wonder if the public’s criticisms of the NFL lockout will generate support for all the workers who are being locked out in the midst of the Second Great Depression by increasingly militant employers.

And Chris Hayes obliges:

The video of Mitt Romney talking to donors that Mother Jones posted last week is an incredible artifact from an entire culture and civilization that exists in our midst, but which we hardly ever get to see: the world of the high-end donor. And, whoo boy it is not pretty. . .

The folks in the room all but advise Romney to simply tour around the country reading passages of Ayn Rand novels out loud at his campaign rallies and hectoring the idiotic masses to bow before their obvious superior. . .

Keep in mind we’re talking about a fundraiser that cost $50,000 a plate. Fifty thousand dollars also happens to be the median household income in the U.S. So the kind of wealth you need to have to be in the room with Romney is the kind of wealth that means you can just pony up as much money as many Americans make in a year to listen to Mitt Romney trash talk the very people who make in a year the same amount you just ponied up for dinner. . .

And this gets us to what I’ve become convinced is the most pernicious effect of big money on our politics. It’s not that lots of money can buy elections, though sometimes that’s true. It’s not that campaign contributions function as a quid pro quo, chits to be cashed in when legislation is being considered, though that’s also often true. It’s that every single person running for high office in America is forced to spend the vast majority of their time around one group of people and one group only: wealthy people. That’s who they talk to, and listen to all day long, day in and day out, every day for months and years and decades. It’s an incredibly warping effect.

Special mention


Austerity in Europe is working.

Working, that is, to the benefit of employers—because many people are not working, and workers in both the private and public sectors are being squeezed.

New data from Société Générale’s Cross Asset Research/Economics group (as presented by FT Alphaville) indicate that unit labour costs—basically, wages and productivity—have been falling quite rapidly in southern Europe (especially Greece, Spain, and Portugal) and Ireland.

SocGen’s Michel Martinez writes that there are outright wage declines in Greece while in the other peripherals, labour productivity (as measured by ULC) is outpacing wage gains. Hence:

This suggests that wage growth has come in line with sustainable productivity gains. The key conclusion is that erosion of ULC imbalances does not necessarily need to take a decade.

So, yes, austerity is working—and workers are the ones who are losing out.

P.S. I refer here to the effects of austerity, the combination of economic depression, unemployment, and cutting government programs that leads to declines in unit labor costs based on growing productivity and stagnant or declining wages. The euphemisms invoked in mainstream economic and political circles are “internal devaluation” and “labor cost rebalancing.”

Special mention



Steven Ashby thinks we’re in the midst of a historical turning point:

So are Wisconsin, Occupy and the CTU strike another turning point that future historians will see as the beginning of a new mass workers’ movement demanding social change?

If I was a betting man, I’d put my money on it. One key ingredient in the making of historical turning points is that people begin to view street protests as normal instead of weird. Instead of viewing a mass march on TV or the occupation of a building as strange and scary, many people watch those same events and think to themselves, “Good for them. That’s what it takes to get anything done in this country. Maybe I’ll join them.”

I can’t say I’m as optimistic as Ashby. But, as I’ve often explained to students, history is unpredictable.

Isn’t there something wrong when the vice-presidential candidate for a major political party in the United States gets his economics from a work of fiction?

Don’t get me wrong, I love novels. I read novels all the time. I even think that the everyday economics is represented in novels—and in music, art, children’s books, and so on.

But I don’t get my economic ideas from works of fiction. Unlike Paul Ryan:

(3: 21)  It’s so important that we go back to our roots to look at Ayn Rand’s vision, her writings, to see what our girding, under-grounding [sic] principles are. I always go back to, you know, Francisco d’Anconia’s speech (at Bill Taggart’s wedding) on money when I think about monetary policy. And then I go to the 64-page John Galt speech, you know, on the radio at the end, and go back to a lot of other things that she did, to try and make sure that I can check my premises so that I know that what I’m believing and doing and advancing are square with the key principles of individualism…

Is this then the monetary policy Ryan gets from d’Anconia’s speech in Atlas Shrugged?

“Whenever destroyers appear among men, they start by destroying money, for money is men’s protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it becomes, marked: ‘Account overdrawn.'”

I wonder what Ryan’s economics would be today if like the rest of us, instead of Ayn Rand, he’d read Dostoevsky, Pynchon, and Austen when he was young.

The Line

Posted: 28 September 2012 in Uncategorized
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Special mention


Chris Bertram beat me to it.

After following the insipid Ayn Rand-inspired debate about “moochers” and “producers,” and learning that nearly all Americans (96 percent) have relied on the federal government to assist them, I was going to argue that it’s time to move beyond the distributive and redistributive implications of government programs to discuss the prior, “predistributive” effects of capitalist production.

Bertram reminds us of Marx’s “Critique of the Gotha Programme“:

Any distribution whatever of the means of consumption is only a consequence of the distribution of the conditions of production themselves. The latter distribution, however, is a feature of the mode of production itself. The capitalist mode of production, for example, rests on the fact that the material conditions of production are in the hands of nonworkers in the form of property in capital and land, while the masses are only owners of the personal condition of production, of labor power. If the elements of production are so distributed, then the present-day distribution of the means of consumption results automatically. If the material conditions of production are the co-operative property of the workers themselves, then there likewise results a distribution of the means of consumption different from the present one. Vulgar socialism (and from it in turn a section of the democrats) has taken over from the bourgeois economists the consideration and treatment of distribution as independent of the mode of production and hence the presentation of socialism as turning principally on distribution. After the real relation has long been made clear, why retrogress again?

Bertram then explores the implications:

This standard social-democratic response to capitalist inequality – welfare-state capitalism – has a lot of drawbacks. Not only does it fail to address the basic causes of inequality; it also puts in place, on a permanent basis, a politics of envy and resentment in which “makers” (tax-payers and self-styled “wealth creators”) are pitted against “takers” (scroungers and “welfare Queens”). Rentiers and coupon-clippers, the very people Marx saw as parasites, can form political alliances with hard-working ordinary people against “dependency culture” as an all too human reaction to the state seeming to come along and take away their money to fritter on the indolent and wasteful. Nor does the litany of plutocratic moaning stop there: by taking money off “entrepreneurs”, the state takes away their incentives and makes it harder for them to make the right investment decisions. The ideologists of the free-market right – people like Nozick and Hayek – are successfully tapping into some deeply embedded images of how our societies work.

Bertram heads in the direction of Rawls. In my view, we might be better off if we began to imagine different ways of organizing production, including the enterprises where the surplus is “predistributed” from workers to capitalists, and then redistributed to still others who, as Marx wrote, share in the booty.

A different initial distribution would result if the direct producers themselves appropriated the surplus. It’s not that the workers would keep all the surplus (as Marx also explained in his 1875 critique). But such a noncapitalist “predistribution” would require a very different set of subsequent distributions, and therefore a fundamentally different kind of state.