Posts Tagged ‘labor’

lk041615dAPR

Special mention

cartoon1_891600c Tea-Party-Parade

162795_600

Special mention

59b52ffc-5292-48a4-b684-4a2dc4f2ca21-620x424 Toles-18-4

LFP

source

Capitalism, I’ve often argued, is not natural. It requires a lot of work. It required a lot of work to get it going in the first place. And it requires a lot of work to keep it going today.

A lot of that work involves getting people to work for someone else.

The problem of getting people to work is the foundation of the recent discussion (or, better, revival of the discussion, if we trace it back to Alvin Hansen) of “secular stagnation” [pdf]. Central to the current framing of the question—at least among mainstream economists—is the decrease in the number of available workers, created by declines in the rate of population growth and the labor force participation rate. The worry is that, looking forward, there simply won’t be enough workers to sustain the rates of potential economic growth we saw in the years leading up to the most recent crisis of capitalism.

It shouldn’t be surprising, then, to witness the spectacle of economists such as Regis Barnichon and Andrew Figura [pdf] claiming that the decline in the labor force participation rate in the United States is “a decline in desire to work among individuals outside the labor force, with a particularly strong decline during the second half of the 90s.” For them, it’s not a decline in the number of decent, high-paying jobs, but instead the unwillingness on the part of individuals who are currently not counted as part of the labor force to enter the labor force in order to work for someone else. And the reason?

Looking across different sub-groups, the decline in the number of nonparticipants who want to work is due mainly to prime-age females, and, to a lesser extent, young individuals. Moreover, the decline is mainly a low-income and non-single household phenomenon, and is stronger for families with children than without.

Precisely in order to overcome that supposed aversion to work, Laura Tach and Kathryn Edin praise the earned-income tax credit, because, as the nation’s largest cash anti-poverty program, it goes mostly to parents of children who are willing to work. And working for someone else is, for Tach and Edin, “tantamount to a badge of citizenship.” To which they add:

The dignity-building nature of this cash transfer is reinforced by the way it is administered, through tax preparation offices. Here, low-wage workers are customers served with a smile, not supplicants seeking a handout.

That, of course, is the proverbial carrot for the poor. And then there’s the incentive for employers themselves: the enormous subsidies provided by the government so that employers will hire and keep low-wage workers. As Ken Jacobs explains,

After decades of wage cuts and health benefit rollbacks, more than half of all state and federal spending on public assistance programs goes to working families who need food stamps, Medicaid, or other support to meet basic needs. Let that sink in — American taxpayers are subsidizing people who work — most of them full-time  (in some case more than full-time) because businesses do not pay a living wage.

But if poor people are still unwilling to take one of the low-wage, deadend jobs available, there’s always the stick of Kansas-style welfare reforms.

The measure — called the HOPE Act by supporters — “provides an opportunity for success,” Brownback said in a statement after signing the bill. “It’s about the dignity of work and helping families move from reliance on a government pittance to becoming self-sufficient by developing the skills to find a well-paying job and build a career.”

All of that, both theoretically and in terms of policy, is meant to force people to have the freedom to participate in the labor force. But that still doesn’t mean they’re going to do the requisite amount of work, even after they’ve landed one of those jobs.

According to Ronald Aslop [ht: ja], the problem is particularly acute among young people, who in his view are engaged in a constant struggle to keep their minds focused on the matter at hand and block out email and other digital distractions.

These distractions are shortening attention spans and making it difficult for young people to concentrate and stick with demanding assignments at school and work. In fact, researchers have found that millennials are more likely than Gen Xers or baby boomers to report that their productivity suffers at work because of smartphone distractions and “cyberslacking” on the Internet.

That means employers have to step in “to eliminate some of technology’s temptations” (which apparently involves limiting the use of digital technology and, my favorite, suggesting that distracted employees learn meditation and yoga).

What we’re learning is that it takes a lot of work to keep capitalism going. But notice that all that effort is directed at the masses of people who actually do the work, not at the tiny minority at the top who actually make the decisions about if, when, and how the jobs people are expected to do are actually created.

Apparently, focusing on those decisions—especially as corporate profits soar and economic inequality continues to grow—would require too much work.

Update

Now, according to the New York Times, workers are using stimulants like Adderall, Vyvanse, and Concerta to improve work performance: “many young workers insist that using the drugs to increase productivity is on the rise — and that these are drugs used not to get high, but hired.”

Fast-Track-to-TPP-600x467

Special mention

162790_600 Tom Toles Editorial Cartoon - tt_c_c150417.tif

ykdkqhstdm1ptubyuct2

I’ve made the case before that student-athletes are performing unpaid labor. That is, U.S. colleges and universities produce and sell athletic performances—especially, but not only, football and basketball games—that are produced by student-athletes who are not paid anything for their labor.

screen_shot_20140407_at_9.34.07_am.png.CROP.promovar-mediumlarge.34.07_am

source

The question then is, who’s benefiting from that unpaid labor? It’s certainly not the professors who teach at those schools (nor, for that matter, the staff who keep the academic programs and infrastructure running). Faculty members are not making anywhere near what the athletic coaches do, and their salary increases have lagged far behind the amount of money being paid to coaches in recent years.

table1

source

And much more money is being spent on athletic programs—although clearly not in the form of pay to the players—than on academic programs.

Figure2

source

So, where are all those revenues from the athletic program going? As it turns out, the single biggest outlay—more than a third—is for coaches’ salaries.

Apparently, according to a recent article on the Huffington Post [ht: ja], that’s the reason so many coaches are opposed to paying college athletes for their labor.

“Schools quite often move around or spend money to basically get rid of excess revenue — what would be called profit in a profit-making corporation,” said Michael Leeds, a professor of economics at Temple University. “‘[That’s why] you have several coaches [in the NCAA] getting paid NFL money, despite working for an enterprise that really does not match what the New England Patriots and the New York Giants take in.”

That would explain why some universities end up with state-of-the-art sports facilities. Or why Duke basketball coach Mike Krzyzewski makes nearly $10 million per year, much more than the typical NBA coach. Or why in so many states, the best-paid public employee is a basketball or football coach. . .

“The coaches very likely are very upset over [the prospect of] players being paid because, for one thing, that means a pay cut for them,” Leeds said.

fredgraph chart

The discussion of capital and labor shares puts the issue of class at the top of the agenda. No wonder, then, that mainstream economists are expending so much effort these days attempting to define away the problem.

Let me explain.

If we look at changes in capital and labor shares (measured in terms of corporate profits before tax and compensation of employees as shares of gross domestic product, as in the chart on the left), we can clearly see that, in recent decades, the profit share has been rising and the labor share has been falling. In other words, labor has been losing out to capital—and we need to focus on solving that class problem.

But, of course, the share of income accruing to capital doesn’t just show up in corporate profits; some of that capital share is also distributed to a small portion of income-earners in the corporate (both financial and nonfinancial) sector. The share of income of the top one percent (as in the chart on the right) is a good approximation. If we therefore added the top-one-percent to corporate profits, and at the same time subtracted it from the compensation of employees, the divergence between the capital and labor shares would be even greater—and the class problem would be even more acute.

MIT’s Matthew Rognlie understands this perfectly. He notes that David Ricardo pronounced the issue of how aggregate income is split between labor and capital the “principal problem of Political Economy” and that the recent explosion of research on inequality has both called into question the postwar presumption of constant capital and labor shares and emphasized the increasing share of income accruing to the richest individuals. In other words, class has once again reared its ugly head.

Instead of trying to solve this class problem, Rognlie attempts to define away the problem—first, by focusing on net income shares and, then, by including housing in capital. He concludes that, once those adjustments are made,

concern about inequality should be shifted away from the split between capital and labor, and toward other aspects of distribution, such as the within-labor distribution of income.

The problem with focusing on net income shares—that is, in the case of capital, gross profits minus depreciation—is that it confuses flows of value (corporate profits before taxes, plus incomes to the top one percent, in the way I suggested above) with expenditures (e.g., by corporations to replace the value of plant, building, and machinery that has depreciated in value during the course of production).

The problem with including housing in the capital stock is that it doesn’t form part of the capital from which capitalists derive a flow of new value added or created. Housing industry profits are already accounted for in gross corporate profits. The fact that individuals may own housing doesn’t allow them to capture any of that new value; it just allows them to enjoy the benefits of having a home and to pay the costs (to banks and other financial institutions) of financing their homeownership.

While I agree with Rognlie that the “story of the postwar net capital share is not a simple one,” the fall and then recovery of the capital share (in the form of both corporate profits and one-percent incomes), which is mirrored by the rise and then fall of the wage share, can’t simply be defined away.

In other words, just as it was in the early-nineteenth century, class remains the “principal problem of Political Economy” in our own times.

Labor’s cartoonist

Posted: 4 March 2015 in Uncategorized
Tags: , , ,

huck1oct

Gary Huck, whose cartoons have often graced this blog, is the last full-time cartoonist employed by a major labor union (the UE—the United Electrical, Radio and Machine Workers of America).

Huck is the subject—alongside the freelance labor cartoonist Mike Konopacki, who formed a syndication partnership with Huck in the early 1980s to sell cartoons to union and alternative newspapers—of “Seeing Red,” an exhibit of their work running through Friday at the Uri-Eichen Gallery in the Pilsen neighborhood of Chicago.

The UE, which was founded in the 1930s by workers from GE and Westinghouse and RCA, once had a membership of more than 600,000 workers. And though the UE historically has been on the left politically, not everything that Huck draws wins lock-step approval these days. A couple of months ago, for instance, in the wake of the Ferguson, Mo., riots, Huck tweaked Norman Rockwell’s iconic painting of a policeman sitting at the counter of a soda fountain beside a young boy. He made the white child a black child, with hands raised in surrender. That went into the UE News, and Hart said it received some backlash from members. Still, Huck has become a cornerstone of the union.

Part of its culture.

Par for its course.

The cartoons of both Huck and Konopacki can been seen here.