Posts Tagged ‘wages’

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Liberals like to talk about all kinds of social ills and identity-laden tensions—but not class struggle. That’s their persistent and enduring blindspot.

Except, it seems, when it comes to Donald Trump.

Thomas B. Edsall is a good example. Over the years, he’s produced a series of solid, insightful surveys of liberal research and analysis on a wide variety of economic and political topics. But he hasn’t written much if anything about class—until his latest, titled “The Class Struggle According to Donald Trump.”

And, to give him credit, Edsall is right about one thing:

Trump campaigned as the ally of the white working class, but any notion that he would take its side as it faces off against employers is a gross misjudgment.

But his view of class struggle is sorely lacking. First, Edsall starts with and highlights the recent work of Alan Krueger and Eric Posner, who criticize “labor market collusion” on the part of large employers and maintain that the ideal labor market is one in which “workers can move freely to seek the most desirable opportunities for which they are qualified.”

Presumably, if the appropriate reforms were made—for example, scrutinizing mergers for adverse labor market effects, banning non-compete covenants that bind low-wage workers, and no-poaching arrangements among establishments that belong to a single franchise—the problem of class struggle would be solved.

Second, Edsall accepts the idea that, until the 1970s, class struggle in the United States had mostly disappeared or held in abeyance, under the “postwar capital-labor accord.” But there never was such an accord—or, as it is sometimes referred to, a “truce.”

As economists Richard McIntyre and Michael Hillard (unfortunately behind a paywall) have argued,

Recent U.S. historical and industrial relations scholarship rejects the existence of such an accord. . .The existence or non-existence of an accord is not only an important matter of history; it has very definite practical effects. During the 1980s and 1990s especially, many in the labor movement and some radical economists sought “cooperation” between capital and labor as a cure for the ills of the American economy, often harkening back to the imagined “golden age.” But if such cooperation is a historical chimera, the time and energy put into “cooperation” might have been better spent in the self-organization of the working class.

Today, under Trump, Edsall and other liberals are attempting to revive that tradition, hoping that reforming the labor market can serve as the basis for more “cooperation” between capital and labor.

Ironically, both Trump and liberal thinkers like Edsall invoke a nostalgia for the exact same postwar period. In the case of Trump, it was a time when U.S. manufacturing successfully exported to the entire world; for Edsall and company, it’s when labor and capital agreed to cooperate and negotiate peacefully.

But that doesn’t mean there wasn’t intense class struggle during that period—or, for that matter, afterward. Only that the conditions and consequences have changed. And employers have been on the winning side for decades now, long before Trump was elected.

Consider the data Edsall himself cites, which are illustrated in the chart at the top of the post. Since 1970, the wage share of national income (the orange line) has fallen by more than 15 percent. Meanwhile, beginning in 1986, the profit share (the blue line) has risen by 164 percent. For decades now, under both Democratic and Republican administrations, a class struggle has been waged by corporate boards of directors and workers—and the working-class has been losing.

It’s true, they’re still losing under Trump. But they also lost during the recovery from the crash of 2007-08. Just as they did in the decades leading up to the greatest crash since the first Great Depression.

In fact, one can argue that capitalists’ remarkable success in extracting more or more profit from workers is precisely what created the obscene levels of inequality in the distribution of income and wealth that have left the majority of the U.S. population falling further and further behind—and, as a consequence, the election of Donald Trump.

The problem is not, as liberals would like to believe, that exceptional circumstances—market imperfections—have turned the tide against workers. It’s that class struggle is inherent to capitalism, and workers are only useful as creators of the enormous profits captured by their employers.

As I see it, class struggle between employers and workers can’t be solved by reforming the labor market. It can only be eliminated by getting rid of the labor market itself—that is, by moving beyond capitalism.

That’s a real solution to the problem of class struggle that neither Trump nor American liberals are interested in thinking about.

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The usual suspects have attacked Bernie Sanders’s proposal for the federal government to guarantee a job paying $15 an hour and health-care benefits to every American worker “who wants or needs one.”

According to Robert J. Samuelson, “The proposal would add to already swollen federal budget deficits. . .Then there’s inflation. The extra spending and higher wages might push prices upward.”

After listing a number of other “unavoidable” problems, Samuelson concludes:

Americans are suckers for great crusades that make the world safe for the pursuit of happiness. In this context, Sanders’s job guarantee seems a masterstroke. The chronically unemployed need jobs; and states and localities have large unmet needs for public and quasi-public services. It’s a bargain made in heaven.

Back here on Earth, the collaboration looks less noble. The object is to appear good and buy political support. Many of the suggested jobs seem best described as make-work. The irony is that, by assigning government tasks likely to fail, the advocates of activist government bring government into disrepute.

And here’s Ed Rogers:

Democrats want to talk about Republicans living in the past, but the new progressives, as they like to call themselves, are in fact a lot like the old socialists. They want free college, free cash, free health care, new mandates for this and that, and so on. The latest progressive policy du jour to be gaining traction among Democratic Party presidential hopefuls is the so-called “job guarantee.”

What they have in common, in addition to the usual red-blooded American red-baiting, is they both cite a liberal critic of the Sanders proposal, Mother Jones blogger Kevin Drum:

even our lefty comrades in social democratic Europe don’t guarantee jobs for everyone. It would cost a fortune; it would massively disrupt the private labor market; it would almost certainly tank productivity; and it’s unlikely in the extreme that the millions of workers in this program could ever be made fully competent at their jobs.

Let’s face it, Drum is right. The proposal would cost a fortune; it would massively disrupt the private labor market; it almost certainly would lower the official level of productivity; and millions of workers would probably never be fully competent at their jobs.

But that’s only because of how bad things are for workers in the United States right now. According to my calculations (illustrated in the chart at the top of the post), a quarter of full-time American workers currently earn less than $15 an hour. We’re talking about something on the order of 32 million people. And that’s not even counting part-time and unemployed workers. Plus all the workers, whether or not they currently have a low-paying job, who have costly or substandard health insurance.

Employing all those people—at $15 an hour, with medical benefits—would cost a fortune. But not employing them at decent wages already costs the United States a fortune, in individual and social costs. Moreover, there’s no doubt that, if people had a good shot at a federally funded job, they’d be more able to refuse the paltry pay and the indecent kinds of jobs private employers are currently offering. And workers on a federal jobs program might not achieve high levels of productivity—but they would be doing jobs, to repair the economic and social infrastructure, most people would benefit from. Finally, such workers might never become fully competent at their jobs. However, they would develop competencies above and beyond what they can manage to acquire when they’re unemployed or underemployed at their current low-paying jobs.

What Drum and others think is a hard-headed, realistic criticism of a job guarantee turns out to be a stinging indictment of American capitalism itself. The fact that there are “50 million people who would be better off with a government-guaranteed job than with the job they have now” calls into question the way the U.S. economy is currently organized.

That’s what’s really insane—sticking with the existing labor market, not the idea of proposing a Federal jobs program.