BigBen

Are you stating that to move production to a different location is free? There are setup costs, transportation costs, duties/tarriffs that you have mentioned already, lease costs, all of these things come with an explicit price.

The difference is that this new price bundle is STILL CHEAPER than continuing to pay 1st world wages... There is no such thing as a free lunch.

And there are costs to moving your labour to another location (haven't we all moved for a new job at one point or another?) but your proposition that labour is fixed to one locale is flawed. People move, and some of them move internationally, for work. The social costs of leaving friends and family behind is steep, but economics teaches us that a rational person has a wage rate such that they would be willing to move. There is a price, for example, that I would be willing to go to Iraq and drive a delivery truck full of explosives. To say that "Everyone has a price" is jaded and not the point; I said a RATIONAL person has a price. People do not act rationally sometimes.

The invisible hand, you were wondering? Well, Adam Smith would probably say (and I hate to put words in his mouth) that the hand was quite busy in this regard:

The wages in the home country "Pushed" the capital into a 3rd world setting;
The Rent in the 3rd world setting "Pulled" production to set up in that location;
The Capital did not care where it went, and therefore being simultaneously pushed and pulled in the same direction, landed in 3rd world.

Oooooooh, I get turned on when I talk about invisible hands, land, labour and capital...

All together now: Economics is the coolest subject in the world!

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martinguerre

What does free exit mean for a corporation? It can cease to exist, pretty much on a whim, if it cannot be profitable anymore.

What does it mean for a employee? They can leave, provided they have another source of income. In a bad job market, there is no "free" exit, in that employees do not have the power to protest bad conditions in their job bceucase they will not be able to find a new one. It's not that complex...market freedom means something very different for the corporat actor than for labor.

without meaningful free exit, the equation is tilted in favor of the employer, and sharply.

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streak_56

Around work, I am famous for this quote "I use to hate the Union till I figured out that I was going to get more money."

Other than protecting my job and getting more money for myself. Wouldn't that be greed?

smooth

Your view of the constraints on capital movement versus labor movement are distorted.

When I use the term free, I am referring to ability, not cost.
Corporations have much more freedom to move laterally than labor does or consumers can and this is a direct result of their influence over the laws that govern such behavior.

It does not suffice to simply say that "some" people move internationally.
Movement of both labor and capital does not exist in a vacuum, they are bounded by law. I don't see you accounting for the influences powerful entities, such as capitalists and corporations, have over the movement of labor and ability to consume. I think you are giving a very superficial view of one's ability to follow capital from one nation to another--regardless of personal and social considerations.

I do not agree with your assesment of Adam Smith's position on this. I believe he would agree with me and that the "invisible hand," in so far as it exists, can only do so when labor and consumers can move laterally as easily as capital can. The legal and political domains have corrupted the regulations that economists argue exists naturally to control capitalism.

In the few posts you've responded to me on this subject, you've consistently not acknowledged my point in this regard. I remain curious why economists purport to follow the tenets of Adam Smith, yet violate one of his basic premises that labor and capital must be equally unfettered in their ability to follow one another.

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BigBen

I will have to disagree on every point you make in the above post. You have now wandered into the realm of Political Studies, of which I am no expert. You claim that corporations prevent labour from moving by enacting laws and pressuring the government.

I cannot comment on laws that government makes in the US, as I am almost completely ignorant to your labour laws. I can tell you that there is a section in the Canadian Charter of Rights and Freedoms that explicitly states that there shall be no laws preventing the free movement of people and commerce within the country. Provinces are not allowed to discriminate.

Internationally, commerce is very mobile, and labour does indeed move from one location to another. My "Superficial View" on the subject is purposeful: I am keeping the discussion focused around economic factors and not political or ethical points of view.

Although we may agree to disagree, I appreciate the complexity of the issue. I do not pretend to know all facets af every issue, and on a personal level I find politics very frustrating.

Are there other questions you have? I think I might start an Economics thread in Tilted Knowledge. I haven't searched for it, but you never know...

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TM875

The funny thing about American Economics is that they teach that labor is a fixed input (I never really understood that concept, even through grad school). I think that it's based on the concept that, even though a few can move internationally, a majority of the labor force is incapable of leaving the nation (even if the cost-benefit is greatly to their advantage). Capital, however, is extremely mobile due to the cheapness of moving it. It's much less expensive to ship a machine to Brazil than to move there yourself.


Or something like that.
I was never really into the labor thing myself, I mainly studied econometrics and development. You know, the cool stuff :grin:

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smooth

My opinion of your post is that you haven't disagreed with everything I wrote. You have, however, utilized carefully selected wording to answer portions of my comments while simultaneously ignoring others. I just don't know if you did so intentionally.

For example, you used examples of Canadian protections for workers in regards to intra-national movement. Yet, those protections do not extend to their actions in so far as they might operate outside the bounds of the Canadian nation-state. I, as a US citizen, am not free to move into Canada and start working at will. You are not free, as a Canadian citizen, to move into the US and start working at will. If cost/benefit was the issue, that would approximate a more free market than what we have now. Cost is not the issue, however; rather, legal constraints are.

Furthermore, the Canadian protections for workers to move intra-nationally does nothing for an external consumer--the other end of the spectrum in my example of how capital controls the market rather than unseen forces. We could examine, for instance, the highly publicized debate over prescription medications. U.S. consumers are currently prevented from legally purchasing medications from Canada (and Mexico, among other places). Tariffs and favorable special trade agreements are not natural functions of the market. They are functions of government, guided by politics.


I actually had a detailed description of the two main views of how government responds to capital, but I erased it due to the fear that it would take too long to read and start looking like I was pontificating on something not really germaine to the discussion. At this point, however, I think I should at least respond to the view you ascribed to me in your comments.

I do not necessarily think that capital makes laws and overt demands on the government to regulate labor/consumption. Actually, I should say that it doesn't have to happen that way. An alternate view is that the people who run governments share similar class positions and interests as those who run capital. Their views on how the world, and the market, should operate are pretty similar. In the states, they go to the same schools together, they move laterally from economic domains to political domains to military domains, and they hold social functions together to rub elbows with the right people. The point is that there need not be an overt demand on politics for law to protect the interests of capital--we would expect it to naturally.


All this is to say that when people argue unions are artificial constraints or pressures on the market, such a statement completely ignores the political/legal realities that our labor market is no where near approximating a freely operating beast in the ways that Adam Smith wrote about. I reference Smith again because free-market proponents, in the US at least, speak of his work as their bible, yet they ignore the other half of the equation he laid out--free mobility of labor.

When a GM factory shuts it's doors in Michigan, due to overpriced labor or low sales or to bust a striking community, and opens a factory in Mexico, the community in Michigan should be able to move to Mexico and seek access to the employment in the newly opening factory. As of right now, they can't even while I admit that some won't. It simply makes sense then to attempt to unionize the workers in Mexico. In so far as it violates principles of a free market, it should only be understood as a response to capital's control over the market as it currently exists.

The "invisible hand," in the context I have described, becomes capital's influence over the laws that govern the market--not natural forces.

If economic models are incapable, or refuse, to account for the socio-legal realities on our global market, then I claim the models are deficient. If you want to step back and state that you have limited knowledge on politics and international labor laws, how can you then adequately discuss the ramifications, dangers, benefits, & etc. of unionized labor?

If your models are inadequate to account for some of the issues I brought up, and the data you feed into them inadquately addresses the context it exists within, then the addage 'garbage in >> garbage out' applies.


We could agree to disagree, but I don't see that as particularly profitable. We can move on to a different subject, if you prefer. But we can also spend our time here on this topic as easily as any other. We could, for example, pool our knowledge, yours in economics and mine in law & society, and begin a multi-disciplinary discussion of the issue at hand. Perhaps then we will come up with a trans-disciplinary question we can probe--one that breaks through discursive layers and opens new fields of inquiry.

Otherwise I have to continue learning what Marx and Weber say about politics and law with little to no knowledge of how economies operate.
You have to continue learning what Marx and Weber say about economies with little to no knowledge of how politics and law intersect with economies.
I think that's tragic because I know both of them studied all of these subjects holistically, yet modern students are short-changed in their ability to do the same.

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BigBen

When discussing the immobility of labour in the car manufacturer sense, I think that is what is called "Frictionally Unemployed" meaning that although you lost your job due to market factors, you need not worry since your skill set is highly sought after and you will soon find another job. "Structurally Unemployed" is the term of endearment given to those who lack the skill set necessary to gain employment. We used the example of the Buggy driver circa 1910-1920. Horses were being phased out by technology, and the buggy drivers needed to compensate. How many Ferriers do you know today? Me, I know three, but I am a little nuts.

Well, I had to study Marx and Weber "Pronounced 'Vay-ber' for extra credit in class" but haven't brushed the dust off of them in quite a while I admit.

In the long-run, labour is mobile.





In the long-run, We will all be dead.

I can go to the US and work. I have the necessary skill set that the US economy is looking for. I get a work Visa, move down there, and voila! I'm working. There is no Iron Curtain, no Berlin Wall. Are we talking about the same thing? People make the choice to not move. Economics can study that choice. In the microeconomic context, maybe labour is fixed or frictional; in the macroeconomic sense it rarely is. As one of the three main factors of production, labour is often held constant to simplify the capital usage / production function. Lazy? Sort of. True? Rarely.

I think you and I ARE saying the same thing. I also think that people ignore realities. I believe that the beast is pretty close to what ol' man Smith was talking about.

Labour is free to move. From one job to another within an industry, from one industry to another within the same skill set, and from one physical location to another, whether that be domestically or internationally.

I am not saying it is easy or universal, but there is mobility. Noone is a prisoner to their location, their work or thier industry.

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smooth

BigBen, this statement is not true.
You already admitted that you are not well versed in international politics or law. Why are you disputing labor law with a law & society scholar who is telling you that your view on regulations that constrain international labor movement is inaccurate?

Labor is not free to move. It is artificially constrained. You mention that you can obtain a VISA. Do you believe the process is automatic?
If I seek a VISA right now to come teach in Canada, am I guaranteed entry into your country?

The truth is I am not.
I must obtain a work VISA in order to work there, but I am not guaranteed a work VISA from your or any other country.

Labor movement is regulated in ways that capital movement is not.

__________________
"The theory of a free press is that truth will emerge from free discussion, not that it will be presented perfectly and instantly in any one account." -- Walter Lippmann

"You measure democracy by the freedom it gives its dissidents, not the freedom it gives its assimilated conformists." -- Abbie Hoffman

BigBen

You mean my putting those words in a bigger font and italicising it did not convince you?

Shit.

I am going to have to come up with a better argument.

By the way, labour is free to move.

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Cynthetiq

Welll, this morning the TWU and it's members decided to strike basically screwing 7million transit riders here in NYC along with of course the tourists here for the holidays. Since the Taylor law was enacted public officals cannot strike, but they did.

I have to walk 3 miles to work today.

I hope that Pataki decides to do what Reagan did when the ATC went on strike and fire them all.

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smooth

What are their issues?
What are the counter-proposals?

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Cynthetiq

from the blog:
twulocal100 blog

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redsfan11

Both corporations and unions are attempts to alter the free market. Corporations (at least large ones) exert their will in the marketplace in order to drive higher profits. Wall-mart does a particularly good job of this -- much more so with suppliers than with labor. Unions do the same by restricting the labor pool to drive higher wages and benefits. I would argue that most professional organizations (AMA for doctors, ABA for lawyers) perform the same function as unions.

There is definately a balancing act. When corporations -- in the pursuit of profit -- create a more efficient market (as Wal-mart has through aggressive use of technology to streamline their supply chain), the perform a public service. When corporation -- in the pursuit of profit -- restrict the free market they perform a disservice.

Likewise, when unions act as a counterbalance to corporate excess, they perform a public service. When they act in their own self-interest they do not.

I have worked in both unions and management. I am more abused by corporations in management roles than I ever was as a laborer. Corporations are just very good at sucking every last drop of energy from their raw materials. It is up to us to put limits on what we give for the wages we get.

edwhit

I think Unions have a place and can be very benificial, but like all good things, can and are often abused.

Those people helped by unions appreciate them. Those screwed by unions hate them.

ShaniFaye

Im betting there are a lot of people in NYC right now not to happy with the transit union

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Ustwo

This is why unions suck these days. Its not about the job so much as job security to members reguardless of merit. They are saying they will take LESS money if they get in trouble less often when they fuck up.

I think everyone should have the right to strike but eployers should have the right to fire you. If your job is so unskilled that it can be replaced by scabs, the union has no purpose.

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flstf

Why is it such a bad thing when workers organize in an effort to gain some job security when many executives have insulated themselves from market conditions by giving themselves golden parachutes, etc..

Of course, once again two wrongs don't make a right, but Isn't it ironic that many captains of industry preach free market and capitalism while at the same time protecting themselves from both (regardless of merit).

I will agree that in recent years it seems like unions have gone overboard but they are probably just pikers compared to our corporate and political leaders.

Ustwo

Only a very very small minority of 'executives' are of the golden parachute class. Most are slobs who work 40+ hour weeks, have their 401k, and don't get overtime. A few overpayed execs are not a drag on the economy or efficiency, but unions sadly have become so. They are still needed but not in their current form.

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smooth

It makes sense to me to trade less pay for less porformance...isn't that what pay rates are all about (performance)? So I'm not sure why you would object to someone saying: we'll take less pay if we can perform less optimally.

Without the empirical data in front of us, it's pure speculation about the number of execs with golden parachutes, or the extent of "drag" they exert on the economy and vice versa with the union members. While it could be either or both harming the economy or efficiency, but your comments seems to stem from how you feel about unions in general rather than any actual evidence for your claims that most execs are over-worked and underpaid laborers. If that's true, and both the workers and execs are over-worked and underpaid, then where is the money going? To the stockholders (and not likely to be you and me who probably own a fingernail scraping of miscrosoft, etc.)?

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Marvelous Marv

I'd love to see if a legal action against the union could be instituted by all of the people who were adversely affected. People who missed work, stores and other businesses who had to close, that sort of thing.

I don't believe anyone would say (at least with a straight face) that this strike wasn't intended to harm the people mentioned above, and if what Cynthetique said about the strike's legality is accurate, a strong case could be made.

(...Waiting for someone to say that suing corporations is good, but suing unions is bad. I can't tell the difference between the two anymore.)

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Marvelous Marv

I would be interested to see that argument, since those organizations don't set wages, hours, or pension benefits, nor do they boycott or call strikes. Well, maybe they ENCOURAGE some boycotts, but they sure as hell can't require closed shops.

The most I've seen them do in that regard is pay lobbyists, and argue against whatever harebrained scheme Congress has recently come up with.

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Marvelous Marv

Was anything said anywhere about LESS pay, at least among those presently employed? They were negotiating the amount of proposed raises.

And a much more realistic approach (which is common in the workplace) would be less hours for less time on the job. It's hard to think of a business that would agree to have their employees do a crappy job.

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DonovanDuVal

Where I work the management will only talk pay reviews if the union has more than 45% of the staff. There biggest struggle is to get people to realise that to be represented by a union takes involvement. Sometimes people get annoyed that non-union members get a 'free ride,' because the pay deal has to apply to them as well. But I realise that unions have to fight for all workers, not just the members. Given that our union isn't a strongarming organisation, I think that they do a lot of good work. Unions have had to adapt, as many of the bigger battles have been fought and won (or at least compromised on.) I think that it may be cyclic, and it's always the few, either in management or corrupt union officials that ruin the thing. When things get bad the unions tend to get an increase in members, so while they may be less necessary today, who knows what tomorrow will bring?

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Cynthetiq

A brooklyn Supreme Court Judge had authorized an injunction last week stipulating possible fines. He found the Union in contempt and is levying a $1million/day fine which is supposed to double each day that workers are on strike.

One construction worker was quoted with saying he couldn't make it to the job site and was replaced by someone who could 4 days before Christmas.

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Ustwo

This is partially true but mostly false. In a handful of states the local AMA/ADA etc works for protectionism by making it hard for out of state practitioners to get a license there. Florida, Arizona come to mind. Hawaii and CA just recently changed to be open. That is very union like.

Also they will lobby at the state and federal level to an extent, but their strength is pretty weak and there is no real push to have its members vote any direction. Also you don't need to be a member of the AMA/ADA to be a doctor, and there are no laws or rules that prevent you from working if you are a non AMA member.

Also price fixing is illegal for the work we do. It is not legal for a group of doctors in an area got together and say 'We will charge no less than X for this procedure'. I'm not sure what law it is, but I was warned many times about it. Like all laws, in some places this may be broken, but in my area its very well followed and I'm not aware of the pricing of most of my competitors.

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kutulu

f the TA, those wage increases hardly keep up with cost of living indicies.

Ustwo

Is hardly keep up the same as saying they keep up?

If they keep up your issue is?

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Cynthetiq

That's the kind of raise that I'm lucky to get. They pay nothing for their healthcare and want to retire at 50/55???? WTF is that? I'm not going to be able to retire at that age at all.

I can be fired at will. They have to go through hearings and lots of steps before you are fired which could take up to 4-5 years from some stories I remember, sometimes you don't even get to fire the person and they get to sail into good pension plans.

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kutulu

The issue is that a good employee deserves to make more each year. It's not a raise if you just get a cost of living increase. Sure you might make more on paper but your buying power hasn't changed.

My previous employer pulled that shit last year. They gave us our annual raise and cost of living adjustment and none of us even got what the cost of living increase was. They tried to rationalize it by saying that the business had a bad year but we all knew it was BS, especially since the source testing part had it's best year ever.

In the next year the business (consisting of 12 people, including the owner and his wife) lost 6 of its employees and at least 2 were looking for new jobs when I left.

Cynthetiq

Why not? I work quite hard each year, and I'm very lucky to get a 3% raise. Even when I was in management I had to jugle .25% taken from a couple persons to give someone else a 3.5% raise.

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kutulu

If you are happy with what you are getting then fine. I wasn't. I knew I was paid less then the industry norm and that their 'merit raises' weren't even covering cost of living increases. I left them and found a job doing the same thing for 25% more money and better benefits.

sixate

The conversations going on here are quite interesting. It actually mirrors many conversations I have with the guys I work with. Lets get some perspective here, and I'll use where I work as an example.... I work with about 90 other guys. My company is union, we have pretty good benefits, and I make a pretty good paycheck. Our contract was up this past September, and many guys cried that we didn't get a big enough raise... Considering the amount of money my company has made over the past couple of years I agreed with that so I voted my contract down. If everyone else really felt they deserved more wouldn't they have voted no? Only 7 guys voted no. After the vote all the same guys who cried they weren't making enough money said they had no choice because they have a family.... Maybe a good reason, but I think it's a lame excuse. The real reason they voted yes is because all the other guys who voted yes are really bad at managing their money. They blow their cash on dope, booze, cigarettes, $400 cell phones, motorcycles, 4 wheelers, boats, and the list can go on . If your family was that important you wouldn't drop those habits and expensive hobby's so your wife and kids can have more things and, more importantly, financial security with a savings account? Nearly everyone I work with lives pay to pay. How is it that I don't live like that and we work at the exact same place? I manage my money better, period. It's not necessarily how much you make.... It's what you do with your money that really matters, so make it count and quit blaming everyone else for your problems. And trust me, I'm not perfect. I got myself in a bit a debt, but I blamed myself, took responsibility for my actions, changed my lifestyle, and now I'm about 100x better off than I ever was before. If I can make the change than anyone can.

smooth

You quoted me, but I was responding to ustwo's statement.

I can't believe I have to explain this to you, I can only imagine that you're purposely being argumentative because of whatever opposition you have toward my political orientation.
Workers take home less money when they work less hours, businesses don't pay a worker a lower payscale when they work less hours. Businesses pay workers a lower or higher payscale depending on how good a job they do. In fact, the general right-winger responses to threads regarding minimum wage, living wages, "appropriate" compensation, & etc. is always that employees ought to increase their productivity (not hours worked, but quality of work) and bring more value to the workplace in order to earn a higher hourly wage.

That's the response, but when I repeat it in this thread, in support of a unionized worker to demand more money for better service or trade a lower demand for crappier service, then all of a sudden I'm talking alien-speak. you no comprendy anymo. So I guess that argument is just made for expediency, not that you actually believe people earn what they deserve. High pay == good service/difficult job/education; low pay== shitty service/easy job/skillless...at least, that's the general argument from conservative members on this board and often elsewhere.


So maybe you and ustwo can explain why in this particular case agreeing to a lower payscale (or not as high of a raise, if you prefer) in exchange for less quality work chaffs you so much. That seems to be the MO of employers and employee relationships when deciding on raises--how good a job did you/are you doing (NOT how many hours did you work this week, as you suggested).

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"You measure democracy by the freedom it gives its dissidents, not the freedom it gives its assimilated conformists." -- Abbie Hoffman

martinguerre

without commentary on the issue of unions, it's interesting to see this statement without larger commentary.

if this is, on average, true for most workers, we're looking very quickly at the age of american decline. if our inflation rate is outstripping our wage gains, that has to indicate a negative change in productivity per worker.

think of it this way. if you made the company $100 per day last year, and this year that same amount of goods is worth $105, your pay should go up five percent, right?

but if instead, you only get a three percent raise, you are in fact less productive this year than last.

unless, that's all bullshit because what's really happening is that your company is screwing you for the difference by letting your wages stay the same while they take in more money from inflated prices.

you know...just two possibilities.

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Ustwo

What they are saying is we will take slightly less of a raise if we can be disciplined less. Having worked around union shops in my youth, this has nothing to do with lowering job skills, and everything to do with job security for inept union members.

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Cynthetiq

actually no, my company is a public company.

I am allowed to purchase stock to share in the profits that the company generates. I just have to divert some money towards it. My wife even gets a 15% discount from the quarterly average price on all purchases for her company stock.

Other people choose to buy new cellphones, Air Jordan sneakers, Tommy Hilfiger shirts, and 18" shiny rims.

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pan6467

Unions with the right leadership are very beneficial and keep workers recieving good pay and benefits.

A union will show that there is retribution for a company's actions.

However, under poor management, they become top heavy and the greed of the few begins to weigh more on the good of the many.

Both my grandfathers literally risked their lives to get unions in where they worked. And it helped them get paid better, gave them better benefits and safer working conditions.

Those are the good points.

The bad is that seniority allows laziness and hassles in order to fire those who abuse the system.

Unions, like government and industry, need to streamline, return to the sole purpose of protecting the worker, and cut the pork. If someone doesn't do the job, then the union needs to reprimand him and show that their loyalty is to getting the job done at a cost beneficial to both labor and corporation, while protecting the worker..... not protecting the worker and allowing the system to be so abused that the job costs far more than it needs to.

I grew up in a GM plant town, the stories of people who would go in work 15 minutes and then fall asleep holding a broom, or leave and not clock out, and so on because they had senoirity and were protected by the union ran rampant. Those are the things unions need to clamp down on and show companies and the public that those abuses will not be tolerated.

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I just love people who use the excuse "I use/do this because I LOVE the feeling/joy/happiness it brings me" and expect you to be ok with that as you watch them destroy their life blindly following. My response is, "I like to put forks in an eletrical socket, just LOVE that feeling, can't ever get enough of it, so will you let me put this copper fork in that electric socket?"

Frowning Budah

Shani Faye, you are certainly right Unions have their flaws, but so does Corporate America. If either is given too much power things get out of hand.

I have worked in negotiations for both Unions and Management. Ideally they should both be working for the same thing. For if they are both doing what they are designed to do then everyone benefits. That is, both should bring a unique perspective to the table and examine the issues and reach an intelligent compromise.

The problems come when one side or the other takes it personally and refuses to compromise.

bloodychill

I like unions because they allow unrepresented people to join together and bargain for better pay and benefits, but then again, some unions are bad because they are made up of criminals.