How do you determine the value of work? Perhaps “the market” works pretty well at the top but I don’t think it does so well at the bottom. It is my understanding that the broad middle class that was built in this country in the 20th century was based on the unionized labor in the area of manufacturing and some services. What makes someone doing a very repetitive task on an assembly line more valuable than someone working in Walmart? There is nothing inherent in either of these activities that make one of them more valuable than the other. The difference is simple, it is economic power in the form of an organization.
Now comes globalization and the manufacturing worker’s job can be done by someone in another part of the world who will work for a lot less. We should of course continue to maintain whatever manufacturing where we can and a lot of other things in technology. The information people here are still doing great. But the income disparity in this country is growing and the question is where is one going to look for a way to rebuild the middle class. If you try to do it in manufacturing only, then, in most industries, the employees will not be able to receive any more (or not much more) than their counterparts in the developing world. It seems to me that we should look to the service workers. In particular, the ones who cannot be “outsourced”. The work these people do, would receive as much respect as those union workers did in the 50’s and 60’s if they had the power to get their share. Then those jobs would be just as desirable as the manufacturing jobs of an earlier era were. (Obviously the auto workers, like a lot of other people, went crazy later. Even there, though, it was the people in charge who hold the primary part of the responsibility.) That is why I favor the unionization of service workers in general and Walmart in particular.
When I say that I favor that result I, of course, mean that I accept the consequences. Only foolish liberals and small children would expect that the increased employee costs that would follow unionization of the employees would come from the profits of their employers. (I am quite confident that the 140 billion that the big boys got in bonuses alone last year will not be available for raises for any wage earners anywhere.) Of course, all of us would have to pay more for the stuff we buy from Walmart and elsewhere. I think that it would be worth it to help maintain the broad middle class that I think is necessary for the maintenance of our society.
I do not think that the country can sustain itself as a free society with a lot of very comfortable people (including the rich) on one hand and a broad collection of desperate poor on the other.
If the people who work hard for a living can’t make a life, then we have lost America.
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Monday, November 8, 2010
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Very interesting idea. A couple of problems to consider:
ReplyDelete1) Are Walmart workers really in poverty?
Comment: I have family members who are deadbeats living off of one person's salary of 25k a year. And yet they still somehow buy pizza, cigarettes, cell phones, and cable television. Maybe our definition of the middle class is actually quite wealthy compared to the rest of the world.
2) Would people really shop at Walmart if the prices were high?
Comment: Walmart sells products with marginal quality at low prices. If you raise prices you put them out of business. The low prices are the attraction and not our desire to help out the poor cashiere or stocker. The Mom and Pop stores are nearly extinct despite our nastalgic desire to keep them around even though their prices were not competitive.
Finally, the unions are shooting themselves in the foot and will eventually kill the hand that feeds them.
Wal-Mart employees are not victims! There are many individuals that have a nice retirement and a nice nest egg saved from working years in a job that paid well. But, those people worked hard to get an advanced education or learn a critical trade so they could enjoy a good life and a good retirement.
ReplyDeleteNow, speaking in broad terms and realizing that there are exceptions, what efforts has the average applicant at Wal-Mart made to better his/her position in life. I am betting it is far less than the effort made by the successful people of the world.
I find it curious that many feel the need to be generous to those who did not make the necessary effort to advance to a higher position in life by working hard. I find it even more curious that many successful individuals feel guilty about being successful and can assuage there conscious by being generous with someone else’s money.
One last parting shot at unions. When employees band together to further their cause we call it a union. When businesses band together to further their cause we call it a civil conspiracy.
If a surgeon makes a cut on my body and a mechanic changes my tire I would argue that there is indeed a difference in “inherent value” for those 2 services even if they both take the same amount of time and effort. As for a repetitive job on an assembly line being worth more that working at Wal-Mart it probably never was. The union distorted the value of the task and yes you can say that management should have never agreed to those terms, but you can shift the blame to the employer only if you ignore the huge “hammer” of collective bargaining.
ReplyDeleteYou can also add in the 80 year love affair that the American people had with the automobile. We would pay any price, including the over inflated labor prices of the autoworkers. It worked until, to borrow from another post on this blog, the rest of the world caught up.
The auto workers' union made their own bed and I am happy to let them sleep in it. Was what happened to the auto workers foreseeable? Absolutely, just look at what happened to the steel industry in the US.
Tom at 502 PM
ReplyDeleteI am not arguing that a person working at a low skill job be paid at the same rate as someone who is working at a job that requires either high skills (with or without long training periods) or high risk jobs. I am arguing that people who work hard are entitled to a wage that will provide for a decent life.
I can't deal with the psychobabble about people's guilt and how they deal with it.
On the parting shot about unions I thought that when businesses banded together they called it the Chamber of Commerce.
The fact that unrestrained union power will lead to bad things is just as certainly true as is the fact that unregulated business power will lead to bad things.
ReplyDeleteIn neither case am I willing to dump the good things provided by that entity because I am unwilling to restrain their excesses.
Are you opposed to unions in principle?
Well Wayne, I don't hear you feeling sorry for the "poor" people at Walmart, calling them impoverished of victims. What I hear you making is a political/sociological/economic point, i.e. that any country with a huge gap between rich and poor--and no middle class in between is an unhealthy country. I wonder to what extent our current political polarization is a reflection (to some degree) of the economic polarization. The middle class is supposed to serve as a buffer (psychological, political??) between the two extreme. I wish that someone would explain why it is OK to not have a viable middle class? If a middle class is a good thing and unions are not the way to create one, then how do we do it? Or is Tom opposed to a middle class in principle?
ReplyDeleteThere's been some great conversation on this topic, I guess I'm late to the party. Anyway, here goes...
ReplyDeleteMy job as a math professor at a state university provides two degrees of separation from the financial realities of the free market: I'm in the Ivory Tower, and I "make my livin' off other people's taxes" (as Steve Miller would put it). So I really have no idea what I'm talking about, as I am about to demonstrate. :-)
Broadly, Wayne's question pertains to the age-old labor vs. management thing, right? It seems to me like this is something of a game-theoretic problem. Historically one might see labor and management locked in a sort of oscillatory power struggle: robber-barons abuse labor, labor reform leads to unions who eventually abuse their power and ultimately hurt business, de-regulation and global trade agreements undercut the power of unions, reckless and overconfident management contributes to an economic meltdown, etc etc etc.
In game theory, sometimes games converge toward optimal solutions, sometimes they continue in an infinitely oscillating pattern, and sometimes (counterintuitively) they drive all players to the least optimal outcome. So what kind of game are labor and management engaged in? Ideally, I'd like for them to figure that out for themselves in the arena of free enterprise. That might work in the following way: If a union is bad for business, then those businesses won't survive, and if a labor force invigorated by responsible union representation is better for business, then those businesses will thrive, etc.
So if what we have is a harmless oscillation where labor is "out" only for right now due to its own excesses… Well, OK then, I can be with David about letting them eat cake or with Tom that they made their bed so they can sleep in it. But what if, with no intervention, rational play on the part of labor and management is driving us toward the least optimal outcome? Or, what if it's hard to tell where things are going? If, in addition, the country has a large stake in the outcome of this game, then it seems we have a potentially serious problem. This is sort of what I see Wayne and KW speaking to. The stakes here could be pretty high: the erosion of the middle class may be becoming something permanent and destabilizing as a consequence of the game. If, as Wayne worries, we might "lose America," then the threat is existential.
I have to say that I'm on the side of those who are concerned that something permanent and destabilizing is happening in this game. I'm not sure why I feel that way, I'd really like to hear more from other yellowarmadillos about this. And I'm not sure what's to be done.
But, coming back to the topic of Wayne's post about Walmart… I am alarmed enough right now that I think I favor a move toward unionization of Walmart employees. And what if Walmart pushes back hard against such a movement? I suppose I might support government intervention to "bargain" on behalf of Walmart employees, maybe (for example) in the form of legislation that would effectively require Walmart to provide a "Cadillac health-care plan." (I have no idea what that is, but Cadillac is a GM brand and GM had unions that apparently nearly wrecked the company, so the health-care plan must have been pretty good. :-)
Wayne at 7:20 – To be opposed to unions in principle would be to ignore history. Unions were instrumental in getting some important changes in the work place such as safe (or safer) work places, 8 hour work days, 5 day work weeks, increased wages, and much more. I have a lot of respect for the good things unions have done and can do.
ReplyDeleteKW at 8:44 – I think most, if not all, of those responding to this post believe that a strong middle class is desirable and perhaps essential. I include myself in that group. If my lack of enthusiasm for the proposed solution under discussion here has lead anyone to believe otherwise, please accept this clarification.
Rob just upped the ante in this discussion by introducing the possibility of government “bargaining” intervention on behalf of Wal-Mart employees. Would government involvement be essential, non essential, a deal killer – what?
ReplyDeleteHmm. Good question Tom, I've been thinking about it off and on for a few days.
ReplyDeleteI don't think government involvement is essential at this point. In part this is because I'm not sure if I should be so worried about where things are in the labor/management game that's going on, at Walmart in particular and with the service industry in general. And in part this is because it does seem like government intervention is best left as a last resort in these kinds of conflicts. Maybe government involvement would end up being a deal-killer rather than a deal-maker, I really don't know. Still, I have to say that my immediate, gut reaction to hearing news reports about some lawmakers discussing some possible ways to force Walmart's hand in providing more benefits to employees has been: Good.
Whether it is true that wages are depressed right now, that labor is being exploited, that the increasing income gap is problematic, whether the economic changes that are happening present us with an existential threat... I certainly don't know. But it does feel that we're creeping inexorably in that direction, if we aren't there already.
Are we there?
Apropos (I think) of the subject of this post... I read recently a famous line uttered by utility baron Samuel Insull: "My experience is that the greatest aid to the efficiency of labor is a long line of men waiting at the gate."
ReplyDelete