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I Affirm and Aver the Following is Poo

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The Long Game Against Organized Labor
The Captain's Prop
By now, everyone has heard about what is happening seemingly all at once in Wisconsin, Michigan and Ohio. Republican governors are trying to ram "emergency" legislation through their senates and houses that would strip the most robust union demographic, public employees, of their collective bargaining rights.

Here's a question: Why now?

I haven't seen this point raised by anyone, but I think it has everything -- and I mean everything -- to do with the baby boom generation.

First of all, let's consider the rise of the modern labor union. A friend noted that labor membership peaked in the 1950s; no, I can't find a link to confirm that, but will simply use that anecdotal data as a starting point, explaining why I think it plausible. Soldiers coming home from WWII found an ideal labor market. Many had lost their lives overseas, reducing the workforce at a time when the demand for labor was probably at its historic peak. The US, after all, had not suffered wartime devastation of its industrial infrastructure as had Europe and Japan; the need for US exports would drive industrial activity for decades.

Therefore, I doubt employers would have the ability to balk when a group of its workers decided to organize. There simply weren't enough workers to replace strikers with scabs and break nascent unions, at least not on a long-term basis.

This labor shortage, though, should have started to shift as the first of the baby boomers entered the workforce. The first of these birth spikes occurred in 1947 as the soldiers returned home. The first of these workers would enter the workforce market at 18; others would follow after a secondary education. Assuming a majority of those pursuing college would spend four years getting their degrees and would enter the market at 22, that first birth spike would start to dilute the labor market in 1969.

Earlier, I quoted Richard D. Wolff who noted that from "1820 to 1970, over every decades, average real wages rose, enabling a rising standard of consumption." I used to think that the biggest factor in that decline was, of course, the peak of the United States' petroleum production capacity. Now I'm not so sure. After all, peak is very difficult to mark as it happens; peaks tend to be marked not by a sudden plunge in production but by a subtle inability to increase lost production (as wells start to diminish, not run straight dry immediately). This bumpy plateau of production mostly lost and less found can last for years, and only be detected in hindsight when the yearly production numbers can be aggregated and averaged. Therefore, I doubt the US oil production peak would have been a large economic factor until 1973, when OPEC reduced its own production.

Just as it would have taken time to note the falling oil production numbers, it would have also taken time to note the increased demand for jobs. So though 1969 would have been the start, a gradual softening of the labor market might not have been noticed right away. Still, just about 1970, conservative forces rallied to thwart the growing of labor and the so-called counter-culture. I mentioned one of the most important voices earlier, Lewis Powell, author of the now-infamous strategy letter to the US Chamber of Commerce and now known as the Powell Memorandum. His was far from the only letter, though. Others thought along similar lines. Jonathon Chait clarifies what happened after these letters were circulated:

While these memos carried some influence, what really changed the disposition of business was an economic downturn. While conservatives began calling for business to do battle with its enemies in 1970 and 1971, few heeded the call until 1973. The year is significant because it represents the point at which the long postwar expansion ended. Corporate profits declined by a third between the mid-1960s and the mid-1970s. The growing economic strength of Japan, Germany, and other emerging industrial powers threatened manufacturers, which could no longer pass on higher labor costs to the consumer. One expression of of business's new vulnerability came in its dealings with organized labor. In 1965, 42, percent of companies immediately complied when their workers petitioned to unionize. In 1973, only 16 percent did so. Businesses did whatever they could to resist organized labor, and over the next decade, unions' complaints over unfair trade practices skyrocketed.

(Jonathan Chait, The Big Con, Houghton Mifflin, 2007, pp. 52-53.)

And as more boomers came of age, resisting the power of unions got easier and easier.

For further evidence, note the demographic layout of the US in 2000. Count back 30 years. Over 18 million people, 9 million men and an almost equal number of women, would have come of working age in 1970 (ages 20-24). The next pulse following five years later, aged 45-49 in 2000, would have been two million stronger than that; the next ten years would offer an additional two million in each five year period.

In this convergence of scarce fuel, the rise of industrial Europe and Japan, and an amazingly inflated pool of available workers, competition for jobs would be fierce. Homes no longer able to support a family on one income would contribute the wife's labor where they could, further diluting the bargaining power of individual workers. I lived most of my life through this sucky time.

But this suck time is about to end. Boomers are starting to retire. In the coming few years, that first pulse, the one that first diluted the job market in 1970, will no longer be working full time or (if they're lucky) at all. This is an exact reversal of fortunes suffered by organized labor 41 years ago, and if they can position themselves properly, the collective rights of workers could start to improve.

Which brings us back to Wisconsin, Michigan and Ohio. While individual employers may not have been closely noting graphs on Wikipedia, some have, probably those with the largest industries and, therefore, the largest to gain -- or lose -- should the labor market tighten.

These large employers have already garnered an amazing level of wealth, possibly not one seen in millennia. Really, the tax rate on the wealthiest is low enough to allow them an amazing war chest to spend at their whim. As I noted in Blinded, using just a portion of this wealth to sway public opinion and pass sweeping legislation would be in their best future financial interest, guaranteeing an enormous portion of their company's profits remains in their hands, and not in the hands of their employees.

Just when you thought it could get no worse, let me remind you that it is. That massive funding of right-wing think tanks in 1973 brought more than simply the purchase, consolidation and manipulation of our news media. Powell was adamant that money be spent in the colleges to sway rightward the direction of education. The most obvious target had to be, of course, business schools.

In a Planet Money episode, Adam Davidson and Chana Joffe-Walt talk to some bankers blowing off steam in a bar frequented by said bankers. They insisted that they would be making the enormous cash they currently earned because they were "smart." They had earned that money because they were better than the others that tried to get the jobs they held.

In essence, they had swallowed the nonsense pushed down their throats in business school, the theory that workers are paid "what they're worth." Anyone who has had the unenviable task of negotiating a wage knows this to be fallacious. Any wage is a negotiation between one who needs labor and one who needs work. If the job market is strong, the wages tend to be high; if the job market is weak, employers can reduce wage offerings and still get the jobs done. Take Wal-Mart as an example of what happens when the employer uses every trick in the book to keep worker wages low.

This reality is, though, absent from most business schools, institutions which have been dominated by neo-liberal economists who reject economists (like Keynes) not for the body of work the others have produced, but because the conclusions they draw are inconvenient. In Economics For the Rest of Us, Moshe Adler notes this phenomenon:

Why is the opposition to Keynes's theory so strong? Not because it was tested empirically and found wrong, but because of the conclusions that follow from the recognition that lower wages cannot eliminate unemployment. The first conclusion is that the free market system is not self-adjusting and that therefore the government should intervene and regulate the economy. The second conclusion is that the (Value of Marginal Product) theory of wages is wrong and, therefore, so is the claim that workers get paid what "they are worth." Economists therefore set out to develop theories to prove that wages are sticky in general, and that sticky wages caused the Great Depression.

(Moshe Adler, Economics For the Rest of Us: Debunking the Science That Makes Life Dismal, The New Press, 2010, p. 169, I emphasized.)

Let's take that emboldened bit and apply it to the current political crisis still unfolding. If "sticky wages caused the Great Depression" then lower wages will avert the coming economic crisis. Therefore, unions are bad, since they insist that their wages stay livable. Adler continues:

Arguably, the damage from the teaching of the economist's theory of wages is far greater than the damage from the teaching of creationism. Yet the theory of wages is part of economics education in any and all schools, and it continues without any notice or opposition. The reason is, of course, not hard to understand. While everyone is hurt when we teach religion and pretend it's science, not everyone is hurt when we teach economics. What workers lose, executives and capitalists gain; and it is the latter who study economics, hire economists, and endow schools.

The battle for a fair distribution of the product that we all produce together has so far been waged in the workplace and in the political arena. It must also be fought in the classroom, however, because it is there that the lie that "workers are paid what they deserve" is taught.

(Adler, ibid, p. 192.)

Whenever a media cheapened over the last 40 years by their owners relies not on expensive investigative journalists but on talking heads to elucidate a point about what effect unions have on the economy, chances are that they will grab a business school professor to bloviate. It turns out that over the same last 40 years another tenet of the Powell strategy has tainted business schools across the country with non-empirical stupidity that will undoubtedly be touted as fact.

Though all now seems sucky, the future is not completely bleak. I doubt the marketplace of jobs will remain completely soft -- that demographic pulse is simply too large to ignore. I doubt every strategy to break unions even before they form will succeed. I'm only saying here that, just as Rachel Maddow explained in the linked YouTube video at the top, there is a back story to this current swirling of right-wing law ramming, one that should inevitably rise to the public's awareness.

And even if you aren't considering a job with union benefits, let me tell you that these benefits do trickle down to the non-union shops. They have to, especially in a strong job market.

Many things could go wrong, of course. We as a nation desperately need to reduce our dependence on oil. Without this reduction, the Gas Ceiling will continue to keep all of our industries from expanding both their product market share and their hiring. If the videos are any indication, Japan's recent earthquake should affect that country's export capacity. Who knows what that effect that will have on available resources as they rebuild . . . or if they are able to do so fully.

I'm only saying that the back ground behind these power grabs reflects a threat to the corporate oligarchy pushing the agenda, a threat that could greatly benefit working folks in the immediate future.

X-posted to the_recession.

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Well done. You might think about submitting this to Reddit.

Go for it. It's public. I'm not even sure I would know how.

Really enjoyed reading this, appreciate the research you've put into it. But I'm wondering... hasn't our economy changed over such a long time? I mean, we were all about industry, where labor was once needed. But we aren't about industry so much, but services, healthcare. We have technology that has in many cases reduced or outright made obsolete many forms of labor that previously humans provided. I'm not certain labor - especially highly skilled/paid labor is something that is in increasing demand.

Surprisingly, we still make an awful lot of stuff through our manufacturing. It's not as strong as it was thanks to mechanization and off-shoring, but it's still there.

Still, one need not make things to join a union. I'm in one (Amalgamated Transit Union Local 587). Dad was once chief negotiator for his, a group of public school teachers. You could be in one. There are union shop hospitals. Heck, thanks to their laws in Germany, workers at Wal-Mart have union membership available to them.

The public unions like mine and Dad's are the target of these current Republican laws in Michigan and Wisconsin. Something about unions has always and will continue to piss off a certain subset of people, like the Koch brothers.

I am continually amazed by the apparently complete inability of the Economics profession to question its assumptions and Received Wisdom. And that anyone dares call it Science. And that it has any cred left at all!

This essay - very well done - only contributes to my increasing pessimism. The concentration of wealth and the takeover of edumacation seems to confer an overwhelming advantage to the Forces of Evil.

Yes, anyone who cites the Laffer Curve as anything but laughable should be sent to remedial training. Still, it appeals to those who don't like the empirical reality that high taxes on high earners make societies stronger, just as the Atkins diet allows fatty food when it promises weight loss.

I would wholeheartedly recommend the two books I cited, The Big Con and Economics for the Rest of Us to reinforce your increasing pessimism.

Great, just what I need. *eyeroll*

(I should point out, though, that the Atkins diet does have a valid basis; and the notion that fatty food makes you fat, does not. There are of course a lot of problems with the Atkins, as with any diet other than that recommended by Milo Bloom; but you can indeed lose weight while on a high-fat diet.)

You have a incredibly observant mind. I am glad to have made your acquaintance.

How observant I might be of course depends on whether or not I'm correct -- which remains to be seen -- but thank you!

"Observation" has nothing to do with "correctness". That's a phenomenological error.

I was using "observant" in terms of the completeness of my observations. Theoretically, I figure, get enough accurate observations and one might get more and more correct conclusions.

But hey, you know me, all fast and loose with those darned definitions.

What would it mean to have a "complete" observation?

I doubt one can have one, what with our limited cognition and sensory perceptions. I instead refer to getting as complete an observation as I possibly can. It's all relative.

I try as best as I can to treat these little rants like I treated nautical navigation: I gather as much information as I see important, then make a decision. If I hit the rocks or the sand, I goofed.

In other words, it's all about the fundamentals, and trying not to let them bite you in the fundament.

I'm not an economic expert, but your argument makes a lot of sense to me.

Here's another, much simpler argument though that I would like to get your opinion on: what if, on our long and recently greatly accelerating slide towards fascism, we've simply reached the point where the balance of power has shifted sufficiently towards the plutocracy that it now feels save for them to try to deliver the knockout punch to democracy?

It seems like more than a coincidence for me that they would start implementing the Endlösung for democracy right after Citizens United.

A friend and I were discussing just this tonight. I argued that it seemed too soon. Even with Citizens United, the public doesn't appear to support them. Wisconsin, for example, seems to be backfiring given the current recall petitions. It's too soon to tell with Michigan.

I argued that if these forces spent a few more years consolidating public opinion against unions before making the pusche, they might face less resistance. The fact that they're moving now all at once reflects (to me) the dire timing; too many current employees are set to retire, and too few are waiting to fill those jobs, for the wages to stay so historically low.

I'd argue rather that the GOP thinks it has already achieved as much public opinion as it needs. They are convinced the midterm elections were a refudiation of the Democratic Party, and are now setting about the business of permanently crippling that party. Karl Rove's old dream of a "permanent Republican majority" looks achievable to them right now. CU and WI are the twin keys to that: provide GOP access to the incredible wealth amassed by the Corporadoes, AND deny Dems support from the organized working class. And somehow they have managed to get "budget crisis" on the lips of millions who never cared a whit about such things... Why wait? They have surely noticed the increasingly fickle nature of the electorate. Carpe Diem!

If this were really about the question of whether the public good is best served by public-employee unions, I think they would have done as you suggest - worked a little longer to mobilize public opinion, so the de-unionization would not only hold up to legal challenge but spread across the country. Instead they seem to have been in a big hurry to get it done by any means at all. And the GOP doesn't care if there are too few new workers to replace public-sector retirees, since one of their goals is to shed as many of those as possible anyway. No, I think this can only be seen as a pure, naked power-play to cement the GOP grip on WI.

I can't imagine they'd be much concerned about the recall petitions; with their war-chest in place, and having now sabotaged the opposition's funding and support mechanisms, they have to feel confident they can withstand any such attempts.

I really don't see any idealism or planning beyond the simple goal of party politics: getting GOP candidates elected. Nothing else matters.

You might see Klein's 'shock doctrine'.

I picked up No Logo a bit ago, but didn't bother to finish it. Is Shock Doctrine better?

Different topics, similar rhetorical style - both more polemic than research. However, her shock doctrine thesis is fairly congruent with what you're posting about here.

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