Category: Unions

35% of Americans Meet The Criteria To Be Middle Class.

The Daily Escape:

Stoney Brook Grist Mill, Brewster, MA – February 2024 photo by Michael Kerouac

Wrongo and Ms. Right spent Sunday with one of our daughters and son-in-law. We spoke about the Ezra Klein op-ed in the NYT about why Biden should step aside. One of Klein’s points is that in presidential campaigns, the candidate is always the campaign’s biggest asset, and that Biden isn’t being used by Democrats as if he is their biggest asset.

Elsewhere, some pundits are saying that the Democrats need to forget campaigning on policy: Dems always try to find things people like and tell them they’re going to help them — and after that, show them the candidate’s character, biography, and qualifications for office.

Instead, the Republicans campaign by appealing more to emotion than intellect, using a negative message to develop enthusiasm.

While Wrongo is happy that Dems want to campaign again on an anti-Trump message, he still thinks policy is the right way to appeal to at least two types of voters: Those who rarely vote, and those who voted Democratic last time but are less enthusiastic this time. These voters think our political system hasn’t produced results for them, and they’re looking for promises to change that in order to get their votes.

While we keep touting Biden’s economic performance, Wrongo recently found a very important poll taken last November by the WaPo that asked Americans how they defined being in the middle class:

“About 9 in 10 US adults said that six individual indicators of financial security and stability were necessary parts of being middle class….Smaller majorities thought other milestones, such as homeownership and a job with paid sick leave, were necessary.”

They also asked how many of those markers of being in the middle class people said they had achieved, and the results are a staggering rejection of how well the US economy is working for many people:

“Just over a third of Americans met all six markers of a middle-class lifestyle. While about 9 in 10 Americans had health insurance, only three-quarters had health insurance and a steady job. With each added measure of financial security, more Americans slipped away from the middle-class ideal.”

Let’s get into the findings. Here’s the WaPo chart about what factors Americans think it takes to be in the middle class:

It’s arbitrary to pick six, but they were the most frequently mentioned. A secure job. The ability to save. To afford an emergency. Paying the bills without worrying. Healthcare. Retirement. It’s a sensible list. And in the poll, huge majorities agreed those are the key criteria for a middle class life.

The Very Big Problem with this is that when the WaPo asked the same respondents if they had the ability to meet those criteria, the numbers are startling. Here’s the second WaPo chart:

Just 35% of people say that they meet the criteria that almost everyone, (~90%) agree should make someone middle class. If that’s true, America needs to redefine “middle” class. The majority in this survey did not have the financial security associated with being in the middle class. More from WaPo:

“The most common barrier was a comfortable retirement, something that about half of middle-income Americans over 35 felt they were on track to achieve.”

Think about what this research is really showing us. America no longer has a middle class. While ~90% of people agree on what a middle class life is, only a minority can afford it. This means we have a “phantom” middle class: Americans want to be middle class, but only a minority of them are. So what class does that make the majority?

What this research appears to show is that America is building something more like a permanent underclass.

Acknowledging this issue would be a great starting point for Biden to gain traction with low propensity voters and with the Gen X and younger voters who make up most of the low enthusiasm cohort of Democratic voters.

As Anat Shenker-Osorio puts it:

“Democrats rely on polling to take the temperature; Republicans use polling to change it.”

This time around the Democrats need to emulate Republicans who work at moving the needle instead of chasing it. And this middle class problem is an issue that will move the needle.

Fortune Magazine’s Tiffani Potesta writes that Gen Xers personify the problem of middle class life:  (emphasis by Wrongo)

“Gen Xers expect to keep working longer than they planned–and will be the first generation to go into retirement with less financial security than their parents and grandparents.”

Gen X will be the first to reach retirement under a new paradigm: the widespread move from Defined Benefit plans to Defined Contribution or 401(k) plans in the US. This is a barely cited yet fundamental societal change that shifted the responsibility to save for retirement from employers to individual employees. More:

“…the numbers do not add up: Gen Xers reported that on average they will need roughly $1.1 million in savings to retire comfortably, yet they expect to stop working with only about $660,000 saved–a savings gap of around $450,000.”

Still more:

“According to a report from the National Institute on Retirement Security, the average account balance in 2020 for private retirement accounts among working Gen Xers was $129,994. This is woefully short of the amount of savings most of us will need to be secure in retirement.”

What’s worse is that the median account balance was scarier: $10,000–and 40% have zero savings.

For a society to be staring at the next few generations not being able to retire and not to be members of the middle class is very troubling, particularly in terms of what’s likely to happen if that’s the case. Losing our middle class is almost a sure path to autocracy, possibly through the rise of fascism and/or authoritarianism.

Biden and the Democrats need to acknowledge these problems are real and pledge to do everything possible to return America to having a true, bell-curve shaped middle class. They can run generally against Trump as “order vs. chaos”, but Trump is running on “America’s decline”, which includes the financial insecurity of millions of Americans. Biden needs to call that out specifically, along with ideas on how to fix the problem. That would make financial insecurity an issue for Democrats equal to abortion, something that targets a specific group and encourages them to get to the polls in November.

If Bernie Sanders isn’t too old to rage against economic insecurity, then Biden is old enough to do the same.

Facebooklinkedinrss

The Auto Strike

The Daily Escape:

Trail Ridge Road, Rocky Mountain NP, CO – September 2023 photo by Rick Priebe

On Friday, The UAW union expanded its strike against GM and Stellantis, two of the Big Three automakers, ramping up pressure on the companies to reach deals on new contracts. The union walked off the job at parts distribution centers of both manufacturers but spared Ford, saying the company had done more to meet its demands. From the NYT:

“Our pressure on Ford is starting to pay off,”

But there was no indication a deal with Ford was imminent. More:

“Stellantis workers walked out at 20 of the company’s parts distribution centers Friday, while G.M. workers went on strike at 18 centers.”

Ford Canada reached a deal last week with the union that represents its Canadian workers. It may offer a clue to the US outcome: The deal provides for pay increases worth up to 25% over three years, as well as bonuses, improved retirement benefits and measures to protect employees as Ford retools factories for electric vehicles. The union, Unifor, is negotiating separately with GM and Stellantis in Canada.

The UAW is asking for a 37% wage increase over four years, improved retiree benefits and shorter work hours. They also want an end to a tiered wage system that starts new hires at much lower wages than the top UAW pay of $32 an hour. Importantly, more than 18,000 UAW members are now on strike.

Some context: UAW workers made significant sacrifices to help keep the big three afloat, amidst the financial crisis in 2009. They made those sacrifices based in part on the promise that the Big Three would eventually renew their compensation and benefits, which the Big Three never did. There were no cost of living adjustments, despite the Big Three going from losing money to record profitability (and tens of $ billions in stock buybacks).

And this week, Biden will join the strike in an extraordinary move of support. From CNN:

“Biden will travel to Michigan on Tuesday and walk the picket line with members of the United Auto Workers union, he announced Friday…”

Biden said in a post on Xitter:

“Tuesday, I’ll go to Michigan to join the picket line and stand in solidarity with the men and women of UAW as they fight for a fair share of the value they helped create. It’s time for a win-win agreement that keeps American auto manufacturing thriving with well-paid UAW jobs,”,

This presidential appearance on a picket line is a historic first. It is also an opportunity to score political points, since it comes one day before Trump is scheduled to deliver a speech to an audience of current and former union members in Detroit. In July, Trump asked the UAW to endorse him, so both politicians are working hard to gain traction with the union.

The UAW was angered by Biden’s pumping tax money into nonunion electric vehicle suppliers, and has withheld its endorsement, even as most other labor unions have rushed to back Mr. Biden’s re-election.

Back to some context for the UAW strike: The WSJ reports that:

“The Detroit companies’ labor costs, including wages and benefits, are estimated at an average of $66 an hour…”

That compares with $45 at Tesla, which isn’t unionized.

Hopefully, the UAW strike will yield fair results for the workers, given the enormous profits the companies are making, the generous salaries the industry’s execs are reaping, and the sacrifices labor made to keep the lights on when the industry was on life support in 2008.

This may well be the union’s last big strike when you consider that nearly half of all the cars built in the US are manufactured in 31 foreign-owned plants. None of these facilities are unionized, and their workers are generally paid less than those at union plants.

The move to EVs will be also be a sea-change reality for auto labor. There is likely to be a 40% reduction in the labor required to build the new engineless cars. Electric motors are much simpler than internal combustion engines. It is estimated that in less than 10 years, two-thirds of all new cars will be electric.

While the impact on labor throughout the supply chain will be dramatic, plenty of internal combustion engines will remain in use, even if not in production. That will provide stability for auto maintenance and repair workers for decades to come.

Nonetheless, the writing is on the wall. Workers with computer skills and AI capability will replace many traditional lunch-pail workers at plants assembling automobiles.

Time to wake up America! Not so long ago, the thought of a UAW strike was traumatizing because of the enormous workforce the union represented. A half-century ago, the UAW represented 1.5 million auto workers (1.5%) out of a total American workforce of just under 100 million workers. Today, UAW membership at GM, Ford, and Stellantis is about 150,000 employees (less than one percent) out of a total American workforce of 160 million workers.

Imagine if today’s number is reduced by 40%, or 60,000 workers! This means that the UAW loses its ability to represent its workers effectively by 2033!

To help you wake up, watch and listen to Green Day perform their hit “Wake Me Up When September Ends” from their 2004 album “American Idiot” at England’s Reading Festival in 2013. Frontman Billie Joe Armstrong wrote the song about the death of his father when he was 10 years old. But it has come to express loss of all kinds. Gotta love those English crowds:

You realize that the country is growing older, that Biden is growing older, the song is growing older, Green Day is growing older, and the union movement in the US is growing older too.

Regardless of how much time has passed, this song hits just as hard as it did when it was introduced 19 years ago.

Sample lyric:

Summer has come and passed
The innocent can never last
Wake me up when September ends

Facebooklinkedinrss

Can Biden’s Union Roots Help Him In 2024?

The Daily Escape:

Red Mountain, San Juan Mountains, CO – September 2023 photo by Daniel Forster Photography

The “the biggest auto strike in generations” got under way last week, with 150,000 US autoworkers, including employees at Ford, Stellantis and General Motors walking off the job after contract negotiations failed to reach a deal. This strike, coupled with the likely government shutdown at the end of the month, will precipitate a very dangerous moment for the Biden administration.

From The Guardian:

“The United Auto Workers (UAW) union says workers have never been fully compensated for the sacrifices they made after the 2008-09 financial crisis, when they agreed to a raft of cuts to save the industry. The carmakers received huge bailouts and soon returned to record profits.”

The WaPo had a good article asking workers why they are striking. Most cited inflation and fairness:

“We’re not making enough money” said Petrun Williams, a 58 year-old Ford repairman. “People should be able to buy their own houses, but right now it’s not possible.”

This is going to be a difficult problem to tackle, because GM, Ford, and Stellantis are wildly inefficient giant bureaucracies with cost structures optimized to make $75,000 trucks, and their move into Electric Vehicles will take a lot of money and time before it pays off.

But the Biden administration isn’t necessarily helping: (Brackets by Wrongo)

“…Biden…is in a tough spot with the United Auto Workers….Through its industrial policies,…[Biden]…is giving away billions to automakers through production tax credits and loans, while supporting the transition to electric vehicles through consumer rebates and funds for charging infrastructure. Biden has promised that those incentives will lead not only to carbon emissions reductions but also good-paying union jobs.”

But the UAW leadership isn’t buying it. As the UAW goes on strike, their members don’t necessarily support Biden, but that doesn’t necessarily mean they support Trump either. Politico asked striking members if Biden had done enough to prevent the strike. They talked to Garry Quirk, the president of the local UAW union in Kokomo, IA:

“I don’t know what he’s done…Ask him. I don’t think he knows what he’s done. Seriously. I’m not trying to be mean.”

Quirk wasn’t freelancing: Fain and the union haven’t yet endorsed Biden’s reelection, throwing into doubt Biden’s standing in autoworker-heavy communities. But Politico reported that Biden had spoken that day with UAW president Shawn Fain and auto company CEOs. The chair of Biden’s Council of Economic Advisers said this week that Biden had been very much engaged.

But his efforts didn’t resonate with union member Denny Butler:

“Historically, man, if you didn’t vote Democrat years ago, and you were in the union, sometimes you got your ass kicked…I’m telling you what, the Democratic Party is not what it was 20, 30 years ago.”

So this is another Politico story about Obama voters becoming Trump voters and not looking back.

What Biden is fighting is the sense that the Democratic Party has not been truly on the side of union workers for a long time. It is true that today the Democrats are more on the side of unions. Neoliberalism is not nearly as powerful in the Democratic Party as it was during Obama’s time, or earlier.

But perceptions can be sticky. Clinton, Carter, and Obama (especially in the first term) all promoted corporate policies over the unions. Workers got screwed as factories closed, and no one offered much to workers beyond retraining programs that they didn’t want, and for the most part, didn’t lead to better jobs.

If you said that Republicans (including Mitt Romney) were no better, you’re correct. But today’s Republican Party offers a way to channel anger and resentment. Union members can opt for the GOP path even if the GOP doesn’t have the union’s interests in mind.

Despite Obama (and Biden) saving autoworker jobs through the 2009 auto bailout, they did little to hold the auto companies accountable. They allowed the expansion of two-tiered wage rates that the union is still fighting during the current strike.

The perception is that the UAW shrank and sacrificed, while the auto industry leadership got richer.  Biden absolutely cares about unions, but he’s fighting against decades of belief that the Democrats aren’t what they used to be.

And no matter what Biden does, it’s going to be hard to get by that perception. There’s a mixture of anger and nostalgia that sticks in the minds of people who don’t really pay attention to the details of politics. Let’s take a look at the price of cars over the last ten years:

The Big Three automakers reported $21 billion in profits in just the first six months of 2023. Despite these enormous gains, the companies have cried poverty in response to union demands for wage increases that would make up for decades of pay stagnation. Worse, during the last year, the Big Three automakers have authorized $5 billion in stock buybacks, effectively giving those dollars to shareholders instead of to autoworkers.

The Economist had an excellent observation (paywalled):

“Late last year I took a trip…in a shiny new vehicle, Ford’s electric F-150. The car is in some ways an avatar for today’s Democratic Party. Joe Biden’s administration likes things that are made in America by union labor. It also wants to speed up the transition away from fossil fuels. The F-150 car ticks both boxes. It is also a high-end item that markets itself as a vehicle for working Americans.”

More:

“That’s a bit like the Democratic Party too…with each passing election Democrats lose votes among actual working-class Americans and gain them with college-educated ones (some of whom can actually afford a $75,000 truck).”

More:

“When we talked to a…UAW…representative near Detroit, it became clear the unionized workers are lukewarm on the green transition. Electric vehicles are less labor-intensive than cars powered by internal combustion, which is bad for the UAW members. In fact that is one reason why the union went on strike today. College-educated liberals, on the other hand, like electric vehicles a lot.”

Apparently union members see the problem much more clearly than the Biden Administration.

There could be a settlement reached between the unions and the companies at any moment, but it feels like this will be a protracted situation: If the UAW workers get the 40% pay increase they are asking for, they probably would learn to accept electric vehicles. Don’t hold your breath.

Biden’s relationship with America’s unions is deep and personal, but the next few months are really about his political strategy. And they’re an example of how the Democrats are always trying to balance competing aims.

Time to wake up America! Will Biden continue pursuing his environmental policies and risk losing even more support among working-class Americans? Or will he pump the brakes on environmentalism and alienate upscale Democrats? Biden won only 33% of white, non-college voters in 2020, so maybe that’s where his opportunity to expand his base in 2024 lies. But does Biden really have a path to take back more non-college voters?

To help you wake up, watch and listen to a recent version of the union anthem “Solidarity Forever”, written by Ralph Chaplin in 1915. Although it was written for the Industrial Workers of the World (IWW), the AFL–CIO have adopted the song as their own. Here it is sung in the Wisconsin capitol building in September 2011, by demonstrators who opposed then Governor Scott Walker’s “Wisconsin Budget Repair bill.”

The bill proposed to alleviate the state’s budget shortfall by taking away the ability of public sector unions to bargain collectively over pensions and health care, as well as ending automatic union dues collection by the state. Walker stated that without the cuts, thousands of state workers would have to be laid off.  After two days of arrests for “holding signs” on the first floor of the Wisconsin State Capitol, the Solidarity Sing Along took to the rotunda in joyful defiance:

The law passed and remains in effect today.

Facebooklinkedinrss

Labor Day Thoughts

The Daily Escape:

Hatch Chili festival, Hatch, NM – September 2023 photo by Eddie Gomez

“If we weren’t all crazy, we’d all…go…insane…” – RIP Jimmy Buffett

Wrongo was sad to learn that singer-songwriter Jimmy Buffett died on Labor Day weekend. Wrongo isn’t a Parrothead, yet like most people, he will sing along whenever “Come Monday”, “Margaritaville”, or “Son of a Son of a Sailor” pops up on the car radio.

Labor Day kind of means the end of summer, and back to school for kids and their parents. Having Monday off is great. But what exactly are we celebrating? One answer is that knowledge workers have won the tug-of-war over work from home (WFH).

The NYT’s Sunday Business section has an article “All That Empty Office Space Belongs to Someone”. They ask the question: “What happens if the nearly 100 million square feet of workplace real estate stays empty”? They’re only talking about NYC real estate. The article quotes a real estate executive Eric Gural, whose family company, GFP Real Estate, owns and manages more than 55 properties and 13 million square feet, or about 2% of the city’s office real estate, about what happens next:

“Rents will be lower. Occupancy will be lower. We won’t be as profitable. The worst part about that is that it might affect some of the philanthropy we do.”

That’s kinda tone deaf. Why would a worker want to rush back to the office so Gural’s family can keep up with their philanthropy?

Among Wrongo’s six kids, most spend at least a few days in the office each week. Some are in the office every day. The problem generally isn’t that everyone hates the office. Mostly they hate how office work has changed during the past 20 years: Open floor plans, with people squeezed together into pods.

Then there’s the commute. Few office workers can afford to live in NYC or even a subway ride away. The average one-way commute in New York takes 40.8 minutes. That’s far longer than the US average of 26.4 minutes. That average time means that many, many commuters to NYC are in a car, train or bus for much longer than 41 minutes each way.

This means that people had a major lifestyle change when they started to WFH. No more getting up with the birds to sit on a train for an hour or more, and then stand on a 90° subway platform BEFORE they even get to their desk!

WFH also was family positive since most kids had remote schooling, which the WFH parents could supervise. At the same time, childcare also cratered. So the pinch on parents to be in attendance 24/7 for their young kids was clearly helped by WFH.

Nothing will solve the commute problems for those who live outside of Manhattan, not even giving everyone a private office. Maybe if companies offered to pay for commuting costs and childcare, people would come back. How about it, corporate America?

Another big labor issue is how long it has taken for women to return to the workforce. In the years leading up to the pandemic, women’s labor force participation rates were rising faster than that of men. Several factors were driving it, in particular the female-dominated industries, such as health care and caregiving were among the fastest-growing industries. Also, women’s educational attainment has risen substantially.

That ended during the pandemic. But CNN has reported that the labor force participation rate for women in their prime working age hit an all-time high in June of 77.8%. Prime working age is defined as 25-54. It was the third consecutive month that women between the ages of 25 and 54 have set a record high for labor force participation.

Women are doing much better in the labor market, and clearly, the pandemic’s “she-cession” is over. Yet, barriers remain: Notably, they’re still making far less than men. In 2022, women in the US earned about 82 cents for every dollar a man earned, according to a Pew Research Center report released in March. That’s a big leap from the 65 cents that women earned in 1982. But it’s barely moved from the 80 cents they were earning in 2002, and certainly hasn’t kept up with inflation.

The WFH movement helped women as well: Home-based work allowed for more flexibility in hours, and that helped improve access to childcare with schedules that allowed for easier drop-offs and pick-ups.

We should remember what else Labor Day is about. If you enjoy not having to work weekends, or having a 40-hour work week, or having sick days and paid time off, you can thank labor leaders. Thousands of Americans have marched, protested and participated in strikes in order to create fairer, more equitable labor laws and workplaces — and many are still doing that today.

So have a cookout. Go to the big box stores and spend because it helps the economy.

Here’s your Monday Wake Up Call, America! The challenge during the next year is whether the currently hot jobs market will cool off sooner than inflation. It seems likely that the Fed will be able to cool inflation without plunging the economy into a recession. If so, the jobs market will continue to offer average Americans a shot at a better life.

To help you wake up, let’s celebrate Jimmy Buffett’s life. From the Rolling Stone in 2018:

“WHILE PRESIDENT TRUMP took shots at Democrats in conservative Pensacola, Florida on Saturday, Jimmy Buffett hurled musical insults at Republicans in West Palm Beach during a Democratic campaign rally for US Sen. Bill Nelson and gubernatorial candidate and Tallahassee Mayor Andrew Gillum.

While singing his hit ‘Come Monday’ at the ‘Get Out the Vote’ rally, Buffett tweaked its lyrics to make a dig at Trump changing ‘Come Monday’ to ‘Come Tuesday, things will change. Come Tuesday, we’re making a change. It’s been two insane years and it’s time to switch gears.’”

Buffett long supported Democrats. So have a margarita, and toast ol’ Jimmy. Here’s his laid-back cover of CSN&Y’s “Southern Cross”, performed live at the Newport Folk Festival in 2018:

Note the Parrothead regalia in the audience. Anyone else think he looks like Biden?

Facebooklinkedinrss

Monday Wake Up Call – September 12, 2022

The Daily Escape:

Harvest Moon, Cape Cod National Seashore, MA – September photo by Tom Baratz

With all of the media’s coverage of the comings and goings of the British monarchy, Wrongo’s certain that you missed the reviews of a new book, “Slouching Towards Utopia” by Brad DeLong, an economist from UC Berkeley. Dylan Matthews in Vox quotes DeLong from the book:

“The 140 years from 1870 to 2010 of the long twentieth century were, I strongly believe, the most consequential years of all humanity’s centuries.”

Matthews thinks it’s a bold claim. After all, homo sapiens has been around for at least 300,000 years; DeLong’s “long twentieth century” represents 0.05% of that history.

But DeLong says an incredible thing happened during that sliver of time that had eluded our species for the other 99.95% of our history: Before 1870, technological progress was glacial, but after 1870 it accelerated dramatically. More from Vox:

“DeLong reports that in 1870, an average unskilled male worker living in London could afford 5,000 calories for himself and his family on his daily wages. That was more than the 3,000 calories he could’ve afforded in 1600, a 66% increase….But by 2010, the same worker could afford 2.4 million calories a day, a nearly five hundred fold increase.”

DeLong is speaking of the nations of the rich north, not about all nations. He’s saying that food surplus was the key driver of progress. What’s implied is that the greatest difference between the wealthy and everyone else was that the poor were living on the verge of starvation. Those basic economic facts shifted once having enough to eat ceased being society’s most critical status distinction.

Another interesting statistic from the book:

“…the average number of years of a woman’s life spent either pregnant or breastfeeding…has gone down dramatically, from 20 years of a typical woman’s life in 1870 to four years today.”

Most historians present modern history as a long 19th century (from the French revolution in 1789) to the crisis of 1914. Which is then followed by a shorter 20th century ending with the fall of communism. DeLong, by contrast, argues that the period from 1870 to 2010 is best seen as a coherent whole: the first era, he argues, in which historical developments were overwhelmingly driven by economics.

From the Economist:

“…despite the Industrial Revolution…for millennia, technological improvements never yielded enough new production to outrun population growth. Incomes had stuck close to subsistence levels. Yet from around 1870, growth found a new gear, and incomes in leading economies rose to unprecedented levels, then kept climbing.”

DeLong says that economic policy in this period was a duel between the ideas of Friedrich von Hayek, who extolled the power of the free market, and Karl Polanyi, who warned that the market should serve man, not man serving the market.

Before WWI, markets generated rapid growth along with soaring inequality. People pushed back, demanding greater political rights, which they used to pursue regulation of the economy and improved social insurance.

After WWII, a mix of a market economy and a generous safety-net made for a happy marriage of Hayek and Polanyi, improved by Keynes, who said that governments should act to prevent economic recessions. This led to a three-decade post-war period of growth unmatched before or since. DeLong calls them the Thirty Glorious Years; from 1945 to 1975, as the US and Europe recovered from World War II.

But when growth sagged and inflation rose in the 1970s, voters supported politicians promising market-friendly, or “neoliberal”, economic growth reforms, like lower taxes and reduced regulation. But those reforms didn’t keep economic growth high. And they also led to even worse inequality. Still, the US and other rich countries pressed on with them, right up to the 2008 global financial crisis, which marks the end of DeLong’s 20th century.

According to a paper by Carter C. Price and Kathryn Edwards of the RAND Corporation, had the more equitable income distribution that America experienced in those thirty glorious years stayed constant, the aggregate annual income of Americans earning below the 90th percentile would have been $2.5 trillion higher in just the year 2018. That’s an amount equal to nearly 12% of GDP.

Price and Edwards say that the cumulative inequality cost for our 40-year experiment in government-supported income inequality added up to $47 trillion from 1975 through 2018. And probably equaled $50 trillion by 2020.

That’s $50 trillion that would have made the vast majority of Americans far more healthy, resilient, and financially secure.

So, the big unanswered question is: Can we again return to a period where we see both economic growth and equitable growth? It’s highly doubtful. As DeLong says in Time:

“Our current situation: in the rich countries there is enough by any reasonable standard, and yet we are all unhappy, all earnestly seeking to discover who the enemies are who have somehow stolen our rich birthright and fed us unappetizing lentil stew instead.”

The problem here is that our entire culture, economy and even our civilization is predicated around growth and people haven’t known anything else. Hope you’ve enjoyed the ride.

Time to wake up America! We need to reimagine capitalism, our taxation policies and our welfare scheme if we are to survive. Expect a rough adjustment.  To help you wake up, listen, and watch Bruce Springsteen perform “Darlington County” live in London in 2013:

Facebooklinkedinrss

Saturday Soother – April 23, 2022

The Daily Escape:

North Landing River, near Virginia Beach, VA – April 2022 photo by Erik Moore

Our media ecosystem is overwhelming us. Some of the information is accurate, some is bogus, and much is intentionally misleading. And that’s a deliberate strategy. While it didn’t originate with Steve Bannon, he perfected it with his thought that:

“…the Democrats don’t matter….The real opposition is the media. And the way to deal with them is to flood the zone with shit.”

This is why the ongoing cultural war works so well for Republicans. There’s always some petty war going on between the Parties that’s stoked by the media. And it’s almost always about cultural issues since Republicans really don’t have a policy platform, and don’t want to go against large corporate America. When you go against corporations, you lose the money needed to get elected.

But we should see the big corporations as our common enemy. Time Magazine has an article about how overtime pay has disappeared:

“If it feels like you’re working longer hours for less money than your parents or grandparents did, it’s because you probably are. Adjusted for inflation, average hourly wages have actually fallen since the early 1970s, while average hours worked have steadily climbed. American workers are increasingly underpaid, overworked, and overwhelmed.”

One reason is the loss of overtime pay:

“If you’re under the age of 45, you may have no idea that overtime pay is even a thing. But…middle-class workers used to get a lot of it….That means that [for] every hour you work over 40 hours a week you work for free, contributing…a giant pool of free labor that modern employers have come to expect and exploit. Profits are up, real wages are down, and income inequality has soared to its highest level since the Gilded Age.”

Overtime pay was one of the great New Deal reforms. It was a core provision of the Fair Labor Standards Act (FLSA). The FLSA set the minimum wage at one-half the median wage and the overtime threshold at three times the minimum—an amount equal to 1.5 times the median wage.

But both the minimum wage and the overtime rules began to change in 1975, and rising income inequality since 1975 is responsible for a $50 trillion upward redistribution of wealth and income from the bottom 90% households to those in the top 1%. Here’s a chart showing the impact of losing overtime. Productivity goes up, but is completely decoupled from income:

Source: chartr

The Economic Policy Institute has a tool called “Company Wage Tracker” that allows you to select any big corporation and see what percentage of their employees make below a certain wage. For example, it shows that 51% of Walmart employees earn below $15/hr.

The NYT wrote about Mary Gundel, a manager at a Dollar General store in Tampa, FL who was fired for speaking out about the chain’s policies regarding overtime and short-staffing:

“The store used to have about 198 hours a week to allocate to a staff of about seven people….But by the end of last month, she had only about 130 hours to allocate….With not as many hours to give to her staff, Ms. Gundel often had to operate the store on her own for long stretches, typically working six days and up to 60 hours a week with no overtime pay.”

Ms. Gundel was working 60 hours a week and making $51,000 a year. That means she’s making only a little more than the minimum wage. Dollar General is one of the most profitable retail chains in the country.

Prices are going up everywhere across America, and corporations are making proportionately more income. This is what the Democrats should be focusing on, standing up for workers, doing what is right as opposed to groping for answers to the Republican’s culture war issues.

There’s plenty that’s wrong in America. But what’s wrong doesn’t see the light of day alongside all of the pissing contests about Critical Race Theory, or predator grooming or LGBTQ issues. These are ginned-up to make sure you won’t pay attention to what’s really going on.

Something seems to be brewing. We’re seeing halting attempts at unionization at Starbucks and Amazon. Those employees want a better life; they want to have a seat at the table about the future of the company.

We need to remember that without the “essential workers” the country grinds to a halt. We need to support those who try to organize. We need to wrest some economic power away from politicians and big businesses. And finally, some faceless people who are sick of being wronged are trying to do just that.

Enough for another week. It’s time to let go of the news. It’s time for our Saturday Soother. On the Fields of Wrong we’re preparing our vegetable garden, although it will be a few weeks before it’s warm enough for the plants to survive. We had an overnight temperature of 32° earlier this week.

Now, grab a seat by a large window and listen to violin soloist Soojin Han play Chopin’s “Nocturne No.20 in C# minor” in August 2019. She’s playing on a 1666 Stradivarius:

It sounds beautiful.

Chopin composed the piece in 1830, but it was published in 1875, 26 years after his death. It was featured in the movie “The Pianist” in 2002.

Facebooklinkedinrss

Monday Wake Up Call – May 10, 2021

The Daily Escape:

Lone Juniper, Black Canyon, Gunnison NP, CO – 2020 photo by Mattbnet

Isn’t it time that corporations paid decent wages?

After the Labor Department released its April jobs report, the US Chamber of Commerce blamed last month’s weak employment growth on the $300 weekly supplemental jobless benefit. They then urged lawmakers to eliminate the enhanced unemployment payments that were extended through early September by Biden’s American Rescue Plan.

This, from the dudes who willingly spend $300 on a lunch.

According to the US Chamber’s analysis, the extra $300 unemployment insurance (UI) benefit results in roughly one in four recipients taking home more pay than they earned working. But, if one in four recipients are making more not working than they did working, that’s not an indictment of $300 a week in UI benefits. It’s an indictment of corporations who pay less-than-living wages.

We could blame Asia for this, or we can blame our managerial and ownership class who engineered the outsourcing deals that made it possible. They built factories in Asia as an economic-production-economic-aggression platform to disintermediate American workers by sending higher wage jobs to lower wage locations in the Far East. And in many cases, the same companies who closed the American plants owned the Asian factories.

It’s sickening to hear these big business types complain that raising wages will destroy the economy! That’s the same argument which was used in the South against ending slavery (it would hurt the economy).

The US Chamber isn’t alone. South Carolina is cutting off extended unemployment benefits starting on June 30. From the SC governor:

“South Carolina’s businesses have borne the brunt of the financial impact of the COVID-19 pandemic. Those businesses that have survived — both large and small, and including those in the hospitality, tourism, manufacturing, and healthcare sectors — now face an unprecedented labor shortage,”

South Carolina’s unemployment rate was 12.8% in April of last year. But this March, it was down to 5.1%, significantly below the 6.1% national rate. Still, these Governors (Montana has done this too) are simply acting as shills on behalf of corporations to force workers back into low wage jobs.

Many studies have shown that the employees of big box stores like Walmart and Target cannot meet their basic economic needs on the money they make at their minimum wage job. Many turn to community social services just to feed their families.

It’s not China (or other Asian countries) that are to blame. We demand ever-lower prices, so something had to give. That something was middle-class American jobs. The American public was never part of the discussion about the pros and cons of offshoring manufacturing to lower wage countries, or how that would both lower costs for goods, but also destroy American jobs.

A lot of the people who now shop at Walmart and Target lost their jobs to Mexico, China, or Bangladesh. At which point, they needed some form of welfare, and/or another part time job at Walmart-type wages. And now that they’re on Walmart wages, Walmart prices are all they can afford.

Time to wake up America! We should be asking how can it be that food banks are overwhelmed while the Dow Jones Industrial Average hits an all-time high? Simply, the stock market isn’t the whole economy. The stock market is about corporate profits, while food banks are about minimum wage jobs and unemployment.

We should be asking: Why do these corporations (the small as well as the large) persist with business models that don’t allow them to pay living wages?

We could also ask whether more red states will try to “solve” the employment problem by hurting the unemployed rather than treating the root cause: paying living wages.

To help you wake up, listen to Rag’n’Bone Man and P!nk on Rag’n’Bone Man’s new release, “Anywhere Away from Here”. We often feature music to have fun with, or to dance to. And then there are tunes like this, music for the heart and soul:

Facebooklinkedinrss

Defund the Police? Really?

The Daily Escape:

Looking Glass Rock, from Blue Ridge Parkway, NC – 2020 photo by 2paymentsof19_95

On Sunday afternoon, a veto-proof majority of Minneapolis City Council members announced their commitment to disbanding the city’s police department (MPD), which has endured harsh criticism in the wake of the police killing of George Floyd.

This step is considered part of the movement that is wrongly called “Defund the Police”. What Minneapolis is doing is reorganizing, re-imagining and redirecting their police. Calling this movement “defunding” is a misnomer that some in BLM, and others on the left have advocated, while the right has jumped on it to discredit Biden along with all Democrats.

Groups advocating defunding have put forward a variety of ideas. Some simply oppose police budget increases, others advocate mass personnel reductions, and some are fighting for actual defunding as a step toward abolishing police forces. Some initiatives are linked to the fight to close prisons. All are pushing for a reinvestment of any dollars saved into community services. Only the first two are mainstream ideas.

A reasonable question is what would the defunding advocates want on their streets instead of police?

Polling this month from Data for Progress indicates that 68% of voters answered that they would support: “Creating a new agency of first-responders, like emergency medical services or firefighters, to deal with issues related to addiction or mental illness that need to be remedied but do not need police.”

According to a study from the Treatment Advocacy Center, a person with an untreated mental health issue is 16 times more likely to be killed by police than other members of the community. Even though many US police departments’ duties include responding to non-violent, non-emergency calls, departments keep expanding their military-style arsenal.

The question by Data for Progress had broad support, including 62% of Republicans, and higher percentages of Democrats, whites and blacks. Versions of this concept are already in place in Eugene, Oregon; Austin, Texas; and Denver, Colorado.

It is also reasonable to ask, “Can’t we just fix what’s wrong”? The answer is yes, but efforts to do this have been underway for decades. If police and city officials in most cities had been serious about reform and policy change, we wouldn’t be hearing dumb ideas like “Defund the Police”, and people would not be this angry.

Newsweek reports that Camden, NJ had success in 2013 when it disbanded its 141-year-old police force. In its place, the surrounding county formed a new police department. This move had the result of busting the local police union. But the Camden County Police Department rehired most of the laid-off cops, along with 100 new officers, at much lower salaries and with fewer benefits than they had received from the city. From Bloomberg:

“The focus was on rebuilding trust between the city’s residents and officers. The remaking of Camden’s police department appears to have led to crime rates falling in the city. Camden recorded 67 homicides in 2012, while last year, there were 25.”

For Camden’s Black Lives Matter protest on May 30, officers left the riot gear at home, and brought an ice cream truck. The police department’s chief, Joseph Wysocki, who is white, brandished a “Standing in Solidarity” poster alongside residents holding “Black Lives Matter” signs.

And yes, the Camden police department is again unionized.

Disbanding police departments isn’t going to happen everywhere, but “reorganizing” local police departments is a necessity in most places, especially when the municipality’s police union management is not interested in reform.

The argument shouldn’t be to defund them, but to take away their military toys, and hold them to higher performance standards. With the right to exercise lethal force should come closer scrutiny for their behavior.

“Defund the Police” should mean: See what is happening in your town with clear eyes. See the original sin of placing property rights over human rights. See the original sin of racism in America and how it impacts the community.

Policing in America is deeply broken. Few departments are controlled effectively by their elected officials. America needs stronger mayors, town councils and district attorneys who can be for “law and order”, and also for protecting the rights of the people who are confronted by day-to-day policing. We will only have stronger public servants by voting them in.

It’s going to be a long struggle to rebuild our police departments into something that creates a peaceful community while valuing Constitutional rights.

That’s a struggle worth taking on.

Facebooklinkedinrss

Police Violence

The Daily Escape:

Fall sunrise at Crystal Lake, near Ouray, CO – photo by Ryan Wright

Wrongo is now certain that 2020 is the worst year for America since 1968. Why? We have had riots in 140 cities. 40 million are unemployed, and the Death rate from COVID-19 has reached 106,003. Here’s a map of where protests have occurred in the past few days:

We have a national problem of civil disobedience leading to rioting and looting. Note the number of states (in yellow) that have already activated the National Guard. We should assume that the number of cities with protests will probably grow.

Let’s talk briefly about policing in America. After the Ferguson uprising in 2014, we were astonished at the militarization of the police. We also started paying closer attention to the number of police killings in the US, but since there was no central database, independent groups started to compile them.

Cities and towns introduced new policies designed to reduce police violence, starting with police wearing body cameras. But according to the Police Shootings Database, police in America killed more people in the US in 2019 than in 2015, and the number has risen every year since 2017.

If police killings are increasing despite widespread public attention and local reform efforts, shouldn’t we be asking why?

Minneapolis, like most other cities, has a civilian review board, but it didn’t prevent Chauvin from killing George Floyd. In fact, the review board had failed to impose consequences for any of the eighteen previous complaints made against Chauvin. This shows how little these review boards are doing to change behavior.

Can change happen through the ballot box? Minneapolis implies that voting isn’t enough: Minneapolis has a progressive mayor and a city council composed entirely of Democrats and Green Party members. But it doesn’t prevent out-of-control racist cops from killing people. The glue holding this broken system together is police unions.

From Eric Loomis:

“That our police are openly fascist is finally becoming apparent to a lot of liberals who really didn’t see it that clearly before…..The police are openly declaring war on the nation. They are raising their fascist flag instead of the American flag. They are blinding good journalists. It is completely unacceptable…”

Loomis specializes in labor unions and labor issues. He says that it is in the public’s interest to force the police unions to give up the blank check for violence that they currently have. The two concepts that should be written out of the union contracts are arbitration in discipline cases, and qualified immunity.  Qualified immunity is a concept in federal law that offers government officials immunity from harms caused by actions they perform as part of their official duties.

Because of qualified immunity, police act like the laws don’t apply to them. This is a legal obstacle blessed by the Supreme Court that’s nearly impossible to overcome when the police violate our Constitutional or civil rights.

Despite that, blanket immunity shouldn’t absolve cops of responsibility for violence. Since they are state actors, the burden of proof should be on them to prove their violence was justified, not the other way around.

In many cases, the police unions are also run by bad people. In Chicago, the police union just elected as president a cop who has been reprimanded several times and is currently stripped of his police powers.

Minneapolis’s police union has a hard line and controversial president, Bob Kroll, who said that George Floyd had a “violent criminal history” and that the demonstrations were part of a “terrorist movement.”

Minnesota AG Keith Ellison blasted Kroll on “Fox News Sunday”:

“…he operates as sort of an alternative chief who, I think, undermines good order in the department.”

These are the kinds of people that rank and file police all across America want protecting them. That shows something about the true character of the rank and file.

Cities should pull the records of every cop with a double digit number of excessive force complaints and fire them. Force the unions to sue and then litigate it every step of the way. Make them defend the indefensible.

America needs stronger mayors, town councils and district attorneys who can be for “law and order” and also for protecting the rights of citizens who are swept up by day-to-day policing. We can have stronger public servants by voting them in.

Atlanta Mayor Keisha Bottoms says just that in this video, which everyone can see here:

As an aside, Mayor Bottoms looks to Wrongo like an excellent choice for the Democratic VP.

Facebooklinkedinrss

Saturday Soother – October 5, 2019

The Daily Escape:

Fall colors, Adirondacks, NY – October, 2019 photo by nikhilnagane

You can be forgiven for not focusing this week on the UAW’s strike against GM, which is now in its 19th day. Shares of GM have plunged by double digits since the strike began, mostly because the automobile sector has reported weak sales figures. Wolf Richter reports that:

“New-vehicle deliveries in the US…were…flat, at 4.32 million vehicles in the third quarter. For the nine months, deliveries were down 1.6%. This puts new vehicle sales on track for about 17 million…in 2019, the worst level since 2014, and below 2000….”

So, automobile unit sales are at the same level that they were 20 years ago in 1999-2000. With the strike, GM vehicle production has ceased at nearly all of its North American plants. This hasn’t really hurt GM yet, because they had around 90 days’ sales worth of vehicles in inventory as the strike started. They typically have more like 60 days on hand. So shutting the plants helps work down their inventory bulge.

Back to the strike: Julianne Malveaux reports in the WaPo about how GM betrayed the UAW after the union made sacrifices when GM nearly folded in 2008:  

“General Motors was on its knees in 2008. Amid a global financial crisis, the company was so financially challenged that it had no choice but to accept a federal government bailout. In 2009, the United Auto Workers joined the feds in saving GM, making concessions on wages and benefits to rescue the beleaguered company.”

The partnership paid off for GM. The company has earned $35 billion in profits in the last three years, partly as a result of the concessions the workers made over a decade ago.

But, does GM owe the UAW anything in return? The protracted strike shows that GM feels it doesn’t owe them much. Darrell Kennedy, a UAW striking worker said in a video:

“We gave up a cost-of-living increase, a dollar-an-hour wage increase we were due, tuition assistance and more…”

The union wants to include non-union workers who are part of GM’s three-tiered wage system. Those hired before 2007 (the union members) are Tier One workers who earn roughly $31 per hour, plus guaranteed pensions. Those hired after 2007 are Tier Two workers, earning about $17 an hour and have the opportunity for 401 (k) participation. The third tier are temporary workers who earn less than Tier Two workers and have no benefits.

The union wants better pay for Tier Two workers, and a path to job security for Tier Three employees. But since GM plans to move toward electric vehicles which use less labor that gas-powered cars, they are uninterested in commitments that reduce their flexibility in the future.

In business, Wrongo learned the hard way that making concessions, and expecting it to create good will that helps a future negotiating position, is usually a bad idea.

But, in this case, it’s difficult to work up enthusiasm for either side.

For example, GM spent $10.6 billion since 2015 buying back its own shares, some of which went to the UAW, who originally owned about 17.5% of GM after the bailout. The UAW has now sold over half its GM stock. Since the 1960s, GM has consistently demonstrated poor management. Their share of the automobile market has decreased from about 50% to about 17%. If it wasn’t for the government bailout, GM wouldn’t be here.

The UAW is rightly trying to grow its membership by advocating for GM’s Tier Two and Three employees. OTOH, in 2009, the union didn’t agree to cooperate with GM out of any sense of benevolence. They were saving their jobs. Finally, since the bailout, GM’s UAW workers have a profit-sharing deal. In 2018, the 46,500 UAW hourly employees earned up to $10,750 each.

Wrongo is very pro-labor, and often pro-union. In this case, it’s difficult to get behind the UAW’s strike.

Time to move past which State Dept. official in the Ukraine texted what about the Bidens, or how much more blatant Trump’s overtures to foreign governments will get. Let’s enjoy a Saturday Soother!

Start by thinking about the leaves piling up outside. Friday night brought frost to Mansion of Wrong, so our fall clean-up is in full swing. If it’s warmer where you live, enjoy the last of the warm weather.

No coffee today, get outside and do something physical. But before you go out, let’s remember the great Jessye Norman who died last Monday. She was a gifted singer with one of the greatest and most beautiful voices ever. She had all the qualities to make a performance both convincing, and memorable. Here she is singing “Ave Maria” by Schubert:

Those who read the Wrongologist in email can view the video here.

Facebooklinkedinrss