connecting a couple minimum wage points.

[adeptusmajor]

I am worried that schools mostly teach the showing up part, but not the doing something valuable

I believe this is very true of our education system. They are also teaching:

the worker's share of the income pie has gotten increasingly smaller relative to the share going to executives and shareholders.

Believe all you want--it's not true.  Today's education standards are written by politicians and corporate types who know little or nothing about an actual classroom.  They see the world a certain way, and they try to shape it to fit their beliefs.  Don't blame the teachers--blame folks who claim that if we just had the right script, any monkey could teach a class of unruly third graders.  Or the people who institute standards that pay little regard to a child's learning development (ie, things that are age-inappropriate or out of sequence) or just plain stupid or (as happens in my GOP state) apparently motivated by a desire to counter the influence of those awful commie teachers by throwing in some Republican-style indoctrination.  Blame the short-sighted people who inform JR for believing that internet education is some panacea.  (I assure you it would not work at all for my son.)  You can blame politicians and superintendents who demand so much data on children that teachers are losing a good 10-15% of instruction time to assessments and standardized testing.  You can also blame parents (of all classes) who sometimes think that sending kids to school relieves them of all responsibility to assist in the education of their own children.  You can blame an undifferentiated education system (where most high schools are strictly college prep--vocational has gone by the wayside) for failing to reach kids who have no interest in what that system has to offer. 

But don't claim it's because they're teaching what you quoted from me above.  They aren't teaching that.  Believe me.  Not in the schools where my wife has taught, not in the school that my son has attended.

I would argue that generally they are teaching it by not teaching otherwise. And they are damn sure teaching that in the media. I too have several people close to me who are educators, and I also work very closely with several school systems on a regular basis. I don't blame teachers in general for anything, though teacher's unions are a different story. I have been lucky enough in that my son, who has special needs, has had some wonderful people as teachers who have gone to extra lengths to give him the individualized attention and consideration that he sometimes needs. And they have done this on their own merit and sometimes to their possible detriment, just trying to do their job while constantly fighting against the broken, convoluted system that they work within. I have also encountered many teachers who should have been long removed from their post, but couldn't be due to their ties to unions with political backing. So who do we both seem to be pointing fingers at here?

So, yeah, I pretty much agree with most of the points you made above, including the underlying "screw the Republicans" part. Screw the Democrats, too. But I guess I just said the same thing twice, they are all the same people after all. The quicker we all stop letting them divide and conquer us with their charades, the better off we'll be.

 

[fum]

The Boeing union has a difficult choice. Boeing has a viable non-union factory in South Carolina capable of building the planes.

They may have a factory in SC, but based on my understanding, they are not capable of building planes.  At least not to date.  Maybe in another decade or so.

Boeing attempting to "Walmartize" plane production is not the way to instill customer confidence.

From my view (having lived in the area my whole life, and having > 4 relations who work there), the union employees have made very clear what is important to them, and are willing to negotiate in good faith(although their union leaders don't necessarily convey that all the time).  The company on the other hand, only appears interested in taking the beancounter/shareholder value approach to operating (which a large chunk of the corporations in this country needs to get over/correct, the pendulum has swung to far in that direction).

 

[JohnRoberts]

The Boeing union has a difficult choice. Boeing has a viable non-union factory in South Carolina capable of building the planes.

They may have a factory in SC, but based on my understanding, they are not capable of building planes.  At least not to date.  Maybe in another decade or so.

Then the unions have nothing to worry about.

Boeing attempting to "Walmartize" plane production is not the way to instill customer confidence.

Is that a pejorative?

From my view (having lived in the area my whole life, and having > 4 relations who work there), the union employees have made very clear what is important to them, and are willing to negotiate in good faith(although their union leaders don't necessarily convey that all the time).  The company on the other hand, only appears interested in taking the beancounter/shareholder value approach to operating (which a large chunk of the corporations in this country needs to get over/correct, the pendulum has swung to far in that direction).

Unions need to create value for their members or they have no justification to exist. If the union's primary strategy is to use force (strikes) to extract higher pay, that increases the cost of making Boeing aircraft, this is not a win-win and less than a zero sum game. They make the Boeing pie smaller as airbus wins marginal aircraft sales that Boeing would have gotten.

Markets are not inelastic so put your thumb on the scale here, and stiff happens over there.

UPS seems to have the most success negotiating win-win contracts with it's union drivers, but the recent contract negotiation wasn't going as well. I suspect the ACA is causing some extra tension about who will pay the uncreased healthcare costs for Cadillac plans and the like. .
 

JR

 

[hodad]

Unions need to create value for their members or they have no justification to exist. If the union's primary strategy is to use force (strikes) to extract higher pay, that increases the cost of making Boeing aircraft, this is not a win-win and less than a zero sum game. They make the Boeing pie smaller as airbus wins marginal aircraft sales that Boeing would have gotten.
JR

CEOs need to create value or they have no justification to exist. If the CEO's primary strategy is to extract higher pay, that increases the cost of making Boeing aircraft, this is not a win-win and less than a zero sum game.

It cuts a lot of different ways here.  Very, very few CEOs will take a cut for the sake of the company, and the expectation of the shareholders for ever higher stock prices and/or dividends is rarely ignored.  And yet the workers sacrifice and sacrifice (and are expected to do so.)  Why does it cut only one way in your book?  I know a number of union members who've accepted pay cuts when faced with the possible collapse of their employer.  Unions, whether you wish to believe it or not, are not always or even generally inflexible, and their power has been steadily eroded since the PATCO strike. 

 

[JohnRoberts]

Unions need to create value for their members or they have no justification to exist. If the union's primary strategy is to use force (strikes) to extract higher pay, that increases the cost of making Boeing aircraft, this is not a win-win and less than a zero sum game. They make the Boeing pie smaller as airbus wins marginal aircraft sales that Boeing would have gotten.
JR

CEOs need to create value or they have no justification to exist. If the CEO's primary strategy is to extract higher pay, that increases the cost of making Boeing aircraft, this is not a win-win and less than a zero sum game.

Indeed and CEOs routinely get replaced for not creating value. Alan Mullally worked at Boeing for 30 something years before leaving to resurrect Ford. he was well respected for his work there, and apparently now Being wants him back again, along with Microsoft trying to recruit him (he wants to retire). Some CEOs do indeed deliver value.  It is human nature to desire higher pay (i know I do). For high level executives it isn't as much about the money as keeping score, kind of a my pecker is longer than yours is. I think Larry Ellison of Oracle may currently enjoy the largest staff.  8)

A regrettable fact of life is that the stock market often rewards CEOs who lay off workers because it suggest they are running a disciplined operation and improves short term profits. Longer term it telegraphs to me that they can't grow top line enough to support their overhead. In this last several years of weak recovery we have seen many examples of cost cutting as corporation can not get enough growth from this economy. 

CEO work for the shareholders not the employees. it will be interesting to see how GM and Chrysler fare. The UAW controls about 17.5% of GM stock and 65% of Chrysler. It seems like 65% ownership gives them controlling ownership (>51%)  of the means of production so they can create a communist paradise if they desire. I suspect their voting rights are probably restricted to <51%, and they will probably try to sell that stake. 

It cuts a lot of different ways here.  Very, very few CEOs will take a cut for the sake of the company, and the expectation of the shareholders for ever higher stock prices and/or dividends is rarely ignored. 

I recall multiple high profile examples of CEO working for a dollar a year, when they execute deep cost cutting programs. They are still wealthy and still profit from stock appreciation, or preserving personal wealth by managing stock prices as much as they can. 

And yet the workers sacrifice and sacrifice (and are expected to do so.)  Why does it cut only one way in your book? 

It doesn't only cut one way. But if Boeing wants to attract another world class chief executive like Mullally they won't get him on the cheap. Top CEOs are like professional sports stars. There are a finite supply of really good CEO to fill the top slots. The boards must pay up to get winners. Just like there are mediocre professional athlete there are mediocre CEOs, but you don't get to play at that level just by showing up and drinking coffee. There is real work involved that some apparently do not appreciate.

I know a number of union members who've accepted pay cuts when faced with the possible collapse of their employer.  Unions, whether you wish to believe it or not, are not always or even generally inflexible, and their power has been steadily eroded since the PATCO strike.

Union power is eroding because their benefit to workers has likewise collapsed as worker safety has become legislated and regulated. Many old contracts, especially related to retirement benefits and health care costs, did not anticipate the lengthened life expectancy and increased cost for end of life care. I think it is a strategy of the legal drug industry to get 100% of the population hooked on chronic medication (like statins and blood sugar management), doing better than even the illegal drug industry could hope for. The public is helping by eating, and not exercising themselves into heart disease and type II diabetes in increasing numbers. 

I am surely repeating myself, but union self-interest led to the collapse of the Twinkie parent company. The driver/delivery union, refused to give up, unprofitable work rules, so the brand was sold to another company, that could use more efficient distribution channels and still be competitive in the crap food market. The intransigent union not only cost their own jobs, but killed the company, and cost the bakers union workers their jobs too.

I repeat you can't get blood from a stone. If the old contract is unsupportable by the modern economy, wether it is competition or healthcare increases, or whatever the reason. The deal will break one way or the other. It is not the fault of evil CEOs, be angry at the world for changing around archaic unions that have outlived their utility to members.

Only the government workers unions seem impervious to real world profit and loss math, but the voters who are their real bosses have noticed and started paying attention. While i don't hold much hope for fixing this anytime soon.

or not, maybe I am all wrong...  8)


JR

 

[hodad]

CEO work for the shareholders not the employees.

JR

Isn't that the crux of it right there?  When it's all about keeping investors happy, who's looking out for workers?  And when you get into the doings of the LBO crowd (Bain etc.), who put investor profit ahead of the profitablity of the company (and with even less regard for the workers at said companies), it gets even worse.  (Yes, I know, they do turn some companies around.  But they get theirs regardless.)

Further, haven't you, in arguing that unions are largely obsolete, made the case that, yes, Big Govt. does do good and important things, for without its workplace regulations workers would have almost no protections?  Thank you for pointing that out to yourself, John.  I think you'd overlooked that. 

 

[JohnRoberts]

CEO work for the shareholders not the employees.

JR

Isn't that the crux of it right there?  When it's all about keeping investors happy, who's looking out for workers?  And when you get into the doings of the LBO crowd (Bain etc.), who put investor profit ahead of the profitablity of the company (and with even less regard for the workers at said companies), it gets even worse.  (Yes, I know, they do turn some companies around.  But they get theirs regardless.)

It's called capitalism... Creating wealth means there is more wealth to go around (bigger pie). The people who create wealth do not keep it all, they spend a lot of it. Perhaps we have a difference of opinion about the role of government. Yes they need to maintain order and make sure every one plays fair, but it is not the job of government to insure outcomes, for the very important reason that they can't even when they try,

For an object lesson about the governments inability to help us, look at the current fed policy. The dual mandate of managing both inflation and economic growth suggests to me that they drank too much kool-aid and believe their own BS. Over many past economic cycles they have used lower interest rates to reduce the depth of the short cyclic contractions between periods of growth, and jump start the following recovery that was already coming, making them believe that they can actually control the economy more than they can. Now after the major asset collapse (housing bubble etc) in 2007, they are still pushing as hard as they can against an interest rate lever that stops at 0%. To keep bond interest rates low the fed has become a major buyer of government debt? Yes, how can that be legal? Of our $17T of sovereign debt, the Chinese may own $1T, but our own government owns about $5T of that $17T in a successful effort to keep the debt interest rates low. This is not even remotely an arms length, free market transaction. This resultant unnaturally low interest rate is a powerful economic distortion rippling all through the economy. Supposedly to help the economy but not very evenly. It will be very messy to unwind. Just Benanke's mention of reducing the monthly purchases, drove the stock market down.  In fact how could we even pay for buying $5T of debt, when we were already $12T in debt? You could argue that we owe the $5T to ourselves (fed) but this is clearly a house of cards, that may not stand up to a stiff breeze. The cheerleaders for this argue that they bought something like 10x that in GDP growth but that assumes we would collapse entirely without the man behind the curtain (or the soon to be woman behind the curtain starting next year). All I can say is wait until interest rates return anywhere close to normal and we have to pay more like 7-10% than 1-2% on that mountain of debt.

OK sorry for the veer, but here we are years later after all that economic accommodation and government help with crappy unemployment, that looks better than it really is on paper because of low workplace participation. To bring this slightly on topic of minimum wages, unemployment for teenagers is also way too high and getting higher. So the government is not very good at helping us despite good intentions and shuffling around trillions of funny money.

There is a place for government to enforce laws, property rights, and an orderly marketplace. It is not governments job to guarantee a quality of life.

Further, haven't you, in arguing that unions are largely obsolete, made the case that, yes, Big Govt. does do good and important things, for without its workplace regulations workers would have almost no protections?  Thank you for pointing that out to yourself, John.  I think you'd overlooked that.

Apparently you haven't been listening to me very closely. I have recently posted about the factory fires in Bangladesh and how the factory owners there have been resisting unions. That actually sounds like a good place for collective bargaining to improve worker safety.

We had our own factory fires here and workplace abuses in past centuries, and legislation was passed long ago to improve factory safety here. I have never argued for zero regulation. Only that we don't need more of it. Capitalism without any checks and balances (like anti-trust to prevent monopolies etc) tends toward excess, so there is a place for regulation to prevent excess. The government is not smart enough to run the private economy by themselves. They need to regulate from a distance and not screw the pooch. If anything I think their anti-trust effort has been a little too lax lately concerning the last several years of airline consolidation that will reduce competition in a number of hub airports, which will increase the ticket cost to the flying public. For decades investing in airlines was a bad joke, but these days they are printing money, just like you know who. 

Just to be clear collective bargaining is an expression of force. Economic force where unions can cause great economic harm to employers by stopping production. Just like any use of force there can be good and bad reasons for using that force. To stop abusive practices by employers that put employees at personal risk was a good use of that force (in the last century). To use that force to win wage concessions when the value of the work performed has been degraded by international competition is generally a lose-lose. While the union workers may win a short term bump, the employer is made weaker by a workforce that isn't earning what it is paid. In the extreme these wage dislocations can kill the company (like Twinkies), or it can be a gradual process over decades like the UAW with the car companies, where the car makers agreed to too generous contracts that came back to bite them. The detroit fiasco is still playing out and we will see if Chrysler goes for a tri-fecta (already went bankrupt twice) or emerges a shining example of government helping their union friends.   

I have written so much about these topics I find it hard to believe you do not know what I think. But that's OK... It's not your job to know what I think.

JR

 

[hodad]

You know, I do make a point of tuning you out from time to time, but I don't think the question's been answered.  Why is it okay for a company like Bain (or KKR, or even a clown like Frank Lorenzo) to go in and rape the resources of a company for personal gain, while often driving these companies into the ground, wreaking havoc on individuals, families and entire communities, and yet it's not okay for Twinkie drivers to resist a wage cut? 

And we don't need unions anymore?  Wealth has moved upward and upward as unions have steadily been weakened--and with the flow of wealth upwards has come this perpetually lousy economy.  Maybe, just maybe, there is a connection there. 

 

[L´Andratté]

“There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”
Warren Buffet

JR, I appreciate you, starting discussions like this, and I, as a german, am very intersted in the politics and general matters of the US (especially first hand opinions).

But I think economy is getting more and more international and with that in mind, I like to share my view from the other side of the world.
I don´t believe minimum wages are getting us anywhere and regarding my country, I don´t even think they get a majority. BUT I also don´t think, that any society can afford to treat the people like cattle.
And that´s what´s happening more and more.

JR, those low wage jobs, they are like medieval dungeons, you get thrown in and you never get out. There´s no development, no chance. No place to grow into. It´s the manchester underclass again minus the belief in socialism. It doesn´t feel good to me, no american dream in sight. I have best education and lots of very different qualifications, so it´s not me I´m rambling about, but I see, what´s going on (around here).

I have been working for more than a decade as a social worker out of what you might call idealism.
I worked very hard and long hours (talking about 24 h) and earned very little of it, BECAUSE there was no material value, this kind of work created. So I think it can´t be all about that.

There has to be a direction in what a society wants. If it is survival of the fittest, then look my in the eye and say it, but if we like to think of us as a civilisation, we should live up to it.

Atomic energy is by far the most subsidized method btw.

 

[hodad]

Just a blurb about Hostess.  You'll undoubtedly scoff at my source (a liberal blog!, but it's from someone who lived it.  Now tell me how the unions killed this company by not giving concessions to management?



In 2005 it was another contract year and this time there was no way out of concessions. The Union negotiated a deal that would save the company $150 million a year in labor. It was a tough internal battle to get people to vote for it. We turned it down twice. Finally the Union told us it was in our best interest and something had to give. So many of us, including myself, changed our votes and took the offer. Remember that next time you see CEO Rayburn on tv stating that we haven't sacrificed for this company. The company then emerged from bankruptcy. In 2005 before concessions I made $48,000, last year I made $34,000. My pay changed dramatically but at least I was still contributing to my self-funded pension.

In July of 2011 we received a letter from the company. It said that the $3+ per hour that we as a Union contribute to the pension was going to be 'borrowed' by the company until they could be profitable again. Then they would pay it all back. The Union was notified of this the same time and method as the individual members. No contact from the company to the Union on a national level.

This money will never be paid back. The company filed for bankruptcy and the judge ruled that the $3+ per hour was a debt the company couldn't repay. The Union continued to work despite this theft of our self-funded pension contributions for over a year. I consider this money stolen. No other word in the English language describes what they have done to this money.
http://www.dailykos.com/story/2012/11/18/1162786/-Inside-the-Hostess-Bankery

 

[JohnRoberts]

You know, I do make a point of tuning you out from time to time, but I don't think the question's been answered.  Why is it okay for a company like Bain (or KKR, or even a clown like Frank Lorenzo) to go in and rape the resources of a company for personal gain, while often driving these companies into the ground, wreaking havoc on individuals, families and entire communities, and yet it's not okay for Twinkie drivers to resist a wage cut? 

I don't accept that pejorative characterization of Bain. Keep in mind that Bain's reputation was targeted by the left to damn Romney by association for the last election and it worked.  Ironic perhaps they hired a different ex-Bain consultant to help fix the ACA website.

Unions can always strike for higher pay but they suffer the consequences of economic reality. In the Twinkie case they played chicken with the company, and the company just gave up because they couldn't afford the union demands.  I support unions to help the factory workers in Bangladesh improve their working conditions but if they try to win too much money for their work effort, they will just price that industry out of business, and it will just move to the next cheaper region, and we start this dance all over again.
------

In capitalism there is "creative destruction" where ineffective businesses get dismantled, often by bankruptcy (court involvement to keep it orderly and protect debt holders), so those assets can re-emerge and be re-purposed as a viable company, or sold off to other viable companies. The main losers in such reorganizations are the owners (stockholders), the debt holders and creditors have priority over the owners. The employees get to work for the new company that emerges from the ruins. If they had old labor contracts that were uncompetitive, that probably contributed to the companies demise.

The recent reorganization of GM and Chrysler, with heavy government involvement, actually screwed debt holders, preferentially benefitting the unions, who now hold major ownership stakes. One misconception about bankruptcy, the factories and means of production do not get destroyed, they just change ownership, so they can emerge leaner and more productive. The elephant in the room about the car companies is that they had too much capacity. The reorganization swept a bunch of obsolete factory space and archaic production lines into a black hole. Time will tell if this was better than going through a more traditional bankruptcy reorganization that would have taken years. We'll see if the unions are good stewards of the company since they are now owners.

No it isn't Ok to rape and pillage. I had a personal experience with one such scum bag businessman. I had a consulting contract with a consumer hifi business that was using one of my designs in a consumer electronic product and paying me a royalty. The founder and owner of the company was getting old and didn't have a relative to take it over, so he decided to sell the business "FOR THE GOOD OF HIS WORKERS". He entertained several offers and finally went with the most promising. This business man had structured a large loan based on the untapped value of the company my friend had built, that he said he would re-invest in the company. The unfortunate reality, is this crook, took the loan money, and turned around to buy yet another different company.  He then proceeded to live off the good will built up in my friend's old company to screw vendors. Since I was now one of those vendors, he stopped paying me my royalty, under the guise of re-negotiating my royalty agreement. I had operated for years on a simple letter agreement and handshake with the former owner, but now I was presented a bullshit contract that nobody in their right mind would ever sign, no doubt his strategy to avoid paying me. I finally became frustrated and hired a lawyer to recover what i felt I was owed (I knew how many units he sold because it used a unique single sourced component and that company told me how many he bought). Long story short I authorized my lawyer to sue (I was pissed off and it wasn't just about the money). My threat of lawsuit scared him that other vendors would catch wind, so he settled almost immediately. When the key component in the product went obsolete, and I would have to redesign the product for him to keep making it, I told him to take a hike. Since there is actually justice, or Karma in the world, this scum bag ended up in jail  several years later when he was caught stealing from a business partner.  ;D ;D

So yes there are bad businessmen, some criminals wear suits, but in my decades of experience I have met far more honest businessmen than dishonest. I can count dishonest businessmen I have encountered on fingers of one hand with some left over. 

And we don't need unions anymore?  Wealth has moved upward and upward as unions have steadily been weakened--and with the flow of wealth upwards has come this perpetually lousy economy.  Maybe, just maybe, there is a connection there.

Unions and collective bargaining have a right to exist, if they actually deliver value to their members. I just don't see the value today, like there was a hundred years ago.  I do not think it is appropriate for government workers to be unionized. What do they need protection from? I really do not like teacher's unions using their collective force to prevent removing the bad teachers from classrooms. That IMO is not a union behaving well.

The sad irony is that the current administration in its plainly stated desire to transfer wealth is accomplishing the exact opposite. The private economy and new job creation is as bad as I can remember. As i have repeated ad nauseum, the fed policy of easing, is making the wealthy wealthier as it inflates hard assets.

Raising the minimum wage higher would actually make these entry level jobs even more of a permanent (dead end) position than they are now.  Minimum wage jobs are supposed to be something we do to get work experience and prove ourselves, then move on. However the golden goose has two hands around it's neck choking it so the supply of new jobs to move up to are scarce, and workers are not well prepared to fill the open highly skilled jobs. All the illegal immigrants that have been smuggled across the border are also competing for these unskilled jibs, so making them legal workers, even if not full voting citizens also hurts the lower income citizens competing for these same jobs. Don't blame the wealthy or businessmen for this situation. This is classic government mismanagement (actually the illegal immigration issue is a blatant new voter pursuit). 

JR

 

[JohnRoberts]

Just a blurb about Hostess.  You'll undoubtedly scoff at my source (a liberal blog!, but it's from someone who lived it.  Now tell me how the unions killed this company by not giving concessions to management?



In 2005 it was another contract year and this time there was no way out of concessions. The Union negotiated a deal that would save the company $150 million a year in labor. It was a tough internal battle to get people to vote for it. We turned it down twice. Finally the Union told us it was in our best interest and something had to give. So many of us, including myself, changed our votes and took the offer. Remember that next time you see CEO Rayburn on tv stating that we haven't sacrificed for this company. The company then emerged from bankruptcy. In 2005 before concessions I made $48,000, last year I made $34,000. My pay changed dramatically but at least I was still contributing to my self-funded pension.

In July of 2011 we received a letter from the company. It said that the $3+ per hour that we as a Union contribute to the pension was going to be 'borrowed' by the company until they could be profitable again. Then they would pay it all back. The Union was notified of this the same time and method as the individual members. No contact from the company to the Union on a national level.

This money will never be paid back. The company filed for bankruptcy and the judge ruled that the $3+ per hour was a debt the company couldn't repay. The Union continued to work despite this theft of our self-funded pension contributions for over a year. I consider this money stolen. No other word in the English language describes what they have done to this money.
http://www.dailykos.com/story/2012/11/18/1162786/-Inside-the-Hostess-Bankery

Hello,,, read what you posted.

The company was unprofitable and having to borrow money to meet pension obligations.

A company can not borrow perpetually to operate without profit.

They just put themselves out of business before their lenders did it to them.

There are many way too generous labor deals negotiated in better times that can't survive reality, but I am just repeating myself, again.

JR

 

[JohnRoberts]

“There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”
Warren Buffet

That is an interesting quote, and yes he said it, in the context of his support for Obama's tax the rich class warfare. I suspect this was just clever business on his part to keep the administration friendly to his sundry businesses, he is a very smart guy. Buffett has contributed a huge share of his personal wealth to Bill Gates charity. 

JR, I appreciate you, starting discussions like this, and I, as a german, am very intersted in the politics and general matters of the US (especially first hand opinions).

I appreciate all thoughtful opinions. I try to be less critical of other cultures and systems, knowing how distasteful it is to hear criticism from outside.

But I think economy is getting more and more international and with that in mind, I like to share my view from the other side of the world.

Yes, in recent decades the world economies have become more linked. It used to be that economic cycles would alternate around the world, now when the major economies catch a cold, the developing world suffers pneumonia.

I don´t believe minimum wages are getting us anywhere and regarding my country, I don´t even think they get a majority. BUT I also don´t think, that any society can afford to treat the people like cattle.
And that´s what´s happening more and more.

While I don't want to pontificate about German History, you have a long tradition of paternalistic government. Your version of socialized healthcare is IMO a more effective combination of private/public where IIRC low income citizens get support to pay for healthcare plans.

JR, those low wage jobs, they are like medieval dungeons, you get thrown in and you never get out. There´s no development, no chance. No place to grow into. It´s the manchester underclass again minus the belief in socialism. It doesn´t feel good to me, no american dream in sight. I have best education and lots of very different qualifications, so it´s not me I´m rambling about, but I see, what´s going on (around here).

Some of the lack of upward mobility is caused by government "help" that makes it so hard to fire or lay off employees. When business is not free to employ it's employees effectively they need to manage the workforce differently. This is not unique to Germany there are related stories from all around the EU zone of businesses trying to close an unprofitable factory and prevented by legislation from doing so. in many cases, these factories get sold off to other businesses that are willing to accept the lability.  What I learn from economics is that everything has unintended consequences so regulations to protect worker jobs, often hurt those very workers.

I have been working for more than a decade as a social worker out of what you might call idealism.
I worked very hard and long hours (talking about 24 h) and earned very little of it, BECAUSE there was no material value, this kind of work created. So I think it can´t be all about that.

There has to be a direction in what a society wants. If it is survival of the fittest, then look my in the eye and say it, but if we like to think of us as a civilisation, we should live up to it.

There is an argument about private charity vs forced government charity. All western civilizations try to provide some form of safety for the least among us, but at some point the state needs to get away from mandating outcomes for the broader population, or trying to. Not that it isn't nice to try, but because it is IMO impossible to accomplish and often fails miserably doing more damage than good. 

Atomic energy is by far the most subsidized method btw.

I saw a recent statistic that said renewable energy receives 3x the subsidy of non-revewable, per unit of energy created. I have been watching Germany's energy policy for years. They have recently walked away from nuclear, investing heavily in wind and solar, but at some fraction of the nations power consumption you can't rely on it always being windy and sunny enough, so you have to maintain conventional back up generation capacity to carry the load on dark, still days. This increases the cost of providing electricity and cost to consumers. In germany I believe they also subsidize the cost of electricity for industry (to preserve jobs) making consumers pay even more for electricity.

Thank you for sharing and sorry if I got anything wrong, I am not an expert on germany but I have been there several times since 1970, and germany is one of the leadership nations in the EU.

JR

PS: not to start yet another veer, but a recent report about sun spot activity revealed unexpected low output from current cyclical sun spot peak. I somehow doubt terrestrial CO2 is driving solar output.

 

[hodad]

Hello,,, read what you posted.

And yet you still blame the unions.  The guy took a 30% pay cut (not all in one chunk, but that's not terribly relevant), and that's not enough.  Hostess wasn't even bothering to fund the pension, so how does that bankrupt them--they were taking the money that they claimed was going to the pension fund and using it for operating expenses. 

From another source:
Even as it blamed unions for the bankruptcy and the 18,500 job losses that will ensue, Hostess already gave its executives pay raises earlier this year. The salary of the company’s chief executive tripled from $750,000 to roughly $2.5 million, and at least nine other executives received pay raises ranging from $90,000 to $400,000. Those raises came just months after Hostess originally filed for bankruptcy earlier this year.

Do you think these executives actually cared whether the company survived?  They were just milking it for all it was worth. 

 

[dfuruta]

Don't make assumptions about minimum wage workers, or assume that everyone working minimum wage has the same background.  I'm just a little over minimum wage at my job, and I have a bachelor's with honors from a good school.  I have a friend with a chemistry degree hanging up Christmas lights at the mall, and I know plenty of smart, educated people waiting tables.

It's hard to find decent jobs, now, and rent isn't getting any cheaper.

 

[JohnRoberts]

Don't make assumptions about minimum wage workers, or assume that everyone working minimum wage has the same background.  I'm just a little over minimum wage at my job, and I have a bachelor's with honors from a good school.  I have a friend with a chemistry degree hanging up Christmas lights at the mall, and I know plenty of smart, educated people waiting tables.

It's hard to find decent jobs, now, and rent isn't getting any cheaper.

It is painful to watch too, while not as painful as it is to live.

I am hugely disappointed that the current administration refuses to make some business friendly changes that could unleash a huge round of investment and new jobs.  Tax reform to allow business to repatriate off shore retained earnings, and normalize our tax laws to be like other nations (regarding offshore earnings ) could make a huge marginal difference.

The ACA is turning out to be a major worry for employers causing them to resist hiring and expanding unless there is clear evidence of market growth. The exclusion for part time workers with less than 30 hours a week, will make that a new normal for part time work. many small businesses are openly admitting to plans to stay under 50 employees. 

I do not have a college degree but it seems chemistry should be a merchantable skill. What is your major?

I doubt raising the minimum wage will improve your situation for an duration. You need a robust economy and job market, so you can use your education to create more wealth than you are now. We've been waiting years for this economy to rebound and the increased regulation and increased taxes, do not seem to be getting it done.

Of course maybe I'm wrong.

JR

 

[JohnRoberts]

Hello,,, read what you posted.

And yet you still blame the unions.  The guy took a 30% pay cut (not all in one chunk, but that's not terribly relevant), and that's not enough.  Hostess wasn't even bothering to fund the pension, so how does that bankrupt them--they were taking the money that they claimed was going to the pension fund and using it for operating expenses. 

From another source:
Even as it blamed unions for the bankruptcy and the 18,500 job losses that will ensue, Hostess already gave its executives pay raises earlier this year. The salary of the company’s chief executive tripled from $750,000 to roughly $2.5 million, and at least nine other executives received pay raises ranging from $90,000 to $400,000. Those raises came just months after Hostess originally filed for bankruptcy earlier this year.

Do you think these executives actually cared whether the company survived?  They were just milking it for all it was worth.

Do you think the executives wanted to sell off their cash cow and shut down the business??? yes the wealthy are always in a better position to take care of themselves, but they did not have the business profit to continue paying out what they were, or they wouldn't have been borrowing money for years.

A very bad visual surrounding large bankruptcies is that companies often have to pay up to keep knowledgeable executives from jumping ship at the first signs of taking on water. Often these retention bonuses get approved by a bankruptcy judge, for the good of the debtors/creditors. Imagine trying to oversee an orderly bankruptcy with no management. If you can imagine this you do not understand business.

I do not blame the executives because the old business plan and labor work rules they agreed to in less competitive times now became unprofitable. Blame the fact that the other businesses became more competitive. Nothing happens in a vacuum... there is always cause and effect. If anything you might blame the executives for being too generous in the past labor contracts. but times change. 

I got some good advice from a lawyer friend back in the '70s. It doesn't matter what kind of contract you get signed, if the deal does not make sense for both parties, it will not survive that reality. I had a letter contract with a business, that was broken ( by them).  I threatened to sue and won, only because I was the first to realize the scam they were running and they were more worried about adverse publicity than my legal chances.. I'm sure many creditors after me did not get their money (I was not that smart. I was lucky and very pissed off). 

JR

 

[dfuruta]

I do not have a college degree but it seems chemistry should be a merchantable skill. What is your major?

Unfortunately, neither major I completed is particularly marketable - music and (pure) math.  There really aren't a lot of jobs at the moment in most fields, though.

The way things are going, it won't be too long until China is outsourcing its manufacturing back to the US 

 

[JohnRoberts]

I do not have a college degree but it seems chemistry should be a merchantable skill. What is your major?

Unfortunately, neither major I completed is particularly marketable - music and (pure) math.  There really aren't a lot of jobs at the moment in most fields, though.

Good luck... Math is certainly fundamental to many disciplines.  Network with friends and family, there are jobs out there but you may need to relocate and/or look outside your primary field of study.

The way things are going, it won't be too long until China is outsourcing its manufacturing back to the US 

As I already mentioned Hon Hai is building a factory in Az but I doubt you want to build TV monitors for a career either.

China just made a major adjustment to their one child policy. Now if either parent is a single child they can now have two children. Apparently China plans to grow their own consumers.

JR

 

[hodad]

A very bad visual surrounding large bankruptcies is that companies often have to pay up to keep knowledgeable executives from jumping ship at the first signs of taking on water. Often these retention bonuses get approved by a bankruptcy judge, for the good of the debtors/creditors.
JR

A fat lot of good their retention did--they got their fat paychecks and the company went down the tubes shortly thereafter.  And after the final collapse, they went to the judge for a round of bonuses for a job poorly done. 

Yes, times change.  But if these characters were so smart, why wasn't it obvious to them when they were stealing the workers' pension money to pay operating expenses that collapse was inevitable?  Think of the workers, with their kids, mortgages, car payments.  They've lost 30% of their paycheck already--do you really blame them for saying no to yet another round of cuts?  They're screwed, blued & tattooed however things shake out--and things might have played out better for them if the executives who thought so highly of themselves had actually done a better job. 

Which is to say, don't blame the union for this collapse.  If you want to blame folks for lack of foresight in contract negotiations, you can blame workers, management, and probably a lot of others as well.  The future is a hard thing to predict with accuracy. 


dfuruta:  I read somewhere recently that the NSA is the largest employer of mathematicians in the country.  Maybe there's a future for you in the spy biz.