Economist's View: Paul Krugman: The War Against Wages
リンク: Economist's View: Paul Krugman: The War Against Wages.
Paul Krugman: The War Against Wages
Paul Krugman looks at one war that is being won, the war against wages:
The War Against Wages, by Paul Krugman, NY Times: Should we be cheering over the fact that the Dow Jones Industrial Average has finally set a new record? No. The Dow is doing well largely because American employers are waging a successful war against wages. ...
[C]onsider the latest news from Wal-Mart. Wal-Mart already has a well-deserved reputation for paying low wages and offering few benefits...; last year, an internal Wal-Mart memo conceded that 46 percent of its workers’ children were either on Medicaid or lacked health insurance. Nonetheless, the memo expressed concern that wages and benefits were rising, in part “because we pay an associate more in salary and benefits as his or her tenure increases.”
The problem from the company’s point of view, then, is that its workers are too loyal; ... not enough workers quit before acquiring the right to higher wages and benefits. Among the policy changes the memo suggested to deal with this problem was a shift to hiring more part-time workers...
And the strategy is being put into effect. ... Wal-Mart ... wants to transform its work force to 40 percent part-time from 20 percent.” Another leaked Wal-Mart memo describes a plan to impose wage caps, so that long-term employees won’t get raises. And the company is taking other steps to keep workers from staying too long: in some stores, according to workers, “managers have suddenly barred older employees with back or leg problems from sitting on stools.”
It’s a brutal strategy. Once upon a time a company that treated its workers this badly would have made itself a prime target for union organizers. But Wal-Mart doesn’t have to worry about that, because it knows that these days the people who are supposed to enforce labor laws are on the side of the employers, not the workers.
Since 1935, U.S. workers considering whether to join a union have been protected by the National Labor Relations Act... For a long time the law was effective: workers were reasonably well protected against employer intimidation, and the union movement flourished.
In the 1970’s, however, employers began a successful campaign to roll back unions. ... thanks to America’s political shift to the right. And now that the shift to the right has gone even further, political appointees are seeking to remove whatever protection for workers’ rights that the labor relations law still provides.
The Republican majority on the National Labor Relations Board ... has just declared that millions of workers who thought they had the right to join unions don’t. You see, the act grants that right only to workers who aren’t supervisors. And the board, ruling on a case involving nurses, has declared that millions of workers who occasionally give other workers instructions can now be considered supervisors.
As the dissent from the Democrats on the board makes clear, the majority bent over backward, violating the spirit of the law, to reduce workers’ bargaining power.
So what’s keeping paychecks down? Major employers like Wal-Mart have decided that their interests are best served by treating workers as a disposable commodity, paid as little as possible and encouraged to leave after a year or two. And these employers don’t worry that angry workers will respond to their war on wages by forming unions, because they know that government officials, who are supposed to protect workers’ rights, will do everything they can to come down on the side of the wage-cutters.
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Previous (10/2) column: Paul Krugman: Things Fall ApartPosted by Mark Thoma on October 6, 2006 at 12:15 AM in Economics, Income Distribution, Policy, Politics | Permalink
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Comments
It may be an acquired taste, but I kind of like Sterling Newberry's "big picture" essays. Taking Care of Business, and Shirking Over Time is recent and an interesting counterpoint to Krugman's observations.
Posted by: Bruce Wilder | Oct 5, 2006 9:50:01 PM
i've read and admired krugman for a long time. i've never understood, though, why he thinks the solution to increasing income polarization is encouraging and/or enabling collective bargaining by unions. it seems like we could achieve the same benefits through a more progressive tax system without the dead weight loss that results from artificially high salaries that result from collective bargaining.
Posted by: david | Oct 6, 2006 1:10:37 AM
"I've read and admired krugman for a long time. I've never understood, though, why he thinks the solution to increasing income polarization is encouraging and/or enabling collective bargaining by unions. It seems like we could achieve the same benefits through a more progressive tax system without the dead weight loss that results from artificially high salaries that result from collective bargaining."
So, then, the less pay the better, the poorer benefits the better, the more difficult work conditions the better, because all will be fine after, say, taxes. There is actually a perfect argument for any improvement at all in labor bargaining power.
Posted by: anne | Oct 6, 2006 2:42:06 AM
To try to adjust wages thru some sort of tax system is to assume a government that is neutral between labor and business. Why not just assume that management has the best interests of labor at heart. It is only the working people, collectively bargaining for themselves, who will represent their own interests. Yes, there will be times when the labor side of the equation distorts the underlying economic realities too. But I don't see how there's any short cut such as a government solution.
Posted by: Beel | Oct 6, 2006 3:17:03 AM
Mr. Klugman's article is interesting, even provoking. He seems to be noting a trend toward the skewing of economic conditions loosely referred to as the "free" market. Note the emphasis upon "free" I make here.
The truth is every legislative body in a democratic system eventually degrades into selling its power to the highest bidder, and legislative bodies across the U.S. have for a very long time been selling the market unfree in every conceivable fashion possible, from certification requirements, to anti-unionization acts making U.S. markets ever more, well, less free is the only phrase adequate.
Popular movements espousing "deregulation" at some levels have arisen, though very few and with very little benefit towards freedom, since this is not the business in which legislative bodies engage. Legislative bodies generally enslave us.
For a long time it has seemed to me the government now must measure inflation by how much is being paid to the poor schlep who must drive his rusty old Ford to work at Walmart, or sundry other slave-wage retail and service industry sweat shops that provide job creation numbers the government can tout as being on the economic up-side.
The whole business of economic reporting, "skewing" seems a better word, has gone loopy. The very fact that Mr. Klugman points to the wholly fictious new "high" in the DOW as he starts his slide into his sweet spot, seems to demonstrate this fact.
Both the DOW and the NASDAQ indexes, or indices, whichever you prefer, are skewed numbers with no real relationship to any steady measure of gains or losses in this demonstrable pyramid scheme. In between 1999 and 2001 forty-trillion, (40,000,000,000) shares in U.S. coporations went to zero, ($.00) The indexes do not reflect this brutal economic fact.
In 1999 and 2000 the DOW and the NASDAQ volumes were both one to one and a half trillion shares traded every day. Now there are on average, one to one and a half billion shares traded on the DOW and the NASDAQ in a day's trading.
That's called "volume". And it's a very real measure of the "economic activity", gambling in another word, occurring in the "markets". The volumes on the DOW and the NASDAQ seem to indicate there is but one one-thousandth the economic activity in the markets today as there was then occurring in 1999 and 2000.
Another measure might be the successful floating of new stock upon the waters of "investors" in this Wall Street pyramid scheme where stock options are back-dated to skim off any potential gains the gamblers might realize. New stock offerings are pitiful today by the comparison to years gone past.
Yes, the government is corrupt. But what do we expect? It takes its queue from finance and industry which are themselves very corrupt. And, they're the ones crying, it's hard to find a good, well-trained employee who'll work his best.
Southerners once complained they couldn't exist without slavery too.
Don Robertson, Philosopher
Limestone, MaineAn Illustrated Philosophy Primer for Young Readers
Precious Life - Empirical Knowledge
The Grand Unifying Theory & The Theory of Time
http://www.geocities.com/donaldwrobertson/index.html
Art Auctions:
http://www.artbyus.com/auctions.php?a=6&b=4807Posted by: Don Robertson | Oct 6, 2006 4:06:41 AM
October 2, 2006
Wal-Mart to Add More Part-Timers and Wage Caps
By STEVEN GREENHOUSE and MICHAEL BARBAROWal-Mart, the nation's largest private employer, is pushing to create a cheaper, more flexible work force by capping wages, using more part-time workers and scheduling more workers on nights and weekends.
Wal-Mart executives say they have embraced new policies for a large number of their 1.3 million workers to better serve their customers, especially at busy shopping times — and point out that competitors like Sears and Target have made some of these moves, too.
But some Wal-Mart workers say the changes are further reducing their already modest incomes and putting a serious strain on their child-rearing and personal lives. Current and former Wal-Mart workers say some managers have insisted that they make themselves available around the clock, and assert that the company is making changes with an eye to forcing out longtime higher-wage workers to make way for lower-wage part-time employees.
Investment analysts and store managers say Wal-Mart executives have told them the company wants to transform its work force to 40 percent part-time from 20 percent. Wal-Mart denies it has a goal of 40 percent part-time workers, although company officials say that part-timers now make up 25 percent to 30 percent of workers, up from 20 percent last October.
To some extent, Wal-Mart is simply doing what business strategists recommend: deploying workers more effectively to meet the peaks and valleys of business in their stores. Wall Street, which has put pressure on Wal-Mart to raise its stock price, has endorsed the strategy, with analysts praising the new approach to managing its workers. In the last three years, the stock price has fallen about 10 percent, closing at $49.32 a share on Friday.
"They need to be doing some of this," said Charles Grom, an analyst at J. P. Morgan Chase who covers Wal-Mart. It lets the company schedule employees "when they are generating most of their sales — at lunch, in the evening on the weekends."
But Sally Wright, 67, an $11-an-hour greeter at the Wal-Mart in Ponca City, Okla., said she quit in August after 22 years with the company when managers pressed her to make herself available to work any time, day or night. She requested staying on the day shift, but her manager reduced her schedule from 32 hours a week to 8 and refused her pleas for more hours, she said.
"They were trying to get rid of me," Ms. Wright said. "I think it was to save on health insurance and on the wages." ...
Posted by: anne | Oct 6, 2006 4:15:57 AM
Pelosi announced her "100 hours " agenda this morning.
From a strategy standpoint, this is either brilliant or dumb, time will tell.
Posted by: save_the_rustbelt | Oct 6, 2006 6:16:09 AM
we need to set up a licensing permit system
based on a viciuosly tricky comprehension test
so only licensed folks can go around
firing off that morbibly hyper- phrase
"dead weight loss"
