Monday, April 21, 2014

My $15 an hour minimum wage/centralized bargaining Magnum Opus :-)

If average Walmart nonsupervisory pay were raised to $100 an hour, the price of $10 items would only rise to $15.  Walmart labor costs are 7%.  Nonsupervisory workers average $12 an hour. $12 X 8 = almost $100. One of the $12s is there already.  7x7% = 49%.

Double current Walmart nonsupervisory pay to $24 hourly, throw on 25% for benefits to make it $30 and prices rise about 10%.

Somebody challenged me that raising Walmart prices 10% (at $30 -- only 3.5% at $15 min wage) would charge low income consumers $26 billion more a year ($260 billion sales).  I pointed out they could take it out of the $560 billion raise they would get from a $15 minimum wage.  

A $15 minimum wage would shift about 3.5% of income from the 55 percent of the workforce who garner 90% of income to the 45% who scratch only 10%.  $8,000 average raise X 70 million (45% of 140 million + 5% at minimum now) = $560 billion out of $16,000 billion GDP.  BTW, 45% of workforce not going to be sent home over a 3 1/2 percent shift in income share.

100,000 out of (my estimate) 200,000 gang age, Chicago males are in street gangs – I say because they wont work for a minimum wage several dollars below LBJ’s 1968 minimum wage ($10.95) after per capita income about doubled.  A $15 an hour minimum wage might actually put American born workers back to work at America’s McDonald’s.
 * * * * * * * * * *
”Denmark has no minimum-wage law. But Mr. Elofsson’s $20 an hour is the lowest the fast-food industry can pay under an agreement between Denmark’s 3F union, the nation’s largest, and the Danish employers group Horesta, which includes Burger King, McDonald’s, Starbucks and other restaurant and hotel companies.”

What Denmark does have – along with most of continental Europe and French Canada and Argentina and Indonesia -- is a labor market setup called centralized bargaining where every employee doing similar work (e.g., retail clerk) negotiates one common labor contract with all employers doing similar business (e.g., Safeway, Best Buy, Walmart).

$20 an hour + benefits: it’s the centralized bargaining/truly-free market!  Supemarket workers (think Walmart gutted two-tier contracts) and airline employees (think regional pilots making $500 a week) would kill for centralized bargaining. 
The only practicable way to re-unionize -- by law.  Only way to reconstitute political democracy as well. 

Check out Only One Thing Can Save Us by Chicago labor lawyer Tom Ghegeogan.
 * * * * * * * * *
I am not talking about collective bargaining alone — you understand I am talking about every employee doing the same kind of work negotiating one common contract with every employer doing the same kind of business (in the same geographic locale unless nationwide is appropriate). I’m not sure that is we are both talking about the same.
Well, imagine you are running for Congress and you want to support putting some real teeth into the right to organize. Whatever that would mean has got to be real complicated and unfortunately in a country that has forgotten about collective bargaining not a real hot topic.
OTH, centralized bargaining promises to improve so many employees lot (everybody’s lot?) so simply and quickly that it would make a very exciting — and very novel (as in big fun) — issue. Come to think of it polls show 50% want to unionize so maybe its just a matter of the right kind of union issue — and this might be the real killer app. Democrats taking a pasting because they aren’t making anything any better as our world goes down the drain — might be just what they need.
- See more at:
I am not talking about collective bargaining alone — I am talking about every employee doing the same kind of work negotiating one common contract with every employer doing the same kind of business (in the same geographic locale unless nationwide is more appropriate).

Imagine running for Congress and you want to put some real teeth into the right to organize.  Modifying current labor law could be off-putting complicated -- unfortunately in a country where collective bargaining has become a forgotten topic. 

OTH, legally mandated, centralized bargaining promises to improve so many employees lot (everybody’s lot?) so simply and quickly that it would make a very exciting — and very novel (as in big fun) — issue.  The political "killer app."  As I always say supermarket workers and airline employees would kill for centralize bargaining. 

We have socialists, we have Austrian economists and every flavor of economic/political opinion in between.  Where are America's "centralized bargain-ists" (should be a movement all over the world even in labor organized countries) -- pushing the one labor market system that, world-wide for three-quarters of a century (starting with the Teamsters Union in Detroit in the 1930s), has consistently delivered fair and balanced economies and societies?

Everybody better get together to come up with something real soon -- or else:
If the top 1% income continues to receive all the economic growth, then, by the time the output per person expands 50% (25-30 years?) the top 1% income will “earn” half of a half-larger economy (25% + 50% = 75% of 150%). By the time output per person doubles (typically 40-50 years) the equation will read 25% + 100% out of 200% = 62.5% of a twice-as-large economy.

Sunday, June 2, 2013

My minimum wage worksheet

My minimum wage worksheet -- the easily could-have-been minimum wage double-indexed for inflation and per capita income growth: 

double-indexed is for inflation and per capita income growth (2013 dollars):   

yr  per capita    real     nominal  dbl-index   %-of

68    15,473    10.74      (1.60)     10.74      100%
69-70-71-72-73              [real, low point -- 8.41]
74    18,284      9.47      (2.00)     12.61          
75    18,313      9.11      (2.10)     12.61
76    18,945      9.44      (2.30)     13.04        72%
77                                                               [8.86]
78     20,422     9.49      (2.65)      14.11
79     20,696     9.33      (2.90)      14.32
80     20,236     8.78      (3.10)      14.00     
81     20,112     8.61      (3.35)      13.89        62%
82-83-84-85-86-87-88-89                          [6.31]
90     24,000     6.79      (3.80)      16.56  
91     23,540     7.29      (4.25)      16.24        44%
92-93-94-95                                                [6.51]
96     25,887     7.07      (4.75)      17.85
97     26,884     7.49      (5.15)      19.02        39%
98-99-00-01-02-03-04-05-06                      [5.97]
07     29,075     6.59      (5.85)       20.09
08     28,166     7.10      (6.55)       19.45
09     27,819     7.89      (7.25)       19.42        40%
10-11-12                                                      [7.37]  

13     28,829     7.25      (7.25)       19.32        38%
 * * * * * *  

An added thought: By the year 2013 some could speculate that a $20.20/hr minimum wage might not be a realistic expectation evidenced by double indexing alone because the fabric of the economy might have changed so radically over 45 years.  Might be an outside possibility, but, LBJ's 1968 minimum wage would have morphed to more than $14/hr with double indexing by only 1978.  Can anyone explain how the economic fabric might have changed so radically in a mere 10 years?

Saturday, February 4, 2012

DIRECT AID TO ISRAEL SINCE 1970 (millions of dollars)

DIRECT AID TO ISRAEL SINCE 1970 (millions of dollars)
Year------ Nominal------- Adjusted-------------------- Total

1970---------- 93.6--------- 530.00
1971--------- 643.3------- 3,489.70
1972--------- 430.9------- 2,264.00
1973--------- 492.8------- 2,438.47
1974------- 2,621.3----- 11,681.53
1975--------- 778.0------- 3,177.07
1976------- 2,337.7------- 9,026.23
1977------- 1,762.5------- 6,389.79
1978------- 1,822.6------- 6,141.49
1979------- 4,888.0------ 14,791.92-------------- 59,930.02
1980------- 2,121.0------- 5,655.14
1981------- 2,413.4------- 5,833.05
1982------- 2,250.5------- 5,123.66
1983------- 2,505.6------- 5,526.91
1984------- 2,631.6------- 5,564.61
1985------- 3,376.7 ------ 6,894.62
1986------- 3,663.5------- 7,343.71
1987------- 3040.2-------- 5,879.68
1988------- 3,043.4------- 5,885.87
1989------- 3,045.6------- 5,656.11-------------- 59,363.36
1990------- 3,034.9------- 5,377.16
1991------- 3,712.3------- 5,988.20
1992------- 3,100.0------- 4,854.38
1993------- 3,103.4------- 4,178.46
1994------- 3,097.2------- 4,591.46
1995------- 3,102.4------- 4,472.42
1996------- 3,144.0------- 4,402.40
1997------- 3,132.1------- 4,287.37
1998------- 3,080.0------- 4,050.36
1999------- 3,010.0------- 3,969.37-------------- 46,171.58
2000------ 4,131.85------- 5,144.00
2001------ 2,876.05------- 3,569.88
2002------ 2,850.65------- 3,481.31
2003------ 3,745.15------- 4,471.79
2004------ 2,867.25------- 3,334.75
2005------ 2,612.15------- 2,938.50
2006------ 2,534.5--------- 2,762.05
2007------ 2,500.2--------- 2,649.75
2008------ 2,423.9--------- 2,474.59
2009------ 2,550.0--------- 2,611.82-------------- 33,438.44

Friday, December 31, 2010

TSA opposite gender pat-down: mandatory sexual assault to fly -- must complete process once begun!


The HHMD TSO is responsible for HHMD screening and pat-down inspections in accordance with the Screening Checkpoint SOP. All HHMD and pat-down searches must be conducted by TSOs of the same gender as the individual presents him or herself to be. Extraordinary circumstances may occur where a TSO of the same gender is not available, including staffing shortage emergencies at any airport or limited staffing at category II, III, and IV airports. Under these circumstances, TSOs of the opposite gender may be allowed to screen individuals in accordance with the provisions of Chapter 4.3.14 of this SOP. During opposite gender screening an STSO or LTSO, if possible, should be present. This rule applies to all references of same gender screening in the Screening Checkpoint SOP.


Revision: 3
Date: May 28, 2008
Implementation Date: June 30, 2008 Screening Management SOP

Extraordinary circumstances may occur where a TSO of the same gender as the individual being screened (the gender of an individual is determined by who he or she presents themselves to be) is not available to complete HHMD and/or pat-down screening procedures (for example, staffing shortage emergencies at any airport or limited staffing at Category II, III, and IV airports). Under these staffing shortage emergencies, screening procedures for individuals of the opposite gender, as provided for in this Section, are authorized and STSOs must apply the following procedures.

A. The following notifications must be made within 24 hours of each new staffing shortage event:
1) The STSO must notify the FSD, specifying the anticipated duration of the staffing shortage. The STSO must provide subsequent updates to the FSD if the reported duration is exceeded.
2) The STSO must maintain a count of the number of passengers affected during the staffing shortage and report these numbers to the FSD after the shortage is resolved. No personal or identifying information must be taken from the passenger for purposes of this report. For example, “three female passengers underwent opposite gender screening at Airport X” is an adequate count; however, including the names of the three female passengers in the count would be inappropriate. [my note: Do Touch; Don't Tell]
3) The FSD must in turn notify the Area Director, who must monitor such reports and consider how the patterns of staffing shortages, if any, can be addressed. The Area Director or his or her designee must notify the Office of Civil Rights of the staffing shortage and provide a copy of the report indicating the number of passengers subjected to opposite gender screening at each affected airport.

B. The STSO must ensure that the following notice is provided to an individual of the opposite gender before the individual enters the WTMD:
1) A TSO of the same gender as the individual presents him or herself to be is not available.
2) A TSO of the opposite gender will be required to complete the screening process, which may include physical contact between the TSO and the individual.
3) An LTSO or STSO, if possible, will be present.
4) Once the individual enters the WTMD, the individual must complete the screening process.

[I repeat: "
4) Once the individual enters the WTMD, the individual must complete the screening process." Sorry high school girl!]

Sunday, September 14, 2008

LINKS to Best Inequality (GREAT WAGE DEPRESSION!) Graphs I Have Seen

Links to the best (so-called) "inequality" (try "Great Wage Depression" to be catch the catastrophic depth) graphs I've ever seen.     (go to p.5)

And keep in mind that MEDIAN household income grew 14% from 1968 to present -- as per capita GDP doubled – ONLY because more persons worked more hours per household.

Distribution of Average Income Growth During Expansions 

Saturday, September 13, 2008

My More Complete Profile

I am a taxi-cabist -- or was for about 30 years, starting in the Bronx (car service or gypsy), mostly Chicago (very boring but safer -- until it starved me out) and finally San Francisco (until my back went out, this time).

For the first half of my working life I assumed that the world made a place for me economically. I started to question that as Chicago allowed one 30 cent increase in the taxi meter over a 16 year period, at which 1990 mid-point they began cutting the business seemingly in half (subways to both airports, unlimited limos and free trolleys between downtown hotspots) while adding 40% (!) more cabs.

I always assumed I'd have little to contribution to make in economics on the assumption you needed a Ph.D. for starters (like the physical sciences). About 7 years ago I accidentally delved into the income distribution numbers (after reading something instructive from Paul Krugman) to find out -- Achh! -- a quarter of the workforce is earning less than the minimum wage of 1968 -- the minimum wage was on its way to shrinking to almost half the 1968 min while average income doubled -- the fed poverty line is based on triple an emergency diet's cost and everybody reports it as if it had anything to do with reality?! Achh!

Since I was 17 (1961), with 15 years off in NYC's badlands, I read the political books, mags and watched the talking heads -- and never heard a whisper of these stories which should be taken as our greatest national emergencies. (Perhaps reminds of the frog that got thrown in a pot of cold water and did not sense it heating up to boiling -- nobody noticed the gradual happening?)
About 40,000 emails later all I read is about inequality -- don't know what I had to do with that. The Legislatively (re)impose a fair labor market piece has been emailed to about 1600, majority journalists, so far -- at least a couple hundred to go. It was sparked by reading Thomas Palley saying: "...there remains an unsolved policy challenge of how to fairly distribute income at full employment without triggering inflation."

No possible way. Inflation amounts to our chosen method (as with creditors and debtors) of redistributing income share.

Here was a big -- biggest brain -- labor guy who had obviously never thought through any particular process by which lost income share might be restored. If Palley hasn't, that means no other progressive pro hasn't either -- Achh! I'm hoping that showing around that this is a finite problem with definable borders that can be subject to finite sensible (boilerplate -- nothing fancy) solutions (by a high school educated cab driver yet) that others will feel obligated to also have in hand some kind of finite set of overall solutions to the very finite problem (12.5% income share shift) of inequality.

I think the only reason I came up with some kind of overall solutions when others much more schooled did not is that I am so much more hooked up to the problem on the reptilian level: I am desperately motivated to again (like in the 60s and 70s) be able to find work at a fair wage (Chicago cab driving now pays about half what it paid when I started in 1980) and also to be able to find affordable housing, etc., etc).

Another, trickier barrier to solutions coming from the pros may come on their reptilian level: the way boys instinctively cooperate while on the hunt: every boy keeps in mind what every other boy might be thinking or reacting and THIS IS NOT THE TIME to come up with new ideas. IOW, send a bunch of boys out on the hunt for new ideas and by definition they will never come back with any (alone in the library at 3AM, geek econ boys still think they are ON the hunt -- not preparing). And yes (I have seen this on other topics too), girls are much better at understanding their ability to propose a new idea if it makes sense in the abstract sense and gradually work it in no matter what all the other girls and boys are thinking now.

Maybe if the DeLongs and Bakers and Reichs of the world were presented with the inequality problems of the USA under a different country name where they thought they did not know anything about the politics or the current discussion -- sort of like Microsoft presenting Vista under another name -- maybe then they would come up with the most obvious abstract solution to the unbalanced power of the USA labor market which is surely sector-wide labor agreements (the kind of thing you wish you had thought of by yourself -- and almost wonder why you didn't).

Maybe, my next email out -- whenever that may be -- I will consciously raise the question of why any and all econ brains have not presented some kind of overall answer of their own; they are all surely capable of developing at least one set -- should be like a fun contest (if even I, cabbie can have an entry). Not Obama's $1/hr below LBJ's minimum wage or the Dem's scrape the bottom of the 1930s barrel card check -- but a full income share restore plan.
I'm pretty good at getting over reptilian barriers. My first big success at it was getting more new customers than any other paper boy on my New York Post paper route in 1960. Maybe selling at least the need for inequality solutions on the scale of the problem will be my second great success. :-)

Sunday, August 10, 2008

4% direct inflation by doubling the minimum wage to 15/hr

Jumping to a federal minimum wage from $7.25/hr to $15/hr would add less than 4% direct inflation.

$3.87/hr (average raise) X 2000 hours (full work year) = $7740 annual raise for 70 million workers (half the workforce -- $15/hr is the median wage) = $541.8 billion.  I'll ignore 3.5 million at the minimum wage (getting a full raise) to keep the eighth-grade math simple.  Divide 2012 GDP of $15.8 trillion by $541.8 billion and we get 3.4%. 

"Since 1973, productivity has grown roughly 80 percent while median hourly compensation improved by roughly 11 percent."