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.
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 http://www.nytimes.com/2014/10/28/business/international/living-wages-served-in-denmark-fast-food-restaurants.html?_r=0
”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.
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FROM A CONVERSATION I HAD ON "OPEN THREAD" AT ANGRY BEAR:
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: http://angrybearblog.com/2014/11/open-thread-nov-7-2014.html#comments
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.



ADDENDUM

double-indexed is for inflation and per capita income growth:   

yr  per capita    real     nominal  dbl-index   %-of
(2013 dollars)

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)         9.42        40%
10-11-12                                          [7.37]  

13     28,829     7.25       (7.25)       19.32        38%