Class Warfare Blog

May 20, 2017

An Argument for a Minimum Wage

There have been myriad studies about the impact of having a minimum wage. Some indicate that there is no particularly strong linkage between creating a higher wage for low wage workers and some indicate that a rise in the min wage causes unemployment.

The politicians arguing against a min wage use a very simplified argument: namely that if employers have to pay their workers more, they will only be able to hire so many workers, mostly fewer. This is way too simple in thinking this. For one, if people are paid more money, they then spend more money (what goes around, comes around) which is good for business. There are many more facets to this issue.

If labor costs go up, and they have myriad times due to labor contracts, etc. how, oh how, do companies cope? (Yes, I am being sarcastic.) The amount of money that goes to labor in any company is not a fixed amount or even a fixed percentage of the company’s budget. There are many, many ways that those increased labor costs can be offset. For one, you can raise prices for the goods created. You could decrease profits. You could find other ways to reduce operating costs (reduce energy costs by going solar, etc.).

Knee jerk responses to these actions abound, of course. “If we raise prices, we will reduce sales!” Really? Companies never raise prices, then? C’mon, get real. Just raising prices alone, of course, is the lazy way to deal with increased labor costs; a combination of actions would be better.

Most of these minimum wage discussions are shallow and politically motivated. Basically, the opponents of min wage increases give minimal arguments and only add to them if we don’t accept (aka we reject vehemently) their overly simplistic argument.

Let me explain a real reason for min wage increases. Minimum wage increases are justified for the simple reason is that business interests (aka the plutocrats) have conspired to suppress wages for a long, long time. This involves bribing politicians to undermine union powers and privileges, delaying minimum wage increases, changing the laws in favor of employers over employees, etc. They have been particularly effective over the past 40 years (see the chart below as to the effectiveness of wage suppression over the past 40 years). The only power source of ordinary people to oppose these powerful business interests is government. The cabal wants wages low (too low) and so government must set a floor on wages. It is not simple but at least that is the political dynamic.

If you want to see this playing out right now, consider the current stance of the GOP. The GOP has been the champion of local rights for a long time. Education, for example, should not be a federal issue, but should reside in the states, with the states deferring to local communities and their school boards. So, what has been the GOP response to cities who have enacted their own min wage increases? GOP dominated states are passing laws to roll back those democratically achieved minimum wage increases and to bar such local increases in the future. Local control doesn’t mean a fig when the GOP’s paymasters issue directives (You will keep wages down, or else).

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April 23, 2017

A Vision of Rational Decision Making Denied

In a comment on another site, I stated that I had an overarching goal for my teaching “career,” which was the promotion of rational decision making and that I retired from that profession a defeated man. In my last post I commented that “Currently scientists are seeing that we tend to think better in groups, that no individual has all of the puzzle pieces but in communication with others, clusters of puzzle pieces get formed, and then clusters combine to make larger clusters.” We are social animals; we work better in groups. Now we find that we even think better in groups.

My work on rational decision making lead me to this same conclusion. You see, we invested in “interest-based decision making.” This came about as an investigation of less confrontational collective bargaining processes, but we realized it applied to all collective decisions.

I will not bore you with regard to the details of this process but I will point out two of the keystones. The first is that at the beginning of every decision-making process was a complete investigation of “the problem.” Before a problem could be addressed, everyone needed to know what it was and understand it, so this took up much of the “decision-making time.” It also paid immediate benefits. Groups did come together to “address an issue” only to find out that when they tried to clarify it, all involved decided it was not a problem. In one case labor and management came together to solve a problem only to find out that for management, there was no problem, that the problem that labor had to resolve. Management offered support but felt it was not a “stakeholder” in the issue, so should not be making any decisions about it. Labor concurred.

The second keystone was before solutions to identified problems were explored, the “interests” of all of the people involved had to be shared. These were the conditions and reasons that any solution had to satisfy to be viable. Typically, all solutions had to be affordable, had to not break laws, etc. But when exploring the interests of a group, interests like “being seen to be playing fair” arose, as did “fulfilling fiduciary responsibilities,” and “displaying competence.” This part of the process was called “putting the why before the what.” This was especially important for people just “wanting to have a seat at the table,” to be involved. Many people want to be involved, but if the do not have any interests a solution needs to satisfy, they aren’t a stakeholder and do not need to be involved.

This process seems, from the outside, to be cumbersome and it can be but is actually very efficient over time. Over time, the interests of groups become clear and known. People show up to interactions having clarified their idea and have brought any data they think pertinent (usually sharing it ahead of time) as to what problems are so that phase can be addressed rapidly. The big plus is that the solutions that come out of this process are just better. they are more accepted by the decision-making group, who share their acceptance widely and that gets people on board and buying in more rapidly. And better solutions need less tweaking and last longer, a definite bonus. Plus, it was easier to recognize good solutions, because to get that label, an idea had to solve the problem and meet all of the interests of the parties involved.

One example of such a solution is that my last employer, a $150 million a year enterprise, never negotiated salaries with labor. The reason? Each labor segment of the enterprise received a percentage of the income of the business. If revenue went up, everyone got raises. If revenue went down, salaries could go down, but in reality, people were motivated to find cost savings so that did not happen but the process was in place if it had to. As a labor negotiator, I was shocked that labor gave up negotiating salary because that was our “big hammer.” We would always save salaries until last and negotiate working conditions, et. al., first. If we were denied any progress in the early stages, the wage demands would get larger and firmer. This was Negotiating 101. But here I saw management and labor jointly trying to solve problems without the “big hammer” hanging over their heads, because they honestly wanted to be good partners and be part of the solutions, not part of the problems. Go figure.

Contrast this situation with the way we “solve problems” politically. We start with a solution. This is often a proposal or a bill. Then we “score the bill,” that is try to figure out what the costs associated with the “solution” are. Then we assess the political viability of the bill. Will there be enough votes to pass it? Will the President sign it? Is a veto override possible?

At no point is there any effort made in sharing the problem or clarifying it for a wider audience. Instead, some simple homily is offered. Often the titles of the bills are telling, “The American Patriot Act” and “The Affordable Car Act,” or “No Child Left Behind.” And that is it. A great deal of scurrying around to get “support” from this group or that is done, but next a vote is taken (or not).

This is amazingly obfuscatory. Historically, communication was poor, so we assumed that our legislators had our best interests at heart and that they understood what the problem and the solution were and would do the right thing. Right. We quickly saw that political deal making and pandering and profiteering held more sway than some “having our best interests at heart.” But we still go about this in the same fashion even though mass communication is firmly embedded in our society.

Imagine that for any problem that legislation might be offered to solve, there were a period in which the problem had to be clarified and explained clearly and publicly. Plus the interests of all parties involved would have to be stated. If some private group, like the AMA wanted to chime in, it would have to state its interests. If that list did not include some obvious interests we know they held, then it would be clear to one and all that that group had “hidden agendas.” Those issues could then enter the public debate. (Anyone who thinks that the AMA does not have an agenda to protect the employment rights of certified doctors and prevent any doctor not so certified from working, needs to think again. All professional societies have these interests.) Then after these two phases have occurred a work group would be constituted to write the legislation. (We think better together than apart.) We would not have dueling bills, we would have one. That no one party would get all that they desire is probably the norm. That better solutions would be had than just taking the ideas of one or two people and ramming them through, would also be the norm.

Part of the listing of interests, of course, would be a listing of the “campaign contributions” from all parties affected by the legislation to the legislators.

I guess you can see why I feel defeated. I have participated in both processes. One builds relationships, increases job satisfaction amongst decision makers, and creates better solutions that last longer. The other … doesn’t. It is not as if we do not know how.

March 8, 2017

GOP Plans to Repeal Dodd-Frank Legislation

Why do we need legislation that prevents big banks from undermining the whole world’s economy with overly risky investments? We can trust them. They are our friends.

Granted the Dodd-Frank legislation didn’t go nearly far enough (millions of dollars per day were spent lobbying against the law in the first place and then against its implementation after it was passed). The Glass-Steagall law should have been re-enacted verbatim, plus a whole lot more, but “burdensome regulation” is undermining progress in this country (whine, whine, sniff). This is why the big banks circumvented the existing regulations, corrupted regulators, and invented unregulated shadow banking in the first place.

We will only be free when big banks can wreak havoc as much as they desire … and, of course, our government bails them out every 6-8 years when it all crashes into ruin. Heck, the last time only cost us $2,000,000,000,000 (yes, that is two trillion dollars) plus several trillion more in lost property values, but that only affected ordinary citizens (they got no bailout, don’t you know).

At this point, I am starting to root for the GOP’s bad ideas. The party has so desperately wanted to do all of these things for years! And they are going to own the repercussions of each and every one of them.

November 12, 2016

Let the Bullshit Continue

Filed under: History,Politics — Steve Ruis @ 9:04 am
Tags: , , , , ,

In an editorial in today’s New York Times, David Leonhart explored how the Democrats managed to lose the recent elections. One comment he made was illustrative of the cluelessness of the pontificating classes. He said “The soul-searching about the Democrats’ loss of the white working class is just beginning, as it should.”

Hello?

The Democrats didn’t “lose” the working classes, they dumped them, deliberately and out in the open. I have written extensively, for example, about how the union movement in Canada is strong and healthy whereas in the U.S. it is stuttering and failing. The main reason for this difference is that the efforts of conservatives to undermine workers rights and unions were relatively unopposed by unions themselves and to a lack of Democratic Party support for the union movement. The Dems stopped supporting working people and their unions quite some time ago in favor of a new base pillar: professionals.

So, if the Dems are wondering why working people are no longer supporting them, they need only to look in a mirror.

And Trump? His political fate depends on whether the working classes lives get better or not, plain and simple. If he takes care of the working classes, which no one else, save Bernie Sanders, seems inclined to do, he will get re-elected in four years. (The operative question will be: “Just ask yourself: are you better off than you were four years ago?”)

September 12, 2016

Essential Bill Moyers

In a cogent essay, Bill Moyers proves again why he is the Dean of American Journalists. He is able to frame our current situation better than anyone else. Please read “We, the Plutocrats vs. We, the People: Saving the Soul of Democracy.”

As you will see it has nothing to do with conservatives v. liberals, or Republicans v. Democrats, or any of the other things we focus on. It is simply the case of too much money in the hands of too few people who claim that “they earned it” when that is not really the case.

 

August 9, 2016

Money and Politics

Filed under: Economics,Politics — Steve Ruis @ 8:35 am
Tags: , , , ,

The Supreme Court has made a number of surprising decisions regarding money in our political processes (money is a form of free speech, Citizen’s United aka “corporations have more free speech than you do,” etc.) most of which seem to indicate that the justices subscribe to the opinion of mainstream social scientists that money has negligible impact on elections.

A new study has blown holes in this idea and that common sense (money affects politics more than anything else) prevails.

If this interests you, this is a must read article: Stark New Evidence on How Money Shapes America’s Elections

June 24, 2016

Structural Changes are Needed

We need to re-form our political system. How we do that is questionable, whether we start from the rubble of our old political culture of we use it as a ladder to reach higher is entirely up to us. I suggest that we may need to start with baby steps. Here are a few I recommend

Redistricting by Neutral Means Whether by nonpartisan commissions or computers we need to have a way to redistrict our governments by a process other than letting the politicians do it, aka letting the foxes guard the hen house. Gerrymandering should be a thing of the past. The only thing the partisan politicians need to argue over is the criteria to be used every ten years to do the redistricting.

Separate Politicians from the Money Taking politicians out of the fund raising process makes quid pro quo money donations marginally more difficult. Since our Congress people spend more time on the phone asking for money from people than they do on almost all of their other duties combined, this is needed for legislative efficiency if nothing else. Politicians or candidates for office shouldn’t be involved in the money coming into their campaigns, period. Let surrogates do it.

Limit Donations to Constituents Candidates for political office should not be accepting money from people they will not represent. What possible service could a congressman provide to someone who lives outside of their district? Even if it were not a quid pro quo bribe, serving an out-of-district “donor” takes time and effort away from serving his actual constituents. The same goes for initiatives and policy referenda. If you are not affected by the policy in question, you should not be giving money to its supporters or detractors. Speech is free, so fly into the district in question and rent a hall and speak to your heart’s content, but no money or other structural support should be allowed.

Others? What other “baby steps” would you recommend we do?

 

May 8, 2016

Why Both the GOP and Dem Establishments Do Not Want Bernie to be President

The whole purpose of the major political parties now is wrapped up in a quest for power. The power is not wanted because they have ends in mind, they just want power. That power for the last 40 years has been primarily to execute the will of the “masters of mankind” as Adam Smith put it.

Since the plutocrats and corporations have pushed the cost of elections so high, enormous amounts of money are needed to run a successful campaign for political office. So the plutocrats get to control who runs by providing funding them … or not. Then once someone is elected, they are beholden for millions upon millions of dollars to those donors, another form of control. Then there is the promise of donations for the re-election campaign…. I think you get the idea.

But Bernie Sanders is not playing their game. Bernie has not taken their money and, because of that, he is not controlled by them, so he is a threat. It would not be a disaster for them were he to be elected President but it would slow the implementation of the plutocrat’s plans. Blocking anything Bernie wanted to do as President would be relatively inexpensive, but it would mean a delay that would not further the plutocrats plans. So, it is more expeditious to not have Bernie win and a few million here and a few million there and a bit of pundit hand wring, a whisper of this and that Senator Sander’s campaign is close to being marginalized.

Did you not find it interesting that the Democratic National Committee had already geared up to make Hillary Clinton its nominee before they knew who was running, before they knew who the rank and file Democrats preferred? It is simply that Hillary Clinton had already been vetted and paid for and would make a good candidate for the 0.1% who would be paying for her to run. It wasn’t necessary that she win, of course, because to make sure all of the 0.1%’s ducks were in a row, as the saying goes, both candidates of the major parties were supposed to be bought and paid for. Why take the chance of having someone you do not want having even a chance of winning.

It is Mr. Trump, a trump card in the political deck, who is upsetting the “normal process.” They fear that, like Franklin Roosevelt, Mr. Trump may also be a “traitor to his class.”

May 4, 2016

Brilliant! Finally, A Workable Campaign Finance Innovation!

A new idea has breathed some life into the campaign finance reform debate. Rep. David Jolly (R-FL), has introduced a bill that would ban federal officeholders from soliciting political donations.

Brilliant!

The only reason our Congressmen spend half of their working hours, or more, on the phone asking for money or at fundraisers asking for money, is to connect the quid with the quo. This idea is an excellent one. Fundraising is important, but others should do it.

The reasons are splendid. For one, this takes our elected officials and candidates out of the corruption loop. Yes, corruption is still possible but this would open up the ability of our officials to vote against their donor’s interests, at least on occasion.

Second, it would double the freaking time our elected officials have to do their damned jobs. Can you imagine how productive you would be at your job if you were required to spend half of your work hours in pointless busywork? Your productivity would plummet!

Put our elected officials back to work on our business. Bar them from directly soliciting campaign funds!

Absolutely brilliant!

 

February 24, 2016

Denmark? No, Costa Rica!

All the hoopla surrounding the current Presidential political contest may obscure the fact that our electoral system is run by the political parties themselves. These primaries aren’t a governmental function, they are run by Democratic Party officials, Republican Party officials, and officials of any other party which can show a modicum of performance in an election.

You may also have missed the fact that today’s political parties are mere shells of their past selves. Just look at the current leaders (Preibus and Schultz), both are lightweights. Really, the candidates are running the show now. If the “party” does something the candidates don’t like, it changes in the candidate’s favor. Even Donald Trump alone can change GOP election policy. He is currently turning their “pledge” to not run on a third party ticket or as a write-in candidate into a weapon he is using for more leverage against the party itself. The Democratic Party tried to grease the skids for Hillary Clinton by scheduling few debates at awkward times (advantage to the front runner), but when Bernie Saunders waged a credible campaign and drew blood, the campaigns got together and scheduled additional debates. Hello? Dems? No comment from the party.

Political parties have been defanged because they lost control of the political money. Until just recently, the parties could raise as much money and even more than the candidates did, so they had control over the purse strings. Now with the advent of PACs and Super PACs, the money is back in the control of the candidates (anybody who doesn’t think the candidates control, albeit loosely, the money in those “outside” organizations needs to get their political IQ tested) and the parties can go take a flying leap for all they care. All the party needs supply is an umbrella identification to run under, “I am a Democrat or I am a Republican,” and you don’t even have to be registered to vote as such, it is just a declaration.

So, I now bring you to Candidate Sanders reference that “We should look to countries like Denmark….” which drew so much flak. Denmark is worth emulating, but the country we should emulate is Costa Rica. When the Costa Ricans created their current governmental structure, they based it upon ours, which is flattering. And, they fixed one of the biggest flaws in our system by instituting a fourth branch of government. Their fourth branch, a nonpartisan branch, structures and administers elections. They schedule everything, including the debates and run them, then they organize and supervise the elections. So, you won’t hear anything about “hanging chads” from Costa Rica.

Imagine our elections being run by the League of Women Voters (disclaimer—former member). Imagine officials running for office in the fourth branch on their record of fairness and efficiency and how well they have held up democratic ideals. <sigh>

Instead we have asked all of the foxes to guard the hen house. How stupid can we be?

What the hell, I think we should emulate both Denmark and Costa Rica! Join or die!

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