A new word for an old problem

Wages in the US for the common worker have been stagnant for going on forty years. This disenfranchisement did not happen over just the last ten years. It is the culmination of various events and actions and not due solely to one or two causes or solvable by bumper sticker solutions. Yet, we have a new word for a major cause courtesy of the Economic Policy Institute – monopsony.

In essence, monopsony is the sister of monopoly. It is an employer who has so much clout in a region or area, it can suppress wages to its workforce. It can also move jobs away more readily be it through off-shoring, outsourcing, downsizing or relocation. This movement of jobs adds to an employer’s ability to manage wage increases. In essence, the word monopsony highlights the goal and ability of employers to chase cheap labor.

Per the EPI, much of the wage stagnation after 1970 has occurred at the low-end of the wage spectrum. An economist noted on a talk show to get an idea of what has happened, stand up and put both arms out in front of you parallel to the ground. The left one represents the bottom 90% and the right one the top 10%. Move the left one up at an angle by one inch, then move the right one up by twenty inches. That disparity illustrates what has transpired over these forty years in wage differential.

I have written before the efforts by the current President to create fear of immigration and trade deficits as the reasons for disenfranchisement in various areas over look the main two drivers – chasing cheap labor and technology improvements. Immigration is actually accretive to the economy, even illegal immigration as there are many jobs that Americans have said they don’t want.

But, if the President wants to solve an illegal immigration problem, he should begin with punishing employers who hire these workers. I have noted before about a textile company who went bankrupt and closed its doors. When career counseling people said in an auditorium full of workers that you had to have a Social Security Number to get access to benefits, 1/3 of the audience got up and left. The construction, agricultural and restaurant industries would have severe issues if these immigration wells dried up.

Yet, the two main drivers of wage stagnation and good paying jobs do not get talked about – chasing cheap labor and technology gains. An unnamed CFO said in the book “The Rich and the Rest of Us,” an employer would get by with no employees if it could. So, robotic machinery has been displacing workers for many years. And, now it is becoming even more efficient and affordable. We do much more manufacturing in the US today than in 1980, but with much fewer workers.

Yet, with these tools and possible actions available to an employer who has a monopsony in an area, good paying jobs are fewer in number. Mind you, high-tech manufacturing and similar jobs exist, but they are not in the same number with so much competition for wages. I make this last point as the disenfranchisement is real and not made up. To his credit, Trump went out and visited these areas. But, what they did not realize, he was selling on fear, over-simplifying the causes and highlighting the wrong major ones.

The disenfranchisement in the western world has a visual called the “elephant curve,” with a side view of an elephant with his trunk raised. The body of elephant is wage growth for the emerging and burgeoning international markets. The raised trunk reveals the rapid wage growth for the top 10% in the western world. The trough between the raised trunk and body, reveals the stagnation in wages in the western world.

So, immigration and global trade have an impact, but the key drivers are chasing cheap labor and technology. And, the last one will grow even faster than before. Yet, chasing cheap labor will continue to be a driver as well. It is the culmination of pounding on unions to weaken their voice. It is the active fight to keep minimum wages down over time. It is making tax changes dating back to the 1980s (and last December) that are more advantageous to the top 10%, giving them a chance to invest in technology and places to house cheaper labor. It is threatening to move jobs to gain wage limits.

Since the housing recession in 2008 and early 2009, we have seen unemployment decline and stay down. Wages have gone up some, but not near enough to track other increases in costs. We need to be discussing retraining impacted workers building off some success stories around the country. We need to renovate and repurpose deteriorated assets to create new jobs. We need to invest more in our infrastructure and jobs of the future. We need to stabilize the ability for employees, whose hours are limited, to get affordable healthcare, since employers hire more part-time and contractual employees to restrict them from joining their healthcare plans.

The disenfranchised employees and areas need a real voice who will speak to real causes, not over-stated ones. Monopsony is a hard word to say and is a hard word on these people. They deserve better than what they have been hearing.

 

 

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Environmental Punishment Agency

In spite of all of the damage being done to the United States and its relationships with allies, I have feared from the outset the damage the US President would do to the environment and our planet.

The word “Protection” no longer applies to defining the mission of the EPA. The “P” has been replaced by “Punishment.” Between the President and two industry favoring EPA directors (not to mention a transition plan climate change denier), the environment is becoming a bigger pool to pee in.

It started out with the attack on scientists who study and developed world-class data and reports on climate change. Access to these reports were removed from the government webpages and many scientists were reassigned to non-science positions which they had to take or were fired. Why? If your position is so grounded, why must you remove the other side’s arguments?

On top of rolling back numerous regulations that governed industry, several major changes also occurred:

– the compliance with the Clean Power Plan has been eliminated.

– the US is one of three countries to not support the Paris Climate Change Accord.

– the Clean Waters Act was greatly changed from a regulatory standpoint, unwinding changes made by Obama and both Bushes.

– And, this week, coal companies have greater license to let mercury and other pollutants escape (after they already made changes to comply with the 2011 requirement). The reason is the value of lives and dollar savings due to just the mercury change were less than the cost (yet that is subterfuge as the savings of lives and dollars due to other pollutants dwarfs the cost). I won’t even dignify the comment of the value of life being lost.

The legacy of this President will haunt our country and planet for a long time. Good actions are being taken in spite of this President’s efforts, but so much more could be done. I would encourage all voters, but especially young ones, to challenge all politicians about their environmental stance. This must be the issue of 2019 or we will lose momentum. To me, this is beyond horrible stewardship. It is malfeasance.

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Note to Readers: Check out Gronda’s post on the influence of ALEC on the US effort to deregulate the EPA.

Dark Monies From ALEC Associated Corporations Is Root Cause Of De-Regulation Of EPA Rules

 

Toys for us and others

This will be the first Christmas in a long while without retailer Toys R Us, who went out of business. Or, as my youngest son aptly called it when he was a younger, “Toys for us.” The “Toy Story” movies register the impact of the store on our lives.

Toys are no longer for kids and sometimes disguise themselves as what they are – useful products. A mobile phone is far more than a phone, but the “wanna new phone” marketing that occurs is estimated to cost a user $75,000 over a lifetime. Do you have to have the latest and greatest new phone? Just think, if you skip a few new phone upgrades, you reduce that number a great deal.

But, while our younger generation is accused of a more materialistic mindset, I must confess how proud I am of kids who are making statements on the need to address better gun governance and action to combat climate change. Yesterday, in Australia, tens of thousands of kids age 5 to 18 boycotted school to protest en masse for more action on climate change. While their President and lead environmental person said these kids should stay in school to learn something, I think these two men need to learn a few things.

Earlier this year, we saw kids make a huge difference in Florida when the state legislature passed a few gun governance bills in the wake of the Parkland shooting. Could the legislature have done more? Yes, but the kids forced them to act. The kids live in fear and are not burdened with lobbyist dollars and threats as are the legislators.

Toys are important as a distraction and even to make our devices more utile. Yet, these kids stepped up and made their voice heard. Given what they are protesting, it would behoove the legislators to listen. “They ain’t playing.”

Two Americans win Nobel Economics prize on Climate Change work

Per an article this morning in Reuters, “Americans William Nordhaus and Paul Romer, pioneers in adapting economic theory to take better account of environmental issues and technological progress, shared the 2018 Nobel Economics Prize on Monday.”

Romer, with New York University, and Nordhaus, with Yale, developed models on the economic impact of dealing with climate change. Reuters cited the Nobel Academy in Stockholm, “‘Their findings have significantly broadened the scope of economic analysis by constructing models that explain how the market economy interacts with nature and knowledge.'”

This news is important as Americans still provide global leadership inspite of the dearth of leadership in the White House and EPA. America is moving forward on renewable energy, but our efforts are in spite of the absence and antagonistic actions of federal leadership. Arguably, more than any other issue, voters must ask their candidates where the stand on climate change actions and protecting the environment.

It is interesting that this came today as the headline article in The Charlotte Observer is “NC Leaders share concern about climate change.” These are 60 business, advocacy, former government and university leaders who have been brought together to speak to various problems. 45 of them responded to the question of climate change and, of the 45, only two naysayed climate change – one called it a hoax, while the other said it is real, but the jury is out on man’s influence. Think about that – 43 out of 45 define the problem and offer solutions.

Per these leaders, ideas include ceasing building on lands prone to flooding. NC has had two 500 year floods in two years, the same with Houston, Texas. Miami may be inescapably lost to continued flooding due to rising seas and porous limestone. The term we must understand as well is “sunny day flooding,” which happens more and more throughout the year.

These Nobel prize winners note we have to address the problem now while the costs are more manageable and can be sustained. The best teachers are the Dutch, as they have managed sea water encroachment for years. But, the impact also includes more and intense forest fires and the faster depletion of already dear water sources.

We have major problems occurring that Washington is not talking about and, in some cases, is making it worse. We must address climate change and invest more in  renewable energy, consider better coastal and flood plain building and consider a carbon tax. We must address fresh water loss that is hastened by climate change that is affecting farmers and other Americans. And, we must address pollution by companies and the growing mountain of plastic.

There are economic models that call to mind the old Fram oil filter commercial – you can pay me now or pay me later. Now, is far cheaper. Ask your politicians more questions and vote accordingly. If they do not admit there are problems, do not vote for them.

Calm before the storm

Sitting four hours inland in North Carolina, we are in a holding pattern with Hurricane Florence. She will hit hard and large on the Carolinas coast and may linger over the eastern parts of the two states dumping a lot of water which will overwhelm the water systems. In Charlotte, we are as yet unaware what kind of storm effect we will get and may not know for a few days, but the current model shows us on the north side of the eye, exposed to winds and rain.

Best wishes for all, but especially those closer to the shore. I commend the efforts to keep us informed and get us prepared. We should all batten down the hatches, ready our homes, and leave, if needed and required. But, the recovery will be an elongated effort as it has been with previous hurricanes.

With this said, our country could be doing a lot more to address these emergencies. We could fund FEMA through the normal budget and not have to rely on event funding. A former FEMA person said we rely too heavily on an on call work force, especially when multiple disasters hit. Last year’s multiple hurricanes proved problematic and it showed, especially in Puerto Rico. There is a metaphor in Puerto Rico that still exists one year later of hundreds of unopened crates of water sitting on a runway.

We could also recognize what NOAA, Union of Concerned Scientists, United Nations and climate scientists know. Sea rise and warmer oceans due to climate change are creating more and dangerous hurricanes that hit shore from a higher vantage point. One scientist said it is like dunking a basketball off an elevated court. It is easier to do damage. This is especially true with beach erosion.

The term which will and should get more air time is “sunny day flooding.” This represents the increasing number of days that ocean tides are washing into coastal city streets. We must do more about this increasingly costly problem. Hurricanes only make this problem worse as they lay bare already weakened areas.

So, while we brace for Florence, let’s think about how we can plan even more proactively. And, please think good thoughts for those in harm’s way.

Green to go initiative in Durham, NC

Many sports fans know that Durham is the proud home to Duke University or the site of the cult sports and life lesson movie “Bull Durham” with Kevin Costner and Susan Sarandon. Some may know that Durham is one of the three cities that surround the Research Triangle Park which houses many global firms’ headquarters, marketing or research departments. But, it is now getting some good press for a grassroots initiative called “Green to Go.”

What is “Green to Go?” In short, it is a building partnership with 25 local restaurants to replace Styrofoam or plastic to-go or leftover containers with a reusable and durable plastic one. The idea is instead of throwing away a one-time product, it can be replaced by one that can be used for a 1,000 times. With islands of plastic in the ocean and spilling out of landfills, this is a much needed innovation.

How does it work? It requires a $25 membership, but let’s you check out a spill-proof container with your first order from one of the 25 participating restaurants. You simply return the cleaned container on your next order to any of the 25 participants and get a newly sanitized one. This is how the food inspectors are kept happy.

On the website link provided below, they have 507 subscribers and 1,522 measured uses of the containers. But, this is a replicable idea that will likely catch on with more notoriety. The website includes the PBS Newshour piece that I first became aware of their efforts. Please let others know about this and check it our for yourself.

https://durhamgreentogo.com/

Sunday salutations

Quiet mornings to read and reflect are a treasured interlude, particularly on Sunday. The larger newspaper permits a more elongated review of the news equipped with two large cups of coffee.

Focusing away from “he who shall not be named,” there are plenty of newsworthy items. Here are a few to digest this morning.

The new President Khan in Pakistan has won on an anti-corruption platform. He is not the first to run and win on such, yet corruption is so engrained, previous efforts have failed. Let us wish him well in his endeavors.

In England, Northhamptonshire has run out of money and the citizens are none to happy. Funding from parliament has fallen by 60% to various municipalities since 2010, so many towns are in a heap of hurt. Brexit, soft or hard, will not help matters as economic projections post-Brexit are not favorable. As is the case in the US, a country cannot shrink to greatness.

It was noted that the US Secretary of Defense Jim Mattis is sending a Naval hospital ship to South America. The purpose is to help the vast overflow of medical needs in Venezuela. This is good news, but puzzles me why Mattis is the the one making the announcement. Is it being done on the down-low to avoid a certain person’s base from finding out, so Mattis could take any heat or is Mattis just acting at odds from the man in the White House and doing the right thing?

One of my sons and I saw “Black Klansman” yesterday. It was an excellent movie about a true story of a Black undercover cop who infiltrated the KKK back in the 1970s. He worked with a White Jewish cop who attended the meetings. The movie includes an actor playing Grand Wizard David Duke, who makes a real life appearance as the movie concludes with what is happening today.

Have a great Sunday. Salutations.