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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Remember who passed you the ball

Legendary college basketball coach Dean Smith preached to his players who scored to acknowledge the player that passed them the ball. Think about why that is important in a team game.

It can also apply to everyday life. So, at this holiday time, let’s acknowledge those who pass us the ball. Or, we could honor them by paying their kindness or help forward. Here are a few random thoughts.

Let’s start with teachers, who do not get paid near enough to do the many things they have to do. Parents should not expect perfection, but hope they have teachers who care and can reach the hearts and minds of their students. They deserve thanks.

Let’s move on to healthcare workers who tend to the basic need of patients whether it is at a hospital or long term care facility. They are not paid a King’s ransom to put up with people’s s**t, literarally and figuratively. Yes, we want our loved ones taken care of, but we should put what these folks do in perspective and offer them some appreciation.

Wait staff in restaurants are not on any highest paid lists. No question, we should want good service in a restaurant, as we are spending our hard earned monies. Being a waitress or waiter is hard work, especially when someone does not show-up and people have to cover for them. But, two golden things might help us all – that golden rule is one, while the other is honey. Treating service people with dignity and as a person, will improve your service.

I picked these examples as we seem to live in a world where people are more demanding and less kind to service providers. Of course, we should want good service, yet we could do ourselves and others a favor to understand the context. Acknowledge those passing the ball. It would be a nice birthday present to the guy who said that golden rule thing.

It is time to govern

Now that the elections are over, it is time to put away the rhetoric and focus on governance. This used to be how it was done, until we segmented the news into various markets. The past twenty years or so, we seem to govern off the campaign rhetoric rather than facts and collaboration has become a dirty word.

As an Independent voter, who has been a member of both parties, the governing off rhetoric and lack of collaboration need to stop. Neither side owns all the good ideas and both sides have some bad ones. And, we need to focus on the underlying truths and facts rather than tweets and who wins a public relations battle over an issue. Process matters – when politicians deviate from process, it is for political reasons.

In this spirit, here are the issues that this voter thinks we should focus on. Many voters have voiced agreement on some of these, but some issues just don’t get due attention.

– we should stabilize and shore up the ACA which most Americans favor: funding commitments to insurers will stabilize premiums, as will expanding Medicaid and considering the expansion of Medicare down to age 55, 60 or 62.

– we should ditch the harmful tariffs and work with our allies and the WTO to pressure China to stop the intellectual capital theft. Tariffs hurt consumers and producers, especially our farmers.

– we should address infrastructure needs which are many, doing so as we have done in the past with a blend of business, venture capital and federal, state and local government funding.

– we should recognize that the two biggest threats to our planet per the World Economic Forum are our water crisis and climate change, which exacerbates the first issue: strides have been made, but we need to reassume our global leadership role on climate change and focus on measures to address both.

– we should add more governance around gun control issues: Gun-owners and non-gun owners have voiced agreement on measures that would help. It should be noted most gun-owners do not belong to the NRA, so the NRA’s political activism against reasonable change should be noted, but not over-emphasized.

– The deficit and debt are building to a point of huge reckoning. It has been eight years since the Simpson-Bowles Deficit Resuction Committee report was shelved. It was shelved because it recommended $2 in expense cuts to every $1 in revenue increases. It was shelved because neither party had the political courage to roll up their sleeves and make tough decisions – we cannot get there with only expense cuts or revenue increases, needing both.

– We should stop the lack of civil discourse and beating up on the media. The media’s role is vital to our democracy. Pay attention to where your news comes from. Be wary of opinion disguised as news. Tweets are not long enough to show context or subtlety and are an easy way to misinform, as a result. To this end, it is vital for our democracy to return to appropriate Congressional oversight. We are not a kingdom.

If anything, we must have our politicians work together. The crime bill the President is pushing and that passed the House is not perfect, but is a bipartisan effort. It makes steps forward. Let’s make needed improvements and get something done. And, that is what Americans want most from our politicians – stop the grandstanding and get stuff done.

 

 

What are we voting for?

So, much of the focus has rightfully been on countering the most divisive US President this Independent voter has witnessed. He has bullied, denigrated, lied and made himself the center of attention on far too many issues.

Yet, let’s look at this record he touts as his reason to give him free rein. His followers say he has done what he promised. To me, therein lie the problems.

While the economy is going well, the economic growth has lasted 9 1/2 years, the second longest in US history. We have also had over 8 years of job growth. The tax law and deregulation have helped make it a little better, but we are doing so on borrowed time with increasing debt and less governance.

We have announced the pull out of the Paris Cilmate Change accord and are an outlier in the world. The President lied to people about climate change being a hoax and has added insult by damaging our environment through enabling industrial polluters. He is borrowing time the world does not have.

The ill-conceived tariffs are bad enough, but bullying and lying to our allies far exceed the damage tariffs will do. We are harming our relationships, which are a key strength of America. We are also less trustworthy. As Trump’s former economic advisor said after telling him he lied to the Australian PM, Trump is a “professional liar.”

We have focused on immigration as a major problem, but it has been sold on fear and is not as big a problem as advertised. We have made immigrants the bogeymen and have lost sight of the impact of domestic terrorists already here. Yes, we should fix immigration, but three promising bills before this President were waylaid for political reasons.

We have allowed a President to build off Republican leadership efforts to sabatoge the Affordable Care Act making premiums higher than they otherwise would be. His party has screwed Americans to win a political argument. And, now the GOP has the unmitigated gall to say they want to protect pre-existing conditions.

We have put in place two very conservative justices, but the President forced the Senate to move away from a super majority to a simple majority. This has made it easier to get a less moderate Justice on the court. I want well-tempered jurisprudence, not partisanship. The most recent Justice lied to the Senate.

We have allowed a President to make money off the Presidency, which he has been sued over. The trial is permitted to move ahead. We have not criticized a President enough for denigrating rhe media. Trump is on record  as lying more than any other politician. Our democracy is at stake because of these two issues. He is President, not King.

Finally, civil rights are under attack with this President. His hate speech and bullying have greased the skids for white supremacists. The President is a racist and misogynist.

This is his record. And, I have not even discussed the Russian issue. I would give him kudos on discussions with North Korea and some deregulation. The tax cut helped some, but went too far and is hurting our debt. And, we have done little to better govern guns or invest in our infrastructure.

That is what I think as an Independent voter, who left the GOP over ten years ago. We need to better govern this President. He certainly is not up to the task.

 

Sunday summaries

I hope your weekend is going well. Several topics have toyed with me writing a full post, so I will resort to a brief summary of a few. In no particular order:

The royal family of Saudi Arabia has done a pretty inept job of lying to the world about what happened to Jamal Khashoggi. It is so unartful that even the US President, who is not known for truth and wants just to do transactions, is being forced to admit they must be lying. I applaud other world leaders and even more than a few US Senators for stepping up to cry foul. My guess is this will eventually lead to the fall of Crown Prince MSB as he is embarrassing the family and country and this is adds to a growing list of notorious screw-ups.

Heading north to Great Britain, there were an estimated 750,000 British folks that protested in the streets of London yesterday asking for a new Brexit vote with actual facts being disseminated. While I fully understand the rationale of those who want Brexit, from the outset, Brexit will be harmful financially to Great Britain. Many financial companies and EU headquarters have either moved or are planning to move to an EU site. Plus, Scotland and Northern Ireland continue to talk openly of votes to leave Great Britain should it occur. If that is not enough, it is believed that Vladimir Putin has had a hand in the disinformation as he did with the 2016 and current 2018 elections in the US.

Returning to the US, candidates of my old Republican Party are taking a lot of heat over their positions on healthcare over the years. They should. Not only has this party not tried to improve and stabilize the Affordable Care Act, they have sabotaged and made it worse. It should be noted politicians don’t seem to understand a lot about healthcare. Here is a letter I sent to my newspaper that will give you a sense of what has transpired.

It seems healthcare is a key issue this election. Surveys the last eighteen months have indicated the majority of Americans want the Affordable Care Act stabilized and improved. Yet, the GOP leadership has tried to repeal it and actually has sabotaged its success making premiums higher than they otherwise would have been. The Senate’s defunding by 89% of adverse selection payments to insurers, the President’s defunding of payments to insurers to help people in need with co-pays and deductibles and the fight in states like NC to not expand Medicaid have increased exchange premiums and driven more carriers out of markets. This retired actuary, benefits consultant and benefits manager believe these measures have harmed Americans and people should know this.

Finally, a story that should get even more airplay than it is relates to the voter suppression attempts by the Georgia gubernatorial candidate Brian Kemp in his role as State Secretary. Whereas an ethical person would recuse himself from overseeing elections, Kemp has been pretty blatant in his efforts to make it harder to vote. I do not like the voter ID laws, gerrymandering districts and aggressive voter suppression tactics being done in my own and other GOP led states. These are Jim Crow-like. Yes, Democrats have done similar tactics, but what is being done the last eight years has been an orchestrated effort by a group called ALEC, funded by the Koch Brothers.

I am pretty tired of this the “ends justifies the means” rhetoric. I see what can happen when people cheat. They cheat to get elected and cheat once they are there. The US President is not only enriching people who donated to his efforts, he is enriching himself by using his position to make more money. This self-dealing is actually illegal. And, when people cheat, it devalues our country and state governance.

 

 

 

Let’s rise up

A terrific singer named Andra Day provided an anthem for women, but also forward thinking men as well. It is called “I’ll rise up.” Here is the final chorus which says let’s all rise up.

“Rise like the day
I’ll rise up
In spite of the ache
I will rise a thousands times again
And we’ll rise up
Rise like the waves
We’ll rise up
In spite of the ache
We’ll rise up.”

There has been a building crescendo worldwide, but especially here in the US, to say women matter. Women are tired of being taken advantage of by sexual predators, violent and controlling partners and men in power telling them what they can do with their bodies. Women are tired of people ignoring or demeaning them when they complain or accuse a violator. Women are tired of kitchen table issues like equal pay and healthcare gettimg ignored. Women are tired of nothing being done about gun governance which takes to many of their children and themselves.

Women are tired of being kidnapped and trafficked as sex slaves or servants. And, more globally, women need to be supported for saying we are not a possession to be sold, beaten or killed and we need not go through genital mutilation to satisfy an archaic religious practice written by a men.

Now, is the time to rise up. Women are running for political office in tremendous numbers in the US. They are reacting to a misogynist bully who shows what leadership does not look like. Their global sisters are using the opportunity to make a stand.

Rise up and vote. Rise up and take a friend to vote with you. Rise up and make sure your family votes. Rise up and vote for equal rights for all, for our environment which is being destroyed and for our future which is threatened by existential crises like climate change, poverty and inequality. Rise up. It is time to make a huge statement. I am with you.

Some truths that could shape debate

Things have not always been the way they are. By itself, that should force us to ask questions. Here are a few of those truths.

– Catholic priests used to be allowed to marry. Some who did not get the memo continued to marry hundreds of years after the Vatican stopped the practice. To me, married priests would solve a major problem for the church.

– Marijuana has long been used for medicinal purposes. Prior to the 1930s movie “Reefer Madness,” it was a centuries old treatment. Now, scientific evidence supports Cannabis as very helpful with pain, seizures, anxiety and other ailments. The remaining states who do not allow at least medical Marijuana should reflect on this.

– Bigotry has to be carefully taught. Seeing the movie “Operation Finale,” about the capture of Nazi war criminal Adolph Eichmann in Argentina in 1961, it shed a spotlight on the following. Nazism was alive and well in Argentina as Juan Peron made it more than a safe haven after the war. If we do not remember our moral compass and shine a light on this bigotry, it will continue to fester. This is a key reason the US President tripping over the low bar of leadership against bigotry is so problematic. It is not right to denigrate people saying they have lesser rights than others.

– Finally, hyper-nationalism has been a recipe for problems and poor relationships among countries for multi-millennia. The world is safer and more prosperous the more it works together and trades commerce. This must be remembered as people in the position of power retrench into their own cocoons.

That is all for now. Let me know what you think or offer some other truths.