Howdy folks,
It's going on as we watch. How can we play it?
All around us, not only in the US, but overseas as well, we're witnessing (and participating in) a General Strike by workers everywhere. 'Take this job and shove it. I ain't working here no more'.
Workers have more power than they've had in decades and they're using it. Deere and Kellogg are out and on the west coast, the TV and Movie peeps narrowly avoided a strike because management caved in on every issue. At Deere, they were offered 5-6% and the workers are saying, Stuff It. I seriously believe the west coast hospital workers will walk and think of their leverage. And folks, this is only the beginning. Pilots can't strike, but they sure can get sick. Oh, and think how easy it is right now to supplement your strike pay. McDonald's is hiring at $21 per hour. This seems to me that the workers are going to win. Tough to bet against them.
The pandemic has created a perfect storm for workers and employment in general.
1. Not safe to go to work because of the virus.
2. Kids at home.
3. Tired of receiving shit wages for shit work.
4. Additional unemployment benefits [although the bs the republicans spread about exacerbating the problem has proven to be just that - BS. Indeed, the states that cut benefits early not only didn't see any reduction in help wanted signs, but it actually hurt their overall economies more than the states that maintained them due to a reduced aggregate demand.]
5. Lack of some spending - travel, dining out, concerts, movies, etc. - has allowed many households to become cash flush.
6. Perfect opportunity to change careers.
7. Virtual options for financial gain - Ebay, Market Place, OnlyFans, etc. My barber has a friend, who is buying Amazon 2nds for peanuts and reselling them.
Sokay, how to play?
Watch for the companies that figure it out and take the 'high road' vs. the ones that don't. A very easy tell, is whether there are Help Wanted signs or not. The businesses with pervasive help wanted signs are having a very tough time even staying open. How many restaurants do you know with reduced hours and menus? Which are simply raising wages and benefits and not bitching.
New industries that get it (e.g. pot. I was talking with a budista and he said, they were receiving great pay and benefits and it was the best job he'd had in years).
Short? Anyone that relies on truck drivers. Again, POT. To drive a semi, you have to have a CDL. With a CDL, you are subject to random drug testing and pot has a half life of 30 days. Hell, they're pushing to allow teenagers to drive. Feh, in my state, you've got to be 21 to buy pot.
Just a start of a discussion.
and so it goes,
peace and wear the damn mask,
rono
Comments
You’ve highlighted a lot of that. At least the spaced-out truckers will be largely replaced by automation within a decade. Sad but true. Will start with the long hauls; than as technology and confidence build, right to your grocery store’s front door.
As one who belonged to organized labor I applaud the workers standing up now. We’ll see how long it lasts though with the political climate what it is. Folks won’t work for peanuts. Not enough nurses, teachers, cops. Something has to give.
Investments? Steady as she goes. Resist the temptation to bail and move to cash. Stay diversified. I’m tilting ever so slightly more in the direction of inflation hedges - as I think this is where this all is headed. But be selective. Some areas are overbought. Human nature is to run with the leaders. That’s OK if that’s your game. I’m more of a bottom fisher. Pick up hedges that aren’t yet over-hyped. Get paid to wait.
Yes indeed. A long delayed reckoning finally starting. And without any help from the organized union "leadership".
I hope and believe that we are going to be present at the birth of what historians will someday define as a major turning point in human/industrial/capitalist relations. And long overdue.
Thank you VERY much.
OJ
Just maybe it can happen.
This will benefit not only workers now but when they retire. The Social Security Primary Insurance Amount (what you'd get if you retired at your Full Retirement Age) is based on your past earnings, adjusted to the year you can first retire (minus 2). That adjustment is determined not by inflation, but rather by the rise in average wages.
So as the quality of life for workers rises over time (the so called "American Dream"), so does the value of one's SS benefits.
https://www.ssa.gov/oact/cola/awifactors.html
I'm cautiously optimistic about consumer discretionary. Not the Tiffany's, but the Disney's. Sure, costs at places like Disneyland will rise, but as in Ford's time maybe now many people will be able to afford that vacation or that night out at Applebee's that they've been putting off. And not just because of the pandemic.
I've seen this happen to people I know.
Even in the best of times, some people can benefit from the help of an advocate simply to walk them through a benefits process. Unfortunately, and as the article makes clear, with state agencies overwhelmed and understaffed and with new programs in place, these are not the best of times. More complexity, more ways that things can go wrong.
The good old days, Derf
OJ
polite where I worked.
It's worth saying that before MI became a "right-to-work" state, the consequences for striking illegally (i.e., against a public employer) were not strictly enforced by the Employment Relations Commission or the courts for the period of time when the parties were still at the table negotiating. Nowadays, I could well imagine a different application of the law given the party in power and the polarization of the electorate. Indiana and Wisconsin, which also were strong union states, saw public employee bargaining rights and protections severely curtailed in the last 10-12 years. An effort to recall Scott Walker in WI failed and the residents of IN did nothing when Mitch Daniels, by executive order, terminated public employee rights to bargain. There has been a failure, maybe even an apathy, to prevent the erosion of the hard-won rights of labor, even though it was obvious what was happening. Michael Moore has some valuable insights on this lamentable process. I believe it was he who pointed out that the failure of all and sundry to stand up to Reagan's firing of the air-traffic controllers set the tone for the all-out attack on labor and union members we have witnessed in the past 40 years.
The Lutheran pastor Martin Niemöller's 1946 confessional poem regarding German apathy in the face of the Nazis, contains this verse:
Then they came for the trade unionists
And I did not speak out
Because I was not a trade unionist
Those of us over 70 have likely witnessed the diminution of not just union power and influence, but also the rights and benefits of those non-union workers who labor in many industries. Along with what Ben already covered, toss in a number of prominent bankruptcies and “restructurings” plus legislative mandates which have had the effect of wiping out prior defined benefit pensions - sometimes for existing employees and at other times, as in the case of Michigan’s schools, for newer employees.
The airlines, in particular have seen egregious changes in this regard - American, being just one example. Essentially, the larger carriers have out-sourced much of their domestic operation to smaller “regional” airlines - whose flights often exceed 1,000 miles. These flight crews make scanty wages and are denied the other benefits and protections of the larger carriers who’s name they fly under. (And, statistically you’re less safe on one of them).
The 401-K, IRA, etc are nice; but they were not originally conceived of as replacements for public and company pensions. I don’t have time to explain all the reasons why the latter is a better plan for most workers, but I earnestly think it is. Both types of benefits - even better of course. A point often overlooked, even by those so affected, is that without the higher wages and benefits accorded union employees, the bar is set much lower for those not in the unions. In other words, the overall competitive wage & benefit level in a given region is lower without organized labor’s influence..
Great discussion. Start with @msf and Ford raising his workers wages so they could afford to buy a Ford. Another classic was the GI Bill after WW2. It was simply a labor control device to slow the reentry of the GI's into the work force. After WW1, the GI's marched on WashDC for jobs and Uncle to call out active duty soldiers to quell the uprising. That said, what the GI Bill resulted in was an incredible investment in human capital which led the the posterity of the 50's and 60's. Both are example of Demand Side economics . . . which we need more of. Not because we're bleeding heart liberals or socialists or even nice guys. IT'S TO STIMULATE AGGREGATE DEMAND. Duh. That's what this Employment strike will result in. That's why the states that maintained the excess unemployment benefits had better economies than those that didn't. The extra bennies went to AGG Demand. And what is so brain dead, is that the republicans are so damn mean, they continually choose the wrong actions and shoot themselves in the foot.
@Ben and @oldJoe, Unions were and are a necessary evil. However, once they were founded, they became institutionalized and aren't much different today than management. Not unlike organized religion. Once established, they become more obsessed with preserving the institution than the membership.
@hank, all true about the demise of organized labor, etc. That said, a DC pension can be a good substitute for a DC pension but it has to be done right and at the beginning of employment and most often they are not. You can have decent benefits for employees and not have enormous legacy costs. My township has great benefits and no legacy costs. 403(b) with match and investment guidance and flexibility. Health care while working and health savings for retirement. It can be done, but you first have to give a shit about your employees.
We need more demand side economics. Raising the minimum wage would be perfect but it's going to have to be a grass roots movement (like a general strike) due to the inability of Washington to do anything right for the right reasons. Infrastructure? Huge. It's jobs. That's what people need and want. The reason why demand side econ is so superior to supply side is the Marginal Propensity to Consume. This is how a person saves or spends each additional dollar. Down around the bottom of the income ladder the MPC approaches 1.0. They are forced to spend (consume) every additional dollar. By consuming, they're buying stuff and then stuff has to be made. When the cost of capital is 0.0%, nothing will ever 'trickle down'.
And for every business with a Help Wanted sign in their window. PAY YOUR WORKERS MORE AND YOU WON'T HAVE THIS PROBLEM.
and so it goes,
peace and wear the damn mask,
rono
By the way Ben (me) and BenWP (not me) are two different people. BenWP posts more often than I do but whenever he is addressed as "Ben" I get notified by MFO. This is a curiosity, not an annoyance, but I think it likely that if I am notified it means that BenWP is *not* notified. He might want to know that people are talking to him.
If this board were typical of the broader population, a defined contribution pension would be adequate. Lots of well informed and smart cookies here. However, John Q. Public, on a wider scale, is quite lax at planning. Most can’t plan 6-months ahead - let alone 30-50 years out. So they are left struggling in their senior years on SS and maybe a part time job.
One feature of well run and well funded DB pensions is the almost unlimited time horizon they have to invest over. Allows for greater risk/reward over time. Individuals can’t hope to match that. Our lifetimes are too short.
Responded earlier on my phone but the throttle monsters ate my postie.
Sorry about the typo. Indeed, my point is that Defined Contribution pensions can get pretty close to Defined Benefit pensions, IFF, there is a company match, there are investment choices, folks are educated on investing and they have sufficient time to accrue. Even when you're converting the old DB to a new DC pension, you can do it humanely and don't have to be assholes. When Michigan converted their state employees some 20-25 years ago, they forced everyone under 5 years. Above that you had a choice. They had a sliding scale but it was biased towards the retirement ages (i.e. 50, 55, 60, etc.). That said, the DC replacement started with 4% from the state and they will match your 3% up to 10% total. The best option I've seen for health insurance coverage is full for active duty employees and an medical savings account for retirement (with a match and investment choices). Damnit, it can work.
As for protocols to @Ben and @BenWP, sorry. This old geezer is trying but these newfangled computers . . . '-)
and so it goes,
peace and wear the damn mask,
rono