| This is Bloomberg Opinion Today, a net exporter of Bloomberg Opinion's opinions. On Sundays, we look at the major themes of the week past and how they will define the week ahead. Sign up for the daily newsletter here. Let's say, hypothetically, you have a job at which you can earn more than $200,000 a year with overtime. It has union security, pension benefits and work rules. And your employer is offering a raise north of 50%. What would you do? Say yes and be thankful that your household income is in America's top 10%? Reasonably hold out for a little bit more, taking advantage of a tight job market before inflation further cools? Or, not so hypothetically, would you threaten the nation with economic apocalypse: - "Guys who sell cars can't sell cars because the cars ain't coming in off the ships. They get laid off."
- "Malls start closing down. They can't get the goods from China ... They go out of business."
- "Construction workers get laid off because the materials aren't coming in."
- "I will cripple you, and you have no idea what that means."
- "Nice country you've got there, it'd be a shame if something happened to it."
Okay, okay, okay — I made up that last one. But I think the point was implied in the colorful language of Harold Daggett, president of the International Longshoremen's Association. And his extortionate approach to labor relations paid off! The union and port operators reached a tentative agreement on a 62% wage increase over six years and to put off any walkout from East Coast ports until mid-January. The fun's not over, though, as the two sides still need to negotiate on workplace automation. Daggett's opening gambit was true to character: "Machines got to stop." Sorry, Harold, the machines ain't gonna stop — and if they don't take away your job, AI will.  "The union wants to freeze in time the tools that are available to port operators at the expense of productivity gains that allow for the big worker pay raise without driving up the costs for moving goods through East Coast ports," Thomas Black writes. He understands that the age of human obsolescence is coming: "Port workers don't unload cargo by hand. Ditches are no longer dug with picks and shovels. Fields aren't plowed with teams of oxen. It's safe to say that blocking technology is squarely on the wrong side of history." So, apparently, is Joe Biden. "The president had the authority, under the Taft-Hartley Act, to order workers back on the job and avoid economic disruptions right before the election. But his administration took that option off the table preemptively," Matthew Yglesias writes. "This is typical of Biden's approach. He's iced out charter schools, been slow to bring federal workers back to their offices, pushed for overstaffing of freight trains, and declared the Japanese ownership of a US steel company a threat to national security. All these decisions were gestures of loyalty to unions and union workers that went against the public interest." Or really, even, in his party's interest. "Donald Trump appears to be enjoying strong support from union members," Matt writes. "This is not because Trump has suddenly become a stalwart friend to organized labor. Rather, it is a reflection of broader changes in the electorate ... unions that are primarily composed of non-college White men are now primarily composed of Republicans." The ILA got the big headlines, but Boeing's got the big headache: its machinists have been on strike for three weeks. "The company is in a dire financial position, burning through billions of dollars of cash and teetering at the edge of having its credit rating cut to junk," Thomas writes. "No doubt a hefty pay raise will squeeze future profit margins, but it's unlikely the company, being in such as weakened state, can outlast the determination of its workers."  While industrial workers in Seattle have the upper hand, those in Pittsburgh just need a hand. "When steel left Pittsburgh, it left devastation in its wake — including a local unemployment rate that nearly reached Great Depression levels," writes former Steel City mayor William Peduto. His solution: making steel not with dirty coal but with electricity and hydrogen. "Building out a clean steel industry would generate thousands of union jobs, revitalize Rust Belt communities that have been left out of the economic boom of the 21st century, and make America a net exporter of steel once again," Bill explains. "Steel workers built America's future once, and with the federal government's assistance, they can do it again." Speaking of federal assistance, it's been a good news cycle for Vice President Kamala Harris — first a crippling strike is averted, and then this: "The latest data showed that employers added 254,000 workers to payrolls in September, the most since March and more than the median forecast of 150,000 in a Bloomberg survey, while the unemployment rate fell for a second straight month," writes Jonathan Levin. "The best payrolls statistics in this environment are those that are solid but not so good as to reawaken inflation fears. This number struck just the right balance." Of course, not all jobs are created equal, nor are all workers. "The various bestselling books on income inequality cite a variety of driving factors. Robert Kuttner blames global capitalism. Paul Krugman pins it on bad domestic economic policies. Thomas Piketty writes of capitalists as if they are rentiers, extracting royalties from the system," writes Tyler Cowen. "There is another factor that tends to go unrecognized: the time-honored virtue of hard work. If you work harder — and smarter — you will earn more money." Indeed, economists from Princeton, Vanderbilt and the St. Louis Fed found that about 20% of the variance in lifetime earnings can be explained by differences in hours worked. "Those who work harder do so because they want to," Tyler explains. "In the researchers' model, 90% of the variation in earnings due to hard work comes from a simple desire to work harder." I have a sneaking suspicion Harold Daggett wouldn't approve. Bonus Union Forever Reading: - Nobel Prize awards begin, Oct. 7: We Asked a Nobel Prize-Winning Economist How to Fix Fintech — Nir Kaissar
- Supreme Court fall term, Oct. 7: The Supreme Court Tanked Its Reputation. This Is the Way Back. — Noah Feldman
- Last US CPI before election, Oct. 10 : How My Hard Economic Landing Forecast Went Wrong— Bill Dudley
The current labor strife is a far cry from the bad old days when dockworkers coulda been contenders, steel workers exchanged gunfire with Pinkertons, and … having an affair with a subordinate wasn't a fireable offense for CEOs? Norfolk Southern chief executive Alan Shaw was ousted last month for having a consensual relationship with his chief legal officer, and Beth Kowitt thinks that the board made the right call. "In the last few years, boardrooms across corporate America have recalculated whether they should be taking these kinds of ethical lapses as a warning sign of bigger problems," Beth writes. "It's not just the cultural shift that's driving the crackdown on executives' dalliances. Boards have a strong business case as researchers find increasing evidence pointing to a link between problematic personal and professional behavior." But not all office romance is dead. "Over the last 60 years, men have become more likely to prefer equally educated women who have earning potential similar to their own," writes Sarah Green Carmichael, citing a St. Louis Fed study. "That preference for a similarly-educated, similarly-earning spouse is so strong that it accounts for about half of the increase in income inequality between 1980 and 2020, the researchers say. In other words, it's not only MBAs marrying MBAs. It's teachers pairing off with teachers and cashiers saying 'I do' to cashiers." But what about dockworkers saying "I do" to dockworkers? Given recent surveys finding that longshoremen literally live up to their job title — 91% male — and Zippia data showing only 5% identified as LGBT, that seems unlikely. Besides, the machines ain't gonna stop. Notes: Please send teams of oxen and feedback to Tobin Harshaw at tharshaw@bloomberg.net. | 
No comments:
Post a Comment