mck@ratex.UUCP (Daniel Kian Mc Kiernan) (01/30/85)
In a Free Economy, wage-rates are established by the Law of Supply and
Demand. At each possible wage-rate, employers will have a corresponding
demand for labour, such that the amount of labour demanded will generally
decrease as the price of labour increases; this is because
employers will hire employees as long as it pays to, and it will pay to so
long as the price of labour does not exceed the MVP (marginal value product)
of the worker. At each possible wage-rate, workers will offer a corresponding
amount of labour; empirical evidence and common-sense indicate that the
amount of labour supplied will generally increase with the wage-rate, altho
theoretically there are other possiblities (which I am willing to discuss).
If the wage-rate starts out higher than that corresponding to the rate at
which supply equals demand, there will be more workers seeking jobs, and
fewer employers seeking workers; the surplus workers will bid down the wage
rate until supply equals demand. If the wage-rate is lower than that at
which supply equals demand, there will be more jobs being offered, and
fewer workers seeking jobs; employers will bid up the wage rate until
supply equals demand.
Unions and Minimum Wage Laws coercively prevent surplus workers from
bidding down the wage rate (assuming, of course, that the wage-floor set is
below the equilibrium wage rate). Wages are high, but there are associated
costs. Employers continue the practice of hiring until wages equal MVP,
but at this higher wage rate, this means that they hire fewer workers, thus
there are workers who would have had jobs at the lower wage rate but are
now unemployed. Additionally, workers who would not have been attracted by
the equilibrium wage rate are attracted by the higher wage rate; this adds
to the unemployed (assuming that we define 'unemployed' as seeking but not
having a job). It should be seen that the higher wage-rates attained by
unions and Minimum Wage laws are not evidence of market-power on the part
of employers, any more than the higher-price of dairy products attained by
price supports is evidence of market-power on the part of consumers.
If the work-week is reduced, without corresponding reductions in
weekly pay, this will amount to an increase in the wage-rate; in the long-
run, this will mean increased unemployment. Even if weekly pay is
proportionally decreased (such that the wage-rate is kept constant),
economies of scale will be lost (at a given wage rate, it's generally
cheaper to hire 10000 workers for 40 hours per week than 400000 workers for
1 hour per week), and further unemployment will obtain.
Everybody clear?
Daniel Kian Mc Kiernanorb@whuxl.UUCP (SEVENER) (01/31/85)
> > If the work-week is reduced, without corresponding reductions in > weekly pay, this will amount to an increase in the wage-rate; in the long- > run, this will mean increased unemployment. Even if weekly pay is > proportionally decreased (such that the wage-rate is kept constant), > economies of scale will be lost (at a given wage rate, it's generally > cheaper to hire 10000 workers for 40 hours per week than 400000 workers for > 1 hour per week), and further unemployment will obtain. > > Everybody clear? > Daniel Kian Mc Kiernan Clear as a smogfilled day in Los Angeles....... Too bad we aren't still working the 60 to 80 hour week they averaged around the turn of the century. Just think how much more efficient that would be................ not to mention the increased unemployed milling around desperate for any job they can get!! Seems like the economy has done better since going to the 40 hour week than it did before the 40 hour week. What would be *most* efficient might be the 168 hour week... that used to be called "slavery"........ My question is: what are the poor robots going to do??? "Ecstasy is *still* the Greatest Revolution!" tim sevener whuxl!orb
mjk@tty3b.UUCP (Mike Kelly) (01/31/85)
>From: mck@ratex.UUCP (Daniel Kian Mc Kiernan) > In a Free Economy, wage-rates are established by the Law of Supply and >Demand ... Fine, live in a make-believe world if you like. Do you mind if the rest of us discuss reality? As someone once said, the world economy today resembles a "free market" about as closely as a super highway resembles a dirt path. I understand the need to apply simplified models to gain understanding -- just don't start believing too much in the simplified models. > Unions and Minimum Wage Laws coercively prevent surplus workers from >bidding down the wage rate (assuming, of course, that the wage-floor set is >below the equilibrium wage rate). Wages are high, but there are associated >costs. Employers continue the practice of hiring until wages equal MVP, >but at this higher wage rate, this means that they hire fewer workers, thus >there are workers who would have had jobs at the lower wage rate but are >now unemployed. Additionally, workers who would not have been attracted by >the equilibrium wage rate are attracted by the higher wage rate; this adds >to the unemployed (assuming that we define 'unemployed' as seeking but not >having a job). You may economically "prove" to your own satisfaction that unions are bad. The reality is that workers must organize because management is already organized. An employee does not have the freedom, within a company, to go from manager to manager and gain bids on wages or working conditions. These are set on a company-wide level. If individual workers are bargaining with a corporation -- well, it is rather obvious who holds the power in that relationship. Only when workers are able to *collectively* negotiate with the already collective management are the power relationships brought more into parity. That is simple reality in the real economy in which we live. Mike Kelly
alan@sdcrdcf.UUCP (Alan Algustyniak) (02/02/85)
>> >> Everybody clear? >> Daniel Kian Mc Kiernan > >Clear as a smogfilled day in Los Angeles....... > tim sevener whuxl!orb I don't understand, Tim. The rest of your note went something like: What you've said is true, but I don't like it one bit. So why accuse Daniel of smoggy thinking? sdcrdcf!alan p.s. Anyone who thinks that L.A. is one of the smoggiest cities, hasn't done much comparing lately.
cliff@unmvax.UUCP (02/02/85)
> You may economically "prove" to your own satisfaction that unions are bad. > The reality is that workers must organize because management is already > organized. An employee does not have the freedom, within a company, to go > from manager to manager and gain bids on wages or working conditions. What is so special about seeing different managers within a company. An employee *does* have the freedom to go from manager to manager of different companies and gain bids on wages and working conditions. What is the problem? > These > are set on a company-wide level. If individual workers are bargaining with > a corporation -- well, it is rather obvious who holds the power in that > relationship. Please tell me why it is rather obvious who holds the power in such a situation. Why is it that unions are on the decline? Why is it that computer professionals have not unionized? Quite simply it is because workers obviously hold the power when they are in demand (let me guess, I can't mention supply and demand because this is the real world :-(. What you really mean is that the workers who can be replaced by unemployed people that would love to have *any* job should be given special status because they are already employed! Long Live The Status Quo! > Only when workers are able to *collectively* negotiate with > the already collective management are the power relationships brought more > into > parity. That is simple reality in the real economy in which we live. If you don't like your boss, quit! If you can't get another job, complain about unemployment. If you get a job that pays so little that you can't feed yourelf, complain about inflation. > Mike Kelly --Cliff
gam@amdahl.UUCP (gam) (02/03/85)
> You may economically "prove" to your own satisfaction that unions are bad. > The reality is that workers must organize because management is already > organized.... The point is not to show that unions are "bad", but that if unions insist on establishing minimum-wage requirements (when the minimum wage is is above equalibrium), the consequences are that some people will be unemployed. This is fact, not economic theory. The author of that description did not say this was "bad." He was just describing the way things are. -- Gordon A. Moffett ...!{ihnp4,hplabs,sun}!amdahl!gam
baba@spar.UUCP (Baba ROM DOS) (02/04/85)
First of all, thank you, Daniel, for beginning to post articles in something approximating conversational English. Your earlier postings were so swathed in jargon that I had assumed that your intent was to impress and to obscure, rather than to inform. On to the flak: > In a Free Economy, wage-rates are established by the Law of Supply and > Demand. At each possible wage-rate, employers will have a corresponding > demand for labour, such that the amount of labour demanded will generally > decrease as the price of labour increases; this is because > employers will hire employees as long as it pays to, and it will pay to so > long as the price of labour does not exceed the MVP (marginal value product). > (etc.) This analysis (or at least the acceptance of it as a description of a reasonable state of affairs) is unfortunately blind to the effects of technology on the value of labor. Someone has put the objection far better than I could: (quote courtesy steiny@scc) Perhaps I may clarify the historical background of the present situation if I say that the first industrial revolution, the revolution of the "dark satanic mills," was the devaluation of the human arm by the competition of machinery. There is no rate of pay at which a United States pick and shovel laborer can live which is low enough to compete with a steam shovel as an excavator. The modern industrial revolution is similarly bound to devalue the human brain, at least in its simpler and more routine decisions. Of course, just as a skilled car- penter, the skilled mechanic, the skilled dressmaker have in some degree survived the first industrial revolution, so the skilled scientist and the skilled adminstrator may survive the second. However, given the second revolution as accomplished, the average human being of mediocre attainments or less has nothing to sell that is worth anyone's money to buy. The answer, of course, is to have a society based on human values other than buying and selling. Norbert Wiener *Cybernetics*
mjk@tty3b.UUCP (Mike Kelly) (02/05/85)
>From: gam@amdahl.UUCP (gam) >The point is not to show that unions are "bad", but that if unions >insist on establishing minimum-wage requirements (when the minimum >wage is is above equalibrium), the consequences are that some people >will be unemployed. > >This is fact, not economic theory. The consequences are such only if capital is allowed to define economic fact. Unemployment is a poltical problem, not an economic fact. That it remains is evidence of lack of political will to solve it. Mike Kelly
mjk@tty3b.UUCP (Mike Kelly) (02/07/85)
>From: cliff@unmvax.UUCP > >What is so special about seeing different managers within a company. An >employee *does* have the freedom to go from manager to manager of different >companies and gain bids on wages and working conditions. What is the problem? Unions organize on a per-workplace basis. Thus, the relevant comparison is what is happening at a particular workplace, not in the economy in general. For example, if the autoworkers win an election at GM, they do not automatically have representation rights for the entire automobile industry. My point is this: non-union workers are forced to deal with an organized management as individuals. Organized workers deal with an organized management as an organization. It is not just, or even primarily, wage rates where this is important. It is important in cases where an individual feels he is being treated unfairly. Only the union can effectively pressure management into changing its course. This is not to say that all non-union workplaces are horrible; however, if they aren't, it's at the whim of management. It could be different tomorrow and you would have absolutely nothing to say about it. >Please tell me why it is rather obvious who holds the power in such a situation. (ed.note: when non-unionized workers confront organized management) Because there is power in numbers and organization. If I threaten to quit unless you deal fairly with me, you can tell me to go to hell. But if all your workers threaten to walk off together unless you deal fairly, you may just have to change your strategy. You can argue that it is *wrong* for workers to have such power (many would join you in this newsgroup), but it seems silly to argue that organization does not bring with it power. >Why is it that unions are on the decline? Why is it that computer professionals >have not unionized? The reasons are complex. Partly it is due to the restrictive labor laws in this country when compared with, for example, Western Europe. Partly it is due to large-scale unemployment in the industries (steel, autos, manufacturing) where unionization was high. Partly it is due to the difficulty of organizing new service industries because they typically have much smaller workplaces. It is also, at least in part, due to an ideological offensive against trade unions. Computer professionals aren't unionized because most professionals aren't unionized. Professionals, in fact, are usually classified as management employees by the NLRB, and thus cannot be organized. There have been some exceptions to this. Another reason is that their (our) labor is in demand, so wages and working conditions tend to be good. If you think that will last forever, however, I know some autoworkers who thought the same around 1968 you should talk to. The benefits computer professionals have grown accustomed to -- flexible hours, pleasant working conditions, high wages -- will be cut back as soon as management thinks it can afford to do so. Look at how many kids are going into computer science programs today. You may call yourself a professional, but you're just another production input, and your cost will be minimized when supply increases. >What you really mean is that the workers >who can be replaced by unemployed people that would love to have *any* job >should be given special status because they are already employed! Long Live >The Status Quo! > No, not special status, and not long live the status quo. Let's accomodate change and obsolete jobs if necessary. But obsoleting a job shouldn't mean obsoleting a worker. You also make a very Marxist argument on unemployment -- basically, it is tolerated politically because it disciplines the workforce. THere is always the unspoken message, "Remember, that could be you. It could be your family without an income. It could be your health insurance gone. It could be your house being repossesed. Stay in line. Or you could be next." Mike Kelly
gam@amdahl.UUCP (gam) (02/07/85)
I have seen this "dark satanic mills" quote before, and rebutted it
before.
The synopsis of the rebuttal is:
Human beings have adapted thru various technological/economic
revolutions (you didn't even mention the Agricultural Revolution!).
All that Weiner has pointed out is that people will shift
into different jobs as certain jobs become obsolete or are best
handled by machines. This process has been going on since
(at least!) the Agricultural Revolution.
(As it happens, the long-term future of the job market is in
*technological* and *entertainment* areas, due to growth of technology
and increased leisure time).
As for a system based on "human values", isn't that exactly what we
have -- a system based on what humans value? Or did you have some
philosophical goal in mind?
--
Gordon A. Moffett ...!{ihnp4,hplabs,sun}!amdahl!gammwm@ucbtopaz.CC.Berkeley.ARPA (02/08/85)
In article <595@tty3b.UUCP> mjk@tty3b.UUCP (Mike Kelly) writes: >The consequences are such only if capital is allowed to >define economic fact. Unemployment is a poltical problem, not an >economic fact. That it remains is evidence of lack of >political will to solve it. > >Mike Kelly But Mike, every time somebody points out the political actions needed to solve the unemployment problem, you get upset. The three things usually pointed to are: 1) Getting rid of the minimum wage laws. 2) Placing labor and corporate monopolies on equal legal footing. 3) Lowering the welfare payment levels to the point where working is preferable to staying in the program. Do you have a counter-proposal for political action that will solve the unemployment problem? <mike
baba@spar.UUCP (Baba ROM DOS) (02/09/85)
> I have seen this "dark satanic mills" quote before, and rebutted it > before. > > The synopsis of the rebuttal is: > > Human beings have adapted thru various technological/economic > revolutions (you didn't even mention the Agricultural Revolution!). > All that Weiner has pointed out is that people will shift > into different jobs as certain jobs become obsolete or are best > handled by machines. This process has been going on since > (at least!) the Agricultural Revolution. > Let's look at it again: Of course, just as a skilled car- penter, the skilled mechanic, the skilled dressmaker have in some degree survived the first industrial revolution, so the skilled scientist and the skilled adminstrator may survive the second. However, given the second revolution as accomplished, the average human being of mediocre attainments or less has nothing to sell that is worth anyone's money to buy. The easiest jobs to automate are jobs that anyone can do. The new jobs that are created are jobs that require progressively more in the way of training and talent. The process has only begun. > (As it happens, the long-term future of the job market is in > *technological* and *entertainment* areas, due to growth of technology > and increased leisure time). Some former steel and auto workers have become medical technicians, DEC service engineers ;-), and soap opera stars, but for the most part these jobs go to younger people. We have begun to obsolete whole occupations in less than a generation. And we do not as a society approve of people being paid for leisure. > As for a system based on "human values", isn't that exactly what we > have -- a system based on what humans value? Or did you have some > philosophical goal in mind? > -- > Gordon A. Moffett ...!{ihnp4,hplabs,sun}!amdahl!gam Well, if you can remember back to the beginning of your posting, you were refuting a quotation, so it seems a little strange to ask what I had in mind. The author died in 1964. His name was Wiener, not Weiner. Again: The answer, of course, is to have a society based on human values OTHER THAN buying and selling. Please wake before pouncing, Baba