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Home Publications Blogs Beat the Press Boeing Workers Have Less Bargaining Power Because We Have a High Unemployment Policy

Boeing Workers Have Less Bargaining Power Because We Have a High Unemployment Policy

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Friday, 13 December 2013 05:44

Harold Meyerson has a good column in the Post talking about how workers in the United States have little bargaining power with employers. This explains why profits have soared and wages have stagnated.

While Meyerson focuses on the weakening of unions it would also have been worth noting that part of the reason for the decline in workers' bargaining power is that the government has decided to run a high unemployment policy. Congress and the president have approved budgets that keep the unemployment rate high. They also support a high dollar policy that leads to large trade deficits and reduces employment. By keeping unemployment high, these policies have a substantial effect on the wages of large segments of the workforce, especially those in the bottom third of the wage distribution.

The piece also notes that Boeing wants to pay new hires $17 an hour and keep them at a below union wage for their first 16 years of employment. It notes that this pay is still well above the minimum wage. In fact, if the minimum wage had tracked productivity since 1968, as it had between its creation in 1938 and 1968, it would be almost $17 an hour at present.

Comments (3)Add Comment
Makers or Takers: How Makers Make Prices and Takers Take Them
written by Last Mover, December 13, 2013 8:03

Exactly. Any economist knows that in America, if you want to buy something as a Maker, oh, say labor for example, you simply order that the demand curve be shifted backwards horizontally to create a great recession surplus and lower the price along a given supply curve.

Likewise if you want to sell something as a Maker, oh, say something essential like health care, internet service or airplanes, you simply order that the supply curve be shifted backwards horizontally to create a monopoly profit shortage and increase the price along a given demand curve.

The only requirement to give such orders as a Maker of prices on the supply or demand side, is to be a member of the One Percent Economic Predator Class.

Everyone else, as involuntary members of the Free Market Price Taker Class, is automatically stripped of the authority to give such orders.

This message of explanation between Makers and Takers and their relationship to the Great Recession as Designed by the One Percent is brought to you by Sock Puppets Maker Media Inc.
...
written by Kat, December 13, 2013 9:49
Kind of an aside, but can we expect an op ed from car czar Steve Rattner about the generational inequities in two tiered wage structures?
Oh it's not an act of nature?
written by Jennifer, December 13, 2013 3:44
". . . the government has decided to run a high unemployment policy."

My guess, if you randomly surveyed a bunch of people, is that they would be shocked by that statement, as accurate as it is. The role of the high level of unemployment as factor in the downward push of wages is I believe a very underreported story. So much about the economy is presented as if things just are, as opposed to be the result of policy choices.
Seems like there should be a book or something to get into how one could structure economic policy around full employment instead.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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