What creates jobs?

[Dragon]

Increased productivity with the same proportional returns to capital = increased wages.

Well, yes. But there's no mechanism to guarantee that the same proportional returns to capital will ensue. The tendency is for the proportional returns to increase.

 

[Barb]

It seems increasingly difficult for working people to have any disposable income, when a very large portion of jobs are being outsourced to some foreign country. Therein lies part of the problem too. I'm really tired of calling customer service numbers and speaking to Hadji, especially knowing that he's getting paid $100.00 a week and thinks he's rich, and someone in this country needs that job but sure as hell can't live off of that kind of wage. When there's some incentive for large corporations to keep their jobs in our country, then maybe we can put a dent in unemployment.


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Or a disincentive to move production elsewhere, all the while keeping the protections and benefits of the home office here. No more corporate tax breaks. No more chapter eleven. And guess what? You get to pay higher import taxes to market your degraded products (try to remember back when China had all that lead in the toys. At LEAST one American toy company was involved in that) to the country you have NO investment in, and expect ALL the profits from. Your host country treating you badly? So what? Your in a jam because said host has become picky about where you dump industrial waste, or because the population elected a truly democratic government, enacted land reform, and said **** you? Suck it up. The US military won't be (de) stabilizing the area for you. You want to CLAIM you "take all the risks," then OWN those risks. You don't get to pass the risk onto others while reaping the profits.

 

[kaz]

Increased productivity with the same proportional returns to capital = increased wages.

Well, yes. But there's no mechanism to guarantee that the same proportional returns to capital will ensue. The tendency is for the proportional returns to increase.

Wow, that's a perfect description of government and taxes...

 

[Immanuel]

Increased productivity with the same proportional returns to capital = increased wages.

Then how do you account for the fact that the introduction of a union into a corporate enviroment generally leads to higher wages with less productivity?

Immie

(1) I've seen no evidence that creating a union leads to a decrease in output per worker per hour but....

(2) Unions can have the effect of increasing the proportion of income that goes to labor.

Then you must not pay much attention because unions are notorious for restricting the output of their members.

The evidence evaluated in this paper lends credence to the latter interpretation. Despite the very real benefits of collective voice for workers, the positive effects of unions have been overshadowed by union rent-seeking behaviour. Productivity is not higher, on average, in union workplaces. The failure of collective bargaining to enhance productivity significantly results in substantially lower profitability among unionized companies. Because unions appropriate not only a portion of monopoly-related profits but also the quasi-rents that make up the normal return to long-lived capital, unionized companies reduce investment in vulnerable forms of physical and innovative capital. Investment is further reduced since lower profits reduce the size of the internal pool from which investments are partly financed. Slower growth in capital is mirrored by slower growth in sales and employment (and, thus, union membership). The relatively poor performance of union companies gives credence to the proposition that the restructuring in industrial relations and increased resistance to union organizing have been predictable responses on the part of businesses to increased domestic and foreign competition. In the absence of a narrowing in the performance differences between unionized and nonunionized companies, modifications in labour law that substantially enhance union organizing and bargaining strength are likely to reduce economic competitiveness.

Although the evidence indicates clearly that collective bargaining has led to a poor performance in unionized sectors of the economy relative to nonunionized sectors, it is far more difficult to draw inferences about the effects of unions upon economy-wide performance. In fact, a highly competitive economy limits the costs unions can impose since resources flow to those sectors where they obtain the highest return. For example, lower capital investment or employment among unionized firms is in part offset by higher usage elsewhere in the economy. If resources could flow costlessly to alternative uses and if social rates of return were equivalent in nonunion sectors, unions would have little effect on economy-wide efficiency. Increases in unions' power and rent-seeking would simply cause the relative size of the union sector to shrink. However, because unions have some degree of monopoly bargaining power, because the shifting of resources from union to nonunion environments occurs slowly, and because social rates of return differ across investment paths, union distortions at the firm level necessarily translate into some degree of inefficiency economy-wide.

A Framework for Analysis

Of course there are differing opinions:

Thurston-Lewis-Mason Central Labor Council | Facts About Unions

Thurston-Lewis-Mason, Central Labour Council, disputes the idea that unions lower productivity and cites a UC Berkeley professor:

According to Professor Harley Shaiken of the University of California-Berkeley, unions are associated with higher productivity, lower employee turnover, improved workplace communication, and a better-trained workforce.

But damn, if you read that page, it reads like and advertisment for unions. Oh wait, I think it is.

Immie

 

[8537]

Then how do you account for the fact that the introduction of a union into a corporate enviroment generally leads to higher wages with less productivity?

Immie

(1) I've seen no evidence that creating a union leads to a decrease in output per worker per hour but....

(2) Unions can have the effect of increasing the proportion of income that goes to labor.

Then you must not pay much attention because unions are notorious for restricting the output of their members.

The evidence evaluated in this paper lends credence to the latter interpretation. Despite the very real benefits of collective voice for workers, the positive effects of unions have been overshadowed by union rent-seeking behaviour. Productivity is not higher, on average, in union workplaces. The failure of collective bargaining to enhance productivity significantly results in substantially lower profitability among unionized companies. Because unions appropriate not only a portion of monopoly-related profits but also the quasi-rents that make up the normal return to long-lived capital, unionized companies reduce investment in vulnerable forms of physical and innovative capital. Investment is further reduced since lower profits reduce the size of the internal pool from which investments are partly financed. Slower growth in capital is mirrored by slower growth in sales and employment (and, thus, union membership). The relatively poor performance of union companies gives credence to the proposition that the restructuring in industrial relations and increased resistance to union organizing have been predictable responses on the part of businesses to increased domestic and foreign competition. In the absence of a narrowing in the performance differences between unionized and nonunionized companies, modifications in labour law that substantially enhance union organizing and bargaining strength are likely to reduce economic competitiveness.

Although the evidence indicates clearly that collective bargaining has led to a poor performance in unionized sectors of the economy relative to nonunionized sectors, it is far more difficult to draw inferences about the effects of unions upon economy-wide performance. In fact, a highly competitive economy limits the costs unions can impose since resources flow to those sectors where they obtain the highest return. For example, lower capital investment or employment among unionized firms is in part offset by higher usage elsewhere in the economy. If resources could flow costlessly to alternative uses and if social rates of return were equivalent in nonunion sectors, unions would have little effect on economy-wide efficiency. Increases in unions' power and rent-seeking would simply cause the relative size of the union sector to shrink. However, because unions have some degree of monopoly bargaining power, because the shifting of resources from union to nonunion environments occurs slowly, and because social rates of return differ across investment paths, union distortions at the firm level necessarily translate into some degree of inefficiency economy-wide.

A Framework for Analysis

Of course there are differing opinions:

Thurston-Lewis-Mason Central Labor Council | Facts About Unions

Thurston-Lewis-Mason, Central Labour Council, disputes the idea that unions lower productivity and cites a UC Berkeley professor:

According to Professor Harley Shaiken of the University of California-Berkeley, unions are associated with higher productivity, lower employee turnover, improved workplace communication, and a better-trained workforce.

But damn, if you read that page, it reads like and advertisment for unions. Oh wait, I think it is.

Immie

Wait a second. That's hilarious! A rightwing libertarian outfit claims unions are bad?

Say it ain't so!

You quote the Fraser institute to support your claim - a far-right Canadian Libertarian think tank, then dismiss out of hand the work of a shop that supports unions?

Most people try a bit harder to hide their hypocrisy.

 

[Widdekind]

on that (M+C)V=P Q thing where C can cause an increase in prices.... increases are to P or Q, depending of if output is near maximum or not...

Either prices or output would rise. If demand is low, then output would rise; and, with it, employment. If demand is high, and employment low; then prices are a function of the amount of money that is available to flow through the economy. As the spendable income rises, so goes the money flow in exchanges...

let

Meff = M+C (Money + Credit)
Qeff = QD + QF (Domestics + Foreigns)​

then

Meff V = P Qeff ​

If the "rich" have a lower "Propensity to Spend", i.e. they spend "less money (M -> M), less often (V -> V)"; then they "siphon off" Money, from the consumer economy, i.e.

M V ---> M V​

If so, then the "rich" exert downward pressures, on Prices & Quantities (of existing Products, i.e. Goods & Services):

P Q ---> P Q​

savings only leads to lower prices as demand falls and prices fall... This is the process of deflation... savings can cause deflation by reducing demand which leads to falling prices

Then "entrepreneurs" would try to "tap latent demand", by "innovating" novel Goods & Services, catering to "rich" clientele:

luxuries, e.g. "wine"
Investment advice, e.g. "Bernard Madoff"​

I.e. our economy needs (non-Criminal) "entrepreneurial spirit" (not "Taxes"), to "reach untapped Demand":

While savings equals investment, it only equals investment when there is market demand to be leveraged such that there is a demand for investment... savings equals investment which increases output to reach untapped demand

Lowering taxes to increase spendable income only works when the economy is at less then full output. Eventually, prices rise to consume all available income then we are right back to where we were, except with less tax revenue.

citing Frederic Bastiat, you have observed half of the economic effects, of "lowering taxes". However, with lower Taxes & higher Prices, the latter incentivize evidently-desirable expansion of Production output capacity (otherwise masked, by the burden, of taxes, which compete against market Demand). Ergo, Taxes dis-incentivize Investment (by dampening otherwise-evident economic indicators, of excess Demand).

Since the recession, the demand for imports has fallen to 50% of what it was... excess demand doesn't exist. At first, when the recession occurred, demand collapsed on the collapse of consumer revolving credit.

i.e.

C --> 0
Meff --> Meff

Qeff --> Qeff
QD --> QD​

Some of the recovery has been on an increase in the use of credit. In this case, the increased use of credit triggers increased output. (and some of it in China, which is pissing some people off.)

i.e. the reverse, of the above (as more Money is spent, on more foreign imported Quantity)

 

[Widdekind]

Republicans want non union people to be jealous of union workers and the benefits they get. Instead, we need to remember that a rising tide lifts all ships. We only make what we make because our non union companies needed to stay competitive with union wages...

So, Americans who don "blue shirts" can demand more money, for themselves; and less money, for others (who don "white shirts") ? What Justifies such nosy meddling, in other peoples' affairs ? What others earn, is a transaction, involving only the employer & employee -- what Justifies "We the People" prodding our noses, into their business ?

Today corporations are over in china because their wages are going up.

Chinese wages are increasing, because corporations are competing to hire Chinese labor ?

 

[Widdekind]

The percent of all taxes collected and the percent of one's income that is paid in taxes are not the same thing.

For purposes of determining whether more taxes can be collected, the second of those statistics is important and the first is meaningless.

"can" vs. "should" are also not the same

 

[Dragon]

The percent of all taxes collected and the percent of one's income that is paid in taxes are not the same thing.

For purposes of determining whether more taxes can be collected, the second of those statistics is important and the first is meaningless.

"can" vs. "should" are also not the same

True. So what? Besides, while they are not the same thing, they are obviously related. "Can" encompasses not only whether the money exists, but also the amount of pain and hardship that would accompany their collection. None of which is in any way relevant to the total percentage of the tax burden borne by any one group of taxpayers, UNLESS you also recognize what percentage of the total INCOME that group of taxpayers pulls in, and compare the two.

 

[Immanuel]

(1) I've seen no evidence that creating a union leads to a decrease in output per worker per hour but....

(2) Unions can have the effect of increasing the proportion of income that goes to labor.

Then you must not pay much attention because unions are notorious for restricting the output of their members.



A Framework for Analysis

Of course there are differing opinions:

Thurston-Lewis-Mason Central Labor Council | Facts About Unions

Thurston-Lewis-Mason, Central Labour Council, disputes the idea that unions lower productivity and cites a UC Berkeley professor:

According to Professor Harley Shaiken of the University of California-Berkeley, unions are associated with higher productivity, lower employee turnover, improved workplace communication, and a better-trained workforce.

But damn, if you read that page, it reads like and advertisment for unions. Oh wait, I think it is.

Immie

Wait a second. That's hilarious! A rightwing libertarian outfit claims unions are bad?

Say it ain't so!

You quote the Fraser institute to support your claim - a far-right Canadian Libertarian think tank, then dismiss out of hand the work of a shop that supports unions?

Most people try a bit harder to hide their hypocrisy.

Are you that big of a fool? You seem to have done exactly what you accused me of doing. Hypocrite.

A shop that "supports" unions? That is not a "shop that supports unions". It is the damned AFL-CIO itself. Did you follow the link at the bottom of Thurston's page. Right to the AFL-CIO. It could not be any more obvious.

But, at least I went looking for multiple viewpoints. I actually tried to find other points of view unlike you who automatically shoot the messenger because you don't like their viewpoint. I repeat, you are a hypocrite.

Immie

 

[starcraftzzz]

It actually takes BOTH of the things you listed in your second paragraph. Increased productivity is necessary but not sufficient. It's also a given; productivity is always going up.

The reasons why wealth has become so maldistributed, and hence the economy underperforms, have nothing to do with productivity.

Increased productivity with the same proportional returns to capital = increased wages.

Then how do you account for the fact that the introduction of a union into a corporate enviroment generally leads to higher wages with less productivity?

Immie

Actually the opposite is true.
www.askneca.com/unionadvantage/Electrical - Biz Plan (2).pdf
^Unionized construction business are 17% more efficient.

http://www.oliverwyman.com/content_images/OW_EN_Automotive_Press_2008_HarbourMedia08.pdf
Union Car plants had:
1) 70% of the most efficient assembly plants.
2) All 10 of the most productive plants are union plants.
3) 70% of the most efficient engine plants
4) 80% of the most efficient transmission plants.
5) Union plants assembled their vehicles in fewer hours in 11 of the 12 product categories. Union plants productivity:
1) Small cars was 32% higher.
2) Mid-sized cars was 13% higher.
3) Pickups were 40% higher.

 

[8537]

Then you must not pay much attention because unions are notorious for restricting the output of their members.



A Framework for Analysis

Of course there are differing opinions:

Thurston-Lewis-Mason Central Labor Council | Facts About Unions

Thurston-Lewis-Mason, Central Labour Council, disputes the idea that unions lower productivity and cites a UC Berkeley professor:



But damn, if you read that page, it reads like and advertisment for unions. Oh wait, I think it is.

Immie

Wait a second. That's hilarious! A rightwing libertarian outfit claims unions are bad?

Say it ain't so!

You quote the Fraser institute to support your claim - a far-right Canadian Libertarian think tank, then dismiss out of hand the work of a shop that supports unions?

Most people try a bit harder to hide their hypocrisy.

Are you that big of a fool? You seem to have done exactly what you accused me of doing. Hypocrite.

you posted two sources: a right wing hit job and a union support group - and dismissed one while accepting the other.

But, at least I went looking for multiple viewpoints. I actually tried to find other points of view unlike you who automatically shoot the messenger because you don't like their viewpoint. I repeat, you are a hypocrite.

You didn't go "looking for multiple viewpoints". You found one rightwing hit piece and one easily flammable straw man to appear 'balanced'. The appearance failed.

 

[Immanuel]

Wait a second. That's hilarious! A rightwing libertarian outfit claims unions are bad?

Say it ain't so!

You quote the Fraser institute to support your claim - a far-right Canadian Libertarian think tank, then dismiss out of hand the work of a shop that supports unions?

Most people try a bit harder to hide their hypocrisy.

Are you that big of a fool? You seem to have done exactly what you accused me of doing. Hypocrite.

you posted two sources: a right wing hit job and a union support group - and dismissed one while accepting the other.

But, at least I went looking for multiple viewpoints. I actually tried to find other points of view unlike you who automatically shoot the messenger because you don't like their viewpoint. I repeat, you are a hypocrite.

You didn't go "looking for multiple viewpoints". You found one rightwing hit piece and one easily flammable straw man to appear 'balanced'. The appearance failed.

Actually I did go looking for multiple opinions. I also found two articles by an author named, David Metcalf on in a site called ideas, but I could not find any information on Metcalf and moved on.

Here are the two articles.

Unionization and Productivity in Office Building and School Construction

Unions and Productivity, Financial Performance and Investment: International Evidence

There was no information about Metcalf in the "authors" section so I skipped it and then I found the AFL-CIO page that you so easily accepted as being gospel and that was the one I posted. You as the hypocrite you are accepted the union scam but refused to accept a differing opinion.

Face it you have exposed yourself as a hypocrite and there is no two ways about it.

Immie

 

[Widdekind]

http://www.oliverwyman.com/content_images/OW_EN_Automotive_Press_2008_HarbourMedia08.pdf

that article says American laborers are less productive than Asian rivals -- are Japanese laborers Unionized ?

 

[Widdekind]

www.askneca.com/unionadvantage/Electrical - Biz Plan (2).pdf
^Unionized construction business are 17% more efficient.

that article attributes Union advantages to superior training -- if Unions, like ancient guilds, train workers; then Union skilled-labor would warrant wages higher than non-Union unskilled-labor.

what about "certified", but non-Union, workers ? do Unions monopolize "certifications" ?

union programs have enrolled 72 percent of construction apprentices since 1989 [~3:1]

that article conflates "training" with "Union", lauding the latter, for the former, which may be misleading

Union-signatory electrical contractors can provide the GREATEST PRODUCTIVITY because they employ skilled union electricians

According to the BLS, Union labor costs nearly 30% more, than non-Union labor; but:

Union construction work sites are 17% more productive [per hour] than non-union sites

thus, Union labor Productivity-per-Dollar is only ~90% that of non-Union labor. Cp. Japanese Labor-Cost-per-Vehicle is ~$100 less than American competitors.

 

[Billo_Really]

Spending creates jobs. And it doesn't matter whether the spending is from a public dollar or a private dollar, all that matters is that spending occurs. Because that creates demand. And when you have demand, you have investment. And when you have investment, you have jobs.

 

[8537]

Are you that big of a fool? You seem to have done exactly what you accused me of doing. Hypocrite.

you posted two sources: a right wing hit job and a union support group - and dismissed one while accepting the other.

But, at least I went looking for multiple viewpoints. I actually tried to find other points of view unlike you who automatically shoot the messenger because you don't like their viewpoint. I repeat, you are a hypocrite.

You didn't go "looking for multiple viewpoints". You found one rightwing hit piece and one easily flammable straw man to appear 'balanced'. The appearance failed.

Actually I did go looking for multiple opinions. I also found two articles by an author named, David Metcalf on in a site called ideas, but I could not find any information on Metcalf and moved on.

Here are the two articles.

Unionization and Productivity in Office Building and School Construction

Unions and Productivity, Financial Performance and Investment: International Evidence

There was no information about Metcalf in the "authors" section so I skipped it and then I found the AFL-CIO page that you so easily accepted as being gospel and that was the one I posted. You as the hypocrite you are accepted the union scam but refused to accept a differing opinion.

Face it you have exposed yourself as a hypocrite and there is no two ways about it.

Immie

Where did I post anything about accepting the union piece? it's trash like the Fraser report you posted as well.

 

[Immanuel]

you posted two sources: a right wing hit job and a union support group - and dismissed one while accepting the other.




You didn't go "looking for multiple viewpoints". You found one rightwing hit piece and one easily flammable straw man to appear 'balanced'. The appearance failed.

Actually I did go looking for multiple opinions. I also found two articles by an author named, David Metcalf on in a site called ideas, but I could not find any information on Metcalf and moved on.

Here are the two articles.

Unionization and Productivity in Office Building and School Construction

Unions and Productivity, Financial Performance and Investment: International Evidence

There was no information about Metcalf in the "authors" section so I skipped it and then I found the AFL-CIO page that you so easily accepted as being gospel and that was the one I posted. You as the hypocrite you are accepted the union scam but refused to accept a differing opinion.

Face it you have exposed yourself as a hypocrite and there is no two ways about it.

Immie

Where did I post anything about accepting the union piece? it's trash like the Fraser report you posted as well.

Okay, if you are going to deny supporting the union piece, I'm sure not going to argue with you and try to tell you what you were thinking as you tried to tell me what I was thinking.

Immie

 

[Widdekind]

Spending creates jobs. And it doesn't matter whether the spending is from a public dollar or a private dollar, all that matters is that spending occurs. Because that creates demand. And when you have demand...you have jobs.

Public Spending (of Taxes) occurs only at the expense of the Private Spending, which would have occurred, had that money remained in Private hands. I.e. Public Spending has an "Opportunity Cost" (foregone Private Spending), whereas Private Spending does not. Threatening "Government Guns", to take money, from economic actors, does not make their economy stronger; does make their economy weaker.

 

[Billo_Really]

Spending creates jobs. And it doesn't matter whether the spending is from a public dollar or a private dollar, all that matters is that spending occurs. Because that creates demand. And when you have demand...you have jobs.

Public Spending (of Taxes) occurs only at the expense of the Private Spending, which would have occurred, had that money remained in Private hands. I.e. Public Spending has an "Opportunity Cost" (foregone Private Spending), whereas Private Spending does not. Threatening "Government Guns", to take money, from economic actors, does not make their economy stronger; does make their economy weaker.

That's a right-wing myth. People need jobs. If the private sector won't provide it, then government must step in and do it for them. Once people are back to work, they get paychecks. When they get paychecks, they spend money. 70% of our economy is from consumer spending and small businesses.

Corporations are enjoying record profits and are sitting on trillions of dollars that are not being invested back into the economy because there is no demand.