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The Oligopoly Project, Part 2: The Attack on Wages

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  • The Oligopoly Project, Part 2: The Attack on Wages

    This article was published in Bloomberg BusinessWeek today:

    How the American Worker Got Fleeced

    Covid helps clarify just how much employers have chipped away at the labor rights and bargaining power that came with the New Deal. Legislation and court rulings have outlawed key organizing and protest tactics, legalized aggressive anti- union efforts, and radically shrunk the range of occupations granted basic labor rights. Companies looking for a short-term jolt to their profit margin have more incentives than ever to hire workers indirectly, keeping payroll and liability off their own books. The pandemic certainly could give employers even more power to set the rules. Or it could give workers a chance to end a heist on a nationwide scale.
    During my working years, I was a software engineer. I guess I still am (you don't stop, even when you retire). In Canada, being a software engineer means you're almost certainly going to work for an American company during your career. American companies refer to it as "near-shoring". Canadians are in the same time zone, speak the same language, have generally the same cultural background, but get paid in Canadian dollars and have their own health care plan. It's a good deal for US companies.

    I distinctly remember running into American engineers who would vehemently defend the at-will work laws. As a Canadian, that seemed a little strange. Like a race car driver arguing against seat belts or something.

    And then there was the continuing arguments over vacations. You tend to move around a lot as a software engineer. In 35 years, my longest stint was 8 years. At every American company it seemed, the HR line was: "We start out people at two weeks vacation.". And it would be a laborious process to explain that was unacceptable and, if they wanted me to work for them, it was 4 weeks minimum. It was obvious that our American compatriots were running around with less vacation and tighter sick day policies, etc.

    It was all signs that things were a bit "off" in the relationship between companies and employees in the US, even in the software market.

    This is not to present Canada as a workers paradise. It most certainly isn't. But I wonder if its easier as an outsider to see the pressure workers are placed under in the US? I mean, nobody is going to cry tears over the predicament of software engineers, but if its happening to them, what's happening to the average hourly worker?

    So the question, I think, is now becoming: Just how much of the long bull run in the market fueled by pressuring workers rights and wages?

    I also found it interesting to see pro-business labor lobbyists using the same doubt-raising, obfuscation tactics employed by product defense firms when fighting regulation. This is far more widespread than even I initially realized. Companies are spending billions each year to convince law makers that changes to protect the environment, your health, and your pocketbook are unnecessary.

    Anyway, it's a good article.

  • #2
    I have worked for a number of American companies in my sales management career. I agree, the differences are quite different and very illuminating as to how societies in the two countries diverge even though they share so many similarities. Working for EU and Asian companies is a whole new ball game!
    Consulting and teaching is where it gets good though

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    • #3
      In Texas everything is bigger, which means that if you have a good job in USA you're better off than pretty much everyone else in the world...with the exception of holidays. I'd laugh my way out of any interview where the employer dared suggest anything less than four weeks, and so would most Europeans. Same applies to working hours.

      It's just for the vast majority of Americans (or anyone for that matter) the jobs aren't that good, and the good jobs are fast disappearing. OTOH, the american culture is all about being the best and reaping the benefits of it, whereas in Europe everyone should have at least some sort of standard of living, with basic benefits like healthcare, pension and vacations guaranteed. Worth noting that the European landscape was very much shaped by socialism, strong unions and working class, and fear of revolutions.

      Workers certainly don't seem to have all that many rights in USA. In most of Europe firing someone for unionising would cause a shitstorm. Firing for unionising with a fake reason an even bigger one.
      Wisdom is personal

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      • #4
        Just used my last "free" article from your source/link, don't see subscribing for more.

        Interesting, but focuses on large companies/corporations. About 50% of business in the USA are small ones, which also provide about 50% of the jobs. Challenge is that small companies/businesses usually don't have deep pockets/lots of capital to draw upon and labor/wages can be a large part of their expenses. Rule of thumb is to pay as little as you can based on costs of replacing that worker. Also, pay what you can afford. Labor is a cost that has to go into the price you charge for the goods and/or services you provide, gets passed on to your customers/consumers; so the challenge is how much can you sell for, to cover your costs/expenses and still stay solvent or better yet make a profit. Also, how much is your competition undercutting what you can, or have to charge~sell for?

        Getting started in a small business is often risky, no guarantees of success and recovery of investment/starting capital; and the start up costs often come from life-savings and more often loans and/or mortgage, often against one's home. Somewhere around 4 out of 5 start-ups fail within the first three years, and it's rare that any of the employees are willing to absorb the losses of failure as much as think they should have more of profits, if there are any.

        Everything costs, and some one has to pay.

        The so-called better jobs~pay~benefits supposedly enjoyed by many in Europe and other developed nations are placed on the national credit card, charged against the prosperity of future generations, often the children and grandchildren of today. In the following link note the totals of "public debt" plus "external debt" to GDP and see how far into hock each "well off" nation is. The larger the total, the more they are living "now" on a borrowed future and closer to seeing their "house of cards" collapse. Which will be the price of suffering to be paid by their children and grandchildren.

        https://www.usdebtclock.org/world-debt-clock.html
        TANSTAAFL = There Ain't No Such Thing As A Free Lunch

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        • #5
          Makes me glad I'm retired, in a way. I know from firsthand experience that the medical profession is really felling the squeeze, with fewer staff doing more work and pay rates now set by the mega-health corporations. More for less for the employees is the new rule for American workers.

          Ironically the major exceptions are those the nation can most do without -politicians, actors, lobbyists, athletes, entertainers and the like. It would be interesting to select ten people you would want to have in your group if you survived Armageddon, and compare the reasons for your choices and what they were making with a similar group made up of those you were forced to chose from the other group.

          My personal choices would all be form the blue collar, skilled worker group, covering the basic areas of need: a farmer, cattleman carpenter, plumber, electrician, physician assistant, mechanic, metal worker, teacher and so forth. Those necessary for immediate and long-term survival. The ones society tends to value the least.
          Quis Custodiet Ipsos Custodes? Who is watching the watchers?

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