The horizon is not so far as we can see, but as far as we can imagine

The Good & The Bad In The Future of Labor

On this Labor day it seems like a good time to discuss what labor in general and unions in specific have to look forward to.

There’s been some very good labor news recently, for example, the UPS strike:

UPS Teamsters have won their biggest wage boost in decades: at least $7.50 an hour over five years for every current UPSer, and more for the lowest-paid. Even the 1997 strike only boosted part-time wages 50 cents (equivalent to 95 cents today) over five years.

The agreement would also end the forced sixth workday for drivers, create seventy-five hundred new full-time inside jobs, and eliminate the second tier of drivers — reversing the infamous concession in the 2018 contract.

UPS drivers could make as much as $170K in pay and benefits (which sounds better than it is, full time wages are about $120K, but is still good.)

There is also a desperation effect: there has been a lot of inflation, often higher than reported (I’d judge food inflation at the check-out where I live to have been about 66% over the last 3 years and rent inflation c.40% or so.)

A lot of unions have been having successful strikes and many non-union businesses have had to raise wages to attract workers. Anti-worker forces are fighting back, with variable success. In Britain striking is likely to be near-illegal soon, and this is something Labor agrees with the Conservatives on. Laws in some US states allowing younger teenagers to work in food processing plants and so on are also an attempt to break the power of workers.

This power is based on Covid. Covid killed a lot of “essential” workers (with restaurant workers in particular taking it on the chin) and Long Covid has moved a pile more workers off the table and will move more workers over time.

This leaves those who remain in a stronger position: in a market economy without strong pro-worker laws wages are almost entirely based on the supply of workers versus demand. This can be specific, where particular types of skilled workers are short, but for non-skilled workers its mostly aggregate.

From about 1979 Federal Reserve and ECB policy has been to raise interest rates to crush the economy any time workers began to make wage gains, but this time it isn’t working: both because the shortage is real and because the West is, though marginally, trying to decouple from China, meaning China’s mitigating effect on goods inflation is decreased. There aren’t a lot of truly cheap places left where you can easily move production because most remaining cheap places aren’t politically stable and pro-US.

In Europe the news is more mixed because Europe is shedding industry due to anti-Russia sanctions. England, having de-industrialized is now losing its developed nation status.

The pressure on the workforce will continue: Covid is still around, Long Covid and sub-perceptual organ damage will continue to increase and will continue to have an effect on the labour force, not just reducing it from what it would have been, but making a lot of people, while not disabled, less able and worse at their jobs.

There are, of course, things the ruling class can do about this. In Canada we’re bringing in about a half-million new immigrants a year (which has caused a housing crisis), in a nation of 40 million. There’s the child labor law changes and the anti-union laws.

The right is going to make some hay on this, because immigration does increase the work force and thus put downward pressure on wages. If the right were simply to stop being anti-union and anti-worker in other ways, they’d clean up. Up here in Canada, I despise the conservatives, but I have friends who are now homeless because of the housing crisis caused by the Liberals immigration policies.

In the further future, immigration will continue to be the big issue. Climate change refugees will be massive in number and hard to stop (I full expect so many machine-gunning refugees stories by 2035 that it’s “dog bites man.) Elites will want to let enough in to crush local efforts to raise wages.

So we have a window to do the best we can to improve wages. After that, things will become more difficult. Inflation will continue to be an issue (there’s a small chance of deflationary depression) because climate change will lead to real shortages of raw materials, especially food and water.

Of course, if climate change were treated as the emergency it is, there would be a ton of work available, a WWII style mobilization. And that’s the best possible future at this point: a mobilization to deal with climate change properly.

We’ll see if we do, and do it while we still can, before too much civilization collapse.

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Week-end Wrap – Political Economy – September 3, 2023


US Chip Sanctions On China Appear To Be Failing Hard


  1. Willy

    Empathy had its chance. After communism setbacks, elites went full bore culture war against empathy, successfully manufacturing the idea that greed is good and empathy leads to evil. And now we’re seeing American Christians proclaiming that Jesus was too soft.

    It seems that empaths were far too reliant on wishful thinking, wishfully thinking that everybody else’s emotions either can or could operate exactly as theirs do.

    Meanwhile in more balanced nations like Finland, the happiest place on earth of late even with all the wintertime gloom and the absence of a Disneyland, social trust is almost taken for granted. In that place one doesn’t automatically assume that others are always out to scam you. Somehow, their empaths got things right.

  2. StewartM

    On immigration–I argue that this course of history will show it will have no effect on either worker misery or inflation.

    Restrict immigration, and while wages may go up, prices will go up faster due to noncompetitive and gamed markets. Moreover, customer experience will deteriorate, as most people will experience crappier and crappier service due to the worker shortage (and higher wages will drive the capitalist class to cut workers if they can). As long as we have the capitalist class in-charge, they will game things so that they never lose. But if workers are to actually experience an improvement in their lives, the capitalist class MUST LOSE and wealth has to be siphoned off from them downwards.

    By contrast, if you knock the capitalist class away from the levers of power, and make them eat losses, then you can greatly increase not only wages but also the number of people working (replacing those lost due to age and Covid) and fill those currently unfilled positions. People can actually go into small businesses and get good service again (in fact, better service if the capitalist class isn’t in control).

    I say this that what we’re seeing (worker shortages and customer frustration) is precisely what would be predicted to be seen if you leave the capitalists in control (as no matter what, they make sure they get their cut first, no matter the effect on either workers or customers or quality of output)

  3. responseTwo

    $7.50 an hour over five years – does that come out to $1.50 a month? maybe i have it wrong. that’s terrible. look up UPS profits.

  4. anon y'mouse

    this past week the NakedCapitalism website put up an article by Freightwaves (truck industry mag) about the death of Yellow. in that article, the Teamsters were blamed five separate times for the death of the company even when the article admitted it was bad management, overexpansion, too much debt and so forth but they kept returning to the refrain of “Teamsters would not negotiate thus they killed the jobs of thousands”.

    if i were a Teamster, or anyone else truly interested in further unionization efforts in this country, I would write a thorough rebuttal because that trade rag wiped their boogers on ya and are trying to sell that story as to cover their own capitalistic/MBA booboos.

  5. mago

    Finland as a positive example?
    Well, at least they still have a sauna culture where naked men and women freely mix without gender confusion. Or maybe that’s changed.
    I don’t know.
    I’ve known one true daughter of Finland and she was good to look at and talk to back then.
    Unlikely now.
    Anyway, Finland has lost its way.
    Alas and alack.
    The way of the world.
    Water gurgling and swirling down the drain. . .

  6. Willy


    1. Search up “happiest place on earth”.
    2. Ignore any Disneyland crap. It’s been way overpriced for years now.
    3. Create a haiku on what you’ve found and post it here.

    I was gonna use Brazil’s Kalapalo tribes as my example, where according to the folks at the National Geographic Explorer, “everybody shares everything and greed is unknown”. But I noticed that the men have started wearing pants. It’s probably a matter of time before Nike, Swatch and cell phone companies move in, after of course, the grandstands and motels get built to make things comfier for the tourists.

    I was trying to infer that too many American economists always rate success in terms of business dollars and never the overall satisfaction with life.

  7. anon y'mouse

    isn’t part of the brainwash that is Standard Econ that maximizing the profits of the capitalist overlords IS maximizing “satisfaction” (ok, not with life per se, but with the exchange of money for goods).

    they believe that is the entire point. that is exactly what is wrong with standard econ, and modifying it to include “externalities”, even positive ones like quality of life much less the negative ones people keep trying to put a price on for the great Climatocalypse, probably won’t change that.

    we will have to make entirely different conceptual constructs, use a completely different set of assumptions to draw different charts on our bedroom walls and take different measurements to fine tune those assumptions.

    even the data we tend to gather, and how we gather it is affected by the idea that Cash is King, minimizing “expenses” (labor being the most offensive of these) is next to godliness, etc.

  8. Kantele

    What do you mean by a true daughter of Finland back in the day, unlikely now, and it’s lost it’s way? Wondering because I have Finnish ancestry but never been there. What is it’s relation to the future of labor?

  9. Altandmain

    Ian, there are other reasons to be hopeful.

    Young people today tend to be economically more left wing. The Occupy movement was suppressed in the US as was the Bernie Sanders campaign, but they can’t suppress the anger that started those movements.

    Similarly, the rise of Trump was heavily due to the loss of living standards in the US from the so called “free trade agreements”. We saw Trump take the party economically to the left, and arguably more left wing in economics in regards to middle class manufacturing than Hillary Clinton. Trump failed to deliver of course, but the main issue is that the right wing economics has lost legitimacy among a main part of the Republican base. So too has the tax cuts for rich that Trump pushed.

    These events set the stage, potentially for a future more astute politician to rebuild the New Deal Coalition. It would be something that unifies the working class, with the economic views of Sanders, the cultural views that are moderate, with 2 wings of the party, an economically left, culturally conservative wing and an economically left, culturally left wing.

    In other words, a New Deal like structure.

    The major challenge facing Democrats is that race, gender, identity politics, and religion appear to trump economics, at least as far as politically engaged primary-election voters go. The old-line Democrats were an economic liberal party with socially conservative and socially liberal wings (the social liberals, in fact, were in a minority). The new Democrats are a socially liberal party with an economic conservative wing (neoliberals) and a progressive economic wing.
    So the price of a new New Deal majority would be to let Democrats welcome abortion critics and opponents of mass immigration, so long as they favored a higher minimum wage, less “synthetic immigration,” and a pause on globalization (which facilitates international labor arbitrage). In the words of John Judis:

    “As long as corporations are free to roam the globe in search of lower wages and taxes, and as long as the United States opens its borders to millions of unskilled immigrants, liberals will not be able to create bountiful, equitable societies, where people are free from basic anxieties about obtaining health care, education and housing.”

    The ruling class has clearly lost a large amount of its political legitimacy. Another major consideration is that the next couple of decades will be dominated by a rising China. That will further put pressure in the idea of liberal democracy (really just a plutocracy pretending to be something it isn’t).

    @StewartM, in the case of immigration, unfortunately the impacts appear to be negative for the working class.

    In the case of Canada, there’s far too little housing being built to accommodate the population. So yes, I do think that the policies of high immigration are harmful. If the goal were to purely address housing, then only immigrants with skills in specialized fields, such as a construction would be allowed in. This would mean a much lower amount of immigrants allowed in.

    Furthermore, the high paying jobs that many people are coming to Canada for do not exist in Canada.

    A recent Statistics Canada report suggested there are no widespread labour shortages for jobs that require high levels of education as the number of unemployed Canadians with a bachelor’s degree or higher education since 2016 has always exceeded the number of vacant positions that require at least an undergraduate education.

    The article discusses how many immigrants now face underemployment. It’s a clear sign of oversupply of labor. That means lower bargaining power for labor. It’s bad for Canadians who now have to accept lower wages and bad for the immigrants who come to Canada because they will find themselves not getting the high paying jobs and by extension, lifestyle that they came for. The only winner are the capitalists.

    I’d go even further. The cultural left has stabbed the working class in the back on immigration. Note the discussion about immigration always ends with the left using an ad hominem against their critics. Accusing critics of immigration of Racism has become for advocates of immigration what accusing the workers who want a living wage of Socialism has become for the Conservatives. When an ideology’s main argument is an insult, they clearly don’t have the worker’s best interests at heart.

    As far as long term impacts? One might be that Trudeau, our current Prime Minister, and people who share his views are discredited. He did lie to the Canadian public about electoral reform, but for parties that have a below 30% support, first past the post tends to work against them. In the long run, we might see a rerun of the backlash in Europe, even without proportional representation.

  10. Ian Welsh

    Altandmain, yes, agreed that there are some reasons for optimism.

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