Notes on Economics - Globalization
Going back to the undeveloped note file, here are a few more, about the economy and globalization:
Former Labor Secretary Robert Reich says the key to countering globalization is to create jobs in which workers add value to products that make them more competitive. He says technology, not necessarily outsourcing, is what is displacing American workers.
Fed Chair Ben Bernacke says American workers can upgrade technological skills to compete and be paid more to keep up with inflation, but he does not mention the role unions could play in helping workers negotiate this.
American workers have been the most productive in the world for decades. Higher productivity means growth without inflation, but that can be overcome in global competition if the worker pays too much tax to support war costs.
Globalization in the financial world has resulted in new speed records for spreading financial meltdown.
posted by Tom Blake | 3:41 PM
5 Comments:
"Globalization in the financial world has set new speed records for financial meltdown" - I don't thinks so. The finacial meltdown we see today has been the subject of many analyses by finacial experts. What I read is the meltdown was a US homegrown thing that spread world wide. The basic cause was the subprime mortgages that were bundled with sound mortgages and sold as some kind of financial derivative. The geniuses who did this primarily worked for US corporations.
While the rest of the world can blame it on us, despite that many foreign institutions played along, we cannot blame it on the foreigners. The US financial institutions created this mess, and the US taxpayer and many foreigners will pay for it.
Ben Bernancke is full of petooie when he says American workers can upgrade their skills. And so are you, Tom, when you think unions can play any meaningful part in this problem. When you are 20, 40, 60 or 80 years old it is too late to upgrade your skills in any significant way. Yes, you may learn to use excel, or you might learn more about the new government standards in your profession, but you're in a box that most people can't get out of.
We need to improve our children's education and expectations. Many of the children of the upper middle class and middle class expect they will do as well as their parents, but don't work at in school or in their free time.
They will be sadly surprised when they try to enter the workforce. Meanwhile immigrants who have a strong work ethic will do well as always for themselves and the US.
What about labor unions? They don't admonish parents to encourage (or demand) their children to do well in school and to prepare thenselves for the future of the US in science and engineering fields. No, those fields are too hard.
These parents spend their energies on blocking any efforts to to raise scholastic standards. They say the new standards require too much time away from their children enjoying their youth. They may do this out of a feeling guilt because they are spending far over 40 hours at work and their children are without their company and discipline.
So labor unions are reactionary institutions, unprepared to really help the American economy. We need imaginitive thoughts. We don't need more protectionism of jobs that were invented decades ago.
John from Phoenix
John, I was not saying the world spread the financial crisis to the US; I know the US started it. My point was that globalization of the financial world, led by the US, sped up the meltdown. One big example is the unit AIG set up in London that came up with the idea of the infamous credit default swap, which AIG then marketed worldwide.
I do not agree that workers are trapped at 40, and certainly not by 20, and I do think that unions can play a role in negotiating for worker retraining provisions in union contracts, including contract renegotiations such as in the current economic mess. I do agree that encouraging our children to get the best possible education is crucial. We are fortunate to have a President who is a role model of how the process can work. But everyone is not traditional college material. Technical colleges which train workers in skilled crafts and trades should continue to be fostered. Unskilled and semi-skilled manual labor jobs are not just for new immigrants and those working their way through school; some workers are destined to make careers in these areas, and they should be respected and treated with economic fairness.
President Obama has called upon the parents of America to make their homes ready learning environments in which the parents themselves play a vital role. Parents have been quick to criticize the public schools and teachers and at first embraced the NCLB idea of placing on them all blame for failure, measured by simple testing. Now more parents are realizing lack of parental involvement at home and at the school may also be part of the problem, and that the NCLB testing may be unreasonably simplistic. For example, one problem with NCLB is that the initial language barrier for immigrant students was not adequately considered.
I'm not sure I understand your point about unions not encouraging students to study hard to become scientists and engineers. I think it would be an unusual union parent who did not want his or her child to work hard at studying and to graduate from college in science or engineering. I cannot recall you ever having said anything favorable about labor unions, so your denigration of them as reactionary and protectionist is unsurprising. I seriously wonder whether you think labor unionism is inherently a bad idea.
The strong immigrant work ethic is a generalization, and as such is generally true. But we should not oversimplify and we should analyze it deeper. For example, if we can generalize that Asian immigrants do well academically and that Hispanics work diligently at manual labor, we should inquire as to whether Asian parents might push academics too hard for the overall good of the child, and whether Hispanic business owners keep employees in sweat shop conditions.
Lest we think the acquisition of college credentials is an end all, recall the idiot who finally vacated the White House in January was our first President with an MBA degree, and most of the people who led the world into the current economic shambles probably were also college graduates.
Tom,
You might recall that my first wife's father was a union leader in Portland Oregon. It's been toolong, but I think he was secretary of the AFl-CIO. When he died in 1976 (or so I remember)the funeral service was crowded with union and civic leaders. There were literally people standing outside the church who could not get in. (Caholic Church - his name was McCarthy.) He was also a WWII veteran, and my then wife Nancy was presented with a flag at the funeral. That ceremony brought her to her knees in grief.
A little later a park was was built on the Willammette River and named McCarthy Park in his honor. It is still there. You should take a trip to Portland and visit it.
I know at the end of his life he became disillusioned by what the union movement had become. The "us against them" attitude that had sparked the union movement in the early days had become passe way back in the early 70's. My father-in-law was spending most of his time defending stupid grievences brought forward by lazy slobs. He had no choice - that was his job.
So the "us against them" was an anachronism way back in the 70's.
But it is still with us. Look at GM. The only way they can get any cooperation from the unions is to declare bankruptcy, the approach that Obama is now taking. By declaring bankruptcy, GM can shed itself from the recalcitrance of the unions and work for a unified solution to GM's problems.
I love the history of the union movement. I think unions can still play an important role. But it has to be one of cooperation, not confrontation.
In all my years as a member of the management "class" I always thought of myself as a member of a team. I had people reporting to me who had skills far beyond my abilities. I also had hard workers who delivered the goods. My role in the team was to set goals, monitor progress, clear obstacles, and make whatever changes were necessary to meet the goals.
The "us against them" mentality of the early union movement has to be eliminated because it is so obsolete.
I love the history and spirit of the early union movement. That time is past.
John from Phoenix
I met Nancy's Dad at your wedding. I see McCarthy Park is on Swan Island. Next time I am down there, I will visit it and give him a salute of respect.
The problem at GM is with management. David Brooks points out in this NYT op ed, that GM has been in the restructuring business for 30 years, all while continuing to build crappier cars. Cutting labor costs is not their main problem. Whatever solution is found will involve the unions cooperating, but there is no reason for the unions to seriously compromise until GM has a worthwhile idea of how to survive.
I agree the days of Pinkertons shooting strikers are gone, but unions are still under constant attack by some powerful entities like the Chamber of Commerce and the Republican Party. We have to be careful about pre-maturely burying animosity to unions. When I was ready to help lead a union organizing effort at a Safeco subsidiary where I worked in 1973, I expressed to NLRB attorneys concern for my job, and was told not to worry, because "this is not the 1930s". I was fired the next day. Reagan responded to the Air Traffic Contollers Union concerns about air safety not by cooperation, but by union busting. The Chamber of Commerce is dedicated to undermining unionism at every opportunity.
Cooperation is a two way street. It takes two to Tango just like it takes two to tangle. All negotiations for contracts, including labor negotiations, have elements of co-operation as well as contention. The National Labor Relations Act requires both parties to negotiate in good faith.
Rather than organize workers from the grass roots up, Teamster leader Dave Beck organized employers, sometimes with intimidation, but usually by showing them how teamster contracts are good for business. My Italian grandfather was President of the union at Armour in Spokane and was always able to sit down with the company and come up with a contract without a strike. On grievances, Grandpa got involved with each complaint as early as possible, weeded out the bogus ones and mediated the others.
I have several notes on economics and unions which I will be posting soon, as a new article.
Tom,
I agree with what you wrote. My father-in-law was months away from his final heart attack when he expressed his weariness to me. Several earlier heart attacks had left him in a weakened state.
In his earlier healthier state he probably laughed off the bogus grievences.
Nevertheless, the union movement has changed substantially from the mid 70's. It is very weak today.
I believe there is a role for labor unions today, but I am not smart enoug to see what that role should be.
John from Phoenix
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