November 30, 2012

Reservoir Clerks

From an LA Times story on the strike at the giant L.A. / Long Beach port, which handles 40% of America's cargo tonnage:
The small band of strikers that has effectively shut down the nation's busiest shipping complex forced two huge cargo ships to head for other ports Thursday and kept at least three others away, hobbling an economic powerhouse in Southern California. 
The disruption is costing an estimated $1 billion a day at the ports of Los Angeles and Long Beach, on which some 600,000 truckers, dockworkers, trading companies and others depend for their livelihoods. 
"The longer it goes, the more the impacts increase," said Paul Bingham, an economist with infrastructure consulting firm CDM Smith. "Retailers will have stock outages, lost sales for products not delivered. There will be shutdowns in factories, in manufacturing when they run out of parts." 
Despite the union's size — about 800 members of a unit of the International Longshore and Warehouse Union — it has managed to flex big muscles. Unlike almost anywhere else in the nation, union loyalty is strong at the country's ports. Neither the longshoremen nor the truckers are crossing the tiny union's picket lines. 
The strike started at the L.A. port's largest terminal Tuesday and spread Wednesday to 10 of the two ports' 14 cargo terminals. These resemble seaside parking lots where long metal containers are loaded and unloaded with the help of giant cranes. 
The union contends that the dispute is over job security and the transfer of work from higher-paid union members to lower-paid employees in other countries. The 14-employer management group says that no jobs have been outsourced and that the union wants to continue a practice called "featherbedding," or bringing in temporary workers even when there is no work. 
... Maritime unions "have successfully organized one of the most vital links in the supply chain, and it's a tradition they nurture with all of their younger workers," said Nelson Lichtenstein, a UC Santa Barbara history professor and workplace expert. "They have a very strong ideological sense of who they are, and for now they are strong." 
In Los Angeles and Long Beach, the 800 clerical workers have been able to shut down most of the ports because the 10,000-member dockworkers union is honoring the picket lines. Work continues at only four cargo terminals, where the office clerical unit has no workers. 
Stephen Berry, lead negotiator for the shipping lines and cargo terminals, said the clerical workers have been offered a deal that includes "absolute job security," a raise that would take average annual pay to $195,000 from $165,000, 11 weeks' paid vacation and a generous pension increase.

I believe that $195,000 figure is including benefits. In any case, being a unionized dockworker is a famously good job in the L.A./Long Beach area. I presume that to get one of these jobs, you need to be connected. For example, from Quentin Tarantino's Reservoir Dogs, where Vic (Michael Madsen's Mr. Blonde) has just done four years in prison without squealing on his gangster bosses Nice Guy Eddie and Joe. Now, Vic's parole officer is insisting he get a real job instead of going back to pulling stickups for Eddie and Joe:
EDDIE
We can
give you a lot of legitimate jobs.
Put you on the rotation at Long
Beach as a dock worker. 
VIC
I don't wanna lift crates. 
EDDIE
You don't hafta .... You
don't really work there. But as
far as the records are concerned,
you do. I call up Matthews, the
foreman, tell him he's got a new
guy. You're on the schedule. You
got a timecard, it's clocked in
and out for you everyday, and you
get a pay check at the end of the
week. And ya know dock workers
don't do too bad. So you can move
into a halfway decent place ...
And if Koons [Vic's parole officer] ever wants to
make a surprise visit, you're gone
that day. That day we sent you to
Tustin. ... Part of your job is goin
different places - and we got
places all over the place. 
JOE
(to Vic)
Didn't I tell ya not to worry?
(to Eddie)
Vic was worried. 
EDDIE
Me and you'll drive down to Long
Beach tomorrow. I'll introduce
you to Matthews, tell him what's
going on. 
VIC
That's great, guy, thanks a bunch.
(pause)
When do you think you'll need me
for real work?

This is all part of Sailer's Rule of Unions that unions are strongest for the guys who seemingly need them the least: baseball players, Chicago Symphony musicians, and so forth.

The Port of Los Angeles/Long Beach represents an enormous fixed investment that can't be easily replaced anywhere (although the government of Mexico has been trying to build a competitor for many years now, and the government of Panama is expanding the Canal to siphon off business). Therefore, the Harbor generates huge amounts of wealth and the various parties involved clash over how to divvy it up. The dockworkers are a tough bunch  and when they are not happy, unfortunate things seem to happen. When the workers are unhappy you should probably, you know, watch your step, because accidents can happen. Thus, they get paid well.

You see similar strong unions where there are huge fixed investments that can't easily be moved somewhere else in pursuit of cheaper wages, such as Detroit auto factories and mines.

But the SoCal dock unions have managed to stay within within limits that keep the other players from pulling up stakes and relocating to a different port.

In contrast, the dockworker's union in mid-20th Century San Francisco (led by Harry Bridges) was so larcenous that San Francisco's remarkable natural harbor was bypassed by shippers in favor of the artificial harbor of Los Angeles. Now, containerized shipping makes it harder for stevedores to outright steal cargo, so the customers are more or less willing to pay high wages in L.A., at least until Mexico's new Pacific ports get up to speed.

Public sympathies have turned very anti-union over my lifetime. In fact, I'm not sure they were ever all that pro-union. Strikes are extremely agitating for 3rd parties, partly because they happen on the strikers' schedule, not the bystanders. Presumably, the dock clerks picked the Christmas Rush for a strike precisely because so many businesses across the country are desperate to get deliveries before December 24.

Similarly, if you own a business, you don't want to be in a perfectly competitive market, either. You want to figure out a way to grab a little bit of monopoly power. You want to be Apple not Dell, Microsoft not Digital Resources, Carlos Slim not some unconnected telecom entrepreneur.

I know they teach you all about the wonders of perfectly competitive markets in Econ 101, but, you know what? You don't want to be stuck competing in a perfectly competitive market. You want to be well set up in a defensible corner where you aren't facing perfect competition.

82 comments:

Anonymous said...

Every strike in Long Beach makes it that much easier for Mexico to supplant CA.

Anonymous said...

Please be aware, dear iSteve readers, that when this union is eventually crushed and these guys replaced by Mexicans, it is not you who will benefit, but rather people like Mitt Romney. You have little or no leverage with your boss, and the more people like this get tossed out if the middle class and replaced by cheap foreigners, the less power you have and the more the leverage the hereditary financier class has.

Anonymous said...

Steve, you actually are wrong about the Longshoremen. The east coast longshoremen were the corrupt, mafia-owned ones under the ILA who inspired Elia Kazan. The West Coast longshoremen under Harry Bridges and the ILWU were ferocious and aggressive but actually pretty honest. For example, they didn't resist automation, as long as the one button-pushing job was done by one of their guys. Cargo moved from SF to Oakland and LA more because of better rail links and San Francisco real estate getting ridiculously expensive.

desert lady said...

"Public sympathies have turned very anti-union over my lifetime. "


no curiosity as to why? You conservatives are curiously incurious.

Anonymous said...

The "strike" at LAX before T-giving (it was actually not a labor vs. mgmt action in the technical sense, more of a squabble between competitive syndicates) fizzled but I was really marveling at the assumptions implied by the timing of that--is there any setting LESS likely than a modern U.S. airport to bring the non-union public's sympathies in line with organized labor?

L'Internationale said...

re: "Please be aware, dear iSteve readers"

Thanks for that tip there, Friedrich Engels. Of course Mitt Romney isn't "on my side" but I'm sure if I comply with whatever's advised by Dean Vogel, Caltrans, Lee Baca, and the corrections officers' union, it'll turn out A-OK for little old me in the end. At least it's not the worse of 2 evils!

sunbeam said...

Geez exactly when did SF get so expensive? I've done some reading on the whole Haight Ashbury scene in the 60's and SF was a town where you could support yourself washing dishes in a diner back then.

It was pretty affordable, beautiful, cultured, which is why all the hippies were there (along with the schools of course).

Despite whatever political traditions were around then, SF wouldn't have become what it was if it wasn't affordable back then.

So exactly what happened? I've seen the theory here that it was environmental regulation, but that doesn't explain why real estate and every other cost of living exploded the way it has in roughly 50 years in that city (and many of the other large cities).

Was SF more expensive than Atlanta or St Louis back then? Or did a Budweiser and a pack of Lucky Strikes cost the same thing everywhere? Were movies and museum admissions more than other large cities? Or has the sheer cost of things increased inordinately in just select cities?

umm... said...

Public sympathies have turned very anti-union over my lifetime

1950s L.A./Orange County was pretty much the most vociferously anti-labor metro in the entire country (partially due to being founded by Midwesterners escaping that problem) so it could be another case of Southern California setting the trends for the rest of the nation.

BTW you mean Digital Research, not "Resources"

Anonymous said...

Strikes aren't about sympathy anymore they are about intimidation. It is little more than a shake down. This is especially clear in Europe. It will also become increasingly clear as Steve's point about strikes benefit those who least need it becomes blatantly obvious. Shrinking pie=bigger pieces for those who take with plenty of useful idiots like desert lady cheering on the "workers."

If you are going to distill an issue to qui bono rather than right and wrong I'll take Mitt Romney every time because he doesn't keep me from getting an XBox 1040 under my christmas tree.

DaveinHackensack said...

" This is all part of Sailer's Rule of Unions that unions are strongest for the guys who seemingly need them the least: baseball players, Chicago Symphony musicians, and so forth.

[...]

You see similar strong unions where there are huge fixed investments that can't easily be moved somewhere else in pursuit of cheaper wages, such as Detroit auto factories and mines."


This isn't quite right, Steve. The beneficiaries of major league sports unions aren't the players who need it least -- the stars are making more than 10x the league minimum -- but the marginal pro players. And it isn't the fixed investment that makes Detroit auto factories amenable to unions, but the political/legal environment. Mercedes has plenty of fixed investment in its non-union Alabama factory.

BTW, part of Artie Lange's memoir, "Too Fat Too Fish" deals with his time working as a dockworker in the Port of Newark, NJ. The port there tried to bring in Portuguese to work for half the union hourly rate, and the union members went on strike and threw rocks at them. The book also paints a picture of what this kind of good-paying unionized job means to someone from Artie Lange's background. Republican pols should read it.

"Similarly, if you are in business, you don't want to be in a perfectly competitive market, either. You want to figure out a way to grab a little bit of monopoly power. You want to be Apple not Dell, Microsoft not Digital Resources, Carlos Slim not some unconnected telecom entrepreneur."

Sure, you want a competitive advantage -- a "moat" as Buffett calls it. But there's a difference between creating your own moat through advantages in design, quality, innovation, intellectual property, logistics, etc., as Apple has, and doing so through rent-seeking, as Carlos Slim has.

anony-mouse said...

Er, the 'Sailer' rule of unionism seems very similar to the Gompers idea when he lead the AFL, that is of only having 'craft' unions. He opposed unionising unskilled workers.

en.wikipedia.org/wiki/American_Federation_of_Labor

Anonymous said...

You're absolutely right Steve. Businessmen want quasi-monopolies not "the free market".

The goal is to be ABC/CBS/Disney/Comcast/Proctor Gamble/Boeing/AT&T/Exxon/Goldman Sachs.

Some business with a captive market that's "too big too fail". Or one where a few well-placed "campaign contributions" can ensure success.

Anonymous said...

That's true in La/Orange in the 1950's but the aerospace industry had was unionized a lot. From 1950 to 1980 was the heyday of LA/because of aerospace and that's before a lot of hispanics came in.

Auntie Analogue said...

By the end of the 1950's unions killed the U.S. Merchant Marine which had, before and during WWII, risen to world-dominance. The various maritime unions strong-armed laws through Congress that simply made it prohibitively costly for U.S. and foreign manufacturers, importers, exporters to use U.S.-flagged ships to move their goods. One of these let's-shoot-American-workers-in-the-foot stupid laws stipulates that no U.S.-flagged merchant vessel that has passenger berths may carry paassengers between U.S. ports, so that now foreign flagged ships carry those passengers between U.S. ports. These unions also destroyed the Merchant Marine's passenger liner businesses, which is why you nowadays see precious few U.S.-flagged, U.S.- crewed cruise ships or trans-oceanic passenger ships. By the same token foreign owner-operators took advantage of the vacuum created by unions' depletion of the U.S. Merchant Marine - most of the world's cargoes, even those to and from U.S. ports, are now carried in foreign-flagged vessels.

Unions choking off the Merchant Marine also withered the U.S. shipbuilding industry, whose share of naval and Coast Guard vessel construction is now far larger than it was when the yards built a great many more merchant vessels. Killing shipbuilding had larger, wider consequences, such as shrinking the U.S. steel industry and wiping out multitudes of firms that had provided the plethora of fittings, equipment, and subassemblies for U.S.-built merchant ships. Further, the union scourge also forced U.S. shipping lines to make-do with old vessels that were long past their safe working lives - as late as the 1990's U.S. shipping lines were still using, chiefly as carriers of bulk cargoes, worn out, held-together-by-rust, WWII-built Victory ships.

Don't even ask me about no-show longshoremen's and other unions' no-show jobs: I grew up in New Jersey and my uncle worked the Hoboken docks - the very docks Elia Kazan captured in 'On The Waterfront.' In fact, my uncle was one of the real-life habitués of those barges that Kazan used for the movie's union officials' headquarters. In my mind's eye I can still vividly see those shabby old barges, one of which wore an ancient, weathered, flaking coat of forest green paint, floating languidly down at their Hoboken pier.

Killing the U.S. Merchant Marine and shipbuilding and ship chandler businesess deprived countless Americans of dependable, well-paid employment and gave huge impetus to the advance of globalization in every industry and business and in high finance. This also contributed massively to the urban blight in U.S. port cities (yes, even in Detroit and the other Great Lakes ports), as it simply wiped out the solid jobs of countless seamen, shipping line employees, and workers in shipping equipment and support firms, which only accelerated the decline in wages in those cities and created a vacuum in which the urban underclass grew.

Anonymous said...

Midwestern, actually RC Holies I believe was the most anti-union, founder of the OC Register, but most business were not very anti-union in Orange County in the early 1970s. La was less conservative by the 1970's and voted for Humphrey in 1968. Holies lived today he would have voted for Ron Paul or Gary Johnson.

Anonymous said...

@anonny-mouse

yep. just like the left used to oppose immigration

Matthew said...

"the more people like this get tossed out if the middle class and replaced by cheap foreigners, the less power you have and the more the leverage the hereditary financier class has."

The average American worker has been crushed, past tense. Preserving the power of the LA longshoremen doesn't do them a bit of good. The white share of California's population has gone from 80% in 1970 to 40% in 2011. Ethnic cleansing in the name of corporate profits.

I feel a twinge of hate/envy for the dockworkers' and policemens' unions in California for getting paychecks that even those of us who busted our humps in college would envy, until I remember all the assholes on Wall Street who are really effing things up...

Matthew said...

"And it isn't the fixed investment that makes Detroit auto factories amenable to unions, but the political/legal environment. Mercedes has plenty of fixed investment in its non-union Alabama factory."

American car companies have been building in the Rust Belt for going on a century now. Of course some asshole employee of an American car company in Michigan or Ohio feels entitled to belong to a union and to stick it to Ford or GM, because they're supposed to build their cars there.

But a Mercedes plant in Alabama? Every worker at that plant knows that Mercedes's presence there is entirely optional.

And whatever happened to the airline pilots-stewardesses-mechanics unions? I don't notice them much anymore. Have they finished repeatedly bankrupting their employers, are they on hiatus, what?

jody said...

"The port there tried to bring in Portuguese to work for half the union hourly rate, and the union members went on strike and threw rocks at them."
=======================

Throwing rocks at people who need a job, such thuggish behavior and you support that?

Anonymous said...

I crossed a picket line for the first time a few weeks back--grocery clerks upset about the company wanting them to pay more into their medical package. I asked the picketers if they were in favor of Obamacare. When the first two I asked said "yes," I asked a third if he voted for Obama. He said "yes."

I walked into the store, which was not the store at which I usually shopped, btw. I made sure to go there two more times before they reached an agreement. Darn. Crossing that line gave me some satisfaction.

Mark Mallarde said...

Microsoft is a better example than Apple. Microsoft had a monopoly power of sorts and still does, to some degree.

MSFT prospers because of its barriers to entry and the positive network externatlities (is that right?) of everyone using the same OS.

This might change in a big way with Windows 8.

Luke Lea said...

Well expressed. You really are one of the best journalists alive. I nominated you for one of Foreign Policy's 100 most influential persons, as one who writes about things no one else wants to think about.

Luke Lea said...

@ sunbeam - "Geez exactly when did SF get so expensive? I've done some reading on the whole Haight Ashbury scene in the 60's and SF was a town where you could support yourself washing dishes in a diner back then."

So true. I lived in the Haight -- 130 Rivoli Street -- with four other friends and my share of the rent for a nice apartment was $30/month. This was 1967-1968. I had a job as a part-time janitor in a doctor's office, 45 minutes a day, five days a week, for $100/mo which paid all the bills: food, rent, gas, utilities. Of course I was poor.

Reg Cæsar said...

You want to be well set up in a defensible little corner where you aren't facing perfect competition.

I can recommend two business books that explain how to do just that. Milind Lele's Monopoly Rules shows, among other examples, how Honda milked a five-year monopoly on folding seats in minivans, because retooling takes so long in that business.

For a more academic spin, try Blue Ocean Strategy by W. Chan Kim and Renée Mauborgne of INSEAD. The "red ocean" is where the sharks are, so you want the blue.

Note that both authors are Asian.

DaveinHackensack said...

"Throwing rocks at people who need a job, such thuggish behavior and you support that?"

No, I don't support that, nor do I support thuggish behavior generally. But I do think Republican pols should read the book to get a sense of where blue collar whites like Artie Lange are coming from.

Anonymous said...

It's also very significant that such an enormous proportion of America's imports and thus household domestic consumption,enters via one single 'choke point' that faces the productive nations of east Asia.
Tp put it bluntly, the USA is dependent on the factories of China, Japan, Korea etc for basically everything one buys at Walmart from your playstation to your shoes and socks. Thus the dockers potentially exert an enormous amout of power.

Brett_McS said...

Unfortunately, more and more, "what the supplier wants" is getting to be more important than "what the customer wants". It's a part of the general trend toward Fascism.

Anonymous said...

The only 'law' in economics that actually matters is the law of supply and demand.
Basically, as Steve says, workers (or any other productive agents in the economy, as it happens) who actually have real scarcity and 'industrial muscle' (in the fact that are vitaly necessary to the functioning of life and cannot be by-passed), can more or less name their own price.
As Steve also said, the downtrodden and exploited amongst workers those who can be dismissed and relaced at will by virtually anyone in the street, and who simply do not matter in terms of leverage, need unions more than anyone, but unions are ineffective to them, precisely because they have zero bargainin power.
I repeat, everyting is supply and demand, and nothing else.

Unanimous said...

"Every strike in Long Beach makes it that much easier for Mexico to supplant CA."

Ha ha ha ha! Have you ever been to Mexico?

Anonymous said...

Sunbeam: Geez exactly when did SF get so expensive?

After 1965. There was a show on Thursdays back then called "Love on a Rooftop" where a newlywed couple was trying to make a go of it in San Francisco on his crappy $85 a week salary.

Anonymous said...

This is true about the left use to opposed illegal immirgaiotn and some legal immirgaiotn. Cesar Chavez is different from his relatives today. In the Cnetral Valley the right were the bad guys they pushed for illegal immirgants to cut his union but to keep wages down, however, chavez opposed mechinzation since a lot of low skilled workers in his unions would lose jobs.

Anonymous said...

San Fran has been above the cost of living since the 1980's. The cost difference between Ca and Texas is believe it or not, Texas has a tougher lending law that prevents speculation. Texas had a housing bubble and Ann Richardson in the 1980's tighted the law. California is more deregulation in lending money than Texas if you are buying a house.

sunbeam said...

Luke Lea wrote:

"@ sunbeam - "Geez exactly when did SF get so expensive? I've done some reading on the whole Haight Ashbury scene in the 60's and SF was a town where you could support yourself washing dishes in a diner back then."

So true. I lived in the Haight -- 130 Rivoli Street -- with four other friends and my share of the rent for a nice apartment was $30/month. This was 1967-1968. I had a job as a part-time janitor in a doctor's office, 45 minutes a day, five days a week, for $100/mo which paid all the bills: food, rent, gas, utilities. Of course I was poor."

I didn't include it before because my posts ballon in word count.

But a lot of American cities are priced out of a blue collar person's ability to live there, which also means a heck of a commute or a business that depends on blue collar work can't operate there. Unless they make other "arrangements" of a sort (Illegals).

Look as short a time ago as All in the Family you had working class New Yorkers and it seemed to fit.

Now any show with people that work as janitors or in a factory in New York seems kind of contrived.

The thing is that unless you are getting government help you have to make seriously good money to live in these modern cities. Assuming no food stamps, unpaid emergency room usage, any other kind of transfer payment what kind of money do I need to make it in LA, SF, or NY and just be a poor person who doesn't starve? My eyeball estimate is I would need to make 50,000 a year to live in New York the same kind of lifestyle I had in Alabama as a poor person. (though even in Alabama a lot are getting public assistance).

It's not a new theme on here, but this blog post makes me realize just how stark it is.

The people in shows like The Rockford Files, The Honeymooners, All in the Family, heck even stuff like Hawaii 5-0 seem like anachronisms or like they live in some country foreign to what we have now.

Me personally? I would much prefer LA pre-80's, SF in the 60's, NY prior to the 70's I guess.

Certainly immigration, environmental regulations, and the impact of minorities had some impact. (Although I'd be willing to bet all three of those cities have lower percentages and probably absolute numbers of black residents now).

I want to go back by any means necessary. And if it takes removing all the Republicans, 9/10's of the Democrats from Congress, and confiscating the assets of every banker in America I'm willing to do it. If it came to armed insurrection, well I wouldn't be much good at it, but I would support it.

I haven't seen too much the past few years that's worth wiping your ass with (if published in a paper). This is actually worth dying for.

Most of you guys talk about race and group loyalty and all kinds of things, and have no idea what that means. Scott Walker, Paul Ryan, and Eric Cantor threaten white America (at least my "white" America) a heck of a lot more than any Black elected government official ever will.

Anonymous said...

South Korea labor is not cheap its higher than Mexico and Korea wages are neaer the south in the US, Its per capita is 23,000 versus Mexico at 15,000.

SFG said...

"If you are going to distill an issue to qui bono rather than right and wrong I'll take Mitt Romney every time because he doesn't keep me from getting an XBox 1040 under my christmas tree."

Sure, until he fires whoever bought it for you and you can't get another one.

Big Bill said...

Sorry, Auntie Analogue, but foreign flag vessels destroyed the US Merchant Marine. US Ships were the first "factories" moved offshore. And how easy it was! Paint "Monrovia, Liberia" on the stern of your ship, pay $2000 to an agency in NYC, buy a $5 Liberian flag and you can fire all of your American sailors and replace them with Asians who will gladly work for $50 a month ($300 a month for licensed engineers!).

As a sailor (QMED-Any Rating)I saw the handwriting on the wall in the 1970's, sugar lips, so I became a lawyer, a member of the only union that will never be busted.

Screw those chumps on the bottom. Make 'em compete with Chinese coolies. We lawyers even broke the doctor's union.

Yeah. You guessed it. I fight for poor oppressed American companies like Apple and Nike keeping them Union (and American)-free.

I like that creative "Detroit died because of the SIU" rap. Americans are so brainwashed now they will fall for that. They actually believe they need Chinese, Paki and Indian scientists, doctors and engineers to take care of them.

Anonymous said...

Actually a lot of the business is going to British Columbia ports. Closer to China and good rail links to Chicago.

Conatus said...

Here are some numbers:
Union membership was 25% of the workforce in 1960, now it is 9%.
The Ginni Coefficient which measures income disparity was .37 in 1960 now it is .46.
Think they are connected? I do.
The law of supply and demand has been repealed in the media when it comes to labor, it is gone having been replaced by the 'jobs Americans won't do' boosheet.
Yeah these guys at the docks are getting outrageous salaries and bennies but it is one one hundredth of what the CEO's are getting in our winner-take-all(winner destroy all?) society.
I was in a steelworkers union and separated my shoulder falling on an I-beam when I was young, I got money. I was grateful for that, but in a Reaganesque scenario I would have been valueless and discarded like trash, like American labor has been since 1982.

Dan Kurt said...

re: "and the government of Panama is expanding the Canal to siphon off business" iSteve

Not exactly. A few years ago my wife and I did a Panama Canal trip on a Holland American line cruse. The canal passage started circa 5:30 a.m and finished roughly 12 hours later during which a Panamanian or two continuously (nearly) narrated the high points of the passage to the passengers over the ship’s loud speakers and closed circuit TVs. Given all the time for the narration some truth was slipped in such as being told that the new wider, larger canal which was to be completed in 2014 or so was GOING TO BE OWNED BY PANAMA BUT WAS BEING BUILT AND PAID FOR BY THE USA TAXPAYERS. America sure knows how to exploit the third world, no?

Dan Kurt

Svigor said...

Please be aware, dear iSteve readers, that when this union is eventually crushed and these guys replaced by Mexicans, it is not you who will benefit, but rather people like Mitt Romney. You have little or no leverage with your boss, and the more people like this get tossed out if the middle class and replaced by cheap foreigners, the less power you have and the more the leverage the hereditary financier class has.

Yes, the 95% of us that don't have union protection (and never will) must do all we can to protect the 5% who do.

Especially gov't unions, they're the holiest of holies.

I feel a twinge of hate/envy for the dockworkers' and policemens' unions in California for getting paychecks that even those of us who busted our humps in college would envy, until I remember all the assholes on Wall Street who are really effing things up...

The firemen and policecritters should have fun while it lasts. They're eating CA (lots of other places) alive. It won't be too long before they've devoured the whole thing.

Throwing rocks at people who need a job, such thuggish behavior and you support that?

Yeah, the scabs just wanted a better life for themselves and their families.

No, I don't support that, nor do I support thuggish behavior generally. But I do think Republican pols should read the book to get a sense of where blue collar whites like Artie Lange are coming from.

You mean, the ones who won't make a peep about the hordes of brown scabs jumping our border year after year? Those blue collar whites?

elvisd said...

"Unfortunately, more and more, "what the supplier wants" is getting to be more important than "what the customer wants". It's a part of the general trend toward Fascism."
OK, you threw the F word. Sorry if I'm a prig, but on posts like this, when somebody throws the Most Overused Word in the World, I call him out. Explain what you mean here and what you think "fascism" is.

Anonymous said...

Who ever said dealers want to be in a perfectly competitive market? That's the entire point - competition maximizes CONSUMER surplus.

For an Econ 101 insight, you sure whiffed on it.

Kylie said...

@ Auntie Analogue,

Thanks for yet another interesting and informative comment.

Mr. Anon said...

"Matthew said...

And whatever happened to the airline pilots-stewardesses-mechanics unions? I don't notice them much anymore. Have they finished repeatedly bankrupting their employers, are they on hiatus, what?"

No, they're still at it. American Airlines pilot's union has been staging a work slow-down for several months. They call in mechanical problems for every little nit-picky thing, which grounds the plane until the mechanics come out to deal with it, no matter how trivial it may be. Thanks to that, I had a flight delayed and would have missed my connection. I rebooked my flight with United, just so as to not give them my money. I still lost a day of my life though. I won't be flying AA again, if I can help it. Good work, pilot's union!

agnostic said...

The General Social Survey asks a question about how much confidence you have in "organized labor" (CONLABOR).

Over time, people saying "a great deal" hovers around 10-15%, and it doesn't show any strong swings up or down from the mid-1970s through today, although there is a slight dip in the mid-'80s.

Most of the change over time shows in the "hardly any" response. People felt more and more anti-union from the mid-'70s through the mid-'80s, by which time over 40% felt that way.

But since then it's trended steadily upward, so that only 30% feel that way now -- about what it was in the mid-'70s.

David Davenport said...

... the aerospace industry had was unionized a lot.

Hourly aerospace workers in Mexifornia are still unionized ... Usually the International Association of Machinists. No, Mexicans haven't taken over I.A.M.

It's white collar ( and white or yellow under the collar ) workers there in CA who are getting squeezed out of jobs and wage increases. The big brand name aerospace firms are lobbying hard to relax security rules to make it easier to replace native-born Americans with Asian immigrants, or else outsource white collar work to Asia or sometimes Russia.

Where are America's two newest airplane factories located? That is, factories that need hourly workers. Boeing has a new 787 airliner final assembly plant in South Carolina. Airbus is going to build an A330 assembly line in Alabama ... right-to-work states ... lower cost of living states... so-called Red States.

agnostic said...

I wonder how much of the cycles in confidence in unions has to do with cycles in corporate / managerial treatment of workers.

Over the past 20-25 years, managers have been more ruthless toward workers -- downsizing, outsourcing, etc. People respond by placing more confidence in unions, whether or not they act on this new mindset to organize their workplace.

The falling support for unions from roughly the 1960s through most of the '80s could have reflected increasingly better treatment of workers. Pop culture examples don't immediately spring to mind of the managerial class treating workers like disposable beasts of burden.

The prototypical businessman from that time is the entrepreneur or yuppie, not the emperor of some mega-conglomerate.

Back in the mid-century heyday of labor unions, there was plenty of suspicion of managers, and not just because of the Great Depression. That seemed to last through the post-war '40s and '50s -- even to the point that lower-ranking managers felt mistreated like fungible pawns in the company game. The Man in the Gray Flannel Suit.

The Jazz Age was another period of falling support for unions and seemingly better treatment by managers. Like the '80s, the '20s was an age of the underdog entrepreneur (The Great Gatsby), not a corporate dictator.

Contrast that with the earlier Gilded Age, when union support began exploding. The standard image of managerial treatment of workers was the Robber Baron.

Steve Sailer said...

"That's the entire point - competition maximizes CONSUMER surplus. For an Econ 101 insight, you sure whiffed on it."

Perfect competition for thee, not for me is the way to go.

Anonymous said...

Wow ordinary Americans being paid like Police, fire and University administrators, that's an outrage.

Anonymous said...

That's true in the 1980's a lot of factory work outside of aerospace was heavily Mexican. Remember California lost a lot in the early 1990's and other states as metnion SC and the other southern states were its cheaper to live and are right to work states have gain.

agnostic said...

The thread connecting those cycles is the trend in the crime rate, though the connection must be indirect.

In rising-crime periods, people band together more on a face-to-face level for mutual support, withdrawing some of their faith in remote outside experts / mercenaries. That would cause them to feel less of a need for unions. They can work out problems in the workplace more on their own.

That would also require managers being more sympathetic to such in-person appeals, not grievances mediated by an outside party like a national union. Strange as it may sound, maybe managers were more willing to meet workers half-way.

After all, the entrepreneur or yuppie isn't trying to build and run an empire -- that would leave too little time for socializing and partying. So compared to a corporate tyrant like Steve Jobs, he's less likely to treat workers like serfs.

Then in falling-crime periods, people feel less of a need to band together since the world is so much safer and more stable. Social relations become more mediated, which would increase support for unions as the way to deal with workplace disputes.

And on the managers' side, a safer and more stable environment makes it more attractive to take a mega-empire approach -- no point in doing that if the world looks like it's on the brink of the apocalypse, as it did during the '20s and the '80s. That then leads to more imperial treatment of workers, and of lower managers.

Even if people prefer a falling-crime environment, they should be aware of all sorts of other negative consequences that come from the rising feeling of safety. Such as the Robber Baron, Man in the Gray Flannel Suit, and Neo-Monopoly / Downsized and Outsourced Peon moods that characterized the most recent three falling-crime periods. And the greater labor friction from below that grew in response.

DaveinHackensack said...

Agnostic,

"I wonder how much of the cycles in confidence in unions has to do with cycles in corporate / managerial treatment of workers.

Over the past 20-25 years, managers have been more ruthless toward workers -- downsizing, outsourcing, etc. People respond by placing more confidence in unions, whether or not they act on this new mindset to organize their workplace."


This is just way too general to be useful, particularly as it ignores the split between union and right-to-work states. Foreign manufacturers have been adding jobs in right-to-work states over this time period, and they have been treating their workers well. Granted, part of the reason they have been treating their workers well is to ward off the prospect of unionization, but this says less about unions per se than the particularly destructive union that the UAW has been. Mercedes has manufactured quality cars profitably for years in unionized factories in Germany. It has also done so in non-unionized factories in the US.

Michael Anton said...

There are many reasons why SF used to be cheap and is now very, very expensive. Ah, what might have been, my father sold a Russian Hill Victorian in 1980 for a song, it would be worth millions today.

Anyway, as noted there are many explanations but the simplest is that from its founding until about WW2 California was like Alaska, Junior, with nice weather. It was very cut off from the rest of the country and very far from the major population centers, industries, cultural hubs and so on. Yes, the railroad came in the 1860s but it was still a long way, time-wise and geographically. To move to California from the East or Midwest (which many people did) was sort of like moving to America from Europe in that there was no looking back. Before widespread air travel, California was more like an American colony than an everyday integral part of the United States.

It boomed in a big way in WW2 and lots of people either settled to work in war industries (aerospace in LA, ship construction up north, plus lots of other stuff) or else they shipped out through SF, Oakland, LA, or SD. People saw how pleasant it was and more moved in droves.

As Steve has pointed out, California in 1950 was obviously the nicest place to live in the US, with great weather, a booming economy, high quality of life, low cost of living, good schools, high human capital, abundant natural resources, excellent scenery and recreation, and so on. Plus the great middle class suburban basins in LA, Orange, Santa Clara counties and so on were still orange groves by and large and not built out so you still had the "Texas effect" of room to grow in lots of directions.

This simply could not last. Word got out, people poured in, the citrus groves got paved, and the place filled up.

Anyway, SF was still relatively cheap through the '70s because its importance as a regional finance, law, publishing, advertising, business and cultural hub—kind of Manhattan, Jr., west of the Mississippi—declined as improvements in communications technology began the long concentration of all that activity into New York and to a lesser extent LA. In the '80s SF sort of reinvented itself as a Disneyland for sophisticated adults and as the playground for the tech set. The first time I recall reading in the Chron that SF had surpassed NYC for highest median home price in the nation was 1987.

Anonymous said...

Boosheet and bull poopy. Well you certainly lead the league in posters who post lame permutations of bs. I bet those two posters are David brooks and Ross douthat. Both those guys read your site right it's been a few weeks since you reminded us so I'm starting to forget.

Anonymous said...

Don't forget the cardinal pretty sure that was a book that came out in the fifties so the cardinal mood is an important one to keep in mind as well. Also the emperor of the ice cream but that's more a high crime phenomenon I think.

Matthew said...

"Perfect competition for thee, not for me is the way to go."

Yeah, if a guy sitting on a piece of intellectual or real property watches his investment increase a hundredfold. However, God forbid he be forced to increase what he pays his workers because of a skill or labor shortage, then he has the right to import as many peeps from India as he wants. Labor has no right to benefit from increased demand.

"Over the past 20-25 years, managers have been more ruthless toward workers -- downsizing, outsourcing, etc."

This because both parties are now tools of capital.

Anonymous said...

Wow ordinary Americans being paid like Police, fire and University administrators, that's an outrage.

Yes, it is. Because the vast majority of other ordinary Americans are paid 2-3 times less even when they have 20 years of education and PhD degrees in STEM.

Anonymous said...

That's true about the room in different directions, I think a new price factor is foreigners. San Fran is well known to foreigners while less say the Inland Empire or Orange County are not. So San Fran gets a lot of foreigners to buy homes while the Inalnd Empire gets mainly Canadians to buy property for rent or Orange County gets Chinese to buy into heavily chinese Irvine. So, property is not price up by foreign investment as much in the Inland empire or Orange County than San Fran or La.

Anonymous said...

No one with a phd in stem is getting paid a third of a policeman's salary that is silly.

Anonymous said...

"No one with a phd in stem is getting paid a third of a policeman's salary that is silly."

Huh?

For instance...

"An unusually high number of police officers at the state’s board-and-care facilities for the developmentally disabled have doubled their salaries with overtime, enabling some to earn more than $150,000 a year, a California Watch investigation has found.

The average salary for the 22 officers is about $124,000 a year."



Meanwhile, in STEM areas where there has historically been over-production (for instance, physics), it is an established pattern for young PhDs to embark on lengthy low-paying soft-money post-doc careers, with salaries ranging from $20K to $40K.

Norville Rogers said...

Steve, what's the relation to Microsoft with "Digital Resources?" Are you referring to the company, eventually bought by Utah-based Novell, that MS had eliminated back in the DOS days (of the legend, CEO out flying his plane the day IBM wanted to visit)

Norville Rogers said...

Nobody mentioned Eric Hoffer yet?

Anonymous said...

A few comments about STEM PhD postdocs. (The average salary is apparently around $40K. You can be an atom bomb physicist at Los Alamos for $39K!) Clearly, we're all going to die without cheap STEM immigrants!!!

"As for salaries, postdoc pay is relatively poor. The Sigma Xi study found that while a postdoc in their early 30s (the median age for postdocs) could expect a median salary of $38,000, the comparable figure for a young thirty-something with only a bachelor’s degree was $45,000. With grim humour, the authors noted that after factoring in their median 51 hour working week, a postdoc’s hourly wage is only slightly better than that of a janitor or caretaker at Harvard University."

And:

"Findings from the Initial Employment Survey of Physics PhDs, classes of 2005 & 2006"

"About 60% of the new PhD's in the classes of 2005 and 2006 accepted postdocs after receiving their degree.

... physics PhDs who did not hold US citizenship were far more likely to accept postdoctoral appointments than their US counterparts, 68% and 50% respectively...

... One reason such a large proportion of the non-US citizens accepted postdoctoral appointments was that their visa status would have to be changed to hold a permanent position in the US."



Of physics postdocs, 51% are US citizens. (Interesting survey at previous link, respondents comments sections are online: "our salary hardly cover the basic needs of a standard family", "The social disaster of postdocs has to do with the temporary nature of the job and was clear in advance", "Figuring out ways to make salaries more competitive,", "Either eliminate the whole institution or double salaries").

What's going on here is that it pays to have a compliant workforce willing to work for low-pay in STEM, just as in, say, smartphone or auto assembly. Universities like to
make easy money, I guess, who would have thought it.

A postdoc is still worth doing for love of the field... It's usually soft-money (runs out in 2-3 years), then it's on to the next gig, so it mitagates against having a family, etc...

For a semi-known diatribe on all this, see Katz's "Don't Become a Scientist!"

"The funding agencies are bemoaning the scarcity of young people interested in science when they themselves caused this scarcity by destroying science as a career."

Anonymous said...

Of course if there was more domestic production and less importation production would be more distributed and thus less vulnerable to bottlenecks at choke points like ports.

Anonymous said...

"Microsoft not Digital Resources"

Yeah, Steve clearly meant Digital Research, more often called just DRI, originally legally Intergalactic Digital Research, I believe.

I worked for DRI. Often when I say I worked for Digital Research, people think I worked for DEC research. Amazing how fast everyone forgets. Words, words...

Anonymous said...

Auntie Analogue;

Thanks for an interesting post. Unions also destroyed the great shipbuilding industry in Scotland and Northern Ireland.

Brett_McS said...

"elvisd said...
Explain what you mean here and what you think "fascism" is"

Fascism is socialism with nationalism thrown in to make it more appealing to average Joes and nominal retention of private ownership to keep big business on side. "The customer is king" is a foreign concept, altogether unwelcome in this particular world of government-sponsored/directed industry. We are clearly heading in that direction.

Anonymous said...

Perhaps a bit off-topic, but on the issue of unions and their often disastrous consequences...

The WHO concert tragedy in Cincinatti on Dec 3 1979.

This was back when they still had the terrible "general seating" policy at concert venues.

18,000 people showed up for that concert - and this was "general seating" so you ran like hell to get the best seat you could - a half hour before the concert started they had only opened five doors. The coliseum had 134 doors but only NINE ticket takers had been hired. That was ONE ticket taker for every 2,000 people. Seeing the insanity outside a police lieutenant asked for more doors to be opened but they said no.

You see there were only NINE ticket takers and using ushers to cover other doors would have been a union violation.

So 11 young people had to die to safeguard the interests of the union..

ben tillman said...

You see there were only NINE ticket takers and using ushers to cover other doors would have been a union violation.

So 11 young people had to die to safeguard the interests of the union.


How was that the fault of the union? How was it not the fault of the promoters who hired just nine ticket-takers? You know, "[A]s the doors fly open even the promoter smiles."

Reg Cæsar said...

Nobody mentioned Eric Hoffer yet? --Norville 

He was the first thing that came to my mind, but since he worked in Oakland, he didn't seem germane to the discussion. Hoffer was allowed to work half-time while researching his articles and books, so I wonder if he was being paid full-time. That would be sweet.

Hoffer respected his black colleagues on the dock, but that didn't stop him from writing that the "Negro revolution" was a fraud. In a cover story-- for the New York Times Magazine. Imagine that.

No names were mentioned, but I'm pretty sure King & Co. were included in his target.

Anonymous said...

They need to stop paying anyone who refuses to cross picket lines, by deliberately causing companies to go bankrupt if necessary.

Anonymous said...

Reg Caeser from what I understand he only got paid hourly. In his book which amounts to basically a journal of a two year period he lists his hours worked and then pay for that pay period I believe.

Anonymous said...

In Britain there is a school of thought that unions destroyed our indigenous car manufacturers but it seems to me that lets off shoddy management and government interference far too easily.

Anonymous said...

Reply to Ben Tillman:

Because the police wanted to open more doors and use ushers as temporary extra ticket takers. They were told no because this would be a violation of the union's deal. Non-union workers can't do a unionized workers job. So people had to die because of this. Who knows how many lives might have been saved but for this?

Anonymous said...

Let me get this straight: the same people who bemoan the decline of America's mid-century prosperity and big, happy white middle class where mom could stay home with the kids because dad made enough money...hate private sector unions?

God, you guys are dipshits.

stari_momak said...

"who concert"

Yeah, those evil unions...now that workers no their place, they are the ones getting crushed for their company.

stari_momak said...

".hate private sector unions?

Yeah, I'm not understanding this. I really don't even understand the hate for public sector unions. I mean, I understand the conflict of interest argument. But when I see my lawyer friends are making $250,000 to $500,000 and more, I don't really mind paying a prison guard $120,000 a year to keep miscreants locked up, esp. when their is a chance they will get injured or even killed on the job.

Steve Sailer said...

How much trade passes through LA/LB port each year? I'll just make up a number that's within an order of magnitude: $1 trillion. And how many unionized workers are there at the port? Say, 10,000? So, if each unionized worker there gets paid $100,000 per year more than the market rate, that's $1 billion dollars, or 0.1% of the total value moving through the port.

ben tillman said...

That's reprehensible and, depending, on what they knew, criminal.

Anonymous said...

Mr. Anon said..."And whatever happened to the airline pilots-stewardesses-mechanics unions"

American Airlines pilot's union has been staging a work slow-down for several months. They call in mechanical problems for every little nit-picky thing…I rebooked my flight with United, just so as to not give them my money. I still lost a day of my life though. I won't be flying AA again, if I can help it. Good work, pilot's union!”

Why reward United’s a-hole pilots? United’s pilots staged their sickout in the summer of 2000, caused countless missed flights and who knows how many missed weddings, failed business deals, etc. If you want to reward non-militant pilots fly on private jets or maybe Southwest. Or hitch a ride with the Air Force.

My father was an airline pilot, I used to be, and have countless (well, more than 20) friends that are airline pilots. It’s not a great job anymore. Most pilots have a very hard time processing that the industry ain’t what it used to be. It used to be a solidly upper middle class job, decent pension (what is a pension you may ask?), access to attractive single women, ability to travel for free (aka “non-rev”) etc. Deregulation changed all that. Airlines simply can’t pass on the prices necessary to pay for $180k/year Captains and $125k/year co-pilots. The FA’s are heinous, airlines do a great job of selling every last seat so it’s tough to take your family on vacation. I wish it were different, I really do. I’ll leave whether this is good (lots of people can afford to fly now) or bad up to others, but that’s the deal. If it was different I’d still be riding around in the front saying “and on your right you can see the lights of Las Vegas...”

One thing in AA pilot’s favor is that very few of them are participating in the slowdown. It’s a small but significant minority. Most pilots are white men, about 1/2 or so came out of the military. They lean right politically but the key is most of them just want to go home and hang out with their kids when they’re done flying. A small minority head for union positions and since they’re all that’s interested they get the jobs, and so the union tends to not represent pilot politics. APA (AA’s pilot’s union) endorsed Obama but I’ve seen estimates that as many as 75% of pilots voted for Romney. John McCain’s idiot son Doug is an AA pilot by the way.

Last point – the blame for FA’s on US carriers being all elderly women or swishy homosexuals is 100% the fault of the US Govt. Airlines know quite well that business traveling men would prefer to be served by comely young ladies. However the EEOC says that as long as they can do their job (“your safety is our primary…” blah blah) they can’t be fired just for old and ugly and gay.

back at ya said...

Some troll wrote: "Let me get this straight: the same people who bemoan the decline of America's mid-century prosperity and big, happy white middle class where mom could stay home with the kids because dad made enough money...hate private sector unions?"

Right... Because bigger bureaucratic unions would have prevented all those changes since 1960 in business technology, contraception, the value of a high-school education, required military service... lol

Cail Corishev said...

If unions are so great, why is there not a single one of them opposing mass immigration? As far as I can tell, they're all taking dues from their members and using the money to to promote the candidates most likely to give their members' jobs to foreigners.

Maybe they figure cheaper workers means more income available to pay dues.