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Correlation and causation….someone make me stop!

March 1, 2011

I swore I wouldn’t write another union post. Which is why I haven’t written much since I tend to write what inspires….

This is related, but not about unions. Nearly every author sympathetic to labor unions “in princple” who talk about all the great things that labor unions did for workers over 50 years ago always makes the same basic statement.

Organized labor’s catastrophic decline has paralleled—and, to a disputed but indisputably substantial degree, precipitated—an equally dramatic rise in economic inequality. In 1980, the best-off tenth of American families collected about a third of the nation’s income. Now they’re getting close to half. The top one per cent is getting a full fifth, double what it got in 1980.
This is from the New Yorker. Notice the fundamental assumption – WITH a union we had wage equality. WITHOUT unions well, the rich are getting richer!
From Obama’s labor secretary
In workplaces from my home state of California to Washington, D.C., where I spend most of my time now, and everywhere in between, organized labor is helping businesses improve their bottom line, make workplaces safer and more productive, and ensure that all Americans have the opportunity to achieve the middle class
The waning middle class has nothing to do with say, China becoming an economic super power. Nor does the wage inequality have to do with the fact that there are a greater proportion of information workers in light of the fact that manufacturing has moved out of the country. Nor do they note why manufacturing moved to other countries (and whether unions had anything to do with it). It has nothing to do with the fact that it’s harder to be an unskilled worker with nothing more than a highschool diploma because the world and employment is becoming competitive. Nope.
UPDATED: I found ANOTHER article – this from Tech Ticker at Yahoo News

The union chief finds it galling that some Wall Street “single-year bonuses exceed the average life time benefits” of the average firefighter and paramedic….The middle class got hit by a “one-two punch” of rising daily living expenses plus flat wages……..Unions are one of the few institutions trying to strengthen America’s middle class by fighting for fair wages, she says.

….If labor unions lose this fight, the very fabric of this country will be unrecognizable, says Warren.  “If as a country we don’t concentrate on rebuilding that middle class what we knew as America just doesn’t exist anymore.”

The premise is that unions are there to ensure wage equality and less distance between the wealthy and the poor? To grow the middle class by growing the government employment base? Seriously – I thought they were all about worker safety, ensuring someone couldn’t be fired without due cause and the like. 

Of course, if this is the case – why are these data points turning out to be true? Apparently they forgot to correlate this data point before assigning cause….
When the median wages of state government workers without college degrees are compared to similarly educated private-sector wage earners, Nevada’s state workers are paid 27.4 percent more — only California, New York and Connecticut had greater gaps. When college-educated state workers are compared to Nevada’s private-sector workers with degrees, the gap is not so large — 4.9 percent higher for state workers ­– but ranks even higher
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3 Comments leave one →
  1. March 1, 2011 10:27 pm

    Incidentally, why would we attempt to stop you? I enjoy your thinking.

    Please continue to write what inspires.

    ===|==============/ Level Head

    • March 2, 2011 12:00 pm

      I appreciate it – I thought I was getting boring. I will look at the letter you posted, I’m VERY curious now!

  2. March 1, 2011 10:25 pm

    It may be that wage inequality — if provided by a free market — is the mark of a prosperous society. Taken to the other extreme, if everyone were paid exactly the same, no matter what they did, there would be no incentive to do anything, let alone strive for “success” that had been legislated away.

    Allowing income inequality (really, outcome inequality) produces a free market with tremendous incentives to succeed, which all works to the benefit of the larger society. The middle class is full of turnover as people reach for the peak, and sometimes make it — raising all of the middle class as a result of their efforts and ambitions.

    Where income inequality indicates a problem is in places where the high-income people are government bureaucrats, and private entrepreneurs are always at risk of some political fool deciding that “at a certain point, you’ve made enough money.” They must leave to succeed, because that is the way the game has been rigged. Russia is experiencing this at the moment — the government regularly does hostile takeovers of businesses that have aroused envy. This writer describes Russian doings — I disagree with some of his conclusions, but the details are interesting.

    The big problem with public sector unions is that both the bureaucrats and the union bosses are on the same side of the table. I’ve just written about that, as well as attempting to correct the misquoting of Franklin Roosevelt that I’ve been seeing done by both left and right. I posted the entire letter.

    ===|==============/ Level Head

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