Is That All There Is?

I was very interested to see Democratic presidential candidate Elizabeth Warren’s proposals for dealing with “the coming economic crash at Medium but rather disappointed with the proposals themselves. For example here’s her proposal for strengthening unions:

Ensure that employees may exercise collective bargaining rights, such as by posting notices of collective bargaining rights and maintaining complete neutrality with regard to union organizing.

That’s it. Strengthening unions is an evergreen among Democratic politicians. Are barriers to organizing what have systematically weakened unions over the period of the last 40 years? Or have overseas competition and businesses moving their manufacturing to states without established unions been more important?

And I found her proposals for using “Buy American” restrictions on federal procurement to spur U. S. production of solar panels, etc. in the U. S. hopelessly naive. We cannot match the prices of Chinese-manufactured panels. We can subsidize our own manufacturers but U. S.-made panels will still be more expensive. And subsidizing our own manufacturers is likely to be a violation of our international commitments.

I’m also unsure how we can compete in world markets with a $15/hour minimum wage without massive subsidies.

The reality is that it’s darned hard for us to compete on price with the Chinese on commodity products. The only way we can do that is by a) producing and refining raw earths here which we don’t do for environmental reasons and b) lights-out manufacturing which will do nothing for manufacturing employment.

I think there are reasons for doing these things for national security reasons but that’s a different subject.

9 comments… add one
  • Guarneri Link

    I assume by “commodity products” you don’t mean steel, ammonia, wheat and lumber etc, but do mean labor intensive low value added products.

  • That’s a better diction. Yes, that’s what I meant. Solar panels, for example, are commodity products.

    But we’ll find it hard to match China for price on steel because they subsidize steel production ferociously.

  • bob sykes Link

    The protectionist position is that all the costs of open borders and free trade fall upon the working class and all the benefits accrue to the upper class. While I support unions, the real solutions are closed borders and highly restricted imports from all countries.

    The necessary economic result of open borders and free trade is that all wages and costs are driven towards the global mean. For reference, Gallup thinks the median per caput income is about $3,000 per year, and the BBC thinks the average is about $18,000 per year. These are 2012, 2013 data.

  • In the absence of the closed shop and its analogue, closed borders, unionization is unworkable. BTW, in my opinion the primary reason for the decline in the power of unions is a tribute to their success in the United States. Too many union members became middle class.

  • Grey Shambler Link

    If this works, here’s a photo of Rep. Omar’s triumphant return to Minneapolis. I like to study crowds of admirers. AFSCME is of course a local state, and, municipal workers union, they’re not in decline.
    Unite Here’s website says they are a union representing hospitality and food service workers. Primarily People Of Color, they say. Don’t know how strong they are, looks like they had to make their own signs. Both represent service workers, and are not in decline.
    I’m surprised Warren didn’t mention “card check”. A union organizing tactic that’s been lobbied for for a long time. It eliminates secret ballots for company employees the union seeks to organize and replaces that with a sort of signed card, or petition, which is not secret and leaves workers open to intimidation.

  • Rep. Omar’s Minnesota Fifth Congressional District is just under two-thirds white, one-sixth black, 8% Hispanic, 6% Asian, and 1% Native American. In other words she was put in office by voters of primarily European descent.

    As to unions:

    Of that about half are members of public employees’ unions.

  • Guarneri Link

    I simply wanted to clarify the labor content aspect of the comment.

    The CFO of a prominent mini-mill once told me their goal was to drive labor down to one man-hr per ton, approximately equal to shipping cost. They could inoculate themselves from foreigners..……………unless, as you point out, a foreign country decides to subsidize their producers. That’s not a rare event, and a point all the Trump bashers, er, newly minted free traders, don’t want to acknowledge.

  • I’ve been aware of this since I worked at Laclede Steel which was quite some time ago (as in more than a half century ago). At that time the up-and-coming competition was Japanese steel and the Japanese were subsidizing their own domestic steel production heavily. The South Koreans have since done just the same thing and now the Chinese.

    Once a whole industry goes down because of that kind of competition it would take powerful inducements to get back in. Opening a new steel mill isn’t like starting up a software development company. It takes capital investment.

    I would add that’s also why I wept whenever I saw rails being torn out.

  • steve Link

    Late to the party but I dont find Warren’s prediction of a crash credible. We might have a slowdown with the effects of the tax cut waning, but that’s about it.


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