Inequality

[crazy canuck]

I think trade unions declined in the Western world because they did not quite catch the fact that the nature of the "proletariat" has changed. It's not factory workers and the like anymore - most of them have been fired and those who stayed have a relatively good fare, being usually qualified employees.

You think that labour leaders didnt notice that the workplace was changing?

[Martinus]

The increasingly large role of computers in business and society seems to really get rolling around 1982 might that be connected?

Minsky rejected this in my hypothesis, saying it happened before that.

[The Brain]

  Now you find yourself in '82. What's next?

[mongers]

Actually, speaking of the median wage growth being about 0%, is median even a good statistic in that sense?  Median growth would be appropriate to analyze if the distribution of wages didn't change.  In that case, you want to use the median, because average can be distorted by really high values.  But, if the distribution of wages does change, which is kinda tautologically true given the thread title, wouldn't median growth be misleading?  Maybe that $0.20 per bushel that you saved with the E Machine now went to the newly created fat cat position of CFO to oversee the capital spending on the tractor, whereas previously you didn't need a CFO as you didn't have a lot of capital costs.  That fat cat's salary growth would barely be reflected in the median measure.

You are on to something here.  There is a divergence between median and mean compensation.  As it turns out, that divergence accounts for over 40% of the divergence of the observed divergence between median wage growth and productivity since 1973.  What is being captured here is increasing inequality in income.  What it doesn't tell us is why or how it is happening.  Why do these fat cats suddently spring up in the early 80s and why do they keep getting fatter?  And why are the thin cats failing to pick up any scraps?

Politics and political influence peddling are two factors that cannot adequately been shoehorned into an economic theory.

[MadImmortalMan]

I think trade unions declined in the Western world because they did not quite catch the fact that the nature of the "proletariat" has changed. It's not factory workers and the like anymore - most of them have been fired and those who stayed have a relatively good fare, being usually qualified employees.

You think that labour leaders didnt notice that the workplace was changing?

I think the #2 factor Josephus posted is the biggest one. Back then, the utility provided by the union to the average worker was much more valuable than it is now. The law protects the workers now, where unions had to step in on their behalf before. So the cost/benefit of joining and paying the dues is diminished.

I think it has less to do with manufacturing. Service jobs have unions too, after all.

[Valmy]

Minsky rejected this in my hypothesis, saying it happened before that.

If you say so.  I would be interested to see if there is a correlation.  I mean PCs literally came on the market just a few years before that.  I am not sure if they were as economical and as widespread before that that we can so cavalierly discard it as a possible culprit.

Also you said automization which is not exactly the same thing as personal computers.

[crazy canuck]

I think trade unions declined in the Western world because they did not quite catch the fact that the nature of the "proletariat" has changed. It's not factory workers and the like anymore - most of them have been fired and those who stayed have a relatively good fare, being usually qualified employees.

You think that labour leaders didnt notice that the workplace was changing?

I think the #2 factor Josephus posted is the biggest one. Back then, the utility provided by the union to the average worker was much more valuable than it is now. The law protects the workers now, where unions had to step in on their behalf before. So the cost/benefit of joining and paying the dues is diminished.

I think it has less to do with manufacturing. Service jobs have unions too, after all.

I am not sure about that.  There is a lot of research to suggest the main reason employees certify is not necessarily for economic protection (which government regulation is mainly directed at) but because they have an ass as a manager and the employer has no effective means for employees to bring grievances regarding their manager to a more senior level for consideration.

If you look at the companies that have been able to avoid unionization you will see many of them (with the exception of companies that employ other methods....) have put systems in place to address this issue.

No government regulation can help with that.

[Jacob]

I'd expect that it's connected to the phenomenal rise in executive compensation and changes in the stock market and financial world that shifts focus on quarterly earnings and stock value over all else.

Basically, increased productivity gains went to feed the demands of Wall Street which, combined changes in regulation, meant that there was no excess capital to compete for workers - it all went to share prices. The survival and strengthening of a company was further removed from production basics; the gains there were dwarfed by the gains realized from riding the market correctly so all excess resources rationally went there?

... I don't know... something like that?

[The Brain]

Aliens?

[MadImmortalMan]

Aliens?

Ancient ones, yes.

[Josephus]

Later.

But for now - to go off topic a bit.  Why do you think the trade union movement declined?

I think that public sector unions had something to do with it.  When public sector unions would go on strike, they weren't sticking it to the man.  They were sticking it to us.

I think there's a lot of truth to that. And with public sector unions, I also include BIG unions. Like the auto union.

edit: And by this, it goes back to #3, cultural and demographic shifts. I think these unions, the big ones and the public sector ones, alienated non-union workers from the whole notion of unions. When a Toronto Transit Commission, coin collector was found to be making over 100 grand with overtime, the common man was like..WTF? Unions are overblown.
People no longer see unions as protecting the little guy, but rather, enriching the over-paid, no-skilled worker.

[Josephus]

Now you find yourself in '82. What's next?

The disco hotspots hold no charm for you.

[The Brain]

Now you find yourself in '82. What's next?

The disco hotspots hold no charm for you.

I have NO IDEA what you're talking about.

[Josephus]

Now you find yourself in '82. What's next?

The disco hotspots hold no charm for you.

I have NO IDEA what you're talking about.

That wouldn't be the first time.

But, in this case, you're either kidding, or too young to remember this classic 82 song:

http://youtu.be/keiMqTdvogo

[The Brain]

Kid-ding?