https://www.cnbc.com/2023/07/06/adp-jobs-report-private-sect... ("Private sector companies added 497,000 jobs in June, more than double expectations, ADP says"
Quits may be down, but the economy is firing on all cylinders.
Quits may be down, but the economy is firing on all cylinders.
Follow along the current Teamsters/Yellow trucking conflict. Yellow is threatening to close up shop vs pay reasonable wages, and the union is willing to kill the business versus allow them to continue to squeeze labor for their profits [5]. In a macro where labor is in excess demand for the next decade [6] [7], this is a reasonable way to operate.
[1] https://news.ycombinator.com/item?id=35077748
[2] https://www.reuters.com/markets/us/feds-powell-acknowledges-...
[3] https://www.marketplace.org/2023/05/25/decline-in-corporate-...
[4] https://www.federalreserve.gov/econres/feds/end-of-an-era-th...
[5] https://www.freightwaves.com/news/why-teamsters-is-willing-t...
[6] https://www.axios.com/2023/05/08/us-labor-shortage-older-wor...
[7] https://www.businessinsider.com/baby-boomer-retirement-surge...
Anyway, support of unions has never been higher in the US (currently 68%) [1] [2]. I get that a cohort of HN has some sort of hyper-capitalistic Stockholm syndrome (I get why of course, YC and all, "I'm just a temporarily embarrassed tech millionaire/billionaire") bent and frowns on the idea in an Ayn Rand-ian way, but HN is a bubble vs the rest of the country. If you are here, odds are you are privileged in some capacity. Most people are not. People are tired of getting ground by the machine, and are realizing there are options to get some purchase on the economic rockface [3] [4].
[1] https://news.gallup.com/poll/398303/approval-labor-unions-hi...
[2] https://www.npr.org/2022/08/31/1120111276/labor-union-suppor...
[3] https://www.epi.org/publication/unionization-2022/
[4] https://www.cnbc.com/2022/05/07/why-is-there-a-union-boom.ht...
Physical jobs get outsourced. Look at what an Amazon driver makes compared to a UPS driver. Look at all the jobs the big three auto manufacturers have shipped to Mexico over the last 40 years.
[1] https://www.congress.gov/116/meeting/house/109127/witnesses/...
[2] https://electrek.co/2023/05/31/north-america-battery-factori...
Unions destroy industry. They are simply a rent-seeking mechanism to extract more wealth from the shareholders by restricting their contract rights.
Detroit was the wealthiest city in the US in 1950, with the highest per capita GDP in the country. Over the course of the 1950s, 60s and 70s, the UAW union took over, with membership eventually peaking in 1978.
What followed was industrial collapse, and eventually, Detroit becoming a ghost town.
Unions are not good for labor at large, just the labor that is on the winning side of the zero sum rent extraction scheme.
Beyond repealing labor laws instituted in the 1930s and 50s that put private enterprise at the mercy of unions, the real solution is to cut government spending. Even when the government keeps taxes low, government spending crowds out private sector spending. The mechanism through which it does this is, primarily, by offering investors government bonds, which investors invest their surplus income into, instead of investing it in private enterprise, and secondarily, by reducing the future after-tax income of the private sector, through the future tax obligations it creates, and in doing, reducing the credit worthiness of private economic actors.
Now there are productivity-boosting forms of government spending, like building bike lanes, transit lines, ports, etc, but most government spending is in the form of social welfare programs [2] and a large proportion of that is just graft for public sector unions [3] which totally control the government (87% of cities with a population over 100,000 are run by Democrats).
Social welfare spending - which is directed mostly to public sector unions - needs to decline as a share of GDP.
The free market works. Wages for unskilled labor doubled, in real (inflation-adjusted) terms, between 1870 and 1900, when unions were historically at their weakest. And over the course of this period, industry expanded and saw its financial footing become healthier. This was very much unlike the post-war period, where US industry was running on borrowed time, making increasingly burdensome concessions to unions.
[1] https://fee.org/media/12421/20130708_whywagesrise.pdf
[2] https://ourworldindata.org/grapher/social-spending-oecd-long...
[3] https://www.hoover.org/research/california-state-government-...
Well that sucks because the free market is supposed to drive profits to zero.
https://www.investopedia.com/terms/n/normal_profit.asp
"Economic profit is the profit an entity achieves after accounting for both explicit and implicit costs.
Economic Profit = Revenues - Explicit costs – Implicit costs
Normal profit occurs when economic profit is zero or alternatively when revenues equal explicit and implicit costs.
Total Revenue - Explicit Cost - Implicit Cost = 0
or
Total Revenue = Explicit + Implicit Costs"
The collapse of American manufacturing and industry could also be traced to outsourcing abroad, which devastated American labor and unions and resulted in profits for the shareholders from the reduced labor costs.
There is also the financialization of industry as represented by a shift of management techniques away from industry to finance in order to boost share values. Eventually industry runs into reduced returns in growth, but finance provides new schemes to create profit based off of speculation on the future.
Profit is not surplus value from workers' labor. It is compensation for the value contributed by investment. Without profit, there is no investment, and without investment, there is no wage growth:
> What followed was industrial collapse, and eventually, Detroit becoming a ghost town.
East Michigan was wealthy in the 1950s, and the unionized workers like Larry Page's grandfather sent their children off to college.
Textile mills in the Carolinas had virtually no unionization.
Yes, manufacturing employment is down from Michigan's heyday. What about the textile plants from North Carolina's heyday? They closed down too. They never unionized, so what caused that to happen?
The difference is the Michigan factory worker entered the middle class, and owned a home, two cars and sent his kids off to college. The North Carolina textile worker's children did not get this education, and when the textile mills closed had no such luck.
Wages grew rapidly in the Carolinas since the 1960s, unlike in Detroit. The workers flocked to new rapidly growing industries like finance, technology and biotech.
North Carolina's population has grown by 60% since 1990, while Detroit's has shrunk.
If the real world does not live up to this idealized image, then some policies may have surprisingly positive effects and getting rid of them actually ends up making everything worse.
Feel free to compare based on countries with strong labor protections vs those without. The evidence does not agree with your assertion.
The job growth is largely in the hospitality industry while tech continues to tighten.
I know WSJ has coined the term "richcession" to describe the elimination of high paying jobs and their replacement with more lower paying ones.
Will be interesting to see how the long term trends play out.
There is some tech but comparatively very little when stacked against any other growing major metro area, and those that are here aren't hiring locally, they're just companies relocating here for tax purposes and bringing existing workers with them.
There's a reallocation going on all right. From more middle class people to more poor people.
"Middleclasscession" would be a better term although even harder to pronounce. It seems no matter what's happening, the rich will get richer, middle class and lower will get poorer. I still can't get my head around the fact that during COVID the top x percent doubled their net worth while most of everybody else lost out.
Since Q120 net worth of top 1% (or top 0.1%, or top 10%) did not double. In fact the growth was slower than the bottom 50%. [1] There is huge inequity, and absolute numbers are in favor of super rich. But there is no need to invent your own facts.
[1] https://www.federalreserve.gov/releases/z1/dataviz/dfa/distr...