Tag Archives: political economy

Featherbedding

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It’s not just for railroads, or auto unions. It seems to have come to the Writers Guild of America. The WGA and the Alliance of Motion Picture and Television Producers appear to have reached a tentative agreement, wanting only fleshing out the details and then a WGA rank and file vote.

The tentative agreement appears to include these items:

  • a minimum number of writers per television show
  • guaranteed employment for those writers from conception to postproduction

If those really are included, they would be just naked featherbedding. Not even TV and movie production needs a guaranteed, fixed numbers of writers, or of any other type of employee, nor should these businesses need to provide guaranteed employment, whether or not the employees are needed at one time or another.

Instead, those items should be matters agreed in contracts between employee groups or their representing unions and the particular television and movie production company.

This wastefulness—and increased cost to consumers—is part of the price a union shop inflicts on the rest of us.

Student Debt and Savings

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The lede’s lead sentence leads into it.

Everybody knows that US households’ savings soared after the pandemic struck, as the combined effects of checks from the government and fewer opportunities to spend swelled wallets.

Increasing household savings is, in almost all cases, good since we Americans don’t keep a big enough cash cushion against unexpected exigencies, anyway. There was, though, one key area, one Critical Item, that did—and does—represent quite a large opportunity legitimately to spend: paying down the student debt held by one or more members of a household.

Sure, the Federal government, with questionable legality, initiated a pause on student debt payment and associated interest accruals. However, that pause was on lenders’ ability to demand payment. That pause in no way blocked the ability of the student borrowers to continue making payments of their loans.

Where we stand today is indicated by the San Francisco Fed (keep in mind that they say their estimate is pessimistic):

They calculate that excess savings peaked at about $2.1 trillion in August 2021, but by the second quarter of this year less than $190 billion remained, putting them on pace to be depleted in the current quarter.

Now (assuming arguendo, the estimate is accurate), in the face of those vastly depleted and rapidly disappearing savings, those student debtor households will have to resume student loan payments, whether they want to or not, next month. That represents a sequence of problems for our economy and for them: student loan debtors must make loan payments from shrunken resources, which means they’ll spend less in the consumer economy. Less consumer spending slows our economy. In a slowing economy, employers hire fewer employees or employ fewer folks outright—furloughs and layoffs. That tightening, even shrinking, labor tightens even further the economic condition of those student debt-laden households.

Lying or Hostage-Taking Threat?

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Our Progressive-Democratic Party President, Joe Biden, is at it again. On the possibility of a Federal government partial shutdown due to a lack of a budget—which Biden distorted as being a complete shutdown—he had this threat regarding our military:

Let’s be clear. If the government shuts down, that means members of Congress and members of the US military are going to have to continue to work and not get paid….

This, of course, is false, or should be. There is plenty of revenue coming in to the Federal government under existing tax law to continue paying the Federal debt, Medicare and Social Security outlays, DoD expenses and military salaries, and on and on.

Biden knows this full well. The only interpretation to his claim is that he’s lying outright, or he intends deliberately to withhold our military members’ pay, taking them hostage against his demand to get his way.

You decide.

Temp Workers at Car Manufacturers

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The UAW objects to American car manufacturers having temp workers on the payroll.

The use of temporary factory workers at the Detroit car companies has long rankled the United Auto Workers union, which wants fewer of them and a faster path to full-time status.

Never mind that

Automakers say they need the flexibility that temp workers provide, especially as they manage a tricky and costly transition to electric vehicles and confront the ups and downs of factory production.

The union pretends to object on the grounds of the different pay levels temps earn compared to union workers. This is cynically disingenuous. The temps know, going in, that they’re getting a lower wage than their full-time, unionized neighbor on the assembly line. They still take the gig, because they’d like to have the income. That’s an income the UAW wants to deny them, along with denying the car manufacturers these labor gap fillers.

The union boss, Shawn Fain, claims to want to help the temps:

UAW President Shawn Fain has said he wants to get temps better pay and limit their use. He also wants to accelerate the timeline to full-time status to 90 days.

But he doesn’t want them working at all until he and his union get their way. This is demonstrated by the outlandish demand of full-time status for temps within 90 days. That’s far too short to evaluate a worker’s fitness over the longer haul, and it’s far too short relative to longer-lasting but still temporary labor gaps.

In the end, temp workers are the most reliable workers on the car makers’ factory floors—the UAW’s strike, especially as damage maximizing as the present one is designed to be—demonstrates this conclusively. Fain’s demand regarding temp workers is just another union power grab.

Nice Company You Got There

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Shawn Fain, UAW union boss, is extending his threat to Ford, GM, and Stellantis, the three major American car companies against which he’s taken selective strike action, a selectivity he’s said he’s using to maximize current damage to the companies.

…what the union calls a “stand up strike,” in which specific locals are asked to go on strike at their facilities. The union has said that strategy will give it flexibility in escalating the strike incrementally up to a potential nationwide strike if negotiations do not deliver sufficient progress in its view, and will make it harder for the auto companies to predict its next move.

Give us what we want, or else:

further strikes will be announced if negotiations do not yield sufficient progress by Friday.

And so they did. The union struck additional plants at GM and Stellantis. Not Ford, though–Fain is claiming that Ford was “serious about reaching a deal,” and so he didn’t order a strike expansion there. Sure. More likely, this is just an attempt to sow dissension among the automakers and thereby add to pressure to surrender.

Be too bad if something was to happen to your company(s).