News & Articles

This last Labor Day was rather strange. It wasn’t much about “labor” at all. Oh, there were a few editorials decrying 7.4 percent unemployment—which through political fakery, a lying Congress, and the magic of statistics is really about 22 percent—but that was about it. We had a few stories about fast food workers “striking” for $15 an hour, but that’ll be the day when fast food and caretakers for the young and old make a living wage.

The one economist who really struck me between wallet and brain on Labor Day was Robert Samuelson, a writer for the Washington Post. I never liked his past reviews of economics because he never, never mentioned the role of working men and women in our economy. It seemed he just didn’t care for people, but he seemed to be right about some of the economic stuff.
   Well, Samuelson has finally figured out that employers have the upper hand in this buyer’s market for labor. I was shocked by his proclamations he had never written before: “Since 2007, there has been no gain in average inflation-adjusted wages and total compensation, including fringes... the weak job market has a semi-permanence unlike anything seen since World War II... the economy just doesn’t produce good jobs anymore... possible job loss becomes more threatening because finding a new job is harder... what’s occurring is the final breakdown of the post-WW II job compact, with promises of career jobs and something close to ‘full employment.’... Workers do best when strong growth and tight markets raise real wages. On Labor Day 2013 this prospect is nowhere in sight.” There—he said it. I think he’s right.

From Rotten Potatoes To Carnival Foot-Longs

As a farm boy in the 1940s, I pitched a lot of manure and shocked a lot of grain bundles. I started “commercial” work in 1946 as a freshman at Little Falls High School, stocking and clerking for J.C. Penny Co. after school and on weekends. Later I advanced to a classier outfit, the Victor Clothing Company. In the spring I sorted rotten potatoes from seed potatoes for a local grower. Fifty cents an hour and all I could eat. Rotten potatoes do have a distinctive smell.

Then I went to the college of hard knocks at Moorhead State Teachers’ College to play football and baseball. To supplement my huge scholarship, I cleaned dorm bathrooms, shoveled coal in the steam plant, ran a little restaurant in one dorm basement, and had numerous other campus jobs. I also worked as a counter boy at the Frederick Martin Hotel in Moorhead, sang for birthday parties and other events, and washed windows. During a summer I worked for O’Day Equipment erecting steel buildings in the area and got a small free apartment in a funeral home, providing security at night to keep the ghouls and vampires  out, and occasionally helped to carry a casket or two.

Between Marine Corps Reserve training at Parris Island for two summers, a buddy and I worked for a carnival, selling ice cream bars and foot-long hotdogs at state and county fairs in the region. A wonderful experience where we met REAL people. During the week and weekends, I was head of the men’s clothing department at S&L Stores in downtown Fargo in my undergraduate college days. I also made good money during the summer pitching for Melroe (Bobcat) at Gwinner, North Dakota, Gary, Minnesota, and a couple of other ball clubs.

After my Marine Corps service, I tended bar at the Skol Room and Treetop Room in the Frederick Martin Hotel while attending graduate school. A marvelous education in psychology and in poetry (Candy is dandy but liquor is quicker! –Ogden Nash). I have left out a lot of temporary stuff, but I did this accounting to show I have a little experience in the labor market.  Oh, I forgot. I coached the Fargo American Legion B team for several summers while teaching English, creative writing, and journalism at Fargo Central High. I also wrote for a couple of weeklies and also got a little money and merchandise for radio and TV talk shows. My senior year in high school I sang in a mixed quartet for WCCO’s Cedric Adams and his variety show featuring Bebe Shopp, the 1948 Miss America from Minnesota. We hit many a medium-sized town in Minnesota and Wisconsin and did our first radio show over WDAY radio in Fargo. Experience in labor, management, and employment I’ve got.

Who Is Hiring Today? Fast Food And Office Temps Companies

Are we in a permanent recession for workers? Wage earners and so-called middle-class consumers now don’t have any money to spend—while business and shareholders won’t spend money on hiring workers. Why hire workers when there is no demand for your products? After WW II, labor’s share of the wealth of non-farm business income was 65 percent and was still  63 percent in 2000. Then George W. Bush forgot to supervise the bankster vampires and vultures on Wall Street peddling mortgages to the unemployed and underemployed and then selling them to gullible and greedy investors around the world. Such greed lowered labor’s share of the wealth to 57 percent by 2013. So in just 13 years, labor shifted $750 billion to banksters and their employers.

Henry Ford shocked the business world early on by doubling his worker’s pay to $5 a day. His answer was simple: “Who is going to buy my Model Ts if they can’t afford them?” That’s why half of the cars on the road in the 1920s and ’30s were Fords. Today corporate America is trying to hide its profits. In just five years, from 2007 to 2012, corporate profits rose 35 percent while companies invested only 2.6 percent in plants and equipment. While labor’s share of profits has steadily declined, U.S. companies are sitting on a huge pile of cash, over $1.8 trillion. Businesses and most economists have evidently forgotten a cardinal rule of a well-functioning economy. One person’s spending becomes another person’s income, which is then spent again and again. How much can a full-time worker making $7.25 spend on products?

Multi-millionaire Nick Hanauer, CEO of a pillow company, made a fortune selling pillows and buying shares in Amazon. He makes a 1,000 times what an ordinary workman earns, but he strangely has not lost perspective: “I will never need 1,000 Audis or 1,000 pairs of jeans. Even the richest people only sleep on one or two pillows.”

Workers Are Getting Labor PTSD

Workers are scared to death. That’s why private union membership is down to 6.6 percent. Only 63.2 percent of the working-age population is working in the labor market, the lowest percentage in 35 years. In 2007 the participation rate was 67.3 percent. Four percent is a precipitous drop over a six-year period. Forty years ago, if you went to work at IBM at age 25, you could count on retiring from IBM at age 65. Forty years ago, half of manufacturing workers had been at the same job for more than five years. Neither is longer true any longer.

Workers cannot be picky. The pressure on workers comes from globalization, robots, new labor-saving techniques, and sluggish economies worldwide. Strikes are no longer effective. Thirty-two years ago, there were 145 major strikes involving 729,000 workers. In 2009 there were five strikes by only 13,000 workers. The Crystal Sugar lockout was strictly to destroy the union when labor was plentiful. I collected a file filled with millions of words about this lockout, but the strike boiled down to one sentence: greedy growers wanting to add more profits after profitable years while destroying the union. It would be interesting to have an economic study of the effect of the strike on the economies of the small businesses and towns in the Red River Valley. I would bet the growers gained very little while destroying the long-term social relationships and economies in the valley towns.

Right-to-work laws have now been implemented in 24 states, practically all of them dominated by Republican Party politics. These laws are really “right-to-work-for-less” laws generated by the most powerful union in the country, the United States Chamber of Commerce, and supported by the Koch brothers, the Walton Foundation (Walmart), the Coors family Castle Rock Foundation, and other billionaires. Actually, most right-to-work states have the highest unemployment rates in the country. Six of the ten states with the highest unemployment are right-to-work states.

Will Technology Replace Just About Everybody?

Labor-saving technologies continue to develop like large hailstones during a severe storm, knocking out people from job environments. We could be in one of the most transformational times in labor history. One-third of the airplanes in the skies are drones, even smart enough now to land on the bouncing deck of an aircraft carrier. Only two-thirds of the airplanes are dumb, requiring human pilots on board to make crucial decisions. Henry Ford would not believe that the 2013 Ford Escape is built primarily by 700 robots.

Last year American doctors performed 367,000 major surgeries, sitting perhaps eight feet from the patient at a robot console. Using computerized robocalls, political parties can send out thousands of calls per minute costing less than one cent. The Federal Trade Commission now averages 308,000 robocall complaints a month from an irate public. So far labor is in a race against machines—and is losing.

IROBOT, the company that built the robot vacuum cleaner that does your living room floor while you are cooking in the kitchen, is now making robots to use in dangerous war zones and in nuclear power plants. The Japanese are using robots to check on radiation in and around the Fukushima nuclear plant damaged by that huge tsunami.

Hospitals are now “employing” medical robots to perform routine tasks such as delivering food and drugs to hospital rooms, hauling dirty laundry, and cleaning dirty floors. The other day, my daughter stepped up to a vending machine in a hospital hall, stuck in a credit card, ordered two prescriptions, and picked them up in less than ten minutes. Labor continues to lose ground to machines because of a lack of retraining and education. We have an estimated 20 million people unemployed in this country—and we have 3.9 million jobs unfilled because there is no matchup of skills. Are these jobs worth training for? What do they pay? Are they part-time temp jobs?

We will only survive as a nation if we educate our population better than any other country. Education changed my generation from no TV, no grain combine, no computer, no moon trip, no nuclear, no GPS, no robot, no MRI to an Air Force pilot sitting at a console near Las Vegas viewing a TV screen broadcasting from a base in Florida and checking to see whether the guys in the back of a pickup on the border of Afghanistan and Pakistan deserve a Hellfire missile from a drone because they have AK-47s in their arms and look like terrorists. We have to educate to keep moving, folks.

How Many Of My Past Jobs Can Now Be Done By Robots?

In 1900, 41 percent of the U.S. work force was in agriculture. In 2000 it was less than two percent. In my farmer days, my dad pulled a grain binder with four horses while my brothers and I shocked the oats and barley so it could be picked up by bundle haulers pulled by two horses so the bundles could be hauled to the threshing machine. Now a $550,000 combine with a 40-ft. header can do hundreds of acres in a single day. And a single operator can drive it from his pickup by GPS if he wants to take a break.

I used to milk my share of five cows morning and night whether they kicked the pail or hit me in the face with a manure-laden tail. Now robots milk cows. A cow wearing an electronic tag is trained to walk into a metal stall to eat a cow treat. A laser swings a robotic arm beneath the udder and cleans the teats and udder. Another laser guides the milker to the teats and starts pumping. While pumping the milk, the robot determines the butterfat and protein in the milk and registers it to the cow. The cows don’t have to be chased. When they feel the urge to be milked, they walk into the stall. Get used to it.

A metal stall to eat a “cow” treat. A laser swings a robotic arm beneath the udder and cleans the teats and udder. Another laser guides the milker to the teats and starts pumping. While pumping the milk the robot determines the butterfat and protein in the milk and registers it to the cow. The cows don’t have to be chased. When they feel the urge to be milked they walk into the stall.  Get used to it.