Are employers really having a tough time finding people to hire in this economy? The New York Times claimed that last month, and the Journal did it Monday.
As Yves Smith says, “The subtext of the piece, however, is that a major culprit is that workers are being too fussy and are not willing to accept what is on offer:” And Kevin Drum finds some holes in the story:
Here’s what the Journal says:
In Bloomington, Ill., machine shop Mechanical Devices can’t find the workers it needs to handle a sharp jump in business. Job fairs run by airline Emirates attract fewer applicants in the U.S. than in other countries. Truck-stop operator Pilot Flying J says job postings don’t elicit many more applicants than they did when the unemployment rate was below 5%.
And Drum:
Sounds puzzling. Unless you read the rest of the story. The truck stop job, it turns out, pays minimum wage. The airline job requires you to move to Dubai. And the machine shop company pays only $13/hour but requires people with very specific skills. When they set up a ten-week training course of their own, they got plenty of applicants and 16 out of 24 graduated. But apparently we’ve gotten to the point where blue collar employers are barely willing to invest even ten weeks in training new workers for high-skill entry level positions.
Pay a decent wage, get some workers. Not too hard to figure out.
— The New Republic’s Jonathan Cohn has a very smart piece on how “public employees are the new welfare queens.”
But ask yourself the same question you should have been asking then: To what extent is the problem that the retirement benefits for unionized public sector workers have become too generous? And to what extent is the problem that retirement benefits for everybody else have become too stingy?
I would suggest it’s more the latter than the former. The promise of stable retirement—one not overly dependent on the ups and downs of the stock market—used to be part of the social contract. If you got an education and worked a steady job, then you got to live out the rest of your life comfortably. You might not be rich, but you wouldn’t be poor, either.
Unions, whatever their flaws, have delivered on that for their members.
Government workers are disproportionately represented by unions, who help get them decent wages and benefits. Hardly any private workers are unionized anymore:
Unions represent around 37 percent of public sector workers, compared to 7 percent of private sector workers. Note that one of the few exceptions to the public-private compensation differential seems to be unionized industrial laborers, like the auto workers…
That’s not to say that lots government pay and benefits don’t need reforming. Does society really need to have NYPD cops, say, retiring at 41 years old with half their salary?
Uh, no, boss.
— The Wall Street Journal has a good scoop story (UPDATE: Bloomberg had this story first and the Journal should have credited it) on a dispute between the SEC’s commissioners over how tough to get on clawing back fraudulently gained compensation:
Commissioner Luis Aguilar, a Democrat, has threatened not to vote on cases where he thinks the agency is too lax, people familiar with the matter said. That prompted the SEC to review its policies for the intermittently used enforcement tool.
“The SEC ought to use all the tools at its disposal to try to seek funds for deterrence,” Mr. Aguilar said in an interview on Tuesday. “It’s important for us to the extent possible to try to deter, and part of that means using tools Congress has given us.”
Aguilar, like the rest of the country, sounds fed up.
In a speech in May, Mr. Aguilar took up the issue of executive pay in the context of the SEC’s lawsuit against Bank of America Corp. for failing to disclose to shareholders the size of bonuses paid to Merrill Lynch executives. The bank agreed to pay $150 million to settle the matter.
Mr. Aguilar said that penalty “pales” in comparison to the $5.8 billion in bonuses paid during the merger.
Government workers are disproportionately represented by unions, who help get them decent wages and benefits .... at the expense of the taxpayers who are not only subsidizing generous salary increases, health benefits, and retirement benefits, but area also on the hook for the political muscle and donations groups like AFSCME and the NEA shell out to political candidates ensuring these groups continued generous benefits at the publics expense in the future.
#1 Posted by Mike H, CJR on Tue 10 Aug 2010 at 10:18 AM
I wanna join the AIG, Goldman Sachs, Wall Street executive unions. They seem to have all the real muscle.
And they way they use pensions like the way they want to use social security is awesome.
http://www.corpwatch.org/article.php?id=15148
Who doesn't want in on that club?
Public unions are for suckers. Executive unions... now you are talking.
Non union.. isn't that what illegal aliens are for?
#2 Posted by Thimbles, CJR on Tue 10 Aug 2010 at 05:36 PM
Mike H.,
It's good to see that at least you are consistent when you're talking like a stooge
to corporate interests. Public employees are too generously rewarded? In what universe might that be? Are you referring to "uniformed services" as they are sometimes known? It's only the cops and firemen (and the occassional political executive) that occassionally genrate those stories of outsized retirement benefits. The average public employee has been doing a tedious job at below par wages for years. Now that they may still have a job, assuming they haven't been furloughed, every one's griping about their,pay which is still below par. Yes, they get more than minimum wage and some pension benefits, but neither approaches anything more than a middle class level of opulence. That is to say not very much so.
#3 Posted by Jack, CJR on Tue 10 Aug 2010 at 06:28 PM
Drum makes a couple of confessions:
http://motherjones.com/kevin-drum/2010/08/pensions-and-public
"I should confess here that I'm not a big fan of public employee unions. On my own personal scale of sympathy, I strongly support private sector service unions, I moderately support private sector industrial unions, and I only barely support public sector unions. So no one should expect me to go to the mattresses for public sector benefits. Still, Jon is right: one of the favorite tactics of conservatives is to set the middle class at war with itself. It's sort of the mirror image of corporate compensation committees, which keep CEO pay forever rising because no one wants their CEO to be paid less than average. With middle-income workers, by contrast, the CEO class exploits jealousy toward better compensated unionized workers in order to ratchet things down. The grocery clerks don't want to accept an insurance copay? Well, I have an insurance copay, so why shouldn't they? The truckers don't want to switch their pensions to a 401(k)? Well, I have a 401(k), so why shouldn't they? Etc., etc., ever more disheartening etc.
This is a tactic that works pretty well. As union density has shriveled in the private sector, workers don't really aspire anymore to getting a "good union job," as they often did in the past. It's not even on their radar. Instead, they see a small and privileged group of workers who are better off than them even though they don't work any harder, and instead of wondering why their own pay and benefits are so low, they simply become resentful of this coddled class.
Private sector union density has gotten so low that it's not clear how much they can do about this attitude — and the odds of increasing union density more than a point or two seem cosmically slim. So now it's going to be a war of taxpayers against unionized public employees. It won't be hard, especially in lousy economic times, to convince envious clerks and factory workers that these guys need to be brought down a peg or two. It's just human nature. But wouldn't it be better if all these envious clerks and factory workers were instead asking why their pay and benefits haven't kept up with overall economic growth — which, after all, is all that public sector workers have accomplished? I don't know what the future of unions is in America, but for now they're really the only ones who are asking that question and putting some muscle behind it. Until someone else starts doing a better job of it, we still need them."
#4 Posted by Thimbles, CJR on Tue 10 Aug 2010 at 06:48 PM