Biden is touting the union deal with the railway workers as some sort of accomplishment. Wall Street articles are freaking out that this could encourage more labor unrest. Drudge is freaking out that unions are polling at their highest level of support since the 1960s. The end of capitalism is nigh!!! Well...
Let's do some math. They are getting a 24% raise over five years plus some back wages to cover this year. Sounds like a lot, right? Except, that's only a 4.5% raise each year of the deal. Does that really sound like a lot? Would you think you broke the bank with a 4.5% raise in this environment? With inflation supposedly at 8% (real rate probably around 35%) that means the real raise after five years is only 5% in total (1% a year). That's kind of sh*tty honestly.
I'm not a union guy but I'm not a corporate hack either. There are some terrible things going on in corporate America that we should probably talk about in a future article. Indeed, much of this supposed labor shortage is actually companies just not hiring anyone, hoping to trick current workers into making up the slack. With inflation, real salaries are plunging. And let's be clear, a solid dose of inflation may kill you, but it does wonders for corporate and government balance sheets.
My point, for now, is don't believe that this union deal is anything earth-shattering, as it's being sold. If anything, it shows a union that sold out its members with the help of a Democratic government that wanted to look good without hurting their big business masters. Why I'm the only one mentioning this is kind of interesting, isn't it? Don't buy the hype. And maybe, don't trust those ringing alarm bells or smiling oddly satisfied smiles.
Let's do some math. They are getting a 24% raise over five years plus some back wages to cover this year. Sounds like a lot, right? Except, that's only a 4.5% raise each year of the deal. Does that really sound like a lot? Would you think you broke the bank with a 4.5% raise in this environment? With inflation supposedly at 8% (real rate probably around 35%) that means the real raise after five years is only 5% in total (1% a year). That's kind of sh*tty honestly.
I'm not a union guy but I'm not a corporate hack either. There are some terrible things going on in corporate America that we should probably talk about in a future article. Indeed, much of this supposed labor shortage is actually companies just not hiring anyone, hoping to trick current workers into making up the slack. With inflation, real salaries are plunging. And let's be clear, a solid dose of inflation may kill you, but it does wonders for corporate and government balance sheets.
My point, for now, is don't believe that this union deal is anything earth-shattering, as it's being sold. If anything, it shows a union that sold out its members with the help of a Democratic government that wanted to look good without hurting their big business masters. Why I'm the only one mentioning this is kind of interesting, isn't it? Don't buy the hype. And maybe, don't trust those ringing alarm bells or smiling oddly satisfied smiles.
So Biden says Covid is over... yet 400 people die each day from it.
ReplyDeleteInflation is fixed, right? Yet, he claims he'll get control over it... implying he doesn't yet.
California is now allowing people to be composted when they die. So Soylent Green really is made from people. I guess the only real question is, do they need to be dead first or can we just compost the whole flippin' state?
And Biden will defend Taiwan from invasion... unless he won't. But he will wink wink
Thanks for doing the math. I hardly pay attention to anything union. Growing up in a union household, I am familiar with how the union perpetually screws its members, always with promises of getting it next time or admonitions that you all are just lucky to be working. Or both. The idea that unions hold business, much less govt, to account has been farcical for decades now.
ReplyDelete-tryanmax
tryanmax, It's kind of crazy to me. To my mind, a "good" company should be giving raises at least at the rate of inflation plus a little every year when they are making profits. So I would expect a minimum of 4-5% in normal times -- 8-10% right now. To tout this as some sort of victory is shocking to me. And to scream about it being some sort of disaster for business is equally shocking. That is propaganda from both sides.
ReplyDeleteI have come to believe that average Americans are truly being mistreated by the powers that be (left and right) and I think this is pretty solid evidence of that in many ways.
My daughter, by the way, just quit at Starbucks. Starbucks, a big leftist kind of place, is trying to crush their unions, going so far as to shut stores that vote to unionize. Even more interestingly, they are using the idea of labor shortages to try to see how low they can get their staffing before things go wrong. At my daughter's Starbucks (similar stories everywhere) they went from a 6 worker shift to a 3 worker shift (and then 4 when 3 proved to be too low) on the false basis that they couldn't find anyone to work. But at the same time they had a dozen employees each working only 15 hours a week screaming for more. It was all an experiment and I think you will see them shift to 4 worker shifts and blame to supposed labor shortage.
Likewise, the airlines claim they can't find people to work for them, but I know people in the industry who say they haven't opened their hiring portals in months. Southwest opened theirs for five hours about a month ago. That was it. Then they scream they can't find anyone. Well, they aren't even taking applications!
This is all about cutting labor costs and tricking existing workers into making up the difference or consumers accepting crappy service.
Andrew, what you tell me is what my gut has told me for awhile. I hate to be so cynical, but I’ve been saying to people for months—maybe a year—that “now hiring” signs don’t mean companies are actually hiring. It’s just a soft way to tell customers “short staffed” and maybe mitigate frustration. Once people are accustomed to a lower level of service, the signs will disappear. Some already have with no apparent increase in staffing.
ReplyDelete- tryanmax
tryanmax, I think that's true actually. I've got two older teens who have been looking for work and also have had jobs in the past six months, plus professional friends in various industries who are either looking or being told to work harder because the company "can't find anyone" to replace people who left. The stories are all the same. Job openings aren't real. They never post. Or if they do, they somehow never find people even if they are presented with qualified people.
ReplyDeleteThere are places looking. Small business restaurants are looking, for example. But airlines, insurance firms, and places like Starbucks are not even as they claim they can't find people. I've found three different car dealers locally that have been laying off staff all the while claiming they can't find people to replace those "who left." Our grocery store opens job posting and somehow never finds anyone.
And don't forget, how long have answering machines at businessed said "due to large call volume" because of Covid supposedly... even if I call at midnight?
I think "labor shortage" "supply chain issues" and the such are being used as excuses for really taking advantage of people -- employees and consumers.