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Why the Right wants to deny that unions increase wages

Written By: - Date published: 7:17 am, February 29th, 2012 - 98 comments
Categories: capitalism, class war, Unions, wages - Tags: , ,

Cameron Slater was a bit embarrassed when it was pointed out to him that the ‘fast rising wages’ he claimed showed there was no wages crisis were in fact union wages and non-union wages are rising more slowly. So, he’s trotted out some other dodgy number that is supposed to make us believe what we all know is false – that wages are rising faster than the cost of living, and union wages are rising slower than non-union wages.

I don’t waste time on Slater’s newest graph except to say he’s mashing two different years’ figures together and he’s going so far back he’s trying to get National to claim credit for most of Labour’s third term.

Anyway, I wanted to see if we could get a really good record of how union wage increases compare to non-union wage increases over time. Our old mate Marty helped out with this one. Here’s what he did – “using the distribution of wage increases in the Labour Cost Index and the reasons for wage increases (if the reason is “collective agreement” it must be a union member benefiting) and the DoL figures on union density, calculate the % of the workforce that is union and non-union for each division of wage increases, from there calculate average wage increase for union and non-union workers. Repeat a whole bunch of times.”

And here’s the result:

So, union wage rises beat non-union every time. I’m not sure why that should even be slightly controversial, much less outrageous to the Right. It’s basic market theory, after all. If workers bargain individually they are in perfect competition with each other and become price takers. If they bargain together, they can exercise market power to balance the market power of the employer. Hence the saying: “united we bargain, divided we beg”.

I thought the Right understood markets….

In fact, they do, and that’s exactly why the neoliberals are so keen on breaking the unions and why John “love to see wages drop” and the bosses are making a big anti-union play this term. They know that unions mean higher pay. But they don’t want you knowing that.

Without unions, wages would have increased only around 13% since the end of 2005 (probably much less because so much of the raises non-union workers get is pass-on of union wins and unions fight strongly for minimum wage hikes) when they have actually increased by 16.6%. With total employee pay being about $90 billion a year, that 3.6% difference would have been over $3 billion a year out of working families’ pockets and into the profit lines of the business elite.

98 comments on “Why the Right wants to deny that unions increase wages ”

  1. I’m not sure why that should even be slightly controversial, much less outrageous to the Right. It’s basic market theory, after all. If workers bargain individually they are in perfect competition with each other and become price takers.

    It is controversial because it does not fit in with a RWNJ’s view of the world.  Their theory is that if markets were left to be free we would all be rich, rich, rich, or at least those of us who count.

    This mantra, created by the already wealthy as justification for the continued accumulation of more wealth, has one problem.  It is not true.  Freer markets do not benefit us all.  In fact they make most of us poorer.

    But the right needs to keep repeating this so that those of us who do not understand will put up with the system in the hope, Amway like, that they will also rise to the top and enjoy immense privilege.

    So the right has to keep attacking all collectives.  Their hope is that they can bury the bodies and hide all of the evidence.  Because if people only realised what was happening they would not put up with this.

    • Colonial Viper 1.1

      So the right has to keep attacking all collectives.

      Except the 0.1%’s own collectives of course. The IMF – funded by socialist contributions of collections of country who supply the money by taxing their people. And of course the likes of the Business Roundtable, Bankers Association etc. The Right Wing are very aware of the power of collective action, after all they use it against us all the time.

      • Jono 1.1.1

        Dont forget rugby unions either 😉

        • Colonial Viper 1.1.1.1

          lolz

          But quite right. And if you look at the histories of Fonterra, Silver Fern Farms, PGG, etc they all have at least some roots in co-operative/socialist enterprise and Government mandated support structures. Then of course there’s the Farmers Union, staunch collective supporters of National.

    • Gosman 1.2

      Both you and the article of this post are guilty of gross generalising.

      • Blighty 1.2.1

        Gosman’s argument is so powerful he doesn’t have to explain it.

      • mickysavage 1.2.2

        Feel free gossie to respond point by point.

        • Gosman 1.2.2.1

          Well for a start this idea that all people from the right, (I’ll ignore the obviously facetious use of RWNJ), have a problem with Trade Union’s. I’d grant you some do but many see them as adding a lot of value to the wage negotiation process. On top of that is the ideological argument that if those capital are free to form collectives working for their collective benefit (i.e. joint stock companies and the like)then the same right should be extended to people offering labour.

          Where many people on the right of the political spectrum have a problem with Trade Union’s, (certainly one of mine), is when the Union acts as a break on innovation as well as a road block to new entrants to the labour market. There is also the overtly political nature of many Trade Union’s.

          As a bargaining tool for those providing the labour to employees I think they are fine. I myself would never belong to a Union. That is not to state that others shouldn’t be encouraged to join.

          • McFlock 1.2.2.1.1

            So what’s your perspective on the proposition that unions increase wages, Gos? It is actually the main point of the article, rather than an inconsequential “all/most/some of the loudest ones” distinction. Tool.

  2. Te Reo Putake 2

    Ha, nice work Eddie and Marty. The figures don’t lie and the graph lays out the difference beautifully. And that’s without including 2005, the most obvious occasion where the entire country got a wage rise on the back of the unions’ 5 in ’05 campaign.
     
    And of course, excellent wage rises are not the only thing unions do. Health and Safety, holidays, personal representation etc etc. What a bargain the union fee is, eh? Your own entourage for the price of a beer. Brilliant!

  3. tc 3

    Marty G rules…..more of your sterling statistical work please, fact and evidence based material is the enemy of the right as their best weapons are slogans, spin and dog whistling diversion.

    so if we look at OZ, you know that country we’ve a relentless focus on catching, and look at their unionisation across their total workforce V ours isn’t that another measure we need to catch up with them on.

  4. Roger 4

    “Without unions, wages would have increased only around 13% since the end of 2005 when they have actually increased by 16.6%.”

    I doubt that without unions wages would have increased even that much when you take into account large companies that negotiate with unions, agree on a pay increase and then give exactly the same increases to the non-union staff on individual contracts also.

  5. vto 5

    Why don’t the unions advertise this information as part of a campaign to get more people to join their union? Seems a no-brainer issue to me re whether to join a union or not.

    Come on fullas and fullesses take the fight to them.

    Key says “show me the money” (it’s the only thing he has ever believed in), well, there it is in stark black and white.

    You must advertise and market better.

    • Gosman 5.1

      Agreed. The Unions have terrible PR. Just witness MUNZ efforts over the POAL dispute. I find it staggering that what should be pretty damn easy seems to be able to be turned into a real hash job by the wider Union movement.

      • Blighty 5.1.1

        it’s because they don’t waste members’ money by having crack teams of PR people like corporates can afford. It takes them time to get up to speed. You’ll note the PR battle turned once the CTU got involved.

      • McFlock 5.1.2

        thx 4 ur cncrn, goos

  6. Bill 6

    Speaking for all us colour blind folks out here; any chance the fact that a lot of people (10% of men and a lesser % of women) can’t distinquish red/green might get taken into account when plotting graphs in future?

    Meaning, no hues of brown, red or green on the same graph please!

  7. johnm 7

    Classic NeoLiberal policy: break the common good collective of the Union which in fact brings realty to the how much people should be paid. The Neoliberal agenda is to alienate and atomise us until we become neofeudal serfs answering to the 1% financial power overlords. Part of this process is to effectively dismantle any real democracy and a people’s voice until money and wealth power controls government in a fascist corporate state. Shonkey made his $50,000,000 pile operating this financial ponzi scheme and with Dunny paper is flogging off OUR ASSETS down the toilet to make the same wealthy overlords even wealthier at our expense. You can go back to sleep now Kiwi Sheople. Baa baa baa.

  8. tsmithfield 8

    Personally, I don’t actually have an issue with unions negotiating for pay increases even if that means withholding labour. As Eddie says in his article, its basic market theory. I also agree that unions probably do achieve higher headline pay.

    However, it also needs to be realised that this cuts both ways. Under these rules, employers are also just as entitled to lock workers out. Also, employers can adopt the same market strategies to reduce their own costs by contracting out etc.

    Like the market, if the negotiated pay is artificially higher than the market rate, then the market will eventually correct so that wages align with the market rate. I guess this is what is happening with POA at the moment.

    Another point is that even if higher headline pay is achieved, if that is at the cost of lost wages incurred during extended strikes, then the amount lost may never be recovered before the next negotiations begin. So, the headline rate might be a bit misleading.

    • Te Reo Putake 8.1

      Your last point is a bit faulty, as the vast majority of CEA’s are settled without fuss. NZ has enjoyed historically low rates of strikes under this legislation, becaue it encourages good faith bargaining. And the current industrial disputes are not about wages anyway. CMP, POAL and Talleys are looking to casualise their workforces, not directly attack their hourly rates. That’ll come later!

      • tsmithfield 8.1.1

        Fair enough. I think my point about the market correcting is right though. If unionised companies get too far out of sinc with their pay rates they will become uncompetitive with non-unionised companies, and will have to find ways to reduce the wage cost to match the competitiion.

        Anyway, an interesting graph for Eddie to plot would be number of unionised workers v wage rates. I suspect that would show a trend of less and less unionised workers getting paid more and more until the point that 0 workers get paid an infinite amount. 🙂

        • Colonial Viper 8.1.1.1

          If unionised companies get too far out of sinc with their pay rates they will become uncompetitive with non-unionised companies, and will have to find ways to reduce the wage cost to match the competitiion.

          Nope. If non unionised companies get too far out of sync with their lowered pay rates, they will become uncompetitive with unionised companies, and will have to find ways to increase their investment in wages to match the competition.

          • tsmithfield 8.1.1.1.1

            “Nope. If non unionised companies get too far out of sync with their lowered pay rates, they will become uncompetitive with unionised companies, and will have to find ways to increase their investment in wages to match the competition.”

            Evidence?

            • Te Reo Putake 8.1.1.1.1.1

              Evidence? Try House of Travel. Ask about fares to Queensland.

              • McFlock

                But TRP, employees are as fungible as cash with no qualitative difference between their relative abilities to do an acceptable job in an efficient way…

                • Te Reo Putake

                  Ha! Had to look fungible up, it’s a rare treat to find a new and useful word. Another useful word is robotski (and variations on it). It’s Russian for worker, but Asimov’s use of it is nearer to the Business Roundtables’ concept of flexible labour.

  9. Jester 9

    Sorry Eddie but how you have correlated the data is so fundamentally wrong I don’t even know which mistake to point out first.

    I can see 3 errors immediately that show your graphs to be next to useless. And that’s without even examining and delving into the data set. I hope you didn’t pay this guy Marty for his work. what a fucking shambles. You have even managed to highlight that the graph data you posted yesterday was complete nonsense. Really mate, producing graphs is a science and if you want to try to baffle people with bullshit you need to try slot harder.

    You can manipulate the data you have to show whatever you want but all you have managed to do today is rubbish your argument from yesterday.

    • Colonial Viper 9.1

      You make lots of noise about this or that being wrong but please explain exactly where the errors are.

      Sorry Eddie but how you have correlated the data is so fundamentally wrong I don’t even know which mistake to point out first.

      Probably coz you have nothing

    • Blighty 9.2

      do you want to explain what the errors you claim to see are?

      That graph the other day was EPMU data, not all union data.

    • McFlock 9.3

      Different day, different argument, different data.

      This one seems okay enough to me – all the graphs take the same period, and the collective/non-collective distinction seems reasonable. What’s your actual point?

  10. Rusty Shackleford 10

    I don’t think any serious economic thinker denies that unions raise wages for union labour. What serious economic thinkers do point out is that you have to look at all of the effects on all groups of any given policy. The law of supply and demand would suggest that higher wages will lead to less demand for labour. This could mean that, yes, union workers have higher wages but there is less total employment in this market.

    • McFlock 10.1

      “The law of supply and demand (when considered in complete isolation) would suggest that higher wages will lead to less demand for labour. ”

      FIFY.

      The supply/demand effects are compensated by higher incomes creating greater demand and faster monetary circulation. The same reason why there’s feck-all credible evidence to correlate minimum wage increases with unemployment (discussed ad nauseum in previous posts), but tax cuts for corporations and higher tax brackets barely make GDP twitch.

      • Rusty Shackleford 10.1.1

        That’s why I said ‘would suggest’. Perhaps there are confounding variables. And most of the text books say ceteris paribus when outlining this stuff.

        “The supply/demand effects are compensated by higher incomes creating greater demand and faster monetary circulation”
        I don’t think this is true. Feel free to back it up with some evidence.

        • McFlock 10.1.1.1

          Check out the previous posts around minimum wage vs unemployment, figure out some other mechanism by which means an increase in MW would have no detectable impact on lowskill unemployment, and get back to me.

          • Rusty Shackleford 10.1.1.1.1

            So, you made it up. Good to know.

            • McFlock 10.1.1.1.1.1

              Nope. I just see a massive regurgitation of the RWNJ bullshit here, here, and here. Just for starters.

              Why is it that you tories always seem to think that your economic catechism has never been mentioned here before? Supply and demand applied to the employment markets? After all, it’s not like “supply and demand” is almost the first damned objection brought up by tories whenever someone here has the gall to suggest that a fair days work deserves a living wage! Oh, wait…

              • Rusty Shackleford

                It doesn’t matter how you feel. The results of your policies are what matters. Not your intentions.

                • McFlock

                  Generally agreed, although the relevance escapes me.

                  As has been gone over in the linked threads, increasing wages to approaching-fair levels does not increase unemployment.

                  • Rusty Shackleford

                    Perhaps not, but it decreases the amount of employment there would have been absent MW. ie employment rose, but by less than it would have without MW. If not, then we have to rethink the entire idea of supply and demand.

                    • Colonial Viper

                      If not, then we have to rethink the entire idea of supply and demand.

                      AT LAST YOU GET IT

                    • Rusty Shackleford

                      So, what is the alternative?

                    • McFlock

                      The alternative is to not make generalised assumptions of complex economic systems based solely on one two-dimensional graph.

                      Same logic behind the old canard that if you plug its data into an engineering model, the bumblebee is incapable of flight. The problem isn’t with the bumblebee, it’s that the engineering model isn’t complex enough.

                      S/D curves are useful for some things. Just not calculating employment equilibrium.

                    • Rusty Shackleford

                      I think they are useful for making generalised assumptions. We can’t really do much more. No one has all the information, and those who claim to are lying.

                    • McFlock

                      “I think they are useful for making generalised assumptions. We can’t really do much more. No one has all the information, and those who claim to are lying.”

                      Most people who have to make assumptions test those assumptions against real-world observations, and if the assumptions prove to be too inaccurate (as discussed in the linked posts and comments) they are discarded.

                      Abjectly holding onto inaccurate assumptions because apparently nobody can think of anything better to do is just faith-based religion, not a basis for public policy analysis.

                    • Rusty Shackleford

                      Real world observation? How about youth and Maori employment rates in NZ. Or black male unemployment in the States?

                    • McFlock

                      I’m surprised you bring youth unemployment up, seeing as a couple of the linked posts dealt specifically with that issue and the minimum wage. As for Maori and African-Americans, I think there might be some structural issues confounding your simple assumption, there. Perils of two-dimensional thinking.

                  • Colonial Viper

                    Rusty is full of it; he likes Austrian School Economic policy yet its never been implemented anywhere in the world so has ZERO results to speak of. You know, regardless of his good intentions etc.

                    And the Friedmanite school of economics – well its clear the “results” that has delivered. Good times during a massive debt accumulation and now, major screwage for all concerned.

              • Rusty Shackleford

                Employment was historically high amongst black males and youth. It didn’t start dropping until the federal minimum wage came in in the 70s.

                • McFlock

                  Lol.

                  What other things were happening around that time that might have affected actual and “registered” employment levels? Rusty-2D, sounds like a Star Wars character.

                  • Rusty Shackleford

                    ‘LOL’ I don’t know. What else was happening?

                    • McFlock

                      Let’s see – between 1954 and 1984?

                      Involve social change, economic change, both nationally and subnationally?
                      Desegregation, urban decay, removal of the draft, fuel shocks, improved delivery of government services (i.e. actually registering unemployed), Nixon, just to name a few. But blame minimum wages, feel free.

                      The link was as 2D as you, Rusty.

        • Colonial Viper 10.1.1.2

          The law of supply and demand as represented by a Hicksian price compensated downward slope is BULLSHIT

          Neoliberal economists don’t even understand their own theories; the downward slope of the curve can in reality be in the shape of any polynomial, they just assume – incorrectly – that its usually going to be a simple downward slope.

          I don’t think this is true. Feel free to back it up with some evidence.

          Meh. The evidence is how crappy the economy runs when the neolibs are put in charge of it.

    • Roger 10.2

      Both supply and demand for labour are relatively inelastic. Supply is basically set at 99% of the working age population. Demand is set at the necessary amount of jobs required to service a business model relative to turnover. Raising wages doesn’t increase unemployment because most jobs are essential to the point that removing them could cripple a business operation so demand at the new price is not changed much. Lowering wages doesn’t decrease unemployment because if a job is not necessary it is worth nothing.

      Raising wages increases demand for goods and services through higher income that leads to higher turnover. This increases demand for labour and lowers unemployment.

  11. Rusty Shackleford 11

    That’s why I said ‘would suggest’. Perhaps there are confounding variables. And most of the text books say ceteris paribus when outlining this stuff.

    “The supply/demand effects are compensated by higher incomes creating greater demand and faster monetary circulation”
    I don’t think this is true. Feel free to back it up with some evidence.

    • McFlock 11.1

      “most of the text books say ceteris paribus when outlining this stuff. ”

      Lol.

      Not that your economic theories are archaic in any way whatsoever.
      Maybe you should get a textbook that wasn’t owned by your great–great–great–great–great–great–grandfather?

      • Rusty Shackleford 11.1.1

        What are you talking about? “All things being equal, a rise in prices will lead to a decrease in quantity demanded”, is a completely uncontroversial thing to say.

        • McFlock 11.1.1.1

          I knew what it meant – just having a joke at the fact that your use of latin dovetails quite nicely with the antiquated nature of your economic catechism.

        • Colonial Viper 11.1.1.2

          “All things being equal, a rise in prices will lead to a decrease in quantity demanded”, is a completely uncontroversial thing to say.

          Yeah the BS is that in a real market with more than one good and more than one utility maximising agent, all things do not stay “equal” for more than a millisecond. So its a pretty dumb – or at least, unrealistic and thoroughly theoretical – thing to say.

          • Rusty Shackleford 11.1.1.2.1

            Agreed, but that doesn’t give carte blanche for the govt to impose themselves to impose themselves between the transactions of free people.

            • McFlock 11.1.1.2.1.1

              Nope.

              That comes from things like infant mortality being contrary to the public good.

              • Rusty Shackleford

                Govts aren’t very good at curing infant mortality. So, I don’t really know what you are talking about.

                • McFlock

                  Dude, we’ve been through this. Govts are better at it than lack of govt. Don’t make me break out the S-word!

                  • Rusty Shackleford

                    It’s funny how that is the only well you have to go to. The last 100 years is littered with examples of excessive govt, yet that is the only example of lack of govt you can come up with.

                    • McFlock

                      It’s the one we’ve already covered. But I agree, micro-government is an historical aberration. They never seem to last, no matter how close to the libertarian ideal they get…

                    • RedLogix

                      Yeah sure we can eliminate all government if you wish Rusty.

                      As long as you get rid of it all, the law, the courts and police… the whole lot. Get rid of all collectivism at the same time, unions, companies and corporations.. all associations, clubs and societies.

                      Everyone simply freely associates with other individuals… no-one is allowed to join anything that exists as any form of legal entity.

                    • lprent []

                      Anyone know where the best place to steal ammo from is under rusty’s world?

                      /sarcasm

                    • Colonial Viper

                      Well you need to protect Rusty’s fav topic of Property Rights. You see, the protection of property rights is the only valid function of Government according to Rusty. Interesting, isn’t it. If you have property, the Government should look after you according to him; and if you don’t, well, too bad.

                    • RedLogix

                      That’s the exact point about so called ‘libertarians” CV. They aren’t any such thing at all.

                      What they really believe in is a very selective form of collectivism for them and their interests and the dismantling any other institution that would in any manner hinder or compete against them.

                    • Rusty Shackleford

                      ‘Yeah sure we can eliminate all government if you wish…’

                      Total straw man.

                    • Rusty Shackleford

                      Yes, if they’re going to do anything, they should at least get this right. Quite often they don’t.

                      Rule of law is important up to a point. But, it depends very much on the laws themselves. We have strong rule of law in NZ but some pretty crap laws.

                      If the govt (whomever it may be. There are other ways of doing it other than western democracy centered around one city) gets these things right, free people tend to find a way to make prosperity reign.

                    • RedLogix

                      No it isn’t. The only function you legitimately allow for government is those functions you deem necessary to protect your private property. Every other function you deem as a form of ‘violence’.

                      Yet the one function of the state you deem legitimate, the police, is ironically enough the most physically coercive and potentially ‘violent’ state institution that most people will ever experience.

                      Therefore if your argument is to eliminate all forms of coercive collectivist violence… you really have to eliminate government altogether. Along with every other form of collective institution.

                    • Rusty Shackleford

                      Police does not equal protection of property. It can be done without the police.

                      “…you really have to eliminate government altogether. Along with every other form of collective institution.”
                      One does not follow the other.

                    • RedLogix

                      Oh yes it does. All collective institutions are coercively violent; therefore intellectual honesty and consistency demands that you have to eliminate all of them. You don’t get to pick and choose.

                      Otherwise all you are doing is selectively choosing the form of violence that suits your purposes.

                    • Rusty Shackleford

                      This simply isn’t true. If I join the local rugby club or church choir I voluntarily agree to a set of rules and am free to leave at any time, free of charge or obligation. No coercion here. The same isn’t true of centralised govt.

                    • RedLogix

                      I always have the option of freely associating with another state or being stateless if I wanted.

                      Besides I like being a citizen of this country. Why should my choice of free association be any less valued than yours?

                    • Rusty Shackleford

                      ‘I always have the option of freely associating with another state’
                      Not without govt issued papers you don’t.

                    • RedLogix

                      Strawman yourself Rusty. Every collective entity issues ‘membership papers’ in some form or another.

                    • Rusty Shackleford

                      You voluntarily pay your cash and receive the papers. If I want a passport I have to pony up the 200 bucks, or whatever it is, every 5 years. I wish to be able to exercise my human right to travel but am impeded involuntarily.

                    • RedLogix

                      No you can always choose to go stateless if you can’t afford the passport. Usually that sucks because there aren’t a lot of places left on the face of the earth that don’t require one… but then that wasn’t the case in my grandparents generation and there were plenty of states then.

                      The restrictions on your ‘human right to travel’ are more to do with people in one location choosing to protect their enjoyment of private property rights from excessive overcrowding if they didn’t inhibit tens of millions from freely arriving. Restrictions on travel have very little to do with the states themselves, and everything to do with the immigration policies their citizens freely choose to support.

                      And that’s all about private property.

                    • Rusty Shackleford

                      100% agree. Other people have the right to live as they please. Just try to leave me out of your choices if you can help it.

                      Overcrowding isn’t really a major motivation behind restricting immigration. The welfare state makes immigration restriction necessary.

                    • RedLogix

                      Fine if you want to be left out of our choices as citizens of this country… please feel free to associate with another one. There are plenty of choices.

                      Although you’ll find if you are poor, unqualified, old, sick or have a criminal record then most of them won’t want you as a member.

                      Pretty much the same as almost all corporations, companies, associations, clubs and societies.

        • rosy 11.1.1.3

          “All things being equal, a rise in prices will lead to a decrease in quantity demanded”

          A couple of days ago I had the pleasure of listening to an Economist who believes economic thinking stopped at Adam Smith’s ‘invisible hand’ is a major problem with the discipline. If theorists had read a bit further they would have found him talking about physical geography being factored in – not removed – so economics could not be studied as ‘all things being equal’. For example in Smith’s time thriving economies were based on waterways for trade routes.

          Jefferey Sachs believes economists have lost the basis of their profession… he then went on to talk about how economics required to take into account other factors such as public health (e.e his concern is development and in African countries malaria is a huge barrier), demography, environment and all sorts of other stuff (including a moral dimension). Enlightening, it was.

          • KJT 11.1.1.3.1

            The major problem is the only paragraph they read of Adam Smith is “The invisible hand’.

            Because it suits a simplistic and mechanical view of economics.

            This both denigrates and short changes Smith. He showed in his writings he was fully aware of the moral and social dimensions of economics. Including the , inconvenient to Neo-Liberal economists, ideas that Rentiers and owners of capital resources should be taxed, not workers and entrepreneurs, to make them apply resources effectively.. About as far from the Chicago schools giving money to the finance industry, to hoard, as you can get. He also came up with the quaint idea that workers deserve to be paid properly, as the main contributors to wealth.

            Similarly with Ricardo and Laffer the Chicago and Austrian schools conveniently ignore the parts that contradict them.
            Mind you, both schools seem pretty good at ignoring reality altogether.

            Laffer has himself come out against Neo-Liberal market reliance. Asking for taxes.
            http://climatecrocks.com/2012/02/27/laffer-throws-a-new-curve-bob-inglis-explains/

            “”We need to impose a tax on the thing we want less of (carbon dioxide) and reduce taxes on the things we want more of (income and jobs). A carbon tax would attach the national security and environmental costs to carbon-based fuels like oil, causing the market to recognize the price of these negative externalities.

            Nuclear power plants would then compete with coal-fired plants. Wind and solar power would have a shot against natural gas. Trains would compete with trucks. We would clean the air, create wealth and jobs through a new technology boom and drastically improve our national security””.

    • Rusty Shackleford 11.2

      Can’t think of any examples?

    • KJT 11.3

      The opposite is happening right now all around you.

      Havn’t you noticed the increase in empty shops.

      As wages and benefits drop compared to food prices.

  12. tsmithfield 12

    Another criticism is that we don’t see the standard deviations in Eddie’s graphs. This makes it dangerous comparing averages. Unions probably cover a narrower range of industry than non-unionised jobs, so the standard deviations are probably much tighter. So, its not really comparing apples with apples. Looks pretty though.

    • Te Reo Putake 12.1

      Say what? Name me an industry that isn’t unionised to some extent, TS. You’re really clutching at straws with that one, i’m afraid.

      • Rusty Shackleford 12.1.1

        Total unionism is at historical lows, I believe.

        • McFlock 12.1.1.1

          Your belief is completely irrelevant to the relative unionisation of different industries at this point in time.

          • Rusty Shackleford 12.1.1.1.1

            Your comment is unhelpful. I tentatively think unionism is low compared to the past. I think it’s an uncontroversial thing to say. Either I’m right or I’m wrong. Shouldn’t be hard to find out.

            • McFlock 12.1.1.1.1.1

              Didn’t mention controversial. Just pointed out that your response was irrelevant to the comment to which you replied.

      • tsmithfield 12.1.2

        TRP “Say what? Name me an industry that isn’t unionised to some extent, TS. You’re really clutching at straws with that one, i’m afraid.”

        Probably “industries” wasn’t the best word to use for capturing what I meant to say. “Companies” would be better. So, lets start again.

        Those companies that are unionised tend to be the few much larger ones who can afford to pay more anyway.

        The non-union companies probably include a lot of smaller businesses who probably couldn’t afford to pay more than they do, unions or not. So the standard deviation would be much wider in this group because it would include a much wider range of business sizes.

        The problem is that there could well be a confound due to the inability of some non-unionised businesses to pay more, rather than lack of union representation.

        To compare apples with apples it would be good to compare similar sized companies for union and non-union labour.

        • Colonial Viper 12.1.2.1

          Laughable suggestions, all of them.

          The shit short sighted management “talent” we have at the senior levels in this country, as well as the lack of focussed work skills training for young people at the junior levels, combines to give us a low value low skill economy.

          If you want a comparison, look at the profitability of German engineering companies, who somehow can compete with China and Vietnam despite much higher pay levels and terms and conditions (thanks to a combination of unions and family ownership of firms).

          • DavidC 12.1.2.1.1

            Population density and short supply chains are far more relevant tho Germanys ability to produce.

            In NZ the cost to purchase (for example) the sheetmetal to manufacture an extract hood exceeds the cost of a finished Chinese hood and the imported hood includes a fan and filters. I have purchased (from China) hand rails and glass panels to run up the side of some stairs for 20% of the NZ price.
            We cannot hope to compete in basic manufacturing industries.

            • KJT 12.1.2.1.1.1

              That has more to do with China keeping the Ren artificially low than anything else.
              The length of supply chains has bugger all to do with it. It is cheaper to ship steel from the USA to NZ, for instance, than to truck it from the Ruhr.
              It is to do with political will and distorted markets.

    • Blighty 12.2

      I seriously doubt standard deviations are going to even appear to close a gap that big.

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