Friday, May 4, 2018

Job Guarantees, Collective Bargaining and the Right to Strike

“Guaranteed jobs programs, creating floors for wages and benefits, and expanding the right to collectively bargain are exactly the type of roles that government must take to shift power back to workers and our communities,” -- Senator Kirsten Gillibrand

"By strengthening their bargaining power and eliminating the threat of unemployment once and for all, a federal job guarantee would bring power back to the workers where it belongs." -- Mark Paul, William Darity, Jr., and Darrick Hamilton,

"Support for workers’ right to organize and collectively bargaining would, of course, be part of any such effort." -- Harry J. Holzer
 "This, then, was the broad issue to which Samuelson and Solow's paper was addressed: Were price stability and full employment – or, as it was sometimes put, were price stability, full employment and collective bargaining – compatible in the America of their times?" -- James Forder
Under conditions of full employment, can a rising spiral of wages and prices be prevented if collective bargaining, with the right to strike, remains absolutely free?  Can the right to strike be limited generally in a free society in peace-time? -- William Beveridge, Full Employment in a Free Society
Everyone is talking about Job Guarantees these days and no one appears to have thought through the implications of such a policy for collective bargaining with anything like the thoroughness that William Beveridge did in 1946. In 1960, Paul Samuelson and Robert Solow concluded their discussion of full employment and inflation with a disclaimer:
We have not here entered upon the important question of what feasible institutional reforms might be introduced to lessen the degree of disharmony between full employment and price stability. These could of course, involve such wide-ranging issues as direct price and wage controls, anti-union and antitrust legislation, and a host of other measures hopefully designed to move the American Phillips' curves downward and to the left.
We are told by the adherents of Modern Monetary Theory that inflation is not a problem. The government just sops up inflation by taxing back some of the money it has created to fund the program expenditures. Correct me if I'm wrong, but that seems like what they say. At the same time, though, at the same time, advocates of a Federal Job Guarantee tout the increased bargaining power that it would give to workers.

Usually that bargaining power is not specified as collective bargaining power. Harry Holzer's comment is the exception. Senator Gillibrand's mention of Job Guarantee and expanding the right to bargain collectively may have just been a smorgasbord of good things and not meant to imply advocacy of collective bargaining specifically for people in the Job Guarantee program. To use a distinction Richard Freeman and James Medoff adopted from Albert O. Hirschman, the "bargaining power" mentioned by Paul, Darity and Hamilton could as easily refer to the "exit" of individual choice as to the "voice" of collective action.

Well, who doesn't want to see workers gain more bargaining power? That is not a rhetorical question. To ask it is to call attention to the very powerful political forces that have seen to it, especially over the last 40 years or so, that they don't. Could it be that the advocates of the Job Guarantee have not done their opposition research? Do they suppose that the regime of supply-side, trickle-down, corporate neo-liberalism was inadvertent? 

I am not so certain that the Kochs and the Waltons and Jeff Bezos and Jamie Dimon are going to shrug their shoulders and say, "O.K., workers, your turn now. Best of luck!" Regardless of whatever MMT says about inflation, the "inflation!" card will be played against any proposed job guarantee election platform, as will the "socialism!" card, the "moochers!" card, the "boondoggle!" card, and, yes, even the "lump-of-labor!" card.

In individual terms, bargaining power comes down to the alternative options if one quits a job -- what is the Best Alternative if There is No Agreement (BATNA). Collectively, bargaining power is determined by strike leverage, which is a mutual perception of the relative capabilities of the two parties to endure a prolonged work stoppage. A Job Guarantee would appear to give additional leverage to unions in the event of a work site closure or the hiring of replacement workers. The amount of leverage depends on what the rules are regarding the eligibility of striking workers for a Job Guarantee. Presumably, workers currently on strike would be ineligible. But what happens if the employer hires scabs (otherwise known as "replacement workers")? What if the company closes down and moves away? Would there be a waiting period before discharged workers become eligible for the Job Guarantee?

And what about the rights of the Job Guarantee workers themselves to collectively bargain and to strike? Until relatively recently public employees were denied the right to collective bargaining and the right to strike. Even today those rights are not universally acknowledged:
All Government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service... A strike of public employees manifests nothing less than an intent on their part to obstruct the operations of government until their demands are satisfied. Such action looking toward the paralysis of government by those who have sworn to support it is unthinkable and intolerable.
Who said that? Governor Scott Walker in 2011? Chris Christie? No, Franklin Delano Roosevelt, in a 1937 letter to the president of the National Federation of Federal Employees. Scott Walker cited FDR in a 2013 speech. Could a Job Guarantee program that denied participants the right to strike become a Trojan horse for rolling back public sector unionism? That is not a rhetorical question.

The conspicuous lacunae in the Job Guarantee literature regarding collective bargaining and the right to strike strikes me as an elephant in the room. The fact that no one talks about it could not conceivably be because no one notices it. For what is at stake here is nothing less than the sovereignty of the State and its monopoly on the legitimate use of violence. In an astonishing paragraph in his essay on the "Crtique of Violence," Walter Benjamin makes this not so much "clear" as available for deciphering.

Benjamin's provocative claim, distilled from the writings of Georges Sorel and Carl Schmitt, is that "Organized labor is, apart from the state, probably today the only legal subject entitled to exercise violence." Let that sink in...

Benjamin goes on to offer qualifications and explanations that address the inevitable objections to that statement. By conceding the political right's standard objection to the labor strike as violent, however, Benjamin -- again following Sorel -- has isolated and emphasized the one circumstance in which it is not -- the revolutionary general strike. This is not to discount the inevitability of retaliatory violence from the State.

The insertion of Benjamin's argument into the debate on the Job Guarantee idea may seem esoteric to the casual reader. The reason it doesn't seem esoteric to me is that I have spent the last 20 years studying the history of anti-labor rhetoric of the right and how it gets translated ultimately into seemingly innocuous "policy principles." Public works as an employment stabilizer sounds like a good idea -- what happened to it? Full employment after the war sounds like a good idea -- what happened to it? The reduction of the hours of work sounds like a good idea -- what happened to it? As John Stuart Mill rightly pointed out, "He who knows only his own side of the case, knows little of that."

14 comments:

Calgacus said...

(1/2)

Was going to post a few meager comments in that other thread, but this seems appropriate. Well, I have spent a decent amount of time looking for criticism of the JG and imho, it is all very weak. The best was probably in some obscure books in the 40s. The MMTers now and people back then addressed the question of the tension with non JG public sector employment, by the way.

Can't resist this quip:the degree of disharmony between full employment and price stability

Disharmony? What disharmony? The idea that unemployment is anything but inflationary is upside down. Full employment fights inflation. Unemployment causes it. :-)

We are told by the adherents of Modern Monetary Theory that inflation is not a problem.
No, they don't say that, they never say that. More like "inflation is the only problem."

The government just sops up inflation by taxing back some of the money it has created to fund the program expenditures. Correct me if I'm wrong, but that seems like what they say.

OK. That's wrong, that's not at all what they say. Taxes? We don't need no feelthy (additional) taxes. (For a JG)

What MMT says is the Job Guarantee is an anti-inflation measure all by its lonesome. Stabilizes prices, creates macroeconomic stability, solves foreign trade and investment problems etc etc. Stab yourself or get run over by a car, get a blow to your head, you'd be surprised at the complexity of the cascade of medical problems. Panacea Solution: Don't stab yourself etc.

Keynes & Ben Graham in correspondence, Abba Lerner in one of his later books danced around and around the buffer stocky, stabilization stuff related to employment but they never got exactly to it. One of the main positive contributions of MMT, and most particularly due to Bill Mitchell.

Could it be that the advocates of the Job Guarantee have not done their opposition research? Do they suppose that the regime of supply-side, trickle-down, corporate neo-liberalism was inadvertent?
No, they've done a lot imho. And understand it very well and written a lot about it. E. g. Mitchell & Muysken's book- Full Employment Abandoned_ Shifting Sands & Policy Failures. That's why they're prominent now. All the work they've done for years. I think you're just looking at the tip of the iceberg.

Calgacus said...

(2/2)
Regardless of whatever MMT says about inflation, the "inflation!" card will be played against any proposed job guarantee election platform, as will the "socialism!" card, the "moochers!" card, the "boondoggle!" card, and, yes, even the "lump-of-labor!" card.

My response to this is "what part of procatalepsis don't you understand?" MMT & the JG has looked at all the counterarguments and incorporated them into its rhetorical strategery. Of course there are going to be tons of lies. That's where the MMT peanut gallery comes in to make fun of the liars and their ancient, recycled lies.

The amount of leverage depends on what the rules are regarding the eligibility of striking workers for a Job Guarantee. Presumably, workers currently on strike would be ineligible.

No. The presumption is opposed to the JG concept. The Job Guarantee is exactly that. They can go on strike and then work for the JG the next day. The basic qualification for the JG is: Not being dead.

Returning to JG criticism, and points from the previous thread. There is nothing puzzling about Minsky being the patron saint of today's JG. It was his main "solution" (only slightly less enthusiastically than his student Wray, perhaps) and there was no one else in his generation that pushed it as hard. I mean, just read more Minsky.

For a long time James Galbraith was a skeptic of the JG. Here's his 1978 critique Why We Have No Full Employment Policy in Should the Federal Government Implement a Program Which Guarantees Employment Opportunities for All US Citizens in the Labor Force?, it starts on page 19. One of the most serious critiques out there. As Galbraith says there "Huey Newton was quite correct in calling it a "revolutionary objective."" (Agreeing with Marx and many Marxists) But now Galbraith disavows that earlier article, his earliest publication, as he says here: We Work: Give job guarantee a chance.

Sandwichman said...

I did say "correct me if I'm wrong." I'm still not convinced that all MMTers are agreed on Job Guarantee being the solution to inflation. Some say it is the solution because it "pins" the low wage rate and if wages rise in the private sector the "buffer stock" will empty out. That would seem to deny collective bargaining rights to JG workers.

I can certainly see basis for calling JG a "revolutionary objective," which is why I am skeptical of the federal government transforming itself into revolutionary subject. Is the "executive committee of the ruling class" going to knowingly take on this role or is the revolutionary nature of the proposal so subtle that they'll adopt the stealth self-overthrow without knowing what they are doing?

Bruce Wilder said...

It would be helpful, I would think, if we could move the common sense of the popular political discourse away an obsession with merely nominal government deficits to a primary concern with the cruelty of leaving people without opportunities to be productive with their lives in the time they have in order to assuage the anxieties of people whose greed cannot be satiated: in other words, if we could strike a better* balance between the predatory instincts of the ruling classes and the interests of the (as opposed to the ruling classes' interest *in* its) human prey. (*recognizably better for the prey)

We squeezed out something for the prey when it was recognized that the prey mobilized could strength the state and the economic system. Teach them to read. Free them from bondage. Make elementary fairness a governing principle of law.

The ruling classes, apparently, want to substitute robots for the underclass and dispose of us. The Americans are fighting wars in a half dozen countries with drones. The Chinese are testing robotic main battle tanks. Elon Musk wants to replace drivers more than gasoline. So, yeah, a job guarantee.

Of course, the central issue will be whether the job is worth doing and is actually of any value to the ruling classes or just a transitional pathway to being mulched into soylent green.

It is a tricky thing politically, revolution is. If your plan is to kill the king, best to kill the king and be quick about it, because merely trying to kill the king is not a winning formula and the idea of the king will keep coming back even if you manage the first part. So, I get why MMT'ers might not want to look too directly at where they need to go early in the game. But, they are not the only ones playing, and the opposition is good at this game -- they play it professionally.

With all the talk of robots taking over, I am not that surprised that the JG has salience. But, the political context remains forever access to resources, power and the distribution of income. In our "very long run", the political problem will center on developing constraints on energy use, particularly fossil fuel use. In that sense, I think Sandwichman's obsession with the political means of constraining work hours and spreading it around has seldom had more timely application. I would guess that most of the work those who labor for a living do isn't worth doing now and comes at a considerable cost to the environment as well at the expense of actually doing a life worth doing. That, it seems to me, is almost more important than discursions into the incentive problem that will no doubt detain the minds of those dedicated to serving the employer class.

Sandwichman said...

A small chuckle Atrios and I shared on Twitter: "imagine a JG program designed by the architects of Obamacare." What I haven't mentioned often is that my research on working time reduction bagged its first trophy critiquing the flaw in hours of work legislation -- its reliance on the overtime premium as a (presumed) disincentive to long hours of work. In short, criticism should never be mistaken for opposition.

What if, instead of federally-guaranteed jobs, we had "workers' collectives" guaranteed jobs? First, of course, there would to have to BE workers' collectives, a new institution. Such institutions would not have to wait until "comes the revolution" or even until after the election of President Corey Booker. Rather than having to decide between a Job Guarantee a Universal Basic Income and a reduction and redistribution of working time, a workers' collective could determine democratically how much of each might be warranted at a particular time under given circumstances. The workers' collective may not have dictatorial powers but may have to collectively bargain these priorities with the owners of the means of production.

Jerry Brown said...

What makes a labor strike effective is the ability of the striking workers to stop providing something of value to the employer- their labor. Yes, it helps to make it difficult for the employer to replace that labor and to try to impose other costs on the employer, but if the service being withheld is not of considerable value to whoever had been paying for it previously, the strike will not be very effective. Someone on a job guarantee provided job might withhold their labor, but the nature of the program is that those jobs were not previously thought to be either profit making for the private sector, or essential enough that they would have been publically paid for already. So what would be the point of striking in that case? If the labor provided actually became greatly missed if it was to be withheld, then perhaps those jobs would be reclassified as 'normal' public or private sector jobs.

I don't think we need to worry about striking job guarantee employees. How a Job Guarantee would increase labor bargaining power is by setting a higher floor for wages and working conditions, and by eliminating the need for the lowest paid workers to undercut each other out of desperation for an income.

Like Calgacus said, MMT never says inflation is not a problem. MMT says inflation is the only problem is a lot closer to the truth.

Sandwichman said...

That is an excellent point, Jerry, and one I was reluctant to overtly make myself for fear of it being rebutted as a misrepresentation of the nature of the jobs. JG workers would have very little or none strike leverage and thus not much collective bargaining power. They would have to rely on the gains they enable for private sector workers to trickle down to them through legislative improvements.

When I said MMT says inflation is not a problem, I meant that MMTers think MMT has the solution to the problem -- that solving the problem is a cinch once you have the right theory. Maybe not all MMTers are as confident as Calgacus but I certainly do get the impression from those I converse with that they think they've got it all pretty much worked out and all that is needed is to hand over the technocratic ropes the UMKC and Levy Institute crowd. Of course I am exaggerating for emphasis-- but not that much, really.

Jerry Brown said...

Yes, not much bargaining power. But a job and income- if they want it- in the meantime. Which could only be a positive for the individual, since it provides an optional alternative to being unemployed possibly without income. And that would give some bargaining power as far as alternative private sector jobs. That is very important if something like the $15/hour plus health benefits like the Sanders plan came to be. Or any of the real MMT ideas of what a job guarantee entails and promises.

And that doesn't get into the possible systematic supply side benefits of a buffer stock of employed people verses current policy of maintaining a reserve of unemployed to try to control inflation. And that is where the MMT economic argument is, rather than the more purely ethical argument.

Peggy Dobbins said...

Tom, I posted this econospeak to FB It's about time discussion with this intro.

So glad this guy writes. But PULEEZE don't give anyone any excuse to throw out the baby before we hear her cry. Keep on Senator Gellibrand! Take this as one reason to think through Government Guaranteeing any applicant 20 hours of labor to earn a rising standard of living by subsidizing un-and underemployed folks with proposals for employing local applicants to do what they already can do. This would probably take the form of loans to social justice oriented entrepreneurs some of whose concepts would become self sustaining, some fewer profitable enough, to have to rethink etc etc etc this concept.
Note: Most small businesses are expected to fail anyway. Bankers factor that in already. Give the millennials without trust funds a chance. Fund projects that aren't clones of ones funded before.
People, good people need brain stretching, neuron jiggling. If folks on the left, we who believe ourselves "of the people for the people" can't conceive of guaranteeing any applicant 20 hours of labor they can do to earn a rising standard of living, those on the right will pass something that looks like/sounds like it but is the opposite. Image-Ing "guaranteed job" as looking like CCC or WPA is like thinking of 21st century public transit looking like a streetcar. The Right co opts the virtues of Labor. The Left surely can coopt the virtues of the entrepreneur's banker(née Mr. Capital. And btw: don't tell, but Marx's birthday is Cinco de Mayo every year)

Sandwichman said...

Good point, Peggy. I do welcome the promotion of these proposals by Senators Gillibrand, Sanders and Booker. A right to work (as opposed to right-to-work) should be part of a progressive policy agenda. There can be conservative and emancipatory versions of policies that go under the same label. A great danger is that people who think they have bought the emancipatory version may find when they unwrap it that it was the conservative one.

Blissex said...

«Could it be that the advocates of the Job Guarantee have not done their opposition research? Do they suppose that the regime of supply-side, trickle-down, corporate neo-liberalism was inadvertent?»
«But, they are not the only ones playing, and the opposition is good at this game -- they play it professionally.»

Our "Sandwichman" and Bruce Wilder are the more realistic among many "idealistic progressives" and do consider some important aspect of the policy situation, like the bug-business opposition.

But as usual the number one political reality is conveniently forgotten: real estate prices is the american religion, as someone said long ago, and residential real estate owners are big chunk of voters. In addition after the union and progressive advances post-WW2 there is now a large chunk of rentier pensioners, and medical advances have extended their life.

These huge blocks of voters consider USA workers as greedy exploitative parasites, and are delighted by rising unemployment and underemployment.

There is nowadays *mass voter demand* for lower wages and higher unemployment, it is no longer just "the bosses", the 1% or 0.1% of 0.01%; mass rentierism has been the bedrock of neoliberalism for the past 40 years, the critical mass for Republican and clintonian politics.

Mass rentierism has probably been the biggest political and economics issue during the neoliberal era.

The "progessive left" has steadfastly ignored this gigantic issue, especially the politicians (who are well aware that petty rentiers are mostly older women and always vote and often donate to campaigns), but also the thinkers.

Sandwichman said...

"Mass rentierism has probably been the biggest political and economics issue during the neoliberal era."

Oh Blissex, you are right of course, damn you. The rentiers are too damn high on rent! Where, oh where is Henry George when we need him? Keynes's euthanasia didn't work out as promised. Instead we got the sorcerer's Apprentice.

Blissex said...

«Instead we got the sorcerer's Apprentice.»

Calling Greenspan (and accomplices) "sorcerer apprentices" with their policy of endless multiplication of leverage is quite appropriates. And they were popular because the fantastic series of minskian "Ponzi stage" bubbles in the USA and many anglo-american (and not only) culture countries, have made amazing fortunes for upper-middle (and many middle) class incumbents, who gratefully vote for more of the same.

There is a secondary phenomenon that means that lower wages and higher unemployment are popular among many voters: a lot of sandwichmen being illegal immigrants can only vote in already-Democratic majority states and counties.
Coupled with the rising percentage of voters who are rentiers it has indeed shifted the political climate and economic policy into ever more anti-georgist and anti-keynesian aims.

Again, I am astonished by how rarely "progressives" acknowledge political reality, which is that as long as property prices and rents balloon up a large block of voters keep voting fro Republicans and clintonian policies.

Calgacus said...

When I said MMT says inflation is not a problem, I meant that MMTers think MMT has the solution to the problem -- that solving the problem is a cinch once you have the right theory. Maybe not all MMTers are as confident as Calgacus but I certainly do get the impression from those I converse with that they think they've got it all pretty much worked out and all that is needed is to hand over the technocratic ropes the UMKC and Levy Institute crowd. Of course I am exaggerating for emphasis-- but not that much, really.

First of all, to have a solution to a problem, you have to have a problem. Where is this inflation problem, where has it been for years? Of course, inflation is an intrinsically theoretically unsolvable problem; practically the whole purpose of a monetary production economy is to solve it. But it succeeds well enough most of the time. It is (frequently) not clear to me what you are saying, which makes it hard to argue. Do you think inflation is a problem now, would be a worse one after a JG, or that the mere existence of a JG would set off spiraling inflation? Or that continually pushing up the JG wage, say due to strikes, would be inflationary? Beveridge here seems like a lousy prophet to me.

But I think you are just largely looking at it the wrong way. Second, to solve a problem, you have to want to solve it. But the normal state of a peacetime capitalist economy is deflation; the normal state in wartime is inflation. (Dudley Dillard from memory). Capitalists know this and work very hard, all the time to create inflation and bullshit jobs and wars, new ways to waste and grab public money, new inefficiencies to feed off. New inefficient privatizations to replace public entities. That waste is what the whole military and all the other self-licking ice-cream cones is about. But as Harold Vatter & John Walker pointed out a while ago, we're too rich and efficient for new wars to have sufficient effect. That's what the US health care sector is all about. An unaccommodated switch to efficient socialized medicine would create a great depression. And all the other scams, the finance sector, whatever. James Galbraith in his Predator State & elsewhere is great on this - soft budget constraints and Keynesian devolution.

So a big effect of having a JG on inflation is - helping end all this pro-inflationary bullshit. And abandon the cult belief that raising interest always and everywhere magically fights inflation, when it often enough feeds inflation. There are many other anti-inflation tools out there. All the ones applied in WWII, all the ones progressively abandoned in the last few decades because they didn't fit well with the fashionable crackpot economics theories. I can't think of a place that MMTers wrote up a summary, so I wrote one myself a few years ago, but I can't remember where I posted it. :-) Deflation is just as likely a consequence of a JG as a one time price rise. Continual inflation is farfetched.

But the precise MMT claim, the only thing they need to make all their arguments work is that a JG is not a worse anti-inflation buffer stock than unemployment. The contrary claim is imho preposterous, and has never been seen in real life JG-ish policies afaik. Wray in his first book notes that even if unemployment turned out to be superior, the benefits of full employment are so manifest that it would still be absurd not to have a JG, you just have to argue a bit differently.