...employment generally involves a power relationship: you have a boss, who tells you what to do, and if you refuse, you may be fired... We don’t know how much of this profit surge can be explained by the fear factor — the ability to squeeze workers who know that they have no place to go. But it must be at least part of the explanation. In fact, it’s possible (although by no means certain) that corporate interests are actually doing better in a somewhat depressed economy than they would if we had full employment...As he so often does, Paul Krugman writes an interesting column that says much but leaves out so much more.
... Paul Krugman, The Fear Economy, NYT
Some people would have you believe that employment relations are just like any other market transaction; workers have something to sell, employers want to buy what they offer, and they simply make a deal. But anyone who has ever held a job in the real world — or, for that matter, seen a Dilbert cartoon — knows that it’s not like that.The weakness in today's otherwise strong NYT Krugman column about the unbalanced power relationship between boss and worker is the lack of his mention of the weakening of unions to the point of their being snuffed as a factor.
Just think of the change in the power relationship in NYC schools under Bloomberg between principal and teachers (and the rest of the unionized school workers).
The irony here is that in our situation, this massive disparity in power in the NYC schools is not due to a weak economy and the law of supply and demand or the lack of a union (I know, I know -- some of you are giggling already). In fact, the UFT has a major presence with fingers in every pie. Yet somehow this little thing called "protection of workers' rights" is a place where our esteemed leadership chooses not stick its fingers in too deep -- if at all.
Just think about how senior teachers fare with fair school funding giving principals power over hiring higher priced senior teachers. Or how tenure can be delayed year after year. Or how untenured teachers are at the mercy of a principal who can end their career with a swipe by giving them a Discontinue which blackballs them from working in any school in the city even if a principal wants them.
All this (and more) with barely a peep out of the UFT leadership. In fact if you want to look back at a list of 15 years of failure of the UFT leadership, possibly this imbalance (which even when I taught I thought was too much in the principals' favor) is now at the point of insanity. Truly, on many levels and in many schools the union just doesn't exist -- I think there are teachers in Mississippi with better balanced principal-teacher power relationships.
The fact is that employment generally involves a power relationship: you have a boss, who tells you what to do, and if you refuse, you may be fired. This doesn’t have to be a bad thing. If employers value their workers, they won’t make unreasonable demands. But it’s not a simple transaction. There’s a country music classic titled “Take This Job and Shove It.” There isn’t and won’t be a song titled “Take This Consumer Durable and Shove It.”Krugman goes on to talk about the "Quitting rate" as a measure -- and I'll have an analogy to our teaching situation in the other end of the quote that contradicts Krugman's point.
So employment is a power relationship, and high unemployment has greatly weakened workers’ already weak position in that relationship.
We can actually quantify that weakness by looking at the quits rate — the percentage of workers voluntarily leaving their jobs (as opposed to being fired) each month. Obviously, there are many reasons a worker might want to leave his or her job. Quitting is, however, a risk; unless a worker already has a new job lined up, he or she doesn’t know how long it will take to find a new job, and how that job will compare with the old one.So Krugman finds that the quit rate has dropped as the power relationship in favor of the boss (due to the slump) has risen - an inverse relationship.
And the risk of quitting is much greater when unemployment is high, and there are many more people seeking jobs than there are job openings. As a result, you would expect to see the quits rate rise during booms, fall during slumps — and, indeed, it does. Quits plunged during the 2007-9 recession, and they have only partially rebounded, reflecting the weakness and inadequacy of our economic recovery.
Now let's apply that to the NYC school system where as the power relationship has tipped so far in favor of the principal the quit rate seems to have risen (I have no data here only word of mouth) -- which makes perfect sense --- as teaching becomes intolerable people will leave. Or go to another school -- so maybe I am taking the broad look at "quit" to include leaving the school of an abusive boss -- turnover rates at schools are an indication.
But of course, the power imbalance between principal and teacher is not due to a weak economy but to a weak union.
Krugman explores the debate in progressive circles:
There’s been a somewhat strange debate among progressives lately, with some arguing that populism and condemnations of inequality are a diversion, that full employment should instead be the top priority. As some leading progressive economists have pointed out, however, full employment is itself a populist issue: weak labor markets are a main reason workers are losing ground, and the excessive power of corporations and the wealthy is a main reason we aren’t doing anything about jobs.Yes, 'tis the power of corporations and the wealthy, who own the politicians (and don't bet they don't or won't own de Blasio).
Now, here is the crux of Krugman's piece with a lot of truth. The poor economy and weakening of labor that goes with it is GOOD for corporate profits, not bad for them.
The economic recovery has, as I said, been weak and inadequate, but all the burden of that weakness is being borne by workers. Corporate profits plunged during the financial crisis, but quickly bounced back, and they continued to soar. Indeed, at this point, after-tax profits are more than 60 percent higher than they were in 2007, before the recession began. We don’t know how much of this profit surge can be explained by the fear factor — the ability to squeeze workers who know that they have no place to go. But it must be at least part of the explanation. In fact, it’s possible (although by no means certain) that corporate interests are actually doing better in a somewhat depressed economy than they would if we had full employment.Thus explaining the corporate/politician complex of killing labor, cutting spending that makes life for working class worse, and killing the safety net for those falling.
What’s more, I don’t think it’s too much of a stretch to suggest that this reality helps explain why our political system has turned its backs on the unemployed. No, I don’t believe that there’s a secret cabal of C.E.O.’s plotting to keep the economy weak. But I do think that a major reason why reducing unemployment isn’t a political priority is that the economy may be lousy for workers, but corporate America is doing just fine.
once you understand this, you also understand why it’s so important to change those priorities... the excessive power of corporations and the wealthy is a main reason we aren’t doing anything about jobs. Too many Americans currently live in a climate of economic fear. There are many steps that we can take to end that state of affairs, but the most important is to put jobs back on the agenda.
Sorry Paul, the "changing priorities, putting jobs back on the agenda" train left the station a long time ago. It will take a hell of a lot of bodies marching in the street to change the conversation. With American workers and unions being so dormant where can we get some zombies?
Read the full Krugman column in the order in which it was written (call me Paul if you need an editor):