Jason Smith — Unions, inequality, and labor share

The information transfer model tracks this pretty well.

Information Transfer Economics
Unions, inequality, and labor share
Jason Smith

Stiv — Donald Trump Insists That Wages Are ‘Too High’

Donald J. Trump on Wednesday morning repeated a statement he made the night before in the Republican presidential debate: that wages are “too high” in the United States, an argument he made to explain his opposition to raising the minimum wage....

In an interview Wednesday morning on “Morning Joe” on MSNBC, the co-host Mika Brzezinski raised the topic again, which gave Mr. Trump the chance to clarify his remarks from the debate. She pointed out the current minimum wage, saying, “Donald, nobody can live on that.”

Mr. Trump responded: “Our taxes are too high. Our wages are too high. We have to compete with other countries.”

Counter Current News
Donald Trump Insists That Wages Are ‘Too High’
Stiv

David F. Ruccio — How the reserve army works

The new jobs report is out and, pretty much as expected, a bunch of new jobs (242,000, to be exact) were created in February and the official unemployment rate remained the same (at 4.9 percent). But workers’ wages actually declined.

What’s going on?

What’s going on is a key feature of capitalism: the reserve army of labor.

Occasional Links & Commentary
How the reserve army works
David F. Ruccio | Professor of Economics, University of Notre Dame

Jerry Khachoyan — Is The Consumer Getting Squeezed?

Some light glimmering in the tunnel of wage darkness?

The Armo Trader
Is The Consumer Getting Squeezed?

Jerry Khachoyan

Bill Mitchell — Keynes and the Classics – Part 3

I am now using Friday’s blog space to provide draft versions of the Modern Monetary Theory textbook that I am writing with my colleague and friend Randy Wray. We expect to complete the text during 2013. Comments are always welcome. Remember this is a textbook aimed at undergraduate students and so the writing will be different from my usual blog free-for-all. Note also that the text I post is just the work I am doing by way of the first draft so the material posted will not represent the complete text. Further it will change once the two of us have edited it.

I am currently working on Chapter 11 which opens like this:

Chapter 11
11.1 Introduction and Aims
In Chapter 10, we discussed issues relating to labour market measurement. In this Chapter we will focus on theoretical concepts that underpin the measurement of economic activity in the labour market and the broader economy.

The Chapter has five main aims:
▪ To explain why mass unemployment arises and how it can be resolved.
▪ To develop the concept of full employment.
▪ To consider the relationship between unemployment and inflation – the so-called Phillips Curve.
▪ To develop a buffer stock framework for macroeconomic management (full employment and price stability) and compare and contrast the use of unemployment and employment as buffer stocks in this context.
▪ To more fully explore the concept of a Job Guarantee (employment buffer stock) approach to macroeconomic management.

NOTE:
At present, I am outlining the Classical theory of employment determination and output – which is the basis of their denial of involuntary unemployment. In the section last week – Keynes and the Classics – Part 1 – I explained how the Classical system conceives of labour supply and demand and how these come together to define the equilibrium level of the real wage and employment.

Yesterday – Keynes and the Classics – Part 2 – we showed how the labour market determined the level of employment and real wage, which in turn, via the production function set the real level of output.

In other words, all the major real variables in the macroeconomics system were considered to be determined by the labour market and the production technology – a supply-side approach.
We also introduced the concept of unemployment into the Classical system and saw that it could only be a temporary phenomenon if real wages were flexible. Only so-called institutional rigidities such as trade unions and government minimum wage legislation could lead to a situation where unemployment was persistent.

We then started to see why the Classical system denied the possibility of generalised over-production – and in that context introduced the Classical theory of interest via the loanable funds doctrine.

That is where I am picking up from today. Note Section 11.9 is a slightly revised version of yesterday’s text – to get me rolling again!

NEW TEXT STARTS TODAY

11.9 The loanable funds market – Classical interest rate determination

Bill Mitchell — billy blog
Keynes and the Classics – Part 3
Bill Mitchell

Chris Kirkham — Jobs Report Makes Headlines, Masks Low-Paying Reality

More than half of the jobs created last month were in lower-wage industries, such as retail and hospitality. Hourly earnings in those service sectors are far lower than in areas such as construction and manufacturing, which saw no job growth last month and were two of the hardest-hit by the recession.

"You have these data blips coming in, and everyone wants to make something of them, but the jobs that are being created just aren't great jobs," said Kent Smetters, a professor of business economics and public policy at the Wharton School of the University of Pennsylvania....

"There's just a surplus of labor that allows firms to bid down wages," said Joseph Brusuelas, a senior economist at Bloomberg....

"Nothing's really changed. It was a good report, but problems persist -- and significant ones," Brusuelas said. "We're adding jobs at about 150,000 a month, the majority of them are low-paying jobs, and the pace of job creation, while a positive, is not sufficient to bring the unemployment rate down for the right reasons."

The Huffington Post

Jobs Report Makes Headlines, Masks Low-Paying Reality
Chris Kirkham

Mark Thoma — Outsourcing Government: What Is Mitt Romney Talking About?

Romney's position all ideology, no substance?

Read it at Economist's View
Outsourcing Government: What Is Mitt Romney Talking About?
Mark Thoma | Professor of Economics, University of Oregon

Chinese Workers Demanding Better Wages, Conditions, Real Union Protections

The first signs of real trade unions and factory strikes may signal the end of China's low cost, low human rights advantage.

Read it at AlterNet
Chinese Workers Demanding Better Wages, Conditions, Real Union Protections
By Lijia Zhang
Repost from The Guardian (UK) | Comment Is Free

When I became a worker at a rocket factory back in 1980, aged 16, workers enjoyed cradle-to-grave social welfare and a much higher status. We were hailed as "the masters of the nation".

During the free-market era, the state-owned factories laid off excess workers. Those who kept their jobs complained about low salaries, rising labour intensity and the lack of job security. But they are generally better off than workers in the private sector, which now employs 70% of the workforce. The employees at Foxconn worked up to 16 hours a day, in silence (talking was forbidden), with only a few minutes for toilet breaks. Socialism's "masters of the nation" have been reduced to cheap commodities in this cold-hearted capitalism.

Commoditization of labor versus workers as the dominant factor rather than capital.