Port strike and automation

[Gospel]

Labor share of GDP is 69%, so capital gets 31% share. If everyone got a 45% pay raise then capital share would be 0.

If there was no capital then labor would get something like $500/year (the approximate amount produced per capita in counties with almost no capital investment).

What is the appropriate share for capital given that the current level makes labor something like 150 times more productive, and labor gets something like 100x higher wages compared to not having access to that capital?

GDP doesn't fully measure wealth. My concern is not productivity, it's wealth distribution. Productivity has risen greatly yet wages have stagnated for the lower and middle classes.

Lower class certainly has. That always happens as societies develop--the market values skills over warm bodies. The spread between high skill and low skill is much wider than it was in the past and thus low skill is farther from the average. And the answer is not to simply pay them more--the result of that approach is more unemployment.

Higher wages don’t necessarily lead to job losses; in fact, they often improve worker productivity and contribute to greater economic stability. It’s not a one-sided outcome—higher wages can boost morale, increase spending power, and drive demand, which can lead to job growth rather than unemployment. I mean, where do you think their workers get their own personal goods from? Do they purchase goods shipped in from a habitable planet in the nearest star system?

 

[barbos]

The discussion went the usual way to blaming billionaires, completely ignoring the fact that these poor union "workers" are ridiculously overpaid.

So? Billionaires are ridiculously overpaid.

So? that's not the topic of discussion here.

Bruh, Billionaires and top executives are often paid astronomically more than their employees, even though workers are the ones driving the production and value creation.

Again, these fucking billionaires.
Dockworkers are free to quit their jobs and apply for billionaire positions.

These companies can absolutely afford to pay their workers more—it's just that the money is being funneled upwards to shareholders and CEOs.

No, they can't really afford that. To pay them more they have to charge their customers more. Ford/GM went bankrupt becasue of unions.

When CEO's & Shareholders are earning thousands of times more than the average worker, it’s not the workers who are overpaid, it's the system that's skewed.

When Shareholders lose their money, workers don't lose theirs.

Workers asking for increased wages is a response to the growing wealth gap.

No, they are extorting wages beyond any reasonable amount.

So yes, the fact that billionaires are ridiculously overpaid is absolutely relevant when discussing whether these workers are overpaid.

What also makes it relevant is that these companies, in particular, are owned by or accountable to much larger corporations, where shareholders and major investors—including potential billionaires—reap the benefits of profit growth.

Maersk - Despite fluctuating profits, still generated substantial revenue and has the financial capability to meet workers' demands for higher wages. They reported a profit before financial items (EBIT) of $470 million.

Hapag-Lloyd - Despite the decline in profits in Q1 2024, they still reported a significant profit of EUR 299 million. While there is a drop from the previous year's record profits, the company can still meet workers' demands for higher wages.

CMA CGM - In the second quarter of 2024, CMA CGM reported a net income of USD 661 million, with total revenue for the quarter standing at USD 13.1 billion.

Bruh...


I don’t see how these shipping companies wouldn’t remain profitable even after raising workers' pay. Do you? If so, I'd love to hear how.

 

[barbos]

The case I'm thinking of is commercial passenger airlines. The safety rules do not permit a complete turnover of cockpit crews--I wouldn't be shocked if this was deliberately put in there to have the very effect it does. So you have the current reality that the very senior pilots get very good pay while the junior pilots in many cases don't get enough to be safe. Union pay scales are engineered to trap workers with a single company to deprive them of their most powerful weapon: their feet.

Trap???

Hyperbole much?

I see nothing in that that rebuts what I'm saying.

To be fair, it's pretty common around here for some folks to miss rebuttals. That said, unions aren't intentionally trying to limit workers' power; the intention is to reward experience and loyalty. However, I do agree that seniority-based pay scales can have unintended consequences—what I consider side effects, and what you call an engineered trap.

For fuck's sake, what kind of experience deserves $200k salary here?
They are not flying passengers planes here to be paid more than US median salary.

Bruh, it’s all absurd. How does LeBron James make $48.73 million just to play with a ball, while someone in law enforcement, risking their life every day, barely makes $50k in the same time frame? Why are you so caught up with these workers when everyone—shareholders, CEOs, and billionaires—are being just as if not substantially more ridiculous?

LeBron James sells tickets and endorsements. He literally earns the money he is paid.
These dockworkers can be replaced by a random dude from the street. All you need is 3 months training and they all can be fired.

 

[Gospel]

Ford/GM went bankrupt becasue of unions.

The auto industry faced a range of challenges, including mismanagement, failure to innovate, increased competition from foreign automakers, and the 2008 financial crisis, which all contributed to their bankruptcy. I agree that the unions played a role, but it wasn’t a major one.

 

[barbos]

Labor share of GDP is 69%, so capital gets 31% share. If everyone got a 45% pay raise then capital share would be 0.

If there was no capital then labor would get something like $500/year (the approximate amount produced per capita in counties with almost no capital investment).

What is the appropriate share for capital given that the current level makes labor something like 150 times more productive, and labor gets something like 100x higher wages compared to not having access to that capital?

GDP doesn't fully measure wealth. My concern is not productivity, it's wealth distribution. Productivity has risen greatly yet wages have stagnated for the lower and middle classes.

Lower class certainly has. That always happens as societies develop--the market values skills over warm bodies. The spread between high skill and low skill is much wider than it was in the past and thus low skill is farther from the average. And the answer is not to simply pay them more--the result of that approach is more unemployment.

Higher wages don’t necessarily lead to job losses; in fact, they often improve worker productivity and contribute to greater economic stability. It’s not a one-sided outcome—higher wages can boost morale, increase spending power, and drive demand, which can lead to job growth rather than unemployment. I mean, where do you think their workers get their own personal goods from? Do they purchase goods shipped in from a habitable planet in the nearest star system?

Tell that to Ford/GM/Chrysler

 

[barbos]

Ford/GM went bankrupt becasue of unions.

The auto industry faced a range of challenges, including mismanagement, failure to innovate, increased competition from foreign automakers, and the 2008 financial crisis, which all contributed to their bankruptcy. I agree that the unions played a role, but it wasn’t a major one.

Well, failure to deal with union assholes can be called mismanagement.

 

[Gospel]

LeBron James sells tickets and endorsements. He literally earns the money he is paid.

Earns what he gets by playing with a ball.

 

[barbos]

LeBron James sells tickets and endorsements. He literally earns the money he is paid.

Earns what he gets by playing with a ball.

Nobody stops you from playing.

 

[bilby]

These dockworkers can be replaced by a random dude from the street. All you need is 3 months training and they all can be fired.

This is a very widely believed myth.

The fact is that even in the lowest skilled jobs in a modern workplace, a worker with five years experience will easily out-produce and outperform one who has three months of experience.

And these dockworkers are doing skilled work, with heavy and highly technical equipment that can do a huge amount of damage in a very short space of time if handled incorrectly.

Most managers have never been in a position to find this out, so they persist in believing the counterfactual that their experienced workers could be replaced overnight from a mythical infinite pool of proletarians.

 

[Bomb#20]

Productivity and skill doesn't justify this.

View attachment 48107

And this.

View attachment 48108

How do you know it doesn't? How do you measure the productivity of the people whose income paid for their respective families' assets?

So someone is so productive they deserve a 14 million dollar income? How does that work?

Didn't say they do -- you're the one making the moral claim; I'm just asking you to show your work. You posted a chart in support of your contention; doing that would have been superfluous if you were arguing productivity and skill don't justify any amount of family wealth. So I took you to be presuming that productivity and skill justify wealth, and I'm reasoning from your premise.

Assuming productivity and skill justify wealth, but not as much wealth as is shown in your chart, there are two issues to be resolved. (1) How much productivity and skill did the people who made those fortunes exercise? (2) What is the formula for calculating amount of justified wealth as a function of amount of productivity and skill? So I'm starting out by asking you about part 1: what do you think is the right way to measure productivity and skill? If we resolve that we can move on to part 2.

Productivity is measured the same way it's always been measured. By comparing inputs to outputs.

Skills are usually judged by others. In business usually employee evaluations and tests.

Were you expecting something differant?

As a rule the inputs and the outputs are different kinds of things, so they can't be compared directly -- how do you compare calories of food with lines of code? So to compare them they have to be rated along some common scale. What scale did you have in mind? Market price?

The 14 million dollar income you mentioned looks like it came from the 99th percentile line in your Family Wealth chart, which means we're talking about income accumulated over a lifetime -- the families in the 99th percentile are rarely couples in their twenties. Make a few hundred thousand a year over your life and your savings could easily add up to 14 million if your spending isn't out of control and you lend your savings to somebody who'll do something productive with them. So if the question is, how can someone be so productive her annual outputs go for a few hundred K more than her annual inputs at market prices, that's a cinch -- be competent at being a doctor, lawyer, manager or engineer. If those judging her skills louse it up and underestimate what she's doing for their bottom line, she can find another employer who makes more accurate judgments; the outfits that tend to overestimate them will lose money and become a shrinking fraction of the economy.

If you meant a 14 million annual income, we're way beyond the 99th percentile so we're not talking about your charts any more, but the same principle applies. Andy Jassy gets 21 million a year to run Amazon. The market price of his inputs is dominated by whatever Bezos pays for the information his people feed to Jassy; the market price of the output -- the stream of decisions he makes -- is 21 million more than that. Whether Jassy's decisions are 21 million dollars better for Bezos' company than mine would be if I had Jassy's job, I'm not qualified to judge, but I'm pretty sure Bezos is. And since Jassy is directing deployment of a 600 billion dollar revenue stream, his decisions only need to be about 0.003% better than mine would be, for him to be producing 21 million dollars of wealth every year.

(Personally, I don't justify wealth based on productivity and skill; ... Willing buyer, willing seller. The guy won the art lottery. ...

I like how you termed it "art lottery" because it very much is like a lottery to become wealthy in the arts. That includes musicians and bands, btw. My nephew's band has been "on the cusp" for years now. The thing is that artists do not rely on the work of others to supply them their wealth as the CEO class do.

How do you figure? Jackson Pollock wasn't using his artistic, um, "talent", to draw counterfeiting plates. He died with five million* dollars because other people had supplied him with that wealth.

(* In 1956. That's about 55 million in today's dollars.)

 

[Gospel]

Market price over here, proportional increases over there—hard to see a connection between the two. But if you believe hard enough, it's right there.

 

[ZiprHead]

Productivity and skill doesn't justify this.

View attachment 48107

And this.

View attachment 48108

How do you know it doesn't? How do you measure the productivity of the people whose income paid for their respective families' assets?

So someone is so productive they deserve a 14 million dollar income? How does that work?

Didn't say they do -- you're the one making the moral claim; I'm just asking you to show your work. You posted a chart in support of your contention; doing that would have been superfluous if you were arguing productivity and skill don't justify any amount of family wealth. So I took you to be presuming that productivity and skill justify wealth, and I'm reasoning from your premise.

Assuming productivity and skill justify wealth, but not as much wealth as is shown in your chart, there are two issues to be resolved. (1) How much productivity and skill did the people who made those fortunes exercise? (2) What is the formula for calculating amount of justified wealth as a function of amount of productivity and skill? So I'm starting out by asking you about part 1: what do you think is the right way to measure productivity and skill? If we resolve that we can move on to part 2.

Productivity is measured the same way it's always been measured. By comparing inputs to outputs.

Skills are usually judged by others. In business usually employee evaluations and tests.

Were you expecting something differant?

As a rule the inputs and the outputs are different kinds of things, so they can't be compared directly -- how do you compare calories of food with lines of code? So to compare them they have to be rated along some common scale. What scale did you have in mind? Market price?

JFC! If you can't dazzle them with brilliance, baffle them with bullshit.

Productivity is not about wages. High wages can present a problem, not because workers are paid too much but because they produce too little. In deciding how best to measure productivity, managers should focus not on dollars per hour but on labor dollars per product. That is, on labor content, not labor cost. Workers who are very productive can be paid thousands of dollars more than employees elsewhere and the business can still prosper, as manufacturers like Lincoln Electric have demonstrated.

Productivity measurement should focus on overall capabilities, not on one set of costs. How good is your company at taking a pile of raw materials, a bunch of machines, stacks of paperwork, and groups of employees, and turning out useful goods or services? That’s what a productivity index should address. It is, as much as possible, a relationship between physical inputs and outputs. The formula is disarmingly simple.

No-Nonsense Guide to Measuring Productivity

A few years ago, a major manufacturing-based conglomerate asked a gifted mathematician to join its corporate staff. One of his first assignments was to design a system that senior managers could use to evaluate the operating efficiency of the company’s various divisions. He devoted many months...

hbr.org

The 14 million dollar income you mentioned looks like it came from the 99th percentile line in your Family Wealth chart, which means we're talking about income accumulated over a lifetime -- the families in the 99th percentile are rarely couples in their twenties. Make a few hundred thousand a year over your life and your savings could easily add up to 14 million if your spending isn't out of control and you lend your savings to somebody who'll do something productive with them. So if the question is, how can someone be so productive her annual outputs go for a few hundred K more than her annual inputs at market prices, that's a cinch -- be competent at being a doctor, lawyer, manager or engineer. If those judging her skills louse it up and underestimate what she's doing for their bottom line, she can find another employer who makes more accurate judgments; the outfits that tend to overestimate them will lose money and become a shrinking fraction of the economy.

If you meant a 14 million annual income, we're way beyond the 99th percentile so we're not talking about your charts any more, but the same principle applies. Andy Jassy gets 21 million a year to run Amazon. The market price of his inputs is dominated by whatever Bezos pays for the information his people feed to Jassy; the market price of the output -- the stream of decisions he makes -- is 21 million more than that. Whether Jassy's decisions are 21 million dollars better for Bezos' company than mine would be if I had Jassy's job, I'm not qualified to judge, but I'm pretty sure Bezos is. And since Jassy is directing deployment of a 600 billion dollar revenue stream, his decisions only need to be about 0.003% better than mine would be, for him to be producing 21 million dollars of wealth every year.

Correction. Bezos doesn't pay that. Amazon's customers pay that. Amazon is famous for it's labor exploitation. Low pay and high rates of on the job injuries

(Personally, I don't justify wealth based on productivity and skill; ... Willing buyer, willing seller. The guy won the art lottery. ...

I like how you termed it "art lottery" because it very much is like a lottery to become wealthy in the arts. That includes musicians and bands, btw. My nephew's band has been "on the cusp" for years now. The thing is that artists do not rely on the work of others to supply them their wealth as the CEO class do.

How do you figure? Jackson Pollock wasn't using his artistic, um, "talent", to draw counterfeiting plates. He died with five million* dollars because other people had supplied him with that wealth.

(* In 1956. That's about 55 million in today's dollars.)

Please reread and respond to what I said.

 

[barbos]

These dockworkers can be replaced by a random dude from the street. All you need is 3 months training and they all can be fired.

This is a very widely believed myth.

The fact is that even in the lowest skilled jobs in a modern workplace, a worker with five years experience will easily out-produce and outperform one who has three months of experience.

And these dockworkers are doing skilled work, with heavy and highly technical equipment that can do a huge amount of damage in a very short space of time if handled incorrectly.

Most managers have never been in a position to find this out, so they persist in believing the counterfactual that their experienced workers could be replaced overnight from a mythical infinite pool of proletarians.

I repeat, there is nothing remarkable about jobs they do which would justify $200k salaries.
3 months and average dude from the street can reach their level.
Passanger planes pilots are not average. Tenured professors are not average, programmers are not average (even at the lowest level), doctors (usually) are not average, even some car mechanics are not average. Dockworkers are the definition of average.

 

[ZiprHead]

These dockworkers can be replaced by a random dude from the street. All you need is 3 months training and they all can be fired.

This is a very widely believed myth.

The fact is that even in the lowest skilled jobs in a modern workplace, a worker with five years experience will easily out-produce and outperform one who has three months of experience.

And these dockworkers are doing skilled work, with heavy and highly technical equipment that can do a huge amount of damage in a very short space of time if handled incorrectly.

Most managers have never been in a position to find this out, so they persist in believing the counterfactual that their experienced workers could be replaced overnight from a mythical infinite pool of proletarians.

I repeat, there is nothing remarkable about jobs they do which would justify $200k salaries.
3 months and average dude from the street can reach their level.
Passanger planes pilots are not average. Tenured professors are not average, programmers are not average (even at the lowest level), doctors (usually) are not average, even some car mechanics are not average. Dockworkers are the definition of average.

I agree. All those people need raises.

 

[barbos]

I agree. All those people need raises.

Only those? No! everyone should get a raise so that $200K becomes new median.
So prepare for $700k professors and $2mil/year airline pilots and $120K Walmart cashiers.

 

[Loren Pechtel]

Nobody is saying they should not get paid. But they are already very well paid. They want ridiculous amount more (70% pay increase) and no automation in ports, and are using extortion, monopoly power of their union, and an unreasonably friendly White House to get their way.

First time I've heard collective bargaining referenced to as extortion.

That's bizarre -- that rhetoric is a fixture in debates about unions, and you've been in quite few of those. But hey, you've heard what you've heard. Have you ever heard employment for wages referred to as extortion? "Do what I say or else you're fired."? Calling that extortion is a fixture in debates about capitalism, and you've been in a few of those too.

The thinking behind this sort of rhetoric is identical. It's not reasoning-based; it's a pattern-matching thing. In some people, "If you don't do for me what I want, I won't do for you what you want." triggers the same neural network as "If you don't do for me what I want, I'll beat you up.".

I called it extortion because it is. Fundamentally, extortion is a threat to do harm if the target doesn't do the desired action. And that's what a strike is. It's about disrupting operation, not merely about not working.

By that standard, negotiating for anything counts as "extortion". People will call anything they don't like "harm", and the whole point of negotiating is to get a larger fraction of the producer+consumer surplus for yourself, which necessarily involves a threat to "harm" the other party by reducing the remainder of the producer+consumer surplus to zero.

No. It's a matter of adding negative value to noncapitulation. The workers not working is simply removing a positive value. The workers attempting to keep others from working is adding negative value.

A grad student I interviewed at one of my old jobs was so good he got an offer not just from my boss but also from another department of the company, in Oregon. He ended up going there. My department probably could have gotten him if we'd offered him more. But of course how much we offered him was up to HR, not to my boss. Likewise with Oregon -- when they offered him a position their offer was up to the exact same HR department, so of course both departments offered him the same pay and he chose the job he liked better rather than the pay he liked better. From our CEO's point of view it would have been ridiculous for us and Oregon to be competing with each other on price and bidding up his salary, since it was all coming from the same pile of money -- HR's job was to estimate how much they needed to pay him to get him not to take a job with some other company; it wasn't their job to let him play our departments off against each other and get more money from our shareholders than we needed to give him. But from his point of view it was collusion between two competing buyers to hold down the price of his labor. We in effect threatened to not hire him at all if he wouldn't go for our single take-it-or-leave-it offer; that evidently would have "harmed" him by disrupting his plan for how he was going to operate his career. So the question is, by choosing to put up a united front in our negotiation with him, instead of competing with each other, were our two departments "extorting" him?

There is negative value in your example, thus no extortion.

 

[Loren Pechtel]

It is simply not possible for that labor's share of GDP in the US since the 1980s because of people are being replaced by automation because THERE ARE MORE PEOPLE WORKING.

What you are missing is that more is being done.

Some numbers for illustration only: We had 100 workers and machines equivalent of another 100. Now we have 150 and machines that are equivalent to 300. More workers, lower percent of productivity due to the workers.

I pointed out a fact that contradicts barbos’s written claim. Labor’s share of GDP did not decline because fewer people are working because there are more people working. Productivity is irrelevant to that reality based observation.

Your claim is akin to saying 2 + 2 = blue….

I corrected a premise about fact: the number of people working since the 1980s has not decreased but increased. Hence the hypothesized causation by barbos is false because it is based on a false premise.

<Whack! With a clue-by-4.>

You conveniently snipped away the part of my response that explained your error. That doesn't fix it.

There is nothing to fix - you appear unable to parse basic statetments. barbos's analysis is based
You committed a basic mistake: Comparing a percentage to an absolute value. I called you on it, you snipped my description of your error and you are now blaming me for your error. Are you a Republican?

I made no such comparison. Pointing out a premise is about a cause is false is not making a comparison. Please show my exact words in the sequence they appeared that makes you feel I compared anything, let alone a percentage to an absolute value so we can get to the bottom of your JD Vance imitation.

[Note: Somewhere in the quoting there is a nesting error, I'm not going to try to figure it out as the important parts are ok.]

Innermost quote: "labor's share". That's a percentage. "There are more people working." That's an absolute value. Your own words, all in one post. You can't say an absolute value is greater than a percentage.

 

[bilby]

I repeat

Yeah, you do.

It doesn't make you less wrong, though; Just more tedious.

 

[barbos]

I repeat

Yeah, you do.

It doesn't make you less wrong, though; Just more tedious.

I am right and you are wrong.

 

[Loren Pechtel]

Labor share of GDP is 69%, so capital gets 31% share. If everyone got a 45% pay raise then capital share would be 0.

If there was no capital then labor would get something like $500/year (the approximate amount produced per capita in counties with almost no capital investment).

What is the appropriate share for capital given that the current level makes labor something like 150 times more productive, and labor gets something like 100x higher wages compared to not having access to that capital?

GDP doesn't fully measure wealth. My concern is not productivity, it's wealth distribution. Productivity has risen greatly yet wages have stagnated for the lower and middle classes.

Lower class certainly has. That always happens as societies develop--the market values skills over warm bodies. The spread between high skill and low skill is much wider than it was in the past and thus low skill is farther from the average. And the answer is not to simply pay them more--the result of that approach is more unemployment.

Higher wages don’t necessarily lead to job losses; in fact, they often improve worker productivity and contribute to greater economic stability. It’s not a one-sided outcome—higher wages can boost morale, increase spending power, and drive demand, which can lead to job growth rather than unemployment. I mean, where do you think their workers get their own personal goods from? Do they purchase goods shipped in from a habitable planet in the nearest star system?

The problem is the higher the wage the more incentive there is for the employer to find some other means of doing it. I watched it happen with my former employer, we repeatedly moved from a worker doing X to a worker tending a machine that does X. And we did things to reduce the total labor even needed. The spray department originally would take each piece and spray it. Let it dry, turn it over, spray it again. Eventually that was replaced with a track system. Parts would be hung from the track and go through the spray station--now the spray guy only sprayed, did nothing else. Since the parts were hanging all sides could be sprayed. (They were hung from the already-cut mounting holes.) The track then went up to the ceiling and wandered around inside a cage for a while, eventually descending to have the now-dry items removed. Less labor and fewer interactions--and the fewer interactions the lower the chance of damage.

Or look at what has happened with appliances. You pretty much do not repair them any more because rarely is it worth it. DIY types might do the easier things and that's pretty much it.