March 18, 2015 – Arsenal For Democracy 120


Topic: How the Shareholder Revolution is hurting America’s businesses and workers. People: Bill, Nate. Produced: March 16th, 2015.

Discussion Points:

– What happens to companies that borrow money to make shareholder payouts?
– Why aren’t American companies investing in the future as much as they used to?
– Why should American companies tie wages to increases in profits and productivity instead of focusing on dividends and stock buybacks?

Note for listeners: We’re testing a half-hour version of the show over the next few weeks. Let us know whether you prefer this format or the longer format.

Episode 120 (27 min):
AFD 120

Related Links:

AFD: Corporate borrowing diverted to shareholders, not investment
The Roosevelt Institute: Blog post on “Disgorge the Cash: The Disconnect Between Corporate Borrowing and Investment”
The Globalist: U.S. Stock Ownership: Who Owns? Who Benefits?
The Globalist: Can the United States Close the International Wage Gap?
The Globalist: Want to Fix Income Inequality? Relink Wages to Productivity


RSS Feed: Arsenal for Democracy Feedburner
iTunes Store Link: “Arsenal for Democracy by Bill Humphrey”

And don’t forget to check out The Digitized Ramblings of an 8-Bit Animal, the video blog of our announcer, Justin.

November 26, 2014 – Arsenal For Democracy 108


Topics: Big Ideas for Reforming American Governance – Rethinking Immigration; Volkswagen unionizes in Tennessee; Burkina Faso’s pseudo-civilian government. People: Bill, Nate. Produced: November 26th, 2014.

Discussion Points:

– Big Ideas: On immigration reform, do both Congressional Inaction and Executive Action miss the real causes of the current situation? Should immigration law be rewritten from the ground up?
– Can Volkswagen’s cooperative unionization of Tennessee workers serve as a model for other firms in the US?
– Has the military government of Burkina Faso co-opted the purported transition to civilian rule? Did foreign powers rush the transition?

Episode 108 (56 min)
AFD 108

Related links
Segment 2

AFD: “Volkswagen US still driving toward unionization”
Nashville Public Radio: “Labor Secretary Wants Volkswagen’s Tennessee Plant To Become A Model”

Segment 3

AFD: “Lt. Col. Isaac Zida: The Wolf of Ouagadougou”
War Is Boring (Medium): “Burkina Faso Made the Pentagon Nervous”


RSS Feed: Arsenal for Democracy Feedburner
iTunes Store Link: “Arsenal for Democracy by Bill Humphrey”

And don’t forget to check out The Digitized Ramblings of an 8-Bit Animal, the video blog of our announcer, Justin.

Volkswagen US still driving toward unionization

volkswagenBack in February, German automaker Volkswagen’s U.S. division attempted to unionize their own workers in Tennessee, the center of union-free US auto manufacturing. That effort was thwarted by illegal interference by anti-union politicians and threats of cancellation of state subsidies and incentives. But it didn’t stop the company’s pro-union management.

As I explained in February, most major German corporations are big fans of cooperating closely with unions (at least far more than their American or British counterparts). This cooperation increases social-corporate harmony and it encourages win-win negotiations instead of everyone trying to bleed everyone else dry. This tradition of having unions and management work together in formalized joint committees, and (in Germany) even usually having the companies partly owned by the workers themselves to give them an official say in management and a stake in the company’s long-term health, has been a key tool for consensus-building and smoothing potential tensions over.

Despite the defeat in February, a collection of over 700 workers in Chattanooga voluntarily formed their own United Auto Workers local later in the year for the purposes of eventually unionizing the company’s labor force, as desired by management. Initially, it seemed like this might be delayed until some time well into 2015 by the setback in February and the local political opposition.

But Volkswagen is so determined to unionize its US employees over the objections of Tennessee Republicans (and to get around so-called “Right to Work” anti-union laws) that they held negotiations with the United Auto Workers in Germany to come to an arrangement to bring a union on board for its workers. Reportedly, they will be partially recognizing unionization of their Tennessee workers some time in the next few days. The UAW says that the interim deal, in place at least until a final vote to unionize (which will still have to come later), does not cover collective bargaining but does allow for a clear process of worker-management meetings, in the aforementioned German postwar tradition.

From the Wall Street Journal summary, the German approach is precisely what the company hoped to implement at minimum:

The new policy could allow the auto maker to accomplish its goal of establishing a German-style “works council” where workers and managers set up the rules and operations for the plant, but might prevent the UAW from gaining full bargaining control at the plant because of the presence of smaller unions.

The company said it is creating three tiers of representation for workers based on the percentage of hourly workers who sign up. The rule is expected to allow a UAW local that claims more than half the plant’s hourly work force has joined it to gain influence at the plant, but it also allows for other unions to set up shop.

Volkswagen said the new policy will govern its interactions with labor organizations who represent a significant percentage of factory employees. Volkswagen will use an external auditor to verify the percentage “to determine what level of engagement has been reached,” it said.
VW has a works council at most of its plants and would like to have one in the U.S. These worker-management groups set up schedules, benefits, operations and even take part in the business side of the operation. Under U.S. labor law, workers can’t participate in a works council unless they are represented by an independent union, and not a “company union.”

The remaining big question is whether the UAW can overcome the opposition of anti-UAW workers and Tennessee officials who are putting together a rival “union” to dilute the future bargaining power of the UAW within the Tennessee operation of Volkswagen.

Denmark’s fast food wages

Despite no minimum wage law but because of very strong unions and bargaining arrangements, Danish workers make more than twice as much money per hour working for US chains there as most of our workers make working for them here. And that’s on top of their generous government programs and universal healthcare. Curiously, the companies still make a profit (a smaller one, but it’s still there) and retain employees better, and those fast food employees don’t need to be on public assistance like half of ours are.

You’ve got to have one or the other (if not both) — a good minimum wage law or a labor union capable of negotiating against an array of vast corporate entities — to stand a chance of achieving a situation like this. Yes it means the corporate profits are slightly reduced and the prices are slightly raised, but the workers aren’t forced to live in poverty with food stamps and little to no healthcare, and instead they can pay for housing and consumer goods and move themselves and the wider economy up in the world.

Either way, we end up paying the bill somehow, whether at the point of sale or in taxation. Shouldn’t the goal, even for conservatives, be for the market to provide workers with a living wage and the dignity that comes with that, so taxes and government spending aren’t even involved?

Links to our past coverage of comparisons between US and European labor market systems are below. Read more

Big Business is now creating chronic U.S. underemployment

One of the perennial problems in accurately measuring the U.S. labor market is how to handle “underemployment” or involuntary part-time employment by people who want to be working full time. The official Bureau of Labor Statistics defines this category as follows:

Persons employed part time for economic reasons are those who want and are available for full-time work but have had to settle for a part-time schedule.

Those people, whether working 30 hours a week or 10 hours a week, even at or near minimum wage, are ineligible for unemployment insurance benefits or virtually any other program that would help someone who was completely jobless. Any paying work at all, even when it’s not enough to make ends meet, usually kicks people out of eligibility for such programs.

More than five years after the peak of the 2007 U.S. recession, many Americans find themselves in this category of being “employed part time for economic reasons.” The U6 measure of unemployment, which factors these people into the official rate, stood at 12.1% in June 2014 — just shy of being double the official unemployment rate. Almost 7 in 10 part-time workers right now would like to work full-time.

The decision to leave underemployed people out of the official unemployment figures, as I’ve been arguing for five years, has probably been a major factor in not recognizing the severity of many of the emerging structural problems in the part-time work arena that ripple back into the wider consumer economy negatively. Instead, we were busy congratulating ourselves for two decades on supposedly having much “lower” unemployment than Western European economies.

Those economies, which generally use comprehensive definitions of unemployment much closer to our U6 metric, were rarely substantially higher than our U6 rate of unemployed plus involuntarily underemployed persons. Moreover, their “unemployed” people were, in fact, often working part-time (legally or illegally) at rates the same as or higher than our labor force was. So their unemployed/underemployed populations were in far less dire straits than ours during the same period, even without getting into the differences in social safety nets.

Let’s examine one of the big emerging problems that such measurement definitions helped obscure: Involuntary part-time employment for corporate profit reasons, rather than genuine economic reasons.

Often, at least in the past, the “economic reasons” for the lack of full hours came in the form of hours cutbacks (in place of mass layoffs) or general economic belt-tightening, during economic contractions/slowdowns/recessions, by those in positions to be hiring. That’s especially true at the small-to-medium business level.

But a far more insidious and damaging trend has exploded on to the scene from the Big Business end of the spectrum, as huge American corporations not only decline to hire more and more of their hourly wage workforce for full workweeks but then demand these part-time workers be “on-call,” without compensation, to work at virtually any hour, day or night, seven days a week. The schedule changes from week to week and from day to day, at the discretion of the corporate managers.

Almost half of all part-time workers, according to the Times, now have one week or less of advanced notice on their schedule. Among 26-32 year olds working part time, that figure is 47%. Beyond young workers, this problem disproportionately affects women and non-white workers.

In an ongoing series of articles from the New York Times examining the prevalence and consequences of this pernicious staffing practice, we can read example after example of people being forced not only to work part-time but to be available full-time without pay to work the paid hours, which prevents workers from taking second jobs to supplement their hours or finding a better/full-time job or completing their education. Here is one testimonial:

“You had to be available every minute of every day, knowing you would be scheduled for no more than 29 hours per week and knowing there would be no normalcy to your schedule,” he wrote. “I told the person I would like to be scheduled for the same days every week so I could try to get another job to try to make ends meet. She immediately said, ‘Well, that will end our conversation right here. You have to be available every day for us.’

“I asked, ‘Even though I’m trying to get another job?’ ‘Yes.’ Then she just stared at me and asked me to leave. What kind of company does this? What kind of company will not even let you get another job?”

  Read more

VW: When management is the vanguard of the proletariat

volkswagenBeen a busy month for me so I haven’t had a chance to give the story due diligence, but if you didn’t hear: the German automaker Volkswagen’s U.S. division attempted to unionize their own workers in Tennessee.

This is unusual for a number of reasons, as I’ll get to in a moment, but it’s particularly significant coming in Tennessee, a state that has become home to a lot of foreign car manufacturers’ American branches and is a so-called “Right to Work” state. “Right to Work” laws are designed discourage unionization by changing how worker votes occur and allowing management to intimidate or pressure workers into voting against forming a union, i.e. giving workers the “right” to work outside of union (because every American must have the right to be their own David against the corporate Goliath in contract negotiations… I guess?).

So anyway, if VW employees unionize, it will automatically put pressure on Tennessee’s other foreign-based carmakers to raise wages somewhat to remain competitive and retain their workers, even if they remain non-unionized (past studies have demonstrated this effect pretty clearly), and it will probably encourage unionization drives elsewhere.
Read more