The Myth of Perpetual Inflation

[Hjalmar]

-- The oil crisis in the early 70's triggered worldwide inflation.

-- Labor unions were quick to follow suit with their inflationary wage demands.

-- Today oil prices are fluctuating between a high of $36/barrel and a low of $12/barrel... Gasoline prices are impacted accordingly.

-- We all know that market prices fluctuate based on supply and demand.

-- Labor unions want to mimic the market-based system which they claim their wage demands are based on... But mysteriously, there is never an oversupply of labor... An imagined shortage is used as leverage to ratchet up wage rates.

-- Even governments have learned the lessons of a market-based economy.. Today, governments are struggling to keep income tax rates competitive with other jurisdictions in order to prevent the brightest and most ambitious amongst us from making their exit to more favorable tax jurisdictions in a mobile, global economy.

-- In the meantime, public sector unions are attempting to thwart these efforts with their outlandish demands and, in so doing, hold taxpayers to ransom.

-- Why are labor unions allowed to lock in high long-term wage rates while the market based system is faced with fluctuating prices?

-- How can labor unions continue to use the lame excuse that they must have a wage increase to keep up with inflation...a by-product of their own creation?

-- If labor unions want to drive inflation they better be prepared to also eat it.

[falling leaf]

Hjalmar

-- If labor unions want to drive inflation they better be prepared to also eat it.

Very well said Hjalmar.

[Michael Hardner]

-- The oil crisis in the early 70's triggered worldwide inflation.

-- Labor unions were quick to follow suit with their inflationary wage demands.

-- Today oil prices are fluctuating between a high of $36/barrel and a low of $12/barrel... Gasoline prices are impacted accordingly.

-- We all know that market prices fluctuate based on supply and demand.

This last point would be absolutely true if cartels didn't exist.

-- Labor unions want to mimic the market-based system which they claim their wage demands are based on... But mysteriously, there is never an oversupply of labor... An imagined shortage is used as leverage to ratchet up wage rates.

I don't think I've heard labour unions use this argument to support demands for wage gains, ie. that there is a labour shortage in their industry. I'm not 100% sure this is what you're saying, though.

-- Even governments have learned the lessons of a market-based economy.. Today, governments are struggling to keep income tax rates competitive with other jurisdictions in order to prevent the brightest and most ambitious amongst us from making their exit to more favorable tax jurisdictions in a mobile, global economy.

A bigger concern, I think, is attracting investment in the economy.

-- In the meantime, public sector unions are attempting to thwart these efforts with their outlandish demands and, in so doing, hold taxpayers to ransom.

-- Why are labor unions allowed to lock in high long-term wage rates while the market based system is faced with fluctuating prices?

-- How can labor unions continue to use the lame excuse that they must have a wage increase to keep up with inflation...a by-product of their own creation?

You stated above that the inflation increase in the 1970s was trigged by a rise in oil prices. It's a chicken-and-egg thing.

-- If labor unions want to drive inflation they better be prepared to also eat it.

Well, they don't have to and they won't. Outlawing unions, or reducing their power would help a lot of big employers such as the auto companies and the federal government but it would also eliminate many well-paying jobs. In a consumer economy where such jobs are already on the decline, I'm not sure why this would be a priority. The big employers that have international presence are already reaping big gains from lower wages, as you have pointed out in the past.

I think we should be focussing on creating the conditions necessary for more well-paying jobs to be created, rather than eliminating them. 2/3 of our economy comes from consumer spending.

[RB]

our current monetary policy allows us to keep our inflation down. in the canadian economy inflation is not a major problem, if we presume a steady fully anticipation of inflation approx. 75% of movement in consumer prices will be incorporated into wage rates.

most companies benchmark their compensation. in my experience with bargaining and compensation management i see inflation affecting wage increase as anticipationary ...... that’s why the wage increase usually is only .2-2.5% in some tandem is being generous with some spill over bargaining

well, truth is wages hardly ever decline but even though i cannot substantiate a relationship between wages and unemployment, sometimes i wish rather than lay blame with union as some root when problem arises we could encourage more of development in employment creation and fixes such as:

1) some job strategies to integrate/help workers into the labor force because of the way technology is advancing

2) highest unemployment occurs with women and youths so strategies help the these folk with training/experience

3) give financial or training assistance to the unemployed

4) stimulate innovative market solutions to labor problems

5) also there are some chronic areas that have high unemployment rates due to economic, closure or other reasons

as you know unemployment and inflation are your give and take dilemmas - and i am suggesting that inflation is not a union issue so

my criticism for public workers is that high unemployment seem to affect public workers less than private sector maybe that is a reason why governments do not relate to employment creation?

but the government do relate to inflation.....there is one study done by cousineau and lacroix on effects of inflation for wage determination

conclusion wage rates for the public sector is more responsive to inflation than the private sector ..... reason being that public wage is derived from taxes and borrowing rather than the marketplace

so depending of which side you are looking take a pick and curb inflation or unemployment

Unions do not drive inflation, BUT inflation do impact wages esp. the public sector – well the gov’t usually tries to curtail spending via its fiscal and monetary policies, while also causing high interest rates then a spiraling wage and price increase

otherwise other than unions here is another good start of pointing whatever finger directly at consumers because they really have some pessimistic expectations

[Hjalmar]

Michael Hardner

This last point would be absolutely true if cartels didn't exist.

Are labour unions not a monopoly? Is there any difference between a cartel and a monopoly?

[Michael Hardner]

Are labour unions not a monopoly? Is there any difference between a cartel and a monopoly?

Sure they are.

A cartel is more like an oligopoly, I think.

[BigGunner]

Michael Hardner

This last point would be absolutely true if cartels didn't exist.

Are labour unions not a monopoly? Is there any difference between a cartel and a monopoly?

UNIONS DO NOT HAVE A MONOPOLY OVER THE WORKFORCE!!!

Repeat that 1000 times and you might have a clue.

Yes, union influence is falling in Canada today...that might explain to a large degree why the gap between rich and poor is at its largest point ever right now..

But Oil producers who control almost 90% of the worlds supply of oil are a cartel...illegal in North America, but obviously legitimate in the global economy.

[August1991]

UNIONS DO NOT HAVE A MONOPOLY OVER THE WORKFORCE!!!

mo·nop·o·ly (n. pl. mo·nop·o·lies) Exclusive control by one group of the means of producing or selling a commodity or service: “Monopoly frequently... arises from government support or from collusive agreements among individuals” (Milton Friedman).

Law. A right granted by a government giving exclusive control over a specified commercial activity to a single party.

Dictionary - Monopoly

By law, a union is the sole supplier of labour services to an employer.

In the following note the term "collective bargaining" and note how the bureaucracts sandwich the exemption between "amateur sport" and "securities underwriting". (Oh, Canada!)

As has been said many times, the Competition Act is a law of general application which governs the conduct of business activities in Canada. A limited range of activities undertaken in relation to amateur sport, collective bargaining activity and securities underwriting are specifically exempted from the Act.

Canada's Competition Act

[BigGunner]

UNIONS DO NOT HAVE A MONOPOLY OVER THE WORKFORCE!!!

mo·nop·o·ly (n. pl. mo·nop·o·lies) Exclusive control by one group of the means of producing or selling a commodity or service: “Monopoly frequently... arises from government support or from collusive agreements among individuals” (Milton Friedman).

Law. A right granted by a government giving exclusive control over a specified commercial activity to a single party.

Dictionary - Monopoly

By law, a union is the sole supplier of labour services to an employer.

In the following note the term "collective bargaining" and note how the bureaucracts sandwich the exemption between "amateur sport" and "securities underwriting". (Oh, Canada!)

As has been said many times, the Competition Act is a law of general application which governs the conduct of business activities in Canada. A limited range of activities undertaken in relation to amateur sport, collective bargaining activity and securities underwriting are specifically exempted from the Act.

Canada's Competition Act

1. Exclusive control by one group of the means of producing or selling a commodity or service: “Monopoly frequently... arises from government support or from collusive agreements among individuals” (Milton Friedman).

2. Law. A right granted by a government giving exclusive control over a specified commercial activity to a single party.

3.

a> A company or group having exclusive control over a commercial activity.

b> A commodity or service so controlled.

4.

a> Exclusive possession or control: arrogantly claims to have a monopoly on the truth.

b> Something that is exclusively possessed or controlled: showed that scientific achievement is not a male monopoly.

---------------------------------

In future, if you plan to quote something from a dictionary, quote the whole article instead of mixing and matching the articles that you'd like to fit together.

Milton Friedman is a well known conservative economist whose followers also believed in the failed 'trickle down' theory too.

Once again...UNIONS DO NOT HAVE A MONOPOLY OVER THE WORKFORCE

[August1991]

Once again...UNIONS DO NOT HAVE A MONOPOLY OVER THE WORKFORCE

Why does Canada's competition (anti-cartel, anti-monopoly) legislation specifically exempt "collective bargaining"?

[BigGunner]

Once again...UNIONS DO NOT HAVE A MONOPOLY OVER THE WORKFORCE

Why does Canada's competition (anti-cartel, anti-monopoly) legislation exempt "collective bargaining"?

Are cartels and other corporate monopolies democratically controlled?

NO..

[August1991]

Are cartels and other corporate monopolies democratically controlled?

OPEC takes "democratic" votes. What's your point?

Do ALL Newfoundlanders (and those in Goose Bay, Labrador etc.) get to vote? Or only union members? What's Democratic? How about including "stakeholders" (ugh) in the democratic vote?

[BigGunner]

Which union has 100% of the labour supply?

NONE?

Good answer!!

Now, add all the unions together and how much of a percentage of the labour supply do they represent? 20%? Pretty close...and NOT A GODDAMN MONOPOLY

You don't understand...you blame the workers for the failures of management, and when they turn to a union for protection from the asshat managers, you cry 'monopoly! monopoly!'...'crush the unions'...'outlaw them'...

OPEC controls 90% of the world's oil supply. OPEC, is largely dominated by Arabic nations that are not democratic. They are infact controlled by some of the most conservative, anti-western islamic royal families or military dictatorships...THAT is a cartel

[August1991]

Which union has 100% of the labour supply?

NONE?

Good answer!!

None? Absolutely true.

If I'm a hospital patient in BC and I need a nurse, the answer is, well, you tell me BigGunner! A patient's only choice, BC or Nfld, is to fly to the great US of A. (More realistic? Money under the table...You don't think it happens?)

We Canadians cannot hire medical care except through a union. The union has 100% of the supply.

Walmart and Shell are vilified in documentaries, when I can go to Zeller's or Irving. But can you ask for a different nurse?

[BigGunner]

Which union has 100% of the labour supply?

NONE?

Good answer!!

None? Absolutely true.

If I'm a hospital patient in BC and I need a nurse, the answer is, well, you tell me BigGunner! A patient's only choice, BC or Nfld, is to fly to the great US of A. (More realistic? Money under the table...You don't think it happens?)

We Canadians cannot hire medical care except through a union. The union has 100% of the supply.

Walmart and Shell are vilified in documentaries, when I can go to Zeller's or Irving. But can you ask for a different nurse?

Funny you mention that...because in American hospitals, a nurse is often paid more than a Canadian one...and more often than not, they are non-union.

[Lost in Manitoba]

I'm not pro-union in the least. With labor laws as they are, or as they seem to be progressing, the concept of a union is outdated.

Did you all see the clip about the 'soup king" in the BC hospital? That guy makes $22 per hour. $22 of tax payers money per hour! He was supporting his position by saying how patients just loved his home-made soup, well no doubt, that's gormet soup at gourmet prices. Now the poor "soup king" may be losing his job, or at least a cut in pay down to $12/hr, which is more reasonable in my opinion. Alas, though. If this happens, he cannot afford to stay, and the poor patients will have to go back to having canned soup. I say g'bye. Try finding a cook job that pays your old wage.

[BigGunner]

I'm not pro-union in the least. With labor laws as they are, or as they seem to be progressing, the concept of a union is outdated.

Did you all see the clip about the 'soup king" in the BC hospital? That guy makes $22 per hour. $22 of tax payers money per hour! He was supporting his position by saying how patients just loved his home-made soup, well no doubt, that's gormet soup at gourmet prices. Now the poor "soup king" may be losing his job, or at least a cut in pay down to $12/hr, which is more reasonable in my opinion. Alas, though. If this happens, he cannot afford to stay, and the poor patients will have to go back to having canned soup. I say g'bye. Try finding a cook job that pays your old wage.

I bet that same news clip didn't talk about the other duties that the soup king had...or the specific qualifications that a cook might have to have in order to prepare foods for hundreds of patients with unique dietary concerns which are a matter of life or death if the wrong food is ingested.

No, our media is focused on the hype of paying the cook a $22/h wage...put in those terms, i can see that it is upsetting. But cooking in a hospital is more that flipping a friggen burger or making a bucket of soup..

Professional cooking started as a career just after the French revolution. Cooks were actually slaves to kings, queens, and other powerful people. When the revolution ousted the monarchy, the cooks were freed, but unemployed. So they started working for themselves, creating 'restaurants' and such. But now I see there is a move afoot to return these workers to the servant status that they escaped from over 200 years ago.

[Black Dog]

Opponents of unions and of wage increases tend to point out extreme examples (see above), while ignoring the very real FACT that there has been an overall decline in personal income over the past few decades. For instance, between 1990 and 1997, average after-inflation personal incomes declined by 7% (before-taxes).

This is, of course the direct result of a tight labour market, itself encouraged by the anti-inflation polices favoured by banks and capital owners. These policies maintain a high level of unemployment, causing more people to compete for fewer jobs, which in turn ensures wages remain low and profits remain high. In the meantime there has been an increase in outsourcing, downsizing and "labour flexibility"- that is, part-time, temporary and contract employment- which further weakens the power of organized labour. Free trade laws also undermine wages by allowing capital, goods and jobs to move freely across borders (unless, of course wage demands-such as wage freezes or even rol backs- are met).

These policies affect us all a lot more than the modest gains of unions. It's not "greedy unions" that are responsible for the decline of Canadians' standard of living, but corporations and shareholders and their accomplises in government, all of whom are eager for a bigger piece of the economic pie.

By union bashing, we shoot ourselves in the foot. Labour squabbles amongst themselves for scraps while shareholders and corporations laugh all the way to the bank.

[August1991]

For instance, between 1990 and 1997, average after-inflation personal incomes declined by 7% (before-taxes).

Where did you get that stat?

[Black Dog]

StatsCan via the Canadian Centre for Policy Alternatives.

[RB]

For instance, between 1990 and 1997, average after-inflation personal incomes declined by 7% (before-taxes).

the statement is not a true reflection of decline for the entire market

well there was a nearly double recession happening during the 1990's

there was increases of income during this period depending how you look at the gap between the rich and poor ... widen greatly.

the rich well they got richer and the poor as they hit rock bottom as wage earner got poorer and that's not all the poorer folks came out in record numbers to work such as: retired people, youths, women entering the workforce, just anyone who able to work causing some reversal impact on wages - what i am suggesting is that the deline you claim is explainable - these folks are

-more low income earners

-making more hours

and has wiped out the meagre wage gains from the market

see link below

Hourly earning flat from 1992 - avg. family earning take a spiraling hit 89-93

[August1991]

StatCan reports for a family of 2 or more, average after tax income (including government transfers), in constant dollars:

2001 .. 58,016$

1999 .. 54,512$

1997 .. 51,490$

1990 .. 51,540$

1987 .. 50,607$

1982 .. 50,180$

Statcan on Family Income

Selecting 1990 and 1997 for comparison is misleading.

I will note just two points about this survey. First, it is based on telephone surveys in which 80% of people allow StatsCan to access T4 slips for income information. Second, the income figures above don't account for the number of people in the family.

Real GDP per capita is usually the best measure.

------------------

The following is a longish but fascinating quote from a fascinating article on the web (link below) about New Zealand's experiance with government. The topic is germane to the direction this thread has taken:

The Department of Transportation came to us one day and said they needed to increase the fees for driver’s licenses. When we asked why, they said that the cost of relicensing wasn’t being fully recovered at the current fee levels. Then we asked why we should be doing this sort of thing at all. The transportation people clearly thought that was a very stupid question: Everybody needs a driver’s license, they said. I then pointed out that I received mine when I was fifteen and asked them: “What is it about relicensing that in any way tests driver competency?” We gave them ten days to think this over. At one point they suggested to us that the police need driver’s licenses for identification purposes. We responded that this was the purpose of an identity card, not a driver’s license. Finally they admitted that they could think of no good reason for what they were doing – so we abolished the whole process! Now a driver’s license is good until a person is 74 years old, after which he must get an annual medical test to ensure he is still competent to drive. So not only did we not need new fees, we abolished a whole department. That’s what I mean by thinking differently.

New Zealand experience with Government

[Lost in Manitoba]

our media is focused on the hype of paying the cook a $22/h wage

The news report about the 'soup king' actually sympathized with him. It was me who didn't. The gov't shouldn't be the best paying employer out there, they should be fair and competitive with their wages and their benifits (which I assume the guy will get, whereas most cooks probably don't).

[RB]

QUOTE 

Once again...UNIONS DO NOT HAVE A MONOPOLY OVER THE WORKFORCE 

Why does Canada's competition (anti-cartel, anti-monopoly) legislation specifically exempt "collective bargaining"?

procedural rights are leading the edge with management and union relations.....meaning unions negotiations by far outweighs conditions of employment in the workplace compared to employment standards legislation who lags behind but what takes precedence and up-held in courts and these negotiations is rather interesting

the unions usually finds themselves in a precocious position using the charter to end their means

well those who have examined the charter will tell you that individual rights is constitutionally entrenched in charter's very existence

unions are a viewed as a collective body and union rights takes a position as second class nature insofar as they are legal rights without constitutional bases ... defending solidaristic principles of unions would be even more daunting

well that's a stab to figure the exempt - maybe there is a correct answer

oh, not being a smilie fanatic, i wish i had some micro help for those smilies - i can never determine who this is?

never the less i am always safe with

[August1991]

procedural rights (blah, blah) ...management and union relations...(blah, blah) ... conditions of employment (blah,blah)...  up-held in courts (blah, blah)...

Canada's Competition Act is designed to forbid monopolies, cartels, agreements to fix prices that would result in buyers having no choice but to pay non-market negotiated prices. ("Buy from us, or not at all.")

This legislation does NOT apply to unions (collective bargaining). Why? Because that is precisely what unions do - fix prices through a cartel.

Is this good or bad? Are cartels good or bad? Is it better to negotiate prices outside of a free market? I dunno. But let's be honest and tell the truth at least.