The Rand Formula

[Hjalmar]

eureka

But, you do have a point.

I sure do -- and you have it bas-ackwards. The ant is the forward thinker who plans for the future and exercises personal responsibility. The grasshopper is the opposite -- a typical "left winger", irresponsible, lazy and relies on others to feed, shelter and take care of him.

[Hjalmar]

Union membership in the USA by state

Alabama -- 9.5%

Alaska -- 22%

Arizona -- 5.9%

Arkansas -- 6.3%

California -- 16.4%

Colorado -- 8.7%

Connecticut -- 15.8%

Delaware -- 12.2%

D.C. -- 16.8%

Florida -- 6.5%

Georgia -- 7.2%

Hawaii -- 23.9%

Idaho -- 7.6%

Illinois -- 18.3%

Indiana -- 14.3%

Iowa -- 12.8%

Kansas -- 9.3%

Kentucky -- 11.4%

Louisiana -- 7.7%

Maine -- 12.9%

Maryland -- 14.1%

Massachusetts -- 14.8%

Michigan -- 21.8%

Minnesota -- 17.6%

Mississippi -- 5.6%

Missouri -- 14.2%

Montana -- 13.2%

Nebraska -- 7.6%

Nevada -- 17%

New Hampshire -- 10.1%

New Jersey -- 19.6%

New Mexico -- 8%

New York -- 26.7%

North Carolina -- 3.7%

North Dakota -- 7.5%

Ohio -- 17.7%

Oklahoma -- 8.5%

Oregon -- 15.8%

Pennsylvania -- 17%

Rhode Island -- 17.9%

South Carolina -- 4.5%

South Dakota -- 5.9%

Tennessee -- 7.6%

Texas -- 5.6%

Utah -- 6.8%

Vermont -- 10.8%

Virginia -- 5%

Washington -- 18.6%

West Virginia -- 14.6%

Wisconsin -- 16.2%

Wyoming -- 9%

Average -- 13.5%

[Hjalmar]

One of the states that has "right to work" laws is the state of Georgia... The signs of prosperity are everywhere... The

visionaries that were involved in this planning that took place years ago included former president Jimmy Carter who was then state governor, and Andrew Young, former congressman and mayor of Atlanta... The highest marginal state tax for personal income is 6 percent and the highest federal tax is 35 percent for a total of 41 percent... Bringing business to Georgia is taken seriously and it is working... The Metro Atlanta Chamber of Commerce lists more than 1,000 corporate headquarters in the metropolitan area, an increase of 75 percent since 1991... The state economy is growing at 7 percent, more than twice the US average rate... The unemployment rate is 3 percent which is effectively full employment... The rate of unionization is near the average for "right to work" law states, mostly in the public sectors and within the large manufacturing companies... The biggest employment problem is finding enough qualified people to fill available jobs and employers are actually bidding up wages to attract employees.

[Hjalmar]

The following are the states in the USA that have a "right to work" law -- Alabama, Arizona, Arkansas, Florida, Georgia, Idaho, Iowa, Kansas, Louisiana, Mississippi, Nebraska, Nevada, North Carolina, North Dakota, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia and Wyoming.

Note how many of these States are right at, or near, Canada's border.

In 1994, the argument for voluntary unionism was summed up rather nicely.... All 50 states were evaluated on the following criteria:

--Employment growth rates

--Income growth rates

--New business growth rates

--Building permit growth rates

--Home price growth rates

--Retail sales growth rates

Idaho, the newest voluntary unionism state ranked first... Seven of the top ten states were voluntary unionism states.... The bottom 13 were all forced unionism states

[Hjalmar]

The successes in jurisdictions that presently have "right to work" laws speak for themselves.... In Canada, Saskatchewan and Alberta had the lowest rates of unemployment in March 1997, at 6.2 and 6.9 percent respectively.... Compare that with neighboring states in the USA such as North and South Dakota, and Utah, where unemployment stood at 2.8 percent... RTW jurisdictions offer firms a business environment free of many union imposed regulations that raise costs and become impediments to employment..

[Guest eureka]

You should get our head out of your figured and do a little thinking about what you post. Their are a thousand variables that enter into all those categories. One, I pointed out to you, is the Rust Belt vs the Sun Belt and that is only one. Another is the availability of cheap labour - non-unionized labour and recently emancipated African labour.

Another is the factor that overtakes all industrialized societies where the owner class does not invest in upgrading aging facilities: as is always the case when cheaper facilities (often state subsidized) become available elsewhere. That is a large factor in the US: it is very significant in the state you love - Georgia. It will also catch up when the disconomies of subsidization come calling.

All your rankings count for nothing unless you can analyse and quantify all the variables

[Hjalmar]

The Future for Labour Unions

Here is my prediction:

Over the past 30 years or so, almost every new labour contract contained a wage and/or benefit pkg increase... You will not see that much longer... At long last, you are going to start to see some form of concessions, such as a 5% per year pay reduction.. Not only that, but employers will start removing some of the rigid work rules that have been imposed on them in the past.. Furthermore, employers are going to insist on the flexibility they need in order to survive so they will no longer be prepared to lock into long term contracts that tie them down. . Labour contracts will become shorter, perhaps 6 months or 1 year at the most.. Contracts will eventually become a thing of the past as employers find themselves unable to make any commitments at all.. Union workers will be working without a contract just like non-union workers.... It's called "progress".

Survival means we must compete.

[Hjalmar]

Too much redistribution undermines stability

The biggest cause of the current increase in inequality in North America, and in some other advanced countries as well, is the slow speed at which poorly educated segments of society have adjusted to the dramatic fall-off in jobs that require a strong back rather than a brain.... In the 1950s, in both America and Western Europe, 70 percent of people were employed in jobs where they used their hands.... Just 30 percent were "use-of-brain" workers.... Now the ratio has almost reversed.... In 1973 college graduates made only 15 percent more than mere high school graduates.... By 1982 the differential was 49 percent.... Narrowing the income gap requires narrowing the gap in education and skills between the poor and rich.

Unhappily, however, this has been very slow to happen... Part of the reason is that there is too much income redistribution.... Too many programs and unachievable political promises have not only slowed the speed of adjustment to the new realities, they have subsidized the growth of a counterproductive slum culture..

Another part of the gap in income is due to overindulgence in current consumption, another facet of life in the 1980s that could not be redressed by more income redistribution.... Part of the reason many people save so little is the assurance that they will be protected from many of the high-cost contingencies, like retirement security and medical care in old age, that induce savings in the first place.... Too much income redistribution and too much income equality can actually undermine stability.

The poor and even much of the middle class, unlike the thrifty pioneers who laid the foundation of North American prosperity, spend every penny that comes into their hands.... This is not a life-style that will stand the test of time.

In most cases, even today's poor enjoy a standard of real

consumption many times higher than that of the rich of a few centuries ago.... And the poorer they are, the worse they tend to do.... The poorest people in Western societies indulge in crime, drug abuse, and alcoholism more than productive citizens.

The most urgent need in the 2000s is to increase the payoff from accomplishment and law-abiding behaviour.... The countries that will best adapt to this new Revolution of the 2000s are those with the highest incomes and most productive citizens ... like Switzerland and Japan.... Rather than penalizing the successful, and making it more difficult to become and remain affluent, a rational policy for North America would aim for the opposite result..... It would reduce taxes.... And reduce the unsustainable burdens of transfer payments, income redistribution, and guarantees against failure that are the essence of the welfare state..... When you subsidize poverty and failure, you get more of both.

[Guest eureka]

Oh the perils of prediction!

I don't know who wrote the next post, but s/he seems to have equality in education and the relation to income levels somewhat confused.

Those sort of declaratory assertions do not stand up very well to rational analysis. For instance, thrift in the past was a drag on growth in a consumption oriented society. It lessened investment and offended the God of growth.

Tax reductions have a similar effect since not all goes back into the economy. It seems to be little understood by the neo-libs, or rather it is understood but is not part of their ideologival propaganda in a misperceived interest, that even taxes end up as part of investment. It all goes back to people one way or another and ends up moving through the economy.

That money going to the rich does not all and is less productive.

[Hjalmar]

The organized labour movement represents a monopoly in this country in many labour markets.... Like any monopoly, there is no incentive for the union leadership to encourage better training, greater productivity, or any other quality that would translate to greater productivity by union members in their jobs. And, like any monopoly, the unions hold a gun to the head of employers in making wage & benefit demands.

As a result employers are finding ways to exclude union labour from the work the companies have... For example, contracting out some tasks and closing down and moving the plant to a labour market where the product can be produced and sold at a profit are two of the ways that companies are learning to work around union labour monopolies.

In those areas of Canada where unions are strong, there is a pattern in the last 20 years of companies choosing other places to build a new plant or to relocate because union labour has come to mean low productivity and low quality work... Instead of supporting training programs to upgrade their members' skills, the union leaders focus on asking higher and higher salary and benefit packages for union members...with no additional productivity required from the union labour.

Such monopolistic behaviour by the union leaders and their membership reflects the sorry state of labour unions

today.....rapidly declining membership that no longer reflects the views of Canadian labour.

Most Canadians who work know that the union labourer is the guy who produces the least and is proud of it... The unions have put themselves out of business....

In short, Canadian workers have enjoyed unions all they can stand.

[Hjalmar]

Here are some of the past predictions of Lord William Rees Mogg and James Dale Davidson.

For example in 1987, in Blood in the Streets they predicted:

[1] The fall of Communism

[2] The bankruptcy of the S&L on a massive scale

[3] The real estate crash

[4] The sweeping military disarmament, foretold at the height of the Reagan arms buildup

[5] The falling standard of living of blue-collar workers and middle managers

[6] The devolution and downsizing of corporations in the 1990's

In early 1991 in The Great Reckoning they predicted:

[1] The supplanting of Marxism by Islam as the main ideology of confrontation

[2] The racking secession and civil war in Yugoslavia

[3] That the breakdown of the Soviet Union central command structure would expose the world to unprecedented dangers of weapons proliferation and nuclear accidents

[4] What life would be like after the Cold War

[5] The real estate bust in Tokyo

[6] Widespread layoffs in Fortune 500 companies

[7] The dangers of rioting in big cities due to growing racial antagonisms

In 1997 in The Sovereign Individual they predicted

[1] The collapse of the welfare state

[2] The overhaul of the US tax system, which will in the future be based on consumption rather than on earnings

[3] That the map of the world, including the United States and Canada will look dramatically different

[4] That governments will lose their capacity to arbitrarily regulate economies

[5] That banks will suffer through an ever larger crisis than that of the 1980's

[6] That the US government will diminish to the size it was in the nineteenth century

[7] That the US government - primarily the IRS, CIA and NSA, will declare war on groups that try to circumvent the income tax through cyberspace

[8] That organized crime will grow in scope as central economies break down

[9] That central banks will lose the power to inflate and control the money supply as paper money is supplanted by cybercash

[10] That individuals will gain more autonomy and financial capability than ever before as markets deepen around the world

[11] That morality will make a comeback

[Cartman]

Hjalmar,

What do you think will happen politically the next time we have a major recession? I think the Libs. are in power because Canadians are generally happy with the economy and the job they have done, but wanted to make them feel some heat from the $$ trough they had created. Regardless of which party gets in, I suspect that the pendulum will swing back to the left when the economy contracts.

I am assuming that you accept the likelihood that the economy will seriously contract in the future.

[Hjalmar]

I am assuming that you accept the likelihood that the economy will seriously contract in the future.

Not too likely-- provided we can tame down labour unions.

Failing that, you have what's called "nail on the head".

[Hjalmar]

A must read

The following is a post in a thread I had in another Canada-wide forum that came from a young 23 year old gentleman.. One story alone does not convince me, but when I have witnessed the same things here first hand so many times and friends have related comparable stories to me, it really becomes irrefutable.. This story should amplify the damaging effects of labour unions.

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

Perhaps my recent experience in Detroit, MI will illustrate the adverse effect the powerful union community in “Motown” has had on service levels... Our company designs and manufactures industrial equipment; and a large part of our sales and marketing efforts involve exhibiting at major worldwide equipment trade shows... The difference in the service levels and professionalism of local tradeshow labor in unionized areas vs. “right –to – work” states is remarkable... The service we receive from unionized work forces is appalling. ..Detroit happens to be the worst and therefore is the city I should use as an example.

When we describe the events that occur during tradeshow setup in Detroit, people think we are joking... Our tradeshow booth is comprised of 2 components, our equipment, and a large display board featuring pictures of our product... First lets start with the display board; the display, which normally takes me a ½ hour to setup on my own costs me 8 man hours of union labor billed at over $80.00 per hour... First I need 2 carpenters to erect the structure (should take 3 minutes, takes them 1 hour), and then I need 2 theatre & stage workers to erect the panels (should take 2 minutes, takes them 1 hour) then I need 2 A/V workers to ensure that my two little spotlights are pointed in the right direction… but wait, they can’t actually plug in the spotlights, they will get fined, I need to hire two electricians to plug my spotlights into a power bar (I pay two guys $80 bucks each to plug a light bulb into a socket!)... In the meantime there are several thugs (they call them shop stewards) hanging around my booth watching every move ensuring that we don’t perform any “union” labor.... Last year an employee almost got kicked of the show floor for plugging his mouse into his computer! .. That’s just the display board! You should see what we have to go through just to get our equipment hooked up!

We have complained to show management about the union, and they have informed us that it is the number one complaint of exhibitors, and it has gotten to the point where they are thinking of moving the entire show to another state, one that has enacted “Right to Work” legislation.

That is unbelievable; the City of Detroit is about to lose a major tradeshow and all the associated economic benefit BECAUSE of the union!

This is just one example of many!

Upon my return to Canada, feeling very frustrated with union labor, I found that while I was away the unionized workers of the international airport at which I had landed had gone on strike.... In this case they were on strike because the guy who gets paid $26.00 an hour to keep birds off the runway wanted a “Job for Life” clause in his contract…. I say, GET A LIFE

[Guest eureka]

Did you read through your listing? What is true was hardly worthy of the name of prediction? Lokk at the dates: it was happening or had happened and could have been said by any but Rip Van Winkle.

Parts are simply laughable if presented as proof of the perspicacity of those two.

For example, the Real Estate Crash. In 1987, every smart investor knew it was coming. The affordability ratio had been had passed its upper limit. I can say now that their will be a real estate near crash in certain areas within the next eighteen months. It will be that in the US but probably a stabilisation or smaller adjustment in Canada. That is because the ratios are again approaching the upper limits in many parts of Canada and have now passed them in the USA. It will not take much of an interest hike to go over the top.

The selections from the "Sovereign Individual" that are not simply ideological are closer to prediction and, like any other guesses, it remains to be seen some distance in the future whether they will pan out. Some are most unlikely to since they go against human nature. Do you seriously think that the Welfar State could collapse? Do you think that the majority in any society who, for the only period in recorded history have experienced civilation will let it go?

[Hjalmar]

Do you seriously think that the Welfar State could collapse? Do you think that the majority in any society who, for the only period in recorded history have experienced civilation will let it go?

Not a question in my mind -- The welfare state, as we have come to know it, is all but dead. Check back with me in 10 years and I'll be able to tell you "I told you so".

Governments today are faced with competition for the first time in history. Society today is very mobile. Countries with taxes that are too high will lose their most desired citizens to more tax-friendly jurisdictions, leaving no one to fund the welfare state other than the welfare recipients themselves. Most countries today recognize this and are striving for competitive tax rates.

Many of the predictions I quoted have, or are coming true.

The fall of communism.

The devolution and downsizing of corporations.

The supplanting of Marxism by Islam as the main ideology of confrontation.

[Guest eureka]

If your vision of the future is likely, then I reject such a poor travesty of humanity. Fortunately, it is not: it is simply lunatic raving.

Government can never be faced with competition or it is not government. Government that has a rival will become a totalitarian government. There may be corporate pirates of the same inclinations as you but they will be controlled. It is clearly in the interest of all nations to cooperate on that since your ideas would lead only to a world anarchy.

Stalinism has fallen and so has every other brand of totalitarianism and it is not the same as a collapse of Communism. (I would predict a revival of communism at some future date in some form that has learned from the overexuberance of its first practitioners). That was inevitable and is an immutable reality of history. Dictatorships and oppressive regimes will always collapse. There were writers early in the twentieth century who constructed utopias - or similar dysfunctional socieities, on just this. They wrote of class struggles and reactions that lasted for generations. One wrote of a society where oppression lasted for seven generations but, as an inevitable triumph of the human spirit, ended. I don't recall the works but would commend them to you if I did. Their predictions were as fanciful as your pet economists but more prescient.

Islam is not an ideology of confrontation. It is not an ideology at all but a religion. It has no thought of confrontation more than does our religion which, in the past, has been far more confrontational. Islam opposes now a Western "ideology" that has for more than a century sought to impose its economic interest on the Islamic world. Ours has destroyed the structure of the Islamic regions and shaped them into artificial nations that seemed to fit our interest. Islam is reacting not attacking. Islam in the broadest sense, is cooperating not confronting. Do you really confuse Bin Laden with world Islam or an insurrection in Iraq against foreign occupation with the confrontation between civilizations?

What has the downsizing of corporations to do with anything other than the neo-lib counter revolution that is already passing? Thatcher and Reagan are long gone as is Harris, and Harper is no more than an ephemeral blip. Bush is Bush and is God's joke on America that has become stale in the repetition and will disappear soon.

What is the highly taxed society you speak of? What are the "tax-friendly" ones that business will flee to? I think that you should gather some information on tax regimes before you regurgitate the neo-lib propaganda. You could be surprised and find yourself grateful for the opportunites and security you have at a bargain basement cost in taxes.

As I said in an earlier post, you need to broaden your reading and reference base. You are in danger of becoming an obsessive.

[August1991]

Government can never be faced with competition or it is not government. Government that has a rival will become a totalitarian government.

Huh?

I think hjalmar's point is that individuals can increasingly choose to live in the jurisdiction where taxes are lower. IOW, people vote with their feet and governments now compete for taxpayers.

On the other hand, hjalmar is not describing anything new. People voted more with their feet 100 years ago than they do now. (The greatest influx of immigrants to Canada and the US occurred around 1900.)

High tax and low tax jurisdictions exist (and compete) in the US (Massachusetts vs Arizona) and in Canada (Quebec vs Alberta). I imagine property tax rates vary between Vancouver and Chilliwack as they do between Montreal and Laval.

Living in a particular place has always been a package deal.

-----

eureka, when you use the term "neo-lib", what do you mean exactly?

[Guest eureka]

I use the term as a more correct description than neo-con. It means, simply, "new liberals" since what is attempted by that so-called "Right" is a revival of liberal economic doctrines of the 19th. century.

[Hjalmar]

Are corporations manufacturing in low wage jurisdictions the largest cheerleaders for union labour here in Canada?

Let's check that out. When the same product is being manufactured by union labour here in Canada the standard markup is used and this becomes the market price.. So, in effect, labour unions in Canada enhance the profits of these large corporations that have their products manufactured in low-wage countries... Here's the scenario: .. If all these corporations that are manufacturing these products here in Canada with union labour were to shut down, or move out to low wage jurisdictions, the high benchmark price would be lost and the law of supply and demand would take over and all manufacturers utilizing lower cost labour would have no choice but to compete with one another which could conceivable reduce all prices. The disappearance of union labour here in Canada would likely become a huge boon to all consumers here in this country.

So my question is: Do you think these large corporations, that you condemn, really want to see the death of labour unions in Canada when they are manufacturing the same products in lower wage jurisdictions?

[Guest eureka]

Have you reallu thought through what you are arguing? Does it not occur to you that the problem od differing wage jurisdictions is not a union issue at all?

Jobs and manufacturing are being shipped offshore whether they are unionised plants or not. During the Bush presidency, 2.5 million or more jobs have gone from the country not from one state to another. They were disappearing before that, too, so that the total may now be several millions. Canada is not hit so badly because of our resource based industries - though it is bad.

This is not a union problem but it is a problem that will eventually lead to serious social unrest. What you should be concerning yourself with is the solution to that and not praising a supposed triumph of Social Darwinism.

This was also a problem a century ago when Globalization was at its peak; a higher peak than now. Action was taken then in the form of protectionism while we continued to exploit offshore resources. Must we do the same now to prevent a revolt against the worst excesses of Capitalism?

Now, it is executive and information jobs that are going: the kind of people who were praising the "new" era of "Free" enterprise are now finding themselves on the streets. Do you really relish the prospect of being one of those?

[August1991]

Jobs and manufacturing are being shipped offshore whether they are unionised plants or not. During the Bush presidency, 2.5 million or more jobs have gone from the country not from one state to another.

Jobs are lost with new technology too. Does this mean we should stop new inventions?

Forget about low wage foreigners taking our jobs. We should be worried about computers taking our jobs. Soon, computers will do everything and we'll have nothing to do ourselves.

[maplesyrup]

Huge public sector strike looming

Civil servants, like the rest of us, deserve decent wages and benefits.

Let's see who wants some fairness and who wants to crush the weaker elements in Canadian society, eh!

[Cartman]

Soon, computers will do everything and we'll have nothing to do ourselves.

I suppose it depends on what you mean by "soon". When I look around here, I find it difficult to contemplate how computers can do much of the work. For example, pouring a foundation, framing a house, the plumbing, electrical etc etc. In mining, I wonder how they would integrate computers to chase after coal seams and haul the material to be cleaned considering that the configuration of the mine is changing constantly. Many of these jobs are so boring, that I welcome the use of computers, but nobody has found a way to do so despite considerable effort.

Maybe manufacturing jobs in the east are at risk, but I am not yet convinced that primary resource jobs can be computerized in the near future.

If this ever becomes the case, however, I would like to know how right-wingers expect people to live without the welfare state.

[Cartman]

Civil servants, like the rest of us, deserve decent wages and benefits.

BTW...has anyone ever tried to phone federal or provincial government departments for info. or to try and resolve a problem? When I have made the occasional call, I questioned whether anyone worked there. Feds. aren't that bad, but provincially....wow!

I hope these folks get what they deserve.