Workers Gained An Edge, Won't Lose It

… from Barron’s no less. And very bad news for poverty wage “job creators”.

How Workers Gained an Edge—and Why They Won’t Lose It Soon
https://www.barrons.com/articles/workers-jobs-economy-labor-…

Dementeva is among millions of workers who have seized control of their professional lives in the postpandemic economy and leveraged historically tight labor markets into raises, promotions, and a litany of intangible benefits: more-flexible scheduling, more remote work, cheaper healthcare, subsidized child care. With unemployment close to a 50-year low and nearly two job openings currently available for every one unemployed worker—the largest disparity in the U.S. economy on record by far—American workers are enjoying more power than they’ve had in decades. And the results are piling up.

The new dynamic is both a direct result of the way the pandemic upended the labor market and the inevitable climax to some 40 years of workplace changes, stagnant wages, and worsening income inequality that were going to reach a breaking point eventually, economists and labor experts say.

The quickest path to financial independence is the ability to “fire your boss” by working elsewhere, or better yet, accumulating enough capital so that you don’t have to work at all.

intercst

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In potentially related news, the workers in a Starbuck’s in Grand Rapids, MI, voted 15-3 to unionize.

Grand Rapids Starbucks workers first to unionize in Michigan
Published: May. 13, 2022, 4:36 p.m.

The Grand Rapids Starbucks joins more than 60 stores in 19 states that have unionized in a recent push for workers’ rights at the coffee giant. More than 200 Starbucks locations have filed petitions with the labor board after a Buffalo, New York store became the first to unionize in late 2021.

https://www.mlive.com/public-interest/2022/05/grand-rapids-s…

Without the protection of a union contract, the moment Powell’s campaign to strangle the economy gets traction and unemployment rises, recent wage gains will be taken away in a hot second.

Steve

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The quickest path to financial independence is the ability to “fire your boss” by working elsewhere, or better yet, accumulating enough capital so that you don’t have to work at all.

OR starting your own business.

I went from dissatisfied employee to selling stuff at flea markets on weekends to quitting my “day job” and selling stuff on a street corner weekdays and at the flea market weekends to opening my own brick and mortar store to two stores to opening one big store to selling my store and retiring.

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OR starting your own business.

True financial happiness happens after you manage to fire

• Your boss
• Your employees
• Your business partners
• Your customers

Let Mr. Market do your work for you.

The Captain

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Without the protection of a union contract, the moment Powell’s campaign to strangle the economy gets traction and unemployment rises, recent wage gains will be taken away in a hot second.

And with protection of a union, if enough people in Grand Rapids become unemployed, and decide they won’t spring for Starbucks anymore, especially Starbucks that is somewhat higher priced due to the higher wages/benefits negotiated by the union, then that Starbucks location will be less profitable, or even unprofitable. And when the company decides which of their stores to close that year, it may make the list. So, in this case, not just the wage gains are taken away, but the entire wage disappears!

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And with protection of a union, if enough people in Grand Rapids become unemployed, and decide they won’t spring for Starbucks anymore, especially Starbucks that is somewhat higher priced due to the higher wages/benefits negotiated by the union, then that Starbucks location will be less profitable, or even unprofitable. And when the company decides which of their stores to close that year, it may make the list. So, in this case, not just the wage gains are taken away, but the entire wage disappears!

Exactly what happened with the UAW and Chrysler, Ford, and GM. Of course it took 60 years and a foreign competitor initially funded by the US and later by Japanese protectionist policies of their own, but what the heck.

And at the beginning it wasn’t “wages” they were after it was working conditions. Things like monitoring the assembly line speed up, the 10-12 hour day, the lack of compensation for overtime, time off for holidays, etc. Of course those are things everybody takes for granted now, and the Starbucks employees surely have other goals in mind:

Among those mentioned by the organizers are more control over safety protocols (Covid), pay, more surety in working hours, better scheduling so part timers can plan for a second job, pay, and pay. 70% of Starbucks workers are women, but you will be shocked to find out that in the management ranks that number is nowhere near. Could be an issue, especially among those who fill out union cards.

Just sayin’ Unions aren’t always bad. Sometimes they are, and sometimes they grow that way, but they rarely spring to life for no reason. I would say Starbucks’ management deserves a fair share of the credit for the creation of one.

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And with protection of a union, if enough people in Grand Rapids become unemployed, and decide they won’t spring for Starbucks anymore, especially Starbucks that is somewhat higher priced due to the higher wages/benefits negotiated by the union, then that Starbucks location will be less profitable, or even unprofitable. And when the company decides which of their stores to close that year, it may make the list. So, in this case, not just the wage gains are taken away, but the entire wage disappears!

Exactly what happened with the UAW and Chrysler, Ford, and GM. Of course it took 60 years and a foreign competitor initially funded by the US and later by Japanese protectionist policies of their own, but what the heck.


In this part of the cycle killing wage gains or jobs growth etc wont stop inflation. The wealthy are causing the inflation. The workers are a minor part of it.

Currently there are interest rate normalization, labor rate normalization, and market values normalization. Plus the RMB peg to the USD is coming home to roost. We will overshoot to the downside on all of it.

Only higher taxes on the top few percent or so of earners will save your savings and purchasing power from eroding to their purchasing habits. Stop your portfolios from partially evaporating every time the FED needs to hike rates to stop inflation caused by the top earners.

Higher labor rates will make your investments soar. You need the American middle class back as consumers and savers.
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