Archive for the 'Labor' Category

Monopsony: the basics, plus policy implications

Courtesy The G Spot- Politics, Economics, Feminism:

Be honest — are you skipping all these monopsony posts? Are your eyes glazing over at the mere sight of this odd and hard-to-pronounce word? Well, I hope not.

But in case you are — and in case the reason for this is that you don’t have a clear understanding of what it is in the first place, and why it might be important — I’ll try to remedy that by providing a (hopefully) coherent and straightforward explanation of the concept. Then maybe if you have a better grasp of what monopsony is, you can go back and read the other posts, and they might be a little more interesting to you. I’ll also go on to highlight some of the policy implications of monopsony, and why I think it’s important not only in an abstract theoretical sense, but in a concrete political sense as well.

The literal meaning of monopsony is “one buyer” (just as the literal meaning of monopoly is “one seller”). In the context of labor markets, monopsony means one buyer of labor, that is, one employer. But that’s confusing, because these days when economists use the term in the context of labor markets they usually don’t mean one employer.

Here’s what they do mean: in the standard labor market model, known as the perfect competition model, the market as a whole — that is, the supply of labor (all workers seeking a job) and the demand for labor (all jobs being offered by all firms) — determines the wage. The market-clearing wage occurs at that point where labor supply equals labor demand.

Moreover, in the perfect competition model, no single firm has the power to determine the wage; it simply accepts the wage that the market as a whole has determined, and that is what it offers to its workers. In this model, workers are extremely wage-sensitive, so much so that if any single firm cuts wages by even one cent, all the workers at that firm will immediately quit and find employment elsewhere.

In the monopsony model, however, the theory is that the employer has what is known as “market power,” and therefore is not a “wage-taker” (i.e., doesn’t have to offer the market wage). In this model, it is assumed that it’s the employer, not the market, which sets the wage. Therefore, in the monopsony case, the employer will offer below-market wages. And moreover, it’s assumed that the source of the firm’s market power are forces that bind an employee to an employer, so that if wages were cut, at least some of the employees would stay. 

 

Article Continues @ Sourced Site

Updated: Oil strikes new record near $120

From The International Herald Tribune:

 PERTH: Oil struck a record high at $119.93 a barrel on Monday, extending the previous session’s rally, as a strike closed a major oil pipeline and as new violence in Nigeria reignited supply fears.

 

Simmering tensions between the United States and Iran also helped boost oil prices.

 

U.S. light crude for June delivery rose 88 cents to $119.40 by 2324 GMT, after striking a lifetime high of $119.93 a barrel shortly after electronic trading resumed after the weekend.

 

London Brent crude rose 66 cents to $117.

 

“Supply side concerns underpinned the oil price,” David Moore, a commodity strategist at the Commonwealth Bank of Australia, said in a note to clients.

 

“Oil supplies from Nigeria have been disrupted by militant attacks and a strike by some oil workers. A strike at the Grangemouth refinery in Scotland has caused significant disruption to supplies from the North Sea,” he said.

 

The 700,000 barrels per day (bpd) Fortis pipeline, which carries nearly half of Britain’s oil, was closed on Sunday as a strike over pensions began at the neighbouring 210,000 bpd Grangemouth refinery in Scotland, operator BP said.

 

The refinery, owned by international chemical company Ineos, produces a tenth of Britain’s petrol and diesel but also supplies vital steam and power to BP’s Kinneil plant that processes the crude oil coming ashore from 70 North Sea fields.

 

The government has said that there will be no overall shortages of fuel but conceded that there may be some local supply problems, particularly in Scotland and northern England. 

 

Article Continues @ Sourced Site

Tech Company Illegally Fires Cal Poly Student Workers for Unionizing

From LA IndyMedia by Cal Poly Community Activist Wednesday, Apr. 16, 2008 at 1:10 AM marginalized.student.workers@gmail.com

Pomona, Calif - After being subjected an unannounced pay cut from $10/hr to $8/hr, Cal Poly student marketing representatives Austin Garrido and Sarah Doolittle were fired by their employer, Uloop.com, for attempting to organize a worker’s union. The students were fired from their part-time jobs 20 minutes after posting a message in an online inter-company form announcing their intention to form a union. Doolittle and Garrido have filed charges with the National Labor Relations Board. 

 

“My job with Uloop supported my education”, said Sarah Doolittle, a former Uloop student rep. “It’s disappointing that Austin and I were fired for choosing to exercise our legal right to form a union.”

 

According to the National Labor Relations Board’s website: “The NLRA [The National Labor Relations Act of 1935] forbids employers from interfering with, restraining, or coercing employees in the exercise of rights relating to organizing, forming, joining or assisting a labor organization for collective bargaining purposes, or engaging in protected concerted activities, or refraining from any such activity.”

 

Uloop.com is an online marketplace for college students currently operating in 50 campuses across America. The website hires two student representatives at each University who are in charge of promoting the site to fellow students.

“How can a company that caters to students, treat its own student workers so poorly?”, asked Austin Garrido, a former Uloop student rep. “You would expect better from a Silicon Valley high-tech company.” 

 

Article Continues @ Sourced Site.

  

Dick Cheney was never a “grown up”

From Salon:By Sidney Blumenthal 

 April 14, 2008 | After George H.W. Bush’s national security adviser, and had counseled against the invasion of Iraq, told The New Yorker magazine in 2005, “I consider Cheney a good friend — I’ve known him for thirty years. But Dick Cheney I don’t know anymore.” Scowcroft’s judgment was less about Cheney’s temperament than his policy positions. The press, however, sought to disclose the sources of his “darkening persona,” as a cover story in Newsweek described it. “Has Cheney changed? Has he been transformed, warped, perhaps corrupted — by stress, wealth, aging, illness, the real terrors of the world or possibly some inner goblins?” A cover story entitled “Heart of Darkness,” published inThe New Republic, suggested that Cheney’s heart disease had produced vascular dementia. “So, the next time you see Cheney behaving oddly, don’t automatically assume that he’s a bad man.”

 

In 2000, when Cheney, as head of George W. Bush’s search committee for a running mate, selected himself, opinion makers in Washington greeted the choice as proof positive of the younger Bush’s deference to wisdom and therefore personifying prudence. Cheney’s “manner gives him immunity from the extremist label,” assured David Broder, the longtime leading political columnist of the Washington Post. “Voters who saw his televised briefings during the Persian Gulf War remember the calm voice and thoughtful expression that are his natural style … By choosing a grown-up, Bush gave evidence of his own sense of responsibility.”Five years later, in 2005, Colonel Lawrence Wilkerson, by then the former chief of staff to the former Secretary of State Colin Powell, speaking publicly at a Washington think tank, the New America Foundation, was less concerned with the press corps’ obsession with Cheney’s shifting images than with exposing his unprecedented manipulations. “What I saw was a ca

bal between the vice-president of the United States, Richard Cheney, and the secretary of defense, Donald Rumsfeld, on critical issues that made decisions that the bureaucracy did not know were being made.” Though he had had extensive experience in government, Wilkerson had never before encountered such “secrecy,” “aberration” and “bastardization” in decision-making. “It is a dysfunctional process,” he said. “And to myself I said, okay, put on your academic hat. Who’s causing this?”

 

Previously fixed on the stereotype of the “grown-up,” pundits projected a new stereotype of dementia. But had Cheney, in fact, been fundamentally transformed, becoming unrecognizable to those professional observers of the press who believed they knew him well? Both Scowcroft and Wilkerson had encountered Cheney within councils of state. Had even Scowcroft misjudged Cheney as a team player when he was Secretary of Defense during the Gulf War? Was Cheney a regular, conservative minded Republican who had just gone mad? Or, if he were a member of a “cabal,” did it involve more than Rumsfeld?

 

George W. Bush jettisoned the tenets of traditional Republicanism — fiscal responsibility, limited government, separation of church and state, and realism in foreign policy. Instead the doctrines that had been nurtured in the hothouse of the Counter-Establishment since the Reagan period achieved their most radical expression. At every point, Cheney exercised his power. 

 

The supply-side theory of tax cuts — that slashing tax rates especially on the upper brackets would produce a flood of new government revenues — was applied with a vengeance even after the Reagan experiment had disproved the notion, having fostered extraordinary deficits. On Nov. 15, 2002, after Bush’s tax cuts had passed, then Secretary of the Treasury Paul O’Neill spoke at a White House meeting of the senior economic team about an impending “fiscal crisis” because of “what rising deficits will mean to our economic and fiscal soundness.” Cheney quickly knocked down his argument. “Reagan proved deficits don’t matter,” he said. “We won the midterms. This is our due.” O’Neill was soon fired. He concluded that Cheney and “a praetorian guard” governed Bush’s presidency. “It’s not penetrable by facts,” he said. “It’s absolutism.”

 

Conservative lawyers were installed throughout the administration and appointed to federal judgeships while radical legal doctrines were imposed. As soon as he took office Bush ended the American Bar Association’s pre-screening of judicial nominees, a practice that had begun in 1948. The ABA was considered a hopelessly “liberal” organization. In its place de facto vetting was now performed by the Federalist Society, a group that “has created a conservative intellectual network that extends to all levels of the legal community,” according to its website. Founded in 1982 and infused with more than $15 million in grants from conservative foundations, the Federalist Society has become the principal network for lawyers on the right. Nearly every Bush judicial nominee, every Justice Department official, every general counsel in every federal department and agency, and dozens of senior cabinet and sub-cabinet secretaries was a member. 

 

The congressional investigation into the political purge of U.S. Attorneys uncovered evaluation forms with a column to be checked about whether or not the applicant was a Federalist Society member. On every issue, from the gutting of the civil rights division of the Justice Department, where 60 percent of the professional staff was driven out and not a single discrimination case was filed, to the implementation of the so-called “war paradigm,” including abrogation of Article Three of the Geneva Convention against torture, (which then White House counsel Alberto Gonzales termed “quaint” in a memo to the president), Federalist Society cadres were at the center. David Addington, Cheney’s counsel and later chief of staff, directed the tight-knit group of “torture lawyers” within the administration.

 

Foreign policy was dominated by the neoconservatives whose agenda was galvanized after the terrorist attacks of September 11. The 2000 manifesto issued by the Project for a New American Century, a neoconservative group that advocated “regime change” in Iraq, contained a cautionary line that “the process of transformation, even if it brings revolutionary change, is likely to be a long one, absent some catastrophic and catalyzing event — like a new Pearl Harbor.” September 11 became that “new Pearl Harbor,” providing long hoped for political momentum the neoconservatives channeled for an invasion of Iraq.

 

The influence of the neoconservatives over the national security apparatus was heavy-handed and pervasive. More than 17 signatories of the Project for the New American Century statement held posts within the Bush administrations, including Cheney, Rumsfeld, Paul Wolfowitz (Deputy Secretary of Defense), Richard Perle (chairman of the Defense Policy Board), and John Bolton (Undersecretary of State for Policy and later Acting U.S. Ambassador to the United Nations). But these eminences were the tip of the iceberg. Neoconservatives also staffed the Office of the Vice President, comprising the largest national security team ever assembled by a vice president. Neoconservatives were strategically placed throughout the National Security Council—for example, Elliott Abrams, NSC director of Middle East affairs, a convicted felon in the Iran-contra scandal. And neoconservatives were packed into the Office of the Secretary of Defense and his Office of Special Plans, a new office created to “stovepipe” intelligence to the White House without having it vetted by the CIA or other intelligence agencies. 

 

Article Continues @ Sourced Site.

Jobless claims highest since Sept. 2005

By JEANNINE AVERSA, AP Economics Writer
Thu Apr 3, 6:53 PM ET

 WASHINGTON - The number of new people signing up for unemployment benefits last week shot up to the highest level in more than two years, fresh evidence of the damage to a national economy clobbered by housing, credit and financial crises.

The Labor Department reported Thursday that new applications filed for unemployment insurance jumped by a seasonally adjusted 38,000 to 407,000 for the week ending March 29. The increase left claims at their highest point since Sept. 17, 2005, following the blows of the devastating Gulf Coast hurricanes.

“This report supports the view that the jobs market is deteriorating toward recessionary conditions,” said T.J. Marta, a fixed-income strategist at RBC Capital Markets.

The latest snapshot of labor activity was worse than economists had anticipated. They had predicted claims would be much lower, around 365,000.

In other economic news, the Institute for Supply Management said the nation’s service sector — including retailers, hotels, insurance companies and other firms — contracted in March but not as much as the month before. The institute’s index registered 49.6 last month, compared to 49.3 in February. A reading below 50 indicates contraction, while a reading above 50 indicates growth.

On Wall Street, investors took the latest batch of economic news in stride. The Dow Jones industrials gained 20.20 points to close at 12,626.03.

A government analyst said some of the big increase in jobless claims may have been related to an early Easter holiday this year, where claims that weren’t filed or processed during the holiday week were pushed forward into the following week.

Still, looking at the longer-term trend there was little doubt of the pickup in unemployment filings. A year ago, new claims stood at 319,000.

Meanwhile, the number of people continuing to collect unemployment benefits rose by a sharp 97,000 to 2.94 million for the week ending March 22, the most recent period for which that information is available. That was the highest since July 17, 2004.

 Article Continues @ Sourced Site.

Supplier moves to hire as workers picket

From the Detroit Free Press (freep.com)

Nearly five weeks into the UAW strike at American Axle & Manufacturing Inc., the company is hiring workers at four plants in New York and Michigan that are subject to the work stoppage, to replace striking workers and for future positions at the auto supplier.

In an ad found on The Oakland Press’ Web site, the company said it seeks candidates for production and skilled trade positions.

After noting the strike, the ad reads: “Employment offered to applicants responding to this advertisement will be to fill anticipated attrition replacement openings after negotiations or in place of employees involved in this strike.”

The ad does not list compensation rates for the positions or a start date, but notes that the company seeks to fill full-time positions for three shifts and that those hired would receive benefits after “a certain period of regular employment.”

Article Continues @ Sourced Site.

Thousands Of Bay Area Nurses Walk Out

SAN FRANCISCO — Frustrated union nurses walked off the job Friday at several Bay Area hospitals affiliated with Sutter Health in the latest job action triggered by lengthy and contentious negotiations over a new work contract.

Some 4,000 registered nurses from California Nurses Association began striking at 7 a.m. to show Sutter Health they are serious about negotiating a new contract.

“We want to stand firm with our brothers and sisters at other Sutter hospitals,” intensive care nurse Sharon Tobin said. “Registered nurses are all that stand between our patients and corporate health care.”

The strike marks the longest walkout since October.

Registered nurses from Mills-Peninsula are enjoying strong community support, and not just in the form of passing motorists honking in response to the signs. Tobin said that nurses have gone door-to-door in the surrounding community and have collected around 800 signatures on a petition asking the hospital to respond to the nurses’ requests.

The nurses are striking to protest what they consider serious patient care issues including safe staffing even during rest and meal breaks, medical benefits and pension improvements.

The nurses association is also protesting Sutter’s alleged attempt to close three community hospitals in the Bay Area that serve a patient population that is poorer and composed of more people of color than other Sutter hospitals. More

Crandall Canyon mine owner fined AGAIN

The Associated Press is reporting:

The government ordered a $420,300 fine after finding safety violations at a Utah coal mine controlled by Crandall Canyon disaster figure Robert Murray.

Murray Energy Corp. had no immediate response to the charges Thursday.

Federal regulators say they assessed the fine for accumulations of coal dust and hydraulic oil on equipment at the Aberdeen coal mine in 2006 and 2007. The government says dust and oil made the mine vulnerable to fire and explosion. More

Gee, Murray, this sure doesn’t sound like toilet paper violations to me. Could it be that you don’t take the safety of your employees “to bed” with you as often as you expect us to believe? By the way, the Salt Lake Tribune does an excellent job of holding this lying sack of crap accountable. Read this story about the Murray cabal losing a fight to keep records out of the Tribune’s hands regarding the Crandall Canyon collapse. -Sue

Jobless claims averages at highest level since Katrina

By MARTIN CRUTSINGER, AP Economics Writer

WASHINGTON - The number of newly laid off workers filing for unemployment benefits rose last week to the highest level in nearly two months, providing more evidence that the weak economy is having an adverse impact on the labor market.

The Labor Department said Thursday that applications for jobless benefits totaled 378,000 last week. That was an increase of 22,000 from the previous week and was a far bigger jump than had been expected.

The four-week average for new claims rose to 365,250, which was the highest level since a flood of claims caused by the 2005 Gulf Coast hurricanes.

The current economic slowdown, which many economists believe has already turned into a full-blown recession, is starting to show up in the labor market in terms of higher layoffs and weaker hiring numbers.

The total number of payroll jobs fell by 63,000 in February, an even bigger decline that the drop of 22,000 jobs in January, which had been the first monthly decline since mid-2003.

The number of unemployed workers who are receiving benefits totaled 2.865 million, the largest amount since late August 2004. More

$11M to be restored to Enron fund

AP News

Mar 13, 2008 19:56 EST

More than $11 million will be restored to the settlement fund for former Enron Corp. employees who lost their retirement fund during the company’s collapse, the Labor Department says.;A settlement reached Thursday ends a contempt motion filed by Labor Secretary Elaine Chao in February against Hewitt Associates LLC, an Illinois-based company that was hired by the Enron Creditors Recovery Corp. to allocate settlement monies owed to Enron employees.

In 2006, former Enron workers received about $89 million, the first payment in a lawsuit settlement over money the workers lost through Enron’s employee stock ownership and 401(k) plans. But more than 20,000 workers were overpaid or underpaid nearly $22 million because of a software glitch blamed on Hewitt. Hewitt is no longer the administrator.

Enron Creditors Recovery Corp. and Hewitt have agreed to restore $11.2 million to the settlement fund, the Labor Department said.

Enron said that even after efforts to get back the money that was overpaid, the settlement fund was still $9.15 million short.

The department added that Enron and Hewitt have agreed “to provide the funds necessary to make up the shortfall in the amount needed to make whole the underpaid participants.”

Story Continues (Off Site)




  • Support The H.O.R.N.

    Monthly Subscriptions
    Rock ($10 USD)
    Paper ($25 USD)
    Scissors ($50 USD)
    Hammer! ($100 USD)
  • To donate by mail

On Air!



Streaming and Archives made possible by
The White Rose Society

Chatroom


  • One Billion Bulbs The Head On Radio Network Bulbs Change Statistics

  • H.O.R.N. Widgets




  • Subscribe

    Subscribe to my RSS Feeds

    Categories


    Close
    E-mail It