Every time a group of workers threatens to go out on strike, the media is quick to trumpet the potential “economic impact” of the job action — which impact always seems to be a big scary negative number. So over the past year we’ve read that the potential rail strike was going to cost $1 billion a week, the potential UPS strike was going to cost $7 billion, and the potential strike by autoworkers would supposedly cost $5 billion in ten days. The methodology behind these impact numbers is shady but irrelevant, because the only real point of these figures is to generate headlines that blame organized workers for hurting the economy, attempting to turn public opinion against them.

Take a half-step beyond the headlines, and there’s a strong argument to be made that strikes and credible threats of strikes are a net positive for economic growth, because collective bargaining is one of the most powerful tools workers have to shift substantial amounts of money from excess profits to higher wages. Consumer spending is what drives the economy, and workers having more money is what boosts consumer spending. So why is there so much speculation on billion-dollar costs, and so little reporting on the positive economic impacts of unionization as a way to reduce inequality?

Make it make sense. 

In an egregious statistical crime, the notoriously incorrect but unfortunately influential economist Larry Summers recently overlaid inflation numbers from the 1970s with more recent inflation figures, stating that the pattern was a “sobering” warning that the current trend of declining inflation might not continue. Instead, he suggested, the numbers could follow the shape of the lines from 50 years ago, when inflation spiked, then fell somewhat, then jumped a second time. But as a huge number of people pointed out, Summers manipulated the y-axis to make the two series look more similar than they really were, and seemed implicitly to be predicting not the underlying logic of inflation, but a second coming of the 1970s oil embargo.  And in any case, lines with a vaguely similar shape don’t have causal power on the world, so the whole thing was more like reading entrails than economic analysis. But perhaps the best takedown came in the Financial Times, which compared the use of the word “stupid” in corporate earnings calls with inflation numbers, nailing the underlying absurdity of matching lines on charts and calling it analysis.

Workers lose an estimated $50 billion a year to wage theft, including unpaid overtime, working off the clock, missed breaks, and subminimum wage pay rates — more money than is taken in total in all the robberies, burglaries, and car thefts in the country. But while people who are caught stealing tend to be punished for their crimes, punishment almost never falls on  employers who commit wage theft. Even when an employer is investigated for violations of labor laws, the penalty is rarely more than making workers whole for the wages stolen from them — a remedy equivalent to letting a burglar get away with simply returning what they took. So it’s heartening to see the state of New Jersey bring real consequences for the crime of wage theft by shutting down 27 Boston Market locations until $2.5 million in penalties and damages for unpaid wages gets paid  — a move that might very well rattle corporate scofflaws enough to make them take wage and hour compliance as seriously as they take every other law. More of this in more states, please.

Civic Action
119 1st Avenue South Suite 320
Seattle, WA 98014
United States

If you believe you received this message in error or wish to no longer receive email from us, please unsubscribe.