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- [00:00]
Katherine
Ever since I found out we could curse on the show, every episode has had a little E next to it. And I'm like, e for economy, right? Am I right? Or is it because I curse like a sailor and always have? Hello, and welcome to Optimist Economy. I'm Katherine.
- [00:19]
Robin
I'm Robin.
- [00:20]
Katherine
On this show, we believe the US Economy can be better, and we talk about how to get there one problem and solution at a time.
- [00:35]
Robin
We'd like to start our show with quick announcements. First, for the guy who said he wishes we would get to the point sooner. If you upgrade your podcast app to something that uses chapters, we have chapters. And you can actually just forward to the part where we actually start talking about economics and not all this other chit, chatty, fun stuff.
- [00:51]
Katherine
And honestly, I respect that comment and I completely see you not offended.
- [00:56]
Robin
Not offended.
- [00:57]
Katherine
Not offended.
- [00:58]
Robin
Also, as always, we appreciate your contributions. We accept those on a couple of platforms. First, as paid subscribers to our substack, and also through a service called Buy Me a Coffee. If you go to optimisteconomy.com we will have links that will take you directly to either of those options for giving us money and keeping the show going. Thank you so much. Oh, I have one more announcement. Apparently that her Catherine is just never going to talk, which is hard to believe.
- [01:30]
Katherine
Come on.
- [01:34]
Robin
We are recording what should be our 18th episode. In two more weeks. We're going to do another episode where we are answering your questions. If you have a question you would like to ask the Economist, not me. I'll just read them. You can send them to optimist economymail.com or you can send us a message on substack.
- [01:53]
Katherine
Perfect. And I mean, I guess you could ask Robin a question, but she'll screen them out.
- [01:59]
Robin
I mean, if it was a question about, you know, journalism or style or avocados. I have opinions. Chapter two, Chapter two.
- [02:12]
Katherine
I wonder what we're going to call chapter on chapter. Anyway, I'm not going to say it because there's going to be another curse word. And we've been explicit. Every episode has had a little E next to it. E for economy. Right? Am I right? Our next chapter is Retcon for retroactive continuity, where we talk about past shows, things people have told us, or things we've thought about after the fact. But we already recorded and didn't want to do it again, so this is just easier.
- [02:37]
Robin
It's the correction stage.
- [02:39]
Katherine
All right. Our last episode was on the estate tax, which, again, just to reiterate, none of you are Going to pay. And if you are, you're giving us lots of money. So those are the two versions. If you are, two outcomes for you.
- [02:51]
Robin
Email us@optimist.eacreymmail.com we'd like to be in touch.
- [02:56]
Katherine
Absolutely was in touch with your estate guy. Do you have any retcon from the estate tax episode?
- [03:03]
Robin
Not really.
- [03:04]
Katherine
My retcon, I think, was kind of similar to what we talked about. Similar to what we talked about right at the end of the show, which was even as complicated as the estate tax gets. We didn't talk about a lot of it. Like, we didn't talk about how it relates to the gift tax. To the gift tax. Those are harmonized so that you're not incentivized to do hold on to wealth or give all your wealth away. They're supposed to be kind of equalizing the incentives for how you distribute money to heirs. We also didn't talk about all the kind of accounting that goes into how estates are valued and when. Based on things, when things were purchased. This is called the step up basis versus the carryover basis. And if y' all are dying to hear more about that, let us know. But it's so confusing. I think you should just know that right now the law is structured in a way that really encourages people to hold onto assets until death because the way that they're valued is favored for holding onto it. And that was a change to the law. We've basically not only reduced the estate tax or made the estate tax exemption so much higher, we've changed the accounting around how wealth is assessed so that they pay less tax. And I messed up, like, six times in that sentence, which is why we didn't put it in the episode, because so hard. The word assess is never my favorite. So we didn't talk about a lot of these complications. And it wasn't because it's tough, even though it is. It's mainly because I don't think that the juice isn't worth a squeeze. Like, we kind of told you what we thought you needed to know. And the big questions are less about the step up basis versus the carryover basis and more about do we actually want to tax wealth and what do we want to use it for?
- [04:46]
Robin
Exactly.
- [04:47]
Katherine
I have another retcon. Okay, this one's for Robin. I went to a family reunion recently for my grandmother's 95th birthday. And we were talking about her mother, my great grandmother. And she was hilarious, apparently told great stories. And I was talking to one of my great uncles about her and she said, yeah, real personality. But she, you know, she'd tell stories so long she'd get hoarse. I mean, she wouldn't be able to keep talking because she had talked for so long. And I was like, wow, I can't relate to that in the slightest. And I know someone, Robin Rousey, my co host, she'd have nothing to add on that. No notes, no notes, no notes. I just want you to know this is a generational thing and it ain't going nowhere, Robin.
- [05:36]
Robin
Multi, generational. Also. Now I know I can say, are you getting horse yet?
- [05:41]
Katherine
Are you getting a horse yet? Yeah, that would. That would be all you need to say. And I'd be like, oh, oh.
- [05:46]
Robin
All right, next chapter, Terms and conditions. So I looked something up because it was a crossword clue.
- [05:54]
Katherine
That's the best reason to look something up?
- [05:55]
Robin
Yeah.
- [05:56]
Katherine
Quick question from production for clarity. Did you look this up during or after solving the crossword?
- [06:02]
Robin
After.
- [06:03]
Katherine
After. Respect.
- [06:05]
Robin
Respect, yeah. And it was mathematician that an equilibrium is named for. And the answer was Nash. So I looked up Nash equilibrium. But I don't understand what this means at all because it turns out it's an economic thing. It was supposedly one of the most powerful ideas in economics coming out of 1940s. It says that every agent chooses their optimal strategy, taking the strategies of everyone else as a given. The Nash equilibrium is thus the best everyone can do, but need not be best for society. John Nash was the mathematician depicted in A Beautiful Mind, Right?
- [06:46]
Katherine
Yes.
- [06:46]
Robin
Yeah. In the book and the. And the movie.
- [06:49]
Katherine
Yes.
- [06:49]
Robin
So that I knew, but I did not remember that there was a Nash equilibrium, nor do I understand what this means. Can you shed some light on what this is?
- [06:59]
Katherine
Yeah, he's one of a handful of people who have won the Nobel Prize in economics despite not being an economist.
- [07:03]
Robin
Yeah, he was a mathematician. Right.
- [07:05]
Katherine
This is at the heart of game theory.
- [07:07]
Robin
Yeah.
- [07:08]
Katherine
So the thing that you said doesn't make any sense to me either.
- [07:12]
Robin
Okay, good. Because I really was like. I felt like I understood a little bit about a game theory, but I don't. I didn't know if this was something different from game theory.
- [07:22]
Katherine
No, this is kind of the. The seed from which all game theory spouts. So when you are thinking about economics, we think about a person maximizing their options. So you have two products that you can buy. You only have so much money. Each of them give you a different level of utility. And so you optimize based on what you would like. I can consume work or leisure, throwback to work requirements, and I'M going to. I'm going to consume as much work to consume as much leisure, and it's going to be dependent on me, and I optimize that situation. Game theory essentially introduces, like, player two has entered the game, where my optimization is contingent on another person's optimization. And the idea of a Nash equilibrium is that what you end up doing is kind of forecasting what you think the other person is going to do or what is most likely for the other person to do. And then you act based on what you think they're going to do. So they bring it up in a lot of examples. The one that comes up first, which I think doesn't speak maybe great for our profession, are two people who commit a crime, who are arrested and put in separate rooms.
- [08:32]
Robin
Mm. This is the prisoner's dilemma.
- [08:35]
Katherine
This is the prisoner's dilemma. And so you. You know, whether or not you stay silent or confess, for you, just alone, you would stay silent. They don't have evidence. But if the other person confesses, you're.
- [08:46]
Robin
Going down, and you don't.
- [08:47]
Katherine
You're going down. Whereas if you both confess, you get a lighter sentence. And so the equilibrium is that you would both end up in the option that is like mutually assured optimization, given what the other person does. So I have to tell you, in all honesty, game theory was my worst economic subject in grad school. It's not. It's just. It's a type of thinking that seems.
- [09:10]
Robin
More like working on mutually assured destruction kind of strategic thinking instead of how do we grow an economy.
- [09:19]
Katherine
We don't need to get from A to B. I got to tell you, it was like five years of school. Some of it I'd like to forget. It's real complicated. But the intuition it gives us is still there.
- [09:28]
Robin
Yeah. Today we're gonna talk about unions. Unions and the state of unions.
- [09:33]
Katherine
Solidarity, guys. This is the union episode. In honor of the union episode, I am wearing a union T shirt. The National Women's Soccer League Players association, when they signed their latest collective bargaining agreement in the summer, we said, now they all wore it to the game to celebrate their bargaining victory. And it was a really cool bargaining agreement. I've tried, like, six times to work it into a Bloomberg column. And my ed is like, I still don't know how this applies to the economy. And I'm like, it does. People need to know this.
- [10:04]
Robin
People need to know.
- [10:05]
Katherine
It's about women's bargaining agreements. It's in the top five for me. We want to talk about unions, I think, because I just Actually want to.
- [10:15]
Robin
Know what else is in the top?
- [10:16]
Katherine
What else is in the top five?
- [10:20]
Robin
Do you have your favorite bargaining agreements? No, like everyone.
- [10:25]
Katherine
No, normal people don't. And I'm a human person, so I don't either. Okay. I don't know who wouldn't, I don't know who wouldn't say the Treaty of Detroit. I don't know anyone who would, who would be like, yeah, and the Treaty of Detroit didn't make the top five. Like, I'm pretty sure it's going to be in everyone's top five. Yeah. Also the bargaining agreement as a result of the sit down strike of 1936. That one's a big one for me. I teach the sit down strike because I think it's so fascinating.
- [10:54]
Robin
Okay, what's going on with unions now? I mean, felt like there was a huge amount of coverage about unions in the Biden administration. Especially like the unionization efforts around Starbucks I think got a huge amount of attention. And Amazon and Biden was very clearly pro union. That is not the environment we're in right now. So that's kind of table setting.
- [11:15]
Katherine
Table setting. I think the premise of why I wanted to talk about unions is that we are at this incredible moment in terms of organized labor in the United States. The approval ratings for unions have hit a seven decade high.
- [11:34]
Robin
And this is public polling, not member polling or something.
- [11:37]
Katherine
This is public polling. You ask people as part of a general sentiment poll, like, do you approve of unions? We're at like a near 70 year high for people's approval of unions. They think we want more unions in the United States. You ask them about their approval of say big business. And that is at a multi decade low. In fact, it's dropped from about 50% to about 25% this century.
- [12:02]
Robin
It's like Congress, Americans are at a.
- [12:05]
Katherine
Place where they trust unions, they want unions. They will say in majority numbers that the US is worse off without having a strong union presence. And they think very little middle of big business. And yet just 5.9% of private sector workers are unionized. This is.
- [12:26]
Robin
And that's low, right?
- [12:27]
Katherine
It's lower than it was in 1934 before the National Labor Relations act was passed and the right to unionization became a legal right that every worker was endowed with. So over the course of the past 90 years, the fate of unions and big business and their sentiments have changed a lot. But unionization has been in about a seven decade decline to the point where it is if the National Labor Relations act and the right to Unionize doesn't exist.
- [12:56]
Robin
Right. Are you seeing a lot of connection here between these sentiments and the numbers?
- [13:01]
Katherine
Well, yes, because I think for the show, the reason why I wanted to bring this up is like, hey y', all, statistically this is a thing that you're like, I could take some more unions in the US and we're going in the other direction.
- [13:11]
Robin
Right.
- [13:12]
Katherine
So as a solutions oriented show, I thought we could talk about how this is something that has some really good solutions that you probably haven't heard of. But I think the second part of that, not just making it about me, but about the economy, the idea that unions are very popular but also not very present, I think does have a connective tissue to unions were incredibly effective at building the middle class in the United States and we are suffering from their loss. And I think on some level a lot of people can understand that the economy is a more equal place when workers are empowered and represented through, through a union.
- [13:52]
Robin
Got it. You think that the feelings about wealth inequality are driving the affinity for unions?
- [13:59]
Katherine
I mean, it would certainly be appropriate if it were the case. There's this really fascinating and important piece of economic research about unions that can explain why I think that. But I have to first explain it to you and this requires some context. So you're going to have to stay with me. I mean you always stay with me, but you have to really stay with me here. So context one, we, we, as in like the royal economics, we know that unions raise the wages of their members. So if you're in a union, you're earning more money. What's not clear is whether or not unions raise the wages of people who aren't in a union. So this would be, you've got a high paying employer and a unionized, high quality job that puts pressure on other employers to raise their own wages. That would mean unions are good for other workers. But if unions make labor costs more expensive and worker and employers demand less labor, it leads to lower employment. And there unions are bad for other workers. The second piece of context you need to know is that the United States is almost always trending towards greater income inequality. We get more unequal in each successive year, most of the time. And we can trace this, we can measure this back to 1913, the year the federal income tax comes into being. We can look at tax data to see this. So take all of the income earned in the United States from whatever source and put it in a big pile and you see how much the top 10% takes home of total income, income from 1913 to around 1940, it just slowly increases every year to the point where they take home 40ish percent to around 50% over that period. At the same time, the bottom 50% takes home a little bit less. All that changes in 1940. And between 1940 and 1980, the top 10% took home a third of income. The bottom 50% took home 20. It doesn't sound like much, but it's a huge gain. It's a compression of the income distribution that we often call the golden middle because it was associated with a blossoming of middle class incomes. This all fell apart around 1980. And we go back to the same pattern we were in in 1913. The US becomes a little bit more unequal every year as measured by how much income the top 10% is earning. So back to this paper. Their question was what made us so equal in the 1940s and 50s? Like what caused this kind of incre period of a more equal place, more equal income distribution? So this paper looks at unionization and the introduction of union rights through the National Labor Relations act, as well as the protection of unionized shops through the Wartime Production act, and finds basically, yeah, unions did this not entirely on their own, but they were a incredibly large contributor to the income equality kind of gains that we saw in the 1940s. And they, the paper, they kind of say like, it's probably from like the late 30s through at least 1950, we have a reasonable amount of evidence that the decline in income inequality was due to unions. So if people now are feeling like there's a lot of wealth inequality and not a lot of unions, and maybe that's related, there's a lot of economic, I mean this is a very solid piece of economic research to say your instincts are right because history says this is what unions have done. And I got to tell you, it's very hard to prove anything decreases income inequality in the US it's not like, oh, so we've actually found like 75 different things that will help with income. No, we haven't. It is very hard to decrease income inequality. It's hard to find something that effectively does it. So for a paper to say like pretty loud like, yeah, unions make the economy in a more equal place is, is a, it's such a remarkable finding that makes intuitive sense for people who like unions. That's very hard pill to swallow for people who don't because they do have economic costs associated with them, but they, they reduce income inequality. And so what I find so incredible is that people in their opinion polling have come around to what I would economically assess to be the case, which is that the US is in need of more worker empowerment, bargaining and unionization. There is too much power in the hands of employers right now and it is showing up in income inequality. If we want to counter this, we need some unions.
- [18:23]
Robin
Yeah, well, and a lot of other things are happening in tandem to that. Right. That the biggest employers are themselves getting so big that it's much different than unionizing a small local factory to try to unionize a national warehouse. You know, union for Amazon. Yes.
- [18:44]
Katherine
And I think the, the, there are lots of other through lines that we have less amazing evidence with, but that would, people would say like this is probably part of it. Like we have a turn towards corporate stock buybacks. We have, you know, massive deregulations of major industries. We have kind of a renaissance of mergers and acquisitions that reduce the number of employers and companies. An increased concentration in the market that gets like. Basically it's a go ahead from the Fair Trade Commission for decades until Biden's FTC was like, actually we're not gonna. A lot goes hand in hand with this, but we have identified solidly wage.
- [19:21]
Robin
Stagnation goes in hand with us. Which.
- [19:23]
Katherine
Yes. And that could be a two way street as well. So we have at least one very clear quiver in the arrow. No arrow in the quiver. God damn it. Why do I say it? Okay, so that's part one.
- [19:37]
Robin
Okay.
- [19:37]
Katherine
So people like unions, they want unions, they think unions are important. And this definitely aligns with the economics literature saying that unions were instrumental in decreasing income inequality in the United States. But the policy mechanism we have for increasing unionization is the National Labor Relations Act. And it has been so thoroughly gutted over 90 years, it's as if it's not there. So I could bring up some pretty startling statistics about how the National Labor Relations act have been gutted. I don't think we should spend too much time on it because it's basically instructive but not productive. Instructive to the sense that the NLRA is not necessarily the future because it has been so thoroughly dismantled and something else has to come. So here's some crazy stats for you. The union avoidance consulting industry is about $400 million in size. That gives you a sense of how much wages there afraid to lose.
- [20:35]
Robin
You should explain what a union. What union avoidance.
- [20:37]
Katherine
Union avoidance would be contractors that businesses hire to persuade people in an organizing campaign not to unionize. It's both during campaigns, then also to prevent campaigns of Campaigns that have made it to the National Labor Relations Board. A study in 2019 found that 41% of them had the employer had violated the law.
- [21:01]
Robin
You mean in terms of trying to suppress the unionization effort?
- [21:04]
Katherine
Every unionization effort you've heard of in the past five years, the employer has violated the law? Probably Starbucks more brazenly and openly than anybody else. And I remember thinking at one point, like, maybe Starbucks doesn't know this is illegal. Like maybe they've just, it hasn't occurred to them that you can't tell people, we'll give you a pay raise if you don't join the union. That's very illegal. And they did it, like with a press release.
- [21:29]
Robin
Ouch.
- [21:30]
Katherine
It wasn't, it wasn't quiet.
- [21:33]
Robin
Well, you know, but you have a law that's been so unenforced, it's entirely possible that folks don't know that it's illegal. I mean, I'm not making excuses for Starbucks. I, you know, sworn off them, but sorry if they want to be our.
- [21:46]
Katherine
Sponsor, but oh, yeah, we lost out on Starbucks as a sponsor. Sorry, y' all violate labor law brazenly. But I think probably Starbucks is the most instructive in terms of why the NLRA breaks down is that it doesn't have a good mechanism for making people write a contract. So you followed the Starbucks, Starbucks in Buffalo, New York, voting to organize. That was almost five years ago. They don't have a contract. No, Starbucks in the US does. Their tactic for avoiding unionization, which is something that every company will do, is that they will wait years to get through a contract, by which point people have either given up or left. And they can make it weaker if they make it at all. Hence the National Women's Players Association. We said, now it's not just that we want to be in a union. Like, you actually have to bargain with us once we vote for it. Yeah, I mean, the nlra, the ability to organize has been weakened on every front.
- [22:41]
Robin
Besides the fact that you can just drag your heels as a business owner, what are the other ways that that law should be letting people organize? That that's just not happening?
- [22:50]
Katherine
Well, it should be really easy. You work in an enterprise. We have enterprise based bargaining. So this is like you work in a shop, you work at a cafe, you work at a manufacturing facility. You all have the right to talk about joining a union. People who are in a union can come tell you why it's good. And then you get to vote on whether or not you want to join. And if you vote yes, the employer is supposed to grant a union. Almost every part of that process breaks down. Like one of the. I think it was one of the Amazon votes they set up. They were, they set up the ballot box, they put like three cameras in front of it. Some people were like, you know, I don't really feel comfortable voting because it's at my workplace and they're watching me vote. Yeah, stuff like that. That one, they had to vote again. I think that was in Alabama where the judge was like, yeah, you're gonna have to hold this vote again because you had. I mean, what employers do best is counter information campaigns through the union avoidance industry. A lot of misinformation and then a lot of intimidation.
- [23:50]
Robin
Yeah.
- [23:51]
Katherine
And you're not allowed to tell someone, if you vote for the union, I'll fire you. The other thing that's been happening a lot is that there's been accusations that once shops organize, they will downsize the company and get rid of that shop for the podcast. It helps to, like, if they have done such a thorough job of gutting the nlra, that means they're good at it. And so even if we were to prop it up, give it some more teeth, I think we could do lots of things.
- [24:17]
Robin
It could just happen again.
- [24:18]
Katherine
It could just happen again.
- [24:19]
Robin
Yeah.
- [24:20]
Katherine
And so the question is, is there a way to promote unionization that does not rely on the enterprise based bargaining guaranteed by the National Labor Relations act private industry has so thoroughly hated, gutted and overpowered over the past 90 years? And the answer is, yeah, girl, there is. Okay, you know it, you know it.
- [24:44]
Robin
Thank God, or we wouldn't have another podcast episode.
- [24:47]
Katherine
Yeah, otherwise this would be downer economy.
- [24:50]
Robin
Downer economy.
- [24:51]
Katherine
Brought to you by income inequality.
- [24:54]
Robin
Brought to you by Starbucks.
- [25:02]
Katherine
Don't cut that. First, let me say I think we should restore a lot of the rights of enterprise based bargaining because it has a role in our economy. What I think the US Needs to pursue in tandem with gusto is sectoral bargaining.
- [25:19]
Robin
Just take a beat here and explain that. You're talking about essentially not having to unionize shop by shop by shop, but doing something else instead.
- [25:28]
Katherine
In a sectoral bargaining model, it's sometimes called multi employer models or industry models. Basically, everyone who works in an industry, which can be a small or large industry, is brought under a labor agreement. So this used to be called the tripartite because the idea is that you would have a worker representative, a business representative, and a government representative on a board that would negotiate wage and working condition floors for whoever is in an industry you would have much of your minimum working conditions and wages organized on a sector by sector level. And the benefits of it is that it's a lot more coverage even if it has less teeth, and it sets wage and working conditions that are very specific to the sector, meaning that sectors that are small and wouldn't necessarily influence national labor policy can still see improvements in their working conditions that are really specific to them. So like you wouldn't necessarily have a piece of legislation that is going to dictate the ROTA schedule and workload of nurses, but a wage board could do that and be a way to make improvements industry wide. And basically everybody in the industry has to adhere to it. A lot of conservatives love sectoral bargaining because you still have like competition between firms you don't have. Like if one of them becomes enterprise and the other one doesn't, then they're competing on this union side and it covers everyone. I think the worry from the labor side is that a lot of the benefits to unionization there's a worry that they would be lost if it was too diluted amongst like an industry wide board. So like unions are incredibly good at making sure labor law is followed. The safest workplaces in the US are going to be the ones that have a unionized shop because they are protected from say retaliation if the union makes a complaint about safety as opposed to like just one guy. So they're pretty good at enforcing and having labor law enforced. But the benefits to an industry wide board would be, you know, it would get around things like really weird employer subcontracting ownership structures that can be used to shield liability.
- [27:48]
Robin
Oh, like you're bringing in contractors to do the cleaning in your hotel and they're not your employees, that kind of thing.
- [27:54]
Katherine
Exactly. They're not my employees, so I don't pay for them. And you know, if they employed children, like that wasn't on me. Right, right. Whereas if you have an industry wide labor agreement, it doesn't matter which is the employer in the industry. Like this is the labor agreement that your hotel has to follow because it's a hotel labor agreement and it's set by workers, it's set by the employers and it's set by the government. Now why tripartites fell apart in the U.S. even though we had these in the 30s and 40s, why they fell apart is it's a little like it depends on whether or not you're liberal or a conservative. Conservatives tend to say it's because unions like the UAW felt like they were a threat to their power. And so they encouraged the abandonment of sectoral bargaining in order to concentrate power amongst enterprise bargaining because the unions wanted all the power. Liberals would say that sectoral bargaining agreements were starting to come into industries that employed black people and that conservatives did not want black people to be empowered with higher wages or working conditions. So you can take your pick.
- [29:04]
Robin
No winners there.
- [29:05]
Katherine
No winners there. But if it really matters to you to blame someone after the Taft Hartley act of 1947, you go pick your.
- [29:13]
Robin
Hero or your villain.
- [29:17]
Katherine
Go pick your villain. Go pick your hero. Go pick your villain. I think the upshot is that this was something that we had in the US and it was popular and effective. If it went away, it wasn't for a good reason or any reason that would think that. I mean, if the reason why it went away, neither of those are great. It's not like, oh, but it turns out it didn't work here. It's like, okay, so it empowered a lot of people and someone was upset about it. Sounds all right to me.
- [29:48]
Robin
I'm okay.
- [29:50]
Katherine
That's weird. My pulse didn't even go up a little bit when you said that. So, yeah, it's something that we had in the US it was. We were an early champion and developer of sectoral bargaining. And Europe. Europe adopted it kind of in full force. And we. Even though it was something that we had kind of done for. Not done first, but it was an American thing. And Europe, really, now, Europe has a lot of sectoral bargaining agreements, but they're starting to make their way back to the U.S. the fast food Commission in California is a sectoral bargaining agreement that everyone who works for fast food has to follow minimum wage and working conditions. And that's a function of employers and the state of California and workers coming with those pieces.
- [30:33]
Robin
That's interesting. Yeah. Because, you know, we've also had the. Is this an extension of the sort of fight for 15, the minimum wage fight for fast food workers? At least in California?
- [30:42]
Katherine
Yeah. The fight for 15 to raise the minimum wage was a broader fight. It came out of Seattle. SeaTac.
- [30:48]
Robin
Oh, right, the airport.
- [30:50]
Katherine
The SEATAC airport was the first one to demand $15 in minimum wage. And then it was brought into a broader national movement, and then when that fell apart, used in focused campaigns. 15 is too low now.
- [31:03]
Robin
Yeah, we're fighting now over 30 for the Olympics in Los Angeles.
- [31:09]
Katherine
Really?
- [31:09]
Robin
Yeah. And they're. And the hotels are fighting it. Fighting it hard, I would imagine. Yeah.
- [31:15]
Katherine
But this is the thing. Like, what should the minimum wage be for hotel workers during the LA Olympics versus like your small seaside bed and breakfast in Georgia. I mean, one of the, one of the strengths of sectoral bargaining is that it can set wage floors on the national level and set wage floors on, on state level.
- [31:37]
Robin
They don't have to be.
- [31:38]
Katherine
And part of the, one of the reasons why we don't have more of them is that it's actually not clear they're legal. They might violate, they might violate antitrust law. Well, there's like some weird antitrust trust.
- [31:49]
Robin
Oh, sure.
- [31:50]
Katherine
Like, sure, sure. Like there's no law that says we can't have sectoral bargaining. But there are pieces of the law that could be interpreted as technically, this.
- [31:57]
Robin
Is collusion, this is colluding.
- [31:59]
Katherine
Yeah, yeah. So there needs to be some clarity on the national level. But the next sectoral bargaining is. Nursing home workers in Minnesota are moving towards a sectoral bargaining agreement. And also Uber drivers in Massachusetts. You're starting to get these pockets of breakthroughs that are, I mean, they're very successful. So we have the model, we have some small examples. What we really need is kind of federal. Like, yeah, y' all go and, and I think they could really take off. I don't actually think they're illegal. I think someone's going to use language and antitrust law to bring up lawsuits.
- [32:35]
Robin
Yeah.
- [32:36]
Katherine
So it would be nice to skip that part with a little bit of like federal language. Like dear states, you're allowed to do this. You should do this. Love, Uncle Sam.
- [32:48]
Robin
Do you think that these would be most effective on the state level or do you think that there's a place for them on a national level? I mean, the United States is such a big, big country, but we have employers that are that big. We have, you know.
- [33:01]
Katherine
Yeah, I think there's room for national, regional and state agreements and you could even have local ones pop up. I think it depends on the industry and the occupation. So like, you should have a sectoral arrangement for farm workers on the west Coast.
- [33:19]
Robin
Right.
- [33:19]
Katherine
And it shouldn't be about California versus Oregon versus Seattle. We just need a west coast farm worker alignment. There's something really close that happened with tomato pickers in the southeast and in Florida, which started with the coalition of Immokalee Workers, which is in some ways is a, is less about sectoral bargaining per se. From the top down. It was truly a sectoral bargaining movement that came from the bottom up of targeting employers one by one to treat their tomato pickers better. I mean, that's a 20 year fight. But I think if this were going to work really well, you would see it move based on where it's most appropriate and then you could still have enterprise bargaining. In fact, there is still a need for enterprise based bargaining. But we wouldn't unhinge the entire labor movement or like good wage growth and, and labor law following of workers on like a shrinking population. Like we could get that population to go up. But maybe it's like put all eggs in one basket versus like different enterprises, different industries, different employment arrangements. Like one of the problems I have with enterprise based is it doesn't have a great mechanism for bringing contracted workers into the fold. But if you have a sectoral bargaining agreement and let's say it applied to media outlets, that would govern freelancers so you wouldn't be able to structure your labor contract to undercut the sectoral based workers with contractors. It covers everybody who works for the industry. I think what I like about sectoral bargaining is that there's this kind of move towards having a lot of independent contractor relationships and this is a way to bring them into a bargaining fold without necessarily making them work for employer or be boxed out of an enterprise agreement agreement.
- [35:02]
Robin
So some enterprises could have a union on top of a sectoral agreement if they had particular issues they needed to work out. I also, I wonder, I mean this may be too in the weeds, but I'm, I'm thinking about so the conflicts between like living in one place and working in another, which has become more common. Right. And I just thought of this because you brought up media workers. California passed laws that said if you're going to use somebody essentially as a contractor, but they're actually doing the thing that you do. And newspapers were one of the places that got affected by this. In other words, you're hiring journalists to write news stories, then they have to be employees and they can be part time employees, but they have to be employees. And so all of a sudden everybody who wanted to hire nobody wanted to hire Californians because they were covered by this law and nobody in any other state wanted to figure it out or deal with it. And it really hurt freelancers.
- [35:52]
Katherine
But I think, think a sectoral agreement done well could obviate that type of conflict and problem because you would have.
- [35:59]
Robin
All the players at the table.
- [36:00]
Katherine
Because you have all the players at the table. And maybe the, maybe it's not a. Oh God, I'm about to say something stupid but like maybe it's not a tripartite. Maybe it's a quad. Right?
- [36:11]
Robin
It's a quad.
- [36:11]
Katherine
Just A quad, maybe it's a quad partite like that. You need contracted workers, W2 workers, employers and government at the table. Because we're seeing this bifurcation of workers along whether or not they're employee or non employee. But the industry needs to cover all of them. So you basically have to have them all at the table. But the, I mean, the idea behind sectoral bargaining and why it's so appealing even to conservatives is that it's really about bringing everybody to the table to come up with an agreement that doesn't disadvantage any single employer or any single worker for that matter.
- [36:46]
Robin
Yeah, let them, let them compete on some other basis.
- [36:48]
Katherine
But I think you could imagine it having like. All right, well we have a media sectoral bargaining agreement for California in New York. It still has to meet some kind of like national standard. So most laws have a national floor that states can go above like the minimum wage. Child labor is like this. Minimum wage is like this. So for sectoral agreements, you'd probably have some, you'd have something similar of like we have a national agreement in place, but your industry and your state can go above it.
- [37:16]
Robin
I mean, you can imagine how this worked in like, I don't know, auto manufacturing or building planes during World War II. Companies now have workers who are doing all sorts of different things, right? You have marketing people, you have HR people, you have managers, you have computer programmers. But the sector would include everybody who is in that. If Microsoft is in technology and the agreement was a technology workers agreement, there's.
- [37:43]
Katherine
Not a rule here. You could go industry or occupation or an occupation within an industry. So you could come up with like janitorial grounds clearing and maintenance. Every employer in a state, they all have to follow this basic sectorial agreement for their grounds cleaning and maintenance staff. I actually think healthcare is probably the place where sectoral bargaining could really take off because hospitals do amazing things, but they are terrible employers. And we actually really need doctors and medical staff to not be burnt out. So it's of national interest that we have have happy, healthy workers in the medical profession, but we don't necessarily have happy, healthy employers. So having some type of like negotiated wage contract for like emergency services workers, medical workers, I think it's. Some people see that as like the natural inroad for the rest of the economy is that like, hey, the government has a stake in some hospital in Minnesota not grinding its workforce to the ground because we need people to staff hospitals and we, we invest a lot in this profession and you're like burning them up and Chewing them out. Same thing with like teachers. There are some professions that are just of national interest that I think would give a. I think politically would make for a really easy leeway to like, we need to have a good agreement for them. And then that opens the door because.
- [39:04]
Robin
Both of those, both of those groups of people, nurses and teachers, both have pretty strong unions.
- [39:10]
Katherine
Yeah, they do, but it, but a sectoral agreement would basically extend it to any non unionized nurse because they're not. No profession is unionized at 100%.
- [39:18]
Robin
Okay, well, and teachers. Yeah, I mean, you know, with the expansion of charter schools and things, fewer and fewer teachers, even in public schools.
- [39:26]
Katherine
Yes. So this is sectoral bargaining. I think it, I don't know if the case is like, y', all, it's not as crazy as it sounds.
- [39:35]
Robin
Well, it does sound hard and it does sound like something that the federal government would be wary of. Large employers have a lot of power and sway with our elected leaders, especially right now. And I don't know if they would put the full force of their opposition on something like this.
- [39:57]
Katherine
I mean, if they respond to this the way they've responded to enterprise based bargaining, it's going to be an uphill battle. But at the same time, like, we have the ultimate ace up our sleeve, which is that people don't like businesses and they like unions. So to the extent that we live in a representative democracy, this should not be as hard of a sell. Like, yeah, businesses have a ton of power, but like, they're not popular and people want them to have less power and want workers to have more wages and want workers to be empowered in a union. So the idea is there, the policy is there, the support is there. We have a good solution. Do we have great leaders?
- [40:33]
Robin
No, not at the moment.
- [40:35]
Katherine
But leaders are replaceable and our federal.
- [40:39]
Robin
Laws wouldn't preclude, like, as you were saying, there's places doing this at the state level demonstrating success in this at the state level could go a long way.
- [40:47]
Katherine
Yeah. And maybe it'll take a while to get there. But I, I think there is a deep level of optimism for me for having a worker and union based solution going forward that is very palatable to many people that would make a massive difference in our economy. And coming back to the same problem of like, our elected leaders are kind of crap. Like, well, that's been a problem for forever and I have a lot harder time being optimistic when there's not a clear solution in front of me.
- [41:16]
Robin
How does this get implemented? I mean, is this a new National Labor Relations act or is it just a guidance from the Department of Labor to the states?
- [41:26]
Katherine
I think preferably it would be national legislation. But states are taking the initiative to come up with their own sectoral agreements that are coming from worker pressure. And I think that, that employers are brought to the table when they realize how much better it is to be at the table with a person from the state of California on a wage board versus the legislature of California. That's the thing. Like employers have to see it to their advantage to neutralize legislatures who are more active in this area. So this is why you need federal legislation, because not every industry or state is going to have a legislature that they're afraid of. But yeah, I mean, I think that's one reason why employers come to the table is that they'd rather deal with a wage and hour and working condition technocrat expert to broker an agreement than leaving it to the fate of like the clown car that are the state and federal legislatures that we have. You want something tailored that will work for you and you can't get that necessarily from now. The past 30 years have seen them incredibly good at taking all the teeth out of labor law and legislatures, but that won't last forever.
- [42:35]
Robin
But they also want, I mean, and we've talked about this before too, that there's a certain amount of certainty and predictability the businesses want and are and would probably be willing to negotiate to get right. Because as you say, when what you're doing is at the whim of state House votes year after year, or like the crazy petition gatherers at the Trader Joe's here in Los Angeles, like you don't know what your business could be facing, including a jump from $20 an hour to $30 an hour in WA.
- [43:07]
Katherine
And I think this is very appealing to businesses who are good employers. I mean, the kind of not necessarily dirty little secret. But in a lot of industries you could have a sectoral bargaining agreement and you'd have a lot of employers that wouldn't have to change a thing about how they do business. But it is bringing up their competitors to a better level where you're going to have leading employers who are paragons in terms of following wage and hour in labor law, who very much value their workforce. And they are competing with people who are like wage violators who don't pay well. And at the moment they're competing with them. But you could neutralize them and you could bring up standards for the entire industry. There's something that they would lose there. But there's also something that they would gain. Well, let's palate cleanse with chapter something.
- [43:57]
Robin
Yeah.
- [43:58]
Katherine
Executive orders.
- [43:59]
Robin
Executive orders.
- [43:59]
Katherine
Robin, after you.
- [44:01]
Robin
Yeah. So we got this executive order from Rich, who I'm going to shout out again in a second, who's also a spiritual sponsor for us this week.
- [44:09]
Katherine
Oh, my God.
- [44:10]
Robin
I know. Rich Gadotti of Midland, Michigan. Thank you so much, man. But he also sent a great executive order, and it said no corporation or company should receive a tax cut or government contract if any of their employees rely on public assistance. If you don't pay your workers living wage, you don't deserve benefits from the government. This could be a rule for all I know, but it's. It's not checking your head anyway.
- [44:34]
Katherine
It's not a rule. Yeah, just ask Starbucks.
- [44:37]
Robin
Do you think they have government contracts?
- [44:39]
Katherine
Oh, they don't have government contracts. Oh, but is it government contracts? Receive a tax cut?
- [44:44]
Robin
He said, well, yeah, I guess any. Everybody receives a tax cut. Maybe like a tax credit, like a re. Like a research. I mean, everybody gets the tax cuts.
- [44:53]
Katherine
This has been a pet project of mine for a while that I think Rich would appreciate. I wanted to do a map of. Of PPP loans and corporate tax cut rate to child labor violations because a lot of people who. I've done like a cursory because, you know, they list child labor violations. It's by the location. And I went through one day and I looked up like five and two of them. I found their PPP loan. So not only did they get a PPP loan in the pandemic and not have to pay it back, but like two years later, they were employing children. And I'm like, this Should I wish. I pitched it to every journalistic outlet I had contacts at and nobody did it. Maybe it seems kind of vindictive. Maybe that's my style. But yeah, Rich, I think we should have. You should have to do like a. Oh, okay. Well, I have now a related executive order. So I think we ought to come up with some kind of like. Speaking of the massively long road trips that Robin and I have embarked on recently, I think we could use billboards a little bit more effectively because billboards right now, I don't know if you've driven on 1500 miles. My assessment of the Southeast would be it's personal injury lawyers, sex shops, and Jesus.
- [46:04]
Robin
Oh, really? I get a lot of casinos in Jesus.
- [46:06]
Katherine
You got casinos in Jesus. We got a lot of sex shops and then. And then. Jesus. In personal injury law, I think we ought to have Some billboard apportions where if you violate labor law and in particular child labor law, the nearest billboard has to say what you did. So just. It's almost like the sex offender registry, but just a little bit bigger. It's like a billboard with like a down arrow that says like this Starbucks was found in violation of the law by the National Life Relations act. Where like this.
- [46:39]
Robin
It's like a scarlet letter kind of situation. Is that what you're.
- [46:42]
Katherine
Yeah, a little bit. Especially if you're a repeat offender. Maybe just like on the door there's a sticker that says like, just so you know, this shop doesn't have to necessarily be a billboard. I've just kind of got billboards on the line.
- [46:54]
Robin
I'm sure they do this where you do where you live, that they have grades for their food safety. So why not for their labor safety?
- [47:00]
Katherine
Oh yeah, I definitely put like a big pink sign like you're legally obligated after you have a child labor violation. Too bad. Labor law was written a long time ago and we don't care about it. So you had to pay all of like 15 bucks for that kid you kept locked in your place for two days. But we're gonna put a really big sign on the door that says you use child labor. Violation of the law. I feel like that's. I, that is my executive order.
- [47:22]
Robin
It's been 30 days since our last child labor. Child labor violation.
- [47:29]
Katherine
But I would do it for wage an hour too. I would do it for we stole wages on this date. Just put it up big time. And then if it's like a place where customers don't. I mean, I feel like if, then if you had like a, a big sign for the billboard would just go for places that didn't have customers come in like a warehouse. Oh, God. Do you know how chilling it would be for Americans if we put a sign above every warehouse at number of people injured and killed on the inside? It would lead to a very. I think, I genuinely think people don't understand just how dangerous some workplaces willfully are in violation of labor law. And I don't know, I feel like we have a vindictive spirit in this country. Certainly we have like a self righteous bent.
- [48:10]
Robin
There you go.
- [48:11]
Katherine
So like, so why not play into that for the sake of better workplace safety. Like billboard a warehouse four miles down this road has killed three people. Yeah, I mean, you just.
- [48:26]
Robin
Okay, that's an uplifting executive order.
- [48:29]
Katherine
I'm just saying there's lots of room for positive change.
- [48:36]
Robin
Okay. And Spiritual sponsors. Like I said, we have. Rich was our spiritual sponsor this week. He joined us on Substack as a spiritual sponsor. But my personal spiritual sponsor this week is barbershop patter. So I recently. My. The woman who cuts my hair was sick, and I needed to get my hair trimmed. And I went into a barber shop near me, which is not normal place I would go. But I said, hey, can you just clean up my neck and over my ears? And I got to listen to the guy. He was working at the next chair talk about baseball. It was Dodger baseball went back to before the Dodgers even left Brooklyn. And I could have listened to it all day. And I wanted to record it and just play it by my bed at night to, like, lull me to sleep. It was so. So comforting. Yeah. And I. I was walking by that barber shop yesterday, and I was like, that was, like, the best. And just remembering it, like, lowered my pulse rate maybe 10 beats a minute.
- [49:34]
Katherine
That's lovely. My spiritual sponsor for the week is garage door openers. I have been in apartments or, you know, houses that were converted to triplexes or my own house, but with street parking. And for the first time in my life, I have a garage that has opened up with a little clicker that lives in my car. And I gotta tell you, I have never felt wealthier or richer in my entire life. I am like, watch out, here comes the queen. Just gonna hit this little button, and I'm gonna take my car back to the house. It has. It's not something I've ever like. It's not like I just, like, laid there on the couch in D.C. thinking of, like, how deeply I wanted a garage door opener. And then, like, within a week of having the garage door opener, I was like, I will never go back. This is truly amazing.
- [50:28]
Robin
I really hope that the woman who's positioned to buy our house in Spokane doesn't hear this. But after living there, I was like, if I ever have to live in Spokane again, we need a garage. Because, I mean, you didn't have to scrape snow off your car.
- [50:41]
Katherine
Oh, I did in Wisconsin.
- [50:43]
Robin
My car. Did I ever tell you my car got frozen shut in Ohio, like, the doors and everything froze. Huge snowstorm on the east coast, freezes in southern Ohio. They canceled classes for a week because we dropped so much snow. And then it turned so cold that it was dangerous to be outside. So they didn't even want the students walking to class. Class. And my car was out on the street, and even once I dug it out, the doors would not open. And I got that Deicer would not open. I opened the trunk, flattened out the seats, crawled through the car and started it to warm it up so that eventually I could open the doors.
- [51:20]
Katherine
Everything you're saying is my absolute nightmare. So that's why I'm like, the hail falling right now, I'm like, look, looks good, doesn't it? Doesn't it just warm your heart? Pieces of ice falling from the sky in June in Houston. Like, I'm like, this makes perfect sense. I love this. Whereas, like, any amount of snow, I'm like, well, I'm going to hang out inside and not leave until it's gone, because if I try to walk or drive, I'll die out there. At least I know that when it comes to winter, I'm soft as hell.
- [51:54]
Robin
All right. That right wraps another episode of Optimist, Economy and Weather Report.
- [52:02]
Katherine
We like to end our show by thanking our two producers, audio and visual, Andy and Sophie, or Sophie and Andy, my b. Thank you so much. And can I. That's just like, another thing I said in the show that you'll have to fix. But I trust you. You're very capable. We would not be able to do the show without you. And of course, another shout out to all of the sponsors, sponsors who have helped the show. We would not be able to do the show without you.
- [52:24]
Robin
Thanks so much.