Tuesday, June 28, 2005

A Response to Michael Currie's Article on Safeway

Note: The original is here. http://thunderbay.indymedia.org/news/2002/07/1117_comment.php

"The Pricing Of Unskilled Labour

Let's be honest. Safeway employees' work is unskilled labour, and that's not valuable, since anyone with a few minutes of training can do it. If it was difficult to get cashiers, Safeway would willingly pay more for them. "

1) That's because Safeway designed its entire procedure, in light of Taylorist goals and methodologies, to produce unskilled workers in the first place. For someone to turn around and apologize by saying that this is unskilled labor is the worst form of apologia.
2) So things should be paid by how much skill it requires?
i) Fair enough. Einstein's theories should have earned him billions. Running most management positions in reality could be done with very little experience and should be paid very little. Mothering, something that requires tact and skill, should be paid quite a bit. The fact that Einstein was poor, mothers and fathers get paid nothing for mothering and fathering and CEOs and managers are rich indicates that this cannot be true.
ii) In fact, not fair enough. The only way to insure both equity and economic efficiency is to reward the effort and sacrifice exerted in working, for that is the only thing someone can control.

"At the same time, it would be irresponsible of a company to keep jobs when they aren't necessary. Moreover, what kind of job must one be doing if it can be elimitated efficiently? Not a very interesting one,"

Then why are Safeway laborers striking? Because otherwise they won't get money. It may surprise some bourgeois folk, but not everyone (not even the sons of the privileged, like myself) gets to work at jobs they like or find interesting. Some work at crappy jobs because, through no fault of their own, they have no alternative.

It would be irresponsible of a company if profit is what we want. If we want to help people, something else is required. The question becomes, what does efficiency actually mean?

"Of course, these unskilled labourers want to cling to their cushy jobs at all costs - by pointing the "strike" gun to management's head, they can get paid much more for their jobs than it's actually worth."

How is what it's "actually worth" determined? Answer: By what management pays them. This is the problem of capitalism: Worth accrues to whatever bargaining power one has, not any kind of objective "worth" (of course, it's a basic principle of economics, one this writer ignores with the eloquence of a man eating his own spittle, that "value" is inherently subjective). The union increases bargaining power; thus, its workers get paid more. Whatever you may think about this, it is the only logical outcome of the system.

Want a more objective standard? Fine. Minimum wage in the US is 6.25 an hour or less in many states. It should be anywhere from 12 to 20 dollars if it tracked productivity. It stopped doing so in the 70s not by any miracle of the market but because of conscious choices to undermine Bretton Woods.

"One safeway employee was heard on the radio saying she was paid over $19/ hour. Many people with several years of university education make about the same doing highly skilled work!"

So raise those wages too. Considering that the price of living also goes up, that sounds entirely fair to me.

"This is an example of a union monopoly applying its unfair advantage."

Unfair according to who? What advantage? Companies have all the power in the world. Not too long ago, companies were hiring private mercenaries to kill them: see http://www.nationmaster.com/encyclopedia/Labor-history.

And even now, the war of the state against the worker continues: http://www.commondreams.org/views05/0407-24.htm

"Safeway workers: Have some self-respect! If you want to be paid more, get skills and find another job."

Hmm. Sounds like a very human and compassionate outlook. "Do what I tell you because of my preconceived notions." How about they fight for whatever wage they can get?

Of course, I imagine many of them would love to have skills and a better job... so why aren't you haranguing the employers who won't hire them or the schools who keep them out?

And further, why are some skill sets rewarded and others punished? I offered some examples above. Answer: Power, power, power.

The fact is that, no matter what you think, this is wholly predictable behavior given the market. If you want to change capitalism and the market, be my guest (and my ally).

"Management does indeed have "a responsibility to the community" - and it can only discharge that responsibility when it is prosperous, efficient and profitable."

That's laughable even according to the most basic economic theory.

One way to increase profits is to externalize costs onto others. But that doesn't help the community, it hurts it.

Or they could lower wages and benefits. But that also doesn't help the community.

Or they could raise the price of a product or reduce the cost it makes to produce it (usually, its quality). But that also doesn't help the community.

In short, capitalism rewards producers for doing the opposite of what producers should do in a rational economy. The only, very limited, hedge against this is competition.

"That "Safeway had $200m in profits last year alone" does not justify huge salary increases, or even preclude layoffs."

And why?

"Indeed, workers were not laid off despite having profits, they are laid off in order to have profits. Layoffs are unpleasant for everyone, but not evil - it's firms optimizing their operations, and becoming better at
serving customers as cheaply as possible."

But those customers are also workers somewhere else. Further, these companies often raise their prices or raise salaries for management (in fact, as studies have shown, these salary boosts for management have LITTLE CORRELATION to performance). When wages go down, the whole market is affected, and not in positive ways.

And if those Safeway workers were paid more, they could pay elsewhere.

The fact is that, as Dani Rodrik has shown, less inequity means more growth rates and vice versa. The whole of economic history from the Great Depression to the 70s proves you totally wrong.

In any respect, why is the consumer's right paramount?

"Profits aren't evil, either - and they don't necessarily go "straight into shareholders' pockets". Any company needs to make profits to invest more capital in itself and therefore improve wages and lower prices. "

That's true. But ask yourself: Does Big Pharma do this, for example? Apparently not, since their R&D budget is LESS THAN THEIR PROFITS. All thanks to state intervention on their behalf.

"Indeed, it is true that Safeway "[concerns itself] solely with profits, workers are treated as an expenditure." A company is should not prioritize employees over its customers - a firm's only purpose is to provide its goods or services as efficiently as possible."

Says who? In fact, a firm is designed to make profit, even if that means providing goods or services less efficiently or effectively. In any respect, why don't companies have obligations to those sacrificing time and energy for them?

Even the World Bank agrees unions can be good: http://www.aflcio.org/issuespolitics/globaleconomy/ns02212003a.cfm
The rest of the article is rebutted above. All wholly ridiculous.

(Note: I may find some specific data on Safeway, but forgive me for thinking it won't be necessary).


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