Friday, April 13, 2018

Poverty Pays

When I moved from Seattle I had no sense of poverty until I moved to Nashville and yet the two cities parallels cannot be ignored.

The reality is that during my exchange with another Battleax last week, a Teacher no less, she was sure that Nashville Teachers made the most in the State (nope), that Tennessee was only one of two states without a State Income Tax (nope) and was sure that she knew everything about everything. I had quit listening at that point and am learning the dance away move to extricate myself from these type of conversations.

The differences, however, are extraordinary and the schools are by far superior in comparison to what I experience here.  The infrastructure is always a debate but again the reality is that unless an earthquake hits the reality of living in Seattle has far more superior forms of transportation from public to private, be that car sharing in addition to ride sharing.  There is a city core with a movie theaters, retail and markets.  The city hub exists and in turn is vital to its economic core.  Amazon is located in the heart of the city and in turn Microsoft the suburbs so even when one goes Eastside there is no shortage of "city" like ambiance and services. 

Nashville is Vegas. It's downtown in the middle of massive gentrification is of course confused as to what that means.  Hotels are being built at a rapid clip and with that expensive overpriced condos that are for whom as anyone living in "Downtown" Nashville would have to put up with a lack of options and real social issues that include a small homeless population that lives in front of the library and the crime that is the result of the bars and the problems they bring.   A city surrounded by massive housing complexes and in turn rising crime from many of the youth that live within.  I live right on the periphery of downtown and it is something to see when I pass going to and from home of a day.  The situation is so bleak that even the bar owners are starting to raise alarms about the violence and dangerous conditions that included a man carrying an unconscious drunk woman while Police stood by and did nothing.

And the reality is that half the developments lie or put out Press Releases that the media latch onto and do little to no verification or authentication of claims about the long term viability and businesses attached to the development.  Such as this one  the Nashville Yard as once again proves that if you have the money and some celebrity name attached that is all that matters.  Because since that announcement things have changed and whoops well it will all work out. But the bullshit is amazing I don't know what I like more, the comparison of Nashville to Berlin or to New York.  Its all good.

It will build a 4,500-capacity music venue, a movie theater, boutique hotel and a bowling facility, among other yet-to-be-announced entertainment offerings. Those are expected to open by 2021“We talked about Regal Cinemas initially but that was perhaps a bit premature,” Michael Roth, AEG’s vice president of communications, said about the theater. “We are speaking with them, in addition to other theater operators, and will be making an announcement when we finalize a deal.”

AEG will model its site on similar previous mixed-use entertainment projects, including L.A. LIVE, The O2 in London and Mercedes-Benz Platz in Berlin. 
"We think Nashville, like Los Angeles and London, is an incredible location to develop an entertainment district anchored by a live performance venue," Roth said. "The magic is creating an entire destination with the overall plans for the district. This is definitely going to be one of the places to be experienced from the day it opens."
San Diego-based Southwest Value Partners bought the property for $125 million in 2015 from Lifeway Christian Resources. The developer has worked with community stakeholders for years to develop attractive design plans and is now shopping those plans to potential tenants.

The local newspaper covers no national or international news. The front page is littered with sports, some small local events and tons and tons of food stories.  If you need to know where to get the best fries then The Tennessean is your read.  But articles on the Schools and the contentions Board meetings with the Director over the budget shortfall, no.

The transit referendum however has been massively covered, debated and discussed as getting busses and light rail are way to modern and costly for the working poor that live and work in the City and they are being pushed out to the area where the long range plans for said transit is non existent.  Even the small tax added to sales taxes is a contentious issue when a State like Tennessee is as regressive with its tax base as is Washington. It is there where the two states collide.

The wages here, however, again is where they divide.  The reality is that a stronger minimum wage law, a booming high salary range economy that enable those who do live and work in the city have larger disposable income. True rents are the highest in the nation and in turn has led to some of the same issues that face Nashville there is a transit system in place that is affordable in which to commute.  Here some moron wants to build a double decker highway with self driving cars, it's the Jetson's meeting Star Wars.  I have never in my life seen or heard the inanity and insanity I hear here.

But the reality is that when you are poor here and you are poor in Seattle there is little difference in how it affects you when it comes to sales taxes, property taxes and other additional taxes for such things as Soda, Food, Cigarettes, Liquor, Yoga or Services, Car Licensing, Business licensing and other fees in  which in each city have their own to build a revenue base. And that is what disproportionately affect the poor.

In Seattle they broke it down in this article to explain how an individual making 25K annually is taxed.   The irony is that wage is only if one works part time as the minimum wage currently is $12/hr.  In Tennessee that is full time work as we follow the federal guidelines and since many jobs here are hospitality based those in Restaurants are nowhere near that minimum. The median wage is 65K in Seattle and 45K here.  That is again a reflection of education and of course the tech industry which has a strong presence.  There is a strong manufacturing base here in Tennessee, however, they are non union and in turn wages are much lower than those made at Boeing that still has a strong presence in the region.

Wages are an issue when it comes to employment. We in the United States are at "full" employment with a less than than 5% of the working age unemployed. I find those numbers off putting as it means those who are able and willing to work in a strictly defined cohort.   But we know that many are underemployed, working way past retirement age and in turn are "self employed" via the gig economy or contracted work, often from their previous employer. Wage growth despite that has remained stagnant and that is again by intent.

How the American economy conspires to keep wages down

Gabriel Winant
The Guardian UK
Friday, April 13, 2018

The economy is growing but our paychecks are not. That’s because employers have, over decades, built a political apparatus to hold down pay

Expanding economy, stagnant wages: ‘To call it a conspiracy would be only slight embellishment.’

When unemployment goes down, wages are supposed to go up. That’s just supply and demand. Quite puzzlingly, though, this mechanism seems not to be working today. Unemployment stands at a modest 4%, but paychecks aren’t growing. Although today’s is the best-educated workforce in history, employers just insist that workers need more training.

In other words, they’re gaslighting us. Meanwhile, over decades, employers have built and maintained a massive collective political apparatus to hold down wages. To call it a conspiracy would be only slight embellishment.

The symptoms of the problem are not hard to miss. In February, for example, the American economy posted its biggest one-month jobs gain in a couple years, but wage growth stayed stalled out. For months, economists and financial journalists have been puzzling over the question, as Bloomberg put it, of “why the economy grows but your paycheck doesn’t”.

Economists will tell you that wages generally increase with productivity – that you’re paid in line with the value of what you do. This was credible from the end of the second world war to the 1970s, when productivity and hourly wages rose almost perfectly in sync. But according to research by the Economic Policy Institute, from the early 1970s to 2016 productivity went up 73.7%, and wages only 12.3%.

Similarly, there used to be a positive relationship between stock prices and wage increases. But some initial signs of wage growth in February sent the market spiraling over inflation fears – until it became clear that the reported wage gains were all concentrated among top earners. Then everyone calmed down and stopped selling.

Meanwhile, the Federal Reserve just announced that it’s taking the next step in its plan to raise interest rates. This will suppress wages to prevent inflation, although inflation is minuscule and wages aren’t showing signs of life.

Another apparent culprit is what’s called “monopsony”. Monopoly occurs when sellers are so concentrated that they don’t really have to compete. Monopsony is when the buyers – in this case, employers – are concentrated.

A recent paper from the Roosevelt Institute found that the average level of concentration in labor markets is 45% higher than the threshold for “highly concentrated” markets used by antitrust regulators. If the government went after employer monopsony the way it does other kinds of markets, regulators might have their hands quite full.

What’s worse, as Alan Krueger and Eric Posner pointed out in the New York Times recently, one in five workers with a high school degree or less is subject to a non-compete clause – a tool for employers to push wages down by forbidding workers from getting jobs with their competitors.

Work is intrinsically political. In return for your wages, you’re supposed to submit – not once but every day

Many major franchises also forbid their franchisees from hiring workers away from each other. So a McDonald’s on this corner isn’t allowed to hire away workers from the McDonald’s on the other corner by offering 25 cents more. (Such rules were a classic tool of white landlords in the Jim Crow South to keep down the pay of black sharecroppers.)

And even employers that don’t have such a commanding position can still hire workers through contractors who do. Temp agencies, for example, can function like bottlenecks, forcing workers into monopsonistic labor market conditions on behalf of smaller, less powerful employers.

We tend to think of employment as a market interaction: supply and demand meet to set a price, and that’s the wage you get paid. But work is much more than this. When you buy bread, there’s no other connection between you and the baker. You take your loaf and go home. But when you sell labor in the labor market, you’re entering into an ongoing power relationship. In return for your wages, you’re supposed to submit – not once but every day. It’s not just economic. Work is intrinsically political.

Typically, we enter into economic relationships by ourselves. But political relationships quickly become collective. As we’ve seen, employers have a vast collective apparatus at their disposal: the stock market, the Fed, antitrust and employment law, just to name a few.

But, defiance can travel and become collective too. For some years, for example, unions have had success winning raises for low-wage workers politically, rather than at the bargaining table – through direct ballot initiatives, by putting pressure on Democratic politicians, and by getting new laws passed. (If the federal minimum wage had kept pace with overall income growth, it would be three times higher.)

Workers have taken heroic risks to make a point – in the fast-food industry in particular, where employer retaliation is a given. And cities and states across the country have responded by passing minimum wage hikes.

Today, the supreme court is weighing the question of the collective political power of workers. In the Janus v AFSCME case, an anti-union corporate group is seeking to take away the power of public sector unions to collect money from all workers whom they represent.

The anti-union side argues that such fees violate workers’ free speech rights by compelling them to pay for representation that’s of an essentially political nature. As Justice Anthony Kennedy argued, public sector unions will always advocate “for massive government, for increasing bonded indebtedness, for increasing taxes”. Kennedy’s point is that these aren’t just economic goals; such workplace bargaining affects public policy.

Somewhat wanly, the state of Illinois (defending the fees) argued that if unions don’t have the right to collect this money, the workplace will become unstable and conflictual. It didn’t seem like a credible threat. Then along came the West Virginia teachers’ strike and the chain reaction it ignited. The improbable outbreak, endurance, and triumph of the teachers’ strike in that state has inspired underpaid educators in Kentucky, Arizona and Oklahoma to take action for themselves.

All these are states where teachers and underpaid and fed up, and where the formal power of their unions is quite limited. But in West Virginia, the teachers figured out how to win a long-delayed raise anyway: realizing they were irreplaceable, they shut down the schools for almost two weeks, and secured a 5% pay bump – not just for themselves, but for the state’s whole public sector.

In West Virginia, the legislature had to pass a law, and the governor had to sign it, to give the teachers their raise. Oklahoma has now done the same, and passed its first tax increase in decades to fund the raise. These workers, in other words, are not just engaging in bargaining: their strikes are political in nature, and they are shaping public policy.

The political power typically enjoyed by employers is generally experienced by workers as fear: fear of harassment, favoritism and wage theft, fear of joining a union or speaking out, fear of the consequences of injury or sickness, fear of the risks of asking for a raise, and beneath these, the fundamental workplace fear – of losing your job.

The current of fear running through the workplace is one of the best ways to tell there’s something more than a market transaction happening there. But fear can go both ways. In West Virginia and Oklahoma, the irreplaceable teachers terrified Republican officials. With unemployment down, more of us are becoming irreplaceable every day. There’s leverage for workers there, but you have to be willing to scare your boss to use it.

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