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Yearly Archives: 2016

Labor Unions are Inevitable

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Labor Day is brought to you by those who brought you the weekend – Organized Labor.

When I worked in Germany for a short time in the 1990s, labor relations often came up. Some of my colleagues were envious of the US system while most hated it. All of them, however, had a term for what they understood our core principle to be – “Hire and Fire”. The idea of an “at will” employee with no job security in law and no loyalty by tradition was alien to Germans.

Compared to the nations in the developed world which we compete with, our position is unusual. It’s a bias at the foundation of our system – a natural outcome of the demand for a flexible workforce. This is also likely to change as more and more skill is needed to do the jobs of tomorrow.

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Labor Day 2016

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Labor Day. For most of us, it’s one last picnic as the seasons change over. It’s one last chance to look back over the hot, lazy summer to reflect on where we’ve been and where we are going.

What it’s really for is Labor. Rather than give workers a May Day holiday, the deep suspicions and fear lingering after the Haymarket Riot made politicians wary enough to put the official day clear on the other side of Summer. The US, and later Canada, decided to go it alone in our celebration. Some things never change.

The two of these facts have a lot in common this year as we look back from what is clearly a turning point in the economy. The glass is indeed half-full for Labor – or, if you’re not so optimistic, half-empty. Jobs are being created, if slowly, layoffs are at an all-time low, and wages are finally beginning to creep up. What’s ahead of us? If this keeps up it may surprise just about everyone that a serious labor shortage is in the works – indeed, there already is one in some industries. That’s worth celebrating even more than the end of Summer.

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Ireland’s Big Payday

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In a victory for corporate taxes everywhere, Apple has been ordered to pay as much as €13 billion ($14.7 billion) in back taxes to Ireland. Or, perhaps, in a loss for workers everywhere, a reluctant Ireland is forced to go back on its agreement with Apple to base its European operations there in exchange for much needed tax breaks. Or, perhaps, corporate tax harmonization has been dealt a terrible setback as the European Union (EU) has claimed their turf in what should be hammered out through an international agreement.

What we do know for sure is the massive penalty, the largest ever imposed, is a big blow to Apple, amounting to …. around 7% of their massive $200 billion cash reserves. Unless, of course,  the Republic of Ireland can justify a smaller bill, which they are very much keen to do. So nevermind.

Like corporate taxes themselves, today’s big story is completely negotiable and dependent on your perspective. There will be more to this, but nothing even remotely obvious will happen in the immediate future.

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Racists Anonymous

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Not many years ago, it was fashionable to say that racism was dead. “We live in a post-racial society now,” many people said, “And we don’t have to worry about that any longer.” Many white people, that is, said that. Non-whites knew perfectly well that racism has always been the disease at the core of our nation. The hurtful words were confined to private conversations and public dog-whistles of code didn’t fool anyone kept down and apart by racism.

With the rising voices of racism in the last year no one says that anymore. “At least,” in the words of Mike Yard, “We know who the racists are now.” The First Amendment does work. But for all the pain this open racism causes, are we any closer to getting past it? Only if openly acknowledging our racism is the first step towards healing.

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A New Fed?

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The annual Jackson Hole conference of the Federal Reserve starts today! If you’re a little under-enthusiastic, it’s OK. There’s a lot going on, what with the State Fair, back to school preparations, and the fact that hardly anyone cares what the Fed is up to.

Except, that is, more people all the time. The mysterious workings of the Fed have come under a lot of scrutiny lately – from left, right, and center. The most powerful bank in the world does indeed control more of our destiny than many otherwise free people would like, and that’s worrying.

The Fed knows this, of course. They also know that in an era of dysfunctional government and globalism they have more power all the time – as well as more responsibility to get it right. Will there be a new, more open Fed?  The answer, a very strong “Yes!” may surprise you.

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