Initial unemployment claims plunge 27,000 to below 400,000, lowest level since April

I would include in that all unionized workers as unions are a form of baby sitting!

 

Are you making the claim that most unionized workers are low skilled? If so, please explain!

 

nope .....but they are all over paid as the same job in a non unionized place makes half as much!

 

No, they are underpaid by less. To suggest otherwise you'd have to assume economic irrationaliy by employers

 

the employers have no choice......they dont agree and the workers go on strike, and the employer loses business.

 

Unions have bargaining power which enables them to take a higher proportion of the available economic rents (plus they often increase productivity and therefore wage). To suggest overpayment you have to assume that employers are irrational. They're not!

 

Over paid is over paid, skill level is irrelevant. Minimum wage has greatly helped employ illegals, for less than minimum wage.

 

Then it would be rational for employers to establish unions in their companies, yet many employers choose to close union shops and open in non-union areas.

No push back from the board of directors, no push back from the stock holders, how irrational.

 

Nope. Whilst productivity is often enhanced, profitability will fall. This reflects the desire to maintain economic rents (despite those rents being inefficient).

 

with the exception of government workers ( which have a monoploy) many businesses fail as their product is priced right out of the market....productivity or not, its hard to compete when you pay your workers 25 dollars per hour plus various beneifits while your non unionized competitor pays only 10 dollars per hour with no benefits!

 

many a factory has closed for that exact reason!

 

Many a factor has closed because of the dynamic shift in supply and demand conditions. Blaming unions is a standard aspect of authoritarianism and the disregard of how bargaining works

 

Is productivity enhanced by better workers, or more investment in automation to shed unionized employees in a struggle to remain profitable?

 

weather you agree with me or not, the main reason GM failed was because they couldn't afford all the benefits that the unions demanded of the company!

 

Given two competing companies in the same reduced market, which would close first, the one with higher profits, or the unionized one with lower profits?

The compay with higher profits, can go to zero profit to to take business from maintain market share. At the same price the lower profit company has to go cash flow negative.

Which company can reduce the work force easier, union shop or non-union?

Which company would could work out a temporary wage reduction in lieu of layoffs?

Are you sure unions have no impact on a companies failure?

 

You'd only have a point if you could apply the neoclassical definition of normal profit. That isn't possible as we're referring to bargaining over economic rents. Indeed, those rents allow numerous negative features in organisation practice (such as the use of discrimination). Note of course that the discriminator, despite being more inefficient, isn't driven out of the market by the non-discriminator.

Shot yourself in the foot here. Unions also make bargaining between worker and manager more straightforward; a rather important fact given employers will typically find semi-permanent contracts more convenient (e.g. It reduces costly job turnover and enables greater human capital investments)

Unions are blamed because of a lack of understanding of the labour market. One should of course recognise that countries with high proportions of exports as a share of GDP will typically have extensive collective bargaining practices

 

This of course makes no sense since GM's competitors had essentially the same union deals, due to the UAW's across the board bargaining.

Ford prospered under similar labor contracts. Why? Better management, lack of exposure to mortgage backed securities, which afflicted GMAC.

In addition you don't seem to understand the financialization of advanced capitalism. Most companies, even car companies, make more money on arbitrage than on net sales. That's the result of having so much cash. Walmart is a case in point. Its interest on cash investments exceeds what it makes in sales. GM was similarly situated and fell victim to the CDS disease.

Ford was more prudent and less financialized, so it surived and prospered. None of this has anything to do with union contracts. GM ceased on that when it was already in its death throes.

 

Whilst the drop in the unemployment rate is encouraging, it is rather an exaggeraton to refer to the drop as a 'plunge'.

 

LOL, ok, what is the official definition of a "plunge"?

We normally see changes in the weekly IU claims in the 10-20k range. A drop of 37k is much larger than typical.

 

I just read this.

Why are people so emotionally tied to this Obama guy - he's just another politician?

Anyway, we'll see what will happen with the economy.

One question?

How many Stimulus's and Job's Bill's and Operation Twist's and QE's and TARP's and bailouts is it going to take before the Obama Fan Club realize that maybe he and his administration (and the Fed Chairman he re-appointed) don't know know how to run an economy after all (just like Bush Jr. and his re-appointed Fed Chairman didn't either)?

How many? 2 more? 5? 10? Infiniti?

 

My speculation is that there are several reasons. Maybe unfairly blame him for the economy, many despise his policies because he proposes raising taxes on the wealthy, many I suspect don't like him because he's black.

It depends. I disagree that the issue is knowledge on how to run an economy. The fact that this administration presided over a turnaround that took an economy that was loosing 700,000 jobs a month and tanking straight for a depression IMO contradicts your assertion.

The issue is how best to mitigate the damages from the disastrous house bubble that exploded and imploded well before he took office. With a shattered real estate market and construction industry, a huge level of debt inherited from previous administrations, and the rest of the world economy in a sorry state, there are limited options available to keep the economy in a state of at least moderate growth.

Adding to all these problems is the "anti-stimulus" effect of the state and local governments, which have terminated a million jobs over the past year or so and continue to add to the ranks of the unemployed every month. Finally, the partisan divide and inability of Congress to compromise on solutions that would address the budget problems has (along with concerns over the European problems) shattered the fragile confidence that had been building (or at least stable) up to July.

Right now there is a lot of idle resources in the economy. Government spending at this point is not crowding out the private sector, and further withdrawal of Govt spending at this point will only have the effect of creating more unemployment, and less confidence. Therefore, I believe that while we need a plan for budget reduction for the future, now is not the time to effect massive cutbacks in Govt spending.

Since you claimed that the current government "does not know how to run an economy" I'd be interested in your opinion as to what actions would qualify as properly running one in these circumstances.

 

Uhhmmmm.....Chrysler also files for bankruptsy protection and ford although did not had its profits drop by some 90%......so don't kid yourself!

 

Umm, no offense, but I asked for a number...not a campaign speech.

And the CBO confirmed that the Stimulus Bill only pumped about $140 billion into the economy (at most) before the unemployment rate started to drop.
And there is no way $140 billion single-handedly reversed a plummeting $14 trillion dollar economy.
The reversal was probably the economy hitting it's 'natural' bottom and possibly the effects from the massive $1.6 trillion QE1...which was instigated before Obama was President.

 

I have no idea if, in regards to economic matters, that an official defintion of 'plunge' exists. But to describe a minscule drop in unemployment as a plunge is a gross exaggeration. It is certainly encouraging, but a plunge it is not

 

I disagree with your assertion that a 9% drop in the IU jobless claims is "miniscule." To describe a 9% drop as miniscule is a gross understatement. It hopefully will go lower, but "miniscule" it is not.