Happy Holidays

John Samuelsen III

We are endorsing and recommending John Samuelsen for your vote.

Why? John Samuelsen’s activities as well as his constant service towards members of TWU Local 100 has benefited TWU Local 100 which is part of the labor movement. There is no denying that TWU Local 100 members have benefitted from John Samuelsen, especially those who came back from layoff. It is true he upheld the principle 'an injury to one is an injury to all' - thus he has earned your goodwill.

We are aware you are a proud member of TWU Local 100 and that you wear those colors faithfully to announce to the world for everyone to see that you support TWU Local 100 in moving forward. We are also aware that your daily work is in solitude however by being a member of TWU Local 100 we are in this labor movement and we’re going down this path together.

Now is your time to become more than just being a member of TWU Local 100 by being an active member through your vote by mailing your ballot which will reflect your desire to help TWU Local 100 members in securing their middle class. There is a short amount of time remaining to get your ballot mailed. Therefore do not delay this act which may benefit TWU Local 100 members.

As a result of John Samuelsen’s leadership TWU Local 100 has been enriched. For instance there has been an increased retention of members in good standing or outreach to members in their daily struggles by aiding and overcoming those hurdles. TWU Local 100 needs to prosper by moving forward as well as securing for all of us the middle class. We believe John Samuelsen’s actions have earned your goodwill.

John Samuelsen II

We are endorsing John Samuelsen because we believe in his enthusiasm, attitude and open approach which make him deserving of your goodwill.

John Samuelsen is always giving his time to serve others. This is something that wasn't expected of Samuelsen to do for fellow members. As you are aware John Samuelsen is faced with some unexpected or unusual situations concerning our livelihood and our future and he has performed well. Therefore that earns him your goodwill.

He has not lost sight of what is important to you, John Samuelsen constantly thinks of his fellow members and what is in their best interest. As well as ways to allow us to walk away with confidence and pride among the labor movement.

We believe John Samuelsen’s performance has gone above and beyond expectations in the labor movement. His relationship with the staff and others is always appropriate and professional within the labor movement.

John Samuelsen I

We are endorsing and recommending John Samuelsen for your support.

John Samuelsen has consistently delivered results to the benefit of all of us. A key example of his ability is getting our own union hall which will benefit all TWU Local 100 members. When TWU Local 100 needed steady hands to lead it in the future without drama, John Samuelsen did what was needed to be done. 

John Samuelsen’s strong performance is really self explanatory, he takes TWU Local 100 membership livelihood very seriously. He is dependable, has a good attitude, has a pleasant demeanor, and he is available to help his fellow members when needed.

To benefit TWU Local 100, John Samuelsen has installed a vibrant interchange with other civic organizations to build relationships and networks to exchange ideas that are anchored on the basis of what is in the best interest of the TWU Local 100 membership.

John Samuelsen deserves your goodwill, you have to show that you will formally vote for him. Take action to see that he is properly recognized for his many years of silent but outstanding service in the TWU Local 100 and labor movement.

Human capital V

Another type of cost of attending college is the opportunity cost of the earnings from work received by the high school graduate that the college student could have been making. The size of this cost depends on the earnings that a high school graduate is able to make and whether or not the person in college works full-time or part-time while in school. The opportunity cost of attending college may extend several years beyond age 22 if the college graduate begins work at a lower salary than what the high school graduate is earning at age 22. This might well be the case since the earning of the high school graduate will have benefited from four years of experience and training.

Human capital IV

The benefits and costs of attending college are readily identifiable. The direct or out of pocket costs of going to college include payment for tuition, books and other fees. The cost of room and board are not counted since these are incurred even if the person is not enrolled in school. The amount of the direct costs depends on whether the individual attends a state- supported school or a private school. In addition whether he or she obtains a scholarship or tuition waiver.

Human capital III

To make the discussion more attractive, attention focuses on one particular type of human capital investment - whether or not to attend a four-year university or college. The principles we point to here apply to investment in all types of education and training.

Should an individual attend college? From a human capital point of view the answer depends on the monetary benefits relative to the costs. There are two different strategies to the precise nature of these benefits and costs. Strategy one is to finish high school and then begin full time work at age 18 working continuously until age 65 which results in the age/earnings. The second strategy is to attend college for four years from age 18 to 21 then work continuously from age 22 to retirement at age 65.

Human capital II

When is an additional year of education a good investment? The quotation from Adam Smith provides the answer, “whenever the increased benefits both pay back the initial costs and yield a rate of return at least as high as alternative investments of one’s time and money”. A major contribution of the human capital theory developed by Becker and others is to take this insight of Adam Smith and show how it can be used to measure the private and social rate of return not only to education but also to numerous other labor market activities.

Human capital I

The types of human capital investments that have received the most attention from labor economists are education and training. While schooling is partly a consumption good for many people (that is individuals pursue an education for the pleasure and satisfaction of experience) it is also treated by most individuals as a clear investment in their future. Every college student for example is aware of the costs of pursuing a college degree. These include the direct costs of tuition, books and other educational expenses and the indirect or opportunity costs in the form of forgone earnings from work that are sacrificed to attend school. Counter balanced against these costs are the anticipated benefits of increased earnings, more attractive employment opportunities and higher status and social prestige.

Is education a good investment II

The answer to this question is more complicated because it requires a comparison of both the increased earnings from additional years of education and the additional costs. Although a college education still opens the way to a higher paying job for most people the return to this investment is being squeezed both by the rising costs of obtaining the degree and by the relatively smaller wage advantage that a college degree now commands in the market.

Is education a good investment I

Is there any truth to the old adage, ‘If you want to get ahead then get an education?’. Many graduates now have joined the unemployment ranks and would have a knee jerk response to this economy.

Is education a good investment? At first glance it would certainly seem so since the earnings a person can expect to obtain in the labor market increase rather markedly with higher levels of education.

Competitive market?

How closely does the labor market for the following types of workers approximate a perfectly competitive market? What if any are the major imperfections in each market?

Does a migrant farm worker get competitive wage rate or will he/she get whatever the farmer dictates?

Does a steelworker get competitive wage rate or whatever the corporation dictates?

Does a nurse get competitive wage rate or whatever the hospital sets?

Does a bank executive set his own wage rate - and if so why?

If we look at those who got their wages set by others then the obvious question would be why are they not able to dictate the wage rate?

Rate of pay

Every large firm has a personnel department responsible for setting specific rates of pay for each job. In performing this function, how much discretion does the personnel department have in terms of rates it sets? To what extent do outside market forces impinge on this decision? For what type of jobs would market forces leave little room or much room for discretion?

Steel plants

In recent years a large number of steel plants in Pennsylvania have closed. How can we illustrate the impact of this development on the Pennsylvania labor market? How, if at all will the labor market return to equilibrium? Is the presence and persistence of high unemployment in Pennsylvania consistent with the rest of the country?

Internal wage II

Firms often use job evaluation techniques to set precise wages for jobs in the internal labor market. Individual rates of pay for workers with similar jobs are then determined by the type of compensation system used by the firm such as piece rates, time rates, profit-sharing (which is misleading since all the profits go to share holders and upper management not blue collar) and so on.

Internal wage I

If the labor market were perfectly competitive the firm’s internal wage structure would be dictated by demand and supply in the external labor market. Many firms have an internal labor market rate of pay somewhat sheltered from outside competition. Wages  for port of entry jobs at the bottom of the job ladder are largely market determined however within the internal labor market the specific nature of job skills creates a vague in wages.

Corporations view

Driven by the need to reduce costs and increase flexibility many corporations have replaced thousands of regular employees with temporary workers and part-timers or have bid-out the work to smaller subcontractor firms. This brings two advantages - one is that the contingent workers cost less, partly because their hourly pay is often only half  that of regular employees partly because they receive far fewer fringe benefits such as paid vacations and health insurance. A second benefit of contingent employees is that they can be easily let go when the company no longer needs them in effect turning the quasi-fixed cost of regular employees into a variable cost.

Two tier work forces III

The greater economic inequality among ‘insiders’ and ‘outsiders’ is a sense that one group of workers is destined to live with a revolving door of contingent work while another enjoys the security of high pay and permanent jobs. However the management’s rhetoric is that a size able portion of contingent workers choose temporary or part-time work in order to gain job experience or more flexible work schedules.

Two tier work force II

Recently many companies are subcontracting work out that had formerly been done in-house. The USX Corporation, for example lowered the number of in-house hours of labor needed to produce a ton of steel from 10 in 1982 to 2 in 2010, in part by subcontracting out maintenance-type jobs. Rather than pay a pipe-fitter a reasonable wage plus benefits the company got the same work done by a smaller company that paid its workers less than the minimum wage and provided no benefits.

Two tier work forces

Many firms driven by the need to reduce costs and increase flexibility have replaced thousands of regular employees with temporary workers and part-timers or have bid-out the work to smaller subcontractors. These practices by firms are not acceptable.

Two tier work forces

Japanese companies are famous for their two-tier employment systems composed of a ‘core’ group of permanent employees and a larger group of ‘contingent’ workers with little or no job security.

In many cases the ‘contingent workers’ are employed by subcontractors or work at home. In either case the result is something of a dual labor market structure where one group of employees have ‘good’ jobs providing high wages, extensive fringe benefits, considerable opportunities for promotion and job security, while another group of employees have less desirable jobs paying low wages with few fringe benefits and providing little if any job security.

Dual labor market III

The financial returns to years of education and experience should differ significantly depending on whether the individual is employed in the primary or secondary sector.

Two persons with identical years of education would have very different lifetime levels of income if one were hired into an entry level position in the primary sector and another were forced to work in a secondary job. Not only would the level of income differ between the two so would the rate of increase of earnings with additional years of experience. Therefore the primary worker moved up the job ladder in the internal labor market and the secondary workers’ earnings stagnated in a dead-end job.

Dual labor market II

If you believe economists then a simple question would suffice of why poverty has not been resolved till today? Why are jobs being shipped abroad? It is obvious these economists can overlook the firms in their pursuit for higher profits.

If the jobs are being shipped abroad then there are no wages, no working conditions, no employment stability, no chances of promotion and definitely no equity and due process. One wonders why they are over these facts.

Dual labor market I

Inner city workers have low wages and poor prospects because they lack human capital  necessary for high productivity and high earning in the labor market. That is the point of view of many economists, which we do not agree with since this single track thinking points the finger towards the labor. However they neglect to point the finger towards the firms. 

Then they would throw you off the tracks by claiming the solution to poverty in their perspective is improved by educational systems and job training programs for inner city residents so that these workers can leave low wage jobs and compete in higher wage jobs.

Labor market segmentation

The idea of labor market segmentation is that strong barriers to entry prevent certain groups of workers from effectively competing for jobs in a given market. These barriers may take several forms. 

One is the internal labor market which prevents workers in the external market from competing for job openings above the entry level in the firm. A second is discrimination which causes workers of certain race or sex groups to be excluded from competition for desirable jobs.

Segmented labor

Segmented labor market theory is one of the basic assumptions of the perfectly competitive model which is that all jobs in the labor market are open to competition. This does not mean that a waitress can quit her job and immediately become a doctor or that an unskilled laborer can effectively compete for an ironworker’s job since each person’s sphere of competition is limited in the short run by his or her education, job skills, geographic location and mental and physical abilities.

The presumption of competitive theory however, is that the walls separating labor markets are relatively porous so that workers given enough time to acquire the training or to move to a different city can effectively compete for jobs on an equal footing with persons already in that labor market.

Gain sharing

The central feature of gain-sharing is that at least a portion of employee pay is directly tied to some objective measure of firm performance such as profits, productivity growth or cost reduction.

The most prevalent type of gain-sharing program is profit-sharing which has several attractive features. First it stimulates employee job performance by giving each worker a direct stake in the amount of profit earned by the firm. Second it increases employee pay without raising base wages - this saves the firm money since cost-of-living adjustments and merit increases are typically awarded as some percentage of base wage. A third advantage is that the firm’s labor cost becomes flexible in the downward direction since the profit sharing component of employee compensation will typically fall during a recession.

Profit sharing also has disadvantages such as that in the firm it is more difficult to administer than straight time wages. In addition another disadvantage is that it must reveal all of its cost and revenue data to employees and important drawback to the management. That is what was done to the Detroit Auto industry who accepted a government bailout.

Merit pay

Merit pay plans can easily engender worker dissatisfaction if employees perceive that individual performance is not being accurately measured or consistently rewarded. One frequent outcome of such dissatisfaction is that workers choose to join the union.

Do you know who get bonuses? If you guessed higher-level management and the so called professional workers then you are right. Together we should get the cost of living.

Compensation methods

The different compensation methods reflect in part the tendency of companies to view production-type workers as a variable cost and higher-level management and professional workers as a quasi-fixed cost - in our view this is wrong.

It may be easier to administer but they do not compensate the blue collar properly due to the fact that they reward workers for time spent on the job rather than for actual amount of work accomplished.

Determining pay II

A variety of factors influence the firm’s particular kind of compensation plan or mix of plans generally payment plans based on individual output, which provide the strongest incentive for individual effort and most closely tie pay to performance. While these features would seem to be attractive to both workers and firms the use of traditional piecework pay plans has decreased which is good for a blue collar worker.

According to the management a major consideration is that piecework plans often fail to deliver the anticipated increases in production because workers collectively restrict output fearing that increased production will only cause management to raise the output quota - we here in why did you join the union agree with that.

Determining pay I

The structure of job rates provides a rough outline for the internal wage structure of the firm but it seldom completely determines it. The reason is that the firm must decide on the specific rate of pay for individual workers in each job category and the method of compensation.

Two basic types of compensation methods are used to determine individual pay rates. The first bases pay on the amount of worker input supplied to the job, the second bases pay according to some measure of output produced by individual worker or a group of workers.

The first type of arrangement commonly takes the form of time payment such as wage per hour or salary per year, while the second encompasses pay plans related to individual output group output such as profit-sharing plans.

Job evaluation

Because the external labor market cannot determine a unique wage for jobs in the labor market firms have to use some non-market device to establish an explicit wage structure. One technique that is frequently used is job evaluation. The primary objective of a job evaluation system is to achieve an internal wage structure that promotes equity and rewards efficiency while at the same time being consistent with competitive conditions in the external labor market. Most job evaluation systems have the same basic methodology. The first step is to write a detailed description of each job. The second step is to rate or evaluate each job according to one or more ‘compensable factors’ such as skill and education and so on. The third step is to add these ratings together in some way to create a total ‘job worth score.’

Based on the job worth score each job can then be ranked in the job ladder. In devising a wage structure in the future the rising prices should be a factor in the job evaluation.

Job ladder II

Given the structure of jobs and promotion ladders in the firm how does the firm determine the appropriate set of wages for a blue collar in each job classification? Usually management’s solution is to pay each worker based on the supply and demand in the external market. This supply and demand is not a good solution for wages due to the nature that it does not take into consideration the rising prices.

In our pending contract it is important that we get wages that are abreast with rising prices.

Job ladder I

The effect of a job ladder is to create an internal labor market within the firm. The internal labor market is for those jobs in the firm for which competition to fill a vacancy is limited to workers already employed within the firm. The beginning of the internal labor market is the port of entry which connects the internal job ladder to the labor market outside the firm.

If someone at the top of the job ladder retires then workers at each step of the ladder move up one rung creating a vacancy at the bottom or port of entry. To fill this vacancy the firm goes to the external market where it competes with other firms for workers at the entry level.

Crocodile tears

CED led group - Joe Campbell, Nelson Rivera, Stephan Thomas and Kendra Hill have sent out an email blast under ‘What’s up with Arthur Schwartz and John Samuelsen?’ , their underlying message was Arthur Schwartz ‘violated his ethical obligation and the law.’

In their allegations there was some sort of communication between the two in the past so that would be enough grounds to ‘not serve as a counsel to the Elections Committee for the Local 100 officer elections this year’. One wonders if that past communication rises to the level of conflict of interest, and would confer such privilege to the CED led group to demand anything. It is unclear whether that past communication rises to the level of self-dealing ‘provided support, information and advice’ charge. Also whether they will be able to substantiate those allegations. It is also not known what else they would demand and allege in August, September, October, November and finally in December.

We have to remind the CED led group ‘One wonders how come this slate is not offering anything credible or tangible that would benefit the membership? Many have observed that those above were Roger Toussaint’s beneficiaries when he was in power. During Roger Toussaint era many agreements were signed that had the intention of eliminating titles such as conductors in Rapid Transit Operation as well as the CTA position in the Station Department in which Nelson Rivera and Stephan Thomas acquiesced.’

The other side of the coin is that usually when a lawyer violates his ethical obligation he is disbarred from practicing law and his law license is yanked by his state. Now the question for CED led group is if they believe they have evidence to back those charges then they should proceed directly to New York State to get Arthur Schwartz disbarred. That would be a public service because it will protect the public and the legal profession by ensuring that lawyers adhere to the ethical standards. However instead they have resorted to The Chief and email blast which have no power to disbar a lawyer. Thus one can conclude that it is innuendo nothing more nothing less or maybe they will allege they do not know the address of where to file the complaint - here it is. 

Departmental Disciplinary Committee

Supreme Court, Appellate Division

First Judicial Department

61 Broadway, 2nd Floor

New York, New York 10006

Telephone (212) 401-0800

For those who have evidence they can present it to New York State which does reprimand and discipline lawyers from crossing the line. In this case we can surmise that due to the lack of evidence presented by this CED led group they were unable to proceed to New York State. We also know New York State had disbarred former President Richard Nixon in 1976 for obstruction of justice and Ed Fagan, a New York lawyer who prominently represented Holocaust victims against Swiss banks was disbarred in New York in 2008. It is clear New York State has the ability to disbar lawyers, now do you believe the CED led group have truth in their allegation? Or is it crocodile tears?

Wage structure II

The set of wage paid for particular jobs in a firm is heavily contingent on its job structure. The job structure is defined as the set of jobs in terms of skill and function required by the firm. The job structure in a particular firm is heavily influenced by the technology of production. If the company is an airline for example technology dictates that firm’s job structure must include pilots, flight attendants and so on. The types of jobs in a firm are not completely determined by technology however by long-run decisions of the firm such as what proportions and kinds of labor, capital and other factor inputs to use. Once these are decided and a specific plant is built then the technology of production, generally determined within fairly narrow bounds will allow for the job structure of the firm to recruit labor.

Wage structure I

The wage structure refers to the set of wage rates paid for particular jobs and workers in the business firm and the system of wage differentials that separate each job and worker from others. The work force of nearly every firm is comprised of people performing varied and distinct jobs ranging from the waitress, cook and cashier in a small restaurant to the hundreds and thousands of distinct jobs in a large corporation.

In many corporations part of the personnel function of the management of every firm is to decide what wage rate each individual in the organization will be paid. One interesting question is how the wage structure is established? Can you imagine if those personnel lived in the real world? One can only imagine. 

Raise the minimum wage VI

Has the minimum wage law achieved its objective of raising the income of low wage workers? To answer this it depends on many overlapping issues especially rising prices. By definition when the increase of goods or prices goes up by 15% percent while the wages have no raise or maybe a smaller percentage increase in the wage then it is obvious that the blue collar are not protected by the minimum wage law. 

Second this increase in income is not equally shared, while the white collar get bonuses the blue collar’s total income received would decrease.

Raise the minimum wage V

Are there winners for minimum wage law? The answer is not clear but we can see the losers - obviously the consumers who have to pay higher prices for the goods and services produced. The business firms (rhetoric) will claim that at least in the short run they will have lower profits (we know this is not accurate - management always keep the investors happy by doubling up their dividend so in turn they can award themselves bonuses).

We know that the blue collar are the obvious group of losers who have no means of coping with the rising prices due to the fact that their wages do not mimic the rising prices.

Raise the minimum wage IV

We do not agree with the point of view that a predicted impact of raising minimum wage involves wages and employment that would create an excess supply of labor resulting in a downward pressure on wages in the market.

We believe there would be no increase in unemployment that would be registered.

Raise the minimum wage III

Another point of view which we do not agree with is that in the event of raising the minimum wage there will be a rise in unemployment. 

Our reasoning concerning this point of view is that it is less than certain that some or all of unemployed workers may give up their job search by dropping out of the labor force as discouraged workers.

Raise the minimum wage II

We do not agree with the point of view that raising the minimum wage will cause a decline in employment. We know consumers will always have a demand whether it is for for gas, lettuce, tomatoes, potatoes, eggs, oranges etc.

Thus the blue collar are entitled to raising the minimum wage law.

Raise the minimum wage I

There is no question that now is the right time for Congress to act in deciding on the appropriate level of raising the minimum wage. We all know the facts for single-earner family heads and that with minimum wage sufficiently low even with full-time work their annual income may still fall far below the poverty line. 

We know for the blue collar that minimum wage fails to fulfill its objective of insuring a minimum standard of living. It is time to raise the minimum wage law for the benefit of blue collar workers.

Two workers

It would appear that if Congress intended the minimum wage to insure a minimum standard of living then that has failed. The minimum wage still leaves a head of a household working full-time far below an adequate level of family income. In addition we are excluding health care expenses.

Some may inquire what the reason is. The simple answer is the rising prices. Wages have not counter balanced that rising cost of living. There is no clear sign of prices receding in the future so what is the solution? There is no alternate but to raise the wages.

Now many of the workers have resorted to a quick fix solution to being no more a single-earner heads of households, but rather so-called ‘secondary’ earners such as spouses and their children. In the 2010 census it was revealed that 72 percent of all wage workers were either children or spouses of household heads. This is wrong wages must be raised and they should be in lock step with the rising prices. It is true that the total family income is above the poverty line however when one looks at the individual income it is quite low. Thus we in the TWU Local 100 believe we are due a wage raise and cost of living adjustment in our new contract.

Rent too damn high

Jimmy McMillan thought the rent was too damn high. He should visit the rumored Joe Campbell palatial mansion in the heart of Astoria. It is whispered Joe Campbell has a mansion that every leader of labor organization would envy. It is also speculated if Joe Campbell would market his mansion in the rental market it will fetch a staggering $18,000 a month. It is speculated to be one of the most expensive residential properties in the Queens rental market.

The mansion has a sprawling six-bedroom, nine bathroom palace, boasts a private elevator, butler’s pantry and three wood-burning fireplaces. A top-of-the-line gourmet kitchen with a sub-zero refrigerator, six burner Waterford Irish stove and wine cooler that is an appeal to culinary enthusiasts. We would love to be invited to those fancy parties that he hosts to the well heeled. However we the members of the TWU Local 100 are blue collar who would love to enjoy those nice features.

If those bells and whistles aren’t enough, the ritzy home has a potential to even feature an in ground heated swimming pool with an adjoining cabana. It can be rented furnished or unfurnished. For those with their own furniture they are eligible for a discount - they can rent the mansion for $16,500 per month unfurnished. We wonder if our 3% wage raise can cover that on the other hand the mansion is out of our league.

Landscaping services, daily housekeeping, 24 hour security and on-site are also included in the monthly rental price. It is also an unconfirmed rumor that those services will be provided by the courtesy of the TWU Local 100 members who like to moonlight when he is president. Well we here in why did you join the union believe Joe Campbell should be fair to all the TWU Local 100 members - spread the wealth around, we all want to moonlight. We would love it if he used the list in alphabetical order on a rotational basis so every member can get the extra cash instead of his chosen few.

Hardwood floors provide a touch of elegance, while muted color palette of creams, whites and lattes throughout the property complete the contemporary look. Well one wonders with the current financial situation if Joe Campbell wants to rent his mansion so he can get a renter either on a short-term or long-term basis.We wonder if any of us in the TWU Local 100 can afford such a beautiful mansion and we are very proud of CED division chair of his accomplishment. If it is true many have inquired what was the source of his income the tidbits is maybe it was his share from the sale of 80 West End Ave our old union hall. We are waiting for the word when the Joe Campbell Rolls Royce is coming (maybe a second coming of Israel Rivera Jr - Jeep SUV with bells and whistles) - we would love to wear the black suit with a cap with white gloves to polish the Rolls Royce definitely to chauffeur his excellency around town.

We are not experts in the rental market but if it is true that Joe Campbell’s mansion is positioned conveniently to both Yankee Stadium, New York Knicks, Brooklyn Nets, Arthur Ashe Stadium and the New York Mets then there is definitely potential - we wonder how Donald Trump missed that? We can guarantee that none of the TWU Local members would be able to plunk down that kind of money in addition we do not have the time to enjoy the finer things that others can because we are blue collar.

Working poor

As stated in the Fair Labor Standards Act, the primary purpose of minimum wage is the ‘maintenance of the minimum standard of living necessary for health, efficiency and general well-being of workers.’ The important point to note is the phrase ‘minimum standard of living’ which pertains to annual income not the wage rate. Much like other government tax and transfer programs (for example, AFDC and Social Security) the minimum wage is an attempt to put a floor under the income of a particular subgroup of the population in this case the ‘working poor’ people with jobs who receive very low wages. Can we say with the raising prices, the rising cost of living that we the TWU Local 100 members are the working poor - yes we can say that.

Who are the working poor and how many are affected by the wages? Three recent studies have analyzed these questions with data from the current population survey (2010) - about 31 percent of workers who were paid hourly wages reported earning less than or equal to the minimum wages. This group of workers was comprised largely of young people and women, the majority worked part-time, and most were employed in service and sale occupations. This is a significant group of people who receive wages sufficiently low that they might still have annual incomes below the government’s official poverty line. We can say that TWU Local 100 members deserve a wage raise.

Labor shortage

The recent article in the Wall Street Journal was concerning severe shortage of labor and how companies have tried different tactics. How can labor shortage and stable wages coexist? According to one well-known labor economist, ‘What were seeing is the legacy of last economic recession and the ongoing pressure of foreign competition. Many companies have chosen to ignore issues of labor supply and demand for fear that higher labor costs will make it more difficult to compete.’ 

He goes on to say that a number of companies decided to operate shorthanded or institute mandatory overtime rather than raise wages with the hope that the labor shortage would prove to be temporary. It reminded us of our ill suited former CEO 

Jay H Walder who applied this tactic however it failed miserably. He had no moral fortitude to stand up and take the blame but cut jobs and ran away to Hong Kong - that revealed his moral fiber and upbringing.

The article notes however that gradually the pressure of excess demand was beginning to show up in craftsmen wages. The Laureno Lumber and Mill Company for example couldn’t get anyone to answer the moderate wage that it advertised. The article states the pressure to raise wages affects smaller companies because they typically pay less and thus in a labor shortage tend to lose their craftsmen to bigger employers with higher wages and fringe benefits.

If the shortage remains severe for a sufficiently long time these large employers also begin to experience high separation rates forcing them to consider boosting wages as well. We think now is the time TWU Local 100 membership are entitled to new contract with wage raise.

Different tactics

The recent article in the Wall Street Journal was about how companies have tried different tactics to stop severe labor shortage. The Laureno Lumber and Mill Work Company for example extended its average workweek to 55 hours from 40. The company also offered new recruits a $1,500 ‘hiring bonus’ despite its fear that the bonuses would encourage long-time employees to seek pay increases. The company also admitted that it had lowered its hiring standards and was willing to take people with little experience as door makers and forklift truck operators despite the additional costs of training and lower-quality production.

Given the scarcity of labor, one would think that wages of skilled craftsmen would have risen sharply as companies competed for labor wages.  Surprisingly however such has not been the case the wages rose moderately instead of sharply there was no bidding wage wars among the companies. According to the article the average hourly wage rose moderately for machinists, bricklayers, tool and die makers. If we cross reference with the inflation and rising prices then real wages for craftsmen actually declined.

Nelson Rivera and Stephan Thomas insensitivity

Many of you have received numerous emails from CED led group - Joe Campbell, Nelson Rivera, Stephan Thomas and Kendra Hill whose publications have centered on attacking TWU Local 100 President John Samuelsen.

One wonders how come this slate is not offering anything credible or tangible that would benefit the membership? Many have observed that those above were Roger Toussaint’s beneficiaries when he was in power. During Roger Toussaint era many agreements were signed that had the intention of eliminating titles such as conductors in Rapid Transit Operation as well as the CTA position in the Station Department in which Nelson Rivera and Stephan Thomas acquiesced.

Since now One Person Train Operator (OPTO) has been tackled and there is hiring of conductors for the Rapid Transit Operation which is a sign of good news. The rehiring of laid off station agents is also great news which possibly may lead to hiring more station agents from the open competitive list. When Jay H Walder former CEO had plans to phase out the station agent title in favor of vending metro card machines and removal of the booth completely - we can say the reversal of that plan is good news for TWU Local 100.

Can we hear credit directed towards president John Samuelsen for those accomplishments or at the minimum acknowledgement of that from the CED led group? Do not hold your breath they have nothing to offer that would be in the membership’s interest, and what do they really stand for? 

Many have observed that the CED led group are incompetent to handle their own affairs without knowing what they are doing. But perhaps what they are really doing is sacrificing their own membership to boost their image as saviors. Membership won’t be fooled by the CED led group, since this barrage of propaganda presented by Joe Campbell, Nelson Rivera, Stephen Thomas and Kendra Hill is about their own TWU Local 100.  

One particular item stood out to us. ‘We paid at the door!!’ many noted that this is not a movie house, athletic event or wrestling match where you pay at the door to get in to see the live action or pass time. However this is the CED led group that want you to get into their circus by paying at the door probably so they can enjoy some fresh sushi or bagel and lox. Scuttlebutt is that Joe Campbell who is the emptiest of empty suit - what we knew long ago.

As some of the membership who put the blame squarely at the feet of the CED led group in their solidarity philosophy, when they did nothing for laid off fellow co workers, many have made the conclusion that the philosophy of the CED led group would like to hold back any achievement that has been gained by TWU Local 100. It is obvious, it is a philosophy that sacrifices the gains that have been made recently.

Well to our delights this is exactly the kind of conversation we should be having that picks apart the hard facts and statistics and allows the membership to see the naked truth of the CED led group. We are aware they fear knowledge and truth. Joe Campbell’s response should be interesting especially with his cluelessness as he goes through the motions pretending to be a leader while everyone knows that he is a follower and puppet to Nelson Rivera and Roger Toussaint.

Labor shortage

The Wall Street Journal article says that although much attention has been focused on the growing scarcity of service workers for restaurants, hotels and stores a far more serious labor shortage is emerging for skilled blue collar craftsmen ranging from machinists and electricians to shipbuilders and bricklayers. One example cited to illustrate the severity of labor shortage of craftsmen was Electric Boat Company in Groton, Connecticut. At the time the article was written Electric Boat Company had over 300 openings for machinists, welders, pipe fitters and other skilled craftsmen. Competition was so fierce for people with these skills that when 97 craftsmen at a nearby plant were laid off, Electric Boat offered jobs to 30 of the workers but were able to hire only two.

To attract craftsmen, the Electric Boat Company and other employers have adopted a number of recruitment practices that in a slack labor market they would not bother with. Electric Boat Company for example placed help-wanted advertisements as far away as Wisconsin, and sent company recruiters to Western Pennsylvania in search of laid-off craftsmen from the steel industry. The company also sent representatives to area high schools to discuss job opportunities with graduating seniors.

Adjustment to wages

When one uses simple models that can yield extremely powerful insights. This is certainly true of the model of demand and supply. In response to an excess demand for labor for example the demand and supply model predicts that the wages should rise in the market continuously. 

The example of oilfield workers bears testimony to the validity of this prediction. Unfortunately however simple models can rarely explain the reality in the labor markets, many may wonder why. Recently in The Wall Street Journal there was an article about a severe labor shortage of skilled craftsmen that exist in many parts of the country. The article points out that firms attempt to deal with excess demand pressures in a variety of ways besides raising wages. Also that while wages will eventually rise in the face of a labor shortage as the demand/supply model predicts they often respond to changing market conditions rather slowly imparting a certain amount of inertia to process in the short run.

Management buying and selling

This type of buying and selling is seldom done in the labor market today for several reasons. One is the growing prevalence of long-term jobs in the labor market. While the plant foreman in days bygone might hire and fire workers on a daily or weekly basis, many firms today would find this prohibitively expensive. Firms invest substantial sums of money in their employees in the form of hiring and training costs. 

Thus even if an unemployed worker offers to work at a lower wage than an existing employee the firm will generally not find it profitable to hire him or her.

A second reason why money wages is downwardly inflexible is because unemployed workers frequently refuse to lower their ‘asking wage’ preferring instead to remain unemployed until a job opening is found at the desired wage. This reflects the expectations of many workers that their loss of job is temporary, the psychological resistance of workers to accepting a wage less than what they were accustomed to and the availability of unemployment insurance benefits. For these and other reasons then wages typically do not fall even in the presence of considerable unemployment. Thus TWU Local 100 membership deserves a raise to their wages.

No going backwards

The failure of money wages to decline in the face of an excess supply of labor represents one of the most important deviations of actual labor market behavior from prediction. For example when President Carter imposed the embargo on grain sales to the Soviet Union in 1979, the price of wheat received by North Dakota farmers dropped down in a matter of days.

Now when you talk with the management they want to treat labor as a commodity such as wheat - they want to lower the wages and cut benefits, why?

The answer to this question revolves around differences in the two types of markets which the management would never acknowledge. First the wheat market is a classic example of an auction market. Prices rise and fall as buyers and sellers bid against each other in an attempt to strike the best bargain possible. The flexibility of prices is encouraged by several features of the market and the goods in question. Buyers and sellers of wheat for example engage in constant ‘shopping around’ in the market as they search for the best price. Likewise since the wheat is a standardized commodity the only variable of concern to both parties is the price. Finally since wheat is an inert commodity it does not care at what price it is bought and sold, nor does it care who the buyer is or how many times it changes hands. 

The labor market on the other hand is far different. If labor were like a commodity market (which is the desire of the management) just imagine how firms would auction jobs on a daily basis to the lowest bidders. Competition among unemployed workers would result in the wage being bid down until everyone who wanted a job had one. We are not going back to the days of bygone when a foreman would stand at a plant gate and offer work to those outside at whatever wages he felt like. TWU Local 100 membership deserves a raise to their wages.

Cost containment reasons are phony

At least we the membership of TWU Local 100, so used to the propaganda presented by the MTA leadership, applaud the membership who broke free and expressed their own opinion on Twitter on the 2012 contract negotiations - between TWU Local 100 and the MTA. Joseph J. Lhota CEO of MTA has finally revealed his true colors - he is a republican, he is wealthy, he loves NY Post which is anathema to blue collar and to reasonable people - with his recent opinion on June 18, 2012.

His reasoning on the surface appears to be logical ‘but the agency is in an era of cost-containment and-control unlike anything in its history’. However when you pay close attention to the rest of the story you find his facade was full of empty rhetoric. He neglected to highlight the sad financial blunders which is the result of a decade of failure and mismanagement by his predecessors and his administration.

Then he went on a tangent that we should be partners in his misguided notion - ‘labor to be part of the solution’. Our relationship is based on employer versus employee, master versus servant not partners - he may have impressed his billionaires friends who read the NY Post however he is not aware what the rest of the New Yorkers think of MTA. Maybe he has not read the NY State Office of the State Comptroller - MTA - Metro-North Railroad ‘Forensic Audit of Payment to On-Board Service Managers’ Report 2011-S-35, June 2012. It is obvious he wanted to divert attention and talk about TWU Local 100 contract negotiation.

‘That’s why the MTA is asking its unionized workforce, during its current contract talks, to forego raises for the next three years.’. Blue collar employees who earn less than $25 an hour sure they deserve a one dollar raise since prices are going up. Twenty five dollars now cannot fill a gas tank. Maybe he does not know the toll cost at Verrazano Narrows Bridge which is $13 - we forgot he does not pay the tolls like everyone else does. 

He never discussed or gave hints of traffic congestion plans to ease New Yorkers fears of the time it takes us mere mortals to get from point ‘A’ to point ‘B’. Neither was overcrowding addressed. Or how MTA is prepared to deal with forces of nature such as snow response, hurricanes, or tornadoes. He never mentioned that TWU Local 100 members pay taxes to the city, state and federal government and how those taxes are suffocating the blue collar wages. He neglected to mention for most of us who take our cars to work, that alone has to do with money, while we are driving our cars we are spending money (gas, insurance, tolls etc) more directly the city benefits from the quarters deposited in the nearby muni-meters, the rent for a mere 10 minutes parking on the street. Some of us work long hours in excess of eight hours that is six quarters for every hour times eight which is $12 - based on these simple facts $12+$13=$25 the net wage for the blue collar is zero. Based on that the blue collar deserve a raise of $1 at the minimum if not more.

His reasoning is flawed about the fact that managers have not taken a raise. However for a manager who makes six figures yearly does it make a difference if he gets a raise? Why not consolidate the management? If he truly cared in cost containment why doesn't he start by looking around in the MTA Board, then at 347 Madison Avenue, 2 Broadway, 180 Livingston Street. He should look at the MTA HQ - it is obvious he will never solve MTA problems by covering them up or manipulating blue collar to be used as props in his charade. TWU Local 100 members are just too smart to be brainwashed by these forces of evil and partisanship. 

Predictions

The competitive wages predicts that three adjustments will take place in the labor market. The first prediction is that employment will decline. This prediction is borne out by the assumption that shows manufacturing employment declined in Fargo.

The second prediction is that the absolute dollar value in wages is declining. This is borne out of current prices and the ability of dollar purchasing power which is in decline against rising prices.

The third prediction is that the level of wages in Fargo relative to wages in other labor markets should also decline.

Packing house workers

The case of oil and gas field workers illustrates the reaction of wages and employment in excess demand in the labor market. A second example illustrating the opposite case of how wages and employment adjust to excess labor supply is in the shutdown of the Armour Company meat packing plant in July in the City of Fargo, North Dakota.

The adjustment of wages and employment in the Fargo labor market is in response to the plant shutdown. The closing of the Armour plant resulted in an immediate loss of approximately 450 jobs. This loss is represented by a leftward shift of labor demand, illustrating that at the going wage there is now a smaller demand for labor in the market.

Social interest

Given higher oil and gas prices, oil companies found it to their advantage to increase domestic exploration of oil and gas. This exploration however was frequently in remote and inhospitable areas such as the north slope of Alaska or offshore in the Gulf of Mexico. How could oil companies find thousands of additional workers they needed and how could they induce these workers to move to where the drilling was? The obvious answer is that wages rose until enough oil field workers in Texas and Oklahoma and school teachers and unemployed auto workers in Michigan for example found it to their advantage to voluntarily move to Alaska or to seek work on the off-shore rigs in the Gulf of Mexico. 

Without any centralized direction the operation of the labor market brought about a redistribution of labor resources that served the self-interest of both the oil companies and workers as well as the social interest of the country at large.

Since we are in contract negotiation, the wages need to rise for the self-interest of both the employer and workers as well as the social interest of the country at large.

Changes in wages

There is a marked increase that has occurred in the demand for labor in the oil and gas extraction industry. The number of oil and gas wells drilled in the United States doubled over the course of a few years reflecting the large incentive given to domestic exploration by both the rise in foreign oil prices and the deregulation of domestic oil prices currently. The demand for labor is derived from the demand for the product thus the increase in the number of drilling crews, geologists and petroleum engineers. This increase has caused the demand curve for labor to shift upward sharply in this industry.

Now lets take a look at the wages and their changes and employment in response to a situation of excess demand in the market. The first is that the absolute level of wages in the industry should rise. This prediction is borne out for this industry. Even the rise in prices is subtracted out by the earnings in real terms which still has advanced significantly.

One would wonder why we in the transportation industry with our wages are languish behind many other industries. It is time that we are entitled to a rise in wages. 

Who does the rear end kissing?

Once in a while there comes a perfect illustration of a member’s self aggrandizement instead of the TWU Local 100 membership. Sometimes it takes the form of out and out corruption. There is use of union credit card to purchase pizza at midnight in New Jersey and then submitted for reimbursement at the membership’s expense.

There was the more than extortion scheme against Xerox corporation, so his wife would have made commission. Who acted in a financially inappropriate way so he could wine and dine his wife at fancy restaurants at the membership’s expense.

Sometimes its just a member needed to show ‘em who’s boss - ignoring the many membership who are working hard. He was removed by the executive board and had his defender Thomas Creegan, who has formed a slate to run for presidency. 

Nobody has begged to differ. Those who pay close enough attention to care about the membership also know when one is ousted then crocodile tears come out flowing -  which is just part of the process better known as democracy. But how many members found those who were elected then that had reached the union hall to act like their own not the membership’s best interest was front and center? 

Unlike other members who have been canned for seemingly political reasons during Roger Toussaint’s era however criminal activity at TWU Local 100 was at a new level which had to be eradicated, we say bravo.

His ambition clouded his judgement - currently he acts as a hack. He should be thankful he should learn from others who are civic minded. It is obvious he has not received heartfelt sympathies from fellow members. It is clear his time at the union hall was a waste not worthwhile.

Maybe Thomas Creegan who claims he is mister transparent, should provide us who does the rear end kissing. If and when he does you can expect less civic-mindedness, maybe more of rear end kissing.  

CED led group

On June 10, 2012 - the CED led group sent out an email blast criticizing TWU Local 100 president John Samuelsen concerning health benefits. They overlooked one major issue which is that the former Transport Workers Union Local 100 President Roger Toussaint, their main supporter was the cause of this headache we have to deal with now.

It only reveals that CED led group are unable to answer or at least have a moral obligation to see that a response is forthcoming. We will repeat to them what their main sponsor or benefactor Roger Toussaint did - ‘On health insurance coverage first he agreed to an increased medical co-pay for basic benefits, second he accepted that members would pay for enhanced medical benefits, and third he gave up union representation in the Health Benefit Trust- what a genius.’

This is what Joe Campbell, Stephan Thomas, Nelson Rivera and Kendra Hill want you to believe that Roger Toussaint never gave those up. However all of a sudden now they are concerned about health care issues. It is quite obvious if one cares to look that there is no commonality of interest among the various slates but only an anti-Samuelsen conspiracy.

They have not demonstrated their mettle to us in the past when the membership health care was let go by Toussaint. When the membership were left disadvantaged they did  not confront Toussaint then and why not? No one seemed as concerned about health care issues back then as they are now. This CED led group has not demonstrated their sensitivity to health care issues that were let go then but seem to care now. That track record is what gives us an indication that they are flawed thus we have no confidence in their leadership qualities. As they are pressing on we believe they should be told by the membership that they should pack their bags and do some retirement activities such as playing chess, dominoes or go fishing. We say now is the time for them to go on fishing.

Barriers to entry

In oligopolistic industries in manufacturing the main barrier to entry is a large capital requirement in non manufacturing industries such as trucking or airlines (prior to deregulation). The principal entry barrier was the difficulty firms had in gaining regulatory permission to compete in new markets. In either case barriers to entry allow firms in concentrated or regulated industries to pay wages higher than the market level since higher labor costs can more easily be passed on in the form of higher prices without precipitating the entry of new lower cost rivals. These high wage firms will also be able to attract the best ‘quality’ workers in the labor market making efficiency wages more equal than money wages.

Whether the increased productivity of workers employed by high wage firms completely offsets their higher rates of pay has been investigated in a number of studies. While evidence has been found on both sides of this issue the most recent studies find that workers in concentrated and regulated industries do receive a wage premium that cannot be totally accounted for by higher worker productivity.

Changes in wages

An important function of the labor market is to allocate labor to its efficient use. This is not easy. On the demand side of the market, the demand for labor by employers is in a constant fluid state. Some employers are growing rapidly and need many additional employees, while others are laying off workers because of declining sales. The supply side of the labor market is also in a state of change. Each year over one-and-a-half million people enter the labor force looking for work and several million people who are already employed change jobs. Given the great demand of labor in each industry with their occupations and geographic area and the great supply of labor in terms of education, skill, job preference and desired geographic location how does the labor market efficiently match the job opening that the employers and the employees are seeking in work? 

Raise the wage

The former CEO Jay H Walder demanded to know the performance level of each employee specifically the blue collar - we wonder why he excluded the white collar. He did not give a reasonable or a coherent explanation. Why did he give the white collar a pass? Just imagine if Walder’s principle were to be utilized in the US Army, the  commissioned officers would be given a pass causing the US Army to go bonkers.

Walder’s theory was that he could set the wage in proportion to his or her productivity. He ignored the fact that in reality it is impossible to monitor employee’s job performance both because supervisory staff is costly and because many aspects of job performance (e.g., effort and diligence) are difficult to measure. The problem posed for MTA in this situation is that both hourly and salaried workers are faced with temptation to work at less than peak efficiency since the MTA cannot fully detect loafing or malfeasance. How can MTA combat this problem? One solution is to deliberately pay a wage above market level (do not hold your breath - only white collar will get that). Blue collar employees who are members of TWU Local 100 until now are working without a contract while they have been offered zeros which they have rejected. 

To motivate the blue collar employees award them a generous wage raise, their job performance would be excellent and they would work harder.

Rodney Glenn led group

Another member of CED announced that he will run for president of TWU Local 100. His slate is opaque, earlier last year he was very animated however in 2012 he has quieted down.

During Roger Toussaint era Rodney Glenn was some kind of director for years at the union hall however he has no record to speak about, since he left no mark at the union hall. His record is empty of any accomplishments that benefitted the membership. Never supported members in the layoff of 2010, he was against the Solidarity Fund, and he was missing in the first National Conference on Transit Worker Assault.

Do you believe former Toussaint director has your interest in mind? What do you think? 

Imperfect information

The essential point here is that the acquisition of information in the labor market through job search is costly in terms of both direct out-of-pocket costs and the opportunity cost of the time devoted to it. While each worker would like to obtain the highest paying job possible beyond some point the additional search costs from contacting yet another firm will surpass the probability of finding a higher wage offer. Rather than searching in the labor market until the highest wage is found the worker will find it profitable to search only until he or she finds a job paying a wage equal to or greater than some minimum acceptable wage. With imperfect information in an otherwise perfectly competitive market two identical workers may be paid different wages.

Part of the dispersion in earning may be the result of the imperfect information. In addition search costs prevent the process of labor mobility from fully competing away differences in wages among similar jobs in the labor market.