How wages and employment are actually determined

If we look at human behavior we can come to the conclusion that people maximize in pursuit of their economic objectives, some may agree and some may disagree. Second would be satisfying. Satisfying means that an individual pursues a goal only until he or she reaches a minimum acceptable or satisfactory level. Rather than strive for the best outcome people who satisfy settle for the outcome that they regard as good enough even if it is not the best they could do.

Many also believe that people’s choices are less rational and consistent. Specifically with the argument that the human brain is too limited to assimilate all the data and to make all the complex calculations that are required to arrive at the best and consistent choices which may be plausible. 

Then the other argument is that of the aspect of preferences. The first is that people’s preferences or tastes are interdependent, what one person or group does has a large influence on the behavior and preferences of others. The second aspect of preferences are not given but are rather shaped by and change with ones economy.

Many claim of the competitive nature of labor markets and the primacy of market forces in determining wages. We here in why did you join the union consider this premise as moot. We would like to point them to the MTA as an example in the  2010 layoffs - how did it come to be? How did the MTA maneuver this way? Why did TWU Local 100 members have to be laid off? Until now we have not heard any coherent answers, we would suggest it is the white collar mismanagement and excesses.

Assaults

The bottom line is TWU Local 100 members are assaulted while doing their work and our employer MTA could care less if the blue collar lives are shattered (majority of the employees who are assaulted are minorities). One wonders why the MTA board which is composed of caucasians seem to give lip service about the assaults. Maybe they do not endure the horrific pains that the blue collar families go through as result of the assault or maybe in their view ‘out of sight out of mind’.

We are pleased that the New York State Legislature have come to the realization that TWU Local 100 members need protection which they are not afforded. In addition to the MTA board dragging its feet to install partitions in the buses to safeguard the blue collar. 

It is a fact TWU Local 100 members are the facade of New York City - many New Yorkers have different issues whether economic hardship or mental issues. New Yorkers way of venting for their hardship, rising prices or fare rise is to assault TWU Local 100 members. We are not going to put up with it anymore, we appreciate and thank New York Legislative in realizing and saying TWU Local 100 members while doing their jobs should have means of defending themselves in the event of an assault due to the past practices of inadequacies from the MTA.

MTA board want us to believe that those stickers on the buses and trains are sufficient deterrents. The number of assaults are on the rise which proves them wrong. We recommend parading the assaulted TWU Local 100 members in every MTA board hearing till they take the issue of assaults on TWU Local 100 members seriously.

White collar excesses

Deductive reasoning (famously championed by Sherlock Holmes - who ‘is famous for his astute logical reasoning, his ability to adopt almost any disguise and his use of forensic science skills to solve difficult cases’) can be used to derive theoretical predictions and testable ideas. Deductive reasoning is logic that progresses from the specific to the general.

Either method can be employed to predict what will happen to a firm’s desired level of employment if it is forced to pay a higher wage. One method is to look at a number of firm’s in which wage has gone up. Well here is an easy one, if we were to look at MTA specifically ‘white collar’ those who receive renumeration of six figures in addition to all the fringe benefits, with all others perks (such as yearly new vehicles) then we can generalize that the ‘white collar’ are wasting New Yorkers tax dollars. The other side of the coin is for how long will this waste go on? As we know there are two sorts of employees. You have employees who are ego centric (white collar), who say this job makes me really important. Then there are other employees who are job centric (blue collar) that are just trying to do the job. Based on the change in employment in each we can formulate a prediction that those ego centric are reducing resources. This is an example of inductive reasoning which we believe the MTA board misses by a mile.

A second way is to start with several general assumptions about the goal of any firm and the determination of revenues and costs. Specifically about deducing ‘white collar’ excesses that effect the balance sheet. This inductive look at the ‘white collar’ excesses at MTA is both general and more fruitful in looking at the nexus of waste.

Two parts of labor market

Labor market has two important parts that heavily influence the conclusions and predictions derived from it. The first concerns the nature of human behavior. Many have labelled or called the model of economic man. One key assumption concerns human motivation. The model of economic man holds that individuals seek to maximize their level of well-being, always striving for the best outcome, given the constraints they face. A second key assumption is that human beings have the cognitive ability to exercise rational choice. This implies that the human brain is powerful enough to calculate the value of alternative outcomes so that the optimal outcome can be chosen. Finally a third assumption is that human beings are individualists in their behavior and preferences and are largely independent of what others outside of the family think or do.

The second important part concerns the nature and operations of markets. While economists recognize that the labor markets have certain unique features they do not perceive these differences to be so great as to preclude analyzing the labor market with the same theoretical model used to study other product and factor markets. Furthermore it is usually assumed that the labor market is highly competitive having large number of buyers and sellers and allowing relatively easy entry into and exit from the market. The importance of these assumptions is that they ensure that demand and supply determine a stable equilibrium where impersonal market forces are the major determinant of wages and the distribution of labor. As a result market outcomes lead to an efficient allocation of resources.

Custom

Custom is a practice or belief that has gained acceptance and legitimacy simply because it has been followed for a long time. It is an example of sociological influence on the labor market. Some economists argue that custom has a strong influence on wages particularly relative wage differences between groups of workers. For example pay differences between fire fighters and police officers or between train operators and conductors. Those instances are regarded by the blue collar to be as much a matter of social standing and equity as economics and often become a major criteria in the wage determination process.

Most economists would readily agree that each of the market, institutional and sociological forces have some role in shaping labor market outcomes. One wonders why the blue collar would accept the wages to be dictated by custom? The other side of the coin is why would the union agree to this practice?

If the firms objective is to extract the most profit from the customer while suppressing the wages to a minimum production cost of goods then why are there differences between the labor market for day laborers or migrant workers and the market for teachers or pilots? What are these differences and how do they affect the pricing and allocation of labor?

Discrimination

Sociological factors also influence wages in ways that are independent of supply and demand conditions in the labor market. One example is discrimination. Discrimination occurs whenever one person is treated preferentially over another even though both individuals are equal except for some characteristics such as sex, race, religion or nationality. While each of us has individual likes and dislikes discrimination typically involves a common taste or preference on the part of one social group against another making discrimination a sociological fact. 

Does discrimination play a role in the wage determination process? The answer is surely yes. For example day laborer wages are the lowest. Why are the day laborer wages the lowest? It is obvious that discrimination is based on sex, race, religion or nationality. 

The earning gap between the sexes is another form of discrimination. Many studies point that women who were year-round full-time workers earned only 64 percent as much as their male counterparts. The existence of an earnings differential between two groups does not of course prove that discrimination is the cause. Many research shows that half or more of the male/female earnings gap is due to legitimate market-related factors such as length of work experience, college major and number of career interruptions for family reasons (a class-action lawsuit that claims that the financial services and media company - Bloomberg L.P., of discriminating against pregnant employees). There is unquestionable evidence that some employers systematically reward women differently than men (and minorities - immigrants differently than whites) with respect to pay and promotions to the extent that discrimination occurs. Therefore wages and other market outcomes are determined by factors that are separate from the market forces of supply and demand. This is not to say that market forces are irrelevant however for the employers that desire to discriminate they are constrained in the exercise of their prejudice by the need to hire the most qualified productive employees possible for the firm to make a profit. 

Culture

Culture is another sociological factor that affects the wage determination process. Cultures instill in people a set of values or beliefs common to the larger social group. These cultural values may have an important effect on the earnings and economic success of different ethnic groups in the labor market as they shape the attitudes of individuals concerning the work ethic, entrepreneurship, risk taking, occupational choice, the importance of education and the desirability of getting ahead in a materialistic society. Are cultural differences important in explaining wage and income difference among people? Several books and experts have argued about the above.

In terms of the average family income the two ethnic groups that have experienced the greatest success in the United States are Jewish Americans and Japanese Americans. The great majority of people of both groups came to America penniless and often suffered intense discrimination here. Despite these roadblocks, both groups worked their way up the economic ladder passing by other ethnic groups such as the Germans and the Russians. Why have other ethnic groups not succeeded economically to the same extent? 

One reason is that some groups came to the United States later than others and are several generations behind in the economic race. Others have argued however that some groups are also penalized by cultural attitudes that conflict with the demands of a highly technocratic, rationalistic society. American Indians are perhaps the best example of this conflict. Despite being the first group to settle in the United States they still have the lowest average family income of all ethnic groups.

Sociological forces

To better appreciate the extent to which family background and socioeconomic class create noncompeting groups in the labor force consider a current day example - President of the United States Barack Hussein Obama and former President William Jefferson Clinton who both came out of average families (blue collar background).

Presently fierce competition exists for admission to medical school because of the high income and status that it leads to. Do family background and social class have any bearing on the individuals who are ultimately accepted? To be more specific is the fact that an applicant is the son of a bus operator or a daughter of a bank executive likely to have any independent influence on who eventually becomes a doctor and who does not? 

Some economists would argue that family background has relatively little impact pointing to numerous examples of people who have risen from very humble beginnings to positions of great wealth (and vice versa). Others however would argue that family background is quite important admitting that while there is some movement between broad socioeconomic groups individuals as a rule do not move far from their parents’ occupational and social position. 

This question is obviously quite complex and subject to considerable debate. It is also quite important because one’s position on this issue is likely significantly influenced on one’s view of the social merits of relying on market forces as the distributor of economic rewards in society. The greater the opportunity of individuals (their sons and daughters) to move up and down the occupational ladder is a consequence of their own efforts and decisions on the greater argument for relying on the market. If however one’s station in life is largely determined by the accidents of birth and inheritance then the market merely passes on the status quo from one generation to another.

The other aspect of the sociological factors that affect labor market outcome is through the influence on the supply of labor and the determination of wages and earnings in the labor market. In some cases sociological factors influence wages independently of the market forces of supply and demand. While in others these sociological factors work through market forces as they influence the supply of labor to the economy or to specific occupations and industries. With respect to the latter an individual’s decision about the amount of work versus leisure or choice of occupations for example involves not only a consideration of market opportunities such as wages and employment prospects but also the individual’s psychological feelings about which choice is valued more. Economists have always recognized this psychological aspect of choice and include it in economic theory under the rubric of ‘preferences’ or ‘tastes’. Thus whether a person chooses to become a bus operator, station agent or a track worker for example depends not only on the wages that can be earned in each title but also on the individual’s preference or taste for each line of work.

Fair contract

MTA as an institution affects the labor market outcomes through their independent effect on wages. In the classical market of many buyers and sellers no one employer or worker can independently affect the going wage, individual firms and blue collar workers are what economists call ‘price takers'. The same is not true however in real world labor markets populated by large institutions such as MTA and as our union TWU Local 100. We know MTA is regulated by the state since it is public authority.

The best example of how institutions can independently affect wages is thru our TWU Local 100. In competitive markets an individual worker has little or no power to raise the wage above the going market rate, since the firm can easily let one worker go and hire someone else. But what if the workers band together to form a union? The power of a union to raise wages comes from its unity, especially the ability of walking out. We in TWU Local 100 have that ability however perseverance in the face of this contract fight is warranted. While the firm may be able to replace individual workers, if all workers walk off the job together then the company faces a potentially long shutdown. While not able to accomplish it’s main mission in moving New Yorkers in their state or city that failure creates ripple effects in the economy of the city and state.

We know we have that ability, however what we want is to have an influence on the wages to rise to match the increase of the prices of goods that we consume daily which is our objective. TWU Local 100 is not asking for wages too far but rather it asks for a fair contract.

Institutional force

Institution affects labor outcomes in two different ways. First they fragment or ‘balkanize’ the labor market into a number of segmented, loosely connected organization - does that ring a bell? We may have different functions or jobs however we are one, we are TWU Local 100. MTA has introduced structure, artificial boundaries and rigidities into its own labor force. However we say we are TWU Local 100, we are one. We are in a contract fight with MTA, we have earned the right, and deserve wage raise. It should be automatic however when dealing with MTA that is not the case. Wage raise should be done automatically based in response to the changes of prices of goods and the rise in taxes.

Wage change should be automatic in response to changes of demand and supply to those experiencing shortages. The boundaries of this ‘natural’ market are defined only by the limits placed on the sphere of competition by the flow of information, the transferability of skills and the willingness to travel. MTA however introduced rules and regulations that further define dimensions of the labor market. These rules and regulations maybe either formal (written) or informal (customary). In either case they effectively delineate who can compete for particular jobs and who is most preferred and which business firms can compete in the bidding. These rules are established with one goal in mind which is to keep the blue collar under control by the management.

The market for teachers

Do market forces really work as described or is that just a theory? For some evidence on this issue consider the market for teachers, the number of job openings for elementary and secondary school teachers and the number of new college graduates qualified to teach. The number of job openings is a measure of the strength of the labor demand, the number of new college graduates qualified to teach is a measure of labor supply. The annual earning ratio of teachers is measured as the annual earnings of teachers as a percent of the median income employed year-round full-time in the economy.

A rule of thumb for estimating the demand for teachers is that it is always up - the demand for teachers grows faster than the supply of children born especially for those who will pass through the school system. In a situation of excess demand that is based on the model of demand and supply it predicts two things that should happen to bring back the market to equilibrium. First the earnings of teachers should rise and second the rise in earning should lead to an expansion of the supply as people who were previously teachers (for example women who quit teaching to raise children) are lured back into the field and as more people decide to obtain teaching degrees. On the other side of the coin it is the communities that upgrade teacher salaries in an attempt to find and keep scarce teaching personnel. In addition to that the supply of new teachers also expands yearly rapidly due to the fact that more people are majoring in education in college and are obtaining teaching certificates.

What if there is a glut in the teachers market based on the number of people trained to be teachers that far exceeded the number of new job openings. This imbalance does happen as students in college are lured with a prospect of a buoyant market and they graduate in record numbers with teaching certificates only to find the market has gone flat. In this situation generally the politicians try to interfere by trying to adjust the market in most cases the outcome is a failure. Former New York City Mayor Rudolph Guiliani tried with the Board of Education and currently Mayor Michael Bloomberg is trying with the Department of Education.

Given the excess of the supply of teachers that is based on the model of the demand and supply it predicts two things that should have happened to restore equilibrium. First wages for teachers should have fallen and second this should have caused a decline in the number of people choosing to be teachers. Based on the above Guiliani and Bloomberg could not dictate to people who choose to be teachers so the circus keeps on going.

So now it becomes a buyers market for teachers, when the demand for teachers is up primarily based on the increase of school age children the growth in supply of newly qualified teachers remains unchanged. The result? A growing shortage of teachers and a noticeable increase in teachers’ salaries. The obvious question is can this force of demand and supply be replicated in the transportation industry? Yes, however not in an institution such as ours.

Market demand

On the demand side of each labor market are all the private firms plus various nonprofit organizations such as government which all actively compete for workers of a particular skill or trade. The demand for labor on the part of the private firms is derived from the demand for the good or service produced by the firm. The private firms have as its primary goal the maximization of profit and its demand for labor arises only to the extent that labor as a factor input is necessary to the production of firm’s product. 

This goal of profit maximization motivates the private firm to economize on labor as much as possible (i.e. Verizon - when its blue collar employees walked out) and to seek out those workers who are likely to be the most productive and efficient and who will work for the least remuneration. Given the wide range of products and services produced in the economy and the great diversity in skills and training that such production requires the demand for labor among private firms is quite heterogeneous.

The supply side of each labor market is comprised of all the individuals who are working or looking for work. Just as the demand for labor is derived from the demand for the private firm’s product the supply of labor is derived from the individual’s or household’s demand for income to purchase the goods and services produced by the private firm’s. Much as with the private firm the individual blue collar employee is motivated by self-interest and the desire to maximize his or her well-being to seek out the type and location of work that yield the highest return. That is an aspiration of every blue collar across the board based on that we the TWU Local 100 members deserve and are entitled to a wage raise. 

It is a fact TWU Local 100 members are the most productive in the nation - we move New York.

A CED clown

The case against TWU Local 100 brought by the Department of Labor that was based on Ainsley Stewart with the help of insider (former Secretary Treasurer) complaint to the Department of Labor against TWU Local 100 concerning the delegates to the convention in the 2009 election that were in bad standing which later on revealed that there were additional officers in bad standing. All of those who were in bad standing for numerous reasons paid up their back dues and now they are in good standing.

Then the Department of Labor brought an action against TWU at the Federal Court - United States District Court, Southern District of New York. Fast forward the parties came to a ‘stipulation and order of settlement’ that was entered on November 21, 2011- which dictated the following  - a) a new supervised election, b) TWU did not violate Title IV of the Act in the 2009 election, c) that each party should bear its own costs, fees and other expenses. Many observed that this case costed TWU tremendous amount of resources that could have been used in other well deserving venues such as childcare funds, widows and orphans funds, scholarships and union assistance programs.

The stipulation was clear that TWU Local 100 will conduct ‘supervised election’ under the supervision of Secretary of Department of Labor. Many departments now are doing that to fulfill that requirement. Further the elections are going so well in an exemplary fashion in all the departments.

At the Station Department election an interloper who is a member of Car Equipment Department - CED made a ruckus, he was warned by Station Department officers and by the Election Department that he was out of order. Many observed that he is a dunce, a useless one who did not observe the road rules that are granted for guests when visiting other department meetings or elections.

One wonders what motivated this minnow from CED to make a fool of himself, a clown,  many who were there questioned his mental faculties. Can you guess who he was - in other words who was the clown from CED?

Money wages

Several features stand out with respect to the trend in money wages and real wages. The first is the marked acceleration that took place in the 1960s and 1970s in the annual growth rate of money wages. During the early 1960s workers’ paychecks were increasing by an average of 3 to 4 percent a year - by late 1970s this rate had more than doubled to the 9 to 10 percent range.

It is common knowledge that the inflation rate in the United States also went up dramatically during this period reaching double-digit figures in the early eighties. Were these two events related? In particular did the faster growth in wages cause the rise in prices or alternatively did rising prices pull up wages? This question is frequently a source of puzzlement for people who know that wages and prices are somehow related but many times they are not sure just how. One of the major tasks of why did you join the union is to explain the precise role of wages in the inflationary process and in particular why in the 1970s wages and prices seemed to ratchet upwards while in the mid 1980 the two have remained so stable.

Concern the trend over time in real wages especially now (2012) real wages of blue collar are growing by about 4 percent a year. While this seems relatively unimpressive through the magic of compound interest a 4 percent growth rate translates into a doubling of per capita real income - so TWU Local 100 members are entitled to the same 4 percent growth rate that is afforded to blue collar employees nationally.

However it is an illusion of these money wages - why - money wages are a number of dollars and cents received per hour of work. Real wages are measured by dividing the money wage by an index of prices in the economy to determine the actual purchasing power of the money wage. So how do you feel on how much money you have in your pocket and how far it can carry you - how much are you able to save?

We are entitled to a raise

A significant feature of labor demand is the type of jobs that are available in the economy. Demand for the goods and service produced in the product market shifts over time. In reaction to this the demand for labor in some occupations and industries expands while in others it contracts leading to a large change in skills, education, and geographic locations required of workers. 

A considerable concern to the blue collar workers is the structure of earnings (difference in earnings) among individual workers, occupations, industries and geographic areas. The concept of earnings may relate to average hourly earning, weekly earnings, annual earnings, or even lifetime earnings whichever concept is focused on we know the prices will always be on the rise. One is forced to explain what gives rise to the observed differential in earnings among workers at a point in time and why these differentials do not mimic the current prices. As the experts in Wall Street commodity speculators are predicting the gas prices will rise up to as much as $8 a gallon.

If that is speculation from Wall Street then we deserve and are entitled to a raise. 

TWU Local 100 and New York City labor market

A labor market is the area over which demand and supply determine the going wage rate for labor. There is no national labor market however there are multiple labor markets separated by geographic location, occupation, skill and so on. Wages can give part of distinction made in the same market for plumbers, electricians, teachers and bankers for example since supply and demand for each occupation is likely to be quite distinct. Likewise geographical location gives rise to distinct labor markets. For instance the demand and supply for a taxi driver in New York City is likely to be distinct than that in Los Angeles. For such occupations such as college professor, or athletes the labor market may be national or even international.

The boundaries between many of the individual labor markets are relatively porous so workers can flow from one market to another in response to changes in wages - a teacher can become a flight attendant or plumber in Wisconsin can move to Louisiana. This movement between markets becomes progressively more difficult the greater the disparity in skills or geographic distance. For example a truck driver may be able to compete for an auto assembly job but would not be in competition in the market for orthopedic surgeons.

We in the TWU Local 100 were galvanized in part to be part of the labor movement in 

New York City which cannot be duplicated across the nation. In order to understand why we became members of TWU Local 100 it is necessary to understand the process that gave rise to that which is the mechanics of how the labor movement in New York City works. First New York City is the world capital. Second there is no equal or similar NYCTA world premier mass transportation system. Third TWU Local 100 moves New York. Membership of TWU Local 100 do not all do the same type of work (for example, teachers) we have a broad structure in which the unit consists of many different types of jobs (station agents, track workers, bus operators, mechanics, electricians, protection agents). 

One of the odd features of our economic system is that most of us must sell our ability to work in order to live. When MTA buys this ability they think of it as their private property and as with the rest of their property they think that they have the right to do with it as they see fit. In other words to them we are just ‘cost of production’ to be minimized and our ability to work will be treated no better than the tools and machines - we refuse that - we deserve and are entitled to a wage raise in the new contract. 

Flying Cars

It is rumored that former TWU Local 100 officers have placed an order for these automobiles/airplanes (flying car). It is said they want to be the first to own these new modes of transportation - can you guess who they are.

Two different companies, one in the United States and another in Europe (Netherlands) have announced that they just completed first flights. First, Terrafugia, the American company, said that its prototype "Transition Street-Legal Airplane" completed its maiden flight on March 23 from Plattsburgh, New York with a price tag of $279,000.

The Transition's Dutch competitor, the Personal Air and Land Vehicle (PAL-V), is very different the company said it flies like a helicopter and on the road "it drives like a sports car." Deliveries are expected in 2014.

Blue collar desire to join TWU Local 100

Labor market distinguishes itself from most product markets in the extreme diversity of the characteristics of the goods being traded. For agricultural commodities, raw materials or semifinished products like steel each unit is identical and the decision to buy or sell is made strictly on the basis of price. Other products particularly consumer goods such as automobiles, cereals and so on are differentiated from each other by their physical appearance quality and brand. The decision to buy and sell these products is influenced not only by price but also by these non price factors.

The same holds true in the labor market except for the degree of differentiation in the characteristic of jobs and workers which are frequently much greater. Individual workers differ by age, race, sex, education, experience, skills and complex personality factors such as pleasant personality and motivation. While MTA may have several types of equipments and New Yorkers may choose which mode of transportation they prefer - TWU Local 100 members also choose what equipment they prefer to work with. Just like the MTA has the choice in its workforce TWU Local 100 members have a choice of the equipment they prefer. Each member differs in the type and difficulty of the work, commuting distance, fringe benefits and quality of employee relations as well as wages. 

The diversity in characteristics of blue collar and jobs has two consequences for the operation of the labor market. The first is to make an exchange in the labor market which is a function not only of wages but also of the many non wage issues that differentiate blue collar worker jobs from one another. Blue collar workers do not have to choose between jobs solely on the basis of pay but must also take into account the TWU Local 100 camaraderie which is unmatched throughout the nation, maybe rivaled only by the teamsters of the bygone days.

The second way in which the differentiation of jobs and workers affect the labor market is by complicating the acquisition and evaluation of information that both buyers and sellers must have before an exchange can take place. In the wheat market for example each bushel of wheat is alike and the buyer need only acquire information about the price that various sellers are demanding. In the labor market however both buyers and sellers invest much more time and effort in evaluating the many non pecuniary and hard to measure characteristics that differentiate each worker and job. However being a TWU Local 100 member is a huge incentive in the minds of blue collar workers. The result is that exchange in the labor market is more costly to undertake and less likely to result in the most efficient match of buyer and seller compared to markets where the product is more nearly standardized.

Employment relationship

MTA finds that it is their advantage to cultivate a stable workforce since they make substantial investments in TWU Local 100 members in the form of costs of hiring and more importantly training and experience. Likewise TWU Local 100 members find it to their advantage to remain with one employer for a considerable time. One reason for this is economic in nature since wages and fringe benefits normally increase with tenure on the job. Another more psychological reason is related to the value TWU Local 100 places on security and familiar surroundings. 

The most important implication of the long term employment relationship - which both MTA and TWU Local 100 can claim a success for is its longevity. However that is only a facade because currently there is sensitivity in the current stalled contract negotiations. The MTA under Joseph Lhota appears to treat that employment relationship as a commodity. As we know that is the classic type of auction market where prices rise and fall daily, such as wheat or financial issues such as bonds and stocks. In the wheat market an excess supply of wheat quickly leads to a drop in its price as sellers underbid each other to attract buyer or buyers which in turn have little reason not to switch from one seller to another since all bushels of wheat are exactly the same.

In labor however an excess supply of labor typically does not lead to a fall in wages. While workers who are unemployed and want a job might offer to work for a firm at lower wages, most firms would find it unprofitable to hire them because the costs of hiring and training as well as the disruptive influence on morale would far outweigh the savings in lower wages. Thus while in commodity markets prices fluctuate up and down to restore a balance between demand and supply, in labor wage changes occur slowly (particularly in the upward direction). Because of this sluggishness of wages and imbalance between the demand and supply of labor may persist for a considerable length of time before wages rise or fall enough to bring about the necessary adjustment in the labor market (caveat - wages do not reflect the sky rocketing prices - this has been a sore point between MTA and TWU Local 100 that MTA tends to ignore - we wonder why).

On the other side of the coin where the employment relationship is a short term and turnover costs are negligible as for day laborers or migrant farm workers wages resemble the prices of the commodity markets.

As contract goes...

What we know about the contract is that it is divided into four parts: first - TWU Local 100 security and management rights (here the balancing act is a must - on the union security side we must win big on the management rights it should be weakened), second - the wage and effort bargain, again here we need to prevail greatly, third - individual member security which must be iron clad, forth - contract administration which should stay the same.

The essence of the management is control, since we know that we have to limit that control significantly of what they already have. We should pay special attention to this nonsense clause ‘all matters not specifically dealt with in the agreement become the right of the management’ - we need every matter to be spelled out in great detail all of the things - nothing should be left untouched and no stone unturned.

We do not want a re do of former CEO Jay H Walder - in the event with their wild ideas of downsizing, reorganization or adopting new technology. Based on the above the contract should not be limiting the share of the pie that we would get.

It is too soon to say what the contract outcome will be, but it is not too soon to say that recent management attacks on TWU Local 100 members is cause for the highest possible alarm. No doubt president John Samuelsen understands the implications for the credibility of administration when he is heading into the election. We believe Samuelsen would be able to protect members of TWU Local 100.

There is a reason that the question of the recent ramped up attacks by the management against members of TWU Local 100 keeps arising and it’s not just because of the nature of the incidents - disciplinary actions and harassment - that have been occurring all too frequently.

Decline of working class

‘A group of masked individuals gave subterranean vandalism an activist tinge this week: They tampered with subway entrance equipment with the aim of letting commuters in Manhattan and Brooklyn ride free - NY Times Sunday, April 1, 2012’.

We here in why did you join the union do not agree with this type of behavior - it is wrong. TWU Local 100 does not engage in this type of behavior - we are model citizens, role models to our children and hard working employees. However we are known to follow in the footsteps of one of our founders Michael J. Quill - responding at a crowded press conference: "The judge can drop dead in his black robes!" against the administration of Mayor John V Lindsay when the city obtained an injunction prohibiting the strike and succeeded in imprisoning Quill.

We do not agree with the point of view of those masked individuals Marxist perspective - we are not interested in changing the world. What we as TWU Local 100 members care about is coming to work, paying our bills, going home to our loved ones and then collecting the pension. Our struggle is to remain in the middle class - it is pure labor management tug of war.

We are happy that our president John Samuelsen is on top of this issue. Second to our fellow co workers station agents who follow the standard operating procedures. Remember the old idiom ‘fool me once, shame on you; fool me twice, shame on me.’ So be alert for May 1 or any other day of trickery. 

Much has been written about the decline of the middle class in actuality the decline of the working class. This decline is attributed to a variety of sources - the increasing sophistication of technology and inability of most people to understand it, the loss of a work ethic, high taxes and foreign competition. One issue is almost always missing which is class power. The decline in working class living standards corresponds closely with the decimation of the primary defender of workers, the labor union. In a society like ours it is impossible for any given individual to safeguard his or her economic position. Only by acting together in union such as ours TWU Local 100, can most of us hope to face the MTA with anything approaching a level playing field.

All of you are aware that MTA is so long accustomed to seeing us simply as a cost of production, each one of us is a number (pass number) rather than to treat us TWU Local 100 members as human beings with respect that all people deserve. In other words of the old labor anthem ‘Solidarity Forever’ the union (TWU Local 100) would ‘make us strong’.