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.

Market imperfections

If we ask why the labor market did not give rise to the predicted one wage, one possible reason might be because the law of one wage describes a situation of long-run equilibrium, while real-world labor markets are in a constant change. A second reason is because the market for a specific skill in a specific location may be violated by one or more of the five pillars of wage determination. A factor or circumstance that causes a market to diverge from competitive ideal is called a market imperfection. The more serious the imperfections in a labor market the more that the outcome of the wage determination process will diverge from the predicted outcome of competitive theory.

Wage determination

There are five pillars that wage determination rest on they are:

1. MTA seeks to maximize ‘Making Every Dollar Count - former CEO Jay H Walder theory’ and we the blue collar seek to maximize utility
2. Blue collar and MTA have perfect information about wages and job opportunity in the labor market
3. Blue collar in the labor market are identical with respect to skills and productivity - jobs offered  are identical with respect to working conditions and other non wage attributes.
4. The labor market is composed of many individuals
5. All jobs are open to competition no institutional barriers inhibit mobility of workers from one job to another. Cost of mobility are zero. 

Given these pillars the perfectly competitive model gives rise to one of the most important predictions in labor economics - the law of one wage. The law of one wage states that in competitive labor market the competition between buyers and sellers will result in the establishment in the market of one uniform ‘going’ wage that will be paid by all employers and received by all workers.

Productivity and demand for labor II

By doing so the MTA produces the same level of output with fewer employees - this is what our former CEO Jay H Walder championed giving rise to an increase in labor productivity. A second important factor leading to increase in labor productivity is technological change. Technological change allows the MTA to produce the same level of output with less labor leading to an increase in output per worker and thus in labor productivity.

The initial impact of the rising relative price of labor and the continual advance in the state of technology therefore is to increase labor productivity and reduce the demand for labor. Since labor productivity has grown by about 2 percent a year since 2000, does this mean that the economy offers 2 percent fewer jobs each year? The obvious answer would be no, although the initial impact of productivity growth is to reduce the demand for labor. It also leads to greater employment because lower product prices and higher real income stimulate additional sales in the economy. Rather than destroying jobs, productivity growth is actually the wellspring of higher per capita income and more jobs in the economy.

What is true at the economy wide level may not be true for an individual industry. However if an industry’s product has a low price and income of demand rapid productivity growth may lead to a net decline in employment as the additional sales resulting from lower prices do not offset the displacement of labor from capital/labor substitution and labor saving technological change. The increase in real income resulting from higher productivity growth in the one industry however will create additional jobs in other industries as that income is spent by consumers.

Former Toussaint driver led group

Mike Cordero former Roger Toussaint driver announced he will run for president of TWU Local 100. He has put out badly produced literature calling for the end of ‘partying’ in TWU Local 100.

One wonders what is his rise to fame other than being a driver to Toussaint. What is his accomplishment besides being a driver for Toussaint? His record 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.

It is not clear if he has any support from other departments. His slate is not clear and his team is almost a mirage. However it was a known fact that he had strong support from a deceased member from the Station Department due to the connection of their love for automobiles. One used to crash them while the other would drive them.

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