Thursday, February 28, 2013

As Common As Dirt

As Common As Dirt

The case alleges that while Gomez and Villalobos picked onions across the Coachella and Central valleys in California, the contractors routinely altered payment documents to undercount hours worked; failed to pay the state’s minimum wage of $8 an hour or overtime; failed to provide safe or sanitary working conditions; and housed the workers in unsafe and unsanitary living quarters. Significantly, Calandri/SonRise Farms was also named as a defendant in the suit, meaning it was not absolved of responsibility because it had outsourced its harvesting work.

Clandri acts as V using Iv agents to distance itself from deceptions. Often B workers are used who are also secretive and deceptive, here they can be undocumented workers. Sometimes they can come together as a Bi team to balance the Iv tactics like a union trying to form. If not then this Iv-B interaction continues to evade the I-O police. 


Compared with other recent tales of American farmworkers, Villalobos and Gomez might consider themselves lucky. In Florida, tomato pickers have been locked in box trucks under the watch of armed guards; in North Carolina, pregnant workers have been exposed to pesticides during harvest and birthed babies with missing limbs; in Michigan, children as young as six have been found laboring in blueberry groves.

If they become common enough then like a contagion they attract the attention of the I-O market and police, the Bi community sees this and demands action.

Those are marquee cases that garner national media, shining the spotlight on the most egregious abuses. In relative terms, suits like Villalobos are mundane, but they are also ubiquitous, filed with a frequency that suggests the most pervasive and insidious abuse faced by farmworkers is the kind Villalobos encountered: the blatant disregard of labor laws governing wages, safety, and health. This type of abuse is most typically seen in fields managed not by farmers but by farm-labor contractors, many of whom started out as farmworkers themselves.

The laws can be ignored because Iv-B has both sides being secretive and deceptive, also highly competitive where people can be fired giving others an opportunity. 
Known in some circles as “custom harvesters,” farm-labor contractors offer produce growers a ready workforce, but they also give these growers the ability to distance themselves from the people who pick their crops. These contractors control the flow of money between farmer and worker as well as all the paperwork. They track hours worked, crops harvested, and wages paid and take responsibility for everything related to labor, from verifying immigration status to providing workers’ compensation. Contractors can be found in the fields of nearly every handpicked crop in the United States, organic or conventional: green beans in Florida, grapefruit in Texas, peppers in Georgia, greens in Colorado, and garlic in California.
Farm-labor contractors give American produce growers what companies like China’s Foxconn offer to Apple: a way to outsource a costly and complicated part of the business, often saving money in the process and creating a firewall between the brand and the working conditions under which its products are made.

The firewall is often secrecy and deception from transparent V-Bi.

Chart Of The Day: The "New Normal" Trade Off - Debt vs Jobs | ZeroHedge

Chart Of The Day: The "New Normal" Trade Off - Debt vs Jobs | ZeroHedge

In the last few weeks much has been said about how the US economy, after nearly collapsing in the Lehman aftermath has staged a gradual, if painful and very slow improvement in the last 3 years. Sure enough, After jobs peaked at an all time high of 138 million in January 2008, they then tumbled to a depression low of 129.2 million in February 2010 and beginning in September 2010 have posted 24 consecutive months of growth, rising to 133.5 million last month: a 4.25 million trough to, so far, peak.  Not bad.
What, however, has received very little discussion by either presidential candidate, primarily because it is largely a byproduct of both Republican and Democratic policy and action, is what can be seen on the chart below courtesy of Diapason Securities, or the cost of said recovery - namely the New Normal angle of debt increase, which from merely steep, has mutated into beyond acute.
What is worse, is that instead of a mere one-time bump in the rate of public debt accumulation, as has happened in days past, the New post-Lehman Normal has shifted the entire curve steeper by a factor of two!

This can be a zombie economy, Iv-B businesses were like the roots and branches of trees that grew very finely in the Great Moderation. Now to regrow them from the stumps of their ruins gives businesses which much less leverage. Because of this it costs much more to make jobs, the problem is the velocity of money is low and so more money is needed. Also there are areas between formerly networked businesses that are now stagnant, businesses are no longer country wide or global as much and so cannot be a specialized.
What one can also see is that the public cost of "normalization", aka the Trade Off of the new normal is an additional $4.25 trilion in debt over and above where the previous historic trendline would put total US debt, just under $12 trillion. Instead total debt is now $16.2 trillion. Oddly enough, this translates to precisely $1,000,000 per job gained or saved from the first (and certainly not last) post-crisis trough: yet another fact that will not be mentioned in either the mainstream press or any presidential debate, as sadly trading off record amounts of public debt for new jobs is the only game left in town for either party. 

Sober Look: 55 straight months of job cuts in Spain's service sector

Sober Look: 55 straight months of job cuts in Spain's service sector

With Spain's recession deepening, the nation's service sector continues to struggle. Service industries such as hotels and restaurants are caught between rising input costs and falling output prices, as margins become compressed.
Markit: - The Spanish service sector ended the third quarter of 2012 deep in contraction territory. Moreover, September data signalled faster reductions in both activity and new orders as the economic crisis in Spain continued.Higher fuel costs contributed to an acceleration in input price inflation to its fastest since July 2011. On the other hand, companies continued to lower their output prices, despite a rise in the rate of VAT limiting the extent to which they were able to do this.

This can be an Iv-B economy based on credit, people in a bubble invested in Spanish real estate and unless the bubble reinflates this part of the market cannot regrow. A collapse without a potential for regrowth can be like a damaged building partially collapsing, then there are further collapses as parts of it give way later. It can also be like a plant that collapses partially in a storm so it is no longer viable, it then slowly dies as reserves are used up causing more collapses. In this case the V-Bi savings of people and the government might be used up waiting for a revival where there is no market. it is like a zombie economy or a patient on life support that cannot revive, resources are waste din keeping parts of the body alive though it does not have enough connections to move and sustain itself. In Aperiomics the economy needs to be analyzed not just with V-Bi statistics that only measure the stagnant or stable parts of an economy not the growing areas. the roots and branches of the economy need to be analyzed, a representative sample of these workers would be selected and then what business they connect to. Then the business those people connect to until long chains of business are mapped out to see if there are any breakages. If these weak links can be fixed then the Iv-B parts might revive, otherwise resources will just be wasted in keeping disconnected areas on welfare. Eventually this can lead to complete collapse into Roy as debts mount until they cannot be paid.

Source: Markit

Driven by sharp declines in demand, employment is Spain's services sector has been hit especially hard. This is the 55th straight month of service jobs losses.
Markit: - With workloads falling, service providers lowered their employment accordingly, extending the current sequence of job cuts to 55 months. The sharpest reduction in staffing levels was at Renting & Business Activities companies, while Hotels & Restaurants was the only sector to take on extra staff.

A period of unemployment greatly increases the odds that a worker and members of the worker's
family will be counted among the nation's poor. For example, among persons between the ages of
16 and 64 who were unemployed in early 2010, nearly one in four (24.1%) were poor based on
their families' incomes in 2009; among those who were employed, 6.7% were poor.

B workers can have a collapse in resources when unemployed, for example they might have to sell assets at a fraction of their worth or become ill from it.

A variety of social insurance benefits may be available for unemployed workers. The benefits
analyzed in this report can be generically grouped into the category of Unemployment Insurance
(UI) benefits. UI benefits provide a cash supplement to replace a portion of lost wages to
qualified unemployed individuals. Two main objectives of the joint federal-state unemployment
insurance program are to provide temporary and partial wage replacement to involuntarily
unemployed workers and to stabilize the economy during recessions.

this is Bi and adds insurance to quench chaos, for example someone unemployed can hold onto their assets or sell them more slowly getting more money from them. They also have the time to retrain and look for work, unemployment can cause people to become weak from lack of food or living homeless and become less employable.The floor here then can be R poverty or nomadic life as homeless or living in a  car.

As a temporary, partial replacement of lost earnings due to job loss, the benefits workers receive
may help to prevent them and their family members from reaching poverty, an ancillary but
important role of the program. Unemployment benefits are an individual worker's entitlement (as
long as that worker meets the criteria for the benefit) and are not means tested.
 In this regard, the
UI program, while not a poverty program per se, can play an important role in reducing poverty
associated with job loss.
Additionally, as a countercyclical program UI has a macroeconomic effect in reducing poverty.
By injecting dollars into the economy directed toward those who have experienced job loss, UI
helps to partially mitigate income loss among a group directly affected by economic downturn,
and it thereby temporarily augments the ability of unemployed workers to meet basic needs,
which further stimulates the economy. In this regard, the macroeconomic effect of UI helps
dampen the tendency for poverty to increase during periods of economic downturn.

It can act as a stimulus but runs the risk of people adapting as R or B to this money, learning how to get it instead of how to find work. This is like Iv-B weeds adapting to sprinklers used in a drought so they can no longer survive with normal rainfall patterns.

Spain's Robin Hood - Businessweek

Spain's Robin Hood - Businessweek

In the farming village of Jódar in southern Spain, 2,000 demonstrators march down the heat-buckled tarmac toward a police checkpoint at the edge of town where, they’ve just heard via megaphone, their hero has been detained. In front stride men in green T-shirts printed with the letters SAT, the Spanish acronym for the 40,000-strong Workers Syndicate of Andalusia, a leftist trade union building a network abroad. 

When an economy turns to Roy Bi unions can become Ro gangs or demonstrators, because they are a component of the O police if O are biased to Oy criminals then they lose strength. For example a right wing Roy economy might have O policed biased to Oy corruption, allowing criminals to rob if they pay bribes. This can cause Ro demonstration, this can also happen with Oy conmen in finance in the GFC.  

It’s Oct. 4, a strike is on, no shops are open, and the sidewalks are lined with hulking members of Spain’s Guardia Civil and the local police force, clean-shaven and dressed in black. The demonstrators’ chants resound, rhythmic and rhyming, in Spanish, punctuated by clenched fists raised high. “¡Que no! ¡Que no! ¡No queremos pagar la deuda con la salud y educación!” (“No! No! We do not want to pay off debt with health care and education!”) and “¡El pueblo unido jamás será vencido!” (“The people united will never be defeated!”)

Ro cooperation can be against Oy individuals. 

 Half of Jódar’s 12,000 residents, who are mostly jornaleros, or day laborers, are out of work and receive no unemployment benefits. “The government is answering our demands for jobs with repression,” says one marcher. “And now they’re holding our leader.”

A Roy economy can do better by nationalizing property as G then employing people by the state, better than having them do nothing. This also happens in thrid world economies where scarce resources cause high unemployment because any businesses get trampled and robbed like a tree in the savannah by animals.

Immigration: Giant low-hanging fruit | The Economist

Immigration: Giant low-hanging fruit | The Economist

Giant low-hanging fruit

Nov 15th 2012, 20:19 by R.A. | WASHINGTON
THIS week's Free exchange column takes a look at the case for more immigration into the rich world—a lot more:
The economic case for migration is similar to that for free trade. Trade benefits countries by letting workers specialise in activities in which they are relatively more productive, raising output. And the larger market created by trade spreads the fixed costs of innovation more thinly, encouraging the development of new goods and ideas. Governments began the long march towards trade liberalisation after grasping that its upsides outweigh its costs, leaving a surplus large enough to compensate the losers.
This can work in Biv societies trading with each other because they have plentiful Gb resources, this makes trade a positive sum game where each side benefits. Some might gain less than others but they can usually profit elsewhere in a rich resource economy. However this fails in a Roy society where they have a negative sum game, the idea is to minimize losses. Adding immigrants is like adding more R animals to an area with not enough food, it becomes necessary for each to minimize costs to survive. Instead of free trade causing specialization and growth it might cause the losers to not survive at all, this can create areas of poverty and unemployment. There is no surplus but a deficit being created, the objective is to minimize the deficit from it.  

Immigration is an afterthought, in both practice and theory. In traditional trade models wages converge across trading partners with similar technologies even without migration, a phenomenon winningly branded “factor-price equalisation”. Sadly, factor-price equalisation is a real-world rarity. As of 2000, for instance, a worker in Mexico earned a wage 40% that of a Mexican-born worker of similar education and experience working in America.
Most of this wage gap is down to productivity differences, stemming from disparities in the quality of infrastructure, institutions and skills. An individual worker, however talented, cannot hope to replicate the fertile environment of a rich economy all on his own. But transplanting a worker into rich soil can supercharge his productivity. A Mexican worker earns more in the United States than in Mexico because he can produce more, thanks to the quality of US technology and institutions.
If there are unused Gb resources then adding more B workers can in effect be like planting more trees, more businesses grow from them. However Mexico is more Roy and the negative sum game of minimizing costs dominates there.

The upshot is that advanced economies could take an an awful lot of new immigrants without much hurting native wages.

This situation can be viewed with future robot workers, they act like real workers in that they consume goods for fuel like food and need to be housed and looked after like housing and health care. If they can work for cheaper than humans then this only produces extra wealth in Gb abundance, they might however consume much of these resources without benefiting anyone but themselves.

But the huge gains in productivity enjoyed by the migrants themselves add up to a substantial impact. Economist John Kennan reckons that the average migrant could expect a rise in income of perhaps $13,000, well more than 100% of what they would earn in their home country. And when you begin to add up all those higher incomes you get some really enormous numbers:
In a recent report Sharun Mukand of the University of Warwick calculates the effect of movement by half of the developing world’s workforce to the rich world. Such a vast migration could never happen in practice, of course, but as a thought exercise it is instructive. If migration closes a quarter of the migrants’ productivity gap with the rich world, their average income would rise by $7,000. That would be enough to raise global output by 30%, or about $21 trillion. Other studies find even bigger effects. A 2007 paper by Paul Klein, now at Simon Fraser University, and Gustavo Ventura, now at Arizona State University, reckons that full labour mobility could raise global output by up to 122%. Such gains swamp the benefits of eliminating remaining barriers to trade, which amount to just 1.8-2.8% of GDP, reckons Mr Mukand.
It could also be argued that if many American moved to Africa that the GNP would rise there as well, however in many cases the superior training of Americans would just put others out of work.

The most striking thing about the $21 trillion estimate is that it is really quite conservative by the standards of such computations. And yet that's equal to the combined annual output of America and Japan!
The piece discusses common economic criticisms of open immigration—that native wages would be harmed, that rich-world government budgets would suffer, and that brain drain would leave those left behind without hope—and generally finds them wanting. It does not deal with issues of assimilation or the cultural complications of mass migration. My feeling is that those concerns are also very likely to be overstated by critics, but I also think the main takeaway from the column ought to be the sheer size of the potential here.

This potential can only be estimated by looking at what Gb resources are available for them.

Austerity Italian Style - YouTube

Austerity Italian Style - YouTube

BLACK: Well, I just got back from Reggio di Calabria in Italy, which is that toe part
that looks like it's kicking Sicily, and a conference on modern monetary theory. I have
a prop on all of this. And we were talking about austerity, Italian style, and some remarkable
The first, while we concentrated on Spain and Greece and their Great Depression levels
of unemployment, unemployment is very high and rising in Italy. But the real story is
among young adults. And the unemployment rate among young adults is surging, and it's already
in the--closely approaching 40 percent, which is to say, it's nearly at the levels of young
adult unemployment in Spain, and in Greece as well.

When an economy is iv-B it is like a weed, it can grow quickly with resources even if a stimulus. It can also collapse even more quickly with austerity. A V-Bi economy can handle austerity better because it averages out good times and bad with savings and insurance. Iv-B is highly innovative and can mutate to new conditions, it can grow to an economic stimulus but then just collapse. It is like a weed that only grows with a particular fertilizer but had adapted to only that. Germs as R might adapt to a particular host and die out without being able to jump to another species.
And so you have this paradox of Italy, where, you know, in the variant of the old joke that
there are three things that are important in terms of real estate, location, location,
location, there are three things important to Italians, it's always said: family, family,
family. But Italians are--first, they don't have a lot of kids. Their fertility rate is
1.3, so way below replacement rate. And second, they are increasingly causing their kids to
emigrate, because there is absolutely no prospect of a good job in Italy for younger people.

Younger people are often at the base of the plant, they can have support from Bi families but need to find their own resources to grow like a plant does. For example they might need to find a job to get a car, a house, furniture, spouse, etc. In Roy they still need to do this but they are more often the focus of Oy conmen and crooks on G public land. 
And, you know, in the old days, this was typically peasants who were leaving, but nowadays it's
their most educated folks. You get your university degree--which you're going to essentially
do for free, still, in Italy, minus some fees--and then you have to emigrate because there are
no positions.

When an economy turns Roy people can become nomadic on this G public or abandoned land or opportunities looking for GB greener pastures to settle on as private property. 

And those problems that I talked about are vastly worse in the south of Italy.
These are where the really poor places were.
So we were talking about that and the insanity of an austerity principle that is tearing
Italy apart and destroying family, left right and center.

Stronger austerity drains the V-Bi savings so people end up fighting for survival on their own, they need to maintain insurance to quench the chaos or the system can go into free fall to a floor in areas.

I mean, nowadays the only good
news is with modern technology you might be able to talk to your kids more cheaply when
they're 5,000 miles away.
JAY: How much of this is recent, in the sense these new austerity measures that have kicked
in over the last couple of years?
BLACK: Well, it's not entirely recent. In other words, it's a trend that's gotten much
worse. But that trend had existed for much of this century, because Italy was simply
not producing new high-tech jobs very well.
But for us the craziness was that we were talking with Italian professors of economics,
you know, perfectly intelligent people, but often big believers in austerity, even though
they said, yes, austerity is causing greater unemployment, yes, it's causing the kids to
emigrate, yes, we have no answer other than austerity, right, there is no alternative,
which is precisely what we then went down to say--well, in fact, there are excellent
alternatives; you shouldn't be doing this.

 Austerity can be bad but just adding resource can cause Iv-B like weeds to just mutate and waste them, the need is to build stable and strong Biv businesses that last not zombie color disconnects.

What Can Obama Do for the Labor Movement? : The New Yorker

What Can Obama Do for the Labor Movement? : The New Yorker

Steven Greenhouse, the labor reporter for the Times, has a fascinating piece in Thursday’s paper about the fact that union membership, as a proportion of the work force, has fallen to the lowest level since 1916.

An Iv-B economy tends to break up both V management and Bi unions so people are more competitive and deceptive.

While the article focusses on the challenges facing the labor movement, it also involves larger political and economic issues. In particular, it raises the question of what, if anything, President Obama can do to help unions reverse decades of decline. And if the Republicans’ control of the House means he can’t do anything much, what does that mean for his pledge to increase the living standards of middle-class Americans?
The union-membership figures are stark and getting starker. Sixty years ago, about one in three workers were union members. Today, it’s one in nine. Last year, the economy as a whole added about 2.4 million jobs, but union membership fell by 400,000. As a proportion of the labor force, the number of union members fell from 11.8 per cent in 2011 to 11.3 per cent in 2012. Outside of the government sector, where more than a third of employees are union members, the unions have even less sway. Just 6.6 per cent of the private-sector labor force is unionized, which means that fourteen out of fifteen workers aren’t union members. Most of them have never had anything to do with the labor movement and never will.

Workers can be B or Bi, B workers compete with each other to get better wages while Bi workers cooperate with each other to use their numbers for higher wages. V management has been weakened for decades as well, for example antitrust legislation and price collusion being illegal. So companies are more Iv now which means they compete more on price, with weaker I-O regulators they look for B workers who are cheaper in the short term to help competition. For Bi unionism to grow it needs stable V management to collude more in prices with other companies, just like Bi unions collude with workers in other companies to raise. Iv-B can increase innovation to counter lower wages, however workers are more vulnerable to companies collapsing. 

Wednesday, February 27, 2013

Fired America | The Economic Populist

Fired America | The Economic Populist

There is a complete disconnect in Washington from the quiet desperation of American lives.   While politicians chatter talking points and claim lobbyists' agendas are somehow sane economic and labor policy, a full 23% of Americans have been fired in the last four years.   That is disposable work syndrome and that is the crisis of our time, not the rhetorical fictional spin spewing from the mouths of politicians.

This can be a disconnect between V-Bi and Iv-B. The Iv-B economy grows and then collapses like weeds run out of nutrients, then the economy is stagnant V-Bi where Iv and B people can be left to sink or swim on their own. V companies can be bailed out by the government which acts like an insurance company, many Bi workers use union pressure and connections to get their own kind of insurance against collapse. 

Of the people fired who managed to get another job,  a full 48% took a step down in position with 46% taking a job below their skill or education level.    A whopping 54% reported their new job pays less.  A third took over a 30% pay cut to get a new job.  Another third got hit with a 11-30% cut in pay.    That's economic devestation for millions of Americans, even while working.
The economic impact is permanent to most families.  The majority of Americans, 56%, now have less in savings than before 2008.   Thirty-eight percent reported they are tapped out financially.  Even those with jobs lost savings as over one third saw their nest egg shrink.  
Over half of people said they were running through their savings just to get by and 30% said they were borrowing money.

This causes more chaotic collapses as people have to sell assets to survive, V-Bi savings are dropping because the weak I-O policing of the economy caused the market to separate into inefficient booms and busts or stagnation.