ERU seminar: Economic crisis and the restructuring of wage setting mechanisms for vulnerable workers in Ireland

“wage setting mechanisms”?

is that double speak for social partnerships? bribing unions??

hey whatever happened to that wage setting mechanism called supply and demand

@Desmond Brennan

Too right. The place is infested with commies. Especially that fiscal research council. A hotbed for sure!

I have to seriously question the bona fides of the ICTU affiliated unions in setting up or funding a research unit that will:

influence policy outcomes that have the greatest effect on the achievement of equity and fairness in the political economy on the Island of Ireland, to the benefit of working people

These are same unions that pushed the government to sign the Croke Park deal, protecting permanent workers, some with bonanza salaries and pension entitlements, while at the same time the government, with union complicity, was dumping thousands of temporary and contract PS workers onto the street.
To fund research in light of union actions to date reeks of the worst kind of hypocrisy.

Nevertheless I wish Dr O’Sullivan well in her research into this very necessary area of research. I hope she displays an independence of mind in her research.

@Ned supply and demand, immigration increases supply…

Dork the Soviets tried “efficient resource allocation in a state economy” for 70 years, look where that ended up

@EIS
CBs in modern states plan everything – they control the money supply , but your western eyes just can’t see it.
If we were in a classical Gold standard system the motorway madness would have been impossible but for countries such as Saudia Arabia and a few others until extraction was complete.
The reason why the west is in a pure fiat system with no real reserve is to extract as much resourses as quickly as possible from various countries before others get their greedy little hands on the stuff.

Anyway the Spanish civil war was lost by the republicans because Stalin required Gold payment for guns & planes.
The Nazis just gave Fiat & resourses to Franco.
Things are not always as they seem.

However little old Ireland can’t solve global macro final payment problems – its best going back to a sovergin currency via CB defecit spending.
Magically you will find the western rail corridor full of people and our fuel imports / money exports collapsing.
(it looks like our petroleum imports priced in euros will be highest ever for 2011 despite a collapse in BTUs / energy slaves relative to 2007)

If it cannot go back to the punt , cannot default on private debt / raise taxes on fuel via a synthetic devaluation (taxes on fuel use are non optimal now as the local money supply is not expanding which means you get no demand anywhere even in the most efficient parts of the economy which means collapse soon follows )
PS
Leo Vs comment last night that intercity buses were more fuel efficient then DMUs was quite something.
DMUs are heavier but thats where it ends………… there is the little matter of rail friction , aerodynamic profile and the constant acceleration & deceleration road transport must make to avoid collisions.
Me thinks he is using American Amtrack train like data analysis although if like Amtrack there is only 8 people on the trains then their breakdown of fuel input costs could be accurate.

Its terrible to say but we were better off in the Sterling zone , post 1979 as economic planning here has been a biblical disaster.
Besides we were never sovergin post 1979 – that was optics , we were a toy of european integration with massive resourse allocation issues following from this decision.

@seafóid

“What do you think will happen when the Saudi wells run dry ?”

The world would move onto unconventional oil and gas, of which there is few hundred years worth of supplies, Canada alone has more oil than Saudis.

Anyways when will the Saudi wells run dry? when is this doomsday of yours coming??

The public sector unions have no need to worry about wage levels being reset for their members. Minister Howlin is looking after their interests. Croke Park at prayer.

The vulnerable are still overwhelmingly in the private sector.

22% under 25 unemployment in the UK
http://www.guardian.co.uk/business/economics-blog/2012/jan/18/unemployment-vicious-circle-coalition-isnt-working

What sort of future do those young people have there and elsewhere including Ireland? Will many of them even get to become members of the vulnerable employed class?

@EIS
The bubble was a credit leverage bubble.
Leverage is taking money from the future to spend today.

They took vast amounts of oil from the future without building a real capital base today.
For instance the 18th century economy economy needed to build technological capital before it can burn coal in 19th century combustion engines.
The 17th century economy burned coal but only up London chimneys – if it continued with this policey of spending tomorrow’s wealth without core technological capital creation it would have entered a malthusian nightmare in the 19th century.
Ditto for the post 1960s west……..LBJ , Nixon , Ford , Reagan etc etc or the people behind them reduced core capital creation to sustain consumption.

Therefore there is little energy remaining to transition to a nuclear future – I therefore see collapse coming…….
Capital expenditures were cut many years before July 1969 – the wests greatest fire got there on monetory fumes.
http://www.youtube.com/watch?v=tAjmoHDTEoA

The uber elite gave the proles a glimpse of a possible future and then shut wealth creation down.

This is how societies collapse…….slowly at first then you cannot help but feel the quickening.

@Alchemist
“The vulnerable are still overwhelmingly in the private sector.”

That is probably now true now but was not so at the beginning of the crisis. There have been very significant numbers of Temp and contract PS who have been sacrificed to protect the wages of the PS still in employment.

There was a different approach that could have been taken.
There wwere other choices.

@Seafoid

State intervention and subvention is the historical mission of ‘independent’ ireland.

Nothing changes, even in times of national crisis. Too many mouths in the nest to feed. Quote from piece:

“A new funding mechanism being introduced by Foras na Gaeilge has been strongly criticised by the 19 Irish language promotion organisations that currently receive their core funding from the body.”

@Seafoid
I would have to disagree with Aidan Harte although I am no fan of Fintan o Tool either.
Easy credit from CBs did not cause this crisis directly – (what I think he means by this easy credit is low interest rates)
I don’t think interest rates have much to do with anything other then they are a indicator of the tempo of wealth extraction.
Its all about the ratio of money(cash , gov bonds in goverment money systems & cash sometimes checking accounts in private money systems) to credit (deposits)
We now know that sovergin CBs control the interest rate on goverment bonds , not the infamous 1980s bond vigilantes as CBs have a monopoly control of money.
Back in the 60s CBs working under a monetarist philosophy started targeting interest rates more aggressively rather then the entire money supply to control inflation.
They got more & more worried about money value and less & less worried about credit deposit growth.
This meant that credit money produced in Commercial banks exploded relative to base money.
(Monetarists do not care about credit money creation apparently because they think their credit deposit is backed by a “asset” on a commercial banks balance sheet)

Think of it this way – Volcker in 1980 raised interest to a insane amount – lets say I purchased long term treasuries at 12%.
Interest rates could be double digits back then because there was still a vast amount of wealth to extract – thats all , interest on US Treasuries is just the risk free extraction rate.
Its all extracted out – hence the low interest rates of today.
Interest rates mean nothing really – its the ratio of money to credit baby.
What did I use the interest income for anyhow ?
I bought “investments”……see consumer durables…..
What core wealth was generated ?
These new “assets” were mainly consumer durables in the main (house & car loans etc)
These are not wealth generators – they are a outcome of wealth extraction – in this case a tempory one based on continued increases in finite fossil fuel extraction.

Although there was bouts of high inflation in the west over the next few decades there was never hyperinflation.
This was because new oil & more oil was being dug out of the ground – so the CBs utilised a tempory increase in the worlds capital base which was in fact a massive depletion event.

Looks like game over to me.
In the end there can be only one.
Gold or the $.
This will all implode in on itself.

I sense that the apparent proliferation of ostensibly centre-left or left-wing think-tanks highlighted by Desmond Brennan is inversely related to the traction being secured in the policy-making sphere by the centre-left and left (and the various sectional economic or environmental interests that sail under these flags). There may even be a causal relationship – from the latter to the former. Previously we had ‘social partnership’ which allowed sectional economic interests (some technically, but not in reality, part of the ‘left’) to cut deals with government that totally by-passed the Oireachtas – and we had a burst of Greenery in government. Not much of that left now. The right doesn’t need these think-tanks to make noise and drum up public support for policies favouring thier interests; they have direct access to government behind the scenes.

And there seems to be quite a bit of anger, frustration and puzzlement on the left that, following another bout of state-sanctioned havoc-wreaking by capitalism, people aren’t flocking in droves to their banner. Rather than confronting directly why so many people are repelled by their antics, the establishment of, and participation in, these think-tanks seems to provide some reassuring and comforting displacement activity.

There also seems to be this lingering affection for the ‘labour theory of value’; it contrasts neatly with the ‘labour theory of cost’ propogated by the right, much of the media (except in their case) and, sadly, many economists. The latter is based on the convenient fiction that the markets for all factors of production other than labour are operating efficiently – and that any inefficiencies in the final markets for goods and services are due to inefficiencies and rigidities in the labour market.

This is total and utter balderdash, and, even if there are inefficiencies and rigidities in various segments of the labour market, there are far greater inefficiencies and rigidities in other markets. But it is very convenient for the powerful and infliential narrow sectional economic interests to sustain and propagate this fiction of inefficient labour markets as it distracts attention from the rents and monopoly profits they are extracting.

The irony is that those on the left are so busy protecting the narrow sectional interests in their camp, advancing the benign omnipotence and omniscience of the state and castigating markets without any recognition of the benefits they generate that they fail to mount a convincing critique of the fiction being proagated by the right.