Full Employment Is A Worker’s Best Friend

On Twitter earlier today, Ned Resnikoff remarked that “Without once addressing it directly, this Mac McClelland piece makes the case for why we need organized labor.”

Maybe. Certainly “the Warehouse of Soul-Crushing Sadness” sounds like a pretty bad place to work. But I think the moral of the story here is the one she does directly address, the fact that sky-high unemployment deprives workers of all bargaining power:

A few days later, I had breakfast with someone who coincidentally works with the CEOs of logistics companies. Telling him about the conditions and the sterility and the mind-numbing sadness of the warehouse made him almost too bummed to eat his oatmeal. “Somebody did studies and spreadsheets and crunched those numbers,” he said, “and figured out that the cheapest way to get that job done is to treat people like that.” Which is important, he explained, because “the profit margins on those contracts are razor thin.” Of course. A lot of the Internet retailers’ merchandise is nearly worthless—ice princess star-shaped ice cube trays, cheap sunglasses, anthropomorphic stuffed bacon toys—and is sold for nearly nothing, often with free or reduced-price shipping.

Susie told me it’s pretty dispiriting to act as though her workers are as disposable as the products they’re shipping. But that’s just the way it is, she said. The logistics clients aren’t interested in spending money on a better or more sustainable work culture. Nor do they need to. There are 100 people employed in the warehouse I visited, and Susie could fire every one of them today without costing her bosses a dime of lost profits. She has applications from hundreds of people ready to take the job.

A strong labor union would certainly improve conditions at this warehouse around the margin. But there’s a real limit here, since the threat of the company losing its contracts and everyone ending up unemployed is going to be extremely severe. The real issue here is that instead of workers threatening to leave this crappy job and get a better one, people are clamoring to work at this warehouse. This is one small glance at why I keep urging progressives to start caring about monetary policy more. Nobody considers themselves a monetary policy activist. But if you’re interested in labor and working conditions, you’ve got to be interested in full employment. Full employment gives workers meaningful leverage. Mass unemployment gives it all to the bosses. In strict dollars and cents terms, I think everyone is better off with prosperity than with sluggish growth. But in terms of power, mass unemployment is a boon to bosses.