Wednesday, January 2, 2013

Lessons From The Longshoremen

In the 1950's there were 35,000 longshoremen unloading ships in NY and NJ ports.  Today there are 15,000 longshoremen on the east and west coasts unloading more tonnage than they unloaded in the 1950's.
The nature of their work has also changed.  They operate sophisticated technology, and they unload, and load shipping containers instead of boxes.  They are more productive, and their work can't be relocated to low wage countries.  They also belong to strong unions.  Consequently, they earn more money than longshoremen in the 1950"s.  They have been able to share in the growth of productivity more than many other laborers in the US whose jobs can be relocated, and who are not represented in wage negotiations by unions.

This could be viewed as a story about the value of unions. At a deeper level, however, it raises questions about rising productivity and the availability of jobs. Productivity will continue to grow in the future, and fewer workers will be needed to produce the economic output that will be demanded.  That will not be a problem for many companies that can sell their products in countries with an expanding middle class.  It represents a real problem, however, in developed countries that will have a shrinking, or stagnant, middle class. Rising productivity in agriculture lowered the demand for farm workers, and they moved to cities to take jobs in the growing industrial sector. The post-industrial economy has not created enough high paying service jobs to replace those that were lost from deindustrialization in developed countries.

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