Since the summer, I have been using the lunch line at Jimmy the Greek (in First Canadian Place) as a crude measure for the reopening of the CBD in downtown Toronto. It is partially a joke. Those of you who know me will know I am a fan of Jimmy the Greek (and large filling lunches in general). But at the same time, it is a probably a fairly decent (but again crude) proxy for the utilization rate of the offices that sit above and around Jimmy. Pre-COVID the lunch lines were always long and there was usually nowhere to sit. In the spring of this year, I was often the only person there, single-handedly keeping Jimmy alive. But things picked up throughout the summer months and there was a significant spike this week, following Labor Day (see above tweet). This was the spike that many/most of us were predicting and it showed through in the Jimmy the Greek Reopening Index.

Well, just like that, the unofficial end of summer. Labor Day weekend. But I agree with Shawn Micallef: “Defy the crowd and keep enjoying summer.” There are still weeks of it left.

But given that it is Labor Day weekend, here are two things to think about. 

The first is a Financial Times article by Lawrence Summers where he argues that America needs unions more than ever and that, indeed, the central issue of American politics today is the “economic security of the middle class.”

Here is an excerpt that speaks to declining bargaining power on the part of labor:

“But I suspect the most important factor explaining what is happening is that the bargaining power of employers has increased and that of workers has decreased. Bargaining power depends on alternative options. Technology has given employers more scope for replacing Americans with foreign workers, or with technology, or by drawing on the gig economy. So their leverage to hold down wages has increased.”

It’s also worth mentioning that only about 6.4% of private sector workers in the U.S. are in a union today. This is a decline of almost two-thirds since the 1970s and is a good segue into the second thought of this post.

Two years ago Fred Wilson wrote a post on his blog (which he reblogged today) where he argued that “labor needs a mechanism to obtain market power as a counterbalance to the excesses of markets and capitalism.” 

But, that this mechanism needs a refresh. He calls it Union 2.0.

“However, like all bureaucratic institutions, the “Union” mechanism appears anachronistic sitting here in the second decade of the 21st century. We are witnessing the sustained unwinding of 19th and 20th century institutions that were built at a time when transaction and communications costs were high and the overhead of bureaucracy and institutional inertia were costs that were unavoidable.”

This makes perfect sense to me. 

At the same time, we can’t forget – and this is how Summers ends his article – that, today, “the most valuable companies are the Apples and the Amazons rather than the General Motors and the General Electrics.”

That tells me that what may have worked in the past will likely not work in the future.

Photo by Jonas Viljoen on Unsplash

Today is Labo(u)r Day in Canada and the United States.

It is the official end of summer for a lot of people, which is always a bit sad. (Unlike a lot of people I know, I’m not a huge fan of fall.) But primarily, today is a day to celebrate the labor union movement.

Fred Wilson wrote an excellent post on his blog this morning about this topic. I agree with him and he put it far better than I could this morning. So here are a few snippets:

When one looks back over the history of the development of the modern economy from the agricultural age, to the industrial age, to the information age, the development of a strong labor movement has to be one of the signature events. Capitalism, taken to its excesses, does not allocate economic value fairly to all participants in the economic system.

I am a fan of the idea that labor needs a mechanism to obtain market power as a counterbalance to the excesses of markets and capitalism. I think we can look back and see all the good that has come from a strong labor movement in the US over the past 150 years.

However, like all bureaucratic institutions, the “Union” mechanism appears anachronistic sitting here in the second decade of the 21st century. We are witnessing the sustained unwinding of 19th and 20th century institutions that were built at a time when transaction and communications costs were high and the overhead of bureaucracy and institutional inertia were costs that were unavoidable.

Click here for the full post.

On that note, I am in the market for new – ideally daily – blogs to read. Blogs such as this one, which generally focus on a particular topic but are written by one person and are a bit personal in nature. I find those are where the best online communities develop.

If you know of any, please leave the link in the comment section below. A lot of readers have also asked me for similar recommendations, so I am sure they would appreciate the suggestions.

Happy long weekend :)