| | | | | | | | | | | Axios Markets | | By Matt Phillips and Emily Peck · Sep 06, 2022 | | 👋 Welcome back. Labor Day is behind us but we're still mulling the state of the workplace ... plus, the latest on the energy crisis overseas. Today's newsletter, edited by Kate Marino, is 1,016 words, 4 minutes. | | | | | | 1 big thing: Price controls are no longer a '70s relic |  | | | Illustration: Shoshana Gordon/Axios | | | | The inflation, energy and security shocks walloping the world economy are driving a kind of government intervention in markets last seen in the 1970s, Matt writes. Why it matters: Price controls were largely abandoned after the '70s, as both American and global policy shifted toward less government involvement in the economy. - It marked the beginning of the end for the bipartisan Keynesian consensus, which emphasized the government's role in running the economy. In its place, a greater reliance on markets emerged during the Reagan administration — and dominated the post-Cold War era.
State of play: On Friday, finance ministers from the Group of Seven major economies pledged to put in place a plan to limit the amount of money Russia makes from oil sales, effectively forming a buyers cartel. - Separately, European Commission officials signaled plans last week for an "emergency intervention and a structural reform of the electricity market," amid sky-rocketing power prices and Russia's decision to cut off westward gas flows.
The big picture: For decades, governments relied on largely apolitical market mechanisms to allocate commodities from sellers to buyers based on the basic logic of economic efficiency. - But now, energy markets have become theaters of economic war, and governments are being forced to play a larger role.
What they're saying: "When Russia stops exporting gas, or the Western countries decide to put on sanctions, the markets that are affected by this are not governed by the laws of supply and demand. They're governed by the political intervention," says Isabella Weber, an economics professor at the University of Massachusetts, Amherst. The other side: Orthodox economics has long argued that virtually all price controls are counterproductive, and almost inevitably lead to shortages. - That's because below-market prices artificially elevate the demand for goods, and with prices locked, producers see little reason to boost output.
Flashback: In 1971, President Nixon took the remarkable step of imposing price and wage controls, in an attempt to try to corral the inflation that threatened his re-election campaign the following year. - The controls stayed in place until 1974, though they were largely seen as being ineffective in countering price increases.
- Their mixed record in the '70s obscured the fact that during emergencies such as World War I and World War II, they were important economic tools.
The bottom line: "The pendulum is swinging back in the other direction," Daniel Yergin, energy expert and co-author of "The Commanding Heights," a history of the shift from state economic control to the market-based system, tells Axios. Go deeper. |     | | | | | | 2. Catch up quick | | 🔥 Russia says it's ending gas flows to Europe via main pipeline until sanctions are lifted; European stocks and currency dive. (FT) 🍔 California governor signs fast-food accountability bill into law. (Axios) 🚗 Volkswagen plans to list its Porsche brand, a deal that could be one of the largest IPOs in years at around $84 billion. (WSJ) 📉 The SPAC that agreed to merge with Truth Social may have to liquidate, rather than complete the deal. (Reuters) | | | | | | | | 3. Not everyone's back to school |  Data: Bureau of Labor Statistics; Chart: Axios Visuals The teacher shortage continues to hold back the labor market, Emily writes (from a quiet house because her kids went back to school today). What's happening: The number of workers with jobs in local education (the folks who work at the public K-12) is down nearly 363,000 from before the pandemic, according to last week's August jobs report. - "While children have started going back to school, teachers, it appears, have not," ZipRecruiter chief economist Julia Pollak wrote in a new last Friday. "Public schools are battling a chronic shortage of teachers and school support staff."
- The jobs site recently partnered with the White House to launch SchoolJobsNearMe, to address what it's calling a "crisis." You can find listings there for everything from crossing guards to librarians to school nurses.
Go deeper: The government is having a hard time hiring | | | | | | | | A message from Axios | | Six steps to deliver clearer business communications | | |  | | | | Axios HQ's checklist shares six elements of Axios' Smart Brevity® method — simple steps to help you think more clearly, communicate more effectively and keep stakeholders engaged. - It works for all your vital updates, from internal team priorities to client or investor communications.
Get the free checklist | | | | | | 4. The lasting impact of "right to work" laws |  Data: NCSL; Map: Kavya Beheraj and Nicki Camberg/Axios Twenty-seven states have "right to work" laws in place that prevent private-sector unions from collecting fees from all members, Emily writes. Why it matters: Unions have mostly adapted to these laws, and their popularity has died down since the 2010s. However, these laws remain a headwind as union organizing efforts pick up now, labor proponents say. - They also serve to keep wages lower for all workers in the states where they've been enacted.
- For decades, the laws have been a way to depress union membership and divert resources away from bargaining, said Robin Clark-Bennett, director of the labor center at the University of Iowa College of Law.
State of play: Missouri voters overwhelmingly voted against a state version of the law in 2018, and no law has passed since. "It's become an increasingly unpopular policy," said Elise Gould, an economist at the Economic Policy Institute. - Of note: The Pro Act bill, which passed the House last year, would override these laws but hasn't gained any traction in the Senate.
Flashback: In 2018, a Supreme Court decision called Janus v. AFSCME essentially made the whole country "right to work" for public-sector unions — and many predicted apocalyptic consequences for those unions. - So far those dire predictions have not come to pass, as unions stepped up organizing efforts to prevent membership from falling off a cliff, a 2020 Bloomberg Law investigation found.
- "Unions at least are realizing that with or without right to work, they've got to pay more attention" to keep members engaged, said Jon Hiatt, a labor lawyer at the Solidarity Center, who spent more than 20 years at the AFL-CIO.
Go deeper. | | | | |  | | | | If you like this newsletter, your friends may, too! Refer your friends and get free Axios swag when they sign up. | | | | | | | | 5. 🎨 74 years of labor art |  | | | Images: Division of Political and Military History, National Museum of American History, Smithsonian Institution | | | | Going back to 1948 (Statue of Liberty poster above) and earlier, union art has spread labor's message through posters, buttons, clothing and more. - The art shows pride in particular trades — or advocates for specific demands like fair wages or safety measures.
Between the lines: The artistic style has shifted throughout the movement's history. But the message is quite consistent. - See 9 posters, curated by Axios' Aïda Amer, Lindsey Bailey and Natalie Peeples.
| | | | | | | | A message from Axios | | Six steps to deliver clearer business communications | | | | | | | | Axios HQ's checklist shares six elements of Axios' Smart Brevity® method — simple steps to help you think more clearly, communicate more effectively and keep stakeholders engaged. - It works for all your vital updates, from internal team priorities to client or investor communications.
Get the free checklist | | | | 1 person we lost: Barbara Ehrenreich, the brilliant author of more than 20 books, who died last week at the age of 81. She was best known for "Nickel and Dimed: On (Not) Getting By in America," a 2001 book in which she worked "undercover" in a series of minimum wage jobs to explore what it was actually like to work and live on such a low wage. In later years, she supported projects to give voice to low-wage workers to tell their own stories — including the 2019 bestseller "Maid," which was recently turned into a Netflix series. |  | | Why stop here? Let's go Pro. | | | | | | Axios thanks our partners for supporting our newsletters. If you're interested in advertising, learn more here.
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