“Barking Up The Wrong Tree”: Ted Cruz Keeps Talking About ‘Wages’ — But He Won’t Support Raising Them
“Washington” is keeping wages down and impoverishing the American middle class, at least according to Ted Cruz, who has adopted economic populism as a line of attack against the political establishment as a routine part of his stump speech in recent months.
The Texas senator has tried to link rival Donald Trump to Democratic frontrunner and perennial enemy of the American right, Hillary Clinton. But the argument that the federal government, and by extension the Obama administration, was responsible for the decline in wages of American workers, was yet another baseless charged levied against a rhetorically-convenient “Washington establishment.”
Where to start. It’s unclear whether or not Cruz believes in a minimum wage. He has argued against a minimum wage, saying it leads to job losses among American minority groups. “Every time we raise the minimum wage, predictably what happens is a significant number of people lose their jobs, and they’re almost always low-income, they’re often teenagers, African Americans and Hispanics,” he said, voicing concern for demographic groups that are unlikely to vote for him anyhow, and for whom his policies don’t reflect the concern of his talking points.
In Cruz’s mind, the minimum wage is best left to the states. While he assails the loss of American jobs, sounding much like a vague, rehearsed mashup of Donald Trump and Bernie Sanders in their criticism of outsourcing, his policies have a different end in mind: employment above all else.
“I think it’s bad policy,” said Cruz on CNBC, criticizing the existence of a minimum wage. “And you know, one observation I make to folks is next time you go to a fast food restaurant and you start ordering on an iPad, you’re seeing the minimum wage.”
During a Senate hearing in 2014, Cruz spoke out against President Barack Obama’s proposed federal wage increase to $10.10. He said:
The undeniable reality, the undeniable truth, is if the President succeeded in raising the minimum wage it would cost jobs for the most vulnerable. The people who have been hurt by this Obama economy would be hurt worse with the minimum wage proposal before this body. In 2013 the President in his State of the Union address proposed raising the minimum wage to $9.00. Now a year later the request has magically changed to $10.10. The only reason (there’s no economic justification) the only reason is politics. And I suppose if the approval ratings of democratic members of this body continue to fall in another month we’ll see a proposal for $15.00 an hour and then maybe $20.00 or $25.00 an hour. But I think the American people are tired of empty political show votes. The nonpartisan congressional budget office says that raising the minimum wage could cost a loss of 500,000 to 1 million jobs.
Cruz is barking up the wrong tree. It is not the $7.25 an hour minimum wage that made companies like Carrier, whose managers were infamously recorded laying off 1,400 at its Indianapolis plant earlier this year, outsource those jobs to Mexico. As the Economic Policy Institute pointed out in a 2003 report, NAFTA resulted in a period of job growth in the U.S. between 1994 and 2000. But starting in 2001, jobs started disappearing. “Job losses have been primarily concentrated in the manufacturing sector, which has experienced a total decline of 2.4 million jobs since March 2001,” read the institute’s report. “As job growth has dried up in the economy, the underlying problems caused by U.S. trade deficits have become much more apparent, especially in manufacturing.” It pointed to systemic turmoil in internationalized labor markets, the result of free trade agreements, which allow companies to move to where living costs (and thus labor) are cheapest.
But for Cruz, the problem has always been the minimum wage, despite evidence to the contrary: Another EPI report released in 2013 outlining the benefits of increasing the minimum wage to $10.10 concluded, “Raising the federal minimum wage to $10.10 by 2016 would lift incomes for millions of American workers and provide a modest boost to U.S. GDP.”
Despite the doomsday predictions from Cruz and the rest of the 2016 Republican field, the report also predicted large increases in employment. By increasing the federal minimum wage to at least $10.10, low wage earners would experience a recovery of real income the likes of which we haven’t seen in decades.
However, the federal minimum wage has not budged by even a penny, leaving wage increases largely to states or large American cities, exactly the sort of decentralized political process Cruz would be expected to support: Los Angeles, San Francisco, Seattle have all instituted $15 per hour minimum wages following concerted efforts by local organizations that stemmed partly from frustration over partisan gridlock in Washington. Both California and New York’s governors signed bills this year approving wage increases to the $15 an hour benchmark over a period of time. A total of 29 states, and Washington, D.C., have instituted their own minimum wages exceeding the federal minimum wage, as a result of slow progress on the federal level.
Since the minimum was last raised to $7.25 in 2009, it has lost 8.1 percent of its purchasing power as a result of inflation, according to Pew Research. The OECD has described the American minimum wage as an outlier amongst wealthy, industrialized nations — it should really be around $12, if we were to use GDP per capita as a guide. American workers are in desperate need of a minimum wage increase, not just poorly paid employment.
By: Saif Alnuweiri, The National Memo, April 29, 2016
“The GOP Sounds Of Silence”: From ‘Where Are The Jobs?’ To ‘Where Are Republicans On Jobs?’
The economic news on Friday was even better than optimists expected: the United States added nearly 300,000 jobs in December, wrapping up the second best year for the American job market in over a decade. In fact, looking at the last two years combined, 2014 and 2015 were the best back-to-back years for job creation since 1998 and 1999, at the height of the dot-com boom.
While no mainstream American politicians publicly root against the U.S. economy, the fact remains that this strong job growth must be baffling to Republicans. GOP orthodoxy, repeated ad nauseam, is that President Obama’s domestic agenda – the Affordable Care Act, higher taxes on the wealthy, Wall Street regulations, environmental safeguards, et al – is crushing the economy and stifling the American job market.
The only way to put Americans back to work, Republicans insist, is to do the exact opposite of the policies that cut the unemployment rate from 10% to 5%.
Obviously, that’s a tough sell for anyone with even a passing familiarity with the facts, but it got me wondering: how exactly did Republican officials and candidates respond to Friday’s good news?
When I say they reacted to jobs report with silence, it’s important to stress that I’m being quite literal. For years, the Republicans’ economic line was, “Where are the jobs?” With over 14 million new private-sector jobs created in the last 70 months, the new, more salient question has become, “Where are the Republicans on jobs?”
Over the weekend, for example, I checked House Speaker Paul Ryan’s (R-Wis.) official blog, which used to publish a statement with the release of every new jobs report. Friday, however, featured plenty of new content, none of which referenced the job numbers.
The Republican National Committee’s official blog also used to issue once-a-month press releases on unemployment, but on Friday it said nothing. The same is true of RNC Chairman Reince Priebus’ Twitter feed.
There was similar silence from Senate Majority Leader Mitch McConnell (R-Ky.) and the Senate Republican leadership team.
How about the presidential candidates? Nothing from Donald Trump. Or Ted Cruz. Or Marco Rubio. Or Jeb Bush. Or Chris Christie.
Look, I don’t expect GOP presidential candidates to issue a statement celebrating President Obama’s successes in putting Americans back to work after the Great Recession. And I certainly don’t imagine Republicans are going to announce a plan to reevaluate all of their bogus assumptions about Obama’s agenda and the economy.
But we’ve reached the point at which Republicans no longer seem interested in talking about job creation at all. It’s as if they hope ignoring the issue altogether will keep people from noticing one of the most remarkable turnarounds in the job market in a generation – which might even work, since much of the political world barely stopped to notice Friday’s jobs report.
Republicans could say the good news will be even better if they’re elected. They could celebrate strong job growth and make the case that Obama deserves no credit. They could say something about the issue that, up until quite recently, dominated the political debate like no other.
But for now, it seems the GOP has decided the easiest course of action is to pretend the good news on jobs simply doesn’t exist. Up until fairly recently, such a scenario would have been hard to even imagine.
By: Steve Benen, The Maddow Blog, January 11, 2016
“Move From Unemployment Insurance To Income Insurance”: Why The Sharing Economy Is Harming Workers And What Must Be Done
In this holiday season it’s especially appropriate to acknowledge how many Americans don’t have steady work.
The so-called “share economy” includes independent contractors, temporary workers, the self-employed, part-timers, freelancers, and free agents. Most file 1099s rather than W2s, for tax purposes.
It’s estimated that in five years over 40 percent of the American labor force will be in such uncertain work; in a decade, most of us.
Already two-thirds of American workers are living paycheck to paycheck.
This trend shifts all economic risks onto workers. A downturn in demand, or sudden change in consumer needs, or a personal injury or sickness, can make it impossible to pay the bills.
It eliminates labor protections such as the minimum wage, worker safety, family and medical leave, and overtime.
And it ends employer-financed insurance – Social Security, workers’ compensation, unemployment benefits, and employer-provided health insurance under the Affordable Care Act.
No wonder, according to polls, almost a quarter of American workers worry they won’t be earning enough in the future. That’s up from 15 percent a decade ago.
Such uncertainty can be hard on families, too. Children of parents working unpredictable schedules or outside standard daytime working hours are likely to have lower cognitive skills and more behavioral problems, according to new research.
What to do?
Courts are overflowing with lawsuits over whether companies have misclassified “employees” as “independent contractors,” resulting in a profusion of criteria and definitions.
We should aim instead for simplicity: Whoever pays more than half of someone’s income, or provides more than half their working hours should be responsible for all the labor protections and insurance an employee is entitled to.
In addition, to restore some certainty to people’s lives, we need to move away from unemployment insurance and toward income insurance.
Say, for example, your monthly income dips more than 50 percent below the average monthly income you’ve received from all the jobs you’ve taken over the preceding five years. With income insurance, you’d automatically receive half the difference for up to a year.
It’s possible to have a flexible economy and also provide workers some minimal level of security.
A decent society requires no less.
By: Robert Reich, The Robert Reich Blog, November 27, 2015
“A Win For Workers”: Perfect Timing For The New Overtime Rule
The June jobs report (223,000 jobs added and unemployment rate down to 5.3%) extends the longest period of private sector job growth in our country’s history.
But there are two things that are causing concern. First of all, the labor force participation rate (LFPR) dropped 0.3 percentage points to 62.6%. As I’ve written before, it is important to keep in mind that there are several factors that affect this number:
1. The increasing number of baby boomers who are retiring
2. The increasing number of high school graduates who are going directly to college
3. The number of people who find it difficult to get a job because of a criminal record
I haven’t seen anyone attempt to quantify this, but it would also be interesting to find out the number of people who are voluntarily leaving the job market for early retirement (or other reasons) because Obamacare has made that a viable alternative. That might also be a factor.
Finally Betsey Stevenson, a member of the Council of Economic Advisors, points out that the change in LFPR might be credited to something as simple as the fact that the survey tracking it was distributed earlier than normal last month.
Taking all that into consideration, the big focus on the LFPR drop is probably over-heated. Of all the potential explanations, the one that should spur us to action is the need for passage of something like the REDEEM Act, which would allow non-violent offenders to have their criminal records expunged.
The other cause for concern in the jobs report is much more significant – little to no increase in wages. That’s why this is the perfect time for President Obama’s new overtime rule. In the best case scenario, people who are working overtime but not getting paid for it would get a big pay increase.
Republicans who are criticizing the new rule suggest that it will mean fewer jobs. That is completely counter-intuitive. What many employers are likely to do is hire more employees in order to avoid paying overtime. That means more jobs, not fewer.
But here’s where the timing is important. We are now at or near what economists consider “full employment.” If the new overtime rule had been implemented during a time of high unemployment, businesses would have likely hired those new employees at lower wages – thereby actually depressing wage growth. That is highly unlikely now.
Due to federal regulations regarding the need for public comment on these kinds of changes, the new overtime rule won’t go into affect until next year. When it does, employers will have two choices, (1) give existing employees a raise via overtime pay, or (2) hire more employees. Either way it’s a win for workers.
By: Nancy LeTourneau, Political Animal Blog, The Washington Monthly, July 4, 2015
“The Historical Trends Could Hardly Be Clearer”: Strong February Job Numbers Underline Obama’s Performance — And GOP Failure
When Republicans complain about economic policy under President Obama – and especially job growth, as Jeb Bush does almost every day – someone might inquire how they think he compares with the last couple of presidents from their party (both of whom happened to bear the surname Bush). Underlined by February’s data released today, Obama’s record is outstanding and continues to smash the idiotic economic predictions promoted by Republicans (and their Fox News echoes) about the stimulus, the deficit, the Affordable Care Act, the auto bailout, the federal budget, and nearly every policy of this administration.
Perhaps someday a television personality on a Sunday chat show will muster the tiny amount of courage needed to pose the question to a guest like Jeb: Why do Democratic administrations result in so many more jobs than Republican administrations? This bold interrogation wouldn’t require much research effort. Helpful information that contrasts the success of recent Democratic presidents — and the abject failure of the GOP presidents who preceded them — may easily be found here, for instance (h/t Eclectablog and our friend @LOLGOP). And many other places, too.
The short version is that under Barack Obama (6.7 million so far) and Bill Clinton (22.6 million), we saw the creation of nearly 30 million net jobs; under George H.W. Bush (2.6 million) and George W. Bush (1.3 million), just short of 4 million net jobs. Even if you award Bush 41 another couple of million jobs for the second term he never won, the essential point should not be lost on even the dimmest voter.
Overall, the historical trends could hardly be clearer. Even Democratic presidents who aren’t named Clinton or Obama tend to score far better than their Republican counterparts, whether named Bush or otherwise – and the consequences can be devastating.
By: Joe Conason, Editor in Chief, Editor’s Blog; The National Memo, March 6, 2015
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