“Your Job Isn’t Safe Until Extremist’s Lose Theirs”: Tea Party Extremism Cost Millions Of Jobs And Risks Millions More
If Americans learn anything from this month’s shutdown-and-debt-ceiling debacle, they ought to realize that political extremism brings real costs—denominated in dollars and jobs as well as national cohesion and prestige—and that those costs are not small. So long as the Tea Party faction continues to wield its malign influence over the Republican leadership in Congress, the threat of further, even worse damage will not subside.
Everyone should heed the clear warning issued by Senator Ted Cruz (R-TX), his cohort on Capitol Hill, and the leaders of outfits such as the Tea Party Express and FreedomWorks, all enraged and determined to lash out again as soon as possible. “This was going to be a multi-stage, extended battle,” said Cruz, “but we’ve also seen a model that I think is the model going forward to defeat Obamacare, to bring back jobs, economic growth…”
Only a dwindling fraction of voters is still mesmerized by such demagogic nonsense, but their anger intimidates enough Republicans to ensure that Cruz and company can seek to sabotage the economy again—and they will. So it is vital for everyone to understand what these vandals have inflicted on us already.
We will probably not know the full cost of the shutdown and the near-default for several months, if ever, but fresh estimates are now arriving daily. According to Standard & Poor’s, the financial ratings agency, the shutdown alone reduced economic activity in the United States by at least $24 billion and cut growth in the current quarter by as much as 0.6 percent. That means a loss of thousands of jobs and billions in household income, just when the economy would traditionally surge upward for the holiday season.
But that is just the beginning of a much grimmer inventory of suffering, which can be traced back more than two years to the first episode of Tea Party debt-ceiling bluster. For that assessment, we can look to none other than the Peter G. Peterson Foundation—named for its creator, a former Republican Commerce Secretary and fanatical fiscal hawk—whose latest contribution to public discourse is a thorough study, with charts, of “the cost of crisis-driven fiscal policy.” Peterson’s full study is worth reading, but its essential points are simple enough.
The repeated manufacturing of partisan fiscal crises has created sufficient uncertainty to reduce growth since 2009 by as much as 0.3 percentage points annually—eliminating as many as 900,000 potential jobs.
Now add on the wrong-headed cuts in federal discretionary spending caused by budget sequestration—the awful “solution” to the 2011 debt crisis. That reduced annual growth by 0.7 points since 2010 and raised unemployment by almost a full percentage point, or 1.2 million lost jobs.
Finally, the report examines two possible economic scenarios that could follow a Treasury default: a “brief” recessionary interlude that would see unemployment jump to 8.5 percent, costing 2.5 million jobs, and a longer, deeper, more volatile recession in which joblessness would rise to 8.9 percent and more than three million jobs would be lost.
Just as disturbing as all this sad waste of human potential is the incredible pettiness of the goals pursued by the Republican leadership. Their ultimate, most pathetic demand was to deny health insurance to their own aides.
So when Ted Cruz and the Tea Party tell you their holy crusade against health care will “bring back jobs,” assume the opposite (and act accordingly). There is no bipartisan compromise on offer here— only more of the same ruinous obstruction, and worse.
Your job won’t be secure until they lose theirs.
By: Joe Conason, The National Memo, October 18, 2013
“A Steady Stream Of Untruths”: Everything You’ve Heard About Obamacare Being A Job-Killer Is Wrong
The U.S. government is now “shut down” thanks in large part to yet another attempt to put the brakes on the Affordable Care Act, or ACA. Yet this week, the law’s health care exchanges went on line, promising affordable insurance coverage for millions of Americans with pre-existing conditions or jobs that did not previously offer a health plan and to millions of the unemployed. Nevertheless, a steady stream of untruths about the law continues to pop up in newspapers, blogs and Facebook feeds.
One of these tropes is that the ACA is causing employers to cut back on hours for full-time employees so that they will not have to provide coverage (under the ACA, companies with more than 49 employees are required to offer health insurance coverage to those employees working 30 or more hours a week or face penalties). Typically, the evidence for the cutbacks in hours is that someone knows someone else whose hours were cut earlier this year in anticipation of the law taking effect. Many pundits have been even lazier, just stating that employers are cutting back hours without citing concrete examples.
The reality, though, is that there is no widespread trend of employers cutting their workers back to just under 30 hours because of the ACA. In July, my colleagues Dean Baker and Helene Jorgensen analyzed recent data from the Current Population Survey. They found that only 0.64 percent of the workforce was working between 26 and 29 hours a week in the first half of 2013. This number is only slightly higher than it was for the first half of 2012 (0.61 percent).
In other words, there is no evidence of a widespread trend of employers reducing hours to avoid providing coverage. That sentiment was recently echoed by Moody’s Mark Zandi, who said of the supposed trend, “I was expecting to see it. I was looking for it and it’s not there.”
The basic story is that, yes, there are a small number of firms that have cut down on the number of full-time employees recently. And yes, over time, the 30-hour cutoff could have some effect on hours as employers adjust to the law and new businesses open. Of course, some companies may go the opposite route and move part-time workers to full time, as was recently the case at Disney World.
Regardless, the promulgation of the idea that the ACA will transform the U.S. workforce into a part-time workforce and negatively impact employment in the United States is dead wrong.
By: Alan Barber, U. S. News and World Report, October 4, 2013
“It’s Really Not About Jobs”: Scott Walker Hopes The Public Doesn’t Remember His Campaign Pledge
When it comes to ambitious Republican governors eyeing national office, some notable GOP figures have a problem: job creation remains a top national priority, and their job-creation records are pretty awful.
That’s true of New Jersey Gov. Chris Christie (R), who’s among the worst governors in the country when it comes to employment, and it’s especially true of Wisconsin Gov. Scott Walker (R), who’s record on jobs is even worse.
As a candidate in 2010, Walker was so confident about what he’d accomplish, he made his campaign promise quite specific: elect him governor and he’d create 250,000 jobs in his first term. With Walker nowhere near his goal, and Wisconsin unlikely to make up the difference over the next year, the Republican is starting to take a “who, me?” approach to his pledge.
Governor Walker promised Wisconsin 250,000 new jobs again and again while campaigning in 2010. He said he’d accomplish that in his first term as governor. But the latest Milwaukee Journal Sentinel report puts Walker less than a third of the way there. He has less than a year and a half to create nearly 170,000 jobs to keep that pledge.
On Monday in Merrill, he carefully backed away from the specific number.
“My goal wasn’t so much to hit a magic number as much as it was, in the four years before I took office, when I was campaigning, I saw that we lost over 133,000 jobs in the state. I said, ‘it’s really not about jobs, it’s about real people, real jobs like those here, and more importantly, affecting real families all across the state,'” Walker said.
Got that? As a candidate in 2010, Walker said he’d create 250,000 jobs in four years. As a governor eyeing re-election and a presidential campaign, Walker is now saying, “It’s really not about jobs….”
Complicating matters, after a local NBC affiliate ran the story saying, “Walker backs off campaign jobs pledge at Merrill stop,” the governor’s office urged the station to take the story off its website.
Scott Walker, in other words, hopes the public doesn’t remember his 2010 promise, and hopes news organizations won’t remind them.
Also note, when asked about his poor record on job creation, the Republican governor has struggled to come up with a defense. In April, he blamed protesters who opposed his union-busting efforts in 2011, as if his policies were their fault.
While serving as governor and running for a second term, Walker is also co-writing a book with Republican pundit Marc Thiessen, a Washington Post columnist and former President George W. Bush speechwriter.
By: Steve Benen, The Madow Blog, August 30, 2013
“No, Walmart Doesn’t Create Jobs”: Contrary To The Happy Talk, It Actually Kills Them
Because it’s a such a slow news day, and because the DC big box living wage bill is still in the news, I thought I’d write about the Walmart piece I published in Salon.com earlier this week. First, an update on that living wage fight, which I’ve written about before on this site. The bill, which would require Walmart and other big box retailers to pay a minimum wage of $12.50 an hour, passed the DC City Council. It needs the signature of DC Mayor Vincent Gray to become law, but Gray hasn’t received it yet. There have been suggestions that he’s leaning toward a veto and that Council Chairman Phil Mendelson has delayed sending the bill to Gray’s desk because he’s working to shore up support for a veto-proof majority. Walmart has threatened to cancel plans to open new stores in DC if the bill is enacted.
One of the most compelling-seeming arguments that the pro-Walmart forces have been making is that DC should reject the bill and welcome Walmart into the community, because Walmart would create much-needed jobs. So I decided to look at what the research says about Walmart’s impact on employment. Guess what? Contrary to the happy talk, Walmart does not create jobs. Actually, it kills them.
Here’s why: first, at the local level, all Walmart does is put mom-and-pop stores out of business. The overwhelming body of evidence, including the most rigorous peer-reviewed studies, suggests that when Walmart enters a community, the result is a net loss of jobs; at best, it’s a wash. In fact, the biggest, best scholarly study about the impact of Walmart on local employment was done by an economist at University of California at Irvine named David Neumark, who is not exactly a wild-eyed liberal. He’s the kind of economist, actually, who writes anti-minimum wage op-eds for the Wall Street Journal.
The devastating impact Walmart has had on jobs becomes most clear when you go macro, and look at its impact not just locally, but on the national economy. In its relentless quest for low prices, Walmart strong-arms its suppliers to cut labor costs to the bone. What this has meant in practice is that many suppliers have been forced to lay off workers and ship jobs to low-wage countries overseas. Because of Walmart, countless jobs in the U.S. have been lost, mostly in manufacturing.
I’ve been thrilled by the response to my Salon piece — over 5,000 Facebook “likes,” and counting! Thus far, none of the prominent pro-Walmart voices have taken issue with it, because the facts I present are hard to dispute.
Back to the DC controversy: neoliberal pundits and politicians hate the DC living wage bill, because they don’t want to drive Walmart away. The politicians want the photo ops at Walmart openings, where they can boast about bringing “good jobs” — um, well, okay, “jobs,” anyway — into the community.
But when Walmart comes to town, significantly more local retail jobs are destroyed than created. And to the extent Walmart grows and is empowered, even more manufacturing jobs will be lost. If Walmart’s fans understood its anti-worker business model, they would get this. Walmart’s philosophy requires cutting labor costs to a bare minimum, so it makes sense that the company would not only pay workers miserable wages, but also shred as many jobs as possible.
Some of the pro-free market ideologues do grasp this. Here’s Forbes contributor Tim Worstall, for example, with a blog post helpfully entitled: “Of Course Walmart Destroys Retail Jobs: That’s the Darn Point of it All.”
I appreciate the honesty of Worstall and others of his ilk; they celebrate Walmart for its innovation and productivity-enhancing “creative destruction.” Fine. What I don’t appreciate is those pundits who then turn around and claim that Walmart is also going to magically create jobs out of thin air, as so many are doing in the current DC debate (see, for example such gold star hacks as Mona Charen, Star Parker and, inevitably, Fox News).
Let’s be clear: the brave new economic world so many conservatives and neoliberals celebrate necessitates massive job loss. In theory, the gains from productivity brought about by Walmart’s ability to produce more output with less labor inputs are supposed to benefit everyone. But in practice, they’re going almost entirely to the the top, and the economic hit is being taken by those at the bottom. Progressives need to do all they can to change this dynamic. Supporting living wage bills like the one in DC would be a great place to start.
By: Kathleen Geier, Washington Monthly Political Animal, August 10, 2013
“Debunking The Myth”: Doable, Efficient, And Necessary, A Higher Minimum Wage Will Not Reduce Jobs
As fast-food workers strike across the nation, progressives must separate fact from fiction in order to secure a living minimum wage.
Fast-food workers are going on strike from New York to Seattle to demand higher wages, highlighting the never-ending controversy over the consequences of raising the minimum wage. Many news stories seem to suggest that economists have decided a higher minimum wage will cause job loss. However, with more analysis, we undercover the truth: there is no clear link between a higher minimum wage and reduced employment.
John Schmitt, a Senior Economist at the Center for Economic and Policy Research, reported in February 2013 that multiple meta-studies (studies that use statistical techniques to analyze a large number of separate studies) found that for both older and current studies alike, there is no statistical significance in the effect of an increased minimum wage. Put plainly, if the effect is not statistically significant, then there is no proven effect— increases in the minimum wage do not cause job loss.
Accordingly, a few weeks ago, over 100 economists at organizations ranging from the Center for American Progress to Boston University signed a petition in support of increasing the minimum wage. They present current research from well-established organizations such as the National Bureau of Economic Research that shows there are no negative employment effects from minimum wage increases. This includes the most comprehensive data available, based on the increasingly accurate testing that has occurred as more and more states increase minimum wage levels. Even more importantly, this recent series of studies uses cutting-edge econometric techniques to control for extraneous variables such as economic downturns and geographic effects. When economists do that, they find that minimum wage increases do not reduce employment.
Logically, this makes a lot of sense. A higher minimum wage is a win-win situation economically: Employees have more money to be consumers and are more productive, while businesses wind up reducing costs in the long run, since they won’t have to spend as much money hiring and training new workers (by analyzing data from five separate studies, economists representing the Political Economy Research Institute found that McDonald’s could easily make up for the costs of a higher minimum wage with a mere five-cent price increase on Big Macs). It’s just as Henry Ford realized—when he paid his workers more, they became part of his customer base, making his company even more profitable. Increasing the customer base and expanding customer pockets helps stimulate the entire economy, badly needed in the current recession.
So if we have no evidence linking high wages to job loss, our next question is: Are higher wages needed as a poverty reduction tool?
Currently, the 2013 federal poverty guidelines stipulate $23,550 for a family of four as poverty level. A $7.25 minimum wage currently nets the protesting fast-food workers $15,080 a year if the workers are lucky enough to work 40 hours a week. In a typical household with two parents and two children, parents who make $7.25 an hour earn far below the living wage of $13.55, according to an MIT wage calculator. The numbers become even starker when you separate out true living expenses: food, medical care, housing, transportation, and other needed expenses add up to a required $37,540 annual income before taxes, which is notably different from the poverty guidelines that the U.S. Department of Health & Human Services set. Even if the two parents worked 40 hours a week for 52 weeks, they would only earn $30,160 in total, significantly below the resources they need to live. Moreover, these estimates are only for a typical nuclear family. The struggle that single-income families, large families, or families living in high-cost cities go through is exponentially higher.
The buying power of the minimum wage has steadily been waning due to the effects of inflation for the past 40 years. When prices increase, a worker’s paycheck buys less and less. To put it in perspective, we look to another brief by John Schmitt: If minimum wage had continued to match productivity growth, it would have been $21.72 per hour in 2012. If we only adjust for the cost of living, a minimum wage pegged to inflation would be $10.52.
A huge bulk of evidence makes the case that increasing the minimum wage is a doable, efficient, and necessary change for the economy. This change needs to happen now. We as Americans have a moral obligation to make sure that other Americans who are working hard to support themselves and their families are able to make a living.
By: Emily Chong, The National Memo, August 8, 2013
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