“Paul Ryan And The Brown Bag”: Once Again, The Congressman Just Doesn’t Get It
House Budget Committee Chairman Paul Ryan (R-Wis.) covered a fair amount of ground in his speech this morning at the Conservative Political Action Conference (CPAC), but there was one story in particular that stood out.
“This reminds me of a story I heard from Eloise Anderson. She serves in the cabinet of my friend Governor Scott Walker. She once met a young boy from a poor family. And every day at school, he would get a free lunch from a government program. But he told Eloise he didn’t want a free lunch. He wanted his own lunch – one in a brown-paper bag just like the other kids’. He wanted one, he said, because he knew a kid with a brown-paper bag had someone who cared for him.
“That’s what the Left just doesn’t understand.”
I’ve read this a few times, hoping Ryan had some other subtle subtext, but I’m afraid the congressman really is as confused as his anecdote suggests.
The child may have wanted a lunch in a brown-paper bag, but – and I hope Ryan pauses to really think about this – his family is poor. The boy “didn’t want a free lunch,” but – and this is key – he didn’t want to be hungry, either.
It’s true that Republican policymakers could take away that free lunch the child received at the school, but that doesn’t mean the boy’s family will suddenly have more money to pack a healthy lunch in a brown-paper bag.
What’s more, it’s also true this kid may come from a struggling family, but it doesn’t mean he lacks “someone who cares for him”; it means he and his family lack the resources needed to send him to school with a good meal. Robert Schlesinger added, “A kid with a brown paper bag does have someone who loves them; but the kid without the brown paper bag, the one whose parent either won’t or can’t – because they’re working hard to get ahead and give themselves and their families better lives – deserves a society that loves and cares for them too.”
That’s what Paul Ryan just doesn’t understand.
In the same speech, the Wisconsin Republican added:
“The reason [Democrats[ keep talking about income inequality is because they can’t talk about economic growth. They have spent five, long years in power, and all they have to show for it is this lousy website.”
That’d be a good point, just so long as one overlooks the Recovery Act that ended the Great Recession, the millions of new jobs, health care reform that brought coverage to millions, the rescue of the auto industry, Wall Street reform, the end of the war in Iraq, counter-terrorism successes, the repeal of “Don’t Ask, Don’t Tell,” and student-loan reform, among other things.
Oh, and the health care website was fixed a few months ago.
Other that, though, Ryan’s on strong ground.
Update: In the school-lunch anecdote, I falsely assumed Ryan had the basic details of the story right. He didn’t: “Via Wonkette, the school lunch story appears to have been recycled from a story and altered beyond recognition in the process. The original story had nothing to do with a child turning down a free lunch. It’s about a kid, Maurice, who met a private benefactor, Laura, asking to literally have his lunch placed in a brown paper bag.”
By: Steve Benen, The Maddow Blog, March 6, 2014
“The Real Job Killers”: Forget What Republicans Say, The Real Job Killers Are Lousy Jobs At Lousy Wages
House Speaker John Boehner says raising the minimum wage is “bad policy” because it will cause job losses.
The U.S. Chamber of Commerce says a minimum wage increase would be a job killer. Republicans and the Chamber also say unions are job killers, workplace safety regulations are job killers, environmental regulations are job killers, and the Affordable Care Act is a job killer. The California Chamber of Commerce even publishes an annual list of “job killers,” including almost any measures that lift wages or protect workers and the environment.
Most of this is bunk.
When in 1996 I recommended the minimum wage be raised, Republicans and the Chamber screamed it would “kill jobs.” In fact, in the four years after it was raised, the U.S. economy created more jobs than were ever created in any four-year period.
For one thing, a higher minimum wage doesn’t necessarily increase business costs. It draws more job applicants into the labor market, giving employers more choice of whom to hire. As a result, employers often get more reliable workers who remain longer – thereby saving employers at least as much money as they spend on higher wages.
A higher wage can also help build employee morale, resulting in better performance. Gap, America’s largest clothing retailer, recently announced it would boost its hourly wage to $10. Wall Street approved. “You treat people well, they’ll treat your customers well,” said Dorothy Lakner, a Wall Street analyst. “Gap had a strong year last year compared to a lot of their peers. That sends a pretty strong message to employees that, ‘we had a good year, but you’re going to be rewarded too.’”
Even when raising the minimum wage — or bargaining for higher wages and better working conditions, or requiring businesses to provide safer workplaces or a cleaner environment — increases the cost of business, this doesn’t necessarily kill jobs.
Most companies today can easily absorb such costs without reducing payrolls. Corporate profits now account for the largest percentage of the economy on record. Large companies are sitting on more than $1.5 trillion in cash they don’t even know what to do with. Many are using their cash to buy back their own shares of stock – artificially increasing share value by reducing the number of shares traded on the market.
Walmart spent $7.6 billion last year buying back shares of its own stock — a move that papered over its falling profits. Had it used that money on wages instead, it could have given its workers a raise from around $9 an hour to almost $15. Arguably, that would have been a better use of the money over the long-term – not only improving worker loyalty and morale but also giving workers enough to buy more goods from Walmart (reminiscent of Henry Ford’s pay strategy a century ago).
There’s also a deeper issue here. Even assuming some of these measures might cause some job losses, does that mean we shouldn’t proceed with them?
Americans need jobs, but we also need minimally decent jobs. The nation could create millions of jobs tomorrow if we eliminated the minimum wage altogether and allowed employers to pay workers $1 an hour or less. But do we really want to do that?
Likewise, America could create lots of jobs if all health and safety regulations were repealed, but that would subject millions of workers to severe illness and injury.
Lots of jobs could be added if all environmental rules were eliminated, but that would result in the kind of air and water pollution that many people in poor nations have to contend with daily.
If the Affordable Care Act were repealed, hundreds of thousands of Americans would have to go back to working at jobs they don’t want but feel compelled to do in order to get health insurance.
We’d create jobs, but not progress. Progress requires creating more jobs that pay well, are safe, sustain the environment, and provide a modicum of security. If seeking to achieve a minimum level of decency ends up “killing” some jobs, then maybe those aren’t the kind of jobs we ought to try to preserve in the first place.
Finally, it’s important to remember the real source of job creation. Businesses hire more workers only when they have more customers. When they have fewer customers, they lay off workers. So the real job creators are consumers with enough money to buy.
Even Walmart may be starting to understand this. The company is “looking at” whether to support a minimum wage increase. David Tovar, a Walmart spokesman, noted that such a move would increase the company’s payroll costs but would also put more money in the pockets of some of Walmart’s customers.
In other words, forget what you’re hearing from the Republicans and the Chamber of Commerce. The real job killers in America are lousy jobs at lousy wages.
By: Robert Reich, The Robert Reich Blog, February 28, 2014
“Minimum Truth”: The Hollow Argument Against Higher Wages
In the midst of a crucial political debate that plainly favored proponents of a higher minimum wage, the Congressional Budget Office dropped a bombshell headline this week. Increasing the minimum to $10.10 an hour – as demanded by President Obama and Democrats on Capitol Hill – will “cost 500,000 jobs.” At a moment when employment still lags badly, that assertion was potentially devastating.
Almost lost in much of the predictable media coverage was the CBO’s estimate that a minimum-wage increase would lift at least 900,000 workers and their families out of poverty – and boost incomes for at least 15 million more.
But as top economists have repeatedly pointed out, such damning employment numbers are fuzzy and unreliable, while the CBO’s poverty numbers probably underestimated the positive impact of a higher minimum.
Moreover, those 500,000-jobs-lost headlines were highly misleading, with the strong implication that more than half a million actual people would be laid off — which is wrong. In fact, the CBO number is meant to estimate the number of jobs that employers might not fill when workers leave, or the number of jobs that employers might not create as quickly if they must pay a higher wage. It doesn’t mean that people will lose their current jobs, but those people seeking low-wage jobs may have to look slightly longer to find them.
What about that nice round number of 500,000? Naturally it is rounded to the nearest hundred thousand, but more to the point is that the headlined number is simply the midpoint of an estimated range from “slight impact” or zero lost jobs on the low end to one million on the high end.
Such a million-job spread represents substantial uncertainty. Skeptics may consider the uncertainty even greater because the CBO report relied heavily on disputed assumptions by conservative economists – and diverged from the consensus of top US economists, who expect that moderate increases have a vanishingly small impact on employment.
But even if 500,000 fewer jobs are created in the short run, that somewhat notional cost must be weighed against the indisputable benefit to low-wage workers. As economist Dean Baker explains:
With 25 million people projected to be in the pool of beneficiaries from a higher minimum wage, this means that we can expect affected workers to put in on average about 2 percent fewer hours a year. However when they do work, those at the bottom will see a 39.3 percent increase in pay.
While overstating the negative effect of raising the minimum wage on jobs, the CBO study understated the positive effect on families living in poverty. Its estimate of 900,000 families lifted above the poverty line is based on computer simulations. But historical research into the effect of previous minimum-wage increases suggest a much more robust benefit to the working poor.
According to University of Massachusetts economist Arindrajit Dube, who has studied the effects of minimum-wage increases in recent decades, the impact on poverty is much more powerful than the CBO suggests. He quotes a study by the Hamilton Project, a centrist economic think-tank based at the Brookings Institution, which suggests that as many as 35 million families will benefit from an increase to $10.10 an hour due to “spillover effects” raising income among workers who already make slightly more than the minimum.
Dube’s studies of the historical effect of past minimum-wage increases indicate that raising the federal minimum to $10.10 would lift somewhere between 4.6 and 6 million households above the poverty line.
Raising the minimum wage will also reduce profiteering by large, highly profitable employers like Walmart and McDonalds, whose workers rely on government benefits – such as the Earned Income Tax Credit and food stamps – to supplement inadequate paychecks. Survey after survey reflects the strong public appetite for higher wages at the low end. But popular approval is not the only way that companies can actually benefit from improving workers’ earnings and livelihoods.
The Gap clothing chain just announced that its workers will soon receive better pay to bring them above the current federal minimum. Announcing that his company will voluntarily raise its lowest-paid workers to $9 this year and $10 next year, Gap CEO Glenn Murphy said he regards the expense as a “strategic investment” that would pay for itself many times over in better productivity and morale (as well as lower job turnover and training costs).
When the clear social benefits of raising wages are contrasted with the dubious warnings of lost jobs, there is no real argument. If we intend to address poverty and reduce inequality, higher wages across the workforce are imperative – but especially at the bottom.
By: Joe Conason, The National Memo, February 21, 2014
“The Silence Of The Austerians”: Here’s Why 2014 Could Be The Year America Finally Ditches its Inane Deficit Obsession
The year 2013 will be seen as a year of crushing intellectual defeat for advocates of fiscal austerity. There were many smaller victories, but this big one came in April. Researchers at the University of Massachusetts examined the Austerian ur-paper, “Growth in a Time of Debt,” by Carmen Reinhart and Ken Rogoff, which said that countries whose debt-to-GDP ratio reaches 90 percent experience dramatically slower growth. The UMass folks found not only dodgy statistics and backwards causation, but a goof in the paper’s Excel spreadsheet. The causation and statistics errors were more serious, but the fact that elites around the globe had gleefully embraced something with a flub any office temp could understand was horribly embarrassing.
It was an intellectual rout that badly wrong-footed the Austerians, who have since been notably half-hearted in the face of a resurgent left now campaigning on economic justice. This includes, for example, increasing Social Security benefits, which was unthinkable two years ago, when the fight to stop benefits from being cut was nearly lost.
The question for 2014, then, will be whether this triumph can be consolidated and expanded into the policy sphere. Because despite the intellectual collapse, Austerian assumptions and reasoning still dominate United States policy, which is undertaking fiscal consolidation at a pace not seen since the WWII demobilization. If the current Austerian death grip on the framework of policy negotiation can be broken, there might be a chance.
The answer to this question turns on how one views intellectual debate. Given the history of the last few years, one could be forgiven for thinking it’s pointless. As the Polish economist Michal Kalecki demonstrated brilliantly, there are powerful cultural and class-based reasons for both political and business elites to favor austerity now.
We see this today, as Steve Randy Waldman has demonstrated, in the blatant double standards applied to austerity as compared to inequality or raising the minimum wage. Consider a recent paper by the liberal economist Jared Bernstein, which while outlining much excellent evidence about the economic harm of inequality, is stuffed with unnecessary hedging and hesitation. The Reinhart and Rogoff paper, by contrast, was weak even without knowing about the Excel and stats errors (as Paul Krugman, among others, observed at the time), but elites nearly tripped over their own feet seizing on it anyway. Their bogus “90 percent” conclusion was stated as economic fact by everyone from Paul Ryan to the Washington Post editorial board.
However, biased reasoning is different than no reasoning at all. Seizing on a fig leaf paper fulfills a deep psychological need. Current elites may be largely greedy, corrupt hypocrites, but the cultural credibility of science is such that what amounts to outright class warfare must have an “evidence-based” patina. It’s far too gauche to simply ram through one’s favored policies because you want all the money or to kick the poor.
Therefore, fiscal policy in 2014 and 2015 will hinge on whether the Austerian coalition can be split (assuming, as is probable, that progressive Democrats don’t sweep the 2014 midterms).
Roughly speaking, we’re talking about the center and the right, and there are good reasons to suppose that neither will be brought around. For the center, it takes an intellectual defeat roughly akin to the Battle of Trafalgar to get them to grudgingly abandon austerity. (And if some hack economist churns out another pro-austerity paper, they will probably grab it eagerly.) Meanwhile, “straight” reporters have been culturally conditioned to code deficit reduction as a non-ideological good thing, so even very recent straight reporting still contains buried Austerian assumptions.
And on the right, things look especially hopeless. Denial and motivated reasoning are so epidemic that even Mitt Romney believed the “unskewed” polls before the 2012 election. Ivory tower arguments alone are useless here.
However, all hope is not lost. The key is to change what is considered acceptable for budgetary negotiations. Right now, they all assume that any new spending must be “offset” by cuts elsewhere. That aversion to deficit spending is 100% Austerian.
So while Republicans are largely immune to evidence, it’s also true they don’t actually care about the deficit in and of itself. They favor reduced taxes on the rich, and cutting social insurance. What’s more, conservative reformists at places like National Affairs have gotten louder and bolder in their advocacy of new thinking, even including infrastructure spending.
So if the center, especially including President Obama, can be persuaded to drop their deficit obsession (and again, it’s hardly possible to overstate how badly this debate has been lost), we could trade tax cuts for some austerity relief, like re-extending unemployment benefits and food stamps. And, it’s important to note, both spending increases and tax cuts count as austerity relief. Tax cuts, especially on the rich, aren’t very good stimulus, but they still put money into people’s pockets.
But the main point is to shift ground for negotiation. This strategy of “tax cuts for more spending” has been suggested many times in the past few years and gone nowhere. But before that, it has been the basis for many successful bipartisan deals, including expanding Medicaid in the 80s and the CHIP program in the 90s.
So while the deck is stacked against the anti-Austerians, continuing the intellectual battle is by no account useless. It’s highly possible to influence even a crooked debate.
By: Ryan Cooper, The New Republic, February 5, 2014
“The Mad Men Problem At Home”: Closing The Wage Gap Begins With Remedying The Housework Gap First
When President Obama addressed the gender-based wage gap during his State of the Union address last week, women cheered and Congresswoman Rosa DeLauro even gave out high fives. Obama called on Washington and businesses to help women succeed at work and “do away with workplace policies that belong in a Mad Men episode.” However, the President forgot to name a key constituency in his call to help women succeed: husbands.
All the workplace policies in the world aren’t going to get women to parity unless we do away with our Mad Men-era policies at home, too. Despite the fact women are the sole or primary source of income in a record 40% of U.S. households, they still do the majority of housework and childcare. According to the Pew Research Center, during an average week[OK? The study, if I’m looking at the right one, seems to have measured weeks rather than days.], women spend more time cleaning, doing laundry, and preparing food then men do. Men, on the other hand, spend more time watching television than women do. And even in households where the woman is the sole breadwinner, the labor division is far from equal. Men who stay home average 18 hours of housework per week, while their working partners average 14. Stay-at-home mothers, though, average 26 hours of housework. Their working partners average just a third of that time. America has a housework gap, and it’s fueling the gender gap at work.
Research indicates there is a direct and negative correlation between housework and the wage gap. One theory, from research in The Journal of Human Resources, suggests this could be employers’ negative reactions to women who appear dedicated to household activities. It could also be that many employers believe mothers are less committed to their jobs than other employees, as Shelley J. Correll, a sociology professor at Stanford University, posits. As a result, employers are reluctant to hire them and offer them high salaries. The “mommy penalty” is real. The wage gap between mothers and non-mothers is greater than that between women and men, according to the advocacy group MomsRising.
It appears that in 2014, we have high expectations of what a woman can accomplish at work, but we still have 1950s expectations about her role at home. But it’s time to rethink and renegotiate who does what where. Men who have opted out of housework should lean in at home so their wives can lean in at work. And they should advocate for, and take advantage of, family-friendly policies such as paid sick days, paternity leave, and flex benefits in order to create a more equitable arrangement at home.
If we truly believe that, as Obama said, “when women succeed, America succeeds,” then we need to stop ignoring the housework gap. Laundry and dirty dishes may not be standard agenda items for our legislators and business leaders, but they should be. After all, a woman can’t have it all if she’s too busy doing it all.
By: Liz O’Donnell, Time, February 4, 2014
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