“The Bottom Rungs Of The Economic Ladder”: Boehner Undermines His Own Minimum-Wage Argument
When policymakers debate increasing the minimum wage, there’s nothing wrong with them drawing on their personal experiences when making a decision. Some members of Congress, however, really aren’t good at it.
A couple of years ago, for example, Rep. Marsha Blackburn (R-Tenn.) argued against raising the minimum wage above $7.25 an hour because, when she was a teenager, she made $2.15 an hour and she “appreciated that opportunity.”
What Blackburn didn’t realize is that inflation exists – when she made $2.15 an hour as a teen, in inflation-adjusted terms, that was over $12 an hour in today’s money. The Tennessee Republican was trying to argue against a minimum-wage hike, but she ended up doing the opposite.
A related problem popped up over the weekend, when House Speaker John Boehner (R-Ohio) appeared on “60 Minutes” and CBS’s Scott Pelley asked if Congress might increase the “federal minimum wage.” The Republican leader replied:
“It’s a bad idea. I’ve had every kinda rotten job you can imagine growin’ up and gettin’ myself through school. And I wouldn’t have had a chance at half those jobs if the federal government had kept imposing [a] higher minimum wage. You take the bottom rungs off the economic ladder.”
Again, there’s nothing wrong with Boehner, like Blackburn, drawing upon his personal experiences. The trouble is that Boehner, like Blackburn, is flubbing the details.
Sam Stein set the record straight:
[W]hen Boehner was first taking on those “rotten jobs,” the minimum wage was actually at its historic high. And when the wage later dipped relative to inflation, Congress passed a series of hikes that raised it some more.
According to Department of Labor statistics, the minimum wage stood at $1.60 an hour in 1968 – the highest it has ever been when adjusted for inflation…. At first, Boehner went into sales – selling plastics, specifically – after his brief stint with the Navy ended. In 1971, he enrolled in Xavier University. According to a recent Politico profile, Boehner took a number of odd jobs while attending school there, among them “a series of humbling janitorial and construction jobs.” He would graduate in 1977.
On “60 Minutes,” Boehner expressed relief that the government didn’t keep “imposing” a higher minimum wage at the time, but in reality, the government actually did keep “imposing” a higher minimum wage, raising in 1974, 1975, and again in 1976 – just as Boehner was working through college.
And adjusted for inflation, those minimum wages had greater purchasing power than the minimum wage now. If Boehner looks back at that era fondly, he has no reason to create tougher conditions for low-wage workers now.
Keep the political context in mind: the debate about the minimum wage has been ongoing for quite a while, it was a major issue in last year’s elections, and the Speaker no doubt expects questions about the policy during interviews like these. But as of the weekend, his go-to talking point is demonstrably wrong.
By: Steve Benen, The Maddow Blog, January 27, 2015
“MLK’s Prophetic Call For Economic Justice”: This Country Has Socialism For The Rich, Rugged Individualism For The Poor
The Rev. Martin Luther King Jr.’s economic message was fiery and radical. To our society’s great shame, it has also proved timeless.
As we celebrate King’s great achievement and sacrifice, it is wrong to round off the sharp edges of his legacy. He saw inequality as a fundamental and tragic flaw in this society, and he made clear in the weeks leading up to his assassination that economic issues were becoming the central focus of his advocacy.
Nearly five decades later, King’s words on the subject still ring true. On March 10, 1968, just weeks before his death, he spoke to a union group in New York about what he called “the other America.” He was preparing to launch a Poor People’s Campaign whose premise was that issues of jobs and issues of justice were inextricably intertwined.
“One America is flowing with the milk of prosperity and the honey of equality,” King said. “That America is the habitat of millions of people who have food and material necessities for their bodies, culture and education for their minds, freedom and human dignity for their spirits. . . . But as we assemble here tonight, I’m sure that each of us is painfully aware of the fact that there is another America, and that other America has a daily ugliness about it that transforms the buoyancy of hope into the fatigue of despair.”
Those who lived in the other America, King said, were plagued by “inadequate, substandard and often dilapidated housing conditions,” by “substandard, inferior, quality-less schools,” by having to choose between unemployment and low-wage jobs that didn’t even pay enough to put food on the table.
The problem was structural, King said: “This country has socialism for the rich, rugged individualism for the poor.”
Eight days later, speaking in Memphis, King continued the theme. “Do you know that most of the poor people in our country are working every day?” he asked striking sanitation workers. “And they are making wages so low that they cannot begin to function in the mainstream of the economic life of our nation. These are facts which must be seen, and it is criminal to have people working on a full-time basis and a full-time job getting part-time income.”
King explained the shift in his focus: “Now our struggle is for genuine equality, which means economic equality. For we know that it isn’t enough to integrate lunch counters. What does it profit a man to be able to eat at an integrated lunch counter if he doesn’t earn enough money to buy a hamburger and a cup of coffee?”
Obviously, much has changed for African Americans since that time; anyone who says otherwise is plainly wrong. There is no longer any question of who gets served at lunch counters. Mississippi, where African Americans were once disenfranchised at the barrel of a gun, has more black elected officials than any other state. An African American family lives in the White House.
But what King saw in 1968 — and what we all should recognize today — is that it is useless to try to address race without also taking on the larger issue of inequality. He was planning a poor people’s march on Washington that would include not only African Americans but also Latinos, Native Americans and poor Appalachian whites. He envisioned a rainbow of the dispossessed, assembled to demand not just an end to discrimination but a change in the way the economy doles out its spoils.
King did not live to lead that demonstration, which ended up becoming the “Resurrection City” tent encampment on the Mall. Protesters never won passage of the “economic bill of rights” they had sought.
Today, our society is much more affluent overall — and much more unequal. Since King’s death, the share of total U.S. income earned by the top 1 percent has more than doubled. Studies indicate there is less economic mobility in the United States than in most other developed countries. The American dream is in danger of becoming a distant memory.
This column is not about policy prescriptions or partisan politics. King was a prophet. His role was to see clearly what others could not or would not recognize, and to challenge our consciences.
Paying homage to King as one of our nation’s greatest leaders means remembering not just his soaring oratory about racial justice but his pointed words about economic justice as well. Inequality, he told us, threatens the well-being of the nation. Extending a hand to those in need makes us stronger.
By: Eugene Robinson, Opinion Writer, The Washington Post, January 16, 2015
“It’s More Than Romney Promised”: What Would Republicans Say If Mitt Romney Were President And The Economy Was This Strong?
Imagine if Mitt Romney were president right now.
Imagine if, 722 days after winning the election, President Romney were presiding over an economy growing at five percent a year, an unemployment rate dipping beneath six percent, and gasoline that was less than $2-a-gallon.
This is, after all, what Romney promised. Hell, it’s more than Romney promised.
“I can tell you that over a period of four years, by virtue of the policies that we’d put in place, we’d get the unemployment rate down to six percent, and perhaps a little lower,” he told Time during the campaign. December’s tumble to 5.6 percent unemployment is, thus, two years ahead of schedule.
As for the five percent growth rate and the sub-$2 gas — that’s more than Romney dared ask the electorate to expect. Tim Pawlenty — remember him? — promised to nudge growth to five percent and was roundly mocked for his troubles. And to find anyone promising $2-a-gallon gas, you need to dig up Michelle Bachmann’s campaign lit (even Newt Gingrich didn’t dare predict gas under $2.50, and he wanted to use space mirrors to light highways).
If Mitt Romney were president right now, he would be seen as the second coming of Ronald Reagan. There would be parades in the streets. The kids would have “severely conservative” tattoos. Men would be saying “gosh.”
This is the problem with how Washington — Democrats and Republicans alike — interpret economic news. If Mitt Romney was president right now the economic numbers would be seen as proof that he was a remarkable success. They would appear to show that his agenda — repealing Obamacare, cutting taxes, deregulating the economy, greenlighting the Keystone XL pipeline — was precisely what had been needed to unleash the awesome growth engine that is the American economy. Conservatism would be ascendant. Liberalism would be discredited.
But Barack Obama won the election. The Affordable Care Act hasn’t been repealed. Taxes were raised in 2013. Regulation has proceeded apace. The Keystone XL pipeline is no closer to being built. And yet the economy is roaring. The ambitious economic promises the GOP field made for their conservative policies have been achieved despite the continuation of liberal policies.
There is an easy liberal interpretation here: President Barack Obama is great. Liberalism is great. And it’s simply entrenched media narratives and the GOP’s relentless resistance to giving Obama credit for anything that has left his approval rating stuck at 44 percent.
But I come not to praise President Obama. I come to bury the lazy economic thinking that infects American politics and, particularly, political campaigns.
Washington tends to think of itself as the cause and everything that subsequently happens in the world as the result. A booming economy is proof that Bill Clinton is a genius, or that Ronald Reagan is a genius. A crappy economy is proof that Barack Obama is a naif, or that George H. W. Bush can’t govern. It’s a view of causality usually found in five-year-olds, but it is pervasive in American politics. It is also false.
Policy matters, of course. And, particularly in 2008, 2009, and 2010, it was, arguably, the driver of our economic fortunes. But, for the most part, the economy is driven by much beyond what happens in the White House and the Congress (caveat: the Federal Reserve is an immensely powerful actor, but come campaign time, politicians tend to pretend it doesn’t exist).
It’ll be some time yet before we know whether the economy is truly beginning to roar or the engine is about to sputter out. But the $2 gas that’s left economists so optimistic isn’t the fault of anyone in Washington; it’s a mixture of technological innovation leading to more supply, falling global demand leading to yet lower prices for that supply, and Saudi Arabia refusing to slow production because it wants to choke America’s nascent shale-gas industry (Brad Plumer has an excellent look at the causes behind the cheap gas here).
The reasons unemployment has fallen below six percent are varied, and some of them are problematic (like the reduction in labor-force participation). Government policy has played a role, and my read of the evidence is that premature austerity, particularly at the state and local government level, did a lot to slow the recovery. Nevertheless, anyone suggesting that the job gains over the last two years are the clear result of anything Congress did, or didn’t do, is fooling themselves.
It’s an unhappy fact of political life that the direction of the economy tends to decide elections even though it isn’t actually driven by political decisions. Politicians tend to get around that by pretending otherwise: they take more credit than they deserve when the labor market is doing well, and they receive more blame than they deserve when it’s flagging.
By the normal rules of politics — the rules we would be playing under if Mitt Romney had won the election — the recent economic news proves Barack Obama is a magnificent leader and liberal policies an economic boon. But the normal rules of politics, at least when it comes to interpreting the economy, are dumb.
By: Ezra Klein, Vox, January 12, 2015
“It’s The Facts Stupid”: The GOP Should Stop Lying About Obama’s Economy
Friday’s boffo jobs report—the 58th straight month of jobs growth in an expansion that has now entered its 67th month—was only the latest in a long string of positive economic data.
This recovery, which started in July 2009, has been the most politicized, partisan expansion I can recall. Indeed, for the last six years, monthly data like the employment report –as well as new initiatives and proposals to get the economy rolling—have been greeted by critics with apocalyptic declarations. For the last six years, we’ve seen a continuing response from Republicans: Under the set of policies pursued by President Obama (some of them continuations of policies enacted by President Bush) and of Federal Reserve Chairman Ben Bernanke (a Bush appointee) and Federal Reserve Chairman Janet Yellen, the U.S. economic ship is like the Titanic—rudderless in dangerous seas, bound for doom, about to sink.
Let’s review some of the greatest hits. In March 2009, at the depths of the recession, when the stimulus bill passed Michael Boskin, economic adviser to the first President Bush, took to the Wall Street Journal editorial page on March 6, 2009, to proclaim ”Obama’s Radicalism is Killing the Dow.” Were his budget and stimulus plans to be adopted, the U.S. would risk becoming a “European-style social welfare state with its concomitant long-run economic stagnation.” That day, the Dow touched, 6,600. Almost immediately, the markets commenced a raging, historical bull run. The Dow closed Friday at 17,737, an increase of 168 percent from March 2009.
In February, 2011, Rep. Paul Ryan, the former vice presidential candidate, took out after Bernanke, arguing that the Fed’s efforts to support an economy still laboring under the fallout of a financial crisis and a deep recession were poison. Specifically, Ryan assured the public that the Fed’s bond-buying efforts would ignite runaway inflation and tank the dollar. “There is nothing more insidious that a country can do to its citizens than debase its currency.” Whoops. Since then, inflation has been remarkably tame. The consumer price index, the official measure of inflation, actually fell .3 percent in November, and is up a mere 1.3 percent in the previous 12 months—far below the historical norm. And the dollar? Far from depreciating, it has been going gangbusters. The trade-weighted dollar index, which measures the strength of our currency against those of our major economic partners and competitors, has soared 15 percent since early 2011 and now stands at a nine-year high.
As the Bureau of Labor Statistics started pumping out reports that showed the economy adding jobs starting in early 2010, the response was generally to ignore them, or worse. In October, 2012, former General Electric CEO Jack Welch famously tweeted, “Unbelievable jobs numbers…these Chicago guys will do anything..can’t debate so change numbers.” In fact, we now know that the September 2012 jobs report was one of a continuing series—59 straight months and counting—in which the economy has added jobs. More than 10 million in all, more than recouping all the positions lost in the deep recession.
In 2011, candidate Mitt Romney claimed that, were he to be elected, the unemployment rate would fall below 6 percent by the end of his first term in 2016. Last month, under Obama, the rate fell to 5.6 percent, the lowest level since June 2008.
Next we were assured, the botched rollout of Obamacare was certain to manage the twin tasks of tanking the economy as a whole and resulting in a massive loss of insurance. In March 2014, House Speaker John Boehner noted “there are less people today with health insurance than there were before this law went into effect.” In fact, as countless studies and the continuing series of Gallup polls have shown, the percentage of people without health insurance has declined dramatically—from 18 percent in the third quarter of 2013, to 12.9 percent in the final quarter of 2014, a decline of nearly 30 percent. Oh, and in the year since Obamacare formally launched, the U.S. economy has posted solid growth while adding 2.95 million jobs—the best such performance since 1999.
Look. The recovery is nowhere near complete—there are still too many people who want and need jobs but can’t find them. And wages remain stagnant. But the larger narrative that has played out in front of our eyes has defied the one predicted by Republican establishment economists and economic thinkers, and vindicated those who argued America was coming back (like me). The stock market is booming, not tanking; interest rates are muted, not out of control; the deficit is shrinking, not expanding; the economy is adding lots of jobs, not shedding them; the dollar is robust, not weak; inflation is nonexistent, not out of control; energy prices have plummeted, not soared; millions of people have gained health insurance, not lost it.
Virtually everything GOP critics have told us would follow from the policies put in place has not come to pass. You would think that this would occasion a few mea culpas, some rethinking, an admission of poor prognostication. But, alas, it continues. Rep. Paul Ryan is now warning in a column that Obamacare “is weighing down our economy and discouraging hiring” and will ultimately “collapse under its own weight.”
I shouldn’t say nothing has changed. Efforts to deny economic gains have been increasingly difficult to carry off the longer the expansion continues. And so we’re now seeing a slight shift in narrative. Rather than argue that the economy and everything associated with it is in the crapper, Republicans are conceding that things might be looking up. But it’s only because the GOP won control of the House and Senate in November. “After so many years of sluggish growth, we’re finally starting to see some economic data that can provide a glimmer of hope,” Majority Leader Mitch McConnell said last week. “the uptick appears to coincide with the biggest political change of the Obama Administration’s long tenure in Washington: the expectation of a new Republican Congress.”
By: Daniel Gross, The Daily Beast, January 12, 2014
“Time For The Laugh Track!”: Republicans Have A Veto-Proof Math Problem
Behold Washington’s new math.
The first anti-Obamacare bill of the new Congress, the Save American Workers Act of 2015, was written to undo the part of the law that defines “full employment” as holding a job for as little as 30 hours per week. It passed, and on the way, it became even more partisan in color than the 2014 version of the bill. In the last Congress, 18 Democrats voted with every Republican to pass the bill, but Thursday only 12 did, including all but one of the 2014 supporters (not Georgia Rep. Sanford Bishop) and two new Blue Dogs (Florida Rep. Gwen Graham, Nebraska Rep. Brad Ashford).
By turning on the bill, the Democrats made clear that they would sustain the veto already promised by President Obama, and, yes, they have the votes to do so. If every member of the 114th House of Representatives shows up for a vote, 48 Democrats need to join every Republican to override a veto. Three times this week, when the GOP brought forward bills to approve the Keystone pipeline and delay part of the Volcker Rule, the Democrats denied them all but a handful of votes.
Just as interesting as the Republican math problem were the arguments Democrats used to hold back their votes. In its veto message, the White House said the 30-hour work week bill “would significantly increase the deficit” and cited 2014 numbers from the Congressional Budget Office to say it would “increase the budget deficit by $45.7 billion over the 2015 to 2024 period.” In the Senate yesterday, in a conversation with reporters, Illinois Senator Dick Durbin repeatedly mocked Republicans for offering changes to the ACA without offering up the mechanisms to pay for them.
“I’m just not going to buy the premise Republicans now want to sell, that deficits don’t count,” Durbin said. “Since they’re in the majority, they’re going to use dynamic scoring—time for the laugh track!—they’re going to use dynamic scoring to prove that they can cut any tax without an impact on the deficit. That doesn’t work. That’s why we’ve stopped short of repealing the medical device tax, because the payfor has never been explained.”
Of course, the Democrats had a terrible election—no news there—and in the process they watched Republicans leap ahead of them in voter trust on key issues. Republicans pulled into a tie on health care, which had always been a Democratic advantage, and they built huge leads on taxes, the economy, and the deficit. Yet in the months after the election, they watched President Obama’s approval rating tick up, and saw a dynamite series of jobs reports followed by 5 percent GDP growth in the final quarter.
Democrats paid attention to new Majority Leader Mitch McConnell’s maiden speech, and how “the [economic] uptick appears to coincide with the biggest political change of the Obama administration’s long tenure in Washington: the expectation of a new Republican Congress.” To counter that claim, Democrats in Congress want to reframe the GOP’s bills as deficit-busters, and make sure Republicans get none of Barack Obama’s credit if the economy continues to improve.
By: Dave Weigel, Bloomberg Politics, January 9, 2015
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