“Thoughtful And Forward-Looking Policymaking”: Why The 2016 Candidates Ignore The Sharing Economy At Their Own Peril
Before Hillary Clinton gave her big economic speech on Monday, a rumor spread through the tech journalism world: Clinton was about to attack Uber! Based on a passing mention in a Politico article previewing the speech, tech sites played up the rhetorical blitzkrieg to come. “Presidential candidate Hillary Clinton will blast contractor-fueled companies for repressing middle-class wage growth,” said Techcruch. Even after she delivered the speech and there was no actual attack on Uber, articles continued to describe her anodyne remarks about the rise of the sharing economy as a “blast,” a “diss,” and even a declaration of war.
As it happens, Clinton raises an issue that more presidential candidates ought to talk about. We don’t yet have much idea of what she would actually do about the transformations in the economy that are taking place, but we ought to press her and the other presidential candidates, Democratic and Republican, for more specifics.
For the record, here’s what Clinton actually said on this topic, in its entirety:
Meanwhile, many Americans are making extra money renting out a small room, designing websites, selling products they design themselves at home, or even driving their own car. This on-demand, or so-called gig economy is creating exciting economies and unleashing innovation. But it is also raising hard questions about workplace protections and what a good job will look like in the future.
Seldom have I witnessed a political attack of such merciless cruelty.
But here’s the point: In many ways, public policy on the workplace is organized around the way things used to be, when people hoped that they could stay with one employer for their entire career, and that employer would provide them a panoply of benefits including health insurance, paid vacations, and a pension. Today, more and more Americans are cobbling together a living from multiple sources. And even many who aren’t working for a technology-based company like Uber are doing hourly work that makes scheduling their lives exceedingly difficult and doesn’t come with any benefits at all.
Depending on what sort of situation you can put together, it’s possible for that kind of work to offer more rewards than the traditional 9-to-5 job. But for millions, the contemporary American workplace is characterized by insecurity: insecurity that they’ll have enough work this month to pay their bills, insecurity that they’ll be able to put anything away for retirement, insecurity that an illness or family crisis won’t send them into a financial tailspin from which they can’t recover.
So what can government do? Up until now, Democrats have been offering piecemeal proposals that try to ameliorate that insecurity from one angle or another, trying to get people better wages and treatment. All Democrats want to increase the minimum wage. The Obama administration is updating the rules on overtime so more workers can be paid adequately for the extra hours they work. The Affordable Care Act finally made health insurance at least somewhat portable, so that “job lock” — in which you can’t leave your job for fear that you won’t be able to get covered — is a thing of the past. They’re now pushing for mandatory paid sick leave. But most measures like these concern how traditional workers relate to traditional employers.
Republicans, on the other hand, generally look at the state of the workplace today and say, “What’s the problem?” They oppose raising the minimum wage, objected to updating the overtime rules, don’t want employers to have to offer paid sick leave, and of course find the ACA to be a Stalinist nightmare of oppression. They love to fetishize Uber because it fights with entrenched taxi unions (and because they hope it will make them seem young and hip), but don’t have any particular ideas to help workers adapt to the new world.
There are ideas out there; for instance, Nick Hanauer and David Rolf recently proposed that the government create a Shared Security Account that would work something like Social Security, but provide a means to pay for things like vacations and sick leave. Critically, it wouldn’t be at the whim (or under the control) of anyone’s employer, but would travel with workers whether they worked for General Motors, waited tables at the local diner, or did odd jobs for TaskRabbit (I interviewed Hanauer about it here).
That’s just one idea, and hopefully people will come up with others. But we deserve a debate on how as a country we can adapt to the evolution of work in ways that both maximize the benefits of the changes that are taking place and minimize the number of people getting steamrolled by them. The economy needs innovation and disruption, but it also needs thoughtful and forward-looking policymaking. That may be a lot to expect from presidential candidates. But it doesn’t hurt for us to ask.
By: Paul Waldman, Senior Writer, The American Prospect; Contributor, The Week, July 15, 2015
“Scott Walker Gets Schooled By His Neighbor”: Minnesota Governor Walloping Walker’s Wisconsin In Terms Of Economic Growth
Wisconsin and Minnesota share a common cultural heritage that until recently included a healthy Midwestern strain of progressive politics. Elected in 2010, Governor Scott Walker upended a hundred years of liberal populism, charting a conservative path for Wisconsin that made him a darling of the Republican Right, but left his state with a serious budget shortfall and disappointing job growth.
Meanwhile, across the border in neighboring Minnesota, Governor Mark Dayton has relentlessly pursued liberal policies, embodying the tax-and-spend Democrat that Republicans love to caricature. The result, surprising to many, is that the Minnesota economy is going gangbusters while Wisconsin’s job growth has fallen to 44th among the 50 states.
Dayton’s success steering his state’s progressive course has been a surprise. He was a middling senator at best, serving a single term from 2001 to 2007 before returning to Minnesota disillusioned with the way Washington operated. Time named him one of America’s “Five Worst Senators” in 2006, and he was known mainly for his inherited fortune as the great-grandson of the founder of Dayton’s department store, which became Target. As senator, he donated his salary to underwrite bus trips to Canada for senior citizens buying low-cost prescription drugs.
“Minnesota’s gains are not because Mark Dayton has overpowered the state with his political acumen,” says Lawrence Jacobs, a political science professor at the University of Minnesota. He describes the low-key Dayton as the “anti-politician,” someone the voters trust because he’s not smooth enough to fool them. “His skill is he has a clear agenda, and he’s unyielding. This is not pie-in-the-sky Great Society adventurism.”
Dayton has a majority Democratic legislature just as Walker has a Republican controlled legislature, bolstering the ongoing policy experiment in their states. The two governors have pursued agendas that mirror their respective party’s core beliefs, and the results so far suggest that the starve-the-government, tax-cutting credo of conservative orthodoxy has run its course.
Dayton has raised the minimum wage, and he’s significantly increased taxes on the top 2 percent of wage earners to close a budget shortfall and to raise money for investments in infrastructure and education. In the legislative session that just ended, some Democrats joined with Republicans to block his goal of expanding universal preschool. But he did get more scholarship money to educate 4-year-olds.
“This is the largest tax increase we’ve seen in Minnesota, over $2 billion,” says Jacobs. More than three-quarters of the new spending is on education, compared to Wisconsin, where education is on the chopping block, and Walker is at odds with professors and administrators alike at his state’s flagship university system.
Minnesota has also passed the state’s version of the Affordable Care Act (MNsure), and while its implementation has been rocky, it is in place and serving tens of thousands of people.
Dayton ran for governor in 2010 on an unapologetically liberal agenda, and won narrowly after a recount. He was reelected comfortably in 2014, and his approval rating in the latest Minneapolis Star Tribune poll is 54 percent. Contrast that with Walker’s 41 percent, and you’ve got a clear picture of how each is faring in the eyes of voters.
Dayton’s idiosyncratic style is in tune with the times, and at 68, he has no ambition for national office. Walker is running for president and touting hard-right policies that play well with Iowa caucusgoers. He opposed raising the minimum wage, has significantly weakened unions, reduced spending for education, cut taxes on the wealthy, and increased taxes on the middle class in part to pay for the tax cut. According to the nonpartisan Wisconsin Budget Project, Walker gave tax breaks that disproportionally favored upper-income earners while cutting $56 million in tax credits for working families.
Faced with a budget shortfall and no way to plug it without additional revenue, Republicans in the Wisconsin legislature are rebelling against additional spending cuts. But Walker shows no sign of softening his stance against raising taxes or fees. Other Republican governors, notably Louisiana’s Bobby Jindal, are in the same quandary.
“It seems like they’ve been backed into a corner and are just going forward with pure ideology and discounting any contradictory evidence,” says David Madland, author of Hollowed Out: Why the Economy Doesn’t Work without a Strong Middle Class.
As the director of the American Worker Project at the Center for American Progress, a liberal think tank, Madland in his book takes on the premise that inequality is good in the sense that helping the rich get richer is going to help everybody else, that a rising tide lifts all boats. Trickle-down economics has gotten a bad rap and is rarely invoked as a phrase anymore, but the belief that tax cuts are the engine of economic growth remains the core of GOP ideology.
That Minnesota’s economy rallied under progressive policies while Wisconsin’s has struggled is “one more data point proving that trickle down is wrong,” says Madland. While it’s tricky to attribute the well-being of a state’s economy solely to its political leadership, Minnesota is experiencing much stronger growth than its neighbor. Dayton has also proved responsive to the business community, easing early fears that his liberalism might go unchecked.
Walker, on the other hand, has doubled down to the detriment of his state on policies that are backfiring. And if voters in his home state aren’t buying what he’s selling anymore, that doesn’t bode well for his presidential campaign.
By: Eleanor Clift, The Daily Beast, July 19, 2015
“Scott Walker Picks A Fight He Can’t Win”: Walker’s Boast About His State’s “Dramatic” Economic Recovery Is Belied By, Well, Reality
Neither President Obama nor anyone on his team have spoken publicly about who they think might win the Republican presidential nomination. It’s not, however, unreasonable to think they have one candidate on their minds.
In March, for example, Obama raised eyebrows by taking a not-so-subtle shot at Wisconsin Gov. Scott Walker’s (R) far-right agenda, and a month later, the president did it again, calling out Walker – by name – as a candidate who needs to “bone up on foreign policy.”
Today, the president will be in Wisconsin, where Walker will greet him at the airport, before Obama fleshes out his new overtime policy at a University of Wisconsin campus. Politico reported that Walker has “become the White House’s bete noire” – the conservative governor is the one Republican “the president’s aides always hold up as an example of exactly what’s wrong with politics.”
And it’s equally clear the president is on Walker’s mind, too. Today, the Wisconsin Republican has a new piece, published by Real Clear Politics, suggesting Obama could learn a few things from GOP policymakers in the Badger State.
Bright spots in the Obama economy are few and far between, as opportunities for small businesses and entrepreneurs are often quashed by a federal government that has grown too large, powerful and pervasive. That’s why it’s telling that the president is scheduled to be in La Crosse, Wis., this week for an event focusing on the economy.
To be sure, Wisconsin’s economy has enjoyed a dramatic recovery over the last few years. But our fortunes have improved in spite of – not because of – the president’s big-government policies.
Walker’s piece added that he intends to tell the president how great far-right governance is, and “for the sake of hard-working taxpayers across the country, I hope he will listen.”
Whether he realizes it or not, the governor is picking a fight he’s unprepared to win.
Let’s put aside, at least for now, the fact that President Obama has a pretty amazing record on job creation and ending the Great Recession. Let’s instead focus on his critic because Walker’s boast about his state’s “dramatic” economic recovery is belied by, well, reality.
Just last week, the Chicago Tribune published a report with this headline: “Wisconsin economy lags after Walker’s spending and tax cuts.”
In 2011, new Republican Gov. Scott Walker set the creation of 250,000 jobs as the benchmark for success of his new administration. Walker missed that goal by a wide margin over his first term despite an embrace of sweeping tax cuts aimed at stimulating growth. Instead, the cuts helped dig a more than $2 billion hole in the state budget.
Wisconsin ranked 36th among the states and District of Columbia in the pace of private-sector job growth during Walker’s term, trailing all Rust Belt states and all but one other state in the Midwest.
More specifically, when it comes to job creation, Wisconsin ranked 35th in the nation in 2011, 36th in 2012, 38th in 2013, and 38th in 2014. Walker not only failed to keep his promise about creating 250,000 in his first term, he barely made it to 129,000.
In May, the Washington Post reported that the state’s rate of private-sector job growth “is one of the worst in the nation” and Wisconsin’s middle class “has shrunk at a faster rate than any other state in the country.”
It’s against this backdrop that the state is also struggling badly with a major budget shortfall, which Walker still doesn’t know how to close.
This is the guy who wants to brag about his economic record? The one who hopes to teach Obama a few things?
Seriously?
By: Steve Benen, The Maddow Blog, July 2, 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
“Basically Impossible”: Chris Christie Promised To Tell It Like It Is. Here’s What That Would Actually Sound Like
In his presidential campaign announcement Tuesday, the reliably brash and blunt Chris Christie vowed that “telling like it is” would be both his campaign motto and his promise to voters.
Even for Christie, whose entire political persona is based on no-nonsense candor, consistently “telling it like it is” is basically impossible. Can you imagine if the New Jersey governor — or any of the other Republican candidates — really told it like it is about the most important issues and challenges facing America? What would that even sound like? Well, maybe something like this:
“…and that’s why I am announcing my candidacy for president of the United States! [Applause.] Thank you! Thank you! Now during my campaign, I’m going to tell it like it is. I’m going to let ‘er rip! [Applause.] Hard truths need to be spoken, and I will speak them.
‘What are these truths?’ you ask. For starters, we Republicans are way too focused on President Obama. Trust me, I’ll have a lot to say during this campaign about the president’s mistakes. Heaven knows, there’s been a lot of them. [Extended applause.] But he’s gone in a year and half. [Extended applause.]
Here’s the thing: The U.S. economy didn’t run into trouble the day Barack Obama took the oath of office. Even before the Great Recession, there were signs something wasn’t quite right. The economy grew by 4 percent annually and created 20 million new jobs during both the Reagan and Clinton booms. But in the [candidate makes air quotes] “Bush boom” of the 2000s, we couldn’t even hit 3 percent growth. And we created only about seven million jobs. Income growth was also a lot slower. I could go on and on. Productivity growth has been terrible during Obama’s Not-So-Great Recovery, but the slowdown started in 2006, when we had a Republican president. We’ve had problems with jobless recoveries and middle-income job lag since the early 1990s. Heck, the new business startup rate in this country has been falling for 30 years!
You can’t blame ObamaCare or Dodd Frank for all that. [Confused murmurs from audience.] The truth is technological automation and global competition are presenting new challenges to American workers. To meet those challenges and to turn them into opportunities means embracing new approaches, not recycling old ones. Certainly tax reform is part of the answer. I mean, we’re Republicans after all. Tax cuts are what we do. But you have to be savvy about cutting taxes when you’re already $18 trillion in the red. You need to pick your spots and get the most bang for your buck, like tax cuts and credits that boost working-class incomes — a rising tide is not lifting all boats right now — and spur business investment.
You want to do deep, across-the-board tax cuts like President Reagan did? Fine. God bless you. But keep in mind that for every percentage point you cut from those tax rates, you lose about $70 billion a year in revenue. And don’t expect to make up anywhere near that in economic growth. Even the Reagan tax cuts lost money, and the tax code was in far worse shape back then. [Unintelligible shouts from audience.] Heck, 40 percent of Americans don’t even pay income taxes.
Oh, and while we’re thinking about tax reform, keep in mind the federal tax burden will almost certainly need to rise in the future because we’ll have a lot more old folks. [Booing.] And we’ll have to pay for their pensions and healthcare. Smart entitlement and healthcare reform can reduce that tax increase — in that way it’s like a future tax cut — but it’s highly unlikely to eliminate it. Democrats need to accept that projected future benefits will need reduction, and Republicans need to accept a higher tax burden. [Extended booing.] Republicans should also be in favor of spending less money on rich people through tax breaks for homes and health insurance. [Several fist-shaking audience members stomp out.]
There’s just too much short-term thinking in this country. I mean, I’m no scientist, but we are doing something new to our planet and it hardly seems crazy to take out some insurance against a worst-case outcome. [Boos continue, get louder.] Let’s invest more in basic clean-energy research and remove regulatory barriers to more nuclear power. Maybe also eliminate the corporate income tax and replace it with a carbon tax. I note that even my friends on the Wall Street Journal editorial page said the other day that might be a good idea. And let’s not let Corporate America off the hook here. Too much short-termism there, as well, not just in Washington. Too much cash being returned to investors rather than going to fund new investment and innovation.
Now turning to foreign policy… Wait, where did everybody go?”
By: James Pethokoulis, The Week, July 2, 2015
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