“Who Is For Growth And Job Creation And Who Isn’t”: The Biggest Thing Centrists Miss About The Inequality Debate
With the electoral victory of Bill de Blasio in New York City, an unabashed economic progressive, and the rising star of Elizabeth Warren, the issue of inequality has come to occupy center stage in lefty policy discussions. As Greg has been writing, it’s popular — something we see in reports today that Democrats are planning to use a near-certain GOP vote against a bill hiking the minimum wage against them in 2014.
But this has brought about a reaction from center-left types, who insist that the progressives have their priorities wrong. In the process, they mischaracterize the progressive view, and set up a false dichotomy between that and establishment positions. Progressives see inequality as a fundamental part of why our economy is not working as it once did, not a problem to be placed above job creation.
Bill Keller recently provided a representative sample:
The left-left sees economic inequality as mainly a problem of distribution — the accumulation of vast wealth that never really trickles down from on high. Their prescription is to tax the 1 percent and close corporate loopholes, using the new revenues to subsidize the needs of the poor and middle class…
The center-left — and that includes President Obama, most of the time — sees the problem and the solutions as more complicated. Yes, you want to provide greater security for those without independent means (see Obamacare), but you also need to create opportunity, which means, first and foremost, jobs. … The center-left … agrees on the menace of inequality, but places equal or greater emphasis on the fact that the economy is not growing the way it did for most of the last century.
First of all, this is a bit rich to hear from the center. The left has been howling about jobs and growth for five years now, for so long and so loud that our collective tonsils have about come unglued — and who were we arguing against? The centrists, who were a major bloc of support behind the premature turn to austerity back in 2010. Better late than never, I guess. Welcome to the party, guys!
In fact, this longstanding hair-on-fire panic about mass unemployment, which until now has been met with near-total indifference from the elite, is a big part of what motivates the inequality focus today. Because I have never met or even heard of someone concerned with inequality who is not also a fervent supporter of immediate monetary and fiscal stimulus to restore full employment as fast as possible. (That’s Item One in the inequality-reduction handbook!) The problem isn’t just mass unemployment — it’s the fact that we haven’t done anything about it since 2009. As Steve Randy Waldman has written, there are many economic strategies to create jobs now, of which we are trying none whatsoever. Inequality-driven discrepancies in political influence are a probable factor here.
What’s more, there is a compelling case that inequality is a major reason why our economy seems so prone to bubbles and why traditional policy remedies no longer have much purchase on job creation. A full recounting is beyond the scope of this post, but such arguments are worth taking seriously.
In any case, Keller is right to say that Republicans are now the major obstacle to any job creation agenda, so if centrists are now aboard the jobs train, I welcome them with open arms. They just shouldn’t kid themselves about who is for growth and job creation, and who isn’t.
By: Ryan Cooper, The Plum Line, The Washington Post, December 24, 2013
“Supporting The Politicians”: Wal-Mart Exploits Employee Charity To Help Ted Cruz And John Boehner
Wal-Mart and other top U.S. corporations “reap worker political donations through charities,” according to a Bloomberg report published Monday.
Reporter Renee Dudley wrote that major companies, “forbidden to give money directly to political action committees, are taking advantage of controversial federal rules allowing them to ask employees to do it for them in exchange for matching charitable donations.” Dudley notes that the Federal Election Commission ruled in the 1980s that tying employees’ charitable donations to matching political contributions was legal, and that precedent has remained in place despite repeated disagreement within the agency, including a split vote in 2009. She reports the practice “has become commonplace,” and that those who contribute are mostly in management.
Wal-Mart, the world’s largest private employer, draws particular attention in the Bloomberg story, which says the retailer’s program is distinguished by offering a two-to-one rather than one-to-one match, and by requiring that the charitable donations go to the company’s Associates in Critical Need Trust. Wal-Mart’s employee-to-employee charitable activities drew unkind scrutiny in November, when the Cleveland Plain Dealer reported on a worker-to-worker food drive at a local store.
Bloomberg cites a 2004 memo from Wal-Mart’s then-general counsel pledging, “We’re going to be relentless in encouraging participation until 100% of our management associates are on board.” Center for Responsive Politics data for Wal-Mart’s “PAC for Responsible Government,” cited by Dudley, show a roughly even split in donations between Republicans and Democrats, with recipients including House Speaker John Boehner, Tea Party favorite Senator Ted Cruz and hometown conservative Democratic Senator Mark Pryor. (A June report from the union-backed Making Change at Walmart campaign, factoring in donations from the Walton family which owns half the company, found that 69 percent of combined total Wal-Mart and Walton donations from 2000 to 2012 went to Republican candidates or committees.)
Wal-Mart did not immediately respond to Salon’s inquiry regarding Bloomberg story. Wal-Mart Vice President David Tovar told Bloomberg’s Dudley that the program was “a great way for people who contribute to the PAC to also do good for fellow associates,” and offered “an opportunity to support the company and the things we’re advocating for on behalf of the shareholders, our associates, our customers” at the state and federal levels.
As I’ve reported, Wal-Mart also maintains the Walmart Foundation, whose grantees have included non-profits in key cities where the company seeks to expand. The legally-distinct Walton Family Foundation is a major funder of anti-union education reform efforts.
Bloomberg’s story comes weeks after a day of civil disobedience actions mounted by the non-union workers’ group OUR Walmart, which is closely tied to the United Food & Commercial Workers union. In an e-mailed statement, OUR Walmart activist Barbara Gertz called the Bloomberg story “further proof that Walmart is determined to spend millions to support politicians who vote to cut food stamps and who oppose increasing the minimum wage, instead of focusing on creating good jobs in our communities.” While OUR Walmart and allies have recently emphasized Wal-Mart employees’ widespread use of public assistance programs (including Congresswoman Jan Schakowsky calling those at the top of the company “welfare kings”), in October Wal-Mart’s U.S. CEO declared the company “cautious but modestly optimistic” that food stamp cuts would be good for business — a statement Congressman John Conyers told Salon “borders on the ludicrous.”
Gertz, a Denver Wal-Mart employee, said it was “upsetting to hear that Walmart not only exploited the associates in critical need fund to push a political agenda that hurts ordinary Americans, but it also may have done so in violation of federal laws.”
By: Josh Eidelson, Salon, December 23, 2013
“Family Values Hypocrisy”: We Need To Think More About “Positive Liberty”, The Ability To Realize Certain Goals In Our Lives
Politicians talk about family values but do almost nothing to help families. They talk about parental responsibility but do almost nothing to help parents. They talk about self-sufficiency but do precious little to make self-sufficiency a reality for those who must struggle hardest to achieve it.
How often can we hear that government should be more responsive to the problems Americans face now? But the vogue for simply assuming that government cannot — or should not — do much of anything about those problems leads to paralysis. This, in turn, further increases disaffection from government.
For all these reasons, it was exciting last week to see Sen. Kirsten Gillibrand of New York and Rep. Rosa DeLauro of Connecticut introduce the FAMILY Act, the acronym standing for their Family and Medical Insurance Leave Act. The bill would provide partial income for up to 12 weeks of leave for new parents and for other family demands, such as care for a sick family member, including a domestic partner.
How far behind the rest of the world is our country on this quintessential family values matter? The Post’s Amy Joyce cited a Harvard University study in 2004 noting that of 168 countries it examined, 163 had some form of paid maternity leave. We weren’t one of the 163. Joyce observed that “the U.S. is on par with places like Papua New Guinea and Swaziland when it comes to paid family leave.”
The usual knock on proposals of this sort is that they would put an excessive economic burden on employers — or cost the federal government money it doesn’t have. Gillibrand and DeLauro, both Democrats, solve this problem by establishing FAMILY as an insurance program. Premiums would range from about $72 to $227 a year, depending on a person’s income. The maximum benefit is capped at $4,000 a month. They expect the average monthly benefit to be less than half that.
There is nothing revolutionary about this proposal. It builds on the existing (and highly popular) Family and Medical Leave Act, which requires unpaid leave and was enacted two decades ago. It is modest in comparison with leave policies in other well-off countries.
Yet in light of Congress’s dismal record since the Republican takeover of the House in 2010, it would be revolutionary to see any law passed that empowered individuals and families to ease their everyday difficulties.
Our current discussion of what constitutes “freedom” is shaped far too much by a deeply flawed right-wing notion that every action by government is a threat to personal liberty and that the one and only priority of those who care about keeping people free is for government to do less than it does.
This perspective ignores the many ways over the course of our history in which government has expanded the autonomy of our citizens. Consider how much less freedom so many of us would have without civil rights or voting rights laws, without government student loans, without labor laws, without public schools and without Medicare, Medicaid and Social Security. (And we don’t take seriously enough the implications of a most basic fact of our national story: that it took big government in Washington to outlaw slavery.)
Gillibrand’s role in championing this proposal also deserves attention. She is known nationally for her battle on behalf of victims of sexual assault in the military. But she has put forward five bills labeled as an “American Opportunity Agenda.” All of them involve ideas that have won broad support over many years. Besides pressing for paid family leave, she is calling for a minimum wage increase, affordable child care, universal pre-kindergarten programs and equal pay for equal work.
At a time when the political news is dominated by a debate between do-little conservatism and do-nothing conservatism — which is to say, between a right-tilting Republican establishment and the radical tea party — Gillibrand’s package includes building blocks for a broader counter-vision inspired by the idea of an Empowering Government.
Yes, we need to protect what the philosophers call “negative liberty.” There are, indeed, many things that government should never be able to do to us. But we need to think more about “positive liberty,” the ability to realize certain goals in our lives. Democratic government can create the framework in which we have more power to reach those ends.
And surely a country that honors the devotion of family members to each other should want to make it at least a little easier for them to do their jobs.
By: E. J. Dionne, Jr., Opinion Writer, The Washington Post, December 15, 2013
“Higher Profits, Smaller Paychecks”: Corporations Increasing Profits At The Expense Of Workers
Two cheers for the comeback of American manufacturing. Or maybe just one.
The manufacturing sector has experienced a modest renaissance since it hit bottom during the Great Recession. The number of manufacturing jobs is set to rise this year, as it has every year since 2010. Profits are soaring — in 2012, after-tax profits of manufacturing firms hit a record high of $289 billion. Share values have soared with them. The Standard & Poor’s 500 Industrials Index has risen 59 percent more than the overall 500-stock index since 2009, Bloomberg reported last month.
Wages, however, are falling. Although the average wage for all workers, adjusted for inflation, has declined by about 1 percent since May 2009, Bloomberg reported, it has declined by 3 percent for workers in the more-profitable-than- ever manufacturing sector.
Numbers like these explain the epic drama playing out in Washington’s Puget Sound region, from which Boeing, long the area’s dominant employer, has threatened to at least partially decamp. Several weeks ago, with the reluctant blessing of union leaders who feared the company might relocate production, Boeing presented its workers with an ultimatum: Either they had to agree that the new hires who would build the company’s new 777X passenger jetliner would have to work for 16 years, rather than the current norm of six, to bump up to full union scale, or Boeing would build the plane elsewhere. Instead of making roughly $28 an hour to build one of the world’s most sophisticated pieces of machinery, workers would make roughly $17 an hour, or less, until they’d put in a decade and a half on the job.
By a 2-to-1 margin, the workers rejected their leaders’ recommendation and voted down the offer. Boeing then initiated a bidding war to see how much in tax breaks it could wring from states that wanted the work. More than a half-dozen states have sent in bids, some with side agreements from local unions that members would work at reduced rates, some with no such agreements because unions barely exist in their states.
It’s not as if Boeing is a clothing manufacturer scrambling to meet the price competition of rivals that make their goods in Bangladesh. Boeing’s sole competitor in the large-scale passenger-plane market is Airbus, the European conglomerate whose workers’ wages are comparable to those in the United States. But Boeing has already located one major plant in South Carolina, where workers make about $10 an hour less than their Puget Sound counterparts. It’s through such moves, and the threat of further such changes, that U.S. manufacturers have increased their profits at the expense of their workers’ paychecks.
None of the workers at either end of Boeing’s pay scale makes anything like the federal minimum wage, but I suspect the anxiety instilled by these kinds of stories is one reason there is wide, and growing, support for raising the minimum wage. It takes no great imaginative leap to see a time in the not-too-distant future when the incomes of all but a fortunate, talented tenth of the U.S. workforce are reduced or held stagnant. Indeed, the median inflation-adjusted salary for American men is already lower today than it was in 1969. Tyler Cowen, a heterodox libertarian economist, has written that the U.S. economy is morphing into one in which 10 to 15 percent of the workforce will be wealthy and the remainder will resign themselves to making do with less. He foresees little likelihood that the eradication of the broad middle class will lead to a United States “torn by unrest.”
I am not sure that the docility of the American people can be so readily assumed. The adoption of minimum-wage increases and living-wage ordinances throughout increasingly liberal cities and blue states suggests that where workers have the capacity to rebalance the economy through legislation, they’ll do just that. With the near-elimination of unions from the private-sector economy, legislation remains the sole means available for workers to bargain for their fair share of their company’s revenue, particularly in sectors, such as retail, that can’t really relocate. That’s why the victories of those workers demonstrating at Wal-Mart and fast-food outlets have taken the form of legislated increases in local minimum wages, rather than resulting in union contracts.
The fight for higher minimum wages may be just the beginning of a long battle to rebalance the economy. If laws are not changed to enable workers to form unions without fear of being fired, the battle for higher median, not just minimum, wages will eventually be fought in the legislative arena as well. Profits that come at the expense of downwardly mobile workers may find little honor — or legislative support — in their own country.
By: Harol Meyerson, Opinion Writer, The Washington Post, December 13, 2013
“A Sordid Approach To The Uninsured”: Republican’s Increasingly Appear Eager To Punish The Poor Because They’re Poor
Even if the Affordable Care Act is implemented perfectly, and the system works exactly as planned, millions of Americans will go without access to affordable health care. Is it due to a flaw in the law? Not exactly.
The problem is Republican opposition to Medicaid expansion at the state level. If your income is between 100% and 138% of the poverty line, you can qualify for Medicaid and get covered – unless you live in a “red” state where GOP officials have rejected Medicaid expansion. If so, you can (a) move; (b) figure out a way to make more money; or (c) go without.
Just in recent days, we’ve seen reports reinforcing how inexplicable these states’ policies really are. Refusing Medicaid expansion will not only cost states billions, but it will also severely undermine state hospitals, all while hurting struggling families.
Kevin Drum today called it “one of the most sordid acts in recent American history.”
The cost to the states is tiny, and the help it would bring to the poor is immense. It’s paid for by taxes that residents of these states are going to pay regardless of whether they receive any of the benefits. And yet, merely because it has Obama’s name attached to it, they’ve decided that immiserating millions of poor people is worth it. It is hard to imagine a decision more depraved.
Alternatively, Republicans in Congress could agree to fix this problem and allow people without access to Medicaid to qualify for exchange subsidies. But of course they won’t do that either for the same reason.
Conservatives hate it when you accuse them of simply not caring about the poor. Sometimes they have a point. This is not one of those times.
I strongly agree, though I’d just add that it’s amazing to hear Republican governors who reject Medicaid expansion try to present their approach as sensible.
Wyoming Gov. Matt Mead (R) recently said he refused the policy because he doesn’t like exchange marketplaces, which doesn’t make any sense. Alaska Gov. Sean Parnell (R) justified his opposition by saying the health care law is a “mess,” which is shallow even by GOP standards. Wisconsin Gov. Scott Walker (R) appeared on MSNBC and said he rejected Medicaid expansion because, someday, federal officials may “renege on their promise” to reimburse states.
Has that ever happened? No. Is there any reason to believe it might happen? No. Could Wisconsin bring coverage to struggling families in the meantime, and then drop the policy in the event Washington refused to meet its obligations? Yes, but Walker doesn’t want to.
The larger takeaway here is that Republican officials increasingly appear eager to punish the poor because they’re poor. Indeed, it’s become a common theme in GOP policymaking just in recent weeks: no extension of unemployment benefits, no extension of the status quo on food stamps, no increase in the minimum wage, and wherever possible, no Medicaid expansion, either.
Republicans better hope low-income Americans vote in low numbers in the near future.
By: Steve Benen, The Maddow Blog, December 9, 2013
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