“Bush ‘Woefully Misinformed’ On Overtime Policy”: The Economy, In Other Words, Is Not Bush’s Strong Suit
With Congress unwilling to pass meaningful economic measures, President Obama’s recently unveiled overtime policy is one of the year’s biggest stories on the domestic economy. Jeb Bush, not surprisingly, doesn’t like it, but he may not fully understand it, either.
To briefly recap, under the status quo, there’s an annual income threshold for mandatory overtime: $23,660. Those making more than that can be classified by employers as “managers” who are exempt from overtime rules. The Obama administration’s Labor Department has spent the last several months working on the new plan, which raises the threshold to $50,440 – more than double the current level.
The policy doesn’t just nibble around the edges; its scope includes roughly 5 million American workers. NBC’s Kristin Donnelly reported the administration’s move constitutes “the most ambitious intervention in the wage economy in at least a decade.”
Campaigning in Iowa this week, Jeb Bush said the policy would result in “less overtime pay” and “less wages earned.” The Guardian did some fact-checking.
Numerous economists attacked Bush’s statement, calling him woefully misinformed. And several studies on the rule contradict Bush’s assertion that the overtime rules would “lessen the number of people working”.
Daniel Hamermesh, a University of Texas labor economist, said: “He’s just 100% wrong,” adding that “there will be more overtime pay and more total earnings” and “there’s a huge amount of evidence employers will use more workers”.
Indeed, a Goldman Sachs study estimated that employers would hire 120,000 more workers in response to Obama’s overtime changes. And a similar study commissioned by the National Retail Federation – a fierce opponent of the proposed overtime rules – estimated that as a result of the new salary threshold, employers in the restaurant and retail industries would hire 117,500 new part-time workers.
The Economic Policy Institute’s Ross Eisenbrey added that Bush “should be embarrassed about how misinformed he was.” Noting that the Republican presidential candidate also said Obama’s policy would also prohibit many bonuses, Eisenbrey added, “All of that is exactly wrong – and pretty much nonsense.”
On a surface level, it’s problematic that Bush would flub the issue so poorly, but it’s even more significant in the context of related confusion about economic policy.
Remember, the Florida Republican remains deeply committed to 4% GDP growth – a target no president has reached in the post-WWII era – despite the fact that the number was basically pulled out of thin air.
Bush picked the growth goal because, as he sees it, four is a “round number.” The fact remains, however, that this is “backed by zero substantive analysis of any kind.”
The former governor still sees himself as some kind of economic expert, thanks to Florida’s growth in the 1990s, but as we’ve discussed before, whether Bush is prepared to admit it or not, Florida’s economic growth during his two terms was the result of a housing bubble. In fact, Paul Krugman accurately described it as “the mother of all housing bubbles – and when the bubble burst (luckily for Jeb! just after he left office) it promptly wiped out 900,000” of the 1.3 million jobs created when Bush was in the governor’s office.
The economy, in other words, is not Bush’s strong suit.
By: Steve Benen, The Maddow Blog, July 17, 2015
“Jeb And His Vassals Lose Sight Of The Serfs”: It’s The Lash, Always The Lash
“In the feudal system,” The Oxford English Dictionary says, a vassal is “one holding lands from a superior on conditions of homage and allegiance.”
The system lives on in modern American politics, forsooth in changed form. No longer is it local lords providing military support to a king in return for grants of land. Nowadays, the vassals show their loyalty in the form of large campaign checks. In return, they are promised various economic privileges, among them protection from taxation.
The ritual in all its pageantry has been on display at the Bush family compound in Kennebunkport, Maine. There former president George Herbert Walker Bush, his wife, Barbara, and other members of the Bush dynasty hold court to advance Jeb Bush’s quest for the presidency. The object is to make Jeb the second son of H.W.’s, after George W., to capture the White House.
Picture the Bush clan treating CEOs, sports-team owners, and other modern-day vassals to lobster rolls and consenting to pose in the courtiers’ selfies. Imagine the splendor: the many houses, including a new one for Jeb, perched on the rocks of Walker’s Point, the Atlantic crashing at their feet.
Such invites are “the prize for members of the vaunted Bush fund-raising operation,” writes political reporter Nicholas Confessore. They are why Jeb has raised as much money for his campaign as the other Republican presidential candidates and their SuperPACs combined.
Spending so much time in this closed society may also help explain Jeb’s politically awkward remark that Americans “need to work longer hours.”
In olden times, the serfs were regarded as beasts of burden, to be whipped into higher productivity. Conditions are much improved, but one can assume the conversations at the Bush compound do not linger long on the common folk’s economic interests.
A big reason Donald Trump is matching or passing Jeb in the polls is that he is talking to the serfs. He may be saying stupid things, but at least he recognizes their existence.
Bush complained that his views are being taken out of context and elaborated. He really said that sustained growth requires that “people work 40 hours rather than 30 hours.” That way, they have more money and can “decide how they want to spend it rather than getting in line and being dependent on government.”
Another way of stimulating growth would be to have Americans work the same hours but get paid more. That, too, would put more money in their pockets, prompting more spending and saving. This solution might require employers to share more of the profits with their laborers as they used to do. Such scenarios don’t cross the royal mindset, the key to growth always being to crank up the serfs’ stress level.
The reality is that lots of Americans would love a 40-hour job but are instead stuck working two 30-hour jobs, neither offering such luxuries as health coverage and vacation time. That’s the sad reality of today’s job market and one reason the Affordable Care Act was so necessary. It subsidizes health coverage for workers who can’t get it through their employment.
But economic security in some eyes is dependency in others’. One conservative argument goes that repealing Obamacare would force workers into the 40-hour jobs they’re alleged to be turning up their noses at. It’s the lash, always the lash.
Over at Walker’s Point, donors are meeting a new set of Bushes, known as “P’s crowd.” That would be George P. Bush, a son of Jeb’s apparently looking to claim the family political inheritance. Some of P’s followers have parents who back P’s parent.
Me thinks the show goes on.
By: Froma Harrop, Featured Post, The National Memo, July 16, 2015
“A Major Issue In The 2016 Elections”: Walker Dismisses Minimum Wage As ‘Lame’
Just a few weeks before his re-election bid, Wisconsin Gov. Scott Walker (R) was asked whether minimum-wage laws should even exist. The Republican governor replied, “Well, I’m not going to repeal it but I don’t think it’s, I don’t think it serves a purpose.”
Seven months later, shortly after kicking off his GOP presidential campaign, Walker went just a little further. The Washington Post reported:
Scott Walker appeared to take aim at the national minimum wage on Monday evening, referring to it as one of many “lame ideas” pushed by Democrats.
Walker’s comment came in a lengthy interview with Fox News’s Sean Hannity immediately following a speech formally announcing his entrance into the 2016 presidential race. Walker said the next president needs to speak the language of the industrial Midwest and connect with the working class.
According to the video, eagerly disseminated by Democratic officials, Walker told the Fox News host, “The left claims that they’re for American workers and they’ve just got just really lame ideas – things like the minimum wage.”
In context, there was nothing to suggest the governor was talking about his opposition to a minimum-wage increase, so much as the existence of the minimum wage itself. To hear Walker tell it, the law is a “lame” benefit for American workers.
It’s a pretty provocative move for a national candidate – increasing the minimum wage is one of the more popular ideas in the country right now, enjoying broad support for a wide range of voters. Just a month ago, a CBS News poll found 71% of Americans want to see the minimum wage go from $7.25 an hour to $10.10 an hour – and that included a majority of self-identified Republican voters.
The Wisconsin governor, meanwhile, appears to support lowering the minimum wage to $0.
What’s just as interesting is how common this position has become in GOP circles. For decades, the debate was largely limited to those who wanted to raise the minimum wage and those who wanted to leave it unchanged. There were a few folks on the margins opposed to the law itself, but this was a fringe position that few took seriously.
This year, however, a growing number of presidential candidates are practically boasting about their hostility forwards the minimum wage. Former Texas Gov. Rick Perry (R), for example, has suggested getting rid of the minimum altogether, arguing it’s not “the government’s business” to interfere with wages. Sen. Marco Rubio (R-Fla.) has said, plainly, “I don’t think a minimum wage law works.”
Earlier this year, former Florida Gov. Jeb Bush (R), whom some see as a moderate, went so far as to say, “We need to leave it to the private sector. I think state minimum wages are fine. The federal government shouldn’t be doing this.”
Walker clearly wants to be part of the same club. Expect this to be a major issue in the 2016 elections.
By: Steve Benen, The Madow Blog, July 14, 2015
“From Someone Who Was Raised In Privilege”: Jeb Bush Wants Us To Work More For The Collective Good. Who’s The Socialist Now?
Former governor Jeb Bush’s announcement this week that he thinks people should work more hours puts him in direct opposition to the two leading contenders on the Democratic side – both of whom are pushing proposals that will allow people to work less. This could mean that 2016 will be an election in which work hours play a central role.
Bush’s comment came during a speech in which he listed the things that Americans need to do to reach his target of 4.0% annual GDP growth “as far as the eye can see”: increase labor force participation, work longer hours, and increase productivity. (It was not the first time that Bush said that he thought people should work more – he previously argued for raising the normal retirement age for Social Security.)
The sight of someone who was raised in privilege and relied on family connections to make his careers in business and politics telling the rest of the American public that they have to work more will make good fodder for Bush’s political opponents. But this position is actually held by many people in policy circles in both political parties.
Even if almost no one thinks that Bush’s 4.0% permanent growth target is remotely plausible, those that agree with his premise that Americans need to work more argue that we need more workers in order to sustain economic growth at all. In particular, they posit that, as our population ages, we will have to keep people in the work force beyond the current retirement age and get more hours of work from them each year until they do retire.
This view is striking given that the United States – and most of the rest of the world – has been suffering from the opposite problem for the last eight years: we don’t have enough jobs for the people who want them. The United States, Europe, and Japan all have fewer people working than would like to work because there is insufficient demand in the economy. Obviously we can’t both have a shortage of workers and a shortage of jobs at the same time.
One of the theories that is getting widely (and wrongly) repeated is that none of us will have work because robots are taking all the jobs. But, while the robots taking all our jobs story is an exaggeration, the basic point is right: we are seeing rising productivity, which means that we can produce more goods and services with the same amount of labor. Productivity, including that spurred by technological innovation, is the basis for rising living standards.
Historically, the benefits from higher productivity are higher pay and more leisure – if we go back a century, for instance, work weeks of 60 or even 70 hours a week were common. But while the American work week has been largely fixed at 40 hours a week for the last 70 years, other countries have pursued policies to shorten the work week and/or work year through paid sick days, paid family leave, and paid vacation.
Several European countries have actively pushed policies of work sharing as an alternative to unemployment: the government compensates workers, in part, for a reduction in hours rather than paying unemployment insurance to someone who has lost their job. Germany has led the way in pushing work sharing policies, which is an important factor in its 4.7% unemployment rate. And, as a result of work sharing and other policies, the average worker in Germany puts in almost 25% fewer hours each year than workers in the United States, according to the OECD. Most other wealthy countries are similar to Germany: in the Netherlands, the average work year is 21% shorter than in the US and, in Denmark, it is 20% shorter.
The leading Democratic contenders are proposing policies to bring the US more in line with the rest of the world’s work weeks. Secretary Clinton indicated that she will support paid family leave and paid sick days, although she has not yet produced specific proposals. Senator Bernie Sanders, the other leading contender, also supports paid family leave and paid sick days, and he recently offered a proposal that would guarantee all workers two weeks per year of paid vacation. That might seem like small change compared to the five to six weeks a year that is now standard in Europe, but it would be a huge gain for tens of millions of workers.
There is a long way yet before the parties select their nominees, but if the general election ends up being a contest between Jeb Bush and either Clinton or Sanders, it will present the country’s workers with an unusually clear choice. We will have one candidate who wants to ensure that people can work less but keep the same standard of living, and another who wants people to work more hours and retire later for the good of the country’s economy – and the latter candidate is the one who doesn’t identify as a socialist.
By: Dean Baker, The Guardian, July 12, 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
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