“Power And Paychecks”: There’s No Excuse For Wage Fatalism; We Can Give American Workers A Raise If We Want To
On Wednesday, McDonald’s — which has been facing demonstrations denouncing its low wages — announced that it would give workers a raise. The pay increase won’t, in itself, be a very big deal: the new wage floor is just $1 above the local minimum wage, and even that policy only applies to outlets McDonald’s owns directly, not the many outlets owned by people who bought franchises. But it’s at least possible that this latest announcement, like Walmart’s much bigger pay-raise announcement a couple of months ago, is a harbinger of an important change in U.S. labor relations.
Maybe it’s not that hard to give American workers a raise, after all.
Most people would surely agree that stagnant wages, and more broadly the shrinking number of jobs that can support middle-class status, are big problems for this country. But the general attitude to the decline in good jobs is fatalistic. Isn’t it just supply and demand? Haven’t labor-saving technology and global competition made it impossible to pay decent wages to workers unless they have a lot of education?
Strange to say, however, the more you know about labor economics the less likely you are to share this fatalism. For one thing, global competition is overrated as a factor in labor markets; yes, manufacturing faces a lot more competition than it did in the past, but the great majority of American workers are employed in service industries that aren’t exposed to international trade. And the evidence that technology is pushing down wages is a lot less clear than all the harrumphing about a “skills gap” might suggest.
Even more important is the fact that the market for labor isn’t like the markets for soybeans or pork bellies. Workers are people; relations between employers and employees are more complicated than simple supply and demand. And this complexity means that there’s a lot more wiggle room in wage determination than conventional wisdom would have you believe. We can, in fact, raise wages significantly if we want to.
How do we know that labor markets are different? Start with the effects of minimum wages. There’s a lot of evidence on those effects: Every time a state raises its minimum wage while neighboring states don’t, it, in effect, performs a controlled experiment. And the overwhelming conclusion from all that evidence is that the effect you might expect to see — higher minimum wages leading to fewer jobs — is weak to nonexistent. Raising the minimum wage makes jobs better; it doesn’t seem to make them scarcer.
How is that possible? At least part of the answer is that workers are not, in fact, commodities. A bushel of soybeans doesn’t care how much you paid for it; but decently paid workers tend to do a better job, not to mention being less likely to quit and require replacement, than workers paid the absolute minimum an employer can get away with. As a result, raising the minimum wage, while it makes labor more expensive, has offsetting benefits that tend to lower costs, limiting any adverse effect on jobs.
Similar factors explain another puzzle about labor markets: the way different firms in what looks like the same business can pay very different wages. The classic comparison is between Walmart (with its low wages, low morale, and very high turnover) and Costco (which offers higher wages and better benefits, and makes up the difference with better productivity and worker loyalty). True, the two retailers serve different markets; Costco’s merchandise is higher-end and its customers more affluent. But the comparison nonetheless suggests that paying higher wages costs employers a lot less than you might think.
And this, in turn, suggests that it shouldn’t be all that hard to raise wages across the board. Suppose that we were to give workers some bargaining power by raising minimum wages, making it easier for them to organize, and, crucially, aiming for full employment rather than finding reasons to choke off recovery despite low inflation. Given what we now know about labor markets, the results might be surprisingly big — because a moderate push might be all it takes to persuade much of American business to turn away from the low-wage strategy that has dominated our society for so many years.
There’s historical precedent for this kind of wage push. The middle-class society now dwindling in our rearview mirrors didn’t emerge spontaneously; it was largely created by the “great compression” of wages that took place during World War II, with effects that lasted for more than a generation.
So can we repeat this achievement? The pay raises at Walmart and McDonald’s — brought on by a tightening job market plus activist pressure — offer a small taste of what could happen on a vastly larger scale. There’s no excuse for wage fatalism. We can give American workers a raise if we want to.
By: Paul Krugman, Op-Ed Columnist, The New York Times, April 3, 2015
“The Conscience Of A Corporation”: A Deeply Held Relationship With Five Members Of The Supreme Court
So here is Walmart, insisting that “our core basic belief of respect for the individual” is at odds with an Arkansas bill that would allow religious-based discrimination. And here is Marriott, slamming as “idiocy” similar measures in other states. And somewhere in there is the family-run pizzeria, asserting that Indiana’s new law allows them to deny wedding day pies to people whose choice of spouses they don’t approve of.
These businesses sell Chinese-made consumer goods, hotel rooms, and rounded dough burdened with pepperoni and extra cheese. Since when did they start spouting off about the deeply held convictions guiding their corporate consciences?
You can blame last year’s Supreme Court decision in the Hobby Lobby case for unleashing a herd of ponies that have gone off in quite unpredicted directions. There, in a partisan 5-to-4 ruling straight from Republican fever nests, the court gave certain corporations the right to challenge laws that they claim violate their religious beliefs. In that case, it was about contraception in the health care package.
Let’s pause to consider this new entity — a moneymaking organization no different from a lone human being who feels conscience-bound to live a certain way because of a deeply held relationship with God. Let’s pause, because five members of the Supreme Court would not.
One justice, the irrepressible Ruth Bader Ginsburg, warned of the consequences of giving corporations a soul: “The court, I fear, has ventured into a minefield.”
Ginsburg predicted that the court’s “expansive notion of corporate personhood” would invite profit-making companies to start using religion as an excuse to ignore laws they didn’t like. And indeed, states packed with right-wing legislators who see phantom persecution behind every new episode of “Modern Family” have clamored to give companies a spiritual opt-out clause.
So it is in Indiana. State lawmakers were also told to look before taking a big leap into spiritual exemptions for business. In a letter in February, legal scholars warned of corporations’ citing religious justification for “taking the law into their own hands.”
But, lo, look what happened on the way to forcing religion into the marketplace: The corporations — Apple, Nike, Yelp, Gap, PayPal, Big Pharma companies like Eli Lilly and the nine largest companies with headquarters in Indiana — have rebelled. They are saying: No, don’t give us the power to discriminate. We’d rather remain soulless purveyors of product to the widest possible customer base. Which is, I suppose, how capitalism is supposed to work. Bless the free market.
Indiana’s law is “not just pure idiocy from a business perspective,” said Marriott’s president, Arne Sorenson, but “the notion that you can tell businesses somehow that they are free to discriminate against people based on who they are is madness.”
Not March Madness, the culmination of which is what Indiana thought we’d all be celebrating in the Hoosier State this weekend. But political lunacy, of the type that’s been on display ever since the Republican Party hitched itself to the crazies who dominate its media wing.
But let’s not get too far ahead of ourselves. Walmart, which effectively killed the Arkansas bill a few days ago, remains locked in poverty wage mode, despite its recent boast of raising pay to at least $9 an hour. Apple, and most tech companies now strutting across the moral stage, continues to do business with countries where a person can be executed for being gay.
Their outrage is selective, and calculated: In corporate America, the branding conceit of the moment includes just the right dash of social activism. A little environmental nudge from your cereal, a talk about race from your barista — it’s mostly harmless.
Chick-fil-A learned a lesson in its journey from behind the grease counter and back over gay marriage. After condemning same-sex marriage and becoming a culture-war battleground, the corporate leaders of a company that professes to run on biblical principles now say they will stick with chicken talk. Everyone is welcome.
Good call. Nothing in the secular world keeps Chick-fil-A’s founders from free worship in private. For that matter, nothing in the secular world deprives any business owner of a lawful spiritual pursuit outside of the public square. Their profits will rise or fall because of consumer demand, rather than which side of a biblical exhortation the chicken-eater may be on.
All of this, the free market in tandem with the First Amendment, has worked pretty well in a clamorous democracy such as ours. It’s only when activist judges — thy names are Clarence Thomas, Antonin Scalia, Samuel Alito, Anthony Kennedy and John Roberts — have tried to broaden the intent of the founders that we’ve gotten into trouble.
In 2010, those five judges created the notion of corporate personhood — giving companies the unfettered right to dominate elections. After all, Exxon is just a citizen like you and me. And in 2014, those five judges gave corporations a soul, a further expansion of business entity as a citizen. Well, they tried to. As the saying goes, a corporation will never truly be a citizen until you can execute one in Texas.
By: Timothy Egan, Contributing Op-Ed Writer, The New York Times, April 3, 2015
“Jeb Bush’s Minimum Wage Radicalism”: The Abolition Of A Federal Minimum Wage Of Any Sort Is Now A Mainstream Republican Position
Every so often I feel the need to write the column that says: The one thing our political system needs more than any other single feature is a strengthened moderate wing of the Republican Party. I say this of course as a liberal, whose party registration is Democratic, which means you might think I’d say we need more liberals; and while I think that, I believe without question that having a strong moderate faction within the GOP would do far more to change our politics for the better than—yes—even having more Americans who think exactly as I do!
Having more liberals would if anything merely deepen the intensity of our civil war and produce more stalemate. The presence of a more muscular moderate Republican wing, however, would change everything. Then, there would be pressure on Republicans to adopt some sensible moderate positions, instead of what we have today, which is unceasing pressure to play this game of one-upmanship to see who can take the most reactionary, ignorant, and borderline racist position imaginable. Then, you’d have some Republicans from blue districts and states who would find it to be in their electoral self-interest to compromise with Democrats and vote for a Democratic president’s bill once in a while. Then, our political culture really would change.
And, then, people like Jeb Bush, the alleged moderate in the GOP presidential field, wouldn’t say jaw-dropping things like this, about the minimum wage, which he said Tuesday in (where else, somehow) South Carolina:
“We need to leave it to the private sector. I think state minimum wages are fine. The federal government shouldn’t be doing this. This is one of those poll-driven deals. It polls well, I’m sure—I haven’t looked at the polling, but I’m sure on the surface without any conversation, without any digging into it, people say, ‘Yeah, everybody’s wages should be up.’ And in the case of Wal-Mart, they have raised wages because of supply and demand and that’s good.
“But the federal government doing this will make it harder and harder for the first rung of the ladder to be reached, particularly for young people, particularly for people that have less education.”
Now it’s great that Wal-Mart and McDonald’s and Target and the others are voluntarily raising their minimum wages. One might argue that we’ve come to a particularly sad pass when the Walton family is doing more for its beleaguered workers than Congress can rouse itself to, but however you want to spin it, good for Wal-Mart.
But to take this little boomlet from what is still a small number of employers (although of course they do employ millions of people) and say that’s it, we should now have no federal minimum wage, is logical sleight of hand, and it’s a very radical position. A little background.
We first got a minimum wage in 1935. Then the Supreme Court declared it unconstitutional (which could happen again, with this lot). Then it was passed again in 1938. We’ve had it ever since, although, as you probably know, it hasn’t gone up since 2009. That rise was the third and final phase of a 2007 law that raised the wage in increments. We haven’t had a new law to that effect in those eight years since.
It is true that in the 1980s, economists debated whether a federal minimum wage was desirable. Even The New York Times once editorialized against it, in 1987. At the time, economists thought it had deleterious effects on low-wage employment. Then, in the mid-1990s, the economists David Card and Alan Krueger studied this question in New Jersey and Pennsylvania (the former had increase its minimum wage, while the latter had not), and they found no employment impact.
That changed the academic consensus. An increase was passed in 1996. Some conservative economists continued to spoon out the “job-killer” Kool-Aid, as indeed they still do, but evidence continues to support the idea that there is no serious job-killing effect.
The parties disagreed strongly about how much the wage should be increased, but at least they agreed on increasing it—the 2007 increase, for example, passed the Senate 94-3, and the House by 233-82. John McCain, the GOP’s 2008 standard bearer, voted for the 2007 increase. And Mitt Romney, the 2012 nominee, ran on supporting a modest increase and even indexing the minimum wage to inflation, which Barack Obama also supported and which would prevent Congress from having to pass legislation on the question ever again—a pretty progressive position, really.
So the last two mainstream, establishment GOP candidates—the last three, counting George W. Bush—supported an increase. But now, the mainstream, establishment candidate is against it. And if the mainstream, establishment candidate is against it, where are the others going to line up?
And so, one more hard-right pirouette by a party that keeps finding new ways to radicalize itself. But this one is particularly shocking coming from Bush, because it means that the abolition of a federal minimum wage of any sort is now a mainstream Republican position. And remember: The minimum wage, if it had kept pace with inflation, would be around $13 today, so it’s already insanely low at $7.25.
Which brings me back to how I opened this column. If there were a moderate wing of the GOP, this is most certainly an issue on which we’d have bipartisan agreement. The position Bush has just embraced would be seen across party lines for exactly the radical pandering that it is. Indeed he would not have taken it. That would be a nice world, but the world we have is the one we have. And if Bush can take this position, completely out of step with his party’s conservative mainstream in recent history, then what else will he prove himself capable of?
By: Michael Tomasky, The Daily Beast, March 20, 2015
“The Right To Discriminate”: What Do The GOP Candidates Think Of State ‘Conscience Clause’ Legislation?
There’s an interesting/horrifying piece in today’s New York Times about a trend across the country, but mostly in the South, to enact “conscience” legislation at the state level that would allow businesses to discriminate against gay people if they can justify it on the basis of their religion. One interesting facet of this issue is that the moneyed interests in the GOP, along with big corporations (not the same thing, but there’s plenty of overlap) are completely spooked by these bills. We’ll get to that in a moment, but here are some colorful details:
“The L.G.B.T. movement is the main thing, the primary thing that’s going to be challenging religious liberties and the freedom to live out religious convictions,” said State Senator Joseph Silk, an Oklahoma Republican and the sponsor of a bill in that state. “And I say that sensitively, because I have homosexual friends.”
Of course he does. He goes on:
“They don’t have a right to be served in every single store,” said Mr. Silk, the Oklahoma state senator, referring to gay people. “People need to have the ability to refuse service if its violates their religious convictions.”
I mean, come on. Gay people want to be able to go into every single store? Who do they think they are?
But this brings up a question for me. When the religious conservatives pushing these bills argue for why they’re needed, they always mention a retailer whose work gets right down into all that gayness. Like the baker who might have to make a cake for a gay couple and live through the horror of placing two female figurines on top of the cake, or the photographer who might have to take their picture, trying to see his camera’s viewfinder through the veil of tears he weeps at the destruction of the American family represented by two people making a commitment to spend their lives together.
But no legislator is going to specify an exhaustive list of who would and wouldn’t be able to refuse service, because doing so would be a very difficult thing to write into a bill’s text. Instead, the right to discriminate is inevitably written broadly. For example, one bill in Oklahoma says: “No business entity shall be required to provide any services, accommodations, advantages, facilities, goods or privileges related to any lesbian, gay, bisexual or transgender person, group or association.” Which would mean, for instance, that it would be legal for any store or restaurant to put up a sign saying, “We don’t serve gays.” Other bills (here, for example) are written even more broadly, just saying that the state can’t stop you from acting on your sincerely held religious beliefs, which would include discriminating against gay people if that’s your thing.
As the Times story details, some of these bills have died in the face of opposition from business interests; for instance, when Walmart came out against the one in Arkansas, it was pretty much doomed. The company may be conservative in many ways, but it doesn’t want its state to be known as a bastion of hatred and discrimination.
So I’d be interested to hear specifically from some influential Republicans—like, say, the ones running for president—on what they think of these laws. I looked around a bit and didn’t find any of them commenting on it, which isn’t too surprising given that it’s been playing out at the state level. But maybe someone should start asking. Do they think a baker ought to be able to discriminate? And if they say that there ought to be a way for the baker to exercise his “conscience,” then the next question is, what about a restaurant? What about a hardware store?
By: Paul Waldman, Senior Writer, The American Prospect, March 6, 2015
“Stupid Pills”: The Politics of Fraudulent Dietary Supplements
One pill makes you smarter. One pill makes you thin. One pill makes you happy. Another keeps you energized. And so what if tests conducted by scientists in New York and Canada have found that the substances behind these miracle enhancements may contain nothing more than powdered rice or houseplants. If enough people believe they’ll be healthier, well, it’s a nice racket.
Nice, to the tune of $13 billion a year in sales. And here in Utah, which is to the dietary supplement business what Northern California is to marijuana, a huge industry has taken hold, complete with a network of doctors making unproven claims, well-connected lobbyists and entrenched politicians who keep regulators at bay.
If you want to know how we came to be a nation where everyone is a doctor, sound science is vilified and seemingly smart people distrust vaccinations, come to Utah — whose state flower should be St. John’s wort. Here, the nexus of quack pharma and industry-owned politicians has produced quite a windfall: nearly one in four dollars in the supplement market passes though this state.
We’re not talking drugs, or even, in many cases, food here. Drugs have to undergo rigorous testing and review by the federal government. Dietary supplements do not. Drugs have to prove to be effective. Dietary supplements do not.
These are the Frankenstein remedies — botanicals, herbs, minerals, enzymes, amino acids, dried stuff. They’re “natural.” They’re not cheap. And Americans pop them like Skittles, despite recent studies showing that nearly a third of all herbal supplements on the market may be outright frauds.
The labels say Ginkgo biloba, or ginseng, or St. John’s wort. But testing announced by the state of New York this week found that the Ginkgo biloba sold by Walmart, for example, contained no Ginkgo biloba DNA — it was a mixture of rice, mustard, wheat and radish.
Some of the country’s largest retailers are selling junk in a pill, a step removed from sawdust. Counting on the stupidity of consumers, the big chains don’t seem to care. As of Thursday, four days after Eric T. Schneiderman, the New York State attorney general, asked retailers to pull the tested products from their shelves in his state, you could still go to Walmart online and buy the allegedly fraudulent products.
So, there is Spring Valley echinacea — with a bold label reading: Immune Health — selling for $8.98 a bottle on Walmart’s website. It comes with a handy “customer review,” touting an “Excellent quality product!” This about a substance that contained no echinacea, according to the attorney general.
Too bad it takes Canada, or the maverick work of someone like the New York attorney general, to get at the truth of this industry, because it is so well-insulated from federal government oversight. Schneiderman’s investigation was prompted by an article in The New York Times Science section, reporting on Canadian findings that some of the most popular supplements were nothing but cheap fillers.
To understand how we got here, you have to go back to 1994, when Senator Orrin G. Hatch of Utah midwifed through Congress a new industry protected from all but minimal regulation. It is also an industry that would make many of his closest associates and family members rich. In turn, they’ve rewarded him with sizable campaign contributions.
Even though serious illnesses, and some deaths are on the rise from misuse of these supplements, Hatch is determined to keep regulators at bay. “I am committed to protect this industry and the integrity of its products,” he told a gathering of potency pill-pushers and the like in Utah last fall.
In the past, Hatch has been remarkably blunt about helping his family and friends in the fake drug trade. “I do whatever they ask me to do many times because they’ve never asked me to do anything that is improper,” Hatch said in 2011. He was referring to the firm of his son, Scott Hatch, a longtime lobbyist for the supplement industry.
That’s the political side, an all-too-familiar story of mutual beneficiaries born in the halls of Congress. But what about the medical implications? These pills and powders can’t, by law, make specific claims to cure anything. So they claim to make you healthier. The consumer is left playing doctor, reading questionable assertions that course through the unfiltered garbage of the Internet.
“There’s a lot of wrong information out there,” warns the American Cancer Society, in its tutorial on these products. “Even for those who are usually well informed, it can be hard to find reliable information about the safe use and potential risks of dietary supplements.”
And there was this finding reported in the authoritative Annals of Internal Medicine: “Enough is enough: Stop wasting money on vitamin and mineral supplements.” Oh, those elites at the American College of Physicians, what do they know?
So, the industry keeps growing, with 65,000 dietary supplements now on the market, consumed by nearly half of all Americans. The larger issue is mistrust of authority, a willful ignorance that knows no political side. Thus, right-wing libertarians promote a freewheeling market of quack products, while left-wing conspiracy theorists disdain modern medicine in favor of anything sold as “natural” or vaguely countercultural. These are some of the same people who will not vaccinate their children.
Everyone wants to live longer, to be happier, to have better sex. And, if you think you can do it without exercise, or eating enough vegetables, or getting regular sleep, there are a thousand pills for you, sold not far from the candy counter. It’s all based on the honor system. If you trust them, go buy some possibly Ginkgo biloba-free Ginkgo biloba, and thank Orrin Hatch for the unfettered right to be a sucker.
By: Timothy Egan, Contributing Op-Ed Writer, The New York Times, February 6, 2014
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