Outten & Golden: Empowering Employees in the Workplace

Posts Tagged ‘economy’

Jobs Report: Change Still Needed

Friday, July 8th, 2016

The June jobs report – a cheery 287,000 new jobs, with unemployment ticking up to 4.9 percent – is cause for both relief and concern.

The relief is that jobs creation picked up after the slowdown of April (revised upward to 144,000) and May (revised downward to 11,000). Even subtracting the 35,000 jobs “created” by striking Verizon workers returning to work, the June report suggests an economy that is continuing to grow and generate jobs.

The continuing concern is the pace of that growth. Jobs creation is slowing, down from a monthly average of 229,000 last year, to 196,000 in the first quarter, and now to 147,000 in the second quarter. Yet over 15 million people are still in need of full-time work. The percentage of Americans of working age who are employed or looking for work is at 62.7 percent, still below pre-Great Recession levels. Average hourly wages ticked up by 2 cents in June, and wage growth remains slow – 2.6 percent over the past year – far below the levels associated with previous recoveries.

This is the last jobs report before the political conventions formally kick off the presidential campaign (which already feels like a recurring and unending nightmare). For Clinton and Democrats, the report provides some relief that the economy isn’t slowing dramatically. For Donald Trump and the Republicans, it provides continued evidence that the economy isn’t soaring. Working families are likely to continue to wonder when they will begin to share in the recovery.

For Democrat Hillary Clinton, these conditions pose particular perils. President Obama will want Democrats to tout his success – record months of private sector jobs growth, over 14 million jobs created since 2010, seven years of economic growth, unemployment down by more than half since the Great Recession he inherited, the strongest economy in the industrial world.

But most Americans aren’t sharing in the rewards. Median family incomes haven’t recovered to pre-recession levels. The wealthiest 1 percent captured a staggering 52 percent of the rewards of growth from 2009 to 2015. And now a weaker Europe post-Brexit and a stronger dollar suggest that our trade deficits will worsen, putting more pressure on jobs and wages.

Americans are looking for change, not for more of the same. Trump will be spouting that message, with a mix of bluster and preposterous policy to support it (build the wall, slash trillions in taxes, renegotiate the debt, and so on). Clinton and Democrats need to make a clear case on how they will change this economy to work for the many – generating more good jobs, higher wages, and a better deal for working people. More of the same offers no way out.

This blog originally appeared in ourfuture.org on July 8, 2016. Reprinted with permission.

Robert Borosage is a board member of both the Blue Green Alliance and Working America.  He earned a BA in political science from Michigan State University in 1966, a master’s degree in international affairs from George Washington University in 1968, and a JD from Yale Law School in 1971. Borosage then practiced law until 1974, at which time he founded the Center for National Security Studies.

Does Moving Jobs Out Of The Country Affect What People Here Get Paid?

Tuesday, May 24th, 2016

Dave JohnsonEconomists are still arguing over whether moving our jobs out of the country affects what the people still here get paid. Yes, really.

For example, Jared Bernstein in The Washington Post looks at different studies of the effect of moving jobs out of the country. One study, by economists David Autor, David Dorn and Gordon Hanson (referred to by Bernstein as “ADH”), was published in January by the National Bureau of Economic Research. The other, by economist Josh Bivens at the Economic Policy Institute, was published in 2013. Both found that moving jobs out of the country hurt the wages of not just the affected workers but everyone in the surrounding area. The question is, does this wage-depressing effect spread outside the local area?

Bernstein writes, “The analytic question is twofold. First, are American workers really hurt by trade competition, and second, if so, are there spillovers to those not directly in competition with imports?”

To understand the difference … in Bivens vs. ADH, consider two towns, one with two businesses, a factory and restaurant, and the other with just a restaurant. In ADH’s findings, the negative spillover, or diffusion, stays mostly in the first town. The factory takes a competitive hit from cheaper Chinese imports. This, of course, directly hurts the blue-collar factory workers, but it also hurts the restaurant workers, both through demand (fewer factory workers showing up for lunch) and supply (more competition for jobs at the restaurant) effects.

In Bivens’s model, and this is the way most economists think about this (which doesn’t, by a long shot, make it correct), the ADH story holds in town one, but town two also gets hit, even though there’s no factory there facing increased global competition. Displaced workers from town one can’t find enough work there so they head for town two, and the added supply effect puts downward pressure among town two’s restaurant staff members.

It comes down to this. Do laid-off workers stay where they are (ADH), which means the wage-depression stays local? Or do they move elsewhere and compete with people who still have jobs (Bivens), thereby depressing wages there as well?

There’s a simple way to test this. Detroit and Flint are just two examples of cities hit by factories that were closed so employers could pay less in other countries but bring the same goods back here to sell in the same stores (so executives and Wall Street shareholders can pocket the differential for themselves).

So did the laid off workers stay put (ADH) or move (Bivens)? Detroit’s population was 1.85 million in 1950. That fell to 713,777 in the 2010 census. Flint’s population was 196,940 in 1960 and fell to 99,763 in 2013.

They moved. The “effect” did not stay in Detroit and Flint. So everyone else’s wages took a hit, too. Multiply what happened in these two cities nationally and you get the picture. If you don’t get the picture, here is the picture:

OK, it isn’t all that simple. ADH do look at “commute zones,” and there are other factors depressing wages. They cite technology, along with the “decline of unions, eroding minimum wages, the rise of nonproductive finance, and especially the persistent absence of full employment labor markets” as factors reducing worker bargaining power and fostering wage stagnation. Whatever. Bernstein writes the following, which is important especially as we head into an election where Donald Trump is using the costs of trade as a main issue:

Still, the main message from ADH, Bivens, and the rest of us who’ve been trying to raise this cost side of the equation for decades is that these costs are real. They’re acute for many people and places and diffuse to some degree for others. Economic platitudes about how trade is always worthwhile as long as the winners can compensate the losers are an insult in the age of inequality, where the winners increasingly use their political power to claim ever more winnings.

Most of us feel the costs of moving so many jobs out of the country (and calling it “trade”) while a few are making a killing from it. Those few are using their political power to keep the rigged game going.

P.S.: It is important to point out that once again the idea of “trade” in elite discussion is entirely about moving American jobs to places where people are paid less and the environment is not protected, in order to reduce “costs.” They don’t actually mean “trade” as in “they sell us bananas and use the money to buy cars” – because who cares?

This post originally appeared on ourfuture.org on May 12, 2016. Reprinted with Permission.

Dave Johnson has more than 20 years of technology industry experience. His earlier career included technical positions, including video game design at Atari and Imagic. He was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.

Interfaith Coalition Calls for Moral Action on the Economy

Monday, April 4th, 2016

The largest employer of low-wage workers in America is the federal government. U.S. government contractors employ over two million workers in jobs that pay too little – $12.00 an hour or less – to support a family. Contract workers – organizing under the banner of Good Jobs Nation – have walked off of their jobs repeatedly in protest, demanding a living wage and the right to a union.

This Monday, on the anniversary of Dr. Martin Luther King’s death, this movement will gain a powerful ally. Led by Jim Winkler, general secretary of the National Council of Churches and Sister Simone Campbell, executive director of the Catholic social justice lobby NETWORK, an interfaith coalition of religious leaders is issuing a call for “moral action on the economy.” They will seek to meet with presidential candidates, asking each to pledge that, if elected, he or she would issue an executive order to reward model employers “that pay a living wage of at least $15.00 an hour, provide decent benefits and allow workers to organize without retaliation.”

The movement for living wages is taking off. The federal minimum wage has been stuck at $7.25 for nearly seven years. Unable to provide for their families, fast food and other low-wage workers began to demonstrate, even at risk of losing their jobs. “Fight for 15” – the demand for a $15.00 an hour minimum wage and the right to a union – swept across the country. And is beginning to win.

In Seattle, a coalition of union, community and business leaders helped pass legislation putting the city minimum wage on a path to $15. From Los Angeles to Chicago to New York, other cities joined. In the last few days, California legislators reached a deal to move the state minimum wage to $15 by 2022. In New York, Governor Andrew Cuomo pushed through reforms that will move that state’s minimum wage to $15, starting in December 2018 in New York City.

The pressure of the government low-wage workers moved President Obama to act. He issued three executive orders, raising the minimum wage to $10.10, cracking down on wage theft and other workplace violations, and providing paid leave. The workers continued to demonstrate, calling for “more than the minimum,” seeking $15 and a union.

Senate cafeteria workers – the people who prepare the senators’ food and clean up after them – joined the protests. Their plight – one was homeless, others on food stamps, one moonlighting as a stripper to feed her children – was embarrassing. Democratic Senate staffers organized to support them. Democratic senators like Bernie Sanders (Vt.), Elizabeth Warren (Mass.), and Brian Schatz (Hawaii) demanded action. When the cafeteria contract was up for renewal in December, workers were granted pay increases of $5 an hour or more. It took more pressure and Labor Department investigation to make the raises stick, but today workers are finally receiving their pay.

Washington Post columnist Catherine Rampell, who has documented the struggle highlighted one beneficiary, Bertrand Olotara, a cook in the Senate cafeteria. His wage went from $12.30 to $17.45 an hour. He was able to quit his second job at Whole Foods and stop working seven days a week. That gave him more time with his five children. He’s even thinking of using the extra time to write a book. A living wage makes real differences in people’s lives.

Now the interfaith coalition joining with these workers and calling on those contending for the presidency to promise to do more. Republican contenders are still opposed to raising the minimum wage. Bernie Sanders has made a $15 an hour minimum wage a central plank in his platform. Hillary Clinton has supported lifting the national minimum wage to $12.50, accepting that some states and cities might go higher.

The interfaith alliance is calling on the presidential candidates to pledge moral action on the economy. When Ronald Reagan came to office, one of his first acts was to fire and replace the striking PATCO air controllers. He sent a message to employers across the country that it was open season on workers and their unions. Imagine the next president taking office and issuing an executive order lifting the wages of millions of contract workers and guaranteeing a right to organize without retaliation. Again a signal would be sent across the country.

“This election is fundamentally about whether the next president is willing to take transformative executive action to close the gap between the wealthy and workers – many of whom are women and people of color,” argues Jim Winkler, secretary general of the National Council of Churches. It’s time to take the pledge.

This blog originally appeared in ourfuture.org on April 4, 2016. Reprinted with permission.

Robert Borosage is a board member of both the Blue Green Alliance and Working America.  He earned a BA in political science from Michigan State University in 1966, a master’s degree in international affairs from George Washington University in 1968, and a JD from Yale Law School in 1971. Borosage then practiced law until 1974, at which time he founded the Center for National Security Studies.

People’s Budget Puts Forward An Aggressive Plan To Green Our Economy

Wednesday, March 16th, 2016

Isaiah J. Poole

Members of the Congressional Progressive Caucus will formally unveil their fiscal 2017 People’s Budget on Tuesday, and when they do one of the key features they will tout is an aggressive plan to shift the country to a green energy future.

“Climate change is no longer just a problem for a future generation — it is here today,” the budget document says, adding that the nation needs “to take bold action to fight climate change and invest in a clean-energy economy that supports green jobs with good wages.”

The policies embodied in the People’s Budget closely track the policies that the Campaign for America’s Future, along with partners National People’s Action, Alliance for a Just Society and USAction, called for in their progressive policy platform last year. The budget even echoes the platform language: “Catastrophic climate change is a clear and present danger. The United States should lead the global green revolution that builds strong and resilient communities.”

The People’s Budget would impose a tax on carbon polluters that would start at $25 per ton of carbon dioxide emissions and increase at a rate of 5.6 percent a year. Much of the money raised from that tax would be used to fund a range of renewable energy initiatives and to help low-income individuals cope with any increases in their energy bills that might result from the combination of the carbon tax and the switch to renewables.

This carbon tax would, according to the Energy Information Administration, lead to the U.S. cutting its carbon emissions 26 percent below 2005 levels within five years. That would be a significant contribution toward the United States’ pledges during the Paris climate talks last year to help limit global warming to no more than 3 degrees Celsius (about 5 degrees Fahrenheit), and preferably much lower.

The budget would also eliminate about $135 billion in fossil fuel subsidies over 10 years. These tax expenditures, combined with other loopholes fossil fuel companies typically exploit, enable these companies to pay a tax rate that is on average only about 11 percent of their profits, according to one study by the conservative-leaning Taxpayers for Common Sense. By shutting down these subsidies, the People’s Budget is able to pour resources into helping communities protect themselves from the consequences of climate change that are already beginning to unfold.

Lukas Ross of Friends of the Earth called the People’s Budget “the greenest option in Washington” in a post on DailyKos. Ross noted that in addition to what the budget proposes to do that is directly related to climate change, it includes $12 billion to cover the public financing of elections. That’s important to the environmental movement because so far this election season, “Big Oil has already poured over $13 million into Congressional races and over $100 million into the presidency. Climate solutions require politicians who aren’t beholden to Big Oil, and even though public financing can’t guarantee direct climate results, it can guarantee a more level playing field for candidates not drowning in oil money.”

The People’s Budget is a comprehensive road map for economic reform that will stand in sharp contrast to what Republican congressional leaders will propose this week as they launch their own 2017 budget debates. As the National Priorities Project outlines, the budget “includes a $1 trillion in much-needed investment in our national infrastructure …. fully funds Early Head Start, giving kids a strong start early in life, and adopts the president’s proposals for universal preschool … provide[s] federal matching funds to states so that students could go to college debt-free … does away with the Pentagon slush fund after fiscal year 2017 (Overseas Contingency Operations), saving $761 billion over ten years … [and] If you earn a billion dollars or more each year … the People’s Budget would assign you a tax rate of 49 percent [that] is still lower than the highest individual tax rate during most of the presidency of conservative hero President Ronald Reagan.”

The budget also serves as a standard for what a presidential or congressional candidate should be willing to embrace in order to earn progressive support. In that regard, a coalition of grassroots organizations are telling Democratic house members that their vote on the People’s Budget, expected the week of March 21, will be a key vote in weighing their support.

To declare yourself a citizen co-sponsor of the People’s Budget, and to show Congress that the ideas in the People’s Budget have broad support, sign this petition that will be delivered to Congress when the House begins floor debate.

This blog originally appeared at OurFuture.org on March 14, 2016. Reprinted with permission.

Isaiah J. Poole worked at Campaign for America’s Future. He attended Pennsylvania State University and lives in Washington, DC.

What’s The Problem With “Free Trade”

Monday, March 14th, 2016
Dave Johnson

Our country’s “free trade” agreements have followed a framework of trading away our democracy and middle-class prosperity in exchange for letting the biggest corporations dominate.

There are those who say any increase in trade is good. But if you close a factory here and lay off the workers, open the factory “there” to make the same things the factory here used to make, bring those things into the country to sell in the same outlets, you have just “increased trade” because now those goods cross a border. Supporters of free trade are having a harder and harder time convincing American workers this is good for them.

“Free Trade”

Free trade is when goods and services are bought and sold between countries without tariffs, duties and quotas. The idea is that some countries “do things better” than other countries, which these days basically means they offer lower labor and environmental-protection costs. Allowing other countries to do things in ways that cost less “frees up resources” which can theoretically be used for investment at home.

Opponents of free trade ask for tariffs to “protect” local businesses, jobs, wages and the environment from being undermined by low-cost goods from countries where people and/or the environment are exploited.

Free trade is generally sold as offering lower prices to consumers. It is also sold with claims that it “opens up foreign markets” to U.S. exporters. But it also opens up U.S. markets to imports.

Does Trade Really “Open New Markets?”

“When more than 95 percent of our potential customers live outside our borders, we can’t let countries like China write the rules of the global economy.”
– President Barack Obama

“[W]hen 95 percent of the people we want to sell something to live outside of the United States, we must open foreign markets to American goods and services so we can create jobs at home.”
U.S. Chamber of Commerce

“Ninety-five percent of America’s potential customers live overseas, so closing ourselves off to trade is not a solution.”
Hillary Clinton

It is a fact that only 5 percent of the world’s population lives in the United States. The problem is that the line of argument that opening up trade “opens markets” brings with it certain misleading assumptions. It assumes first that non-U.S. markets are not already being served by local companies. Second, it ignores that free trade also opens our own markets to others. Third, it ignores that U.S. companies already can and do sell to most of the world’s markets and vice versa. (For example, U.S. companies were already moving production to Mexico before NAFTA, the North American Free-Trade Agreement.) Suggesting that alternative approaches to trade would “close us off from trading” or “wall our economy off from the world” are ridiculous, misleading arguments.

If local companies are already meeting the needs in U.S. and non-U.S. markets, what does a trade deal really enable? Trade deals indeed “open up new markets” – for giant, predatory multinational corporations. They enable large, predatory companies that have enormous economies of scale to come in and dominate those markets, putting smaller, local companies out of business. So trade deals mean the biggest multinational companies get bigger and more multinational – at the expense of all the other companies. This includes enabling non-U.S. corporations to come to the U.S. and take over markets already served by smaller companies here.

The net result of allowing goods to cross borders without protecting local businesses is a “more efficient” manufacturing/distribution system powered by the biggest and best capitalized operations. The rest go away. Economists will tell you that these increased efficiencies allow an economy to best utilize its resources. But obviously one effect of this “increased efficiency” is fewer jobs, resulting in lowered wages on all sides of trade borders.

After NAFTA, for example, smaller, more local Mexican farms were wiped out by large, efficient American agricultural corporations that were able to sell corn and other crops into Mexico for low prices. The result was a mass migration northward as desperate people could no longer find work in Mexico.

Economists say even this is good because when costs are lower the economy can apply its resources more efficiently and increased investment can put the displaced people to work in better jobs. But we can all see that in our modern economy that’s not what is going on. Investment in our economy is not increasing, partly because the resulting downward wage pressure has resulted in an economy with decreased demand. Fewer customers with money to spend is not a good environment for investment. Instead of these “freed up” resources (money) being used to provide better jobs with higher wages for everyone, they are instead being concentrated into fewer and fewer hands.

As for opening new markets for American exporters, note that the record since the ascendance of free-trade ideology in the 1970s we have seen continuing and increasing U.S. trade deficits, with imports exceeding exports, resulting in flat wage growth.

Freeing up trade does not “open new markets” as much as it enables giant, multinational corporations to become even more giant and more multinational – at the expense of smaller companies and the rest of us.

Comparative Advantage

Economists say that free trade allows us to take advantage of the “comparative advantages” offered by other countries. A comparative advantage exists when one country can do something better than another country. For example, Central and South America can grow bananas better than the U.S., and we can grow wheat better than they can. So trading wheat for bananas makes sense.

Unfortunately, economists also say that low labor and environmental-protection costs are a comparative advantage. They say it is good for U.S. companies to take advantage of countries with governments that exploit labor and the environment, because they offer lower costs for manufacturing. (Of course, the ultimate form of such a comparative advantage would be slavery.)

Here’s the thing. Buying goods from low-wage and low-environmental protection countries means not making them here anymore. “Trade” increases, but so does our country’s trade deficit as imports rise and exports fall. Factories here close, people here get laid off, wage pressures here increase and overall demand in our economy decreases.

When “thugocracies” that exploit workers and do not protect the environment are able to offer a comparative advantage over our democracy, then free trade makes democracy with its good wages and environmental protections into a comparative disadvantage.

Free Trade Undermines Democracy And Wages

“Give us a protective tariff, and we will have the greatest nation on earth.” – Abraham Lincoln.

Democracy has a short-term “cost” with a longer-term gain. In countries where people have a say, the people say they want higher wages and benefits, good infrastructure, good education, a clean environment, safety on the job, and other services. These things all lead to a prosperous economy later, as long as benefits from this system are fed back into maintaining that infrastructure, education and services. This prosperous economy made America a desirable market to sell things to.

When the country and the idea of democracy were young we “protected” this concept with tariffs, so that goods from places where labor was cheap (or free) did not undermine our democracy. Those tariffs in turn funded investment in infrastructure and other common needs that enabled productivity gains that made our goods competitive elsewhere. But generally companies here served the population here and grew and prospered along with the rest of us.

At some point elites and free-market “economists” began an effort to convince us that “free trade” is a good thing and “protectionism” is not. We used to “protect” our country’s manufacturing base from being undermined by goods from low-wage countries that don’t protect workers or the environment. Then we didn’t.

“Free trade” broke down those borders of democracy. It enabled goods from low-wage countries into the U.S. with no protective tariffs. This made the low wages and lack of environmental and worker protections in some countries into a “comparative advantage” – which meant democracy because a comparative disadvantage. We stopped “protecting” American jobs, and allowed companies to freely lay off workers and close factories here and we have seen what has happened since.

The fact is, a democracy cannot “play by the same rules” as a country that can make people live in barracks at the factory and call them out to work at midnight if an order comes it, make them stand all day, pay them very little, pollute the environment, etc. The rules should instead be that we impose a tariff on goods from such countries unless they “level the playing field” and “play by the same rules” as democracies by giving people a say, paying more and protecting the environment.

Free trade became a scam intended to get around those costs of democracy – good wages, environmental protection and other common goods – but also to use cheap foreign labor and low regulation as a wedge to drive down those costs here as well, and ultimately weakening democracy itself. Every time you hear that regulations make “us” “less competitive” etc. you are hearing an appeal for our country to become more of a low-wage, low-cost “thugocracy.”

Does Protecting Democracy Cause Trade Wars And Depressions?

Free-trade advocates claim that restoring tariffs to protect wages and democracy would start trade wars and even cause recessions and depressions. One claim they make is that tariffs helped cause the Great Depression of the 1930s. Economist Paul Krugman took on that argument in 2009’s “Protectionism and the Great Depression,” writing,

I’ve always seen this as an attempt at a Noble Lie; there’s no good reason to believe that it’s true, but it has been used to scare governments into maintaining relatively free trade.

But the truth is quite different, as a new paper by Barry Eichengreen and Doug Irwin shows. Protectionism was a result of the Depression, not a cause. Rising tariffs didn’t even play a large role in the initial trade contraction; like the spectacular trade contraction in the current crisis, the decline in trade in the early 30s was overwhelmingly the result of the overall economic implosion. Where protectionism really mattered was in preventing a recovery in trade when production recovered.

As for trade wars, economist Ian Fletcher points out in “Free Traders Can’t Name a Single Trade War“:

Trade wars are mythical. They simply do not happen.

If you google “the trade war of,” you won’t find any historical examples. There was no Austro-Korean Trade War of 1638, Panamanian-Brazilian Trade War of 1953 or any others. History is devoid of them.

[. . .] Trade wars are an invented concept, a bogeyman invented to push free trade.

The giveaway, of course, is that free traders claim both that a) trade wars are a terrible threat we must constantly worry about, and b) it’s obvious no nation can ever gain anything from having one. Think about that for minute.

Voters Finally Pushing Back

These are the reasons that voters across the country are finally pushing back against politicians selling “free trade.” Friday’s post, “‘Free Trade’: The Elites Are Selling It But The Public Is No Longer Buying” explained how Donald Trump and Bernie Sanders are gaining from their opposition to free trade deals like NAFTA and the upcoming Trans-Pacific Partnership. From the post: “Voters have figured out that our country’s current ‘free trade’ policies are killing their jobs, wages, cities, regions and the country’s middle class. Giant multinational corporations and billionaires do great under free trade, the rest of us not so much.”

Free trade encourages further exploitation of workers and the environment in other countriesand here. It helps fuel calls inside of our own country for “less regulation” (fewer environmental protections), “right-to-work” laws (that break unions and lower wages) and “more competitive” tax policies (that defund democracy and our ability to provide public services) to “attract” companies back to the U.S.

It is time for Washington elites to scrap our current “free trade” negotiating model that allowed giant, multinational corporations to dictate our trade policies, and open up the process to all of the stakeholders, including labor, environmental, consumer, human rights and other groups. Then we can begin to negotiate trade policies that lift American workers along with workers across the world, while protecting the environment.

This blog originally appeared at ourfuture.org on March 13, 2016.  Reprinted with permission.

Dave Johnson has more than 20 years of technology industry experience. His earlier career included technical positions, including video game design at Atari and Imagic. He was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.

State of the Union: Don’t Let the TPP Sink Our Wages

Tuesday, January 12th, 2016

CD speaking at UCSD FairTrade RallyThe president will give his final State of the Union address tonight. Traditionally, this annual speech reviews the accomplishments of years past and sets out a “to-do” list for the year ahead. Although the White House has indicated that this year’s speech will be “nontraditional,” it has made clear the economy will be a major focus.

I hope the president will talk about the importance of the proposed overtime rule, which could raise wages for some 15 million of America’s working people. I also hope he talks about how the auto manufacturing industry has soared back to life since the so-called bailout, which saved 1.5 million jobs in its first year alone.

While the economy isn’t perfect, and most of us are still feeling the pinch of student loans, too-smallpaychecks, threats to retirement security and not enough voice in our workplaces, there are a lot of successes the president can look back on with pride in his speech.

On the other hand, there is also a new trade and economic deal on the horizon—the Trans-Pacific Partnership—that could poke a hole in the progress our economy has made since the president came in to office in 2009.

The thing that’s dangerous about the TPP, and the reason we should worry about it shrinking our paychecks, is not the idea of trade. Trade is good—but we shouldn’t confuse “trade” with so-called “trade agreements,” which set down rules not just for “trade,” but for food safety, Wall Street regulations, prescription medicines and investor rights. These are the kind of rules that should be made in public, in democratic fashion, not in a secretly negotiated agreement that can’t be amended. The TPP’s corporate giveaways are dangerous.

Existing trade rules (including those in the North American Free Trade Agreement and the U.S.–Korea trade deal) already cost the average U.S. worker $1,800 a year, according to the Economic Policy Institute, and preliminary studies on the TPP by Center for Economic and Policy Research and Tufts indicate that we can expect that figure to get worse.

Working people are deeply disappointed that the opportunities to put workers’ interests first and eliminate corporate entitlements in the TPP were largely ignored.  And more importantly, working people are disappointed because we know that all of these things mean fewer good jobs in our communities and fewer opportunities for our children.

The TPP is the latest example of the failed U.S. approach to trade that started with NAFTA, which drives down wages and creates special rights for corporations.  The TPP could have been different, but instead it is a collection of minor tweaks designed to get congressional votes rather than ensure workers’ wages rise.

The AFL-CIO wants trade agreements that grow our economy, create good jobs in America and give working people in all countries the chance to succeed when they work hard. Instead, passage of the TPP will mean lost jobs and lower wages.

Compared to eight years ago, the U.S. economy is afloat and heading toward improvement. The TPP will undermine that progress and give us rocky sailing ahead. There is simply no good argument for trading away our right to control our economy in exchange for more corporate power.

I hope the TPP doesn’t come up at all in the State of the Union speech. We’d be better off without it. But if it does—let’s be clear about what it really means for America’s working families.

Let’s raise our voices against this corporate giveaway and make it clear the TPP must go down to defeat!

This blog appeared on aflico.org on January 12, 2016.  Reprinted with permission.

Celeste Drake is a Trade & Globalization Policy Specialist at AFL-CIO.  Her experience with the labor movement was as a UFCW member while bagging groceries during college.  She also served as the Legislative Director for Representative Linda Sanches (D-CA).

What's This Friedrichs Case Really About?

Monday, January 11th, 2016
Jackie Tortora

You may have heard something about the upcoming U.S. Supreme Court case on Friedrichs v. California Teachers Association. The main thing you need to know is that this is an attack on working people’s freedom to come together and form unions, plain and simple. These are the nurses who make sure their patients have what they need to get well and the teachers who advocate for their students and class sizes.

Here’s a handy graphic you can share with your friends and family.

Friedrichs_3_800
This blog originally appeared at aflcio.org on January 5, 2016.  Reprinted with permission.
Jackie Tortora is the blog editor and social media manager at AFL-CIO.

 

Thomas Piketty Ran The Numbers On Income Inequality. Here’s What He Found.

Wednesday, January 6th, 2016

Bryce CovertSome of the top experts on income inequality released a study of new, more accurate data this week, revealing that Americans in the top 1 percent have done far better than everyone else for the last half century — and why they’ve gotten so far ahead.

At the American Economic Association conference this week, economists Emmanuel Saez, Gabriel Zucman, and Thomas Piketty released their preliminary research that uses a new analysis of tax, survey, and national accounts data. That’s more accurate, they say, than just looking at tax data, which misses huge chunks of the actual income people bring home.

The new analysis disputes previous findings that the bottom 90 percent of Americans have seen a slight decline in income since the late 1970s. Instead, the economists say, their income actually increased slightly, by 0.7 percent annually. But the data still corroborates the story of increasing inequality between most Americans and the richest. The incomes of the wealthiest 10 percent grew faster than everyone since 1980, they found. Worse, incomes for the top 1 percent grew about four times as fast as the bottom 90 percent in the same time period.

The data revealed other disturbing trends as well. Until 1980, income for the bottom 90 percent grew at the same pace as the rest of the economy. But after that point, incomes slowed down while the economy kept growing.

Along the same lines, income among the top 10 percent and the bottom 90 used to grow at about the same rate. But since 1980, it’s grown faster at the top and slower at the bottom.

Part of what’s happening is that the source of the top 1 percent’s income has changed. Up until the late 1990s, most of the growth was driven by the rich getting higher wages. But since then, it’s been driven by capital income — money made from returns on investment. That jibes with a past study that found that lowered tax rates on capital gains income are “by far the largest contributor” to growing income inequality

For everyone else, on the other hand, wage growth is more important to income. But wages for most Americans have been stagnant for the last 40 years, even as economic productivity continued to increase.

Things have gotten bad enough that now the top 10 percent of Americans are taking home about half of all of the country’s income, more than what they captured during the roaring 1920s. And the recession, rather than leveling the playing field, has only made things worse. Between 2009 and 2014, the top 1 percent took home 58 percent of all income growth.

This blog originally appeared at ThinkProgress.org on January 6, 2016. Reprinted with permission.

Bryce Covert is the Economic Policy Editor for ThinkProgress. She was previously editor of the Roosevelt Institute’s Next New Deal blog and a senior communications officer. She is also a contributor for The Nation and was previously a contributor for ForbesWoman. Her writing has appeared on The New York Times, The New York Daily News, The Nation, The Atlantic, The American Prospect, and others. She is also a board member of WAM!NYC, the New York Chapter of Women, Action & the Media.

The Economy: The New Normal Isn’t

Wednesday, December 9th, 2015

Robert-Borosage_The November jobs report – 211,000 jobs with the headline unemployment rate staying at 5 percent – met “expectations.” It is now virtually inevitable that the Federal Reserve will begin raising interest rates at its December 15-16 meetings, as Fed Chair Janet Yellen indicated in her congressional testimony yesterday.

The Federal Reserve action essentially declares this economy the new normal. The unemployment rate has dropped from its 10 percent depths in the Great Recession to 5 percent. The economy has enjoyed a record 69 months of private sector jobs growth. Fed Chair Janet Yellen suggests the U.S. economy has sufficient momentum to continue to grow.

While inflation remains far below the Fed “target” of 2 percent, Yellen anticipates that the dollar won’t continue to rise in value and oil won’t continue to fall, suggesting that inflation might pick up in future months. So, she argues, it is time for the Fed to begin – in baby steps and very cautiously – to raise interest rates.

But the new normal is neither normal nor acceptable. Nearly 16 million people are still in need of full-time work. The percentage of the civilian population working or actively looking for work remained virtually unchanged at 62.5 percent, near a 40-year low (back to when women began entering the workforce in large numbers).

African-Americans suffer unemployment rates at 9.4 percent, almost twice the national average. Only one in five of young African-Americans – ages 16 to 19 – are employed.

We still haven’t returned to the same levels of employment, counting new entrants, that we enjoyed before the recession in 2007. Wages are still stagnant, up barely over 2 percent for the year for non-supervisory workers, not close to keeping up with the cost of health care or college or child care.

Worse, the Fed is tightening against the threat of future inflation that exists only in its imagination. And it does so in a world dangerously close to global downturn. Europe verges on deflation, with the European bank extending extraordinary measures to fend off decline. China is slowing faster than expected or admitted. Japan is back in recession. Brazil is suffering the deepest downturn since the Great Depression, with other emerging market countries in decline.

The U.S. economy is not strong enough to be the buyer of last resort for a world desperate to export its way to recovery. The U.S. dollar has already dramatically increased in value, with the Euro and other currencies weakening. This makes imports cheaper and exports more expensive. Already U.S. manufacturing is getting hit.

The Fed is understandably eager to begin raising rates after keeping them near zero for seven years. Free money feeds the bankers’ casino, inflates bubbles, and makes it easier for corporations to doctor their balance sheets. What is missing is any sensible policy from the Congress to get this economy going. Corporations are parking over two trillion abroad to avoid paying taxes. If Congress weren’t ruled by ideologues and bounders, it would force them to pay their fair share of taxes and use that money to rebuild the country, putting people to work in work that needs to be done.

Both the Fed Chair Yellen and the IMF have been calling for action from the Congress without success. Instead, Congress turns itself inside out to pass a modest highway bill that won’t come close to addressing the continued decline in our infrastructure.

This world is closer to a global recession than to healthy normal economic growth. The Fed’s likely action will be modest. But at a time when we need far bolder action across the globe, the Fed is signaling success when it ought to be raising warning flags.

This blog originally appeared at OurFuture.org on December 4, 2015. Reprinted with permission.

About the Author: Robert Borosage is the Co-Director of the Campaign for America’s Future.

 

Demand Paid Sick Leave for All Employees to Ensure a Healthier and More Productive Workplace

Thursday, October 8th, 2015

grace baehrenIt’s a familiar situation: being sick and at work—or having a sick family member who requires care. While most of us would prefer to stay home and get well or provide care, for the majority of American workers taking a sick day means taking a pay-cut. Not only is the idea of losing pay unappealing, but many American workers simply cannot afford the loss. For some, taking an unexpected day off may even mean risking termination.

Up until now, the push for paid sick leave has been limited to the state and city levels of government. Progress was made with 4 states and Washington, D.C. mandating a paid sick leave accrual system for all employees, and multiple localities passing similar city ordinances (see our state and local paid sick leave laws page).

But now, change is happening at the federal level. On Labor Day, September 7, 2015, President Obama announced an executive order establishing paid sick leave for federal contractors. The order requires federal contractors to provide their employees with up to 7 days of paid sick leave per year beginning in 2017.

Additionally, the Family and Medical Insurance Leave Act, or “FAMILY” Act (House, Senate), is proposed legislation that aims to extend paid sick and family leave to all employees in the United States. These standards would provide all employees with at least some partial income, based on a monthly income benefit standard and subject to a capped amount, when such periods of leave are necessary.

If the foreseeable public health benefits aren’t enough to convince you that paid sick leave is beneficial for the workplace, take a look at this letter to Congress signed by over 200 business professors from universities throughout the United States. Among the benefits of paid sick leave discussed in this letter are more productive and engaged employees, as well as long term cost-saving for businesses who offer paid leave.

We need employers and employees everywhere to urge Congress to make legislative changes that support workers, families, employers, and our nation’s economy. Tell your members of Congress to support the Family and Medical Insurance Leave Act and make paid leave a reality for all!

About the Author: The author’s name is Grace Baehren. Grace Baehren is a student at The University of Hawaii’s William S. Richardson School of Law and an intern at Workplace Fairness.

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