Mike Konczal

Roosevelt Institute Fellow

Recent Posts by Mike Konczal

  • The Diversity of Arguments for a Higher Minimum Wage

    Mar 3, 2014Mike Konczal

    I have a piece in the new Boston Review on seven ways of looking at a higher minimum wage increase. I wanted to step back from the denser statistical arguments (though those are included) and get a sense of why the minimum wage is popular and an important feature of our economy. The diversity of reasons is remarkable. The seven ways I focus on are inequality, poverty, policy, feminism, conservatism, republicanism, and Catholicism's living wage. I hope you check it out.

    I have a piece in the new Boston Review on seven ways of looking at a higher minimum wage increase. I wanted to step back from the denser statistical arguments (though those are included) and get a sense of why the minimum wage is popular and an important feature of our economy. The diversity of reasons is remarkable. The seven ways I focus on are inequality, poverty, policy, feminism, conservatism, republicanism, and Catholicism's living wage. I hope you check it out.

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  • Recent Writings, February 2014 Edition

    Feb 19, 2014Mike Konczal

    Recent Rortybomb enterprise updates:

    - My last weekly column at Wonkblog went up a week ago. It's a review of Melissa Gira Grant's book Playing the Whore.

    - I wrote about the minimum wage twice at the New Republic. The first time was on the Silicon Valley wage fixing scandal, and what it says about how labor markets work. (it's a nontechnical introduction to "dynamic monopsony" theory, if you are familiar with that.)

    If you haven't read about the Silicon Valley scandal I highly recommend it. (I had assumed, falsely, that more people knew about it when I wrote my piece.) Mark Ames had the most comprehensive version when it broke; Josh Harkinson just did another piece on it. It's worth it just for the quotes you'll see from the digital Masters of the Universe.

    - I also wrote about the CBO report that just came out on the minimum wage at the New Republic too.

    - I also wrote a piece at Al-Jazeera America about what is at stake when liberals, including President Obama, replace a focus on inequality with a focus on opportunity.

    Follow or contact the Rortybomb blog:

      

    Recent Rortybomb enterprise updates:

    - My last weekly column at Wonkblog went up a week ago. It's a review of Melissa Gira Grant's book Playing the Whore.

    - I wrote about the minimum wage twice at the New Republic. The first time was on the Silicon Valley wage fixing scandal, and what it says about how labor markets work. (it's a nontechnical introduction to "dynamic monopsony" theory, if you are familiar with that.)

    If you haven't read about the Silicon Valley scandal I highly recommend it. (I had assumed, falsely, that more people knew about it when I wrote my piece.) Mark Ames had the most comprehensive version when it broke; Josh Harkinson just did another piece on it. It's worth it just for the quotes you'll see from the digital Masters of the Universe.

    - I also wrote about the CBO report that just came out on the minimum wage at the New Republic too.

    - I also wrote a piece at Al-Jazeera America about what is at stake when liberals, including President Obama, replace a focus on inequality with a focus on opportunity.

    Follow or contact the Rortybomb blog:

      

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  • The Politics of Children

    Feb 19, 2014Mike Konczal

    Not the politics of having children, but the politics of actual children. Long-winded, but three things.

    One. Katie Baker has written some of the best things I’ve read this month, but one thing stands out: Here to Make Friends. It’s about the difficulty reality show television producers have in making children compete against each other for prizes, as the kids naturally want to cooperate.

    “In the beginning, older Kid Nation contestants helped younger, weaker kids out and the dusty air was rife with auspicious anti-grownup sentiment … host Jonathan Karsh, a fully grown man, showed up halfway through the first episode and announced that the kids would be separated into a socioeconomic hierarchy … From then on, the kids were more interested in climbing the ranks of the pseudo-feudal class structure than subverting it.

    [Although the] MasterChef Junior … structure was ultimately every-kid-for-themselves, the contestants still found ways to support one another by giving each other hugs and high-fives, tearing up when their new friends lost, and celebrating their competitor’s victories.”

    It then goes into the Hunger Games. Definitely worth a read.

    Two. From New York Daily News, 4 and 5-year-olds are taking standardized math tests. “Teachers said kindergartners are bewildered. ‘Sharing is not caring anymore; developmentally, it’s not the right thing to do,’ said one Queens teacher, whose pupils kept trying to help one another on the math test she gave for the first time this fall.”

    Sarah Jaffe likes using this story as a good example of what people mean by neoliberalism subjectivity creation. There’s something awful in a teacher having to break up 5 year olds trying to help each other learn and overcome obstacles, saying that they can’t help other, but instead should be looking to compete and win.

    Three. In early 2006, I decided I was going to visit a variety of churches across Chicago, both to see the ceremonies and as an architecture tour. I grew up attending a Catholic Church with an aggressively modern design that shocked the Poles in Chicago’s Gage Park when it arrived, so I always had a fascination with church architecture.

    One stop I wanted to make was at First Unitarian Church of Chicago, in a gothic Hyde Park building. I checked their schedule and Melissa Harris-Lacewell was giving a talk on “The Ethics of Getting Away With It.” ("How can our diverse religious and humanist traditions help us to understnad why bad acts so often seem to bring prosperity and reward?") I had seen her give an interesting talk on public access when my DVR box recorded that instead of the normally scheduled Chic-a-go-go, and I was intrigued. (Harris-Lacewell is now Melissa Harris-Perry, of the weekend show on MSNBC. I debated trying to bring this story up during commercial when I was on that show, but thought better of it.)

    Before the ceremony, the children in the audience were given a bunch of pieces of wrapped candy and told that they could pass them out or do whatever they want with them. And the kids handed them so that each person in the church got some. They didn’t stockpile them, or only pass them out to their friends, but ensured that there was something for everyone. A basic distributional concern that society would eventually try to remove from them.

    Follow or contact the Rortybomb blog:

      

    Not the politics of having children, but the politics of actual children. Long-winded, but three things.

    One. Katie Baker has written some of the best things I’ve read this month, but one thing stands out: Here to Make Friends. It’s about the difficulty reality show television producers have in making children compete against each other for prizes, as the kids naturally want to cooperate.

    “In the beginning, older Kid Nation contestants helped younger, weaker kids out and the dusty air was rife with auspicious anti-grownup sentiment … host Jonathan Karsh, a fully grown man, showed up halfway through the first episode and announced that the kids would be separated into a socioeconomic hierarchy … From then on, the kids were more interested in climbing the ranks of the pseudo-feudal class structure than subverting it.

    [Although the] MasterChef Junior … structure was ultimately every-kid-for-themselves, the contestants still found ways to support one another by giving each other hugs and high-fives, tearing up when their new friends lost, and celebrating their competitor’s victories.”

    It then goes into the Hunger Games. Definitely worth a read.

    Two. From New York Daily News, 4 and 5-year-olds are taking standardized math tests. “Teachers said kindergartners are bewildered. ‘Sharing is not caring anymore; developmentally, it’s not the right thing to do,’ said one Queens teacher, whose pupils kept trying to help one another on the math test she gave for the first time this fall.”

    Sarah Jaffe likes using this story as a good example of what people mean by neoliberalism subjectivity creation. There’s something awful in a teacher having to break up 5 year olds trying to help each other learn and overcome obstacles, saying that they can’t help other, but instead should be looking to compete and win.

    Three. In early 2006, I decided I was going to visit a variety of churches across Chicago, both to see the ceremonies and as an architecture tour. I grew up attending a Catholic Church with an aggressively modern design that shocked the Poles in Chicago’s Gage Park when it arrived, so I always had a fascination with church architecture.

    One stop I wanted to make was at First Unitarian Church of Chicago, in a gothic Hyde Park building. I checked their schedule and Melissa Harris-Lacewell was giving a talk on “The Ethics of Getting Away With It.” ("How can our diverse religious and humanist traditions help us to understnad why bad acts so often seem to bring prosperity and reward?") I had seen her give an interesting talk on public access when my DVR box recorded that instead of the normally scheduled Chic-a-go-go, and I was intrigued. (Harris-Lacewell is now Melissa Harris-Perry, of the weekend show on MSNBC. I debated trying to bring this story up during commercial when I was on that show, but thought better of it.)

    Before the ceremony, the children in the audience were given a bunch of pieces of wrapped candy and told that they could pass them out or do whatever they want with them. And the kids handed them so that each person in the church got some. They didn’t stockpile them, or only pass them out to their friends, but ensured that there was something for everyone. A basic distributional concern that society would eventually try to remove from them.

    Follow or contact the Rortybomb blog:

      

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  • Conservatives Concerned About the CBO and the Dignity of Work Should Consider a Higher Minimum Wage

    Feb 13, 2014Mike Konczal

    It’s a shame that Ron Unz’s conservative case for a higher minimum wage gets caught up in the debate over immigration politics, because the arguments are broader and more fascinating, and incredibly important to have as part of the debate. This is especially true in light of last week’s CBO report, which has sent conservatives running to the barricades over the impact of Obamacare on waged work in this country. The conservative case for a minimum wage would address the two main concerns the right has displayed on this topic.

    Broadly speaking, as summarized by Josh Barro here, there are two separate elements of the conservative take on Obamacare and the CBO’s findings. The first is that it allows people to break “job lock” and leave the labor market. This means there are fewer people working, which concerns conservatives because, as Ross Douthat put it, paid wage labor is “essential to dignity, mobility and social equality,” and they “see its decline as something to be fiercely resisted.” [1]

    The second is that, because of the subsidies that are given to low-wage workers, these workers face a higher marginal tax rate. If there are subsidies for low-wage workers, as those workers make more money those subsidies are phased out. The fact that they are losing money while earning more money, or that a higher income means a smaller subsidy, functions like a tax. And this means that workers will work a bit less. Liberals in general don’t like this (though they do like that both effects will increase wages, as well they should), but understand it is going to be part of any type of means-tested income support.

    Where does the minimum wage come in?

    To address the first complaint, it’s important to keep in mind that the “dignity of work” isn’t a static concept, but tied directly to the conditions of work itself. If you ask the people striking against their low-wage job right now, you’ll find that things like working unpaid hours or erratic scheduling are also part of their complaints. As a result of these conditions, the work is socially tagged as undignified, degrading, erratic, and unpredictable. [2]

    So driving the wages straight up can help counteract this. As Ron Unz writes, “consider the impact of a sharp rise in the minimum wage, sufficient to remove the taint of poverty overhanging so many of our lower-tier jobs.” This would, in turn, make lower-tier service jobs more attractive from a social perspective, increasing the level of dignity for those who hold them. This would in turn make people much more likely to seek out and hold said jobs. As I’ve argued elsewhere, by reducing vacancies, encouraging job searches and tightening the low-wage labor market, a higher minimum wage would also de facto give low-wage workers more power in the workplace, which would help reduce the petty tyrannies that come with low-wage work.

    The second issue comes from effective marginal tax rates, or the burden low-wage workers face as income support is phased out. And the common bipartisan alternative to the minimum wage, increasing the earned-income tax credit (EITC), doubles down on this. There are ways to manage it and make the effective tax rate have less of a bite. But it’s essential to the DNA of means-tested income support that it’ll eventually phase out, and as a result impose some higher marginal tax rate. Conservatives who support a higher earned-income tax credit play into this as well.

    The minimum wage, however, poses no such higher effective tax rate. If you work more hours at the minimum wage, there’s no effective tax because the minimum wage doesn't phase out. So if the slight effect of higher effective tax rates of Obamacare is driving you up the wall, perhaps now is a good time to consider this positive side of the minimum wage.

    Additional:

    I’ve seen many people point out that there’s an administrative simplicity and cost-effectiveness to the minimum wage over the EITC, amplifying the case for them to act as complements to each other instead of substitutes. But I had no idea that, according to the IRS and Treasury, the EITC’s improper payment rate is between 21 and 25 percent. This includes overpayments as well as underpayments.

    That simply doesn’t happen with the minimum wage. And if you are a conservative who wants to “simplify” government, or if bringing the impact of government as close as possible to those who need help - say directly in the workplace rather than in the complicated and confusing tax code administered by a faraway IRS - is important to your subsidiarity view of policy, a bigger role for the minimum wage is essential.

    [1] This will sound snarky, but I genuinely mean it: I want to see a conservative take on Nickel and Dimed, where maids cleaning bathrooms experience “social equality” with the people paying them.

    [2] Remember that Dave Chappelle comedy skit about the person who gets a fast food job to impress his community, and finds that it isn’t quite as dignified as he thought?

    Follow or contact the Rortybomb blog:

      

    It’s a shame that Ron Unz’s conservative case for a higher minimum wage gets caught up in the debate over immigration politics, because the arguments are broader and more fascinating, and incredibly important to have as part of the debate. This is especially true in light of last week’s CBO report, which has sent conservatives running to the barricades over the impact of Obamacare on waged work in this country. The conservative case for a minimum wage would address the two main concerns the right has displayed on this topic.

    Broadly speaking, as summarized by Josh Barro here, there are two separate elements of the conservative take on Obamacare and the CBO’s findings. The first is that it allows people to break “job lock” and leave the labor market. This means there are fewer people working, which concerns conservatives because, as Ross Douthat put it, paid wage labor is “essential to dignity, mobility and social equality,” and they “see its decline as something to be fiercely resisted.” [1]

    The second is that, because of the subsidies that are given to low-wage workers, these workers face a higher marginal tax rate. If there are subsidies for low-wage workers, as those workers make more money those subsidies are phased out. The fact that they are losing money while earning more money, or that a higher income means a smaller subsidy, functions like a tax. And this means that workers will work a bit less. Liberals in general don’t like this (though they do like that both effects will increase wages, as well they should), but understand it is going to be part of any type of means-tested income support.

    Where does the minimum wage come in?

    To address the first complaint, it’s important to keep in mind that the “dignity of work” isn’t a static concept, but tied directly to the conditions of work itself. If you ask the people striking against their low-wage job right now, you’ll find that things like working unpaid hours or erratic scheduling are also part of their complaints. As a result of these conditions, the work is socially tagged as undignified, degrading, erratic, and unpredictable. [2]

    So driving the wages straight up can help counteract this. As Ron Unz writes, “consider the impact of a sharp rise in the minimum wage, sufficient to remove the taint of poverty overhanging so many of our lower-tier jobs.” This would, in turn, make lower-tier service jobs more attractive from a social perspective, increasing the level of dignity for those who hold them. This would in turn make people much more likely to seek out and hold said jobs. As I’ve argued elsewhere, by reducing vacancies, encouraging job searches and tightening the low-wage labor market, a higher minimum wage would also de facto give low-wage workers more power in the workplace, which would help reduce the petty tyrannies that come with low-wage work.

    The second issue comes from effective marginal tax rates, or the burden low-wage workers face as income support is phased out. And the common bipartisan alternative to the minimum wage, increasing the earned-income tax credit (EITC), doubles down on this. There are ways to manage it and make the effective tax rate have less of a bite. But it’s essential to the DNA of means-tested income support that it’ll eventually phase out, and as a result impose some higher marginal tax rate. Conservatives who support a higher earned-income tax credit play into this as well.

    The minimum wage, however, poses no such higher effective tax rate. If you work more hours at the minimum wage, there’s no effective tax because the minimum wage doesn't phase out. So if the slight effect of higher effective tax rates of Obamacare is driving you up the wall, perhaps now is a good time to consider this positive side of the minimum wage.

    Additional:

    I’ve seen many people point out that there’s an administrative simplicity and cost-effectiveness to the minimum wage over the EITC, amplifying the case for them to act as complements to each other instead of substitutes. But I had no idea that, according to the IRS and Treasury, the EITC’s improper payment rate is between 21 and 25 percent. This includes overpayments as well as underpayments.

    That simply doesn’t happen with the minimum wage. And if you are a conservative who wants to “simplify” government, or if bringing the impact of government as close as possible to those who need help - say directly in the workplace rather than in the complicated and confusing tax code administered by a faraway IRS - is important to your subsidiarity view of policy, a bigger role for the minimum wage is essential.

    [1] This will sound snarky, but I genuinely mean it: I want to see a conservative take on Nickel and Dimed, where maids cleaning bathrooms experience “social equality” with the people paying them.

    [2] Remember that Dave Chappelle comedy skit about the person who gets a fast food job to impress his community, and finds that it isn’t quite as dignified as he thought?

    Follow or contact the Rortybomb blog:

      

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  • The Three Big Questions Janet Yellen Should Answer in Today's Testimony

    Feb 11, 2014Mike Konczal

    Janet Yellen has her first Humphrey-Hawkins testimony today, where she’ll give a prepared speech, already released online, and testify before the Republican-controlled House Financial Services committee. What are the points that she’ll need to cover?

    The first element is how and when she’ll manage the so-called “taper” of monetary policy. At the end of 2012, the Federal Reserve started an extensive program of monetary stimulus designed to boost the economy. They declared that this would stay in full effect until unemployment dropped to 6.5 percent.

    We are close to hitting that threshold. The unemployment rate is at 6.6 percent, and will fall below 6.5 percent very soon. Yellen, in her testimony, emphasizes a broader picture of unemployment than just the headline rate, including the amount of people working part-time against their choice and the amount of long-term unemployed.

    What’s even more interesting, and a bit new, is her statement that “it likely will be appropriate to maintain the current target range for the federal funds rate well past the time that the unemployment rate declines below 6-1/2 percent, especially if projected inflation continues to run below the 2 percent goal.”

    Hopefully Congress will ask her to consider these choices in light of the last two weak job reports. Isn’t it more appropriate to step on the gas rather than test the brakes? However, she’ll likely encounter a skeptical Congress, and as such it will be essential for Yellen to make the case that the weak job numbers, combined with the vagueness of what the headline unemployment rate is telling us, requires continued monetary action.

    The second point is how she'll handle financial reform. Given that Yellen is considered a monetary dove, it’s been interesting to see the amount of questions she’s taken from Congress about where Dodd-Frank and other reforms stand. This will no doubt continue into this testimony.

    Financial reform has hit an interesting point where much of the rule-writing from the Dodd-Frank Act is finished, and now there’s a transition to both enforcement and clean-up action. Yellen notes in her testimony that rules related to derivatives as well as capital requirements still remain in the works. It would be useful for Congress to ask her where she thinks capital requirements for the largest firms should ultimately end up. Does she think that this number is too high, or too low?

    It would also be fascinating for someone to ask Yellen about the recent wave of “postal banking” coverage, and the role the government can play in providing essential banking services to unbanked and underbanked Americans.

    The third and most important is how the Federal Reserve will transition to prevent periods of mass unemployment like we are currently experiencing. Is a 2 percent inflation target either high enough, or the right target, for the job?

    Sadly, this will be the topic least covered of them all. However, it’s the one that is most essential for preventing the economy from falling back into the situation it now finds itself in.

    Mike Konczal is a Fellow at the Roosevelt Institute.

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    Image via Federal Reserve

    Janet Yellen has her first Humphrey-Hawkins testimony today, where she’ll give a prepared speech, already released online, and testify before the Republican-controlled House Financial Services committee. What are the points that she’ll need to cover?

    The first element is how and when she’ll manage the so-called “taper” of monetary policy. At the end of 2012, the Federal Reserve started an extensive program of monetary stimulus designed to boost the economy. They declared that this would stay in full effect until unemployment dropped to 6.5 percent.

    We are close to hitting that threshold. The unemployment rate is at 6.6 percent, and will fall below 6.5 percent very soon. Yellen, in her testimony, emphasizes a broader picture of unemployment than just the headline rate, including the amount of people working part-time against their choice and the amount of long-term unemployed.

    What’s even more interesting, and a bit new, is her statement that “it likely will be appropriate to maintain the current target range for the federal funds rate well past the time that the unemployment rate declines below 6-1/2 percent, especially if projected inflation continues to run below the 2 percent goal.”

    Hopefully Congress will ask her to consider these choices in light of the last two weak job reports. Isn’t it more appropriate to step on the gas rather than test the brakes? However, she’ll likely encounter a skeptical Congress, and as such it will be essential for Yellen to make the case that the weak job numbers, combined with the vagueness of what the headline unemployment rate is telling us, requires continued monetary action.

    The second point is how she'll handle financial reform. Given that Yellen is considered a monetary dove, it’s been interesting to see the amount of questions she’s taken from Congress about where Dodd-Frank and other reforms stand. This will no doubt continue into this testimony.

    Financial reform has hit an interesting point where much of the rule-writing from the Dodd-Frank Act is finished, and now there’s a transition to both enforcement and clean-up action. Yellen notes in her testimony that rules related to derivatives as well as capital requirements still remain in the works. It would be useful for Congress to ask her where she thinks capital requirements for the largest firms should ultimately end up. Does she think that this number is too high, or too low?

    It would also be fascinating for someone to ask Yellen about the recent wave of “postal banking” coverage, and the role the government can play in providing essential banking services to unbanked and underbanked Americans.

    The third and most important is how the Federal Reserve will transition to prevent periods of mass unemployment like we are currently experiencing. Is a 2 percent inflation target either high enough, or the right target, for the job?

    Sadly, this will be the topic least covered of them all. However, it’s the one that is most essential for preventing the economy from falling back into the situation it now finds itself in.

    Mike Konczal is a Fellow at the Roosevelt Institute.

    Follow or contact the Rortybomb blog:

      
     
    Image via Federal Reserve

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