Roosevelt Reacts: NLRB Holds McDonald's Accountable for Labor Violations

Jul 30, 2014
Yesterday, the general counsel of the National Labor Relations Board ruled that McDonald's is a joint employer for the workers at its franchises, meaning that the corporation could be held liable for any labor and wage violations that occur at its individual restaurants.

The decision, says Roosevelt Institute President and CEO Felicia Wong...

Yesterday, the general counsel of the National Labor Relations Board ruled that McDonald's is a joint employer for the workers at its franchises, meaning that the corporation could be held liable for any labor and wage violations that occur at its individual restaurants.

The decision, says Roosevelt Institute President and CEO Felicia Wong, "rightly recognizes that, in today's changing and more fragmented workplace, workers still need the support and protections afforded by the law. Fast food workers are fighting for a wage that will allow them to care for their families and act as strong community members. This is an essential foundation for economic growth that benefits us all."

Adds Roosevelt Institute Senior Fellow Richard Kirsch, "The common sense ruling that McDonald's is as much one company in the way it treats its workers as it is when it makes a Big Mac is a major step toward holding the biggest corporations in the country accountable for creating jobs that boost the economy instead of busting it."

Read more about what the Future of Work Initiative is doing to promote policies that empower American workers and secure prosperity for all.

Image via Shutterstock

Share This

Frank Levy: Through Innovation, People Will Live Longer and Earn Less

Jul 30, 2014

The Next American Economy project brought together 30 experts from various disciplines to envision tomorrow's economic and political challenges and develop today's solutions. Their assignment: be bold, and leave the conventional wisdom -- and their own opinions -- behind. In today's video, economist Frank Levy foretells tech and health care trends resulting in longer lifespans and lower earning potential.

The Next American Economy project brought together 30 experts from various disciplines to envision tomorrow's economic and political challenges and develop today's solutions. Their assignment: be bold, and leave the conventional wisdom -- and their own opinions -- behind. In today's video, economist Frank Levy foretells tech and health care trends resulting in longer lifespans and lower earning potential.

MIT professor Frank Levy speculates that in the next 25 years, health innovation will improve life spans while tech innovation reduces earning potential for many Americans, resulting in longer lives but no additional income. Add in the increasingly destructive consequences of climate change, and the middle class dream will become further and further out of reach. Triggered by resentment and fear, a new anti-technology movement will rise up with a bumper sticker slogan: "Another Luddite for Jobs."

Share This

Daily Digest - July 28: Work Shouldn't Be a Threat to Working Families

Jul 28, 2014Rachel Goldfarb

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

Poor Parents Need Work-Life Balance Too (The Nation)

Michelle Chen says that without the flexibility of scheduling offered by white-collar jobs, workers in the service industries face volatile schedules that disrupt family lives.

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

Poor Parents Need Work-Life Balance Too (The Nation)

Michelle Chen says that without the flexibility of scheduling offered by white-collar jobs, workers in the service industries face volatile schedules that disrupt family lives.

Fast-Food Workers Intensify Fight for $15 an Hour (NYT)

At the largest convention of fast-food workers, Steven Greenhouse reports that workers approved escalated tactics, drawing on the nonviolent civil disobedience of the Civil Rights Movement.

Close the Tax Loophole on Inversions (WaPo)

Treasury Secretary Jacob J. Lew explains the need for immediate action to reform the tax code to limit companies' ability to avoid taxes by merging with foreign companies.

Fed’s Targeting of Asset Bubbles Leads to Contradictions (AJAM)

Bubbles might be necessary to obtain full employment, writes Philip Pilkington, but limiting bubbles is among the Federal Reserve's goals. Higher deficits or lower inequality could help.

New on Next New Deal

Two Tiers of College Tuition? Not on This Campus

Mohanned Abdelhameed, Vice President of the San Bernardino Valley Community College chapter of the Campus Network, explains why students rejected two-tiered tuition pricing models.

Inequality Could Spark a Second Civil War

In his speculation for the Next American Economy initiative, Roosevelt Institute Fellow Dorian Warren imagines a future in which national cohesion has disintegrated and a one-party civil oligarchy has taken control.

Quick Thoughts on Ryan's Poverty Plan: What Are the Risks?

Roosevelt Institute Fellow Mike Konczal says that Paul Ryan's wholesale adoption of the President's plan for the Earned Income Tax Credit shows the value of pushing further to the left.

Share This

Two Tiers of College Tuition? Not on This Campus

Jul 28, 2014Mohanned Abdelhameed

A two-tiered pricing system would create dramatic inequality of access to a college education.

A college education is believed to help those that sacrifice and pursue their education achieve a better life. However, the graduating class of 2014 is the most indebted class in history. Students will graduate this year owing an average of $33,000 for their hard earned education. This problem grows worse as students currently face rising levels of tuition at all institutions.

A two-tiered pricing system would create dramatic inequality of access to a college education.

A college education is believed to help those that sacrifice and pursue their education achieve a better life. However, the graduating class of 2014 is the most indebted class in history. Students will graduate this year owing an average of $33,000 for their hard earned education. This problem grows worse as students currently face rising levels of tuition at all institutions.

My school, San Bernardino Valley Community College, looked at a different type of tuition increase by volunteering as one of five colleges to pilot a two-tiered pricing system, which effectively gives an advantage to higher income students. Assembly Bill AB955 set up a pilot program of five schools to offer classes at higher prices during intermissions from the standard academic schedule, making students who want to finish school faster pay more out of pocket for their degree. Assembly Member Das Williams, who proposed the bill, argued in The Daily Californian that “at the start of the fall 2012 semester, more than 500,000 students were left on waiting lists and effectively turned away at community colleges throughout the state due to lack of availability.” If the pilot is successful, then the program will open to all colleges state wide.

My school volunteered to participate in this pilot, because following the 2008 recession, budget cuts had forced the school to cut many classes. The administration needed a way to accommodate students that couldn’t get classes they needed in order to transfer or graduate. Many administrators were for the program because they believed they could make more space by offering classes in summer and winter sessions to students that would have to pay up to 300 percent more per unit. For instance, our normal tuition is $46 a unit, but in order to take the classes offered by this program students would have to pay an additional $230 non-resident tuition fee and a $19 capital outlay fee, totaling $295 per unit. Since most classes are three units, a class under this pricing model would cost $885 as opposed to the usual price of $138.

Many students were opposed to this legislation. A student protest staged on November 14, 2013 at a meeting of the San Bernardino Community College District Board paused the offering of such a two-tiered pricing scheme for this summer, and the future of the program will be decided at a later date. A huge group of students spoke out against our school's participation by organizing and using our voices to tell our college board we wouldn’t allow our school to be privatized. There was no evidence for the assemblyman's conclusions. He claimed students would prefer the opportunity to finish faster at a higher cost, as opposed to waiting and using needed financial aid to finish their classes. There are almost 15,000 students attending San Bernardino Valley Community College, and 67 percent of the student body receives financial assistance. It is unlikely that students will be willing or able to pay out of pocket for their education, when these higher-priced classes aren't covered by financial aid.

Students also opposed the bill because the argument that students could transfer out faster was untrue. Under the usual model of one low tuition rate for all units, many students take classes year round. With the two-tier pricing model, students that can’t afford to pay the grossly inflated price of units in winter and summer would be limited to classes in fall and spring, essentially making poorer students stay at a community college longer than their wealthier peers. Students were also concerned about how students paying full-price for these more expensive units would affect financial aid. There were also concerns that when policy makers saw students paying the higher prices, financial assistance given to other students would be at risk of defunding, ending access for those less fortunate.

Access to college is meant to be a vehicle to success for those willing to work hard for it. This program would be asking students that have very little to pay more for school in the long run. Students' passion against this new law can be a great benefit for implementing change. There is always a beginning of a movement but what actually makes it a movement is the consistency to keep coming back and addressing the issues. The students at my school understand that the effort they showed can be a force. We can have a bright future by fighting for future students, who deserve the same chance those before us received. It would be a shame to stand idly by while students lose their opportunity for an education and a better life.

Mohanned Abdelhameed is the Vice President of the Roosevelt Institute | Campus Network chapter at San Bernardino Valley Community College, where he is studying political economics.

Photo by Amerique via Creative Commons license.

Share This

Dorian Warren: Inequality Could Spark a Second Civil War

Jul 28, 2014

The Next American Economy project brought together 30 experts from various disciplines to envision tomorrow's economic and political challenges and develop today's solutions. Their assignment: be bold, and leave the conventional wisdom -- and their own opinions -- behind. In today's video, Roosevelt Institute Fellow Dorian Warren speculates on the political fallout of growing inequality over the next 20 years.

The Next American Economy project brought together 30 experts from various disciplines to envision tomorrow's economic and political challenges and develop today's solutions. Their assignment: be bold, and leave the conventional wisdom -- and their own opinions -- behind. In today's video, Roosevelt Institute Fellow Dorian Warren speculates on the political fallout of growing inequality over the next 20 years.

In his introductory post for the Next American Economy speculations series, Roosevelt Institute Senior Fellow Bo Cutter noted that nearly half the participants at our recent convening believed that "if inequality trends continue, the political backlash will be so extreme that our current system will change drastically in the next 25 years." In the video below, Roosevelt Institute Fellow Dorian Warren takes that concept and runs with it, envisioning a scenario in which national cohesion deteriorates as the country becomes increasingly divided between elite enclaves and a decimated hinterland. The consequences: a 20 percent incarceration rate, all-out civil war, and the end of democracy.

In his tragicomic scenario, he says, "Because politics was so hopeless, liberal democracy was a historical artifact. Since we transitioned to a civil oligarchy under one-party rule, many colleges and universities replaced political science departments with departments of molecular gastronomy."

Share This

Quick Thoughts on Ryan's Poverty Plan: What Are the Risks?

Jul 25, 2014Mike Konczal

Paul Ryan released his anti-poverty plan yesterday, and lots of people have written about it. Bob Greenstein has a great overview of the block-granting portion of the plan.

Paul Ryan released his anti-poverty plan yesterday, and lots of people have written about it. Bob Greenstein has a great overview of the block-granting portion of the plan. I'm still reading and thinking about it, but in the interest of answering the call for constructive criticism, a few points jump out that I haven't seen others make yet.

How did we get here?

Republicans obviously have an interest in branding themselves as a "party of ideas." And many liberals and Democrats also have an interest in trying to make the GOP seem like it's been devoid of any ideas in the past several years.

But it's worth noting that within a year of Democrats and liberal thinkers getting actively behind a serious increase in the minimum wage, and many activists making strides toward it on the local level, Paul Ryan just wholesale adopted President Obama's EITC expansion program. That demonstrates the value of pushing the envelope.

Complexity and the EITC

Ryan's plan, correctly, makes a big deal out of the complexity of receiving the EITC. The difficulty of navigating the system, the large number of improper payments, people not receiving what they should, people having to use tax-prep services to get the credit, and so on.

This is why I'm a huge fan of higher minimum wages as a complement to the EITC. Instead of 40 pages of rules and a dozen potential forms to fill out, you just put a sign that reads "$10.10 an hour" on the wall. Bosses and workers can't trick each other or get confused about this, and nobody has to pay a tax-prep service to figure it out. Easy peasy.

Ryan wants to "direct the Treasury Department to investigate further" how to fix this, but in practice Treasury just turns around and yells at the IRS. And if the IRS knew how to fix it, they'd probably be on it.

There is also a simpler plan to fix this issue: just have the government mail people their tax forms already filled out, for them to either sign or correct. When a trial version of this, "Ready Return," was tried in California, people immediately saw the potential for this to fix EITC delivery issues. Perhaps anti-poverty advocates can help provide momentum on this front.

Bosses and the EITC

Both Ryan and Marco Rubio have referred to putting the ETIC credit directly into workers' paychecks. Ryan: "[A]nother potential area of reform should focus upon EITC simplicity and delivery. If families received the credit with their paychecks, the link between work and the EITC would be that much clearer."

I'd be worried if employers were the ones responsible for adding this wage subsidy. I don't think there's a convincing argument that the EITC or food stamps lower wages directly (though there is one indirectly for the EITC), but if employers got a wage subsidy themselves to pass to their workers, it's easy to imagine them pocketing part of it through lower wages, especially in the monopsony of low-wage labor markets.

A discussion of welfare reform

Rather than a "welfare reform -- yay or nay?" conversation, it would be really useful if people arguing for the block-granting of the entire anti-poverty agenda would point out what they do and do not like about what happened in the 1990s. Especially as proponents hold up welfare reform as the model.

As Matt Bruenig notes, the work requirements and other restrictions go against the concept of subsidiarity. Greenstein writes, "the block grant would afford state and local officials tantalizing opportunities to use some block grant funds to replace state and local funds now going for similar services...That’s what happened under the Temporary Assistance for Needy Families (TANF) block grant." In retrospect, TANF didn't survive the business cycle, and it clearly has cut spending by cutting the rolls. Is that what people want to accomplish with food stamps, which have done wonders to boost childhood life outcomes? If not, what can be done other than assert that this time will be different?

Follow or contact the Rortybomb blog:

  

Share This

White House Summit Speakers: Look Beyond Congress for Action on Working Families

Jul 24, 2014Julius Goldberg-Lewis

The White House Summit on Working Families showed paths to creating change that work around a gridlocked Congress.

The White House Summit on Working Families showed paths to creating change that work around a gridlocked Congress.

On Monday, June 23, Roosevelt Institute Fellows and Campus Network members attended the White House Summit on Working Families in Washington, DC. The Summit, which was the culmination of months of town halls across the United States, presented the audience with the stark reality that in order to truly help working families, there must be a dramatic culture shift. The day was filled with speakers like the President, the Vice President, and both their wives, and the CEOs of multibillion-dollar companies and startups alike, all of whom shared anecdotes about their experiences as the breadwinners of working families.

The focus of the conference was the need to change the outdated laws and culture that govern the modern-day workforce. Today, women make up 47% of the labor force, and 60% of children grow up in a family where both parents work. The status quo, however, leaves most Americans without access to any form of guaranteed leave, and even fewer with basic necessities such as paid maternity leave. Everyone has endured challenges finding a work/life balance, and as Vice President Biden explained in his own experience, not all employers are as forgiving as the people of Delaware when one needs to miss work to take care of a child. He pointed out that in his first years in the Senate he had the lowest attendance rate — but that his constituents gave him a chance. The summit challenged its participants to bring that kind of culture of flexibility and empathy to the workplace.

The Summit illuminated the two mutually reinforcing paths that are necessary to ensure that working families have the ability to support themselves and care for their children and elderly parents. On a policy front, there is already the Family and Medical Leave Act, which stands as one of the few policy solutions in place to alleviate the burden on working families. However, this only covers 60% of workers and only guarantees unpaid leave, which is often an unworkable option for families that rely on a daily wage. The United States is alone among OECD countries in that we do not guarantee paid parental leave. Paid leave is necessary not only to soften the financial burden associated with having children, but also, as was repeated throughout breakout groups and panels, because parents who take maternity/paternity leave are far more likely to reenter the workforce than those who don’t. There also need to be long-term policy solutions that will ensure that a working family can earn a living wage. The Summit reiterated the push for a $10.10 minimum wage, and invited several business owners who pay a living wage and provide paid leave to share their success stories.

Legislative change is not the only means of tackling this issue, and the Summit pointed out that as long as Congress remains gridlocked, it is up to businesses to implement higher wages and better leave policies on their own. Change at the business level requires that companies change both their explicit policies and their workplace cultures. Both in multinational companies and small businesses, it’s just as important for managers to offer paid leave as it is for them to take it themselves. While many workers in the US do, in fact, have access to some form of leave, workers often do not take full advantage of these benefits because of stigma or because no one else in the office uses all of their leave. The private sector must lead by proving that businesses can provide paid leave without hurting their bottom line (and sometimes even helping it), and by ensuring that people feel comfortable using that leave.

Working families in the United States face numerous challenges, from providing care to their families when they need it to having the resources to do so, but if there was one message that was repeated throughout the Summit it was that there is a tremendous amount of energy to work with. On the legislative front, vast majorities of voters support a higher minimum wage and family leave. While Congress has not taken up the call to action, cities like New York and Seattle have taken it upon themselves to raise wages and ensure time off. The energy around this issue must be channeled in every way possible: by pressuring elected officials to pass laws, by encouraging business to raise their wages, and by fostering a culture where everyone feels comfortable putting their family first. 

Julius Goldberg-Lewis is the Roosevelt Institute | Campus Network Regional Coordinator for the Midwest and a Summer Academy Fellow in Washington, DC.

Photo by Pete Souza.

Share This

David Autor: Why Technological Innovation Could Increase Inequality

Jul 21, 2014

The Next American Economy project brought together 30 experts from various disciplines to envision tomorrow's economic and political challenges and develop today's solutions. Their assignment: be bold, and leave the conventional wisdom -- and their own opinions -- behind.

The Next American Economy project brought together 30 experts from various disciplines to envision tomorrow's economic and political challenges and develop today's solutions. Their assignment: be bold, and leave the conventional wisdom -- and their own opinions -- behind. Their goal: not to provide a researched analysis, but to stimulate debate on critical questions.In the debut entry in our new video speculation series, MIT economist David Autor talks about the future of economic polarization.

There is a long-running debate between those who worry robots are taking our jobs and those who scoff at that “lump of labor fallacy” as just another version of Luddite thinking. In the video below, Professor David Autor, the MIT economist famous for his description of how technology has helped hollow out the middle class, outlines the debate and describes how it might be possible that both sides are right.

Professor Autor discusses a scenario in which technological innovation continues to reduce the need for low-skilled labor while increasing the demand for higher-skilled workers, thus increasing wages at the top while reducing wages at the bottom.

Share This

Daily Digest - July 15: Privatization Gets Marked 'Return to Sender'

Jul 15, 2014Rachel Goldfarb

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

Staples, Postal Service to End Plan for Mini Post Offices in Stores (WSJ)

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

Staples, Postal Service to End Plan for Mini Post Offices in Stores (WSJ)

Kris Maher, Drew Fitzgerald, and Tom Gara report on the decision to end this pilot program, which the postal workers' union and other labor groups had denounced as privatization.

  • Roosevelt Take: Roosevelt Institute Senior Fellow Richard Kirsch explains how the Postal Service and Staples plan was exacerbating the low-wage economy.

Another Week, Another Settlement (The Economist)

The Economist examines the controversy over Citigroup's $7 billion settlement announced yesterday, which continues the trend of placing blame on companies instead of individuals.

Equal Opportunity Employment Officials Take New Aim at Pregnancy Bias (NYT)

Due to an increase in pregnancy discrimination complaints, the Equal Employment Opportunity Commission has issued new enforcement guidelines, reports Steven Greenhouse.

Restaurant CEOs Make More Money in Half a Day Than Their Employees Make in a Year (MoJo)

Jaeah Lee reports on a new analysis of top restaurant CEO pay, which shows that the CEOs take home an average of 721 times the amount that minimum wage workers are paid.

When You're Poor, Money Is Expensive (The Atlantic)

Derek Thompson explains why accessing money becomes more difficult without bank accounts and credit, and says the financial tech sector could make things easier for the poor.

Labor Organizing Is a Civil Right (Blog of the Century)

The National Labor Relations Act provides only negligible penalties for firing labor organizers, so Imhotep Royster suggests extending Civil Rights Act protections to those organizers.

New on Next New Deal

In Defense of Public Service: Roosevelt Honors Commitment to Common Good

Roosevelt Institute Communications Manager Tim Price reflects on the vindication felt by the life-long public servants honored at last week's Distinguished Public Service Awards.

Share This

Where Does $2 Trillion in Subsidies for the Wealthiest Hide in Plain Sight? Capital Gains Tax Breaks.

Jul 6, 2014Harry Stein

Research shows that government subsidies for the 1 percent are creating greater inequality. A new white paper by Roosevelt Institute Chief Economist Joseph Stiglitz offers solutions.

Research shows that government subsidies for the 1 percent are creating greater inequality. A new white paper by Roosevelt Institute Chief Economist Joseph Stiglitz offers solutions.

“What’s the effective rate I’ve been paying? It’s probably closer to the 15 percent rate than anything.” Mitt Romney made national news with that statement during the 2012 presidential election, since it meant he paid a lower effective tax rate than many middle-class Americans. The simple reason for his low tax bill?  The tax code’s special treatment of investment income.

In a recent report published by the Center for American Progress, I examine how government subsidies for investment income are making economic inequality worse. The merits of subsidizing investment income are particularly questionable in light of new research published by renowned French economist Thomas Piketty in Capital in the Twenty-First Century. Piketty finds that economic inequality has increased dramatically in recent decades, and will get even worse as the rate of return on capital from investments largely owned by the wealthy exceeds the overall growth rate of the economy.

Nobel-winning economist Joseph Stiglitz, Chief Economist at the Roosevelt Institute, takes a hard look at subsidies for investment income in a new white paper on tax reform. Stiglitz advocates taxing capital gains and dividends at the same rates as ordinary income. Under current law, the federal government will deliver an estimated $1.34 trillion in subsidies to investors over the next 10 years in the form of reduced tax rates for capital gains and dividends. Sixty-eight percent of that money will go to the top 1 percent. Stiglitz argues that there is “no justification for taxing those who work hard to earn a living at a higher rate than those who derive their income from speculation.”

Stiglitz would also eliminate an expensive, but little-known, provision called “step-up in basis,” which subsidizes inherited wealth. By taking a step-up in basis, heirs selling inherited assets only have to pay taxes on the capital gain that took place since they received the asset – gains that accrued during the previous owner’s lifetime are never subject to income taxes. This tax break will cost about $644 billion over 10 years, with 21 percent of that subsidy going to the top 1 percent. For the wealthiest families, the benefits are staggering: 55 percent of the wealth in estates worth over $100 million is in the form of unrealized capital gains, meaning that these families will never pay income taxes on the majority of their earnings since the heirs will benefit from step-up in basis.

Defenders of tax breaks for investment income argue that these subsidies encourage savings and grow the economy, but over the past 60 years there has been no obvious relationship between economic growth and the top capital gains tax rate. Our economic problems are rooted in a lack of aggregate demand, but tax subsidies for investment income reduce demand even further for two reasons. First, they encourage investors to hold onto their wealth and consume less. Second, these subsidies increase economic inequality by primarily benefiting the rich, who tend to consume a much smaller share of their income than poor or middle-class individuals.

The assumption underlying subsidies for investment income is that wealthy investors are “job creators,” but Stiglitz points out that “much of the income of the top arises from rent seeking (wealth appropriation) – and thus impedes growth and efficiency.” Stiglitz is using the term “rent seeking” in a broad sense to mean income from ownership, monopolies, or special treatment from the government. Rent seeking does not grow the economy; it only redistributes wealth from within the economy to rent seekers. For example, landowners get their income from rents paid by tenants. Stiglitz points out that land is an ideal target for taxation, since taxes cannot possibly reduce the supply of land. Yet the United States is taking the opposite approach by allowing landowners to fully benefit from step-up in basis and reduced tax rates for capital gains.

Tax breaks for investment income are massive in scope, but often overlooked in discussions about the proper size and role of the federal government. These subsidies are part of what Suzanne Mettler calls the “submerged state,” government programs that deliver benefits indirectly, with recipients often not even recognizing that they are benefitting from public assistance.

But government programs administered through the tax code are still government programs. It makes no meaningful difference to the government or to beneficiaries whether a subsidy is delivered in the form of a check from the government, or as a reduction in taxes the beneficiary would otherwise owe (which often takes the form of a higher tax refund check from the government). The nonpartisan Joint Committee on Taxation explains that tax breaks “are similar to direct spending programs that function as entitlements to those who meet the established statutory criteria.”

The reaction Mitt Romney’s comments may be the best example of just how invisible government subsidies for investment income are for most Americans. Watching Romney deliver the full statement and explain that most of his income comes from investments, it was clear that he did not think he was making news. And he was right – Romney’s statement that day should not have been news. We already knew that he made most of his money from earlier investments, and the tax rate at the time on capital gains and dividends was 15 percent. The only reason Romney’s statement made headlines was that most Americans were either unaware of preferential tax rates for investment income, or did not realize the staggering benefits this subsidy delivers to extremely wealthy individuals.

It is no coincidence that government subsidies for investment income are delivered through the submerged state. These programs are not popular when the American people can clearly see their impact, and they add to the sense that the economic game is rigged for those at the top.

Harry Stein is the Associate Director for Fiscal Policy at the Center for American Progress. Follow him on Twitter @HarrySteinDC.

Image via Thinkstock

Share This

Pages