Daily Digest - October 14: Americans Are Too Vulnerable to Downward Mobility

Oct 14, 2014Rachel Goldfarb

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The Age of Vulnerability (Project Syndicate)

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The Age of Vulnerability (Project Syndicate)

Roosevelt Institute Chief Economist Joseph Stiglitz points out that inequality isn't just about lack of upward mobility, but also risk of downward mobility, and the U.S. economy has made people particularly vulnerable.

The Score: Does the Minimum Wage Kill Jobs? (The Nation)

Roosevelt Institute Fellow Mike Konczal and Bryce Covert say the answer is probably no; for one, the states that have raised their minimum wage this year are experiencing higher employment growth.

In Texas and Across the Nation, Abortion Access is a Sign of Women's Well-Being (The Hill)

Roosevelt Institute Fellow Andrea Flynn and Shulie Eisen connect access to abortion with the larger picture of women's health and economics. States that limit abortion don't do well on related issues either.

Youth Convention Gathers Crowds, Pols Over Brutality, Employment, Immigration, Ed and Transport (The Youth Project)

Jason Mast reports on the NextGen Illinois conference, profiling a few of the student organizers who are pursuing political change in their state now instead of waiting until they're older.

Revenge of the Unforgiven (NYT)

Paul Krugman says an excess of virtue surrounding debt is killing economic growth. Forgiving more debt would increase the other spending needed to kick-start the economy.

Them That's Got Shall Get (TAP)

Nathalie Baptiste follows up on the impact of the foreclosure crisis on black family wealth, focusing on the wealthiest black community in the country: Prince George's County, Maryland.

‘Citizens United’ is Turning More Americans into Bystanders (WaPo)

E.J. Dionne argues that massive independent political spending is turning voters off, as it deepens our divisions and the sense that no one will work together after the election.

New on Next New Deal

Does the USA Really Soak the Rich?

Roosevelt Institute Fellow Mike Konczal says that recent arguments against more progressive taxation use a nonsensical definition in which inequality drives up tax progressivity.

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Obama Administration Defends Amazon’s Low Pay – Again

Oct 9, 2014Richard Kirsch

It's hard for workers to trust the President's support for policies that help them when the administration sides with Amazon at the Supreme Court.

Amazon’s business model is based on quick easy buying and low prices. One way it does that is to force its warehouse workers to wait a long time to leave work, without getting paid. And that’s just fine with the Obama administration, which continues to have a blind spot when it comes to decent pay and working conditions at Amazon.

It's hard for workers to trust the President's support for policies that help them when the administration sides with Amazon at the Supreme Court.

Amazon’s business model is based on quick easy buying and low prices. One way it does that is to force its warehouse workers to wait a long time to leave work, without getting paid. And that’s just fine with the Obama administration, which continues to have a blind spot when it comes to decent pay and working conditions at Amazon.

Yesterday the Supreme Court heard a case (Integrity Staffing Solutions v. Busk) in which workers are suing the temp firm that staff’s Amazon warehouses. The workers are in court because they don’t get paid for the time they are forced to stand on line for a security check when they leave work to be sure they haven’t stolen anything. The security screening itself reveals the poor working conditions and lack of respect that Amazon has for its workers. Workers who are well paid and have job security will not take the risk of stealing. The lack of pay adds costly insult to their injury.

The legal issues revolve around whether the security screenings, which can take 20 minutes or more, are “integral and indispensable” to the job, which would trigger pay under the Fair Labor Standards Act. Amazon certainly thinks so; the screenings aren’t optional. Still the firm, which pays warehouse workers around $11 or $12 an hour, cheaps out by denying the workers pay when they are waiting on line to leave.

As Jesse Busk, the lead plaintiff in the case, told The Huffington Post, "You're just standing there, and everyone wants to get home. It was not comfortable. There could be hundreds of people waiting at the end of the shift."

While President Obama has made numerous passionate speeches about giving Americans a raise, his administration is taking Amazon’s side at the Supreme Court, filing an amicus brief, alongside the U.S. Chamber of Commerce and other business lobbies.

Unfortunately, there’s nothing new about this from the administration. Last August, as I wrote at the time, “President Obama gave a great speech on why good jobs are the foundation for his middle-out economic strategy... from a huge Amazon warehouse where the workers do not have good jobs.”

The President told the Amazon warehouse workers who were in the audience, “we should be doing everything we can as a country to create more good jobs that pay good wages.”

Everything, it turns out, except being sure they get paid for all the time they are required to be at work.

The Obama administration may wonder why the President does not get more credit for the economic progress the nation has made coming out of the Great Recession or more recognition for his calls for raising the minimum wage. The core reason is that for too many Americans too low wages, too few hours at work, and job insecurity or no job at all remain their reality.

The President’s defense of Amazon reveals another reason. Americans see that he is unwilling to take on the powerful forces that are driving down the living standards and hopes of American workers. They see his embrace of Amazon and Wal-Mart, where he gave a speech on energy earlier this year. And too many come to the conclusion that it is only campaign contributors that matter, despairing of finding leaders who understand what really is going on in their lives – and who are willing to take their side against the powerful.

Richard Kirsch is a Senior Fellow at the Roosevelt Institute, a Senior Adviser to USAction, and the author of Fighting for Our Health. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform.

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The Federal Reserve Won't Save the Economy for All

Oct 9, 2014Joelle Gamble

Deepening political participation in and beyond voting is key to achieving policies that raise outcomes for the working class.

Deepening political participation in and beyond voting is key to achieving policies that raise outcomes for the working class.

Inflation hawks have been the talk of the town in elite economic circles in recent weeks. More liberal-leaning minds critique their (frankly) unsubstantiated concerns that the Federal Reserve is driving the U.S. economy toward high levels of inflation. Hawks are concerned that high levels of inflation due to expansionary monetary policy will lead to negative economic outcomes for major firms and, in turn, the rest of the American public.

Instead of worrying about inflation, which has remained at or below 1.5 percent for a year and a half, many prominent economists argue that we should focus on wage growth and jobs. We have seen profits for corporations rise to nearly pre-recession rates, while the poverty rate is not declining as fast as it should be. It’s clear there are some big policies that need changing: the minimum wage, the corporate tax structure, federal budget priorities, and regulations ranging across industries. So why is there so much focus on the Fed and the inflation hawks that circle it? Is there some policy lever we can pull here that would raise outcomes for the working class?

Let’s lay it out on the table: Current economic debates have focused on U.S. and global monetary policy because our fiscal policy problems appear to be inoperable. A Congressional stagnation, of sorts, has led to a fixation on a different institution, the Federal Reserve. But, overall, can this fixation actually translate into outcomes for the middle class?

With a gridlocked federal system, where can we push for substantial changes in wages and investment infrastructure that support the working class? Executive orders have their limits, of course. Advancements in cities like Seattle and New York City or states like Maryland have started to take effect. But at some point, a deeper, sustainable change must take place. This is a change in who leads in governance and who leads on policy change.

Elections are our general go-to on these matters. If political representation fails, we can just vote them out! Elections matter, but, there are some facts to consider. Currently, the average U.S. voter has an income higher than the median. This is due to lack of access, as well as the privilege of being able to make time to vote. Thus, we should open up opportunities, such as early voting, to more people. But even still, with faith in government falling, access reforms only go so far.

Beyond the act of voting itself, we have to question the responsiveness of the federal government, in particular, to voters. The growing influence of interest groups and coalitions of the wealthy make the ability to change political outcomes from the ballot box less and less secure.

We need to grow the bench. Deepening political participation in and beyond voting is key to achieving policies that raise outcomes for the working class. It is not enough to vote; government must be responsive. As Roosevelt Institute Fellow Sabeel Rahman notes, historic movements of substantial political reform have popular sovereignty and grassroots movements at their core.

Sabeel's words ring especially true in our current political climate. With congressional ineptitude and an unwillingness of the elites to take responsibility for the current state of our democracy, we must return to local movements and communities to build the foundations needed to create tangible economic change. That’s why members of the Campus Network are piloting the Rethinking Communities initiative. We recognize that democracy starts not in Washington but at home, in our own classrooms, our own cities, and our own communities.

There is no silver bullet or hero in this fight for economic justice. Not one public official, nor one economist, nor one President will solve our mess. A return to democratic principles and a deepening of participatory process is what it will take to uplift the working class.

Joelle Gamble is the National Director of the Roosevelt Institute | Campus Network.

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Daily Digest - October 9: Extreme Wealth Disparities Will Lead to Social Dysfunction

Oct 9, 2014Rachel Goldfarb

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Top 400 U.S. Billionaires' Wealth Equals Brazil's GDP (Real News Network)

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Top 400 U.S. Billionaires' Wealth Equals Brazil's GDP (Real News Network)

Roosevelt Institute Senior Fellow Rob Johnson comments on this data point from Forbes, noting that the social dysfunction caused by this kind of inequality isn't hitting the wealthy yet.

Pulling the Plug on Comcast's Merger (Bloomberg View)

Roosevelt Institute Fellow Susan Crawford explains why the Federal Communications Commission should block Comcast's proposed merger with Time Warner Cable.

Debt Scolds: Pay No Attention to the Falling Deficit! (NY Mag)

Jonathan Chait scolds those who treated the deficit like the end of the world; now, the deficit is falling, but their outlook took needed stimulus off the table back in 2009.

Fed Officials to Be Flexible on How They Raise Rates (WSJ)

Reporting on the Federal Reserve meeting notes from September, Jon Hilsenrath explains the Fed's decision to try new experimental tools when it's time to raise interest rates.

Obama Had Security Fears on JPMorgan Data Breach (NYT)

Michael Corkery, Jessica Silver-Greenberg, and David E. Sanger report on the administration's knowledge of a summer-long cyberattack on JPMorgan and other banks.

Post-recession Decline in Black Women’s Wages is Consistent with Occupational Downgrading (Working Economics)

Valerie Wilson says that unlike other groups, black women lost both mid-wage and high-wage jobs in the recession, which explains their decreased earnings.

New on Next New Deal

Obama Administration Defends Amazon’s Low Pay – Again

Roosevelt Institute Senior Fellow Richard Kirsch says the support of Amazon in Integrity Staffing Solutions v. Busk illustrates the continued influence of the donor class over workers.

The Federal Reserve Won't Save the Economy for All

Deepening participatory democracy will improve outcomes for the working class, writes Roosevelt Institute | Campus Network National Director Joelle Gamble.

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Daily Digest - September 23: Even Wall Street Sees Inequality Holds Back the Economy

Sep 23, 2014Rachel Goldfarb

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Why Wall Street Cares About Inequality (WSJ)

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Why Wall Street Cares About Inequality (WSJ)

Major Wall Street institutions like Standard & Poor's and Morgan Stanley have put out reports on income inequality. Pedro Da Costa says it's because these companies see what's holding back the economy.

Treasury Announces Rules to Help Curb Benefits of Inversions (Buzzfeed)

The new rules will change how money transferred from foreign subsidiaries and U.S.-based parent companies is taxed, in order to reduce the advantages of inversion, writes Matthew Zeitlin.

The Politics of Pre-K: How A Program Known to Help Poor Mothers Could Doom Your Candidacy (TAP)

Rachel M. Cohen explains why the gubernatorial candidates in Pennsylvania will only talk about pre-K in terms of education, skipping any mention of working mothers or income inequality.

The GOP's Jobs Bill Will Create Few Jobs, But Plenty of Debt (TNR)

The $590 billion deficit increase from the bill's tax breaks proves to Danny Vinik that the GOP doesn't actually care about the deficit as much as it opposes increased government spending.

What Happens to Families on Housing Assistance When the Assistance Goes Away? (WaPo)

The cost of market-rate housing often erases the benefits of positive life changes that take people off housing assistance, writes Emily Badger, and more gradual assistance reductions are costly.

Those Lazy Jobless (NYT)

Paul Krugman says that John Boehner's repetition of the accusation that the unemployed just don't want to work proves that the "closed information loop of the modern right" is particularly effective.

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Taxes Are Never Just a Class Issue

Sep 4, 2014Joelle Gamble

Tax reforms can't solve all economic inequality, because they won't change the reality of race in the U.S. economy.

Tax reforms can't solve all economic inequality, because they won't change the reality of race in the U.S. economy.

The threat of corporate inversions to the American tax base sprung an interesting political dialogue around tax reform in the United States. We’ve seen debates on how to stop the spread of inversions and arguments that they aren’t a problem at all. Some call for the abolition of the corporate tax rate as a whole and others completely reject such suggestions. I find these discussions of tax reform and its effects on the economy informative yet simultaneously slightly disappointing.

What bothers me about how tax reform debates shake out is how absent they can become of socio-political realities, particularly the reality of race.

One line of progressive argumentation follows simply: If everyone pays their fair share of taxes, we can support public spending and job growth, and we’ll all do better. The argument firmly stands, but there is an important caveat.

It’s easy to harken back to the 1950s when tax rates were high, social services were relatively steady and economic security stretched across economic strata. But who was really secure then? Even the high points of job security for the American economy still left African Americans (and other racially marginalized groups) behind. This a structural phenomenon, instituted by socially racist institutions and a deep history of systemically harming the Black community.

We can’t take race out of conversations around economic inequality. The reality of race is that even fixes to the broader federal revenue landscape don’t always address the structural barriers of racism. A rising tide can’t lift all boats, if some boats are bolted to the seafloor.

Black unemployment consistently exceeds that of whites, both post-Recession and since such data has been available. Gaps between white unemployment and black unemployment shrank in 2009. This was not due to falling black unemployment but instead due to skyrocketing white unemployment.

This racial gap in economic success extends beyond the employment rate. In fact, it is deeply entrenched in the way wealth is distributed in the U.S. The gap between median Black wealth and median white wealth stands at about $236,000 dollars. Flagrant discrimination, in part, contributes to this gap. But it is perpetuated by generations of asset accumulation policies that are targeted at those who already own assets.

Corporate tax reform alone isn’t sufficient to fix the effects of decades of second-class status conferred on African Americans. The government does not just need sufficient funding to create equality within the economy. Distribution of these dollars is equally important. It needs to reflect the nuances of structural inequalities built into multiple aspects of our tax code.

Take federal housing spending policies as a prime example. Ending ineffective tax incentives, such as the mortgage interest reduction, can start to tilt the scales toward those who are not already wealthy. Seventy-seven percent of the benefits of the mortgage interest reduction accrued to homeowners with gross incomes of above $100,000. We need to rethink housing subsidies so that the benefits of federal programs do not heavily favor those who already own homes.

We need corporate tax reform to ensure that all participants in our economy are paying their fair share. But we also need a federal benefits structure that ensures that the concept of a "fair share" considers our history of discrimination when determining which Americans need those benefits most.

Joelle Gamble is the National Director of the Roosevelt Institute | Campus Network.

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Daily Digest - September 3: Soaring Inequality Isn't Inherent to the System

Sep 3, 2014Rachel Goldfarb

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Democracy in the Twenty-First Century (Project Syndicate)

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Democracy in the Twenty-First Century (Project Syndicate)

Roosevelt Institute Chief Economist Joseph Stiglitz says that wealth inequality, thrown into the spotlight by Thomas Piketty, is the result of government-supported distortion of the market.

A Competition to Make the City More Resilient (Tech President)

Roosevelt Institute Fellow Susan Crawford explains how the RISE:NYC contest was structured to ensure that it sparked sustainable and innovative ideas to protect the city from future storms.

How Amazon Plans to Storm Cable's Castle (Bloomberg View)

Susan Crawford suggests that Amazon's purchase of Twitch, a live-streaming video game platform, aims to increase its negotiating power with Internet service providers.

America’s Growing Food Inequality Problem (WaPo)

Researchers have found a growing dietary quality gap that parallels income inequality, says Roberto A. Ferdman. The study says the gap is partially cost-driven, since healthy food is pricier.

New Voter Guide Follows the Money (NYT)

Derek Willis looks at Crowdpac, a site that is creating a voter guide based on campaign finance data. Crowdpac argues that the source of campaign dollars says the most about a candidate.

It's Time to Raise the Minimum Wage. If Congress Would Rather Suck Up to the Koch Brothers, We'll Raise It Anyway (The Guardian)

Sarah Jaffe says that as long as politicians see wealthy donors instead of workers as their base, organizers must continue to take the wage issue out of legislators' hands.

Fast-Food-Worker Civil Disobedience? (Philadelphia Daily News)

Will Bunch reports on the planned acts of civil disobedience, including sit-ins and marches, that will represent a major escalation of the fast-food strikes tomorrow.

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Daily Digest - August 21: Time to Consider the Mortgage Deduction?

Aug 21, 2014Rachel Goldfarb

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How a Widely Beloved Tax Deduction Really Just Benefits the Well-Off and Exacerbates Inequality (TAP)

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How a Widely Beloved Tax Deduction Really Just Benefits the Well-Off and Exacerbates Inequality (TAP)

The mortgage interest deduction primarily benefits those who make at least $100,000 a year, and dwarfs funding for housing programs for the poor, writes Alex Ulam.

  • Roosevelt Take: In his latest white paper on tax reform, Roosevelt Institute Chief Economist Joseph Stiglitz suggests changes to the mortgage interest deduction that would make it more equitable.

What Would Real Economic Justice Look Like in Ferguson? (The Nation)

Michelle Chen reports on organized labor's involvement in Ferguson, MO, where a millennial labor group called Future Fighters is asking protesters want they want their community to look like.

Fed Dissenters Increasingly Vocal About Inflation Fears (NYT)

The newly released minutes from the Federal Reserve's July meeting show that some Fed officials feel the central bank has done all it can to improve the economy, writes Binyamin Appelbaum.

CEOs are Dumb When it Comes to This (MarketWatch)

Simon Constable reports on a new study that shows that stock option compensation isn't really considered in dollars: CEOs tend to get the same number of options regardless of the stock's value.

Why Bank of America Probably Won’t End Up Actually Paying US$17B in Mortgage Securities Settlement (Financial Post)

Consumer relief as negotiated in this settlement and others rarely cost the banks much at all, says Jeff Horwitz. But with few other sources of consumer relief, advocates welcome this one.

The Latest Attack on Labor, From The Group That Brought Us ‘Harris v. Quinn’ (In These Times)

Moshe Marvit explains the National Right to Work Committee's latest tactic, which aims to end exclusive representation in public sector unions and weaken collective bargaining.

New on Next New Deal

Mean and Lean Local Government

In his video speculation for the Next American Economy project, Stefaan Verlhurst, Co-Founder of GovLab, projects how municipal governments might shift tactics to take advantage of broader resources.

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Daily Digest - August 20: Inequality Among Roots of Ferguson Unrest

Aug 20, 2014Rachel Goldfarb

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Ferguson's Race Injustices Have Their Roots in Economic Inequality (The Guardian)

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Ferguson's Race Injustices Have Their Roots in Economic Inequality (The Guardian)

Suzanne McGee ties the situation in Ferguson, MO to the severe economic inequality facing the Black community in the U.S., which she says limits Black access to political power as well.

Meet the Ordinary People Who Are Mobilizing Around Monetary Policy (WaPo)

Activist groups concerned with democratizing the discussion of monetary policy are sending low-wage workers to speak a Federal Reserve conference in Wyoming. Ylan Q. Mui reports.

The Tax Dodge That Has Plagued the U.S. for More Than a Decade (The Atlantic)

Joe Pinsker looks at the history of companies looking to reincorporate abroad to dodge U.S. corporate income taxes, and explains how the process has changed (and yet not) in the past decade.

  • Roosevelt Take: Roosevelt Institute Chief Economist Joseph Stiglitz proposes a full slate of corporate income tax reforms in his latest white paper.

Lagging Demand, Not Unemployability, Is Why Long-term Unemployment Remains So High (EPI)

In a new report, Josh Bivens and Heidi Shierholz argue that long-term unemployment is still a component of cyclical weakness in the economy from the recession, rather than a structural shut-out.

How to Save the Net: Don’t Give In to Big ISPs (Wired)

Netflix CEO Reed Hastings calls on the Federal Communications Commission to expand its focus to regulate the relationships between companies like his and the Internet service providers.

OSHA fines company $1M for violating truckers' hours-of-service rule (The Hill)

The Occupational Safety and Health Administration's fine is about protecting workers and the public, reports Tim Devaney. Trucker rest rules are in the limelight after high-profile crashes.

San Diego Defies Mayor, Raises Minimum Wage (CNN Money)

Katie Lobosco reports that the city council overturned the mayor's veto, approving a gradual minimum wage hike that ties the wage to inflation, as well as paid sick leave.

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Daily Digest - August 19: With Inequality, It's Women and Children First

Aug 19, 2014Rachel Goldfarb

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Among the Poor, Women Feel Inequality More Deeply (NYT)

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Among the Poor, Women Feel Inequality More Deeply (NYT)

The burden of inequality falls more heavily on poor women, says Patricia Cohen, because they are more likely to be raising a family and get little support for the "second shift" of household management.

Blame Employers, Not Workers, for Any Skills Gap, Economist Says (WSJ)

Josh Zombrun looks at a new working paper from a University of Pennsylvania economist, which argues that employers who complain about lack of skills are accountable for refusing to provide training.

The Hunger Crisis in America’s Universities (MSNBC)

Ned Resnikoff reports on how colleges across the country are tackling rising food insecurity. Many are looking to Michigan State University, home of an established campus food pantry, for guidance.

A Co-op State of Mind (In These Times)

Ajowa Nzinga Ifateyo looks at the rise of worker cooperatives in New York City in light of the City Council's new $1.2 million initiative to support and grow such enterprises.

What Does the Fed Have to do with Social Security? Plenty (AJAM)

Dean Baker notes that Federal Reserve policy can influence unemployment rates, and when more people work, especially in low- and middle- wage jobs, Social Security revenues increase.

How Outdated Parking Laws Price Families Out of the City (CityLab)

A-P Hurd argues that requiring developers to build parking lifts the costs of housing out of the affordable range for most families. Hurd looks at a more family-friendly urban housing model.

New on Next New Deal

Curbing Campus Sexual Assault is Not About the Money

Campus Network's Hannah Zhang responds to critics of the Campus Accountability and Safety Act who call the bill's fines outsized to the problem of sexual assault on campuses.

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