In Seattle, Calls for a Higher Minimum Wage are Calls for Democracy

Mar 28, 2014Felicia Wong

Roosevelt Institute President and CEO Felicia Wong spoke yesterday at the Income Inequality Symposium in Seattle, where she gave the closing remarks, calling on our memories of President Franklin D. Roosevelt and the New Deal to urge Seattle into action on raising the minimum wage. Her prepared remarks are below.

Roosevelt Institute President and CEO Felicia Wong spoke yesterday at the Income Inequality Symposium in Seattle, where she gave the closing remarks, calling on our memories of President Franklin D. Roosevelt and the New Deal to urge Seattle into action on raising the minimum wage. Her prepared remarks are below.

Thank you so much, Mayor Murray, David Rolf from SEIU 775NW, Howard Wright, and all of you who have served on the Mayor’s Task Force or spent so much of your time fighting for economic growth and economic justice.

Today – we feel like a nation at the crossroads, on the brink.  But let’s remember: we’ve been here before. The story is familiar. Poverty and income inequality are on the rise throughout the United States. Even if you’re fortunate enough to have a job, you’re struggling to make ends meet. Meanwhile, a select few do very, very well for themselves. The President, facing a critical midterm election, addresses the nation. Raise standards for workers, he says, and he calls for laws to raise the national minimum wage, too.

I’m talking about 1938, when the President was Franklin Delano Roosevelt. When FDR took office, there was no federal law guaranteeing a minimum wage for American workers – and in fact throughout the 1930s the President battled a recalcitrant and conservative Supreme Court, and conservative business establishment, on behalf of workers. In his 1938 address to Congress, FDR said such a law was long overdue. He said it was morally unacceptable and economically unsustainable for so many people in the United States to earn poverty wages. To quote Roosevelt: “Aside from the undoubted fact that the people thereby suffer great human hardship, they are unable to buy adequate food and shelter, to maintain health, or to buy their share of manufactured goods.”

That’s the key. FDR understood that the minimum wage was an issue for our hearts and for our wallets. Again and again, he returned to the point that businesses could not thrive unless workers did. Without workers, an economy cannot grow.

It was a tough fight, and FDR didn’t go it alone. He had what he called his Brains Trust -- lawmakers, academics, activists, and business leaders. Their job was to figure out economic policies under which everyone could prosper. FDR went to Congress with their proposals. The result: the Fair Labor Standards Act, a keystone of the New Deal, along with the Social Security Act. With the FLSA we got a federal minimum wage as well as the 40-hour workweek and standards for overtime pay. These underlie modern labor policy.  These are issues that are hotly debated even today.

As we’ve seen over the course of this day’s symposium, fixing our country’s inequality and wage problems will – once again – need the good ideas and expertise of a brain trust. We have been fortunate to hear from important partners such as Maud Daudon from the Chamber of Commerce, Saru Jayaraman from Restaurant Opportunities Center - United, and leaders from other cities such as Supervisor John Avalos from my hometown of San Francisco and Wilson Goode from Philadelphia.  Innovation is a team sport. FDR understood this, and so does Mayor Murray.

I work at the Roosevelt Institute in New York City.  And I am here today because Seattle is at the center of the nation’s most important fight.  

At Roosevelt, we think of ourselves as an ideas and leadership shop. I won’t claim that we ask ourselves “What Would FDR Do?” in every situation. But we certainly try to capture his spirit of innovation and collaboration in our work. We support public intellectuals like Dorian Warren, whom you’ve heard from today, and Mike Konczal, Joe Stiglitz, Annette Bernhardt, Richard Kirsch, and others. They plunge into all facets of the inequality problem – which President Obama has rightly called the defining problem of our time.  They envision solutions, including a new labor agenda for the 21st century.  This includes raising the minimum wage and providing paid sick leave, and also includes new standards for the right to organize, the enforcement of labor laws, and strategies to combat labor market segregation by race and gender.  At Roosevelt we also support some 10,000 undergraduates across the U.S. who dig in deep in their local communities – designing and fighting for policy solutions at the city level.

We at the Roosevelt Institute believe – as does everyone here – that we all do better when we all do better. But: wages have been backsliding for decades now. The typical American family makes less today than it did 25 years ago. I know we have heard a lot of statistics today, and they can seem overwhelming, but consider this for just a moment: 16 million children live in homes where their families are not sure where the next meal is coming from. Five years after the Great Recession officially ended, there are still three times as many Americans looking for work as there are job openings. And, as we’ve discussed today, new jobs aren’t good jobs.  The most recent BLS statistics forecast a low-wage trajectory through at least 2020.  Only one of the 20 occupations expected to add new jobs requires a college degree, and most of the kinds of jobs we will be creating offer low or moderate pay.

From FDR to President Obama to each and every one of us here today, whether right or left or center: we can all agree that no one should work a full-time job and worry about putting food on the table for their family.  

But this is not just about morality, not just about the “we should” and the “we shouldn’t.”  This is about economic fundamentals. When people can’t even buy groceries at the end of the month, they can’t do all of the things – go to a baseball game, go to dinner at a restaurant – that drive economic growth and make our towns and cities strong.

Now, consider the other half of the coin: times are not tough for everyone. In 2012 alone, the richest 1 percent of Americans took home more than 20 percent of all income – one of their biggest hauls since the Gilded Age. Corporate profits are at record levels, and corporations are sitting on huge cash reserves. Many will tell us that corporations and wealthy owners are the job creators, the engines of the economy.  Now, none of us begrudge real success. But the question is, if they’re doing so well, why isn’t the rest of the economy doing better?

And the answer is clear: As FDR once argued, the people – middle class, working families – are the real job creators. These aren’t just strangers, or statistics. I’m talking about our friends and family and co-workers. I’m talking about us. As more and more Americans struggle to keep up - businesses can’t function.  Companies need customers, people to spend money on those products and services. That’s why holding down wages is more than just unfair. It’s also bad economics.

Let me take a minute to tackle the arguments on the other side: that raising the minimum wage will cause unemployment, business flight, or higher prices.  But empirical research looking at decades of data – much of which we have heard today – shows that on balance raising wages has little or no negative employment effects, and in fact there is significant evidence to show that businesses – and cities and towns – flourish with higher wages, rather than lower.

This also should make sense to any of us who manage other people. Making decisions to pay employees enough so they aren’t stressed in the rest of their lives makes good business sense, and good common sense.

And, we are learning from very recent research.  I will cite just two important pieces.  The first is a massive study of 200 years of capital accumulation, incomes, and growth just published here in the United States.  The research suggests the problem is very big, and in fact lies in the structure of today’s entire global economy. Too much capital is concentrated in the hands of too few, and the global economy has gone awry.

The second piece is a recent IMF study of inequality and growth in hundreds of countries showing that many equality-enhancing redistributive policies – higher taxes, more public investment – can increase growth. Win-wins are possible.  

So these findings should give us courage. And should push us to act – because recalibrating the minimum wage is one very big step towards fixing the broken economic system and promoting growth in ways that will work for everyone.

Let me be clear: raising the minimum wage isn’t anti-democratic, isn’t anti-capitalist, isn’t anti-free market.  FDR saved capitalism from itself.  That is what you are trying to do here today.

It’s no surprise that we’re having this conversation in Seattle. Your city is a great hub of American business and social innovation. This city has brought to life trends and technologies, from Starbucks coffee to Excel spreadsheets, which revolutionize the way we live. And you in Seattle know that people are at the center of that innovation. Companies like Costco have built their business models on paying decent wages and benefits, retaining valued employees, and fostering strong communities.

It’s not a top-down, trickle-down proposition. Economies grow, as our friend Nick Hanauer said this morning, from the middle out.  You have seen it work in Seattle, and that’s why Seattle is the right incubator for the sound labor policies that will shape the American economy of the future.

By voting for a 15 dollar an hour wage floor, Seattle can move the entire region’s economy forward.  You can also set the trend for the whole country – in addition to possible federal legislation, at least eight states are considering minimum wage increases this year. You can show all of us how to build the kind of economy that grows, that is stable, and that spreads prosperity broadly.  It is a virtuous cycle.  

If adopted nationwide, the Economic Policy Institute estimates that the raise in the minimum wage proposed by President Obama could affect more than 28 million people and lift many of them out of poverty. 28 million people. At a time when the American Dream of opportunity for all is rapidly fading, those are 28 million reasons to support this proposal.

Beyond the potential economic impact, this policy would show what government can achieve when it responds to the needs of working families. As Justice Louis Brandeis once said, “We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can’t have both.” Individual companies, as great as they are, can’t do this alone.  Our fates are linked, and we have to act together.  By raising the minimum wage to fifteen-dollars-an-hour, Seattle can choose democracy and start to reverse the trends that have been crushing the middle class.

Let me close by urging the members of Seattle’s City Council to approve the 15 dollar an hour minimum wage. And as FDR told his own supporters, it is up to all of us to make them do it. A lot has changed about our country since the days of the New Deal, but one thing remains the same: Progress is possible when we commit to it and fight for it. Now is the time for us to decide what kind of economy, what kind of government, and what kind of future we want for ourselves. Now is the time for Seattle to lead the way. Thank you.

Felicia Wong is President and CEO of the Roosevelt Institute.

 

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National Labor Law in the United States: Scanty Protections for Organizing Leave Out Many Workers

Mar 27, 2014Richard Kirsch

This is the third in a series of posts summarizing a new Roosevelt Institute report by Senior Fellow Richard Kirsch, entitled “The Future of Work in America: Policies to Empower American Workers and Ensure Prosperity for All.” The report provides a short history of how the rise and decline of unions and then explores reforms in labor policy to empower American workers to organize unions and rebuild the middle class. Today’s post explains why labor law in the U.S.

This is the third in a series of posts summarizing a new Roosevelt Institute report by Senior Fellow Richard Kirsch, entitled “The Future of Work in America: Policies to Empower American Workers and Ensure Prosperity for All.” The report provides a short history of how the rise and decline of unions and then explores reforms in labor policy to empower American workers to organize unions and rebuild the middle class. Today’s post explains why labor law in the U.S. provides a fragile, limited foundation for giving workers the power to claim a share of economic wealth or have a voice at work.

Last month the body that governs labor law in the United States, which for the first time in ten years has a full complement of members, proposed some new regulations. The uproar from business trade associations was predictably over-the-top, declaring that a proposed regulation simply requiring that businesses disclose the identity of anti-union consulting firms was aimed at taking employers out of the union organizing process entirely.

From the rhetoric of the business lobby and their conservative allies, you would think that the U.S. has robust labor laws, which put employers at a dire disadvantage. But the truth is that federal labor laws provide a weak and limited set of legal procedures for workers who want to organize for a fair share of the wealth they produce.

When the National Labor Relations Act (NLRA) was enacted in 1935, during the heart of FDR’s New Deal, the United States finally recognized the value of providing a systematic legal structure for workers to negotiate with employers. The NLRA’s passage alone did not make union organizing easy. It took continued pressure from striking workers, as well as government-imposed labor peace to ramp up production during World War II, to achieve some compliance by employers with the NLRA’s framework for collective bargaining.

But just two years after the War ended, Southern Democrats joined Republicans, to dramatically weaken the young law – which already had plenty of shortcomings – by passing the Taft-Hartley Act, over President Truman’s veto,. What remains is a tepid law, offering a limited, fragile foundation for organizing workers, complete with loopholes which can be exploited by employers who resist unionization.

The NLRA applies to most – but not all – private sector workers. It leaves out domestic workers, farmworkers, supervisors (workers who supervise others but don’t make policy decisions) and independent contractors (even when they work for one employer). It also leaves out all public employees.

In order for the workers who want to organize to form a union with collective bargaining rights, a majority of eligible workers in a bargaining unit must agree to support the union. The employer and union must agree to who is in the bargaining unit (or the NLRB will decide), which typically is no wider than a single facility or a certain category of workers in a single facility or department.

Workers can request to form a union by having a majority sign union cards, but the company can insist on an election, during which the company can bar union representatives from speaking at the worksite, but can compel workers to listen to anti-union speeches.

While employers are not legally permitted to fire a worker for supporting the union or for taking other forms of collective action, the only penalty that employers face for firing a worker is that they are required to re-hire the worker and provide them with back pay. Moreover, this back pay award is reduced by the amount of wages that the employee earned or could have earned after the firing. It often takes years before the Board and courts order even such a small penalty. These weak penalties make it easy for employers to break the law, and, as a result, the firing of union supporters has become commonplace.

Once a union is recognized – either by winning an election or by card check – the union and the employer are required to bargain in good faith over wages, benefits, and working conditions. Other factors impacting workers are off the table unless the union and employer agree to discuss them. If an employer refuses to negotiate in good faith, the Board may request that a federal court hold the employer in contempt and fine it, a process which usually takes years. If the employer and union do negotiate but cannot agree on these questions, the employer may determine actions on its own.

During contract negotiations, both sides are permitted to use economic pressure to win concessions over mandatory subjects. The union can not apply economic pressure to suppliers or customers, only to the employer itself. The NLRA prohibits employers from firing strikers, but employers are entitled to hire permanent replacements for strikers. After the strike ends, any striker who has been permanently replaced technically remains an employee, unless she has found comparable work. But the employer is not required to actually offer them work until a position becomes open. As a result, striking workers may be out of work for a long time or never offered a job at the firm.

Employers are also permitted to lock out workers. Workers who have been locked out also may be replaced temporarily, but not permanently. If a union strikes over an employer’s commission of an unfair labor practice – such as firing a worker for supporting the union – the employer may hire only temporary replacements, and they must reinstate the strikers immediately upon the end of a strike.

Of course, it takes timely action by the Board, backed up by federal courts, to enforce any of these protections. But, as we discussed in the previous post in this series, a combination of appointments of regulators hostile to the NLRA and aggressive corporate resistance to complying with the law have made timely enforcement the exception.

Today, the NLRA process is used much less than in the past. The number of elections for union representation dropped by 59% from 2000 to 2012, from 2,957 to 1,202. Most of the elections were to continue current union representation, rather than win the right to bargain for new workers. The number of new workers organized through the election process in this period shrank from 106,459 in 2000 to 38,714 in 2012, a decrease of 64%.

The weaknesses in current labor law, particularly in relation to the changes in the economy between the mid-twentieth century and today, provide the context for the following posts in this series, which present an array of proposals to reform and transform labor law for the 21st century economy. 

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Daily Digest - February 27: Raising Wages the Rooseveltian Way

Feb 27, 2014Rachel Goldfarb

Click here to receive the Daily Digest via email.

FDR Set the Terms for Labor Executive Orders (Reuters)

Roosevelt Institute Fellow Dorian Warren praises President Obama for following FDR's path with his recent executive order raising the minimum wage for federally contracted workers..

Click here to receive the Daily Digest via email.

FDR Set the Terms for Labor Executive Orders (Reuters)

Roosevelt Institute Fellow Dorian Warren praises President Obama for following FDR's path with his recent executive order raising the minimum wage for federally contracted workers..

This Is How You Fix Ailing Public Pensions (Time)

Rana Foroohar draws out some key points from the Roosevelt Institute's conference on the public pensions crisis, including the need for fewer high-risk investments and campaign finance reform.

  • Roosevelt Take: The conference showcased a forthcoming study by Roosevelt Institute Senior Fellow Rob Johnson, who wrote about additional possible solutions to the pensions crisis.

Christie, Scott Walker and the Assault on Workers’ Pensions (The Nation)

For Republican governors with hopes of the presidency, attacking public pensions under the specter of Detroit is a strategic key, write Bob and Barbara Dreyfuss.

Tom Perkins Is Winning: The Rich Already Vote More (TPM)

William W. Franko, Nathan J. Kelly, and Christopher Witko point out that voter turnout already has a class bias, which results in state governments that are less responsive to public opinion.

Stop Currency Manipulation and Create Millions of Jobs (EPI)

By ending currency manipulation, when countries shift exchange rates to influence the costs of trade, Robert E. Scott says the U.S. would not only create jobs but would also lower the deficit.

The Home Mortgage Business, Where Cheaters Always Seem to Prosper (TAP)

David Dayen explains how Ocwen, a mortgage servicer, has managed to build an entire business around harmful and sometimes even fraudulent behavior toward homeowners.

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Daily Digest - February 18: Escape from Hooverville

Feb 18, 2014Rachel Goldfarb

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Worst. President. Ever. (All In With Chris Hayes)

Click here to receive the Daily Digest via email.

Worst. President. Ever. (All In With Chris Hayes)

In honor of Presidents' Day, Chris Hayes invites Roosevelt Institute Fellow Dorian Warren to discuss his pick for the worst: Herbert Hoover, Franklin D. Roosevelt's predecessor during the Great Depression.

The Silicon Valley Labor Scandals Prove Minimum Wage Hikes Don't Cost Jobs (TNR)

Roosevelt Institute Fellow Mike Konczal uses the coordinated efforts of Silicon Valley giants to control labor markets to demonstrate why raising the minimum wage will reduce job vacancies, not jobs.

Barons of Broadband (NYT)

Paul Krugman argues against the Comcast-Time Warner Cable merger, using Roosevelt Institute Fellow Susan Crawford's work to point out how the telecommunications industry already stifles innovation.

How Big Banks Are Cashing In On Food Stamps (TAP)

Electronic benefits transfer cards may be easier for the government, writes Virginia Eubanks, but they allow banks to make profits from the country's most unfortunate with fees galore.

The Stimulus Act was a Success — and We Need Another (WaPo)

George Zornick points out that the stimulus did its job – providing the economy with a temporary bump – just fine. Republicans who denounce it are ignoring the bill's intended purpose.

After Rejecting UAW, VW Workers May Still Get Works Council (Reuters)

Bernie Woodall and Amanda Becker report that Volkswagen is looking into whether a works council, elected workers who help set workplace rules, could be permitted at its Chattanooga plant under U.S. labor law, in lieu of a union.

New on Next New Deal

AOL's CEO Proves Women and Children Make Easy Scapegoats in the Workplace

Tim Armstrong's comments about "distressed babies" show that some companies still treat maternity care as an extravagance, even during times of profit, says Roosevelt Institute Fellow Andrea Flynn.

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Daily Digest - January 31: Out of Economic Chaos Come Executive Orders

Jan 31, 2014Rachel Goldfarb

Click here to receive the Daily Digest via email.

The President and Inequality (All In with Chris Hayes)

Click here to receive the Daily Digest via email.

The President and Inequality (All In with Chris Hayes)

Roosevelt Institute Senior Fellow and Chief Economist Joseph Stiglitz discusses the place of inequality in this week's State of the Union address, and the deeper question of why we don't implement the economic policies that would absolutely make a difference.

A History of Executive Orders (All In with Chris Hayes)

Roosevelt Institute Fellow Dorian Warren talks about the similarities between President Obama's plans for executive orders, as announced in the State of the Union, and President Franklin D. Roosevelt's use of the executive order, which also pushed for progressive labor policy.

Obama’s Toughest Job (NYRB)

Roosevelt Institute Senior Fellow and Director of the Bernard L. Schwartz Rediscovering Government Initiative Jeff Madrick comments on the State of the Union, complimenting the president for making jobs a central focus despite the challenges of that issue.

The Post Office Should Just Become a Bank (TNR)

David Dayen argues that there's one policy the president could push through that would contribute to many of the goals he articulated in the State of the Union: postal banking, which would create jobs, help the poor, and could be accomplished through executive order.

Why Alt-Labor Groups Are Making Employers Mighty Nervous (TAP)

Lane Windham says that for all that anti-union groups want to tout low union membership numbers, labor isn't going anywhere. Alternative labor groups are growing and gaining power, as the growing discussion about raising the minimum wage makes clear.

GOTD: Inequality Is Not A Four Letter Word (Blog of the Century)

Benjamin Landy contrasts Tuesday's State of the Union with the president's December 4 speech at the Center for American Progress. His shift from "inequality" to "opportunity" is clearly a political one, since he still endorsed progressive policies, but why the centrist rhetoric?

New on Next New Deal

The Rise of 'Insourcing' Gives Internet Companies a New Way to Exploit Workers

Roosevelt Institute | Campus Network National Operations Strategist Lydia Bowers cautions that while Internet-based service companies like Uber and Taskrabbit may make life easy for their customers, they don't give their workers any real protections.

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The State of the Union Then and Now: Raising the Minimum Wage is Still a Good Idea

Jan 29, 2014David B. Woolner

Decades after FDR called for a national minimum wage, the debate continues -- and his arguments for it still ring true.

Decades after FDR called for a national minimum wage, the debate continues -- and his arguments for it still ring true.

We have not only seen minimum wage and maximum hour provisions prove their worth economically and socially under government auspices in 1933, 1934 and 1935, but the people of this country, by an overwhelming vote, are in favor of having the Congress—this Congress—put a floor below which industrial wages shall not fall, and a ceiling beyond which the hours of industrial labor shall not rise. – Franklin D. Roosevelt, State of the Union Address, January 3, 1938

In calling for an increase in the minimum wage in his State of the Union address, President Obama may have unwittingly echoed Franklin D. Roosevelt. For it was in the sixth year of FDR’s presidency, in the annual message to Congress that FDR delivered on January 3, 1938, that Roosevelt reiterated his increasingly vehement call for the passage of the Fair Labor Standards Act—the very law that would establish the national minimum wage.

In proposing the legislation, FDR used many of the same arguments that President Obama used to counter the conservative opposition that insisted—much as the conservative right does today—that the federal government has no business trying to increase the purchasing power of the average worker, and that the enactment of a national minimum wage law would hurt business and increase unemployment. Opposition in the largely non-union and racially segregated South—where there was a huge differential between the wages of white and black workers—was especially intense, and thanks to the actions of Southern Democrats in both the House and Senate, who had joined with conservative Republicans in the formation of an anti-New Deal coalition, passage of the Fair Labor Standards Act was not going to be easy.

To counter these arguments, FDR appealed, as he often did, to the moral sensibilities of the American people, insisting that government had “a final responsibility for the well-being of its citizenship” and this included enacting “legislation to end starvation wages and intolerable hours.” Furthermore, there were sound economic reasons to pass wage and hours legislation. In an earlier address on the subject, using language that is especially relevant to President Obama’s call for an increase in overseas exports, FDR observed that:

American industry has searched the outside world to find new markets—but it can create on its very doorstep the biggest and most permanent market it has ever seen… A few more dollars a week in wages, a better distribution of jobs with a shorter working day will almost overnight make millions of our lowest-paid workers actual buyers of billions of dollars of industrial and farm products. That increased volume of sales ought to lessen other cost of production so much that even a considerable increase in labor costs can be absorbed without imposing higher prices on the consumer. I am a firm believer in fully adequate pay for all labor. But right now I am most greatly concerned in increasing the pay of the lowest-paid labor—those who are our most numerous consuming group but who today do not make enough to maintain a decent standard of living or to buy the food, and the clothes and the other articles necessary to keep our factories and farms fully running.

Interestingly, a group of over 600 economists, including seven Nobel laureates, recently issued an open letter calling on President Obama and the congressional leadership in both parties to raise the minimum wage, arguing, as FDR did, that “the weight of evidence” shows that an increase in the minimum wage will “have little or no negative effect on the employment of minimum-wage workers, even during times of weakness in the labor market.”

It seems incredible that we should still be locked in the same debate about the moral and economic impact of an increase in the minimum wage more than three-quarters of a century later, at a time when even the McDonald’s Corporation had to admit after its own internal analysis that its minimum-wage workers could not survive on what they were receiving without the addition of a second job.

In 1938, Franklin Roosevelt argued that if we want to move “resolutely to extend the frontiers of social progress, we must… ever bear in mind that our objective is to improve and not to impair the standard of living of those who are now undernourished, poorly clad and ill-housed.” The Fair Labor Standards Act, which was signed into law on June 25, 1938, has helped improve the lives of millions of American workers—especially those at the bottom rung of the income scale—through its recognition of need to establish a minimum wage and through the provision that provides time and a half for overtime work. But in order for the law to be effective and have meaning, the minimum wage must keep up with the cost of living, and, as President Obama noted in last night’s address, the real wage of the average American worker has been in decline for decades when adjusted for inflation.

If Congress is serious about improving and not impairing the lives of the millions of working poor in this country, then it is high time to heed the president’s call to “give America a raise” and increase the minimum wage. To fail to do so would be yet another example of the callous indifference—most recently exemplified by the failure of Congress to extend long-term unemployment benefits—that those in positions of wealth and power have shown for the plight of the millions of Americans who struggle day by day to get by on wages that force even those working full-time to live a life of poverty. Indeed, the inability or unwillingness of this Congress to act on behalf of the most vulnerable in our society brings to mind the words of the late Pete Seeger, who died this week, when he sang, “which side are you boys, which side are you on?”

David B. Woolner is a Senior Fellow and Hyde Park Resident Historian for the Roosevelt Institute. 

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Looking to 2014: The Emerging Movement for the Next New Deal

Jan 2, 2014Richard Kirsch

The rise of a new progressive organizing is cause to believe that economic reform and a shift toward broadly shared prosperity are within reach.

The rise of a new progressive organizing is cause to believe that economic reform and a shift toward broadly shared prosperity are within reach.

Thomas Edsall, who now is capping off his long career writing insightfully about the relationship between economics and public opinion as a blogger for The New York Times, concluded a piece in late December by saying, “Progressives are now dependent on the fragile possibility that inequality and socioeconomic immobility will push the social order to the breaking point and force the political system to respond.”

Edsall’s bleak prognosis raises the biggest question facing not only progressives, but the future of our democracy: is the political system in the United States capable of responding to the escalating crisis of stagnant wages, shrinking benefits, dissolving economic opportunity, and disappearing hopes of living anything that resembles the American Dream?

It is a question I ask myself every day. But I reach a different conclusion than Edsall, because for all his powers of observation, he misses the role that people play in changing history. I see a growing movement of Americans organized by progressives who are not waiting for the social order to break, but are instead forcing the political system to respond.

Edsall reaches his conclusion by way of two commentators, my colleague Mike Konczal at the Roosevelt Institute and Harvard economist Ben Friedman. Konczal’s analysis of the quandary is cogent, as he provided “a two part description of the liberal state” in a 2011 post:

#1 you would have the government maintaining full employment, empowering workers and giving them more bargaining power, and #2 you would have a safety net for those who fell through the cracks… I think it is safe to say that liberals have abandoned #1 and doubled-down on #2… Without a strong middle and working class you don’t have natural constituencies ready to fight and defend the implementation and maintenance of a safety net and public goods. The welfare state is one part, complementing full employment, of empowering people and balancing power in a financial capitalist society.

Friedman’s contribution is to point out, as Edsall summarizes, that “during hard times people become less altruistic and more inclined to see the poor as undeserving.” Friedman says that when people are squeezed economically, rather than identifying with those still worse off, they “enter a period of retreat and retrenchment.” That is certainly what we are seeing now, with the government cutting unemployment benefits, food stamps, and a much larger swath of the safety net in a shrinking budget.

On the other hand, Friedman says times of broadly-shared prosperity encourage “greater generosity toward those who, through some combination of natural circumstance, market forces and sheer luck, have been left behind.”

When we look at the big periods of progressive change in the 20th century through this lens, we can ask, are we more similar to the soaring post-World War II middle class that led to the Great Society, or to the wrecked economy that led to the New Deal? After the Great Recession, that’s a no-brainer.

So is Edsall then correct in concluding that the only way to get to the next New Deal is waiting for another disintegration of the economy like we saw after the Great Depression? Or is even that a misreading of New Deal history, in which decades of building a movement of working people laid the groundwork for the New Deal laws that established the right to organize unions, fair labor standards like a minimum wage, and social insurance programs like Social Security and unemployment compensation?

If we have to wait, we’re in big trouble, because as we saw in 2008, we are much less likely to see another collapse like the Great Depression thanks to the progressive accomplishments of the 20th century. The aggressive use of the Federal Reserve and banking regulations prevented a total collapse of the financial system. The safety net – food stamps, Medicaid, etc. – and the social insurance programs of unemployment insurance, Social Security, and Medicare prevented widespread destitution. These measures allowed us to have a Great Recession rather than a second Great Depression.  

But the Great Recession also deepened the three-decade-long trend of families seeing their incomes and lifestyles squeezed by stagnant wages, eroding benefits, and the rising costs of gateways to opportunity. As a result, we are seeing an escalation of the path to the next New Deal: organizing people to demand that we create a 21st century economy of broadly-shared opportunity and prosperity.

The past year saw the explosion of organized fast food workers, from a handful of community-supported walk-outs demanding higher wages a year ago to actions involving thousands of workers and supporters in some 130 cities in December. The growing movement earned national as well as local news coverage.

Less visible, but deeper, is the emergence of new forms of worker organizing, taking place largely outside of traditional unions and the national labor law, known generally as the workers’ center movement. Domestic workers, through the National Domestic Workers Union, have won passage of laws giving them new labor protections in California and New York. Tomato pickers in Florida, under the banner of the Coalition of Immokalee Workers, have won higher wages by building consumer pressure against the supermarkets and restaurant chains that buy the crops they pick. Immigrant and low-wage workers around the country, at workers’ centers that are part of the National Day Laborers Organizing Network, have resisted wage theft and won basic protections in day labor and construction. The examples go on and are analogous to the emergence of the labor movement in the late 19th and early 20th centuries.

The long-simmering pressure for raising the minimum wage is now becoming a national political force, with Democrats embracing the issue. The passage of a $15 minimum wage in Sea-Tac, outside of Seattle, will be a harbinger of more local actions to define a minimum wage in ways that make sense for people’s lives, not some political calculation about what’s possible.

In New York City, City Council Speaker Christine Quinn’s reluctance to support paid sick days, siding with the business community, destroyed her support among the progressive base, paving the way for the election of Bill de Blasio, who rose both on his progressive platform and as the result of a decades-long base-building project in the city. These contests will continue to escalate, as we’ve seen in Philadelphia, where a Democratic mayor has twice vetoed a paid sick day ordinance approved by the City Council. As they do, Democrats who take the Quinn route will find themselves on the sidelines with her.

Cultural and demographic trends are encouraging, too. While the progressive politics of the growing numbers of the young, single women, and Latinos have garnered notice, another hopeful trend is that among non-college-educated whites, one of the most conservative groups in the country, the young are much more progressive than their older counterparts. Pope Francis has become an instant hero not just by easing back on his church’s focus on sex, but by directly challenging trickle-down economics.

In all this, history will look at President Obama as a transitional figure. He has pledged to make income inequality the defining issue of the day, but he still chooses a low-wage Amazon warehouse as a venue to address the issue. He still seeks to reconcile the destruction of the middle class with the rise of Wall Street.

Wall Street and K Street and the U.S. Chamber of Commerce, all greasing the system while stoking resentment of “the takers” and people of color, in a nation with a deep “it’s up to me and my family alone” streak, remain huge obstacles to building an America that works for all. The change we are making will take time.

What gives me hope is that, for all its flaws, we still live in a nation where popular will can make change. And we have a history of creating change from below and then electing leaders who, like FDR, drilled into the deep well of hope that has given life to the best of America, from the Revolution, through the Civil War, the Progressive era, the New Deal, the Civil Rights Movement, and the Great Society.

Earlier this week, on the last day of 2013, I called up Mike Konczal and asked him to reflect on Edsall’s dark conclusion. Here’s what he told me: “I’m more optimistic than I was when I wrote that piece two years ago. People are agitating, building new infrastructure. Issues like the minimum wage are gaining prominence. We’re seeing mobilizing among non-traditional workers like day-care workers.”

It is up to us to make history. Let’s get to work in 2014. 

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.

 

2014 banner image via Shutterstock.com

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Rortybomb's Best of 2013

Dec 31, 2013Mike Konczal

2013. The year we won the argument but lost the war. It’s better than losing both the arguments and the war, I suppose.

2013 brought us a fiscal deficit that closed far too fast, NGDP growth and inflation falling compared to previous years, and unemployment completely falling off the political radar at the same moment the argument that the deficit was a worry collapsed. Before there were elaborate arguments about how the unemployed were this or that, or uncertainty was causing the one thing and the other. Now it's just quiet out there, yet the economy remains below potential. The collapse of the counter-Keynesian position didn't revitalize a position of aggressive action; it just left a void.

But rortybomb enterprises still marches forward. Here are the top posts from this blog for 2013:

1-2) My initial writeup of the work of Thomas Herndon, Michael Ash and Robert Pollin's critical dismantling of the Reinhart and Rogoff argument for austerity crashed this website shortly after it went up. That, and the follow-up from Arin Dube arguing that the causation was certainly backwards, are two of the most read things I’ve been involved with, and I’m honored to have played a role in dismantling this argument. A nice reminder that these things matter and blogs matter too; perhaps some people in Europe aren't being pummeled into dust as a result of this place.

3) I wrote a piece taking apart what kind of problem the ACA botched roll-out is for (neo)liberalism, that got people aruging about what kinds of social insurance we want out there.

4) I discussed the minimum wage, which I'll be doing much more of in 2014, throwing down the argument that it forms an important complement to various tax-based income support measures like the EITC.

5) I also wrote about Samuel Freeman’s argument that We Already Tried Libertarianism - It Was Called Feudalism. The term feudalism was chosen to be provocative, but the real concept is that it is anti-liberal in the traditional sense, and feeds on something darker, more pre-modern, than most people give it credit for.

Wonkblog: This year I wanted to write more regular columns at other venues, and was pretty successful at that goal. I contributed a weekly column to the Washington Post's Wonkblog. My favorites, in case you missed them the first time around:

The arguments surrounding the Universal Basic Income. (I received several notes from people happy to see Gøsta Esping-Andersen name-dropped in the Washington Post.) Creating a theory of the state that went into the shutdown. What we get wrong when we describe the financial crisis. Bernanke versus austerity. The idea of public problems. Is a democratic surveillance state possible? Defending the 30 year mortgage and the Volcker Rule. We are teaching economics backwards. And an interview with Shelia Bair that was mentioned in the House by people trying, successfully, to rally House Democrats against dismantling Section 716 of Dodd-Frank.

In Other News: I also started writing some columns for The New Republic and Al-Jazeera America at the end of the year, which I'll continue into 2014. I also wrote a review of Phillip Mirowski's latest book for the New Inquiry, meaning I've completed the hat-trick of writing for TNI, Jacobin and Dissent in the past year and a half. I also co-edited a big report on the future of financial reform which I’m very proud of, and will continue to build out next year. And Thomas Edsall wrote an excellent overview of the arguments we've built here at rortybomb for the New York Times.

Here’s to a good 2014. There's some exciting stuff already in the works.

Previous editions: 2012, 2011

Follow or contact the Rortybomb blog:

  

 

2013. The year we won the argument but lost the war. It’s better than losing both the arguments and the war, I suppose.

2013 brought us a fiscal deficit that closed far too fast, NGDP growth and inflation falling compared to previous years, and unemployment completely falling off the political radar at the same moment the argument that the deficit was a worry collapsed. Before there were elaborate arguments about how the unemployed were this or that, or uncertainty was causing the one thing and the other. Now it's just quiet out there, yet the economy remains below potential. The collapse of the counter-Keynesian position didn't revitalize a position of aggressive action; it just left a void.

But rortybomb enterprises still marches forward. Here are the top posts from this blog for 2013:

1-2) My initial writeup of the work of Thomas Herndon, Michael Ash and Robert Pollin's critical dismantling of the Reinhart and Rogoff argument for austerity crashed this website shortly after it went up. That, and the follow-up from Arin Dube arguing that the causation was certainly backwards, are two of the most read things I’ve been involved with, and I’m honored to have played a role in dismantling this argument. A nice reminder that these things matter and blogs matter too; perhaps some people in Europe aren't being pummeled into dust as a result of this place.

3) I wrote a piece taking apart what kind of problem the ACA botched roll-out is for (neo)liberalism, that got people aruging about what kinds of social insurance we want out there.

4) I discussed the minimum wage, which I'll be doing much more of in 2014, throwing down the argument that it forms an important complement to various tax-based income support measures like the EITC.

5) I also wrote about Samuel Freeman’s argument that We Already Tried Libertarianism - It Was Called Feudalism. The term feudalism was chosen to be provocative, but the real concept is that it is anti-liberal in the traditional sense, and feeds on something darker, more pre-modern, than most people give it credit for.

Wonkblog: This year I wanted to write more regular columns at other venues, and was pretty successful at that goal. I contributed a weekly column to the Washington Post's Wonkblog. My favorites, in case you missed them the first time around:

The arguments surrounding the Universal Basic Income. (I received several notes from people happy to see Gøsta Esping-Andersen name-dropped in the Washington Post.) Creating a theory of the state that went into the shutdown. What we get wrong when we describe the financial crisis. Bernanke versus austerity. The idea of public problems. Is a democratic surveillance state possible? Defending the 30 year mortgage and the Volcker Rule. We are teaching economics backwards. And an interview with Shelia Bair that was mentioned in the House by people trying, successfully, to rally House Democrats against dismantling Section 716 of Dodd-Frank.

In Other News: I also started writing some columns for The New Republic and Al-Jazeera America at the end of the year, which I'll continue into 2014. I also wrote a review of Phillip Mirowski's latest book for the New Inquiry, meaning I've completed the hat-trick of writing for TNI, Jacobin and Dissent in the past year and a half. I also co-edited a big report on the future of financial reform which I’m very proud of, and will continue to build out next year. And Thomas Edsall wrote an excellent overview of the arguments we've built here at rortybomb for the New York Times.

Here’s to a good 2014. There's some exciting stuff already in the works.

Previous editions: 2012, 2011

Follow or contact the Rortybomb blog:

  

 

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Progressivism in America: Are We Opening a New Chapter in Our Book of Self-Government?

Nov 7, 2013David B. Woolner

As Americans reject the extreme right wing at the polls, FDR's vision of self-government may be on the rise again. Note: On Nov. 8-9, David Woolner and other leading thinkers will explore the past, present, and future of progressivism at a conference hosted by the Roosevelt Institute and the Clinton Institute for American Studies at University College Dublin. Click here for details and livestream.

As Americans reject the extreme right wing at the polls, FDR's vision of self-government may be on the rise again. Note: On Nov. 8-9, David Woolner and other leading thinkers will explore the past, present, and future of progressivism at a conference hosted by the Roosevelt Institute and the Clinton Institute for American Studies at University College Dublin. Click here for details and livestream.

The results of this week’s elections have led to a good deal of speculation in the press about the repudiation of the hard right among the American electorate. Democrat Terry McAuliffe’s victory over Tea Party-backed Ken Cuccinelli in the Virginia gubernatorial race and Republican Governor Chris Christie’s impressive reelection win in heavily Democratic New Jersey have both been interpreted as evidence of the broader appeal of moderates in both parties. If true, this would be a welcome development, particularly on the Republican side of the ledger, where the obstructionist winner-take-all attitude of the extreme right has rendered the United States virtually ungovernable and nearly brought the country to ruin on two occasions within the past two years.

President Obama and other political leaders on both sides have frequently cited the economic damage that this “crisis governing” has wrought to our economy. But equally significant—particularly for those of us who favor more activist social and economic policies—is the damage done to government itself, and by extension, to our democracy.

Indeed, the American people’s faith in government, especially Congress, is at an all-time low. Of all the issues confronting liberals or progressives today it is this issue, faith in government, that is perhaps the most important. For without the support of the broad electorate it will be impossible for Congress and the executive to move forward on a whole range of issues.

Eighty years ago, in the midst of an even worse economic crisis, Franklin Roosevelt won the support of the American people by asking them “to find through government the instrument of our united purpose to solve for the individual the ever-rising problems of a complex civilization.” Moreover, he insisted that the failed non-governmental attempts to meet the crisis brought on by the financial collapse of 1929-1932 left the American people “baffled and bewildered,” without the means to fashion “practical controls over blind economic forces and blindly selfish men.”

But in the wake of the many programs that Congress and the president put in place to meet the crisis from 1933 on, the people began to sense the truth “that democratic government has innate capacity to protect its people against disasters once considered inevitable, to solve problems once considered unsolvable. We would not admit”, he continued, “that we could not find a way to master economic epidemics just as, after centuries of fatalistic suffering, we had found a way to master epidemics of disease.”

In making this argument, FDR insisted that the American people were not discovering a wholly new truth, but were simply “writing a new chapter in our book of self-government.”

Our history, then, tells us that it is possible for us to meet the challenges before us—but only if we are willing, as FDR advised, “to find through government the instrument of our united purpose."

On November 8-9, the Roosevelt Institute and the Clinton Institute for American Studies at University College Dublin will hold a major international conference entitled Progressivism in America: Past, Present and Future. Featuring such noted figures as Nobel Laureate and Roosevelt Institute Chief Economist Joseph Stiglitz, journalists like E.J. Dionne and Jonathan Alter, and historians such as Alan Brinkley and Ellen Chesler, the conference seeks to address today’s policy challenges with solutions grounded in and inspired by the legacy of Franklin and Eleanor Roosevelt—including the all-important realization, as FDR remarked years ago—that “government is competent when all who compose it work as trustees for the whole people.” This event will be livestreamed. Click here for more details.

David B. Woolner is a Senior Fellow and Hyde Park Resident Historian for the Roosevelt Institute. 

 

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Daily Digest - November 4: You Can Keep It, Unless Your Insurance is No Good

Nov 4, 2013Rachel Goldfarb

Click here to receive the Daily Digest via email.

Aides Debated Obama Health-Care Coverage Promise (WSJ)

Click here to receive the Daily Digest via email.

Aides Debated Obama Health-Care Coverage Promise (WSJ)

Colleen McCain Nelson, Peter Nicholas, and Carol E. Lee speak to Roosevelt Institute Senior Fellow Richard Kirsch about the President's assurance that people who liked their insurance would get to keep it. He says adding an asterisk for good insurance wasn't practical.

The Tea Party’s Assault on Workers (WaPo)

Roosevelt Institute Fellow Mike Konczal writes that states controlled by the GOP aren't just taking action against public sector workers. Coordinated legislation across these states is harming private sector workers and limiting local labor protections, too.

Absolute 'credibility issue' for Obama (The Kudlow Report)

Roosevelt Institute Fellow Dorian Warren appears on CNBC to discuss how the Healthcare.Gov rollout has harmed the Affordable Care Act and the President. He points out that 97% of Americans are unaffected by the website, which limits the potential damage.

Walmart Is Trying to Block Workers' Disability Benefits (MoJo)

Erika Eichelberger reports on a case before the Supreme Court which could make more difficult for all workers to obtain disability benefits. Walmart is trying to argue that appeals must occur within three years of filing a disability claim - regardless of how long that decision takes.

Burns Explores Roosevelt Legacy in New Documentary; Screening at Ga. Home of FDR (WaPo)

The Associated Press reports on an early screening of part of his new documentary on the Roosevelt family. Burns attempts to get beyond "treacly and superficial" stories to the real history and legacies of Theodore, Franklin, and Eleanor Roosevelt.

New on Next New Deal

The Origins of "If You Like Your Health Insurance, You Can Keep It"

Roosevelt Institute Senior Fellow Richard Kirsch explains why the President's leading message on health care was necessary. A more nuanced explanation would have allowed Republican fear-mongering to kill reform.

Federal Court Decision Doesn't Just Limit Abortion: It Creates a Crisis for Women's Health Care in Texas

Roosevelt Institute Fellow Andrea Flynn writes on the Fifth Circuit decision that has shut down numerous women's health clinics across Texas. The state's new abortion laws aren't just limiting access to a legal medical procedure - they're limiting access to all health care.

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