Why Obama’s New Immigration Policy is Good for the Economy

Jun 21, 2012Tim Price

Protecting undocumented workers doesn't mean they'll "steal" American jobs. Quite the opposite.

Protecting undocumented workers doesn't mean they'll "steal" American jobs. Quite the opposite.

Last Friday, the Obama administration announced that it would halt the deportation of young undocumented immigrants who would qualify for the DREAM Act and grant them work permits. The usual suspects leaped into action with shouts of “amnesty!” and charges that President Obama was once again selling out his country to serve his cosmopolitan principles. One reporter from the right-wing Daily Caller was so irate that he started heckling Obama during the statement announcing the new policy, asking whether it was “good for the American people.” But this move will in fact benefit Americans, and anyone concerned about America’s workers and the health of its economy should be pushing the administration and Congress to go even farther.

In the ongoing battle between the 1 percent and the 99 percent, undocumented immigrants undoubtedly fall into the latter category. According to Pew research, 62 percent of undocumented workers are employed in construction, hospitality, manufacturing, or wholesale and retail trade, and “in specific occupations like cooking, painting, washing cars, packaging by hand and installation of carpets and floors, they may make up 20 percent or more” of the total workforce. Although the same study finds that many of these workers make at least minimum wage, the Urban Institute reports, “About two-thirds of undocumented workers earn less than twice the minimum wage, compared with only one-third of all workers.” Moreover, research from the Dallas Fed notes that although they are covered by minimum wage laws, “undocumented workers paid less than the minimum wage are probably unlikely to seek legal redress for fear of revealing their undocumented status.”

In short, these workers perform lousy jobs for lousy pay, with little bargaining power, limited legal recourse if they’re mistreated by their employers, and no safety net to catch them if they get sick or lose their jobs. Dirt cheap, easily exploited, and readily disposable, they represent the model American worker for elites who rail against organized labor, social programs, and business regulations.

Bringing undocumented immigrants out of the shadows and acknowledging them as full and active participants in the workforce is essential, not just to improve their own economic standing but to increase economic justice for all workers. Conservatives often cast this as an us-versus-them conflict, warning that undocumented workers are out to “steal” our jobs and that granting them legal status will only create more competition for low-income Americans. But they're already here whether we choose to acknowledge them or not, and as Cristina Jimenez writes at The American Prospect (h/t Travis Waldron), “As long as a cheap, compliant pool of undocumented labor is available, employers have every reason to take advantage of the situation, keeping wages as low as possible.” No one’s out picking fruit under the hot California sun because of the great dental benefits; they’re doing what they need to get by, and their employers have them over a barrel. To put it another way, Terence O’Sullivan of the Laborers’ International Union of North America says, “Workers don’t depress wages. Unscrupulous employers do.”

The alternative to granting undocumented workers the legal protection they need to combat this exploitation is mass deportation, but rounding up and expelling 11 million people at a cost of $23,480 a head would be both inhumane and totally unaffordable. On the other hand, allowing them to stay and granting them legal status would actually help to reduce the deficit. According to a report from the National Council of La Raza, undocumented workers already contribute about $8.5 billion into Social Security and Medicare each year in addition to paying sales and property taxes. Far from being freeloaders, they pay $80,000 more in taxes per capita during their working lives than they take in from government services. But even if some of these workers were to achieve legal status through the DREAM Act and begin receiving the full benefits they deserve, the CBO and the Joint Committee on Taxation estimate that factors including their newly reportable income and decreased Homeland Security costs would generate $1.7 billion in new revenue and reduce the deficit by $2.2 billion over the next 10 years. The question of “Which do I loathe more, deficits or immigrants?” may represent a real Sophie’s Choice for some on the right, but it’s clear that deficit hawkery is incompatible with opposition to immigration reform.

Even if you’re not one of those people who wakes up in a cold sweat thinking about the debt-to-GDP ratio, there’s reason to believe the American economy has holes these undocumented immigrants could fill. (Not literally, though they do that too.) As President Obama has emphasized, the U.S. is falling behind other developed countries in college completion rates, which could soon lead to a shortfall in high-skilled workers. Luckily for us, among the undocumented immigrant population there are millions of young men and women who grew up in America, identify as American, and want to go to college and pursue their careers here. We just need to stop giving them reasons to be afraid to do so.

The DREAM Act, if it were ever passed, would give undocumented immigrants who arrived in the U.S. before age 16 a path to citizenship if they meet certain criteria, including the completion of a college degree or military service. It’s been introduced several times in Congress (originally by Republican Orrin Hatch) but blocked by the GOP on the grounds that it would grant amnesty to those who entered the country illegally – an idea so radical only a bleeding heart liberal like Ronald Reagan could support it. President Obama’s new plan doesn’t even go that far. It will allow some undocumented immigrants to work here legally, but it provides no clear path to citizenship or the rights and privileges that come with it. They won’t be able to vote, for instance, although taxation without representation has been something of a sore spot in American history.

As the president himself admitted in his Rose Garden address on Friday, this new policy is only “a temporary stopgap measure” until Congress can pass a comprehensive immigration reform plan. And while the politics of setting the age limit for the policy at 30 are clear, since the “crime” of immigrating here as children is harder to hold against them, it’s cold comfort for the millions of older undocumented workers who need and deserve some relief. But it’s still an important step forward, and not just on the moral grounds that, as the president stated, “We are a better nation than one that expels innocent young kids.”

Instead of blaming undocumented workers for taking American jobs (and casually referring to them as “illegal aliens,” which criminalizes their existence and makes them sound like something that’s going to abduct and probe us in the middle of the night), we should recognize them as victims of the same exploitative system that Occupy protesters have been grappling with since last fall. Is giving legal recognition to undocumented workers good for the American people? It’s a step toward acknowledging that there’s no such thing as a second-class citizen and that all working men and women deserve fair compensation. What could be more American than that?

Tim Price is Deputy Editor of Next New Deal.

Immigration services image via Shutterstock.com.



 

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A Note on Free Market Fairness: Is "Economic Liberty" Incoherent?

Jun 20, 2012Mike Konczal

There's a fantastic symposium on the book Free Market Fairness going on over at the Bleeding Heart Libertarian website. Make sure to check out Sam Freeman and Elizabeth Anderson, as well as Tomasi's replies to both.

There's a fantastic symposium on the book Free Market Fairness going on over at the Bleeding Heart Libertarian website. Make sure to check out Sam Freeman and Elizabeth Anderson, as well as Tomasi's replies to both. I'm going to add my thoughts on reading the book; note that I'm an amateur when it comes to many of these political theory debates but something strikes me as missing.

One of the core parts of Free Market Fairness' theory of "market democracy" is enshrining economic liberty at the level of basic liberties protected by the constitution, like free speech, the right to a trial or political participation.

In Rawls' formulation, it means that economic liberties would be protected by the first principle of justice. This is the principle that each "person has an equal claim to a fully adequate scheme of equal basic rights and liberties, which scheme is compatible with the same scheme for all." These basic liberties are “inalienable,” and “any undertakings to waive or to infringe them are void ab initio [to be treated as invalid from the outset].” Citizens cannot bargain or trade their basic liberties away.

Many on the left point out how economic liberty isn't true liberty unless it is a fair value liberty, or a liberty that isn't just formally equal but also is substantively equal. To see examples using Rawls' framework, political equality is of the substantive variety, as it matters whether you can actually vote and participate, but religion is only formally equal, as you don't have a right to an expensive church for your personal, elaborate religious ceremonies. The left says economic liberty isn't really liberty unless there's substantive equal ability to participate in the economy.

I'm all for that critique as far as it goes, but I think it is important to go a step further and argue that formulating economic liberty as a basic liberty is, practically speaking, incoherent.

The Department of Stabilization

Rawls described a stabilization branch of the state in Theory of Justice, tasked with bringing about full employment. In practice a lot of our economic debates are focused on what to do about mass unemployment in this crisis.  Let's do a quick map of economic agents in our current Great Recession and how the downturn has impacted them:

There are workers, many of whom are unemployment, and they have sluggish wage growth and low quit rates. Incumbent managers and owners are experiencing big profits and large bargaining power over their workforce. Capital owners have benefitted from disinflationary trends. Entrepreneurs find it difficult to start new businesses amidst mass unemployment. The government could lean against all these trends by doing stimulus, but taxpayers would be on the line if it didn't work out.

Now here's what I mean by incoherent: treating economic issues as a basic liberty tells us nothing about how to address stabilization one way or the other and substantially confuses our intuitions about how to approach the problem - which is one of tradeoffs. The first principle would only allows certain breaches of inalienable economic liberty in order to make the most extensive set of liberties, compatible with similar liberty for others. Now I understand that the regulation of basic liberties (like free speech) is problematic for Rawls, but it dissolves into nothingness here under market democracy.

Basic liberties can't guide us, because liberty for one comes at the expense of liberty for others. Which economic liberties are we to preserve? The one of the unemployed to work, the entrepreneur to have customers, bosses to their profits or rentiers to their capital income? All of these liberties are part of the economic realities of each agent, and these are fundamentally in tension with each other. There's no way to view them as "compatible" with each other as a sufficient condition to animate decision-making.

The only way to address them as a matter of policy is to balance them against each other according to some principle. Full employment? Price stability? Deflation and the Gold Standard? Bringing in the concept of liberty prevents the ability to discuss these in terms of tradeoffs, as the whole point of basic liberties is that groups of citizens can't have their basic liberties traded off each other.

One could say that the only system is thus one of no stabilization. But this is a policy choice, no different than emphasizing full employment at all costs. There's nothing about mass unemployment that must contain more inalienable liberty than full employment - it is just a different set of actors who benefit. And this would look suspiciously like bringing in one set of arguments for how the economy should work and whom it should work for through the courts, rather than democratically through argument in the public sphere.

This incoherence exists more broadly. For instance, uses of basic liberties aren't up for being traded. I can't sell you my vote, and I can't ask the government to enforce a contract where you've sold me your right to a fair trial. Yet economic transactions are all about trading off economic rights. When I sell you my labor I'm accepting serious limitations on what I can do with my labor - it now belongs to you.

Thus economic liberty is often, at any moment, zero-sum: a more extensive liberty for the boss comes at limiting the liberty of the worker. The same for the creditor and the debtor. One of the first big "liberty of contract" cases was Pennsylvania's state court's 1886 Godcharles v. Wigeman, which struck down a state act prohibiting payment of wages in scrip. Here the benefit of the boss (and the company) came at the expense of the worker in the form of the means of payment. This may be a pareto-optimal trade when it happens - market democracy would presume that it must be by definition of it happening - but assuming I'm giving away a liberty for my ultimate long-term benefit, as well as the benefit of the economy as a whole, is way off the reservation of how we consider the other basic liberties.

The best way to conceptualizing it is within a framework of justifying inequalities, which is what Rawls' second principle tries to do. The second principle's difference principle could be the wrong approach - we might want to maximize growth regardless of its impact on the poor - but it is the right spot on the lexical framework to approach such a question. Pushing these questions into the highest lexical position leaves us with nothing coherent to say on the matters, it disrupts our normal thinking about liberty and stops our ability to see these issues as what they fundamentally are, which is balancing private forms of power and providing rules that bend them towards the greater good of the economy. Rules that are, I'd argue, best constructed through democratic argument; but rules that are in no way clarified by referring to more abstract notions of liberty.

 

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Mike Konczal and Sarah Leonard on the Myth of American Meritocracy

Jun 11, 2012

On the latest episode of "Fireside Chats," Roosevelt Institute Fellow Mike Konczal brings in Sarah Leonard, editor at Dissent and The New Inquiry, to discuss the ways that student debt and unpaid internships have completely skewed the labor market.

On the latest episode of "Fireside Chats," Roosevelt Institute Fellow Mike Konczal brings in Sarah Leonard, editor at Dissent and The New Inquiry, to discuss the ways that student debt and unpaid internships have completely skewed the labor market. Mike used to think of internships as an equal opportunity mechanism, but then realized "you have to be able to feed yourself, you have to be able to survive," something that's hard to pull off when you're deep in debt and not making any money.

As Sarah bluntly puts it, "American meritocracy has always been a myth," but now these two forces have conspired even more to allow "people who make it to the top" to consolidate power there and "consolidate it for their children." Not only does a young person need money to take an unpaid position, but those who go into debt to get through college have an even harder time doing so if they need to work to pay off those loans. "Internships are absolutely a reinforcer of privilege," she concludes.

Mike compares student debt to the indenture system that brought Europeans to America's shores: it was set up "to solve an economic problem, a problem of travel," and now we have a similar problem in which we need to "get people who have significant talents to grow the economy to the spaces where they have their talents fully developed and they’re capable of exercising those talents." The biggest question? "How do we pay for it?" In other words, how do we make it affordable for everyone to have people get the education they need to best contribute to the economy?

Compounding this, Sarah notes that the language around student debt is about "investing in yourself," but in reality the need to take on massive amounts of debt to get an education isn't a way to open up opportunities at all. "It restricts your freedom after college," she says.

Watch the full segment below for their discussion of precarious work, the future of organized labor, and "Sex in the City" feminism:

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George H.W. Bush Was Not a Civil Rights Hero

May 24, 2012Mark Schmitt

In a cover story at National Review, Kevin D. Williamson attempts to rewrite the history of race and politics to tell a story in which Republicans not only were, but always have been, the party of civil rights and racial reconciliation, even in the South, against Democratic resistance.

In a cover story at National Review, Kevin D. Williamson attempts to rewrite the history of race and politics to tell a story in which Republicans not only were, but always have been, the party of civil rights and racial reconciliation, even in the South, against Democratic resistance.

As I pointed out in a recent review of a book about moderates in the Republican Party, there’s no point in denying that Republicans supported the Civil Rights Act of 1964 in greater numbers than Democrats and that most of the members of the Southern Caucus were Democrats. But it’s also very tough to make the case that those Southern Democrats have any continuity with today’s Democrats when most of them either became Republicans themselves (like former Senator Trent Lott) or were succeeded by very conservative Republicans who rely entirely on the same white votes. Political scientist Jonathan Bernstein has offered just one of the thorough rebuttals to Williamson.

Williamson’s alternative history mostly works through distortion and omission rather than outright falsehood – overlooking, for example, the entire 38 years that South Carolina Senator Strom Thurmond spent as a Republican, or all the non-Southern, pro-Civil Rights Democrats. Jonathan Chait notes that “as his one data point, Williamson cites the victory of George Bush in Texas over a Democrat who opposed the 1964 Civil Rights Act.”

Chait points out that Bush also opposed the 1964 Act, but there’s a bigger error in Williamson’s one data point. Williamson writes, “Segregationist Democrats were thrown out by southern voters in favor of civil-rights Republicans. One of the loudest Democratic segregationists in the House was Texas’s John Dowdy, a bitter and buffoonish opponent of the 1964 reforms... Dowdy was thrown out in 1966 in favor of a Republican with a very respectable record on civil rights, a little-known figure by the name of George H. W. Bush."

In fact, Dowdy wasn’t “thrown out” by anyone. He served in the House uninterrupted until a scandal in 1973. Bush’s opponent was a local prosecutor named Frank Briscoe.

Bush won an open seat, created by a massive Texas redistricting in 1966, which created three new congressional districts in the Houston area. And that’s important, because the redistricting was itself a civil rights move. Previously, Texas districts had been disproportionately weighted toward the rural (and white) population, and congressional districts varied in population from just 400,000 to almost a million people with a single representative. The rapidly growing African-American and Hispanic populations in the cities were sharply unrepresented. In a 1964 case, Wesberry v. Sanders, the Supreme Court applied the one-person, one-vote principle to congressional districts, which forced the redistricting. In addition to creating Bush's affluent Republican district, that ruling created a state senate seat that was won by Barbara Jordan, the first African-American to serve in that body since Reconstruction, and a congressional district that Jordan won in 1972.

The elder Bush, it turns out, was not so much an advocate for civil rights as a secondary beneficiary of it. And with that, Williamson’s one data point crumbles along with the rest of his argument.

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Want to Improve America’s Education System? Desegregate It

May 24, 2012Bryce Covert

A solution for our poor educational ranking and huge achievement gap is staring us in the face.

A solution for our poor educational ranking and huge achievement gap is staring us in the face.

America’s educational system is pretty bad at serving its students. Even Mitt Romney thinks so. In a speech yesterday, the presidential candidate called education “the great challenge of our time” and “the civil-rights issue of our era,” pointing out that minority children get screwed the most. The numbers behind his sentiment are pretty stark: in the OECD’s report on educational achievement among 70 countries, the U.S. falls almost in the middle, ranking 24th in reading, 30th in science, and 32nd in math.

With numbers like those it would make sense for the country to try whatever it could to improve learning for our kids. But we’re throwing out one method that has proven to have clear advantages: desegregation.

In an op-ed over the weekend, David L. Kirp explained the research behind this idea. As he notes, “economists’ studies consistently conclude that African-American students who attended integrated schools fared better academically than those left behind in segregated schools.” Those children were more likely to graduate from high school and college. And it wasn’t a zero sum game in which white children fell backward as black children moved up. “Between 1970 and 1990, the black-white gap in educational attainment shrank — not because white youngsters did worse but because black youngsters did better,” he writes.

Yet the achievement gap has been yawning in recent years. As of 2007, white students were scoring an average of 26 points higher than black students in every subject. We may look to the fact that schools have become increasingly segregated. There’s purposeful re-segregation, as in the recent policy changes in North Carolina. One school district eliminated a busing program in 2002 and another is set to follow. Meanwhile, the Wake County school board struck down its program that integrated schools based on socioeconomic status. Or take the less deliberate example of New York City. While the public school population is as diverse as the city’s, about 650 of its 1,700 schools have populations that are 70 percent a single race, according to the New York Times’s analysis. More than half are at least 90 percent black and Hispanic.

So no time like the present to re-desegregate our school systems in order to raise educational achievement. If we want to work on how we stack up against other countries, we would do well to consider it as a strong option in our arsenal.

The effects can go beyond test scores. Kirp notes that the positive effects of desegregation stayed with children throughout their lives. One study showed that “black youths who spent five years in desegregated schools have earned 25 percent more than those who never had that opportunity." That’s good for the rest of the economy. And unlocking educational potential for those who don’t happen to be white will also boost it. In fact, a new paper says that as much as 20 percent of growth in American productivity over the past 50 years can be attributed to increased equality for black people and women. It makes sense: by letting a diverse array of people compete in the workforce, you’re more likely to find the most talented for the job.

Sometimes our educational failings can seem large, complicated, and impossible to solve. Many of them are. But the solution of going back to purposefully desegregating our schools is staring us in the face.

Bryce Covert is Editor of Next New Deal.

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The EEOC Stands Up for Transgendered Workers While Congress Stalls

Apr 30, 2012Tyler S. Bugg

genderless-icon-144The EEOC's decision to extend protections against discrimination to transgender workers is an important step toward social justice and a stronger economy.

genderless-icon-144The EEOC's decision to extend protections against discrimination to transgender workers is an important step toward social justice and a stronger economy.

Two months ago, I wrote that our country should pass the Employment Non-Discrimination Act (ENDA) and expedite the process of ending discrimination based on sexual orientation and gender identity in the workplace. This month, we’re one step closer. A groundbreaking ruling handed down from the Equal Employment Opportunity Commission (EEOC) on April 20 dictates that protections against gender identity discrimination are covered by Title VII of the 1964 Civil Rights Act and can be called upon in gender and sex discrimination complaints to the bureau and in subsequent lawsuits. This is a major leap forward for transgender Americans and for their job security.

The landmark change came as a response to the case of Mia Macy, a transgender woman and former Phoenix police officer who applied for and was tentatively accepted for a ballistics job -- until the employer conducted a background check. After obtaining information about Macy’s transition from a man to a woman, the employer allegedly (and untruthfully) informed Macy the offer was eliminated due to budget cuts and then promptly filled the position with another (not transgender) applicant. EEOC policy has been vague on exactly the types of cases are covered under its statutes, and are therefore under its legal jurisdiction, and detrimentally so. But under the new ruling, Macy’s filing of a complaint of gender discrimination with the EEOC can move forward to the next investigative steps.

The new ruling, however, has ramifications much larger than Macy’s case alone. It clarifies existing national policy and makes stronger what’s often been a too slowly evolving area of employment law. It sets into motion protections for potential employees from workplace discrimination regardless of their gender identification, expression, or status. The policy holds obvious significance for cutting away unnecessary pressures within the workplace environment, pressures that are both bad social policy and bad business policy.

Human Rights Watch’s “Corporate Equality Index” has striking evidence in support of the last point. Not only are employees who usually face discrimination finding more inclusive employment laws beneficial, so are employers. While employees experience higher confidence in their job searches and eventual careers, employers can access improved applicant pools. Benefits like more inclusive health plans and policies, gender-minority support and focus groups, and diversity councils are all additional assets that strengthen the commitment to productive and respectful employer-employee relations, guided by principles of fairness and equity. The economic outlook, in the long run, is the real winner.

The EEOC ruling will also have profound effects in curbing some disturbing trends. Data from the National Center for Transgender Equality (NCTE) shows that mistreatment at work is widespread. A disturbingly high 90 percent of transgender individuals reported feeling harassed or mistreated at work, and 47 percent reported being fired, not hired, or denied a promotion or salary increase as a result of their non-conforming gender status.

On top of this, the lack of protection against discrimination in the workplace has long had alarmingly adverse effects on gender-minority individuals elsewhere. The NCTE further reports that as transgender employees face workplace discrimination, their personal lives suffer as well. As a result of negative workplace environments, transgender individuals are four times more likely to be homeless, 70 percent more likely to abuse drugs and/or alcohol, and 85 percent more likely to be incarcerated.

The EEOC ruling is a vital first step with the potential to be a game changer in the job market. Its potential for setting a precedent for the passage of laws like the ENDA, one of the most stagnant pieces of legislation of the past two decades, is also promising. But it’s not the whole solution. While it's certainly a strong deterrent for employers with histories or ongoing incidents of gender discrimination, it’s only a mechanism as strong as we make it. It shouldn’t only be a reactive method that penalizes discrimination by threatening lawsuits, legal fees, and unwanted government intervention. Rather, it should foster a culture of prevention aimed at normalizing acceptance of all workers.

Tyler S. Bugg is a member of the Roosevelt Institute | Campus Network and an Organizing Fellow with Obama for America studying international affairs and human geography at the University of Georgia.

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Dorian Warren: Criminals, Conservatives, and Oligarchs Are Deepening Inequality

Apr 27, 2012

This week, Roosevelt Institute Fellow Dorian Warren joined a panel on America's growing inequality crisis hosted by The Century Foundation and featuring TCF's Greg Anrig, Daniel Alpert, and Robert Hockett along with Timothy Noah, author of The Great Divergence. In the video below, Dorian lay

This week, Roosevelt Institute Fellow Dorian Warren joined a panel on America's growing inequality crisis hosted by The Century Foundation and featuring TCF's Greg Anrig, Daniel Alpert, and Robert Hockett along with Timothy Noah, author of The Great Divergence. In the video below, Dorian lays out three points that need to be included in any discussion of what's causing inequality and how we can address it: lawless employers, race-based political polarization, and the rise of an American oligarchy.

On the first point, Dorian notes the recent Wal Mart bribery scandal and says that when you think of "the lawlessness of Wal Mart when it comes to unionization, I think that's a great example to think about the other ways in which employers have pretty flagrantly violated the law in the last 20 years or so. So when you think about minimum wage, when you think about health and safety, we're in a new environment, and activists who work on this call this 'wage theft.'" He highlights some shocking statistics from a 2009 study that shows how badly low-income workers have been ripped off by their employers and points out that there is a "basic principle of the social contract that when you work at a job you have an agreement with the employer for how much you're going to make... There is a pretty systematic violation of that contract, and that explains at least part of the wage stagnation that we've seen in the low-wage service sector specifically." While updating and modernizing labor laws is important, "monitoring and enforcement of existing wage and hour laws are really important."

Where race is concerned, Dorian argues that while it doesn't explain the rise of inequality by itself, "there is a story where race does play a role, and it's a political story." He points out that "for 80 percent of our country's history, the majority of Americans weren't classified as citizens," and that Lyndon Johnson's signing of the Civli Rights Act caused an exodus of white southerners from the Democratic Party to the GOP. He says that "there is a difference between Republican administrations and Democratic administrations, but how you get to a Republic administration has to be part of that story, and that's very much about race and the response of southern whites to greater inclusion into American democracy." This racial backlash in turn helps to shape the policies that further inequality.

Finally, Dorian says that it's difficult to find solutions to the problem of inequality, as even the best policy solutions may not be politically viable. Citing political scientist Jeffrey Winters, he asks, "How do we make sense of the fact that we live in both a democracy and an oligarchy at the same time?" Wealth has become highlighy concentrated in the U.S. while also granting the wealthy a disproportionate level of political influence and a number of methods to safeguard their wealth and prevent redistribution. He notes that "the expectation of democracies is that non-rich people would outnumber rich people and therefore demand through their vote the one thing that makes everybody equal, greater redistribution." He concludes with the toughest question of all: "From the 1960s to the present, when we've expanded our democracy, how is it the case that we've also seen more redistribution but actually less and greater inequality?"

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Dorian Warren: Criminals, Conservatives, and Oligarchs Are Deepening Inequality

Apr 27, 2012

This week, Roosevelt Institute Fellow Dorian Warren joined a panel on America's growing inequality crisis 

This week, Roosevelt Institute Fellow Dorian Warren joined a panel on America's growing inequality crisis hosted by The Century Foundation and featuring TCF's Greg Anrig, Daniel Alpert, and Robert Hockett along with Timothy Noah, author of The Great Divergence. In the video below, Dorian lays out three points that need to be included in any discussion of what's causing inequality and how we can address it: lawless employers, race-based political polarization, and the rise of an American oligarchy.

On the first point, Dorian notes the recent Wal Mart bribery scandal and says that when you think of "the lawlessness of Wal Mart when it comes to unionization, I think that's a great example to think about the other ways in which employers have pretty flagrantly violated the law in the last 20 years or so. So when you think about minimum wage, when you think about health and safety, we're in a new environment, and activists who work on this call this 'wage theft.'" He highlights some shocking statistics from a 2009 study that shows how badly low-income workers have been ripped off by their employers and points out that there is a "basic principle of the social contract that when you work at a job you have an agreement with the employer for how much you're going to make... There is a pretty systematic violation of that contract, and that explains at least part of the wage stagnation that we've seen in the low-wage service sector specifically." While updating and modernizing labor laws is important, "monitoring and enforcement of existing wage and hour laws are really important."

Where race is concerned, Dorian argues that while it doesn't explain the rise of inequality by itself, "there is a story where race does play a role, and it's a political story." He points out that "for 80 percent of our country's history, the majority of Americans weren't classified as citizens," and that Lyndon Johnson's signing of the Civli Rights Act caused an exodus of white southerners from the Democratic Party to the GOP. He says that "there is a difference between Republican administrations and Democratic administrations, but how you get to a Republic administration has to be part of that story, and that's very much about race and the response of southern whites to greater inclusion into American democracy." This racial backlash in turn helps to shape the policies that further inequality.

Finally, Dorian says that it's difficult to find solutions to the problem of inequality, as even the best policy solutions may not be politically viable. Citing political scientist Jeffrey Winters, he asks, "How do we make sense of the fact that we live in both a democracy and an oligarchy at the same time?" Wealth has become highlighy concentrated in the U.S. while also granting the wealthy a disproportionate level of political influence and a number of methods to safeguard their wealth and prevent redistribution. He notes that "the expectation of democracies is that non-rich people would outnumber rich people and therefore demand through their vote the one thing that makes everybody equal, greater redistribution." He concludes with the toughest question of all: "From the 1960s to the present, when we've expanded our democracy, how is it the case that we've also seen more redistribution but actually less and greater inequality?"

 

Image courtesy of Shutterstock.com.

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The "Buffett Should Volunteer to Pay More Taxes" Canard

Apr 25, 2012Mike Konczal

The Buffett Rule is all about fairness in tax law. So why do its opponents keep talking about charity?

The Buffett Rule is all about fairness in tax law. So why do its opponents keep talking about charity?

Adam Ozimek jumps in on the "should Warren Buffett just donate money to the government?" conversation here, with "Should people who want higher taxes donate to the government?" He builds off of Matt Zwolinski, who asks "if Buffett really believes that he ought to be paying more taxes, then what’s stopping him?" Will Wilkinson brings up that this requires us to discuss collective actions and "the rationality of complying with a rule that (1) you support, but (2) will only have its desired effect if general compliance with the rule is high, and (3) you suspect general compliance will not be high." All these discussions pivot off the idea that the government provides charity, and if Warren Buffett wants the government to provide more charity, why does he do his charity through private means?

Wilkinson has an important point, but they are all approaching the debate with the assumption that Warren Buffett wants the government to spend an additional dollar. I don't see Warren Buffett saying that, and it isn't even required for him to call for higher taxes on himself and similar earners to make his famous argument. The crucial comparsion in Buffett's discussion isn't Buffett's rates now versus the rates he'd pay in a social democratic country, but the rate that he pays versus the rate his secretary pays. Warren Buffett could want the government cut in half and for his tax rate to go up. He could want a government so small it could drown in a bathtub yet find it unfair that he pays a lower tax rate than his secretary.

This means the central discussion isn't about the government collecting more and providing more, but the two central principles of fairness in taxation: vertical equity – those with more pay more – and horizontal equity, where people who are the same should be taxed the same. (Whether these are necessarily two principles of equity or one is a debate for another day.) It isn't necessary for Buffett's argument that the government should do more, or even that it should do what it does now, so suggesting he donate to charity doesn't carry weight. His argument is that the way taxes are collected now violates general principles of equity and fairness.

Zwolinski argues that since people don't donate to the government, "(3)Therefore, they don't believe that giving money to government is a good way to help others... It is therefore (from 3) odd for people to press for increased rates of taxation on the grounds that increased taxes will allow the government to help people." But even if Warren Buffett didn't care about helping others and believed that the only purpose of government is to turn his property claims on his vast wealth into property rights, and provide the costly night watchman apparatus required to do so, he could believe that vertical equity in the taxation required to raise those funds is still a requirement of tax fairness.

(Indeed, why does Zwolinski use "charity" as an example? Why not private police? The United States has had more private security guards than public police officers for some time. If someone thinks there should be more police, why not donate that money to the government rather than hire a private guard? Would following his logic provide proof that most people are anarcho-capitalists who want privatized systems of policing and adjudication? Zwolinski might need to change his webpage if that's the case. It is likely other factors are in play.)

Unless you believe that United States taxation should be based on a head tax -- where everyone pays the same exact dollar amount regardless of wealth or income -- you probably believe in vertical equity. (As Jeremy Bentham said, "a capitation tax is bad; because a man has a head, it does not follow that he has anything else.") That could be proportionate taxation, progressive taxation, a kind of progressive taxation where wages up to the poverty line are tax-free with proporationate taxation on income above that, and more. We don't even have to assume progressive taxation for Buffett to say he should be taxed more -- his objection is that he pays a lower proportionate rate.

Beyond vertical equity, if someone made the same amount of money through labor that Buffett and Romney make through capital, the laborer would pay a much higher tax rate, violating our sense of horizontal equity. These are the crucial issues that the Buffett Rule is trying to address, issues that come even before what is the proper scope of government.

Mike Konczal is a Fellow at the Roosevelt Institute.

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Article on Mass Incarceration at Jacobin

Apr 25, 2012Mike Konczal

The Spring 2012 issue of Jacobin is now online.  It has a lot of great content in it; make sure to check out Megan Erickson's addition to the "unschooling" debate that goes back and forth in parts of the internet.

The Spring 2012 issue of Jacobin is now online.  It has a lot of great content in it; make sure to check out Megan Erickson's addition to the "unschooling" debate that goes back and forth in parts of the internet.

I have a piece - Against Law, For Order - on ideology, governmentality and "policy" in an era of mass incarceration.  It's about how criminal laws informs our markets and government policy.  Bits and pieces of it have appeared in this blog, but here it is in one place.  The piece ends up reviewing a lot of recent books on policing, with special attention to Bernard Harcourt's work on neoliberalism and policing, as well as Jonathan Simon's work on "governing through crime" - how policy is reworked to use the language and techniques of policing.  I hope you check it out!

I wrote it a while ago so I didn't get to reference two of the big events in policing and incarceration that happened recently, but I think they fit into the framework I try to build.  The killing of Trayvon Martin by George Zimmerman appears to be, in large part, about Zimmerman believing Martin didn't belong in the neighborhood he lived in.  Maintaining order, seperating insiders from outsiders, and who gets to make those calls and what consequences they have is a central part of the neoconservative vision of policing I outline.

Meanwhile the 5-4 Supreme Court decision in Florence v. Board of Chosen Freeholders of the County of Burlington held that "Jail strip searches do not require reasonable suspicion, at least so long as the arrestee is being admitted into the general jail population."  Reading Justice Kennedy's logic, it looks like that since people put into a prison population could be dangers to themselves, guards and other prisoners, the guards have the ability to institute whatever techniques they believe are necessary.  Kennedy looks uninterested or unwilling to second guess the prison system.  Which means that people within the criminal justice system exist in a sphere of total government control and competency, a way of thinking I link back to the neoliberal vision of governance.

Sadly I couldn't find a way to link in one of the more interesting pieces I've read recently, one I'm still grappling with, Kate Redburn's Hate on Me at New Inquiry.  It's about the GLBTQ groups - including The Sylvia Rivera Law Project, FIERCE, Queers for Economic Justice, the Peter Cicchino Youth Project, and the Audre Lorde Project - who oppose New York State's "Gender Expression Non-Discrimination Act," which "would make violence against gender-nonconforming people a hate crime."

This is governing through crime - the best way to react to the social problems of violence and hate aimed at the GLBTQ community is to increase the policing and incarceration of those who do the violence.  Mandatory minimums, which translates into higher guilty pleas, which translates to more bodies in jail.  These groups oppose this because the police themselves are part of the problems they face, not part of the solution.  As Redburn argues, "Hate crimes legislation not only doesn’t change institutional bias; it further empowers this broken system by increasing law enforcement’s ability to arrest and imprison."  I find the challenges posed here important to understand as we all try to find a way to have a governance project built outside the logic of mass incareceration.

 

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