Policy Shop

Policy as if people mattered

Would Raising the Minimum Wage Kill Jobs?

Flickr/mag3737
President Obama's proposal last night to raise the Federal Minimum Wage to $9 (from $7.25) is sure to rekindle the perennial debate about whether such an increase will stall hiring for low-skilled workers , or whether small businesses will be able to sustain their payrolls with higher wage requirements. The federal rate would increase in stages until 2015. After that, additional raises would be pegged to inflation. Administration officials believe this will increase pay for at least 15 million Americans , and possibly more, as those earning just over minimum wage would also likely see a bump. Many liberal groups like the National Employment Law Project praised the move. Spokeswoman Christine Owens told The New York Times “A higher minimum wage is key to getting the economy back on track for working people and the middle class." The White House further argued that the $1.75 increase in the minimum wage would be enough to offset nearly 10 to 20 percent of the increase in income...

The President's Call for Election Reform

Whitehouse.gov
President Obama’s State of the Union address included an important call to fix the long lines and other problems that plagued voters in 2012. The president was near the end of his speech when he brought up the waiting times that stretched as long as six hours in some places and led an estimated 200,000 Florida voters to give up and go home. He rightly cast the issue as one of protecting Americans’ most fundamental rights: When any Americans – no matter where they live or what their party – are denied that right simply because they can't wait for five, six, seven hours just to cast their ballot, we are betraying our ideals. That's why, tonight, I'm announcing a non-partisan commission to improve the voting experience in America. And I'm asking two long-time experts in the field, who've recently served as the top attorneys for my campaign and for Governor Romney's campaign, to lead it. We can fix this, and we will. The American people demand it. And so does our democracy. Kudos to the...

Disaster Preparedness Is Good for Democracy

Flickr/Anthony Quintano
The blizzard that pounded the Northeast on Friday was no Hurricane Sandy, but it has left thousands of people without power throughout the region. For some households, losing power may be no big deal. But if you're old or disabled, this can be a dangerous situation. The problem is that it's hard in most communities to know which residents may badly need help. After Sandy, hastily organized volunteers knocked on doors in buildings in Rockaway and other places to identify the old and frail. It's also hard, if you want to volunteer to help others in a disaster, to know where to go or what to do. In badly hit Hoboken, large numbers of volunteers were needed to help evacuate people from flooded parts of time. The city recruited these helpers, in part, by Twitter and posters around town. With major storms likely to increase, it's time to get more serious about better disaster planning. One obvious idea is to step up efforts to organize citizens to prepare for emergencies by joining...

Freedom For the Few

Flickr/Tobin B.
We should be done by now with the idea that a corporation is a single thing. Corporations contain a multitude of conflicting interests and are much more like miniature governments with their own governance structures and election systems than is commonly recognized. While these structures are far more hierarchical and undemocratic than we require of our public institutions, Americans should not be resigned that this is the best or the only way the private sector can be structured. The debate over corporate disclosure currently going on at the SEC exposes some important fissures within the modern American corporation. On the one hand, corporate managers and their allies have argued that corporations should be able to engage in political activities without having to disclose how much they spent or who that money went to. But there is a subtle slight-of-hand to this argument. It conflates the overall interests of the corporation with the desires of management and directors. What...

Biting the Hand that Feeds Them

Flickr/Fibonacci Blue
Paul Krugman noted on ABC's This Week yesterday that the GOP's problem is that its "base is old white people." This is largely true. Exit polls show that Mitt Romney won all voters 65 and older by 12 percentage points, and white older voters by 22 points. Barack Obama won all voters under 30 by 23 points, and nonwhite young voters by 36 points. Such numbers are a big problem for the GOP amid fast changing demographics, as we've heard often in recent months. But here's an interesting question raised by the same data: If the GOP leans so heavily on older white voters, then why is it leading the charge to cut entitlements for seniors? Politics is supposed to be about who gets what, but things often don't work that way. In 2011, The New York Times ran a fascinating chart about the percentage of personal income that comes from government benefits in different states. It showed that hardcore Republican states—where a lot of those older white conservative voters live—relied most heavily on...

Equifax Knows Quite a Lot about You

Equifax
Just when we imagined that credit-reporting firms couldn’t be more invasive and profiteering, NBC News breaks this story : The Equifax credit reporting agency, with the aid of thousands of human resource departments around the country, has assembled what may be the most powerful and thorough private database of Americans’ personal information ever created, containing 190 million employment and salary records covering more than one-third of U.S. adults. Based on data voluntarily provided by thousands of U.S. businesses and public employers (from local public schools to federal agencies) Equifax’s product, The Work Number , includes information many of us would prefer to keep private, from week-by-week paystubs to information on personal “health care providers”—perhaps including the name of your psychiatrist or gynecologist. For employers, The Work Number offers “an easy way to outsource employment verification of former workers” without having to deal with pesky phone calls whenever...

A New American "demos"?

.gov
Standing on the mall Monday among the great and diverse crowd who came to celebrate the second inauguration of the President, I reacted strongly to two aspects of the day. The first was to the feeling produced by the crowd, to the moment itself. The second was something else, something perfectly clear: a new American “ demos ” has arrived. The demos of today, on display on the mall, was remarkable—a sea of people, supremely diverse in race, in age, in income levels, but united in the joy of the moment and in an ongoing sense of possibility for the future. It was a demos that stands in the cold and in long lines, not just at the inauguration but on Election Day through the night to exercise their rights as citizens. This is a new demos that demands that its diversity be more than simply cosmetic , but reflected in public policies that are more broad-based, inclusive, and committed to equality than those who have come before. And that breadth was fully reflected in the President's...

Is a Democracy Trust Fund a Good Idea?

ceciliatkaczyk.com
Cecilia Tkaczyk’s victory is the latest sign that New Yorkers want a different campaign system and they want it now. Tkaczyk challenged a millionaire Assemblyman in a GOP-gerrymandered district and yet, despite a cash disadvantage and little name recognition, she managed to win by 19 votes. And, she managed to win based on her support for publicly financed elections. During the recount battle, she wrote , “If I do get sworn in, I’ll know my support for public financing is a central reason I won the job.” As my colleague Liz Kennedy wrote , New York State is particularly in need of public financing. New York has one of the highest contribution limits in the country and individuals and limited liability corporations can give as much as $60,800 to candidates for statewide office. Even that limit is suspect as a recent NYPIRG report found that hundreds of donors give more money than is allowed every year and candidates fail to disclose large contributions that are given close to Election...

Big Banks and Income Disparity

Flickr/ruanon
Nobel economist Joseph Stiglitz made some critically important observations in the Sunday New York Times . He pointed out that income disparity is a cause of the maddeningly slow recovery from the effects of the Great Recession, not merely a consequence of it. He drew parallels to the income disparity that predated the Great Depression. In my view he is correct, though there are persuasive opinions to the contrary. One key to reducing inequality it tackling structural elements of the financial system that contribute to the widening income gap. The economy needs to promote parity, and the financial system as it currently functions is an impediment. Income disparity is illustrated by the widely known Saez-Piketty graph that garnered so much attention a few years ago: This graph cries out to be compared with another that depicts wages and education in the financial sector compared with other sectors of the economy: The academics who compiled the data on financial sector wages and...

John Mackey and Corporate Responsibility

A year and a half ago, at the Iowa State Fair, Mitt Romney told a protester, "Corporations are people, my friend." This line, ferociously derided by Democrats and weakly defended by Republicans, will likely play a significant part in the historical lore of the most recent Presidential election. The line is, on a pretty basic level, nonsensical—x is not y—and imbues corporate behemoths with a far greater beneficence than they deserve. That said, it has acquired some resonance now as John Mackey, founder and CEO of Whole Foods, is essentially making an argument for Romney's position. While on tour for his tome, Conscious Capitalism , Mackey has done a spirited job of trying to put a human face on a brutally impersonal economic system. I'm not sure he succeeds. In Mackey's view, "conscious capitalism" creates value for "stakeholders," i.e., customers, employees, investors, the environment and so on. The stakeholders, which the company describes as "people who are interested and benefit...

The Endless and Ironic Attacks on the CFPB

Flickr/afagen
Anyone who has followed the creation and early life of the Consumer Financial Protection Bureau knows that conservatives in Congress have repeatedly tried to kill or weaken this agency using the power of the purse. Most recently, last spring, Republicans tried to cut the CFPB's $550 million budget by about 40 percent. It's safe to say that if the CFPB wasn't funded through the Federal Reserve—a stroke of genius, by the way—it'd barely be able to function. And, as it is, all the attacks on the agency slowed its ability to get up and running. Yet harassment of CFPB is ongoing. In August, for example, Judicial Watch released information gathered through the Freedom of Information Act to allege that the CFPB was spending too much money on things like sign language interpreters and training classes for its staff. Among the odd complaints of Judicial Watch was that CFPB had spent $4,500 "to enroll six employees in a Banking Law Fundamentals class at George Washington University." As if we...

Walmart’s Missed Cue at Retail’s Big Show

Demos
Inside of New York’s Javits Convention Center this morning, Walmart US President and CEO Bill Simon took the stage before a crowd of industry leaders to talk about how retail can play a central role in revitalizing the American economy. It’s a topic he’s touched on before , stating that “American renewal is all about jobs,” before annotating his position with a political agenda that includes lower corporate tax rates and new trade agreements to free up the movement of capital overseas. But while Simon made his case for better living through corporate cost cuts to the attendees inside the convention, outside the Javits Center it really was all about jobs. Workers from across the service industry gathered to agitate and spread the word on how companies like Walmart fail workers, families, and the entire economy by keeping their employees below the poverty line with low wages and part-time hours. The National Retail Federation’s (NRF) four-day Annual Convention and Expo is sometimes...

Why In The World Would Business Favor Austerity?

Flickr/ Talk Radio News Network
A New York Times article reported that Fix the Debt, the deficit hawk group which positions itself as a neutral body of wisemen, includes a number of corporate lobbyists and board members. The Times noted that many of those involved in Fix the Debt helped create the deficit problem to begin with by fighting to defend tax perks for business and the wealthy, such as the record low rates for capital gains and dividends, along with the notorious "carried interest" loophole. No big surprises there. As John Judis explained long ago in his book, The Paradox of American Democracy , it's hard to find any genuine wisemen in Washington anymore; not in a town where even the most esteemed former public servants have all sold out to the highest bidder. But here's the real thing that puzzles me about corporate leaders who push for deficit reduction: Why in the world would business favor austerity? Sure, I can understand why corporate leaders worry about deficits in the long run. Borrowing a trillion...

Yes, We Have A (Defense) Spending Problem

Flickr/StefPress
Last year, in 2012, the U.S. government spent about $841 billion on security—a figure that includes defense, intelligence, war appropriations, and foreign aid. At the same time, the government collected about $1.1 trillion in individual income taxes. (And about $2.4 trillion in revenues overall if you include payroll, corporate, estate, and excise taxes.) In other words, about 80 cents of every dollar collected in traditional federal income taxes went for security. That's an astonishing statistic, and it captures the most underappreciated aspect of today's fiscal challenges: We have a security spending problem. Such spending is significantly higher than all non-defense discretionary domestic spending. Worse yet, almost nobody in Washington seems interested in seriously curtailing defense spending that is greater in real terms than what the U.S. spent in the Cold War—despite the fact that the U.S. will be officially at peace when we withdraw from Aghanistan next year and the U.S. faces...

Madness In December Employment Numbers

Flickr/Merrimack College
The new job numbers are out and, at first glance, there is nothing surprising here. Job growth continued to inch upward in December, with 155,000 new jobs added. Of course, with several million young people joining the labor force every year, numbers like these don't actually amount to growth. We are just running in place. But here's a statistic that jumped out at me: 89,000 public sector workers lost their jobs in October, November, and December—with most of those losses, 66,000, occurring in October. These numbers are revised figures that are much higher than what appeared in the past BLS employment releases, so for some reason the BLS tends to lag behind in capturing the full scope of government layoffs in a timely fashion. Anyway, back to the main point: Large-scale layoffs of government workers continue across the United States. Such layoffs undermine local economies and stymie the recovery. For every five workers who were hired in the past three months, one was laid off by...

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