Economy

The Year in Preview: Labor's Outlook

AP Images/PAUL BEATY
L abor—unions and the broad working class of wage workers—hasn’t had a good year in a very long time. Union membership continues its long, slow decline, as does median family income. But if nothing else, 2014 should be a clarifying year in the life of several legal and organizing struggles that will either advance or retard the progress of labor. The Cold Hard Numbers The labor year begins in early January when the Bureau of Labor Statistics releases its union-membership numbers. Despite recent high-profile fights over public-sector unionism—teachers and government workers—union density among public employees has stayed remarkably steady, somewhere around 35-36 percent of the public-sector workforce. Private-sector unionism (the iconographic male union members of yore—autoworkers, steelworkers, truckers, coal miners) continues, year by year, to creep lower and lower—last year, density stood at 6.6 percent, probably the lowest since the beginning of the 20 th century. The members of...

Google to Begin Building Robot Army

Boston Dynamics' Atlas marches over the rubble of our shattered world.
When Amazon bought a robotics company called Kiva Systems last year, it made perfect sense. Kiva makes robots that move things around warehouses; Amazon has a lot of warehouses full of a lot of stuff that needs moving around. Google, on the other hand, would seem to have no obvious need for robots, which is why it might appear odd that they just announced the purchase of Boston Dynamics, a company developing robots that mostly resemble animals and are designed to do things like carry equipment for soldiers , run fast , and jump really high . In fact, it's only the latest of a bunch of robotics companies Google has bought. So what are they up to? In some ways, Google increasingly resembles a corporation out of a near-future sci-fi novel, one that begins by making some nice but (seemingly) not exactly world-transforming product, then that product turns out to be bigger than anybody imagined, then it gradually expands into one area after another until it controls practically the entire...

The Year in Preview: Paul Ryan's Misguided Poverty Plan

N ext year will mark the 50th anniversary of the War on Poverty, launched by President Lyndon Johnson. But don’t expect a golden anniversary party for the tired, poor, huddled masses. Johnson’s initiatives passed beginning in 1964 and throughout his second term, and were aimed at the communities left out of policies that had created the widespread prosperity enjoyed by most Americans after the Great Depression—especially the rural poor and African Americans. It wasn’t long, however, before those programs came under attack. The next president, Richard Nixon, used resentment over expanded rights and anti-poverty legislation to wrench the votes of Southern whites away from the Democrats: Ronald Reagan began dismantling these programs in the 1980s. Since then the country has concerned itself more with policies that help businesses grow than with the plight of the least well off. It’s part of the reason we suffered through the Great Recession, and why poverty remains stuck at 15 percent...

A Dubious Budget Deal

The years of Republican obstructionism and the corporate campaign for deficit reduction have taken such a toll that merely the fact of getting a budget deal at all looks like a great achievement. This one is better than continued impasse, but the deal itself is a stinker. Representative Raul Grijanva, co-chair of the House progressive caucus, put it well: “I feel like punching myself in the face, but I’ll vote yes.” The deal does override the automatic sequester for this year. It will restore some $31.5 billion in sequester cut over the next two years in domestic spending, and a like amount in military spending. But those increases are against a backdrop of more than a trillion dollars of cuts over a decade. The deal nominally is deficit-neutral, because it adds new budget cuts in Medicare in 2022 and 2023. Even worse, the deal did not even include an extension of expiring extended unemployment insurance, at a time when the share long-term unemployed is stubbornly stuck. That...

Robbing Illinois's Public Employees

I n the span of a few hours on December 3, two Midwestern states changed America’s relationship to its public employees, perhaps irrevocably. If courts approve plans for bankruptcy in Detroit and a new law in Illinois, retirees who worked their careers as sanitation engineers and teachers, firefighters and police officers, public defenders and city clerks, under a promise of pension benefits protected by state constitutions, will not receive their promised share. “This is a bipartisan collection of politicians who essentially don’t respect democracy,” says Steve Kreisberg, director of Research and Collective Bargaining for the public-employee union AFSCME. “They authorized a violation of their own state constitutions.” The implications for the future of public pensions are grave. Michigan and Illinois are two of just seven states with clauses in their state constitutions prohibiting cuts to public pensions. If they can nevertheless slash benefits, cities, and states with less...

On Inequality, Obama's Words Aren't Enough

President Obama speaking Wednesday on inequality.
There are times, like the speech Barack Obama gave yesterday on economic inequality, when he reminds liberals of what we found so appealing about him. The address can stand among the most progressive statements of his presidency. Not for the first time, Obama declared inequality "the defining challenge of our time," and articulated an eloquent case, based in American history and values, for the damage it does and why we need to confront it. So why was I left feeling less than enthusiastic? Because over the last five years, Obama has succeeded in doing so little to address the problem. "Making sure our economy works for every American," he said, is "why I ran for president. It was the center of last year's campaign. It drives everything I do in this office." If that's true, then his presidency hasn't been particularly successful. Now granted, it's not as though he hasn't been awfully busy. And he still has some notable achievements in this area, none greater than the Affordable Care...

Plan for Robotification of Everything Proceeding Apace

In the late 19th century, major American cities began installing networks of underground pneumatic tubes between post offices, enabling them to whisk hundreds of letters back and forth at speeds up to 35 miles per hour, with the satisfying thurp sound as an added bonus. Most of the systems were dismantled in the 1920s, but somehow New York's managed to stay in use until the 50's ( here's a description of this odd bit of postal history). Sadly, the dream of universal pneumatic tube delivery to the home was never achieved. But in a 14-minute ad for Amazon that was cleverly staged as a report on 60 Minutes ("If you can do this with all these products, what else can you do?" gushed Charlie Rose on the floor of a fulfilment center. "You guys can organize the world!"), the company revealed the future of package delivery: drones. It isn't as though they're the first ones to have thought of this; people have been making jokes about things like pizza-delivery drones for a few years now. But as...

The People's Court?

If you want to see where the problems of unaffordable housing and low wages and poor education play out every day, go to Detroit's 36th District Court. 

Associated Press
*/ Associated Press Detroit's 36th District Court T he first time I went to Detroit’s 36th District Court, I didn’t know the drill. Most people don’t know the drill the first time they go. A lawyer I’d met agreed to accompany me. He went in the side door, reserved for attorneys and court staff. I joined the long line at the main entrance, waiting to pass through the metal detectors and have my bag scanned. No cell phones, the guard told me. Put it in your car. I waved the lawyer back outside. He was due in court, and his car was blocks away. Give me the phone, he said. I’ll bring it in. I returned to the line. You can’t bring in that hair clip, the guard told me. Just throw it out, I said. I scooped my bag off the belt and joined the lawyer, who was standing where the entryway carpet meets the linoleum, near a line of people snaking through a rope maze, waiting to pay tickets. I was intimidated and upset, and I’d been at the 36th less than five minutes. The lawyer and I rode the...

Europe's Miserable Credit Score

Without access to credit, the European South is unlikely to bounce back anytime soon.

AP Photo/Michael Probst,File
E uropean Central Bank president Mario Draghi surprised markets last Thursday by cutting the Bank’s benchmark interest rate to a record low 0.25 percent (as low as the federal funds target rate in the U.S.). Explaining his decision, Draghi—the person who deserves most of the credit for the lull in the euro crisis over the past 15 months—noted that “monetary and, in particular, credit dynamics remain subdued” and that monetary policy must remain accommodative in order to “assist the gradual economic recovery” taking hold in the Eurozone. In other words, monetary policy must remain extremely loose to prevent Europe from sliding into a Japan-style period of protracted stagnation. The Eurozone recovery, which materialized in the second quarter of 2013 after a year-and-a-half of double-dip recession, is weak and, more importantly, uneven— as the head of the ECB is well aware. While Germany and Finland grew 0.7 percent quarter-on-quarter and France followed closely behind with 0.5 percent,...

Krugman Boots One

Paul Krugman has played an indispensable role challenging the conventional wisdom during the financial crisis and the slump that followed. He has been proven right again and again in his brilliant debunking of austerity as the cure for recession. Therefore, it was astonishing to read a rare, truly wrongheaded Krugman column in Monday’s New York Times . The offending column is titled “ A Permanent Slump? ” In it, Krugman proposes that something fundamental—something structural—has changed in the economy so that the new normal is what economists call “secular stagnation,” or as Krugman puts it, “a persistent state in which a depressed economy is the norm, with episodes of full employment few and far between.” As I read through the column, I kept waiting for the pivot. Surely Krugman was setting up this claim as a straw man, the better to demolish it. But, no. Krugman evidently buys this view. Even worse, the expert whose research he cites in defense of this thesis is one Lawrence...

Poor, with Savings

B eing poor is expensive. A winter heating bill that comes due before the paycheck arrives can compel a trip to a payday lender who charges 350 percent interest. It takes the entire paycheck to pay off that loan in a week—emptying out the bank account and requiring yet another visit to the lender. A child who is too sick to go to school for a week may need her single father to stay home with her, costing him a quarter of his monthly income. He’s overdue on the rent and the bills, so he’s responsible for late fees as well. Even a few hundred dollars in a savings account could help low-income families weather such predictable but unavoidable crises—provided they have extra money to save. Their budgets are tight, and saving makes sense only if they’re not sacrificing food or child care in order to put money aside. Anti-poverty advocates have long known there could be a relatively cheap, simple way to help people avoid such trade-offs if the government structured savings plans tailored to...

Gillibrand Steps Up for Working Women

AP Photo/Carolyn Kaster
At the end of September, New York Senator Kirsten Gillibrand announced her Opportunity Plan promoting progressive economic policies for women. The plan includes Gillibrand’s proposed FAMILY Act. The legislation builds upon the 1993 Family Medical Leave Act (FMLA), which allows certain workers—public-sector employees or private-sector ones who have been employed for at least a year—to take unpaid leave for child care or health reasons. Under Gillibrand’s proposed legislation, all workers—no matter the size of their company, duration of their employment, or number of hours worked in the past year—would be able take up to 12 weeks of paid leave. Modeled after state additions to temporary disability insurance (TDI) programs in California, New Jersey, and Rhode Island, her plan would require 0.2 percent deposits of employee earnings to be matched by employer contributions in a Social Security Administration fund. Workers would then receive up to 66 percent of their earnings when they took...

The Supply-Side Economics of Abortion

AP Images/Rex C. Curry
AP Images/Rex C. Curry L ast June, Ohio Republicans quietly slipped a handful of abortion restrictions into the state’s budget, alongside provisions to invest in Ohio’s highway system and a new funding model for the state’s colleges and universities. Eight states, including Ohio, already require clinics that perform or induce abortion to have a “transfer agreement” with a local hospital so that patients can be transported quickly to a more sophisticated medical center in case of an emergency. The budget, which Republican Governor John Kasich signed into law with the abortion provisions intact, included an innovative new rule, making Ohio the first state to prohibit abortion clinics from entering into transfer agreements with public hospitals. Four months later, the new rule is already bearing fruit for its anti-choice architects. Ohio had 14 abortion providers at the beginning of the year; soon, it could be down to seven. Toledo’s two abortion clinics had their licenses revoked...

Will Amazon Swallow the Postal Service?

Don't worry, they only do this in Japan. (Flickr/Fugu Tabetai)
For a while now, the Postal Service has been telling us that they'd like to end Saturday mail delivery as a way to cut costs and deal with their ongoing financial difficulties. Congress isn't about to let that happen, so now they've gone the other way: they're going to start delivering on Sunday. But only packages. And only from Amazon. The natural response to this is, "Wait, what?" Since when does a single corporation get to commandeer an enormous government agency to use for its own profit-making purposes? What's next, are we going to just rename it the Lockheed Martin Department of Defense? Sell the naming rights to national parks? ("Welcome to the Doritos Locos Tacos Grand Canyon!") OK, it isn't as bad as all that. In fact, as long as they do this in a fair way—essentially for any company that wants it—it could be good for everyone. According to news reports, they're exploring similar arrangements with other companies. And the Postal Service does sometimes negotiate special...

The 40-Year Slump

To see interactive package, visit this article on a non-mobile browser or on our website . T he steady stream of Watergate revelations, President Richard Nixon’s twists and turns to fend off disclosures, the impeachment hearings, and finally an unprecedented resignation—all these riveted the nation’s attention in 1974. Hardly anyone paid attention to a story that seemed no more than a statistical oddity: That year, for the first time since the end of World War II, Americans’ wages declined. Since 1947, Americans at all points on the economic spectrum had become a little better off with each passing year. The economy’s rising tide, as President John F. Kennedy had famously said, was lifting all boats. Productivity had risen by 97 percent in the preceding quarter-century, and median wages had risen by 95 percent. As economist John Kenneth Galbraith noted in The Affluent Society , this newly middle-class nation had become more egalitarian. The poorest fifth had seen their incomes...

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