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. Despite the seemingly obligatory pleading that government policies that help regular people aren't the enemy of capitalism ("Remember, these are promises we make to one another. We don't do it to replace the free market, but we do it reduce risk in our society by giving people the ability to take a chance and catch them if they fall."), it 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.
Progressives have typically attacked economic inequality on fairness grounds, arguing that it's just not right that so much national wealth is funneled to the top even as millions struggle to get by. Americans are definitely open to this argument, especially during times like now when a warped, anemic economy is mainly just raising the yachts, and not the boats of ordinary people.
TskRabbit.com markets itself as a Web service that matches clients seeking someone to do odd jobs with “college students, recent retirees, stay-at-home moms, [and] young professionals” looking for extra income. The company website calls it “a marketplace dedicated to empowering people to do what they love.” The name Task Rabbit doesn’t exactly suggest the dignity of work, and the love often takes humble forms. Customers hire Task Rabbits to clean garages, haul clothes to the laundry, paint apartments, assemble Ikea products, buy groceries, or do almost anything else that’s legal.
When the government shutdown ends and September’s jobs report is released (it was supposed to appear last Friday), careful readers will notice that women are holding a number of jobs either almost or just above their all-time high (which came in early 2008), while men are still millions short of their own pre-crash milestone. Hailing a successful she-covery, however, obscures the fact that women still face an elevated unemployment rate and that the barriers that kept that them from earning as much as men before the recession are still in place. Women are millions of jobs short of where they would be if the economy was at its full potential. Many of the new jobs they have are low-paying. The main causes of the pay gap, like gender segregation in the labor market, have not gone away. That women are gaining jobs is a good thing, but policymakers should not be convinced their work is over.
Scott Sumner has become famous in the internet world and elsewhere as monetarism’s most capable defender. Sumner has a lot of things to say, but one is illustrative for my purposes here. Sumner argues that advocates of fiscal stimulus often make the mistake in their arguments of assuming away monetary policy as static or accommodating. His point is that you can’t do that because the efficacy of fiscal policy always depends on what monetary policy is doing in the background.
It’s been a good week for the nation’s numerous poverty-wage workers. They’ve been way overdue for a good week.
On Tuesday, the Labor Department issued a much anticipated and delayed extension of the federal minimum wage and overtime regulations to the nation’s 2 million homecare workers. Last Thursday, the California legislature passed (and Governor Jerry Brown pledged to sign) a bill that raised the mega-state’s minimum wage from $8-an-hour to $10.
A couple of months ago, Fox News host Neil Cavuto went on a rant against fast-food workers striking for higher wages, explaining that when he was but a wee pup of 16, he went to work at an Arthur Treacher's restaurant for a mere $2 an hour, setting him on the road to becoming the vigorous and well-remunerated cheerleader for capitalism he is today. For all his economic acumen, Cavuto seemed to forget that there's a thing called "inflation," and the two bucks he earned in 1974 would today be worth $9.47. That's less than the striking fast-food workers are asking for (they want $15 an hour), but significantly more than the $7.25 today's minimum-wage workers make. Not to mention the fact that so many of them are not teenagers but adults trying to survive and support families. (According to the Economic Policy Institute, 88 percent of those who would benefit from an increase in the minimum wage are over the age of 20; that and much more data on the topic can be found here.)
Yesterday, the California legislature passed a bill raising the state's minimum wage to $10 an hour, which would make it the highest in the nation. Governor Jerry Brown intends to sign it. Of course, business interests howled that paying people such a handsome wage would destroy the state's economy, which is what they always say whenever the minimum wage is raised, despite the fact that it never seems to happen. The California increase is going to be phased in over two and a half years; the minimum in the state will rise from its current $8 to $9 next summer, then to $10 at the beginning of 2016. Since this issue seems to be coming back to the fore as it does periodically—the mayor of Washington, DC just vetoed a living wage bill that was aimed primarily at Walmart—I thought it might be worthwhile to compare the value of the minimum wage today to what it has been in the past:
Are people better off than they were before the recession? By most headline figures they’re not: Poverty and inequality have risen to record levels, median incomes declined. Unemployment has improved marginally, but 37 states have yet to regain their pre-recession job levels.
With the passing of the 50th anniversary of the March on Washington, commentators have been assessing the status of blacks in society. Matt Yglesias has a post about the black-white income gap, and how it has not budged in 40 years. Brad Plumer has a post at Wonkblog that features ten charts showing the persistence of the black-white economic gap, including rates of unemployment, poverty, and so on.
There is a growing, industry-wide movement to push the fast food economy to work for all involved. Today, workers have called for a national strike that is expected to cross company lines and reach dozens of cities.
The fast food labor force has never been protected by collective bargaining power or labor scarcity, making their demands for higher wages and the right to organize a unique historical event. It is also a bold stance from workers made vulnerable by a frail economy, asking for benefits that reach well beyond their own household budgets to the economy as a whole.
Late last month, the Associated Pressran a report about economic insecurity that managed to gain some traction in certain parts of the political internet, and since then, again and again in certain relevant debates. The statistical bomb dropped in the first sentence of the report really says it all:
Four out of 5 U.S. adults struggle with joblessness, near poverty or reliance on welfare for at least parts of their lives, a sign of deteriorating economic security and an elusive American dream.
To underscore a weeklong initiative by President Obama on behalf of rebuilding the middle class, the latest figures on GDP growth, released Thursday, and on job growth, made public Friday, show just how far from a healthy middle class economy we are.
In his campaign to drum up public support for a post-recess budget deal with Congress, President Barack Obama has repeated a call he first made in his 2013 State of the Union speech: an increase in the federal minimum wage. This past January, he called for a $9 minimum wage, up from the $7.25 rate that has remained unchanged the past four years. This week, at an Amazon packaging facility in Chattanooga, Tennessee, he said: “[B]ecause no one who works full-time in America should have to live in poverty, I will keep making the case that we need to raise a minimum wage that in real terms is lower than it was when Ronald Reagan took office. That means more money in consumers’ pockets, and more business for companies like Amazon.”
A $9 federal minimum wage is higher than any current state’s minimum wage except Washington’s.
In much of recent memory, battles over education reform have been portrayed as pitting Republican governors against teachers’ unions. Lately, though, we’ve also seen hard-line reform-minded Democrats going against the party’s traditional base of labor liberals, exemplified by the Chicago Teachers Union's two-week strike to oppose (among other things) Mayor Rahm Emanuel’s plan to tie compensation to student improvement. But new research shows that there might be something else going on than simple union-versus-education-reform infighting. Instead, battles over education may be tied to a much deeper issue: race.