Poverty & Wealth

Bottom Up

In 1938, Congress passed, and FDR signed into law, the Fair Labor Standards Act, which established the first federal minimum wage and overtime protections. And that, to the extent that most Americans think about the minimum wage, was that. To be sure, Congress occasionally raises the minimum wage (though they’ve got a long way to go to make it a living wage), but the national law, covering all workers, has long since been established, right? Not quite. In fact, the 1938 law only passed when Roosevelt and congressional liberals agreed to exclude some categories of workers—categories that included many millions of people—from its coverage in order to win the votes of the Southern Democrats they needed to pass it. So agricultural workers (by which Southern Democrats meant, African American sharecroppers) were excluded from its terms. They’ve since been included, but many migrant and immigrant workers are frequently and illegally short-changed. Retail workers only came under the act’s...

Legislative Legerdemain

AP Photo/Yves Logghe
So you think congressional Republicans are the only right-wingers who like to append their pet (and sometimes, wedge) issues—like the Keystone pipeline—to must-pass legislation like the payroll tax-cut extension? Guess again—it looks to be a trans-Atlantic syndrome. Turns out that David Cameron, Britain’s Tory prime minister, went to Brussels for the EU summit last week with exactly the same strategy. As the heads of government of the other 26 member states debated German Chancellor Angela Merkel’s proposal to regulate national budgets more tightly (itself a wildly irrelevant idea to the crisis of Greek, Italian and Spanish solvency, but that’s another story, which I wrote about in today’s Post ), Cameron cleared his throat and proposed a series of measures designed to protect the City—the London-based banks that dominate the British economy and helped bring about the crash of 2008. Cameron was operating under the theory that the Germans and the French so desperately needed unanimous...

Occupy This!

ICYMI: The thoughtful Ruth Rosen outlines how the Occupy movement has changed the national consciousness and conversation here , giving us important new language for the yawning wealth divide. Meanwhile, Berkeley labor economist Sylvia Allegreto picks up the new terminology to point out that six Waltons = the bottom 30 percent . Ouch.

The New Populists

I n the month before the destruction of the encampment in Zuccotti Park, I got in the habit of biking across the Brooklyn Bridge each night to talk with the Wall Street Occupiers and wander among the tents. There was always work to behold—bigger tents going up, new volunteers welcomed, the kitchen doling out free food, the media groups live-streaming, dishes being done, cops being teased—and always conversation to be had and heard. The protesters liked to work, but they loved to talk, and mostly what they talked about was how to organize to destroy the power of money in America. They were pissed off about it—pissed off at the corporations, the banks, the financiers, the corrupt legislators, the corrupt presidents, the corrupt everything. “It doesn’t matter which party is in power,” Jeff Smith, a 41-year-old former media consultant, told me. “The banks and the corporations own them both.” And President Barack Obama? “He is worse than a corporate whore like Bill Clinton,” Smith said. “...

From K Street to Main Street

T his week featured a vision of two different paths Occupy Wall Street could take after being evicted from public parks across the country. In Washington, D.C., activists from labor, Occupy, and elsewhere held a “99% in DC” event that began with a day of visits to congressional offices to demand jobs legislation. Occupiers then followed up by shutting down intersections on K Street, which is known for the number of lobbying organizations headquartered there. Tuesday also marked a major escalation of the movement to stop foreclosures. In more than 20 cities, OWS protesters disrupted foreclosure auctions, moved families into abandoned buildings, and mobilized to support people refusing to leave their homes. The actions brought activists into neighborhoods that have seen few protests. Many of the actions were designed as housewarming or block parties, with songs, music, and holiday gifts for kids. Meanwhile, two of the largest remaining encampments are under threat, as police temporarily...

Britain Hesitates

David Cameron's veto of an EU integration plan reveals England's deep skepticism about the union.

AP Photo/Yves Logghe
European leaders went one better this time. Not content with failing to resolve the debt crisis tearing through the eurozone and threatening a global recession, they have now managed to create a new source of instability: the rift between Britain and the rest of the European Union, whose consequences may prove to be momentous indeed. It was a long time coming. The tension between the eurozone “ins” and the ten non-Eurozone “outs” has been building throughout the debt crisis, which has forced the states belonging to the common currency to take extraordinary—and yet woefully insufficient—measures to keep the euro from spectacularly collapsing. In the Brussels summit that ended yesterday, France and Germany, drivers of the push toward an ever closer union, were unable to persuade British Prime Minister David Cameron to back their plan for greater fiscal integration. The deal-breaker was a demand by Cameron for special treatment for Britain’s lucrative financial-services industry. Though...

Elizabeth Warren: Bailout Queen

Karl Rove’s latest ad has to set an all-time record for hypocrisy and factual inversion. The ad actually manages to blame Elizabeth Warren for the bank bailouts. As anyone who hasn’t spent the past three years in a cave must know, Warren has been the nation’s single most effective, relentless, and brave critic of the bailouts. It was that service as chair of the Congressional Oversight Panel that made her one of America’s most admired public leaders. The ad slyly begins with Warren speaking, leading the viewer to imagine that this is a Warren ad. Warren says, “The first thing I’m going to promise is that I’m going to be a voice in the room on behalf of middle-class families.” Then a sneering female voiceover cuts in, and asks, “Really? Congress had Warren oversee how your tax dollars were spent bailing out the same banks that caused the financial meltdown, bailouts that helped pay big bonuses to bank executives while the middle class lost out.” The ad concludes, “Tell Professor Warren...

The Wrong Fix

AP Photo/Bernd Kammerer
Yesterday, both Bob Kuttner, here in the Prospect , and I , in my Washington Post column , noted that the deal that German Chancellor Angela Merkel and French President Nicolas Sarkozy struck to save the Eurozone will inflict years of austerity on European nations that are already mired in depression. Spain, for instance, has an unemployment rate of about 20 percent and a youth unemployment rate that is approaching a mind-boggling 50 percent. It needs a massive Keynesian jolt to its economy, not budgetary constraints that will condemn it to a decade or quarter-century of penury. Both Bob and I also noted that the Merkel-Sarokzy solution was based on a misdiagnosis of Europe’s woes. Some of Europe’s current basket cases were actually running budget surpluses in the years before the Lehman meltdown. Ireland and Spain weren’t overspending at all—but the banks and investors speculating on their housing markets most certainly were. When their banks went under, their economies collapsed,...

Made in America — Again

Leaders discuss returning manufacturing to the U.S. in a Prospect roundtable.

AP Photo/Madalyn Ruggiero
Andy Grove was, successively, the director of engineering, president, CEO, and Chairman of Intel Corporation. In an article last year, Grove proposed levying tariffs on goods produced offshore and dedicating the funds to help companies scale up production in the United States. Andy Grove was, successively, the director of engineering, president, CEO, and Chairman of Intel Corporation. There are three distinct causes for the jobs we’ve lost. First, the declining demand for products. So everybody focused on the stimulus—they assumed that the demand cycle and the employment cycle are related like they used to be. But they’re not. I don’t understand pure Keynesianism at a time of global flows like we have now. If we turn on a spigot to increase demand for consumer products, we need to have some factor that measures the portion that goes to a domestically made product. That portion in the last ten years must have changed in a very major way. You want a measure? How about asking for the...

GOP vs. Job Creators

In the ongoing battle over extending the payroll tax cuts that currently save the median American household about $1,000 a year, one salient point is commonly overlooked: The proposal that the Obama administration and congressional Democrats are championing also cuts in half the payroll tax for employers. Currently, employers are subjected to a payroll tax of 6.2 percent on every paycheck they write. The Democratic proposal would reduce that to 3.1 percent on the first $5 million in taxable payroll—that is, it would chiefly benefit small and middle-sized businesses. Yet every Senate Republican but one (Maine’s Susan Collins) voted against this proposal when it came to a vote on Thursday, complaining that it taxed job creators by proposing to off set the tax cut by raising taxes on individuals and couples for that portion of their annual income in excess of $1 million. Never mind that that the Treasury Department has concluded that only 1 percent of those taxpayers are small businesses...

Police Raze Occupy DC Shelter

Will resistance give the protest movement in the nation's capital the shot in the arm it needs?

After an extended showdown that began around noon Sunday, police in Washington, D.C., succeeded in destroying a wooden structure Occupy DC protesters had erected in McPherson Square to provide shelter throughout the winter. Police arrested 31 people in total—15 for crossing a police line and 16 for disobeying a lawful order, according to police spokesman Sergeant David Schlosser. The last protester, who climbed onto the top of the structure and held up an American flag, was forcibly removed by police in a cherry picker around 9 P.M. He faces additional charges for indecent exposure and public urination after urinating off the roof. "Who do you work for? Who do you serve?" chanted the crowd as officers placed the lone holdout in a harness. He was hailed on twitter as a hero: "When David relieved himself off the roof, he was simply showing how trickle down economics works," wrote Dave Storup, an Occupy DC sympathizer. Schlosser said the D.C. building inspector's office had determined...

Schooling Capitalism

T his week, both coasts saw student marches on Monday and big-city police raids on Tuesday. As the chancellors of the University of California met by teleconference, students throughout the U.C. system held demonstrations and teach-ins opposing tuition hikes and police violence. At U.C. Davis, they called a student strike. Meanwhile, their counterparts at the City University of New York marched on their own board of trustees as it voted on five years of tuition hikes. Tuesday, Philadelphia police cleared occupiers out of city hall’s Dilworth plaza to make way for a $50 million renovation project. The raid followed multiple ostensible deadlines, and weeks of controversy within the camp and between occupiers and the city over whether they would relocate to a new space (many have). Los Angeles Mayor Antonio Villaraigosa, who earlier in his career was attacked for ACLU ties, drew criticism for restricting most journalists to a “First Amendment zone” as police forced out Occupy LA Tuesday...

Game Plan

With a labor agreement tentatively in place, the NBA's next challenge will be bringing the fans back.

AP Photo/Mike Segar
With its labor dispute nearly behind it, the NBA is facing another mammoth problem: winning fans back. In a time when the unemployment rate remains stubbornly high and the economy won’t grow, many basketball fans viewed the NBA strike as an ugly and petty fight of rich players against wealthy owners over a few more million. “It’s the most ridiculous thing I saw in my life,” one longtime fan ranted to the New York Post. “They make so much money. It’s childish.” Childish or not, as the National Basketball Association welcomes back its players after reaching a tentative deal last Saturday, it has to figure out a way to bring back fans who were stung not only by the lockout, but by years of expensive ticket prices, the LeBron James-decision fiasco, and players throwing tantrums. The five-month labor crisis and resulting lockout, which came after the players’ association and NBA owners’ inability to reach an agreement over a variety of issues from players’ salaries to revenue sharing after...

GOP vs. Job Creators

Republican opposition to extending the payroll tax misses the point.

In the ongoing battle over extending the payroll tax cuts that currently save the median American household about $1,000 a year, one salient point is commonly overlooked: The proposal that the Obama Administration and Congressional Democrats are championing also cuts in half the payroll tax for employers. Currently, employers are subjected to a payroll tax of 6.2 percent on every paycheck they write. The Democratic proposal would reduce that to 3.1 percent on the first $5 million in taxable payroll – that is, it would chiefly benefit small and middle-sized businesses. Yet every Senate Republican but one (Maine’s Susan Collins) voted against this proposal when it came to a vote on Thursday, complaining that it taxed job-creators by proposing to offset the tax cut by raising taxes on individuals and couples for that portion of their annual income in excess of $1 million. Never mind that that the Treasury Department has concluded that only 1 percent of those taxpayers are small...

NBA, Final

A league labor agreement includes a surprising caveat to protect owners from ... themselves.

AP Photo/Hans Deryk
After spending almost half the year in a pitched labor dispute that shutdown league operations, the NBA owners and players union agreed to a new collective bargaining agreement last weekend. The reformed players union—which had disbanded last month to file an antitrust lawsuit against the owners as a negotiating tactic—and league representatives are set to meet again Friday afternoon to come to official terms on the ten-year contract. As long as the final details (such as drug testing and player age restrictions) are worked out over the next week, a shortened 66-game season will kickoff on Christmas Day. The general consensus on the deal is that the owners came out ahead at the players' expense. The old contract had stipulated that 57 percent of basketball-related income go toward players' salaries, while the new deal reduces that number to 51 percent next season, and possibly even lower in years to come. But the fight wasn't just about the overall divide of money, and for the other...

Pages