NY Fed names Williams to top post amid political backlash
NY Fed names Williams to top post amid political backlash
“Yet the drum beat of criticism in recent weeks, including a demonstration outside the New York Fed and letters from state and city lawmakers, is raising worries within the Fed about independence...
“Yet the drum beat of criticism in recent weeks, including a demonstration outside the New York Fed and letters from state and city lawmakers, is raising worries within the Fed about independence from political pressure. Some lawmakers have in the past said the New York Fed president should be a presidential appointment like Fed governors. On Tuesday, advocacy group Fed Up slammed the appointment of "yet another white man whose record on Wall Street regulation and full employment raises serious questions."
Read the full article here.
The #MeToo Movement and Everyday Industries, Part 2
The #MeToo Movement and Everyday Industries, Part 2
The Center for Popular Democracy reports that 18 percent of women have upper-management positions, even though they make up 60 percent of first-line supervisors. People of color, namely black and...
The Center for Popular Democracy reports that 18 percent of women have upper-management positions, even though they make up 60 percent of first-line supervisors. People of color, namely black and Latino, are also delegated to low-level, low-paying positions, such as cashiering. Older, experienced employees often do not receive benefits or long-term rewards, according to The Washington Post.
Read the full article here.
Activists launch #BackersOfHate to call out major companies with ties to Trump
Activists launch #BackersOfHate to call out major companies with ties to Trump
Activists are fearlessly taking on some of the biggest corporations in the U.S., calling them out for their ties to President Donald Trump.
A newly launched website called BackersOfHate.org...
Activists are fearlessly taking on some of the biggest corporations in the U.S., calling them out for their ties to President Donald Trump.
A newly launched website called BackersOfHate.org breaks down how nine major corporations are affiliated with the Trump administration and the ways they will gain from the Trump agenda. The website also outlines current company policies that already negatively impact people of color, immigrants, Indigenous communities, and low income populations — similar to critiques of the Trump agenda.
Read the full article here.
Nina Tassler, Denise Di Novi Launch New Studio PatMa Productions
Nina Tassler, Denise Di Novi Launch New Studio PatMa Productions
The studio has already set up partnerships with a number of organizations promoting diversity, inclusion, and human rights, among them the Geena Davis Institute on Gender in Media, the Center for...
The studio has already set up partnerships with a number of organizations promoting diversity, inclusion, and human rights, among them the Geena Davis Institute on Gender in Media, the Center for Popular Democracy, and Planned Parenthood.
Read the full article here.
Report: NYC Can Raise $1 Billion Through Wall St. Market Power
FOR IMMEDIATE RELEASE:
December 3, 2013
Contact: Tony Perlstein,...
FOR IMMEDIATE RELEASE: December 3, 2013
Contact: Tony Perlstein, Center for Popular Democracy (917) 647-7751, TPerlstein@populardemocracy.org
REPORT: NYC GOVERNMENT CAN RAISE $1B ANNUALLY FOR BUDGET AND CREATE $1 BILLION IN MAIN STREET STIMULUS BY USING $350B WALL STREET MARKET POWER
New York does enough business with Wall Street to renegotiate bad deals
On the heels of a mayoral victory won on the issue of inequality, a new report released today by the Center for Popular Democracy shows that New York City could generate an additional billion dollars annually for the city budget and generate a billion dollars in economic stimulus by effectively using its $350 billion per year in financial market power. The report, “One New York for All of Us: Leveraging New York’s Financial Power to Combat Inequity” shows the city could save as much as $1 billion annually and stimulate the economy by about $1 billion more.
The city’s financial market power comes from the $200.4 billion that the city’s pension funds have invested in Wall Street institutions combined with an additional $150 billion in debt issuance and payments made and received.
“New York City is uniquely positioned to lead the way in holding Wall Street to an appropriate high standard,” said Connie Razza, lead author of the report and Director of Strategic Research Initiatives at the Center for Popular Democracy. “We spend a ton of money with them, and we should use that clout. The city and its related authorities have powerful financial leverage and economic power to demand short, medium and long-term changes from Wall Street that will save money for taxpayers, bring in more revenue for essential city services, and move new investments and new jobs into our neighborhoods and small businesses.”
The report kicks off a week of action to draw attention to the ways Wall Street and big corporations continue to siphon resources away from average New Yorkers and point toward solutions that would help reduce inequality and build economic fairness.
“In 2013, New Yorkers voted for a Mayor committed to addressing the vast inequality in our city, and for a strong plurality of progressive City Council members committed to broader prosperity,” said Michael Kink, Executive Director of the Strong Economy for All Coalition. “In 2014, we’ll start to build a New York that works for all of us. This report maps the way – and tells us to begin by changing the way the city does business with Wall Street.”
“This is our moment,” said Camille Rivera, Executive Director of United NY. “We have the opportunity to make real change in the city and the state, but only if our elected officials know we have their back.”
“One New York for All of Us” highlights concrete solutions to address the imbalance in the city’s relationship with Wall Street. The report details how reforming the city’s relationship with banks could save a minimum of $725 million each year for the city budget, withhold another $300 million in current bank subsidies banks until job-creation commitments are fulfilled, and stimulate the local economy by another $1 billion per year, creating nearly 17,000 jobs.
Key recommendations:
Renegotiate toxic financial deals to save up to $725 million each year. -Use the city’s economic and financial leverage to lower fees and interest rates for new and existing financial services; -Investigate unethical behavior by Wall Street and prosecute fraud to the fullest extent of the law to recover losses; -If Wall Street won’t negotiate in good faith, bring the functions into the city by creating an in-house financial management team and/or a publicly owned city bank. Save money and create jobs by holding banks to firm commitments to the community in return for $300 million each year in city subsidies for banks. Write down underwater mortgages to keep 86,000 families in their homes and stimulate the local economy by as much as $1 billion, creating nearly 17,000 jobs.Key factual findings:
The city and associated entities pay $160 million a year for bad deals with banks. The city, its pension funds, and the MTA pay $563 million in base Wall Street fees each year. New York City and State give banks subsidies worth about $300 million a year, without ensuring that New York City communities will benefit. Because their wages are so low, 39% of bank tellers and their family members rely on at least one public assistance program, at a total government cost of $112 million. During the past 5 years, foreclosures have cost New York City $1.9 billion in expenses and lost revenue.“Due to the bank-induced mortgage craze and crisis, 20% of New York homeowners owe more on their homes than the homes are worth,” explains New York Communities for Change Executive Director Jonathan Westin. “By adjusting bank-inflated mortgages down to fair market value, we could stimulate the local economy by as much as $1 billion and create 17,000 new jobs. It’s good for homeowners, good for communities, good for the city, and even good for banks – whose risk of defaults would drop dramatically.”
“This report highlights the power that our city has to take a stand to improve income inequality. The Great Recession has not eased for most New Yorkers. We have lost good jobs, and the remaining jobs have actually deteriorated. In banking itself, this is shockingly true,” said Deborah Axt, Make the Road New York’s Co-Executive Director. “Frontline bank workers report less pay, inadequate healthcare, and more work with less staff. A full 32% of surveyed bank workers even report working overtime without pay. It is a tragic moment in New York City history when we learn that the wealthiest and most powerful corporations in our nation, perhaps the world, seem to be committing wage theft.”
ABOUT NEW DAY NEW YORK COALITION
The New Day New York Coalition is a new coalition made up of community groups, faith organizations, labor unions, and veterans of Occupy Wall Street working for years on issues of economic fairness – united to organize a week of actions demonstrating that the vision and policy principles New Yorkers voted for in the past election have popular support and practical pathways forward.
The coalition includes Center for Popular Democracy; United NY; Strong Economy for All Coalition; ALIGN NY; New York Communities for Change; Make the Road NY; Alliance for Quality Education; Coalition for Educational Justice; Walmart Free New York; Coalition for the Homeless; Food and Water Watch; NY Citizen Action; Met Council on Housing; Community Voices Heard; United Federation of Teachers; Professional Staff Congress; Retail, Wholesale and Department Store Union (UFCW); Communication Workers of America Transport Workers Union Local 100; New York State Nurses Association; Service Employees International Union 1199 – United Healthcare Workers East; Service Employees International Union 32BJ; Alternative Banking; Not An Alternative; Beautiful Trouble; 99 Pickets; MoveOn NY; and others.
Lawsuit: Arizona Minimum-Wage Initiative Stiffed Petition Firm for $65,000
Lawsuit: Arizona Minimum-Wage Initiative Stiffed Petition Firm for $65,000
An Arizona employer is stiffing a small-business owner on a completed job, affecting dozens of low-income employees.
Sounds like the kind of greedhead Arizonans for Fair Wages and Healthy...
An Arizona employer is stiffing a small-business owner on a completed job, affecting dozens of low-income employees.
Sounds like the kind of greedhead Arizonans for Fair Wages and Healthy Families is targeting with its campaign to raise the minimum wage, right?
Wrong — the employer is Arizonans for Fair Wages and Healthy Families. The campaign refuses to pay the last $65,000 of a $965,000 bill to Sign Here Petitions, the company that hired the people who gathered the signatures that put the measure on this November's general-election ballot.
Sign Here owner Bonita Burks sued the campaign on September 21 to recover the balance due. In the meantime, Burks says, she has been unable to distribute final paychecks to the 45 to 50 petition gatherers she hired to get Prop 206 onto the ballot.
It's not as if the minimum-wage campaign can't afford to pay Burks, a Maricopa resident who has owned her own business for 12 years. Though the campaign ran short of money over the summer, its spokesman, Bill Scheel, confirms that Arizonans for Fair Wages expects to receive an influx of $1.5 million in donations any day now.
Scheel says the campaign intentionally shorted Burks' company because it didn't do its job well enough, resulting in tens of thousands in unexpected expenses.
If Arizona voters approve the minimum-wage measure in November, the state's minimum wage would go up to $10 an hour next year and rise to $12 in 2020. Waitresses and others who expect tips would see their wages increase from $5.05 to $7 by 2017, and to $9 by 2020. The ballot initiative also mandates that workers can take between three and five days of earned sick leave annually.
Much of the money for the campaign has come from out-of-state donors as part of a national effort by activists and labor unions. Living United for Change in Arizona (LUCHA), the largest donor, is itself being funded by the Washington, D.C.-based Center for Popular Democracy. The Commercial Workers union Region 8 States Council and California-based Fairness Project are also major contributors.
As New Times reported in August, a member of the political-strategy firm hired by the campaign, Javelina, loaned the campaign $100,000 after it ran short of cash while defending itself from a legal challenge that could have kicked the measure off the ballot.
Scheel, a cofounder of Javelina and spokesman for the campaign, said in August that he gave the campaign the loan on August 4 to cover unexpected expenses from a legal challenge by the Arizona Restaurant Association.
The restaurant owners behind the ARA, an influential organization led by Steve Chucri, one of five Maricopa County supervisors, doesn't want to see minimum wage go up and sued the campaign in an attempt to deny voters the right to decide the question. The ARA's lawyers argued that many of the campaign's signature gatherers were felons or had filled out their forms incorrectly, meaning tens of thousands of signatures should have been tossed. The workers are typically paid $3 to $5 for each signature they collect.
The ARA identified up to 85,000 signatures they claimed were no good, and expected to find even more invalid ones. At least 150,642 valid signatures were needed out of the 271,883 turned in by the campaign.
Yet before a deeper probe of the campaign's signature-gathering process occurred, Maricopa County Superior Court Judge Joshua Rogers dismissed the ARA's complaint because it hadn't been filed on time. The Arizona Supreme Court upheld the ruling on appeal.
The campaign had apparently run out money before the lawsuit was filed, though. On July 19, about two weeks after the July 7 deadline to turn in signatures to the state, Sign Here and the campaign — represented by Scheel — drew up a one-page amendment to their original contract. In the amendment, Burks made clear that the campaign owed $186,884.60 and would assess a late fee of $1,000 per day starting on July 18.
The campaign "understands and agrees that the final invoice amount is requires for [Burks] to pay individuals already-earned monies," the contract states, adding that if Burks is sued by the signature gatherers, the campaign will cover the costs.
Scheel signed the amended contract.
About a month later, Burks says, Scheel promised falsely that the money was on the way.
Burks provided New Times with a screenshot that shows a text exchange with Scheel on Friday, August 19:
"Bill, Please send me a text once the wire has been. Thank you," Burks texted.
"The wire has been initiated," Scheel texted back.
But the following Monday, the money had not materialized in Sign Here's account.
"Sorry," Scheel informed Burks in another text. "We have been on conference calls with the national funders all morning. We've been instructed to hold off any further wires till after the Supreme Court rules on the appeal, which we hope will be Friday."
The state Supreme Court upheld Rogers' ruling on August 30, clearing its final hurdle to make the ballot.
Scheel says Sign Here invoiced the campaign a total of $965,000, of which the campaign paid $900,000.
"We paid 93 percent of everything that was due," he says.
The campaign contracted with Sign Here for more than just making the ballot, he argues: "It was about making sure circulators were qualified. She promised 80 percent validity — it came in at barely 50 percent. That's not acceptable."
The lawsuit cost the campaign $70,000 in legal fees, and Burks' company "nearly put the campaign in jeopardy," he says.
Scheel admits that he doesn't know whether Judge Rogers would have thrown out enough signatures to void the measure, had the ARA's challenge been filed on time.
"No one ever did the math on our side," he says.
But that isn't the issue, Scheel maintains. Burks didn't properly vet the signature gatherers, which cost the campaign $70,000 by leaving a potential vulnerability for the ARA to exploit.
The campaign recouped $33,500 of the legal fees via a settlement with the ARA, Scheel says. Arizonans for Fair Wages could have asked for up to $55,000 in legal fees, but decide to settle rather than prolong the fight, he says.
Scheel also confirms, as he told New Times in August, that the campaign is about to receive $1.5 million in donations from its national backers to pay for marketing and promotion of the measure in the final weeks before the election. Some of that money has already trickled in, he says, and the campaign has used it to pay 15 of the signature gatherers who haven't received checks from Sign Here.
Burks did such a poor job, Scheel says, that according to the campaign's calculations, she owes the campaign $35,000.
Gathering signatures for a ballot initiative can be a good way to make extra money, typically paying between $3 and $5 per signature.
Gathering signatures for a ballot initiative can be a good way to make extra money, typically paying between $3 and $5 per signature.
"She's a small-businessperson who unfortunately and sadly dropped the ball," he says.
Burks says she's upset and frustrated by the situation. Signature gatherers keep contacting her, asking when they'll get their last checks.
"They're hurting bad," she says. "My phone's blowing up every day."
By her account, adding in the $1,000-a-day late fee, Arizonans for Fair Wages now owes her company $143,000.
"I'm standing firm: You owe the money, you need to pay it," she says.
Burks says she doesn't have the money to pay the petition gatherers the remainder of what they're owed and says she made "no profit" on the project. Campaign officials took advantage of Sign Here to make a strong final push to collect more signatures before the July 7 deadline, even though they were broke at the time, she adds.
"They told me in the last week: Get as many as you can because our volunteer efforts suck," she says. The workers came up with an additional 35,000 signatures.
"My team and I, we worked so hard in the 120-degree heat," she says. "I was paying bonuses. I haven't made one damned dime on it. I really wanted to see it happen, for the people."
At least one signature gatherer is suing Burks in Maricopa County Justice Court.
Donna Fox worked for Sign Here before returning home to Kingsport, Tennessee. She has been staying in Scottsdale for the past couple of weeks, making the nearly 2,000-mile trip to resolve the issue.
Fox says her work for Sign Here was impeccable, and that Burks' company owes her $1,320 for her last week's work. She is suing for three times that amount, as allowed under state law.
She could probably make a deal to get her money from Arizonans for Fair Wages, Fox says. "But I don't trust them."
Even if she wins her suit, Fox says she's not sure whether she'll ever see her money. But she's hoping Burks wins her suit against the campaign, which Fox believes treated Sign Here badly.
"This is like Donald Trump strategy," Fox says of Arizonans for Fair Wages. "You can do the work, but we're not paying you. They don't walk the walk they're talking. This is nothing more than business for them."
As for Burks, with whom Fox says she shares a friendly, albeit contentious, relationship: "I chew her out all the time. I tell her she's a complete shithead because she led people to believe the check was in the mail."
The campaign offered to settle the suit for $32,500, Burks says, but she turned them down because it wouldn't cover the money she owes to the petition gatherers.
"My circulators really need their money to pay rent and put food on the table," Burks says. "I believe Arizona Fair Wages just don't care about the people who worked so hard to get their issue on the ballot."
By BY RAY STERN
Source
Last-Minute Schedule Changes? Some Cities Say Employers Must Pay
Last-Minute Schedule Changes? Some Cities Say Employers Must Pay
Dec. 1 — More than a dozen states and cities in the past year considered legislation to require retail stores and restaurants to provide extra pay to employees for last-minute work schedule...
Dec. 1 — More than a dozen states and cities in the past year considered legislation to require retail stores and restaurants to provide extra pay to employees for last-minute work schedule changes. Thus far only a handful of cities have enacted such measures into law.
These predictive or predictable scheduling proposals, also called fair workweek measures, were “very popular” in 2016, John S. Hong, an employment law attorney with Littler Mendelson in San Francisco, recently told Bloomberg BNA.
“But they died on the vine in a lot of states,” Hong said.
In addition to providing “predictability” pay, these measures would require employers to notify workers about their schedules a certain number of weeks in advance under predictive scheduling proposals. They also include “access to hours” provisions that require employers to offer newly available hours to part-time staff before hiring new workers or using contractors or staffing agencies.
Worker advocacy groups praise these measures as providing secure, clear and stable scheduling for workers. But employers counter that these requirements remove the flexibility needed for retailers and restaurants to operate their businesses effectively.
Predictive Scheduling Is ‘The Next Fight.’
Predictive scheduling bills this year were withdrawn or never went to a vote in California, Indiana, Kansas, Maryland, Michigan, New York and Rhode Island.
Similar bills or provisions died in Connecticut, Illinois, Maine and Oregon in 2015.
Washington, D.C., also tabled a predictive scheduling proposal this year, while a court rejected a ballot initiative on the issue in Cleveland, Hong said.
Still, employee advocates said the number of jurisdictions that have considered scheduling laws is encouraging.
Introduction of the bills initiates public conversations among workers, employers and policy makers about the issue, they said.
“They begin the legislative process, which can take multiple years,” Elianne Farhat, deputy campaign director of the Center for Popular Democracy’s Fair Workweek Initiative.
Predictive scheduling is “the next fight,” following the success of the “Fight for $15" minimum wage initiative, Farhat told Bloomberg BNA Nov. 30.
“The issue will continue to pick up steam and move forward,” she said.
Two Cities Join San Francisco
Two cities this year enacted predictive scheduling laws. Seattle and Emeryville, Calif., followed in the footsteps of San Francisco, which passed the nation’s first ever predictive scheduling law in late 2014
Rules implementing San Francisco’s ordinance went into effect in March 2016. They apply to businesses that have 20 or more employees in the city and at least 40 retail sales establishments worldwide.
Seattle and Emeryville’s laws take effect in 2017.
Seattle’s law applies to retail and quick or limited food-service establishments with more than 500 employees worldwide and full-service restaurants with more than 500 employees and 40 full-service locations worldwide.
Emeryville’s law applies to businesses with more than 55 employees worldwide.
New Hampshire, San Jose Also Pass Laws
On the predictive scheduling periphery are San Jose, Calif., and New Hampshire, which passed narrower laws in the past year.
San Jose voters approved a ballot initiative in November that focused only on access to hour protections for part-time employees, meaning they would be given extra hours prior to hiring others.
New Hampshire in June didn’t quite enact a predictive scheduling law. Instead, it required employers to consider employee requests for flexible working arrangements and prohibited employers from retaliating against workers who made those requests.
The New Hampshire law is “minimal, but still important,” Liz Ben-Ishai, senior policy analyst at the Center for Law and Social Policy in Washington, D.C., told Bloomberg BNA.
Farhat added that Washington, D.C. passed a law guaranteeing a 30-hour minimum workweek for building service workers, although it tabled its broader predictive scheduling law.
Depending on the needs of a particular locality, some cities or states will pass broader scheduling laws, while others pass narrower provisions.
“They’re all part of updating our work hour standards,” Farhat said.
Looking Ahead to 2017
Predictive scheduling bills are pending in New Jersey and Massachusetts, Hong said. But the latter “may die for lack of action” before the end of the year.
A measure also is pending in Minnesota, according to CLASP data, but it may share the same fate as the Massachusetts bill.
Asked if the issue of predictive scheduling will continue to crop up in 2017, Hong said more cities and states may consider such measures. But “ultimately they may die on the vine,” he said.
Ben-Ishai provided a more optimistic outlook for predictive scheduling.
“I think it’s a promising area moving forward,” she said.
State and local lawmakers in Oregon could consider predictive scheduling measures next year, she said. In 2015, a state predictive scheduling bill died in committee, but legislators preempted scheduling ordinances at the local level only until 2017.
Portland, Ore., already has passed a resolution to study and eventually establish workweek principles for city contractors, Farhat said.
New York Mayor Bill de Blasio in September announced that the city is developing legislation that would require predictable work schedules for about 65,000 hourly fast-food employees in the city.
Predictive scheduling is expected to come back in Washington, D.C. next year “in a very serious way,” Farhat said. And California may onceagain consider a statewide measure, she added.
Don’t Forget About State Preemption Laws
Hong observed that several states have preemption laws that prevent cities, towns and counties from passing workplace laws that conflict with state or federal law.
About 22 states so far have expressly preempted localities from adopting such laws, like those that would raise minimum wages, provide leave benefits or expand workplace anti-discrimination protections. Most of these state have enacted the laws within the last five years., Lawmakers in about 11 other states have introduced similar bills so far in 2016.
At least five states—Alabama, Arizona, Indiana, Kansas and Michigan—have laws that could preempt local predictive scheduling laws, Hong said.
Preemption laws don’t necessarily indicate that legislatures are against fair scheduling, he said. “They don’t want local governments doing something potentially inconsistent with state law,” Hong said.
But Ben-Ishai contended that preemption laws can be a strategy taken by lawmakers who “are not friendly to workers’ rights.”
Federal Predictive Scheduling Law?
A federal predictive scheduling bill known as the Schedules That Work Act ( H.R. 3071, S. 1772) was introduced in both houses of Congress in July 2015.
The identical bills were sponsored by democrats and have remained stalled in committee. They are unlikely to be considered for a vote before the year ends.
Ben-Ishai said she expects the bills’ sponsors, Sen. Elizabeth Warren (D-Mass.) and Rep. Rosa DeLauro (D-Conn.), will reintroduce the legislation in the next Congress.
But given Republican control of both Congress and the White House, Ben-Ishai said, “I don’t think we’re super optimistic about it moving forward.”
Predictive scheduling will have a better chance at seeing “more movement” at the state and local levels, she said.
By: Jay-Anne B. Casuga
Source
The Fed can't afford to ignore the 'anguished cry' of working people
The Fed can't afford to ignore the 'anguished cry' of working people
The narrative emerging from the aftermath of the 2016 election is that Donald Trump won the U.S. presidency on the back of populist economic insecurity, elected by voters who felt left behind by a...
The narrative emerging from the aftermath of the 2016 election is that Donald Trump won the U.S. presidency on the back of populist economic insecurity, elected by voters who felt left behind by a globalized economy. While the official unemployment rate continued its descent below 5 percent, Trump claimed a 'real' unemployment rate of 40 percent was driving the frustration.
That rate is drawn from Trump's overactive imagination - like many of Trump's ravings. But the fact that workers so readily believed him while responding so eagerly to his economic message reflects the reality that wages have been stagnant for decades and that we are nowhere near a galloping economy. You'd be hard-pressed to find many Americans who believe the economy is so strong that it needs to be slowed down by higher interest rates right now.
The economic discontent is grounded in data. New research from economists Thomas Piketty and Emmanuel Saez shows that the bottom half of the population in the United States has experienced zero growth since the 1970s.
Even though average national income per adult grew by 61 percent from 1980 to 2014, the average pre-tax income of the bottom 50 percent of individual income earners stagnated at about $16,000 per adult after adjusting for inflation. Meanwhile, income more than doubled for the top 10 percent, more than tripled for the top 1 percent, and for those in the top 0.001 percent, grew more than seven times.
This week, the Federal Reserve is nearly certain to hike interest rates for the second time in a decade, following last December's quarter-point increase in the federal-funds rate. This tightening of monetary policy is intended to slow down economic growth, reduce job creation, and prevent wages from rising.
In the wake of the 2016 election, do Fed officials really think that the American people want a slower, weaker economy than the one we have now?
"The Fed is one of the few institutions that remains largely independent from presidential interference and it must step up to the leadership that these times demand."
The Fed is now more important than ever. We are entering an era in which President-elect Donald Trump will control the Treasury Department and Republicans will control both houses of Congress. Federal public policy will be aimed at further enriching the 1 percent and leaving American workers out in the cold.
The Fed is one of the few institutions that remains largely independent from presidential interference and it must step up to the leadership that these times demand. The Fed needs to be an ally for working families during a period when they are otherwise under assault from every other part of government.
This week, Fed policy-makers will point to the November jobs report, showing a decline in unemployment to 4.6 percent from 4.9 percent the previous month, to justify a rate increase. Much of this decline can be attributed to people who've simply given up looking for work -- or, in economic parlance, a decline in labor force participation.
A far more accurate indicator of a full-employment economy is wage growth, which was weaker in November than it was in preceding months. Wage growth grew 2.5 percent in November on an annual basis, slower than October's 2.8 percent increase and September's 2.7 percent rise.
Wage growth is far from the 3.5 percent or higher we would expect in a full-employment economy.
Inflation, too, has hovered around 1 percent for most of the year, well below the Fed's already-low 2 percent stated inflation target. Tentative rises in September and October, to 1.5 percent and 1.6 percent respectively, hardly call for a pre-emptive interest rise.
If the Fed were to raise rates this week, it would be out of line with rates in Japan and Europe, which are at 0 or in negative territory, and above the U.K.'s rate of 0.25 percent. The central banks in these other countries realize that inflation is not a real threat and that tighter labor markets are a far more important goal.
The Fed should not only take into account the global context but also listen to the anguished cry of working and middle class voters. If the election has taught the Fed nothing else, it should be that we cannot afford to ignore the economic reality of working people.
By Ady Barkan
Source
Activists went all out to save Obamacare. Now they’re fighting for opioid recovery funds.
Activists went all out to save Obamacare. Now they’re fighting for opioid recovery funds.
It’s Phil Krauss’ first time protesting on Capitol Hill. He’s an advocate who kicked heroin three years ago when he was 32 years old. He’s new to organizing but he’s surrounded by veterans, many...
It’s Phil Krauss’ first time protesting on Capitol Hill. He’s an advocate who kicked heroin three years ago when he was 32 years old. He’s new to organizing but he’s surrounded by veterans, many who were just at the Russell Senate Office Building two months ago trying to save the Affordable Care Act (ACA).
Read the full article here.
What the Campaign’s Focus on Inequality Means for New York
City Limits – September 4, 2013, by Gail Robinson -
On July 21, five candidates for mayor of New York left their usual beds to spend the night in a public housing project in...
City Limits – September 4, 2013, by Gail Robinson -
On July 21, five candidates for mayor of New York left their usual beds to spend the night in a public housing project in Harlem. The sleepover made for good photo opportunities and sound bites––Council Speaker Christine Quinn likened the mold she saw in a bathroom to a horror movie––but it also helped signal that the two New Yorks of Fernando Ferrer’s failed mayoral campaigns have returned to center stage in New York politics.
Public Advocate Bill de Blasio’s recent emergence as leader in the polls has confirmed that. “Bill de Blasio’s Surge is All About Inequality,” blared a recent headline in the New Republic.
While de Blasio has made New York’s “tale of two cities” a centerpiece of his campaign, other candidates also have targeted income inequality, and even many moderates and conservatives see the issue as an important one. “It’s a barbell economy. That’s definitely true,” says Nicole Gelinas, senior fellow at the Manhattan Institute.
Sharp differences exist, however, about how New York should confront this problem and whether anything a New York City mayor can do will make a difference.
Why now
During his first term, it’s said, the word poverty passed through Michael Bloomberg’s lips once or twice. It didn’t seem to hurt him.
Now the problem has emerged as the elephant in the room. Figures released last year found the percentage of New Yorkers living in poverty had increased for three consecutive years, reaching 20.9 percent in 2011. The Economist recently noted that in New York City in 2012 “the richest 1 percent took home close to 39 percent of the income earned in the city, more than double the national figure of 19 percent.” While some of this is due to New York’s status as the home to a lot of really rich people, it also points to a decline in the middle class, as jobs paying less than $35,000 replaced the jobs the recession stripped away.
Given this, income inequality not being an issue in this year’s election “would be like terrorism not being an issue on Sept.12, 2001,” says Joel Berg, executive director of the New York City Coalition Against Hunger. Areport by the Community Service Society (which owns City Limits) found that 70 percent of all New Yorkers––and 74 percent of those with moderate or high incomes––are somewhat worried or very worried about widening inequality in the city.
Organizing around issues such as the living wage and paid sick leave and the message of Occupy Wall Street also helped push the issue forward, as has Bloomberg’s fading presence. “People are reckoning with what New York has become on his watch, and he’s not spending $100 million to pump out an alternative message,” says Andrew Freidman, executive director of the Center for Popular Democracy.
De Blasio and City Comptroller John Liu have been most vocal on the issue. “Addressing the crisis of income inequality isn’t a small task. But if we are to thrive as a city, it must be at the very center of our vision for the next four years,” de Blasio said in the introduction to his position book.
“Economic inequality is ruining our chance for economic recovery,” Liu said in an Aug. 21 debate.
But all the Democratic candidates have acknowledged the problem. “As New York gets more expensive and incomes fail to keep up, millions of New Yorkers are at risk of being pushed out of the city. That’s horrible for them––and it’s bad for all of New York,” former City Comptroller Bill Thompson said in April. While keeping to his 2005 theme of fighting for those in the middle class or “struggling to make it there,” former Rep. Anthony Weiner, now calls for “an oligarch tax.”
Council Speaker Christine Quinn, who has tried to address the concerns of liberal Democrats concerned about the income gap without forfeiting support from the man many blame for it, in February issued a plan aimed at addressing inequality. “We will keep New York City what it has always been, a place where opportunity is given, not just to those who can afford to buy it, but to those willing to work for it,” she has said.
The discussion has given rise to a cautious optimism among some who would like to see the city government shift direction. “There are a lot of good ideas out there, and I hope some of them make it into the playbook of the eventual winner,” says James Parrott, deputy director and chief economist for the Fiscal Policy Institute.
“There’s very little that the Democratic candidates have proposed … that I don’t agree with,” says Berg. But, he added, the question is what their priorities turns out to be and whether they can “mobilize the base without scaring off the middle.”
The limits of power
What, though, can the mayor, any mayor, do? Many of the conditions that have contributed to a rising wealth gap in New York––loss of manufacturing jobs, reduced clout for unions, increasing globalization, the rise of technology––affect the entire nation.
“We’ve seen statistics that show that New York is not any different or any worse in equality than what’s happening in the United States of America,” Republican candidate Joe Lhota said in March. In light of that, he said he did not see any short-term, New York City solutions to the problem.
After largely ignoring poverty in his first term, Bloomberg in his second term began shifting gears a bit. In 2006, he established the Center for Economic Opportunity to look at how poverty is measured and to launch programs to fight it. He followed up with an initiative aimed at young black and Latino men in his third term. While some of these efforts have won praise, overall they have not made any real dent in the percentage of New Yorkers at or near poverty.
The mayor––who undoubtedly would take credit if income inequality abated on his watch––has blamed larger forces for the fact that it hasn’t. After the release of income figures in 2012, a spokesperson for him said the “numbers reflect a national challenge: the U.S. economy has shifted and too many people are getting left behind without the skills they need to compete and succeed … That’s why the mayor believes we need a new national approach to job creation and education.”
But many see that as an easy way out. For one thing, they say, Bloomberg could have done less harm. “Some of the Bloomberg policies have been so wrongheaded,” says Parrott, citing the administration’s opposition to living wage measures and its undermining of contracts for school bus drivers and day care workers. “It’s taking what should be good working class jobs and making them poverty jobs.”
Beyond doing no harm, a mayor can advocate for policies to help the poor, much as Bloomberg has done for gun control. And some say that the mayor of New York is so powerful that many specific policy changes fall well with his or her grasp. The mayor controls a $70 billion budget, Friedman points out and so, he says, “I can think of 100 things the mayor could do.”
In Gelinas’ view, the city can help its low income resident by doing what we expect municipal government to do––enforce laws, protect the streets. “No matter how much you make, you have the right to live in a safe, quiet neighborhood,” she says. “That’s more the city’s job than to make sure everyone earns $80,000 a year.”
Tax breaks for some, hikes for others
No plan for dealing with income inequality has attracted as much attention as de Blasio’s proposal to increase taxes on those earning $500,000 or more to fund early childhood and after-school programs. Most of the Democrats, though, have embraced some changes in the tax system. Liu also calls for a tax on high-earning New Yorkers, saying the money would fund a variety of services, including early childhood education, police and housing for the homeless. Weiner has advocated making the transfer tax on home sales more progressive and upping the tax on homes that are not primary residences. Quinn would try to end the tax on low-income New Yorkers getting the earned income tax credit and, has had said that, if she had to raise taxes, she would do so “progressively.”
Certainly taking money from affluent New Yorkers ––a kind of Robin Hood approach––would reduce income equality in an immediate sense. Many of the proposed changes would require state approval, which could prove dicey. Beyond that, experts disagree over the longer-term impact of any tax hikes.
John Tepper Marlin, who served as chief economist with the city comptroller’s office for 14 years, says he believes the tax system is stacked against those in the lower middle class, the people most experts see at risk of slipping into poverty. Yet he thinks the problem would be best addressed on a national level.
“An attempt to tax the rich will fail because they’ll get away. … You can make a lot of mistakes in New York City and not kill the city, but other cities have been killed,” Marlin says. While he does not think the de Blasio tax hike is high enough to scare people away, he fears some will view it as “an opening wedge for a confiscatory tax.”
Others doubt that, noting that federal income tax rates on high earnersinched over 80 percent in 1941 and stayed over 90 percent until the early 1960s. “The national conversation around taxes has become incredibly one-sided,” says Angela Fernandez, executive director of the Northern Manhattan Coalition for Immigrant Rights. “If we can have a leader that shows some courage and raises taxes, I highly doubt it will affect the flow” of creative energetic people to New York.
Rather than raising taxes, Gelinas says, the city could get money for programs to address the income gap by confronting its long-standing budget problem, particularly the high cost of pensions for many city workers. The Republican candidates have indicated a willingness to do this, she says, and even the Democrats appear to recognize the current system is “not sustainable.”
Where the money goes
The question, though, is not only how to raise money but how to spend it. In targeting the money for early childhood education, de Blasio puts himself squarely alongside education experts who believe early childhood education can have a huge effect on outcomes farther down the road. “For our kids to compete and become the workforce we need, our mantra has to be learning earlier and learning longer,” he said in a speech before the Association for a Better New York.
Berg says the plan would not only provide education but also give poor children two free meals a day under the federal WIC program and help parents with child care. But while Parrot says early childhood education helps “make sure there’s starting gate equality,” he cautions it “is not going to show results right away in terms of reversing income inequality.”
Candidates have proposed other investments in education that they say also will better prepare students for better jobs and incomes. Thompson, who has the endorsement of the teachers union, has called for increased funding of schools and establishing additional pathways for students to graduate from high school prepared for college or careers. He also supports expansion of pre-K.
Quinn envisions “cradle to career” technical education, as well as increased computer training–notably, a technical school for girls in every borough. She would provide more time for high-needs students to learn by extending the school day and launching summer programs, and create so-called community schools that provide an array of social and health services as well as classroom teaching.
Lhota sees education as one of the few areas where the city can make a difference. “The city’s responsibility toward educating its children is the first and foremost thing that we need to do to make sure that inequality goes in a different direction,” he has said. “Our children need to be properly trained so they can work in a global economy.”
Lhota’s Republican rival, John Catsimatidis, has proposed a plan that would create stronger links between vocational education programs and corporations. It would include tax credits and incentives for those companies that invest in career training programs.
But while no one disputes the need for quality education, some question whether increased investment in schools will affect the income gap. After all, they note, Bloomberg already has dramatically hiked spending on schools.
Berg says that Bloomberg has put forth a contradictory narrative, saying on the one hand that education is the best cure for poverty and, on the other hand, that his many education changes have been a success. “Either he’s wrong about education being the only answer” or he’s wrong in saying his education programs worked, Berg adds.
The key, others say, would be in the type of investment in education and the quality of the programs. Fernandez says training often has been too rudimentary, preparing students for low-level jobs. “There’s been a lack of vision and an underestimation of the young people of our city,” she says. Fernandez would like the city to take money from a small increase in taxes and invest it in education to prepare people for high-end jobs: not home health aide, perhaps, but registered nurse.
Freidman believes investing in immigrants, particularly in English classes for them, would have a big payback.
Raising the floor
After peaking before the recession the average annual wage in New York’s private sector, fell sharply and, at the end of 2011, remained below where its 2007 level. In the state as a whole, low-wage jobs—those paying less than $45,000—accounted for 35.6 percent of all jobs in New York State; by June 2013, lower paying jobs accounted for 38.4 percent of the state total. Meanwhile, living in New York City has gotten more expensive, making it difficult for working families to pay the rent and put food on the table. “People see a job as the road out of poverty into the middle class, and it’s not getting them up there now,” says Nancy Rankin, vice president for policy, research and advocacy at the Community Service Society.
With this in mind, the Democratic candidates have all supported hikes in the minimum wage, including the increase to $9 an hour over three years approved by the state this year. Liu has called for the wage to go up to $11.65.
As to whether such policies might cost cities jobs in the long run, that, says policy consultant John Petro will “be an eternal debate.” Gelinas says higher wages prompt employers to replace workers with technology.
On economic development
The decline of manufacturing has left government across the country looking for other sources of good jobs. Bloomberg has joined the search, trying to diversify the city beyond Wall Street. To some extent he has succeeded, boosting tourism, for one, and working to make New York more of a tech center.
Some think he has not gone far enough. “Everybody is excited about high tech, but we have to remember UPS creates jobs too,” Petro says. He would like the city to invest in the kinds of blue-collar jobs currently at Willets Points but threatened by development there as well as white-collar jobs destined for Hudson Yards.
Billionaire businessman Catsimatidis has said his experience crating jobs would transfer to generating more jobs for the city as mayor, though specifics of his plan are scarce. Quinn offers a particularly detailed plan for branching out, calling for 2,000 new manufacturing jobs in Sunset Park, developing “world-class food markets” to spur food manufacturing in the city, building a green mechanics industry in the South Bronx and so on. In some cases, this effort would involve government subsidies and other incentives.
Some question the idea of subsidies to business. Others say that if the city is to hand out money to businesses and rich institutions, it should get a better return on its investment. “We have had an economic development policy that has really amounted to making the rich filthy rich,” Liu has said.
In particular, Liu and other critics fault the Bloomberg administration for not requiring recipients of city subsidies to pay a so-called living wage. The mayor vetoed and, after the Council overrode him, went to court to block a watered-down living wage bill that passed last year; the measure requires the developers receiving certain kinds of subsidies above a high-dollar threshold pay their own employees a living wage—but does not address the larger workforces of the tenant companies who occupy, say, a city-subsidized mall. Quinn, who brokered the compromise for that legislation, has said she would “work to ensure that more of those publicly funded developments are required to provide workers with a living wage and benefits, so working New Yorkers can pull themselves up to the middle class.” De Blasio says any business receiving a city subsidy would have to have “a clear plan” for providing health care to its workers.
Parrott, for one, says such policies are vital: “They can make a real difference right away.”
Friedman would link economic subsidies to “job quality,” giving preference to businesses that don’t oppose unionizing efforts, for example, or that hire workers on a full-time basis.
Some say the city also needs to get more in return for the aid it and the state provides developers, including tax breaks and favorable zoning. This could help solve one of the major problems facing low-income New Yorkers: the lack of affordable housing.
Quinn has pledged to build 40,000 units of middle-income––though not low-income––housing units over the next 10 years. Thompson has called for 70,000 new units and the preservation of 50,000 new ones. De Blasio is promising an even more ambitious plan.
Beyond housing, the candidates have addressed other issues that impact income inequality, such as transportation, making the city more energy efficient, improving access to broadband and making the city better able to withstand another storm like Sandy. Such projects would both make the city a better place and provide jobs.
Mending the safety net
While much of the discussion in this campaign has involved how to help low-income New Yorkers, the candidates and media couch the discussion as being about income inequality, rather than about poverty. Meanwhile, by all accounts, the systems aimed at helping the poor are weaker than they once were. Parrott has written that, even though the number of unemployed people in New York City essentially doubled from 2008 to 2012, the number receiving Temporary Assistance remained relatively constant.
Despite this, there has been little discussion of welfare and other assistance programs. “People are afraid they’ll be seen as encouraging the public assistance roles to rise for its own sake,” Parrott says.
In the spring, Thompson offered a plan to help reduce poverty that included improved job training and improved access to affordable health care and childcare, as well as effort to fight childhood hunger. De Blasio would improve outreach for various assistance programs and streamline the application process. Friedman thinks such efforts could make a difference. “Having a strong social safety net is a crucial first step” in preventing more people from sliding deeper into poverty,” he says.
Right now, with politicians and media focused on the candidates in the Democratic primary–and the largely liberal voters who will choose between them––New York City seems to have evolved away from prevailing attitudes of the Bloomberg years.
“New Yorkers are not buying the argument that the way to help small business and create jobs is to cut regulation and give tax breaks,” Rankin says. Instead, she continues, they have come to realize that “if you want businesses to thrive, you want people who have money to spend.”
Others think the political winds may shift by November or when a new mayor comes to office. “At the end of the day,” says Petro, “most voters are probably still going to care about taxes, picking up the trash and crime.”
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