AFT’S $2.6 Million Bayou State Pay
Tuesday’s Dropout Nation analysis of American...
Tuesday’s Dropout Nation analysis of American Federation of Teachers’ 2014-2015 financial disclosure to the U.S. Department of Labor certainly offered plenty of insight on how it is buying influence on the national level. But the nation’s second-largest teachers’ union’s applies its influence-buying most-fervently on behalf of its locals, especially in big cities that are the battlegrounds in the battle over the reform of American public education. This is especially clear in Louisiana, where the union has spent $2.6 million to oppose the reforms in New Orleans and the rest of the state that run counter to the union’s very mission.
Since the damage from Hurricane Katrina (and the longstanding failures of the U.S. Army Corps of Engineers to ensure that levies surrounding the city could stand up to potential disaster) a decade ago, the Crescent City has become the epicenter of one of the nation’s most-important systemic reform efforts. Thanks to the Louisiana state government’s takeover of failing schools run by the Orleans Parish district, and the move to transform them into charter schools (as well as open new ones), New Orleans has now become the model of sorts for expanding school choice. Charter schools serve 79 percent of the city’s children (as of 2012-2013), according to the National Alliance for Public Charter Schools.
The transformation hasn’t been perfect by any means. There is still lingering anger among residents over how the state essentially implemented the reforms without their input. The quality of public education, though improved, is still nowhere near it should be, especially in Orleans Parish-run schools. As the Center for Reinventing Public Education also points out, the need for building out the infrastructure for families to exercise choice in informed ways also remains; this includes addressing transportation issues that result in kids traveling for as long as two hours from one part of town to another just to go to school.
All that said, the results for kids have been amazing. As Tulane University Professor Doug Harris determined in his assessment of public school performance in New Orleans, the improvements in student achievement were greater than those made by traditional districts in other cities and even better than those that could be achieved by tactics traditionalists tend to tout such as class-size reduction schemes. This is good for kids in the Crescent City and for their families, who have been subjected to the abuse of both the educational and criminal justice systems of the Bayou State for far too long.
None of this is good news to the ears of AFT, its Crescent City local, United Teachers New Orleans, or the Louisiana Federation of Teachers, the union’s state affiliate. After all, if children in New Orleans are getting higher-quality education through a Hollywood Model style of delivering teaching and curricula, than there is no need to keep the obsolete traditional district model upon which AFT (along with National Education Association) derive its influence and ideology. As it is, charters have become the dominant players in cities such as Detroit, and Washington, D.C., in which AFT operates. Given that unlike NEA, AFT has little penetration in suburbia, propagandizing against growth of charters in New Orleans — along with stopping the expansion of choice — is critical to the union’s long-term survival.
It also about the cold hard cash and power of its local. Before Katrina, UTNO had a stranglehold over education policies and practices within Orleans Parish, and had the ability to forcibly collect dues from 7,500 teachers and other employees working for the district. But with all but a smattering of schools still operated by Orleans Parish — and charter schools having the ability to not bargain with the union if they so choose — UTNO no longer has the bodies or the money necessary to oppose systemic reform. Some 1,000 teachers and others now likely make up the union’s rank-and-file, 87 percent less than the numbers on the rolls a year before Katrina reached landfall. This, in turn, isn’t helpful to AFT, whose own revenue is derived from the per-capita tax collected from every teacher and school employee compelled to pay into its units.
But AFT isn’t just concerned about New Orleans alone. After all, the Bayou State has been among the foremost states in expanding school choice and advancing systemic reform. This includes outgoing Gov. Bobby Jindal’s successful expansion four years ago of the state’s school voucher program, which now serves 7,400 children attending 141 private and parochial schools. Eight seats on the Bayou State’s Board of Elementary and Secondary Education, which oversees the department run by Supt. John White, are also up for grabs. There’s also the possibility that the Recovery School District, which oversees systemic reform in New Orleans, could also end up taking over failure mills in Baton Rouge and other cities. Particularly in Louisiana’s capital city, just 50 percent of kids attending traditional public schools there met proficiency targets in 2013-2014.
Another hotbed, until recently, was Jefferson Parish, whose board was under the control of a reform-minded majority. Back in 2012, the board decided to ditch its contract with AFT’s Jefferson Federation of Teachers and negotiate for a deal that would give the district more flexibility in operation. This didn’t sit too well with the unit, which then sought national’s help in putting the district back under its thumb.
So AFT has put a lot of energy and money into demonizing Crescent City reform efforts — and stopping reform in the rest of the state.
The union subsidized UTNO to the tune of $134,593 in 2014-2015, four times levels given to the unit during the previous year. At the same time, the union kicked another $59,294 into the organizing project it controls along with the local; the union also paid teachers’ union-oriented law firm Rittenberg, Samuel & Phillips $57,654 to handle a variety of lawsuits, including one filed against Orleans Parish over the layoff of black teachers working in the district before Katrina reached shore. Over the past two years alone, AFT poured $754,878 into propping up UTNO and helping it rebuild its membership.
AFT’s work in New Orleans goes beyond subsidizing UTNO. The union has spent big on events and meetings. This includes dropping $80,490 on meeting space and “reimbursable expenses” at the swanky Loews New Orleans Hotel, $9,840 at the more-humble Homewood Suites, and $7,700 at one of the several Marriott hotels in town. Expect AFT to have dropped even more money this fiscal year for this week’s “Advancing Racial Justice” gathering, which will feature several of the union’s prime vassals, including the Schott Foundation for Public Education, Center for Popular Democracy and the Alliance to Reclaim Our Schools, all of whom are making the trip as condition of being beneficiaries of the largesse the union gets forcibly out of the pockets of teachers. AFT also spent $10,843 on materials printed by Simmons Press, a local outfit, for print materials, paid $7,500 to Lamar Media for billboards, and dropped $17,921 on ads in the Times-Picayune.
But never forget that AFT will play all the political angles. This includes going so far as to attempt to unionize the very Crescent City charters it opposes. The union subsidized its New Orleans Charter Organizing Project to the tune of $244,070 in 2014-2015. As with a similar effort in Los Angeles, AFT hopes that it can get teachers working in charters to forget all the bad things the union says about them and let it collect dues out of their precious paychecks. Lovely.
Meanwhile AFT put plenty of dough into efforts in the rest of the Bayou State. It subsidized Louisiana Federation of Teachers and its various political action funds to the tune of $462,965. While 13 percent less than in 2013-2014, it still means that AFT has sunk $995,790 into the state affiliate over the past two years. The union also paid $20,000 to lobbyist Haynie & Associates for its work at the statehouse. AFT also backed the East Baton Rouge Federation of Teachers and its organizing project to the tune of $222,420, while spending another $10,501 on so-called “Member-related costs” at a Doubletree hotel in the city. In the state’s northeast sector, AFT subsidized an organizing project focused on helping an affiliate in Monroe at a cost of $104,363. In Caddo Parish, where the AFT got involved in stopping an effort to create a new school district, the union put $224,002 into an organizing project there.
AFT’s biggest spend –and best bang for the buck — came in Jefferson Parish, where its local had lined up a slate of candidates to take out the reform-minded majority. The union put down $669,135 to fund a so-called “Committee for School Board Accountability”, which ran adds backing the local’s favored candidates. It also subsidized an organizing project there (which, as you would expect, was partially tied to rallying members to vote on Election Day) to the tune of $186,837. The union also sent paid $23,911 for hotel and meeting space at a Sheraton Hotel in Metairie, where the district’s offices are located, as well as $5,553 for room-and-board at an Extended Stay hotel.
It was money well-spent. By last December, three of the four candidates AFT and Jefferson Federation of Teachers backed won seats, giving the union a five-to-six-seat majority on the nine-member board. AFT President Rhonda (Randi) Weingarten celebrated the victory with a press release as well as two tweets on Twitter. Eight months later, the district struck a new contract with the AFT local, albeit one that is a mere seven pages long (versus 100 pages for the previous deal), and requires teachers to resolve differences with school leaders before going to the union for help. At the end of the day, a contract with the district means dollars that continue to flow into AFT’s coffers. And for the union and its 229 staffers earning six-figure salaries, that’s always a good thing.
You can check out the data yourself by checking out the HTML and PDF versions of the AFT’s latest financial report, or by visiting the Department of Labor’s Web site. Also check outDropout Nation‘s new collection, Teachers Union Money Report, as well as for the collection,How Teachers’ Unions Preserve Influence, for this and previous reports on AFT and NEA spending.
Source: Dropout Nation
April 15: National Protests on Tax Day Demand Trump Release His Tax Returns
April 15: National Protests on Tax Day Demand Trump Release His Tax Returns
Working Families Party, Thousands to Protest in NY, DC and Nationwide Rallies Demanding Trump Release His Tax Returns...
Working Families Party, Thousands to Protest in NY, DC and Nationwide Rallies Demanding Trump Release His Tax Returns
WASHINGTON - Today, the National Working Families Party announced their participation in the Tax Day March. President Trump’s financial ties to Russia are causing growing questions for both Democrats and Republicans. As a result, thousands of people plan to gather in Washington, D.C., on Saturday, April 15, 2017, at 11 a.m. The Tax March was an idea that started on Twitter, but has gained momentum on and offline, with over 135 marches planned in cities across the country.
Read full article here.
Spreading a Minimum Wage Increase From Los Angeles to the Whole Country
Our economy has long been out of balance. Workers' efforts across the country create wealth, but the profits don't get...
Our economy has long been out of balance. Workers' efforts across the country create wealth, but the profits don't get to the working people who produce them. Correcting that so that workers are paid enough to sustain their families and make ends meet, is not easy. It requires changing rules that unfairly favor the rich and are written by politicians beholden to the wealthy. That's why the recent move by Los Angeles to raise the minimum wage to $15 is so meaningful.
Conceived and fought for by workers and grassroots organizations, the $15 minimum wage is a people-powered victory that will improve the lives of Angelenos for generations. More importantly, this victory signals an irreversible change in the broader fight for a decent wage in cities around the country. It inspires hope that we can finally make work pay enough to live on.
The brave families that fought for change include people like Sandra Arzu, a single mother who works for Health Care Agency at $9 per hour - barely enough to survive in Los Angeles. It is people like Sandra and their families who power the country's second-largest city.
Just like Sandra, other mothers, brothers, sales representatives and servers around the country deserve the opportunity to sustain their families. Everyone who works hard should be able to make ends meet.
We came together in Los Angeles for our families, but also to join something bigger than us. We saw what was done in other cities - San Francisco, Chicago and Seattle have all raised their minimum wage recently - and we picked up on that momentum.
Through organizing and hard work, our communities stood together and demanded change. Organizations like Alliance of Californians for Community Empowerment, the Center for Popular Democracy, and our partners and allies brought workers to the forefront and helped make history.
The result speaks for itself: an increase in the minimum wage in yearly increments, reaching $15 by 2020 for large employers. Businesses with 25 or fewer employees will have more time, until 2021. A recent study with comparable figures shows that almost 800,000 people stand to benefit. That's more than 40 percent of LA's workforce. And there will be further increases to the minimum wage with rising consumer prices, meaning that minimum wage workers won't fall further behind. It's not hyperbole; this is a victory for generations of Angelenos to come.
In New York, there is a vibrant Fight for $15 movement that has already led to Gov. Andrew Cuomo taking initial steps in favor of an increase in wages for tipped workers. Organizers in Oregon and Washington, DC are gearing up to make minimum wage fights a big part of their agendas next year. Other cities looking at increases include Portland, Maine, Olympia; Tacoma, Washington; and Sacramento and Davis, California.
Here is some of what this could mean across the country. No one will get rich off a $15 minimum wage; it adds up to just over $31,000 per year for a full-time worker. But there will be enormous benefit for local economies and household budgets. Poverty will be reduced.
According to the National Employment Law Project, a full 42 percent of U.S. workers make less than $15 per hour. People of color are overrepresented in jobs paying less than $15 an hour, and female workers make up 54.7 percent of those making less than $15 per hour, even though they make up less than half of the overall U.S. workforce. African-American workers make up about are about 12 percent of the total workforce, but they account for 15 percent of the sub-$15-wage workforce. Latinos constitute 16.5 percent of the workforce, but account for almost 23 percent of workers making less than $15 per hour. Inequality is never acceptable, and a $15 minimum wage would mean enormous progress in fighting it.
Ultimately, the fight in LA and around the country is about determining what kind of country we want to live in. In LA, we did it, and we continue the fight across the country until everyone who works can make ends meet and have a say in their future. The future for the fight for $15, our households and children looks a little brighter thanks to the victory here. We can't wait to see what our friends in other cities will do to take this fight further.
Source: Truthout
Activists from around the country to march, hold workshops in Pittsburgh
Activists from around the country to march, hold workshops in Pittsburgh
An estimated 1,500 demonstrators will hit the streets of Downtown Pittsburgh this afternoon — and both geographically...
An estimated 1,500 demonstrators will hit the streets of Downtown Pittsburgh this afternoon — and both geographically and politically, they expect to cover a lot of ground.
The “Still We Rise” March, which kicks off a two-day gathering of activists from around the country, begins at 2:30 and will feature stops including the Pittsburgh branch of the Federal Reserve, the headquarters of UPMC and the Station Square office of Pennsylvania Sen. Pat Toomey.
Ana Maria Archila, co-director of the Center for Popular Democracy, which is organizing the gathering, said the activists are turning out to put the spotlight on issues communities face such as economic inequality, racism and xenophobia.
“… We will win our rights,” she said, adding that the event “is really the launch of a national grassroots community.”
In fact, the “People’s Convention” at the David L. Lawrence Convention Center expects to attract over 40 progressive groups from 30 states, focusing on issues ranging from immigrant rights and racial equity to environmental concerns and public schools advocacy. A parallel program will involve policy discussions among progressive elected officials: Pittsburgh Mayor Bill Peduto and City Councilor Daniel Lavelle are among those participating.
The event “reflects what we’re trying to do in Pittsburgh, on a national level,” said Erin Kramer, executive director of activist group One Pittsburgh.
Here as elsewhere, organizers have pressed fast-food employers to raise minimum wages to at least $15 an hour, and fought for a city ordinance requiring employers to grant paid sick leave to workers. Other cities are weighing “fair scheduling” ordinances that require giving workers earlier notice about, and input on, their work schedules.
Immigration issues, which have become a critical issue in this year’s presidential race, also will be a key topic. While Ms. Kramer said the convention is about more than electoral politics, Republican presidential candidate Donald Trump “is really a threat for a lot of participants. He’s literally talking about building walls and sending people home. You may see a Trump puppet in the parade, more as a rodeo clown than anything else.”
The agenda may seem sprawling. “It is hard to weave these things together,” Ms. Archila admitted. One goal of the convention is for participants to craft a “statement of unity” outlining a vision to guide future activism.
But “all of our issues are interconnected,” said Pittsburgh education activist Pam Harbin, who will attend the convention to discuss tactics and lessons with organizers from elsewhere. “A $15 minimum wage is deeply connected to the fight for quality schools, because if you have parents working three jobs, you really can’t ask, ‘Why aren’t these parents more involved in their kids’ education?’”
Campaigns for higher wages or better worker protections often concentrate on the federal level. But with Washington in a partisan deadlock, activists are increasingly pressing for change locally.
“In some ways, people became more reliant on the federal government, and that took some of the wind out of the sails of local activism,” said Lisa Graves, executive director of the left-leaning Center for Media and Democracy. “But seeing the federal government crippled is an opportunity to reinvigorate local democracy.”
There are perils to the approach, as Pittsburgh has learned. Here as elsewhere, while progressives may control city hall, conservatives often rule state capitals.
State law has barred enforcing a Pittsburgh law to require the reporting of lost-and-stolen firearms, for example. And last December, an Allegheny County judge struck down ordinances requiring paid sick leave for employers, and special training for building security guards. A 2009 Supreme Court ruling barred municipalities for setting such rules for employers, Judge Joseph James ruled.
“It’s a growing trend to see these special interests using their access at the state level to preempt local democracy,” Ms. Graves said. This weekend will feature discussions of the challenge, but because states can limit local authority, “It’s extremely difficult to overcome.”
And a local ordinance may not help struggling families across the city line — at least not immediately.
Still, said Ms. Kramer, “If you lift the minimum wage in one place, people say, ‘Why not me?’ You have to start by painting an alternative picture.”
By Chris Potter
Source
In The Battle To Raise Minimum Wages, Businesses Opposed Are Outgunned
In The Battle To Raise Minimum Wages, Businesses Opposed Are Outgunned
This is the third post in a series about ballot measures to raise the minimum wage in Colorado and three other states....
This is the third post in a series about ballot measures to raise the minimum wage in Colorado and three other states. The first post introduced a restaurateur in Denver who supports the increase and the national organization that persuaded him to go public with that support, is here. The second looked at how the provision could widen inequality among servers and kitchen workers.
There are 32 mostly state and local business associations that have signed on to Keep Colorado Working, the coalition formed to fight Amendment 70, which would raise the state’s minimum wage through a constitutional amendment. Only one of them, however, has actually contributed money to fight the ballot measure: The Colorado Restaurant Association and its political action committee have spent $359,000, which makes it the single largest Colorado contributor to campaign, which has raised $1.7 million to date.
Indeed, while dozens of local food services businesses have chipped at least $105,000 to the effort, which has raised $1.7 million to date, more than $1 million has come into the coalition’s coffers from out of state, including $850,000 from a shadowy business group called the Workforce Fairness Institute. Other large national contributors include Darden, the Olive Garden’s parent corporation, and the National Restaurant Association.
But all this is far less than the $2 to $3 million that opponents had anticipated spending to try and defeat the amendment. And it is dwarfed by the $5.2 million that advocates for the vote, working under the name Colorado Families for a Fair Minimum Wage, have raised. Most of their money has come from national unions and union-backed organizations like The Fairness Project and progressive philanthropies like the Center for Popular Democracy and the Civic Participation Action Fund.
In a campaign awash with money, the efforts of Business for a Fair Minimum Wage, which has been organizing Colorado businesses to support the amendment, are fairly modest. Business for a Fair Minimum Wage founder and C.E.O. Holly Sklar won’t say how much her group is spending in Colorado, but the effort is being funded by Dr. Bronner’s, the organic soap-maker with a long history of activism. (She declines to further identify its funders, except to say that they comprise businesses and foundations.) Dr. Bronner’s has made raising the minimum wage a top company priority, even relabeling some of its soap bottles with “Fair Pay Today!” “People should be able to make ends meet on the wages they get,” says David Bronner, C.E.O. of his family’s company, which is registered as a benefit corporation. “They should not have to rely on inefficient government programs like food stamps and housing assistance. Taxpayers should not have to subsidize companies using the welfare system to keep wages low.”
Bronner says his company has given about $75,000 to Business for a Fair Minimum Wage. “We really like what they’re doing,” he says. “I think it’s really important that policy makers hear from business owners, that business owners too see value in raising the minimum wage, and it isn’t just about labor groups and worker rights.”
Outside of Colorado, business groups have mounted little more than token opposition. In each of Arizona, Maine, and Washington, where advocates have raised over $1 million to promote their respective ballot measures, opponents have raised $100,000 or less, according to state campaign finance records. The Arizona Restaurant Association sued to try and prevent the minimum wage from making the November ballot, but hasn’t spent any money combating it since then. (The group’s president and C.E.O., Steve Chucri, didn’t respond to requests for comment.) The state chamber of commerce has agreed to kick in $20,000.
In Maine, the state restaurant association has spent nearly $78,000 to fight the ballot amendment through its political action committee, but apart from small contributions from Darden ($7,500) and the National Restaurant Association ($2,500), the opposition has recorded no contributions from out of state.
It’s not clear — even to some of the principals — why Colorado became the battlefield of choice in the fight over minimum wage at the expense of media outlets in Arizona, Maine, and Washington. “Why they’re not putting money to fight it here is a mystery to me,” says Maine Restaurant Association president and C.E.O. Steve Hewins of the national organizations, though he allows that “Maine to a degree is off a lot of radar screens.”
The National Restaurant Association declined to respond directly to Hewins’s charge of neglect. But in an emailed statement, the organization’s spokesman, Steve Danon, wrote, “While we work in partnership, our state restaurant associations take the lead on these issues, as they know what works best for restaurateurs in their state. We’ve been vocal on opposing drastic increases to the minimum wage overall.” The Workforce Fairness Institute and Darden didn’t respond to a request for comment.
But Tyler Sandberg, who is managing the Keep Colorado Working campaign, suggests that perhaps national groups are drawn to the Colorado initiative because, as a constitutional amendment, it “is the worst-written of all of them.” But he also says he’s made a point of soliciting those contributions. “When we saw all the national money coming in on the other side, we realized we would have to fight fire with fire and seek national contributions as well.”
Sklar says her pro-wage-hike business group is focusing on Colorado because the Arizona and Washington measures also include paid sick leave, which is beyond her group’s scope, and in Maine a local small-business coalition is pressing the case.
In any event, the vast sums spent in Colorado appear to have made little difference. Polls in all four states show the wage increase winning by similar margins, with 55 percent to 60 percent of voters backing it.
By Robb Mandelbaum
Source
Hold the Fed Accountable: Opposing View
USA Today - March 17, 2015, by Mark Weisbrot - Should the Federal Reserve raise interest rates in order to create more...
USA Today - March 17, 2015, by Mark Weisbrot - Should the Federal Reserve raise interest rates in order to create more unemployment and keep wages from rising? If the question were asked that way, the vast majority of Americans would say, "No!"
It is not posed in this manner, even though economists — including Fed economists — and many journalists who write for the business press know that this is exactly what the Fed will be doing when it raises interest rates.
Of course, the justification is that we "need" to do this in order to keep inflation from rising to harmful levels. But the Consumer Price Index is actually down slightly for the year ending in January; in other words, inflation is in negative territory. Why should anyone want to increase unemployment just to keep inflation down?
OUR VIEW: Why it's good news if Fed loses 'patience'
When the Fed increases unemployment, it increases it twice as much for African Americans as for everyone else. And higher unemployment also reduces wage growth much more for African-American workers and lower-wage workers. Across the board, more unemployment translates very directly into more income inequality.
This is no time to be increasing unemployment and inequality, and pushing down wages. Median household income in the U.S. is still down about 3% since the recession ended in mid-2009. For the vast majority of the workforce, wages have stagnated or declined since 1979. Meanwhile, in the first three years of the current economic recovery, the top 1% of Americans received 91% of all income gains.
Fortunately, for probably the first time in the Fed's century of existence, there is a grass-roots movement to hold America's central bank accountable to the voters, citizens and working people of this country. A coalition led by the Center for Popular Democracy is "Fed Up" and trying to make sure that the Fed doesn't cut off wage growth before it even gets rolling.
If America is to shed the title of "Land of Inequality," this is how it is going to happen: by more people becoming aware of how the Fed's monetary policy affects them and demanding that it change.
Source
Rivera and Camara Put Up Immigration Bill They Admit Won’t Pass This Session
New York Observer - June 16, 2014, by Will Bredderman - Four days before the legislative session in Albany ends for the...
New York Observer - June 16, 2014, by Will Bredderman - Four days before the legislative session in Albany ends for the summer, Bronx State Senator Gustavo Rivera and Brooklyn Assemblyman Karim Camara have proposed sweeping legislation granting full citizenship rights to undocumented immigrants living in New York state–legislation which even they admit will not get passed this session.
The bill that Mr. Rivera and Mr. Camara have sponsored will grant the right to vote in state and local elections, college financial aid, access to Medicare, drivers’ licenses, medical and chiropractic licenses and full civil rights protections to the three million-odd foreign nationals currently living in New York State without proper paperwork. The immigrants would be required to show proof of identity, proof they have lived in the state for three years, proof they have paid state taxes for three years, proof they have and will continue to obey state laws and a willingness to do jury duty.
“This is a bold idea. And we do not expect anything to pass quickly. But this sets things in motion,” Mr. Rivera, comparing the legislation to the push to legalize same-sex marriage, said at a press conference in Battery Park.
“The defeat of Cantor has made it clear we have to act quickly to protect the rights and privileges of all people living in this state,” Mr. Rivera said.
The bill would only pertain to the undocumented immigrants’ interactions in New York State, and would do nothing to alter federal recognition of citizenship, federal border security, or federal deportation policies.
Source
A Democratic Contender For Florida Governor Appears To Own Millions In Puerto Rican Debt
A Democratic Contender For Florida Governor Appears To Own Millions In Puerto Rican Debt
“If you are running to represent Puerto Ricans, and potentially harming Puerto Ricans through investments, then Puerto...
“If you are running to represent Puerto Ricans, and potentially harming Puerto Ricans through investments, then Puerto Ricans will hold you accountable,” said Julio López Varona of the Center for Popular Democracy, one of the leading activist groups on the Puerto Rican debt crisis. “There’s a question about what are those investments, and if that question is not answered that is extremely concerning.”
Read the full article here.
Ten Ways to Combat Upward Redistribution of Income
Moyers & Co - January 1, 2015, by Dean Baker - The big gainers in the last three decades (aka the one percent) like...
Moyers & Co - January 1, 2015, by Dean Baker - The big gainers in the last three decades (aka the one percent) like to pretend that their good fortune was simply the result of the natural workings of the market. This backdrop largely limits political debate in Washington. The main difference is that the conservatives want to keep all the money for themselves, while the liberals are willing to toss a few crumbs to the rest of the country in the form of food stamps, healthcare insurance, and other transfers.
While the crumbs are helpful, the serious among us have to be thinking about the unrigging of the economy so that all the money doesn’t flow upward in the first place. Here are 10 ways in which we should be looking to change the structure of the market in 2015 so that all the money doesn’t flow to the one percent.
In all these areas changes will be difficult, since the one percent will use their wealth and power to ensure that the rules not be rewritten to benefit the bulk of the country. However, this list should provide a useful set of market-friendly policies that will lead to both more equality and more growth.
1. Expanded Trade in Medical Care
The Affordable Care Act extended coverage to millions of people and, for the first time, allows people the freedom to quit jobs they don’t like and still have access to insurance. Nonetheless, we still pay close to twice as much per person for our health care as people in other wealthy countries.
If our trade policy were not dominated by protectionists, it would be directed toward making it easier for qualified foreign physicians to practice in the United States, potentially saving patients tens of billions every year. Even with the federal government committed to protectionist policies, nothing stops state governments from seeking out lower-cost care for Medicaid patients in other countries. The savings, which can run into the hundreds of thousands of dollars in some cases, can be shared with beneficiaries.
2. Prescription Drugs
This is part of the healthcare story, but a big-enough part to deserve a separate mention. Patent monopolies can allow drug companies to charge prices that are 100 times higher than the free-market price. The hepatitis-C drug Sovaldi sells in the United States for $84,000. The generic version is available in India for less than $1,000. State Medicaid programs can pay to send patients to India, along with one or more family members, and still have tens of thousands of savings that can be shared with beneficiaries.
3. Wall Street Sales Tax
The financial sector continues to rake in money at the expense of the rest of the country, courtesy of bailouts, too-big-to-fail insurance, and being largely exempt from taxes applied to other industries. Even the IMF argues that the financial sector is undertaxed.
While most members of Congress and presidential candidates are too indebted to Wall Street to push for a financial-transactions tax, states can get a foot in the door. It is possible to tax the transfer of mortgages on property within the state. A modest tax of 0.2 percentage points won’t affect normal mortgage issuance, but it will discourage the shuffling of mortgages and raise some serious revenue. This money can be used to fund needed public services and, in part, to support lower taxes in other areas.
4. Limiting CEO Pay
CEOs are able to arrange paychecks in the tens of millions of dollars in large part because corporate directors are effectively paid off to look the other way. The incentives can be radically altered if directors stood to lose their stipends if a say-on-pay vote by the shareholders was defeated.
State governments can put this into law for corporations chartered in their state. Also, any corporation can put this rule into their own bylaws. Since fewer than three percent of pay packages are voted down, any director who is confident enough that they will not be in the bottom three percent should be happy to support such a change in bylaws.
5. Limiting Pay at Nonprofits
Nonprofit organizations like universities, hospitals, and charities are hugely subsidized by taxpayers. Since most of their contributions come from people in the top income bracket, the ability to deduct charitable contributions effectively means that taxpayers are paying 40 cents of every dollar a rich person contributes.
Since taxpayers are out for much of the cost, it seems only fair to put some rules in place. (Actually, we already do.) How about a pay cap of $400,000 for any employee of a nonprofit? This is twice the pay of a cabinet officer. If a university or other nonprofit can’t find competent people who are prepared to work for twice the pay of a cabinet secretary, perhaps it is not the sort of organization that taxpayers should be supporting.
States can also get into the act on this one. Most states offer special tax treatment to nonprofits. They could apply the two-times-a-cabinet-member’s-pay rule to the nonprofits within their state.
6. Applying Sales Tax to Internet Sales
Jeff Bezos has become one of the richest men in the world because he was successful in expanding Amazon into a huge retailer that doesn’t have to collect the same sales taxes as corner grocery stores. There is no excuse for giving special exemptions to Amazon and other Internet retailers. The states that don’t yet tax Internet sales in their state should move quickly to do so. It makes no sense to subsidize giant retailers like Amazon at the expense of traditional mom-and-pop retail outfits.
7. Democratizing the Sharing Economy
Start-ups like Airbnb and Uber have quickly turned into multi-billion-dollar businesses, in large part by evading the regulations that apply to their traditional competitors. The plan here should be to modernize the rules for taxis, hotels and other outposts of the “sharing” economy and be sure they apply to everyone equally. You don’t get to operate an unsafe taxi driven by an alcoholic just because it’s ordered over the Internet.
In the case of Airbnb, local governments could quickly add some new competition by having local websites where people could list available rooms without paying fees to Airbnb. The advantage to the cities is that they could be sure that these rooms met fire safety and other requirements. Then the only people who listed on Airbnb would be people renting fire traps or other illegal units or who were too ill-informed to save themselves the Airbnb commission. (This gives “sharing” economy a whole new meaning.)
8. The Overvalued Dollar
Our economists are learning and have discovered the problem of secular stagnation. This means that many economists now recognize that the economy can suffer from a persistent problem of inadequate demand, leading the economy to run at below-potential levels of output and to have excessive unemployment.
Unfortunately, most economists still don’t feel they can talk about the most obvious cause of the lack of demand: the country’s large trade deficit. The annual deficit is currently more than $500 billion (at three percent of GDP). This has the same effect on the economy as if consumers were to massively cut back their annual consumption by $500 billion and instead put this money under their mattress. The lost demand translates into more than six million jobs.
The obvious solution is to reduce the value of the dollar against other currencies in order to make US goods and services more competitive internationally. The value of the dollar is a matter that is determined at the national policy level. In principle the United States could be negotiating for a lower-valued dollar in a big trade agreement like the Trans-Pacific Partnership. Instead it is pushing for stronger patent protection for Merck and Pfizer, stronger copyright protection for Disney and Mickey Mouse, and a system of business-friendly courts that can override laws in the United States and elsewhere.
9. Shorter Work Years and Work Weeks
If we can’t directly increase demand in the economy through lowering the value of the dollar, we can still increase the number of jobs by reducing the amount of time that people work on average. This is the secret of Germany’s economic miracle. It has had slower growth than the United States, yet it has seen a huge increase in employment in its recession recovery. The average work year in Germany has 20-percent fewer hours than in the United States.
One of the policies that has helped bring about job growth in Germany is work sharing. This policy encourages companies to cut back hours instead of laying off workers. Workers are compensated for their lost wages through the unemployment insurance system. Most states have work-sharing programs as part of their unemployment insurance system. The compensation rate is generally lower in the United States than in Germany (typically 50 percent, compared with 60 to 80 percent in Germany), but it still beats losing a job.
Other policies that go in the same direction are paid family leave and paid sick days. These policies are important in their own right but can help better divide the available work among those who want jobs. Another great feature of these policies is that we don’t have to wait for the president and Congress to take action. They can be implemented at the state and even local level.
10. The Federal Reserve Board
The last and possibly most important item on the list is the Federal Reserve Board. It will be coming under pressure from the Wall Street types to raise interest rates. The point of higher interest rates is to slow the economy and keep people from getting jobs. The Fed would do this because more jobs will mean that workers have more bargaining power and would be in a position to raise wages. In short a Fed move to raise interest rates is very directly about keeping workers from getting higher wages. (Most workers have only been able to achieve real wage gains when the unemployment rate has been low.)
Fortunately, there are efforts to apply some pressure in the opposite direction, most importantly by the Center for Popular Democracy. They aim to let the Fed governors in Washington and presidents of 12 district Fed banks know that people who care about jobs are watching the Fed’s actions. This should make it harder for the Fed to take steps to deliberately throw people out of work and reduce workers’ bargaining power.
That’s my list of the top 10 places where progressives can focus in 2015 on restructuring the economy in ways that prevent income from flowing upward. The list is hardly exhaustive, and I left out some obvious important areas, like strengthening unions, because everyone should know them. Let’s hope for a good year and some real progress in turning the economy around.
Source
Recaudan fondos para Puerto Rico con fiesta en el Museo PS1
El Museo de Arte Moderno (MoMA, por sus siglas en inglés) recibió en su sede en Long Island City a la comunidad...
El Museo de Arte Moderno (MoMA, por sus siglas en inglés) recibió en su sede en Long Island City a la comunidad artística puertorriqueña, en un esfuerzo de recaudación de fondos organizado por la sociedad civil en apoyo a la comunidad afectada por el huracán María.
Lea el artículo completo aquí.
21 hours ago
21 hours ago