Campaign News

Chicagoist - May 28, 2014, by Aaron Cynic - Supporters of raising the minimum wage introduced an ordinance at a City Council meeting today that calls for an increase to $15 an hour. The proposal, backed by several Aldermen including John Arena, Joe Moreno and Roderick Sawyer, comes on the heels of a report released that shows a raise in the wage would benefit both workers and the City’s economy.

According to the plan, companies making more than $50 million a year would be required to first raise their minimum wage to $12.50 an hour within 90 days and then to $15 within a year. Smaller businesses would have to raise their wages at a more graduated rate, with a total of four years to get to $15. From there, the minimum wage in Chicago would rise with the rate of inflation.

“Study after study demonstrates that when you put money into the pockets of consumers, they spend it," Alderman Ricardo Munoz, who also backs the measure, told Reuters. "They don't hoard it in their mattresses.”

The recent report from the Center for Popular Democracy says a minimum wage increase would yield workers about $1.1 billion collectively, with an average annual income increase of $2,620 per individual. This would generate $74 million in personal income taxes to the state and yield $616 million in new economic activity.

At a press conference at City Hall, Tanika Smith, a fast food worker, said her current pay of $8.75 an hour, just 50 cents more than the minimum wage in Illinois, simply isn’t enough. “My car note is $500 a month, my rent is about $500, food is going up, lights are going up,” said Smith.

Raising the minimum wage is becoming a key issue with politicians statewide. Last week, Mayor Rahm Emanuel gave a panel of business, labor and civic leaders 45 days to draft a plan to raise the wage in Chicago. Gov. Pat Quinn has championed raising the state wage to $10.65 an hour, and Illinois House Speaker Michael Madigan is pushing for a referendum on the November ballot to ask voters if the wage should be raised to $10 an hour.

Both the Illinois Chamber of Commerce and Illinois Retail Merchant’s Association oppose an increase to the minimum wage. “We think it puts us at a competitive disadvantage,” Chamber CEO Theresa Mintle told Reuters. The Retailers Association has said that raising the wage would force businesses to cut both jobs and hours.

Ald. Moreno, however, disagrees.

“It’s gonna hurt the people at the top possibly. It’s not gonna hurt business. It never has. Raising the minimum wage in the United States has never, ever hurt the broader economy...Our economy has been splintered with those at the top having way more. The middle class is shrinking. We want the middle class to grow.”

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A sex assault survivor who confronted Sen. Jeff Flake inside an elevator Friday — after announcing he would vote in favor of Supreme Court nominee Brett Kavanaugh — said that the likely pivotal moment “was all kind of a blur.”

Read the full article here.

Progressive groups are launching a national campaign this week to pressure the Federal Reserve not to raise interest rates until wages begin growing more significantly. And they are getting some help from popular liberal economist Robert Reich.

The groups, led by the Center for Popular Democracy’s Fed Up campaign -- a foundation-funded nonprofit committed to a more "pro-worker" Federal Reserve -- inaugurated the effort in earnest over the weekend with mass email blasts and solicitation on other digital platforms of a petition, “Tell the Fed: Don’t Raise Interest Rates!” 

Participating organizations, which include online progressive heavyweights CREDO Action, Daily Kos and the Working Families Party, will send the petition to an increasing number of activists over the course of the week. The groups, a complete list of which you can find in the petition, have a combined email list and website visitor reach in the millions.

Activists will deliver the petition signatures they amass in the coming weeks to Fed officials at the Kansas City Federal Reserve Bank’s annual symposium in Jackson Hole, Wyoming, onAug. 27-29. Fed Up is sending a delegation of low-income workers and representatives from communities of color to the symposium with the goal of raising awareness of working families’ concerns about Fed monetary policy. The Fed Up campaign formally began with a similar visit to Jackson Hole last year.

Some of the emails to activists will include a video from Robert Reich, an economist at the University of California, Berkeley and former secretary of labor, that is likely to give the effort a high-profile boost. Reich posted the video, along with a link to the petition, on his Facebook page on Friday. As of Monday afternoon it already had been viewed over 142,000 times -- and shared by more than 3,600 people. Reich relies on a production team to make his videos, but does the illustrations featured in them himself.

The new online campaign aims to influence the Fed at a pivotal moment: The central bank is indicating that it will raise interest rates as soon as September. Atlanta Fed President Dennis Lockhart, who sits on the FOMC, confirmed on Monday that the Fed would soon raise rates, saying the "the point of 'liftoff' is close." Lockhart's remarks come after July jobs numbers Friday showed relatively steady job gains.

Robert Reich’s Federal Reserve 101

The progressive groups pushing back against a rate hike are betting that if the public knew how much they stood to lose if rates go up, they would be willing to speak out against a hike. They could then generate pressure to change the Fed’s calculus.

For that to happen, though, people need to understand what the Federal Reserve is -- which activists acknowledge is rare. 

So Reich’s five-minute video starts at square one, explaining how the Federal Reserve works and why it affects Americans’ lives -- before articulating the case against a rate hike. The Fed cuts interest rates, or keeps them low, he explains, in order to stimulate the economy. “The lower the [Fed’s] rates, the easier it is to borrow,” Reich says in the video. “The easier it is to borrow, the more active the economy becomes.”

Reich then elaborates on the virtuous cycle that takes hold when low rates leave people with more disposable income, as graphics illustrating his points whiz by onscreen. Consumers spend more, Reich explains, growing businesses and increasing demand for labor. And if there is enough demand for workers, he continues, employers raise wages to compete for those workers.

Why Do Progressives Think A September Rate Hike Is Premature? 

Reich, like the campaign he is backing, makes the case that the Fed should wait until demand for workers is high enough to increase wages substantially before raising interest rates. Although the official unemployment rate of 5.3 percent is low by historical standards, it has yet to translate into substantial wage growth. Average wages have risen 2.1 percent in the past 12 months -- not much higher than the rate of price inflation, which, as of June, was 1.8 percent (not including energy and food).

Economists like Jared Bernstein of the Center on Budget and Policy Priorities argue that wage growth has yet to take off because there are still too many job seekers for the number of jobs available. The official unemployment rate does not account for the 6.3 million underemployed workers, who have part-time work but want to work full time, or the 668,000 jobless workers, who have given up seeking work altogether.

Although the progressive groups’ petition does not explicitly demand that the Fed wait for a specific wage growth figure before raising interest rates, the Fed Up campaign and its partners have largely coalesced around a wage growth target of 3.5 to 4 percent. The liberal-leaningEconomic Policy Institute, which is participating in the new petition campaign, estimates that with that type of wage growth, price inflation will not “significantly exceed” the Fed’s 2 percent inflation target.

These progressives warn that a Fed interest rate hike that occurs before significant wage growth takes hold would disproportionately hurt people of color and women. Both groups face routine discrimination in the job market that they are more likely to overcome in a high-demand economy buttressed by low rates. And people of color are much more likely to be workers on the lower side of the earnings spectrum, who have the least leverage vis-à-vis employers. That means they are often the last people to get hired or get a raise when the job market heats up, and the first to lose their jobs when it cools down. For evidence of this, they say, look no further than the shockingly high African-American unemployment rate of 9.1 percent.

What About Inflation?

The Fed balances its mandate to maximize employment with an obligation to prevent excessive inflation. That is why it raises interest rates when it believes prices are at or near its target inflation rate of 2 percent. Some economists also believe that even when consumer prices are below the target rate, the Fed should raise rates if housing and stock prices are getting unreasonably high.

Reich -- and the many economists and activists with whom he finds common cause -- appreciate the Fed’s obligation to prevent runaway inflation. But they note that inflation has remained consistently below the Fed’s target rate of 2 percent. And they believe that for the sake of job creation and wage growth, the economy can tolerate slightly higher inflation than the current Fed target.

“More jobs and better wages are more important than theoretical worries about accelerating inflation,” Reich concludes.

Reich and allies point to the late 1990s as a model for Fed monetary policy. They credit then-Fed Chair Alan Greenspan for refusing to raise interest rates even as the official unemployment rate dipped, against the wishes of other Fed officials concerned about inflation. As a result, wage growth was widespread enough to produce significant gains for workers at the bottom of the earnings spectrum.

A New Progressive Priority?

The petition campaign against a Fed rate hike is something of a coup for advocates who, asHuffPost reported at length in June, have long argued that Fed monetary policy should be a higher priority for the political left. Although the foundation-funded Fed Up campaign has been agitating for a more “pro-worker” Fed for nearly a year now, this is the first time it is collaborating with major progressive players like CREDO Action, Daily Kos and the Working Families Party. The Economic Policy Institute, which is a member of the Fed Up campaign’s founding coalition, is also activating its email list for a Fed Up petition effort for the first time.

A broad array of liberal-leaning organizations joined forces in the summer and fall of 2013 to torpedo President Barack Obama’s nomination of Lawrence Summers as chair of the Federal Reserve Board of Governors. Summers united economic progressives concerned about his Wall Street ties and women’s advocates angered by his remarks about women. Their efforts succeeded in winning the appointment of Janet Yellen as chair instead of Summers.

But since that time, the Fed has largely faded from the progressive foreground. Higher-profile fights like the movements for the $15 minimum wage and against the Trans-Pacific Partnership trade deal have taken up the lion’s share of progressive energy and attention, dwarfing more esoteric causes. To the extent progressives have publicly pressured the Fed, it has been to police Wall Street more carefully, not maintain a dovish monetary policy.

“In general it’s clear that the Federal Reserve gets far less attention from progressives than it should in light of the tremendous influence it has over the economy and Americans’ quality of life,” said Josh Nelson, communications director for CREDO Action.

This relative inattention is evident in how little Federal Reserve monetary policy has come up in the 2016 Democratic presidential primary. The topic has not been discussed widely on the campaign trail. Of the major Democratic presidential candidates, only former Maryland Gov. Martin O’Malley responded to a request for comment last week on a possible Fed rate hike. O’Malley agreed with progressive activists that the Fed should wait for more robust wage growth before raising rates. 

By contrast, the right wing has relentlessly trained its fire on the Fed for “debasing” the dollar with its quantitative easing program -- its now-defunct multitrillion-dollar asset purchasing program -- and low interest rates. Republican members of Congress regularly grill Yellen for printing too much money.

To the extent that Republican presidential candidates have broached the subject, they have weighed in in support of raising rates. Donald Trump, a real estate mogul and ersatz Republican presidential candidate, warned last week that the Fed’s low interest rates are causing an asset bubble. New Jersey Gov. Chris Christie has also slammed the Fed’s “easy money” policies for endangering the economy.

But the petition effort raises advocates’ hopes that a  progressive movement with the power to match the right's Fed lobby is finally taking shape.

Haedtler said that CREDO Action, Daily Kos and the Working Families Party were eager to get involved.

“They were very enthusiastic about targeting a new institution that was not accustomed to outside pressure by working families,” Haedtler said, adding that he thought soliciting these groups’ involvement “would be more challenging than it was.”

They were receptive to the argument, Haedtler said, that the Federal Reserve can “wipe out a lot of progress” on more visible issues like the minimum wage, if the Fed “does not recognize that the economic recovery has not benefitted everybody.”

CREDO Action did not specify how many activists it would target, but said that the petition would reach “many of the economic justice activists” on the group’s 3.8 million-person email list.

“The traditional obscurity [of the Fed] is why we must organize around it,” CREDO Action’s Nelson said. “People assume they can't influence the Fed. But that's wrong. These are people and they are open to both pressure and input. Pointing out that many communities still suffer is an essential role for advocates.” Nelson added that progressive input is a “necessary counterweight” to Wall Street influence on the central bank.

Chris Bowers, the Daily Kos’ executive campaign director, is confident that the Fed rate hike is not too esoteric for Daily Kos members. “One thing we've learned over the years is that Daily Kos readers tend to be very sophisticated, highly engaged activists who know a great deal about all manner of political issues,” Bowers said in an email. “In fact, some of our best-performing campaigns have focused on topics that might seem surprisingly obscure, such as net neutrality and filibuster reform. So we expect that our readers will readily grasp what's at stake here.”

Daily Kos is soliciting signatures for the petition through a splash screen some people see when they visit the site. Bowers estimates that 20,000 people a day will see the splash over the course of a campaign that will last at least two weeks. He said Daily Kos is gauging the “intensity” of their members’ interest in the Fed based on their engagement with the petition. If enthusiasm is high, it will send the petition to its much larger email activism list.

Beyond Stopping A Rate Hike

Ultimately, the Fed Up campaign and its allies are on a larger mission to make the Federal Reserve more accountable to working people. That means not only preventing an interest rate hike before greater wage growth takes hold, but also pushing the Fed to rebalance its dual mandate toward genuine full employment and higher wages, and away from what they believe is excessive concern about inflation. The theme of this year’s Jackson Hole symposium is“Inflation Dynamics and Monetary Policy,” which Fed Up points to as a typical sign of the Fed’s inflation bias.

“We want to reframe the narrative” at the symposium, Haedtler said. Inflation, he explains, “is not what is on the minds of low-wage workers who have been suffering through a very slow economic recovery.”

“We think of our campaign less as a left/right divide, and more as an effort to bring the voices of working families to the Federal Reserve for the first time,” Haedtler noted. “Ultimately our members are fighting for a broader recovery, better wages and better working conditions.”

Fed Up can point to concrete progress toward this goal since its inaugural action at the Jackson Hole symposium last August. Their protests there led to a meeting between Fed Up activists and Kansas City Fed President Esther George. That in turn opened the door to meetings with four other regional Federal Reserve bank presidents. Fed Up has also met with Yellen and several members of the Fed Board of Governors in their Washington offices.

The meetings have enabled working people organized by Fed Up to share their economic experiences with Fed officials, who make decisions that will affect these people’s lives. 

Haedtler believes these meetings are already bearing fruit. The Fed created a Community Advisory Council in January to solicit more diverse views on the state of the economy.

“Even very hawkish regional presidents -- like James Bullard, the St. Louis Fed president -- really seem to take to heart some of the stories we convey to them,” he said.

The Fed Up campaign also wants to reform the selection process for regional Federal Reserve bank presidents, which it says reflects the narrow interests of the bankers that dominate their boards of directors. They are asking regional Fed presidents that they meet with for a timeline of their selection process and a list of candidates being considered. 

Fed Up claims credit for the Minneapolis regional Federal Reserve Bank’s decision to disclose the process through which it would select its next president.

“We know something about congressionally confirmed Fed board governors, but very little about regional fed presidents, other than that they are overwhelmingly white, male and have close ties to the financial sector,” Haedtler said.

Source: Huffington Post

Two years ago this week, the nonprofit Center for Popular Democracy and allied groups launched the Fed Up campaign, aimed at making the Federal Reserve more accountable to workers and communities of color. They converged then on the Jackson Lake Lodge in Wyoming, where Fed officials decamp every year to discuss policy and hobnob with the economic elite.

How much political headway has the campaign made since then? This year, Fed Up activists were essentially put on the schedule for senior Federal Reserve officials, with a major meeting at the Jackson Hole summit.

The group met Thursday, the first day of the summit, with eight of the 12 presidents of the regional Federal Reserve banks and two members of the Federal Reserve Board of Governors.

Fed Up activists have met individually with the governors and regional bank presidents before; they spoke with some Fed officials less formally at the past two Jackson Hole gatherings. This is the first time, however, that their delegation of some 120 rank-and-file activists had met with so many of the central bank’s decision-makers in one place.

“It is kind of like a mini-FOMC,” said Fed Up campaign manager Jordan Haedtler prior to the event, likening it to a meeting of the Federal Open Market Committee, the Fed’s policymaking body.

The progressive campaign is calling for the central bank to wait for the economic recovery to reach more broadly across America before raising its benchmark interest rate again, a move that slows the pace of economic growth to head off price inflation.

It has also criticized the Fed for the lack of racial, gender and professional background diversity among its senior officials, arguing that only a central bank that looks like America can craft policy in the best interests of all citizens.

The Fed officials at the meeting were Esther George, president of the Federal Reserve Bank of Kansas City, which hosts the annual symposium; New York Fed president William Dudley; Dallas Fed president Robert Kaplan; Minneapolis Fed president Neel Kashkari; Cleveland Fed president Loretta Mester; Boston Fed president Eric Rosengren; San Francisco Fed president John Williams; Richmond Fed president Jeffrey Lacker, and Fed governors Stanley Fischer and Lael Brainard.

“They were really impressed with how well prepared we were,” said Haedtler after the meeting. “They were heartened by the discussion.”

“We’ll see how things go in September,” he added, referring to the next opportunity for an interest rate hike.

Bill Medley, a spokesman for the Kansas City Fed, also gave positive feedback about the meeting.

“It was a productive dialogue, as it always is, and we look forward to continuing the conversation,” Medley said.

Fed Up has had a banner year so far. Democratic presidential nominee Hillary Clinton embraced the broad contours of its platform in May after weeks of private discussion with group representatives.

“Secretary Clinton believes that the Fed needs to be more representative of America as a whole as well as that commonsense reforms — like getting bankers off the boards of regional Federal Reserve banks — are long overdue,” a Clinton spokesman said at the time.

But Clinton stopped short of signing on to a bolder reform proposal that Fed Up rolled out in April, which would turn the central bank system into an entirely public institution. The Federal Reserve Board of Governors is already a federal agency, whose top officials are nominated by the president and confirmed by the Senate. But the 12 regional banks it supervises are owned by the private financial institutions they serve. (Fed Up released a more detailed version of its idea on Monday.)

The private nature of these banks is a major reason why they are run overwhelmingly by white men with backgrounds in finance, Fed Up argues. There has never been a black or Latino president of one of the regional banks, the group notes in its reform proposal, and one-third of the current bank heads are alumni of Wall Street power player Goldman Sachs.

Fed Up’s moment at this year’s Jackson Hole symposium was not without its hiccups.

Earlier this month, Fed Up were informed that the Jackson Lake Lodge had canceled over a dozen of its room reservations. The hotel said a “computer glitch” had led to the overbooking of 18 rooms. But the fact that 13 of those rooms were booked by Fed Up raised concerns that they were being targeted.

Although the activists found lodging at a nearby resort, Fed Up filed a complaint with the U.S. Department of Justice, and members of Congress sympathetic to their cause sent Fed Chair Janet Yellen a letter asking for an explanation.

In an apparent gesture of detente, George, the Kansas City Fed president, offered Fed Up the big meeting, and the campaign withdrew its objections to the lodging snafu.

Fed Up agreed also to limit its presence in the lodge’s halls during a scheduled cocktail hour. In the past, activists have clustered inside the hotel to confront Fed officials in person. The group held a press conference-cum-rally outside the lodge before Thursday’s meeting. It also plans to run teach-in seminars and to canvass the city’s low-income neighborhoods to spread the word about Fed reform.

But Haedtler, Fed Up’s campaign manager, wanted to focus on Thursday’s meeting. It is evidence, he said, that his fledgling movement’s priorities have made it into the mainstream.

“We have clearly reshaped the discourse,” Haedtler said.

By Daniel Marans

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