Campaign News

As a general principle, the Fed should not react to short-term movements in the financial markets. For one thing, the labor market is much more important to the lives of most Americans, and it is more relevant to the Fed’s mandate of securing maximum employment with inflation stability.

Then consider this: More than 80% of stock wealth in the U.S. is owned by the wealthiest 10% of Americans, and more than half of Americans own no stocks at all (either directly or through retirement or other accounts). In short, movements in the stock markets do not have much effect on the spending power of most U.S. households. That means that movements in the stock markets–especially short-term volatility that is likely to largely dissipate–provides little information about the overall state of economic health.

On the other hand, the labor market provides the vast majority of income to the vast majority of Americans. The middle fifth of households, for example, gets more than 80% of household income directly from the labor market (either cash wages or employer-provided benefits). Further, many additional sources of income such as pensions, Medicare, Social Security, unemployment insurance, or the Earned Income Tax Credit hinge on participation in the labor market. That’s why trends in the labor market are crucial to assessing the overall state of the economy–which is far from fully recovered from the Great Recession.

The clearest remaining weakness is wages. The current pace of hourly wage growth is roughly 2% to 2.5%. A healthy labor market that met the Fed’s overall price inflation target should be churning out wage increases of at least 3.5%. Further, a period of wage growth well above this is necessary for workers’ pay to reclaim some of the ground lost to corporate profits earlier in this recovery. Until wage growth starts moving durably toward the healthy 3.5% target, it’s too early for the Fed to begin raising rates.

This labor-market-based reasoning for keeping rates low should weigh much more heavily on Fed calculations about interest rates than recent stock activity. The only caveat: if one of the root causes of recent stock market declines–the slowdown in the Chinese economy–provides a new potential headwind to U.S. growth going forward.

But the case for keeping rates unchanged in September was dispositive last week, even before large declines in the stock markets. And any strong stock rally in the coming month shouldn’t  make Fed officials feel fine about raising rates.

Source: Wall Street Journal

While Austin is among the country’s first so-called freedom cities, it’s part of a wider movement around decriminalizing low-level offenses and decreasing arrests. According to Local Progress, a national network of progressive city officials, some council members in El Paso and Dallas are also considering “freedom city” proposals.

Read the full article here.

The first woman to chair the Federal Reserve is being criticized by Democratic legislators demanding more diversity in the central bank’s top policymaking positions

The first woman to chair the Federal Reserve is being criticized by Democratic legislators demanding more diversity in the central bank’s top policymaking positions.

According to report from TheHill.com, Fed Chairwoman Janet Yellen received a letter from 116 House Democrats and 11 senators that complained about the surplus of white men in leadership roles. The lawmakers pointed out that the central bank’s Federal Open Market Committee (FOMC) is entirely White and called for an emphasis on ethnicity and economic and professional backgrounds as part of the factors in choosing future executive officers.

“The importance of ensuring that such positions are filled by persons that reflect and represent the interests of our diverse country cannot be overstated,” the letter stated. “When the voices of women, African-Americans, Latinos, Asian Pacific Americans, and representatives of consumers and labor are excluded from key discussions, their interests are too often neglected.”

The letter was coordinated by Sen. Elizabeth Warren (D-MA) and Rep. John Conyers Jr. (D-MI). Vermont Sen. Bernie Sanders, an Independent who is running for the Democratic presidential nomination, was among those signing the letter, while Hillary Clinton chimed in her support after the letter’s contents were made public.

For its part, the Fed insisted that it was committed to diversity in hiring.

"We have focused considerable attention in recent years on recruiting directors with diverse backgrounds and experiences," said a Fed spokesperson. "By law, we consider the interests of agriculture, commerce, industry, services, labor, and consumers. We also are aiming to increase ethnic and gender diversity."

By Phil Hall

Source

If you’re a huge fan of shopping at Zara, the Spanish fast-fashion franchise, you may want to start spending your money elsewhere.

The fashion brand has been outed for its deeply engrained racist hiring and customer service practices in arecent survey conducted by the Center for Popular Democracy, a racial, economic and labor justice group. A random sample of two hundred-fifty one out of Zara’s 1,500 Manhattan employees participated in the survey and confided that Black customers are profiled as potential thieves seven times more frequently than white shoppers.

The study, entitled “Stitched with Prejudice: Zara USA’s Corporate Culture of Favoritism” and written by Chaya Crowder, also revealed that Black customers were also more frequently denied exchanges and returns than Whites. Customers weren’t the only people that were racially discriminated in Zara’s stores. Black employees claimed that they were given dissatisfactory hour assignments and stricter surveillance from managers.

“It’s kind of weird to me how they can make millions of dollars but are not able to pay people properly for their time, let alone give people the amount of time that they need in order to support their family, in order to keep a roof over their head, in order to, you know, just feed themselves.” One employee said:

The study had also found that darker-skinned employees were also less likely to promoted to managing roles and were often given less-prestigious roles. Sixty-eight percent of employees that were assigned roles in the back of the store and away from the public had darker complexions. Managers were generally White, and generally gave preferential treatment or were less lenient to subordinates of the same races and ethnic groups. The extent to which Black employees were profiled in their own work environment were sometimes highly disturbing, as portrayed in this incident:

“[O]ne Black employee even detailed an instance in which he had come in a hooded jacket to pick up his check. A sales associate not only identified him as a special order, but he was physically stopped as he was walking into the back office, where checks are kept.”

The study’s findings are not particularly surprising, given Zara’s history of being infamous for racial bias in the brand’s various operations. Just earlier this month, the franchised was served with a $40 million lawsuit from a former worker  citing discrimination, unlawful discharge, retaliation and a hostile work environment. The brand also received bad press last year for racist images on its merchandise: pajamas featuring swastikas, a necklace with blackface designs, shirts with gold stars resembling those worn by the Jewish people once held in concentration camps in the Holocaust and a shirt with the words printed saying, “White is the New Black.”

According to Forbes, Zara featured the following statement:

“Zara USA vehemently refutes the findings of the Center for Popular Democracy report which was published without any attempt to contact the company. The baseless report was prepared with ulterior motives and not because of any actual discrimination or mistreatment. It makes assertions that cannot be supported and do not reflect Zara’s diverse workforce.

“Zara USA believes that the report is completely inconsistent with the company’s true culture and the experiences of the over 1,500 Zara employees in New York City. We are an equal opportunity employer, and if there are individuals who are not satisfied with any aspect of their employment, we have multiple avenues for them to raise issues that we would immediately investigate and address.

“Approximately half of all Zara USA employees are Hispanic or African American. In the most recent round of internal promotions at Zara USA, approximately half were Hispanic or African American employees. In addition, approximately half of all hours are regularly allocated to Hispanic or African American employees. These facts clearly demonstrate that diversity and equal opportunity are two of the company’s core values. We are a global multicultural company serving valued customers across 88 countries, and do not tolerate discrimination of any form.”

Welp. I know Zara won’t be seeing my money again anytime soon. It’s a shame, their pencil skirts fit me in all the right places…

Source: New Pittsburgh Courier