A New Law Is Letting Uber Drivers Unionize
After ride-hailing companies descended on Seattle and began slashing drivers’ pay, the City Council stepped in with a...
After ride-hailing companies descended on Seattle and began slashing drivers’ pay, the City Council stepped in with a novel solution.
As the gig economy grows, companies like Airbnb and Uber are challenging cities by reshaping entire industries, often harming workers in the process. The challenge for progressive-minded legislators has been that existing regulations have often proven inadequate. Recently, however, local policymakers have begun proposing innovative ways to cope with the changes.
In Seattle, this battle has played out around ride-hailing services Uber and Lyft. When the companies were first legalized in the city in 2014, they presented themselves as a needed transport service that let drivers make money outside of the rigid regulations imposed on the taxi industry. Those claims lost credibility over the next year, however, as Uber drivers’ pay was slashed from $2 per mile to about $1.20 per mile. As cuts deepened, drivers found it increasingly hard to make an income—and many taxi firms found it almost impossible to compete.
We clearly needed a solution. Although collective bargaining had never been tried in the gig economy, a Seattle labor lawyer named Dmitri Iglitzin who’d been mulling the possibility for years approached me with a groundbreaking idea: Rather than tinkering around the edges with new regulations, why not let for-hire drivers unionize and set their own terms?
The premise was intriguing: If Uber and Lyft are going to claim that drivers are independent contractors, then let’s take them at their word and insist that drivers be allowed to negotiate the terms of their contract with these multibillion-dollar companies. While federal law preempts localities from encouraging unionization for private-sector employees, independent contractors are exempt. We believe this means that cities can allow drivers the right to collectively bargain to negotiate a better quality of life and a more reliable transportation service, in a way that regulations cannot.
The timing couldn’t have been better. In the year after Uber and Lyft first began operation, the narrative in Seattle had shifted: The companies, once seen as upstart innovators, came to be seen as major corporations intent on asserting power to the detriment of workers.
Uber and Lyft drivers had already set up an association of app-based drivers through the Teamsters, which represented taxi drivers in Seattle. United, they were starting to raise their voices. They organized rallies and protests highlighting their struggles and testified at City Hall about their limited pay, long hours, and arbitrary deactivation. Growing popular outrage turned up the heat.
Surprisingly, even as criticism rose, both Uber and Lyft did little to fight back. It wasn’t because the companies didn’t have the will or capacity. Only a year earlier, in 2014, they had put up a major fight after the Seattle City Council proposed placing a cap on for-hire vehicles.
This time though, it was clear that they could not win over public opinion. As driver earnings spiraled downward, it was hard for anybody to deny that there was a problem with the companies’ treatment of their workers—and that something needed to be done about it.
Rather than tinkering around the edges with new regulations, why not let for-hire drivers unionize and set their own terms?
In December 2015, the Seattle City Council unanimously passed a law letting Uber and Lyft drivers bargain collectively and establish a process for binding arbitration. In coming months, we will finalize the rules and determine which union or association can represent drivers, who can then vote on whether they want to be represented or not. The US Chamber of Commerce is already suing, hoping that the courts determine that federal law preempts the Seattle law.
Even though contract negotiations are months away, the idea has already caught on in other cities and states. New York and Cincinnati are considering regulations that would expand collective bargaining rights to some gig-economy workers. And in California a similar law was introduced in the State Assembly (although it’s been withdrawn for the moment).
The on-demand economy is delivering important new benefits to consumers. But if we are going to build a more equitable society, we’ll need rules of the road to ensure workers are treated with dignity. Cities have a powerful role in realizing that vision.
By MIKE O'BRIEN
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Denver Receives $5 Million Challenge Grant To Promote Naturalization In The United States.
Denver Receives $5 Million Challenge Grant To Promote Naturalization In The United States.
The “America is Home” Initiative will be administered by the National Partnership for New Americans (NPNA). Cities for...
The “America is Home” Initiative will be administered by the National Partnership for New Americans (NPNA). Cities for Citizenship is co-chaired by Mayors Garcetti, Mayor Emanuel, and Mayor de Blasio of New York City. The Center for Popular Democracy is a member of the C4C Executive Committee, and Citi Community Development is the founding Corporate Partner. The C4C “America is Home” Initiative is offered in cooperation with the New Americans Campaign (NAC). NPNA and NAC are two leaders in the U.S. promoting naturalization and are well positioned to bring naturalization to scale and expand to new cities.
Read the full article here.
Paid Sick Days Advocates Applaud De Blasio & Mark-Viverito On Expansion Of Earned Sick Time
FOR IMMEDIATE RELEASE: JANUARY 17, 2014 CONTACTS: See below NEW YORK – Today, Mayor Bill de Blasio and newly...
FOR IMMEDIATE RELEASE: JANUARY 17, 2014
CONTACTS: See below
NEW YORK – Today, Mayor Bill de Blasio and newly elevated City Council Speaker Melissa Mark-Viverito jointly announced their intention to expand the Earned Sick Time law passed last year with support from the NY Paid Sick Days Coalition.
Specifically, their proposal will close the following loopholes in the Earned Sick Time Act:
Employers with 5-14 workers must now provide paid sick days to their workers. Employers with 15-19 workers must provide paid sick days immediately rather than waiting until 2015. Workers may now use their earned sick time to care for a sibling, grandchild or grandparent. Certain manufacturing employees previously left out will now be covered by the law. City agencies will now be able to proactively enforce the law rather than relying solely on worker complaints.The NY Paid Sick Days coalition includes over ninety organizational members, representing labor unions, public health organizations, educators and children’s advocates, women’s groups, economic justice groups, civil rights leaders, faith leaders, business owners and associations, research organizations, senior advocates, and immigrants’ rights groups.
QUOTES FROM COALITION MEMBERS
Center for Popular Democracy:
The following quote can be attributed to Amy Carroll, deputy director of the Center for Popular Democracy:
“We applaud Mayor de Blasio and Speaker Mark-Viverito for championing and expanding the Earned Sick Time Act. It signals a new day for New York workers and their families that their needs will come first in this administration. We look forward to working with the administration and the council to create policy that will close the income gap and create a more affordable, inclusive city for everyone.” 32BJ SEIU:
The following quote can be attributed to Hector Figueroa, president of 32BJ Service Employees International Union:
“We applaud Mayor de Blasio and Speaker Mark-Viverito for making good on their campaign promises to expand the Paid Sick Act. Although our members can afford to get sick, many of their family members and their neighbors have been forced to choose between their health and their livelihoods. This bill is an important first step in the fight for real income equality in this city and we look forward to working with the administration to make sure this bill and others aimed at improving the quality of life for New York’s working families become law.”
A Better Balance:
The following quote can be attributed to Sherry Leiwant, co-president of A Better Balance:
“A Better Balance is thrilled that the Mayor is expanding the Earned Sick Time Act we helped negotiate last year to provide paid sick days to so many of the workers excluded under that law. Thank you to Mayor de Blasio and Speaker Mark-Viverito for recognizing that New Yorkers should not be forced to choose between their jobs and their own or their family's health."
Community Service Society:
The following quote can be attributed to David R. Jones, president and CEO of the Community Service Society:
"Amending the paid sick leave law to cover more of New York City's smaller businesses is critical because employees of these businesses are the ones who most often now lack access to even one paid sick day. Our latest Unheard Third data shows that the original law effectively leaves out more than a third of the workers now without a single paid sick day -- and just gives them job protection in the form of unpaid leave. CSS applauds the mayor and speaker for their efforts to create a more stable and healthier workforce while ensuring that more low-wage workers receive a basic labor standard that most higher-income earners take for granted."
Make the Road New York:
Leonardo Fernando, member of Make the Road New York, is an immigrant worker originally from Mexico. He works at a car wash in Queens and he said: "I have lived and worked in this country for nine years, and I've never had paid sick days. The business where I work now, Fresh Pond Car Wash, would be covered under this new paid sick days law because it has thirteen employees. We work long shifts, in the heat and the cold, and we use hazardous chemicals. But I never take a day off, even when I'm sick, because I have four children to support and I can't afford to miss a day's pay or risk losing my job. I've gone to work with a fever and with the flu, and I'm so happy that I'll be able to take the day off when I'm too sick to work. I would like to thank Mayor Bill de Blasio and the New York City Council for expanding the paid sick days law and making this one of the new administration's first priorities."
New York City Central Labor Council, AFL-CIO:
The following quote is attributable to Vincent Alvarez, President of the New York City Central Labor Council, AFL-CIO: "A healthy workforce is a more dedicated and focused workforce. I applaud Mayor de Blasio and Speaker Mark-Vivierito for taking this step in the right direction toward expanding the historic Earned Sick Time law that was passed last year, and making it a real priority to improve conditions for hundreds of thousands of our city's workers. The New York City labor movement is committed to continuing to work with the Mayor and the Speaker to ensure that our city's workers are treated with the dignity and respect they deserve. "
New York Paid Leave Coalition:
The following quote can be attributed to Martha Baker, New York Paid Leave Coalition:
“The NYC Paid Sick Days Coalition applauds Mayor de Blasio for proposing amendments to the recently passed Earned Sick Time Act that will provide paid sick days on April 1, 2014 to hundreds of thousands of workers not covered by the original bill. We are delighted that the bill has been expanded and that the Mayor recognizes how important it is that New York City workers have access to paid sick days.”
Restaurant Opportunities Center of New York:
The following quote can be attributed to Daisy Chung, executive director of the Restaurant Opportunities Center of New York:
"We are pleased that Mayor de Blasio and Speaker Mark-Viverito are moving quickly to give more workers the right to paid sick days. With these changes, many restaurant workers who work in the city's smaller restaurants will now have the right to paid sick days. We look forward to working with the Mayor and Speaker to strengthen the Earned Sick Time Act even further so it can be used as a model for the rest of the country."
Working Families Party:
The following quote can be attributed to Dan Cantor, executive director of the Working Families Party:
"This is the first sign of what the new administration could mean for New York. Mayor de Blasio has done what every sensible New Yorker knows he should, and he didn't waste any time. The expansion of paid sick days delivers on a basic tenet of fairness -- that no one should face a choice between their families, their jobs, or their health."
CONTACTS:
Meredith Kolodner, 32BJ SEIU: 917-881-3896
Sherry Leiwant, A Better Balance, 917-535-0075
TJ Helmstetter, Center for Popular Democracy: 973-464-9224
Jeff Maclin, Community Service Society: 212-614-5538
Hilary Klein, Make the Road New York: 347-423-8277
Cara Noel, NY Central Labor Council, AFL-CIO: 212.604.9552
Martha Baker, NY Paid Leave Coalition: 917-992-5300
Rahul Saksena, Restaurant Opportunities Center of New York: 203-561-2959
Khan Shoieb, Working Families Party: 347-596-6389
Voters Want Less Charter School Growth and More Regulation, Survey Finds
Ed Week - March 3, 2015, by Arianna Prothero - A national poll of U.S. voters finds that although a majority of voters...
Ed Week - March 3, 2015, by Arianna Prothero - A national poll of U.S. voters finds that although a majority of voters support charter schools, they aren't necessarily in favor of expanding them.
The survey, conducted for In the Public Interest and the Center for Popular Democracy—two groups involved in education policy and skeptical of charters—found participants largely favor charter school reform proposals such as requiring open board meetings, regular audits, and policies to help shield district schools from the impact of charter schools opening up nearby.
The two organizations are partnering to push a series of charter school accountability proposals. The initiative, called the Charter School Accountability Agenda, was unveiled in tandem with the poll results and quickly received support from the American Federation of Teachers, one of the two national teachers' unions. The proposals are based off of a September report released from Brown University's Annenberg Institute for School Reform.
However, the survey also found that lack of school choice falls last on a list of education concerns, including issues such as class-size and parental involvement.
Sixty-two percent of those surveyed said they either wanted the number of charter schools in their area maintained or reduced.
Forty-four percent said they favored charter schools when asked without a description of what charters are, but that number climbed to 52 percent when participants were provided a description. Eighteen percent said they opposed charter schools when not given a definition, and 38 percent said they opposed charter schools after seeing a description.
When asked if charter schools are public or private schools, 30 percent said the former and 58 percent checked the latter.
Those results are somewhat reminiscent of another poll conducted recently by Gallup, which found strong support for charter schools even though many people didn't really understand how charters work.
The public polling firm GBA Strategies surveyed 1,000 people, selected randomly from a national voter file, on behalf of the Center for Popular Democracy and In the Public Interest. You can dig into more of the survey results here.
Source
Clinton offers fresh support for key progressive priorities
Over the course of the race for the Democratic presidential nomination, Hillary Clinton hasn’t had a whole lot to say...
Over the course of the race for the Democratic presidential nomination, Hillary Clinton hasn’t had a whole lot to say about the Federal Reserve or monetary policy in general, which is why it was all the more interesting to see the Democratic frontrunner’s campaign yesterday endorse a change long sought by progressive activists. The Washington Post reported:
The Fed is led by a seven-member board of governors based in Washington and a dozen regional bank presidents based across the country, from New York to Kansas City to San Francisco. The governors are nominated by the White House and approved by the Senate, but regional bank presidents are selected by their boards of directors, whose occupants are chosen by the banking industry and by the Fed governors in Washington.
In a statement to The Washington Post, Clinton’s campaign said she supports removing bankers from the boards of directors and increasing diversity within the Fed.
In a written statement, a campaign spokesperson told the Post, “The Federal Reserve is a vital institution for our economy and the well-being of our middle class, and the American people should have no doubt that the Fed is serving the public interest. That’s why Secretary Clinton believes that the Fed needs to be more representative of America as a whole and that commonsense reforms – like getting bankers off the boards of regional Federal Reserve banks – are long overdue.”
This brings Clinton in line with Bernie Sanders, who endorsed this policy late last year, saying he wants a system in which “the foxes would no longer guard the henhouse.”
The statement also came the same day Clinton wrote an op-ed for the Washington Informer, an African-American newspaper, vowing to be a “vocal champion” for D.C. statehood.
“In the case of our nation’s capital, we have an entire populace that is routinely denied a voice in its own democracy,” Clinton wrote, adding, “Washingtonians serve in the military, serve on juries, and pay taxes just like everyone else. And yet, they don’t even have a vote in Congress.”
Earlier this week, Clinton also emphasized her support for a “public option” in health care coverage, including a possible Medicare buy-in policy.
The broader pattern matters, and it’s not altogether expected.
When Clinton’s campaign got underway nearly a year ago, the former Secretary of State started laying out her platform, and on a variety of issues – immigration, criminal-justice reform, expanding voting rights, etc. – the Democrat not only endorsed progressive ideas, she endorsed an agenda that was even more ambitious and further to the left than many expected.
At the time, of course, the question that loomed over the race dealt with motivation: was Clinton throwing her support behind a series of bold proposals because she was worried about Bernie Sanders, or was she serious about these plans? It’s one thing to make appeals to the left as the Democratic race gets underway, but would Clinton follow through when she shifts her attention to the general election?
The answer to these questions is coming into sharper focus. While the Democratic race still has some primaries to go, the delegate math suggests Clinton is well positioned to prevail, and she’s already begun shifting her attention to Donald Trump and the fall election. If the cynics were correct, this would be about the time we’d expect to see Clinton move gradually towards the center, eschewing some of her more progressive goals.
Except this week, we’re seeing the opposite, with Clinton backing Sanders-endorsed changes to the financial industry and touting her support for a public option.
Maybe Clinton is hoping to win over Sanders’ ardent fans who aren’t yet ready to back her candidacy in the fall. Maybe she believes these progressive goals are popular enough with the American mainstream that she’s not really taking much of a risk. Maybe she actually believes what she’s saying and none of this is calculated in any meaningful way.
Whatever the motivation, Clinton may be focusing her attention on the general election, but many of her key progressive ideals, at least for now, remain very much intact.
By Steve Benen
Source
Nine Months After Hurricane Maria, Congress Isn't Doing Much to Help
If a commission discovered “any wrongdoing, any corruption, any malice in that corruption,” added Julio Lopez Varona of...
If a commission discovered “any wrongdoing, any corruption, any malice in that corruption,” added Julio Lopez Varona of the Center for Popular Democracy’s Puerto Rico programs, “then people should go to jail.” In his view that includes not just federal officials but local Puerto Rican officials, some of whom have come under fire for mismanaging the disaster and recovery. But Mark-Viverito notes that it is far too early to think about how to enact punishments on individuals.
Obscure Fed Tool Used to Hammer Yellen for Enriching Banks
Source:...
Source: Bloomberg Business
A tool Congress gave the Federal Reserve to control interest rates has become a hammer for lawmakers to bash the central bank.
Fed Chair Janet Yellen withstood bipartisan criticism at a congressional hearing on Wednesday over the policy of paying the largest financial institutions to keep more funds than required on deposit at the central bank. The Fed doled out $1.7 billion in interest on excess reserves -- known as IOER for short -- to banks in the third quarter.
Congress, which gave the Fed authority in 2008 to pay interest on excess reserves, may be having second thoughts. While the tool helps the Fed raise its benchmark interest rate and simultaneously maintain a $4.5 trillion balance sheet that policy makers say supports the economy, several lawmakers complained to Yellen that IOER is enriching Wall Street.
California Representative Maxine Waters, the ranking Democrat on the House Financial Services Committee, labeled the IOER payments a “massive transfer of wealth from the Federal Reserve to private-sector banks.” Committee Chairman Jeb Hensarling, a Texas Republican, called it a “subsidy.”
In a election year, Yellen was grilled on campaign issues ranging from income inequality to high rates of minority unemployment. Candidates such as Senator Bernie Sanders, a socialist from Vermont who won the New Hampshire Democratic primary Tuesday, are finding that Wall Street-bashing resonates with voters struggling with slow wage increases.
The Center for Popular Democracy, part of a coalition known as Fed Up, said it met with Waters in September and discussed why paying banks interest on excess reserves is troublesome.
‘Anti-Consumer’
“It was a tool that was given to the Fed without ever envisioning an environment of multi-trillion dollar excess reserves,” said Jordan Haedtler, campaign manager for the group. “It’s a pretty crude, anti-consumer tool that rewards big banks.”
Yellen defended the tool, noting that the flip side of the excess reserves are the Fed’s large asset holdings, which generated many more billions of dollars in remittances to the Treasury. She also warned that extinguishing reserves through asset sales could cause more volatility in financial markets and hurt growth.
“The Federal Reserve has transferred, since 2008 through 2015, roughly $615 billion back to Congress, to the taxpayers, to the Treasury, funds that have contributed importantly to financing the government,” Yellen said.
The Fed created hundreds of billions of excess reserves in the financial crisis as it began to rescue financial institutions such as Bear Stearns Cos. and conduct quantitative easing through direct bond purchases.
Normally, banks would try to dump some of the $2.3 trillion in excess reserves they now hold into overnight lending markets to try earning a return. That would swamp attempts by the Fed to control the federal funds rate and make raising rates difficult.
Bullard’s Warning
By paying a rate above its target rate for federal funds, the Fed can keep those funds out of the market and exert more control over its policy rate. To mop up other excess cash coming from sources other than commercial banks, the Fed uses another tool called reverse repurchase agreements where it uses securities as collateral for short-term loans of cash, thus removing it from the money markets.
The political liability of paying large sums of interest to private banks hasn’t been lost on Fed officials. St. Louis Fed President James Bullard said in August that the strategy would benefit from bipartisan support.
“It’s going to mean fairly large payments to the largest banks in the U.S. and to some foreign banks,” Bullard said in an August interview with Wharton Business Radio’s ”Behind the Markets” program on Sirius XM Radio. “If Congress is not comfortable with that, they should definitely tell us right now.”
Addressing Yellen during the hearing, Waters said, "It looks like we’re about to have some bipartisan concern on this issue."
The Fed chief responded, "I hear that."
It Takes a Village: Educators, Unions Rally for Continued Funding of Community Schools
Baltimore City Paper - November 4, 2014, by Evan Serpick - Administrators, teachers, union organizers, community...
Baltimore City Paper - November 4, 2014, by Evan Serpick - Administrators, teachers, union organizers, community leaders, politicians, and students—including cheerleading squads and step teams—were among those gathered in front of City Hall on Oct. 21 to sing the praises of community schools, some literally.
“We are gentle, angry people,” The Charm City Labor Chorus sang from the dais. “And we are singing for our lives.”
The effort, organized by the Baltimore Teachers Union (BTU), Maryland Communities United, Center for Popular Democracy, and AFT-Maryland, aims to press the city government to continue funding the city’s 48 community schools and to ultimately expand the program to include all 210 city schools. (Disclosure: My wife is a teacher in Baltimore City Public Schools.) Community schools work to help students and their families access non-academic services such as health care and food assistance. One key element of the advocates’ efforts, many of those assembled acknowledged, was to inform the public and key officials of exactly what community schools are and how they’re beneficial to students and families.
“People hear ‘community schools’ and they don’t know what that means,” said Councilman Carl Stokes (D, 12th District), who spoke to the crowd “on behalf of [his] colleagues” in support of the effort.
The $10 million in municipal funding for the city’s 48 community schools pays for each school to employ a site coordinator to connect students and families in need with existing services, both public and private. The funding does not, organizers emphasize, pay for the services themselves.
Christopher Gaither, who has been principal of Upper Fells Point’s Wolfe Street Academy for nine years, spoke to the assembled group in Spanish and English. He said when Wolfe Street became a community school in 2006, the school, which had a 72 percent English language learner (ELL) population and 94 percent reduced-price lunch population, ranked 77th among city elementary schools. Eight years later, the ELL rate has gone up to 78 and reduced-lunch rate up to 96, but the school is now ranked second in the city academically, behind only Roland Park Elementary-Middle (which, as Gaither estimated, has an 18 percent reduced-price lunch population). Gaither gives much of the credit to being a community school.
“It sets up systems to identify partnerships to help families to take on challenges,” he said, before adding, more colloquially, “It gives people fish and teaches them how to fish.”
Gaither said his site coordinator helps families apply for food stamps and Medicaid, and also helps find mental health and housing services when needed, in addition to establishing after-school and recreational programs.
“No parent at Roland Park would think it’s acceptable if their child had to go to school hungry or without sleeping because of bedbugs,” he said. “Why should our parents?”
He added that, while community school funding doesn’t pay directly for social services, it does make that funding more effective, since site coordinators are able to link social-service providers directly with families in need so those providers spend less time and money on outreach.
Among those speaking at the rally were Chelsea Gilmer, a seventh-grader at City Springs Elementary/Middle School downtown who is active in Baltimore Urban Debate League, and Yolanda Pernell, a parent of children at Callaway Elementary, a community school in Northwest Baltimore where the site coordinator created an after-school program with the Boys and Girls Club of Metropolitan Baltimore.
Fred D. Mason, president of the Maryland and D.C. AFL-CIO, was on hand to explain why unions support community schools. “It provides a better, safer, more productive community for teachers to work in,” he said. “When the community organizations are coming into the school, interacting with the students, it just make a better overall environment for everybody.”
But BTU president Marietta English, who has been pushing City Hall hard on the issue, worries that funding for community schools will be cut. “We’re looking at how we can get the funding for next year,” she said. “Right now, it’s all about the budget deficit. Everybody I talk to is like, ‘Well you know we got a budget deficit.’ I hear their support but in the end, it’s ‘Where do we get the money?’”
Speaking to City Paper after the rally, Stokes said funding community schools was imperative.
“The city government needs to put it in the budget in this coming budget year—they should pass it so that it goes into the budget for July and can apply to next year,” he said. “This works. The schools that have the full funding for the coordinator, it works for them. A lot of kids come from environments that aren’t as strong as they could be, should be, and to make that environment in the school helps kids all around.”
Source
Fed says rate hike next month hinges on market volatility
Some top policymakers, including Fed Vice Chairman Stanley Fischer, said recent volatility in global markets could...
Some top policymakers, including Fed Vice Chairman Stanley Fischer, said recent volatility in global markets could quickly ease and possibly pave the way for the U.S. rate hike, for which investors, governments and central banks around the world are bracing.
With a key policy meeting set for Sept. 16-17, at least five Fed officials spoke publicly in what amounted to a jockeying for position on whether increasing the Fed's benchmark overnight lending rate was too risky amid an economic slowdown in China, a rising U.S. dollar .DXY and falling commodity prices XAU= CMCU3.
"It's early to tell," Fischer told CNBC on the sidelines of the annual central banking conference in Jackson Hole, Wyoming. "We're still watching how it unfolds." He, along with other Fed officials, acknowledged that the global equities sell-off that began last week would influence the timing of a rate hike, which until only a couple of weeks ago seemed increasingly likely to occur in September.
Concerns about China's economy have whipsawed markets, including Wall Street, even while U.S. economic data has been robust. U.S. stock indexes ended largely unchanged, capping a week that included both the market's worst day in four years and biggest two-day gain since the 2007-2009 financial crisis.
"I think they could settle fairly quickly," said Fischer, a close ally of Fed Chair Janet Yellen.
St. Louis Fed President James Bullard told Reuters he still favored hiking rates next month, though he added that his colleagues would be hesitant to do so if global markets continued to be volatile in mid-September.
The Fed's policy committee "does not like to move right in the middle of a global financial storm," Bullard, a Fed hawk, said in an interview. "So one of the advantages we have is that this storm is occurring now and, at least as of now, we think it will be settled down" by the September meeting.
The comments suggest the next two and a half weeks will be critical for the Fed as well as for global markets. A U.S. rate hike is expected to hit emerging market equities and currencies particularly hard, adding to the sell-offs already seen.
Source: Reuters
Higher rates hurt working families: Opposing view
We should not mince words: Raising interest rates is meant to intentionally slow down the economy. With low-wage...
We should not mince words: Raising interest rates is meant to intentionally slow down the economy. With low-wage earners still underemployed, wages stagnant, and black families still mired in a Great Recession of our own, the economy is simply not ready for the Federal Reserve to slow it down by raising rates. So why the hurry?
By all accounts, supporters of higher interest rates are not following the data. While the unemployment levels are generally inching down, there is pain in other key economic indicators: Wages remain low, and there are pockets of high unemployment and racial inequality. Underemployment is still very high, and there are many more job seekers than job openings. In short, the labor market is still slack, with no risk that rising wages will drive up inflation.
As Nobel laureate Joseph Stiglitz recently wrote, the evidence “indicates that the predictable costs of premature tightening — slower job and wage growth — far outweigh the risk of accelerating inflation.”
Roughly one in five African-American workers and one in six Hispanic workers are unemployed or underemployed. Similarly, about one in six workers with only a high school degree are unemployed or underemployed. These workers have little chance of seeing wage gains if the Fed slows the pace of job creation.
According to the Federal Reserve’s preferred measure, inflation is running under 1.1%, significantly below the Fed’s already-low target of 2%. Inflation has been below 2% for most of the past six years. And Fed staff — as well as financial markets — expect inflation to remain below 2% over the next few years.
The data simply do not add up to a legitimate case for raising rates. The Fed is under enormous pressure to raise rates from Wall Street banks and conservative voices within the institution. But yielding to that pressure would damage the lives and livelihoods of the vast majority of America’s working families. In the absence of any real threat of harmful inflation, there is simply no reason to slow down the economy and submit those families to more hardship.
Connie M. Razza is the director of strategic research at the Center for Popular Democracy.
Source: USA Today
8 days ago
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