Here and Now
Here and Now
At noon, members of the Hedge Clippers campaign, New York Communities for Change and The Center for Popular Democracy...
At noon, members of the Hedge Clippers campaign, New York Communities for Change and The Center for Popular Democracy protest Blackstone, a company behind foreclosures in Puerto Rico, 345 Park Ave., Manhattan.
Read the full article here.
Climate change activist ‘surprised’ after being unanimously approved for LA City Council board
Climate change activist ‘surprised’ after being unanimously approved for LA City Council board
The Los Angeles City Council Wednesday unanimously approved the appointment of environmental activist Aura Vasquez to...
The Los Angeles City Council Wednesday unanimously approved the appointment of environmental activist Aura Vasquez to the Board of Water and Power Commissioners.
Vasquez, director of climate justice at the Center for Popular Democracy, represents a departure from previous commission appointees, who tend to come from the world of politics or business.
Read full article here.
MSNBC - The ED Show - Boehner pushes exclusionary school legislation
MSNBC The ED Show - May 9, 2014 - John Boehner pushed the charter school agenda one step further by supporting...
MSNBC The ED Show - May 9, 2014 - John Boehner pushed the charter school agenda one step further by supporting legislation to pour even more funding into the program. Ed Schultz, Ruth Conniff, and St. Rep. Dwight Bullard discuss.
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Shutting Down the School-to-Prison Pipeline
Shutting Down the School-to-Prison Pipeline
Working at The Center for Popular Democracy (CPD), Kate has partnered with youth-led organizations on various policy...
Working at The Center for Popular Democracy (CPD), Kate has partnered with youth-led organizations on various policy initiatives and community organizing campaigns, and has represented young people facing school suspensions. At Proskauer, she has conducted trainings and served as a mentor and supervisor, enabling our lawyers to make a real difference in school suspension hearings. Even when a suspension cannot be avoided, an attorney may be able to help reduce its duration or secure other benefits, such as help for a learning disability, or a transfer to a school that is better-suited to the student.
Read the full article here.
When It Comes to Jobs, Fed Up With the Fed
The News & Observer - March 5, 2015, by Kevin Rogers - When the monthly jobs numbers come out Friday, many...
The News & Observer - March 5, 2015, by Kevin Rogers - When the monthly jobs numbers come out Friday, many economists will say that the economy is healthy. Some will even say that wages are rising too fast and that steps need to be taken to slow economic growth. But out in the real world, working families and particularly communities of color are being left drastically behind in the recovery.
The disconnect between the rich and the rest of us is only widening, and that is a real problem when the rich are making the decisions for everyone. For higher wages and more robust employment growth, we don’t need to limit ourselves to the usual discussions and the typical solutions. Rather, we should look in a new direction, to the Federal Reserve, for the necessary policy changes that will usher in real growth on Main Street, not just on Wall Street.
Most people don’t pay much attention to what the Fed does and how it does it, but the reality is that the decisions the Fed makes affect us all, every day.
There are two important ways the Federal Reserve can help:
▪ Ensure a monetary policy that delivers genuine full employment and rising wages for all working families. Raising interest rates in 2015 would be a catastrophic mistake. The American economy needs to see significantly more wage growth, not less.
▪ Provide a more transparent and inclusive approach to policymaking and governance. The Fed needs to listen to the voices of working families, not just banks and mega corporations.
Rampant and uneven unemployment can be measured in numbers, but it means that real-life opportunities fall further out of reach for working parents and that doors close on our children. It means that families are feeling the strain, and disenfranchisement is getting worse.
Permitting the economy to speed up significantly offers only upsides. A new report by the Center for Popular Democracy and the Economic Policy Institute finds that until nominal wages are rising by 3.5 to 4 percent, there is no threat that price inflation will meaningfully exceed the Fed’s low 2 percent inflation target. And such wage growth is necessary for workers to begin to reap the benefits of economic growth and to achieve a genuine recovery from the Great Recession.
Indeed, during the past three decades, it was only in the late 1990s, when the Federal Reserve permitted economic growth to speed up and the labor market to tighten, that workers across the economic spectrum, and in communities of color, saw genuine wage improvements.
As was true then, the Fed is not an innocent bystander in our economy, but an active participant. And yet, despite the clear economic disparities among our communities, voices inside the Fed are now saying that the economy is healthy and that the Fed should tamp down growth so that wages stop rising so quickly.
Although the board members that govern the regional Federal Reserve banks are legally required to represent the broad interests of the public, they mostly represent the financial sector or large corporations – they live very different lives from us, and they don’t take our experiences to the boardroom.
The Fed’s decisions are distant from communities that struggle the most in this economy and simply do not reflect the full diversity of the public it is supposed to represent. This explains why board members have produced an economy that works for them. Millions of working families are left with little hope of a better life.
It is no wonder that supporters of higher wages and fuller employment from across the country are turning up the heat on out-of-touch policies and practices coming from the Fed. Regular families should not be shut out the Fed policymaking process. Instead, they should be at the very core of it.
Source
Read more here: http://www.newsobserver.com/opinion/op-ed/article12716264.html#storylink...Community Activists And Senator Warren Persuade HUD Sec. Julian Castro To Help Homeowners And Reign In Wall Street Speculators
Community Activists And Senator Warren Persuade HUD Sec. Julian Castro To Help Homeowners And Reign In Wall Street Speculators
Last September 30, community activists and local officials from around the country came to Washington, DC to protest...
Last September 30, community activists and local officials from around the country came to Washington, DC to protest HUD’s pro-Wall Street policies.
Two years ago, community organizing groups around the country, with the key support of Senator Elizabeth Warren (D-MA), began pressuring HUD Secretary Julian Castro to stop selling delinquent mortgages to Wall Street investors and help nonprofit organizations to purchase the loans, help homeowners keep their homes, and expand the supply of affordable housing.
On Thursday, they won. Castro announced a set of policy changes to its Distressed Asset Stabilization Program (DASP) that activists had labeled a “Wall Street giveaway.” Last year, for example, 98% of the mortgages HUD sold went to Wall Street firms, at discounts averaging nearly 50%. Castro pledged to fix the program to triple the sales of delinquent mortgages to nonprofit community groups with experience in stabilizing neighborhoods and helping homeowners and to put more restrictions on foreclosures.
The policy fix was needed because some of the same Wall Street firms that precipitated the housing crash have been buying up distressed housing assets in bulk, including delinquent mortgages and vacant houses that are a product of the crash.
Both Sen. Elizabeth Warren and HUD Secretary Julian Castro are frequently mentioned a potential VP running mates with Hillary Clinton.
The campaign’s victory is the result of a perfect political storm. The organizers mounted a savvy grassroots organizing campaign that built on the momentum of the Occupy Wall Street movement that began in 2011. In the current political season, no politician, especially a Democrat, wants to be too closely identified with Wall Street’s financial industry, which most Americans still blame for the 2008 economic tsunami from which the country still hasn’t recovered. During this presidential season, both Hillary Clinton and Bernie Sanders vied to be the champion of Wall Street reform. HUD Secretary Castro, a former San Antonio mayor, has been auditioning for the role of Clinton’s vice presidential running mate, but many pundits view him as too conservative and cautious — and too pro-business — to help Clinton galvanize both Latino voters and Bernie Sanders’ supporters in the contest with Donald Trump. With his announcement this week, Castro can claim to be on the side of homeowners and communities against Wall Street speculators.
HUD’s DASP program, started by the Obama administration in 2012, became a part of the larger problem by auctioning off its distressed mortgages to the highest bidder, which allowed Wall Street firms to take ownership and accelerate foreclosures.
“This whole process shows just how tilted the playing field is for the big banks and hedge funds,” said Warren, who has been the Senate’s most vocal critic of Wall Street abuses, last year. “Many of these banks and funds were responsible for fueling the housing bubble in the first place — leading to the crash that hit these families like a punch to the gut. Now these same banks and funds are turning around and scooping up these loans at bargain-basement rates so they can profit from them a second time.”
The new HUD policy changes to fundamentally reform the program, resulting in more mortgage pools being sold to non-profits, more foreclosures avoided, and more vacant property turned into affordable housing. The changes include:
Help existing homeowners facing foreclosure remain in their homes by modifying their mortgages to reflect current market values — a strategy called “principal reduction.” Until now, both HUD and Fannie Mae, under pressure from the banking industry, had resisted this approach. Now, even private equity firms and hedge funds will have to use that strategy in reworking troubled mortgages.
Increasing the sale of HUD’s distressed mortgages to non-profit organizations
A commitment to work with local governments and non-profits to target sales to those who will help homeowners keep their houses and expand the supply of affordable housing.
Far greater provisions for transparency in the sale process
“These recent HUD changes move in the direction of common sense policy,” said Maurice Weeks of the Center for Popular Democracy, one of the groups that coordinated the nationwide grassroots campaign. “We shouldn’t be handing over our neighborhoods at bargain basement prices to Wall Street.”
“HUD’s bulk mortgage sale program has been fueling the speculator buy-up of our neighborhoods,” observed San Francisco Supervisor John Avalas, one of many local elected officials who supported the campaign. “Finally, HUD is making changes to this mortgage sales program that better prioritize what our communities need — saving more homes from foreclosure and creating more affordable housing. It’s about time!”
Sarah Edelman, director of housing policy for the Center for American Progress and coauthor of a new report on the problem, told the New York Times that the policy changes “significant improvements” in the loan sale program.
“The policies announced today are a promising step toward more responsible loan auctions,” she said.
Millions of homeowners are still delinquent on the mortgage payments, many through no fault of their own, but because of predatory and reckless lending practices as well as the sluggish recovery of the economy in terms of restoring the incomes of working families. As a result, federal officials and community activists expect there to be many more sales of troubled mortgages that were guaranteed by the federal government.
The policy changes are a culmination of several years of research and activism by grassroots groups on the front lines of the nation’s housing and banking crisis.
Several years ago, different community groups began noticing the growing presence of Wall Street speculators in their neighborhoods, one of the aftershocks of the epidemic of foreclosures. Several local groups examined records, interviewed tenants, and issued reports documenting that in areas where Wall Street investors own a significant number of these single-family homes — including Atlanta, Las Vegas, Phoenix, Miami, Tampa, Orlando, Charlotte, Dallas, Chicago, Detroit, Denver, and Los Angeles and nearby Riverside — their practices have harmed tenants and undermined long-term neighborhood stability.
The activists discovered that HUD, Fannie Mae, and Freddie Mac — which own or guarantee the distressed mortgages on many single-family homes — were part of the problem. Over the past few years, they’ve auctioned off about 150,000 non-performing loans that they want to get off their books. Of these loans, fewer than two percent have gone to nonprofit buyers. The rest (98 percent) have gone to Wall Street companies. As of last fall, five Wall Street firms — Lone Star, Blackstone Group, Angelo, Gordon & Co., Selene Residential Partners, and the Royal Bank of Scotland — accounted for 64 percent of all the public loan sales. Last year, Goldman Sachs popped up on the purchaser list for the first time, buying loans from Freddie Mac.
The community organizers and their researchers also exposed a double standard. Although Fannie Mae and Freddie Mac have been unwilling to offer principal reduction to struggling homeowners, and HUD has been unwilling to require principal reduction as part of its program, these agencies often offer steep discounts when they sell these mortgages to Wall Street speculators, who typically foreclose on the homeowners, adding to their inventory of homes scooped up in private foreclosure sales. In unloading these mortgages, the federal agencies often ignored the housing needs of local communities.
The grassroots groups enlisted the help of two national umbrella organizations — the Center for Popular Democracy (a network of community organizing groups) and Local Progress (a network of progressive local elected officials) — as well as Senator Elizabeth Warren, who championed the cause in Congress. These used a variety of tactics — protest actions, internet petitions, and muckraking research — to generate media attention and put pressure on the Obama administration.
These groups — many of which had been working on banking issues for over a decade — launched their national campaign in September 2014. They were relentless in pressuring HUD, Fannie Mae and Freddie Mac to prioritize non-profits over speculators in their sales of troubled mortgages. In particular, they demanded that these agencies prioritize sales to non-profit Community Development Finance Institutions (CDFIs) that have the capacity to purchase large inventories of underwater mortgages and distressed properties — including vacant houses that owners lost through foreclosure and occupied homes where underwater borrowers are on the brink of foreclosure — and stabilize them as affordable housing. The CDFIs were being crowded out by hedge funds working hand in hand with HUD, Fannie Mae, and Freddie Mac.
At the start of the campaign, the activists released a report, Vulture Capital Hits Home: How HUD is Helping Wall Street and Hurting Our Communities, that explained why HUD’s policy of favoring Wall Street investors was exacerbating the nation’s housing crisis.
A week before Christmas in 2014, at rallies outside local HUD offices, community groups in Los Angeles, San Francisco and Boston presented HUD with their “Grinch of the Year” award for refusing to fix the DASP program.
“By auctioning pools of delinquent loans to the highest bidders — vulture capitalists — HUD is driving unnecessary foreclosures and contributing to the rise of ‘Wall Street Landlords,’” said Gisele Mata, an organizer with the Alliance of Californians for Community Empowerment, a statewide organizing group that played a key role in the national campaign, at the press conference.
In June 2015, the campaign released another report, Do Hedge Funds Make Good Neighbors? How Fannie Mae, Freddie Mac and HUD are Selling Off Our Neighborhoods to Wall Street, at a protest rally in front of the Santa Monica office of the Blackstone Group, the private equity giant (with over $300 billion in assets under management), which had become the largest landlord of single-family rentals in the country by gobbling up distressed mortgages - including many sold by HUD — at bargain-basement prices. Since 2012, the report found, federal agencies had sold over 120,000 delinquent mortgages to Wall Street hedge funds and private equities firms. Bayview Acquisitions, largely owned by Blackstone, has bought 24,000 of these mortgages. The report unearthed an array of disturbing business practices, including failure to make repairs and the harassment and illegal eviction of occupants. An investigation by the New York Times published last week confirmed earlier findings of abusive practices. The Times revealed, for example, that Lone Star had pushed thousands of borrowers into foreclosure and failed to negotiate with homeowners to modify their mortgages so they could remain in their homes.
Through Local Progress and 17 progressive mayors from across the county,, the campaign persuaded the U.S. Conference of Mayors to pass resolution asking HUD to change its policy.
Last September, community activists and local elected officials from around the country converged in Washington, D.C. to bring the cause directly to federal officials. After a rally at which Senator Warren and Congressman Michael Capuano (D-Mass) demanded that HUD curb its mortgage sales to Wall Street investors, the activists met with senior officials at HUD and the Federal Housing Finance Agency, which oversees the mortgage giants Fannie Mae and Freddie Mac. A few weeks later, the New York Times published an editorial, “Foreclosure Abuses, Revisited,” calling on HUD to suspend its sales of distressed mortgages until federal agencies adopt significant reforms.
By March of this year, the campaign had built enough momentum to get 45 members of Congress to send a letter to HUD and FHFA in support of the campaign’s demands.
In April, Rep. Raul Grijalva (D-Arizona) wrote to Castro - by then on many lists of potential vice presidential candidates - criticizing HUD for worsening the housing crisis with its favorable treatment of Wall Street investors and urging him to “end to the days of casino-level gambling with other peoples’ livelihoods.” That same month, the campaign sent Castro a petition with over 100,000 signatures, demanding that he change HUD’s policies on disposing troubled mortgages.
Along with the changing political climate and Castro’s ambitions, the community organizing groups’ persistence paid off.
With more homes in the hands of non-profits instead of Wall Street speculators, communities will gain further control over their neighborhoods and be less at the mercy of Wall Street. Community groups now plan to work city by city, and state by state, to make sure that HUD sells delinquent mortgage pools to mission-driven purchasers, and to continue the fight for housing justice and community control to strengthen and protect neighborhoods across the country.
By PETER DREIER
Source
Liberals turn to Fed in populist push
Left-leaning groups and lawmakers are taking their populist economic fight to the Federal Reserve, as they seek to...
Left-leaning groups and lawmakers are taking their populist economic fight to the Federal Reserve, as they seek to exert new influence over key monetary decisions and a pair of vacancies at the central bank.
The Fed has faced heavy criticism from the right for years, but the other side of the aisle is now beginning to publicly push the institution for preferred policies. With Congress and the White House seemingly set to butt heads for the next two years, left-leaning community and labor groups are turning to the Fed in an attempt to get an economic policy boost for middle- and working-class Americans.
“In the face of the fiscal side not being really a realistic option to promote an economic recovery, the most important economic policymaker in the United States is the Federal Reserve,” said Shawn Sebastian, policy advocate for the Center for Popular Democracy.
And after successfully driving President Obama to nominate Janet Yellen to lead the Fed, some Senate Democrats are again pressing the administration about openings at the central bank. Sens. Elizabeth Warren (D-Mass.) and Joe Manchin (D-W.Va.) are vocally calling on Obama to nominate tough-nosed Wall Street watchdogs to fill out two board spots that often are filled by academics or economists.
The resurgence of left-leaning interest in the Fed’s operations further complicates the bank’s efforts to remain above the political fray. The Fed has weathered years of criticism from the right, which argues its unprecedented foray into monetary stimulus after the recession was a recipe for disaster.But now, with the Fed preparing to finally dial back years’ worth of quantitative easing, it’s the other side that is airing concerns. This time, the worry is that the Fed could tighten policy too quickly, even as millions of Americans still are looking for work or grappling with stagnant paychecks.
“I have been concerned for some time that when the Federal Reserve began to tighten policy that they would be subject to considerable pressure from people who don’t want them to do that,” said Donald Kohn, a former Fed vice chairman now with the Brookings Institution.
A host of left-leaning groups, including the AFL-CIO and the Economic Policy Institute, have joined forces to take a populist message directly to the Fed. The groups have protested a central bank powwow in Jackson Hole, Wyo., and have held public protests outside the institution’s headquarters in Washington.
The leftward push on the Fed follows those groups notching a major victory at the central bank in 2013. With Obama reportedly favoring economic adviser Lawrence Summers to replace the outgoing Ben Bernanke as head of the Fed, Democrats on and off Capitol Hill embarked on a concerted campaign to get Yellen nominated for the top job instead.
Democratic lawmakers took the rare step of publicly advocating for Yellen, then the Fed’s vice chairwoman, before a nomination was made, effectively announcing opposition to Summers in the process. Though Obama defended Summers in public, he ultimately deferred to that pressure and nominated Yellen for the job.
Now, Warren and Manchin are hoping to exert more influence, calling on Obama to fill two openings at the seven-member board with tough supervisors who “have a demonstrated commitment to not backing down when they find problems.”
Fed governors are given a 14-year term, so if those two find success on that front, the end result could be a considerable shift in how the central bank operates as a financial regulator. And any new voices would likely receive an open hearing from Yellen, whose background is as an economist, not a regulator.
“My impression is that Chair Yellen is running the system by consensus in a considerable way, she consults widely,” said Kohn.
Since taking the job, Yellen has made a concerted effort to place the Fed’s deliberations within the context of the working class. One of her first acts as the Fed’s new leader was to address at a Chicago event how the central bank hoped to boost jobs, and she has agreed to meet with left-leaning protestors to hear their concerns.
But Yellen’s openness to those new voices is leaving some unsettled.
“There’s a trend here that’s pretty clear and pretty concerning,” said Steven Lonegan, director of monetary policy at American Principles in Action, which advocates for tighter Fed policy, including a return to the gold standard.
“You can’t start manipulating the value of our money because you have a specific political agenda,” he added.
But these new advocates argue the Fed has always been subject to politics. Sebastian argued that Fed officials and those that track Fed policy skew heavily from corporate and banking interests, leaving a “Main Street” voice out of the picture.
“Every person carries political baggage,” he said. “All we’re trying to do is have that conversation reflect reality.”
But even the people behind the new leftward push on the Fed acknowledge advocacy of the publicly mysterious institution is somewhat novel. Conservative criticism of the Fed has been around for years, first helmed by former Rep. Ron Paul (R-Texas), but a more liberal effort for influence has not been seen in decades.
“This is a new space for us,” said Sebastian. “We don’t know what the effect of this type of engagement will be.”
Source: The Hill
City Bar Statement Praising New York City Council’s Efforts to Fund Immigration Public Defender System, and Urging Nationwide Action
New York City Bar - July 19, 2013 - The New York City Bar Association applauds the New York City Council for allocating...
New York City Bar - July 19, 2013 - The New York City Bar Association applauds the New York City Council for allocating $500,000 for the “nation’s first public defender system for immigrants facing deportation,” as the New York Times described it. The Council’s effort is a model for what Congress should enact nationwide, to support justice, economic fairness and efficient administration of the courts.
The City Bar salutes the City Council’s commitment to fund lawyers for New York’s low-income immigrants through the New York Immigrant Family Unity Project. Research by a study group convened by Second Circuit Judge Robert Katzmann has demonstrated the inability of immigrant detainees to represent themselves, with only three percent of them achieving success in their cases without counsel. Lenni Benson, the chair of the City Bar’s Immigration and Nationality Committee, and Lynn Kelly, the Executive Director of the City Bar Justice Center, are participants in Judge Katzmann’s efforts.
Congress should build upon New York’s model and provide appointed counsel to indigent non-citizens in immigration proceedings nationwide. In its position letter and in continued meetings with Congressional members and staff, the City Bar, through its Immigration & Nationality Committee, has emphasized that a right to counsel advances fundamental American values of fairness and due process. As the letter stated, “There is no citizenship test for counsel in America.” The familiar words “You have the right to an attorney. If you cannot afford an attorney, one will be provided for you” do not include “only if you are a citizen.”
City Bar President Carey R. Dunne said, “When you consider that Congress, with bipartisan support, has granted a right to counsel to sex offenders and Al Qaeda suspects in detention hearings, and that 76 percent of Americans support a right to counsel for immigrants facing deportation, it’s hard to see why appointed counsel is still denied to non-citizen residents facing detention and deportation.”
Counsel also provides economic and social benefits that outweigh its costs. Appointing counsel in these cases pays for itself by reducing costly detention, increasing court efficiency, and reducing societal costs due to the splitting up of families and the resulting abandonment of children. “Increasing access to justice by funding legal services for the City’s poorest residents actually benefits the entire City’s economy,” said Dunne. The City Bar’s 2013 Policy Recommendations for New York City’s Next Mayor sets out these benefits in more detail, and the City Bar’s Immigration & Nationality Law Committee is currently preparing a report to more specifically articulate these benefits in the immigration context.
The City Bar’s efforts to expand the right to counsel in immigration proceedings follows its decades of advocacy to provide lawyers to those unable to adequately represent themselves when liberty and basic needs are at stake. In 1959, the City Bar’s groundbreaking report Equal Justice for the Accused advocated appointed counsel for criminal defendants as reflecting society’s interest in “fundamental human rights,” and provided support for the U.S. Supreme Court’s 1963’s Gideon v. Wainwright decision. In 2006, the City Bar co-sponsored the American Bar Association’s resolution supporting a right to appointed counsel in civil proceedings. In 2009, the City Bar’s Immigration & Nationality Committee released a report arguing for a right to appointed counsel for detainees in immigration removal proceedings.
Source
Seattle Officials Repeal Tax That Upset Amazon
Seattle Officials Repeal Tax That Upset Amazon
“From coast to coast, people lose their homes and get displaced from their communities even as the biggest corporations...
“From coast to coast, people lose their homes and get displaced from their communities even as the biggest corporations earn record profits and development booms,” said Sarah Johnson, director of Local Progress, a national association of progressive elected municipal officials. “Elected officials across the country are paying close attention to how Amazon and other corporations have responded to Seattle’s efforts to confront their affordable housing and homelessness crisis.”
Americans Don’t Miss Manufacturing — They Miss Unions
Americans Don’t Miss Manufacturing — They Miss Unions
Filed under In Real Terms This is In Real Terms, a column analyzing the week in economic news. Comments?...
Filed under In Real Terms
This is In Real Terms, a column analyzing the week in economic news. Comments? Criticisms? Ideas for future columns? Email me or drop a note in the comments.
U.S. manufacturing jobs, I argued a few weeks ago, are never coming back. But that doesn’t stop politicians from talking about them. Donald Trump scored his knockout blow in Indiana in part by railing against the decision by Carrier, a local air-conditioning manufacturer, to shift production to Mexico. Bernie Sanders and Hillary Clinton have sparred throughout their race over who would best protect manufacturing jobs. And the man they are all trying to replace, President Obama, pledged during his reelection campaign to create a million manufacturing jobs during his second term; he’s still about 700,000 jobs short of that goal.
Candidates talk about manufacturing because of what it represents in the popular imagination: a source of stable, well-paying jobs, especially for people without a college degree. But that image is rooted more in nostalgia than in reality. Manufacturing no longer plays its former role in the economy, and not only because there are far fewer factory jobs than in the past. The jobs being created today often pay less than those of the past — sometimes far less.
A new report this week from the Labor Center at the University of California, Berkeley, found that a third of production workers — non-managers working on factory floors and in related occupations — earn so little that their families receive some form of public assistance such as food stamps or the Earned Income Tax Credit. Many of those workers are temps, who account for a growing share of factory employment. The median wage for a manufacturing production worker, according to separate data from the Bureau of Labor Statistics, was $16.14 an hour in 2015, below the $17.40 an hour for all workers.
On average, manufacturing jobs still pay better than most jobs available to people without a college degree. The median manufacturing worker without a bachelor’s degree earned $15 an hour in 2015, a dollar more than similarly educated workers in other industries.1 But those averages obscure a great deal of variation beneath the surface. Average manufacturing wages are inflated by high-earning veterans; newly created jobs tend to pay less. And there are substantial regional variations. The average manufacturing production worker in Michigan earns $20.80 an hour, vs.$18.86 in South Carolina, according to data from the Bureau of Labor Statistics.
Why do factory workers make more in Michigan? In a word: unions. The Midwest was, at least until recently, a bastion of union strength. Southern states, by contrast, are mostly “right-to-work” states where unions never gained a strong foothold. Private-sector unions have been shrinking across the country for decades, but they are stronger in the Midwest than in most other parts of the country. In Michigan, 23 percent of manufacturing production workers were union members in 2015; in South Carolina, less than 2 percent were.2
Unions also help explain why the middle class is healthier in the Midwest than in the Southeast, where manufacturing jobs have been growing rapidly in recent decades. A new analysis from the Pew Research Center this week explored the state of the middle class in different parts of the country by looking at the share of households making between two-thirds and double the national median income, after controlling for the local cost of living. In many Midwestern cities, 60 percent or more of households are considered “middle-income” by this definition; in some Southern cities, even those with large manufacturing bases, middle-income households are now in the minority.
Even in the Midwest, however, unions are weakening and the middle class is shrinking. In the Indianapolis metro area, where the Carrier plant Trump talks about is located, the share of households in the middle tier of earners has shrunk to 54.8 percent in 2014 from 58.9 percent in 2000. And unlike in some parts of the country, the decline in the middle class there has been primarily driven by people falling into the lower tier of earners, not moving up. The Carrier plant, where workers make more than $20 an hour, is unionized.
Cause and effect here is complicated. Unions have been weakened by some of the same forces that are driving down wages overall, such as globalization and automation. And while unions benefit their members, economists disagree over whether they are good for the economy as a whole. Liberal economists note that overall wages tend to be higher in union-friendly states; conservative economists counter that unemployment tends to be higher in those states, too.
But this much is clear: For all of the glow that surrounds manufacturing jobs in political rhetoric, there is nothing inherently special about them. Some pay well; others don’t. They are not immune from the forces that have led to slow wage growth in other sectors of the economy. When politicians pledge to protect manufacturing jobs, they really mean a certain kind of job: well-paid, long-lasting, with opportunities for advancement. Those aren’t qualities associated with working on a factory floor; they’re qualities associated with being a member of a union.
#FedSoWhite
When the Federal Reserve’s policy-making Open Market Committee meets next month to decide whether to raise interest rates, every one of the 10 voting members will be white. Eleven of the 12 regional Fed bank presidents, who rotate voting responsibility, are white, and not one is black or Latino. (Minneapolis Fed President Neel Kashkari is Indian-American.) The Fed does a bit better when it comes to gender balance — Chair Janet Yellen is a woman, as are three other voting FOMC members. But overall, the people making U.S. monetary policy are disproportionately white men.
Does that matter? More than 100 members of Congress think so. In a letter to Yellen on Thursday, 11 senators and 116 members of the House of Representatives — all of them Democrats — wrote that they are “deeply concerned that the Federal Reserve has not yet fulfilled its statutory and moral obligation to ensure that its leadership reflects the composition of our diverse nation.” The letter is only the latest effort to draw more attention to the Fed’s lack of diversity: A report earlier this year from the liberal Center for Popular Democracy highlighted the issue, and several members of Congress also asked Yellen about it when she testified on Capitol Hill in February. (Bernie Sanders signed the letter. Hillary Clinton, who wasn’t eligible to sign since she isn’t in Congress, said she agreed with the message.)
It isn’t clear whether policy would be any different if the Fed were more diverse. But the letter writers and their allies argue that at the very least the Fed’s lack of representation could be skewing the way policymakers view the economy. By law, the Fed must balance two competing goals: maintaining stable prices (which the Fed defines as inflation of about 2 percent per year) and promoting full employment. In recent months, Yellen and her colleagues have begun the process of raising interest rates — concluding, in effect, that with the unemployment rate down to 5 percent, the “full employment” part of their mandate is largely complete. But the unemployment rate for African-Americans was 8.8 percent in April, as high as the white unemployment rate was in the middle of the recession. For them, “full employment” remains a long way off.
The long road back
Last week I noted that Americans who graduated from college during the recession are still struggling to make up for the slow start to their careers. The Wall Street Journal this week told the even more harrowing tale of people who lost jobs during the recession, many of whom still bear deep financial and psychological scars.
That isn’t surprising. Losing a job is a significant setback in any context, but it is far worse when a bad economy makes it hard to get back to work quickly. People who are laid off in a recession are far more likely to become unemployed for more than six months, which can then make it harder to find a job even once the economy improves. One estimate cited by the Journal found that people who lose jobs during a recession continue to make 15 to 20 percent less than their peers who kept their jobs, even a decade or more after the recession ended. And that is just in the typical recession; the most recent downturn was far worse.
Number of the week
Just under 8 million Americans were looking for work in March, and employers had 5.8 million jobs available to be filled. Economists look at the ratio of those numbers as a gauge of the health of the labor market, and by that measure, the economy is looking good: There were 1.4 unemployed workers for every open position in March, the fewest since 2001.
Don’t take the workers-per-job ratio too literally, though. The official definition of “unemployment” leaves out plenty of people who want jobs, and the government count of job openings is also incomplete, counting only positions for which companies are actively recruiting. But alternative measures of both unemployment and openings show the same trend: There are more jobs and fewer workers to fill them. That’s good news for workers who want jobs, and also for those who already have them — at some point, companies that want to attract workers will have to start offering higher pay.
Elsewhere
Americans are having fewer babies. Janet Adamy looks at the causes and consequences of the U.S. “baby lull.”
Eduardo Porter argues the government should do more to create good jobs for those displaced by the transition toward a service-based economy.
Timothy O’Brien, who saw Donald Trump’s tax returns as part of a lawsuit a decade ago, provides some hints as to what voters might learn if Trump ever releases the documents publicly.
Lam Thuy Vo and Josh Zumbrun dive into the data on the jobs created since the start of the recession.
In much of the country, poor people don’t have access to broadband internet, according to a Center for Public Integrity investigation.
By Ben Casselman
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1 day ago