Archive for category Economic Exploitation

Connecticut Enacts $10.10 Minimum Wage

Chris Rock

Via Think Progress:

This week, the Connecticut General Assembly passed a bill to raise the state’s minimum wage to $10.10 an hour by 2017, and Gov. Dannel Malloy (D) signed it into law yesterday.

If implemented nationally, a $10.10 minimum wage would put it in line with where it would be if it had kept up with inflation since the 1960s, although far behind the increases in workers’ productivity since then. It would also lift nearly 5 million people out of poverty, close the gender wage gap by 5 percent, and reduce spending on public programs by tens of billions of dollars. There is also real world and academic evidence to suggest that it won’t hurt job growth and could benefit the economy.

Given that the November midterm elections (like 2010) are expected to be dominated by Faux-News-watching senior citizens, it really looks like President Obama will be the only president since FDR whose administration did not enact any increase in the federal minimum wage.

America needs a raise!

UPDATE:
After-tax profits for American corporations hit another record high last year, rising to $1.68 trillion. American workers have experienced a “lost decade” of wage growth, as their pay stayed flat or declined between 2000 and 2012, despite a 25 percent bump in productivity.

UPDATE:
Half A Million People With College Degrees Are Working For Minimum Wage

51 Comments

Robert Reich: The ‘Paid-What-You’re-Worth’ Myth

Inequality graphs

As usual, Robert Reich says it better than I could (emphasis added).

“Paid-what-you’re-worth” is a dangerous myth.

…The real difference is the GM worker a half-century ago had a strong union behind him that summoned the collective bargaining power of all autoworkers to get a substantial share of company revenues for its members. And because more than a third of workers across America belonged to a labor union, the bargains those unions struck with employers raised the wages and benefits of non-unionized workers as well. Non-union firms knew they’d be unionized if they didn’t come close to matching the union contracts.

Today’s Walmart workers don’t have a union to negotiate a better deal. They’re on their own. And because fewer than 7 percent of today’s private-sector workers are unionized, non-union employers across America don’t have to match union contracts. This puts unionized firms at a competitive disadvantage. The result has been a race to the bottom.

…The reason Wall Street bankers got fat paychecks plus a total of $26.7 billion in bonuses last year wasn’t because they worked so much harder or were so much more clever or insightful than most other Americans. They cleaned up because they happen to work in institutions — big Wall Street banks — that hold a privileged place in the American political economy.

…The “paid-what-you’re-worth” argument is fundamentally misleading because it ignores power, overlooks institutions, and disregards politics. As such, it lures the unsuspecting into thinking nothing whatever should be done to change what people are paid, because nothing can be done.

It’s not that working Americans are lazy/incompetent. Capitalists are greedy and powerful.

UPDATE:

Conservative Myths About the Minimum Wage, Debunked
Contrary to conservative myths, raising the minimum wage would boost the economy, benefit all workers, and won’t hurt consumers.

49 Comments

TPP Sidetracked?

Coporatocracy

While a major media news blackout provides cover, Congress is debating whether to give the president the authority to fast-track a massive free trade agreement, the secretly-negotiated Trans Pacific Partnership (TPP). Members of Congress haven’t even been able to read it even though corporate lobbyists have.

President Obama is at odds with Democrats in both houses of Congress concerning reauthorizing a procedure called the “trade promotion authority” (TPA), that would grant the White House power to submit free trade deals to Congress for an up-or-down vote without amendments. Senate Majority Leader Harry Reid is strongly against it.

House Minority Leader Nancy Pelosi has now publicly opposed giving President Obama fast track authority.

“We need transparency. We need a seat at the table to understand what they believe they are doing, so we can make it better. And if we don’t make it better, then we will not accept a path that is a job loser.”

TPP is part of the plan for global corporatocracy run by and for the 1 Percent. Unelected lobbyists and trade representatives are at the table, while representatives from the public at large and businesses other than huge monopolies, are conspicuously absent. From what little we know of the agreement, it would violate the U.S. Constitution, weaken environmental protections, and lead to more job losses, erosion of wages, and worsening inequality. TPP also threatens freedom of speech on the Internet because it would extend restrictive intellectual property laws and rewrite international rules on enforcement.

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Almost 40% of Our 401(k)s Lost in Fees

Yachts

h/t Paul Buchheit

Based on the 6% historical stock market return, an individual investing $1,000 a year for 30 years in a non-fee fund and then holding the accumulated sum for another 20 years would end up with $269,000. Imposing the industry average 1.3% fee would reduce the final total to $165,000, a 39% reduction.

In other words, almost $2 of every $5 in potential 401(k) earnings is lost because of bank fees.

The importance of preserving Social Security becomes even more apparent in light of this 401(k) exploitation. Since 1983, the number of private sector workers depending on a 401(k) instead of a company pension has increased from 12 percent to 68 percent.

It’s an old joke on Wall Street.

An out-of-town guest was given a tour in New York. The guide pointed out the beautiful yachts in the harbor and said “Look, those are the bankers’ and brokers’ yachts.” The guest asked “Where are the customers’ yachts?”

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Pope Francis: Don’t Believe ‘Trickle-Down Theories’

Pope Francis

h/t DSWright on Firedoglake

The most inspiring Pontiff since John Paul II has done it again. Pope Francis has issued a rigorous and comprehensive denunciation of trickle-down economics, the long-discredited theory that the best way to aid poor people is through policies that help the rich get richer.

Called his Apostolic Exhortation, Evangelii Gaudium (The Joy of the Gospel) makes clear that Pope Francis regards modern capitalism and the political movement promoting it to be antithetical to the teachings of Jesus.

Among other things, Pope Francis wrote (emphasis added):

54. In this context, some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naïve trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system. Meanwhile, the excluded are still waiting. To sustain a lifestyle which excludes others, or to sustain enthusiasm for that selfish ideal, a globalization of indifference has developed. Almost without being aware of it, we end up being incapable of feeling compassion at the outcry of the poor, weeping for other people’s pain, and feeling a need to help them, as though all this were someone else’s responsibility and not our own. The culture of prosperity deadens us; we are thrilled if the market offers us something new to purchase; and in the meantime all those lives stunted for lack of opportunity seem a mere spectacle; they fail to move us.

Apostolic exhortations like Evangelii Gaudium are basically calls to carry out existing Church teachings, so in many ways there’s nothing unique about the sentiments expressed in the document. Roman Catholics grew up on stories like Jesus’ admonition that “…it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God” (Matthew 19:23-26).

UPDATE: How To Use The Pope’s Agenda To Make The World More Equal

How do we ensure that the Pope’s shift in focus to inequality and the well-being of the poor becomes a focus of actual politics and not just a bunch of nice words that make us feel like our philosophical principles got a nod from the Big Guy?

UPDATE: Obama cites Pope Francis to attack income inequality and call for minimum wage increase

“The combined trends of increasing inequality and decreasing mobility pose a fundamental threat to the American dream,” Obama said.

82 Comments

Are we at the beginning of a period of political instability and violence?

Peter Turchin seems to believe so – although he also says that it’s not pre-ordained.  I don’t have time for a deeper examination right now, but it’s worth delving these two articles.

A couple key passages:

The US elites, similarly, took the smooth functioning of the political-economic system for granted. The only problem, as they saw it, was that they weren’t being adequately compensated for their efforts. Feelings of dissatisfaction ran high during the Bear Market of 1973—82, when capital returns took a particular beating. The high inflation of that decade ate into inherited wealth. A fortune of $2 billion in 1982 was a third smaller, when expressed in inflation-adjusted dollars, than $1 billion in 1962, and only a sixth of $1 billion in 1912. All these factors contributed to the reversal of the late 1970s.

And this:

Three years ago I published a short article in the science journal Nature. I pointed out that several leading indicators of political instability look set to peak around 2020. In other words, we are rapidly approaching a historical cusp, at which the US will be particularly vulnerable to violent upheaval. This prediction is not a ‘prophecy’. I don’t believe that disaster is pre-ordained, no matter what we do. On the contrary, if we understand the causes, we have a chance to prevent it from happening. But the first thing we will have to do is reverse the trend of ever-growing inequality.

And finally this one:

How does growing economic inequality lead to political instability? Partly this correlation reflects a direct, causal connection. High inequality is corrosive of social cooperation and willingness to compromise, and waning cooperation means more discord and political infighting. Perhaps more important, economic inequality is also a symptom of deeper social changes, which have gone largely unnoticed.

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5 Comments

Don’t Shop on Thanksgiving Day or November 29th

The following retailers have killed Thanksgiving for their employees and families. Don’t let them kill your holiday, too.

  • Walmart
  • Kmart
  • Old Navy
  • Target
  • Staples
  • Office Max
  • Sears
  • Best Buy
  • Toys R Us
  • Michaels
  • Macy’s
  • J.C. Penney
  • Kohl’s

The good news is that Costco, Nordstrom, REI, Burlington Coat Factory, and other companies are refusing to ruin Thanksgiving.

And don’t forget: Friday, November 29 is “Black Friday,” aka Buy Nothing Day. A good day to take a day off from shopping, or visit a locally-owned business. Feel free to laugh at those idiots freezing on line in a parking lot to get an XBox.

UPDATE: Walmart Store Holding Thanksgiving Food Drive For Its Own Workers

18 Comments

Robert Reich: The 7 Biggest Economic Lies

Best video I saw today. H/t Huffington Post.

I would add another lie to the list, the Faux News-worthy idea that raising the federal minimum wage to keep up with inflation will cause unemployment. Wrong. Wall Street financiers crashing our economy causes unemployment.

36 Comments

Pay Is Too Damn Low

Today is the anniversary of NOT raising the minimum wage. Again. Four years ago, the federal minimum wage topped out at $7.25 an hour as a result of a law signed by President George W. Bush. A full-time worker earning the minimum wage now pulls in a salary of about $15,000 per year, far below a living wage. If Congress doesn’t send President Obama legislation to sign by the end of his second term, he will be the first president since Ronald Reagan who didn’t raise the minimum wage at all.

“McBudgeting” video is from Low Pay Is Not OK. Apologies to Jimmy McMillan for making a variation on his famous slogan.

More info: The American Dream Has Turned into a Grueling Quest for Survival for Millions of People

352 Comments

Senator Warren: Crooked Banks ‘Do Not Have Much Incentive to Follow the Law’

Bank of America

Via Raw Story:

In a letter (PDF) sent to Federal Reserve Chairman Ben Bernanke, Attorney General Eric Holder and SEC Chair Mary Jo White on Tuesday, Sen. Elizabeth Warren (D-MA) demanded to know why the government keeps accepting financial settlements from criminal bankers when they could instead be taken to trial, convicted and locked up.

Senator Warren wrote (emphasis added):

The consequence can be insufficient compensation to those who are harmed by illegal activity and inadequate deterrence of future violations. If large financial institutions can break the law and accumulate millions in profits and, if they get caught, settle by paying out of those profits, they do not have much incentive to follow the law.

UPDATE: Holder Says Leak Required “Very Aggressive Action”… Bank Crimes, Not So Much

3 Comments

Krugman: ‘I’d Like to Believe That Ideas and Evidence Matter’

Austerity Survivial Guide

Paul Krugman reflects on the meltdown of the putative policy arguments in favor of austerity, and asks whether it will matter to those in power.

Does a continuing depression actually serve the interests of the wealthy? That’s doubtful, since a booming economy is generally good for almost everyone. What is true, however, is that the years since we turned to austerity have been dismal for workers but not at all bad for the wealthy, who have benefited from surging profits and stock prices even as long-term unemployment festers. The 1 percent may not actually want a weak economy, but they’re doing well enough to indulge their prejudices.

And this makes one wonder how much difference the intellectual collapse of the austerian position will actually make. To the extent that we have policy of the 1 percent, by the 1 percent, for the 1 percent, won’t we just see new justifications for the same old policies?

I hope not; I’d like to believe that ideas and evidence matter, at least a bit. Otherwise, what am I doing with my life? But I guess we’ll see just how much cynicism is justified.

Meanwhile, last night the U.S. Senate unanimously passed a bill aimed at exempting rich people who fly a lot from the consequences of the sequester. The House is expected to follow suit today.

Brian Beutler on TPM:

[I]t sets a precedent that sequestration’s problems — particularly those that impact the wealthy — can be fixed piecemeal by shimmying money around, instead of by raising revenue to restore finances to important government programs.

UPDATE: 12 Programs Congress Refuses To Save From Automatic Spending Cuts

16 Comments

Corporations Have Stopped Paying Their Taxes

Tax time is coming in less than a month. Unless you’re with the 1 Percent, it will cost you. Paul Buchheit on AlterNet:

Corporations have simply stopped paying their taxes, perhaps using the 2008 recession as an excuse to plead hardship, but then never restoring their tax obligations when business got better. The facts are indisputable. For over 20 years, from 1987 to 2008, corporations paid an average of 22.5% in federal taxes. Since the recession, this has dropped to 10% — even though their profits have doubled in less than ten years.

Verizon paid $0We’re in “a golden age for corporate profits,” according to the New York Times. But not a golden age of job creation. In fact, some of the biggest and most profitable corporations are dodging taxes while cutting jobs. The list includes: General Electric, Boeing, Exxon Mobil, Verizon, Kraft Foods, Citigroup, Dow Chemical, IBM, Chevron, FedEx, Honeywell, Apple, Pfizer, Google, and Microsoft.

More info:
N.J. taxpayers protest corporate ‘dodgers’

UPDATE: Corporations Pay Historically Low Tax Rates While Lobbying To Make Them Even Lower

263 Comments

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