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The big takeaways from Biden’s jobs report bust

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Women, teachers and health care employees all suffered from the slow rebound last month.

The labor market recovery that President Joe Biden has promised slowed again in September, with a weaker-than-expected 194,000 new jobs created.

That suggests school reopenings and the end of generous federal jobless benefits haven’t brought enough Americans back into the labor force amid the resurgence of the coronavirus.

Yet the recovery has been uneven throughout the economy, with women, teachers and health care employees suffering from the slow rebound last month, according to a Labor Department report released Friday. Among the gainers in September were white and Asian workers, retail and hospitality employees, the long-term unemployed and wage earners generally.

While the overall unemployment rate fell to 4.8 percent from 5.2 percent, the drop was likely fueled by 183,000 people leaving the labor force.

Biden touted the report as another sign that his administration has delivered steady month-over-month job growth and blamed the disappointing overall number partly on the fact the survey was taken before a recent decline in Covid cases.

“Remember, today’s report is based on a survey that was taken during the week of September the 13th, not today — September 13, when COVID cases were averaging more than 150,000 per day,” the president said in remarks after the report. “Since then, we’ve seen the daily cases fall by more than one-third and they’re continuing to trend down. We’re continuing to make progress.”

Here’s a closer look at how key groups fared in September:

Women

The report showed that 309,000 women 20 years and older dropped out of the labor market in September, marking the second straight month of losses. Men in the same age group regained 182,000 jobs.

Working women have been acutely affected by the school and child care closures prompted by the pandemic, holding many back from returning to the workforce. But they were initially expected to go back to work in September, with school reopenings relieving some of the responsibilities that had been keeping them at home. But since the Delta variant of the coronavirus took hold in late summer and disrupted school plans, economists have been bracing for a devastating September for women who may have had to continue taking care of their kids amid the uncertainty. The numbers show that concern was well-founded.

Race

While other major ethnic groups have seen their unemployment rates near or below the national level throughout most of 2021, the rate among Black workers had remained near 9 percent. In September, Black unemployment fell by almost a full percentage point to 7.9 percent, narrowing the gap on the national rate of 4.8 percent. The bad news: 83,000 Black workers also left the labor force last month, probably contributing to the drop in the jobless rate.

Black workers — and women in particular — make up large shares of the workforce in health services and child care, industries that have been slower than most to recover. AFL-CIO Chief Economist Bill Spriggs has also argued that the stubbornly high unemployment rate among Black workers could be due to discrimination in hiring.

Hispanic workers have also been experiencing jobless rates above the national level, seeing 6.3 percent unemployment in September, little changed from August. White and Asian workers have been recovering more quickly, with the unemployment rate falling to 4.2 percent in September for both groups.

Retail and leisure

Consumer-facing industries including retail, leisure and hospitality were walloped in early 2020 by pandemic safety restrictions and business closures, facing the largest post-pandemic jobs deficit of any sector of the economy. They remain the first to take the hit when fears of the virus increase. But both sectors saw some improvement in September, which is a good sign for the economy as coronavirus cases start to recede. Leisure and hospitality added 74,000 jobs, while retail added 56,000.

Labor force participation

Beyond the topline number, the jobs reports suggests that fewer people were optimistic enough about the market to look for work last month.

While the national unemployment rate has been falling for months, the labor force participation rate — which captures how many people are either employed or actively looking for work — has remained pretty stagnant. That rate was 61.6 percent in September, not much different from the 61.7 percent in August. It’s also still down 1.7 percentage points from February 2020, just before the pandemic hit. That matters because the size of the workforce is tied to productivity, which is the basis for wage gains.

Many Republicans had predicted that the Sept. 6 expiration of federal unemployment benefits would increase employment as Americans could no longer afford to stay away from work. But since the jobless aid has ended for millions, many people have fallen out of the labor force instead and are no longer considered “unemployed.” While this can push the unemployment rate down — if you’re not actually looking for a job, you’re not counted as unemployed — it’s also a sign that there are fewer people actively available for work.

Wages

Average hourly earnings increased in September by 19 cents, bringing them to $30.85. That follows five months of significant hikes in wages and suggests that the widespread demand for workers as businesses have reopened has put upward pressure on pay, as employers compete for labor.

Long term unemployed

The longer people remain unemployed, the longer it typically takes them to find a job, which is why economists like to keep an eye on the number of those who have been out of a job for at least six months. That figure fell by nearly 500,000 last month, which is a good indicator of labor market health, as people with large gaps on their resumés can face more obstacles to reemployment and can find themselves in deeper financial trouble. However, there were still 1.6 million more long-term unemployed in the workforce last month than before the pandemic began.

Education

One of the puzzles in the jobs report was the loss of jobs in state and local public education in September — the month when schools were supposed to reopen. Instead, the market saw a notable decrease in jobs in this area — a drop of 161,000 workers, which dragged down the headline numbers.

Much of this, however, is likely due to seasonal adjustment. That’s because schools usually ramp up hiring in September for the start of the academic year, so the models that adjust for seasonal factors expect it. But this year, some of those hires may have taken place in July and August as students started earlier, making September hiring in public education slower than normal. But while the decline of 161,000 looks bad, it’s probably due in part to hires that did not happen last month rather than actual job losses, a key distinction.

About the author: Rebecca Rainey is an employment and immigration reporter with POLITICO Pro and the author of the Morning Shift newsletter. Prior to joining POLITICO in August 2018, Rainey covered the Occupational Safety and Health administration and regulatory reform on Capitol Hill. 

About the author: Megan Cassella is a trade reporter for POLITICO Pro. Before joining the trade team in June 2016, Megan worked for Reuters based out of Washington, covering the economy, domestic politics and the 2016 presidential campaign.

This blog originally appeared at Politico on October 8, 2021. Reprinted with permission.


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An Old Idea for a Guaranteed Income Is Back in Style

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A new proposal for a negative income tax could eliminate poverty in the United States.

In these heady days of progressive proposals for massive increases in the federal budget, such as the Democrats’ recently announced $3.5 trillion human infrastructure package, a timely paper has reopened an old debate with a new proposal for a guaranteed national income, in the form of a negative income tax (NIT). The NIT, first proposed in the 1970s, is one type of income guarantee. It provides a cash benefit to individuals?—?an income floor?—?that declines as their income from other sources increases. The authors claim that their plan would completely eliminate poverty in the United States, which would be a very big deal.

The United States currently establishes income floors for various groups of people, especially under Social Security, but the biggest gap has always been those of working age said to be able-bodied who for one reason or another are unable to earn much or any income. An important but limited response to this gap is the new expanded Child Tax Credit (CTC), which began distributing direct cash payments to parents earlier this month.

The paper, from The Ohio State University’s Kirwan Institute For The Study Of Race And Ethnicity, was authored by a group of economists and researchers, including Naomi Zewde, Kyle Strickland, Kelly Capotosto, Ari Glogower and Darrick Hamilton of the New School’s Institute on Race and Political Economy. Hamilton was an adviser to Bernie Sanders during his 2020 campaign and bids fair to remain a leading economic voice on the Left for a long time to come, so this proposal is as much a news event as a policy paper. On a parallel track in Congress, Rep. Rashida Tlaib (D?Mich) has proposed an NIT in her ?“LIFT+ Act,” which would provide a $3,000-per-adult basic income.

How a negative income tax works

The negative income tax has been called an ?“upside-down” income tax. Eligible individuals receive a fixed cash benefit that is reduced according to income from other sources, also known as ?“means-testing.” For instance, if the benefit provided is $10,000 with a ?“phase-out rate” of 50 percent, and a person’s other income is $12,000, the benefit would be reduced by 50 percent of this other income, or $6,000, leaving a net benefit of $4,000. In this example, any income above $20,000 would ?“zero out” the benefit.

Like the universal basic income (UBI) idea, an NIT benefits those with the lowest incomes, or no income at all.

Means-testing has provoked criticism on the Left, but it is the only way to keep the cost of a cash benefit manageable enough to fit into the federal budget. The UBI is thought to avoid means-testing, but this is incorrect. Insofar as the UBI is taxable and returned to the government in income taxes, for all practical purposes it too is means-tested. 

The NIT proposed in the paper, which we’ll call ?‘ZSCGH,’ from an acronym of the authors names, is a logical extension of Biden’s CTC in several respects. One is that it’s ambitious in terms of cost?—?estimated at $876 billion a year?—?but not wildly out of sync with the scale of current budget thinking. Like the new CTC, it does not require recipients to be employed. The program would also be tax-based, pitched as a reform of the Earned Income Tax Credit (EITC), and administered by the Internal Revenue Service. And finally, it’s targeted and not universal, which is why its cost is plausible.

Problems with UBI

In all these respects, it surmounts the difficulties of popular UBI advocacy, the greatest of which is the unrealistic cost: A UBI that genuinely meets basic needs would be entirely out of bounds of existing or plausible federal budgets.

A UBI provides an unconditional cash grant to everyone. (Exactly who constitutes ?“everyone” is actually a ticklish issue, but one left for another time.) One UBI proposal for $6,000 a year?—?well short of ?“basic” if basic means something a person could live on?—?is estimated to cost $1.9 trillion annually. (When you hear about budget packages of $4 or $6 trillion, that generally means over a ten-year period. The annual amount would be a tenth of that.) Andrew Yang’s proposal for $12,000 per person would cost $2.8 trillion a year. 

Sometimes UBI advocates will defend against sticker shock by cautioning that the bulk of that cost would be reclaimed with higher taxes. The biggest flaw in that argument is political: Imagine Democratic politicians’ reactions to the idea of an annual tax increase of a trillion dollars, per year.

The main economic flaw of this approach is that the so-called ?“claw-back”?—?which amounts to a humongous tax increase?—?contradicts claims that a UBI would have no incentive effects. In other words, a great part of the UBI benefit is reclaimed by the federal government though the individual income tax, and the net taxes (tax increase minus the UBI benefit) of many would rise to finance a UBI. A tax on income is said to discourage work, saving or investment, though such claims are routinely exaggerated by the Right. But the claim that the UBI escapes incentive effects altogether is another myth fostered by its advocates.

Another problem is that the round-trip of that enormous amount of money?—?from government to person as UBI benefits, back to the government as tax increases?—?would lose a lot of passengers along the way: Roughly one dollar in six owed in federal taxes is not paid on time, or ever.

A more just safety net

The ZSCGH paper wisely highlights the impact of the NIT in the realm of racial justice. As with other social-democratic proposals, a benefit that reduces class inequality also reduces (but does not eliminate) racial inequality. The authors document the household poverty rate by race as follows: whites, eight percent; Blacks, 18 percent; Latinx, 17 percent. An NIT that eliminates poverty, or that just cuts it in half, benefits larger proportions of Black and Latinx households, simply because their poverty rates are higher to begin with. The paper’s authors also write that their proposal narrows median income gaps by race, since the benefits would extend well above the official poverty line. The reduction in gender inequality, especially for female-headed households, follows for the same reasons.

Eliminating poverty by raising individual incomes with cash benefits is not the limit of progressive objectives. We would not want people to rely on cash to buy health insurance or clean water, for instance. People also need public services and facilities, with social insurance programs alongside a social safety net strengthened by an NIT. 

We also want to empower workers to win higher wages from employers. The cushion afforded by a guaranteed income would help workers bargain for better deals, since they become more able to withhold their labor, or to take a spell out of the labor market. But still, you can’t knock cash. 

Even with guaranteed public employment (another Darrick Hamilton project), there will always be those unable to work who will need income. An NIT is the right field upon which to fight this battle. The ZSCGH paper and the Tlaib plan provide a running start.

This blog originally appeared at In These Times on July 26, 2021. Reprinted with permission.

About the author: Max Sawicky is a senior research fellow at the Center for Economic and Policy Research. He has worked at the Economic Policy Institute and the Government Accountability Office, and has written for numerous progressive outlets.


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How the Covid Land Rush Is Hurting New Farmers

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The pandemic has inspired city dwellers and investors to buy land in rural areas. That’s driving up farmland prices and pushing some beginning farmers out of the market.

Abel Dowden, age 20, grew up on his family’s beef farm in the Missouri Ozarks. He just got married and is ready to start his own farm. Dowden had his eye on a neighboring place but he is a day late and a dollar short. Over the span of the last year, the price of the adjoining property has tripled. Since Dowden can’t afford the new price, the landowner decided to hold on to it until the right buyer comes along.

What caused this rapid spike in land value? Who will the right buyer be?

The data is still being analyzed but already agricultural economists across the country have noticed a marked increase in agricultural land value caused by the Covid-19 pandemic. In this new market, locals looking for their retirement property and out-of-staters looking for some peaceful country living or an easy investment compete with, and often out-compete, new farmers.”When newcomers move in and take that land out of production, they actually threaten rather than boost the rural economy.”

During the pandemic, federal stimulus money has poured into rural communities in the form of small business assistance, farm aid, unemployment benefits and income-based payments. While the money has helped some scrape by this year, it has left others with cash on hand they wouldn’t otherwise have. Levi McDaris, a commercial banker in the Missouri Ozarks, says that in his area many people are turning around and putting that money into land, driving up demand and prices.

At the same time, the uncertainty of Covid-19 prompted investors to seek out stable investments in an otherwise turbulent market. Ag land?—?known for steady, reliable returns?—?has long been a go-to investment for large firms but this last year also saw new people investing in land, says Ray Massey. Massey is an ag economist at the University of Missouri Extension which conducts an annual survey of the ag-land market. Moreover, the Federal Reserve has kept interest rates low to encourage investment, which has made land purchases easier for individuals and investors.

Those individuals are not only rural people. As Covid-19 has redefined the limits of modern work, urban people have reconsidered city living. Nearly 40% of U.S. adults living in urban areas would consider moving to rural areas according to an April 2020 Harris Poll. Rural housing markets around the country have been blown apart by this sudden demand. In parts of rural California, for example, housing prices have increased by an average of 25% since the start of the pandemic. In the small city of Springfield, Missouri, about an hour West of where Dowden lives, housing prices have increased about 11% since May 2020. This demand extended to ag land, especially into what might be called recreational ag land: often hunting grounds or small 40-or-less-acre lots used for lifestyle farming. While the demand has mostly increased within an hour and a half of larger urban areas, this has also pushed up the value of ag land farther out. 

Since people looking for lifestyle or recreational properties ?“are willing to pay more than the agricultural value,” explains Wyatt Fraas, the farm and community assistant director at the Center for Rural Affairs, ?“all the surrounding ag land gets an increase in value.” The phenomenon has pushed up cropland prices across the U.S. in places like IowaOhio, and Missouri.

Not only has the demand for lifestyle properties pushed up the price of ag land, but non-farming people moving into rural areas have also quickened the development of ag land into smaller, lifestyle plots around rural towns. When media outlets hasten to characterize the flight to the country as a revitalization of rural America, they miss this important part of the picture. ?“When newcomers move in and take that land out of production, they actually threaten rather than boost the rural economy,” says Julia Freedgood, co-author of the American Farmland Trust’s Farms Under Threat report.

Small towns afflicted by the real crisis of business and youth-flight can benefit from the arrival of newcomers, but only when the influx does not come at the cost of ?“ag land being split up” and new farmers being driven out of the land market, says Fraas. He explains that while rural towns do need more families?—?for healthy schools, businesses, and communities?—?land developed outside of town is an economic hardship for small towns because it increases demand for services but not tax revenue. Farmland on the other hand, he said, ?“provides a lot of tax income as well as other economic income. Every farm is essentially a small factory that buys lots of goods and services.”

Moreover, in a world flailing in the fight against climate change, low-density rural development is significantly more energy and greenhouse gas intensive than high-density urban core development, Freedgood explains. This is on top of the direct environmental destruction caused by such development, which breaks up animal habitats, damages watersheds and native ecosystems and, ironically, contributes to the spread of infectious disease.

Despite the economic and environmental costs to local communities, the Farms Under Threat report finds that between 2001 and 2016, nearly 7 million acres of farmland were converted to low-density residential (lifestyle) land use. 

And, of course, conversion into housing developments takes ag land out of the market and drives up land prices. The surging price may be good for landowners but it’s ultimately changing who can afford to become a landowner. Abel Dowden’s neighbor saw his property value triple, but this means Dowden, the new farmer, is unlikely to be able to buy his farm. 

Some of the factors driving up farmland prices?—?such as low interest rates and federal stimulus money?—?probably won’t last. The newfound interest in rural living, however, may stick around or even increase. Currently, about 42 million people—mostly in rural America—are without access to broadband internet. Businesses and families alike view poor broadband access as a major detractor of rural living; thus, broadband access is arguably a major factor limiting rural growth. In response, Biden’s American Jobs Plan includes $100 billion for broadband infrastructure. As rural broadband access increases, more people may want to move to rural areas, buy land and build homes, further limiting the availability of affordable farmland. “The future of farming is not farm ownership because the cost of farm ownership is just getting too high.”

Land access is the number one challenge that young farmers and ranchers face, according to the National Young Farmers Coalition, a network of young farmers fighting for the future of agriculture. As traditional farms and ranches continue to struggle with profitability, fewer and fewer retiring farmers are passing their land onto their children. Instead, their land enters the ag-land market, where it is difficult for new farmers to compete with industrial ag operations, investors, and developers. As prices go up, the imbalance of purchasing power intensifies. The Covid-19 uptick in prices and corresponding rise in investment and non-farming purchases is accelerating this long-running trend. Sadly, says McDaris, a banker who often works with farmers on getting loans, ?“the future of farming is not farm ownership because the cost of farm ownership is just getting too high.”

Independent family farms are the ?“key to maintaining a resilient farm sector and healthy rural communities,” reads one of the National Young Farmers Coalition guiding principles. In fact, small-scale farms are vital not only for rural communities but America’s food system at large. The pandemic made this point all too clear as industrial ag produced piles of pig corpses while people waited in line for hours in food bank lines where supplies were running short. The Young Farmers Coalition finds that not only is farmland overwhelmingly concentrated in the hands of older farmers (according to the USDA, the average age of farmers is 57.5), 98% of farmland is owned by white people; it is imperative that new, young, diverse farmers replace aging farmers, not industrial ag behemoths. 

Some states have policies meant to address farmland development and encourage transition to new generations of farmers. These policies can protect agricultural viability and use zoning laws to control low-density sprawl. For instance, under some state programs?—?which are fairly limited in Missouri but more prevalent in other parts of the United States?—?Dowden might be able to sell an agricultural conservation easement on the land in order to make up part of the higher price. This would help him with the purchase now and ensure that the land is not developed even after he is done farming. Some states have also implemented Farm Link programs that connect land seekers with landowners who want their land to stay in agriculture. If such a program was established in Missouri, it might help young farmers like Dowden gain access to farmland.

According to Freedgood, of the American Farmland Trust, there’s a lot of important work to be done on the local level. ?“Good rural planning is incredibly important,” she says. ?“Not just land use planning but comprehensive planning that supports agriculture and rural economies. If done well, not only will it protect the working landscape, it will enhance community resiliency and food security in the face of climate change.”

For now, beginning farmers like Dowden continue to face an uphill battle, only exacerbated by the Covid storm. McDaris, the Ozark banker, reflects?“It’s not that people wanted it to become this way, I think it’s just the unintended consequences of who we are and what we’ve done.”

This blog originally appeared at In These Times on June 14, 2021. Reprinted with permission.

About the Author: Sadie Morris is a former In These Times editorial intern. She is pursuing a bachelor’s degree in Culture and Politics at Georgetown University with a focus on political economy and the environment.


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Don’t Just Send People Money During a Pandemic—Do It All the Time

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Universal Income Project Leadership - Universal Income Project

The evidence is in: Sending out direct cash payments has been a full-blown success—and we can’t afford to stop.

It’s become almost a cliché in the politics of Washington, D.C.: Every time someone proposes expanding a social program or creating a new one, scores of politicians, lobbyists and so-called economic ?“experts” will pop up to tell you that it will cost too much and we can’t afford it. Somehow, money is never an issue when it comes to tax cuts for the wealthy and corporations or increasing our military budget, but programs that support everyday people are just too damn expensive.

new analysis from the University of Michigan on the impact of recent stimulus payments adds to a growing body of evidence that shows when it comes to direct cash assistance programs, cost is not a prohibitive issue. In fact, for social programs like these, we may be unable to afford not to do them.

According to the analysis, which looked at data from the Census Bureau Household Pulse Survey, in the weeks following the stimulus check payments in December 2020 and March 2021, households across the country saw a significant decrease in their material hardship. American families reported increased food security, a greater ability to pay for household expenses and less anxiety. This effect was particularly pronounced in low-income households and households with children?—?in the six weeks following the passage of the December 2020 Covid relief bill, amongst families with children, the rate of not having enough to eat fell by 21% and the rate of having difficulty paying for household expenses fell by 24%. These rates dropped again by 23% and 31%, respectively, following the passage of the American Rescue Plan in March 2021.

These findings align with the results of a previous analysis in 2017 from the Roosevelt Institute which looked into various programs that provided direct, unconditional cash to individuals in the United States and Canada, such as the Alaska Permanent Fund Dividend and the Eastern Band of Cherokees casino dividend program. Both of these analyses show the same dynamic: when people receive money with no strings attached, they spend it on the things they need, leading them to live healthier, less anxious lives.

While these outcomes are certainly beneficial for recipients in the immediate term, the broader implications of these changes are just as important. When people don’t have food or are living in poverty, it’s not just a burden on them?—?it’s a burden on all of society. These conditions are directly tied to poorer health outcomes, which puts a drain on our nation’s healthcare system. Poor people are more likely to turn to crime as a means of supporting themselves. Those in poverty may require continued support from our inadequate existing social welfare programs, relying on programs like food stamps, housing assistance and disability insurance to barely make ends meet.

The social implications of poverty are even more pronounced among children, where its impact on cognitive development and educational opportunities may alter their life trajectories. Living in a financially stable household and getting enough to eat could mean the difference between having opportunities later in life and getting trapped in a low-income job with no prospects for advancement.

When considering the aggregate impact of poverty on our society, the results are staggering. A 2018 analysis in the Social Work Research journal found that childhood poverty alone costs our society more than $1 trillion every year from a combination of lost productivity, increased health and crime costs, and increased costs as a result of childhood homelessness and maltreatment.

To accurately assess the cost of social programs, we should be comparing the required expenditures to the expected savings from poverty reduction. A good example is the recent expansion of the child tax credit?—?described as a ?“guaranteed income for families”—which is set to provide up to $300 per child per month for kids under the age of six and $250 per child per month for kids between six and seventeen starting in July. The Congressional Joint Committee on Taxation expects this expansion to cost $110 billion for the year, while the Center on Budget and Policy Priorities projects that the program will decrease child poverty by more than 40%. Well, 40% of $1 trillion is $400 billion, which means the savings from this expansion are over three times the amount spent.

There’s good reason to think that the latest round of stimulus checks will also yield positive long-term returns, as people teeter between regaining their financial footing and slipping into poverty. ?“This money is going towards all the bills that weren’t paid during the time we had to take off,” according to Sandy Lash, a single mother in Fort Wayne, Indiana who relied on the stimulus payments to make it through the pandemic. ?“Receiving these checks will enable [us] to make a difference and move up to where we don’t have to struggle anymore.”

This presents our society with a clear choice: Do we allow increasing poverty and financial precarity to continue to drain away our society’s resources? Or do we make the investment now to create a secure and productive population through programs providing direct cash to families? An immediate first step would be to make the expanded child tax credit, which is set to expire after this year, a permanent, ongoing program. Beyond that, establishing a full, national guaranteed income program that provides monthly payments to all Americans?—?such as the one proposed by Rep. Rashida Tlaib through her Automatic BOOST to Communities Act—could pay massive dividends down the road by fully eliminating material poverty in the United States.

It’s not hard to see which of these approaches is the more affordable one.

This blog originally appeared at In These Times on June 9, 2021. Reprinted with permission.

About the Author: Jim Pugh is  is the co-director of the Universal Income Project.


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U.S. added 559,000 jobs in May and unemployment dropped to 5.8%

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Interview with Laura Clawson, Daily Kos Contributing Editor | Smart  Bitches, Trashy Books

After a disappointing April jobs report, May looked significantly better with 559,000 new jobs added to the economy, according to the Bureau of Labor Statistics. That’s still a little short of the 650,000 jobs analysts predicted, but unemployment ticked down from 6.1% to 5.8%, the lowest since the coronavirus pandemic began in March 2020. “America is on the move again,” President Joe Biden declared in response to the report. “No other major economy is gaining jobs as quickly as ours, and none of this success is an accident,” he said, crediting the American Rescue Plan with boosting the recovery.

The Economic Policy Institute’s Elise Gould described the overall report as “a promising sign that the recovery is on track.” Gould continued, ”If this pace continues over the next year, we will likely get down to 4% unemployment by mid-2022 and will be fully recovered before the end of 2022, fully absorbing losses plus population growth.” 

Another piece of good news is that women gained jobs after losing massive numbers of jobs throughout the pandemic, accounting for 56.2% of the new jobs in May. It’s just a start—women would need to gain jobs at that rate for 13 months straight to get back to where things stood in the before times, according to the National Women’s Law Center—but a start is better than another month of continuing to fall behind. Women’s labor force participation rose from 57.2% in April to 57.4% in May, still behind the February 2020 rate of 59.2%.

Nonetheless, there are still 7.6 million fewer jobs than in February 2020, with a total jobs gap of at least 8.6 million (to account for jobs growth that would normally have happened since then).

Once again, in contrast to the claims that restaurants are having trouble finding workers because of high unemployment benefits, the hospitality industry had big growth, adding 292,000 jobs. And while wages rose in hospitality, a possible sign of a labor shortage, EPI’s Heidi Shierholz notes that “the wages of typical workers in leisure and hospitality plummeted in the recession and have largely just regained their pre-COVID trend—i.e. they are now in the ballpark of where they’d be if COVID had never happened.” Josh Bivens had previously argued that rising wages in restaurants are consistent with the return of tipping customers, and may therefore not even represent higher wages being paid by employers.

There’s a long way to go, and too many people are still without jobs—remember that 7.6 million jobs are missing just from what existed in February 2020—as Republican governors make the political, not economic, decision to cut off the $300 weekly federal unemployment benefits supplement because supposedly that $300 is what’s keeping people from looking for work (even though it’s not). That’s increasing the suffering across the country even as people show, month by month, that they are looking to get back to work.

This blog originally appeared at DailyKos on June 4, 2021 Reprinted with permission.

About the author: Laura Clawson has been a Daily Kos contributing editor since December 2006 and a full-time staff since 2011, currently acting as assistant managing editor.


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One City’s Pioneering Project to Push Police Funding Into Housing the Homeless

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Homelessness in the U.S., which was already on the rise prior to the COVID-19 pandemic, increased in 2020, exacerbated by the economic realities of the pandemic. Austin, Texas, is no exception, with an estimated 11 percent increase in homeless people counted in the city and Travis County between 2019 and 2020, according to the point-in-time (PIT) count reported in the Austin American-Statesman. Of Austin’s population of roughly 1 million, an estimated 2,500 people experience homelessness on any given night, according to the 2020 PIT count. Austin City Council member Gregorio Casar says this is a number “a community of [more than] a million folks should be able to care [for].”

In an effort to do so, the city of Austin has been purchasing underutilized hotels and transforming them into housing and services for people experiencing homelessness. In a February 4 meeting, the Austin City Council approved the purchase of a fourth hotel—which will provide 150 new homes to the homeless population in the city. Casar says the city plans to move forward on purchasing a fifth and a sixth hotel in the future.

“We have found sufficient resources in the city budget to acquire more hotels because we really believe that it’s a strategy for significantly reducing homelessness in the city,” he says.

In addition to providing long-term and transitional housing to people experiencing homelessness, the hotels purchased by the city will also provide supportive services, including mental health services, trauma services and job services.

“We are working with trusted community groups and nonprofit organizations to provide services at the hotels because we know that there are lots of folks who have experienced real trauma while living on the street and who need support so that their homelessness can permanently end,” Casar says. “And then there are lots of other folks who just need a connection to a job and a stable address for a while so that they can get back on their feet.”

According to Tara Pohlmeyer, communications director for Council Member Casar, Integral Care and Caritas of Austin have submitted letters of interest in operating the hotels and providing services, and the Homeless Services Division (HSD) anticipates negotiating a contract with a service provider/operator for each hotel in April.

He says while shelters provide an important service, oftentimes, they’re just temporarily addressing the issue. The plan for the converted hotels is for them to serve as a more permanent housing solution, to address the real needs of each person they house.

“That’s the way that we can reduce the amount of homelessness in the city, instead of just sort of hiding it, or moving [the homeless population] around while the numbers grow,” Casar says.

To pay for these supportive services, the city will reallocate dollars originally assigned to the police budget, as part of its project to reimagine safety, in response to the Black Lives Matter (BLM) movement and public demand. Funding for operations and services of the hotels will come from Austin Public Health, using a portion of the additional $6.5 million added to the Fiscal Year 2021 budget to address homelessness during the city council’s efforts to reimagine public safety.

“We have never had so many people engage in local government before [the BLM movement],” he says. “There were tens of thousands of people that contacted my office alone. In the weeks of protest over the summer [in 2020], we had hundreds of people testifying at city council meetings, for hours, about the changes that they were calling on us to make. I think that was really important. It shifted all of our perspectives. The community here in Austin is calling on us to be real leaders for our community and for people across the state and across the country. Austin, I think, actually responded to the call to transform police budgets in a way that very few cities across the country did.”

Casar says while cities often have the dollars to make the capital investment in property to house the homeless, the long-term funding for operating those buildings and providing supportive services tends to be the challenge. He says prior to last summer’s BLM movement, which pressured cities across the nation to reallocate police funds into supportive services, one of Austin’s greatest challenges regarding homelessness was related to finding that long-term funding.

“The dollars from the police budget are going to provide the services and operate the hotels,” he says. “No matter how many changes I and some others have tried to make to the budget in years past, we’ve, oftentimes, struggled to make really transformative change because so many dollars get wrapped up in the police budget. This last year, there was finally an opportunity for us to rethink that budget and recognize that we were spending so many dollars on jailing folks experiencing homelessness and policing people experiencing homelessness—but that actually doesn’t reduce homelessness.”

Between the four hotels the city has purchased, there are about 300 rooms, some of which might be able to house a couple of people, and many of them just a single person. The plan is for the city to continue to purchase additional hotels and expand the programs offered, Casar says.

“We have to pull hundreds of people off the streets this year,” Casar says. “I think that would make a really significant difference.”

The extreme winter weather experienced in Texas through February and March makes the need to provide safe shelter and supportive services for people living on the streets all the more urgent.

“In a city as prosperous as Austin, no one should have to live on the streets, period. That became even more clear as we saw folks still sleeping out under bridges when we knew that zero-degree temperatures were coming—and sometimes there were hotels or lit-up buildings right across the streets where they could have safely stayed,” Casar says. “It’s clearly already so dangerous to live outdoors and without a home, and these extreme weather events make it even more clear why we can and should reorganize our resources and our priorities to make sure that everybody has a place to lay their head at night that is safe.”

This article was produced by Local Peace Economy, a project of the Independent Media Institute.

About the Author: April M. Short is an editor, journalist and documentary editor and producer. She is a writing fellow at Local Peace Economy, a project of the Independent Media Institute. Previously, she served as a managing editor at AlterNet as well as an award-winning senior staff writer for Santa Cruz, California’s weekly newspaper. Her work has been published with the San Francisco Chronicle, In These Times, Salon and many others.


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Rebuilding U.S. Manufacturing Is the Only Path to an Economic Renaissance

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Brad Greve knew it was just a matter of time before the computer chip shortage disrupting the auto industry had a ripple effect on aluminum manufacturing in Iowa.

Greve and his colleagues at Arconic Davenport Works—members of United Steelworkers (USW) Local 105—supply the Ford F-150 pickup and other vehicles.

Automakers forced to cut production because of the semiconductor crunch scaled back the amount of aluminum they take from the facility, just as Greve expected, posing another potential setback to a plant already fighting to rebound from the COVID-19 recession.

America cannot afford to jeopardize major industries for want of parts.

The nation’s prosperity depends on ensuring the ready availability of all of the raw materials and components that go into the products essential for crises and daily life.

That will mean ramping up domestic production of the semiconductors—now made largely overseas—that serve as the “brains” of automobiles, computers, cell phones, communications networks, appliances and life-saving medical equipment.

But it will also require building out supply chains in other industries. For example, America needs to produce titanium sponge for warplanes and satellites, pharmaceutical ingredients for medicines and the bearings that keep elevators and other machinery running.

The failure of just one link in a supply chain—as the semiconductor shortage shows—has the potential to paralyze huge swaths of the economy. That’s why it’s crucial not only to source components on U.S. soil but also to incorporate redundancy into supply lines so that an industry can survive the loss of a single supplier.

“It’s that ripple effect,” said Greve, president of Local 105, recalling the time when a fire at a die-cast parts supplier disrupted production of the F-150. “If you shut down a car manufacturer—or they can’t get one part—you can affect a whole lot of jobs around the country.”

COVID-19 interrupted computer chip production even as demand for televisions, home computers and other goods soared among consumers locked down in their homes. Now, neither U.S. automakers nor manufacturers of other goods can obtain adequate amounts of the semiconductors they need.

Because of the shortage, carmakers cut shifts and laid off workers. The production cuts come when the nation needs the boost from auto sales—and other items containing semiconductors—to climb out of the recession.

Although the decreased aluminum shipments haven’t resulted in layoffs at Davenport, the automotive supply-chain meltdown couldn’t have come at a worse time. When the pandemic curbed air travel last year, airplane manufacturers cut back on the aluminum they get from Arconic.

“Automotive is what kept us going,” Greve said.

America was once a leader in computer chip manufacturing. But as with many other industries in recent decades, the U.S. frittered away the upper hand while other countries boosted production.

The nation’s share of chip manufacturing capacity fell from 37 percent to 12 percent over the past 30 years. And although demand for chips continues to grow, the U.S. stands to gain only a fraction of the additional capacity currently in the pipeline.

That leaves the country overly reliant on foreign suppliers who can encounter their own production shortfalls, as happened during the pandemic, or who can cut off shipments for political or economic reasons at any time.

“If you’re going to war with somebody, they’re not going to sell you anything,” Greve said, noting dependence on overseas supplies threatens the nation’s ability not only to make cars and other consumer goods but also to obtain the chips needed for defense and intelligence purposes.

Although the current crisis centers on semiconductors, neglect of the nation’s manufacturing base decimated America’s capacity to produce parts and components for many other industries.

“It affects everybody,” Libbi Urban, vice president of USW Local 9231, said of hollowed-out supply chains that threaten jobs and access to goods. Because of the semiconductor shortage, automakers now take less of the galvanized steel she and her coworkers make at Cleveland-Cliffs’ New Carlisle, Indiana, Works.

Shortages of medical and safety equipment during the pandemic revealed how much manufacturing power the nation let slip away.

But it wasn’t only the finished products, like face masks, America found itself ill-equipped to produce. Makers of hand sanitizer and cleaning products struggled to obtain adequate supplies of the hand pumps and spray triggers made overseas.

“How much time and money are being lost waiting on overseas companies to get products and supplies to the U.S.?” Urban asked.

President Joe Biden took the first step toward rebuilding manufacturing power with an executive order in February requiring immediate reviews of supply chains for the semiconductor, pharmaceutical, electric-battery and rare earth minerals industries as well as longer-term reviews of other sectors.

But after identifying weaknesses, America needs to implement a strategy for restoring supply lines and ensuring long-term resiliency.

That will include direct investment in U.S. manufacturing facilities, such as the $37 billion Biden proposed to ramp up chip production.

It involves strategically using tax incentives to encourage employers to expand operations and invest in new technology. And it means building strong markets for U.S. products, partly through policies that encourage federal contractors and other companies to buy domestic goods.

Besides cutting shifts, Greve noted, automakers have been trying to weather the semiconductor shortage by allocating chips to their most popular models or leaving vehicles partially completed until chips arrive.

GM even eliminated an important feature, an advanced fuel management system, in some models just to save chips and get vehicles to market.

“We shouldn’t have that happen in this country,” Greve said. “If we don’t make the supplies here, then we have no control.”

This article was produced by the Independent Media Institute.

About the Author: Tom Conway is the international president of the United Steelworkers Union (USW).


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Black workers, hammered by pandemic, now being left behind in recovery

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Black Americans, who were among the hardest hit by coronavirus layoffs, are now recovering at the slowest rate, a one-two punch that threatens to worsen the United States’ already stark wealth and income disparities long after the pandemic recedes.

While Hispanic workers initially saw the sharpest uptick in unemployment when business shutdowns began last spring, Black people have seen a slower return to work even as the economy is poised for a robust rebound, government data and economic analyses show. When the overall unemployment rate ticked down in February, Black workers were the only group that saw a rise in joblessness, a 0.7 percentage point increase.

The share of Black Americans holding jobs also dropped over the month while it continued to move up for all other races and ethnicities. Over the past year, white, Asian and Hispanic Americans have regained roughly two-thirds of their initial job losses in terms of what share of their population is working, a key measure of labor and unemployment known as the “employment-population ratio.” Black workers have only recovered slightly more than half.

The data has fueled fears that the nascent recovery will not be evenly shared, a dynamic that would exacerbate income and wealth inequality while prolonging the return to full employment. The trend is reminiscent of the Great Recession, when Black workers saw a worse downturn and slower rate of return to normal. And this time, it has caught the attention of top policymakers across the Biden administration and in Congress.

“We’re trying to make sure that it is not like so many other recoveries,” said House Majority Whip Jim Clyburn (D-S.C.), the most senior Black lawmaker in Congress and chair of the Select Subcommittee on the Coronavirus Crisis. “Slow for everybody, and a snail’s pace for Black and brown communities.”

The headwinds that Black workers face are plenty, some unique to the coronavirus recession but others the result of structural inequities that have long contributed to high rates of unemployment — typically double that of white workers even in strong economies.

For one, many of the industries in which Black workers are heavily represented are not recovering as quickly as others as the economy reopens — or are even continuing to backslide. State and local governments have long been a major employer for African Americans. But while the labor market broadly improved last month, state and local governments shed another 83,000 jobs and remain down 1.4 million workers from a year ago.

“Those sectors in which the rebound is really not happening, or not happening in impactful ways, are really almost the same industries in which African Americans are overrepresented,” said Michelle Holder, a labor economist at John Jay College of Criminal Justice in New York. She cited transportation, a major employer for Black men, and health services, where Black women are heavily represented, as two other industries that have taken longer to come back, keeping the unemployment rate high.

The devastation of the child care sector amid the shutdowns has also heavily affected Black and Hispanic women, who are more likely to work at child care centers and to depend on them in order to be able to take jobs elsewhere.

And while employment in high-wage sectors has almost completely recovered, low-wage industries remain down 28 percent from a year ago, according to Harvard’s Opportunity Insights tracker — a disparity that disproportionately affects workers of color.

Structural inequities in the U.S. labor market that have affected Black and Hispanic workers’ ability to advance out of low-paying jobs, as well as discrimination in hiring practices, are also likely having an effect, some economists say.

When unemployment spiked in April, the gap between Black and white rates of joblessness narrowed significantly, indicating the losses were spread across the board. But it has steadily grown since then as white workers have returned to work faster — which William Spriggs, chief economist at the AFL-CIO, said he took as “proof” of the effect of discriminatory hiring practices.

Spriggs also said that for much of the past year, unemployment has been higher for all Black workers, including those with college degrees, than for those of all races with less than a high school education.

“This is not a matter of skills,” Spriggs said. “It’s a matter of the way discrimination takes place within the recovery.”

One way to address the slower recovery among workers of color is to ensure that federal support remains in place as long as Black and Hispanic unemployment remains elevated, advocates say, rather than cut it off once the levels return closer to normal. And given that these workers typically remain out of work the longest, President Joe Biden will need a prolonged economic recovery to ensure the labor market gets tight enough to pull them back in from the sidelines.

Clyburn’s focus is two-fold: tracking the Covid relief money as it goes out to ensure that it’s being spent equitably, and pushing the Biden administration to invest heavily in a second stimulus package focused on infrastructure, which would spark job creation across the country.

Clyburn said he has spoken about the need to address the uneven recovery with both Biden and Susan Rice, the president’s top domestic policy adviser, adding that Biden has made clear “he plans to do the right thing.”

There are signs the administration is focused on the disparities. The White House Council of Economic Advisers highlighted adjusted unemployment rates, which include those who have given up the search for work, broken down by race and gender after the latest jobs data was released for February. The report showed that the Black unemployment rate stood at nearly 15 percent — affecting nearly 1 in 6 workers — compared to an overall rate of 9.5 percent. The adjusted Hispanic unemployment rate is 12.4 percent.

At the Labor Department, chief economist Janelle Jones penned a blog post last month stressing the disproportionate economic impact of the pandemic on Black Americans, particularly women.

And Federal Reserve Chair Jerome Powell says he is tracking the Black and Hispanic unemployment rates, among other statistics, because elevated joblessness there signals weakness in the broader labor market.

“This particular downturn, of course, was just a direct hit on a part of the economy that employs many minorities and lower paid workers… and it’s the slowest part of the economy to recover,” Powell said at a March 17 press conference. “We’d like to see those people continue to get support as the broader economy recovers, as it’s very much doing now.”

The longer the rate of recovery for Black workers continues to lag, the more likely it is to have a lasting impact. Workers who fall into long-term unemployment — defined as being out of a job for six months or more — take longer to return to work and are more likely to drop out of the labor market entirely.

Black workers are also far less likely to have had savings to lean on to weather an extended period of joblessness — the net worth of an average Black family is about one-tenth that of a white family — and therefore more vulnerable to falling into debt or losing their homes. And another prolonged economic recovery for Black Americans could worsen the already dramatic racial wealth gap, particularly as it drags on both personal savings and future earnings.

The key to addressing the inequities lies in promoting a strong economic recovery for everyone, while recognizing that some communities and workers will take longer to return to normal and require more help than others, economists say.

“People love the quote [from] John F. Kennedy, ‘A rising tide lifts all boats.’ It lifts all the boats that got solid bottoms,” Clyburn said. “If the bottoms got holes in them or if the boats have deteriorated, a rising tide ain’t gonna lift them.”

This blog originally appeared at Politico on March 23, 2021. Reprinted with permission.

About the Author: Megan Cassella is a trade reporter for POLITICO Pro.


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God’s Work: Labor in the Church

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In this episode, we talk to Rev. Lindsey Joyce of the United Church of Rogers Park in Chicago and the Institute for Christian Socialism. We discuss Pastor Joyce’s life and path to being a full-time pastor and the community she serves. We also discuss the work of ministry: What is it like to be a worker who works in the church? What is the relationship between the higher calling?—?the vocation of being a pastor?—?and the daily labor that goes into fulfilling that role in the church and the community?

This blog originally appeared at In These Times on February 26, 2021. Reprinted with permission.

About the Author: Maximillian Alvarez  is a writer and editor based in Baltimore and the host of Working People, ?“a podcast by, for, and about the working class today.” His work has been featured in venues like In These Times, The Nation, The Baffler, Current Affairs, and The New Republic.


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A Minimum Wage? A Fake Debate

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Capitalism’s “conservative” defenders yet again oppose raising the minimum wage. They fought raising it in the past much as they tried to prevent the Fair Labor Standards Act (1938) that first mandated a U.S. minimum wage. The major argument opponents have used is this: setting or raising a minimum wage threatens small employers. They may collapse or else fire employees; either way, jobs are lost. What is conveniently assumed here is a necessary contradiction between minimum wages and small business jobs. That assumption enables opponents to claim that not setting a legal minimum wage, like not raising it, saves jobs. The system thus presents very poorly paid workers with this choice: low wages or no wages.

“Liberals” in the United States have mostly accepted the assumption of that contradiction, the necessity of that final choice. However, they try to demonstrate that the social gains from a higher minimum wage would exceed the social losses from the reduced employment they admit. Their idea, in effect, is that a higher minimum wage would increase demand for goods and services. Any workers fired because of the minimum wage would be rehired elsewhere to meet the rising demand. Countless empirical studies by conservatives and liberals yield, as usual, correspondingly conflicting conclusions.

In the actual history of U.S. capitalism, the minimum wage has been undercut from the outset. In real terms (what the minimum wage can actually buy), its long-term decline began from a peak in 1968. It was last raised in 2009 (to $7.25 per hour) despite a rising consumer price index every year since then. U.S. business interests plus the “conservative” politicians, media, and academics they support have inundated the public with the idea that raising the minimum wage will hurt poorly paid workers (by losing mostly small business jobs) more than help them. This debate over the minimum wage, intensified whenever proposals to raise it gain public attention, has been “won” chiefly by the conservative/business side.

Despite its political effectiveness for conservatives and big business till now, their argument—like the entire debate—is flawed logically. Its underlying, shared assumption is unnecessary and inaccurate. It serves chiefly to undercut the level, purpose, and social effects of the minimum wage in the United States.

Paying a decent living wage to workers by raising the minimum wage need not threaten the viability of small businesses. The latter need not collapse nor fire workers when minimum wages are raised. Indeed, raising the minimum wage can and should be one basis for a mutually beneficial alliance between wage workers and small businesses.

Few dare quarrel with the notion that in the U.S. today, paying the federal minimum wage of $7.25 per hour is an outrage against decency. It is among the very lowest minimum wages of industrialized economies: quite the achievement for one of the “richest countries in the world.” So the defense of such an outrage has always begun by focusing attention elsewhere. We are asked to sympathize with the small businesses whose profits and thus viability will be undone if they are required to pay a raised minimum wage. We are asked likewise to sympathize with the plight of minimum wage workers who will become jobless when their employer cannot pay a raised minimum wage. Thus the conclusion beloved by opponents of raising the minimum wage: it lies in the interest of low-paid workers and small businesses to join the opposition to raising the minimum wage.

So many flaws attend such logic that it is not easy to decide where to begin its demolition. We might note that it clearly implies that were we to drop the minimum wage even further, below $7.25 per hour, we might achieve lower unemployment rates. But that is so gross an idea that right-wingers rarely go there. They don’t dare.

There is a parallel example we can draw from the history of wage workers when they included children as young as five years old. The parallel logic then held that allowing child labor (with the oppression and abuses it entailed) was doing poor families a favor. Were child labor to be outlawed, capitalism’s defenders then insisted, two tragedies would necessarily follow. First, poor families would suffer an income loss because they could no longer sell their children’s labor power to capitalist employers for a wage. Second, businesses whose profits depended at least partly on low-wage child labor would collapse and render adults jobless too.

It is important to note that after sustained political agitation, child labor was in fact outlawed. The logic of its defenders was rejected and rarely resurfaced afterward even in right-wing and “conservative” literature. Former capitalist employers of children found other means (paying adults more, improving productivity, economizing on other inputs, and so on) to profit and grow. As we know, U.S. capitalism over the last century prospered without child labor. And where U.S. capitalists relocated abroad to employ children, opposition there has replicated what happened in the United States, albeit slowly. What happened to child labor can and likely will happen as well to abysmally low minimum wages.

How then might a civilized society raise its minimum wage to provide a decent livelihood to workers and protect its small businesses? The solution is straightforward. Offset the extra labor costs for small businesses from a higher minimum wage by providing them with some combination of the following: a new and significant share of government orders, tax breaks, and government subsidies. Such supports now overwhelmingly favor big business and thereby facilitate its many efforts to destroy and replace small businesses. Those supports should be reapportioned with special consideration/targeting for small businesses. To be eligible, small businesses would need to show how raising the minimum wage increased their total wage bill. In this way, society can concretely support small business and a decent minimum wage as twin, shared social values.

In effect, this proposal changes the terrain of the minimum wage debate. It brings into stark relief that raising the minimum wage leaves open the question of which part of the employer class will bear the burden of compensating for that in the short run. An effective political coalition of low-wage workers and small businesses could require big business to pay by losing some of its government business, paying higher taxes, or obtaining lower subsidies—all to compensate small businesses for a raised minimum wage. For decades, an alternative political coalition—of big and small business—blocked or delayed minimum wage increases. Nothing requires this latter coalition to always or, indeed, ever prevail over a competing coalition of labor and small business that seeks a higher minimum wage for one plus greater state supports for the other. Likewise, nothing warrants continuing the current debate over raising the minimum wage as if only small business would always have to absorb its possible costs.

The debate over the minimum wage has been lopsided for a very long time. Uncritical media coverage of the debate has allowed big business to evade its proper share of paying to sustain a viable small business sector. Meanwhile, workers and small businesses pay taxes that favor big business. Most Americans want a thriving small business sector. Most also increasingly criticize big business: “antitrust” remains part of government regulation as well as a part of popular ideologies. We can and should correct the old debate now to enable a different political coalition to shape minimum wages in a different way from the past.

This article was produced by Economy for All, a project of the Independent Media Institute.

About the Author: Richard D. Wolff is professor of economics emeritus at the University of Massachusetts, Amherst, and a visiting professor in the Graduate Program in International Affairs of the New School University, in New York. Wolff’s weekly show, “Economic Update,” is syndicated by more than 100 radio stations and goes to 55 million TV receivers via Free Speech TV. His three recent books with Democracy at Work are The Sickness Is the System: When Capitalism Fails to Save Us From Pandemics or ItselfUnderstanding Marxism, and Understanding Socialism.


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