Jack Metzgar: Racial Justice, Class Justice [feedly]

Racial Justice, Class Justice
https://workingclassstudies.wordpress.com/2021/01/25/racial-justice-class-justice/

I've been feeling kind of white lately.  Maybe it's some of that white fragility Robin DiAngelo warns us about, but more and more often when I hear somebody say "disproportionately people of color," it sounds like they're also saying poor and working-class white people don't matter.  That makes me queasy — kind of fragile, I guess.  Often it seems the speaker or writer assumes that because Blacks and Latinx are disproportionately affected by unemployment, poverty, police brutality, net negative wealth, COVID-19, and most other negative phenomenon, almost all white people are fine and dandy.  That's not the case – not even close.  And because I know that not only from statistics, but from my own extended family, it makes me feel my whiteness in a defensive way.

I suspect most speakers who emphasize racial disparities simply want to keep a strong focus on our deplorable history of racism and its continuing effects as we develop solutions to the many economic problems that, in fact, afflict a majority of the U.S. population today.  But by not mentioning that those problems affect huge numbers of whites or that progressive economic policies would benefit whites as well as people of color, they leave the impression either that not many whites would benefit or, worse, that policymakers don't care what impact a given policy would have on whites. 

For example, here's how the Peterson Institute's excellent study, "How to Fix Economic Inequality," explains the horrific disproportionality of COVID-19's effect on black and brown unemployment: "In April 2020, 61 percent of Hispanic Americans and 44 percent of Black Americans reported that someone in their household had lost a job due to the coronavirus outbreak, compared with just 38 percent of white adults" [emphasis added].  These percentages, like many others, clearly highlight the enormity of racial inequality in our country, but why add "just" to the comparative figure for whites?  What impact does that "just" have?  I know for a fact that my working-class relatives do not read Peterson Institute reports, but if they did, that "just" would hurt, and probably piss them off.  How is more than one-third of any group being thrown out of work "just"? 

On the other hand, how would Peterson's sentence read if we estimated the actual number of households who have experienced COVID job loss?  You'd have to turn it around and say something like: "32 million white households and 11 million Hispanic households experienced job loss, compared with just 7.5 million Black households." Using numbers rather than percentages makes pandemic-related unemployment look like primarily a white problem, thereby discounting the larger magnitude of minority unemployment simply because as minorities their numbers are smaller.  Using only percentages, on the other hand, emphasizes racial inequality at the expense of larger class inequality.  But we don't have to choose – and we need to recognize the cost of choosing.

Image from Jobs with Justice

Part of that is an opportunity cost – a lost opportunity to unify larger groups of people across common divisions.  Because people of color suffer economic hardship and injustice at higher rates than whites, a higher percentage of Black and Latinx people will disproportionately benefit from anything we do to address these injustices. But the largest group of beneficiaries will be white.  A $15-an-hour national minimum wage, for example, will benefit more than half of both Black and Latinx workers compared with a little more than a third of white workers. Nonetheless, the majority of workers affected will be white.  By ignoring this basic reality, which applies across a wide range of progressive economic policies, we miss an opportunity for class to unite.

And it's not that hard to at least mention the impact on white folks at the same time as you highlight disproportionate effects on people of color.  I can remember how Martin Luther King Jr. never failed to mention "poor whites" when talking about political and economic conditions they shared with African-Americans.  That was part of King's universalist if very Christian morality, but it was also smart political arithmetic.   

This may seem like a fairly minor point, actually just a matter of political rhetoric about acknowledging white workers when they share problems and injustices with people of color.  And I probably wouldn't notice it or feel aggrieved about it if I were not white and part of a white working-class family many of whom are struggling.  But nothing undermines working-class solidarity in the U.S., in the past and now, like white racism.  Simply denouncing it and calling people nasty names has never and will never work.  Keeping our eyes on common interests across what we call races is probably our one best hope for winning a more just and more fully democratic future.

In that regard, politically and economically, though not morally, class inequality is more important than racial inequality, today and usually.

First, unity in greater numbers has been the principal strength of working classes since the dawn of capitalism.  50 million households of all colors experiencing COVID job loss, for example, is not just a bigger problem requiring a bigger remedy than 18.5 million households of color, it is also a much larger population with a shared political and economic stake in pursuing remedies.  To unify that larger population, we probably need to at least mention all the colors of the people affected.

Second, reducing economic inequality will routinely reduce racial inequalities unless specific actions are taken to interrupt that connection, as they were in some New Deal labor and social legislation in the 1930s.  Such interruptions – based on plantation-class power back then as well as a much more explicit brand of racism – are unlikely today because minorities make up a much larger portion of the population (in some places they are not minorities at all), and they are much better politically organized. In addition,  large minorities of whites today, with and without bachelor's degrees, are hungry for more racial as well as economic equality. 

Finally, our lopsided levels of economic inequality are now so huge, with so much income and wealth concentrated in the hands of the super-wealthy, that even a relatively modest redistribution of economic resources – say, $2 trillion a year – could improve almost everybody's lives.  Progressive taxation of our infamous top 1% can provide more than enough to finance dramatic economic transformations for the working class of all colors.  And within those economic transformations, non-economic racial injustices will be more easily addressed when the bottom half of our population is no longer sinking and even most of the top half, no longer so economically anxious.

We do not have to choose between racial justice and class justice.  Racial justice can be achieved within a determined push for economic justice.   And truth be told, racial justice can probably only be achieved within a political economic context that mobilizes the huge numbers of white folks who will benefit from economic redistributions that will disproportionately benefit people of color. 

Jack Metzgar

Jack Metzgar is a professor emeritus of Humanities at Roosevelt University in Chicago.  A former president of the Working-Class Studies Association, he is the author of a forthcoming book from Cornell University Press, No One Right Way: Working-Class Culture in a Middle-Class Society.

 -- via my feedly newsfeed

IMF: A Race Between Vaccines and the Virus as Recoveries Diverge [feedly]

A Race Between Vaccines and the Virus as Recoveries Diverge
https://blogs.imf.org/2021/01/26/a-race-between-vaccines-and-the-virus-as-recoveries-diverge/

In just three months since we released our last forecast in October, recorded COVID-19 deaths have doubled to over 2 million, as new waves have lifted infections past previous peaks in many countries. In these same three months, multiple vaccines have seen unexpectedly strong success and some countries have started ambitious vaccination drives. Much now depends on the outcome of this race between a mutating virus and vaccines to end the pandemic, and on the ability of policies to provide effective support until that happens. There remains tremendous uncertainty and prospects vary greatly across countries.

There remains tremendous uncertainty and prospects vary greatly across countries.

In our latest World Economic Outlook forecast we project global growth for 2021 at 5.5 percent, 0.3 percentage point higher than our October forecast, moderating to 4.2 percent in 2022. The upgrade for 2021 reflects the positive effects of the onset of vaccinations in some countries, additional policy support at the end of 2020 in economies such as the United States and Japan and an expected increase in contact-intensive activities as the health crisis wanes. However, the positive effects are partially offset by a somewhat worse outlook for the very near term as measures to contain the spread of the virus dampen activity.

There is a great deal of uncertainty around this forecast. Greater success with vaccinations and therapeutics and additional policy support could improve outcomes, while slow vaccine rollout, virus mutations, and premature withdrawal of policy support can worsen outcomes. If downside risks were to materialize, a tightening of financial conditions could amplify the downturn at a time when public and corporate debt are at record highs worldwide.

Incomplete recoveries

The projected recovery in growth this year follows a severe collapse in 2020. Even though the estimated collapse (-3.5%) is somewhat less dire than we had previously projected (-4.4%) owing to stronger-than-expected growth in the second half of last year, it remains the worst peacetime global contraction since the Great Depression. Because of the partial nature of the rebound, over 150 economies are expected to have per-capita incomes below their 2019 levels in 2021. That number declines only modestly to around 110 economies in 2022. At $22 trillion, the projected cumulative output loss over 2020–2025 relative to the pre-pandemic projected levels remains substantial.

Great divergence within and across countries

The strength of the projected recovery also varies significantly across countries, with large differences in projected output losses relative to the pre-COVID forecast. China returned to its pre-pandemic projected level in the fourth quarter of 2020, ahead of all large economies. The United States is projected to surpass its pre-COVID levels this year, well ahead of the euro area. With advanced economies generally expected to recover faster, progress made towards convergence over the last decade is at risk of reversing. Over 50 percent of emerging markets and developing economies that were converging towards advanced economies per capita income over the last decade are expected to diverge over the 2020–2022 period.

The faster recoveries in advanced economies are partly due to their more expansive policy support and quicker access to vaccines relative to many developing countries. Oil exporters and tourism-based economies face particularly difficult prospects given the subdued outlook for oil prices and expected slow normalization of cross-border travel.

Even within countries the burden of the crisis has fallen unevenly across groups and has increased inequality. Workers with less education, youth, women and those informally employed have suffered disproportionate income losses. Close to 90 million individuals are expected to enter extreme poverty over 2020–21, reversing the trends of the past two decades.

Policies to strengthen the recovery and make it inclusive, resilient and green

If vaccines and therapies remain effective against new virus strains, we may be able to exit this crisis with less scarring than was feared and arrest the divergence in prospects across and within countries. However, that will require much more on the policy front.

Firstly, the international community must act swiftly to ensure rapid and broad global access to vaccinations and therapeutics, to correct the deep inequity in access that currently exists. This will require ramping up production and bolstering funding for the COVAX facility and for the logistics of vaccine delivery to poorer nations. The health and economic arguments for this are overwhelming. The new virus strains are a reminder that the pandemic is not over until it is over everywhere, and we estimate that faster progress on ending the health crisis will raise global income cumulatively by $9 trillion over 2020–25, with benefits for all countries, including around $4 trillion for advanced economies.

Secondly, targeted economic lifelines to households and firms should be maintained where the virus is surging to help maintain livelihoods and prevent bankruptcies of otherwise viable firms, enabling a faster rebound once constraints are lifted. In countries where fiscal space is limited, spending should be prioritized for health and transfers to the poor. Once infections are durably declining with broadening immunity to the virus, lifelines can be gradually rolled back by making their parameters less generous over time to incentivize labor mobility and reduce the risk of zombie firms that can impair productivity.

If policy space permits, resources freed up can be reallocated to support the recovery. Priority areas include education spending to remedy the setback to human capital accumulation, digitalization to boost productivity growth, and green investment to create jobs and accelerate the transition to a new climate economy. A synchronized green public investment push by the largest economies with fiscal space to do so can enhance the effectiveness of individual actions and boost cross-border spillovers through trade linkages.

Thirdly, financial stability should be ensured in these highly uncertain times. Monetary policy should remain accommodative to support the recovery where inflation is not at risk, with close attention paid to containing the risks that will likely emerge from historically low interest rates. When pandemic measures such as moratoria on loan payments are eventually withdrawn, there will likely be an increase in bankruptcies and non-performing loans that can push already fragile banking systems into distress. Countries should develop special out-of-court restructuring frameworks to expedite processing bankruptcies, so credit creation is not impaired. Fiscal spending and the output collapse have driven global sovereign debt levels to record highs. While low interest rates alongside the projected rebound in growth in 2021 will stabilize debt levels in many countries, all will benefit from a medium-term fiscal framework to ensure debt remains sustainable.

Lastly, the international community needs to do more to help poorer nations combat the crisis and not fall severely behind in attaining their sustainable development goals. The sharp easing of monetary policy by major central banks improved financing conditions for many in the developing world. However, there are others, more severely constrained, that will require further international support in the form of grants, concessional loans, and debt relief and in some cases outright debt restructuring under the new Common Framework agreed by the G-20.

Confronted with an unprecedented global challenge, the international community must act now to ensure the pandemic is beaten back everywhere, the divergence in prospects across and within countries is reversed, and the world builds forward to a more prosperous, green, and inclusive future.

 -- via my feedly newsfeed

Employer concentration suppresses wages for several million U.S. workers: antitrust and labor market regulators should respond [feedly]

Employer concentration suppresses wages for several million U.S. workers: antitrust and labor market regulators should respond
https://equitablegrowth.org/employer-concentration-suppresses-wages-for-several-million-u-s-workers-antitrust-and-labor-market-regulators-should-respond/

Overview

Introductory economics textbooks often feature perfectly competitive labor markets, where a large number of identical firms compete to hire identical workers, and switching jobs, hiring and firing workers, and creating new job vacancies is easy and costless. In a perfectly competitive labor market, workers are paid wages equal to the marginal product of their labor.

But real-world labor markets are not like this. A large body of evidence in the labor economics literature recognizes that jobs differ on a variety of characteristics besides pay, among them skill requirements, tasks, credentials, benefits, hours, work environment, and coworkers. Workers also differ in how much they value these different characteristics. And the process of matching workers to jobs is time-consuming and expensive for firms to find, screen, hire, and train workers, and for workers to search for and apply for jobs.

Employer concentration suppresses wages for several million U.S. workers: Antitrust and labor market regulators should respondDownload

All of these factors—differentiated jobs, heterogeneous worker preferences, and search frictions—mean that every labor market is intrinsically characterized by a baseline level of monopsony power, where firms have the ability to set wages below workers' productivity.

On top of this baseline level of monopsony power, other factors can further reduce the degree of labor market competition. One important factor is employer concentration. This is the phenomenon where a labor market has only a few large employers. If there are fewer employers, then workers have fewer options to choose from for a job, which limits competition for their labor and gives employers outsize power over workers' pay.

In the past, employer concentration was often thought to be a niche issue, confined to a few factory towns or rural hospitals. But, in more recent years, a number of researchers have documented higher-than-expected employer concentration across large swathes of the U.S. labor market. These scholars, among them Jose Azar of IESE Business School, Ioana Marinescu of University of Pennsylvania, Marshall Steinbaum of University of Utah, Efraim Benmelech of Northwest University, Nittai Bergman of Tel Aviv University, and Hyunseob Kim of Cornell University, also find evidence that local labor markets with higher employer concentration have lower average wages, suggesting that employer concentration might be suppressing wages by increasing employers' monopsony power.

In a new Washington Center for Equitable Growth working paper, Employer Concentration and Outside Options, co-written by me and Gregor Schubert of Harvard University and Bledi Taska of Burning Glass Technologies, we present a new way to estimate a causal effect of employer concentration on wages. In this issue brief we outline our approach to causal estimation and a new data set we use to define workers' labor markets, and present our findings that employer concentration reduces wages for a significant subset of U.S. workers, predominantly those in low outward-mobility occupations and lower-population areas. We then close with a discussion of possible policy responses, including increased antitrust scrutiny of labor markets and increased use of policies that raise wages directly (such as minimum wages or empowered unions), as part of a broader agenda to tackle the wage suppressive effects of monopsony power.

How to measure the effects of employer concentration

While it seems plausible that employer concentration might matter for workers' pay in theory, it is more difficult to estimate how much it matters in practice. Why? One of the biggest difficulties is discerning the degree to which there is a causal relationship between employer concentration and wages. Collecting data on employer concentration and wages enables researchers to observe that labor markets with higher employer concentration also tend to have lower wages on average. But this negative relationship could be driven by changing local economic conditions that affect both concentration and wages, rather than being a result of concentration causing lower wages.

Imagine, for example, a situation where a local labor market is in decline, with falling productivity and businesses shrinking or closing. A quick look at the data for this local labor market would tell economists that employer concentration is rising and pay is falling, but the fall in average pay might be caused by the decline of the labor market in general and not by the rise in employer concentration. This kind of argument drives substantial skepticism around the idea that employer concentration might be affecting workers' pay in a meaningful way.

In our new working paper, my co-authors and I try to address this problem using a new way to estimate a causal effect of employer concentration on wages, building on the cutting-edge econometric work on granular instrumental variable estimation by Xavier Gabaix of Harvard University and Ralph Koijen of University of Chicago, and on shift-share instruments by Kirill Borusyak of University College London, Peter Hull of University of Chicago, and Xavier Jaravel of the London School of Economics. These econometric tools enable us to identify changes in employer concentration across local labor markets which are not driven by local economic conditions, meaning that we are more likely to be able to estimate a causal effect of concentration on wages (rather than a simple correlation).

The basic logic of our approach is this—we predict the change in employer concentration in an individual local labor market using changing nationwide hiring behavior of large firms that are active in those labor markets. We assume that on average large firms don't base their national hiring decisions on the local economic conditions in any individual occupation and metropolitan area, which means the changes in local employer concentration that we identify are unlikely to be driven by local economic trends. In econometric parlance, the predicted change in employer concentration that we estimate for each local labor market is plausibly exogenous to local economic conditions and therefore our empirical analyses are less likely to suffer from the bias I discussed above.

A second problem in understanding employer concentration is defining the scope of workers' true labor markets. To understand which jobs are feasible for different workers to move into, we build a unique new data set on workers' occupational mobility patterns, constructed from the resumes of 16 million U.S .workers sourced by labor market analytics company Burning Glass Technologies. We use this data to make sure we consider the full scope of workers' labor markets when estimating the effects of employer concentration on wages. (Our new data on occupational mobility—the most granular of its kind for the U.S. labor market—is publicly available for research use here.)

It is also important to note how we measure employer concentration itself. Different research papers take different approaches. In our paper, we follow previous research in measuring employer concentration with a Herfindahl-Hirschman Index, or HHI, the sum of the squared vacancy shares accounted for by each employer, for more than 100,000 U.S. local occupational labor markets over 2013–2016, using data on firms' job postings from Burning Glass Technologies.

How much does employer concentration matter in the U.S. labor market?

Using the methodology described above, my co-authors and I estimate a large, negative causal effect of employer concentration on workers' hourly pay for a subset of U.S. workers. Our results suggest that more than 10 percent of the U.S. workforce is likely to be in labor markets where pay is suppressed by at least 2 percent as a result of employer concentration, and several million of these workers are in labor markets where pay is suppressed by 5 percent or more. These are not trivial amounts of money. For a typical full-time worker making $50,000 a year, a 2 percent pay reduction is equivalent to losing $1,000 per year and a 5 percent pay reduction is equivalent to losing $2,500 per year.

Who are the people most affected by employer concentration? The most-affected workers tend to be identifiable by three factors:

• They are in occupations with low outward mobility, usually because they have skills that are very specific to their occupation or have invested in training, licensing, or certification, so that it's difficult to find a comparably good job outside their chosen occupation.
• They are in lower-population areas, which matters because there tend to be fewer firms in places where there are fewer people.
• They are in industries that tend to have a high concentration of employers.

Taken together, these factors mean that a very large share of the most-affected workers are healthcare workers in smaller cities (which tend to have highly concentrated healthcare sectors), including registered nurses, licensed practical and vocational nurses, and nursing assistants, pharmacists and pharmacy technicians, and phlebotomists, lab technologists, and radiologic technologists. Another occupation that appears to be strongly affected by employer concentration is security guards, who seem to have most of their employment opportunities at only a few large firms.  

Our paper suggests that a focus on occupational mobility is particularly important. We find that the effect of employer concentration on wages is at least four times higher for workers in occupations with low outward mobility—such as the healthcare occupations or security guards mentioned in the previous paragraph—than it is for occupations with high outward mobility such as bank tellers or counter attendants. For workers in the lowest quartile of outward mobility, our results suggest that moving from the median level of employer concentration to the 95th percentile reduces average hourly pay by between 4 and 8 percent. To put this into context, median annual pay for a registered nurse is $73,300 and for a pharmacy technician is $33,950. So a 4 percent to 8 percent pay reduction would mean roughly $3,000 to $6,000 less income per year for a typical registered nurse or $1,400 to $2,700 less per year for a typical pharmacy technician. (See Figure 1.)

Figure 1

Our research isn't the first or last word on this issue. Each new research paper adds a small piece to an ever-growing collage of research on employer concentration. Elena Prager of Northwestern University and Matthew Schmitt of the University of California, Los Angeles, for example, analyze hospital mergers, finding that mergers which increase hospital concentration to high levels substantially reduce the wages of nurses and other healthcare occupations. And David Arnold at the University of California, San Diego, finds that merger and acquisition activity that significantly increases local labor market concentration leads to an average decline in worker wages of 2 percent.

A number of other papers demonstrate correlations between wages and measures of employer concentration at the level of local occupations and industries, all of which are robust to a large variety of control variables. In addition, Yue Qiu at Temple University and Aaron Sojourner at the University of Minnesota also find that workers in highly concentrated labor markets receive less non-wage compensation in the form of health benefits, and U-Penn's Marinescu, along with Qiu and Sojourner, find that workers in highly concentrated labor markets are more likely to be subject to labor rights violations.

This evidence overall clearly refutes the idea that employer concentration is a non-issue, affecting only a handful of workers in factory towns. Yet it's also worth emphasizing that, by our best read of the evidence, employer concentration is not likely to be an important factor in wage determination for the majority of U.S. workers. Similarly, it seems unlikely that changes in employer concentration can explain more than a small share of the macro-level trends of rising inequality or wage stagnation (as argued in more detail by Kevin Rinz at the U.S. Census Bureau, and by David Berger at Duke University, Kyle Herkenhoff at the Federal Reserve Bank of New York and the University of Minnesota, and Simon Mongey at the University of Chicago).

Rather, the bulk of the evidence suggests there is a subset of workers—at least several million across the United States—whose wages are suppressed by employer concentration. These are the workers any policy response designed to mitigate the effects of employer concentration should focus on.

What does this mean for anti-monopsony policymaking?

The policy area where these findings are most directly relevant is antitrust, which is explicitly designed to tackle excessive market power. U.S. antitrust authorities have, until recently, almost never considered labor markets in merger scrutiny or in anti-competitive behavior suits. Over recent years, there have been growing calls for antitrust authorities to increase their role in preventing anticompetitive behavior in labor markets, including the Washington Center for Equitable Growth's own recent report on antitrust.

Two papers in particular—one by U-Penn's Marinescu and Herbert Hovenkamp and the other by Suresh Naidu at Columbia University and Eric Posner at the University of Chicago—argue that antitrust authorities should use employer concentration as a screen for possible anti-competitive effects of mergers and acquisitions, as they already do routinely in product markets. They propose that labor markets where mergers would increase employer concentration beyond a certain threshold would be subject to further, more detailed scrutiny before any decision as to whether the merger should be allowed to go ahead.

Our findings would support this policy move, with one caveat. Our results underscore the importance of the definition of the local labor market for the underlying effect of employer concentration. Marinescu and Hovenkamp argue that in the screening process antitrust authorities should measure employer concentration at the level of individual local occupations, but we find that the effects of employer concentration on wages are more than four times as high for occupations with low outward mobility—such as the healthcare workers or security guards mentioned earlier —than for occupations with very high outward mobility, among them cashiers, bank tellers, or counter attendants.

This finding suggests that antitrust authorities should consider not only employer concentration within a local occupation, but also the possibility for outward mobility from that occupation when carrying out this merger scrutiny. While this is a small tweak to the overall policy direction, it could have important ramifications. Our methodology would suggest that mergers to even relatively low levels of employer concentration for occupations with low outward mobility such as nurses should be a greater concern than mergers which increase concentration to high levels for occupations with high outward mobility, such as bank tellers or cashiers. We give some concrete examples where this might matter in our paper.

Increasing antitrust scrutiny in U.S. labor markets is important and feasible, but it's also important to note that in many cases, increased antitrust scrutiny cannot address the wage effects of employer concentration. This is because very often employer concentration arises not because of M&A activity but rather because of firm growth, which antitrust authorities have less power to do anything about. In these labor markets, other policy tools are needed to address the wage suppression arising from employer concentration.

In addition, and perhaps more importantly, it may not always be desirable to reduce firms' size. If there are economies of scale, large firms may be substantially more productive than small firms: think of a factory that may need a minimum scale to operate with cutting-edge technology. In cases like these, if two firms merge, the productivity gains from the increased scale may be greater than the wage suppression arising from the increase in employer concentration. Indeed, if workers receive higher pay as a result of these productivity gains, then it is quite possible that even as employer concentration reduces wages relative to productivity, pay might be higher in a concentrated labor market than in a counterfactual world where the employers were broken up into smaller firms.

In cases like these, enabling firms to stay large while also ensuring that workers share in the productivity gains of the large firms may be a better solution than breaking firms up or preventing mergers. How might this be done? Roughly speaking, there are two categories of policies. One set of policies raises wages externally: through minimum wages at the lower-income end of the labor market, and perhaps through sectoral or occupational wage boards for workers higher up in the income distribution. See, for example, this proposal by economist Arindrajit Dube at the University of Massachusetts Amherst.

Another set of policies empowers workers directly to seek better compensation and working conditions, by increasing workers' formal bargaining power, whether through increased support for the firm-level unions that are more common in the United States or through the type of sectoral bargaining between groups of unions and firms which is prevalent in much of continental Europe. For these policies, it is important to ensure that increases in bargaining power designed to provide countervailing power against concentrated employers tackle the issues raised by the fissuring of the workplace and the legal status of independent contractors. See, for example, work by Brandeis University's David Weil and work by Wayne State University's Sanjukta Paul.

Raising minimum wages and empowering unions are, in addition, effective more broadly as a response to all sources of monopsony power in the labor market (not just as a response to the monopsony power generated by employer concentration). And indeed, the greater degree of underlying monopsony power in the labor market, the less likely it is that minimum wage increases or union drives reduce employment: recent work by IESE's Jose Azar, Emiliano Huet-Vaughn at Pomona College, U-Penn's Marinescu, Burning Glass Technology's Taska, and Till von Wachter at the University of California, Los Angeles, for example, finds that minimum wage increases do not have negative employment effects in highly concentrated labor markets.

Finally, workers' vulnerability to employer concentration can also to some extent be reduced by enabling workers to move more easily, both between geographic locations and between occupations. One promising avenue for some occupations may be to increase the degree to which occupational licenses and certifications are mutually recognized across different U.S. states and the District of Columbia: the University of Minnesota's Janna Johnson and Morris Kleiner find that mutual recognition of occupational licensing has a substantial effect on workers' geographic mobility. Another avenue would be increasing housing supply and reducing housing costs in high-wage cities, which would increase workers' ability to move to places with higher-paying jobs: work by Peter Ganong at University of Chicago Harris School of Public Policy and Daniel Shoag at Harvard Kennedy School suggests that part of the decline in geographic mobility for low-income workers over recent years can be explained by high housing costs.

Conclusion

Overall, the increased concern over employer concentration from researchers and policymakers is justified. A growing body of compelling causal evidence suggests that employer concentration reduces wages for a non-trivial subset of U.S. workers, particularly those in low-outward-mobility occupations, low-population regions, and highly concentrated industries. Importantly, though, employer concentration does not appear to be a major factor in wage suppression for the majority of American workers.

Still, there is a strong case for substantially increased antitrust scrutiny of labor markets, using employer concentration—measured appropriately to reflect workers' mobility—to screen M&A applications for potential anti-competitive effects. In addition, the growing body of evidence on employer concentration further strengthens the case for a substantial increase in the use of policies that raise wages directly via higher minimum wages, wage boards, and empowered unions as part of a broader agenda to tackle the wage suppressive effects of monopsony power.

—Anna Stansbury is a Ph.D. candidate in economics at Harvard University and a Ph.D. scholar in Harvard's Program in Inequality and Social Policy

 -- via my feedly newsfeed

Pathway to Progress: Martin Luther King Jr. and the Scripto Strike [feedly]

Pathway to Progress: Martin Luther King Jr. and the Scripto Strike
https://aflcio.org/2021/1/19/pathway-progress-martin-luther-king-jr-and-scripto-strike

History has long been portrayed as a series of "great men" taking great action to shape the world we live in. In recent decades, however, social historians have focused more on looking at history "from the bottom up," studying the vital role that working people played in our heritage. Working people built, and continue to build, the United States. In our new series, Pathway to Progress, we'll take a look at various people, places and events where working people played a key role in the progress our country has made, including those who are making history right now. Today's topic is the 1964-65 Scripto Strike in Atlanta and Martin Luther King Jr.

When talking about Martin Luther King Jr., it's important to note that he was an activist for economic and labor rights, not just civil rights. King's death came while he was in Memphis, Tennessee, supporting sanitation workers and AFSCME members. His support for unions and collective bargaining rights was a key part of his agenda and that support went public in Atlanta during the Scripto Strike that began in 1964.

In the 1960s, Scripto was a leading pen and pencil manufacturer. The company had a plant in Atlanta since 1931 and were not only one of the largest employers in the city, but the company took pride in being the preferred employer for Black women, particularly in the area of town closest to the plant. Scripto President James V. Carmichael was surprised in 1962, when the International Chemical Workers Union started organizing at the plant. Carmichael believed that he and Scripto should be exempt from race-based complaints, as he took pride as a progressive on the topic, providing better policies for Black workers than the rest of the White Atlanta business community. Carmichael was too far removed from Black workers, though, to understand their needs and hopes and he underestimated their desire for a voice and some power in their economic lives.

The Chemical Workers Union sent the Rev. James Hampton, a Black organizer who was also a Baptist minister, to work with the Scripto employees. He tied the union organizing he was doing to the work that Martin Luther King Jr. was doing with civil rights. Hampton reached out to Black Baptist ministers in the area, recognizing that many of the Scripto workers were parishioners at their churches. King and most of the other Black ministers supported the organizing drive, speaking on behalf of the workers from the pulpit.

Support from the churches significantly boosted the union drive such that by August 1963, the Chemical Workers had collected enough union cards to petition the National Labor Relations Board for a union election. Scripto was confident it would win the election, so it agreed to a quick turnaround and an election date was set for late September. Management quickly made some minor changes, such as organizing an employee committee and removing segregation signs from bathrooms and drinking fountains. Events that spring and summer across the country had the Scripto workers primed for action, however, as they saw civil rights demonstrations having an effect in the South and beyond. 

Nearly 95% of the 1,005 eligible voters participated in the election on Sept. 27, 1963. The union side won, 519-428. Within a week, Scripto began to stall. It filed objections with the NLRB that the appeals to civil rights and race by organizers tainted the election and it should be invalidated. The NLRB repeatedly rejected Scripto's objections until June 9, 1964, when the NLRB in Washington, D.C., certified the Chemical Workers as the union representative for the plant's workers. Scripto stalled on contract negotiations as long as it could and organizers realized that a contract wouldn't come without a strike.

The day before Thanksgiving 1964, a mass of workers walked into the union office and demanded a strike. They worked tirelessly over the holiday and the picket lines were in place when the plant opened the day after Thanksgiving. The workers were unified. Even those who voted against the union largely supported the strike. The "no" vote for many was out of fear of management retaliation more than opposition to union goals and they rejected initial offers from Scripto as discriminatory. Approximately 85% of the plant's workforce were Black and most were classified as "unskilled workers." They were offered half the pay raise that the "skilled workers," who were mostly White, were to be given. The Chemical Workers membership wouldn't accept that deal.

The ministers of the Southern Christian Leadership Conference became involved in the strike because so many of their parishioners were Scripto employees. Led by SCLC director of affiliates C.T. Vivian, they brought their members' concerns about wages and working conditions at Scripto to King's attention. King and the other SCLC ministers, while philosophically sympathetic to the labor movement, they were Southerners and thus unions were outside their life experience. Once the cause of the Scripto workers was put on their radar, though, the potential for alliance was obvious to most, including King.

Vivian, King and others launched a nationwide boycott of Scripto products in support of the strike. As the strike moved on, management refused further pay increases and refused to withhold union dues from employee paychecks, despite giving some on salary increases. By Christmas, the union's resources were virtually exhausted and the company's leadership began to worry about two federal contracts they had and whether the company would be in compliance with an executive order on equal opportunity issued by President John F. Kennedy.

By that point, Carmichael had been replaced by Carl Singer as president and CEO of Scripto. Singer had just come off of a successful tenure as president of the Sealy Mattress Company in Chicago. Singer and King began a series of secret meetings and they worked out a broad framework to end the strike. The company negotiated in good faith and the strike came to an end on January 9, 1965, after six weeks. They soon agreed to a new contract and the Chemical Workers won most of what they asked for. Over time, the company moved towards a more favorable bargaining atmosphere and began to work more directly with the union by the 1970s until the plant shut down in 1977.

The unity established between the labor movement and the civil rights movement during the Scripto strike endured. The SCLC was heavily involved in the labor movement from that point forward and when asked if the Scripto strike would be King's only involvement in labor conflicts, he simply said, "There will be many more to follow." The Scripto strike taught King and others that solidarity and unity are key on the pathway to progress.

Source: Atlanta History Center

Kenneth Quinnell Tue, 01/19/2021 - 10:05  

 -- via my feedly newsfeed

Biden Wants to Raise Taxes, Yet Many Trump Tax Cuts Are Here to Stay [feedly]

Biden Wants to Raise Taxes, Yet Many Trump Tax Cuts Are Here to Stay
https://www.nytimes.com/2021/01/22/business/biden-trump-tax-law.html

WASHINGTON — Donald J. Trump has left the White House. But many of his signature tax cuts aren't going anywhere.

Democrats have spent years promising to repeal the 2017 Tax Cuts and Jobs Act, which Republicans passed without a single Democratic vote and was estimated to cost nearly $2 trillion over a decade. President Biden said during a presidential debate in September that he was "going to eliminate the Trump tax cuts."

Mr. Biden is now in the White House, and his party controls both chambers of Congress. Yet he and his aides are committing to only a partial rollback of the law, with their focus on provisions that help corporations and the very rich. It's a position that Mr. Biden held throughout the campaign, and that he clarified in the September debate by promising to only partly repeal a corporate rate cut.

In some cases, including tax cuts that help lower- and middle-class Americans, they are looking to make Mr. Trump's temporary tax cuts permanent.


Mr. Biden still wants to raise taxes on some businesses and wealthy individuals, and he remains intent on raising trillions of dollars in new tax revenue to offset the federal spending programs that he plans to propose, including for infrastructure, clean energy production and education. Much of the new revenue, however, could come from efforts to tax investment and labor income for people earning more than $400,000, in ways that are not related to the 2017 law.



Mr. Biden did not include any tax increases in the $1.9 trillion stimulus plan he proposed last week, which was meant to curb the pandemic and help people and companies endure the economic pain it has caused.

His nominee for Treasury secretary, Janet L. Yellen, told a Senate committee this week that the president would hold off on reversing any parts of the tax law until later in the recovery, which most likely means as part of a large infrastructure package that he is set to unveil next month. Republican lawmakers repeatedly questioned Ms. Yellen about Mr. Biden's tax plans, warning that repeal of the 2017 cuts would hurt American workers and businesses and push companies to ship jobs overseas.

Ms. Yellen said Mr. Biden had made clear that he "would want to repeal parts of the 2017 tax cuts that benefited the highest-income Americans and large companies." But she added that "he's been very clear that he does not support a complete repeal."

Mr. Biden could end up cementing as much of Mr. Trump's tax cuts as he rolls back. To meet a budget constraint that was necessary to pass the 2017 law with no Democratic votes, Republicans set tax cuts for individuals to expire at the end of 2025. On Thursday, in follow-up answers to written questions from Senator Charles E. Grassley, an Iowa Republican, Ms. Yellen said she would work with Congress to make tax cuts permanent for families earning less than $400,000 a year.


Such a move would most likely reduce the tax revenue that Mr. Biden could otherwise claim to raise from his proposed changes to the Trump tax by at least half and as much as two-thirds, according to calculations by The New York Times. The calculations used analyses from the congressional Joint Committee on Taxation, the Tax Policy Center, the Committee for a Responsible Federal Budget and the University of Pennsylvania's Penn Wharton Budget Model.

All told, over a decade, Mr. Biden's proposed changes to the law could net just $500 billion in additional revenue. In contrast, he has proposed roughly $2 trillion in tax increases unrelated to the law, by the Budget Model's calculations.

Not all of Mr. Biden's intentions for the law's provisions are clear. In the campaign, he said he would remove a limitation that Mr. Trump placed on the deduction of state and local taxes from federal income taxes, known as S.A.L.T., a move that primarily hurt higher-income residents of high-tax states like New York and California.

Ms. Yellen did not commit to such a repeal this week, telling lawmakers she would "study and evaluate what the impact of the S.A.L.T. cap has had on state on local governments, and those who rely upon their services." Repealing the cap would further reduce federal tax revenues.



Biden's Education Department moves to cut ties with an accrediting body linked to a fraud scandal.
Two Trump appointees are being investigated for posting reports denying climate change.
Giuliani concedes that an associate did ask for $20,000 a day to help Trump post-election.

The 2017 law cut taxes for individuals and lowered the corporate rate to 21 percent from 35 percent. It created a new deduction for owners of certain businesses, like limited liability companies, whose owners pay taxes on their profits through the individual tax code. It also overhauled how the United States taxes the income that companies earn overseas, which Republicans said would encourage them to invest and create jobs in America.

Most American workers received at least a small tax cut under the law. Its benefits flowed heavily to high earners: The Joint Committee on Taxation's initial estimates suggested that more than one-fifth of the tax savings from the law in 2021 would go to people earning $500,000 a year or more. That share is set to rise sharply by 2026 if the individual tax cuts expire as scheduled.

Democrats denounced the law as a giveaway to the rich, and it has struggled to attain widespread popularity. An online poll for The Times by the research firm SurveyMonkey found last month that Americans remained evenly split on whether they support or oppose the law. Only one in five respondents was certain of having received a tax cut from it.



During the presidential campaign, Mr. Biden proposed trillions of dollars in tax increases on corporations and the rich, but his plans stopped short of a full repeal of Mr. Trump's tax law. He said he would raise income taxes to pre-Trump levels only at the top bracket, an increase to 39.6 percent from 37 percent. He called for raising the corporate tax rate to 28 percent from 21 percent, where Mr. Trump set it — still short of the top rate of 35 percent that preceded the law.

Even Mr. Biden's international tax plan, which is meant to encourage domestic investment and job creation while raising revenue from large corporations, would work within the boundaries of what Mr. Trump and Republicans did in 2017. Instead of scrapping the overhaul, Mr. Biden would double the rate of the tax — while eliminating a new exemption that Democrats say encourages corporate investment abroad.

The upshot is that Mr. Trump's 2017 cuts will govern tax policy for years to come, said George Callas, a managing director at Steptoe, a law firm in Washington, who helped write the Tax Cuts and Jobs Act as an aide to Speaker Paul D. Ryan of Wisconsin. Mr. Callas said the Biden plan "does in a way concede that the new architecture of the international tax system that the T.C.J.A. created is being accepted as the architecture going forward."

Democrats say the changes that Mr. Biden is proposing for the law would rebalance its incentives for investment and hiring toward the United States, while ensuring that corporations and the rich paid their "fair share" of taxes.

Senator Ron Wyden of Oregon, incoming chairman of the Finance Committee, which will be the starting point in the Senate for any tax changes Mr. Biden wants to make, said in an interview that his top tax priorities in many ways matched Mr. Biden's.

They include limiting a deduction for high earners who run companies that are not organized as corporations and overhauling the exemption for qualified business asset investment overseas — the provision that Democrats say encourages offshoring, though Republicans like Mr. Callas disagree. Mr. Wyden also wants to raise taxes on heirs of large fortunes and on investment income for high earners, through a variety of avenues.

"There is a broad swath of Senate Democrats who are in agreement that the 2017 bill was a giveaway" to the rich and multinational corporations, Mr. Wyden said. "Certainly there is support for rolling back the corporate rate provision, the individual rate being pushed up again."



Republicans have already begun to mount a defense of those portions of the law, both inside and outside Congress, warning that the changes that Mr. Biden proposes would drive more companies to move overseas.

"Raising the U.S. rate or making the international regime more burdensome would have an adverse effect on U.S. global competitiveness," said Rohit Kumar, co-leader of PwC's National Tax Office and a former deputy chief of staff to Senator Mitch McConnell of Kentucky, who was the Republican leader during the tax cut debate.

"Doing both would be a double whammy that would ultimately harm U.S. workers and anyone who has a pension or 401(k) invested in U.S. companies," Mr. Kumar said.

Congressional Republicans have also pushed through, as part of economic stimulus efforts over the last year, several changes to the law they wrote and passed. For example, they relaxed restrictions that the law placed on companies' ability to deduct operating losses from previous years' taxes, in order to reduce their tax bills.

Those provisions alone amount to a $160 billion change in the law — which is more money than Mr. Biden could expect to raise in a decade by reversing Mr. Trump's cut in the top income tax rate for the rich.

Jim Tankersley covers economic and tax policy. Over more than a decade covering politics and economics in Washington, he has written extensively about the stagnation of the American middle class and the decline of economic opportunity. @jimtankersley


 -- via my feedly newsfeed

Pompeo's allegations 'a pack of lies': Xinjiang officials [feedly]

Pompeo's allegations 'a pack of lies': Xinjiang officials
http://www.ecns.cn/news/politics/2021-01-22/detail-ihafywhr7618885.shtml

Special: This is Xinjiang

The latest allegations on Xinjiang by Mike Pompeo of the United States are "nothing but a pack of lies," said officials of northwest China's Xinjiang Uygur Autonomous Region.

The remarks by Xinjiang officials were made at a press conference on Wednesday night in response to Pompeo's false allegation of "crimes against humanity" in Xinjiang.

"Pompeo's accusations against Xinjiang are totally sinister rumors. In fact, the United States is the country that practices 'genocide', said Elijian Anayit, spokesperson for the information office of the Xinjiang regional government.

As is known to the world, ethnic minorities in the United States have long been suffering from bullying, exclusion and wide, systemic discrimination in economic, cultural, social and other aspects, the official said. "From killing American Indians to slave trade, American history has been a history tainted with blood and tears of ethnic minorities."

The death of African-American George Floyd and the subsequent mass protests once again exposed the country's protracted and systemic serious racial discrimination, the spokesperson added.

The population of ethnic minorities in Xinjiang, including the Uygur ethnic group, has been increasing consistently. The growth rate of the Uygur ethnic group is higher than that of the total population, all the ethnic minorities and the Han ethnic group of the region, according to Elijian Anayit.

By denigrating Xinjiang's religious affairs, Pompeo attempted to maliciously sow discord between different ethnic groups in the region, he said.

Freedom of religious belief of all ethnic groups is well respected and protected. In Xinjiang, normal religious activities such as recitation, praying, teaching of the Koran and fasting, conducted by Muslims at home or mosques, are all believers' voluntary activities and protected by law, according to the official.

Xu Guixiang, another senior publicity official of the region, said at the press conference that Xinjiang has made steady progress in human rights and that people of all ethnic groups in the region have a growing sense of fulfillment, happiness and security.

No violent terrorist cases have ever occurred over the past four years and cases of criminal and public security have fallen dramatically in Xinjiang, Xu said. From 2014 to 2019, the per capita disposable income of Xinjiang residents grew by 9.1 percent on average, he added.

Under the leadership of the Communist Party of China, Xinjiang has realized unprecedented achievements in economic and social development, improving people's livelihoods and human rights protection, Xu said.

The good situation of social stability, economic prosperity and people living and working in peace and contentment, which is obvious to the whole world, will by no means be obliterated by the lies and smears made by buffoons like Pompeo, the official added.

 -- via my feedly newsfeed