Monday, April 30, 2018

Turning the Southwest Blue with “Brown and Beautiful” Millennials [feedly]

Turning the Southwest Blue with "Brown and Beautiful" Millennials

In January of this year, organizers of the first Women's March on Washington, D.C., organized a mass rally entitled "Power to the Polls"—in Las Vegas, Nevada. The event promised to take the anti-Trump fervor of Women's March participants across the country into battleground congressional races. This second Women's March came on the heels of Democrat Doug Jones's victory in the December 2017 Senate race in Alabama, which has led to both high hopes and intense speculation about the Democrats' 2018 prospects.

Was that triumph a one-off outcome due to a spectacularly bad Republican candidate—you don't often get to run against a credibly accused child molester—or is there a new opportunity to make progress in some of the reddest states in America? The most optimistic analysts have suggested the latter, with some finding inspiration in the Jones campaign's massive mobilization of the black vote, obtained in part through innovative grassroots approaches pioneered by younger African American organizers.

We wish the best of luck to those working in the South, but there's also another grassroots play worthy of consideration: seriously mobilizing Latinos in the Southwest. After all, while many still focus on the narrow losses in Rust Belt states like Michigan and Wisconsin, Hillary Clinton lost by just 4 percentage points in Arizona, her bid significantly boosted by the community organizers who were working to defeat the re-election of notoriously anti-immigrant Maricopa County Sheriff Joe Arpaio. For that matter, Texas and its 38 electoral votes received scant attention from the Clinton campaign and still came within single digits of flipping blue.

Given such results, it is perhaps no surprise that this year's national Women's March was not held in the nation's capital but in Nevada, a swing state with a statehouse and Senate seat in play in 2018. But as in Alabama, winning the Southwest will require a fresh approach to mobilizing voters of color. For Latinos, that means recognizing a key fact: While roughly 300,000 Latinos become naturalized citizens every year—a trend to be applauded and encouraged—there are nearly 900,000 already citizens who turn 18 each year.

So as much as we need to support those working to mobilize "New Americans" upset about the anti-immigrant policies of the Republican Congress and White House, the real prize to be won is the millennial vote, especially in places like Texas. This year's Texas primary saw an 87 percent increase in Democratic voter turnout over that in the 2014 primary. This surge was due in large part to a growing electorate that is younger, more female, and more diverse.

Like others their age, these young voters of color are Trump-weary and media-savvy. In July 2017, for example, 15 young women decked out in pastel-colored quinceañeradresses and tiaras staged a protest against SB4, a "show me your papers" anti-immigrant bill then pending in the Texas legislature, on the steps of the state capitol. They performed choreographed dances to "Somos Más Americanos" ("We are more American") by the Mexican band Los Tigres del Norte and "Immigrants (We Get the Job Done)" by Nuyorican Lin-Manuel Miranda. The protest was equal parts Latino pride, girl power, and performance art, and was aired on media reaching an estimated 50 million Americans, including 6.5 million views of an MTVNews Facebook post covering the protest, making it one of the most viewed videos of the month on the youth-targeted network. As the young women held their fists high in the air, they chanted, "We are brown and beautiful, and we won't back down because we are Texas."

Most of the young women, like 17-year-old protester Maggie Juarez, weren't yet old enough to vote—but they soon will be. Within the Lone Star State, half of all those under the age of 19 are Latino—and nearly a fifth of the nation's Latinos who are aging into voting hail from Texas. As evidenced by the quinceañera-themed protest, immigration is important, partly because over half of Texas Latino youth have at least one immigrant parent. But the economy, education, and racial justice matter, too, with the last increasingly salient because young Latinos know that the dog-whistle politics of the past have been replaced by the Trump bullhorn of white supremacy.

Capturing these young voters of color is critical for progressives in Texas and beyond—but such a development cannot be assumed. Latinos may vote progressive in Texas (one analysis of the 2016 election in Texas found that just 18 percent of Latinos cast their ballots for Trump), but a plurality see themselves as independent. According to a survey by the Pew Research Center, 44 percent of Latinos and 51 percent of Latino millennials identified themselves as independents. These numbers have encouraged efforts backed by the Koch brothers, like the Libre Initiative, which are trying to make inroads into the Latino vote in such key states as Texas, Arizona, Nevada, and Florida. To combat these forces, progressives need to harness the power of young progressive voters of color by investing in grassroots efforts to engage young people and build a homegrown movement.

One such example was the Bazta Arpaio campaign in Arizona, which attracted legions of Latino youth, including 18-year-old Elisa Ávalos, who aptly summarized what was motivating her and her peers: "We should not be living in fear because he [Arpaio] is in office. … [H]e should be serving the community, not fighting against the community." Organizers knocked on doors, organized at schools, and held rallies and block parties to get the vote out.

At Jolt, an organization one of us heads in Texas, members represent a full spectrum of  millennial Latinos, including Dreamers, children of immigrants, and fifth-generation Texans. What they share aside from their ethnic identity is that most have never volunteered for a political party or a candidate.

Millennial Latinos are being drawn to organizations like Bazta Arpaio and Jolt because they dive head-first into organizing with a message that leverages the power of Latino culture, instead of running away from it. While many progressive organizations in Texas have focused on public safety for non-Latino and immigrant communities in an attempt to win the debate on immigration, Jolt organizers instead speak directly to young Latinos with messages like "SB4 wants to make being brown and undocumented a crime," and "brown is beautiful, we are Texas." In the words of Daniela Rojas, a 23-year-old Dreamer who is a Jolt activist: "I came to Jolt because I was tired of seeing my community attacked and feeling alone. Here I met a bunch of other people like me—and the work is fun." In just one year, Jolt has built a team of hundreds of young Latinos who are registering voters, organizing to defend Dreamers, and recruiting their peers to vote for candidates who stand up for immigrants, people of color, and the LGBTQcommunity.

Jolt's best recruiting tools, however, are parties and cultural protest events, where young people like Rohas come to get their nails painted with brown-power fists and images of Frida Kahlo, have "DACANow" buzzed into their head by a local barber, register to vote, get their picture taken in front of murals painted by other young Latino artists, and screen-print a Trump resistance T-shirt. At Jolt, staff and volunteers spend as much time thinking about how a protest or event will make young Latinos feel empowered as they do thinking about how the event will serve as a catalyst to build the organization's ranks, or to educate and turn out young Latino voters.

This line of messaging and organizing has broken through the national political noise, triggering requests from young Latinos across Texas who want to join Jolt and the fight. Similarly, the Bazta Arpaio campaign reached its target audience with the message: "For everyone who's tired of Arpaio's abuses, 2016 is the year we end his reign and prevent Trump's rise."

In short, to win the young, we need to go bold, not bland.

Movements matter because they can set the moral and political tone of a country. But ultimately, movement momentum must be translated into electoral power. That was the shortfall of the Obama presidency: The groundswell for hope and change was eclipsed by a Tea Party upsurge that helped Republicans capture nearly a thousand state legislative seats. The antidote to that dynamic is not to drift to the center but to capture the already animated anti-Trump coalition and to activate those Obama voters—younger, more diverse, and more liberal—who sat out the 2016 elections.

The possibility of that kind of progressive turnaround is illustrated by the arc of the state of California. In the early 1990s, the Golden State looked much like red-state America today: agitated by anti-immigrant sentiment, strained by the economic distress of deindustrialization, and riddled by political polarization (few remember that Rush Limbaugh actually got his bombastic start in talk radio in Sacramento just prior to that era of unease). Today's California is very different, of course: protecting immigrants against federal overreach, raising (not cutting) taxes to provide services, and tackling disparities in education and the labor market.

Getting there was a matter of demographic change, to be sure, but it was also the result of a great deal of work to change the electorate. Efforts by groups like California Calls lured new and occasional voters to the polls by combining community organizing with electoral mobilization—a strategy called "integrated voter engagement." Such efforts have been crucial to winning state ballot measures to hike taxes on the well-off in both 2012 and 2016, and "de-felonize" drug use, effectively freeing many from state prison, in 2014.

Young people have been an important part of this change. Between 2004 and 2014, 18- to 24-year-olds constituted only about 3.6 percent of the voters in the state's June primary elections (primary elections are a better marker of engagement, since this is usually where newer voters and some progressive constituencies—people of color and the young—slack off). In 2016, however, that same age group comprised 7.5 percent of all the votes cast—more than a doubling of the historic trend (and not entirely attributable to the Bernie Sanders surge among the young).

The slightly older group of millennial voters—critically important to the election of Obama—is fast becoming the largest and most diverse voting bloc in the country. In Virginia, for example, Democratic gubernatorial candidate Ralph Northam beat his Republican opponent by 39 percentage points with voters under age 30. And if Democrats want to take the Southwest, they will need to harness the power of young voters of color in those states, too.

And what a lock that could be on national politics! After all, Texas—which will be majority Latino by 2030—holds 36 congressional seats and 38 Electoral College votes. Once we add in Arizona (11 electoral votes) and California (55 electoral votes), the Latino vote could have the power to help deliver close to 40 percent of the electoral votes needed to win the White House, despite the fact that Latinos currently make up just 18 percent of the U.S. population.  

But getting there will require new strategies and a new focus. Political analysts have frequently labeled the Latino vote a "sleeping giant" and wondered what it would take to fully move it into action. And although the Trump threat is generating a whole new pan-Latino unity—nothing like stripping DACArecipients of their protections to persuade voters that a lot is at stake—trolling the coloniasof Texas and the barriosof California with traditional get-out-the-vote tactics will not be enough.

For while the Latino vote may have been sleeping, there's a whole new generation of activists who are already "woke." They are not likely to pin their hopes, however, on one party or political leader. Instead, they may find inspiration from young people like 17-year-old quinceañeraprotester Maggie Juarez, who showed more courage and leadership than many of Texas's legislators when she opposed SB4 by saying: "We will resist through drawing on the power within our communities; we will resist through celebrating our families and our culture. We will resist through standing in unity and showing that we are not going to back down." 

Now the question is whether progressives and the Democratic Party will invest in young people of color like Maggie, who have the power to redraw the American political map. 

 -- via my feedly newsfeed

Trade Wars Are Never "Easy to Win": Economist Robert Pollin on Trump's China Policy [feedly]

Trade Wars Are Never "Easy to Win": Economist Robert Pollin on Trump's China Policy

Before the election, presidential candidate Donald Trump promised voters across the country that he would turn the tables on foreign competitors to reverse US trade deficits. Last month, President Trump invoked a 1974 trade law and launched a trade war against China by announcing tariffs on more than $150 billion of Chinese goods and products. Trump has argued that the move might cause "a little pain" but that the US will benefit from it in the long run. But are tariffs good for economic policy? And whom do they benefit most -- capitalists or workers?

C.J. Polychroniou spoke to Robert Pollin -- a distinguished professor of economics and co-director of the Political Economy Research Institute at the University of Massachusetts at Amherst -- about the impact of tariffs and trade wars on national economies and the labor market.

C.J. Polychroniou: Bob, let's first of all get some things straight about Trump's decision to impose tariffs on Chinese goods and products. Is the US in an actual trade war with China? Trump says it is not, yet he has also gone on record saying that trade wars are "good, and easy to win."

Robert Pollin: One never knows exactly what Trump is really up to. Whatever policy pronouncements he may have made on day one, there is a good probability that by day four or five, he will have reversed himself. That said, since his 2016 campaign, Trump has been denouncing Chinese trade practices. His main adviser on trade, Peter Navarro, has long been a vehement opponent of US trade relations with China, having authored books titled Death by China and The Coming China Wars.

Since January, Trump has certainly started aggressive actions against Chinese imports into the US. It started with tariffs of 30 percent on imported solar panels, most of which come from China, then moved on in early March to a 25 percent tariff on imported steel and 10 percent on imported aluminum. Predictably, China then retaliated with tariffs on US imports, including aircraft, automobiles, and chemicals, worth about $50 billion. Trump then shot back on April 5, proposing another $100 billion in tariffs on a range of Chinese imports. I wouldn't yet call this a "war," but the threats and skirmishes are intensifying.

Are trade wars "good and easy to win?" Taking the second part of Trump's pronouncement first, it is clear already that they are not "easy to win." China has the capacity to retaliate if provoked excessively. Are trade wars "good?" As with other kinds of war, we are opening ourselves up to all kinds of uncertainties. Trump's latest overture to re-enter the Trans-Pacific Partnership -- after he had also repeatedly denounced this trade agreement and in fact had already pulled out of it -- no doubt reflects his utterly incoherent attempt at keeping up alliances with the rest of East Asia while he is roughing up China. Who knows where it will lead? Certainly not Trump or his advisers.

What are the real causes and consequences of the US trade deficit, which in 2017 amounted to $566 billion?

The United States has been importing more than it exports -- i.e., running a trade deficit -- for 42 straight years. So this is hardly a new development. The 2017 trade deficit of roughly $570 billion amounted to about 3 percent of GDP. The size of the current trade deficit is roughly 50 percent smaller as a share of GDP than what it was a decade ago, just before the financial crisis and Great Recession. So the trade deficit has certainly not been exploding in recent years relative to the pattern over the past 40 years.

A range of factors has contributed to the US economy persistently importing more than it exports. One is simply the fact that after the end of World War II, the rest of the world caught up with the United States in being able to manufacture products that the rest of the world wants to buy. This has been especially significant when economies where wages are low are able to produce goods at acceptable quality. This means they can undercut producers in the United States on costs while maintaining competitive quality. This has certainly been the case with China, and with other East Asian economies before China, including South Korea, Taiwan, Thailand, Singapore and even, decades ago, Japan.

Another factor is that other countries have advanced aggressive industrial policies to help their manufacturing firms succeed as exporters. Germany is an important case in point here: Its industrial policies include stable access to financing, research and development support; effective ongoing vocational training for workers; and a much more cooperative work environment between workers and managers that encourages higher productivity. The average German manufacturing worker is paid about 30 percent more than her counterpart in the US. But Germany is nevertheless an export powerhouse, running a trade surplus at about 8 percent of GDP.

Still more, the US maintains a unique position with the dollar being the most heavily traded global currency. With other countries, if they import more than they export, the value of their currency will fall. For example, the demand to hold Mexican pesos will fall if Mexico is buying more from other countries than the other countries are buying from Mexico. When the peso becomes cheaper, it also means that its exports are cheaper to buy. This will then help Mexico to increase exports. But this pattern doesn't occur with the US dollar. The demand for the dollar stays high, even with the US persistently importing more than it exports, since the world economy runs primarily on dollars. In addition, Wall Street wants the value of the dollar to be high, since that helps support profits on the dollar-denominated stocks, bonds, real estate and other assets sold on Wall Street.

Finally, it is important that we not simply frame trade issues in terms of one country or set of countries versus others. It is critical to also think of the class issues involved with trade and related policies. A good share of US capitalists are happy to purchase products from other countries that are produced with cheaper labor, or to move their operations to other countries if that is most advantageous to them. That enables them to sell at cheaper prices and still earn a profit. Critically, it also gives US firms extra bargaining leverage against their workers. Thus, if workers in, say, a US auto plant, say they deserve a raise, the firm can respond by saying, "You want a raise, fine. We will move to Mexico where manufacturing wages are a fifth of what we pay you."

The point here is not even that the firm will have to move operations to Mexico, or to import assembled parts from Mexico. The point is that the firm can credibly threaten to move. This keeps the workers' bargaining power down. This is a major reason why average wages for US non-supervisory workers have been stagnant since the 1972 -- for 46 long years -- even while average labor productivity in the US -- the amount the average worker produces in a day -- has more than doubled. With wages stagnant and productivity doubling, that means there is twice as much money available for high-end employees and business owners at the end of the day. Here we have a major factor driving the relentless rise in income inequality in the US.

Are tariffs good as an economy policy?

Tariffs can be good or bad as a policy tool, depending on the broader set of circumstances. For the US today, tariffs are not good policy, certainly operating on their own, as opposed to being one part of an overall industrial policy to support domestic manufacturing. The problem is straightforward, as we see in the case of the US and China now. First, tariffs have to be set relatively high, like the 25 percent rate that Trump has imposed on imported steel, in order to seriously discourage US consumers and businesses from purchasing imports. But this also means that US consumers of steel, such as auto manufacturers and construction projects, will now pay more for the steel they buy. At the same time, setting a high tariff barrier against foreign producers seeking access to US markets would no doubt provoke other countries to retaliate, which in turn would reduce our exports as well as our imports. This is what is happening now with China, where the US is now selling $130 billion in US products, even while importing $500 billion of Chinese products.

But tariffs can be a valuable and perfectly legitimate tool for a country trying to develop new, or what is termed "infant" industries. In the 19th century, the US aggressively imposed tariffs on British textiles, which created a protective environment for the development of a US textile industry. The US tariffs today on imported solar panels could be beneficial for strengthening a still developing domestic solar manufacturing industry. But this tariff policy on imported solar panels only makes sense in the US today as one component of a broader green economy and climate stabilization program, including binding measures to steadily drive down greenhouse gas emissions to zero over the next 30-40 years. Obviously, Trump will have nothing to do with a positive green economy agenda in support of climate stabilization. As such, the tariffs on solar panels make no sense as a one-off measure.

Who benefits the most from tariffs -- capitalists or workers?

It is hard to think about tariff policy independently of a broader set of trade policies, industrial policies and still more broadly, social protections. Tariffs that protect domestic industries can help support jobs, for example, in some US manufacturing areas. But that doesn't mean that the jobs protected will necessarily be good ones. We therefore still need unions and worker protections like a $15 minimum wage to help workers maintain bargaining power against capitalists and to make jobs in these protected industries pay decently. We would still need to take a large share of revenue from the tariffs to help domestic industries thrive through infrastructure investments, and to support social programs such as decent school systems that pay teachers and other public sector workers living wages. Without such measures, the tariffs simply become a way to protect domestic capitalists against foreign competition, including domestic firms that are perfectly happy to continue exploiting their workers to the maximum extent.

What should be a left vision for trade?

Fundamentally, I think that the left today should be committed everywhere to pushing the institutions of liberal capitalism to their limit in allowing democratic politics and egalitarian goals to gain ascendency over acquisitiveness. In concrete terms, this translates into advancing programs for full employment with decent wages and generous social benefits in all countries, allowing for specific circumstances as to how to apply this set of goals most effectively. We need to then think about trade policies within this broader framework.

Speaking of the US today, we can achieve and sustain a full employment economy with decent wages and social benefits even while maintaining a trade deficit at roughly the level the economy is at now. As it is, unemployment in the US is at a historically low level, at about 4 percent. This is while we are also running a trade deficit at about 3 percent of GDP. We do need to still expand job opportunities much further. But we also need to make sure these jobs are paid decently and that our social programs are well funded. Wages therefore need to go up and profits to go down, while taxes on the rich need to rise to finance a generous welfare state.

We also need to remember that the left's egalitarian commitments must be global, not just confined to our own country. In this spirit, we need to recognize that most other countries, especially developing countries, benefit more from selling products in US markets than the US economy is harmed by running trade deficits at current levels. The US dollar remains the world's most desirable currency, which enables the United States, uniquely, to continue importing more than it exports without having to undertake serious adjustments to close that gap. The United States should certainly pursue industrial policies to promote innovation and growth in manufacturing, especially around clean energy and related environmental projects, along the lines of Germany. But this does not mean that the US should be committed to expanding domestic job opportunities by reducing opportunities in, for example, Vietnam, Kenya, Guatemala, China or India.

That said, it is also true that developing economies, especially large successful exporters such as China and India, should shift their growth strategies away from relying on exporting to rich countries. These countries should increasingly become focused on raising wages and improving working conditions among the still-overwhelming majority of poor people within their borders. This will lead to growing domestic markets in the developing world, enabling working people there to buy the products they themselves produce.

While this kind of domestically focused, wage-led growth model for developing countries is compelling, it cannot be implemented overnight, even assuming the majority of policymakers in these countries embraced the approach. In the meantime, developing countries will continue to rely substantially on selling their products in US markets. But this need not pose major difficulties within the United States precisely because we are capable of achieving full employment and a generous welfare state while maintaining a trade deficit at roughly the current level.




C.J. Polychroniou is a political economist/political scientist who has taught and worked in universities and research centers in Europe and the United States. His main research interests are in European economic integration, globalization, the political economy of the United States and the deconstruction of neoliberalism's politico-economic project. He is a regular contributor to Truthout as well as a member of Truthout's Public Intellectual Project. He has published several books and his articles have appeared in a variety of journals, magazines, newspapers and popular news websites. Many of his publications have been translated into several foreign languages, including Croatian, French, Greek, Italian, Portuguese, Spanish and Turkish. He is the author of Optimism Over Despair: Noam Chomsky On Capitalism, Empire, and Social Change, an anthology of interviews with Chomsky originally published at Truthout and collected by Haymarket Books.

Printed with permission from Truthout.

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Sunday, April 29, 2018

Trump Is Using “Welfare” Dog Whistles to Come After the Entire Working Class [feedly]

Trump Is Using "Welfare" Dog Whistles to Come After the Entire Working Class

On Tuesday night, President Donald Trump signed an executive order that sums up how little he understands about poverty in America.

The order, titled "Reducing Poverty in America by Promoting Opportunity and Economic Mobility," carries little weight by itself. It directs a broad range of federal agencies to review programs serving low-income people and make recommendations on how they can make the programs harder to access, all under the guise of "welfare reform."

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Jobless Due to Trade? Robots? AI? Why America Needs ‘Just Transitions’ [feedly]

Moderator: 'Just Transition' -- a phrase meaning "Pay the Losers" -- the ONLY remedy to trade shocks on a workforce in a globalized world. And the PAYMENT should be at least be commensurate with the real losses, and strive to be ENOUGH to transition the losers to winners, or to well-earned retirement. :)

Jobless Due to Trade? Robots? AI? Why America Needs 'Just Transitions'

Nathan Lambrecht/The Monitor via AP

A worker prepares crates of U.S. manufactured parts for shipment into Mexico at Freight Dispatch Service Agency LTD in Pharr, Texas. 

I am constantly amazed that some journalists, especially economic and business reporters, have a difficult time understanding industrial working-class support for Donald Trump. Failure to understand his appeal is particularly important given that Trump's evolving trade policy, including withdrawing the United States from the Trans-Pacific Partnership (TPP) and renegotiating NAFTA, may contribute to his continued support in manufacturing states. 

In the 2016 election, Trump argued that past trade policy had not benefited the American people. He described appeals to free trade as a charade masking the devastating effects of deindustrialization, which drew popular support from workers in industrial states where manufacturing jobs had disappeared and local communities were devastated.

The politics of resentment ran deep in 2016. Yet the Democratic Party ignored the depth of workers' anger and assumed that the usual promises and bromides about free trade and economic change would safely carry industrial states as they often had in the past. 

The Alliance for American Manufacturing (AAM) tried to warncandidates of simmering unrest over trade. It urged both parties to offer clear and effective trade policies. Following the election, AAM president Scott Paulstated the obvious: "One of the most defining themes of this election was the economic pain felt by some voters, particularly those within the working middle-class. Communities across America felt left behind as manufacturing jobs disappeared and no single election cycle can erase that." 

With the release of Trump's Trade Agenda Report, trade is again front and center in American politics, so reporters are once again trying to understand how and why it matters. Clearly, it mattered in the 18th Congressional District race in Pennsylvania, where Democrat Connor Lamb broke with the National Democratic Partyby not bashing Trump and by supporting the President's trade policy, including the quotas on steel and aluminum imports. Lamb's victory in this usually Republican district has made many reporters wonder if other Democrats will shun the Party's past trade policy, at the risk losing campaign contributions from Wall Street. 

Some reporters are now asking whether industrial workers will stand in solidarity with farmers in the Midwest, who are being hurt by the embargoes and tariffs on agricultural products imposed by China in response to Trump's policies. They've failed to notice that farmers didn't support workers in manufacturing areas when they were losing jobs. Nor did many legislators, who have been some of the most ardent supporters of free trade in agriculture, offer much support when trade threatened industrial jobs.

It may be that the real problem between Democrats and working people on trade policy is about what academics call "positionality"—who you are, including where you are from, shapes what you know and the policies you support. This can seem like a simple formulation, but it's clear that how people view trade policy depends not only on geography but on what kind of work they do. Neither steelworkers nor farmers will support trade policies that will harm their economic security or disrupt their communities. 

This is true for other employment threats, too. We often see the same worker resistance to environmental policies that create economic displacement as well as to technological innovations that replace people with computers or robotics. These changes may be inevitable and beneficial globally, but political leaders need to address the inequities they bring. 

There's a way that Democrats can begin to address these problems (which are existential for workers and politically existential for the Democrats, as the 2016 presidential contest made clear. If Democrats want to regain the support of workers, they need to argue more forcefully for just transitions. The term has been around for some time in discussions about promoting green industries and low-carbon economies. Just transitions involve a range of social interventions needed to secure workers' jobs and livelihoods threatened by economic dislocation and change. Just transition policies range from rebuilding and expanding the social safety net, including health care, education, retraining, to investments in infrastructure and public works projects, to the more systemic approach of a guaranteed basic income. 

But the concept of just transitions has not surfaced in recent U.S. policy debates about trade reform. Rather, U.S. Trade Representative Robert Lighthizer wants to makestructural adjustmentsto the trade laws, such as rescinding corporate-controlled independent labor arbitration process. Even the Congressional Progressive Caucus's A Fair Trade Agendafocuses primarily on leveling the trade playing field. No doubt many of its suggested reforms would garner some support from workers and their unions. But they would also have limited effects and would not address the social and economic costs of deindustrialization or future technological displacements.

We need to look beyond incremental strategies that could protect some jobs and focus more on equitable reform. As Hadrian Mertins-Kirkwoodhas suggested in discussing the shift to a low carbon economy, we need transitions that create "equitable outcome[s] for all workers" and make justice a priority. Regardless of the industry or whether the cause is trade policy, environmental concerns, or innovation, displaced workers need a social safety net unlike those we have seen in past. 

This kind of just transition is what Senator Bernie Sanders recently introduced—a plan that would guarantee every American worker who wants one a job paying $15 an hour with health-care benefits. As The Washington Postcommented, Sanders's plan embraces "the kind of large-scale government works project that Democrats have shied away from in recent decades." It also offers a starting point for a national discussion about how a just transitions approach can respond to dislocations involving trade, climate change, and artificial intelligence.

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How to actually help Puerto Rico [feedly]

How to actually help Puerto Rico

Desmond Lachman, Brad Setser and Antonio Weiss have written a strong analysis of the Puerto Rico situation. If ever there was a disconnect between underlying reality and what is happening in financial markets, it is the boom in Puerto Rican debt which has nearly doubled the value of some of its debt securities over the last few months.

Markets are now pricing that close to 20 billion more dollars will come out of Puerto Rico to investors than they were at the end of 2017, following Puerto Rico's own government, which is inexplicably projecting a substantially greater ability to repay debt today than before the hurricane.

What is going on? True, there may have been some excessive panic and liquidation selling in markets right after the hurricane. And the federal government is infusing more money into Puerto Rico than might have been expected in the immediate aftermath of the hurricane. But there is something profoundly troubling about speculators in Puerto Rican debt reaping windfalls even as estimates of hurricane damage are revised up, tax reform legislation undermines Puerto Rican competitiveness, out-migration increases, political cleavages increase, layoffs from the public sector are set to increase and outside observers become more pessimistic about Puerto Rico's economic prospects.

The Puerto Rican government's upward revision of 10 percent in its economic forecast for 2023 over the year since the hurricane is analytically indefensible. In all likelihood, last year's forecast should have been revised downward, not upward. If the Oversight Board is to maintain its credibility, it will reject the government's forecasts.

Credibility is important. My experience with crises is that they are never resolved until the authorities have made a forecast that proves too pessimistic. We are not there yet in Puerto Rico.

The fundamental problem now in Puerto Rico is the current sterile debate between those who believe that salvation lies in more debt relief and more federal support and those who believe in more belt-tightening by Puerto Rico and market-oriented structural reforms. Aid advocates wrongly downplay the efficacy of reform as a way of making the case for more support. Reform advocates fear that support will undermine pressure for reform and so wrongly downplay the need for debt relief and federal support.

The result is inadequate support, insufficient reform and a dismal outcome for Puerto Rico.

What is needed is much more reform and much more support, especially through debt relief, than now looks likely.  Toward that end the Oversight Board, which has substantial moral authority, needs to provide real leadership by stressing that reform and support are mutually reinforcing. It needs to highlight that:

  1. Without debt overhangs, structural reforms to help business and free up labor markets will be most effective.
  2. Structural reforms, while desirable in the medium and long terms, require some increased safety-net expenditures to be politically acceptable.
  3. A big push of reform and debt relief maximizes Puerto Rico's prospects for self-sufficiency and will over time minimize out-migration.

The Oversight Board can do the easy thing and make all the stakeholders happy by being relatively optimistic and asking less of all the Puerto Rican stakeholders. Or it can do the hard and right thing for Puerto Rico and American taxpayers by refusing to bless any approach not predicated on large-scale structural reform and extraordinarily sweeping debt relief. I hope it steps up.

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Economic Update - Employees vs Employers: Endless Tensions - 04.29.18 [feedly]

Economic Update - Employees vs Employers: Endless Tensions - 04.29.18

 (size: 107 MB )

Updates on German workers who elect almost half of corporate boards of directors, major US corporations with negative tax rates, Kentucky governor maneuvers against black-lung victims, involuntary part-time employment, epidemic of US evictions, and dangerous long-term use of anti-depressant drugs. Major discussions of economics of socialism and of phony claims of 'no money' by state leaders (example: Connecticut). 

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Dems’ Job Guarantee Isn’t Nearly as Easy as It Sounds [feedly]

Moderator: Sometimes Baker is disingenuous to a perplexing degree. No one ever said the guaranteed job program would be "EASY". But neither is living in this economy, for the 40 million workers making less than 15$.

It is true that a government employer of last resort wage DOES become the BOTTOM wage. Thus, in order to afford, or implement it, the wage will have to start LOW. That caused, for example, Bill Green of the AFL in the thirties to OPPOSE the Roosevelt public works projects -- which actually inspired the Levy Institute, since they were key recommendations of economist Hyman Minsky, and JM Keynes drawing lessons from the Great Depression.

Dems' Job Guarantee Isn't Nearly as Easy as It Sounds

Dean Baker
The Daily Beast, April 27, 2018

See article on original site

There has been a surge of interest in the last year in the idea of a government job guarantee.

A number of economists associated with the Levy Institute at Bard College and University of Missouri at Kansas City have long pushed the idea. In recent months, several potential candidates for the 2020 Democratic presidential nomination have publicly raised the idea, including senators Corey Booker and Kirsten Gillibrand, and of course Bernie Sanders, who has fully endorsed it.

While the idea of guaranteeing a decent paying job to every worker who wants one is appealing, it is likely to prove a difficult lift in implementation. A guaranteed job would radically transform the labor market in a way that could put tens of millions of workers on the public payroll. This would almost certainly put many low-wage employers out of business and raise the costs to consumers of services like restaurants, haircuts, and house cleaning. It also effectively gives the government direct responsibility for allocating workers across regions.

The basic issue is that the program is designed to guarantee all people decent pay through their work. The problem is that this guarantee will not only provide an opportunity to those currently unemployed or under-employed; it would provide a better option for tens of millions of workers who already have jobs.

A key issue here is determining the number of people who might opt for this public program. That will depend on the wage rate. In the plan being pushed by the Levy Institute (politically, most closely associated with Sanders), the wage rate is $15 an hour. This is around the 25th percentile of the wage distribution, meaning that 40 percent of the workforce, or roughly 40 million workers, now gets less.

The proposal also calls for health-care insurance equivalent to that received by federal employees. This would make the plan attractive to even more low-wage workers, most of whom do not get employer-provided health-care benefits. In addition, government jobs are likely to offer job security and protection against abuses by an employer, like sexual harassment, which is yet another reason why they may prove attractive to workers in the private sector.

"A Federal Reserve Board committed to a 2.0 percent inflation target would send interest rates soaring in response to this rise."

Given the number of workers who currently are paid less than the $15 an hour proposed wage, plus health care benefits that are worth at least $4 an hour, it might be that 10 million workers would leave private sector jobs for a guaranteed federal job.  And that's a conservative estimate; it could quite possibly be more than 20 million. With 10 million or so unemployed and underemployed workers, we are likely talking about having at least 20 million people in the program and perhaps over 30 million.

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Currently the federal workforce, excluding the Postal Service. is 2.2 million, so this is increasing the number of workers employed by the federal government by a factor of at least ten. The proposal calls for the program to be administered at the state and local level. This also presents issues (many of these governments have serious corruption problems), but even using state and local employment as a denominator, we would still be talking about doubling current levels.

It requires some serious faith in government to think that this sort of leap in employment levels can be well-managed if done in a short period of time. It doesn't help that many of these workers will have little education and job experience.

There is also the issue of what happens in the private sector. The opportunity to get a public-sector job, with health-care insurance, paying $15 an hour, effectively imposes a floor on wages in the private sector. If we say that 50 million people now earn less than this package (the median wage is around $23 an hour – 80 million workers earn less), and the average gap is $4 an hour, then the additional cost to matching this wage in the private sector will be roughly $350 billion a year (this calculation assumes 1750 hours per worker and 50 million workers).

That sum comes to roughly 1.8 percent of GDP. There also has to be some spillover effect. Workers who had been earning $16 or $17 an hour will have to see some bump in pay when the pay for those at the bottom jumps to $15 from levels that are currently as low as $7.25 an hour. If 20 million workers are in the bump range, and they get an average pay increase of $2 an hour, that raises the cost by another $70 billion, putting the total at $420 billion, or 2.1 percent of GDP.

And this brings us to inflation. As a first approximation, this 2.1 percent figure would be the impact on the level of prices, although it would be dampened by reduced profit margins and increases in productivity. In any case, a Federal Reserve Board committed to a 2.0 percent inflation target would send interest rates soaring in response to this rise.

But even if the Fed can be controlled, this rise in pay for those at the bottom will mean a reduction in living standards for those higher up. They will have to pay more for restaurants and haircuts, as well having their house cleaned and their lawn mowed.

Most of us won't shed any tears for the "hard to get good help" crowd, but if we haven't taken steps to weaken their economic power—which won't be easy because they are powerful—we can expect to see doctors, lawyers, and other high-end earners getting pay hikes to protect their living standards. This is a story of serious wage-price spiral, unless we introduce other measures.

None of this means we should reject a job guarantee out of hand. We can start with a lower wage and limit the program to long-term unemployed, or in other ways restrict the size. But we should also look to measures to weaken the economic power of those at the top. It is government policies, like restricting the entrance of qualified foreign doctors and allowing pension funds that pay private equity partners to lose them money, not laws of economics, that gives us a situation where doctors get $260,000 a year, hedge fund boys over a million, and CEOs more than $20 million. Reversing these policies will open the door for much higher pay and living standards for those lower down the income ladder.

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