|
Thursday, February 21, 2019
Automated Intuit Notification
Wednesday, February 20, 2019
On Paying for a Progressive Agenda [feedly]
On Paying for a Progressive Agenda
https://www.nytimes.com/2019/02/19/opinion/on-paying-for-a-progressive-agenda.html
By Paul Krugman
Opinion Columnist
Feb. 19, 2019
Whoever gets the Democratic nomination, she or he will run in part on proposals to increase government spending. And you know what that will mean: There will be demands that the candidate explain how all this will be paid for. Many of those demands will be made in bad faith, from people who never ask the same questions about tax cuts. But there are some real questions about the fiscal side of a progressive agenda.
Well, I have some thoughts about that, inspired in part by looking at Elizabeth Warren's proposals on both the tax and spending side. By the way, I don't know whether Warren will or even should get the nomination. But she's a major intellectual figure, and is pushing her party toward serious policy discussion in a way that will have huge influence whatever her personal trajectory.
In particular, Warren's latest proposal on child care – and the instant pushback from the usual suspects – has me thinking that we could use a rough typology of spending proposals, classified by how they might be paid for. Specifically, let me suggest that there are three broad categories of progressive expenditure: investment, benefits enhancement, and major system overhaul, which need to be thought about differently from a fiscal point of view.
So, first off, investment – typically spending on infrastructure or research, but there may be some room at the margin for including spending on things like childhood development in the same category. The defining characteristic here is that it's spending that will enhance society's future productivity. How should we pay for that kind of outlay?
The answer is, we shouldn't. Think of all the people who say that the government should be run like a business. Actually it shouldn't, but the two kinds of institution do have this in common: if you can raise funds cheaply and apply them to high-return projects, you should go ahead and borrow. And Federal borrowing costs are very low – less than 1 percent, adjusted for inflation – while we are desperately in need of public investment, i.e., it has a high social return. So we should just do it, without looking for pay-fors.
Much of what seems to be in the Green New Deal falls into that category. To the extent that it's a public investment program, demands that its supporters show how they'll pay for it show more about the critics' bad economics than about the GND's logic.
My second category is a bit harder to define, but what I'm thinking of are initiatives that either expand an existing public program or use subsidies to create incentives for expanding some kind of socially desirable private activity – in each case involving sums that are significant but not huge, say a fraction of a percent of GDP.
The Affordable Care Act falls into that category. It expanded Medicaid while using a combination of regulation and subsidies to make private insurance more available to families above the new Medicaid line. Warren's childcare proposal, which reportedly will come in at around 1/3 of a percent of GDP, also fits. So would a "Medicare for All" proposal that involves allowing people to buy in to government insurance, rather than offering that insurance free of charge.
It's harder to justify borrowing for this kind of initiative than borrowing for investment. True, with interest rates low and demand weak it makes some sense to run persistent deficits, but there are surely enough investment needs to use up that allowance. So you want some kind of pay-for. But the sums are small enough that the revenue involved could be raised by fairly narrow-gauge taxes – in particular, taxes that hit only high-income Americans.
That is, in fact, how Obamacare was financed: the revenue component came almost entirely from taxes on high incomes (there were some small items like the tax on tanning parlors.) And Warren has in fact proposed additional taxes on the wealthy – her proposed tax on fortunes over $50 million would yield something like four times the cost of her child care proposal.
So benefit enhancement can, I'd argue, be paid for with taxes on high incomes and large fortunes. It doesn't have to impose on the middle class.
Finally, my third category is major system overhaul, of which the archetype would be replacing employer-based private health insurance with a tax-financed public program – the purist version of Medicare for all. A really major expansion of Social Security might fall into that category too, although smaller enhancements might not.
Proposals in this category are literally an order of magnitude more expensive than benefit enhancements: private health insurance currently amounts to 6 percent of GDP. To implement these proposals, then, we'd need a lot more revenue, which would have to come from things like payroll taxes and/or a value-added tax that hit the middle class.
You can argue that most middle-class families would be better off in the end, that the extra benefits would more than compensate for the higher taxes. And you'd probably be right. But this would be a much heavier political lift. You don't have to be a neoliberal tool to wonder whether major system overhaul should be part of the Democratic platform right now, even if it's something many progressives aspire to.
My main point now, however, is that when people ridicule progressive proposals as silly and unaffordable, they're basically revealing their own biases and ignorance. Investment can and should be debt-financed; benefit enhancements can be largely paid for with high-end taxes. Howard Schultz won't like it, but that's his problem
-- via my feedly newsfeed
https://www.nytimes.com/2019/02/19/opinion/on-paying-for-a-progressive-agenda.html
By Paul Krugman
Opinion Columnist
Feb. 19, 2019
Whoever gets the Democratic nomination, she or he will run in part on proposals to increase government spending. And you know what that will mean: There will be demands that the candidate explain how all this will be paid for. Many of those demands will be made in bad faith, from people who never ask the same questions about tax cuts. But there are some real questions about the fiscal side of a progressive agenda.
Well, I have some thoughts about that, inspired in part by looking at Elizabeth Warren's proposals on both the tax and spending side. By the way, I don't know whether Warren will or even should get the nomination. But she's a major intellectual figure, and is pushing her party toward serious policy discussion in a way that will have huge influence whatever her personal trajectory.
In particular, Warren's latest proposal on child care – and the instant pushback from the usual suspects – has me thinking that we could use a rough typology of spending proposals, classified by how they might be paid for. Specifically, let me suggest that there are three broad categories of progressive expenditure: investment, benefits enhancement, and major system overhaul, which need to be thought about differently from a fiscal point of view.
So, first off, investment – typically spending on infrastructure or research, but there may be some room at the margin for including spending on things like childhood development in the same category. The defining characteristic here is that it's spending that will enhance society's future productivity. How should we pay for that kind of outlay?
The answer is, we shouldn't. Think of all the people who say that the government should be run like a business. Actually it shouldn't, but the two kinds of institution do have this in common: if you can raise funds cheaply and apply them to high-return projects, you should go ahead and borrow. And Federal borrowing costs are very low – less than 1 percent, adjusted for inflation – while we are desperately in need of public investment, i.e., it has a high social return. So we should just do it, without looking for pay-fors.
Much of what seems to be in the Green New Deal falls into that category. To the extent that it's a public investment program, demands that its supporters show how they'll pay for it show more about the critics' bad economics than about the GND's logic.
My second category is a bit harder to define, but what I'm thinking of are initiatives that either expand an existing public program or use subsidies to create incentives for expanding some kind of socially desirable private activity – in each case involving sums that are significant but not huge, say a fraction of a percent of GDP.
The Affordable Care Act falls into that category. It expanded Medicaid while using a combination of regulation and subsidies to make private insurance more available to families above the new Medicaid line. Warren's childcare proposal, which reportedly will come in at around 1/3 of a percent of GDP, also fits. So would a "Medicare for All" proposal that involves allowing people to buy in to government insurance, rather than offering that insurance free of charge.
It's harder to justify borrowing for this kind of initiative than borrowing for investment. True, with interest rates low and demand weak it makes some sense to run persistent deficits, but there are surely enough investment needs to use up that allowance. So you want some kind of pay-for. But the sums are small enough that the revenue involved could be raised by fairly narrow-gauge taxes – in particular, taxes that hit only high-income Americans.
That is, in fact, how Obamacare was financed: the revenue component came almost entirely from taxes on high incomes (there were some small items like the tax on tanning parlors.) And Warren has in fact proposed additional taxes on the wealthy – her proposed tax on fortunes over $50 million would yield something like four times the cost of her child care proposal.
So benefit enhancement can, I'd argue, be paid for with taxes on high incomes and large fortunes. It doesn't have to impose on the middle class.
Finally, my third category is major system overhaul, of which the archetype would be replacing employer-based private health insurance with a tax-financed public program – the purist version of Medicare for all. A really major expansion of Social Security might fall into that category too, although smaller enhancements might not.
Proposals in this category are literally an order of magnitude more expensive than benefit enhancements: private health insurance currently amounts to 6 percent of GDP. To implement these proposals, then, we'd need a lot more revenue, which would have to come from things like payroll taxes and/or a value-added tax that hit the middle class.
You can argue that most middle-class families would be better off in the end, that the extra benefits would more than compensate for the higher taxes. And you'd probably be right. But this would be a much heavier political lift. You don't have to be a neoliberal tool to wonder whether major system overhaul should be part of the Democratic platform right now, even if it's something many progressives aspire to.
My main point now, however, is that when people ridicule progressive proposals as silly and unaffordable, they're basically revealing their own biases and ignorance. Investment can and should be debt-financed; benefit enhancements can be largely paid for with high-end taxes. Howard Schultz won't like it, but that's his problem
-- via my feedly newsfeed
Black women’s labor market history reveals deep-seated race and gender discrimination [feedly]
Black women's labor market history reveals deep-seated race and gender discrimination
https://www.epi.org/blog/black-womens-labor-market-history-reveals-deep-seated-race-and-gender-discrimination/
-- via my feedly newsfeed
https://www.epi.org/blog/black-womens-labor-market-history-reveals-deep-seated-race-and-gender-discrimination/
The black woman's experience in America provides arguably the most overwhelming evidence of the persistent and ongoing drag from gender and race discrimination on the economic fate of workers and families.
Black women's labor market position is the result of employer practices and government policies that disadvantaged black women relative to white women and men. Negative representations of black womanhood have reinforced these discriminatory practices and policies. Since the era of slavery, the dominant view of black women has been that they should be workers, a view that contributed to their devaluation as mothers with caregiving needs at home. African-American women's unique labor market history and current occupational status reflects these beliefs and practices.
Compared to other women in the United States, black women have always had the highest levels of labor market participation regardless of age, marital status, or presence of children at home. In 1880, 35.4 percent of married black women and 73.3 percent of single black women were in the labor force compared to only 7.3 percent of married white women and 23.8 percent of single white women. Black women's higher participation rates extended over their lifetimes, even after marriage, while white women typically left the labor force after marriage.
Differences in black and white women's labor participation were due not only to the societal expectation of black women's gainful employment but also to labor market discrimination against black men which resulted in lower wages and less stable employment compared to white men. Consequently, married black women have a long history of being financial contributors—even co-breadwinners—to two-parent households because of black men's precarious labor market position.
Black women's main jobs historically have been in low-wage agriculture and domestic service.1 Even after migration to the north during the 20th century, most employers would only hire black women in domestic service work.2Revealingly, although whites have devalued black women as mothers to their own children, black women have been the most likely of all women to be employed in the low-wage women's jobs that involve cooking, cleaning, and caregiving even though this work is associated with mothering more broadly.
Until the 1970s, employers' exclusion of black women from better paying, higher status jobs with mobility meant that they had little choice but to perform private domestic service work for white families. The 1970s was also the era when large numbers of married white women began to enter into the labor force and this led to a marketization of services previously performed within the household, including care and food services. Black women continue to be overrepresented in service jobs. Nearly a third (28 percent) of black women are employed in service jobs compared to just one-fifth of white women.
Discriminatory public policies have reinforced the view of black women as workers rather than as mothers and contributed to black women's economic precarity. This has been most evident with protective welfare policies that enabled poor lone white mothers to stay at home and provide care for their children since the early 20th century. These policies were first implemented at the state level with Mother's Pensions and then at the national level with the passage of the Social Security Act of 1935. Up until the 1960s, caseworkers excluded most poor black women from receiving cash assistance because they expected black women to be employed moms and not stay at home moms like white women.3
This exclusion meant that for most of the history of welfare, the state actively undermined the well-being of black families by ensuring that black women would be in the labor force as low-wage caregivers for white families. This helped to secure the well-being of white families and alleviated white women of having to do this work. The state simultaneously undermined the well-being of black families by denying black mothers the cash assistance that they needed to support their children and leaving black women with no other option but to work for very low wages. Indeed, the backlash against poor black moms receiving cash assistance eventually culminated in the dismantling of the AFDC program and the enactment of TANF—a program with strict work requirements.4
Because of discriminatory employer and government policies against black men and women, black mothers with school age children have always been more likely to be in the labor force compared to other moms. Today, 78 percent of black moms with children are employed compared to an average of just 66 percent of white, Asian American, and Latinx moms.5
Although black women have a longer history of sustained employment compared to other women, in 2017, the median annual earnings for full-time year round black women workers was just over $36,000—an amount 21 percent lower than that of white women, reflecting black women's disproportionate employment in low-wage service and minimum and sub-minimum wage jobs. Black families, however, are more reliant on women's incomes than other families are since 80 percent of black mothers are breadwinners in their families.
Despite black women's importance as breadwinners, the state has compounded the lack of protections afforded black mothers by failing to protect black women as workers.6 In fact, state policies have often left black women vulnerable to workplace exploitation by excluding them from various worker protections. New Deal minimum wage, overtime pay, and collective bargaining legislation excluded the main sectors where black women worked–domestic service and farming. Although there have been inclusions since then, these sectors still lack full access to worker protections.
The legacy of black women's employment in industries that lack worker protections has continued today since black women are concentrated in low paying, inflexible service occupations that lack employer-provided retirement plans, health insurance, paid sick and maternity leave, and paid vacations. Over a third (36 percent) of black women workers lack paid sick leave.
All workers—especially the most vulnerable–need workplace protections, including minimum wages that are livable wages. Universally available family-friendly workplace policies would be especially beneficial to women given their care responsibilities: paid sick and parental leave, subsidized child and elder care, and flexible work options.
This analysis is based on the author's working paper, "Black Women on the Verge: Missing Black Men and Its Impact on Black Women"
1. Teresa Amott and Julie Matthaei. Race, Gender, and Work: A Multicultural Economic History of Women in the U.S. Boston: South End Press, 1996.
2. Jones, Jacqueline. 1985. Labor of Love, Labor of Sorrow: Black Women, Work, and the Family from Slavery to the Present. New York: Basic Books, Inc.
3. White, Deborah Gray, "Making a Way Out of No Way", in Too Heavy a Load: Black Women in Defense of Themselves, 1894-1994", W.W. Norton & Company, 1999.
4. Edelman, Peter. So Rich, So Poor: Why it's So Hard to End Poverty in America. The New Press. 2012.
5. Author's calculation from BLS data.
6. Mutari, Ellen, Power, Marilyn, and Deborah M. Figart (2002). "Neither Mothers Nor Breadwinners: African-American Women's Exclusion From US Minimum Wage Policies," 1912-1938, Feminist Economics, 8:2, 37-61.
-- via my feedly newsfeed
Tuesday, February 19, 2019
New York Labor Didn't Shrink from Confronting Amazon [feedly]
New York Labor Didn't Shrink from Confronting Amazon
https://prospect.org/article/new-york-labor-didnt-shrink-confronting-amazon
-- via my feedly newsfeed
https://prospect.org/article/new-york-labor-didnt-shrink-confronting-amazon
Add note
AP Photo/Bebeto Matthews
New York City Councilman Jimmy Van Bramer, second from left, speaks during a press conference in Gordon Triangle Park in the Queens borough of New York, following Amazon's announcement it would abandon its proposed headquarters for the area.
Ever since Amazon's plans to open a second headquarters in New York were announced last November, two things have become clear about organized labor and Amazon. First, labor is eager to unionize Amazon, or at least parts of Amazon, a fiercely anti-union company that doesn't have a single unionized facility in the United States—none of its "fulfillment center" workers, Whole Foods workers, or drivers are unionized. Second, labor is seriously divided about how to achieve its ambitious goal of unionizing Amazon.
Days after Governor Andrew Cuomo and Mayor Bill de Blasio trumpeted the deal in which Amazon promised to create 25,000 jobs in Queens and would receive $3 billion in subsidies, New York's building trades unions announced that Amazon had given its blessing to letting the project's construction work, involving an estimated 5,000 workers, be unionized. Moreover, Local 32BJ of the Service Employees International Union said that Amazon and the developers on the new project had agreed that the janitors and security guards who worked at Amazon's new headquarters would be unionized.
Even as the building trades unions and Local 32BJ openly supported Amazon's plans for New York, however, many New York progressives railed against the deal because of Amazon's anti-union reputation, the $3 billion subsidy and fears that Amazon's arrival would push up New York's already high rents.
But many labor leaders wanted more from Amazon than what the construction trades and Local 32BJ were getting.
These labor leaders noted that the unionized construction workers and janitors would not be directly employed by Amazon, but by contractors and developers working with Amazon. The AFL-CIO, the Teamsters and the Retail, Wholesale, and Department Store Union (RWDSU) were intent on using Amazon's New York ambitions as a way to get a union inside Amazon. For too long, union leaders argued, major corporations like Amazon have allowed a little unionization on their fringes—for instance, among janitors and construction workers—but not in their core operations.
As one union strategist put it, "The labor movement had to decide: Are we happy to be a movement on the margins, or do we want to fight for the real pie? … Do we stay in the box or do we fight for the real economic core of the labor market?" The AFL-CIO, Teamsters and RWDSU concluded that with Amazon growing so large and so central to the nation's economy, it was time to confront the giant.
"We had a broad message that if Amazon wanted the largesse of New York, if they wanted the subsidies, they first needed to respect workers and respect communities," said Stuart Appelbaum, the RWDSU's president. "We looked at how Amazon treats workers all over the world, and it was unacceptable. We looked at the health and safety problems when you go to work at Amazon, and it wasn't good. We talked about how the International Trade Union Confederation named Jeff Bezos [Amazon's founder] one of the worst bosses in the world."
The AFL-CIO, Teamsters and RWDSU called on Amazon to agree to neutrality to help unions organize the 2,500 workers at Amazon's new fulfillment center in Staten Island. Appelbaum voiced confidence that neutrality (a commitment not to oppose unionization) would enable labor to organize the Staten Island warehouse and that this would lead to unionization at other Amazon facilities. As a model, Appelbaum pointed to what his union had done with Zara. The retail clothing chain had agreed to neutrality at one New York store, and once the RWDSU unionized that store, it used that as a launching pad to unionize all eight Zara stores in New York. Similarly, that union used neutrality to organize more than 1,500 workers at 17 H&M stores in the New York area.
"Everyone knows the history of Amazon across the world, their labor relations and how they treat their workers—it's notorious," said George Miranda, the top Teamsters official in New York. "Now that they were coming into New York, the most progressive, union-heavy state, we were looking for neutrality where they would not fight unionization."
At a tense City Council hearing on January 30, Brian Huseman, Amazon's vice president of public policy, was asked whether his company would agree to neutrality. Huseman said no. Jimmy Van Bramer, the City Councilman who represents Long Island City, where the Amazon headquarters would be located, responded, "Shame on you,"and "it's a union-busting deal from the beginning."
As the AFL-CIO and unions sought neutrality, sharp divisions emerged within labor. The RWDSU had urged Local 32BJ not to openly endorse the Amazon deal to help keep the heat on the company, but 32BJ said that it was too late, that it already had a deal. Local 32BJ's leaders worried that the other unions' demand for neutrality—and its timing—could fan the anti-Amazon flames just when Amazon officials were hinting they might have second thoughts about opening a headquarters in a city where they didn't feel welcome.
Last Wednesday, Appelbaum, Miranda and Mario Cilento, the president of the New York State AFL-CIO, met in Governor Cuomo's office with four top Amazon executives. But Cuomo, one labor leader said, made clear that "neutrality isn't even on the table." Nonetheless, the union leaders and Amazon executives then came close to agreeing on a four-point plan that might be called "near neutrality." The points were no company hostility, a fair election process, a pledge not to retaliate against union supporters, and allowing union organizers some access to the Staten Island warehouse to communicate with workers. (Under a 1992 Supreme Court ruling, employers have the right to prohibit union organizers from setting foot on company property.)
Appelbaum said the four-point plan meant "the company would still be able to say, 'You don't need a union. We don't think you need a third party.' But they wouldn't be able to say, 'This terrible union, all they want is to take you money.' But none of that was defined."
Appelbaum continued, "We all agreed to have our attorneys, our wordsmiths, flesh out the concepts." The Teamsters' Miranda added, "It was a good conversation, it wasn't antagonistic. … There was, 'no, we're not doing this.'"
The labor leaders left thinking they were near a deal. So they were stunned to learn hours later that Amazon had pulled the plug on New York. Mayor de Blasio said, "Out of nowhere, they took their ball and went home."
"I was totally surprised," said the Teamsters' Miranda. "I can only surmise that the boss [Jeff Bezos] decided he had enough. I was disappointed because we lost a lot of jobs, a lot of good jobs. All we were asking for was for people in Staten Island to have an opportunity to decide whether to be unionized. It would have been a win-win for everyone."
It's not clear why Amazon scrapped its New York plans. Some concluded that Amazon, facing a wave of resistance from Alexandria Ocasio-Cortez, many city and state lawmakers and community groups, feared that it would face years of opposition and complaints, even though polls showed that most New Yorkers approved the Amazon deal. Some said that Amazon pulled out because it didn't want to grant labor the least toehold or even a watered-down form or neutrality for just one fulfillment center.
In a statement, Amazon said, "While polls show that 70 percent of New Yorkers support our plans and investment, a number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward."
Hector Figueroa, Local 32BJ's president, said, "This was a really a lost opportunity from the labor perspective. ... I think people overplayed their hand and they [Amazon] are now gone." Figueroa clearly regretted Amazon's withdrawal; he said his union had deals in the works to have unionized janitors and security guards at Amazon facilities in Queens, Virginia, and Seattle that could have meant over 2,000 well-paid unionized positions.
Figueroa wrote an op-ed for The New York Daily News, criticizing the left for chasing Amazon away. Amazon, he wrote, was "coming to the most progressive, union-friendly city and high-tax state in the country," and "New York was showing the world that strong unions, smart regulation and progressive taxation are not an impediment to growth." Figueroa added that "opposition from a few progressive organizations—many of which I have historically considered allies—created enough controversy to make Amazon abandon the project."
He asked whether Amazon's decision to reject New York "for expanded operations in Virginia and Tennessee" and other states would "help Amazon workers seeking to organize?"
"Not one bit," he wrote "Does it hurt those efforts? Probably."
Figueroa argued that rather than risk chasing away Amazon before it opened its headquarters, it would have been smarter to let Amazon set up shop in progressive, pro-union New York and then mount a big unionization drive and demand neutrality and more, perhaps by staging mass demonstrations at Amazon's New York headquarters.
Appelbaum sharply questioned Figueroa's suggested strategy. "The point about Amazon being in a pro-union environment would make it more likely that Amazon would be organized is nonsense," Appelbaum said. "Germany is a more pro-union environment; and it [Amazon] has been viciously anti-union there, even refusing to comply with laws requiring it to negotiate with Ver.di [one of Germany's biggest unions]. And Ver.di is a very strong union."
A top labor leader in Washington said Amazon was making a "stupid business decision" by running away from New York over some progressives' complaints and a demand for neutrality when "New York is the greatest collection of human capital in the world."
Despite their differences over strategy regarding Amazon, Figueroa and Appelbaum vigorously agreed on the continued importance of seeking to unionize Amazon. Figueroa said, "I'm hoping that the desire to organize Amazon—which is absolutely necessary for the labor movement—is backed by the planning and level of resources needed."
Appelbaum said, "Amazon is transforming industry after industry. What we're talking about here is the future world of work. The Bezos model is to treat employees as expendable, to dehumanize and mistreat them. Because Amazon is transforming so many industries, we cannot accept that it's allowed to continue to operate as an anti-union, non-union company."
-- via my feedly newsfeed
Progressives need to ignore the noise and stay ambitious [feedly]
Progressives need to ignore the noise and stay ambitious
https://www.washingtonpost.com/outlook/2019/02/14/progressives-need-ignore-noise-stay-ambitious/
-- via my feedly newsfeed
https://www.washingtonpost.com/outlook/2019/02/14/progressives-need-ignore-noise-stay-ambitious/
The New Green Deal is a 14-page document that exists about 40,000 feet up in terms of abstraction. It will not be passed by this Congress. That's not just because of the political divide but also because it is not legislation: It's a set of broad ideas — good ones, from my perspective — to reduce carbon emissions while creating good jobs through investment in green industry.
The Green New Deal isn't the only such proposal. Sen. Elizabeth Warren's wealth tax, Sen. Bernie Sanders's estate tax, Rep. Alexandria Ocasio-Cortez's 70 percent income tax over $10 million, Rep. John B. Larson's Social Security expansion, jobs programs from Sen. Cory Booker and Sen. Ron Wyden, universal health coverage plans from every Democratic senator running for president (which is itself a sizable subset of the party's caucus). None of these ideas will become law through this Congress because that's just the political reality of divided government.
So what's the point of offering them? All these proposals elevate vital alternatives to the status quo, on everything from the economy to the environment to racial justice to the basic functions of our democracy. Those of us who agree with the need for changes can, and should, debate the best alternatives. But we must be careful not to let those debates diminish or shut down their urgency.
One challenge we face is that it's harder than it should be to recognize the urgency of the moment. Unemployment is 4 percent and, at the national level, job and wage growth appear solid.
But it doesn't take much to see the cracks in the veneer.
As Kathleen Bryant and I have described, during the 35-day government shutdown, workers with middle-class jobs were seen to be living paycheck-to-paycheck. A 2017 survey by the Federal Reserve found that 4 in 10 adults would be unable to meet an unexpected expense of $400 without "selling something or borrowing money." The scientific community is in wide agreement that the impact of global warming is already being felt in the increased volatility of temperatures and intensity of storms. Wealth concentration is close to levels last seen in the late 1920s, and need I remind you: That didn't end well.
The deterioration of democratic institutions should be setting off daily alarm bells, but instead, we feel like things must be working, because Congress appears to have agreed on Monday not to shut the government down on Friday (though the president had yet to agree). Talk about lowering the bar!
Thanks in no small part to an activist, diverse progressive base — populated by young voters anxious to get out of the center-left box, people of color, immigrants and a few dinosaurs like myself — the new Democratic majority is reflecting this urgency and offering up ideas to address the pressing challenges we face.
Their actions have triggered a typology of responses.
There's the technocratic response (one with which I'm intimately familiar). Policy wonks, even including those favorably disposed toward these sorts of ideas, point out that taxing wealth demands valuations with which the IRS is unfamiliar. (Warren's plan recognizes and addresses this challenge.) We note that guaranteeing a lot of people good government jobs would require a massive extension of administrative capacity by a barely functional federal sector. We point out that despite some assumptions embedded in certain Medicare-for-all plans, private insurers aren't about to "go gently into that good night."
There's the histrionic "socialist!" response, one born of fear that progressives are finally catching onto the game played by the oligarchs and the politicians they fund. Watch this CNBC clip of a debate I just had with anti-tax lobbyist Grover Norquist. When such people claim that progressive ideas threaten to turn the U.S. into the Weimar Republic, you know they're scared, and for good reason. Warren et al. really are coming after their clients!
Finally, there's the response that the new Democrats are "overreaching" and thus undermining their potential success. This is a political argument, based on the belief that there exists a significant, heretofore largely silent, majority of the electorate that might lean toward Democrats but will be scared off by an ambitious progressive agenda.
From where I sit, many of the technocratic challenges are off point, insisting on a level of specificity that is unwarranted at this early stage, as when David Brooks asks about the Green New Deal, "Exactly which agency would inspect and oversee the renovation of every building in America?" Obviously, the fear mongering about socialism is just that; it should be quickly dismissed out of hand.
The question of political overreaching may be a good one, though. My theory of the case is there's a significant swath of the electorate that feels the urgency of the moment — that agrees that when it comes to the toxic combination of wealth concentration and money in politics, climate change and government functionality, it's well past time for nibbling around the edges. They're not worried about precisely which agency will implement future plans. They're worried about the existence of a viable future.
So that means the new Democrats face an interesting challenge: They realize they were sent here to signal that they get the urgency of the moment, and that they aspire to rebuild the institutions necessary to meet the challenges we face. But they must do that under the scrutiny of policy wonks, vicious opponents and the constraints of a complex political process.
I think they're doing a great job so far. The noise will only get louder, but I urge them to block it out and just keep on pushing ahead.
-- via my feedly newsfeed
Jobs for the Future: Protecting the Labour Market in the Face of the AI Revolution [feedly]
Jobs for the Future: Protecting the Labour Market in the Face of the AI Revolution
https://www.globalpolicyjournal.com/blog/13/02/2019/jobs-future-protecting-labour-market-face-ai-revolution
-- via my feedly newsfeed
https://www.globalpolicyjournal.com/blog/13/02/2019/jobs-future-protecting-labour-market-face-ai-revolution
Technological progress, particularly the development of artificial intelligence (AI), has the potential to drastically change our societies and our labour markets. Whilst AI could make a large proportion of jobs redundant, it also offers opportunities to reshape labour markets and improve the ways in which we work. However, we still know very little about the impact AI will actually have on labour markets – predictions in the academic literature vary wildly, with some claiming that 47% of US jobs are at risk of automation (1), while other work arrives at a prediction of a comparatively small 9% (2).
This is why our research set out to review the literature on labour market effects of automation and AI, critically evaluating the assumptions behind it and the paradigms that shape different predictions. We found that while much of the literature uses highly rigorous methods to estimate the labour market impact of AI, authors end up with drastically different conclusions because there are simply many things we do not yet know about how automation will affect labour markets. These include how the process of automation will proceed in countries with different labour market structures, how long it will take for AI to overcome certain "bottlenecks" such as social intelligence and creativity, and whether AI will be able to replace some occupations entirely, or merely certain tasks within occupations. Moreover, a holistic assessment should estimate not only rates of job replacement, but also the potential for job creation in new sectors and occupations made possible by technological progress, further complicating matters.
While we conclude that cautious estimates may overall be more appropriate, there is no denying that AI has the potential to fundamentally transform our labour markets, and a number of valuable conclusions can be drawn from the literature. AI could disrupt labour markets significantly, and the burden of adjustment will fall mainly on workers in low-skilled, low-wage jobs that will be most easily replaced by technology. Yet the focus on job destruction should not stop us from recognizing the possibility of job creation through new technologies, and it is imperative for policymakers to harness this potential. Finally, a focus on the employment impact of AI as a "numbers game" is too narrow – technology will have large consequences for the ways in which we work, and if the challenges it poses are met, could inject greater flexibility and opportunity into labour markets.
Focusing on the UK policy context, we argue that so far AI has been largely seen as an investment opportunity, with comparatively little attention paid to its potentially disruptive socioeconomic impact. Drawing on international examples, our white paper identifies a number of policy recommendations to address the challenges posed by automation, focusing on labour market and education policy:
1) Assigning Responsibility: Dealing with AI requires coordinated government action across a range of different departments affected, necessitating the establishment of an "AI Tsar" who can draw together different government bodies for an effective and coordinated response.
2) Education and Training: While the UK government has identified investment in STEM education as a priority, more can be done to encourage take-up of STEM subjects among pupils, such as closer embedding of career advice in schools. Moreover, more investment is needed to address the inequitable socio-economic take-up of STEM education. Crucially, however, an exclusive focus on STEM education neglects the fact that collaborative and creative skills remain one of the fields in which humans are expected to retain a comparative advantage over technology in the medium term, necessitating a focus on take-up of these types of skills. We recommend a variety of measures, including the bridging of gaps between the arts and sciences in schools, and raising the profile of caring work as a career through improving its economic and social status.
3) Job Quality: The disruption to labour markets caused by technological progress raises concerns over job quality, and it is imperative that the government smooth increasingly frequent transitions between jobs and rethink a social security system built on the assumption of continuous careers over people's working lives. This necessitates revisiting the incentive structures linked to unemployment support and anticipating effects of longer transitions on pensions and savings, as well as a particular focus on raising job quality in growth sectors such as care work. Moreover, we recommend wider consultation on and greater employee engagement in the improvement of working conditions.
4) Skills and Retraining: The government needs to take action to ensure that workers can update their skills throughout their working lives. Measures that can be taken to make this possible include greater investment in lifelong learning, creating incentives for employers and private contractors to run training programmes, ensuring that necessary infrastructure such as broadband coverage is in place to smooth the transition, and increasing the focus of sanctioning systems on matching people to long term employment.
5) Sharing the Gains Fairly: While the measures outlined can mitigate the potential negative socio-economic consequences of automation, low-skilled and low-waged workers remain most likely to suffer during the transition. Several measures to ease this burden could be explored such as a "robot tax" or, through small-scale trials, a universal basic income.
-- via my feedly newsfeed
The irrelevant Independent Group [feedly]
My reaction to this is to find Ben Friedman's The Moral Consequences of Economic Growth ASAP and read it. Based on this report (in the context of the UK/EU Brexit Crisis) it confirms a key feature of Karl Marx's philosophical approach to economics. Namely, that objective is primary to subjective, that the development of capitalism -- the circulation of commodities and capital -- is AN OBJECTIVE FORCE, not unlike the wind, or the flow of a river. Why is this of interest? (I am not appealing to Marx as an 'authority'). However, when a billionaire chooses a billion $$ investment path that creates serious harm to others, is it the evil character of the billionaire that is responsible, or is it the force of the billion in capital (which is born in commercial growth and reproduces itself via growth) that wants profitable deployment and accepts no excuses? Is it bad billionaires--the subjective interpretation, or is capitalism failing? And if the latter, how serious a failure? (Feudalism "failed" for a thousand years, and it still hasn't completely disappeared-- there remain 26 monarchies.
The data is showing that the latter philosophical stance is a more serious guide to the connections between progress toward a progressive society and the boundaries imposed by capitalism in its current development..
An ancient Vietnamese proverb via Ho Chi Minh, and Jackson Browne, may encapsulate the answer: THE HAMMER SHAPES THE HAND.
The data is showing that the latter philosophical stance is a more serious guide to the connections between progress toward a progressive society and the boundaries imposed by capitalism in its current development..
An ancient Vietnamese proverb via Ho Chi Minh, and Jackson Browne, may encapsulate the answer: THE HAMMER SHAPES THE HAND.
https://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2019/02/the-irrelevant-independent-group.html
The Independent Group claims to value an "open, tolerant and respectful democratic society" and to oppose Brexit. It wills the ends, but not the means. It fails to see that Brexit and intolerance are the product of economic conditions, and is silent on what to do about those conditions. It looks therefore like a bunch of narcissists complaining that people are not like them whilst offering no real solutions.
As I've said many times, the key to understanding politics today is Ben Friedman's book, The Moral Consequences of Economic Growth, published in 2005. He shows that economic growth begets liberal attitudes and that stagnation breeds intolerance. Subsequent events vindicate him perfectly. As Thiemo Fetzer has shown, pro-Brexit attitudes are "strongly and causally associated with an individual's or an area's exposure to austerity." In a separate vein, Nick Crafts has blamed Brexit upon the banking crisis.
In this sense, economic stagnation is the cause of Brexit and of the turn away from the liberal values the IG claims to espouse. And this stagnation is still with us. Only today the ONS reported that productivity fell last year: this means it has risen only 0.2% a year since 2007 compared to 2.3% per year in the thirty years before then. Because of this, real wages are still below their pre-crisis peak.
The IG, however, is silent about this. Its statement (pdf) makes no mention of austerity or stagnation. In fact, pretty much its only substantive reference to the economy is to government's "responsibility to ensure the sound stewardship of taxpayer's money", which doesn't inspire hope of a firm rejection of austerity.
It claims that our politics is "broken", but is blind to the fact that capitalism is broken too, and that this is a major cause – perhaps the major cause – of our broken politics. Phil says the IG has "learned nothing, nothing since 2015." I'd question only the year here: it seems it has learned nothing since 2008.
Now, you might reply that it's unreasonable to expect a new political grouping to have detailed policies. True enough. The problem with the IG, though, isn't that it doesn't have solutions: it's that it doesn't even see a problem. There's a good debate to be had about how far capitalist stagnation can be fixed by fiscal and monetary policy alone, and how far it needs institutional change too. The IG shows no sign of entering this debate, though.
At least one of its members has form here. Last year Chris Leslie wrote a paper, Centre Ground (pdf), which also largely ignored the financial crisis. I criticizedhim then for failing to see that the crisis necessitated a rethinking of the relationship between the state and the private sector. He shows no sign of learning this lesson: his claim to believe in "evidence-based" policy-making is a sign of astounding lack of self-awareness.
Herein, for me, lies the great virtue of Corbyn (perhaps his only virtue). He at least sees the problem, that the economy is broken and that the Left needs new policies for new times – just as Blair saw this a generation ago. The IG, by contrast, is stuck in a 1990s timewarp, unaware that the world has changed.
Granted, Corbyn might be right in the same way that a stopped clock is sometimes right. For me, this is unimportant. What matters is that we have something like the right policy ideas for our changed economic times. I can't say how much the IG will affect politics. But I do know that whilst they have no awareness of our economic problem, they will be an intellectual irrelevance.
-- via my feedly newsfeed
Subscribe to:
Posts (Atom)