Wednesday, December 20, 2017

#SaveTPS: A Working-Class Struggle [feedly]

#SaveTPS: A Working-Class Struggle
https://workingclassstudies.wordpress.com/2017/12/18/savetps-a-working-class-struggle/

Jessica's TPS work permit cards

By the time the Deferred Action for Childhood Arrivals (DACA) was announced in 2014, I had already benefited from another immigration relief program: Temporary Protected Status (TPS). In January and February 2001, my birth country of El Salvador experienced two earthquakes – a month apart from each other – that utterly devastated every aspect of life in Salvadoran Society. In order to help El Salvador reconstruct and get back on its feet, the United States extended TPS status to undocumented Salvadorans immigrants already in the U.S. I was one of them.  Created by Congress in the Immigration Act of 1990, TPS was meant for people from countries going through environmental disaster and other extraordinary and temporary conditions or confronting armed conflict. Currently, the program is administered by the U.S. Department of Homeland Security (DHS).

In the past two months, TPS has come under attack from the Trump Administration. In November 2017, DHS terminated the program for Haiti, and four months later it extended that terrible decision to TPS-protected immigrants from Nicaragua and Honduras. Starting January 2019, an estimated 50,000 Haitians, 57,000 Hondurans, and 2,550 Nicaraguans with TPS status will become undocumented. They will be expected to leave the U.S. Furthermore, TPS was allowed to expire for three black-majority countries: Guinea, Liberia, and Sierra Leone earlier this year. None of them were granted a renewal period as the DHS had done in previous years.

From a working-class perspective, terminating TPS would be catastrophic for workers and families. The Center for Migration Studies (CMS) has estimated that 81 to 88 percent of TPS-protected immigrants just from El Salvador, Honduras, and Haiti participate in the labor market – well above the rate for the total US population at 63 percent. Indeed, many TPS workers have been in the US for so long that they're now homeowners and entrepreneurs, and so they are very invested in their local economies. For example, Salvadorans with TPS must have continuously resided in the U.S. since the designation date of March 9, 2001 – that's more than a decade of working legally and paying taxes in the U.S. Furthermore, the Center for American Progress (CAP) calculates that the loss of TPS workers would cost employers $967 million in turnover and reduce America's GDP by $164 billion over a decade. Of course, working people represent more than just economic contributions, but you'd think that reports like these would influence rational policymakers. But this administration operates with little regard to facts, policy briefs by experts, or peer-reviewed research. Instead, it responds to the worst instincts in our politics, even excusing and allying with white supremacy. This is not rational. It is shamelessly racist.

Rally to Defend Dream Act and TPS on December 6, 2017 in Washington, D.C.. Image from DMV Sanctuary Network

TPS is a racial and environmental justice issue. The program's primary beneficiaries are Black, LatinX, Asian, and Middle Eastern. We come from Haiti, Syria, Nepal, Honduras, Yemen, Sierra Leone, El Salvador, Somalia, Guinea, South Sudan, Nicaragua, Liberia, and Sudan. All of these nations have historically been at the mercy of imperialist policies – by the U.S. and other countries — that pillage natural resources and do little to promote the well-being of residents, most of whom are people of color. For these countries, TPS was granted on account of either civil strife (usually the reason for Middle Eastern and African countries) and natural disasters (usually the reason for countries in Latin America and the Caribbean) thereby helping these countries rebuild what US Imperialism has destroyed. Thus, TPS is a form of humanitarian relief for civil war refugees and natural disaster victims that is also a form of reparations to formerly colonized working people of the world.

Similar to DACA, TPS beneficiaries like me receive provisional protection against deportation and permission to work in the United States for a limited period of time –no less than 6 months and no more than 18. In order to be eligible, immigrants from TPS-designated countries must be physically present in the U.S. on the date on which the program is designated for their nationality and must continue to reside in the U.S. In addition, the program does not grant permanent legal status in the United States, nor are TPS beneficiaries eligible to apply for permanent residence or for U.S. citizenship. In other words, working-class immigrants can be workers, but not residents let alone citizens.

My TPS work permit has provided me with many opportunities to pursue the American Dream by making it possible for me to join the workforce. It also allowed for me to file taxes – something that I've been doing since I was 17 years old. Since attaining full-time employment, I have been saving to purchase a home in Virginia for my mother. This is my greatest dream – the chance to honor my mother's sacrifice by providing her with a home that she can call her own. Throughout my time living in the United States, I had never thought I'd be faced with the possibility of giving up this dream. Yet all of this changed on November 9, 2016. The morning after, I felt a fear unlike any I had felt before. The right side of my chest hurt, my stomach felt strange. I was hungry, but couldn't bring myself to eat. I could just think of one thing: if Donald Trump's DHS Secretary does not approve our renewals, then we'd potentially be forced to return El Salvador. As of today, I have 81 days left on my TPS work permit if the designation isn't renewed by DHS.

Since the beginning of December, a number of actions have taken place in Capitol Hill to urge members of Congress to save TPS and pass a Clean Dream Act. The deadline for Congress to act is December 22 – the date Congress adjourns for the holidays. The urgency has escalated even more after Congress failed to include protections for immigrant youth in their spending bill fix. If Congress doesn't act soon, then a number of Dreamers and TPS beneficiaries await deportation and an inhumane removal experience from US society.

As we have seen in recent years, more and more of our working-class brothers and sisters from the global south have had to flee civil war, genocide, economic exploitation, and the environmental effects of climate change – and that will almost certainly continue. Efforts have already begun to eliminate other venues for legal immigration, and the gradual termination of TPS is unlikely to be the end of the assault on immigrants under this Administration. If naturalized and documented allies do not step up to demand a comprehensive immigration reform that makes it easier for all workers, political asylees, climate change refugees, and persecuted people to pursue new beginnings in the United States, then we will forsake our responsibility to whose labor provided the capital to build the economies of developed nations.

Jessica F. Chilin-Hernández

Jessica F. Chilin-Hernández serves as Assistant Director of the Kalmanovitz Initiative for Labor and the Working Poor at Georgetown University. She is originally from San Salvador, El Salvador.


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How Might Restricting Immigration Affect Social Security's Finances? [feedly]

How Might Restricting Immigration Affect Social Security's Finances?
https://www.urban.org/research/publication/how-might-restricting-immigration-affect-social-securitys-finances

Immigration helps finance Social Security by expanding the labor force and increasing payroll tax revenue, which largely funds the program. A recently introduced congressional bill would reduce lawful permanent immigration by about 50 percent. This brief shows that this bill, if enacted, would worsen the already strained finances of the Social Security trust funds. Program revenues would fall faster than expenditures, raising the present value of Social Security's unfunded future obligations by $1.5 trillion, or 13 percent, over the next 75 years. Restricting immigration would require additional Social Security benefit cuts or tax increases to balance the system.

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Stiglitz: The Global Economy’s Risky Recovery [feedly]

The Global Economy's Risky Recovery
https://www.project-syndicate.org/onpoint/global-economy-risky-recovery-in-2018-by-joseph-e--stiglitz-2017-12

 

As the advanced economies' post-2008 recession fades into the distant past, global prospects for 2018 look a little better than in 2017. The shift from fiscal austerity to a more stimulative stance will reduce the need for extreme monetary policies, which almost surely have had adverse effects not just on financial markets but also on the real economy.

NEW YORK – A year ago, I predicted that the most distinctive aspect of 2017 would be uncertainty, fueled by, among other things, Donald Trump's election as president in the United States and the United Kingdom's vote to leave the European Union. The only certainty, it seemed, was uncertainty – and that the future could become a very messy place. 

Throughout 2017, Trump proved every bit as bombastic and erratic as expected. Anyone who paid attention only to his incessant tweets might think the US was teetering between a trade war and a nuclear war. Trump would insult Sweden one day, Australia the next, and then the EU – and then support neo-Nazis at home. And the members of his plutocratic cabinet rival one another in terms of conflicts of interest, incompetence, and sheer nastiness.

There have been some worrisome regulatory rollbacks, especially concerning environmental protection, not to mention the many hate-driven acts that Trump's bigotry may have encouraged. But, so far, the combination of America's institutions and the Trump administration's incompetence has meant that there is (fortunately) a yawning gap between the president's ugly campaign rhetoric and what he has actually accomplished.

Most important for the global economy, there has been no trade war. Using the exchange rate between Mexico and the US as a barometer, fears for the future of the North American Free Trade Agreement have largely subsided, even as trade negotiations have stalled. Yet the Trump roller-coaster never ends: 2018 may be the year that the hand grenade Trump has thrown into the global economic order finally explodes.

Some point to the US stock market's record highs as evidence of some Trumpian economic miracle. I take it partly as evidence that the decade-long recovery from the Great Recession is finally taking hold. Every downturn – even the deepest – eventually comes to an end; and Trump was lucky to be in the White House to benefit from the work of his predecessor in setting the scene.

But I also take it as evidence of market participants' short-sightedness, owing to their exuberance at potential tax cuts and the money that might once again flow to Wall Street, if only the world of 2007 could be restored. They ignore what followed in 2008 – the worst downturn in three quarters of a century – and the deficits and growing inequality that previous tax cuts for the super rich have brought. 

They give short shrift to the deglobalization risks posed by Trump's protectionism. And they don't see that if Trump's debt-financed tax cuts are enacted, the Fed will raise interest rates, possibly setting off a market correction.

In other words, the market is once again showing its proclivity for short-term thinking and pure greed. None of this bodes well for America's long-term economic performance; and it suggests that while 2018 is likely to be a better year than 2017, there are large risks on the horizon.

It's a similar picture in Europe. The UK's decision to leave the EU didn't have the jolting economic effect that those who opposed it anticipated, largely because of the pound's depreciation. But it has become increasingly clear that Prime Minister Theresa May's government has no clear view about how to manage the UK's withdrawal, or about the country's post-Brexit relationship with the EU.

There are two further potential hazards for Europe. One risk is that heavily indebted countries, such as Italy, will find it difficult to avoid crisis once interest rates return to more normal levels, as they likely will. After all, is it really possible for the eurozone to maintain record-low rates for the foreseeable future, even as US rates increase?

Hungary and Poland represent a more existential threat to Europe. The EU is more than just an economic arrangement of convenience. It represents a union of countries with a commitment to basic democratic values – the very values that the Hungarian and Polish governments now disparage.

The EU is being tested, and there are well-founded fears that it will be found wanting. The effects of these political tests on next year's economic performance may be small, but the long-term risks are clear and daunting.

On the other side of the world, Chinese President Xi Jinping's Belt and Road Initiative is changing Eurasia's economic geography, putting China at the center, and providing an important stimulus for region-wide growth. But China must confront many challenges as it undergoes a complicated transition from export-led growth to growth driven by domestic demand, from a manufacturing economy to a service-based economy, and from a rural to an urban society. The population is aging rapidly. Economic growth has slowed markedly. Inequality is by some accounts almost as severe as in the US. And environmental degradation poses a growing threat to human health and welfare.

China's unprecedented economic success over the past four decades has been partly based on a system whereby broad consultation and consensus-building within the Communist Party and the Chinese state underpinned each set of reforms. Will Xi's concentration of power work well in an economy that has grown in size and complexity? A system of centralized command and control is incompatible with a financial market as large and complex as China's; at the same time, we know where insufficiently regulated financial markets can lead an economy.

But these are all essentially long-term risks. For 2018, the safe bet is that China will manage its way, albeit with slightly slower growth.

In short, as the advanced economies' post-2008 recession fades into the distant past, global prospects for 2018 look a little better than in 2017. The shift from fiscal austerity to a more stimulative stance in both Europe and the US will reduce the need for extreme monetary policies, which almost surely have had distortionary effects not just on financial markets but also on the real economy.

But the concentration of power in China, the eurozone's failure (thus far) to reform its flawed structure, and, most important, Trump's contempt for the international rule of law, his rejection of US global leadership, and the damage he has caused to democracy's standing all pose deeper risks. Indeed, they threaten not just to hurt the global economy, but also to slow what, until recently, had seemed to be an inevitable march toward greater democracy worldwide. We should not let short-run success lull us into complacency.

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Must-Read : Martin Wolf writes a better version of my appeals than I have managed to: Martin Wolf : Inequality is a thr... [feedly]

Must-Read : Martin Wolf writes a better version of my appeals than I have managed to: Martin Wolf : Inequality is a thr...
http://www.bradford-delong.com/2017/12/must-read-martin-wolf-writes-a-better-version-of-my-appealshttpwwwbradford-delongcom201712six-tax-reform-rela.html

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Must-Read: Martin Wolf writes a better version of my appeals than I have managed to: Martin WolfInequality is a threat to our democracies: "Between 1980 and 2016, the top 1 per cent captured 28 per cent of the aggregate increase in real incomes in the US, Canada and western Europe, while the bottom 50 per cent captured just 9 per cent of it...

...But these aggregates conceal huge differences: in western Europe, the top 1 per cent captured "only" as much as the bottom 51 per cent. In North America, however, the top 1 per cent captured as much as the bottom 88 per cent....

After agriculture (and the agrarian state) was invented, elites were amazingly successful in extracting all the surplus the economy created. The limit on predation was set by the need to let the producers survive. Remarkably, many desperately poor agrarian societies approached this limit....

In the 20th century... when revolutionary regimes softened (or collapsed) or the exigencies of war faded from memory, quite similar processes to those of the old agrarian states took hold. Vastly wealthy new elites emerged, gained political power, and again used it for their own ends. Those who doubt this should look closely at the politics and economics of the tax bill now going through the US Congress. The implication of this parallel would be that, barring some catastrophic event, we are now on the way back to ever-rising inequality....

The big question,,, is whether the pressures for inequality will go on rising and the willingness to offset them generally decline. On the former, it is quite hard to be optimistic. The market value of the work of relatively unskilled people in high-income countries seems very unlikely to rise. On the latter, one can point, optimistically, to a desire to enjoy some degree of social harmony and the material abundance of modern economies, as reasons to believe the wealthy might be prepared to share their abundance.... [But] elites may become more determined to seize whatever they can for themselves. If so, that would augur badly, not just for social peace, but even for the survival of the stable universal-suffrage democracies that emerged in today's high-income countries in the 19th and 20th centuries... "plutocratic populism"....

Mr Scheidel suggests that inequality is sure to rise. We must prove him wrong. If we fail to do so, soaring inequality might slay democracy, too, in the end.

A primal scream on taxes. And why the plan will likely send more, not less, jobs/investment abroad [feedly]

A primal scream on taxes. And why the plan will likely send more, not less, jobs/investment abroad
http://jaredbernsteinblog.com/a-primal-scream-on-taxes-and-why-the-plan-will-likely-send-more-not-less-jobsinvestment-abroad/

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First, I give a primal scream over at WaPo re the tax plan that may well be law by the time you read this.

Next, there's been a lot of writing, including my own, on the question of whether the plan further incentivizes or discourages offshoring of investment and jobs. I've thought so, for a number of reasons, and I'm increasingly convinced that's the case.

However, the writing on this is often quite technical and dense. So I was glad to see this WaPo piece break it down quite simply. Here are some of the main factors that I expect to juice the incentive of to offshore production, with my bold added.

First, a corporation would pay that global minimum tax only on profit above a "routine" rate of return on the tangible assets — such as factories — it has overseas. So the more equipment a corporation has in other countries, the more tax-free income it can earn. The legislation thus offers corporations "a perverse incentive" to shift assembly lines abroad, said Steve Rosenthal of the Tax Policy Center.

Second, the bill sets the "routine" return at 10 percent — far more generous than would typically be the case. Such allowances are normally fixed a couple of percentage points above risk-free Treasury yields, which are currently around 2.4 percent.

As a result, a U.S. corporation that builds a $100 million plant in another country and makes a foreign profit of $20 million would pay roughly $1 million in tax versus $4 million on the same profit if earned in the United States, said Rosenthal, who has been a tax lawyer for 25 years and drafted tax legislation as a staffer for the Joint Committee on Taxation.

Finally, the minimum levy would be calculated on a global average rather than for individual countries where a corporation operates. So a U.S. multinational could lower its tax bill by shifting profit from U.S. locations to tax havens such as the Cayman Islands.

Simply put, the more factories you build abroad, the more you can cut your tax bill. They set the non-taxable foreign profits high enough that even with the lower rate at home, there's still a big incentive to produce abroad. And as long as you book some of your profits in non-tax-haven countries, you can send the rest of them to bask on the beach in the Caymen's.

For a deeper dive, see Gene Sperling, Brad Setser, Kim Clausing.

Why is the other side–the folks who claim the plan will increase onshoring/bringing foreign earnings back home–wrong?

First, some profit repatriation is sure to occur, though there's no reason to expect it to flow into investment and jobs here as opposed to share buybacks and dividend payouts. That's the track record, and its likelihood is significantly boosted in this repatriation round as firms are already sitting on more than enough capital to invest and expand if that's what they wanted to do.

But the main analytic mistake I hear folks making is the use of the wrong delta. That is, they're looking at the change in the statutory corporate rate–35-21 percent, a big 14 point drop–and keying their predicted response off that. But the true delta, especially for multinationals, many of whom are already paying effective rates well below 21%, is a lot smaller than that. And, as Setser and others stress, the fact that they can still play all the transfer pricing games they've long perfected–booking income in low-tax havens; booking deductible costs in higher tax places–along with the three points above from the WaPo piece, suggest more, not less, offshoring.

Trust me, I and others will be keeping a very close eye on this.

Paul Krugman: Republicans Despise the Working Class [feedly]

Paul Krugman: Republicans Despise the Working Class
http://economistsview.typepad.com/economistsview/2017/12/paul-krugman-republicans-despise-the-working-class.html

"Their disdain for ordinary working Americans as opposed to investors, heirs, and business owners runs so deep that they can't contain it":

Republicans Despise the Working Class, by Paul Krugman, NY Times: You can always count on Republicans to do two things: try to cut taxes for the rich and try to weaken the safety net for the poor and the middle class. ...
But ... something has been added to the mix. ...Republicans ... don't treat all Americans with a given income the same. Instead, their bill ... hugely privileges owners, whether of businesses or of financial assets, over those who simply work for a living. ...
The nonpartisan Tax Policy Center has evaluated the Senate bill, which the final bill is expected to resemble. It finds that the bill would reduce taxes on business owners, on average, about three times as much as it would reduce taxes on those whose primary source of income is wages or salaries. For highly paid workers, the gap would be even wider, as much as 10 to one. ...
If this sounds like bad policy, that's because it is. More than that, it opens the doors to an orgy of tax avoidance. ... We're pitting hastily devised legislation, drafted without hearings over the course of just a few days, against the cleverest lawyers and accountants money can buy. Which side do you think will win?
As a result, it's a good guess that the bill will increase the budget deficit far more than currently projected. ...
So why are they doing this? After all, the tax bill appears to be terrible politics as well as terrible policy. ... The ... public overwhelmingly disapproves of the current Republican plan.
But Republicans don't seem able to help themselves: Their disdain for ordinary working Americans as opposed to investors, heirs, and business owners runs so deep that they can't contain it.
When I realized the extent to which G.O.P. tax plans were going to favor business owners over ordinary workers, I found myself remembering what happened in 2012, when Eric Cantor — then the House majority leader — tried to celebrate Labor Day. He put out a tweet for the occasion that somehow failed to mention workers at all, instead praising those who have "built a business and earned their own success." ...
Cantor, a creature of the G.O.P. establishment if ever there was one, had so little respect for working Americans that he forgot to include them in a Labor Day message.
And now that disdain has been translated into legislation, in the form of a bill that treats anyone who works for someone else — that is, the vast majority of Americans — as a second-class citizen.

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By overturning Specialty Healthcare, the NLRB has made it harder for workers to organize [feedly]

By overturning Specialty Healthcare, the NLRB has made it harder for workers to organize
http://www.epi.org/blog/by-overturning-specialty-healthcare-the-nlrb-has-made-it-harder-for-workers-to-organize/

On Friday, the Trump administration's appointees to the National Labor Relations Board (NLRB) once again made it more difficult for workers to join together and form a union, by overturning the Board's standard for determining an appropriate bargaining unit, as established in 2011's Specialty Healthcare case.

Under the National Labor Relations Act, private-sector workers who wish to be represented by a union can petition the NRLB to hold a union election. Federal labor law gives the Board wide discretion to determine the appropriate "bargaining unit," the term for the group of workers that will vote in the election and will be represented by the union. In Specialty Healthcare, the Board established that once an appropriate unit of employees is identified based on the employees' "community of interest," an employer can only petition to add more employees to the unit if the employer can show the additional employees share an "overwhelming community of interest" with the workers who are already in the bargaining unit. This standard is important to prevent employers from attempting to manipulate or gerrymander the bargaining units in order to thwart their employees' union elections. The NLRB's standard for determining an appropriate bargaining unit in Specialty Healthcare has been unanimously upheld in all seven U.S. Courts of Appeals in which it has been challenged.

Since the NLRB issued its decision in Specialty Healthcare corporate special interests have assailed it as inviting the proliferation of "micro" units that will allow unions to form small pockets of unionized employees among an employer's workforces. However, data on the median size of bargaining units disproves the argument that the standard would lead to the proliferation of so-called "micro-units"—the median size of bargaining units has hardly changed since the Board issued its Specialty Healthcare decision in 2011.

Why then were the Chamber of Commerce and other corporate interest groups committed to doing away with the Specialty Healthcare standard? They simply want to make it easier for employers defeat an organizing campaign, by manipulating who is in a bargaining unit. By overturning this rule, the Trump administration has once again shown that it wants to make it harder for workers to organize and join unions.


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