Where Jobs Are Squeezed by Chinese Trade, Voters Seek Extremes
-- June Zaccone National Jobs for All Coalition http://www.njfac.org
Tuesday, April 26, 2016
[NJFAC] Where jobs have been destroyed by trade, people react politically
The paper referred to below is available at http://www.ddorn.net/papers/ADHM-PoliticalPolarization.pdf
Where Jobs Are Squeezed by Chinese Trade, Voters Seek Extremes
Friday, April 22, 2016
[NJFAC] Five Things You Should Know About Social Security
Five Things You Should Know About Social SecurityBy Frank Stricker April 12, 2016
Five bad ideas about Social Security and five better ones. And Social Security needs defending. It's disturbing to hear young people say that Social Security won't be around when they retire. But it's not just young people. I've heard older Americans--some of them getting SS benefits--claim that SS is dying. But they are wrong. If young and old knew the facts, they would be armed to defend SS against the Party of Bads and Stupids that wants to tear down SS. Here are common views and my responses.
1. My nephew Bob, a college senior, informs me: "Social Security is bankrupt. Everyone knows that."
Not so fast. After all, there's a $2.8 trillion surplus in the SS fund. But, it's true: by 2030, SS may be able to pay only 79% of expected benefits. Why? Wages have not grown much and that limits contributions. [And rising inequality has limited the share of wages taxed.] Higher unemployment during the Great Recession didn't help either. Finally, as more income shifts to the rich, less is taxed. Currently only the first $118,500 of wages are taxed. If you earned that much last year, you paid $7,347. So did Kobe Bryant and Donald Trump.
So SS financing uses regressive taxation. More on that later, but here it is important to add that SS benefits are mildly progressive. Benefits for poor and average earners replace a larger fraction of prior earnings than for the affluent.
So SS financing uses regressive taxation. More on that later, but here it is important to add that SS benefits are mildly progressive. Benefits for poor and average earners replace a larger fraction of prior earnings than for the affluent.
2. Sarah, my Wall Street banker cousin, says people need tax shelters. SS is so yesterday.
You should have something besides SS for your retirement. The average monthly benefit is only $1341. But when capitalists say we should save more, they don't seem to care that many people have nothing left after paying the bills. And many businesses don't contribute as much to employee tax shelters as they once put into old-style pension plans.
So SS is essential. It's more secure than private savings. Participation and taxation are compulsory for most employees; you don't have to think about adding to SS. And you can't raid your benefits as you can with tax shelters. Your freedom is limited; but it's for a good cause.
3. But Bob is still skeptical. If SS benefits are low and if SS financing is shaky, is SS really worth saving?
SS plusses outweigh the minuses. SS is a stable and rather conservative program. It has not missed a payout in eighty years. And it's efficient. Administrative costs are under 1% of revenues. That's less than private plans. SS pays 60 million people every month. After 9/11, checks were mailed to survivors three weeks after the attack on the World Trade Center.
Finally, while benefits can be quite low, many Americans are quite poor [and increasingly without guaranteed pensions], so SS lifts many people out of poverty. Benefits are 83% of the total income of poorest two-fifths of all households. Benefits are the total income of 42% of African-Americans 65 and over, 45% of Hispanics, and 33% of Asian-Americans.
SS makes older people less poor and a little more independent. Their children can worry less too. We forget how grim old-age used to be. To get a feel for that, watch Make Way for Tomorrow (1937).
4. Bob's mother, my sister Isobel, agrees that we should fix SS rather than scrap it. She's a good citizen and has studied reform proposals. Here's my take.
a. Scam chains. Some purported experts, often conservatives, want to cut the SS Cost of Living Allowance. They claim that seniors spend less than others and they have formulas to prove it. The formulas often have the word chain attached to them and look ever so scientific, but they are really a sneak attack on the elderly.
b. Privatize parts of SS. If financing is a problem, and if the current surplus doesn't earn much interest (funds must be invested in special treasury bills), wouldn't it be smart to let Wall Street wizards invest the surplus? On average stocks and bonds grow by 7% a year, and the wizards would surely get more.
Response: That's what they say. But values often fall. And really, should we trust Wall Street after the catastrophe they caused a few years ago. People who were ready to retire during the Great Recession found that their retirement funds had shrunk by as much 40%.
c. Raise the age of full-benefit retirement. Everyone's living longer.
Response: Yes, people are living longer, but the poor die earlier and get fewer years of benefits. Also, working longer is easier for the people with desk jobs like Republican leaders Paul Ryan and Kevin Brady who support this change. Raising the age is especially unfair to people with physically demanding, low-wage jobs.
d. Cut benefits to the affluent.
Response: Sounds good, but I worry about losing the idea that SS is a system into which everyone contributes and from which everyone gets something. If the affluent got less or nothing, they'd agitate to limit their contributions and they might attack SS as a welfare program. That could make it easier for the Party of Bads and Stupids to undermine SS.
People who support SS should encourage Americans to be proud of it. It is good that we take care of one another through our government. Computer guy John Doe in Oregon and his employer contribute 12.4% of wages every month so that Georgia retiree Alice Jefferson, who used to work at Wal-Mart, gets her monthly check. That's good.
5. Two Vital Reforms. We should raise minimum benefits so that fewer recipients are poor or nearly poor; and we should eliminate the ceiling on taxable income. The latter offers a simple solution to SS's fiscal shortage, but also, along with higher minimum payments, it would make America a little less unequal. Reforming SS is part of the broad campaign against inequality--a campaign that has made a remarkable start in minimum-wage movements around the country. [Reducing inequality and raising wages would help, too.]
Learn More. I encourage Bob and Sarah to learn more about SS, to engage family and friends on the topic, and to weigh in with their political representatives. There are hundreds of useful sources including good newspapers, the official site at ssa.gov, the Alliance for Retired Americans, socialsecurityworks.org, Economic Policy Institute at epi.org, strengthensocialsecurity.org., and www.heritage.org
[and njfac.org].
[and njfac.org].
Frank Stricker is Emeritus Professor of History, California State University, Dominguez Hills. He has written about poverty and has just finished American Unemployment: A New History, Explanations, Remedies.
[additions are mine. jz]
[additions are mine. jz]
-- June Zaccone National Jobs for All Coalition http://www.njfac.org
Tuesday, March 29, 2016
[NJFAC] Fight Poverty Through Full Employment: Dean Baker
How to Fight Poverty Through Full Employment
Dean Baker, 3/17/2106
One of the most effective ways to combat poverty among current and future generations is to maintain a full employment economy. The point should be straightforward: when the labor market is strong, or "tight," it offers increased employment opportunities for those at the bottom. Disadvantaged workers are not only more likely to find employment in a tight labor market, they are also in a better position to secure higher wages as employers are forced to compete for labor. This can allow millions of workers the opportunity to raise themselves and their families out of poverty.
We got a chance to see this story in practice in the boom of the late 1990s, when the unemployment rate fell to its lowest levels in almost three decades, settling at a year-round average of four percent in 2000, the peak year of the boom. In this period, wages rose rapidly at all points along the income distribution, with workers at the bottom of the ladder actually achieving the largest gains.
The same principle would apply today, with the gains of a tight labor market going disproportionately to the most disadvantaged. The unemployment rate for African-Americans is typically two to two-and-a-half times that of whites. This means if we can lower the unemployment rate for whites by one percentage point, it is likely that the unemployment rate for African-Americans will fall by two percentage points. For African-American teens, the ratio hovers near six to one, meaning that a one percentage point drop in the white unemployment rate is likely to be associated with a six percentage point drop in the unemployment rate for African-American teens.
....
The most obvious way to generate demand is with more government spending, ideally through public investment. This approach has the great advantage of creating more jobs today and making ourselves richer in the future. For example, spending to promote clean energy—whether in the form of research or subsidies for the use of solar and wind power—will lessen the damage that we do to the environment, leaving less harm for future generations to deal with. Spending on physical infrastructure and mass transit will speed transportation times and reduce gas use. Money for education will give us a better trained and more productive work force.
....
Finally, we can move towards full employment by reducing the supply of labor, specifically by lowering the average number of hours that people work. It used to be the case that workers took a portion of the benefits of productivity growth in the form of more leisure. While that has not been true in the United States to any great extent over the last four decades, workers in other wealthy countries have continued to see reductions in the length of the average work year and/or workweek.
Indeed, across Europe, four to six weeks of paid vacation annually is standard. Workers have paid sick days as well. By reducing the number of hours per worker, there is increased demand for more workers. This story explains how Germany managed to lower its unemployment rate in between 2008 and 2009 even though it experienced a more severe recession than did the United States. By promoting policies that spread work among more workers, the government can hope to create a tighter labor market, which will also give workers the bargaining power they need to obtain higher wages.
Although full employment is not the complete solution to poverty, reaching it would go a long way. It should also be an area of bipartisan agreement. After all, conservatives are supposed to like the idea of people working hard to lift themselves up. But they can only work hard if jobs are available, and they can only lift themselves up if their wages are just.
-- June Zaccone National Jobs for All Coalition http://www.njfac.org
Wednesday, March 23, 2016
[NJFAC] Another year, another increase in inequality
This report,, which you can download all of by clicking, shows how wage inequality is growing.
From: Economic Policy Institute [newsletter=epi.org@mail141.atl121.mcsv.net] on behalf of Economic Policy Institute [newsletter@epi.org]
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Marguerite
Marguerite
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Wednesday, March 9, 2016
[NJFAC] Is Bernomics Impossible?
Is Bernomics Impossible? March 9, 2016
You may be aware of the broohaha about Bernie Sanders' economic projections. (This debate is not about political possibilities; it's about whether the numbers make sense.) Bernie wants progressive taxation, Medicare for all, and a lot of federal spending. He wants rapid economic growth. Economist Gerald Friedman ran the numbers and said they made sense. James K. Galbraith agreed. But Paul Krugman and other mainstream economists, including three who directed Obama's Council of Economic Advisors (Alan Krueger, Austan Goolsbee, and Christina Romer) have attacked the Sanders' program as unrealistic and even dangerous. For example, they argue that we cannot grow the labor force as fast as Bernie wants to.
But what is the situation Americans confront today? We've had growth in jobs and incomes since the recession, but mostly anemic rates of economic growth and few gains for income equality. It is common knowledge that people in the lower 50% are still doing worse than before the recession. Poverty rates are high and there's a lot of hidden unemployment out there. Six million part-time workers want full-time jobs and cannot find them. Another twelve million people have no jobs but want one.
So millions of Americans have been left behind, and not just in the last few years. Wage stagnation is a forty-year problem. So why not propose really big spending with a left-liberal twist? Obama's stimulus program kept the world economy from falling into a Great Depression; but it was too small. In 1933-37, government spending helped to create 8 million jobs; but it did not end the Great Depression. But 1940-1945 was another story: giant spending increases and massive deficits wiped out unemployment. In our time, why not plan something adequate to the task? Start with a plan for five years of 5% economic growth and make it growth that adds good jobs.
Are the centrist economists who went after Bernie just too moderate, too "responsible?" I recall that Mr. Krueger used economic research to conclude that a $12 minimum wage was OK, but $15 would harm the economy. Something like that. In effect, he was saying that we could not lift people a little more, even to a sub-poverty annual income of $30,000.
Do Krugman, Krueger, and friends want to cure poverty and raise incomes for the lower 50%? Is so, what is their method? More free enterprise? It's rarely worked in the last forty years. How about interest rates even lower than they are now and more risky loans to homeowners? That brought the Great Recession. A little more government spending? Not good enough.
Why not a program that can actually do the job--something that can push poverty rates down for good and put wages permanently on the road to recovery? Bernie has a plan to do it. No one else does.
**************
There's plenty to read on the kerfuffle around Bernomics. You can easily find James K. Galbraith's brief defense, and here is a short piece by Kevin Drum: On Second Thought, Maybe Bernie Sanders' Growth Claims Aren't As Crazy As I Thought. The Sanders "Economic Plan" Controversy, by Dave Johnson and Chris Sturr, reviews the controversy and has more links than most of us will need.
Submitted by Frank Stricker. He has completed American Unemployment: A New History, Explanations, Remedies
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Tuesday, March 1, 2016
[NJFAC] State legislators speak out for higher-paying jobs
Two recent articles highlight the leadership of state legislators in speaking out for good jobs at living wages.
1) Legislator Feels the Grind of a Low-Wage Job , Sen Marilyn Moore, Hartford Courant, February 21, 2016.
Connecticut State Senator Marilyn Moore from Bridgeport, CT took a job as a seasonal retail store employee, to see what working conditions were like for low-wage retail workers. "…We all hear the stories, but I decided if I am going to propose legislation, I need to talk with authority and knowledge." She found the work exhausting and frustrating, and was never offered sufficient hours, or regular shifts so she could apply for a second job. Read Sen. Moore's op-ed
2) South Carolina's leading low-wage job creator? Uncle Sam, The State, February 29, 2016
In a in a letter to the editor , South Carolina State Rep. Wendell G. Gilliard points out that the "the U.S. government is the leading low-wage job creator in South Carolina, responsible for more than 30,000 poverty jobs that pay under $12 an hour, the federal poverty guideline for a family of four. That's more poverty jobs than than Wal-Mart and McDonald's combined."
The federal government contributes to low-wage private sector jobs through its contracts, loans and subsidies to low-wage private sector employers, Rep. Gilliard says.
Rep. Gilliard's letter cites a report from Good Jobs Nation, South Carolina's Largest Low Wage Job Creator: The Federal Contribution to Low-Wage Unemployment in the Palmetto State, building on a methodology developed by Demos in their 2013 report, Underwriting Bad Jobs. Good Jobs Nation is supported by national faith, labor and advocacy organizations including Change to Win, Interfaith Worker Justice, the Ecumenical Poverty Initiative, Progressive Congress, and the Campaign for America's Future.
A previous survey by the National Employment Law Project found that 91 percent of port truck drivers in Charleston who transport military cargo have trouble paying their bills even though they work 60 or more hours a week. Disturbingly, nearly all of the low-wage workers in the survey are African-Americans.
Posted by:
Chuck Bell, Vice-Chair
National Jobs for All Coalition
www.NJFAC.org
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Friday, February 26, 2016
[NJFAC] Black imprisonment effect on unemployment data
America has locked up so many black people it has warped our sense of reality, Guo, Wash. Post, 2/26/16
....
The most recent report puts the white unemployment rate at around 4.5 percent. The black unemployment rate? About 8.8 percent.
But the economic picture for black Americans is far worse than those statistics indicate. The unemployment rate only measures people who are both living at home and actively looking for a job. The hitch: A lot of black men aren't living at home and can't look for jobs — because they're behind bars.
Though there are nearly 1.6 million Americans in state or federal prison, their absence is not accounted for in the figures that politicians and policymakers use to make decisions. As a result, we operate under a distorted picture of the nation's economic health.
There's no simple way to estimate the impact of mass incarceration on the jobs market. But here's a simple thought experiment. Imagine how the white and black unemployment rates would change if all the people in prison were added to the unemployment rolls.
According to a Wonkblog analysis of government statistics, about 1.6 percent of prime-age white men (25 to 54 years old) are institutionalized. If all those 590,000 people were recognized as unemployed, the unemployment rate for prime-age white men would increase from about 5 percent to 6.4 percent.
For prime-age black men, though, the unemployment rate would jump from 11 percent to 19 percent. That's because a far higher fraction of black men — 7.7 percent, or 580,000 people — are institutionalized.
.... June Zaccone 
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