Cross Posted in orange
That’s right; the tired huddled masses yearning for a living wage need not apply for real representation in 2012. Many do not want to talk about it during campaign season. However, it’s not going away, and there’s a reason; unlike what neoclassical/neoliberal economic garbage stipulates, high unemployment can continue on indefinitely.
There will be no general equilibrium. There will be no confidence fairy. It’s very scary unless something serious is done about this problem. Basic problem solving logistics dictate that you have to at least talk about the right solutions(stimulus/deficit spending/prosecuting financial crimes for LYING-MORE/debt forgiveness) before having any hope of implementation in the future, election or no.
That reality is neither seen nor heard in Washington DC. It is all talk of tax cuts (Middle class/for the wealthy) and deficits as far as the eye can see. You see, income/payroll taxes are for people that actually have income. That’s why focusing purely on tax cuts in this economic climate is not a big enough sum.
It’s the same in this Presidential campaign. We can literally see the pain from month to month with every lackluster jobs report failing or barely holding even with population growth. We’re not even making any inroads from the initial downturn all jobs reports should be benchmarked to, and Yves Smith lays out clearly why this is true.
There was rending of garments and wearing of sackcloth last week when the jobs report came in at only 80,000 new jobs created in June, the third disappointing report in a row. Pundits looked to find cheer despite the disappointing outcome. For instance, the number of hours worked rose, and 25,000 temps were added, which the optimists used to contend that employers saw more demand, but weren’t quite confident enough to make permanent hires. Citigroup’s Tobias Levkovich argued that more firms are planning to add jobs. The gloomsters pointed out that global manufacturing output is weakening, and new orders in particular are signaling contraction. And John Hussman noted (hat tip Scott):
As for the June employment figures, the internals provided by the household survey were more dismal than the headline number. The net source of job growth was the 16-19 year-old cohort (even after seasonal adjustment that corrects for normal summer hiring). Employment among workers over 20 years of age actually fell, with a 136,000 plunge in the 25-54 year-old cohort offset by gains in the number of workers over the age of 55. Among those counted as employed, 277,000 workers shifted to the classification “Part-time for economic reasons: slack work or business conditions.”
And increasingly, when I see the Wall Street Journal interview the owner/operators of small or medium-sized businesses, a surprising number display contempt towards workers (you’ll see it particularly when they complain that they can’t find enough good workers, which in the overwhelming majority of cases means they aren’t willing to pay up for the sort of people they’d like to hire). There is similarly more than a bit of inside the Beltway detachment from what is happening in the heartlands, in part due to the fact that the DC area is holding up well thanks to the rising tide of lobbyist dollars. For instance, I recall Gene Sperling making the case that the Administration had created a lot of good middle class jobs, and I realized there was something discordant about his remarks. I realized later that Sperling’s “middle class” was an abstraction, people like construction workers, not the sort he really knew personally. And the Administration’s has not only failed to offset the shrinkage of state and local positions, it’s managed to destroy jobs all on its own. This chart is from Warren Mosler (hat tip Cullen Roche):
A second cause is the strong shift to an anti-inflationary policy bias. Paul Volcker allegedly monitored construction wages to see if he had succeeded in beating inflation. Having labor slack was one way to reduce labor bargaining power and keep price pressures at bay. So high and moderately high levels of unemployment don’t raise the same degree of alarm that they once did. Reagan was freaked out when unemployment rose over 8% and took much more aggressive measures to combat it than Obama has.
That’s quite an illuminating and disturbing chart from the Great MMT economist Warren Mosler; someone who ran for President and the Senate but lost which is a shame. It would be nice to have at least one politician who understood our fiscal and monetary system in tact but as of now we have none. That fact, like this administration letting go of public workers at this rate and bragging about it, is harmful to society and the economy. U6 Unemployment would be under 8%, officially, if the public work force wasn’t cut in this fashion across the board.
I guess trying to defy electoral history seems like the preferred route for some reason unlike Reagan who was surprisingly more worried about over 8% unemployment than this president. The lack of enthusiasm, sometimes disdain, for the public work force, particularly public sector unions, has reverberated throughout the nation. The Democratic Party welcomes losses such as the recent painful one in WI by not standing loud and proud for public unions and the public workforce.
Because they don’t, public and private unions are pitted against each other as they were in WI which partly explains why 23% of union households supported Walker and were susceptible to the propaganda funded by the Koch brothers. Despite what Debbie Wausserman Schultz says, that loss mattered a lot and will continue to matter in the future for what’s left of organized labor in this country. And although important, when the president over emphasizes private sector jobs as if they are the only ones that matter, that takes a toll.
Now perhaps there are a number of people out there in the blogosphere that want me to shut up right now and to stop holding the President’s feet to the fire during an election. My response to that is that during an election is the only time there is any leverage if any exists at all; it’s very doubtful the president cares what’s said about him on a blog anyway.
He’ll definitely care less about anyone's opinion after he is reelected though, which I predict he will be by a hair. And to be fair it’s a given that Romney is slightly more of a joke. I look at him like this.
But this statement also applies to the entire political system and debate or lack thereof. It applies to this entire presidential campaign. You might ask why I can't look at this president the same since 2008? Well it’s too late. Promises were broken and the lack of effort to live up to them has many people I know personally in dire straits right now. How?
No one is talking about raising the minimum wage including the president. It is obvious Romney doesn’t give a shit about workers, but the President made a pledge to raise the minimum wage in his 2008 campaign and again in 2009. And yet, he’s never even tried to make a serious effort to move Congress on this issue.
I’ve only seen Senator Tom Harkin even talking about it, and by at least talking about it one shows they care about the lack of purchasing power working people in this country have. By not talking about it, it’s an unspoken message speaking to a lack of compassion on that front for working people in this country.
- Minimum wage has not kept pace with inflation at all. $10.55
is how much the federal minimum wage would be if it had kept up with inflation over the past 40 years. Instead, it’s $7.25.
- $15,080 is the annual income for a full-time employee working the entire year at the federal minimum wage.
- The number of states where a minimum wage worker can afford a two-bedroom apartment working a 40-hour week is 0.
- If you really care about fair pay for women the issue of raising the minimum wage can't be ignored or excused for the falsely perceived electoral good.
- It's pretty well established that raising the minimum wage would be stimulative and would help spur demand which means jobs, and without politically threatening social security like the payroll tax cut.
So those are pretty good reasons why I don't just shut up about it even during a campaign or what is called a campaign. After all, the brilliant James K. Galbraith speaks well to how important this issue is.
Americans can't spend, their government won't spend, and the tax cuts of both George W. Bush and Barack Obama are set to expire soon. The U.S. Congress can't pass an infrastructure bank, and the country can't fix the banking system or the foreclosure mess. Everything is blocked up. Is there anything we can do that would make a difference?
Yes. Raise the U.S. minimum wage. By a lot -- let's say, to $12 an hour, from the current rate of $7.25.
What would workers do with the raise? They'd spend it, creating jobs for other workers. They'd pay down their mortgages and car loans, getting themselves out of debt. They'd pay more taxes -- on sales and property, mostly -- thereby relieving the fiscal crises of states and localities. More teachers, police, and firefighters would keep their jobs.
And so from now onto after the election, we can gauge this as a metric to see whether this 2012 campaign is one that fully speaks to the issues of working people or not. Right now, it fails to measure up. With so much corporate owned media over-saturation on the political horse race now infecting what we call the progressive blog-o-sphere, it would help if someone spoke to these issues that affect all working people once in awhile.
So therefore I implore all of you to demand better standards all around in this campaign so it can have some use unlike the millions of dollars being raised and spent on attack ads instead of adding anything useful to society. We have to be able to talk about real standards and solutions; real knowledge of national accounting, putting and end to deficit lies, deficit terror, and all the inter-generational accounting errors used to push for austerity and bipartisan grand bargains. We all need a real living wage for the working and non working poor, but without the political power to buy access to and for anyone to represent them in Washington D.C.
Oh well, maybe you don't want to talk about it, but it's vastly important that we do.