Category Archives: Labor Economics

Some Recommended Reading: Dean Baker on the GOP’s Plan to Privatize medicare

I haven’t done enough of this lately–in fact, haven’t done enough posting lately, but that’s another matter–but this is the start of my efforts to include various good stories and links on a wide array of issues. This comes from Dean Baker, a brilliant guy writing here in The Guardian, on the lack of adequate media coverage on the implications of the Paul Ryan (R-WI) plan to privatize Medicare. In it, Baker contends that the mainstream media has wholly ignored the fact that privatizing Medicare will result in costs totaling roughly “$30 trillion,” which is about six times the projected shortfall down the road in Social Security. The key for Baker is not only this enormous burden of privatization, but also the disparity among the same media and politicians over Social Security funding issues (which are considerably overblown) and the implications of the Ryan “plan.” The latter has simply not generated the same attention, analysis, or outrage as the former, despite its far more devastating implications. Please read.

More on this and other issues to follow.

–Jason Kozlowski


Maine, National Efforts to Roll Back Child Labor Laws

Much attention has rightly been devoted to recent orders by Governor Paul LePage to remove murals and the names of figures such as FDR Secretary of Labor Frances Perkins (the first woman to hold that position) from the Maine Department of Labor office. These represent nothing short of an attack on working-class culture and people’s historical memories, as well as just how extensive the right’s assaults on workers and their rights have become. Yet legislative efforts in Maine and around the nation extend even beyond these attacks, and now include broad efforts to roll back protections for another group of workers–children–whose history of exploitation in the US is well established, and the images of which were ironically removed from the Maine labor murals.

From Ian Millhiser of ThinkProgress:

Maine State Rep. David Burns is the latest of many Republican lawmakers concerned that employers aren’t allowed to do enough to exploit child workers:

LD 1346 suggests several significant changes to Maine’s child labor law, most notably a 180-day period during which workers under age 20 would earn $5.25 an hour.

The state’s current minimum wage is $7.50 an hour.

Rep. David Burns, R-Whiting, is sponsoring the bill, which also would eliminate the maximum number of hours a minor over 16 can work during school days.

Burns’ bill is particularly insidious, because it directly encourages employers to hire children or teenagers instead of adult workers. Because workers under 20 could be paid less than adults under this GOP proposal, minimum wage workers throughout Maine would likely receive a pink slip as their twentieth birthday present so that their boss could replace them with someone younger and cheaper.

And Burns is just one of many prominent Republicans who believe that America’s robust protections against the exploitation of children are wrongheaded:

Republicans’ contempt for workers is hardly news. GOP governors throughout the country have declared war on collective bargaining, and the national minimum wage remained stagnant for nearly a decade the last time Republicans controlled Congress. Nevertheless, the GOP’s increasingly widespread assaults on child labor laws is a significant escalation from their longstanding war on adult workers.

There are no bounds to the shame of this. If anyone disagrees, please ask yourself whether or not you wish your children to work longer hours, in tougher conditions, for less than the minimum wage, and at an earlier age. Such bills would literally turn back child labor and aspects of labor law back a century.

–Jason Kozlowski


Stiglitz and the Disconnect in Discourses on Political Economy

Nobel Prize-winning economist Joseph Stiglitz wrote a good column in Politico March 28 detailing why he refused to sign on to the Bowles-Simpson Deficit Commission recommendations, which he characterizes as a “near-suicide pact” for our economic future. It is well worth reading, and I won’t recount all the details here. Rather, I’d like to discuss several points that he brings up, and a couple he did not, that reveal both the depths of our current economic and political crisis (and this stagnation is indeed every bit as political as it is economic) and the growing chasm between sound, reasonable economic policy prescriptions on the one hand, including from a highly respected economist, and major segments of both political parties and their backers on the right on the other hand. In sum, what Stiglitz proposes is increasing taxes on the wealthiest citizens who, as he rightly says, are the one class “in the country that has prospered for the last decade,” in order to stimulate the economy and reduce the growing, yawning gap between rich and poor.

Why this proposal? Because the top 1% of Americans haul in over 25% of all income–to say nothing of the vast majority of assets they control. This concentration of wealth at the top stifles economic growth in our consumerist society and at the same time disincentivizes business investment in employment and infrastructure. On broader infrastructure, Stiglitz frames his argument in terms that would, in theory, attract pro-business people and interests by contending that significant opportunities exist for businesses, government, and people alike through a renewed focus on our long-ignored infrastructure:

Years of underinvestment in the public sector—in infrastructure, education and technology—mean that there are ample high-return opportunities. Tax revenues generated by the higher short- and long-term growth will more than pay the low interest costs, implying significant reductions in deficits. Any firm that could borrow at terms similar to those available to the U.S., and with such high return projects, would be foolish to pass up the opportunity.

While he immediately shifts his arguments to cover taxes, certainly vital to rectifying the flagging American (and global) economy, Stiglitz’s proposal has clear implications and benefits for workers that he should have accentuated. Such projects have enormous potential to employ people for years to come in both the private and public sectors, across scores of occupations. They can improve areas of our economy and society that segments across the political spectrum agree have been blatantly, dangerously overlooked, even if they differ on some of the reasons and what recommendations for remedies they have.

That public works, as just one aspect of a more expansive investment in broadly construed economic infrastructure such as schools, telecommunications especially public-access Internet, in addition to bridges, roads, levees, and more, does not receive far greater focus for economic and employment growth is in good part a testament to attacks from the right wing on the legacy of the New Deal. While the New Deal did not end the Great Depression (which had multiple phases including one in the late 1930s that economists such as Paul Krugman argue returned in force because of reduced government jobs investments), its aggregate programs did reduce unemployment, ameliorate the worst effects of the crisis for millions, spur vast economic investments in infrastructure, and importantly construct what became a fairly expansive social safety net encompassing labor rights, modest long-term economic and social security for the at-risk, and more. Some form of New Deal-like spending and programs are just what the US needs, but is exactly where politicians and political discourse will not go.

Nor have there been any serious discussions or efforts in mainstream political circles to implement another of Stiglitz’s proposals–reducing the deficit through reductions in the country’s vast military expenditures including two enduring wars and occupations. Says Stiglitz:

The Cold War ended more than two decades ago, but we continue to spend tens of billions on weapons that don’t work against enemies that don’t exist. Fruitless wars have not increased our security and our military’s credibility. Rather, they have undermined both.

One could certainly include in this analysis the vast sums Americans through their tax dollars spend on a more privatized system increasingly dominated by contractors. Yet asking crucial questions about the efficacy, need, and cost-effectiveness of steering hundreds of billions of dollars into this privatized, largely unaccountable, and under-regulated contractor system is off the political radar.

Stiglitz concludes with a critique of the vast web of corporate tax loopholes that deprive the treasury of hundreds of billions every year. It is hard to describe just how out of control the problem of corporate tax avoidance has become, but Allison Kilkenny did an admirable job in her piece in The Nation. How bad has corporate tax avoidance become? Kilkenny writes that two-thirds of US corporations, frequently dubbed “job creators” in right-wing circles despite profit levels of about $1.659 trillion in the third quarter of 2010, pay no federal taxes, with many profitable corporations actually receiving rebates. These include banks, such as Bank of America, which received back $1 billion despite having already taken $45 billion from American taxpayers as part of an enormous bailout of investment banks.

Yet what dominates right-wing circles and much of mainstream discourse is not just an utter avoidance of these long-standing problems, but is an attack on workers’ union and political rights, and threats to shut down the federal government should the right wing not receive sufficient cuts in social spending for what they derisively term “entitlement programs.” This is despite some steep cuts that President Obama’s budget has already proposed, including to cut heating assistance for elderly and low-income citizens, and community service block grants.

In sum, attacks on everyday people through austerity prescriptions, while the wealthy have never been wealthier or more financially distant from everyday people in America, hold political sway over sober, moderate assessments from award-winning economists like Stiglitz who have long studied such problems and their ramifications. Without effective, countervailing arguments and proposals among our political leaders, and popular pressure to support such, it appears unlikely that our nation will anytime soon bridge this gap between the needs and wants of most Americans living day-to-day on the economic and political margins on the one side, and the power of few, wealthiest Americans who dominate our bleak landscape on the other.

–Jason Kozlowski

(Note and Disclosure: The similarity between this post’s title and that of the AlterPolitics post to which I linked in the text is strictly coincidental. In fact, I was unaware of it until I searched for some good references to Republicans’ more frequently employing the term “job creators” recently to refer to the business community as a whole. In fact, the post to which I refer is much more economics-oriented than mine, is quite good and worth reading in its own right.)

(Additional Note: Kilkenny has a strong article at truthout that makes strong connections between the country’s infrastructure, political economy, and the recent tragedies in the aftermath of the earthquake, tsunami, and nuclear meltdown in Japan. Read it here. This makes tax policy and infrastructure issues all the more prescient.)


Wisconsin Protest Coverage

Here are some links to stories and footage from last Saturday’s massive rally in Madison against the draconian anti-union legislation.

John Nichols of The Nation, who has spent considerable time in his home state of Wisconsin, penned this very good piece after the rally. He’s been on this from the beginning, and has rightly received a lot of air time to discuss the mounting protests. He pegs the number of protesters at over 100,000.

There is some very good video worth watching from the World Socialist Web Site of workers on the general strike, Wisconsin protests and the growing chasm of social inequality in our country.

This is an excellent article from The Cap Times on Saturday’s protests, including some great quotes from people in the massive crowd, and a strong speech from actor Tony Shaloub (“Monk” et al.) supporting Wisconsin protesters. Good stuff.

Meanwhile, Madison has rightly received the lion’s share of headlines and attention for the outpouring of organic activism, but Milwaukee and especially the students, teachers, and workers at the University of Wisconsin-Milwaukee, had a large protest yesterday. FightBack!news is an excellent site with regular updates from around the country on labor, workers, and resistance.

While Eric Kleefeld at TPMDC is right to be wary of who comprises the signatures thus far, there is no question that the recall effort in Wisconsin against the eight eligible Republican state senators is proceeding quickly. Democrats claim to have already amassed 45% of the signatures necessary for a recall.

Please be sure to say some prayers and send what assistance you can for the poor people devastated by the massive earthquake and tsunami, and now facing the very real, terrifying threat of radiation exposure from several failing, destroyed reactors. It is beyond harrowing.

–Jason Kozlowski


Wisconsin Union Contracts Expiring; Recall Efforts Underway

The Wisconsin State Journal is reporting that union contracts covering about 39,000 workers, which had been extended for nearly two years, are set to expire Sunday March 13. Included among the nearly 20 expiring agreements are contracts covering non-building trades workers, administrative and technical support staff, security and public safety, and professional social services workers represented by the Wisconsin State Employees Union (WSEU). Various provisions of the recently passed anti-union legislation will be phased soon and in over the next few months, such as the termination of dues deduction, greater deductions from paychecks for pensions, and higher health insurance premiums.

Currently, recall efforts targeting Republican state senators are underway, with the Progressive Change Campaign Committee spearheading and raising funds for the effort. Eight Republicans in all are eligible for recall, though six are likely targets. Should three lose recall votes and Democrats replace them, the balance of power in the state senate will dramatically shift.

Not to be overlooked, with the eventuality of legal challenges to the terms of the anti-union bill and how it passed the senate, it is essential to note that there is an election on April 5, less than a month away, for a seat on the state supreme court. The election is between Republican David Prosser and Democrat JoAnn Kloppenberg. Expect this to be a hotly contested, well attended, and expensive election for the seat, since currently four Republicans and three Democrats comprise the state supreme court.

–Jason Kozlowski


Walker Admits the Obvious: Union Bill’s Changes “Are Indeed Fiscal”

In what should be a surprise to few if anyone, Wisconsin Governor Scott Walker acknowledged what most, especially the critics of the state’s anti-union bill, understand–the bill that the Wisconsin Senate passed yesterday without having the necessary quorum or allotted time beforehand to vote on it is inherently fiscal in nature. In a highly debatable preface to yesterday’s controversial actions, in which the Senate stripped down the overtly fiscal provisions yet left the clearly implicitly anti-union fiscal provisions in place to pass the anti-union bill, Governor Walker stated at a press conference this morning, “We followed the law, and yet it allows us to move forward with these reforms — which are indeed fiscal.”

Since a Senate quorum is necessary to vote upon measures that are fiscal in nature, and given that Governor Walker has acknowledged the essentially fiscal nature of these anti-union measures ostensibly meant to cut state pension costs while, in actuality, the GOP Senate leader Scott Fitzgerald has admitted that the bill is meant to curtail the rights and political power of unions, it will be more than interesting to see how the eventual legal challenge to this act will stand up, if at all, in court. This is all the more so since Republican lawmakers claim to have acted within the rights of the conference committee not to have needed 24 hours advanced notice for the proceedings to legally occur.  However, this claim is highly debatable and subject to legal challenge.

Meanwhile, justice is served in the capitol as a score or so of nonviolent protesters were forcibly removed from the hallway leading to the capitol’s Assembly chambers.

As the late, great author Hunter S. Thompson once said, “When the going gets weird, the weird turn pro.” We’ve clearly moved into the ranks of professional political weirdness.

–Jason Kozlowski


GOP Rams Through Anti-Union Provisions Without Quorum; People Seize Capitol

In what can generously be described as a highly dramatic day in Madison, the GOP-controlled Senate stripped down pending legislation of the overtly financial elements to include the anti-union provisions stripping public-sector workers of most of their collective bargaining rights and organizational power. This was done to try to sidestep the requirement stipulating that the Wisconsin legislature must have a quorum present to vote on any legislation that has fiscal implications. With the prolonged absence of the 14 state Democratic Senators, the apparently desperate GOP Senators took matters into their own hands, quite likely illegally, and passed a bill, 18-1, essentially aimed at gutting the union rights and political power of the state’s public-sector unions and their members Wednesday night.

This precipitated a rapid, massive wave of public protest in Madison Wednesday night, with thousands of people taking to the streets on foot and in vehicles to protest the draconian anti-union bill, which Governor Scott Walker (Tea Party/R) is expected to sign into law and soon. There are reports that some protesters entered the well-guarded capitol by smashing windows, while many hundreds of other protesters stormed the capitol doors after police ceded ground and let the throngs in, chanting “We’re not leaving. Not this time.” There is also the mounting threat of strikes, including a general strike, as throngs of thousands of workers flood the capitol area, and anger has surged. There seems no end in sight to this increasingly tense struggle in defense of workers’ rights.

Via the Wisconsin State Journal:

Some union leaders interviewed Wednesday night at the Madison Labor Temple indicated that strikes — which are illegal in Wisconsin for public-employee unions — are possible.

“Senate Republicans have exercised the nuclear option to ram through their bill attacking Wisconsin’s working families in the dark of night,” said Phil Neuenfeldt, president of the Wisconsin State AFL-CIO. “Tonight’s events have demonstrated they will do or say anything to pass their extreme agenda that attacks Wisconsin’s working families.”

Regardless of how one feels about stripping workers of their rights and their allegedly causing (in oft-refuted charges) Wisconsin’s state coffers to bleed white, it strains credulity to the breaking point to think that the stripped-down bill somehow does not have fiscal implications. The conservative Weekly Standard implicitly acknowledges so in its, perhaps generous, assessment of the possible “benefits” for the state in imposing wage and benefit cuts on public-sector workers:

The legislation being voted on tonight has few changes from the bill as initially proposed. The bill removes a refinancing provision and doesn’t count savings during this fiscal year accrued by requiring public employees to pay more for their pensions and health insurance.* But it would still save the state $300 million over the next two years by requiring state employees to contribute about 5% of income toward their pensions and by requiring state workers to pay for about 12% of their health insurance premiums. It would also save $1.44 billion by requiring public employees in school districts and municipalities to pay 5% of their salaries toward their pensions and by removing collective bargaining for benefits, thus giving school districts and municipalities the option of requiring their employees to pay about 12% for their health insurance premiums.

Clearly, these issues and the “savings,” regardless of the eventual number, would affect the state’s budget, making the bill nothing if not fiscal in nature. To say the very least, it strains credulity to the breaking point to think otherwise. What will transpire in an expected legal challenge, I do not know. However, I do know that this result reveals what a good many of us already knew–that the real targets were the unionized public-sector workforce, their union rights, and their political power. The obvious fiscal implications may be relevant for any legal challenges that might come. It would be ironic for Wisconsin right-wingers if they did, for the rhetorical smoke screen for their anti-union thrust would be more than revealed to have been hooey. Indeed, it might in good part be their undoing, for it was Walker and his fellow Tea Party Republicans who repeatedly attempted to fixate people on an alleged connection between public-sector workers’ pay and benefits and the state’s budget shortfall. He made workers’ pay and benefits a fiscal issue from the get-go. Yet, in their haste to smash unions, the Wisconsin GOP may have overreached by not only inciting popular anger and opposition toward Walker’s proposals, but also by trying to ram through his blatantly anti-union bill by ignoring long-established state legislative procedures.

Stay tuned for more on this crucial, developing story. You can also watch the live feed from the loud, vibrant, and tumultuous capitol building here. (N.B. The feed has been intermittent tonight, for whatever reason.)

–Jason Kozlowski