Nobody has a lot of hope left, so we got Trump.
I’ve taken to doing this thing Kurt Vonnegut used to do, semi-randomly calling people I haven’t spoken to for awhile. No emails, a phone call, the numbers I can track down online. The phone rings on their end and announces I am demanding to talk with them. It’s selfish. I want to know what’s going on in America. I ask them that.
The way things work, these people have dispersed themselves all over America. Most of the people I speak with are in their 50s, nobody younger than about 35. They are representative only of “people I still sort of know.” The whole thing is about as scientific as the smell off a pile of dog crap.
I’ve found nobody with a lot of hope left. They seemed to have used it up.
I haven’t run across anyone who voted for Trump who said “Well, that’s that, time to sit back and watch things get fixed.” A lot of these people voted for Obama, at least in 2008, and not because he was going to be America’s First Black President but because they really believed in his promise of Hope. The Bush years had worn out. We stayed scared enough, but then no post-9/11 attack came, the wars dragged on, and most of the stuff that was supposed to make us feel safe just ended up somewhere between inconvenient and bullying.
People have no sense of being in control of their lives. They know they have a lot less money than they used to, they don’t see their kids doing better, but they see on TV that some few seem to have most of everything. They can figure if they have less and someone else has more where that more came from.
“Hope” means different things but it one way or another meant change for the better and that didn’t happen. Depending on who you were and where you lived, things stayed about the same or they got worse. The news said another 20,000 jobs were created but they still worked at Target. The news said solar and coding and Internet of Things and self-driving cars and they still made $7.25 an hour when their grandfathers made $23.50 with benefits. In 2017 they could not afford health insurance, stuck between not having enough money to buy it and not having too little enough to get subsidized. And they know health insurance and healthcare are not the same thing, as in high deductibles and Bronze plans that never seemed to cover things, or cover them fully. They know that, and deeply resent anyone who tells them it’s not really that way and they are better off.
You can’t tell a person soaked in water they aren’t wet.
Having been fooled, prepped for years, they looked at the 2016 election and saw a choice between a guy who was so cynical about providing hope he didn’t even bother to offer anything beyond a vague exhortation to be great on a cap, and a women who didn’t even bother with that, just a selfish demand for affirmation, “I’m With Her!” going through the motions enroute to what she thought was hers already.
They knew Trump was a bully, a cheat, someone mean, and did not need to be told. They resented being seen by Clinton as too dumb to get that on their own and needing a lecture. Same now for the endless late night mockery and Washington gossip by “sources” that passes for news. Nobody cares about Nordstrom’s or who the spokesperson is when they’re hungry, and they resent the people who do not get that.
Economist Thomas Piketty found the share of U.S. national wealth claimed by the bottom 50% of the country dropped to 12% from 20% in 1978, along with a drop in income for the poorest half of America. That level of change will not go unreacted to.
It wasn’t that most of them hated Blacks and gays and the people of so-called identity politics, it was just that they did not care all that much about them either way. People in smaller places all know about Mr. Saunders the “confirmed bachelor” and while he couldn’t hold hands with his “roommate” around town, really, otherwise, who cares, I’m down to canned tuna and cereal the last week of the month when my food aid money runs out waiting for the first of the next month. Sorry equal rights for everyone isn’t in place, but let’s fix some other things first. We’ve all taken a beating.
You don’t have to like it, but that’s what a lot of people think. And unlike a fair number of other voting blocs who need to be made to show up on election day, these people turn out. They don’t need buses, they drive themselves.
So to hell with it they said, I’ll vote for the guy, being fooled knowing I’m being fooled. It doesn’t matter if Trump pisses off the Prime Minister of wherever. My kid will fight that war, like he fought the last war, because he can’t find another job and joins the Army, and Cory Booker’s nephew or niece won’t and if they does somehow join the service they’ll be a pilot or work intel or some other clean hands job and won’t be up on the line. Can my other kid go to college? Maybe, but she’ll eat debt for 20 years for a throwaway degree that isn’t worth much. We want our daughters empowered because we know that offers them a good life, but we first want them fed and employed.
We were promised that. Didn’t happen.
None of those people are going to have their minds changed by pussy hat marches or Lady Gaga at the Superbowl which just brings an eye roll from the men and women at the bar, and they don’t appreciate being called racists, nazis and fascists by millennials who have never really met one and fling those words around to enrage each other into shaking their heads at each other. They are unaffected by protests not against some policy, but against the idea that the candidate they voted for won.
Meanwhile, if someone who is a real nazi or fascist offers the people at the bar even a touch of hope they’ll put up with some of the rest even though they don’t care for it personally. Most people really don’t want to live like it’s the 1950s Deep South again, but they’ll take a cleaned up version of 1969’s economy.
See, “resistance” is part of the long-failed stay negative Democratic policy, the same one that lost the 2016 election. Find something to be for, Dems, or you’ll lose in 2018 again.
So if you want to really throw up a wall between America as we want it to be and the America you’re afraid it will become, shut the hell up and create some jobs. Just do that, dump some money out of the pot and build some bridges and highways. Start. People who wear black shoes and white socks don’t really care whether you fund the National Endowment for the Arts as long as you also fund a new water plant for every Flint, and there is or will be one in every state. That’s a big gulp of what stopped real fascism from catching hold in 1930s America.
But right now people out there are heading toward accepting an awful lot of hateful things because they want to believe someone will help them.
Every year we wait makes it harder and less likely we’ll get out from under this blue dusk. The party or candidate that can really do this — create some jobs, give people back their pride, allow them to take care of their families, throw out a little hope — will win every election they want to run in.
We’re not headed into authoritarianism per se. We’re headed into giving up. That’s the demon that’ll destroy us. There’s the weight of emptiness out there and something’s gonna fill it up.
I know I can’t keep “we,” “you “and “they” separate in the essay above and after spending a lot of time trying to fix that I realized it was meant to be that way.
Copyright © 2017. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity. Follow me on Twitter!
It’s not Trump you have to worry about. You’re thinking short-term.
As people struggle to find third-parties to blame for Hillary Clinton’s defeat (pick one or more: Putin, Bernie Bros, Comey, The Media, Electoral Collegians, the Racist/Misogynist Hordes), an amorphous group has emerged as a popular domestic target: stupid poor white people who do not understand how much better they have had it over the last eight years.
These slack-jawed yokels just can’t seem to grasp that they have great jobs in a growing economy. The numbers prove it: the U.S stock market is at record highs and unemployment at its lowest level since the Great Recession.
“Anyone claiming America’s economy is in decline is peddling fiction,” Obama said in his 2016 State of the Union address. He said his team has created a “more durable, growing economy” with “15 million new private-sector jobs since early 2010.” Tim Kaine also used the 15 million jobs talking point in the vice presidential debate.
But the problem isn’t jobs per se, it is income inequality.
This is the basis of the sense of economic disenfranchisement that drove many voters to seek change this past election, even if after seeing Sanders pushed out of the race that change meant overlooking Candidate Trump’s many shortcomings.
A big part of this inequality is while more Americans are working, more are working part time without benefits. Since 2007, the number of Americans involuntarily working part time has increased by nearly 45 percent.
Coupled with that is what many of those workers see as the failure of the Affordable Care Act (ACA; Obamacare) to live up to its promises. ACA was supposed to be the government supplying a key benefit employers refused to offer to part-timers. People may indeed now have access to insurance, but with high deductibles, they may not have access to healthcare. These are not people with ideological problems with Obamacare. They need help for their families and want the ACA changed.
In addition, because larger employers have to start paying into the ACA fund for each employee who works more than 29 hours a week, employers who offer the most jobs, retail, hospitality, and fast food, have cut most part-timers to 29 hours a week, down from the once-standard 39 hours a week that kept them outside of overtime.
Wages saw their biggest jump this year since 2008 — 2.9%. However, most of that increase came only in states that chose to raise their minimum wages independent of the stagnant federal minimum wage. And with inflation running about 2%, most of any increase was washed away. And what is .9% of minimum wage anyway? Pretty close to not a helluva lot.
Higher costs and less money. And of course for part-timers, vacation days, sick leave, pensions, child care, and other benefits remain elusive at best. The result is a workforce making up the gaps with multiple jobs, food benefits, and opioids. And they voted against the candidate that made a talking point out of saying she would maintain the status quo that was killing them.
Trump, of course, is unlikely to change much, but he represents change and that apparently was enough for a very large number of voters who still believe government may yet help them.
Their inevitable disappointment is likely to lead one of two ways: a complete giving up, a sad resignation they should be happy they get anything at all, or a rage that will seek out a true demagogue.
For despite all of the apocalyptic prose spewing out of cranky Clinton supporters and all the newly-minted, New York-based, Midwestern blue collar experts, Trump is not the antiChrist of American politics. He is a minor celebrity who stumbled into a stream of history, a classic case of being in the right place at the right time.
But keep an eye out in eight years for the next guy. That’s the one to fear.
BONUS: Here’s another opinion on all this, titled “It was the racism, stupid: White working-class ‘economic anxiety’ is a zombie idea that needs to die.”
And if Dems, progressives, liberals, whoever, keeps insisting poor whites are racist-sexists who voted for Trump primarily because he encourages their hate vibe, then the next Democratic candidate will lose their votes again. Given the drift of the economy, there will be more of them next time, too. This election was a pay-attention-notice to the Democratic party, and it is so far not just ignoring it, it is saying the whole notion is wrong.
Copyright © 2017. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity. Follow me on Twitter!
I was talking to the African-American guy at one of the places I work. He’s about my age, and a janitor. He makes minimum wage, I make double that, but neither of us get any benefits and the only paid sick days either of us have are the few mandated by state law. We talk.
He seems less worried than I am about what will happen under the Trump administration to people of color. I’ve been reading Huffington Post and watching SNL, and there’s a lot to be worried about. I mean, Twitter much? It’s happening.
My janitor says I should be OK, but he’s “been f*cked for a long time.” While I was in college, he was in the Army, where the job skill he acquired was to drive a truck. Still, after the Army, he worked for Ford as a welder, the only job he ever had where he made more than minimum wage, at least until the factory closed down, sending him into a janitorial career. He can’t remember how many times he’s been hassled by the cops walking to and from work during the last eight years alone.
Anyway, we talk like this because I am a woke person (I studied that in grad school instead of working at Ford.) Some things we don’t have time to talk about because, well, he’s pretty busy cleaning up after all of us at work include, as the new administration takes office:
— From 1980 to 2008, the number of people incarcerated in America quadrupled, from roughly 500,000 to 2.3 million. The U.S. is 5% of the World population and has 25% of world prisoners. One in every 31 adults in America is under some form of correctional control.
— African-Americans constitute nearly one million of the total 2.3 million incarcerated population, locked up at nearly six times the rate of whites. African American and Hispanics comprise 58% of all prisoners, though only about one quarter of the U.S. population.
— One in six black men had been incarcerated as of 2001. If current trends continue, one in three black males born today can expect to spend time in prison during his lifetime. About 58% of the youth admitted to state prisons are Black.
We also didn’t have time to discuss that the reason Black Lives Matter exists right now is because unarmed Black people were killed at 5x the rate of unarmed whites in 2015. On average, two unarmed Black people a week are killed by police. Only 10 of the 102 cases in 2015 where an unarmed black person was killed by police resulted in officer(s) being charged with a crime, and only two of these deaths (Matthew Ajibade and Eric Harris) resulted in convictions of officers involved. In only a small handful of those killings did the current administration order the Justice Department to look into federal civil rights charges.
I had to get going (birthday party in the breakroom, but none of my millennial colleagues remembered to invite the cleaning staff, except maybe to sweep up afterwards), so we didn’t talk about African-American voter suppression in elections from 1869-2016, or mention that those Black people in jail, the ones inside the wall for felonies, are by and large denied the right to vote even after they get out.
He shared some thoughts as the term of America’s first black president ends.
He said he kinda wished Obama had worked harder to raise the minimum wage (last time on the federal level was 2009, but it was voted on by Congress in 2007 under Bush) and made available health insurance that had a deductible he could afford, but I quickly explained that that was all the Republicans’ fault, and pointed out the number of people of color Obama had appointed in his administration, as well as his many inspiring and heartfelt speeches after each mass shooting in America.
Anyway, there’s a lot of worry about come January, we agreed. He thanked me for standing with him in solidarity, changing my Facebook photo to reflect awareness, and asked that I pass along to the others at work that they please make sure their used paper towels end up in the trash can instead of next to it.
BONUS THE POINT: The setting is made up. So’s the janitor. That is satire, sarcasm, a fictional construct to say the problems of people of color will have under Trump are sadly nothing new. They are institutional — American — to our nation’s racist core. If anyone who cares tries to say the real issues are all part of one guy, Trump, they will imagine everything will be better when Trump goes away (Recount!) Well, Trump has “been away” for a very long time and look what’s happened. We have to fix a system now hundreds of years old in the U.S., fix ourselves, or nothing good will come of a Trump presidency, or any other.
Copyright © 2017. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity. Follow me on Twitter!
Here’s an excerpt from my book Ghosts of Tom Joad: A Story of the #99 Percent. I wrote the passage below in 2013. Nobody wanted to read it then, nobody thought it meant anything. Well, maybe it makes more sense now. And, yeah, I’m a little bitter about that.
“Yep. Thirty years on the big bucket, pouring out two hundred tons of steel a day. Lookit my right arm—muscle’s twice as thick as on the left ’cause of that lever I pulled every day. I got that job right after Korea in fact. My old man sent me to see the foreman while I was still wearing my uniform.”
“How’s it up there now? I heard the president say he’s creating more jobs, so I was considering moving up.”
“Moving on isn’t a bad idea. I wished I had done it at your age. Hell, I wished I’d done it last month.”
“So there’s work where you’re from?”
“Same there as it was four years ago and four years before that. Every four years the president comes back into western Pennsylvania like a dog looking for a place to pee. He reminds us that his wife’s cousin is from some town near to ours, gets photographed at the diner if it’s still in business, and then makes those promises to us while winking at the big business donors who feed him bribes they call campaign contributions. I’m tempted to cut out the middleman and just write in ‘Goldman Sachs’ on my ballot next election.”
“Meanwhile the coast reporters will write another story about the ‘heartland’ and then get out as fast as they can, acting as if something might stick to them if they stood still too long. We got so few families in town anymore we can’t hardly come up with a football team. I had to drive thirty miles last week to find a dentist, nobody closer still in business. The new mayor has this idea of encouraging art galleries and boutiques to take up in vacant buildings to revive the economy. So that’s us now, building a country on boutiques.”
It’s not about left and right anymore, not about Black and White. It is all about up and down. And it elected Donald Trump via a bumpy road. The next candidate to really figure it out will sweep into power.
And what it is is stated succiently by former McCain campaign chief strategist Steve Schmidt: jobs, specifically the loss of jobs to technology and globalization, and the changes to our society that that is causing.
The defining issue of our times, says Schmidt, is the displacement of workers, particularly those who traditionally held working class roles. America is watching a leveling down unprecedented in its history, a form of societal and economic devolution.
“I think that’s going to be the new fault line in American politics,” Schmidt said. “And the voters, the Bernie Sanders voter and the Trump voter — like fish netting, the fish can swing through the netting from left to right very, very easily.”
Schmidt focuses on Silicon Valley. “Let’s look at the Silicon Valley wing of the Democratic party and be clear about the partisan nature of all of these companies. We have these arguments about minimum wage — $12, $15. We’re 18 months away in this country from a robot in the window at the McDonald’s handing you your cheeseburger.”
“The number one job for not-college educated men in America is driving something somewhere. So when we talk about an era now of driverless trucks, driverless cars, where do those jobs go? Where’s that displacement?” Schmidt continued.
In essence, the growing irrelevance of American workers.
What started with the globalization of the 1980s, the literal export of jobs to places abroad chasing cheaper labor, is transitioning into its next phase, the “export” of jobs into the hands of automation. Traditional employment once considered secure (albeit low paying) that cannot be physically exported because it needs to happen at a specific geographic location, such as with service tasks, is doomed as sure as those jobs that used to be done by steelworkers in Ohio but now are performed in Shenyang.
Of course someone reading this will be mumbling something about to hell with those workers, let them get an education, retrain, whatever Darwinian crossed with dystopian curse they can conjure. The problem is long after you take away the jobs the people are still going to be there.
And while no one in Washington really cares about what happens to those workers per se, as long as they can vote they will matter to politicians.
It takes a special kind of demagogue, one with even more cynicism than usual, to fully exploit those workers’ literal fears for their lives, but s/he will emerge. Think of Trump as version 1.0, a kind of beta test. Trump likely never knew what he had within grasp, and spoke to this displaced group largely cluelessly and without the sophistication of a proper strategy.
But the next Trump will have the “advantage” of another four years of economic displacement, a slicker media profile undistracted by Trump’s crude buffoonery, as well as advisors like McCain campaign chief strategist Steve Schmidt, whispering lines in his or her ear that sound like bastardized versions of Springsteen lyrics. The hate mongering, racism, and name calling will be toned down for wider appeal.
Now there’s something to be afraid of.
You hear the expression “lesser of two evils” when people talk about how they will vote in November.
Poll after poll shows a growing number of voters saying they will vote negatively – they’re against Hillary, so they’ll hold their nose and vote Trump, and vice-a-versa.
It is also likely a large number of discontented voters will simply stay home on Election Day. Both candidates are among the most unpopular and least trusted in American history. One of them will end up in the White House.
How did we get here? How is it the only two mainstream candidates left standing Hillary Clinton and Donald Trump?
Hillary Clinton: All Appetite
Hillary Clinton is the archetypal 21st century candidate’s candidate, a fully formed tool of the oligarchy. Whether she wins or loses in November, she is the model for the next era of American politics.
Clinton sees The People as some mass to be pandered to and manipulated. She is simply a machine to gain power for its own sake (and money.) The One Percent tagged her early as exactly who they want to see in charge, someone who could be bought off, and she was nice enough to create her own vehicle to allow them to conveniently do that — write a check to the Clinton Foundation. As a bonus, it was also tax-deductible.
If Hillary did not exist, it would have been necessary for the wealthy who control most of America to create her.
The Once and Future Hillary
That wasn’t necessary, as Hillary Clinton had spent her entire life preparing for this.
By all accounts an intelligent, committed, feminist coming out of law school, she quickly fell into the TV classic 1950s role of dependent spouse, as “first lady” of Arkansas when Bill was governor, and of course, in the White House. Sure, she was given health care to mess around with during Bill’s first term, but when the issue crashed and burned, her role was reassigned to make safe speeches calling for more rights for women and girls. Safe in that she was allowed to pound the pulpit for those ideals in enemy territory like China, but not in countries like Saudi Arabia.
She was the good wife. And good wives look the other way when hubby strays a bit, even to the point of having sex in the Oval Office. And that’s because Hillary knew the Democratic Party would owe her for not blowing things completely apart in a messy divorce certain to reveal even more bad news.
First up was a Senate seat, a springboard for her presidential run.
In November 1998 four-term incumbent Democratic New York Senator Daniel Patrick Moynihan announced his retirement, opening a seat in a Solid Blue state. In early 1999 the Clinton’s bought a house in Chappaqua, New York (with “donated” money), all so that by September she was eligible to run as a “New Yorker.” While in the Senate Hillary was served up prime committee slots, and voted the safe votes (the Iraq War vote was safe at the time, of course, as everyone wanted to go to war. Nobody foresaw that one bouncing back the way it did.)
By the time the George W. Bush era finally gave up, everyone on earth knew the next president was going to be a Democrat.
So 2008 was going to be Hillary’s big moment, the first woman president, the one to clean up the Bush wars, who knows, maybe even score a Nobel Prize. But Hillary misread the degree of change Americans wanted, and in return for putting her plans on hold for another cycle or two, she settled in for four years as Secretary of State as a consolation prize. And have you heard? She sat in the Situation Room the night bin Laden was killed!
Taking No Chances
As the 2016 election approached, the Clinton’s took no chances.
The favors Hillary accrued as Secretary of State via the Clinton Foundation were transformed into money and support. As she pretended not to run, Clinton packed her campaign war chest with big-money speeches. A happy “listening tour” (remember the Scooby Van?) was created to show everyone how human Hillary was. Debbie Wasserman-Schultz lined up the Democratic Party machinery. Designated schulp Martin O’Malley was set up as the loyal opposition so Hillary could create the appearance she was running against someone in the primary.
Then, oops, Bernie.
When Bernie Sanders came out of nowhere (as had Obama in 2008), Clinton again misread or did not care about how much change many Americans sought. As many long-suspected, and as we all now know after the hacks of the Democratic National Committee servers, the Party machinery was brought to bear against Sanders. The mainstream media was lined up to belittle, marginalize and ignore him. The millennial vote Sanders inspired was largely written off by Clinton. Bernie was reduced to a sad, little old man helping nominate someone at the Democratic Convention he clearly loathed.
Add to that the flood of disdainful remarks talking points-prepped Democratic pundits spewed forth, announcing as one support for Libertarian Gary Johnson or Green Party candidate Jill Stein is near-treason. A voter’s well-reasoned, act-of-conscious decision to support one of the two is held as nothing less than support for the Dark Lord.
The Democrat machinery and the people who control it made Clinton the inevitable candidate. There was no one else who ever had a chance. America was told to suck it up and vote for her, whether they liked it or not.
Trump Stumbles into His Role
The Republican Party fully misunderstood its constituency, thinking one of a spray of robo-candidates would be good enough to simply run as Not Obama, Not Hillary.
Each candidate on offer fell into the mold of ultra-mainstream, such as the why-am-I-here Jeb Bush, or the nut case category with Ben Carson. Ted Cruz couldn’t make up his mind, and vacillated between the two options. The plan was likely to meld the two wings into a ticket and scoop up as many conservative votes as possible.
Whatever Trump may have really been thinking when he started his campaign, he stumbled on to something hiding in plain sight. Large numbers of Americans, mostly white and formerly middle class, were angry. They were really angry. They had been left behind as the country changed, left like an audience at a magic show who saw the trick done, but couldn’t for the life of them figure out how it had happened. These people knew they were getting poorer, they could not find decent jobs, and they wanted someone to blame.
He told them it was not their fault. It was because of Obama, it was the Chinese, it was the Muslims, the Blacks, the Democrats, NAFTA, immigrants, refugees, whoever they feared and hated, whatever they wanted to hear. He told them their racism and hate was valid, and gave them a place to express it as no one in the mainstream had ever before done in a modern campaign.
Trump became a predator sniffing the wind. When he sensed people fed up with Hillary’s scamming for donations, he said he was self-funded. When he sensed people wanted change, he said he was an outsider. When voters tired of Hillary’s lawyerly answers and outright lies, Trump came out as plain spoken, even rude and crude — what candidate before had ever spoken of his penis size on the national stage?
Weakness overseas? Bomb the f*ck out of them. Worried about China? Renegotiate. Tired of terrorists? Torture them, maybe kill their families. Problems with the economy? I can fix it, says Trump, and he didn’t need to explain how because while no one really believes it, they want to believe.
Whole races and religions were condemned. People were bored with long think pieces and empty political language. Trump dished things out in 140-character Tweets. Voters made up their minds with the same tool they use to follow Beyonce.
As a sign of Trump’s populism, and his popularity, he has garnered more small-dollar donations for the GOP than any other Republican candidate in history, and all that only since he seriously started asking for contributions in June. “He’s the Republican Obama,” Politico quotes one operative about Trump monetizing his Republican supporters.
Like nearly every person in the media, and the Democratic and Republican parties, I suspect when he first started out Trump never expected the ball to bounce as it did. Running was an ego thing, an elaborate prank, performance art, something maybe good for business. No such thing as bad PR.
But as others wrote him off, including the oligarchy, Trump learned.
Every time someone said “well, that’s the end of Trump” after some outrageous statement, Trump learned he needed only to top himself in the next sound bite. People wanted him to be racist, they wanted him to be larger than life, and they didn’t care if he lied or exaggerated. Most of the media, still reporting his latest statement (birther, debates are rigged) as a bad thing, still don’t get it.
Face It: They Are Us
America will have Trump or Clinton in the White House for the next four years because they are us.
Clinton is the ultimate end product of a political process consumed by big money. She is the candidate of the One Percent. She believes in nothing but the acquisition of power and will trade anything to get it. The oligarchy are happy to help her with that.
Trump is the ultimate Frankenstein product of decades of lightly-shaded Republican hate mongering. He is the natural end point of 15 post-9/11 years of keeping us afraid. He is the mediagenic demagogue a country gets when it abandons its people to economic Darwinism, crushes its middle class, and gives up caring what happens to its minorities.
Both candidates are markers of a doomed democracy, a system which somewhere in the past reached its apex and has only now declined enough that everyone, not just the boiling frogs, can see where we are. They’re us, people. We watched this happen, and we’ll be stuck trying to live with the results.
In the presidential debates, Trump and Clinton referenced the NAFTA and TPP trade deals. What are they and are they good, or bad, for America?
What Are NAFTA and TPP?
The North American Free Trade Agreement (NAFTA), which went into force in 1994, and the Trans-Pacific Partnership (TPP), which is still pending ratification in the U.S. and elsewhere, are international trade agreements.
Trump is unambiguously, totally, absolutely, hugely opposed to both deals and any others in the future. He has held that position from Day One.
Clinton, less so. NAFTA was pushed through by Bill, and Hillary continues to defend it. As Secretary of State she strongly advocated for the TPP. She continued that advocacy during the first part of her campaign, right up until Bernie Sanders started to score points against her by opposing it. Hillary then shifted to also opposing it. No one knows what her stance will be if she is elected.
Meanwhile, the Obama administration is still hoping to force TPP through a lame duck Congress following the election. Hillary would then be free to shrug her shoulders come January and claim the TPP is not her responsibility.
The Basics Of Trade
International deals like NAFTA and the TPP are designed to promote more trade, more goods and services, and sometimes more workers, moving across borders. The deals typically reduce taxes and tariffs, change visa rules, and sometimes soften regulations that keep foreign products out. The phrase used most often is “lower the barriers.”
So, if widgets made at a higher cost in the U.S. can be made more cheaply in Vietnam and then imported into the U.S., something like TPP can facilitate that by lowering American tariffs on widgets. Meanwhile, Vietnam might be required to change its agricultural import system to allow American genetically modified fruit into Hanoi’s supermarkets.
Looking at You, NAFTA
NAFTA is a good place to start in learning more, as it involves three countries — the U.S., Canada, and Mexico — that generally get along, play reasonably fair, and already had a robust cross-border trade. Lots of non-variables there. Plus, since NAFTA’s been around for over 20 years, there should be a decent consensus on how it worked. That will provide a real world example to weigh against a newcomer like the TPP.
There are numbers. For example, the U.S. Chamber of Commerce says increased trade from NAFTA supports about five million U.S. jobs. Unemployment was 7.1% in the decade before NAFTA, and 5.1% from 1994 to 2007. But then again unemployment from 2008 to 2012 has been significantly higher.
You can find similar ups and downs on imports and exports, the value of goods, and the like. Some are clearer than others; since 1993, U.S. exports to Canada and Mexico have climbed 201 percent and 370 percent. The problem is trying to attribute them. Global economics is a complex business, and pointing to a singularity of cause and effect like NAFTA is tough. And NAFTA, remember, was just three countries. The TPP would draw in 12 nations.
The Latin phrase cui bono means “who benefits?,” and is used by detectives to imply that whoever appears to have the most to gain from a crime is probably the culprit. More generally, it’s used to question the advantage of carrying something out. In the case of things like NAFTA and TPP, the criminal context might be more applicable.
NAFTA made certain products cheaper for American consumers, as manufacturing costs are lower in Mexico than Idaho. American companies who found new export markets abroad also saw a rising tide of new money. That’s the good part (for a few.)
However, allowing American firms to make things abroad and import them into the U.S. free or cheap moves jobs out of the United States. A current case cited by Trump is Carrier. Carrier sent 1,400 jobs making furnaces and heating equipment to Mexico. Mexican workers typically earn about $19 a day, less than what many on Carrier’s former Indiana assembly line used to make in an hour.
Carrier will see higher profits due to lower costs. They put Americans out of work.
Economists will often claim that such job losses are part of the invisible hand, how capitalism works, duh. The laid off workers need to learn to code and build web pages, migrate to employment hot spots such as California like a modern day Tom Joads. But pay a visit to nearly anywhere in what we now blithely call America’s Rust Belt, and see how that’s working out.
Retraining industrial workers just does not happen overnight, even if there was free, quality education (there’s not.) Indeed, since the beginnings of the hollowing out of America, it has not happened at all.
The risk is also that retraining takes unemployed, unskilled people and turns them into unemployed, skilled people. Training is only of value when it is connected to a job. Remember, even if all those unemployed Carrier people somehow learn to build web pages, America’s colleges are churning out new workers, digital natives, who already have the skills. Even Silicon Valley’s needs are finite.
Everybody Wins, Except for Most of Us
Economist Robert Scott claims over the last 20 years, trade and investment deals have increased U.S. trade deficits and cost Americans their jobs. For example, the agreement allowing China into the World Trade Organization led to trade deficits that eliminated 3.2 million jobs between 2001 and 2013. Meanwhile, the United States already faces a trade deficit with countries in the proposed Trans-Pacific Partnership that cost two million U.S. jobs in 2015.
In his 2008 book, Everybody Wins, Except for Most of Us, Josh Bivens showed increased global integration harms working Americans. Bivens estimated that the growth of trade with low-wage countries reduced the median wage for full-time workers without a college degree by about $1,800 per year in 2011.
A Broader View
If one is asking whether or not international trade agreements are good for America, one needs to think bigger. On a whole-of-society level, economics is about people. We all want American companies to make money. It’s also great that Walmart is full of low-cost consumer electronics from Asia, or Carrier air conditioners fresh from Mexico, but you need money — a job — to buy them.
Think broader, and you’ll see economics is about people. Let that answer the question for you about whether international trade agreements are good or bad for America.
Both the New York Times and the Wall Street Journal have run their stories. You can Google them (fine, here’s one), and the articles from smaller outlets that will follow, but I can save you some reading time, because they are all basically the same:
Oh my God, the Midwest is a freaking mess. Nobody has jobs, middle-aged white people are doing heroin and meth, and everyone is on food stamps. These people are angry as hell at, well, they say the government.
Trump and Hillary have been through (name the one small town you stopped in) and promised to bring back the old industrial jobs (Trump) or some hi-tech something (Hillary.) I stopped by a (diner, bar, waffle house, VFW hall) and talked to (name of the one guy you talked to.) He told me times are tough, but these people are tough. They built the mills, they pulled America up by its bootstraps. They’ll make it. Quote some Bruce Springsteen song you heard that afternoon driving east as fast as you could. Done.
The reporter then rushes back to New York to bathe in Purell and drown his/her disgust in warm PBRs and Starbucks spiced lattes. Next story is about a new start-up in Brooklyn that is creating a social media platform for dogs or something.
Understanding the Heartland
Most reporters act shocked to find people “out there” so angry. They can’t understand why the “folks” take food stamps but think handouts are for lazy people. They can’t understand why someone without health insurance, coughing up chunks of the asbestos they breathed in every day at the factory, opposes Obamacare.
The people the reporters speak with feel they got cheated. They worked hard, they paid taxes, they sent kids off to war (every small Midwest town has a memorial stone, if not three, to the local people who died in WWII, Korea, Vietnam, Iraq…) Then they got screwed by, well, someone. The lucky ones now work for minimum wage at a local Walmart full of junk made overseas. The rest visit the charity pantries and spend their food stamps not because they are lazy like “those people” (a code word for urban African-Americans; the few people of color in these towns tend to feel the same way), but because they are hungry. They wait like a cargo cult for the boom years to return, someday, somehow.
Trump gets this at a visceral level. He tells them it is not their fault, or his, though both share blame. It was the Japanese, or the Chinese, or some mythical Big Government, or regulations, or even the unions that gave the same workers higher pay and good benefits. It doesn’t have to make sense, it just has to play to a crowd angry and confused looking every four years for some answer, and some hope.
I Saw Them, The Ghosts of Tom Joad
I grew up in Ohio during the 1970s and 80s, and watched the industrial heartland fall apart in front of my eyes. Our town had a huge Ford plant. It was sold to Toyota, who cut jobs by half before closing it all down because they got better tax incentives in Kentucky. I don’t know what happened in Kentucky, but I can guess.
I wrote a book about all this, the last fifty years of the Midwest. When you look at it as a historical event, today’s state of things is as inevitable as sunset.
The book is Ghosts of Tom Joad: A Story of the 99 Percent. Close to four years ago I tried to sell it to a couple of the larger publishers in New York. No literary agent wanted it, no publisher was interested. As one put it, declining me, “You’re saying there’s poor people in Ohio?” Another was clearer: “Who wants to read a book about unemployed whites?”
The first publisher outside of New York I approached, one located in Indiana, immediately took the book.
How Trump May Win the Swing States
I fully doubt Donald Trump has read my book, or many books at all for that matter. Someone on Trump’s team, however, is very aware of the unfocused anger in the Midwest I wrote about, and is working hard to use that to get some votes. If Trump takes the swing states of Ohio and Pennsylvania, it will be because of that staffer’s insight. Maybe s/he’ll write a book about it.
Until then, here’s more about my book, Ghosts of Tom Joad: A Story of the 99 Percent:
In portraying herself as a virtual Barack Obama third term, Clinton ties herself not only to a foreign policy that continues to inflame the Middle East, but also to his domestic economic record. A key element is job creation, the cornerstone of any real growth.
For example, during her acceptance speech at the Democratic National Convention, Hillary Clinton praised Obama’s efforts to steer the nation’s recovery.
“Now, I don’t think President Obama and Vice President Biden get the credit they deserve for saving us from the worst economic crisis of our lifetimes,” she told the crowd in Philadelphia. “Nearly 15 million new private-sector jobs… And an auto industry that just had its best year ever.”
Leaving aside some fuzzy math to get to that tally of 15 million new jobs, Clinton purposefully passes off quantity with what we’ll call quality.
A quality job is one that is sustainable, with full-time status and benefits, the kind of work that both rebuilds America’s soul while at the same time makes work more profitable than unemployment benefits and aid. Most importantly for the greater economy, a quality job is one that allows the worker to put money into society. Rising tide lifting all boats.
The latest job statistics show that is not what is happening.
While the Bureau of Labor Statistics announced the U.S. added some 177,000 jobs in August, all of them were in the low-paying service industry. Fast food, store clerks, that sort of thing. Basically Americans not making anything, but simply passing existing money around in some zero-sum game. A cashier earns a dollar which she turns over to the dry cleaner who later buys a Big Mac. At some point a corporation pulls that dollar out of the hands of its workers as “profit,” perhaps to offshore it to avoid taxes.
And if the job stats reporting only new service jobs were not dismal news enough, Bureau results show that in the same time period some 2,000 construction and 5,000 goods-producing jobs evaporated. In July, mining and logging companies dumped 7,000 positions. Those thousands of workers were thrown into the pool seeking employment.
No one is saying we should revive so-called dead industries, or that America revert fully to a 1950s style heavy iron economy. But economics is about people, and those people need jobs they can earn a living doing.
BONUS: Clinton’s solution? Hillary claims during her first 100 days in office she will launch “the biggest infrastructure and jobs program that we’ve had since World War II.” That mirrors the huge stimulus program that President Obama signed into law in 2009, during his own first 100 days in office.
Clinton’s plan would see $300 billion in spending on transportation projects spread over five years, $60 billion per year. She plans to raise the money via new taxes on the wealthy that Congress is highly unlikely to agree to.
How ya’ doing? I mean money-wise. Too much? Maybe not enough?
So let’s listen to economist Paul Krugman explain why we are so screwed. Not we will be screwed, or maybe things will go that way, or we will in the future. Nope, it already happened, though most of us haven’t yet figured it out.
Krugman, and the economist he discusses, Thomas Piketty, paid attention in math class, and the other classes, too. That’s why they understand this stuff and I’m still trying to suss out why no matter how many hours I stay on the job and how much I save, it is never enough.
In case you’re reading this on your 15 minute break at Target, I’ll try to summarize.
The American Dream (Patrimonial Capitalism)
The myth of the American Dream is the dominating factor in keeping people mostly complacent in the United States. You know it — work hard, and your life will improve. Well, maybe not your life, but your kids’, or at least your grandkids’. If that doesn’t work, it is the fault of the Irish immigrants, or the darn Chinese, or those welfare freeloaders. Ask Donald Trump how it all works.
The thing that makes the myth so powerful is that the tiny percent that is true sounds better than the 99 percent which is a lie. As long as near-constant growth could be assured, enough pieces would fall to the the lower and middle classes to make the Dream seem real. It helped that a kindly media would promote the heck out of every exception, whether it was the shoeshine boy in the late 19th century who went to college, or the plucky guys who invented some new tech in their garage and became billionaires. See, you can do it too, just like if we run hard enough, everyone can be in the Olympics. It’s just a matter of wanting it, believing in yourself, having passion and grit, right?
The Undeniable Reality of the Now
The bulk of the industrial jobs are gone and never coming back; ask Detroit, or the people in Youngstown and Weirton. People have been talked out of most union jobs, convinced somehow that organizing was not in their own interest, and now they find themselves accepting whatever minimum of a wage they can get. Food stamps and other need-based programs are finding more and more middle class users, as suburban people who once donated to charities are now lining up out front of them. Health care paid for by our own taxes is seen as a give away to lazy people. This is the stuff Bernie Sanders talked about.
Like with gravity, the universe doesn’t care if you “believe” it or not; it is just true, independent of what you “think.” That you have been taught this all is something you can choose to believe or not is the weight that holds us all down.
Drilling Down Into Our Miserable Lives
In case you have a few more minutes on your break, or if you’ve been laid off since starting this article, here are some more things happening out there whether you believe in them or not. You can read more about all of this in Thomas Piketty’s book, Capital in the Twentieth Century.
— Our income inequality rate is higher than it ever has been in our own history, is growing, and is higher than in countries in Western Europe and Canada.
— The inequality is driven by two complementary forces. By owning more and more of everything (capital) rich people have a mechanism to keep getting richer, because the rate of return on investment is a higher percentage than the rate of economic growth. This is expressed in Piketty’s now-famous equation R > G. The author claims wealth is growing at six-to-seven percent a year, more than three times faster than the size of the economy.
— Wages are largely stagnant, or sinking, driven by factors in control of the wealthy, such as automation that eliminates human jobs and the not-adjusted-for-inflation minimum wage more and more Americans now depend on for their survival.
— All of this is exacerbated by America’s lower tax rate on capital gains (how the rich make their money) versus wages (how the 99 percent make their money.)
— Because rich people pass on their wealth to their relatives, the children of rich people are born rich and unless they get really into fast women and cocaine, will inevitably get richer. They can’t help it. The gap between the one percent and the 99 percent must grow.
— Social reforms, such as increased education opportunities and low-cost health care, are incapable without tax changes significantly affecting income equality. The only people who can change society are those who profit from it not changing. That’s the big reveal on why we are in so much trouble.
FUN FACT: Until slavery was ended in the United States, human beings were also considered capital, just like owning stocks and bonds today.
I always found myself giggling during the Democratic debates when Hillary would ask Bernie how he was going to pay for things like healthcare or college tuition, and then Bernie stammering to find an answer.
They both knew the secret but neither would say it — there’s plenty of money, we just don’t want to spend it on Americans.
We think of that as freeloading, unearned stuff. Go get a job, moocher. But then move the same question overseas and everything changes. There is always plenty of money, and the people getting free stuff from that money aren’t moochers. They’re allies.
So how much healthcare would $1.7 billion buy? Because that’s how much money the United States just laid out to buy radios for the near-useless Afghan Army. And while I don’t know how much healthcare the money would buy, I do know it will purchase a helluva lot of radios. Is everyone in Afghanistan getting one? Maybe we’re buying them for the Taliban, too.
Anyway, the $1,700,000,000 radios for Afghanistan contract was just recently awarded to the Harris Corporation. And here’s a funny thing: only one company — Harris — actually put in a bid for the contract.
But the Afghans must need more stuff than just radios, and so the U.S. has money ready for that.
The United States will provide $3 billion to the Afghan National Defense and Security Forces from 2018 to 2020 for, well, we don’t really know. Meanwhile, the U.S. Special Representative for Afghanistan and Pakistan said the White House planned to ask Congress for about $1 billion a year in development and economic assistance for Afghanistan through 2020. And if that isn’t enough, the United States and its allies are expected to raise $15 billion for the Afghan National Defense and Security forces at a NATO summit scheduled for next month in Warsaw.
There’s money. You just can’t have any of it, moochers.
Of course, his self-making, like that of many wealthy people, is based in large part on a wealthy parent giving him a ton of money. Why work for a living when you can just hang around drinking single malt until daddy dies and leaves you his money?
Trump’s papa left an estate valued at between $100 and $300 million in 1999. A nice start for a career in real estate for Don and his siblings.
Getting All the Monies
Now the idea that parents should be able to leave their money to their kids is all A-OK. That the hyper-wealthy can do it with little or no significant tax is not OK. It is one of the prime drivers of future economic inequality in the U.S. Absent a change in the law that will happen when pigs fly into a snowy hell, rich kids will only get richer, and then pass on their buckaroos to their heirs. They’ll have all the monies.
In the words of one economist, even though the American dream is pulling yourself up by your bootstraps, we’ve made ample room in it for people whose boots are handed down.
How Estate Taxes Work
The first $5.43 million per heir is fully exempt from any tax. Spread the money around to siblings, spouses, kids and grandkids, and you can shield a bundle from tax easily. In fact, that system means 99.8 percent of all estates owe no estate tax at all. There is no reason the exemption has to be $5.43 million except to favor the wealthy, and there should be an overall cap on how much can be shielded from tax to prevent fake families from splitting things all up.
For the small number of estates actually subject to some taxes, those taxes of course are due only on the portion of an estate’s value that exceeds the exemption level. So, a $6 million estate would owe estate taxes on only $570,000. Except that heirs can often shield a larger portion of the estate from taxation through deductions, loopholes and discounts written into the tax code. So, while the on-paper tax rate for estates is 40 percent, most pay about 16 percent in reality.
As an example of the complexity of estate planning-tax avoiding available to the rich, consider the grantor retained annuity trust. The estate owner puts money into a trust designed to repay the estate the initial amount plus interest at a rate set by the Treasury, typically over two years. If the investment — typically stock — rises in value any more than the Treasury rate, the gain goes to an heir tax-free. If the investment doesn’t rise in value, the full amount still goes back to the estate. Such techniques have been described as a “heads I win, tails we tie” bet.
A Reasonable Idea
If inheritances could be taxed reasonably, enough money would trickle down the legs of the rich that some societal benefits would accrue.
Unfortunately, all three Republicans in the presidential race promise to abolish the estate tax altogether. Hillary and Bernie offer only weak promises of reform, focused on rolling the tax back to its (higher) 2009 levels. But they’ll need Congressional approval for that, so, no.
It will be no surprise that American estate taxes are well below average among the countries in the Organization for Economic Co-Operation and Development.
I know, I know, math and numbers are hard. So here it is in very simple words: by not fairly taxing the estates of the wealthy, we are locking in our staggering economic inequality for future generations.
FUN FACT: The wealthiest ten percent of Americans takes home about half of all income. The richest 0.1 percent holds 22 percent of the country’s wealth.
If at where you work you spent $759 million on something, and then told your boss you have no idea if anything was accomplished, and that the little data you do have is probably fraudulent, how might that work out for you?
If you are the U.S. government in Afghanistan, you would actually have no problem at all. Just another day at the tip of freedom’s spear, pouring taxpayer cash-a-roni down freedom’s money hole.
The ever-weary Special Inspector General for Afghan Reconstruction (SIGAR), chronicling U.S. government hearts and minds spending in Afghanistan over the last 15 years, issued a new audit on Department of Defense, State Department and USAID’s $759 million “investment” in primary and secondary education in Afghanistan. Here’s what they found:
— While USAID had a defined strategy for primary and secondary education in Afghanistan, DOD and State did not. They just spent money here and there without adult oversight.
— DOD, State, and USAID have not adequately assessed their efforts to support education in Afghanistan. DOD did not assess the effectiveness of its education efforts, and State only evaluated self-selected individual programs. Same for USAID.
— Without such comprehensive assessments, DOD, State, and USAID are unable to determine the impact that the $759 million they have spent has had in improving Afghan education. They agencies do, however, continue to spend more money anyway.
— In 2014, USAID cited Afghan government data showing increased student enrollment from 900,000 students in 2002 to a whopping million in 2013 as evidence of overall progress in the sector. Unfortunately, USAID cannot verify whether or not the Afghan data is reliable. In fact, both the Afghan Ministry of Education itself and independent assessments have raised significant concern that the education data is not true.
Interest from the American public remains at exactly zero, because we don’t need no education about where our government spends our money.
BONUS: Anyone’s town out there in America that would not benefit from a handful of cash out of that $759 million spent on Afghan schools? Flint? Newark? Philly? Bueller? Anyone?
One of the defining aspects of traditional capitalism is that the Capitalist, that one percent guy from the Monopoly game with the top hat, spats and monocle, invests capital. That investment, in land, a factory, an oil well, creates value (the monies) for him, and jobs for the rest of us.
The idea is that because the Capitalist risks his money/capital, he is assuming the greater risk and thus deserves the greater gain. This has been the way things have worked since feudal lords controlled land and allowed sharecroppers to keep pennies on the dollar they earned for him, on through to when people built factories and opened stores.
Traditional capitalism is that stuff you slept through in Econ 101. Risk gain, employment, jobs, whatevers unless you live off an allowance from Daddy.
Until the arrival of the gig economy.
The Gig Economy
For those who are living off an allowance from Daddy, or are one of the eleven Americans who still hold a traditional “job” where you do stuff, get paid a regular salary not tied to how many sneakers you sew each day, and receive those “benefits” you once heard grandpa speak of, the gig economy is where you work piecemeal, get paid a few table scraps and have no benefits or job security because you really don’t work for anyone.
These “gigs” are almost always performing low-level services, such as delivering food to or driving around people much wealthier than you. Those people cannot be bothered to walk to a restaurant or pilot a motor vehicle or clean up their kids’/doggies’ poo, so you do it because you don’t have many other options in hope of earning something more than minimum wage.
The gig economy is sometimes also known as the 1099 economy, after the IRS form used to report non-employee earnings, or the on-demand economy based on the way people get or don’t get opportunities to work. No one knows how big this shadow economy is, given the shifting nature of the work and the cash payments sometimes involved. But it is big and it is growing.
The less-discussed game changer of the gig economy is that traditional capitalists no longer need to put much money at risk at all. In fact the companies behind the gig economy, the people who run Uber and the others, are economically viable because they offload their cost of capital — the investment and depreciation on cars and the cost of keeping a driver fed and healthy — onto the drivers, who are only willing to accept such a bad deal because the labor market sucks. See how that works?
And if that’s not problem enough, the cheaper wages paid (for example, by Uber) to drivers, and thus the cheaper rides, also drive business with capital structures which make social sense out of business. They can’t compete with “drive your car into the ground, make whatever you might get along the way while we cash in.”
And when you talk about driving these days, you’re talking about Uber.
Uber has succeeded in almost completely pushing its operating costs (absent the relatively small investment needed to run the app and backoffice) down to people who often can’t afford it but are lured into trying because the alternatives seem even lower paying.
To drive for Uber, you need a late model car, in great shape, with four doors. It doesn’t have to be a black sedan, but if it isn’t Uber will exclude you from a number of ride requests.
So where does someone without a lot of money get a late model black sedan? If they can afford it, they buy one, but that means laying out a lot of money and taking on some heavy credit up front. More than likely, however, what a budding Uber driver does is lease his black sedan from an Uber-suggested third party contractor. You’ll find them right on the Uber website. They’ll take an average $500 deposit to sign you into a three year lease running $300 a month. So that all adds up to a capital investment by the driver of $11,300 over three years.
Next capital cost to the driver is insurance, expensive insurance, because the cheap minimum stuff you buy off the TV ads is not going to cover you driving passengers around. Don’t worry, though, as Uber will sell you just what you need, albeit at $4,600 a year. That works out to $13,800 for three years.
And, hey, driver, you need to pay for licensing, gas, maintenance, fines, regular car washes, depreciation of your vehicle and all the other stuff. Over three years, let’s call it $5,000.
So overall, the cost for you to get a job with Uber is about $30,100 over three years. If you don’t have the cash on hand, and need to borrow it, add on 13% interest or more if using a credit card, maybe more for second-level sources for people who don’t qualify for good credit.
But wait — many jurisdictions are now demanding additional licenses from Uber drivers, claiming they are operating a business. One of the more extreme plans under consideration is in Newark, New Jersey. The city is looking at a $500 annual fee to operate in the city, $1,000 additional license to pick up and drop off passengers at the airport and Newark Penn Station, and a $1.5 million insurance coverage requirement.
If the driver fails to make any of those payments, s/he instantly becomes unemployed, unable to pay enough to have a job to earn enough to pay for that job. This is, in economic terms, an extractive process — a third party takes profit, leaves the true costs of capital to the workers, and when they fail, to society who will need to step in and provide food benefits as a last resort.
In addition to having to raise their own capital to essentially buy themselves a job driving for Uber, drivers face risks far above the simple “risk” associated with any “investment.”
In addition to the obvious risks of accidents, bad reviews, and good/bad weather that cuts the number of people seeking rides, perhaps the biggest financial risk to any driver is Uber itself.
Imagine a situation where there are 10 riders in a city, and ten Uber drivers. For argument’s sake, let’s say each driver gets one fare a night. Uber makes money on its 27% share of 10 rides. Now, increase the number of Uber drivers to 100 (which makes getting a ride easier and faster for quicker profit for Uber and protects Uber when drivers quit) while the number of rides stays at 10. That means 90 drivers make nothing each night. Independent of the number of drivers, Uber still makes the same money on its share of 10 rides.
In 2015, Uber doubled the number of drivers in the U.S. As of October 2015, the company had 327,000 active drivers, more than doubling the 160,000 that gave rides in 2014. Some of the new drivers are absorbed by growth in ridership, some are not.
The other risk is that Uber sets prices, which vary even though the driver’s costs do not. For example, in order to theoretically boast ridership, Uber lowered prices in New York City such that individual drivers saw an average decline in payouts of 15%. The company also experimented with rate cuts in 99 other North American cities.
UberPool is a new service where multiple customers headed the same way can “share” a car.
Imagine two Uber drivers each carrying a single passenger along the same route which results in a fare of $11. After Uber takes its brokerage cut as well as its “safety fee” (even though the company still has the poorest driver background checks in the taxi industry), each driver ends up with $8 each in pocket, while Uber ends up with $6, a 27% commission for Uber.
Now along comes UberPool, and these same two serial riders get picked up by a single driver. Since UberPool offers passengers a substantial discount for sharing a ride, that means each passenger now pays $6 (in this example). After Uber takes its commission, including the safety fee, the payout to the driver is $4 for each passenger, or a total of $8. So the driver makes the same amount, but Uber’s take of the overall $12 for this ride is also $4 – a 33% overall commission. So Uber makes a higher percent on UberPool rides, yet the driver makes about the same amount.
The other side of financial risk is financial return, what you get after investing capital. For Uber drivers, there is no realistic average. Take a look at one of the many online driver forums and you’ll see a range of claimed payouts so wide (from sub-minimum wage to thousands a week) that it is of no real value. Here is at least one reasonable breakdown of costs and payouts.
Leaving aside the forum posters who are just lying for whatever reason, the variables of driving for Uber are such that averages are not really possible. One of the few variables under the driver’s control is number of hours worked, and many of those who claim high weekly payouts also claim to drive 12 or more hours a day. Leaving aside the not inconsequential question of whether you feel it’s safe to catch those guys 11.5 hours into their shift, it leaves the economic question of how many hours a week it takes in the gig economy to earn a decent living.
The New World Order
Unlike conventional labor, where one starts at zero on day one and begins earning money, or traditional self-employment where in return for capital investment one keeps 100% of the profits, the gig economy’s main point is that people working for places like Uber start behind, maybe $10,000 in the hole after they secure a car, insurance and all the rest. Uber, however, begins profiting from the driver’s labor immediately, and loses nothing when the driver is pushed aside.
All of the gain, none of the risk, in the New Economy where people pay for their own jobs.
What other business is there where the Capitalist takes almost no risk, invests no capital, and pushes all that down on his workers alone, while raking in money? Oh, rights, pimps. Welcome to the gig economy.
Like every American city in the Age of the 99 Percent, Los Angeles has a significant homeless problem.
Full-on shantytowns are now a feature of LA’s urban landscape, with colonies of desperate men and women setting up camps, and building shelters out of tarps, wherever they can find safe space to do so. The city’s homeless population rose 20% over the last two years, now estimated at 26,000 human beings, fellow Americans.
What to do about such a problem? Build affordable housing? Increase shelter outreach? Provide mental health and substance abuse counseling? Job training? Compassion for those less fortunate?
The Los Angeles City Council approved a law Wednesday that limits the possessions of homeless people to what can fit in a 60-gallon trash bin. The measure spoke to the will of the people, passing on a 13-1 vote, with some hippie councilman opposing. Another city councilman, who voted for the law, said the measure “balanced the city’s need for safe and clean streets with homeless people’s personal property rights.”
As long as those personal property rights are limited to what the LAPD, acting on behalf of the well-to-do, can easily throw away.
But some good news: the council backed off even stricter rules that would have limited homeless people to what they could carry in a backpack. But the law allows the city to clamp down in this way in the future without further public discussion.
Under the new measure, the city can impound homeless people’s “excess personal property” after providing 24 hours’ notice. The city will store the items for 90 days, during which time the owners can claim them. But they cannot evade further confiscation by moving the items to another public area, the ordinance says.
With no advance warning, the city can seize and impound a tent that has not been taken down during the day. Bulky and contaminated items can be seized and discarded without warning. Wheelchairs, crutches and walkers are currently exempt.
“We recognize this is just one step forward to address the homelessness crisis,” said the president of the Central City Association of Los Angeles.
Why, next thing you know the LAPD will just start putting rounds downrange and deal with the homeless in what will no doubt be called the final solution, of freedom.
(FYI: The photo above is my own, taken in New York City’s Washington Square Park; the one below, of Tom Morello of Rage Against the Machine, was taken by someone else)
Despite advances in medicine, technology and education, the longevity gap between high-income and low-income Americans has widened sharply. You want to talk inequality? Talk about this.
The poor are losing ground not only in income, but also in years of life, the most basic measure of well-being. In the early 1970s, a 60-year-old man in the top half of the earnings ladder could expect to live 1.2 years longer than a man of the same age in the bottom half, according to an analysis by the Social Security Administration. By 2001, and he could expect to live 5.8 years longer than his poorer counterpart.
New research offers even more horrifying numbers. Economists found for men born in 1920, there was a six-year difference in life expectancy between the top 10 percent of earners and the bottom 10 percent. For men born in 1950, that difference had more than doubled, to 14 years.
The serfs are dying. The castle-owners are buying themselves more years.
Poor health outcomes for low-income Americans have dragged the United States down to some of the lowest rankings of life expectancy among industrialized nations. The Social Security Administration found, for example, that life expectancy for the wealthiest American men at age 60 was just below the rates in Iceland and Japan, two countries where people live the longest. However, for Americans in the bottom quarter of the wage scale, their life expectancy is closer to that in Poland and the Czech Republic.
The gap in life spans started widening about 40 years ago, when income inequality began to grow.
Earlier in the 20th century, trends in life spans were of declining disparities, because improvements in public health, such as the invention of the polio vaccine and improved sanitation, benefited rich and poor alike. The broad adoption of medication for high blood pressure in the 1950s led to a major improvement for black men, erasing a big part of the gap with whites. But medical improvements can also drive disparity when they disproportionately benefit affluent Americans; for example, cutting-edge cancer treatments.
Imagine that — in one of the world’s richest countries, people die simply because we can’t find a way to provide them good healthcare as does the rest of the civilized world.
In America, we have a very crude understanding of social welfare programs. For most Americans, anything the government gives to its people (i.e., us) to keep us healthy, fed and educated, is a “handout” to lazy people who don’t deserve it.
Helping each other, using our tax money for us, as does most of the civilized world, is somehow wrong. In America, we’d prefer you starve to death, quietly if possible, as the rest of us are binge watching Netflix whilst eating Doritos.
Doritos we worked for, dammit. Albeit at our minimum wage jobs at Walmart, but whatever.
And with that, welcome to that rotting greenish boil head otherwise known as Oklahoma, where the Republican Party compared Americans receiving food stamp benefits to park animals fed by the public.
In the since-deleted Facebook post, the Oklahoma GOP offered a “lesson” by comparing the distribution of food stamps to 46 million Americans to a policy of the National Park Service to discourage the public from feeding animals “because the animals will grow dependent on handouts and will not learn to take care of themselves.”
Party Chairman Randy Brogdon offered a faux-apology in another Facebook post: “I offer my apologies for those who were offended – that was not my intention.”
Which is hilarious and clear proof he was dropped on his head as a child by his alcoholic mother, because of course it is obvious that comparing needy people to animals is offensive to absolutely everyone. Even a park animal could see that.
This also isn’t the first time the GOP has compared Americans to animals. In 2014, South Dakota Senate candidate Dr. Annette Bosworth’s posted a nearly identical post to her Facebook campaign page:
FUN FACT: A very large percentage of food stamp recipients are children (“cubs”), the elderly, and disabled people. Maybe it’s time to thin the herd.
Every candidate shouts about job creation, and some talk about the recovery from the last recession. Every month the Department of Labor releases new statistics about how many jobs have been created, improvements in the unemployment rate, and on and on.
There are parts of the society and the country where some of that is even partly true. But for about 20% of our states, it is not even partly close. An awful lot of the good news is just a numbers game.
Data compiled by the Associated Press shows ten U.S. states still have not regained all the jobs they lost in the Great Recession, even after six and a half years of “recovery,” while many more have seen only modest gains.
The figures are one more sign of the economic inequality, the one field America remains the undisputed global leader. The on-the-ground reality of negative job growth is why many Americans feel the economy has passed them by, and fuels support for angry candidates Donald Trump and Bernie Sanders.
Wyoming has three percent fewer jobs it did when the recession began. Alabama’s job total post-recession is -2.7 percent, followed by New Mexico at -2.6. New Jersey (Chris Christie!) has one percent fewer jobs than it did at the end of 2007, and Missouri is just below its pre-recession level. The other five losers are Mississippi, Nevada, Maine, Connecticut, and West Virginia.
Among the other states, several show only small gains past pre-recession job totals. Illinois, statewide with a population of over 12 million, has only 8,600 more jobs than it did in December 2007. Arizona’s job count is up just 9,200 with a population of six million (not counting illegal aliens.) And Ohio (Kasich!!!) has added just 58,100 jobs with its population of almost 12 million. Those gains are more or less (it’s less) statistically insignificant.
The states that saw the highest rates of job growth tell the story of the last few years. Some of the biggest gainers include:
Washington DC is a big, big winner, with significant growth from America’s largest employer, the federal government, all fueled significantly by the very profitable War of Terror.
The oil and gas drilling boom lifted North Dakota’s job count by more than 20 percent, though falling energy prices have caused significant layoffs in the past year. Need to check back with North Dakota in a year or two.
Texas has also benefited from the energy boom, as well as greater high-tech hiring in cities like Austin.
Utah and Colorado have also benefited from fast-growing information technology companies. Colorado especially has a large aerospace (read: defense) industry, so good for them.
Are international trade deals, such as NAFTA and the TPP, good for America, or bad for America?
The answer is yes, depending on who you ask.
What Are NAFTA and TPP?
The North American Free Trade Agreement (NAFTA), which went into force in 1994, and the Trans-Pacific Partnership (TPP), which is still pending ratification in the U.S. and elsewhere, are examples of the type of broad-based, large-scale international trade agreements now discussed by American presidential candidates with the same tone of voice used to speak of that wet soup in street gutters. Indeed, even discussing the subject of whether they are good or bad for America may be little more than an academic argument at this point; Trump has sworn to make no new trade agreements and says he will not support the TPP. Hillary is a little cagier in her response, but, for the record, for now, says she too will not support TPP.
But let’s slow things down a bit, and look into that key question, of how things like NAFTA and the TPP might affect Americans. After all, candidates do occasionally say one thing during the campaign, and another when actually in office, right?
International trade deals are agreements between countries, often groups of countries, that are designed to promote more trade, more goods and services, and sometimes more workers, moving across borders. The deals typically reduce taxes and tariffs, change visa rules, and sometimes soften regulations that keep foreign products out. The phrase used most often is “lower the barriers.”
So, if widgets made expensively in the U.S. can be made more cheaply in Vietnam and then imported into the U.S., something like TPP can facilitate that by lowering American tariffs on widgets. Meanwhile, Vietnam might be required to change its agricultural import system to allow American genetically modified fruit to flow into Hanoi’s supermarkets.
NAFTA is a good place to start in learning more, as it involves three countries — the U.S., Canada, and Mexico — that generally get along, play reasonably fair, and already had a robust cross-border trade. Lots of non-variables there. Plus, since NAFTA’s been around for over 20 years, there should be a decent consensus on how it worked. That will provide a real world example to weigh against a newcomer like the TPP.
There are numbers. For example, the U.S. Chamber of Commerce says increased trade from NAFTA supports about five million U.S. jobs. Unemployment was 7.1% in the decade before NAFTA, and 5.1% from 1994 to 2007. But then again unemployment from 2008 to 2012 has been significantly higher.
You can find similar ups and downs on imports and exports, value of goods, and the like. Some are clearer than others; since 1993, U.S. exports to Canada and Mexico have climbed 201 percent and 370 percent. The problem is trying to attribute them. Global economics is a complex business, and pointing to a singularity of cause and effect is tough.
Want to see for yourself? Here, and here, and here, and here are articles from smart people who can’t figure out if NAFTA has been a good thing or a bad thing. It is not that simple. And NAFTA, remember, was just three countries. The TPP would draw in 12 nations.
The Latin phrase cui bono means “who benefits?,” and is used by detectives to imply that whoever appears to have the most to gain from a crime is probably the culprit. More generally, it’s used in English to question the advantage of carrying something out. In the case of things like NAFTA and TPP, the criminal context might be more applicable.
Most everyone can agree that NAFTA made certain products cheaper for American consumers, as manufacturing costs are lower in Mexico than Idaho. American companies who found new export markets abroad also saw a rising tide of new money. The problem is that for many Americans, in the words of historian Morris Berman, that rising tide lifted all yachts, and not all boats.
Allowing American firms to make things abroad and import them into the U.S. free or at low tariff cost moves manufacturing jobs out of the United States. No argument there among economists. The current celebrity case, cited by several candidates, is that of Carrier. Carrier just sent 1,400 jobs making furnaces and heating equipment to Mexico. Workers there typically earn about $19 a day, less than what many on Carrier’s Indiana assembly line used to make in an hour.
Carrier will see higher profits due to lower costs. They may or may not pass on some portion of those savings to American consumers. They have put Americans out of work.
Economists will often claim that such job losses are part of the invisible hand, how capitalism works, duh. The laid off workers need to learn to code and build web pages, migrate to employment hot spots such as California like modern day Tom Joads. But pay a visit to nearly anywhere in what we now blithely call America’s Rust Belt, and see how that’s working out.
Retraining industrial workers just does not happen overnight, even if there was free, quality education (there’s not.) Indeed, since the beginnings of the hollowing out of America, it has not happened at all. The risk is also that retraining takes unemployed, unskilled people and turns them into unemployed, skilled people. Training is only of value when it is connected to a job. Remember, as all those unemployed Carrier people somehow learn to build web pages, America’s colleges are churning out new workers, digital natives, who already have the skills. Even Silicon Valley’s needs are finite.
Patterns do emerge, and the American people know they’ve been had at the expense of corporations that do indeed benefit from international trade agreements. Many Americans see that average workers and thousands of communities have been screwed by trade agreements which put them in direct competition with low wage workers around the world.
Everybody Wins, Except for Most of Us
Economist Robert Scott says he knows. He claims over the last 20 years, trade and investment deals have increased U.S. trade deficits and cost Americans their jobs. For example, the agreement allowing China into the World Trade Organization led to trade deficits that eliminated 3.2 million jobs between 2001 and 2013. Meanwhile, the United States already faces a trade deficit with countries in the proposed Trans-Pacific Partnership that cost two million U.S. jobs in 2015.
In his 2008 book, Everybody Wins, Except for Most of Us, Josh Bivens shows that while the most privileged Americans have benefited from cost-savings due to trade, increased global integration harms working Americans. Bivens estimated that the growth of trade with low-wage countries reduced the median wage for full-time workers without a college degree by about $1,800 per year in 2011.
A Broader View
Of course there are dissenting opinions; another economist cautions “to understand how dismantling trade barriers helps the country, we also need to take a broader view of the American economy, and not focus solely on disruptions and lost jobs in particular sectors.”
And that makes sense, if you believe economics is about money.
But if one is asking whether or not international trade agreements are good, or bad, for America, one needs to think bigger. On a whole-of-society level, economics is about people. We all want American companies to make money. It’s also great that Walmart is full of low-cost consumer electronics from Asia, or Carrier air conditioners fresh from Mexico, but you need money — a job — to buy them.
Think broader, and you’ll see economics is about people. Let that answer the question for you about whether international trade agreements are good or bad for your part of America.
The next time a candidate or reporter asks during a debate about education or healthcare “But how are you going to pay for that?” I would like the person being questioned to respond “The same way we find money to pay for Iraq.”
So maybe it would just be better for Flint, Michigan to claim it is under attack by ISIS instead of just being poisoned because no one has the money to fix America’s infrastructure.
See, each month, Iraq’s government pays out nearly $4 billion in salaries and pensions to the military and a bloated array of corrupt public-sector workers. But with more than 90 percent of government revenue coming from oil, it is bringing in only about half that as crude prices plunge. Some Iraqi officials and analysts say the government might struggle later this year to pay the seven million people on the public payroll, which could trigger mass unrest.
As a sign of the times, Iraqis are facing more nominal charges every day. Hospitals, which have long treated Iraqis free of charge, have introduced fees, for example, even for those visiting sick relatives.
For Iraq, the decline comes in the midst of an already destabilizing war. There are bills for reconstructing flattened cities destroyed for freedom, and assistance for the 3.3 million Iraqis who have been internally displaced over the past two years, with more expected to come.
So — good news, at least for Iraq — the United States is stepping in with U.S. taxpayer money to make sure the country can continue military spending while it seeks international loans.
So, while there is apparently no way anyone can conceive of to pay for fixing America’s infrastructure, making higher education affordable, reducing healthcare costs or any of those other icky socialist thingies, there is money for Iraq!
BONUS: No one really knows how much money the U.S. has already spent in Iraq, but it is way over two trillion dollars.
BONUS BONUS: The golden eagle shown above was paid for by the American taxpayers in 2010 as part of the reconstruction of Iraq. The area where it is shown is now devastated by the current fighting. I took the photo myself.
CEO Andy Puzder (above) said “We could have a restaurant… where you order on a kiosk, you pay with a credit or debit card, your order pops up, and you never see a person.”
Puzder’s interest in an employee-free restaurant has been sparked by rising minimum wages. “With government driving up the cost of labor, it’s driving down the number of jobs,” he says. “You’re going to see automation not just in airports and grocery stores, but in restaurants.”
The CEO has been an outspoken advocate against raising the minimum wage, writing op-eds on how a higher minimum wage would lead to reduced employment opportunities. “This is the problem with Bernie Sanders, and Hillary Clinton, and progressives who push very hard to raise the minimum wage,” says Puzder. “Does it really help if Sally makes $3 more an hour if Suzie has no job?”
So let’s unpack Puzder’s remarks, and call bullsh*t on him.
The federal minimum wage hit its high point in 1968 at $8.54 in today’s dollars and while this country has been a paradise in the ensuing decades for what we now call the “One Percent,” it’s been downhill for low-wage workers ever since. In fact, since it was last raised in 2009 at the federal level to $7.25 per hour, the minimum has lost about 8.1% of its purchasing power to inflation. In other words, minimum-wage workers actually make less now than they did in 1968.
So if Puzder cannot make money by paying circa-1968 wages with 2016 prices in force, he needs some business lessons.
But are wages really what this is all about? Let’s see what else Puzder had to say.
“They’re always polite, they always upsell, they never take a vacation, they never show up late, there’s never a slip-and-fall, or an age, sex, or race discrimination case,” says Puzder of swapping employees for machines.
Ah, yes, there we have it.
Puzder doesn’t want cheaper labor per se, he wants to quit trying to figure out how to make his people work like machines, and just have machines work like he wishes people would do. Stupid people, with their need for time off and desire not to be discriminated against.
BONUS: Guess what? One of the nation’s highest minimum wages, in Seattle, has not led to mass unemployment at all.
DOUBLE BONUS: In addition, while we all grieve for poor CEOs forced to pay out a living wage, think bigger. Higher wages mean fewer people needing food assistance, which means lower taxes. Higher wages also puts more money into the economy, usually the very local economy. Unlike wealthy people like CEOs, who tend to save their money or invest it, lower income people spend their wages. An extra dollar to a Carl’s, Jr. worker moves quickly into the hands of a local food store, which uses the dollar to purchase goods, which boosts the whole blessed mess.
SUPER SIZE BONUS: Bloomberg reported Puzder’s salary and other compensation as $4.485 million, so he is doing well. His restaurant chain is doing well, too, as profits rose more than 30 percent last year.
DESSERT: Puzder also lobbied against a Department of Labor rule change that currently allows him to deny his restaurant assistant managers overtime by claiming they are executives.
A SECOND DESSERT: Puzder argues that social welfare “programs have the unintended consequence of discouraging work rather than encouraging independence, self-reliance, and pride, and that, because of government assistance, low-wage employees across the United States are refusing promotions and additional hours for fear of losing public assistance.”
So I’ll have fries with that bullsh*t please!
More Americans work for less than minimum wage than work for minimum wage. They are the people who occupy tipped positions, mostly working as servers in restaurants.
They fall outside the minimum wage, and thus do not have even the weak assurances of an income the minimum provides. And those tips — they are great at some swanky joints, weak at lesser ones. Tips ebb and flow, depending on the weather (rain and snow can keep customers home), cheapo patrons and which shift one pulls; daytime Tuesday is not as good as Saturday night. Or a four top who orders wine with each course, or that family on vacation who “just wants ice water.” Your income depends as much on luck as anything you do with your time and labor.
Or here’s one strategy that does not depend on luck: encourage your waitresses to dress sexy, such as at Hooter’s, to pull in more tips, mixing sexual exploitation with exploitation of wages.
And save the speech about how all these folks should go out and get a different job if they don’t like the system. Almost two million Americans work below minimum, and they do not have access to two million currently available, better paying, jobs.
But from the restaurant owner’s side, the deal is sweeeeeeeeeet. They get to pay subminimum wage, and leave it up to the customers to make up their payroll. And if the customer stiffs the waiter, that’s no skin off the owner’s nose. And of course some owner’s skim the tips, and/or require servers to share their tips with the back of the house kitchen staff, diluting a small amount of money further.
The owners have no interest in having the government mess with that solid gold system if it can be helped.
As an example, New York state’s hourly minimum wage for tipped workers rose from $5.00 to $7.50 on January 1 (standard, non-tipped, minimum wage is $9.00 an hour in the state), much to the dismay of the New York State Restaurant Association. The restaurant owners lobbying group sent a letter to NY Governor Andrew Cuomo demanding that he freeze the tipped wage for five years. This letter comes just weeks after the National Restaurant Association filed an appeal with the state Supreme Court, claiming that Cuomo’s plan to raise the minimum wage further by 2018 is part of a longstanding pattern of discrimination “against the hard working men and women that own New York’s restaurants.”
Implied is a hearty “up yours to the working men and women that work in New York’s restaurants.”
Oh, and by the way, want to know if your favorite restaurant owner supports the freeze? You can’t. The Restaurant Association’s letter had more then 100 restaurant owners included as signatories. However, the Association will not release the names of the signatories because restaurateurs who have taken “political stances” in the past “have received death threats.” So it’s a safety issue. Right.
Employers should be responsible for paying their own employees, not relying on customers to hand over cash just to keep
serfs servers on the job.
When presidential candidate Bernie Sanders talks about income inequality, and when other candidates speak about the minimum wage and food stamps, what are they really talking about?
Whether they know it or not, it’s something like this.
My Working Life Then
A few years ago, I wrote about my experience enmeshed in the minimum-wage economy, chronicling the collapse of good people who could not earn enough money, often working 60-plus hours a week at multiple jobs, to feed their families. I saw that, in this country, people trying to make ends meet in such a fashion still had to resort to food benefit programs and charity. I saw an employee fired for stealing lunches from the break room refrigerator to feed himself. I watched as a co-worker secretly brought her two kids into the store and left them to wander alone for hours because she couldn’t afford childcare. (As it happens, 29% of low-wage employees are single parents.)
At that point, having worked at the State Department for 24 years, I had been booted out for being a whistleblower. I wasn’t sure what would happen to me next and so took a series of minimum wage jobs. Finding myself plunged into the low-wage economy was a sobering, even frightening, experience that made me realize just how ignorant I had been about the lives of the people who rang me up at stores or served me food in restaurants. Though millions of adults work for minimum wage, until I did it myself I knew nothing about what that involved, which meant I knew next to nothing about twenty-first-century America.
I was lucky. I didn’t become one of those millions of people trapped as the “working poor.” I made it out. But with all the election talk about the economy, I decided it was time to go back and take another look at where I had been, and where too many others still are.
My Working Life Now
I found things were pretty much the same in 2016 as they were in 2012, which meant — because there was no real improvement — that things were actually worse.
This time around, I worked for a month and a half at a national retail chain in New York City. While mine was hardly a scientific experiment, I’d be willing to bet an hour of my minimum-wage salary ($9 before taxes) that what follows is pretty typical of the New Economy.
Just getting hired wasn’t easy for this 56-year-old guy. To become a sales clerk, peddling items that were generally well under $50 a pop, I needed two previous employment references and I had to pass a credit check. Unlike some low-wage jobs, a mandatory drug test wasn’t part of the process, but there was a criminal background check and I was told drug offenses would disqualify me. I was given an exam twice, by two different managers, designed to see how I’d respond to various customer situations. In other words, anyone without some education, good English, a decent work history, and a clean record wouldn’t even qualify for minimum-wage money at this chain.
And believe me, I earned that money. Any shift under six hours involved only a 15-minute break (which cost the company just $2.25). Trust me, at my age, after hours standing, I needed that break and I wasn’t even the oldest or least fit employee. After six hours, you did get a 45-minute break, but were only paid for 15 minutes of it.
The hardest part of the job remained dealing with… well, some of you. Customers felt entitled to raise their voices, use profanity, and commit Trumpian acts of rudeness toward my fellow employees and me. Most of our “valued guests” would never act that way in other public situations or with their own coworkers, no less friends. But inside that store, shoppers seemed to interpret “the customer is always right” to mean that they could do any damn thing they wished. It often felt as if we were penned animals who could be poked with a stick for sport, and without penalty. No matter what was said or done, store management tolerated no response from us other than a smile and a “Yes, sir” (or ma’am).
The store showed no more mercy in its treatment of workers than did the customers. My schedule, for instance, changed constantly. There was simply no way to plan things more than a week in advance. (Forget accepting a party invitation. I’m talking about childcare and medical appointments.) If you were on the closing shift, you stayed until the manager agreed that the store was clean enough for you to go home. You never quite knew when work was going to be over and no cell phone calls were allowed to alert babysitters of any delay.
And keep in mind that I was lucky. I was holding down only one job in one store. Most of my fellow workers were trying to juggle two or three jobs, each with constantly changing schedules, in order to stitch together something like a half-decent paycheck.
In New York City, that store was required to give us sick leave only after we’d worked there for a full year — and that was generous compared to practices in many other locales. Until then, you either went to work sick or stayed home unpaid. Unlike New York, most states do not require such a store to offer any sick leave, ever, to employees who work less than 40 hours a week. Think about that the next time your waitress coughs.
Minimum Wages and Minimum Hours
Much is said these days about raising the minimum wage (and it should be raised), and indeed, on January 1, 2016, 13 states did raise theirs. But what sounds like good news is unlikely to have much effect on the working poor.
In New York, for instance, the minimum went from $8.75 an hour to the $9.00 I was making. New York is relatively generous. The current federal minimum wage is $7.25 and 21 states require only that federal standard. Presumably to prove some grim point or other, Georgia and Wyoming officially mandate an even lower minimum wage and then unofficially require the payment of $7.25 to avoid Department of Labor penalties. Some Southern states set no basement figure, presumably for similar reasons.
Don’t forget: any minimum wage figure mentioned is before taxes. Brackets vary, but let’s knock an even 10% off that hourly wage just as a reasonable guess about what is taken out of a minimum-wage worker’s salary. And there are expenses to consider, too. My round-trip bus fare every day, for instance, was $5.50. That meant I worked most of my first hour for bus fare and taxes. Keep in mind that some workers have to pay for childcare as well, which means that it’s not impossible to imagine a scenario in which someone could actually come close to losing money by going to work for short shifts at minimum wage.
In addition to the fundamental problem of simply not paying people enough, there’s the additional problem of not giving them enough hours to work. The two unfortunately go together, which means that raising the minimum rate is only part of any solution to improving life in the low-wage world.
At the store where I worked for minimum wage a few years ago, for instance, hours were capped at 39 a week. The company did that as a way to avoid providing the benefits that would kick in once one became a “full time” employee. Things have changed since 2012 — and not for the better.
Four years later, the hours of most minimum-wage workers are capped at 29. That’s the threshold after which most companies with 50 or more employees are required to pay into the Affordable Care Act (Obamacare) fund on behalf of their workers. Of course, some minimum wage workers get fewer than 29 hours for reasons specific to the businesses they work for.
It’s Math Time
While a lot of numbers follow, remember that they all add up to a picture of how people around us are living every day.
In New York, under the old minimum wage system, $8.75 multiplied by 39 hours equaled $341.25 a week before taxes. Under the new minimum wage, $9.00 times 29 hours equals $261 a week. At a cap of 29 hours, the minimum wage would have to be raised to $11.77 just to get many workers back to the same level of take-home pay that I got in 2012, given the drop in hours due to the Affordable Care Act. Health insurance is important, but so is food.
In other words, a rise in the minimum wage is only half the battle; employees need enough hours of work to make a living.
About food: if a minimum wage worker in New York manages to work two jobs (to reach 40 hours a week) without missing any days due to illness, his or her yearly salary would be $18,720. In other words, it would fall well below the Federal Poverty Line of $21,775. That’s food stamp territory. To get above the poverty line with a 40-hour week, the minimum wage would need to go above $10. At 29 hours a week, it would need to make it to $15 an hour. Right now, the highest minimum wage at a state level is in the District of Columbia at $11.50. As of now, no state is slated to go higher than that before 2018. (Some cities do set their own higher minimum wages.)
So add it up: The idea of raising the minimum wage (“the fight for $15”) is great, but even with that $15 in such hours-restrictive circumstances, you can’t make a loaf of bread out of a small handful of crumbs. In short, no matter how you do the math, it’s nearly impossible to feed yourself, never mind a family, on the minimum wage. It’s like being trapped on an M.C. Escher staircase.
The federal minimum wage hit its high point in 1968 at $8.54 in today’s dollars and while this country has been a paradise in the ensuing decades for what we now call the “One Percent,” it’s been downhill for low-wage workers ever since. In fact, since it was last raised in 2009 at the federal level to $7.25 per hour, the minimum has lost about 8.1% of its purchasing power to inflation. In other words, minimum-wage workers actually make less now than they did in 1968, when most of them were probably kids earning pocket money and not adults feeding their own children.
In adjusted dollars, the minimum wage peaked when the Beatles were still together and the Vietnam War raged.
Many of the arguments against raising the minimum wage focus on the possibility that doing so would put small businesses in the red. This is disingenuous indeed, since 20 mega-companies dominate the minimum-wage world. Walmart alone employs 1.4 million minimum-wage workers; Yum Brands (Taco Bell, Pizza Hut, KFC) is in second place; and McDonald’s takes third. Overall, 60% of minimum-wage workers are employed by businesses not officially considered “small” by government standards, and of course carve-outs for really small businesses are possible, as was done with Obamacare.
Keep in mind that not raising wages costs you money.
Those minimum wage workers who can’t make enough and need to go on food assistance? Well, Walmart isn’t paying for those food stamps (now called SNAP), you are. The annual bill that states and the federal government foot for working families making poverty-level wages is $153 billion. A single Walmart Supercenter costs taxpayers between $904,542 and $1.75 million per year in public assistance money, and Walmart employees account for 18% of all food stamps issued. In other words, those everyday low prices at the chain are, in part, subsidized by your tax money.
If the minimum wage goes up, will spending on food benefits programs go down? Almost certainly. But won’t stores raise prices to compensate for the extra money they will be shelling out for wages? Possibly. But don’t worry — raising the minimum wage to $15 an hour would mean a Big Mac would cost all of 17 cents more.
My retail job ended a little earlier than I had planned, because I committed time theft.
You probably don’t even know what time theft is. It may sound like something from a sci-fi novel, but minimum-wage employers take time theft seriously. The basic idea is simple enough: if they’re paying you, you’d better be working. While the concept is not invalid per se, the way it’s used by the mega-companies reveals much about how the lowest wage workers are seen by their employers in 2016.
The problem at my chain store was that its in-store cafe was a lot closer to my work area than the time clock where I had to punch out whenever I was going on a scheduled break. One day, when break time on my shift came around, I only had 15 minutes. So I decided to walk over to that cafe, order a cup of coffee, and then head for the place where I could punch out and sit down (on a different floor at the other end of the store).
We’re talking an extra minute or two, no more, but in such operations every minute is tabulated and accounted for. As it happened, a manager saw me and stepped in to tell the cafe clerk to cancel my order. Then, in front of whoever happened to be around, she accused me of committing time theft — that is, of ordering on the clock. We’re talking about the time it takes to say, “Grande, milk, no sugar, please.” But no matter, and getting chastised on company time was considered part of the job, so the five minutes we stood there counted as paid work.
At $9 an hour, my per-minute pay rate was 15 cents, which meant that I had time-stolen perhaps 30 cents. I was, that is, being nickel and dimed to death.
Economics Is About People
It seems wrong in a society as wealthy as ours that a person working full-time can’t get above the poverty line. It seems no less wrong that someone who is willing to work for the lowest wage legally payable must also give up so much of his or her self-respect and dignity as a kind of tariff. Holding a job should not be a test of how to manage life as one of the working poor.
I didn’t actually get fired for my time theft. Instead, I quit on the spot. Whatever the price is for my sense of self-worth, it isn’t 30 cents. Unlike most of this country’s working poor, I could afford to make such a decision. My life didn’t depend on it. When the manager told a handful of my coworkers watching the scene to get back to work, they did. They couldn’t afford not to.
For the first time since the Great Depression, a majority of U.S. public school students come from low-income families, according to a new analysis of 2013 federal data, a statistic that has profound implications for the nation.
The Southern Education Foundation reports 51 percent of students in pre-kindergarten through 12th grade in the 2012-2013 school year were eligible for the federal program that provides free and reduced-price lunches, a common indicator of food at-risk students living below the Federal Poverty Line.
Bottom Feeders Not Fed
“We’ve all known this was the trend, that we would get to a majority, but it’s here sooner rather than later,” said Michael A. Rebell of Teachers College at Columbia University, noting that the poverty rate has been increasing even as the economy has improved. “A lot of people at the top are doing much better, but the people at the bottom are not doing better at all. Those are the people who have the most children and send their children to public school.”
Free, universal public education was a cornerstone of America’s growth, seeking to assimilate waves of immigrants and to provide them with the basic education needed in their day to participate in the economy, i.e., first an elementary education only, enlarged to include high school as demands changed. Things stalled out there.
The trend toward majority-poor students in that public education system suggests further sorting out, at very early ages, of our once semi-egalitarian society into Haves (the one percent) and Have Nots (the 99 percent; the numbers are not that sharp yet, but definitely aimed that way.)
Stupid people can’t get good jobs. But stupid people also do what they’re told to do, especially if they depend on you to keep their kids just barely out of starvation.
We Don’t Need No Education
In addition, the majority-poor schools are sliding away from their educational function and are becoming simply extension of the social services net.
“When they first come in my door in the morning, the first thing I do is an inventory of immediate needs: Did you eat? Are you clean? A big part of my job is making them feel safe,” said Sonya Romero-Smith, a veteran teacher at Lew Wallace Elementary School in Albuquerque. Fourteen of her 18 kindergartners are eligible for free lunches. She helps them clean up with bathroom wipes and toothbrushes, and she stocks a drawer with clean socks, underwear, pants and shoes.
Romero-Smith, 40, who has been a teacher for 19 years, became a foster mother in November to two girls, sisters who attend her school. They had been homeless, their father living on the streets and their mother in jail, she said. When she brought the girls home, she was shocked by the disarray of their young lives.
“Getting rid of bedbugs, that took us awhile. Night terrors, that took a little while. Hoarding food, flushing a toilet and washing hands, it took us a little while,” she said. “You spend some time with little ones like this and it’s gut wrenching. These kids aren’t thinking, ‘Am I going to take a test today?’ They’re thinking, ‘Am I going to be okay?’”
When most people talk about economics there are lots of statistics, as if economics is about math. Economics is really about people. It shows who we are as a nation and tells us what we will become. In 21st century America, our hope now is that we’ll someday better people than we have become. But do the math; it’ll be a hard road.
In its most individual definition, jobs and work earn people money. They can feed themselves and their families, live inside and all the rest.
But at a more societal level, a broader, more fundamental level, work is more. Work can define a person, work can give purpose, make someone feel useful, engage the resources of a society, create goals. You could almost call it a soul, knowing that work saved more lives than any preacher.
The absence of work does just the opposite. People may be saved from starving by public assistance or charity (a vital part of society, caring for one another), but without purpose, they become cynical. They turn to drugs, legal like alcohol or illegal like meth, to replace the purpose and to fill the time. Without work, people give up. Rock bottom is a poor foundation for a nation to build on.
So here’s what is happening in our America. See if you can figure out where this all leads to.
Manufacturing was until the late 1970s the source of unprecedented wealth, spread proportionally across the economic spectrum in America. There were super rich people, and there were poor people, but there was also a thriving middle class that accounted for a huge section of our society. Without those jobs, economic apartheid, the one percent and the 99 percent, are inevitable.
As just one example, since the 2009 taxpayer-paid bailout, General Motors has cut high-paid workers for cheaper labor, hiring. The automaker hired around 18,000 hourly production workers, allowing the company to remove skilled trade jobs. The Center for Automotive Research says General Motors Company saves approximately $57,000 a year per worker when it replaces a skilled $32 per hour union worker with a $15 per hour less-skilled, temp or non-unionized employee. These were once the “good jobs” that sustained a growing economy. They are gone. They have been replaced with…
Service jobs. Service jobs do not create anything. They simply move some money from one hand to another, with a larger company taking a cut and sending the cash off to another city, another state, or another country. In 2014 America, manufacturing employs 1/10 of Americans. Services accounts for nearly 90%. America’s largest single employer in 1960 was General Motors. In 2014, it is Walmart. The “occupations” that account for the most jobs now are retail salespersons, cashiers, and restaurant workers. Those jobs pay minimum wage or less (for restaurant workers who can get tips), rarely offer any benefits and are rarely full-time.
Working for subsistence wages, supplemented with public benefits, does not create value for humans. It is a modern-day form of feudalism, or perhaps more similar to raising livestock than growing a society.
My book, Ghosts of Tom Joad: A Story of the #99 Percentconfronts these issues head on. The book is fiction, in that it wraps the economics and societal changes of the last fifty years into the story of one family. The book is all true in that what happens to that family, and in particular the main everyman character Earl, happened to millions of American families that believed the myths of growth, hard work and a sustainable middle class even as the super wealthy were pulling the money right out of their hands in front of their eyes. Ignore the rising waters, until you feel them up to your Katrina-like lips.
Choosing to not believe something doesn’t make it go away.
My book is set in Ohio, but the stories in it can be taking place today anywhere in the United States outside a few pockets of affluence centered on a few major cities, or a handful of growth industries such as government and defense.
If you want to know where the 99 percent came from, this is part of the answer. Think of it as a good story, with a conscience.
A kid is dying in the Bronx.
He was in a miserably poor and dangerous neighborhood. He shot at a cop, and the cop shot back. Now that’s the whole story, if you can understand it.
I know his name from the news articles, but I’m not going to use it, because if I said his real name somebody reading this would say, “Oh, another Black kid,” and stop reading.
I know the cop’s name from those same articles, which included a lot more information about the cop than the kid. The cop is going to be OK, luckily will heal up from his wounds, and in fact was struck by rounds fired by another cop, not the kid. That pretty much ended the media’s interest in much of a follow up story. “Cop Shooter Who Missed” is weak copy compared to “Cop Killer,” and somebody reading would say, well, that’s that. Mouse click and what was the score of the game? Sports is easier, every game has a winner.
The media did take time to write about what they said were the circumstances of the shooting: street party, some fights got out of control, maybe something to do with gangs. They quoted a resident, who “spoke on the condition of anonymity because he feared for his safety,” and said that these kinds of things happen all the time in the neighborhood.
Kid shot at a cop, and I make no effort here to justify that. Can’t and shouldn’t be done. But questioning isn’t justification, so I’m going to do that instead. If you thought about stopping reading this at “kid shot at a cop,” here’s where you likely will stop reading.
But I want to know why there are square mile after square mile of miserably poor and dangerous neighborhoods in my city. They’re only a 15 minute subway ride away from where some of the richest people on earth – the Koch Brothers, a bunch of investment bankers whose names aren’t familiar – live. Among all that wealth, in 2016, why do we have such places? I looked for them in Tokyo and Ottawa, and while there are always rich and poor, there weren’t square mile after square mile. I did see something like them outside Nairobi and Delhi.
I want to know why that part of the Bronx has charity-run drug clinics and liquor stores and payday loan storefronts and pawn shops and a few fast food places selling only carbs and fat as fuel as its only real commerce.
I want to know why the only government offices in the neighborhood are a police station and an armed forces recruiting center.
I want to know how a kid barely old enough to legally vote can illegally have a handgun.
I want to know why a kid his age has a rap sheet that includes an assault on a cop in March 2015, a resisting arrest bust in September 2014 and another arrest in 2012 for another assault. The resisting charge has to do with him screaming “F*ck you, cops, I hate you all” but the news reports said nothing about the underlying event that brought the kid and the cops to that.
The kid’s most recent bust came the day before he was shot, after he was arrested for skipping on a $2.75 subway fare. He was held overnight for that, released only a few hours before the party shooting, after a judge simply set him free. I want to know the thinking behind an arrest and 24 hour police detention for a subway fare.
I want to know where the kid went to school. I want to know what happens in his home, what his parents say to him.
I want to know why a kid would shoot at a cop, knowing the only two possible outcomes would be his own death or 20-to-life upstate.
I want to know why we quickly ascribe these crimes to an individual without simultaneously asking why they happen so constantly and consistently across our society and not really any others.
I want to know, amid the other daily news about celebrities and ISIS under every bed, why this all isn’t really news.
We used say America was a place where anyone could grow up to be president. I’m not naive enough to believe that was ever really true, but I want to know if anyone thinks this kid ever had a chance to even grow up.
So what do you call it when America’s bestest friend violates UN sanctions the U.S. pushed for by helping enrich America’s bestest enemy? And all the while the U.S. remains dead silent over the whole thing?
Israel has exported an estimated $400,000 worth of gold to North Korea in contravention of UN sanctions. Israeli ministers made the admission during a Knesset session after the UN had earlier questioned Tel Aviv on suspected exports to North Korea.
“Unfortunately there have been exports of gold and sadly they were exposed and we had to give explanations to the UN,” David Houry, director of exports at the tax authority in Israel told the Knesset hearing.
UN Security Council Resolution 1718 was passed in 2006 in response to North Korea’s program to develop nuclear weapons. The resolution prohibits exports of luxury goods. Precious metals are among the products barred from being sold to Pyongyang, along with alcoholic beverages, tobacco products, motor vehicles and perfumes. The theory behind the specificity of the sanctioned items is that they punish North Korea’s elite without affecting regular people. Except when Israel wantonly walks all over the rules.
During the session the Knesset economics committee passed an order forbidding luxury exports to North Korea, nearly 10 years after the 2006 UN resolution.
A spokesperson for Israel’s Economy Ministry, said the near decade-long delay in implementing the UN resolution was due to “bureaucratic difficulties.”
I was eating in the food court below Grand Central Station in New York. There was a cold rain outside, and a good portion of the people around me appeared to be homeless.
Many were making the rounds of the trash cans and tables, eating the food they found. There were cops nearby, as well as National Guardsmen on terror watch duty. There seemed to be a sort of understanding at work, such that the cops left the homeless alone as long as the homeless left the paying customers alone.
I wasn’t going to finish my meal. There wasn’t much left, but some. What was the right thing to do?
A) Leave the meal. A mouthful for someone hungry is better than nothing;
B) Throw it away. It would have been embarrassing to offer a small amount available only because I’d already gorged myself;
C) Go buy another full meal (I could afford it) and give it to one of the hungry people;
D) Demand my government stop spending 54% of my taxes on war (actually more, if you consider black budgets, paramilitary forces, and intelligence costs) and start taking care of its own people. I have the resources to feed one person, but we have the resources to feed all Americans. If only we were willing. I don’t always know what’s right, but I know what is wrong.
The middle class, which for 40 years has represented a majority of the country in practice, and formed the foundational belief in what has been known as the “American Dream,” is now just half the United States, according to a new report.
Over at least the last four decades, productivity gains have gone largely to the top of the economic pyramid, increasing both their income and wealth. Real income growth has been flat for most Americans, even as the cost of living has increased.
Need it in numbers?
The share of America’s income going to the middle class has fallen from 62 percent in 1970 to 43 percent now. Today, the majority of our national income goes to the upper class, which reaps a 49 percent share. (by comparison, the share of income going to the upper class in 1970 was just 29 percent). The median wealth of middle class households has fallen by more than one-fourth since the beginning of this century.
Need it in simple terms?
The rich are getting very much richer, seeing their wealth grow exponentially. The middle class is shrinking. Meanwhile, the poor are still poor and their numbers are growing. We are indeed heading toward a society within a society within the world’s wealthiest nation — one percent of “us” now own half of everything.
The implications of this path are dark.
At the point where a handful of people control most of the wealth, and the other money in our nation is so diffuse as to make those individuals in the bottom 99 percent of our society irrelevant except as cheap labor, we live in a modern day version of feudalism. Money is power, and a select handful now can control elections with “donations,” can have laws written and rewritten to match their needs, can keep a lid on the minimum wage more and more of us depend on now to get by, manipulate college loan and mortgage rates to keep people in debt, and secure ownership of the land we live on and the places we live. Hyper-wealthy people through their charitable foundations are free to social-engineer our world, paying to say grow one form of educational system while leaving another to wither on limited funding.
How did the wealthy pull off the greatest peaceful takeover of a nation in human history? Very easily. Their master stroke, however, was not to take predatory capitalism to its extreme, but to do so without sparking more than a whisper of disagreement from the very people they trod upon.
Here is the linchpin of how the rich have taken us: they have convinced average Americans to act and vote against their own interests, in part by manipulating them into opposing any program that has a chance of benefiting black and brown equally or more than themselves. Decent health care and nutrition for everyone? That’s socialism!
Our entire culture is fear-based, from our religion to our media to Wall Street. It drives everything, and fear is the most powerful tool that rulers can use to manipulate people. It is this constant state of fear that really makes us exceptional compared to every other advanced nation.
People, we have been bought. Someone else now, in every effective and meaningful way, owns us. Suckers.
Ghosts of Tom Joad is fiction per se, but fiction based on fact. My story of the intentional destruction of an entire class of people through economic disparity is mirrored in so many people’s lives.
Here is one of those stories, originally submitted to this blog as a comment, but well-worth repeating here (lightly edited):
From 1955 to 1965, my Dad lived near Youngstown, Ohio. He moved up from the Mississippi Delta and worked at Packard Electric and some steel mills to get through college at Youngstown University.
I drove through Youngstown last month for the first time after my Uncle’s funeral (submariner for six years, at Pearl Harbor, worked for 40 years at the General Motors Lordstown plant). Youngstown today reminded me of Detroit (as a firefighter, I tend to notice lots of empty lots where houses once stood).
I graduated from high school in Detroit in 1983. The place has really gone even more downhill since 2008; my old house on the West side has been stripped out (dead dog carcass in the dining room), probably a 25 percent vacant rate.
I don’t see things getting better anytime soon. I’m doing OK as a firefighter, but I’m making less than I did 13 years ago and the powers-that-be have been going after the public unions (now that less folks are in private unions than before the Great Depression).
Here’s another from Comments:
This blog resonates with me as I grew up in Troy, Ohio in the 1960s and ’70s before moving to New Jersey in 1974. I experienced small town America with Soap Box Derby races and Memorial Day parades and watching 4th of July fireworks from the levee on the Miami River. I went to college in Bethlehem, Pennsylvania, where “The Steel” ran the longest continuous steel mill in the world, something like 11 miles. A few years ago I read that the foundry part downtown had been turned into a casino and I knew that the U.S. was dying of capitalist rot.
My long dead friend Joe was the son of the owner of a bar in downtown Lorain. My Polish friends had fathers that worked the steel mills. My high school used to play Admiral King, and my trip there was to the other end of the universe. The last several times in Lorain the major bridge was out for repair and it sure took a long time to fix it. I used to drive 6 and 2 driving to BGSU. Joe commented while dying that he remembered us tooling down that road doing 120 mph in my Detroit iron/389 Pontiac.Both of us were immigrant stock and soldiered for this country. Joe is still buried in Lorain with his parents.
In October 2013 I stayed at Port Clinton and it was depressing. Half the business district was depressed. Tourism is down. A condo in town sold for $20K. Bowling Green town is dull and needs a paint job and new roofs. Cleveland is a slum, as is Euclid where my folks lived.The house I grew up in has been demolished. The inner city is every bit of what you wrote about, but worse. If that’s possible then things are really bad.
There are so many, too many, such stories out there, good people who believed what they had been told only to find themselves discarded when companies found they could make more money somewhere, somehow else. They all are the ghosts of Tom Joad now.