(This was scheduled to appear at 10am, but FYWP, and since then my new laptop has been misfiring. Nevertheless, the links remaim important.)
President Obama gave an important speech yesterday:
…[W]e know that people’s frustrations run deeper than these most recent political battles. Their frustration is rooted in their own daily battles — to make ends meet, to pay for college, buy a home, save for retirement. It’s rooted in the nagging sense that no matter how hard they work, the deck is stacked against them. And it’s rooted in the fear that their kids won’t be better off than they were. They may not follow the constant back-and-forth in Washington or all the policy details, but they experience in a very personal way the relentless, decades-long trend that I want to spend some time talking about today. And that is a dangerous and growing inequality and lack of upward mobility that has jeopardized middle-class America’s basic bargain — that if you work hard, you have a chance to get ahead.
I believe this is the defining challenge of our time: Making sure our economy works for every working American. It’s why I ran for President. It was at the center of last year’s campaign. It drives everything I do in this office. And I know I’ve raised this issue before, and some will ask why I raise the issue again right now. I do it because the outcomes of the debates we’re having right now — whether it’s health care, or the budget, or reforming our housing and financial systems — all these things will have real, practical implications for every American. And I am convinced that the decisions we make on these issues over the next few years will determine whether or not our children will grow up in an America where opportunity is real…
The right correct people are happy. Greg Sargent:
… [E]xperts who see inequality as one of the most urgent moral, political and economic long term challenges facing the country will see it as one of the most important speeches of the Obama presidency – more ambitious than his similar 2011 speech in Kansas.
“This is a major speech on a topic that American presidents normally stay away from,” Tim Smeeding, an expert on inequality at the University of Wisconsin, tells me, adding that it compares in some ways to Franklin Delano Roosevelt’s addresses. “The fact that a sitting president faced with a crowded agenda had the courage to discuss this overarching problem is historic.”
A few key takeaways from the speech: Obama described the decline in economic mobility as a direct consequence of inequality — as opposed to arguing that lack of mobility is itself the problem — and as the product of trends that are decades in the making. He cast the need to ensure that ”opportunity is real” for our children as “the defining issue of our time.”..
One of the most immediate ways of beginning to mitigate economic inequality, of course, would be to raise the minimum wage. There’s been a bounty of good arguments in favor recently, from Professor Krugman, “Better Pay Now”:
… First, a few facts. Although the national minimum wage was raised a few years ago, it’s still very low by historical standards, having consistently lagged behind both inflation and average wage levels. Who gets paid this low minimum? By and large, it’s the man or woman behind the cash register: almost 60 percent of U.S. minimum-wage workers are in either food service or sales. This means, by the way, that one argument often invoked against any attempt to raise wages — the threat of foreign competition — won’t wash here: Americans won’t drive to China to pick up their burgers and fries.
Still, even if international competition isn’t an issue, can we really help workers simply by legislating a higher wage? Doesn’t that violate the law of supply and demand? Won’t the market gods smite us with their invisible hand? The answer is that we have a lot of evidence on what happens when you raise the minimum wage. And the evidence is overwhelmingly positive: hiking the minimum wage has little or no adverse effect on employment, while significantly increasing workers’ earnings…
… to hardcore academics, such as Arindrajit Dube, telling the NYTimes “The Minimum We Can Do“:
… The idea of fairness has been at the heart of wage standards since their inception. This is evident in the very name of the legislation that established the minimum wage in 1938, the Fair Labor Standards Act. When Roosevelt sent the bill to Congress, he sent along a message declaring that America should be able to provide its working men and women “a fair day’s pay for a fair day’s work.” And he tapped into a popular sentiment years earlier when he declared, “No business which depends for existence on paying less than living wages to its workers has any right to continue in this country.”…
… to Steve Coll, in the New Yorker:
… Twenty-one states and more than a hundred counties and cities have enacted laws that set minimums above the federal one. Before SeaTac’s vote, an Indian reservation in California had the highest local minimum in the country, of ten dollars and sixty cents. San Francisco’s is just a nickel less. But political support for higher wages extends well beyond Left Coast enclaves. According to a Gallup poll taken earlier this year, a majority of Republicans favor a minimum wage of nine dollars. That reflects a truth beyond ideology: life on fifteen thousand a year is barely plausible anymore, even in the low-cost rural areas of the Deep South and the Midwest…
… to certain notorious Congresscritters, as interviewed in Salon:
Firebrand Congressman Alan Grayson hailed Black Friday civil disobedience in an afternoon interview, saying the protests by Wal-Mart workers and supporters show “the dissatisfaction of the middle class” since the 2008 financial crash “coming to a slow boil.”
“If one person falls out of the middle class, that’s sad,” Grayson told Salon. “But if millions of people fall out of the middle class, that creates a backlash which is being seen all over the country, and will potentially create a new political movement of the disenfranchised.”…
In a Friday statement, Wal-Mart Vice President David Tovar said that the company pays “on average, close to $12.00 an hour” and “The real issue isn’t where you start. It’s where you can go once you’ve started. Retail is one of the few industries that has jobs at all levels and ongoing advancement opportunities.” Using Glassdoor.com and 2011 IBISworld data, OUR Walmart has pegged the retailer’s hourly wage at below $9.
Grayson charged that the company “feels compelled to cheat its own employees to the point where they’re forced to turn to public assistance simply to stay alive.” The common thread between deadly disasters at factories which have supplied to Wal-Mart in Bangladesh and abuses in the United States, he contended, is that “Wal-Mart is a machine that exists solely for the purpose of enriching its owners and…the top managers of Wal-Mart, and in so doing wreaks havoc on the lives of both workers and suppliers.” As workers have in industries like miners and auto, he argued, the solution “is for people to get together and stop fighting each other, but rather fight the boss and beat the boss.”…
Elizabelle
What kind of laptop did you get, Anne?
Mnemosyne
I’m assuming that “average” includes the salaries of top executives. What’s the median wage, David?
Xboxershorts
@Elizabelle: A working one it seems!
Elizabelle
@Mnemosyne:
Good catch.
Groucho48
Wal-Mart Vice President David Tovar and I have an average wage well into 6 figures. Guess I just don’t know how to handle my share as well as he does.
PeakVT
Well, nice speech. Now how will Obama take it and use it to elect more Dems in 2014?
Baud
@PeakVT:
Obama isn’t going to elect more Dems. We voters will.
BillinGlendaleCA
That’s classified.
Villago Delenda Est
@Mnemosyne:
What a weasel that guy is.
If just one Walton heir walks into a room with 1000 minimum to near minimum wage Wal-Mart employees, the average net worth of the room will be in the tens of millions.
Origuy
That notoriously liberal site, Bloomberg, reports that a third of all bank tellers receive government assistance.
Davis X. Machina
Count the references to the public option. Not a one. Neither did he call on us to expropriate the expropriators, seize the commanding heights of the economy in the name of the workers, nor nominate Shirley Sherrod to head the Department of Agriculture.
You won’t catch me voting for him again.
Villago Delenda Est
@Davis X. Machina:
Well, if I get elected Senator from Oregon, I still plan on voting him onto the Supreme Court.
Smedley Darlington Prunebanks (formerly Mumphrey, et al.)
I hope the Very Serious People wake up about this. Not feeling too hopeful, though.
You know, I recall something I read a long time ago, but I forget where. Anyway, the writer asked, if corporate headquarters of big businesses collapsed regularly, crushing twenty vice presidents at a time, how long would it be before something got done about it? What if stockbrokers on Wall Street got cancer from chemicals in their offices routinely? But when a bunch of miners die, we talk about it for two weeks, and then forget it.
Tokyokie
Alice Walton is my favorite punching bag on the issue of income inequality. (Any of the Walmart heirs will suffice, but she lives the closest to me.) The fortune that Alice Walton inherited, which itself was founded on destroying the retail sectors of small towns across the heartland, she decided was insufficient, and after her father’s death, the company embarked on a policy of increasing profits by taking them out of their hourly workers’ hides, with low pay and impossible hours, while simultaneously filling all its nongrocery manufactured goods demand through subsistence-wage (if not slave-labor) sweatshops overseas. All because, I suppose, poor Alice has been scraping by on a $35 billion unearned fortune. I wish Ayn Rand fanboys would kindly tell me how she’s a maker, not a taker.
The minimum wage needs to be raised, but an ancillary issue that I think also needs to be addressed is outlawing the practice on “just-in-time” work schedules. A crappy low-wage job is bad enough, but when the workers earning those crappy wages cannot take additional employment because of their jobs’ scheduling demands, the employers are in effect dictating how their employees use their downtime without compensating them for it. Democrats need to raise the issue in both houses, maneuver votes on them, and use the GOP swine’s subsequent votes in campaigns against them.
MikeJ
I was disappointed he didn’t announce the immediate nationalization of all banks, investment and commercial with dispersal of the ill gotten loot. Until then it’s all just talk.
Tommy
I heard somebody on MSNBC today report that if we raised wages we might pay ten cents more for a Big Mac. I was like is that is all?
Look I am not rich. I’d not really want to pay more for this or that. But I have an issue with folks that serve me a product or a service living in poverty, and they work an honest day. I got a real issue with that.
RaflW
The decision to very heavily favor dividends and capital gains has reverberated thru our economy since Reagan, and ramped up more so with later tax cuts.
As long as that tax regime exists, corporate gross profits will go to the small class of shareholders (and mostly to execs who get massive options and stock awards) and not to the workers.
One of the worst bits of bullshit in the maker/taker frame is that capitalists are the makers. Hah! Workers provide the product or service. They’re the makers. And the takers are the folks sucking up dividends and stock appreciation.
Omnes Omnibus
@MikeJ: What speech were you listening to? He talked about inequality which as we all know is code for calling for the immediate nationalization of all banks, investment and commercial with dispersal of the ill gotten loot.
Omnes Omnibus
@Tokyokie: I first read that as Alice Walker and thought, “Man, is he harsh….”
Mnemosyne
@Tokyokie:
The funny part is, from what I understand of Rand’s work (I couldn’t get through it), Alice Walton would absolutely be considered a taker and a parasite by Rand, because all she’s doing is sitting on her money. I think there’s a villain character like that in Atlas Shrugged, a guy who inherited his wealth and just putzes around with it.
ranchandsyrup
but but but they’ll just pass it through to the consumer and the price of “chicken” mcnuggets that I don’t eat will go up a couple of pennies.
Joel
@Mnemosyne: I actually think that refers to the median, but it may not.
Even so, $11.75 an hour is $22,654 a year, assuming 1928 work hours.
Tommy
@Tokyokie: I can’t wrap my mind around the amount of money they have. My parents inherited a lot of money. There will be a day where I won’t have to work when that money comes to me.
I note this cause I understand how estate planning works. We don’t have billions. Hundreds of millions. Even dozens of millions. A few million … well you can invest that and live off of it. Not a want in the world.
Heck my parents a few years ago started to give away some of their money. They were like how much is enough? I’d say a few billion is enough!
MikeJ
@Tokyokie:
Not just the retail sectors. Read up on how Walmart tried to destroy Huffy.
http://www.fastcompany.com/47593/wal-mart-you-dont-know
Walmart has done more to kill manufacturing in the US than anybody. At least when the old man was starting it they flag waved about how much was mad in the US.
Tommy
@MikeJ: I can’t recall the lawn mower company, but they did it to them as well. Told them to lower their prices to where they couldn’t make money. Said you don’t, then we won’t carry your products. Did the same thing with Rubbermaid.
Davis X. Machina
@MikeJ: The tunnel vision involved is frightening.
Kierkegard was half right. Purity of heart is to will one thing. But so is the worst kind of evil.
MomSense
@Smedley Darlington Prunebanks (formerly Mumphrey, et al.):
VSP Ezra Klein is meh on the whole idea of income inequality. The real challenge according to him is jobs and growth. So what if each of us has to work 2 or 3 of them. I just don’t even know what to say to these ignoranuses anymore. If people were paid a decent wage they would buy goods and services, homes, put their kids through college, etc.
Yatsuno
@MikeJ: JUST WORDZ!!!
Economic populism seems to be surging in this country. Plus Seattle just got its first Socialist council member in over 100 years. Things they might be a-changin’.
Yatsuno
@Tommy: Remember Vlasic pickles? Wal-Mart tried to get them to lower their price to the point where selling them in their stores was at such a loss they told the Waltons to fuck off. Wal-Mart responded by trying to destroy their distribution channels so NO store would carry them. Fortunately you can still get Vlasics, just not at Wal-Mart.
BillinGlendaleCA
@Yatsuno: Thank FSM, love the refrigerated Vlasics.
Ruckus
@Yatsuno:
So, smarmy, entitled, assholes who also happen to be vindictive.
I’d say that’s the whole nine yards.
Yatsuno
@Ruckus: Guess why Levi jeans suck ass now. No really, just guess. You’ll never figure it out in a million years.
Tokyokie
@MikeJ: Back in the early 1970s, the company for which my father worked transferred him overseas, and I finished high school at a boarding school in Switzerland, where I made the acquaintance of a member of the Huffman family whose father ran the Huffy company. He was a nice kid, the only non-drug-user in the freshman dorm. The other dorm residents, every one of them a rich kid, kept breaking into his room (fire regulations barred us from having locks on our doors) to steal things from him in order to fuel their drug habits once their allowances ran out for the month. By the end of the first semester, they had stolen everything he had worth more than $10, and he left the school to return home to Ohio.
Years later, when the Walton family destroyed Huffy, I thought what had happened to the Huffman I knew was an apt metaphor.
Jennifer
Some math: a person with a billion dollars would have to spend $54,794 every day for 50 years to run through it all. $383,561 per week; $1,643,835 per month; $19,999,92 per year. Multiply that by 35 to get the amount Alice Walton would have to burn through.
We hear constant mewling from conservatives about how asking people of great wealth to pay more in taxes or pay higher wages is “unfair” because that’s their money, they earned it. No. The only way any individual can acquire even a billion dollars in wealth is through profit on the labor of others. No one in history has ever become a billionaire through his or her efforts or labor alone. And while there’s nothing necessarily wrong with someone making some profit off the labor of others (this is, after all, the basis of the capitalist system), the only way someone can pile up multiples of billions is if they are not fairly compensating the people from whose labor they are profiting. It’s just that simple. Great fortunes these days almost always represent labor theft (there are a few examples to the contrary – some innovators manage to pile up great fortunes primarily through the strength of their ideas or inventions, but even most of them also accumulate wealth through undercompensating labor).
It will be a great day when Wal Mart workers collectively tell the company: “Ok, since the shareholders are so much more important than we are, get their asses in here to run the store on Thanksgiving. We’ll be spending the holiday at home with our families.” Because that’s what it’s going to take to reverse all of this crap about how the “makers” are the “takers.” Let the stores sit empty and locked down for a few days and let the all-important shareholders see exactly how much they’re “earning” when the slaves they’ve been standing on don’t show up to run things.
The most ridiculous argument I’ve heard about all this was some tool from AEI on NPR yesterday, who said that if you raise the minimum wage too much, employers will just turn to automation. Great, asshat. Get back to me when McDonald’s develops that burger-flipping robot. Until then, stop blowing smoke up my ass.
Matt McIrvin
@Jennifer:
Like they won’t anyway. I find it hard to believe that the difference between $7 and $10 an hour is the crucial margin to prevent that.
I’m sure the burger-flipping robot is coming. But it’ll come one way or another, and we do have to figure out ways to deal with that. Ultimately we are going to have to change the way we think about work and income. Keeping labor super-cheap is not a sustainable answer.
Paul in KY
The cold, hard facts of the matter is that most people need raises & they are only gonna get them when the people who own these companies decide to give them out.
That is why we are well & truly fucked.