ECONOMIC POLICIES, ANALYSIS, AND RESOURCES
The Economic and Trade Policy Domain tracks and reports on policies that deal with budget, taxation, and finance issues. The domain tracks policies emanating from the White House, Congress, the Department of Commerce and the Department of Treasury.
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It might surprise Trump supporters that they enjoy a greater portion of federal expenditures to states than the population in the Blue states, particularly in view of the tax contributions of citizens in each set of states. In fact, Citizens in Blue states appear to occupy different economic worlds than those in Red states, and the data show the Red state participants are experiencing more of economic strain in the current administration. Red states are also less racially diverse than blue states with an average of 27% non-white compared to 50% of residents who are non-white in Blue states. Yet Red state are more of a drain on the federal government accounting for a bigger portion of benefits in federal aid programs—including food assistance, housing, disabilities, and Medicaid the return is more substantial in the red states which typically get a return of $1.71 – $2.13 on dollars contributed compared to blue state which generally get between 74-83 cents on the dollar. Red states, with high dependency on the federal government, 13 of the 15 highest utilizing states, voted for Trump white 10 of the 15 states least dependent on federal aid went for Clinton in 2016. Red states also receive more support in their share of federal jobs and the portion of federal funds comprising state revenues. Red counties which voted for Trump have seen an increase in job growth of 2.6% in 2017-18, while the growth rate in blue counties going for Clinton was 2.1%. The issue is that these red state areas have had sluggish economic growth and the wages are low and the jobs ripe for automation. Blue states also fare better in quality of life studies which include, among other things, employment, job growth, economic development, cost of living, government solvency, and livability.
Contrary to what the media might suggest, especially conservative media, the largest gap between Red and Blue states lies in economic deficiencies not in racial differences. In fact, Blue states have a greater share of non-whites and a smaller share of aid from the federal government. They also have higher education levels in their population, with 35% of their population possessing college degrees compared with 28% in Red states. The Blue states are more economically productive with output averaging 22% per worker compared to 15% for red states. Blue state workers are also less likely to be working in manufacturing. In the first year of Trump’s administration, disparities between Blue and Red states grew with blue states having greater rates of labor force participation and job creation.
https://www.rockthevote.org/action-center/volunteer/ An organization working to get voters registered and engaged. The best way for the Democrats to win is to show up in large numbers.
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Economists contest Trump’s boastful statements regarding his economic policies declaring tariffs a boon to manufacturers, workers and consumers. Tariffs operate like taxes and increase prices to consumers while simultaneously sacrificing the creation of new jobs. They are not, as Trump has declared, paid by the exporting companies or countries. Trump’s tariffs in China, and subsequently in the EU, have had extensive negative impacts and questionable small positive consequences. Though six manufacturing areas have seen some job growth the other 14 categories have not. Machinery and metal industries have had accelerated job growth but more negative impacts on other industries have resulted. Farmers have been impacted by tariffs on soybeans to China.
Beginning this Spring, Trump increased the China tariffs on another 100 billion dollars worth of goods in mid-September and proposed another 200 billion dollar increase in December. The total cost of tariffs, including proposed extensions to the end of the year, is 196.7 billion dollars. It is estimated that current tariffs have cost 300,000 jobs to be sacrificed and the number is projected to rise to 450,000 by the end of the year. In retaliation for the tariffs imposed on China that nation has increased duties on 75 billion dollars worth of US goods. Trump then extended tariff reform to the EU and Canada costing jobs and imports. The EU then responded in ways that have affected the sales of American products. Some examples are a 25% increased tariff of Kentucky Bourbon has decreased overseas sales in the industry which has depended on foreign imports for much of its growth. Harley Davidson has contracted as a result of EU taxes causing the company to shift production to Thailand and to reduce its US workforce.
Uncertainty in business causes distress resulting in suspending plans for expansion and spending. Trump touted the tariffs as a way to compensate for the trade deficit, where the US imports more goods than it exports, but it has not accomplished that. US exports account for 12% of the GDP and many industries depend on cheap imports, so the tariffs will negatively impact both prices to the consumer and new jobs.
A loophole in the trade law allows for packages under $800 in value to cross the borders from Canada or Mexico without any extra cost as long as they are mailed to individuals. To avoid the duties more goods are being shipped over the borders and mailed by disbursement centers into the US. The delivery of small packages jumped by 46% in 2018 with much of this growth likely attributable to the trade wars.
Not only have prices gone up, and job creation stalled, but wages have not increased and any tax benefit which might have been realized from the 2017 reform has been eliminated by increased consumer good prices. The groups absorbing the biggest hit are those that generally suffer from slowed economic conditions such as decreased jobs; low wages; and high unemployment. These struggling groups, most of them low wage earners, are bearing the brunt of the trade wars.
- https://tariffshurt.com/ A website supporting a national campaign to resist the tariffs featuring articles, charts, and figures to demonstrate the cost of these policies.
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In a time of almost unprecedented high levels of employment it is of interest that African Americans are not enjoying an equivalent gain. The average unemployment rate for blacks is 6% which is at least twice as high as for whites. This holds true when controlling for education and other factors such as length of unemployment. Even that data does not tell the whole story since when majority black cities are considered (cities with 50% or more Black populations including those of “mixed” race”), the data show a much more dramatic chasm. In cities such as Newark, NJ; Detroit; and Flint the unemployment rates for Blacks are 15.8%, 17.4%, and 25%+. When wealth is studied, a bigger divide is demonstrated where white wealth is more than 10 times the average wealth of Black households. The gap actually has increased in the post-recession period. Trump takes much of the credit for the overall employment gains but data indicate the trend began in 2009 with the largest gain occurring between March 2010 and Jan 2017. The drop in Black wealth also signifies a downward trend begun in the recession and sustained in the Trump administration.
Part of the explanation for Black unemployment rates can be attributed to the geographic regions inhabited by predominantly Black communities but it is certainly not the whole picture. African Americans are clustered in metropolitan areas which are less likely to be centers of new jobs such as in the tech industries. The McKinsey & Company study, where the above data is drawn from, indicates that Black unemployment is double that of whites even when other factors are controlled. The report also suggests that Black workers are at greater risk of future job loss due to their concentration in jobs vulnerable to automation such as truck driving, food service and clerical support. Non-degreed, young black males are especially at risk since they inhabit this demographic more than any other group. Trump’s policies affecting taxes and home ownership are also likely to further impede the progress of Black family affluence. The McKinsey authors suggest that this trajectory can be diminished but it will necessitate attention to specific social policies regarding jobs skills training, education, and support of local economies none of which appears to be a priority in the current administration.
- https://www.huffpost.com/entry/28-organizations-that-are-empowering-black-communities_n_58a730fde4b045cd34c13d9a This article, subtitled “The resistance Starts here” lists multiple organizations advocating for economic progress, civil rights, and LGBTQ rights for African American communities.
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One in four persons 65 and over is working and many are doing so because they need to. Older Americans are the fastest growing group of workers in the country. Longevity means, for some, many more years or work than anticipated earlier in life. Few private sector jobs provide a defined benefit (pension). One half of private sector workers have no retirement benefits and those with 401Ks lost 1/3 of their account value during the recession. This was particularly devastating to workers close to anticipated retirement, many of whom consequently have kept working. Fifty percent of older Americans still help support adult children and many provide caretaking services either to grandchildren, ill children, and/or even older parents. The median baby boomer savings is $150,000 –not nearly sufficient for a potential 30 year retirement. Single mothers, many who worked multiple jobs to make ends meet, find that even with social security and food stamps they cannot make it. Many of these women were likely to work full time, and more, but made relatively low wages and frequently had no benefits. They are relying on food banks to survive. It has been well documented that many seniors go without necessary meds, or cut meds, to make ends meet. Women of color, and individuals in the LGBTQ community, also face similar situations. More affluent older people volunteer at community agencies. Volunteer work provides purpose and increases the physical and mental health of its incumbents and just as significantly contributes 73 billion dollars of value to the economy.
Although poverty among seniors has decreased over the past few decades it stands at 10% of all seniors and 12.1% of women seniors when utilizing the official poverty level. If the supplemental poverty level is incorporated, a measure which takes into consideration the real cost of basic services, 12.2% of senior men and 15.6% of women are poor and even that statistic may underestimate the actual need. One in twelve seniors faced food insufficiency in 2017. Women 60-64 were twice as likely to be food insecure than those over 80,perhaps in part because they are unlikely to be collecting social security and are not yet eligible for Medicare to help with healthcare. Trump has made multiple moves to cut SNAP (federal food supplement program formerly referred to as food stamps). In October his proposed cut amounted to 4.5 billion dollars, affecting one in five families. Though Congress has not made the requested cuts in the Department of Agriculture, the agency governing food stamps, Trump has made cuts by executive order and is likely to commit to more cuts.
Although the portion of older people who are officially impoverished has decreased there are still many seniors struggling and many who are not counted because they make over the poverty level and/or are working into their “senior” years because they cannot afford to quit. Many maintain grueling schedules in physically demanding work for which they are ill suited. Single women, especially those who supported children, are likely to be working longer and also to have been unable to save since they were paying for childcare and other basic needs on a single income. The proposed SNAP cuts would refigure eligibility by incorporating state standards for other expenses such as utilities, housing, and first time access to the internet. Although a small group would gain an average of 13 dollars per month more would lose an average of 31 a month. Northern legislators are against the cuts because of the pressure to protect their constituencies’ benefits while rural representatives are worried about saving programs where the government buys farm products. In the midst of these political squabbles the elderly are suffering, many of whom are relying on standing in queues to receive food bank assistance. In any case, SNAP and social security are not meeting the needs of elderly and the impoverished population of nonelderly is now lower than the senior rate. Seniors have not made any economic gains under the Trump administration’s policies. The US has no guaranteed basic income as seen in other countries and maintains a large bureaucracy, fragmented and inefficient, to provide for a reasonable standard of living.
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Short answer: the average taxpayer! The latest data indicate that only 7% of tax revenue comes from corporate taxes and 4% from excise taxes and tariff. The remaining 86% is paid by individuals, 50% in personal income tax and 36% in Payroll taxes. The FICA (Federal Insurance Contributions Act) tax is capped at $132,900 (2019) and so is inherently unfair in that earners making more than that do not pay any additional FICA. Any recent decrease in personal income tax, for the lower end households, has been offset by increases in payroll taxes. Add to that the fact that higher earners are paying less personal taxes than ever and we can see the unfairness of taxation and the reason that our treasury is so in debt and our schools and infrastructure failing.
It is not just partisan politics which suggests that Trump’s Tax Cuts and Jobs Act of December 2017 has aggravated the problem, it is “actual fact.” The highest personal income rate in the 20th century was 91% and it dropped, by 1980 to 47%, and is currently 37%. The wealthiest 400 households paid an all-time record low percentage of 23% in 2018. In other words, personal income tax has become “radically less progressive (Leonhardt). Corporate taxes fell 31% from 2017 to 2018, under the Trump reform, which reduced their statutory rate and also allowed for the full value of equipment purchases to be deducted. At least 60 of the Fortune 500 companies paid exactly NO tax last year. Some of these companies are well-known household names such as Amazon, Netflix, Delta Airlines, Jet Blue, Whirlpool, Eli Lilly, Halliburton, GM, IBM, Chevron, and Goodyear. Trump’s tax reform also ended deductions for state and property taxes resulting in a significant decrease in property values. Finally, the 4000 dollar pay increase that Trump said would hit the average worker never materialized.
The manner of taxation is an integral part of a Democratic system. Even before the inception of the nation, tax structures were hotly contested. The northern colonies favored a more progressive tax than existed in Europe while the southern colonies were hostile to taxes fearful that they would undermine slavery. But history has offered optimism in that when there was a will to raise taxes it was accomplished. Today’s miserly tax code is directly due to reforms in Trump’s 2017 program. It has been suggested, by two UCB professors, that increasing the personal tax rate to 60% for the top 1% of households would increase revenues $750 billion a year. They also propose a minimal global corporate tax of 25% (see Leonhardt). These would allow for a much needed infusion of funds for infrastructure, education, and health care. Activist organizations, electoral pressures, and good media coverage can significantly impact the voice of fairness with regard to taxation.
This Brief was submitted by USRESIST NEWS Analyst Rosalind Gottfried
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The short answer is not a whole lot and what it does show indicates some inconsistency with previous assumptions regarding jobs, wages, and the economy. The number of newly created jobs, in general, is lower than in 2018. Growth in retail workers has declined sharply when compared to the past eight months. Unemployment is at 3.5%, the lowest in nearly five decades. There are more workers, ages 25-54 working than in the previous twelve years. At the same time, manufacturing jobs are sharply down, with growth of only about 10% compared to the growth rate in 2018. Wages are largely stagnant and lower this year than in the previous six months. This is surprising since with nearly full employment wages are usually driven higher to attract workers. Inflation is not rising though it is expected to do so in current conditions. The gap between increased employment and stagnant wages is unusual. The Fed has dropped the interest rate to 1.75-2.0 (for overnight bank to bank loans) for the second time in a year after increasing it steadily in the post-recession years from 2015-2019. The Fed interest rate averaged rate .25 during the recession. This ostensibly is to give business investment a boost and bolster economic growth.
These mixed features suggest the economy is cooling and potentially headed for a slowdown. If the pool of laborers persists in its decrease, wages should increase but with the current unemployment being low it has so far failed to do so. The slower rate in job growth seems compatible with low unemployment but the wage stagnation is cause for questioning the relationship between jobs and wages and to inflation which is expected to increase under current conditions but has not. Analysts suggest there is a slow downturn in economic growth and debate whether this indicates a coming recession or not, since the news is mixed. Trump claims the low unemployment as a win for his economic policies but the Democrats point to the decreases in manufacturing, perhaps tariff related, and the flat wage growth as indicating otherwise. The lowering of the Fed’s interest rate is aimed at sustaining full employment, controlling inflation at 2%, and constraining long-term interest increases. All of these impact consumer debt, interest rates, mortgage and credit card loan rates, and consumption. Some analysts suggest that the recent steep decline in retail workers is only partially due to bankruptcies and other wise may indicate an expectation of less consumption on the horizon. Perhaps the “real” truth is we are in unchartered territory and even the analysts are only guessing as to the consequences of the mixed factors in the report.
- https://www.nytimes.com/2019/10/04/upshot/jobs-numbers-for-the-optimists-the-pessimists-and-everybody-in-between.html https://www.nytimes.com/2019/10/04/upshot/jobs-numbers-for-the-optimists-the-pessimists-and-everybody-in-between.html
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Congresswoman, and Democratic presidential hopeful, Alexandria Ocasio-Cortez has proposed a wide-ranging antipoverty program to reduce the hardships facing the poor and near poor in the US. At a time when inequality is the highest its been in five decades, and the nation at its richest, over 40 million people qualify as poor. The 2019 Federal poverty level for an individual was $12,400 while a family of four is poor if they make less than $25,750. This official government measure underestimates the poor as it utilizes a set level which is applied across the continent (excluding Alaska and Hawaii)awHH regardless of cost of living differentials or specific family situations. If the “near poor” are added (those making up to 150% of the poverty level) the figure would be as great as one third of the country.
Ocasio-Cortez’s “The Just Society,” platform, echoing the Great Society vision of the Lyndon B. Johnson administration which established new welfare laws as well as Medicare and Medicaid, actually is made up of six separate bills. One bill would change the way the government establishes the official poverty level to include differences in geographic location as well as the real cost of necessities such as healthcare, childcare, housing, and “new necessities” such as internet access. Other bills would cap the amount rents could increase; provide a federally run single payer health insurance; allow persons with criminal convictions, and those lacking documentation, to fully access social welfare programs; pressure federal contractors to increase wages and benefits; mandate employers to pay for family leave, adhere to predictable scheduling, and establish a living minimum wage.
Analysis: Ocasio-Cortez suggests that the proposed comprehensive set of bills is the only viable option for attaining economic justice. Although Democrats have a history of supporting such legislation as Ocasio-Cortez proposes, some feel that in so doing she is jeopardizing the moderate Democrats elected in the most recent election. This debate within the Democratic party threatens to splinter the power of the party and is one articulated concern for exercising constraint in progressive programing. A program that appears to move “too far to the left” is feared as providing fuel to the Republicans and conservatives, especially those who incorrectly label these measures as socialism. Actually, these values have been a part of US social history since the New Deal of FDR’s era. Additionally, other nations believe that these issues are human rights and guarantee them and so Ocasio-Cortez’s proposal also includes supporting the International Covenant on Economic, Social and Cultural Rights, a United Nations treaty (1966) which states that all persons have the right to work, and the right to just conditions of work, Social Security, an adequate standard of living, including food, clothing, housing and health care.
- Lists organizations working for minimum and living wage reform.
- Organizations working for universal health coverage https://uhcan.org/
- Youth Group working for extension of DACA and immigrant rights https://unitedwedream.org/
- Organization working for paid family leave http://www.nationalpartnership.org/our-work/economic-justice/paid-leave.html
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In September the California Legislature passed a bill (AB5) changing the classification of drivers for such companies as Lyft and Uber to employee status rather than independent contractors https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB5. Several other states are in line to follow suit and many fear that California’s legislation will eventually spread across the country and the gig economy. CA has over a half a million ridesharing drivers in Lyft and Uber indicating the significance of employment in the gig economy. The bill could result in regulations which could significantly modify the pay and conditions of employment of a contingent work force typical of today’s gig economy.
An August 2019 NLRB ruling, with a majority of Trump appointees and one lone democrat, dealt a blow to the legislation in CA, and other similar ones in the pipeline, by asserting that it is difficult to draw a distinction between employees and independent contractors and functionally making it legal to misclassify “employees” as “contractors.
The California bill has been controversial with the companies, as well as some of the drivers, contesting the notion of reclassification. Some drivers fear the loss of job flexibility in hours and working conditions; very few drivers work 40 hours weeks (<8%) and 45% work less than 10 hours (Herrera 2019). Many of the drivers rely on ridesharing gigs for all, or most, of their employment. Some drivers augment full time low paying jobs while others are unable to work full time, or regular schedules, for a variety of reasons. An additional fear concerns the likelihood that rising costs to the consumers could significantly impede the likelihood that students and lower wage customers could continue to utilize the service threatening the livelihood of the current drivers.
Lyft and Uber, along with Door Dash, intend to spend 90 million dollars on a CA counter bill which, if successful, would force the legislature to reach a compromise bill. One such prospect is instituting a 21 dollar minimum wage.
Resistance Sources: Rideshare Drivers United https://drivers-united.org/, is a union representing 5000 drivers in Southern California active in countering the opposition to AB5. This group utilizes software to organize workers who have no local gathering place.
His website https://www.gigeconomydata.org/ provides data on gig workers and can clarify issues facing such workers.
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Last month, Democrats in the House passed a bill that would raise the minimum wage to $15 an hour by 2025. The so-called ‘Raise the Wage Act faces opposition in the GOP-controlled Senate floor, where as of yet Majority Leader McConnell has refused to raise the issue. 2009 was the last year that the federal government updated its minimum wage. As of this past June, this decade-long stretch broke the previous record for the longest period without minimum wage increases. Coming off this long wage freeze, the ‘Raise the Wage Act’ would more than double the pay of lowest-earning workers in any states and cities that remain pegged to the federal minimum. While a GOP-controlled Senate continues to render the ‘Raise the Wage Act’ implausible in the short-term, the bill’s passing in the house signals a commitment by national Democrats to pursue the $15/hour target rate as we move into the next decade.
The $15/hour benchmark has its origins in the resurgent grassroots labor campaigns of the last decade. Workers and progressive labor activists in the fast food industry, especially, have done the work to mount political pressure behind this goal. The “Fight for $15” slogan was coined at a one-day strike by fast food workers in New York City in 2012. Energized by that campaign, “Fight for $15” grew into a militant movement with global presence. The organization’s official website claims footholds in over 300 cities, including many outside the U.S. Back in 2014, a local campaign spearheaded by the city’s Socialist Alternative chapter made Seattle the first municipal government in the U.S. to sign the target $15/hour minimum wage into law.
Since then, the $15/hour rate has been adopted by cities across the country. Los Angeles is set to reach its $15/hour benchmark by the end of 2020, and New York City and San Francisco reached that rate at the end of 2018. Seven states have passed measures that will raise their wage floor to $15/hour in the coming years — California, Massachussetts, New York, DC, Illinois, New Jersey, Maryland, and Connecticut, in order of their bill’s passing. As a result, there are several areas in the country where the minimum wage is set to reach $15/hour in cities and surrounding areas before eventually reaching a state-wide $15/hour minimum wage. In New York, for instance, the downstate area, Westchester and other counties surrounding New York City, will reach $15/hour in 2021, whereas upstate workers will receive more gradual inflation-adjusted wage increases up to an eventual $15/hour at an undetermined date. As with healthcare and other major issues that have come up at the Democratic primary debates so far, vast differences in the actual impacts of policies are often disguised by similar rhetoric or messaging. It will be important throughout the coming year to pay attention to the details when candidates for national office mention changes to minimum wage policies.
When political work behind the $15/hour target began in 2012, the policy was still seen by many as a fringe proposal. Even for most Democratic politicians, the policy was only conceivable in high-wage urban environments with strong progressive political organizations. As such, the initial victory in Seattle met equal fanfare and skepticism. Progressive activists declared the Seattle bill the first victory in a long-awaited reversal in the balance of power between capital and labor in the U.S. Conservative skeptics expressed the fear that minimum wage laws are untenable without raising unemployment. So far, studies that have looked at the effects of Seattle’s policy have produced mixed results. One notable 2017 study suggested that although most workers benefited from the bill, inexperienced workers newly entering the workforce faced stiffer competition and fewer opportunities. The same authors, however, published a revised study the following year where these losses had largely disappeared, recuperated as the city’s economy adjusted to the wage increase. Even among supporters of wage increases, Seattle seemed like an exceptional case for the policy’s horizon of possibility. Not every city in the United States has a composition of voters and progressive organizations capable of electing committed progressives, let alone socialists, to city council positions.
Yet today, nineteen of the Democratic candidates for President, including centrist frontrunner Joe Biden, have stated support for some version of the $15/hour increase at the federal level. The growing normalcy of the policy proposal is a high-water mark for a Democratic party that has been continuously pushed to the left during the Trump years, at least in rhetoric. Yet, as many analysts have pointed out, “Fight for $15” is not what it once was. In the intervening seven years, the inflation-adjusted value of the slogan has already depreciated significantly. According to Bloomberg, a $15/hour minimum wage in 2025, the year after the date set by the House Democrats’ bill, is comparable to a $12/hour wage in 2012, when the movement began. The current life of the policy, once considered extremely ambitious, is caught between political and economic timelines. As Democratic Party elites become more sympathetic to the $15/hour policy, the actual value it represents depreciates. It is an open question whether the coalitional power necessary to implement the policy at the federal level will keep pace with inflation, passing it before it becomes a watered-down, historically sub-standard increase. The 2020 Senate elections will be a crucial turning point either way, and progressive activists may find it necessary to raise their expectations to maintain adequate pressure on the electoral system.
Across the board, the potential benefits of a minimum wage increase often come down to the details of the laws that have passed. As in the case with New York state, there are exemptions built into their new minimum wage bills, most notably slower rollouts and lower caps for rural areas and smaller companies. Yet, elsewhere, these minimum wage increases have come with wider, structural reforms to the way that wage minimums are regulated. San Francisco’s $15/hour minimum wage law impressively included the very progressive stipulation that the wage be adjusted on a yearly basis to keep pace with increases in inflation, as measured by the Consumer Price Index. The ‘Raise the Wage Act’ also includes such a stipulation, which, if passed by a future Democratic Senate, would be the first federal minimum wage policy in U.S. history to include automated adjustments to wages at pace with inflation. Such a policy would create a permanent safeguard for labor’s share of corporate profits. Optimistically, an inflation-adjusted minimum wage would allow progressive political forces to divert their valuable time and effort away from merely keeping up with increases in the cost of living, and towards more substantial structural and political changes. Pending such an outcome, low wage workers in the U.S. will have to continue year after year with “belt-tightening” adjustments as we march further into the longest stall in the federal minimum wage we have ever seen.
- The Economic Policy Institute’s Minimum Wage Hub is a resource on minimum wage policies for the uninitiated and the expert alike. The page offers primers on the basics of minimum wage policy and history, newsletters on the issue, and a searchable database of in-depth research housed at the institute. The Economic Policy Institute is a think tank devoted to, as articulated on its website, “the needs of low- and middle-income workers in policy discussions.” Beyond its credentials as a serious, hard-nosed research institute, the EPI also offers resources to laymen seeking to navigate the complicated debate around problems facing poor and working people in the United States.
- Fight for 15 is a multinational movement of workers and activists demanding a minimum wage of $15/hour. Fast food workers in New York City kicked off the movement in 2012, calling for a $15/hour wage and a union. Today, Fight for 15 is proud to report affiliated actions “in over 300 cities on six continents.” Their website hosts accessible information for workers interested in learning about strikes and unionization, as well as frequent newsletter updates on their movement and labor news around the country.
- MIT’s Living Wage Calculator provides an easy way to estimate the “living wage,” or the wage needed to meet a basic standard of living, in your area. The website breaks down the hourly wage-equivalent in income necessary for a given household to live comfortably in any given county in the U.S. The Calculator breaks the numbers down according to the number of children and number of adults employed full-time in a household. For those interested in the math behind these calculations, the Calculator offers a technical version of its spreadsheet, that cites the data used in any given result.
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In a recent op-ed in the New York Times, economist Paul Krugman labeled President Donald Trump the “deficit man.” It’s an interesting title and it is certainly appropriate. Even within the area of economic policy, our nation’s budget deficit doesn’t typically receive as much coverage as matters such as the trade war or the stock market. That said, this seems like an opportune time to examine it in detail.
It is important to be mindful of the difference between a nation’s budget deficit and its national debt. The former refers to the difference between the funds a country takes in from revenue streams or receipts such as taxes and what it spends. The latter is the debt that stems from a government borrowing further funds in an attempt to cover all such deficits. While the two are different, they are connected in ways that are important in a report such as this. For example, the ability to borrow money can be used to help the government finance the deficit.
August is here and with it, recess for Congress. The deadline for raising our debt ceiling is fast approaching. It was recently announced, though, that Trump’s administration has reached an agreement with Congress to address our deficit by implementing a budget deal while at the same ti e increasing the debt limit. The deal also includes a two-year budget that stands to significantly increase the federal deficit. The budget deficits it will create are estimated to be well over $1 trillion within a decade. This is the largest that deficits accumulated by the federal government during one presidential term have been expanded in the history of the U.S. economy.
In August 2018, I reviewed the increasing budget deficit under Trump and discussed its concerning elements that could pose threats to our economy. The Tax Cuts and Jobs Act had sent the budget deficit shooting up close to $1 trillion. We were also in the throws of the trade war sparked by Trump’s tariff policies. One year later, all such matters have only gotten worse. The deficit has increased by over 23%, according to CNN, and none of the factors that have caused this spike have been eliminated
During his 2016 campaign, Donald Trump boasted that if he were elected, the national debt would be eliminated. This was a highly unrealistic promise, as it would have required completely balancing the budget deficit but under Trump, we have drifted even further from such a goal than we were during Obama’s second term.. While our economy is far from the “strongest it has ever been” , as Trump claims, our budget deficit is indeed poised to become the largest in history and it is due to things Trump has done, namely tax cuts and increased military defense spending.
We have a debt ceiling for a reason but Congress seems to be completely disregarding it. Historically, it is a concept that was engineered to allow Congress to make sure the federal government did not borrow more money than made fiscal sense. It was created with the idea in mind that any Presidential administration could easily lose control of their spending and attempt to fix any potential damage by borrowing the necessary funds.
When someone has accumulated more credit card debt than they can handle, borrowing more money to start paying it back is not a long term solution. College students and first time home buyers are advised by experts not to borrow more money than is reasonable for them to pay back but Congress doesn’t seem concerned with doing the same for the Trump administration. Both branches should be striving to balance the budget but the new deal is poised to do exactly the opposite, setting us back even further than we already were. Our economy is certainly not immune to downturns or market fluctuations and if we experience another one within the next few years, as we are likely to, a historically overblown deficit is the last thing we’re going to want. Despite Trump’s claims, our economy is far from stable. Adding to the budget deficit instead of balancing it will only serve to make all matters worse.
- The Center on Budget and Policy Priorities is progressive think tank that conducts research and analysis on budget related matters.The Concord Coalition is a grassroot organization that provides information on the risk and consequences on the growing federal debt and unsustainable fiscal policies.
- The Center for Economic and Policy Research is a nonprofit research organization that conducts research and public education to promote democratic debate on economic matters including the federal budget and national debt.
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