Economy & Economic Justice

Minimum Wage 101

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  • Living in a New Gilded Age

    The Trump Justice Department has approved a $69 billion merger between CVS, the nation’s largest drugstore chain, and insurance giant Aetna. It’s the largest health insurance deal in history.

    Executives say the combination will make their companies more efficient, allowing them to gain economies of scale and squeeze waste out of the system.

    Rubbish. This is what big companies always say when they merge.

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  • Just When Should We Start Worrying About Deficits?

    The U.S. deficit is rising again, a lot. The Congressional Budget Office just said it expects the deficit to top $1 trillion in 2019, a record. Some economists say that at some point, debt becomes a drag on growth. Is the U.S. approaching that threshold? Should we be worried? Bloomberg Opinion columnists Stephanie Kelton and Noah Smith met recently online to debate.

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  • The Three Big Lessons We Didn't Learn From the Economic Crisis

    Ten years ago, after making piles of money gambling with other people’s money, Wall Street nearly imploded, and the outgoing George W. Bush and incoming Obama administrations bailed out the bankers.

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  • Opinion: Trump’s Policies Will Displace the Dollar

    The benefits that the US reaps from having the world's main international currency are diminishing with the rise of the euro and renminbi. And now President Donald Trump’s misguided trade wars and anti-Iran sanctions will accelerate the move away from the dollar.

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  • The Next Crash

    September 15 will mark the tenth anniversary of the collapse of Lehman Brothers and near meltdown of Wall Street, followed by the Great Recession.

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  • Why Wages Are Going Nowhere

    The official rate of unemployment in America has plunged to a remarkably low 3.8%, but the official rates hide more troubling realities. 

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  • The Public Purse

    As part of the lecture series between UCL Institute for Innovation and Public Purpose (IIPP) and the British Library, Stephanie Kelton speaks on why a government budget should not be looked at in the same way as a household budget.

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  • Energy for the Common Good

    Aristotle famously contrasted two types of knowledge: “techne” (technical know-how) and “phronesis” (practical wisdom). Scientists and engineers have offered the techne to move rapidly from fossil fuels to zero-carbon energy; now we need the phronesis to redirect our politics and economies accordingly.

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  • Why The Only Answer Is To Break Up The Biggest Wall Street Banks

    On Wednesday, Federal bank regulators proposed to allow Wall Street more freedom to make riskier bets with federally-insured bank deposits - such as the money in your checking and savings accounts.

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  • Thinking Beyond Trump: A Federal Jobs Guarantee

    Robert Reich explains the benefits of a federal job guarantee.

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  • THE MONOPOLIZATION OF AMERICA: The Biggest Economic Problem You’re Hearing Almost Nothing About

    Antitrust laws were supposed to stop what’s been going on. But today, they’re almost a dead letter. This hurts you.

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  • Report: A Path to Full Employment

    Despite reports of a healthy US labor market, millions of Americans remain unemployed and underemployed, or have simply given up looking for work. It is a problem that plagues our economy in good times and in bad-there are never enough jobs available for all who want to work. L. Randall Wray, Flavia Dantas, Scott Fullwiler, Pavlina R. Tcherneva, and Stephanie A. Kelton examine the impact of a new “job guarantee” proposal that would seek to eliminate involuntary unemployment by directly creating jobs in the communities where they are needed.

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  • Use Fiscal Policy, Not the Fed, to Fight the Next Slump

    This economic recovery is looking long in the tooth. It’s already the third longest U.S. expansion on record, and many observers are worried about what will happen when this phase of the cycle is over and the country falls into recession. That’s unavoidable, of course, so it makes sense to think ahead about what policy-makers should do to fight the next downturn. Don’t think a fiscal response is off the table.

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  • To Realize Martin Luther King Jr.’s Dream, White America Needs To Change Course

    To mark the 50th anniversary of Martin Luther King Jr.'s assassination, special correspondent Charlayne Hunter-Gault sits down with one of his closest friends, artist and activist Harry Belafonte, who remembers how they met and what made King so special, as well as why he says America is more racially divided than any other moment in his life.

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  • It's Our Job To Finish Dr. Martin Luther King's Economic Justice Work

    I recently travelled to Memphis to headline an event at the National Civil Rights Museum in the Lorraine Motel, the place the Reverend Dr. Martin Luther King Jr. was assassinated on April 4, 1968.

    Tags: MLK, Economy
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  • The Sanders Institute Talks: A National Jobs Guarantee

    Dr. Jane O'Meara Sanders talks with Dr. Stephanie Kelton about the results of a new report on creating a national jobs guarantee program.The full report will be released through the Levy Institute in April, 2018. Dr. Kelton co-authored the report with 

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  • Guaranteed Jobs Through A Public Service Employment Program

    Amid a recent upsurge in support for a national job guarantee program, L. Randall Wray, Stephanie A. Kelton, Pavlina R. Tcherneva, Scott Fullwiler, and Flavia Dantas outline a new proposal for a federally funded program with decentralized administration. Their Public Service Employment (PSE) program would offer a job, paying a uniform living wage with a basic benefits package-to all who are ready and willing to work. In advance of an upcoming report detailing the economic impact of the PSE, this policy note presents an overview of the goals and structure of the program in the context of current labor market trends and the prospects of poverty reduction.

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  • Why We Need Rise-Up Economics, Not Trickle Down

    How to build the economy? Not through trickle-down economics. Tax cuts to the rich and big corporations don’t lead to more investment and jobs. 

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  • Why The Common Good Disappeared And How We Get It Back

    In 1963 over 70 percent of Americans trusted government to do the right thing all or most of the time; nowadays only 16 percent do. 

    There has been a similar decline in trust for corporations. In the late 1970s, 32 percent trusted big business, by 2016, only 18 percent did. 

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  • Rep. Gabbard Votes Against Predatory Lending Bill

    Rep. Tulsi Gabbard voted against legislation that would weaken protections against predatory and unsafe lending practices. H.R. 3299 would make it easier for payday lenders and other financial institutions to get around state laws and raise interest rates on loans that target low-income and minority communities. The legislation passed by a vote of 245-171.

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  • The World Bank Needs To Return To Its Mission

    NEW YORK - The World Bank declares that its mission is to end extreme poverty within a generation and to boost shared prosperity. These goals are universally agreed as part of the Sustainable Development Goals. But the World Bank lacks an SDG strategy, and now it is turning to Wall Street to please its political masters in Washington. The Bank’s president, Jim Yong Kim, should find a better way forward, and he can do so by revisiting one of his own great successes.

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  • More Buybacks, More Inequality

    Trump’s promise that corporations will use his giant new tax cut to make new investments and raise workers’ wages is proving to be about as truthful as his promise to release his tax returns.

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  • The Sanders Institute Talks: Student Loan Debt

    Dr. Jane O'Meara Sanders sits down with Sanders Institute Founding Fellow and economist Dr. Stephanie Kelton to talk about Dr. Kelton's new report on the macroeconomic effects of student loan debt cancellation in the United States.

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  • The Next Big Fight

    Fresh off passing massive tax cuts for corporations and the wealthy, Trump and congressional Republicans want to use the deficit they’ve created to justify huge cuts to Social Security, Medicare, and Medicaid.

    As House Speaker Paul Ryan says “We’re going to have to get… at entitlement reform, which is how you tackle the debt and the deficit.” 

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  • The Macroeconomic Effects of Student Debt Cancellation

    Among the more ambitious policies that have been proposed to address the problem of escalating student loan debt are various forms of debt cancellation. In this report, Scott Fullwiler, Research Associate Stephanie Kelton, Catherine Ruetschlin, and Marshall Steinbaum examine the likely macroeconomic impacts of a one-time, federally funded cancellation of all outstanding student debt.

    The report analyzes households’ mounting reliance on debt to finance higher education, including the distributive implications of student debt and debt cancellation; describes the financial mechanics required to carry out the cancellation of debt held by the Department of Education (which makes up the vast majority of student loans outstanding) as well as privately owned student debt; and uses two macroeconometric models to provide a plausible range for the likely impacts of student debt cancellation on key economic variables over a 10-year horizon.

    The authors find that cancellation would have a meaningful stimulus effect, characterized by greater economic activity as measured by GDP and employment, with only moderate effects on the federal budget deficit, interest rates, and inflation (while state budgets improve). These results suggest that policies like student debt cancellation can be a viable part of a needed reorientation of US higher education policy.

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  • How To Reinvent Infrastructure

    There was only one reference to the deficit in last night’s State of the Union speech, and it had nothing to do with the federal budget. I found that refreshing - we can carry a deficit if the money’s spent wisely — but that’s another story. What President Trump talked about was America’s staggering infrastructure deficit, a whopping $2 trillion fault line in the backbone of the American economy, according to the latest estimates from the American Society of Civil Engineers.

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  • Patriotic Millionaires: Reframe the Debate

    It is important to recognize changes in the seasons. Our country is undergoing a significant metamorphosis, which is likely to last several years, but we have an opportunity to help ensure that what emerges from this turmoil is more beautiful than what preceded. While there are plenty of problems we can dwell on, at the same time there are a number of very positive changes occurring that I believe are laying the groundwork for a better future. It is now our collective job to work toward making that happen.

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  • Tax Policy Center: Briefing Book

    This briefing book from the Urban Institute and Brookings Institution Tax Policy Center gives "A citizen's guide to the fascinating (though often complex) elements of the federal Tax System."

    It begins with some background on the federal budget and tax system, it covers key elements of the U.S. tax system, suggests ways in which the tax system could be improved, and describes state and local taxes.

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  • The American Dream is At Stake if Low Income Earners Can't Own a Home

    For many people, the dream of homeownership is only attainable through federal guarantees, or loans insured by the federal government.

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  • GOP Tax Plan Viewpoints

    With any piece of legislation, it is important to understand the reasons that people give for why it should be implemented, why it should not be implemented, and the data behind those reasons.

    The GOP tax plan is the largest overhaul in U.S. history. As we read about this piece of legislation, many of us exist in echo chambers where we can only read and see one viewpoint. 

    In this article, we expose you to varying viewpoints on the tax plan including:

    • A Republican's statement supporting the tax plan,

    • A Republican's statement opposing the tax plan,

    • A Democrats' statement opposing the tax plan, and 

    • An Independent's statment opposing the tax plan

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  • An Open Letter to the US Congress

    Both the House and the Senate have passed versions of a GOP tax plan. According to analyses from the Tax Policy Center, the CBO and numerous economists, both plans overwhelmingly benefit the wealthiest people in this country, and both will result in the loss of health insurance for some 13 million Americans. Meanwhile, research warns that millions will face higher taxes and a spike in their health insurance premiums in the years ahead. And there isn’t a single credible study that supports the claim that either of these tax plans will deliver the kind of economic growth - with higher wages and substantially more jobs — the GOP is touting to sell their plan.

    This is an open letter to the U.S. Congress signed by over 200 Ph.D economists that outline the economic arguments against the tax plan. 

     

    Tags: Tax Plan, Economy, GOP
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  • (Opinion) The GOP's Rush To Tax Cuts Was Brainless

    I am writing from Beijing, China, where forward-looking policies in infrastructure, technology and diplomacy have fueled rapid economic growth and even more remarkable technological advancement. By the mid-2020s, China will most likely lead the world in key technologies for low-carbon energy, robotics and advanced transportation, among other areas targeted in China's long-term development strategy.

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  • You're The Real Job Creator

    As the GOP tax plan, officially known as the Tax Cuts and Jobs Act, awaits reconciliation with the House, the threat of a mounting deficit is once again in the news. 

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  • Swamped: More Than Half the Members of Washington’s Lobbying Corps Have Plunged Into the Tax Debate

    This report from Public Citizen investigates whether the Trump administration has in fact "Drained the Swam"

    It finds that lobbyists are still an overwhelming presence in D.C. Specifically, "In all, 6,243 lobbyists have been listed on lobbying disclosure forms as working on issues involving the word “tax” through the first three quarters of 2017...That is equal to 57 percent of the nearly 11,000 people who have reported engaging in any domestic lobbying activities at all in 2017.Put another way, this equals more than 11 lobbyists for every member of Congress."

    The report lists and analyses how many lobbyists are hired by large companies, and what type of lobbying they do. 

    Tags: Lobbying
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  • The GOP Tax Plan: Who Pays More?

    The GOP tax plan would significantly alter American taxes. How much would it change taxes? That depends on your income bracket. 

    This article provides three clear graphs that demonstrate the regressive nature of the GOP tax plan: It is better for the rich and worse for the poor.

    GOP Tax Plan Slide 2

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  • Congressional Budget Office Cost Estimate: The Tax Cuts and Jobs Act

    This report from the Congressional Budget Office investigates the Tax Cuts and Jobs Act currently being deliberated in the Senate. Its findings are essential when looking at decisions that will affect the future of the United States.

    Overall, the CBO finds that "Over the next 10 years, JCT estimates that the legislation would increase on-budget deficits by about $1,441 billion over the period from 2018 to 2027."

    It also describes how this legislation would "permanently modify business taxation" by reducing the overall rate from 35% currently to 20% and alter a significant number of taxes for individuals including: modifying the current tax brackets, increasing the standard deduction, repealing the Alternative Minimum Tax, double the exemption allowed under the estate tax, and others. 

    It also reveals that these changes will disproportionately benefit individuals in higher income brackets.

    CBO Tax Score Table 3

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  • War of the Rich on the Poor is Astounding

    Jeffrey Sachs, professor at Columbia University, discussed income inequality in the U.S. and tax reform with Tom Keene on "Bloomberg Surveillance." 

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  • The GOP Wants To Eliminate The Estate Tax. Let’s Use It To Expand Social Security Instead

    This article takes a new approach to Social Security and the Estate Tax.

    Nancy Altman argues that "Our nation is founded on the idea that we are created equal. The reality is that children of billionaires have many opportunities denied to the rest of us. Instead of making those children even richer and more privileged, here’s a better idea: If Republicans don’t want the revenue from that top 0.2 percent of wealthiest Americans to run the government, let’s dedicate it to Social Security and use it to expand those modest but vital benefits for everyone."

    This argument acknowledges the growing inequality in the United States and uses it to level the playing field through the allocation of the Estate Tax to Social Security. 

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  • Ten Facts You Should Know About the Federal Estate Tax

    The Estate Tax, also known as the "Death Tax" has been in the news recently. It has been removed as part of the GOP tax plan

    This article from the Center on Budget and Policy Priorities lists and explains ten facts about the estate tax. So that when we look at this repeal, we understand who it benefits and why. Those facts are:

    1. Roughly 2 of Every 1,000 Estates Face the Estate Tax   

    2. Taxable Estates Generally Pay About One-Sixth of Their Value in Tax

    3. Large Loopholes Enable Many Estates to Avoid Taxes

    4. Only a Handful of Small, Family-Owned Farms and Businesses Owe Any Estate Tax

    5. The Largest Estates Consist Mostly of “Unrealized” Capital Gains That Have Never Been Taxed

    6. The Estate Tax Is a Significant Revenue Source

    7. Repeal Would Likely Leave Less Capital for Investment

    8. Compliance Costs Are Modest

    9. The United States Taxes Estates More Lightly Than Comparable Countries

    10. The Estate Tax Is the Most Progressive Part of the U.S. Tax Code

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  • Why The Republican Tax Plan Is More Failed Trickle-Down Economics

    Trump and conservatives in Congress are planning a big tax cut for millionaires and billionaires. To justify it they’re using the oldest song in their playbook, claiming tax cuts on the rich will trickle down to working families in the form of stronger economic growth. 

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  • Common Tax ‘Reform’ Questions, Answered

    This article from the Economic Policy Institute explains "Why tax cuts for high-income households and corporations won’t help working families."

    It debunks many of the statements that are used to support tax cuts on corporations and the wealthy while answering the following questions:

    1. Should tax cuts be today’s policy priority?

    2. Would cutting corporate tax rates boost American jobs?

    3. Would cutting corporate tax rates boost American investment or wages?

    4. Is it a problem that tax cuts (including corporate rate cuts) add to the federal budget deficit?

    5. Do U.S. corporations pay significantly more in income taxes than companies in our peer countries?

    6. Does the U.S. corporate tax code harm American workers by making U.S. firms less “competitive”?

    7. Does the U.S. corporate tax code force businesses to move their headquarters overseas? Even if it did, is this necessarily bad for American workers?

    8. Do small business owners need a tax cut to level the playing field with larger corporations?

    9. Do U.S. corporations need tax cuts to resolve economic “uncertainty” that is supposedly holding back U.S. growth?

    10. Wouldn’t tax simplification be a good idea?

    11. Shouldn’t we close loopholes in the corporate tax code?

    12. Are profits of U.S. firms “trapped” overseas because of U.S. corporate taxes?

    13. Would letting companies bring back (“repatriate”) their overseas profits at low tax rates (via a “tax holiday”) help the U.S. economy?

    14. Will tax cuts threaten Social Security, Medicare, Medicaid, and the Affordable Care Act (ACA)?

    15. Is there a better way to spend the $2.5 trillion to $5.5 trillion in revenue that would be lost under the current “Big 6” tax plan?

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  • Congress Can Give Every American a Pony (If It Breeds Enough Ponies)

    In 1860, Abraham Lincoln’s campaign slogan was “Vote Yourself a Farm.” In 1900, William McKinley promised “A Full Dinner Plate.” And in 1928, Herbert Hoover won a landslide victory pledging “A Chicken in Every Pot and a Car in Every Garage.” A free farm, a full belly and a shiny new car. Today’s Republicans would cringe at the thought of such rhetoric from their party’s nominees. As Ronald Reagan taught, the government is your problem, not the solution to your problems.

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  • Why We Must Raise Taxes on Corporations and the Wealthy, Not Lower Them

    When Barack Obama was president, congressional Republicans were deficit hawks. They opposed almost everything Obama wanted to do by arguing it would increase the federal budget deficit.

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  • Why We Should Abolish the Debt Ceiling

    Most modern democracies don't have debt ceilings. Raising the debt ceiling is always a political football, used by whichever party is in the minority to extract concessions from the majority party or from the majority party’s president.

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  • When Big Money Buys Off Criticism of Big Money

    Since its founding in 1999, the New America Foundation - an important voice in policy debates on the American left – has received more than $21 million from Google, from its parent company’s executive chairman, Eric Schmidt, and from his family’s foundation.

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  • Trickle-Down Tax Cuts Don’t Create Jobs

    This article from the Center for American Progress describes the ideas behind "trickle down economics" and explains why this theory does not work in practice.

    "Recent history and an abundance of economic research show that trickle-down tax cuts don’t create growth or jobs; they lead only to widening inequality between the top 1 percent of income earners and everyone else."

    The article draws from historical evidence: President Bill Clinton increased taxes on top-earners and the economy "boomed", in contrast President George W. Bush lowered taxes and weak growth ensued. It also draws from current state policies: California recently raised taxes on top earners and have been experiencing high economic growth, in contrast Texas cut taxes on top earners and "Kansas’ tax cuts have severely worsened the state’s fiscal situation, resulting in deep cuts to education and other state services."

    The article concludes that "cutting taxes at the top does not result in faster growth or rising living standards" and "Programs that improve the economic security of low-income children-such as nutrition assistance, housing subsidies, and tax credits like the Earned Income Tax Credit—raise children’s educational attainment and future earnings."

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  • Long-term Projections of Social Security’s and Medicare’s Financing are Not as Scary as They Seem

    This article from the Center for Economic and Policy Research looks at the current financing of Social Security and Medicare and projects the changes that would need to occur for the programs to be financed in the long term.

    It finds that "workers should be much more concerned with making sure they receive their share of productivity gains in wage increases over this period than they should be about tax increases.  This is not about Social Security needing to be less generous, it is about making sure that workers receive their fair share."

    This conclusion largely stems from the fact that "With the upward redistribution of income that has occurred over the last four decades, Social Security has less of a base on which to draw. 90 percent of wage income was subject to the tax in 1983 - it was 82.6 percent in 2015. This decline represents a large share of the program’s shortfall."

    CEPR Social Security Funding Plot 2

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  • Opinion: Tax Reform that Works for All

    This article originally appeared in The Boston Globe on June 27th, 2017.

    In this article, Professor Sachs discusses how a real tax reform would address four problems. First, it would raise total revenues as a share of GDP, in order to cut the chronic budget deficit. Second, it would address the crisis of falling wages and disappearing jobs facing working-class America. Third, it would curb carbon pollution, which is dangerously warming the planet. Fourth, to spur saving and investment, it would shift taxes toward consumption rather than income.

    Tags: Tax Reform
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  • Jeffrey Sachs at the Global Solutions: T20 Summit

    On May 20th, 2017, Professor Jeffrey Sachs addressed the Global Solutions T20 Summit in Berlin. In this speech, Sachs puts our current economic, social and environmental crises into historical context and addresses the importance of new ideas and solutions to the most pressing issues facing the world today, specifically those in the 2030 agenda of Sustainable Development Goals that were unanimously decided upon in September 2015 by a group of world leaders. 

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  • 7 Economic Fundamentals

    In this video, Robert Reich lays out the 7 economic fundamentals that demonstrate the problematic nature of the nation's current wealth distribution. 

    1. Workers are Consumers

    2. Consumer Spending = 70% of Economic Activity

    3. Wealthy Spend Smaller Percentage of Income

    4. Concentrated Wealth = Not Enough Purchasing Power

    5. Sufficient Demand Requires the Middle Class and Poor

    6. Policies to Help Working Families

    7. Wealthy do Better in a Growing Economy 

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  • Can “Trumponomics” Extend the Recovery?

    In this paper from the Real World Economics Review, Dr. Stephanie Kelton looks at the economic projections for the Trump administration. 

    Kelton approaches "Trumponomics" (economic policies of the Trump administration) through this question: "can “Trumponomics” extend the recovery?"

    She argues that it will not. First she examines the economy as a whole to establish whether there is room to grow, which she believes there is. Then she looks at the policies put forward by President Trump during the 2016 campaign and his stated economic goals since - she determines that President Trump's statements on economics do not conform with a "conventional ideological matrix." However, Kelton does mention a number of policies that are Reagan-esq that severely benefitted the top 1%:

    Trumponomics Figure 3

    "the benefits of the Reagan expansions went overwhelmingly to those at the top of the income distribution. Tax cuts for the wealthy, attacks on unions, cuts to programs aimed at helping the poor and an obsession with deregulation and “free markets” shifted the balance of power toward owners of capital and ushered in an era of increasing insecurity and growing inequality for the working class."

    Kelton then looks at whether "Trumponomics" can extend the recovery. She draws from a number of economic predictions that show less growth under Trumponomics than under current policies. However, she acknowleges that a number of economists are more positive.

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  • Lecture: Truth as a Common Good

    Economist Robert Reich, the Clinton-era Labor Secretary and prominent Democratic pundit, gives a rousing talk on how the intersection of politics and economics led to the rise of Donald Trump and describes the concerns he shares with Republicans who fear that Trump's way of governing is harming American institutions. Reich is the featured speaker at UC Berkeley's Goldman School of Public Policy's Board of Advisors Dinner held in March 2017. Recorded on 03/29/2017. 

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  • Inequality For All

    "We make the rules of the economy – and we have the power to change those rules." – Robert Reich

    In this award winning documentary, we learn how to approach the problem of widening income inequality from 6 different directions. The trick is to understand how they all fit together while choosing manageable actions that make sense to who you are. We may not be able to do everything at once but think of each action you take as an incremental step towards the structural change our economy needs.

    Statement from Robert Reich:

    "We’re in the biggest economic slump since the Great Depression, and we can’t seem to get out of it. Why? Because, exactly as in the 1920s, so much of the nation’s income and wealth are going to the top, that the vast middle class doesn’t have the purchasing power to keep the economy going.

    ...

    Until we can take a step back and understand the big picture, we can’t do anything to get ourselves out of this mess. Our democracy as we know it depends on it. I’m an educator. I love the classroom. But I also write books, appear on television and on the radio, and do everything else I can do to help people understand the economic truth. It’s my life’s work and it’s more important than ever. One of the best ways to help people understand the challenges we face, is with a movie that can grab an audience and move them to action. And this movie will do exactly that."

    To learn more or to purchase the full documentary, visit the official website.

  • The Big Picture: Strengthen Unions With Robert Reich

    In this video, Robert Reich describes why unions are important to the U.S. and how to strengthen them.

    50 years ago, unions were "the countervailing power to business." They were successful in raising wages, improving working conditions and supported legal protections like the 40 hour work week and worker safety.

    However, the decline in private sector union membership has mirrored the decline in the middle class. Reich points out that "Strong unions means a strong middle class which means a strong economy."

    His three steps to strengthening unions are:

    1. Make it easier to form a union
    2. Build in real penalties to companies that violate labor laws.
    3. Overturn state  “Right to work” laws

    He ends with the statement that, “if we want working Americans to get a fair share of the gains from economic growth they must be able to unionize.”

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  • Will Economic Illiteracy Trigger a Trade War?

    US President Donald Trump and his commerce secretary, Wilbur Ross, repeatedly commit an economic fallacy that first-year economics students learn to avoid. And their embrace of economic ignorance could lead to disaster.

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  • Senator Bernie Sanders’ Economic Advisor Shreds Trumponomics

    In this article about a paper by Stephanie Kelton's on the current state of the economy after the 2008 recession and "recovery."

    The article and Kelton argue that "there may be no more room for economic recovery given the economy has reached its true employment potential, or as Kelton puts it, ” output is near its full employment ceiling not because the economy rose to its potential but because we lowered the definition of what we believe our nation’s productive capacity to be. It’s a bit like giving up on the idea that your child is capable of achieving straight As, relaxing the goal to a 2.0 GPA, and then celebrating when he presents you with across-the-board Cs.”"

    The article is critical of some of the possible outcomes of the new administration's economic policies.

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  • The Truth About American Wages

    In this article, Senator Nina Turner talks about the need to help the working men and women in the United States. Turner states that "The working men and women of this country are working more jobs and more hours, and they’re still barely hanging on. Beneath those fingertips, they can feel that middle-class dream - the American dream – slipping right away from them."

    This is undeniably true for the Nissan workers in Canton Mississippi where, "today, 600,000 American manufacturing workers make less than $9.60 per hour – barely more than they could earn at a fast food joint. And their real wages dropped nearly 4.5 percent from 2003 to 2013. They are barely hanging on." They have also suffered through their pensions being taken away from them, while  their companies are receiving millions in federal contracts and loans. "That means our government is helping keep American factory workers in poverty jobs while corporate executives get to pocket billions in profits."

    Senator Turner calls for politicians both locally and nationally, including President Trump, to address this issue and follow through with the rhetoric and campaign promises that permeated the 2016 presidential campaign.

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  • Interview With Senator Nina Turner: Right-To-Work Laws Are Weakening The Middle Class And The Economy

    In this interview, Senator Nina Turner talks about her time in the Ohio State Senate and the issues that are most important to her.

    For Senator Turner, these issues include women's rights - "During her time in the Ohio Senate, Turner fought for legislation that would level the playing field for women and men-including introducing the “Viagra bill,” which would subject men to the same scrupulous levels of regulations women face over their reproductive choices"  as well as workers rights - "Workers' wages are not keeping up with inflation. Their wages are not on pace with the amount of work that they do. We work harder and longer in this country, and still people’s wages are not keeping up with that."

     

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  • Union Membership Data And Polling

    This article looks at The Bureau of Labor Statistics numbers on union membership in 2016 and trends over time, as well as public opinion of unions. 

    Union Slide 1

     

    Tags: Union, Polling
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  • But How Will We Pay For It?

    “That's a good idea ... but how will you pay for it?” Dr. Stephanie Kelton joins Amar Reganti to discuss the economic priorities for the current administration.

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  • 5 Facts About The Minimum Wage

    The Pew Research Center produces 5 facts about the minimum wage using their own public opinion data, as well as research from other reports and prominent sources. The 5 facts are:

    1. Adjusted for inflation, the federal minimum wage peaked in 1968

    2. Less than half (45%) of the 2.6 million hourly workers who were at or below the federal minimum in 2015 were ages 16 to 24. 

    3. Twenty-nine states, plus the District of Columbia and nearly two dozen cities and counties, have set their own higher minimums.

    4. About 20.6 million people (or 30% of all hourly, non-self-employed workers 18 and older) are “near-minimum-wage” workers.

    5. The restaurant/food service industry is the single biggest employer of near-minimum-wage workers.

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  • State Minimum Wage Laws

    While the Federal minimum wage is $7.25, different state governments have different laws regulating the minimum wage within that state. The map below from the Department of Labor shows which states have minimum wage laws above the federal level, at the federal level, no minimum wage laws, or minimum wage laws below the federal level.

    Minimum wage map

     

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  • Building Middle-Class Wealth Through Unions

    This report by the Center for American Progress uses the Federal Reserve's Survey of Consumer Finances to show that "unions can play a role in increasing wealth for middle-class Americans." It does this by looking at the difference between union and non-union households on a variety of measures and concluding that union households tend to be better off not only in income, but also in general wealth. 

    This report finds that:

    • The median union household typically has more wealth than the median nonunion households.

    • Union households are more likely to be made up of homeowners than nonunion households.

    • The median union household built up $3,200 in liquid savings, 28% higher than the median nonunion household's $2,500.

    • Union members are much more likely to have a "DB pension" and more money in other retirement accounts like 401Ks which substantially increase workers' chances at a secure retirement. A typical union worker is therefore more prepared for retirement than a nonunion worker.

    The authors conclude that "CAP Action’s analysis shows that unions can help working people build their wealth and reclaim the American Dream of economic security during their lifetime and upward mobility for themselves and their children."

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  • Facing Up To Income Inequality

    Jeffrey Sachs begins this article with a description of stagnating incomes "While household median incomes have stagnated since the late 1990s, the inflation-adjusted earnings of poorer households have stagnated for even longer, roughly 40 years" while higher income households have seen substantial increases. 

    Sachs describes that there are three main factors that contribute to this income inequality: technology, trade, and politics.

    Technology has raised demand for higher skilled, higher educated workers and has increased income for those groups while leaving other groups behind. While trade has increased competition for lower skilled industrial workers. Finally, politics in the United States has not tended to favor the working class and instead it benefits those who can pay for lobbying.

    Sachs then investigates the policies in the U.S. compared to those in other countries using the Gini index (a measure of income inequality varies between 0 - full income equality across households, and 1 - full-income inequality, in which one household has all the income) to compare countries both through market income and disposable income. He finds that the net distibution in the U.S. is especially low when compared to many other first world countries and ends with the statement that "these income comparisons underscore that America's high inequality is a choice, not an irreversible law of modern world economy."

     

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  • Raise Wages, Kills Jobs?

    Everyone has heard the argument that "if we raise the minimum wage, we will lose jobs" in some form or another. This report by the National Employment Law Project uses historical data to test whether that has been the case.

    It investigates the 22 times that the United States has raised the minimum wage by looking at employment trends during the 12 months prior to the minimum wage increase and the 12 months after to the minimum wage increase. 

    The report finds that the "basic economic indicators show no correlation between federal minimum-wage increases and lower employment levels, even in the industries that are most impacted by higher minimum wages." In fact, it finds that for a majority of the instances (68%) overall employment increased after the minimum wage was increased. In addition, of the only eight times when employment decreased after minimum wage hikes, the United States was in a recession or in close proximity to one in every instance. 

     

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  • Are Trade Deals Good For America?

    Both Bernie Sanders and Donald Trump are blaming free-trade deals for the decline of working-class jobs and incomes. Are they right?

    Robert Reich points out that "America has lost a significant number of factory jobs over the last three decades. In 1980, 1 in 5 Americans worked in manufacturing. Now it’s 1 in 12."

    Reich explains that the reduction in manufacturing jobs is as a result of a number of factors including automation and technology, as well as increasing trade. However, Reich explains that the loss of manufacturing jobs through better technology and more trade is not necessarily a bad thing. Instead, it is bad because "trade has widened inequality and imposed a particular burden on America’s blue-collar workers" without offering an opportunity for those workers to enter other professions."The core problem isn’t really free trade, or even the loss of factory jobs per se. It’s the demise of an entire economic system in which people with only high-school degrees, or less, could count on good and secure jobs."

    The article ends with an appeal from Reich that "Trade has contributed to the loss of this old system, but that doesn’t necessarily mean we should give up on free trade. We should create a new system, in which a greater share of Americans can be winners." 

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  • Lecture: Why We Worry About Inequality

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  • Saving Capitalism

    UC Berkeley economist Robert Reich reveals how power and influence have created a new American oligarchy, a shrinking middle class, and the greatest income inequality and wealth disparity in 80 years. Citing his latest book, "Saving Capitalism: For the Many, Not the Few," Goldman School of Public Policy Professor Reich lays out what he argues must be done to restore democracy and rebuild the US economy. Reich is the featured speaker for the 7th annual Michael Nacht Distinguished Lecture in Politics and Policy. Recorded on 12/01/2015. (#30462)

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  • The Angry Birds Approach to Understanding Deficits in the Modern Economy

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  • The Big Picture: Fight For $15 With Robert Reich

    Robert Reich begins this video talking about morality - that "the majority of Americans agree that no-one who works full time should be in poverty, and neither should their family."

    Reich describes the current situation where the minimum wage is not high enough to raise workers out of poverty and that "the working poor remain impoverished"

    Reich argues that if the minimum wage kept up with inflation it would be $10.52 and if it kept up with productivity it would be more than that. He also describes what he calls the "virtuous cycle" where when individuals make a higher minimum wage, they spend that money which creates more demand, and therefore more jobs. 

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  • Does More Government Help Or Hurt?

    In this video, Stephanie Kelton investigates the economic philosophy that states that smaller government will improve the economy. This philosophy in practice equates to: cutting taxes on the job creators to create more jobs.

    Kelton argues that this doesn't work. She presents Kansas as a case study where Kansas cut taxes on job creators. Rather than seeing an increase in job creation, Kansas' job creation is lagging behind the national average. The problem with this economic approach, Kelton argues, is that "It presupposes the most important part of capitalism: demand." Businesses hire when there is demand, not when they have fewer taxes. 

    Kelton then goes on to describe how government spending (and therefore larger government) can be a good thing and has been a good thing in the past. She suggests that these government programs would help boost the economy: federally funded jobs program, infrastructure investment, investment in education, and investment in research & technology.

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  • A Stagnating Minimum Wage has Left Low-Wage Workers Facing a Longer Climb to Reach The Middle Class

    This graph from the Economic Policy Institute shows the value of the minimum wage as a percentage of the average hourly wage, Cooper points out that "As shown in the figure, at its high point in the late 1960s, the minimum wage was equal to 53 percent of the average wage. Yet after 46 years of infrequent or inadequate increases, today’s minimum wage is equal to only 35 percent of the average production worker’s wage-not far from its lowest point on record."

    Tags: Minimum Wage
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  • How to Raise Wages: Policies That Work and Policies That Don’t

    This paper by the Economic Policy Institute lists and describes types of policies that would help and hurt wage stagnation in the U.S. The authors describe that while GDP has risen in the last three decades, wages have stagnated. However, they argue that wage stagnation is not inevitable. It is a product of policies that have discouraged wage growth and therefore can be remedied by policies that encourage wage growth. This article educates about what those policies are and what they would do. 

    First, the article lists and describes policies that would help create jobs and help the U.S. reach full employment. these include: monetary policy that targets full employment, with wage growth matching productivity gains, targeted employment programs, public investment in infrastructure, and reducing the trade deficit. The article then lists and describes policies that do not help to create jobs, including: corporate tax reform, cutting taxes, raising interest rates, and trade deals that do not benefit the U.S.

    It also investigates policies that would help encourage wage growth including: raising the minimum wage, updating overtime rules, strengthening rights to collective bargaining, regularizing undocumented workers, ending forced arbitration, modernizing labor standards, closing race and gender inequalities, ensuring fair contracting, Tackling misclassification, wage theft and prevailing wages and supporting enforcement of labor standards. Finally, the article lists and describes policies that would not help wage-growth including: tax cuts, austerity, increased college or community college completion, deregulation, and policies to promote long-term growth.

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  • Nick Hanauer: Beware, Fellow Plutocrats, The Pitchforks Are Coming

    In this video, "0.1%-er", Nick Hanauer talks about capitalist economies and why the notion that enriching the rich is best for the country is completely wrong.

    He argues that a system where the rich have everything and the poor have nothing is inherently unstable, and instead, when wages are raised for the lower and middle classes (specifically the minimum wage) those people have the money to spend on things that they would not have otherwise been able to buy (e.g. if restaurants pay their workers enough to be able to eat out at restaurants, that is great for the restaurant business.) 

    Hanauer states that capitalism is the best system out there, but that it is inherently flawed to benefit the rich and therefore needs to be regulated so that this country can benefit all that live in it.

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  • Standing up, fighting back: Full Speech

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  • Lecture: Inequality for All

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  • Minimum Wage vs. Purchasing Power

    This graph compares the nominal value of the minimum wage (the dollar amount of the minimum wage) to the the real value of the minimum wage (the purchasing power of the minimum wage, meaning the amount of money in today's dollars that you would need in order to buy the same amount of goods.) We see that while the nominal value of the minimum wage has increased since 1938 when it was enacted, the purchasing power of the minimum wage peaked in 1968 and has decreased since then.  

    Minimum Wage vs. Purchasing Power

     

    Tags: Minimum Wage
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  • Inequality For All: A Visual Story

    To compliment his film Inequality for All, Robert Reich put together this visual story to demonstrate and shine light on the economic inequality in the United States. 

    Inequality for all 1

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  • Inequality For All: Interview With Bill Moyer

    In this video, Bill Moyers talks with Economic analyst Robert Reich about the new film Inequality for All. 

    Reich talks about the ideas within the film and why he used this medium to communicate about income inequality in the United States.

    Ultimately, Reich wants to educate his viewers about the economy, what has happened with income inequality in the last couple decades and what can be done to benefit workers, the middle class, and "the little guy."

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  • The Dual Mandate: Right Goals, Wrong Institution?

    In this article Dr. Stephanie Kelton looks at the "dual mandate." The Dual Mandate is a monetary policy imposed by Congress in 1913 which "charges the Federal Reserve with responsibility for achieving two broad macroeconomic goals: “maximum employment and stable prices.”"

    She discusses the different points of view that the different sides of the aisle take on the issue: "Much has been made (especially by those on the left) of the benefits of having a dual mandate." in contrast to the republicans "Not a single Republican expressed support for the dual mandate when the issue came up during a presidential debate on September 12, 2011. 

    Dr. Kelton then discusses some of the solutions put forward but offers her own take on the situation: "Nearly everyone seems to believe one or both of the following: (1) high levels of employment and low rates of inflation are worthwhile goals; and (2) the Fed is the right agency to deliver on these goals. I don’t dispute the former, but I often wonder about the latter."

     

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  • Government Has Always Had The Power To Pay Its Bills

    In this article, Dr. Stephanie Kelton describes a shift in how many view debt in the U.S.

    She describes that initially, "everyone knew the government spent a lot of money and that money had to come from "somewhere", but most people assumed there were limits to how much the government could afford to spend."

    However, the government does not function like an individual: "The United States is already the issuer of the currency. It isn't like a household or a private business. It can always pay."

    Kelton ends the article with the reminder that we should think of the government's spending differently and that our fears of falling further into deficit, while appropriate for an individual, do not necessarily apply to the U.S. government.

     

    Tags: Debt, Currency
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  • What I Did Not Get to Say on NPR’s On Point This Morning

    The ordinary American will gleefully support deficit reduction (as polling shows), but I’m confident that you’d get a very different reaction if you asked them whether they support cutting their own surplus by trillions of dollars.  Almost no one recognizes that the former implies the latter.

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  • Debate: The Rich Are Taxed Enough

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  • From Frustration To Prosperity

    "The American people are frustrated."

    In this article the Honorable Nina Turner looks at the frustration of the lower and middle class - those that have been worst hurt by the recession and slow recovery. She states "They are frustrated about the flat-lined economic recovery, the lack of jobs and the failed housing market.  They are frustrated that while they struggle to pay their bills with stagnant or falling incomes those at the top have rebounded; surviving the crisis relatively unscathed." Turner argues that this frustration has shown itself in both the Occupy and Tea Party movement. 

    Turner offers examples of what the private sector and government can do to address these ails. Ultimately she argues that "to do nothing is to fall behind, but by making strategic investments now we can maintain our competitive edge and lay a foundation of prosperity for generations to come."

    Americans "are fed up, and they have decided that they are not going to take it anymore."

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  • How Economic Inequality Harms Societies

    In this Ted Talk from 2011 Richard Wilkinson, Wilkinson describes the correlation between income inequality and social problems.

    A common misperception is that the richer a country is, the better-off the citizens of that country are.  Wilkinson disproves this notion and shows that there is no correlation between life expectancy and the average income of a country.

    Instead, he shows that there is a strong correlation between income inequality and a number of social  problem that he and his team combined and called the "Index of Health and Social Problems". This correlation is true for each of the social problems he mentions: life expectancy, math & literacy, infant mortality, homicides, imprisonment, teenage births, trust, obesity, mental illness - including drug and alcohol addiction and social mobility. He finds that "the more unequal countries are doing worse on social problems."

    Wilkinson takes his analysis a step further and looks at the American states. The conclusion remains the same - the more unequal the state, the worse it performs on the social measures. 

    He concludes with the notion that "We can improve the quality of human life by reducing the differences in income between us."

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  • What Happens When The Government Tightens Its Belt? (Part II)

    In this article Stephanie Kelton describes the relationship between the government, the private sector, and foreign entities. 

    She describes that when you look at these three players in the economy, one entity's purchase is another entity's sale. Therefore, any surplus for one entity equates to a deficit for another. In more simplistic terms: wen we have a trade deficit and are importing in more goods than we are exporting, that means that when compared to us foreign entities are exporting more goods to the U.S. than they are importing from the U.S. 

    Kelton specifically points out that the government has a role to play to offset the trade deficit that this country has because, "Whenever the government’s deficit is too small to offset a deficit in the current account, the private sector will experience a net loss."

    She concludes that: "the Government needs to loosen its belt when we tighten ours. If it doesn’t, then millions of us will lose our [jobs]."

    Kelton Figure 2 (Part 2)

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  • What Happens When The Government Tightens Its Belt?

    In this article Stephanie Kelton describes the interaction between the government and the private sector in regards to spending and saving.

    Kelton describes that there is a direct relationship between what is happening in the private sector and what is happening in the public sector - " the total amount of money spent buying newly produced goods and services will yield an equivalent income to the sellers of these products." Meaning that someone's purchase is another person's sale and vice versa.

    The government both collects taxes, and spends money (from salaries for government workers to social programs). Kelton demonstrates that when the government runs a surplus, meaning that it is bringing in more money than it is spending, that money is removed from the private sector.  She finishes with the statement "As the government “tightens” its belt, it “lightens” its load on the teeter-totter, shifting the relative burden onto you."

    Kelton Figure 4

     

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  • Lecture: The Next Economy and America's Future

    Robert Reich has served in four national administrations including those of Presidents Ford, Carter, Clinton, and Obama. He addresses why income and wealth have become so concentrated at the top --more concentrated than at any time since 1928 - and the consequences of such concentration, both for the economy and for politics. Then addresses what, if anything, can or should be done about it. Series: "UC Berkeley Graduate Council Lectures"

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  • Lecture: How Unequal Can America Get?

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  • A Freedom Budget For All Americans

    In the fall of 1965 A. Philip Randolph, prominent economists, allies from the labor movement and others who had participated in the 1963 March on Washington, began working on what they called "A Freedom Budget For All Americans".[1] John Nichols writing fifty years later in The Nation (United States) listed as its goals "the abolition of poverty, guaranteed full employment, fair prices for farmers, fair wages for workers, housing and healthcare for all, the establishment of progressive tax, and fiscal policies that respected the needs of working families."[2]

    Bayard Rustin, and Martin Luther King, Jr., worked with Randolph on the Freedom Budget document which was advanced in 1966, determined to win the "full and final triumph of the civil rights movement, to be achieved by going beyond civil rights, linking the goal of racial justice with the goal of economic justice for all people in the United States" and doing so "by rallying massive segments of the 99% of the American people in a powerfully democratic and moral crusade."[3] The proposals of Freedom Budget included a job guarantee for everyone ready and willing to work, a guaranteed income for those unable to work or those who should not be working, and a living wage to lift the working poor out of poverty; such policies provided the cornerstones for King’s Poor People's Campaign.[4]

    A Freedom Budget For All Americans

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  • FDR's Second Bill of Rights

    As our nation has grown in size and stature, however - as our industrial economy expanded — these political rights proved inadequate to assure us equality in the pursuit of happiness.

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