Allied Approaches Archive (Page 2)

Will America finally grant its workers First Amendment rights?

The Constitution guarantees “freedom of speech,” the right to “peaceably assemble,” and the right to petition for “a redress of grievances.” Yet these civil rights are commonly denied to workers.

Sure, we can say what we want, but we pay a high price to speak — often losing our jobs, health care, and benefits for our families. But we pay an even higher price for not speaking.

In 2016, Kyaw Kyaw, 50, died on the job at Nishikawa Cooper, a manufacturer of auto parts in Fort Wayne, Indiana, leaving a grieving wife and family.

More than 100 of his coworkers — refugees and freedom fighters who fled Myanmar’s oppression — subsequently petitioned corporate headquarters over issues of discrimination, health, and safety.

Saw Eh Dah circulated the petition — and was then fired.

In 2018, Shacarra Hogue, a 23 year-old college student, was gruesomely crushed to death in a massive press on her fourth day on the job at Fort Wayne Plastics. Equipment manufacture safety restraints had been purposely removed.

Shacarra’s co-workers knew the job was dangerous but felt coerced to say nothing for fear of losing their jobs. Now many of her traumatized former coworkers commonly think, “If only I had said something.”

Deaths like these often go ignored unless family members and fellow workers fight back. Still, the best they often receive is a modest legal settlement — and a demand to sign a non-disclosure agreement to silence them.

This leaves other workers — and all of us — vulnerable.

Boeing workers in Renton, Washington were silenced when they tried to sound the alarm about the 737Max’s deadly safety problems. It took two crashes and 346 deaths before government and the media took an interest in the complaints of muzzled workers.

It’s been a big year in U.S.-China relations, and the conclusion of 2019 may or may not see the end of a trade war between the nations. The U.S.-China Economic and Security Review Commission, charged with monitoring and investigating the national security implications of this bilateral economic relationship, has had plenty to keep an eye on.

Among a number of recommendations for congressional action in the Commission’s just-released annual report, several stand out in particular.

The Commission calls for Congress to address U.S. dependence on Chinese pharmaceuticals – an issue to which we’ve been paying close attention to for some time. Just this past month, Michael Wessel, who sits on the U.S.-China Commission, laid out in testimony before a House committee China’s plans to dominate America’s drug supply as a means of securing economic supremacy but also to potentially “weaponize its supply chain should it so choose.”   

The Commission’s 2019 report recommends that Congress continue to hold hearings exploring U.S. dependence on China’s pharmaceuticals. However, the commission is clear on the goal of these hearings: Legislation that requires the Food and Drug Administration to identify pharmaceuticals that are manufactured exclusively in China or formulated with the active pharmaceutical ingredients made in China, as well as an investigation to determine whether those drugs are manufactured with as much regulation as pharmaceuticals produced in America.

The Wall Street Journal has published a lengthy look at Amazon’s years-long effort to bring products directly from Chinese factories to me and you, the American consumer. How has this effort turned out?

Well, the title of the article is “Amazon’s Heavy Recruitment of Chinese Sellers Puts Consumers at Risk.” So … maybe good for The House That Jeff Built, but kinda bad for consumers!

This is another example of the Journal giving Amazon the business recently. Only a few weeks ago it reported that the company stubbornly lists for sale lots of clothing produced in Bangladeshi factories that even competitors like Walmart shun because of chronic violations of basic safety standards. And in August, the Journal detailed how little oversight the company has over the products sold on its platform, which results in “thousands of banned, unsafe or mislabeled products” floating around on there. The paper itself found more than 10,000 such items on the site between June and August.

And now comes today’s story. The paper reports that out of nearly 2,000 sellers of problematic items (whose addresses could be determined), more than half were based in China.

That’s the result of Amazon’s effort to “cut out the middleman” between Chinese manufacturers and America’s online shoppers.

That was the sales pitch an Amazon representative made this year at a trade event in Hong Kong … but it’s not an accurate description of what the company has been selling to the Chinese manufacturers it’s recruiting. The Journal cites another Amazonian who was much more on the nose in 2017 when she told a conference audience of Chinese business people: “We help factories directly open accounts on Amazon and sell to U.S. consumers directly. This is our value.”

These pitches appear to have been effective. Amazon doesn’t require its sellers to list where they’re located (or share that information), but the Journal cites an outside analysis of the 10,000 most-reviewed Amazon sellers that found approximately 38% of them are now located in China … a percentage that has increased steadily since Amazon began recruiting Chinese sellers in 2013.

The artisans and craftsmen at Wendell August Forge have been making holiday-ready hand-hammered metal gifts and ornaments in Mercer, Pa., for nearly 100 years.

But in 2010, it all went up in flames.

***

Located about 40 miles north of downtown Pittsburgh — the capital of the American steel industry — America’s largest and oldest forge sits tucked away in an industrial part of Pennsylvania.

Forging is one of the oldest working techniques of artisans. It involves heating, hammering and shaping metal objects. Every Wendell August Forge piece follows this old school tradition, hand-shaped one at a time by the company’s craftsmen (who also are members of the United Steelworkers).

Wendell August Forge makes a variety of items, including holiday gifts — the company is well-known for its one-of-a-kind Christmas tree ornaments — and just launched a new line of NFL-themed coasters and keychains. The company also creates home décor items including bowls, dishes, cutting boards, glassware, and other tabletop pieces. Wendell August Forge has a gift for nearly every special occasion, including wedding gifts, commemorative gifts, baby gifts, Mother’s and Father’s days gifts and patriotic holidays. 

Will Knecht owns Wendell August Forge with his sister. His mother and father bought the company in 1978, and Knecht continues to take pride in the time-tested traditions of its past.

“We really believe in this thing called American craftsmanship. We get calls two or three times a quarter with people saying there is this factory in China that you guys should really consider, and it is no way,” Knecht said. “We were Made in America before it was cool to be Made in America, and we will continue to be Made in America.”

But the future of the tough-as-metal company looked grim in 2010, when a fire caused the factory, corporate offices and flagship retail store to burn to the ground. This was just after the company had gotten its largest order ever from the Pittsburgh Penguins National Hockey League team.

Donald Trump’s idea of a good farm program seems to be “Hee Haw.” On a recent trip to Wisconsin, he drew guffaws from the state’s hard-hit dairy farmers by proclaiming that – thanks to his policies – the farm economy was looking good. “We’re over the hump,” he gloated.

Perhaps The Donald thought that farmers are rubes, unable to do simple math. But those dairy farmers were painfully aware that it costs them $1.90 to produce a gallon of milk, but the processing giants that control the milk market are paying them only $1.35 a gallon. That 55-cent-a-gallon loss quickly adds up to a huge loss of income, and a devastating loss of farm families – Wisconsin lost 638 dairy farms last year and another 551 so far this year.

Far from “over the hump,” farm prices have been further depressed by Trump’s tariff clash with China – US dairy sales to China fell by 54 percent in just the first half of this year. Meanwhile, monopoly power is crushing prices – an $8 billion behemoth named Dean Foods now controls 90 percent of Wisconsin’s milk market, empowering it to commit daylight robbery, blatantly stealing farmers’ product… and farms.

Yet, Ag Secretary Sonny Perdue – the one national official who’s supposed to stand up for farmers – nonchalantly kissed them off, smugly declaring it natural that the big devour the small. So, he professes, there’s nothing he can do for family operators except tell them to “go out” of agriculture.

Perdue and Trump are simply inept stewards of America’s farm economy. Time for a change. One who is offering a path to a revitalized, family-farm-based food system that’ll break the corporate stranglehold over US agriculture is Sen. Elizabeth Warren. Download a summary of her comprehensive proposal for “A New Farm Economy” at ElizabethWarren.com/Plans/New-Farm-Economy.

***

Proponents of the Tax Cuts and Jobs Act (TCJA) made bold claims about the effects that the TCJA’s corporate rate cuts would have on the paychecks of U.S. households. The economic theory rests on corporate rate cuts bringing forth enough additional savings to finance new investment spending. Specifically, higher after-tax corporate profits are passed down to shareholders in the form of higher dividends. These higher dividends attract more savings from abroad and incentivize U.S. households to save more. These extra savings finance new investments in plants and equipment, which boost the productivity of workers, and eventually that increased productivity boosts workers’ wages.

We pointed out at the time that in practice, this theory wasn’t likely to hold. After the TCJA passed, we indicated that by increasing deficits, the specifics of the TCJA didn’t even conform to the economic theory that was supposed to support it.

But that wasn’t enough to stop the TCJA’s proponents from making disingenuous arguments about the effects it was having on the economy. Proponents pointed to corporate claims that they were giving out bonuses or raising wages in the wake of the TCJA. The economic theory above shows clearly how this was nothing but a corporate PR ploy. Even in theory, it takes time for corporate profits to trickle down into worker wages, and we weren’t the only ones pointing this out. Unsurprisingly, data since then show those bonuses didn’t materialize for workers.

Kevin Hassett, then the chair of the Trump administration’s Council of Economic Advisers (CEA), went so far as to bless the truly economically absurd notion that “retroactive tax cuts” are a way to boost long-term growth, claiming that businesses invested more before the TCJA was passed because they somehow knew that some of the TCJA’s corporate provisions would be made retroactive.

But if you want to know if the TCJA is working as advertised, investment really is the key economic indicator to watch. If the TCJA’s corporate rate cuts are to even have a chance at reaching your paycheck, first investment has to boom. The results have been abysmal for the TCJA.

An attempt by Amazon to fill the Seattle city council with members more supportive of the company than the current progressive slate was called a chilling development for city government by critics of the move after Tuesday's election.

Socialist councilor Kshama Sawant, one of the company's top targets, told The Guardian that her race had been uphill and that the power of a massive corporation like Amazon stacked against her campaign had been difficult to overcome.

"We have run a historic grassroots campaign, with working people, community members rejecting Amazon and billionaires' attempt to buy this election, and that doesn't mean we're going to win every battle against the billionaires," said Sawant. "What matters is the political clarity that the billionaires are not on our side and that this is going to be a struggle."

Seattle is still waiting for the final results in the race—Washington has a mail-in voting system that makes final counts unavailable for days after voting—but as of Wednesday, it looked likely that Sawant and fellow socialist Shaun Scott were headed for defeat against Amazon-backed candidates Egan Orion and Alex Pederson, respectively. Neither Scott nor Sawant had conceded at press time. 

Amazon dumped cash into the race via a super PAC, according to Bloomberg:

Amazon, the biggest employer in Seattle, contributed $1.45 million to a business-backed political-action committee to help elect council members Amazon views as more favorable to its interests and those of the business community.

The group, called the Civic Alliance for a Sound Economy, backed six new candidates for seven open council seats. Three of them are trailing in early results. It also backed one incumbent, who is leading her race. Two positions were not up for election this year.

In a Medium post from November 1, Rep. Pramila Jayapal (D-Wash.), whose district includes much of Seattle, said she was unsettled by the company's involvement in the election.

Neither faith in nor critiques of the idea of meritocracy is new. Michael Young’s famous 1958 book The Rise of Meritocracy argued that class privilege and advantage were likely to be amplified as financial and cultural capital passed across generations in families. Each new generation would benefit from existing structural advantage created by their parents and even grandparents. They might be talented individuals, hardworking and driven to succeed, but they would owe their achievements in part to a myriad of inherited class advantages. Young intended the title of his book as a satire, but for many, it seems to promote the ideal of egalitarian opportunity.

A recent rash of books critically revisit the ideas in Young’s now six-decade-old book. In The Class Ceiling: Why it ays to be Privileged, Sam Friendman and Daniel Laurison provide a wonderfully accessible account of contemporary class analysis in the UK, examining the complex ways in which class influences life chances. The authors leaven the numbers with fascinating vignettes from the field showing how successful middle-class professionals are sometimes aware of their own class privilege. As one put it, “I was lucky to have a following wind”. The book does not offer a crude demonization of privilege. Instead, the study gets to the heart of how talent and hard work don’t sufficiently explain how good jobs get allocated. Often times, as The Class Ceiling shows, it’s the lucky breaks that already privileged people enjoy that allow them to achieve yet more success.

Take ‘Mark’ for example, a successful TV executive in his late thirties. Mark relates to Friedman and Laurison his own ‘following wind’. The son of successful educated professionals, he was privately educated before gaining a place at Oxford. While he was at Oxford, Mark’s parents paid for him to go on a holiday to New York to do research for his undergraduate dissertation. He stayed in Manhattan for free in an apartment owned by a contact his father had met on the side-lines of a rugby match.  This same contact then provided Mark with an introduction to the television industry. The upside of the anecdote is that Mark is full aware of his privilege and luck.

The Class Ceiling is peppered with similar tales of advantage and their mirror image, such as the pairing of Nathan and Jim. Nathan’s CV is littered with prestigious roles in TV and film.  He attributes his success to “just working incredibly hard” and “making good decisions” like turning down jobs he didn’t believe in.  As he explains, “No job is worth sacrificing yourself for”. Jim, by contrast, has decided to leave the acting profession after ‘sacrificing’ himself and his career by taking the kind of parts Nathan can afford to avoid. Jim’s working-class origins still constrain him in his forties.  He struggled so hard to get into the acting profession, but the typecast jobs he has to take ultimately end up damaging his career and lead to offers drying up altogether. Class both constrains and enables after all.

Steel industry associations in the Americas, Europe, Africa and Asia are urging their governments to intensify efforts to confront and solve the issue of excess capacity in the global steel sector.

Apparently, current methods just don’t seem to be working effectively!

The 19 associations involved released a statement, urging their various governments into action including implementing “strong rules and remedies that reduce excess capacity, its impact and causes.”

Just get some strong rules going! Sounds like a simple fix, right?

The solution becomes more complicated as the unexpected growth of new steelmaking facilities have contributed to trade tensions and have aroused some concern. Wherever could those be? The steel industries concurrently agree that the systems in place aren’t working and that “efforts by the governments to eliminate practices that lead to excess capacity should be doubled.” And they also praised a September statement from the Organization for Economic Cooperation and Development that expressed concern over the recent capacity expansions.

In the statement the associations said they’re “hopeful that the diligent efforts of Japan, the current G20 Chair, are successful in extending the G20 Global Forum on Steel Excess Capacity beyond 2019.” That means these industries want these global organizations to keep talking about fixes to the overcapacity problem.

But let’s be clear about where the overcapacity problem starts and stops: In China.  

***

Americans are more aware than ever that America has a race problem — and, more specifically, a racial wealth divide problem. As researchers from the Institute for Policy Studies and I found earlier this year, median white families are 41 times wealthier than median Black families in the United States.

As our country becomes more diverse, this shocking racial wealth divide is no longer a challenge for disenfranchised minorities alone. It’s a threat to the entire American middle class.

Let me show you how.

Since the early 1980s, median wealth among Black and Latino families has been stuck at less than $10,000, while median white wealth has grown to $140,000. Yet in spite of this growing white wealth, this huge divide means that national median wealth has actually declined.

The racial wealth divide, in short, is weakening our country as a whole.

Contributing to this divide is ongoing racial inequality in the two largest assets in most Americans’ portfolios: business ownership and homeownership.

For the last 40 years, Black and Latino homeownership rates have stayed below 50 percent, while white homeownership has remained steady at about 70 percent.

And although 13 percent of the U.S. population is Black, only 2 percent of U.S. businesses employing more than one person are Black-owned. Hispanics are 17 percent of the population but own just 6 percent of these businesses.

How do we fix this? By making smart investments.

The white middle class was built by major investments promoting education and homeownership, among other things, after World War II. But African Americans, Latinos, and Native Americans were almost entirely left out of these programs. Now these groups deserve significant investments of their own.

Donald Trump ran for president promising to uplift workers. But his actions have done the exact opposite.

According to a new EPI report, Trump appointees on the board of a small, independent agency called the National Labor Relations Board (NLRB)—and the NLRB’s Trump-appointed general counsel (GC)—are working hard to undermine workers’ rights to join together in collective action to improve pay and working conditions.

As authors Celine McNicholas, Margaret Poydock, and Lynn Rhinehart warn, Trump’s appointees have ticked off one by one the 10 items on a U.S. Chamber of Commerce hit list of NLRB policies to overturn. And they’re not done yet: The NLRB plans to go after more worker protections in the months ahead.

Under the National Labor Relations Act (NLRA), most nonsupervisory private-sector workers have the right to join together in collective action—whether that is through forming a union or some other means—to negotiate with employers about the terms and conditions of their employment. The NLRB was established to safeguard those rights by investigating and prosecuting violations of the law.

Instead, the three Trump appointees to the agency’s board and the agency’s Trump-appointed GC are systematically rolling back workers’ rights through a flurry of employer-friendly case decisions, rulemakings, and guidance memos. At the same time, the agency has downsized by 10 percent of its staff: The ratio of covered workers to NLRB staff is now roughly 96,000-to-1, up from 65,000-to-1 in 2011.

Here, in general terms, are just a few of the things the Trump NLRB is doing (those of you who know your way around labor law can go directly to the report):

Making it even harder for workers to communicate with their co-workers about workplace issues

Under current law, workers seeking to form a union are at a big disadvantage when it comes to workplace communications. Employers are allowed “to communicate their anti-union views freely, over the company e-mail system, in one-on-one meetings with employees, and mandatory group meetings” where employees who refuse to attend may face termination or other discipline, the report notes. Employees have no such rights. And because of Trump board decisions in recent cases (Bexar, UPMC, and Kroger Limited), workers’ and unions’ rights are even further restricted. Now, union organizers can’t talk with employees even in nonwork public spaces like cafeterias, nor can off-duty employees leaflet in leased but not owned company premises. Union organizers cannot solicit support in areas where other organizations (like charities) have been able to solicit. These decisions tip the scales even further in employers’ favor by “allowing them to blatantly discriminate against union communications—singling out and excluding union organizers and union communications while allowing the public generally and other groups.”

Steel industry associations in the Americas, Europe, Africa and Asia are urging their governments to intensify efforts to confront and solve the issue of excess capacity in the global steel sector.

Apparently, current methods just don’t seem to be working effectively!

The 19 associations involved released a statement, urging their various governments into action including implementing “strong rules and remedies that reduce excess capacity, its impact and causes.”

Just get some strong rules going! Sounds like a simple fix, right?

The solution becomes more complicated as the unexpected growth of new steelmaking facilities have contributed to trade tensions and have aroused some concern. Wherever could those be? The steel industries concurrently agree that the systems in place aren’t working and that “efforts by the governments to eliminate practices that lead to excess capacity should be doubled.” And they also praised a September statement from the Organization for Economic Cooperation and Development that expressed concern over the recent capacity expansions.

In the statement the associations said they’re “hopeful that the diligent efforts of Japan, the current G20 Chair, are successful in extending the G20 Global Forum on Steel Excess Capacity beyond 2019.” That means these industries want these global organizations to keep talking about fixes to the overcapacity problem.

But let’s be clear about where the overcapacity problem starts and stops: In China.  

What nation ranks as the world’s richest? A simple question to answer, right. Well, not so much, suggests the just-released tenth annual Global Wealth Report from the banking giant Credit Suisse. Everything turns out to depend on how we define “richest.”

If we mean by “richest” the nation with the most total wealth, we have a clear worldwide number one: the United States. The 245 million adults who call the United States home held, as of this past June, a combined net worth of $106 trillion. No other nation comes close to that total. China ranks a distant second, with a mere $64 trillion, Japan even farther back at $25 trillion.

But if we mean by richest the nation with the most wealth per person, top billing goes to Switzerland, not the United States. The average Swiss adult is sitting on a $565,000 personal nest-egg. Americans average $432,000, a figure only good enough for second place.

So does Switzerland merit the title of the world’s wealthiest nation? Not necessarily. The Swiss may sport the world’s highest average wealth, but that doesn’t automatically mean that their nation has the world’s richest average people.

We’re not playing word games here. We’re talking about the important distinction that statisticians draw between mean and median. To calculate a national wealth mean — a simple average — researchers just divide total wealth by number of people. The problem with this simple average? If some people have fantastically more wealth than other people, the resulting average will give a misleading picture about economic life as average people live it.

Medians can paint a more realistic picture. Statisticians calculate the median wealth of a nation by identifying the amount of wealth that represents the midpoint in the nation’s wealth distribution, that point at which half the nation’s population has more wealth and half less. Medians, in other words, can give us a nation’s most typical net worth, the wealth that a nation’s most ordinary people hold.

Last week we noted how an international group of steel industry associations had released a statement, calling on their governments to figure out a way to reduce steel production overcapacity – the difference between an industry’s potential output and current production.

They released it ahead of a meeting of the G20 Global Forum on Steel Excess Capacity, which convened in Japan over the weekend. That forum was created in 2016 to find some international consensus on how to fix the overcapacity problem, which is (not entirely but) mostly a problem created by China’s massive steel industry.

The Chinese government might dismiss that as an outsider’s biased opinion, but consider the context in which China’s steel industry grew. In the early 90s it became a “strategic” industry in government planning documents. According to an analysis of the industry produced a few years ago at AAM’s behest by Duke University, “state direction, supplemented by state subsidies, incentives, and strong internal demand for steel, had an important role in developing China’s steelmaking capacity.”

And so it went from responsible for a fraction of global production in 2000, when it produced 129 million metric tons (MMT), to approximately half of production in 2015, when it produced 804 MMT. While most of that Chinese steel was consumed in China – the country spends a lot on infrastructure as a form of economic stimulus, and infrastructure requires steel – its considerable excess spilled out into the international market, depressing prices and triggering bankruptcies and layoffs. This was essentially the preamble to the import tariffs the Trump administration finally raised on steel in 2018.

So back to this weekend’s G20 steel forum: Was any news created during this meeting? Anything of note?

Adam Neumann, the CEO of beleaguered work-sharing start-up WeWork, will walk away from the company with $1.7 billion, enough money to easily pay over four years of salaries for the 4,000 workers expected to be laid off in the company's restructuring.

That's according to Sean Porter, a data scientist at analyst firm Decision Data. For the hypothetical, Porter assumed each worker makes an average of $90,000 due to self-reporting and employee demographics. 

While it's hard to pinpoint a super accurate number of average employee salary, most online sources of payroll data suggest the average WeWork staffer makes somewhere between $85,000 – $106,000 [sources: 1,2]. Even then, both of these numbers are likely inflated by most respondents likely being tech employees, and less likely to be operational staff like janitors and front desk employees, where approximately 1,000 of the layoffs will come from, according to Reuters.

Assuming the salary at $90,000, Porter found that the company would owe the 4,000 employees roughly $360 million a year—which goes into $1.7 billion 4.7 times.

"The number was quite shocking," wrote Porter.

Multinational holding company SoftBank pushed Neumann out of WeWork with the golden parachute, it was reported on Tuesday, a decision that World Socialist Website reporter Harvey Simpkins called "outrageous." More job losses, Simpkins wrote, seem inevitable.

"This is likely only the beginning of a jobs massacre," wrote Simpkins. "The technology-industry publication The Information reports that as many as 5,000 layoffs could be forthcoming."

Neumann's payout for WeWork—a company that has seen wild swings in valuation over the past year and is considered a troubled asset—was described to Business Insider by consulting firm Steel City Re CEO Nir Kossovsky as a hit to SoftBank's reputation. 

"Throwing him overboard with a golden parachute does deliver a mixed message," said Kossovsky.

***

Reposted from Common Dreams

Why do so many Americans deeply distrust government? One part of the reason, two top economists suggested to a key congressional committee this week, just might be the most basic — and familiar — of the economic statistics the federal government produces.

That stat — gross domestic product, or GDP — “measures the market value of the goods, services, and structures produced by the nation’s economy,” as calculated by the federal Bureau of Economic Analysis. The Bureau generates new GDP figures for every quarter of the year, and the release of these figures regularly makes headlines. Are we heading for a recession? Is the economy booming? Reporters and pundits scour the GDP stats for clues to our future, and presidents and lawmakers rush to hail a rising GDP as proof their policies are working.

But these journalists and pols are all ignoring the most basic of questions: Working for whom?

A half-century ago, in an America much more equal than the nation we have now, this distributional question seldom came up. Back then, average Americans shared in the nation’s economic growth. If the GDP figures had the national economy growing nicely, economist Heather Boushey told the congressional Joint Economic Committee yesterday, most Americans saw their personal incomes growing nicely as well.

In our strikingly unequal contemporary economy, notes Boushey, this linkage no longer holds. GDP growth has become “decoupled from the fortunes of most Americans.” Growth is benefiting “only those at the very top of the economic ladder.”

“Incomes for the working class and the middle class have grown slowly for decades,” explains Boushey, the co-founder of the Washington Center for Equitable Growth, “while incomes at the very top have exploded.”

Today’s GDP numbers don’t capture any of this reality. As an aggregate figure, GDP fudges the difference between our economy’s winners and losers. You can drown, the old quip puts it, in a lake with an average depth of six inches. By the same token, you and your neighbors can be taking it on the chin in an economy with a rapidly rising GDP.

And average Americans have been taking it on the chin. Our rising GDP numbers are masking the chronic economic insecurity that huge swatches of the American people have been living.

People seem especially skeptical of China these days.

South Park put together a whole episode about China (and saw its existence in China vanish). The NBA spent the week stumbling over itself to appease the Chinese government, and then on Oct. 9, at least three fans in Philadelphia and in Washington, D.C. were removed from NBA exhibition games at U.S. arenas for holding up signs in support of pro-democracy protests in Hong Kong. 

That same day, New York Times opinion columnist Farhad Manjoo penned this:

“The People’s Republic of China is the largest, most powerful and arguably most brutal totalitarian state in the world. … Yet unlike the way we once talked about pariah nations — say East Germany or North Korea or apartheid South Africa — American and European lawmakers, Western media and the world’s largest corporations rarely treat China as what it plainly is: a growing and existential threat to human freedom across the world.”

A lot of people are finally waking up to the shuddering effects China’s model of state-led capitalism is having around the world. But many in the United States are still willing to overlook these concerns (and others, like say China’s abysmal record on human rights) so long as they can turn a profit by accessing the Chinese market.

That part of the story has gotten a lot of attention (watch that South Park episode for more). What garners less notice is that many Americans are also willing to welcome China’s heavily subsidized state-owned enterprises (SOEs) to set up shop in their communities. This is a mistake.

American Jobs At Risk

We already have seen the destructive impacts of China’s model of state-led capitalism on our domestic manufacturing sector, and the damaging ripple effects on thousands of communities across our nation. Between 2001 and 2017, 3.4 million U.S. jobs were lost or displaced because of our massive bilateral trade deficit with China.   

Most of those jobs went away because American companies offshored production to China following its entry into the World Trade Organization, which was supposed to move China toward a market-based economy (spoiler: the opposite happened).

But now China’s government-owned, controlled and subsidized companies are setting up assembly operations right here in the United States.

Amid an enormous trade war between the U.S. and Chinese governments, China’s trying to get $2.4 billion from the United States for its non-compliance with a World Trade Organization (WTO) ruling over the legitimacy of tariffs from the Obama era.

Yes, that’s right: In 2012 China disputed the application of a bunch of tariffs on solar panels, wind turbines, and certain steel and aluminum products, and a WTO appeals court agreed that some of the U.S. tariffs were unfair. From Reuters:

China’s request appears on the agenda of the (Dispute Settlement Body) set for Oct. 28. The United States could challenge the amount of retaliatory sanctions sought, which could send the long-running dispute to arbitration.

The office of U.S. Trade Representative (USTR) Robert Lighthizer has said the WTO ruling recognized that the United States had proved that China used state-owned enterprises to subsidize and distort its economy.

But the ruling also said the United States must accept Chinese prices to measure subsidies, even though USTR viewed those prices as “distorted”.

Without having read the text of the WTO ruling, that ruling seems kinda odd ... despite being in a vein similar to previous WTO rulings against the U.S. It’s well documented that China has for years subsidized the friggin’ heck out of these industries, saturating some of them so much that they caused global overcapacity problems. And accepting Chinese prices to measure subsidies would seem to fly in the face of the fact that China remains a non-market economy.

The lawyers are gonna wrestle this one out, and we’ll keep an eye on it. This case is illustrative, though, of a larger point: The trade policies pushed by the Chinese government were a problem before Donald Trump became president. And although negotiations toward a comprehensive deal continue, and although it’s a good thing that this guy has (however ham-handedly) squared off with China over its unfair trade practices, these problems are almost guaranteed to continue after him.

This is a long game. Whatever deal the USTR is able to reach with his Chinese counterparts needs to be a comprehensive as possible. No settling for soybeans!

***

Reposted from AAM

Remember when the Chinese government was beating the drum hard to gain “market economy” status in the eyes of the World Trade Organization (WTO)?

It’s been a little while since this last came up. A lot of trade politics has happened since we last wrote about it. Namely; the Trump administration has hit China with a raft of tariffs on Chinese goods, and the Chinese government has responded in kind. Billions of dollars in tariffs tend to distract from questions like “is China a market economy?”

But it really is a fundamental question in the context of WTO decisions. Because China is considered a non-market economy (NME), WTO-approved anti-dumping tariffs on Chinese products suspected of being sold at an unfair price can be based on the price of the same product from a third country – where the product is manufactured at a market rate.  

China had argued that the terms of the WTO accession deal it made in 2001 granted it automatic market economy status after 15 years (the terms made it clear that other WTO members could treat China as a NME because it was clearly a NME). And as soon as those 15 years were up in December 2016, it took the European Union to the WTO’s dispute settlement – basically, to trade court – over “the method Brussels applied for calculating anti-dumping duties on states seen as non-market economies,” writes Politico. Back then we called this a “divide and conquer strategy.”

Well, Politico got its hands on a confidential WTO report on that case. It was was issued earlier this year, and only to the parties involved. China, Politico reports, “conceded that parts of the ruling would have been so detrimental that it suspended the case and asked for the report to not be published, keeping the panel's reasoning locked away.”

Last month, the Washington Post reported that Joe Biden is considering including a financial transactions tax (FTT) as part of his campaign for the Democratic nomination. For those of us who have long advocated such a tax, this is very good news.

On this issue, Bernie Sanders has taken the lead among presidential candidates, including an FTT as part of his plan for free college tuition free. Several other candidates also support an FTT, but if the Democratic Party’s leading centrist candidate endorses the tax, it would mark a new degree of acceptance within the mainstream of political debate.

It may be somewhat surprising, but Senator Warren is not among those supporting an FTT. This is certainly not due to a reluctance to challenge the interests of the wealthy. Warren has proposed a wide variety of measures that would directly challenge the interests of the rich and powerful.

The most ambitious item on this agenda is a wealth tax. Her tax would tax wealth above $50 million at the rate of 2.0 percent a year and wealth above $1 billion at the rate of 3.0 percent a year. (Sanders has an even larger wealth tax.) While there are good reasons for wanting to tax the very rich, an FTT is almost certainly a better economic policy and would have much better political prospects.  

We can see the economics of an FTT are superior when we consider the motivation for taxation by the federal government. As the proponents of Modern Monetary Theory remind us, the federal government doesn’t need revenue to spend, it prints money. The purpose of taxation by the federal government is to reduce consumption, so as to create the economic space for spending. The argument is that if the government spent a large amount of money, and didn’t have any taxes, it is likely to create too much demand in the economy, thereby generating inflation.

To see this point, imagine that the federal government was to spend another $1 trillion next year on Green New Deal policies (a bit more than 20 percent of current federal spending), such as clean energy and mass transit subsidies. If there were no increase in taxes, we would expect to see a huge surge in demand in the economy, likely leading to inflation. (Assume that the Federal Reserve Board simply prints more money so that interest rates are little changed.)

Now suppose we had another big Republican-style tax cut where we handed $1 trillion annually to the very richest people in the country. Also assume that we have no offsetting reduction in spending or increase in other taxes.

Like most politicians, corporate executives never do anything wrong. If anything wrong does “happen,” it’s always someone else’s fault.

That’s been the gutless ploy of Kroger supermarket honchos who recently yanked all local newsweeklies and community papers out if its stores. When a firestorm of local protests reached all the way to the mega-chain’s Ohio headquarters, executives quickly named the villain who banished the papers: The papers themselves! They failed to keep up with the digital age, said Kroger bosses, so shoppers no longer pick up the free papers.

BOVINE EXCREMENT! While it’s true that chain-owned daily newspapers are losing readers after shriveling their coverage and jacking up their prices, more readers have turned to free local independent weeklies to fill the print-news gap. In Lansing, Michigan, for example, media audits show that Kroger shoppers alone have nearly tripled the pickup rate of Lansing’s alternative weekly since 2012.

Kroger’s nationwide edict is a case of corporate conceit at its most stupid. It was issued from Kroger headquarters with no warning and no consultation (much less negotiation) with the papers or communities. It didn’t have to be so inept and ugly – and now Kroger’s executives have gone into hiding, petulantly refusing to meet or even return phone calls to the people they’re hurting, apparently hoping the furor will just go away.

That’s truly stupid. Indeed, a group of indy papers has now launched a national campaign to call out Kroger’s executives, literally rallying us supporters of independent local news to give them our two-cents-worth. Call toll-free to 1-800-KROGERS (576-4377), then press 3 for “store experience” to speak to a manager – and demand that they restore the free press to all of their stores.

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Reposted from Jim Hightower

In 2015, Democratic pollster Stan Greenberg advised Hillary Clinton to run on a promise to “level the playing field” and “rewrite the rules of the economy.”  She didn’t take his advice. Instead, she told voters she would “build on the progress” of the Obama administration and “create ladders of opportunity.”

Professors like me, who get to speak in full paragraphs all the time, can easily dismiss campaign slogans as superficial and manipulative.  But they are organizing principles that can align basic vision with both policy proposals and organizing strategies.  These two slogans still reflect two possible organizing principles for the Democratic Party in 2019-20.  Biden wants to build on Obama’s progress, and Sanders and Warren aim to rewrite the rules of the economy, boldly addressing our runaway inequality of income and wealth.  Like Greenberg four years ago, I believe that candidates who articulate a broad left-populist approach will be more electable in 2020.   And as we face a future filled with peril, they are the only leaders who can govern in a way that could repair our toxic race and class dynamics.

Greenberg skewers the “build on the progress” trope by showing how many people didn’t see any progress during Obama’s eight years, both in the economic data and in what people told him in surveys and focus groups.  He thinks this slogan actually moved some people to vote for Trump, who in 2016 seemed to many to be the one offering some hope and change.  Greenberg predicts that Trump will hang himself on the same trope next year, if he isn’t impeached and removed from office before then.

But I think it’s the second part of Clinton’s 2016 message that reflects the real problem: there’s an important difference between aspiring to “ladders of opportunity” versus “leveling the playing field.”  The first emphasizes equality of opportunity, while the second is about equality of condition.  Equality of opportunity aims to give everybody an equal chance to climb a ladder to get one of the limited number of spots on a playing field that is severely titled by race, gender, and class.  Equality of condition is about getting everybody on a level playing field, not necessarily in equally desirable spots but with some substantial narrowing of the best and worst spots and with the worst spots being adequate for a decent and meaningful life.

To get anything close to equality of opportunity, we would have to vote to take away the huge opportunity advantages currently enjoyed by most of the professional middle class.  This is a large group of people and they vote a lot, so no politician will either promise to or do what’s necessary, no matter how much they talk about equality of opportunity in the abstract.

Another hours-long primary debate is in the books. There were 12 candidates on stage last night! For another three hours! Not a great format for TV!

That said: One of these people could be in the White House in a little over a year from now, so we should probably pay a little attention, even if we're still months away from voting. So let’s boil it down. What did we notice in last night's debate?  

Elizabeth Warren on trade vs. automation 

Moderator: “Senator Warren, you wrote that blaming job loss on automation is, quote, ‘a good story, except it's not really true.’ So should workers here in Ohio not be worried about losing their jobs to automation?”

Warren: “So the data show that we have had a lot of problems with losing jobs, but the principal reason has been bad trade policy. The principal reason has been a bunch of corporations, giant multinational corporations who've been calling the shots on trade, giant multinational corporations that have no loyalty to America. They have no loyalty to American workers. They have no loyalty to American consumers. They have no loyalty to American communities. They are loyal only to their own bottom line.”

“I have a plan to fix that, and it's accountable capitalism. It says, you want to have one of the giant corporations in America? Then, by golly, 40 percent of your board of directors should be elected by your employees.”

Insta-Analysis: That is indeed Sen. Warren’s plan. Requiring 40 percent of all corporate boards to worker-elected is not the only part of it, but it’s a real big part. You can read about the rest here.

Is she right, though, that trade’s a bigger job-loss culprit than automation? It depends on which jobs you’re talking about. Manufacturing jobs have definitely been lost as we’ve run up trade deficits with China over the years. There’s a plausible argument to be made that import competition killed off factory employment in the United States.  

The United Food and Commercial Workers and three of its Minnesota locals, who represent workers at slaughterhouses, and the pro-worker Public Citizen activist group filed suit against a GOP Trump administration rule that could in effect return the nation’s pork production to conditions found in The Jungle more than a century ago.

The case, filed by UFCW and its Locals 2, 410 and 663 on Oct. 7 in U.S. District Court in Minneapolis, says the new inspection regime – or lack of it – that Trump’s Agriculture Department wants to impose endangers both safety of workers on the job and the nation’s health, by leaving pork carcasses open to bacterial hazards.

Trump’s Agriculture Department promulgated the final rule in the last several weeks and officially published it on Oct. 1. Deep in its text, it says the rule will add $87 million to the profits of the nation’s agribusiness pork processors.

But it would do so, the suit and the unions retort, at the expense of worker health and safety – particularly repetitive motion injuries – and consumer health, by letting diseased pork carcasses go by on the production line with no oversight from federal inspectors. They’d only get to look at the hogs before the carcasses enter the line and after they come off.

In between, the suit says, untrained plant employees -- i.e. managers ordered to speed through as many hogs as possible to increase production and profits – would eye carcasses.

Trump’s pork processing rule is yet another instance of his pro-plutocratic GOP administration caving to the wishes of the corporate class. The pork processors have been agitating for years for no speed limits on pork processing lines. They also lobbied for fewer, or no, federal inspectors to yank off diseased hogs. They got their wish in Trump’s rule.

In both senses, those conditions harken back to Upton Sinclair’s The Jungle, published in 1905. It exposed dangerous conditions – both to workers and consumers – in pork slaughterhouses of Chicago’s stockyards, the “Hog Butcher to the World.”

It took almost five years to wend its way through state agencies and courts, but home health care workers who toil for the Twin Cities-based Baywood Home Care agency will share $350,000 from the firm for unpaid overtime.

The win came from the Minnesota Supreme Court on Sept. 18, in a case brought on the workers’ behalf by the state Department of Labor, the St. Paul Union Advocate reported.

The department investigated a complaint, filed in 2014, that the agency was violating the state Fair Labor Standards Act, which  mandates time-and-a-half pay for all hours worked over 48 per week.

The federal FLSA mandates overtime pay for all hours worked over 40 per week, but it doesn’t cover home health care workers. Minnesota’s does. Responding to evidence presented by the Service Employees, the Obama-era federal Labor Department brought home health care workers nationwide under the federal FLSA, for one year, until home health care interests got federal courts to toss that rule out.

Baywood broke the state law, the state agency told the state court, by working its employees for 24 hours at a time, but not every day. They were paid set daily rates regardless of how long they worked each week.

The state court said the daily rates are no substitute for overtime pay. When the home health care workers toiled more than 48 hours a week each, the workers were entitled to time-and-half pay “regardless of how the worker was compensated” before hitting that weekly limit.

Not paying the workers overtime is a form of wage theft, which costs Minnesota workers alone $22 million statewide every year, estimates show.

“All Minnesotans deserve to be paid every dollar they are owed for the work they perform,” state Labor Commissioner Nancy Leppink said in a statement after the court’s decision. The court also ordered the firm to pay the state agency $350,000 in damages.

“Too many workers are not being paid their full wages. With this decision, these employees are now one step closer to being correctly compensated for their work and for the harm they experienced,” she added.

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On August 12, 2019, Democratic presidential candidate Andrew Yang tweeted, “I’ve done the MATH, it’s not immigrants taking our jobs, it’s automation. Instead of blaming immigrants, let’s give our citizens the means to thrive through the fourth industrial revolution.” This, like much of Yang’s and others’ current discourse regarding automation, is focused on an exaggerated fear that automation can and soon will replace workers’ roles in production, resulting in widespread job loss. But for hundreds of years, technological progress has continually reshaped the way work is done—and yet this progress has never resulted in a long-term decline in the labor force. Focusing on overstated risks of job loss from automation distracts from efforts to advocate for higher wages, better benefits, and increased bargaining power—issues that have been, and will continue to be, essential to the well-being of workers and their families.

However, while there is no reason to believe that automation will lead to widespread, sustained decline in the overall number of jobs, there will be specific jobs, industries, and workers for whom the impact of automation will come with real costs, at least in the short term. One industry in which concerns about automation may be warranted in the near term is transportation. Ford and Volvo have both announced plans to put fully autonomous vehicles on the road as early as 2021; Honda has announced a partnership with GM to begin developing autonomous vehicles; and Nissan recently introduced “no-hands driving” on highways in its ProPilot 2.0. While consumer skepticism may slow down the industry’s timelines, many advances have already been made: Most new cars have computerized driver assistance options; Tesla’s Autosteer has logged at least one billion miles of supervised autonomous driving; and Caterpillar is already producing autonomous vehicles for hauling mining materials.

The automation of transportation could have particular implications for truck drivers. Although truck drivers represent a small share of all workers, that share has grown since the early 1980s: Truck drivers have gone from being 0.7% to just under 1% of the total workforce. More than one-third of these truck drivers are black and Hispanic men. According to EPI analysis of 2016–2018 Current Population Survey Outgoing Rotation Group (CPS-ORG) microdata, among full-time workers, “Driver/Sales Workers and Truck Drivers” is currently the number one occupation for black men and the number two occupation for Hispanic men. For the sake of this analysis, my definition of “Truck Drivers” includes this occupational category as well as the category “Industrial Truck and Tractor Operators” and is limited to the detailed industry categories “Trucking Services” or “Truck Transportation.” In order to have a large enough sample to examine employment by race, ethnicity, and gender, I combine data from the CPS-ORG into five-year intervals.

CEO compensation in the United States may have finally crossed the line — from outrageously unfair to intolerably obscene. In 2018, a new Institute for Policy Studies report details, 50 major U.S. corporations paid their top execs over 1,000 times the pay that went to their most typical workers.

What can we do about obscenity this raw? Plenty. We can start by placing consequences on the CEO-worker pay ratios that publicly traded U.S. corporations must now annually disclose.

In Oregon, the city of Portland already has. Since 2017, major companies that do business in Portland have had to pay the city’s business tax at a higher rate if they compensate their top execs at over 100 times what they pay their median — most typical — workers.

State lawmakers have introduced similar legislation in seven states, and, earlier this week, White House hopeful Bernie Sanders announced a plan to hike the U.S. corporate income tax rate on all large firms that pay their top execs over 50 times their worker pay. Some context: A half-century ago, few U.S. corporations paid their chief execs over 25 times what their workers earned.

The new Sanders plan has drawn predictable scorn from the usual suspects. One analyst from the right-wing Manhattan Institute, for instance, told the Washington Post that a pay-ratio tax “could dramatically affect industries such as fast food and retail that naturally pay lower wages.”

Corporations pay “what the market demands,” added Adam Michel from the equally conservative Heritage Foundation, “and levying new taxes on high pay will just make U.S. businesses less able to compete globally, expand their workforces, or raise wages of rank and file workers.”

From the AAM

Manufacturing employment dropped in September, with the sector losing 2,000 jobs, the Bureau of Labor Statistics reported on Friday. Motor vehicles and parts saw 4,100 lost jobs, while computer and electronic products gained 3,800 jobs.   

Meanwhile, new trade figures showed that the overall goods and services deficit hit $54.9 billion in August, up $0.9 billion from July, while the goods deficit with China reached $28.9 billion.

Alliance for American Manufacturing President Scott Paul said:

September was a lousy month for factory jobs. While many pressures may have contributed to this month's employment decline, one thing is becoming more clear: Manufacturing is weak right now.

There are a couple of policy shifts that could help strengthen the sector. First, passing a robust new investment in our nation’s infrastructure. Second, reconsidering the merits of an overvalued dollar, which is hampering our exports. Third, a final trade agreement with China that will rein in its massive industrial overcapacity and subsidies, and provide our businesses and workers with more certainty and a better playing field.

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