Robert B. Reich's Blog, page 92

TEN WAYS TO MAKE THE ECONOMY WORK FOR THE MANY, NOT THE FEW: #7,...

TEN WAYS TO MAKE THE ECONOMY WORK FOR THE MANY, NOT THE FEW: #7, STRENGTHEN UNIONS AND PREEMPT STATE “RIGHT-TO-WORK” LAWS

One big reason America was far more equal in the 1950s and 1960s than
now is unions were stronger then. That gave workers bargaining power to get a fair share of the economy’s gains – and unions helped improve wages and working
conditions for everyone.

But as union membership has weakened – from more than a third of all
private-sector workers belonging unions in the 1950s to fewer than 7 percent
today – the bargaining power of average workers has all but disappeared. 

In fact, the decline of the American middle class mirrors almost exactly the decline of American labor union membership. 

So how do we strengthen unions?

First, make it easier to form a union, with a simple majority of
workers voting up or down. 

Right now, long delays and procedural hurdles give
big employers plenty of time to whip up campaigns against unions, even
threatening they’ll close down and move somewhere else if a union is voted in.

Second, build in real penalties on companies that violate labor laws
by firing workers who try to organize a union or intimidating others. 

These
moves are illegal, but nowadays the worst that can happen is employers get
slapped on the wrist. If found guilty they have to repay lost wages to the
workers they fire. Some employers treat this as a cost of doing business. That must be stopped.  Penalties should be large enough to stop this illegality.

Finally – this one has been in the news lately, and if you only
remember one thing, remember this: We must enact a federal law that pre-empts
so-called state “right-to-work” laws. 

Don’t be fooled by the “right to work” name. These laws
allow workers to get all the benefits of having a union without paying union
dues. It’s a back door destroying unions. If no one pays dues, unions have no
way to provide any union benefits. And that means lower wages.

In fact, wages in right-to-work states are lower
on average than wages in non-right-to-work states, by an average of about $1500
a year. Workers in right-to-work states are also less likely to have
employer-sponsored health insurance and pension coverage. 

When unions are
weakened by right-to-work laws, all of a state’s workers are hurt.

American workers need a union to bargain on their behalf. Low-wage
workers in big-box retail stores and fast-food chains need a union even more. 

If
we want average Americans to get a fair share of the gains from economic
growth, they need to be able to unionize.

#6. End Corporate Welfare Corporations aren’t people, despite...

#6. End Corporate Welfare 

Corporations aren’t people, despite what the Supreme Court says,
and they don’t need or deserve handouts. 

When corporations get special handouts from the government –
subsidies and tax breaks – it costs you. It means you have to pay more in taxes
to make up for these hidden expenses. And government has less money for good
schools and roads, Medicare and national defense, and everything else you need.

You might call these special corporate handouts “corporate
welfare,” but at least welfare goes to real people in need. In the big picture,
corporate handouts are costing tens of billions of dollars a year. Some
estimates put it over $100 billion – which means it’s costing you money that
would otherwise go to better schools or roads, or lower taxes.

Conservatives have made a game of obscuring where federal
spending actually goes. In reality, only about 12 percent of federal spending
goes to individuals and families, most in dire need. An increasing portion goes
to corporate welfare.

Other examples: The oil, gas, and coal industries get billions
in their own special tax breaks. Big Agribusiness gets farm subsides. Big
Pharma gets their own subsidy in the form of a ban on government using its
bargaining power under Medicare to negotiate lower drug prices. And hedge-fund
and private-equity managers get a special tax loophole that treats their income
as capital gains, at a lower tax rate than ordinary income.

The real issue isn’t the government’s size. It’s whom government
is for. Much of government is no longer working for the vast majority it’s
intended to serve. If government were responding to the public’s interest
instead of the moneyed interests, it would be providing more support for
communities, families, and individuals who need it the most.

There’s no reason any corporations should be on the dole, or
that your hard-earned dollars should be going to them for no reason but their
political clout.

So we have to demand an end to corporate welfare. No more
handouts to particular corporations and industries simply because they’re big
enough and powerful enough to get them. No more specialized tax breaks. No more
exemptions or special treatment. No more crony capitalism.

Want to end corporate welfare? Watch my latest video now, and
share it with your friends.

Ten Ideas to Save the Economy #6: End Corporate Welfare...

Ten Ideas to Save the Economy #6: End Corporate Welfare Now

Corporations aren’t people, despite what the Supreme Court says,
and they don’t need or deserve handouts. 

When corporations get special handouts from the government –
subsidies and tax breaks – it costs you. It means you have to pay more in taxes
to make up for these hidden expenses. And government has less money for good
schools and roads, Medicare and national defense, and everything else you need.

You might call these special corporate handouts “corporate
welfare,” but at least welfare goes to real people in need. In the big picture,
corporate handouts are costing tens of billions of dollars a year. Some
estimates put it over $100 billion – which means it’s costing you money that
would otherwise go to better schools or roads, or lower taxes.

Conservatives have made a game of obscuring where federal
spending actually goes. In reality, only about 12 percent of federal spending
goes to individuals and families, most in dire need. An increasing portion goes
to corporate welfare.

Other examples: The oil, gas, and coal industries get billions
in their own special tax breaks. Big Agribusiness gets farm subsides. Big
Pharma gets their own subsidy in the form of a ban on government using its
bargaining power under Medicare to negotiate lower drug prices. And hedge-fund
and private-equity managers get a special tax loophole that treats their income
as capital gains, at a lower tax rate than ordinary income.

The real issue isn’t the government’s size. It’s whom government
is for. Much of government is no longer working for the vast majority it’s
intended to serve. If government were responding to the public’s interest
instead of the moneyed interests, it would be providing more support for
communities, families, and individuals who need it the most.

There’s no reason any corporations should be on the dole, or
that your hard-earned dollars should be going to them for no reason but their
political clout.

So we have to demand an end to corporate welfare. No more
handouts to particular corporations and industries simply because they’re big
enough and powerful enough to get them. No more specialized tax breaks. No more
exemptions or special treatment. No more crony capitalism.

Want to end corporate welfare? Watch my latest video now, and
share it with your friends.

Whatever Happened to Antitrust?

Last week’s settlement between the Justice Department and five giant banks reveals the appalling...

#5. Reinvent EducationSenator Bernie Sanders is making waves...

#5. Reinvent Education

Senator Bernie Sanders is making waves with a big idea to reinvent education: Making public colleges and universities tuition-free.

I couldn’t agree more. Higher education isn’t just a personal investment. It’s a public good that pays off in a more competitive workforce and better-informed and engaged citizens. Every year, we spend nearly $100 billion on corporate welfare, and more than $500 billion on defense spending. Surely ensuring the next generation can compete in the global economy is at least as important as subsidies for big business and military adventures around the globe.

In fact, I think we can and must go further — not just making public higher education tuition-free, but reinventing education in America as we know it. (That’s the subject of this latest video in my partnership with MoveOn, “The Big Picture: Ten Ideas to Save the Economy.” Please take a moment to watch now.)

In the big picture, much of our education system — from the bells that ring to separate classes to memorization drills — was built to mirror the assembly lines that powered the American economy for the last century. As educators know, what we need today is a system of education that cultivates the critical thinking skills necessary for the economy of tomorrow.

We have to reinvent education because it’s not working for too many of our kids – who are either dropping out of high school because they aren’t engaged, or not getting the skills they need, or paying a fortune for college and ending up with crushing student debt.

How do we get there?

First, stop the wall-to-wall testing that’s destroying the love of teaching and learning. Let’s get back to a curriculum that builds curiosity, problem solving, teamwork and perseverance, and away from teaching to the test. Give teachers space to teach, and give students freedom to learn. Limit classrooms to 20 children so teachers can give students the individual attention they need.

Increase federal funding for education. The majority of U.S. public school students today live in poverty. That’s a staggering figure. Our schools and educators aren’t equipped to deal with this harsh reality but we know ways to change that. High-quality early childhood education, for starters. Community schools to serve the whole child, with health services, counselors, and after school activities.

Offer high school seniors the option of a year of technical education, followed by two years of free technical education at a community college. The route into the middle class shouldn’t always require a four-year college degree. America needs technicians who can install, service, repair, and upgrade complex equipment in offices, laboratories, hospitals, and factories.

And Senator Sanders has proposed, make public higher education free — from community college to state universities — completely free, as it was in many states in the 1950s and 1960s. Higher education isn’t just a personal investment. It’s a public good that pays off in a more competitive workforce and better-informed and engaged citizens.

And critically, we must increase pay and improve conditions for the men and women who power our schools—teachers and school staff who educate our kids, clean our classrooms, and keep our schools safe.

The law of supply and demand isn’t repealed at the schoolhouse door. We’re paying investment bankers hundreds of thousands if not millions of dollars a year to make money for Wall Street. We ought to be paying educators and staff a decent wage to develop and guide the nation’s human capital – an investment that would benefit everyone.

By reinventing education in these sensible ways, we all gain.

Ten Ideas to Save the Economy #5: How to Reinvent...

Ten Ideas to Save the Economy #5: How to Reinvent Education

Senator Bernie Sanders is making waves with a big idea to reinvent education: Making public colleges and universities tuition-free.

I couldn’t agree more. Higher education isn’t just a personal investment. It’s a public good that pays off in a more competitive workforce and better-informed and engaged citizens. Every year, we spend nearly $100 billion on corporate welfare, and more than $500 billion on defense spending. Surely ensuring the next generation can compete in the global economy is at least as important as subsidies for big business and military adventures around the globe.

In fact, I think we can and must go further — not just making public higher education tuition-free, but reinventing education in America as we know it. (That’s the subject of this latest video in my partnership with MoveOn, “The Big Picture: Ten Ideas to Save the Economy.” Please take a moment to watch now.)

In the big picture, much of our education system — from the bells that ring to separate classes to memorization drills — was built to mirror the assembly lines that powered the American economy for the last century. As educators know, what we need today is a system of education that cultivates the critical thinking skills necessary for the economy of tomorrow.

We have to reinvent education because it’s not working for too many of our kids – who are either dropping out of high school because they aren’t engaged, or not getting the skills they need, or paying a fortune for college and ending up with crushing student debt.

How do we get there?

First, stop the wall-to-wall testing that’s destroying the love of teaching and learning. Let’s get back to a curriculum that builds curiosity, problem solving, teamwork and perseverance, and away from teaching to the test. Give teachers space to teach, and give students freedom to learn. Limit classrooms to 20 children so teachers can give students the individual attention they need.

Increase federal funding for education. The majority of U.S. public school students today live in poverty. That’s a staggering figure. Our schools and educators aren’t equipped to deal with this harsh reality but we know ways to change that. High-quality early childhood education, for starters. Community schools to serve the whole child, with health services, counselors, and after school activities.

Offer high school seniors the option of a year of technical education, followed by two years of free technical education at a community college. The route into the middle class shouldn’t always require a four-year college degree. America needs technicians who can install, service, repair, and upgrade complex equipment in offices, laboratories, hospitals, and factories.

And Senator Sanders has proposed, make public higher education free — from community college to state universities — completely free, as it was in many states in the 1950s and 1960s. Higher education isn’t just a personal investment. It’s a public good that pays off in a more competitive workforce and better-informed and engaged citizens.

And critically, we must increase pay and improve conditions for the men and women who power our schools—teachers and school staff who educate our kids, clean our classrooms, and keep our schools safe.

The law of supply and demand isn’t repealed at the schoolhouse door. We’re paying investment bankers hundreds of thousands if not millions of dollars a year to make money for Wall Street. We ought to be paying educators and staff a decent wage to develop and guide the nation’s human capital – an investment that would benefit everyone.

By reinventing education in these sensible ways, we all gain.

#4. Bust Up Wall StreetWhen Americans think of how the...

#4. Bust Up Wall Street

When Americans think of how the economic rules are
stacked against them, they naturally think of Wall Street. 

When the Wall Street bubble burst in 2008 because of
excessive risk-taking, millions of working Americans lost their jobs, health
insurance, savings, and homes.

But The Street is back to many of its old tricks. And
its lobbyists are busily rolling back the Dodd-Frank
Act, intended to prevent another crash.

The biggest Wall Street banks are also much larger. In
1990, the five biggest banks had 10 percent of all of the nation’s banking
assets. Now, they have 44 percent – more than they had at the time of the 2008 crash.

They have a virtual lock on taking
companies public, play key roles pricing commodities, are involved in all major
U.S. mergers and acquisitions and many overseas, and responsible for most of
the trading in derivatives and other complex financial instruments.  

And
as they’ve gained dominance over the financial sector, they’ve
become more politically potent. They’re major sources of campaign funds for
both Republicans and Democrats.

Wall Street banks supply personnel for key
economic posts in Republican and Democratic administrations, and lucrative
employment to economic officials when they leave Washington.

It’s a vicious cycle. The bigger they get, the more likely
it is that government will bail them out if they get into trouble again. This,
in turn, confers on them an ever-larger competitive advantage over smaller,
community-minded banks that don’t have the implied guarantee – which gives the biggest banks
even more economic and political power.

What should be done?

First, resurrect the Glass-Steagall Act that used to
separate investment from commercial banking.

Second, put a small sales tax on every financial
transaction. This would discourage speculation and slow down the casino. Not
incidentally, such a tax could generate billions of dollars a year for, say,
better schools.

But the most important thing we should do is bust up the
big banks. Any bank that’s too big to fail is too big, period.

Antitrust law should be used the way it was against
the big oil trusts and the telephone monopoly. The idea was to prevent too much
economic and political power from concentrating in too few hands. And that’s
precisely the problem with Wall Street.

The only sure way to stop excessive risk-taking on Wall
Street so you don’t risk losing your job or your savings or your home, is to put
an end to the excessive economic and political power of Wall Street.

It’s time to bust up the big banks.

Ten Ideas to Save the Economy #4: Bust Up Wall StreetWhen...

Ten Ideas to Save the Economy #4: Bust Up Wall Street

When Americans think of how the economic rules are
stacked against them, they naturally think of Wall Street. 

When the Wall Street bubble burst in 2008 because of
excessive risk-taking, millions of working Americans lost their jobs, health
insurance, savings, and homes.

But The Street is back to many of its old tricks. And
its lobbyists are busily rolling back the Dodd-Frank
Act, intended to prevent another crash.

The biggest Wall Street banks are also much larger. In
1990, the five biggest banks had 10 percent of all of the nation’s banking
assets. Now, they have 44 percent – more than they had at the time of the 2008 crash.

They have a virtual lock on taking
companies public, play key roles pricing commodities, are involved in all major
U.S. mergers and acquisitions and many overseas, and responsible for most of
the trading in derivatives and other complex financial instruments.  

And
as they’ve gained dominance over the financial sector, they’ve
become more politically potent. They’re major sources of campaign funds for
both Republicans and Democrats.

Wall Street banks supply personnel for key
economic posts in Republican and Democratic administrations, and lucrative
employment to economic officials when they leave Washington.

It’s a vicious cycle. The bigger they get, the more likely
it is that government will bail them out if they get into trouble again. This,
in turn, confers on them an ever-larger competitive advantage over smaller,
community-minded banks that don’t have the implied guarantee – which gives the biggest banks
even more economic and political power.

What should be done?

First, resurrect the Glass-Steagall Act that used to
separate investment from commercial banking.

Second, put a small sales tax on every financial
transaction. This would discourage speculation and slow down the casino. Not
incidentally, such a tax could generate billions of dollars a year for, say,
better schools.

But the most important thing we should do is bust up the
big banks. Any bank that’s too big to fail is too big, period.

Antitrust law should be used the way it was against
the big oil trusts and the telephone monopoly. The idea was to prevent too much
economic and political power from concentrating in too few hands. And that’s
precisely the problem with Wall Street.

The only sure way to stop excessive risk-taking on Wall
Street so you don’t risk losing your job or your savings or your home, is to put
an end to the excessive economic and political power of Wall Street.

It’s time to bust up the big banks.

The Revolt of Small Business Republicans

Can it be that America’s small businesses are
finally waking up to the fact they’re being...

Ten Ideas to Save the Economy #3: Expand Social SecurityAmerica...

Ten Ideas to Save the Economy #3: Expand Social Security

America is on the cusp of a retirement crisis. Millions of Americans are already in danger of not being able to maintain their standard of living in retirement, and the problem is getting worse.

You hear a lot about how corporations are struggling to make good on their pension promises, and how Social Security won’t be there for you in retirement.

Baloney on both counts.

Corporations are awash in money, and they could afford to provide their hourly workers with pensions when they retire. Years ago, they routinely provided “defined benefit” pensions – a fixed amount every month after retirement.

Nowadays most workers are lucky if their company matches what they’re able to put away. The typical firm does no more than offer a 401-K plan that depends entirely on worker savings.

But many workers get such low pay during their working lives that they haven’t been able to save for retirement. 

At the same time, the cost of pharmaceuticals keeps rising, taking an ever-bigger bite out of retiree incomes.

That means Social Security is more important than ever. Today, two-thirds of seniors derive over half of their income from Social Security, and one-third of seniors rely on it for at least 90% of their income. Without it, the poverty rate of our seniors would be 45% instead of 10%. 

Social Security will be there for you in your retirement. The problem is it won’t pay you enough.

That’s why it’s important to expand Social Security – not cut Social Security benefits. 

How?

We can afford to increase Social Security benefits, as well as help ensure the solvency of Social Security, by eliminating the cap on income subject to Social Security taxes.

Unlike the Medicare payroll tax that everyone pays as a small portion of their total incomes, the Social Security payroll tax is capped. Any income over $118,500 this year is exempt from it. Which means a billionaire pays the same Social Security payroll tax as someone earning $118,500.

This isn’t fair and it’s not sensible. Billionaires and millionaires should pay just like everyone else. 

Scrap the cap, and not only is Social Security more secure for you and your kids, but it will be able to pay out even more benefits in your retirement.

America’s seniors, who paid in to Social Security over their lifetimes, deserve enough retirement income to live on.

If wealthy Americans pay their fair share, we can make sure tomorrow’s seniors get the Social Security they truly need.