The macro question of how Brexit will affect the national and international economy has no certain answer. But even if on the aggregate nothing changes, there are thousands of individual stories of tumult, not business as usual.
I finally wrote a full post on this tension I’ve had since September 2014 when I gave a guest sermon. This is based on “Not my father’s religion”, published in 2007. The contradictions in what UUs promise to do in the world and the distance they’re willing to do the radical things required is difficult. As an impatient young UU this bothers me- lots of people who were 60s radicals but have now settled down and ditched the needed politics.
Here it goes.
May 28, 2015
“Nothing in the middle of the road but yellow lines (and dead armadillos)”
This is not a lovely, soft sermon like many here. They are beautiful, but certain issues require a hardened tone. Do know that this is in the vein of Frederick Douglass, the greatest black orator in American history, when he told a group of Unitarian abolitionists, the UUs of their day, that he loved them all but would give them Hell for these twenty minutes.
The issue starts as the central point of “Not my father’s religion” by Reverend Doug Muder, from UU World. In it, he explains why his working-class factory worker father goes to a conservative Lutheran church, and not the one he preaches at. The article, which a masterwork of cutting through assumptions and stereotypes, comes to the conclusion that UUs have very few working-class members, and their beliefs contribute to that.
From an upper middle-class professional core, members don’t see the insecurity and danger in the world that regular laborers do, and often spend more time talking about the homeless than the near-homeless. There is always a danger of hidden elitism- when we use the term “flipping burgers” we often devalue that working at a Wendy’s is hard, unrewarding toil.
This taps into what I’d like to talk about, something that guided a 2014 guest sermon I gave called “And Society at Large”, which was about that Principle Five of the Seven Principles we cherish calls for democracy in all of society, including economic democracy. For the purposes of the sermon and the fact that “economic democracy” is a wide-ranging term, I didn’t use words like “socialism”. But the message that many got was clear- the church needs to live up to its radical talk. This is a church that, bluntly, is the radical children of the 1960s teaching a much more watered-down set of values to their own kids.
One person who sat up after the speech to make an announcement irritated me. Two things were annoying- first, she was making a regular political announcement (though I know the contradiction given my sermon) in the church sanctuary that is normally done outside. And secondly, she credited me as the inspiration to talk about how she needs everyone to go to the Democratic Party offices to work on the elections.
The biggest blow was not that I think the Democratic Party is a dead-end for the radical and religious, though I do. It’s that she took my leftist message and turned it into the kind of milquetoast liberalism that gives the Party its nickname- the graveyard of social movements. It’s the repeated appropriation- of gay liberation, of black resistance, of the mass left-wing movements that defined the twentieth century in many places, including the United States. These groups become cogs in a party machine and lose their independence. The black American experience we are seeing with police violence is clear- some leaders have long since joined the party apparatus, and thus their criticisms have evident limits. The young insurgents that I admire so much have sometimes booed Al Sharpton off the stage, because they’re too smart to be sold on a plan that doesn’t work. Smaller groups cannot influence large machines in the way that big money and white voter issues do.
The organization I am a part of rejects the two parties and sees that the only way to gain economic democracy, egalitarian society, and all these things that by the Seven Principles we are morally obliged to strive for- is to build a working class alternative that lacks the compromises that define the two big parties. And I felt our 2013 campaign in Seattle was an example of what many UUs may one day see as necessary- a challenge to liberal Democratic politics that are too tied to businesses and interest groups to achieve change.
Running under the then-insane demand of a $15 an hour minimum wage, our candidate Kshama Sawant- an immigrant woman of color, organizer, and professor- beat him out by the slimmest of margins, winning almost 94,000 votes.
And what happens with that radical alternative. The $15 an hour wage became a reality in Seattle, and now spread to San Francisco and Los Angeles, coming soon in Chicago and Minneapolis, New York and Berkeley. A ordinance was passed to stop landlords from raising rents by more than 400% (!) to keep gentrification at bay. Homeless encampments are allowed to stay rather than broken up by police every week or so. And the new budget is the most progressive in the country, including record funding for homeless LGBT youth and looking to invest in mass transit. Currently the struggle in Seattle is over a large oil rig headed to drill in the Arctic- given the chance by the Obama administration- where hundreds of indigenous people and environmentalists block the way out with their kayaks and banners.
In essence, the UUs need to change their principles or change their tactics. Many UUs will support the Democratic candidate, and I understand that. But without our own political power we will never win the victories that match our moral expectations. Indeed, when Democratic clubs all over Seattle held their 2015 endorsement meetings, they all came back with an endorsement in our district of “none of the above”- since our non-Democratic candidate cannot be directly endorsed. There is a split available more than ever in recent time between the establishment and the activists.
Unitarian Universalism would benefit from class diversity, just like it would from racial diversity, and more immigrants, and other things we discuss all the time. But class diversity is not going to be gained by tabling outside union halls and pawn shops. Our ideas are great but their expression is biased in favor of the well-educated, and those in communities that are not in crisis. I don’t see how a black janitor in a community where young men are being shot in the back will find our progressive ideals right for him, because they’re never communicated in the way he might see things.
As the new generation, I understand that I will be on the radical fringe until I settle down, have kids, and pay dumb taxes. But since what the UU needs are people who might see my worldview as better aligned with theirs, I can’t just be flatly ignored.
We can do this. Let’s be the radical kooks that our ancestors were when they said that slavery was an abomination and rose up as whole towns to chase slave catchers out of the North. They were one moderate reformers, but they saw the Light that radical solutions were needed to serious problems. Abolition stopped being symbolic the moment it became extralegal.
From Chris Rhomberg, sociology professor at Fordham University, is this editorial “We Forgot to End Poverty“. In the season of Toys for Tots, soup kitchens, and in-the-spirit-of-Christmas altruism, it’s important to figure out why the United States still has tens of millions of its people living in poverty. As he writes:
Both sides attempt to “reform” poor parents to push them into the low-wage labor market, but neither side questions the failure of that market to provide families a secure way out of poverty.
Even as unemployment edges downward, millions of Americans remain poor, exposing a basic flaw in the TANF approach: the lack of jobs that pay a living wage.
It comes down to this: there are two ways that welfare ceases to exist. Either poverty is eradicated and people no longer need state assistance, or welfare is gutted or transformed without dealing with structural problems in labor and education. The United States with the bipartisan welfare reform bills in the mid-1990s, assistance was capped and shortened, continuing to shrink in its scope and amount in the past two decades. This would make sense if welfare reform was getting rid of poverty, but it hasn’t. Escaping poverty requires jobs that don’t exist and wages that are not offered- plenty of people in poverty work full-time.
So policy needs to keep in sight the major social problem. If the goal is to reduce welfare, make it cheaper and more efficient, you can do that. But that requires a narrow view that ignores why welfare exists in the first place. Never lose sight of the core problem. Welfare is the symptom of an underlying illness. To erase welfare does not cure anything, merely remove a way that we are reminded of poverty’s extent and persistence.
In a few hours I’ll join in a series of protests, for December 4th will be the latest set of strikes by fast food workers. In around 150 cities at least some workers will walk off the job, joined with the low-wage workers in major international airports. The past 18 months has seen a dramatic change in the national discussion on wages. $15 an hour was viewed as a pipe dream. Yet with the election of Kshama Sawant in Seattle, running with $15 as her central policy goal, and an overwhelming majority of San Francisco voters voting in favor last month, things have changed. The debate in Washington about small, incremental increases that may not even keep pace with inflation has been overshadowed by the idea of radically higher wages that lift hundreds of thousands of people out of poverty.
These strikes will have the same conservative criticism, in particular that these companies cannot absorb higher prices, and your favorite items will see a sharp price increase.
I’ll break this down into the simplest form I know. Higher wages will increase item prices, but in a given industry that will hold true across the board. A hamburger costs an extra dollar, but all restaurants will face the same reality. This isn’t an issue for bottom-rung workers because they have more money to spend, and in fact their wages will usually increase by more than the prices do. Workers in Seattle will be going from about $9 to $15 plus inflation. Prices are not going up by two-thirds.
But won’t people just above the minimum wage have problems? No, because one of the fundamentals of the labor hierarchy is that wage hikes at the bottom echo throughout the system (PDF). If $10/hr workers go to $15, $14/hr workers in different jobs will go to $19, or something similar. Wage increases for the working poor are good for everyone.
The most crucial thing I want to get across is that we all pay for the current wage levels in fast food restaurants. Fast food workers received about $7 billion in government assistance because their wages fall below what is needed to survive. All taxpaying people in the United States subsidize these low wage policies. Unlike paying more for a burger after a higher wage law passes, this cost is not optional. We can choose not to eat at McDonalds (and really, why would you?) , but taxes are compulsory.
Almost all situations like this boil down to this: the economy is complicated. Groups like Heritage want to scare the public with the specter of high prices, but that ignores positive effects from higher wages, and current costs that we pay for low wages.
Finally, I want to speak out about the civil war among labor in this country. Many people look down at fast food workers. I understand that. But what happens to them will affect you- especially those in the lower echelons of the labor hierarchy. Strikes are inconvenient (oh lord, the BART transit strike in the Bay Area got tech workers into a frenzy), but there will never be an empowered working class unless the bottom has strength.
I’m late to the party with Thomas Piketty’s Capital in the Twenty-First Century. What can I say, I don’t read that quickly. The work is formidable in length and impressive in its breadth of research. If nothing else, every page is a shining example of social science that puts data first and doesn’t draw any broad, satisfying, unsubstantiated conclusions.
Since the English publication was released in April, Piketty has become a sort of academic rock star- it seems every publication I follow on Facebook has devoted at least a few stories to his conclusions, and the impact his analysis of inequality. It’s reached the point that some are just marveling at the media attention, in some sort of feedback loop that you often see with faux media controversies on an increasingly information-starved CNN.
There is a clear division between Piketty the social scientist and Piketty the public policy advocate. The conclusion establishes that these two selves should be linked- pure critique isn’t enough. If the research supports a conclusion, it should be advocated with conviction. His devotion to social science research methods is admirable; as a sociology student his example is a good one to follow. Waves have been made regarding his data and graphs, but even critics have dismissed potential errors as insubstantial. His decades of work on inequality shine. In 2013 I took a semester of economic history, focusing on the United States. From that, I have seen how the topic can be written in a dreadfully murky and technical manner. Piketty writes with confident clarity, and his use of French and British novels to illustrate the pre-industrial political economy is a welcome break from data-driven analysis.
That last quarter is the issue though. Some points Piketty makes are beyond dispute. Absolutely, countries need to share banking data to keep the rich from hiding their assets. But the global tax on capital raises the question: is that a systemic solution? His view of the 20th century is that the world wars radically changed the views on government and led to a more rigorous tax system. That’s self-evident. Yet much has been undone, in the United States the shift has been obvious. Taxing the rich by a few extra percent has paralyzed the federal government for most of Obama’s presidency, and those attempted increases are less than half of what it was in the 1940s and 50s.
Yes, a global tax on capital would solve serious economic issues. It could dig developed countries out of a ludicrous and unnecessary sovereign debt crisis, and reassert the social state that has done amazing things for hundreds of millions of people. But what’s to stop it from being undone by international conglomerates, especially in a system of otherwise free trade? And can the masses be mobilized once again for the same kind of solution?
Richard Wolff, a Marxist economist I mention from time to time, has a strong leftist critique of Capital in the Twenty-First Century. His monthly economics lecture in New York is available on YouTube, and he devotes quite a bit of time on Piketty (here’s the video, marked where he begins to talk about the book). Perhaps taxation and regulation are not the ultimate solution. The issue with modern capitalism isn’t its 21st century flavor of widespread inequality, the issue is with capitalism, period. Without a change in the class system today, inequalities of capital will always exist, and likely get worse immediately after policies are enacted to address that. A serious omission is the mass movement needed to get such changes implemented- without such discussion, the global tax on capital and movements against tax havens are simply commonsense, good ideas. They are not achievable ones simply by making sense.
Wolff joins other critiques (Jacobin did at least a half dozen pieces over the past two months) in pointing out a key issue, namely the power of the elite to block or roll back legislation that reduces their wealth and influence. Piketty points out that a robust democracy is needed, but ignores the many roadblocks that exist in the modern world. And even if democracy can elect a better government, it still needs to avoid the corrosive influence of money, and its own newfound power. As Bakunin said, “men do not make positions,;positions . . . make men.” To create change, the political system needs to go through a radical change, alongside capitalism. The huge success of what Thomas Piketty has to say indicates that people understand things are profoundly broken, but may be hesitant to speak of a deeper cause than modern policy changes.
Whatever your takeaway from the Occupy movement was (and is), the enduring legacy goes beyond the branding of 1% vs. 99%. It got people, many with no prior background in activism, talking about capitalism. Outside of universities, real discussions about capitalism are rare in the United States. I was born into a capitalist system, but that doesn’t mean it’s above critique. We emerge from old traditions constantly, casting aside religious and social customs constantly. If developed countries can ditch organized religion, they can ditch capitalism too. In the times of Roman Catholic supremacy, the idea that religion was an option, and not an obligation, merited execution. Now that view is accepted and even normal in some regions.
All and all, I am glad I overcame my slow reading and finished the book. One of his conclusion at the very end is dead on, that economics needs to realize it has more in common with sociology and political science than physics and mathematics. That being said, I think the leftist critique is valuable. Not to say everything I’ve read from that angle is correct, but that it puts the impetus on Piketty and his supporters to flesh out the policy side of the research. How does democracy save us, and what forms will it need to take? On what ground do the working and middle classes fight the elite for control of economic policy? Can these policy ideas form a systemic solution to inequality?
I don’t know the answers, and Piketty isn’t so sure either. That’s okay, and he often does state his research and conclusions have clear limits. But for his ideas to be picked up and carried to fruition through toil and struggle, they need to work in the long-term. There are a finite number of difficult paths regular people can go in order to create change. Money is scarce, so is time and will. To see inequality spike back up a few decades down the road would be devastating. And if the 99% gives up hope, the world is truly lost.
That’s a tough relationship to investigate, but it does relate to issue that people with mental illness can have- a much lower tolerance for stress and loss. Losing a job is hard for everyone, but it can trigger a serious episode for someone living day-to-day with schizophrenia or bipolar disorder. Even two years of constant stability have not created any kind of illusion. I am still walking on eggshells. A very stressful set of situations, a few days without access to medication, these things can be the difference between being in recovery and being in crisis.
This piece also brings up another component of mental illness- economic hardship impedes growth and recovery. It’s not just those that work losing their job. Millions living with a diagnosis are on disability or otherwise living on a fixed income. The squeeze is bringing plenty of people to the brink, but mental illness just adds a whole set of other complications.
Every stressor that exists has its own extra, sinister side. And in an America that’s in year eight of a recession with no broad recovery for the most vulnerable, the stressors are many, multiplying, and always just a few wrong turns away.
A collection of important visualizations of poverty have been posted up at One.org. All of them have something to say, but I thought I’d share the one I think is the most important.
I was reminded of an article about access to electricity in the developing world. I couldn’t find that one, but there is a more recent feature was written by the CEO of the website that posted these visuals up.
In developing countries, when you lose electricity, it’s usually temporary. And even if your power is out for the afternoon, you’re surrounded by businesses and infrastructure that’s running 24/7. To live in the dark – not just in your own home, but whole communities – is something that the developing world knows all too well. Former colonies, abandoned by imperial powers and left to rot, are left in the dark in other, less literal ways. Little or no access to the internet. Lack of literacy and libraries. Terrible transit infrastructure. Crippling poverty that makes almost all types of goods out of reach.
There are a thousand ways to demonstrate inequality. It depends on what you are contrasting. Some inequalities only hit home when you got beyond domestic, and look at a global scale. This isn’t about people in different tax brackets, it’s the realization that billions of people have lights and billions do not.
There is a war going on in the Pacific Northwest. It has garnered some national attention, and cities across the country will be influenced by the result. Which side wins, and whether they get most of what they initially wanted, will ripple across the nation.
Seattle is debating a $15 minimum wage.
This is an extraordinary fight, because it was linked to an extraordinary campaign. Kshama Sawant, a member of Socialist Alternative, defeated a sixteen-year Democratic incumbent to win a seat on the Seattle City Council. I’ve written about Sawant several times (here was my pitch prior to the election), and her success is one of the biggest events in the American left since the McGovern campaign. The whole campaign was tightly bound around a single campaign promise- a $15/hr minimum wage.
Her victory, against the grain of traditional Seattle politics, indicated that popular sentiment was on the side of her campaign and the organization she helped found, 15 Now. Seattle is joined by San Francisco in pushing for a ballot initiative. The engine is Seattle though, with over a year of constant campaigning. Pressure has given the proposal wide political acceptance, even among business-friendly Democrats.
The argument is straightforward. Since the end of World War II-era price controls, worker productivity has increased substantially, but since the Nixon Administration is no longer matched by increases in wages. This era has also been one of sharply rising costs- education, healthcare, rent. I’ve drawn a grasp with permanent markers to give you the result. No, seriously:
The minimum wage isn’t tied to inflation, so it buys far less than in decades past. Increasingly, those that make minimum wage (or close to it) no longer have a living wage. They can’t afford to raise their kids, or live anywhere near where they work. Thus they rely on two things- credit and welfare. There are plenty of people working crazy hours yet still in the economic strata to require welfare to make basic ends meet. Without a strong wage, the taxpayers are footing the bill for underpaid workers.
There are two broad concerns at play in Seattle. The first is about the minimum wage as a whole- that it kills business, competitively, leads to unemployment. I tackled these broad issues last August here. I found there to be a lack of solid evidence that the minimum wage is a great harm to society- people often say that it is, but they’re relying on the standard (typically called ‘neoclassical’) model, which actually isn’t that accurate. We’ll return to that thought.
The second are the specifics of the wage increase. Basically, who has to increase to $15 and by when? Originally the idea was an increase from all businesses immediately. The version that’s being filed and will probably get voted on soon has a three-year lead-in for small businesses and nonprofits. $11, then $13, then $15.
In terms of a debate, the place I’ve found with the most content dedicated to the issue is The Stranger, Seattle’s sweary alternative newspaper. They strongly endorsed Sawant (dedicating an issue to making a case for her), but they’ve been releasing editorials in pairs- one advocating for an exception, one against. Currently, four pieces on the minimum wage are in the “most commented” section on the front page.
This is a bitter fight. Big businesses (especially those for which most of their staff make under $15) are fighting tooth and nail- and sometimes use small businesses as a front to advance their own interests. There is clear evidence in leaked documents. This is nothing new, but it’s important to pay attention.
While not anything close to an expert, I’ve taken enough college economics to have a decent grasp of minimum wage mechanics, as one of the basic aspects of the labor market. There has been quite a lot of misleading statements- and one would assume that if San Francisco and Seattle ultimately succeed, they will pop up again and again as the fight moves to other areas.
A number thrown out in the debate is 60%- the increase from the current state minimum wage of $9.19 to $15. Often the proposal is said to be a “60% increase in labor costs.” That’s not even close to true. What’s important to know is that essentially no business pays every worker minimum wage. If they did, it’d be 60%, but if people are making $10.50 or $12.75, it’s a lot less than that. Also there are plenty of workers who make over $15 in a given enterprise who won’t see any increase- at least directly.
Another issue is distorting costs. While labor costs are important, they sit alongside the cost of land, rent, licenses, legal and financial assistance, and of course whatever a business sells. The best read of The Stranger editorials is this one by bar owner Andrew Friedman. He got an overwhelming pushback by commenters, including several who work for a small business. As an accountant stated, if their firm raised all employees to $15 it would be a 4.33% increase in costs. There’s a big difference between 60% and 4.33%. While all cost hikes will affect total costs, labor is not all of a businesses’ costs.
A proposal has been made to include “total compensation”. A series of essays go back and forth starting here. What’s wrong with $15/hr total compensation? Well, a few things. It allows the employer to include (and overvalue) other non-wage benefits. Given the rapid rise in health care costs, this could easily eat into the actual wage earned until there is no rise at all. And it gives employers a great amount of power- they figure out the costs, they determine what total compensation is. You can’t make a good argument for wage theft because the wage has no solid meaning anymore. It’s just part of the total compensation soup.
The reality is simple. Large corporations, that employ a huge amount of minimum wage workers, are skating thanks to government subsidy of their business (sweetheart tax deals, plus tax loopholes) and government subsidy of their workers. The end result is incredible US corporate profits. A move towards a $15/hr minimum wage is recognizing that there is no disaster for American corporations if labor starts closing the gap between what it produces and what it is ultimately paid. It’ll throw a wrench into the economic idea that profits must constantly rise and increase- the system where shareholder concerns are much more pressing than labor concerns. But that sort of escalating system also causes destructive market bubbles, so maybe it needs a wake-up call.
I’m tired of people making hackneyed economic arguments that don’t have a solid foundation beneath them. The dangers of a high minimum wage are a meme, perhaps exacerbated by the fact that most introductory economics courses are strongly slanted to that conclusion. As I pointed out in a rebuke of Alex Berezow’s ill-suited attack on Sawant, many journalists and pundits don’t cite anything more complicated than N. Gregory Mankiw- often just leaving it at ‘common sense’.
Serious discussion is due for the minimum wage. Each month brings new depressing confirmations- income inequality is soaring, it’s reversing decades of gains by the middle class, people are getting wrecked by increased costs and don’t have the money to save, invest, and eventually retire. When a movement emerges that actually offers a potential solution, efforts must be made to understand it from their perspective. US journalism tends to start from the perspective of how a new policy will affect corporations.
Perhaps they should think of how the lack of a new policy current affects workers and families.
Democracy is a word of immense prestige and power. In the modern context it shapes the actions of even the most hardened autocrats. The Nazis held elections, as did the Soviets, and as do the North Koreans. Even those with complete contempt for popular rule see the rituals of democracy as important and helpful.
However, democracy presently has a very narrow scope in many countries. Voting every year or two is the tiny tip of a much large apparatus, most of which is controlled by individuals or powerful groups. Think about the things that depend on your regular vote. Then think of all the things that you do not influence in any way.
Political democracy seems absurd without economic democracy. Professor Richard Wolff in recent years has pushed for workers’ self-directed enterprises, stating the obvious fact that people spend more time at work than any other aspect of their lives. Voting for a senator is all well and good, but the most relevant decisions in people’s lives are made by bosses and executives.
So the goal should be for greater worker influence- going beyond collective bargaining and into collective management. Even well-organized sectors are being attacked by employers- with threats to move to another country, to lay off vast numbers of people. People’s jobs should not be used as a weapon in an economic war. The workers have a vested interest in successful business, and successful in their own communities.
A vast majority of people feel alienated because of the breadth and scale of manipulation and control that powerful people and groups have. It makes even the political rights that exist now feel meaningless, as politics is in a sea of rich people’s money. The more aspects of life where the common person’s voice is important and matters, the better. And the workplace is where the greatest change will come from.
So the day after my article criticizing Alex Berezow’s shallow, smug opinion piece against a woman with far more expertise on economics than he has, the Kshama Sawant campaign has issued their own rebuttal. It is similar but more a rallying point than my own beef with Berezow’s overly simplified view of economics, and his contempt for academia.