Category Archives: wages

Obamacare Boosts Wages, Tennessee Proves

What’s that you say? It’s true, according to Dean Baker:

This is the “job loss” that has gotten opponents of the ACA so excited. But there is another aspect of this picture that should get other people excited. Back in intro economics we teach students about supply and demand. Other things equal, we expect a reduced supply – in this case of workers – to lead to a higher price or wage. In other words, a reduction in labor supply associated with the ACA might lead to some increase in wages.

We have an opportunity to test this proposition since Tennessee effectively did Obamacare in reverse, eliminating health insurance subsidies for low and moderate income adults without children in 2005. If the resulting change in labor supply has an impact on the market, then we would expect to see a drop in wages in Tennessee relative to other states.

That is in fact what we see. The figure below shows the median real wage for workers with high school degrees or less (the workers most likely to be affected) in Tennessee since 2000 compared to the workers without high school degrees elsewhere in the South.

btp-2014-02-20

Interesting idea. Also ironic that Tennessee kicked its low and moderate income folks in the teeth 9 years ago and saw a decline in wages as a result. It stands to reason that lifting up these folks will see a rise in wages. It’s sorta what people like Krugman have been saying since forever, but don’t expect the Republican’ts to start listening.

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Filed under healthcare, Obamacare, Tennessee, wages

Today In Cheap Labor

I’m sure all of Georgia’s pesky little labor problems would be solved if only they could bring back slavery:

ATLANTA — Georgia Gov. Nathan Deal offered a provocative solution Tuesday for farmers who claim workers have been scared away by a crackdown on illegal immigration: Hire people on probation to toil in the fields instead.

The Republican governor offered his remarks after an unscientific survey showed roughly 11,000 job openings in the state’s agricultural economy. He requested the survey after growers warned that a new Georgia law targeting illegal immigrants was scaring away workers needed to harvest labor-intensive crops like peaches and berries that are easily damaged by machines.

Wow! Nobody could have anticipated that demonizing immigrants would have any repercussions in the labor force! [/sarcasm] Thank goodness Convict Nation has a ready supply of strapping young bucks ready to harvest your berries and tomatoes on the cheap!

Because, despite Georgia’s nearly 10% unemployment rate, Georgia’s farmers just can’t find anyone to hire:

Farmers say they can find few U.S. citizens willing to work in hot, dusty fields and criticize a federal guest work program as expensive and cumbersome.

“It’s hard work,” said Sam Watson, the owner Chill C Farms in Moultrie, who wants more workers and is considering hiring probationers. “It’s hot. It’s a lot of bending, can be long hours.”

Oh yeah, sure, that’s it. That’s what keeps U.S. citizens from taking those jobs! The “hot, dusty fields” and all of that bending! This story makes zero mention of the wages migrant laborers are paid, which last I checked is around $5 a day. You find me an American citizen who can make ends meet on $5 a day, please. If you do find them, send ’em on down to Moultrie, Ga.

Meanwhile:

Watson said he could only hire two-thirds of the 60 workers he would have wanted to harvest squash, cucumbers and zucchini from his 300-acre farm. He blamed the state’s new law targeting illegal immigrants for driving away Hispanic workers. The lack of labor forced him to leave 13 acres of squash to rot in his fields.

“We’ve got to come up with something,” Watson said. “There’s no way we can continue if we don’t have a labor source to pull from.”

I’m sorry, Farmer Watson, but you’re an asshole. We are the wealthiest nation in the world, yet people go hungry every day. Yes, even in rural areas. And you’d rather let your squash rot in the fields? Haven’t you read in Leviticus about allowing the poor to glean from your fields? Or did you just read the part about teh gaii?

I wonder how many farm subsidies Farmer Watson got? Yes, mah tax dollahs! I guess you have to wear a tricorn hat to get away with complaining about this stuff.

I’m sorry, but this whole thing really pisses me off. Where are all the good Christians? Why does the AP write about this issue and overlook the obvious elephant in this story (and no, the elephant is not failed Republican policies, though that’s part of it)?

Look, it’s really simple. Georgia has 10% unemployment. People are pissed off and blame the brown people and pass racist laws. The brown people stay away, and no one is left to take their crappy, low-wage jobs that pay $5 a day. So the governor decides convict labor is the way to go.

Stop me if you’ve seen this movie before.

The obvious solution here is to raise your fucking wages, assholes! But no, we can’t do that, because then a Big Mac wouldn’t cost $3 and change, it would cost a helluva lot more. But we’re paying those costs anyway! We’re paying them in indirect ways, in high unemployment and high incarceration rates and poverty and malnutrition and everything else.

But let’s go on our merry way pretending we can have something for nothing, we can have the good life without paying for it, that our nation wasn’t built on cheap labor and exploiting the poor. Let’s pretend we don’t continue to have an exploitive economy so a few people can live the good life and wave the flag and talk about how great we are.

It’s the American way.

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Filed under food supply, poverty, rants, wages

>The Starve The Beast Agenda

>Today’s New York Times carries a front page story about the sacred cows state and local governments are slaughtering in the face of record budget shortfalls. Hawaii closed its public schools on 17 Fridays, Colorado Springs (which I wrote about here) turned off street lights and cut its police force, and an Atlanta suburb axed its public transit system. The Times piece looks at how these cuts have drastically impacted peoples’ lives, and it’s well worth a read.

And it’s with a heavy, heavy heart that I report Camden, N.J.’s awful decision to permanently shutter its libraries. Just another tough decision in a tough economic climate.

None of this is news to me; I wrote about this exact issue last fall when Michigan stopped safety inspections of it school buses and Tennessee dropped another 84,000 people from TennCare. Drastically cutting or even eliminating vital services is the new black, a hand governments are forced to play as the sluggish economy reduces tax revenues and citizens recite their “taxed enough already” mantra and say no to new taxes. Shit needs to be paid for, and this is the end result.

It occurs to me that this is conservatives’ “mission accomplished” moment. Grover Norquist, Newt Gingrich and the rest of the “small government” crowd must be high-fiving each other. They’ve achieved their fondest dream, with government shrinking so small it can’t even operate a public library, a public school, or public police force. I suppose they imagine private enterprise sailing in on a white horse to take care of these things for those who can afford it. I’m not sure what their plan is for everyone else; as we’ve seen from the past few years, they don’t seem to have one. Next stop New Deal, suckaz!

Here’s what I don’t get. While I understand why the “taxed enough already” message resonates–who likes paying taxes, right?–instead of demanding lower taxes, how come no one ever demands higher wages?

On Monday I linked to this Financial Times article on the American economy, which contained this telling information:

The slow economic strangulation of the Freemans and millions of other middle-class Americans started long before the Great Recession, which merely exacerbated the “personal recession” that ordinary Americans had been suffering for years. Dubbed “median wage stagnation” by economists, the annual incomes of the bottom 90 per cent of US families have been essentially flat since 1973 – having risen by only 10 per cent in real terms over the past 37 years. That means most Americans have been treading water for more than a generation. Over the same period the incomes of the top 1 per cent have tripled. In 1973, chief executives were on average paid 26 times the median income. Now the ­multiple is above 300.

The Economics Policy Institute looked at this “median wage stagnation” way back in 2007 and came up with this neat little chart:

Looking at our current economic woes I have just one question: whatever happened to “trickle down”?

I don’t understand why people are rallying in the streets to protest taxes, which are some of the lowest in recent history (at least income taxes are), but they aren’t saying a peep about the fact that they haven’t seen a raise in 13 years — well before our current economic woes began.

In fact, wages went down during the Bush “boom”, and few pundits or policymakers seemed to notice:

For working people, wages remain stagnant. In fact, median weekly wages, when adjusted for inflation, fell slightly for both high school and college graduates from 2000 to 2009, according to a recent analysis by the Economic Policy Institute, a Washington think tank. For high school graduates, median inflation-adjusted wages were $626 per week in 2009, compared with $629 in 2000, according to the EPI analysis. That comes to $32,552 in 2009, down from $32,708 in 2000.

For college graduates, weekly wages were $1,025 in 2009, compared with $1,030 in 2000, according to the study. Over the course of a year, that’s $53,300 in 2009, down from $53,560 in 2000.

The long period of wage stagnation predated the recession.

I remember us lefty bloggers mentioning before the 2004 election that a whole bunch of people weren’t seeing squat from the Glorious Bush Economy. We were all told to be patriotic and clap louder. Anyone who dared point out that things weren’t so great for everyone was called “part of the Blame America First crowd.”

I think it’s obvious that a main reason wages have stagnated is because organized labor has lost significant influence. When workers lose their voice in the debate, the results are predictable. What I don’t understand is why no one is really talking about this wage stagnation. We’re always told that we need to be “pro-business” but if that never trickles down to the worker bees, what’s the point?

Furthermore, last week we had another Fauxtroversy about President Obama being “anti-business” yet even that isn’t true:

[…] according to the St. Louis Federal Reserve, corporate profits hit $1.37 trillion in the first quarter—an all-time high. Businesses are sitting on about $2 trillion in cash reserves. Business spending jumped 20 percent last quarter, and is up by 13 percent against 2009. The Obama administration has dropped taxes for small businesses and big ones alike. Maybe the president could be anti-me for a while. I could use the money.

Heh. You and me both, buddy.

I now completely understand why the Republicans have held fast in obstructing every effort to save the economy. Under Bush they wrecked the economy, and now they aim to prolong the misery. This scores a political win by preventing Democrats from being effective, and achieves the ultimate goal of starving state and local governments of revenue, forcing deep cuts to vital services–cuts they hope will be permanent. It’s small government all the way and they won’t stop until they completely unravel the New Deal. “Mission accomplished,” indeed.

Making taxes the economic bogeyman of the American people has been wonderfully effective, and it’s a shame liberals and organized labor haven’t seized this opportunity to raise the wage issue. I guess they tried, especially during the minimum wage debate, but it never seemed to hit the national radar. I wonder why that is?

I wonder if people will ever wake up and ask the other question: “I don’t want to pay more, but why can’t I have more? Why do my wages never go up, even though my company’s profits always do?” How come that’s not part of the national debate?

Some people may agree with the Starve The Beast Agenda but they will soon learn that it was never imagined with the “small people” in mind. It was imagined for the Big Boys, the plutocrats, the “elites” they always accuse liberals of being every election. No one should be surprised when they are being told thank you for playing, now go away; for 20 years we’ve been sold this Libertarian bullshit line about letting business have its way and everything will be capitalist lollipops and free market unicorns. But it hasn’t worked out that way. We’re earning the same or even less than our parents did.

This isn’t how you get ahead in the world, it’s how you wreck a nation.

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Filed under economy, taxes, wages