I am no labor expert but all the things I know much more about —and usually write about—from climate change to transportation and architecture—were held hostage in this election to voters who wanted a dramatic change in their economic prospects—i.e., a raise in wages to be orchestrated by the self-anointed business genius (but serial bankrupt) Trump.
The rage at Trump and his actions is enormously heartening and powerful to a point. The energy is too scattered and inchoate now. It’s time to focus on some key issues so that the true dimension of the Trump travesty is revealed. Alternatives that would actually make a positive difference in peoples’s lives must get aired. Then people who would implement them would have a shot at getting elected. Hence my inexpert foray into wage stagnation: to raise issues that desperately needs more attention.
Yes, we have nearly full employment—and those who tout the rosy numbers have got to stop ignoring the fact that most of the new jobs pay poorly and come with meager benefits.
Robot loving Puzder
The new President promised to change all that. Shouldn’t it have been job one, day one? Instead, the days of rage and chaos since the inauguration have brought Muslim bans, Twitter screeds, promised gifts to the wealthiest, and the beginning of Obamacare rollback. The American worker was offered Andrew Puzder, Trump’s nominee for Dept. of Labor.
Trump sticks a thumb in our eyes with Puzder, who is brazenly anti-labor. He is vocally hostile to raising the minimum wage. He doesn’t like mandated sick leave. He’s against raising the pay threshold at which salaried staff would have to be paid for overtime work. He’s anti-union. He’s spoken of replacing workers with robots.
Do nothing congress
In what way will he help the American worker get a raise? He says by reducing taxes and regulations, the hoary Republican mantra that’s inevitably vague and yet to pay off. Congress has been run by Republicans for years, so why haven’t they produced gains for workers? Their interest in cutting regulations benefits the investor class not the working class. Most prominent is the promised end of the Dodd Frank legislation intended to prevent a repeat of Wall Street’s Ponzi-like lending schemes. The epic irresponsibility of financial firms led to the economic meltdown of 2008 that has left millions still stranded with lost homes, underwater mortgages, no jobs or crap jobs. A considerable number of Trump voters came from the crash’s victims; Trump has filled his cabinet from the world of the perps.
Fast food bottom feeder
Puzder heads CKE, parent company of the Hardee’s and Carl’s Jr. fast-food chains, which make no “best places to work” list and in fact have attracted Labor Dept. scrutiny with violations found at 60 percent of stores investigated, according to Forbes. Puzder’s stores start people at minimum wage, while most chains pay well over $8 an hour. Unlike CKE, some chains like Starbucks, Chipotle and Arby’s augment better pay with health care plans for part-timers, some college-tuition assistance, and 401k retirement plans. Glassdoor, the employee survey site, gives Hardee’s a crummy 3.2 approval rate, and Carl’s a dismal 2.9. Puzder gets a middling grade as a CEO. Starbucks rates 3.8 and workers give CEO Howard Schultz a 90 percent approval rating.
Ending middle income stagnation
Lots of those Trump voters don’t care about the minimum wage or fast food because they don’t work in those places and they make more. But wage stagnation is especially apparent at the $40,000 to $60,000 range—which is around median income but the bottom of a middle-class lifestyle in most of America. Unfortunately that pay range represents a ceiling for many rather than a stepping stone to higher incomes. What would it take for people—especially at middle incomes and lower—to get consistent raises, and an opportunity to advance?
A higher minimum wage is essential, of course, but it is unclear how much of a ripple effect it has. Raising the wage threshold subject to overtime, as Obama did (and Trump may undo) would largely benefit middle-income earners. Encouraging unions will certainly raise wages, but that’s anathema to Trump and the current Congress. Republicans have waged war on unions, largely successfully, and wages have only stagnated for non-union workers. We must demand that Republicans stop blabbing vagaries and show specifically how they will achieve broad income growth.
Beware the prophets of apocalypse
Of course, should pay somehow rise across the board, the inflation hawks (mainly on the right) will come out of the woodwork to predict economic apocalypse, as they have been doing for years, even as both inflation and disaster have failed to develop. Watch even a modest rise in today’s extremely low inflation rate be used as a club to keep wages down.
Aside from wages, the President and Congress could do much to ease burdens on working people. Make child care more available and less expensive. Make it easier to pay for college. (Tuition hikes are driving too many kids of low-earning families out of college because they can’t make tuition and fear overwhelming debt burdens. This not only hurts individuals, it’s bad for an economy that does not have enough good professional talent.) Make retirement portable, especially for the growing ranks of contract workers. We need health care that’s essentially universal (as the Affordable Care Act is) and affordable (which it still isn’t). Republicans have had years to come up with an ACA alternative, and still haven’t done it. Their act is wearing thin.
Homeownership for wage earners, not scavenging investors
No one’s been talking about housing and homeownership, which used to help middle-income people increase wealth. Ownership is out of reach for many middle and lower-income earners thanks to restrictive loan standards put in place after the crash. (The homeownership rate continues to decline; it’s now near 1960s levels.) If you don’t have perfect credit and a large down payment, you can’t get in the housing game. Low interest rates that should have helped ordinary people have instead underwritten investors who snatched up foreclosed homes and rent them at high rates to the displaced. Tax and interest policies favor exploitative flippers over those who just want to own the roof over their heads.
Debt is a disaster for most people of modest means, which also has barely been discussed. People need debt to move up—to buy a job-ready wardrobe, or a car, or to start a business. Credit-card interest rates and auto-loan rates should be capped (as they once were). When people with modest means overpay for debt, they lose ground, and some lose everything. We need to replace payday loans with an institutionalized way for low earners to get short-term credit. Subprime home loans, which destroyed the wealth of millions—should be outlawed. America’s middle class rose after WWII on cheap mortgages and cheap credit. Now people face enormous burdens scrambling from poverty into the middle class and staying there.
Put income growth front and center
Democrats have promoted many of the ideas discussed here, but they need now to pull these and other wealth-building ideas into a comprehensive income-growth narrative, bring it to Congress, and sell it hard—since Republicans and Trump seem destined to offer nada.
Only when the real issues come to center stage is there hope to invigorate America’s economy by lifting all boats. Then we can move onto the other horrors Trump and his cronies will foist upon us.