Robert Reich: The Trump Economy Is Doomed from the Start

Robert Reich

Robert Reich Former U.S. Secretary of Labor, Professor at Berkeley

How to build the economy? Not through trickle-down economics. Tax cuts to the rich and big corporations don’t lead to more investment and jobs. 

The only real way to build the economy is through “rise-up” economics: Investments in our people – their education and skills, their health, and the roads and bridges and public transportation that connects them.

Trickle-down doesn’t work because money is global. Corporations and the rich whose taxes are cut invest the extra money wherever around the world they can get the highest return. 

Rise-up economics works because American workers are the only resources uniquely American. Their productivity is the key to our future standard of living. And that productivity depends on their education, health, and infrastructure.
Just look at the evidence. 

Research shows that public investments grow the economy.

A recent study by the Washington Center for Equitable Growth found, for example, that every dollar invested in universal pre-kindergarten delivers $8.90 in benefits to society in the form of more productive adults. 

Similarly, healthier children become more productive adults. Children who became eligible for Medicaid due to expansions in the 1980s and 1990s were more likely to attend college than similar children who did not become eligible. 

Investments in infrastructure – highways, bridges, and public transportation – also grow the economy. It’s been estimated that every $1 invested in infrastructure generates at least $1.60 in benefits to society. Some research puts the return much higher.

In the three decades following World War II, we made huge investments in education, health, and infrastructure. The result was rising median incomes. 

Since then, public investments have lagged, and median incomes have stagnated. 

Meanwhile, Ronald Reagan and George W. Bush’s tax cuts on the top didn’t raise incomes, and neither will Donald Trump’s.  

Trickle-down economics is a hoax. But it’s a convenient hoax designed to enrich the moneyed interests. Rise-up economics is the real deal. But we must fight for it. 

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Reposted from Alter Net

Robert Reich served as the nation’s 22nd Secretary of Labor and now is a professor of public policy at the University of California at Berkeley. His latest book, Aftershock: The Next Economy and America’s Future, is now in bookstores. His earlier book, “Supercapitalism,” is out in paperback. For copies of his articles, books, and public radio commentaries, go to www.RobertReich.org.

Posted In: Allied Approaches

Union Matters

Federal Minimum Wage Reaches Disappointing Milestone

By Kathleen Mackey
USW Intern

A disgraceful milestone occurred last Sunday, June 16.

That date officially marked the longest period that the United States has gone without increasing federal the minimum wage.

That means Congress has denied raises for a decade to 1.8 million American workers, that is, those workers who earn $7.25 an hour or less. These 1.8 million Americans have watched in frustration as Congress not only denied them wages increases, but used their tax dollars to raise Congressional pay. They continued to watch in disappointment as the Trump administration failed to keep its promise that the 2017 tax cut law would increase every worker’s pay by $4,000 per year.

More than 12 years ago, in May 2007, Congress passed legislation to raise the minimum wage to $7.25 per hour. It took effect two years later. Congress has failed to act since then, so it has, in effect, now imposed a decade-long wage freeze on the nation’s lowest income workers.

To combat this unjust situation, minimum wage workers could rally and call their lawmakers to demand action, but they’re typically working more than one job just to get by, so few have the energy or patience.

The Economic Policy Institute points out in a recent report on the federal minimum wage that as the cost of living rose over the past 10 years, Congress’ inaction cut the take-home pay of working families.  

At the current dismal rate, full-time workers receiving minimum wage earn $15,080 a year. It was virtually impossible to scrape by on $15,080 a decade ago, let alone support a family. But with the cost of living having risen 18% over that time, the situation now is far worse for the working poor. The current federal minimum wage is not a living wage. And no full-time worker should live in poverty.

While ignoring the needs of low-income workers, members of Congress, who taxpayers pay at least $174,000 a year, are scheduled to receive an automatic $4,500 cost-of-living raise this year. Congress increased its own pay from $169,300 to $174,000 in 2009, in the middle of the Great Recession when low income people across the country were out of work and losing their homes. While Congress has frozen its own pay since then, that’s little consolation to minimum wage workers who take home less than a tenth of Congressional salaries.

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