Posts from Alan Pyke

6 years after fast food workers walked off the job, House passes $15 federal minimum wage

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The federal minimum wage would rise to $15 an hour under historic legislation passed Thursday by the House of Representatives.

Three Republicans jumped the aisle to support the Democratic-led measure. Six Democrats defected to vote no. Senate Majority Leader Mitch McConnell (R-KY) and President Donald Trump can now give tens of millions of working people a raise any time they want.

The bill would double the national pay floor in a plan that would roll out gradually, ticking up from the current $7.25 over a six-year period. The measure also permanently pegs the minimum wage to inflation, automating future increases to break a vicious political and economic cycle that’s become the norm over the past half-century.

Congress has not raised the wage floor in a decade. That hike, too, followed a decade of stagnation. So did its predecessor legislation in the 1990s. The government has slipped into a pattern of ignoring wage policy for long stretches as costs of living rise and erode the earning power of the lowest-paid workers in the country.

That cycle has helped fuel the massive economic inequality that’s ravaged the country for decades, through recessions and economic expansions alike. Today’s $7.25 is worth less than the minimum wage of the 1970s in inflation-adjusted terms.

The $15 wage floor wouldn’t just catch workers up for all that lost time and buying power the way past wage hikes have, though: It seeks to establish a higher standard of living for low-wage workers than the previous record high, set in the 1960s. Nearly 20 million workers would see their pay increased by the measure, and an estimated 1.3 million people would be lifted out of poverty.

The sheer magnitude of the hike — more than doubling the pay floor nationwide — has dismayed even some economists who are typically supportive of minimum wage raises in general. Supporters shrug off those worries, noting that the current wage system is heavily subsidized by taxpayers, who are left to make up the difference between corporate poverty wages and what it costs to keep a family alive in the 21st century.

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New study confirms ordinary Americans got fleeced by the Trump tax bill

Alan Pyke

Alan Pyke Deputy Economic Policy Editor, Think Progress

Sorry, America’s middle class: President Donald Trump’s signature tax code overhaul has not generated any meaningful new economic growth that wasn’t already underway, the nonpartisan Congressional Research Service (CRS) has found.

The new numbers inject further complexity into a contentious and ongoing debate around the landmark tax legislation as to who actually benefited from its passage. But the study should also offer additional clarity: With hard numbers now available on the economy’s performance in the first full year of the legislation, it’s easier than ever to talk instead about who got what and how — and the answers, so far, aren’t pretty.

Large corporations with shiny accounting departments ended up being the largest beneficiaries of the tax bill’s largesse, with the rate of tax they actually pay dropping by half in 2018, according to the CRS analysis. But the vanishingly insignificant comparative break Trump’s law gave workaday people lays the game bare. This tax bill is already reshaping the real-world economy in ways that limit the prospects of ordinary people, potentially reinforcing the structural inequities that adversely impact democratic society.

Trump and his congressional allies had forecast massive jumps in GDP growth and working-family incomes from the package. None materialized in year one. Annual growth hit 2.9% – identical to the 2015 mark, well below the 3.3% the Congressional Budget Office forecast when it sought to predict the tax bill’s impact in April of 2018, and right in line with what the CBO had predicted the economy would have done without Trump’s corporate-tax munificence.

The report’s findings underscore the deceitful nature of the administration’s first-term sales pitch.

Working people were supposed to benefit from the slashed corporate income tax rate and related rules tweaks intended to lure offshored profits back into the U.S. economy. American companies weren’t hiding $3 trillion in profit outside the country out of malice, the argument went. Rather, they were afraid of seeing it taxed too sternly, and would happily bring it home to make productive and equitable use of it just as soon as they felt it was safe from the taxman.

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Sanders, Ocasio-Cortez join forces with Loan Shark Prevention Act aimed at consumer-credit abuses

Alan Pyke

Alan Pyke Deputy Economic Policy Editor, Think Progress

Credit card interest rates would be capped at 15% nationwide under a new federal usury law proposed on Thursday by Sen. Bernie Sanders (I-VT) and Rep. Alexandra Ocasio-Cortez (D-NY).

The pair’s Loan Shark Prevention Act draws upon a long tradition, not just in legislative politics but in human moral thought. Most major faith traditions have characterized usurious lending as a grave sin, and the background materials prepared by the populist pair make pains to reference the “special place in the Seventh Circle of Hell” such lenders are accorded in late-medieval depictions of the inferno.

“Today we don’t need the hellfire, the pitchforks, or the rivers of boiling blood, but we do need a national usury law that caps interest rates on credit cards and consumer loans at 15%,” a briefing document on the proposal states.

Average annual interest rates on credit card debt have climbed steadily in modern times and now stand at almost 18%. Many cards charge annual percentage rates as high as 27%, the supporting white-paper notes, adding that the finance and retail firms offering this high-cost credit have become alarmingly reliant on the interest income their uncapped charges generate.

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Stop & Shop workers win pay, benefits concessions after 11-day strike

Alan Pyke

Alan Pyke Deputy Economic Policy Editor, Think Progress

New England grocery store workers have won significant concessions from the Dutch firm that rules their day-to-day lives after an 11-day strike, the United Food and Commercial Workers (UFCW) announced Monday.

More than 30,000 Stop & Shop employees walked off the job on April 11 after negotiators from Netherlands-based multinational food retailer Ahold Delhaize spent weeks insisting the grocer’s frontline workforce would have to absorb higher health care costs and major changes to retirement benefits.

Such collective action has become rare in the private sector, where union membership levels are at historic lows and complex ownership arrangements involving multinational holding companies have attenuated the connection between the people who do a business’ actual work and the well-to-do executives calling the shots.

But the nearly two-week work stoppage drew high-profile support from both local and national leaders. Multiple 2020 presidential primary contenders visited striking workers in person, including Sens. Elizabeth Warren (D-MA) and Amy Klobuchar (D-MN), South Bend Mayor Pete Buttigieg (D), and former Vice President Joe Biden (D). Boston Mayor Marty Walsh (D) and Connecticut Gov. Ned Lamont (D) also showed their faces and shared supportive remarks at rallies with the strikers. Sens. Kamala Harris (D-CA) and Cory Booker (D-NJ) tweeted their support for the cause.

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Elizabeth Warren’s new tax proposal targets Trump’s tax plan and corporate free riders

Alan Pyke

Alan Pyke Deputy Economic Policy Editor, Think Progress

Pitched as the long-awaited salvation of a broken system, President Donald Trump’s overhaul of the corporate tax code appears to have in fact doubled the number of major profitable corporations that find a way to pay zero dollars in income tax.

There were 60 such firms listed on the Fortune 500, a new report from the Institute on Taxation and Economic Policy (ITEP) showed Thursday, with a combined $79 billion in pre-tax revenue and nothing paid to the U.S. government in income tax. The group’s previous research had found an average of 30 profitable zero-tax firms per year in the decade before Trump’s tax law.

But such pay-nothing corporate takers would disappear under a new tax proposal from Sen. Elizabeth Warren (D-MA), announced Thursday in a blog post from her presidential campaign’s web team.

Warren’s proposal breaks from stubborn technocratic complexity, leaving messy, convoluted corporate tax code to one side – in a file marked “fix this later” – in favor of a new, separate, and simple levy on only the highest profits.

The first $100 million a firm nets in a year would be untouched by the new proposal. For every dollar of profit they claim to shareholders beyond that, firms would have to send seven pennies to the government.

As ITEP senior fellow Matt Gardner told ThinkProgress, “We know that in many cases companies are playing games with two sets of books. Requiring them to stick with one story in terms of profitability has a lot of appeal.”

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Fast food workers declare victory after McDonald’s withdraws opposition to minimum wage hikes

Alan Pyke

Alan Pyke Deputy Economic Policy Editor, Think Progress

After six years of strikes, lawsuits, and damning public scrutiny of how the fast food business model relies on taxpayer-subsidized poverty wages, McDonald’s formally withdrew from efforts to block a federal minimum wage hike on Tuesday.

The chain will also stop working against minimum wage increases at state and local levels, its executives told lobbying partners at the National Restaurant Association in a letter.

Workers and organizers involved in the six-year campaign of walk-outs, demonstrations, and litigation, dubbed the “Fight for $15,” immediately celebrated the about-face and pressed their advantage.

“It’s also time the company respect our right to a union. Since day one, we’ve called for $15 and union rights and we’re not going to stop marching, speaking out, and striking until we win both,” Kansas City McDonald’s worker and prominent Fight for $15 leader Terrence Wise said in a statement. “McDonald’s decision to no longer use its power, influence and deep pockets to block minimum wage increases shows the power workers have when we join together, speak out, and go on strike.”

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Wise’s mix of praise and warning reflects some murkiness attending the company’s decision. McDonald’s hasn’t renounced its membership in the “other NRA,” just forsworn corporate support for an ongoing lobbying effort funded in part through its own dues payments to the group. And it’s unclear if the company now welcomes the $15 wage floor workers have consistently sought since 2012, or if it merely accepts some smaller increase is inevitable.

The details of how minimum wage hike policies come together are always tricky, as business organizations fight to carve out certain sizes of business and to slow the phase-in period of a wage hike beyond what workers and progressive economists say is reasonable. The nation’s first $15 hourly wage floor deal was the product of months of vigorous negotiations where “everybody left… a little bit of blood on the floor,” as Seattle Hospitality Group leader Howard Wright told ThinkProgress after that city brokered the first low-wage labor peace of the conflict-oriented era workers like Wise created.

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Super-rich tax cheats can now expect to avoid audits after years of Republican sabotage guts IRS

Alan Pyke

Alan Pyke Deputy Economic Policy Editor, Think Progress

Here is a picture of neglect: Out of every 100 taxpayers who reported more than $1 million in income last year, just three got audited by the Internal Revenue Service (IRS).

The feds were similarly reticent to examine the filings of corporate taxpayers, auditing less than half of the 633 separate business entities that currently hold assets whose value exceeds $20 billion.

These alarming figures are just the continuation of a multi-year downward trend on basic accountability for those taxpayers who are best positioned to pay fancy accountants to skulk through the tax code looking for places to hide their loot from the public.

The decline in the number of audits of high-income individuals is particularly stark, as Syracuse University’s Transactional Records Access Clearinghouse (TRAC) noted in their report on the data, released Thursday. Twice as many million-dollar earners were audited in 2010, at which time the IRS identified $5.1 billion in unpaid taxes from 32,494 audits. Last year’s considerably more torpid effort to provide oversight of the well-to-do pulled in just $1.9 billion, per TRAC.

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Maxine Waters to consumer watchdog workers demoralized by Trump sabotage: You are not alone

Alan Pyke

Alan Pyke Deputy Economic Policy Editor, Think Progress

Rep. Maxine Waters (D-CA) has a message for the federal consumer watchdog workers fighting to protect your wallet from white-collar predators: Don’t let the bastards grind you down.

In an open letter, the prominent progressive darling and long-time leader of the House Financial Services Committee’s Democrats sought to encourage Consumer Financial Protection Bureau (CFPB) employees who’ve seen stark changes under the new management of Republican appointees who would rather their agency not exist.

The morale-boosting missive also served as a reminder to employees that a whistleblower portal can protect them from recriminations should they feel the need to report malign conduct by President Donald Trump’s administration.

“Let me assure you that actions to weaken the Consumer Bureau from within as Director Mulvaney attempted to do will not go unchecked or unnoticed,” Waters wrote to the staffers. After the Democrats took back the House, Waters became chairwoman of the Financial Services Committee.

“If, in the course of your work, you are a witness to waste, fraud, abuse or gross mismanagement, please do not hesitate to alert me and my staff,” she wrote.

 The letter also directed concerned staffers to a confidential whistleblower reporting tool housed at the Financial Services Committee website.

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Zinke used Thanksgiving to sneak a Koch adviser and party loyalist into key public information role

Alan Pyke

Alan Pyke Deputy Economic Policy Editor, Think Progress

After attracting more scandals in 18 months than his four predecessors managed in  16 years, Interior Secretary Ryan Zinke quietly shut the door to further public scrutiny of his office over the Thanksgiving break.

The secretary gave control of incoming Freedom of Information Act (FOIA) requests to former Koch Industries adviser and longtime Zinke consigliere Dan Jorjani in an order dated November 20 but first uncovered Monday afternoon by the Center for Biological Diversity.

Zinke’s move on the Tuesday before Thanksgiving is best understood as a reshuffling of his resources, from attack to defense. Jorjani has worked for the agency since at least May 2017, serving as the chief lawyer putting Zinke and Trump’s agenda into black-letter policy action. He worked with energy industry interests to pen the rollbacks of Obama-era regulatory decisions protecting migratory birds and rejecting a mining proposal at the edge of Minnesota’s Boundary Waters, according to reporting by Pacific Standard’s Jimmy Tobias.

As Zinke’s management of the department drew scandalous scrutiny — like so many other Trump cabinet secretaries, Zinke appears to play fast and loose with ethics rules governing travel costs — Jorjani wrote to a colleague that Interior staffers’ primary responsibility is to protect Zinke from negative press. He will now be the central gatekeeper of the agency’s documents when journalists, watchdogs, and other citizens seek insight into the conduct of their government

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Here’s the pricetag Senate Dems are charging Mitch McConnell to leave DACA out of the budget deal

Alan Pyke

Alan Pyke Deputy Economic Policy Editor, Think Progress

In exchange for leaving out a key program protecting about 800,000 undocumented immigrants, Senate Democrats have pried several billion dollars in funding increases for other domestic policy priorities out of Majority Leader Mitch McConnell (R-KY).

A document circulating among House Democrats and outside ally groups like NDD United labels the total haul of the deal as “a $131 billion increase for non-defense programs.” That figure is calculated based on how spending levels would have automatically dropped if lawmakers failed to reach a deal to waive so-called “sequestration” — the automatic annual cuts to spending that Congress has partially waived each year since 2012.

Compared to that same kind of routine sequestration mitigation budgeting, the deal’s increases to spending on domestic programs are smaller, a combined $57 billion over two years. That is a large number in a vacuum, but small in context of the massive figures involved in providing services to the public. The first year of the deal, for example, adds $26 billion more than simply canceling sequestration would have done  — making the new cap $542 billion total, which is still less than the inflation-adjusted spending Congress approved on such services in 2011. Schumer has in effect won a 5 percent bump to domestic spending caps that leaves the long-suffering cash-starved systems like public housing far behind the funding levels experts say they need.

The document also boasts that the deal between McConnell and Minority Leader Chuck Schumer (D-NY) would flout President Donald Trump’s will. Trump proposed a $54 billion cut to the category for Fiscal Year 2018, meaning the Schumer-McConnell “non-defense funding cap will be $117 billion higher than the level requested by President Trump,” the sheet says.

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Union Matters

America’s Wealthy: Ever Eager to Pay Their Taxes!

Sam Pizzigati

Sam Pizzigati Editor, Too Much online magazine

Why do many of the wealthiest people in America oppose a “wealth tax,” an annual levy on grand fortune? Could their distaste reflect a simple reluctance to pay their fair tax share? Oh no, JPMorganChase CEO Jamie Dimon recently told the Business Roundtable: “I know a lot of wealthy people who would be happy to pay more in taxes; they just think it’ll be wasted and be given to interest groups and stuff like that.” Could Dimon have in mind the interest group he knows best, Wall Street? In the 2008 financial crisis, federal bailouts kept the banking industry from imploding. JPMorgan alone, notes the ProPublica Bailout Tracker, collected $25 billion worth of federal largesse, an act of generosity that’s helped Dimon lock down a $1.5-billion personal fortune. Under the Elizabeth Warren wealth tax plan, Dimon would pay an annual 3 percent tax on that much net worth. Fortunes between $1 billion and $2.5 billion would face a 5 percent annual tax under the Bernie Sanders plan.

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No Such Thing as Good Greed

No Such Thing as Good Greed