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ROBERT B. REICH, Chancellor’s Professor of Public Policy at the University of California at Berkeley and Senior Fellow at the Blum Center for Developing Economies, was Secretary of Labor in the Clinton administration. Time Magazine named him one of the ten most effective cabinet secretaries of the twentieth century. He has written fourteen books, including the best sellers “Aftershock, “The Work of Nations,“ and"Beyond Outrage.” He is also a founding editor of the American Prospect magazine and chairman of Common Cause. His film, INEQUALITY FOR ALL is available on Netflix, iTunes, Amazon. His new book, “SAVING CAPITALISM: For the Many, Not the Few” is out 9/29.
Updated: 15 min 46 sec ago
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WHY THE SHARING ECONOMY IS HARMING WORKERS – AND WHAT MUST BE DONE
In this holiday season it’s especially appropriate to acknowledge how many Americans don’t have steady work.
The so-called “share economy” includes independent contractors, temporary workers, the self-employed, part-timers, freelancers, and free agents. Most file 1099s rather than W2s, for tax purposes.
It’s estimated that in five years over 40 percent of the American labor force will be in such uncertain work; in a decade, most of us.
Already two-thirds of American workers are living paycheck to paycheck.
This trend shifts all economic risks onto workers. A downturn in demand, or sudden change in consumer needs, or a personal injury or sickness, can make it impossible to pay the bills.
It eliminates labor protections such as the minimum wage, worker safety, family and medical leave, and overtime.
And it ends employer-financed insurance – Social Security, workers’ compensation, unemployment benefits, and employer-provided health insurance under the Affordable Care Act.
No wonder, according to polls, almost a quarter of American workers worry they won’t be earning enough in the future. That’s up from 15 percent a decade ago.
Such uncertainty can be hard on families, too. Children of parents working unpredictable schedules or outside standard daytime working hours are likely to have lower cognitive skills and more behavioral problems, according to new research.
What to do?
Courts are overflowing with lawsuits over whether companies have misclassified “employees” as “independent contractors,” resulting in a profusion of criteria and definitions.
We should aim instead for simplicity: Whoever pays more than half of someone’s income, or provides more than half their working hours should be responsible for all the labor protections and insurance an employee is entitled to.
In addition, to restore some certainty to people’s lives, we need to move away from unemployment insurance and toward income insurance.
Say, for example, your monthly income dips more than 50 percent below the average monthly income you’ve received from all the jobs you’ve taken over the preceding five years. With income insurance, you’d automatically receive half the difference for up to a year.
It’s possible to have a flexible economy and also provide workers some minimal level of security.
A decent society requires no less.
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THE 4 BIG LIES ABOUT IMMIGRANTS – AND THE TRUTH
Donald Trump has opened the floodgates to lies about immigration. Here are the myths, and the facts
MYTH: Immigrants take away American jobs.
Wrong. Immigrants add to economic demand, and thereby push firms to create more jobs.
MYTH: We don’t need any more immigrants.
Baloney. The U.S. population is aging. Twenty-five years ago, each retiree in America was matched by 5 workers. Now for each retiree there are only 3 workers. Without more immigration, in 15 years the ratio will fall to 2 workers for every retiree, not nearly enough to sustain our retiree population.
MYTH: Immigrants are a drain on public budgets.
Bull. Immigrants pay taxes! The Institute on Taxation and Economic Policy released a report this year showing undocumented immigrants paid $11.8 billion in state and local taxes in 2012 and their combined nationwide state and local tax contributions would increase by $2.2 billion under comprehensive immigration reform. MYTH: Legal and illegal immigration is increasing.
Wrong again. The net rate of illegal immigration into the U.S. is less than zero. The number of undocumented immigrants living in the U.S. has declined from 12.2 million in 2007 to 11.3 million now, according to Pew Research Center.
Don’t listen to the demagogues who want to blame the economic problems of the middle class and poor on new immigrants, whether here legally or illegally. The real problem is the economic game is rigged in favor of a handful at the top, who are doing the rigging.
We need to pass comprehensive immigration reform, giving those who are undocumented a path to citizenship.
Scapegoating them and other immigrants is shameful.
And it’s just plain wrong.
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AUSTERITY 101: The Three Reasons Republican Deficit Hawks Are Wrong
Congress is heading into another big brawl over the federal budget deficit, the national debt, and the debt ceiling.
Republicans are already talking about holding Social Security and Medicare “hostage” during negotiations—hell-bent on getting cuts in exchange for a debt limit hike.
Days ago, U.S. Treasury Secretary Jacob Lew asked whether our nation would “muster the political will to avoid the self-inflicted wounds that come from a political stalemate.”
It’s a fair question. And there’s only one economically sound answer: Congress must raise the debt ceiling, end the sequester, put more people to work, and increase our investment in education and infrastructure.
Here are the three reasons why Republican deficit hawks are wrong. (Please watch and share our attached video.)
FIRST: Deficit and debt numbers are meaningless on their own. They have to be viewed as a percent of the national economy.
That ratio is critical. As long as the yearly deficit continues to drop as a percent of the national economy, as it’s been doing for several years now, we can more easily pay what we owe.
SECOND: America needs to run larger deficits when lots of people are unemployed or underemployed – as they still are today, when millions remain too discouraged to look for jobs and millions more are in part-time jobs and need full-time work.
As we’ve known for years – in every economic downturn and in every struggling recovery – more government spending helps create jobs – teachers, fire fighters, police officers, social workers, people to rebuild roads and bridges and parks. And the people in these jobs create far more jobs when they spend their paychecks.
This kind of spending thereby grows the economy – thereby increasing tax revenues and allowing the deficit to shrink in proportion.
Doing the opposite – cutting back spending when a lot of people are still out of work – as Congress has done with the sequester, as much of Europe has done – causes economies to slow or even shrink, which makes the deficit larger in proportion.
This is why austerity economics is a recipe for disaster, as it’s been in Greece. Creditors and institutions worried about Greece’s debt forced it to cut spending, the spending cuts led to a huge economic recession, which reduced tax revenues, and made the debt crisis there worse.
THIRD AND FINALLY: Deficit spending on investments like education and infrastructure is different than other forms of spending, because this spending builds productivity and future economic growth.
It’s like a family borrowing money to send a kid to college or start a business. If the likely return on the investment exceeds the borrowing costs, it should be done.
Keep these three principles in mind and you won’t be fooled by scare tactics of the deficit hawks.
And you’ll understand why we have to raise the debt ceiling, end the sequester, put more people to work, and increase rather than decrease spending on vital public investments like education and infrastructure.
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