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May 1, 2016

No. 16-6E

Republicans Are in the Way! Vote Them Out!

Jobs, Unions, and Trust


Reading on a phone?
Do it this way.

State of The
American Dream:
Economic Policy And
The Future Of The
Middle Class
by Amy Traub, Heather C. McGhee,
demos.org

Middle Class Prosperity


Widely shared middle-class
prosperity is a signature of
American society. It has made
America the most hopeful and
dynamic country on earth and
it is a foundation of strong
democracy.
Middle Class in Trouble
Yet today, Americas middle
class is in trouble and those
troubles long preceded the
financial crash of 2008 and the
downturn that followed.
Security As a result of major
economic and policy changes
over the past three decades,
the traditional routes into the
middle class have become more
difficult to travel and security
has eroded for those already
in the middle class. Many jobs
do not pay enough to cover

basic living expenses, much less


allow workers to save money
and build assets for the future.
In fact, a quarter of full-time
working-age adults are still not
earning enough money to meet
economic needs like
housing,
utilities,
food,
health care, and
transportation for themselves or their families.
College A college education
has become ever more critical to
moving up the income ladder
even as it has also become less
affordable and the earning
power of a college degree has
stagnated.
Saving Building significant
wealth assets for retirement
or to help the next generation
remains an impossible dream
for millions.
Debt Many households are
instead mired in debt. In short,
too many people who play by the
rules and do everything right
find that they cannot climb into
the middle class or stay there.

TALKING POINTS
1. Public policy choices have been
poor.
2. Political conflicts of interest
affect the interests of the poor
and middle class.
3. If you dont have any say into
the terms of your employment
then you are a slave . . . And
thats the way they want it.
4. In 1944, FDR said, We cannot
be content, no matter how
high that general standard of
living may be, if some fraction
of our people whether it be
one-third or one-fifth or onetenth is
ill-fed
ill-clothed
ill housed
insecure.
5. The benefits of a minimum
wage far outweigh the costs.
6. Make it a habit to vote in every
election.

Challenges The hard economic times of the past few


years have compounded the
long accumulating challenges
facing the middle class.
Jobs are harder to come
by
amid
extended
high
unemployment. Many jobs lost
[Continued on page 2, MIDDLE CLASS]

Republicans Are in the Way! Vote Them Out!


16-6E

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[MIDDLE CLASS, continued from page 1]

Poor Public Policy Choices A host of public


during the recession may never come back as a policy choices created this state of affairs including:
result of corporate policies that have eliminated
tax cuts that disproportionately benefitted the
jobs, moved them overseas, or replaced
wealthy,
people with technology. The nations new jobs
financial deregulation,
disproportionately offer lower wages and fewer
state divestment in public higher education, and
benefits than those they replaced.
decisions to let the minimum wage stagnate,
Homes The dream of homeownership has
to name only a few and things are likely to get
turned into a nightmare for millions of Americans
worse without major policy corrections.
who have lost their homes to foreclosure or now
find themselves owing more on their mortgages Long Term The long-term trends that have
moved America toward a postindustrial service
than their homes are worth.
economy are here to stay and, in fact, have accelerRetirement Retirement savings accounts ated during the economic downturn. Over the next
were hit hard by the stock market plunge of 2008- two decades, the Department of Labor projects
2009. Government investments in education and that the largest job growth will be in low-wage jobs
job training have declined amid draconian budget offering little opportunity for advancement and
cuts and hundreds of thousands of once secure that do not offer health insurance or pay enough
to allow workers to put money toward home equijobs in the public sector have been eliminated.
ty and retirement savings.
Economy Americas economy
Education Meanwhile, most of
What's included
has been an awesome engine of
the good jobs that are created will
in a living wage?
require a post-secondary education
wealth creation in the past thirty
The seven factors in
that is likely to remain out of reach
calculating the basic
years, but the new prosperity has
for millions as college tuition costs
cost
of
a
safe
and
decent
disproportionately gone to the
standard of living are:
continue to rise.
wealthiest. Between 1979 and 2007,
Housing
National Inaction Even as
according to the Congressional
Food
structural changes have imperiled the
Childcare
Budget Office, American households
middle class, national action has been
Transportation
in the highest-paid 1 percent of the
Healthcare
lacking. Over recent decades, many
income distribution saw after-tax
Taxes
political leaders have failed to reckon
Other Basic Necesincome gains of 275 percent while
with a basic fact of the new economic
sities
era for millions of Americans, no
the 60 percent of the households in
amount of individual effort or selfthe middle saw their incomes grow by
improvement or thrift can guarantee a secure
just under 40 percent over this same period.
middle-class life.
Social Mobility And, according to much
Broken Contract The American social
research, social mobility the very essence of the contract a promise of opportunity and security
American idea has stagnated or declined in the for those who act responsibly is fundamentally
United States, with many young people struggling broken.
to replicate their parents standard of living. For New Policies Needed Dramatic new public
example, young men are earning 10 cents per policy initiatives are needed to accomplish two
dollar less than their fathers did 30 years ago, broad interrelated goals:
according to research from Dmos.
to ensure that all Americans have a chance to
move into the middle class and
to ensure greater security for those in the
middle class.
Such initiatives must move far beyond incremental
measures and be of sufficient scale to permanently
address the economic insecurities of what is now a
vast number of U.S. households.
###

Racial Wealth Gap A persistent and growing


racial wealth gap, with historic inequities and
injustices exacerbated by the recent iniquity of
predatory lending, restricts opportunity for people
of color to join or remain part of the nations
middle class.
16-6E

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From Conflict
of Interest to
Country First:
The Six Rules of
Relationships of
Trust

Common Law The common law of Relationships


of Trust was inspired by everyday situations in
which we ask one another to go out into the world
and transact business with third parties on our
behalf because we may lack the time, capacity, and/
or the interest to conduct this business ourselves.
It probably arose out of a situation like this. One
fellow (the King) said to his brother, Im going off
to fight in the Crusades. Would you look after the
castle, the wife, the kids, and the kingdom for me
while Im gone? And his brother said, Sure, no
problem. The reasonable expectation was that the
King s brother would act as
a Good Steward. And if his
brother is a Good Steward
the king will find, when he
comes home, that his family
is safe and his holdings
and his kingdom have
continued to prosper because his brother served as
a trustworthy and competent trustee or agent. This
type of circumstance was probably the beginning of
trust and agency common law.

by Maureen F. Glasheen Esq.


This talk from 2009 presented in 6 parts in the
next 6 issues of The Enlightened Voter eloquently
describes what are the Six Rules of Relationships of
Trust and how many of our legislators and business
critters should go to jail for breaking those rules! [ed.]

Part 1 of 6
Recent headlines all have something in common
they are about conflicts of interest.
Illinois governor tries to sell Senate seat,
Madoff investors left Broke, Broken,
Bailed out Bank Officials get 1.6 Billion and
Refuse to Account for Money, and
America Is Outraged over AIG Bonuses.
What is a conflict of interest exactly? It is
primarily disloyalty and how disloyalty is covered up.
Can everyday people protect themselves?
Yes, but we have to get smart.
The best and least expensive way you can
protect yourself is to prevent problems in the first
place; by becoming far more discerning about who
you employ in a Relationship of Trust and becoming
aware of your own duties when others ask you to
serve as their agent, trustee or employee.
What are Relationships of
Trust? There are two kinds of
relationships in our lives:
Arms-Length Relationships
Relationships of Trust.
Visualize this type of relationship as three people:
one sitting across the negotiation table from the
other two. Visualize the two sitting together on the
same side of the negotiation table: the first person
has his arm around the second person because
the first person is acting as the second person s
protector, advocate, defender and/or adviser. Those
two people on the same side of the negotiation
table are in a Relationship of Trust where
the protector is acting on behalf of and in the best
interest of, the person being protected.
Meanwhile the protector is in an Arms Length
Relationship with the person across from them at
the negotiating table. Our focus is the Six Rules of
Relationships of Trust that govern the relationship
between the protector and the protected.
16-6E

The Six Rules When the Kings brother agreed


to look after the Kings family and lands he undertook
to perform all of those tasks:
1. With undivided loyalty or allegiance to his
brothers best interest,
2. With reasonable care, skill and diligence to
protect his brothers family and lands against
foreseeable harm and transact business to his
best advantage,
3. With full disclosure of all important
information, especially about his own adverse
interests, if any, so that his brother can make
wise choices,
4. With obediencethat is staying within the
scope of authority conferred upon him and
following lawful instructions given by his
brother,
5. With confidentiality, and
6. With willingness to account for all the
property and money that is received and paid
out during his stewardship.
These are essentially the Six Rules of Relationships
of Trust. Centuries ago, the courts concluded that it
was necessary to adopt these high moral standards
as the legal duties in all Relationships of Trust. We
will develop them in more detail later.
End of Part 1

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The Wealthy Have Pulled America


Back to the 19th Century

Capitalism Requires Decency and Fairness


Finally, after decades of labor strife and
political tumult, the twentieth century brought an
understanding that capitalism requires minimum
standards of decency and fairness:

by Robert Reich, AlterNet.org

Wall Street and enormously rich individuals have


gained political power to organize the market in
ways that leave most Americans behind.

workplace safety
a minimum wage
maximum hours (and time-and-a-half for
overtime)
and a ban on child labor.
Balance of Power We also learned that
capitalism needs a fair balance of power between
big corporations and workers.
We achieved that through antitrust laws that
reduced the capacity of giant corporations to
impose their will, and labor laws that allowed
workers to organize and bargain collectively.

Workers Get What Theyre Worth My


recent column about the growth of on-demand
jobs like Uber making life less predictable and
secure for workers unleashed a small barrage of
criticism from some who contend that workers
get what theyre worth in the market.

Labor Unons By the 1950s,


when 35 percent of privatesector workers belonged to a
labor union, they were able
to negotiate higher wages and
better working conditions than
employers would otherwise
have been happy to provide.

Too Bad A Forbes Magazine contributor, for


example, writes that jobs exist only when both
employer and employee are happy with the deal
being made. So if the new jobs are low-paying
and irregular, too bad.
Much the same argument was voiced in the
late nineteenth century over alleged freedom
of contract. Any deal between employees and
workers was assumed to be fine if both sides
voluntarily agreed to it.

But now we seem to be heading back to nineteenth


century.
Labor Protections No More Corporations
are shifting full-time work onto temps, freelancers, and contract workers who fall outside the
labor protections established decades ago.

Lack of a Better Alternative It was an era


when many workers were happy to toil twelvehour days in sweat shops for lack of any better
alternative.

The nations biggest corporations and Wall Street


banks are larger and more potent than ever.
And labor union membership has shrunk to fewer
than 7 percent of private-sector workers.
So its not surprising were once again hearing
that workers are worth no more than what they
can get in the market.
Markets Are Created by Human Beings
But as we should have learned a century ago,
markets dont exist in nature. Theyre created by
human beings. The real question is how theyre
organized and for whose benefit.

Great Inequality It was also a time of great


wealth for a few and squalor for many. And
of corruption, as the lackeys of robber barons
deposited sacks of cash on the desks of pliant
legislators.

Organized for the Top In the late nineteenth


century they were organized for the benefit of a
few at the top.

If you don't have any say into the terms of


your employment then you are a slave . . . And
that's the way they want it.
16-6E

[Continued on page 5, BACK]

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[BACK, continued from page 4]

Reorganized for the Majority But by


the middle of the twentieth century they were
organized for the vast majority.

Costco vs. Walmart


Costco pays its employees about
$35,000 vs Walmarts Sams Club
$17,000. Walmart states we will never
match Costco salaries. Costco is rated
#1 by Consumer Reports in service,
quality of their merchandise, and
has a much, much, lower turnover
of employees than Walmart and
happier employees. Employees at
Walmart often have to have federal
help to feed their families, for example,
food stamps, child care, health care,
etc. In todays economy, health care,
food, and education can not be done
on $17,000 per year. Really, Walmart!

During the thirty years after the end of World


War II, as the economy doubled in size, so did the
wages of most Americans along with improved
hours and working conditions.
Yet since around 1980, even though the economy
has doubled once again (the Great Recession
notwithstanding), the wages of most Americans
have stagnated. And their benefits and working
conditions have deteriorated.
This isnt because most Americans are worth less.
In fact, worker productivity is higher than ever.
Its because big corporations, Wall Street, and
some enormously rich individuals have gained
political power to organize the market in ways
that have enhanced their wealth while leaving
most Americans behind.

Robert Reich

I Suppose It's Socialism

That includes trade agreements protecting the


intellectual property of large corporations and
Wall Streets financial assets, but not American
jobs and wages.

Conservatives label any and all efforts by


government to improve the quality of our lives as
socialism.
Is it socialism to provide childhood
vaccinations?
Is it socialism to launch a satellite?
Is it socialism to offer school lunch programs
for needy children?
Is it socialism to advocate equal employment
opportunity?
Is it socialism to test foods and products for
safety?
Is it socialism to save the American auto
industry?
Is it socialism to fill in a pot hole, maintain
a quality police department, or provide fire
fighters with the necessary equipment?
Is it socialism to mandate ramps for handicap
accessibility?
Is it socialism to inspect the quality of the
public water supply?
Is it socialism to maintain national parks?
No, of course not. It is common sense and all
of these are necessary and proper roles for
government so that all Americans enjoy a high
quality of life! Prof. Robert Watson, PhD

Bailouts of big Wall Street banks and their


executives and shareholders when they cant pay
what they owe, but not of homeowners who cant
meet their mortgage payments.
Bankruptcy protection for big corporations,
allowing them to shed their debts, including
labor contracts. But no bankruptcy protection
for college graduates over-burdened with student
debts.
Antitrust leniency toward a vast swathe of American
industry - including Big Cable (Comcast, AT&T,
Time-Warner), Big Tech (Amazon, Google), Big
Pharma, the largest Wall Street banks, and giant
retailers (Walmart).
But less tolerance toward labor unions - as workers
trying to form unions are fired with impunity, and
more states adopt so-called right-to-work laws
that undermine unions.
We seem to be heading full speed back to the late
nineteenth century.
So what will be the galvanizing force for change
this time? ###
16-6E

###

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FDR 1944
State of the Union Message

The right of every farmer to raise and sell his


products at a return which will give him and
his family a decent living;
The right of every businessman, large and
small, to trade in an atmosphere of freedom
from unfair competition and domination by
monopolies at home or abroad;
The right of every family to a decent home;
The right to adequate medical care and the
opportunity to achieve and enjoy good health;
The right to adequate protection from the
economic fears of old age, sickness, accident,
and unemployment;
The right to a good education.

We cannot be content, no matter how high that


general standard of living may be, if some fraction
of our people whether it be one-third or onefifth or one-tenth is
ill-fed
ill-clothed
ill housed
insecure.
Rights This Republic had its beginning, and
grew to its present strength, under the protection
of certain inalienable political rights-among them
the right of

All Of These Rights Spell Security And


after this war is won we must be prepared to move
forward, in the implementation of these rights, to
new goals of human happiness and well-being.

free speech
free press
free worship
trial by jury
.
freedom from unreasonable searches and
seizures.
They were our rights to
life and liberty.
Growth As our Nation
has grown in size and
stature, however, and as
our industrial economy
expanded, these political
rights proved inadequate
to assure us equality in the
pursuit of happiness.
Lack of Security We
have come to a clear realization of the fact that true
individual freedom cannot exist without economic
security and independence. Necessitous men are
not free men. People who are hungry and out of a
job are the stuff of which dictatorships are made.
Second Bill of Rights In our day these
economic truths have become accepted as selfevident. We have accepted, so to speak, a second
Bill of Rights under which a new basis of security
and prosperity can be established for all regardless
of station, race, or creed.
The Rights Among these are:

America's own rightful place in the world depends


in large part upon how fully these and similar
rights have been carried into practice for our
citizens. For unless there
is security here at home
there cannot be lasting
peace in the world.
The
Dangers
of
Rightist Reaction
One of the great American
industrialists
of
our
day a man who has
rendered yeoman service
to his country in this
crisis-recently emphasized the grave dangers
of "rightist reaction" in this Nation. All clearthinking businessmen share his concern. Indeed,
if such reaction should develop if history were
to repeat itself and we were to return to the socalled "normalcy" of the 1920's then it is certain
that even though we shall have conquered our
enemies on the battlefields abroad, we shall have
yielded to the spirit of Fascism here at home.
###
"Emiliano Zapata quit his job as a peasant and
became a revolutionary when he was assigned to
his hacendado's stable and saw that the horses
he was feeding lived better than he did."

The right to a useful and remunerative job in


the industries or shops or farms or mines of
the Nation;
The right to earn enough to provide adequate
food and clothing and recreation;
16-6E

Lou Dubose, washingtonspectator.org


6

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The Importance of A Federal


Minimum Wage

People ask why this fireman should get a pension when


I cant get a good job. Well the reason why he has a
pension is because he accepted lower wages, thats why
he has a pension. That requires thought and organisation.
In a society of isolated people where each person is alone
with his Fox News and iPhone, people dont understand
what is happening. Noam Chomsky

by Jeff Brittain

Established A Federal minimum wage was


first set in 1938 by The Fair Labor and Standards
Act. The minimum wage is meant to be a tool for
combating poverty and preventing unfair wages,
however, some scholars and economists doubt
its effectiveness and some even argue it has more
negative effects than positive. Despite this, most
scholars have accepted the minimum wage as part
of our market system, but they are passionately
divided as to whether increasing the minimum
wage is positive or negative.

Jersey and nearby eastern Pennsylvania. Their


research revealed that after New Jersey raised
its minimum wage, employment increased at
fast food establishments, while in Pennsylvania,
where there was no minimum wage increase,
employment declined.
Likely Result The increase in employment
is likely a result of increased productivity and
quality at the New Jersey establishments induced
through the incentive of higher wages, and also
due in part to the increased incomes of workers
who then buy more fast food. Regardless of this
study, there is no broadly accepted consensus
on whether the effect of the minimum wage is
positive or negative. As Heidi Shierholz suggested,
whether the effect is slightly above zero or slightly
below zero, most scholars agree it is small.

Opponents Opponents of the minimum wage


primarily argue that it reduces the demand for
labor and encourages layoffs, thereby increasing
unemployment and hurting the poor.
For example, if the minimum wage were raised
from $8 to $10 an hour, a business would face an
increase of 25% in labor costs. Opponents of the
minimum wage claim that the increase in costs
would translate to a reduction in the labor force
to offset the costs.

Many Benefits Moreover, there are many


benefits and little costs of a Federal minimum
wage. As opposed to the EITC (Earned Income
Tax Credit), the minimum wage adds nothing
to the federal deficit and will likely decrease the
deficit by reducing welfare payments.

Another argument is that a higher minimum


wage encourages outsourcing. For example,
higher costs might cause a business to move its
entire operation to China or India where they
can be much more profitable by paying miniscule
wages. This would in turn produce more layoffs
and unemployment.

Stimulus Furthermore, the minimum wage


can be an effective stimulus on the economy.
Economists at the Federal Reserve Bank of Chicago
have found that an increase in the minimum wage
by just $1 an hour boosts the spending of impacted
families by $800 per quarter.

The logic makes sense, however, even if opponents


are right about the negative effects on employment
the loss of jobs would not outweigh the benefits
of a higher minimum wage. This is because a
higher minimum wage benefits almost all lowwage workers. For example, more than 21 million
workers enjoyed improved wages as a result of the
Clinton minimum wage increase. Furthermore,
employers might absorb higher labor costs by
lowering profits or increasing productivity, rather
than laying off workers.

Such a stimulus would clearly benefit the economy


and increase the sales of businesses, which may in
turn, allow business to pay the increased wages
with less of a loss to profitability.
Productivity Finally, higher productivity may
be a result of increasing the minimum wage. The
reason is that firms would likely look for ways
to improve the efficiency of workers due to the
incentive of higher costs. To conclude, for policy
makers it is hard to avoid the conclusion that the
benefits far outweigh the costs. ###

Proponents The conclusion that the minimum


wage has negative effects on employment is hotly
debated by proponents of the minimum wage. For
example, in 1994 David Card and Alan Krueger
did a study on fast food establishments in New
16-6E

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Walmart Workers Win


Higher Pay

Do you believe The Enlightened Voter should be read by

Walmart Takes a Modest


all voters in Palm Beach County?
Step America's largest private
Your support can make it happen!
employer recently took a modest
step to improve the lives of a lot
of workers. Following years of
concerted protest by frontline
http://voterturnoutimprovementproject.mydagsite.com/
workers and their communities,
Walmarts CEO Doug McMillon
announced that Walmart will raise wages to $9 blow to the outdated, low-wage business model
an hour in April and $10 an hour by February that Walmart pioneered.
next year, as well as creating more stable and
Walmart Could Do Better Despite the good
predictable schedules.
news, Walmart can easily do better. Last year
Its About Time This is a huge win-and
Walmart spent more than $6.6 billion repurchasits about time. Research by Demos.org has
ing shares of its own stock, bumping up earnings
pointed the way forward for retailers like
per share and consolidating ownership among the
Walmart. It shows that Walmarts low wages and
Walton family heirs. If that money were spent on
unpredictable schedules disproportionately hurt
low-wage workers instead, Walmart could raise
women and people of color, and are holding our
pay by over $5 an hour.
economy back. Weve also shown how a raise and
As Walmart employee Emily Wells put it after
predictable hours would lift Walmart workers out
hearing todays decision:
of poverty, help Walmart's bottom line, and boost
"Especially without a guarantee of getting
economic activity overall.
regular hours, this announcement still falls
Courageous Action This raise would never
short of what American workers need to suphave happened without the courageous action of
port our families. With $16 billion in profits
thousands of Walmart workers. It is an important
and $150 billion in wealth for the owners,
Walmart can afford to provide the good jobs
that Americans need-and that means $15 an
Support Our
hour, full-time, consistent hours and respect
Get-Out-The-Vote Efforts
for our hard work.
Your Ad Here.

Click here to contribute!

Less Than 50 Years Ago A full-time


associate making $9 an hour still makes a little
less than $19,000 a year. Next year's wage of $10
an hour is worth less than the minimum wage was
50 years ago.

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Its not just history that shows that a higher wage


at Walmart is possible-employers like IKEA and
Gap have already recently announced similar
raises, and high-road employers like Costco and
Trader Joes have demonstrated that Walmart
can raise pay higher and still be a leader in the
retail market. ###

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ancy Morse, Geoff Kashdan
Edward Odette, Marie Isaacson,
Spanish Translation: Julia Cisneros Fitzpatrick CT, ATA

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