We discuss the latest monthly jobs report, President Obama’s recent speech about the economic inequality in America and the fast food workers striking nationwide to demand a higher minimum wage.

Steven Greenhouse, labor and workplace correspondent for The New York Times and author of "The Big Squeeze: Tough Times for the American Worker"
Michael Strain, resident scholar at the American Enterprise Institute specializing in labor economics and the U.S. economy
Sylvia Allegretto, labor economist at the Institute for Research on Labor and Employment at UC Berkeley

  • Skip Conrad

    Listening to Obama’s talking points, I don’t understand why he insists on increasing our immigration rates (i.e comprehensive immigration reform). Immigration brings in cheap workers who put Americans out of work. Keep immigration low and the American unemployment rate will go down. As it is now, we import 100,000 foreign worker per month. We are not creating enough jobs to both employ these foreign workers and get unemployed Americans back to work. Screw Zuckerberg.

    • Chemist150

      Immigration is only a problem when labor demand is low (as it is now).

      • Skip Conrad

        So, you do agree it is a problem. Shouldn’t our immigration policy be flexible enough to adapt to the economic landscape?

        • Chemist150

          Well, I’m not against immigration. A healthy economy can handle everyone participating. The fact that the economy not exactly healthy would suggest that immigration be mitigated because it can have negative impact.

          Yes, immigration policy should be flexible but right now it’s used as an election tool that a healthy economic tool.

          • Skip Conrad

            Yes, and also as a reward to special interests. You could tie immigration rates to economic (and environmental) indicators, similar to the way the fed regulates interests rates. That way it becomes less of a political football.

          • Chemist150

            Agreement on standard policy would be difficult despite both parties relying heavily on Keynesian economics. They focus on different aspects of the economic structure.

            It would be nice to have standard policy that would help dictate whether action one way or another is warranted.

      • Skip Conrad

        And then there is the situation where poor immigration policy will actually causes economic distress. i.e. using immigration policy to drive down wages.

      • TrainedHistorian

        Actually, mass Immigration IS a problem as long as wages are stagnant or declining. If wages at the bottom were rising, yes, then we could have substantial immigration, However, real wages in the bottom third to one half have NOT been rising since the late 70s, they’ve been stagnant or even declining for many. That is why our immigration policy ever since the fiasco of the 1986 non-reform has been so flawed. It’s not a flexible policy in which immigration is curtailed when wages fall or stagnate. It’s in practice a policy of practically open borders (employers who hire undocumented are rarely penalized; there is very little deportation of anyone except criminals)..Guess what happens when you have mass immigration of low-and medium skilled workers into an economy that has stagnant or falling wages for these categories of labor? Real wages continue to stagnate or decline, and housing costs especially rental housing costs (the biggest cost to workers now) just keep going up. And that’s exactly what we’ve had for the last 30+ years….Real wage stagnation for those in the bottom third will not end so long as mass immigration is treated as a sacred cow by both the pro-cheap labor Right and the pro-“diversity” Left.

    • Skip Conrad

      Did you notice when this question was read on the air, nobody came forward to address it. Michael Strain instead started discussing the fact that raising the minimum wage discourages employment because it makes it more expensive by businesses to employ workers. Incredibly lame response. Immigration is toxic – nobody will discuss it, and the effect on the economy.

      • Chemist150

        I think most of these types of guest are just trying to support their agendas regardless of reality.

        • Skip Conrad

          ‘ll tell Krazny to invite less of that type of guest.

  • Chemist150

    His legacy will be a job killer and the following is why.

    All these “fixes” for the 99% are pointless because they do not address the fundamental problem. Lookup “Quantitative Easing” on WIKI. The first sentences should say that it’s used to increase money supply. But in our case it’s also a question of if the banks are lending that money.

    The QEs drove inflation faster in China and Brazil than in the US which shows how the debt is destroying the internal money supply. This effect is the proof in the pudding that our borrowing is now hurting more than it helps.

    Increasing money supply by reducing the deficit and debt would go a long way. Increased money supply is associated with increasing labor demand.

    Increased labor demand is associated with higher wages which is what helps drive inflation thus the connection between printing money and inflation. Bernanke is simply keeping up the money supply to adjust for the mad borrowing of Congress. I say this as a Libertarian that the Fed is doing the right thing.

    The other “fixes” do nothing to fix the underlying problem of low wages. Taking money from the CEO will only create a few jobs just before they’re destroyed. It’s a tactic that will buy the politicians more time to line their pockts.

    Increasing minimum wage without increase the money supply appropriately, will literally destroy jobs by moving the money from new jobs or layoff to those that already have jobs. That’s why it’s call a job killer. It does not fix the underlying problem and simply redirects the current money supply. It will hurt those more that in the worst situations already.

    For a healthy economy, fix the underlying problem. Right now, before the ACA, 70% of GDP is government spending and is consuming the private sector.

    The private sector needs it’s money supply back now.

  • Chemist150

    In short term:

    1. consider money supply as constant
    2. QE constant
    3. Sequestration allowed more money to remain in private sector thus, temporarily boosting internal money supply.
    4. labor demand is boosted and unemployment drops with the increased internal money supply.
    5. wages increase with labor demand.

    Long term:
    1. debt continues and drives down money supply.
    2. labor demand drops with decreasing money supply.
    3. wages drop with decreasing labor demand
    4. increase in minimum wage will only redistribute current money supply and literally destroy jobs without an appropriate boost in money supply

    It’s temporary. The underlying cause has not been fixed. The internal money supply is being destroyed through borrowing and QE is maintaining the internal money supply to prop up employment and wages.

    The sequestration provided a reprieve but it’s not lasting unless Congress continues.

    • zorgparts

      Economics is a social science. It tells stories after the fact and has in its tools chest something called Mathiness. Bankers employ “quants” and we have become habituated to accepting tall tales littered with econ-jargon as real.

      The banks have socialized their risks/costs and privatized the profits. They have done this by driving the politicians and the agencies that are supposed to be providing oversight.

  • Chemist150

    I find it curious that those that hate big corporations would point to mega corporations like McDs and say they’re making record profits and force minimum wage up with zero thought about how they’re able to make profits because of their size and the policies that mega corporations can handle, do in fact hurt small business giving mega corporations the advantage.

    Maybe McDs could handle a higher wage but it might help McDs grip when the Mom & Pop burger joint is put out of business or help Walmart when the indie clothing shop is put under.

    Increased minimum wage will favor mega stores and help their takeover of society.

    • zorgparts

      They have already taken over.

      • Chemist150

        No reason to empower them more.

  • Kristine Van Dusen

    How is it that the same people who oppose government intervention via raising the minimum wage can advocate solving the problem through tax credits, government hiring, and poverty relief programs? Tax dollars are required for those solutions. Are you against increased government spending/government expansion or not? Or is that just the case when it doesn’t conflict with business interests?

    • Chemist150

      I cant make a point between the poverty relief programs vs. minimum wage hikes but the others are questionable.

      When minimum wage is raised with a troubled money supply, you’re
      redistributing that troubled money supply. It will be taken from the
      most vulnerable to be given to others. It will not hurt the rich guy
      like McDs and Walmart. It will hurt the mom & pop shops who can’t
      do the volume to reduce prices.

      When the economy is healthy and the internal money supply is good, minimum wage can be increased within reason but when the money supply is troubled, it hurts more. Just like the immigration issue brought up by another listener.

      When giving money to the poor through welfare programs & given their income, their tax liability is low. Say they pay no income tax and receive $100 for food. They pay 10% sales tax and the other 90% go back into the private sector. Money in the private sector is good for employment. Because of how much is returned to the private sector vs. other methods, it’s a good choice and a good use of money. However, it should be limited and scaled by what they think the level of benefits should be in a healthy economy.

      However, employing a guy at 60+K to pave a road or whatever a job might be does less. The average fed tax is ~30% (28% I believe) and state and local spending is ~10% & ~20% respectively through taxes and fee. This means that someone collecting a government paycheck or grant can be paying 50% of that back to taxes and if they save for retirement it could add another 10%. Thus, maybe only 40% makes it back to the private sector. This is bad and will not boost anything. This method makes no sense and wastes money.

      • TrainedHistorian

        This analysis grossly exaggerates the money supply as a factor in economic living standards and growth. money supply adjustment is tool that can be used around the edges of the economy; it is not central and does not by itself determine economic growth. The center of the real economy is such factors who works, at what, with what kind of capital i.e. productivity, labor supply, capital investment, etc. Productivity and capital formation have been rising for the last thirty years, but US median real wages have not. If you have rising productivity but stagnant or falling real wages, then labor supplygrowth is excessive relative to economic growth. When labor supply is excessive relative to growth levels, the gains from productivity will go to capital owners rather than laborers. The so-called “Left” (actually pseudo-Left) likes to complain about this, but the key practical measure.they could take to improve labor’s position– curtailing lower-skill immigration–is anathema to them for poliitical and demographic reasons. So US labor will continue to lose ground to capital.owners for the foreseeable future.

        • Chemist150

          If you look up QE on Wikipedia, it previously stated in the first sentence that it was used to increase money supply. Now you need to read further.

          I’ll not argue that there are other mismanaged policies but money supply is the most fundamental of the mismanaged policies and is outright ignored by too many politicians. Limiting immigration is a tool and a bandaid. It should be used to manage the economy and is but it’s a variable and not the underlying cause of the current struggling of the economy.

          In the time frame that you were looking at, the federal spending increased disproportionately. It really began with Reagan but he realized that he was screwing up by his second term when he was selling “trickle down”. That began to work but then was immediately destroyed when Bush entered office. It was no longer a true “trickle down” economy. It was a bleeding out economy by borrowing so much from China.

          If you look at the Clinton administration when they finally balanced the budget and returned to a true “trickle down” economy, it led to the lowest unemployment in decades and thus wages increased. The proof is in the pudding. Not sending the money supply to debtors allows the private sector to use that money. In the time frame you mentioned, spending has been increasing disproportionately.

          It’s a function of increasing money supply but it’s also a function of “internal money supply” as I refer to it. We have a working money supply but it’s leaving faster than we were printing it.

          Improving labor conditions require more jobs, more jobs require more money (i.e. money supply).

          Business leaders go where the money is. Borders do not restrict big business like it does the worker. If the money goes to China, they do business in China and become richer while the US worker is stuck in the US with no job or doing the job that supplies China enabling them to make money for the CEO. The money needs to come back. Simply limiting what a CEO makes will do nothing but curb it for a short time before the same bad policy continues destroying the workers position.

  • Garrett Riegg

    This discussion ignores the benefits that low-wage workers get: food stamps $290 plus earned income credit $2,000 per year , plus Medi-Cal, etc. They really “earn” almost double what their wage is !! These subsidies are part of the picture: the real minimum wage is $13.50 per hour already.

  • ldemelis

    ALEC is facing a funding crisis from some of its corporate donors, because of its support for state stand-your-ground laws.

  • Garrett Riegg

    If you raise the minimum wage, all wages have to go up or no one will want a better job ! That will mean great inflation and we all lose.

  • amyj1276

    Ha! Next Michael Strain will tell us that it will all eventually trickle down. I trust research from the AEI as much as I trust research from Heritage, which is to say about as much as I trust research from unpublished undergrads. When the conservative research all has the same talking points and all go against all other research done in the world, it’s hard to not laugh at how much Mr. Strain seems to be able to talk with a straight face.

  • Kitty Whiteside

    I’m stunned that Michael Krasny has never heard of ALEC! It is an organization synonymous with the Koch name.

  • LeslieR_TD

    ALEC is dangerous because corporations and politicians create draft legislation without public input during their sessions. The legislation is then presented to legislators with minimal disclosure of its origins and is accepted without full transparency of its goals. Privatizing prisons is a well known issue.

  • Elizabeth Young

    If the speaker do not know about Alice (spelling?) has lost credibility. How could they NOT know that Alice members are writing, not influencing, legislation? Countless states have passed the same bills written by Alice. Bills that take away our rights as citizens.

  • Steve

    No one has yet mentioned indexing. If and when the minimum wage is raised, it should be indexed to inflation so that we won’t have to keep having the same political battle just to keep pace.

  • R.j. Zar

    Increase wages and the corporations will raise costs so as to maintain their profit margins and executive salaries. Nothing will change.

  • erictremont

    It is questionable whether the empirical studies showing a small impact of minimum wage increases on employment that Ms. Allegretto just cited are relevant to the current proposals to raise the federal minimum wage from $7.25 per hour to $12.00 per hour or more. We don’t have any experience with a increase in the federal minimum wage of that magnitude and thus nobody knows what the employment impact might be.

    • zorgparts

      An even bigger minimum pay increase at Walmart would result in a per year increase of $14 for shoppers.

      1. Questioned by who, you? Are you a majority share holder of Walmart or McDonalds? Why are you worried about a corporation instead of the actual people who work there?

      2. Federal policy is working great for corporations it needs to start leaning towards people who can’t afford to retain K street firms.

      3. The biggest political swindle in America is that people’s ideological positions that are counter to their own interests.

      • Chemist150

        Please remember to keep the mom & pop shops in mind. The reason the mega corporations can make big profits is volume. Increasing the cost of business hurts the little guy the most and actually gives an advantage to the small guy.

        Frankly, the mega corporations could probably already price out the small guy, increased minimum wage will help them gain the monopolies that they want.

      • erictremont

        No, I am not a Wal-Mart or McDonalds shareholder. I would not be opposed to a hike in the minimum wage to $15 if someone can present a credible analysis that it will not have unintended consequences. Perhaps you are correct and a large, profitable corporation like Wal-Mart can absorb a big increase in the minimum wage, but I don’t think its reasonable to assume that would necessarily be true for all firms that currently pay at or near the minimum wage. For example, I suspect that car wash operations are usually owned and operated by family owned businesses that operate on a fairly modest profit margin, and I doubt if they could absorb a doubling of the minimum wage. And they also have the ability to install automation to reduce their use of human labor and thus offset the effects of a higher minimum wage.

  • Ben Rawner

    How about forcing any and all American companies to adhere to American labor standards even outside this nation. That would make American workers more competitive if not an edge.

    • Bob Fry

      How about free trade agreements ONLY with countries that have similar labor and environmental laws as the US?

    • Chemist150

      I actually emailed Barak, Boehner, and Cantor on that a few years back. I should have included other leaders but some don’t want to hear from you if you’re not in their district. I was targeting leaders.

      Some companies do belong to organizations of labor rights in imports and use manufacturers in their approved list. However, I don’t know how valid the organizations are. I have my doubts about quality.

      It looks like they may be working in environmental standards. However, the US was having trouble with getting South Korea to allow US car imports but the US environmental standards were too low for South Korea. Funny huh? China is obviously opposite but South Korea was doing what you’re suggesting.

  • Kristine Van Dusen

    The greed and short-sightedness of the pro-corporate argument here is stunning. By underpaying workers they are taking money directly out of the pockets of the bulk of their customers. Who is going to buy all those robot-made hamburgers?

  • Kristine Van Dusen

    Costco has shown that the bottom line can actually be improved by treating workers better.

  • Lisa

    For those who are not familiar with ALEC, they are the American Legislative Exchange Council, a very powerful group of people. Bill Moyers did a good documentary on 9/28/12: “United States of ALEC” “How corporations and state legislators are colluding to write laws and remake America, one statehouse at a time”

  • The cost of living in USA is too high thus pricing us out of the world marketplace. That’s another way to look at it. Our healthcare is too expensive. Housing is real high (good idea that you have the KQED series called Priced Out on Bay area housing). Either the lower part of the pay scale needs to be raised, or (looking at it another way) the high costs of living need to come down.

    Your guest from American Enterprise Institute had an interesting concept of helping workers in other ways besides the minimum wage that could have been explored further. Maybe more subsidized housing and healthcare, for instance. The Affordable Healthcare Act is one attempt at this.

    • jurgispilis

      Just think, if you don’t have to live in the US, and you don’t get your healthcare in the US, you are much more competitive against US workers for job opportunities in the US.

  • Sharon Blake

    It’s crazy listening to discussion of 8% unemployment in California without mention of the toll illegal aliens take on the state’s citizens. I live in Novato and daily drive through a phalanx of Hispanic men lining Redwood Blvd. waiting to be hired by someone willing to violate the federal immigration law. We live in a state of lawlessness.
    According to the Public Policy Institute of California:
    “About one in ten workers in California is an undocumented immigrant.
    California’s labor force includes about 1.85 million undocumented immigrants—along with Nevada, it has the highest statewide concentration of undocumented workers (10%) in the U.S. Undocumented immigrants work disproportionately in the farming, construction, production, services, and transportation/materials moving industries.”

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