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Labor
Party Press
News & Short Takes
You
Had to Be There
Holly Bailey of the Center for Responsive
Politics provided amusing daily reports from the Democratic
National Convention in Los Angeles detailing the obscene level
of influence exerted there by corporate interests.
A high point was "Mardi Gras Goes
Hollywood," a reception honoring Sen. John Breaux of
Louisiana. There, people like Labor Secretary, Alexis Herman
and several Democratic members of Congress, "drank Pat O’Brien
Hurricanes and snacked on oysters, gumbo and shrimp,"
while Mardi Gras floats imported from New Orleans drifted by
delivering handfuls of beads and medallions, including one
carved into a likeness of Breaux.
The fete was sponsored by AT&T, BellSouth,
SBC Communications, and Merck — all, notes Bailey,
"companies with pending interests before the Senate
Finance and Commerce Committees, of which Breaux is a
member." The next day, the convention adopted a platform
plank calling for "breaking the link between special
interests and political influence."
See the Center for Responsive Politics’
informative website: www.opensecrets.org.
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Taxing
Moves by Congress
Citizens for Tax Justice recently did an
analysis of how Congressional legislation passed or pending in
2000 so far would affect our tax bill overall. Included in the
summary are the marriage penalty reduction bill and the estate
tax repeal, both passed by House and Senate; tax cuts in the
House-passed minimum wage bill; repeal of the 3 percent
federal telephone tax; the pending reduction in income taxes
on Social Security benefits for better-off retirees (the top
23 percent of SS beneficiaries); and the House-passed
deduction on health and long-term care insurance.
If all this legislation passed (which,
fortunately, it won’t), it would have these effects:
Those in the top one percent income group,
earning $319,000 or more, would see a 36 percent tax cut
yielding $23,331 annually. The middle 20 percent of earners
would get a 6 percent tax cut, netting them $193. The bottom
fifth, earning less than $13,600 a year, would get a 1.2
percent tax cut, amounting to a pathetic $37.
By far the most damaging legislation proposed
this year was the estate tax repeal, which would do nothing
for the great majority of us, while providing a 25 percent tax
cut for the super rich.
Visit the Citizens for Tax Justice website at:
www.ctj.org
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Workers
Comp Rip-off
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Shirley Mack holds medication
she uses to treat pain from repetitive stress injuries she got
working at a chicken processing plant in Fayetteville, NC. Workers comp doesn’t come close to
compensating for such disabilities. Photo © 2000 Earl Dotter, Impact Visuals |
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Workers Compensation has never been a great
deal. But according to a study by the National Academy of
Social Insurance, its value is only diminishing. Benefit
payments went down relative to wages in 1998 for the sixth
consecutive year. Costs for employers also declined: as a
share of payroll, workers comp benefits declined by a steep 35
percent between 1992 and 1998.
One reason, says the report, is the
"active management of medical care" and tightening
eligibility requirements for workers comp benefits.
Translation: workers get shafted, employers walk off with the
money.
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The
Minimum Wage Case
Jared Bernstein and John Schmitt of the
Economic Policy Institute recently took on those familiar old
arguments against a higher minimum wage. They note that:
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There’s no evidence that teenagers or
adults without a high school diploma lost work as a result of
the 1996–97 minimum wage increases.
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Analyses of the minimum wage’s impact on
young workers have never shown the predicted large job-loss
effects.
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The small negative effects on employment
found in past analyses diminish over time and are no longer
statistically significant.
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63 percent of the gains from a one-dollar
increase in the minimum wage accrue to working households in
the bottom 40 percent of the income distribution.
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Of the 8.4 million workers (age 18 to 64)
whose wages and incomes would increase with a one-dollar raise
in the minimum wage, 2.7 million (32 percent) are the parents
of 4.7 million children. Of the 2.7 million parents who earned
at or near the current minimum wage in 1999, 63 percent had
family incomes below $25,000.
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71 percent of minimum wage workers are
adults, age 20 and up, and a disproportionate number are women
and people of color. Almost half of people earning the minimum
wage work full-time.
For more info: www.epinet.org.
Labor Party addendum: A one-dollar increase in
the minimum wage does not a livable income make. We support a
$10.60 minimum wage indexed to inflation.
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Let’s
Be Frank, World Bank
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Nairobi, Kenya: World Bank and
IMF policies have not eased poverty here. Photo
©2000 Sean Sprague. Impact Visuals |
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Back in March, the World Bank released a paper
called "Growth is Good for the Poor." In it, World
Bank economists argued that "anyone who cares about the
poor" should favor the "growth enhancing
policies" imposed by corporate-backed global institutions
like the World Bank and International Monetary Fund. Chief
among those policies: forcing poor nations to adopt austere
antiworker budgets ("fiscal discipline") and
allowing corporations to control the rules of global trade and
investments ("openness to international trade").
In August, economists from the
Washington-based think tank Center for Economic and Policy
Research returned the World Bank salvo with a paper of its own
entitled "Growth may be good for the poor — but are IMF
and World Bank policies good for growth?"
No one would deny that economic growth
benefits the world’s poor, argue authors Mark Weisbrot, Dean
Baker, Robert Naiman, and Gila Neta. "The more important
question is: What has caused the dramatic slowdown in economic
growth over the last two decades, and how much of it is
attributable to the policies of the IMF and the World
Bank?"
The economists go on to document the downward
slide in economic growth that has made life so hard for
working and poor people in less developed nations. For
instance, in Latin America, per capita economic output rose
fairly quickly from 1960 to 1980. But since then, it’s only
risen about 6 percent. Sub-Saharan Africa grew by 36 percent
in those earlier decades but has fallen 15 percent since 1980.
Only East Asia has seen growth rates accelerate in the past
two decades. Most of that growth has happened in China, where
the World Bank and IMF have little sway.
No need to exempt the U.S. from this pattern,
note the CEPR economists: the real median wage in this country
today is the same as it was 27 years ago. Real wages for the
bottom fifth of the labor force dropped by about 9 percent
between 1973 and 1997. Global policies that allow corporations
to pit workers against one another are partly to blame.
Concludes Weisbrot: "There is no region
of the world that the World Bank and IMF could claim as
success stories for their policies. We need further research
to determine how much these institutions are responsible for
this slowdown in economic growth, a slowdown that hundreds of
millions of people in underdeveloped countries can ill
afford."
The World Bank’s paper is on the web at www.worldbank.org/research. The CEPR paper is at
www.cepr.net.
For more information on CEPR: 1015 18th St., NW, Suite 200,
Washington, D.C. 20036; 202-293-5380; email: cepr@cepr.net.
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Too
Much Power
Front page of Business Week on September 11:
"Too Much Corporate Power?" Inside are the details
of a Business Week/Harris poll which found that:
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72 percent of those surveyed agreed that
business has gained too much power over too many aspects of
American life.
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66 percent agreed that having large profits
is more important to big business than developing safe,
reliable, quality products for consumers.
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73 percent think top executives make too
much money.
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74 percent think business groups have too
much influence over political policy and policymakers.
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