Jeff Faux on Brad DeLong’s Defense of NAFTA

By Jeff Faux

Brad DeLong recently criticized an op-ed I wrote about the negative impact of the twenty-year-old North American Free Trade Agreement on American workers. The stakes here are higher and more immediate than the rehash of an old ideological dispute. This is not so much about the past as about the future. Corporate lobbyists are pushing President Obama and congressional Republicans to pass the NAFTA-like eleven-country Trans-Pacific Partnership” (TPP)—right after the November election. Since it took effect in 1994, NAFTA has been the template for the subsequent series of trade agreements that have accelerated the globalization of the U.S. economy. But its failure to deliver as promised has soured the public and many in Congress on so-called “free trade.” Getting lawmakers to swallow the TPP will be easier if its promoters can somehow make lemonade out of the NAFTA lemon. To start with, DeLong fails to tell the reader that he is evaluating a law he helped to produce. He worked on NAFTA when he was a deputy assistant secretary in Bill Clinton’s Treasury Department...

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New Book: Private Equity at Work, When Wall Street Manages Main Street

By Eileen Appelbaum and Rosemary Batt

Prior research on private equity has focused almost exclusively on the financial performance of private equity funds and the returns to their investors. Private Equity at Work provides a new roadmap to the largely hidden internal operations of these firms, showing how their business strategies disproportionately benefit the partners in private equity firms at the expense of other stakeholders and taxpayers. In the 1980s, leveraged buyouts by private equity firms saw high returns and were widely considered the solution to corporate wastefulness and mismanagement. And since 2000, nearly 11,500 companies—representing almost 8 million employees—have been purchased by private equity firms. As their role in the economy has increased, they have come under fire from labor unions and community advocates who argue that the proliferation of leveraged buyouts destroys jobs, causes wages to stagnate, saddles otherwise healthy companies with debt, and leads to subsidies from taxpayers. Appelbaum and Batt show that private equity firms’ financial strategies are designed to extract maximum value from the companies they buy and sell, often to the detriment of those companies and their employees and suppliers. Their risky decisions include buying companies and extracting dividends by loading them with high levels of debt and selling assets. These actions often lead to financial distress and a disproportionate focus on cost-cutting, outsourcing, and wage and benefit losses for workers, especially if they are unionized.

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EPI | Over 1/4 of men 25-34 years old earned poverty-level wages in 2013

By Elise Gould

In honor of Father’s Day, we looked at the wages of male workers at the prime age for raising young children. While women have always been more likely to earn poverty-level wages than men (wages less than what a full-time, year-round worker needs to sustain a family of four at the official poverty threshold), women have seen some improvement over the last three-and-a-half decades, as their rates of poverty-level wages have declined, especially among those 35 to 44 years old. On the other hand, men between 25 and 44 have seen precipitous increases in the share working at such low wages, with the share more than doubling between 1979 and 2013. This trend has been particularly stark among the younger age group. The figure below shows the share of male and female workers between 25 and 34 and between 35 and 44 years old who earn poverty-level wages. In 2013, that hourly wage was $11.49. Over one-fourth of men 25-34 years old earned poverty-level wages in 2013. The bottom line is there are a great many adults, and an increasing share of men, stuck in very low-paying jobs, and they are the same people who are responsible for raising the next generation.

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Heidi Shierholz: Still No Jobs for More Than 60 Percent of Job Seekers

By Heidi Shierholz

The Job Openings and Labor Turnover Survey (JOLTS) data released this morning by the Bureau of Labor Statistics showed that job openings increased by 60,000 in January, bringing the total number of job openings to 4.0 million. In January, the number of job seekers was 10.2 million (unemployment data are from the Current Population Survey). Thus, there were 10.2 million job seekers and only 4.0 million job openings, meaning that more than 60 percent of job seekers were not going to find a job in January no matter what they did. In a labor market with strong job opportunities, there would be roughly as many job openings as job seekers. We are not in a strong labor market. Furthermore, the 10.2 million unemployed workers understates how many job openings will be needed when a robust jobs recovery finally begins, due to the existence of 5.7 million would-be workers who are currently not in the labor market, but who would be if job opportunities were strong. Many of these “missing workers” will become job seekers when we enter a robust jobs recovery, so job openings will be needed for them, too.

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Mark Weisbrot on Venezuela’s Struggle - Widely Misrepresented, Remains a Classic Conflict Between Right and Left

By Mark Weisbrot

The current protests in Venezuela are reminiscent of another historical moment when street protests were used by right-wing politicians as a tactic to overthrow the elected government. It was December of 2002, and I was struck by the images on U.S. television of what was reported as a “general strike,” with shops closed and streets empty. So I went there to see for myself, and it was one of the most Orwellian experiences of my life. Only in the richer neighborhoods, in eastern Caracas, was there evidence of a strike, by business owners (not workers). In the western and poorer parts of the city, everything was normal and people were doing their Christmas shopping – images unseen in the U.S. media. I wrote an article about it for the Washington Post, and received hundreds of emails from right-wing Venezuelans horrified that the Post had printed a factual and analytical account that breathed air outside of their bubble. They didn’t have to worry about it happening again. The spread of cell-phone videos and social media in the past decade has made it more difficult to misrepresent things that can be easily captured on camera. But Venezuela is still grossly distorted in the major media. The New York Times had to run a correction last week for an article that began with a statement about “The only television station that regularly broadcast voices critical of the government …” As it turns out, all of the private TV stations “regularly broadcast voices critical of the government.” And private media has more than 90 percent of the TV-viewing audience in Venezuela. A study by the Carter Center of the presidential election campaign period last April showed a 57 to 34 percent advantage in TV coverage for President Maduro over challenger Henrique Capriles in the April election, but that advantage is greatly reduced or eliminated when audience shares are taken into account. Although there are abuses of power and problems with the rule of law in Venezuela – as there are throughout the hemisphere– it is far from the authoritarian state that most consumers of western media are led to believe. Opposition leaders currently aim to topple the democratically elected government – their stated goal – by portraying it as a repressive dictatorship that is cracking down on peaceful protest. This is a standard "regime change" strategy, which often includes violent demonstrations in order to provoke state violence.

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Michael D. Yates on Teaching Workers

By Michael D. Yates

Karl Marx’s famous dictum sums up my teaching philosophy: “The philosophers of the world have only interpreted the world in various ways; the point is to change it.” As I came to see it, Marx had uncovered the inner workings of our society, showing both how it functioned and why it had to be transcended if human beings were to gain control over their lives and labor. Disseminating these ideas could help speed the process of human liberation. From a college classroom, I thought that I could not only interpret the world, I could indeed change it.

Thinking is one thing; the trick is bringing thoughts to life. How, actually, does a person be a radical teacher? How, for example, can students be shown the superior insights of Marxian economics in classes that have always been taught from the traditional or neoclassical perspective—taught, in fact, as if the neoclassical theory developed by Adam Smith and his progeny is the gospel truth? My college expected me to teach students the “principles” of economics: that people act selfishly and independently of one another, that this self-centeredness generates socially desirable outcomes. And further, that capitalism, in which we, in fact, do act out of self-interest, is therefore the best possible economic system. Had I refused to do this and taught only Marxian economics, I doubt I could have kept my job.

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