When You Reward Bad Employers, You Get Bad Jobs
When Republicans talk about giving money to the “job creators,” these are the kinds of jobs they’re talking about
After Trumpcare — or was that Ryancare? — crashed and burned, everyone knew what was going to happen next: President Trump would turn his attention to cutting taxes. Alan Rappeport at the New York Times writes that Trump might promote “a big corporate tax cut and possibly an individual tax cut” in order “to get an easy win.”
Trump may have run for office as a populist, but he’s following the same conservative playbook that was written by Ronald Reagan’s team in the 1980s. It’s called trickle-down economics, and it follows three rules:
1. Tax cuts for the rich
2. Deregulation for the powerful
3. Wage suppressions for everyone else
They sell the idea to the American people this way: once we give the so-called “job creators” in the top one percent of the economy a bunch of extra cash, that money will then trickle down to the rest of us, in the form of new jobs and corporate investment in America. Sometimes, when conservative politicians are feeling extra-salty, they’ll even pretend that this theory is science, and they’ll call it “Economics 101.”
Of course, it’s not science. It’s not even basic economics. At our most generous we could call it a theory — and nearly 40 years after Reagan transformed trickle down into Republican doctrine, it’s now a debunked theory. (Here’s a study — one which takes 65 years of data into account — that proves tax cuts don’t cause economic growth.) But this is still standard operating procedure for President Trump and Speaker Ryan; they’re going to trot out the same tired old talking points over the next few weeks as they try to get their pals in the top one percent their bonus checks.
What’s more, trickle down doesn’t even make sense for modern times. Its goals are entirely out of touch with America in 2017. Let me ask you a question: what’s the employment rate in America right now? (Let me Google that for you: as of this month, it’s 4.7 percent.) When he was a presidential candidate, Donald Trump tried to obfuscate the unemployment numbers by calling them “totally fiction” and claiming that the real unemployment number was as high as 42 percent. Of course, once he became president and the numbers stayed low, Trump announced through his spokesman that the numbers “may have been phony in the past, but [they’re] very real now.”
For the record, I believe the unemployment numbers represent something very close to reality. But I also think that the unemployment numbers are measuring employment all wrong. Those numbers are low, but the sentiment about those numbers that Trump played into when he was a candidate was very real: many of those jobs aren’t good jobs. They don’t have benefits. They’re part time. They’re temporary. The wages are low. There’s no room for growth. They’re dead-end jobs where the employers have all the power and workers are disposable. Average Americans understand this, but politicians — including Trump — can’t seem to wrap their heads around it.
See, these are the kind of jobs you get when you support a trickle-down agenda: trickle-down jobs. This Bloomberg Businessweek story by Peter Waldman illustrates the low-quality employment opportunities that arrived in Alabama, Georgia, and Mississippi over the last decade. These jobs pay the kind of minimum wage that most attribute to fast food jobs, they require employees to stay late and work weekends to fill impossible quotas, and they’re incredibly unsafe:
The pressure inside parts plants is wreaking a different American carnage than the one Trump conjured up at his inauguration. OSHA records obtained by Bloomberg document burning flesh, crushed limbs, dismembered body parts, and a flailing fall into a vat of acid. The files read like Upton Sinclair, or even Dickens.
When you slash regulations, you get dangerous workplaces. When you cut taxes, you lose the inspection and worker advocates that government used to employ. And when you let businesses set their own minimum wages, you get predatory employers who pay less than ten dollars an hour to work in these dangerous environments.
On the other hand, we have proof that raising the minimum wage improves family incomes. (Here’s a new report about that.) And we know that high-wage cities like Seattle are thriving with a higher minimum wage. Our lowest-paid residents are making almost twice as much as the entry-level employees at those auto plants in the south, and they’re working in much safer environments.
Here is a fact: someone who earns $14 per hour has more money to spend than someone who makes $8 per hour. Seattle’s minimum-wage employees are spending that money locally, which helps the economy grow. They are the real job creators, because the money they spend inspires employers to hire more workers to meet increased demand. Those workers make good money, which they spend locally, and so on.
Economics isn’t some immutable science. It’s not a law of nature. Economics is a choice — the economy in which you live is the direct result of the choices that you and your neighbors make. Economics is influenced by how you vote, and the policies you support, and the goals you set for your community. Citizens in trickle down economies have chosen for years to encourage the kind of policies that create trickle-down jobs, where workers are tools to be used ruthlessly and then cast aside after they’ve been used up.
People don’t make these choices because they enjoy awful employment opportunities. They vote for policies and politicians who keep their wages low because the trickle down team threatens that if you raise the minimum wage or raise corporate taxes or encourage responsible regulation, employers will move away or automate. (The fact that unemployment numbers are equal or better in high-wage areas indicates that this is a lie.)
But the great thing about America is that you have the freedom to change your mind. It’s possible for these economies to change from low-quality to high-wage. They can start making a series of choices about where they want to live. It’s never too late to embrace a better way.
That better way starts with the realization that President Trump giving tax cuts to the wealthiest Americans is not, and will never be, “an easy win” for the American middle class. Instead, it’s the latest in a long series of bad choices that have led to the destruction of the American jobs contract.
