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Progressives Should Support Policies That Help All Working-Class People

Monday, March 06, 2017 By Dean Baker, Truthout | Op-Ed
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Farmworkers remove weeds from an onion field near Stratford, California, on March 15, 2014.  (Photo: Matt Black / The New York Times)Farmworkers remove weeds from an onion field near Stratford, California, on March 15, 2014. (Photo: Matt Black / The New York Times)

In the months following the election there has been a strange debate about whether Democrats should try to recapture the white working class voters who supported Donald Trump. Those arguing against such an effort have said that there is no reason to try to appeal to voters who supported a racist, xenophobic and misogynist candidate.

While no one should have empathy for the hatred expressed by Donald Trump and many of his supporters, there is a separate policy issue. The question is whether progressives should look to support policies that help the working class.

Note that I said "working class," not "white working class." It's true that many white manufacturing workers have been hit badly by changes in the economy over the last four decades, most notably the rise in the trade deficit and the decline in unionization. But millions of African-American, working-class workers were also hit by these same trends, as were working-class Latinos and Latinas, although fewer Latinos and Latinas were working in factories three decades ago.

Workers without college degrees have been losers in the last three decades regardless of their race or ethnic background. This is a simple and important point -- and has been noted by a number of critics since the election. However, it is widely misunderstood.

In recent months there actually have been several pieces in major news outlets arguing the opposite: that somehow white workers are unique in losing out over this period. These analyses, that ostensibly showed that African Americans and Latinos and Latinas had done better in the labor market than whites, either failed to control for the aging of the population or relied on picking a single month of highly erratic data rather than a longer time period. Any honest account shows that workers without college degrees have faced a weak labor market and stagnant wages over the last four decades.

This point is important because, just as is the case with whites, most African-American workers do not have college degrees nor do most Latino, Latina or Asian workers. Policies that help workers without college degrees will benefit most non-white workers. This means that even if we didn't give a damn about the white working class voters that supported Trump, we should still be promoting policies that reverse the massive upward redistribution we have seen over the last four decades.

On trade this means policies designed to reduce the trade deficit. This issue here is not "winning" in negotiations with our trading partners. It's a question of priorities in trade negotiations.

Rather than demanding stronger and longer protections for Pfizer's patents and Microsoft's copyrights, we should be getting our trading partners to support a reduction in the value of the dollar in order to make our goods and services more competitive. If we can reduce the trade deficit by 1-2 percentage points of GDP ($180 billion to $360 billion) it will create 1-2 million manufacturing jobs, improving the labor market for the working class.

We should use trade to reduce the pay of doctors and other highly paid professionals. If we open the door to qualified professionals from other countries we can save hundreds of billions of dollars a year on health care and other costs, while reducing inequality.

We should also support policies that rein in the financial sector, such as reducing fees that pension funds pay to private equity and hedge funds and their investment advisors. This money comes out of the pockets of the rest of us and goes to some of the richest people in the country. A financial transactions tax, which could eliminate tens of billions of dollars spent each year on useless trades, would also be a major step towards reducing inequality.

Policies that put downward pressure on the pay of CEOs and other top executives would also help the working class. This could mean, for example, making it easier for shareholders to reduce CEO pay. In the nonprofit sector we could place a cap on the pay of employees for anyone seeking tax-exempt status. Universities and nonprofit charities could still pay their presidents whatever they wanted; they just wouldn't get a taxpayer subsidy.

There is a long list of market-based policies that we can pursue to reverse the upward redistribution of the last four decades. (For the fuller list see Rigged). These are policies that we should pursue because it is the right thing to do. It will help the working class of all races, including the white working class.

These policies may not get the white working class to vote for progressive candidates instead of racist demagogues like Donald Trump. But it is worth noting that almost all the people who insist that such policies won't matter also assured us that Hillary Clinton would be elected president.

There is one other point on these policies that is worth mentioning. While Trump won among white college graduates, his margin among these voters was much smaller than his margin among whites without college degrees.

If the growth in college graduation rates had grown at the same rate since 1979 as they had in the years from 1959 to 1979, there would have been 10.4 million more white college graduates voting last November and 10.4 million fewer whites without college degrees. If these people split their votes in the same ratio as other white college graduates and non-graduates, it would have increased Hillary Clinton's popular vote margin by more than 1.8 million votes, virtually guaranteeing her a solid victory in both the popular vote and the Electoral College.

This is not to say that those who have college degrees are automatically more likely to vote a certain way. Whatever the implications for winning elections, progressives should support policies that reverse upward redistribution because it is the right thing to do.

Copyright, Truthout. May not be reprinted without permission.

Dean Baker

Dean Baker is a macroeconomist and codirector of the Center for Economic and Policy Research in Washington, DC. He previously worked as a senior economist at the Economic Policy Institute and an assistant professor at Bucknell University. He is a regular Truthout columnist and a member of Truthout's Board of Advisers.

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Progressives Should Support Policies That Help All Working-Class People

Monday, March 06, 2017 By Dean Baker, Truthout | Op-Ed
  • font size decrease font size decrease font size increase font size increase font size
  • Print

Farmworkers remove weeds from an onion field near Stratford, California, on March 15, 2014.  (Photo: Matt Black / The New York Times)Farmworkers remove weeds from an onion field near Stratford, California, on March 15, 2014. (Photo: Matt Black / The New York Times)

In the months following the election there has been a strange debate about whether Democrats should try to recapture the white working class voters who supported Donald Trump. Those arguing against such an effort have said that there is no reason to try to appeal to voters who supported a racist, xenophobic and misogynist candidate.

While no one should have empathy for the hatred expressed by Donald Trump and many of his supporters, there is a separate policy issue. The question is whether progressives should look to support policies that help the working class.

Note that I said "working class," not "white working class." It's true that many white manufacturing workers have been hit badly by changes in the economy over the last four decades, most notably the rise in the trade deficit and the decline in unionization. But millions of African-American, working-class workers were also hit by these same trends, as were working-class Latinos and Latinas, although fewer Latinos and Latinas were working in factories three decades ago.

Workers without college degrees have been losers in the last three decades regardless of their race or ethnic background. This is a simple and important point -- and has been noted by a number of critics since the election. However, it is widely misunderstood.

In recent months there actually have been several pieces in major news outlets arguing the opposite: that somehow white workers are unique in losing out over this period. These analyses, that ostensibly showed that African Americans and Latinos and Latinas had done better in the labor market than whites, either failed to control for the aging of the population or relied on picking a single month of highly erratic data rather than a longer time period. Any honest account shows that workers without college degrees have faced a weak labor market and stagnant wages over the last four decades.

This point is important because, just as is the case with whites, most African-American workers do not have college degrees nor do most Latino, Latina or Asian workers. Policies that help workers without college degrees will benefit most non-white workers. This means that even if we didn't give a damn about the white working class voters that supported Trump, we should still be promoting policies that reverse the massive upward redistribution we have seen over the last four decades.

On trade this means policies designed to reduce the trade deficit. This issue here is not "winning" in negotiations with our trading partners. It's a question of priorities in trade negotiations.

Rather than demanding stronger and longer protections for Pfizer's patents and Microsoft's copyrights, we should be getting our trading partners to support a reduction in the value of the dollar in order to make our goods and services more competitive. If we can reduce the trade deficit by 1-2 percentage points of GDP ($180 billion to $360 billion) it will create 1-2 million manufacturing jobs, improving the labor market for the working class.

We should use trade to reduce the pay of doctors and other highly paid professionals. If we open the door to qualified professionals from other countries we can save hundreds of billions of dollars a year on health care and other costs, while reducing inequality.

We should also support policies that rein in the financial sector, such as reducing fees that pension funds pay to private equity and hedge funds and their investment advisors. This money comes out of the pockets of the rest of us and goes to some of the richest people in the country. A financial transactions tax, which could eliminate tens of billions of dollars spent each year on useless trades, would also be a major step towards reducing inequality.

Policies that put downward pressure on the pay of CEOs and other top executives would also help the working class. This could mean, for example, making it easier for shareholders to reduce CEO pay. In the nonprofit sector we could place a cap on the pay of employees for anyone seeking tax-exempt status. Universities and nonprofit charities could still pay their presidents whatever they wanted; they just wouldn't get a taxpayer subsidy.

There is a long list of market-based policies that we can pursue to reverse the upward redistribution of the last four decades. (For the fuller list see Rigged). These are policies that we should pursue because it is the right thing to do. It will help the working class of all races, including the white working class.

These policies may not get the white working class to vote for progressive candidates instead of racist demagogues like Donald Trump. But it is worth noting that almost all the people who insist that such policies won't matter also assured us that Hillary Clinton would be elected president.

There is one other point on these policies that is worth mentioning. While Trump won among white college graduates, his margin among these voters was much smaller than his margin among whites without college degrees.

If the growth in college graduation rates had grown at the same rate since 1979 as they had in the years from 1959 to 1979, there would have been 10.4 million more white college graduates voting last November and 10.4 million fewer whites without college degrees. If these people split their votes in the same ratio as other white college graduates and non-graduates, it would have increased Hillary Clinton's popular vote margin by more than 1.8 million votes, virtually guaranteeing her a solid victory in both the popular vote and the Electoral College.

This is not to say that those who have college degrees are automatically more likely to vote a certain way. Whatever the implications for winning elections, progressives should support policies that reverse upward redistribution because it is the right thing to do.

Copyright, Truthout. May not be reprinted without permission.

Dean Baker

Dean Baker is a macroeconomist and codirector of the Center for Economic and Policy Research in Washington, DC. He previously worked as a senior economist at the Economic Policy Institute and an assistant professor at Bucknell University. He is a regular Truthout columnist and a member of Truthout's Board of Advisers.