In a Facebook post by my friend Senator Jamie Eldridge regarding the economic conditions in Massachusetts on how indicators on middle-class income growth, poverty reduction, and the expansion of health insurance coverage show Massachusetts trailing the nation writes: “Luc Schuster, who directs the Boston Indicators project at the Boston Foundation, said the report “demonstrates what many of us have been feeling for years, that while the high-level economic indicators are strong, the benefits have not been broadly shared. We still need to do more to create good-paying jobs and reduce poverty in Massachusetts, while helping residents keep up with rising costs for things like housing, child care, and energy.”
Let’s assume that some Democrat in office is able to wave a magic wand and PRESTO, all the citizens of the Commonwealth who are working at low wage jobs suddenly are accepted to new jobs created by this magic Democrat. Unemployment in the Commonwealth is at 3.5%, meaning 96.5% of us are already working.
When those of us working in poorly paying jobs are somehow, magically transported to “good-paying jobs” who is going to do the jobs that we are already doing?
And Mr. Schuster, please forgive me for singling you out. You are not the only Democrat taking this stand.
Let’s stipulate that you’re not opposed to “good-paying jobs”, and that you are looking for an increase in the minimum wage so that those in their current jobs earn more.
1. What minimum wage meets your criteria?
2. How many of those currently being paid less than that do you think will be given a raise to the new minimum wage?
3. How much are you willing to pay for a steak bomb? Donut and coffee? Home health care for your aging parent or spouse?
Uprated with the caveat that I reject the premise of your third question. Other countries pay better without significant differences in consumer prices.
A lot depends on the answer to #2.
What’s a “living wage” for somebody who lives in Boston, Somerville, or Cambridge where a studio apartment costs more than $1,500/month? The highest number I’ve heard bandied about is $22/hour (I think that came from Elizabeth Warren a few years back). That’s about $3,800/month gross — a first ratio of nearly 40%. Not many banks call that affordable.
I think that the items I mentioned are likely to cost more if the counter help is being paid $22/hour. If the minimum wage is higher, I think it’s more likely.
A higher minimum wage also multiplies the incentive for various process changes that reduce manual labor — more prepackaged sandwiches made in central facilities (and with fewer jobs), more automation, and so on.
I think the OP makes an excellent point and raises legitimate questions. I think the answers are not going to come from bumper stickers and bromides, I think they’re going to come from hard data resulting from complex economic systems.
You’re right that answers won’t come from simplistic solutions like raise minimum wage to $15 (or 22 or even 30). As long as some people are paying to rent a studio apartment for the same amount that they could buy a 3 bedroom house in Oxford Mass. And that wide disparity is only within this state, on a national level the urban/rural divide is wider.
If you’re comfortable with characterizing it as an urban/rural divide, then I hope you’re also comfortable with white/non-white.
I think both are accurate, and neither gets at the cause — extreme wealth concentration. Urban costs are skyrocketing because the wealthy choose to live in cities, and the concentration (based on area) drives out everyone but the wealthy. A wealthy family can buy an estate in rural Massachusetts for a few million — there are still plenty of properties nearby for much less.
I think that so long as our wealth concentration is as extreme as it is, no minimum wage or jobs program is going to make even a measurable dent in the suffering that results.
Raising the minimum wage is irrelevant to solving our wealth concentration issues. The only way to do the latter is to take some wealth from the uber wealthy and distribute that wealth among the rest of us — certainly for newly-generated wealth, and most likely for existing wealth as well.
Efforts to raise the minimum wage, increase access to education, and provide health care are crucially important and urgently needed, because they address some of the most acute symptoms.
We need to focus much more effort on solving the problem, even while we address its immediate symptoms.
I am not sure how Luc is arguing anything differently than what the OP or most of us have been saying for years here. The narrative fed to us by Baker, DeLeo, Walsh, and Globe is that the economy is perfect and all government needs to do is step out of the way while paradoxically sending subsidies it’s way. This neglects long term needs in the state that continue to go unaddressed.
Our problem is not lack of opportunity but lack of equity. Lack of equity in jobs and educational opportunity, lack of equity in transit access, lack of equity in health care and housing affordability. This lack of equity is what makes the narrative my friend Luc Schuster is pushing against so false to begin with. I do not see him advancing it but critiquing it with data in a reality based fashion.
For me I’m not so concerned about the racial aspects and I wonder when the categories will break down on their own. I can remember when inter-religious marriages were actually questioned. Now in my own extended family there are inter racial marriages. Tiger Woods’ kids are more Scandinavian than they are black. The current US Open winner is as much Haitian as Japanese.
Asian Americans average wages are higher than whites, according to Wikipedia. Blacks are lower, but do they exclude mixed race people from these statistics? Oprah, Tyler Perry, Michael Jordan, Barack Obama, did you see Aretha Franklin’s estate was 60 mill? I think the system is working fairly well actually. I’ve wanted to live directly on the ocean and I can, it will just have to be in northern Maine or Southern Georgia and not in Newport.
I encourage you to inform yourself with actual statistics (take a refresher course on line if needed) rather than depending on cherry-picked examples. The examples you’ve given are like citing a lottery winner as evidence that playing the lottery is a wise investment strategy.
When you write “I think the system is working fairly well actually”, it leads me to wonder what benchmark you use to to derive that result.
By what standard do you measure how well the system is working?
” (take a refresher course on line if needed) ” this cheapshot is below your usual discourse.
I’ve taken stats in college and know how data can be manipulated by categorizing things different ways. So are Tiger’s kids black, white, asian or just very well off?
My point was the categories that people from the herd use to fuel their ressentiment are fading. Watching the success of people who 50 years ago wouldn’t have had the same opportunities is enough to show me the system is moving in the right direction. I’m thinking Jackie Robinson’s success vs Michael Jordans
“Do, do,do lookin’ out my back door”. things are going well and getting better, at least from my perspective anyway.
I apologize for my overly harsh response. I react with impatience to your focus on cherry-picked cases that do little other than demonstrate your bias.
“Categories that people from the herd use to fuel their resentment are fading”? Try selling that story to minority residents of Flint, Chicago, or LA. Neither Jackie Robinson, Michael Jordan, nor any other celebrity of any race is representative of what is happening in our society.
I notice you haven’t answered my question yet, let me try again.
By what standard do you measure how well the system is working?
sometimes I feel anecdotal evidence can make a case
soon to have our first female black Marine general I’m sure she worked very hard for it
@ scott12mass: Perhaps “sometimes”. Not here.
This discussion is about the stark disparity between the very wealthy and everybody else here in Massachusetts. You introduced an urban/rural dichotomy, and I countered with a racial dichotomy. Both are accurate, and each is a symptom of the underlying issue — extreme wealth concentration.
Your focus on cherry-picked anecdotes like Jackie Robinson and Michael Jordan has nothing at all to do with what we’re discussing.
I wonder if the reason you evade my question is that you know as well as I do what the result will be — by pretty much any objective measure, minorities suffer a great deal more than whites in the current Massachusetts economy,
You bring up race and I see that problem disappearing as categories are blurred. You won’t answer how you would categorize Tiger Woods’ kids. Yes, in the past blacks have been screwed by the system run by Democrats and Republicans, but in the future the argument won’t have a racial tinge it will just be the good old-fashioned rich/poor argument common in societies with no racial diversity.
@scott12mass: Let me be more explicit about my refusal to answer your question about the children of Tiger Woods: It’s a question with a racist premise that is irrelevant to the discussion. I’m reminded of the Apartheid-era law defining a specific blood ratio for being “black”. I won’t answer it because the question is as offensive as its premise.
There will always be an urban/rural divide. There will always be a minority/white divide. There will always be a male/female divide.
These divides are exacerbated by the obscenely extreme wealth concentration that currently exists, especially in Massachusetts.
Let me begin by quoting Adam Smith:
If we are to embrace capitalism and in particular, a type of capitalism in which one person or small organization decides how the profits of all the workers in an enterprise are to be distributed, Smith makes it quite clear with a minimum wage needs to be.
However, in today’s American version of capitalism, the owners of these enterprises have found a way to externalize the true cost of their labor and see to it that in many cases, the medical care, food, housing, retirement and other costs of labor are now paid for by others.
Walmart’s low-wage workers cost U.S. taxpayers an estimated $6.2 billion in public assistance including food stamps, Medicaid and subsidized housing,
In short, if anyone in Massachusetts is working full time, 40 hours a week, 52 weeks a year and is in any way dependent on the state for any of the aforementioned goods or services, they are not sucking off the government teat, their employer is.
The question is rather, who should be paying for the labor to make that steak bomb or serve that coffee and donut, the owner of the establishment or the taxpayers of the surrounding community.
@johntmay: I’m familiar with the bromides.
I am looking for specifics. We heard some from stomv below (all of which I support).
There is nothing on this thread about “sucking off the government teat”. I asked three specific fact-based questions. The comment from stomv is the only one that even attempted to answer any of them.
Specifically, we start by bringing the Democratic Party back to being the party of the working class, not just the party of the well educated working class.
We start by not job shaming the citizens of the Commonwealth who make steak bombs and serve coffee. We appreciate them for the work they do and enact legislation that prohibits the CEO of such companies from taking $10 Million out of the company while at the same time, using taxpayer funds to support their employees.
How much more will that steak bomb cost? In Denmark workers currently make about $21 per hour in U.S. dollars.
The downside? McDonald’s food is slightly more expensive; a Big Mac there set you back $5.18 as of January 2014, compared to $4.62 in the U.S.
Are you willing to pay an extra fifty six cents? I am.
Are you proposing $21/hour?
That’s all I’m asking.
I am proposing that “A man must always live by his work, and his wages must at least be sufficient to maintain him. They must even upon occasions be somewhat more; otherwise it would be impossible for him to bring up a family, and the race of such workmen could not last beyond the first generation.”…unless we agree as citizens of the Commonwealth to use taxpayer dollars to subsidize the real labor costs of business leaders who pay themselves millions of dollars each year but still demand taxpayer help to provide them with laborers.
It’s not a question of $21 an hour. If it costs $21 an hour to live in the greater Boston area and an employer is paying less that that, the difference is being made up by you and me paying higher taxes.
Do you want to pay whatever the shortage is for my employees, out of your wallet, your taxes, when I am making millions each year?
Those words were written at the end of the Eighteenth century, before both the industrial era and the information age. I do not put much stock in words of “scripture” for its own sake, whether “holy” or “economic”.
I also wonder what other ideas of Adam Smith you assert, and what standard you use to pick and choose things you agree with and things you don’t.
Mr. Smith created “Laissez-faire” economics — he also contributed the following:
You ask:
I want to tax the wealthy and the very wealthy. I want to see an estate tax rate in excess of 90% (for estates above some reasonable threshold ). I’d like to see a top marginal income tax rate of at least 70%. I’d like to see capital gains taxed at the same rate as income.
I’d like to see the resulting increased tax revenue used for (in no particular order):
– Public infrastructure investment
– Greatly improved statewide public rail transportation
– Single-payer government-sponsored health care
– Public education, at government expense, through and including college.
– Significantly strengthened safety net for the least fortunate among us
…and before the wealthy business owners learned the art of the externalization of costs.
….to me, that’s saying “I want the arsonists to pay for the fire department!” The wealthy get wealthy when we allow them to exploit the working class.
Why not nip it in the bud and stop the exploitation? .
“Why not nip it in the bud and stop the exploitation?”
Because most of the wealthy are born that way.
Is there some aspect of the increased taxes I advocate that you oppose?
A quick Google search about life in Denmark (I’m looking at Copenhagen, as a comparison to Boston) found sites like this and this.
From the first link (emphasis mine):
The first link cites a different number for a big Mac (emphasis mine):
The second link cites housing prices in Copenhagen as “1,100 – 1,800 EUR/month”. That’s $1,285-2,103/month.
Various sites report that there is no legal minimum wage in Denmark, and that in practice it is set by collective bargaining agreements with unions at about $20/hour.
So it sounds to me as though you are proposing:
$21/hour minimum wage
25% sales tax
$9 for a McDonalds fix.
I note that apartment rates in Boston are significantly higher than Copenhagen.
A minimum wage of $21/hour and a five times increase in the sales tax — and affordable housing is still not in the picture.
I agree that we need to increase the minimum wage. I think that we need to tax the rich a LOT more, and provide a universal base income (UBI).
We need to solve the wealth concentration problem. Increasing the minimum wage doesn’t do that.
Too long of a post, Tom. Let me just say that I have a dear friend who lives in Denmark. Her husband, a childhood friend of mine, died several years ago due to pancreatic cancer. I am well aware that some things cost more there, but in balance, it is home to some of the happiest people on the planet, even though their Big Macs cost s few pennies more.
True, they do not have the large McMansions and luxury skyscrapers. or the wealth distribution that allows such things, but they are happy.
I am not proposing any specific wage, tax, or burger pricing. I am proposing whatever it takes to get away from what we have become in this Commonwealth and this country and to a place where ordinary citizens (not just college educated with rare skills) could enjoy life, fully.
One thing you might both agree on is the steps Senator Warren is taking to replicate a successful middle ground between social democracy and American style vulture capitalism.
Her proposals to break up corporations, tie their charters to this country, and put workers on their board have been very successful in Germany at creating a social market economy with strong safety nets and workers rights without some of the more across the board coercive taxation rates of the Scandanvian social democracies.
Let’s be clear, both models are thriving economic competitors who still produce things and make money. We are not talking about command economies, but dynamic market economies. The market is just substantially more tamed over there and attuned to the public’s interest and not the narrow minded short term speculations of shareholders. You know, the “smart” people easily duped by Theranos or Elon Musk today and Madoff and Enron before the crash.
The biggests costs in this country are education and healthcare. In this region you can add housing to the mix. We should also add childcare to the mix. All four are substantially cheaper in Denmark.
If the tradeoff with moving to a more socially democratic economy is paying more for useless trinkets from Wal Mart, unhealthy fast food from restaurants, and roughly the same for gadgets from Apple while paying far less for health care, education, housing, and child care it is a tradeoff I am willing to make.
My wife and I are turning 30. We had hoped to have kids right now. I constantly look at Zillow and wonder if I can have the 3 bedroom Cape of our dreams in a location within reasonable transit distance to Boston. I love teaching in Revere and have been very impressed with what RPS has done with the resources it has. I am open to that community or Malden, places that have yet to get the cache (and high costs) of Somerville and Cambridge or my wife’s favorite community Brookline. Even in these communities it is tough to find that white picket fence for under $400k.
We then think how we would have time to see our kids if she keeps working nights and taking weekend shifts and I am so busy after school hours lesson planning and grading. Often it feels like we are living to work and not the other way around. Options to solve this could include moving to another state, but my parents are aging and the job opportunities in Maine (where she might want to move-and to be clear Portland-we are still urbanites at heart) are a lot more limited for me than they are for her.
IL keeps raiding its teachers pensions to stay afloat, so her homestate seems like a bust. Where my sister in law is living in OH and possibly KY is substantially cheaper, but those places lack the diversity and culture that we have come to cherish here. Ditto Western MA or the Cape, although they are cheaper than Boston and beautiful places to be.
So we are honestly a lot more open to moving abroad than we were a few years ago, or scaling back our American dream to focus on what matters (raising our kids and educating them) and maybe the superficial things that do not (3 bedroom capes and cars, you know, the things that used to be a sign you were middle class in this country).
@jconway: For better or worse, I would have written the same comment (adjusted for inflation) thirty years ago when I was facing the same challenges.
I feel your pain. I’m not sure the challenges you describe are worse now than they were in 1988 or 1958. One huge difference is student debt burden. The job market for teachers was terrible then. I’m under the impression that opportunities in nursing may be about the same, perhaps even a bit better now.
My wife frequently reminds me that Germany and Austria are at least a decade behind the US when it comes to gender equality and professional opportunities for women. The political situation in Europe does not seem to be a lot better than it is here.
Canada is looking more attractive.
You make a good point. The gender politics is the main thing preventing us from exploring Asia and they are likely just as bad in Europe. The racial politics and xenophobia frankly seem worse on the continent these days, and maybe even in the UK, than they are here. A friend who has taught the past few summers in France has seen a substantial regression in open Islamophobic and xenophobic attitudes that would not be tolerate in polite society here (albeit tolerated and enabled by this morally bankrupt White House).
Canada might be a happier medium. Maybe the only industrialized country heading in the right direction at present.
What if instead of raising the wages of those working hard for below-living-wages, we instead used government resources to reduce their costs? What if health care didn’t come from out-of-pocket expenses? What if schools stopped charging for extra curriculars or even a ride to school? What if an MBTA monthly pass [subway + bus] was reduced to $50/month? What if we extended the sales tax exemption to things like OTC cold medicines? And, of course, what if we reduced the barriers to building more housing?
All of these things would help to make living in our region more affordable, without directly exacerbating (3) — or, as you mentioned later, prompt mechanization to reduce the number of jobs.
We can do all of these things by simply taxing the rich more.
We have a revenue problem.
A few years ago a Harvard Econ professor questioned whether it was worth it, in a structural sense, for Harvard to pay its workers more, since it might actually *change the composition of its workforce* — that is, it would attract/retain workers who could get that level of pay. What an ugly conclusion.
We need to a. Tax the rich, heavily; b. Provide a robust social safety net and public amenities; c. Enact a high-floor minimum wage; d. Provide plenty of pervasive, trivially-cheap if not outright free opportunity for skills advancement. Not d. without the others.
Tax the rich. A lot.
I reject any mutual exclusivity between raising private sector wages or reducing out of pocket costs for workers. I think Massachusetts has the brainpower to do both. What it currently lacks is the willpower, though our progressive September can hopefully usher in a progressive November and progressive Spring of governance. I welcome Rep. Vitolo, Jay Gonzalez, Ayanna Pressley, Nika Elgaurdo, Jon Sebastian and other insurgents who will be crashing those gates and making Massachusetts progressive again.