Saturday, November 5, 2016

History, Politics, the working class, and the vote for 2016

The Sorry State of the working class

On April 13, 2016 the New York Times ran an op-ed piece entitled “Foiling Obama, Congress Made Trump.” Republican successfully blocked every effort Obama made to benefit the working class with constructive proposals: a cut in the payroll tax, an infrastructure bank to create construction jobs, a larger child tax credit, community college investments, an expanded earned income tax credit, making retirement plans portable across employers, tax credits for manufacturing communities, wage insurance.

Presidential election night commentary repeatedly mentioned the angry working class and how they voted for Donald Trump, apparently in large enough numbers to swing a few key states and the election. Many of the Trump voters were characterized as working class whites with a high school education struggling to get by on low paid jobs. A corporate decision to close a factory and move to Mexico or China often figured in their low income and loss of employment. The loss of jobs then figured in the collapse of their local housing market and empty strip malls sprinkled about in cities and towns across the mid western states.

Trump campaigned with many Democratic proposals the Republican establishment hates and blocked during the Obama years. He attacked American business moving jobs overseas during the campaign along with the NAFTA trade agreement. Neither the Republican or Democratic parties or any of its presidents have ever challenged the absolute right of corporate America to shut down plants and operations in the United States and move them to Mexico or China or anywhere they want to go. Neither party does a thing to slow it down, or appears to care about places like Detroit, decimated by autocratic corporate decisions. The best the Democrats have ever done is to offer trade assistance or retraining for those who lose their jobs.

For Trump to keep his promises to the people who elected him he will have to fight the Republican Party establishment and propose more aggressive policies than the modest efforts of the Democrats. The Democrats have already organized an agenda around his campaign pledges in what shapes up into a three cornered discussion, that is if Trump really meant what he said during the campaign.

The Trump and Democratic proposals can help generate new spending which in turn helps create jobs, but they do almost nothing to stem the surplus of labor or fix the policies accepted by both parties. More spending won’t be enough; the supply of labor has to be addressed.

Trump’s proposals include a demand to cut immigration and reduce the supply of professional foreign labor under the H1-b program, but H-1b is only one of several other programs that bring in foreign labor. Otherwise I have heard nothing about changes to the Fair Labor Standards Act. President Obama tried to amend the overtime rules and get more people a chance to earn time and half for work over forty hours, but the Republicans howled against it and filed suits to stop it.

As of now the minimum wage remains at $7.25 an hour for a forty-hour week and anyone earning over $23,660 has no right to overtime if an employer chooses to put them on a salary. Two people working sixty hour weeks equal three people working forty hour weeks. Unpaid overtime helps restrict new jobs and add to the already massive oversupply of labor. Two decades of higher productivity has eliminated millions of jobs and helped generate an even bigger surplus of labor working a forty-hour week. The full time workweek will need to be decreased to 30 hours phased in over several years.

Trump will have to lower federal income taxes on the modest wages and salaries of the low paid working class. In 2015 a single person earning $25,000 had to pay $1,743.75 in federal income tax even though it is not possible to live on such a low salary and that is before social security and state taxes. A couple both earning $25,000 pay $3,487.50 in federal income tax. If their income had been corporate dividends they would have paid nothing, not a cent in federal taxes.

It was the working class that put Trump in office, but it will be easy to tell if they get something for it. They got nothing from Reagan or the two Bush presidents. Republicans are pickpockets, but Trump refuses to sound like a Republican so maybe now will be different. Maybe.

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