Robert B. Reich's Blog, page 6

One man is especially to blame for why corporate power is out of control. And I knew him! He was my professor, then my boss. His name… Robert Bork.

Robert Bork was a notorious conservative who believed the only legitimate purpose of antitrust — that is, anti-monopoly — law is to lower prices for consumers, no matter how big corporations get. His philosophy came to dominate the federal courts and conservative economics.

I met him in 1971, when I took his antitrust class at Yale Law School. He was a large, imposing man, with a red beard and a perpetual scowl. He seemed impatient and bored with me and my classmates, who included Bill Clinton and Hillary Rodham, as we challenged him repeatedly on his antitrust views.

We argued with Bork that ever-expanding corporations had too much power. Not only could they undercut rivals with lower prices and suppress wages, but they were using their spoils to influence our politics with campaign contributions. Wasn’t this cause for greater antitrust enforcement?

He had a retort for everything. Undercutting rival businesses with lower prices was a good thing because consumers like lower prices. Suppressing wages didn’t matter because employees are always free to find better jobs. He argued that courts could not possibly measure political power, so why should that matter?

Even in my mid-20s, I knew this was hogwash.

But Bork’s ideology began to spread. A few years after I took his class, he wrote a book called The Antitrust Paradox summarizing his ideas. The book heavily influenced Ronald Reagan and later helped form a basic tenet of Reaganomics — the bogus theory that says government should get out of the way and allow corporations to do as they please, including growing as big and powerful as they want.

Despite our law school sparring, Bork later gave me a job in the Department of Justice when he was solicitor general for Gerald Ford. Even though we didn’t agree on much, I enjoyed his wry sense of humor. I respected his intellect. Hell, I even came to like him.

Once President Reagan appointed Bork as an appeals court judge, his rulings further dismantled antitrust. And while his later Supreme Court nomination failed, his influence over the courts continued to grow.  

Bork’s legacy is the enormous corporate power we see today, whether it’s Ticketmaster and Live Nation consolidating control over live performances, Kroger and Albertsons dominating the grocery market, or Amazon, Google, and Meta taking over the tech world.

It’s not just these high-profile companies either: in most industries, a handful of companies now control more of their markets than they did twenty years ago.

This corporate concentration costs the typical American household an estimated extra $5,000 per year. Companies have been able to jack up prices without losing customers to competitors because there is often no meaningful competition.

And huge corporations also have the power to suppress wages because workers have fewer employers from whom to get better jobs.

And how can we forget the massive flow of money these corporate giants are funneling into politics, rigging our democracy in their favor?

But the tide is beginning to turn under the Biden Administration. The Justice Department and Federal Trade Commission are fighting the monopolization of America in court, and proposing new merger guidelines to protect consumers, workers, and society.

It’s the implementation of the view that I and my law school classmates argued for back in the 1970s — one that sees corporate concentration as a problem that outweighs any theoretical benefits Bork claimed might exist.

Robert Bork would likely regard the Biden administration’s antitrust efforts with the same disdain he had for my arguments in his class all those years ago. But instead of a few outspoken law students, Bork’s philosophy is now being challenged by the full force of the federal government.

The public is waking up to the outsized power corporations wield over our economy and democracy. It’s about time.

Are we in a second Gilded Age?Is Trump really a Fascist?Why are we so politically polarized?How did corporations take over our politics? 

To understand the present, study the past. 

Please join me as I share 6 crucial lessons from history.

TWO DOLLARS AND THIRTEEN CENTS AN HOUR.

That’s how much millions of American workers are paid under the federal subminimum wage — which was set all the way back in 1991.

While many think tipping for services has gotten out of control, arguing over who deserves a tip and how much they should get distracts from what we should really be angry about: business models that depend on not paying workers a living wage.

It’s bad enough that the federal minimum wage is a measly $7.25 an hour. But employers are allowed to pay tipped workers just $2.13 an hour because supposedly the workers will be able to make up for it in tips.

Saru Jayaraman of One Fair Wage has been advocating to change this absurd and exploitative law. I asked her to share with us FOUR big reasons why we need to get rid of the subminimum wage and pay service workers a full living wage with tips on top.

Number 1: Workers who earn a subminimum wage often end up making less than the minimum wage

43 states currently allow certain workers to be paid a subminimum wage. Employers in these states are legally required to make up the difference if a worker’s combined wage and tips don’t reach the full minimum wage. But over a third of tipped workers report that their bosses regularly fail to do this.

That’s because enforcement of wage laws is lax, and it makes it easier for employers to get away with shortchanging staff.

Number 2: The subminimum wage perpetuates gender discrimination and harassment on the job

More than two-thirds of tipped workers — 70% — in the U.S. are women. And one in six women that work a tipped job are living in poverty — that’s nearly 2.5 times the rate for workers overall.

Since workers earning the subminimum wage are so dependent on tips to make a living, they are put in situations where they have to tolerate inappropriate customer behavior. A staggering 76 percent — that’s more than three-quarters of tipped workers — have reported experiencing sexual harassment on the job. And that only got worse during the pandemic.

Number 3: Tipping is actually a relic of slavery

Tipped workers are disproportionately people of color. And Black service workers in particular consistently earn less, including tips, than their white counterparts for doing the same job.

Look, this inequity of the subminimum wage is tied to America’s history of structural racism.

Following the Civil War, tipping was used as a racist solution by employers who didn’t want to pay formerly enslaved Black workers. So by allowing them to pay their workers just in tips rather than a wage, employers were able to avoid directly paying these workers.

Number 4: Paying workers a living wage plus tips is actually better for business — and our economy.

Corporate lobbyists, particularly for the restaurant industry, warn that paying workers a full minimum wage with tips on top will be devastating to businesses. But research shows these fears are completely overblown.

So far, seven states have replaced their subminimum wage for tipped workers with a higher minimum wage that still allows for tips on top. These seven states are actually faring better than the 43 states with subminimum wages for tipped workers — both in the number of restaurants and number of people employed by restaurants. And take home pay for restaurant servers and bartenders in these states was 24% higher than in states with a wage of just $2.13 an hour.

Workers at restaurants that have scrapped their subminimum wages in favor of higher minimum wages with tips on top are more productive, happier, and less likely to quit their jobs. This alone helps business owners cut employee turnover nearly in half. This is especially important following the pandemic, when restaurants are facing historic staffing shortages because over 1 million workers have left the industry due to low pay.

So not only have higher wage states been able to maintain their industries, but workers are more productive, getting paid more, and less likely to live in poverty.  

And when workers have more money, they spend more money — stimulating their local economies in the process.

And for the first time in 30 years, workers are winning on this issue, like in DC and Chicago and a dozen other states.

The bottom line is that ending the subminimum wage for tipped workers is better for workers, it’s better for business, it’s better for our economy — and it’s the right thing to do.

Donald Trump wants you to be disgusted. He wants you to be cynical. And he definitely doesn’t want you to watch this video. Why? Because that’s how he wins in 2024. Let me explain.

The Republicans’ election strategy is built on chaos. The more chaos they create, the more pessimistic Americans feel about the capacities of our democracy to govern the nation. So we give up on democracy and turn to a so-called strongman.

Trump has been pushing his party to deny the 2020 election result, shut down the government, pardon insurrectionists, impeach President Biden, investigate Hunter Biden, stop funding Ukraine, and obstruct the criminal prosecutions Trump is facing. He’s stoking hatred, using fascist language by labeling his opponents “vermin” and claiming immigration is destroying the nation.  

Trump wants voters to believe America is ungovernable, and that the only solution is an authoritarian like him taking over.

And he wants those who don’t support him to be so disgusted that they tune out — and not even bother to vote.

Trump’s chaos agenda is also drowning out news about how well we’re actually being governed under President Biden.

Rarely do we hear about how the economy continues to generate a record number of new jobs. 

Not to mention billions of dollars being invested to fix the nation’s infrastructure and combat climate change. Medicare on the way to lowering the cost of prescription drugs. Billions in student debt canceled, in spite of rulings from the right-wing Supreme Court. Corporate monopolies attacked. Workers’ rights to organize, defended.

Trump and his allies don’t want you to know about any of this. And sadly the media plays along by focusing mostly on chaos and dysfunction, with an inclination to blame both sides in the name of “balanced coverage.”

Folks, the political struggle of our time is no longer Left versus Right, Democrats versus Republicans. It’s now democracy versus fascism.

Be warned. And help spread the word about Trump’s chaos agenda by sharing this video.

I don’t think you’re expecting what I’m about to say, because I have never seen anything like this in fifty years in politics.

For decades I’ve been sounding an alarm about how our economy has become increasingly rigged for the rich. I’ve watched it get worse under both Republicans and Democrats, but what President Biden has done in his first term gives me hope I haven’t felt in years. It’s a complete sea change.

Here are three key areas where Biden is fundamentally reshaping our economy to make it better for working people.

#1 Trade and industrial policy

Biden is breaking with decades of reliance on free-trade deals and free-market philosophies. He’s instead focusing on domestic policies designed to revive American manufacturing and fortify our own supply chains.

Take three of his signature pieces of legislation so far — the Inflation Reduction Act, the CHIPS Act, and his infrastructure package. This flood of government investment has brought about a new wave in American manufacturing.

Unlike Trump, who just levied tariffs on Chinese imports and used it as a campaign slogan, Biden is actually investing in America’s manufacturing capacity so we don’t have to rely on China in the first place.

He’s turning the tide against deals made by previous administrations, both Democratic and Republican, that helped Wall Street but ended up costing American jobs and lowering American wages.

#2 Monopoly power

Biden is the first president in living memory to take on big monopolies.

Giant firms have come to dominate almost every industry. Four beef packers now control over 80 percent of the market, domestic air travel is dominated by four airlines, and most Americans have no real choice of internet providers.

In a monopolized economy, corporate profits rise, consumers pay higher prices, and workers’ wages shrink.

But under the Biden, the Federal Trade Commission and the Antitrust Division of the Justice Department have become the most aggressive monopoly fighters in more than a half century. They’re going after Amazon and Google, Ticketmaster and Live Nation, JetBlue and Spirit, and a wide range of other giant corporations.  

#3 Labor

Biden is also the most pro-union president I’ve ever seen.

A big reason for the surge in workers organizing and striking for higher wages is the pro-labor course Biden is charting.

The Reagan years blew in a typhoon of union busting across America. Corporations routinely sunk unions and fired workers who attempted to form them. They offshored production or moved to so-called “right-to-work” states that enacted laws making it hard to form unions.

Even though Democratic presidents promised labor law reforms that would strengthen unions, they didn’t follow through. But under Joe Biden, organized labor has received a vital lifeboat. Unionizing has been protected and encouraged. Biden is even the first sitting president to walk a picket line.

Biden’s National Labor Relations Board is stemming the tide of unfair labor practices, requiring companies to bargain with their employees, speeding the period between union petitions and elections, and making it harder to fire workers for organizing.

Americans have every reason to be outraged at how decades of policies that prioritized corporations over people have thrown our economy off-keel.

But these three waves of change — a worker-centered trade and industrial policy, strong anti-monopoly enforcement, and moves to strengthen labor unions — are navigating towards a more equitable economy.

It’s a sea change that’s long overdue.

Republicans are lying about immigrants and the border. Here are five of their biggest doozies.

1. They claim Biden doesn’t want to secure the border

Well, that’s rubbish. Biden has consistently asked for additional funding for border security.

Republicans have just as consistently refused. They’re voting to cut Customs and Border Protection funding in spending bills and blocking passage of Biden’s $106 billion national security supplemental that includes border funding.

2. They blame the drug crisis on immigration

That’s more rubbish. While large amounts of fentanyl and other deadly drugs have been flowing into the U.S. from Mexico, 90% arrives through official ports of entry, not via immigrants illegally crossing the border. In fact, research by the Cato Institute found that more than 86% of the people convicted of trafficking fentanyl in 2021 were U.S. citizens.

3. They claim that undocumented immigrants are terrorists.

Baloney. For almost a half century, no American has been killed or injured in a terrorist attack in the United States that involved someone who crossed the border illegally.

4. They say immigrants are stealing American jobs.

Nonsense. Evidence shows immigrants are not taking jobs that American workers want. And the surge across the border is not increasing unemployment. Far from it: unemployment has been below 4% for roughly two years.

5. They blame crime on immigrants

More baloney. This has been debunked by numerous studies over the years. In fact, a 2020 study found that undocumented immigrants have “substantially” lower crime rates than native-born citizens and legal immigrants.

Notwithstanding the recent migrant surge, America’s homicide rate has fallen nearly 13% since 2022 — the largest decrease on record. Local law enforcement agencies are also reporting drops in violent crime.

Who’s really behind these lies?

Since he entered politics, Donald Trump has fanned nativist fears and bigotry.

Now leaning into full neo-fascism and using the actual language of Hitler to attack immigrants.

Trump wants us to forget that almost all of us are the descendants of immigrants who fled persecution, or were brought to America under duress, or simply sought better lives for themselves and their descendants.

Know the truth and spread it.