More People Will Work If You Pay Them To

From David Leonhardt of The New York Times:

The chief executive of Domino’s Pizza has complained that the company can’t hire enough drivers. Lyft and Uber claim to have a similar problem. A McDonald’s franchise in Florida offered $50 to anybody willing to show up for an interview. And some fast-food outlets have hung signs in their windows saying, “No one wants to work anymore.

The idea that the United States suffers from a labor shortage is fast becoming conventional wisdom. But before you accept the idea, it’s worth taking a few minutes to think it through.

Once you do, you may realize that the labor shortage is more myth than reality.

Let’s start with some basic economics. The U.S. is a capitalist country, and one of the beauties of capitalism is its mechanism for dealing with shortages. In a communist system, people must wait in long lines when there is more demand than supply for an item. That’s an actual shortage. In a capitalist economy, however, there is a ready solution. . . . 

When a company is struggling to find enough labor, it can solve the problem by offering to pay a higher price for that labor — also known as higher wages. More workers will then enter the labor market. Suddenly, the labor shortage will be no more.

One of the few ways to have a true labor shortage in a capitalist economy is for workers to be demanding wages so high that businesses cannot stay afloat while paying those wages. But there is a lot of evidence to suggest that the U.S. economy does not suffer from that problem.

If anything, wages today are historically low. They have been growing slowly for decades for every income group other than the affluent. As a share of gross domestic product, worker compensation is lower than at any point in the second half of the 20th century. Two main causes are corporate consolidation and shrinking labor unions, which together have given employers more workplace power and employees less of it.

Just as telling as the wage data, the share of working-age Americans who are in fact working has declined in recent decades. . . . 

Corporate profits, on the other hand, have been rising rapidly and now make up a larger share of G.D.P. than in previous decades. As a result, most companies can afford to respond to a growing economy by raising wages and continuing to make profits, albeit perhaps not the unusually generous profits they have been enjoying.

Sure enough, some companies have responded to the alleged labor shortage by doing exactly this. Bank of America announced Tuesday that it would raise its minimum hourly wage to $25 and insist that contractors pay at least $15 an hour. Other companies that have recently announced pay increases include Amazon, Chipotle, Costco, McDonald’s, Walmart, J.P. Morgan Chase and Sheetz convenience stores.

Why the continuing complaints about a labor shortage, then?

They are not totally misguided. For one thing, some Americans appear to have temporarily dropped out of the labor force because of Covid-19 [or partially closed schools and lack of childcare]. Some high-skill industries may also be suffering from a true lack of qualified workers, and some small businesses may not be able to absorb higher wages. Finally, there is a partisan debate about whether expanded jobless benefits during the pandemic have caused workers to opt out.

For now, some combination of these forces — together with a rebounding economy — has created the impression of labor shortages. But companies have an easy way to solve the problem: Pay more.

That so many are complaining about the situation is not a sign that something is wrong with the American economy. It is a sign that corporate executives have grown so accustomed to a low-wage economy that many believe anything else is unnatural [or against their interests].

Using the Legal System Against Facebook and Other Titans of the Internet

Two Democratic members of Congress are trying to stop big social media companies from doing so much damage:

Imagine clicking on a Facebook video alleging that a “deep-state cabal” of Satan-worshiping pedophiles stole the election from [a horrible person]. Moments later, your phone rings. The caller says, “Hey, it’s Freddie from Facebook. We noticed you just watched a cool video on our site, so we’ll send you a few dozen more videos about election-related conspiracy theories. As a bonus, we’ll connect you to some people who share your interest in ‘stopping the steal’. You guys should connect and explore your interest together!”

The scenario is, of course, made up. But it basically captures what social media platforms do every day. In the real world, “Freddie from Facebook” is not a person who calls you, but an algorithm that tracks you online, learns what content you spend the most time with and feeds you more of whatever maximizes your engagement — the time you spend on the platform. Greater engagement means that users see more ads, earning Facebook more revenue.

If you like cat videos, great; you’ll get an endless supply. But the same is true for the darkest content on the Web. Human nature being what it is, the content most likely to keep us glued to our screens is that which confirms our prejudices and triggers our basest emotions. Social media algorithms don’t have a conservative or liberal bias, but they know if we do. Their bias is to reinforce ours at the cost of making us more angry, anxious and afraid.

Facebook recently played down the role of its algorithms in exploiting users’ susceptibilities and enabling radicalization. The company says that users, not its product, are largely responsible for the extreme content showing up in their news feeds.

But Facebook knows how powerful its algorithms can be. In 2016, an internal Facebook study found that 64 percent of people who joined an extremist group on the platform did so only because its algorithm recommended it. Recently, a member of the Wolverine Watchmen, the militia accused of trying to kidnap Michigan Gov. Gretchen Whitmer (D), said he joined the group when it “popped up as a suggestion post” on Facebook because he interacted with pages supporting the Second Amendment.

Policymakers often focus on whether Facebook, YouTube and Twitter should take down hate speech and disinformation. This is important, but these questions are about putting out fires. The problem is that the product these companies make is flammable. It’s that their algorithms deliver to each of us what they think we want to hear, creating individually tailored realities for every American and often amplifying the same content they eventually might choose to take down.

In 1996, Congress passed Section 230 of the Communications Decency Act, which says that websites are not legally liable for content that users post (with some exceptions). While the law helped to enable the growth of the modern Internet economy, it was enacted 25 years ago when many of the challenges we currently face could not have been predicted. Large Internet platforms no longer function like community bulletin boards; instead, they use sophisticated, opaque algorithms to determine what content their users see. If companies such as Facebook push us to view certain posts or join certain groups, should they bear no responsibility if doing so leads to real-world violence?

We recently introduced a bill that would remove Section 230 protection from large social media companies if their algorithms amplify content that contributes to an act of terrorism or to a violation of civil rights statutes meant to combat extremist groups. Our bill would not force YouTube, Facebook or Twitter to censor or remove content. Instead, it would allow courts in cases involving extreme harm to consider victims’ arguments against the companies on the merits, as opposed to quickly tossing out lawsuits on Section 230 grounds as would happen today.

Liability would incentivize changes the companies know how to make. For example, last year Facebook tested a new system in which users rated posts on their news feeds as “good” or “bad” for the world. The algorithm then fed those users more content that they deemed good while demoting the bad. The experiment worked. The company’s engineers referred to the result as the “nicer news feed.” But there was one problem. The nicer news feed led to less time on Facebook (and thus less ad revenue), so the experiment died.

This is the fundamental issue: Engagement-based algorithms made social media giants some of the most lucrative companies on Earth. They won’t voluntarily change the underlying architecture of their networks if it threatens their bottom line. We must decide what’s more important: protecting their profits or our democracy.

Unquote.

The authors of the article are Rep. Tom Malinowski, who represents a traditionally Republican district in suburban New Jersey, and Rep. Anna Eshoo, who represents the part of California that includes Silicon Valley.

Cable TV vs. Truth: A Case Study

Tucker Carlson is a bow tie-wearing creep who peddles right-wing nonsense to his Fox News followers five nights a week. This is from Judd Legum’s Popular Information newsletter:

Tucker Carlson has lost virtually all of his advertisers. A typical broadcast includes no national brand advertisers, a few direct response ads from companies like MyPillow, and house ads promoting other Fox News shows. 

Why have advertisers abandoned Carlson? In addition to the conduct described above, Carlson has:

Said that Black Lives Matter protests are “definitely not about black lives, and remember that when they come for you.”

Asserted that immigrants are making the country “poorer and dirtier

Called the Derek Chauvin verdict “an attack on civilization” and falsely claimed George Floyd died of a drug overdose.

Spread misinformation and conspiracy theories about COVID-19 vaccines.

Carlson has the right to say whatever loathsome things he wishes. And Fox News can choose to broadcast those views on television. But Carlson and the Murdochs do not have a right to have those views subsidized by millions of Americans who never watch Fox News. But that’s exactly what is happening. And those dynamics have allowed Fox News and Carlson to weather a near-universal advertiser boycott. 

Here’s how it works. Cable companies pay “carriage fees” to networks for the right to carry their channel. These fees are then passed on to users in their monthly bills. In 2020, Fox News made more money from carriage fees ($1.6 billion) than advertisements ($1.2 billion). 

Other channels, of course, also receive carriage fees for their content. But the Murdochs have negotiated exorbitant fees for Fox News that are far greater than any other non-sports programming. 

According to a survey conducted late last year, about 14% of cable TV subscribers watch Fox News regularly. But every cable TV subscriber pays an average of $1.72 a month to receive Fox News. In contrast, 31% of cable TV subscribers regularly watch FX (owned by Disney) but the channel adds just $0.81 to an average cable bill.

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This means, for every actual viewer, Fox News receives a $7.75 subsidy from people who never watch Fox News. This is a higher subsidy than other non-sports channels, like FX ($1.79), CNN ($3.18), and TBS ($2.79), receive. And none of those channels regularly spreads white nationalist talking points to millions of viewers. 

So how can Americans who don’t watch Fox News and find Carlson’s conduct repugnant stop subsidizing his $10 million salary? One option would be for major cable operators like Comcast, Spectrum, and AT&T to offer cable TV packages that exclude Fox News. This would allow people the choice of whether to pay for Fox News, just as people choose whether to pay for HBO. 

But, for the moment, corporate America seems loathe to take on the Murdochs or alienate Fox News’ passionate fan base. So the only way to stop sending cash to the Murdochs is to “cut the cord” and find a combination of streaming services that doesn’t include Fox News.

Unquote.

If you want to stop paying for cable TV but still want your local stations (which include ABC, CBS, NBC, PBS and even Fox, but not Fox News), there’s a not-for-profit streaming service called Locast. It’s now available in 31 major TV markets around the country (plus Puerto Rico):

Get the local channels you love [note: or hate] without a monthly bill. Locast is a not for profit service offering users access to broadcast television stations over the internet. It’s time to shred those cable bills and contracts!

If you’re part of the international elite who rub shoulders with the odious, 90-year-old Rupert Murdoch and his evil spawn Lachlan, you can treat them with the disrespect they deserve. You might tell them to stop the propaganda and then spit in their soup.

Looking for a United Working Class

One-third of Robert Kuttner’s “Dividends of a Just Economy” in the NY Review of Books:

Racism, in Gunnar Myrdal’s phrase, remains the American dilemma — and a special dilemma for Democrats. For a progressive majority to be built on common economic issues, it must be multiracial. There have been two great moments of American biracial coalition. They were separated by a century, and both ended badly. Lincoln’s was halted by his assassination; his intended legacy of racial inclusion was short-circuited by the ending of Reconstruction in 1876. Lyndon Johnson’s comment that passing the 1964 Civil Rights Act would destroy the Democratic Party in the South understated what followed. Republicans, repeating the tactics of the postbellum planter class and the anti-populists of the 1890s, have used race to destroy any solidarity between poor whites and blacks.

Heather McGhee’s The Sum of Us is a powerful call for racial alliance. More than a moral appeal, McGhee’s book provides a practical manual on how to bring it about. McGhee, a former president of the progressive think tank Demos, argues that the most effective form of antiracism is to embrace both race and class. Racism hurts Blacks disproportionately, but it also hurts whites who could benefit from activist policies precluded by the politics of racial division. “Black people and other people of color certainly lost out when we weren’t able to invest more in the aftermath of the Great Recession,” she writes. “But did white people win? No, for the most part they lost right along with the rest of us.” McGhee is out to challenge what she terms the “zero-sum paradigm”: the premise that if Blacks gain, it must be at the expense of whites, and vice versa.

McGhee quotes Hinton Helper, a white southerner who wrote a book in 1857 tallying all the ways that the planter class that governed the South shortchanged ordinary whites. Pennsylvania, Helper reported, had 393 public libraries; South Carolina 26. New Hampshire had 2,381 public schools; Mississippi 782. Plantation owners had a captive labor force. They didn’t need or want educated whites. As McGhee notes, the pattern carries on to this day. In 1959 the government of Montgomery, Alabama, paved over the city’s swimming pools, closed its parks, and even eliminated the zoo rather than see these public facilities integrated. Whites suffered along with Blacks. The states with the poorest and least educated populations and those with the most threadbare public services are still those in the South.

McGhee documents these realities with care: white people who can’t get affordable health insurance; white people bilked by mortgage fraudsters; white people no longer able to attend free public universities; employers who defeat union organizing by dividing workers by race. Each example reflects the absence of better policies for all, a possibility precluded by racial animus. McGhee is unsparing in describing how this version of America is harder still on Blacks. But the challenge is to make this story persuasive to white voters attracted by the likes of Trump, so that they shift their allegiance from racism to progressive economics.

From her reporting across America, McGhee points to case after case of cross-racial organizing for common betterment: the welcoming of refugees in Lewiston, Maine, as a way of repopulating empty storefronts and bringing new economic energy to a depressed town; a new wave of common efforts around the fight for a $15-per-hour minimum wage; union organizing of service workers, even in the Deep South. A transracial alliance, she writes, would produce a “solidarity dividend” of greater social protections for all races, the kind just demonstrated by Biden’s enactment of a universal child allowance using refundable tax credits. Playing off the story of Montgomery draining its public pools, McGhee calls for refilling “the pool of public goods.” Because of the greater legacy of Black poverty, public provision helps Blacks disproportionately, but aids whites as well, and cumulatively builds transracial affinity and alliance.

McGhee credits and builds on the work of Ian Haney López, whose most recent book, Merge Left, is a complementary call for racial coalition. Like McGhee, he is both nuanced and unflinching. “I had assumed that the main stumbling block to urging cross-racial solidarity would be convincing a majority of whites,” he writes. “Equally formidable, it turned out, was enlisting support from people directly focused on racial justice, overwhelmingly activists of color.”

Haney López is a law professor at Berkeley. His earlier scholarly work on race included pioneering research on how even the Supreme Court got pulled into determining who was white, because immigration in the nineteenth century was limited to whites, and “white” had to be defined.

His 2014 book, Dog Whistle Politics, is the definitive study of the use of language in veiled racist appeals going back to Richard Nixon.

In his latest book, Haney López uses his academic expertise in the service of his work as an organizer. He recounts his extensive meetings with groups ranging from white trade unionists fed up with the charge of racial insensitivity to Black militants who insist that antiracism must take precedence over making common cause with dubious allies. This work is as difficult as it is urgent. One white, who professes sympathy for the civil rights cause, says that Black talk about slavery is “a horrible crutch to not trying, not working, not fixing yourself.”

Haney López’s mission is to persuade both groups that they need each other, and to fashion language to further that political goal. “Many of the Right’s most debilitating stories about working people—including white working families,” he writes, citing the best-seller Hillbilly Elegy by J.D. Vance, “are recycled stereotypes about African Americans.”

One concrete result of his leadership is called the Race-Class Narrative Project, initiated in 2017 with the participation of pollsters, linguists, and diverse progressive activists including McGhee. It rigorously tested language in focus groups and larger meetings. These included both open-ended discussions of racially fraught issues and more explicit testing of different messages. The data confirmed Haney López’s intuition. Researchers found that presenting issues in combined appeals to race and class was more convincing to voters than “the dog whistle racial fear message,” and that race-class approaches that acknowledged the special challenges of race “were more convincing than colorblind economic populism.” Three quarters of respondents in a multiracial group agreed with this statement:

Instead of delivering for working people, politicians hand kickbacks to their donors who send jobs overseas. Then they turn around and blame new immigrants or people of color, to divide and distract us from the real source of our problems.

Haney López is mindful of the tightrope act, and he is resolute in his conclusion: we can’t duck race, but we need to talk about it in a way that builds transracial unity: “For centuries, our greatest heroes—radicals like W.E.B. Du Bois, Martin Luther King Jr., and César Chavez—have insisted that American salvation requires cross-racial alliances.”

Recent events affirm these arguments. Only because of the razor-thin electoral success of Democrats in Georgia, which turned two Senate seats, has Biden been able to get legislation through Congress and progressive officials confirmed. Some leaders grasped the power of the “race-class narrative” before it had a name. The success in Georgia was built on ten years of organizing led by Stacey Abrams, who has been a touchstone for Black mobilization but succeeded in building a deliberately multiracial movement. If Biden and Congress can block the latest round of outright racial voter suppression efforts, Georgia could prove a hopeful harbinger of what America can be.