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Welcome, friends, to another edition of Economic update. It's kind of warm here in New York City, and I commiserate with you if you have that problem where you are. This is a program that every week looks at our incomes, our debts, our jobs, what's coming down the road. I'm your host, Richard Wolff. I've been a professor of economics all my adult life, and now I bring whatever it is I've learned over that time to this program each week to present what's going on in the broad economic situation we all have to live with. Before jumping in, I need to make a few very short announcements. The first is that if you ever miss this program, we are archived by iheartradio.com Letter I then heart as in your chest. Radio iheartradio.com Go there, look for Economic Update, and you can catch any program that you may have missed. We're very grateful to iHeartRadio for partnering with us in this way. Second, I want to remind you that if you would like to see this program as a television program in video form, please visit us at. That's P-A-T-R-E-O-N.com economicupdate. There you will be able to see this program as effectively a television program, and we would appreciate your giving that a look. And finally, as I announced last week, we are now represented in terms of my speaking around the country by a great outfit from California called speakoutnow.org that's all one word, speakoutnow.org you can go to their website and see me listed there. And if you're interested in pursuing a possible visit to your area, please get in touch with them via email@infospeakoutnow.org all right, let's jump right in. The big item these last few days has been the health care struggles. The whole Senate had to postpone dealing with it because there's such tension, such disagreement, not only between Republicans and Democrats, but among both of them about what ought to be done. It is, after all, shameful that the United States, one of the richest countries in the world, is unable to provide decent medical insurance to its people the way literally all of the other advanced industrial countries have been doing for decades. It's also doubly shameful that we have the most expensive health care in the world, partly because of that first thing I said, because we don't have comprehensive, government managed, or indeed government run health care the way they do in so many other countries. So we spend almost twice what other countries do for our health care that is our doctors, our hospitals, our drugs, our medical devices, and the insurance to cover all of that. And that is being ripped off in our country in a way that no other country permits. Well, what's the fight about? Well, on the one hand, we have Obamacare, the health change that was passed during the Obama administration. The good news about that was it extended health insurance to millions of people who had been without it. And that's certainly a step in the right direction. It even went further by paying for a good part of that by taxing wealthy people and a few of the health care corporations raking in the big bucks. Well, that was more than enough to get the Republicans to turn against it. But the Obamacare also had flaws, failures which the Republicans could and did take advantage of. And the biggest one goes right back to the monopoly arrangement of our medical industrial industries. The problem was Obamacare did nothing to prevent or stop private medical care companies, the doctors and the hospitals and, and the drug and medical device makers and the insurers from either opting out of markets when they didn't make enough profit or jacking up their prices. There were some notorious examples that we all read about in the newspaper. So that many Americans were angry about the Obamacare, not because it extended coverage to poor people, which for sure there is mass support for, I'm happy to say, but rather because their premiums were going up faster than even before and they felt, correctly, that they were being ripped off. Great. The GOP and Trump could use that could say over and over again, it's a disaster. It's failing. That wasn't true, but it captured the anger of people facing ever higher prices to produce ever higher profits. So in come the Trump GOP folks. The first thing they do is propose to get rid of the taxes on rich people and, and even on the corporations, because, of course, that's always their first priority. And second, to reduce the coverage for poor people, since there wouldn't be the money coming in from the tax on the rich and the corporations, modest though that was. But that proved to be too much for the gop. Moderates, they're called. They were getting screaming calls from their constituents who were telling them, if you cut out Obamacare, it's going to be even worse for us in these following ways. And then they explained what it means if you cut health insurance for all kinds of poor people, for all kinds of people who aren't normally poor but suffer a particular disease or suffer a cutback in employment. You see the picture. So here they are, the Democrats and Republicans, those who are in both parties, worried about what will happen if you get rid of Obamacare and substitute the lame Republican alternative. But here's what upsets me and I hope upsets you. Throughout all these debates, nobody questions the status quo of the medical industrial monopoly. That's right, the doctors and hospitals, the drug companies, the insurersthey struggle amongst themselves. But they present a common face to the rest of pay up. Pay more than anywhere else in the world to give us higher profits than than anywhere else in the world for people doing the work we do. As long as we don't question that, we will be struggling and choosing between one inadequate plan and another. The bottom line is the two political parties protect the medical industrial monopoly because they're afraid to confront them. Next update. The United States has one of the lowest minimum wages in the advanced industrial world, another shameful reality. The World Economic Forum did a recent table that I find useful. They took the minimum wage, the cash money a worker gets at the bottom minimum, and they subtracted from it the amount of taxes that worker has to pay on that minimum he or she earns. And then they ranked the countries. Where do workers get more and where do they get less in their minimum wage after taxes? The United States didn't show well, as you might imagine. So I'm going to give you a list now of the countries that pay more of a minimum wage after taxes than the United States. Just you can see that way where we rank in the world economic picture when it comes to how we treat those at the minimum wage. Here are the countries who pay Australia, Luxembourg, Belgium, Ireland, France, Netherlands, New Zealand, Germany, Canada, and the United Kingdom. That we fall below all of those. Well, there's nothing I can say that would be adequate to what that's about. The next update has to do with a kind of straw in the wind. Two unions at opposite ends of the United States, one in Canada, excuse me one in California and the other one in Mississippi, are doing something that unions haven't done enough of. And I'm wondering whether these are straws in the wind. In the case of California, it's the workers at AT&T, the telephone company, who were given a contract which proposed on the one hand to give them an 11% increase over four years. That works out to about 2.5% a year. Hardly a fortune. And remember, if you get 2.5% a year and prices go up 2.5% a year, which many people think they will over the next four years, you've got nothing in the way of an advanced that would be bad enough. But the 11% over four years was coupled by the company with an increase in how much the workers have to pay out of their own medical insurance. And indeed the workers were now going to be asked to pay 29% of the cost of the medical insurance that comes with their job. In effect, that increase in what they have to pay for for the same medical care they've been getting would take away the benefit of the wage increase or most of it. In other words, they were offered next to nothing. And with rising prices in this economy, it could literally have been negative over the next four years. The union and the company agreed to this contract, presented it to, I believe it's 17,000 workers at AT&T in California and I think also Nevada. And the workers have just recently rejected the contract as inadequate. It's very interesting because it shows that the workers understand there they are, the bottom line in the end. And if they don't go along, everybody else has to scurry and come up with another solution. That's interesting that those workers had that sense to vote that way and to force a better deal to come down the pike. The second example is United Auto Workers in Mississippi, which is culminating a 15, 14 or 15 year effort to unionize a Nissan automobile plant in Mississippi. They're very hopeful. They have filed for an election within the next month. And that too may be a straw in the wind for the unionization. Remember in the Great Depression, the American working class decided to join unions as a way to defend against the falling incomes and falling wages that a depression always means. In this catastrophe. Since 2008, the second worst collapse of capitalism in its history, workers have not yet made that decision. So it's an interesting question whether it's a straw in the wind that the auto workers in Mississippi may in fact lead the way to a resumption of that kind of response. My next short update, I wish it could be longer, takes me back to something I have done over the last year more than once, and that's to talk about the behavior, because it's important for economics of the new Pope. He's not so new now, Pope Francis, but he continues to do remarkable things. Things. And I want to talk about two of them that have economic impacts. The first has to do with a conference held in Rome from 28 June to 1 July, just passed by the Confederation of Trade Unions in Italy. That's roughly the equivalent of the AFL CIO here in the United States, it is the major trade Union. Union organization. It's already interesting that the Pope addresses them as he has before. But I want to read to you a few of the sentences that come directly from that speech, which I read with enormous interest. He says, for example, we must think. I'm quoting now from Pope Francis. We must also think of a healthy, healthy culture of idleness, of knowing how to rest. This is not laziness, it is a human need. When I ask a man or woman with two or three children, tell me, do you play with your children? Do you allow yourself this idleness? Well, you know, when I go to work, they are still asleep, and when I return, they are ready in bed. When a worker says that, according to Pope Francis, here's his this is inhuman. Along with work, there must also be other culture, because a person is not only formed by labor, because we do not always work and we must not work always. A good job is one that gives you time to be a human being, says the Pope. I'm now quoting again. And when the right to a fair pension is not always recognized, and not to all, then it is bad. A pension that is fair is neither too poor nor too rich. Golden pensions are no less an offense to labor than pensions that are too low. Wow. The Pope is against too much as well as too little. I wonder how Roman Catholics in the United States are going to digest process, think about what their Pope is telling them. Let me go on with some of the other things he says. He talks explicitly about unions and what he thinks unions should do. We believe the unions are prophetic. That's the word he uses, and here's what he means by such. The union risks losing its prophetic nature and becoming too similar to the institutions and powers that it should instead criticize the words of Pope Francis. Here we go more. The union, with the passing of time, has ended up resembling politics, or rather political parties. Their language, their style. And instead, if this typical and diverse dimension is lacking, its action within businesses will lose strength and effectiveness. The unions movement has its great seasons when it is prophesy, when it helps not only to. To unmask the powerful, who trample the rights of the most vulnerable workers, but who also defend the foreigner the least, the discarded. Pope Francis is urging the unions to represent not only their members, but especially those who don't have work, who are discriminated against, who are the outsiders. The union has to bring change. It's quote, and now I'm quoting again. It's like a watchman who guards and protects those who are inside the city of labor, but also guarding and protecting those who are outside the walls. It is not enough to protect only your members. Now, a couple of sentences that really need to be repeated. I don't have the time, but I want you to hear them at least once. Quote Pope Francis a couple of weeks ago. The capitalism of our time does not understand the value of the trade union because it has forgotten the social nature of the economy of the business. This is one of the greatest sins. Pope Francis is really clear, and his support for the union as a central part of a good society ought to make people sit up and think about what he's saying. But to be fair, the Pope also does things that raise more than a few eyebrows. I want to bring one of those. But because of its economic content to your attention, He made a decision in a letter to bishops. Bread can be low gluten. Excuse me, it cannot be low gluten or gluten. Free bread cannot be used in church ceremonies. However, genetically modified wheat and other materials in the bread is okay. Everything is mixed in this world. And that applies to all the churches too. The final short update for today is a shout out, a shout out of approval. And this one goes to the City of Seattle. Why? Because in recent days, the City of Seattle's City Council, its legislative body, has taken a remarkable step. It has passed a bill unanimously and with the enthusiastic support of the mayor of Seattle, both the past mayor and the sitting mayor. And this bill provides for an income tax to be applied to Residents of Seattle. 2.25% on all income. Over $250,000 for an individual, or over $500,000 per year for a married couple who file together. Let me stop and let that sink in. The City of Seattle has decided to tax its wealthiest citizens nine to zero, was the vote of the City Council to do this. So it's not only happening in Seattle, it's happening unanimously, enthusiastically. What is this about? The State of Washington, where Seattle is located, is notorious across the 50 states for having one of the most regressive tax structures in the country. What does that mean, regressive taxes? That's simply a term. Means a tax that makes no effort to take account of the person's ability to pay. Who's required to pay the tax. In other words, think of a sales tax. If everybody who buys a shirt for fifty dollars has to pay the same five dollar tax or whatever it might be, then that's a tax that makes no effort to discriminate. Rockefeller or Bill Gates or Warren Buffett buys the shirt Pays the same tax as does a person on welfare who buys the shirt. We have in the United States many such regressive taxes. Washington relies on regressive taxes. It doesn't have an income tax. Income taxes have often, not always, but have often been progressive. That is, the rate of tax you pay goes up with the higher income you may be earning. So people who earn at the top pay a higher rate than people who earn at the bottom. That's a progressive tax. In other words, the tax you're asked to pay takes account of your ability to pay. Okay, so what the city council of Seattle is doing is saying, we're not happy living in a state that taxes people without regard to their ability to pay. We believe that to be fundamentally unjust and unfair, which is what many members of the city council said in their comments about this decision they've reached. We would like to correct the unfairly regressive structure of taxes in Seattle by having an income tax, a progressive income tax, because the rate below $250,000 a year is zero, and the rate above $250,000 a year is 2.25%. That's a progressive income tax. For those of you who may not know it, when the progressive income tax for the country as a whole was passed back in 1910, or over 100 years ago, it too was an income tax that exempted the vast majority of Americans from any tax on their income and was only intended to be a tax on those at the top. Over the last hundred years, those at the top worked very hard to use their money to move the burden of taxation, of income taxation off of themselves and onto the middle class, which the middle class permitted them to do. Since the middle class are the vast majority and those above who were taxed in 1910 were a tiny minority, it was clear that the way the minority got the middle class to buy it was to buy the politicians. So it was difficult, or if not impossible, to push against it. We'll see what the future holds in Seattle if the income tax passes. But, of course, immediately a cry went up from the Republicans, from the business community, from all those who stand to lose. And they are going to fight it in court, and they're going to make propaganda against it. They've already begun to do that. So it will be a fight. The people in Seattle who've pushed for this know it. But a unanimous city council and a supportive mayor, which are now settled matters, indicate that the majority of people in Seattle want this, which is one major reason why all of these Politicians support it. And that means the courts will be under all kinds of pressure to go along with this change. To allow the sovereignty of the city of Seattle, the major urban area in the state of Washington, to be played out in this way that the majority of people want it is, in a way, an enormous step. One of the things it ought to do is to inspire, motivate, to create an incentive to cities and towns across the United States, many of whom live, are situated, excuse me, in states without the restrictive laws that Washington has about such things. In other words, it's easier in other states to pass such a law, to get such a law effective in the society and think how it would change. The city of Seattle estimates that the tax would raise about $140 million a year, allowing that city to improve its schools, its parks, to relieve the burden of taxation on those least able to pay. To make the city of Seattle a much better place than it is now. And what and how? By taking 2.25% of the money, over $250,000 that a person earns, or over 500,000, a minimal burden on those at the top. For a maximum benefit for the vast majority of Seattle residents, in fact, including those at the top who will also get benefits from a better school system, a better park system and a less divided by income community. The question is whether this fight will be won or lost. But our hats must go off to the people and to the city Council and to the mayor of Seattle, who've taken an important step in correcting a fundamentally unjust tax system, not only in Seattle and Washington, but in many other parts of the United States as well. We've come to the end of the first half of this program. Please stay with us. In the second half, we're going to deal with some other issues of interest to you. This is a program that is designed to have you get as much as I can do it. An insight into the current economic shifts and struggles. Not only to inform you, but also to give you ammunition to make the kinds of changes the country needs. Thank you very much for listening. Stay with us. We will be right back.