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Sam. Saint gonna change.
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Welcome friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives, our jobs, our incomes, our debts, those of our children and those coming down the road to meet us whether we want it or not. Unless, of course, we do something about it. I'm your host, Richard Wolff. I've been a professor of economics all my adult life and I currently teach at the New School University in New York City. As has happened a good bit, I opened the program with some announcements of interest I hope to many of you, so bear with me very briefly as I go through them. They all have to do today with our website, something we update every day, we maintain at absolutely no cost available to you 247 and I hope you make use of them the first one is democracyatwork.info and the second one is rdwolff with two Fs.com Here are some special things that these websites will make available to you if you visit them. The first if you go and you look at democracyatwork.info calendar, you will see a listing of events where I'll be speaking in various parts of the United States, sometimes with guests that have been on this program, sometimes on my own. And if I come to your area it would be a good time for us to meet and I would love to meet you. In the coming weeks I will be in the Bay area in California, October 2nd in Oakland, October 5th in San Francisco. A week or two later I will be in the Tampa, St. Petersburg, Sarasota, Florida area, speaking at a university and speaking also as a guest of WMNF, etc. In that area. So if you're interested, all the particulars are available@democracyatwork.info calendar. If you are interested in becoming a sponsor or an endorser of this program, please visit the same website, democracyatwork.info sponsor to learn about how you can do that and how we can work a relationship with you around that kind of support. And finally, a new one as an extension of the democracyatwork.info website. I'm excited to be able to announce the forthcoming launch of Co Op Talk, a news blog dedicated to the advancement of worker cooperatives and as an alternative way to organize business from the top down, hierarchical capitalist way that we discuss so much on this program. Co Op Talk will be rolling out original content aimed at showing how and why worker cooperatives are a feasible solution to our current economic system. We are looking for volunteers. We are looking for people involved in co ops who might like to share their stories and their struggles with with us. We want to become the go to place where news about analysis of discussions around worker co ops will be featured and a place where people who are academics studying it, who are people who want to start such a co op. This is a place we hope you will go to learn to find friends and advisors a general all purpose devotion to the worker co op as an institution. If you're interested in getting involved in any way, please email the person in charge, Paul Sliker at and here's the following address blog blog blogemocracyatwork.info. once again, any questions, thoughts, volunteer anything about this project Co op talk should be sent to blogemocracyatwork.info all right, let's turn then to the updates for this final part of September 2016. Having talked about him for a while, I now want to report on the latest regarding a fellow named Jeremy Corbyn. C O R B Y N as many of you know, he is often referred to as the British equivalent of Bernie Sanders here in the United States. There is of course a difference and the difference is all important that Mr. Jeremy Corbyn, a socialist contesting for the leadership of the Labour Party in Great Britain, was elected by a majority of 59 plus percent last year and that has changed British politics for a long time. But many in his party, those associated more with the Tony Blair type of leadership of the Labour Party, were very upset by Mr. Corbyn's rising to the top of the Labour Party. By the way, done with the entrance into the Labour Party of hundreds of thousands of new members, mostly young people who hadn't been involved in British politics at all until that time. Anyway, the struggle inside the Labour Party came to a head with another election that was finally decided about a week and a half ago. And guess what? Despite the effort of those associated with Tony Blair, the right wing, if you like, of the Labour Party, not only did Corbyn win again, but he won with a larger majority than than the first time around. He got 62 plus percent of the vote to his opponents, 38%. What does this mean? It means that the Leadership of the 2nd Most Important Party in Great Britain is now firmly in the hands of the equivalent there of what such a victory by Bernie Sanders and his supporters might have meant here in the United States. And therefore it's something to think about because it's another sign that the old establishment that has governed places like Britain, Western Europe, North America, Japan is in deep trouble, losing supporters at an accelerating rate with people looking for alternatives. Where these people will find their way is yet open. We will have to see and we will be monitoring it. But these folks, like Jeremy Corbyn in England, are becoming a beacon for all kinds of disaffected voters and citizens in that country. And that is going to change world politics, not only the politics of a country like Great Britain. Second update for this week. Very interesting. 14,000 drivers for the car services Uber and Lyft here in New York City have signed cards that they wish to be represented by the Transit Workers Union here in the United States and in New York City. This is a sign that is extremely important. It's a sign that the fantasy, which is all it ever was, that these new car services like Uber or like Lyft and there are others where some kind of technological event is put to rest. They weren't technological events. True, they were using software and apps in a new way that was somewhat different from the dispatching done by cab companies for decades before. But they weren't really about the new technology since the cab companies have now adopted that kind of technology and are using it pretty much themselves. What it was always about was an attempt to get around trade unions. So I want to recoup that history so no one makes the mistake again. In the early days of cab companies, there was a problem. Everybody got involved in the cab business. It was easy. You just had to know how to have, how to get a driver's license and drive a car. And ipso facto you could offer taxicab services and many people did. It was a chaotic industry full of little individual and not so little group activities. Not much care was taken, who the driver was, how competent he or she might be, what happened if there was an accident, etc. So pretty quickly complaints began to rise. Riders were injured, riders didn't like the attitudes of the driver, driver was unable to manage the job real well, etc. Etc. And then there was gouging of prices, etc. So guess what happened? Driving became difficult. Companies that had a lot of drivers began to squeeze the drivers and the drivers reacted by forming unions. This story is as old as capitalism has been around. The workers to defend themselves, formed the union and the customers to defend themselves, demanded that the government get involved because they were taking too many risks riding in these cabs, that the driver may not have been trained enough, there may not have been insurance in the event that there was an accident, et cetera, et cetera. Make a Long story short, the government got involved to make sure that taxicab riding was safe to for the public. And the way they did that was to pass a whole lot of rules. The driver had to be vetted, the car had to be insured, there had to be all kinds of inspections to make sure the car was safe to drive in, etc. Etc. And it was also at that point that the unions emerged and put pressure on the government to make sure that the union could organize, these workers, could approach them and say, look, if you would rather be protected by a union, we're here. You can do it. And a deal was struck, as happened so often. A deal between the workers and their union and the companies running the cabs and the government. And here's what was done. A price was established for a taxi ride, a price that was sufficient for the company to make a profit, for the workers to earn a decent living and to have proper benefits, and for the public to have the assurance that the ride was safe, the driver was properly trained, etc. And so it was for decades. This worked out perfectly well. What Uber and Lyft represent is an attempt to get away from this arrangement. They would offer the ride more cheaply. They would offer it under different circumstances. And how were they able to do that? Because they had the new app and the new technology. Not at all. That didn't make much of a difference. What they had was drivers who were not part of a union, at least not yet, and whom they could treat in that manner, cutting their wages, cutting their benefits. And they weren't governed by the government's rules because they weren't technically a taxi company, they were a riding service. So their drivers, who knows how much training they got, who knew whether they had proper insurance. And all that has happened since they began is they've made a lot of money, they've made high profits because they don't pay their drivers very well, because they don't have to pay the costs of what the government regulations demand of the taxis, etc. Etc. And now that's changing. Why? Because people are having problems with Uber and Lyft. What problems? The very problems they had with taxis way back when. And the end result is governments are getting more involved in regulating the Uber Lyft type of service. And the workers are joining unions, like the 14,000 in New York joining the ATU this last few weeks. And I just wanted to make sure everybody understood how this old capitalist story is being rerun in what claims to be a new industry, a gig economy. And all the other fancy phrases. Next economic update has to do with the great state of Kentucky. Kentucky maintains a retirement program for local and state employees, of whom there are currently covered 355,000 citizens in the state of Kentucky. There's something called KRS, Kentucky Retirement Services. That is the agency of the Kentucky government whose job it is to collect from everybody's paycheck who works for a state or local entity a portion of their weekly pay and to invest it so as to accumulate pension funds so that when folks reach the age of retirement, 65 or so, they can get the pension. That was part of why they took the job. That was part of how they planned out their lives. Well, it turns out that these retirement services, and this is true in every state in the union, get into very cozy relationships. I'm choosing my words here carefully. Cozy relationships with investment companies, stock brokerages, banks. Why? Because if you can get a contract with the retirement services in a state, you can make very big fee income by managing how to invest all that money that is taken from all the public employees. And you can sometimes get even corruption. Can you imagine in which monies are given to people for investment that may not be invested very well because the people doing it are mostly interested in those fees and not at all concerned about how well the investments do because they get the fees. Either way, what is at stake is whether or not the state in question can honor the pensions owed to and promised to the state employees. So it was very interesting when a community in the northern part of Kentucky, Fort Wright, to be specific, went into court claiming that the Kentucky Retirement Services had made imprudent investments and also illegal investments, and that they were worried that the pensions would not be funded by for their citizens who were working for the government of Fort Wright, Kentucky. And it went all the way up to the highest court in Kentucky, which decided. And that's why it's on my agenda today, which decided, and I believe this is a first in America, that the retirement services are not immune from lawsuits, that they can be questioned, they can be challenged to see whether they are in fact managing the money for the employees of the state and local government the way they were supposed to. It is my guess that many communities in many states across the country who should be worried about the condition of their pensions. Let me remind you, for example, that the largest fund within the Kentucky system is badly underfunded. That is, it doesn't have anywhere near as much money as in it as would be necessary to meet the obligations it is legally required to meet. And that is not unusual. It is already a crisis in Puerto Rico. It's a crisis in the state of Illinois. It is a serious problem of what has happened to the pensions of Americans that they thought were securely managed and safe in state governments, and it turns out, not so much. Next update, I want to report to you about health insurance, something Americans are very, very concerned about, and rightly so. And I found a very interesting summary of the situation in the Consumer reports magazine for November 2016. So if you're interested in the details behind what I'm about to report to you, the that's where you can go to that November issue of Consumer Reports and get the details. But here is the crucial information. First of all, even though President Obama and others have spoken about the improvement of the health insurance situation in the United States and there has been some improvement, the reality is that as I'm speaking to you today, and based on statistics from the Kaiser Family foundation, one of the most respected sources of statistical studies of American health insurance and American health services, According to them, 10% of the American population remains without any medical insurance at all. That's 32 and a half million people for the richest country in the world, or at least one of the richest countries in the world. That's an extraordinary statement to make and tells you something about how far we have come, or better not come. But even more important for most Americans is what has happened to the amount of money they have to spend as individuals to get medical insurance. 49%, roughly half of the American people get their health insurance from their employer. That is, it comes with the job that they have. So half of our people get insurance in that way. What do they pay out of pocket? How much is it costing them? And here the statistics that I'm about to report to you really should make your hair stand on end in terms of the implications for our society. In 2004, according to the Kaiser Family foundation, family coverage, which is what most workers have cost the family, $2,600 a year. That was the outlay the family had to make that covered the deductibles the CO pays, things like that. 2015, roughly 11 years later, the last year for which we have statistics that had risen from the 2,600 in 2004 to get ready $4,900, it had doubled the amount of money in 10, 11 years that a family has to pay, the half of Americans who have health insurance at their job had doubled. This has to extraordinarily stretch family finances, since you can be very sure that their income did not double over those last years. It didn't come anywhere close to doubling. And by the way, it's the same for individuals. If you didn't have a family policy, your individual policy cost you $550 in 2004 and $1,071 in 2015. In other words, 32.5 million Americans have no health insurance at all. Half of Americans have a health insurance. The cost to them has doubled in the last 10 years. We are not taking care of the medical needs of our people anything like we could, we should, and that other wealthy countries like us do. And people have been wondering about the statistics that we're not using medical services the way we did as a nation 10 years ago. Well, here's a big people who have high co pays, people who have to shell out huge amounts of money for health insurance, figure out every good reason and quite a few bad reasons not to go to the doctor when they need it and thereby risk these diseases becoming more difficult, more costly, and more problematic for their health than they had been before. Last point on this. The Affordable Care act provides yet another way for people to get health insurance if they don't have it on their job, but they really need it and they want to pay for it. So I looked into what the rate story is there too, and what I found, again thanks to the Kaiser Family foundation, is the in 2016, the average monthly cost to be covered under the new Affordable Care act, what's often called Obamacare, was $257 per month. In 2017, this is scheduled to go to $281 a month. So in one year, the basic average cost under the Obamacare plan is scheduled to go up 9%. Statistics currently indicate that the average wage of the American working people will go up between 2016 and 2017, if they're lucky, by two and a half percent. So if your wages go up by 2.5% and the cost of medical care for those with the greatest trouble getting it goes up by 9%. You understand that the sense so many Americans have that they keep falling behind economically is not that they're misinformed. It is an honest and a correct understanding of the economic realities that they face. Okay, before we make our break in the middle of our program, which is coming up in a couple of minutes, I wanted to remind you again, please make use of our websites democracyatwork.info and rdwolff with 2F's.com. we maintain them for your use. There's no charge whatsoever they're available any and all times of every day. And in particular, I want to remind you of our exciting new service which is going to be called Co Op Talk and which you can access by going to blogemocracyatwork.info and that we invite you to partner with this new service to provide us with articles, news, information, debates, analyses, anything having to do with how worker co ops are growing, how they offer an alternative to the economic system we live in and the problems that it has, many of which we elucidate and discuss on this program. This is a new service. Paul Sliker has taken charge. We are very grateful to him for doing that. You can reach him at blogemocracyatwork.info and we invite you to become part of, to write for, to send material to, to volunteer for Co Op Talk at our website. Last item for which we have time today. Over the last few days, much excitement has been devoted to the first debate of the presidential election between Hillary Clinton and Donald Trump. I am not going to say anything about the details of it. The press is full of that. You don't need me for that. I would like to say one thing which is one of the central economic problems of the world today is a level of inequality that takes us back to ancient Egypt and the pharaohs. According to Oxfam in England, as I've reported on this program, the 62 richest people in the world together have more wealth than the bottom half of the population of this planet, three and a half billion people. Since the 62 richest people in the world are mostly American citizens, we as a nation have a particular responsibility to do something about that kind of inequality. Neither candidate spoke about it, dealt with it, offered anything remotely like a solution for it. And that says more for me about the election and the campaign than anything that was discussed between them. Thank you very much for your attention. Please stay with us. We will have our usual short mid program break and then we're going to have an extraordinary interview about a new book by a person you will want to learn more about and read more of in the time to come. Stay with us. We'll be right back.
