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Welcome, friends, to another edition of Economic Update weekly program devoted to the economic dimensions of our our jobs, our incomes, our debts, those of our children, those looming down the road. This is a new year. We're about to have a new government. And that introduces all kinds of uncertainties into an already troubled picture of, of an economy in decline. I'm your host, Richard Wolff. I've been a professor of economics all my adult life, and currently I teach at the New School University in New York City. As I often do at the beginning of a month, I like to invite all of you, no matter where you are, in the event that you might be in the New York City area at the middle of the month, I want to remind you all and invite you to come and join me at a very historic place here in New York City. It's called the Judson Memorial Church, located on historic Washington Square in downtown Manhattan. The second Wednesday of every month. And so in January, that'll be the 11th of January. At 7:30 in the evening, I give a public talk on the economy and where it's going. It's a chance for me to meet you and vice versa. It's a chance for me to expand on some of the major themes that we don't have time to go into in the length that I would like on a radio show. So if you're in New York, if you're from the New York area, if you're visiting, think about joining us. Wednesday, January 11, 7:30pm Judson Memorial Church on Washington Square Park. Okay, let's jump right in to the new things that are happening in the global economy and in the United States as well. I want to start with a law that went into effect in France on the 1st of January, 2017. It was one of a group of laws passed last May with much opposition from working people across France, because many of the laws that were passed give employers a greater chance to fire workers than they had before without as much reason as they had to provide before, and so on. It was one of the many ironies of a Socialist government, which is what France has pushing through a law that was good for employers and bad for employees. And it had something to do with the fact that the Socialist Party collapsed in terms of its support in the French countryside. So much so that Monsieur Hollande, the prime minister, the President, excuse me, will not run for reelection since his popularity is at a level that would make even folks like George Bush, who left under a cloud, look good by comparison. One law that was not objected to by the working class in France went into effect on January 1st and I thought you would be interested. The new law is as in any enterprise that has more than 50 employees, there has to be a charter of good conduct prepared by the company. And what in particular that charter has to do is enable workers to disconnect from the employer in the hours that they're not working. And the point and purpose of this law was the French workers have been complaining that with modern technology, smartphones, they are getting and being expected to reply to emails at all hours of the day and night, that employers are simply extending the length of the working day without acknowledging it and without paying the workers a nickel more. And the workers don't like it and they want there to be rules governing what they are and are not required to do. And many of these charters are now being written so that workers will be officially allowed not to respond to emails that come after working hours and cannot be penalized for not doing so. It is a way of protecting the effective length of the working day. And I wanted to make that point not only because most workers in most other countries do not have any such protection. It's not just that. It's a way of illustrating what happens when a working class has strong unions and political parties that advance its interests, if not all the time, at least some of the time. So, for example, there is a right to disconnect occasionally in other places. For example, the Daimler Motor Company, the company in Germany that makes the Mercedes Benz line of automobiles a couple of years ago, gave their workers the option, that's all it was, of choosing to not respond to emails when they're beyond working hours, when they're not working with an out of office reply, automatic instead, the company said it was fair to their workers that they could choose instead of an automatic reply, to have all incoming emails that come after working hours be automatically deleted. And therefore there'd be no responsibility on the workers part to have to deal with them, at least not unless they were resent during working hours, the next day, etc. Daimler did that, but other German companies haven't done it and are not required to do it. What's different about France is they're not leaving it up to this or that company. They're making it a rule to protect all working people across the country from doing that. And it's a sign of the power of the working class. Even now, as it shrinks, there is that power that history built up that can't be overthrown anytime soon. So the French Workers are getting the right to disconnect to the envy of workers in most other countries. But then again, that isn't new. In 2000, that's 17 years ago, the law was passed that reduced the working week in France to 35 hours. That law is still in effect. If a worker is asked to work beyond that, he doesn't have to and he or she will have to get paid extra for the time beyond 35 hours. And by the way, the rationale for for both the old law about 35 hours and this new one about the right to disconnect is in order to achieve an appropriate work life balance. That's how it's called in France. It is something that workers in all countries strive for, a work life balance. The difference is if you have working class organizations, you can actually do something about the work life balance beyond complaining about how hard it is to achieve such a balance, which I know many of us do almost every day. Next update. Well, years ago I had a friend and a student and he has gone on to be quite a success and I'm proud of him. And he's a very thoughtful economist. His name is Jomo Kwame Sundaram and he was until recently the United Nations Assistant Secretary General for Economic Development. He has won many prizes for his economic work as well as achieving a very powerful position in terms of economic development. And one of the things he has specialized in is the economics of food, the production of the food we all have to eat to survive and how that affects us. And he recently wrote an article carried by the Inter Press Service and dated. I want to give you the exact date, December 27, 2016, so you can find it on the IPS news agency under his name, Sundaram and S U N D A R A M. And one of the parts of his work that I'm interested in is a discussion of American junk food. And I wanted to give you just the bare results of his research. And again, this is the United Nations Assistant Secretary General for Economic Development. Three quarters, he begins, three quarters of the US Population is considered overweight or obese. And a major part of this epidemic problem, which by the way, exists in other countries too. But it is stunning here in the United States, a major part of the problem is junk food, which are the largest source of calories in the American diet. And here he lists the items that make this true. And I thought you would be interested. Sweet desserts, bread, pizza, pasta and sweetened drinks are the major culprits. And now here's his these Foods are largely products of seven basic food items that are heavily subsidized by the United States government. And I'm going to give you the list of these seven basic foods whose production on farms is subsidized heavily by the US Government. Here we go. Corn, wheat, rice, soy, sorghum, milk and meat. And here's his point. Because they're so heavily subsidized, these items are plentiful and cheap in terms of their prices at the market. Between 1995 and 2010, the United States government paid out 170 billion, that's with a B in agricultural subsidies to produce these seven basic foods. While such foods are not in themselves inherently unhealthy, the very few of them are eaten simply as they are produced. Most of these are used as feed for livestock or processed into cheap products such as sweeteners, industrial oils, processed meats, refined carbohydrates and other processed foods. And then he reaches his conclusion. The same US Government that subsidizes the the production of cheap, readily accessible food in these forms that contribute to obesity, the same US Government that does that is constantly urging the people to eat less of those foods and more fruits and vegetables, et cetera, et cetera, yet it doesn't begin to subsidize the kinds of small local farms that can produce fruits and vegetables near to the markets where they are consumed. The subsidies go to big agribusiness that has the political muscle to get the subsidies. And so the government is in the peculiar position of being pressurized by big business to subsidize them in ways that lead to overweight and obesity, while another part of the same government lamely tells us we shouldn't be doing what the big subsidies are constantly doing. Making us do it is a contradiction in the way the government works. And the end result is an epidemic of overweight and obesity. And a key part of it is the profit driven power of agribusiness. Enormous mega corporations. Third item for today, universal basic income. It's in the news more and more as a number of countries around the world and I've reported on this, are making experiments to see how it works. If you say to people who are unemployed, people who are poor, people who are getting various kinds of government welfare, let's stop all of the playing around with details and let's just give everybody a minimum basic income, called a universal basic income ubi, as a way of taking care of folks, which might in the end be simpler and cheaper for everybody than the crazy quilt of programs and administrators of programs that we have now. And to this idea, a great cry of opposition has arisen. And it goes something bizarrely like, gee, it wouldn't be good to have some people who work for a living and other people who earn a living without working for it, because that kind of difference would create tensions, envies, animosities, and so on. And clearly this criticism has a point. There are real questions about the appropriateness of having some people required to work for an income and other people not required to work for an income. And of course, it would be even worse, wouldn't it, if the income you get if you work were less than the income you got from not working? I understand those are significant questions that I share in questioning the notion of a universal basic income. But I want to protest the notion that to give poor people a basic income without working would be something new, something revolutionary, something different. It isn't. Capitalism is a system that has always done that. And let me explain. Every day across America and indeed most other countries, the following event happens. A person. Typically a person in the top 10% rich people in the country, and particularly in the top 1%. Every day, some of those folks do the they open the front door of their home. They walk down the lawn, on the sidewalk, to the mailbox. The they open the mailbox, and in there they find a check. And they tear open the envelope that contains the check, and they pull out the check and they say, oh, wonderful. This is a check for. And typically, if they're wealthy, thousands, tens of thousands, hundreds of thousands of dollars. This is a check called a dividend. It is sent to the owner of shares of stock in a company. It is income for that owner that has nothing to do with any work that person did. That person does not work in any of the factories, offices, or stores operated by the company in which he or she owns shares. The only work they did for the $10,000 check they got was walking to the mailbox and tearing open the envelope. And if you want to call that work, that's right. In a capitalist system, there are two ways to earn income. One is by working and getting paid a wage or a salary. Most of you are quite familiar with that way. But there's a second way you can own something. Land, a factory, a bunch of money, machinery, that kind of thing, shares of stock. And if you own them, you can get an income even though you don't do any work at all. In fact, most of the richest people in America today earn most of their income from property, not from labor. Moreover, capitalism doesn't care how you got the property. Did you inherit it from your grandmother? Maybe she did some work, but you didn't. Maybe you stole it. Maybe it's the result of a corporation that avoided paying taxes by some legal or illegal gimmick and gave you the money instead as a dividend on a share of stock. We don't care. In capitalism, if you own the property and you put it into the hands of a business, you get a cut of the income generated by that business. So I don't want to hear people say to me, giving poor folk a universal basic income. Giving poor folk or unemployed folk income without working is some revolutionary new idea. It isn't what the universal basic income does, which is why half the people who oppose it do so, is to say, hey, why are the only people we give income to without working ones who are already rich, the people with the highest salaries? You guessed it, they're the ones with the most property too. We distribute income without working to the people who don't need it. And the UBI campaign is at least courageous enough to say, mightn't it be better, mightn't it be more consistent with our values if we have them, to distribute the benefit of income without work to those who need it most, rather than in the capitalist system, to those who need it least? Next item. This is a story I'm loving to present to you. It's about a community located in a place I had never heard of called Fridley F R I D L E Y Fridley, Minnesota. And my source for this is a program on National Public Radio produced and hosted by Daniel Zwerdling. Those of you who listen to NPR are familiar. It was a program he did for the Daily show they call All Things Considered. Well, what happened in Fridley, Minnesota is a lesson, and so I want to convey it. In Fridley, Minnesota, there is a mobile home community called the Park Plaza neighborhood. Don't get carried away with the word Park Plaza. I think most of you know what a mobile home community mostly is close to an important downtown area in Minnesota, I believe Minneapolis. Fridley in any case is a suburb and people who work are able to afford the low cost housing that a mobile home park enables. Here's how that works. A capitalist enterprise buys some land and probably buys a whole bunch of trailers, locates them on the land, hooks them up to water and electricity and so on, and then proceeds to sell the individual mobile homes to individual families at a relatively low price. They having gotten them for a low price and then charges the folks a hefty fee for all the services that the company provides. The company that owns the land and set this whole thing up is a profit making enterprise, which means they try to deliver the fewest possible services they can while getting the income from all the rentals, all the fees paid by those occupying the mobile homes. And so what you often get, and by the way, often 8 million people live in mobile home communities in America. So we're not talking a rare phenomenon, hardly, but these are people who have a hard time making ends meet. That's why they live in a mobile home community like this. And often they are neglected because the profit driven owner operator of the enterprise runs it that way, charges as much as he can and delivers as little as he can get away with. The people in Fridley, Minnesota were disgusted by what the conditions were. Potholes in their streets, yards that were not maintained, grass that was not cut, you can imagine. So they got together and, and here's what they did. They discovered that they were all angry and there were lots of them. And they got together and they created a cooperative. And I want to tell the story. They discovered that there are helps in Minnesota, as there are, by the way, in many states, for people in such a situation to get technical help and financial support. And to make a long story short, the people in this mobile home park got together, all of them. They had meetings, they had discussions, and they got together and they arranged a loan from a bank that enabled them to buy out the company to get rid of the capitalist enterprise that was running their mobile home park and run it themselves. A cooperative. Well, what does that mean? It means they were all jointly co op owners. They owned the cooperative themselves. They were the company, they themselves that provided the service to themselves as individual homeowners within the property. It's an owner's cooperative. In that way. It's not so different from food co ops around the country where where the customers who buy the food from the store become the owners of the store. And it's a way of making sure that instead of the whole operation working to the benefit of a tiny number of people who own the business, the whole operation works to the benefit of the whole community that depends on it. The next step, which they're starting with in Fridley, Minnesota is to realize that the benefits of a cooperative ownership, the mobile home community can be extended to make the benefits of a cooperative work process in maintaining the property. The same benefits come from having the workers who mow the lawns and clean the things and maintain them. Have that be done cooperatively rather than for the profit of another operation. That the notion of co op ownership can become co op work organization. And that is an important lesson because we have in America many, many thousands of what we call ESOPs, ESOP Employee Stock Ownership Plan. These are companies where the workers within them have bought the company. But what often happens is that the process of co op stops there. They cooperativize the ownership but they think they have to leave the operations of the enterprise to in the hands of a handful of people who are the board of directors and who run it in a typical capitalist profit maximizing way. They slowly then discover what the folks in Fridley are already ahead of them on. Namely that the same benefits that come from cooperative ownership are available from cooperative operation of the enterprise. Okay, next economic update that we have time for and we're pressed. Well, it's about Denmark. Denmark is an important country. It provides an extraordinary service that I wanted to tell you all about because that service is in Trouble. Here's the 98% of children and we're talking very young children are in daycare in Denmark. It has an unbelievable. It's very rare to find a young child that's not in daycare. And one of the reasons is that the government massively subsidizes daycare a month of all day daycare, if you wish to take advantage of it, costs about $200. The rest of the cost is borne by the government. So an individual family pays $200. And that's why for example, a huge portion of women in Denmark are working full time or part time because they have a first class care under the current pressures in Denmark, which are like those in England and America. They are pushing to lower taxes on wealthy people, therefore to bankrupt the government, therefore to take this benefit away. And that fight is happening in Denmark. But we'll be watching it because it's the fight of a mass of the population which has come to value greatly the services they get and putting them in a very different position from working people elsewhere. We've come to the end of our first half of the program. I want to remind you of course of the two websites where you can go to find out more and to communicate with us. As we always remind you, rdwolff with two Fs com and democracyork.in fox. Please make use of them. Thank you very much for being with us this first half hour. I think you will find the interview that comes in the second half hour fascinating. Please stay with us. We will be right back.