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Sam. Saint gonna change. Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives, jobs, incomes, debts, those of our children and those looming down the road. 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. I wanted to begin today's program with another reminder that there are two particular things that we are working on these days where we would like to ask your help and your partnership. The first is in scheduling speaking engagements for myself. I like to travel around the country. I like to meet all of you. I like to have a chance to have a good evening's time to develop some of the analytic issues we focus on on this program to find out your interests in a more personal and immediate way. I do this for trade unions. I do it for community groups. I do it as fundraisers and public services for the radio stations that carry this program for a whole host of audiences of all sizes, types and interests. So, so if that's something you might like to explore with us, please use our websites. I'll give you their name in a moment to contact us and we will follow up to see if we can arrange one of these visits to you, to your area. And the second thing is we are organizing action groups, people who want to take the information we provide, looking at the situation we all face and want to do something together with their friends, their neighbors, their co workers, begin to have the action groups that can together make change. So if either of those kinds of projects, if you like, are of interest to you or something that you might want to participate in, please get in touch with us. We will follow up. This is an ongoing project. We're very, very gratified by the responses you've already provided, but we're open for business and looking for more. Alright, let's jump in the Updates here for June 2016. Well, last month a small victory was achieved and because it kind of blew by without too much attention, I wanted to make sure you were all aware of it. There aren't that many victories like this, and when they're there, they, they should be celebrated. It does teach us, as indeed several of today's stories do, that struggle does win things and that's a good reason to do it. This one has to do with the sugar industry. For many decades, sugar has been a problem in the American diet and in the American economy. In some ways, it's a little bit like cigarettes and tobacco in the sense that there Are companies pushing a product which, if taken in the wrong way, if taken in the wrong quantities, can be and has been dangerous to your health? Cigarettes and tobacco were that, and sugar has been that. Clearly, endless amounts of scientific work have demonstrated beyond all reasonable doubt that excess consumption of sugar has a lot to do with the obesity problem of the United States, which is severe, with the diabetes problem in the United States, which is severe, with the damage to teeth, which was severe, although has been dealt with at least to some degree recently. And the history is always the same. Efforts by citizens groups, medical groups, advocacy groups of all kind, running afoul of the opposition and the well financed opposition of the sugar companies and of those industries that use a great deal of sugar and that fill up their products with a great deal of sugar. So it is with great interest that I noticed in May a victory in this case. It was the U.S. food and Drug Administration in Washington that announced that it was going to make some changes in sugar labeling of products. It made that announcement back in 2014 after, as I say, decades of struggle. And then finally, in May of this year, they finally came out with a decision. They were going to require labels on food in the United States to carry with a bolder typeface so that people could actually read it and see it, the quantity of sugar in products, food products. And this requires a bit of explanation because there's two kinds of sugar in food products. One is the sugar that occurs naturally and then the other is what's called sugar added. So you find out that the label, the new label that has now been decided over the opposition of considerable numbers of these industry groups, the new label says this is the total amount of sugar in the product and this is the amount of sugar added, that's extra sugar put in by the food manufacturer to jack up the sweetness in the hopes of more sales. And I wanted to celebrate the FDA for sticking with it, to thank Michelle Obama, who had something to do with championing all of this and deserves some of the credit, and for all the people in the advocacy groups who pressured the soda manufacturers, the food manufacturers and so on to overcome their opposition, which had been so successful and for so long. If I had time, but I don't to go into the details, I would have. There were some companies that were better than others. And in dealing with this, what I wanted to do though, was to remind you of the long standing lesson that all of this contains. Struggle works. It takes a long time, way longer than it should have. We'll never know how many people suffered sickness illness, even death from diabetes, from obesity. How many people's teeth were ruined. That's all criminal behavior. Criminal results. Criminal in the general human sense, not so much the legal sense. Behavior that we should never have had to struggle with to overcome. But that's how capitalism works, vested interests being what they are. So I wanted to leave you, though, with the following if you're interested in the details. The best story I found was in the Washington Post, dated May 20, 2016. An article by Roberto Ferdman, F E R D M A N in the Washington Post gives you all the basics. But to give you an idea of how severe it is, here a few statistics. The United States According to the article, in the United States we take in on average every man, woman and child, 126 grams of sugar a day. That would be the equivalent of drinking three 12 ounce cans of Coke. That's how much sugar we take in. To give you a sense of proportion, that is more than twice the average of the 54 countries that are currently surveyed by Euromonitor, that include countries like Britain, Canada and many others developed economic countries. So that we are off the chart in the amount of sugar we take in. According to the FDA, there ought to be a daily limit of 50 grams of added sugar. In other words, we should not consume more for our health than 50 grams of added sugar that is added to what's already naturally occurring in the products we consume. So that if you were to accept and if you were to abide by the 50 grams of added sugar per day, you would have a problem, for example, with one can of regular Pepsi. Why? Because in one gram of regular Pepsi, it has 69 grams of added sugar. In other words, one can of Pepsi alone puts you at 138% of what you're supposed to get per day. So we still have the problem. The question now to see is whether decades of struggle to get a label on the item will indeed do something to curb this consumer good from the damage it has done to the health of the American people. Now, another small victory in another corner of the world, but one again that deserves some attention. This time we're going to go to Sweden, and in particular to the major city there, Gothenburg or G O T H E N B E R G Gothenburg, Sweden. There have been an experiment. There's actually been several of them, but the one that I want to talk about has been going on now for quite a while and there are some results and that's why I'm bringing it to your attention. The experiment in Question is to reduce the length of the working week from eight hours a day to six hours a day, from a 40 hour week to a 30 hour week. And in particular the way they've organized it in Sweden you work five days a week, but you only work six hours, not eight hours. This is interesting. Why was this done? Well, it was a proposal pushed onto the government of Gothenburg by the Left Party, a political party there, quite influential, which argued basically that a 30 hour week is both more humane, both more in line with Swedish values and would in the end be better for business. Something which the business community disputed. As you might imagine, the argument of the Left Party was over the 40 previous years in Sweden, with a 40 hour work week, there had been a slowly but steadily rising problem of sick leave. More and more Swedish people taking sick sick leave from their jobs, and more and more choice of early retirement by people who said apparently that they were retiring because in part they were exhausted. Well, they've made the experiment. It's lasted long enough. They've surveyed the results. They've looked both to the businesses involved and their spokespersons and to the workers involved. And according to the New York Times story carried on May 21, 2016, the project has been a roaring success. Even the businesses involved and the offices involved say that with shorter work, the workers have shorter workdays. The workers have become markedly more productive, have suffered markedly fewer sick days and are much more energized and happy about the work experience than it was before. Let me express clarity here. They're paid exactly as much as they were before. They work two hours a day less, but their pay is the same. So this is a cut work week with no cut in pay. Wow, what an interesting idea. Here was a. An experiment with something probably all workers imaginable would want over the objections of business, that it would hurt the profitability and, and the efficiency of business. Turns out the business leaders were wrong and that this experiment was successful. Now, clearly it might not work in another country, it might not work in different industries. There are all kinds of questions that can be raised about such a study. And that's all well and good, because the issue isn't to establish the universality of this, but it's to learn a lesson that the people who may know better about the work process than the employer are the employees. And allowing them to make certain decisions and to make certain experiments is in the interest of everybody. And that what's good for workers isn't necessarily what is to be opposed by the employer. That there are a Number of things going on here that that can teach very valuable lessons to working people and to their employers. It also raises the question what about asking about other dimensions of the workplace? For example, most workplaces have business leaders, employers who worry rightly or wrongly, that workers are not paying attention, that workers are spending too much time in the bathroom, that workers are distracted by the Internet, that a whole host of things and so they use money to hire supervisors to install equipment that spies on workers. And that the combination of these kinds of steps lowers the profitability of the business, angers and builds resentment in the workers who are intruded upon, spied upon, manipulated and so on. If workers were granted a greater degree of self management, might you do 2 improve the workplace atmosphere, improve the workplace productivity and save the workplace the costs of expensive and often counterproductive supervision. The experiment would have to be made. And of course the next logical step is to ask what about making workers their own directors? What about making workers play both sides of the relationship? Employee and also employer question whether the system might not work better, the system of production of goods and services if we got rid of the old stale and by now ineffective pattern of making some people employers and other people employees. Why don't we overcome that soul searing division? It's really not that much more radical than saying hey, 40 hours a week shouldn't be written in stone. Let's see whether we can't do better with 30. They did that in Gothenburg, Sweden. They did it and they measured the results. And the results are what I told you and what teach us this valuable lesson. Next update. This one has to do with a decision by Citibank, one of the biggest banks in America, based in New York City, Citibank to move 150 jobs from their offices in Hartford, Connecticut to their offices in Tampa, Florida. This kind of move happens all the time, but it raises very important economic issues that I want briefly to discuss. Why did Citibank do this? Well, it doesn't take more than two minutes to look at the literature, even what Citibank says. So this is not a question of me having to do the research to see what lies behind because. Because my research about what lies behind Citibank is about the same as what Citibank itself says. This is a response to quote unquote incentives. That is the state of Florida, the city of Tampa are providing incentives. They're using taxpayer money, taxes raised from the citizens in Florida to induce a bank in New York to move jobs from Connecticut. Hartford is the capital of Connecticut down to Florida. Looking into it, here's what I learned. There's an incentive plan of which this move is a part. In the end, it will move 1,163 jobs, I believe many of them from Connecticut, maybe all. By 2018, these jobs will be moved to Tampa, Florida area. In exchange, Tampa, Florida area has provided $14.9 million worth of incentives. And that works out. I did the arithmetic to about, let's see, $13,000 per job created. So Tampa, Florida is paying $13,000 of taxpayer money to get those jobs to come from Connecticut to Florida. So whatever the benefits to Florida are from having those jobs and having those incomes paid, and let's be clear, the jobs are not necessarily going to go to Floridians. It's possible that people from Connecticut will move. It's possible that people from other states will be brought in by Citibank or by their own devices. So that's an open question. We don't know. And then there's the question of what will be the consequences of having those jobs filled in Florida. My guess is there will be some positive effects on the Florida economy. Having those people earning about roughly $75,000 per job will be the average pay. They will spend that money in Florida. So there's clearly going to be some gains in Florida. But of course, if you're an economist and you're thinking about the United States as a whole, whatever the gains to Florida, you'd have to weigh against them, the costs. One thing is that that $15 million that Florida could have used for all kinds of other things won't be available for those other things. They'll either have to not do $15 million worth of other things, or they'll have to raise $15 million more of taxes. And that'll be a negative impact on Florida. Then too, there's the negative impact on Connecticut. It is going to lose all those jobs. It is going to lose all the purchasing power that those people had. They stayed in Connecticut would have made. The stores in Hartford will have fewer customers. They may have to lay off workers who in turn will be unable to spend money. A rational way of organizing where industry goes in the United States, which would have to try at least to look at the costs and benefits of this move and decide whether it pays. Now, let's suppose, and this is often the case, that it is bad for America. That is, the losses in Connecticut outweigh the gains in Florida. So from the point of view of the United States, this isn't a good move to, to make the problem is the United States didn't make the investigation and the United States didn't weigh in. In fact, the free private enterprise in this case, Citibank, made the decision all by its lonesome. And it did it because it was profitable. It did it because when they looked at the costs and benefits and got the free handout From Florida of $14.9 million, it made it a privately profit for them to do, thanks to the nice fat subsidy from Florida. It might be good for Florida, and it certainly is good for Citibank because otherwise they wouldn't have done it. But it's bad for the United States because the losses in one part of the country might be greater than the other. We don't even look at that question in this country. We don't even determine what the case is. And we don't do anything to make sure that what's bad for America isn't, in fact, what is privately decided by these companies. And here's the worst of it all that will now happen because we do not have a rational way in a capitalist economy like ours to have these decisions made properly. It's a failure of our capitalist system, but the failure is worse. And here's why. Connecticut will likely respond to all of this by thinking, oh, my goodness, we better offer incentives. I'll use the word these folks like when they write their reports to prevent more companies from doing what Citibank did. And indeed, other states looking at this whole thing say, hey, if we had known about this, we might have offered Citibank even more money. Not just 14.9 million, I don't know, maybe 20 million, maybe 30 million to come to our state, Arizona, or maybe some other state where Citibank has already some employees, as it does in Florida. In other words, this is going to be another moment in what is widely and correctly called erased to the bottom. That is, we are driving all the cities and states of America to compete with one another for corporate location decisions. More and more tax money is being used not to provide goods and services for the citizens of the states paying the taxes, but to provide what are simply bribes by another name. In this case, the name incentive to get companies to come. And of course, the companies seeing this game for what it is, will play the cities and states against one another. Even if they're not thinking of leaving a particular city or state, they'll tell the local officials we're thinking about it. And boy, would it help us in our thinking if you provided some incentives. Or maybe they'll go out and get a friend of theirs in a city government somewhere else to offer an incentive just so they can take it to where they already are and see if they can't do better. You understand the picture. We are being held hostage, we the taxpayers, in a game that we are structured to lose as more and more of the city and the taxpayers money is being siphoned into the coffers of private enterprise as they make us beg and compete for where they're going to locate by shifting more resources and out of the public domain and into the private domain. This is no way to rationally organize the decisions about where production happens, where offices are located. It's what corporations want because it draws more and more public money into their hands. So the next time you hear some private enterprise enthusiast tell you about how America is to be so thankful for the private enterprise system, please remember this story occasioned by the move of Citibank out of Connecticut and to Florida as a very powerful co example or counterexample of what the enormous costs are to us as a people, to our governments, to our taxes and to the efficiency of our production systems. By allowing companies to make these decisions based on private profits and government incentives rather than on the merits of the case. What's best for the American working people and for the American economy. This is a dangerous road and we are on it and we've been on it for a long time. And the costs are reflected in the quality of the economy we have. Now we've come to the end of the first half of today's program. Please stay with us. We will be back very, very shortly with the second half and I think you will find some of the larger topics dealt with there of great interest to you. And remember, please to make use of our websites rdwolf and democracyatwork.info that's democracyatwork all one word.info we will be right back.