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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, our jobs, our incomes, our debts, those coming down the road confronting us, and those, of course, facing our children. 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. Before jumping into the Updates for today, I want to let you know, because we're quite proud of it, that this program that many of you hear on the radio and through the Internet is also available in video form, that is, as a television program or a video of us doing this program. It is regularly broadcast by the MNN Public Access Network here in Manhattan, New York City, and in a number of other places. But most generally, I wanted to draw your attention to the fact that you can see the video version of this program on YouTube by going to the Democracy at Work YouTube channel. And you can also see it. This is something new that we're especially proud of at Patreon P A T R e o n patreon.com economicupdate with economic update being one word. So once again, patreon.com economicupdate these are ways to see and to view the same program in a video format, if you would prefer. So let's turn to the economic updates for this middle part of May 2017. Well, we've just entered into the third week of a hunger strike by Yale University graduate students, and because of the implications and meaning of this strike, it bears some attention. What the graduate students want to do is to unionize. After all, as they explain, they cannot complete their studies to become a PhD recipient in the graduate schools unless they earn money because they have to eat and sleep and do all the other things that people of their age, usually in their twenties of their lives, must do, as we can all understand, in order to earn money, money to be a graduate student, they are basically required to be what's called teaching assistants, that is, to teach classes, typically to undergraduates at Yale University, people whose families pay hundreds of thousands of dollars for these young folks to get a bachelor's degree. It is, of course, an enormously profitable thing for Yale University to not pay a regular professor, who would have to earn a regular professor's salary, and that's in the neighborhood of 75,000 on up to hundreds of thousands. It's much better for Yale's profits not to have to pay a professor to teach the course, but instead to get a graduate student to teach the course because in effect, they pay them a trivially small percentage of what a full professor, a proper professor, a fully trained professor would have to be paid. And that's the beginning and mostly the end of the story. It is of course, very bad for the graduate students. They have to work hard. They are busily at work taking classes or writing their doctoral dissertations, highly stressful work. And here they are being paid little or nothing for doing so. This is a difficult situation and there's no surprise at all that people in that situation working hard resent being paid so poorly that they have trouble making ends meet. There are many graduate students around the country, I don't know whether it applies at Yale, who are eligible for food stamps and other supports, but because they are paid so poorly. So what the Yale graduate students wanted to do was to form a union, Local 33, since other workers at Yale, building and grounds people, kitchen people, clerks, secretaries, have already organized for many years into Locals 34 and 35. At Yale University, the graduate students wanted to be their own unit. They had a election according to the rules of this process in the United States, which they won several weeks ago. But Yale is refusing to sit down and negotiate with them. Yale's lawyers are contesting the outcome because Yale lost and Yale can hire, and has hired very high priced, union busting type law firms to help them along. And of course one can surmise that Yale is hoping that Mr. Trump will sooner or later reconstitute the National Labor Relations Board and that may overturn the rule that allows graduate students at Yale and other places to form unions. In short, Yale University is a very typical employer here in the United States, all its protestations to being the guardian of Western civilization notwithstanding. And they are acting just like any other employer, trying to prevent, to stop, to undercut an effort by its workers to get decent pay and to form a union to do that. I'm particularly interested in this because 40 years ago I was a graduate student at the same Yale University when we were trying for the exact same reasons to do the exact same thing. So, so there's nothing new here that's going on. My hat is off to the graduate students. They are better organized than we were, they are more clear in their interests than we were, and they are more clear allies of the unions than we were. All of which has enabled them to be more effective. Recently, particularly the women among the graduate students have added another demand, that is for an end to the sexual harassment of women graduate students, which was an epidemic when I was a graduate student at Yale and it is remarkable to see that the university has been either unable or unwilling to deal with that problem either in the intervening decades. But there's another reason to be interested in what these graduate students are doing. Because it shows that the kinds of workers you might have imagined could be exempt from the current austerity across the Western capitalist world. The austerity that in Europe and in the United States cuts the services that the government provides people, cuts the jobs that the government provides to people to provide the services to everybody else, that these kinds of downsizing of a declining capitalism, they might not affect university students. They might be exempt. They might not have to suffer. What the Yale strike makes so clear is that the idea that anyone in the working class is more or less educated, higher or lower paid, that anyone will escape this process, is now clearly not the case. That unless the process is stopped, we will all be victims sooner or later. In one way or another, yes. At one end of the income distribution, the people making less than $15 an hour are moving across the United States to try to get a minimum that allows them to live. But much higher paid, much more educated people, like graduate students at Yale University find themselves in the same boat, being ripped off by their employer who thinks he can get away with it at this time in this country's history by not letting them have a union, by not paying them a decent wage and simply enjoying the extra profits that come from having a graduate student to whom you do not give reasonable amounts of money do the teaching instead of a professor. The irony is it's not good for the professors who have less work. That's, after all, what the graduate students are trying to become. It's not good for the families who send their children to places like Yale imagining they're going to get the best possible professor. No, they're not. They're going to have graduate students pound off on their students, on their children. Graduate students who are busy working at some completely other activity, namely getting through the program themselves and getting a PhD hassled by the time and energy they have to devote to these other things. It's not good for the students, it's not good for the finished faculty, and it's certainly not good for these graduate students. The difference is the undergraduates haven't protested and the regular faculty haven't protested, but the graduate students, and that's why my hat's off to them, are doing something and in the process pushing back against the general decline in standards of living that is the capitalist program for the working classes across Western Europe, North America and Japan. Staying with the same topic, but approaching it from a different angle, I came across the following news I want to share with you. In July, the federal government, particularly the Department of Treasury, has announced it will raise the interest rates on government loans to students. Before I go into the details, I'd like to ask a rhetorical question. Is making it more expensive for students to borrow to get a college education? Is that part of making America great again, do you think? Well, here's the specifics. Undergraduates will find that the government's interest rate on loans to them for school go from 3.76% to. To 4.45%. That's a hefty increase. For graduate students, it's from 5.3% to 6%. May not sound like much, but you're talking hundreds of dollars extra per year for every year that our students are in debt. And how many students, present or past students, are carrying debt? So, I mean, how many will be affected by this raising of the government's interest rate? You might be shocked to learn 44 million Americans currently carry student debt. The total is over $1.4 trillion. And the average debt carried by a student debtor who borrowed for going to his or her college and university, $32,000 hanging over your head that you have to pay interest on and that you have to pay back. Well, here's a little side point as to who's cheering on the government to raise interest rates. Clearly, the students aren't. Clearly their parents aren't. And clearly those of us who care about the future of the United States and have to wonder out loud, why would a country that knows it has to compete in the world economy be making it more difficult for young people to get an education rather than making it easier? But put all that aside. Here's the people who are cheering the government on, the private lenders, the banks and others who lend to individuals who either can't afford or. Or don't want to pay what the government is charging. Clearly, as the government's interest rates go up, it's good news for the private lenders that compete with the government making these loans. And of course, there's a key difference. Students who borrow from the government enjoy all kinds of protections from being hassled afterwards from the costs of delays in their ability to pay, protections that are not available to them if they borrow from private lenders. So, of course, here is more damage to young people and their families who are thinking of college educations. And again, the larger point I want to drive home is this namely that here is another sign of how a declining capitalism shifts the costs of that decline from those at the top to everyone else. We saw it with what the graduate students at Yale are doing, demanding a decent salary for the hard work they do. But now we see it again in the tens of millions of Americans who will be charged more for their college loans than they used to be. This is a way of shifting the burden from those at the top to everyone else. The fact that it comes at a time when those at the top are getting richer and everybody else isn't only makes the story that much worse. Last week also saw another development that merits some discussion. Two Senators, Bernie Sanders from Vermont and Gillibrand from New York State combine to introduce two bills into the Senate that are interesting and that deserve some discussion. The first bill is called Worker Ownership Readiness and Knowledge, or the word W O r K work as the name of this act they have introduced for consideration by their fellow Senators. The second bill is called the US Employee Ownership Bank Act. To make a long story short, these two bills express the desire of Senators Sanders and Gillibrand from Vermont and New York to support the ability and the incentives for workers to buy the companies in which they work to convert these companies from their classical ownership by shareholders who decide what the board of directors is and what the board of directors will govern the company to do and to change all that and to make the owners not sure shareholders who are outside the company, but to make the owners the workers themselves, the workers become owners Worker owned enterprises. Is this an advance over what we have now? Clearly, from the point of view that this program originates from, from everything that I have been trying to explain and to understand with you over the years, yes, because it's a step in a simple democratic process. Instead of a tiny minority of people, shareholders and boards of directors, making all the decisions that affect every employee and therefore the communities the employees live in, instead of a tiny number of people making unaccountable decisions that affect large numbers, which is a violation of the very concept of democracy, worker ownership at least takes us into this step where the workers also become the owners. And in that sense part of their exclusion from decision making in the workplace is removed. They are less excluded. But having said that, having welcomed these activities, having praised Senators Sanders and Gillibrand for doing this, it is also important to explain that this is just one step. And it is very easy to see and to imagine how this step could unfortunately not be the beginning but also the end of the process of democratization of the workplace. And that would be a tragedy. And why am I concerned? Because we have many decades of experience in the United States with worker ownership. We have the many ESOP operations around the country. Employee stock ownership plan. This is where companies have in fact done what the bill introduced by Senators Sander and Gillibrand seeks to do. That is they have brought their workers into ownership positions by making them shareholders, etc. And what has been the problem in so many, in clearly the majority of these cases, that democratization has stopped there, that workers who become owners still believe that they ought to put the actual running of the enterprise, those key decisions about what to produce, how to produce, where to produce and what to do with the profits, into the hands of a board of directors. And so they have searched for people qualified to be boards of directors, have found them to be the people who already are on the boards of directors of other companies. This is very common in, in capitalism. And so they have left the running of the business they technically own in the hands of people who have run them, do run them, and in all likelihood will run them like they were conventional capitalist enterprises making the same sorts of profit driven decisions that capitalist enterprises do. That is why it is so important to understand that when workers become owners, it gives them rights, but rights they have to exercise or else the whole project is stopped, is stumped, is stopped, as it were, in midstream. What workers who become owners can do now, now that they are owners, would be to transform the workplace from a top down hierarchical structure run by a tiny minority. Boards of directors are usually 12 to 15 people in enterprises that can have 100, 1,000 or 100,000 employees. The real question of democracy says no longer will a tiny minority be able to make all of the decisions what, where and how to produce and what to do with the net income. That decision could be and should be democratized. It should be subject to a rule in which every worker has a vote, an equal vote to make those decisions. And no one who isn't a worker does, because you are without rights if you're not a worker, to make the decisions of what a worker owned and operated and directed enterprise would do. Oh sure, a worker co op, which is what we're talking about, would have to work out a reciprocally acceptable relationship with its surrounding communities. Capitalist enterprises had to do that in, in their way too. But of course it would be in a different way because workers themselves would be the citizens in the community and the owner operators of the enterprise when they get together with themselves to figure out how best to manage an economic system that put workers in the driver's seat in the workplace, which we have never seen in the United States before. Worker ownership we have seen worker ownership is a good step, but it is just a step, and it needs to be supplemented by the real serious business of giving working people in their workplace the democratic right to control the decisions that affect their lives. If I can end with a parallel, it's one thing to give everybody the vote in a political election. It's a completely different thing to provide the time and the support so that everybody who votes knows what the issues are, has the time paid time to make politicians come before them and explain and justify what they're doing and what they propose to do. Democracy means the real participation of people. What good is it to give them the vote if everything else in the society blocks them from the kind of participation for which the vote, at least in principle, was intended? The same thing applies to the ownership of shares in an enterprise. Unless we understand where that has to go, the next steps, we will be sorely disappointed by the results. The last economic update we will have time for in today's program has to do with an event that happens every May in the United States, and happened, of course, this May, too, namely Mother's Day this year on the 14th of May, a Sunday. And so it led me to think about Mother's Day. I'm not a mother, but I'm a father, so I have direct experience of a good bit of this, and it's an important issue for me. So here we go. Three reflections on Mother's Day and the economics of Mother's Day that may not have occurred to you. And I want to thank Market Watch, which you can find at market watch, all one word, marketwatch.com, a place that gathers interesting economic statistics, and I found them particularly useful on the Market watch website for March 14th. First, American population growth is now dependent on children born to immigrants. That is, American mothers who were born here in the United States are having fewer and fewer children. The only way the population is growing in the United States is basically because of the decision to have children by immigrants. In other words, the growth in the American population. The future of our working class, which is the future of our economy, has a lot to do with immigrants in ways you might not have thought about. The second statistic I thought was remarkable, released by MarketWatch, was that mothers whose family income exceeds $75,000 a year richer mothers take twice as much paid maternal leave as do mothers who live in families that earn under 30,000 simple English rich people take more maternal leave than poor. You know why? Because. Because they want to. Because they need to. Because their commitment to family values says it's good to take some time off before your baby is born. And it's even more important to be there in the early weeks and months of your baby as part of what it means to have, quote, unquote, family values. And if it is true, as the statistics prove, that the more money you have, the more you take advantage of this important opportunity, the more horrible it is to have to recognize that the United States is the only advanced industrial country that does not have a law mandating paid maternal leave. Every other advanced industrial country has such laws, with anything from six weeks to 40 weeks out of the year being the required maternal leave that employer must give to a mother while paying her every. Interesting. The country that makes more noise about family values than any doesn't support it when it comes to paid family leave. Finally, in 1970, under half of American mothers were in the Labor Force. In 2015, over 70% were. That is a fundamental historic change. It's why the American family didn't suffer a cut in its standard of living as badly as they might have over the last 30 years. It's because a second member of the family went out to work for millions of families. And that wasn't enough either, which is why they all went into debt, which all blew up on US in 2008. This year, as, as we think about Mother's Day, let's be honest, we've made it harder, not easier, for the family to function. Mothers are out of the house many more hours of the day working because they have to, as well as because they want to. They need supports, paid maternal leave and decent, paid, affordable childcare. And this country provides neither to the mass of its people. And. And that is a failing of the capitalist system. We've come to the end of the first half of our program. Please stay with us. Remember to use our websites rdwolf.com and democracyatwork.info for more on all of this kind of analysis and for ways to communicate with us. Stay with us. We'll be right back.