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One of these days I ain't gonna change. Welcome friends, to another edition of Economic Update, a weekly program of analysis and news looking at the economic dimensions of our lives. Our jobs, our incomes, our our future prospects, our children's college debts, all of that. 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. Once again, I want to remind you that we maintain two websites that contain all of the work that we do that I urge you to make use of. They're open 247 at no charge whatsoever. I'll have more to say about them later in the program. Let's jump right into the economic updates for this summer week. First and very interesting. The latest report from the Bureau of Labor Statistics released this last week indicates that real wages fell in the month of May. I'm not going to say more about it because some things don't need much commentary. But if you have a recovering economy, you don't typically see a month of not only not increase, but an actual decrease in the real wage per hour and the real wage per week of the average American worker. My attention was also drawn to another article of news, again where I'm not going to make much comment. This one has to do with a memorandum sent out to the interns working for Goldman Sachs, the investment bank here in New York City which makes use of interns. For those of you not familiar with intern, it's a polite term for an unpaid worker. This is a young person usually desperate to make a better CV for their future job search and therefore beg borrow in order to become an unpaid worker in in a prestigious firm. And the prestigious firms love this since it's of course free labor and they can make these folks work unspeakable numbers of hours for nothing. It became a scandal a little bit last year in the wake of the death of a 21 year old bank of America Merrill lynch intern. Moritz Earhart was found dead in the shower of his London accommodation after having worked for 72 hours straight in the offices of bank of America. So Lloyd Blankfein, the head of Goldman Sachs, decided it was important I'm going to quote now to improve the overall work experience of our interns. So the new rules introduced for this summer's crop of investment banking interns go as you should not go home before midnight and you don't come back before 7am Let me rewrite that work until midnight. Show up tomorrow at 7. This leaves a lot of time for recouping yourself. It leaves a lot of time for eating and relaxing and having a real life. In other words, Goldman Sachs, which is a leader in producing precisely the intern dilemma of that I've described making use of it for years, is now deciding that there ought to be limits that go from 7am work arrival to midnight. Wow. And the concluding comment of Mr. Blankfein, at the head of Goldman Sachs about all of this is priceless. So I will read it to you and make no further comment. Quote, you have to be in. He's addressing the intern. Excuse me. You have to be interesting, comma, you have to have interests away from the narrow thing of what you do, comma, you have to be somebody who somebody else wants to talk to. So Mr. Blankfein is leaving you seven hours from midnight to seven in the morning to become an interesting person. Next update for this, a remarkable set of rulings in this case, both in California. The first one is a very important court case which found in the case of workers at FedEx in California that they had been inaccurately and improperly the drivers of those famous FedEx parcel vans had been improperly designated, quote, independent contractors. That is, they were not considered by FedEx to be employees in the usual sense of the word. That is, you come to work, you get paid a wage or a salary, etc. Etc. No, they were reclassified as independent contractors whose services were purchased. Now, this may sound to you like a quibble and a semantic difference, but it isn't. It's very real. You see, FedEx, like other companies that do this, and there are many of them, indeed, one of them I'll mention in a moment. Many companies do this because there's a vast collection of laws that govern employees and what services you have to give them, what working conditions you have to provide, overtime if you work them more than 40 hours, all that kind of thing built up over a hundred, two hundred years of struggle in the labor movement to get these protections. If you reclassify a person as no longer an employee, then he or she is not covered by those rules and regulations. An independent contractor from whom you buy a service is simply another business that the company is dealing with, and none of the protections apply. So what is done, of course, is that corporations see an advantage they can get out from under the recordkeeping, the labor you have to have working to keep the records and the money that it costs to have an employee that can save all of that by simply changing his or her name to be an independent contractor. They even save on taxes in various kinds of ways because you don't have to withhold Social Security and things like that from an independent contractor. So they save money, they save time, they this is a profit making advantage. They also can shift the costs of all kinds of business onto these independent contractors. FedEx, for example, rented the vans to the independent contractor. Rather than owning the vans as their own expense. It was put onto the workers, and so on and so on and so on. So the company saves all kinds of money which it can add to its profits. It saves all kinds of taxes. And of course, if the company pays fewer taxes, then it leaves for the rest of us to either make up that money by paying higher taxes ourselves or suffer the loss of public services that can no longer be afforded because the companies have done this. The court in California said this is illegal, this is improper. This was purely a money saving event. It doesn't qualify. This is not what the difference was designed to be. And they imposed a fine on FedEx of $228 million to compensate several thousand workers in California who have been working for FedEx for years because they've been deprived of what they ought to have gotten. Here is a comment from me about. Corporations hire people to figure out how to do these kinds of things. For years they've been able to make extra money more than what they pay. The business school graduates who figure this out, they made much more than that by abusing their workers. What other words should I really use? And you know, now that the court case has said you can't do that anymore, they won't fire the business school graduate. They'll set him or her to a new task. Find a new way to get, get us out of something we were giving to the workers. Shift the cost of business onto them in some other way. Cut back on their benefits, make them come to work a little earlier, cut back on the free time during the day, whatever. This constant struggle in which workers find themselves maneuvered or manipulated in one way or another and then have to fight back in this case by going to court. This constant back and forth. That's what we call sometimes if we're in a courageous frame of mind, class struggle. It pits the two sides in the production process, employer and employee, in this endless struggle and maneuvering. Of course, the resources that the management and the owners and the employers bring are much richer, much more well paid, and have more the time and the support to come up with these gimmicks like this one they got caught with. But even if you close off one avenue, you Open another. It's endless. One of the reasons we talk here about cooperative enterprises in which workers were themselves the owners and the operators as well as the laborers in an enterprise, is this kind of absurd manipulation would stop. Let's move on to another update in the time that we have. The state of Wisconsin is back in the news. You're going to see a lot about the state of Wisconsin because The current governor, Mr. Walker, is also trying to become the Republican candidate for president in the United States. And getting as much publicity for him and his state as possible is a free way to get advertising, which later he will have to pay for with the money that he's raising to. But please don't worry, he's raising plenty. I want to deal with what Wisconsin and Governor Walker are doing with the state university there. The University of Wisconsin has a many, many decades old reputation as one of the finest state universities in the United States. It has typically drawn students from all over the country who go there because it's a state university and therefore affordable. But it is in the top rank of universities pretty much across the board and has been for a long time. Mr. Walker wants to change that. For example, this year the university asked for an increase of $95 million in its budget, a modest increase compared to previous years. Mr. Walker's response and the response of the Republican Party, which dominate the legislature there, was to cut the budget, not increase it, not increase it by the 95 that was requested by the university, but to cut it by $300 million, a savage blow to anything that that university can do. So bad was the cut and the implications of that cut that there was a kind of a popular backlash, and the Republicans, trying to look as though they had some face to save, reduced the cut from $300 million to $250 million. Let's look at what that means first. Wisconsin already spends less than the national average per student on its colleges and universities. So we're not talking about a budget that is in some wild, unusual place relative to others in the country. So this means a state already spending less than the national average is now going to have the distinction of spending on a lot less than the national average. That diminishes. What? Well, let's remember, out of the 20 million roughly Americans that go to colleges and universities, more than three quarters of them go to public institutions. Higher education in the United States is a public enterprise much more than it is a private enterprise. And that means that the trained manpower and woman power of our economy, one of the most important things that any economic future depends on is the quality and the quantity of educated young people. And most educated young people in America go to public higher education in places like the University of Wisconsin. If you diminish, especially by these proportions, the quality and the quantity of education that you provide, you are undercutting the economic future of this country. This is now a world economy, we are told. We have to compete in a world economy, we are told, and we have to compete with other countries that are spending more money on educating their young people, not less. What a strange thing for a country to do. Of course, it might make sense if the employers of the United States were in the process of moving out of the United States to the rest of the world because wages are cheaper there. If companies are leaving Wisconsin and going to China, India, Brazil and other places, which of course they are, then it might be understandable that they don't want to pay for the education of the young people. They're no longer interested in hiring because they found much cheaper young people coming out of the universities in other countries. This means that Mr. Walker is doing the bidding of large corporations in an anti education, anti young person, anti future of the American economy program. It may make him look good as a person who cuts taxes, but the naivete of the folks who believe this is not to ask the question. If you don't raise taxes, particularly on rich and corporations, and the way you handle the fact that you're not raising taxes is to cut your education budget, who's the winner? Who's the loser in that arrangement may make Mr. Governor Walker a better presidential candidate, but it's at the expense of the people of Wisconsin, the people of the United States, and the future of our economy. Last item, when I spoke to you a few Moments ago about FedEx, I mentioned that there was another company in the news about this as well. And here is a second decision also in California regarding the Uber car service company. It turns out that the Uber car service company is able to claim that it undercuts taxicab companies in part because Uber, taking a lesson from FedEx, has designated all of the drivers of Uber cars as, yes, you guessed it, independent contractors. So it doesn't have to do withholding of their income taxes. It doesn't have to withhold for Social Security. It doesn't have to cover the hours if they work more than 40 with time and a half, it gets out a very high expenses. One of the ways they undercut the taxi business is by this maneuver. And guess what? A California commission has found that just as FedEx abused the difference between an independent contractor and an employee for its own profitable benefits at a cost to the employee, Uber has been doing the same thing. The implications of these two decisions, 1A court decision, one a state commission decision, is to take away from all the businesses, and they are in the thousands across the United States, who have made a habit of using the independent contractor gambit to boost their profits and to diminish the standard of living of their employees. Well, at this point in the program, we shift to having me respond to one of the questions, or if we have time for more than one, that you have sent in to which you would like responses. And today's is going to be a response to something that literally, I don't know, 20, 30, 40 of you have written to me about within just the last two months. And it's something that came to a head over the last week and a half. So this is the right time, I think, to speak about it. It's about something called the Trans Pacific Partnership. This is a deal between the United States and a bunch of other Pacific countries, countries that have a border on the Pacific Ocean, big ones like Japan and China, little ones like Malaysia and so on. And they're working to come to an agreement about trade amongst themselves. That's why it's called the tpp, the Pacific Trade Partnership. Okay. Over the last few months, the Obama administration has been doing something interesting, rushing to get this passed. And in order to get it passed, they have asked the Congress to give the President something called fast track authority, the ability to go faster than usual to get this passed. This is remarkable because a trade agreement of this magnitude involving this many countries is normally a very long, drawn out affair because so many people's interests have to be protected, served, evaluated, and so on. It's also interesting because there's been a furious negative reaction to the long term consequences of the last big partnership agreement, called nafta, between the United States, Canada and Mexico, the consequences of which never played out the way the boosters at the time in the 1990s promised they would. So there's skepticism to say the least. Then we have to add to the fact that the negotiations so far, and they've been going on quite a while, have been rigidly secret. We don't know what's in that partnership agreement. We don't know what's been negotiated. We don't even know what's on the table to be negotiated. So all kinds of people are wondering, why do we give the President, by the way, a President who claimed that he was committed to transparency and openness. Why does he want, let alone why should we give him the ability to operate in secret to produce an enormously important deal among major trading partners in the world in a quick way that would not allow mass participation or even understanding? Well, let's provide the answer. But before I do, a remarkable thing. Last week, the Congress of the United States, to the surprise of many, voted down two bills that would have provided the President with the fast track authority. Republicans and Democrats together defeated this after the labor movement and the environmental movement, and indeed quite a few corporations weighed in. They don't want this agreement. They don't want the President to have fast track what's going on here. And that's what I want to explain in the time that remains, every trade deal ever worked out by the United States and other countries, and by the way, this holds for other countries as well. Between Britain and India, between China and Germany and so on. Every deal like this involves. There's no other way to describe this. Corporations see enormous advantages if the deal is written this way. They will have more opportunities than they would otherwise have if the deal is worked this way. At the same time, corporations are afraid that if the language of the deal is turned in another way, a competitor will get an advantage they won't have. So corporations are very involved in the idea of, in the promotion of and in the negotiations of these deals because they could either make a lot of money depending on how they're worked out or lose a lot of money depending on how they're worked out. The folks who know that their interests will in any case not figure are what the labor movement. That's why it's against the tpp, because this is a bunch of corporations dealing with a bunch of governments. And the one thing neither of those two and ever worries about a great deal are the average labor conditions. The labor movement was not brought in to these negotiations. The labor movement has not been able to discuss, debate and evaluate. If that had been done, maybe it would have been a way to protect working people's interests. But having been excluded, the labor movement is against it. For the obvious reason. Ditto the environmentalists. They aren't at the table and they know that the corporations and the countries will work out what's good for them. But that is not necessarily, and in all likelihood won't be any good for the environment. So they're against it. But there are other interests. There are corporations who do not trade. That is, they produce goods and services that don't move across the border. They're very worried that this trade agreement to get advantages for the companies that are interested in foreign trade, we'll of course have to give something up. That's what a negotiation is. If, for example, just to take an example, the trade negotiation helps the United States airline industry to export more airplanes, that's going to hurt competitors who are producing airplanes in China, in India, in Europe. In order for the Americans to get, in the language of the deal, something good for an American airline company, they have to give something to the other countries, otherwise the other countries will refuse to agree. So they're going to have to give the other countries, guess what. The other countries want something good for their industries, which could well be at the expense of their American competitors. So you might find yourself as an American company, discovering after this deal that your interests have been sacrificed for some other industry because the other industry had the ear of the president or contributes more to the political party of that president, etc. So there's a lot of industries that are very skeptical about this because they can see, and sometimes they have inside information that their interests will be sacrificed. So the bottom line, President Obama lost because there's a split among businesses. There's a bunch who want this to happen because they think they're going to get an advantage, and there are a bunch who don't want it to happen because they're pretty sure their interests are going to be sacrificed. When you combine those businesses who don't want it with the labor opposition and the environmental opposition, that's what defeated the president. But don't think it's over. Here's what the President and his corporate allies will do over the next two, three weeks, which they've given themselves. They're going to go and find every senator and every congressman or woman and offer them something, a post office for their district, something that will make them look good back at home as the price they will get that if in turn, they change their vote and go forward. It's too early to call how this is going to work out, but that's the kind of horse trading that these kinds of deals require. The President knows it. The leaders of the Democratic and Republican party know it. It's all going on now. It has absolutely nothing to do with what's good for this country. It has absolutely no relationship to any definition of democracy worth articulating. But it is how a capitalist system like ours works. And from that you have to draw your own conclusion. We've come to the end of the first half of this program. I want to thank you all. I want to remind you that our two websites are rdwolff with two Fs com and democracyatwork.info Please make use of these websites for all that they contain in the way of additional material, as well as an archive of all of our programs. They are also the ways you can communicate to us. Follow us on Facebook and Twitter. Sign up for our free newsletter. All of these are ways you can continue to partner with us. Thank you very much. Stay with us. We will be right back with a remarkable interview. Welcome back, friends, to the second half of today's edition of Economic Update. I'm very pleased to have with me today for the second half, Professor Kristin Ross. She is a professor of comparative literature at New York University, the author of several books on left political events and culture in France. These include Fast Cars, Clean Bodies, Decolonization and the Reordering of French culture Back in 1995, a book on May 68 and its afterlives early in the new century and the book I want to be talking to her about called Communal the Political Imaginary of the Paris Commune. All of her books have been translated into French. So first of all, Kristen, if I may call you that.