Podcast Summary: Economic Update with Richard D. Wolff

Episode: The System Implodes: Amazon, Evictions, Tax Abuses, and Minimum Wages

Date: February 25, 2021
Host: Richard D. Wolff
Podcast: Democracy at Work – Economic Update

Episode Overview

In this episode, Richard D. Wolff explores the multifaceted crises of American capitalism, with a sharp focus on Amazon’s labor practices, the looming eviction and rent crisis, the neglected potential of a stock transfer tax, and the ongoing debate surrounding the minimum wage. Wolff’s unflinching critique draws on recent events and long-term systemic patterns, illustrating how wealth and inequality are reproduced while powerful interests resist reform. The overall tone is urgent yet accessible, blending statistics, anecdotes, and incisive commentary to shed light on the economic realities confronting millions of Americans.

1. Amazon’s Labor Practices and Systemic Exploitation

Timestamps: 00:10 – 08:18

Key Points

• Theme introduction:
  Wolff opens with the overarching problem: are we witnessing the “normal” problems of capitalism, or are we in a period of decline? He connects this to the day's major topics, united by the thread of systemic dysfunction.
• Amazon Flex Program Scandal:
  Amazon promised drivers $18-25/hour plus 100% of tips (00:55), but for years diverted tips to pay the basic wage, not as extra compensation. This resulted in a $61 million settlement when the U.S. government prosecuted Amazon.
• Labor retaliation:
  Amazon warehouse workers in Chicago were forced to choose 10.5-hour graveyard “megacycle” shifts or lose their jobs—a response to worker protests and strikes (04:00).
• Grassroots alternatives:
  In response to Amazon’s exploitative practices, new platforms like “Not Amazon” have emerged to support local vendors (05:08).
• Union drives:
  Ongoing unionization attempts, notably in Bessemer, Alabama, underscore why corporate behavior makes unions necessary (06:11).

Notable Quotes

• On corporate “nickel and diming”:
  • "The enormous wealth of these corporations is based on endless examples of this kind of either illegal or quasi-legal nickel and dime. That's what this is about. And this system reproduces that behavior over and over again." — Richard D. Wolff (03:10)
• On unionization:
  • "If ever a corporation, by its behavior, just now explains why you need a union, well, Amazon is it." — Richard D. Wolff (07:05)

2. The Eviction and Rental Crisis: Case Study of New York

Timestamps: 08:18 – 15:58

Key Points

• Scope of the crisis:
  1.2 million New York families face rent arrears, affecting at least 5–10 million people, many with children.
• Pre-existing vulnerabilities:
  Even before the pandemic, 22% of New Yorkers paid over half their income in rent—a sign of deep financial instability (11:25).
• Children and homelessness:
  In 2016, 70% of shelter occupants in NYS were families with children. 85% of children living in shelters failed to reach proficiency in math and reading, highlighting the long-term educational impacts (14:15).
• Systemic inequality:
  Despite immense wealth, society reproduces poverty and inequality at a staggering rate, especially among children—who bear none of the responsibility for these conditions.

Notable Quotes

• On the reproduction of inequality:
  • "We are treating our people, especially our children, in a way that illustrates that capitalism is at least as efficient in producing poverty and reproducing it as it is in producing wealth and reproducing thereby a level of inequality that calls the entire system into question." — Richard D. Wolff (13:38)
• On political consequences:
  • "The bitterness, the angry anger and the resentment, well, that's building because you're not dealing with this... Deal with the fundamental systemic reproduction of inequality or else it will come back to haunt you." — Richard D. Wolff (15:26)

3. The Stock Transfer Tax: Untapped Revenue and Fairness

Timestamps: 15:58 – 25:55

Key Points

• History and mechanics:
  NYS instituted a small sales tax on stock trades in 1905—aimed at fairness since lower-income people pay sales tax on essentials.
• Tax reversal:
  In 1981, politicians began officially rebating (giving back) the tax to wealthy investors, effectively nullifying it while still collecting it on paper.
• Lost opportunity:
  Billions could be raised annually for public goods—even more during high-volume speculative events like the GameStop surge (21:05).
• Corporate pushback myths:
  Arguments that such taxes would force trading out of state or cause financial markets to flee are “a bit of a fake”—both overstated and addressable by legislation or national policy.

Notable Quotes

• On policy bias and power:
  • "You can tell by who benefits from this odd tax structure, who has the power to shape that structure." — Richard D. Wolff (25:20)
• On the absurdity of the rebate:
  • "It’s as if you paid a sales tax and then at the end of the year you got all that money back. That's what we do. We don't tax stocks. It's an amazing thing." — Richard D. Wolff (18:41)
• On stock market threats:
  • "The notion that we are powerless to prevent that or to punish it if some would like to do it, is wrong. Of course, we can imagine a stock market that left the United States with a president and a government that said, excuse me, you're staying and you're paying the tax." — Richard D. Wolff (24:30)

4. Minimum Wage: Myths, Realities, and Systemic Choices

Timestamps: 25:55 – End

Key Points

• Current state:
  Federal minimum wage remains at $7.25 since 2009—among the lowest in industrial countries.
• International comparison:
  The UK’s minimum wage is $11.95/hour, illustrating U.S. lag (27:45).
• Cost of living and inflation:
  With annual price increases and stagnant wages, real earnings for low-wage workers decline every year.
• The “small business” argument:
  The claim that raising the wage would harm small businesses is “cold stone wrong” (28:55), and it’s a false choice to pit fair wages against small business viability.
• Policy solutions:
  Rather than choosing between higher wages or small business survival, use government procurement and targeted subsidies and tax advantages to support both goals.
• Public subsidies for the rich:
  Billionaires routinely receive public subsidies (e.g., stadiums for sports teams)—demonstrating that targeted support is not new, just unequally distributed.

Notable Quotes

• On the false dilemma for small business:
  • "That's like running up to someone and saying, I'm giving you a choice. I'm either going to shoot you or stab you. Your response isn't to agonize over which of them to choose. Your response is to say, I don't accept that as the choice I'm to make." — Richard D. Wolff (29:54)
• On supporting small businesses:
  • "If we did it better, they could pay minimum wages and we'd have both an appropriately paid working class and the kind of small businesses we want. Don't be fooled. Those are not either ors." — Richard D. Wolff (33:18)

Memorable Moments

• Amazon’s Tip Theft and Settlement:
  The real-world impact of Amazon’s tip-skimming scandal and its consequences (03:45).
• The irony of NY’s stock tax rebate:
  Wolff’s explanation that NYS collects a tax on stock trades—only to immediately return it to the wealthy—illustrates policy absurdity (18:41).
• Sharp analogies:
  The “shoot or stab” analogy (29:54) powerfully conveys the false binary faced by workers and small businesses.

For Further Reflection

Wolff’s episode is explicit in tone—direct, critical, and unafraid of confronting entrenched interests. He closes with a call to action: refusing false choices and demanding policies that uplift workers and communities, rather than entrench wealth and power at the top.

Note: This summary omits all non-content and promotional segments.