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
facing us.
I'm your host Richard Wolff.  I've been a
Professor of Economics all my adult life,
and I'm trying to use that history to
bring this program to you in a way that
keeps you up to date about what's
happening in the economy we live in and
depend on. Let me jump right in by
telling you a story about the New York
Times and it's receipt of a leaked
document.  This happens a lot when
government officials, upset by what their
own government is doing, decide it's time
for the public to know and they find a
friendly reporter and give him or her
the documents in question so that we all
get to see and hear what's going on and
what happened recently was that a agency
inside the Trump government was
commissioned to look at the costs and
benefits of letting refugees and
immigrants into the United States over
the last 10 years. The report shows
crystal clearly that these folks over
the last ten years contributed 63
billion dollars - they even came up with a
number like that - more in the
productivity of their labor in the taxes
they paid and so on then they cost the
United States so they were clearly a net
economic gain this of course is not the
message that Trump administration wishes
to propose so immediately they denounced
the leak rather than dealing with the
substance of the issue and in particular
a close advisor to mr. Trump one Stephen
Miller went so far as to offer
alternative facts reminding me that
whilst statistics don't lie.
statisticians can and do. Here we go: what
did mr. Miller propose? He said we should
be looking
at the difference in cost to the
American economy of new immigrants
refugees on the one hand and Native
Americans who are immigrants,
but just live here and work here on the
other hand. This is silly.
Always refugees and immigrants to the
first two or three or four years that
they're here cost all kinds of things
because that's the time it takes to
adjust to a new language a new culture a
new home a new region a new job and all
the rest so the appropriate comparison
isn't the first three or four years of
an immigrant or a refugee but it's a
question of a long term situation in
which yes there are costs in the
beginning as with all investments and
then payoffs over time as with all
investments but you know if you want to
make a point and you don't want to be
too careful about how you support it you
do what mr. Miller and the Trump
administration have done when you're
embarrassed by a document that shows
that indeed letting folks into the
country which United States has done
from its earliest days is a long-term
economic payoff well I want to add a few
points because this issue of immigration
does not go away mr. Trump is determined
to use it as a scapegoat issue a
distraction to face a hard reality he
cannot afford to tax wealthy people and
corporations because they are the only
financial support he and his candidacy
and his presidency have so he needs to
pander to them he cannot raise the taxes
on corporations and the rich despite the
fact that they have done the best over
the last 40 years compared with the 99%
of the rest of us so if he isn't going
to do something about that having run on
the presumption that he might scapegoats
are useful and immigrants is a way to
focus people on issues that take them
away but that has costs.
I'm not talking about the moral or the
political costs it is after all bizarre
in the world we live in today to have a
country the United States bombing six or
seven other countries but not be willing
to take the refugees who run away from
the bombing and feel some obligation in
this situation it's it's rather odd but
I'm not gonna talk about that well I
want to talk about the economics of it
and there are several millions of people
coming in here creates a demand for
housing for schooling for goods and
services that boost an economy we're
losing that if we get rid of these
people that has to be faced and there
are many other costs if I had more time
I would go into them a recent report
indicates that California's agriculture
is seriously impacted by a shortage of
Labor they can't get the people to
harvest the vegetables they can't get
the people to do the hard work and here
comes something that should surprise
nobody Americans are not Native
Americans I'm talking about are not that
eager to have jobs that pay as poorly as
those agricultural jobs do and we're
facing higher food prices we're facing
higher food imports which may make this
country dependent on food we have all
kinds of consequences that are not being
taken into account because it's
politically expedient to make immigrants
a scapegoat I want to turn next to the
issue of the BRICS countries B R I C S
if you're not familiar let me tell you
what that stands for
B is for Brazil R is for Russia I is for
India C is for China and S is for South
Africa these five countries are now kind
of Middle economically developing
countries they're not quite as rich yet
as North America Western Europe and
Japan but they're rapidly catching up
and in some cases overtaking those parts
of the world they are a very important
block
of Nations and they have all kinds of
agreements amongst themselves and
they're welding all kinds of diplomatic
relationships. I want to put into context
how important they've become and then
tell you why it matters. So I'm going to
compare over the last 20 years so I'm
comparing 1997 with 2017 that's a
20-year gap and I want to talk about the
share of global output of goods and
services that word achieved by the
United States in 1997 compared to what
the contribution was of all five of the
BRICS nations in 1997 the United States
accounted for 23 percent of world output
of goods and services and the BRICS
altogether 15 point 4 percent so the
United States alone was a much bigger
player in the world economy in 1997 than
all five of the BRICS countries what has
happened in the 20 years to our 2017 the
United States share of the world economy
18.2% it's dropped three percentage
points from what it was 20 years ago and
the BRICS they are now 30.4% those five
countries doubled their importance in
the world economy well here's why it
matters sooner or later the bigger the
chunk of the world economy you account
for the bigger your footprint on what
happens in the world the bigger your
influence the bigger your power the
power of the United States is shrinking
and the power of alternatives
alternative countries alternative blocks
of countries and above all of the BRICS
is zooming now most of that is accounted
for by China but nonetheless it is
something that binds those five
countries together and it tells you
something about how the world is
changing after all 300 years ago when
capitalism took off in England North
Western Europe North America and so on
those parts of the world which were
relatively minor players
in world history became the dominant
players the British Empire the American
Empire and so on and that's when their
share of global output mushroomed now
that their share is shrinking and that
of other players is what's mushrooming
then the future looks like it belongs to
them and that puts into a very scary
context but my job is not to make
believe for that you can watch other
programs but to make it harsh and clear
it is therefore interesting that the
United States is busy around the world
militarily and makes one wonder are we
flashing our military power and
predominance because the economic
foundation isn't there for it anymore
something to think about when we
confront military adventures abroad my
next update is a very little story but
in a way a monstrous one it has to do
with the closing or the privatization we
have both of them of public libraries in
cities and towns across the United
States it is becoming a scary comment
it's another kind of shrinking of your
economic footprint when you don't have
the resources or to be more accurate you
don't make available the resources so
that every city in town has what for a
hundred years we've prided ourselves
having a place where young people and
old people can go and get books and
tapes and avail themselves of the
cultural products of this society in a
free public library what's happening is
the following cities and towns are
strapped for money that goes back to
what I said before unwillingness
politically to tax the wealth where it
is and to tax the high incomes where
they are now that we have one of the
most unequal economic systems in the
world today we can't seem to get that
tax support from those who have it most
those from whom if it were taken would
affect their lives the least so we have
to cut back because we don't tax and one
place we seem to think it's appropriate
is the Public Library so recently what
came to my mind was Escondido California
little town I read in the San Diego
union-tribune back in August the
struggle of that village in town to hold
on to its public library there had been
an effort to shift it to a private
company quite notorious called library
systems and services LS and S sometimes
called LSSI it now runs about 80 public
libraries across the United States where
it has succeeded by going into the town
and saying well you don't want to spend
money on your public library because you
don't have the money you don't have the
taxes you're unwilling or unable to go
get the taxes from the people who could
give it to you so here's what you do let
us run the library you won't have to pay
for it and we'll run it and we will make
a profit off of it because we're so
terribly efficient well this is the old
story of what we call privatization this
endless effort of private companies to
make money by taking over what the
community what the public authorities
have been doing for us often quite
nicely thank you for a hundred plus
years as for example public libraries it
turns out and there's lots of
information about this particularly
again the New York Times has been very
useful in revealing this they've been
stories in The Huffington Post and
elsewhere what they do is they get rid
of unionized employees and hire
non-union employees paying them much
less they're not accountable to the
community because it's now a private
enterprise that runs the library the
hours get cut the services get
reduced you know making money, profit
the bottom line and all the rest of it
and the hope is nothing happens because
the town leaders are so happy they don't
have to pay for public libraries it's a
movement that's happening across the
country it takes such extremes that in
San Juan Texas the community did it and
then after a few years undid it and
found it was better off staying with the
public library than with the private one
it's an extraordinary comment you know
it's a kind of fundamentalism and
economics to believe that doing
something with private enterprise is
always unnecessarily more efficient than
doing it with public enterprise there's
absolutely no evidence from the
economics profession which studies this
question that that's true for every
example and there are where a private
enterprise has done something more
efficiently than a public one there's a
counter example of the reverse and there
you are you're stuck with it turns out
it's probably a better idea to wonder
and look at whether any particular
activity that a community wants is
better handled in a public way or a
private way there are good reasons why
we don't have anything other than a
public fire department and public
schools and well we used to have public
schools
madam Davos is trying to undo that but
don't look like she's gonna make it we
have all kinds of public services our
parks our army our police it's very
interesting we've decided to do it but
we seem to need to give lip service to
the idea that the private is somehow
better every day the newspapers are full
of what private entrepreneurs have done
and they've done a lot of criminal
activity a lot of stealing a lot of
misrepresentation let's remember all the
things we've read in the last 12 months
about car companies and banks and all
the rest of it to think that a private
enterprise is the way to go always and
that is a kind of unthinking promotion
of the private sector
I don't mind you promoting it but don't
pretend that there's much else that's
before I turn to the next economic
update I want to remind you that we
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this same program ok let's turn back the
International Labour Organization a
product of the United Nations that's
been around now since that time after
World War 2 together with the walk free
foundation and the International
Organization for Migration has just
completed a study in September of this
year of slavery in the world it was the
response to discoveries by news and
other organizations that there are
plenty of examples of slavery in the
world today
long after the world thought it had
abolished this system in the world and
so they've released studies these year
this year studies were released during
the United Nations General Assembly back
in September and they show that for
million people around the world are
victims of modern slavery in the year
2016 they also added because they
thought people would be interested the
estimate that approximately 152 million
children aged between 5 and 17 years of
age were subject to child labor this is
extraordinary in this day and age and I
wanted to tell you a little bit about it
the new estimates show that women and
girls are disproportionately affected by
modern slavery accounting for almost 29
million or 71 percent of the overall
total of slaves women represent 99
percent of the victims of forced labor
in the commercial sex industry and 84
percent of forced marriages indeed sex
work and forced marriages are the form
that slavery takes more than anything
any other single thing child labor
remains concentrated primarily in
agriculture 71 percent one in five child
laborers work in the service sector and
twelve percent of child laborers work in
industry a number of companies were
identified in recent news reports as
using slavery often called by other
names and one of them struck me because
of American history the phrase
indentured immigrant indentured servant
this is an old thing that was very
important in the colonial history of the
United States a person who wanted to
leave Europe and come to the United
States but lack the money to pay for the
cost of the trip would engage in the
following in exchange for getting the
money or a ticket to travel on a boat to
come to the Western Hemisphere they
would agree to work for seven years
typically for an employer the person who
fronted the money to pay for the ticket
in the course of working for seven years
effectively as a slave you could not
escape from this contract
you were effectively forced to work off
many times the cost of that ticket it
was a ripoff akin to and close enough to
slavery to be included well it turns out
that for example the tie in Thailand the
Thai food giant's EP foods which is a
major producer and deliverer of prawns
and shrimps around the world was
identified by the national by the
Guardian newspaper in England as having
been a primary supplier to among other
companies Walmart so if you think you're
not touched by slavery in the world
today think again next time you eat that
shrimp cocktail it is something that we
have a world in which we see a variety
of problems that we claim to be
addressing but this one remains far
below the radar unless and until it's
talked about publicly and openly which
is the point and purpose of what I have
brought to your attention
this morning and this afternoon
depending on when you hear or see this
program the next update has to do with
an enormous issue which deserves much
more time than what I can give to it at
this particular moment but I wanted to
bring to your attention a story in The
Financial Times a major global economic
newspaper that I use quite often and
this recent story was about the so
called gig economy this lovely phrase
that makes it sound almost exciting this
new way of arranging work contracts
where instead of coming to work 9:00 to
5:00 every week under a contract for a
year of your labor or several years of
your labor where you know what you're
going to be doing and you know when it's
gonna be and you know the conditions and
that's been agreed to by you or your
union on the one hand and the employer
on the other instead of all that we have
work that is temporary work that is
precarious
work that is maybe there or maybe not
maybe two hours today and 6:00 tomorrow
and maybe three on Saturday but maybe
not maybe Friday will tell you we don't
need you on Saturday but you need you on
Sunday all of the rest and of course
major players in this gig economy are
things like uber and deliver Roo and
many of these other companies that
specialize in an arrangement that does
what well it does many things but the
one I want to focus on today is in a way
a very old issue it turns out that uber
drivers and Deliver rule workers and
many others in the so-called gig economy
are spending many many hours working way
beyond the eight-hour day that
generations of workers in the history of
capitalism fought for the limit to the
working day because of the intrinsic way
in which capitalists competing with one
another see the profit in getting
workers to work another half hour in
getting the length of the lunch break to
be reduced in getting the number of
breaks to go to the bathroom to be
limited in other words to lengthen the
working day for those of you who don't
remember back in the 18th and 19th
centuries the early centuries of
capitalism the length of the working-day
for most people was 16 hours it was a
fight to get it to 14 then to 12 the
history of England is inseparable from
what was there called the struggle for
the 10 hour day and here in our own
country the struggle was for the
eight-hour day and we've never gotten
beyond that we have even now in the
United States on the books a law that
says it's an eight-hour day and if you
require a worker to stay longer a it has
to be voluntary and B you have to pay
the worker time and a half you have to
pay more for more than eight hours
because eight hours was what it was
assumed to be minimally healthy for a
human being physically healthy
psychologically healthy not to be made
to work immense long hours of the day an
early joke in British capitalism back in
the 18th century was that in Britain
with a new capitalism that was taking
over the beds and never get warm
you know what that meant it meant that
the exhausted worker coming home after
14 to 16 hours of labour fell into the
bed that was previously occupied by
another member of the family who was
leaving to go do that kind of a shift of
work my point is it was a struggle for a
hundred to two hundred years under
capitalism to limit the length of the
working-day what the gig economy does is
to undo those limits under the heading
of everybody should be free to do all of
this language by the way the old
language of bit of capitalists was you
shouldn't limit our working day because
what we as capitalists do is the
efficient way to organize things and
it'll hurt our profits and that will
hurt our ability to offer jobs you get
the old picture it's really the same
stuff recycled all over again
well that was ignored by the mass of
people after years of suffering
back-breaking labor for unbelievable
number of hours we fought as a nation
for the laws that now exist limiting us
to an eight-hour day what the gig
economy does is give capitalists a new
way to go backwards historically to once
again see people working 12 10 12 14 16
hours a day in order to make a living
under the conditions being provided the
basic message the gig economy is an
attempt to get around the limits of an
eight-hour working day without having to
pay the price or even to face the music
that that's what you're doing
fancy words fancy words it reminds me of
a few years ago when Americans beginning
to feel the pinch of a declining
capitalist economy found it harder and
harder to afford hamburger meat and so
capitalism introduced us to Hamburger
Helper green what poor people around the
world eat but we were going to consider
it the helper to the now absent
hamburger and we're supposed to feel
somehow compensated we've come to the
end of the first half of economic update
I hope you found these discussions
interesting please stay with us we will
be right back after a very short musical
interruption
you
