A new report lays out five policies that the Washington State Legislature can pass to address our economic woes. Only one rebuilds an economy for everyone.

This week, Washington state lawmakers gathered in Olympia to determine how the state will recover from the coronavirus pandemic. The decisions they make in this legislative session will shape the health of our economy for the next decade. It all comes down to this question: will our leaders invest in the economy, or will they slash spending in a knee-jerk attempt to balance the budget?

The choice between investments and cuts will affect virtually every facet of Washington state’s economy. When eviction bans are lifted, will families be thrown on the street with a black mark on their credit histories? Will neighborhood businesses survive the last few months of lockdowns, allowing our economy to roar back to life later this year, or will they shutter forever? …


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For nearly half of the USA, the minimum wage increased on January 1st. Not even the trickle-down business lobby could turn that into bad news.

Happy Minimum Wage Day! Every January 1st, new minimum wage increases go into effect in states and cities around the country. As USA Today notes, 2021 delivered a bumper crop of higher wages for workers: “Twenty states and 32 cities and counties…are set to raise their minimum wages on or about New Year’s Day.” The Hill explains what those raises look like: “New Mexico will see the largest jump, adding $1.50 to its hourly minimum and bringing it up to $10.50. Arkansas, California, Illinois and New Jersey will each increase their minimum wages by $1.”

Here in Washington state, the wage increased to $13.69 per hour at midnight on January 1st. And because they’re tied to the state minimum wage, Washington’s exciting new overtime regulations are starting to take effect, too. That means that if you’re a salaried worker for a small business of 50 or fewer employees who earns less than 1.5 times the state minimum wage (or $42,712.80 a year), your employer must pay you time and a half for every hour worked over 40 hours per week. Salaried employees at larger businesses who earn less than 1.75 times the minimum wage (or just shy of $50,000 per year) will likewise be paid time and a half for overtime work. …


WA Gov. Jay Inslee’s new budget learns from the mistakes of past recessions and starts to prepare the state for recovery.

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Governor Inslee, modeling good mask-wearing behavior.

Yesterday, Washington Governor Jay Inslee unveiled his budget proposal for 2021 through 2023. Budget announcements don’t usually make for riveting political theater, but yesterday’s speech gathered far more attention than usual because of its unique historical context. Inslee wasn’t simply announcing a few tweaks on the continuation of business as usual. He was laying out his plan for how Washington state will combat the pandemic and rebuild from the disastrous economic downturn that accompanied the arrival of COVID-19.

Not every political leader confronts a moment like this. Hundreds of thousands of Washingtonians lost their jobs this year. Consumer spending cratered as the lockdown began and, largely because Washington relies so heavily on a sales tax, state revenue collapsed along with it. Washington has nearly 220,000 fewer jobs now than when the pandemic began, and the state’s revenue projections for the next three years are now $3 billion lower. We could lose hours drilling into exactly how bad the numbers are, but the takeaway is that a lot of people are in need of immediate support, and the state doesn’t have the resources it needs to provide that support. …


In an astonishing reversal, The New York Times publishes a call for the Biden administration to raise America’s wages.

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You can’t get much more mainstream than The New York Times. Our national paper of record has made and destroyed careers in politics, entertainment, and finance. It has served as America’s compass in moments of great stress, pointing the way forward when war and disaster threw the nation’s future in doubt.

That’s important to note because The New York Times published a remarkable editorial at the end of November that could well change conventional economic thinking for a generation. The editorial board called for the incoming Biden administration to prioritize raising America’s wages above everything else. …


The governor, a millionaire himself, needed additional funds to combat coronavirus—but he also believes that the tax is good for everyone.

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“Anyone earning a million dollars and up, we’re asking you to pay a few pennies more, and we’ll put every dime of that into the middle class,” Governor Murphy says.

Coronavirus infection levels are climbing all around the country again. As more and more Americans stay home to avoid infection, those rising infection rates will likely bring with them another serious economic downturn, just like they did in the spring. The drop in consumer spending will harm the bottom line of small businesses, which will then lay off employees — further depressing consumer demand.

Clearly, a new federal stimulus package is necessary to save the economy from collapsing — but with the Biden Administration not taking office until January 20, and with Senate leadership in doubt, it’s unlikely that we’ll be seeing a meaningful stimulus package from Washington DC anytime soon. …


When rich people don’t face the same consequences as the rest of us, the system falls apart — and it’s bad for everyone.

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Robert Reich, onstage at Town Hall Seattle, September 27th 2014.

We talk a lot in this space about the three central tenets of trickle-down economics: wage suppression for workers, tax cuts for the wealthy, and deregulation for the powerful. We usually refer to these three tactics in terms of policy, like campaigns against minimum-wage laws and regulations lifted by presidential executive order. But the truth is that once you’ve passed enough trickle-down dogma into law, the whole structure of law and policy loses its meaning and the wealthy few become immune to the cause-and-effect that holds society together.

Consider this: If you or I were to walk into a gas station, grab a six-pack of soda, and walk back out the front door without paying, the attendant would call the police and we would be charged for shoplifting. But when the reckless behavior of out-of-control financial institutions tanked the stock market and kicked off the Great Recession of 2008, nobody went to jail. …


A Harvard Business School professor believes businesses can build a just and equitable form of capitalism — here’s how, and why now’s the time

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Back when Harvard Business School professor Rebecca Henderson was pitching her latest book to publishers, she recalls, the conversation didn’t get much further than the book title before cynicism kicked in on the other side of the desk. In the latest episode of Pitchfork Economics, Henderson recalls sitting in a big New York City editor’s office and explaining that she wanted to write a book called “ Reimagining Capitalism in a World on Fire,” and that it was about how business could lead the way to save the world by creating a more sustainable future.

Henderson laughs, “I’ll always remember: He’s sitting behind his desk, looking at me, raising an eyebrow. And he’s like, ‘Business saves the world, Rebecca? …


The economy grows when women and people of color are given opportunities — and it could be the solution to rebuilding the middle class

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If words are used too often, they start to lose their meaning. Try saying the phrase “deep discount” to yourself sixty times in a minute, for example, and it turns into a disjointed collection of consonants and syllables with no connection to any existing concept or experience. The technical term for this psychological experience is “semantic satiation,” and it was recently described in the sitcom Ted Lasso as the moment when “words become a sound.”

One phrase that American politicians have nearly pushed to the point of semantic satiation is “the middle class.”

It’s a phrase with a specific economic meaning, and it seems simple enough to define: divide the economy into thirds based on income, and the center third that’s neither at the top or the bottom is the middle class. …


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Progressive economists have left rural America behind. Here’s how small towns and farmlands can win the next economic revolution.

After John Kerry’s failed presidential run in 2004, Democrats didn’t just double down on cities — they basically behaved as though building and maintaining power in cities was the only strategy going forward.

The Urban Archipelago theory argued that American cities were strongholds of progressive thought, and rural America had become an underpopulated conservative wasteland. The future, therefore, would be written in the city and those policies would emanate outward to other parts of the country.

Plenty of great policies erupted from the Urban Archipelago strategy: marriage equality, the $15 minimum wage, enhanced worker protections. The 2008 and 2012 electoral maps, which saw Obama winning handily even in traditionally purple states, seemed to indicate that Democratic cities could light the way for American politics. …


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Workplace power dynamics have shifted further away from workers and toward employers — and it’s only getting worse. Here’s how workers can push back.

Economics as we know it has been around since the late 18th century, but the field still barely acknowledges the existence of power dynamics as a motivating force in the labor market.

Trickle-downers who oppose raising the minimum wage, for instance, will often suggest that workers who want a higher wage should simply quit their jobs and find a new employer who’s willing to pay their desired rate.

That might make sense in a simplified textbook object lesson, but it doesn’t work in the real world, where parents have to feed their children three times a day, and people who work at a manufacturing plant don’t have the funds to uproot their lives and move to another state when they want a raise. …

About

Paul Constant

Political writer at Civic Ventures. Co-founder of the Seattle Review of Books. Author of comics including PLANET OF THE NERDS.

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