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A few well-written words can convey a wealth of information, particularly when there is no lag time between when they are written and when they are read. The IPS blog gives you an opportunity to hear directly from IPS scholars and staff on ideas large and small and for us to hear back from you.

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Entries tagged "Inequality"

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Four Things Obama Should Say During his State of the Union Address

January 23, 2014 ·

President Obama

What should President Obama say during his State of the Union address this year? IPS experts have come up with a few suggestions:

Sarah Anderson commends the administration's commitment to improve conditions for the poorest among us, but urges Obama not to forget to do something about the “overprivileged” as well.

Emily Schwartz Greco, together with William A. Collins, asks Obama to stop talking about lowering the corporate tax rate, since there would be plenty of cash to go around if only everyone paid their fair share.

Ron Carver calls on Obama to stop pressing Congress to grant his administration fast-track authority to expedite the Trans-Pacific Partnership (TPP) and other global deals that are good for corporations but bad for people.

Phyllis Bennis urges Obama to reverse course in the global Syria talks and let Iran participate in them.

What do you think Obama should say in the State of the Union? Weigh in on these issues and others below, and be sure to follow us on Facebook and Twitter during the address for more commentary from our experts.

If You Can 'Speak' with Your Money, Then Why Is Asking For Money Illegal?

November 18, 2013 ·

(Flickr/Gamma Man)Money may be protected speech but apparently, speech that asks for money is not.

Two recent legal cases about money and free speech unveil a contradiction in our application of the First Amendment. One deals with the right of the rich to influence politics with a lot of money, the other deals with the right of the poor to ask for a little to buy a meal or bus ticket.

On October 8, the Supreme Court heard arguments in McCutcheon v. Federal Election Commission (FEC) that could open the floodgates on unlimited campaign contributions. If McCutcheon succeeds, the case could lift limits on how much money an individual can spend in an election cycle.

If the Court sides with McCutcheon, it could strike down aggregate limits on campaign contributions in the name of free speech. Currently, the donation limit is $48,000 per cycle, which enables giving the maximum amount of money to 18 national candidates per election. Even if the FEC could still limit donations to a single campaign, rich donors would see a new rush of power, gaining influence in more elections. Every politician in the country would basically need to beg this small group to finance their next job interview with the American people.

If the court overturns years of campaign finance reform, it will take a constitutional amendment to distinguish unlimited campaign money from protected speech.

Meanwhile, the homeless and unemployed are experiencing the right to express their need for money taken away.

In Arizona, a 77-year-old woman was arrested for asking an undercover cop for a bus fare under a state law that forbade panhandling. This law was subsequently challenged in federal court and overruled, but other similar laws exist nationwide.

Since the recession, the U.S. has passed a litany of laws making it illegal to ask for even a small amount of cash. Cities and states across the country have banned panhandling and "loitering to beg" in response to increased poverty.

The state of Michigan faces a similar challenge to its panhandling law. Even some more liberal cities have proposed or implemented panhandling bans, like Baltimore, MD, Bennington, VT, and Worcester, MA.

We are becoming a nation where free speech is granted only to the rich and powerful while the rest of us are increasingly rendered utterly voiceless.

Andrew Small is an intern of the Economic Hardship Reporting Project.

Billionaires: Decline of the West, Rise of the Rest

October 28, 2013 ·

This post originally appeared on Triple Crisis. Read the original.

International trading currency (epSos.de/Flickr)With the help of Forbes magazine, we and colleagues at the Institute for Policy Studies have been tracking the world’s billionaires and rising inequality the world over for several decades. Just as a drop of water gives us a clue into the chemical composition of the sea, these billionaires offer fascinating clues into the changing face of global power and inequality.

After our initial gawking at the extravagance of this year’s list of 1,426, we looked closer. This list reveals the major power shift in the world today: the decline of the West and the rise of the rest. Gone are the days when U.S. billionaires accounted for over 40 percent of the list, with Western Europe and Japan making up most of the rest. Today, the Asia-Pacific region hosts 386 billionaires, 20 more than all of Europe and Russia combined.

In 2013, of the nine countries that are home to over 30 billionaires each, only three are traditional “developed” countries: the United States, Germany, and the United Kingdom.

Next in line after the United States, with its 442 billionaires today? China, with 122 billionaires (up from zero billionaires in 1995), and third place goes to Russia with 110. China’s billionaires have made money from every possible source. Consider the country’s richest man, Zong Qinghou, who made his $11.6 billion through his ownership of the country’s largest beverage maker. Russia’s lengthy billionaire list is led by men who reaped billions from the country’s vast oil, gas and mineral wealth with devastating consequences to the environment.

Germany is fourth on the list with 58 billionaires, followed by India (55), Brazil (46), Turkey (43), Hong Kong (39), and the United Kingdom (38). Yes, Turkey has more billionaires than any other country in Europe save Germany.

Moving beyond these top nine countries, Taiwan has more billionaires than France. Indonesia has more billionaires than Italy or Spain. South Korea now has more billionaires than Japan or Australia.

This surging list of billionaires is tribute to the growing inequality in almost all nations on earth. The richest man in the world, for example, is Carlos Slim of Mexico—with a net worth of $73 billion, comparable to a whopping 6.2% of Mexico’s GDP. The world’s third richest person is Spain’s retail king, Amancio Ortega, who has accumulated a net worth of $57 billion in a country where over a quarter of the people are now unemployed.

U.S. billionaires still dominate. The United States’ 442 billionaires represent 31% of the total number. Bill Gates and Warren Buffett remain numbers two and four, and are household names given the combination of their wealth, their philanthropy, and their use of their power and influence to convince other billionaires to increase their own charitable giving.

But, also among the 12 U.S. billionaires in the top 20 richest people in the world are members of two families who have used their vast wealth and concomitant power to corrupt our politics. Charles and David Koch stand at numbers six and seven in the world; they have drawn on a chunk of their combined $68 billion to fund not only candidates of the far right but also political campaigns against environmental and other regulation. So too do four Waltons stand among the top 20; their combined wealth of $107.3 billion has skyrocketed thanks to Walmart’s growing profits as the company pressures cities and states to oppose raising wages to livable levels.

How have the numbers changed over the years? Let’s travel back to 1995, a time of surging wealth amidst the deregulation under the Clinton administration in the United States, and the widespread pressure around the world to deregulate, liberalize, and privatize markets.

In 1995, Forbes tallied 376 billionaires in the world. Of these, 129 (or 34%) were from the United States. The fact that the number of U.S. billionaires rose to 442 over the next 18 years while the percentage of U.S. billionaires fell only from 34% to 31% of the global total is testimony to how the deregulatory and tax-cutting atmosphere in the United States under Clinton and Bush proved so favorable to the super-rich.

Notable over these past 18 years is that the so-called developed world has been eclipsed by the so-called developing world. In 1995, the billionaire powerhouses were the United States (129), Germany (47), and Japan (35). These three countries were home to 56% of the world’s billionaires. No other country came close, with France, Hong Kong, and Thailand tied in fourth place, with 12 billionaires each. Russia and China didn’t have a single billionaire in 1995, although for Russia, Forbes admitted that financial disclosure in that country in the years after the Berlin Wall fell was sketchy. And, in 1995, Brazil had only eight billionaires and India only two.

Today, these four countries (Russia, China, Brazil, and India) host 333 of the world’s 1,426 billionaires—23% of the total. And, Japan’s total number of billionaires has actually fallen in the last 18 years, from 35 to 22.

The figures offer a dramatic snapshot of the relative decline of the United States, Europe, and Japan in less than two decades and the stunning rise of Brazil, Russia, India, and China, as well as the rest of Asia. And, they remind us that countries where income was relatively equal twenty years ago, like China and Russia, have rushed into the ranks of the unequal.

Across the globe, the rapid rise of billionaires in dozens of countries (again, with Japan as the notable exception) is testimony to how the deregulatory climate of these past two decades sped the rise of the super-rich, while corporations kept workers’ wages essentially flat.

Suffice it to say: More equal and more healthy societies require a vastly different approach to public policy. As IPS Associate Fellow Sam Pizzigati has chronicled, fair taxes created a vast middle class in the United States between the 1940s and 1960s. Such fair tax policies are needed today the world over if the gap between the super-haves and the have-nots is to be narrowed rather than widened.

Fibs and Falsehoods: Darden Corporation Claims 'No One Makes $2.13 An Hour'

September 26, 2013 ·

An op-ed I published on September 12 has provoked an unfounded attack by the world’s largest full service restaurant chain.

The op-ed calls attention to the struggles of restaurant workers who are paid a subminimum “tipped worker wage” by their employers. Starting in 1966, when the tipped minimum wage was first established, it was pegged to 50 percent of the prevailing minimum wage. In 1996 the linkage was undone, and the tipped minimum wage has remained $2.13 an hour in, except in the 32 states that have adopted higher wage standards.

Red Lobster, owned by Darden Corporation. (Calgary Reviews/Flickr)Darden Corporation, which owns Olive Garden, Red Lobster, and several other chains, has been a leader in the National Restaurant Association’s efforts to defeat national legislation that would raise the minimum wage to $10.10 an hour and require that tipped workers be paid at least 70 percent of this amount.

The op-ed, which was distributed through the McClatchy-Tribune syndicated service and appeared in a dozen major newspapers, has drawn considerable attention from those who are tirelessly working to see that the amount they pay their tipped workers does not rise.

Samir Gupte, the Senior Vice President for Culture at Darden, responded with an open letter that was published in the San Francisco Chronicle and elsewhere, saying the op-ed was full of errors and denying that any workers at Darden make $2.13 an hour.

This letter was pure obfuscation. Gupte focused on restaurant servers’ total earnings, including tips. The op-ed focused on what Darden actually pays these servers directly. In a September 25 article in Nation’s Restaurant News, Darden spokesman Rich Jeffers contradicts Gupte’s claim that “No one makes $2.13 an hour,” when he admits that 20 percent of Darden’s hourly workers receive $2.13 an hour from Darden, before tips, affirming the claim which we made in our op-ed.

More than 40 percent of Darden’s restaurants are located in states where the tipped minimum wage is $2.13 an hour.

In another rebuttal, Melissa Autilio Fleischut, CEO and President of the New York State Restaurant Association, called our op-ed a “disservice” to hard-working restaurant workers, noting that New York recently adopted an increase to the state’s minimum wage. Ms. Fleischut failed to point out that her organization led the fight to oppose New York’s minimum wage increase.

In a recent editorial “Tips and PovertyThe New York Times concluded: “In effect, a tip for a waitress is a wage subsidy for her employer.” Most restaurant patrons assume their tip augments the wages paid by the restaurant owners, not that they replace the basic wages that restaurant owners can legally avoid paying in many states.

Having a tipped minimum wage is not only unfair to workers, it creates an unlevel playing field within the restaurant industry. The law requires McDonald’s and other fast food chains to pay all their workers at least $7.25 an hour, while allowing full service restaurants to pay large segments of their staff two-thirds less, just $2.13 an hour.

Controversies concerning Darden’s policies toward tipped workers are not new. In 2011, the company announced that it would force servers to share their tips more broadly with other restaurant employees. Now considered tipped employees, Darden cut hourly pay for bartenders and busboys by several dollars an hour in some cases. Some employees have complained that tips have not made up for their cut in basic wages provided by Darden.

Darden’s disinformation campaign will likely backfire, leading more consumers to seek the facts about the tipped minimum wage. Once more people know more about how our nation’s most profitable restaurants are working to keep workers living near the poverty line, it will leave a very bad taste in their mouths. 

Homeless Need Not Enter Columbia, S.C.

September 11, 2013 ·

Being homeless is not illegal. At least, that was before the City Council of Columbia, South Carolina voted to implement an “Emergency Homeless Response” that will give those experiencing homelessness a choice—either vacate to a designated emergency shelter, or go to prison.

The reason? According to local business owners, “the growth of economic development is being hindered, and business owners are beginning to look elsewhere to set up shop.” Rather than addressing the reasons for the increase in homelessness (48% reported this January that they were experiencing homelessness for the first time), the city will shuttle people to a building accessible only by bus, providing “immediate relief to the business community.”

AR McLin/FlickrThe new emergency shelter can only house 240 people—barely 16 percent of Columbia’s homeless population and less than 30 percent of those both homeless and unsheltered. If anyone refuses to be bussed to the shelter, police are allowed to arrest them for any number of public nuisance laws. “No person will be subject to any law in a manner that is different from any other citizen,” the Emergency Homeless Response presentation affirms. Yet local business owners need only pick up the phone to call a dedicated number when “a person in need is identified.” Allowing the police to detain anyone believed to be homeless could serve as an entry point to racial and socio-economic profiling.

The city’s report provides no measures for people willing to go to the emergency shelter after it’s full. Police officers will likely be instructed to send individuals straight to prison. The 241st person could be anyone—an elderly person with a serious medical condition, a high school student, or a single mother with young children. Out of the nearly 1,500 people surveyed by a South Carolina Point in Time Count—a single day census of those experiencing homelessness— about 80 were mothers with children and over 50 were under five years of age.

The social cost to Columbia will likely be greater than the $1.7 million allotted to the Emergency Response. A single incarceration could cost $50 per day and would be detrimental to a person’s ability to find a job or an apartment. Removing a person’s opportunity to earn an income limits Columbia’s ability to grow as a city, even if some of its businesses expand. The emergency policy and a 240-person shelter outside the city won’t be effective in revitalizing Columbia’s economy, but merely move the issues out of sight. After March, the emergency shelter will be sold for private development, and any replacement won’t be allowed in the downtown business district.

By contrast, Connecticut passed the “Homeless Person’s Bill of Rights” this June, which protects basic rights such as safety from harassment, nondiscrimination in housing and employment, and the right to vote. If Governor Malloy signs the bill, Connecticut would be the third state to protect the homeless from discrimination, following Rhode Island and Illinois.

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