tv Key Capitol Hill Hearings CSPAN April 7, 2015 2:00am-4:01am EDT
and the relationship between democracy and voting and changing our lives. but we have to work on that because there isn't that relationship. they get elected and do nothing. they led the people freeze. you try to freeze them out. [applause] tio hardiman: unless we talk about political structure, we need candidates to have the opportunity to participate in debates with the candidates and put those issues on the table. pat quinn refused to give me a debate even though i committed 28% of the state vote. he would not debate with a guy like me because i'm different and i'm not worried about being politically correct. he couldn't survive the debate with me either because his world experience is different than my world experience. i am born and raised in the projects.
all of us have overcome adversities and we made good of our lives. we can present issues at the grassroots people are experiencing right now. and solutions based on my expertise anyway. and of the solutions is making sure we have the open primaries. and we have independent debated processes because that word -- i want to say this in chicago politics right now. on behalf of what going on with african american leadership in chicago right now. believe it or not, i won 30 counties downstate. i had more problems with my own people. in chicago, african-american leaders came together to knock an african-american lady off the ballot. she stood a chance to really
make a big difference in chicago. they are supporting him. we represent 47% of the voting. the votes -- this is not really about the race. when you have a voting bloc like that, use it to your advantage. they came together to knock the most qualified african-american female off the ballot. the system is playing a role with that. we have so many issues in chicago. not just african-americans. poverty, immigration, issues with violence, sexually transmitted diseases on the rise. we need somebody that will represent the people sincerely. that is where independents come in at. [applause] lenora fulani: i don't think we can rely on the two-party system for debates.
we have to take our debate to the street. they are never going to let us in. the only way we will be in is if we change where "in" is. it's on the street. [applause] joan blades: i was going to take this to getting people voting. because voter turnout is not good. the number of people that are not participating, the younger you are, the less likely you are to participate. i read some california data just the other day. someone was quoted as saying more 18-year-olds and 19-year-olds got arrested then voted last year. that is horrifying. and when you are trying to change the issues of poverty --
as a co-founder, one thing that causes a poverty spell is the birth of a child. and people that are incredibly overwhelmed already with their lives, it's hard to ask them to vote when they don't see anything happening. you've got to convince people that voting is the way to show up. and other forms of participation. lenora fulani: i hear you. i think young people don't vote because they are not stupid. [applause] what i really think they are saying to us is, you have not
put something in place where my voice can be expressed and heard. you don't even have to be young. there are lots of people that don't vote. nothing transforms. i think you have to focus on ways for people to make voting something that you do because it will transform the world. you have to teach people to be political in ways. participate in what we're trying to do, which is to change what this political system looks like. i must say, i know there is a notion that black people and latino people and white people are poor because we have babies. we are not poor because we have babies. we are poor because we have not been led into a system to function. even if you don't have a baby, if you can't read, can't go to school, if you're not part of it, if you stand on the street
corner long enough, there isn't that much to do which is why we built this project. you will get pregnant. [applause] joan blades: i agree with you about everything you've said. the basic story of a huge number of people that have baseball out of the middle class when they have babies -- i'm saying that we have people entering it in a way that is growing. our growing population of not middle-class in poverty is a huge problem. we want to have everybody become middle class. we have a huge bias against mothers in the workplace. and against single mothers in particular.
joan blades: i love you. i just do not want to blame our social crisis on babies. joan blades: if you have a bias against mothers, you have a bias against babies. $.75 to the equally qualified men's dollar. we are making things hard on women have babies, and that goes up to 18. that is one of the things we have to credit. we don't hate mothers. at least, most of us don't. i mean, we've got how many mothers here? how many people have mothers? [laughter] that's kinda it.
[laughter] paul johnson: the mom issue. i'm clearly pro-choice on the mom issue. here is what i would tell you on the poverty issue that seems to make sense to me. i think the solution is symbiotic mutualism. a recognition that we are not really divided into parties. i watch what is happening with the tea party movement which has been mainly co-opted by the republican party. the message seems to be one that the real problem is government. the government has created the problems that we have and what we need to do is remove government and the problems would be fixed. on the other side, the occupy movement which has been in many ways co-opted by the democratic party seems to say that government is not the problem. it's the private sector. the corporate sector.
here is my answer. we have become the mightiest nation and we did it through a process that said both of them are wrong. start with government. government played a key role in building our infrastructure and the ability for people to participate. it passed regulations that are very important to congress. civil rights rules. the ability for women and minorities to be able to participate has clearly been helpful to our economy. on the other side, the private sector are creating products that we are shipping around the world. they are changing our quality of life. effectively, both are important. i was asked to give a speech on poverty. i did so. they asked me, how do you fix
poverty? nonetheless, i kind of gave us -- gave a spiel to them. i said, in the united states, we like weird people. we have tesla and edison and einstein. we talk about how great they are. we tax them. we begin to create a system that pay to educate a whole new group of weird people. steve jobs and bill gates. if we lose that symbiotic mutualism, i guarantee what will happen to poverty. it will get a lot worse. the idea is we are all sitting in the same rather narrow boat together. the fact that people often times look on the other end of the vote -- of the boat. they view it as they want to see
them submerged. without recognizing that they are tied together. the business side does the same thing to leaders on the poverty side. recognizing we are connected is the only way to survive this thing. it is the only way to continue what has become the mightiest nation in the history of the planet. [applause] jackie salit: in a couple of minutes, we will open it to the floor for questions and comments. the issue of myths around the political system and the cause of social crisis, it has been touched on by a number of you in your comments. could you each tell us, what do you think is a myth that needs to be busted in order to break down some of these barriers that we are talking about?
what is a myth you would like to see crumble? tio hardiman: one that i would like to see crumble is that you have to have so much money to win political office. because i would like to recommend anybody running for high-level office, go out and get double the signatures you need. not just to make the ballot, but to win the entire race. to me, that is a big myth. television networks, radio networks, the media. they keep pushing the fact that if you don't have big money, you cannot win. the minds of the people, it is a myth. we've had examples of some people -- rahm emanuel has $30 million and is running against troy garcia. so it can be done. no matter what the critics may say.
the gop continues to try to undermine president barack obama. i'm not saying he's the best man in the world, but he's the president. they continue to try to undermine his leadership. i would leave it at that because i'm kind of angry about the way they've done that. the reality of it is this. either you respect the president, that is the bottom line. we keep going outside the boundaries of what we think is right, showing racism still exists as we know it does. [applause] don't get me wrong. we know it exists but you guys are living under the gop right now and they don't care how they show it. all up front.
covert is one thing and overt is another thing. [applause] paul johnson: two myths i would like to debunk. i find it absolutely fascinating that the leadership inside the gop are intent on making certain people know that they do not like the president of the united states. that is interesting all by itself. part of it is driven by the myth that they really are that interested in the policy side of the equation as opposed to the power side of the equation. who has the majority and who wants the majority? the senate will set up to be the firewall, they said, in the beginning years to make certain that there was a more stable response to what might happen politically. but what has happened is that because they are not just
running for election every six years, they want to control the majority -- they run for election every two years. it creates an inability for that firewall to work. one myth that we have to break down is that they are not in it for the policy. they are in it for the power and the public intuitively understands that. this has been perpetuated in arizona on a daily basis. people that register as independents do so because they are either apathetic or ignorant. that is their view. they don't recognize it is an affirmative statement about what they care about and that's why people are registering as independent or nonpartisan. they have given up on the existing political system and they believe there has to be another way. lenora fulani: one myth that i would like to totally eradicate. under the current system, if you vote, you can make a difference.
[applause] because the issue isn't just simply voting. it has a lot to do with what you are voting for. what the parties represent, what the people represent. and people get beat up so much all the time around not going to the polls and voting. but in some ways, i think it's important to recognize that when people keep voting and the same things happen, it turns them off to politics, power, anything. i was thinking that people are smart. you don't vote unless you give a real and actual alternative. you play into the hands of the people that take the vote and do nothing. [applause] the other thing that i just want
to say is that poverty is self-perpetuating. that it is personal. even in segregation, i don't think that we self segregate. i think we have been segregated. people don't even think they can live next door to each other unless you are of some elite class. neighborhoods are organized in that way and that keeps people from knowing who the other is. people are not responsible in this country for being poor. the country, the nation has a responsibility for doing something about poverty. i think politically, we have a responsibility. i feel like we have a responsibility for doing something about poverty and the way that it looks for everybody is we have fight against poverty. we didn't create it. nobody said you want to live off of fifth avenue or would you rather live in the most rundown inaccessible community in the city? and people say, i think i will
take the latter. we ended up there because of the consequences of history and lack of political support from the people that run the city and country. [applause] joan blades: so many good myths have already been put out there. [laughter] i think the one i am most focused on right now is about the other. the other being kind of dimwitted. the other being mean-spirited. the other being callous. and the good news that if you take the time for the kind of space that allows for listening, the conversations could be listening. when you hear each other, you
find that even these people, how can you do that? most of the people get into whatever role they are playing. it is a good place. i'm sorry. i just don't want to go there but i think it is true of the vast majority of people throughout the spectrum. and how do we start opening things up so that we start benefiting from the richness of our views fused together and our energy put together. [applause] jackie salit: i will open the floor up to you. we will get some house lights
and microphones on either end of the aisle. i asked my panelists here to join us in this discussion. sir? >> i have a statement that i would like to make. i am part of cica, the community for independent community action. we must continue to organize on the grassroots level and that nonpartisan and open primaries is a must if we want to commit to true democracy. we know for a fact that the democratic party has taken our votes for granted and have sold us out. and that the republicans are only going to let us in if we are willing to come in through the back door. i want to thank dr. newman and dr. fulani. they gave us the blueprint. our children cannot grow unless they are first taught to develop. i want to personally thank dr. fulani for giving me the opportunity to grow.
[applause] you see, i have two degrees. and i still find it hard to find a job. and i thought that with all my education and all my knowledge that things would be a little bit easier. but i am still a person that was brought up in poverty. it's something that i had to realize and i thank dr. fulani for giving us the tools to empower us. more importantly, i want to say that i'm so grateful to be here in this room this morning with a number of movers and shakers that are thinking independently. thank you so much. >> my name is bob perls and i'm a former new mexico state representative. i ran for congress and for about 13 years, spent or 10 hours a
-- 14 hours a day campaigning and walking door-to-door much like the mayor discussed. and all of that activity of mine, i will change my registration to independent. [applause] and hopefully provide some leadership for this movement back in new mexico because it's so important. my question for this group because it's been a fascinating discussion, it is really difficult to talk to folks about how you make the connection between the disconnect of what they want to see in policy and actual changes in all of these process things that we talk about. whether if it's instant voter runoff, top two, public financing. nonpartisan districting. i want to hear each of you tick off if you could pass one thing in the state legislature or one
thing through referendum that would change and empower independents and the conversation, what would you like to see happen? lenora fulani: i would like to see happen is nonpartisan elections because it is so critical. the way that you teach people is not a talking activity. put an independent on the ballot and have them work on the campaign. take them out to the streets. have them participate in the grassroots activity of trying to support an independent. send them to a debate that they can't get into. let them learn sensuously how locked out -- it is like the best lesson in the world because they are having that experience and they are shocked.
because this, after all, is a democracy. paul johnson: mine would be nonpartisan elections, eliminating the subsidies for political parties, making sure all candidates are treated equal regardless of how they are registered. if i were to give you my second one, i don't like the existing structures in the legislature. the fact that they meet in caucuses and that those caucuses are partisan, they stymie good ideas and conversation. it should be organized legislatively. [applause] tio hardiman: basically, i concur. i won't repeat what i agreed with already. joan blades: lots of changes. yes.
>> thank you very much. [applause] jackie salit: thank you. ditto to everything that was presented here. going to one of the points that dr. fulani made earlier about not voting in the judgment call so many people are making. the reason i like a lot of these proposals including the focus on primary reform is that right now, the voters are related to the things that happens last in the political process. that is considered choice. we have to change the definition and the meaning of what choice is. rather than being a passive consumer at the end of the assembly line to being an active creator of the choices that are getting made. that is one of the reasons why i think primaries are important. >> i am an independent leader. i live in harlem.
i did grow up poor in this country. i want to say thank you for convening this conference. it's important we continue to do this work. i like the question about what myths because one of the ones i would like to bust up is that america is the greatest country in the world. america needs to deal with its history, its origins, we need to reorganize how we like to think about ourselves. when you say you are great all the time, that means you won't take any kind of reflective stock of how you got to where you got. wiping out the native americans, enslaving african-american people, and continuously
oppressing and locking up latin american people because they want to come here, those are not great things. [applause] we need to get real with ourselves and get honest and we can reorganize how we are together. what we call revolutionary conversations because they are hard conversations that we don't want to have with each other. i do appreciate this conference and all the dialogue and conversation that's going on here. i did work on dr. fulani's 1988 campaign where we had to get 1.5 million signatures to get her on the ballot. you get in the grassroots and you knock on the doors and you talk to people. you learn something about where you are, who you are, and what we need to do. get involved. get activated.
talk to open primaries. it's a solid tactic that we can organize around and create dialogue around these issues. thank you very much. enjoy the conference. you all look beautiful. thank you to our leaders. [applause] >> my name is jason olson and i am part of the independent voting network. i want to say thank you very much for hosting us again. it's wonderful coming out here and seeing so many amazing faces in the auditorium. the myth that i would like to explode is that the world just is the way it is and there is nothing that ordinary people can do about it. i think that this grouping of people right here shows that no matter what the odds are, there is something we can do about it and i'm very happy to be part of
that with all of you. i was wondering, for folks that maybe this is your first time to one of our gatherings -- how has this conversation impacted you? how will you take away from meeting various folks here as you continue to approach the various reform efforts and work that you do in your lives? tio hardiman: how the conference has impacted me as i see the makings of a major independent voters movement. and i want to play a role. i see it. [applause] that's all i can say for right now because i believe in movements, ok? i think about nelson mandela's life and i think about the power of a person to make a
difference. and nelson mandela's life pretty much embodies that. a movie called "kill the messenger" on his life, they exposed the cia and the government after they introduced crack cocaine into the black communities. they say he committed suicide because he shot himself in the head twice and he never got another job once he exposed the story. i'm just saying there are a lot of things that have taken place in the history of the country that we need to bring to the table so you can get past those issues. i have been inspired. you can see that by the way i talk. [laughter] [applause] paul johnson: the lesson i take from this, it's always fascinating to me. i come from a state with a very conservative legislature. it's not even a fair word. often times people who are on
the extreme, our goal is to bring them back to the center. it which is a leftward movement. in other states, you see the exact opposite where the democratic party has overwhelming support and they stifled out voices as well. it often times is not an issue between right and left. it's simply an issue of do you have a voice or do you not have a voice? what is probably the single most important thing in the movement is that is not going to be carried off by a single state doing what they want to do. it has to be a national lever. it there has to be a national group of people coming together to talk about its importance. you will always find differences, and you will begin to find that area where we have common ground and move it forward. [applause]
joan blades: and what reinvigorations we can have to have people showing up in the polls in off-years. that the leaders are really working for us. i don't have the answers to that right now. it is exploration. let's move on. there are truly viral moments. i sometimes call it a goldilocks moment where it is not too cold or not too hot. it's just right and this can take off. you can talk about the slow build. it is a punctuated equilibrium. things can slip. will the independent movement be
part of helping it slipped in the way i am dreaming? i don't know. >> my name is peter white and i'm from new hampshire and a longtime activist. i think most people are many people don't vote because they are not inspired by the candidate. the wall street two-party crap trap. they have to bring their clothespins to the polls. i think we are ready for a voters revolution. 10 years ago, people looked at me strange and now everybody says yes. we have to flush congress. they are full of -- never mind. i question is, do you think we need to run independent candidates for local, state, and federal elections?
to lead the voters' revolution. the time is now. [applause] tio hardiman: i concur. i agree with you. i definitely agree. joan blades: right now, my experience with the political processes that throwing in another candidate is sometimes helpful. but it doesn't go to the core of our divisions. that is where my real interest is. you know, so what going to cause the flip? i'm just putting that out there as my question. jackie salit: we will run this discussion until 12:30 p.m. until we break for lunch. i want to ask people to keep
your statements or your questions concise. >> thanks to each of you for leading this discussion. americans actually hate american democracy and i think that's part of our problem. i would like to thank mr. johnson for the image of the canoe. my name is philip. i'm from new york. i'm homeless. i take from what you've said that if i sink, you sink. i have suffered long-term homelessness because -- despite a college degree. i want you to make homelessness and issue across the nation because we are seeing increasing criminalization of homeless people despite the fact that
there is an increasing number of college-educated people and veterans among us. this is, of course, a particular question of interest to me. i am involved with advocates in new york city and would like to throw the issue out to the national party. that this issue becomes important to the party across the country. thanks very much. [applause] lenora fulani: i think homelessness is poverty. i organize homeless people all the time. it is a very important part of what it is we are doing. it is critical. what i teach homeless people is that, with all the pain and misery, they have to get out here and help to build this because that will make the difference. paul johnson: in arizona, we created the central arizona shelter that was an organization that started while i was in office. and i was involved in putting
together. we put business leaders on that group because our legislature and others completely ignored the issue. it was amazing how after we put corporate people on that board that they came up with good processes and procedures. they did a good job of keeping the organization healthy. they also became a voice to the other side. a concept that i would stress to you today is understanding the importance of symbiotic mutualism. you have to find ways to take these issues and bring people together on them. to educate and listen to one another. it is much more healthy for democracy and has a much greater sustainability. [applause] tio hardiman: homelessness is part of my platform when i ran for governor in illinois. i will keep that up there. >> i am a third-year student at the university of north carolina
at greensboro. i have a question for the panel. that social and structural change to a capitalistic society whose foundation is bound on -- built on perpetuating violence. that violence is poverty. making the rich richer. joan blades: i mean, things are brought to society by virtue of a ground of people. so society will not reorganize itself. are you? our young people and rich people
that care about these issues and everybody in between? it's the activity that we need to organize people. >> i am heather dimarco and i have a question. it is something that really intrigued me and i agreed with both of you that we should not be blaming social injustices on babies. and i had a question, how do you think of the psychological development of the whole nation culturally? we are very passive when it comes to things. we can change the laws but culturally, we have become very sick. and to think a woman and a child is not worth change is quite sad in this nation. so how to you think we can use psychology through developing youth as a tool to change the
platform for youth to be more interested in political situations? [applause] joan blades: moms rising is all about getting mothers and their kids to show up. we had a great number show up in washington state for paid sick days. just two weeks ago. and paid sick days are happening. so sometimes, when we cannot get things happening on a national
level, we can have substantial successes at local. some of the paid sick days have been happening in cities. and at the state level, start modeling good behavior. it is a big system and there's a lot to do. my hope is that doing some of this work now, it will start moving faster and faster. lenora fulani: can all the young people in the room stand or raise her hand? -- your hand? that's my answer. [applause] >> hello, i am the president of independent voters of nevada. i just wanted to share an anecdote from my visit with jackie salit when you spoke about changing the conversation. we lobby our legislature and we are faced with the most conservative legislature we've had in 30 years. so the question came up about young voters and the fact that
we can't get them to the polls to vote and change what happens in the legislature. so i asked the question, how do we change the conversation to a more inclusive and less -- they don't like the language. how do we change that conversation? the entire room came undone. these are democratic leaders from the state. it's supposed to be a nonpartisan group. it got partisan really quick. and they spent 45 minutes doing that. i just wanted to share that. >> i apologize for the cell phone. i ran a campaign called sweeney 2013 on the democratic ticket. my campaign was run with just $4000. we had seven candidates. once the democratic candidate won the primary, it was a shoo-in.
we had the same people for 39 40 years. i am thankful to be here because i snuck out of the house. with my four-year-old son. how does the independent party groom its candidates? i'm not looking, i'm not frustrated, i'm just a little tired of the same two-party system. when i ran in that primary, they were very upset. my goal is to have an independent voice. i don't feel switching parties because i am angry at one party really does anything. i've heard a lot of things about homeless and poverty. we wasn't born poor. i just wanted to put it out there that when you have candidates that previously ran somebody like myself, i came here before. last year. my question is this.
how do you vet the candidates that you put there? and is there a groundswell with the minorities in the middle class, upper lower middle-class? they want to switch parties. i'm involved in sunset park. there is conversation at the table about one party doesn't do anything. so you can ahead of -- so i you -- so, you gonna have a lot of voters that are unhappy with a lot of things that are going on. i video'd it and wanted to make sure i did not sound like an idiot when i was debating these guys. i think your party can probably make some inroads. but, i am being gentrified out of brooklyn. i just wanted to thank you. good work. i just wanted to take 30 seconds. it you never know.
there is room for change. [applause] >> there isn't a national conversation about poverty as dr. fulani said earlier. however, since we last met two years ago, there has been, created, a prominent international conversation about persistent and growing inequality of wealth and income. and in the u.s., interestingly it started with grassroots organizing and protests by occupy wall street. and now it has gotten much bigger. republican presidential candidates having to address this issue. the wall street journal on monday having an op-ed piece which tried to refute the idea that government and the political system can do
something about these conditions. and so my question is whether you have been at all thinking about how to relate this to the problem of political dysfunction. because one of the most recent books did a study of 23 or so democracies around the world. wealthy democracies. and they found there was a direct relationship between the extent of inequality in wealth and income and structure of the political system in terms of how many vetoes there were before something could become law. we have a congress, senate president, supreme court. what can be added to that from the independent movement is to point out that we have yet another dysfunction, the
partisanship of the political parties. that it should be put into the equation in this national and international conversation about what can be done about changing the growing inequality of wealth and income. so my question is, do you think we can intersect this? and with the issue of political partisanship? lenora fulani: yes. [laughter] [applause] >> my name is doreen. hi, my name is doreen. i am with the delegate from bcc and invited by dr. rafael mendez. my question is, this is the first time i have ever been to a program like this and i really liked it. lenora fulani: we like you. >> thank you. i am thinking about being an independent voter.
[applause] my question is, if i assert myself to be a poor person and the government or the president is never allowed to say poor person or poor people but keep saying the middle class, how will i know that there is someone there that will recognize my condition and help me get out of it? and also, i want to be an independent voter. if i vote for any independent candidate, what is the guarantee that this president is going to recognize my condition in society and help me out of it. thank you. lenora fulani: i have two quick things. one is that, and i know we keep talking about voting for candidates but we are trying to transform what the process is. so part of what independence
-- independents should be doing as they run for office is working on that issue. whether they win or lose. that is the issue. if i run for president of the united states, and i won't, but the system is not going to change. we are trying to change things systematically. what was the first thing you said? the first question you asked? >> if the president is not -- lenora fulani: oh. then you dump him. [laughter] [applause] no, i'm serious. that's what you do. and obama did that. he went from talking about the poor when he first ran and the 92nd inauguration, he talked about middle classes. i turned the tv off. [applause] jackie salit: we are going to take two more people from this side and two more people from this side. please keep your comments very
short. everyone else, you will get a chance to talk in the second audience discussion. >> i am a member of the u.x. the cica, and involved with kids. my question is this. we have been infiltrated, our government, by outside forces. how do we get rid of those people that are actually inside of the white house with their policies and their lobbies? and they are taking money out of the american public that we need here for education, the kids. how do we stop the maniacs? [laughter] tio hardiman: one way to stop is you have to vote more independent candidates in. that is the reality right there. paul johnson: the comment was
made earlier about how we vet people. allow everyone to ron and the -- to run, and the top to get to the next level. the voters. >> [indiscernible] i'm a graduate and i've noticed the united states of america is really the divided rates of america. everything in this country is separated. age, color, gender. everything. religion. everything is separated but we say we are united. my thing is that if we would focus more on solutions to the problems instead of focusing on parties and give the people more
of a voice, we would find better solutions to these problems. i don't believe that it's fair that only two parties dictate these directions of how the country grows. i believe that if we have this political reform where we just eliminate parties -- just eliminate the parties. no i'm being frank. , i will wrap it up. at the end of the day, it's the solution we need. i am pretty sure you know what is happening. at the end of the day, i tell my clients that at the end of the day, we need to speak up. we need to get out and be more involved in our community. to have a better voice. so that these solutions can be made more apparently clear. thank you.
[laughter] >> i love the video greeting this morning. i saw that wonderful picture of you in 1992 campaigning in the democratic primary. that picture we all said this morning said above it, to roads are better than one. what you meant was to roads to run. i am running in the democratic primary in new hampshire, and i am running in the general election. if we had a top two in the democratic election of 1992, you could not have run. one of your roads would have been taken away. i wonder how you feel about that. >> first of all, what i was speaking to was the reality of the political process at that time. i was supporting jesse jackson
because historically his campaign was important in the democratic primary. i ran myself as an independent. i knew the democratic party was not going to give their presidential slot over to jesse jackson. so, i do not know if this is a trick question. [laughter] but that has particular historical meaning. i don't think every time somebody runs or the next time i run, that i ran on a two-party strategy. and so, i'm not -- i mean -- i don't know what else to say. what is it that you do not like. [applause] >> you have given me a second chance. i am a second -- i am a san francisco voter. >> the reason i love top two as i have watched, in the communities i am most close to,
the same people run for office. these same people get elected. there's no challenge. in the black community in the other communities, you can be the dumbest person in the world. that if you have been in office for 15 years, there's no one to debate. i want someone to kick their butts. i want someone to say to these politicians, let me tell you what you should be working on. and say to the community i am better than them. you do not have to be locked into supporting them because they are the only people here. we love cap 2. >> i am a san francisco voter. my ballot in november had one republican and one democrat and no one else. so, i did not vote for the first time in 50 years.
bags thanks a lot. good to see you. >> on my name is dominic edwards. i am a dance major as well as a psychology major. the method i would like to break is the idea that you do not care to get involved. i am 20 years old. i promise you, we are with the you guys. [applause] ok. creativity is such a beautiful gift. it does not just lie in the heart of painters, musicians dancers. it is in all of us. finding new ways to do things is an outcome of creativity. i think those who want to continue the iparty system are afraid to be creative. what we can do about this. i don't know what we can do about this because our school system does not allow us to practice creativity. this does not stick with us as strongly as it should in all
areas of our lives. [applause] >> thank you. >> all right. let's have another round of applause for our panel. [applause] >> all this week, we're bringing your profiles of congressional freshmen members on c-span. tomorrow night, a conversation with arizona them a cracked ruben galindo. here is a preview. ruben gallego: i got to start with some of the -- sorry. i served with some great men. and, you know, i don't think i will ever be surrounded by men
that great again. >> what did they teach you? ruben gallego: they taught me about being there for each other. the marine's top me about discipline in organizations. the marines i served with taught me about what it truly means to care about another human being that you are not related to and what you -- what you want to do to keep them alive. >> and on wednesday night, in an interview with texas freshman congressman will hurd. he came to the 114th congress after serving in the cia. here is a review of our conversation. william hurd: i was 22 years
old, i was driving my toyota four runner. i stopped at a gas station. the tv was on. something had just been blown up by al qaeda. i thought to myself, i wonder if i am ever going to know anything of what is going on there. after we go through our initial orientation, i was an officer for human. -- yemen. supporting the men and women in our station. that was my first job. one of the biggest challenges while i was there was fighting the bureaucracy. right? while i was in afghanistan, i managed all of the undercover operations. i felt like there were rules and regulations we were having to use to do our jobs that were preventing us from protecting ourselves and doing the job we were trained to do.
fighting the bureaucracy and kabul, back in langley, was in incredible challenge. and, in the end we won because we knew, you it was a great experience because that is what i am doing here. most of my responseabilit y is to fight the bureaucracy. >> initiatives to fight poverty by jim yong kim. live coverage starts tomorrow at 9:30 a.m. a best-selling author will talk about isis, islam and the west. we will have coverage from the national press club at 1:00 eastern.
up next, conversation on worker wages, corporations and the economy from the peterson institute. this is 90 minutes. adam: ok. good morning everyone. welcome back to the peterson institute of international economics. i'm adam posen. it is a pleasure to be here looking at something below the surface but of profound importance which is how and why wages get set where they do for lower wage workers in the u.s. and the global context. if i can speak for a moment leading into our panel and then our guest speaker later thanks to a series of major grants the peterson institute has an working on inequality and
inclusive capitalism for a while. we did not get theirre first with the inequality bestseller, but we have been doing substantial work around the issues, particularly of comparative labor market and financing across the country's and how it affects outcomes for actual people. our basic premise which i hope today and all of our guest speakers will reflect, is that when you start talking about inequality or exclusion, the tendency seems to be like farmers talking about the weather. you are seeing it is bad and then except that is the way it is. or you can go off on crazy fixes. what we -- our commitment in our project and everyone here today is to say we might not be able to affect the weather, but we can come up with appropriate
drainage gutter cleaning and maybe even proper redistribution of water rights. so it is in that spirit we have seen the issue of wage increases. there is a macro economic background. this gives me the chance to plug that tomorrow we will have the semiannual global economic prospects in this room at noon under the leadership of david stockton. talking about the u.s. economy china. one of our speakers here today will talk about europe. this macro background as the u.s. economy improves, we expect wages to pick up. but there is something more at work in terms of some of the actions taken by american companies. we will be featuring them later today, the ceo of aetna took a
real position. also the labor share of the economy is at close to an all-time low from the postwar period. that is a number that generally never used to fluctuate very much over the business cycle and has been sustained at a lower share of of national income for many years now. and, the question is does it have to be that way? when does it make sense for companies to change that? that is what we will address today. we are fortunate to be releasing a set of short papers in our new briefing series. which we put together. it is meant to be very topical. two of the contributing authors will be speaking today. my colleague justin, a senior fellow here and on leave from t he university of michigan. he is also a rockstar on
twitter. a columnist with "the new york times." he runs a ridiculous number of marathons and someone who has importantly forced us to up our game here on micro and labor issues which was why we brought him over and we are delighted to have him with us. speaking second will be the aforementioned justin who has been associated with the institute since 2002. we are immensely proud of jacob who has grown up into being a double threat. the leading american commentator and forecaster of the political economy of europe. for today, in this is exemplified not just by his work in our new briefing on wages but his recent working paper. someone who sees the connections and comparisons across labor markets around the world. it is great to have him
contribute to that discussion. i'm also grateful that because of the importance of this discussion and our friendship with various actors in the public debate, we have two other speakers. damon silvers, director of policy and special counsel for the afl-cio. we think of him as mr. substance for the afl. that was not meant as a swipe. that is a positive thing for damon. he hads done incredible number of things. he is assistant security general pro bono for the state of new york. he is a member of the fcc. the public company accounting advisory group. he was deputy chair of congressional oversight panel for tarp. covers a whole range of economic regulatory and financial issues from a very strong public service perspective.
previously from 2006 to two dozen eight, was chair of the advisory committee of the auditing profession. we are putting him back into more labor camp today but i'm sure he can handle that. finally, michael strain who was named deputy director for economic policy studies at the american enterprise institute. to give him the similar thing he is the economist who most of us would read most at aei. michael is well known for taking iconoclastic views motivated by principles. he manages to get himself into the press quite a bit nonetheless. he is a contributor for "the washington post." he has done extensive research
with the u.s. census bureau and new york census reacher center and will give us additional perspectives. thank you for joining us. of a like to first call up -- i would like to first call up justin. wolfers. justin: my task here is simple. want to make a case that there is a legitimate business case to be made for employers to pay higher wages than they currently do. that case is strong at the lower end of the labor market. i want to be clear that what i want to talk about his microeconomics. this is not it was widely attribute it to henry ford when he painted his workers -- paid his workers so they can all buy ford cars. it seems like an inefficient way
to generate demand for ford cars. it was not the argument for henry ford. it is the claim when you treat your workers well, they will work harder, longer and stay with you and potentially cost savings. there is real profit opportunities for doing this. the ford plant at the time employed 14,000 men on the line making cars that in order to keep them on the line, they had a higher 52,000 people every year. you can see how turnover costs can undermine a business's efficiency. paying a little more staying on the line more attractive might yield more benefits. the argument is then you pay a little more, you get a little better. this is aby no means a new argument. we refer to it under efficiency wage. . theory. it was first surfaced in
marshall. later on, some of the most important champions were janet yellen and her husband. the arguments go like this -- because we are economists, we think of things in terms of incentives. if we are paying you better than your current job, you valley of your current job or and then you want to make sure you minimize the possibility that you lose that job. by that logic, you work harder. that is the mean-spirited version of the claim that what you want to do was pay your workers more. the empirical research has been quite useful but it has come up with different margins than what we write down in our models. one of the obvious things, if you pay a little more, you are
likely to get higher-quality workers come to your firm. if you think at what is happening in the present moment with mcdonald's and walmart also suggesting there willing to pay higher wages. i think that is an advantage. there are a bunch of lowe's coworkers that would rather earn $10 an hour than eight dollars an hour. my guess is that many of those workers are going to aetna rather than competitors. there is a strong argument when it comes to firms in customer service. customer service means knowing about an identifying with what it is your customers want. if you are more or less paying your workers part of a completely separate society where they cannot afford to be a part of or engage in the same activities as your customers they may not understand it. to take a firm like aetna, it is moving towards having folks on the phone dealing with customers' inquiries. if you want some of the deal with that, it makes sense to
have some of the that knows what health insurance is. who understands the difficulties of dealing with bureaucracies over this and be a part of what it is the customers are calling about. otherwise, you get a real sense of being in a different language and we have had those experiences before with the other person on the line has no idea what we're talking about and that is because they don't. the dimension which i think resonates most clearly with our economic models which are about preventing shirking, higher wages have fewer disciplinary problems. why is it we behave ourselves? for some of us it is innate professionalism and for others it is we value our job. it shows that absenteeism is
lower in workplaces with higher pay. a lot of the studies focuses on two martyrsgins -- absenteeism and turnover. is a not the most important margins. those are the ones that are easiest for us to measure. it turns out that turnover is overwhelmingly the most studied margin. there are a large number of studies showing the higher the wages within a workplace, the better the work, the more likely they are better to stay. people's learning on the job and sense of skills develop as well. that is what economists have done a good job of measuring. i think there is another realm that matters that we cannot measure as well. when we write down these models, we think about it is really important to pay workers well so
they think about how they are doing relative of their outside options. sometimes it is important to treat people fairly. the sense of being treated fairly which is not necessarily a cold cap relating ratio -- cold calculating ratio. it is a general sense of how you feel treated which can really matter. if you look at -- there is no shortage of firms that have dysfunctional cultures of conflict between workers and management, labor and capital. one of those dysfunctionalities goes back to not feeling treating fairly. there is a real sense that when workers are treated well and paid fairly, management gains legitimacy. think about different firms you have been in. if i want to go to the stationary closet right now upstairs, i feel like i would be treated very fairly. if i wanted to, i get takeout
200 pooundsunds of linesd paper. i don't do it because i regard this as having a great deal of legitimacy. i don't do it because if i am seen walking out the door with 200 pounds of paper right now, one of my colleagues who believes the institution has a great deal of legitimacy, might have a problem. workers tend to monitor themselves and monitor each other. you can compare this to any workplaces you have gone to visit where you have to go up to somebody behind the counter and indemand paper and they'll ask you what. instead of this trust, you have to put in extra monitoring and supervision because the institution is not felt to be
legitimate and then you feel comfortable stealing. my fellow workers do not have a shared interest in the institution's goals. i think the legitimacy really matters. one of the things you do see is when you look across companies the higher the wages, the fewer the supervisors. hiring after supervisors and people to monitor is incredibly expensive. a sense of legitimacy is really important. the original efficiency wage. e theory started by looking at health. the developing world -- villages where people simply do not eat enough to have a decent level of productivity. it is hard to make the case in the u.s. that we should raise wages so people to get enough calories to get through the day. a bigger problem is we have a few too many calories. i think there are important
versions where help does matter. that lower wage wages can be a real impediment. one of the real avenues of research in psychology -- people psychological burdens and how they do with it. one of the things we are learning there was a book written about this, being poor i s incredibly stressful. stress puts a great cognitive load on you. the greater cognitive load you are bearing, the less room you have to make the decisions in the workplace. one of my favorite experience -- and they go to a shopping center and they take a bunch of people and they do a little test. most people did pretty well. one way to make people do badly as before you administer the test say i want you to think about your car just broke down
and have about $1500 worth of repairs to make. when you take poor people and ask them to think about $1500 a repairs to fake car, they toughthought about it. rich people just go on with their lives. the test here is a standing for the performance of your job. the greater cognitive load may make people make bad decisions on the job. this is rich fo psychologistr. s. the idea that there are workers that make that decision stash we -- we see people that cannot get through without smoking and cannot afford it. they don't have much control at the end of the day. they will likely make mistakes with decisions they are making on the line as well.
the first claim i wanted to make is there is very strong reasons low-wage workers makeight be profitable. that literature gives a sense of what that is like. it is not an argument that goes everywhere for every firm. the more that involves the greater the turnover, the costs are, the greater the argument will be. the more important supervision is. the more import dealing with customers and customer service the more compelling that argument will be. the second claim is the argument that we should pay workers a little better which at first coming from an economist sounds completely bizarre. it sounds incredibly radical. it is the least radical claim you could make. if you look at most firms out
there, most firms pay workers more than they have to. very few people in the u.s. are paid according to the federal minimum wage. this idea that you should pay people a little better and hope for more is something every manager out there already understands. the third question i want to raise is is all this relative? maybe some of this is about you can get your firm to pay more and what matters is relative to other workers. it would not work for the whole economy. in the jargon we use, it might work in partial equilibrium. i think it really depends. it is not entirely obvious. modeslls which we write down that all of worker cares about is his wages and the job. in reality, what a lot of us care about is being treated fairly.
maybe it is not just about relativity. in the moment, the outside options for better workers is what i be better off working at walmart, is would i rather work at walmart or be employed? it is between work and not work. one would question it is all relative. i think the other point i want to make is that many of the pathways -- you can think about it not just about relativity. legitimacy or the cognitive load of being poor. being poor is actually -- it is not a relative thing. struggling to make ends meet probably does undermine the productivity of many workers. if you read about the american corps, they are full of examples of someone who had reasonably good job and their car broke down and there is no
way to get back to work the next day. that leads them to get fired and worse for the next job. there are real issues of can i get reliable transport to work? can i get reliable childcare? am i worried about my paycheck running out of the end of the month? they depend more on absolute relatives, which there is reason to believe if other firms raise their lower wages, that they too can get real productivity gains. the argument here is very much the way an economist would describe as too equilibrium. you could pay them a fair bit more and get a fair bit more. if the offset is one-to-one, the either of those will be roughly equally profitable. it becomes a question for a ceo
which of those two showed choices they want to make. one has more positive implications than the other. it is very difficult -- it is very difficult to know exactly what the offset is. i have spent a lot of time reading about every case study we are aware of of firms that decided to take the high road and see what kind of highs they get. i spent time talking to hr executives about how they think about these choices. it turns out we're really good at quantifying small things and bad with big banks. wethings. things like legitimacy and broader productivity payoffs are incredibly badly managed. we think they are there but we don't know if the yield a 50% return to the employer or 100% return or 200%.
the thing i am struck by when i spoke to hr executives making these decisions, they arehave as much uncertainty as we have. there may be a knee-jerk instinct that the right thing to do is to keep wages as low as possible. there is a real possibility it is actually worth exploring what higher wages look like and what payoffs you might get. there is no example in literature -- if i get acould aska a ceo take cap their plans with higher wages and the other half going down. then they would know whether this was a good or bad situation. the truth is no ceo has ever run that experiment and any ceo is choosing either the higher low road is doing through uncertainty. i think there is every reason to believe there is good reason for firms to be experimenting a
little more. it is just a different management practice. i will stop there. [applause] >> thank you very much. it is a great pleasure to be here today to talk about these issues. ist is obviously great to follow justin. i figured i would say a little bit about the macro economic settings. then a little bit about the broader political situation where i would argue there is some issues. first and foremost, for my research, this is a very nice subject to work on right now because we are in an analytical gray area between anecdotes and a trend when we look at
what is going on with self initiated corporate initiatives in the united states. you could either become a dominant national trend or he could fizzle away. when we think about it here would like it to spread like wildfire. but, i think we should recognize this may not be entirely straightforward for some corporate as it is for others. there are some objective analytics for each firm and we try to do that -- dig into which type of firms made which type of initiative whether it is high wages or other initiatives we have seen recently for microsoft and others. compelling their contractors to pay sick leave and other things. whether or not they would be more appropriate for some sectors and others. this is very important when you think about the true extent that
these types of initiatives can reach with respect to the share of the total u.s. label bor force and others. it is fair to say there are macro economic issues and political issues in which the trends are being played out right now. on the macro economic front, it is fair to say the macro economic logic that justin laid out is probably more effective when you are in a labor market like we have in the united states that is objectively tightening. there might be more of a first mover advantage for individual firms in this situation than a period where there is an abundant unemployed workers. it may even be that if we are in a situation as we find ourselves
in the united states today perhaps the real hurdle is moving people from the ranks of outside the labor force back into the labor force irrespective of their skill level. it is actually perhaps an even better point in time to raise wages because i think the analytical results will show one of the things, the most important thing that lowers people back into the labor force is actually higher wages. there is also perhaps a situation from the corporate side that -- i think it is fair to say that the marginal benefits for corporations for doing all the other things with cash on hand is perhaps declining at the moment. we know there has been low levels of investment, broadly speaking from corporations.
perhaps we are at the level where the stock market is such that mergers and acquisitions are not as attractive as they were. therefore, the lack of alternatives, the low interest rate environment -- basically now in a country where there is little institutional pressure fo r higher wages corporations find themselves in a situation that because of declining returns from these other avenues, it actually makes sense right now to pay their workers more. and that is a fairly nondairy benign -- not very benign interpretation. the recent trend is curving. if we look at most of the
polling, it is clear that income inequality and poverty issues have become an increasing concern for the public in the united states. and, i think it is also fair to say that right at this moment, there is little legislative livelihood of things improving at least on the national level. ironically, it is also very important to recognize that justin mentioned that actually this is an area in which there has been a lot of executive branch action taken. quite in the same trend that many corporations are doing because if you think about what barack obama the ceo mentioned last year in his state of the union speech, it was mandated through executive order that the contractors of federal government paid $10.10 an hour. in that sense the
subsequent corporate action i shall he mimics some of the corporate action -- actually mimics some of the corporate action of ceo barack obama. we have seen this year the workers of federal contractors to pay sick leave. that has picked up by microsoft. basically, we are in a situation that where because of the lack of legislative action by congress, if you end the rising level of anxiety in this issue, there is an opportunity for a corporation to get a significant pr benefit of doing this. they're appearing to have -- the company responsible stakeholder at this very point in time. i would also perhaps go further
and say that it is a little bit like the previous and well-known model for excepting corporate behavior that we have seen when we are talking about sweatshop labor in the third world and the likes. the dynamics are a little different but it is a very american initiative to drive this. yet, the interesting thing is that it is not labor standards in the third world, but it is actually perceived deficiency in the labor standards and wage levels of workers in the united states. which means when you look at the u.s. labor legislation code and you see -- the state is quite unique. having the legislative on the
books as was highlighted in the last state of the union, does not have mandated sick leave either. when you think about where is the next step of this type of pressure will be found. i would say these probably are the next steps for which these types of corporate actions will be taken. as i said, it basically means that we are in a very fortuitous for macro economics but also broadly political situation. i think what we are seeing is from that perspective, certainly very welcome. it has the opportunity to actually be taken further into other initiatives and other areas of labor standards, not just wages.
i think i will stop there. thank you. [applause] >> thank you very much. this is a wonderful conference. thank you, adam, for including the loyal opposition. it is a pleasure to be here. the discussion today is about voluntary wage increases for workers. i will take voluntary to me nonlegislative. that a firm is responding to market pressure rather than legislations or executive decrees. i will discuss voluntary wage increases as they relate to federal minimum wage legislation and to the living wage movement. it is a little different spin. i welcome voluntary wage increases for lower wage workers. i welcome a situation where firms are responding to market pressure and are raising the wages of low-wage workers.
i think this discussion can get a little technical but sometimes people sound like they are defending the wages and that is not something we should be defending. we should be defending appropriate wages. this is very good news for the macro economy and the labor market. it would at evidence in support of the high hypothesis that the labor market is tightening. very importantly, it is good for low-wage workers themselves who should be our primary concern. many of them have trouble making ends meet. justin did a great job talking about issues of cognitive load and stress that having financial problems can lead to a person, that pushes them into a direction of being a bad worker. it also pushes them in other directions that are bad as well in their personal lives so we should be very happy when some of those pressures are alleviated. these workers are playing by the rules -- they are working hard,
getting a pay increase is a fantastic development for them. we should be happy for them. i will turn to my remarks which is voluntary wage increases in the context of policy. of a make three points -- i will make three points. the first is, according to press reports, average wages even after these voluntary wage increases among firms and industries that this proportionately will still be lawyer than the desire federal wage of the president and congressional democrats. it is hazy because not all the information is out there but my understanding is firms in these industries that have announced voluntary increases so far will be under $10.10 an hour. mcdonald's promises to pay an average of $10 an hour which is less than the $10.10 an hour. this is true for walmart.
it might not be true for some firms that have a broader distribution of wages within their firm. jacob makes the correct point that industries matter. it seems to be true that firms that are in industries that are thought of disproportionately low wages and hiring low-wage workers. the living wage workers call for a $15 an hour minimum. it is far from the wages some municipalities most famously seattle are putting in place for their firms. $10.10 an hour is likely to high for a federal minimum wage. very few firms will be announcing pay increases are still below what the president and congressional liberals would require the minimum to be for all firms. we need to keep that in mind when trying to map the discussion of these voluntary pay increases into our discussion about national public
policy. this estimate of $15 an hour which some municipalities are moving towards is way too high. the second point i would make is these voluntary increases do not justify raising the federal minimum wage. it is an empirical fact that wages are mysterious. justin did a fantastic job of saying why wage increases make sense. and how in many cases those realities are either not the main focus of economic theory or are missing entirely. it is also a fact that standard techniques can only a fraction of the variation -- can explain only a fraction of the variation of processes. we should proceed with caution about policies that might result in significant employment losses and vulnerable americans. to listen to many on the left,
you would think what i just said is a fringe view. in fact, i don't think it is. the nonpartisan congressional budget office which is the referee for so many of our public policy debates recently reported that raising the federal minimum wage could result in hundreds of thousands fewer low-wage jobs. and reported the federal minimum would result in $41 billion in increased earnings for workers. this sounds good but if you dig deeper only 19% of that $31 billion would go to families below the party line. whereas one third of the $31 billion would go to families earning more than three times in the poverty line. the minimum wage is a very inefficient tool to help low income families. and it may result in significant
losses among the very population minimum wage advocates are trying to help. we should celebrate that some firms are raising wages. these increases are in the best interest of the firms and the economy at large and they clearly help the workers. we should recognize that mandatory increases are very different than voluntary increases. mandatory increases very likely could carry unintended consequences. my third point is that despite the gloom and doom i delivered we should not do nothing. i think there is an appropriate public policy's response at the public level to the situation of low wage workers and that is the increase the earned income tax credit. the basic idea is simple. it is very efficient because it
is targeted to households with low income rather than workers with low wages. those a very different populations as is suggested by the cbo's analysis as to which households will get h much of that $31 million increase in earnings. previous extensions have pulled americans into the workforce and millions of people, including millions of children, were out of poverty. to take a step back, we should have a goal that no one who works full-time and has a household lives in poverty. that is a social goal and that goal should be met with social resources. proponents of involuntary minimum-wage increases argue the burden of meeting that goal should be placed on the shoulders of the businesses who employ low-wage workers and
other customers of those businesses that will see higher prices. the eitc is better than this. it marshals resources from all society to help meet that social. instead of a few businesses, the eitc support work, encourages earned success and fights poverty using resources from mcdonald's, walmart sure, but also from well-to-do economists, wall street financiers, corporate ceos and hedge fund managers. all of society should be employed to achieve that noble social goal. the itceitc is designed to make that happen. it is a superior tool than t federal minimum wagehe -- then the federal women minimum-wage. i will leave it thatat that. [applause] >> good morning. let me begin by saying that i'm
going to shock you and say that i can agree with all the people who have come before me that raising low-wage workers pay is a good idea. and, i find myself a little surprised to be amidst such a robust and passionate consensus. this is the first time in which i have been at the peterson institute for a moment in which everybody all embrace the afl-cio's current strategic campaign which is called raising wages. i welcome all of you to it. i think there is a set of things that have to be said about this to make sense of the back and forth around it. the first is that we really misconceived what is going on in
america's labor market and broader economy. will be talk about the issue we are talking about today as an issue of poverty. there is no question it is an issue of poverty. just a be clear about this because i suspect none of us in this room work for an hourly wage that we are talking about a current minimum wage that full-time is roughly $14,500 a year, depending on how long you get paid. and how long you work. a $10 minimum wage is about $20,000 a year. before you get to outrages with the possibility that somebody might be getting paid that much money that does not deserve it, spend a moment thinking about how your life would work if that was how you were paid. poverty is important to you because what i am describing is wage levels in which people live in poverty. weather live in poverty according to the indexes we keep officially.
any of these wage levels, people that depend on that have a life of poverty. the reason that is not an issue is because those wage levels, that level of the minimum wage, large firms of the kind we have been discussing paying those minimum wage levels are an embedded part of a larger problem which is wage stagnation across the entire labor market up to roughly the 90th percentile. in that environment our economy has all sorts of problems. twhat was referred to in adam posen's this morning, it is a fantasy. it is a fantasy when you look at it in respect to low-wage workers whose incomes are so low that even when you are talking about millions of people, the kinds of wage increases we are discussing do not have a macro economic effect. long-term wage stagnation across what amounts to the entire labor
market does. so when we talk about policy solutions, we have to ask ourselves what is the impact on this larger problem? in addition to asking the problem that michael put in front of us which is what is the most effective way to increase incomes of the poor. now, here are a couple of basic observations that i will make and then i assume we will have a group discussion. the first is the question of what our minimum wages to be is embedded in the question of the pay increases that have been made. i love the term that was used -- voluntary wage increases or self actuated wage increases by larger companies. i will come back to that in the second. that is giving a disservice to
the people that work for those companies. talking about the minimum wage for a moment -- the minimum wage today is roughly 35% of the average hourly wage. at its peak in the late 1960's, it was 53%. if the one major problem that is associated with arguments about the impact of raising the minimum wage on the wage employment is wage compression. it is what drives the numbers that michael was talking about. whether or not you agree with that, as michael hinted, the bulk of market academia is a little more optimistic about raising the minimum wage and then cbo is. it is all driven by compression. compression is about wage stagnation across the labor market. if we are trying to think seriously about raising the wages of the poor, we should think about how to reverse the
shift from returns on wages -- returns on capital to return on wages more broadly. if we wanted to return to historical levels of minimum wage just looking at the effects of inflation, we would be talking about a minimum wage around $11 an hour today. not years from now, but today. the second question, the second point i will make is this issue of voluntary wage increases. walmart, which is the first firm to initiate, to have announced wage increases for its employees that got a a lot of attention, walmart's employees have been engaged in a multiyear effort to get walmart
to raise their wages. they have gone on strike's. they have picketed walmart. they have engaged in all the things that historically are associated with corrective bargaining. they have done so without an exclusive bargaining relationship with the country. mcdonald's workers which is the latest announcement, have done the same thing as have the employees of other fast food companies. april 15 is the day on which a wide range of employers intend to go to another round of strikes and protests demanding as michael alluded to, $15 an hour and a union. again, they are engaging in collective bargaining but they are not doing it within the national labor relations board structures. in both cases, walmart workers and mcdonald's workers have been pursuing their legal remedies at the national labor relations board, particular one those
firms have illegally retaliated against them by firing them. both of these companies are invested in heavy-duty social conflict. what they are doing is they are engaging in collective bargaining as well. they are making offers to their employees. the clear subtext of the offers is please be quiet and go away. on april 15, we will see what mcdonald's workers think about the author. the fastening thing about it -- fascinating thing about it is should we give it a running experiment? mcdonald's offered to raise its wages by a dollar an hour up to a $8.25. mcdonald's was offered to those that were currently for mcdonald's corporate. mcdonald's owns a bunch of
restaurants but it is a small portion of the overall mcdonald's in the country. most mcdonald's are owened ned through the franchise and they are not guaranteed the wage increases. icepack to see those experiments -- i expect to see that experiment. what is going on at mcdonald's and walmart and at the other fast food companies is collective-bargaining. it is just collective-bargaining on the street meaning instead of sitting down at the table and negotiated, people are yelling at each other through megaphones. workers use literal megaphones and the employer uses all the apparatus that are available to a large, well resourced corporation to make its offers. now, if we think that that is a better way to raise wages -- it seems as though there is some consensus in this room that it is -- than the minimum wage, we ought to first -- i think
there is not disagreement in this room. maybe there is. i don't think there is disagreement that we got to have a minimum wage. the question of where each be set seems to be higher or where it is now which is at a historic low in relationship to the rest of the labor market. that is a really good argument. the minimum wage is not good enough as a way of dealing with the problems of wage stagnation across the labor market, including relatively low-wage work like fast food and walmart where there are powerful arguments is they should be paying well above the minimum wage. they are not -- but, the question is how? if you believe what is going on right now in the streets so to speak, collective bargaining by walmart and mcdonald's workers with walmart and mcdonald's management, if you think that is the way to do it, you should ask yourself how do you sustain that and broaden it?
the reality is that, and there is no secret about this, the reality is those workers are being supported by other workers who are part of the old collective bargaining system that is done through the national labor relations act through exclusive representation, pain union dues and the like. if you want to have a labor market in which there is a robust system of collective bargaining and all issues do not become essentially issues of public policy -- there is some room for customization in firms -- you have to actually have one. and, something we don't talk about very much here but which should be said is that wage stagnation is direct the correlated with the dismantling of the collective bargaining system in a way that is not true in other countries. i would suggest to you -- to the
extent that we all agree that it is good for low-wage workers to enjoy wage increases -- i suspect we all agree it is good for workers as a whole to increase wage increases for their productivity, then the question is should we have a minimum wage but where should we be? i'm afraid there is no way to get around it. needs to be higher than it is now in order to it to simply do a job, a. b, we need to think carefully about how in today's economy labor market, globalized world how do we ensure that the interaction that is going on between walmart workers and mcdonald's workers and walmart management and mcdonald's management which is leading to their wages being increased after years of stagnation. at walmart falling compensation. if we think that interaction is a good thing, how do we ensure the workers who engage in it are not doing so at the risk of
their jobs which is the reality of what is going on now and that is why the national labor relations board has brought charges against walmart who fired workers who fired workers were engaging in this process that we like so much. we should ask ourselves how do we ensure that process is routinized? in a world of franchises and precarious work. really, if that is what we say we want, that is what we need to do. thank you. [applause] adam: could i ask our analysts to come up. i will make a couple of remarks to pull this together. for those of you tuning in on webcast or c-span, just a reminder that all of today's remarks and the luncheon speech by mike darda will be available on
the website. our briefing and other materials will be available on the same page -- pie.com. before i let my happy worriers go at it, let me make a couple of points. the first is factual on this word voluntary. i normally don't want to get into fax with damon -- fac ts with damon but on this one, ataetna raised wages without a strike threat. they were not the only ones, but they were the big ones starting at this year which is why we bothered to have him come. but, more importantly, i think what i asked all of our panelists in our outside guests to talk about -- it was right to go there. i want to stress what we are talking about in terms of the so-called voluntary low-wage
sector or full wages for low-wage sector. a large share of people i'd minimum wage are people who are young or part-time or have low attachment to work. there are reasons and i am personally in favor of large minimum weightage hike. at think it is reasonable to think about the millions of people who are one state up to the classic working-class that are in jobs that maybe slightly less precarious and have the potential to be long-term, if not permanent and who are full-time workers and often heads of household. the issue is whether or not there is an economic case to be made as well as a business case and a pr case. we are here for the economic case. that companies should be investing more on that instead of workers. instead of citigroup investing huge amounts of money into people that is the higher end of
distribution, whether it makes sense for private sector to invest in the people and what is punitively the low scale of the dish a vision. -- distribution. has jacob and justin put it and was documented really well in our briefings, this is not a huge share of the workforce but it is a larger share of the minimum wage workforce. it is not something that every company will do. go back to mcdonald's. we can be upset with mcdonald's because they run on a very low wage model. we can ask ourselves whether that is a sustainable model. but, the issue is there is a broader range of companies in this country who oiinput is not solely low-wage waiver. labor. sectors, types of firms we are trying to identify where he could be broadly sensible to
invest in that because it is not like you are an individual cleaning service or individual mcdonald's franchise where you move your labor input with your profit margin. i think that is part of the question we have to think about -- how realistic is that. we would argue that is realistic for larger companies. the second point i want to make is to bring this back to the international context with jacob did in part. . has a great essay -- he has a great essay in our briefing. it is very important to put the kinds of things that michael cited from the cbo in context. when we talk about the cbo saying they would be x hundred thousand work jobs loss. three cautions -- first, that is not dynamic scoring. we talk a lot about dynamic
scoring on fiscal sides. that is also a partial equilibrium result. i just want to be clear for the audience. it is about what is the immediate impact, not about if there are the kinds of productivity affects that justin was talking about and you reallocate workers. potentially, that is not we are talking about. the second point is the couple hundred thousands of people are a lot of human beings. we should care about that. the u.s. workforce -- what you are talking about is the effect of a wage increase. human beings are not a rounding error. from a policy point, getting caught up in something that