Economics from a people first point-of-view

This week fast food workers in New York City are demanding a raise to their minimum wage of $7.50 an hour. Why are American workers’ wages so low, and why aren’t American companies paying higher wages?

Bill Clinton opened up the “third world” to American investment and trade. This brought in new customers abroad for American goods. It also created a pool of foreign workers for US multi-national companies. Foreign consumers and workers are making Amercian corporations wealthy, so wealthy they don’t know what to do with all that “junk in their trunk”.

George Bush Jr. took up the challenge offered by Bill Clinton. Bush clumsily attempted to open up the Middle East to American economic expansion. Barack Obama and his former Secretary of State, Hillary Clinton followed more delicately in Bush’s footsteps. Sooner or later,  the “democratization” of the Middle East will make US corporations even richer.

But what about US, the American people?

A new survey says “Eighty Percent of U.S. Adults Face Near-Poverty…” We hear constantly how wages in the US have steadily declined over the past three decades. Headlines also show that US corporations increasingly use bankruptcy as a means to shrug off their contractual pledge to provide employee pensions. Now cities are doing the same, and some states in the US are on a similar path.

Working Americans face a crisis. We can accept the inevitability of the new cheap-global-world-labor force or get creative. I suggest we get more creative. Continue reading →

The discussion of the Trayvon Martin case, oops, I meant to say the George Zimmerman case, is currently focusing on the jurors. I can’t help but think it should focus on the judge, attorneys, and witnesses. This is where the real racism, sexism, homophobism and injustice really lies.

This case, a case branded from the start as chiefly about the victim rather than the defendant charged with committing a crime, hit me really hard for a couple of reasons.

One reason is that I’ve lived in the South. Continue reading →

Taking business deductions creates two problems for the self-employed:

Deductions encourage self-employed workers to compete in “a race to the bottom“. Self-employed try to earn the least money possible in order to pay as little as possible towards SE (Social Security/Medicare) taxes. Instead of focusing on growing their business, they fixate on keeping it in check by spending more and thus, earning less.

Deductions can threaten self-employed worker’s retirement. The US Social Security Administration uses NET BUSINESS EARNINGS rather than gross business earnings to determine unincorporated self-employed workers’ Social Security eligibility and payout at retirement.

Yet, it’s in the interests of our Social Security system for the government to encourage self-employed to earn more money. In fact, it’s in the best interests of all Americans to help self-employed businesses survive and thrive. That’s why I’ve proposed a “No-Cost Tax Break for Self-Employed“.

But even if we reform the SE tax rate, how do we get self-employed workers’ incomes headed upwards instead of downwards? Continue reading →