$15? Or $10.10? And how quickly?

After figuring out that Thomas Piketty has written a left-neoliberal book on capitalism's faults that ignores organized labor, and also figuring out that Bill Clinton will never, ever apologize to labor for NAFTA and the WTO, I can sympathize with the international fast-food employees' strike in wanting a higher minimum wage.

(Hat tip to Perry for reminding me of this.)

But, per the header of this piece? That said, in details of the strike, I think $15/hr, without a phase-in of seven or so years, is too high. Even then, it might be a bit much. The $10.10 of Beltway rounds, with a four-year phase-in, AND a COLA clause as part of that, sounds about right to me.

And, that's in part due to strategy reasons — reasons of what's realistic — as well as other considerations. And, I'm not alone:

Gary Chaison, a professor of industrial relations at Clark University, said Thursday’s protests were an example of “the labor movement reinventing itself. It’s the most experimental thing labor has done in a long time.”

But he characterized the goal of a $15 hourly minimum as overly ambitious.

“They seem to forget you have to take little steps at a time,” he said. “When you don’t have very much, getting a little can mean a lot. You can’t get it all at once.”

Exactly.

And, expecting $15 an hour and almost immediately? Your store managers would put you all on salary and abuse comp time laws. Or try to figure out a way to classify you as independent contractors. Or simply shut down less profitable locations.

Yes, I know big businesses often use threats of closure or cuts as their own negotiating tools. And, I know that McDonald's jobs can't be outsourced to China.

And, I know it's true that wages are a fairly small portion of overhead for fast-food restaurants. Nonetheless, asking for them to be more than doubled off the current US minimum wage of $7.25 is a bit much.

And, if wages get to honestly be too big a portion, businesses will do more than just threats. Besides closures, or cuts, you could have cuts combined with split shifts. Every day of your work week. Or, even more of last-minute call-ins, or last-minute stay-homes, on your work schedule.

We also have to remember that a country as fast, populous and diversified as the US has great regional income disparities. In my current location in Texas, a $15/hr minimum wage would pretty much gut half the jobs here.

I blogged about this a bit before with Seattle's push for a $15 minimum wage. Protesters need to, per Chaison, have some sense of political reality.

They also need to have some sense of economic reality.

And, that's not just at the local level. The movement behind this all, Fast Food Forward is reportedly backed financially by Service Employees International Union.

A $15/hr minimum wage, at a full-time, year-round job, would produce a higher wage than the current individual median income, per the Census Bureau. I can understand (unlike Barack Obama) a deliberate "overshoot" as part of negotiations, but when you're pricing yourself out of the ballpark at the start, you don't sound very realistic. Or very well-informed. And, it's not just small-town Texas. Let's take Maplewood, Mo., a down-on-the-edges, but not totally "out," St. Louis suburb. A minimum wage of $15/hr on a 40-hr week puts you at 95 percent of annual household income there, and at almost 45 percent above per capita income. Nearly the same is true in a nowhere near down-at-the-edges heartland city, Grand Island, Neb. About 40 percent above the per capita median, and while only about 75 percent of the household income, still.

And, given that these protests are being backed or organized to some fair degree by organized labor folks well above the level of individual fast-food workers, that too is sad. Even in the glory days of Eisenhower, when adjusted into real dollars, the minimum wage was never but a sliver above $10 an hour.

So, restaurant workers? Dial back to $10.10, but with unionization rights as part of the deal. As for the $10.10, the Center for American Progress agrees. Its reason? That would be 50 percent of the national mean (not median) per capita. Elsewhere, Dylan Matthews notes than $15 would be 75 percent of the national median. Given the amount of economic diversity I indicated exists in America, I am confident in saying that it would be more than 100 percent of the median for census tracts of 25 percent of America.

Sadly, per Matthews, Felix Salmon is dumb enough to tout the $15 minimum, too. He says it would help the feds by bringing in tax revenue and moving people off the Earned Income Tax Credit. He should know better. He should know that with as high of a hike as I propose, even in northeastern metropolitan areas, some of this will happen.

Of course, about nobody I link above has ever lived in small-town Midwest or South areas.

SEIU? The same for the bulk of the types of workers you represent. Don't overshoot; you won't get sympathy for the broader issues behind this, including ever-increasing judicial hostility. Beyond that, that hostility is backed by Rick Snyder's election as governor of Michigan, Scott Walker's election as governor of Michigan, and more. A lot of Americans think that "union" is a four-letter word.

That said, I know that not a lot of workers are working 40 hours a week on minimum wage and that American unions like to use the minimum wage to bolster employees on the first tier above that. That then said, that's why a $15/hr request is really bad. SEIU? Nobody's going to want to pay janitors and security guards $17/hr in Grand Island, Neb. Simply ain't happening. They'll put up with dirty banks and fewer security guards.

Tocqueville missed noting that America is a land of confrontations, as part of American democracy. Too bad he wasn't here in the 1880s.

Speaking of him, this is part of why the US can't be fully like Western Europe. Lower population density, and more diversity within the various states. Well, maybe Western Europe will learn its lesson that a "Western Europe" that includes places like Greece under the euro umbrella can't be fully like Western Europe, either.

Finally, it's also why I identify myself on this blog as a skeptical left-liberal. I attempt to subject left-liberal ideas to some form of logical and empirical analysis before discussing them.

Update, May 18: Another way to put this, per the comment of Simon, who's non-American, is that the minimum wage, with that much of hike, has a broad parallel to the European Union's Eurozone crisis, to more clearly spell out what I first said. The rural South and Midwest are Greece, and New York City is London. Raise the minimum to $15/hr, and fair chunks of the US become post-eurozone crisis Greece.

And, per Simon's one comment, I noted that at $7.25, wages are a relatively modest part of fast-food overhead; I specifically indicated that likely would not be the same at $15. (Also, per that link to the Washington Post blog about the Center for American Progress, Australia's $16+ minimum wage would only be about $12 at most, here, at least under CAP's sensical idea. Also, Australia's minimum wage has a variety of loopholes, per that same link.

So, with that, and the added links above, can we please stop believing that a $15 minimum would be a painless panacea? I've already knocked down attempts to link it and helping the homeless.

RIP Kyoto Treaty

The tower of a church is seen between the smoke-billowing
chimneys of the brown coal power plan Frimmersdorf
in Grevenbroich near Duesseldorf, Germany.
(Frank Augstein/Associated Press)/via CBC

Per a Canadian Broadcasting Corporation report, the Kyoto Treaty officially died with the end of 2012. And, as the recent Doha round of climate talks shows, we have little to replace it with.

It's arguable that if Bill Clinton (pre-Monica Lewinsky, too, but post-re-election) never had plans to submit the bill for Senate ratification even at the time the meetings in Kyoto started, he never should have inked his name, or made pledges he wasn't even going to try to deliver.

Second, it's too bad that, already then, Kyoto did lump all developing nations into one basket. Conservatives around the world are right to complain on this one — China is not the same as Botswana.

Third, it's also too bad that the old G-7, at that time, didn't already start talking about what mechanisms, in terns of tax, economic and other government policies, were most likely to work the best to obtain results.

Today, we know a simple, straightforward carbon tax is the answer. But, one moderate recession and one whopper semi-depression recession later, that's a much harder sell than 15 years ago.

And, with more economic muscle on its part, putting China in a separate basket from Botswana, per Point No. 2, is an almost impossible sell today.

That said, there is an answer for both, which I have mentioned more than once —

Carbon tariffs on imports.

As far as I understand the World Trade Organization, it allows such carbon tariffs as long as they're not steeper than carbon taxes.

There you go.

Geithner fiddles while senators burn at China

The Senate is raking Treasury Secretary Lil Timmy Geithner over the coals, and rightfully so, for not doing more about Chinese currency issues. At the same time, Chris Dodd, D-Pompous, while noting that every administration from Reagan on has kowtowed to China, ignores that every Congress in same said time frame has willingly swallowed presidential administration lies about "action."

Meanwhile, the administration is taking action on two lesser issues; but, that's not enough. In that story, an economic analyst notes that getting China to revalue its currency could create 500K jobs here and cut our trade deficit in half.

China: Green cheater or green genius

On the surface, it certainly appears the great Red giant is a big Green cheat. Surprised? It's industrial policy, mercantilist trade, etc., right?

Well, first, it couldn't be a big Green cheat without lots of enabling by the U.S. and the EU. Nobody's filing WTO antidumping cases, even though this is clearly what Beijing is doing.

(M)ultinational companies and trade associations in the clean energy business, as in many other industries, have been wary of filing trade cases, fearing Chinese officials’ reputation for retaliating against joint ventures in their country and potentially denying market access to any company that takes sides against China.

And, proof this is not just illegal subsidies, but will actually become "dumping," if not already?

Government-subsidized turbine makers are now preparing for large-scale exports to the United States and Europe, which could also result in violations of W.T.O. rules.

Chicken-shittedness is alive and well, in other words. And, this isn't "unskilled labor," like making plastic trinkets arguably is.

In fact, this is at the heart of Preznit Kumbaya's green jobs push. Which is rapidly being undercut:

China is also on track to make nearly half of the world’s wind turbines this year. China offers financial incentives for utilities to use wind power, which is less costly than solar power, and the country passed the United States last year as the world’s largest wind turbine market.

Meanwhile, the Obama Administration is "beginning discussions" on how to respond. Just like this administration, a day late and 8.3 yuan short.

Instead of "beginning discussions," Team Obama needs to listen to Alan Tonelson and Kevin L. Kearns of the United States Business and Industry Council. The pair argue that we need to continue reducing our trade deficit as one part of continuing to stimulate the economy. Fighting Chinese dumping in green manufacture would be a good part of that program.

For a further look at some of these arguments, with a somewhat different angle than mine, visit Salon.

Does Google dust-up show fear in Chinese eyes?

Despite many Westerners' view of China as "Behemoth, Inc." on the economic front, Nick Kristof argues there's plenty of angst indeed in the eyeballs of Chinese leadership. He compares China of today with the "paper tigers" of Taiwan and South Korea in the 1980s.

He then wraps up with a kicker of a summary graf:

The Communist Party’s greatest success is the extraordinary economic changes it has ushered in over the last three decades with visionary policies and impressive governance. Its greatest failing is its refusal to adjust politically to accommodate the middle class that it created. And its greatest vulnerability is the way it increasingly neither inspires people nor terrifies them, but rather simply annoys them.

That said, lest anybody is unaware, Kristof notes that both Taiwan and South Korea went down the path of full democracy, and did so successfully.

So, it is Beijing's ultimate fear: the fear of losing power.

Of course, Democratic Party neoliberals will say this shows the power of "engagement." It actually does no such thing. As Kristof notes, Team Obama really doesn't want to go to the mat for Google on a possible WTO case or anything else. "Engagement" only means, "let's engage China in replacing U.S. blue-collar jobs."

Could Google-China row go to WTO?

Google claims actions like China's censorship and filtering hinder international trade. Although the company doesn't mention the idea of presenting a formal case to the World Trade Organization, or pushing the U.S. government to do that, it's hard not to see that as a possibility if you read between the lines.

China abuses WTO, ignores IMF

As the No. 1 filer of complaints with the World Trade Organization, it's clear Beijing is monkey-wrenching the trade system. Combine that with ignoring unenforceable comments from the International Monetary Fund about its undervalued currency, and that's how you get the Chinese "behemoth," especially vis-a-vis the U.S.

Ultimately, the "two-track" system isn't that viable in today's era of not only "free" trade, but internationally interconnected finances, money supplies, etc., and many economists know it:

“Many of us would like to see the W.T.O.-style commitments — with people’s feet being held to the fire — at other international agencies, like the I.M.F.,” said Jagdish Bhagwati, a Columbia University economist.

The story notes that currency devaluations, as well as trade walls, were part of what exacerbated the Depression. That's part of why the Obama Administration would like China to do more. But ...

China is the biggest buyer of Treasury bonds at a time when the United States has record budget deficits and needs China to keep buying those bonds to finance American debt. But the Treasury also faces an April 15 deadline for whether or not to list China as a country that manipulates the value of its currency.

Well, well, we will see how this plays out. If Team Obama had any balls, and to jump-start domestic legislation in the Senate on greenhouse gases, it would slap carbon tariffs on China.

Chinese environmentalism boosted by protectionism

Or, how the US is doubly screwed, by itself, by the WTO, as Chin refuses to let U.S. and European companies work on solar or wind power products.

But, we don’t have to put up with this crap, legally; China has never signed relevant WTO side protocols on government procurement, contra a promise way back in 2001.

However, we do have to, in a sense, since our debt is hostage to China. Europe, on the other hand, has more room to play; will we see a call for sanctions against China?

Obama an idjit on green trade penalties while Congress is way too late

Acting, or rather threatening to act, the Waxman-Markey climate bill just passed by the U.S. House has a trade penalty provision against countries that don’t adopt their own global warming legislation. That’s you, China, followed by India, etc.

But, President Obama opposes it, calling it protectionist. (That said, I don’t know if such a provision is allowable by the WTO or not.)

Meanwhile, Obama admitted that the bill’s targets were modest and would not do enough to rein in global warming, but was confident more legislation could be passed in the future.

Uhh, sure.

But, the other half of the laughability factor is Democrats, led by folks like House Majority Leader Dick Gephardt, rejected doing just something like this, with teeth,as far as air pollution, in the NAFTA crafting 16 years ago.


Anyway, for visitors, I’m curious about your views, so take the poll if you would. (Multiple answers are allowed, as I have a bit of snark in it.

Free polls from Pollhost.com

What's your take on the Waxman-Markey climate bill?

Very good per the current political climate Solidly per the current political climate So-so at best in the current political climate Something is better than nothing, I guess Where was Obama's leadership on this? Sometimes the so-so is the enemy of the better I reluctantly agree with Greenpeace - dump it Weak from the start, got worse with time

US and EU agree on a trade issue

So much so that they’re both filing against China in the WTO for raw materials export restrictions. Ahh, this ought to be fun.

‘Buy American’ for climate control? What a laugh

So the U.S., the biggest climate-control foot-dragger among developed nations, and worse in some ways than China or other “Tier 1” developing nations, has Members of Congress suggesting a “buy American” provision in the Waxman-Markey climate change bill now working its way through the House.

I can understand the U.S. Chamber of Commerce being against it, as the C of C always looks to cheap labor in underdeveloped countries as the “solution” for everything. (And, no, what is “good” for the U.S. Chamber of Commerce, or even your small town’s chamber of commerce, is often most assuredly NOT good for America.)

And, yes, it could violate WTO rules. Ottawa is already steamed.

Sure, we might stiff Canada. But, what if Beijing gets hacked off?

Beyond that, there’s my original point. We’re the biggest foot-dragger on climate control, in part because neither half of the duopoly wants to piss off the American business from whom we’re supposed to buy?

I’m at the point where I hope House Ag attaches such onerous provisions to Waxman-Markey, or the Senate simply digs in its heels, and either way, the bill gets killed.

WTO to get environmental and moral trade test

The European Union is moving closer to a ban on importing seal products.

The ban isn’t so much environmental as moral, over concerns about Norway’s, and even more Canada’s, allowed methods of seal hunting. Canada has already said it will appeal a EU ban to the World Trade Organization; Norway has now said it will do the same.

Unless the EU can show environmental cause, I think it’s got little chance of winning this.

‘Buy American’ in stimulus package good idea, bad idea

The House included a Buy American provision in its economic stimulus program that sounds great on paper. But is it?

The rider would require that only American iron and steel be used in infrastructure projects funded by the stimulus.

Promote American steel-making sounds great, right?

But, I can’t see how this passes World Trade Organization scrutiny. (That’s not to say I’m a fan of the WTO, just reporting the issues.)

Compound that with the fact that sovereign wealth funds from China and the Arab world, among other places, are getting antsy about the possibility of being asked to take a haircut on their investments in U.S. investment banks as part of a “bad bank” idea, and the “Buy American” provision looks like an even tougher international sell.

The European Union has already threatened countermeasures, in shades of the Great Depression after the 1930 Smoot-Hawley tariff.

A better set of ideas would be to go after Chinese steel dumping while giving bidding bonus points to using U.S. steel without requiring it.

GOP and Dems wrong on Russia and economics

Going far beyond the opposite of John McCain wanting to boot Russia from the G8, can somebody tell me…

Why is China in the WTO and Russia not? No, Yeltsin’s Russia wasn’t perfect in the late 1990s, but it was better politically then China then or now.

WTO collapse – not all ‘developing countries’ are the same

In light of the apparent collapse of the Doha round of WTO talks, that the poorer of the developing nations, such as sub-Saharan African countries, aren’t blaming the developed nations of the world, such as the U.S. and other G8 members, the rest of the E.U., etc.

While I in no way claim to be an expert on international agricultural trade issues, and I of course don’t give a blank check to U.S. trade policy, I think in this case India bears as much blame as the U.S. for torpedoing the Doha round over its insistence on a higher cut from the special safeguard mechanism. Worth noting is that, in the longer term, the cut percentage that was on the table could help other countries more than India.

That said, you can’t but expect that the Tier I developing nations – India, China, Brazil, Argentina, etc. – would look “downward” as well as “upward” in trying to figure out what was best for themselves out of Doha.

Are WTO talks dead?

U.S. negotiators are bashing Tier 1 developing nations, such as Argentina and India (named) along with Brazil, etc., for resisting a Doha-round deal My odds? 3-2 that it will turn up dead at the end.

And, at least 3-2 odds that, even though Obama is actually a free-trader at heart, that it will NOT be picked up, in a new form, for at least two years after the change of administration, if he’s in power. Ditto on McCain, because Dems will control Congress anyway.

The EU is still divided, with many concerns. One issue is the geographic designations for agriculture within EU rules, such as Parmesan cheese only coming from that area, etc. Both the U.S. and Canada oppose that, but this is, I know an absolute deal killer for Italy and France, if the designations are not extended to the WTO.

WTO countries lower expectations for Doha

And, perhaps, they have raised the chances of success of past presidents, we have plenty of reasons to be concerned.

Time is of the essence. Negotiating countries want a deal by the end of this year, with the change in U.S. presidents as well as the European Commission executive, and elections in India next year.

The base of a deal is already in place:

The United States would cut its farm subsidies, blamed by poor countries for squeezing their farmers out of the market — a sensitive issue at time of food shortages in the developing world.

The European Union would open its protected market for food by cutting agricultural tariffs, giving developing country food exporters such as Brazil new opportunities.

And developing countries would cut their industrial tariffs, opening their markets to manufactures in rich countries.

Basically, a revised Doha would lower its sights on how much to accomplish this year, while locking a mechanism for further progress into some sort of place, albeit somewhat loose, to be sure.

With the “South”/undeveloped world holding newly inflated cards in things like biofuels, the North is getting shoved to the table more.

Pander alert – Hillary on OPEC and WTO

So, now Hillary Clinton wants to break up OPEC. And to do it via the World Trade Organization.

Like Shakespeare, let’s count the ways that’s wrong.

First, it assumes we could do it.

Second, doing it via a World Trade Organization complaint assumes the WTO would
A. See a valid case;
B. Be able to do something;
C. Actually do something.

All of those aren’t likely, because …

OPEC is OPEC and NOT OPIC. We’re the ones importing oil, in other words, OPEC is in the export business.

Is OPEC charging a tariff? No. Putting trade restrictions on oil (or other products) coming into their countries? No. (Other than they might eventually crack to hard-line pressure and start denominating oil in euros.)

Third, she believes OPEC is actually a cartel in the sense of being a successful one. She knows better; she knows that OPEC members have cheated on pumping quotas for decades.

Fourth, why wasn’t the Slickster doing more to fill the Strategic Petroleum Reserve when crude was $10 a barrel? People laughed at Preznit Bush a couple of years ago, but $70/bbl oil in the reserve was cheaper than $120/bbl.

That said, it’s clear he and Tricky Dick Jr. Cheney, aka Uncle Fester, have known the gig was up on Peak Oil for some time, and refused to tell that to the public. THAT is why Bushie started topping off the SPR.

Which gets to…

Fifth, Hillary refusing to talk about Peak Oil.

WTO – nobody right on bovine hormones

The World Trade Organization said the European Union’s ban on hormone-raised beef was not scientifically justified, but that the U.S. and Canada failed to follow WTO protocols in retaliatory steps. So what next? Both sides can appeal, and it sounds like Brussels will.

That said, even if the EU does not have scientific support for its objections, the absence of current evidence against the safety of something should not be interpreted as unqualified support for its safety.

Obama as well as Clinton schwaffle on ‘fair trade’

Obama has said he wants to look at environmental and labor standards in the Doha round of WTO, but given his background, how much does that really mean?

Obama acknowledged in the debate that in his 2004 Illinois Senate campaign, he said — as he put it now — "NAFTA and other trade deals can be beneficial to the United States." His comments, as reported in 2004, were that NAFTA had brought enormous benefits to his state, but that trade deals needed to be made better for workers. …

In his 2004 Senate campaign, he said the U.S. should pursue more deals such as NAFTA, and argued more broadly that his opponent's call for tariffs would spark a trade war. AP reported then that Obama had spoken of enormous benefits having accrued to his state from NAFTA, while adding that he also called for more aggressive trade protections for U.S. workers.

Well, there you go. Don’t expect anything beyond incremental change.