July/August 2014

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50 CINEMONTAGE / JUL-AUG 14 by Jeff Burman T here is a conventional wisdom when it comes to economics. Robert Reich, Secretary of Labor under President Bill Clinton, writes in Common Dreams, "Even though French economist Thomas Piketty has made an air-tight case that we're heading toward levels of inequality not seen since the days of the 19th- century robber barons, right-wing conservatives haven't stopped lying about what's happening and what to do about it." Reich names four economic truisms and debunks them. 1. CEOs and the rich are America's job creators. So we mustn't raise their taxes. "The truth is that the middle class and poor are the job-creators through their purchases of goods and services. If they don't have enough purchasing power because they're not paid enough, companies won't create more jobs and the economy won't grow." 2. Increasing the minimum wage will result in fewer jobs. So we shouldn't increase it. "In fact, studies show that increases in the minimum wage put more money in the pockets of people who will spend it — resulting in more jobs and counteracting any negative employment effects of an increase in the minimum. "Three of my colleagues here at the University of California at Berkeley — Arindrajit Dube, T. William Lester and Michael Reich — have compared adjacent counties and communities across the United States, some with higher minimum wages than others but similar in every other way. They found no loss of jobs in those with the higher minimums." 3. You're paid what you're worth in a free market. So Congress shouldn't tamper with pay equity. "CEOs who got 30 times the pay of typical workers 40 years ago now get 300 times their pay — not because they've done such a great job but because they control their compensation committees, and their stock options have ballooned. "Meanwhile, most American workers earn less today than they did 40 years ago, adjusted for inflation, not because they're working less hard now but because they don't have strong unions bargaining for them." 4. You can make it in America with enough drive and determination. So why help poor and lower-middle-class kids? "We're the only rich nation to spend less educating poor kids than we do educating kids from wealthy families. All told, 42 percent of children born to poor families will still be in poverty as adults — a higher percent than in any other advanced nation. "Don't listen to the right-wing lies about inequality," adds Reich. "Know the truth, and act on it." A NEW CRITIC OF INCOME INEQUALITY Thomas Piketty, whom The Financial Times calls a "rock star economist," may not be a household name, but surely has a better shot than any other living economist, writes Heidi Moore in The Guardian. He is the author and researcher of the 696-page groundbreaking tome Capital in the 21st Century that examines the grand dynamics of income inequality, drawing upon LABOR MAT TERS Truisms About Inequality CineMontage_Jul-Aug_14-4.indd 50 6/18/14 5:55 PM

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