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November 21, 2013 at 12:19 PM
JPMorgan Chase has agreed to pay $13 billion, including $4 billion for consumer relief and $6 billion to investors who lost big during the bank’s risky mortgage securities schemes. This settlement with the U.S. government is larger than any other Wall Street settlement and is roughly equivalent to half the bank’s annual profit. JPMorgan also agreed to a statement of facts, in which the bank admitted to key failures in buying toxic mortgage securities from 2005 to 2008. This NPR report offers a breakdown of the settlement and who gets the money.
A number of institutions will receive money in the settlement. Investors in JPMorgan appeared positive about the settlement. Shares of the New York-based bank rose 41 cents, or 0.7%, to $56.15 on Tuesday, as major U.S. stock indexes edged lower. This Los Angeles Times story offers more investor details.
I’m glad JPMorgan gave up trying to argue that it should not be held culpable for problems that came from the banks it acquired, including investment bank Bear Stearns and thrift Washington Mutual. But this does not end the anger and emotion surrounding the bank. Critics of the settlement call it a sweetheart deal engineered by a Wall Street-friendly Obama administration. Defenders call it precedent-setting, comparing it to the $4.5 billion in fines and penalties paid by British Petroleum over the 2010 Gulf of Mexico oil spill. A Seattle Times editorial welcomed the BP settlement.
The JPMorgan settlement could become a template the federal government would use to guide future action against other banks. If so, is the settlement letting JPMorgan off too lightly or is it in proportion to the bank’s transgressions? Take this poll. (more…)
November 14, 2013 at 6:14 AM
Civil Disagreement is an occasional feature of the Seattle Times editorial board. Here Bruce Ramsey and Lynne K. Varner offer different takes on a proposal in Switzerland for a guaranteed minimum income.
Apologies in advance if this gives you indigestion, but I just read that Switzerland is thinking about offering a monthly allowance to every citizen. No strings attached.
Americans will immediately think of Social Security, but Swiss citizens of all ages, not simply the elderly, would receive a check from the government. Others might think of public assistance, but Switzerland is not trying to help the poor here. There would be no means-testing. If advocates of the proposal gather enough signatures to put a referendum on the ballot, and if it passes, every Swiss citizen could count on a check.
Bruce, I’m intrigued by the plan’s author, German-born artist Enno Schmidt, and his invitation to consider what kinds of lives we would all lead if we could count on a small, but consistent, monthly stipend. Schmidt is part of the basic-income movement getting notice in many parts of Europe and among socialist political circles. It has its roots in income-inequality debates but unlike the minimum-wage battle here in the U.S., basic-income proposals do not rely on recipients participating in the workforce. So it’s not about improving incomes by raising working wages, but rather achieving the same means with a monthly check from the government for as long as you live.
This New York Times story compares conversations surrounding the idea to talk in the U.S. about Robin Hood taxes and single-payer health care. The article notes that “certain wonks on the libertarian right and liberal left,” are coming together around the idea, although they differ on whether the money should be an unconditional stipend or a means-tested minimum income to supplement the earnings of the working poor.
And from the same Times story, Charles Murray, darling of the conservative right wrote in his books, “In Our Hands: A plan to Replace the Welfare State,” guaranteeing $10,000 a year to all Americans over 21 and who stayed out of jail.” Let me take a moment to fantasize about what I would do with my check.
In the end Bruce, this is not an idea for America. But Switzerland is a smaller country with one of the most stable economies in the world. The Swiss are a socially conscious lot. Guaranteeing every citizen the ability to feed and shelter themselves without the stigma attached to welfare may work for them. What do you think, and more importantly how’s your digestion?
My digestion is fine but my dander is certainly up. The Swiss are a levelheaded people, and I hope they vote this idea down.
Life requires work. The government should not give able-bodied and able-minded citizens an idleness option in the prime of life. It’s bad for them. It’s bad for the people around them, especially their kids.
The chief promoter of this bad idea argues that the receipt of free money will “unleash creativity and entrepreneurialism.” And guess what? Enno Schmidt’s an artist, which is one of the few occupations on earth that millions of people will pursue even if not paid. Put on a stipend, many an artist would go on making art. (Indeed, there was a sculptor in Norway who had a deal like that with the local authorities, and Oslo has a park full of his work.) But, put on a stipend, would a watchmaker go on making watches? Would a waitress go on serving table? Would your garbageman go on picking up trash?
On this matter, we’re expected to trust the social imagination of an artist?
Or a libertarian, namely Charles Murray. In his book “In Our Hands: A Plan to Replace the Welfare State” (2006) he proposed a grant of $10,000 a year to every American over 21 and not in jail–but provided that we give up all other benefit programs. But it wouldn’t be done that way. And he knew that. And the author of “Losing Ground” (1984), the famous indictment of the welfare state, should have known better than to make a such a proposal.
Paying people not to work results in less work done. I trust myself here. I’m about to retire. If I didn’t have sources of money, I wouldn’t do it. I’d keep working. I can stop working now, in my 60s, because the system under which I’ve worked, and the decisions I’ve made under that system, give me an option of idleness. That I have this option after almost 40 years of work is one thing. But should the young have it?
And if we’re talking about a payment too small to live on, but big enough for a fling—what would be the social purpose of that? Imagine something like Alaska’s Permanent Fund Dividend, which this year pays $900 to qualifying residents. Suppose every adult American had it, adding $200 billion to the deficit every year. Would that be a wise expenditure?
It might, as you say, provide everyone an income “without the stigma attached to welfare.” But the stigma is good. It is a sign of cultural health. We shouldn’t want to end it.
November 1, 2013 at 11:38 AM
A war is being waged in SeaTac over the minimum wage. Voters will decide Tuesday whether to raise the minimum wage to $15 an hour for some airport and hospitality workers with Proposition 1. Organizers then plan to bring the campaign to Seattle, where both mayoral candidates have already expressed support.
Supporters say it would help low-income people and families achieve a better life. That’s a bit simplistic. Poor people are not a monolithic group. I argued in a Wednesday blog post that it would devastate immigrant-owned businesses. (Our editorial board has also recommended a no vote in an editorial.)
James Shin is one of those immigrants. Shin, 64, owns the Quality Inn SeaTac. In 2011, he used his life savings to buy the 104-room hotel, and he would be required to pay his workers $15 an hour if Proposition 1 passes. It would, in fact, be a crippling financial blow to Shin.
He’s not the chief executive of a hotel chain. He owns one hotel. And he used to be poor.
Shin, a U.S. citizen, immigrated here from South Korea in 1975. He had a bachelor’s degree from a Korean university, but he spoke little English. His first job in the U.S.? Dishwasher. He made $2.25 an hour. In his next job he was a janitor. “When I moved to the U.S. I worked hard. Some people didn’t want to work weekends. I worked on weekends for overtime,” he said. (more…)
October 30, 2013 at 12:01 PM
Raising the minimum wage to this level would be devastating to immigrant-owned small businesses.
On Nov. 5, SeaTac will consider whether to raise the minimum wage to $15 an hour for some airport and hospitality workers with Proposition 1. Efforts are under way to raise the same issue in Seattle. Mayor Mike McGinn, who is running for re-election, has already made it an issue in a zoning permit spat with Whole Foods in Seattle. In fact, he would like to raise it even higher in Seattle. His challenger, state Sen. Ed Murray, has also indicated support for the $15 level. (Read both sides of the debate in Tuesday’s Pro/Con on Prop. 1. Our editorial board recommends a no vote on Proposition 1 in an editorial.)
And while the current ballot issue only affects SeaTac, the next stop for the minimum-wage campaign is Seattle.
Supporters of the $15 campaign say it would help low-income people and families working in these jobs. That presumes poor people are a monolithic group, all of whom want to work those jobs for the rest of their lives. (more…)
October 22, 2013 at 7:16 AM
The picture on the left illustrates best the lure of the Issaquah Highlands, a master-planned community featured in the Seattle Times Sunday. Dwellers want the retail amenities found in urban centers like Seattle but they also want to be close by trails for their mountain bikes.
The Times article called it one of King County’s largest urban villages. And likely its last. The story notes: “With large tracts of close-in land a thing of the past, and with local governments attempting to direct growth into existing city centers, there won’t be any replicas of the Issaquah Highlands in King County.”
Home sales in master-planned communities plummeted along with homes in general housing stocks. This New York Times article in 2011 found that mortgage crisis hit hard those communities far outside city centers, places demographers and sociologists refer to as exurbs. But many master-planned communities held steady because they tended to offer more to the few who were buying, including a broad range of housing types – including smaller, affordable homes. As this Builder magazine piece noted, planned communities were more likely to include ”lifestyle anchors that buyers consider vital, such as good schools, parks, walking trails, community pools, town centers, playgrounds, sports, and other organized activities.”
Washington state’s population in 2030 is projected to be 8.3 million, a 29 percent increase in three decades, according to the state Department of Transportation. Three counties, King, Pierce and Snohomish will have the largest population increases and the largest total number of residents. Many of these residents will be families looking to grow and stretch out. For various reasons, including cost, Seattle will not be their choice. Communities like the Highlands will be waiting.
October 8, 2013 at 9:06 AM
Thoughtful responses have piled up in my email inbox since my column about Proposition 1 which, if approved by City of SeaTac voters, would raise the minimum wage to $15 an hour for about 6,300 workers at Sea-Tac airport and nearby hotels, car-rental agencies and parking lots.
I disagree with the Nov. 5 ballot measure. There’s not much point in raising the minimum wage for thousands when the issues are wage depression for millions of workers and a yawning gap between the skills workers possess and the ones they need to have a shot at a good paying job. Going city by city – SeaTac today, Puyallup tomorrow - will result in a nationwide shift in the minimum wage by, oh, 2070.
Dean Shoemaker from Kent said: “Of course, not many have the talent and determination of a Subelbia. All I would ask is that the minimum wage stay up with inflation. Choose any decade in the last half century, any you want and track inflation and the minimum wage down to the present. Minimum wage has fallen behind which suggests that working folks have suffered a decline in their standard of living.” (more…)
October 4, 2013 at 6:15 AM
My latest column moves beyond debate about the City of SeaTac’s Proposition 1 to the low-wage jobs issue that inspired it.
It is not clear whether voters will approve the Nov. 5 ballot proposal to raise minimum wage at Sea-Tac International Airport and nearby businesses to $15 an hour. The Washington Research Council opposes the measure out of concern for Washington employers who already contend with the nation’s highest workers’ comp benefits and fifth-highest unemployment insurance benefits. An economic impact analysis by the Economic Opportunity Institute says higher wages would boost the economy because people who earn more will spend more. Still, my colleague Thanh Tan wondered in a recent blog post why fast food strikes have not inspired more people to demand an increase in the minimum wage. And this piece in The Atlantic punctures inflated hopes by predicting little change on a national scale in the minimum wage.
Time to look beyond scattered city-by-city efforts and to the larger issue of education, chiefly its power to raise wages. Federal and state minimum wage laws create a solid floor for low-skilled workers. Union representation also helps. But there is near-universal agreement about an education premium, the idea that the best way for low-wage workers to earn more money is to get more education. The more value that can be created in one’s skill sets, the more someone might be willing to pay you.
The two women I profiled in my column, Roxan Seibel and LeeAnn Subelbia, would agree with me. Both said college is the route to better opportunity and away from the low-wage retail jobs both started out in, but only Subelbia was fortunate enough to earn a college degree. No surprise, she now owns two businesses employing a combined 50 people. This piece in The American Prospect wonders if education is the cure for poverty. I think it is part of the cure. Poverty is a debilitating condition that requires a number of strategies to overcome.
But as I point out in my column, efforts to raise the minimum wage are having mixed success. Stronger results lie in helping more students afford and attend college. What do you think?
September 13, 2013 at 7:05 AM
Labor’s declining share of U.S. income is cited in political discussion as if its meaning were obvious: that specific policies, such as the “neoliberalism” of the Reagan administration of 30 years ago, or favoritism toward corporate interests, had tilted the balance in favor of capital, and that this is part of the growing inequality of American life.
First off, the share of national income to “labor” includes the work of all people in paid work, including corporate CEOs. It includes not only their salaries but their benefits, including stock options. For the statisticians, everyone who works is doing “labor.” The inequality within labor is a different question.
The declining share to labor is about all wages and salaries, high and low, as a share of all income. Most national income still goes to labor, but the share has been drifting downward for several decades.
Taylor says the trend is not exclusive to the United States. It’s happening around the world. Writes Taylor: “Looking for a ‘cause’ based on some policy of Republicans or Democrats in the U.S. almost certainly misses the point.”
One possible explainer, Taylor says, is globalization, which he says has reduced the bargaining power of labor. (I’m not so sure of this. Globalization has reduced the bargaining power of less-skilled labor in wealthier countries. I think it has increased the bargaining power of labor in poorer countries. It has certainly been good for workers in China.)
As labor’s share (still the largest) contracts in America, other, smaller components of national income have risen: more company money spent on “short-lived capital” such as computers and software; increasing dividends to stockholders and rising profit levels generally. Some of that (the dividends?) may be accounted for by the increasing percentage of retired Americans living on pensions and investments.
(Hat tip: Tyler Cowen at Marginal Revolution.)
September 12, 2013 at 11:36 AM
My column in Thursday’s Seattle Times editorial page connects a growth of co-working spaces in Seattle with the millennial generation’s entrepreneurial spirit. Work force habits are evolving. When creative minds gather, innovation thrives.
Are businesses paying attention? They should if they want to stay competitive and keep workers from venturing out on their own. Today’s employees place more value on flexibility, interaction and connectivity. Providing some privacy is still important, too.
I highlighted two co-working spaces in the column: Makers in Belltown and Impact Hub Seattle in Pioneer Square. The Seattle Collaborative Space Alliance maintains a list of more than 20 other shared offices throughout the region. Each space is different and caters to a work force that is mobile and growing by the day.
- According to a 2010 Intuit study, 40 percent of Americans — or 60 million people — will be independent contractors or freelancers by 2020. This “contingency” work force will alter labor costs and change talent pools.
- The Freelancers Union reports one-third of the workforce, or 42 million, is already self-employed.
- The Bureau of Labor and Statistics reports the number of temporary or contract workers nationwide increased 29 percent between 2009 and 2012.
- MBO Partners released its third annual study this week estimating that by 2020, roughly half of American workers will spend time at some point in their careers working independently.
Full-time jobs with full-time benefits may become more scarce. As more people venture out on their own, they will form support networks. Co-working spaces provide a low-cost option for start-ups and freelancers who may not always want to work alone at home in their pajamas.
My parents’ generation was all about longevity and settling in jobs for the long haul. That mindset is shifting quickly among the millennial generation.
For a look inside Makers, check out the slideshow below from my Instagram feed:
And here’s an interesting infographic by MBO Partners, a resource for independent workers:
September 9, 2013 at 7:39 AM
What is today’s minimum wage worth compared to wages 50 years ago?
Should the lowest-paid workers in America share more of corporate America’s profits? Seattle has become the epicenter of the national minimum-wage debate.
SeaTac voters will decide in the general election whether to raise the minimum wage for some workers in and around the airport. Seattle Mayor Mike McGinn recently turned a West Seattle Whole Foods zoning permit into a referendum on how much it pays its workers.
Unions are already pressuring the city to advance labor interests in a proposed hotel development that would replace the Greyhound bus terminal in downtown Seattle.
The argument championed by many is that the minimum wage has not kept up with inflation. U.S. Rep. Denny Heck, D-Wash., said in a recent editorial board meeting that when Martin Luther King Jr. made his “I Have a Dream” speech 50 years ago, the minimum wage was $2 per hour, and that in today’s dollars that would be worth $15.
The same argument has been made by many advocates, and even in a recent editorial board meeting discussing the issue, different numbers were thrown back and forth.
So here are the facts: The federal minimum wage was $1.25 per hour in 1963, according to U.S. Department of Labor records. If we plug that number into the department’s inflation calculator, that $1.25 would be worth $9.54 in 2013 dollars.
Not $15. Today’s equivalent is $9.54 per hour. That number is higher than the current federal minimum wage of $7.25 per hour. But it’s not that far from Washington state’s minimum wage: $9.19 per hour.
This is a worthy debate. It’s obscene how much many chief executives make compared to the median worker in the same company. It’s fair game to ask whether $1.25 was even a livable wage back in 1963. But the inflation argument does not hold water. Let’s stick with verified facts. Otherwise I could go debate climate change with the deniers.
Check out out our recent opinion essays about the minimum-wage debate:
A guest column by David Rolf, president of SEIU Healthcare 775NW, and venture capitalist Nick Hanauer, “Seattle’s on the vanguard of movement to raise minimum wage.”
A blog post by editorial writer Thanh Tan, “Raising minimum wage to an arbitrary $15 is not practical.”
A blog post by our opinion intern Osa Hale, “Why college grads also want the minimum wage to rise.”
A guest column by Interim CDA executive director Hyeok Kim, “Arguing over the wrong thing in Mike McGinn, Whole Foods debate.”
A guest column by fast-food worker Fernando Cruz, “Show respect for fast-food workers with sufficient pay.”