Economic Justice & Democracy
While the United States remains the wealthiest and most powerful nation on earth, the last four decades of American history have been marked by decreasing and more precarious incomes and wealth along with increasingly powerful multinational corporations. We aim to change not just the current conditions for workers in this platform that reflect the realities of income inequality but the disparities in wealth and economic power, which follow historical racial divisions, as well as control of the financial system that trigger the instant conditions. These larger disparities allow powerful interests to rewrite laws and decimate communities and workers in the service of an economy that no longer works for the 99% and is faltering even in its self-proclaimed goal of increasing growth. History has repeatedly shown that such economic disparities are unstable. This instability resolves itself in three (not mutually exclusive) ways: economic depression, internal revolution, or global war.
There are four critical elements of our strategy for correcting these imminent dangers: providing income support to workers and communities; creating the conditions for building workers’ wealth and eliminating unnecessary private debt; democratizing the economy through measures such as public banking as well as social ownership of enterprises and housing so it is more productive and fair for the 99%; and transforming banking systems to avoid another financial crisis and eliminate the control of economic resources by the 1%.
These changes represent not just economic reforms but a transformation of our way of life into a more democratic form. The program will eliminate debt-based austerity and privatization as well as the historic economic debt caused by white supremacy through reparations, specifically in the form of targeted income supplements and development programs. It will also restrain corporate control in favor of improved benefits and democratic control for workers and communities and allow us to shift to a racially just and environmentally sustainable economy that works for everyone.
Income Support: Building Power over Day-to-Day Workplace and Social Conditions
U.S. incomes for all but the top tier of earners have stagnated over the past four decades, a trend which intensified during and after the financial crisis. Millions have been discouraged from even looking for work and a growing number have precarious jobs and sources of income, with some subsisting on less than $2 per day. According to a Federal Reserve study, 47% of households classified as middle class cannot afford an unexpected expense of $400 without either selling something they own or borrowing money. There are simple answers to this most immediate economic crisis, which threatens the health and wellbeing of millions of the most vulnerable. The U.N. International Covenant on Economic, Social, and Cultural Rights mandates guarantees of economic freedoms such as housing, health, food, and adequate income. Although not ratified by the United States, we can build on existing income supports, minimum wage laws, and guarantees of basic necessities for health. These changes will not only ensure the basic dignity and rights of countless individuals but will result in a sustainable, growing consumer economy that works for everyone instead of one based on speculation and consumer and student debt.
Higher Wages: The first, obvious, step in this process is to increase the Federal Minimum Wage to $15 per hour under the U.S. Federal Fair Labor Standards Act of 1938 and index it to increases in the cost of living (i.e. Consumer Price Index or inflation). We recommend that to make these changes fully effective, it is necessary to eliminate flexible scheduling and incentives for part-time employment that make earning a living and planning family life difficult or impossible. The evidence shows that substantial increases benefit workers’ income security and well-being as well as the overall economy.
Income Support: To benefit those individuals who are not in the job market, we recommend two steps to ensure their access to social goods guaranteed under the U.N. Convention on Economic and Social Rights. First, welfare and unemployment programs, including Temporary Aid to Needy Families, the Earned Income Tax Credit, and aid and insurance for small farmers, should be expanded and available without unnecessary means testing to ensure more efficient provision of benefits, minimize coercive aspects of the system, and ensure universal support for programs available to all. These insurance programs would include extensive funding for workplace training as workers are displaced. As is the case in Italy, workers also should be able to transfer their unemployment insurance into new social and community business such as workers’ cooperatives. In this context, the IRS should offer a simple program for paying taxes that minimizes the need for accountants and allows low-income Americans to easily obtain benefits available through obscure tax provisions.
In the face of automation and weak macroeconomic growth, we also need to ensure a guaranteed basic income or guaranteed jobs program as a supplement to other welfare and aid programs. Any guaranteed jobs program would place employees in well-paid, socially beneficial programs such as implementing infrastructure for a green transition, providing assistance with childcare and nursing home services, and serving as teachers’ aides. These programs should be integrated alongside free or low-cost public provision of necessities such as water, heat, healthcare (as described in the Medicare for All Plank), two weeks of paid vacation and one week of sick leave, 12 weeks of paid family and medical leave, as well as high-quality child care and kindergarten. Specifically, with respect to the homeless, we call for states and localities to adopt the Florida Draft Homeless Bill of Rights; governments should ensure that rights of the homeless to shelter through the housing-first plan, eliminate criminalization of homelessness, and provide levels of mental health care and support, as well as institute safe zones and ensure majority representation of the homeless on homeless coalition boards.
Work Authorization for Undocumented Immigrants & Current and Former Prisoners: Finally, we call for an end to distortions in the labor market that benefit corporations at the expense of all workers. We specifically advocate, first, for full work authorization for undocumented immigrants and deferred action on removal proceedings and incarceration of undocumented immigrants to bring people out of the shadows and end the coercive two-tier labor system that results in lower wages for all workers by eroding bargaining power. As part of these changes, it would be necessary to substantially end guest-worker and temporary immigration programs that allow businesses excessive power over the wages and employment tenure of workers in industries from farming to IT and Software Engineering. Similarly, as described in the Racial Justice Plank, we call for an end to mass incarceration and private prisons, restrictions on the employment of the formerly incarcerated, as well as prison work programs that pay little to prisoners while providing massive profits to business.
Building Wealth: Building Individual and Community Control over Property and Resources
A similarly dramatic increase in wealth for the top 1% during the same forty-year period has been extensively documented in the groundbreaking research of Economists Thomas Piketty and Emanuel Saez. These trends have escalated since the Great Recession: 58% of new wealth now goes to the top 1%. The wealth of Black and Hispanic Households, which has been significantly tied up in substandard private housing, has been decimated during this period. This increase in wealth threatens to set up an era of patrimonial capitalism in which the 1% controls prosperity for its own benefit and passes that wealth down to heirs without interruption. This unequal dynamic threatens measures of social wellbeing as well as the consumer spending and investment that guarantee economic growth and prosperity. The dire situation demands immediate measures such as a massive tax on inherited wealth, pension protection, and provisions of extensive public and social housing in order to preserve economic security and freedom for workers and families within the constraints of the existing market economic system.
Student, Consumer, & Mortgage Debt Relief & Forgiveness: In order to end a situation in which growing numbers of citizens are chained to permanent, unsupportable debt, we advocate for student, consumer, and mortgage debt relief. First, there should be free public university education and programs to forgive student loans, restrict the interest rates on loans, and cap the amount that students need to pay as a percentage of income and the period of time during which the loans are required. A critical element of economic success is a well-educated and dynamic workforce and expensive college tuition prevents many from obtaining necessary training. It is also unforgivable that the financial crisis has not resulted in full mortgage relief. The Troubled Asset Relief Program (TARP) of 2008 has failed to achieve significant and effective debt relief and additional legislative and regulatory measures are necessary. For instance, there are homes in which debt obligations are greater than the value of the property and which necessitate programs allowing homeowners to extend their payment terms on distressed properties to avoid foreclosure. A moratorium should be instituted on foreclosures under government control for those at 150% or less than the poverty rate. In order to make individual action on debts possible, we call for Congress to institute bankruptcy law reform that negates the pro-creditor Bankruptcy Reform Act of 2006. This will facilitate student, consumer, and mortgage debt relief by eliminating procedural restrictions and barriers to application. In order to prevent the growth of consumer debt, we commend the efforts of the U.S. Consumer Financial Protection Bureau to eliminate through regulation high-fee credit card arrangements and retail banking, payday lenders, and check-cashing fees (See Banking & Finance Section below).
Pension Protection: Private wealth is stored in pension and social security accounts over which individuals rarely have control. We call for the expansion of Social Security benefits and preservation of the current retirement age of 65 to ensure a secure standard of living for all people and preserve the current benefit structure. We call for eliminating the cap on taxing income above $250,000 in order to fund Social Security as an institution. We also call for the extension of government programs to protect voluntary private retirement accounts that allow individuals to supplement their SSA savings. With respect to existing investment and retirement accounts, there are additional steps necessary to protect accrued retirement accounts. First, the Multiemployer Pension Reform Act of 2014 allowing for reductions in Defined Benefit Plan benefits if funds would be insolvent within 15 years should be rolled back and the Pension Benefit Guarantee Corporation should be funded adequately to allow it to provide heightened insurance to funds that are temporarily insolvent as well as backstopping benefits following liquidation. Second, with respect to 401(k) plans and other investment and retirement accounts, advisers should owe a fiduciary duty to their clients to prevent high-risk investment and the evisceration of benefits through high fees. Employees should have additional control over workplace decisions and investment allocation through their Employee Stock Ownership Plans (ESOPs). Public pension funding should be made more regular, albeit without counterproductive pre-funding requirements that have hurt institutions such as the USPS, with states eliminating advice from conflicted firms, high-fee advisers, and hedge funds. We call on state and federal pension funds to divest from unsustainable energy, private prisons, and other socially costly investments.
Right to the City: During the recovery from the financial crisis, ironically, there has been growing homelessness, foreclosure, and insecure renters. In order to provide shelter for all and eliminate the worst aspects of the private housing market, there are measures involving the expansion of public and social housing as well as providing rent control and stabilization programs. First, we call for the socialization of market housing through direct grants and public banking by funding land trust agreements and community-owned housing, turning defaulted mortgage properties into public housing and over to community groups and first-time homebuyers (ending their status as blighted properties in under three to six months), and expanding public housing programs (including traditional public housing and Section 8 voucher programs to be used on social housing and not distorted private markets) to prevent unaffordable, speculative housing booms and ensure the homeless and other citizens access to the already existing housing in which they might domicile. Second, we also call for instituting and expanding rent control and stabilization laws to prevent individuals from paying more than 30% of their income in rent (including fees and utilities) per month. Third, we call for the use of inclusionary zoning that requires developers to ensure that 25% of housing is devoted to those at 150% of the poverty rate or lower. Fourth, we call for expanded enforcement of racially-based redlining practices that affect mortgages and discrimination in housing in the private rental marketplace. Finally, as described in the Democratizing the Economy Section, below, we call for citizens councils and participatory budgeting to run public and social housing.
Democratizing the Economy and Making it More Productive and Fair for the 99%
Reformist measures and attempts to reinstate policies that guaranteed prosperity during the Great Depression, however, are doomed to fail if we do not restrict the power of businesses and the exploitative practices that cause business to take actions and risks that are increasingly endangering the natural world and the well-being of workers and communities. We propose to expand workers’ rights to true freedom over economic and social decision-making through workplace and social service cooperatives and to limit measures of corporate control such as pharmaceutical monopolies and corporate trade monopolies. In parallel, we recommend the institution of citizens’ accountability boards with control over institutions such as the police, prosecution, social services, and participatory municipal budgeting. For instance, public housing residents should be permitted to run advisory or decisional councils to facilitate engagement and control over the properties, their allocation, and their governance. Alongside these affirmative economic rights, we aim to expand access to the courts to vindicate private actions against corporations. These changes will not only prevent renewed corporate dominance over political and economic affairs but ensure economic and social rights otherwise under the market control.
Fair Personal & Corporate Income & Wealth Taxation: In order to fund critical social and infrastructure programs and limit speculative investment and market volatility, it is necessary to eliminate unfair advantages such as separate tax rates for investment (i.e. capital gains) and ordinary income as well as the carried interest tax rate and tax loopholes such as those that incentivize offshore jobs, executive compensation tied to risk-taking, unsustainable extractive industries, and short-term corporate decisions. We call to reinstate higher personal and corporate income tax rates, under an increased number of brackets, in line with historic U.S. rates during the post-WWII economic boom while generally eliminating tax loopholes and deductions. As economists Thomas Piketty and Emmanuel Saez recommend, there is a need to institute wealth taxes such as the estate tax, taxes on foundations, and a one-time massive tax on wealth to avoid further concentration of power and oligarchic control. We also call for disclosure requirements that will restrain shadowy corporate and personal activities and land taxes that will disincentivize high-end real estate development and the consolidation of farmland and agricultural enterprises. A small tax on financial transactions such as stock and bond trading (FTT/Robin Hood Tax) would also limit financial speculation and fund social benefits; the tax could be limited to transactions conducted by those making over $75,000 per year and incorporates different, small-fractional rates on derivative transactions, bonds, and securities.
End Corporate Trade Monopolies: To ensure democratic decision making and eliminate corporate power over employment and social goals such as healthcare, we call for an end to existing trade monopolies such as NAFTA and World Trade Organization rules as well as prospective agreements such as the Trans-Pacific Partnership (TPP), Trade in Services Agreement (TISA), and the Transatlantic Trade and Investment Partnership (TTIP). We must eliminate corporate trade monopoly deals to prevent corporate decision-making through investor-state dispute resolution systems (ISDS) and corporate-dominated trade rules that prevent environmental, financial, and workplace regulation and nationalization of industries as critical as health care and postal delivery. As a means for extending access to basic goods, we call on Congress to eliminate excessive patent monopolies for pharmaceuticals and other products that contravene basic economic and social rights such as access to healthcare, water, and shelter. We must foster fair trade by supporting worker-controlled enterprises and cooperative projects throughout the globe instead of monopoly trade rules that benefit multi-national corporations engaged in exploitive and extractive industries, including mining and agribusiness, and the global 1%.
Model Contractor Employer and Public Employment Programs: The U.S. Federal and State Governments can prevent the outsourcing of core jobs such as data security to limit inefficiency and security risks and ensure that workers have access to decent pay and benefits as well as civil service protections. We call for the expansion of protections against retaliation on the basis of protected characteristics such as sexual orientation, and gender identity and facilitating protected concerted action and union organizing through enhanced enforcement and private rights of action, heightened penalties, and by simplifying administrative procedures and means of demonstrating interest in union representation. Where the government interacts with businesses to provide more complex goods and services, it should employ its purchasing power to ensure that contractors meet requirements to serve as model employers in addition to focus on the cost and fairness of its purchasing decisions. We call on final and robust implementation of Department of Labor Regulation to implement of the Fair Pay and Safe Workspaces Executive Order, E.O. No. 13673 (July 31, 2014) and ensure enforcement and progress in areas where more subtle discriminatory practices prevail. Model employers are those that meet a core set of labor and employment principles such as compliance with minimum wage and overtime law; equal pay laws on the basis of gender; non-discrimination on the basis of protected characteristics such as race, gender, and disability status; allowing employees to engage in collective action such as workplace protests and organizing a union without intimidation or retaliation; permitting employees to engage in whistleblowing with regard to violations of health and safety as well as corporate and equities fraud or financial mismanagement; limiting mandatory arbitration and prohibition of collective judicial action; and acknowledging obligations to treat workers as employees rather than independent contractors and to ensure obligations to employees of sub-contractors regardless of the particular legal relationship between business entities. Model employers are also those that incorporate under emerging state legal standards that permit them to consider the interests of stakeholders such as workers, communities, and the environment, rather than merely those of shareholders and the corporation itself.
U.S. Antitrust & Merger Law: As U.S. antitrust and merger law has become increasingly technical, businesses have increased in size resulting in the dominance of a few players, or oligopoly, in critical industries such as media and communications. These changes allow these companies to increase consumer prices, exert undue power over politics through their lobbying activity, disadvantage worker bargaining power, and impoverish regional economies as operations are often streamlined and centralized in core geographical areas. Therefore, we argue that more aggressive enforcement under existing antitrust and merger law is necessary as well as attention to the effect not only on consumer pricing but the range of stakeholders who are affected by consolidation.
Expand Public & Private Legal Enforcement: A critical element of a transition to a just economy is ensuring that corporations’ workplace, environmental, and financial violations will not go unpunished by public or private actors. In this light, it is necessary to fully fund these agencies and move from a mentality that allows settlement deals that incorporate no criminal enforcement against executive and which allow for the settlement to be written off in part as losses pursuant to taxes. In addition, we call for Congressional and Executive Agency action to eliminate Supreme Court decisions that eliminate private rights of action to file lawsuits, institute additional procedural requirements for plaintiffs’ and class action lawsuits, and mandate forced individual arbitration of consumer, workplace, and other private claims.
Worker and Social Ownership: We call for state and federal legislators to facilitate worker/social ownership and power through workers’ decisional committees, worker cooperatives, and community and socialized enterprises—including local energy cooperatives, utilities, social services, “sharing” platforms for services such as taxis (“platform cooperativism”), housing, and healthcare provision—as a means of ending business concentration and anti-social practices. As a spur to worker control, we call for new methods of collective financing and public – bank support as well as a first right for employees to take control of a business whenever a transfer, sale, or bankruptcy occurs. As Economists Gar Alperovitz and Richard Wolff have argued, through organizations Democracy at Work, and Democracy Collaborative, it is essential to provide funding and/or financing for the growth of networks of cooperatives as in Cleveland, Ohio; Jackson, Mississippi; Emilia-Romana, Italy, Quebec, Canada; and the Basque Region of Spain that are decommodified or removed from traditional market networks. These changes will ensure a stable economy and democratic worker and community control over everyday affairs and decisions such as investment allocation, negative effects such as pollution, and business relocation. It will also permit stakeholders to be involved in the delivery of social services such as childcare and limit inefficiencies and alienation possible in state delivery of critical economic rights.
Banking & Finance Transformation: Minimizing the Risks of Finance & Decreasing Exploitative Activity
The power of financial markets and monetary regulators to result in rent-seeking activities that benefit property owners but not workers or society as a whole is a long-standing theme of social movements. But the concentration of wealth and resources in financialized banking and main street companies during the past half-century illustrates a situation that is increasingly untenable with insured deposits and an implicit bailout guarantee fostering dangerous activity, unrestrained credit creation, and business concentration. We advocate instead for measure to institute accessible postal banking and eliminate payday lenders and other usurious practices and limit the size of institutions and risks of the banking sector in a manner that incremental technical requirements have been unable to achieve. These decisions would serve as a bridge to a fully socialized banking sector that invests in worker cooperatives, social housing, and the dramatic research and development necessary to innovate, confront threats to human health, and build the transition to a sustainable ecological future and a green, full-employment economy.
Postal & Local Banking: We call to transform existing public institutions such as the post office into low-risk public depository utilities to provide low-fee, insured deposits as well as lending and prevent predatory loans, check-cashing business, and other practices that ensure persistent private debt to the detriment of citizens and communities. Other institutions such as credit unions can perform a similar role. We also call to investigate the incorporation of new banking instrumentalities such as credit and debit cards, blockchain and robo-advisors (automated financial advisers) into existing institutions to expand access to innovative services at rates below those of comparable institutions.
Small, Local, & Industry Specific Banking: In order to end inter-connected banking risk and power that can not be tamed through technical regulation, we call for new legislation to restore the Glass-Steagall Act of 1933 (including the proposed Safe, Accountable, Fair, and Efficient (SAFE) Banking Act of 2012 that imposes size limits on banks) and/or the implementation of remedies under Title I of the Dodd-Frank Act of 2011 (§§121 & 165) that require that banks maintain effective break-up plans and allow the Federal Stability Oversight Council to act to limit institutions’ systemic risks. Specifically, we call for the end of too-big-to-fail institutions that engage in universal banking through (a) merged investment, insurance, merchant, savings, and/or commercial banking operations and (b) operations across state and national lines. These strict limits should also apply to non-traditional “shadow banking” institutions engaged in “financial intermediation,” including lending and trading, but which are not highly regulated. These changes would significantly eliminate banking industry risk and facilitate local lending to individuals and small business and drive local institutions’ investment and a true “recovery from below”
Banking as Public Utility: These changes would be part of a project for moving from highly leveraged and speculation-heavy institutions toward the type of banking that has benefited citizens of North Dakota for nearly the last century. This change would implement highly regulated banks to prevent financial institutions’ engagement in risky activities and trading highly-leveraged assets such as the residential mortgage-backed securities that led to the financial crisis. We commend the Federal Reserve Bank’s actions to comply with the international requirements under the Basel III Accord to force banks to carry on their balance sheets adequate and sufficient quality capital to deal with leverage, risk, and unpredictable losses but believe these are merely transitional steps toward safer banking. We also commend the U.S. Commodities Trading Futures Commission for issuing regulations to ensure derivatives are no longer traded on secret or opaque trading platforms but urge the need to regulate dark pools, or secret markets, and institute stronger position limits on traditional derivatives such as wheat. Better-regulated institutions help transition from a speculation-driven and crisis-prone economy based on income derived from rents on property such as real estate, financial assets, and critical commodities such as wheat and oil to one based on productive capacities and developing products and services that meet real human needs.
Fully public banking institutions and those operating as utilities, however, would also be poised to fund the transition to full employment and a more democratic and environmentally sustainable economy. These investments would include worker and community-owned enterprises, public housing and utilities, massive infrastructure and sustainable energy development (“A Green New Deal”), development in deprived minority and rural communities, and support for green and emerging businesses. They would greatly expand on existing programs, inter alia, under the Community Reinvestment Act of 1977 and the Community Development Financial Institutions Fund (Riegle Community Development and Regulatory Improvement Act of 1994.) We call on transformations in finance law to permit a historic transition to allowing workers and consumers to join together to crowd-fund social and community programs; these changes would extend beyond those in the JOBS (Jumpstart Our Business Startups) Act of 2012 that allow venture capitalists and the wealthy to fund technology applications in the interests of elite consumers and venture capitalists.
Enhanced Federal Reserve System: The Federal Reserve System can ensure superior conformity with its dual mandate to ensure full employment and prevent systemic financial risk. It should employ, under appropriate low-growth conditions, low interest rates that allow the economy to expand and workers to exert bargaining power over low-paid and unfavorable jobs. The FRS should intensify its scrutiny of banks through its supervision authority and ensure independence of bank examiners who evaluate risks. It can limit the use of financial tools such as quantitative easing, or the issuance of government bonds and purchase of alternative assets such as corporate debt, that result in bubbles in the economy. Congress should alter banking law to permit the FRS to modify specific interest rates and use its regulatory authority in circumstances where industries such as the mortgage industry exhibit characteristics of a speculative boom while no such crisis is apparent in other facets of the economy. At all points, the FRS needs to acknowledge that financial regulation is not a technical exercise in managing permissible risks but a situation that requires eliminating certain activities, institutional arrangements, and risky instruments.
In addition, Congress should alter Section 13(3) of the Federal Reserve Act and creation of an institution such as the Reconstruction Finance Corporation to allow for the purchase of assets as necessary and issuance or purchase of public and private debt (i.e. “open market” operations and helicopter money) so that the government can direct industries’ investment decisions through its ownership interest and drive full employment and necessary growth.
Congress and the Executive Branch, finally, should alter the law and transform appointment practices to ensure that the Federal Reserve Bank is a fully public entity and the Boards of the Regional Federal Reserve Banks include no representatives of regulated banks but instead do include representatives of community and union groups.