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News & analysis from Proletarian Internationalist Notes—news, reviews and analysis from a global perspective
Wages versus retirement income: U.S. “left-wing” priorities lead to nationalism and war
February 23, 2017
Trump’s first pick for U.S. Labor Secretary was a fast-food executive who opposed increasing the minimum wage to $15 an hour and had agreed with some labor unions in supporting an assimilationist approach to undocumented migrants. Trump came under criticism for that choice from both “the left” and “the right” in the United States. Puzder welcomed migrants as fast-food workers as the “right” noted disapprovingly, but the “left” cared more about the minimum wage. In fact, the “left” had always had a problem with so-called cheap labor. People who held their tongue, or simply didn’t care, when Trump was choosing war hawks to be advisers and Cabinet members expressed outrage when it came to Trump’s Labor pick. Various people including Democrats and liberals accused Trump of having taken supporters for a ride. They accused Trump of deceiving even white workers. There is more inequality at levels above the rock bottom (explaining how politicians can oppose large minimum wage increases but still be viewed as pro-worker by U.S. white workers), but the percentages of whites and non-whites who make the U.S. federal minimum wage are similar, and minimum wage increases exert an upward pressure particularly at the lower end of the wage distribution.
It seemed Trump was going back on statements appearing to depart from supposed Republican orthodoxy. On the campaign trail, Trump had succumbed to U.S. so-called working class pressure and eventually supported the idea of raising the minimum wage by some amount, though to a lesser extent than Clinton and Sanders did. (Trump had been emphasizing and still emphasizes “jobs,” not raising the minimum wage. That’s not just because of white workers already making more than US$15/hour. Half of U.S. fast-food workers make about 125% or more of the U.S. federal minimum wage but may think they have shit jobs.) And, of course, Trump had always taken a harsh approach to migrants rhetorically. Regardless of whether all U.S. workers particularly cared about raising the U.S. federal minimum wage or not, by choosing CEO Andrew Puzder it seemed Trump was moving back toward the business wing of the Republican party, which opposed minimum wage increases and wanted labor of varying skill level at a lower cost. The Republican Party business wing favors having temporary workers and has sometimes supported a “path to legalization” – while emphasizing “border security” partly because it doesn’t want to upset AmeriKKKan workers too much. (DemoKKKrats also support keeping out the undocumented and support apprehending and removing undocumented migrants found near the border. Formal deportations and criminalization of such migrants increased under Barack Obama.)
Some labor unions view Trump’s new pick for Labor Secretary, Alexander Acosta, more favorably.(1) Acosta’s statements about the minimum wage haven’t been as clear as Puzder’s. Acosta is opposed by others, who emphasize a so-called immigration problem and view Acosta as similar to Puzder in being less supportive of expanding deportations and immigration restrictions than they would like.(2) Acosta would have to report to Trump, though, and wouldn’t have the final say on immigration policy. The United States may end up having a Labor Secretary who supports U.S. worker living standard gains in the context of harsher immigration policy. Democrats can congratulate themselves for bringing about such an ugly unity and helping Americans become accustomed to it.
Unsurprisingly, there are a large number of Americans who want both higher wages and fewer migrants. That’s long been the case though Democrats, who have put so much emphasis on wage issues, are apt to play stupid about this. Some Democrats, for whom increasing the minimum wage was just a higher priority than deporting migrants or stopping them near the border, went along with their party in putting on a migrant-friendly face. They wanted votes from people some of whom (Chican@ nation people) should be pursuing their own path without U.S. patriotism.
Now that Trump is President, we are hearing more about former sturdy opponents supplicating Trump to support worker-friendly policies or commit to worker-friendly campaign-trail statements. It has come as a surprise to the oblivious that even many Trump supporters were and are in favor of minimum wage increases. Shortly before Andrew Puzder withdrew from consideration, CNNMoney published an article titled “Even Trump voters want the minimum wage raised.”(3) The fact that many white Southern service workers (with supposedly “nothing to lose” according to phony leftists, not just Trump) might have both voted for Trump and wanted more pay was supposed to be news to some people.
Predictably, Democratic House Minority Leader Nancy Pelosi called for “bigger paychecks” and seemed to urge Labor nominee Acosta to support increasing the federal minimum wage while expressing a mix of hope and skepticism.(4) Compare that with Pelosi’s ass-kissing statement on the James Mattis nomination, praising the Iran war hawk Defense Secretary as already being a positive influence on Trump on the torture question.
Wage interests of Americans, as opposed to investment interests
The United States is the largest First World country and the third-largest country in the world. Only China and India are larger. This is a remarkable fact given how high U.S. GDP per capita, productivity, wage averages, and minimum wages, already are in international comparison. There are those who defend raising the U.S. minimum wage in terms of increasing consumer demand and being good for business.(5) Historically, it is true that U.S. wages and profit have increased together. U.S. workers and capitalists jointly exploit the Third World. What’s good for U.$. workers and even some businesses, though, isn’t necessarily good for transnational investors and global economic growth. The provincial-minded and those who are aware and just don’t care, because they prioritize Amerikkkans, aren’t concerned to discuss that except to talk about how Amerikans are supposedly victims of elites, other countries, and “globalists.”
The interests of workers and poor countries are often contrasted with those of “Wall Street” – corporations, professionals and “elites” in U.S. financial markets open to both amerikan investors and most international investors. Accusations that Trump was picking “Wall Street elites” for Cabinet positions started back in 2015 with billionaire investor Carl Icahn. (The less-rich Steve Mnuchin, a hedge fund manager worth hundreds of millions of U.S. dollars, ended up getting the Treasury Secretary appointment.) In certain contexts – opposing bourgeois counterrevolution in socialist countries (which don’t exist today), opposing neo-colonial penetration, opposing symbols of the United States or use of U.S. financial markets, opposing U.S. imperialism when Wall Street was more representative of U.S. finance capital in particular, opposing capitalism to prevent war and environmental disaster without seeking more privilege for U.$. workers, and moving beyond neo-colonialism when there is no hegemonic country or global threat drawing the world’s focus – opposing Wall Street obviously makes sense. The United $nakes has no proletariat of its own, though. There are just different groups of exploiters among the citizens there, and there is generally no reason to constantly favor one group versus another. In that hegemonic and extremely large rich country – with no real socialist movement worth mentioning globally and a lot of money to spend on wars to make up for mistakes in economic, fiscal and trade policy – anti-Wall Street sentiment with an emphasis on economic victimization plays a reactionary role. It leads to populism, more-intense U.S. nationalism, opposing internationalism, and opposing international interests that aren’t simply the interests of a few people in the world or of people seeking to prop up capitalism. That is the case though most international investors might still be struggling to oppose U.S. hegemony.
Pandering to the economic interests of U.$. workers is generally bad, but there may be relatively fewer problems with getting amerikans to pay more attention to their interests connected to global investment, rather than biweekly pay stubs. If amerikans can be influenced to refrain from promoting or precipitating conflicts that hinder growth or bring down the mood on Wall Street (as in January-March 2003 with the invasion of Iraq approaching, 2000 with the al-Aqsa Intifada, and 2014 with the Gaza war and Obama’s September Iraq and Syria war announcements), that is a good thing. If amerikans can get out of the way of progress on Palestinian independence and sovereignty, and amerikans’ retirement account values end up being higher than they would have been, that’s a good thing.
As indicated by the Dow Jones Industrial Average, stock prices of certain large U.S.-based corporations have been on an upward trend. The Dow is commonly viewed as indicating the mood on Wall Street. It can be perceived as an indicator of how Wall Street-friendly a U.S. president is, as opposed to worker-friendly. There has been some recent relevant discussion of the difference between presidential approval/favorable ratings and the Dow. To some, there appeared to be a discrepancy between Trump’s low ratings and the Dow’s performance portrayed by Trump as indicating Trump administration success, after campaigning against Wall Street as other former presidential candidates did. Could Trump have higher ratings if Wall Street were more pessimistic, as Trump’s own anti-Wall Street rhetoric might have suggested despite Trump’s message about making the U.S. economy stronger? CNN “Inside Politics” host put things succinctly the other day.(6) In the context of Trump’s wanting “to focus on the Dow” and its striking gains, John King said U.S. workers won’t care about what their future retirement income might be if the check they’re going to get next week is too small. “Your 401k doesn’t mean a hoot if your week to week paycheck isn’t helping you out.”
Such thinking should in fact be discouraged among U.S. workers. Some will deride the rich CNN news anchor for even raising the topic of 401(k)s in the context of the white trash or manufacturing workers, but many have some plan or account they could put money in or are already putting money in. Others have various savings or assets, and even Social Security involves investment whether people know it or not. First World “socialists” have long been concerned about pensions, but they haven’t drawn so much attention to First World workers’ involvement in the capitalist aspect of that and how they can benefit from conditions favorable to investment returns. And they haven’t emphasized pensions over wages. Some would say workers shouldn’t be encouraged to identify with investment interests and dismiss the argument here as bourgeois ideology, but U.S. workers are already exploiters of workers in other countries, whether individual U.S. workers own stocks etc. or have retirement accounts now or not. Many U.S. workers who don’t know it (and may end up complaining or voting for politicians later in life whom they associate with senior citizen interests) can save and invest, and diversification involves investment in more countries, and more issues of integration, growth and stability to consider, than in the past. For U.S. workers to accept lower wages would ease international exploitation and could in some cases reflect farsighted thinking. Assuming U.S. workers who accept lower wages are just Republicans, with some racial and masculine pride issues, would be simplistic.
This idea of getting amerikans to think more about their retirement investments reflects the dismal nature of politics in the United $tates, but may be exactly what is needed in terms of influencing amerikans on economic issues. There is no reason for anyone to pander to U.S. workers on wages when retirement-related economic interests can be discussed.
Some “activist investors” – people like Carl Icahn – and others will do things that don’t help the world economy and even hurt it. And there are Russian financial capitalists who have conflicts with financial capitalists who have reconciled themselves with U.S. hegemony. There are other conflicts between non-amerikans and between financial capitalists, many of whom favor U.S. interests. Yet, bad relations in the Middle East, bad cross-Strait relations in China, bad relations on the Korean Peninsula, bad Eurasian relations – these things don’t or wouldn’t support global economic growth, and the United States makes things worse. U.S. hegemony is an obstacle to global progress of various kinds. It is true billionaires and financial capitalists and managers are obviously involved in neo-colonialism in general and U.S. exploitation of other countries. They have reasons to want Third World wages to remain low (and some reasons to want Third World wages to increase, to avert crisis involving related effects and differences in an economically and financially interconnected world). But because of U.S. hegemony it isn’t a simple matter to favor wage interests of amerikans over international investment interests. This writer is a rare socialist saying such a thing openly and blatantly supporting such a broad united front against U.S. hegemony, but it must be said.
U.S. media focus on the Dow. That is expected. The Dow represents U.S.-based corporations and so can diverge from other stock market indices in terms of trends. But what self-proclaimed “economic nationalists” are saying about Wall Street as representing “global” interests is true to a significant extent, because of the international listings on the NYSE, for example, and international investment in both foreign and U.S. companies.
U.S. and global growth and gains
This isn’t just about the Dow 30, U.S. corporations, or Wall Street. The Dow has been on a gaining streak, but various stock market indices have been trending upward since Trump’s inauguration or the beginning or first Monday of February.(7) That includes the FTSE 100 (London Stock Exchange), the DAX 30 (Frankfurt Stock Exchange), the Swiss Market Index (20 companies), the NIFTY 50 (an Indian index), the Shanghai Composite index (SSEC), the Hang Seng (Hong Kong Stock Exchange, 50), the Straits Times Index (Singapore Exchange, 30), the STOXX 600 (EU), the MSCI World (1600+, “developed markets”), various MSCI and FTSE “ex USA” indices, the MSCI EAFE Index (large- and mid-cap securities, developed markets excluding Canada and the U.S.), MSCI Emerging Markets, nearly identical (percentage changes) global indices such as the MSCI All Country World Index and the FTSE All World Index, and the Thomson Reuters Equity Africa, Equity Latin America and Emerging Markets Europe indices. Exceptions include the MICEX (Moscow Exchange) and the Tadawul All Share Index (Saudi Arabia). Some other indices haven’t had a clear, strong trend over recent weeks, but it is possible some have underestimated the extent of the global stock market rally.
That is not to say Trump administration decisions are going to be good for global economic growth and investment outlook. But stock markets in different countries are more related, and have more international investors, than maybe some realize. Focusing on Wall Street too much could involve false assumptions with serious consequences if demands of amerikan workers, including middle-class people, for short-term gains are prioritized.
Related questions include the relationship between “Wall Street” and U.S. economic growth, and the relationship between U.S. economic growth and global growth. U.S. GDP and the Dow are correlated, and many associate U.S. economic growth with global economic growth. However, the relationship between U.S. growth and global growth isn’t simple, and maybe the question has been considered too abstractly or too much in extreme or absolute terms. The last fifteen years have shown it is possible to have global economic growth with relatively less U.S. growth though both the U.S. and world economies have grown. This has already happened. It’s not some hypothetical point. Even with the recent slowdown in global economic growth, nobody in the First World should be complaining about relatively high global growth.
Those under the influence of U.S. hegemony are liable to assume relatively low U.S. growth is the cause of eventual decreased global growth, but for example Goldman Sachs has noted that restrictive U.S. immigration and trade policies could negatively impact global growth.(8) Goldman Sachs said net immigration will contribute to most U.S. labor force growth, which is relevant to amerikans’ retirement; instead of fixating on wages, amerikans could think more about letting more migrants in. As a matter of opposing U.S. protectionism, Goldman Sachs has also appeared to oppose labeling China a currency manipulator. Goldman Sachs fucked Libya (literally with prostitutes, and figuratively), and for multiple reasons there is no need to look at that firm’s own effect on global outlooks through rose-tinted glasses. Goldman played a big role in last decade’s financial crisis. Though it owns assets around the world, global growth isn’t Goldman’s objective; increasing its bottom line is. Since global investor Goldman is the most influential component of the Dow (justifiably or unjustifiably), viewing the Dow as somewhat of a proxy for global bourgeois interests can be both defended and criticized. However, on those points involving U.S. immigration and trade policy nobody should be disagreeing with Goldman Sachs. Opposing “elites” in that context is reactionary.
Another cause of low global economic growth could be lack of investment outside the First World. In recent years, “emerging markets,” like China and India, have both had higher GDP growth than the world as a whole and contributed to over half of global growth. Many have noted an apparent discrepancy between emerging markets’ share of world GDP (gross world product) and GWP growth, and emerging markets’ share of world equity market capitalization.(9) U.S. GDP alone doesn’t explain why U.S. market capitalization is so much higher than Chinese and Indian market capitalization as a percentage of world market capitalization. The U.S. share of world market capitalization is about double the U.S. share of gross world product. The Chinese and Indian shares of market capitalization are less than half their shares of GWP, and that is not to mention unequal exchange issues affecting prices and GDP. There is less of a difference between U.S. GWP share and U.S. world foreign direct investment inflow share, but there are still potential problems in terms of market capitalization and investment inflows versus population/workforce size for example, and China recently experienced a large and sustained net capital outflow. The media has been discussing the Chinese crackdown on capital outflows, which if unchecked could lead to crisis both in China and globally.
Idolatry of U.S. companies could explain some of the difference between the Dow’s recent performance – an unbroken gaining streak – and the performance of the NYSE International 100, for example. In that context, for amerikans to emphasize the Dow 30 over global and international indices could be an expression of a form of amerikan nationalism open to and favoring foreign investment in the United States (though it is likely some gushing about the Dow and supporting protectionism in the same breath aren’t as aware, as Trump is, of international investment in U.S. corporations). The Dow can increase if non-amerikans invest in the constituent companies and don’t invest as much in non-U.S. companies. It would be better in some cases to see a long string of gains in all-country/all-world indices excluding the United States.
Yet, those who seem to prefer U.S. wage increases over Dow increases, or wouldn’t be uncomfortable seeing sovereign wealth funds with U.S. company stock have a bad month, may be putting amerikans’ interests before global economic growth. At the same time, it is true both that amerikans have some retirement interest in global growth and that seeking higher global growth can be separated from preserving U.S. dominance. People should think about how global indices and measures could increase without large increases in certain U.S. economic indicators and measures. Wage pandering can be rejected without accepting the idea that shoring up the U.S. economy relative to other economies is necessary for global growth.
This writer has suggested a way forward if people insist on pandering to amerikans economically. Not all amerikan economic selfishness has to involve pushing for wage increases or getting caught up in Republican politics and rhetoric about strengthening the U.S. economy. There is a way out: the future. One day neo-colonialism and capitalism will be gone, but what is better for the world, than the current level of U.S. dominance in economic and political spheres, may be good for amerikans and their children in retirement.
Trade-offs
In surveys, Democrats support certain wars and military operations less than Republicans do. Yet, Democrats have shown they can accept wars if they get some of what they want on economic and cultural/social issues.
The question arises, would Republicans forego invading another country (or putting more boots on the ground or launching more cruise/drone missiles) if they got some of what they want on economic issues. The answer is “no.” There is no need to. Democrats didn’t oppose Obama’s wars; Democrats prioritize domestic policy, often sound the same as Trump on some economic issues, still spread and tell stories alleging LGBT rights abuses, wimmin’s rights abuses and humyn rights abuses in Iran and Saudi Arabia, and today indicate they would be willing to accept wars if they get, or get to keep, some of what they support on abortion rights, health care, LGBT rights, the environment, or science. Trump just has to pick an area to compromise in, and throw U.S. workers a bone or two economically.
Whether one believes various stories about Russia or not, it is indisputable that many Democrats are already more jingoistic in some cases than many Republicans. That energy can be exploited for other targets. Democrats’ pushing so hard on economic and cultural/social issues, and pandering to jingoistic and militaristic Republicans, led to this situation. The small war-dove pro-business wing of the Republican Party never had a chance. The war-hawk pro-worker wing of both the Democratic and Republican Parties found many supporters in both parties. Democrats and Republicans ended up competing in jingoistic and warmongering rhetoric, and pro-worker rhetoric, to overcome polarization on cultural/social issues. The war-hawk pro-U.S.-worker wing of the Republican Party, with some “pro-growth” rhetoric, is ascendant now in the midst of confusion about whether the Democrats have become more pro-business.
Not a whole lot separates the war-hawk pro-business/pro-worker opportunism of Democrats and Republicans. With comparatively small or lower-priority differences on things like cops’ wearing body cams (Clinton for, Trump against, in some contexts), it won’t be surprising when Democrats get on board with attacking Iran or bombing people in another country. They cared about raising the minimum wage more than they worried about protectionism, nationalism and jingoism that could threaten their own future living standards. ◊
See:
• “Minimum wages soar across Europe in bid to curb social inequality,” 2017 February 10. http://www.euractiv.com/section/social-europe-jobs/news/minimum-wages-soar-across-europe-in-bid-to-curb-social-inequality/
• “Economic slowdown and productivity: where class struggle meets crisis,” 2016 August. https://github.com/pinotes/pinotes.github.io/blob/master/_posts/2016-08-17-news-economic-slowdown-productivity.md
• “AmeriKKKa is still the dominant power in the world and needs to be opposed as such,” 2016 December. https://github.com/pinotes/pinotes.github.io/blob/master/_posts/2016-12-28-news-US-hegemony-UNSC-settlements-resolution.md
• “U.S. economic outlook improves; structural basis of crisis continues to develop,” 2017 January. https://github.com/pinotes/pinotes.github.io/blob/master/_posts/2017-01-08-news-Jan2017-US-economic-outlook.md
• “The global anti-American economic struggle: Iran and China address trade and investment obstacles,” 2017 January. https://github.com/pinotes/pinotes.github.io/blob/master/_posts/2017-01-22-news-2017-World-Economic-Forum-China-Iran.md
Notes:
1. “Trump’s second pick for labor secretary Alexander Acosta wins support from unions,” 2017 Feburary 23. https://www.nydailynews.com/news/politics/trump-pick-labor-secretary-wins-support-unions-article-1.2980467
2. Example: “Who is Alexander Acosta? Trump Labor nominee supports amnesty, cheap foreign labor,” 2017 February 16. http://www.breitbart.com/big-government/2017/02/16/alexander-acosta-department-labor/
3. “Even Trump voters want the minimum wage raised,” 2017 February 14. http://money.cnn.com/2017/02/14/news/economy/donald-trump-minimum-wage/
4. “Pelosi Statement on the nomination of Alexander Acosta for Labor Secretary,” 2017 February 16. https://www.democraticleader.gov/newsroom/2162017-2/
See: “Pelosi statement on nomination of Gen. James Mattis for Secretary of Defense,” 2016 December 2. http://www.democraticleader.gov/newsroom/122164/
5. “Raising the minimum wage makes economic sense,” 2017 February 17. http://ww2.cfo.com/compensation/2017/02/raising-minimum-wage-makes-economic-sense/
6. “Inside Politics” program transcript. Aired February 22, 2017 - 12:30 ET. http://edition.cnn.com/TRANSCRIPTS/1702/22/ip.02.html “Up next, if you judge the President’s approval rating, Donald Trump struggling. But if your test is your 401k balance, the trend line is up. Bigley.” “The risk I think to your point, is if those guys in Wisconsin and Michigan and Pennsylvania who voted for him, their wages don’t go up. Your 401k doesn’t mean a hoot if your week to week paycheck isn’t helping you out.”
7. https://au.investing.com/indices/major-indices
https://au.investing.com/indices/global-indices
http://www.reuters.com/finance/markets/indices
8. “Goldman Sachs simulations point to a problem for global growth: the Trump White House,” 2017 February 13. http://www.cnbc.com/2017/02/13/goldman-sachs-donald-trumps-trade-and-immigration-policies-to-shave-global-growth.html
9. “Emerging markets account for 80% of global GDP growth but only 10% of world equity market cap,” 2017 February 23. https://fronteranews.com/investing/emerging-markets-account-for-80-of-global-gdp-growth-but-only-10-of-world-equity-market-cap/
“Emerging markets dominate global GDP,” 2014 May 9. http://www.thinkadvisor.com/2014/05/09/emerging-markets-dominate-global-gdp
“Gap between emerging markets’ shares of global GDP and market capitalization,” 2013 December 27. http://www.livemint.com/Opinion/VJ6rivyRX1fdahumYrIweK/Gap-between-emerging-markets-shares-of-global-GDP-and-marke.html
“Gap between India’s share in world GDP and world market cap at highest in 13 years,” 2017 January 2. http://www.livemint.com/Money/eLzuIplP2xVx4CWbY7T7rO/Gap-between-Indias-share-in-world-GDP-and-world-market-cap.html
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