Archives for category: Economy

The union movement built the middle class. For most of the past century, big business and plutocrats have waged war on unions and have largely succeeded. As the following analysis by the Economic Policy Institute shows, the high point of the labor movement was in the in the late 1940s and early 1950s. As the strength of unions waned, inequality grew.

The EPI study begins:

Unions improve wages and benefits for all workers, not just union members. They help reduce income inequality by making sure all Americans, and not just the wealthy elite, share in the benefits of their labor.

Unions also reduce racial disparities in wages and raise women’s wages, helping to counteract disparate labor market outcomes by race and gender that result from occupational segregation, discrimination, and other labor market inequities related to structural racism and sexism.

Finally, unions help win progressive policies at the federal, state, and local levels that benefit all workers. And conversely, where unions are weak, wealthy corporations and their allies are more successful at pushing through policies and legislation that hurt working people. A strong labor movement protects workers, reduces disparities, and strengthens our democracy.

CBS News reported on an analysis by the U.S. Treasury showing that the richest Americans avoid paying $163 billion each year.

The top 1% of Americans are avoiding paying an estimated $163 billion in taxes a year, according to the Treasury Department. In contrast, more than 99% of taxes on regular incomes — paid via a paycheck — get paid.

That discrepancy is pushing the estimated tax gap, the amount of money owed by taxpayers that isn’t collected, to nearly around $600 billion annually, and to approximately $7 trillion in lost revenue over the next decade, the Treasury Department finds.

Tax evasion is concentrated among the wealthy in part because high-income taxpayers are able to employ experts who can better shield them from reporting their true incomes, the Treasury Department argued in a blog post. More complicated incomes such as partnerships and proprietorships – more frequent among high earners — have a far greater noncompliance rate that can hit as high as 55%.

“The tax gap can be a major source of inequity. Today’s tax code contains two sets of rules: one for regular wage and salary workers who report virtually all the income they earn; and another for wealthy taxpayers, who are often able to avoid a large share of the taxes they owe,” wrote Treasury Deputy Assistant Secretary for Economic Policy Natasha Sarin.

Meanwhile our roads, bridges, tunnels, and other vital infrastructure are underfunded. Schools need to invest in physical improvements. Class sizes are too large, especially in urban districts. Teachers are underpaid in comparison to other professionals with the same education credentials.

Taxes are too low on those who can most afford to pay them. Tax avoidance is thriving while our society’s basic needs are not.

It’s past time for nation building at home.

When Jeff Bezos divorced McKenzie Scott in 2019, she received 4 percent of Amazon shares, valued then at $36 billion. She determined that she wanted to give her staggering wealth away. In the past 11 months, she has donated more than $8 billion as direct gifts to nonprofits.

None of the recipients asked for the money. None expected it. They were selected by Scott’s team, and out of the blue, got a phone call informing them about their good fortune. One of her trusted advisors is her new husband, Dan Jewett, who teaches chemistry at her children’s school.

In 2020, she gave away nearly $6 billion to 500 organizations. She just revealed that she donated another $2.74 billion to 286 organizations. The average size of the grants was about $10 million. Her grants come with no strings attached, unlike “gifts” from the Gates Foundation, the Broad Foundation, the Walton Family Foundation, and many other venture philanthropists. The recipients can use the money as they see fit.

Read her statement in Medium, where she makes clear her disdain for the system that creates vast inequality. Her article also lists the organizations that received her surprise grants.

She writes, in part:

People struggling against inequities deserve center stage in stories about change they are creating. This is equally — perhaps especially — true when their work is funded by wealth. Any wealth is a product of a collective effort that included them. The social structures that inflate wealth present obstacles to them. And despite those obstacles, they are providing solutions that benefit us all.

Putting large donors at the center of stories on social progress is a distortion of their role. Me, Dan, a constellation of researchers and administrators and advisors — we are all attempting to give away a fortune that was enabled by systems in need of change. In this effort, we are governed by a humbling belief that it would be better if disproportionate wealth were not concentrated in a small number of hands, and that the solutions are best designed and implemented by others. Though we still have a lot to learn about how to act on these beliefs without contradicting and subverting them, we can begin by acknowledging that people working to build power from within communities are the agents of change. Their service supports and empowers people who go on to support and empower others.

Despite her determination to give her fortune away, Amazon’s stock price has soared because of the pandemic. Scott’s fortune is now valued at $60 billion. She will have to give her billions away faster. Much faster.

McKenzie Scott seems to understand that our current economic system is unjust. We need a wealth tax to correct the insane inequality that now characterizes our society.

Privatization of important parts of the public sector is a great scourge of our times. No institution is more fundamental to the American Dream than public education, and it is under assault by powerful and well funded forces. By billionaires who have dreams of lower taxes and libertarians who want to destroy whatever government provides. We must fight privatization of the goods and services that belong to us.

Frankly we should join together to fight for a society where there are no billionaires and no poverty. Let us agree to take care of one another and have a fairer society, where everyone has a decent standard of living, where there is no hunger or homelessness. I recommend a book called The Spirit Level: Why Greater Equality Makes Societies Stronger, in which two British sociologists-Richard Wilkinson and Kate Pickett-demonstrate that societies with more equality are happier than those where great inequality persists. By contrast, scan Bloomberg Billionaires Index. I am not a socialist, but I don’t believe we should have either billionaires or poverty.

The pandemic impoverished millions of people. But the billionaire class got richer, much much richer. Senator Bernie Sanders said recently that the fifty richest people in this country have wealth equal to the bottom 50 percent of the population. That is gross, disgusting, obscene inequality.

Our nation and its democratic ideals are being undermined by extremes of wealth and income. The middle class is struggling not to slip into poverty.

From Forbes in 2018:

In the 1950s, a typical CEO made 20 times the salary of his or her average worker. Last year, CEO pay at an S&P 500 Index firm soared to an average of 361 times more than the average rank-and-file worker, or pay of $13,940,000 a year, according to an AFL-CIO’s Executive Paywatch news release today.

This is not the America I grew up in, and it’s not what America should be.

I have found these old English rhymes to be inspiring.

The law locks up the man or woman
Who steals the goose off the common
But leaves the greater villain loose
Who steals the common from the goose.

The law demands that we atone
When we take things we do not own
But leaves the lords and ladies fine
Who takes things that are yours and mine.

Ezra Klein of the New York Times interviewed Senator Bernie Sanders for his podcast, “The Ezra Klein Show.”

Listen to “The Ezra Klein Show”:Apple PodcastsPocket CastsSpotifyGoogle PodcastsStitcher (How to Listen)

Bernie Sanders didn’t win the 2020 election. But he may have won its aftermath.

If you look back at Joe Biden and Bernie Sanders’s careers, the $1.9 trillion stimulus package, the American Rescue Plan, looks a lot like the proposals Sanders has fought for forever, without much of the compromise or concerns that you used to see from Senator Joe Biden. That’s not to take anything away from Biden. He’s the president. This is his plan. And it is to his credit that he saw what the country needed, what the politics of the moment would support and where his party had moved, and met it with full force.

But Sanders’s two presidential campaigns are part of the reason that the Democratic Party had moved, and the politics of the moment had changed. And so I’ve wondered what Sanders makes of this moment. Is it a triumph? A disappointment? A beginning?

And I’ve wondered about his take on some of the other questions swirling around the Democratic Party: Are liberals alienating people who agree with them on economics by being too censorious on culture? Is there room to work with populist Republicans who might be open to new economic ideas even as they turn against liberal democracy itself?

You can listen to our whole conversation by following “The Ezra Klein Show” wherever you get your podcasts, or clicking play above. An edited transcript follows:

The 2009 stimulus was 5.6 percent of the G.D.P. in 2008. The Rescue Plan this year is 9.1 percent of last year’s G.D.P. So it’s just much bigger. And the individual policies in it are, in my view, much less compromised. So why are 50 Democrats in 2021 legislating so much more progressively than 59 Democrats did in 2009?

Well, I think that there is a growing understanding that we face unprecedented crises, and we have got to act in an unprecedented way. Members of Congress look around this country, and they see children who don’t have enough food, people facing eviction. People can’t get health care. We have, obviously, the need to crush this terrible pandemic that has taken over 500,000 lives.

And I think the conclusion from the White House and from Congress is, now is the time to do what the American people need us to do. And it turned out to be a $1.9 trillion bill, which, to my mind, was the single most significant piece of legislation for working-class people that has been passed since the 1960s.

Let’s say I’m someone on the left who supported you in 2020. I’m looking at the American Rescue Plan and I see the $15 minimum wage got dropped, paid family leave got dropped. The child tax credit, which is my favorite part of the bill, it’s only temporary. Convince me that I should be excited about this. Why do you think it’s so significant?

I don’t have to convince you. We have already convinced 75 percent of the American people that this is a very good piece of legislation. And I think progressives out there understand that given a fairly conservative Congress, it is hard to do everything that we want to do.

I was bitterly disappointed that we lost the minimum wage in the reconciliation process as a result of a decision from the parliamentarian, which I think was a wrong decision. But we’re not giving up on that. We’re going to come back, and we’re going to do it.

But in this legislation, let us be clear we have gotten for a family of four — a working-class family struggling to put food on the table for their kids — a check of $5,600. Now people who have money may not think that’s a lot of money. But when you are struggling day and night to pay the bills, to worry about eviction, that is going to be a lifesend for millions and millions of people.

We extended unemployment to September with the $300 supplement. We expanded the child tax credit to cut child poverty in America by 50 percent. Now, that’s an issue we have not dealt with for a very long time — the disgrace of the U.S. having one of the highest rates of childhood poverty of any major country on Earth. Well, we did it, and we hope to make it permanent. That is a big deal.

And obviously, we invested heavily in dealing with the pandemic, getting the vaccines out to the people as quickly as possible to save lives. In terms of education, billions of dollars are going to make sure that we open our schools as quickly and as safely as we can. We tripled funding for summer programs so the kids will have the opportunity to make up the academic work that they have lost. Tripled funding for after-school programs so when kids come back next fall, there will be programs the likes of which we have never seen.

So this is not a perfect bill. Congress does not pass perfect bills. But for working-class people, this is the most significant piece of legislation passed since the 1960s. And I’m proud of what we have done.

However, it is clear to me — and I think the American people — that we have more to do. This is an emergency bill that says, in America families should not go hungry. People should not be forced out of their homes.

Now we have to deal with the long-term structural problems facing our country that have long, long been neglected way before the pandemic: rebuild our crumbling infrastructure, address the existential threat of climate change, create many millions of decent-paying jobs, build the millions of units of affordable housing that we need.

In terms of the social issues: fight structural racism, immigration reform, fight against the growing trend of authoritarianism. We’re living in a nation today where 30 percent or 40 percent of the American people have given up on democracy — a worldwide problem. How do we combat that? We got to deal with voter suppression and the effort of Republicans to make it harder and harder for people of color, lower-income people, to vote.

There are a huge number of issues out there. Some of them are existential — they have to be dealt with. And I intend to do everything that I can as chairman of the Budget Committee to make sure that we continue to move forward.

This bill, as you mentioned, passed through budget reconciliation. The things that couldn’t go through budget reconciliation got dropped from it. But a bunch of the different policy measures you just mentioned can’t go through budget reconciliation. You can’t do immigration reform there. You can’t do H. R. 1, the For the People Act, or H.R. 4, the Voting Rights Act.

Well, I’m not so sure.

You’re budget chairman. Tell me why.

I don’t want to bore the American people with the rules of the United States.

Bore me. [LAUGHS]

If you have insomnia, pick up the rule book. You’ll be asleep in about five minutes. It is enormously complicated. It is enormously undemocratic. It is designed to move very, very slowly, which we cannot afford to do, given the crises that we face today.

This is the way I look at it: We have a set of literally unprecedented crises. Ideally, it would be nice that we could work in a bipartisan way with our Republican colleagues — and maybe in some areas, we can. But the major goal is to address these crises. That is what the American people want. And if we can’t do it in a bipartisan way with 60 votes, we’re going to figure out a way that we get it done with 50 votes.

I have never heard a theory under which you could do democracy reform bills like the John Lewis Voting Rights Act or a major immigration reform bill through budget reconciliation. Do you see a way around that? Are you talking about the Democrats changing reconciliation or changing the filibuster?

Well, obviously, I believe that we should do away with the filibuster. I think the filibuster is an impediment to addressing the needs of this country, and especially of working-class people. So I believe that at this moment we should get rid of the filibuster, and I will work as hard as I can to do that.

I’m not going to lay out all of our strategy that we’re working on right now. But what I repeat is that this country faces huge problems. The American people want us to address those problems. And we cannot allow a minority to stop us from going forward.

There’s a lot of coverage, as there always is, about potential friction in the Democratic caucus in the Senate — differences between, say, a Senator Joe Manchin and Kyrsten Sinema and others. Do you find the caucus to be united on strategy more, or less than in the past?

Obviously, you’ve got 50 people. And when you have 50 people, the crazy situation is that any one person could prevent us from moving forward. But I think and hope that there is an understanding that despite our differences — and some of these differences are significant — we have got to work with the president of the United States, who I think is prepared to go forward aggressively in a number of issues. We cannot sabotage the needs of the American people.

So any one person really has enormous power. But I would hope that by definition, when you are a member of a caucus, you fight for what your views are within the caucus. But at the end of the day, nobody is going to get everything they want. I did not get everything that I want in the American Rescue Plan. Others did not get everything they wanted.

But at the end of the day, we have got to go forward together because we need to be united. And I think there is a widespread understanding about the importance of that.

Let’s talk about the dynamics between the parties right now. A few months ago, you were working with Senator Josh Hawley on bigger stimulus checks. That was a very effective project. But then Senator Hawley votes against certifying the election. He raised his fist to the mob from the Capitol. How have your relationships with Republicans changed in the aftermath of Jan. 6?

Well, all in all, I don’t want to get into personalities here. But this is what I would say. And I think it’s a very sad state of affairs.

Obviously, in the last many years, only accelerated by Donald Trump, the Republican Party has moved not only very far to the right, but moved in the direction of authoritarianism. You have a president of the United States saying a month before the election that the only way he could lose that election is if it was stolen from him. After he lost the election, he says, obviously, it was stolen. And you have now a very significant majority of Republicans who believe that the election was stolen.

That is where many Republicans are. You got a lot of Republican senators, members of the House, who are refusing even today to say that Joe Biden won a fair and square election. So you’ve got a whole lot of problems. That’s one of the issues that as a nation, as a Democratic Party, we have got to address.

Do you think a byproduct of how the Republican Party has changed is that it puts less emphasis on economic issues than it used to? I was struck by how much more energized Republicans were the week that the American Rescue Plan passed by the debate over Dr. Seuss’s books than by this $1.9 billion spending bill.

Look, the energy in the Republican Party has nothing to do with tax breaks to the rich. Republicans are not going into the streets, the Trump Republicans, saying: We need more tax breaks for the rich, we need more deregulation, we need to end the Affordable Care Act and throw 30 million people off their health care. That’s not what they’re talking about.

What Trump understood is we are living in a very rapidly changing world. And there are many people — most often older white males, but not exclusively — who feel that they’re losing control of the world that they used to dominate. And somebody like Donald Trump says: “We are going to preserve the old way of life, where older white males dominated American society. We’re not going to let them take that away from us.” That is where their energy is.

One of the gratifying things is the American Rescue Plan had a decent amount of Republican support — 35 percent, 40 percent. But among lower-income Republicans, that number was 63 percent.

So I think that our political goal in the coming months and years is to do everything we can to reach out to young people, reach out to people of color, reach out to all people who believe in economic and social justice, but also reach out aggressively to working-class Republicans and tell them we’re going to make sure that you and your children will have a decent standard of living. We’re going to raise the minimum wage for you. We’re going to make it easier for you to join a union. We’re going to make sure that health care in America is a human right. We’re going to make sure that if we do tax breaks, you’re going to get them and not the billionaire class.

I think we have a real opportunity to pick up support in that area. And if we can do that — if you can get 10 percent of Trump’s support and grow our support by addressing the real issues that our people feel are important — you’re going to put together a coalition that is not going to lose a lot of elections.

The Republican strategy right now, to your exact point, is to go to these people and say, the Democrats want to take away things that are culturally important to you. They want to take away your Dr. Seuss books. They want to take away your guns. They want to make it so your kids can’t go to religious school.

How do you talk to voters who are actually worried about those direct questions — who may agree with Democrats on the economic side, but are worried the Democrats are going to take things they culturally care about?

It’s a good question, and no one that I know has a magical answer to it. I do think that addressing economic issues is helpful. It’s not the 100 percent solution. As you know, you’ve got the QAnon people telling their supporters that Democrats — I’m not sure what the latest particular thing is, killed babies and eat their brains or something. Is that the latest thing that we’re supposed to be doing? I don’t know.

But when people who are in trouble suddenly receive a check for $5,600 for a family of four, when their unemployment is extended, when they get health care that they previously did not have, when they’re better able to raise their child, it’s not going to solve all of these cultural problems by a long shot, but it begins maybe to open the door and say, well, you know what? This is good. Trump didn’t do this for us. And maybe these Democrats are not as bad as we thought that they were.

I think it’s going to take a lot of work. These cultural issues, I don’t know how you bridge the gap. You have people who are fervently anti-choice, and I’m not sure that you are going to win many of them over. But I think what we have got to do is do what I’m afraid the Democrats have not always done in the past. And that is treat people with respect.

I come from one of the most rural states in America, and I lived in a town of 200 people for a couple of years. And I think there is not an appreciation of rural America or the values of rural America, the sense of community that exists in rural America. And somehow or another, the intellectual elite does have, in some cases, a contempt for the people who live in rural America. I think we’ve got to change that attitude and start focusing on the needs of people in rural America, treat them with respect, and understand there are areas there are going to be disagreements, but we can’t treat people with contempt.

Do you think there is truth to the critique that liberals have become too censorious and too willing to use their cultural and corporate and political power to censor or suppress ideas and products that offend them?

Look, you have a former president in Trump, who was a racist, a sexist, a xenophobe, a pathological liar, an authoritarian, somebody who doesn’t believe in the rule of law. This is a bad-news guy. But if you’re asking me, do I feel particularly comfortable that the then-president of the United States could not express his views on Twitter? I don’t feel comfortable about that.

Now, I don’t know what the answer is. Do you want hate speech and conspiracy theories traveling all over this country? No. Do you want the internet to be used for authoritarian purposes and an insurrection, if you like? No, you don’t. So how do you balance that? I don’t know, but it is an issue that we have got to be thinking about. Because yesterday it was Donald Trump who was banned, and tomorrow, it could be somebody else who has a very different point of view.

I don’t like giving that much power to a handful of high-tech people. But the devil is obviously in the details, and it’s something we’re going to have to think long and hard on.

Do you think Joe Biden is having an easier time selling an ambitious progressive agenda than Barack Obama did, at least to these audiences, partly because he’s an older white man, rather than a young Black man?

I don’t know the answer to that. Let’s not forget that Barack Obama, after four years, was re-elected with a pretty good majority. He was a popular president and a very popular figure today. But I think you can’t look at Biden or Obama without looking into the moment in which they are living. I think in the last number of years since Obama, political consciousness in this country has changed.

I think to a significant degree, the progressive movement has been successful in saying to the American people that are in the richest country in the history of the world, you know what? You’re entitled to health care as a right. You’re entitled to a decent-paying job. Your kid is entitled to go to a public college or university tuition-free. That it is absolutely imperative that we have the courage to take on the fossil-fuel industry and save this planet by transforming our energy system away from fossil fuels. That it is a moral issue that we finally deal in a comprehensive way with 11 million undocumented immigrants in this country.

I think Biden is in a position where this country has moved forward at the grass-roots level in a much more progressive way. It is not an accident that today the House of Representatives is far more progressive than it was when I was there in the House.

And then you had a president who was a moderate Democrat throughout his time in the Senate, who had the courage to look at the moment and say, you know what? The future of American democracy is at stake, tens of millions of people are struggling economically. They’re really in pain. Our kids are hurting. Seniors are hurting. I’ve got to act boldly. And Biden deserves credit for that.

But what I hope very much is that understanding of the need to act bold goes beyond the American Rescue Plan and is the path that Biden continues during his administration.

Let’s talk about those generational differences. You’re no spring chicken, but you were the overwhelming choice of young voters in 2020. How are the politics of younger voters different, and why are they different?

I love the younger generation. I really do. And it’s not just because they supported me. People say, how did you get the support of the younger people? We treated them with respect and we talked about the issues to them in the same way we talked about the issues to every other generation that’s out there. I think you’ve got a couple of factors, though.

No. 1, for a variety of reasons, the younger generation today is the most progressive generation in the modern history of this country. This is the generation that is firmly anti-racist, anti-sexist, anti-homophobia, anti-xenophobia — a very compassionate generation that believes in economic and social and environmental justice. So you’ve got that.

And then the second thing you’ve got is, this is a generation of young people that is really hurting economically. This is the first generation in the modern history of this country where, everything being equal, they’re going to have a lower standard of living than their parents. And that’s even before the pandemic, which has made a bad situation worse.

This is a generation where, on average, young workers are making less money than their parents. They’re having a much harder time buying a home or paying the rent. This is a generation stuck with a huge amount of student debt. And I was surprised, when we first raised this issue of student debt back in 2016, how it really caught on.

Because people are saying, you know what? What crime did I commit that I have to be $50,000 or $100,000 in debt? I was told over and over again, get an education. I got an education. I went to a state university. I went to a private school. I went to school for four years, and now I’m stuck with a $50,000, $100,000 debt. I went to graduate school. I went to medical school. I got $300,000 in debt. That’s insane.

I think if you look at the young generation from an idealistic point of view, it’s a generation that has expectations and views that are much more progressive than their parents and grandparents. But it is also a generation that wants the government to address the economic pain that they are feeling.

It was a striking moment when President Biden released a video pretty explicitly backing the workers trying to unionize at Amazon’s Alabama warehouse. What could Congress do to help? What do you want to do to help reverse the decline of unionization in the U.S.?

I’m chairman of the Budget Committee, and we just had a hearing which touched on that issue. We had a young woman from a warehouse in Bessemer, Ala., the Amazon plant there, and she was talking about why they need a union. I invited Jeff Bezos to attend the hearing to tell me why a guy who was worth $182 billion thinks he has to spend millions of dollars to fight workers who are trying to form a union to improve their wages and working conditions.

What I have believed for a long time, what Joe Biden believes, is we need to pass legislation to make it easier for workers to join unions. Because if workers are in unions and can negotiate decent contracts, their wages will go up. Their working conditions and their benefits will improve. So we are working hard on that issue, and something I know the House has passed. I want to see it passed here in the Senate as well.

Should Democrats be pushing for something bigger, like sectoral bargaining?

I believe so. I campaigned on that. But I think bottom line is that Democrats got to take a deep breath and to make the determination of whether or not they’re going to become the party of the American working class — a class, by the way, which has suffered really terribly in the last 40 or 50 years, where today, workers are barely in real wages making any more than they did 40 or 50 years ago, despite huge increases in technology and productivity. I think we got to do that.

And I think when we do that — when we have the courage to take on powerful special interests, taking on Wall Street, taking on the drug companies, taking on the health care industry, taking on big campaign contributors who want to maintain the status quo — we are going to be able to transform this country and create an economy and a government that works for all. And I think Democrats are going to have very good political success as well.

The Rescue Plan will be followed up by a big jobs and investment package. What needs to be in that package for it to win your support?

The simple stuff and obvious stuff is, you’ve got an infrastructure which is crumbling and roads and bridges and water systems and wastewater plants. I would add affordable and low-income housing to any discussion of infrastructure. So you’ve got to deal with infrastructure, and when you do that, you can create millions of good-paying jobs.

But obviously, also, you have to deal with the existential threat of climate change. We’ve got to guarantee health care to all people as a right. You got to deal with immigration reform. You’ve got to deal with criminal justice and systemic racism. So those are some of the big, big issues that are out there.

You can listen to the entire conversation by following “The Ezra Klein Show” wherever you get your podcasts, or clicking play below.

Benjamin Wallace-Wells writes in the New Yorker about the importance of the vote on whether to unionize at an Amazon facility in Bessemer, Alabama. The workers are paid $15 an hour. They are organizing against a behemoth corporation owned by the richest man in the world over working conditions, pay too. The vote concludes Monday. Six thousand workers will define the future for millions of others. Bernie Sanders tweeted recently that the 50 richest Americans own more than the bottom 50%. Is this our future?

He writes:

Most contemporary union drives are ultimately about the past—about the contrast that they draw between the more even prosperity of previous decades and the jarring inequalities of the present. But one that will culminate on Monday, the deadline for nearly six thousand employees of an Amazon fulfillment center in Bessemer, Alabama, to cast ballots on whether to affiliate with the Retail, Wholesale, and Department Store Union, is the rare union campaign that is obviously about the future. In this case, hyperbole is possible. The Democratic congressman Andy Levin, of Michigan, a union stalwart, has described it as “the most important election for the working class in this country in the twenty-first century.” On Monday, the Reverend Dr. William Barber, as prominent a figure as exists in the modern civil-rights movement, travelled to Alabama and said, “Bessemer is now our Selma.”

That this election is about the future has something to do with the workers themselves, who embody the political transformation of the South to which progressives pin their dreams. According to union officials, a majority of the people employed at the facility, which is outside of Birmingham, are Black, and a majority are women. On the drive up to the facility, supporters of the R.W.D.S.U. planted a sign featuring the Democratic politician and voting-rights advocate Stacey Abrams striking a Rosie the Riveter pose. A high-ranking labor official in Washington pointed me to a detail from an interview, published in The American Prospect, with the campaign’s on-the-ground leader, a thirty-three-year-old organizer named Josh Brewer. Brewer said that many of the workers who supported the union had been involved in demonstrations to bring down Confederate statues in Birmingham, and they often organized themselves.

But the significance of the drive has more to do with the company itself. Amazon is now among the largest private employers in the United States; its founder, Jeff Bezos, is arguably the wealthiest man in modern history. The company has paid every one of its workers fifteen dollars per hour since November, 2018, while also pioneering second-by-second monitoring of its employees. “This isn’t just about wages,” Stuart Appelbaum, the R.W.D.S.U.’s president, told me, on Monday. It is also about the strenuous pace of work, and the real-time surveillance methods that Amazon has used to monitor employees. Appelbaum said some of the workers that his union has represented have had employers that monitored their locations with G.P.S. chips in their delivery trucks, “but there’s nothing like this, where you’re expected to touch a package every eight seconds.” It had been hard to organize within the Bessemer facility, he said, in part because many of the workers did not know one another. “It’s hyper-Taylorism,” Damon Silvers, the director of policy and the special counsel of the A.F.L.-C.I.O., said. “Amazon has determined an optimal set of motions that they want their employees to do, and they have the ability to monitor the employee at all times and measure the difference between what the employee does and what they want them to do, and there is nowhere to hide.” Appelbaum said, “People tell us they feel like robots who are being managed by robots.”

The Amazon union drive has drawn a rare intensity out of the usual suspects. Abrams, Levin, and Bernie Sanders have announced their support for it, and so has President Joe Biden, who recorded a strong message encouraging the organizers and discouraging any effort to interfere with them. It has also drawn some unusual allies, above all the conservative Republican senator Marco Rubio, of Florida, who published an op-ed in USA Today declaring his support for the organizing workers and his opposition to Amazon’s ways: “The days of conservatives being taken for granted by the business community are over.”

Amazon’s influence is so vast—touching on issues from wealth and income inequality to antitrust policy, the American relationship with China, the omnipotence of workplace surveillance, and the atomizing effect of big business, in its most concentrated and powerful form, on families and communities—that it can scramble ordinary politics. For a moment, at least, it can put Marco Rubio and Stacey Abrams on the same side. Most organizing campaigns have a symbolic quality, in which the employer and its workers stand for different models of economic organization. The fight in Bessemer is different because it is so direct. Amazon isn’t a proxy for the future of the economy but its heart.

A year into a pandemic that has kept many Americans cooped up at home, ordering supplies and streaming their entertainment, seems an unpromising time to take on Amazon, which supplies many of those services. Amazon’s revenue grew by nearly forty per cent in 2020, and its workforce grew by about fifty per cent; Jeff Bezos’s wealth reportedly increased by nearly seventy billion dollars last year. The company has become so ubiquitous that even to inquire about it entangles you in its machinery: type “is Amazon popular?” into a search engine and you might find, as I did, that most of the top results are books about popularity which are sold on Amazon. You can find evidence that Amazon both is and isn’t popular in survey data. In one poll, ninety-one per cent of respondents said that they had a favorable view of Amazon; in another, fifty-nine per cent thought the company was bad for small business. To count on broad opposition to Amazon right now is to assume such cognitive dissonance: that Americans may increasingly rely on Amazon and view it favorably while also believing that the company needs to change...


The labor leaders in Washington seemed to see Republican support as welcome but mostly ornamental—like if a distant relative had sent, for Christmas, a very large painting of a duck. They found the Democrats’ reaction more significant. In Biden’s message of support earlier this month, he warned employers not to interfere with union elections: “You should all remember that the National Labor Relations Act didn’t just say that unions are allowed to exist. It said that we should encourage unions.” Silvers, of the A.F.L.-C.I.O., said he thought that Biden was speaking directly to the workers who were organizing. “The way he’s talking is not unprecedented, but the precedents are in the Roosevelt Administration,” he said. Appelbaum, of the R.W.D.S.U., said that there had been more talk about the importance of unions in the last Presidential campaign than he’d ever heard before. “We used to talk about how even those Democratic Presidents who we like would barely talk about unions. Biden is different.”


The Economic Policy Institute is one of the very few think tanks in Washington, D.C., that is not funded by Bill Gates or the Waltons. It is openly on the side of working people. It does valuable research. During the pandemic, unionized workers fared slightly better than non-union workers.

This study shows dramatically that as unions decline, income inequality grows.

Figure B in this article shows that as the percent of people in unions declined, the share of income going to the top 10% increased.

Union membership reached a peak (about 33% of all workers) in the late 1940s-early 1950s.

Since then, the spread of anti-union laws (so-called “right to work” laws) has caused a sharp decline in union jobs.

The anti-union movement has been funded over the years by big business and billionaires, of course. They are now fighting the movement for a $15 an hour minimum wage. They live in luxury but don’t understand why working people need a living wage just to pay the rent and put food on the table.

Over the past decade, I have repeatedly defended unions, and extremely stupid people have accused me of being paid by the teachers’ unions. Jeanne Allen of the pro-choice Center for Education Reform once tweeted that my “beautiful home” in Brooklyn Heights must have been paid for by the unions. Yes, I did live in a beautiful brownstone in Brooklyn Heights, but I paid for it myself, without a penny from any union.

I defend unions because they provide a pathway into the middle class for people who are poor and working class. By joining a union, they are part of an organization that will make sure they have a good salary, health benefits, and a pension. Why is so problematic for rightwing conservatives and the 1%? Billionaire John Arnold is offended by public pensions, and he has spent a few millions trying to persuade the public that pensions are bankrupting the public sector. I think it is more likely that the public sector has been starved by tax breaks for billionaires.

So, yes, I would like to witness the rebirth of unions in my lifetime. They are the very best protection for working people. They build a middle class. Our society needs more unions, a higher minimum wage, and representation for all workers.

Education Trust, which is amply funded by billionaires, says it advocates for equity when it promotes standardized testing. Twenty years of standardized testing shows that this is a useless and fraudulent effort. Education Trust should be advocating for unions if it really wants equity.

Let us hope that billionaires like Bill Gates, Michael Bloomberg, and Eli Broad, to mention just a few, will invest in union organizing drives. If they truly want to promote equity in American society, that is the best way to advance the cause. Not charter schools. Not vouchers. Not standardized testing. Unions. Unions that assure a decent standard of living and a decent retirement for every member.

The following essay was written by Michael Podhorzer, Senior Advisor to the president of the AFL-CIO. I totally agree that the key to building a strong middle class is the expansion of unions. The plutocrats have done a great job of demonizing them and destroying the ladder into the middle class that unions offer. Right now, Amazon workers are deciding whether to form a union in Bessemer, Alabama. I hope they win. Jeff Bezos should share the wealth with those who work for him. He should not have nearly $200 billion. Why should Elon Musk and Bill Gates have nearly $200 billion? Couldn’t they be satisfied and live in luxury with only a few hundred millions? In a just world, societies would dedicate their best efforts to reducing inequality and eliminating poverty. Let’s give credit to Joe Biden on this important issue. He has said he is a union guy, and he is pushing legislation to enable workers to join unions.

Podhorzer wrote:

The House of Representatives is expected to pass the PRO Act this week, Amazon workers in Alabama continue to vote to form a union and President Biden’s released a video encouraging working people to join unions.  

While the prospect of a national conversation about supporting working people organizing themselves against their exploitation is long overdue, maddeningly, even those who support unions regret the “decline in union membership.” Stating the fact that union members make up a smaller share of the workforce than they once did in the passive voice (decline) erases causality, implicitly confirming the idea working people are now less likely to want to be in a union, or that unions are outdated, or that unions themselves have done a poor job selling themselves. In fact, research from the Massachusetts Institute of Technology shows more than 60 million people would vote to join a union today if given the opportunity and Gallup recently found that union approval stands at 65%, one of the highest marks in a half-century. 

A more accurate characterization of the same fact would be, “intense and sustained corporate campaigns to bust unions, make it more difficult to form unions, exclude more sectors of the workforce from access to union membership and depict unions in the worst possible ways, along with an often bi-partisan retreat in federal support for working people, relentless roll backs by Republican Presidents and Republican trifecta states have dramatically reduced the number of working people who even have the option of joining one.” 

This is yet another example of progressives repeating their opponents’ framing with the effect of making the intentional and contingent seem natural and inevitable.   Similarly, we routinely talk about profits rising, but never about the fact that an increasing share of those rising profits come from preventing working people from sharing in the gains from their increasing productivity. Thus, since the pandemic, all of Amazon’s gains have been captured by Jeff Bezos and the company’s largest shareholders, not the working people risking (and losing) their lives to enable many of us to get through this year without much to disturb our lifestyles. 

Meanwhile, progressive opinion leaders and policy wonks wring their hands and heroically search for fresh solutions to the most pressing crises of the day as if there isn’t a substantial body of evidence that increased union membership ameliorates many of them, including income inequality, democratic participation, racism and authoritarianism among other things (below).  

Studies show that union workers make about $150 billion more a year than non-union workers in wages alone controlling for industry, occupation education and experience. And union workers are much more likely to have health, pension and leave benefits than non-union workers, and those benefits are much more substantial than those non-union workers who have them at all. To put that in perspective: $150 billion is more than twice the SNAP program, yet costs the taxpayer almost nothing. 

All of this will seem improbable at best as long as you imagine that the benefits accrue from unions as the institutions you experience in your professional life.  The benefits accrue from allowing working people to organize themselves collectively and democratically to act on their own behalf.   It is the practice of acting democratically and collectively to negotiate contracts and set working conditions that produces more tolerant, effective citizens. Union members vote for things that matter in their daily lives from their shop steward to the health benefits in their contracts. They can see how much more powerful they are together, embracing their linked fate than they are on their own. They practice a democracy that has all but disappeared elsewhere in America. 

Even if most progressives don’t fully understand how much more powerful working people acting together on their own behalf are than government programs designed to help them, corporations do. That’s why, since the Wagner Act they have relentlessly attacked working people’s ability to combine. 

The Taft-Hartley Act is most known for opening the door to “right to work.” By the 1950’s most southern states were “right to work,” crippling the CIO’s multiracial organizing efforts in the region. The creation of an effectively non-union, low wage region of the country quickly had two profound effects. First, by offering a low wage domestic region to relocate to, unionized corporations had greater leverage against their employees demands. Arguably as important, but much less recognized, it put an end to the development of a national working class consciousness. 

Even less well recognized are the impacts of the restrictions Taft-Hartley put on joint action. The Taft-Hartley Act also banned  jurisdictional strikessolidarity or political strikessecondary boycotts, secondary and mass picketing. In doing so, the Act made illegal the ways in which working people could join together beyond their own employer on behalf of other working people. In this way again, corporations were able to criminalize the development of class solidarity. That has also radically shaped the incentives of unions as institutions. 

MORE THAN THE WEEKEND

While there’s growing acknowledgment of how much the neoliberal market absolutism that triumphed in the late 1970’s is responsible for the present state of affairs, there’s relatively little genuine awareness of what it replaced, or how breaking working people’s ability to act collectively was central to its success. 

Although very far from perfect, from the New Deal until the 1970’s was a period in which pluralism was seen as an essential element of healthy democracy. And there was no more important element of pluralistic America than the labor movement.  At an elite level, a tripartite pluralism consisting of business, labor and government was seen as crucial for the nation’s prosperity and robust democracy. (For example, John Kenneth Galbraith, American Capitalism; The Concept of Countervailing Power and The New Industrial State.)

Unions demonstrated to ordinary people that community problems could only be solved by coming together; strength in numbers was more than a slogan, it was a democratic habit and the way America often functioned. This was a period of movements that led the way to the progress since eroded and continuously under siege.  The advances made on civil rights, women’s rights, environmental protection and limiting foreign military intervention and nuclear proliferation (for a time) reflected sustained collective action that required immense social capital built up from the myriad associations that were common at the time to cohere and a shared experience that government would be responsive.

That social capital and sense of agency is shot, demonstrated by our learned helplessness in the face of Trump’s shredding so much of what those movements delivered.  This Brookings’ Tracking Deregulation in the Trump Era provides a staggering inventory of decimation. For example, not only has Trump been dismantling the environmental regulatory system, the EPA has been routinely granting thousands of waivers and just not enforcing the law. And, almost without notice, the longstanding treaties and instruments to control nuclear proliferation have been discarded.

The rest of this Weekend Reading provides a guide to resources that demonstrate the ways in which an empowered workforce changes everything and concludes with key points about the PRO Act. 

Inequality

The labor movement plays many positive roles in democratic societies—but the most foundational is making sure that the people who do the work of society share in the wealth they create.  This is one of many charts the show the connection between corporate success weakening unions and the increasing share of income going to the top ten percent. 

Income inequality is the result of unequal power. It’s that simple. 

  • Unions, inequality, and faltering middle-class wages provides an excellent overview of much of the literature. 
  • This paper from Hank Farber, Daniel Herbst, IIlyana Kuziemko, and Suresh Naidu is just-revised and packed with terrific (and comprehensive) analysis of the relationship between unions and inequality.  It shows how the strength of unions and collective bargaining in the United States after World War II disproportionately benefited low wage workers and workers of color.  It remains the gold standard analysis so far of unions and economic outcomes over the long-run in the 20th century.  
  • Internationally, this report from the Organization for Economic Cooperation and Development (OECD) documents the positive effects of unions across the developed world.
  • This paper found that, “the decline of organized labor explains a fifth to a third of the growth in inequality” from 1973 to 2007. 

Democracy

As I said earlier, it is only recently that the accepted idea of that holding free and fair elections was the only requirement to qualify as a democracy. The degree to which people have collective agency in their daily lives determines the health of the society and the democracy. We don’t even notice the ways in which the law facilitates the affluent acting collectively, most notably through corporations. Or the ways in which the law inhibits everyone else from acting collectively. The following research develops that idea. 

  • Authoritarianism. This study in Nature showed that “Participatory practices at work change attitudes and behavior toward societal authority and justice.” Specifically, they found that “participatory meetings led workers to be less authoritarian and more critical about societal authority and justice, and to be more willing to participate in political, social, and familial decision-making.” It confirms earlier research here and here that unions fundamentally change members understanding of and expectations for the relations of power between themselves and their employers. 
  • Resistance to system justification. John Jost’s Theory of System Justification provides a powerful explanation of why oppressed people rarely rebel. Much more to come on this in future Weekend Reading and Open Mic. Relevant here is the theory’s logic, borne out in research that willingness to protest is much less a function of the extent of oppression than beliefs about group efficacy.  “Collective action is more likely when people have shared interests, feel relatively deprived, are angry, believe they can make a difference and strongly identify with relevant social groups.”
  • Responsive Congressional Representation.  This recent paper from Michael Becher and Daniel Stegmueller uses an impressive array of survey data and union membership data to show how the presence of stronger unions within U.S. House districts leads to more policy responsiveness for lower-income Americans (and less responsiveness for higher-income Americans), especially on economic issues.
  • Protest. This paper by Greg Lyon and Brian Shaffner documents how unions increase protest activity among non-members through social ties, especially relevant for thinking about how unions have seeded and supported recent protests.

Racism

Although very far from perfect, and especially in its origins often an accomplice to segregation and racism, the union movement has also been an essential partner in dismantling elements of systemic racism.  In Racial Realignment: The Transformation of American Liberalism, 1932-1965, Eric Schickler recovers the importance of the partnership between the Congress of Industrial Organizations (CIO) and the Civil Rights movement.   The solid segregationist South initially supported most of the early New Deal’s pro-worker legislation, including the Wagner Act. However, once the CIO began multi-racial organizing efforts in the South, Southern Democrats turned on the labor. Over the next several decades, the Civil Rights movement and the CIO the power of the Southern wing inside the Democratic Party, succeeding in adopting a Civil Rights plank at the 1948 Democratic Convention that triggered Thurmond’s third party candidacy that year which carried Alabama, Louisiana, Mississippi and South Carolina. Speakers at the March on Washington included A. Philip Randolph and Walter Reuther. 

Furthermore, union membership increases racial tolerance. For example, this paper from Paul Frymer and Jake Grumbach uses survey data to show how union membership leads to more tolerant views of racial minorities among white workers, and is an important reminder of the spillover effects of unions on many other attitudes and preferences beyond economic policy.

Politics

Many have written about the role of unions in politics. Tom Edsall makes the point, obvious to Grover Norquist, business and the right wing, but somehow obscure to many Democrats and progressives, that gutting the labor movement would mean that, “the modern Democratic Party will cease to be a competitive power in American politics.” Republicans wasted little time after their state electoral sweep in 2010 to attack unions, beginning in Wisconsin.  The recent book, State Capture, tells this story.  

Numerous studies document the connection between union strength Democratic and progressive political impacts. Union members vote more Democratic than their neighbors. Nate Silver (2008) and Harry Enten (2012) write about how consequential that gap was, accounting for about 1.7 points of Obama’s margin in both elections. After controlling for other demographics they found that union membership was one of the most important variables. Thus, it is not surprising that fewer union members = fewer Democrats:

  • Right to Work. In this 2018 study, Alexander Hertel Fernandez carefully examined the impact of the passage of Right to Work laws and concluded that Democrats pay an average of a 3.5 point penalty after passage. They attribute that to lower union density, less political activism and collateral impacts on family and neighbors.  Data for Progress takes a different approach, and finds the same result. Instead of looking at RTW, they create a time series relating union density to congressional vote for each of the 50 states. As union density in a state declines, so does the Democratic vote share. It’s a very steep curve after 1990.   (Includes density-Democratic vote graphs for every state.)
  • Fewer Resources for Politics. Both the OpenSecrets and FollowTheMoney websites track union giving. For example, the 2018 election cost $2.1 billion more than 2010, but union spending increased by only $81 million. That was the pattern at the state level as well. That said, unions are still a very significant share of independent spending.

So, while Democratic strategists obsess in their search for the message or counsel a “cultural” conservatism that will get a few more working class votes, they ignore the evidence that increased union membership would provide a much greater and durable increase in Democratic support.  

THE PRO ACT

The PRO Act is the most significant worker empowerment legislation since the Great Depression because it will:

  • Empower workers to exercise our freedom to organize and bargain. 
  • Ensure that workers can reach a first contract quickly after a union is recognized.
  • End employers’ practice of punishing striking workers by hiring permanent replacements. Speaking up for labor rights is within every worker’s rights—and workers shouldn’t lose our jobs for it.
  • Hold corporations accountable by strengthening the National Labor Relations Board and allowing it to penalize employers who retaliate against working people in support of the union or collective bargaining.
  • Repeal “right to work” laws—divisive and racist laws created during the Jim Crow era—that lead to lower wages, fewer benefits and more dangerous workplaces.
  • Create pathways for workers to form unions, without fear, in newer industries like Big Tech.

Click here for the AFL-CIO’s PRO Act toolkit.   Click here for the Economic Policy Institute’s Why unions are good for workers—especially in a crisis like COVID-1912 policies that would boost worker rights, safety, and wages.

Politico writes that Senator Bernie Sanders deserves credit for key features of the $1.9 trillion Biden plan and for encouraging Biden not to compromise with moderate Republicans who offered a $900 billion plan.

Politico said:

 Sen. Joe Manchin (D-W.Va.) played the most dramatic role during the passage of the Covid relief bill into law. But the senator with the greatest imprint on the script itself was his colleague on the opposite end of the Democratic ideological spectrum: Bernie Sanders (I-Vt.). 

Sanders’ influence on the most ambitious piece of domestic legislation in a generation is evident in several places, particularly the guaranteed income program for children, the massive subsidies for people to buy health care, the sheer size of the $1.9 trillion measure and the centerpiece of it — direct checks to working Americans. 

But the specifics of the law tell only part of the story. The calculus by which the legislation was crafted and passed — a belief that popular bills endure more than bipartisan ones — is quintessentially Sanders. And it raises a thought-provoking question: Has any elected official in American history had such a profound influence on a major political party without ever formally joining it? 

Six years ago, Democrats were in a different place. Austerity politics were still gripping parts of the party. The ambitious agenda items were more social than economic: immigration reform, gun control, police reform after Ferguson. And in a few months time, the Republican Party’s presidential nominee would make serious inroads among the white working class voters who had served as the bedrock for Democrats for decades. 

Within that landscape, Sanders was a throwback: a labor-oriented big-government liberal who seemed like more of a gadfly than a serious player. He was known for passing little-noticed amendments but also found a knack for making well-noticed public spectacles, often as acts of disagreement with the Obama White House on items like domestic surveillance laws and the extension of the Bush tax cuts. As his following picked up, a depiction of him emerged as an ideologue who valued ideological purity over progress and was content to undermine a historic president in the service of it.

That never jibed with reality. Though admittedly stubborn, Sanders voted often for major bills that fell short of his ambitions (Obamacare), cut deals that went against his ideology (VA reform), and made sure his public shows of opposition didn’t actually turn into catastrophes for the Democratic Party. When his legislative white whale (a $15-an-hour minimum wage hike) was nixed by the parliamentarian a few weeks back, he could have insisted that his fallback option be given a vote. He didn’t, calculating that it wasn’t worth jeopardizing or delaying the entire enterprise over the minimum wage. As one Sanders aide described it: “He knows when to throw down and when it’s time to get s— done…”

The Democratic Party today holds razor-thin majorities in both chambers and is helmed by a president who might have been the most moderate of the 20 or so candidates who ran in the primary. And yet every single member — save one in the House — voted for a nearly $2 trillion deficit-financed bill that sends money without strings attached to the poorest Americans, all while embracing a unionization effort targeting the biggest e-commerce giant in the world and entertaining a $4 trillion follow-up bill to revamp American infrastructure that will likely include tax hikes on the rich. If Sanders was just a touch more extroverted, we’d likely see signs of euphoria in Burlington.

Of course, credit (or, if you’re so inclined, blame) isn’t his alone. The enlarged child tax credit has been the project of countless Democrats, including Rep. Rosa DeLauro (D-Conn.). The bill’s $86 billion bailout for multi-employer pensions was spearheaded by Sen. Sherrod Brown (D-Ohio). And none of it would have been possible without twin Senate wins in Georgia or Biden’s insistence that he needed to go big out the gate. 

But, it’s worth recalling, that Biden easily could have charted a bipartisan approach instead. In early December, Manchin and Sen. Mitt Romney (R-Utah) announced the outlines of a $900 billion relief bill of their own, with a splashy Washington Post op-ed framing it as the logical step toward ideological comity. Five other senators in the Democratic caucus were on board with the idea

Sanders rejected the proposal out of hand. His move sent an early signal to the White House that it would have to scramble for votes even on a center-of-the-road approach. Weeks later, the Georgia election happened, Biden stuck to the script that bigger was better, and the pieces of a $1.9 trillion package — upon which the success of the Demcratic Party now hangs — fell into place.

Sheelah Kolhatkar, a staff writer for The New Yorker, describes the most remarkable part of the Biden COVID rescue plan: its income payments for children. The fate of this experiment depends on electing enough Democrats in 2022 to extend it into the future and convincing Republicans that the program is so popular that they should support it. Now that the legislation has been passed, Biden must work hard to forge a bipartisan coalition to make it permanent.

On Tuesday, March 9th, Amy Castro Baker stood on her front porch and watched as her two teen-age children boarded a bus and went off to school together for the first time in a year. Her sense of relief was profound. Baker, a researcher of economic mobility and an assistant professor at the University of Pennsylvania’s School of Social Policy & Practice, had been through a challenging period familiar to most parents—and especially to working mothers. For the past year, she had balanced the demands of a full-time job with overseeing her kids’ online schooling, while also cooking, cleaning, and running the household as a single parent. “We’re at the point in my home where it’s a choice between what’s higher risk, covid or my kids’ mental health,” Baker said. “I’m not sure I could have handled another month.” These are the kinds of difficulties that the American Rescue Plan, the $1.9-trillion pandemic-relief bill recently passed by Congress, was designed to address. Benefits in the bill could help millions of families who are facing similar challenges and are living under much greater financial precarity.

The bill, which was signed by President Joe Biden on Thursday, offers a variety of benefits intended to address economic hardship caused by the pandemic. No Republicans voted for the legislation, largely based on the argument that the pandemic will end soon and the economy doesn’t need the help. And it’s true that some aspects of the legislation go beyond the demands of the pandemic, addressing economic disparities that existed before covid-19 hit. The bill includes provisions to give one-time, fourteen-hundred-dollar payments to individuals earning fewer than eighty thousand dollars a year, and to increase unemployment insurance by three hundred dollars per week until early September. But it is the plan’s expanded, fully refundable child tax credit—which is worth thirty-six hundred dollars for each child under age six and three thousand dollars for those aged six to seventeen—that has the greatest potential to change the way that the United States addresses poverty.

A typical child tax credit can only be claimed by people earning enough money to pay taxes in the first place, which excludes those with an earned income of fewer than twenty-five hundred dollars—in other words, those in the most dire need. The new child tax credit works differently: starting in July, the federal government will send cash each month, until December, to parents for every child that they have regardless of the family’s employment status, and the remaining balance will be disbursed once families file their taxes next year. “It will actually maintain and lift living standards for millions of women and their children,” Heidi Shierholz, a senior economist and director of policy at the Economic Policy Institute, told me, adding that she hopes the credit will eventually become a permanent benefit. “There’s also a massive racial-justice angle here, too. This will disproportionately help families of color, and it will disproportionately bring Black kids and Hispanic kids out of poverty. This is groundbreaking.”

In some ways, the credit resembles much debated proposals to set up a universal-basic-income program, which would send cash to families every month to help them get by. Such a program never seemed possible in the United States, but lessons from the 2008 financial crisis, the Trump Presidency, and the pandemic have changed what policymakers are willing to try. “It signals a turn in the way that we approach alleviating poverty and supporting the unpaid care work of women that makes the economy move,” Baker told me.