Senator Rubio: Wrong Diagnosis, Wrong Policy Prescriptions
In a teaser for a talk he gave yesterday about poverty and the congressional fight over Emergency Unemployment Compensation, Sen. Marco Rubio’s office circulated a ‘fact sheet’ that was as ill-informed and self-contradictory as the speech that followed it. For example, the fact sheet said we need unemployment assistance, but hinted that it shouldn’t be in the form of weekly benefit checks:
“Unemployment assistance must remain an important part of our social safety net, but these programs have to do more than simply provide a paycheck; they must be reformed to help people secure middle class jobs. … [W]e should redirect funds away from the federal government and steer them directly to states, while at the same time incentivizing work through a new, direct wage enhancement credit for lower income workers and the working poor.”
Unemployment insurance does not, in fact, have to do more than provide a check. It is intended to do one very important thing: provide income to people who have lost jobs through no fault of their own while they continue to search for new employment. It is not job training. It won’t provide a college degree or a license to practice a profession. It’s meant to keep people in their homes with food on the table until they can find a new job. And finding a job isn’t easy when there are three workers searching for each vacant position. UI has an ancillary benefit, in that it increases aggregate demand and supports jobs that would be lost without it, but its fundamental purpose is to help deserving people survive hard times with dignity. And that benefit depends precisely on checks being sent to the jobless, cashed, and spent.
Sen. Rubio said yesterday that he wants to redirect funds from the federal government to the states to help people find jobs, yet that is exactly what the federal job search and job training programs actually do. The Workforce Investment Act sends about 80% of its funds directly to the states, but those funds have been declining thanks to budget cuts voted for by Sen. Rubio and his colleagues.
Should the states have “wage enhancement credits” to make low wage jobs pay more? Sen. Rubio thinks the federal government is too bureaucratic and proscriptive, but he wants to force Massachusetts and Minnesota—and every other state—to provide these credits whether they want to or not. It’s a little hard to square with his states’ rights rhetoric. It’s also hard to see how the “federal wage enhancement for qualifying low-wage jobs” he calls for is an improvement over the EITC. If anything, it promises more bureaucracy since someone will have to determine whether each employee is in a “qualifying” job—a requirement the EITC does not impose.
Low wage jobs are being created in large numbers. What’s needed is to raise wages and create more middle class jobs that pay $20 an hour or more and have decent benefits. There are some concrete ways to do this. One is to rebuild our manufacturing base, which Sen. Rubio ignores. Another is to restore the right to choose to bargain collectively with your employer. After all, unions turned poor jobs into middle class jobs, from steel mills to slaughtering plants, from truck driving to construction. Another would be a substantial increase in the minimum wage, which Sen. Rubio scorns because, he says, “having a job that pays $10 an hour is not the American Dream.” Clearly, however, $10 an hour is a lot closer to the American Dream than $7.25, and the nation can create more good jobs while simultaneously making sure no one is forced to work in jobs that pay too little to survive.
The problem is less the jobs people do than the wages their employers are willing to pay them. CEO pay has increased astronomically since the Rubios arrived in Florida from Cuba, while average workers have been left behind. Until low-wage and middle class Americans are paid better for the work they do, which might require a substantial trimming of CEO pay, inequality and poverty will continue to worsen.
Sen. Rubio’s prescriptions for ending poverty are wrong because his diagnosis of our economic problems is wrong. He blames “a lack of education,” yet American workers are better educated by every measure than they were when his parents came to the United States and succeeded. More Americans complete high school, three times as many have a college education, and many more have a graduate education than in the 1950s when his parents immigrated or when they became citizens in 1975. He blames the federal government and “an expensive tax code,” even though the top individual income tax rate is less than half what it was in 1975 and corporate taxes as a share of the economy are only a third as large. He blames the national debt, even though it was larger as a share of the economy in the decade following World War II than it is today and both income and employment growth were phenomenally strong.
We won’t create the good jobs we need without rebuilding our manufacturing industries and our infrastructure, giving workers a stronger voice and real power in the wage-setting process, and reining in CEO pay. We also need to enforce the labor standards we have and strengthen them, starting with a minimum wage increase to $10.10 an hour. We won’t achieve the American Dream in one step, but we have to start down the right road, and the time to start is now.