The hot debate over whether the new iPhones incorporate substantial improvements, or will spur even larger profits for Apple, misses a fundamental point. Whether or not the iPhones constitute a breakthrough for Apple’s business, their production process does not constitute a breakthrough for the workers making them. Despite an 18-month old highly-publicized commitment by Apple to dramatically reform working conditions in its supply chain, these conditions still include widespread abuses of labor laws and common decency, as well as widespread violations of Apple promises and its supplier code of conduct. Three of the latest undercover investigations by China Labor Watch and a recent review of Apple reform promises I conducted with Scott Nova of the Workers Rights Consortium support this conclusion.

The first of the China Labor Watch studies was an in-depth investigation of conditions for workers making the new iPhones at Apple’s second largest supplier, Pegatron. The study, released July 29, found Pegatron in violation of 17 specific commitments made in Apple’s supplier code of conduct, and 86 labor rights violations overall in areas such as hiring practices, wages, hours worked, and living conditions. As one illustration, Apple has touted its success in ensuring that workers in its supply chain work no more than 60 hours a week, a dubious accomplishment at best, since the limit under Chinese law is 49 hours a week. China Labor Watch found even this weak standard has not been achieved.  At the three Pegatron factories examined, the average number of hours worked ranged from 66 to 69 hours per week, and in at least one factory these excessive hours were concealed because workers were forced to sign false time sheets.

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This is a big week for those interested in the Federal Reserve—which should be everybody. The Fed has been the only economic policymaking institution with any real power that has been actively trying to lower unemployment and push the economy back to full recovery from the Great Recession over the past two years. If you’re looking for a job, more hours, or the confidence that you can ask your boss for a raise and might actually get it (because there aren’t three well-qualified but jobless people lined up outside to take your slot), you really should be interested in the Fed and what it’s doing.

The first bit of big Fed news is Larry Summers’ withdrawing from consideration to replace Ben Bernanke as the next Chair of the Federal Reserve. This seemingly clears the way for Janet Yellen—the current Vice-Chair of the Fed—to be offered the position. If Yellen is not offered the slot, it would be a bizarre and consequential mistake. She is eminently qualified for the job, and, most importantly right now, she has the correct diagnosis for what is keeping the U.S. economy from full recovery from the Great Recession (a continuing shortage of aggregate demand) and is committed to using the Fed’s power to hasten this recovery (by continuing its program to buy assets to keep interest rates low and inflation expectations from falling).

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The U.S. Department of Labor issued final regulations today that extend minimum wage and overtime protections under the Fair Labor Standards Act to about two million previously excluded home care workers—personal care assistants for the frail elderly and the disabled, home health aides, and other direct support paraprofessionals working in the homes of patients and clients needing personal help with needs ranging from changing the dressings on wounds and administering non-injectable medications to personal hygiene and ambulation. The home care workforce is growing fast as the population ages and more people are cared for in their homes, rather than in costlier institutional settings. These jobs need to be decent jobs that pay a living wage.

Although domestic workers, like nannies, chauffeurs and housekeepers, were first covered by the FLSA in 1974, most home care aides have been excluded from minimum wage and overtime protections by the Act’s vague “companionship” exemption, which was never meant to cover people providing services for pay, while in the employ of a third party, rather than in a direct relationship with the patient or elderly client. An agency—and there are very large agencies, some employing tens of thousands of home care workers—could therefore ignore FLSA rules about paying for travel time when an aide moved between one client’s home and another’s, ignore the rules governing break time, and avoid paying time and a half for overtime when an aide worked more than 40 hours in a week. Some employers have even paid less than the miserably low federal minimum wage of $7.25 an hour.

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Modest income growth in 2012 barely begins to offset lost decade driven by financial crisis and decade-long wage stagnation

This morning, the Census Bureau released its report on income, poverty, and health insurance coverage in 2012. It shows that from 2011 to 2012, median household income for non-elderly households (those with a head of household younger than 65 years old) increased 1.0 percent from $56,802 to $57,353. However, that modest growth barely begins to offset the losses incurred during the Great Recession. Between 2007 and 2011, median household income for non-elderly households dropped from $62,617 to $56,802, a decline of $5,815, or 9.3 percent. Furthermore, the disappointing trends of the Great Recession and its aftermath come on the heels of the weak labor market from 2000-2007, where the median income of non-elderly households fell significantly, from $64,843 to $62,617, the first time in the post-war period that incomes failed to grow over a business cycle. Altogether, from 2000 to 2012, median income for non-elderly households fell from $64,843 to $57,353, a decline of $7,490, or 11.6 percent.

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Brad DeLong recently wrote an excellent piece contrasting the “Banking Versus Macroeconomics” camps in assessing how the U.S. responded to the financial crisis that peaked with the uncontrolled bankruptcy of Lehman five years ago. A quick summary:

“One camp, call it the Banking Camp, sees a central bank as a bank for bankers: its clients are the banks…and its functions are to support the banking sector and …to ensure that there is enough credit and liquidity in the economy that mere illiquidity rather than insolvency does not force banks into bankruptcy and liquidation. 

Another camp, call it the Macroeconomic Camp, sees a central bank… as the steward of the economy as a whole, with its primary responsibility not to preserve the health of the businesses that make up the banking sector but rather to maintain the health of the economy as a whole.”

This is a useful dichotomy, and one that can help explain differing assessments of how policymakers responded to the Global Financial Crisis of 2007/08.

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I don’t mean to pick on Joel Klein, the former New York City schools chancellor, but he has made himself such a caricature of self-styled school reformers who are undermining American public education that it would be a mistake not to respond to the claims on which he bases his efforts.

Last year, I addressed Mr. Klein’s conclusion that public education must be failing because he himself grew up in public housing as a “kid of the streets,” yet owed his success to great public schools; and if only children from public housing projects today had schools as good as his, they too would be successful.

The analysis, it turned out, was misleading. The New York City public housing in which the Klein family lived in the 1950s was segregated, constructed for white middle class two-parent households where the husband had a stable employment history and where market rents were charged with no public subsidy. Such housing projects no longer exist, and the conditions in which Joel Klein grew up bear no resemblance to those from which minority children in impoverished families come to school today.

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Vincent Gray’s statement in support of his veto of the Local Retailer Accountability Act was a collection of non-sequiturs, half-truths, vague promises, and nonsense. He divides his critique of the LRAA into six sections.

1. “The bill is not a living wage bill because it would raise the minimum wage only for a small fraction of the District’s workforce.” The Mayor says he wants, instead, “to raise the minimum wage for all District residents.” Of course, the District could do both: require a higher minimum wage for billion-dollar corporations and a lower one for other businesses, including mom and pop stores. But the fact is that Mayor Gray hasn’t put forward any minimum wage increase, and the level that Councilmember Tommy Wells has suggested is $10.25—far below a “true living wage.” Each member of a 2-parent family with two kids would need to earn nearly $20 an hour to have a true living wage in the District.
2. “The bill is a job killer, because nearly every large retailer now considering opening a store in the District has indicated they will not come here or expand here if this bill becomes law.” The Mayor should identify the expansions Target, Home Depot, Wegmans, Lowe’s, Walgreens, Harris Teeter, AutoZone and Macy’s will make if the bill doesn’t pass. If they have such plans, why haven’t they announced them? And how credible is this threat? What billion-dollar retailer would invest here with a minimum wage of $10.25 an hour but not with a minimum wage of $12.50 that gives a credit for other benefits? The Mayor is either being dishonest, or gullible, or is simply unwilling to stand up to corporate bullies.Read more

Here’s what we read today. Did we miss anything good? Let us know in the comments.

• Why Janet Yellen, Not Larry Summers, Should Lead the Fed (New York Times)
• How High 401(k) Fees Can Doom Your Retirement Plans (Slate)
• Dying Not Under a Bridge, Nor Living in an E.R. (The Atlantic)
• Public Universities Funding Less Low-Income Students Nationwide (Color Lines)
• Carwash Workers and Capitol Hill: Immigration in Limbo (In These Times)
• At Grandmother’s House We Stay (Pew Research)
• Problem of unpaid internships in Ontario is ‘massive,’ says student group (Toronto Star)
• Wynne Godley’s Crucial Warnings About the Trade Deficit Still Ignored (AmericanEconomistAlert.org)

If House Republicans were at all serious last July, then they should be putting the finishing touches on their “menu” of social welfare spending cuts that they plan to force the president to choose from in exchange for an increase in the debt limit. Presumably, with this “menu,” a large increase in the debt ceiling would require a large reduction in social welfare spending while a small debt ceiling increase would require a smaller spending cut. This means that House Republicans are again preparing to risk America’s credit rating to eviscerate important and popular programs such as Social Security and Medicare.

I recently showed that the rise in social welfare spending since 1975 was due to: (1) the steady rise in federal health spending, driven in large part by increasing costs in the private-sector delivery of health care goods and services, and (2) the jump in safety net spending during the 2007-2009 Great Recession as programs like unemployment compensation and SNAP  expanded (both because the recession pushed more people into eligibility and because Congress temporarily expanded the programs to blunt the impact of the downturn). Social welfare spending has fallen relative to GDP in the past couple of years as the economy slowly recovers, yet the unemployment rate is still over 7 percent, nearly 40 percent of the unemployed have been looking for work for over 6 months, and the labor force participation rate is at a 35 year low.

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