Secretary of Labor Thomas Perez speaks to business and community leaders at a Los Angeles Area Chamber of Commerce event in Los Angeles on Monday. (Nick Ut / Associated Press)
On August 19, 2014, Tifany Hsu and Chris Kirkham write in the Los Angeles Times:
At the Los Angeles Area Chamber of Commerce this week, U.S. Labor Secretary Thomas Perez kicked off a cross-country, pre-Labor Day tour to champion higher minimum wages, higher-wage jobs and other causes in talks with employers, workers and local leaders.
Perez told the chamber audience at a luncheon Monday that the nation faced two major challenges — a stagnation in wage growth and the increase in long-term unemployed workers. He also noted the decline in the unemployment rate and improving prospects for skilled manufacturing.
Before taking his post a year ago, Perez was the assistant attorney general for the Justice Department’s civil rights division, where he led investigations into the death of unarmed Florida teenager Trayvon Martin and alleged police misconduct in the wake of Hurricane Katrina in New Orleans.
He also spoke with Times reporters and editors. Here is an edited version of that interview:
Why is there so much attention on pay for entry-level jobs as opposed to moving workers into better jobs?
All of the billion dollars we’ve been giving out is designed to strengthen the ladders of opportunity to the middle class. The CareerConnect grant is all about training people in STEM [science, technology, engineering and mathematics] fields so people don’t graduate from high school and go right to fast food.
They go out of high school with the skills that enable them to maybe go to work at Siemens and move up the ladder there or maybe get their four-year degree or associate’s degree. It’s all about building well-paying jobs.
At the same time, I’m proud of the work we’re doing on minimum wage. You can’t live on $7.25 an hour, and that’s a fact.
So what’s next on that front?
The best approach is to have a federal floor and have that floor be a floor of decency — $7.25 is not a floor of decency. And then state and local governments should have the authority to do what they think is most responsive to local needs.
You look at Washington state, which has had the highest minimum wage in the country for 15 years, and their tipped workers are on par, just like California.
If the opponents of an increase in the minimum wage were correct, then every time you fly to Seattle, you’ve got to bring a bagged lunch because there shouldn’t be any restaurants because they should have all have gone out of business as a result of raising the minimum wage.
But if you look at their numbers on job creation, they have been well above the national average consistently over the years.
Where are the jobs going, who’s creating them and where are the needs?
Let’s take the manufacturing sector, for instance. The difference between Buffalo, N.Y., in the ’70s and ’80s is that you had the 20,000-person Bethlehem Steel, Republic Steel [plants], and a 10th-grade education bought you a ticket to the middle class.
The growth we’re seeing in manufacturing today is real and it’s sustainable, and it will be here for decades to come. The difference now is that a 10th-grade education isn’t going to be sufficient. You go to the assembly line at Siemens in North Carolina, and you see people walking around with iPads. You go to the assembly line in Louisville, Ky., at the Ford plant, and every person on that assembly line has the ability to shut the line down.
In today’s advanced manufacturing, you’re not going to get the 20,000-person plant, so we’ve got to be really smart about clustering and understanding what the needs are. You don’t need a college degree to work at Siemens, but you need proficiency with a computer, you need high school plus.
Many economists in Southern California, though, say that manufacturing jobs are gone and they’re not coming back.
I tend to disagree with that. I heard that in Youngstown; I heard that in Detroit. And then I see what’s happening now. I see a rebirth. It’s not a rebirth of the scale that we saw in the early 20th century. But the world of advanced manufacturing is a world of great potential for U.S.-based manufacturers — and I see no reason why Los Angeles can’t grow.
In almost every other respect, when I look at the numbers and I break down the numbers in L.A., it pretty much mirrors what I see nationally. For instance, business and professional services are the biggest job growth in the last year, and that’s one of the biggest growth areas in Los Angeles. Hospitality has been a big growth area, and similarly in Los Angeles.
I don’t know the answer [about why L.A.’s manufacturing isn’t growing]. It would be rank speculation as to why L.A. hasn’t seen the same benefits that I see elsewhere. I just have every reason to believe that this is something that can be turned around.
On efforts to employ those coming out of prison, are the Labor and the Justice departments spending money on training programs or funding employers’ efforts to hire ex-offenders?
It goes to entities that have a demonstrated expertise in the placement of ex-offenders, in developing effective programs.
For instance, when I was with the [U.S.] attorney general, we were at the county jail in Montgomery County, Md. We put an American jobs center in the jail because the county jails are where the majority of people actually come out of prison across the country.
We’re going to award grants in a competitive process to 10 city or county jails over the next year to replicate that.
It’s a smart business decision. People in the skilled trades, where there are major shortages, they don’t care if you have a record. They care if you’re going to show up and be good, and if you have the talent.
Does the administration have a position on the effort to remove questions about past convictions from job applications?
I don’t know if we’ve articulated a formal position. I support ban-the-box movements. Baltimore city has a ban the box. I know [Los Angeles] Mayor [Eric] Garcetti supports it as well.
I think they’ve been proven to be very effective. And I think opponents sometimes mischaracterize those provisions and say, ‘Oh, well, the child care center has to hire a pedophile.’ Of course it doesn’t require that to happen. But what does happen is people can get through the process and be considered.
Baltimore city has it, and [Johns] Hopkins [University] is the most prolific employer in Maryland, not to mention Baltimore city. And it has not gotten in the way at all. What it has done, is it has opened up opportunities for folks who might not have otherwise been considered. I think it’s a common-sense measure that doesn’t unduly tie the hands of employers.
Vocational or technical education is being raised more regularly as an alternative to college. Still, high schools have pushed college prep curricula. Is there a disconnect between the Department of Labor and the Department of Education?
The thing I always tell parents and school superintendents when we talk about career and technical education is that it gets you on the higher education superhighway.
So when that mom says, ‘My kid isn’t going to go into one of these programs; he’s going to get a college degree,’ well, when you complete an apprenticeship program, you are 75% of your way to an associate’s degree and it’s a stackable credential.
There are really good jobs out there, folks making on average something like $25 an hour. That’s pretty good money for someone who’s 21, 22 years old and coming out of a program.
We’ve got to understand as we prepare today and tomorrow’s workforce that we’ve got to start at pre-kindergarten, but we’ve also got to recognize that there are millions of people for whom the K-12 system is way in the rear-view mirror.
For some people, college is the answer, and for other people, there are other answers that are equally rewarding.
The “billions of dollars” given out is not strengthening the “ladders of opportunity to the middle class.” The problem is that our leadership and the American people ONLY focus on job creation and training, but are blind to the reality that tectonic shifts in the technologies of production are constantly destroying jobs and devaluing the worth of labor. As such, even if EVERY citizen obtained a doctorate’s degree, there would not be enough job opportunities available to employ every person who was willing and able to work.
Increasing wages for the same or less amount of labor input is non-sustainable and inflationary.
The solution is to focus on OWNERSHIP creation of wealth-creating, income-producing non-human capital assets––the product of technological innovation in the form of tools, machines, structures, super-automation, robotics, digital computerized operations, etc.
It should alarm all Americans that the traditional full-time job is fast disappearing along with the absence of pensions and the inadequacy of 401(k) retirement portfolios, while the expense of healthcare continues to skyrocket. As job insecurity and unemployment continue to be destroyed by tectonic shifts in the technologies of production, which replaces humans with “machines” as the primary factor or means of producing products and services, life for millions of America has become and is rapidly becoming a game of survival.
While the deterioration of job opportunities continues, the American consumer is being put into an impossible situation of being asked to consume more to drive the economy and reduce saving, and at the same time are being told they must reduce consumption dramatically in order to accumulate sufficient savings for retirement.
Of course, the whole problem would go away if we financed both retirement and wealth-creating, income-producing physical productive capital needs out of “future savings,” thereby increasing the capacity to consume and support the economy while simultaneously building financial security for every American citizen.
“Future savings” means financing future investment in capital asset formation on a self-financing, self-liquidation basis in which the investment generates dividend earnings enough to pay off insured, interest-free capital credit loans and once paid off, continues to produce income for the new owners.
This far better and productive approach would create a new way for working and non-working Americans to start their own retirement savings: MyCHA. CHA stands for Capital Homestead Account. It would be a super-IRA or asset tax shelter for citizens. The Treasury should start creating an asset-backed currency that will enable every child, woman and man to establish a CHA at their local bank to acquire a growing dividend-bearing stock portfolio comprised of newly-issued stock representative of viable American growth corporations to supplement their incomes from work and all other sources of income.
We can create new asset-backed money for investment through the existing but dormant Section 13(2) rediscount mechanism of each of the 12 regional Federal Reserve banks that would be backed by “future savings” (that is, future profits from higher levels of marketable goods, products, and services).
The CHA would function as a savings and income account that effectively would build a nest egg over time, using interest-free, insured capital credit loans. A CHA would be offered to EVERY American, whether employed or not. Of course, those employed may also have additional opportunities to acquire personal ownership in their companies using an Employee Stock Ownership Plan (ESOP) trust financial mechanism.
The CHA would process an equal allocation of productive credit to EVERY citizen exclusively for purchasing full-dividend payout shares in companies needing funds for growing the economy and private sector jobs for local, national and global markets. The shares would be purchased on credit wholly backed by projected “future savings” in the form of new productive capital assets as well as the future marketable products and services produced by the newly added technology, renewable energy systems, plant, rentable space and infrastructure added to the economy. Risk of default on each stock acquisition interest-free loan would be covered by private sector capital credit risk insurance and reinsurance, but would not require citizens to reduce their funds for consumption to purchase shares. There would be no prerequisite requirement to qualify for an annual set capital credit loan other than American citizenship.
The idea is to stimulate economic growth to build a future economy that can support general affluence for EVERY citizen and provide retirement security for EVERY American.
The solution is based on the premise that what is needed is for the system to facilitate spreading the ownership of productive capital more broadly as the economy grows with full payout of dividend earnings, without taking anything away from the 1 to 10 percent who now own 50 to 90 percent of the corporate productive capital wealth assets. In doing so, the ownership pie would desirably get much bigger and their percentage of the total ownership would decrease, as ownership gets broader and broader.
This would benefit the traditionally disenfranchised poor and working and middle class, who are propertyless in terms of owning productive capital assets. It would also result is tremendous economic growth, which would benefit everyone including the already wealthy ownership class, and create opportunities for real jobs, not make-work as an expanded economy is built that can support general affluence for EVERY American citizen. Thus, as productive capital income is distributed more broadly and the demand for products and services is distributed more broadly from the earnings of capital, the result would be the sustentation of consumer demand, which will promote economic growth. That also means that over time, EVERY child, woman and man could accumulate a diversified portfolio of wealth-creating, income-producing productive capital assets to provide economic security in retirement and not be dependent on having to work during retirement or rely on government-assisted welfare.
One might ask how we failed to grasp the significance of productive capital’s input and the necessity for broad private sector individual ownership? Unfortunately, ever since the 1946 passage of the Full Employment Act, economists and politicians formulating national economic policy have beguiled us into believing that economic power is democratically distributed if we have full employment––thus the political focus on job creation and redistribution of wealth rather than on full production and broader productive capital ownership accumulation. This is manifested in the belief that labor work is the ONLY way to participate in production and earn income. Yet, the wealthy ownership class knows that this notion is idiotic.
In real productive terms, productivity gains are the result of tectonic shifts in the technologies of production, which consequently eliminates the need for human labor, destroys jobs, and devalues the worth of labor.
One should ask what form would the structural reforms take. Employment in this new enlightened age would start at the time one enters the economic world as a labor worker, to become increasingly a productive capital owner, and at some point to retire as a labor worker and continue to participate in production and to earn income as a productive capital asset owner until the day you die. As a substitute for inheritance and gift taxes, a transfer tax would be imposed on the recipients whose asset holdings exceeded $1 million. This would encourage those owning concentrations of productive capital assets (effectively the 1 to 10 percent) to spread out their monopoly-sized estates to all members of their family, friends, servants and workers who helped create their fortunes, teachers, health workers, police, other public servants, military veterans, artists, the poor and the disabled.
Other stipulations for the structural reform would entail tax policy reform to incentivize corporations to pay out all profits to their owners as taxable personal incomes to avoid paying stiff corporate income taxes and to finance their growth by issuing new full-dividend payout shares for broad-based individualized employee and citizen ownership with full-voting rights.
We need to encourage the insurance industry to expand their product lines to market Capital Credit Insurance to cover the risk of default for banks making loans to Capital Homesteaders under the proposed Capital Homestead Act. Under the provisions of the Act, risk of default on each stock acquisition loan would be covered by private sector capital credit risk insurance and reinsurance issued by a new government agency (ala the Federal Housing Administration concept), but would not require citizens to reduce their funds for consumption to purchase shares.
The end result is that ALL American citizens would become empowered as owners to meet their own consumption needs and government would become more dependent on economically independent citizens, thus reversing our country’s trend where all citizens are becoming more dependent for their economic well-being on the “state,” our only legitimate social monopoly.
Implementing the Capital Homestead Act would significantly empower ALL Americans to accumulate over time a viable, diversified ownership portfolio in our nation’s growth companies and create a truly unique, global-leading just and environmentally responsible Ownership Society that fosters personalism, creativity and innovation. Embarking on a new path to prosperity, opportunity and economic justice will expand growth of our market economy in ways that democratize future ownership opportunities, while building a future economy that can support general affluence for EVERY American.
For more on how to accomplish such structural reform, see “Financing Economic Growth With ‘FUTURE SAVINGS’: Solutions To Protect America From Economic Decline” at NationOfChange.org http://www.nationofchange.org/financing-future-economic-growth-future-savings-solutions-protect-america-economic-decline-137450624 and “The Income Solution To Slow Private Sector Job Growth” at http://www.nationofchange.org/income-solution-slow-private-sector-job-growth-1378041490.
Support the Capital Homestead Act at http://www.cesj.org/homestead/index.htm and http://www.cesj.org/homestead/summary-cha.htm
Support the Unite America Party Platform, published by The Huffington Post at http://www.huffingtonpost.com/gary-reber/platform-of-the-unite-ame_b_5474077.html as well as Nation Of Change at http://www.nationofchange.org/platform-unite-america-party-1402409962 and OpEd News at http://www.opednews.com/articles/Platform-of-the-Unite-Amer-by-Gary-Reber-Party-Leadership_Party-Platforms-DNC_Party-Platforms-GOP-RNC_Party-Politics-Democratic-140630-60.html.
