The Power Behind a Clean Energy Future
Posted on Jul 6, 2011
Truthdig Radio airs every Wednesday at 2 p.m. in Los Angeles on 90.7 KPFK. If you can’t listen live, starting on Wednesday nights look for the podcast and transcript of each week’s show right here on Truthdig.
This week on Truthdig Radio in collaboration with KPFK: Why a battery breakthrough is the key to clean energy; how boosting the minimum wage could lift the economy; we check in with immigration; and Robert Scheer talks about the sinful love between the tea party and Goldman Sachs. Also: On the ground in Gaza.
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Reese Erlich reports from Gaza:
Sylvia Allegreto on minimum wage:
Marshal Fitz on immigration:
Full discussion with Seth Fletcher on the holy grail of batteries (a shorter version aired with the show):
Robert Scheer discusses his column on Goldman Sachs and the tea party:
Peter Scheer: This is Truthdig Radio in collaboration with KPFK. I’m Truthdig.com managing editor Peter Scheer. Today we drill beneath the headlines to find out why a battery breakthrough is the key to our clean energy future, how boosting the minimum wage could lift the economy, what’s happening with immigration, and a little bit later we’ll be speaking with Robert Scheer about the sinful love between the Tea Party and Goldman Sachs.
But first, an update from Gaza: Last week hundreds of activists boarded a flotilla of ships to bring much-needed aid to the Palestinian territories. Israel, with the backing of the U.S., has imposed an economic embargo on Gaza for five years. Foreign correspondent Reese Erlich got inside Gaza to report on the political and economic conditions there.
Reese Erlich: Farmer Ahmad Shafi walks through his fields located just a half-mile from the Israeli border. Militants occasionally fire rockets into Israel from nearby fields and Israeli artillery shrapnel has hit Shafi’s home. Shafi said by imposing a blockade on Gaza, Israel is collectively punishing all Palestinians, not just those who attack Israel. The 74-year-old grizzled patriarch says he can’t export strawberries or other crops like he used to. As head of an agricultural co-op, he periodically eats with Israeli officials. He describes one conversation he had with them:
Ahmad Shafi: They said we punish Hamas, not you, and I said no, you punish all of us, not only Hamas.
Reese Erlich: Now, you didn’t vote for Hamas, right?
Ahmad Shafi: Yes, right.
Reese Erlich: Israel began its economic blockade of Gaza in 2006 with the cooperation of Hosni Mubarak’s government in Egypt, but then in late May of this year a new Egyptian government changed policies, and permanently opened the border at Rafah Gate. Shafi had hoped the opening would soften the effects of the Israeli blockade, but he was disappointed because only people, not commercial trade, crossed the border.
Ahmad Shafi: We think for sure it will help the Palestinians in Gaza in general because it will be the gate to the outside world. But not economically, there’s not that much. But for other aspects of life it will be very useful for us.
Reese Erlich: Gaza Economy Minister Ala al-Rafati says Palestinians have been unable to export most products or get raw materials for their factories.
Al-Rafati says even before the siege, Israel imposed many restrictions on our export. “We always had to work through specific Israeli exporting companies, which controlled everything including prices. Before the siege, we had $250 million in exports of flowers and strawberries; now all of our exports total less than $2 million per year.”
As a result, according to U.N. statistics, Gaza unemployment stands at 45 percent. Israeli officials argue that opening the Egyptian border to normal trade would facilitate arms smuggling. So far they have succeeded in pressuring the Egyptian government to prohibit such commerce.
Back at his farm near the Israeli border, Ahmad Shafi wants a normal life for his extended family of 25 people. Regular trade with Israel and Egypt, he says, would help everyone. Shafi says both Israelis and Palestinians would have to recognize the right of the other to exist as an independent nation.
Ahmad Shafi: We are neighbors and we are in the same land; we have the right to live, you and us, yeah.
Reese Erlich: Shafi says ending the economic sanctions on Gaza would be a good first step towards peace. But Israel shows no signs of lifting the blockade, and it appears likely the trade will be banned at Rafah Gate at least until a new Egyptian government takes power after parliamentary elections this September.
For Truthdig, I’m Reese Erlich, Gaza City.
Peter Scheer: The Pulitzer Center for Crisis Reporting provided travel support for Reese Erlich’s reporting from Gaza.
Peter Scheer:This is Truthdig Radio—Peter and Josh Scheer. We’re speaking with Sylvia Allegretto, a labor economist at the Institute for Research on Labor and Employment at UC Berkeley, and she also does a lot of work with the Economic Policy Institute. Welcome.
Sylvia Allegretto: Hello, it’s good to be here.
Peter Scheer:So first thing, I want to ask you about, you know, obviously endless, endless trees have been cut down to make sense of the economic meltdown since 2008, but in terms of employment and wages, those [employment and wages] have been suffering—well, not necessarily employment [over the decades], but wages have been going down for a long time … is that true?
Sylvia Allegretto: Yes, wages have been really going down for typical and low-wage workers; this is kind of surprising for some folks. It’s really been a 30-year trek that wages have been stagnant or declining. So what’s happening now when we see wages aren’t really going anywhere, that’s not surprising because we’re still kind of in the grips of the aftermath of the deepest recession we’ve had since the Great Depression. But again, I think it comes as more of a surprise that considering how much the economy has grown over the last two or three decades, and how much productivity has increased over the last two or three decades. Those gains and the economy and productivity are not kind of filtering down to typical and low-wage workers.
Josh Scheer: And really quickly, I want get to a panel you were on, on June 7th, in Washington, I think the Center for American Progress put it on, and you were talking about how raising the minimum wage actually would be beneficial for jobs and job creation, and in doing so you also mentioned wage increases during the recession of the ’90s and the 2000s as kind of an example. Can you go into that a little deeper?
Sylvia Allegretto: Yeah, I think the first thing is that because workers have no bargaining power, they certainly don’t have any now, we have such high unemployment, we’ve had relatively high unemployment again for the last 20 or 30 years except for that period in the late 1990s when we had unemployment around 4 percent. In today’s climate atmosphere for workers, given that unions have been declining, given that union strength has been declining, workers do not have any bargaining power except when there’s really tight labor markets, so looking at the late 1990s, it’s really interesting because that’s when we see that we did have real wage gains for everybody at all stages of the wage distribution: low, medium and high. So that was really good because the workers were coming to the party as the economy was expanding. They were gaining in those shares. But so that was an outlier, we haven’t really had that. That was the only period in recent history where we had such a thing, and certainly now with the unemployment rates that we have, workers have no bargaining power. So the idea of increasing the minimum wage is kind of twofold. One is just to keep the minimum wage up to where it has been, so for instance the minimum wage today, the federal level at $7.25, is actually lower in real terms when you take into account inflation, than it was in the 1970s. So a lot of the minimum wage increases only make up for lost ground. Secondly, in today’s economy, we have a problem here in this very weak recovery. This month marks the second year of economy recovery. A lot of people are very surprised at that because things still seem so bad on the ground, especially on Main Street, and so the idea, the increase in minimum wage now is to put money in the hands of people who would spend it because we actually have a problem of a decrease in demand. We don’t have enough demand in the economy to get the economy kind of revved up. So if you put money in the hands of our lowest-wage workers, they’ll spend it, just like unemployment benefits, right? We talk a lot about unemployment benefits over this recession, the 18-month recession, now the two-year weak recovery and we know there’s a huge multiplier on those moneys. You know, again, you put money in the hands of somebody who is unemployed, or somebody who is a low-wage worker, and they’ll spend it.
Josh Scheer: Now, I just want to get into this really quickly about raising the minimum wage because there is a lot of criticism of that idea. Opponents say companies move, that jobs will go away, and things like that, but then they don’t take into account the idea that it costs money to move for these companies; also there is the idea of the service economy, right? If you live in a tourist economy, you know, we’re in Los Angeles, there’s a huge tourist economy, people come here and things like that. There’s a bill that would allow employers to consider health benefits that they pay as part of the minimum wages and it gets to your point of sub-minimum wages and seasonal workers and tips, and it would make even more people under the poverty line, which I believe there’s like 44 million, and there is 4.4 [million] workers earning minimum wage or less. So could we get into that a little bit?
Sylvia Allegretto: Well, that’s right. I think one of the biggest debates going on right now certainly around the minimum wage, and this happens every summer, especially the last three summers because the economy has been so bad, is that teenage unemployment is so high because of the minimum wage. First of all, I’ve just written a paper that has been published by a top economic journal with my colleagues here at Berkeley, and one at UMASS, that we actually find that increasing the minimum wage. We looked over a 20-year period of every minimum wage change at the federal and state level over 20 years, and found that, for instance, teenage unemployment has not been hurt. Teenage unemployment does not increase when minimum wages increase. It used to be that they found these effects, these kind of fancy econometric models, statistic models that economists use, that they would find these negative disemployment effects with the increases in the minimum wage. So we show why those were erroneously found, and why they don’t materialize. So that’s one thing, is that the minimum wage basically is so low, to increase it a little bit is not going to hurt employment of low-wage workers.
Peter Scheer:You say you found why, but why is that?
Sylvia Allegretto: Because basically over this long period, you have employment trends, you know just like population shifts, you know how the population shifting from the Northwest down to the sunny areas of the country, down to the South, down to the Southwest, out to the West, so you have these population shifts which you can imagine, you know those are employment shifts also over a 20-year period, and then you have changes of minimum wages at federal and state levels. What we found is that those two were correlated but not causal. So just because you see that there’s a state does not increase the minimum wage, and they lose employment. For instance, in Michigan, they’re not losing employment because of the minimum wage; they’re losing employment because of the huge industrial population shift. So if you control these models for these types of factors, these types of trends, these long-term trends across states and over time, those employment effects do not materialize.
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