QandO

July 29, 2004

Edwards quotes from Day III
Posted by McQ

John Edwards spoke last night. A few snips:

But we've seen relentless negative attacks against John. So in the weeks ahead, we know what's coming — don't we — more negative attacks.

Aren't you sick of it?

They are doing all they can to take this campaign for the highest office in the land down the lowest possible road.

From the party of the "Bush lied" meme, this seems a bit disingenous. From the party of the "Bushitler" image, it seems a bit hypocritical. From the party of the "Bush knew about 911" conspiracy ala Howard Dean and Cynthia McKinney, this seems to be an outright fabrication. But then Edwards is a trial lawyer.

My guess is he's sick of it because he doesn't like what the return fire looks like.

First, we can create good paying jobs in America again. Our plan will stop giving tax breaks to companies that outsource your jobs. Instead, we will give tax breaks to American companies that keep jobs here in America. And we will invest in the jobs of the future — in the technologies and innovation to ensure that America stays ahead of the competition.

There are no official figures on the total number of jobs that have gone overseas, but in May 2004 the Labor Department made its first-ever report on the portion of "mass layoffs" attributable to "overseas relocation." Their survey showed that only 2.5 percent of major layoffs in the first three months of 2004 were a result of outsourcing abroad .

That survey only covers companies that have laid off 50 or more workers at one time for 30 days or longer, and so may not be representative of all companies and all job loss. But it gives scant support for Kerry's theme.

Trying to assess whether offshoring might actually be a larger problem than the Labor Department figures indicate, veteran Democratic economist Charles Schultze tried another approach. He reasoned that if America's production needs were increasingly met by foreign outsourcing (and cheap imports) this would be shown as a rise in the value of U.S. imports relative to the overall economy, as measured by Gross Domestic Product, or GDP. But what he found was that the ratio wasn't rising at all - it had leveled off since 2000. He concluded that "there is nothing in the data to suggest that large increases in. . . offshoring could have played a major role in explaining America's job performance in recent years. "

FactCheck.org also points out that while the present tax code does indeed provide incentive for US companies to move overseas, its not Bush's fault, but indeed the fault of the tax code passed by Congress:

In fact, tax experts say the incentive has been there for decades - since there has been a corporate income tax. It's not Bush's doing.

The incentive exists because the US taxes corporations at rates higher than most other countries. According to the Institute for International Economics, the effective rate for US corporations was just over 30% in 2002, while mainland China's effective corporate rate was only 11.3%, Britain's 18.2%, Mexico's 15.1% and Indonesia's a miniscule 0.2%.

Furthermore, the US also attempts to tax money that US-based companies earn in other countries, but only after those profits are brought back to the US. That means profits that remain overseas, perhaps invested in new factories in low-tax countries, never get taxed at the higher US rates. And that's been true through both Democratic and Republican administrations.

In essence what Edwards is saying, but carefully not saying, is Kerry/Edwards plan tax cuts for corporations ... which, if known, would probably not play well with the Naderite wing of the Democratic party.

Edwards then promises:

To help you pay for health care, a tax break and health care reform to lower your premiums up to $1,000. To help you cover the rising costs of child care, a tax credit up to $1,000 to cover those costs so your kids have a safe place to go while you work. And to help your child have the same chance I had and be the first person in your family to go to college, a tax break on up to $4,000 in tuition.

We had an interesting discussion here about tax reform a few days ago. A national sales tax was discussed as the fairest way to do this. Take a look above and you'll understand why no real tax reform will ever forthcoming from congress. Look at the power politicians wield by being able to promise allowing you to keep more of your money to help defray the costs of programs they've helped drive up.

More Edwards:

We have millions of Americans who work full-time every day for minimum wage to support their family and still live in poverty — it's wrong.

What's wrong is we don't have millions of Americans who work full-time for minimum wage to support a family.

First the numbers:

Last year [2002], about 570,000 American workers reported earning exactly $5.15 per hour, the prevailing Federal minimum wage, and another 1.6 million reported with wages below the minimum. Together, these 2.2 million workers made up 3.0 percent of all hourly-paid workers.

Then the demographics:

Minimum wage workers tend to be young. About half of workers earning $5.15 or less were under age 25, and slightly more than one-fourth were age 16-19. Among teenagers, 10 percent earned $5.15 or less.

About 4 percent of women paid hourly rates reported wages at or below the prevailing Federal minimum, compared with about 2 percent of men.

Part-time workers (persons who usually work less than 35 hours per week) were much more likely than their full-time counterparts to be paid $5.15 or less (about 8 percent versus about 2 percent). About 1 in 10 workers putting in fewer than 15 hours per week earned the minimum or less.

Summary: 3% of all hourly workers, who are mostly young or part-timers, receive minimum wage. 3%. That has nothing to do with the millions more of salaried workers. So at best, this addresses less than 3% of those paid hourly while over 100 million hourly workers are above the minium wage. If you add salaried workers into this its a little over 1% of the total workforce.

Edwards, et al, would have you believe that 1% earning minimum wage stay there with "no hope". They're wrong:

"... wage growth among minimum wage employees is actually quite robust.

As would be expected, minimum wage employment is a common entry point to the labor force. Individuals with few skills enter the workforce at this wage but quickly experience wage growth resulting from increased skill levels. This study finds that minimum wage employees are five times more likely than all employees to be new entrants to the labor force. Over the 23 years of data studied in the report, nearly two-thirds of minimum wage employees who continue employment are earning more than the minimum wage within 1–12 months."

In fact, the study cited shows that "Between 1998 and 2002, median wage
growth averaged 10.4 percent for minimum wage employees but only 1.7 percent for workers earning above the minimum—more than five times higher."

It isn't a minimum wage increase for the 'poor' Kerry/Edwards really want. Its the increase it will give union workers if the minium wage is increased that they're after. It always happens when the minimum wage in increased.

In other words, the aim is really to increase the cost of labor across the board on the one hand while telling us they're going to increase jobs on the other and using "poor families" with "no hope" as the bait. It doesn't take a rocket scientist to figure that those two goals may work against each other.

UPDATE (JON): Tagorda has an evaluation of Edwards, as well...

...isn't it somewhat ironic for Edwards to highlight the importance of American values while demonstrating his reluctance to promote them in Iraq? When it comes time to neutralize Republican advantages on the cultural front, he trumpets "faith, family, responsibility, opportunity for everyone." But when it comes time to extend democracy to Iraqis, he sticks mostly with "stability." By contrast, the Bush administration -- flaws and all -- goes a step further.

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