NEW YORK – The Obama administration is pushing for the House and Senate to approve “fast track authority” to jam through Congress without amendments the Trans-Pacific Partnership, a massive “free trade” agreement negotiated in secret while Hillary Clinton was secretary of state.
Obama and Clinton frequently speak out against “income inequality,” but a report released this week by the Organization for Economic Co-operation and Development, OCED, concludes the increased globalism of the last three decades has pushed income inequality worldwide, and especially in the United States, to new record highs.
“We have reached a tipping point. Inequality in OECD countries is at its highest since records began,” said OECD Secretary-General Angel Gurría, launching the report in Paris with Marianne Thyssen, European Commissioner for Employment, Social Affairs, Skills and Labour Mobility.
“The evidence shows that high inequality is bad for growth. The case for policy action is as much economic as social. By not addressing inequality, governments are cutting into the social fabric of their countries and hurting their long-term economic growth.”
Income inequality at record high
The OECD report indicates income inequality today worldwide is at the highest level recorded in the 30 years since data collection started. The richest 10 percent of the population in the 19 OECD countries analyzed earn 9.6 times the income of the poorest 10 percent, a ratio that stood at 7:1 rising to 8:1 in the 1990s, and 9:1 in the 2000s.
The report further indicated that wealth is actually more concentrated that income, with the wealthiest 10 percent of households holding 50 percent of total OECD wealth, while the 40 percent least wealthy own little over 3 percent. Low assets and high debt levels, the report said, cripple the economic security of the 40 percent who are the least wealthy.
The report highlighted the growing gap between the top 1 percent and the bottom 40 percent.
“While the flashy lifestyles and incomes of the top 1 percent are certainly eye-catching, focusing on them exclusively risks obscuring another area of growing concern in inequality – namely the declining situation of low-income households,” the OECD said. “In recent decades, as much as 40 percent of the population at the lower end of the distribution has benefited little from economic growth in many cases. In some cases, low earners have seen their incomes fall in real terms.”
As noted by an OECD press release, the increasing share of people working part time, on temporary contracts or self-employed is one important driver of growing inequality.
Between 1995 and 2013, more than 50 percent of all jobs created in OECD countries fell into these categories. Low-skilled temporary workers, in particular, have much lower and unstable earnings than permanent workers.
Youth are most affected: 40 percent are in non-standard work and about half of all temporary workers are under 30 and with temporary workers less likely to move from a temporary job into a stable permanent one.
Elizabeth Warren attacks Hillary on free trade
Sen. Elizabeth Warren, D-Mass., leading the opposition to the TPP agreement from within the left of the Democratic Party, has been sharply critical of Hillary Clinton for keeping largely silent on the trade agreement while President Obama presses to get fast-track authority approved.
Clinton said the TPP is “a very hot topic right now” that “hasn’t been fully negotiated.”
She said she “wanted to judge the final agreement,” pointing to a section in her book, “Hard Choices,” that criticized an international trade dispute procedure that “gives corporations more power to overturn health, labor and environmental rules than consumers have.”
On Pages 77-78 of “Hard Choices,” Clinton was generally supportive of the TPP.
“As President Obama explained, the goal of the TPP negotiations is to establish ‘a high standard, enforceable, meaningful trade agreement’ that ‘is going to be incredibly powerful for American companies who, up to this point, have often been locked out of those markets,’” she wrote. “It is also important for American workers, who would benefit form competing on a more level playing field. And it was a strategic initiative that would strengthen the position of the United States in Asia.”
Noting she wanted to reserve judgment while the TPP was still being negotiated, Clinton added, “It’s safe to say that while the TPP won’t be perfect – no deal negotiated among a dozen countries ever will be – but its higher standards, if implemented and enforced, should benefit American businesses and workers.”
Arguing against Clinton on the Senate floor, Warren cited Clinton to bolster her argument against the TPP. Warren noted Clinton appeared to be against the TPP’s investor-state dispute settlement, ISDS, provisions that allow corporations to take cases to corporate-friendly arbitration panels whose authority supersedes U.S. courts and law. The corporations would be able to challenge U.S. laws they believe damage their business opportunities under TPP.
“Under TPP, corporations can use these channels to challenge rules right here in America,” Warren said in her Senate floor speech.
“It wasn’t always this way,” she continued. “ISDS has been around for a while. From 1959 to 2002, there were fewer than a hundred claims in the whole world. But, boy, has that changed. In 2012 alone, there were 58 corporate cases. Corporate lawyers figured out how powerful a tool these panels can be for corporate clients,” Warren said.
“Huge financial penalties that these cases can impose on taxpayers have already caused New Zealand to give up on some tough anti-smoking rules,” Warren noted. “It’s already caused Germany to pull back from clean water protections. And it’s caused Canada to stand down on environmental protections.”
See Warren’s Senate floor speech:
Warren noted that Hillary Clinton had said the U.S. should not give “investors the power to sue foreign governments to weaken their environmental and public health rules.”