Two weeks after the election, Minority Leader Chuck Schumer summed up why he thought Democrats got clobbered at the ballot box: “We did not have a strong, bold economic message.”
That problem appears to have been particularly acute in the Rust Belt, where unexpected Democratic losses in Michigan, Wisconsin, Pennsylvania, and Ohio helped put Donald Trump into the White House.
Sen. Sherrod Brown of Ohio is offering one corrective vision for what Democrats hoping to retake the Midwest should do. Brown, 64, is already being written about as a 2020 presidential contender. He’s widely regarded as one of the caucus’s most left-wing members, but also speaks with the credibility of having won multiple statewide elections in purple territory by big margins.
And earlier this congressional session, Brown released a detailed, 77-page plan detailing a suite of economic policy proposals that suggest what his “economic populism” would look like for Democrats. His ideas include greater bargaining rights for union workers, a $15 minimum wage, a crackdown on employers who treat full-time workers as independent contractors, and a “Benefits Bank” for workers whose employers don’t save for retirement.
None of these have any chance of being implemented with a Republican-controlled congress and White House. But in an interview on Tuesday, the Ohio senator detailed one of his most ambitious proposals — a “Corporate Freeloader Fee” that would penalize large corporations that pay their workers less than $24,000, while also giving tax breaks to those businesses that pay above a living wage and offer retirement and medical coverage.
“Corporations that pay good wages, take care of health benefits for their employees, those whose employees don’t have to rely on the social safety net — they should get a lower tax rate than those companies who are paying very low wages,” Brown said in an interview.
I talked to Brown on Tuesday. A transcript of our conversation, edited for length and clarity, follows.
I wanted to ask you about the Corporate Freeloader Fee that’s a big part of your new policy plan. Can you explain how it works and how you came to embrace the idea?
We’re going to do tax reform here in Congress soon, and corporations are going to get lower tax rates. I’m fine with that as far as it goes, but it seems to me we should reward corporations that do things right. And those that don’t — those that rely on taxpayers to subsidize their wages and benefits — should pay a fee for not doing so.
The “freeloader fee” uses a carrot and a stick approach. Corporations that pay good wages, take care of health benefits for their employees, whose employees don’t have to rely on the social safety net — they should get a lower tax rate than those companies who are paying very low wages. And the corporations that don’t get a fee.
Right now, [low-wage] employees get EITC [the Earned Income Tax Credit]; they get housing vouchers [from the federal government]; they get Medicaid. But why should taxpayers subsidize low-wage corporations that are making a lot of money who are making that money in part because they’re not taking care of their employees? That’s why they’re “freeloading.”
It seems like the policy of punishing these corporations for not paying a fair wage is a little at odds with the expansion of the Earned Income Tax Credit, which you’ve also advocated for. Doesn’t giving that tax credit to low-wage workers encourage employers to hire at low wages, which is what you’re trying to avoid with the freeloader plan?
You can say the same about food stamps. But the government has to make a decision when companies are not paying workers well. You have to do something. I led the charge on the EITC. I’ll support, obviously, housing vouchers. I’ll support anything that keeps people out of poverty.
But, ideally, you wouldn’t need those programs if companies paid a decent wage. The EITC was created because so many companies didn’t pay a decent wage, and Congress went down the path of, “Let’s at least give them some support that way,” which is what we’ve done.
So, I strongly support EITC within what exists. But I’d strongly prefer not having to use the EITC, if corporations were paying a livable wage.
I read in your plan there’s a provision that kicks in if workers are being paid under 200 percent of the Federal Poverty Limit, and then kicks in different amounts at different income thresholds. How would you calculate which companies do and don’t get penalized?
You look at a lot of data and can see how this works in different parts of the country. But they’re definitely negotiable — I’m for a $15 minimum wage, but if Mitch McConnell put a $13 minimum wage or a $16 minimum wage on the Senate floor, I’d vote for it.
I want to see us move to help reward work. We don’t value work in this country the way we used to, and as a result far too many people have seen stagnant wages and seen people fall out of the middle class.
As much as anything, my job is to try to help those people who are working hard trying to get into the middle class to get a chance to join. I don’t care about the numbers that much — I just want to get a chance to move us in the right direction.
There’s been a big conversation on the left recently about whether Democrats need to attack market consolidation, with a few companies gaining far too much control of their sections of the economy.
Is that a key part of the goal of proposed legislation like this — to break up some of these corporations’ hold on the market — or is it primarily about improving outcomes for low-wage workers?
Companies clearly have too much market power. Walmart is so big and powerful it could dictate to all of its suppliers what they will pay to them. And meanwhile there’s more market consolidation, there’s more busting unions, so you have the employer having so much more power in the marketplace in terms of wages, in terms of hours worked, in terms of just classification — making people work off the clock.
Employers probably have more power now than they’ve had since the sit-down strikes in the 1930s in Detroit. That’s why these issues are so important.
Do you think most of your Democratic colleagues in the Senate would be willing to get behind your proposals?
And, as a follow-up, do you think the idea that this kind of rhetoric and policy poses a political risk to Democrats who can be tarred as “anti-business” in a meaningful way?
Yes, I think most of them would be. My more comprehensive [77-page] plan — sort of the whole thing? I think most of my colleagues would. I think some of the things — minimum wage, they may argue about what level they want to see. They’d want to see the level of the freeloader fee. There’s certainly a range. But, overwhelmingly, my caucus wants to do something very significant on wages
Our efforts have to be about: “How do you help working class Americans get a raise? How do you reward people’s work?” This does that.
Of course, Republicans will say all kinds of things — they’ll say a higher minimum wage will cause layoffs; they say it will cause higher prices, though they would never say that about a $1 million to an assistant vice president; they’re going to say what they’re going to say.
But they do nothing about this. They do nothing about the minimum wage. They’re taking away the overtime provisions. [Republicans are currently advancing a bill that would allow employers to give compensatory time rather than time-and-a-half pay.] They do nothing on classification of working off-the-clock.
We as a party have to fight for workers, and this is the way to do it. Let some corporate lobbyists call us “anti-business.” Workers are going to hear this and they’ll say, “I’ll do better under the Democrats.”