The Portland, Ore., City Council just struck a direct blow at inequality, passing a path-breaking law that will slap a surtax on large corporations that pay their chief executives more than 100 times what they pay their typical worker.
Cynics immediately scorned the act both as mere symbol and as likely to drive business out of the city. In fact, the law is far more likely to generate similar measures in cities across the country. Donald Trump has trumpeted that Republican control of Congress will enable him to cut taxes, roll back regulation and overturn all things Obama-related, including signature health-care and climate-change reforms. Portland’s act suggests Trump’s biggest opposition may come from cities and from blue states across the country.
Portland’s surtax goes after one of the greatest sources of inequality: corporate America’s perverse rewards structures, which let chief executives pocket more and more of the rewards of growth while workers get stiffed. In 1965, CEOs of Fortune 500 companies made about 20 times more than the typical worker; now they rake in more than 335 times as much, reports the AFL-CIO’s Executive PayWatch. In 2018, one of the Dodd-Frank reforms will require publicly held companies to publish their chief executive-worker pay ratio. Using that calculation, Portland will tax corporations with voracious chief executives extra, penalizing extreme inequality and raising real revenue for investment in the city — as much as $3.5 million per year in Portland’s case. Trump, of course, has broadcast his plans to cut corporate taxes drastically. Portland suggests one way cities and states can recoup some of that money for their own coffers.
Trump’s plans for top-end tax cuts can also create an opportunity for progressive cities. New York’s Mayor Bill de Blasio (D) campaigned and won on raising taxes on the very rich to pay for universal pre-kindergarten for New York’s children. Cities and blue states may well counter federal tax cuts for corporations and the rich with state and local tax hikes that can be invested in vital public services.
On climate change and renewable energy, former New York mayor Michael Bloomberg, whose personal fortune makes Trump look like a pauper, pledged that if Trump carried through with his campaign threats to withdraw from the Paris agreements on climate, he would urge 128 cities to join the Paris agreement. “Washington,” Bloomberg noted, “will not have the last word on the fate of the Paris Agreement in the U.S. — mayors will, together with business leaders and citizens.” California already has a cap-and-trade ceiling on carbon emissions, with 35 percent of the revenue generated earmarked for clean-energy investments in low-income communities. The revenues invested — more than $1.2 billion in 2014 and 2015 — dwarf the $28 million provided California cities by the federal Community Development Block Grant program, the largest community grants program under President Obama.
Trump’s appalling nominee for secretary of labor, fast-food chief executive Andrew Puzder loudly scorns virtually every worker protection — the minimum wage, sensible overtime protections, paid family leave and paid sick days. Under President Obama, the Republican House majority wouldn’t allow even a vote on raising the minimum wage. But driven by the Fight for $15 movement of low-wage workers, 14 cities and states have passed $15 minimum-wage measures. Twenty-nine states now have minimum wages higher than that of the federal government. Initiatives raising the minimum wage passed in four states in 2016, including Arizona, which also voted for Trump. San Francisco has passed a worker bill of rights measure that guarantee workers fair schedules and equal treatment for part-time workers. It also requires businesses to provide paid sick leave. Other cities have begun similar reforms.
Similarly, if Trump and the Republican Congress carry out their threats to deregulate Wall Street once more, states can toughen their banking regulations, and crack down on bank fraud. Or, as Steven Pearlstein noted in The Post, they can revive early progressive movement reforms and charter state mutual banks and insurance companies that offer lower cost services than too-big-to-fail banks.
Cities have already announced they are ready to counter Trump’s divisive threats to people of color and women. Sanctuary cities from Los Angeles to Chicago have announced their defiance. In a stirring speech at New York’s Cooper Union, de Blasio pledged to New Yorkers that New York’s values would not change: “We are always New York. Somos siempre Nueva York.”
Democrats have total control in only six states (Republicans control 24). Yet there are progressive city mayors and city councils throughout blue and red states — from Salt Lake City to Jackson, Miss. Red-state governments can and do try to quash progressive city reforms, as the conservative Ohio state legislature demonstrated in passing a law prohibiting Ohio’s cities from hiking the minimum wage. But grass-roots campaigns (Fight for $15, Jobs With Justice) and organizations (People’s Action, Working Families Party and Our Revolution, the offshoot of the Bernie Sanders presidential campaign) are driving this agenda and challenging opposition to popular reforms. These clashes are likely to build the movement for change, not deter it.
Trump, of course, still can wreak havoc, stripping millions of health care, trashing America’s leadership role in addressing climate change, unleashing a new lawless era of crony capitalism and sowing division rather than decency. But even with Republicans in control of Congress, neither he nor his Cabinet of bankers, billionaires and generals will have a free hand. Resistance will come, not only in the streets but also from leaders in states and cities who are intent on making America better.