U.S. firms' thirst for quick profits hurts workers, Clinton will say

Reuters News
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Posted: Jul 11, 2015 1:01 PM

By Jonathan Allen

NEW YORK (Reuters) - Presidential candidate Hillary Clinton will argue in a speech on Monday that U.S. businesses are too fixated on short-term profits, especially on Wall Street, and she will pledge to help workers get better pay and more family-friendly policies.

Clinton, the favorite to win the Democratic Party's nomination for the November 2016 election, intends the speech to outline the economic theory underpinning her campaign, in which she has promised to be a champion for "everyday Americans."

The speech comes as her nearest rival for the nomination, the socialist Vermont Senator Bernie Sanders, has drawn large crowds and is steadily narrowing Clinton's lead in polls by staking out positions that reflect the leftward shift of their party's base.

Speaking at a historically progressive university in New York City, Clinton will say that the size of the U.S. economy is best increased by policies that directly enrich the middle class, not by allowing wealth to accumulate among the richest few, according to an overview of the speech provided by her campaign.

The details and costs of her proposals will be made public later, the campaign said. This delay may add to complaints, especially from her party's progressive wing, that her platform remains too vague to appraise.

ECONOMIC BUBBLES

Clinton has demurred on whether big Wall Street banks should be broken up by separating commercial banking from investment banking, as some in her party have called for. The risky trading operations of some big banks has been blamed for helping to trigger the 2007-2009 financial crisis.

Clinton will say that laws and the tax codes reward financial trading too generously, while undervaluing other industries, such as construction and manufacturing.

The financial services industry is also too focused on short-term growth and quarterly reports, she will say, which creates economic bubbles that end up leaving the middle class in the lurch.

Creating new rules on shareholder activism will help counter this, and she will argue for greater investment in infrastructure through an infrastructure bank and in research, including development of new sustainable energy sources.

Her rival Sanders has suggested increasing the tax rate for the richest Americans to more than 50 percent. Clinton has declined to specifically discuss raising taxes and will say on Monday only that the tax code will be reformed so that the richest pay a fair share.

She will say she wants to make it easier for people, and women in particular, to work by increasing access to child care, paid leave and paid sick days, areas where the United States is stingy compared to most other developed nations.

For example, the United States is one of only three countries, along with Oman and Papua New Guinea, that does not guarantee paid maternity leave, according to the International Labour Organization.

She wants to make it harder for companies to underpay workers. Small businesses will be promised "tax relief" on the basis that they create the majority of the country's new jobs.

Clinton will again say the federal minimum wage of $7.25 an hour should be raised, although the size of the increase she has in mind remains unclear.

Clinton is likely to at least indirectly disparage a central pledge of former Florida Governor Jeb Bush, the favorite for the Republican nomination, who said he would aim to virtually double the U.S. economic growth rate to 4 percent. Economic success is better measured by how much incomes rise for middle-class people, she will say, rather than any arbitrary growth target.

She will support collective bargaining, which would mark a clear contrast with Wisconsin Governor Scott Walker, one of her strongest Republican rivals who came to national prominence with his efforts to weaken unions representing government workers.

Labor unions, an important source of votes for Democrats, have been slow to embrace Clinton as she equivocates on a planned trade deal between the United States and Asian countries. Clinton supported the idea of the deal as secretary of state, but unions are convinced it will harm American workers.

Trade is unlikely to be discussed in any detail in Monday's speech, according to the preview provided by her campaign.

(Writing by Jonathan Allen, additional reporting by Luciana Lopez in New York and Amanda Becker and Alistair Bell in Washington, editing by Ross Colvin)