Date November 7, 2018
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Elizabeth Warren: Government’s job is to make the economy work for everyone

In an address at Brown University one night after her re-election, the U.S. senator called on her personal story to argue for the role of government in creating broad economic opportunity in America.

PROVIDENCE, R.I. [Brown University] —“Who does government work for?” That was the central question asked by U.S. Sen. Elizabeth Warren (D-Mass.) in an address at Brown University one night after winning her re-election bid to Congress.

“All the debates we’re having right now in Washington, in my view, fundamentally are about this question,” Warren said. “It’s about whether or not you go into a Health, Education, Labor and Pensions Committee meeting thinking that our job is to figure out what it’s like to be a minimum-wage worker... or that the way we ought to be thinking about these rules is what’s the most attractive rule for the giant companies that hire these folks.”

Warren, whose visit to Brown was part of the Taubman Center for American Politics and Policy’s Governor Frank Licht ’38 Lecture series, spoke to a capacity crowd of 600 at the Salomon Center for Teaching on Wednesday, Nov. 7. Warren’s U.S. Senate colleague Sheldon Whitehouse, who was elected to his third term as Rhode Island’s junior senator on Tuesday, introduced her.

“There is no one in the U.S. Senate who sees more clearly or feels more passionately the problem of a political system that has been rigged, in order to support an economic system that has been rigged to take advantage of regular people and regular families at the expense of those pulling the economic strings...” Whitehouse said of Warren. “She has the experience, the knowledge, the education and the determination to get down in the weeds and catch them... where the tricks and traps are buried in the contracts and the deals and the agreements.”

Warren shared the story of growing up in a “paycheck-to-paycheck” family to illustrate how it was once possible to support a middle-class lifestyle with a minimum-wage job. After her father, who sold paint and fencing, had a heart attack and was unable to work, her mother entered the workforce for the first time. By answering phones at an entry-level job at Sears Roebuck, she was able to support the family, the senator said.  

This was “a time in America when a minimum-wage job would support a family of three. It would cover a mortgage payment, it would cover utilities and still put food on the table...” Warren said. “The folks in Washington decided that the way you want to set a minimum-wage job is that it is an entry-level job into America’s middle class.”

Warren contrasted that experience with today, when a full-time, minimum-wage job will not keep a mother and child out of poverty or cover a median two-bedroom apartment in any county in America, she said.

“I have listened to my Republican colleagues say, ‘You know, if it was up to me, there wouldn’t be any minimum wage at all.’”

That is a government, Warren said, that does not work for individuals and asks only how to increase the profitability of corporations. She lamented the lack of new labor laws at a time when risk has increasingly been cast onto individuals who not only are paid little, but are not guaranteed sufficient hours or a regular schedule.

“The risks have been pushed off and the government has been right at the heart of it,” the senator said.

Warren proceeded to detail two vastly different economic theories have dominated policymaking between 1935 and the present with significant effects on income inequality. After the economic crash of 1929, both Democrats and Republicans, to different degrees, followed the principle that government’s job is to balance the economy so it works for everyone, she said.

With regulation and progressive taxation, Warren said, the distribution of income between 1935 and 1980 created more overall wealth, with 70 percent of new income generated in the economy going to 90 percent of Americans, and 30 percent to the top 10 percent.

“In other words, everybody did better,” Warren said.

But in roughly 1980, she said, the theory of trickle-down economics emerged. That theory posits that government is not a beneficial force in balancing out the power of corporations but is in itself a problem; and that when those at the top prosper, economic success will trickle down so others do, too.

Between 1980 and 2016, nearly 100 percent of new income growth was funneled to the top 10 percent, Warren said. By forfeiting progressive taxation and regulation, Warren said, policymakers have severely curbed broad participation in prosperity. What led to that dramatic shift in law, the former law professor asked the audience?

“It starts when very rich people and very big corporations figure out that there is money to be made from ‘capturing’ the federal government,” she said. “Capturing it not just through campaign contributions but capturing it through lobbying, capturing it through think tanks... so that in every decision that gets made there’s just a little tilt toward those who’ve already made it big — those who can hire the lobbyists.”

Brown public policy and economics concentrator Parisa Banani, who works with the Taubman Center and the University’s Watson Institute for International and Public Affairs, asked Warren a series of questions collected from students. They ranged from queries on student loans and housing to the Glass-Steagall legislation that regulates banking and Warren’s recent decision to take a DNA test to demonstrate her Native American heritage.

“Some of you may know, Donald Trump has attacked me for a long time now based on my ancestry...” Warren said of the DNA test. “My response to attacks is just to try to be as transparent as possible. I put out 10 years of my tax returns. I put out every single one of my hiring documents... and yes, I took a DNA test. And I put it all out on the internet. Anybody can see it. They can make of it what they want. I get it. I am not going to keep Donald Trump from hurling racial insults.”

Warren proceeded to say that she is not a tribal citizen and that only tribes determine tribal citizenship.

“But every single one of us should be outraged when Donald Trump attacks Native Americans,” she said. “I am not a person of color. But every single one of us should acknowledge that communities of color are under assault... I believe in the worth of every single human being. That’s how we build something together.”