• Inequality Isn't Just Bad for the Economy—It's Toxic for the Environment

    Jul 6, 2015Susan Holmberg

    Cross-posted from Grist

    Tackling economic inequality is good climate change policy.

    Cross-posted from Grist

    Tackling economic inequality is good climate change policy.

    The pope’s encyclical on climate change was received with both enormous enthusiasm and criticism, reactions that will only intensify as he continues to lead efforts to solve our climate crisis and generate momentum for the UN Climate Conference later this year. His latest move? Inviting Naomi Klein, author most recently of This Changes Everything, to help lead last week’s Vatican conference on climate change.

    The most consistent and profound message threaded throughout Pope Francis’s text is how disproportionately vulnerable the poor are to the escalating effects of climate change. Poor communities are on the front lines, particularly susceptible to induced mega-storms, droughts, flooding, and other conditions that make life even more difficult. Because of their economic instability, impoverished communities are also more easily affected by a storm that in itself is not deadly. In 1998, when Hurricane Mitch hit Honduras, the poor were disproportionately devastated; impoverished households lost 15–20 percent of their assets as a result of the storm, while the rich lost only 3 percent. This is why the environmental justice (EJ) movement has long spotlighted the role of structural racism in coercing people of color and the poor into living in vulnerable areas and near the most polluted environments (landfills, industrial plants, etc.) and consequently experiencing worse health and quality of life outcomes.

    Yet, to build on the Pope and EJ movement’s message that economic inequality and environmental quality are linked, it is important to point out that the relationship between the economy and environment goes both ways. We’ve become more aware that environmental damage can be especially bad for poor people and people of color. What is less obvious is that high economic inequality—in the case of the United States, we’re almost at pre-Great Depression levels—is also bad for our environment.

    Economist James Boyce argues that, because wealth ultimately converts into political power, a society with high levels of wealth and income inequality leaves those at the bottom less able to resist the powerful interests that benefit from pollution. That’s consistent with the EJ movement’s message, but Boyce takes it further by arguing, “the total magnitude of environmental harm depends on the extent of inequality. Societies with wider inequalities of wealth and power tend to have more environmental harm.”

    Boyce provides two compelling pieces of evidence for his argument. The first is his study, with colleagues from the Political Economy Research Institute, comparing industrial air pollution across U.S. metro areas. The authors look at the distribution of air pollution impacts across income levels and racial groups and find that in cities where the gaps in pollution exposure between people of color and whites are larger, there tends to be much more pollution in general.

    The second study Boyce conducted, with another group of colleagues, looked at environmental quality across the 50 states and asked why it’s better in some states than others. It again turns out that these variations have much to do with differences in wealth and power. “Where income inequalities were greater, where educational inequalities were greater, where the fairness of fiscal policy in terms of both the tax system and access to services like Medicaid was better, you tended to find differences in environmental degradation.” More equal distributions of wealth and power were associated with better environmental outcomes.

    Boyce’s results are supported by complementary studies. Economist Jungho Baek and his co-authors also find that more equal income distribution in the U.S. results in better environmental quality in both the short- and long-run. Australian researchers identify similar impacts on the “stability of major systems including the social, terrestrial, water and mineral industry.”

    We can imagine a variety of mechanisms for how wider disparities in economic inequality would lead to higher “quantities” of environmental degradation. One is how we make environmental policy decisions. The Reagan administration mandated that cost-benefit analysis (CBAs) would be the primary tool for making these decisions, like allowable use of pesticides and levels of resource extraction. The belief was, and still is, that cost-benefit analysis is always the most objective, transparent, and efficient method.

    But in addition to the fact that CBAs are often criticized for being widely inaccurate and politically motivated, benefits are often valued by the willingness to pay for environmental improvements, which is problematic. When surveyed, the rich say they are willing to pay more than the poor for keeping a landfill incinerator out of their communities. Thus, despite the fact that common sense tells us impoverished and disempowered communities would just as much like to live in a clean and safe environment as the more wealthy and powerful, cost-benefit analyses typically say otherwise. The end result is that a CBA survey might recommend a higher level of allowable pollution than if the survey results were based on a more equitable population.

    Precipitated by the 2008 global financial crisis, we are finally having a lively debate about economic inequality in the U.S., which, after decades of stability, has been rising for the past 30 years or so. Yet our urgent conversation about climate change and environmental quality is siloed from this broader debate. As we confront the realities of our changing climate, we must recognize that environmental devastation is a distinct byproduct of economic inequality. We need to blend these conversations and also understand that the host of policy ideas coming out of the inequality debate could play an important role in solving our current environmental crisis.

    Susan Holmberg is a Fellow and Director of Research at the Roosevelt Institute.

    Share This

  • Shared Security: A New Deal for the New Century

    Jul 6, 2015Richard Kirsch

    If Social Security, the minimum wage, unemployment insurance, and the 40-hour workweek laid the foundation for the middle class in the 20th century, what would be the equivalent for the 21st century? The odd couple of a billionaire entrepreneur and a labor leader have come up with what could be a breakthrough proposal for rebuilding the middle class.

    If Social Security, the minimum wage, unemployment insurance, and the 40-hour workweek laid the foundation for the middle class in the 20th century, what would be the equivalent for the 21st century? The odd couple of a billionaire entrepreneur and a labor leader have come up with what could be a breakthrough proposal for rebuilding the middle class.

    Nick Hanauer, who made his fortune as an early Amazon investor, and David Rolf, the head of an SEIU local that has successfully organized tens of thousands of home care workers, detailed their plan for Shared Security in Democracy Journal.  The proposal aims to restore the foundation of the middle class: economic security.

    Hanauer and Rolf create a fictional young worker named Zoe to personify how working people in the new economy live in constant economic insecurity. Zoe works part-time as a hotel manager and supplements her income driving for Uber, working as a gardener, and renting her apartment on Airbnb. Still, she has no benefits and struggles to pay the rent and keep her car running. She doesn’t have the time or money to finish her college degree and wonders whether it would be worth the loans even if she did. When Zoe rents out her apartment, she stays with her parents, who also did not go to college. But her parents, who have had regular full-time employment over the course of their lives, look forward to a retirement made secure by a modest pension, some savings, Social Security, and Medicare.

    As Hanauer and Rolf write, “Zoe’s parents entered the workforce with the expectation that hard work would be rewarded with decent pay, improving prospects, and a comfortable retirement…This was the social contract of the 1950s, ’60s, and ’70s…But for Zoe’s generation, this contract no longer exists.”

    The new 21st century social contract they propose is based on giving Zoe’s generation middle class security, which they emphasize is the engine of our economy.  Hanauer and Rolf write, “the middle class is the source of all growth and prosperity in a modern, technological economy and economic security is the essential feature of what it means to be included in the middle class.”

    Just as FDR’s New Deal was founded on raising labor standards and providing social insurance, Hanauer and Rolf’s plan is based on Shared Security Standards and a Shared Security Account. The two combine to modernize basic labor standards and to extend existing and new social insurance to all workers, including part-time employees and those who employers consider independent contractors.

    The new labor standards would include: a livable wage (a higher minimum wage) and guarantees of overtime pay; pay equity; fair scheduling of work; and the right to use paid sick time, family leave, and vacations, which would be financed from each employee’s Shared Security Account.

    The breakthrough innovation in the proposal is establishing a Shared Security Account for every worker. Each employer would pay the share of benefits earned by each worker into those workers’ accounts based on a 40-hour week. In other words, an employer would pay all the benefits for a full-time employee while paying half the benefits for someone who works for that employer 20 hours a week.

    Each employer would pay its share of existing benefits required by the federal government or states, including Social Security, Medicare, an employer contribution toward health care, unemployment insurance, workers’ compensation, and disability. In addition, the employer would be required to pay for new benefits, including paid sick days, family leave and vacation, and a contribution to a 401(k)-type retirement account.

    The authors rightly celebrate the positive impact of their proposal for American workers. It would turn the trend toward contingent, part-time, temporary, and shared work from a recipe for continuous financial insecurity to a foundation for middle-class security.

    What they don’t explore is how their Shared Security system would significantly slow down the work trends that their proposal addresses. Looking again at Zoe, the hotel management company keeps her at 29 hours a week to avoid paying benefits. But when that financial advantage is taken away, or reduced significantly if the company voluntarily offers a higher benefit level to full-time employees, the company would be much more likely to employ Zoe full-time. In doing so, the company would gain the advantages that come with a full-time employee: less need for training, lower turnover, a better work attitude, and company loyalty.

    As The New York Times reported last month, we are already seeing some startup tech companies, which Hanauer and Rolf say use the contingent model to support innovation, realizing that it makes better business sense to hire full-time employees. For both low-wage employers and startups, Shared Security will lead firms to use the contingent work model more when it makes sense for delivering a better product and less as a way to cut labor costs.

    All of which reinforces the authors’ potent economic and political analysis, which is that assuring that every job is a good job is not only fair, it is the driver of economic growth. Raising wages, providing time to care for yourself and your family, and having affordable health insurance and retirement security is not just about being fair, and it’s not just about rewarding workers for their contributions to a business. It’s the exact opposite of conservative economic theory. At its root, it recognizes that people with the security of a good, middle-class job drive our economy forward. 

    Richard Kirsch is a Senior Fellow at the Roosevelt Institute, a Senior Adviser to USAction, and the author of Fighting for Our Health. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform.

    Share This

  • Once Again, the ACA Survived SCOTUS -- But the Fight Isn't Over Yet

    Jun 25, 2015Andrea Flynn

    Today the Supreme Court decided in favor of the government and the more than 6 million individuals who now have health coverage thanks to the Affordable Care Act’s subsidies. The 6–3 King v. Burwell decision—which determined that individuals in all states, not just those that established their own health exchanges, could be eligible for federal subsidies—is a win for President Obama, for the law more broadly, and for the health and economic security of millions of women and their families.

    Today the Supreme Court decided in favor of the government and the more than 6 million individuals who now have health coverage thanks to the Affordable Care Act’s subsidies. The 6–3 King v. Burwell decision—which determined that individuals in all states, not just those that established their own health exchanges, could be eligible for federal subsidies—is a win for President Obama, for the law more broadly, and for the health and economic security of millions of women and their families. As I described in my recent policy note, the ACA has expanded women’s access to care, improved the quality of their coverage, and in the process increased women’s economic security. Today’s decision ensures that—for the time being—the law will continue to do all of those things and more.

    The ACA expanded coverage to 16.5 million people and elevated the floor of coverage for women. Since 2010, 8.7 million women have gained maternity coverage; 48.5 million women with private insurance can access preventive services with no cost-sharing; and as many as 65 million women are no longer charged higher premiums based on pre-existing conditions. In 2013, the number of women who filled their birth control prescriptions without co-pays grew from 1.3 million to 5.1 million, and the share of women who had access to birth control with no out-of-pocket costs grew from 14 percent to 56 percent. This has been a significant improvement over the pre-ACA system in which women had to pay out of pocket for preventive services like pap smears and breast exams, were routinely charged more than men, and many couldn’t afford maternity coverage during pregnancy.

    Over the past five years the ACA has begun to ease the financial burdens of health coverage and care for women, who are more likely than men to live in poverty. Today more than two-thirds of low-wage workers are women—half of them women of color—and many work long hours with no health benefits. Wage inequality causes Black and Latina women to lose approximately $19,000 and $23,279 a year, respectively. A loss of subsidies would have been especially harmful to women of color, who represent nearly half of all uninsured women eligible for tax credits in states using the federal exchange. Those subsidies are the only path to insurance for 1.1 million Black women, approximately 2 million Latinas, nearly a quarter-million Asian women, and more than 100,000 Native American women. Many of those women live in one of three states: Florida, Georgia, or Texas.

    When women have good coverage and access to care, they are better able to make decisions about the timing and size of their families. They are able to prevent illnesses that cause them to miss work force them to lose a paycheck, and threaten their employment. They have healthier babies and children. Fewer out-of-pocket medical costs free up more money for food, childcare, education, housing, transportation, and savings. Health coverage won’t singlehandedly solve the serious challenges facing low-income women and families. Indeed, our country’s soaring inequality and persistent injustices demand sweeping social and economic reforms. But without the very basic ability to care for their bodies, visit a doctor, plan the timing and size of their families, and make independent reproductive health decisions, women will never be able to take full advantage of other economic opportunities.

    Today’s decision is especially important for women considering conservative lawmakers’ relentless attempts to roll back access to reproductive health care. Consider that just yesterday House Republicans voted to completely eliminate Title X (the federal family planning program), to expand religious exemptions allowing employers and insurers to opt out of covering anything they find morally or religiously objectionable, to implement new abortion restrictions with no exception for the life or health of pregnant women, and to renew the Hyde Amendment, which prohibits Medicaid coverage of abortion.

    So the ACA is safe for now, and the Supreme Court’s ruling will allow the law to become even more ingrained in our social and political fabric. However, we can be sure the vitriolic political opposition is not over. The GOP presidential hopefuls didn’t waste any time letting their constituents know today’s decision wouldn’t stop their attempts to undermine the law. And conservative lawmakers on the Hill will continue to push budget proposals that would unravel the law’s most important components and reduce funding for social programs critical to the wellbeing of low-income families. We should celebrate the King v. Burwell decision, but we must not stop making the case that for women and families, comprehensive, affordable health coverage—and by extension, care—is as much a matter of health as it is economic security.

    Andrea Flynn is a Fellow at the Roosevelt Institute. Follow her on Twitter at @dreaflynn.

    Share This

  • NYC Taxi Owners Are Denying Benefits to Drivers. The City Council Can Stop Them.

    Jun 25, 2015Richard Kirsch

    Earlier this month, the New York City Council enacted basic protections for workers at car washes, one group of exploited, largely immigrant workers. Next up on the City Council’s to-do list should be reversing a court decision that robbed taxi drivers, another group of mostly immigrant workers, of health and disability benefits.

    Earlier this month, the New York City Council enacted basic protections for workers at car washes, one group of exploited, largely immigrant workers. Next up on the City Council’s to-do list should be reversing a court decision that robbed taxi drivers, another group of mostly immigrant workers, of health and disability benefits.

    New York City’s taxi drivers are one more group of workers who decades ago were legally considered employees but now are classified as independent contractors, with low and unpredictable wages, long work hours, and no benefits. Over the last two decades, taxi driving has become a career for many new immigrants.

    Starting in 1996, drivers began organizing together, through the New York Taxi Workers Alliance, to win an increased share of cab fares and other protections. Two years ago, the Taxi Workers Alliance organized successfully to get the Taxi and Limousine Commission, which regulates the industry, to designate six cents from every cab ride to a fund to pay for disability and health benefits for drivers.

    The Taxi Workers Alliance, through an RFP process, won a contract to set up a fund that would provide a modest disability payment of $350 for 26 weeks, plus other benefits, such as vision, dental, and hearing. Drivers would still be responsible for their own health insurance, with many relying on the Affordable Care Act.

    Even though the fund does not cost the taxi owners a dime, they still sued to stop it, arguing that the commission overstepped its authority, and earlier this month a New York State appeals court agreed. As Bhairavi Desai, the Executive Director of the Taxi Worker Alliance, told me, the owners saw the health and disability fund “as a basis for the union…They were hell-bent on stopping the union and having the drivers have any benefits.”

    An irony of the court’s ruling is that one reason that taxi drivers are considered to be independent contractors by the National Labor Relations Board (NLRB) is that they work in a highly regulated industry, in which many of their pay and working conditions are regulated by the Taxi and Limousine Commission. But when the commission acted to fund a much-needed benefit, the court, at the behest of the owners, blocked the way. The court said that it was up to a legislative body to decide on a new policy like using fares to finance a health and disability fund.

    The other reason that the NLRB considers the drivers to be independent contractors is that they cruise for riders instead of being dispatched by the taxi companies. This in contrast with drivers of “black cars” in New York, who are dispatched by the limousine companies and therefore legally under their control. Some of the limousine drivers have joined the machinists union (IAMAW).

    Looking into the future, competition from services like Uber may push New York’s cab companies to adopt an app for riders to call cabs. Earlier this month, the California Labor Commissioner’s office ruled that an Uber driver there was an employee, in part because of Uber’s reliance on apps.

    For now, the court’s decision puts the issue squarely in front of the New York City Council. Since their election in 2013, both New York City Mayor Bill de Blasio and the new progressive majority on the council have made bolstering the ability of low-wage workers to care for and support their families a hallmark of their policies. One of their first actions was to strengthen a new law requiring that workers receive paid sick time. The new regulations establishing worker and environmental protections at car washes are the latest such action.

    Laws that improve wages and benefits for New York’s working families are not only fair, they are a fundamental strategy to move New York’s economy forward. The more New Yorkers have the ability to care and support their families, the more New York will build a middle class that is the basis for strong communities and an economy not wholly dependent on Wall Street.

    With some $2 million already collected and a contract with the Taxi Worker Alliance signed, passing an ordinance to approve using the six cents per fare for the health and disability fund should be an easy fix. But the taxi industry in New York is profitable and powerful and finances election campaigns. Still, that’s why New York City has public financing of campaigns and a pro-worker and pro-community mayor and City Council. Hopefully, they’ll quickly step up to the plate so that New York City’s taxi drivers can have their own organization provide essential benefits for their and their families’ health. 

    Richard Kirsch is a Senior Fellow at the Roosevelt Institute, a Senior Adviser to USAction, and the author of Fighting for Our Health. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform.

    Share This