Daily Digest - July 8: Will the Stock Market Boom Be a Bust for the Economy?

Jul 8, 2014Rachel Goldfarb

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Stiglitz: I'm 'very uncomfortable' with current stock levels (CNBC)

Roosevelt Institute Chief Economist Joseph Stiglitz emphasizes the difference between a strong stock market and overall economic strength, reports Antonia Matthews.

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Stiglitz: I'm 'very uncomfortable' with current stock levels (CNBC)

Roosevelt Institute Chief Economist Joseph Stiglitz emphasizes the difference between a strong stock market and overall economic strength, reports Antonia Matthews.

Union Wins $15 Minimum Wage for L.A. Schools' Service Workers (LA Times)

Howard Blume says the school board's unanimous approval of higher wages shows the growing power of the service workers' unions in Los Angeles, where many union members are also parents.

Why the Supreme Court’s Attack on Labor Hurts Women Most (The Nation)

Michelle Chen argues that limiting home health care workers' ability to organize will prevent many others in low-wage domestic work, primarily women, from improving working conditions.

  • Roosevelt Take: Roosevelt Institute Senior Fellow Richard Kirsch looks at the challenges presented by the Harris v. Quinn ruling.

Conservatives Say Cutting Unemployment Benefits Boosted the Jobs Numbers. This Chart Says Otherwise. (TNR)

Long-term unemployment is still falling at the same slow-and-steady pace as the past few years, writes Danny Vinik, indicating no link to the end of extended unemployment benefits.

Left Pushes Regulators to Lift Curtain on CEO Pay (The Hill)

Labor unions and other interest groups fear that upcoming regulations that require companies to disclose CEO-to-median-worker pay ratios will be diluted, says Megan R. Wilson.

Democrats Can Win with Populism — If They Play it Right (WaPo)

New polling data shows that many voters associate the Republican Party with big business and the wealthy, which Aaron Blakes sees as a key strategic point for Democrats in 2014.

Three Paths to Full Employment (AJAM)

Dean Baker's suggestions include increased government spending, as in the New Deal; reducing the trade deficit; and reducing the supply of labor with policies that push employers to hire more people.

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Daily Digest - July 7: In Corporate America, Pay Comes Before Patriotism

Jul 7, 2014Rachel Goldfarb

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On This Fourth of July, Meet Your Unpatriotic Corporations (The Nation)

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On This Fourth of July, Meet Your Unpatriotic Corporations (The Nation)

Greed comes far before patriotism for companies that reincorporate abroad to avoid paying their fair share of taxes, writes Roosevelt Institute board member Katrina vanden Heuvel.

Students Joining Battle to Upend Laws on Voter ID (NYT)

In North Carolina, college students are challenging the state's strict voter ID law on the grounds of age discrimination, reports Matt Apuzzo. This is the very first case of its kind.

American CEOs: In a Class All by Themselves (Truthout)

Sam Pizzigati points out that discussions of executive pay in the U.S. tend to leave out international comparisons, which demonstrate just how extreme American CEO pay can be.

  • Roosevelt Take: White papers from William Lazonick and Roosevelt Institute Fellow and Director of Research Susan Holmberg look at the problems created by high CEO pay, and steps to fix it.

Moaning Moguls (The New Yorker)

James Surowiecki looks at why America's wealthiest complain so much about their supposed mistreatment by society, and why those complaints lack merit.

Obama Calls for a New Crackdown on Wall Street (Mother Jones)

Erika Eichelberger says that the President is calling for further reforms, but has not presented any specific plans, and it isn't clear how he would get anything through Congress.

New on Next New Deal

Where Does $2 Trillion in Subsidies for the Wealthiest Hide in Plain Sight? Capital Gains Tax Breaks.

Preferential tax rates and loopholes for investment income make economic inequality worse, writes Harry Stein, who explains the necessity of reforms proposed in Roosevelt Institute Chief Economist Joseph Stiglitz's recent white paper.

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Where Does $2 Trillion in Subsidies for the Wealthiest Hide in Plain Sight? Capital Gains Tax Breaks.

Jul 6, 2014Harry Stein

Research shows that government subsidies for the 1 percent are creating greater inequality. A new white paper by Roosevelt Institute Chief Economist Joseph Stiglitz offers solutions.

Research shows that government subsidies for the 1 percent are creating greater inequality. A new white paper by Roosevelt Institute Chief Economist Joseph Stiglitz offers solutions.

“What’s the effective rate I’ve been paying? It’s probably closer to the 15 percent rate than anything.” Mitt Romney made national news with that statement during the 2012 presidential election, since it meant he paid a lower effective tax rate than many middle-class Americans. The simple reason for his low tax bill?  The tax code’s special treatment of investment income.

In a recent report published by the Center for American Progress, I examine how government subsidies for investment income are making economic inequality worse. The merits of subsidizing investment income are particularly questionable in light of new research published by renowned French economist Thomas Piketty in Capital in the Twenty-First Century. Piketty finds that economic inequality has increased dramatically in recent decades, and will get even worse as the rate of return on capital from investments largely owned by the wealthy exceeds the overall growth rate of the economy.

Nobel-winning economist Joseph Stiglitz, Chief Economist at the Roosevelt Institute, takes a hard look at subsidies for investment income in a new white paper on tax reform. Stiglitz advocates taxing capital gains and dividends at the same rates as ordinary income. Under current law, the federal government will deliver an estimated $1.34 trillion in subsidies to investors over the next 10 years in the form of reduced tax rates for capital gains and dividends. Sixty-eight percent of that money will go to the top 1 percent. Stiglitz argues that there is “no justification for taxing those who work hard to earn a living at a higher rate than those who derive their income from speculation.”

Stiglitz would also eliminate an expensive, but little-known, provision called “step-up in basis,” which subsidizes inherited wealth. By taking a step-up in basis, heirs selling inherited assets only have to pay taxes on the capital gain that took place since they received the asset – gains that accrued during the previous owner’s lifetime are never subject to income taxes. This tax break will cost about $644 billion over 10 years, with 21 percent of that subsidy going to the top 1 percent. For the wealthiest families, the benefits are staggering: 55 percent of the wealth in estates worth over $100 million is in the form of unrealized capital gains, meaning that these families will never pay income taxes on the majority of their earnings since the heirs will benefit from step-up in basis.

Defenders of tax breaks for investment income argue that these subsidies encourage savings and grow the economy, but over the past 60 years there has been no obvious relationship between economic growth and the top capital gains tax rate. Our economic problems are rooted in a lack of aggregate demand, but tax subsidies for investment income reduce demand even further for two reasons. First, they encourage investors to hold onto their wealth and consume less. Second, these subsidies increase economic inequality by primarily benefiting the rich, who tend to consume a much smaller share of their income than poor or middle-class individuals.

The assumption underlying subsidies for investment income is that wealthy investors are “job creators,” but Stiglitz points out that “much of the income of the top arises from rent seeking (wealth appropriation) – and thus impedes growth and efficiency.” Stiglitz is using the term “rent seeking” in a broad sense to mean income from ownership, monopolies, or special treatment from the government. Rent seeking does not grow the economy; it only redistributes wealth from within the economy to rent seekers. For example, landowners get their income from rents paid by tenants. Stiglitz points out that land is an ideal target for taxation, since taxes cannot possibly reduce the supply of land. Yet the United States is taking the opposite approach by allowing landowners to fully benefit from step-up in basis and reduced tax rates for capital gains.

Tax breaks for investment income are massive in scope, but often overlooked in discussions about the proper size and role of the federal government. These subsidies are part of what Suzanne Mettler calls the “submerged state,” government programs that deliver benefits indirectly, with recipients often not even recognizing that they are benefitting from public assistance.

But government programs administered through the tax code are still government programs. It makes no meaningful difference to the government or to beneficiaries whether a subsidy is delivered in the form of a check from the government, or as a reduction in taxes the beneficiary would otherwise owe (which often takes the form of a higher tax refund check from the government). The nonpartisan Joint Committee on Taxation explains that tax breaks “are similar to direct spending programs that function as entitlements to those who meet the established statutory criteria.”

The reaction Mitt Romney’s comments may be the best example of just how invisible government subsidies for investment income are for most Americans. Watching Romney deliver the full statement and explain that most of his income comes from investments, it was clear that he did not think he was making news. And he was right – Romney’s statement that day should not have been news. We already knew that he made most of his money from earlier investments, and the tax rate at the time on capital gains and dividends was 15 percent. The only reason Romney’s statement made headlines was that most Americans were either unaware of preferential tax rates for investment income, or did not realize the staggering benefits this subsidy delivers to extremely wealthy individuals.

It is no coincidence that government subsidies for investment income are delivered through the submerged state. These programs are not popular when the American people can clearly see their impact, and they add to the sense that the economic game is rigged for those at the top.

Harry Stein is the Associate Director for Fiscal Policy at the Center for American Progress. Follow him on Twitter @HarrySteinDC.

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Daily Digest - July 3: America's Workforce is Still Segregated After All These Years

Jul 3, 2014Tim Price

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On the Civil Rights Act's 50th, Workplaces Remain Segregated (Colorlines)

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On the Civil Rights Act's 50th, Workplaces Remain Segregated (Colorlines)

Though the Civil Rights Act brought legal segregation to an end decades ago, people of color are still being pushed into lower-paying occupations, writes Rinku Sen.

  • Roosevelt Take: A new infographic from the Roosevelt Institute's Future of Work initiative outlines five policy proposals that would promote an inclusive workforce.

Domestic Care for Family Members Isn't Valued If Its Givers Are Exploited (Truthout)

In a book excerpt, Sheila Bapat cites research from Roosevelt Fellow Annette Bernhardt and others to show how domestic workers are shut out from standard labor protections.

We Know We Work Too Much. Now How Do We Stop It? (New Republic)

Bryce Covert looks at paid leave and vacation laws, health care reform, work-sharing programs, and other potential statutory solutions to America's oversized workweek.

Porsches, Potholes and Patriots (NYT)

The Fourth of July should prompt a celebration of America's great public investments -- and an acknowledgment that they depended on taxes, writes Nicholas Kristof.

Census: One-Quarter of Americans Now Live in "Poverty Areas" (Slate)

Data from 2010 shows that a growing number of Americans live in areas where more than 20 percent of the population is below the poverty line, notes Jordan Weissmann.

Yellen Drives Wedge Between Monetary Policy, Financial Bubbles (Reuters)

Fed chair Janet Yellen says monetary policy is the wrong tool to curb financial risk, report Michael Flaherty and Howard Schneider. She sees no need to raise rates at present. 

New on Next New Deal

Graduated and Living With Your Parents? You May Be Luckier Than You Think.

Millennials forced to move home may have their economic futures determined by where they were born, writes Roosevelt Campus Network Operations Director Lydia Bowers.

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Graduated and Living With Your Parents? You May Be Luckier Than You Think.

Jul 3, 2014Lydia Bowers

Millennials who are being forced to move back home may have their economic futures determined by the affluence of their birthplace rather than their own ability.

Millennials who are being forced to move back home may have their economic futures determined by the affluence of their birthplace rather than their own ability.

If you could live in Westchester County, NY or Logan County, OH, which would you choose? What if you were young, college-educated, and just entering the workforce? Recent articles about the return of college-educated Millennials, “the boomerang generation," to their parents' homes focus on how income inequality has contributed to the phenomenon overall. But what is critically overlooked is how this situation stratifies inequality within the Millennial generation and reinforces generational economic privilege.

Compare Sarah and Jess. Both graduated from Notre Dame University in 2013 with degrees in English. Both have similar GPAs and campus activities, and as graduation neared, neither was able to find a job. But what makes them different is that after graduation, Sarah moved back in with her parents in Westchester County while Jess moved home to Logan County.  Westchester County has a per capita income of $48,385, an opportunity score (an aggregated score measuring the educational attainment, economic strength, and community health of a town or county) of A-, and is located within easy commuting distance of New York City – a major metropolitan hub with over 8 million residents that provides ample opportunity for job-hunting. Logan County has a significantly lower per capita income of $22,993, and an opportunity score of C+. The nearest metropolitan hub, Columbus, is over an hour away, requiring a burdensome commute for job-hunting. These two women, who were nearly indistinguishable on paper at graduation, have profoundly different economic outlooks after moving home.

Let's imagine both women have the national average amount of student loan debt, $24,301, averaging out to payments of $279.66 a month for the next 10 years. And let's be generous and assume both women are lucky enough to find jobs in their fields at the median per capita income for their respective towns. Sarah, with almost twice the income of Jess, is able to double her monthly loan payments, becoming debt-free five years earlier than Jess and saving over $4,000 in interest. This puts Sarah on the path to financial stability much sooner.

A college degree used to be a ticket out of a predetermined economic destiny based on your location of birth. In a country where the likelihood that a child raised in the bottom fifth income level will rise to the top fifth can range from 4 percent to 25 percent depending on county of residence, college was traditionally viewed as the equalizer – a chance to escape the economic limitations of your hometown. But, for the one-in-five people in their 20s and early 30s currently living with parents, this is no longer the case. With the rising costs of rent in almost every major metropolitan area, many unemployed or underemployed college graduates will find moving home their only option. And if they are fortunate to have a home in an economically robust area, they will have leverage over their counterparts elsewhere. And as most children who come from economically robust areas come from financially privileged families, this is an example of income inequality growing starker through generational privilege.

College graduates aren’t looking for special treatment, but simply the chance to define their own economic destiny. Policies that work in tandem to address the rise in student loan debt, the affordability of housing in urban areas, and the economic growth needed to create jobs for young graduates are part of the solution. But ultimately, we need to address inequality and acknowledge that for some graduates opportunity is not based on potential but hometown. And that a familial zip code matters more than personal ability should be a rallying cry for anyone concerned about the future of a country once viewed as the "land of opportunity” for all.

Lydia Bowers is Operations Director for the Roosevelt Institute | Campus Network.

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Daily Digest - July 2: Public Unions Meet the Conservative Guillotine

Jul 2, 2014Tim Price

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The Wage War for Public Workers' Unions (MSNBC)

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The Wage War for Public Workers' Unions (MSNBC)

Harris v. Quinn shows Supreme Court conservatives want to "weaponize the First Amendment" against public unions, says Roosevelt Institute Fellow Dorian Warren.

The Supreme Court Doesn't Care for Caregiving Workers (HuffPost)

Roosevelt Institute Fellow Annette Bernhardt writes that the Harris decision is just the latest example of how our public policy treats caregiving as second-class work.

Are the Authoritarians Winning? (NYRB)

Authoritarianism is gaining traction as democracies falter, writes Michael Ignatieff, but Roosevelt Institute Chief Economist Joseph Stiglitz's new white paper offers a comprehensive solution to the liberal state's fiscal crisis. (Note: This article is behind a paywall.)

How Bad Policy is Making the Great Recession's Damage Permanent (WaPo)

Austerity and low inflation are holding back productive capacity, writes Matt O'Brien, and unless they're willing to take more risks, some countries may never fully recover.

5 Ways Wall Street Continues to Sandbag the Economy, and How to Fix It (Prospect)

To set the economy back on track, Democrats must stop propping up the financial sector and undertake a massive public investment program, argues Robert Kuttner.

Low-Wage Workers' Newest Ally Is a Washington Bureaucrat (The Nation)

Zoe Carpenter talks to David Weil, the new director of the Labor Department's Wage and Hour division, about his plans to enforce and improve standards in the workplace.

New on Next New Deal

The Supreme Court's One-Two Punch Against Women's Health: McCullen and Hobby Lobby

Rulings against the contraceptive mandate and buffer zone laws will create more barriers between women and basic health services, argues Roosevelt Fellow Andrea Flynn.

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The Supreme Court's One-Two Punch Against Women's Health: McCullen and Hobby Lobby

Jul 2, 2014Andrea Flynn

The Court's rulings place more barriers, both physical and financial, between U.S. women and basic health care.

The Court's rulings place more barriers, both physical and financial, between U.S. women and basic health care.

In the last week the Supreme Court announced two decisions that could dramatically change the landscape of women’s health access in the United States. It will be some time before we know the full impact of McCullen v. Coakley and Burwell v. Hobby Lobby, but in the short term two things are for sure. The decisions will make it more difficult and less safe for many women to get the care they need, and they will undoubtedly embolden a conservative movement that hardly needs fortification.

The last three years brought record setbacks to women’s health and rights. More abortion restrictions were enacted between 2011-2013 (205) than in the entire previous decade (189). Today nearly 90 percent of U.S. counties do not have an abortion provider and more than 56 percent of U.S. women live in a state hostile to abortion. In many states the procedure has essentially been regulated out of existence. But it’s not just abortion rights that are under attack. The days of conservatives being “anti-abortion” but pro-family planning are long behind us. Today’s conservatives view birth control as the gateway drug to abortion, and regulate it with the same zeal they once saved for abortion.

Restrictions to Title X funding are closing publicly funded clinics around the country. Those clinics serve to provide reproductive health services to low-income and young women, and the majority do not even provide abortions. There is reason to fear that other conservative states are following the lead of Texas, where thousands of women are dealing with the consequences of a complete lack of access to basic health care thanks to lawmakers who have closed a record number of clinics. 

Making matters worse, today 24 states are not participating in the Medicaid expansion originally mandated by the Affordable Care Act (ACA), leaving two-thirds of poor blacks and single mothers and more than half of low-wage workers uninsured.

It’s against this backdrop that we have McCullen and Hobby Lobby, two decisions that are effectively a one-two punch to U.S. women. They allow employers to erect financial barriers to contraceptive choice and embolden protesters to serve as physical and emotional barriers to women’s basic health care. 

In McCullen, the Court struck down as a violation of free speech a Massachusetts law that provided a 35-foot “buffer zone” around clinics that provide abortion. The law was created to protect patients entering clinics, and many states have similar regulations in place. It’s unclear what will happen to those other buffer zones. It’s also more than slightly ironic that the Supreme Court, the very body responsible for upholding freedom of speech, has a 100-foot buffer zone that is still intact.

Protesters will feel vindicated in their attempt to persuade, intimidate, threaten, and terrorize women from accessing care to which they are constitutionally guaranteed. Last weekend the Boston clinic at the heart of the McCullen case saw a threefold increase in protesters. That’s just in Massachusetts. Clinics in more conservative states regularly see hundreds of protesters on a given day.

Hobby Lobby was just one of more than 50 companies (supported by organizations like the Beckett Fund for Religious Liberty) that took issue with the ACA’s “contraceptive mandate,” the requirement that all employer-based health plans fully cover, without cost sharing, all FDA-approved methods of contraception. These companies filed claims against the mandate, arguing that intra-uterine devices (IUDs) and emergency contraception (EC) constitute abortion and therefore being required to provide coverage for those methods was a violation of their religious liberty. Never mind that by all accepted medical standards those methods prevent, not terminate, pregnancy. The Court ruled in favor of Hobby Lobby, allowing “closely held” companies – generally understood to be those having more than 50 percent of the value of their stock owned by five or fewer individuals – to refuse coverage of certain contraceptive methods.

So, what happens now? Well, most women who work for Hobby Lobby and other such companies will no longer have access to the contraceptive method of their choice. They will have to decide if they want to pay for those methods out of pocket or go to a clinic where they can receive subsidized care, if they are lucky enough to have access to one. This will place additional and unnecessary pressure on an already embattled public health infrastructure.

The majority claimed the Hobby Lobby ruling was narrow and would not have the sweeping consequences suggested in Justice Ginsburg’s scathing and on-point dissent. I’m not convinced. According to Harvard Business Review, 90 percent of U.S. companies are considered closely held, and those companies employ more than 51 percent of U.S. workers. There are already at least 80 other cases waiting to follow in Hobby Lobby’s footsteps. Given conservatives’ strategic organizing and employers’ willingness to carry the anti-reproductive rights, anti-Obama, anti-ACA banner, others will surely join the cause.

For the time being, the ACA – and the mandate – remain intact, even if somewhat fractured. We should continue to fight for the full implementation of the ACA, a historic – and by all measures successful – piece of legislation that is advancing the vision FDR articulated more than 70 years ago when he called for a Second Bill of Rights. That vision included medical care to allow all Americans to achieve and enjoy good health.

In falsely pitting freedom of speech and religion against women’s rights – as if women don’t also have rights to those same freedoms – the Supreme Court has given momentum to an already fast-moving train. Conservatives will only have more resolve to continue tearing down the building blocks of women’s health and rights. It’s going to take a lot to stop them. A lot of outrage, a lot of action, and a lot of engaged voters committed to standing up for women’s rights. Here’s hoping we can make that happen.

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

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Daily Digest - July 1: SCOTUS Rulings Increase Burden on Women and Workers

Jul 1, 2014Tim Price

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

Supreme Court Delivers a Win for Hobby Lobby and a Loss for US Women (The Hill)

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

Supreme Court Delivers a Win for Hobby Lobby and a Loss for US Women (The Hill)

The majority ruled that the contraceptive mandate was a burden on religious employers, but ignored the burden of women's health costs, writes Roosevelt Institute Fellow Andrea Flynn.

The Best Way to Fix the Employer Mandate (The Hill)

An additional payroll tax on employers who don't provide health coverage would help low-wage workers and raise revenue, argues Roosevelt Institute Senior Fellow Richard Kirsch.

Why is Washington Still Protecting the Secret Political Power of Corporations? (Guardian)

The Securities and Exchange Commission could require corporations to disclose more of their political contributions, writes Alexis Goldstein, but it has proved reluctant to act.

The $236,500 Hole in the American Dream (New Republic)

The wealth gap between white and black Americans is growing, writes Dean Starkman, and closing it will take a major overhaul of housing policy and other asset-building strategies.

A Grieving Father Pulls a Thread That Unravels Illegal Bank Deals (NYT)

Jessica Silver-Greenberg and Ben Protess retrace the investigation that led to BNP being caught funneling money for Iran and Sudan and ultimately paying a record $8.9 billion penalty.

New on Next New Deal

SCOTUS Ruling Doesn't Gut Unions, But Creates New Challenges for Care Workers

The Supreme Court's decision in Harris v. Quinn will make it harder for home care workers to organize for better pay and jobs, writes Roosevelt Institute Senior Fellow Richard Kirsch.

Money in Politics is a Local Problem, Too

Rethinking Communities Brain Trust member Eugenia Kim writes that large donors have come to dominate even local politics, but communities have the power to resist them.

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Money in Politics is a Local Problem, Too

Jun 30, 2014Eugenia Kim

Large donors dominate our politics even at the local level, but communities have the power to overcome them.

Large donors dominate our politics even at the local level, but communities have the power to overcome them.

Last summer, I interned for mayoral candidate Gary Holder-Winfield in New Haven, CT. New Haven is not a small town. While it’s 130,660 residents pale in comparison to New York’s 8,405,837, it is a major city in Connecticut. In New Haven, which is primarily Democratic, the real race for mayor was in the primary. In a local election with seven candidates, there are not going to be seven radically different perspectives.  Most of the candidates generally held the same values, to the point that the race was decided more on the likability of the candidates then the content of their platforms.

In trying to differentiate Gary Holder-Winfield from the field, we got in touch with voters directly. I saw him work a full day at his job and then come in to the campaign office and knock on doors for hours until after dark on weekdays, and then walk all day knocking on doors on the weekends, rain or shine. I saw him write his personal phone number on literature to give out to his community.

I also saw Holder-Winfield forced to drop out because of lack of money. He had agreed to fund his campaign through the Democracy Fund, which restricts the amount of campaign expenditures allowed, limits individual contributions to $370, and prohibits any PAC or business from donating all together. In return, the Democracy Fund matches donations up to $125,000 and provides a $19,000 grant for the primary and general elections. Ultimately, all of the candidates that ran in the mayoral election with the Democracy Fund were defeated. While the new mayor of New Haven, Toni Harp, is extremely qualified and will do well as New Haven’s next mayor, I am disappointed that the process of getting there required raising more than half a million dollars.  

Despite Holder-Winfield dropping out of the race, I was not yet completely disheartened.  But when I went to work on aldermanic campaigns, I realized that money was the largest barrier to entry in politics today. Aldermen in New Haven are the equivalent of city councilmen. They each represent particular neighborhoods in New Haven, making their concerns and constituents hyper-local. Some sitting members on the Board of Aldermen in New Haven have been there for decades without a serious challenge, in part because local interest groups have backed them financially.

By helping to run the campaigns of aldermanic candidates who wanted to run free of these local interests and maintain a campaign on very few funds, I learned what an uphill battle it was to get money out of politics even at such a local level. We backed five candidates; only one was elected. It’s sobering when paying for lawn signs is out of a campaign’s budget. It’s disheartening to see a second candidate  I worked for drop out because of funding. It’s devastating that a group of dedicated volunteers can spend weeks systematically knocking on doors and hours on phone calls with potential voters, only to have the incumbent pay for enough canvassers in the week leading up to election day to pull off the votes to win.

That summer, it became very clear to me that democracy came with a high price. This is not a call to action for my congressman or senator to advocate for campaign finance reform; I am too realistic for that request. My call to action is for people who care about their communities. Some people may not vote because they feel like their votes do not matter, and it's easy to understand why in heavily partisan national elections. However, the closest aldermanic race was won by 81 votes. Local elections are where our votes matter most, and where we are least aware of where power lies.

Money in politics has permeated the governance of local issues, so we need to start identifying the drivers of local politics. In New Haven, politics are centered on the effects of Yale University as an anchor institution. Aldermanic races are shaped by the influence of the unions partnered with Yale. We need to impress the importance of local elections and analyze the drivers of these local communities. We must identify who holds power, economically and socially in these communities, and harness that power. Locally, there is still a chance for the voices of voters over large donors.

Eugenia Kim is the Rethinking Communities Intern at the Roosevelt Institute | Campus Network, and a member of the Rethinking Communities Brain Trust.

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SCOTUS Ruling Doesn’t Gut Public Unions, But Creates New Challenges for Care Workers

Jun 30, 2014Richard Kirsch

The Supreme Court's decision in Harris v. Quinn will make it harder for home care and child care workers to organize for better pay and higher quality jobs.

The Supreme Court's decision in Harris v. Quinn will make it harder for home care and child care workers to organize for better pay and higher quality jobs.

A huge sigh of relief mixed with curses. That’s my reaction to the Supreme Court’s decision today to block home care workers in Illinois from being required to pay union dues, while continuing to allow public employee unions to collect dues from all the workers they represent. The decision in Harris v. Quinn blocks the right-wing assault against one of the most important pillars of progressive infrastructure, public employee unions, but will add to the challenge of raising wages and benefits in the surging low-wage workforce.

First, some background on the case: As part of the right’s ongoing attack on working people, a right-wing legal group recruited a handful of home care workers in Illinois to challenge the state's requirement that the workers pay union dues. The workers are employed by individual patients but are funded by Medicaid.

Having unions, in this case SEIU, represent home care workers is part of an admirable strategy to extend collective bargaining to workers who are publicly funded even if they do not work directly for the government. Since federal law does not provide collective bargaining rights to either public employees or domestic home care workers, using state law to organize these workers, who typically receive low pay with no benefits, is vitally important to their own well-being and to building a middle-class-driven economy.

The National Right to Work Foundation’s attorney argued, as Lyle Denniston explains at SCOTUSblog, that "anything a public employee union does is an attempt to shape matters of 'public concern,' and it should not be able to compel support -- even for part of the monthly dues -- from workers who oppose the union's public policy ambitions."

If the Court had followed that logic, it would have reversed its own precedent, set in the 1977 Abood v. Detroit Board of Education decision, which held that public employees could be required to pay dues for collective bargaining but not for purely political purposes. Fortunately, the Court didn’t go there today, which means that states and localities, which have the power to regulate public employee unions, will continue to be able to require that all employees who work directly for the government pay dues to the union that represents them. While this should have been a no-brainer given the Court’s precedent, it is a huge relief and enormously important to preserving the ability of public employees to organize together for decent wages and benefits. And it is clear defeat for the right’s campaign to eviscerate one of the most important progressive institutions.

Instead, the Court’s decision today focused on whether home care workers are fully public employees. In a 5-4 ruling written by Justice Samuel Alito, it decided that these workers are only partial-public employees and so cannot be required to pay dues to a union that represents them. The ruling will make it much more difficult to organize the growing number of low-wage workers who care for the elderly and disabled through home care and for young children through child care.

Home care and child care workers get paid very little, have few benefits, and make up a big chunk of the surge in low-wage jobs that defines today’s economy. But it is a huge challenge to organize workers who are directly employed by individuals. The answer has been to take advantage of the fact that the public is paying for a big chunk of their earnings by treating them as public employees, as Illinois Governor Pat Quinn did in the Harris v. Quinn case. The Court’s rejection of this approach creates new roadblocks to home care and child care workers who are attempting to organize unions capable of bargaining for better pay and higher quality jobs.

The solution may to be to have the public take over home care and child care. If public agencies employed these caregivers, financed as they are now by a combination of public funds and sliding-fee payments by the individuals who use their services, these workers would be full-fledged public employees. This strategy will require a major change in the organization of care, but should be tested where there are progressive local and state governments. Its success would be a deliciously ironic turn against the right’s campaign to shrink government, and a big step toward creating a good-jobs economy to power an America that works for all of us.

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.

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