Daily Digest - August 18: Looking for Strong Statements on Ferguson

Aug 18, 2014Rachel Goldfarb

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Did Obama’s Response to Ferguson Fall Short? (Melissa Harris-Perry)

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Did Obama’s Response to Ferguson Fall Short? (Melissa Harris-Perry)

Roosevelt Institute Fellow Dorian Warren questions why President Obama has avoided unequivocal language to condemn the police state in Ferguson. His segment begins at 6:40.

Why the Liberal Love for Rand Paul is Wrong (MSNBC)

Senator Paul blames big government for what he calls the "erosion" of Black civil liberties, but Dorian Warren counters that local governments do plenty to earn the distrust of the Black community.

Phony Capitalism (Harper's Magazine)

In this excerpt from his recent white paper, Roosevelt Institute Chief Economist Joseph Stiglitz suggests better tax policies could lead to a less economically stratified economy.

‘Slack’ in Job Market Hurts Wage Growth, Chicago Fed Paper Says (WSJ)

The paper notes that the slack labor market, with so many unemployed, has an even stronger impact on wage growth for those whose wages are already low, reports Pedro da Costa.

Paul Ryan’s Welfare Reform Ideas Are Even Worse Than You Think (The Nation)

Michelle Chen says that Ryan's proposal for welfare reform marks poor people as the problem in need of fixing, rather than the economic and social structures that hold up poverty.

20 Tax Dodgers: $240 Million for CEOs, Big Loss for the American People (The Fine Print)

Scott Klinger ties tax-deductible CEO pay to a USA Today list of companies that paid no federal income taxes last quarter, and says the combination highlights just how broken our tax system is today.

New on Next New Deal

Rioting Mainly for Fun and Profit: The Neoconservative Origins of Our Police Problem

Roosevelt Institute Fellow Mike Konczal ties increased use of police force to neoconservative notions of the "urban crisis" as a failure of liberalism to be targeted with harsh enforcement.

Suspensions are Keeping Students of Color from their Diplomas

Roosevelt Institute Summer Academy Fellow Bassem El Remesh argues that Minnesota needs to adopt stricter rules for when suspensions are permitted due to the impact on graduation rates.

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Daily Digest - June 27: NLRB Ruling is Politics as Usual

Jun 27, 2014Rachel Goldfarb

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

The Myth of America’s Golden Age (POLITICO Magazine)

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

The Myth of America’s Golden Age (POLITICO Magazine)

Growing up in Gary, Indiana gave Roosevelt Institute Chief Economist Joseph Stiglitz early insight into inequality, which is a result of politics and not an economic inevitability, he says.

Presidential Appointments Were Already a Total Nightmare. They Just Got Worse. (MoJo)

Patrick Caldwell breaks down the NLRB v. Canning decision, and explains how it will increase obstructionism in Congress by reducing real recesses.

National Labor Relations Board v. Noel Canning (Supreme Court)

President's Obama's appointments to the NLRB in December 2011 occurred during a three-day adjournment, not a true recess, so the Supreme Court has ruled the appointments invalid. Justice Breyers delivers the Court's opinion.

What Happened When the City of Boston Asked Teenagers for Help With the Budget (Next City)

Hollie Russon Gilman reports that when 12-25 year olds were given responsibility for $1 million of Boston's budget, they funded parks, the arts, and educational technology.

To Get a Fair Share, Sharing-Economy Workers Must Unionize (AJAM)

Susie Cagle talks to Uber driver Ramzi Reguii about his work to organize his fellow drivers. They've already rallied together to prevent Uber from requiring some drivers to buy new cars.

  • Roosevelt Take: Roosevelt Institute | Campus Network Operations Director Lydia Bowers looks at how the sharing economy exploits unprotected workers.

More Than Three Quarters of Conservatives Say the Poor “Have it Easy” (WaPo)

Christopher Ingraham sees this widespread agreement among conservatives as the most striking result in the Pew Research Center's massive survey of American politics.

The Crisis of Student Loans is Real, No Matter What Pundits Tell You (The Guardian)

David Dayen says the Brookings student debt report fails by focusing on the average income of college graduates overall, which ignores how badly the job market has harmed recent graduates.

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Taking on Big Business Wage Theft

Apr 2, 2014Harmony Goldberg

Lawsuits show that the fight against wage theft is heating up, but workers shouldn't have to sue their employers to get paid what they're owed.

Lawsuits show that the fight against wage theft is heating up, but workers shouldn't have to sue their employers to get paid what they're owed.

Despite the extensive press coverage of the fight of fast-food workers for a $15 hourly wage, one recent development hasn’t gotten much attention: fast food workers around the country have started to win significant wage theft lawsuits against McDonald’s franchisees, to the tune of hundreds of thousands of dollars. These lawsuits raise an important question: How has McDonald’s been able to get away with stealing hundreds of thousands of dollars from low-wage workers? The answer is straightforward. Our system for enforcement has been so severely weakened that many employers are able to regularly violate workers’ basic rights. And the law itself is broken. Its structure allows corporations like McDonald’s to escape responsibility for the conditions in their workplaces.

In February, student guest workers won a lawsuit that charged a McDonald’s franchise in Pennsylvania with wage theft. They had been paid sub-minimum wages, denied overtime pay and charged exorbitant prices for company housing. The Department of Labor required the franchise to pay $205,977 to both guest workers and native-born workers at the franchise. This victory was rapidly followed by a wave of other lawsuits around the country.  

Last week, McDonald’s workers in three cities launched highly publicized cases charging the corporation with wage theft. These workers had experienced many types of wage theft. The workers in California claim that they were not paid for overtime work. In Michigan, workers are asserting that they were required to show up for work but were not allowed to clock in. Workers in New York allege that were not compensated for the time they spent cleaning their uniforms, required to do work off the clock and not paid overtime. The New York suit was almost immediately successful. Last week, seven franchises agreed to settle for almost $500,000.

McDonald’s workers are not alone. Wage theft has become a widespread problem in low-wage industries in the United States. An influential study found that more than two-thirds (68 percent) of workers had experienced some form of wage theft in their previous week of work: they were paid below the minimum wage, not paid for overtime, required to work off the clock or had their breaks limited. An organization of fast food workers in New York City surveyed workers and found that 84% of workers had experienced wage theft in the last year.

Addressing wage theft will take a two-pronged solution: rebuilding the enforcement system in the U.S., and cutting through the smokescreen of subcontracting and franchising to hold employers responsible for the wages and working conditions in their workplaces. 

The enforcement regime in the United States has been significantly weakened over the last several decades. There has been an overall downward trend in funding for the Department of Labor. The number of labor inspectors had plummeted for years. The Obama administration has added new inspectors, but not enough to make up for the long-term decline. Meanwhile, the number of workers who need protection has grown. This pattern has to be turned on its head. If rampant wage theft is to be stopped, we need to radically increase the number of labor inspectors on the ground.

But – as Annette Bernhard points out in a new paper – increased funding is not enough. The enforcement system that we have is not well structured to deal with our current economy. It must be transformed. The penalties for employers who violate workplace regulations must increase. Enforcement agencies should partner with organizations like unions and worker centers that are in daily contact with workers. These organizations can educate workers and employers about workplace regulations, and they can provide an ear to the ground to help identify violators.

Even a radical transformation of the enforcement regime will not be enough in today’s economy. We need to change the law to deal with changes in the structure of employment. Right now, McDonald’s is structured so that the franchise owners are technically considered to be the employers. They are held legally responsible for wage violations in their stores, leaving McDonalds itself off the hook. Both recent legal victories charged franchise owners rather than the McDonald’s corporation itself. McDonald’s is shielded from blame while it continues to reap the majority of the profits that come from mistreating workers.

We need a new definition of what it means to be an employer. The current definition makes it impossible for workers to hold their corporate employers – the ones who are setting the real terms of their work – responsible. The two remaining McDonald’s wage theft cases target both the franchise owners and the McDonald’s corporation itself. That challenges the narrow definition of employer, which limits responsibility to the franchise owner. The time has come for the law to be changed. All employers - from the front-line employers up to top of the employment chain – should be legally recognized as such so they can be held accountable for the conditions in their workplaces.

Wage theft that has become an endemic problem in today’s economy. Low-wage workers should not have to turn – again and again – to private lawsuits as a solution. They deserve the basic right to be paid for their labor. To get there, we need full funding and comprehensive reform of the enforcement system in the United States, and we need legal reforms that hold central employers responsible for the conditions in their workplaces. 

Harmony Goldberg is the Program Manager for the Roosevelt Institute's Future of Work Initiative.

Photo copyright Annette Bernhardt, via Creative Commons license.

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The Right Takes Aim at Public Sector Unions in a New Supreme Court Case

Jan 23, 2014Richard Kirsch

A dispute over whether home care workers in Illinois can be required to pay union dues is part of a much larger strategy to undermine the progressive power base.

A dispute over whether home care workers in Illinois can be required to pay union dues is part of a much larger strategy to undermine the progressive power base.

You have to hand it to the right wing: it understands the importance of institutional power more than much of the liberal establishment. It took down ACORN, the organization that registered the most low-income voters of color in the nation, and Democrats in Congress and many big liberal foundations went along with it. Its relentless, decades-long campaign against the labor law that protects private sector organizing has slashed the share of unionized private sector workers to less than 7 percent, while a succession of Democrats in the White House and Congress have stood by.

Since 2010, the right has been focusing its attacks on public sector workers, one-fourth of whom are represented by unions with collective-bargaining rights. It has aimed to weaken bargaining rights in Midwestern states with long histories of union representation and has had (too) much success. This week, it brought that fight to the Supreme Court, in a case that could destroy the financial base of the biggest remaining source of support for government and vital domestic services.

The case is Harris v. Quinn, in which a group of home care workers in Illinois is challenging 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 of extending 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 get low pay with no benefits, is vitally important to their own well-being and to building a middle-class driven economy.

However, the debate among the Supreme Court justices yesterday did not focus on the narrow question of whether Illinois Governor Rob Blagojevich had the power to categorize the home care workers as public employees. Instead, the justices debated whether, because issues of wages and benefits for public employees are inevitably and intrinsically matters of public policy, compelling workers to pay union dues would be an infringement on free speech and association.

The Illinois workers are represented by the National Right to Work Foundation, whose attorney, William Messenger, was eager to expand the case, which suggests it was developed as a political weapon, not a true complaint by a handful of workers about paying dues. Messenger 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.”

Just so nobody missed the ideological stakes at the heart of this legal argument, Justice Anthony Kennedy argued that workers who favor shrinking the size of government would have their First Amendment rights trampled if the union argued to expand the workforce. The same logic would apply to the union defending the current size of the workforce or how much workers get paid.

Logically, it is impossible for a public sector union to represent its members’ interest in keeping their jobs or in how much they get paid without affecting public policy. This point was made by SEIU’s attorney Paul Smith, who said, “Any outcome of a negotiation of a collective bargaining agreement involving public employees will involve the expenditure of public money in a variety of ways.”

Of course, public employee unions' interest in defending their members is why those unions support increased taxes and funding of government programs. The union positions are not always progressive. Unions sometimes support regressive tax increases. Sometimes AFSCME, which represents corrections officers, lobbies for stricter sentencing or against closing of prisons. But on the whole, in advocating for their members, public employee unions support maintaining and expanding public services, oppose privatization, and are a major source of organizing, funding, and lobbying for those policies and an absolutely vital part of the progressive infrastructure. Hence they are a big target for the right.

When these issues have been debated in the past, the Supreme Court has recognized the legitimacy of required union dues for public employees while insisting that political contributions be voluntary. As Adam Liptak explains in the New York Times, “In 1977, in Abood v. Detroit Board of Education, the Supreme Court said that teachers who declined to join a union could nevertheless be required to help pay for the union’s collective bargaining efforts to prevent freeloading and ensure ‘labor peace.’ But workers may not be forced to help pay for a union’s purely political activities, the court said.”

That argument may explain why Solicitor General Donald B. Verrilli Jr. agreed that advocating for increased Medicaid reimbursement would not be by itself a permissible union activity, but argued that the state’s interest in designating a union to maintain labor peace was the determining factor in supporting the mandatory dues. Verilli’s argument may be a good one before this Court, but it defies logic and avoids the real issue of the interwoven nature of public policy and public worker bargaining. The Court should recognize that the effective right of association in public employee unions depends on the unions engaging in public policy to improve their members’ working conditions.

The Supreme Court reporters whom I read all agreed that the Court is unlikely to overturn Abood and outlaw mandatory dues by public employees, with one pointing out that the Court affirmed that position in 2007 in an opinion written by Justice Scalia. There is some reason to think that Chief Justice Roberts could avoid the issue by narrowing the ruling to the question of whether Illinois can designate the home care workers as public employees.

However, a decision to overturn mandatory dues collection by public employees would be a body blow to Americans who believe in establishing collective responsibility for common goods by raising taxes and spending public dollars on government. 

Public employee unions, and unions that are working to develop new ways to represent workers in the private sector who are paid with public dollars, are a leading force for creating opportunity and security in an America that works for all of us. They will continue to be a target of the right. Progressives at every level must support them and work to expand, not restrict, their reach.

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.

 

Image via Thinkstock

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Daily Digest - December 17: The Future of High-Speed Fiber Runs Through City Hall

Dec 17, 2013Rachel Goldfarb

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The quest for high-speed fiber: a conversation with Susan Crawford (The Verge)

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The quest for high-speed fiber: a conversation with Susan Crawford (The Verge)

Russell Brandom and Roosevelt Institute Fellow Susan Crawford discuss how America can improve its high-speed Internet access. Susan says she's given up on the federal government and is focusing on lobbying mayors as the best option to get high-speed fiber access to the most Americans.

The Financial Crisis: Why Have No High-Level Executives Been Prosecuted? (NYRB)

Judge Jed S. Rakoff speculates that a major reason for the lack of individual prosecutions for financial fraud is the systemic shift toward prosecuting companies instead of their agents, which saves time and resources but is not, he argues, the most morally sound option.

Secret Inside BofA Office of CEO Stymied Needy Homeowners (Bloomberg)

Hugh Son looks at the various ways that Bank of America prevented homeowners from successfully modifying their mortgages, from repeated requests for paperwork to understaffing the warehouse that all the related mail passed through.

Finally Paying for Wal-Mart’s Sins: Wage Theft Settlement Yields Millions (Salon)

Josh Eidelson reports on a proposed settlement in a wage theft case that would grant one group of warehouse workers $4.7 million. The warehouse was operated by a contractor, which will pay the fine, but there's an ongoing parallel case that names Wal-Mart as a defendant.

Stealing Pennies from Chileros (In These Times)

Joseph Sorrentino reports on green chile farming in New Mexico, where workers' hours are doctored to create the illusion of compliance with minimum wage laws. Even when the workers do report their bosses for violations of labor law, nothing seems to come of it.

The Year in Preview: Paul Ryan's Misguided Poverty Plan (TAP)

Monica Potts examines Paul Ryan as the face of anti-poverty work in the Republican Party. She says that for all that Ryan wants to position himself as a leader in the modern War on Poverty, he appears to have little interest in getting government involved in the fight.

How A For-Profit College Created Fake Jobs To Get Taxpayer Money (HuffPo)

Chris Kirkham looks at Everest College's practice of paying employers to hire their graduates for short stints of work. This raises the school's job placement rate and secures its accreditation, which allows Everest to access federal student loans.

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Abortion Restrictions Are Harming Women's Health and Human Rights in Texas

Nov 25, 2013Andrea Flynn

Abortion restrictions in Texas are hurting low-income women in the Rio Grande Valley, which is proof positive that the U.S. needs to think about human rights locally, not just internationally.

Abortion restrictions in Texas are hurting low-income women in the Rio Grande Valley, which is proof positive that the U.S. needs to think about human rights locally, not just internationally.

Last week the Supreme Court decided to leave in place a Texas law that has essentially closed a third of the abortion providers in that state. On their own, the abortion restrictions are devastating. But in the context of three long years’ worth of family planning and women’s health cuts that violate the human rights of women in that state, they are catastrophic.

Over the summer Wendy Davis launched Texas into the national spotlight when she filibustered the same sweeping anti-abortion laws that were upheld by the Supreme Court. But long before that, women’s health advocates were sounding the alarm bells about the impact of massive family planning cuts that dismantled the state’s health infrastructure, on which millions of low-income women relied.

In order to understand the full implications of this week’s ruling, one must consider the current state of women’s health care – particularly that of low-income women – in Texas. The Center for Reproductive Rights (CRR) and the National Latina Institute for Reproductive Health (NLIRH) recently released a must-read report that illustrates the devastating human toll of family planning and reproductive health cuts on women living in Texas’s Rio Grande Valley.

The Valley is a marginalized region inside a state with some of the worst health disparities and the highest percentage of uninsured adults in the country. Many women in the Valley live in colonias, unincorporated communities along the U.S.-Mexico border, which often lack clean water, plumbing, electricity, and public transportation.

The report profiles women whose health and lives have changed along with the landscape of health infrastructures and systems in their communities. Women who detected lumps in their breasts four years ago but cannot afford the mammogram to determine if they are cancerous. Women who have received mammograms months ago but cannot get results because of exorbitant doctor’s fees. Women with ovarian cysts and cervical pain who risk their lives swimming across the river and traveling through towns rife with violence to access care in Mexico.

These women – and the thousands more they represent – must decide between paying rent, giving their children food and a roof over their heads, or having a mammogram, a Pap test, or contraceptives. “It’s one or the other, but not both,” they say. They live with a constant din of anxiety and fear, not knowing what disease is or might be growing in their bodies, where they will get care in emergency situations, or what will happen to their children if they become sick (or worse).

These women are living the consequences of calculated decisions made by conservative lawmakers to dismantle the state’s health safety net. Over the last two years, they cut the state’s family planning budget by two-thirds, from $111 million to $37.9 million. They established a tiered system and forfeited $30 million in federal funds so they could exclude Planned Parenthood and other organizations affiliated with abortion providers from receiving state or federal resources.

The 2011 policies shuttered 76 family planning clinics across the state (including 9 out of the Valley’s 32) and caused 55 more to reduce hours. Publicly funded clinics served 77 percent fewer patients in 2013 compared to 2011 (202,968 and 47,322, respectively). In the Valley public clinics went from serving 19,595 in 2011 to 5,470 in 2013. These trends are particularly troubling when you consider that even before the cuts, publicly funded family planning programs were providing care to less than 20 percent of the population in need.

As the CRR/NLIRH report describes, women in the Valley – particularly Latina women – experience the grave consequences of living at the intersections of race, class, gender, and immigration in the United States. They are 31 percent more likely to die of cervical cancer than women in non-border communities. In the rest of the country, rates of cervical cancer have been plummeting thanks to early detection and treatment, but among Latinas in the Valley the rate is increasing and cervical cancer deaths among Latinas is nearly twice that of non-Latina white women.

The report exposes the lesser-known consequences of the cuts and regulations on clinics that are still open. Remaining providers have reduced hours, laid off staff, increased fees, and stopped providing the most effective family planning methods all while managing a rapidly growing demand for their services. The average cost of a one-month supply of contraception and the fee for an annual exam has increased three- to four-fold since 2010. Ultrasounds and mammograms, once accessible thanks to subsidized rates, are no longer in reach of most women. Wait times often exceed several months.

For women living in areas where clinics have closed, reaching neighboring providers is often impossible due to transportation barriers. Buses are nonexistent, infrequent, or unreliable. Gas is too expensive. Childcare is hard to find. Taking time off work is not an option. For undocumented immigrants, traveling to other communities requires passing through internal checkpoints and risking deportation.

So what happens? Women purchase unregulated contraceptives off the black market, without consulting a doctor about which form of family planning is best for their bodies. They seek care in Mexico, taking the risk that they will not make it back across the border safely. Or, like many of the women described in the report, they forgo contraception and medical care because they simply cannot afford it.

This is the background upon which the most recent abortion restrictions have occurred. There is not a single abortion provider left in the Valley. At a minimum, women must travel three to five hours each way to access an abortion (and must make that trip multiple times thanks to ultrasound and counseling requirements). For most women, it might as well be outlawed.

Many of the women in the Valley do not reap the benefits of federal programs and policies meant to support low-income women. Undocumented immigrants are not eligible for public insurance programs. New immigrants must wait five years before becoming eligible for Medicaid. Texas is not expanding Medicaid under the Affordable Care Act, leaving those who aren’t poor enough for Medicaid but are too poor to qualify for subsidies out of luck.

Title X, the nation’s only program dedicated to family planning – which once provided effective and far reaching family planning care for the state’s low-income women – was seriously weakened by the above-mentioned regulations. (Luckily, the Obama administration recently took Title X out of the hands of the state government and endowed it to the Women’s Health and Family Planning Association of Texas, which has directed funding back to family planning clinics and even enabled a previously closed facility in the Valley to reopen.)

As the CRR/NLIRH report argues, the state of Texas has done more than just grievously neglect an underserved and marginalized community of women. It has violated the human rights of women in Texas, a duty it is legally obligated to respect, protect, and fulfill. American exceptionalism has relegated human rights to the international development sphere and deemed them unnecessary within our own borders. But for the health and lives of women in Texas and around the country, it is time we think about how we can use human rights to make America exceptional in ways we can be proud of. 

Andrea Flynn is a Fellow at the Roosevelt Institute. She researches and writes about access to reproductive health care in the United States. You can follow her on Twitter @dreaflynn.

Photo via Shutterstock.

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Daily Digest - September 4: No Jobs, Lots of Problems

Sep 4, 2013Rachel Goldfarb

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America’s Jobless Generation (NYRB)

Roosevelt Institute Senior Fellow and Director of the Bernard L. Schwartz Rediscovering Government Initiative Jeff Madrick argues that policy, not technology, is keeping unemployment high. He's particularly concerned about the effect of these policies on young people.

Click here to receive the Daily Digest via email.

America’s Jobless Generation (NYRB)

Roosevelt Institute Senior Fellow and Director of the Bernard L. Schwartz Rediscovering Government Initiative Jeff Madrick argues that policy, not technology, is keeping unemployment high. He's particularly concerned about the effect of these policies on young people.

Why This Particular Recovery Is So Bad at Creating New Jobs (Pacific Standard)

Timothy Noah looks at various reasons that our recovery isn't solving unemployment. He suggests that the economy is following Walmart, which doesn't seem to want to hire anyone in a permanent position these days, preferring "flexible" temporary workers.

401(k)s are Replacing Pensions. That’s Making Inequality Worse. (WaPo)

Lydia DePillis argues that the growth of 401(k)s is going to increase inequality among the elderly. Pensions aren't perfect, but at least they didn't require low-income workers to decide between today's bills and tomorrow's retirement.

Justice Department Tackles Quality Of Defense For The Poor (All Things Considered)

Carrie Johnson reports on a Department of Justice filling in a case on the quality of public defense in two cities in Northern Washington. Overburdened defense attorneys agree that an independent monitor's oversight would help.

In Budget Cuts, Low-Income Students Suffer More Than Wealthy Ones (MSNBC)

Suzy Khimm explains why poorer school districts are being hit harder by sequesteration then wealthier districts that could presumably absorb some cuts. With straight cuts across the board, the more federal funds a district typically needs, the more it loses this year.

What's Killing Poor White Women? (TAP)

Monica Potts examines the decreasing life expectancy of uneducated white women. Weaving facts about the demographic into the story of one such woman's early death, she tells a harrowing tale about how much these factors effect a life.

New on Next New Deal

How Ronald Coase Demolished Current Libertarian Ideas About Property

Roosevelt Institute Fellow Mike Konczal argues that Ronald Coase's work helps to prove that "self-ownership" can't solve all our problems. Property rights overlap, and social arrangements (like government) must prioritize one owner over others.

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How Ronald Coase Demolished Current Libertarian Ideas About Property

Sep 3, 2013Mike Konczal

Property isn’t a vertical relationship between a person and an object, but instead is a horizontal, reciprocal relationship of exclusions between people. Since the benefit of one person in regard to property comes at the expense of someone else, there’s no logical or coherent way to invoke liberty or classical liberal principles of “do no harm” when it comes to how the law determines the shape of property. All we can do is pick among competing systems that try to achieve shared social goals.

That’s not an idea normally associated with the economist Ronald Coase, who died yesterday at 102. But it’s a very important part of his landmark paper, ”The Problem of Social Cost (1960), that goes missing when the right-wing celebrates his legacy. Let’s unpack it.

The paper is meant to address the issue of externalities, or when a third party pays a price (or get a benefit) as a result of market transactions he or she isn’t engaged with. Pollution is the classic example.

The normal Coase Theorem argues that in the ethereal world of perfect markets, clear property rights, and no transaction costs, legal regulations would only impact the distribution but not the outcomes of externalities.

Obligatory example, this one from Coase: someone purchases land next to a train to farm. The train throws off sparks, which damage the crops. The railroad company could remodel the train to stop the sparks. What difference would liability law and regulations make?

Let’s say it cost $100 to put on spark guards that would stop $120 worth of crop damage. In this case, the spark guards would get installed. If liability fell on the train company, they’d pay the $100. If it didn’t, the farmer would pay the train company $100 to install the spark guards. If those numbers were reversed, the spark guard wouldn’t get installed. The train company would just pay $100 for the crop damages to prevent the lawsuit if they faced liability. If they didn’t, the farmer would eat the $100 loss. In both cases, the law didn’t change what decision would be made if they just bargained together. The only thing that would change would be the cash payments. (This does not pan out well in the real world [1].)

What does this have to do with libertarianism? As Barbara Fried notes, Coase is defining the social costs as being “the joint costs of conflicting desires in a world of scarce resources.” This move brings the progressive legal realism of the early 20th century law into the economics field.

What Coase is overturning is the idea that the scenario above is simply the railroad damaging the crops, and thus the issue is how to stop or punish the railroad company. Instead, there are multiple, valid claims, claims that necessarily put restrictions on others, and the issue is how to balance them.

As Coase says early on about externalities, “The question is commonly thought of as one in which A inflicts harm on B and what has to be decided is: how should we restrain A? But this is wrong. We are dealing with a problem of a reciprocal nature. To avoid the harm to B would inflict harm on A. The real question that has to be decided is: should A be allowed to harm B or should B be allowed to harm A?”

Indeed, the very first thing Coase does in the paper is to argue the “reciprocal” nature of social cost. The cost of the crop damage isn’t a question. The problem comes out of two people’s desire to utilize their property rights: for the train to run as is, and for the farmer to grow crops near the tracks. The question is, whose property rights do we privilege: the railroad’s or the farmer’s? People in law and economics usually dodge this by arguing that bargaining will take care of the (non-distributional) issues, but in the regular world, which is full of transaction costs, these decisions will need to be made.

And this is where Coase is a major problem for current libertarian thinking. Today’s libertarians draw almost their entire philosophy from the idea of “self-ownership” and think that the only role of government is to enforce a minimal, classical liberal version of “do no harm.”

But notice how ideas like non-aggression makes no sense in the Coase world. The ideal of self-ownership and minimal government can’t get us out of this problem, because it is precisely what ownership entails that is under question. And to realize one person’s ownership would necessarily entail limiting the ownership claims of someone else. (You can read the hostility that anarcho-capitalist Murray Rothbard had for the Coase Theorem’s “social engineering” here.)

Or as Coase concludes, “We may speak of a person owning land and using it as a factor of production but what the land-owner in fact possesses is the right to carry out a circumscribed list of actions…in choosing between social arrangements within the context of which individual decisions are made, we have to bear in mind that a change in the existing system which will lead to an improvement in some decisions may well lead to a worsening of others.”

The question of which social arrangements are best is the problem we face. Some, however, can’t even see the question.

[1] Three quick examples of the Coase Theorem not panning out in the real world:

Where Do We Send Unemployment Checks? John Donohue looked at a natural experiment from a pilot program in Illinois that would send out a bonus unemployment check of $500 for people who successfully found a job. But some people in the pilot program had the checks sent to them, while others, randomly, had the checks sent to their employers. This was a great test for the Coase Theorem, as the people in question had to bargain a contract to get employed in the first place, so there were no transaction costs.

It turned out there was a significant effect. People were much less likely to participate if their employers received the check. So policy design does matter.

Actual Cattle, Actual Society. In 1989, Robert Ellickson of Yale Law School investigated how rural landowners in California handled livestock trespassing under different liability regimes. What did he find? “The field evidence I gathered suggests that a change in animal trespass law indeed fails to affect resource allocation, not because transaction costs are low, but because transaction costs are high. Legal rules are costly to learn and enforce. Trespass incidents are minor irritations between parties who typically have complex continuing relationships that enable them readily to enforce informal norms.”

Norms and social accounts of obligations are important basic sources of entitlements, as opposed to just abstract bargaining models.

Institutions Matter Too. Much of the more interesting work in cross-country growth has been focused on relative strengths and weaknesses of public institutions like courts, something that shouldn’t matter from the Coase world. For one example from someone in that field, Simon Johnson had a great summary about financial regulation and economic conditions. They key point is that securities law has a strong correlation with economic outcomes, which shouldn’t happen. But it does.

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Property isn’t a vertical relationship between a person and an object, but instead is a horizontal, reciprocal relationship of exclusions between people. Since the benefit of one person in regard to property comes at the expense of someone else, there’s no logical or coherent way to invoke liberty or classical liberal principles of “do no harm” when it comes to how the law determines the shape of property. All we can do is pick among competing systems that try to achieve shared social goals.

That’s not an idea normally associated with the economist Ronald Coase, who died yesterday at 102. But it’s a very important part of his landmark paper, ”The Problem of Social Cost (1960), that goes missing when the right-wing celebrates his legacy. Let’s unpack it.

The paper is meant to address the issue of externalities, or when a third party pays a price (or get a benefit) as a result of market transactions he or she isn’t engaged with. Pollution is the classic example.

The normal Coase Theorem argues that in the ethereal world of perfect markets, clear property rights, and no transaction costs, legal regulations would only impact the distribution but not the outcomes of externalities.

Obligatory example, this one from Coase: someone purchases land next to a train to farm. The train throws off sparks, which damage the crops. The railroad company could remodel the train to stop the sparks. What difference would liability law and regulations make?

Let’s say it cost $100 to put on spark guards that would stop $120 worth of crop damage. In this case, the spark guards would get installed. If liability fell on the train company, they’d pay the $100. If it didn’t, the farmer would pay the train company $100 to install the spark guards. If those numbers were reversed, the spark guard wouldn’t get installed. The train company would just pay $100 for the crop damages to prevent the lawsuit if they faced liability. If they didn’t, the farmer would eat the $100 loss. In both cases, the law didn’t change what decision would be made if they just bargained together. The only thing that would change would be the cash payments. (This does not pan out well in the real world [1].)

What does this have to do with libertarianism? As Barbara Fried notes, Coase is defining the social costs as being “the joint costs of conflicting desires in a world of scarce resources.” This move brings the progressive legal realism of the early 20th century law into the economics field.

What Coase is overturning is the idea that the scenario above is simply the railroad damaging the crops, and thus the issue is how to stop or punish the railroad company. Instead, there are multiple, valid claims, claims that necessarily put restrictions on others, and the issue is how to balance them.

As Coase says early on about externalities, “The question is commonly thought of as one in which A inflicts harm on B and what has to be decided is: how should we restrain A? But this is wrong. We are dealing with a problem of a reciprocal nature. To avoid the harm to B would inflict harm on A. The real question that has to be decided is: should A be allowed to harm B or should B be allowed to harm A?”

Indeed, the very first thing Coase does in the paper is to argue the “reciprocal” nature of social cost. The cost of the crop damage isn’t a question. The problem comes out of two people’s desire to utilize their property rights: for the train to run as is, and for the farmer to grow crops near the tracks. The question is, whose property rights do we privilege: the railroad’s or the farmer’s? People in law and economics usually dodge this by arguing that bargaining will take care of the (non-distributional) issues, but in the regular world, which is full of transaction costs, these decisions will need to be made.

And this is where Coase is a major problem for current libertarian thinking. Today’s libertarians draw almost their entire philosophy from the idea of “self-ownership” and think that the only role of government is to enforce a minimal, classical liberal version of “do no harm.”

But notice how ideas like non-aggression makes no sense in the Coase world. The ideal of self-ownership and minimal government can’t get us out of this problem, because it is precisely what ownership entails that is under question. And to realize one person’s ownership would necessarily entail limiting the ownership claims of someone else. (You can read the hostility that anarcho-capitalist Murray Rothbard had for the Coase Theorem’s “social engineering” here.)

Or as Coase concludes, “We may speak of a person owning land and using it as a factor of production but what the land-owner in fact possesses is the right to carry out a circumscribed list of actions…in choosing between social arrangements within the context of which individual decisions are made, we have to bear in mind that a change in the existing system which will lead to an improvement in some decisions may well lead to a worsening of others.”

The question of which social arrangements are best is the problem we face. Some, however, can’t even see the question.

[1] Three quick examples of the Coase Theorem not panning out in the real world:

Where Do We Send Unemployment Checks? John Donohue looked at a natural experiment from a pilot program in Illinois that would send out a bonus unemployment check of $500 for people who successfully found a job. But some people in the pilot program had the checks sent to them, while others, randomly, had the checks sent to their employers. This was a great test for the Coase Theorem, as the people in question had to bargain a contract to get employed in the first place, so there were no transaction costs.

It turned out there was a significant effect. People were much less likely to participate if their employers received the check. So policy design does matter.

Actual Cattle, Actual Society. In 1989, Robert Ellickson of Yale Law School investigated how rural landowners in California handled livestock trespassing under different liability regimes. What did he find? “The field evidence I gathered suggests that a change in animal trespass law indeed fails to affect resource allocation, not because transaction costs are low, but because transaction costs are high. Legal rules are costly to learn and enforce. Trespass incidents are minor irritations between parties who typically have complex continuing relationships that enable them readily to enforce informal norms.”

Norms and social accounts of obligations are important basic sources of entitlements, as opposed to just abstract bargaining models.

Institutions Matter Too. Much of the more interesting work in cross-country growth has been focused on relative strengths and weaknesses of public institutions like courts, something that shouldn’t matter from the Coase world. For one example from someone in that field, Simon Johnson had a great summary about financial regulation and economic conditions. They key point is that securities law has a strong correlation with economic outcomes, which shouldn’t happen. But it does.

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What Mia Macy's Victory Means for Transgender Workers' Rights

Jul 29, 2013Tyler S. Bugg

The Justice Department's ruling in Mia Macy's lawsuit against the ATF is a significant win in the fight against employment discrimination for the transgender community, but there's still more to be done.

The Justice Department's ruling in Mia Macy's lawsuit against the ATF is a significant win in the fight against employment discrimination for the transgender community, but there's still more to be done.

It has been over a year since I last wrote about Mia Macy and her lawsuit, the Employment Non-Discrimination Act (ENDA), and the state of employment discrimination for transgender people like Macy. To review, Macy was tentatively offered a position as a ballistics expert at the Bureau of Alcohol, Tobacco and Firearms (ATF), pending a background check, and the background check revealed her gender transition. The hiring manager then told Macy the position was being eliminated due to budget cuts and hired another applicant. Her high-profile lawsuit against the ATF for rescinding this job offer has resulted in a long and arduous battle in court. Now her work has finally paid off.

Earlier this month, a Justice Department decision was handed down in favor of Macy, ruling that the ATF broke the law in not offering her a job as a ballistics expert -- a move the ruling says was motivated by direct discrimination based on her gender identity. The ruling requires the ATF to again offer the job to Macy, pay her back pay and benefits with interest, and cover all of her legal costs. Even better, the decision stipulates that the agency must implement its own anti-discrimination policies to be applied to all its other employees and future job applicants.

Macy’s hallmark challenge was already considered a victory last year when the complaint she filed with the Equal Employment Opportunity Commission (EEOC) prompted the agency to independently rule that Title VII of the 1964 Civil Rights Act bans employers from discriminating based on an employee’s gender identity or expression. Her Department of Justice suit win this year only extends and celebrates the progress she began in ultimately ensuring a more just and equitable body of employment law for the United States labor force.

The benefit this has for employer-employee relations, employee productivity, and general satisfaction with job environment safety and morale is obvious. I have written previously about why more inclusive employment anti-discrimination protections are both sound social policy and sound business policy – employees and job applicants feel less anxiety about their workplace environments, employers reap the benefits of happier and more qualified applicant pools, and diverse workplaces encourage a respectful and productive mode of labor that better mirrors the country’s diversity outside of the workplace.

All of those outcomes remain true with Macy’s DOJ win. What is unique about Macy’s case is that, for the first time, the federal government is backing challenges of private and government employers by the transgender community. The DOJ decision in Macy’s case represents a significant precedent in the government’s interest in and implementation of more aggressive anti-discrimination policies, especially at the federal level.

The federal government’s sudden activism on behalf of transgender employees is curious, then, as it also continues to stall the passing of ENDA at the federal level. While Macy’s DOJ win is significant, it only applies to her individual case and to her particular employer. ENDA, as a more comprehensive plan to protect all of the nation’s employees, is a preventative measure, and remains absolutely necessary. If the government wishes to remain consistent with the spirit of its findings in Macy’s case, then it must move forward in considering ENDA. Its passage will be an important next step for extending benefits of protection past Macy to all other persons fired, not hired, or denied a promotion or salary increase as a result of their gender and sexuality identity statuses.

However, even ENDA has its limits, and they point to the failings of employment and labor law in this country more broadly. While ENDA certainly has a symbolic significance and a legal usefulness for transgender employees, real change cannot only rely on the jurisdictions of the court system. The effectiveness of employment protections for everyone, not just transgender people, is less than satisfactory. While proponents of ENDA push its necessity by pointing out that it is legal to fire someone for identifying as transgender in 34 states, in the 49 states where “at-will” employment law is the overarching standard, it is completely legal to fire someone for any reason at all and without explanation.

As we move away from Macy’s case, it is economically, socially, and legally important that transgender activists mobilizing within workers’ rights causes have a stake in the larger, more structural state of employment law for everyone, and vice versa. It is only when we finds the ways to consider all critiques across the board that we can find the change-oriented solution that the transgender community has been fighting for throughout Macy’s legal battles. With this shared understanding, we can build the most just and equitable workplaces for transgender people, and indeed all people.

Tyler S. Bugg is a New York-based writer, activist, and artist and an alumnus of the Roosevelt Institute | Campus Network.

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Why Trayvon Is Inspiring America to Put Stand Your Ground Laws on Trial

Jul 16, 2013Naomi Ahsan

The Zimmerman verdict could spark a nationwide movement to challenge "self-defense" laws that support racism.

The Zimmerman verdict could spark a nationwide movement to challenge "self-defense" laws that support racism.

Immediately following George Zimmerman’s acquittal on all charges brought against him for killing Trayvon Martin, mass protest began in the streets and on social media, evoking the great mobilizations for civil rights in American history. While many trials invite public scrutiny and speculation through intense media coverage, few others so clearly illustrate the racial tensions that connect the present with the embarrassing and ugly pieces of America’s past. The Zimmerman trial offers a status update on systemic racism in the United States and calls for attention to and action on Stand Your Ground laws. It also reminds those working for social justice of what litigation can and cannot accomplish, challenges us to consider how public safety measures can serve all Americans, and plainly illuminates the need for greater legal and political empowerment of young men who look like Trayvon Martin.

Stand Your Ground bills have been passed by over 30 states, based on a campaign that began in Florida in 2005 led by the National Rifle Association and the American Legislative Exchange Council (ALEC). (ALEC went on to disavow advocacy for Stand Your Ground in 2012.) These laws provide immunity from criminal and civil proceedings to people who “stand their ground” and use potentially deadly force instead of retreating if they reasonably believe doing so is necessary to “prevent death or great bodily harm to himself or herself or another or to prevent the commission of a forcible felony.” They are alternatively known as “Castle” laws based on Castle doctrine, which traditionally provides for defense in a home and is named based on the saying, “a man’s home is his castle.”

While Stand Your Ground was not invoked by the Zimmerman defense, the case has raised the law’s profile because it is the reason that Zimmerman was not arrested until almost two months after he killed Trayvon Martin. Florida Stand Your Ground law requires police to have specific evidence refuting a self-defense claim in order to arrest someone claiming self-defense as the basis of their violent actions, shifting accountability to law enforcement from people who use force in the name of “self-defense.” There is a growing realization that Stand Your Ground serves to promote anti-black racism — both in who is perceived as threatening and whose claims of feeling threatened are legitimized.

According to a federal lawsuit brought by Markel Hutchins that challenges Georgia’s Stand Your Ground law, some courts have “accepted the race of a victim as evidence to establish the reasonableness of an individual’s fear in cases of justifiable homicide.” The lack of specificity in circumstances justifying the use of deadly force leads to Americans of color being disproportionately targeted by such force. Stand Your Ground is more likely to be applied in cases of white-on-black crime. Hutchins also claims that the law does not equally protect him and other black Americans acting in self-defense. According to the Tampa Bay Times, people in Florida who kill a black person walk free 73 percent of the time in Stand Your Ground cases, while those who kill a white person go free 59 percent of the time.

Marissa Alexander, an African American woman, was not protected by Florida’s Stand Your Ground law when confronting her ex-husband, who was violating his restraining order and had a documented record of domestic violence. For firing a single warning shot as she “stood her ground,” even though the shot did not injure anyone, Alexander was sentenced to 20 years in prison. Stand Your Ground thus failed to serve a black woman who was being threatened by a man who was known to have abused her.

The Zimmerman verdict is not only disappointing because it seems wrong that killing Trayvon Martin, who was innocently walking along in his hoodie on the wrong street at the wrong time, should go unpunished. It is also because an institution of justice seems to have affirmed the racism in Zimmerman’s suspicion and pursuit of Trayvon – racism evidenced by Zimmerman’s history of dozens of “emergency calls“ to the police to report suspicious black men, including one incident where the “suspicious black male” in question was between seven and nine years old.

But while offensive to contemporary American morality, racism is not a crime. In fact, racist thought and speech are protected in American courts of law by the First Amendment, an application of Voltaire’s principle of “I disapprove of what you say, but I will defend to the death your right to say it.” Our foundational legal doctrines are ill-suited to today’s tasks of addressing issues of race advantages and disadvantages to achieve an authentically equal and just society. This is one reason that our courts are often not ideal tools for policy change.

The Department of Justice is investigating Trayvon Martin’s killing, and the U.S. Commission of Civil Rights launched an investigation into the racial bias of Stand Your Ground laws in May. While a lawsuit proceeds to challenge Stand Your Ground in Georgia, there is also the possibility that the Martin will family will bring a civil suit to challenge the constitutionality of Stand Your Ground in Florida.

In the meantime, grief, outrage and worry in reactions to the Zimmerman trial could prove effective and meaningful in motivating new race consciousness and appropriate action. Americans can civically engage and establish a productive discourse to scrutinize Stand Your Ground; increase awareness of the law and of related rights, especially in communities of color; and get involved in state legislative processes to demand alternative policies on public safety and permissible use of guns. The creeping proliferation of Stand Your Ground legislation and its flaws, which are only now starting to be recognized, underlines the importance of these steps as well as the need to increase the diversity of Americans who vote and serve the country as attorneys and elected officials.

Naomi Ahsan is a Research and Program Associate at the Center for Community Change and is Director of Programming for the DC chapter of Roosevelt Institute | Pipeline.

 

Hand with gun image via Shutterstock.com.

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