Daily Digest - July 24: All the Performance Pay, None of the Performance

Jul 24, 2014Rachel Goldfarb

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The Pay-for-Performance Myth (Bloomberg Businessweek)

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The Pay-for-Performance Myth (Bloomberg Businessweek)

Eric Chemi and Ariana Giorgi report on a new analysis of data on the relationship between company performance and CEO pay, which shows no relationship between the two factors.

  • Roosevelt Take: In his white paper, William Lazonick explains how stock-based performance pay incentivizes CEOs toward business practices that manipulate stock prices.

Elizabeth Warren to Help Propose Senate Bill to Tackle Part-Time Schedules (The Guardian)

Jana Kasperkevic writes that the Schedules That Work Act would establish a right to request a predictable schedule, payment for cancelled shifts, and two weeks' notice of schedule changes.

Technology, Aided by Recession, Is Polarizing the Work World (NYT)

Claire Cain Miller says a new study explains how the recession has accelerated the loss of "routine" jobs, which follow well-defined procedures and used to go primarily to men and people with less education.

Even After Open Enrollment, Activity Remains Unexpectedly High on Federal Health Insurance Exchange (ProPublica)

There have been nearly 1 million transactions on the federal exchange since the April 19 enrollment deadline, writes Charles Ornstein, as people continue to sign up for and switch insurance plans.

Paul Ryan's Anti-Poverty Plan Should Support Minimum-Wage Hike, But Don't Count on It (The Hill)

Raising the minimum wage is one of the best ways to fight poverty today, writes Shawn Fremstad, but Paul Ryan ignores research that shows higher wages wouldn't impact employment.

Highway to Hell (The Economist)

The Economist says Congress's solution to funding the Highway Trust Fund through budget tricks around pensions creates risk of greater costs on taxpayers if those underfunded pensions go bust.

New on Next New Deal

The Future Economy Will Pit Man vs. Machine

Andy Stern, president emeritus of the SEIU, presents a speculation on the future for the Next American Economy project in which technology replaces the vast majority of jobs.

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Daily Digest - July 22: Why Net Neutrality is All or Nothing

Jul 22, 2014Rachel Goldfarb

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All Aboard for Net Neutrality (In These Times)

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All Aboard for Net Neutrality (In These Times)

Cole Stangler quotes Roosevelt Institute Fellow Susan Crawford as he makes the case that the FCC should stop dancing around net neutrality and embrace common carrier regulation of the Internet.

Are Auto Insurance Companies Red-Lining Poor, Urban Drivers? (The Guardian)

Auto insurance rates are frequently determined by zip code, and risk factors like crime don't fully explain the price differences. Devin Fergus says redlining, or charging higher prices to minorities, may be to blame.

Obama Signs Historic LGBT Non-Discrimination Order (Slate)

Mark Joseph Stern calls the order, which prohibits federal contractors from discriminating based on sexual orientation or gender identity, Obama's biggest gay rights achievement since ending "Don't Ask, Don't Tell."

Businesses Need to Spend More. The Future of the Economy Depends on It. (NYT)

Increased capital spending by businesses would create jobs, and would also generate the productivity gains that make the economy more competitive over the long term, writes Neil Irwin.

Fed Researchers Optimistic on Long-Term Unemployment Drop (Bloomberg News)

Jeff Kearns reports on the Federal Reserve's reasons for optimism, which include signs that the long-term unemployed are still connected to the labor force and don't have significantly more trouble finding jobs.

New on Next New Deal

Lifelong Roosevelt Connections Help Students Lead Policy Change

Meeting alumni in her role as the Roosevelt Institute | Campus Network Special Initiatives Intern has shown Madelyn Schorr that students' ideas benefit from alumni input and assistance.

The Etsy Economy Prevails

In her speculation on the future for the Next American Economy project, Althea Erickson, Public Policy Director at Etsy, imagines a gig-based economy in which market platforms provide benefits like health care.

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Daily Digest - July 18: BRICS Bank Shifts Balance of Power in the Global Economy

Jul 18, 2014Rachel Goldfarb

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Nobel Economist Joseph Stiglitz Hails New BRICS Bank Challenging U.S.-Dominated World Bank & IMF (Democracy Now)

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Nobel Economist Joseph Stiglitz Hails New BRICS Bank Challenging U.S.-Dominated World Bank & IMF (Democracy Now)

Roosevelt Institute Chief Economist Joseph Stiglitz says this bank will support the developing world's needs, and reflects fundamental shifts in global economic power.

Port Trucking Industry Rips Off Drivers, Responsible Employers, and Taxpayers (The Hill)

Roosevelt Institute Senior Fellow Richard Kirsch looks at the port truck drivers' strike in California as evidence of the need for stronger policy on independent contractors.

Help a City, Write Its Budget (Bloomberg View)

Roosevelt Institute Fellow Susan Crawford endorses participatory budgeting as one of the best ways to build strong civic engagement, and says technology can help.

The Economy’s Big Mystery: Why Workers are Disappearing From the Job Market (WaPo)

Zachary Goldfarb looks at two theories from the White House Council of Economic Advisors that attempt to explain the drop in labor force participation since the recession began.

Stop the Tax Inversions of Free-Riding Corporations (AJAM)

By failing to pass laws that prevent companies from reincorporating aboard to avoid taxes, David Cay Johnston says Congress is supporting their shirking of responsibility.

What Happens When Detroit Shuts Off the Water of 100,000 People (The Atlantic)

Rose Hackman writes that Detroit residents have been forced to pay bills beyond their means or turn to illegal means to access water. The UN has declared this a human rights violation.

States with Better 'Business Climates' Also Have Higher Inequality (CityLab)

A new study finds an unfortunate connection between policies that encourage business and economic growth and rising inequality, writes Richard Florida.

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Daily Digest - July 16: Flawed Models for Understanding the Wage Fight

Jul 16, 2014Rachel Goldfarb

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A Biased Report on the Minimum Wage? (East Bay Express)

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A Biased Report on the Minimum Wage? (East Bay Express)

Darwin BondGraham speaks to Roosevelt Institute Fellow Annette Bernhardt, who says a study criticizing plans for a $12.25 minimum wage in Oakland used bad methodology.

Obama Administration Urges Immediate Action on 'Inversions' (WSJ)

The administration has asked Congress to put an end to these reincorporations abroad for tax purposes, and called instead for "economic patriotism," reports John D. McKinnon.

House Votes to Pay for Roads With Underfunded Pensions (The Wire)

Arit John explains the latest short-term plan for funding the Highway Trust Fund, which he says involves spending future tax revenue now and will lead to more shortfalls in the long run.

Hobby Lobby: A New Tool for Crushing Workplace Unionization? (MSNBC)

Ned Resnikoff explains how the Hobby Lobby decision could play out if an employer claims religious opposition to collective bargaining, as is already permitted for religious schools.

A Push to Give Steadier Shifts to Part-Timers (NYT)

Steven Greenhouse looks at the momentum behind laws that aid part-time workers by requiring further advance notice, extra pay for on-call work, and preference for more hours.

New on Next New Deal

Search Models, Mass Unemployment, and the Minimum Wage

Roosevelt Institute Fellow Mike Konczal looks at what's wrong with the models some economists are using to understand high unemployment and prolonged job vacancies.

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Daily Digest - July 15: Privatization Gets Marked 'Return to Sender'

Jul 15, 2014Rachel Goldfarb

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Staples, Postal Service to End Plan for Mini Post Offices in Stores (WSJ)

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Staples, Postal Service to End Plan for Mini Post Offices in Stores (WSJ)

Kris Maher, Drew Fitzgerald, and Tom Gara report on the decision to end this pilot program, which the postal workers' union and other labor groups had denounced as privatization.

  • Roosevelt Take: Roosevelt Institute Senior Fellow Richard Kirsch explains how the Postal Service and Staples plan was exacerbating the low-wage economy.

Another Week, Another Settlement (The Economist)

The Economist examines the controversy over Citigroup's $7 billion settlement announced yesterday, which continues the trend of placing blame on companies instead of individuals.

Equal Opportunity Employment Officials Take New Aim at Pregnancy Bias (NYT)

Due to an increase in pregnancy discrimination complaints, the Equal Employment Opportunity Commission has issued new enforcement guidelines, reports Steven Greenhouse.

Restaurant CEOs Make More Money in Half a Day Than Their Employees Make in a Year (MoJo)

Jaeah Lee reports on a new analysis of top restaurant CEO pay, which shows that the CEOs take home an average of 721 times the amount that minimum wage workers are paid.

When You're Poor, Money Is Expensive (The Atlantic)

Derek Thompson explains why accessing money becomes more difficult without bank accounts and credit, and says the financial tech sector could make things easier for the poor.

Labor Organizing Is a Civil Right (Blog of the Century)

The National Labor Relations Act provides only negligible penalties for firing labor organizers, so Imhotep Royster suggests extending Civil Rights Act protections to those organizers.

New on Next New Deal

In Defense of Public Service: Roosevelt Honors Commitment to Common Good

Roosevelt Institute Communications Manager Tim Price reflects on the vindication felt by the life-long public servants honored at last week's Distinguished Public Service Awards.

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Daily Digest - July 14: Local Actions Hold the Line for Labor

Jul 14, 2014Rachel Goldfarb

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Why Volkswagen Agreed to UAW Local at Its U.S. Plant (USA Today)

G. Chambers Williams III explains the decision to create a local union at the Chattanooga VW plant despite the United Auto Workers' narrow loss in a February worker vote.

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Why Volkswagen Agreed to UAW Local at Its U.S. Plant (USA Today)

G. Chambers Williams III explains the decision to create a local union at the Chattanooga VW plant despite the United Auto Workers' narrow loss in a February worker vote.

U.S. Deficit Continues to Shrink (MSNBC)

The budget deficit has reached its lowest point since 2008, reports Suzy Khimm, thanks to a recovery that has increased tax revenues and reduced demand on safety net programs.

Tracy Morgan Sues Walmart Over Deadly Crash in New Jersey (NYT)

Emma G. Fitzsimmons reports that Morgan and others injured in an accident involving an overtired Walmart truck driver are blaming the accident on the company's poor labor practices.

Here's Definitive Proof That Republicans Don't Care About the Long-Term Unemployed (TNR)

Danny Vinik asks why budget gimmicks were unacceptable for funding the Senate Democrats' extension of unemployment insurance but are fine when the House GOP uses them.

New Study: Lobbying Doesn't Help Company Profits—But It's Great For Executive Pay (MoJo)

Corporate lobbying expenditures, which measure in billions of dollars, do far more to enhance a CEO's earnings than to benefit companies as a whole, reports Alex Park.

State and Local Pensions: A Progress Report (Market Watch)

Alicia H. Munnell looks at recent shifts in local and state pensions, including both the good (increased contributions) and the worrisome (plans still hold too much of their portfolios in equities).

New on Next New Deal

Port Drivers Take on Low Wages in an Industry Built on a Lie

All Americans should support the Los Angeles port truck drivers' strike, writes Roosevelt Institute Senior Fellow Richard Kirsch, because all consumers depend on their hard work.

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Port Drivers Take on Low Wages in an Industry Built on a Lie

Jul 14, 2014Richard Kirsch

Port truck drivers aren't indepedent contractors: they're employees of companies that pay them too little for long hours, with no benefits or worker protections.

It’s a David and Goliath story, only in this case there are 120 Davids taking on a hidden Goliath of an industry that every day touches everyone who is reading this in hundreds of ways. The port trucking industry is built on an illegal fiction, designed to rip off the 120 drivers who went on strike at the ports of Los Angeles and Long Beach this week.

Port truck drivers aren't indepedent contractors: they're employees of companies that pay them too little for long hours, with no benefits or worker protections.

It’s a David and Goliath story, only in this case there are 120 Davids taking on a hidden Goliath of an industry that every day touches everyone who is reading this in hundreds of ways. The port trucking industry is built on an illegal fiction, designed to rip off the 120 drivers who went on strike at the ports of Los Angeles and Long Beach this week.

They are not alone; 49,000 port truck drivers around the country work long hours at low pay with no benefits or basic worker protections like unemployment insurance or workers compensation, because the industry misclassifies them as independent contractors. The drivers’ courageous action is one more facet of a surging labor and community movement, which is starting to take on the captains of America’s low-wage economy.

Virtually everything you are wearing now that was made overseas came through our nation’s ports. So did every imported item in your office or home. Port truck drivers transported those goods from ship terminals to rail yards and warehouse centers, for distribution to stores around the country. Starting more than 30 years ago, when the trucking industry was deregulated during the Carter administration, the industry was taken over by firms with a business model based on driving down drivers’ incomes by treating them as independent contractors instead of employees.

The new model was based on a lie. The drivers weren’t really independent truck drivers, with their own rigs. They still worked for one distribution company, which totally controlled everything about their work – their hours, their shipments, the rates they were paid. The company supplied the trucks they drove. But by insisting the drivers accept the new arrangement if they wanted to work, the companies avoided paying payroll taxes, workers compensation, and unemployment benefits, let alone health or retirement benefits. The drivers were forced to pay to lease, fuel and maintain the trucks out of their own paychecks.

The result of this scam has been high profits for the companies, lower wages and no workplace protections for the drivers, plus big losses to the social insurance funds. This arrangement put employers who complied with the law by continuing to treat their workers as employees at a competitive disadvantage.

The port drivers' story is emblematic of the forces that crushed America’s middle class. Good paying, often union jobs were replaced by low wage, no-benefit jobs. "Manufactured in the U.S." was displaced by foreign goods, sold to consumers through the Wal-Marts and Home Depots and other giant retailers that perch at the end of global supply chains. Government, stripped of resources and will by corporate lobbyists and their wholly-owned elected officials, sat by while the law was violated and social insurance programs were weakened. And corporate profits soared.

But times are beginning to change. The strike in Southern California carries with it all the elements and power of the new movement of low-wage workers and their allies to create a good jobs economy. The foundation of the strategy is the willingness of low-wages workers to risk their jobs to fight back. The strategy is driven by strategic, legal, and financial assistance supplied by labor unions, partnerships with community groups, and public campaigns against big brand names.

The strikers, like many other port drivers, are mostly immigrants who often don’t speak English. Only recently did they become aware that their rights were being violated, after a free legal clinic was set up by two community groups at the port. Since then, drivers have filed more than 400 claims against companies under California’s wage and hour laws. The first 19 rulings resulted in an average award of $66,240, largely for wage and hour violations and illegal paycheck deductions for items like truck leases.

The claims are part of an aggressive legal strategy, which includes filings under California’s wage and hour laws, class action suits, and claims that the companies are violating federal labor laws. The goal is for the firms to face such an onslaught of fines and court orders that they will begin to realize it would be better to abide by the law, rather than continue to defend their practices in court. California Attorney General Kamala Harris could be hugely helpful here if she used the growing number of cases to insist on an industry wide compliance settlement.

The companies are fighting back. “It’s all out war,” an attorney for two workers who were fired for both supporting a union and pressing wage claims, told me. Green Fleet, the company that fired the workers and one of the companies being picketed, is using the full arsenal of union-busting tactics, including firing workers who are leading union efforts and hiring union busters who threaten workers. The company’s goal is to terrify other workers, so that they won’t support forming a union or file wage claims.

The NLRB ruled in the workers' favor, establishing that they are employees, not independent contractors, but Green Fleet is appealing in order to delay any relief. The fired workers’ attorneys are asking a federal judge to immediately order the companies to rehire the workers who were fired and to inform all the workers of their right to form a union and protest unfair labor practices.

In the face of this illegal harassment, the 120 drivers at Green Fleet and other firms walked off the job. They want to join the Teamsters union, which is providing key strategic support to their efforts through their Justice for Port Drivers campaign. Many drivers recently saw the benefits of unionization when drivers won union representation at Toll Global Holdings, an Australian based company, which is unionized in their home country. The unionized drivers actually get paid for the hours they spend waiting to pick up merchandise, and receive better wages and benefits.

Los Angeles’ well-organized community-labor coalition, led by LAANE, has turned out hundreds of picketers to join the drivers. The picketers block company trucks driven by drivers who have not joined the strike. The pickets create even longer lines of trucks at the marine terminals, where ships arrive with containers full of goods. This is one way that the strikers can exercise the economic power to get the companies to settle. The Teamsters report that already some terminals have told the companies being struck to stop picking up goods in order to clear the blockade.

Another weapon in the campaign is public pressure on the big brands that are the ultimate beneficiaries of the low-wages paid to the port drivers. All of Skechers shoes are delivered by Green Fleet. Protestors attended Skechers’ annual shareholder meetings, have leafleted stores, and this week had a plane fly over the company’s flagship L.A. store with a banner that read, “Skechers – laced with misery”. As LAANE’s Danny Feingold points out, unlike some other retailers, such as Nike, Skechers has refused to sign a code of conduct with labor standards for its contractors.

Another element in the port drivers' campaign, as in low-wage workers' campaigns nationally, is a push to change public policy. There are some 75,000 port drivers around the country, of whom 49,000 are misclassified as independent contractors. The New York and New Jersey legislatures both passed bills in the last year toughening standards and enforcement for misclassification of port truck drivers. While New Jersey’s Governor Chris Christie vetoed that state’s bill, the New York legislation signed by Governor Andrew Cuomo includes strict standards and most importantly, civil and criminal penalties.

There is a new movement growing in America, comprised of courageous low-wage workers and backed by unions, community groups, and activists to take on the huge companies that drive the low-wage economy. From fast food, to Wal-Mart, to workers who make car seats and immigrants who wash cars, the movement is learning a new strategy, based on mobilizing workers and the public. The twin goals of this movement are to enable workers to organize unions and to enact new public policy to rebuild the middle class. You can support the movement now, and lend a hand to port drivers who are on strike, by making with a contribution to the Justice for Drivers Hardship Fund. Remember, the device on which you are reading this now was delivered by a port driver.  

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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Daily Digest - July 11: Public Internet Infrastructure Provides a Link to the Future

Jul 11, 2014Rachel Goldfarb

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Government Should Invest in Fiber Optics (NYT)

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Government Should Invest in Fiber Optics (NYT)

Roosevelt Institute Fellow Susan Crawford writes that U.S. cities can increase competition and expand affordable high-speed Internet access to all residents by building municipal fiber networks.

Gap Between Minimum Wage and Tipped Wage Hits Record High (MSNBC)

Tipped workers make a much lower median wage, reports Ned Resnikoff, and tipped workers face a poverty rate twice that of other workers.

Fannie-Freddie Propose Liquidity Rules for Mortgage Insurers (Bloomberg)

Zachary Tracer and Clea Benson explain newly proposed capital requirements for mortgage insurers, which would demand that they hold a greater amount of liquid assets against their risk exposure.

The Verdict is in: Obamacare Lowers Uninsured (Politico)

The trend is unmistakable, writes David Nather: millions have newly obtained insurance thanks to the Affordable Care Act. Even those who oppose the law can't find anything bad to say about that.

Right-Wing “Populism” is a Joke: Poor-Bashing, Immigrant-Hating and a Revolting Agenda (Salon)

Heather Digby Parton explains how right-wing populism, which places blame for economic problems on "economic parasites," pushes policies that don't help the right's supposed base.

Losing Sparta: The Bitter Truth Behind the Gospel of Productivity (VQR)

Esther Kaplan looks at the closure of one highly productive, award-winning lighting fixture plant in Sparta, Tennessee to explain why productivity isn't enough to improve the economy.

A $13 Minimum Wage Isn’t Enough (In These Times)

Carlos Ballesteros says that organizers in Chicago want a union no matter the minimum wage increase they obtain, because they will still need consistent hours and scheduling.

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Daily Digest - July 10: Communities Need a Better Kind of Banking

Jul 10, 2014Rachel Goldfarb

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Banks that Actually Serve Communities, What a Novel Idea (Philanthropy New York)

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Banks that Actually Serve Communities, What a Novel Idea (Philanthropy New York)

Roosevelt Institute Fellow Saqib Bhatti explains how community banks, unlike their national Wall Street-based counterparts, keep profits and funds in the community, where they support growth.

Port Truckers’ Strike Sends Ripples Through Labor World (MSNBC)

Ned Resnikoff looks at why the small port truckers' strike in Los Angeles is getting so much attention. He cites research from Roosevelt Institute Fellow Annette Bernhardt on worker misclassification.

SCOTUS’ Quiet Expansion of Harris (In These Times)

The Court's order in Schlaud v. Snyder could lead to a dramatic reversal in labor law, which would assume those who did not vote for a union are against it, writes Moshe Marvit.

Report: NY Tax Breaks Don’t Do Much to Create Jobs (The Journal News)

Joseph Spector says a new report from the state Authorities Budget Office shows that special tax breaks from local development authorities appear to have little effect on generating jobs.

Study: States That Raised Minimum Wage Had Stronger Job Growth (USA Today)

Paul Davidson reports on a new study from the Center for Economic and Policy Research, which shows a higher increase in payrolls over 10 months in states that increased their minimum wage.

Thomas Perez On Lawmakers Who Dis The Jobless: 'I Wanna Punch 'Em' (HuffPo)

In a meeting with the press about labor data, the Labor Secretary made harsh comments about lawmakers who still aren't helping the long-term unemployed, writes Arthur Delaney.

Jobs Are Staying Vacant Longer Than Ever (WaPo)

The average duration of job vacancies has hit a new high of 25.1 days, writes Catherine Rampell, but the evidence does not suggest there is a skills mismatch holding back hiring.

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Daily Digest - July 9: America's Workers Need a Vacation

Jul 9, 2014Rachel Goldfarb

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America Gets Summer Vacation All Wrong (U.S. News & World Report)

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America Gets Summer Vacation All Wrong (U.S. News & World Report)

Pat Garofalo points out the dissonance between long summer vacations for students, which lead to learning losses, and the United States' lack of paid vacation time for workers.

  • Roosevelt Take: Roosevelt Institute Director of Operations Sarah Pfeifer Vandekerckhove and Policy Intern Candace Richardson look at possible solutions to low-income students' summer learning losses.

Buying a Home: The American Dream That Won’t Die (MSNBC)

Suzy Khimm looks at post-housing crisis options for low-income would-be homeowners. Opportunities are limited, and there is continued discrimination against minorities seeking mortgages.

Democrats Push Bill to Reverse Supreme Court Ruling on Contraceptives (NYT)

The bill could hit the Senate floor as early as next week, reports Robert Pear, but it faces long odds in the House, since Speaker Boehner approves of the Hobby Lobby decision.

  • Roosevelt Take: Roosevelt Institute Fellow Andrea Flynn explains how the Hobby Lobby and McCullen rulings increase the barriers to women accessing health care.

Corporate Tax Scam Watch: The 'Inversion' Craze (LA Times)

Michael Hiltzik explains why companies look to "inversions," corporate restructuring in a foreign country, to avoid paying their fair share of taxes, and considers possible remedies.

NFL Cheerleaders Got An Early Advantage In Their Lawsuit Against The Buffalo Bills (Business Insider)

A judge said the evidence supports the Buffalo cheerleaders' claim that they are employees of the NFL team, reports Allan Smith, which allows their wage theft case to move forward.

New on Next New Deal

Detroit's Revitalization Funds Could Re-Empower Residents, Too

Roosevelt Summer Academy Fellow Dominic Rushe lays out one way Detroit could introduce participatory budgeting, allowing citizens to help decide where community development funds are most needed.

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