February 8, 2016

Regulate RI responds to Raimondo’s proposed medical marijuana tax

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Governor Gina Raimondo recently unveiled a proposal to create a “tagging” system to track medical marijuana plants in the state. Patients and caregivers who cultivate medical marijuana for patients will be required to pay $150 or $350 per plant for these tags. Polly Reynolds, a registered medical marijuana patient who cultivates marijuana to ease her muscle spasms and pain caused by multiple sclerosis, issued the following statement:

Instead of levying hefty fees from patients like me who have debilitating health conditions, Governor Raimondo and lawmakers should tax those who use marijuana for enjoyment. For us patients, marijuana is often the only thing that eases our suffering, and it is already difficult to afford because health insurance does not cover it. Raising revenue from seriously ill patients’ medicine is wrong, but taxing recreational consumers is appropriate and could help alleviate our state’s deficit.”

Jared Moffat, Director of Regulate Rhode Island, issued the following statement:

We tax alcohol, but not prescription medications. Similarly, it makes little sense to extract revenue from sick people who need marijuana as a medicine while keeping marijuana that is used for fun untaxed and in the illicit market. I suspect most recreational marijuana consumers would be happy to pay taxes if only the state would make it legal for them to do so. In addition to generating more revenue, regulating marijuana like alcohol would erode the illicit marijuana market and create new businesses and jobs all over the state. It’s time to get our head out of the sand and move forward like our neighbors in Massachusetts and Vermont.”

[From a press release]

February 8, 2016February 8, 2016

Weekend at Bernie’s Kibbutz

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One of the resounding criticisms of Bernie Sanders this election year has been his youthful moment on a kibbutz, which he says convinced him of socialism. I and many others, including the late Edward Said in his classic The Question of Palestine, have emphasized that the kibbutz movement has for decades functioned as an instrument of state violence and therefore we should hold Sanders to this.

Yet the right wing, in their ever-vigilant effort to label Sanders as Stalin’s reincarnation, helped clarify this recently. Sanders in fact was at Kibbutz Sha’ar Ha’amakim as part of Hashomer Hatzair. This is something that I find tremendously relieving.

Just to clarify, Hashomer Hatzair was a binationalist Zionist movement that wanted to establish a social order based on proletarian ethos as opposed to ethnocracy. Dr. Norman Finkelstein’s father was a member at one point. Dr. Noam Chomsky had this to say of it:

As I mentioned, I never joined any organized group because of sharp disagreement and skepticism about them, though emotionally I was drawn to such youth groups as Hashomer Hatzair, which in those days professed a commitment to socialist binationalism in Palestine and kibbutz values, as well as the Hebraic culture that I was very much a part of… [T]he position that I held, while I wouldn’t say I was the only person in the world to hold it, nevertheless it was very far from the mainstream. It was a position that did have some standing and some support in the Zionist movement. But it was also one that was distinct from those of any of the existing movements, except for ones that were Stalinist or Trotskyite, therefore out for me, so I couldn’t join in.

I find this revelation about Sanders a breath of fresh air after being under water for too long. To be clear, I am not a morally repugnant person. Dr. Chomsky, who is one of my own personal heroes, once called himself probably one of the most conservative people in America because he hold people to the same standard. I agree with this, I insist on people being decent to each other regardless of whatever excuses they make. In the case of the Israel-Palestine issue, I find it morally repugnant that a state with a confirmed arsenal of nuclear weaponry at Dimona utilizes the persecution of their forefathers in Europe, back when anti-Semitism was an existential threat to Jews, so to carry on like raving maniacs. Dr. Finkelstein, whose parents were both in the concentration camps, once said Benjamin Netanyahu should be brought to the International Criminal Tribunal at the Hague for obnoxiousness.

Does this mean the super-delegates issue is solved? Does this absolve him of the votes for sanctions against Cuba and bombing Yugoslavia? Does this mean his positions on any number of things have been perfect? Absolutely not. His statements in Vermont during Operation Protective Edge were awful.

But this makes my respect for his campaign position on Israel-Palestine go through the roof. Now we know from the outset he was serious about this.

EDITORIAL NOTE: It is worth mentioning that not everyone ever affiliated with Hashomer Hatzair engaged in great behavior, some members did end up in the Palmach and Haganah. However, it was not until the 1980’s and the rise of the so-called New Historians in Israel that the true nature of Israel’s founding and the nakba became well-known. During the 1960’s and 1970’s, the Western media and intellectuals like the late Irving Howe tried to create a false idea about the kibbutz movement as emblematic of Israel as a socialist wonderland. It is perhaps the case that Sanders went to Israel under these pretenses. With some irony, I am including a link to the Right wing article on this topic by David Horowitz’s Front Page Magazine. If one overlooks the negativity, it gives a fairly precise explanation of how far to the Left Hashomer Hatzair was and how critical its founders were of Knesset policy.

February 8, 2016February 10, 2016

RI business community launches pre-emptive attack on fair scheduling

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Aside from raising the minimum wage, fair scheduling legislation is one of the most important ways in which workers can get their lives under some semblance of control when working for companies that try to maximize profits and reduce labor costs by scheduling as close to last minute as possible. A little over a year ago San Francisco became the first city to pass the Retail Workers’ Bill of Rights, a series of labor reforms centered around the idea of fair scheduling.

Workers at many retail and food service companies are required to always be available for work as management waits until they have up to the minute sales data and weather reports before deciding on whether or not to bring the worker in and pay them. This wreaks havoc on a worker’s ability to arrange for child care, organize a school schedule, make travel arrangements to and from work or secure a second job to make ends meet.

Elizabeth_Warren_Nov_2_2012 — Senator Elizabeth Warren (Photo (c)Tim Pierce)

A report, Set Up to Fail, demonstrates the difficulty many low-wage workers with unfair schedules face. “For many low-wage working parents, the conditions of their jobs effectively set them up to fail: meeting both their work and family obligations becomes an impossible juggling act. And too often, despite their best efforts, parents’ low wages and work conditions undermine their children’s chances for success as well.”

After the success of fair scheduling legislation in San Francisco, activists in Minneapolis were cautiously optimistic about passing similar legislation in their city, until Mayor Betsy Hodges withdrew her support after getting pressure from the local Chamber of Commerce. According to writer Justin Miller, “In late September, opponents formed the Workforce Fairness Coalition by the Chamber of Commerce, and included prominent members like the Minnesota Business Partnership (which represents about 80 businesses, including Target, U.S. Bancorp and Xcel Energy) and the Minnesota Restaurant Association. They took specific issue with the scheduling law, saying that it would impede operations and could force businesses to flee the city.”

Here in Rhode Island, the fight over fair scheduling began when the Greater Providence Chamber of Commerce (GPCC) brought the subject up at last week’s luncheon. GPCC President Laurie White asked RI House Minority Leader Brian Newberry (R, District 48 North Smithfield and Burrillville) about fair scheduling, what she referred to as, “long term work scheduling requirements, otherwise known as predictive scheduling.”

“How do we set the right balance between employers and workers in order to keep our small and mid-sized businesses competitive,” asked White, “and also keep Rhode Island businesses competitive vis-à-vis other places?”

“You folks know better than anybody what kind of mandates help or hurt your businesses,” replied Newberry, “so when it comes to [mandates such as fair scheduling] we need to hear from [business leaders], because there are always… well meaning advocates out there for all kinds of groups who are less interested in the fundamental cost of what they want… You need to talk to us. The business community in this state, not just the big business community but small businesses need to be more active [in lobbying government representatives]… if you don’t do it, we don’t hear from the right groups of people and we will make mistakes.”

The language and contours of the coming fight are already taking shape, and advocates for fair scheduling here in Rhode Island have yet to raise their voices. Note that advocates for fair scheduling are condescendingly pronounced “well-meaning” by Newberry, as if their concerns simply emotional and compassionate, lacking any sense of business reality. Note that Chamber President White can’t bring herself to call the scheduling “fair,” that implies present scheduling is unfair, so she calls uses the words “long term” or “predictive” scheduling instead.

Note how Newberry recommends that the Chamber and other small business groups show up when these kinds of bills are being discussed in General Assembly committee meetings because presumably if the “right” groups of people don’t advocate for profits over people, then the wrong groups of people will secure additional legal protections for people, something Newberry refers to as “mistakes.”

Fair scheduling legislation has many different parts, but taken together, it empowers workers so that they are protected from abusive scheduling practices. Included in typical fair scheduling legislation are the following ideas:

Advanced notice of work schedules- Requires employers to give 3 weeks notice of schedules and 3 weeks to notify workers of changes to their schedules. It also allows workers to decline work hours not included on the original schedule.
Compensation for changed shifts- Provides one hour of predictability pay for employer-initiated changes to the schedule and provides minimum reporting pay when a shift is cancelled or significantly reduced with less than a day’s notice.
Right to request flexible working arrangement- Allows workers to request scheduling accommodations without fear of retaliation.
Right to rest- guarantees a day of rest every week (workers do not have to work more than six days in a row) and guarantees adequate rest between shifts (no more “clopens” where a worker closes the store at midnight and opens the store at 6am.)
Equal treatment regardless of hours worked- prohibits discrimination in pay, promotion and benefits based on the number of scheduled hours
Retention pay- Requires employers to compensate workers for their availability by making a minimum biweekly payment of $150, which can be met through wages or benefit payments. No worker can be paid less than this amount for two weeks work.
Offer of work to existing workers- requires employers to offer work to existing qualified part-time workers before hiring new staff or temporary workers.
Also included in any legislation will be language on protection of these rights with penalties for employers who violate them, prohibitions of retaliation against workers who claim these rights, the posting of notices explaining these rights to workers, and enforcement requirements.

A decent list of fair scheduling resources can be accessed here at the National Women’s Law Center. As with minimum wage and tipped minimum wage, women are disproportionately impacted by unfair scheduling.

Jobs with Justice has a terrific overview of fair scheduling legislation with links to additional resources here.

Also, CLASP (Center for Law and Social Policy) has a national repository of fair scheduling news articles, briefs, analyses, etc.

Senator Elizabeth Warren has been out front on this issue, and has introduced the Schedules That Work Act, though the likelihood of such a bill passing on the national level in a Republican controlled Congress is low.

This is why the battle for fair scheduling is being done on a state by state or city by city basis, and why the Greater Providence Chamber of Commerce is already making moves to oppose such legislation.

We cannot live our lives serving the whims of work. Work exists to serve people, and when we forget this, families suffer. Fair scheduling is a small step in addressing this injustice.

February 8, 2016February 7, 2016

Increasing minimum wage reduces public assistance costs

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As corporations achieve extraordinarily high profit levels and executive pay reaches new heights, wages in certain sectors are so low that even those who work full time must rely on government assistance to make ends meet. A new report from EPI economic analyst David Cooper finds that raising wages for low-wage workers will significantly reduce government spending on public assistance, making billions of dollars a year available for improvements to other anti-poverty programs.

“When employers pay wages so low that working people have to turn to public assistance to make ends meet, they’re effectively receiving a subsidy from taxpayers,” said Cooper. “Policies that raise wages would free up resources that could then be used to strengthen anti-poverty programs or make investments in any number of other policy priorities. The simplest way we can do this is by raising the federal minimum wage.”

The majority (66.6 percent) of individuals and families who receive public assistance work or are in a family in which at least one adult works. This number grows to 71.6 percent when focusing on recipients under the age of 65. More than two-thirds (69.2 percent) of all public assistance benefits that go to non-elderly families go to families in which at least one adult works.

If the bottom 30 percent of wage earners received a $1.17 per hour pay raise, more than 1 million working people would no longer need to rely on public assistance. For every $1 that wages rise among these low-wage workers, spending on government assistance programs falls by roughly $5.2 billion. Because this estimate is conservative and does not include the value of Medicaid benefits, it has the potential to be even higher.

Other findings from the paper include:

Raising the minimum wage to $12 by 2020 would reduce public assistance spending by $17 billion. These savings could be used to make improvements other anti-poverty programs, such the President Barack Obama’s proposal to expand the national school lunch program to provide food for children during the summer months.
Workers in the arts, entertainment, recreation, accommodation, food services, and retail trade industries are disproportionately represented among public assistance recipients.
Roughly 60 percent of all workers making less than $7.42 per hour receive some form of government-provided assistance, either directly or through a family member.
More than half (52.6 percent) of workers paid between $7.42 and $9.91 per hour receive public assistance, either directly or through a family member.
Nearly half (46.9 percent) of all working recipients of public assistance work full time.

[From a press release]

February 8, 2016February 7, 2016

RI political leaders ignore evidence, pursue failed economic policies

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A new report calls into question many of the job growth strategies being pursued and implemented by our state leaders. “To create jobs and build strong economies,” say economists Michael Mazerov and Michael Leachman in their new report, “states should focus on producing more home-grown entrepreneurs and on helping startups and young, fast-growing firms already located in the state to survive and to grow ― not on cutting taxes and trying to lure businesses from other states.”

The report, “State Job Creation Strategies Often Off Base” takes advantage of new data accumulated over the last fifteen years “about which kinds of firms create jobs” and the data shows that the “vast majority of jobs are created by businesses that start up or are already present in a state — not by the relocation or branching into a state by out-of-state firms.”

The immediate takeaway from this report for Rhode Islanders is that Governor Gina Raimondo’s planned (yet not realized) trip to Davos and the time she spent trying to persuade General Electric (GE) to move to Rhode Island rather than to Massachusetts are wastes of time and money. Raimondo’s offer to GE was in the “same neighborhood” as Massachusett’s $140 million in state and city incentives and grants. Given the conclusions in this report, Rhode Island dodged a bullet when GE turned Raimondo’s offer down.

I asked the authors of the piece directly about the governor’s plan to travel to the World Economic Summit in Davos and they told me, “That is not where state economic development comes from and that’s really not where policy makers should focus. They should focus on homegrown businesses and try to stimulate startups and helping their businesses that are already in the state to find customers and find the skilled workers they need. Business recruitment accounts for such a tiny share of job creation and that’s really a major point of this paper. It is not where the priority should be placed.”

In other words, we are, as a state, pursuing failed economic and job creation strategies, and we will continue to fail unless we take this new data seriously.

On average, 87 percent of new jobs are created by businesses already in the state. In the chart below, you can see that Rhode Island is no outlier in this department. The remaining 13 percent of jobs come from out of state businesses branching into the state (think of a restaurant chain in Boston adding a store in Providence) or a business actually relocating into the state, as GE recently did when they moved to Massachusetts.

What kind of businesses stimulate job creation? The report stresses that “startups and young, fast-growing firms are the fundamental drivers of job creation when the U.S. economy is performing well.”

The report quotes economist John Haltiwanger and his colleagues as saying, “Overall, the evidence shows that most start-ups fail, and most that do survive do not grow. But among the surviving start-ups are high-growth firms that contribute disproportionately to job growth. These high-growth young firms yield the long-lasting contribution of start-ups to net job creation.”

The firms that take off are called “gazelles.” Think Google, Amazon, Tesla or Under Armour, or, in Rhode Island, think NuLabel. These kind of firms accounted for about 15 percent of all businesses, but were responsible for half of gross job creation from 1992-2011.

Failed Policies

In trying to create a “business friendly climate” that will lure small businesses to the state, our leaders, like leaders in many other states, have pursued strategies that are “bound to fail because they ignore the fundamental realities about job creation revealed by the new data and research discussed above.” A favorite failed strategy is tax cuts for “small businesses.”

These tax cuts are not properly aimed at young businesses, they are aimed at small businesses. Most small businesses don’t have employees or plan to add employees. And targeting tax cuts to young businesses has little effect because most young businesses spend so much money on new equipment, product testing and marketing that they have little in the way of taxable income in the first place.

Tax cuts don’t help a state’s business climate, but they do hurt a government’s ability to do the important work of funding education and maintaining a top notch infrastructure. The report cites an Endeavor Insight study that showed that only 5 percent of entrepreneurs cited low tax rates as a factor in deciding where to locate their company, whereas 31 percent cited access to talent (education) and a city’s quality of life as a factor.

Offering tax breaks and non-tax incentives to lure out-of-state companies to our state is also a losing game. In Rhode Island we are addicted to TSAs, Tax Stabilization Agreements, which allow companies and developers to avoid paying their fair share of taxes and shifts the businesses’ tax burden onto the rest of the city or state taxpayers. As the report clearly shows, “jobs gained due to firm relocation are such trivial factors in a state’s overall job creation record that they should not be a consideration in formulating state tax policy or economic development policy more broadly.”

A look at statements made at the recent Greater Providence Chamber of Commerce luncheon reveals that our elected leaders haven’t gotten this message yet.

Here’s Senate President Teresa Paiva-Weed talking about the importance of tax cuts:

Here’s Senate Majority Leader Dominick Ruggerio talking about tax stabilization agreements to spur development:

Here’s Senate Minority Leader Dennis Algiers on “broad-based” tax cuts, which we’ve seen are not only not effective, they are counter-productive:

Here’s Speaker of the House Nicholas Mattiello talking about how “incentives” (i.e. tax breaks) “attract new people to our state.”

Continuing to pursue strategies that have been shown to hinder rather than help in job creation would be foolish in light of the data in this new report. Instead, “policy needs to focus on encouraging entrepreneurship generally, helping new businesses to survive, and enabling businesses with the potential to become high-growth firms to fulfill that potential.”