Greater Providence Chamber of Commerce

June 16, 2016June 16, 2016

Keable/Fogarty power plant bill: An autopsy

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Perhaps the most honest statement to come out of the Senate Judiciary Committee regarding Paul Fogarty’s bill S3037A came in the hallway outside the hearing room after the vote, courtesy of Senator Leo Raptakis.

“What happened in there?” I asked.

“I don’t know,” replied Raptakis, “I don’t know why they brought it up for a vote at all.”

The confusion Raptakis felt was understandable. Normally, if you want to kill a bill in the General Assembly, you just never let it come to a vote. Eventually the session ends and the bill is dead.

So why bring the bill up for a vote? What was really going on?

Senator Paul Fogarty’s bill would have allowed the voters of Burrillville the opportunity to vote on any tax agreements made by their town council with any power plant located in the town. The immediate effect of the bill would be to allow voters to decide on a tax treaty being negotiated with Invenergy, which wants to build a $700 million fracked gas and diesel oil burning power plant in the town. The Burrillville Town Council has been repeatedly dishonest with the residents of the town, and has been actively working to bring the power plant into the town against the wishes of most residents. Residents of Burrillville want a say in the process and they want to prevent the power plant from being built.

The House version of the bill, sponsored by Representative Cale Keable, passed out of the House Committee on Environment and Natural Resources on an 11-2 vote and passed the full House on June 8. The Senate version, after a long, contentious hearing that pitted Burrillville residents and environmentalists against labor and business, was tabled without a vote.

The forces in favor of the power plant did not want this bill to pass. It is believed by many that this bill will make it impossible for the power plant to be built, because it will interfere with Invenergy’s ability to secure financing for the project. A stable tax treaty is important to Invenergy because without it, the company faces the prospect of paying full taxes on the power plant. No tax treaty, no funding, some say.

In an effort to kill the bill, Invenergy paid for a full page ad in the Providence Journal. An editorial and an op-ed were published in the paper as well. Pressure was brought to bear on the Senate from the Greater Providence Chamber of Commerce and the Northern Rhode Island Chamber of Commerce whose lobbyists testified against the bills. And labor, which wants the plant built because of the much needed jobs it will provide, lobbied the Senate hard.

Meanwhile, there was pressure being placed on Governor Gina Raimondo by environmentalists to not veto the bill, were it to be passed. Raimondo did not want to be put in the position of having to veto this bill. She wants the public appearance of being strong on environmental issues, even if she supports fracking and fossil fuels. For Raimondo’s purposes, the less known on the national scene about her true environmental positions, the better. Vetoing this bill would create the wrong kind of headlines, the kind of headlines that might hamper her national political ambitions.

Satisfying these powerful players is easy. All that needed to happen was for the bill to never get out of the Senate Judiciary Committee, and the bill would die, never to be voted on. There’s only one problem: If that were to happen, Senator Paul Fogarty would have failed the community he serves, and though Fogarty, for political reasons, is opposed to the power plant and in favor of his bill, he’s a strong union member and supporter. Under normal circumstances he would be a reliable pro-union vote and a valuable ally.

A way to both kill the bill and save Paul Fogarty’s political career was therefore devised.

Four Senators, Frank Lombardi, William Conley, Donna Nesselbush and Stephen Archambault, presented legal-sounding arguments against the bill, all the while telling Burrillville residents watching the proceedings live or at home how wonderful their Senator Paul Fogarty is. They laid it on pretty thick at times.

“Kudos to Senator Fogarty for the concerns that he showed his constituency in the town of Burrillville,” said Senator Lombardi, “and [for] having the intestinal fortitude to bring forth the bill on the behalf of his constituents.

“And I mean this, Senator,” continued Lombardi, looking at Fogarty who was seated in the center of the room, “I think that the people of the town of Burrillville are very fortunate to have you as their Senator and the work that you do for them. Quite frankly you listened to them and you put forth what you thought was a very favorable bill for your citizenry.”

Not to be out done, Senator Conley said, “Senator Fogarty’s advocacy on behalf of the people of Burrillville on this issue was extraordinary. I’m just about at the close of my fourth year in the General Assembly and I can say without reservation that I’ve never seen one of my colleagues advocate in such a meaningful and, I don’t want to say aggressive but certainly in a strong way, on behalf of legislation. His heart and soul is behind this bill and whether you agree with one of your colleagues or not, it’s always that kind of advocacy in this building that often goes unsung. So it’s important to note that.”

Senator Nesselbush was more circumspect in her praise, saying, “Senator Fogarty has been a passionate supporter of this bill that he even convinced me to be a co-sponsor of the bill.”

Senator Archambault, who might run for Attorney General in 2018, also chimed in with praise for Fogarty, “I want to echo the sentiments of my brothers and sister with respect to Senator Fogarty. He’s been here for you all along, he’s put in a tough piece of legislation, it certainly hasn’t made him any friends on one side but he did it because he cares. I think his actions speak for themselves.” After this performance, I don’t think any environmentalists will be voting for him.

With Senator Fogarty properly lionized and hopefully protected, all the Senators needed was an excuse, any excuse, to vote against the bill. As it is, they produced three excuses. They also needed someone to blame. They couldn’t blame the business community, they couldn’t blame the Governor and they couldn’t blame labor.

Enter the Republican Burrillville Town Council with their press release turned resolution. At the original Senate Judiciary Committee meeting to discuss the bill, Senator Lombardi foolishly tried to pass off a press release against the bill from the town council as a resolution, but in fact the Burrillville Town Council didn’t get around to issuing an actual resolution until the committee meeting was almost over. But now, with a “proper” resolution in hand, Lombardi was able to produce a villain: the Burrillville Town Council.

In his statement after the vote, Fogarty expressed his disappointment at the bills defeat, but did not blame the vote on his fellow senators. Instead, he referred to the resolution, writing that the “last-minute opposition of the Town Council… [was] the equivalent of getting two torpedoes to the bow.”

“It’s a shame that the Burrillville Town Council does not have enough faith and confidence in the local citizenry to make an informed decision on a matter that will impact the future of their community,” wrote Fogarty, forgetting that it was the Senate Judiciary Committee, not the Burrillville Town Council that killed the bill.

Lombardi’s second excuse was that he was concerned about the precedent that passing the bill would set. He said that when the residents of a city or town disagree with their elected officials, they shouldn’t be looking to the state to pass new laws. Lombardi feared that the General Assembly might be flooded with every local issue that is “controversial” if they passed this bill. Of course, it’s fairly easy to find dozens of examples where the state has stepped in to override local laws and ordinances. The very creation of the Energy Facilities Siting Board, the body that will ultimately decide whether or not the power plant will be built, is an example of the state overriding local concerns and laws, for instance.

Lastly, Lombardi noted that one of his colleagues “was gracious enough to provide us with a Rhode Island Supreme Court case entitled Warwick Mall Trust v State of Rhode Island.” Sources told me that the court case was provided to Lombardi and the other senators by Senate Majority Leader Dominick Ruggerio, a strong supporter of labor who sat in on the original Senate Judiciary Committee meeting that heard testimony on this bill.

Lombardi said that the decision in this case could be applied to Fogarty’s bill, and claimed that the bill, as written, would be unconstitutional.

In the end, of course, the Senate Judiciary Committee voted Fogarty’s bill down. It was such an unusual occurrence that Chairman Michael McCaffrey couldn’t quite get his head around how it was supposed to work. As the chairman struggled to find the right way to phrase a no vote, two Capitol Police Officers entered the room, to make sure the crowd did not react aggressively to the decision everyone seemed to know was coming. The vote was 7 -2 against. Only Nesselbush and Erin Lynch Prada voted in favor of the bill.

The disappointment of the Burrillville residents could be felt physically. There were tears. Nick Katkevich, of the FANG Collective, shouted “Shame!” as he was leaving the room. The Capitol Police responded by telling Katkevich to leave, but he was already gone. Out in the hallway, there were more hugs and tears among the Burrillville residents.

They say they will continue the fight.

Looking over every single Senate Judiciary Committee vote this session, you will find that every bill brought up for a vote passed. In fact, every bill before this committee, but two, passed with no votes against them. The two exceptions were S2333 on May 5 and S2505 on March 3, and both times it was Senator Harold Metts casting the lone vote against. Until this day, six of the senators present had not cast a no vote in committee this year.

The truth is that no one is ever really supposed to vote no. These committee votes are pro forma. It’s theater. Every vote serves a purpose and no bill is voted on in committee without a predetermined outcome known well in advance.

And the vote on Paul Fogarty’s bill was no different.

June 8, 2016June 8, 2016

Burrillville Town Council opposes Keable/Fogarty power plant bill

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The Burrillville Town Council opposes legislation moving through the State House that would give local residents greater say on the tax agreement between the town and the proposed fracked gas power plant.

“The ill-conceived legislation before the General Assembly that purports to give residents a voice in the matter – in fact does the opposite,” said a letter released to RIPR’s Ian Donnis last night. “It weakens the Town Council’s ability to protect its residents and obtain financial compensation for hosting the proposed power plant.

The documents were released to Donnis by Dyana Koelsch, retained by the Town Council to handle public relations on their behalf. Koelsch, a former journalist-turned-public relations consultant, told me in a phone conversation last week she was retained by the Town Council to facilitate better communication between the Town Council and local residents.

The release of these documents seems to have come some time after the House passed Representative Cale Keable‘s bill, H8420 Sub A, which, if it becomes law, will allow the voters of Burrillville the opportunity to approve or reject any proposed tax treaty the Town Council makes with an power plant by popular vote. In recent days opposition to this bill has been ramping up, with Invenergy purchasing a full page ad in the Providence Journal on Saturday, an op-ed co-signed by Laurie White of the Greater Providence Chamber of Commerce and Michael Sabitoni of the Rhode Island Building and Construction Trades Council on Sunday, and a bellicose tirade on the Journal’s editorial page yesterday.

Despite the opposition of business leaders and unions the Keable bill passed the floor 64 to 7 as Burrillville residents applauded. You can watch the vote below and see the reaction of Burrillville residents below. The difference between the votes reported above and the votes pictured is due to some legislators entering their votes late.

The release of the Burrillville Town Council letter opposing the Keable bill provoked a flurry of responses on social media. At about 10:30pm Burrillville City Councillor David Place confirmed that the letter was indeed accurate when he commented on Burrillville resident and power plant opponent Jeremy Bailey’s Facebook page.

The reaction from Burrillville residents has been negative and angry:

“I have NEVER seen such political BS in my life!!!“
“Has to be a back room deal going on ! Obviously representing Invenergy’s interest over the citizens!!!!“
“This is very disappointing and kicks us in the gut ! These council people are traitors and sneaky too, it’s not fair to the towns people!“

It’s unclear when the Town Council decided to write the letter, or if that decision was made at a public meeting.

The timing of the release is strange, since tomorrow evening there is a Town Council meeting scheduled, with public comment. Past Burrillville Town Council meetings have been contentious. Tomorrow night’s promises to be explosive. Why the Town Council would choose to invite the approbation of their constituents is a mystery. There is talk of a recall election for the four Town Councillors not up for re-election this fall.

The most startling thing about the documents released is that they contain details of the town’s negotiated tax deal with Invenergy, details that the Town Council has previously stated must remain secret while being negotiated. Though the tax deal is not yet done, the Town Council says there is “an agreement in principle on the following:”

$2.9 million upfront payment – $1.2 million in guaranteed payments even if the EFSB denies the application
$92 million – $180 million guaranteed payments over the next 20 years
Protection for property owners near the proposed power plant site through a property value agreement
Fully binds future owners if the plant is sold or otherwise transferred
Protection for Town residents into the future by locking in place a decommissioning plan

The Town Council claims that the legislation weakens the Council’s ability to protect its residents and obtain financial compensation for hosting the proposed power plant, strips the Town Council’s negotiating leverage that can force Invenergy to compensate the town, and jeopardizes efforts to put financial safeguards in place for residents near the power plant and compromises an agreement for the decommissioning of the plant.

I reached out to Jerry Elmer, a Senior Attorney for the Conservation Law Foundation, overnight and he was kind enough to send me some notes on the various documents, which I will quote in full beneath the page he references.

Elmer said, in summary, “The bottom line is this: The members of the Town Council of Burrillville know, with absolute certainty, that the sweetheart deal they are negotiating with Invenergy would be overwhelmingly rejected by the voters of Burrillville if the voters of Burrillville got the right to vote on it. The members of the Town Council are correct in their assessment. That is why they are urging that the Keable-Fogarty Bill be rejected.”

From Jerry Elmer: “Document 2, page 1, bullets at the bottom: Town Council claims it has remained “neutral” on whether the plant should be built in order not to taint its comments to the EFSB. Two things must be said about this. First (and maybe more important), these documents show that the Town Council has not remained neutral, and that the Town Council very much wants to enter into a Tax Treaty with Invenergy. The Town Council is urging defeat of the Keable-Fogarty bill which would give the people of Burrillville the right to vote on such a (possible, future) tax treaty. That is not “remaining neutral.” Second, the Town Council has (very seriously) misunderstood what kind of “neutrality” is required of it by Rhode Island law. The Town Council has consistently refused to discuss the proposed Invenergy plant, even at public meetings, called pursuant to the state’s Open Meetings Act, even with a stenographer present. The Town Council pretends that this is being “neutral,” but this is merely ignoring constituents. And, crucially, this refusal to discuss the Invenergy proposal in open meetings is not required by any Rhode Island statute, law, rule, or regulation, including the state’s Open Records Act.”

From Jerry Elmer: “Document 2, page 1, bullets at the bottom: Town Council says that the purpose of the tax treaty is “to properly compensate Burrillville” if the Invenergy plant is built. However, what constitutes a “proper” level of compensation is a judgment call, about which reasonable people may disagree. The main effect of the Keable-Fogarty Bill would be to return that judgment call to the people of Burrillville.”

From Jerry Elmer: “Document 2, page 3, bullet half way down page [above], Town Council says: Having a tax treaty is a “guarantee of full taxability” of Invenergy. This is factually incorrect, and it is inconceivable to me that the Town Council is not fully aware of that fact. There is today, in the Town of Burrillville, a background, already-existing tax law that would cover this power plant (just as every municipality in Rhode Island, and indeed the United States, has an existing, background law on how to tax the real estate of individuals and businesses). The only reason that Invenergy wants a tax treaty with the Town of Burrillville is in order to get a different, lower tax rate. This makes sense: Invenergy will not negotiate with the Town for a higher tax rate; no business would do that, because it makes zero business sense. The reason that Invenergy would not negotiate for a higher tax rate is that Invenergy, without any negotiations at all, could get the currently existing tax rate. The only purpose of a tax treaty is to give the applicant (here, Invenergy) a lower tax rate than the existing one. This is true of this tax treaty, just as it has been true of every tax treaty since tax treaties were invented. In other words, when the Town Council says that a tax treaty is meant to be a “guarantee of full taxability” that statement is just factually incorrect.”

From Jerry Elmer: “Document 2, page 2, Town Council says that having a tax treaty in place “eliminates costly appraisals” and “eliminates volatility in future appraisals.” On these two points, the Town Council is speaking the literal truth, but in a deeply misleading way. These statements of the Town Council are factually accurate, but what is left unsaid is that, if the Keable-Fogarty Bill is defeated, that defeat will eliminate the right and ability of the people of Burrillville to vote on a Tax Treaty that may be reached between the Town Council and Invenergy. Let me use an analogy: I am threatening to murder you in cold blood. Before I do it, I tell you to think about the many “advantages” of being dead: you’ll save money on food, you’ll save money on rent, and you’ll never again go to a movie that you end up not liking. What I am saying is literally true, but what I am saying is misleading (in the extreme). So, too, with the Town Council statement. A tax treaty would eliminate costly appraisals — and would eliminate the right of the people of Burrillville to vote on a sweetheart deal reached between the Town Council and the people of Burrillville.”

Tomorrow the Senate takes up their version of the bill, S3037 in Senate Judiciary at 2:30pm in room 313 in the State House. The Burrillville Town Council meets tomorrow evening at 7:00pm in the Town Council Chambers, Town Building, 105 Harrisville Main St., Harrisville.

June 5, 2016June 7, 2016

Business versus democracy in Rhode Island

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When describing what she sees as the problem of convincing millennials that they need financial literacy, Abigail Johnson, the CEO who runs the company that runs Fidelity Investments, said that not only do millennials not understand that they need to save money for retirement, but they “don’t have the money to save anyway, so what’s the point?” (See video below, starting at the 23m mark)

Johnson was making a joke, one that Governor Gina Raimondo laughed at along with most of the attendees of the Greater Providence Chamber of Commerce 2016 “Economic Outlook Luncheon.” She was answering Chamber president Laurie White’s question about the difficulties of channeling millennials into the workforce of the future.

Johnson hoped that millennials, even those who don’t go to college, might one day learn the “concepts” and “basics” of financial planning. She estimated that perhaps 14 percent of Rhode Islanders have their retirement funds invested in her company, the not-so-subtle subtext being that she sees millennials, the “workforce of the future,” as essential to her company’s future profits.

White, Johnson and Raimondo were talking about people as commodities, defined purely by their economic value.

This is the promise of “neoliberalism,” ostensibly a view that markets, when left alone, will govern themselves fairly and equitably. But Wendy Brown, a political scientist at UC Berkeley, wanted to explore what neoliberalism has done “to political life, to social life and to the human being.”

Neoliberalism seeks to expand markets to every part of life, including democracy, human social life, education, social services and more. “The idea,” says Brown, “is not to just let free markets have their way, but to produce everything in the image of the free market.”

Brown calls this the “stealth revolution,” the transformation of the human being into nothing more than their economic value and the devaluation of democracy in the face of market forces and the will of the billionaire class.

What we lose by turning our government into a business determined by markets instead of democracy is the idea of equality as a fundamental principle, the unraveling of shared power, and the undermining of the people’s ability to determine a societies values and policies, says Brown.

Under this view, says Brown, there is “no space for democracy anymore… everything should be understood as markets…”

This brings me to Lenette Boiselle, representing the Northern RI Chamber of Commerce at a RI House Environmental committee meeting last week. Boiselle was at the hearing to oppose “one specific part” of a bill that, if passed, would give the voters of Burrillville the power to approve or reject any tax deals made by their town council with power plant companies.

“The Chamber of Commerce has a history of opposing any type of referendum,” said Boiselle, “whether it be a voter initiative or a referendum on a mall, a casino… as a fundamental principle, the Chamber of Commerce believes that these types of issues are extremely complicated…” When issues like this are decided by referendum, said Boiselle, “those who spend the most money usually win.”

Representative Aaron Regunberg then asked, “Money plays a big role in every election. Do you think we shouldn’t have any elections?” [4m55s]

Boiselle seemed to understand that saying democracy doesn’t work might be a bad move, so instead she told a story that sought to undermine democracy’s legitimacy. She gave an example of what she saw as the problems of voter referendums she worked on in Massachusetts.

Earlier that day Boiselle was at the Northern RI Chamber of Commerce breakfast that featured Invenerg’s director of development, John Niland, as the the speaker. Questions at this breakfast were written down by attendees on idea cards and submitted in writing to Boiselle, who carefully went through them to make sure that Niland was not hit with any questions that he was unprepared to answer.

This is the kind of protection from scrutiny private business concerns routinely employ. When we run our government like a business, we shouldn’t be surprised when our elected officials try to employ the same methods to protect themselves from scrutiny. This is why Governor Raimondo doesn’t want to go to Burrillville and talk directly to the people. This is why she goes denies APRA requests. This is why she makes trips to New York, or plans trips to Switzerland, but won’t say who she is talking to or why.

I’ll leave this with one final thought.

“Modernity brought us the idea that human beings, rather than nature, rather than Gods, and rather than tradition… could be in charge of their own lives, their own future, and could exercise freedom in coming together with others and deciding individually, how to live,” said Wendy Brown, “That was the promise of modernity.”

Let’s work together to forge a democracy that does not forget this.

May 28, 2016September 16, 2016

Video: House testimony on Keable’s power plant bill

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The testimony on Cale Keable’s bill, H8240, which if passed will give voters in Burrillville the ability to approve or reject any tax treaty with potential power plants in their town, pitted town residents and environmental activists against business and labor concerns. In all 56 people testified on the bill during the five hours of testimony, 43 in favor and 13 in opposition.

Below is all the testimony, in order, separated by speaker.

01 Representative Cale Keable, who represents Burrillville, introduced the bill.

02 Jeremy Bailey, Burrillville resident

03 Lenette F. Boisselle, representing the Northern RI Chamber of Commerce, opposes the bill. Earlier in the day, Loiselle was at the Kirkbrae Country Club for the Northern RI Chamber of Commerce breakfest. At that event, all the questions for guest speaker John Niland, director of development for Invenergy, the company that wants to build the power plant in Burrillville, were submitted in writing. It was Boiselle who carefully sorted the questions, allowing Niland to only answer softball questions.

Boiselle took some tough questions regarding her opposition to the bill. The Chamber of Commerce, says Boiselle, “has a history of opposing any type of referendum… as a fundamental principle, the Chamber of Commerce believes that these types of issues are extremely complicated, that’s why we elect people to be in a position to be able to take the time to study the pros and the cons and determine whats in the best interest of whether it be the town or whether it be the state.”

Boiselle said that the Chamber has “no position on the power plant one way or another” and that if this bill is passed, whoever spends the most amount of money to advertise their positions will likely win.

The legislation, said Boiselle, in response to a question from Representative Michael Marcello, “could kill [a project] just by making it wait” until the next general election for the voters to decide.

Representative John Lombardi asked “what would be wrong with the town and the council having the last say in this. Is there a problem with that? You say you oppose that?”

Boiselle said that the time it takes to understand the pros and cons of complex issues is too great for voters. That’s why we elect representatives.

“I think its always good to engage the people,” said Lombardi.”It’s supposed to be a representative government, but sometimes it doesn’t end up that way. They don’t seak on the behalf of the people. I think this is a good process.”

“I’m just curious,” asked Representative Aaron Regunberg, “Money plays a big role in pretty much every election, do you think we shouldn’t have any elections?”

04 Jerry Elmer, senior attorney at the Conservation Law Foundation is strongly in favor of the bill.

05 Mike Ryan of National Grid opposes the bill, at least in part. They have no position on the part of the bill concerning voter approval of negotiated tax treaties.

06 Meg Kerr, of the Audubon Society, is for the bill.

07 Elizabeth Suever representing the Greater Providence Chamber of Commerce opposes the bill. She seems to think that granting more democracy to Burrillville might make other municipalities want more democracy as well, which may slow down growth. Of course, Suever never uses the word democracy, because that would make her argument sound anti-American.

08 Paul Bolduc is a Burrillville resident.

09 Greg Mancini – Build RI

10 Paul Beaudette – Environmental Council of RI

11 Michael Sabitoni -Building Trades Council

12 Lynn Clark

13 Scott Duhamel – Building Trades

14 Peter Nightingale – Fossil Free RI

15 Roy Coulombe – Building Trades

16 Adam Lupino – Laborers of NE

17 Catherine

18 Paul McDonald – Providence Central Labor Council

19 Paul Lefebvre

20 George Nee AFL-CIO

21 Jan Luby

22 Richard Sinapi – NE Mechanical Contractors Association

24 Doug Gablinske Tech RI, The Energy Council

February 11, 2016February 11, 2016

Sleepless nights and cognitive dissonance at the State House

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Speaking at the Greater Providence Chamber of Commerce (GPCC), alongside Senate President Teresa Paiva Weed and Governor Gina Raimondo, Nicholas Mattiello proudly ticked off a list of his tax cutting accomplishments since becoming Rhode Island’s Speaker of the House.

We’ve reduced the corporate tax rate in Rhode Island.

“We exempted sales tax on energy costs to assist businesses.

“We raised the exemption on the estate tax to keep successful folks in the State of Rhode Island.

“We eliminated the social security tax on many Rhode Islanders so we can assist the middle class after a lifetime of commitments so that they can stay and thrive in Rhode Island.

“We eliminated tax on radiology services to assist that industry.”

Acting as the self-appointed Yin to Mattiello’s Yang, Paiva-Weed spoke about how the Speaker and Governor stood with her “to take some of the most difficult votes the General Assembly could take to cut the budget…

One of them was last year… and that was cutting $70 million from Medicaid. That was a hard vote…

“In addition, many of you in this room were not standing here cheering when we had to make those difficult votes to ensure the passage of pension reform. And that was a vote that quite honestly kept me up many nights, because it really did hurt people…”

“It really did hurt people.” Let that sink in for a moment.

“We raised the exemption on the estate tax to keep successful folks in the State of Rhode Island,” the Speaker had said, not five minutes earlier.

The message was as jarring as it was obvious: Tax cuts on the rich hurt people. Our leaders know this, but they don’t want to believe it. It’s called cognitive dissonance.

Beyond just hurting people, poorly targeted tax cuts do nothing to help the greater economy and instead impoverish a government’s ability to maintain infrastructure. Hence, RhodeWorks.

RhodeWorks will shift the financial burden of repairing RI’s roads and bridges onto trucking companies, who will maintain their profits by increasing the price of goods. This will burden the poor and middle class much more than it will the rich, who will be able to manage slight price increases by drawing on the extra money they keep through the tax cuts they’ve been granted.

Despite Paiva-Weed’s protestations, she has not cast “difficult votes”. A difficult vote would be one in which she stood up for those without power and against the money of the connected elite. A difficult vote would be one of compassion and courage.

No, the votes Paiva-Weed made were easy, because the people she hurt have no power to hold her accountable for their pain. Her conscience might bother her, but what good is a conscience when the corporate tax rate needs to be cut?

As for Mattiello, after he proudly listed his accomplishments, he said, “We have been laser focused on moving our economy forward and doing the kind of things that build economic wealth and growth and jobs in the State of Rhode Island.”

“And then I hear,” said Mattiello, pausing as the cognitive dissonance crackled through his brain, “that there’s a consensus that we have the worst roads and bridges in the country and it’s the leading concern of businesses. It’s the number one driving force for businesses in their decision making.” Another pause.

Mattiello’s pauses say it all. All that money he gave away to his well off neighbors was for nothing. All those cuts to pensions and Medicaid were for nothing and all those people hurt by these cuts were hurt for nothing.

Our leaders bought the lies of economic charlatans, gave away millions in tax cuts, impoverished our state and hurt people terribly, only to find that what was really needed was a strong infrastructure, an infrastructure we might have been able to afford if we weren’t crippling our economy by cutting the taxes of dead millionaires.

February 10, 2016February 10, 2016

Fast tracking RhodeWorks: Passing unpopular legislation in an election year

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Ahead of yesterday’s finance committee votes in both houses of the General Assembly approving RhodeWorks, the truck toll plan, a press conference was held at the Greater Providence Chamber of Commerce (GPCC) featuring some of Rhode Island’s most powerful political, business and labor leaders. They were there to present a unified message in support of the tolls, despite vocal opposition.

One prominent Rhode Island business owner, whose business has “been a member of the Chamber for almost as long as there’s been a Chamber” told me that contrary to GPCC President Laurie White‘s claims that this issue has been discussed with membership, he was never consulted about the plan, despite his business’s dependence on trucks for shipping. In fact, he said, “I didn’t even hear about this meeting until I heard about it on the radio this morning!”

As I said before, RhodeWorks is inevitable. The legislation has been fast tracked not because there is a sudden, urgent need to fix our roads and bridges; the need for this repair is decades old. The legislation is being fast tracked because the necessary arrangements between the various parties involved have been carefully worked out, but in an election year, meaning that the sooner elected officials put this issue in their rear view mirror the better. Several legislators are going to be challenged for their seats because of their votes on this.

Not that Republican challengers are offering anything better. As Sam Bell pointed out yesterday, the Republican plan seems to be privatization, which means private businesses will take over our roads and bridges and charge whatever tolls they want to for profit, or their plan is cutting the budget, denying important social services to families in need. (Not to worry, though: Senate President Paiva-Weed promises that she and Speaker Mattiello will continue to cut the budget, cut taxes and cut services. More on this in a future article.)

The cost of RhodeWorks will be passed onto consumers. Ocean State Job Lot raised a stink over the weekend when they put their expansion plans on hold, threatening as yet unrealized jobs, but after this all pans out, Job Lot will not lose out on any profits: They will simply raise the price of their goods. This means that we are not imposing a user fee on businesses as much as we are coming up with yet another regressive tax that will affect the poor and middle class more than the rich, which is just the way our political leaders like it.

The General Assembly is expected to pass RhodeWorks today, and Governor Raimondo will sign the legislation asap. In the meantime, you can watch the full press conference below.

Laurie White, Greater Providence Chamber of Commerce (GPCC) President

RI Governor Gina Raimondo

Providence Mayor Jorge Elorza

Peter Andruszkiewicz, Blue Cross & Blue Shield of Rhode Island CEO and President

Scott Wolf, Grow Smart Rhode Island Executive Director

Lloyd Albert, AAA of Southern New England Senior Vice President

Michael F. Sabitoni, Rhode Island Building and Construction Trades Council President

House Speaker Nicholas Mattiello

Senate President Teresa Paiva-Weed

Woonsocket Mayor Lisa Baldelli-Hunt,
Central Falls Mayor James Diossa and
Lt. Governor Dan McKee were in attendance but did not speak.

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

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.”

February 4, 2016

RhodeWorks is inevitable

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RhodeWorks is going to happen and nothing is going to stop it.

The idea of installing 14 tolling gantries and charging trucks up to $20 to transport goods through our state is key to Governor Gina Raimondo’s plan to generate the funds needed to repair Rhode Island’s crumbling bridges and roads. There is a logic to this: Trucks are heavy and do the most damage to the roads so they should pay their share.

In her State of the State address, Governor Raimondo said, “While we’re at it, let’s reject the politics of procrastination and pass RhodeWorks.” Both House Speaker Nicholas Mattiello and Senate President Teresa Paiva-Weed have strongly supported the program.

The revised RhodeWorks plan is cheaper, and is to include a strict prohibition on tolling cars without a public referendum. “Generally,” said Mattiello, “I don’t like referendum questions.” But he included this feature in the truck toll bill to cut off opposition to the plan based on the slippery slope: tolling trucks will now not lead to tolling cars without a majority vote from the public.

At the Greater Providence Chamber of Commerce (GCPP), Mattiello said, “I’ve thought about this more than any of you care to.” Mattiello says he’s consulted experts on the economic impact, and that the “experts say it is going to improve the economy… I don’t know any way to do this without listening to the experts.”

The GCPP is a strong, vocal supporter of the truck toll bill, as are the Building Trades. Michael Sabitoni, President of the Rhode Island Building and Construction Trades Council was a welcomed, if surprising guest at the GPCC luncheon.

After the GPCC luncheon, about five hundred members of the various building trades and their allies showed up at the State House to express their support for RhodeWorks. So many union members showed up it took over an hour for them all to enter through the metal detectors. There was supposed to be a speaking program from union leaders, and maybe it happened, but I had to leave.

It didn’t matter. Labor made their point. They want (and need) the jobs that come with fixing our bridges and roads.

Rhode Island needs to repair and upgrade its infrastructure and government, business and labor are all in agreement that the debate as to how to pay for it is over: The plan is RhodeWorks.

May 28, 2015

Providence Foundation stadium report cherry picks data

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The Providence Foundation‘s report in favor of building a new stadium in downtown Providence for the PawSox reads as a sales pitch for the PawSox owners rather than as a sober economic analysis of the pros and cons of a stadium being built downtown with public funds.

Identified as a “business-backed group” and “an affiliate of the Greater Providence Chamber of Commerce,” The Providence Foundation released this report recommending that “the state, the city, the I-195 Commission and the [PawSox] team owners” come to an agreement and build a new stadium downtown.

Unfortunately, the first third of the report, in which the economic and “catalytic” effects of the proposed ballpark on “real estate development, economic development” and job development, commits egregious methodological errors.

The authors of the report reviewed eight “downtown stadiums” and came to the astounding conclusion that, “in all cases… [the stadiums] have been major factors in the increase of restaurant and retail sales in the area. The facilities have assisted the tourism and convention business and, in some cases, are selling points in the attraction of new companies into the respective cities.”

The stadiums selected for analysis were:

BB&T Ballpark, Charlotte, NC
Chickasaw Ballpark, Oklahoma City, OK
Durham Bulls Athletic Park, Durham, NC
Fifth Third Field, Dayton, OH
Fifth Third Field, Toledo, OH
Huntington Park, Columbus, OH
Regions Field, Birmingham, AL
Southwest University Park, El Paso, TX

No criteria is given as to why these eight stadiums were selected to be reviewed by the report or why dozens, if not hundreds of other sports arenas nationwide were left out. Could this be because the eight stadiums were hand selected by PawSox owners as representing the best eight examples of successful stadium building across the country? I asked Daniel A. Baudouin, executive director of the Providence Foundation for clarification on this point.

“[W]e selected stadiums that were in downtown areas that were constructed/renovated recently and ones that have some geographic diversity” he said in an email to RI Future. “We could have selected more stadiums that were built less recently and as we understand it, have been successes in being a positive force in downtowns (Memphis, Buffalo, Louisville, Norfolk).”

Three of the stadiums included in the report, Durham, El Paso and Toledo, were specifically mentioned by late PawSox owner James Skeffington in conversation with Dan McGowan back in February as models for the proposed Providence stadium. Skeffington mentioned BB&T Ballpark to reporters on April 2 during a tour of the I-195 land. Dayton is mentioned as an model ballpark by Skeffington in this Projo piece. Birmingham is showcased on the Baseball RI site that the PawSox owners are using to sell the idea of a downtown ballpark while Oklahoma is mentioned on the Baseball RI site here.

With all but one of the Providence Foundation’s case studies having been vetted by James Skeffington and the PawSox owners, people who stood to make millions from the proposed ballpark, it’s small wonder that the report was favorable.

Speaker Nicholas Mattiello’s stadium consultant Andrew Zimbalist said in 2009 that, “One should not anticipate that a team or a facility by itself will either increase employment or raise per capita income in a metropolitan area.”

Sports economist Victor Matheson, who spoke at the Blackstone Valley Visitor’s Center on May 13, agreed with Zimbalist. There is, said Matheson, “remarkable agreement among economists finding that spectator sports result in little or no measurable economic benefits on host cities,” said Matheson.

“To your question on overall economic benefits,” said Baudouin, “I will leave that to economists; we did not analyze the macro-economic impact.” That’s a fine distinction to make, except that one of the questions the report was trying to answer is, “Will the stadium be a positive force/catalyst for real estate and economic development in the vicinity of the stadium?” That’s a macroeconomic impact by definition.

In addition to picking only those examples that might prove the case they wanted to make, The Providence Foundation failed to mention the “substitution effect,” described by sports economist Brad Humphreys, in this piece by Melissa Mitchell:

As sport- and stadium-related activities increase, other spending declines because people substitute spending on sports for other spending. If the stadium simply displaces dollar-for-dollar spending that would have occurred otherwise, there are no net benefits generated.”

So how did the Providence Foundation come to such a radically different conclusion from all experts in the field of sports economics?

They cherry picked the data, of course.

Cherry picking, or suppressing evidence, is “the act of pointing to individual cases or data that seem to confirm a particular position, while ignoring a significant portion of related cases or data that may contradict that position.” It’s a well known logical fallacy, but when done intentionally, it is less an error than it is an attempt to deceive.

Whether by accident or design, The Providence Foundation report on a potential downtown Providence ballpark is not of high value, and its issuance calls into question the putative logic behind all the economic positions maintained by The Providence Foundation and the Greater Providence Chamber of Commerce. Both groups regularly lobby state and local legislatures on a host of issues, such as minimum wage and progressive taxation.

It is way past the time to stop seeing the claims “business backed groups” as factually grounded, but to instead recognize them as sophisticated sales pitches.

February 13, 2015February 13, 2015

Speaker Mattiello calls for an end to criticism of Speaker Mattiello

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Speaking at a Greater Providence Chamber of Commerce luncheon, Speaker of the House Nicholas Mattiello held court and spoke plainly about his economic priorities for Rhode Island.

Clearly upset that Politifact ruled false his recent statement in which he denied that there have been tax cuts for the rich in Rhode Island, Mattiello pointed out that when he speaks to his “well-to-do” neighbors, they “don’t see any tax relief.” Then in a gesture more suited to Imperial Rome than to Democratic Rhode Island, Mattiello declared, “That discussion has to stop.”

Of course, the discussion isn’t stopping.

Mattiello made no secret about his economic priorities: rich people. The real question is why any business interest in Rhode Island bothers to pay lobbyists any more, given that Mattiello has basically said that businesses will get everything they want, from lower taxes to fewer regulations. Says the speaker, “We have to concentrate on the things that are important… Let the business community know that they’re important to us, know that we are going to do the types of things they need to have done.”

No longer will people be the priority in Rhode Island. “We changed the tone,” said Mattiello, “The business community knows that they have priority, they know that they’re important…”

It follows then that people not in the business community do not have priority and are unimportant.

On HealthsourceRI, one of the most successful state run health exchanges in the country, Mattiello remains unconvinced, saying, “I’m informed that it’s not as good as we think it is… There are a lot of problems with the exchange… It should be no more expensive than it would cost us to have the federal government to do it…”

I can’t be the only one who detects a massive dose of hubris when Mattiello says, “I have not made my mind up as to whether or not we’re going to keep it in the state, give it to the federal government and so forth…”

Just in case you need a preview of what to expect as the years roll by under Mattiello’s House leadership, you can rest assured it’s going to be more of the same. “I would support [reducing or eliminating the $500 minimum corporation income tax] and I would support reducing and eliminating other taxes also. There’s a lot of taxes we could reduce or eliminate… I’m not sure that’s it going to be my priority this year, but it’s certainly something that I’m mindful of and it’s something that we ultimately have to address.”

One has to wonder when the General Assembly will get its House in order, and find new leadership.

February 9, 2015February 9, 2015

Minimum wage opponents warn of robots, false economic logic

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Rep David Bennett’s bill to increase the Rhode Island minimum wage to $10.10 from its current $9 would be the fourth time in four years that the lowest earning Rhode Islanders would see an increase in their pay due to legislative action. Like always, such an increase will not come without a fight.

Last week’s meeting of the House Labor Committee saw five different business lobbying groups send representatives to speak against any increase. During the two hours of testimony, any reason that could be dredged up to oppose increasing the minimum wage was presented – including fear mongering, the citing of questionable studies and downright falsehoods.

Lenette Boisselle, representing the Rhode Island Hospitality Association, suggested that the minimum wage is merely a temporary training wage, and not much used in the state, even though Rep. Bennett just testified that there are 45,000 Rhode Islanders making minimum wage. Boisselle said that we don’t yet know what effects the recently enacted minimum wage increase will have on our state’s economy. Elizabeth Suever, of the Greater Providence Chamber of Commerce, agreed with Boisselle and suggested that the state do a study to determine what the appropriate minimum wage should be.

Bob Bacon, who is the chairman of the RI Hospitality Association and runs Gregg’s Restaurants, a small chain of medium priced eateries, maintained that any increase in the minimum wage will force prices to rise, resulting in no advantage for workers. But what minimum wage advocates should really be worried about, according to Bacon, are robots.

“There’s already massive movement towards technology that will eliminate the need for labor,” said Bacon, “In many restaurants now you have touch pads. Guess what’s next? Pretty soon you’re placing your order on that thing and it’s going to take ten less people to serve you your dinner. And McDonald’s has a system now that one guy at the end of the line starts the burger process and it spits out the other end and they eliminated three people in the middle.”

John Simmons, of the Rhode Island Public Expenditure Council, did Bacon one better. “There’s been some work done, I think, by McDonald’s, as a matter of fact. In particular, on hamburger making. There is some expertise now that they’re drafting up that there will be no person making hamburgers anymore at McDonald’s. It will be all done by machine.”

That workers demanding fair pay will force industry to develop robots has been the refrain from economic conservatives for a while now. The Wall St. Journal ran a piece called “Minimum Wage Backfire” that blamed business automation on minimum wage activists, writing, “The result of their agitation will be more jobs for machines and fewer for the least skilled workers.” Conservative blogs and other media have run with the story, but there’s no truth in it.

As Patrick Thibodeau points out in Computerworld, “The elimination of jobs because of automation will happen anyway.” Some experts think that robots and computers will “replace one third of all workers by 2025.”

Bob Bacon must know this.

Gregg’s Restaurants is a pioneer in the computerization of restaurants. Most of the millions made by Bill and Ted Fuller, owners of the small chain, has come from POSitouch, “the food service industry’s most feature rich POS system.” I’ve heard rumors that the entire Gregg’s Restaurant chain is a loss leader, maintained to demonstrate the POSitouch system to interested buyers.

If robots were able to do the work needed to replace people in restaurants, POSitouch would be in a position to know. The information Bacon and Simmons presented about the hamburger machine is probably untrue, because if the technology existed to automate the burger making process, McDonald’s would already be using it. Instead, McDonald’s is investing in ordering kiosks, like ATMs in banks or the self-checkout machines at supermarkets. And it’s doubtful that these kiosks could be prevented if the employees agreed to work for less money.

How can any worker live on less than it takes to maintain an iPad?

John Simmons made the additional point that an increase in the minimum wage is basically unnecessary because, if you are on minimum wage then “you are probably getting earned income tax credits, you’re getting Medicare, you’re getting all the social programs which are allowing you to offset all the inflationary issues because you’re not paying for them anymore.”

That’s true. Low wage workers are not paying for all this government assistance. Taxpayers are. Rep Bennett testified that Walmart has nine locations in Rhode Island and pays $9 an hour. Their revenue is $476.3 billion. Rhode Island subsidizes Walmart’s labor costs through social services. Raising the minimum wage would force Walmart to pay its own labor costs, and allow more people to live without government assistance.

This could go a long way towards Speaker Nicholas Mattiello’s dream of a world without a social safety net.

Some legislators helped those speaking against the minimum wage with their testimony by lobbing out leading questions, as evidenced by this exchange between Republican Representative Antonio Giarusso and Bob Bacon:

“What is minimum wage?” asked Giarusso, “Is it a living wage, is it somebody just getting out of school, making their way, trying to learn the ropes? Not to put you on the spot, but of all your employees, how many of them are making a minimum wage or something really close to it and are the breadwinners in their households?”

“The breadwinners?” asked Bacon before answering, “Zero.” Two which Giarrusso said with satisfaction, “I thought that would be the answer.”

Penelope Kyritsis, representing RI National Organization for Women, said that approximately 60% of minimum wage workers are women, based on a a report from the National Women’s Law Center. Most of these women have children and no spouse to rely on, meaning that they are the main breadwinners in their family.

A typical minimum wage worker, according to Kyritsis, contrary to popular belief, is not a teenager. The average age of a minimum wage worker is 35, according to the United States Department of Labor, and 88% are at least 20 years old.

A full report on the benefits of raising the minimum wage in Rhode Island to $10.10 can be found here. It should be noted that a single person with no children needs to make $11.86 an hour, to not be in poverty.

If there are any doubts about the cozy relationship between our General Assembly and the business interests in Rhode Island, there’s this exchange I’ve reproduced in comics form.

Right now, business owners and lobbyists have the reigns of the State House. They are pursuing an economic agenda that has only benefited those at the top and almost never those who struggle at the margins.

If low wage workers want fair treatment at the State House, they have to organize and demand it.