Progressive News, Opinion, and Analysis
Here’s video from this morning’s Fight for $15 protest at Burger King in Providence. There are protests today at fast food restaurants in Pawtucket, Providence at the Warwick Wendy’s at noon.
Robert Paquin, the executive director of the Rhode Island Republican Party, said he will be attending the Warwick Wendy’s protest at noon.
Robert Malin has video on the May Day march in Providence yesterday. It includes people rallying against the city’s proposed plan to move the bus terminal out of Kennedy Plaza, Wendy’s workers, Hiton hotel employees, foreclosure and immigrant rights activists.
Ann Albro-Mathieu, president of the Providence, RI Area American Postal Workers Union Local 387, talks about why trusting your mail to a minimum wage Staples employee is not the same as trusting your mail to a fully trained postal officer. Her union led a recent demonstration outside the Staples store on North Main St. last Thursday.
On Thursday, organized labor groups across the country protested in an effort to call attention the proposal to install US Postal counters in more than 1500 Staples stores across the country. Unless this deal is stopped, the net effect will be that personal and business correspondence and packages will soon be handled by a rotating cast of barely trained minimum wage employees instead of by fully trained and well-paid professionals. More good paying jobs that support families will vanish from our economy.
That this is just another outrageous privatization scam and undisguised corporate theft should be obvious.
In Providence, over 100 union members, family and supporters organized outside the Staples on North Main Street to let the public know about this shady backroom deal. Given that Staples is controlled by Mitt Romney’s Bain Capital, the entire scheme seems like a conservative consolation prize to the guy who spent too much of his own money in a hopeless campaign for the presidency.
The united States Post office is our post office. Benjamin Franklin was the first Postmaster General, and our right to a properly functioning government post office is built into the Constitution.
We are all going to miss the US Postal Service when it’s gone, so fight for it now.
In several recent conversations about the gubernatorial race, people have talked about “the labor vote” going to this candidate or that. We often hear pundits and even reporters talking about “unions” as a monolithic bloc. Like thinking that all RI Democrats are equally liberal, seeing the labor movement as a single unit is deeply flawed.
The world is a complicated place. Many things, even contradictory things, can be true at the same time. Nor is it a zero-sum game. Just because something you like can be supported with evidence does not mean that the things you don’t like cannot. As a rule, everything people say and believe is true…to an extent.
Like people, like the world, unions are a complicated mass of contradictory things. As conservatives claim, it is true that unions can sometimes act to shield incompetent or unproductive workers from scrutiny and accountability. But it is also true that unions can sometimes act to shield good workers from unscrupulous bosses.
In my experience, the latter is true far more often than the former. But for conservatives and their allies in the press, one example of union shenanigans invalidates a mountain of evidence that unions do critical, sometimes life-saving work. This has to end.
(Here, I will contradict myself in that the following is a zero-sum exercise. As I will prove that the union landscape in Rhode Island is complex and varied, I will simultaneously disprove that “labor” is a single, undifferentiated bloc. Deal with it.)
I cite as evidence the union endorsements for gubernatorial candidates in the 2010 election. Also, this will support my long-running assertion that the RI Democratic Party—that is, The Machine—is dominated by highly conservative people to the point that a former Republican was the “liberal” in that race.
The Teamsters union is not a progressive organization, and its members are mostly social conservatives. In 2010, they endorsed Caprio, the Machine’s candidate. Caprio is nobody’s progressive, nobody’s liberal; he is a Democrat in name only. At the PPAC debate, the Teamsters turned out in numbers and set the ugly, partisan tone. Sitting in that highly-charged atmosphere, it was hard not to think of the phrase “union thugs.”
The SEIU is the kind of union that proves we need unions. Service workers—and I was one for about 15 years—are some of the worst abused workers in the country. As a never-was rock star, I spent many years in commercial kitchens. It is dangerous work for bad pay. And bosses and customers frequently fail to distinguish between “service” and “servant”.
In another career, I met a person in the restaurant equipment business. He told me that there is a trade term for restaurant workers: the burn-and-churn. Restaurant owners will consciously try to keep wages low by driving workers to their physical and mental limits, forcing them to quit or commit a fireable offense. Then they replace them from a large pool of unemployed workers and repeat the process.
The SEIU rightly endorsed Chafee. Even though Chafee was then an independent and recent defector from the GOP, he was by far the most liberal candidate. Virtually all progressives supported Chafee. Some, like me, did so openly. Others more integrated into the Democratic Party, could only work in the shadow or drag their feet in support of Caprio.
The AFL-CIO is a coalition of coalitions. It embodies the vast diversity in the labor movement. So it’s telling that the AFL-CIO endorsed…nobody. Because Caprio and Chafee represented such distant political positions and because the AFL-CIO members find themselves equally divided between those two positions, the Grand Coalition could not achieve unanimity of purpose and issue an endorsement. They basically abstained from the campaign.
To review, the more conservative union backs the more conservative candidate and the more liberal union backs the more liberal candidate. And the broad-based coalition union can’t decide.
This is what diversity looks like. Different people, different groups, different unions are, well, different.
It is unhelpful for people to talk about unions as if they were all the same. Conservatives do it specifically to make good unions look bad, tarring them all with the same brush, as the saying goes.
But members of the press—to whom this post is dedicated—do this because it’s easy. Explaining complex issues is hard and takes a lot of words. Reporters are under deadline, and editors can’t have long stories.
This is unacceptable because it has a real impact on the political discussion in Rhode Island. And Rhode Island desperately needs to have an honest, open discussion about our badly broke political system.
Let’s start by changing the way we talk about the organize labor movement.
With the first round of voting in the controversial pension reform settlement set to conclude today, the ACLU of Rhode Island has announced plans to submit testimony at an anticipated “fairness hearing,” if one occurs, in order to raise concerns about the settlement’s opt-out voting process.
In the past month, the RI ACLU has received dozens of complaints from union members and retirees about the settlement’s “opt-out” voting process, which counts all unreturned ballots as votes in support of the settlement. In a letter to the complainants, the ACLU acknowledged the legitimacy of those concerns, noting that:
A fairness hearing, in which the court decides whether the proposed settlement agreement is fair and reasonable, will only be held if none of the designated “classes” of voters reject the proposal during the two rounds of voting that will take place.
While planning to submit testimony at that hearing, the ACLU advised complainants it would not be taking any independent legal action. The letter concluded by emphasizing that while the ACLU did not “question the good faith of all the parties who have been involved in this intricate litigation . . . an opt-in process is the only fair way to conduct a vote like this.”
The Procaccianti Group, the multinational real estate holdings corporation that owns the Hilton and Renaissance hotels in Providence where workers have been protesting and organizing a labor union to demand more humane working conditions, should treat their employees better, agreed Justin Katz and I on last week’s NBC 10 Wingmen.
“In a given circumstance, perhaps they should” form a union, Katz said and said the way they have been treated is “garbage from [employers].”
Katz deserves a lot of credit for this admission. Richard MacAdams, one of the board members for the vehemently anti-union political advocacy group he works for, is also on the chief legal counsel for the Procaccianti Group. I respect Katz for speaking his truth on this issue for the same reasons I respect the fired Hilton Providence workers for speaking theirs.
But, as per every episode, we also had some disagreement. Katz would prefer the invisible hand of the free market create better working conditions for the Hilton employees.
“What I don’t like the union union debate the way it sets it up unions have power to counteract business power,” he said. “If a company isn’t valuing its workers then that’s a problem with the company and we have to create an economic environment in which they suffer for that.”
In theory, everyone agrees I suppose. But from a practical point of view, unfettered capitalism simply doesn’t have an effective way to compel a multinational holdings company to pay poor people a living wage without workers organizing and making a stink about it.
Central Coventry fire fighters aren’t giving up on the residents they protect. On Friday, they filed a lawsuit with the state Supreme Court to keep the embattled fire district operational.
“We believe there is no need for liquidation,” said Central Coventry union president David Gorman, adding that it would be dangerous and expensive for residents if the rural town’s largest and busiest fire district is eliminated.
“There is still no plan in place to provide protection,” Gorman said. “Everybody needs funding, no matter who answers the calls.”
Liquidating the district, he said, will prove more expensive than keeping it operational. He expects taxpayers will be responsible for the $8 million in contract obligations they have agreed to, and the state pension board would require retirement obligations, between $6 and $9 million, would need to be funded too.
Gorman said he has tried to negotiate with the local fire district board, but they won’t talk with him. “We believe we can make the budget numbers work but we haven’t been given the opportunity to do that for the past two years. I gave them a dollar and they never asked for two, or a dollar ten. They won’t talk to us. They want a new paradigm that doesn’t include union fire fighters.”
In a letter to fire district residents, The Central Coventry Citizens Taskforce for Fire Protection said fire commissioners did negotiate with the union. “Although the New Board tried to gets (sic) costs under control and save it, the level of concessions from the fire fighters union – where the bulk of the costs are – was simply insufficient.”
Gorman said the budget crunch in the Central Coventry Fire District began with a clerical error on a commercial tax bill. The error happened in 2010 and wasn’t remedied until an audit discovered one commercial property was not being billed, Gorman said. By then it had ballooned into $2.4 million deficit.
Rep. Patricia Morgan, a West Warwick Republican who represents a slice of Coventry, and anti-union activist Chuck Newton are leading a campaign to close the fire district. Gorman said the clerical error has been misrepresented as overspending. He said Morgan and Newton “hand-picked” anti-union residents to run for the fire district board and it is now “controlled” by the small government group that authored the above letter.
Newton, an East Greenwich resident, was instrumental in closing the fire district in that town. He was employed at the State House by the House GOP caucus but was fired for making a fake Facebook page about Rep. Scott Guthrie, who is a former North Kingstown fire fighter.
Gorman said both Newton and Morgan, neither of whom live in Coventry, are more concerned with busting the union than fixing the fire district. “It’s really shameful what they have done to this community,” he said.
There’s a bit of low-wage worker uprising happening here in Rhode Island.
Hilton Providence employees are holding an action to support their coworkers who were they say were fired for speaking out about the need for a labor union. A tweet from Unite Here 217 organizer Andrew Tillet-Saks called it a “Funeral for US Constitution to protest mass firings.” On Monday, Steve Ahlquist interviewed Adrienne Jones, who said she was fired from the Hilton Providence for speaking out. On Tuesday it was learned two employees were fired for speaking out about the work conditions at the downtown Providence hotel and seven others were disciplined.
And on Tuesday, the Rhode Island fight for $15 an hour for fast food workers moves from a Wendy’s in Warwick to a McDonald’s in Providence, where activists (I’m not sure about workers yet) will protest in solidarity with the McDonalds workers in California, Michaigan and New York are suing the corporation saying they were “illegally underpaid employees by erasing hours from their timecards, not paying overtime and ordering them to work off the clock.”
This from Rhode Island Jobs With Justice:
Fast-food workers have been at the forefront for economic justice. They’ve gone on strike, fighting for $15 and the right to form a union, fueling a national debate on income inequality and creating momentum to raise wages.
But in addition to not paying a decent wage, fast-food companies are making it even harder for their workers to afford even the basic necessities by stealing their wages. That’s why fast-food workers are making their voices heard again.
Join fast food workers from RI and community allies on TUESDAY, MARCH 18th, at 12:30, at the McDonald’s at 343 Broad St. in Providence, as we stand in solidarity with workers across the country who filed a national law-suit against wage theft at McDonald’s!
Adrienne Jones says she was fired from her job at the Providence Hilton for supporting the effort of her colleagues to form a union.
She’s a lifelong Providence native and a graduate of Hope High School, CCRI and the Boston Bartending School. A divorced mom with a seven year old son, she has that easy gift of conversation and storytelling all the best bartenders have.
“I used to be anti-union,” says Jones, “I was a business student at CCRI, and in those classes we were taught that unions might have been necessary in the past, but that today modern labor laws provided more than enough protection for workers. My eyes have been opened. Now I’m fully committed to unions and fighting for worker’s rights.”
Jones has worked as a bartender for The Procaccianti Group (TPG) for the last 6 years. From March 2008 to October 2013 she worked at the Wyndham Garden in India Point, then moved to the Hilton Downtown.
“When I made the move over to the Hilton,” says Jones, “I was hoping to work 30-35 hours a week and be able to support myself more comfortably than I was at the Wyndham where I was only working about 20 hours a week. I was looking forward to making a vertical move and ending my dependence on state subsidized programs to help support my son and myself.”
Shortly after I making her move, Jones became aware of what she called “abhorrent” working conditions at the Hilton.
“I was made to work 15+ hour days without a break, over 50 hours a week,” she said. “Managers refuse to put shock absorbent mats behind the bar to make the long hours on our feet a little easier. Management would leave early on nights when we were unbelievably busy and we needed them most. I could go on just about the problems that happened in the restaurant alone…”
In her many years of working in the service industry, Jones has never witnessed a turnover rate as high as she has seen at the Hilton. High turnover is usually related to employee dissatisfaction, poor pay, unsafe or unhealthy working conditions, lack of promotion and career opportunities or conflict with management, among other reasons.
Jones is not alone in her feeling that employment conditions at the hotel were unfair and even illegal. “Recently, a housekeeper, who is pregnant with twins, brought in a note from a doctor asking her bosses to put her on light duty. She expressed to her manager that she wanted to work until the end of her pregnancy so she could take her vacation time when the babies were born. However, management completely ignored her request and gave her even more rooms to clean per day.”
To the workers at the Hilton, this seemed like retaliation, and worse. “After all,” adds Jones, “if she quits before the babies are born, the hotel won’t have to pay for her time off, right?”
With complaints piling up about the unfair and abusive employment practices, the employees started to talk seriously about unionizing, to protect themselves and improve their working conditions. Jones found herself on the organizing committee for the union campaign currently going on at the Hilton.
“I have recruited several of my colleagues to sign the union’s petition and have attended committee meetings at the union office. On February 18, the union “blitzed” the hotel management by trying to present the petition, which 70% of Hilton employees signed, making the campaign public.”
Doug Koenig, the Hilton’s General Manager, refused to accept the petition, instead calling on the Providence Police Department and private security to bar union representatives from the hotel. Jones was unable to participate in that action because she was inside the hotel, working at the bar. The bar was extremely busy that night because there was a Providence College basketball game going on at the Dunkin’ Donuts Center next door. Event though she was not part of the union action that night, “It was obvious [to the hotel management] that I was a supporter,” says Jones.
Working part time at the Wyndham meant that Jones did not qualify to receive benefits. After three months working full time at the Hilton, however, she became entitled to benefits starting March 1st. “Three weeks paid vacation, health/dental/vision coverage and enrollment in their 401K,” says Jones wistfully, “benefits I have earned.”
Jones was terminated by the Hilton on February 26th, three days before her benefits kicked in. She thinks it was for supporting the union. They accused her of being late for a staff meeting which was scheduled on her day off.
“There had never been any issues with me in the past and this was the first time I had been in any kind of trouble at the Hilton,” she said. “It’s clear to everyone I worked with that I was terminated for being a Union supporter. I am the third person to have lost their job since then for supporting the Union.”
Despite laws that make it illegal for employers to fire workers seeking to form a union, John Schmitt and Ben Zipperer, in a paper for the Center for Economic and Policy Research, estimate that almost one in seven union organizers or activists can expect to be fired as a result of their activities.
Jones has filed for unemployment and is waiting to hear back from the Department of Labor and Training regarding that. If she is denied, she will have to go through an appeal process before being eligible. In the meantime, she is searching for a new job and she and her son are getting by on her savings.
“I was born and raised in Providence. This is my home,” says Jones, “I want to be proud of being a Providence native, but I have been penalized for exercising my freedom of speech. I have filed a case with the National Labor Relations Board (NLRB) and with the attorney for the Local 217. I am hoping to get my job back, be compensated for lost wages and receive the benefits I worked so hard for the past 6 years.”
Wage inequality has been growing astronomically over the past 30 years. This is a fact. Anyone claiming otherwise is either ignorant or lying or both.
Can you tell I’m getting tired of having to “prove” stuff that is so obviously factual? Well, in case you couldn’t, I am tired of it.
In fact, even the winners in this zero-sum game have tacitly begun to admit that wage inequality is growing. For the last couple of years, the main counter-argument put out by the lackies of the very wealthy has become that, yes, inequality is growing, but it doesn’t matter.
That’s a lie, too.
Growing wage inequality was one of the primary causes of the collapse of 2007/8. It remains a primary cause of the ongoing Great Recession. Since the vast majority of wage earners were finding their salaries stagnant, if not shrinking, these same people had to rely on credit to finance many of their purchases in the so-called “Bush Boom” of the naughts. I say “so called” because, for the first time since the end of WWII, the median salary at the end of the “boom” did not reach the median salary at the end of the previous boom. That is, median salary in 2007 was lower than it was in 2000/01, before the mild recession that occurred at the end of the 1990s. This is stark proof that wages, for the vast majority of people who actually work for a living (as opposed to living off dividend income, or carried-interest) was not growing despite what Republicans were touting as a “booming economy”.
And spare me the morality play about the evils of credit, about how it shows a lack of moral fibre, how it demonstrates that people are too lazy, or too insistent upon immediate gratification, that they can’t wait and save to make purchases, blah, blah, blah.
Here’s a secret: Had people done this in the naughts, there wouldn’t have been enough demand to create even the wimp “Bush Boom”. The US would have remained mired in the recession that started in 2000 throughout Bush’s first term. I can say this with complete confidence because the only thing that fueled the expansion of the economy—such as it was—was that people were buying stuff on credit. This created the demand that created the expansion.
And demand is the key component. Corporations are swimming in money. They have so much money they can’t figure out where or how to spend it. More, they can borrow billions and billions of dollars at de facto negative interest rates. And yet, corporations are not spending money. If “supply-side” economics had any validity, businesses would be spending money like drunken sailors right now, and they would have been doing so for the past five years, ever since we hit the point of negative interest rates. Why haven’t they spent money? No, the answer is not the uncertainty of possible tax or regulatory changes. That is an absolute crock. If you actually read the business press (as opposed to listening to FOX News) you will realize that businesses are reluctant to spend because they do not believe there is sufficient demand for more products.
Demand. There you have it. The engine that truly drives economic expansion. My grandfather had a succinct way of describing conditions during the Great Depression: “Sure, a loaf of bread only cost a nickel. But what the hell, you didn’t have a nickel.”
In case anyone doesn’t get the point: it doesn’t matter how cheap things are because of a large supply. If people still don’t have the cash to buy stuff, it doesn’t get bought. IOW, there is no demand.
Demand.
And that is what is holding up recovery as the Great Recession enters its fifth—or is it sixth?—year. Got that, people? Sixth year. Lehman Brothers collapsed in 2008, while G. W. Bush was still president. Before Obama had been elected, let alone before he had taken office. Got that? George Bush was president. Hank Paulson, former head of Goldman Sachs was Secretary of the Treasury. Not Obama, not Geithner (although he was President of the NY Fed at the time).
Inequality matters, people. It matters a lot. It keeps demand down. When demand is down, people lose jobs. When people lose jobs, demand drops further, and more people lose jobs. This is called a death spiral. It’s essentially the same phenomenon, but going in the opposite direction, of what caused the inflation of the 1970s. And no, cutting wages DOES NOT HELP. Cutting wages is the equivalent of throwing people out of work. Yes, perhaps fewer people will lose their jobs outright, but demand will still decrease. It may—or may not—take a little longer, but the same result is attained.
So the answer is that people need to make more money. But what is happening instead is that the wages of most people are being cut. It’s the time of the year when a lot of companies are doing compensation planning. For many big companies, this is now a very simple process. A few people, maybe ten percent of the corporation’s employees, will get nice raises, maybe 5%, probably more. The rest will get nothing.
That is, the rest of the employees will get a pay cut. Their pay will remain the same, but even 1-%-2% inflation will erode stagnant pay. The result is a de facto pay cut. The result is a further decrease in demand. Funny: Republicans scream about how tax increases will hurt the economy because they will take money out of people’s pockets. But a pay cut does exactly the same thing, and yet Republicans fall all over themselves to demand—DEMAND—pay cuts.
It’s enough to make you suspect that Republicans don’t care about the economy at all. All they care about is tax cuts. All they care about is making the wealthy even wealthier. Even if it means the rest of us slowly slip into poverty.
This is because their wealthy corporate masters want tax cuts. So Republicans bow and scrape and say “Yes, Master” and move heaven and earth to give their masters what they want.
The rest of us can pound sand.
In my last post, I talked about Clarence Thomas and his truly remarkable rise to a position that his father could never, ever have achieved. Indeed, even a slightly older Mr. Thomas would probably not been able to attain such a truly lofty height.
This all sort of gets to the idea of social mobility. If someone were born into conditions like those into which Mr. Thomas was born, how likely is it for that person to improve his level of economic security? Or, how likely is it for someone born into the upper echelons, such as Mr. Thomas’ children (does he have any?) to fall out of the exalted perch onto which she was born?
America has long perpetuated the ideal that everyone can improve their status. This is still true. It is still possible. But how likely is it? Or, how probable is it? And here, I use ‘probable’ in the technical sense of “Probability and Statistics”, the name of a book on my shelf. “Possible” and “Probable” are two very different words, with enormously different implications. The right wing continues to flog the notion of possibility. Sure, it’s possible. It’s possible that I can throw a ball through a solid wall, too. Or that all the air molecules in a room will suddenly rush into one corner and leave the rest of the room airless. But are these events likely to happen? No. According to the technical definition, that means, that they have an extremely low probability of occurring. Could a high school basketball team beat the Celtics? I suppose it’s possible. But the probability of this occurring is darn close to zero. It may not be exactly zero, but it’s probably (!) close enough to be considered zero in any real-world scenario.
Let’s set this up. Suppose you have been put into a situation in which you must choose one of two balls. One is yellow; the other is green. If you choose the correct ball, you will be given $100 million. If you choose the wrong one, you will have to spend the rest of your days working at a minimum wage job. Of course, you don’t know which ball gives the desired outcome, so you have to guess. And hope. And, as any fool knows, you have a 50/50 chance of getting it right. And an equal chance of getting it wrong. In other words, it’s a coin flip.
But let’s say we change the scenario, and introduce a blue ball. But even given the extra ball, there is still only one ‘correct’ choice. One ball will get you the $100M; either of the other two will get you consigned to the minimum wage. What has happened to your chance of success? It has been diminished. It has gone from 1 in 2, to 1 in 3. That is, rather than a 50% likelihood of success, you have a 33% chance.
For the next iteration, we’re back to two colors, red and green. The red ball gets you the $100M; the green results in the minimum wage job. But you have to pick either of the two balls out of a basket in absolute darkness, so you can’t see which ball is which. We’re back to 50/50. But let’s start adding green balls. If we add two more green balls, for a total of three green, one red, your chance of success has been cut in half. It’s now 1 in 4, or a 25% chance of success. Starting to look grim, isn’t it? Now let’s bring the total of green balls up to ten. This is a 1 in 11 chance, and suddenly your chances of success drop below 10%.
This is what tax cuts, cutbacks in social spending, cuts in education have been doing: they have been adding green balls into the system. At least, they’ve been adding green balls into the basket from which those on the lower end of the scale have to choose. At the same time, these policy choices—tax cuts, cuts in social spending, cuts to education—have been adding red balls into the basket from which those born into the upper echelon get to choose. In other words, we’ve been increasing the odds against success for those in the bottom half, while increasing them for those at the top. Put another way, we’ve been rigging the game in favor of those at the top. How would you feel about entering the game with the odds of success sitting at 11 to 1 against you? Would you want to take a chance on winning the $100M if there were a 9o% chance of being consigned to the ranks of minimum wage workers? Kinda stinks, doesn’t it?
This is what I meant in my previous post about my good fortune. I got to pick from a basket that was probably 75% red (good) balls. Yes, I could have failed, made a lot of bad choices, and ended up dropping. But the game was rigged in my favor from the start. Yes, I had to work for what I got, but that does not change the fact that I had an enormous head start over a lot of people.
And that, I think, is the clearest difference between a liberal and a conservative. A liberal recognizes—or never forgets—where she or he started. A liberal is aware that there were, there are always extenuating circumstances. Had Clarence Thomas worked twice as hard, but lived in the wrong place or time, all his effort may have been in vain. A conservative, from what I see, becomes convinced that they made it solely on their own merits. They fail to contextualize their success. They remember the work they put in to getting where they are, and nothing else. Yes, this is not the whole story of the differences between the two, but I think that it may be the single key difference. Clarence Thomas, or Rush Limbaugh, or—the golden example—George W Bush are all convinced that they did it on their own. No one helped them. They don’t think that the stable family environment, or the genes or temperament that put the grit into their belly to succeed was an advantage that, perhaps, other people don’t have. They don’t see that being in a semi-decent school with semi-decent parents who instill values gives them a big leg up on a lot of other people. They forget that they happened to be born at a good time, or a good place.
So conservatives don’t see why other people might need help. Perhaps growing up they did not have the advantage of government assistance (but they did; they just fail to recognize this, or to acknowledge this), so why should other people get this help? So we continue with the aforementioned policy choices—tax cuts, cuts in social spending, cuts to education— and what we’re doing is increasing the number of people who have to choose from the basket of mostly green (bad) balls. Each cut to Head Start, or SNAP, or job training, or education, we’re both adding to the number of green balls and increasing the number of people choosing from this basket. In other words, we’re stacking the deck against them. Such behavior would get you shot in a lot of gambling establishments. Ask Wild Bill Hickok.
If you don’t believe me, here’s some evidence.
Take a look at the chart on page 10 of the report at the link. For someone born into the bottom income quintile, there is more than a 33% chance that they will end up there. For someone born into the top quintile, the odds are over 37% in favor of them remaining. But it’s worse than that. There is a cumulative probability of 60 percent that someone born in the bottom quintile will stay in one of the bottom two quintiles. That is, they will never be above what the lowest 40% of the country makes. That is, they only have a 40% chance of making it to middle class.
BUT: for each percentage point you move up in the scale, your chances of remaining in the top levels goes up. That is, someone born in the 95th percentile, their chances of staying there are about 75%.
As for where the most people make it, or remain stuck where they are, check out the second link.
http://www.equality-of-opportunity.org/
What you find is that the places with single-digit movement from the bottom to the top are largely in the South. You know, the area of the country where low taxes, low union density and small-but-business-friendly government is attracting lots of Good Jobs. Just gobs and oodles of them! Charlotte, North Carolina is a great example of how this works. Remember, MetLife was planning to move several hundred jobs from RI, and a thousand (or more) from the Northeast to Charlotte, that land of opportunity. See! Charlotte attracts Good Jobs! But, per the second link, of the top 50 metropolitan areas in the US, Charlotte is #49 in inter-generational upward mobility. There, only 4% of those born in the bottom quintile can be reasonably expected to reach the top quintile. And note, that means the 81st percentile. Admission to this is a salary of about $78k per year. We’re not talking about top-flight surgeons, or anything such. We’re talking a solid job, something around what a teacher with ten years experience makes here. So the chance of someone being born into the bottom quintile of ending up with a job with a teacher’s salary is less than 5%, or 1 chance in 20. How would you like to pick from that basket?
As for the idea of talent, well, it ain’t what it used to be. An average student born into a family in the top quintile is several times more likely to graduate college than a bright student born into the bottom three quintiles. What this means is that the uninspired student from wealth is picking from a basket with lots of red (good) balls in it. And even if someone from the bottom 40% does beat the odds and finish college, that’s not the guarantee of success it once was. Average wages for college grads have been falling over the past 10 years, so I don’t want any nonsense about how all people have to do is pull themselves up by their bootstraps and work their way through college, blah, blah, blah.
Is this the kind of country we want? Where most people are pretty much destined to fail?
Here’s the full press release from the SEIU on its successful effort to organize the 500 independently-employed, state subsidized child care providers in Rhode Island. Voting ended yesterday and workers approved the unionization effort 390 to 19.
Today the RI State Labor Relations Board (SLRB) counted the votes of more than 400 Rhode Island family child care providers who participate in the state’s child care assistance program (CCAP) on the question of whether or not to form a union. The results were clear: by a count of 390 to 19, CCAP providers overwhelmingly chose to unite together in District 1199 SEIU New England.
Turnout in the election was nearly 76% percent, as 409 of 539 eligible providers cast their ballots at six different times and locations around the Rhode Island during the last week of October.
“Family child care providers can now work together through our union to advocate for improvements in our profession, just like our colleagues in Massachusetts, Connecticut, and many other states,” said Nuris Ynoa, a provider in Providence for 14 years. “Children in our communities will benefit from improved early learning opportunities as we work to expand professional development and training for our field.”
Child care is a necessity for Rhode Island families; 70% of RI children under the age of six have working parents and are in child care.
There is broad consensus that early learning opportunities have a profound impact on children’s development and promote overall economic growth. A 2003 study sponsored by the Greater Providence Chamber of Commerce found that “the child care sector created 9626 jobs across all sectors in Rhode Island” and that for every $1.00 spent on child care, $1.75 was returned to the Rhode Island economy.
However, state investments in early learning have decreased dramatically as the state’s economy faltered – reducing the number of qualifying children by nearly half, from over 14,000 children in 2003 to 7,849 children in December 2012. The number of family child care providers was also cut in half, leaving parents returning to work with fewer options for flexible, quality child care.
Marcia Coné, CEO of Women’s Fund of Rhode Island said, “For too long the state’s home family child care provider sector has been plagued by economic instability which has forced hundreds of dedicated providers out of business. By voting to form a union these women owned small business now have a formal voice to advocate for policies that will strengthen early childhood learning in Rhode Island.”
Providers’ decision to form a union will help to strengthen early childhood education by improving their access to training and professional development, as well as helping to stabilize their field by improving working conditions and reducing turnover.
“For too long, the work of caring for and educating young children has suffered from low wages and high turnover,” said Lori Parris, a family child care provider from Pawtucket. “Research shows how important stable relationships are to children’s development, and by improving standards in our field, we can ensure that all children get the best possible start in life.”
Rhode Island family child care providers are joining a growing national movement of front-line early educators who are uniting to raise up their profession and ensure that all young children have access to high-quality early learning.
For more information, visit www.childcareRI.org.
The working class stands up to management tonight in Providence as two groups of employees – one unionized, the other not yet – will protest outside their places of employment.
Hospital employees and SEIU members will be calling attention to job cuts at Women and Infants today at 4:15. “Despite budget surpluses, senior managers Care New England are attempting to cut corners and compromise patient safety by laying off housekeeping, lab, and clinical staff,” said Patrick Quinn of the SEIU.
“Management’s plan to cut staff will mean hospital rooms are cleaned less frequently and increase the risk of infections which compromises patient safety,” said Sukie Ream a labor delivery room nurse. “Layoffs to clinical and lab staff could delay delivery of lab results which is not fair to patients.”
And in downtown Providence, Renaissance Hotel workers will march there at 5 pm to call attention to the federal health and safety violations the hotel was recently fined $8,000 for According to a press release, “The Occupational Safety and Health Administration (OSHA) recently cited the Renaissance for serious violations, finding, amongst other violations, that “’employees’ hands, arms and faces were routinely exposed to corrosive and irritating chemicals.’”
Hotel housekeeper Santo Brito said, “Management has claimed that there is no safety problem, but the Federal investigation showed differently. Hotel management allowed these dangerous conditions to exist because workers have no voice at the Hotel. I am proud the workers stood up to stop this. The hazardous use of chemicals in the hotel caused us workers all kinds of physical suffering, from bad rashes all over our arms to frequent sickness.”
The picture to the right is called “Christmas dinner in home of Earl Pauley near Smithfield, Iowa…” This is Christmas for a farm family in Iowa in 1936. This is the world that conservatives call the ‘good old days’.
This is the sort of country conservatives believe we should have. Again.*
This was the age before Social Security, before Medicare, before welfare, before government regulation. This is a farm family. They worked hard–so hard that you and I probably cannot begin to conceive of how hard they worked. I’ve done farmwork, but it was mechanized, and it was still damn hard. So this family worked hard. There was no unemployment insurance. These were not urban welfare queens. They had not made bad choices, unless trying to run a farm should be considered a bad choice. They were not coasting, using the safety net as a hammock, because there was no safety net.
I assume the family in the picture is living on its farm. A lot of families lost their homes in the period 1929-1936 because they couldn’t pay the mortgage. Farmers in particular lost their land because their crops died in the field–if they grew in the first place–because of a stretch of drought that lasted several years, and that led to the Dust Bowl. My grandmother lived through the Dust Bowl in Kansas. Her stories were horrific.
You need to look at this and remember that this is the world that conservative politicians want to bring back. They want to kill all the social programs that were created as a result of the Great Depression. Conservatives want people who lose their jobs, through no fault of their own, to be pushed down to the sort of life that you see in this picture. They want people without work to fall into the sort of poverty that you see here. They may not realize what would happen if we follow their policies and gut social programs and all assistance to anyone but the wealthy. They may not realize what the implications of their policies will be, but the picture gives you a graphic example of the world that conservatives want to re-create.
Oh no! they proclaim. Getting rid of all this government will release the job creators, and they will create jobs! For everyone!
Bull.
The job creators at the time of this photo were fully unleashed. They were barely regulated. They were lightly taxed. And yet the people in this picture were living the way you see. Dirt floor. Bare plank walls. Where was the magic of the market? It didn’t solve the problems then. It didn’t help the people you see here. Rather, the people you see got to the condition you see because of the lack of regulation, and the lack of government support, and the low tax burden on those at the top of the economic pyramid.
The unfettered might of the market did nothing to help the people you see here. In fact, those with money shrieked that these people had to be left on their own, to starve if necessary. Any attempt to interfere would destroy prosperity. In fact, any interference by the government was immoral. But even a casual glance at this picture will tell you that any prosperity this family had ever known had been destroyed some time ago, and all because of the magic of the market. The only thing immoral was the sanctimonious attitudes of the upper echelons who let families live like you see in the picture.
If you read Friedman’s Monetary History of the United States, you will see that he talks about a seemingly endless series of economic crises, starting in the 1870s and carrying through to the Great Depression. That’s a period of 50-60 years, and there were three acute recessions and at least one depression (depending on how you define the downturn that began in 1873), and the last depression was so bad we call it Great. This averages to almost one crisis every fourteen years; the ‘teens of the Twentieth Century were marked by the Great War, so it’s difficult to compare this to ordinary periods.
One crisis per generation.
This is what the magic of the market created. A downturn every 14 years on average. Just about every generation was hit by a very nasty downturn, all in a period when there was no one to help. Private charity? Private charity is only viable during a period of economic expansion; when unemployment is above 10%, there simply aren’t enough people with enough money to make private charity effective. That’s why you have a family going through an experience like the one in the picture. Because people of the time relied on private charity.
And these were crises without unemployment assistance, food stamps, housing subsidies, with no government assistance whatsoever. People caught without work for six months or a year or three years had nothing to rely on, but they still couldn’t get jobs. Talk to people who lived through the Depression, quickly, while they’re still alive. They will all tell you, there was no work to be had.
And, btw, Friedman’s thesis that the Great Depression could have been avoided has been shot full of holes by our current situation. Friedman claimed that the Fed could have solved the problem through looser monetary policy. Since 2008/9, the Fed has been doing just that, pumping huge amounts of money into the economy in any way possible. And the same conservatives who howled about FDR have been howling about Bernanke. Has the policy worked? Well, we didn’t have a depression, at least not one like our grandparents lived through, but ask a recent college grad how easy it is to find a job. Look at the unemployment rate. So Friedman was a quarter-right at best. Monetary policy alone cannot solve the economic problems we faced in the early 1930s, nor the problems that we are experiencing in the early 2010s
Nor can the magic of the market create prosperity for all, except for relatively short periods. If capitalism produced a crisis every 14 years, that means if you were fortunate enough to graduate into an economic expansion, you should expect a downturn by the time you hit 40. Then maybe you’ll benefit from the upturn by the time you hit 50. Of course, by then you will have lost five or ten of your prime wage-earning years. So how are you supposed to save for retirement?
So look really hard at this picture. Think of it the next time you hear someone claim that we need to unshackle the job creators. Think of it and remember that the Titans of Industry screwed it up in the 1920s, and the 1900s, and the 1890s, and the 1870s…that’s a lousy track record. The Titans of Industry created the world you see in the picture.
*This is an incredibly harsh statement. I do not ascribe malign motives to sincere conservatives. I am not saying conservatives are evil people who wish misery on others. However, ideas have consequences; we have a moral obligation to understand the ramifications of our policies and of what we advocate for society. In this, I believe, the conservatives fail. Perhaps this is because they do not understand history; but a point is reached where there must be willful ignorance of what they advocate. History is so very, very clear, if you realize that there was history before WWII, or even before 1970. I keep coming back to this, but it continues to be true: we tried it their way. It did not work. Most of human history has been a long, dreary experiment in laissez-faire markets. The outcomes were horrible; look at this picture.
And if free markets or government regulation or interference or high taxes didn’t cause the situation in this picture, what did? They have no real answer for that question.
So yes, I realize I am making a terribly provocative statement; but the point stands. If we follow their advice, this is where we will end up. Again.
The biggest debate of the budget process turned out not to be about a moral obligation to Wall Street but rather a moral obligation to Rhode Island retirees.
While the local media (this site included) focused on the debate concerning a $2.5 million payment to 38 Studios bondholders, the bigger debate during last night’s marathon budget session concerned a $12.9 million payment to the state pension program.
Defecting from House leadership, a wide spectrum of Democrats and Republicans struck down a proposal that would have eliminated an extra payment to the pension system negotiated into the landmark pension reform process of 2011.
“I feel like we are going back on our word and that’s not how I like to operate,” said Rep. Jared Nunes.
For those of you who don’t understand the concept of a moral obligation outside of the bond market, this pretty well sums it up in layman’s terms! Many lawmakers, however, put the pension payment in the exact parlance of a moral obligation (a meta-concept RI Future has dedicated many pixels to championing).
“If 38 studios is a moral obligation, what is this?” said progressive Rep. Larry Valencia, of Richmond, according to the Providence Journal. “I contend this $12.9 million is a moral obligation as well.”
While I don’t like this specific law (I wrote about it last week here) for the same reasons I don’t like the law that guarantees bondholders get paid before pensioners – it sets up a tiered system of budget priorities – I do also understand it as a moral obligation.
“We hurt people’s pensions,” said Joe Trillo, a Republican who supported pension cuts in 20111 and paying the $12.9 million this year. To then go back and nix a silver lining would add insult to injury.
Much more than I take umbrage with the law, I love the debate it has inspired as the 2013 legislative session winds down. The idea that the state has a moral obligation to retirees was unmistakably the theme of the debate last night and RI Future has been publishing posts about this for months now.
This is not only as big victory for the labor movement, but also for the wider progressive movement: a moral obligation has morphed from being a strictly financial concept to being a political and philosophical concept in our marketplace of ideas. In the financial markets, a moral obligation literally means you don’t have to do it, but it may cost you money in the long run. In real life a moral obligation is something you do whether it’s in your own self interest or not.
This gives me hope that our elected leaders will start actually governing instead of simply trying to cut down a spending plan artificially capped by conservative thinking. We have no moral obligation to austerity – though it may or may not be good for our economy; so far it hasn’t shown benefits. We do however have a moral obligation to fully fund our promises.
That didn’t happen last night, though. House leadership, specifically conservative Democrat Nick Mattiello, conceded the goal was a noble one, but said proponents had failed to identify a way to fund it.
“The $12.9 would have to come out of something,” WPRI quoted Mattiello as saying.
This, of course, isn’t true because it assumes the only way to fund government is to cut something else in government (a false choice the many have fallen for during the era of austerity)
Rep. Valencia reminded Mattiello, leadership, the House and those of us watching at home, that in fact both he and Rep. Cimini had income tax increase bills vetted that would raise enough revenue and more.
“A quarter of a Cimini,” would suffice, Valencia said, or a one-fourth of the 2 percent income tax increase the progressive Rep. from Providence proposed on those who make more than a quarter million dollars annually.
The budget debate was put on hold early this morning and continues later today. Whether or not a “quarter of a Cimini” is in play as legislators continue to debate the tax and spend plan will depend on just what kind of moral obligation our elected officials feel they have to the totality of their previous promises.
I know I feel we have a higher moral obligation to keep our word on pension reform than we do to keep in place a tax cut given to the richest Rhode Islanders.
The Economic Policy Institute has release a short issue brief on the Rhode Island Retirement Security Act (RIRSA) by Robert Hiltonsmith that manages to get all of the details right but the big picture entirely wrong.
The EPI Issue Brief details the differences between the retirement system for state workers before and after the passage of RIRSA as accurately and clearly as I have ever seen. Mr. Hiltonsmith has done a notable job explaining the differences between the new system and the old system.
The brief, unfortunately, fails by engaging in two common fallacies to support its broader conclusions. The first is the straw man fallacy. Mr. Hiltonsmith takes a limited set of the objectives of the entire RIRSA legislation and says defined contribution plans do not meet those objectives. That is true, but ignores the other objectives it does accomplish which were also part of the motivation behind RIRSA. The second is circular reasoning. In this case, Mr. Hiltonsmith states that the reason for a low funding ratio is because the state did not put 100% of its paper liability into the pension fund. This is a tautology and not in dispute and should not be trumpeted as a conclusion of analysis.
Here are his three main points that he believes makes RIRSA a bad policy:
Of course, the defined contribution portion of RIRSA was not in place to do any of these three things. The purpose of including a defined contribution plan in the new state pension system is to create stability in annual budget allocations and avoid locking the government into promises it has demonstrated it fails to keep. Defined benefit plans require the state to change pension contributions when there are market fluctuations and leads to anti-cyclical costs, where the state is forced to put substantially more resources into pensions when revenues are lowest and spending on social welfare is most important. The defined contribution plan keeps the payments required by the state consistent and highly predictable. This is far preferable from a budget perspective.
It is unfortunate that there are lower returns to defined contribution plans which may lead to a decrease in overall benefits. It is my opinion that the unions in Rhode Island should be pushing for a substantially better match on the defined contribution portion of their plan that more closely resembles private sector match rates. This could more than alleviate the difference in benefits while maintaining the predictability, for budgeting purposes, of the defined contribution plan. I doubt this policy would have much hope of passing while Rhode Island slowly crawls out of a deep recession, but it is certainly a reasonable matter for future legislatures.
There are only two ways to decrease the current pension fund shortfalls: increase payments to the fund or decrease benefits. There is no structural magic sauce to get around this. Structural changes in the pension system are aimed at reducing the likelihood that the state will reproduce its current situation, with liabilities well outstripping funds. It is true that the “savings” largely came from cutting benefits. I have not heard anyone claim otherwise. The only alternative was to put a big lump sum into the pension fund. That clearly was not a part of RIRSA.
It is absurd to judge RIRSA on the ability of defined contribution plans to achieve policy objectives that are unrelated to the purpose of this structural change.
Perhaps the most troubling conclusion of this brief was that,
The shortfall in Rhode Island’s pension plan for public employees is largely due not to overly generous benefits, but to the failure of state and local government employers to pay their required share of pensions’ cost.
I read that and expected to see evidence of skipped payments or a discussion of overly ambitious expectations for investment returns, etc. Instead, it seems that this conclusion is based simply on the fact that the benefits in Rhode Island were not deemed outrageously large, and therefore Rhode Island should just pay the liability hole. The “failure” here is predicated entirely on the idea that the pensions as offered should be met, period, whatever the cost to the government. This is the “required share”. Which, of course, is technically true without a change in the law, but feels disingenuous. It is essentially a wholesale agreement with the union interpretation of the state pension system as an immutable contract. The courts will likely resolve whether or not this is true. My objection is that Mr. Hiltonsmith makes a definitive statement on this rationale without describing it. In such a lucid description of how the retirement system has changed, it seems this could only be intentional omission intended to support a predetermined conclusion rather than illuminate the unconvinced.
Mr. Hiltonsmith also claims that, “Over the long term, RIRSA may cost the state upwards of $15 million a year in additional contributions while providing a smaller benefit for the average full-career worker.” I am not 100% certain, but based on his use of the normal cost 1 to do these calculations, it appears this conclusion is drawn only based on the marginal contributions to current employees. In other words, if we completely ignore the existing liability, the new plan cost the state more money marginally while potentially decreasing benefits for employees. It is my opinion that Mr. Hiltonsmith is intentionally creating the perception that RIRSA costs more than the current plan while providing fewer benefits. Again, this is true for future liabilities, but ignores that RIRSA also dramatically decreased the unfunded liabilities through cutting existing retiree benefits. So the overall cost for the act is far less, while the marginal cost was increased with the objective of decreasing the instability in government appropriations.
We can have a serious debate about whether there is value in the state goals of a defined contribution plan. In my view, the purpose of switching to this structure is about:
This paper does not address any of these objectives or others I might have forgotten. In essence, the brief looks at only one subset of the perceived costs of this structural change, but it is far from a comprehensive analysis of the potential universe of both costs and benefits. In fact, it fails to even address the most commonly cited benefits. That is why I view it as heavily biased and flawed, even if I might draw similar conclusions from a more thorough analysis.
Not only do Rhode Island lawmakers often embed policy proposals into the state budget, they also sometimes embed budget proposals into other areas of state law. The Ocean State is infamous for having the only law that in the nation that guarantees Wall Street gets paid before retirees, but we also have a law that places payments to retirees’ above other communal concerns.
Here’s what the Providence Journal reported Wednesday about a little-discussed law:
Union officials lobbied from the sidelines for the state to make good on a promise made after the state’s 2011 dramatic pension overhaul froze cost-of-living increases to Rhode Island’s retired public workers until the fund is in better financial shape.
The law required that any state money that comes in — over and above the state’s official revenue estimate — go into the state pension fund. This year that would have totaled $12.9 million. But Chafee sought to eliminate this provision, and carry the money forward into next year’s budget.
To the dismay of the unions, the lawmakers agreed, prompting this response from J. Michael Downey, president of Council 94, American Federation of State County and Municipal Employees: “Shortchanging employees’ pensions, while taking care of Wall Street bondholders and restoring tax credits, is immoral.”
I would agree with Downey’s moral compass on this one. It is immoral to shortchange middle class retirees and not companies. Similarly, I feel it is immoral to shortchange the homeless and struggling cities and towns while taking care of middle class retirees.
Whether either scenario is financially advantageous to the citizenry is another matter altogether. I would argue deciding whom to take care of and whom to shortchange based on such rationale is what makes it immoral. Not that we don’t have to make immoral decisions sometimes, we should just recognize it isn’t necessarily benevolent. In other words, we have no moral obligation to be prosperous, but we do have a moral obligation to do the greatest good for the greatest amount of people. Intentionally obfuscating these two often competing values is very immoral, by the way.
To my way of thinking, Rhode Island’s economy would be better served if we ended homelessness than if we fully funded our pension system. I also think we have a higher moral obligation to end homelessness than to fully fund pensions. Similarly, it may be true that our economy would be better served if we fully funded our pension system than if we fully funded our debt obligations. But I’m certain we have a higher moral obligation to fully fund commitments to people than to credit markets.
Now some may agree with my economic and moral theories, and they may be right to do so. And what makes the most moral and/or economic sense at one time might not be the best decision at another time. That’s why it’s bad policy for state lawmakers to codify outside of the annual budget process a class system of financial obligations.
Public school custodians in North Kingstown didn’t mourn when the school committee outsourced their jobs last year. They organized.
The 27 school janitors voted today to negotiate their pay and benefits collectively as a bargaining unit with the NEARI.
“Privatizing doesn’t mean an end to union rights,” said Pat Crowley, of the NEARI. “Any municipality that thinks privatization is a way to get away from unions is wrong.”
He said the re-unionized custodians will elect a negotiating committee in time to work out a new contract before school starts again in September.
“This is the first time a private, for profit employer has had unionized workers in a school,” Crowley added. “That means they now have a right to strike. Not that we are looking forward to that but it’s a right they didn’t have as public sector employees. It’s definitely a possibility.”
The NK School Committee outsourced the custodian’s jobs to the private sector in August in hopes of saving money. The custodians worked this school year without a contract.
“They want some justice for the injustice that was done to them last year,” Crowley said, though he added t is too early to know if they will want to recoup all the wages and benefits they lost when the school committee outsourced their jobs.
In what I thought was one of the most interesting and honest exchanges of my interview with Deborah Gist, she tells me that teacher morale has been low since she came to Rhode Island four years ago, and that there’s a negativity surrounding local teachers and the state itself.
“Morale was very low when I got here,” she said. “I was so surprised at, just, the dejection, people were really bummed out.”
Gist worked in four different states and the District of Columbia before coming to Rhode Island and said she has never before seen the level of divisiveness between management and labor. She also said the state suffers from a sense of negativity about itself.
So I asked her if she thought local teachers were embattled- a term both RI Future and the Providence Journal have used to describe Gist recently. She said she didn’t know. She also made reference to a vocal minority that actively engages in teacher bashing for the sake of shrinking government.
