Category Archives: Random Blogging

Does “Right to Work” Work?

Recently, the Washington Examiner interviewed Indiana Governor Mike Pence. It ran the subsequent story under a banner headline:  “Indiana’s Right to Work law has sparked economic rebirth for the Midwest.”

I’d never heard of the newspaper, so I consulted Dr. Google, and discovered (surprise!) that it is owned by Denver billionaire Philip Anschutz[4] who also owns the influential conservative opinion magazine The Weekly Standard. In other words, the paper has a very definite point of view.

But…”economic rebirth”? Sparked by Right to Work?

It is almost impossible to find credible research on the effect of Right to Work laws. Most researchers–even those who are not ideological–have difficulty controlling for the multiple factors that affect a state’s economy. The little sound academic research that does exist suggests the real impact of the laws–for good or ill– is not nearly as dramatic as the heated debate might suggest.

For example, Michigan State University researchers Dale Belman, Richard Block and Karen Roberts examined state economies from 1998 through 2000 and concluded in 2009 that right-to-work laws “seem to have no effect on economic activity.”

In fact, they found that unions in general “have little impact, despite conventional wisdom.”

The Economic Policy Institute is a left-leaning, but generally credible and unbiased research resource. In a 2011 study, the Institute compared Right to Work states to those without that law.

  • In 2009, the unemployment rate was 1.0 percentage points lower in RTW states than states without the legislation. In RTW states, it was 8.6%, In other states it was 9.6%.[16]
  • Wages in right-to-work states are 3.2% lower than those in non-RTW states, after controlling for a full complement of individual demographic and socioeconomic variables as well as state macroeconomic indicators. Using the average wage in non-RTW states as the base ($22.11), the average full-time, full-year worker in an RTW state makes about $1,500 less annually than a similar worker in a non-RTW state. The study goes on to say “How much of this difference can be attributed to RTW status itself? There is an inherent “endogeneity” problem in any attempt to answer that question, namely that RTW and non-RTW states differ on a wide variety of measures that are also related to compensation, making it difficult to isolate the impact of RTW status.”[16]
  • The rate of employer-sponsored health insurance (ESI) is 2.6 percentage points lower in RTW states compared with non-RTW states, after controlling for individual, job, and state-level characteristics. If workers in non-RTW states were to receive ESI at this lower rate, 2 million fewer workers nationally would be covered.
  • The rate of employer-sponsored pensions is 4.8 percentage points lower in RTW states, using the full complement of control variables in [the study’s] regression model. If workers in non-RTW states were to receive pensions at this lower rate, 3.8 million fewer workers nationally would have pensions.

You’d never guess any of that from the glowing report in the Washington Examiner.

In our current media environment, however, data and verification–let alone nuance and complexity–are less important than creating a reality that will appeal to the audience being targeted.

Remember the old song lyric, “a good man is hard to find”? Try looking for a good newspaper these days.

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Parity Would Be Nice….

A friend recently sent me some figures that put the rhetoric about the 1% and the 99% into rather stark perspective.

Big business is once again doing well. Among the nation’s top 500 companies, corporate profits in 2013 averaged $41,249 per employee. That was 38 percent higher than the profit level in 2008, so the Great Recession is evidently over–at least, for those enterprises. Those who run the companies are also doing nicely, thank you very much: CEOs at companies listed in the S&P 500 took home paychecks that were 331 times the pay of the average American worker last year — and 774 times the take-home of minimum-wage workers.

If the minimum wage had just kept pace with income gains enjoyed by the top 1% since 1968–that is, if there had simply been parity in the rate of increase–minimum-wage workers would now be making $31.45 per hour.

What was that old economic premise/promise? A rising tide lifts all boats?

Evidently, the tide has been very selective….

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Connecting the Dots

It’s time to say goodby and good riddance to the month of April–the “cruelest” month, presumably because federal taxes are due. And let’s face it, no one likes taxes.

And every year,  the avalanche of anti-tax articles is predictable as April showers.

Over at The New Republic, Jonathan Cohn makes an important point: people resent paying taxes when they don’t see what that money is buying. I’ve made that same argument in the local context, and it is actually easier to see what our local money buys: police and fire protection, garbage collection, parks, schools and the like. Those local public goods are more visible than the goods our federal taxes purchase.

That payroll tax taken out of everybody’s check? It’s buying you Medicare and Social Security, which means a more secure retirement free of crippling medical bills. Your federal income tax? Its effects are a lot more diffuse. But chances are pretty good that you’ve already used some infrastructure today—whether it was a road or railway you took to work, or maybe the information technology connections you’re using to read this article. Federal, state, and local taxes helped pay for that. Is your water and air clean? Are you safe from threats, domestic and foreign? Then you’re getting something valuable from the Environment Protection Agency, the Federal Bureau of Investigation, and the Department of Defense. Your tax dollars paid for those, too.

Sometimes, of course, your tax dollars pay for supports and services you won’t use. And you might resent that. But even taxes that pay for someone else’s benefits can benefit you. Why does the U.S. not have the massive underclass that characterizes many third-world countries—or the incipient danger of violent upheaval that accompanies it? The safety net your taxes purchased, tattered as it is, buys a degree of social harmony, too.

We can legitimately argue about lawmakers’ priorities. We can–and should–monitor government at all levels to insure that its operations are businesslike and efficient. We can debate whether government should do some things at all.

But while we are griping and doing everything we can to reduce our bills, we should take note of Cohn’s admonition, and remember that our tax dollars buy a lot of things that most of us agree–however grudgingly– make our lives safer and better. Things we would miss.

In the private sector, we acknowledge the truth of the old adage: you get what you pay for. Somehow, we ignore that homely truth when it comes to taxes.

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The Bundy Bunch

I haven’t posted about the bizarre episode that Jon Stewart aptly dubbed “Apocalypse Cow,” because–to be candid–I’ve had a huge problem understanding why anyone would rush to the defense of a guy whose claim to fame is that he doesn’t pay his bills.

The facts aren’t really in dispute: when Bureau of Land Management rangers attempted to enforce a court order to confiscate cattle owned by Cliven Bundy, an assortment of militiamen, “patriots” and assorted kooks–all armed–came to his defense. The government, fearing another Waco, temporarily retreated. This bit of adult restraint was celebrated by Bundy’s ragtag army as a great victory.

Bundy has been illegally grazing his herd on public land since 1993. He never paid the very minimal grazing fees initially imposed by President Reagan, and several courts have confirmed that he currently owes taxpayers over a million dollars.

His “defense” is that he doesn’t recognize the existence of the federal government.

What I don’t get is the Right’s wholesale embrace of this “taker.” Fox News–especially Sean Hannity–rushed to defend a guy who proudly admits to ripping off government and the taxpayers. The network that routinely excoriates “welfare cheaters” evidently saw no irony in its defense of  a brazen moocher.

It turns out that rural radicalism is nothing new. In fact, Catherine McNicol Stock wrote a book documenting a long tradition of rural extremism in the U.S.

As Stock noted, the arrest of Timothy McVeigh for the Oklahoma City bombing gave homegrown terrorism a face, and that face turned out to be white-skinned, blue-eyed and clean-shaven. Networks of home-grown, small-town militiamen, conspiracists, survivalists, and white supremacists who had been there all along, suddenly became visible. They are heirs to “a tradition as old as the country itself, characteristically angry and frequently violent, rendering patriotism as intolerance.”

The recurring themes in rural radical movements are familiar:  anti-federalism, white supremacy, populism, and vigilantism.

Cliven Bundy has proved himself an heir to the entirety of that radical tradition, but ironically, when he shared his overtly racist views, it suddenly became “a bridge too far” even for Fox, which prefers its racism to be (slightly) more subtle.

What I still don’t get, however, is what attracted them to this moocher in the first place.

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