Public Policy and Governance – Page 111

Different Roads To Worker Wellbeing

As my children have grown and traveled and lived in other countries, I’ve come to realize how truly unfortunate American hubris is–how our belief in “American exceptionalism” and assumed superiority prevents us from learning from the experiences and experiments of other nations.

In several previous posts, I have mentioned that my “techie” son currently lives and works in Amsterdam. Thanks to contemporary technologies like FaceTime, which have replaced those expensive “long distance” phone calls, we talk often. And because we’re a pretty political (okay, nerdy) family, those talks often turn to matters of political philosophy or public policy. I don’t recall what triggered our recent particular discussion of workers’ rights, but my son shared with me information about Netherlands’ work councils.

Any company that employs at least 50 workers is required to establish a Worker Council.
Companies employing between ten and fifty individuals must do so if a majority of employees request it. (If those employees don’t request establishment of such a council, there are requirements for holding staff meetings at which employees are entitled to “prior consultation” about proposed changes.) Companies with fewer than ten employees aren’t subject to these requirements.

Work Councils aren’t unions. They are a legal requirement for businesses in the country, charged with promoting and protecting employee interests. Such councils must be consulted before the owners or managers of a company can implement major decisions affecting workers. Councils are empowered to consent–or withhold consent–to changes that affect workers’ “terms of employment.”

Company managers must meet with their Works Council at least twice a year, and there are requirements for worker representation on those councils.

Evidently, work councils aren’t simply a feature of Netherlands’ governance– multinational enterprises operating in at least 2 countries in the European Economic Area (EEA) come under the jurisdiction of something called “the European Works Council Directive (EWC).”

Companies required to establish these councils are further required to give members of those councils time off to do work required by that membership, and are legally required to provide those individuals with leave for the necessary training. Employers are also required to pay all the costs of such training.

The law requires that works councils be informed and consulted about economic issues, but gives the councils the right to approve or disapprove changes on social issues. I’m not clear on how “social issues” are defined. And I’m definitely not clear on the relationship of the councils to labor unions: in the regulations my son shared with me, it says:

Works councils are not directly trade union bodies although most have a majority of trade union members. It is, however, very common to find that some of the works council members are not in a union and in some cases trade unionists are in a minority, or even not present at all.

I asked for links to the information because–during our conversation–my son had explained that his company had proposed some fairly significant changes to vacation time and other elements of employment, but the Worker Council had required changes to the changes. Evidently, after some back and forth, agreement was reached–and presumably, all parties were satisfied.

I was fascinated.

Here in the U.S., diminished union membership has translated into much diminished worker power. Rather than labor and management bargaining from roughly equivalent positions, economic change and loss of worker power has given management a highly disproportionate ability to “call the shots.” The existence of these Worker Councils suggests that, in the Netherlands and in the European Union, there is genuine concern for the well-being of employees, and for the maintenance of a reasonable balance of power between labor and management.

I certainly don’t know enough about Europe’s experience with these councils to have an informed opinion about their performance, but I wouldn’t even have known of their existence but for a conversation with someone–in this case, my son–who benefited from their operation.

I wonder how many other potentially good ideas we Americans miss because we are so convinced that “we’re number one,” and others have nothing to teach us….

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Pesky Data!

Andrew Yang’s campaign for the Presidency introduced the UBI , or Universal Basic Income, to millions of Americans unfamiliar with the concept. He put that policy debate “on the table”–following which policymakers have ignored or ridiculed it.

In previous blogs about the UBI, I have acknowledged how unlikely it is that contemporary American lawmakers would pass, or even consider, such a program. But research suggests a high probability that millions of jobs will be lost to automation within the next 15-20 years– a probability that will present a daunting challenge that America’s current inadequate and bureaucratic social safety net is clearly unable to meet.

The right-wingers who believe that taxation is theft, and the contemporary Calvinists who believe that poverty is the result of sloth and/or moral defect, respond to UBI advocacy with horror: those sluts who are producing babies in order to get added welfare payments of a munificent 150/month would obviously become an even greater burden on the “makers.”

Pilot programs and academic research continue to crank out evidence to the contrary. Those programs continue to multiply:the latest effort is in Germany, where a Basic Income Pilot Project will start next spring and will send 122 people €1,200 ($1,422) per month for three years. No strings attached. The study, initiated by the German Institute for Economic Research and My Basic Income, a Berlin-based nonprofit, will investigate the effects of an unconditional basic income.

Recently, a new multi-agency report backed by the United States Agency for International Development reported on a project to compare the effectiveness of workforce training programs with direct cash transfers. It found a “marked increase in entrepreneurialism, well-being and productivity within the cohort that received only cash.” Other experiments have found that unrestricted cash payments went for food, medicine and education, and did not–as cynics warned– increase joblessness or substance abuse.

Our policymakers, of course, prefer ideology to pesky evidence…

There actually is substantial data showing that, contrary to Americans’ deep cultural disdain for social welfare programs, a UBI would be both efficient and socially unifying. Universal programs escape the stigma of benefits targeted to the poor.

Aside from the ideologically-grounded and empirically dubious belief that “handouts” encourage sloth and vice, the major objection to a UBI is cost. My own proposal for finding the money to pay for such an expensive program would begin with ending fossil fuel and other subsidies that have long since outlived any usefulness they may have had, and curtailing our bloated military expenditures–all measures that are overdue in any case. But there are several other approaches.

A while back, William Gale of the Brookings Institution’s Hamilton Project made a persuasive case for coupling a UBI to a tax that would pay for it– a 10 percent Value-Added Tax (VAT).

As he pointed out, a VAT is a national consumption tax—like a retail sales tax but collected in small bits at each stage of production. It raises a lot of revenue without distorting economic choices like saving, investment, or the organizational form of businesses. And it can be easier to administer than retail sales taxes. The big problem with such a tax is that it is usually regressive–but interestingly, not when combined with a UBI.

As I explained in an earlier post,

The Tax Policy Center estimates that the VAT in conjunction with a UBI would be extremely progressive. It would increase after-tax income of the lowest-income 20 percent of households by 17 percent. The tax burden for middle-income people would be unchanged while incomes of the top 1 percent of households would fall by 5.5 percent.

It may seem counter-intuitive, but the VAT functions as a 10 percent tax on existing wealth because future consumption can be financed only with existing wealth or future wages. Unlike a tax imposed on accumulated assets, the VAT’s implicit wealth tax is very difficult to avoid or evade and does not require the valuation of assets.

Assuming that Gale’s numbers are sound, a VAT would generate more than enough money to pay for a UBI. Meanwhile, a growing body of research confirms the benefits of the UBI approach to social welfare.

But this is America, where Republican senators are climate change deniers. America, where Republican governors dismiss overwhelming evidence that mask wearing helps abate a pandemic. America, where lawmakers reject the very idea of implementing the sort of national healthcare programs that work well elsewhere.

America–where our lawmakers pay absolutely no attention to evidence contrary to their preferred beliefs.

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Pay Your Dues!

I recently saw yet another study that attempted to quantify just how much money is lost to national treasuries by reason of what is politely called “tax avoidance.”

The report, from an organization named the “Tax Justice Network,” is touted as the first study to thoroughly measure how much money each country loses each year to corporate tax abuse and private tax evasion. Its calculations were based upon data that had been self-reported by corporations to tax authorities.

I realize that one person’s loophole is another person’s policy choice, but with that caveat…

The research found–unsurprisingly–that wealthy countries are the primary drivers of tax revenue loss. (I say “unsurprisingly” because you have to have money to evade taxes.) Wealthy countries contributed most to the total of $427 billion in losses annually. Those losses, as the report noted, affect the ability of countries all over the world to provide services to the public.

This report puts numbers to the problem, but any sentient citizen is aware of the arguably pathological aversion to taxes displayed by many wealthy citizens and corporate entities. Certainly that’s true in the United States, where politicians with straight faces equate taxation with theft, and bemoan the extraction of dollars from presumed self-made “makers” to support those they dismiss as “takers.”

Probably the best response to this mischaracterization was Elizabeth Warren’s smackdown a few years ago:

There is nobody in this country who got rich on their own. Nobody. You built a factory out there – good for you. But I want to be clear. You moved your goods to market on roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory… Now look. You built a factory and it turned into something terrific or a great idea – God bless! Keep a hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.

Economists are quick to point out that economic growth–and the ability of wealthy Americans to prosper in an economy heavily dependent on consumption–requires that those at the bottom of the income distribution have disposable income sufficient to spend in the marketplace. Corporate bigwigs don’t create jobs–job creation is a function of demand. (No one is going to be hired to produce more widgets if few people have the resources to buy those widgets.)

What I always wonder, however, is whether these “captains of industry” treat their country clubs and other membership organizations the way they treat their countries. How would the Orange Menace react if members of Mar-A-Lago declined to pay their dues?

Those golf courses need tending. The clubhouse roofs and mechanical systems require maintenance. The properly servile “help” won’t be there to bring you your Scotch and soda if they aren’t being paid. Etc. Why don’t the same people who presumably understand the need to pay dues adequate to keep these organizations functioning acknowledge that–as members of the polity–they have similar obligations to the country?

Because they do know better.The loss of those billions of dollars isn’t accidental.

“A global tax system that loses over $427 billion a year is not a broken system, it’s a system programmed to fail,” said Alex Cobham, chief executive of the Tax Justice Network.

The ability to evade paying one’s membership dues–the chutzpah required to be a “free rider” on the contributions of others– doesn’t mean that a businessperson is “smart.” To the contrary, it demonstrates just who the real “takers” are.

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Skinning That Cat

There’s an old adage to the effect that there is more than one way to skin a cat. I thought about that when I read a recent opinion column in the New York Times, focusing on Mitch McConnell’s packing of the federal bench with rightwing judges.

The article began by acknowledging that McConnell and Trump–enabled by their allies in the Senate– have packed the federal courts with more than 200 conservative judges over the last four years. Their remaking of the federal judiciary includes three Supreme Court justices, and is part and parcel of the rightwing effort to achieve what it could never manage to achieve through legislation– “including eliminating health care for millions and undermining what remains of the Voting Rights Act.”

The authors of the essay remind readers that we are not entirely helpless in the face of this ideological takeover; they advocate taking a page from the conservatives and forging “a new form of progressive federalism.”

First, state elected officials must be ready to respond quickly to, or act in advance of, rulings from the Supreme Court. If, for example, the Affordable Care Act is weakened or struck down, Democratic state legislatures should have bills drafted to introduce that day to protect people who will lose coverage. And officials must act now to protect and expand access to reproductive health care — especially for poor women and women of color — given the clear threat to Roe v. Wade.

Are excessively business-friendly federal courts making it easier for companies to pollute? Harder for government agencies to address racism? Progressive states can pass policies “to patch holes ripped open” by those courts.

if the Supreme Court further constrains the Consumer Financial Protection Bureau, states can go after corporations for violations of state securities and consumer protection statutes. If the court adopts cramped readings of federal environmental statutes, state regulators must use their tools to go after the country’s largest polluters. And if the court continues to undermine federal bribery laws, state attorneys general can bring corrupt politicians to justice under state criminal law.

What about states like Indiana, deep red and highly unlikely to follow that prescription? In those states, progressive advocacy groups and lawyers outside government can bring lawsuits to enforce rights protected by state constitutions. When I was Executive Director of Indiana’s ACLU, our affiliate brought such suits, and several were successful. And in the early days of the gay rights movement, organizations like Lambda Legal and the ACLU achieved state-by-state victories that ultimately helped change a nationally homophobic legal environment.

Recently, Nevada became the first state in the country to officially protect same-sex marriage in its Constitution. As the essay reminds us, several states have refused to allow their police take part in the federal government’s immigration crackdown. States

can rely on conservative decisions that promote state independence from the heavy hand of Washington. The very jurisprudential tools that make it harder for Washington to achieve progressive aims can empower states to do so instead.

Ironically, the same federalism that facilitated slavery and Jim Crow under the veil of “states’ rights” can be turned to progressive ends.

It’s slower and will take more work, but there’s more than one way to skin that cat.

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Middle Schoolers Solve Gerrymandering!

One of the many structural problems that prevents America from experiencing genuine democratic accountability is gerrymandering. Those of you who have been reading this blog for more than a few months will have encountered my frequent posts describing the multitude of ways that partisan redistricting–aka gerrymandering–distorts election results and operates to suppress citizen participation.

Over the years, the Supreme Court’s majority has declined to find partisan redistricting unconstitutional or even justiciable–piously labeling it a “political question.” One of the Court’s excuses was the unavailability of reliable tests to determine whether a vote margin was the result of a gerrymander or simply a reflection of majority sentiment. Even after tests were developed that proved their accuracy to the satisfaction of lower courts, the Supreme Court declined to rule against the practice, reinforcing the widespread conclusion that the Justices’ decisions were impelled more by ideology than an inability to determine whether gerrymandering had occurred.

Now, according to a fascinating article from Forbes, a group of middle-school children has demonstrated the ability to separate the wheat from the chaff–or in this case, the gerrymander from political enthusiasm.

The article began by noting that the practice of gerrymandering is used to “dilute the voting power of certain constituents, minorities, and other groups.” (In the felicitous phrase coined by Common Cause, gerrymandering is the process that allows legislators to choose their voters, rather than the other way around.)

As the subject of their science research project, three middle school students from Niskayuna, New York, decided to take on this serious issue. In their work, Kai Vernooy, James Lian, and Arin Khare devised a way to measure the amount of gerrymandering in each state and created a mathematical algorithm that could draw fair and balanced district boundaries. The results of the project were submitted to Broadcom MASTERS, the nation’s leading middle school STEM competition run by the Society for Science & the Public, where Vernooy, 14, won the Marconi/Samueli Award for Innovation and a $10,000 prize.

These middle schoolers, who are too young to vote, decided to use scientific research to solve the problem of identifying when a redistricting map was the product of a gerrymander. They came up with a method of identifying political communities and regions of like-minded voters, then grouped those communities together to form precincts.

Each precinct was adjusted to include a compact or circle-like shape, a similar population size and a similar partisanship ratio. The result was a simple representation of where groups of like-minded voters live in each state.

These precincts were then compared to actual voting districts within the state. The comparison shows the percentage of people that are in the precinct but not the district, therefore illuminating the number of people that the district fails to represent. Using this method, they were able to give each state a gerrymandering score.

The article included color-coded maps illustrating the process the middle-schoolers devised. It ended with the pious hope that “the right people” would take note.

The article should serve to remind us that there are solutions even to seemingly intractable structural problems. The disinclination of the Court and Congress to actually implement those solutions is a different kind of reminder.

That disinclination reminds us that the people who benefit from cheating are unlikely to be interested in stopping the practice.

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