Tag Archives: Wisconsin

Another Assumption Bites The Dust

Local Government, Public Policy and Governance, , ,

Sometimes, evidence proves seemingly logical arguments and analyses wrong.

I used to be a critic of prevailing wage laws–I was persuaded that such laws interfered with the market for construction services and added unnecessary costs to the public projects financed with taxpayer dollars.  I agreed with those who argued for repeal of such laws by contending that if we did away with prevailing wage,  taxpayers could save hundreds of millions of dollars on public projects, because non-union contractors who didn’t pay prevailing wage would begin bidding on those jobs, generating more competition.

Unfortunately, the evidence doesn’t support that theory, logical as it seemed.

In 2017, the Wisconsin state Legislature repealed prevailing wage. The state’s prevailing wage laws established local market-based minimum wages on the construction of schools, roads and other taxpayer-funded projects. It ensured that contractors were paying their workers fair market wages while also investing in training and apprenticeship programs that ensure the state has a stable supply of skilled craft workers to perform dangerous and demanding jobs.

Evidently, available peer-reviewed research as well as an analysis from Wisconsin’s non-partisan Legislative Fiscal Bureau warned at the time that there was no conclusive evidence to support the claims being made by proponents of repeal. However, the state’s lawmakers ignored the nay-sayers, and  voted for repeal on a largely party line vote.

In early October of this year, Dr. Kevin Duncan, Professor of Economics at Colorado State University –Pueblo published a study of the results. It was the first study that examined how the claims made by Wisconsin repeal proponents stacked up against actual economic data. It wasn’t pretty.

Here are just a few of the topline findings.

Repeal has produced a 6% wage cut for skilled construction workers (about $3,000 per year, on average) and a 4% drop in construction health insurance coverage.
Repeal has led to a 60% increase in public projects going to out-of-state contractors.
Apprenticeship completion in Wisconsin is lagging neighboring states with prevailing wage laws.
Bid competition on Wisconsin Department of Transportation projects has decreased by 16%.
There have been no project savings. In fact, the per-mile cost of highway resurfacing projects has actually gone up slightly, as have “cost overruns” on road construction projects.

The obvious question is: why? And the not-so-obvious answer is a variant of what I used to tell my students about real-life policy: it’s more complicated than it looks!

The issue boils down to skill levels. When governments and companies invest in higher-skilled workers, the higher quality of the work, higher levels of productivity and better safety metrics combine to minimize waste and avoid costly mistakes.

More highly skilled workforces also experience lower employee turnover, which reduces costs to contractors.

But repeal imposes other costs that don’t show up in project bids. For example, when the wages are slashed, it means more workers are forced to rely on Medicaid, food stamps and other government assistance programs to support their families. Those costs are borne by taxpayers…. And, when policy is distorted to advantage lower-skilled workers from out-of-town, it also means the benefits of job creation and consumer spending that would otherwise be stimulating Wisconsin’s economy are now going to other states.

Wisconsin was not the only state that repealed its prevailing wage law. Indiana did so several years ago, and West Virginia, Michigan, Kentucky and Arkansas all did the same thing within the past decade.

Interestingly, according to the linked newspaper report, the Assistant Republican Leader in the Indiana House of Representatives (the story did not further identify him) “famously told a Wisconsin audience in 2017 that repeal ‘hasn’t saved us a penny.’ And study after study has shown him to be right.”

The Midwest Economic Policy Institute found that after repeal of the common wage, “Hoosiers working in the construction industry are earning less than they were before, with no meaningful cost savings for Indiana taxpayers.”

Consider this example number umpty-zillion that public policy should be based on evidence rather than ideology….

 

 

While We Are Distracted….

Random Blogging, , , ,

For years, I believed that most politically-active people were working for policies consistent with their conception of the good society. We were all well-meaning; we just had different points of view, different visions of what the good society should look like, and we obviously differed on how to get there.

The past few years have disabused me of that belief. Incredible as I still find it, the evidence is too clear to ignore: the political establishment of today’s GOP is not composed of people who are well-meaning but deluded. These are people–mostly but not exclusively male–who truly do value their own wealth and power above the lives of others.

The evidence is simply too copious to dismiss, and the moral rot isn’t limited to a few appallingly bad actors like Mitch McConnell, Donald Trump and William Barr.

Think about it.

When Wisconsin’s Democratic Governor wanted to delay his state’s primary election so that voters wouldn’t need to choose between risking their health and exercising their right to cast ballots, the Republicans in the state legislature appealed to the Republican majority on the state Supreme Court, which ruled that the election must proceed. When Democrats appealed that ruling to the U.S. Supreme Court, the five judges appointed by Republicans obediently voted their politics over their humanity.

In the end, the judge the Wisconsin GOP was trying to re-elect still lost–bigly— because voters risked contagion to exercise their franchise. But the risk was real. The Milwaukee Journal Sentinal now reports that

Officials have identified seven people who appear to have contracted COVID-19 through activities related to the April 7 election, Milwaukee Health Commissioner Jeanette Kowalik said Monday.

Six of the cases are in voters and one is a poll worker, Kowalik said.

Lest you conclude that this was a “one-off” or limited to the State of Wisconsin, allow me to remind you of the sorts of things this administration has been doing while the GOP’s head clown has been keeping us distracted.

A recent New York Times headline asks “Why Is Trump Gutting Regulations That Save Lives?”

Since Jan. 30, 2017, the Trump administration’s approach to federal regulation has been defined by a simple requirement: “one in, two out.” The basic idea, set out in one of President Trump’s first executive orders, is that whenever a federal agency issues one regulation, it has to take at least two regulations away — and produce an incremental cost, on the private sector, of zero.

The idea was absurd from the very start.

It was profoundly demoralizing to experts in federal agencies, who know a lot about science and who have plenty of good ideas about how to protect public health and safety. But its absurdity has been put in a whole new light by the Covid-19 pandemic, which demonstrates that the regulatory state is no enemy of the people — and that smart safeguards, designed by specialists, save lives.

If there are regulations on the books that are outmoded, or have proved to be more onerous than necessary, they should be eliminated. If existing regulations are demonstrably protecting people–worker safety regulations that prevent illnesses and death,  air pollution regulations that protect public health, restrictions on the use of chemicals that have proved dangerous or cancer-producing–arbitrarily removing them to keep the number of rules down is insane.

Unless, of course, protecting the pocketbooks of your donors is more important than protecting the lives and health of your constituents.

Trump’s behavior during the pandemic has been perfectly compatible with GOP priorities–lifesaving equipment stolen from (Democratic) states that desperately need it and doled out to “friendlier” Governors. “Briefings” that are ill-disguised, nauseating political rallies. A complete absence of expressions of empathy for those suffering and dying.

As numerous political scientists have pointed out, as repulsive as Trump is–as morally and intellectually defective–he is simply the visible product of what the Republican Party has become.

For those of us who served a former iteration of that party–a very different iteration–what it has become is heartbreaking.

 

 

 

The Danger Zone

Public Policy and Governance, , , ,

Democratic systems vary, but they share certain foundational assumptions. The most important of those is the starting point: We The People are the “deciders.”  Ultimate authority rests with the voters.

In democratic theory, candidates contend for support during election campaigns, voters cast their ballots, and the candidate who garners the most votes wins. (At least if there’s no Electoral College involved).

In order for this process to work, both winners and losers must respect the will of the people.

Losers may disagree with positions endorsed by the winning candidates, and as the “loyal opposition,” they may work in accordance with the rules to defeat the winners’ agenda, but democratic norms require that they acquiesce to the people’s choice.

When that doesn’t happen–when the losers disregard the rules and norms in order to frustrate the choices made by the electorate–governance can no longer be considered either legitimate or democratic.  Political actors who accept authority when they win, but defy the settled norms of democratic behavior when they lose , undermine the public trust and make a mockery of the rule of law.

The visceral reaction to Mitch McConnell’s unprecedented theft of a Supreme Court seat reflected a widespread recognition that this was no ordinary political maneuver–it was the arrogant demonstration of a cheat that he would abide by the rules only when they favored him.

When Republicans in the North Carolina legislature stripped the incoming Democratic governor of powers the office had previously exercised–because they could–it was their middle-finger-to-democracy gesture.

That “in your face” rejection of democratic norms is spreading.

In a newsletter for the Boston Globe, Michael Cohen recently pointed out, “in a normal representative democracy, if you run for office and then lose you let the other party run things for a while. That doesn’t mean a political party can’t oppose those efforts, but it does mean that you have to respect the voters’ decisions.”

That isn’t what is happening in Wisconsin or Michigan.

In these two states, Republican gubernatorial candidates were defeated in this year’s midterm elections. Democrats also won both attorney general races. And now Republicans are refusing to accept the results.

Instead they are trying to use lame-duck sessions – before the Democrats are sworn into office – to weaken the power of the incoming Democrats and put in place policy changes that will benefit Republicans.

Let’s start with Wisconsin, where soon-to-be former governor Scott Walker and his Republican allies in the state legislature have spent the past eight years making a mockery of democracy in the state.  Upon taking office they rammed through a highly controversial measure that stripped collective bargaining rights from the state’s public sector unions. Then they re-wrote legislative maps to give themselves out-sized control of the state government. In the 2018 election, Democrats won 53 percent of the vote, compared to 45 percent for Republicans. Yet, because of gerrymandering, that translates into a 64-36 advantage for Republicans in the state assembly.

But apparently that’s not enough for Republicans. Now they are enacting legislation that would kneecap Democrats once they take office….

For Governor-elect Evers, Republicans would not only force him to enact work requirements for Medicaid, but would also require him to get the legislature’s permission before submitting any request to the federal government to change how federal programs are administered. In effect, Republicans would give themselves a veto over much of what Evers would try to accomplish as governor. Walker has stated publicly that he will sign the bills.

….

Republicans aren’t even being shy about their agenda. In Wisconsin, Republican Senate Majority Leader Scot Fitzgerald defended his party’s actions by saying, “I’m concerned. I think that Governor-elect Evers is going to bring a liberal agenda to Wisconsin.”

He’s right. But of course Evers’s agenda is what Wisconsin voters chose.  To put roadblocks in front of it is to, in effect, say to voters that their choices don’t matter. It’s hard to imagine a statement more contemptible in a democracy than a political leader telling a state’s voters, “only the views of the people who voted for me matter.” But that’s precisely what Fitzgerald and his Republican colleagues are doing.

Changing the rules after they’ve lost the game. Undoing the results of a democratic election because they lost.

This behavior is nothing less than an attack on America and its values.

Easy To Destroy, How Long To Repair?

Education / Youth, ,

A friend who lives in Wisconsin occasionally sends me items from newspapers in that state that he thinks will interest me. Most have obvious implications for other states–and since Scott Walker became Governor, those implications have tended to range from worrisome to terrifying.

The most recent news from what I’ve come to call “the frontier of shooting yourself in the foot” was a report about the University of Wisconsin’s loss of thousands of engineering students.

The story began by explaining why engineering is “more than classrooms and theory: It’s a hands-on discipline for turning ideas into prototypes and products that help people.” The university should have a number of advantages when it comes to attracting engineering students–most recently, it has used private grant funds to create an innovative “maker space” appealing to both in-state and out-of-state applicants.

Accommodating those applicants is a different issue.

There are roughly 4,500 undergraduate students in UW-Madison’s engineering sequence today. About 6,600 applied last year, including many qualified applicants from outside Wisconsin who could add to the state’s talent base.

The main barrier to taking more is a lack of faculty to educate more students without diminishing the quality of the experience for all. Private gifts help, but the core funding for faculty hires comes from state government support and student tuition.

As the article delicately puts it, those funding sources “haven’t grown.” That’s a rather massive understatement: the Walker Administration’s cuts to funding for the university can only be characterized as savage. In the wake of those cuts, and other measures inimical to higher education, the once-storied University of Wisconsin has seen faculty depart and rankings slip.

Walker not only engineered (no pun intended) an enormous $250 million cut to the University of Wisconsin’s budget, just when other state universities were finally emerging from the recession. He also proposed to get rid of academic tenure.

As one observer wrote at the time,

With his draconian budget cuts and his assault on the tenure system, Walker is sending a message that professors at Wisconsin should sit down and shut up. Some of them–those most able to move, which likely includes some of their best talent–might now be looking for greener pastures elsewhere.

An article in Slate a year later considered the consequences of these changes in funding and tenure protections. Several highly-regarded professors had left; others at risk of being “poached” were retained (at least temporarily) at a cost of some $9 million dollars in pay raises and research support. As the Slate article explained:

Academics, whether they have it or not, want some form of tenure to exist to protect the integrity of the knowledge that is produced, preserved, and disseminated.

Wisconsin professors simply do not want research limited by the whims of 18 people appointed by a governor with an openly stated anti-education agenda. And you shouldn’t, either. Think university research doesn’t affect you? You’re wrong. Hundreds of technological and social advances that you depend upon have been made thanks to the research of some brainiac at some university somewhere: what kind of cities to plan; how (and where) to alleviate poverty and hunger; what kind of diseases to treat; what kind of drugs to invent (or make obsolete); what kind of bridges and roads to build (and where). If professors are not protected from disagreeing with the agenda of their “bosses”—whether that be Dow Chemical, Gov. Walker, or President Trump—the consequences will go far beyond one person’s paycheck.

What is happening in Wisconsin is tragic: Scott’s vendetta against intellectual “elitists” is affecting everything from the quality of the state’s workforce  to its reputation and its ability to attract new employers. Last year, the state ranked 33d in job creation–not dead last (Kansas has that distinction) but nothing to brag about.

What is happening in Wisconsin is also where Donald Trump and today’s rabidly anti-intellectual GOP want to take the rest of us. And that is truly terrifying. It’s relatively easy to destroy an asset; rebuilding it, and restoring a sullied reputation is a far dicier proposition.

 

 

 

I Don’t Know What This Is, But It Sure Isn’t Capitalism…

Local Government, , , ,

A number of media outlets have recently reported that Foxcomm, a company usually referred to as a “Taiwanese giant,” will open a plant in Scott Walker’s Wisconsin. As the Guardian prefaced its article,

The announcement by the Taiwanese giant Foxconn that it will build an LCD-manufacturing facility in Wisconsin worth an estimated $10bn was met with considerable fanfare.

But the state has a troubled history in matters of economic development, and the company, a supplier to Apple, Google, Amazon and other tech giants, has a lackluster record when it comes to fulfilling its promises. The news should raise red flags.

In a way, it is a transaction that barely merits publicity; for as long as I can remember, states and municipalities have been trying to entice “job creators” to their areas by offering bigger and better incentives: tax abatements, infrastructure improvements, job training “grants”–all manner of goodies funded out of our tax dollars.

The deal, backers say, will create 13,000 jobs in six years – in return for a reported $3bn in state subsidies. Only 3,000 of those jobs will come immediately. Furthermore, the Washington Post has reported that Foxconn has a track record of breaking such job-creation promises. In 2013, the company announced plans to hire 500 people and invest $30m in Pennsylvania. The plan fizzled out.

Walker and Paul Ryan aren’t the only politicians taking credit for this deal; the White House immediately weighed in, with President Trump reportedly saying, with his characteristic modesty and eloquence: “If I didn’t get elected, [Foxconn] definitely would not be spending $10bn.”

Jennifer Shilling, a Democratic Wisconsin state senator, is one of those who have criticised the deal, noting that the company “has a concerning track record of big announcements with little follow through,” and questioning the legislative appetite for a $1bn-to-$3bn corporate welfare package. Of course, Wisconsin’s legislature is controlled by Republicans who won’t need bipartisan support to pass the enormous subsidies.

The Guardian noted the patchy performance of Foxcomm elsewhere–Foxconn investments in Indonesia, India, Vietnam and Brazil failed to live up to the hype, despite written agreements–and also referred to the less-than-impressive performance of Wisconsin’s previous economic development efforts.

The Wisconsin Economic Development Corporation (WEDC) is a participant in the Foxconn deal. During Walker’s brief presidential run, it was dogged by questions over failed loans. Businessman and Republican donor Ron Van Den Heuvel was indicted for fraudulently borrowing $700,000 from a local bank. Months after WEDC was created in 2011 the agency, then led by Walker, lent him more than $1.2m, without performing a background check.

Likewise, the state’s manufacturing and agriculture tax credit has been widely criticized as a simple refund for millionaires, according to the Wisconsin Budget Project (WBP) nearly “wiping out income taxes for manufacturers and agricultural producers”.

What the Guardian and other outlets failed to address was the absolute absurdity of these sorts of “job creation” efforts. The use of tax revenues to lure large, profitable corporations to one’s city or state may or may not be immoral (I vote for immoral), but the practice is hardly consistent with genuine capitalism and free enterprise, which require that entrepreneurial activities take place on a level playing field.

Criticisms of these sorts of economic development agreements tend to focus on whether the state or city has made a “good deal.” (Evidently, Wisconsin has not.) But that is almost beside the point. The local factory or other home-grown enterprise that prospers enough to hire new workers doesn’t receive these perks; meanwhile, new, sometimes competitive enterprises are being lured to their state with their tax dollars.

This is corporatism, not capitalism. Paul Ryan and Scott Walker are said to be fans of Ayn Rand, but I’ve read Atlas Shrugged. Rand was a capitalism fundamentalist, and would have been disgusted by this deal; she would have labeled the beneficiaries “looters.”

And she’d have been right about that.