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Strong Rules Needed On Abusive Debt Collection Practices

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Dave JohnsonI have been hounded for months by a company attempting to collect money for a gym membership that I canceled more than 15 years ago.

I was paying $150 a year for the membership before I correctly canceled the membership in writing. That “fitness center” was bought by a national chain that is known for hounding people for unpaid memberships, even if the membership has been canceled and nothing is actually owed.

In my case, they say I owe $2,500, but they will “settle” for less. And I can’t stop the calls.

The Consumer Financial Protection Bureau (CFPB) is now proposing new rules that would put a stop to this kind of behavior and give consumers who have been victimized options for relief.

The CFPB is a new agency of the government that protects regular people from scams, frauds and abuses by the financial industry. The bureau came about as part of the minimal Dodd-Frank re-regulation of Wall Street and the rest of the financial industry following the 2008 crash.

One such often-abused financial scheme is debt collection. It’s an entire industry. Many people don’t know that there is a market where “debt buying” companies can actually buy “bundles of debt.” A company can actually purchase a “portfolio” of old debts like loans, installment car or store loans, even gym membership contracts that have been written off because a company has decided it is just too much trouble and expense to try to collect.

Instead of just giving up, though, the original lender “sells” the debt for pennies on the dollar to companies that specialize in doing nothing but collections. The collection company is all set up with “boiler rooms” full of people and phones, where they have refined techniques to hound the debtor, trying to collect what they can.

Often the collection companies don’t even verify that the debt is even legitimate.

Another scam is “fraudulent service” where the debt company falsely claims they served papers on a debtor, and when the debtor doesn’t show up in court they get a judgment allowing them to garnish paychecks and extend the legal period for collecting debt.

A January report titled “Unfair, Deceptive & Abusive: Debt Collectors Profit from Abusive Tactics,” by the Alliance for a Just Society, which is now the People’s Action Institute, looked at 75,000 debt-collection consumer complaints filed with the CFPB over two years. These complaints showed that debt collectors routinely harass people, even if they don’t even owe anything. And it is happening to a lot of people.

The People’s Action Institute report shows the need for the CFPB to crack down on the abuses by this industry. And that is exactly what the CFPB is now proposing to do. CNBC has the headline: “US consumer agency seeks to overhaul debt collection industry.”

The U.S. watchdog for consumer finances unveiled on Thursday a major proposal to toughen regulation of the multibillion-dollar debt collection industry, with a focus on keeping agencies from pushing people to pay debts they do not owe, informing borrowers of their rights and cutting down on calls to debtors.

“Today we are considering proposals that would drastically overhaul the debt collection market,” said Consumer Financial Protection Bureau Director Richard Cordray in a statement. “This is about bringing better accuracy and accountability to a market that desperately needs it.”

… Roughly 13 percent of consumers have a debt currently in third-party collection, with an average amount of $1,300, data from the Federal Reserve Bank of New York shows.

The New York Times’ Dealbook looks at some of the abuses, in” Debt Collectors’ Abuses Prompt Consumer Agency to Propose New Rules“:

Some 77 million people — roughly one in three adults with a credit report — have a delinquent debt in collections, according to an estimate by the Urban Institute.

… Susan Macharia, 39, an administrative worker who lives in Buena Park, Calif., said she was blindsided in January when she got a call from a collector saying that her wages would be garnished unless she paid off a $10,000 credit card debt that she allegedly ran up in 2003.

A debt so old would normally be beyond the statute of limitations, and legally uncollectable, but the company had a copy of a 2006 default judgment that was entered against her when she failed to respond to a collection lawsuit.

But Ms. Macharia, who opened her first credit card account just three years ago, had no recollection of being notified of a lawsuit, and she was living in Atlanta when the papers were said to have been served on her in California. …

While Ms. Macharia tried to figure out how to contest the debt, the collector began garnishing nearly $800 a month from her paychecks.

It’s about time the government starting acting like a government again. Meanwhile Republicans in Congress are trying to gut the CFPB’s effectiveness because the bureau cracks down on scams like these.

This post originally appeared on ourfuture.org on July 28, 2016. Reprinted with Permission.

Dave Johnson has more than 20 years of technology industry experience. His earlier career included technical positions, including video game design at Atari and Imagic. He was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.

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TPP Opposition: Make Them Do It And Hold Them To It

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Dave JohnsonElites take “globalization” as a given because “trade” deals have pushed sovereignty off the table and locked governments out of decision-making over things like stopping offshoring of jobs and protecting domestic industries. They smirk knowingly and wink and nod when politicians respond to citizen complaints about the disastrous effect this is having on populations, regions and economies. They assume the politicians are just saying what they need to say to get votes and will rejoin them after they get that pesky election out of the way.

But times are changing. The public has caught on. “Brexit,” the rise of Donald Trump and other reactions to globalization are forcing politicians to come down on the side of the people instead of the corporations.

For example, it turns out that the latest deal to push national governments aside so corporations can do what they want to do, the Trans-Pacific Partnership (TPP), is a very big deal at the Democratic convention, with the entire convention chanting “No TPP, No TPP.” And it has become a very big deal in national politics, too, with Donald Trump and Bernie Sanders having made it a centerpiece of their presidential campaigns in the Republican and Democratic parties.

Clinton Opposed To TPP

Hillary Clinton has responded to the pressure, saying repeatedly that she is opposed to TPP and opposed to a vote on TPP in the “lame duck” session after the election.

Appearing on stage with Bernie Sanders as he endorsed her for president, Clinton restated her opposition to TPP, saying, “[W]e’re going to say no to attacks on working families and no to bad trade deals and unfair trade practices, including the Trans-Pacific Partnership.”

McAuliffe Says Clinton Will Shift “Once The Election’s Over”

Virginia governor, long-time Clinton friend and insider Terry McAuliffe, said in public that he thinks Hillary Clinton will shift to being a globalist once the election is out of the way.

Politico’s Morning Trade has the story.

“Once the election’s over, and we sit down on trade, people understand a couple things we want to fix on it but going forward we got to build a global economy.”

Pressed on whether Clinton would turn around and support the trade deal she opposed during the heat of the primary fight against Bernie Sanders, McAuliffe said: “Yes. Listen, she was in support of it. There were specific things in it she wants fixed.”

Trump Jumps On It

Donald Trump immediately jumped on McAuliffe’s comments, saying it shows that Clinton will “betray” TPP opponents. The odious Washington Times covers this story, in “Donald Trump: ‘Just like I have warned,’ Hillary Clinton will ‘betray you’ on TPP“:

Donald Trump seized on Virginia Gov. Terry McAuliffe’s comments that Hillary Clinton will flip and support the Trans-Pacific Partnership almost as quickly as Mrs. Clinton’s team disavowed them, pointing out that he’s warned in the past of her looming betrayal on the issue.

“As I have been saying, Crooked Hillary will approve the job killing TPP after the election, despite her statements to the contrary: top adv.,” Mr. Trump tweeted Wednesday.

Mr. Trump had also shared a Politico story — in which Mr. McAuliffe predicted Mrs. Clinton would support some version of the trade deal after the election — in a tweet Tuesday night: “Just like I have warned from the beginning, Crooked Hillary Clinton will betray you on the TPP.”

Podesta: It’s Not Going to Happen

Clinton campaign chair John Podesta immediately tweeted in response to Trump’s comments that Clinton opposes TPP and opposes a vote after the election in the “lame duck” session.

Speaking to the Wall Street Journal, Podesta went further. WSJ reports in “Hillary Clinton Committed to ‘New Approach’ on Trade Deal, Not Tweaks, Aide Podesta Says,” that Podesta responded that this is not what will happen.

John Podesta said that Mrs. Clinton and her newly minted running mate, Sen. Tim Kaine of Virginia, have been clear about the Trans-Pacific Partnership, or TPP.

“They’re against it before the election and against it after the election,” he said at a lunch sponsored by The Wall Street Journal. He said he met with House Democrats, who overwhelmingly oppose the pact, on Monday and reiterated that position. “So they know, they well know what our position is.”

Asked if Mrs. Clinton would seek to renegotiate particular aspects of the agreement but keep the overall structure, he said no.

“We need a new approach to trade,” he said. “We’re not about renegotiation. We’re not kind of interested in that. We’re interested in a new approach.”

But Podesta hedged on whether Clinton will actively oppose a “lame duck” vote on TPP after the election.

Asked whether Mrs. Clinton would seek to block a lame-duck vote, Mr. Podesta, a former Obama adviser, said: “What the president chooses to do, whether he thinks that that’s an effective strategy, is up to him, but that is not our strategy.”

Kaine Opposed Now

Bowing to political reality Clinton’s vice presidential pick Tim Kaine changed from support for TPP to opposition. Politico reported:

Kaine spokeswoman Amy Dudley said Saturday that the Virginia Democrat shared his negative views on the trade deal with Clinton this week, confirming a report by The Washington Post. “He agreed with her judgment that it fell short” when it came to protecting wages and national security, a Clinton aide reportedly told the newspaper.

Pelosi Opposed As Well

House Minority Leader Nancy Pelosi came out clearly in opposition to TPP. The Huffington Post has the story, in “Nancy Pelosi Declares Opposition To Obama’s Trade Deal“:

House Minority Leader Nancy Pelosi has come out in opposition to the massive Trans Pacific Partnership trade deal as it’s currently written, putting her on the same page as newly minted vice presidential candidate Tim Kaine.

Pelosi (D-Calif.) made the declaration in a letter late last week to several groups that protested outside her offices in San Francisco and delivered her more than 200,000 petition signatures opposing the TPP.

“Please be assured that I will oppose the TPP as it is currently written or any deal that attempts to separate commerce from the environment and will work to ensure our nation’s trade policies include increased transparency, more consultation, and stronger protections to create jobs, strengthen human rights and protect the environment,” Pelosi wrote in messages sent to the Citizens Trade Campaign, the Electronic Frontier Foundation and others involved in the campaign.

Elites Have Been Forced To Change And Mean It

Clinton, Kaine, Pelosi, the Democratic Party platform, the entire convention. Pretty much all of the Democratic party now opposes TPP.

One more example: Gene Sperling, a longtime Clinton economic advisor as well as a top aide to President Obama, said at a convention event that TPP is “in the rearview mirror” now. The Los Angeles Times has the story, headlined “Advisors scramble to stop speculation that Hillary Clinton might go back on her word on TPP“:

The TPP, as the massive trade pact is known, is “in the rearview mirror, now,” said Gene Sperling, the longtime Clinton economic advisor who also served as a top aide to Obama.

“There’s no evidence” that “any version” of the TPP would meet the test that Clinton has set during the campaign — whether it would clearly improve the jobs picture in the U.S., Sperling said at a briefing sponsored by the Atlantic magazine.

Here’s the thing. It doesn’t matter whether Clinton, Kaine and others oppose TPP and globalization in their hearts. What matters is what they will do. They are more and more on the record, even it if is only that they want to win. This puts more and more pressure on them not to support TPP vote after the election.

What matters is that we keep the pressure on and don’t let up. We have to force Obama and Congress away from voting on TPP in the unaccountable “lame duck” session of Congress. It’s up to us to make them do it and hold them to it. That is how politics and democracy are supposed to work. We must continue to make it clear to every politician in both parties that support for TPP is toxic, and that a betrayal on it would be devastatingly costly. Because that’s how it’s done.

This post originally appeared on ourfuture.org on July 28, 2016. Reprinted with Permission.

Dave Johnson has more than 20 years of technology industry experience. His earlier career included technical positions, including video game design at Atari and Imagic. He was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.

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This week in the war on workers: Philadelphia airport workers plan strike during DNC

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LauraClawsonOn Tuesday, workers at the Philadelphia airport rallied ahead of a possible strike next week. The workers are trying to draw attention to their low wages—last year, they won $12 an hour and are now fighting to get to $15. And next week is a good time to get attention for their struggle, with the Democratic National Convention being held in Philadelphia.

On Tuesday, workers and supporters reiterated their intention to strike next week, promising to cause “as much disruption as possible.” The union has authorized – by an overwhelming vote of 95 percent – a strike during the convention in Philadelphia.

As much as it’s a chance for workers to shine a light on their struggle, it’s a chance for DNC delegates and speakers to show their support for these workers. It’s a moment to say that the workers’ fight is part of the Democratic Party’s fight to improve wage and working conditions.

 Why now is the perfect time for a radical labor movement:

In this environment, anything that unions can do alone, with dwindling power, will be insufficient. The challenge for labor, at a moment of historic weakness, is to figure out how unions can support and be involved in movements and campaigns that expand, rather than narrow, the scope and scale of what we are organizing and bargaining for. It may seem counterintuitive, but it is thinking bigger and broadening our vision, goals, and demands—even at a moment of weakness—that offers a path to resurgent unions and a more equal and just country and world.

? Most workers for Amazon’s Mechanical Turk are young, college-educated, and making less than $5 an hour.

Labor makes Clinton’s case to Rust Belt whites curious about Trump.

? Donald Trump was fined thousands for retaliating against workers … the day he accepted the Republican presidential nomination. It’s kind of perfect, actually.

The Republican platform on education: ABPS (anything but public schools).

? A New York City contractor is fighting its punishment, even though it’s a lenient one, for a worker’s death on the job.


This blog originally appeared at DailyKos.com on July 23, 2016. Reprinted with permission. 

Laura Clawson has been a Daily Kos contributing editor since December 2006. Labor editor since 2011

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What’s Taking Little Rock Back To Its Segregated Past?

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Jeff BryantStories about historic efforts to address racial segregation in American public education often start with Central High School in Little Rock, Arkansas in 1957. But the story of Little Rock and segregation badly needs updating.

Central High became one of the first practical tests of principles established in Brown v. Board of Education, the Supreme Court ruling that overturned racially separate public schools. When nine black students showed up for opening day of the historically all-white school, Arkansas Governor Orval Faubus called in the National Guard to prevent them from entering. President Dwight Eisenhower responded by calling in federal troops to escort the students into the school, and Faubus eventually backed down.

But the story of racial integration in Little Rock shouldn’t be confined to Central High. The same year Central was integrated, another school, Hall High, opened in the all-white part of town with an all white student body. Hall would not integrate until 1959 (Faubus closed all Little Rock high schools in school year 1958-59 to protest federal intervention), when three black girls were allowed to attend.

By the late 1970s and early 80s, through busing and other efforts, Hall had become a more racially diverse school, according to Kathy Webb, who graduated from Hall in 1967.* Webb, who is white, currently represents Ward 3 on the Little Rock City Board and has served in the Arkansas state legislature.

In a phone conversation, Webb tells me that she remembers Hall High as a racially diverse school with an academically solid reputation and a relatively high graduation rate. But then, she notes, something happened: Hall High underwent a profound change.

By 2002, when Webb returned to live in Little Rock after decades away, Hall looked more like a school from the segregationist past than the model of progressive integration it had once been. Today, the student population of Hall is just 5 percent white, with 70 percent of students having incomes low enough to receive free or reduced price lunch. Hall has also become a school with a reputation for low academic achievement, and in 2014, the state placed Hall on a list of six Little Rock schools in “academic distress.”

And while Central High continues to be more racially balanced—54 percent black, 34 percent white—Little Rock School District as a whole is racially imbalanced, as CNN recently reported, with a school population that is 70 percent black in a city that is 55 percent white.

“People have been oblivious to this,” Webb says about the re-segregation of the community and Hall High in particular.

What happened to Hall High is an example of what has been happening nationwide, according to a flurry of high-profile media stories. Progress on racial integration in schools achieved during the Civil Rights period has gradually eroded, and in many cities, schools are now nearly as racially divided as they were 40 years ago.

“Integration as a constitutional mandate, as justice for black and Latino children, as a moral righting of past wrongs, is no longer our country’s stated goal,” writes Nikole Hannah-Jones for the New York Times Magazine.

Hannah-Jones explains how, despite research studies showing the negative effects of racially segregated schools on children’s education and long-term success, Republican presidents since Eisenhower have appointed conservative Supreme Court judges who have whittled away at court-ordered integration plans until “legally and culturally, we’ve come to accept segregation once again.”

But lengthy presentations of statistical data and litanies of high court decisions tend to overlook places where the fight to uphold the vision of a pluralistic school system is still very much alive—places like Little Rock, where the fight is still going on. The fight is inflamed with the same themes from when Ike invaded the district; the belief that “separate would never be equal” and that deep divisions in society have to be overcome by intentional policy decisions.

But now, the actors have changed. This time, those being accused of segregating students aren’t local bigots. Instead, Little Rock citizens see segregation as being imposed upon them by outsiders, operating under the guise of a reform agenda.

In this conflict, the issue of local control—the cause Faubus and white Little Rock citizens held high in their fight against federal intervention—has been completely turned on its head, with the state government teaming up with wealthy allies to remove decision-making power from the community. And new entities, such as charter schools (publicly funded schools that are privately operated) and private foundations controlled by a small number of rich people, sow divisions in the community.

Once again, the fate of Little Rock’s schools is a test of principles that may be adopted nationwide; only this time, in an effort to divide communities rather than unite them.

‘We Are Retreating to 1957’

“Most people [here] have been escaping rather than preparing for how to confront a world that is becoming more diverse,” Arkansas State Senator Joyce Elliott tells me in a phone conversation. Elliott, who is black, is a Democratic member of the Arkansas Senate, representing the 31st District, which includes part of Little Rock.

The means of escape in Little Rock has changed over time, according to Elliott. Private schools enabling white flight from LRSD proliferated in the 1970s and ’80s. In addition, district leaders, pressured by wealthy white citizens, redrew attendance zones to separate neighborhoods and avoid busing, a practice still in use today.

As John Kirk and Jess Porter explain in an overview of Little Rock’s struggle with segregation appearing in the Arkansas Times, the city has been racially divided for decades by interstate highways, housing policies, and urban planning. Kirk and Porter, both history professors at University of Arkansas at Little Rock, note that segregation has been “consciously created by public policy, with private sector collusion.”

“We are retreating to 1957,” Elliott believes. Only now, instead of using Jim Crow and white flight, or housing and highways, the new segregationists have other tools at their disposal. First, education funding cuts have made competition for resources more intense, with wider disparities along racial lines. Second, recent state takeover of the district has spread a sense throughout the community of having lost control of its education destiny. Parents, local officials, and community activists continuously describe change as something being done to them rather than with them. And third, an aggressive charter school sector that competes with local public schools for resources and students further divides the community.

And lurking in the background of anything having to do with Little Rock school politics is the Walton Family Foundation, the philanthropic organization connected to the family that owns the Walmart retail chain, whose headquarters is in Bentonville, Arkansas.

A Struggle Over Resources

Arkansas is one of the many states that funds schools less than it did before the Great Recession. According to data compiled by the Center on Budget and Policy Priorities, between 2008 and 2014, school funding in Arkansas declined by more than 9 percent, while during those same years, student enrollment grew by 1.5 percent, according to the most recent measures and projections by the federal government.

Although the state’s economy has recovered somewhat from the downturn, the state’s politically conservative leadership continues to make cuts to public schools. The budget austerity is particularly harmful to schools that serve higher percentages of low-income children, as Little Rock’s does.

According to a district-by-district map of poverty rates created by EdBuild, an education finance reform consultancy, the Little Rock School District, and its adjacent North Little Rock neighbor, are tasked with educating some of the poorest students in the state, with poverty rates of 26.9 percent and 33 percent, respectively, compared to school districts surrounding them, where poverty rates are much lower, around 17 percent.

State budget cuts prompted a $40 million decrease in school spending in Little Rock in early 2015. Then, later that year, a federal judge overturned the state’s long-standing obligation to help fund Little Rock’s expenses for desegregation. The payments had amounted to more than $1 billion in 60 years. That additional cut helped prompt another round of spending decreases in 2016.

“We are constantly having our resources taken away,” Toney Orr tells me in a phone interview.  “Families with means are moving on” to higher wealth schools that surround the district. “But if you’re a family without means, you can’t move on,” he says.

Orr, an African American father of twin sons in the Little Rock schools, tells me the general lack of resources in the district is leading to a more segregated system as “power struggles between the haves and the have-nots” have intensified.

An article in The Atlantic cites from a lawsuit brought by Little Rock parents that found huge differences between resources in schools with very high percentages of black students versus schools that enroll mostly white students. School conditions and access to computers vary considerably, with schools that are mostly white students having newer, cleaner buildings and plentiful computers while schools with almost all-black and brown students are more apt to be in decaying and decrepit buildings with few computers.

“We have created the conditions for undermining the schools,” state senator Elliott says in describing the lack of resources in Little Rock schools, especially those serving low-income, non-white children.

For her part, Elliott has pushed for increases in education spending, particularly for a statewide early childhood education program for low-income kids and for dyslexia interventions in schools. Her Republican colleagues in state government tend to oppose these measures.

‘A Very Racist Decision’

Not only does Little Rock have fewer resources for schools, local citizens now have less say in determining how those resources are managed.

In January 2015, the state board of education, an appointed board whose members are selected by the governor, voted to take over the district, dissolve the locally elected school board, and hand authority over to a governor-appointed Education Commissioner.

The takeover, according to an Arkansas independent news outlet, was justified largely on the basis of a previous decision to designate six schools, including Hall High School, as academically distressed. The same news article quotes a Little Rock minister calling the state takeover, “a very racist decision.”

Why racist? State takeovers have been occurring for years, for many reasons, but “racial issues” have long cast a “cloud” over these actions, according to a report by Education Weekin 1998. That article quotes numerous sources who argue takeover efforts frequently have “singled out predominantly minority districts and violated the rights of voters to choose their local education policymakers.”

The reporter cites survey results showing “out of 21 districts that have ceded power to mayors or state agencies in recent years … all but three have predominantly minority enrollments, and most are at least 80 percent nonwhite. Of eight districts that have been threatened with takeovers, all but two have populations that are predominantly minority, and three are at least 93 percent nonwhite.”

More recently, the Alliance to Reclaim Our Schools (AROS), a national alliance of 10 community organizations and rights groups, published a report titled, ”Out of Control: The Systemic Disenfranchisement of African American and Latino Communities Through School Takeovers.” The report examined state takeovers of local schools in New Jersey, Louisiana, Michigan, Illinois, New York, and Pennsylvania and found takeovers consistently produce increased racial segregation and loss of public institutions in communities of color.

Earlier this year, AROS director Keron Blair, in an article in Think Progress, compared takeovers “in predominantly black and Hispanic neighborhoods to the voter ID laws that prevent many people of color from casting a ballot, saying they are both examples of distrusting people of color to govern themselves.”

Proponents of the takeover of LRSD deny race has anything to do with their actions, and claim that state takeover is simply about improving academics. But there are plenty of reasons to doubt this claim.

‘No Clear Evidence’: What Takeovers Don’t Do

“The rationale for the state takeover was never about academic distress,” says Arkansas State Senator Linda Chesterfield, who represents District 30 that includes part of Little Rock. In a phone conversation, she tells me that the Little Rock district—Arkansas’ largest—consists of 48 schools in all, some of which had been awarded for being the “most improved” schools in the state, including one of the schools deemed academically distressed.

Adding to Chesterfield’s suspicion is the fact that just 15 percent of the schools in Little Rock were judged to be in academic distress, while other districts have higher percentages of struggling schools. In Forest City, for example, three of the district’s seven schools have been labeled academically distressed. In Blytheville, the district’s only middle school and only high school are labeled academically distressed. And in Pine Bluff, the district’s only high school and one of the two middle schools are labeled academically distressed. Proportionally, Little Rock doesn’t even come close.

Whatever intentions drove the decision, an additional problem is this: state takeovers of local schools have rarely produced academic improvements.

A recent report, “State Takeovers Of Low-Performing Schools,” examines the track record of district and school takeovers in states that have employed this governance method the longest: Louisiana, Michigan and Tennessee. The report concludes, “There is no clear evidence that takeover districts actually achieve their stated goals of radically improving performance at failing schools.”

The report, by the Center for Popular Democracy, finds that wherever the state takeovers occur, “Children have seen negligible improvement—or even dramatic setbacks—in their educational performance.”

A ‘Sharecropper’ School District

What state school district takeovers can do very well, though, is disenfranchise local voters.

As Senator Chesterfield, who was a school board member before running for statewide office, explains, “With [elected] school boards, you have a person you can go to if you have a complaint.” But in a state takeover situation, “You can’t go to the state commissioner.”

“We’ve been turned into a sharecropper school district,” says Orr.

Orr’s reference is to the agricultural system that emerged in America’s post-Civil War Reconstruction period where white landowners, instead of giving up property to freed blacks, allowed former slaves to stay on the white man’s land as long as the black farmers—and some poor white farmers—turned over a portion of their crops each year to the owner.

In Orr’s sharecropper analogy, he likens state education commissioner Johnny Key to the landowner and the appointed superintendents that have churned through the system as the field bosses. In a sharecropper arrangement, “The landowner gave you what he thought you deserved,” Orr explains. And in the case of Little Rock, what the district seems to “deserve” is less voice in how the district is run.

The disenfranchisement of Little Rock citizens became especially apparent recently, when Commissioner Key suddenly, and without explanation, terminated the contract of Baker Kurrus, until then the superintendent of the Little Rock School District. (Key had originally appointed Kurrus himself.)

As veteran local journalist for the Arkansas Times Max Brantley explains, Kurrus was initially regarded with suspicion due to the takeover and the fact he was given the helm despite his lack of education background. But Kurrus had gradually earned the respect of locals due to his tireless outreach to the community and evenhanded treatment of oppositional points of view.

But many observers of school politics in Little Rock speculate Kurrus was terminated because he warned that charter school expansions would further strain resources in the district. Inadvising against expansions of these schools, Kurrus shared data showing charter school tend to under-enroll students with disabilities and low-income kids.

He came to view charter schools as a “parallel school system” that would add to the district’s outlays for administration and facilities instead of putting more money directly into classroom instruction.

“It makes no sense” to expand charter schools, he is quoted as telling the local NPR outlet. “You’d never build two water systems and then see which one worked … That’s essentially what we’re doing” by expanding charters.

Kurrus also came to believe that increasing charter school enrollments would increase segregation in the city.

“Kurrus amassed significant data illustrating that charter schools have tended to take higher income and white students from the LRSD … further segregating education,” Brantley reports. “Compared to the LRSD,” Brantley adds, “eStem and LISA [the predominant charter networks in the city] contain lower percentages of children who live in poverty, African-American and Hispanic students, English-language learners and special education students – all of which give the charters a strong demographic edge.

Because of the state takeover and subsequent firing of Kurrus, the citizens of Arkansas are “basically powerless,” says Kathy Webb, when it comes to governing their own schools.

“I don’t see a master plan for fixing the district,” says Antwan Phillips. Phillips is a Little Rock attorney and currently serves on an advisory board for the schools. (He was appointed by Kurrus.)

In a phone conversation, he tells me that if the district were a sick patient visiting a doctor, there would be some kind of diagnosis and prescription, yet none of that has been put forward by the state. And although there may not be a declared plan for Little Rock schools, the undeclared plan seems to call for rapid expansion of charter schools.

‘A Parallel School System’

Charter schools existed in Little Rock before the state took over the district. But many people in the city believe the purpose of the takeover is to expand these charters further and add new ones.

The two most influential charter networks in the city, eStem and LISA, both started before the state takeover but were recently expanded by the state oversight board, despite an outpouring of opposition from the community. The expansions will double student enrollment in both charter networks. A third charter school has been given a three-year extension despite “struggling academically,” according to a local reporter.

The takeover “is about money,” Chesterfield claims. She points to the district’s annual budgetof $319 million – the largest in the state – and asks, “Why else would LRSD become the focal point of charters” when there are other districts with higher percentages of struggling schools and other districts with significant achievement gaps?

There’s certainly not a lot of evidence that expanding charter schools will improve the overall academic performance of the district.

A report on the academic performance of charters throughout the state of Arkansas in 2008-2009 found, “Arkansas’ charter schools do not outperform their traditional school peers,” when student demographics are taken into account. (As the report explains, “several demographic factors” – such as race, poverty, and ethnicity, – strongly correlate with lower scores on standardized tests and other measures of achievement.)

Specifically in Little Rock, the most recent comparison of charter school performance to public schools shows that a number of LRSD public schools, despite having similar or more challenging student demographics, out-perform LISA and eStem charters.

There’s also evidence charter schools add to the segregation of Little Rock. Soon after the decision to expand these schools, the LISA network blanketed the district with a direct mail marketing campaign that blatantly omitted the poor, heavily black and Latino parts of the city, according to an investigation by the Arkansas Times.

The charter network’s executives eventually apologized for the selective mailing. In their apology, they admitted working with state education officials—the very people who are tasked with overseeing charter operations—on a marketing plan that relegated low-income households to digital-only advertising, which makes no sense because these homes are the least apt to have computers and Internet connections.

With so much evidence that charter schools are both underperforming academically and increasing segregation in Little Rock, it’s worth asking: why is this expansion happening?

What Walton Wants

What’s happening to Little Rock is “happening everywhere,” according to Julie Johnson Holt, a Little Rock resident with children who went through the public schools in the district.

Holt, who is white, now runs a public relations consultancy but is the former communications director for the Arkansas Attorney General and the Department of Education.

More specifically, what’s happening in Little Rock, according to Holt, is the outcome of a well-financed and strategically operated effort to target the community for large charter school expansions. “The charter movement has gotten very organized and very determined,” she observes.

Holt attributes much of the strategy and wealth behind the effort to expand charter schools in Little Rock to the Walton Family Foundation, whose influence “is much bigger than I realized” she says, recalling her days working inside state government.

Indeed, the Waltons’ influence features prominently in virtually every major decision concerning state governance of LRSD.

In the state board’s vote to take over the district, as Brantley reports for the Times, members who voted yes had family ties to and business relationships with organizations either financed by the Walton Foundation or working in league with the Waltons to advocate for charter schools.

In another recent analysis in the Times, reporter Benjamin Hardy traces recent events back to a bill in the state legislature in 2015, HB 1733, that “originated with a Walton-affiliated education lobbyist.” That bill would have allowed an outside non-profit to operate any school district taken over by the state. The bill died in committee when unified opposition from the Little Rock delegation combined with public outcry to cause legislators to waver in their support.

So what the Waltons couldn’t accomplish with legislation like HB 1733 they are currently accomplishing by influencing official administration actions, including taking out Kurrus and expanding charters across the city.

In one case, as Brantley reports again, a Little Rock charter is being expanded via the waiving of certain state requirements – thereby allowing the expansion to be “fast-tracked.”

Brantley notes the expansion is being enabled through relocation to a new, larger site in close proximity to an existing public school that is considered “struggling” but is actually higher-rated than the charter school by the state’s school evaluation system. The new site is owned by a leasing agent with an address “that happens to be the mailing address for Walton Enterprises, the holding company for the vast wealth of Walton heirs.”

Most recently, WFF announced it would commit $250 million to help charter schools in 17 urban district finance access to facilities. One of the urban districts Walton intends to target is Little Rock.

So what are Waltons’ intentions for Little Rock? Do they really want to re-segregate schools and take the community back to 1957?

In a recent investigative article I wrote on the influence of the Walton Foundation on education policy, I asked Jeffrey R. Henig what motivates the Waltons’ efforts. Henig is a political science and education professor at Teachers College, Columbia University and a co-editor of the book The New Education Philanthropy.

Henig believes the goal the Waltons have in mind is for school districts across the country to be more decentralized and for the expansion of charters to allow for “more variety” of schools, especially for schools that reflect “differing value systems or ideas of what is a good school.”

One of the “value systems” Henig believes the Waltons would like to see more accommodated in public education is more schools that are “rooted in conservative tradition.”

It’s not hard to believe that an accommodation of more conservative tradition in public education, especially in the South, is the same thing as what Senator Elliott calls “the Old Southern economic structure.”

She adds, “We know how that movie ends.”

It Doesn’t Have To Be This Way

Of course, the movie doesn’t have to end that way.

Arkansas state lawmakers can choose to bring education funding back to levels at least as generous as what was spent in 2008. The funding can be made more equitable by having in place distribution formulas that ensure money goes to schools that need it most.

Also, state leadership can choose to return control of LRSD to a locally elected school board and give people in Little Rock the power to determine the role of charter schools in the district.

And the citizens of Little Rock will need to choose whether to be further divided or unify in support of their historic public schools.

“I’d like to see people in Little Rock deliberately want to have children go to school together,” says Elliott.

There are signs Little Rock may be doing that. As Times reporter Hardy notes in his analysis cited above, there is a unified energy throughout all racial populations in the community to take back control of their schools.

“There’s been an awakening,” city director Kath Webb agrees, noting the number of Hall High School alums who now volunteer in the school to mentor and tutor students and support school events.

When people living around Hall High, where Webb lives, considered renaming the Hall High Neighborhood Association to something that didn’t include the school name, homeowners decided otherwise and retained Hall High.

And the school itself, despite being stigmatized with the label of “failure” and being redesigned around racial imbalance, has chosen to keep in its mission statement a commitment to being a place for “positive learning” and “diverse cultures.”

Political leaders in Arkansas should support that mission too.

This blog originally appeared on ourfuture.org on July 22, 2016.  Reprinted with permission.

Jeff Bryant is an Associate Fellow at Campaign for America’s Future and the editor of the Education Opportunity Network website. Prior to joining OurFuture.org he was one of the principal writers for Open Left. He owns a marketing and communications consultancy in Chapel Hill, N.C. He has written extensively about public education policy.

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Inside the Corporate Utopias Where Capitalism Rules and Labor Laws Don’t Apply

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UNDER CAMBODIAN LAW, THE RIGHT TO ORGANIZE IS SUPPOSED TO BE IRONCLAD.  No employer, government agent or citizen may impede union activity. Inside the walls of Cambodia’s largest special economic zones (SEZs), however, In These Times’ reporters saw a system designed to tightly control the workforce by keeping workers fenced in and unions out. More than a dozen workers and labor activists confirmed that, while it’s not easy to independently organize anywhere in Cambodia, the law is flagrantly violated in SEZs. The result is seething discontent.

Over the past 50 years, more than half of the world’s countries have carved out pieces of their territories to hand over to foreign investors as SEZs. The International Labor Organization (ILO) estimates that more than 66 million people—most of them young migrant women—work in the world’s more than 3,000 SEZs.

After World War II, countries from Ireland to South Korea set up these zones in bids to attract foreign capital and create jobs. In the 1980s and 1990s, states in every region of the world followed suit. Today this model is experiencing a fresh surge in popularity, with countries from Burma to Cuba racing to open new zones.

“Any country that didn’t have [an SEZ] 10 years ago either does now or seems to be planning one,” the World Bank’s Thomas Farole told The Economist in 2015. But while the success of such zones is often gauged by how much foreign money they attract, or how much economic growth they generate, the voices of the millions of workers that power these spaces are seldom heard. This is the story of SEZs from workers’ perspectives.

Typically, the carrots offered investors are special tax and tariff breaks, as well as cheap land, water and electricity. In some countries, such as Pakistan and Namibia, these enclaves also confer exemptions to national labor laws. But even when this is not the case, these zones have become hotspots for workers’ rights violations.

In Shenzhen, China, one of the world’s oldest and largest SEZs, In These Times witnessed the second chapter of the SEZ story. SEZs offer the tacit—if not explicit—promise of a steady supply of cheap, biddable labor. Once an SEZ’s workforce mobilizes and begins to make demands, companies can simply move on to a new frontier. The ILO calls SEZs “a symptom of the race to the bottom in the global economy.” In Shenzhen, factory closures and redevelopment are leaving migrant workers jobless, homeless and desperate.


Early SEZs, such as those established in the Philippines in the 1960s and 1970s, were “almost like labor camps,” says Jonathan Bach, associate professor and chair of the global studies program at the New School in New York. “They were separate from the cities: You would bring in the workers, you’d house them in dormitories, you’d sort of use them up and get rid of them and then get new ones. And then if the cost of doing business got too expensive, or too problematic—if there were protests or something—then you would just pack up and move somewhere else.”

This is still the model in many SEZs today. In some countries, governments have sweetened the pot by giving investors in these zones formal exemptions from national labor laws. In Pakistan, workers are forbidden to strike or take other industrial action in these enclaves. In Togo, government labor inspectors struggle to enter the zones because of laws restricting their access. The website of the Nigeria Export Processing Zones Authority declares: “There shall be no strikes or lock-outs for a period of 10 years following the commencement of operations in the zone … and any trade dispute arising within a zone shall be resolved by the Authority.”

But even where there aren’t these formal exemptions, local authorities in SEZs are regularly accused of turning a blind eye to labor rights violations.


On the outskirts of Phnom Penh, Cambodia’s capital, lies the Phnom Penh Special Economic Zone (PPSEZ). In a nation whose main development model is to sell itself as a reserve of cheap labor and low taxation, the PPSEZ exemplifies the new economy the government is trying to build.

The nine-mile drive from the capital is a crawl along chaotic roads that stand still for 20 minutes at a time. When you turn off the dusty street and head through the zone’s imposing front gate, you enter another world: 1.4 square miles of paved roads with factories fanning out on either side.

In These Times is the guest of the public relations firm Brains Communication, which represents PPSEZ to international investors and journalists. Brains Communication chauffeurs us in an air-conditioned Mercedes with leather seats, well-insulated from the 104-degree heat.

From the August 2016 Issue

This reporting was made possible by a grant from theLeonard C. Goodman Institute for Investigative Reporting. Victoria Albert contributed research.

Hiroshi Uematsu, CEO of Phnom Pen SEZ, stands outside his offices on April 4.

In keeping with the ethos of corporate control, the zone is not administered by the government but incorporated as a private company. We are going to meet Hiroshi Uematsu, the zone’s Japanese CEO.

PPSEZ’s founding mission was to attract Japanese investors to Cambodia, Uematsu says. Almost a decade later, it has succeeded in drawing 44 Japanese firms, as well as 32 companies from 13 other countries. Yamaha operates a factory there, and Coca-Cola is currently building one. Other factory names—garment manufacturer Kingmaker Footwear, diamond polisher Laurelton Diamonds—are obscure, but they are listed as suppliers or subsidiaries of some of the most famous brands in the world: Timberland, Puma, Apple, Old Navy.

Uematsu is happy in Cambodia. “I feel safe in this country,” he says. “I sometimes face [sic] directly with labor union activities … in the Philippines I have to be very careful, with smoked glass and security.”

Indeed, it’s hard to imagine a boss feeling unsafe in the pristine zone, where the chaos of the surrounding city gives way to an incongruous calm. Elsewhere in Cambodia, the landscape is very different. While we were talking to Uematsu, police clashed with about 100 protesters across town and left two activists with bad head wounds. The crowd amassed outside Cambodia’s National Assembly as it passed a new trade union law restricting independent labor organizing. The government of Hun Sen—the prime minister of Cambodia for the last 31 years, who runs a de facto one-party state under the Cambodian People’s Party—was spooked by a national strike in 2013 and moved to restrict this pole of political opposition.

Most of Cambodia’s labor force is represented by “yellow unions,” which are linked politically to the ruling party and effectively represent the government and employers, rather than workers. Cambodia’s bloc of independent unions is relatively small, but it scares Cambodia’s powerbrokers. Union leaders have been beaten, imprisoned on trumped-up charges and murdered. On January 22, 2004, Chea Vichea, the founder and leader of the Free Trade Union of Workers of the Kingdom of Cambodia and a supporter of the opposition Sam Rainsy Party, was shot in the head and chest while reading a newspaper in the street.

Garment workers gather just outside PPSEZ’s gates (L to R): Pich Sophal, 29; Sophen Leng, 29; Seng Sovirak, 26; Pheakdey Phom, 36; Sem Visal, 26.

When we return to the zone two days after our visit with its CEO, we’re traveling in a tuk-tuk with a translator from the Coalition of Cambodian Apparel Workers’ Democratic Union—an independent union group.

This time, we’ve come to meet five workers who were dismissed from the Evergreen garment factory inside the zone two years ago. The workers maintain the layoffs were retaliation. “They dismissed all the two unions’ members,” says one worker, Pich Sophal, 29, a former button-hole puncher at Evergreen.

While it is hard to organize anywhere in Cambodia, every independent union member who spoke with In These Times said it is even harder inside an SEZ.

“If the employer knows that I work for or am affiliated with the union, it means they will find any means to dismiss me,” says Sophen Leng, 29, who worked in Evergreen’s packaging department.

“After I was dismissed from Evergreen, I applied to work in another factory. The first contract is usually a short-term contract. They realized that I had union ties and dismissed me when the contract expired.”

Ou Tepphallin, deputy head of the Cambodian Food and Service Workers’ Federation, told us that SEZs also pose a challenge to independent unions simply by walling off workers.

“It’s not easy for a union leader or activist to go inside,” she says. “To coordinate [with workers], we need to make an appointment.” Even intercepting them after work is difficult, she says, because special buses wait outside the SEZ to take them to their homes.

Firing workers for organizing is illegal in Cambodia. So is hindering organizing efforts. In These Times identified eight multinationals whose products are reportedly made in Cambodian SEZs, including PPSEZ and Manhattan SEZ. Six, including Apple and Puma, have corporate codes of conduct supporting union rights.

Asked if they were aware of these apparent legal violations—and, now that they had been made aware, what they would do—only two responded by deadline. Skechers wrote that it complies with the factory operation guidelines of the Footwear Distributors and Retailers of America, which affirm the right to unionize. But it did not address any specific labor violations, and would neither confirm nor deny whether it manufactured goods in the Manhattan SEZ, as its profile on the GMAC website indicates. Levi Strauss denied that it sources products from SEZs, although a PPSEZ jeans factory lists Dockers, a Levi Strauss subsidiary, as a buyer.


According to a source in civil society consulted by lawmakers in the planning stages of the 2005 SEZ Act, the Cambodian government was initially trying to carve out exemptions from labor law. The source, who spoke on condition of anonymity, tells In These Times that lawyers “were approached by the Ministry of Commerce for technical advice and one of the things was, well, how can we make the zones union-free?”

Tola Moeun, executive director of the Center for Alliance of Labor and Human Rights, also in Phnom Penh, confirms the government was planning to exempt the zones from labor law: “No freedom of association, no freedom for collective bargaining and so on. No right to strike. But after the reaction from the unions, from the development partners, from the import countries—like Europe and the U.S. and so on—then the government stepped back their plan.”

Instead, with strict control of who can enter an SEZ and impunity for organizer layoffs, it seems Cambodia simply made them de facto union-free.


The obstacles to organizing have not stopped the rise of worker militancy in Cambodia. The main complaint is not working conditions—though some unions have demanded things like fans and clean water—but rather, low wages.

At the end of 2013, thousands of workers joined a national strike to demand a minimum wage increase from $85 to $160 a month. The government eventually increased the wage to $140 to staunch the uprising.

Sin Rlot, 39, a packaging worker, meets with organizers at a cafe just outside the walls of Manhattan SEZ on April 9.

One of the main foes of a higher minimum wage is the Garment Manufacturers Association in Cambodia (GMAC). In GMAC’s Phnom Penh offices, In These Times met with its famously irascible Secretary General Ken Loo, who believes the new minimum wage of $140 a month (which, for a 40-hour work week, works out to about 81 cents an hour) has already blunted foreign investment. The numbers indicate otherwise: According to World Bank data, foreign direct investment in Cambodia dipped slightly in 2013, then rose back to previous levels. The figures are not yet out for 2016, the year the wage hike went into effect.

“I don’t believe in a minimum wage; I believe in market forces,” says Loo. “Hardworking workers … could be earning a lot more, but … they have to subsidize the lazy bums.” He declined to say how much he is paid.

The so-called lazy bums tell a different story. “$140 a month is not enough for us, but we still do [it],” says Sokha Khan, a 36-year-old garment worker who supports her husband and children. Other workers tell In These Times that $140 a month is enough to cover one person’s living expenses, but not a family’s.

“If there was a union inside the factory, it would be good because we could demand something,” Sokha says.

It’s no accident that women are 95 percent of Cambodia’s SEZ workers. The Asian Development Bank, which promotes SEZs in the region, made explicit the logic of hiring women in a 2015 report: “It is said that females possess the nimble fingers and patience with routine tasks required by the labor-intensive processes generally occurring in the zones and that they are also less likely than males to strike or disrupt production in other ways.”

That logic does not always hold.


A four-hour drive east from Phnom Penh and across the Mekong River, on Cambodia’s eastern border with Vietnam, sits the region of Bavet. This area was the among the most bombarded in Operation Menu, the secret 1969-1970 campaign in which the United States dropped a greater tonnage of bombs than it had on Japan during the whole of World War II.

Now Bavet’s lush fields and wide roads are home to three huge SEZs. The Manhattan SEZ opened in 2006 and has been at the epicenter of worker actions—violent and nonviolent—ever since. There are no independent unions inside its gates, and without any organized channel for worker unrest, the place is a powder keg. We get through the gates by mentioning the name of the managing director of the SEZ whom we had emailed. He’s not there, but it’s enough.

Inside, workers walk down a long thoroughfare that cuts through the SEZ, some to take their lunch break outside, others on their way home. Everyone we stop is reluctant to speak—about their work, unions or the recent militant actions.

This conversation with Daly Cayva, a 34-year-old garment worker, was a typical one:

“Where do you work?”
“A garment factory.”
“How much do you get paid a month?”
“Between $140 and $150, based on the section I work in.”
“Is that enough to live on?”
“We can say it is affordable.”
“Are you a member of a union?”
“I don’t know about the union.”
“Wouldn’t a union make it better for you—you could get more money?”
“I don’t know about the union here.”
“Is it dangerous to join a union here?”
“I don’t know about that.”
“Is it dangerous for you to talk?”
“It is hot and I have to go home.”

Ath Thorn, president of the Cambodian Labor Confederation, is not surprised that no one wants to talk about unions. In February 2012, three women were shot at a protest for higher wages in the Manhattan SEZ. The incident happened in front of the Taiwanese-owned Kaoway Sports factory, whose clients include Puma. Since then, Thorn says, “They are really strict. Now they do not allow our union to organize over there.”

But making independent organizing impossible has had unintended results. “From time to time, this zone is very interesting,” says Thorn. “If they want to increase their salary, they mobilize without a leader and join together. If they want to do something now, they will strike in the whole zone. But when we are not allowed easy access inside, it’s not managed there, so violence happens during every protest.”

As worker grievances have fewer avenues of expression, and government crackdowns get harsher, many predict more explosions of frustration. Warehousing workers within walls only works for so long.


Although China didn’t open its first SEZ until 1980, its zones are among the most famous. Today, China contains as many as 40 million—almost two-thirds—of the world’s SEZ workers.

The Shenzhen SEZ, in southern China along the border with Hong Kong, was the country’s first. It was opened in 1980 by the leader of the Communist Party, Deng Xiaoping, as the leading edge of his sweeping economic reforms. Jonathan Bach notes that Shenzhen always had different ambitions than most SEZs: It was “more about importing particular ideas about the market and labor and capital, and using those ideas to influence the rest of the country.”

At the time, Shenzhen was a relatively small tract of land carved out of an otherwise rural area devoted to farming and fishing. Shenzhen has since expanded to cover almost 800 square miles. The megacity’s total economic output is equivalent to or greater than that of Ireland or Vietnam. Its tens of thousands of factories have produced millions of iPhones, handbags, jeans and more for export around the world.

Ath Thorn, president of the Cambodian Labor Confederation, at the offices of the Coalition of Cambodian Apparel Workers’ Democratic Union on April 5.

In 2010, Shenzhen celebrated its 30th birthday with fanfare and fireworks. China’s President Hu Jintao traveled to the city and hailed it as “a miracle.” Many of the policies pioneered there, like short-term labor contracts and performance-based wages, have since been rolled out nationwide. The SEZ model has been credited with driving China’s industrialization and explosive, manufacturing-based economic growth.

To entice foreign investors into Shenzhen, the central government gave the zone the power to set its own tax and other business incentives. But Shenzhen had something else to offer foreign firms looking for cheap places to make their products: a labor force of millions of migrants from rural China.

China’s hukou system of household registration, introduced in the late 1950s to curb urbanization, severely curtails these migrants’ rights. Hukou ties access to services, such as subsidized healthcare and education, to place of permanent residency. Migrant workers can rarely get that place altered.

To supply factories with a constant stream of labor, migrant workers were issued temporary resident permits—but only if they had a job. With their legal residency tied to their employer, losing their job meant exile—or a risky, undocumented existence. Anita Chan, a researcher at Australian National University, likens Shenzhen under the hukou system of the 1990s to apartheid in South Africa under the pass system.

Some factory bosses devised strategies to tighten the screws, requiring workers to pay “security deposits,” or seizing their identity documents. Many workers lived in housing tied directly to employment, in what Pun Ngai, a professor at Hong Kong Polytechnic University, has called a “dormitory labor regime.”

In the 1990s and early 2000s, Shenzhen became almost synonymous with sweatshop globalization, with reports of workers toiling incredibly long hours in unsafe factories to make things like Mickey Mouse books, Teletubbies and Reeboks. Wages were not necessarily lower inside the SEZ, but conditions were often dire. Mandatory and unpaid overtime were commonplace.

Workplace injuries have also scarred many of the migrants who powered Shenzhen’s boom. Huang Ming (a pseudonym), a 60-year-old migrant worker from western Guangzhou who came to Shenzhen in 1997, says that two years after his arrival, he was injured at work. “I was soldering tables and chairs and a spark went into my eye,” he says. “I have an official certificate, but … the company said, ‘If you want compensation, you have to resign.’”

Shenzhen is in a construction boom as factories close and financial towers rise.

The hukou system made it hard for workers in Shenzhen’s factories to fight back and secure better conditions, Chan says. But she doubts this was ever explicitly advertised to investors as a bonus for setting up shop. “They knew, they didn’t have to advertise. It doesn’t sound good. They were supposed to be socialists, you know.”

Since the 1990s, working conditions have improved across China, albeit slowly and unevenly. Hukou was “relaxed” in 2004 after the death in custody of a university graduate in the northern Chinese city of Handan who had been arrested for not having the proper papers. But the reforms only went so far, notes Chan. The arrests stopped, but “it doesn’t mean [migrants] can enjoy the same rights as the local residents.”

Wages increased, however, in part because the “one child” policy slowed population growth and reduced the surplus labor that powered the country’s manufacturing boom. Workers also became better organized and better educated about their rights, thanks largely to the tireless efforts of independent labor activists.

But migrant workers in Shenzhen face new challenges as the city pursues an aggressive agenda of “upgrading” into tech and finance. As wages increase, so does the cost of living in this increasingly flashy metropolis. Industrial areas are being transformed into office blocks. Whole neighborhoods where migrant workers have lived for decades are being demolished.

Clothing, toy and shoe factories, in particular, are moving from China to countries with lower wages, such as Vietnam and Bangladesh. Others are simply moving to provinces in inland China with lower minimum wages. In Shenzhen, reports of factories closing and bosses defaulting on paychecks have become commonplace.

The problem for Shenzhen now, says Bach, is no longer, “How do you get as many workers into Shenzhen as you can?” but rather, “How do you get the low-skilled workers demanding higher wages out?”

“Instead of the workers who used to do that lower-level work simply being retrained, you have companies just moving to wherever they can find that low-level work,” he says. “That’s the whole name of the game in the global economy: to play countries off one another. And the idea of the special economic zone was sort of to allow countries to have different jurisdictions, even within their own national jurisdictions.”

Chan gives the example of the iPhone manufacturer Foxconn—whose mercilous assembly lines infamously drove 14 workers to suicide—as a company “moving all over China, trying to get a better deal.” The practice is parallel to the way U.S. states have enticed factories with development deals and anti-union laws.

But wherever manufacturers move, they cannot expect workers to stay cheap and compliant forever.


In the 2000s, Shenzhen became a testing ground once more—this time, for surveillance technologies. The city installed 200,000 closed-circuit TV cameras in public spaces as a practice run for China’s Golden Shield program, a vast database that correlates video feeds with biometric data from cell phones and mandatory national ID cards.

Along the streets of Shenzhen today are too many surveillance cameras to count, rotating like roving eyes. Overhead, the skyscrapers shine at night in flashing, neon colors, bedecked with logos such as KFC, McDonald’s and 7-11. The effect is that of an eerie corporate utopia in which capital is wild and free, but people are heavily controlled.

Officially, the cameras are aimed at fighting crime. But Naomi Klein reported in Rolling Stone in 2008 that a Shenzhen-based company had already developed software to let “cameras alert police when an unusual number of people begin to gather at any given location.” Clearly, these measures could also be used to tighten control at a time of growing unrest.

In 2014, the China Labour Bulletin, an NGO based in Hong Kong, recorded more than 1,300 labor disputes across China. In 2015, that number rose to over 2,700—including more than one a day in Shenzhen and neighboring areas in Guangdong province. Many were prompted by factory closures, with workers accusing bosses of cheating them of full severance and social insurance payments.

In July 2015, more than 100 workers at a Shenzhen factory supplying the giant fast-fashion brand Uniqlo traveled to Guangzhou, the capital of Guangdong province, to petition Communist Party authorities. They said the factory had suddenly announced its closure and was leaving without paying its debts to workers. Shenzhen police were sent to retrieve the petitioning workers and bring them back to the SEZ, violently dragging them onto buses and detaining them for hours.

On May Day, In These Times met with workers who make eyeglasses for export to Europe and the U.S. at an enormous factory in Shenzhen’s Longgang district. First opened in the late 1980s, it is now closing as the area is “redeveloped” into offices and upscale apartments.

Huang Ming, the 60-year-old migrant worker from western Guangzhou, spoke with In These Times in the small one-room apartment he shares with his son, who also works at the factory. “Everybody in this building works there,” Huang says, sitting barefoot on the edge of the bed that takes up most of the space. Now that the factory is closing, Huang says he and many of his coworkers are forced into retirement.

If Shenzhen 1.0 was large-scale sweatshop industrialization, this is Shenzhen 2.0: a finance center where capital is king and migrant workers, having outlived their utility, are pushed out.

Later, we walk with Huang’s son Zai through the streets of Longgang. “It’s hard to get another job,” he says. “In this area they are not opening new manufacturing plants. Factories are being replaced by offices.”

Like everywhere else in the city, surveillance cameras are prominently in view in every direction—on the street, outside the factory, at the intersection, by the bus stop. We’re quite sure we’ve been on camera every step of the way.

“I’m not afraid of the government. I’m fighting for my rights,” Zai says firmly. But he adds that he’s still planning to leave Shenzhen and return to his home in western Guangzhou, because life as a migrant worker in the city, without a job, is impossible. “Many people are leaving.”

This reporting was made possible by a grant from the Leonard C. Goodman Institute for Investigative Reporting. Victoria Albert contributed research.  Matt Kennard wrote this article along side Claire Provst.

This post originally appeared on inthesetimes.com on July 25, 2016.  Reprinted with Permission.

MATT KENNARD AND CLAIRE PROVOST are fellows at the Centre for Investigative Journalism in London.


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Last Chance to Make Corporations Come Clean on Tax Havens

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Isaiah J. PoolePeople who want multi;national corporations to be held accountable for their tax-dodging tactics only have a few more hours Thursday to tell the Security and Exchange Commission to support a tough rule that would go a long way toward making that happen.

The SEC is soliciting comments until 11:59 p.m. Eastern time on a new business and financial disclosure rule that would require corporations to make public more information about their overseas subsidiaries.

This rule would affect the estimated $2.4 trillion in profits that corporations ranging from Apple to Walmart have shunted offshore in order to avoid paying U.S. corporate taxes. Right now, the rules for disclosing corporate use of offshore tax havens is, as the tax code itself, riddled with loopholes.

For one thing, companies are not required to report their tax liabilities on a country-by-country basis, so the public – including investors in these companies – have no way to accurately judge how a company is lowering its tax liabilities or what would happen if a country decides to radically change its tax policies. Nor do companies routinely report the names and locations of their subsidiaries; no one knew, for example, that Walmart had 78 subsidiaries in overseas tax havens, with $76 billion in assets, before researchers for Americans for Tax Fairness ferreted out the information.

Another Americans for Tax Fairness report found that the pharmaceutical company Pfizer was holding twice as much of its offshore profits in overseas subsidiaries as it was reporting to the public.

This lack of transparency does harm to investors – who should know details of how the companies they invest in are funneling their profits and the risks associated with their tax-avoidance strategies – and harms the public as a whole, which is shortchanged every time corporations game the system to avoid paying the taxes they owe.

That is why it’s important for people to take a few minutes now to tell the SEC to require corporations to tell the truth about their overseas subsidiaries. After all, expecting a corporation to be honest about how and where it earns its profits should not be too much to ask.

This blog originally appeared at OurFuture.org on July 21, 2016. Reprinted with permission.

Isaiah J. Poole worked at Campaign for America’s Future. He attended Pennsylvania State University and lives in Washington, DC.

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From New York to the Arab Gulf, Challenging Global Capitalism to Build Worker Power

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Over the past decade, the United Arab Emirates, Qatar and other Gulf States have started buying up franchises—and not just McDonald’s. These days the Gulf States are purchasing branches of universities like NYU and museums like the Guggenheim in New York City, part of peppering their societies with the “obligatory landmarks for the global investor class,” in the words of NYU professor Andrew Ross. Ross is part of a network of artists and university professors trying to change the absurdly onerous labor conditions facing guest workers in the Gulf.

In Qatar, while exact figures are disputed, perhaps over a thousand workers, mostly South Asians, have died during construction for the World Cup. Employers hold onto passports of imported laborers and deport them if they get too restive, drawing on the massive human well created by the agricultural misery of South and Southeast Asia.

Such penury (rural South Asia holds nearly half the world’s poor) contrasts sharply with the opulence of the Gulf. In the desert cities of the peninsula, air conditioned skyscrapers contain ski slopes. Sand islands, built by European engineering firms, rise up from the sea. Meanwhile, the rights of those constructing these towers and islands are nearly nonexistent.

This maltreatment, and the attempts to resist it, are the topic of The Gulf: High Culture/Hard Labor, edited by Ross, a lustrously illustrated chronicle of the efforts by the Gulf Labor Coalition to throw sand in the machinery of the repression and exploitation confronting guest workers in the Gulf.

This coalition and its offshoot, the Global Ultra Luxury Faction, have spent the last five years working from their location as mostly New York City-based artists to disrupt the extremely unequal status quo in the UAE.

They have—mostly fruitlessly—been attempting to negotiate on workers’ behalf with those helming the various cultural institutions setting up shop in the UAE, nearly all of which rely on migrant labor for building their facilities. The coalition has demanded living wages for imported workers, the benefit of freedom of association as well as bonuses for the workers to compensate for outrageously high debt burdens that nibble away at their wages, preventing them from sending money back to their home villages.

Such demands have been made to the Guggenheim leadership through letters, conversations, and petitions which have gone largely ignored. The chief success of the coalition has been raising the visibility of Gulf labor malpractice, “exposing the role played by museums in showcasing, laundering, and magnifying wealth accumulation among the ultra-luxury class” that dominates the modern art-world, as Ross writes.

The Gulf is a mostly useful account how the coalition has raised this visibility, including actions such as occupying the façade of the Guggenheim with a projection calling it a museum of the one percent, and leafleting and bugling within the museum.

But in mainstreaming this knowledge of human rights abuses, the book is not without tensions.

The inclusion of an opening chapter by Leah Whitson of Human Rights Watch (HRW) was a bad call. Whitson gushes over how the struggle of the artists and activists “has allowed us to find our own strength in globalization, where the interconnectedness of economies, businesses, and institutions has created opportunities for activists to press for accountability.”

Put to the side any general cynicism over HRW (it seems to exist largely to watch for human rights violations in countries the U.S. government is itching to invade, sanction, or let loose proxy armies against). Globalization has not precisely been a golden goose for South Asia, or at least its poorer segments. It was the globalization of U.S. agricultural expertise through the Green Revolution in South Asia which exacerbated the massive rural poverty which has led to workers migrating abroad. It seems, then, slightly worse than clueless of Whitson to praise such elite-driven interconnection of businesses and economies, since they are exactly what have produced the problems of economic dislocation in the first place.

Matters of class and power emerge far more forcefully in the excellent chapter by Paula Chakravartty and Nitasha Dhillon. The authors note that the Gulf is experiencing a metastatic capitalist growth amidst the post-2001 oil boom. But transnational capital and labor fluxes and flows are nothing new. As they show, in the 1970s and 1980s the Gulf countries were both very different and very similar to their current state. Newly awash in rivers of petrodollars from the quadrupling or more of oil prices throughout the 1970s, the countries began building booms.

They also began to bring in a lot of workers: Palestinians, Iraqis and Egyptians. These guest workers began mingling with the native Arab populations just as pan-Arab revolutionary nationalism was flourishing across the Gulf and westwards. A flurry of organizations emerged: the Popular Front for the Liberation of Bahrain, the Popular Front for the Liberation of Oman, and the Popular Front for the Liberation of the Occupied Arab Gulf. In Oman, cadre from these groups carried out a successful revolution in the 1960s and 70s.

Plainly, the Gulf States and their Western allies were not happy with this arrangement, and sought out a labor force sheared off linguistically and culturally from the Arab population. Enter the age of the South Asian guest worker. They flowed often from Kerala in India—a Communist stronghold in the country, where poor people have been far better off than in other regions. Other Indians from the country’s poorer regions, often those most devastated by the deteriorating national agricultural system, flowed to Kerala, filling the gap in the labor force left by expatriates working in the Gulf. Chakravartty and Dhillon speak with labor organizers in the region and elsewhere, showing the global nature of the system within which labor lurches from one country to another in search of better employment.

The authors in the chapter do an excellent—and vital—job of showing the United States’ centrality to Gulf capitalism. Such a perspective contrasts sharply with the rapidly growing mainstream literature, which lambasts the United States government for its relationship to Saudi Arabia but fails to note that this “special relationship” is not a U.S. error but a U.S. interest.

Saudi Arabia has supported U.S. proxies world-wide with money and arms. Ideology, finances and arms flows closely tie it to right-wing extremist groups from Pakistan to Palmyra. Since even the mainstream press is increasingly reporting on this phenomenon, many suggest that the U.S.-Saudi “special relationship” is a strategic error, the tomfoolery of the U.S. government acting against its own interests.

Chakravartty and Dhillon deftly avoid this dead-end. They show the absolute centrality of Saudi Arabia and the other Gulf states to U.S. foreign policy. In the process, they not only provide an effective analysis within which to understand the work of the Gulf Labor Coalition, but also note the challenge of having a “clear understanding that we are complicit in the conditions that force a worker to leave his or her home.”

The book also shows great awareness of the risks and challenges inherent in building a coalition spanning continents, meant to simultaneously challenge high-flying cultural institutions and to better the lives of workers across the world. In a way similar to the cultural boycott of Israel—and it is probably not a coincidence that many of the contributors to the book are also linked in some way or another to the efforts to boycott Israel—the book importantly touches on the “class” elements of cultural boycotts.

For example, Doris Bittar writes about the capacity of artists not merely to view themselves as part-and-parcel of the luxury art world, but frustrated laborers, whose work, like that of all laborers, is exploited by those with more power. The piece calls for a connection to the “labor movement [to] influence legislation that concerns artists [to] set compensation standards with museums, and [to] leverage them to support the communities that artists create.”

Bittar calls on artists and other cultural producers to understand their location as not merely that of leveraging relative social privilege to assist those with less power in the world. Instead, she identifies herself as not merely morally on the side of the powerless, but among those who are, at least from one angle, powerless in the current system. This perspective is less about Check Your Privilege and more about entering a joint struggle from different locations. In this case, the shared interest of poor artists like Bittar and poor workers in Qatar in challenging the capitalist system which oppresses both.

At the level of day-to-day politics, the book is teeming with useful perspectives and introspection on the role of artists in challenging this system. One wishes, though, that the editors had woven in a more consistent focus on the fundamental role of the U.S. government in propping up the Gulf states. From literally building up their infrastructure, to arms sales, to Gulf Cooperation Council investments in U.S. bonds and U.S. securities, the ties that bind the U.S. to the peninsula in the wake of the phased 1970s-era British withdrawal are many and deep. Many of these countries have made sure to carry out U.S. policies, from containing Iran to containing their own population, from spreading reaction and oppression from Tunisia, to Egypt and onwards.

So perhaps it would have benefited more, too, from a more sustained focus on the U.S.—not merely as a crucial enabler and beneficiary of this entire system, but an eventual pressure point and target for U.S. activists.

This blog originally appeared on inthesetimes.com on July 20, 2016.  Reprinted with Permission.

Max Ajl is a doctoral student in development sociology at Cornell University and an editor at Jadaliyyah.

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Embracing the New Populist Moment

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The Bernie Sanders campaign is the latest and largest wave of a rising populist tide, gaining force from the Occupy movement, the Dreamers, Black Lives Matter, the Fight for $15, the Wisconsin showdown, and more. The failure of the political establishment has been exposed, but the center still holds.

So what’s next? First, Sanders is right: Beating Donald Trump is vital to ensuring that bigotry and nativism do not poison and discredit the new populist moment. Once Trump has been defeated, the progressive movement should focus on defining issues and politics from the bottom up. The next movement waves—climate change, student debt, protests against systemic inequality and brutal policing—will continue to shake the establishment. Battles over these defining issues will deepen the understanding that there is an alternative. At the national level, this will start with a pitched battle over the Trans-Pacific Partnership in the lame-duck Congress, followed by challenges to the Wall Street–Washington revolving door in executive appointments, as well as skirmishes over real immigration reform, fair taxes, and rebuilding America.

In states and localities, the Sanders movement should join with insurgents in communities of color to drive real change—campaigns to establish a living wage; to save public schools; to make clean-energy, clean-water, and mass-transit investments, paid for by taxing the rich; and to enact sweeping criminal-justice reform. Those fights will set up insurgent candidates to challenge those standing in the way, from city councils to the statehouses to Congress.

Many flowers will blossom from the energy unleashed by the Sanders campaign. The Vermont senator would be well-advised to create a vehicle both to drive these defining-issue battles, and to identify and support Sanders Democrats up and down the ballot. Wherever possible, these Sanders Democrats should take control of state parties. Then we can begin to reshape how our democracy actually works.

This article originally appeared in The Nation as a part of its essay series, “We Still Need a Future to Believe In.”


This blog originally appeared in ourfuture.org on July 19, 2016. Reprinted with permission.

Robert Borosage is a board member of both the Blue Green Alliance and Working America.  He earned a BA in political science from Michigan State University in 1966, a master’s degree in international affairs from George Washington University in 1968, and a JD from Yale Law School in 1971. Borosage then practiced law until 1974, at which time he founded the Center for National Security Studies.

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Financial Transactions/Wall Street Speculation Tax Picks Up Steam

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Dave JohnsonThe idea of putting a small “Robin Hood” tax on financial transactions has been kicking around for a while, but in the last month the idea has picked up some real steam.

The Financial Transaction Tax (FTT), also called a “Wall Street Speculation Tax,” proposal asks for a small tax on financial transactions. Such a tax would slow down extreme speculation while raising money to pay for essential public services. The idea has been called a “Robin Hood Tax” because it takes from the rich. The FTT is a very tiny tax. Some proposals have suggested a tax of just three hundredths of a percent – a mere 30 cents on a $1,000 stock transaction.

This small tax would raise a lot of money, largely from automated “high-frequency trading.” This is an extreme practice of using computers to place extremely high volumes of stock orders at extremely high speeds, buying and selling the same shares sometimes in a fraction of a second. As much as half or more of all stock trading volume now comes from this high-speed trading. This practice makes extreme profits from a few traders but increases “volatility” (risk) in the market while doing nothing that benefits the economy.

A small FTT would make high-speed trading more costly, slowing it down while raising money for public services. For stocks, bonds and other financial transactions, the tax would be so small as to be practically unnoticed, while still raising significant sums because of the volume of trading.

An FTT has been endorsed by the 2016 Democratic Party Platform draft, which says:

“We support a financial transactions tax on Wall Street to curb excessive speculation and high-frequency trading, which has threatened financial markets. We acknowledge that there is room within our party for a diversity of views on a broader financial transactions tax.”

Hillary Clinton’s financial services reform proposal include a piece of the idea, applying it only to high-frequency trading:

Impose a tax on high-frequency trading. The growth of high-frequency trading has unnecessarily placed stress on our markets, created instability, and enabled unfair and abusive trading strategies. Hillary would impose a tax on harmful high-frequency trading and reform rules to make our stock markets fairer, more open, and transparent.

Bernie Sanders proposed an FTT on “high-speed trading and other forms of Wall Street speculation; proceeds would be used to provide debt-free public college education.” He hadalso supported previous FTT proposals, the 2011 and 2013 Harkin-DeFazio bills calling for a 0.03 percent tax on the sales of stocks and bonds.

A year ago Jared Bernstein explained the benefits in a New York Times op-ed, “The Case for a Tax on Financial Transactions,” writing:

An itty-bitty, one-basis-point transaction tax (a basis point is one-hundredth of a percentage point, or 0.01 percent) would raise $185 billion over 10 years… That would be enough to finance an ambitious expansion of prekindergarten programs for 3- and 4-year-olds and restore funding of college assistance for low-income students.

What’s more, a financial transaction tax could significantly reduce the amount of high-frequency trading.

… A one-basis-point tax on $1,000 worth of stock would cost the stock trader a dime. A $100,000 trade would generate a tax of only $10.

[. . .] 75 percent of the liability from the tax would fall on the top fifth of taxpayers, and 40 percent on the top 1 percent. The tax would also fall more on high-volume traders than on long-term investors, of course.

New DeFazio FTT Bill Introduced

This week Rep. Peter DeFazio (D-Ore.) introduced a FTT bill. His bill would raise $417 billion over 10 years, which could be used to fund national priorities like free higher education or job-creating infrastructure repair. At a news conference DeFazio said:

“Thanks to the reckless greed of Wall Street over the past few decades, the American economy is a grossly unbalanced playing field,” said Rep. DeFazio. “The only way we can level it is if we rein in reckless speculative financial trading and curb near-instantaneous high-volume trades that create instability in the stock market and our national economy. These financial practices have no intrinsic value, and exist to make a quick buck for already-wealthy speculators. If we want to give middle-class families a fair shot at a strong economy that works for all Americans, we need to put Main Street first.”

The legislation is supported by the Take On Wall Street Coalition. Learn more about the FTT/Wall Street Speculation Tax at the Take On Wall Street website.

This post originally appeared on ourfuture.org on July 14, 2016. Reprinted with Permission.

Dave Johnson has more than 20 years of technology industry experience. His earlier career included technical positions, including video game design at Atari and Imagic. He was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.

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This week in the war on workers: Temps win back a labor right stripped by Bush administration

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LauraClawsonUntil now, if temp workers wanted to unionize into the same bargaining units as permanent workers, both bosses—the one running the workplace, and the staffing agency “employing” the temps—had to agree. Which: Ha ha ha ha ha, yeah, no. That requirement dates back to the George W. Bush administration, of course, but now President Obama’s National Labor Relations Board has called for a return to an earlier standard:

In this new ruling from Miller & Anderson, Inc., the Board returns to a standard set in 2000, during the Clinton administration, in a case called M.B. Sturgis, Inc., which was overruled in Oakwood.

Under Sturgis, and now Miller & Anderson, permanent and jointly employed workers can negotiate in the same unit if they are employed by the same primary employer, and if they share a “community of interest.”

In a statement announcing the ruling, the NLRB said, “requiring employer consent to an otherwise appropriate bargaining unit desired by employees, Oakwood has … allowed employers to shape their ideal bargaining unit, which is precisely the opposite of what Congress intended.”

In short, this is undoing an obstacle in the way of workers organizing, taking a piece of power away from employers and giving it to workers. And it is, Erik Loomis writes, “why I have zero patience with anyone voting for Jill Stein.”


This blog originally appeared at DailyKos.com on July 16, 2016. Reprinted with permission. 

Laura Clawson has been a Daily Kos contributing editor since December 2006. Labor editor since 2011

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