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Don’t Let Government Get Its Hands on Healthcare

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According to Paul Krugman, that’s the unofficial rallying cry of the conservative opposition to health care reform. Across the country, much of the oxygen in the debate is sucked up by the tragic irony of Medicare recipients speaking out against a government takeover of health care. If the misinformation swamps our chances of overhauling the system, it will be an unmitigated disaster.

Yet it’s only the most vivid example of how too many Americans are blinded by anti-government ideology to the basic facts of how the nation’s economic and political system functions. And nobody says it better than Krugman. In his column on Monday, the economist pointed out that the very “government meddling” denounced on the right appears to have saved the economy from the worst of the economic crisis. Yet as Krugman has argued in the past, we could potentially be in much better economic shape than we are today – with hundreds of thousand fewer people out of work, for example – if we had disregarded calls to limit the size of “government meddling” and enacted a larger and more effective stimulus in the first place.

This ain’t just about Paul Krugman, perceptive though I think he is. Nor is it simply about the big national debates on health care and economy. Again and again, good, even necessary public policy smacks up against public ignorance about the way government is already deeply and intrinsically involved in structuring markets that are made to appear “free” of interference. Clear-eyed libertarians can argue that we’d be better off with a self-sustaining, self-regulating free market. The distortion comes in when we imagine that unobstructed free markets brought us the benefits we enjoy today.

Consider a point John Petro illustrated a few weeks back, in which investing in mass transit and changing land use policies gets painted as intolerable government coercion. In effect, spending public money to extend new roads, new sewer lines, new electric wiring and emergency services to areas on the exurban fringe is invisible, but public investment in light rail shows the long arm of big government. Similarly when a municipality makes a zoning ordinance that permits only large lots with single family homes in a given area, that’s the free market. If zoning regulations are altered to permit condos or mixed-use buildings, suddenly the government has “interfered.”

The same dynamic was at work from very rise of the modern American right in the suburbs of Orange County, California, where communities that owed their existence and day-to-day economic prosperity to lucrative government defense contracts, infrastructure spending, and federally insured home loans nevertheless launched contemporary conservatism with a fierce opposition to taxes and other manifestations of what they saw as unwarranted government interference in their apparently “self-made” lives.

Ideology neatly obscured the extensive public subsidies underlying ostensibly private success. It continues to do so today, preventing us from asking the genuinely relevant questions: not whether we should have government involvement, but which public actions will most effectively promote broad-based prosperity, helping to strengthen and expand the American middle class in both the short and long-term. Starting with this question helps us to evaluate whether aid to homeowners makes more sense than a bank bailout, for example, or whether food stamps make better stimulus than tax cuts. It makes it harder to distinguish between government action that lifts us all up and policy that benefits the few.

Amy Traub: Amy Traub is the Director of Research at the Drum Major Institute. A native of the Cleveland area, Amy is a Phi Beta Kappa graduate of the University of Chicago. She received a graduate fellowship to study political science at Columbia University, where she earned her Masters degree in 2001 and completed coursework towards a Ph.D. Her studies focused on comparative political economy, political theory, and social movements. Funded by a field research grant from the Tinker Foundation, Amy conducted original research in Mexico City, exploring the development of the Mexican student movement. Before coming to the Drum Major Institute, Amy headed the research department of a major New York City labor union, where her efforts contributed to the resolution of strikes and successful union organizing campaigns by hundreds of working New Yorkers. She has also been active on the local political scene working with progressive elected officials. Amy resides in Manhattan Valley with her husband.

This article originally appeared on DMI Blog on August 11, 2009 and is reprinted here with permission from the author.


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How to Get Work-Life Balance

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Workers are parents. Workers are caregivers for their elderly and disabled adult loved ones. And yes, workers get sick sometimes and have to stop working and take care of themselves. The question is when our workplaces are going to acknowledge these all-too-obvious facts and provide basic benefits that let working people handle their non-work lives without going broke.

The answer, of course, is that we get what’s known as “work-life balance” or “family-friendly” benefits – like paid sick days, paid family and medical leave, and child care benefits – when we oblige employers to give them to us. Employees with in-demand skills do that now, and the good news is, employers are generally not scaling back workplace flexibility policies during this recession. (See this new study from the Families and Work Institute for the first piece of good employment news I’ve read in a while.)

But what about the rest of us? We’ve got two complementary and mutually reinforcing ways to make sure the boss lets Daddy stay home with Sally when she gets the flu. The first is government regulation: in recent weeks, I’ve made the case that the nation should set up a national system of paid family leave insurance and mandate that employers provide paid sick days.

The second way to ensure that our work lives give ground when necessary to the exigencies of the rest of our lives is to organize a union and put family-friendly benefits on the bargaining table. A recent report by the UC Berkeley Center for Labor Research and Education and the Labor Project for Working Families highlights the effectiveness of this approach. Among the findings:

* Union workers are more likely to receive fully paid and partially paid family leaves than their non-union counterparts.

* Union workers are more likely to have paid sick days, and to have paid time off they can use to care for sick children.

* Union workers are more likely to have child care benefits, from referral services to dependent care reimbursement accounts.

* Companies with a unionized workforce are five times more likely to pay the entire family health insurance premium, and when union employees do have to pay part of the premium themselves, they are responsible for a smaller share.

* Unions can even increase access to benefits that are mandated by law for a much wider range of workers. For example, although the federal Family Medical Leave Act has guaranteed unpaid, job-protected leave for many workers at large companies for over 15 years, surveys suggest that many employees still don’t realize they have this right. Others are too afraid to use the leave they’re entitled to. But, as the report explains, unions “educate members on what their workplace rights are and how to exercise them; they monitor the workplace and ensure that policies and rights are being enforced; and they protect workers from retaliation when they exercise their rights.”

As the last example suggests, unionization and government action complement each other, with public policy granting protection to a broader range of working people, and unions increasing the ability of their members to fully exercise the rights they’re given by the law. More of us will get more balance in our work and lives if the nation pursues both routes aggressively: make it easier to join unions while also fighting for paid leave and other “balance” policies for everyone. Since unions themselves are among the most dedicated advocates of regulations providing family-friendly benefits for all employees, these strategies are also mutually reinforcing.

Amy Traub: Amy Traub is the Director of Research at the Drum Major Institute. A native of the Cleveland area, Amy is a Phi Beta Kappa graduate of the University of Chicago. She received a graduate fellowship to study political science at Columbia University, where she earned her Masters degree in 2001 and completed coursework towards a Ph.D. Her studies focused on comparative political economy, political theory, and social movements. Funded by a field research grant from the Tinker Foundation, Amy conducted original research in Mexico City, exploring the development of the Mexican student movement. Before coming to the Drum Major Institute, Amy headed the research department of a major New York City labor union, where her efforts contributed to the resolution of strikes and successful union organizing campaigns by hundreds of working New Yorkers. She has also been active on the local political scene working with progressive elected officials. Amy resides in Manhattan Valley with her husband.

This article originally appeared at DMI Blog and is reprinted here with permission from the author.


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Deal or No Deal on Union Contracts

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People want to join unions because it enables them to negotiate for better wages, better working conditions, and, ultimately, a better standard of living.

As I’ve argued in the past, the U.S. needs to reform the arduous course of forming unions in order to rebuild the American middle class. But we also need to focus on the process of negotiating itself. Recent research by Dr. Kate Bronfenbrenner at Cornell University finds that employers frequently continue the campaign of delays and intimidation that lead up to union elections during the negotiation of the union’s first contract. As a result of employers’ often illegal refusal to bargain in good faith, more than half of workplaces still lack a collective bargaining agreement a full year after a union is elected. In 37% of workplaces, there is still no contract two years after the union election. For one in four workplaces, there is still no contract more than three years out. If unions are effectively blocked from achieving anything on their members’ behalf, there is little point in forming a union in the first place.

This discouraging record of contract negotiation explains why the Employee Free Choice Act not only makes it easier to organize a union, but includes measures to ensure that employees and management agree on a first contract swiftly. Under EFCA, if negotiations on a first contract drag on for 90 days without being resolved, either the union or management can refer their dispute to a federal mediator. If the mediator is unable to reach a deal within an additional 30 days, the dispute will go to binding arbitration with the arbitration agreement binding for two years.

While the Drum Major Institute has been strongly critical of binding arbitration in cases where individual employees or consumers face larger and better equipped corporate opponents on what amounts to an uneven playing field, the process is more likely to produce a fair result when unions and companies meet each other as equals over the bargaining table. Indeed, a recent Economic Policy Institute summary of how first contract arbitration works in Canada observed that “with the guarantee of a contract at the end of the process, both sides would focus on actually negotiating instead of stalling or filing unfair labor practices charges.”

When both working people and their employers genuinely aim to come to an agreement about workplace issues, collective bargaining can be a democratic and rational process. Reforming the rules to make mediation and arbitration an option for first contracts will help to ensure that good faith negotiations carry the day.

Amy Traub: Amy Traub is the Director of Research at the Drum Major Institute. A native of the Cleveland area, Amy is a Phi Beta Kappa graduate of the University of Chicago. She received a graduate fellowship to study political science at Columbia University, where she earned her Masters degree in 2001 and completed coursework towards a Ph.D. Her studies focused on comparative political economy, political theory, and social movements. Funded by a field research grant from the Tinker Foundation, Amy conducted original research in Mexico City, exploring the development of the Mexican student movement. Before coming to the Drum Major Institute, Amy headed the research department of a major New York City labor union, where her efforts contributed to the resolution of strikes and successful union organizing campaigns by hundreds of working New Yorkers. She has also been active on the local political scene working with progressive elected officials. Amy resides in Manhattan Valley with her husband.

This article originally appeared on DMI Blog and is reprinted here with permission from the author.


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Labor “Solutions”

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“Our clients receive happy, appreciative employees that will thank you for allowing them the opportunity to work for you,” boasted Kansas City staffing company Giant Labor Solutions. Contract for workforce needs with their company and “your recruiting, hiring, and payroll expenses will dramatically drop.”

What a pity trifles like alleged racketeering, forced labor trafficking, wire fraud and money laundering can come between employers and a cheap, compliant workforce.

As Thomas Frank describes the federal charges against Giant Labor in a recent Wall Street Journal column:

“The Kansas City ring recruited hundreds of workers from Jamaica, the Philippines, and the Dominican Republic with promises of visas through the federal H-2B seasonal worker program. To get the process started, however, the indictment says that workers had to pay the accused racketeers hefty fees.

“Once in America, the workers found themselves at the mercy of the traffickers, who allegedly kept “them as modern-day slaves under threat of deportation,” in the words of James Gibbons of Immigration and Customs Enforcement. The recruiters apparently took care to keep the workers in debt, charging them fees for uniforms, for transportation, and for rent in overcrowded apartments. Paychecks would frequently show “negative earnings,” in the words of the indictment. And if the workers refused to go along with the scheme, the traffickers held the ultimate trump card, the indictment claims: They “threatened to cancel the immigration status” of the workers, rendering them instantly illegal.”

The situation vividly illustrates the perils of guest worker programs. But it’s not only the trafficked immigrants who lost out at Giant Labor.

The exploited laborers primarily worked on hotel housekeeping staffs, cleaning rooms. According to the Bureau of Labor Statistics, they shared the occupation with more than 400,000 U.S. workers in 2008, making a national median wage of $9.13 an hour. It’s not hard to imagine that hotel owners might not ask too many troublesome questions when a company like Giant Labor stepped in with a deal to slash their labor costs. But neither is it hard to conceive the impact of those lower wages and miserable working conditions on other hotel employees trying to get by on what is already a poverty wage for families.

But if we can drag hotel workers down, we can also raise them up. In the New York City metro area, for example, housekeepers average $15.30 an hour and many get full family health benefits. The reason, of course, is the high unionization rate in the area’s hotel industry, which pushes even non-union hotels to offer competitive pay and benefits to prevent their most efficient employees from leaving – or worse yet, organizing a union of their own.

The nation faces a stark choice when it comes to hotel work, or any other employment. We can pass the Employee Free Choice Act, and watch a wave of union organizing lift workers throughout the country. Or we can expand guest worker programs and stick with a status quo where Americans compete for work with millions of undocumented workers with no effective rights on the job. You can bet hotel employees in Kansas City will feel the difference.

About the Author: Amy Traub is the Director of Research at the Drum Major Institute. A native of the Cleveland area, Amy is a Phi Beta Kappa graduate of the University of Chicago. She received a graduate fellowship to study political science at Columbia University, where she earned her Masters degree in 2001 and completed coursework towards a Ph.D. Her studies focused on comparative political economy, political theory, and social movements. Funded by a field research grant from the Tinker Foundation, Amy conducted original research in Mexico City, exploring the development of the Mexican student movement. Before coming to the Drum Major Institute, Amy headed the research department of a major New York City labor union, where her efforts contributed to the resolution of strikes and successful union organizing campaigns by hundreds of working New Yorkers. She has also been active on the local political scene working with progressive elected officials. Amy resides in Manhattan Valley with her husband.

This article originally appeared in DMI Blog on June 23, 2009. Re-printed with permission by the author.


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Minimum Wage Raises Us All

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Over the past few weeks, I’ve explored a variety of proposals for additional federal stimulus measures. The federal government could make greater investments in repairing public infrastructure; fund the construction of affordable housing; extend tax credits to employers who increase employee health coverage; provide incentives for states to expand access to food stamps, welfare, and Medicaid; or even create a mass public jobs program. So far, none of those proposals is in the cards. But one overlooked recovery measure is already underway: the minimum wage increase scheduled for July 2009.

A new research brief from Kai Filion at the Economic Policy Institute highlights the stimulative impact of raising the minimum wage.

Remember that back in 2007, Congress obliged President Bush to sign a long-delayed minimum wage increase into law by attaching it to a must-pass war appropriations measure. After ten years in which the value of the minimum wage was continuously eroded by inflation, Congress raised the minimum from $5.15 to $5.85 an hour in 2007. In 2008, it went up to $6.55. Next month, it’s headed up to $7.25. And the economy is benefiting. So far, minimum wage increases have generated $4.9 billion in spending according to Filion, while the next increase will produce $5.5 billion in additional spending. As Filion succinctly explains “by increasing workers’ take-home pay, families gain both financial security and an increased ability to purchase goods and services, thus creating jobs for other Americans.”

The issue brief also takes on the most familiar minimum wage misconception – that raising pay inherently means increasing unemployment. Surveying a bevy of recent studies that have failed to detect significant increases in unemployment when the minimum wage rises, the issue brief considers factors like improved productivity, better employee retention and the stimulative effect of increased spending which may help explain why, in practice, jobs don’t disappear when low pay gets a mandatory boost.

The minimum wage increase all queued up and ready for July is good news, but of course there’s more policy work to be done. During the campaign President Obama pledged to seek an increase in the minimum wage to $9.50 by 2011, a measure that would provide great additional stimulus if the first steps began soon. Add that to the stimulus policy wish list.

About the Author: Amy Traub is the Director of Research at the Drum Major Institute. She received a graduate fellowship to study political science at Columbia University, where she earned her Masters degree in 2001 and completed coursework towards a Ph.D. Funded by a field research grant from the Tinker Foundation, Amy conducted original research in Mexico City, exploring the development of the Mexican student movement. Before coming to the Drum Major Institute, Amy headed the research department of a major New York City labor union, where her efforts contributed to the resolution of strikes and successful union organizing campaigns by hundreds of working New Yorkers. She has also been active on the local political scene working with progressive elected officials. Amy resides in Manhattan Valley with her husband.

This article originally appeared in the DMI Blog on June 11, 2009. Re-printed with permission by the author.


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