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Conflicting Views on Pay It Forward

[ 81 ] July 11, 2013 |

Continuing with using this space as an opportunity to work out ideas of Oregon’s Pay It Forward proposal for higher education, I offer two conflicting views of the idea. Dave Dayen at Alternet offers a piece framing the law as a model not only for creatively thinking about solving higher education tuition problems, but also of grassroots democracy:

Dudley presented the Pay It Forward plan to her students, and they loved it. “It has great potential, especially when we’re facing such rising inequality,” Ariel Gruver said. “I know many people who want to go to school, but taking out loans is just not a viable option.”

The class enlisted the Oregon Center for Public Policy to help run the numbers, and brought in several speakers from the governor’s office and the state legislature to hear about the plan. One of them was Rep. Michael Dembrow, the chair of the House Higher Education Committee. He and his colleagues were increasingly aware of the explosion of student debt—“we were hearing it on the doorstep, in town halls,” he told AlterNet—and he wanted to advance legislation to creatively attack the problem. Dembrow proposed that at the end of the quarter the students present their findings and recommendations to a panel of legislators. This presentation became the final exam for the course.

After that, things moved swiftly. The Working Families Party put Pay It Forward at the top of their legislative agenda and began to buttonhole legislators of both parties. Dembrow held hearings on the plan and picked up a bipartisan group of sponsors. “At the first hearing,” says Dembrow, “when the guy from the Economic Opportunity Institute [John Burbank] said the plan derived from the work of Milton Friedman, suddenly the Republicans became more interested.”

After the class ended, the students became activists. They convinced Treasurer Ted Wheeler that his bonding proposal could be used to generate startup costs for Pay It Forward. Then students went to Salem to lobby the legislature. “It was almost surreal, from a student report, to go into lobbying,” said Tracy Gibbs, a class member. “In the first few meetings I just took a lot of notes, but I gained more confidence and it was really fun.”

Other students gave public presentations in their communities to build popular support. Ariel Gruver held one at Portland State with U.S. Senator Jeff Merkley. Speaking about the Pay It Forward plan, Merkley told AlterNet, “This bill is a terrific Oregon-born innovation. We must explore creative ways to make it affordable and realistic for all Americans to attend college.”

Dembrow believes the student advocacy was critical to the bill’s success. “That’s always the best form of advocacy, bringing it to a human level,” he said. “And it was very effective in this case.”

For those who believe in liberalism, this kind of move from class brainstorming to state law is a sort of ideal. The details of implementation remain sketchy though and what we do know doesn’t always make it look like such a great deal for students, which bothers Sara Goldrick-Rab of The Century Foundation. She notes several objections. It only covers tuition and fees, which means students might well have to take out additional loans for room and board. It doesn’t help the parents of students who are also carrying debt, often into retirement. The long-term debt repayment plan will quite possible mean significant interest payments. But I want to note one particular issue:

Oregon is getting a remarkable amount of praise for this plan, and undoubtedly its legislators are thrilled. The plan calls for the state to continue to invest in public higher education going forward, the part of the deal that is arguably most critical. But the real “pay it forward” in the plan is the goal that today’s students will create a “stable funding stream” for tomorrow’s students—relieving the state of the need to do so. Critically, the plan’s authors call it a plan of “shared responsibility.” Given that they are students, it is likely that they mean to imply that the state will do more to participate—but the state in this case may forecast the opposite—a willingness of students to do even more to pay for college themselves.

After all, Oregon has taken steps in recent years towards the privatization of public higher education. The share of general fund monies going to higher education in Oregon declined from 17 percent in 1997 to 5.8 percent in 2009. It is a laggard, falling in the bottom 20 percent of appropriations per FTE. Moreover, Republicans have endeavored to exert less direct financial oversight and administration of public universities in the state by altering the governance structure, which could lead to further cost escalation. But this isn’t unusual these days, as most states seek to justify their disinvestment in higher education and seek ways to take it further. What better evidence that the state could get away with doing even less for students than observing those same students agreeing to cover the costs themselves, out of their future income?

Lest this sound overly cynical, consider the case of Virginia, where the flagship university argued that by doing more itself, state support would increase. In fact, the more financial independence the university took on, the less support it got—students and families pay a larger fraction of college costs in the state than ever before.

The key here is that the Oregon plan requires students to pay their future income back to the state for decades to come—but does not obligate the state to continue its investment. This is unsurprising, since from their inception by economist Milton Friedman these “human capital contracts” have treated higher education as a private good. While the state may not raise the repayment percentage paid by current students, it can certainly increase it for future students—and it will have every incentive to, as long as public objections remain relatively quiet.

In other words, there is a possible dark side of the proposal getting insufficient attention: some Oregon legislators seeking to spend less on higher education may be supporting Pay It Forward in order to simultaneously quell public outrage about student debt, garnering positive media attention and votes, while also increasing the fraction of higher education costs paid by students and families.

There’s a reason Oregon Republicans support this plan after all.

In the end, I am still waffling on this idea. And I think that’s the proper position. Higher education funding is way too complex for any panacea, not to mention one that just came up a few months ago. It reminds me Gilded Age single-issue platforms for fixing everything like Henry George’s Single Tax or Bellamyism. I know we are desperate to fix the problem of student debt. But I want to be pretty bloody sure that an idea doesn’t hurt students in the long run before seeing states go whole hog into passing it.

Temp Towns

[ 58 ] July 11, 2013 |

I had missed this story at the time, but you need to read Michael Grabell’s Sidney Award-winning article on temporary work in modern America. Essentially, there’s an entire temporary work economy that has sprung up under our noses, even more so than I thought. Employers are simply refusing to hire workers in traditional arrangements any longer, offloading the risks of permanent employment onto employees and profiting richly.

The temp industry has lobbied for decades to expand their reach and pliant state legislatures have happily obliged:

Gradually, temp firms began moving into blue-collar work. At the end of the 1960s — a decade in which the American economy grew by 50 percent — temp agencies began selling the idea of temping out entire departments. Relying on temps only for seasonal work and uncertain times was foolish, the agencies told managers over the next two decades. Instead, they said companies should have a core of, say, five employees supplemented by as many as 50 temps, Hatton wrote.

The temp industry boomed in the 1990s, as the rise of just-in-time manufacturing drove just-in-time labor. But it also gained by promoting itself as the antidote to bad publicity over layoffs. If a company laid off a large portion of its workforce, it could make big news and leave customers feeling sour. But if a company simply cut its temps, it was easy to write it off as seasonal — and the host company could often avoid the federal requirement that it notify workers of mass layoffs in advance.

More recently, temp firms have successfully lobbied to change laws or regulatory interpretations in 31 states, so that workers who lose their assignments and are out of work cannot get unemployment benefits unless they check back in with the temp firm for another assignment.

While there may be cases where temporary workers make sense, this industry not only needs to be heavily regulated (which it is not), but most of these situations should be illegal and employers should have to hire full-time workers. BMW does not need temporary workers to staff the majority of its position in a car manufacturing plant. Those should be full-time workers. The majority of workers in a processing plant that a constant business with Wal-Mart should be full-time workers. There is simply no good reason the exploitation of poor people through temporary labor should exist. That most of this exploitative labor system targets at African-Americans and Latinos reinforces the structural racism flowing through American society.

As Grabell shows, while unions haven’t done much for temp workers, the law basically prevents them from doing so anyway. Temp agencies openly operate as union-busting institutions while untrained temp workers with no real rights on the job die at the workplace in easily preventable accidents. As we recreate the Gilded Age, it’s again going to take workers standing up for themselves in the face of great danger to their livelihoods (and possibly their lives) to eventually force corporate America to stop exploiting them. I’m not looking forward to another half-century of horrid labor struggles like the late 19th and early 20th centuries, but that’s realistically what we are facing. The American dream is dead for many Americans. The middle class is dead as well, although we are loathe to admit it. With each passing day, we move back to the Gilded Age, a terrible time in American history and in the American future.

This is the second in a series of articles by Grabell on temp work and I highly recommend the first as well, I highly recommend the first as well, on the exploitation of the transportation system that moves temp workers from place to place, which is both illegal and robs workers of wages.

UFCW to AFL-CIO

[ 23 ] July 10, 2013 |

Mike Elk reports that the United Food and Commercial Workers are returning to the AFL-CIO after 8 years with the insurgent Change to Win coalition. While this is inside baseball to people who aren’t intimately concerned with labor politics, it matters on a couple of levels. First, it moves organized labor back toward a more unified voice. Second, it isolates SEIU a bit. There’s really no reason for Change to Win to exist anymore. It now consists of SEIU, the Teamsters, and the remaining few members of the United Farm Workers. Since the Teamsters always go their own way anyway on these questions, this is really now just SEIU. No problem with SEIU going it alone, but Andy Stern’s vision for an alternative to the AFL-CIO is completely dead. Which is fine since it never did anything anyway. Third, it could mean greater federation support for the UFCW Wal-Mart campaigns, one of the highest profile struggles of the last year. That would be quite positive.

Clouding the Waters

[ 31 ] July 9, 2013 |

Tomorrow, something called the Global Alliance for Bangladesh Worker Safety is set to release its plan to improve working conditions in Bangladesh following the April fire that killed more than 1100 workers. Sounds great, right? We all want Bangladeshi worker safety improved!

Nope. It turns out this is a front group for Wal-Mart, Gap, JC Penney, Target, Sears, and other American retailers who are trying to avoid the real accord that actually could do something for worker safety, the Accord on Fire and Building Safety in Bangladesh. What’s more, the industry group is relying on the Bipartisan Policy Center, a centrist think tank funded in part by these very same corporations, to get the word out. Lee Fang has the story:

The Bipartisan Policy Center, however, has significant financial ties to the retailers they are assisting.

In its most recently published annual report, the Bipartisan Policy Center notes that the law firm Alston & Bird, one of Wal-Mart’s many registered lobbying firms, is among the organization’s corporate donors. Earlier this year, former Senator Blanche Lincoln (D-AR) registered as one of Wal-Mart’s representatives through the firm. Alston & Bird also represents the National Retail Federation, a trade group that counts many of the nation’s leading retailers as members.

Others affiliated with the Bipartisan Policy Center work for the retailers involved in the rival accord. The Bipartisan Policy Center’s “Democracy Project” advisors include former Senator Don Nickles (R-OK), who is now a lobbyist for Wal-Mart, as well as Don Fierce, founder of Fierce, Isakowitz & Blalock, a firm that helps the Retail Industry Leaders Association influence Congress. The RILA, yet another trade group supporting the alternative labor agreement, is led by a board that includes the CEOs of J.C. Penney and Wal-Mart.

In May, the Bipartisan Policy Center even received direct funding from Wal-Mart to sponsor an immigration policy event.

Wal-Mart’s financial links to the groups associated with the upcoming labor plan are a reminder of the corporation’s extensive political reach, which extends well beyond campaign contributions and other traditional forms of influence. As The Nation reported earlier this year, the company has ramped up efforts to co-opt civil rights groups and other advocacy organizations as they have pushed to expand their presence in urban centers. Wal-Mart has also won highly publicized support from the White House (including a partnership with Michelle Obama and a role in President Barack Obama’s push to hire veterans), while claiming victory on major legislative battles, from defeating sweeping federal labor reforms to credit card swipe fee legislation to the recent law to compel online companies to collect sales tax. At times, Wal-Mart’s aggressive public affairs approach has backfired. In June of last year, a lobbying firm working for Wal-Mart in the Los Angeles-area was caught sending a young staffer to pose as a reporter and gather information from labor activists at Wal-Mart affiliated warehouses.

Of course, the real benefit for these corporations is that such an action clouds the waters, confusing even people who do want to see working conditions improve in Bangladesh. Global capitalism relies on hiding the costs of production from consumers. It was seeing and experiencing these costs that helped spur the environmental and labor movements of the 20th century. Corporations fled to other countries precisely to get around new regulations that would affect the bottom line, however slight the dent in profits often was. The last thing the apparel industry wants is for American consumers to know the details of its responsibility for these deaths, not to mention the dumping of clothing dyes into watersheds, crushing labor unions, etc. By tapping into the politician-lobbyist network, it can even say that Democrats like George Mitchell and Blanche Lincoln give their approval. It makes it awfully hard for the average concerned person to know what’s going on. And that’s just how corporations like it.

Leave It to the Mining Companies to Bring the New Gilded Age In With Aplomb

[ 54 ] July 9, 2013 |

The mining industry has always loved violent labor intimidation, armed thugs, paramilitary operations against unions, and other fun parts of the Gilded Age we once thought we had left behind us. But with the new Gilded Age upon us, mining companies are happy to go old-school:

Heavily-armed, masked paramilitary forces descended upon the Gogebic Taconite mining site in Wisconsin over the weekend, much to the chagrin of local residents and elected officials.

“I’m appalled,” state Sen. Bob Jauch (D) told The Wisconsin State Journal on Monday. “There is no evidence to justify their presence.”

Jaunch sent a letter to Gogebic President Bill Williams on Monday demanding the company remove the guards, which he called “common in third world countries,” but stressed that “they don’t belong in Northern Wisconsin.”

The company brought in the paramilitary forces after being confronted by a group of about 15 protesters in June. At least one of the demonstrators, a young woman, was hit with misdemeanor charges for trying to take a camera away from one of the company’s geologists. Gogebic claims they’ve since caught several people illegally camping on their property and did not want to take any chances.

The company hired by Gogebic is Arizona-based Bulletproof Securities, which boasts that many of their employees are ex-military and many of their clients are celebrities and government officials. They certainly look the part, too: photos of Bulletproof guards at the Gegebic site published by the Wisconsin progressive blog Blue Cheddar show men who look very much like special forces soldiers, complete with assault rifles and black masks.

The protests against the iron mine revolve around the Chippewa, who have a reservation just to the north of the mine site, claiming that pollution from the mine will contaminate their land and destroy their wild rice beds, which really is even more perfect. The Gilded Age was also great for forcibly stealing resources from indigenous peoples so bringing that back would be an added bonus, right?

A couple of Wisconsin Democratic lawmakers have asked the corporation to remove the armed thugs, but you think the government of Scott Walker cares? Of course not.

Objections to Pay It Forward

[ 60 ] July 9, 2013 |

The Oregon legislature has passed its Pay It Forward bill, which creates an alternative model for funding higher education by students agreeing to pay a percentage of their post-graduation income back to the state. When I first heard about, I said I didn’t know what to think. It’s creative but also seems too easy. Matt Reed provides some objections to the plan that I think are worth noting:

- Obviously, in the interim between now and payback time, the state would have to pony up far more money than it currently does. Unless I misread the politics of it, that isn’t likely.

- The political impulse, over time, would be to phase out the state subsidy altogether, and to shift the entire cost burden to students. (Admittedly, this objection is vulnerable to “as opposed to…?”)

- Higher education would be subjected even more strongly than it already is to the vagaries of economic cycles. Since recessions hit the young hardest, and this tax would mostly hit people from their early twenties to their early forties, the hit to college budgets in recessions would be magnified.

- Students are stubbornly heterogeneous. (The positive term for that is “diverse.”) How would this work for part-time students? What about students who go back to college at age thirty? What about students who go on to graduate school and don’t make meaningful money for eight or ten years out? Transfer students? Students who repeat courses?

- Scholarships could become irrelevant. Why a state would want to replace privately donated money with its own is beyond me, but there it is.

- If you think financial aid is administratively complex now, just imagine verifying the income of graduates ten years out who have every incentive to lie. In the absence of some sort of unit record system, good luck with that.

- High-earning students would resent what they perceived as overpayment. (I’m told that this was the experience in Australia, which actually tried something like this.) Since high earning tends to correspond to high influence, I’d expect to see disgruntled high earners use their clout to minimize their obligations. To the extent that they succeed, they hollow out the cross-subsidy that would have paid for all those grad students and stay-at-home parents.

There are additional good points as well. Other points I’m less worried about. I am skeptical that most students who want to end up in wealthy fields will think ahead far enough to go out of state to avoid this plan–if they are planning that far ahead, they probably won’t go to the University of Oregon anyway. But I think this plan passed so easily in Oregon precisely because it was so vaguely sketched out. In the end, like everything, it’s going to take real choices by politicians who don’t like to make choices.

Edmund Morgan, RIP

[ 27 ] July 9, 2013 |

Edmund Morgan, the seminal historian of colonial America, has died at the age of 97. One of the five most important historians of the period in American history, Morgan’s books helped shape the field in the second half of the twentieth century. Among his most important books are American Slavery, American Freedom: The Ordeal of Colonial Virginia (which I used as the basis for my This Day in Labor History post on Bacon’s Rebellion), Visible Saints: The History of a Puritan Idea, and Inventing the People: The Rise of Popular Sovereignty in England and America. His last book was probably his most popular, an excellent biography of Benjamin Franklin.

….Although I don’t have a link, I understand from colonial historian friends commenting on Morgan’s death that his father was a radical lawyer who was on Sacco and Vanzetti’s defense team.

……Claire Potter has a really good piece on Morgan and the writing of history.

Michelle Rhee’s Organization: “They’ve Become Like the Gun Lobby in Tennessee”

[ 14 ] July 8, 2013 |

Jeff Guo has a good piece at The New Republic on how Michelle Rhee’s StudentsLast First organization has centered on Tennessee to push its anti-teacher union agenda. Yet despite the massive amount of money it and its corporate supporters have poured into Tennessee politics, they have received almost nothing to show for it. Tennessee Governor Jim Haslam hired Rhee’s ex-husband, Kevin Huffman, to run the state Department of Education. Rhee considers it her personal mission to crush Tennessee teacher unions and promote her own brand of corporatized education. But it turns out that the people of Tennessee resented huge amounts of money poured into local school board elections and began voting for opponents of the recipients of that largesse precisely because of it.

This hardly means Tennessee is going to become a pro-teacher union state. Probably some of Rhee’s insidious agenda will end up passing next year. What it does suggest is that Rhee has a very poor understanding of how politics actually work outside of Beltway board rooms and corporate fundraisers. In the end, money doesn’t always actually buy votes. Especially when it looks like your children are being used for an experiment.

Backlash to Debit Card “Paychecks”

[ 9 ] July 8, 2013 |

In the aftermath of all the attention paid to corporations like McDonald’s trying to recreate the Gilded Age through debit card “paychecks” that force workers to pay to get their own money, companies have begun backing off. At least some McDonald’s are now offering their workers a choice in how they receive their paychecks, while New York Attorney General Eric Schneiderman has launched an investigation of their use in his state, with the hopes for a bill outlawing them to pass the state legislature.

Time to Start Unwrapping

[ 121 ] July 8, 2013 |

Not even SEK can claim something like this, what with incredibly lame wingnut attempts at parody now including me as a central figure in their posts:

We’re having a giant girlfriend unwrapping party at the Asexual Alliance this week, y’all ought to think about coming out.

….In the last 24 hours, I’ve attended a Mexican League game and been parodied on a right-wing site. I really don’t see what goals there are for me to accomplish before I die.

When Leon Trotsky Agreed to Testify before the House Un-American Activities Committee

[ 29 ] July 8, 2013 |

In 1939, the reprehensible Martin Dies, chair of the House Un-American Activities Committee, invited one Leon Trotsky to testify before his committee on the evils of Joseph Stalin (PDF in link). Trotsky was happy to do so, although many communists and socialists were outraged and it forced Trotsky to defend his decision.

Unfortunately for the comedy/tragedy of history, Dies rescinded his invitation after it became clear that Trotsky was going to use the platform to call for an international workers movement against World War II. And soon after, Trotsky was no longer able to testify for much of anything.

The Final Five

[ 42 ] July 7, 2013 |

I’ve always dreamed of starting a grassroots campaign for Toronto Blue Jays reliever Steve Delabar for one reason or another. And now I have my chance. Of course, fans get to choose the final all-star. For some reason, all the attention this year is whether Yasiel Puig will be the choice in the NL. Not much about the AL. Maybe that’s because fans have the joy of deciding between 5 right-handed middle relievers for that spot, a situation I am sure really excites Bud Selig and the marketing team of MLB. The candidates are actually quite good–Delabar, Joaquin Benoit, David Robertson, Tanner Scheppers, and Koji Uehara. Who would I vote for? Who cares. Certainly not Tanner Scheppers because of his terrible first name, not that it is his fault. I mean really, shouldn’t there be national counseling to expectant parents on the names they give their children.* Maybe Koji Uehara as a reminder to all Rangers fans what a great trade their team made in giving up a washed-up first baseman named Chris Davis for him a couple of years ago. Wonder what happened to that guy?

In other baseball news, I will be attending a Mexican League game tonight. I look forward to extreme awesomeness. I understand there are cheerleaders.

* This reminds me of a Rangers game I was at a few years ago. These racists behind me were making fun of the names black and Latino people give their children. It was very eye-rolling, very Texas. I remember especially them really laughing at the name of offensive linemen D’Brickashaw Ferguson. In these situations, I tend to hold my tongue and just keep listening for future story fodder, but my brother was getting really agitated. Then these racists called out to their daughter who was running around. Her name? Shiloh. I about doubled over laughing. You named your girl after a Civil War battle and you are making fun of black people? Then I remembered that they were racists and I was in Dallas. Good times. Good times.