Five reasons why democracy hasn’t fixed inequality

One of the most longstanding hopes (on the left) and fears (on the right) about democratic politics is that voters of modest means will use their electoral weight to level the economic playing field. In a market economy, the median voter’s income will invariably be below the national average creating an apparently compelling opportunity for a politics of redistribution. This makes the sustained increase in income inequality in the United States and other developed countries a bit of a puzzle. One common suggestion, offered recently by Eduardo Porter in The New York Times, is ignorance. Voters “don’t grasp how deep inequality is.”

But while Americans understanding of economic trends is certainly imperfect, the data suggest that the broad trends are known to the population. Nathan Kelly and Peter Enns, for instance, find that when asked to compare the ratio of the highest paid occupation and the lowest, Americans at the bottom of the income distribution do believe inequality is high and rising. In 1987, Americans as reported that the highest-paid occupation took home 20 times what the lowest paid occupation did – by 2000, they thought the gap had grown to 74 times.

A recent Pew survey finds that 65% of adults agree that the gap between the rich and everyone else has increased in the past 10 years, only 8% say it has decreased. A Gallup poll from earlier this year suggests that 67% of Americans report that they are either “somewhat” or “very” dissatisfied with the income and wealth distribution in the U.S.

If ignorance doesn’t explain inaction, what does? These five factors are the most important culprits:

1) Upward mobility

(Sean McElwee, data from Engelhardt & Wagner)

(Sean McElwee, data from Engelhardt & Wagner)

According to research from Carina Engelhardt and Andreas Wagner, around the world people overestimate the level of upward mobility in their society.

They find that redistribution is lower then when actual social mobility is but also lower where perceived mobility is higher. Even if voters perceive the level of inequality correctly, their tendency to overstate the level of mobility can undermine support for redistribution. In another study Alberto Alesina and Eliana La Ferrara find that, Americans who believe that American society offers equal opportunity (a mythology) are more likely to oppose redistribution. Using data from 33 democracies, Elvire Guillaud finds that those who believe they have experienced downward mobility in the past decade are  32% more likely to support redistribution. A relatively strong literature now supports this thesis.

2) Inequality undermines solidarity

Enns and Kelly find, rather counterintuitively, that when “inequality in America rises, the public responds with increased conservative sentiment.” That is, higher inequality leads to less demand for redistribution. This is perhaps because as society becomes less equal, its members have less in common and find it less congenial to act in solidarity. Bo Rothstein and Eric Uslaner argue that, “the best policy response to growing inequality is to enact universalistic social welfare programs. However, the social strains stemming from increased inequality make it almost impossible to enact such policies.”

As inequality increases, the winner-take-all economy leads voters try to look out for their own children. The period during which overall inequality has risen has seen a massive increase in more affluent families’ spending on enrichment for their own children.

(Sean McElwee, data from Lars Osberg)

(Sean McElwee, data from Lars Osberg)

Chris Dillow points to research by Klaus Abbink, David Masclet and Daniel Mirza who find in social science experiments that disadvantaged groups are more likely to sacrifice their wealth to reduce the wealth of the advantaged group when inequality was lower than when it was higher. Kris-Stella Trump finds that rising inequality perpetuates itself, noting that, “Public ideas of what constitutes fair income inequality are influenced by actual inequality: when inequality changes, opinions regarding what is acceptable change in the same direction.”

3) Political misrepresentation

Ideological factors can’t tell the whole story. Many Americans support redistributive programs like the minimum wage and support for the idea that hard work leads to success has plummeted in the last decade. A further important reason for the lack of political response to inequality relates to the structure of American political institutions, which fail to translate the desires of less-advantaged Americans for more redistribution into actual policy change. Support for this thesis comes from many corners of the political science field, including Martin GilensDorian WarrenJacob HackerPaul Pierson, andKay Lehman Schlozman. Research by five political scientists finds that status quo bias of America’s often-gridlocked congress serves to entrench inequality.

More simply, lower-income Americans tend to vote at a lower rate. William Franko, Nathan Kelly and Christopher Witko find that states with lower turnout inequality also have lower income inequality. Elsewhere, Franko finds that states with wider turnout gaps between the rich and poor are less likely to pass minimum-wage increases, have weaker anti-predatory-lending policies and have less generous health insurance programs for children in low-income families. Kim Hill, Jan Leighley and Angela Hilton-Andersson find, “an enduring relationship between the degree of mobilization of lower-class voters and the generosity of welfare benefits.” Worryingly, Frederick Solt finds that, “citizens of states with greater income inequality are less likely to vote and that income inequality increases income bias in the electorate.” That is, as inequality increases, the poor are less likely to turn out, further exacerbating inequality.

4) Interest-group politics

The decline of labor unions has decreased the political importance of poor voters, because unions were an important “get-out-the-vote” machine. A recent study by Jan Leighley and Jonathan Nagler finds that the decline in union strength has reduced low-income and middle-income turnout. But labor’s influence (or lack thereof) is also important when the voting is done. Research finds that policy outcomes in the United States are heavily mediated by lobbying between interest groups, so organization matters.

Martin Gilens writes, “Given the fact that most Americans have little independent influence on policy outcomes, interest groups like unions may be the only way to forward their economic interests and preference.” His research indicates that unions regularly lobby in favor of policies broadly supported by Americans across the income spectrum, in contrast to business groups, which lobby in favor of policies only supported by the wealthy.

(Sean McElwee, data from Martin Gilens)

(Sean McElwee, data from Martin Gilens)

It’s no surprise then that numerous studies have linked the decline in union membership and influence with rising inequality.

5) Racial conflict

A recent study by Maureen A. Craig and Jennifer A. Richeson finds that when white Americans are reminded that the nation is becoming more diverse, they become more conservative. Dog-whistle phrases like “welfare queens” have long driven whites to oppose social safety net programs they disproportionately benefit from. Research from Donald Kinder and Cindy Kam indicates that racial bias among white voters is strongly correlated with hostility toward means-tested social assistance programs. Another study by Steven Beckman and Buhong Zhen finds that blacks are more likely to support redistribution even if their incomes are far above average and that poor whites are more likely to oppose redistribution.

In other words, a massive public education campaign about the extent of income inequality is neither necessary nor sufficient to achieve the kind of redistributive policies liberals favor. The real obstacles to policy action on inequality are more deeply ingrained in the structure of American politics, demographics, and interest group coalitions. Insofar as there is a role for better information to play, it likely relates not to inequality but tosocial mobility which remains widely misperceived and is a potent driver of feelings about the justice of economic policy. As John Steinbeck noted, “Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.” Stronger unions, more lower income voter turnout and policies to reduce the corrupting influence of money on the political process would all work to reduce inequality. It will take political mobilization, not simply voter education to achieve change. The wonks have interpreted the world; the point, however, is to change it.

This piece originally appeared on Vox.

There is no American dream for black children

Recent events in Ferguson, Missouri, have once again made the nation consider the durability of racial injustice as a defining factor of the American experience. Black children go to increasingly segregated schools, experience significantly less mobility than whites and are far more likely to be incarcerated for nonviolent crimes. The American dream has always been defined by upward mobility, but for black Americans, it’s harder to get into the middle class, and a middle-class lifestyle is more precarious.

There are numerous factors that help explain why blacks have lower levels of upward mobility, but a surprisingly unpersuasive one is family structure. Conservatives like to tout the research of Raj Chetty and others who find that, “The fraction of children living in single-parent households is the single strongest correlate of upward income mobility among all the variables we explored.” But this observation comes with a caveat — children in two-parent households fare worse in areas with large numbers of single parents. There is reason to believe the causation is reversed. Rather than single-parent households causing low upward mobility, low upward mobility and rampant poverty lead to single-parenthood.

Two researchers from the National Bureau of Economic Research — Melissa Schettini Kearney and Phillip B. Levine — find that single motherhood is largely driven by poverty and inequality, not the other way around. They write,

The combination of being poor and living in a more unequal (and less mobile) location, like the United States, leads young women to choose early, non-marital childbearing at elevated rates, potentially because of their lower expectations of future economic success.

A report by the British Rowntree Foundation had a similar finding: “Young people born into families in the higher socio-economic classes spend a long time in education and career training, putting off marriage and childbearing until they are established as successful adults.” Women in the slow track, in contrast, face “a disjointed pattern of unemployment, low-paid work and training schemes, rather than an ordered, upward career trajectory.” This is largely due to “truncated education.”

Most recently, Bhashkar Mazumder finds that, among those between the late 1950s and early 1980s, 50 percent of black children born into the bottom 20 percent of the income scale remained in the same position, while only 26 percent of white children born into the bottom 20 percent of the income scale remained in the same position. His research finds that the role of two-parent families for mobility is less important than conservatives assert. While living in a two-parent households increases upward mobility for blacks, it has no effect on upward mobility for white children, nor does it affect downward mobility for either race.  If marriage has a significant effect, it is not marriage per se, but rather income and parenting effects that are at work; married people by default have more incomes and more time to spend with children. The solution, then, is paid leave, universal pre-K and government-provided daycare, not wealthy conservatives clutching their pearls and chastising young people for not getting hitched.

So, marriage fails to explain black-white gaps in mobility. What, then, is responsible for the lack of upward mobility among blacks?

1. Housing segregation

Racial segregation explains how it’s so easy for the black middle class to slip back into poverty. As sociologist John R. Logan writes, “The most recent census data show that on average, black and Hispanic households live in neighborhoods with more than one and a half times the poverty rate of neighborhoods where the average non-Hispanic white lives.” This has profound implications for upward mobility.

A 2009 study by Patrick Sharkey finds that, “Neighborhood poverty alone accounts for a greater portion of the black-white downward mobility gap than the effects of parental education, occupation, labor force participation, and a range of other family characteristics combined.” Sharkley finds that if black and white children grew up in similar environments, the downward mobility gap would shrink by 25-to-33 percent. As the chart below shows, black children are far more likely to grow up in high poverty disadvantaged neighborhoods, which makes upward mobility difficult. (Source)

2. War on drugs and mass incarceration

The war on drugs disproportionately targets people of color: One in 12 working-age African-American men are incarcerated. While whites and blacks use and sell drugs at similar rates, African-Americans comprise 74 percent of those imprisoned for drug possession. The U.S. prison population grew by 700 percent between 1970 and 2005, while the general population grew only 44 percent. The effects of incarceration on upward mobility are profound.

Bruce Western finds that, “by age 48, the typical former inmate will have earned $179,000 less than if he had never been incarcerated.” This impact, however, is more profound for blacks. Western finds that incarceration reduces lifetime earnings for whites by 2 percent, but Hispanics and blacks by 6 percent and 9 percent, respectively. All of this means that men who are incarcerated will live a life at the bottom. For men who begin life in the lowest income quintile, only 2 percent of those who are incarcerated will make it into the top fifth, while 15 percent of those who are not incarcerated will.

3. Segregated employment opportunities

In “When Work Disappears,” Harvard sociologist William Julius Wilson points to the importance of occupational segregation — the fact that African-Americans who are often concentrated in poor urban areas struggle to get jobs in the suburbs or places with a long commute. Only 2.9 percent of white workers rely on public transportation, compared to 8.3 percent of Latino workers and 11.5 percent percent of black workers.

An excellent example of occupational segregation is in Silicon Valley, where data released after pressure from advocacy groups like Color of Change suggests that at Facebook, Twitter, LinkedIn, Yahoo, Google and eBay, only 3 to 4 percent of workers are black or Hispanic. However, a study by Working Partnerships USA finds that, “While Blacks and Latinos make up only 3 to 4 percent of the disclosed companies’  core tech workforce, they are 41 percent of all private security guards in Silicon Valley, 72 percent of all janitorial and building cleaning workers, and 76 percent of all grounds maintenance workers.” (Source)

Much of the problem is social networks. Recent research by Nancy DiTomaso finds that favoritism perpetuates inequality, even in the absence of racial bias. She finds that most employees relied on social networks to obtain a majority of the jobs they held in their lifetime. Because social networks tend to be segregated, this fosters occupational segregation. Miles Corak shows that many children get their first job through their parents, further solidifying the effect of social networks on occupational segregation.

Marianne Bertrand finds that changing the names on résumés to those that are traditionally white or black affects call-backs for jobs. White-sounding names were 50 percent more likely to get called for an initial interview. She also finds that whites with better résumés were 30 percent more likely to get a call-back than whites with worse résumés, but for blacks, more experience only increased call-backs by 9 percent. Another barrier to employment can be social networks.

4. Wealth gaps

Wealth is an important part of a middle-class lifestyle. When a family or individual is struck with illness or the loss of a job, wealth provides support. When a child attends college or is trying to get on his or her feet, a family with wealth can help pay the bills. The large wealth gaps between black families and white families, then, helps explain why black families have such high levels of downward mobility. The recently released Survey of Consumer Finances allows us an opportunity to examine wealth gaps. Matt Bruenig finds that, “The median white family has a net worth of $134,000. The median Hispanic family has a net worth of $14,000. The median black family has a net worth of $11,000.”

Between 2007 and 2010, all racial groups lost large amounts of wealth. However, the effects fell disproportionately on Hispanics and blacks, who saw a 44 percent and 31 percent reduction in wealth, compared to an 11 percent drop for whites. This was due to blacks and Latinos disproportionately receiving subprime loans, both because of outright lending discrimination and housing segregation. A recent research brief by the Institution on Assets and Social Policy finds that the wealth gap between white families and African-Americans has tripled between 1984 and 2009. They find five main factors responsible for driving the gap, which together explain 66 percent of the growth in inequality. The factors, in order of importance, are number of years of homeownership, household income, unemployment, college education and financial support or inheritance

5. Two-tiered education system

The U.S. increasingly has a two-tiered education system, with students of color trapped in underfunded schools. (Source)  A recent study finds that, “schools with 90 percent or more students of color spend a full $733 less per student per year than schools with 90 percent or more white students.”

Schools today are becoming more segregated, rather than less segregated. The average white student attends a school that is 72.5 percent white and 8.3 percent black, while the average black student attends a school that is only 27.6 percent white, but is 48.8 percent black. These schools are underfunded and understaffed. In 2001, the American Civil Liberties Union filed a lawsuit after 18 public schools had “literature classes without books,” computer classes where students discuss what they would do if they had computers, “classes without regular teachers” and classes without enough seats where students stood in the back.

Mazumder finds that student scores on the Armed Forces Qualification Test (a comprehensive test taken toward the last few years of high school) can help explain differences in upward mobility between blacks and whites. He also finds that completing 16 years of education is a crucial factor in upward mobility. The fact that AFQT scores help predict upward mobility is often used by those who argue that racial differences in intelligence largely explain differences in upward mobility. However, since the AFQT is taken in high school, a better explanation is that differences in AFQT scores represent the combined impacts of poverty, bad schools, wealth gaps, substandard healthcare and segregated employment opportunities working together to reduce long-term mobility.

The idea that there are biological factors reducing upward mobility for African-Americans is both odious and entirely false. As Nathaniel Hendren told me when discussing his research,

We can absolutely reject that theory. In order to believe that theory, you have to believe that the spacial differences across the U.S. are differences in some kind of transmission of genes. Suppose you move from one area to another and you have a kid. Does your kid pick up the mobility characteristics of the place you go to? Now obviously, your genes don’t change when you move. What we find is that kids start to pick up the mobility characteristics of the place they move to, and they do so in the proportion to the amount of time they end up spending in that place. The majority of the differences across places are casual. If people lived in different places, they would have different outcomes.

This all leads to the saddest conclusion — were it not for poorly conceived policies, we could have more upward mobility in the U.S. While conservatives like to point at cultural factors and throw up their hands, a far more productive solution is to redress our massive public policy problems — like the war on drugs and dropout mill schools — that are proven to reduce upward mobility.

The conservative mind-set is ahistorical — we are told to throw away the legacy of slavery and segregation and expect blacks to pull themselves up by their own bootstraps, ignoring the structural dynamics keeping them down. Research by Graziella Bertocchi and Arcangelo Dimico finds that counties with higher concentrations of slave ownership in 1870 had higher levels of poverty and racial inequality in 2000. Matthew Blackwell finds that Southerners who live in counties with higher levels of slave ownership in 1860 express more racial resentment and are more likely to oppose affirmative action. As Marx noted, “Men make their own history, but they do not make it as they please; they do not make it under self-selected circumstances, but under circumstances existing already, given and transmitted from the past. The tradition of all dead generations weighs like a nightmare on the brains of the living.”

 

 

This article originally appeared on Salon.

Beyond Ferguson: 5 glaring signs that we’re not living in a post-racial society

In the wake of the Ferguson shooting, a recent Pew poll finds that 47 percent of whites believe that “race is getting more attention than it deserves,” with regards to the death of Michael Brown, while only 18 percent of African-Americans feel the same. Meanwhile, a similar Pew study found that whites are far less likely to see discrimination in the treatment blacks receive by the education system, the courts and hospitals. Such views are held by many Americans, who believe that “blacks are mostly responsible for their own condition.” Police killings of unarmed blacks are certainly the most visible manifestation of systemic racism, but data show that racism still manifests itself frequently in everyday life.

In America, race determines not just where someone lives and what school he or she attends, it affects the very air we breathe. Although many whites wish to believe we live in a “post-racial” society, race appears not just in overt discrimination but in subtle structural factors. It’s impossible to delineate every way race affects us every day, but a cursory examination of major structural racial problems can give us a feeling for how far we still have to go.

1) Education

Education is an important key to fostering upward mobility and alleviating inequality. However, schools today are becoming more segregated, rather than less segregated. At the peak of integration, 44 percent of black Southern students attended majority white schools. Today, only 23 percent do. This is particularly worrying because recent research by Rucker C. Johnson finds that school desegregation benefited black students, because it “significantly increased both educational and occupational attainments, college quality and adult earnings, reduced the probability of incarceration, and improved adult health status.”

Researchers have increasingly referred to a rise of “apartheid schools,” which are almost entirely non-white. In 2003, one-sixth of all black students were educated in such “apartheid schools.” These districts are underfunded and understaffed, and frequently referred to as “dropout factories.” So students of color are far less likely than their white peers to attend schools with a full range of advanced courses.

As ProPublica documents, more and more schools are squeezing out of court oversight. The result, according to Sam Reardon and his colleagues, is increased racial segregation.

(Source)

At the college level, the situation is little better. A recent report by Anthony Carnevale and Jeff Strohl finds that college education in America consists of “a dual system of racially separate and unequal institutions despite the growing access of minorities to the postsecondary system.” They find that students of color are less likely to end up in the most selective schools than white students with the same qualifications.

2) Wealth

There is a large racial wealth gap between blacks and whites in America, partially driven by income but exacerbated by racially biased housing policies (which will be examined below). A recent research brief by the Institution on Assets and Social Policy finds that the wealth gap between white families and African-Americans has tripled between 1984 and 2009. The recession has only exacerbated the gap, with whites losing 11 percent of their wealth between 2007 and 2010, while blacks lost 31 percent and Hispanics 44 percent.

(Source)

The housing crash disproportionately affected blacks and Hispanics, who were more likely to receive subprime loans even when compared to whites with similar credit scores. In one instance reported by the New York Timesa loan officer at Wells Fargo said the bank “saw the black community as fertile ground for subprime mortgages, as working-class blacks were hungry to be a part of the nation’s home-owning mania.” However, even before the recession, disparities inemployment, college education, homeownership and inheritance helped solidify racial wealth gaps. Instead of wealth, more and more Americans, particularly people of color, are burdened with debt.

3) Job Markets

Unemployment is particularly high among African-Americans, the result of both explicit discrimination and occupational segregation.

Occupational segregation, or the delegation of blacks to jobs with low upward mobility and wages, is rife. People of color are primarily affected by practices like just-in-time scheduling, which gives workers little warning before a shift.

Part of the problem is infrastructure and education. People of color are far more likely to rely on public infrastructure, and therefore suffer from cuts to public transportation. Decades of housing segregation have trapped African-Americans in jobless areas with badly understaffed schools. Social networks reinforce the patterns, since most Americans get their jobs through friends and family connections. Outright discrimination plays a role as well: Marianne Bertrand finds that applicants with white-sounding names are 50 percent more likely to receive a call-back than applicants with black-sounding names with the same credentials.

4) Upward Mobility

Possibly the defining American attribute is the dream of upward mobility. Sadly, this tends to be more farce that fact — America lags behind other developed countries in measures of upward mobility. But recent research by Raj Chetty, Nathaniel Hendren, Patrick Kline, Emmanuel Saez, shows that levels of upward mobility vary across the country — and is strongly predicted by income inequality and racial segregation. They write: “Income mobility is significantly lower in areas with large African-American populations.” (Whites in the areas also had lower levels of mobility.)

Specifically, they note the importance of segregation, “areas that are more residentially segregated by race and income have lower levels of mobility.”

(Source)

A recent Pew Research Center study shows that not only do blacks have lower levels of upward mobility; among those that do make it into the middle class, their children are more likely to slide back into poverty. In what may be the most depressing footnote I’ve ever seen in a chart, Pew notes that there are not enough observations of blacks in the fourth and fifth (read: highest) quintiles of income to make observations about upward mobility.

 

(Source)

In a recent study, Bhashkar Mazumber finds that out of all children born between the late 1950s and early 1980s, 50 percent of black children born into the bottom 20 percent of the income scale remained in the same position, while only 26 percent of white children born into the bottom 20 percent of the income scale remained in the same position. He also finds, like Pew, that African-Americans in the middle class are on far more precarious footing than whites: 60 percent of black children born in the top half of the income distribution fell to the bottom half later in life, but only 36 percent of white children born in the top half of the income distribution fell to the bottom half later in life.

Surprisingly, Mazumber finds that “[w]hile these results are provocative, they stand in contrast to other epochs in which blacks have made steady progress in reducing racial differentials.” While we like to believe we are constantly progressing, these data suggest we may be backsliding with regard to mobility and race.

5) The War on Drugs

The socioeconomic realities discussed above cannot be divorced from the war on drugs: It is a war that is primarily fought against people of color in the country. One in 12 working-age African-American men is incarcerated; and while whites and blacks use and sell drugs at similar rates, African-Americans comprise 74 percent of those imprisoned for drug possession.

The U.S. prison population grew by 700 percent between 1970 and 2005, while the general population grew only 44 percent. According to the Bureau of Justice statistics, around half of federal prisoners’ most serious offense is drug-related. The war on drugs has undermined the legitimacy of law enforcement and eroded their esteem in the eyes of the public. Even before the Ferguson shooting, 70 percent of blacks agreed that, “blacks in their community are treated less fairly than whites” when dealing with the police.

Instead of housing those who have committed violent crimes, U.S. prisons are increasingly teeming with nonviolent offenders. Formerly incarcerated people struggle to find work, and are therefore more likely to turn to crime in the future, creating a vicious and counterproductive cycle. A Pew study finds that the costs of incarceration are often hundreds of thousands of dollars in lost wages. Even when they are no longer incarcerated, former inmates are often deprived of basic rights, including franchise. Around 13 percent of African-American men have been denied the right to vote.

This is to barely touch on the empirical literature on school punishmentaccess to healthcare, a history of racially biased federal policy and the other deep issues that we face. The most disturbing fact is that in almost all of these areas, we have actually seen previous progress eroded, even while we proclaim ourselves a post-racial society. It’s time to take an honest look at race in America. We probably won’t enjoy it. But we need it.

This piece originally appeared on Salon.

The GOP’s libertarian time bomb: Why “going Rand” would be an electoral disaster

The time has come again for a perennial theme in politics: the idea that Republicans should “go libertarian.” The questionable premise, forwarded most recently by Robert Draper and Emily Ekins, is that the Republican Party could sweep up millennials, who are “socially liberal” and “economically conservative,” by adopting a more libertarian message. The ascent of popular startups like Uber and Airbnb — which have about them a decidedly libertarian flavor — has only strengthened this supposedly conventional wisdom.

Here’s the thing, though. The data show that this is an unlikely possibility, but more problematically, doing so would actually decimate the Republican base. The truth is, libertarianism is antithetical to conservatism.

The Republican base, broadly speaking, is made up of five often-overlapping coalitions: business conservatives who seek low taxes and low regulation; foreign policy hawks who seek a strong defense budget; social conservatives who fear moral anarchy; racists and nativists worried about immigration and affirmative action; and elderly retirees who rely on Social Security and Medicare. This coalition is already difficult enough to maintain, but in the future it will become more difficult.

And a “libertarian” message would only further erode the base.

Business conservatives seem like they would be the most open to a libertarian message. After all, lower taxes and less regulation are amenable to both groups. But Republicans are already very pro-business and anti-regulation; to go further in order to pull in a few more libertarians would entail (1) decreased fiscal or monetary intervention, or (2) the elimination of corporate subsidies. Both of these moves would alienate business conservatives, who, after all, rely significantly on government support (to the tune of $92 billion in 2006) and accept the need for countercyclical spending policies. Libertarians might struggle to support Republicans doling out farm subsidies year after year, subsidizing exports and bailing out big businesses and banks, but business conservatives demand it.

Foreign policy hawks would also find many of the core tenets of libertarianism — skepticism of foreign interventionism, opposition to the NSA and a healthy loathing of the military-industrial complex — to be problematic. Republicans could try to peel off support among libertarians by opposing torture, closing Guantanamo and investigating the NSA, but it’s tough to believe that the party of Bush, Cheney, Wolfowitz and Rumsfeld would be able to garner much trust. The swift turn of Rand Paul from libertarian anti-interventionist to foreign policy hawk attests to the difficulty in going this route.

Social conservatives would likely be the most difficult challenge to libertarians. Libertarians tend to support individual  liberty:the right to gamble, drink, smoke, watch pornography, take one’s own life, participate in any form of sexual activity and use drugs. Needless to say, these views would be incredibly problematic for the moral majority coalition, which still forms an incredibly important part of the Republican base. It was Hayek who wrote in “Why I’m Not A Conservative”: “The conservative does not object to coercion or arbitrary power so long as it is used for what he regards as the right purposes… like the socialist he regards himself as entitled to force the values he holds onto other people.”

While it’s often considered impolite to note in public, a rather significant base of Republican power is still nativism. Witness the hysterical response to Central American refugees, the baseless claims against Obama’s citizenship, and the opposition to any immigration reform that doesn’t include a moat full of crocodiles across the border. But most libertarians are strongly supportive of open borders. Libertarian economist Bryan Caplan calls it, “The Efficient, Egalitarian, Libertarian, Utilitarian Way to Double World GDP.” In a world when even the “reasonable” Republicans are still spouting xenophobic drivel, witness Ross Douthat’s columnworrying that “the bills under discussion almost always offer some form of legal status before enforcement takes effect, which promises a replay of the Reagan-era amnesty’s failure to ever deliver the limits on future immigration that it promised.”

Finally, there are the elderly retirees, whose support Republicans maintain by making sure that any spending cuts fall on the backs of the poor – not the old. One wonders how they would receive the Cato Institute plan to turn Social Security into private savings accounts subject to market forces. Many would balk if a politician called Social Security “federally mandated generational theft,” but this is how Nick Gillespie regards it. Social Security and Medicare are sacrosanct and any attempt to reform them is likely a “third rail” that would lead to electoral death for the politician that tried.

The problem with libertarianism is mainly that few people agree with its ideological assumptions — but will often come to the same political answer. But this means that most people will be “libertarian” on some issues, rather than use a libertarian mode of thinking to get there. So people may be programmatically libertarian, but ideologically disagree with fundamental assumptions. As political scientist Seth Masket writes, “Basically everyone agrees with libertarians on something, but they tend to get freaked out just as quickly by the ideology’s other stances.”

These contradictions are obvious, and Draper’s widely discussed piece touches on some of them. For instance, there is Mollie Hemingway, who claims to be a libertarian, but is anti-choice and rejects gay marriage. She argued that although “‘people should be free to organize their own lifestyle,’ the state had a unique interest in protecting heterosexual marriage, because it was ‘the relationship that’s ordered to producing children.’” She might want to turn to Ayn Rand, who argued that, “but it is improper for the law to interfere with a relationship between consenting adults” and noted that “abortion is a moral right — which should be left to the sole discretion of the woman involved; morally, nothing other than her wish in the matter is to be considered. Who can conceivably have the right to dictate to her what disposition she is to make of the functions of her own body?”

Or what of Murray Rothbard’s claim that “the parent should not have a legal obligation to feed, clothe, or educate his children, since such obligations would entail positive acts coerced upon the parent and depriving the parent of his rights. The parent therefore may not murder or mutilate his child, and the law properly outlaws a parent from doing so. But the parent should have the legal right not to feed the child, i.e., to allow it to die.” Hemingway is a programmatic libertarian — she likes some proposals, but rejects the radical individualism libertarianism truly entails.

And those are on the issues where Republicans are supposed to agree with Libertarians. Nick Gillespie touches on the minor contradictions in an interview for Draper’s piece:

Republicans always saw libertarians as nice to have around in case they wanted to score some weed, and we always knew where there was a party. And for a while it made sense to bunk up with them. But after a while, it would be like, ‘So if we agree on limited government, how about opening the borders?’ No, that’s crazy. ‘How about legalizing drugs? How about giving gays equal rights?’ No, come on, be serious. And so I thought, There’s nothing in this for me.

He leaves some equally problematic things out: legalized prostitution, restrained foreign policy, massive defense cuts, abolishing social security and Austrian economics. None of these will curry favor with the Republican establishment. The question is not whether there are a large number of Americans who would be excited by libertarianism; the question is whether the Republicans could maintain their current coalition and also court these voters — this seems unlikely.

Then there’s the fact that Rand Paul, once an ardent libertarian, has had to step back on numerous positions. There’s the fact that Gary Johnson alienated the base and Ron Paul looked loony in 2012, opposing the Iraq War, calling for an end to the federal reserve and arguing that the government should legalize all drugs. Ronald Reagan, who successfully used libertarian rhetoric (see: A Time for Choosingeschewed it when governing. The Republican Party has long used libertarian rhetoric while pursuing statist policies. The Mercatus Center, a libertarian think tank, ranks the 50 states based on “freedom,” but weights “tax burden” as 28.6% of the metric and “freedom from tort abuse” as 11.5%, while “civil liberties” only account for 0.6% of a state’s score and “education policy” 1.9%. In Mercatus-land, alcohol, gun and cigarette freedom rank above marriage freedom, and abortion goes unmentioned. A libertarian turn for conservatives would be nice — libertarians actually hold the free market views conservatives claim and actually accept the importance of reason and individual liberty. But this is the reason it will never happen: True libertarianism would decimate the Republican base, so instead a half-hearted libertarianism prevails — stripped of policies, it subsists on empty rhetoric. But then again, the last few Republican rebranding efforts have been empty rhetoric, and so will this one.

This piece originally appeared on Salon.

The Rise of the React-o-Cons

The rise of “reform conservatives” has drawn an increasing amount of attention. The wonky right has been treated most recently to a lauding article in the New York Times, following a critical take by E.J. Dionne in Democracy.  Some writers have gone as far as declaring Republicans the party of ideas. But reform conservatism fails to reach the holy grail of modern conservatism, wedding support of the family with adoration for the free market.

Cracks have already formed in the reformicon facade. There is little willingness to challenge the insanity of the Republican Party, so environmental issues have gone entirely ignored. Attempts to bend a fundamentally flawed theory of poverty into wonky centrist plans have collapsed under the weight of their own absurdity. When foreign policy is broached, and itrarely is, the result is embarrassing. (Conservative writer Scott McConnell worries, “it is more than a little disconcerting to see neoconservatism be welcomed back into the public square under the false flag of Burkean moderation.”  The reformicons, if they care about immigration (it didn’t garner a mention in their famous “Room to Grow” plan), did nothingto halt recent Republican self-destruction on immigration. The most substantive challenge they appear willing to make toward the party’s right-most wing is banalities about inflation.

Instead, reform conservatism sticks to “wonky” economics plans, where attempts to distinguish themselves from centrist Democrats fall away. Had the Obama administration chosen to push for a more progressive plan (which likely would have failed to pass), then the reformicons may well have proposed something very much like the Affordable Care Act. Obama instead chose the conservative route: expand already existing programs and keep the private insurance system broadly in place. The fact that Obama’s plan was drawn from Heritage documents and implemented previously by Republicans is inconsequential — the important point is that it is philosophically conservative. That is, it prefers market mechanisms when possible and expands old bureaucracies (Medicaid) rather than create new ones.

In fact, the Obama administration has shown a consistent preference for conservative policy proposals — ones that don’t throw the baby out with the bathwater but rather leave already existing structures in place, but reform them subtly. His administration has preferred, where possible, to delegate power to the states and to use market mechanisms rather than government decree to reach policy goals. (Witness his recent plan for curbing global warming, which relies on federalisminnovation and market mechanisms, rather than command and control.) His foreign policy has been restrained compared to the naive sentimentality of the previous administration and he has shied away from crusading on social issues, preferring to silently advance transgender rights.

Because of Obama’s conservatism, the “reformers” have been forced to take on an increasingly reactionary tone. Yuval Levin, for instance, according to the generous Sam Tanenhaus, sounds rather more reactionary than reformist:

For all [Levin’s] temperateness of tone, and for all the meticulously reasoned arguments that he has shepherded into the pages of National Affairs, Levin justly says his ideas are radical. He envisions not just a shrinking or scaling-back of government, but an entire re-imagining of it.

This longing to roll back time and go to a long-gone utopia is not a conservative impulse, but rather a reactionary one. We see this impulse when Ramesh Ponnuru seeks to obliterate the conservative Affordable Care Act on the basis of a radical (and almost entirely unsupported) reading of a single sentence. This is not the attitude of someone who, as Burke might suggest, attends to “the faults of the state as to the wounds of a father, with pious awe and trembling solicitude.” Instead Ponnuru resembles the impetuous “children of their country, who are prompt rashly to hack that aged parent in pieces, and put him into the kettle of magicians, in hopes that by their poisonous weeds, and wild incantations, they may regenerate the paternal constitution, and renovate their father’s life.”

Most reformicon (react-icon?) proposals still hold to the old Reaganite dogma that “the government isn’t the solution to the problem, the government is the problem.” Instead of “tax cuts,” the new right-wing buzzword is “tax credit.” Reading their foundational document, “Room to Grow,” you wonder whether the reformicons might try to solve terrorism with “tax credits” as well; the phrase appears 21 times in the manifesto, and “credit” 81 times (abortion and gay rights go unmentioned, guns are mentioned once). Given that immigration is the single biggest issue that faces the Republican Party, one would expect a chapter, or even a paragraph, on the subject — she would be wrong. Sadly, for reform conservatives, the Obama administration has already begun expanding tax credits and has signaled its intent to do more, meaning that reformicons generally substitute real change for the Taco Bell effect.

* * *

From the beginning, “reform conservatism” had deep troubles. For one, its thinkers have made no secret that their goal is to somehow save the odd Republican coalition of social conservatives, foreign policy hawks and business conservatives. These contradictions are most obvious in the conflict between business libertarian conservatives and social conservatives, and expose the deepest failings of reform conservatism.

The most famous and influential reform conservatives all cut their teeth in the culture wars. Ponnuru first graced the national spotlight after calling Democrats the “party of death,” and blundering through an interview with Jon Stewart. Yuval Levin worked with Robert P. George who believes marriage can only exist where penile-vaginal intercourse does. (This is not a caricature of his argument). Ross Douthat is known for his radical Catholicism. (He supports allowing businesses to discriminate against gays and compared the contraception mandate to sterilization.) All of them swarm at a chance to rue the rise of single mothers. But their “family-friendly” values are tough to reconcile with the market — one of the most anti-family institutions (there is a reason the Atlas Society, which exists to forward Randian ideas, harbors an open disdain for the family).

Hobby Lobby, which could be seen as another instance of market relations inserting into family life (the decision of when to begin one), is instead seen as a victory of “religious liberty.” This conclusion is not foregone, but rather justified, rather explicitly, as a way to maintain an uneasy alliance between religious radicals and the more libertarian business wing of the Republican Party. As Julia Azari writes,

The religious liberty-contraception question provides an opportunity for three important factions within the Republican Party – ideological libertarians, business interests, and social conservatives – to agree on something.

Someone actually concerned about families might worry about Hobby Lobby’s policy towards pregnant women, which is certainly not Christian and barely civilized:

When a very pregnant Felicia Allen applied for medical leave from her job at Hobby Lobby three years ago, one might think that the company best known for denying its employees insurance coverage of certain contraceptives—on the false grounds that they cause abortions—would show equal concern for helping one of its employees when she learned she was pregnant.

Instead, Allen says the self-professed evangelical Christian arts-and-crafts chain fired her and then tried to prevent her from accessing unemployment benefits.

That is unsurprising: The question at hand in Hobby Lobby was not religious liberty, but corporate power. The goal is not “family,” but rather exclusion of certain groups from the public sphere. We don’t need to look too far back to find conservatives who understand that the deepest threat to the family is not the government but the market. Marxist conservative Christopher Lasch writes,

The sentimental veneration of motherhood, even at the peak of its influence in the late nineteenth century, could never quite obscure the reality that unpaid labor bears the stigma of social inferiority when money becomes the universal measure of value … children pay the price for this invasion of the family by the market.

The greatest threat to the civic institutions that the reformicons praise so highly are also threatened by the market: “all that is solid melts into air.” Pope John XXIII writes in “Mater et Magistra,”

We therefore consider it Our duty to reaffirm that the remuneration of work is not something that can be left to the laws of the marketplace; nor should it be a decision left to the will of the more powerful. It must be determined in accordance with justice and equity; which means that workers must be paid a wage which allows them to live a truly human life and to fulfill their family obligations in a worthy manner.

And yet the reformicon proposal for getting the long-term unemployed hired is to reduce their wages — further degrading them.

America is one of the only countries in the world that does not offer paid maternity leave. Because of this, paid leave is a luxury in America that is available to all wealthy and most middle-class women but denied the poor. Only 5 percent of women in the retail sector have access to paid maternity leave. A study by Linda Houser and Thomas Vartanian finds that only 11 percent of private sector workers reported paid family leave through their employers, and only 5 percent of women in the bottom quarter of wages report access. The reformicons aren’t interested in what almost every other country (and some states) have done: guaranteed paid leave. In the “Room To Grow” essay on work-family balance (the only one, notably, written by a woman), Carrie Lukas rejects the idea of paid leave, arguing that, “Knowing that any worker facing a medical issue could take up to three months of paid leave creates a significant new risk for employers.” The reformicon dogma  can be summed up quite simply as “money over everything.”

When family and marketplace meet, reformicons will prefer markets. They therefore lack proposals to deal with rampant wage theftscheduling abuse and the massive gender pay gap. The gender pay gap will cost women in retail $381 billion over the next six years, a recent Demos report finds. Given that 40 percent of women in retail contribute 40 percent or more of their family’s income, reducing that gap would be a benefit to working families. It’d be great to hear some reformicon proposals — instead we get decepticon denialism.

The failure of reform conservatism to forward actually family-friendly policies is probably its most glaring deficiency. As Christ once said, “No one can serve two masters, for either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve God and money.” I’ve noted these contradictions before: Rubio and Ryan want to expand opportunity and reduce inequality; the only way to do that (at least the way every other country has done so) is to strengthen government programs. The best way to strengthen the family is to remove the market from family life. It is corporations, not government, that schedule workers and it is laissez-faire that has eroded the middle class for the past four decades. In Dionne’s essay, he notes that some of the reformicons have recognized their ideological contradiction, but he summarizes the failure to correct it accurately, “Even when they face up to the contradictions in conservative ideology and acknowledge the market’s shortcomings, their solutions rarely challenge the market’s priorities …”

Eventually reform conservatism will collapse upon the weight of its own contradictions. Ronald Reagan, like an unwitting best friend setting up a bad blind date, formed an increasingly unmanageable coalition. The initial spark has died and the elderly lovers are increasingly bickering. Vitriolic hatred of Obama is a weak attempt at coalition maintenance. The dirty fact is that very few policies can make all the parties of this increasingly fractious coalition happy. Reform conservatives have tried to brush these issues under the carpet, but eventually voters will want red meat, something Republicans simply cannot deliver and remain a viable party. Without a symbolic enemy to rally around the coalition will fall apart, which is why the reformicons are neither particularly interested in actually existing policy or conservatism.

Originally published on Salon.

The Threat of Just-in-Time Scheduling

One of the most unnoticed labor trends in the past few decades has been the rise of “just-in-time scheduling,” the practice of scheduling workers’ shifts with little advance notice that are subject to cancelation hours before they are due to begin. Such scheduling practices mean that already low-wage workers often have fluctuating pay checks, leading them to rely on shady lenders orcredit cards to make ends meet. Such consequences especially affect women and workers of color, who disproportionately fill these jobs.

just in time
Source: Susan J. Lambert, Peter J. Fugiel, and Julia R. Henly, “Schedule Unpredictability among Young Adult Workers in the US Labor Market: A National Snapshot,” July 2014 (Click symbol to enlarge)

New research from three University of Chicago professors, Susan J. Lambert, Peter J. Fugiel, and Julia R. Henly, examines scheduling practices for young adults (26 to 32 years old). Many outlets have reported their finding that part-time workers face greater scheduling uncertainty than full-time workers: 39 percent of full-time workers report receiving hours one week or less before work, compared to 47 percent of part-time workers. But less attention has been paid to the race gap: 49 percent of blacks and 47 percent of Hispanics receive their hours with a week or less of notice, compared with 39 percent of white workers.

Non-white workers also report far less control over their hours. Lambert and her co-authors find that 47 percent of white workers have their hours set by their employer. By contrast, 55 percent of blacks and 58 percent of Latinos say their employer sets their hours. Only 10 percent of Latinos and 12 percent of blacks report being able to set their hours “freely” or “within limits,” while 18 percent of white workers do.

just in time scheduling
Source: Susan J. Lambert, Peter J. Fugiel, and Julia R. Henly, “Schedule Unpredictability among Young Adult Workers in the US Labor Market: A National Snapshot”, July 2014 (Click symbol to enlarge)

Hours vary widely from week to week for many of the young adults Lambert and her colleagues studied. They find that “among the 74 percent of hourly workers who report at least some fluctuation in weekly work hours … their weekly work hours varied from their usual hours by, on average, almost 50 percent during the course of the prior month.” Such large fluctuations in hours also indicate large fluctuations in wages, which make life difficult for an increasingly debt-burdened overall population.

In a previous study Lambert and Julia Henly also found that unpredictable schedules increase stress and often disrupt a worker’s family life. Using data from 21 stores across the U.S. they found that workers with unpredictable schedules reported more stress and conflict between work and family life. “Precarious scheduling practices are not isolated within a few organizations but rather reflect growing national and international trends,” they concluded. As the world becomes increasingly globalized and labor commodified, employees will be treated more like “factors of production” and less like people. Rather than a few egregious corporations, such practices are increasingly the norm in low-wage and middle-wage industries.

Rising toll

Just-in-time scheduling is an increasingly prevalent practice in two of the fastest-growing and deeply unequal sectors of the economy: retail and service. Both sectors disproportionally employ women and people of color. It’s not a stretch to connect just-in-time scheduling to a broader war on women and workers which has been waged by the modern conservative movement.

Because most worker protections were passed before the influx of women into the workforce and were designed to exclude people of color, these groups are perfect targets for the anti-worker agenda. Because women and people of color are highly concentrated in low-wage service sector jobs (home health care, retailfast food) that only recently started unionizing, they are even more vulnerable. Congressional Republicans have opposed pay parity for women, early childhood education and paid parental leave. Recent decisions by the conservative Supreme Court havedecimated unions in the highly minority- and female-led home health care sector as well as prevented women from getting necessary health care through their employers.

Low wages and erratic work schedules take an obvious toll on working families and workers of color. But they also affect the general economy. Research suggests that lagging demand may be holding back the economy because low-wage workers can barely afford necessities. Few can follow President George W. Bush’s famous advice “go shopping more” or “go to Disney world” and thereby stimulate the economy.

Scheduling abuse compounds this problem by making work and wages subject to erratic swings. Sociologist Nancy Cauthen writes that, “Many low-wage workers are expected to work the day shift one day and the night shift the next and/or to be available seven days a week.” Although the right likes to portray trickle-down economics as good for long-term growth, the literature suggests the opposite. By depriving workers of stable incomes, conservative policies actually stifle economic growth.

What’s more, if the goal of such employers is to increase profits, there’s good reason to curb these scheduling practices: Studies show that giving workers more control over their hours and their time actually increases productivity, while JIT scheduling increases turnover and decreases work satisfaction and loyalty. Managers, who are forced to juggle more workers, also work more hours.

The union movement — once a bulwark against the encroachment of employers — is still nascent in service and retail whereas it has deep roots in male-dominated sectors of the economy, such as manufacturing. The recent Supreme Court decision in Harris v. Quinn, which struck down the requirement for home healthcare workers to pay “agency fees,” will only hold back unionization even further.

Federal protections for workers haven’t been expanded since President Lyndon Johnson’s Great Society programs and therefore haven’t adjusted to the rise of women in the workforce. These protections also effectively excluded people of color; for instance, farm labor (made up of Hispanics) is still exempt from many labor protections. Thus, the U.S. is one of the only countries that fails to mandate paid maternity leave. The result is that all but 5 percent of pregnant women in retail are denied paid maternity leave — which forces on them a devastating choice between their job and their own health and that of their child. Women who do have paid leave get it through employers, so such policies are concentrated at the top of the income distribution.

The result is that many employees must adjust their family time to meet the demands of customers and employees. While many conservatives, such as Ross Douthat and Ramesh Ponnuru, talk about the importance of family and the working class, few support commonsense worker protections and none supports unionization.

Flexible or stable

The U.S. needs legislation to ensure guaranteed minimum weekly hours that will help regularize workers’ pay. Rep. George Miller (D-Calif.) and Rep. Rosa DeLauro (D-Conn.) have introduced the Schedules That Work Act which would give workers the right to request a “flexible, predictable or stable” work schedule without retaliation. The bill stipulates that employers must detail upon employment the number of hours an employee can expect to work each week, and be given two-week notice before any scheduling change. The bill also requires that those who arrive at work only to find out there are no shifts available would be paid for four hours of work. Low-wage workers often travel long distances or pay for fuel only to arrive at work and be told they aren’t needed that day. Sen. Elizabeth Warren (D-Mass.) and Sen. Tom Harkin (D-Iowa) have sponsored a Senate version.

Although Republican intransigence will make federal action difficult, there are other options. Some states havetaken the initiative and passed “reporting time pay laws,” which require payment for workers that report to work, even if they aren’t needed. A stronger union movement, especially in the retail and service sectors, can also provide a counterbalance to the power of corporations and stem rising inequality. Service-sector workers receive a $2.00 an hour wage bump when they unionize, according to the Center for Economic and Policy Research, and are more likely to have health insurance and a pension plan.

Corporations should take note of the lower turnover and higher productivity that structured scheduling provides, just as social conservatives should look to the benefits for working families. Workers are taking to the streets, fed up with low pay and bad hours. The economy is hobbled by lack of demand. The push to laissez-faire, orchestrated by ideologues in D.C. is finally under siege by an inchoate mass of workers. As Karl Polanyi notes, the “laissez-faire economy was the product of deliberate state action,” but “subsequent restrictions on laissez-faire started in a spontaneous way. Laissez-faire was planned; planning was not.” Without these reforms, employers will continue to exploit low-wage workers, to the detriment of all.

Amy Traub, a Senior Policy Analyst at Demos, contributed to this article.

This piece originally appeared on Al Jazeera.

When Workers Own Their Companies, Everyone Wins

In 1921, the Olympia Veneer Company became the first worker-owned cooperative to produce plywood. By the early 1950s, nearly all of the plywood produced in the United States was manufactured by worker-owned cooperatives. Today, however, worker-owned cooperatives seem few and far between. Say “co-op” and most people think of Park Slope foodies or strictly guarded apartment buildings. Worker ownership may seem a relic of the past, but it could actually play a significant role in reviving the union movement, bolstering the green economy, and stemming the tide of deindustrialization.

Today, there are only about 30,000 cooperatives, strictly defined, employing 856,000 workers in the United States. Most of these cooperatives are consumer cooperatives, owned by consumers, rather than workers. (Technically, cooperatives are defined by incorporation, ownership, and tax-filing status.) But about 47 percent of American workers participate in profit-sharing arrangements of some sort. Employee stock ownership plans (ESOPs), for instance, involve around 10 million workers and range from plans that are essentially cooperatives (in which workers have decision-making power) to plans in which workers have stock, but no ownership or decision-making powerthese are essentially profit-sharing by a different name. Procter and Gamble, the twenty-seventh largest corporation in America is estimated to be10 to 20 percent employee-owned. Among the Fortune 100, many companieshave employee ownership plans, including Exxon Mobile, Chevron, ConocoPhillips, GM, Ford, Intel, UPS, Amazon, Coca-Cola, Cisco, and Morgan Stanley.

Against this backdrop, it’s not so surprising that some are making the case for co-ops. Union leaders, in particular, argue that there is significant opportunity to expand the coop model by associating it more closely with unions. This make sense: Unions are looking for new allies and methods for increasing worker control, while cooperatives can benefit from the organizational skill and scalability of unions. Associating with coops would also allow the unions to extend their reach. While the union movement is concentrated in manufacturing, a recent study by Hilary Abell finds that 58 percent of cooperatives are in the retail and service sectors. “If you go back to the beginning of the labor movement,” says activist Carl Davidson, “unions and cooperatives used to go together like bread and jelly.”

Leo Gerard, the President of United Steelworkers Union, has been vocal about the possibility of what he calls “union cooperatives.” He has even studied this: In the wake of the recession, his union allied with Mondragon, a large federation of cooperatives based in Spain, and spent three years developing ways to build a similar movement in the states. Gerard noted that even while the Spanish economy has fared poorly in recent years, Mondragon proved resilient, maintaining steady employment.

The idea is catching on in the U.S. as well. In Pittsburgh, a “union cooperative” industrial laundry called Clean and Green uses green technologies and employs 120 worker owners. The business replaces a traditionally-run laundry; if it succeeds it will be a potent proof-of-concept for the cooperative movement. Two thousand minority home health-care workers in New York City formed a cooperative that increased their wages and benefits while also giving them more control of their working conditions. They are coordinating with the Service Employees International Union (SEIU. The coop model might provide unions with just the fresh air that they need. The economist Richard Wolff tells me that, “Unions concentrated mostly on how to minimize what to give back. They very rarely think in terms of strategic alternatives.”

Coops are also already an important part of the emerging green economy. In Cincinnati, one cooperative is connected with local building trades, and it retrofits buildings with green energy technologies. The nascent nature of the industry makes it ideal for cooperatives, which cannot be formed in industries already dominated by large hierarchical corporations. Ohio Cooperative Solar,for instance, installs solar panels on rooftops in downtown Cleveland.

Cooperatives can also supplement economic development programs in cities suffering under the weight of deindustrialization. In Cleveland, historian and political economist Gar Alperovitz has developed a cooperative model based on the idea of “anchor institutions.” He aims to use institutions like hospitals, local government, and universities, which are constantly in demand, to serve as a bulwark against the vicissitudes of the business cycle. He tells me that he’s had interest in his anchor-institutions model from representatives from about a hundred cities across the country. Cincinnati has experimented with the anchor-institution model, as well as Atlanta, Washington, D.C., and Jacksonville. Most of these areas are either deindustrialized or were hit hard by the housing crisis.

And coops are not just good for unions, the environment, and struggling townsthey are good for workers, too. A meta-study by economist Chris Doucouliagos examines 43 published studies and find that profit-sharing, worker-ownership, and worker participation in decision-making are correlated with higher productivity. The effects are stronger among labor-managed firms than among those with merely worker-ownership schemes like ESOPs. This seems to be playing out in the Union Cab Cooperative in Madison, Wisconsin. The coop was formed when cab driverswho were fed up with long hours, poor benefits, and low payditched management and bought the cabs themselves. The cooperative is run by a nine-person board of directors elected by the workers who sit for terms of no more than three years. In total, about 60 workers are involved in management, with representation distributed throughout the cooperative. The highest-paid workers make a base salary that is only 2.2 times the lowest-paid workers, although drivers who spend more hours driving and those elected to management positions make more.

The Union Cab Cooperative isn’t going to overtake Uber any time soon, but there is no reason to believe that cooperatives have to remain small. The Spanish coop that aligned with United Steelworkers, after all, has 80,321 employees. Its revenues in 2012 were €14.081 billion. In the United States, Hy-Vee, a chain of 235 supermarkets with 62,000 employees and $8 billion in revenue is entirely employee-owned.

The appeal of worker-ownership in the United States could even cross partisan lines. The two biggest supporters of ESOPs are the conservative Dana Rohrabacher and socialist Bernie Sanders. In 1999, they co-sponsored “The Employee Ownership Act of 1999” which would grant companies with a threshold of worker ownership an exemption from the federal income tax. Sadly, more recent cooperative bills have been primarily supported by liberals. But conservative policy wonks talk about an “ownership society,” and cooperatives are an ideal way to promote ownership and responsibility.

According to Democracy Collaborative, the world’s largest 300 cooperatives together constitute the ninth largest national economy. America is a land of ownership and democracyand yet these values are generally ignored in the workforce. Cooperatives can change that.

Originally Published on The New Republic.

Here’s a Quick, Smart Way Obama Could Raise Worker Wages

Hundreds of federal contractors went on strike Tuesdaywalking off the job at Smithsonian museums and other government buildings, and demanding that President Obama issue a “good jobs” executive order to improve their working conditions and pay. The idea is to build on the orders Obama already issued, earlier this year, to raise the minimum wage for contractors and to prohibit discrimination based on sexual orientation. The workers appreciate those measures, for sure, but they want more.

They make a good caseone the Administration should heed.

A new Demos study finds that federally-supported firms, defined as companies that receive 10 percent or more of the yearly revenue from contracting,employ 6.6 million people. Of these workers, 3.5 million of these workers earn wages at or below 150 percent of the poverty line for a family four (disproportionally minorities and women). And they frequently get lousy treatment from their employers.

A 2010 GAO investigation found that the government frequently awards contracts to companies with wage, safety, environmental, immigration and Medicare violations. Meanwhile, according to a Senate Health Education Labor and Pensions Committee report, firms that do federal contracting made up 30 percent of the companies with the largest penalties for health, safety and wage violations between 2007 and 2012.

The federal government is supposed to avoid working with such companies. But, presently, it does so only in the most egregious casesand, frequently, in a half-hearted way. For instance, in 2012 the Obama administration temporarily banned 3,800 companies, including British Petroleum and Booz Allen Hamilton, from contracting with the federal government, following pressure from Congress and the GAO. (BP was banned for “lack of business integrity” during its handling of the oil spill). But these suspensions, all temporary, generally last “fewer than 18 months.”

President Clinton, towards the end of his term, signed an executive order that required the government to contract only with firms that met higher standards for treatment of workers. President George W. Bush rescinded that regulation. Not long after, his administration went on to be marred by contracting scandals, including billions in no-bid contracts to a Halliburton subsidiary.

Obama, upon taking office, considered reinstating a responsible contractor policy. But the Administration never followed through,partially because it was unclear whether to proceed legislatively or via executive actionand whether there was legal authority for the latter. But the authority is there. Legislation from 1984 allows the government to consider, “a satisfactory record of integrity and business ethics” and since the non-partisan Federal Acquisition Regulation (FAR) Council first pushed for a clarification of the rule, it is clear that legal authority is not the question at handit is presidential will.

The question now is whether Obama is willing to use that authority.

The usual argument against a stricter contracting policy is that it would force government to pay more for workor get less work for what it pays. But the Center for American Progress, using GAO research, has found companies with poor records of worker treatment frequently produce cost overruns, long delays and shoddy work. Meanwhile, by giving contracts to companies that don’t provide good pay or safe working conditions, the federal government makes it harder for more responsible employers to survive. That’s another reason to think that high-road contracting would not hurt and might actually help the taxpayers. When Maryland instituted a policy that required contractors to pay a living wage, it started receiving more bids for contracts, presumably from companies that previously could not compete with lower wage firms. Finally, a study by Christopher Witko finds that “companies that contributed more money to federal contracts subsequently received more contracts,” which belies the idea that contracts are currently awarded purely on merit.

There is a long history of using the contracting system to set labor standards and to achieve social aims. Possibly the earliest example was Martin Van Buren’s order in March 31, 1840, established a 10-hour workday for all workers employed on public works, “finding that different rules prevail at different places.

In the 1960s, President Lyndon Johnson signed Executive Oorder 11246, which, “prohibits federal contractors and federally assisted construction contractors and subcontractors, who do over $10,000 in government business in one year from discriminating in employment decisions on the basis of race, color, religion, sex, or national origin.” It further required contractors with 50 or more employees and contracts of $50,000 or more to implement affirmative action plans to increase the participation of minorities and women in the workplace.

What kind of executive order(s) could Obama issue today? The best system would include pre-clearance and preference. A pre-clearance policy should bar the most egregious violators from contracting with the federal government. A preference policy should be established that gives a leg up to responsible contractors. Responsible contractors are those that offer healthcare benefits and paid leave, pay decent wages, respect collective bargaining rights and have a low CEO-to-worker pay disparity.

Obama could also improve enforcement of existing standards. The Obama administration has already worked to reduce employee misclassification, which occurs when employees are classified as classified as “independent contractors,” and deprived of benefits. [But it could put more money and manpower into to enforcement action. Such costs will more than pay for themselves. We estimate that misclassification robs the federal government of $14 billion a year in revenue. Given how widespread the practice is, the number is likely far higher.

A higher minimum wage is welcome, but in the status quo, studies find that as many as a quarter of low-wage workers may be paid under the minimum wage. Wage theft claims, which occurs when workers are denied overtime, paid below the minimum wage or have illegal deductions taken from their paychecks, have increased dramatically over the past decade almost 400 percent between 2000 and 2011. Even when workers win lawsuits, they rarely see their back wages. Enforcement and prosecution would help millions of low-wage workers and responsible contracting can keep bad companies from exploiting workers to keep their bids low.

With Congress gridlocked, President Obama will have to find another way to create good jobs in America. The best way forward is to use the federal contracting footprint.

This piece originally appeared on The New Republic.

The SEC should shine a light on dark political donations from corporations

Co-Authored with Liz Kennedy.

Nate Silver has already dubbed the 2014 election as “the least important in years.” But this year’s midterms are still breaking records for at least one thing: Secret political spending.

A historically unprecedented amount of dark money has already been spent to influence the outcome of the elections. As of July 15, more than $34 million in dark money had been spent on the 2014 election cycle. That is more than 15 times the $2 million–plus in dark money spent at this point in the 2010 midterms, and three times the $11 million in dark money spent at this point in the 2012 elections.

Dark money means political spending where the identity of the underlying source of the funds is not public. The Supreme Court’s Citizens United decision in 2010 allowed new political spending from corporations, and subsequent decisions removed limits on so-called independent spending. Now, sophisticated political players who want to exercise power without accountability are channeling their political spending through 501(c)(4) “social welfare” groups that aren’t required to disclose their funders.

The price we pay for this failure of transparency is a loss of information for voters, and a lack of accountability for both the spenders and beneficiaries of dark money.

Since most outside spending comes in a flurry in the last month of the election, we can expect these numbers to keep on rising. In 2012, 60 percent of dark money was spent on or after Oct. 1. If these trends hold, dark money totals this year will certainly break the 2010 midterm record and may even surpass the over $300 million in secret spending in the 2012 elections.

On Wednesday, the U.S. Senate Rules and Administration Committee held a hearing to promote transparency in election spending. They’re considering legislation that would require all outside political spending groups to disclose their significant donors (the DISCLOSE Act), and a bill that would require candidates, parties, and PACs that are already covered by federal disclosure laws to disclose their major donors more rapidly and electronically (the Real Time Transparency Act). As Sen. Angus King (I-Maine) explained in the hearing, just knowing that “Americans for Greener Grass” paid for an ad isn’t really disclosure, because it doesn’t tell you anything about the agenda of whoever is providing the financial support for the group.

The Supreme Court was wrong when it assumed that the new corporate political spending the justices allowed in Citizens United would be disclosed to the public and to a corporate donor’s shareholders, since there are no legal requirements that corporations disclose all of their political spending.

Congress attempted to respond to the Citizens United decision and create a comprehensive disclosure system in 2010, when the DISCLOSE Act was approved by majorities in both chambers of Congress, but then failed by one vote to overcome a party-line filibuster in the Senate. Some critics argued at the time that the bill unfairly regulated corporations while requiring less disclosure from unions. As we explain in our new Demos paper, this is far from the truth. Corporations and unions face very different rules and requirements for their political spending. Labor unions must publicly disclose all of their political spending to the Department of Labor. But in the wake of Citizens United, there are many avenues through which corporations can spend money in politics while hiding their financial support for particular candidates or causes.

Both unions and corporations must disclose to the FEC any direct political spending made to finance independent expenditures and electioneering communications, but the similarities end there. Unions are required to report the money they spend not just in federal elections, but also for state and local office. Corporations are not subject to these same requirements, except in a few states that have strengthened their disclosure laws. Unions are required to report get-out-the-vote campaigns, voter education campaigns, fundraising, and any politically related litigation expenses. Corporations are not. Unions are required to disclose all donations to 501(c)(4) groups on their Schedule 17 form. Corporations are not.

Why does this matter? Corporate donors spend big: The U.S. Chamber of Commerce spent $69,506,784 on elections in 2010 and 2012, without identifying the source of those funds, and was the biggest outside spender in the 2010 elections. And according to the research of Martin Gilens, the Chamber of Commerce and other corporate donors lobby against the expressed preferences of most Americans.

In contrast, unions advocate in favor of the expressed preferences of most Americans. Gilens notes that “unions would appear to be among the most promising interest group bases for strengthening the policy influence of America’s poor and middle class.” Corporate spending and union spending aren’t just different in terms of how they are regulated, they also represent the interests of different groups. It’s time to put unions on the same footing as big corporations.

Citizens United changed the game, but the rules have not kept up. Just as unions report their spending to the Department of Labor (which posts the reports online), the Securities and Exchange Commission has the authority and responsibility to require that corporations report their direct and indirect political spending to their shareholders, who have a right to know if and how their investments are being used for political purposes. A group of legal scholars has petitioned the SEC to mandate corporate disclosures in the interest of shareholder accountability. In response to the huge support it has received, the SEC added consideration of the rule to its agenda but has sincedropped it in the face political pressure.

Congress and the SEC now have another chance to act to get this simple principle right. If not, undisclosed corporate spending will continue to poison our democracy.

Let’s pass the DISCLOSE Act

Yesterday, Senators Sheldon Whitehouse, Charles E. Schumer, Michael Bennet, Richard Blumenthal and Elizabeth Warren of Massachusetts re-introduced the DISCLOSE Act, a comprehensive disclosure legislation that came within one vote of overcoming a party line filibuster and adopting comprehensive disclosure legislation. This time, Congress should pass the DISCLOSE Act and require disclosure of contributions to organizations engaged in political spending.

When the Supreme Court struck down corporate and union spending limits in Citizen’s United, Justice Anthony Kennedy wrote for the court that, “disclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way.” Later, when court struck down aggregate limits in McCutcheon v. FEC, Chief Justice John Roberts noted that, “With modern technology, disclosure now offers a particularly effective means of arming the voting public with information.” On at least two occasions then, the Court has chosen to remove limits on political spending on the implicit premise that this spending would be disclosed.

Sadly, Citizen’s United did not lead to more disclosure but instead to a wave of dark money. A recent study by the Center for Responsive Politics finds that “the percentage of spending coming from groups that do not disclose their donors has risen from 1 percent to 47 percent since the 2006 midterm elections.” The rise of dark money has been lopsided because unions are held to a far different standard than corporations are when it comes to political spending.

First, unions must publicly disclose all of their spending and also itemize payments over $5,000 with the date, name and address of the recipient, and purpose of the payment. Union members, the general public and journalists have easy access to union political spending with an online, searchable database. Union members can therefore decide whether the union leadership is spending money in line with their preferences and vote out the leadership if they are not. Further, some union members who dislike the way the union is disbursing funds can receive a refund of a portion of their dues. In some instances, public sector unions must seek the consent of members before they can make political contributions.

In addition, unions are far smaller than corporations and rarely use 501(c)4s to influence political campaigns. As Robert Maguire of the Center for Responsive Politics tells us, “even if unions funneled every dime  liberal 501(c)4s spent over the four years from Citizen’s United to present, that spending would still be nearly four times less than what their conservative counterparts spent in 2012 alone.” He notes that, American Encore, a Koch-backed conservative foundation, spent more money on the 2012 election than all of the union spending and liberal 501(c)4 spending from 2010 to 2014 combined.

When unions give to 501(c)4s, they must disclose their donation, when a corporation does, no such disclosure is required. Therefore, corporations now funnel hundreds of millions through “social welfare groups,” which have exploded in the past few years.

Center for Responsive Politics, OpenSecrets.org

Shareholders or employees who disagree with the way a corporation is spending money have no right to redress. While a growing number of corporations (about 100) have chosen to voluntarily disclose their donations, they frequently do so after elections cycles and often choose not to disclose more potentially controversial donations. Even Aetna, which has received praise for its disclosure policies, gave $7 million to two 501(c)(4) groups in 2012 but didn’t disclose their contributions even though they had an agreement with their shareholders. This isn’t the case everywhere: in Britain corporations must receive shareholder consent for their political budgets.

Corporate spending and union spending aren’t just different in terms of how they are regulated, they also represent the interests of different groups. Princeton political scientist Martin Gilens has used extensive polling data to compare the preferences of Americans across the income spectrum with organizations that influence the political process. He notes in his book Affluence and Influence, “based on unions’ strong tendency to share the preferences of the less well-off and the large number of policy areas they are engaged in . . ., unions would appear to be among the most promising interest group bases for strengthening the policy influence of America’s poor and middle class.” Corporate donors and business lobby groups, on the other hand, tend to pursue policies that are not in line with the preferences of most Americans. This bolsters the case for making disclosure for all groups mandatory.

Author’s Calculations based on Affluence and Influence, Table 5.7

In fact, polls show that 9 in 10 Americans believe there is too much corporate money in politics and majorities across the political spectrum support more disclosure. A bipartisan group of law professors have petitioned the SEC to “develop rules to require public companies to disclose to shareholders the use of corporate resources for political activities.” A petition urging the SEC to require corporate disclosure has more than 500,000 citizen signatures as well as the support of more than 70 members of congress and Vanguard Founder and CEO John Bogle.

However, the SEC has removed developing such rules from its agenda. Disclosure is a simple proposal that has been endorsed by the Supreme Court, the American people, law professors and politicians from both sides of the aisle. Recent evidence suggests that disclosure would increase policymaker’s responsiveness to their consituents. In the absence of SEC action, the DISCLOSE Act is the best way forward. While it’s only the first step in taking back our democracy, it should be an easy one.

Originally appeared on Policyshop.