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.

Why Can’t We Stop Gun Violence?

Since the Sandy Hook tragedy of 2012, there have been 17,042 gun deaths and . The Onion captured the frustration many Americans have about the gun violence problem: “ ‘No Way To Prevent This,’ Says Only Nation Where This Regularly Happens.” It’s certainly true that gun violence is unique to America, the chart below created with data from a recent paper by Sripal Bangalore and Franz H. Messerli, who find that higher levels of gun ownership correlate with more gun deaths (the study finds no correlation with the level of mental illness).

GunsKillPeople

 

The data show that the U.S. is the clear outlier with regard to gun violence (with 10.2 gun deaths per 100,000) while Japan, which has almost no firearm ownership, has almost no deaths as well (.06 deaths per 100,000 people). Japan’s success is due to having possibly the most strict gun-control regime of any country. In an article on Japan’s gun control regime, David Kopel notes that, “The only type of firearm which a Japanese citizen may even contemplate acquiring is a shotgun.” But even shotguns require an extensive licensing procedure which involves a written test as well as a test of mental health. Applicants and their relatives must undergo a background check and all guns must be kept in a locker. Handguns are banned. In many parts of America, a prospective gun owner can simply go to a gun show and obtain a gun, no questions asked.

Unlike in the U.S., mass shootings frequently spur policy changes in other countries. Australia, for example, passed strong gun control laws after a deadly massacre in 1996 and now has  a far lower gun violence rate than the U.S. (1.04 deaths per 100,000). However, a Japanese or Australian-style gun control regime is impossible in the United States. The Supreme Court struck down a ban on semi-automatic weapons and handguns in District of Columbia v. Heller, meaning that the only weapons that could be subject to a Japan-style ban are assault rifles. This decision was extended to the states in McDonald v. Chicago. Sadly then, the U.S. will ever get to down to a level of gun ownership as Japan or Australia.

But simply because the U.S. won’t get down to the gun ownership levels of Japan doesn’t mean we should do nothing. Within the U.S., states have dramatically divergent gun ownership rates. The Daily Beast finds that Kentucky had 58,196 background checks per 100,000 residents in 2012, while New Jersey had only 938. Hawaii, New York and Rhode Island had 1,208, 1,652 and 2,106 respectively. A 2013 study in The American Journal of Public Health performed an analysis similar to the Bangalore/Messerli study and finds the same results across the United States. Some states have very high levels of gun ownership (and therefore gun deaths) while others have low rates of gun ownership. Studies find that states with stricter gun control laws also have lower levels of gun violence. Other studies show that fewer guns lead to fewer gun suicides. Commonsense regulations like expanding background checks and removing the gun-show loophole have empirical backing as well as the support of most Americans. The question, then, is not “how” to prevent gun deaths, but rather, why we’re not, and the answer is clear: the National Rifle Association (NRA).

The NRA is high on its own political success. As David Frum notes, “No crime or atrocity, not even the massacre of children at Sandy Hook Elementary School, has checked the strong trend of U.S. public policy to make ever more lethal weapons ever more easily available to ever more people, including people with histories of domestic violence.” Frum understates the NRA’s extremism. The organization has  has even gone as far as fighting smart guns, which use new technologies to ensure that children can not unintentionally fire the gun (one requires the user to wear an accompanying wristwatch to fire it). Given that one study finds that smart guns reduce gun deaths significantly, such technologies are a no-brainer. The NRA also opposes laws requiring gun owners to safely store weapons, which have a track record of success.

The problem is that the NRA gains these political successes by lobbying against the interests of most Americans. Political scientist Martin Gilens writes in Affluence and Influence, “By far the strongest association between interest group alignments and policy outcomes concerns gun control.” He compares the stated policy preferences of Americans to those of interest groups, unions and corporations. He finds that interest groups tend to align with Americans on economic and social welfare policy, but strongly diverge on gun policy and environmental policy (on the chart below, a positive number indicates that the organization is pursuing policies that are aligned with Americans’ preferences, while a negative number indicates that they are lobbying against Americans’ preferences).

IGAlignment1NRA

 

Gilens finds, disturbingly, that interest groups are incredibly successful on the issue of gun control, but also that interest groups pursue policies that are radically divergent from public preferences. Gilens breaks down the data so we can see individual organizations.

IGAlignment2NRA

 

The chart shows that while some organizations, like the AARP lobby for policies with broad support among Americans, the National Rifle Association (NRA) does not (and this holds across the income spectrum). How does the NRA exert such a powerful influence on Washington? Certainly part of the answer is money. Data from the Center for Responsive Politics show that organizations in favor of gun control are vastly outspent by those opposed to it.

PoliticalDonationsNRA

Americans will always likely have more guns than other developed countries. The Supreme Court has decided strongly in favor of the NRA’s interpretation of the Second Amendment (in District of Columbia vs. Heller). But most Americans, including myself, aren’t trying to “take away your guns.” We’re trying to keep guns out of the hands of killers and children. Sadly, the NRA has the power to stop these common sense regulations. The Supreme Court has overstepped its bounds, but there is still room to act. We know what works. The people want it. The question is whether politicians have the gumption to tackle organized interests.

Something resembling this piece was published on Policymic.

How to Fight Oligarchy: Lessons From The States

Patrick Flavin is an assistant professor in the Department of Political Science at Baylor University. He is also doing pioneering work in the area of policy representation at the state level. You can find a discussion of his work here. I talked with him about his studies and what they tell us about fixing our democracy.

Sean McElwee: What exactly did you do? You have a rank of states by political equality of representation, what does that mean?

Patrick Flavin: All the papers use a pretty similar method. It basically measures how strongly the relationship is between the higher your income is and the likelihood that your ideology will be well-represented by policy. So think of two people and we had a number line from a one to a ten and the state generally passed policy measures that are a six and someone who is at the number line at the six would be well represented, someone with a one would not be well represented. So the table ranks how much income correlates with that. In Mississippi there is a strong relationship between your income and your representation, in North Dakota that relationship is not strong.

S: Does the inequality of a state affect the inequality of representation?

P: Usually states with higher levels of economic inequality also tend to be the most politically unequal. States with a big divide in rich and poor in income also tend to have a bigger divide in political representation. It’s not a one-to-one relationship or a perfect correlation, but it’s a general pattern. For example, Mississippi has a fair amount of really poor people with more liberal preferences, but Mississippi tends to pass very conservative legislation.

S: You had an interesting paper on what constitutes responsiveness. For some people  it’s ideological preferences and for some people it’s how much money is being brought back to the state.

P: The study of political inequality bounces between two measures. The first is opinions or ideology, which we discussed before. The second is interests. We would assume, I would argue rightly, that those at the bottom end of the spectrum would prefer more spending on public assistance and greater public spending. Surveys support that idea. I find that states that have stricter campaign finance laws pass more egalitarian policies on public assistance. That’s another way of measuring representation. There is not an agreed upon way of doing this. Martin Gilens looks at individual policies. We all tend to be finding the same thing, which is that there is unequal representation between the rich and poor.

S: But you’re the only one who has done this on the state level, which gives us a chance to see what works. What works?

P: One relationship is disclosure laws. There are three ways to regulating campaign finance. The first is ensuring that donors have to disclose who they are donating to. The second is limiting how much donors can give. The third is moving to a public financing system. The only type of policy I found with a strong relationship with my measure was disclosure requirements. I think that’s important because disclosure is something that both parties can agree on. There tends to be more agreement on the question. I also find that states the more strictly regulate lobbying and lobbyist interactions and what type of gifts they can give – those states are more egalitarian in terms of whose opinions get represented. That’s a good thing to learn for the states and possibly bring to the federal level. This policy is especially good in the wake of Citizen’s United, because in the wake of Citizen’s United individual and organizational limits allow individuals to spend independently.

S: Now what policies don’t have a strong correlation? You found, for instance, that more participation for low-income voters doesn’t have a strong effect.

P: Right. That’s depressing but it’s also consistent with what others have found. Places where the poor turn out they don’t seem to have more representation, which is a very troubling finding. The poor don’t get a whole bunch of a boost from voting. There is also research showing that minorities get less of a representational boost from turnouts than whites [Flavin refers here to the research of John Griffin and Brian Newman.]

[Interviewer’s Note: Flavin also points out that other studies find that turnout affects representation. One study specifically examined the low-income turnout, and found policy responsiveness increased with a higher low-income turnout. See this summary.]

S: Could gerrymandering and housing segregation explain the racial gap?

P: That’s probably part of the explanation. You have districts with Democratic candidates winning with 90% of the vote. It can definitely help explain racial inequality, but it can’t help with income inequality.

S: You also have a study that finds the more regulations a state has the more money that is distributed to the poor?

P: Yes. There are six policies I looked at: disclosure, limits on individuals, limits on organizations, whether there are public funds for governors, public funds for legislatures and clean elections. I gave each state a score for each year examined [1962 - 2006]. Then I compared it to what percentage of a state’s budget goes toward public welfare in general and then to cash assistance in particular.

S: To put it baldly, then, if we don’t get money out of politics, it won’t matter as much if poor people vote?

P: If poor people voted at the same rates as rich people, I’d expect they’d be better represented but at an institutional, practical recommendations level, passing laws that limit campaign finance are doable, so I focus on the laws side of things. There is evidence that these laws work.

S: Do you have any thoughts on the DISCLOSE Act?

P: I find that the stringency of disclosure requirements is statistically related to the equality of political representation across the states. Out of possible campaign finance fixes disclosure requirements seem to have the most bipartisan support, though this support is certainly not universal. It is probably the most practical/realistic area to push for reform.

How ordinary Americans can influence policy – no super PAC required

More and more studies are showing that the wealthy and corporations exert disproportionate influence over the U.S. political system. This viewpoint has been well documented by scholars Larry BartelsMartin Gilens and Kay Lehman Schlozman, among others.

Recently, Benjamin Page and Gilens disturbed many Americans with their finding that “average citizens’ preferences have little or no independent impact on policy.” Their data suggest that the wealthy have 15 times the influence of the middle class.

As remarkable as this conclusion is, many of the reporters discussing the study failed to read it carefully and missed other important findings. For example, Page and Gilens found that the preferences of elites actually correlate fairly well to the preferences of the average citizen (with a coefficient of 0.78, with 1.0 indicating exact alignment and –1.0 reflecting inverse correlation), whereas business groups have preferences that are far more divergent (–0.10). Public interest groups, such as unions and the American Association of Retired Persons, correlate slightly better with the interests of the average voter (0.12). However, pro-business groups, whose interests  largely conflict with the average voter’s, have about nine times the influence as typical voters.

In an e-mail, Page noted that the U.S. might get some “democracy by coincidence” — meaning that the preferences of the affluent for the most part align with those of the middle class — but such luck rarely occurs with the preferences of business groups. He also said that while his work with Gilens focuses on the top 10 percent of income earners, the top 1 percent and the top 0.1 percent may have even more influence and more divergent preferences as well. In a paper with Jason Seawright and Larry Bartels, Gilens showed that the top 1 percent have far different preferences and are far more likely to be politically active. This means that reformers must curb the influence of the superwealthy and corporate lobbying (see chart: a higher number indicates strong correlation with the preferences of the middle class and strong influence on policy, a negative number indicates divergence with the preferences of the middle class and weak influence on policy).

Floodgates of money

As disconcerting as these findings are, the problem has been made worse by recent Supreme Court decisions — namely, Citizens United and McCutcheon — that opened the floodgates of money flowing from the superrich to politicians and super PACs (See chart.) If the wealthy and business groups had disproportionate influence from 1981 to 2002, when these studies were conducted, imagine their power now that the system is inundated with money. For instance, in the 2012 election cycle, casino magnate Sheldon Adelson gave more money to influence elections than the total individual contributions of the residents of 12 states.

AlJazeeraChart2

What, then, is to be done?

To fix these oligopolistic trends, we must turn to the states for ideas. Patrick Flavin, an assistant professor of political science at Baylor University, may have some answers on this score. He has been using methods similar (although not entirely comparable) to those used by Gilens, Bartels and Page to test which states are most responsive to the interests of citizens. “One nice thing about federalism is that the 50 states serve as laboratories of democracy,” he said. “So we can examine different laws and institutional arrangements in the states to see what might promote more egalitarian patterns of political representation.” What he finds should give reformers hope: There are policies to strengthen the voice of middle class voters.

Flavin has used his metric of political representation to see what state-level policies correlate strongly with high levels of equality of political representation. Below is a table with the raw ratings. A higher number means that a state is more responsive to citizens across the income scale, while a low score means that only the ideological views of the wealthier citizens is represented in policy.

chart
Source: “Lobbying Regulations and Political Equality in the American States,” Patrick Flavin

The table shows that voters are best represented in Montana, Minnesota and Oregon and poorly represented in Georgia, Alabama and Mississippi. In a working paper available online, Flavin shows that states with stringent lobbying regulations better weigh the interests of citizens across the income spectrum. This shouldn’t be too surprising; lobbying provides benefits for wealthy corporations and not necessarily for taxpayers. Business lobbyists are known not for considering the social, moral or environmental consequences of the policies they pushing for but for promoting the the narrow interests of the groups they represent. For example, most Americans support stronger gun regulations, but the National Rifle Association has ensured that gun regulations across the country remain lax.

No common sense

The big question is what happens when we get money out of politics. Corporations and special interest groups don’t generally donate only to one party: Their goal is not usually to elect ideologically similar candidates but to win the sympathies of legislators to their pet issues. The hope is that once the money influence is removed, policies will align more closely with the preferences of voters. There is also the possibility that cleaner elections will lead to more voter participation by decreasing voter cynicism.

Another of Flavin’s studies measures how policies to get money out of politics affects voter interests. He uses data on state spending priorities from 1962 to 2008. He also rates the states for each year on the basis of six factors: disclosure, limits on individuals, limits on organizations, provision of public funds for governors, provision of public funds for legislatures and clean elections. He finds that states with laws to keep money out of politics dedicate more money to redistributive programs.

Finally, states have experimented with various policies to increase voter turnout, thereby reducing the turnout gap between the rich and poor. Elizabeth Rigby and Melanie J. Springer examined what reforms affected voting inequality at the state level. They find that in states with high registration inequality, the motor voter law (a law that requires states to allow voters to register when applying for or renewing a driver’s license) had a modest effect on decreasing voting inequality and that same-day registration had a strong impact. Sadly, many efforts have been focused on getting out the vote; the far more important reform is boosting registration among lower-income voters. These findings are important because a recent study using 30 years of state-level data by William Franko, Nathan J. Kelly and Christopher Witko found “that where the poor exercise their voice more in the voting booth relative to higher income groups, inequality is lower.” Franko found that states with wider turnout gaps between the rich and poor are less likely to pass minimum-wage increases, have weaker anti-predatory-lending polices and have less generous   health insurance programs for children in low-income families. Policies to increase low-income voter registration could help increase their voice in the political process and lead to policies that benefit them.

These important findings suggest two things. First, there are common-sense ways to get money out of politics and take back our democracy. Second, reformers should work to implement more state-level reforms. In a federal system such as ours, states play an important role in shaping the distribution of income. We need to implement corporate lobbying reform, donor disclosure, public financing of elections and same-day registration. The influence of money in our political system isn’t inescapable, and we should look to the states to find effective measures to curb the power of money. However, as Fredrick Douglass noted, “Power cedes nothing without demand.” Simply knowing what works isn’t enough. We need to put these policies into action.

Originally Published on Al Jazeera

The American People Don’t Support the NRA’s Agenda

Commenting on the recent spate of mass shootings, President Obama said, “If public opinion does not demand change in Congress, it will not change.” He added, “Most members of Congress—I have to say to some degree this is bipartisan—are terrified of the NRA.” Obama is partially wrong to claim that the public needs to “demand change in Congress,” given the large literature on Congress’s poor responsiveness to the opinions of poor and middle-class voters. He is right to note the power of the National Rifle Association.

Political scientist Martin Gilens writes in Affluence and Influence, “By far the strongest association between interest group alignments and policy outcomes concerns gun control.” He investigated positions of interest groups and compared them to the public. He compared the “Power 25” group of lobbyists to the preferences of Americans at different points of the income spectrum. He finds, rather worryingly that on all issues, net interest group alignment, “is uncorrelated with the public’s policy preferences at any income level.” However, he finds that on some issues, the correlations are stronger. In the chart below, positive numbers indicate aligned interests, while negative numbers indicate divergent interests.

On economic issues, interest groups side with the rich on cutting taxes and reducing regulation, while they align with the poor and middle class on increasing spending. However, on environmental issues and gun control, interest groups are strongly divergent. Interest groups strongly disapproved of the Kyoto Protocol, which had strong support among Americans. Americans of all income levels support strong gun regulation, but interest groups strongly oppose such regulations. We can see below the strong difference between Americans of all income levels and the NRA.

How does the NRA wield such a strong influence on policymakers? After all, in the year following the horrifying Sandy Hook shooting states were far more likely to pass laws loosening gun regulations than tightening them. During that period, there were 74 school shootings. Gilens notes that “pro-gun control groups spent less than one-fifth the amount on lobbying that their anti-gun control opponents spent.” Data from the Center for Responsive Politics show the stark difference in spending between the anti-gun control lobby and those in favor of gun control.

There is also the strong possibility that politicians perceive those who are in favor of less gun control are more likely to vote on that issue alone. Further, Gilens notes that the only time politicians seem to vote against the gun control lobby is when the preferences of the affluent were strongly against the gun lobby.

 

All of this is incredibly disturbing, not only for the fate of democracy, but for the possibility of stopping gun violence, which plagues our country. The solution is to increase the voice of the middle class and poor and curb the power of special interests. Studies at the state level offer us solutions. For instance, Patrick Flavin finds that states with stronger lobbying regulations have lower political inequality. He writes that these states, “tend to weigh citizens’ opinions more equally in the policymaking process.” One of the issues he examines is gun control. Other studies suggest that boosting voter-turnout reduces voting inequality. Lower voting inequality is tied to higher minimum wage laws, stronger anti-predatory lending laws and more money dedicated to SCHIP. It’s possible that this could also mean more stringent gun regulation, since there is strong support across income groups.

Curbing the influence of lobbyists, money and organized interest groups, while strengthening the voice of the poor and middle class is the solution to gun violence. The people already support gun regulation, the problem is making their voices heard in a deck stacked against them. 

Originally posted on Policyshop.

Comparing the Policy Preferences of Unions and Corporations

The recent Martin Gilens and Benjamin Page paper finding that ordinary citizens have, “little or no independent influence on policy at all.” While the paper was covered extensively in the popular press, few bothered to even read the paper which notes, “ the preferences of average citizens are positively and fairly highly correlated, across issues, with the preferences of economic elites.” Gilens’s data look at only those in the top 10% making about $146,000 a year. It’s likely that the superwealthy in the donor class have far different interests, which is suggested by other research by Page, Larry Bartels and Jason Seawright. It is in the top 1% and above where there is a motive for rent-seeking andevidence of it.

The more important finding from the Gilens/Page paper is the influence of interest groups. The authors note that: “Interest group alignments are almost totally unrelated to the preferences of average citizens.” The chart below shows the correlation of different groups with those of the middle class and the group’s influence over policy. We can see that economic elites have more influence on policymaking, but also a stronger correlation with the middle class. Far more disturbing are business interests, which have large amounts of influence, but whose policy preferences differ markedly from the middle class (although there are still caveats).

It’s important to note that the “mass based interest groups” include groups like the National Rifle Association and American Israel Public Affairs Committee which do not share the interests of average citizens. At the same time, one corporate lobbying organization, the American Hospital Association, is actually slightly correlated with the interests of average Americans. To parse out which groups are aligned with the preferences of Americans and which are positively malign, I used data from Gilens’s book Affluence and Influence. I stuck to groups which had at least one statistically significant correlation (either positive or negative) with one group of voters (10th percentile, 50th percentile and 90th percentile). This comparison yields some interesting results. First, we can see that most unions actually take positions that strongly correlate with the preferences of all Americans, although the correlation is stronger for the lower and middle class.

Second, we can see that corporate lobbying groups do not, with one exception.

Corporations also push policies that do not share the support most Americans.

Other lobbying groups differ. The wealthy tend to be more socially liberal than the poor and middle class, which explains the divergence of religious organizations. The NRA enjoys little overlap with the public, while AARP is generally a force working in favor of the preferences of most Americans.

To illustrate these differences, I’ve put the organizations on a scatter plot, divided into four quadrants. The y-axis shows where an organization aligns with the the top 90th percentile. The x-axis shows an organization’s correlation with the bottom 10th percentile. An organization in the upper right quadrant shares the preferences of the wealthy and the poor. An organization in the lower left does is working against the interests of Americans. Here we see that unions are all in the top right quadrant. No corporations are in the right half of the chart, indicating that none share the preferences of the poor.

Finally, I show how well the various groups correlate with the middle class on another chart below. We see the same result.

 

This makes a preliminary case for focusing on corporate lobbying in order to make policymaking match the preferences of Americans. There are some caveats. It’s difficult to tell how well preferences match interests. Gilens notes in an essay for Boston Review thatJohnson’s Great Society was actually a low in terms of voter preference:

the majority of Americans were opposed to many of the other domestic programs of the Johnson years. The Great Society and the War on Poverty were not responses to an upwelling of public concern for the disadvantaged or a desire to expand the role of government in addressing social needs…

In contrast, the Iraq War represents a high:

At least at first, the Afghanistan and Iraq wars and Bush anti-terrorism policies had widespread public backing. The administration also enjoyed support from Americans at all income levels for the Medicare drug benefit, No Child Left Behind (a long-standing Democratic agenda item on which Bush partnered with Senator Ted Kennedy), and the faith-based social services initiative. New federal regulations on funding stem cell research matched public sentiments. The income tax cuts and estate tax repeal adopted in 2001 and 2003 were supported by majorities of Americans at all income levels even though they clearly provided the greatest benefits to those at the top.

Further, Gilens’s data are dated—the most recent are from 2002, before Citizens United,but after along with the rise of inequality. I’ve suggested that this means we should focus on corporate interests, but there is still a strong possibility that the 1% have very different interests than the middle class and 90th percentile (data from the Cooperative Congressional Election Study indicate that the 1% has interests more similar to the 90th percentile than average voters). Adam Bonica argues that the wealthy and corporations tend to donate in a bipartisan or moderate fashion. This does not suggest they share the interests of Americans, but rather that they are attempting to buy influence. Corporations aim to change policy – the best way to do that is to sprinkle donations across party lines. Far more important are their aims, which the data suggest may not be broadly in line with those of average Americans.

We should aim to reduce the influence of money as much as possible. However the data suggest Nietzsche may have been onto something when he said, “In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule.” While most Americans have broadly similar preferences, most corporate interest groups are fighting for an agenda that benefits only them.

Originally posted on Policyshop