Wednesday, August 28, 2013

Poaching Is Bad, But It Looks Great On A Résumé

I generally like the work of the Public Policy Forum. Although, I've had issues with some of their analysis, overall they seem to do a good job presenting useful data.

But this is more about the presentation of ideas by the Journal Sentinel.

A recent article by John Schmid - Milwaukee's 'poised for vibrancy,' Public Policy Forum leader says - celebrated the new Public Policy Forum leader for doing the exact thing that a recent Journal Sentinel editorial preached against.
When Milwaukee set out in 2005 to create a new economic development framework, its business leaders began by poaching ideas from Chicago, which had worked successfully to lure the Boeing Co.'s headquarters away from Seattle only a few years earlier. 
In doing so, the Milwaukee 7 — as the seven-county economic strategy agency went on to name itself — appropriated a few key concepts from Virginia Carlson, the founding director of research at the more established World Business Chicago and part of the team behind the Boeing coup.
On July 30, 2013 the Journal editorialized, Governors Should Swear Off Poaching.
Poaching. That's the counterproductive, and sometimes costly, practice of trying to lure jobs across state lines.

Too many governors, including Wisconsin's Scott Walker early in his administration, seem to think that it works. It doesn't. Companies rarely move because of government incentives — and even when they do, it's a zero-sum game that does nothing to make the economic pie larger.
So, poaching is costly, counterproductive, and does nothing to grow the economic pie. Yet, it is also somehow a meaningful feather in the cap of the Public Policy Forum's new director.

Midweek Reading

You Give Religions More Than $82.5 Billion A Year

This year, Walmart is back with a new "Buy America" program. In January, the company announced that it would purchase an additional $50 billion worth of domestic goods over the next decade. This week, Walmart is convening several hundred suppliers, along with a handful of governors, for a summit on U.S. manufacturing .

This sounds pretty substantial, but in fact it's just a more sophisticated and media savvy version of Walmart's hollow 1980s Buy America campaign. For starters, $50 billion over a decade may sound huge at first, but measured against Walmart's galactic size, it's not. An additional $5 billion a year amounts to only 1.5 percent of what Walmart currently spends on inventory.

Worse, very little of this small increase in spending on American-made goods will actually result in new U.S. production and jobs. Most of the projected increase will simply be a byproduct of Walmart's continued takeover of the grocery industry. Most grocery products sold in the U.S. are produced here. As Walmart expands its share of U.S. grocery sales — it now captures 25 percent, up from 6 percent in 1998 — it will buy more U.S. foods. But this doesn't mean new jobs, because other grocers are losing market share and buying less. What it does mean is lower wages. As I reported earlier this year, Walmart's growing control of the grocery sector is pushing down wages throughout food production ...

In a way, Walmart's Buy America program represents the home stretch of the economic transformation the company set in motion decades ago, when it set out to replace the American middle class, rooted in small business ownership and unionized jobs, with a vast underclass that has little choice but to rely on theshoddy, short-lived products sold at big-box stores to get by.
The Reason Americans Are Less Healthy Than Other Developed Nations 
Back in 1990, shouts a new study just published in the Journal of the American Medical Association, the United States ranked a lowly 20th on life expectancy among 34 major industrial nations. The United States now ranks 27th — despite spending much more on health care than any other nation... 
Just how does inequality translate into unhealthy outcomes? Growing numbers of researchers see stress as the culprit. The more inequality in a society, the more stress. Chronic stress, over time, wears down our immune systems and leaves us more vulnerable to disease.

Saturday, August 24, 2013

The Most Precious Of All

Tom Barrett is walking a precarious line by talking about expanding Act 10. Barrett believes that by reining in the police and firefighters unions he could eventually aid both departments and make the city safer at the same time. A noble, yet circuitous and confrontational proposition.

The police and firefighters are holding to the rationalization that they are The Public Safety and thus completely different from and above other public employees.

James Palmer, the executive director of the Wisconsin Professional Police Association, bellows, "The mayor should understand that his public appeal for an expansion of Act 10 to police officers and firefighters ignores the reality that public safety employees are already paying toward their health insurance and their pensions in largely the same manner as general municipal employees. Since the 2011-2013 state budget was enacted, public safety employees can no longer negotiate over their health insurance benefits and costs. In addition, the vast majority of public safety contracts require police and fire employees to pay their share for pensions."

Other public employees also pay toward their health insurance and retirement, and they also can't negotiate their health insurance benefits or costs. And, these other public employees haven't seen the 3 and 4 percent raises the police and firefighters have seen over the last six or seven years.

Palmer goes on to decry, "Any assertion that expanding Act 10 will free up funding that could be used to hire more employees is without any reasonable basis."

If Act 10 can't free up funding, why was it a good idea when it was used to bludgeon the other public employees? Wasn't the initial point of Act 10 about saving money and saving budgets? Is Mr. Palmer admitting the Act 10 emperor has no clothes? Or is he just willing to throw other union members under the bus as long as police and fire members are exempted?

The police and fire protection departments are responsible for roughly 50 - 75 percent of most city budgets. These two departments are where most taxpayer dollars go. If there is anywhere to find efficiencies, these would seem to be the departments. In Milwaukee, police and fire account for nearly 59 percent of the budget. And, as we can also see, their budgets have increased almost 16 percent over the last decade.

Share of budget for general city services:

                                            2003            2013
Fire Dept.                            16.1%          17.9%
Police Dept.                         34.6%         40.6%
Protective Services total      50.7%         58.8%

Palmer persists, "It's important to recognize that public safety employees are unique, both in the challenges that they face and in the critical role that they play in our communities." Sure, but teachers, mental health care workers, social workers, engineers constructing our bridges, scientists providing our clean water supply, and a host of other public workers play a pretty critical role, too.

As James Rowen details, "The City of Milwaukee currently employs 6,865 employees. 4,168 are general city employees (including fire and police civilian staff). 2,697 are sworn fire and police employees...their average annual salaries. $41,361 for general city employees. $65,649 for sworn police employees. $67,554 for sworn fire employees." The average police officer or fight fighter makes over one and a half times as much as a general city employee.

Palmer's revisionist history continues, "He [Barrett] now appears to have abandoned the very principles that once drew WPPA's support, thus causing us to question whether that support was misplaced."

"...That once drew the WPPA's support"? Yeah, as I remember, the WPPA supported Scott Walker. Which is why they were preferentially carved out of Act 10. It seems the police and firefighter unions support whomever gives them preferential treatment. 59 percent of the entire Milwaukee budget already goes to these two departments, how much more do they want?

Maybe Barrett is on to something here. Maybe the police and firefighters should learn to live with the same rules as their other union brothers and sisters.

The False Promise Of The Entrepreneurial University

Tuesday, August 20, 2013

Minimum Wage

Midweek Reading

Concept Of "Limited Government" Is Right-Wing Bunk
Move To Ghost Job & Back Gives Capitol Police Chief Big Raise
Chief Dave Erwin — who has overseen a crackdown on Walker protesters at the statehouse — received an overall salary hike of 11.7%, to $111,067 a year, the same rate as his predecessor. That amounts to an $11,680 annual raise... 
Walker officials took similar steps to skirt civil service salary limits for Deputy Police Chief Dan Blackdeer. His pay jumped by 14.6%, to $96,048, on June 16.
Why Pot Makes You Feel Good
A Texan Tragedy: Ample Oil, No Water
Social Security A Model For Washington Budgetmaking
How The State Borrowed A Billion Dollars To "Cut" Your Taxes
Billion Dollar Blunder
Five Facts About Household Debt In The United States

Saturday, August 3, 2013

Scott Walker Is FDR: F'ing Dumbass Redneck

It was all I could do to keep from falling out of my chair when I read Scott Walker's latest bullshit self-congratulatory rhetoric, Wisconsin A Model For Country, Scott Walker Says. [This despite the fact that the budget Governor Walker just signed also created a structural deficit of $505 million in the next biennium.]
"The position I pushed is not unlike the principle that Franklin Delano Roosevelt — not exactly a conservative — pushed as well when it came to public sector collective bargaining," Walker remarked at the annual Governmental Research Association policy conference.
FDR's opposition to collective bargaining, per se, was more against public workers striking or using quasi- militant tactics as a means to an end. He supported the public workers' voice in attempts at fair treatment. Roosevelt said, "It is one of the characteristics of a free and democratic nation that it have free and independent labor unions."

As the Library of Congress details:
Although the future of labor unions looked grim in 1933, their fortunes would soon change. The tremendous gains labor unions experienced in the 1930s resulted, in part, from the pro-union stance of the Roosevelt administration and from legislation enacted by Congress during the early New Deal. The National Industrial Recovery Act (1933) provided for collective bargaining. The 1935 National Labor Relations Act (also known as the Wagner Act) required businesses to bargain in good faith with any union supported by the majority of their employees.
Public works and unions became kind of a big thing specifically during FDR's time in office. For Walker to claim a parallel between himself and Roosevelt for doing the exact opposite during his reign as Wisconsin governor is batshit crazy.

[Above: FDR visiting the Allis-Chalmers factory near Milwaukee, Wisconsin during an inspection trip. Milwaukee, Wisconsin, September 19, 1942.]
Walker goes on to claim one of his major policy innovations was pension reform. Yet, Walker himself, in the Journal article, even states, "Our pension system is the only one in the country that's fully funded." As a Pew report, A Widening Gap In Cities, documents:
At the end of fiscal year 2009, the largest city in Wisconsin had the best-funded system among 61 American cities, with 113 percent of the money.
The report also found the State of Wisconsin, at the end of fiscal year 2009, had 100 percent of needed funding.

More great Scott Walker logic - reform the program (our pension system) that is performing better than any similar program in the country. So, if you're doing something better than anyone else, that's the thing you want to change, and for this, you should be heralded as a model for the country?

WEDC Not A Good Model For Deploying Scarce Resources

The Journal Sentinel actually had a good idea, Governors Should Swear Off Poaching. Our economy doesn't gain anything by Wisconsin stealing jobs from Illinois - the so-called war among the states. It merely realigns jobs without any growth occurring. 

Yet, once the Journal began drilling down further into their editorial's details, things got way off course.
Walker deserves credit for helping launch the Wisconsin Economic Development Corp., which is a good model for deploying scarce resources even if poor management at the agency resulted in a series of embarrassing mistakes.
Good Jobs First actually published The Risks of Privatizing State Economic Development Agencies in January 2011.
Transferring state business recruitment functions from government agencies to private entities is not the panacea that its proponents suggest. In fact, the track record of those few states that have taken the step is filled with examples of misuse of taxpayer funds, political interference, questionable subsidy awards, and conflicts of interest. Rather than making economic development activities more effective, privatization often is little more than a power grab by governors and powerful business interests...
Most of the seven states that currently make use of economic development PPPs have experienced a variety of performance problems. These include the following:

 Misuse of taxpayer funds (Rhode Island, Florida and Wyoming)

 Excessive executive bonuses (Virginia, Florida, Michigan and Wyoming)

 Questionable subsidy awards by the subset of PPPs that have a role in that process (Michigan and Rhode Island)

 Conflicts of interest in subsidy awards (Florida, Utah and Texas, which makes limited use of PPPs)

 Questionable claims by the PPP about its effectiveness (Wyoming, Florida, Utah and Indiana)

 Resistance to accountability (Florida and Michigan)
Why does the Journal continue to push an idea that has failed everywhere it has been tried? Why do they still defend such a bogus program, even after it has been shown to be an embezzling debacle here in Wisconsin?

Scott Walker Among Worst Governors In America

Group names Scott Walker among the worst governors in America
The Worst Governors In America 
Gov. Scott Walker (R-WI) was elected in 2010 and won a recall election in 2012. He is running for re-election in 2014. His inclusion stems from: (1) using his office to promote donors’ interests; (2) illegally using state troopers to track down his political opponents; (3) an investigation into illegal activity by his aides; (4) diverting money from a nationwide mortgage settlement; (5) an investigation into the state economic development corporation he chairs; (6) dismissing a political appointee for signing the recall petition against him; and (7) advocating for new voter identification restrictions.

Walker & Republicans Wrong On Budgets & Taxes

Gov. Scott Walker signs 2-year, $70 billion Wisconsin budget
The budget approved by the Republican-controlled Legislature includes all of Walker’s priorities, including a $650 million income tax cut, expansion of private school vouchers and changes to the state’s Medicaid and food stamp programs... 
The “biggest, boldest reform” in the budget was new work requirements for people on food stamps. Able-bodied adults must spend at least 20 hours a week working or getting trained for a job, or they will be limited to three months of benefits over three years. Walker described this as a kindness. 
“We say it’s time to get the training, and the access to training so that when a job becomes available, you are ready to get in the game,” he said.
Tax Plans for Wisconsin Go From Bad to Worse
Here is how the tax cut would be distributed among income groups: 
- The top 5% of earners alone, a group with an average income of $392,000, would receive more than 1/3 of the benefit of the income tax cuts.
- The top 20% of earners, a group with an average income of $183,000, would receive more than 2/3 of the benefit.
- The bottom 60% of earners – those making $60,000 a year or less – would only receive 11% of the benefit of the income tax cuts.
- The 20% of the Wisconsinites with the lowest incomes would receive just two cents out of every $100 in individual income tax cuts under this proposal.

Bad Budgets Become Law in Ohio and Wisconsin
The budget Governor Walker just signed also created a structural deficit of $505 million in the next biennium.
The Truth About State Taxes
The record suggests that taxes in Wisconsin were lower under Doyle than under any governor in the last five decades, as compared to other states...
One of the peak levels of taxation came under Republican Gov. Tommy Thompson, who increased taxes to the point that they took 13.1% of personal income in Wisconsin in 1996, when the state ranked 3rd in taxes nationally. The state still ranked 4th when Thompson left office...
Another way of measuring this is to look at total state-local spending. The WisTax figures show the 2011 state/local expenditures per person were $8,351 nationally and almost exactly the same, $8,383 in Wisconsin.
For Further Reading:
Legislative Fiscal Bureau 2015-2017 General Fund Budget
Budget Bill Turns Large Surplus into a $505 Million Hole in 2015-17 Biennium

Income Inequality

Did Sprawl Kill Horatio Alger?
A Tale Of Two Rust Belt Cities
Will SCOTUS Voting Rights Ruling Yield A Blue State Refund?

Without State Spending There'd Be No Google Or GlaxoSmithKline
Econ 101 Is Killing America
McDonald's Budget Plan Leaves Out Corporate Welfare
The Case For Paying People More
Mr. President, Have Pity On The Working Man
How Intellectual Property Reinforces Inequality
Is Productivity Being Translated Into Pay Increases?
Higher Productivity Used To Mean Higher Wages. Has That Broken Down?

Wages Fall At Record Pace
Walmart One Of The Major Welfare Recipients In America
Who's Dependent On Food Stamps? Cheapskate Corporations
Inequality In America: The Data Is Sobering

US Infrastructure Is A Disaster

  • 1 in 9 of the country's bridges are rated as structurally deficient, meaning they require significant maintenance, rehabilitation, or replacement. 
  • Of the 84,000 dams in the U.S., 14,000 are considered "high hazard" and 4,000 are deficient. It would cost $21 billion to repair these aging dams.
  • 42% of the country's major urban highways are considered congested, and 32% of major roads in the U.S. are in poor or mediocre condition.
  • Even though a third of Americans don't drive cars, 45% of households lack access to transit. 
  • There are 240,000 water main breaks in the U.S. each year, and many water mains and pipes are over 100 years old.
  • The Federal Aviation Administration anticipates that the national cost of airport congestion and delays will nearly double from $34 billion in 2020 to $63 billion in 2040.
  • 90% of locks and dams experienced an unscheduled delay or service interruption in 2009. Barges being stopped for hours can prolong transport of goods and drive up prices.
  • Congestion on rail lines is costing the U.S. economy about $200 billion a year, or 1.6% of economic output.
  • Although public school enrollment is gradually increasing, national spending on school construction declined to $10 billion in 2012, about half of what was spent before the recession.
  • National Park Service facilities saw 279 million visits in 2011 and has a deferred maintenance backlog of $11 billion.
10 Signs That US Infrastructure Is A Disaster

Expect Wage & Benefit Givebacks

Abele Dumps County Transit Company
County Executive Chris Abele has decided to award the $164 million dollar county transit contract to a new company, MV Transportation, and drop Milwaukee Transport Services (MTS), the non-profit operation that has run the county bus system for decades...
The not-for profit operator would be replaced by MV Transportation, a privately held corporation based in Texas, whose website says it “provides passenger transportation management, operations, and related services to jurisdictional and private entities around the world.” ...
However, once a new entity takes over, the contracts for all union workers would have to be renegotiated, and the new company may push for more efficiencies. Anticipating that, the bus drivers’ union, ATU 998, has been circulating a PowerPoint presentation opposing the move to a for-profit management firm. 
When asked if he expected wage or benefit givebacks, Abele said “I honestly don’t know. I can tell you that was not the goal. The goal was better services and to keep fares down.”
In this instance, Abele is being naive, stupid or devious. Or maybe it's just his typical cliched response/excuse, providing little insight into his actual thought-process, giving little explanation as to how he decided a major program change for the county. "How was I to know they'd save money by cutting corners and wages?"

Privatization is always about cutting benefits, decreasing pay, and/or breaking unions. I'd like the county executive to explain how he believes this move will "keep fares down" while providing better service.

Typically, in cases like this, the managers continue to receive lofty salaries (and more often than not actually get paid more), while the workers see their pay and benefits slashed.

It would be one thing if the pay and benefits of present workers were guaranteed to remain intact, whilst the new company was also making assurances of more routes and improvements to other services. But this seems like more of the hope-and-prayer variety of public policy decision-making.

Does Abele really believe lower-paid, disgruntled workers are going to provide better service? Otherwise, what exactly are the cost-saving methods this new company is going to initiate that are going to reap big rewards for the county? Are there any clawbacks or stipulations in the new contract?

I guess some politicians feel news-grabbing headlines prove they're doing something positive for their community.

For Further Reading:
Walker's Privatization Debacle