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  • Driverless Cars, Innovation, and Regulation: Let's Not Mess it Up

    April 23, 2014 8:11 AM
    CEI General Counsel Sam Kazman about to take a spin in Google's self-driving car. (Photo by Marc Scribner) CEI General Counsel Sam Kazman about to take a spin in Google's self-driving car. (Photo by Marc Scribner)

    For the past several years, I've been writing about highly automated vehicles -- widely referred to as driverless cars -- and the huge potential they have in reducing injuries and deaths (over 30,000 Americans die on the roads every year), improving mobility for the disabled and elderly, reducing the drudgery of commuting, and helping the environment... provided policy makers don't mess it up with onerous laws and regulations (see here, here, here, here, here, here, here, and here).

  • CEI Testifies against National Labor Relations Board Rule to Allow Ambush Elections

    April 16, 2014 7:10 AM

    NLRB Ambush Election HearingOn three separate panels, I testified last week against the flaws inherent in the National Labor Relations Board’s (NLRB) latest proposed rule.

    The NLRB benignly purports to re-examine “Representation Case Procedures.” The rulemaking is commonly known as the ambush elections rule, as a result of a key component that could require elections in as few as ten days.

    FIRST PANEL

    On the first panel, I addressed the election date at the heart of the proposal. Approvingly quoting a letter from eighteen United States Senators who commented against the proposed rule, I noted that, “then-Senator John F. Kennedy stated that it was essential to allow ‘at least a 30-day interval between the request for an election and the hold of an election’ in order to ‘safeguard against rushing employees into an election where they are unfamiliar with the issues.’”

    The crux of then-Senator Kennedy’s statement is a focus on safeguarding employees and on ensuring that effectively educating employees remains the Board’s focus.

    ANALOGY TO STUDENTS’ STUDIES

    Pointing out that the median times for elections are on the order of 40 days and that the proposal could call for elections in as few as ten days, I asked, “Would your students benefit from a 75-percent reduction in study time?”

    I pointed out that workers, who already have a job and many of whom have families and hobbies, are challenged with essentially learning a crash course in labor law and labor economics—two arcane and intricate areas normally pursued by highly trained specialists with advanced degrees.

    An absolute minimum of 30 days and really a routine minimum of sixty days are appropriate to learn such material.

  • CEI's WorkplaceChoice.org Scores Paycheck Fairness Act

    April 10, 2014 9:28 AM

    The Competitive Enterprise Institute scored Wednesday’s vote in the U.S. Senate on the passage of S. 3772, The Paycheck Fairness Act, a bill that would fundamentally change the Equal Pay Act of 1963, which prohibits employers from paying women less than men for performing the same work in the same workplace.

    The score will be incorporated into CEI’s Congressional Labor Scorecard that can be seen in full on CEI’s labor policy website, WorkplaceChoice.org.

    CEI opposes numerous provisions of the proposed bill:

  • EEOC Loses Hypocritical Lawsuit against Employer over Background Checks

    April 9, 2014 10:07 PM

    "In this case the EEOC sued the defendants for using the same type of background check that the EEOC itself uses." So began a 3-to-0 ruling Wednesday by the Sixth Circuit Court of Appeals in EEOC v. Kaplan Higher Education Corp. (Apr. 9, 2014). CEI joined the Pacific Legal Foundation's amicus brief in support of the employer sued by the EEOC, the federal civil-rights agency. (EEOC stands for Equal Employment Opportunity Commission.) As former assistant attorney general Roger Clegg (now at the Center for Equal Opportunity) notes,

    The Obama Administration sued Kaplan for running credit checks on employee applicants – similar, by the way, to the ones the EEOC itself uses. Kaplan had learned that some of its employees had misappropriated student payments and, to provide safeguards against this behavior, it began screening its applicants for major red flags in their credit history. The EEOC sued Kaplan, arguing that it cannot use credit checks, because use of credit checks has a disparate impact on black applicants.

    Anyway, putting aside the inherent dubiousness of the whole lawsuit, there were also severe methodological problems with the Obama Administration’s evidence, which relied on “race raters” to determine, by scrutinizing driver’s license photos, the race of the applicants. So the trial judge threw out the case. Today, I’m happy to report, the court of appeals affirmed that decision – and in no uncertain terms, I might add, much I’m sure to the Obama administration’s chagrin.

    At the Washington Post, UCLA Law Professor Eugene Volokh provides these excerpts from the court's ruling:

    The EEOC’s personnel handbook recites that “[o]verdue just debts increase temptation to commit illegal or unethical acts as a means of gaining funds to meet financial obligations.” Because of that concern, the EEOC runs credit checks on applicants for 84 of the agency’s 97 positions. The defendants (collectively, “Kaplan”) have the same concern; and thus Kaplan runs credit checks on applicants for positions that provide access to students’ financial-loan information, among other positions. For that practice, the EEOC sued Kaplan. Specifically, the EEOC alleges that Kaplan’s use of credit checks causes it to screen out more African-American applicants than white applicants, creating a disparate impact in violation of Title VII of the federal Civil Rights Act. See 42 U.S.C. § 2000e-2(a)(1), (a)(2), (k). Proof of disparate impact is usually statistical proof in the form of expert testimony; and here the EEOC relied solely on statistical data compiled by Kevin Murphy, who holds a doctorate in industrial and organizational psychology. For two reasons, however, the district court excluded Murphy’s testimony on grounds that it was unreliable. First, the EEOC presented “no evidence” that Murphy’s methodology satisfied any of the factors that courts typically consider in determining reliability under Federal Rule of Evidence 702; and second, as Murphy himself admitted, his sample was not representative of Kaplan’s applicant pool as a whole. The district court therefore granted summary judgment to Kaplan. The EEOC now argues that the district court “erred” — a telling, oft-repeated, and mistaken choice of word here — when it excluded Murphy’s testimony. We reject the EEOC’s arguments and affirm.

      . . . . . . . .

    The EEOC brought this case on the basis of a homemade methodology, crafted by a witness with no particular expertise to craft it, administered by persons with no particular expertise to administer it, tested by no one, and accepted only by the witness himself. The district court did not abuse its discretion in excluding Murphy’s testimony.

  • Threatening Free Speech, New Jersey Court Allows Parents to Be Sued for Children's Facebook Posts

    April 9, 2014 11:32 AM

    Earlier, we wrote about a Wisconsin town whose ordinance holds parents liable for bullying by their children, including certain speech. We and law professor Eugene Volokh noted that this raised serious First Amendment issues. Now, a New Jersey judge has done the same thing by judicial construction, by allowing New Jersey school districts to drag students and their parents into lawsuits brought against school districts by alleged victims of bullying or discriminatory harassment. (New Jersey's anti-bullying law is so broad that it violates the First Amendment by banning non-violent speech, notes the civil-liberties group Foundation for Individual Rights in Education.)

    On March 12, a New Jersey Superior Court Judge ruled in V.B. v. Flemington-Raritan Regional School District that that school district, and the Hunterdon Central Regional High School, "could name 13 students and their parents as third-party defendants in a bullying suit," dragging them into a lawsuit against the school districts, and potentially forcing them to share the massive cost of paying any damages awarded by a judge or jury against the school district. Judge Yolanda Ciccone allowed the parents to be sued based on conduct and offensive comments both in school (where teachers and schools officials, not parents, were in charge) and outside of school. She based this ruling partly on speech that is protected by the First Amendment outside the schoolhouse, such as unkind remarks on Facebook, writing that "Plaintiff's complaint includes several allegations of that acts of bullying and harassment took place on Facebook, and that plaintiff had to contact Facebook directly to have to [sic] offending statements removed."

    Never mind that federal judges have ruled that the First Amendment applies with added force to students’ speech outside of school, meaning that vulgar speech that is banned in school may be protected speech when it occurs away from school, as cases like Klein v. Smith (1986) illustrate. Similarly, the federal appeals court in New Jersey has issued two First Amendment rulings in favor of students disciplined for creating fake web profiles lampooning their principals, holding that the speech was protected outside of school even if it would be unprotected in school, in Layshock v. Hermitage School District (2010) and J.S. v. Blue Mountain School District (2011).

  • Ryan FY 2015 Budget Calls for Transportation Funding Rationalization

    April 1, 2014 11:28 AM

    House Budget Committee Chairman Paul Ryan, R-Wisc., released his FY 2015 budget today. In just three pages, he calls for surprisingly sensible reforms to federal transportation programs. Unlike the Obama and Camp budgets -- which I earlier criticized for continuing trust fund bailouts and merely kicking the can down the road -- Ryan makes an attempt to fix the Highway Trust Fund's revenue/outlay imbalance by refocusing transportation funding on core programs, while allowing states more flexibility to experiment with self-funding and -financing mechanisms.

    As Ryan notes:

    The budget recommends sensible reforms to avert the bankruptcy of the Highway Trust Fund by aligning spending from the Trust Fund with incoming revenues collected. The budget also includes a provision to ensure any future general-fund transfers will be fully offset, while at the same time providing flexibility for a surface-transportation reauthorization that does not increase the deficit. The budget includes a reserve fund to provide for the adjustment of budget levels for consideration of surface-transportation legislation, as long as that legislation is deficit neutral.

    In addition, Ryan recommends the following positive transportation policy changes:

    • Eliminate Amtrak's billion-dollar-plus annual subsidy;
    • Reduce the Transportation Security Administration's outlays; and
    • Eliminate the Essential Air Service.

    With highway bill reauthorization around the corner, it is great to see some real positive reforms being put on the table. Many free market transportation advocates would certainly like to see more, but we need to start somewhere, and Ryan's budget appears to be that starting point.

  • CEI Podcast for March 27, 2014: Bait and Reciprocal Switch

    March 27, 2014 10:48 AM

    CEI Fellow Marc Scribner talks about his new paper, “Bait and Reciprocal Switch: Forced Access Regulation Threatens the Rail Renaissance.”

  • Human Achievement of the Day: Autonomous Vehicles, from Imagination to Reality

    March 26, 2014 8:24 AM

    [caption id="attachment_55209" align="alignright" width="300"]CEI General Counsel Sam Kazman about to take a spin in the Google car. (Photo by Marc Scribner) CEI General Counsel Sam Kazman about to take a spin in a Google self-driving car in May 2012. (Photo by Marc Scribner)[/caption]

    As we prepare for another Human Achievement Hour (this Saturday, March 29, 8:30 pm - 9:30 pm), we at CEI are examining some of the latest, greatest innovations that will make the future even freer and more prosperous. One massively transformative technology currently in development is the autonomous vehicle, known more widely as "driverless" or "self-driving" cars. Google's prototype has been covered extensively by the media, traditional automotive companies such as Bosch and Volkswagen are working hard on their prototypes, and new estimates put the potential societal benefits of autonomous vehicles at $3 trillion per year.

    As I've noted in the past, we should be "thrilled that a technology that can greatly improve traffic safety, offer disabled people an unprecedented level of personal mobility and fundamentally change the way we travel is so close." Soon, if you imbibe too much on a night on the town, your car or a rideshare provider's car will be able to take you home. And thanks to reduced congestion due to optimized driving behavior, we will also enjoy improved local air quality. Whatever your political leanings, you should be excited about our driverless future -- unless you're reflexively and ideologically anti-technology.

    In the last 10 years, the technology has progressed a great deal -- to the point where it is quite possible that first generation highly automated vehicles will be available to consumers before the decade closes. To understand how we got to the stage of the Google self-driving car, it is instructive to see how far we've come. What follows is a brief history of autonomous vehicles that covers the technologies' developments up until about 10 years ago.

    Personal mobility has traditionally required active human monitoring and direction, from walking to riding horseback to bicycling. The physical and cognitive demands of travel have long been recognized, as has the capacity for and costs of human error in transportation. In the late fifteenth century, Leonardo da Vinci sketched out a design for a self-propelled cart with programmable steering, which was later compiled in the Atlantic Codex.

    Engineering interest in vehicle automation stretches back to the 1920s, when auto ownership first became within reach of middle-class households. Inventor Francis P. Houdina demonstrated a radio-controlled car on the streets of Manhattan in 1925. Houdina’s invention was never treated as anything more than a novelty -- although his company’s prominence led to a physical altercation with famed escape artist Harry Houdini, who thought Houdina was capitalizing on their similar names, which resulted in a disorderly conduct charge against Houdini -- but the challenge of developing automated vehicles became recognized in research communities.

    At the 1939-1940 New York World’s Fair, General Motors’ interactive Futurama exhibit predicted high-speed automated roadways in 20 years. While GM’s prediction of a driverless world proved premature, its prediction of individual automobile ownership becoming widespread rather than a luxury for the wealthy and upper-middle class -- which sounded incredibly bizarre during the Great Depression -- proved accurate.

  • Minimum Wage Increase Is Still Bad Policy

    March 10, 2014 12:45 PM

    Obama RacineFor the past two years, President Obama has proposed raising the federal minimum wage in his State of the Union address. The main arguments for raising the minimum wage have typically ignored economic arguments against it, and relied upon more politically charged arguments. This time around the argument is a bit different because progressives are now using new studies in economics as intellectual ammunition. Shortly before the State of the Union address, 600 economists signed a letter to the president endorsing a raise in minimum wage, citing the new studies. These studies have argued that moderately increasing the minimum wage would have a negligible impact on employment levels.

    Obama himself relied on these revisionist economists in his announcement of the executive order: “Just last month, 600 economists, including seven Nobel Prize winners, wrote the leaders of houses of Congress to remind them that the bill before Congress would have little or no negative effect on hiring, on jobs. So it's not going to depress the economy. It will boost the economy.”

    The mistake being made by using these studies is that 79 percent economists have not actually changed their longstanding consensus against a high minimum wage, and are skeptical of the new studies. The 600 signatories do not necessarily represent the field as a whole, and their suggestions, as such, should be taken with caution.

  • The "California Rule" and the "The Fall of Pacific Grove"

    March 6, 2014 3:36 PM

    In my previous post, I described the "California rule," which puts state governments in a legal straitjacket when trying to reform underfunded public pensions. Specifically, it places pensions in a privileged position relative to other types of compensation, like salary or health insurance benefits, by making them more difficult to change. This post highlights a real-world example of the California rule's dangers.

    The place is Pacific Grove, California, a town of 15,000 residents on the Monterey Peninsula's northern tip, with an annual budget of $11 to $12 million. In 2008, John Moore, a Pacific Grove resident and retired attorney, learned that the City of Pacific Grove had issued $19 million of pension bonds two years earlier, while at the same time it gave the police union a 30% raise.

    After making several requests under California's Public Records Act, Moore uncovered a tale of self-dealing by Pacific Grove and union officials to rip off California taxpayers. The result of Moore's investigation, "The Fall of Pacific Grove," was published in The Pine Cone, a Monterey County paper; it's now available online thanks to the California Public Policy Center.

    In 2002, the Pacific Grove city council adopted a 50 percent pension increase for public safety workers, after being told by the city manager that the increased benefit would cost around $51,500 per year. However, the city manager withheld from the council an actuary report that estimated the benefit at over $800, 000 per year. The hidden actuary report was not discovered until 2009. The results have been predictable and dire. Pacific Grove's pension deficit has ballooned to $45 million, plus $20 million in pension bonds, and is growing at 7.5 percent a year, according to Moore.

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