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OpenMarket: Labor and Employment

  • Jane Brody's Uninformed Attack on Cars and Suburbia

    October 30, 2013 1:16 PM

    While at a conference where participants discussed the wannabe social engineers cum urbanists' war on automobility and housing affordability, Jane Brody's broadside against Americans' "dependence on automobiles" and suburban living was published by the New York Times. Brody, unlike her Times colleague Michael Pollan, isn't a complete and total kook when it comes to agricultural biotechnology, and she is one of the more thoughtful nutrition writers in America. Unfortunately, Brody has fallen for one of the popular but incorrect urban elitist tropes about cars and the suburbs.

    Long commutes are killing us! Urban cores are healthier than the suburbs! Low-density living is just fattening us up for self-slaughter!

    Scary stuff, just in time for Halloween! But the "evidence" supporting such fear mongering ranges from flimsy to nonexistent.

    In her introduction, she unintentionally sets the stage for an interesting contradiction that drives suburb-hating urbanists crazy. "My son used to work in New Jersey, which entailed a hated commute by car that took 50 to 90 minutes each way," writes Brody. "He quit that job when his sons were born and, working part-time from home, cared for the boys. He now commutes to work in the city by foot and by subway, giving him time to read for pleasure."

    Despite the fact that many two-income American households don't have the realistic option to simply leave their jobs for childbirth, Brody fails to mention that the New York City metropolitan area has the longest commutes in the nation. Oh, but that's just for suburban New York metro commuters. City dwellers avoid those lengthy commutes, right? Wrong. New York City residents who can't afford to live in Manhattan can have extremely long commutes just like their suburban neighbors -- and some of the longest commutes in the metro area are those of Brooklyn and Queens residents. See this handy map that WNYC put together with Census data.

    This is to be expected. New York City has the lowest auto ownership in the nation and the highest public transit usage (about 40 percent of all transit trips taken in the U.S. are within the New York City metropolitan area). Those who get to work by transit rather than car generally have longer commutes: you need to walk to the transit stop, transfer, etc. That's why New York City drivers tend to have lower commute times than transit users. If you're looking for the shortest commutes, you'll need to move to auto-oriented, low-density places like Manhattan, Kansas, rather than Manhattan, New York, New York.

  • Racial Preferences in Obamacare, and Discrimination, Too, Based on Weird Ideology

    October 29, 2013 10:38 AM

    Obama RacineThe Daily Caller has an interesting story about race-conscious provisions and racial preferences contained in Obamacare. It's a subject that has received remarkably little attention, even though the U.S. Commission on Civil Rights concluded back in 2009 that the healthcare bill was racially discriminatory, in two ways. First, the law is filled with “sections that factor in race when awarding billions in contracts, scholarships and grants” and give “preferential treatment to minority students for scholarships.” Second, as an African-American member of the Commission noted, it "creates separate and unequal operating standards for long-term care facilities that serve racial and ethnic minorities." By granting HHS “the discretion to waive substantial penalties . . . for failing to report elder abuse and other crimes committed against residents of long-term care facilities that serve racial and ethnic minorities," it "could increase the probability that residents of such facilities won’t receive the same level of protection as residents of nursing homes that serve non-minority populations."

    As the Daily Caller notes, some of these racial preferences reflect a weird theory promoted by certain Obamacare architects: that the healthcare system should promote “racial concordance," a fancy word for “pairing patients and doctors of the same race, a goal toward which the law channels taxpayer dollars." The idea is that patients do better with doctors of the same race. But this motivation for using race conflicts with Supreme Court rulings, which reject such racial pairing as a reason for using race.

  • Racial Preferences and Red Tape Grow Under Federal Dodd-Frank Act

    October 28, 2013 12:14 PM

    Last Friday on National Review's The Corner, Roger Clegg wrote about the 2010 law governing the financial sector, the Dodd-Frank Act, and the racial "diversity quotas" that may come into being under a proposed regulation to implement that legislation:

    Today a number of Obama administration agencies with financial-sector regulatory responsibilities have jointly published in the Federal Register a proposed “Policy Statement Establishing Joint Standards for Assessing the Diversity Policies and Practices of Entities Regulated by the Agencies.”  The statement comes as a result of Section 342 of the Dodd-Frank legislation, which requires these agencies each to “establish an Office of Minority and Women Inclusion” that, in turn, is to develop diversity and inclusion standards for workplaces and contracting.

    The proposed statement is even worse than the bill itself, since it aggressively applies not only to the agencies themselves but also to all those regulated by it, and repeatedly insists on the use of “metrics” and “percentage[s]“ (i.e., numerical quotas) to ensure compliance. And while the statute at least cautions that diversity efforts are to be undertaken “in a manner consistent with the applicable law” . . . there is no such nod in the proposed statement, nor is there any mention of stopping or preventing discrimination – the only possible [constitutional] justification for consideration of race, ethnicity, and sex in hiring, promotion, and contracting.

    As Clegg notes, the statutory provision that led to these proposed racial preferences was "criticized by the Wall Street Journal, four members of the U.S. Commission on Civil Rights, Diana Furchtgott-Roth," and other lawyers and economists. Clegg wrote a "short summary of Section 342 here, and Christopher Byrnes wrote a much more comprehensive analysis of the statute, here). Comments on the proposed statement are due by Christmas Eve."

    Racial preferences don't have to rise to the level of racial quotas to violate the Constitution; milder racial preferences can be illegal as well, as is illustrated by the D.C. Circuit Court of Appeals' decision in Lutheran Church—Missouri Synod v. FCC (1998), which struck down the FCC's attempt to pressure broadcasters to hire more minorities to promote "diversity."  While the courts have countenanced the use of race to promote "diversity" in the college setting, they have often refused to allow the use of race to promote "diversity" in the employment setting (see court rulings such as Messer v. Meno, 130 F.3d 130 (5th Cir. 1997); Taxman v. Board of Education, 91 F.3d 1547 (3rd Cir. 1996); Lutheran Church v. FCC, 141 F.3d 344 (D.C. Cir. 1998)).  Similarly, the D.C. Circuit declared unconstitutional the FCC's use of gender in awarding broadcast licenses in order to promote "diversity," in Lamprecht v. FCC, 958 F.2d 382 (D.C. Cir. 1992).

  • More Bipartisan Opposition to Obama Administration's Move to Block Airline Merger (Including Rahm Emanuel)

    October 23, 2013 1:59 PM

    Another day, another round of public bipartisan opposition to the Obama Department of Justice's lawsuit to block the pending American Airlines and US Airways merger. In today's edition, a coalition of big city mayors wrote to Attorney General Eric Holder expressing their collective concern that blocking the merger will harm their cities' economic growth and airline industry employees. The letter concludes:

    By attempting to block the proposed combination, the Department has needlessly added to the uncertainty that these employees and their families must endure and has put jobs at risk.

    Our cities rely on the airline industry to support existing businesses, attract new businesses and to keep our local economies moving forward. e health and well-being of our cities and our citizens depends on this combination moving forward.

    For these reasons, we ask you to settle your lawsuit with American Airlines and US Airways and allow the combination to proceed.

    It was signed by seven mayors: Patsy Kinsey (D-Charlotte), Michael Nutter (D-Philadelphia), Greg Stanton (D-Phoenix), Mike Rawlings (D-Dallas), Betsy Price (R-Fort Worth), and Carlos A. Gimenez (R-Miami-Dade County). In a surprising twist, former Obama White House chief of staff and current Democratic Chicago Mayor Rahm Emanuel also signed the letter.

    It was announced this afternoon that Oklahoma Attorney General Scott Pruitt (R) intends to file an amicus brief supporting the merger, which will likely be joined by other states.

  • The NSA: Upgrading from Privacy Destruction to Job Destruction

    October 22, 2013 10:56 AM

    At a recent Cato Institute event on NSA spying activities, the ACLU’s Chris Soghoian stated that NSA activities were not only a threat to privacy but were also a direct threat to businesses.

    On a panel that included Jim Burrows of Silent Circle, Soghoian lamented that NSA data collection amounts to a prohibition of certain business models. Silent Circle is a Web service that provides encryption software text and voice messages -- and, until recently, emails. A similar company, Lavabit, is best known as the email provider used by Edward Snowden.

    Lavabit was forced to close its services entirely due to NSA requests to build backdoor access to data. Silent Circle chose to discontinue its own email service in response to Lavabit’s closing. Lavabit’s founder explained the situation on their blog post announcing the shutdown:

    I have been forced to make a difficult decision: to become complicit in crimes against the American people or walk away from nearly ten years of hard work by shutting down Lavabit.

    The choice was not easy: go against the very principles that are the center of your business model, or close up business for good. Lavabit chose the latter option and shut down its services. Silent Circle did not receive a request from the NSA, but preemptively shutdown its own services as well.

  • Public Pensions Are Not Property

    October 21, 2013 3:13 PM

    Across the nation, state and local governments in dire financial straits face great difficulty in their efforts to bring their budgets under control. Pensions are one of the biggest drivers of deficits, and therein lies the problem. Many states treat pensions not as a form of compensation, but as a contractual obligation to the employee. As a result, states and cities that have tried to bring pension obligations under control have seen roadblock thrown up in court by government employee unions. As the Manhattan Institute's Steven Malanga explains:

    In the private sector, pensions are governed by the federal Employee Retirement Income Security Act. Although a private employer may not cut benefits that a worker has already earned, ERISA allows a business to change the rate at which a worker accrues future benefits.

    ERISA, however, doesn’t apply to government employee pensions. Instead, in the states, local laws and court decisions govern how public-worker retirement systems are treated, and in many cases the states depart, sometimes radically, from the standard set by the law.

    In many states, that means that pension promises are treated as sacrosanct.

    Many legal protections given to public-sector pensions arise from court decisions that treat laws governing public retirement systems as a contract between the state and a worker. That puts pensions under the jurisdiction of the contract clause of the U.S. Constitution, or under state contract law.

    In California, a state teetering on the fiscal precipice due in large part to pension liabilities, San Jose Mayor Chuck Reed is leading an effort to amend the Golden State's constitution to give governments there greater flexibility to make changes to employee retirement benefits. Reed faces a tough fight -- Malanga describes his effort as "an uphill campaign" -- but he already deserves plaudits for bringing needed attention to this issue.

  • Loosened Laws in New Jersey Result in Brewery Boom

    October 18, 2013 4:43 PM

    Only a year after New Jersey Governor Chris Christie signed a bill into law that would allow breweries in the garden state to sell beer on their premises, the Garden State has experienced a growth spurt in its craft beer scene.

    Bills S-641 and A-1277, which were signed into law in September 2012, make a number of changes for both microbreweries and brewpubs that enthusiasts had hoped would put the state in a better position to compete with its neighbors. New Jersey is ranked as the 34th state in the nation for craft beer production, while Pennsylvania takes the number two spot, New York is sixth, and Delaware is 16th.

    Unsurprising for those of us who study of free market economics, the relaxed laws have spurred growth. At least 15 new beer-producing businesses are set to come online in New Jersey by next summer! This makes sense since starting up a production brewery or a brewpub is risky and has a large initial investment; the old rules made it difficult for a start-up brewer to make ends meet and limited existing breweries’ ability to grow.

  • More than a Third of House Dems Oppose Obama's American-US Airways Merger Lawsuit; What Real Pro-Competition Policy Looks Like

    October 17, 2013 1:17 PM

    Bipartisan opposition to the Obama administration's reckless assault on the pending merger of American Airlines and US Airways is growing. While the end of the partial government shutdown dominated yesterday's news cycle, 68 House Democrats (over one-third of the House Democratic caucus) signed a letter to President Obama urging him to end his administration's opposition to the airline merger. Led by Reps. Marc Veasey, D-Texas, and Ed Pastor, D-Ariz., the members of Congress "believe that DOJ’s concerns as outlined in the complaint filed last month are not an adequate representation of all of the facts" and call on the administration "to reconsider its efforts to prevent the American and US Airways merger from going forward." I previously noted organized labor's strong opposition to the lawsuit and one of the six state attorneys general that joined the DOJ lawsuit has since dropped out.

  • More Myths About the Government Shutdown

    October 10, 2013 2:29 PM

    Young people often don't realize that government shutdowns used to be common, until the middle of the Clinton administration. The George W. Bush presidency was an exception to the rule. The Miami Herald's Glenn Garvin debunks some of the myths promoted by "the chattering classes" (such as left-leaning Washington Post and New York Times columnists) to people too young to remember earlier shutdowns, and people with bad memories.

    • This kind of thing never used to happen. Actually, it used to happen all the time. What’s unusual is the quiet stretch since the last shutdown, when Newt Gingrich and Bill Clinton were facing off in 1995. Before that, there were 18 shutdowns in 19 years as various Congresses and presidents squabbled over raising the national debt limit. My personal favorite is the one in 1982, when Congress didn’t feel like working late to pass a spending bill the night before the new fiscal year started. The Republicans were all going to a barbecue at the White House, while the Democrats had a $1,000-a-plate fund-raising dinner to attend.

    • Well, it wouldn’t happen if not for all these crazy ideologues who’ve been elected the last few years. In the old days, Ronald Reagan and Tip O’Neill would have just had a drink after work and settled everything.

    More likely they would have broken some bottles over one another’s heads. The federal government shut down seven times while Reagan was president and O’Neill speaker of the House. No wonder, the way they talked about each other.

    O’Neill called Reagan “an absolute and total disgrace” and added that it was “sinful that this man is president of the United States.” Reagan, in his diary, wrote that budget negotiations with the speaker were an ordeal because “Tip O’Neill doesn’t have the facts of what was in the budget. Besides he doesn’t listen.”

    • Maybe arguments over spending are inevitable. But it’s just plain wrong to hold laws on other subjects hostage to debt-ceiling negotiations, the way the Republicans are doing with Obamacare.

    Over the years, government shutdowns have been triggered by attempts to change the laws on, among other things, abortion, civil rights, welfare, oil-drilling and which government agency’s economic forecast should be used for budget planning. And even if you think debt-ceiling fights should be restricted just to spending issues, the fact is that virtually everything Congress or the president does can be turned into a spending issue, because it all requires funding. . . . The Founding Fathers not only foresaw but approved of this tactic. . . . James Madison, one of the principal authors of the Constitution, was quite explicit: 'This power over the purse may, in fact, be regarded as the most complete and effectual weapon with which any constitution can arm the immediate representatives of the people, for obtaining a redress of every grievance, and for carrying into effect every just and salutary measure.'”

    (Boldface added for emphasis; more myths discussed at this link). People who think government used to be better at avoiding shutdowns and defaults are forgetting about past episodes of government dysfunction, like in 1979 "when the Treasury defaulted for two weeks over a debt limit increase delay and technical problems with its computers. It caused a 60-basis point rise in interest rates that lasted for years, according to academic research." In 1979, Democrats controlled the presidency and both houses of Congress, so you can't blame that default on the Tea Party.

  • Labor Department Imposes Disability Hiring Quotas, Even in Divisions that Don't Get Federal Contracts

    September 23, 2013 3:13 PM

    The Obama Labor Department has just finalized rules that will effectively require businesses that get federal contracts to adopt a 7 percent hiring quota for the disabled. Much of the American workforce is employed by a federal contractor, since most large companies have federal contracts. So this will affect much of the economy, and impose massive new costs on American business.

    Disturbingly, the new rules require a 7 percent quota not just for the division of the company that receives a federal contract, but for the company as a whole. And they require that the 7 percent quota be met not just for the company as a whole, but also in each line of business in the company. That means they effectively must be met even in job categories where the number of disabled people is lower than average, either because the qualified labor pool is disproportionately able-bodied (like those that require hard physical labor) or because the job is not compatible with certain mental or psychological impediments that qualify as disabilities.

    As the Cato Institute's Walter Olson notes, the rules impose quotas in all but name; the director of the Office of Federal Contract Compliance Programs

    insists the initiative should not be described as quotas, since contractors falling short will not suffer automatic penalty. Instead, they’ll be thrown into a process of auditing and having their internal procedures put under review and having to demonstrate progress and that sort of thing. Nothing penalty-like about that! Also, if their willingness to go along with this process doesn’t please the federal overseers, they can eventually be debarred from any future contract work, a devastating economic sanction for many firms. Crucially, the feds are applying the regulation to firms’ entire workforce even if only a single divisions has federal contracts, so that if, say, a food company has one line of business that caters to the military, and nineteen others that do no federal contracting whatsoever, all twenty lines must adopt the quot… sorry, benchmarks. [Cleveland Plain Dealer, OFCCP, Government Executive, Federal News Radio]


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