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OpenMarket: Labor and Employment

  • Krugman is Wrong - Again!

    January 26, 2009 3:05 PM

    Boy, that wacky Paul Krugman. The newly-crowned Nobel laureate (they should be allowed to wear a laurel wreath everywhere they go, so we'd know of their brilliance), fresh from revealing how little he understands the history - or purpose - of liberalism, shows he knows diddly-squat about Air Traffic Control.

    In today's column he argues, plonkingly,

    Here’s how to think about this argument: it implies that we should shut down the air traffic control system. After all, that system is paid for with fees on air tickets — and surely it would be better to let the flying public keep its money rather than hand it over to government bureaucrats. If that would mean lots of midair collisions, hey, stuff happens.

    Unfortunately for Krug, the fact is that the public sector does a pretty poor job of Air Traffic Control. Not because of large numbers of accidents - that doesn't happen anywhere much these days - but in terms of waste and inefficiency. American ATC is based on a system of beacons from the early days of air transport. Those have long since been superseded in safety terms by GPS and other innovations, but the system is still based on them. Liberalizing ATC actually makes a huge amount of sense, which is why plenty of governments around the world have done it, without seeing mid-air collisions, erm, explode. As I say in the new Agenda for Congress:

  • Robbing Driving Peter to Pay Train-Riding Paul

    January 26, 2009 11:45 AM

    Facing a budget shortfall, officials of South Florida's Tri-Rail commuter train are seeking help from the state -- or rather, from drivers who rent cars in Florida. Tri-Rail, which runs between Dade, Broward, and Palm Beach counties, wants Tallahassee to impose a $2 surcharge on car rentals to keep the train going. Thankfully, the proposal is meeting opposition. Reports The Palm Beach Post:

    But opponents, such as state Rep. Carl Domino, say the $2 fee would further depress tourism across the state.

    "In an environment where tourism is weak, do you want to send the message to tourists that they're going to have to pay even more money to come to Florida?" said Domino, R-Jupiter.

    Ever since gas hit $4 a gallon, Tri-Rail ridership figures have smashed expectations, reaching levels not thought possible until 2020, Stevens said. About 4 million riders took the train last year, 23 percent more than in 2007. Ridership has more than doubled since 2005.

    The numbers have dipped only slightly as gas prices have fallen - evidence, say officials, that those who try using the commuter rail tend to stick with it

    That a slight fare increase spread across so many new riders would boost Tri-Rail's finances should be obvious, but apparently not to the people who run Tri-Rail -- which makes state Rep. Domino's infusion of sanity especially welcome.

    "Who uses this transit system?" asked Domino. "Shouldn't the people who use it pay for it?"

  • The New Green Economy?

    January 21, 2009 4:13 PM

    I've spent a while crunching the numbers relating to energy and environment spending in the stimulus bill. The bill will spend about $80 billion on energy and environment, which can be broadly broken down into the following categorizations:

    Electricity infrastructure/efficiency - $35.6 billion
    Renewable projects - $11.95bn (mostly $8bn in loan guarantees and $2.4bn for clean coal)
    Climate science/general energy academic research - $9.3bn!!! (including $1.9 for nuclear research)
    EPA programs (Superfund cleanup etc) - $12.2bn
    Other environmental (National Forest Service, National Park Service, Bureau of Land Management etc) - $10.899bn

    So that means around $57 billion of the total is aimed at reducing greenhouse gas emissions.

    Thanks to Jonathan Tolman, we can work out how many jobs this will create. As he says, not every program gives a figure for created jobs, but about 5/8ths of them do. That $50 billion is supposed to create just under 1 million jobs, but many of these are in the traditional environmental areas of clean-up.

    Of the $57 billion aimed at reducing greenhouse gas emissions, just over half the expenditures have job numbers associated with them. Those total $32.3 billion, for a total of 353,000 jobs, at $91,000 per job. These are overwhelmingly related to the (much-needed) creation of a smart electricity grid, and improving the efficiency and weatherization of the housing stock, which will be a good thing even if global warming turns out not to be a problem*.

  • Whither Union Transparency?

    January 20, 2009 12:27 PM

    As Barack Obama is sworn in as the nation's 44th President today, Rep. Hilda Solis (D-Calif.) will likely be the next Secretary of Labor. As I've noted here recently, her cozy relationship with organized labor should raise concern among not only lawmakers and the public, but among rank-and-file union members who could soon find it harder to find out how union leaders spend their dues. The Department of Labor, under outgoing Secretary Elaine Chao, has enacted stronger reporting requirements. Reports The Los Angeles Times:

    The federal government has adopted new financial disclosure rules for labor organizations that officials say would help expose the sort of corruption allegedly found in the largest California chapter of the Service Employees International Union.

    The U.S. Labor Department, in the final hours of the Bush administration, has toughened standards to require most unions to publicly report nearly all compensation and expenses for officers and employees, the agency announced Friday.

    Also broadened were disclosure requirements for the sale and purchase of property, with the aim of revealing whether any union officers or employees profit from the transactions.

    In the alleged SEIU scandal, the Los Angeles-based local's former president, Tyrone Freeman, has been accused by the union of enriching himself and his family with more than $1 million in misappropriated dues money. The SEIU ousted him after The Times reported on his spending practices last summer.

    Unsurprisingly, union chiefs are howling, deriding the requirements as "onerous," and calling for them to be pulled back -- except for one.

  • How gullible are we?

    January 15, 2009 4:43 PM

    Scrolling through the $825 billion dollar monstrosity, my first question is--how many unemployed construction workers do they think there are? Don't they realize that they will be competing with the private sector beyond those currently unemployed?

    We signed our name to a blank check. (CEI opposed it.) Now they want us to sign again and again—bailout, stimulus, whatever they're calling it today.  But as Martin Hutchinson said, “Stimulus plans also raise the chance of a Great Depression because of the deficits they cause.”

    The Wall Street Journal reported today that Americans are in favor of Obama's stimulus with 89% in favor of deficit spending to create more renewable energy and energy efficiency.

    Here's some hard questions that should be asked about those "green" projects, though:

    1.How long will it take the projects to break ground?

    2. How many permanent jobs will be created and at what cost?

    3.Of those permanent jobs, are they sustainable without government subsidies? EIA has reported that solar energy is subsidized to the tune of $24.34 per megawatt hour, wind $23.37 and "clean coal" $29.81. By contrast, normal coal receives 44 cents, natural gas a mere quarter, hydroelectric about 67 cents and nuclear power $1.59.

    4.What is the current unemployment rate of the industry to be “stimulated?”

  • The Paycheck Fairness Act: Equal Pay Baloney From the Press

    January 14, 2009 3:23 PM

    "News" stories on legislation often read like lazy summaries of press releases put out by the bill's sponsors. That's particularly true for so-called "equal pay" legislation, even if it would lead to inequities and frivolous lawsuits.

    The Gannett News service is claiming that the controversial Paycheck Fairness Act, which passed the House late last week, simply "elevates the status of gender-based pay discrimination lawsuits to the same level as lawsuits filed by those claiming discrimination based on race, age, or disability." That echoes press releases by the bill's sponsors.

    But it's not true. The bill would pressure employers to pay employees in predominantly-female jobs with pleasant working conditions the same as employees in predominantly-male jobs with unpleasant working conditions. Moreover, it would allow people alleging gender-based discrimination to recover damages unavailable to people facing racial, age, or disability discrimination, such as uncapped punitive damages for unintentional "disparate impact" "discrimination" (where a neutral employer practice negatively impacts more women than men, or more minorities than whites).

  • A State-Level Counter to Card Check

    January 13, 2009 2:42 PM

    As disappointing as the 2005 Kelo v. New London ruling was for supporters of strong property rights, the ensuing months saw a healthy -- and heartening -- backlash at the state level, as lawmakers in several states, responding to contituent outrage, enacted legislative curbs on eminent domain. Now it would be good to see a similar state-level reaction to organized labor's push to corral more workers into unions by undermining the secret ballot process in organizing elections.

    Today, soon after the pro-union advocacy group American Rights at Work launched a major ad campaign in favor of the so-called Employee Free Choice Act (EFCA), which would allow unions to easily circumvent secret ballot elections in organizing drives, former Congressman Ernest Istook (R-Okla.) announced a new state-level effort to enshrine secret ballots in all elections -- including union elections -- in state constitutions.

    Istook, who is now at the Heritage Foundation, where he made the announcement, is Chairman of Save our Secret Ballot, which is launching its state efforts in five states -- Arizona, Arkansas, Missouri, Nevada, and Utah -- with other states to follow. He noted that, contrary to what many people might think, secret ballots are not protected in the U.S. Constitution -- but state constitutions can expand on those rights protected at the federal level. The proposed amendment reads:

    The right of individuals to vote by secret ballot is fundamental. Where state or federal law requires elections for public office or public votes on initiatives or referenda, or designations or authorizations of employee representation, the right of individuals to vote by secret ballot shall be guaranteed.

  • SEIU's California Scheming IV -- and Illinois, too

    January 9, 2009 7:16 PM

    Service Employees International Union (SEIU) finalized a contentious merger of several California locals into a statewide "superlocal." Sal Rosselli, the head of one of the locals that was dissolved in this process, has fought the centralizing efforts of SEIU President Andy Stern, but, as evident not, to no avail. SF Weekly's Matt Smith notes:

    The move is seen in U.S. Labor movement circles as a ploy to neuter Sal Rosselli, president of United Healthcare Workers - West.

    Rosselli has clashed with Stern over  a 2004 agreement with nursing home chains in which the union supported legislation curtailing patient rights in exchange for permission to allow the union to recruit members at certain facilities. Today's move erodes Rosselli's clout by two-fifths, and paves the way for a new nursing home lobbying/organizing agreement.

    This mega-merger of California local unions comes at what should be an awkward time for SEIU, considering its recent high-profile scandal in that state -- and nationally. The head of a Los Angeles SEIU local was recently forced to resign after the Los Angeles Times broke the story on a corruption scandal there. And Stern himself may soon face some embarrassing questions regarding his relationship with disgraced Illinois Governor Rod Blagojevich.

  • Card Check Loses Support, but Threat Isn't Over

    January 5, 2009 6:16 PM

    Today in The Wall Street Journal, Kimberley Strassel dissects the shifting political prospects for the Employee Free Choice Act (EFCA), commonly known as the "card check" bill. ("Card check" is a unionization procedure whereby union organizers circumvent the secret ballot process by getting workers to sign union cards in the open, exposing them  to aggressive, hard-sell intimidation tactics.)

    It hasn't been much noticed, but the political ground is already shifting under Big Labor's card-check initiative. The unions poured unprecedented money and manpower into getting Democrats elected; their payoff was supposed to be a bill that would allow them to intimidate more workers into joining unions. The conventional wisdom was that Barack Obama and an unfettered Democratic majority would write that check, lickety-split.

    Instead, union leaders now say they are being told card check won't happen soon. It seems the Obama team plans to devote its opening months to important issues, like the economy, and has no intention of jumping straight into the mother of all labor brawls. It also seems Majority Leader Harry Reid, even with his new numbers, might not have what it takes to overcome a filibuster. It's a case study in how quickly a political landscape can change, and how frequently the conventional wisdom is wrong.

    Paradoxically, it's Mr. Reid's bigger majority that is now hurting him. In 2007, he got every Democrat (save South Dakota's Tim Johnson, who was out sick) to vote for cloture. But it was an easy vote. Democrats like Mr. Pryor knew the GOP held the filibuster, and that Mr. Bush stood ready with a veto. Now that Mr. Reid has 58 seats, red-state Democrats in particular are worried they might actually have to pass this turkey, infuriating voters and businesses back home.

  • Bush Auto Bailout Illegal, Bailout Supporter Admits

    December 20, 2008 5:13 PM

    Clinton Administration Labor Secretary Robert Reich, who supports bailing out the Detroit automakers (whose unionized workers are paid $70 an hour), nevertheless points out that the Bush Administration's plan for an auto bailout, using financial-system bailout funds, is illegal and unconstitutional. We, the Heritage Foundation, and many others earlier reached the same conclusion.

    The Bush auto bailout is a waste of billions of dollars in taxpayers money. It will be less successful in restructuring the auto industry and restoring its competitiveness than it would be for the Detroit automakers to file for bankruptcy under Chapter 11.


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