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Article on Teacher Shortage Misses the Obvious: Economics

This Linda Borg article in the Providence Journal covers familiar ground:

The demand for high school math and science teachers, especially in chemistry and physics, is so intense that districts often resort to “poaching” from one another, superintendents say. But the biggest competition comes from private industry, which offers higher pay and a better career trajectory.

In contrast, however:

In North Smithfield, Supt. Michael St. Jean said he had 260 applications for four elementary education openings last year.

Oddly, over the course of around 40 paragraphs, nobody expresses the obvious observation from economics. We should change the way we structure employment in public schools so the system could rise to market price of the technical professionals who are in demand while reducing the pay offered to teachers in areas that have such a surplus.

That’s how the market would function in the private sector. If one job seems impossible to fill while another generates sixty-five times more applicants than there are positions, employers will try to get a qualified person to fill the second job at lower pay so that he or she can increase the offer for the first job. This will go on across the industry until the pay being offered for the second job can’t attract any qualified applicants.

Is This Representative of RI Teachers?

TEACHER ALERT: 100% of the Nat’l Educ Assoc of RI (NEARI) endorsements are for Democrats, including EVERY far-left PROGRESSIVE incumbent. If you pay union dues and this political extremism is not shared by you, the US Supreme Court ruled in June that you no longer have to give part of your paycheck to the union – and you cannot lose your job, status, or benefits.

What would it take for you to consider leaving your union saving about $7,000 over ten years for your family?

Open post for image.

Relative Windfalls for Government Unions

A major not-quite-sub-text of the Supreme Court’s Janus v. AFSCME ruling is the issue of funding labor unions, which cycle the money into the political system. The Wall Street Journal recently highlighted some numbers along these lines:

Pennsylvania stopped collecting agency fees from 24,000 state workers that totaled $6.6 million last year, a state official said. The figure is expected to grow because it doesn’t include workers at municipalities across the state. In New York, which has the highest rate of public sector union membership, the state stopped collecting agency fees in July from 31,000 state workers which totaled between $9 million and $10 million last year, a spokeswoman for the New York State Comptroller said. That tally is also expected to grow because it doesn’t include local agency fees.

By one estimate, unions in New York state overall will lose $112 million in agency fees from 200,000 state and local workers, based on what workers paid in 2016, according to the Empire Center, a conservative think tank in Albany.

Writing for the majority of the Supreme Court, Justice Samuel Alito touched on this angle:

We recognize that the loss of payments from nonmembers may cause unions to experience unpleasant transition costs in the short term, and may require unions to make adjustments in order to attract and retain members. But we must weigh these disadvantages against the considerable windfall that unions have received under Abood for the past 41 years. It is hard to estimate how many billions of dollars have been taken from nonmembers and transferred to public-sector unions in violation of the First Amendment. Those unconstitutional exactions cannot be allowed to continue indefinitely.

Clearly, the windfall from government employees who have declined to join unions but have still paid them money pales in comparison with the money that unions have collected by virtue of their monopolistic role in government employment.

Ending Another Union Money Transfer

The characterization is perhaps too tidy, but many policy decisions in Rhode Island can be explained under the premise that politicians are striving to funnel money to labor unions in an effort of mutual assistance. The RI Center for Freedom & Prosperity offers an example in its public comment in support of a proposed Trump administration rule removing the ability of states to send federally backed provider payments to third parties:

It is also morally unjust that federal dollars, earmarked for home care services, could have dues automatically siphoned-off by state government unions from workers’ paychecks, then transferred to the unions, with some of the funds ending-up in the political campaign coffers of SEIU. If the proposed rule is enacted, it would be just and proper that 100% of the allocated federal funding for home care services should first go to the workers; and it would then be up to the unions to collect dues – on their own – from those who freely choose to join.Earlier this summer, after a major push by SEIU and other progressive activists, legislation that had been on the back burner was rammed through Rhode Island’s General Assembly and signed by the Governor. This new law could transfer control of the home care services industry from the private sector to the government and its union allies. This proposed rule, by removing the government as its potential partner, would create less of an incentive for SEIU to attempt to unionize this industry.

At the same time, the burden on state taxpayers would rise, as the government would surely provide frivolous and unnecessary benefits to allow unions to offer a more compelling reason to unionize.

The new law in Rhode Island seeks to lure home care workers, most of whom are now employed under a successfully operating private ‘agency’ system, to register with the government, becoming quasi-public employees, with their names and other personal information then to be turned over to SEIU labor bosses for the purposes of unionization efforts.

Policymakers in Rhode Island strove to make this look like some sort of system innovation to provide better services, but it’s just an opening for labor unions to collect a cut of federal money.

Unions: Doing to Our Hospitals What They Did to Our Schools

One of the advantages of living on the East Bay is our easier access to Massachusetts for things like hospitals. In a pinch, a while back, my family went to Rhode Island Hospital/Hasbro, and it turned out to be one of the most terrible decisions we’ve ever made, with lifelong consequences. In the years since, we’ve heard from others with similar stories.

I don’t want to be unfair, though. It’s all too easy for a bad employee or unfortunate circumstances to create a uniquely bad experience. Especially in our time of social media, these isolated instances can come together to create a misleading impression. Some people will swear by Apple versus PC or Verizon versus AT&T and vice versa and so on. I don’t think this caveat applies to my take on Providence hospitals, but it might.

Let’s just say that the recent public theatrics of the nurses’ labor union in Providence don’t contradict my feelings:

Unionized nurses and other health care professionals at Rhode Island Hospital and Hasbro Children’s Hospital on Thursday voted no confidence in Lifespan’s CEO, Tim Babineau, and Rhode Island Island Hospital’s president, Margaret Van Bree, and called on Lifespan’s board “to take immediate, corrective action to restore the public’s trust in Rhode Island’s only Level One Trauma Hospital.”

Ray Sullivan, a spokesman for United Nurses and Allied Professionals Local 5098, which represents 2,400 nurses, technologists, therapists and health professionals at the two hospitals, said members also authorized union leaders to issue a 10-day strike notice if negotiations break down.

Obviously, I can’t speak for “the public,” but my lack of trust in this system has to do with people who work (or worked) there, not the management… except to the extent that management is to blame for the employees. The union organizers from United Nurses and Allied Professionals Local 5098 definitely are to blame for enabling employees who’ve made devastating mistakes.

The unions are doing for our hospitals what they’ve done for the public school system. That Bishop Hendricken alum Ray Sullivan is the union lead for the nurses as well as an organizer with the National Education Association of Rhode Island only drives home the point. Among the incidents that made labor unions so distasteful to me was a plan by Tiverton teachers to picket a hospital where a school committee member worked. Picketing a hospital — where people are suffering, grieving, and panicking — is no more acceptable when the union represents its workers than when it doesn’t.

The Circling Pension Comet

The government pension problem hasn’t gone away; it’s just gone quiet for a while, during which time, politicians are working to ensure that nobody ever notices it again.

An Illustration that Leftism Is Unions’ Reason for Being

I’ve often repeated the observation that government labor unions offer member services as a means of raising money and gaining influence, but their real reason for existing is progressive activism. That seems like a reasonable explanation for this peculiar reaction to the Janus ruling, observed by Joanne Jacobs:

After the Janus ruling — public employees can’t be required to pay “agency fees” to unions — some thought that “unions might temper their left-wing politics” to keep members from quitting, write Rick Hess and Grant Addison on National Review. That’s not happening.

“We’re becoming more political, not less political,” American Federation of Teachers president Randi Weingarten declared at the union’s annual convention, which featured speeches by Elizabeth Warren and Bernie Sanders and an award for Hillary Clinton.

The NEA, at its convention, gave awards to former First Lady Michelle Obama and former NFL quarterback Colin Kaepernick, note Hess and Addison.

An ordinary, run-of-the-mill organization constituted to provide a particular service will, upon some change that makes it easier for its customers to leave, take steps to ensure that it doesn’t give those customers reasons to do so. Backsliding into partisan, ideological positions is contrary to that impulse, especially with indications that only about half of teachers voted for Hillary Clinton.

Of course, the calculation is very different if moderating the organization’s politics is simply not an option. In that case, it makes perfect sense that they would retrench, take the hit to their bottom lines, and hope that pulling even harder on the far-left side of the rope will turn government back in their favor. Maybe — like cable news networks — they’re calculating that being more strident will make them more appealing to a narrower range of the potential customer base.

Or maybe it’s a last-ditch effort to win the political fight once and for all. If even-greater political activism can help their allies take over government, the unions can have their status and largess written into our society for good by force of law.

Truck Tolls: Sigh No, Peter and Gene, We Cannot Conclude that Truck Drivers Support Them

Every Thursday morning, as you probably know, WPRO’s Gene Valicenti hosts RIDOT Director Peter Alviti on the WPRO Morning News for a half hour plus segment. (Yeah, I know, I find it annoying, too.) Alviti takes questions from callers and spends a significant amount of air time promoting Governor Gina Raimondo’s wasteful, unnecessary, highly damaging RhodeWorks toll scheme.

On July 19, Alviti ratcheted it up a notch by involving his host.

Next/Last Round of Toll Gantries: Raimondo Administration Solicits Public Comment on an UNFINISHED Environmental Assessment

A couple of weeks ago, Governor Gina Raimondo’s Department of Transportation announced the locations of the balance of ten toll gantries and released an Environmental Assessment [PDF] of them. They also announced that hearings to take questions and comments on the E.A. would occur in three locations on July 27 – tonight, as a matter of fact.

Yes, that’s right, RIDOT is holding public hearings on a very significant project on a summer Friday evening. Quite similar in spirit, as a matter of fact, to the scheduling and location of the hearing for the first Environmental Assessment – in that case, two days before Thanksgiving hard by a cow pasture in South County so remote, the cows themselves need GPS to get there.

Home Care: When Everybody Works for the Government and Government Works for the Unions

The RI Center for Freedom & Prosperity is warning that the Rhode Island government’s dogged push to unionize home care workers despite recent Supreme Court precedent in the opposite direction could very well make the state a target for lawsuits:

The Rhode Island Center for Freedom & Prosperity warns SEIU and the state government that it could face legal peril if they do not fully comply with the new federal restrictions expected to be in place this fall, as it pertains to the attempted unionization of the home care industry.

“The landmark Janus decision by the US Supreme Court, combined with the expected implementation of the Medicaid Provider Reassignment Regulation Proposed Rule by the federal government, means public employees can no longer be forced to support the political agenda of their designated union. It also means the government can no longer aid unions in their attempt to skim dues from precious Medicaid dollars, intended for the care of our loved ones.” explained Mike Stenhouse, CEO for the Center.

Voters can tell whose side their elected officials are on by how they respond to these changes in federal labor law.

There isn’t really any question, in Rhode Island. The governing Democrats believe that unions represent a critical partner in their control of the electorate. Taxpayer dollars flow to the unions and then to the politicians (through jobs, donations, “independent” campaigns, and other routes), and unions organize employees into a voting block for the high-tax, big-government policies that the state’s dominant party is selling.

In Government, Labor and Management Negotiate Together Against an Empty Seat

In brief, what many of us on the right find objectionable about public-sector unionization is that it turns incentives around to put employees and management (i.e., elected officials) on the same side of the negotiating table, with taxpayers on the other side without representation. Developments in Rhode Island since the Supreme Court’s Janus ruling reinforce that impression. The unions are in the midst of a campaign to convince non-members to join. For example:

For the last two weeks, the president of one of the AFSCME locals at the University of Rhode Island has been on a campaign to win over potential union members who had, at some point in their work-lives, made a decision to opt-out of their union.

His target: a relatively small cluster of state workers in a professional staff unit at the university who have been paying a “fee” instead of union dues to Council 94, American Federation of State, County & Municipal Employees.

And yet:

The Raimondo administration has essentially gone mum since the “Janus” decision, except for the public release of a memo in which Gov. Gina Raimondo reaffirmed the state’s ban on giving out the personal contact information of state workers.

In other words, “management” is taking steps to give the labor unions total and un-countered access to employees while denying any similar access to groups that might oppose unionization. Of course, that access might not be necessary if the administration were doing what it ought to be doing in the oppositional design of labor negotiations and assuring the public that it is taking every step possible to let employees know what their rights are, including the benefits of being free of a labor union.

But a Democrat government in Rhode Island would never do that (and Republicans only rarely), so it falls to outside groups, like the RI Center for Freedom & Prosperity. The irony is that the government-insider types accuse the Center of being a creature of out-of-state business interests, which isn’t true, but even if it were, Rhode Islanders should take note that the only people on their side in this arrangement are the “outside groups,” which is necessary because nobody on the inside of our representative democracy actually represents them.

Differences in Union Negotiations

Two separate instances of difference are notable in stories about labor negotiations ongoing with Lifespan and the United Nurses and Allied Professionals. The first is a sort of hypocrisy of rhetoric. Lifespan has spent $10 million preparing to keep its operation going in the face of a threatened strike starting July 23, and the organization has said its final offer to the union is now reduced by that amount. In response, union organizer and former RI representative Raymond Sullivan states:

“UNAP’s dedicated nurses and caregivers have no intention of negotiating with a gun to their heads,” Sullivan said. “As of now, there are no plans to resume talks until Lifespan ceases its attacks on the union’s protected rights to collectively bargain and strike.

So when the union threatens to deprive the hospitals of the workers they need to operate, that’s just fair labor negotiations, but when management says it’ll have to hire temporary employees and make the cost up in the contract, that’s “a gun to their heads.”

The second notable difference is that between Lifespan’s actions and those of public-sector management. Sullivan, for example, used to work for the National Education Association of Rhode Island, an industry in which a hard line from management looks quite different. Far from facing a reduction in management’s final offer, in public schools, the union can usually expect to get multiple years of retroactive pay if it takes that long to come to an agreement.

This turn of events can leave taxpayers with the impression that school committees aren’t so much negotiating with the unions for that long as they are waiting for some turn of events to make it possible to take from taxpayers what both “sides” want. One can hardly imagine a school committee’s taking retroactive pay off the table, let alone reducing an offer. The union rhetoric (and media coverage) would be apocalyptic, and drag the school committee members through an agonizing time.

Abraham Glazer: Various Ideas to Improve Rhode Island Government and Life

Abraham Glazer shares some collected notes on policies that might do Rhode Island some good.

Teacher Unions and Students’ Earnings

Robert Verbruggen highlights what appears to be the same study I mentioned in January, although the researchers have increased the magnitude of the effect of teacher unionization on students’ future earnings:

We find robust evidence that exposure to teacher collective bargaining laws worsens the future labor market outcomes of men: in the first 10 years after passage of a duty-to-bargain law, male earnings decline by $2,134 (or 3.93%) per year and hours worked decrease by 0.42 hours per week. The earnings estimates for men indicate that teacher collective bargaining reduces earnings by $213.8 billion in the US annually. We also find evidence of lower male employment rates, which is driven by lower labor force participation. Exposure to collective bargaining laws leads to reductions in the skill levels of the occupations into which male workers sort as well. Effects are largest among black and Hispanic men.

Verbruggen expresses skepticism, as he should for a study that has a bit of that too-good-to-be-true feel for conservatives, but I’m not sure he’s considering the mechanisms. For instance, he emphasizes that the study focused on men because (his words) “the labor market for women changed so dramatically in this time period.” Having this ready excuse could lead one to be too quick to dismiss an underlying mechanism or indirect cause.

For instance, from the 1987-1988 school year to the 2011-2012 school year, the percentage of public school teachers who were men dropped from 29.5% to 23.7% (or one out of every three to one out of every four). If the same rate of decrease extends back in time, the percentage of male teachers at the beginning of the study window would have been much higher. That could suggest that the apparent effects of teachers’ collective bargaining are actually effects of a changing workforce, or it could suggest that the demographic trend is a result of collective bargaining.

In any event, it will be interesting to see whether the ability of government school employees to avoid union membership will have an effect on the percentage of men in the classroom, the career results of students, or both.

National Trucking Unloads on Rhode Island’s Truck-Only Tolls

This afternoon, the American Trucking Associations filed suit against Gina Raimondo’s RhodeWorks truck-only toll scheme, stating that it violates the Commerce Clause, citing its discriminatory nature and challenging its constitutionality. (View the lawsuit here.) Tune in now to 630 WPRO now, by the way, to hear the famous Mike Collins talking to John Loughlin (filling in for Dan Yorke) about the lawsuit.

The national truckers are not messing around: they are represented by Mayer Brown, the fifteenth largest law firm in the United States. Heavy artillery has been cut loose on a highly destructive, unnecessary new revenue program. On a certain, visceral level, that’s a beautiful thing and one wishes that this would happen with far more bad government programs.

Unfortunately, a highly likely outcome of the case will be an order to the State of Rhode Island to either desist tolling trucks or make it non-discriminatory by spreading the cancer to all vehicles including cars. Yet not one but two studies confirmed that tolls of any kind are not needed to repair Rhode Island’s bridges.

There have been many unanswered questions swirling around Gina Raimondo’s highly dubious, highly destructive toll plan.

Why was Governor Raimondo only capable of coming up with a cutting-edge, outside-of-the-box program that is destructive and burdensome rather than positive and propitious?

How did RIDOT get the truck counts and diversion rate, a critical basis for restricting tolls to only certain classes of vehicles, so wrong?

How did RhodeWorks tolls explode from $400M (per Governor Gina Raimondo in August of 2016 at Minute 15:00) to a completely open-ended, multi-billion dollar revenue stream?

Did Gina Raimondo, Nicholas Mattiello and Theresa Paiva-Weed truly believe that tolling trucks only, something that no other state does – a “unique approach” as RIDOT itself admits – was going to pass a legal challenge?

But the biggest question: if the lawsuit goes sideways and RhodeWorks tolls are ruled unconstitutional, will Nicholas Mattiello, Gina Raimondo and all Rhode Island legislators stand by their promise that tolls will never go on cars and scrap the RhodeWorks tolls?

[Monique has been volunteer spokesperson for StopTollsRI.com since tolls were first proposed three+ years ago and began working for the Rhode Island Trucking Association as a staff member in September of last year.]

Various Currents in RI Commercial Real Estate

Rhode Island’s commercial real estate market has stopped being a tenant’s market, which provides a lesson in the problem with our economic development strategy.

Massachusetts’s Education Warning Signs

I’ve been pointing out that Massachusetts took a turn away from the success of its education reform in the mid-2000s. As in Rhode Island, reforms that sought to fix the education system in cooperation with the interests that had helped to undermine it produced political pressure to end the reforms, even though they were working. This creates an educational ceiling. Massachusetts started earlier and hit its ceiling in 2007, while Rhode Island’s slower and less-enthusiastic move hit its ceiling in 2011, as aggregated scores on the National Assessment of Educational Progress (NAEP) test show:

People in Massachusetts are starting to notice, too, as evidenced by Thomas Birmingham and William Weld’s op-ed in the Boston Globe:

In 2010, the Commonwealth replaced its best-in-the-nation English and math standards with national versions that cut the amount of classic literature and poetry that students learn by more than half and extends the time it takes to reach Algebra I, which is the key to higher math study.

Today Massachusetts has essentially the same English and math standards as Arkansas and Louisiana. Students in those states can’t possibly match Massachusetts’ performance, so the political reality is that the bar gets lowered so more can clear it.

The results of this change in education policy have been swift. After years of improvement, our progress has come to a halt. Massachusetts is among a minority of states whose NAEP scores have fallen since 2011 and others are catching up.

Backsliding isn’t the result of any one policy change, but a change in attitude that leads to multiple, related changes: Accountability measures, charter schools, broader school choice, and higher standards all interact. More importantly, all of them have opposing incentives for families/students and the entrenched interests like teachers unions.

As in this morning’s post on patriotism, the solutions all build on each other. Reforming union policy to reduce the power of special interests will make accountability measures more plausible, while giving families high standards and alternatives will increase the resilience of the reform in the face of political pressure.

The Business That Pickets Clients When They Choose Competitors

A number of policy questions come into play with GoLocalProv’s coverage of a labor union’s picketing a project receiving Commerce RI tax credits.

As a result of the investigation on 4/24/18 it has been substantiated that JS Interior Construction has misclassified 27 employees as independent contractors and has failed to pay wages to the employees in violation of R.I. General Law 28-14-19. Misclassification of Employees — (a) The misclassification of a worker whether performing work as a natural person, business, corporation or entity of any kind, as an independent contractor when the worker should be considered and paid as an employee shall be considered a violation of this chapter.

If I’m interpreting the story correctly, a builder hired workers as subcontractors in order to avoid burdensome laws that prevent workers from agreeing to work for less than an arbitrary level set by government. Labor unions push for these laws in order to make their competition less competitive, and politicians agree to these laws in order to secure financial and boots-on-the-ground support from labor unions.

The first issue is that the state government shouldn’t be subsidizing private-sector projects in the state because bureaucrats have judged them worthy. The second issue is that the state government shouldn’t be restricting the rights of Rhode Islanders to agree to pay rates agreeable to both parties, especially as a systemic subsidy to private labor unions.

But the eye catcher of this issue is the labor union picketing a project ultimately (I’d suggest) because a non-union shop got the job. What would you think of a company that sent its employees to picket another business that was out-competing it — or, more accurately, to picket a client because he or she chose a different contractor?

That’s obviously offensive, but labor unions fit the progressive narrative and (more importantly) the progressive money-flow scheme, so it’s not only tolerated, but lauded.

Hoping for a Janus Effect on the Cost of RI Government

Jason Richwine notes, on National Review’s Corner, that the Janus decision looks likely to help bring public-sector compensation back toward private-sector reality:

… there is indeed a correlation between compulsory union dues and public-sector compensation. Based on data from the report that Andrew and I wrote in 2014, state workers in compulsory states were paid 17.0 percent more on average than comparable private workers, while state workers in non-compulsory states were paid just 5.6 percent more.

Take a look at Rhode Island’s position on his related chart:

How much more economic activity would we be experiencing if it weren’t for this premium taxed out of our economy, and how much more work could we get done on government services and maintenance if it weren’t so expensive?

In Search of “Agency Fee” Refunds

Here’s an interesting twist in the wake of the Supreme Court’s Janus decision, yesterday:

Public-sector workers across the country are seeking to recover back wages they paid to labor organizations in the event the Supreme Court declares mandatory union fees unconstitutional.

Class action suits have been filed against eight unions in New York, New Jersey, Pennsylvania, Minnesota, Maryland, California, and the state of Washington, accusing individual unions of violating workers’ rights by collecting mandatory dues payments. The Supreme Court is expected to rule on a groundbreaking case, Janus v. American Federation of State, County, and Municipal Employees, which challenges the constitutionality of forcing public-sector workers to pay union dues or fees as a condition of employment. The suits argue that any public-sector employee who participated in forced dues systems should receive financial “redress” from labor organizations.

Let’s stipulate that the number of public-sector employees in this category is probably pretty small in Rhode Island. If not being in a union saves only a little bit of money or none at all because you have to pay an “agency fee” for the work the union does on your behalf anyway, you might as well be a member and get the full benefits, whatever they are. One source puts the number of agency fee paying teachers under the National Education Association of Rhode Island at only 146, for instance. I did some research on this a few years back, and although I can’t find my notes, that sounds about right.

Still, being forced to pay a private organization in order to keep your public-sector job is a sufficiently egregious violation of an employee’s rights that those in this situation should seek a return of the money that was taken away from them unconstitutionally.

The Happy Face of Janus

Open post for transcript.

Unionizing Home Care Workers

Reading the section in this week’s Providence Journal “Political Scene,” one can’t help but think that our legislators are either not thinking things through or have ulterior motives:

Sponsored by Majority Whip Maryellen Goodwin in the Senate, and Rep. Christopher Blazejewski in the House, the legislation envisions a new class of worker — the “independent″ home care worker — going into the homes of the elderly and the disabled to help them with basic daily activities such as eating, bathing, dressing and getting to and from the toilet. The legislation would allow these independent contractors to choose a “representative″ to negotiate with the state over their rates, benefits “and other economic matters.”

Granted, the consequences of this bill would be much less than they would have been a few years ago, before the Supreme Court ruled that Illinois couldn’t force this class of worker to join a union. Before that ruling, parents who were simply seeking financial assistance to care for their disabled children were being billed for union dues. Even so, allowing unions into the equation will raise concerns about whether care providers are being fully informed about their rights and the pluses and minuses of joining the union as well as provisions that the unions might negotiate to be written into laws affecting even non-union workers.

More directly, though, this legislation would be another issue raising the question of who is actually advocating on behalf of taxpayers. As the Providence Journal points out, “since then-Gov. Lincoln Chafee signed the child-care unionization bill, the state subsidized cost of child care has increased by 54 percent.” Is Rhode Island’s budget not growing fast enough?

The article also raises the question of why this is needed. The legislation already calls for 10–20% raises for home care workers and implements annual inflation adjustments. Moreover, the column closes with Speaker of the House Nicholas Mattiello arguing on behalf of making pay for the workers more-competitive.

Two possibilities emerge: Either unionization is absolutely unnecessary and is simply a way to siphon off home care dollars to the unions and then back into politicians coffers, or it will drive up costs beyond what even sympathetic legislators think is reasonable.

Summing Up the Budget (And RI’s Problem) in One Sentence

The Providence Journal article on the Rhode Island House’s budget vote last night captures in one quotation the problem our state is struggling to overcome:

“I expect the budget to rise every year,” said House Speaker Nicholas Mattiello after the final vote, a few minutes before 10 p.m., in response to Republican complaints about overspending. “To not expect it to rise every year is not realistic.”

First, let’s go along with the premise that the state budget should rise every year. Does it have to go up 3.9% every year, regardless of the health of the economy or changes in taxpayers’ ability to pay? That’s the important next question. From Mattiello’s explanation, it doesn’t seem that there is any limiting principle. From his comments to WPRI’s Ted Nesi:

“I always look at the specifics,” he said. “The level of spending in this case was appropriate to the needs of our society.” He noted that the cost of social services continues to rise faster than other areas.

But there is no reason a budget this big has to climb every year. If it’s possible that annual growth of 3.9% is too much, then it’s possible for it to be too high, right now. Sadly, state leaders exhibit is no underlying philosophy. There is only a balance of various interest groups’ power. Raises for state employees. Increases in welfare-related spending. More crony deals (as foreshadowed by the increased generosity of tax credits for movie productions).

Taxpayers will only become a consideration when they do one of two things:

Change their voting habits in a way that threatens entrenched politicians.
Leave the state in sufficient numbers that the politicians have no choice but to reduce spending or squeeze those who remain painfully enough that they notice (and resort to #1).

Michigan Helps Us Imagine the Possibilities on Prevailing Wage

Warner Todd Huston and Jeff Dunetz report on a cost-saving measure in Michigan that seems nearly unthinkable in Rhode Island:

Its common knowledge that parts of Michigan are falling apart. One reason for the disintegration of infrastructure within Michigan is a jobs-killing union rule that drives up the cost of government projects. This puts many necessary repairs and upgrades outside the reach of State’s budget. Finally, this budget-killing rule has been thrown in the trash by the state legislature.

Wednesday, June 6th the Michigan House of Representatives and Senate passed a measure to put an end to the budget-killing union rule called the “prevailing wage.” This rule required that all construction projects initiated by the state government to pay workers the same wage union members make, even if the workers hired for said projects are not members of a union.

Rhode Island’s infrastructure maintenance budget would go so much farther (and require much less debt) if the government would allow itself to pay market rate for the work. Unfortunately, when it comes to our state government, we’re not a pragmatic state, but one concerned mainly with keeping insider arrangements alive.

The Union Organizer Who Thinks States’ Worth of People Don’t Care About Their Children

Americans periodically complain about the rancor in our political discourse, and while it’s certainly nothing new (and is better than, say, murderous feuds between factions), they have a point. We do better as a society to the extent that we can discuss difficult matters without doing and saying things that escalate emotions unnecessarily.

For the most part, doing and saying such things is probably inadvertent; relatively few people are so deeply engaged in public debate that their rhetoric is thoroughly conscious. Among those who are deeply engaged, some portion who use inflammatory rhetoric do so because they’re passionate and their sincere beliefs can’t help but inflame the other side. And then there are those who escalate emotions in order to isolate their opposition and manipulate everybody else.

I’d put American Federation of Teachers leader Randi Weingarten in that last group, and find the sort of rhetoric that Dan McGowan reports from her to be beyond the pale:

“Providence, Rhode Island is not Oklahoma City or Phoenix, Arizona,” Weingarten told reporters gathered outside Mount Pleasant High School. “And the fact that a mayor of this city is not sitting down trying to solve these problems and acting more like what we see in states that haven’t really cared about their kids is shocking to me.”

According to this self-interested union organizer, entire states’ worth of Americans don’t care about their children. Why? Presumably because their elected officials don’t give as much money to her members as she’d like.

If this were some isolated statement, that’d be bad enough, but we’ve more than ample experience with teachers unions in Rhode Island to know that it’s part of a deliberate organizational strategy to keep union members feeling undervalued and citizen-governments in constant turmoil that can only be relieved by giving in to the union’s demands. In short, it’s exactly the sort of attitude and behavior that ought to embarrass professional teachers and, if the Supreme Court decides for freedom in the upcoming Janus decision, lead them to cancel their memberships.

The Two Options for Keeping New-Economy Companies

A Ted Nesi WPRI article related to Pinnacle Logistics, an Amazon distribution company moving from Rhode Island to Connecticut, has me thinking that the Ocean State really has only two options, when it comes right down to it.

The termination letter, provided by an employee who asked to remain anonymous, said Amazon “has elected to terminate its PVD operations” due to “business reasons unrelated to PVD’s performance.” The employee said workers were stunned by the news in light of how busy and high-performing the facility appeared to them. …

State officials had said last fall Pinnacle planned to develop “a permanent facility in the near future on the airport premises,” and it’s unclear why the company changed its mind. T.F. Green spokesman Bill Fischer said the airport learned of Pinnacle’s decision Friday morning. …

“I know Amazon is a notoriously anti-union company and has been fighting unions in its various facilities since 1994, so it would not surprise me to learn that Amazon and Pinnacle decided to close this operation in retaliation for the union activity,” [Teamster lawyer Marc] Gursky told Eyewitness News.

Gursky said the Teamsters filed a new complaint against Pinnacle on Friday afternoon, alleging that the company had engaged in unfair labor practice by closing the plant to retaliate for the unionization effort.

I’d suggest a little bit of skepticism that any company running away from labor unions would head to Connecticut, which tends to come up higher on lists of labor union strength.

Be that as it may, we who live in Rhode Island can think of dozens of areas of insider leverage that might have made our state unacceptable to this sort of company. That leads to our two options, of which we can only pick one:

A vibrant, innovative economy in synergy with economic advances.
An insider system that gives enhanced leverage to special interests like labor unions, quasi-public companies, and countless fiefdoms.

One suspects that most people would choose option #1, if given the chance, but then, our electoral system has evolved to limit that chance.

Sinkholes of One Kind and Another

Readers in the Rhode Island area, particularly to the east of Providence, may have caught wind of the heavy traffic along I-195, yesterday. Apparently, crews were repairing some sort of “depression” in the road, perhaps from a prior patch. These things happen, of course, but the longer a fix takes, the more traffic it causes, and the more expensive it is to do road work and maintenance, the less state and local governments will be able to do.

With regard to that second point, this still from WPRI’s coverage arguably tells the deeper story:

To be fair, the reporter does say that the video was being taken as the crew was doing “finishing touches,” so at earlier periods the ratio of people working to standing around might not have been two to eight, as appears to be the case in this short clip. That said, seeing high proportions of watchers to workers is hardly an unusual experience in Rhode Island.

One suspects a large part of the calculation is the strict assignment of jobs. In traffic, recently, I watched a crew setting curbs along an exit ramp. Two guys were hanging out in the truck with all of the traffic cones, another appeared to be supervising, two guys were in the hole setting curbs, another was standing on a truck to offload the curb pieces a few feet away, and another was driving the machine back and forth to move the curbs. (Plus the cop directing traffic, of course.)

That crew could easily have been cut nearly in half without a loss in efficiency or safety simply by putting the cone placers to work setting curbs and giving the supervisor a more-active task. I never did road work when I was in construction, but similar tasks would probably have called for only three people: One helping to set the curbs, one operating the machine, and one going back and forth to hook the machine to each new curb piece.

Multiply that excessive labor cost times every task associated with every yard of roadway, and the potential savings that could be put toward accelerated repairs and maintenance or left in the private economy would be massive. Eliminating any presumed need for truck tolls would just be the starting point.

A Canary in Seattle

The city of Seattle is blazing trails in the assault on business and disincentive for job creation, and Seattle Times columnist Jon Talton is correct to warn of a reckoning:

One thing is clear. The tax will not be paid by Jeff Bezos, the world’s richest person, or any other real or imagined toffs running the targeted companies. It will be “paid” by hiring fewer people here, making fewer investments, thus perhaps reducing overall taxes to the city. This is not sticking it to The Man.

One of the fascinating aspects of the jobs tax is how it reveals a tectonic shift in Seattle politics.

The slow-moving but generally pragmatic center-left that governed for years has collapsed.

Some of Talton’s lessons are either (it seems to me) either off base or specific to Seattle. I’m suspicious, notably, of the blame that he puts on the GOP for becoming a “hard-right party” that exploded its leverage by booting its centrists. One needn’t change the tilt of one’s head too much to see that as something more like a center-right party that didn’t move far enough to the left to keep progressive activists from attacking its donors and volunteers.

Consider Talton’s complaint that voters don’t have options; that can be a sign that people won’t run, given the charged atmosphere. In short, this probably isn’t quite the distinct trend that he presents it as:

Meanwhile, a hard-left movement arose with the activist foot soldiers, infrastructure and energy to win municipal elections. It might represent a minority of voters, but given the withering away of the old order, it can win. Voters don’t have alternatives.

This lesson is probably increasingly universal across the country. An activist infrastructure has been built up with funding from embedded interests (like labor unions), a supremely wealthy progressive elite, and siphoned taxpayer money from the Obama Administration. At the local level, it targets any politician or grassroots organization that attempts to offer an alternative, and so the alternative doesn’t get a voice.

So… the city gets insane tax-and-spend policies that create obvious incentives against economic activity and for reliance on public subsidies. A reckoning will come, indeed.

Raimondo’s Major (Union) Jobs Announcement

The expansion deal that the state government of Rhode Island has just announced with Electric Boat at the quasi-public Quonset industrial park includes an understated feature:

As part of the deal with Rhode Island, Electric Boat has agreed to use union construction workers on the expansion and pay the prevailing wage.

Why would the government of the State of Rhode Island negotiate for the mandatory use of union labor? If state officials would rather have more money go to construction workers, rather than have it available for additional investment, the prevailing wage requirement would have been sufficient.

The likely answer sheds a different light on the component of the deal requiring “$14 million in state infrastructure spending at the Quonset industrial park.” If the state is negotiating on behalf of unions, this provision may have been requested by the state negotiators. That is, they were happy to tie taxpayers hands with a contract requiring new government spending for labor-union work.

Note, by the way, that the vast majority of the deal offered to Electric Boat is a targeted exemption from sales tax. Imagine how much more other companies would invest here if the state would eliminate or dramatically reduce the sales tax as a blanket measure. Of course, if people were investing their money in economic development on their own initiative, the government officials wouldn’t so often have a seat at the negotiating table to direct funds toward their friends and political supporters.

Political Monday with John DePetro: Increasingly Complex Governor’s Race

For my weekly call-in on John DePetro’s WNRI 1380 AM/95.1 FM show, this week, the topic was the increasingly broad possibilities for the governor’s race.

Open post for full audio.

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