Class Warfare in Politics

FITE asks a simple question, but the answer is complicated.

Newsletter #33 Will Kerry Target the extremely rich?

Can the American public warm up to a campaign of "class warfare?" John Kerry evidently doesn’t think so. As of this writing, he has not uttered one word on the most egregious part of an ongoing class warfare being waged by the extremely rich, the corporate crime wave of the past 15 years that has robbed the rest of us of billions, if not trillions, from our savings.

Prominent liberals are warning him to avoid the issue. Well known columnist Robert Kuttner has publicly warned against a class warfare strategy. Kuttner claims that "this is not a country where most voters resent the rich as a class. It's a land where nearly everyone would like to be rich." Since all of us would like to get there some day, he reasons, they won’t support tax increases on the rich.

Kuttner and others are wrong. While Americans don’t want to tax the rich who earn several times their own income, they would be quite happy to tax to the hilt those making hundreds or even thousands of times more. These are the EXTREMELY rich. They may easily make in one HOUR what the rest of us work hard to make in one YEAR. In fact, it’s part of a 300 year political tradition of detesting the monied aristocracy for the way it always threatens democracy.

Kerry ignores this sentiment at his peril. The Democratic party lost many supporters during the middle 1990s when they stopped targeting the "lobbyists" and giant corporations in order to fill their party coffers with money from them. Winning these voters back with a serious program of taxing these embezzlers would, according to author Thomas Frank and others, bring them back. (His excellent book - "What’s the Matter with Kansas?")

Kerry should remember that crime is a "values" issue. While Kerry could not compete with Bush on school prayer or abortion, he could gain support on the crime of embezzling the savings of hard working Americans.

But he would, of course, risk losing some significant campaign contributions. The presidential candidates with the most money have always won the election. And, by the way, Kerry himself has never spoken in favor of measures that would stop these criminals.

For a more detailed treatment of this, go to the John Kerry page on our website.

--Charles Palson

Kerry isn't the problem, at least not by himself. The problem is the stranglehold of the right-leaning Democratic Leadership Council (DLC) which champions corporate interests in the Democratic Party and was the moving force behind Bill Clinton's disavowal of welfare and Kerry's extraordinary success in fund-raising since the primaries. It is also the group behind Dean's loss; no, not the scream but the army of apparatchik they mobilized to defeat a rank outsider and the first serious threat to their power that they've ever faced. eRobin, in a post a few days ago after Barack Obama's speech, put it this way:

I said in a previous post that Dean and Obama represent the future of the party. After last night, it's clear that the party is not willing to tolerate a reform-minded Dean. He was effectively brought to heel despite the clamoring of the crowd to hear him say that he will continue to fight up and down ballot for the progressive candidates across the country. Dean was the party's chance to reach out to Nader voters without using Nader and they crushed the idea with force. They don't need to be reminded of who's a Democrat around here.

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The Party brooks no dissent even if it's only showing up as memories.

Obama's speech, as brilliant as it was, is a good example of that. It toed the Party line completely. I'm afraid that in him we are seeing someone being groomed to be a figurehead for a phony new direction in the Party. They'll get a lot of mileage out of him because he is beautiful to look at and to hear. And he's a member of a minority group, which always is a good thing when you're talking "new direction". But I'm concerned that he isn't the reformer that the Dems will need in order to do what Andy Rappaport, the progressive fundraiser featured in the NYT magazine story Wiring the Vast Left-Wing Conspiracy, is suggesting when he says:

''There is a growing realization among people who take very seriously the importance of progressive politics that the Democratic Party has kind of failed to create a vision for the country that is strongly resonant,'' he said. ''And our numbers'' -- meaning Democrats as a whole -- ''are decreasing. Our political power has been diminishing, and it's become common knowledge that the conservative movement has established a very strong, long-term foundation, whereas we've basically allowed our foundation, if not to crumble, to at least fall into a state of disrepair.

The central question of the article is which groups are going to get the money that Rappaport and his associates believe is "floating out there" for progressive causes. Will it be 527's like MoveOn.org that resonate with millions of people and energize them so much that they give their own time and money to the cause? Or will it be to the Democratic Party? Although everyone was putting on a happy face last night, it's really a choice between what we know Dean represents but didn't bring to the floor and the status quo that Obama stood for last night. For Obama, it's a choice between being part of a machine that is happily trying to crush Dean's reform efforts while it positions itself as the voice of all America, or part of the engine of real change.

It isn't just Obama. There are other rising stars in the Demo party like Nancy Pelosi, who has become a real power in only a few years, who have the fate of the party in their hands. If these potential superstars buy the DLC line then Ralph Nader is right and most of the differences between the parties will slide into oblivion. We will find ourselves with the choice of voting for right-wing conservatives masquerading as liberals or for extremist right-wink nutjobs.

But if they instead choose to move toward Dean and the 527/populist wing, the party will have to go with them and real liberalism could be re-ignited. They have the power and the charisma to do it--let's face it, Dean damn near pulled it off and he has neither--but it isn't clear to me that they understand that the party is facing a choice. They think they can have it all.

They can't. If they try, it will backfire on them as it did in '02 and activists will abandon the party in droves. They're only back now because Bush has united them with his greed, arrogance and incompetence. I think Chuck is right, though not necessarily about Kerry: the future of the Democratic party lies in one of two directions--as Republicans-lite or populists genuinely fighting for the little guy as they used to.

Microsoft Outsourcing High-Level Jobs

UNION: HIGH-LEVEL JOBS BEING SENT OVERSEAS

By Kristi Heim

San Jose Mercury News

Two years after Microsoft executives began urging managers to outsource software development work to India, a Washington state technology union says the company has sent increasingly high-level jobs overseas, including some related to Longhorn, the next version of Windows.

The Washington Alliance of Technology Workers says it obtained internal documents from a Microsoft worker that show dozens of Microsoft projects now being handled by companies in India, such as Satyam, Infosys and Wipro. Through such outside companies, Microsoft has hired 1,000 contractors for work ranging from software design to Web development, WashTech says.

A Microsoft spokeswoman declined to confirm the numbers or the authenticity of the documents, but said WashTech's claims were off base.

``These accusations do not reflect an understanding of the global nature of our business,'' said Microsoft spokeswoman Stacy Drake. ``It's part of our business model to work with thousands of companies around the world.''

'The global nature of their business', that's a good one. Translation: 'We can so we are.' I think the fact that the richest corporation in the world is cutting minor corners by outsourcing to save a few dollars they'll hadly even miss pretty much says it all about the standard corporate excuse that they're only doing it because they can't afford not to.

The fact that Microsoft or other technology companies hire workers overseas is no surprise, but the company's aggressive outsourcing efforts are moving into more advanced work and into the latest products, argues WashTech President Marcus Courtney.

In July 2002, Microsoft Senior Vice President Brian Valentine gave a presentation urging managers to begin outsourcing software-development projects to contractors in India for ``quality work at 50 to 60 percent of the cost.''

``There's a shift taking place, and I don't know if employees realize how serious it is,'' Courtney said Wednesday. ``They're hiring developers and hardware engineers overseas, and it's clearly duplicating a lot of the work that gets done in the U.S.''

Documents provided by WashTech list contracts with outside companies for projects such as the Longhorn Migration Guide, .NET Application Security, and deployment of the Windows Server 2003 update. A migration guide refers to software that helps customers move to Longhorn from a different operating system, and .NET is Microsoft's technology for Web-based services.

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``It's going to happen more and more just because Microsoft products are more mature and so they require less intense design work,'' he said. ``So it becomes feasible to do it thousands of miles away.''

MS code-geeks better start practicing their burger-flipping.

Higher Earnings Cut Support for Poor Families

I've spoken before of the tricks conservatives have embedded in the welfare regs to make the poor ineligible for help the instant they raise their heads above water. The National Center for Children in Poverty has released a study done in Pennsylvania that shows that those tricks, developed under Reagan, are still very much in use.

About 85 percent of low-income children have parents who work, and most have at least one parent working full-time, year-round. Nonetheless, many of these parents are unable to afford basic necessities for their families, such as food, housing, and stable child care. Even a full-time job is not always enough to make ends meet, and many parents cannot get ahead simply by working more. As earnings increase—particularly as they rise above the official poverty level—families begin to lose eligibility for work supports. At the same time, work-related expenses, such as child care and transportation, increase. This means that parents may earn more without a family experiencing more financial security. (1) In some cases, earning more actually leaves a family with fewer resources after the bills are paid.

The Family Resource Simulator, developed by the National Center for Children in Poverty, illustrates how this happens. This web-based tool allows users to chart a hypothetical family’s progress in the workforce and to see how public policies reward and encourage employment—and sometimes discourage parents from earning more.

Low Income in Pennsylvania: The Petersons

The Petersons live in Philadelphia with two children, ages 4 and 6. The federal poverty level for such a family is $18,850 per year. (2) For simplicity, the Simulator assumes that the Petersons begin with no income; then one parent enters the workforce and steadily increases hours to full-time employment. After that, the second parent begins part-time work and gradually moves into full-time employment. When the Petersons’ employment requires outside child care, both children go to child care centers (the 6-year-old goes after school). The Petersons pay taxes on their earnings, and when they qualify, they receive the federal Earned Income Tax Credit (EITC) and the federal Child Tax Credit. In addition, the Petersons receive food stamps and public health insurance.

As the Petersons’ earnings increase, their child care and transportation expenses increase, and they begin to lose eligibility for the benefits that support work (see Figure 1). The parents lose public health insurance coverage well before the family’s income reaches the federal poverty level, when one parent is working less than 30 hours per week, and the other is not employed. This simulation assumes that the Petersons have insurance through an employer (nationally, only 9 percent of part-time workers have employer-based health care benefits (3)). Without this benefit, the Petersons would have to pay substantially more or go without health insurance. By the time both parents are working full-time, together earning about $30,000 per year, the family is no longer eligible for food stamps, and the EITC has nearly phased out.

Figure 1: Peterson Family


The Petersons’ resources, even with tax credits, food stamps, and public health insurance, don’t exceed expenses until their earnings reach $45,000. Increased earnings initially yield steady increases in the family’s net resources. However, as the family’s earnings double from $15,000 to $30,000, the combination of increased child care and transportation costs, the loss of food stamps, and the phasing out of the EITC results in a net loss of $4,700 in resources after expenses. At $47,000—two and a half times the federal poverty level—the family has about $1,200 in resources available to them after basic expenses are paid. That’s just $100 per month for a family raising two children.

Thousands of families in Pennsylvania have resources and expenses similar to the Petersons. There are 411,000 low-income families living in the state, and 121,000 of them have a preschool-aged child (under age 6). Among low-income families in Pennsylvania, 82 percent have at least one parent who works, and 51 percent have a parent who works full-time, year-round. Forty-six percent are two-parent families.

There are other examples on the NCCP site, and they show quite graphically the way supports are kicked out from under low-income families at the earliest possible moment, long before they are no longer needed. I've seen some families break up under the strain, and others where the worker lost his/her job or was forced to cut their hours back because of the pressures losing that support created (absence from work due to child-care responsibilities when pre-school support was withdrawn was the most common cause). The study concludes:

Challenges for Policymakers

Federal and state budget woes threaten existing work supports for low-income families. Nearly half the states have reduced access to child care subsidies by lowering income eligibility limits and/or increasing family co-payments. More than 30 states have approved or proposed cuts to their public health insurance programs that affect low-income children and/or parents’ access to coverage. Many of these changes hit families just above the poverty level the hardest. Pennsylvania, for example, has a state-funded health insurance program designed to serve low-income parents with income above the Medicaid eligibility limit. But enrollment in the program is capped, and as of May 2004, the state was only enrolling parents who had applied before the end of March 2003. (8) At the same time, unemployment remains high, and job creation has been slow. As policymakers respond to the difficult choices they face, understanding the impact of public policies on the resources and work incentives of low-income working families is critical.

You'd think a human of normal intelligence wouldn't have to be told that, wouldn't you?

More Jobs, Worse Work

I've been trying to get to this since Thursday but haven't had either the time or the energy to do it justice. Steven Roach, chief economist for that bastion of radical Commie progressives, Morgan Stanley, wrote a long article in the NYT on 'the state of the American labor market' that makes sober reading.

The state of the American labor market remains the defining issue of the current economic debate. Through February, the United States was mired in the depths of the worst jobless recovery of the post-World War II era. Now, there are signs the magic may be back. More than a million jobs have been added to total nonfarm payrolls over the past four months, the sharpest increase since early 2000.

These gains certainly compare favorably with the net loss of 594,000 jobs in the first 27 months of this recovery. But there's little cause for celebration: the increases barely make a dent in the weakest hiring cycle in modern history. From the trough of the last recession in November 2001 through last month, private sector payrolls have risen a paltry 0.2 percent. This stands in contrast to the nearly 7.5 percent increase recorded, on average, over the comparable 31-month interval of the six preceding recoveries.

Nor is there much reason to celebrate the type of jobs that have been created over the past four months. In general, they have been at the lower end of the economic spectrum.

By industry, the leading sources of hiring turn out to be restaurants, temporary hiring agencies and building services. These three categories, which make up only 9.7 percent of total nonfarm payrolls, accounted for 25 percent of the cumulative growth in overall hiring from March to June. Hiring has also accelerated at clothing stores, courier services, hotels, grocery stores, trucking businesses, hospitals, social work agencies, business support companies and providers of personal and laundry services. This group, which makes up 12 percent of the nonfarm work force, accounted for 19 percent of the total growth in business payrolls over the past four months.

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An equally dramatic picture emerges from the survey of American households. According to the Bureau of Labor Statistics, the total count of persons at work part time - both for economic and non-economic reasons - increased by 495,000 from March to June. That amounts to an astonishing 97 percent of the cumulative increase of the total growth in employment measured by the household survey over this period. By this measure, as the hiring dynamic has shifted gears in recent months, the bulk of the benefits have all but escaped America's full-time work force.

Finally, the occupational breakdown of the American labor market, as also sampled by the survey of households, provides yet another facet of the character of the recent hiring upturn. It turns out that fully 81 percent of total job growth over the past year was concentrated in low-end occupations in transportation and material moving, sales and repair and maintenance services. At the upper end of the occupational hierarchy, increases in construction and professional jobs were partly offset by sharp declines in the numbers of production workers, who mainly toil in manufacturing plants.

That's us, folks. The Bush economy which has been so good for corporate profits and CEO salaries has been deadly for everyone else, particularly those of us who count on production jobs. Cleveland alone has lost some 60.000 production jobs to robots and outsourcing. (AirAmerica News) Bush Commerce Secretary Don Evans told workers they should 'quit whining' about massive job offshoring, and went on to insist that globalization was 'good for the economy'. What Roach is saying is that the 'economy' it's good for is measured by corporate profits alone; the rest of us are sliding downhill and our attempt to stop the slide is making things worse.

Consequently, from three different vantage points - employment breakdowns by industry, by occupation and by degree of attachment - the same basic picture emerges: While there has been an increase in job creation over the past four months - an unusually belated and anemic spurt by historical standards - the bulk of the activity has been at the low end of the quality spectrum. The Great American Job Machine is not even close to generating the surge of the high-powered jobs that is typically the driving force behind greater incomes and consumer demand.

This puts households under enormous pressure. Desperate to maintain lifestyles, they have turned to far riskier sources of support. Reliance on tax cuts has led to record budget deficits, and borrowing against homes has led to record household debt. These trends are dangerous and unsustainable, and they pose a serious risk to economic recovery.

(emphasis added by me)

Roach's question is very simple: 'What are we going to do about it?' The answer is: Bush plans to do NOTHING. That's the way he wants it, that's the economy he has been trying to bring about his whole first term, and now he has it. It's an economy that is exclusively anti-worker and pro-corporate, and what Roach is seeing is the result of that deliberate skew.

But Roach clearly sees what the Bush Administration ignores: who's going to buy all this shit when the job market finally collapses and the middle-class is wiped out? What happens after the radcons succeed in turning America into an Argentine-style third-world country steeply divided between the haves and the have-nots with all the money at the top? Do they even care what happens then?

The economic picture is a lot bleaker than it looks on the surface, especially for us, and so far nobody's doing a damn thing to reverse this course.

Worker Wages and Health Insurance Should Be Center of Trade Debate

In an Op-Ed in today's NYT, Wiiliam Gould, chairman of the National Labor Relations Board under Clinton, makes the case that no matter who is elected in November, national governments can have little impact on slowing globalization. They can, he argues, have a significant effect on the impact of those changes domestically.

Stanford, Calif. — Wages declined and unemployment held steady last month. So at this week's convention and for the rest of the campaign, John Kerry is likely to make an issue of Americans' anxiety about jobs - and his promised insistence upon labor standards as part of future trade agreements is an astute political stance.

But from a practical standpoint, it will have almost no effect. The adoption of labor and environmental standards, while symbolically significant, will not slow America's job and income losses, and the prospect for significant international negotiations on such matters is remote.

One problem is that global wage disparities are enormous. No serious person argues that wages, economic benefits and other aspects of employment should be equal or even comparable in the industrialized and developing worlds. That is because such a policy would lead to economic devastation for the developing world, disrupting international trade and enhancing prospects for worldwide conflict.

An international minimum wage, for example, would also require that any trading partner with the United States have some form of acceptable wage. But what would the wage be, and how would it be enforced? If the United States determines such matters for itself, it risks international opprobrium for a unilateralist approach, a claim with which the Bush administration is familiar.

But while international standards for economic matters like wages are not practical, the same cannot be said for so-called core standards that have been adopted by the International Labor Organization, an agency of the United Nations. These standards, intended to promote fair treatment of workers, are not binding. But the president and Congress could include them in future trade agreements - and even insist upon their inclusion in Nafta itself and legislation promoting trade with China.

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To improve the prospects of workers in the third world, the United States could provide more foreign aid, which could then be spent on education. Yet the United States now ranks dead last among developed nations in percentage of gross domestic product devoted to foreign aid, and the political wherewithal to increase foreign aid is thus far not forthcoming.

In many ways international trade is a domestic issue: trade brings change, and change frequently means painful dislocation that can be assuaged only by social programs. In this context national health insurance makes sense, as does a wage insurance program like the one Bill Bradley advocated in 2000. What laid-off auto and steel workers need is the same as what their outsourced service and professional counterparts need: not a new trade war, but domestic legislation on health benefits and wages. That should be the focus of the trade debate in 2004.

Wal-Mars Invades Earth

I rarely do this except with short newspaper editorials, but I'm going to reprint this Barbara Ehrenreich piece in full. I don't think Barbara will mind. The NYT might but fuck 'em. I can't bring myself to cut a single word.

By BARBARA EHRENREICH

Published: July 25, 2004

It's torn cities apart from Inglewood to Chicago and engulfed the entire state of Vermont. Now the conflict's gone national as a presidential campaign issue, with John Kerry hammering the megaretailer for its abysmally low wages and Dick Cheney praising it for its "spirit of enterprise, fair dealing and integrity." This could be the central battle of the 21st century: Earth people versus the Wal-Martians.

No one knows exactly when the pod landed on our planet, but it seemed normal enough during its early years of gentle expansion. Almost too normal, if you thought about it, with those smiley faces and red-white-and-blue bunting, like the space invaders in a 1950's sci-fi flick when they put on their human suits.

Then it began to grow. By 2000, measures of mere size - bigger than General Motors! richer than Switzerland! - no longer told the whole story. It's the velocity of growth that you need to measure now: two new stores opening and $1 billion worth of U.S. real estate bought up every week; almost 600,000 American employees churned through in a year (that's at a 44 percent turnover rate). My thumbnail calculation suggests that by the year 4004, every square inch of the United States will be covered by supercenters, so that the only place for new supercenters will be on top of existing ones.

Wal-Mart will be in trouble long before that, of course, because with everyone on the planet working for the company or its suppliers, hardly anyone will be able to shop there. Wal-Mart is frequently lauded for bringing consumerism to the masses, but more than half of its own "associates," as the employees are euphemistically termed, cannot afford the company's health insurance, never mind its Faded Glory jeans. With hourly wages declining throughout the economy, Wal-Mart - the nation's largest employer - is already seeing its sales go soft.

In my own brief stint at the company in 2000, I worked with a woman for whom a $7 Wal-Mart polo shirt, of the kind we had been ordered to wear, was an impossible dream: It took us an hour to earn that much. Some stores encourage their employees to apply for food stamps and welfare; many take second jobs. Critics point out that Wal-Mart has consumed $1 billion in public subsidies, but that doesn't count the government expenditures required to keep its associates alive. Apparently the Wal-Martians, before landing, failed to check on the biological requirements for human life.

But a creature afflicted with the appetite of a starved hyena doesn't have time for niceties. Wal-Mart is facing class-action suits for sex discrimination and nonpayment for overtime work (meaning no payment at all), as well as accusations that employees have been locked into stores overnight, unable to get help even in medical emergencies. These are the kinds of conditions we associate with third world sweatshops, and in fact Wal-Mart fails at least five out of 10 criteria set by the Worker Rights Consortium, which monitors universities' sources of logoed apparel - making it the world's largest sweatshop.

Confronted with its crimes, the folks at the Bentonville headquarters whimper that the company has gotten too "decentralized" - meaning out of control - which has to be interpreted as a cry for help. But who is prepared to step forward and show Wal-Mart how to coexist with the people of its chosen planet? Certainly not the enablers, like George Will and National Review's Jay Nordlinger, who smear the company's critics as a "liberal intelligentsia" that favors Williams-Sonoma. (Disclosure: I prefer Costco, which pays decent wages, insures 90 percent of its employees and is reputedly run by native-born humans.)

No, Wal-Mart's only hope lies with its ostensible opponents, like Madeline Janis-Aparicio, who led the successful fight against a new superstore in Inglewood, Calif. "The point is not to destroy them," she told me, "but to make them accountable." Similarly Andy Stern, president of the Service Employees International Union, will soon begin a national effort to "bring Wal-Mart up to standards we can live with." He envisions a nationwide movement bringing together the unions, churches, community organizations and environmentalists who are already standing up to the company's recklessly metastatic growth.

Earth to Wal-Mars, or wherever you come from: Live with us or go back to the mother ship.

Republicans Close Corporate Loophole--No Kidding!

In a development that I must admit has me scratching my head in befuddlement, the Republican Senate, previously one of the best friends corporate America has ever had (except for Bush, Cheney, and the Republican House, but they're not so much 'friends' as 'employees'), is about to vote to--and this is the part I don't get--close a legal loophole that has saved some big corporations from paying $$Million$$$ in unemployment premiums. What this article describes is a scam well-known to a lot of people who have worked as temps over the last decade--including a couple of friends of mine--and got hooked in participating in it.)

Tougher Rules for Unemployment Premiums Clear Senate

By Albert B. Crenshaw
Washington Post Staff Writer
Saturday, July 24, 2004; Page E03

The Senate gave final congressional approval Thursday night to a bill that would require states to close loopholes in their unemployment insurance laws that have allowed unscrupulous employers to dodge millions of dollars in premiums.

The loopholes have allowed employers who lay off many workers to avoid the higher premiums that usually result, and they have cost state and federal unemployment insurance funds millions, possibly billions, of dollars, according to the Government Accountability Office and state officials. Other employers have been forced to pay higher premiums to offset these losses.

Carl T. Camden, president of Kelly Services Inc., the big temporary employee firm -- and one that faces higher premiums -- has been campaigning for tighter laws. He called the quick congressional action very gratifying.

Unemployment insurance premiums are based on experience, that is, whether a company has a history of layoffs, which cause workers to become eligible for benefits. The more layoffs a company has had, the higher its premiums.

But new companies are often given a clean slate, offering sharp operators an opening.

In a typical version of the strategy, a company that has had lots of layoffs forms a new subsidiary, which in many states is entitled to a low "new company" rating, and shifts most of its workers to it. State unemployment taxes are levied on a per-worker basis, so the shift results in big savings for the company, in many cases millions of dollars.

A GAO study last year found that laws in more than half the states do not clearly forbid such a shift.

The bill, passed by the House on July 14, requires states to close this loophole, and to develop methods for detecting violations. It imposes penalties on companies that engage in the practice and on promoters of the strategy.

Camden acknowledged yesterday that it may take states some time to comply, but in the meantime "it chills future action" by companies that might have been considering the move.

Companies will "know the legal heat has been turned up," he said. "At least you could claim prior to this point [that the law] was ambiguous. It's not ambiguous now."

Backers say they expect President Bush to sign the bill.

The scam revolved around the corporation creating a dummy company which it then pretended was new in order to take advantage of a break that was meant for genuinely new companies struggling to get by, the kind of company that couldn't be sure from one month to the next whether it would be able to meet its payroll or have to lay off workers. When the law was passed originally, the Congress was trying to encourage small companies to hire more workers earlier than they might have otherwise by lowering the unemployment premiums they would have to pay if their optimism didn't pan out.

But rather than that, the corporations jumped all over the 'loophole' to avoid paying the $$$tens of millions$$$ they would otherwise have owed because of their 'just in time' hiring strategy.

Give these guys an inch, and they'll drive a corporate jet through it.

What I don't get is, why is the Republican Senate suddenly concerned about temporary workers and their unemployment checks? Why are they suddenly, after years of pandering to the very same corporations, biting the hand that feeds them? Don't tell me that the deficit is so huge it's scaring them into starting to re-claim some of the $$$TRILLIONS$$$ in taxes and penalities and premiums the corporations have ducked out of paying using technicalities and loopholes just like this one.

It can't be that, can it?

Unionized security guards better able to tackle terror threats

By SAM SKOLNIK
SEATTLE POST-INTELLIGENCER REPORTER

A local union branch, trying to place many of the area's private security guards in its fold, released a study Thursday that it said showed a unionized work force would make the guards better able to respond to crimes, natural disasters or the threat of terror attacks.

Officials with the Service Employees International Union Local 6, which represents about 2,400 office building janitors in Seattle and Bellevue, held a news conference yesterday flanked by several local Democratic politicians and other supporters.

They said a majority of security guards, undertrained and underpaid, were eager to be unionized so they could improve and standardize training procedures, better their working conditions and slow high turnover rates.

Office building and public transit security in Seattle is only as strong as its weakest link, City Councilman Nick Licata said.

"Right now, the private security force is the weakest link," he said.

Licata, union officials and others stressed that security guards receive no FBI fingerprint checks when hired and no "site-specific" training to make sure they know in detail the structure they are paid to protect.

"Seattle's commercial building owners, the Sound Transit system and other sensitive public sites use personnel from private security firms to detect, deter and report threats," wrote the SEIU in its 18-page report. "However, these building owners may be creating a false sense of security, since Seattle security officers often get minimal training."

The SEIU hopes to represent about 1,500 private security guards regionally.

Homeless Americans Elect to Join the Political System

By Elizabeth Mehren, LA Times Staff Writer


BOSTON — For "years and years," when people told him to vote, Anthony Addison retorted that he had no faith in the political system. After all, what had it done for him, a homeless Vietnam veteran who said he was too disabled to work?

But on Thursday, as Addison, 59, joined nearly 200 other homeless people here to register as first-time voters, he declared: "This is the first step to becoming part of the system. I can stay in my shell, or I can come out and take part in the process."

That was exactly what four residents of New England's largest homeless shelter, the Pine Street Inn, had in mind last winter when they started signing people up to vote.

After visiting shelters around Boston sporadically for months, the four men decided to take their effort national, and they kicked off their campaign with a one-day drive around the country.

On Thursday, volunteers registered homeless and low-income people at 48 locations in 17 states, including California.

Katie Fisher, a field organizer in Washington for the National Low Income Housing Coalition, said the campaign signed up close to 1,000 voters on Thursday alone.

In Boston, in a tent on the grounds of the international headquarters of the Christian Science Church, 170 homeless people signed up to vote. A similar effort in Worcester, Mass., an hour west of Boston, recorded 130 new voters; in New York, the number was 110.

"The whole reason we are doing this voter registration is to empower people to act on their own behalf," said Fred Atkinson, a former computer consultant who became homeless after a series of personal tragedies. "If we truly want to bridge the gap between homeless and mainstream society, we have to do it by voting."

The 23,000 homeless people in Massachusetts could fill an entire town, Atkinson said.

"And those are just the ones we can count," he said. "There are others who live in their station wagons, in tents, in cemeteries. They're out there."

Feds Shirking Responsibility to Homeless

Can homelessness end? Not this way

SEATTLE POST-INTELLIGENCER EDITORIAL BOARD

Like many cities, Seattle is working on plans to end homelessness in 10 years. But no city can pull off such a worthy goal without help.

Unless the federal government is a true partner, the now-chronic problems will entangle men, women and children who today still have decent shelter. But even as hard-pressed cities (and states) look at what they can do better, the federal government is in retreat.

Increasingly, the federal vision focuses on spotting opportunities to shirk more responsibility without getting much blame. Another small step backward is likely today, when the House Appropriations Committee votes on housing funds for next year.

A subcommittee has approved across-the-board cuts of some 4.3 percent for most housing programs. The full committee's members, including U.S. Reps. Norm Dicks and George Nethercutt of Washington, ought to reverse the cuts. Sad to say, housing advocates fear committee Republicans might decide to do even worse by housing so they can restore money for space programs in House Majority Leader Tom DeLay's Houston-area district.

Homelessness is almost always an unnecessary tragedy. The federal government must join cities in resisting the apathy that treats this serious social problem as a routine and acceptable part of American life. (emphasis added by me)

'Let's see: housing for those homeless welfare bums or pork for The Hammer's home district? That's a tough one. Lemme think....OK. All done.'

Why isn't it possible to restore the money for the space program and help build housing for those who need it when we're talking about less money in total than the amount the Pentagon spends in a month on Star Wars R&D--the single most pointless and massive waste of government money ever devised? Why is that a priority, this sinkhole of $$Billions and Billions$$$ of our tax money over the course of 20+ years for a pipe dream that scientists admit doesn't and probably won't ever work and even the Pentagon's strategists say isn't necessary or an efficient use of defense dollars, when we've got hundreds of thousands of people living on the streets? When did paranoid fantasies get pushed to the top of the list and hard-core reality to the bottom? How did our priorities get so far out of whack?

Budget Impasse in CA Linked to Labor Law

We've written about some of the predatory practices of corporations toward their employees, and even though we've only scratched the surface so far--doctoring records in order to avoid paying workers for all the hours they worked; the threats, intimidation, even blackmail when workers try to unionize; the rising demand that we work part-time without pay, and so on (there's a lot more)--it's probably clear by now that too many employers can't be trusted either to be fair to their employees or to obey the law.

Well, in California they passed a law that allows employers to be sued by workers diectly for violations and mistreatment. At least in part, it seems the budget battle is hung up over this law.

By Marc Lifsher, LA Times Staff Writer


SACRAMENTO — As the struggle to pass a state spending plan drags on, legislative leaders are trying to negotiate changes to a new labor law that Gov. Arnold Schwarzenegger and business groups have linked to the budget battle.

The governor claims that the law, which the California Chamber of Commerce derisively calls the "sue your boss" statute, has unleashed a torrent of frivolous litigation over alleged labor code violations. At the recent shopping center rally where the governor called Democrats blocking his proposed budget "girlie men," he also denounced the law as a job killer that "chases businesses way from California."

The law allows private lawyers to sue employers for labor law violations. Proponents say it addresses a need for increased enforcement of the state's workplace regulations.

"Wage and hour disputes are serious allegations and, if proven, worthy of penalties being leveled against employers," said state Sen. Joe Dunn (D-Santa Ana), the law's author.

A survey of lawsuits filed since the law went into effect in January shows that many of the approximately 50 pending cases involve basic, lunch-bucket issues such as claims for back pay and overtime pay. One Los Angeles attorney has filed about 20 suits seeking back double-time pay for off-duty Los Angeles police officers who provided security on movie, video and commercial shoots.

"This legislation helps level the playing field," said Alan Harris, a Los Angeles lawyer who has used the law to sue a number of major movie studios and their payroll service contractors. "In Hollywood, we're dealing with multinational corporations that have limitless assets, and the employees have no one to stand up for them."

Dunn said he was willing to fine-tune the law but stressed he "won't even discuss a repeal or a de facto repeal."

This year, Dunn introduced a follow-up bill to ban suits for "technical violations" such as small print on posters. His bill, which passed the Senate and is currently before the Assembly Appropriations Committee, would authorize judges to reduce or eliminate awards that are arbitrary or unfair.

"I don't want to clog up the court system," he said.

Republicans, so far, have rejected Dunn's second bill. But that steadfast position may be beginning to ease. For the last two days, Dunn and Senate Minority Leader Dick Ackerman (R-Irvine) have been negotiating a possible middle ground that would be "reasonable for business" and still give workers protections for serious labor law violations, Ackerman said.

Schwarzenegger and his allies complain that the law, signed last year by then-Gov. Gray Davis, gives attorneys a license to sue deep-pocket companies for minor infractions of state labor regulations. As evidence, they point to a recent suit seeking six-figure damages from a company accused of using overly small type on posters listing workplace rules.

"It's ludicrous. The penalties simply don't fit the infractions," said Jeanne Cain, senior vice president of the California Chamber of Commerce, which is leading the repeal fight.

Backers of the labor law, mainly labor unions, contend that years of budget cuts have hamstrung the state labor commissioner's ability to protect workers' rights. They stress that 75% of civil penalties collected by successful lawsuits would go into state coffers to finance general programs and additional labor enforcement activities.

"Our state does not have the resources to put into labor law enforcement that we used to have," said Barry Broad, a lobbyist for the International Brotherhood of Teamsters.

I find the concept that business would be 'chased away' from CA by a requirement that they obey the law or face legal penalties in the form of lawsuits protecting workers' rights to be telling. They want a pass on the responsibilities eveyone else has to follow the law on the basis of paranoia over frivolous litigation that will likely not go anywhere. The example they cite hasn't even gotten to court yet, and if it's as silly as it sounds (it may not be) it could well be thrown out; many--in fact, most--such cases are. And the ones that aren't turn out to be a lot less frivolous than coporations and their allies try to make them seem.

You may remember the infamous case of the woman who sued McDonald's because their coffee was too hot. Conservatives and corporate lobbyists used--and are still using--that case as a prime example of the kind of 'frivolous lawsuit' from which business needs protection. Oh, really?

The manager of that McD franchise had been warned repeatedly by inspectors that the coffee his stores were serving was overheated to the point of causing potential physical damage either to a customer or employee. The wornings were ignored. For over a year. The woman who brought the suit was so badly burned she had to be hospitalized, and needed three skin-graft operations to repair the damage to her legs.

That's the nature of the 'frivolous' lawsuits they want protection from. If CA wants to take a step to protect workers' rights and well-being, this law is a definite step in the right direction. If they let blatant scare-tactics from corporations seeking to evade their responsibilities deter them, they should be ahamed of themselves.

CA Prison System in Receivership?

A San Francisco District Federal Judge is so unhappy with the bargain Ah-nud struck with the guards' union that he's threatening to take over the State Prison system altogether.

Henderson said the pact grants the union too much control over prison management and he suggested that Schwarzenegger was not serious about fixing the "systemic problems" in corrections "condoned for many years by the highest level of California officials."

Peter Siggins, Schwarzenegger's legal affairs secretary, said the administration was disappointed by the judge's strong words. "We think nothing that was done in connection with the negotiations … impairs or impedes our obligation or our ability to ensure that state employees meet the highest ethical standards."

He said Henderson's comments came as a surprise because the judge had complimented the administration's actions on July 7. "It seemed at the time that the court was very satisfied with the progress we were making," Siggins said.

In a reply sent to the judge Tuesday, Siggins said that the governor would be glad to meet with Henderson, but that it was not necessary to ensure that the governor was committed to improving the state's prisons.

Henderson's warning marked another chapter in a long-running dispute that began as a civil rights case involving Pelican Bay State Prison, on California's North Coast. Ruling on that suit in 1995, Henderson found that brutality by guards and poor medical care at the prison had violated the rights of inmates.

To ensure improvements, the judge appointed a special master to oversee progress. In January, the special master, John Hagar, issued a report saying that Pelican Bay and the entire prison system were infected by a "code of silence" that protects rogue guards, corrupts recruits and is condoned by top officials.

In that report and a subsequent one last month, Hagar pointed the finger at the powerful guards union, saying their labor contract with the state, negotiated by former Gov. Gray Davis, allowed them to interfere in disciplinary investigations. That interference, he said, has prevented the department from fairly and impartially punishing employees who did wrong.

Two senators who have led oversight hearings on corrections said the judge's firm warning should motivate the Legislature to reject the new labor agreement when it comes up for a vote, perhaps as early as today.

"It is puny, it is a policy swindle and I believe it goes backwards in our efforts to restore some sense of integrity to the system," said Sen. Jackie Speier (D-Hillsborough). "If we don't act, Judge Henderson is going to start running the Department of Corrections."

Sen. Gloria Romero (D-Los Angeles) agreed that the union pact was a bad deal, but said it "absolutely does not warrant a federal takeover."

"I think this threat is an overblown statement by the judge, and I'm disappointed," Romero said. "When he sits down with the governor, he will see there has been a pattern of progress in corrections."

Leaders of the guards union, known as the California Correctional Peace Officers Assn., bristled at the judge's characterization of their new labor pact, saying it represented a good-faith effort to help the state during tough fiscal times. By deferring the full raise that guards were to receive July 1, the deal saves the state $108 million over this fiscal year and next.

Lance Corcoran, the union's executive vice president, said if legislators rejected the deal and sought to block the raises in total, "some sort of job action" by guards would be likely.

The prison system is a cesspool and not just in CA. It's a shame to have to say this but prison guards are today what the cops were 50 years ago: primarily head-bangers--they can be brutal, even sadistic; they're not all that well-trained as a general rule; they're chosen for their ruthlessness and how tough they are, not how smart they are; and they're intimately involved with (and making a lot of untaxed money from) the sex rings, drug sales, weapons smuggling, and other illegal activities of the inmates. But since it's a job few smart people want to do, as being a cop was not a job most people wanted, those who will do it have a stranglehold on the system.

It's ironic that the same kind of people who used to get paid to break union strikes by force are now being protected from the law by one of the strongest unions in the country.

The law may have the last laugh yet.

(Thanks to eRobin of Fact-esque for the link)

Bush in His 20's

Former HBS Prof Blasts Bush
Business scholar says president was 'shallow,' 'flippant' in 1970s class

By SIMON W. VOZICK-LEVINSON
Crimson Staff Writer

As the race for the White House heats up and the nation’s left-leaning heads come together to unearth potential skeletons in President Bush’s closet, one line in his resume has avoided major scrutiny: the time Bush spent just across the Charles River, earning an MBA at the Harvard Business School (HBS) in the 1970s. Now, as some fervently question the commander-in-chief’s performance in the Texas National Guard decades ago and more current-minded politicos take aim at the events surrounding Sept. 11, 2001 and the invasion of Iraq, one former HBS professor is doing his best to publicize his recollections of what he calls a sarcastic, mediocre student who went on to lead the United States.

Yoshihiro Tsurumi, an avowed opponent of Bush’s current views and policies who was a visiting associate professor of international business at HBS between 1972 and 1976, said Bush was among 85 students he taught one year in a required first-year course. In the class on “Environment Analysis for Management,” incorporating elements of macroeconomics, industrial policy and international business, Tsurumi said students discussed and debated case studies for 90 minutes several times a week.

Tsurumi—now a professor of international business at Baruch College in the City University of New York—said he remembers the future president as scoring in the bottom 10 percent of students in the class.

Thirty years after teaching the class, Tsurumi said the twenty-something Bush’s statements and behavior—“always very shallow”—still stand out in his mind.

“Whenever [Bush] just bumped into me, he had some flippant statement to make,” said Tsurumi when reached at his home in Scarsdale, N.Y. “The comments he made were revealing of his prejudice.”

The White House did not reply to requests for comment on Bush’s time at HBS.

Tsurumi said he particularly recalls Bush’s right-wing extremism at the time, which he said was reflected in off-hand comments equating the New Deal of the 1930s with socialism and the corporation-regulating Securities and Exchange Commission with “an enemy of capitalism.”

“I vividly remember that he made a comment saying that people are poor because they’re lazy,” Tsurumi said.

Tsurumi also said Bush displayed a sense of arrogance about his prominent family, including his father, former U.S. President George H.W. Bush.

“[George W. Bush] didn’t stand out as the most promising student, but...he made it sure we understood how well he was connected,” Tsurumi said. “He wasn’t bashful about how he was being pushed upward by Dad’s connections.”

Tsurumi said that the younger Bush boasted that his father’s political string-pulling had gotten him to the top of the waiting list for the Texas National Guard instead of serving in Vietnam. When other students were frantically scrambling for summer jobs, Tsurumi said, Bush explained that he was planning instead for a visit to his father in Beijing, where the senior Bush was serving at the time as the special U.S. envoy to China.

In addition, Tsurumi is still sore about what he recalls as Bush’s slight to his cinematic taste. When he arranged for students to view the film of John Steinbeck’s The Grapes of Wrath during their study of the Great Depression, Tsurumi said, Bush derided the film as “corny.”

At the time, Tsurumi said his worries about his student extended no further than the boardroom.

“All Harvard Business School students want to become president of a company one day,” Tsurumi said. “I remember saying, if you become president of a company some day, may God help your customers and employees.”

Hasn't changed much, has he?

(Thanks to Phaedrus for the link)

The Silent Epidemic

By HEATH FOSTER
SEATTLE POST-INTELLIGENCER REPORTER

Angelito Haney was just over a year old when his teeth started to fall apart. Chips of the curly-haired toddler's baby teeth would come out if he bit down on a plastic toy.

The SeaTac boy's pediatrician gave his mother the card of a local dentist. But when Tammy Haney called to make an appointment, she was told the dentist wouldn't accept her son's Medicaid coverage.

These days, only one in three practicing dentists in the state accept the low-paying government insurance for poor families. But it's not just the poor who have trouble obtaining care.

More than three times as many Americans lack dental insurance as lack health insurance. About 3.1 million people in Washington -- half the state's population -- have no dental insurance or rely on Medicaid. For them, care has become a luxury afforded only after the rent has been paid and food put on the table -- and often only when tooth pain becomes unbearable.

The U.S. surgeon general has called this growing lack of dental access a national "silent epidemic."

Angelito's mother lost her family's insurance when she was laid off from her $15-an-hour job in the accounts-payable department of a large painting company. She had no savings to pay for a private dentist.

When she finally got her son to the non-profit Odessa Brown Dental Clinic in Seattle a year later, the damage was done. The painful toothaches keeping Angelito awake at night had come from dying nerves and an abscess in the bone threatening the development of his permanent teeth.

After a six-month wait, a surgical team at Children's Hospital and Regional Medical Center sealed, capped and filled as many of his teeth as they could. They had no choice but to send the talkative boy home earlier this month without any front teeth.

In recent years, surgery to repair badly decayed teeth has become one of the top 10 procedures to fill Children's operating suites. Pausing after pulling the last of six unsalvageable teeth, pediatric dentist Barbara Sheller remarked, "It's heartbreaking to face the same difficulties in family after family. This is a really complex way to manage dental disease. If kids were getting routine dental care, we could avoid this."

Disparities in Washington

About 40 percent of people under age 65 and 77 percent of seniors in the state are making do without dental insurance, according to estimates by the Washington Dental Service Foundation.

The only insurance that guarantees quick access to care is the increasingly expensive private kind. In 2002, just a third of the 1.1 million low-income people in Washington eligible for Medicaid-covered dental care actually saw a dentist, according to state data.

Meanwhile, those who do have the private insurance accepted by mainstream dentists are sometimes getting more treatment than they need, experts say. Tooth-whitening, a $600-million-a-year industry, has become the fastest growing segment of dentists' practice, according to a 2002 American Dental Association survey.

"We have one group of people that is way over-seen, and another that is not being seen at all," said Dr. Peter Milgrom, director of the University of Washington's Northwest and Alaska Center to Reduce Dental Disparities.

A common rule of thumb in the dental world is that 80 percent of cavities are found in 20 percent of the patients -- people who tend to be poor, elderly and members of immigrant and minority groups.

This isn't a joke. Dental work isn't on anybody's radar screen, yet it affects the poor in ways it affects no other class of people. A couple of months ago, just about the time I started FTT, I developed gum problems that required pulling a lot of teeth. I managed to pay for the surgery but the continuing treatment I need to stop the gum disease is beyond my means, as is paying for a dental plate. The pain in my jaw is constant, talking is difficult--between the loss of teeth and the shooting pains that come whenever I try to move my jaw to form words, I am almost unintelligible when I try to talk--and eating almost impossible; I've had to give up eating a lot of vegetables simply because I can't chew them. Except for hamburger, meat is out of the question. Nutritionally, my diet has gone to hell.

And I have health insurance--one of the main reasons I hang onto the job I have. In fact, until recently when my employer switched carriers, I had probably one of the best health insurance plans available in the state, and even it didn't cover dental work.

There's a perception that dental health is somehow a 'luxury'. Not for the poor, it isn't. We are judged more harshly by our appearance than most, and teeth are a big part of that. I grew up with a kid who'd had to have his teeth removed and replaced by a dental plate before he was 12. He was ostracized by other kids, seen as retarded by the school administration even though he was quite bright, and in general placed on a path that would ensure he never rose above his 'natural place'.

Bad teeth affect our diets, our acceptance by society, and our ability to get jobs. Annie LaMott once wrote that of all the fears her neurotic mother suffered from, the fear of 'people with rotten teeth--or worse, no teeth' was the worst. 'She felt there was something predatory about them. Mothers don't like it when people without teeth look at their children.'

It's something we suffer in silence and nobody else is talking about it, either. Dental insurance exists but it's prohibitively expensive even though most dental procedures are a lot cheaper than your standard medical procedure; health insurance will pay thousands of dollars for a tonsillectomy but refuse to pay a few hundred for a root canal. I don't, in all honesty, know why.

Maybe it's because only the poor need help paying for such things.

Racism in Employment

An Emerging Catastrophe
By BOB HERBERT

Published: NYT, July 19, 2004

Drive through some of the black neighborhoods in cities and towns across America and you will see the evidence of an emerging catastrophe — levels of male joblessness that mock the very idea of stable, viable communities.

This slow death of the hopes, pride and well-being of huge numbers of African-Americans is going unnoticed by most other Americans and by political leaders of both parties.

A new study of black male employment trends has come up with the following extremely depressing finding: "By 2002, one of every four black men in the U.S. was idle all year long. This idleness rate was twice as high as that of white and Hispanic males."

It's possible the rate of idleness is even higher, said the lead author of the study, Andrew Sum, who is director of the Center for Labor Market Studies at Northeastern University in Boston.

"That was a conservative count," he said. The study did not consider homeless men or those in jail or prison. It is believed that up to 10 percent of the black male population under age 40 is incarcerated.

While some of the men not working undoubtedly were ill or disabled, the 25 percent figure is still staggeringly high. And for some segments of the black male population, the situation is even worse.

Among black male dropouts, for example, 44 percent were idle year-round, as were nearly 42 of every 100 black men aged 55 to 64.

"I was surprised by the magnitude of the population that was idle all year-round," said Professor Sum. "Typically, some groups will find work part of the year, but not the other part, and you end up with a high joblessness rate. But here we've got a growing number of men just not working at all."

Black men, already in an employment crisis, were hit particularly hard by the last recession and have not done well in the fitful recovery that followed. Jobless rates for some subgroups, black teenagers for example, have been all but off the charts.

Professor Sum and his colleagues got closer than official statistics usually get to the dismal employment reality of black men by using the so-called employment-population ratio, which represents the percentage of a given population that is employed at a given time. The government's official unemployment statistics are often misleading, particularly because people who have stopped looking for work are not counted.

Things fall apart when 25 percent of the male population is jobless. (This does not even begin to address the very serious problems of underemployment, such as part-time or temporary jobs, and extremely low-wage work.) Men in a permanent state of joblessness are in no position to take on the roles of husband and father. Marriage? Forget about it. Child support? Ditto.

For the most part, jobless men are not viewed as marriageable material by women. And they are hardly role models for young people.

Those who remain jobless for a substantial period of time run the risk of becoming permanently unemployable.

This is a tragic situation for the men and their families and a serious problem for society at large. Such a huge all-but-permanently-unemployed population is an obstacle to efforts to achieve full employment and its accompanying benefits. These men are not contributing to tax revenues and they are consuming public and social services. And some, inevitably, are engaged in criminal and other anti-social behavior.

Figuring out ways to get this population gainfully employed would turn a net societal deficit into a real benefit.

Finally, it's just wrong to allow so many Americans to remain in a state of social and economic degradation without attempting to alter the conditions responsible for their suffering.

Education is one of the keys here. As Professor Sum found, 44 percent of black men with no high school diploma were idle year-round versus 26 percent of those with a diploma, and 13 percent of those with a bachelor's (or higher) degree.

The distance from the idleness of the street corner to the warmth of a thriving family is not really that far, especially when a helping hand is offered. But we'll never offer the helping hand if we fail to recognize that there's a problem.

Wages Fall Again

By EDUARDO PORTER

Published: NYT, July 18, 2004

The amount of money workers receive in their paychecks is failing to keep up with inflation. Though wages should recover if businesses continue to hire, three years of job losses have left a large worker surplus.

"There's too much slack in the labor market to generate any pressure on wage growth,'' said Jared Bernstein, an economist at the Economic Policy Institute, a liberal research institution based in Washington. "We are going to need a much lower unemployment rate.'' He noted that at 5.6 percent, the national unemployment rate is still back at the same level as at the end of the recession in November 2001.

---

On Friday, the Bureau of Labor Statistics reported that hourly earnings of production workers - nonmanagement workers ranging from nurses and teachers to hamburger flippers and assembly-line workers - fell 1.1 percent in June, after accounting for inflation. The June drop, the steepest decline since the depths of recession in mid-1991, came after a 0.8 percent fall in real hourly earnings in May.

Coming on top of a 12-minute drop in the average workweek, the decline in the hourly rate last month cut deeply into workers' pay. In June, production workers took home $525.84 a week, on average. After accounting for inflation, this is about $8 less than they were pocketing last January, and is the lowest level of weekly pay since October 2001.

This is a contradictory, confusing, and in some spots flat-out inaccurate story. For instance, this:

...the economy has been adding hundreds of thousands of jobs almost every month this year...

Hardly. January, February and March barely broke 100,000; April was a measly 26,000. It's true that May produced over 300,000 new jobs but that fell precipitately in June. It has been a roller-coaster year during which we have gained some 1,500,000 jobs give-or-take but lost 3/5 of that number to outsourcing and globalization. Not exactly a stellar record. Then this--

[S]tagnant wages could put a dent in the prospects for economic growth, some economists say. If incomes continue to lag behind the increase in prices, it may hinder the ability of ordinary workers to spend money at a healthy clip, undermining one of the pillars of the expansion so far.

--is followed by this:

On its own, the decline in workers' wages is unlikely to derail the recovery. Though they account for some 80 percent of the work force, they contribute much less to spending. Mark M. Zandi, chief economist at Economy.com, a research firm, noted that households in the bottom half of income distribution account for only one-third of consumer spending.

So are we a 'pillar' or are we irrelevant?

Zandi's formulation is particularly disturbing, first because it suggests that the working middle-class has been all but destroyed as an economic force by insanely low wages (many of us are making less now, in straight dollars unadjusted for inflation, than we were 20 years ago), and second because this is a vicious circle that feeds on itself: why should politicians worry about the effect of the economy on us if we contribute so little? And if they don't worry about us and pander to the rich, what hope is there to keep America from sliding even more deeply into a country sharply divided between a tiny minority of haves and a huge majority of have-nots with the political power firmly in the grasp of the haves? That's not a democracy, it's a plutocracy; the thing we used to pride ourselves on not being is what we're becoming, and it doesn't seem to bother us.

[C]oming after the bonanza of the second half of the 1990's, the first period of sustained real wage growth since the 1970's, the current slide in earnings is a big blow for the lower middle class. Moreover, the absence of lower income households could also weigh on overall economic growth - putting a lid on the mass market and skewing consumption toward high-end products.

"There's a bit of a dichotomy," said Ethan S. Harris, chief economist at Lehman Brothers. "Joe Six-Pack is under a lot of pressure. He got a lousy raise; he's paying more for gasoline and milk. He's not doing that great. But proprietors' income is up. Profits are up. Home values are up. Middle-income and upper-income people are looking pretty good."

Tales of tight budgets at the bottom are springing up across the country. "I haven't had a salary increase in two years, but the cost of living is going up," said Eric Lambert, 42, a father of three who earns $13 an hour as a security guard at 660 Madison Ave. in Manhattan.

Silvia Vides, 43, who earns $11 an hour in a union job as a housekeeper at the Universal City Sheraton hotel in Los Angeles, said, "Sometimes I don't know how I pay the bills and food and rent." She has cut back on all nonessential expenditures and she is four months behind on payments on $4,000 in credit-card debt.

These 'tales' aren't 'springing up'; they've been here all along. Since Reagan and Stockman instituted trickle-down in the 80's and continuing as Clinton and the DLC began their romance of the business community, the divide between the classes has grown much more sharply. Mr Porter may not have been paying attention but all during the 90's social scientists and economists were pointing out that Clintin's boom had had almost no effect on real wages and that the haves were gaining enormous wealth while the have-nots were stagnant or declining. Far from being a new story, this has been going on for a quarter-century and getting worse every year.

But I suppose I should figure it's nice of Mr Porter to have noticed. At last.

How Democrats Lost the Working Class

By Thomas Frank (Thomas Frank is editor of the Baffler magazine and author of "What's the Matter With Kansas?" This article was adapted from that book by arrangement with Metropolitan Books, an imprint of Henry Holt and Co)


WASHINGTON — That our politics have been shifting rightward for more than 30 years is a generally acknowledged fact of American life. That this movement has largely been brought about by working-class voters whose lives have been materially worsened by the conservative policies they have supported is less commented upon.

And yet the trend is apparent, from the "hard hats" of the 1960s to the "Reagan Democrats" of the 1980s to today's mad-as-hell "red states." You can see the paradox firsthand on nearly any Main Street in Middle America, where "going out of business" signs stand side by side with placards supporting George W. Bush.

I chose to observe the phenomenon by going back to my home state of Kansas, a place that has been particularly ill served by the conservative policies of privatization, deregulation and deunionization — and that has reacted to its worsening situation by becoming more conservative still. Indeed, Kansas is today the site of a ferocious struggle within the Republican Party, a fight pitting affluent moderate Republicans against conservatives from working-class districts and down-market churches. And it's hard not to feel some affection for the conservative faction, even as I deplore its political views. After all, these are the people that liberalism is supposed to speak to: the hard-luck farmers, the bitter factory workers, the outsiders, the disenfranchised, the disreputable.

Although Kansas voters have chosen self-destructive policies, it is clear that liberalism deserves a large part of the blame for the backlash phenomenon. Liberalism may not be the monstrous, all-powerful conspiracy that conservatives make it out to be, but its failings are clear nonetheless. Somewhere in the last four decades liberalism ceased to be relevant to huge portions of its traditional constituency, and liberalism just as surely lost places like Wichita and Shawnee as much as conservatism won them over.

This is due partly, I think, to the Democratic Party's more-or-less official response to its waning fortunes. The Democratic Leadership Council, the organization that produced such figures as Bill Clinton, Al Gore, Joe Lieberman and Terry McAuliffe, has long been pushing the party to forget blue-collar voters and concentrate instead on recruiting affluent, white-collar professionals who are liberal on social issues. The larger interests that the DLC wants desperately to court are corporations, capable of generating campaign contributions far outweighing anything raised by organized labor. The way to collect the votes and — more important — the money of these coveted constituencies, "New Democrats" think, is to stand rock-solid on, say, the pro-choice position while making endless concessions on economic issues, on welfare, NAFTA, Social Security, labor law, privatization, deregulation and the rest of it.

Such Democrats explicitly rule out what they deride as "class warfare" and take great pains to emphasize their friendliness to business interests. Like the conservatives, they take economic issues off the table. As for the working-class voters who were until recently the party's very backbone, the DLC figures they will have nowhere else to go; Democrats will always be marginally better on bread-and-butter economic issues than Republicans. Besides, what politician in this success-worshiping country really wants to be the voice of poor people? Where's the soft money in that?

Read the rest. Please. Just click the title.

Prison Labor Program in Shambles

By Tim Reiterman and Jenifer Warren, LA Times Staff Writers

SACRAMENTO — Fourteen years ago, California voters put convicts to work for private companies behind prison walls. Businesses were granted cheap rent and other perks, while inmate workers earned real-world wages and shared them with victims.

Created by a statewide ballot measure, the program took off and became a national model. Its director traveled the country, touting her winning formula, and graduates of the program seldom returned to prison.

But now, as Gov. Arnold Schwarzenegger seeks to better prepare inmates for release, the joint venture program is a shambles.

Once dubbed the future of corrections and expected to employ thousands of felons throughout the state, the program has withered to less than half its size several years ago. Today, with fewer than 150 of California's 163,000 prisoners taking part, it is dwarfed by similar ventures in much smaller states.

The program's decline, said state Sen. Jackie Speier (D-Hillsborough), represents a squandered opportunity to slow the tide of repeat offenders crowding state prisons at an ever-rising cost.

"Without skills, without jobs, you'll see these people end up right back in prison," said Speier, who has held hearings on the troubled correctional system. "This is the kind of program that we should be expanding."

California Department of Corrections officials blame the program's woes on a slowing economy, a dearth of industrial space on prison grounds and competition from more business-friendly states, especially those with lower minimum wages.

It's startling, even for a cynic like me, to think that there are corporations in America who think prison labor is too expensive, and even more startling to think that they would make a decision about where to put their company's resources based opn whether a state's minimum wage is $5.15 or $5.20 /hr.

'If it's $5.15, we build our factory in your state. But if it's an outrageous $5.20, we go to Mississippi!'

If that's really how they think, it's bizarre.

California's is one of three dozen federally sanctioned prison joint venture programs run by states. Businesses get an abundant workforce, low rents and other incentives. Inmates with good disciplinary records receive the prevailing wage, far more than the nine cents an hour for most prison jobs.

Society, meanwhile, benefits because most earnings — up to 80% — go to support inmate families, compensate crime victims, pay taxes and reimburse the state for incarceration costs. Joint ventures also help keep jobs from flowing offshore.

Voters approved the program in 1990 over opposition from the California Labor Federation, AFL-CIO, which condemned it as unfair to "free labor and free business." The joint venture program grew within eight years to involve 15 companies and several hundred inmates. Optimistic leaders hoped to have at least one venture in every prison.

Today, however, there are ventures at only six of the 32 state lockups. Budget cuts have reduced the staff to one full-time position and a consultant. Marketing has virtually ceased. The few convicts lucky enough to land a spot are packaging laboratory supplies, raising alfalfa and making computer circuit boards, display racks and brewery tanks.

What happened? One story is particularly instructive concerning both the kinds of promises the state made and the underhanded tactics one corporation involved tried to use to take advantage of the situation.

Operating inside San Diego's J.R. Donovan State Prison, the T-shirt factory was growing into a multimillion-dollar enterprise that newspapers would portray as a success story. Then trouble struck.

One of the sweeteners in owner Pierre Sleiman's state contract was that inmate trainees could work for free so long as they were not producing items for sale. However, the state labor commissioner ruled otherwise.

'Not producing items for sale' is an...interesting phrase for inclusion in a labor contract. How would it be defined? If you're packing items and shipping them, then you're not technically 'producing them'. Does that mean the state promised Sleiman an unpaid workforce for every area of his business not directly involved in actually making the garments? Why would it even be included? Maybe because of this:

Then a local television station aired allegations by two inmates that they were required to sew "Made in U.S.A." labels in shirts from Honduras. The inmates were placed in solitary confinement, accused of sabotaging the venture.

Aha. Now the reason begins to come into focus. Sleiman was ripping off the state for free prison labor in order to defraud consumers by mislabeling a product he purchased overseas as 'Made in the USA'. If those shirts were 'produced' in Honduras, then Sleiman's prison labor deal could have meant that he wasn't paying any of the inmates he employed in CA, both sleezy tricks that he couldn't have gotten away with--or even tried--if he were employing union laborers.

The Bottom Line trumps every other consideration: health, honesty, even--and maybe especially, in Sleiman's case--the law. Having been caught with his hand in the cash drawer, Sleiman is now suing the state for the damage to his fingers when the drawer got shut.

Though the allegations of phony labeling and sabotage were not proven, the episode led the inmates and the textile workers union to sue the company and the state. The suit alleged retaliation against the two inmates, and failure to pay prevailing wages and to compensate trainees as required.

On the first day of trial in 2002, San Diego County Superior Court Judge William C. Pate ruled that CMT Blues owed more than $840,000 in back wages and penalties, plus attorney fees of $500,000.

The first day? The evidence must have been overwhelming.

After he shut down operations, Sleiman filed for arbitration, claiming that the state's misrepresentations and negligence cost him his business and at least $7 million. State officials deny the allegations.

Sleiman's attorney, Robert Shipley, said his client figured that having the state as a partner would spare him from labor grief.

Yeah, the 'grief' of having to pay them.

I should add that if you read the article there are a couple of good examples of companies that do NOT appear to have taken advantage of the program, and kudos should go to them. They're providing a service potentially valuable to society while also making a reasonable profit, so Hats Off, Ladies and Gentlemen!

But the total failure of the program suggests that they were in the minority; when the corporations who began in the program under the impression that it would provide them with a lot of goodies, including ultra-cheap labor, discovered that it wouldn't, they pulled out. When it became difficult to keep companies in the program without giving away the state store, the program administrators gave up bothering with it.

It's a sad end to a promising story, but given corporate priorities in today's culture of unbridled greed and their wholesale rejection of any social value that hurts their profits in any way, I'm not sure it could have ended any differently.

Court Rejects DOT Rules for Truckers

The US Court of Appeals yesterday overwhelmingly rejected The Department of Transportation's new rules allowing companies to demand more road-time from their drivers.

WASHINGTON (Reuters) - A federal appeals court on Friday threw out new U.S. government regulations allowing commercial truck drivers to spend more time on the road without taking a break.

The U.S. Court of Appeals for the District of Columbia found the first major rewrite of the hours of service rule in more than 60 years was "arbitrary and capricious" because the Transportation Department failed to consider driver health.

SOP for the Bush Administration. For them, sacrificing employees' health to boost corporate profits is a no-brainer.

"Its failure to do so, standing alone, requires us to vacate the entire rule," the three-judge panel said in unanimously ordering the Transportation Department to rewrite the regulation.

"It means back to the drawing board," said Bonnie Robin-Vergeer, the lead attorney for Public Citizen in the legal challenge by consumer and safety groups. "We got what we asked for."

The court also questioned whether key provisions, like driving time and rest guidelines, would pass legal muster.

The rule took shape slowly and was one of the most sweeping and most anticipated regulatory actions undertaken by the Transportation Department in years. But critics complained the Bush administration weakened key aspects, including minimum rest periods, when it was approved in April 2003.

Likewise the Orwellian rationale for the rule.

But regulators stood by the initiative that took effect in January. "We believe it is an important safety tool, but we'll have to look further into the court's decision to see where we go from here," Transportation Department spokesman Robert Johnson said.

The government has 45 days to weigh any legal challenge of its own. During that time, the new rule remains in effect.

The new rule cut two hours off a trucker's allowable work day, including unloading and breaks, to 14 hours but permitted drivers to be on the road for 11 consecutive hours, up one hour. It also permitted truckers to work up to 77 hours in seven days, or 88 hours in eight days - a more than 25 percent increase over the old rule.

It was aimed at increasing productivity and reducing fatigue, which can cause accidents. Regulators estimated the rule would save up to 75 lives and prevent up to 1,300 fatigue-related crashes annually.

Regulators--ex-lobbyists from the trucking industry--are nuts. See below.

Deaths in large truck crashes, most involving other vehicles, were virtually unchanged in 2003 at 3,849, according to U.S. safety statistics. Truck drivers and their passengers accounted for roughly 20 percent of those fatalities.

Consumer, labor and safety groups argued that extending allowable driving time, even though a driver's overall day was shorter, would not improve safety.

"The more you work these drivers with longer hours, (the more) it increases the risk," said Gerald Donaldson, senior research director at Washington-based Advocates for Highway and Auto Safety. "If a trucker loses control on the highway it's like a giant bowling ball taking out everything in its path."

NPR reported last night that the single most decisive factor in fatigue-related accidents involving truckers was the number of consecutive hours they had been on the road: more than eight and accidents increased by some 10%, but nearly 2/3 of such accidents took place when drivers had been on the road more than 10 hours, which is why the original rule used that cut-off. It's a mite baffling how the DOT can justify an 11-hr shift in the face of those numbers. And, in fact, they didn't try, relying instead on the old Bush Administration stand-by: bald assertion backed up by zero evidence and spun into its opposite; this wasn't about 'safety'.

A trucker at work who just moved back to New England from North Carolina where he was working for JB Hunt, one of the largest trucking firms in the country, told me last night that Hunt--which is proud of its safety record--had ignored the rule change and maintained the old standard because it believed that in the long run the new rules were counter-productive and would lead to more accidents rather than fewer.

NPR also reported in a separate piece that Hunt and several other big trucking firms were booming and were having problems finding enough truckers to fill their contracts. Hunt may have decided that prudence was more important than profits but I think it's fair to conclude that the pressure for the DOT rule change was most likely coming from trucking industry lobbyists communicating this difficulty to their donees. The Bush Administration, rather than do something creative and positive like proposing a financial aid program for people who want to attend trucker training schools but can't afford the tuition (around $5K for most schools), promptly used the rule change to allow trucking companies to push their employees harder in the name of 'efficiency' instead.

It would seem the Bush Administration deliberately rejected a golden opportunity to help create new jobs in an area of the economy that's actually growing in order to once again opt for a more oppressive and dangerous option that would be less expensive, though marginally, for trucking corporations. If there was any doubt whose side they're on, this pretty much erases it.

Note: If what that trucker told me is true, then major kudos go to JB Hunt for refusing to endanger their drivers for the sake of a few dollars extra in profits even though the Bush Administration told them they could. And bear in mind, this is yet another extremely profitable and stable company that isn't cutting corners on safety because 'it's too expensive'. You rock, guys.

(Thanks to Island Dave for the tip.)

NLRB Nixes Unions for Graduate Students

By STEVEN GREENHOUSE and KAREN W. ARENSON

Published: NYT, July 16, 2004

The fast-growing movement to unionize graduate students at the nation's private universities suffered a crushing setback yesterday when the National Labor Relations Board reversed itself and ruled that students who worked as research and teaching assistants did not have the right to unionize.

In a case involving Brown University, the labor board ruled 3 to 2 that graduate teaching and research assistants were essentially students, not workers, and thus should not have the right to unionize to negotiate over wages, benefits and other conditions of employment.

The Republican-controlled board reversed a four-year-old decision involving New York University, a private institution, in which the board, then controlled by Democrats, concluded that graduate teaching and research assistants should be able to unionize because their increased responsibilities had essentially turned them into workers.

As a result of the 2000 N.Y.U. ruling, students there formed the first graduate employees' union at a private university in the nation. (Graduate student workers at public universities are governed by state labor laws rather than federal law, and many states have given them the right to unionize.)

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"The previous decision in the N.Y.U. case overturned over 30 years of determinations by the National Labor Relations Board on whether graduate students who worked as teaching and research assistants were students or employees," Mr. Steinbach said. "And it threatened the traditional relationship between colleges and their graduate student assistants."

But Edward J. McElroy, the secretary-treasurer of the American Federation of Teachers, who is set to be elected the union's president today, called the decision "outrageous."

"These people obviously are workers," Mr. McElroy said. "If members of the N.L.R.B. can't recognize a worker when they see one, they shouldn't be on a national labor board."

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[T]he board stated that "there is a significant risk, even a strong likelihood, that the collective-bargaining process will be detrimental to the educational process."

Philip Wheeler, the U.A.W.'s director for New York and New England, derided the labor board's logic.

"I understand that they say it would be too disruptive to the great American education system," Mr. Wheeler said. "Once upon a time, they said that unionizing would be too disruptive for American manufacturing. They were wrong then, and they are wrong now."

There is more at stake here than whether or not graduate students--who have been given more and more responsibilities over the years, including teaching classes, grading exams, acting as advisors to junior students, and doing all a professor's clerical chores (40 hr weeks are no longer uncommon)--will be paid a decent wage for their efforts. What this is really about is the threat posed by a generation of bright young men and women convinced that unions are a good, perhaps necessary, mechanism for restraining the power of employers to dictate terms, and then taking that conviction out into the world with them where it could (Horrors!) spread.

The grad student unions were an important first step in reminding a generation that has been trained to think of unions as evil, corrupt, and unnecessary that they are no such thing; that they are in fact a key element of any stable working relationship, and that without them to protect your rights you are often no less than chattel to be used and abused by a power structure that takes you for granted and pays you starvation wages to boot.

The movement was spreading and it had to be stopped. The NLRB took the first step by overturning a decision that said that private universities--the Pubs' favorite kind--had to adhere to the same rules as public colleges for the hoi-polloi but one doubts that the decision outlawing unions there as well can be far behind. A Republican NLRB is going to back the employers, period. They always have, they always will.

Most State Governments Shipping Jobs Overseas

Union study finds that contracting tax-funded work to India and other low-wage nations is proliferating despite legislatures' efforts.

By Warren Vieth, LA Times Staff Writer


WASHINGTON — More than 40 state governments have contracted with companies in India and other low-wage countries to help administer new food-stamp and other taxpayer-funded programs, according to a study released Wednesday by a technology workers union.

The practice by state agencies of sending work overseas has proliferated despite efforts in many legislatures to impose restrictions on doing so, the study said, and foreign firms are becoming more aggressive in their efforts to win government contracts.

"Taxpayers clearly aren't informed," said Marcus Courtney, president of the Washington Alliance of Technology Workers, or WashTech, in Seattle. "Citizens don't necessarily know that their tax dollars are being spent overseas. This is being done quietly and secretly. Oftentimes, the state governments don't even know that this is going on."

In California, at least 11 companies specializing in "offshore" contracting are on the list of state government vendors, according to research commissioned by WashTech, an affiliate of the Communications Workers of America.

One Indian firm, R Systems Inc., has done more than $3 million in computer programming for state agencies, the study said. In addition, California is one of 42 states using overseas call centers to dispense information about a new debit card program that has replaced food stamps throughout the country.

The report's authors acknowledged that they were able to document only a portion of state government work performed overseas, and could not provide a reliable estimate of the total dollar volume of such contracting. Some states refused to disclose contact data, some lacked centralized vendor information, and some were not certain whether work was being done in the U.S. or overseas.

Nevertheless, they said the study represents one of the first efforts to quantify a practice that may have contributed to the loss of U.S. jobs, and it could increase pressure on politicians to impose restrictions. Legislation has been introduced in 36 states, including California, to limit the transfer of jobs overseas, show preference to domestic firms or increase disclosure of foreign contracting.

"A lot of people feel there is something wrong about using taxpayer dollars to create jobs offshore when there are people in this country that are without jobs," said Philip Mattera, the report's principal author. "That's a policy issue."

HUD Refuses to Disperse Allocated Housing Assistance Funds

The Center on Budget and Policy Priorities reports that Housing and Urban Development Secretary Alfonso Jackson is instituting policies that will effectively cut the Housing Assistance funds Congress has already allocated by simply preventing agencies from dispersing them.

HUD’s new fiscal year 2004 funding policy (which is distinct from an Administration budget proposal to cut voucher funding sharply in fiscal year 2005 and to convert the program to a block grant) is compelling state and local housing agencies to institute cuts in assistance that will cause significant hardship among low-income families. The actions that Secretary Jackson announced on May 20 — correcting an error in the method that HUD initially used to calculate funding levels for some agencies and providing added funds for reserve accounts that agencies can use to cover shortfalls — reduced the magnitude of the required reductions, but has not eliminated the need for harsh cuts in some areas.

For example, some agencies are raising rent burdens on low-income families that receive vouchers by reducing the maximum amount of rent a voucher can cover. Other agencies are reducing the number of families assisted, by rescinding vouchers provided to families that are searching for housing but have not yet found a unit to rent with their voucher, and by “shelving” vouchers that become available when current voucher holders leave the program (rather than reissuing the vouchers to needy families on waiting lists as is the normal practice). For some agencies, the shortfalls created by the new HUD policy are so severe that the agencies may have no alternative but to terminate assistance to some low-income families that currently rely on vouchers to help pay the rent.

Under the fiscal year 2004 appropriations law enacted in January, HUD could have taken — and still can take — stronger steps that would largely avert housing assistance cuts. HUD has acknowledged that it has $190 million in funds that could be used to cover shortfalls under its new policy, but has failed to institute measures to distribute these funds to many of the housing agencies that otherwise will be forced to reduce assistance to needy families.

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Under the new system, HUD will limit the average amount of funding that a state or local agency receives for each voucher in use to the agency’s average cost per-voucher in May-July 2003, plus an adjustment for rent inflation that has occurred since that time in the agency’s region of the country, as determined in accordance with a rent inflation formula HUD has devised.

Voucher costs at many housing agencies have risen since July 2003 at a faster or slower rate than the regional rent inflation factor that the HUD formula uses (which is often based on inflation in a region encompassing several states), and generally have done so for legitimate reasons. If an agency’s average voucher costs have risen faster than HUD’s rent inflation factor, however, the agency will not receive sufficient funds to pay landlords for all vouchers now in use. In such cases, housing agencies will be able to receive additional funds to address the shortfalls the new HUD policy creates only if they are successful in an appeal to HUD for a larger cost adjustment. Based on the information that HUD has provided about the timeline of the appeals process and the permitted grounds for appeal, it appears unlikely that this process will provide adequate or timely relief to local agencies that will be underfunded as a result of HUD’s new policy.

Some agencies have access to “program reserve” funds that can be used to make up for a shortfall in HUD funding. But despite the distribution of $152 million in additional reserve funds to local agencies, announced by Secretary Jackson on May 20, HUD has fallen short of providing many agencies with reserve funding that brings the reserves to their traditional levels. As a result, many agencies’ reserves are too small to make up for the under-funding that is resulting from HUD’s new policy. Furthermore, as discussed below, other measures that HUD has instituted may deter even agencies that have adequate reserves from using those reserves to cover the gap between their actual voucher costs and the funding levels they are now receiving from HUD; such agencies may thus feel compelled to institute cuts anyway.[1]

The adverse effects of the new HUD policy are intensified by the late date on which the policy was announced. The delay in announcing the policy reduced the amount of time available to housing agencies to plan for and respond to it, and is forcing agencies to impose deeper cuts than otherwise would have been necessary to adapt to the reduced levels of funding. While some housing agencies received advance information, most were not informed by HUD about the policy until the April 22 notice was released more than three months after Congress passed the fiscal year 2004 appropriations legislation. Moreover, agencies were not told the specific amount of funding they would receive (which could not be calculated from the information in the April 22 notice) until the third week in May, and some important details of the policy remain unclear even now.

Section 8 funds have been under attack by conservatives for 20 years, and the tricks the CBPP is describing are the same ones Stockman used in the 80's to starve all kinds of welfare and poverty programs. It works like this: when an agency like HUD doesn't disperse all its money, that money has to go back to the Congress at the end of the fiscal year. The returned money will then be used by influential think-tanks like the Heritage Foundation or the American Enterprise Institute to 'prove' in carefully crafted and entirely bogus reports that Section 8 is over-funded. Those influential reports will then be used by conservative Congressman to justify further cuts in HUD's Section 8 Housing Assistance--"They didn't use what we gave them last year! Why should we give them more this year?"--but more importantly they will help to lay the groundwork for the claim that the housing crisis has been overblown and that Federal funds aren't needed to help people cope with it--an argument that will result in...more budget cuts, of course.

It's also a way for politicians to have it both ways: they can say--correctly--that they voted for housing assistance for the poor and when the money isn't spent, they can call themselves 'budget-cutters'. Whenever a politician says s/he voted for poverty programs, the next question should always be: "Did they disburse the money?"

In this case, Jackson's 'policy' tricks are setting up the next revision: the Bush Administration wants Section 8 turned into a block grant--another recycled Reagan-era budget manipulation. Block grants are fixed sums paid to states for various programs. The amount of a block grant is determined by formulas that are heavily skewed toward cutting the allocation using every possible excuse, no matter how unrealistic or far-fetched. They're generally cut 10-20% simply on the assumption that states are 'more efficient' than the 'wasteful' Federal government and therefore need less money to provide the same level of services. It gets worse from there. For instance, in the 80's Massachusetts' pre-school block grant was reduced by almost half in one year when the formula was changed fom an 'area determination'--a formula that looked at whole regions to determine need--to a 'local determination'--a formula that looked only at regional centers.

The reality on the ground was that waiting lists were longer, we were getting more kids with severe emotional and physical disabilities who needed special help, and a state budget crisis caused by the passage of Proposition 2 1/2--an anti-tax law that capped the amount of money the state could raise in taxes to 2 1/2% over the previous year, not even enough to cover inflation at the time--had already caused budget cuts so severe that many schools had closed their doors. It was a decade before pre-school services for poor kids were back up to their previous levels, and it took direct payments replacing block grants to do it.

It's a shell game and a self-fulfilling prophecy: they find excuses not to disperse the money, no matter howm great the need, and then use the lack of dispersement to prove it wasn't necessary in the first place. And all that has to happen to make it work is for a few tens of thousands of families to lose their vouchers and end up on the streets. They think that's a price they can live with.