Political MoJo

Living Wage Battles

| Mon Jan. 23, 2006 1:21 PM PST

Last Sunday, Jon Gertner had a good piece for the New York Times Magazine about the living wage campaigns that are proving extremely popular—and successful—in cities across the country. The main point of the piece is that the progressives running these campaigns tend to make their appeals in moral, rather than economic terms, and suggests that its popularity could even make it a liberal wedge issue; as one living-wage advocate says, "This is our gay marriage."

But Gertner also takes time to point out that the economic case for raising the minimum wage can hold its own too. Here, for instance, is what happened in Santa Fe, which voted to raise the local minimum to $8.50 an hour in 2003. Granted, Gertner considers "data" a plural word (which is strictly correct but still ludicrous), but the rest is good:

To look at the data that have accumulated since the wage went into effect is to get a more positive impression of the law. Last month, the University of New Mexico's Bureau of Business and Economic Research issued some preliminary findings on what had happened to the city over the past year and a half. The report listed some potential unintended consequences of the wage raise: the exemption in the living-wage law for businesses with fewer than 25 employees, for instance, created "perverse incentives" for owners to keep their payrolls below 25 workers. There was some concern that the high living wage might encourage more high-school students to drop out; in addition, some employers reported that workers had begun commuting in to Santa Fe to earn more for a job there than they could make outside the city.

Yet the city's employment picture stayed healthy - overall employment increased in each quarter after the living wage went into effect and was especially strong for hotels and restaurants, which have the most low-wage jobs.That jibes with what economists David Card and Alan Krueger found in their study on the minimum wage. Why wouldn't a wage hike force employers to hire fewer workers? They reasoned that in the actual, existing labor market, employers might often have various undue advantages over their workers and as a result, businesses are able to bargain wages below what they would be in a market where wages were determined solely by supply and demand, in order to raise their profits. A minimum wage simply corrects this imbalance. Back to Gertner:

Most encouraging to supporters: the number of families in need of temporary assistance - a reasonably good indicator of the squeeze on the working poor - has declined significantly. On the other hand, the city's gross receipts, a reflection of consumer spending and tourism, have been disappointing since the wage went into effect. That could suggest that prices are driving people away. Or it could merely mean that high gas and housing prices are hitting hard. The report calculates that the cost of living in Santa Fe rose by 9 percent a year over the past two and a half years.
Opponents of the minimum wage tend to argue that hiking the floor for wages will only increase inflation, as businesses are "forced" to increase prices, but they rarely cite any sort of proof, and it remains to be seen whether this is actually what happened in Santa Fe. It's worth noting that last year, after Florida raised its state minimum, prices in local restaurants only rose about 3 percent. It's also worth noting that workers will almost certainly come out ahead even factoring in for inflation—that was the case in Baltimore after living wage laws went into effect in 1994. (Granted, runaway inflation would definitely hurt workers, but as James K. Galbraith pointed out a while back, there's no evidence that an inflationary spiral induced by a wage increase has ever occurred.) One more quote:
Rob Day of the Santa Fe Bar and Grill sees this [i.e., the high cost of living] as the crux of the matter. In his view, the problem with Santa Fe is the cost of housing, and there are better ways than wage regulations - housing subsidies, for example - to make homes more affordable. In the wake of the wage raise, Day told me, he eventually tweaked his prices, but not enough to offset the payroll increases. He let go of his executive chef and was himself working longer hours. "Now in the matter of a year and a half, I think there is a whole group of us who thought, If we were going to start over, this isn't the business we would have gone into," he says.
Some of Day's concerns are valid, and it's true, some individual businesses may suffer, but on the whole, it's hard to be sympathetic here. Between 1968 and 2004, domestic corporate profits rose 85 percent while the minimum wage fell 41 percent and the average hourly wage fell 4 percent. In the retail sector, profits have gone up 159 percent. Obviously capitalism wouldn't work very well if no one made a profit, but even a living wage is hardly going to put that in danger. (Moreover, some evidence, again, from Baltimore's experiment with a living wage in the 1990s, suggested that some employers absorb the increase in labor costs through efficiency gains, especially lower turnover and "reduced shirking" at work.)

At any rate, owners and managers who have to work more thanks to a wage hike may find life a bit more burdensome, but presumably less burdensome than families who, at the federal minimum of $5.15 an hour, have to get by with a little over $10,000 a year. (And yes, despite the myth that only teenagers work for $5.15 an hour, most minimum wage workers tend to be breadwinners—Heather Boushey has estimated that the average minimum-wage worker earns 68 percent of his or her family's income.) If we're matching sob stories here, it's not really a contest, which partly explains the success of these campaigns.

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Satellite Proliferation

| Fri Jan. 20, 2006 5:52 PM PST

The latest issue of the Bulletin of Atomic Scientists has an interesting (and, sadly, not-online) article by Jeffrey T. Richelson about the growing number of nations trying to join the "space reconnaissance club" by launching their own spy satellites. Until the 1990s, only the United States, Russia, and, to some extent, China had serious spy satellites—that is, with resolutions of 1 meter or less. But now Israel, Japan, and France have all launched their own, and more countries, such as Germany, Italy, Pakistan, India, South Africa, and Iran will likely follow soon enough.

Each country has its own reasons for wanting space reconnaissance programs. France doesn't want to rely on the United States for its information, and, at a bare minimum, hopes that having its own satellites will "keep the Americans honest," as one French defense analyst says, in situations similar to, say, the Iraq war. Israel, for its part, has learned that different CIA directors have different ideas about how much information to share with their ally, so it has now launched several of its own satellites to keep track of Iran, Syria, and Saudi Arabia. (None of these satellites, of course, even come close to seeing as much as the United States can.)

Japan's two (only two!) spy satellites, meanwhile, which were launched after North Korea fired a Taepodong missile over Japan in 1998, are making the neighbors nervous. That's another issue in itself. More interestingly, Richelson lays out the case for why the proliferation of spy satellites may actually make the world a safer place:

[T]he worldwide constellation of spy satellites makes the task of a nation seeking to hide certain activities—whether it is China moving troops or missiles to locations near Taiwan, Iran constructing a nuclear facility, or Pakistan preparing for a missile or nuclear test—far more difficult than in the past…. The transparency that the proliferation of reconnaissance satellites was expected to bring is far closer to a reality than it was a decade ago. Such transparency can serve to increase stability by reducing the chance of a successful surprise attack as well as by providing reassurance in tense times to adversaries who would prefer to avoid war…

Indeed, the widespared proliferation of space reconnaissance capabilities has opened the door to a series of innovative proposals. Gaurav Rajen, a visiting scholar at Sandia National Laboratories, has suggested that India and Pakistan engage in cooperative remote sensing projects as a way to reduce political tensions and minimize the risk of misperceptions during times of crisis. The South China Morning Post reports that surveillance satellites could help to avoid conflict over the Spratly Islands, which are claimed by China, Taiwan, Brunei, Vietnam, Malaysia, and the Philippines: "Structures built on the reefs by any of the rival claimants could be discovered early during the construction process."…And so on. It seems, though, that the United States, at the very least, would prefer not to see this sort of proliferation of spy satellites—hence the constant talk about "Space Control" and "militarizing space" and the like. The reasoning probably goes something like this: if a country like Pakistan fell into the hands of radical Islamists, it could, theoretically, use its satellites to direct terrorist attacks on the United States. And it's no doubt possible to imagine situations where increased transparency would increase, rather than decrease, the chances of conflict.

Democracy in Iran

| Fri Jan. 20, 2006 12:28 PM PST

Anytime I hear someone suggest that the only proper way to deal with Iran is to steer the country on the path towards democracy, I think of Michael Ledeen and his calls to topple regimes across the Middle East in some unspecified way—"Faster, please"—and cringe a bit. Which is too bad, since the sentiment has a lot going for it. In the Los Angeles Times yesterday, Shirin Ebadi, an Iranian human rights advocate and winner of the Nobel Peace Prize, made a more level-headed plea for promoting democracy and human rights in Iran:

So, what can the West do? Western nations should help the U.N. appoint a special human rights monitor for Iran. It would remind the General Assembly of Iran's human rights record annually, and strongly condemn it if the record keeps deteriorating. Contrary to the general perception, Iran's clerics are sensitive to outside criticism.

The World Bank should stop providing Iran with loans and, instead, work with nongovernmental organizations and the private sector to strengthen civil society. The West should support Iran's human-rights and democracy advocates, nominate jailed leaders for international awards and keep the cause in the public eye. Western nations should downgrade diplomatic relations if Iran continues violating basic human rights.

Iran is at least six to 10 years away from a nuclear bomb, by most estimates. The crisis is not even a crisis. There is ample time for political reform before Iran ever develops the bomb. Meanwhile, the West should permit Iran a limited uranium enrichment program (as allowed under the nonproliferation treaty) under strict safeguards by the International Atomic Energy Agency — but only when Tehran undertakes meaningful reforms, including freeing political prisoners and holding free and fair elections.

Lastly, the U.S. and Iran should enter direct negotiations. It is simply absurd for the U.S. and the most important nation in the Middle East not to communicate directly. The Bush administration should not be seduced by exile groups with no support in Iran. Developing democracy is an internal affair."Slower, please." Nothing here seems that objectionable, and as I mentioned in my last post, it's useful to remember that Iran almost certainly is "at least six to 10 years away from a nuclear bomb, by most estimates. " See Jeffrey Lewis for the technical details. But I'd add that—and Ebadi seems to agree, judging by her last paragraph—that "Western nations" can only influence Iranian behavior and promote good governance if they have some sort of relationship with the regime. The United States can't ever threaten to "downgrade diplomatic relations if Iran continues violating basic human rights" if diplomatic relations are already, you know, non-existent.

The United States has rarely, if ever, promoted reform, much less democracy, in countries it has alienated or isolated completely (although a large number of people seem to persist in the curious belief that our Cuba policy has somehow "worked" all these decades). There's no reason to think Iran would be any different—strangling the country with sanctions while encouraging fringe exile groups to rise up almost certainly won't get anywhere. "Smart sanctions" may offer a key middle ground—punish the leaders but not the people—but even that seems unlikely to foster serious change. One rather drastic alternative, then, is China-style engagement, which, it seems, Ebadi is suggesting, with some modifications.

Granted, with China, the United States hasn't managed to parlay economic engagement into progress on human rights—or else has avoided doing so, for various economic reasons—but China may be exceptional in this regard, since the U.S. lacks serious leverage over the country. More recently, however, the Bush administration decided to defer trade talks with Egypt until Mubarak undergoes serious political reforms. We'll see whether the administration is serious about this threat or not, but that's the sort of subtle pressure for reform that's presumably more effective when directed at friends rather than embittered and isolated foes.

Judging from this New York Times report today officials in the State Department already agree with a lot of this: "A heavy-handed sanctions approach is going to hurt an awful lot of Iranians that we don't want to alienate," says one. And David Ignatius reports that Condoleeza Rice and Stephen Hadley are re-evaluating America's Iran policy, trying to avoid a confrontation and hoping for a split in the regime between radicals like Ahmadinejad and the so-called "pragmatists." That's hardly seeing eye-to-eye with people like Ebadi, but it certainly counts as drastic progress since the good old "Axis of Evil" days.

Medicare Fiasco

| Thu Jan. 19, 2006 4:11 PM PST

The Los Angeles Times' Michael Hiltzik, among others, notices that the implementation of the Bush administration's new Medicare bill has been completely and utterly disastrous. As in, people are being denied access to much-needed drugs. And so on. The worst part of the story, however, is that the administration had been warned about these potential pitfalls for about a year now, but never got around to correcting them… See also Kaiser's comprehensive summary of the problems with the new legislation here.

Google refusing to hand over records to White House

| Thu Jan. 19, 2006 1:45 PM PST

The Bush administration, in an attempt to revive an Internet child protection law struck down by the U.S. Supreme Court, has asked a federal judge to order Google to turn over some material from its databases. Google, when issued a subpoena for the material last year, refused to turn it over.

The subpoena includes a request for one million random Web addresses and records of all Google searches from any one-week period. Google has refused to comply because of concerns over the privacy rights of its search engine users and concerns over protection of its trade secrets.

The Supreme Court, in striking down the Child Online Protection Act, said that its reach was too broad and may indeed prevent some adults from accessing legal pornography sites. The court then gave the government a choice between developing a narrower law or defending the Constitutionality of the one struck down.

Bush Does Health Care

| Thu Jan. 19, 2006 1:25 PM PST

According to the AP, it looks like President Bush will go after health care in his State of the Union address to Congress on January 1st, and propose to expand "health savings accounts." A few months ago, Jonathan Cohn wrote a long article on the problems with HSA's in the New Republic, which is very much worth reading.

The basic problem here is pretty clear: Any health care plan with a high deductible that allows a person to save $2,000 a year, tax-free, in a bank account to pay for out-of-pocket costs is going to attract a lot of very healthy people (who can save the money) and very few less-healthy people. But if all the extremely healthy people start fleeing from traditional insurance en masse, that means premiums will shoot up for everyone else. (South Africa tried to experiment with HSAs and ended up with a lot of similar problems.)

Basically, HSAs are a "clever" idea in theory, and no doubt a lot of economists are enamored of some of their features—like the fact that they promote "cost saving" by deterring patients from going to the doctor "too often"—but it's not even close to a serious attempt to fix the United States' dysfunctional health care system.

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GOP Unveils "Lobbying Reform"

| Wed Jan. 18, 2006 12:15 PM PST

Apparently the Republican Party is scrambling today to offer a series of "lobbying reform measures" intended to make it look like the GOP can clean up Congress. As Harry Reid says, "It's like asking John Gotti to do what he can to clean up organized crime." Already the Washington Post has discovered one loophole amidst Hastert's proposals—under the "reforms," lobbyists will now also have to donate a campaign contribution whenever they pay for a member of Congress to travel somewhere.

It's doubtful any of this will do any good. If Hastert and the rest of the GOP had wanted to pass "lobbying reform" a year ago, when Jack Abramoff was just starting to make headlines, nothing would have stopped them. Instead the House briefly changed the rules to allow Tom DeLay to retain his post as Majority Leader if he was indicted (after enough outcry, the rule was eventually dropped). No, lobbyists are a minor issue. The real problem here is that Congress is dominated by Republicans who depend on corruption for campaign cash and reward their corporate donors by passing bad policy that hurts everyone else. Exhibit A: the disastrous Medicare drug bill. No amount of minor rule changes or quaint little bans on certain types of airfare will change that fundamental dynamic; only elections can do that.

MORE: Paul Begala and James Carville have an interesting, and radical, proposal for campaign finance reform (to "Abramoff-proof politics") in the latest Washington Monthly.

Assisted Suicide and Executive Power

| Wed Jan. 18, 2006 11:17 AM PST

Orin Kerr noticed this paragraph in Justice Kennedy's majority opinion in Gonzales v. Oregon, the Oregon assisted-suicide case decided yesterday, which ruled against Ashcroft and Gonzales' attempts to restrict Oregon's assisted-suicide laws by prosecuting doctors involved:

[T]he Attorney General claims extraordinary authority. If the Attorney General's argument were correct, his power . . . would be unrestrained. It would be anomalous for Congress to have so painstakingly described the Attorney General's limited authority . . . but to have given him, just by implication, authority [over] an entire class of activity . . . .
Kennedy's not a big fan of executive overreach, it would seem. He also adds: "The statutory terms. . . do not call on the Attorney General, or any other Executive official, to make an independent assessment of the meaning of federal law." But that's just the power the Bush administration has been claiming for itself over the past four years, especially with the president's long series of "signing statements," tacked on to bills as "independent assessment[s] of the meaning of federal law." Right now, it seems, only Justices Scalia, Thomas, and Roberts are sympathetic to this argument—and one presumes we can add Samuel Alito if and when Congress confirms him.

Clueless in Africa

| Tue Jan. 17, 2006 8:37 PM PST

While touring Africa and defending her husband's use of international AIDS funds to market abstinence, First Lady Laura Bush said: "I'm always a little bit irritated when I hear the criticism of abstinence, because abstinence is absolutely 100% effective in eradicating a sexually transmitted disease."

She went on to say: "In many countries where girls feel obligated to comply with the wishes of men, girls need to know that abstinence is a choice."

We cannot even get middle-class American girls to understand that abstinence is a choice, yet Bush is suggesting that girls whose only source of income involves having sex, and women whose husbands have never heard of equality in marriage just say no. Many young girls are forced to marry their husbands, and part of that obligation is sex; many other girls are forced into prostituion. A popular belief in Africa, especially South Africa, is that having sex with a virgin cures AIDS, and the men who opt for this "treatment" are not asking the virgins' permission.

The Bush administration has already endangered the lives of thousands of women and girls by restricting the counseling and educational activities of family planning clinics. Laura Bush's advice to African girls truly adds insult to injury.

War with Iran?

| Tue Jan. 17, 2006 3:45 PM PST

Over the weekend, Atrios among others wondered whether the Bush administration was going to gear up for an attack on Iran—if not for the purpose of actually doing something about Iran, which seems unlikely, then at least for the purpose of putting the Democratic Party in a corner. Atrios is probably right to say that thinking about this in terms of actual policies—i.e., "What should the U.S. do about Iran?"—is fairly useless and thinking about this in terms of politics is the only reasonable way to go. But there are more than enough clever folks out there spending all their time pondering how the Democrats can "outflank" the Bush administration, so I'll stick with policy talk, I guess.