The Key to Making Economic Development More Equitable Is Making It More Democratic
The Key to Making Economic Development More Equitable Is Making It More Democratic
At the watery edge of Sunset Park, a working-class neighborhood of Chinese, Latino, and Indian immigrants in Brooklyn, lies the South Brooklyn Marine Terminal, a vast plot of warehouses and...
At the watery edge of Sunset Park, a working-class neighborhood of Chinese, Latino, and Indian immigrants in Brooklyn, lies the South Brooklyn Marine Terminal, a vast plot of warehouses and docks managed by New York City’s Economic Development Corporation (EDC). The terminal is part of an ambitious plan to generate new industrial jobs, innovation, and economic development serving local residents and the city more broadly. The plan, which has been a top priority for the administrations of both Michael Bloomberg and Bill de Blasio, involves efforts to invest in infrastructure and create incentives for new manufacturing businesses while creating new parks for local community members.
But in early 2015, a brewing dispute over the management of the project threatened to derail it. City Council member Carlos Menchaca, who represents Sunset Park, raised concerns about EDC’s role in managing the land and project, blaming the agency for insufficiently involving the local community in shaping the vision for Sunset Park’s future. This 11th-hour snag led to an unusually public war of words between Menchaca and the EDC. After months of further negotiations, the administration agreed to create a planning-and-jobs task force to engage community members, in addition to reinvesting 5 percent of the site’s revenue into a community fund and improvements to the nearby Bush Terminal Park.
While that task force has engaged local residents in a series of town-hall meetings, private investment has rapidly poured into the area as developers snatch up property for new industrial and commercial uses. The influx has left local residents fearful that, despite the new task force, they are still being left out of the conversations about the neighborhood’s future. While many say they welcome the influx of investment and jobs, they worry that, without a voice in the process, they might be displaced or left out of the economic gains.
In the midst of our national conversation about economic inequality, these questions of local-level economic development are critical. Although easily overlooked in favor of more sweeping policy issues, the reality is that cities have a disproportionate stake in the inequality crisis. Urban areas house more than 80 percent of the US population—and within these urban areas, policy decisions about how to attract investment, development, and jobs play a defining role in who gains from the resulting benefits and who loses, often for years to come.
But, as the debate roiling Sunset Park suggests, the concerns over development go even deeper than job-creation numbers and zoning. Beneath the surface is a new and more persistent anxiety about governance—about who makes decisions and how those decisions get made. If economic policy is to address inequality, it must not only be the right policy; it must also be formulated and driven by the right people.
At the national level, a growing body of scholarship indicates that the economic policies that have helped exacerbate inequality are themselves rooted in political inequalities, as industry, business, and economic-elite interests have continued to sway elections, legislation, and policymaking. As scholars like Larry Bartels, Martin Gilens and Benjamin Page, Nicholas Carnes, and Jacob Hacker and Paul Pierson have argued, economic policies skew to favor the interests of wealthier citizens, whether as a result of more sophisticated and better resourced interest-group lobbying, the decline of unions, or more subtle forms of social and cultural influence. The implication is that greater democratic accountability may be a necessity to shift economic policies in a more equitable and inclusive direction.
This same diagnosis and prescription applies to cities. In this New Gilded Age, cities are on the front lines of the battle to address economic inequality and declining opportunity. And the way they fight these battles matters. From minimum wages, gentrification, and affordable housing to neighborhood development, job creation, and local hiring, the process by which cities pursue urban economic policy can mean the difference between economic growth that continues to exacerbate inequality, and a more equitable, inclusive form of economic growth. Achieving this more equitable growth requires not only the right policies but also systems to empower stakeholders to hold policymakers, developers, and industry elites accountable to these more equitable goals.
A growing body of scholarship indicates that the economic policies that have helped exacerbate inequality are themselves rooted in political inequalities.
At the same time, by operating at the local level, cities offer real potential for rapidly engaging and empowering a wide range of stakeholders to remedy some of these structural disparities in political power. Cities can pioneer a new mode of democratic governance, where we build processes that include the full range of stakeholders, and provide them with a meaningful voice in shaping and driving economic policy. From New York to California, some of the most exciting innovations in urban development involve pioneering new ways to empower grassroots organizations and citizens—and in so doing, channel the benefits of growth more equitably.
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This is not the first time economic inequality has led to greater efforts at political inclusion. Half a century ago, the War on Poverty took a similar tack. The centerpiece of President Lyndon Johnson’s domestic agenda, the 1964 Economic Opportunity Act, created expansive new programs to provide job training, early childhood education (in the form of Head Start), access to legal services, community health services, and more. But the most controversial and radical innovation of this agenda was its focus on grassroots political empowerment as a key to fighting poverty. The act called for local governments to form “community-action agencies” to oversee these programs, and to administer them to local communities of poor and minority constituents. Furthermore, these community-action agencies had a mandate to pursue “maximum feasible participation” of the poor, including through direct representation of poor and minority constituents on the boards administering community-action programs. The theory was that the only way to hold the War on Poverty accountable to its mission was by providing the poor with a role in designing and administering anti-poverty policies.
This influx of money into anti-poverty programs was important, but combined with these institutional forms of empowerment, the War on Poverty helped activate a huge wave of organizing and mobilizing at the local level as civil-rights activists jumped on the opportunity to demand representation on the community-action boards, and accountability for channeling funds and programs to their neighborhoods. As new historical accounts of the grassroots political mobilizations around the War on Poverty suggest, mayors and city officials, alarmed by these newly emboldened grassroots movements of poor and minority constituents, reacted with increasingly harsh measures, first attempting to coopt these movements by appointing representatives they could work with to the community-action boards, and then cracking down on protesters and activists, siphoning off funding for community organizations that were the most active in pressuring local leaders.
Even in Washington, DC, the participation mandate quickly came under fire. Local party officials pressured the Johnson administration to abandon the mandate, while Johnson himself had always been uneasy with the more radical political message of the War on Poverty, viewing the notion of “local action” as encouraging cooperation between Washington and local officials, not as a call for grassroots protest.
Despite these difficulties, the War on Poverty was enormously successful in reducing the poverty rate and creating new models for economic programs. More important, it laid a foundation for greater political empowerment of community groups and the poor as a vehicle for improving economic equity, in the process helping catalyze a wave of community organizing. It also established, or dramatically expanded, initiatives like legal-defense and tenant-advocacy programs to address economic disparities by politically empowering their constituencies.
This is not the first time economic inequality has led to greater efforts at political inclusion. Half a century ago, the War on Poverty took a similar tack.
This participatory aspect of the War on Poverty is compelling today because of how it contrasts with the specter of top-down, heavy-handed urban renewal of the sort championed by Robert Moses to the detriment of many minority and poor communities. Today the concern is somewhat different—not that officials will ram through policies, but that they will skew too far towards privatization and overly friendly collaboration with developers, industry, and the economic elite. By providing representatives of often-overlooked constituencies with a real seat at the table to shape, implement, and monitor economic development policies, grassroots participation offers the hope of a more equitable approach to economic development.
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In a number of cities, efforts to empower stakeholders in economic-development projects have led to a more constructive and collaborative environment, which in turn has helped ensure a more equitable sharing of the gains. From housing to parks to infrastructure development, the economic and geographic environment within cities can undergo radical transformations, driven not by natural “market forces” but by an array of public policies—and by particular coalitions of political actors. These policies are often opaque to most residents. But empowering grassroots stakeholders in the nitty-gritty work of planning neighborhood redevelopment can help ensure that benefits of development are shared more equitably.
Consider the experience of Oakland. Rapid development and gentrification in the East Bay—in part fueled by the dramatic rise of housing prices in San Francisco—are creating both opportunities for economic growth and the threat of displacement of poorer and minority communities.
In 2000, the Oakland City Council designated the public land from the recently closed Oakland Army Base as a major redevelopment site, opening the way for construction of new public infrastructure, and laying the groundwork for new businesses and greater public access to the waterfront. Traditionally, community groups will seek a “community benefits agreement” (CBA) for redevelopment projects of this sort. A CBA is a three-way bargain between government, developers, and community representatives. In exchange for various tax and other incentives from the government, developers are required to provide some investments in neighboring communities, for example by hiring local workers in the construction projects, and setting aside funds for local parks and public spaces. The challenge with CBAs is that they can be time-consuming to negotiate and often lack meaningful grassroots community engagement. Moreover, they are rarely fully enforced, with the benefits failing to materialize long after developers have already cashed in their tax and other incentives.
The Oakland Army Base project, however, has been different. After lengthy negotiations that involved community groups, unions, developers, city government, and other stakeholders, the resulting CBA not only included provisions for local hiring and public investment in community needs such as parks, it also forged a deep collaboration between these different players. This agreement has proved remarkably effective and durable, in large part because of the effort to empower and include community representatives more directly in the negotiations, planning, and monitoring of the project.
In the buildup to the CBA, for example, a number of influential community organizations—from the East Bay Alliance for a Sustainable Economy (EBASE) to the Alliance of Californians for Community Empowerment to Oakland Rising—formed a broad coalition engaging thousands of voters in the low-income areas to support an inclusive economic development agenda. This grassroots movement helped change the debate around the project to focus more directly on how the redevelopment would serve local residents and the local community. In the end, the campaign brought together city officials and developers around an agreement on the local-hire and public-investment demands now baked into the CBA.
More important, the goals of the CBA are being implemented and monitored through an innovative, inclusive process in which community members are participating not only as sources of input but also as actual partners. To implement the local-hire provisions, the city created the West Oakland Job Resource Center, operating it in close collaboration with EBASE and other community organizations. The CBA requires developers to work with the Job Center to hire local residents; the Job Center helps make this possible by enabling employers to find qualified local workers, while also providing services, support, and referrals to job seekers looking to transform their engagement with the army-base project into longer-term careers.
This collaborative and inclusive process surrounding the Oakland army-base redevelopment is perhaps best exemplified by the Community Jobs Oversight Commission, a new body chartered by the city, which is comprised of representatives of the developers and community organizations. These representatives are appointed by the mayor and charged with the task of overseeing the redevelopment project.
The commission serves as a unique focal point for civic engagement, operating as a forum for airing grievances, a mechanism for ensuring that local-hire and public-investment provisions are in fact being met, and a vital point of leverage for community members to continue to have a voice in the ongoing implementation and development of the army-base project. By providing a public process for monitoring outcomes and airing grievances—and by including representation from all the major stakeholders, including community members—the commission has helped create an extraordinarily effective process; the redevelopment project is not only meeting its local-hire targets but exceeding them, according to members of Revive Oakland.
The Oakland experience is a good example of how a commitment to political inclusion can help drive economic inclusion. But this isn’t just a product of greater advocacy; it required a number of different actors to commit to an inclusive process. Government officials had to create institutions like the Commission and Job Center—and imbue them with real authority. Community leaders had to decide to shift from an advocacy stance to a collaborative one, joining in and investing scarce human and financial resources to make these institutions function. And labor leaders had to see that their interests in winning good jobs on the development projects were aligned with the community groups’ interest in access to those jobs.
Empowering grassroots stakeholders in the nitty-gritty work of planning neighborhood redevelopment can help ensure that benefits of development are shared more equitably.
Similar models of inclusion in planning and implementation can help create a more democratic approach to equitable development. EBASE itself is part of the Partnership for Working Families, a national network of community organizations that is attempting similar strategies in a number of other cities.
On the implementation side, a number of cities are considering more participatory approaches to monitoring and enforcing wage-theft policies. San Francisco’s Department of Labor, for example, provides grants and partnerships with community groups to expand their capacity to monitor and report violations. The national network of progressive local officials, Local Progress, has helped share lessons from this model, as other cities from Seattle to New York are now considering similar approaches.
Beyond their particular urban contexts, these examples indicate a broader potential. Participation and community engagement in these examples involve more than just town-hall meetings or comment periods. Rather, they involve empowering stakeholders to actually shape the strategy and vision for development plans, and to engage in the work of executing, implementing, and monitoring. This deeper engagement helps shapes policies at an early stage to make them equitable. If engaged early and in good faith, these community representatives can become important partners in implementing development policies and project goals.
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These examples echo the War on Poverty attempt to empower a wider range of stakeholders, especially within poor communities and communities of color, by providing them with institutionalized points of leverage. The difference this time is that there is a greater potential for governments themselves to invest in and support this kind of engagement. In Oakland, New York, and elsewhere, the active efforts of city officials to create opportunities for early and active engagement makes participation genuine.
Equitable development is about more than getting the policies right; it is also about empowering stakeholders to outline the vision, implement the strategy, and monitor outcomes. Achieving this requires an ecosystem of actors committed to political inclusion and democratic participation. As a start, it requires government officials to create and manage an inclusive process that provides a meaningful voice to stakeholders, including institutionalized forms of representation or leverage—as with the War on Poverty Community Action Boards, or with the more contemporary efforts at participatory planning and monitoring. Next, it requires civil-society actors and other stakeholders willing to engage not just as advocates but as partners in implementing and enforcing standards. Finally, it also requires transparency and data. Beginning with stated public commitments to goals—such as the local-hire commitments in Oakland’s CBA—and metrics for monitoring compliance and impact through objectively trackable metrics.
We now have all the ingredients to do this; it is up to us to make the most of this opportunity.
By K. Sabeel Rahman
Source
Minnesota’s other racial disparity: voting
Minnesota consistently ranks at the top in terms of voter turnout. It earns accolades for the quality and competence of its election administration. Recently Secretary of State Steve Simon...
Minnesota consistently ranks at the top in terms of voter turnout. It earns accolades for the quality and competence of its election administration. Recently Secretary of State Steve Simon challenged Minnesotans to register and vote so that the state can continue to be the leader when it comes to election turnout. Yet that high turnout comes with a racial gap that is among the worst in the country.
Minnesota is a land of racial disparities, such as in education. Minnesota Department of Education data point to blacks and other students of color scoring 30 points or more lower on achievement tests compared to whites. U.S. Department of Education data show Minnesota near the bottom of the list in on-time high school graduation rates for blacks, with an overall 67 percent graduation for black males (compared to 90 percent for white males), according to the 2015 Schott Foundation for Public Education report. The black/white male graduation gap is one of the highest in the country. A 2014 study found black students 10 times more likely to be suspended or expelled from Minneapolis schools than white students.
Income and employment
Second, look at income and unemployment. A 2013 Minnesota Advisory Committee to the U.S. Commission on Civil Rights report found the unemployment gap for blacks to be three times that of whites. A 2015 report by the Center for Popular Democracy found the gap to be second worst among states in the nation, only behind Wisconsin. And 2015 U.S. Census data point to Minnesota as having one of the highest black/white gaps in medium family income in the nation. WalletHub, a personal finance site, documented the financial gap between whites and minorities in Minnesota as the biggest in the nation, with median income (4th highest), home ownership (3rd), poverty rate (3rd) and education level (14th).
In criminal justice, groups such as the Sentencing Project note Minnesota among the worst when it comes to racial disparities in terms of incarceration. And the Institute for Metropolitan Opportunity 2015 report “Why Are the Twin Cities So Segregated?” confirmed what john powell and I had documented a generation ago at the Institute on Race and Poverty: that the seven-county metro region has one of the worst residential and educational segregation patterns in the country.
Now consider the racial disparities in voting. WalletHub earlier this year released a study examining political engagement among blacks, using six criteria. It found Minnesota ranked 16th. Among notable failures, Minnesota was 45th in the nation for black voter turnout in the 2014 elections. According to the U.S. Census Bureau in the 2012 elections, 80.2 percent of white non-Hispanic citizens registered to vote, compared to 66.9 percent and 56.1 prcent for blacks and Hispanics. In terms of actually voting, white non-Hispanic turnout was 74 percent, compared to 49.2 percent and 32.5 percent for blacks and Hispanics. For Asian-Americans, their registration was greater overall than for white non-Hispanics at 87.6 percent, but actual turnout was only 56.2 percent.
Why the disparity in registration and voting? It is no coincidence that the poverty, education and incarceration disparities along with the residential segregation are related to the lower voter turnout. Political scientists have long documented the correlations between income, education, and geography. High incarceration rates bring felon disenfranchisement, contributing to decreased eligibility to register and vote.
Low voter turnout compounds other disparities
Low voter turnout among people of color feeds upon itself, compounding other racial disparities and problems. People of color are unable to electorally challenge employment or housing policies. They are unable to challenge policing policies, and they are unable to challenge the voting laws and procedures that may hinder their political engagement.
Minnesota must address the racial voting disparity, especially in light of the growing diversity of the state population. It will require not just addressing problems in the voting laws including felon disenfranchisement, but also tackling the other racial disparities that contribute to the voting problems. If it does not, Minnesota risks perpetuation of a second-class citizenship for many of its people.
By David Schultz
Source
Climate Justice activists to EPA: make Clean Power Plan work for fossil fuel afflicted communities!
While the fossil fuel industry and Republican states and senators step up legal and political challenges to Obama's Clean Power Plan, protests have also been flooding in to the EPA's ten regional...
While the fossil fuel industry and Republican states and senators step up legal and political challenges to Obama's Clean Power Plan, protests have also been flooding in to the EPA's ten regional offices from climate activists - demanding that it cut out dirty biofuels and 'carbon trading' loopholes, and protect vulnerable communities from fossil fuel pollution.
Last week, activists at each of the Environmental Protection Agency's ten regional offices issued their own corrective on the Obama administration'sClean Power Plan.
Days before the end of the federal comment period, theClimate Justice Alliance's Our Power Campaign - comprised of 41 climate and environmental justice organizations - presented its Our Power Plan.
The document identifies "clear and specific strategies for implementing the Clean Power Plan, or CPP, in a way that will truly benefit our families' health and our country's economy."
Introduced last summer, the CPP looks to bring down power plants' carbon emissions by 32% from 2005 levels within 15 years. The plan was made possible by Massachusetts vs. EPA, a 2007 Supreme Court ruling which mandates that the agency regulate greenhouse gases as it has other toxins and pollutants under the Clean Air Act of 1963.
Under the CPP, states are each required to draft their own implementation plans by September of this year, or by 2018 if granted an extension. If they fail to do so, state governments will be placed by default into an interstate carbon trading, or 'Cap and Trade', system to bring down emissions.
After COP21, OPP is the next logical step
Michael Leon Guerrero, the Climate Justice Alliance's interim coordinator, was in Paris for the most recent round of UN climate talks as part of the It Takes Roots Delegation, which brought together over 100 organizers from North American communities on the frontlines of both climate change and fossil fuel extraction.
He sees the Our Power Plan (see goals, below) as a logical next step for the group coming out of COP21, especially as the onus for implementing and improving the Paris agreement now falls to individual nations:
"Fundamentally we need to transform our economy and rebuild our communities. We can't address the climate crisis in a cave without addressing issues of equity."
The Our Power Plan, or OPP, is intended as a blueprint for governments and EPA administrators to address the needs of frontline communities as they draft their state-level plans over the next several months. (People living within three miles of a coal plant have incomes averaging 15% lower than average, and are 8% more likely to be communities of color.)
Included in the OPP are calls to bolster what CJA sees as the CPP's more promising aspects, like renewable energy provisions, while eliminating proposed programs they see as more harmful. The CPP's carbon trading scheme, CJA argues, allows polluters to buy 'permissions to pollute', or carbon credits, rather than actually stemming emissions.
The OPP further outlines ways that the EPA can ensure a "just transition" away from fossil fuels, encouraging states to invest in job creation, conduct equity analyses and "work with frontlines communities to develop definitions, indicators, and tracking and response systems that really account for impacts like health, energy use, cost of energy, climate vulnerability [and] cumulative risk."
The all-too predictable fightback
Lacking support from Congress, the Obama administration has relied on executive action to push through everything from environmental action to comprehensive immigration reform. The Clean Power Plan was central to the package Obama brought to Paris. Also central to COP21 was US negotiators' insistence on keeping its results non-binding, citing Republican lawmakers' unwillingness to pass legislation.
Predictably, the CPP has faced legal challenges from the same forces, who decry the president for having overstepped the bounds of his authority. Republican state governments, utility companies, and fossil fuel industry groups have all filed suit against the CPP, with many asking for expedited hearings.
Leading up the anti-CPP charge in Congress has been Senate Majority Leader Mitch McConnell, who has called the plan a "regulatory assault", pitting fossil fuel industry workers against the EPA. "Here's what is lost in this administration's crusade for ideological purity", he wrote in a November statement, "the livelihoods of our coal miners and their families."
Organizers of last Tuesday's actions, however, were quick to point out that the Our Power Plan is aimed at strengthening - not defeating - the CPP as it stands. Denise Abdul-Rahman, of NAACP Indiana, helped organize an OPP delivery at the EPA's Region 5 headquarters in Chicago, bringing out representatives from Black Lives Matter Minneapolis, National People's Action and National Nurses United.
"We appreciate the integrity of the Clean Power Plan", she said. "However, we believe it needs to be improved - from eliminating carbon trading to ensuring that there's equity. We want to improve CPP by adding our voices and our plan, and we encourage the EPA to make it better." Four of the six states in that region - which includes Illinois, Indiana, Michigan, Minnesota, Ohio and Wisconsin - are suing the EPA.
Endorsed by the National Domestic Workers' Alliance, Greenpeace and the Center for Popular Democracy, among other organizations, the national day of action on the EPA came as new details emerged in Flint, Michigan's ongoing water crisis - along with calls for Michigan Gov. Rick Snyder's resignation and arrest.
The EPA has also admitted fault for its slow response to Flint residents' complaints, writing in a statement this week that "necessary [EPA] actions were not taken as quickly as they should have been." Abdul-Rahman connected the water crisis with the need for a justly-implemented CPP:
"The Flint government let their community down by not protecting our most precious asset, which is water. The same is true of air: we need the highest standard of protecting human beings' air, water, land."
Source: The Ecologist
When Lawsuits Protect Hardhats
New York Daily News - April 17, 2014, by Errol Louis - New York is about to embark on a historic building boom — and that has touched off a furious new round in a long-running battle about how to...
New York Daily News - April 17, 2014, by Errol Louis - New York is about to embark on a historic building boom — and that has touched off a furious new round in a long-running battle about how to protect the health and safety of the workers who create the city’s glittering skyline. This month alone, two men have fallen to their deaths while working on midtown buildings under construction — a grim reminder that the skyscrapers we boast about come at a high cost, and sometimes a tragic one.
We’ll see many more projects get off the ground in the months ahead. The de Blasio administration is set to announce plans this week to rebuild areas devastated by Hurricane Sandy, and in early May will unveil a larger plan for building or maintaining 200,000 units of housing.
That’s a lot of work to be done — and thousands of men and women needed to engage in one of the most dangerous professions in America.
In 2011 and 2012, a staggering 1,513 construction workers died on the job nationwide, more than in any other industry, according to Public Citizen, a national think tank. Thirty-six of them were in New York City.
“You literally see people who are not making a ton of money losing their lives to grow the economy of this city,” says Jose Duffy, a policy advocate at the Center for Popular Democracy, a Brooklyn-based nonprofit group.
“These are people literally dying because employers aren’t putting in basic safety regulations.”
At the center of the current fight is Local Law 240, also known as the Scaffold Law, which allows construction workers who get injured or killed on the job to sue the companies that hired them. The law was passed in the 1880s as New York began constructing the world’s first skyscrapers — and losing workers maimed or killed as the structures went up.
The construction industry has been trying for more than a century to shrink or repeal the law, and allow firms to avoid or limit liability if they can prove that an accident was the fault of the dead or injured worker. Industry lobbyists duly prowled the halls of the statehouse this year.
Lawsuits are a less-than-perfect way to force the industry to take safety seriously, but there aren’t many alternatives. Public Citizen estimates it would take the Occupational Safety and Health Administration more than 100 years to inspect every New York State construction site even once.
So workers sue when they get hurt on unsafe job sites, and insurance companies charge building companies hefty premiums in exchange for paying the claims of those killed or injured workers. A recent report by pro-industry researchers at SUNY’s Rockefeller Institute estimates that the law costs New York $150 million in economic output and 12,000 jobs — expenses imposed by insurance companies, which charge construction firms.
Duffy’s group, in turn, issued its own report this week attacking the methods and motives of the Rockefeller Institute study.
While the political battle goes on in Albany, people like Walter Cabrera are caught in the middle. Speaking through a translator, Cabrera, who came here from Peru a decade ago, told me how his supervisor had him work on a defective scaffold at 240 West Broadway in 2011.
The rig didn’t have hand rails, and Cabrera ended up falling and injuring his knee, wrist and elbow. Three years and two surgeries later, he remains unable to work and is in the process of suing the company that hired him.
While Cabrera waits out the legal process in his Jackson Heights apartment, the building he helped construct — a swank Tribeca condo now called 1 North Moore — has a penthouse that listed at $8 million and units that sold for $5 and $6 million, according to curbed.com.
It would be unthinkably immoral to build the city on the injured backs of disabled immigrant workers. Until there’s a better alternative, it looks like the Scaffold Law is here to stay.
Source
Fed Up Panels Solve Wage Stagnation Puzzle: Corporate Power Makes Markets Uncompetitive
09.23.2018
JACKSON HOLE, WY — Today, experts on our economy came together in Jackson Hole, Wyoming to...
09.23.2018
JACKSON HOLE, WY — Today, experts on our economy came together in Jackson Hole, Wyoming to talk about how market power keeps wages down and what the Federal Reserve can do to address it. Though Federal Reserve Chairman Jerome Powell said the reason for stagnant wages was “a puzzle.”
The panel, called “Putting the Puzzle Together: How Market Concentration Explains Slow Wage Growth and What the Fed Can Do About it” was organized by Fed Up. Panelists, including Roosevelt Institute Research Director and Fellow Marshall Steinbaum, Open Markets Institute Policy Counsel Sandeep Vaheesan, retail worker Nick Gallant, and labor studies and employment relations doctoral student Phela Townsend, discussed how an analysis of the role of market power in our economy would shift the Federal Reserve’s directive.
This year, the theme of the Federal Reserve’s economic symposium is “Changing Market Structure and Implications for Monetary Policy.” According to panelists, market consolidation means that the Fed needs to fundamentally shift the assumptions on which their monetary policy models rest.
Setting the scene for the panel, Fed Up Campaign Director Shawn Sebastian said, “The reason for stagnant wages is actually not a hard puzzle to solve. The data is right in front of us. The difficulty for the Fed is not in figuring out what the impact of increased market power is on wages -- consolidation keeps wages low by decreasing worker power. What’s hard for the Fed is giving up outdated frameworks from the 1980s that are not relevant to the economy today.”
Retail worker Nick Gallant spoke about his experience as a retail worker. He said:
“I can’t go to school because I have no control over my schedule and I need to work full time to pay rent and survive. I live on paycheck to paycheck and sometimes I don’t have enough money to buy bare necessities and I have to come up with creative ways to eat because desperate times call for desperate measures. If I left this job, I would simply be looking at another job like this. This is being a retail worker in America.”
Economic policy and labor experts added:
“When the economy grows, it doesn’t benefit everyone -- only major shareholders and CEOs,” said Marshall Steinbaum, Research Director and Fellow at the Roosevelt Institute. “Market power makes the economy grow less because companies don’t invest or hire workers. They pay out to the wealthiest stakeholders. And with fewer corporations dominating labor markets, they are able to keep wages down.”
“The economy is a construct of law and politics,” said Sandeep Vaheesan, Policy Counsel at the Open Markets Institute. “Our current predicament wasn’t inevitable -- it is the result of decades of prioritizing corporate and investor interests over those of working people. This is far from a puzzle. It’s straightforward decision making by those in power -- and these choices can be changed. In understanding the economy and making decisions on monetary and regulatory policy, the Fed needs to realize that markets just plain aren’t competitive but defined by employer power and worker weakness. They need models that reflect our economic reality.”
“This is not really new. As we look at the trajectory of what has happened in recent decades and what has happened to wages historically, we are really talking about how workers’ power has been weakened through the decline of unions and the erosion of other workers protections and rights. This has severely diminished workers’ ability to have a voice and a say over economic and other working conditions, or to find a job elsewhere with better conditions,” said Phela Townsend, doctoral student in Labor Studies and Employment Relations at the School of Management and Labor Relations at Rutgers-New Brunswick. “Unleashed corporate power, on top of weakened worker power, silences workers and keeps them from advocating for the wages that many of them need to survive.”
The panel comes the day before the Federal Reserve hosts a number of panels on the subject of market power. During the economic symposium, working people from across the country will host educational sessions and discuss how the Federal Reserve has ignored the needs of working people.
You can access a recording of the panel here.
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Media Contact: Lia Weintraub, lweintraub@populardemocracy.org
Zara accused of creating culture of customer discrimination in new report
Black customers at Spanish fashion retailer Zara’s New York stores have been disproportionately identified as potential thieves, a significant proportion of employees surveyed by the Center for Popular Democracy have claimed in a new report released on Monday.
A survey of 251 employees and a round of focus groups conducted by the union-allied workers’ rights campaign group claims there is a practice within Zara to label suspicious customers or potential thieves with the code words “special orders”. Once a “special order” was identified and his or her location radioed to employees’ headsets, an employee would follow that customer around, the report claims.
Forty-three percent of the respondents did not answer questions referring to “special orders” or said they did not know the term.
But out of the 57% that did respond to that question, 46% claimed black customers were called special orders “always” or “often”, compared with 14% who said the same about Latino customers and 7% about whites.
Employees quoted in the survey claimed special orders were identified by “dressing a certain way” and were “mostly African American”, according to the CPD. One employee told the group he felt “that black customers were targeted when it came to stealing”, the report said.
One black employee claimed that when he had come in to pick up a check one day wearing a hooded jacket he was identified as a special order and prevented from entering a back office.
Connie Razza, CPD’s director of strategic research, said the code words used at Zara had now changed from “special orders” to a request for “customer service” to go to the location of the suspicious customer.
The report also claims that employees of color face unequal conditions within the company’s eight New York City stores.
“I was expecting some level of discrimination, but the degree of disparity with workers getting raises and hours that vary so dramatically was surprising,” said Razza.
The report claims:
Black employees are more than twice as dissatisfied with their hours as white employees.
Darker-skinned employees were least likely to be promoted, and received harsher treatment from managers.
Lighter-skinned employees of color and white employees experienced better treatment within the company, with higher status assignments, more work hours and a stronger likelihood of being promoted.
Many of the employees interviewed felt there was favoritism within the company based on race.
Razza said that while the retail industry was known for unpredictable working schedules and low wages, the situation was “even worse for black employees”.
The report, compiled from surveys conducted between February and April, claimed employees said that managers showed favoritism, and “many of the employees interviewed felt that favoritism is based on race”.
Such favoritism, they said, can have an impact on promotions, the distribution of work hours and management evaluation and treatment, the report claimed.
Of the 251 employees surveyed, 130 identified as Hispanic, 59 as black, 34 as white, 12 as Asian and 11 as mixed race. Employees were also identified by their skin color on a scale of one to four, with one indicating very light skin and four indicating dark skin. There are approximately 1,500 Zara employees in New York, suggesting one-sixth were surveyed.
“We found darker skinned employees were least likely to be promoted, and received harsher treatment from managers,” Razza said.
In some instances, the report claims, managers told employees not to take the survey. On at least one occasion, managers called the police on one of the employees taking the survey, the CPD claims.
A spokesperson for Zara USA denied any of the claims were accurate.
“Zara USA vehemently refutes the findings of the Center for Popular Democracy report, which was published without any attempt to contact the company,” the spokesperson said in a statement to the Guardian.
“The baseless report was prepared with ulterior motives and not because of any actual discrimination or mistreatment,” the statement went on. “It makes assertions that cannot be supported and do not reflect Zara’s diverse workforce. Zara USA believes that the report is completely inconsistent with the company’s true culture and the experiences of the over 1,500 Zara employees in New York City.
“We are an equal opportunity employer, and if there are individuals who are not satisfied with any aspect of their employment, we have multiple avenues for them to raise issues that we would immediately investigate and address.”
Referring to the claims about black customers being disproportionately identified with the code words “special orders”, it said: “We are a global multicultural company serving valued customers across 88 countries, and do not tolerate discrimination of any form.”
In a later statement, a Zara USA spokesperson added: “The expression ‘special order’ is a term used to designate a common situation in which associates are requested to enforce customer service and zone coverage on the floor. It does not designate a person or group of people of any category.”
Referring to claims about discrimination in promotions, the spokesperson said: “In its most recent round of internal promotions at Zara USA, approximately half were Hispanic or African American employees. In addition, approximately half of all hours are regularly allocated to Hispanic or African American employees. These facts clearly demonstrate that diversity and equal opportunity are two of the company’s core values.”
According Zara, approximately half of all Zara USA’s employees are Hispanic or African American.
The report arrives on the heels of a $40m discrimination lawsuit filed earlier this month by Ian Miller, who was general counsel for Zara USA Inc from 2008 until this March. According to the lawsuit, Miller – who is Jewish, American and gay – said he was excluded from meetings, given smaller raises than co-workers and subjected to racist, homophobic and antisemitic remarks because he did not fit the company’s “preferred profile” of Christian, Spanish and straight.
Miller also claimed his harassers were protected from punishment by company founder Amancio Ortega Gaona. He sued Zara, his former supervisor Dilip Patel and former Zara USA CEO Moíses Costas Rodríguez, under various New York state and city laws prohibiting pay discrimination, wrongful discharge, retaliation and hostile work environments.
Razza claimed discrimination pervaded the whole company.
“It’s a corporate culture that’s very problematic,” she said. “The lawsuit brings to light the depth that discrimination pervades Zara USA. Given the revelations of the lawsuit, we felt it was very important to reflect that it happens across all levels.”
The lawsuit and report follow a number of occasions during which Zara was criticized for selling items with racially insensitive designs. A bag embroidered with swastikas was pulled from stores after customers complained in 2007. In 2013, Zara sold necklaces with figurines in blackface.
Last August, the retailer was the subject of a backlash from customers for two different shirt designs — one striped and emblazoned with a gold star that resembled uniforms worn by Jewish victims in Nazi concentration camps and the second a white T-shirt displaying the words “White is the New Black”.
There is a recent history of controversies over alleged racism in the New York retail sector. In 2013, Macy’s and Barneys, two of New York’s most famous department stores, faced investigation from the state attorney general after several customers accused the stores of racially based discrimination.
Macy’s and Barneys both came to settlements for $650,000 and $525,000, respectively, in August 2014.
Razza said the CPD focused on Zara because of the company’s concentration in New York City and recent organization efforts by workers for fair wages at Zara.
Source: The Guardian
Wasted wealth – The ongoing foreclosure crisis that never had to happen
The Hill - May 22, 2013, by LeeAnn Hall & Kevin Whalen - In 2008, the Emergency Economic Stabilization Act created the Troubled Asset Relief Program (TARP), which provided $700 billion to the...
The Hill - May 22, 2013, by LeeAnn Hall & Kevin Whalen - In 2008, the Emergency Economic Stabilization Act created the Troubled Asset Relief Program (TARP), which provided $700 billion to the Treasury to address the subprime mortgage crisis and to “maximize assistance for homeowners.” As we know, the majority of that money went to the banks that created the mortgage crisis with high-risk products, and only about 3 percent was designated for homeowners — many of whom are still waiting for their checks.Five years later, the mortgage crisis continues. There are still at least 13.2 million underwater mortgages, a number that is likely much higher when factoring in unreported areas. An estimated 13 percent of underwater borrowers with Fannie Mae and Freddie Mac loans have missed three or more mortgage payments. If even this small proportion of the 13.2 underwater homes goes into foreclosure, Americans stand to lose another $221 billion in wealth.Betty Badro, a homeowner from Glendale, Calif., said it best: “Where is our relief? If I am thrown out of my house, it will be because my bank refused to work with me for a loan modification. The power is in their hands to stop the crisis. Instead, they continue to profit off of our communities. Even though the stress is affecting my health, I’m not going down without a fight.”This financial pain is not evenly distributed around the country. As the new report, Wasted Wealth, authored by the Alliance for a Just Society and released with the Home Defenders League and New Bottom Line, shows: communities of color are disproportionately affected at alarming levels. Communities of color were targeted for subprime and riskier products, and as a result have seen higher rates of foreclosure in their neighborhoods. Data show that people of color tend to hold more of their equity in real estate, adding to the impact the crisis has had on those communities.
Prior to the Great Recession, 35 percent of subprime loans were issued to borrowers who qualified for prime loans, and disproportionately so for black and Latino borrowers. After controlling for credit scores, income and other factors, blacks were 80 percent and Latinos 70 percent more likely than white borrowers to receive subprime loans. As a result, ZIP codes with majority people of color populations saw 16.8 foreclosures per thousand households with an average of $2,198 in lost wealth per household. In sharp contrast, segregated white communities experienced only 10 foreclosures per thousand households and an average wealth loss of $1,257 per household.
The result is a devastating loss of wealth for entire communities from which they may not recover. That is why it is time to act. There is a solution that could save a generation of middle-class homeowners and keep their families on track to live out the American Dream. A strategy of principal reduction would save money for homeowners, boost the economy, and create jobs.Principal reduction — writing down underwater mortgages to current market values — would create significant savings for underwater homeowners. It would also generate new economic activity and create jobs in local economies. Using 2012 data, a principal reduction program could produce average annual savings of $7,710 per underwater homeowner nationwide, boost the U.S. economy to the tune of $101.7 billion and create 1.5 million jobs.It’s time for our elected officials to act. The nomination of a new director at the Federal Housing Finance Agency, Mel Watt, is a step in the right direction and is a hopeful sign that Fannie Mae and Freddie Mac will implement far-reaching homeowner relief. But we are not just going to hope for change. Homeowners from across America representing every community are traveling to Washington, D.C., to demand justice for their families and their futures. As a nation, we committed trillions of tax dollars to bail out big banks so that we could restore the economy — now it’s time for our government to require those banks to provide relief for families and communities devastated by the financial crisis and foreclosure epidemic.
Source:
Toys 'R' Us employees demand severance pay for 33,000 workers
Toys 'R' Us employees demand severance pay for 33,000 workers
The push comes as a part of a campaign supported by the advocacy group Center for Popular Democracy. The campaign will host a series of events at Toys "R" Us headquarters and the offices of...
The push comes as a part of a campaign supported by the advocacy group Center for Popular Democracy. The campaign will host a series of events at Toys "R" Us headquarters and the offices of private-equity owners. More than 50,000 people have already signed a petition calling for Toys "R" Us workers to receive severance pay.
The Dyett Hunger Strikers’ Fight For Green Technology and a Better Bronzeville
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All this in an effort to make Chicago Public School (CPS) officials heed their plea: to end the privatization of education and to make Walter Dyett High school into a Green Technology community high school.
The hunger strikers are saying what needs to be said: that Black and brown children must be valued, their families must be valued, and their schools must nourish their inherit value.
The demands of the hunger strikers are easy to understand. They don’t merely want a re-opened school, as was finally agreed to by Mayor Rahm Emanuel and CPS last week after 18 days of hunger strike. They want a Green Technology community high school with parent engagement in decision-making from the beginning. Their plan for the new school was vetted by multiple education experts at the University of Chicago. The comprehensive plan presented by the community and the hunger strikers to CPS was “excellent and should be chosen,” said Jeannie Oakes, president of American Educational Research Association, AERA.
Why Walter Dyett High School was set up for closure by the CPS to begin with is difficult to understand. The school received awards in 2008 and 2011. First, for the largest increase of students going to college out of all Chicago’s public schools, and then the ESPN “Rise Up” award for small schools making great improvements, but in need of some help. The school won a $4 million athletic facilities renovation.
So what happened? In a part of town activists say is a target for gentrification, the school was closed before students even got a chance to enjoy the new facilities. The strikers called it “racism” and “systemic disinvestment.” “Our schools weren’t failing,” they said. “They were failed.” And Walter Dyett High School was set to become yet another victim in the closing of over 50 neighborhood Chicago public schools in favor of privately owned and managed charter schools, with poor records of achievement, no accountability and inadequate oversight. But due to the sacrifice of the hunger strikers risking their health, that plan was overturned last week.
However, the Bronzeville hunger strikers know what a growing chorus of national education experts recognize: while just keeping schools open is not enough, sustainable “community schools” can help transform neighborhoods. As it is now, Bronzeville is a food and job desert, but Green Technology addresses both problems. There are already 5000 community schools in the US that through civic partnerships address the majority of challenges in a neighborhood by providing wrap-around healthcare, social and psychological services, in addition to the standard educational offerings. Community schools focus on restorative justice practices and a curriculum based in the community and evaluated by teachers, so students can learn more. Community schools are making marked gains in student outcomes both academically and socially.
Take Cincinnati. The city turned around their public schools’ statistics when they bet on the effectiveness of community schools over charter schools. The results are staggering. In 2003, before introducing the model, only 51 percent of all students graduated. In 2014, when 34 out 55 schools were community schools, 82 percent of all students were graduating. Community schools combat racial inequality, as well: in Cincinnati, the black/white achievement gap dropped 10 percent in those same 11 years. Similar results are seen in New York, Baltimore, Kentucky, Ohio, Minnesota, and other places where community schools have been prioritized.
These are the kind of schools that Bronzeville deserves.
It is under this history of political disinvestment that Bronzeville community leaders arrived to last month’s protests: community members risking their health to fight for their children’s access to something as basic as a good public school. While school officials took the right first step by moving to keep Dyett open, they must heed the deeper call of the people of Bronzeville and invest in a community school that will better the future of the children in Chicago.
Source: In These Times
Ilhan Omar Romps In Minneapolis Democratic Primary, While Tim Walz And Keith Ellison Win Statewide
Ilhan Omar Romps In Minneapolis Democratic Primary, While Tim Walz And Keith Ellison Win Statewide
Omar had the backing of the bulk of the progressive and grassroots groups that weighed in on the race, including MoveOn; Justice Democrats; the statewide and Twin Cities chapters of Our Revolution...
Omar had the backing of the bulk of the progressive and grassroots groups that weighed in on the race, including MoveOn; Justice Democrats; the statewide and Twin Cities chapters of Our Revolution, the group that was formed from the remnants of the 2016 Bernie Sanders campaign; and CPD Action, an arm of the Center for Popular Democracy.
Read the full article here.
14 hours ago
14 hours ago