Monday, September 29, 2014

Privatization and Offender-Funded Justice

In 2010, Michelle Alexander produced her book The New Jim Crow: Mass Incarceration in the Age of Colorblindness.  One of the more startling revelations she provided involved the degree to which those who become entangled in our legal system are forced to assume a financial burden for that service.  Alexander provided these examples:

“Examples of preconviction service fees imposed throughout the United States today include jail book-in fees levied at the time of arrest, jail per diems assessed to cover the cost of pretrial detention, public defender application fees charged when someone applies for court-appointed counsel, and the bail investigation fee imposed when the court determines the likelihood of the accused appearing at trial.”

“Postconviction fees include presentence report fees, public defender recoupment fees, and fees levied on convicted persons placed in a residential or work-release program.”

“Upon release, even more fees may attach, including parole or probation service fees.  Such fees are typically charged on a monthly basis during the period of supervision.”

“Florida....has added more than twenty new categories of financial obligations for criminal defendants since 1996, while eliminating most exemptions for those who cannot pay.”

Since most wealthy people escape scrutiny by law enforcement agencies, and those dumb enough to get caught find such fees a mere nuisance, Alexander viewed these charges and the associated loss of rights of citizenship as part of a scheme to keep poor blacks in a permanent lower class state.

In 2012, Tina Rosenberg highlighted the perversity of charging administrative fees to those who are indigent or rendered thus by the system itself in the New York Times: Out of Prison, Into a Vicious Circle of Debt.  Rosenberg provides us the favor of pointing out that a person could be incarcerated, found to be innocent of any crime, but could still be indebted to the court if not able to pay the fees imposed on him.

Sarah Stillman revisits these practices in a recent article in The New Yorker: Get Out of Jail, Inc.  Stillman provides the perspective of those suffering the consequences of governments trying to save expenses while outsourcing public responsibilities to for-profit corporations.

In recent decades the size of prison populations increased dramatically and created an opportunity for corporations to become a larger participant.

“The size of America’s incarcerated population more than quadrupled in the three decades since 1980, and, in time, the private sector seized an immensely lucrative opportunity; between 1990 and 2009, the number of inmates in private prisons increased seventeen-fold, and revenues for the largest private-prison firm, Corrections Corporation of America (C.C.A.), reached $1.7 billion.”

The costs involved in maintaining so many prisoners became intolerable and federal, state, and local agencies began to look for ways to lower the number of prisoners.

“Some investors have begun to turn their attention to extra-carceral institutions, such as private halfway houses, electronic monitoring, ‘civil commitment’ centers for sex offenders, and for-profit residential treatment facilities. Private-prison corporations themselves have begun to expand into the ‘alternatives’ industry.”

“Private-probation companies, too, have quietly taken off in recent years, often selling themselves as a cheap way to keep small-time offenders out of jail. In 2010, Judicial Correction Services (J.C.S.) made the magazine Inc.’s list of ‘the fastest growing private companies in America,’ for the third year in a row; a year later, it was acquired by Correctional Healthcare Companies, which now boasts of attending to the ‘full spectrum’ of offenders’ lives: ‘pre-custody, in custody, and post-custody’.”

This system, which Stillman refers to as “offender-funded justice,” involves court systems trying to cover their costs by charging those unlucky enough to come in contact with them fees for the services provided.  Some of these courts are outsourcing these same services to for-profit companies that get to charge the misfortunate an additional fee.  One of the responsibilities of these companies becomes the collection of these fees—a task made easier by judges willing to throw debtors into prison.

“Although debtors’ prisons were abolished by federal law in the eighteen-thirties, people across America are routinely jailed for fees and fines that they are too poor to pay. Spokesmen for the private-probation industry stress that only judges, not the firms under contract, have the authority to decide who goes to jail for nonpayment, and who counts as indigent. But private-supervision fees, which are often significantly higher than what states would charge for equivalent services (many states charge nothing at all), can add substantially to judicial fines, and….companies rely on the threat of jail time to generate collections.”

A person summoned to court for nonpayment of a traffic ticket could be placed on probation and turned over to one of these private companies.  The fine will have to be paid, a monthly probation charge will have to be paid, and the company’s monthly service charge will have to be paid.  If the persons did not have the funds to pay the ticket in the first place, how are they going to cover all these additional charges as well?  The indigent are under intense pressure to either take extreme measures to acquire money or to drop out of society and go into hiding.

Stillman cites the results of a study by Foster Cook, head of Treatment Alternatives for Safer Communities at the University of Alabama.

“Cook recently conducted a survey of more than sixty private probationers after he noticed that many of his clients in addiction programs were “buried” under court debts that often created more problems for taxpayers than they solved. The vast majority of respondents had forgone rent, groceries, medicine, or all three to pay fees to private-probation firms. A third had committed an illegal act, such as selling drugs or stealing, to make their payments.”

In the above example, both the court and the probation company have the opportunity to make a profit by doing essentially nothing except commit some poor soul to probation.  This is the type of situation just perfect for breeding corruption.

“Not long ago, in Tennessee, a judge was sent to prison after an F.B.I. probe found him taking kickbacks estimated to be as large as a hundred thousand dollars from a private-probation company and a driving school in exchange for sending them offenders.”

“In Idaho, a decade-long experiment with private probation collapsed following complaints of profiteering and illegal fees.”

“This past February, Human Rights Watch published a report that catalogued problems endemic in private-probation services across the South, including ‘easy opportunities for corruption,’ the wielding of ‘coercive power’ against debtors and their families, and ‘Kafkaesque’ electronic-monitoring sentences for minor crimes, which subject offenders to steep surveillance fees. The report found that these problems were ‘not a consequence of probation privatization per se’ but what comes to pass when ‘public officials allow probation companies to profit by extracting fees directly from probationers, and then fail to exercise the kind of oversight needed to protect probationers from abusive and extortionate practices’.”

Stillman documents abuses throughout this “extra-carceral” economy, but her primary example is that of Harriet Cleveland of Montgomery, Alabama who was placed on probation when she was unable to pay fines for citations involving her automobile.

“When she was unable to pay her fines, a judge sentenced her to two years of probation with Judicial Correction Services, a for-profit company; she would owe J.C.S. the sum of two hundred dollars a month, with forty of it going toward a ‘supervision’ fee.”

She could not afford to keep up with the payments and fell behind.  Her debt mounted and her period of probation went on indefinitely.  Cleveland spent years under the threat of being jailed.

“Cleveland told me that when she was first assigned to J.C.S. her probation officer had taken down the names and phone numbers of her family members. As she fell behind on her payments, the company began calling Cleveland’s relatives—her daughter, her estranged mother, her daughter’s paternal grandmother—to tell them that if she couldn’t come up with the money she would be sent to “sit out” her probation debts in jail.”

The amount she owed had ballooned higher than she could have believed.

“In early 2012, she turned over nearly all her income-tax rebate—some two thousand dollars—to J.C.S. But by that summer her total court costs and fines had soared from hundreds of dollars incurred by the initial tickets to $4,713, including more than a thousand dollars in private-probation fees.”

The system apparently decided they were not earning enough from her.

“Last June, Cleveland received a letter from the District Attorney’s office. ‘Balance Due: $2,714,’ it warned. ‘You MUST pay this amount in full . . . or you may be ARRESTED.’ Cleveland noticed that the amount she owed was far higher than the original fees she had chipped away at for more than two years, and she called the D.A.’s office, desperate for an explanation. Only much later did she learn that the D.A. had nearly doubled her fines because of her failure to pay, adding a thirty-per-cent collection fee, a warrant fee, and other surcharges.”

Cleveland was placed in a cell in Montgomery’s city jail and told she would spend a month there unless she paid $1700.  Stillman tells us this policy is known as “Pay or Stay.”

Fortunately, even in Alabama there is a hope for justice.

“Early in her jail stay, she was visited by an attorney named Sara Zampierin and a researcher named Jacob Denney, both with the Southern Poverty Law Center (SPLC). At the courthouse on the day of her sentencing, Denney had approached Cleveland’s eldest son and told him that Cleveland’s arrest appeared to violate state law and the equal-protection clause of the Fourteenth Amendment. His organization could help the family try to get her out of jail.”

Cleveland was told that it was illegal to revoke probation because of indigence.

“….a habeas petition filed by the attorney Sara Zampierin and her team got Harriet Cleveland freed from jail, and the process of discovery in her suit against the court yielded some surprises. It turned out that Cleveland had actually paid one of the tickets that had landed her in jail; sloppy accounting is commonplace in understaffed courts. What’s more, J.C.S. officers had sometimes placed Cleveland’s payments directly into its corporate accounts, with hardly anything applied toward her actual court costs. According to internal company records, Cleveland once made a two-hundred-dollar payment that went straight to J.C.S.”

Cleveland’s case had not been resolved when Stillman’s article went to press.  However, SPLC recently published the results under the title SPLC lawsuit closes debtors’ prison in Alabama capital.

“Cleveland spent 10 days in jail before SPLC lawyers got her released. The SPLC then filed suit on her behalf, alleging the Montgomery Municipal Court’s practices were unconstitutional. The SPLC and Equal Justice Under Law, a civil rights organization, announced a settlement agreement today with the city of Montgomery that will help Cleveland and change the city’s practices so that no one else will suffer her fate again. The agreement is pending final approval by the U.S. District Court for the Middle District of Alabama Northern Division.”

“The city will now determine if a person is indigent and will not jail anyone who cannot afford to pay. For people who are indigent, the municipal court will create lower payment plans of $25 a month or give the option of performing community service until the debt is paid. Equally significant, before the agreement was reached, the city decided not to renew its contract with JCS, which subsequently closed its Montgomery office.”

The abomination known as “offender-funded justice” is the natural outcome of situations in which those with political power refuse to pay enough taxes to make society functional, and those in political power provide license to for-profit companies to harvest funds from the poor.

Privatization is inevitably a scheme to extract funds from the less wealthy and to transfer those funds to the more wealthy.

Wednesday, September 24, 2014

Are We Living Longer, or Just Dying More Slowly?

Humans are clearly living longer today than they did a century ago.  Given continuing advances in medical knowledge and technologies, it is easy to conclude that life expectancies can and will continue to increase.  Gregg Easterbrook considers that notion in an interesting article in The Atlantic: What Happens When We All Live to 100?  He performs extrapolations of current and past data to suggest what might be possible.

“Life expectancy at birth has risen steadily in the United States.  If it continues to increase at its average historic rate—an aggressive assumption—it would reach 100 in 2084.  At the average rate of increase since 2000, which has been slower, life expectancy at birth would be 91 in 2084.”

Extrapolating the data as done in the chart is aggressive.  Easterbrook seems to be philosophically aligned with such an optimistic projection, but he provides a balanced discussion of why this future may or may not come to pass.   For the pro-argument he quotes James Vaupel, the founder of Germany’s Max Planck Institute for Demographic Research.  For the con-argument he turns to Jay Olshansky, a professor of public health at the University of Illinois at Chicago.

“In 2002, Vaupel published an influential article in Science documenting the eerily linear rise in life expectancy since 1840. Controversially, Vaupel concluded that ‘reductions in mortality should not be seen as a disconnected sequence of unrepeatable revolutions but rather as a regular stream of continuing progress’.  No specific development or discovery has caused the rise: improvements in nutrition, public health, sanitation, and medical knowledge all have helped, but the operative impetus has been the ‘stream of continuing progress’.”

“Vaupel called it a ‘reasonable scenario’ that increases will continue at least until life expectancy at birth surpasses 100. His views haven’t changed. ‘The data still support the conclusions of the 2002 paper. Linear rise in life expectancy has continued,’ Vaupel told me earlier this year.”

Olshansky provides a counter argument.

“On the opposite side of this coin, Olshansky told me the rise in life expectancy will ‘hit a wall soon, if it hasn’t already.’ He noted, ‘Most of the 20th-century gains in longevity came from reduced infant mortality, and those were onetime gains.’ Infant mortality in the United States trails some other nations’, but has dropped so much—down to one in 170—that little room for improvement remains.”

“’….Changes in medicine or lifestyle that extend the lives of the old don’t add much to the numbers.’ Olshansky calculates that if cancer were eliminated, American life expectancy would rise by only three years, because a host of other chronic fatal diseases are waiting to take its place. He thinks the 21st century will see the average life span extend ‘another 10 years or so,’ with a bonus of more health span. Then the increase will slow noticeably, or stop.”

Easterbrook seems to sense that a game-changer is required if his centenarian future is to ever arrive.  Some people believe that many of the debilitating and life-threatening chronic diseases are, in fact, aided and abetted by the aging process itself.  If the body’s mechanisms could be controlled by drugs or other treatments, the impact of these conditions might be considerably diminished.

“Aging brings with it, of course, senescence. Cellular senescence, a subset of the overall phenomenon, is a subject of fascination in longevity research.”

“The tissues and organs that make up our bodies are prone to injury, and the cells are prone to malfunctions, cancer being the most prominent. When an injury must be healed, or cancerous tissue that is dividing must be stopped, nearby cells transmit chemical signals that trigger the repair of injured cells or the death of malignant ones. (Obviously this is a simplification.) In the young, the system works pretty well. But as cells turn senescent, they begin to send out false positives. The body’s healing ability falters as excess production of the repair signal leads to persistent inflammation, which is the foundation of heart disease, Alzheimer’s, arthritis, and other chronic maladies associated with the passage of time.”

Much of Easterbrook’s article is devoted to assessing progress in research aimed at controlling the body’s aging mechanisms.

In the same issue of The Atlantic as Easterbrook’s article was another that looked at aging from a different perspective and suggested that living until 100 is neither likely nor desirable.  Ezekiel J. Emanuel (yes, one of the Emanuel brothers) provided this intriguing title: Why I Hope to Die at 75.  He provides this lede:

“An argument that society and families—and you—will be better off if nature takes its course swiftly and promptly”

Emanuel’s decision that there is an age beyond which it is no longer wise to take measures to extend one’s life is interesting in itself, but will have to be saved for discussion at another time.  What is of interest here is his conclusion that what we are observing in recent years is not an extension in living, but an extension of the dying process.  Life extension is not adding to the quality of life.

“Since 1960….increases in longevity have been achieved mainly by extending the lives of people over 60. Rather than saving more young people, we are stretching out old age.”

“The American immortal desperately wants to believe in the “compression of morbidity.” Developed in 1980 by James F. Fries, now a professor emeritus of medicine at Stanford, this theory postulates that as we extend our life spans into the 80s and 90s, we will be living healthier lives—more time before we have disabilities, and fewer disabilities overall. The claim is that with longer life, an ever smaller proportion of our lives will be spent in a state of decline.”

“Compression of morbidity is a quintessentially American idea. It tells us exactly what we want to believe: that we will live longer lives and then abruptly die with hardly any aches, pains, or physical deterioration—the morbidity traditionally associated with growing old. It promises a kind of fountain of youth until the ever-receding time of death. It is this dream—or fantasy—that drives the American immortal and has fueled interest and investment in regenerative medicine and replacement organs.”

To support the claim that compression of morbidity is a fantasy, Emanuel describes results obtained by Eileen M. Crimmins and Hiram Beltran-Sanchez: Mortality and Morbidity Trends: Is There Compression of Morbidity?  Their paper appeared in 2011.  Two of the tables summarizing their data are reproduced below.  There is much of interest here.

Here is Emanuel’s summary of the study results:

“….using data from the National Health Interview Survey, Eileen Crimmins, a researcher at the University of Southern California, and a colleague assessed physical functioning in adults, analyzing whether people could walk a quarter of a mile; climb 10 stairs; stand or sit for two hours; and stand up, bend, or kneel without using special equipment. The results show that as people age, there is a progressive erosion of physical functioning. More important, Crimmins found that between 1998 and 2006, the loss of functional mobility in the elderly increased. In 1998, about 28 percent of American men 80 and older had a functional limitation; by 2006, that figure was nearly 42 percent. And for women the result was even worse: more than half of women 80 and older had a functional limitation. Crimmins’s conclusion: There was an ‘increase in the life expectancy with disease and a decrease in the years without disease. The same is true for functioning loss, an increase in expected years unable to function’.”

And here is the more succinct summary:

“As Crimmins puts it, over the past 50 years, health care hasn’t slowed the aging process so much as it has slowed the dying process.”

It is worth spending a few moments examining the data in the tables above.  We seem to be living longer, but we are getting sick earlier and losing physical functionality earlier—and this is apparent in all age groups, not just old people.  As we continue to pump chemicals—both environmental and medical—into our bodies, change the nature of the food we eat, and alter the bacterial composition our bodies depend on, we find that we are no longer the animal that evolution designed.  Perhaps therein resides the reason(s) why we find ourselves becoming less healthy.  Perhaps we should understand what we have already done to ourselves before we inflict on ourselves another grand experiment with unknown consequences.

Friday, September 19, 2014

Rich Nations: Private Wealth, Public Poverty

Traditionally, when a nation was in need of additional funds it had the option of either increasing taxes or borrowing the money.  Since those who possessed enough money to make the necessary contributions also possessed enough influence to shield themselves from onerous taxes, the only viable taxation option was to take the money from those who had little if any.  This was not very efficient and often led to public unrest.  A more efficient method of extracting money from the non-wealthy was to practice “austerity”—by which money was taken from the non-wealthy in the form of services no longer rendered.  Consequently, the general approach to deficit financing was to borrow money from the wealthy and limit services provided to the poor in order to pay the wealthy back.

Ownership of government bonds was a lucrative investment and provided a large and secure income for many wealthy European families in the era leading up to World War I.  The two wars and the Great Depression caused a great deal of economic havoc and private wealth fell during that period.  In recent decades, in spite of the changes in the nature of wealth, private wealth has been growing more or less steadily and seems headed back to prewar values.

Data on the evolution of wealth is one of Thomas Pinketty’s major contributions in Capital in the Twenty-First Century.  He provides this history of private wealth versus government wealth for Europe as a whole and for the United States.

Note that in Piketty’s terminology, capital is anything that can be bought or sold, including real property and financial instruments, and is therefore equivalent to wealth.  He chooses to express values as a percentage of national income, a quantity that is closely related to GDP, but not exactly equivalent.  Around 1970, private wealth began to increase steadily in both the United States and Europe.  The recent financial disaster put a dent in United States wealth, but by 2010 it had leveled off and begun to rise again.  Growth of private wealth in Europe continued throughout that same period.

Public wealth consists of government assets minus government debts.  Piketty’s data indicate that most nations have public assets about equivalent to national income.  As public debt has risen in all rich countries, the net public wealth has approached zero.

Piketty provides this assessment of the situation:

“….with public debt in the rich countries now averaging about one year of national income (or 90 percent of GDP), the developed world is currently indebted at a level not seen since 1945.  Although the emerging economies are poorer than the rich ones in both income and capital, their public debt is much lower (around 30 percent of GDP on average).  This shows that the question of public debt is a question of the distribution of wealth, between public and private actors in particular, and not a question of absolute wealth.  The rich world is rich, but the governments of the rich world are poor.  Europe is the most extreme case: it has both the highest level of private wealth in the world and the greatest difficulty in resolving its public debt crisis—a strange paradox.”

Piketty provides the following chart to support the notion that rich countries are getting richer in terms of private wealth.

This legend was provided for the chart:

“Private capital is worth between 2 and 3.5 years of national income in rich countries in 1970, and between 4 and 7 years of national income in 2010.”

It is interesting to note that Italy has the greatest private wealth of all even though it is considered one of the weakest economies in Europe.

“When we look at all the available data today, what is most striking is that national wealth in Europe has never been so high.  To be sure, net public wealth is virtually zero, but net private wealth is so high that the sum of the two is as great as it has been in a century.  Hence the idea that we are about to bequeath a shameful burden of debt to our children and grandchildren and that we ought to wear sackcloth and ashes and beg for forgiveness makes no sense.”

National debt has accumulated as a result of a persistent failure by those who have been accumulating wealth to pay their share of government expenses.  Piketty’s preferred solution, if debt must be retired, is a tax on wealth (in Europe, national debt is about 15 percent of private wealth).  A modest progressive tax on wealth that would only slow its accumulation a bit would quickly bring down debt levels.

His second best option is to encourage a bit of inflation.  Historically, this has been a very effective way to manage public debt, but it is not without negative consequences.

The least efficient and least just approach is the one that nations have actually been taking: austerity.  Austerity tends to protect the wealthy, damage the economy, and weigh most heavily on those with little or no wealth.

Tuesday, September 16, 2014

Elite Education and Grade Expectations: Everyone a Winner

Many parents who can afford private education for their children spend enormous amounts insuring their children get placed in the best schools.  This behavior is often interpreted as driving their children to excellence in performance so they will be truly exceptional as adults.  There are a number of observers who have suggested an alternate interpretation for this behavior.  The parents may not be driven so much by the desire for success for their children as by the fear of failure.  In a society that believes the myth that the United States is a meritocracy, then it is embarrassing for an economically successful parent to raise a child that does not merit an equivalent place in the economy.  Such an occurrence might call into question the qualifications of the parent.

In the latter interpretation of the elite educational path, children receive the support of tutors, test preparation specialists, and teachers who realize their jobs depend on the performance of the students they teach.  In addition, they are enmeshed in a peer population designed to keep them from drifting away from the preordained path.  The ultimate target is entry into an elite university.  Are our most renowned and most expensive universities dedicated to producing the best educational experience and allowing exceptional students to demonstrate their capabilities in competition with other excellent students—or are they just the terminus of an extensive support system focused on excluding failure?

Support for the failure-avoidance viewpoint comes from data collected by Stuart Rojstaczer who has been tracking grade inflation in US schools for a number of years.  Grade inflation has occurred throughout higher education, but it is particularly evident in the more elite schools.  Why is it that everyone now seems to get a good grade?

An article in The Economist provided the results of Rojstaczer’s study of the trends in average grades in Ivy League schools.

Most of these schools do not provide this data directly, so Rojstaczer must deduce his numbers from indirect sources.  The article does include this Harvard data point:

“In 1950, Mr Rojstaczer estimates, Harvard’s average grade was a C-plus. An article from 2013 in the Harvard Crimson, a student newspaper, revealed that the median grade had soared to A-minus: the most commonly awarded grade is an A.”

The article suggests this explanation for why A grades have become so common:

“Universities pump up grades because many students like it. Administrators claim that tough grading leads to rivalry and stress for students. But if that is true, why have grades at all? Brilliant students complain that, thanks to grade inflation, little distinguishes them from their so-so classmates. Employers agree. When so many students get As, it is hard to figure out who is clever and who is not.”

Consider the average grade for Princeton in the chart above.  It increases over time but then seems to stabilize at a slightly lower value in recent years.  An article by Ariel Kaminer in the New York Times carries this intriguing title: Princeton Is Proposing to End Limit on Giving A’s.  Back in 2004, Princeton tried to stem the inflation trend by imposing a limit on the number of A grades that could be issued in a given class to no more the 35%.

“….the university….drew widespread attention in 2004 when it first sought to cap grades. At the time, close to 50 percent of Princeton students were getting A-range grades in their classes. The university hoped that other colleges would follow its lead.”

As the chart above indicates, that did not happen.  What did happen is that the Princeton students became angry at having to participate in a system where the top grade indicated top performance, while students at other schools where provided the top grade for average performance.  How could that be fair?  Princeton was charging them as much money as the other schools, yet it was not providing what they thought they had paid for.

Kaminer tells us that Princeton is considering ending its policy of trying to provide clear differentiation between students on the basis of academic performance.  Apparently, that is no longer the role of an elite university.

What kind of a system of higher education are we running when anything less than an A is considered failure?  Schools are supposed to put pressure on students to perform to the best of their abilities.  Instead, we have students putting pressure on schools to provide them the A grade they need to graduate certified as “worthy of earning a lot of money.”

What if similar pressures exist at the high schools that feed our elite universities?  What about the grammar schools that feed our elite high schools?  Are we providing advantaged students with floors below which they will not be allowed to fall?

Are we managing a meritocracy—or are we propagating an aristocracy?

Sunday, September 14, 2014

Fast-Food Workers: Seeking Dignity and a Higher Minimum Wage

Fast-food workers have been demonstrating for higher wages and garnering considerable attention in the process.  They are pushing for the implementation of a $15 minimum wage and the ability to have union representation.  Before considering the implications of these demands for the people involved, we will take a slight diversion to place the concept of a minimum wage in its historical perspective.

A minimum wage has become an important economic parameter, and, more significantly, a measure of the degree to which a given society views the importance of equality of opportunity.  Developed countries either define one with the intent of insuring all workers can earn a wage that ensures some quality of life, or they allow representatives of labor to negotiate wages with representatives of employers.  Each society makes its own decision on how to address this issue.  That is an important point to recognize, because it is a social decision to be made, not one based on economic theories.  And the decision each country makes seem to have little effect on the economic strength of that country.

For generations in the United States, a wealthy elite has been propagating, through think tanks, media, and captured academics with contrived economic theories, the myth that unfettered markets will price labor at its appropriate value.  The reality is that labor will be priced as low as society allows it to be priced.  The intention of this plutocratic offensive is to convince the population that the wealthy are meritorious and deserve their remuneration.  Sometimes left implicit, but often stated explicitly, is the associated conclusion that low-wage workers deserve their minimum wage jobs.

Thomas Piketty has performed the most extensive study of the evolution of income and wealth in Capital in the Twenty-First Century.  On the subject of wages he concludes:

“….the main problem with the theory of marginal productivity is quite simply that it fails to explain the diversity of wage distributions we observe in different countries at different times.  In order to understand the dynamics of wage inequality, we must introduce other factors, such as the institutions and rules that govern the operation of the labor market in each society.  To an even greater extent than other markets, the labor market is not a mathematical abstraction whose workings are entirely determined by natural and immutable mechanisms and implacable technological forces: it is a social construct based on specific rules and compromises.”

The fast-food industry is dominated by a few large corporations that have many jobs to offer.  Given that the work is not highly skilled, there is always a supply of labor.  Historically, when operating in that situation, corporations have driven wages as low as possible to increase profits.

“….if a small group of employers occupies a monopsony position in a local labor market (meaning they are virtually the only source of employment….), they will probably try to exploit their advantage by lowering wages as much as possible, possibly even below the marginal productivity of the workers.  Under such conditions, imposing a minimum wage may not only be just but also efficient, in the sense that the increase in wages may move the economy closer to the competitive equilibrium and increase the level of employment.  This theoretical model, based on imperfect competition, is the clearest justification for the existence of a minimum wage: the goal is to make sure that no employer can exploit his competitive advantage beyond a certain limit.”

Piketty references a study which indicates that the minimum wage in the United States had fallen so low that raising it would not cause unemployment, but, in fact, could cause an increase in employment.

The minimum wage has become the floor to which all wages fall unless workers possess some economic leverage or happen to encounter an enlightened business operation.  If the minimum wage does not change over time, then, no matter what occurs in the economy, the lowest paid workers will see no improvement.  If the minimum wage is raised, then a large number of workers are directly affected, and an even larger number affected indirectly.  Powerful interests in our country argue that raising the minimum wage will be harmful to the workers involved because some will lose their jobs.  When they lose that argument, they often claim that an increase is not worth the trouble because so few are affected.  This claim is specious.  All hourly workers rate their salary against the minimum wage and see the separation between their wage and the minimum as an indication of their greater economic value.  If the minimum wage was raised to $15, this would initiate a large wave of pay increases throughout the economy.

When fast-food workers demand higher wages for themselves, they are forcing us to consider—or reconsider—what kind of society we want to be.  Let us view their situation in that context.

William Finnegan provides us with a look at what life is like for a fast-food worker in an article titled Dignity that appeared in The New Yorker.  He builds his essay around the life of a McDonald’s employee, Arisleyda Tapia who came to New York City after working as a nurse in the Dominican Republic.  The minimum wage in New York City is $8.  After eight years on the job she has worked her salary all the way up to $8.35.  Tapia also has a child to support.  In fact, she is quite representative of the typical fast-food worker.

“The fast-food giants have seemed clumsy, and wrong-footed by the surge of protest. Their traditional defense of miserable pay—that most of their employees are young, part time, just working for gas money, really—has grown threadbare. Most of their employees today are adults—median age twenty-eight. More than a quarter have children. Particularly since the onset of the global recession of 2009, McJobs are often the only jobs available. And seventy per cent of fast-food workers are indeed part time, working fewer than forty hours a week.”

What exactly is the reason that fast-food employers choose to force their people to work less than forty hours per week?  Finnegan does not say.  Clearly, having to pay overtime would not be desirable, but why limit employees to thirty or thirty-five hours; and why have a system in which the hourly allocation is unknown from week-to-week?  A worker’s hours can be cut for any reason or for no reason.  One might begin to believe that this procedure is intended to keep the workers weak and demoralized.  Perhaps this is one reason Finnegan chose the title Dignity for his essay.  The workers want a higher minimum wage in order to earn more money; they want union representation in order to gain some respect.

It is often claimed that higher wages would cause an unacceptable increase in prices.  Actually, an outfit like McDonald’s, with its vast supply chains and food factories is little affected by the labor costs of the workers in it outlets.  Finnegan disposes of that concern with this insight:

“The fast-food chains insist that if they were to pay their employees more they would have to raise menu prices. Their wages are “competitive.” But in Denmark McDonald’s workers over the age of eighteen earn more than twenty dollars an hour—they are also unionized—and the price of a Big Mac is only thirty-five cents more than it is in the United States.”

It is also pointed out that fast-food companies can pay reasonable wages, provide benefits, and be quite successful.

“The starting wage at In-N-Out Burger, which is based in Southern California, and has two hundred and ninety-five restaurants in California and the Southwest, is eleven dollars. Full-time workers receive a complete benefits package, including life insurance—and the burgers are cheap and good.”

McDonald’s has always tried to hide behind its franchisees, claiming that any regulation that would apply to it generally would cause undo harm to the small businessmen it deals with.

“The space between franchisees and a parent company is nowhere more opaque than at McDonald’s, where the price of admission is exceptionally high: applicants must show at least seven hundred and fifty thousand dollars of unborrowed money even to be considered for a franchise, and the investment costs go up from there. Very few franchisees fail to observe the code of omertà that governs their relationship with the corporation.”

The owner of the McDonald’s where Tapia works is named Bruce Colley.

“Colley owns twenty-nine McDonald’s franchises, including nineteen in Manhattan. He grew up in Westchester County, and graduated from the Trinity Pawling School and Cornell. When he joined the family business, in 1980, his father, Dean, owned more than a hundred McDonald’s franchises in the Northeast. Dean was master of foxhounds of the Golden’s Bridge (New York) Hounds. Bruce is a polo player. His net worth is not a matter of public record.”

It would be a mistake to view McDonald’s as a collection of mom-and-pop operations.

McDonald’s controversial practices may be coming to an end.

“In March, seven class-action lawsuits were filed against the company in three states—California, Michigan, and New York—alleging wage theft and other violations of labor law. In late July, the general counsel of the National Labor Relations Board ruled, in connection with another set of complaints, that McDonald’s is a “joint employer” with its franchisees. The corporation exercises, through its standard contract, the most elaborate possible control over virtually every aspect of its franchisees’ operations, and the pay and the treatment of workers are very largely determined by that control. Indeed, the lawsuits allege that the crew-scheduling software that McDonald’s franchisees are required to use leads directly to the cost-cutting practices that amount to wage theft.”

Finnegan also points out that the low-wage fast-food model extracts subsidies from taxpayers to support corporate profits.

“A recent study by researchers at the University of California-Berkeley and the University of Illinois at Urbana-Champaign found that fifty-two per cent of fast-food workers are on some form of public assistance.”

“The Berkeley-University of Illinois study, commissioned by Fast Food Forward, found that American fast-food workers receive almost seven billion dollars a year in public assistance. That’s a direct taxpayer subsidy, the activists argue, for the fast-food industry.”

The demonstrations by the fast-food workers are subsidized by S.E.I.U., and they are having effects.  The union recognizes that that the fast-food workforce is approaching four million in number, and unions have to be involved somehow, even if the demand for a new minimum wage does not directly involve unionization.

“The modern American labor movement rose out of the struggle over the eight-hour day. Mary Kay Henry, the president of the Service Employees International Union, told me, ‘This fight for fifteen is growing way beyond fast food. It’s getting to be what the eight-hour day was in the twentieth century’.”

The increased focus on the shortcomings of the current national minimum wage has led a number of states and localities to boost their own requirements.  Seattle is already moving forward with a plan to increase its minimum wage to $15 over the next few years.

“Mary Kay Henry told me that the S.E.I.U. is supporting the movement ‘because it helps our members.’ She said that ‘6.5 million workers have already had their wages increased owing to minimum-wage increases’ driven by fast-food activism.”

McDonald’s, and other corporations of that ilk, are among the troops of the plutocratic offensive, fighting against almost all social advances and against any expansion of workers’ rights.

“Sensitive to the beating that their brands are taking in the escalating confrontation with employees, the fast-food giants have been leaving the hardball response to their lobby, the National Restaurant Association. ‘The other N.R.A.,’ as it is known, is an enormous organization, with nearly half a million member businesses, but its strategic thinking seems to be dominated by the major chains. It has fought minimum-wage legislation, at every level of government, for decades. It has fought paid-sick-leave laws, the Affordable Care Act, worker-safety regulations, restrictions on the marketing of junk food to children, menu-labelling requirements, and a variety of public-health measures, such as limits on sugar, sodium, and trans fats.”

An issue and a cause have arisen that have sufficient public support that perhaps the plutocratic forces can be beaten back—at least this once.  Supporting the drive for a higher minimum wage is, in effect, a vote in favor of a more equitable society.

Support the cause!

Monday, September 8, 2014

Learning to Live with Our Pigs: An Omnivore’s Contradiction?

Many criticisms have been written about the modern methods of animal agriculture in which pigs, cows, chickens, and even fish, are used and misused in the attempt to extract the maximum amount of output from their bodies.  Perhaps the most complete picture is provided by Philip Lymbery and Isabel Oakeshott in their book Farmageddon: The True Cost of Cheap Meat.  Like most authors, they focus on the suffering of the animals under these industrial processes, arguing that traditional agricultural methods are both more humane and more sustainable.  In order to make the strongest case against these practices they also survey the environmental and human health hazards that have arisen.  These latter issues, coupled with that of sustainability, produce, perhaps, their strongest case.

If one wished to evoke sympathy for animals based on the degree of mistreatment, chickens would probably be the best candidate.  If the strategy is to pick the animal most likely to elicit sympathy from humans, then the pig is the likely candidate.  Pigs will generally have their tails cut off so more of them can be squeezed into a small space where most will spend the remainder of their short lives being stuffed with food and chemicals with nothing to do but digest and defecate until they are led to slaughter.

Thousands of pigs being fed in this manner create enormous amounts of manure.  There is no good way to dispose of mountains of excrement.  Often they are spread on fields under the guise of fertilization, but the net result is that much of the muck enters our water systems: rivers, streams, lakes, oceans, and underground reservoirs.  The ramifications of this pollution are serious enough to argue for less harmful approaches.  One could also argue that closely packed animals wallowing in their filth provide an excellent mechanism for generating diseases.  Remember swine flu?

Our desire for pig meat, as well as that for chicken, beef, and fish, is a problem.  It requires about four times as much grain to provide a modern meat-laden diet as it does to provide a living diet based on consuming the grain directly (It takes about 3.5 pounds of grain to add a pound of meat to a pig).  With billions more people expecting to move up the food chain and consume more of that wonderful meat we have a problem.  There is only so much land and water, and only so much pollution and environmental degradation that can absorbed.  Something has to change.

If one were to ask Lymbery and Oakeshott what they consider to be “the omnivore’s contradiction” they might suggest that a contradiction lies in the fact that we once had an agricultural system in which we raised plants for human consumption and left animals to eat things that humans did not want, including our waste products.  Now, in the name of efficiency, we feed our animals human food in the hope that a little of that will come back to us in the form of meat.  The appropriate solution for these authors, and many others who have addressed the problem, is to revert to more sustainable agricultural practices.  This might lower the supply of meat and increase the price, but at least the planet will be saved—and the animals would be much happier.

There are others who view this approach with disdain and suggest that it is absurd to worry about the comfort and happiness of animals while at the same time planning to kill them for their meat; therein resides “the omnivores contradiction”—a play on the title of Michael Pollan’s popular book The Omnivore’s Dilemma.  James McWilliams presents this view in an article in The American Scholar where he addresses the question How Can We Raise Them Humanely and Then Butcher Them? He argues that veganism is the only path for those who are truly concerned about animal welfare and the environment.

“Research shows that veganism, which obviates the inherent waste involved in growing the grains used to fatten animals for food in conventional systems, is seven times more energy efficient than eating meat and, if embraced globally, could reduce greenhouse gas emissions from conventional agriculture by 94 percent. Any pretext to explore meat eating’s moral underpinnings—and possibly land upon an excuse for pursuing a plant-based diet as a viable goal—would be consistent with the movement’s anticorporate, ecologically driven mission.”

“But with rare exception, those in the big, lumpy tent have thrown down a red carpet for ‘ethical butchers’ while generally dismissing animal rights advocates as smug ascetics (which they can be) and crazed activists (ditto) who are driven more by sappy sentiment than rock-ribbed reason. It’s an easy move to make. But the problem with this dismissal—and the overall refusal to address the ethics of killing animals for food—is that it potentially anchors the Food Movement’s admirable goals in the shifting sands of an unresolved hypocrisy. Let’s call it the ‘omnivore’s contradiction’.”

McWilliams grants that carnivores can make compelling arguments for their choices, but accuses them of avoiding the clear moral contradiction inherent in their position.

“Conscientious carnivores will argue that we can justify eating animals because humans evolved to do so (the shape of our teeth proves it); that if we did not eat happy farm animals, they’d never have been born to become happy in the first place; that all is fine if an animal lives well and is ‘killed with respect’; that we need to recycle animals through the agricultural system to keep the soil healthy; that animals eat animals; and that in nature, it’s the survival of species and not of individuals that matters most. These arguments create room for a productive conversation. But none of them carry real weight until the Food Movement resolves the contradiction….How do you ethically justify both respecting and killing a sentient animal?”

It seems that there may be a bit a “vegan contradiction” if one chooses that diet for moral reasons. The assumption is explicit that carnivores are somehow causing unnecessary grief and suffering to pigs.  That may not be an accurate characterization.

It is useful to think of a compact having been formed between humans and the animals that we have domesticated.  In effect, humans have agreed to care for and protect animals up to a certain age or size.  In return, the animals will be available as a food source.  Is this a good deal for the animals? Consider the pig.  Before the arrival of humans, a pig would have been just another entry in that hierarchy of flesh-eating animals.  Before humans, there would have been a number of animals large enough to prey on a full-grown pig.  It seems that wherever humans cropped up, outside of the African homeland, large mammals soon disappeared.  Mankind presumably did the pig the favor of eliminating any animals that spent their days looking for pigs to eat.

An animal the size of a pig with no predators will grow in population until it runs out of food or acquires another predator.  Even if humans had chosen to be herbivores, once they settled into stationary agriculture, pigs would have become an intolerable pest.  A few pigs can do a lot of damage to a planted field.  Humans would have inevitably become a predator.  Pigs would have had to be hunted and killed even if their meat was not the motivation.

The environment in which pigs evolved no longer exists.  In many parts of the world, they are no longer part of the ecology.  Feral pigs are now considered an “invasive” species.  The Global Invasive Species Database provides this description:

"Sus scrofa (feral pigs) are escaped or released domestic animals which have been introduced to many parts of the world. They damage crops, stock and property, and transmit many diseases such as Leptospirosis and Foot and Mouth disease. Rooting pigs dig up large areas of native vegetation and spread weeds, disrupting ecological processes such as succession and species composition. Sus scrofa are omnivorous and their diet can include juvenile land tortoises, sea turtles, sea birds, endemic reptiles and macro-invertebrates. Management of Sus scrofa is complicated by the fact that complete eradication is often not acceptable to communities that value feral pigs for hunting and food.”

They are described as ecological interlopers who could (and should) be eradicated if only hunters didn’t enjoy the sport of killing them themselves.

We created the domestic pig, and now we own it.  If we are not going to use it for food what are we going to do with it?  This source suggests there are about a billion pigs involved in agriculture.  There is no path by which they can be allowed to die of old age.

What we can do is make their short lives more tolerable, as suggested by Lymbery, Oakeshott, and Pollan.  We cannot undo what has been done.

Monday, September 1, 2014

MOOCs and Education: Effective or Not?

Much has been written about the faults of our system of higher education.  Many analyses conclude that the costs of attending our colleges and universities have been driven so high that capable students are unable to gain entry for financial reasons.  Proposed solutions to this dilemma often resort to technology as a means of producing a better and cheaper educational product.

David Bromwich provides his views on the state of higher education in The Hi-Tech Mess of Higher Education.  This article, ostensibly a review of Andrew Rossi’s movie, Ivory Tower, appeared in the New York Review of Books.

One of Bromwich’s topics is the rise of MOOCs (massive open online courses).  The idea is to replace many independent, and presumably inferior, classes taught by teachers in physical classrooms, with one “excellent” course available via the internet.  This course could be taken for credit by anyone willing to pay a fee, take tests, and perform whatever assignments might go with the lectures.  This would, presumably, render a large number of professors unnecessary and save schools a lot of money.

“The MOOC movement is represented in Ivory Tower by the Silicon Valley outfit Udacity. ‘Does it really make sense,’ asks a Udacity adept, ‘to have five hundred professors in five hundred different universities each teach students in a similar way?’ What you really want, he thinks, is the academic equivalent of a ‘rock star’ to project knowledge onto the screens and into the brains of students without the impediment of fellow students or a teacher’s intrusive presence in the room. ‘Maybe,’ he adds, ‘that rock star could do a little bit better job’ than the nameless small-time academics whose fame and luster the video lecturer will rightly displace.”

Bromwich is doubtful.

“That the academic star will do a better job of teaching than the local pedagogue who exactly resembles 499 others of his kind—this, in itself, is an interesting assumption at Udacity and a revealing one. Why suppose that five hundred teachers of, say, the English novel from Defoe to Joyce will all tend to teach the materials in the same way, while the MOOC lecturer will stand out because he teaches the most advanced version of the same way? Here, as in other aspects of the movement, under all the talk of variety there lurks a passion for uniformity.”

And for what kind of educational topic is it appropriate that one individual’s view should be taken as gospel to be propagated, perhaps, throughout the entire nation?

Bromwich identifies Sebastian Thrun, CEO of Udacity, as one of the “rock stars.”  Thrun is best known as an expert in robotics and artificial intelligence (AI), and was lead developer on Google’s driverless car project.  Bromwich attributes an astonishing comment to Thrun:

“We take the focus away from the professor,” says Thrun, “and put the focus back on the student.”

To which Bromwich replies:

“Pause there for a moment. The AI innovator was asked to record his lectures because he is a star. At the same time, by rendering less glamorous types redundant in thousands of classrooms, Udacity says it will ‘put the focus back on the student.’ How does that work exactly? In what educational state of nature was the ‘focus’ on the student before the teacher came and took it away? And now that Udacity has put the focus back—as if the very presence of the teacher was an aberration which the MOOC format has corrected—will the company at last render even the star redundant?”

“Still, however fanciful the conceit may be, the MOOC movement has a clear economic motive. Many universities today want to cut back drastically on the payment of classroom teachers. It is important therefore to convince us that teachers have never been the focus of real learning.”

If outfits like Udacity are to replace traditional classroom teaching, they must provide means by which students can ask questions and share their thoughts.  Traditionally this would be handled by direct teacher-student interaction or perhaps sessions run by a teaching assistant.  To replace this function with an online system may prove difficult.  An even more serious concern is that the average or sub-average student may have trouble dealing with such an online process.  It is clear that the highly motivated and the highly competent will be able to function in this environment, but what about the student population as a whole?

As it happened, San Jose State University in California gave Udacity an opportunity to try out its system.  Bromwich reports on the results.

“As things worked out in Silicon Valley, reality checked the dreams of Udacity. In 2013, the company was awarded a trial of its offerings in a contract with San Jose State University; and in July of that year, scores were posted for its spring term entry-level courses. The pass rate in elementary statistics was 50.5 percent; in college algebra, 25.4 percent; in entry-level math, 23.8 percent. Teachers have been fired en masse for results like these by administrators or politicians who would not sit for an explanation.”

A report by Carl Straumsheim provides more information on the San Jose experiment.

“San Jose State University has all but ended its experiment to offer low-cost, high-quality online education in partnership with the massive open online course provider Udacity after a year of disappointing results and growing dismay among faculty members.”

“The project, known as SJSU Plus, has been on “pause” since this summer after its three spring semester courses posted pass rates between 23.8 and 50.5 percent -- much lower than their on-campus equivalents. Although the rates rebounded over the summer, those sessions featured a vastly different student population, including some students with doctoral degrees. In comparison, the spring pilot included more at-risk students.”

State officials have soured on the project.

“At its launch in January, the project brought together Silicon Valley entrepreneurs, California Governor Jerry Brown and Timothy P. White, chancellor of the California State University System. Eleven months later, White has publicly alluded to the failure of the Udacity experiment, and Brown did not return a request for comment.”

And Mr. Thrun seems to have had a change of heart as well.  Max Chafkin provides insight into the future of Udacity in Udacity's Sebastian Thrun, Godfather Of Free Online Education, Changes Course.  It seems Thrun’s concerns extend beyond the San Jose data.

“As Thrun was being praised by [Tom] Friedman [New York Times], and pretty much everyone else, for having attracted a stunning number of students--1.6 million to date--he was obsessing over a data point that was rarely mentioned in the breathless accounts about the power of new forms of free online education: the shockingly low number of students who actually finish the classes, which is fewer than 10%. Not all of those people received a passing grade, either, meaning that for every 100 pupils who enrolled in a free course, something like five actually learned the topic. If this was an education revolution, it was a disturbingly uneven one.”

"’We were on the front pages of newspapers and magazines, and at the same time, I was realizing, we don't educate people as others wished, or as I wished. We have a lousy product,’ Thrun tells me. ‘It was a painful moment.’ Turns out he doesn't even like the term MOOC.”

Thrun appears to be changing his focus to specifically vocational topics, rather than trying to be applicable to general education as a whole.

“….a pivot that involves charging money for classes and abandoning academic disciplines in favor of more vocational-focused learning. In short, Thrun must prove that Udacity is something more than a good story.”

What is it about education that makes everyone think it is simple and easy to do it better?

Lets Talk Books And Politics - Blogged