Ellen Dannin A regular contributor to Truth-out.org. Click HERE for article archive.

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  • 20 Oct 2015 9:00 AM | Mike Lillich (Administrator)
    On October 7, 2015, the White House and the Department of Labor brought together workers, labor leaders, advocates, forward-leaning employers, Members of Congress, state and local officials and others to highlight the relationship between worker voice and a thriving middle class.

    Remarks by the President at the White House Summit on Worker Voice


    U. S. Department of Labor Blog


  • 02 Jul 2015 11:57 AM | Deleted user

    The Fair Labor Standards Act - the law that created the right to a minimum wage, overtime (time and a half) for time worked over 40 hours, and child labor protections are not just about money.


    The FLSA was enacted to share work by limiting  hours worked in a week by imposing a monetary penalty.


    Times have changed somewhat since the FLSA was enacted. But the need to give people freedom to live a life in which they can take care of their families and have time and motivation to take on the rights and responsibilities of citizenship.


    The preamble to the FLSA may be found here:



    Here is the text of the preamble setting out the reasons the FLSA was enacted.


    "(a) The Congress finds that the existence, in industries engaged in commerce or in the production of goods for commerce, of labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers

    (1) causes commerce and the channels and instrumentalities of commerce to be used to spread and perpetuate such labor conditions among the workers of the several States;

    (2) burdens commerce and the free flow of goods in commerce;

    (3) constitutes an unfair method of competition in commerce;

    (4) leads to labor disputes burdening and obstructing commerce and the free flow of goods in commerce; and

    (5) interferes with the orderly and fair marketing of goods in commerce.

    That Congress further finds that the employment of persons in domestic service in households affects commerce.


    (b) It is declared to be the policy of this chapter, through the exercise by Congress of its power to regulate commerce among the several States and with foreign nations, to correct and as rapidly as practicable to eliminate the conditions above referred to in such industries without substantially curtailing employment or earning power."


    We need to bring those policies to bear now so that all people who want to work can find remunerative work and so that people and their families can live a human, humane, and free life.

  • 04 Feb 2015 2:06 PM | Deleted user

    Ellen Dannin edannin@frii.com

    Ellen Dannin writes in the areas of labor and employment, privatization, law, and education.


    Summary: The Department of Education is creating its own college ranking system based on access, affordability and performance. How will this college ranking newcomer affect two vintage ranking systems – US News & World Report and Washington Monthly?


    Both US News & World Report and Washington Monthly rank schools, but their ranking methods have very different effects on who goes to which college.


    How the College Ranking Game Is Played


    U.S. News and World Report (USNWR) ranks many things – hospitals, health, money, careers, travel, and cars – but is best known for its college rankings. Indeed, since 1983, when the US News and World Report college ranking system was created, it has heavily influenced who applies to which schools and the behavior of colleges.


    For example, USNWR’s rankings have created financial incentives for colleges to offer “merit” scholarships to students who can actually afford to go to college. The goal is to persuade students whose grade point averages and test scores will raise a college’s rank to accept the college’s offer.


    These merit scholarships have many pernicious effects. Giving scholarships to students who can afford to attend a college means less money to give applicants need-based scholarships. That financial gap is met by raising tuition. As this cycle continues, the cost of college increases.


    The Washington Monthly’s Alternate Ranking System


    In 2001, the Washington Monthly (WM) began responding to USNWR’s college rankings by exposing USWNR’s pernicious effects on college education. (More on that subject at this link.)* WM has repeatedly pointed out that USNWR’s rankings fail to assess the quality of education offered by the colleges it assesses.


    The public should react to these failures by disqualifying USNWR from continuing to engage in this game that benefits only USNWR. Indeed, given that private and public colleges depend on public money for funding, the public deserves to know how that money is being spent.


    WM has repeatedly pointed out that


    there are no numbers, no studies, no objective measurements. In a Washington Monthly survey of 50 randomly selected research-university Web sites, only 12 percent clearly posted the six-year graduation rate, the most basic statistical measure of effectiveness. Even fewer offered information about student satisfaction with teaching.


    Without solid information on what they will learn, students must make choices based on geography, particular programs, or reputation. . . .


    In 2001, in addition to WMs initial essay criticizing USNWR’s rankings, WM created lists of colleges that illustrated the article’s criticism. The lists included  the“Top 20” and “Worst 20,” “How U.S. News’s Top Universities Fared,” “How U.S. News’s Top Liberal Arts Schools Fared,” colleges’ “Peace Corps Enrollment,” and “ROTC Enrollment.”


    By 2009, Washington Monthly’s alternative ranking system was in place but has continued to evolve. The basic components of WM’s college ranking system are evidence of:


    (1) community service, based on alumni currently serving in the Peace Corps or Reserve Officer Training Corps, relative to the school’s size,


    (2) amount of federal work-study money spent on community service projects, based on quality and quantity of research; and


    (3) promotion of social mobility, as shown by the school’s commitment to educating lower-income children, based on percentage of Pell Grants.


    How Does USNWR Differ from WM?


    USNWR’s college rankings are elitist and backward looking. Its focus is on what applicants brought with them from high school – for example, grade point averages and test scores, such as the ACT or SAT. That sort of ranking method takes students as they are and does little to promote a more just and equitable society.


    In contrast, WM ranks colleges based on evidence of students’ future promise and on colleges’ support for students who show promise. Put another way, the WM rankings essentially say, “If this sort of student is accepted and is given appropriate support, they will be an asset to our society.”


    Or, more concretely,

    Imagine, then, what would happen if thousands of schools were suddenly motivated to try to boost their scores on The Washington Monthly College Rankings. They'd start enrolling greater numbers of low-income students and putting great effort into ensuring that these students graduate. They'd encourage more of their students to join the Peace Corps or the military. They'd intensify their focus on producing more Ph.D. graduates in science and engineering. And as a result, we all would benefit from a wealthier, freer, more vibrant, and democratic country


    Going to College?


    A year ago, the US Department of Education announced that it would create its own college rating system. The question is whether that rating system will follow the USNWR model or that of Washington Monthly?


    Meanwhile, the Department of Education has initiated a public discussion on revamping the college admissions process. The Department of Education has set as its goals for higher education: access, affordability, and performance.


    In fact, Washington Monthly readers will find much that is familiar in the Education Department's higher education goals. In fact, they appear to be consistent with the standards long used in the WM annual college guides and rankings.


    Unlike US News and World Report and similar guides, this one asks not what colleges can do for you, but what colleges are doing for the country. Are they educating low-income students, or just catering to the affluent? Are they improving the quality of their teaching, or ducking accountability for it? Are they trying to become more productive – and if so, why is average tuition rising faster than health care costs? Every year we lavish billions of tax dollars and other public benefits on institutions of higher learning. This guide asks: Are we getting the most for our money?


    For decades now, the Washington Monthly has published its own college rankings, while  pointing out obvious problems with USNWR's methodology:


    Unfortunately, the highly influential US News & World Report annual guide to "America's Best Colleges" pays scant attention to measures of learning or good educational practices, even as it neatly ranks colleges in long lists of the sort that Americans love. It could be a major part of the solution; instead, it's a problem.


    US News' rankings primarily register a school's wealth, reputation, and the achievement of the high-school students it admits.


    USNWR has long been aware that it uses a deeply flawed system for assessing colleges’ educational quality. In 1997, USNWR commissioned a study of its methodology by an outside organization, the National Opinion Research Center. The NORC study found, "The principal weakness of the current approach is that the weights used to combine the various measures into an overall rating lack any defensible empirical or theoretical basis."


    In contrast, the Washington Monthly based its college ranking system on goals that are likely to provide benefits beyond the students who receive that education:


    • Access, such as the percentage of students receiving Pell grants;
    • Affordability, such as average tuition, scholarships, and loan debt; and
    • Outcomes, such as graduation and transfer rates, graduate earnings, and advanced degrees of college graduates.


    Comparing Washington Monthly’s metrics on colleges with those of the U.S. Education Department shows considerable overlap. Both advocate strengthening the performance of colleges and universities in promoting access, ensuring affordability, and improving student outcomes through the design of the college ratings system.


    Both aim to:


    (1) help colleges and universities measure, benchmark, and continue to improve across the shared principles of access, affordability, and outcomes;


    (2) help students and families make informed choices about searching for and selecting a college; and


    (3) enable the incentives and accountability structure in the federal student aid program to be properly aligned to these key principles.


    (More information on the Education Department’s development of its rating system can be found on its Homeroom blog.)


    Who Owns a College Degree?


    Who benefits from that education and training? Obviously, the people who get the training and their families do, but it doesn't stop there.


    We need to think about who should pay for a college education and why. After all, a college education is among the largest expenses any of us will pay for, yet the benefits of education are not solely confined to the student. In fact, we all benefit from having well-educated doctors, construction workers, teachers and more. The number of professions for which a college education is helpful is increasing: For example, these days apprentice union construction workers receive a large part of their training in college classes.


    As I wrote in the Taunton Daily Gazette:


    In fact, the training required for the construction trades can equal or exceed the years of education required for a bachelor's degree. The lowest amount of training is two years for laborers, while the training for electricians and some other trades is 5 years or more. Electricians' education includes 900 hours of classroom work and 8000 hours of hands-on training. Just to enter the program requires completion of high school work including Algebra and passing an entry test. Even more math is required along the way. A carpenter's apprenticeship requires 4 years training with 640 hours of classroom instruction and 8000 hours of on-the-job training. Many construction workers earn at least an associates' degree during their training.


    The USNWR rankings tell a story of elitism and individualism, but it is a flawed story that ignores the many ways we collectively benefit from having an educated citizenry. The USNWR version of the story overlooks the benefits of education that flow through our communities. Since so much of the costs of post-secondary education are borne by the public, the value of the public's investments deserve to be acknowledged.


    The Beneficiaries of USNWR Rankings


    Who benefits from the USNWR rankings? We don't have all the data to make that judgment, but it is fair to say that USNWRitself - and its ever growing family of rankings - are the major beneficiaries – not the public.


    US News and World Report is a multi-platform publisher of . . . annual guidebooks on Best Colleges, Best Graduate Schools, and Best Hospitals. Focusing on Health, Money, Education, Travel, Cars, and Public Service/Opinion, US News has earned a reputation as the leading provider of service news and information that improves the quality of life of its readers. US News and World Report's signature franchises includes its News You Can Use® brand of journalism and its Best series of consumer guides that include rankings of colleges, graduate schools, hospitals, mutual funds, health plans, and more.


    For all its experience with rankings, USNWR's history with college rankings has included troubling behavior. One example: The publication has asked school officials to rate their competitor schools. First, the ratings serve no useful purpose, given that schools are regularly inspected in order to retain their accreditation. Second, the ratings were not only highly subjective; they created a temptation for schools to lower a competitor school's rank. That is, "survey respondents may rate down some schools in order to make their own school look better and schools may try to raise their score on the 'rejection rate' factor by encouraging applications from students who have virtually no chance of being admitted."


    What Education Is Needed for a Democracy?


    Students from families who have not gone to college are likely to need special guidance to understand how to get the most from a college education. On August 22, 2013, the White House presented a summary of education issues to be addressed. Among them was creating a college rating system that would help families compare schools and help taxpayers judge whether federal investments in financial aid and educational grants are worthwhile.


    While certainly helpful to college applicants, changing to such a system would, as Senator Elizabeth Warren might put it, leave blood and teeth on the floor. The question is whose blood and teeth.


    Publishing school rankings has been a big moneymaker for USNWR. On the other hand, USNWR has been willing to changing its criteria over the years. Some of the changes have been motivated by Washington Monthly’s criticism concerning USNWR college rankings as focusing in the wrong place.


    WMs ranking system advocates assessing the quality of education based on outputs – that is, its rankings are based on evidence of what current students achieve as a result of attending a specific school. Among the outputs that WM’s system assesses are number of students receiving need-basedPell grants, actual graduation rates, research expenditures, and Peace Corps and ROTC participation. Each of these factors promotes outcomes that benefit students and their communities.


    In contrast, USNWR's ratings use inputs to rank colleges. Those inputs have included factors such as high school grade point averages and admissions test scores. Those factors predict students’ grades, but they do nothing to expand students’ knowledge and skills.


    After more than a decade of Washington Monthly’s criticizing USNWR’s for using inputs for its rankings, USNWR on December 24, 2014, the USNWR announced that it was including Pell grants as a factor in its school rankings. The federal Pell Grant Program provides need-based grants to low-income students to promote access to post-secondary education.


    USNWR’s announcement stated:


    Currently, the US News Best Colleges rankings methodology incorporates outcome measures such as graduation and retention rates. We also use graduation rate performance, which measures the difference between each school's predicted graduation rate – based on characteristics of the incoming class closely linked to college completion, such as test scores and Pell Grants – and its actual graduation rate. These three outcome factors, in total, count for 30 percent of the rankings and are the most heavily weighted indicators in our methodology.


    Waiting for the Education Department's College Rating System


    If imitation is the best flattery, the Washington Monthly must be feeling flattered. The Education Department’s A New System of College Ratings – Invitation to Comment outlines  characteristics it wants in a college ranking system. In particular, it wants a system that promotes students’ ability to take advantage of educational opportunities on a more equal footing:


    The college ratings system has multiple related purposes. A critical purpose of the ratings system is to recognize institutions that are succeeding at expanding access, maintaining affordability, and ensuring strong student outcomes and setting them apart from institutions that need to improve. By shedding light on key measures, the ratings system will support greater accountability and incentivize schools to make greater progress in these areas of shared priorities, especially at serving and graduating low income and first generation students and holding down the cost of college.


    USNWR has dominated the college application process for decades. It will be interesting to see how the government's new initiative affects students' decision-making process and how colleges do or do not revise their application processes.


    Is a New Information System for College Applicants Enough?


    Whatever ranking system emerges from the Education Department's efforts, can a new ranking system overcome the effects of deep inequality in our schools? It will certainly take time to repair the damage done by the deeply corrupt US News & World Report to our education system.


    Meanwhile, there are other educational paths that lead to good jobs, without debt. Those opportunities will be examined in a follow-up story.

  • 21 Oct 2014 3:38 PM | Ellen Dannin (Administrator)

    The infrastructure investment summit held last month by the Departments of the Treasury and Transportation appears likely to provide a boost to the privatization industry, ironically, just as privatized infrastructure is filing for bankruptcy.

    Chances are, whatever you were doing on September 9, 2014, (births and deaths excluded) will not affect your life as much as that summit, "Expanding Our Nation's Infrastructure Through Innovative Financing," did.

    Living through the era of Jamie Dimon's "creative" financing might rightly make people suspicious of "innovation." Indeed, rational people might want to return to the tried and true processes and relationships that, for decades, have provided our roads, bridges and other transportation infrastructure instead of the "innovations" that now privatize the roads that were the poster children of privatization into bankruptcy, through a process that highway expert Randy Salzman recently exposed. That complex process uses the tax and bankruptcy codes and assumptions that private is always better than public to place as much as 97 percent of the costs on the public.

    Story continued at Truthout.

  • 21 Oct 2014 2:06 PM | Deleted user

    The Supreme Court kicked off its 2014-2015 term with a case called Integrity Staffing Solutions, Inc. v. Busk. The issue in the case is whether employees who do work for Amazon had a right to be paid for time they spent waiting - for as long as 25 minutes - to be screened for theft.

    Or, to be more accurate, this is a case in which Amazon was not named as a party in the case, because other corporations acted on Amazon's behalf. In this case, the named defendant was Integrity Staffing Solutions (ISS).

    The Integrity Staffing Solutions website clearly shows that it is an agent of Amazon who acts on Amazon's behalf. For example, the website says, "Here's where to find Amazon warehouse jobs, light industrial work, temporary and seasonal jobs, part-time employment and a job to make you proud." Indeed, Integrity Staffing's website advertises a number of jobs, but it has specific links only to jobs at Amazon.

    What This Case Is About

    No doubt, there are many ways to think about this case. It is certainly fair to say that this is a case involving a powerful and wealthy corporation that uses its power and wealth to squeeze workers who have little-to-no power and no wealth.

    What evidence do we have that Amazon has used that wealth and power in this case? According to www.oyez.org:

    At the end of each day, all the workers were required to pass through a security clearance checkpoint where they had to remove their keys, wallets, and belts, pass through a metal detector, and submit to being searched. The whole process could take up to 25 minutes. Similarly, up to ten minutes of the workers' 30-minute lunch period was consumed by security clearance and transition time. In 2010, Busk and Castro sued Integrity and argued that these practices violated the Fair Labor Standards Act (FLSA) as well as Nevada state labor laws.

    Amazon is known for creating systems that generate as much revenue as possible for Amazon and that do so by squeezing every penny out of Amazon's system. Amazon could have used those skills and that power to ensure its jobs were good jobs. It could have provided good benefits and pay. Or, at least, it could have shortened the wait time at the end of each day by hiring enough screeners to make the process as quick and dignified as possible. But that is not what Amazon chose to do.

    Amazon could also have used its power to give its employees a paid lunch or, at least provide an unpaid lunch break that allowed its employees to use all of that half hour for their own needs. And Amazon could have hired enough screeners to make the process of leaving work as efficient as possible instead of delaying workers' true quitting time 25 minutes after the workers had clocked out. But Amazon did none of these things.

    Amazon Is Not a Party to the Case or Is It? - The Nesting Doll Strategy

    The American Bar Association's website for this case - and all Supreme Court cases - includes links to the parties' briefs and to amicus briefs. In the Amazon case, notice that, although the plaintiff-employees were doing work for Amazon and Amazon was calling the shots, Amazon was not the focus of this case. In fact, Amazon was not even a party in the case.

    The parties are plaintiffs Jesse Busk and Laurie Castro, and the defendant is Integrity Staffing Solutions, not Amazon. It may seem odd that Amazon was not a party when the work was carried out on Amazon's behalf, and the outcome of this case could affect Amazon in the future.

    In fact, even though there is almost no mention of Amazon, Amazon's interests were well represented. Amazon's subcontractor - Integrity Staffing Solutions - was the defendant and effectively represented Amazon's interests.

    Amazon's interests were also represented by most of the organizations that filed amicus briefs in support of Integrity Staffing Solutions, including briefs by National League of Cities, National Association of Counties, the International City/County Management Association, US Conference of Mayors, Government Finance Officers Association, International Municipal Lawyers Association, National Public Employer Labor Relations Association, and the International Public Management Association For Human Resources, National Retail Federation, the Retail Litigation Center, Inc., Chamber of Commerce of the United States of America, Society for Human Resource Management, National Association of Manufacturers, National Federation of Independent Business Small Business Legal Center, and the United States.

    Only two amicus briefs were filed on behalf of the plaintiff employees, one filed by the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) and the other filed by the National Employment Lawyers Association.

    What Is at Stake in This Case?

    It was not so long ago that at least some captains of industry took pride in providing a good living for their employees and their families. Now, many of their descendants think nothing of grinding their workers down and paying them as little as possible for as much work as possible.

    It appears that Amazon, that is, Integrity Staffing Solutions, has chosen to be a thoroughly modern, cost-cutting corporation that uses every angle to pay its workers as little as possible. For example, Integrity's workers have an unpaid, half hour lunch, during which the workers must also spend roughly 10 minutes being scanned and searched.

    If the plaintiff employees win this case, their employer will no longer be able to get free work, and the employer will have an incentive to hire more workers to speed up the time it takes the workers to go through the security line during their lunchtime and at their shift's end.

    Why Is This Case Being Heard by the US Supreme Court?

    The law in this case involves the Fair Labor Standards Act (FLSA), enacted in 1938. The original FLSA set minimum wage and overtime pay. Over the years, the FLSA has been amended a number of times. This case is based on a 1947 amendment - the Portal-to-Portal Pay Act.

    Congress enacted the Portal-to-Portal Act to overturn judicial interpretations of the FLSA that, it was claimed, were causing employers' financial ruin and letting their employees receive windfall payments while not doing work for their employers.

    For the rest of the article, visit Truthout.org.

  • 10 Oct 2014 3:09 PM | Deleted user

    Read the US Department of the Treasury's new report "Expanding our Nation's Infrastructure through Innovative Financing," and you would think that flipping a coin to decide whether our roads, water and other basic infrastructure should be public or private is as rational as any other way to operate. Or as the Treasury report puts it, "The line separating public from private infrastructure is not always clear" because schools, roads and other infrastructure can be financed through either the private or public sector.

    While Treasury observes that public money to finance big infrastructure projects has dried up, it fails to ask why that money has disappeared. Treasury could have found answers had it asked why the post-World War II generations had enough money to build our national interstate highway system, while today Americans' pockets are so empty their only alternative is the private sector.

    Read the entire article HERE.

    Taxing Problems

    Had Treasury been interested in finding a solution to today's budget woes, it would have asked how the World War II generation financed and built neighborhood schools and national infrastructure projects, to say nothing of financing science research that supported vaccinations and public health.

    Had today's Treasury impartially examined the facts and history, it would have learned that the magic in their market was a highly progressive federal income tax with the top tax brackets at more than 90 percent. But that would mean following the adage: "From those to whom much is given, much is expected." (Luke 12:48).

    Today's Treasury edits that text as, "To those to whom much is given, much more is expected." Rather than fairly examining the effects of high versus low tax rates on financing public infrastructure, Treasury advocates keeping tax rates low for the wealthiest as the path to prosperity.

    One of Treasury's and the privatizers' most recent schemes is monetizing risk.

    When the private sector takes on risks that it can manage more cost-effectively, a PPP [Public - Private Partnership] may be able to save money for taxpayers and deliver higher quality or more reliable service over a shorter time frame. Just as there is a range of roles that a private firm or firms can take on in a PPP, the nature of risk-sharing and compensation arrangements for bearing and managing risk can vary substantially from project to project and is governed by contract.

    Risk has been the buzzword used by the PPP advocates for several years now. However, there is scant evidence of risk taken on by the private investors, and, more recently, the evidence is that it is the public who bears the risk.

    Belief Versus Facts

    The Treasury report on infrastructure privatization lists the usual claimed benefits of infrastructure privatization. It is supposed to provide a "choose your own adventure" à la carte menu of contracted-out responsibility. Instead, what it provides is a magician's sleight of hand diversion of the audiences' focus.

    Randy Salzman's in-depth analysis of privatization financing in transportation found that the financing model was for the private "partner" to invest as little as possible; to finance the project through state, county or federal government funding; and to declare bankruptcy by the 15th year of the contract and then walk away leaving the public with crumbling infrastructure and out of pocket. Salzman lays out the scenario which the privatizers are using as they laugh all the way to the bank with our money.

    It is ironic how the Treasury report overlooks the most obvious issues. For example, it holds up as a model the Denver multi-modal project. At the March 5 Congressional Hearing, Congresswoman Eleanor Holmes Norton's questions about financing for the Denver project showed the actual funding components of the project and found that only 3 percent of the money invested in the project came from the private sector. Meanwhile, Treasury skips over its fuzzy privatization math, as it comes to praise Caesar, not to bury him.

  • 11 Sep 2014 9:47 AM | Deleted user

    The Value of Water Coalition was formed by large, well-resourced water and wastewater organizations to change the way we think about water. The rest of us need to know that we may not like the way they think of us and our rights to water.

    Remember Total Recall? It's the film in which the powerful shut off oxygen to punish the powerless, all the while hiding the truth that still functional ancient Martian technology could produce oxygen for all - had the elite not hidden the oxygen and the truth.

    In this country, we use water with little thought of its special value. But recall that we sent rovers to Mars to search for water, because, as far as we know, life everywhere depends on water. If Mars once had flowing water, then Mars may also have had - or even have - life.

    The National Association of Water Companies (NAWC), one of the members of the Value of Water Coalition (VoW), reminds us of the many ways that water is essential for us all:

    Water. It's the invisible thread that weaves together our daily lives. We often take it for granted and we easily forget that there is simply no substitute for water. Although Americans consume a lot of water, few people realize what is required to treat and deliver water every day or how wastewater is cleaned so that it can be safely reused or returned to the environment.

    The typical American household uses 260 gallons of water every day, making our nation's water footprint among the largest of any country in the world.

    Should We Care What the Value of Water Coalition Members Say About Water?

    NAWC tells us we use a lot of water and should celebrate water, but NAWC and other VoW members fail to make clear how regular people should treat water. Should we conserve water? Or pay more for water and wastewater also known as sewage? If so, why? Do they want to raise prices so private water companies make bigger profits, or do they want us to invest in high quality water and water services for the benefit of us all? The VoW Coalition does a poor job in explaining its goals.

    Perhaps the VoW could do a better job explaining its views if its members were people. Instead, its members are large organizations with some connection with water.

    This is not to say that the VoW ignores people. A VoW campaign asks us to become "a voice for water" and has created e-learning modules and online campaigns to persuade us that Water's Worth It and videos "to raise awareness about the value and importance of water, water-related issues, and the water profession."

    There is one VoW member that provides particularly useful information and resources for the public and the water industry - the American Water Works Association (AWWA). For example, a video narrated by former AWWA executive director Jack W. Hoffbuhr lays out what can only be described as a thrilling history of the challenges of providing safe drinking water. It is nothing less than a tale of heroes who have saved millions of lives.

    Unfortunately, much of the material provided by other VoW members fails to tell us what the VoW Coalition has in mind for people and for water. For example, they ask us to value water, but fail to explain what valuing water means. Is "valuing" akin to online "likes?" Does valuing mean charging more for water or ensuring that water and water infrastructure are kept in good condition and protected? Or are their goals something altogether different?

    Looking for Clarity From the Members of the Value of Water Coalition

    To answer these questions, it makes sense to start with Ben Grumbles, the project manager for the VoW Coalition and president of the US Water Alliance, another member of the VoW. If anyone can explain the VoW's goals and processes, it should be VoW project manager Grumbles.

    Indeed, he has been immersed in water for years. Grumbles served as the Environmental Protection Agency (EPA) Assistant Administrator for Water during the George W. Bush administration. During that time, Grumbles produced an EPA report that was used to prohibit the EPA from regulating fracking. In a recent interview, Grumbles explained the VoW's goals as changing how the country views and values water.

    Since the VoW has not provided clear information about their goals, we are left to ferret out their intentions from statements and actions of VoW members and from water experts who are not members of the VoW.

    For example Mary Grant, a Food and Water Watch researcher, observes:

    The water industry wants to promote conservation by pricing water. But that is not a viable option if our goal is to lower water use. Pricing water disproportionately affects low-income people, while people who are wealthy do not always cut back their water use in the face of rising water costs.

    It is hard to set water prices high enough to get wealthy homeowners to cut back on lawn watering and other discretionary uses without making basic water use unaffordable for low-income households.

    So pricing in itself is not an effective way to promote conservation. It's better to use other demand management strategies, including rebates so people can install low water use equipment in place of old and leaky equipment.

    Grant adds, "There is a cost to treating and delivering water, and no one is saying water service should be free. The question is how to allocate those costs."

    According to Noah Hall, a professor, water law expert and associate dean for academic affairs at Wayne State University School of Law:

    The fundamental issue is not valuing water, but when to charge a market-based rate. If we don't use market value, then what is the policy choice we are making?

    Water is a public resource, so no one really wants to make a pure market allocation. But if we don't make a pure market allocation, then who pays for it? Most common allocations still recognize basic human needs and then figure out who pays how much.

    What, then, are the goals of the members of the VoW Coalition? Are they all like-minded, or is there a diversity of views among them?

    For the rest of the article, visit Truthout.org.

  • 04 Aug 2014 9:53 AM | Deleted user

    Ah, Big Ten football! What can be as important as rehashing the plays, the players' stats, rooting for the team, and, of course, supporting the players' legal right to union representation? Unless it is bringing in the big guns to keep the players from having union representation.

    Yes, root-root-rooting for the home team is a big money industry, in which the Big Ten coaches earn seven-figure salaries. Big Ten football ensures that broadcast commentators, advertisers, builders of stadiums, and more, all ride the gravy train that is powered by the efforts of the student athletes whose time spent on practices and games makes their football work a full-time job - not counting their time spent on schoolwork.

    Recently, the National Labor Relations Board convened a hearing on whether Northwestern University football players have the right to engage in collective bargaining to better the terms of their employment.

    Northwestern has refused to recognize the players' union because, Northwestern says, the players are students and, because they are students, they cannot be employees - and only employees have the right to union representation under the National Labor Relations Act (NLRA). Those of us who worked our way through college may take issue with Northwestern's position.

    We can predict that Northwestern's strategy will be to divert attention from the real action by hiring attorneys to use the Fluff-Up-the-Facts-and-Ignore-the-Law-Play. NLRA aficionados will recognize this tried and true gambit in Northwestern's claim that the football players are not employees under every law they can think of except, oh, gosh, whatchamacallit? Four letters, starts with an NLR. What could it be?

    Quite a neat trick if Northwestern can pull that off, because even rookie labor lawyers should know that the only issue that matters in an NLRB case is whether these people - here, the Northwestern football players - are employees as defined by the NLRA.

    So, here, midway through the game, we have the employer using the Hail Relevance Pass with days of evidence about who gets or does not get athletic scholarships, who is or is not a walk-on player, and who does or does not get a full-ride scholarship.

    The strategy is a bold, basic divide-and-conquer right up the middle, bolstered by diverting attention from the evidence that shows all the players - not just the stars - provide valuable support for the team during practice and games.

    To win, Northwestern must prove that the football players are not employees. This should be a tricky situation for Northwestern, because the National Labor Relations Act's default position is that a worker is an employee. Sec. 2(3) of the NLRA says, "The term 'employee' shall include any employee."

    The breadth of that definition should put Northwestern in a weak position. But don't count them out.

    Pay attention to Northwestern's divide-and-conquer strategy. Northwestern's football players may wear the same uniforms, but they are anything but uniform in how they are treated. The top tier of players are wooed and given full-ride scholarships. Meanwhile, "walk-ons" suit-up, but may or may not get a scholarship or ever play in a game. They do, however, play important roles in training and practice. And, truth be told, without the full complement of football players, Northwestern could not field enough players for two teams during practice.

    Northwestern must craft a strategy that deals with the NLRA's very broad definition of who is an employee and protected by the NLRA. NLRA section 2(3) NLRA defines an employee as including any employee, not limited to the employees of a particular employer. The breadth of this definition requires a strategy that can overcome the plain meaning of the law and of the NLRA's policy.

    It is not without danger, but, in this case, the employer's best strategy is to control the line of scrimmage by ignoring the NLRA's definition of employee and, instead, use laws that have nothing to do with the case. And that's exactly what we see Northwestern doing. This strategy has the advantage of drawing allies in to pile on and provide cover for its analysis. But ultimately, it can only be successful if the decision maker does not know basic labor law or has a stronger allegiance to self-interest than to obeying the law.

    For the rest of the article on Truth-out.org click HERE.

  • 23 Jul 2014 1:26 PM | Ellen Dannin (Administrator)

    My amicus brief  Dannin Amicus Brief in the Northwestern case (attached) includes a succinct discussion of the NLRA's legislation history as to who is an employee and the policy reasons for having such a broad definition. What the NLRA says is that an employee includes any employee without regard to whether they stand in the proximate relationship of employer and employee. The purpose for that definition was to protect workers who did not have an employment relationship but who were harmed by employer anti-collective actions - described as "concerted activities" - that is, when employees engaged in actions concertedly (involving more than one employee), as well as union activities.

    Method of pay is irrelevant.
  • 05 Mar 2014 9:36 AM | Deleted user

    Experience has shown that the anti-tax movement is a luxury we cannot afford. Its clout and legislators' fear of that clout means that taxes cannot be raised - even to keep pace with inflation. The result is crumbling infrastructure and no way to build new or repair what exists.

    As a result, we are left without money to maintain, repair and build our roads, bridges and other transportation infrastructure - not to mention other needs that we are unable to meet. We are told that the private sector can fill these needs, but, as it turns out, privatized infrastructure depends on public money - and a lot of it.

    How much public versus private money is invested in infrastructure privatization?

    Visit Truthout.org for more.

    At the March 5, 2014, congressional hearing called Overview of Public-Private Partnerships in Highway and Transit Projects, witnesses who are fans of privatization testified that the private "partners" in PPPs invest as little as 3 percent to 20 percent - leaving the public to fill the 80-97 percent gap in funding.

    The written testimony of Congressional Budget Office (CBO) economist Joseph Kile, one of the witnesses at the March 5 hearing, warned that "revenues from the users of roads and from taxpayers are the ultimate source of money for highways, regardless of the financing mechanism chosen." The significance of Kile's statement can be seen in the fact that one partner - the private sector - has almost no financial skin in the game. Meanwhile, the public partner - that is, the taxpayers - carries nearly the full financial burden.

    Unfortunately, word of that reality has not gotten out. In fact, some governors have suppressed information about their privatization of state bridges and other infrastructure and have tried to silence critics of privatization. Other public officials are unaware of, or in denial about, how our public infrastructure is paid for.

    In other words, those who think that partnerships mean equal sharing of a burden will see that grossly unequal responsibility is the norm. How and why that is the case is discussed below.

    Understanding the Magic of the Market

    Until recently, our public transportation system has been built and maintained through taxes, such as the fuel tax, tax-free government bonds, and government appropriations. The fuel tax has not kept pace with inflation and has not been raised since 1994. In addition, higher mileage vehicles and hybrid and electric cars pay much less or no fuel tax.

    The loss of so much tax revenue means not enough money to build, repair and maintain our roads, but we clearly need those roads. That shortfall has pushed desperate local, state and federal governments to find creative ways to drum up money, including strategies that amount to robbing Peter to pay Paul.

    For example, government bonds pay low interest rates, but are attractive to investors because they are low-risk investments, and interest earned is tax free. However, these sources of revenue cannot be used to finance private infrastructure. As a result, Congress has created ways to finance privatized roads. The two most important are the Transportation Infrastructure Finance and Innovation Act (TIFIA) loans and tax-exempt Private Activity Bonds (PABs).

    During the Congressional hearing - Phillip A. Washington, the head of the Denver Regional Transportation District, called on Congress to expand financing for PPPs.  Meanwhile, during the hearing, Congresswoman Eleanor Holmes Norton (D-DC) presented a breakdown of public versus private funding of the Denver Union Station Project, using Mr. Washington’s written testimony.

    The figures show that only $54.3 million, less than 3 percent of the funding for the $2.04 billion project, was private money. The rest of the funding - 97 percent - was public. The two most important sources – private activity bonds and Transportation Infrastructure Finance and Innovation Act (TIFIA) loans - are discussed below – and links can be followed for additional information.

    This money is your tax dollars at work, that is, after a detour through the private finance sector.

                Public Sources of Financing

    • U.S. Department of Transportation, Federal Transit Administration New Starts Full Funding Grant - $1.03 billion
    • Private Activity Bonds - $396.1 million
    • Transportation Infrastructure Finance and Innovation Act (TIFIA) loan - $280.0 million
    • Other federal grants - $57 million
    • Regional Transportation District (RTD) sales tax revenue - $128.1 million
    • Revenue bond proceeds - $56.8 million
    • Local/Colorado Department of Transportation (CDOT)/other contributions - $40.3 million

                Private Sources of Financing

    • Private Equity - $54.3 million

    Nothing was wrong or illegal about this funding. Federal, state and local governments regularly provide financial support for infrastructure projects, and Mr. Washington's job includes finding funding for this project. However, his call for more federal funding suggests that he did not appreciate just how tiny the private investment in that project was and just who had skin in the game.

    The oral testimony of the other witnesses also had lopsided public versus private financing, with private funding in the range of 10 to 20 percent. In other words, what makes infrastructure privatization attractive to investors is public subsidies.

    SILOs and LILOs - Tax Breaks Gone Wild

    Many have wondered why infrastructure privatization contracts have lease terms as long as 75 to 99 years. Surely, long before those contracts end, that infrastructure will be obsolete.

    The answer is tax breaks, in particular, Sale-in / Lease-out (SILOs) and Lease-in / Lease-out (LILOs). To receive the tax breaks required, first, "selling" or "leasing" a long-term asset, such as a road, and then immediately leasing it back.

    These tax breaks caused concern for many years, because they seem fraudulent. In 2008, the IRS Commissioner Doug Shulman gave notice that it would prosecute those who used LILOs and SILOs:

    LILOs and SILOs involved complex and convoluted purported leasing arrangements in which some of the nation's largest corporations supposedly leased or purchased large assets, such as foreign rail systems or sewer systems, and immediately leased them back to their original owners. Under the arrangement, these corporations, which include companies in the Fortune 500, buoyed their balance sheets by gaining billions of dollars of tax deferrals. Using LILOs and SILOs, these companies, including many of the nation's top banks, put off the recognition of current income for tax purposes for many years.  . . .

    The nation’s leading commercial enterprises have the legal and accounting resources to take full advantage of favorable provisions of tax law.  But they are not entitled to use their extensive resources to twist provisions of tax law to the point that they no longer reflect the Congress’ intent.  As a basic matter of fairness to all taxpayers, the IRS cannot allow LILO and SILO deals to stand.  The time has come for these shelter participants to put these cases behind them.  The best way for them to do so is to act on the settlement offer they will now receive.

    To understand just how troubling SILOs and LILOs are, consider that Senator Chuck Grassley (R-Iowa) called them "nothing more than good, old-fashioned tax fraud," and former Senator Max Baucus (D-Mont.) called SILOs "shell games" and "three-card-monty," transactions that "siphon cash" from taxpayers. Whatever they are called, it is fair to say that investing in infrastructure privatization has been attractive to investors largely because of various sorts of tax breaks that have siphoned money from investment in important projects.

    Robert W. Wood and Steven E. Hollingworth's, Tax Notes Special Report, "SILOs and LILOs Demystified," provides a number of examples of how these two schemes operated. The basic problem with these quasi-fraudulent deals was that they had no purpose other than creating tax benefits for the investors, while causing the loss of tax revenue that should have provided for public needs.

    Eventually, Commissioner Shulman disallowed these tax gimmicks. According to the commissioner:

    The public has a right to expect that large corporations be good corporate citizens and meet their compliance obligations. The nation's leading commercial enterprises have the legal and accounting resources to take full advantage of favorable provisions of tax law. But they are not entitled to use their extensive resources to twist provisions of tax law to the point that they no longer reflect the Congress' intent. 

    More About Tax Breaks Gone Wild - Private Activity Bonds and TIFIA

    Private Activity Bonds and Transportation Infrastructure Finance and Innovation Act (TIFIA) loans are two types of subsidies used to support the construction of private infrastructure.

    Tax-exempt Private Activity Bonds and public tax-free bonds are attractive to private investors for similar reasons. They are secure investments backed by the government, and interest on the bonds is not taxed. However, tax-free bonds mean a loss of tax revenue that otherwise would be used for public needs.

    The three private sector witnesses argued strenuously in support of making more PABs available. Mr. Washington testified that he would like to see the amount of PABs doubled because PABs were a huge tool. Witness Richard Fierce, senior vice president of Fluor Enterprises, called PABs the life blood for transport and said he would like the cap on the amount of PABs to be lifted. Witness James Bass, interim executive director and chief financial officer, Texas Department of Transportation, said that, without TIFIA loans for Texas infrastructure, few projects would happen.

    However, by calling for more public funding of private infrastructure projects beyond the 80-97 percent private investors had already received, these knowledgeable people are telling us that private investors have little to no interest in these deals unless the federal, state and local governments provide almost all of the PPPs' funding.

    During the hearing, Representative Capuano (D-Mass.) took issue with the use of PABs and giving $23 billion in taxpayer money to private investors. Capuana challenged the witnesses to explain why it wouldn't be better to fund infrastructure through traditional means such as using highway trust fund money. Of course, before highway trust fund money can be used to provide modern infrastructure, the gas tax must be tweaked so it can generate sufficient money to meet those needs.

    Programs such as PABs and TIFIA are subsidized by public money, but, rather than paying cash, the subsidies are provided through more complex routes. Private Activity Bonds mimic public bonds by making interest paid to bondholders tax free. However, bonds that are tax free mean less money in the government treasuries that issue those bonds.

    It is important to keep in mind that we are using PABs and TIFIAs to fund privatized infrastructure, rather than directly using taxes to build and maintain roads and other infrastructure, because the anti-tax movement has made taxes toxic. If there is any magic in the market, it seems to be magic from the dark side.

    For those who want more on infrastructure privatization and finance, Chicago Law Professor Julie Roin has two articles on the subject that can be found here and here.

    Copyright Truthout.org. Reprinted with permission.

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