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Policy Points from Iowa Fiscal Partners

Posts tagged Colin Gordon

Common good vs. common blame

Posted July 18th, 2019 to Blog

The Chris Godfrey case is only the latest example of a state leadership that — with no meaningful check on its authority — will do whatever it wants regardless of the consequences. They can, so they will.

And, for now, a jury has given the taxpayers of Iowa the consequences: a $1.5 million judgment against the state because of then-Governor Terry Branstad’s discrimination against a gay state official. Godfrey was state workers’ compensation commissioner when Branstad pressured him to resign, then cut his pay when Godfrey refused.

Branstad maintains the decision had nothing to do with Godfrey being gay. A jury disagreed. Either way, the totality of the case is disturbing.

When our state leaders defy a “common good” standard in making decisions, the ultimate pushback or price becomes a “common blame,” because the government actions represent us all, even if they do not serve us all.

We already see it in the issues surrounding Iowa’s poor water quality and the refusal of Iowa’s leaders to use public policy effectively to correct it. The voluntary Nutrient Reduction Strategy is not a strategy at all, but rather our imaginary friend who assures us we’ll do the right thing. Or our farmers will. Someday. But no one will make either us, or farmers, do the right thing unless already inclined to do so.

We see it when exorbitant tax breaks or subsidies go to corporations without a discernible return to the public, while services that benefit not only the corporations but all Iowans — such as a strong PK-12 and post-secondary education system — are held back or even cut.

And we see it here, in the Godfrey case. As the Cedar Rapids Gazette’s Todd Dorman pointed out in a column today:

The jury found Branstad was in the wrong. Now, of course, if the verdict stands, it will be you and I who likely pay the freight. Maybe those captains of industry Branstad tried so hard to please by bullying Godfrey could pass the hat.
And of course those “captains of industry” would have to pass the hat if they are to contribute, because we don’t tax them enough. We keep giving away subsidies and tax breaks like candy.

But this is about more than taxes. As our senior research consultant, Colin Gordon, noted in a blog yesterday, Branstad’s own defense — effectively that he did not discriminate against Godfrey but wanted him out because of what he had heard from business owners — is a problem in itself. It is something that Iowa’s leaders need to recognize as a problem and if they cannot, the voters need to. The state is not here as a service center for corporations, but to serve all Iowans. When individual Iowans are injured on the job, they need someone enforcing the law, as Godfrey was doing.

By his own admission, Governor Branstad was taking his cues from his business cronies. And if you read the transcript of his deposition in the case under questioning by attorney Roxanne Conlin, you can see he didn’t investigate beyond the anecdotal whining he was hearing from selected business people.

And Branstad won’t be held accountable for it. The people of Iowa will be, in our common blame.

Mike Owen is executive director of the nonpartisan Iowa Policy Project.
mikeowen@iowapolicyproject.org

A University ‘for’ Iowa, or just ‘in’ Iowa

Posted July 14th, 2018 to Blog

There are lots of good reasons not to shutter the University of Iowa’s Labor Center.

For starters, any such move would be rash, shortsighted, and wasteful. The Labor Center’s core continuing education mission teaches labor leaders about workers’ rights, about civil rights in the workplace, and about occupational health and safety. Those who have benefited from these courses over the years credit the Labor Center with helping them — and their local unions — sustain workplaces which are safer and more equitable.

For the pittance in state funds (about $500,000) devoted to the Center, the returns the state — in fewer harassment claims, fewer workers’ compensation settlements, fewer cases of wage theft — are incalculable.  Closing the Labor Center, in this respect, is like taking down the stoplights at an intersection: you could claim savings in signage and electricity as a result, but at what cost?

In turn, the threat to the future of the Labor Center — the only academic center in the Regents system devoted to work and workers in Iowa — sends a terrible message to the state’s working families. In an era of spiraling inequality, when the combination of stagnant incomes and rising tuition are putting a college education increasingly out of reach, do we really want to harden the perception that the state’s universities only serve the interests of the upper classes? There are about 1.6 million wage earners in Iowa, a quarter of whom do not earn a wage sufficient to climb above the poverty line.  These Iowans — as citizens, voters, taxpayers, and parents — should know that the state’s public institutions are for them too.

And finally, the University’s claim that the Labor Center is peripheral to its academic mission is simply not true. The University’s current strategic plan sits on three pillars: student success, research, and engagement. The Labor Center contributes on all of these fronts, and especially on engagement and outreach to the rest of the state. On this score, the strategic plan argues that the University should “enhance UI’s statewide visibility and increase access to UI expertise,” “support the translation of intellectual work into applications to enhance economic development,” and “create lifelong learning opportunities that broaden UI’s reach across Iowa.”

The Labor Center does all of this and more. It is one of the few arms of the University with a sustained and serious “extension” mission to the rest of the state. If the University is serious about its strategic plan, and about proving its value to those outside Johnson County, its best option is to nurture such forms of engagement with off-campus Iowa constituencies rather than abandon them. It is jewels like the Labor Center that demonstrate a commitment to the mission of a flagship public institution; which demonstrate that UI can and should be The University FOR Iowa and not just a University IN Iowa. 

Colin Gordon is the F. Wendell Miller Professor of History at the University of Iowa and a senior research consultant with the Iowa Policy Project. He is the recipient of the Regents Award for Faculty Excellence (2016) and the UI’s Distinguished Achievement in Publicly-Engaged Research Award (2015).

Defending the Top 1 Percent — and Failing at It

Posted July 3rd, 2013 to Blog

An academic heavyweight from Harvard has taken up the cause of America’s most affluent 1 percent. But his defense has done the nation’s rich no favors.

Note: This piece by IPP Senior Research Consultant Colin Gordon appeared July 2 on inequality.org at this link: http://inequality.org/defending-top-1-percent-failing/

By Colin Gordon

Harvard economist Greg Mankiw

Harvard economist Greg Mankiw

Harvard economist Greg Mankiw has made quite a splash with his spirited defense of the top 1 percent. His argument in a nutshell: Gains hoarded by the very rich amount to nothing more than an “entrepreneurial disturbance” in an otherwise egalitarian setting. High earners are high earners because they have made “significant economic contributions,” according to Mankiw — who goes on to proffer J.K. Rowling, Stephen Spielberg, and Steve Jobs as evidence.A lot of virtual ink has already spilled in response, much of it by the other contributors to the forthcoming issue of the Journal of Economic Perspectives that features the Mankiw essay. And the verdict, pretty decisively, is that Mankiw has it all — the backstory, the logic, the evidence, and the consequences — spectacularly wrong.

Consider the central claim that the gains of the top 1 percent are all about the supply and demand of skilled labor, that “changes in technology have allowed a small number of highly educated and exceptionally talented individuals,” as Mankiw concludes, “to command superstar incomes in ways that were not possible a generation ago.” This claim has three large holes.

First, Mankiw’s use of Rowling, Spielberg, and Jobs as examplars of the 1 percent is more than a little disingenuous. As Larry Mishel points out, drawing on the work of Jon Bakija and others, the 1 percent is largely populated by corporate executives and financial sector professionals, for whom the plaudits “innovator” and “significant economic contributor” seem somehow less apt. And, as Dean Baker reminds us, even the incomes of Rowling, Spielberg, and Jobs owe as much to government intervention — in the form of copyrights and patents — as they do to the genius of the market.

Second, there is no evidence — at the bottom of the income distribution or the top — that education or innovation has that sort of payoff. John Schmitt and Jannelle Jones, most recently in a paper on the prospects of black workers, have tirelessly made the case that wages and job quality have plummeted across the last generation — even as the experience and educational attainment of workers has shown dramatic gains. And Mishel shows that the trajectory of top incomes runs far ahead of any reasonable educational benchmark.

And finally, the counter argument — that the 1 percent’s gains reflect distortions of the market, and losses for the rest of us — is pretty powerful. In their contribution to the same Journal of Economic Perspectives issue, Mishel and Josh Bivens make the case that most of these gains, especially those flowing from a bloated financial sector and excessive executive pay, come in the forms of economic rent — income either generated through preferential status or income that exceeds the real market value of the service provided.

Mankiw closes his paper with a number of other unsupported — and unsupportable — claims, arguing in turn that the rich are already taxed enough and that rising inequality poses no threat to either economic efficiency or social mobility. By this point his argument has a sort of “pay no attention to that man behind the curtain” tone to it. Once he equates social policy with involuntary kidney donations, the tired economic orthodoxy seems more like a furious distraction than any argument at all.

Colin Gordon

Colin Gordon

Colin Gordon is Professor of History at the University of Iowa. For more on this issue, and the broader sources of our inequality, see our Inequality.Org interactive guide, Growing Apart: A Political History of American Inequality.

- See more at: http://inequality.org/defending-top-1-percent-failing/#sthash.JXRd5UmQ.dpuf


Iowa’s decline in job-based health insurance

Posted April 11th, 2013 to Blog

The Cedar Rapids Gazette today offered an interesting look at the question of where Iowans get their insurance. It’s less and less something that comes through employment. And when the costs of insurance keep rising, that makes it tougher on the household budget — or results in people not having insurance.

This is a trend we’ve been watching and reporting on at the Iowa Policy Project for many years, as have several good research organizations such as the Economic Policy Institute.

The Affordable Care Act offers at least a partial remedy. As health insurance exchanges are developed, affordable insurance should be more readily available. Tax credits for employers providing insurance will provide a targeted incentive to offer employees a better option than what employees might find on the individual insurance market.

Colin Gordon

Colin Gordon

Our State of Working Iowa report for 2012 offers another good look at this issue. As author Colin Gordon observes, wage stagnation, erosion of good jobs and recession have combined to batter workers, at the same time non-wage forms of compensation, health and pension benefits, also have declined. This has eroded both job quality and family financial security, and increased the need for public insurance. In Chapter 3, “The Bigger Picture,” Gordon writes that Iowa is one of 15 states, including five in the Midwest, to lose more than 10 percent of job-based coverage in a decade. He continues:

These losses reflect two overlapping trends. The first of these is costs. Health spending has slowed in recent years, but still runs well ahead of general inflation. Both premium costs … and the employee’s share of premiums have risen sharply — especially for family coverage — while wages have stagnated.

In 1999, a full-time median-wage worker in Iowa needed to work for about 10 weeks in order to pay an annual family premium; by 2011, this had swollen to nearly 25 weeks. Steep cost increases have pressed employers to drop or cut back coverage, or employees to decline it when offered. High costs may also encourage more employees to elect single coverage — counting on spousal coverage from another source and kids’ coverage through public programs. The second factor here is the shift in sectoral employment outlined above: Job losses are heaviest in sectors that have historically offered group health coverage; and job gains (or projected job gains) are strongest in sectors that don’t offer coverage.

This graph looks at the rate of employer-sponsored coverage, by industry sector, from 2002 to 2012.

job-based coverage comparison, Iowa 2002-2012

An interactive version of that graph in the online report allows the reader to toggle between those two years; the colored balloons sink on the graph in moving from 2002 to 2012, as if they all are losing air — the result of declining rates of coverage.

Good public policy could help to fill them again.

2010-mo-blogthumbPosted by Mike Owen, Assistant Director