Author Archives: afscme

Accounting, Politics, and Public Pensions

Source: Steven W. Thornburg and Kirsten M. Rosacker, CPA Journal, April 2018

Defined benefit pension plans offer politicians a convenient way to satisfy public employee demands while providing the means to defer budgeted cash payments and hide the accumulation of public debt from taxpayers. The authors describe how this plays out in practice and how accounting standards facilitate such activity. The accounting profession, and Governmental Accounting Standards Board (GASB) in particular, could do more to inform taxpayers about the state of public finances. The longstanding failure to do so, the authors argue, allows public debt to accumulate until a crisis is reached.

Schools See Steep Drop in Librarians, New Analysis Finds

Source: Sarah D. Sparks and Alex Harwin, Education Week, May 16, 2018 | Corrected: May 17, 2018

American schools—particularly those serving black and Latino students—have seen a precipitous drop in their school librarians since the Great Recession.

The nation’s public school districts have lost 20 percent of their librarians and media specialists since 2000, from more than 54,000 to less than 44,000 in 2015, according to an Education Week Research Center analysis of federal data. Many districts lost librarians even as student populations grew by 7 percent nationwide. For example, over the past decade in Denver public schools, student enrollment increased by 25 percent, but the number of librarians decreased by 60 percent. ….

…. The evidence is building that the loss of school librarians could put schools at a disadvantage academically. For example, two studies of national and Colorado-specific data suggested that losing a school librarian was associated with lower 4th grade reading scores while gaining one was associated with higher scores. A meta-analysis of 34 statewide studies also suggested that schools with high-quality library programs had higher reading test scores and, for high schools, graduation rates. ….

As Wisconsin’s and Minnesota’s lawmakers took divergent paths, so did their economies – Since 2010, Minnesota’s economy has performed far better for working families than Wisconsin’s

Source: David Cooper, Economic Policy Institute, May 8, 2018

From the summary:
Since the 2010 election of Governor Scott Walker in Wisconsin and Governor Mark Dayton in Minnesota, lawmakers in these two neighboring states have enacted vastly different policy agendas. Governor Walker and the Wisconsin state legislature have pursued a highly conservative agenda centered on cutting taxes, shrinking government, and weakening unions. In contrast, Minnesota under Governor Dayton has enacted a slate of progressive priorities: raising the minimum wage, strengthening safety net programs and labor standards, and boosting public investments in infrastructure and education, financed through higher taxes (largely on the wealthy).

Because of the proximity and many similarities of these two states, comparing economic performance in the Badger State (WI) versus the Gopher State (MN) provides a compelling case study for assessing which agenda leads to better outcomes for working people and their families. Now, seven years removed from when each governor took office, there is ample data to assess which state’s economy—and by extension, which set of policies—delivered more for the welfare of its residents. The results could not be more clear: by virtually every available measure, Minnesota’s recovery has outperformed Wisconsin’s.

The following report describes how Minnesota’s and Wisconsin’s economies have performed since 2010 on a host of key dimensions, and discusses the policy decisions that influenced or drove those outcomes.

Key findings include:
– Job growth since December 2010 has been markedly stronger in Minnesota than Wisconsin, with Minnesota experiencing 11.0 percent growth in total nonfarm employment, compared with only 7.9 percent growth in Wisconsin. Minnesota’s job growth was better than Wisconsin’s in the overall private sector (12.5 percent vs. 9.7 percent) and in higher-wage industries, such as construction (38.6 percent vs. 26.0 percent) and education and health care (17.3 percent vs. 11.0 percent).

– From 2010 to 2017, wages grew faster in Minnesota than in Wisconsin at every decile in the wage distribution. Low-wage workers experienced much stronger growth in Minnesota than Wisconsin, with inflation-adjusted wages at the 10th and 20th percentile rising by 8.6 percent and 9.7 percent, respectively, in Minnesota vs. 6.3 percent and 6.4 percent in Wisconsin.

– Gender wage gaps also shrank more in Minnesota than in Wisconsin. From 2010 to 2017, women’s median wage as a share of men’s median wage rose by 3.0 percentage points in Minnesota, and by 1.5 percentage points in Wisconsin.

– Median household income in Minnesota grew by 7.2 percent from 2010 to 2016. In Wisconsin, it grew by 5.1 percent over the same period. Median family income exhibited a similar pattern, growing 8.5 percent in Minnesota compared with 6.4 percent in Wisconsin.

– Minnesota made greater progress than Wisconsin in reducing overall poverty, child poverty, and poverty as measured under the Census Bureau’s Supplemental Poverty Measure. As of 2016, the overall poverty rate in Wisconsin as measured in the American Community Survey (11.8 percent) was still roughly as high as the poverty rate in Minnesota at its peak in the wake of the Great Recession (11.9 percent, in 2011).

– Minnesota residents were more likely to have health insurance than their counterparts in Wisconsin, with stronger insurance take-up of both public and private health insurance since 2010.

– From 2010 to 2017, Minnesota has had stronger overall economic growth (12.8 percent vs. 10.1 percent), stronger growth per worker (3.4 percent vs. 2.7 percent), and stronger population growth (5.1 percent vs. 1.9 percent) than Wisconsin. In fact, over the whole period—as well as in the most recent year—more people have been moving out of Wisconsin to other states than have been moving in from elsewhere in the U.S. The same is not true of Minnesota.

Minimum Wage Increases, Wages, and Low-Wage Employment: Evidence from Seattle

Source: Ekaterina Jardim, Mark C. Long, Robert Plotnick, Emma van Inwegen, Jacob Vigdor, Hilary Wething, National Bureau of Economic Research, NBER Working Paper No. 23532, Issued in June 2017, Revised in May 2018
(subscription required)

From the abstract:
This paper evaluates the wage, employment, and hours effects of the first and second phase-in of the Seattle Minimum Wage Ordinance, which raised the minimum wage from $9.47 to as much as $11 in 2015 and to as much as $13 in 2016. Using a variety of methods to analyze employment in all sectors paying below a specified real hourly wage rate, we conclude that the second wage increase to $13 reduced hours worked in low-wage jobs by 6-7 percent, while hourly wages in such jobs increased by 3 percent. Consequently, total payroll for such jobs decreased, implying that the Ordinance lowered the amount paid to workers in low-wage jobs by an average of $74 per month per job in 2016. Evidence attributes more modest effects to the first wage increase. We estimate an effect of zero when analyzing employment in the restaurant industry at all wage levels, comparable to many prior studies.

A growing Jeffco program trains future early childhood workers while they’re still in high school

Source: Ann Schimke, Chalkbeat, May 18, 2018

….The internship, which ended in early May, is one component of a new early childhood career pathway offered at the high school. The year-long program also includes two early childhood classes and leads to an entry-level certificate from Red Rocks Community College that qualifies students to be assistant preschool or child care teachers.

Salazar — and students in similar concurrent enrollment programs around Colorado — represents one segment of the child care field’s next generation. With their professional lives just beginning, the students are laying the foundation to earn further credentials and become the lead preschool teachers and directors of the future. It’s a vision straight out of the state’s three-year plan to build a strong early childhood workforce. But in a field known for low pay and high turnover, keeping these students in the pipeline is no small task…..

Related:
Colorado’s Early Childhood Workforce 2020 Plan
Source: Colorado Department of Education, Early Childhood Leadership Commission (ECLC), June 2017

At the Wage Floor: Covering Homecare and Early Care and Education Workers in the New Generation of Minimum Wage Laws

Source: Sarah Thomason, Lea Austin, Annette Bernhardt, Laura Dresser, Ken Jacobs and Marcy Whitebook, Center for Labor Research and Education (UC Berkeley), Center for the Study of Child Care Employment (UC Berkeley), and COWS (UW-Madison), May 2018

From the introduction:
In November 2012, fast-food workers in New York went on strike and the Fight for $15 was born. Over the last five years, the movement has lifted wages for more than 17 million workers across the nation by fighting for and winning numerous minimum wage policies (National Employment Law Project 2016).

Substantial minimum wage increases are underway in California, New York, Oregon, and more than 30 cities and counties around the country. In states and cities covered by them, these new minimum wages will increase earnings for 25 to 40 percent of workers (Reich, Allegretto, and Montialoux 2017; Reich et al. 2016). After four decades of wage stagnation and rising inequality, the movement has delivered real, much needed, and meaningful progress in a remarkably short period of time.

Fast food has been iconic in the discussions of the minimum wage, from the influential mid-1990s research that found no negative employment impact of wage increases in the industry, to the fast-food workers who have walked out on strike in cities across the country in recent years (Card and Kruger 1995). But of course the reach of these wage increases extends well beyond fast food to underpaid workers in multiple industries. The dynamics of minimum wage increases vary across industries based on each industry’s specific structure.

Nowhere are the distinct dynamics more pronounced and challenging than for those employed in human services industries. This paper focuses on an important subset of these workers: those who provide homecare and early care and education services to the very young, people with disabilities, and those who are frail due to age or illness. We explain the pressing need to raise these workers’ wages and the unique structure of their industries that results in a funding squeeze for wage increases—at the root of this is the fact that most families are unable to afford all of the homecare and child care they need, never mind pay enough to ensure that workers earn a living wage, and public human services are chronically underfunded.

These workers provide a critical (but too often unrecognized) public good; as such, we argue that a significant public investment is a necessary part of the solution, both to deliver minimum wage increases to these workers and to cover the significant unmet need for care. We provide background about the shared and divergent challenges in the homecare and early care and education industries, as well as review emerging policy initiatives to fund wage increases for homecare and early care and education workers and identify principles for public policy going forward.

Behind the teacher strikes that have roiled five states – Why non-union states have seen the most unrest

Source: The Economist, May 5, 2018

From a block away, the striking teachers camped out around Arizona’s capitol at first looked like a solid sea of red, the colour of their T-shirts and tents. On closer inspection, they distinguished themselves the way the teachers have always distinguished their classrooms—with handmade signs. Leah Falcon (“Arizona exports: Cotton, copper, teachers”), who teaches middle-school maths, said she was “fighting because my kids deserve better than 34 students in a class.” Megan Marohn (“Arizona Spending per Student: $9,000. Per Inmate: $24,000”) is a classroom aide and lifelong Republican who frets that Arizona’s Republican legislature and governor “put the value of corporations above students”. Jay Bertelsen (“Christian Non-Union Conservative Teacher Fighting for Funding”) has taught computer science outside Tucson for 25 years; his children qualify for Arizona’s state-subsidised health care for poor families.

Grievances such as these have motivated teacher strikes in five states. They look likely to continue—galvanising public-sector workers in states where Democrats hope to make gains in this autumn’s midterm elections. ….

House Agriculture Committee’s Farm Bill Would Increase Food Insecurity and Hardship

Source: Ed Bolen, Lexin Cai, Stacy Dean, Brynne Keith-Jennings, Catlin Nchako, Dottie Rosenbaum, Elizabeth Wolkomir, May 10, 2018

From the summary:
The nutrition provisions of the farm bill[1] that the House Agriculture Committee (the Committee) passed on April 18, if enacted, would increase food insecurity and hardship. The proposed changes to the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps) would end or cut benefits for a substantial number of low-income people.

SNAP is the country’s most effective anti-hunger program, helping 1 in 8 Americans afford a basic diet, with most SNAP participants being children, seniors, or people with disabilities. Despite providing modest benefits — averaging about $1.40 per person per meal — the program combats food insecurity, alleviates poverty, and has long-term positive impacts on health as well as on children’s educational attainment. The Committee’s proposal would reduce SNAP’s effectiveness and put large numbers of families and individuals at increased risk of hardship.

Why Most States Are Struggling to Regulate Airbnb

Source: Elaine S. Povich, Stateline, May 7, 2018

Jeannette Belliveau lives with her dog and two cats in a 19th century house in the Upper Fells Point section of Baltimore, not far from Johns Hopkins Hospital, and rents out a couple of rooms for short-term stays to make a living.

In other parts of the city, Al Hallivis, a real estate investor and single dad, owns a half-dozen houses that he also rents by the night.

A few miles toward the city’s picturesque harbor, a variety of hotels offer traditional overnight stays.
All three models cater to Baltimore visitors, but that’s where the similarity ends.

Belliveau, Hallivis, and hotels have different business models, different perspectives and different agendas. These competing constituencies help account for the difficulty states have had in regulating and taxing the short-term rental industry, even as some cities have taken action to regulate short-term rentals….

….San Francisco this year began limiting the number of nights a year absentee owners can rent their properties through Airbnb or similar platforms. Owners who live in their residence can rent it out without limit. Owners also must pay a $250 registration fee to the city….

#MeToo in the Statehouse: At Least 16 Men Are Gone, But the Harassment Culture Isn’t

Source: Jen Fifield, Stateline, May 11, 2018

…..Seven months after the #MeToo movement began, state lawmakers across the country are still grappling with how to root out what many say is a longstanding misogynist culture in statehouses. After dozens of sexual harassment accusations against sitting male state lawmakers, at least 16 legislators in a dozen states have resigned or been expelled, according to a Stateline tally.

In many states, accused lawmakers were knocked from leadership posts, or voluntarily relinquished them, while remaining in office. Others apologized and kept their positions, or maintain their innocence.

As many legislative sessions end, many of the substantial policy changes that state lawmakers were hoping for — such as creating a private and safe method for victims to come forward and a nonpartisan way for bad behavior to be punished — remain elusive…..