Category Archives: Cities & Towns

CDBG Works

Source: David W. Burns, Report on City Projects, June 2017

From the summary:
The Community Development Block Grant (CDBG) program is the key tool cities use to revitalize low and moderate-income neighborhoods and serve the people who live in them. Administered by the Department of Housing and Urban Development, CDBG was launched in 1974 and has served thousands of communities across the nation. “Entitlement” communities receive funds directly from the federal government based on a highly targeted formula. The balance of funds go to States which administer CDBG resources to smaller towns and communities on a competitive basis. CDBG allows local governments the flexibility to design their own comprehensive revitalization plans in the context of targeted objectives to serve low and moderate income people. ….

…. CDGB is not just another federal program. It is a lifeline to poor neighborhoods that for too long have suffered disinvestment in both their physical infrastructure and their people. This publication, CDBG WORKS, is designed to illustrate the types of projects CDBG makes possible. CDBG funds housing rehab programs for in-home seniors and those with disabilities, making it possible for them to gain access and stay in their homes. It funds Boys and Girls Clubs to provide youth productive activities as an alternative to the streets. It supports community and social service organizations that provide counseling to victims of domestic violence and those who suffer from homelessness and mental health problems. The list goes on and on. ….

Making Informed Changes to Public Sector Pension Plans

Source: National League of Cities, March 2017

From the abstract:
Pensions play a critical role in the ability of local governments to attract and retain the workforce needed to meet citizen demands. The costs associated with this employee benefit, however, can be substantial. A recent National League of Cities (NLC) survey revealed that over the past year the cost of pensions increased in more than 70 percent of cities. One in three cities identified these expenses as the factor most negatively affecting their budgets.

The Impact of Administrative Structure on the Ability of City Governments to Overcome Functional Collective Action Dilemmas: A Climate and Energy Perspective

Source: Richard C. Feiock, Rachel M. Krause, Christopher V. Hawkins, Journal of Public Administration Research and Theory, Advance Articles, Published: 27 June 2017
(subscription required)

From the abstract:
Fragmented authority and service responsibilities within governments can impact the design and implementation of policy. Administrative structures can play an important role in mitigating the challenges associated with coordinating activities across independent units within city government. In this study, we use the broad policy arena of sustainability as a testbed to explore “Functional Collective Action” problems and the consequences of cities’ administrative design on the portfolio of policy actions related to energy and climate protection. Empirical analyses of survey data from a national sample of local governments indicate that political institutions, government capacity, and community support influence, to varying degrees, administrative structures related to sustainability initiatives. Our analyses also suggest that these are not inconsequential decisions, since they influence the extent to which cities achieve greater policy integration.

Seattle’s Minimum Wage Experience 2015-16

Source: Michael Reich, Sylvia Allegretto, and Anna Godoey, University of California – Berkeley, Institute for Research on Labor and Employment, Center on Wage and Employment Dynamics (CWED), June 2017

From the abstract:
This brief on Seattle’s minimum wage experience represents the first in a series that CWED will be issuing on the effects of the current wave of minimum wage policies—those that range from $12 to $15. Upcoming CWED reports will present similar studies of Chicago, Oakland, San Francisco, San Jose and New York City, among others. The timing of these reports will depend in part upon when quality data become available. We focus here on Seattle because it was one of the early movers. …. Our results show that wages in food services did increase—indicating the policy achieved its goal—and our estimates of the wage increases are in line with the lion’s share of results in previous credible minimum wage studies. Wages increased much less among full-service restaurants, indicating that employers made use of the tip credit component of the law. Employment in food service, however, was not affected, even among the limited-service restaurants, many of them franchisees, for whom the policy was most binding. These findings extend our knowledge of minimum wage effects to policies as high as $13. …

Related:
Press Release

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 WethingNBER Working Paper No. 23532, June 2017
(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 $11 per hour in 2015 and to $13 per hour in 2016. Using a variety of methods to analyze employment in all sectors paying below a specified real hourly rate, we conclude that the second wage increase to $13 reduced hours worked in low-wage jobs by around 9 percent, while hourly wages in such jobs increased by around 3 percent. Consequently, total payroll fell for such jobs, implying that the minimum wage ordinance lowered low-wage employees’ earnings by an average of $125 per month 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.

Five Flaws in a New Analysis of Seattle’s Minimum Wage
Source: Rachel West, Center for American Progress, June 28, 2017

A team of faculty and students at the University of Washington was tasked with assessing how Seattle’s 2014 minimum wage ordinance, which is gradually raising the city’s minimum wage to $15 per hour, is affecting low-wage workers. This week, the group released a working paper—without peer review—that looks at the ordinance’s first two phases, under which the minimum wage for most workers increased from $9.47 to $11 per hour in 2015 and then to $13 per hour in 2016.

Methodological flaws plague the group’s approach, causing them to draw conclusions wildly out of step with dozens of studies of similarly sized wage increases cited by both critics and proponents of higher minimum wages. The vast majority of rigorous, credible studies conclude that higher minimum wages have appreciably boosted workers’ earnings with little or no effects on employment. By contrast, the University of Washington researchers conclude that higher minimum wages not only reduced employment and hours worked in Seattle, but that the costs of the wage hike outweigh the benefits for the average low-wage worker—a finding at odds with the conclusions of even the most skeptical mainstream researchers. At the same time, the study’s results suggest—implausibly and largely inexplicably—that the wage hike to $13 per hour caused substantial growth in jobs paying more than $19 per hour in the restaurant industry. That’s just one of several questionable results that should give readers serious pause…..

Seat­tle and the (Method­ol­ogy of the) Eco­nom­ics of Min­i­mum Wage
Source: Ben­jamin Sachs, OnLabor blog, June 26, 2017

….Noam Scheiber also has a good story on the UW pa­per which lays out a cri­tique worth men­tion­ing here. In sum, the em­ploy­ment ef­fects iden­ti­fied by the UW study might be due, not to Seat­tle’s min­i­mum wage in­crease, but to a boom­ing job mar­ket in which high-wage jobs are re­plac­ing low-wage jobs. On this the­ory, the em­ploy­ment “losses” in the low-wage sec­tor that the UW study re­ports would ac­tu­ally just be peo­ple mov­ing from low- to high-wage em­ploy­ment. …

How a Rising Minimum Wage Affects Jobs in Seattle
Source: Norm Scheiber, New York Times, June 26, 2017

Seat­tle and the Eco­nom­ics of Min­i­mum Wage
Source: Ben­jamin Sachs, OnLabor blog, June 26, 2017

….There are, as al­ways, caveats. First, the Wash­ing­ton pa­per has yet to be sub­ject to peer re­view – it was re­leased on­line as an NBER work­ing pa­per. Sec­ond, an­other re­cent study – this one from Berke­ley – found that the Seat­tle or­di­nance “raises pay with­out cost­ing jobs.” As FiveThir­tyEight also re­ports, the Berke­ley study fo­cused ex­clu­sively on the fast food in­dus­try, and the Wash­ing­ton study it­self found no em­ploy­ment ef­fects of the min­i­mum wage hike on the restau­rant in­dus­try. One pos­si­bil­ity, then, is that the Wash­ing­ton study’s broader fo­cus is pick­ing up ef­fects that are missed by the (more tra­di­tional) fo­cus on the restau­rant in­dus­try. Many econ­o­mists, in­clud­ing Jared Bern­stein, how­ever, de­fend the method­olog­i­cal de­ci­sion to fo­cus a min­i­mum wage study on restau­rants. There are also, as al­ways, ad­di­tional method­olog­i­cal crit­i­cisms of the Wash­ing­ton study. (EPI has a press re­lease and pa­per that iden­ti­fies a num­ber of these con­cerns.)

Then there is an im­por­tant caveat in the other di­rec­tion: Seat­tle might be a city in the best po­si­tion to ab­sorb min­i­mum wage in­creases, which means – if the Wash­ing­ton study is right – that the em­ploy­ment ef­fects could be even stronger else­where. ….

The “high road” Seattle labor market and the effects of the minimum wage increase – Data limitations and methodological problems bias new analysis of Seattle’s minimum wage increase
Source: Ben Zipperer and John Schmitt, Economic Policy Institute, June 26, 2017

From the summary:
A team of researchers at the University of Washington has released an analysis of the economic impacts of the 2015 and 2016 increases in the Seattle minimum wage. The study, Jardim et al. (2017), looks at the first two stages of a phased-in set of increases that will eventually take the minimum wage in the city to $15.00 per hour. The authors of the study argue that they find large job losses associated with these first two rounds of increases, in which the minimum wage for most workers rose from $9.47 per hour to $11.00 per hour in April 2015 and then to $13.00 per hour in January 2016.

The authors’ analysis, however, suffers from a number of data and methodological problems that bias the study in the direction of finding job loss, even where there may have been no job loss at all. One initial indicator of these problems is that the estimated employment losses in the Seattle study lie far outside even those generally suggested by mainstream critics of the minimum wage (see, for example, Neumark and Wascher [2008])—as the authors themselves acknowledge.

In this report, we describe the most important shortcomings in the new analysis and make suggestions for how the researchers can attempt to correct for these problems in future iterations of their long-term study of the Seattle minimum wage.
See also: press release

2017’s Cities Most Affected by Trumpcare

Source: Richie Bernardo, WalletHub, March 20, 2017

…According to estimates by the nonpartisan Congressional Budget Office, the recently proposed American Health Care Act — unofficially going by the names “Trumpcare” and “Ryancare” — would raise the average health-insurance premium for an individual policyholder by 15 to 20 percent just one or two years from now and lower federal subsidies. In contrast, the CBO projected, average Obamacare premiums would decrease 10 percent by 2026.

In order to gauge the AHCA’s impact on people who buy their own insurance, WalletHub’s analysts compared the differences in premium subsidies that the average households in 457 U.S. cities would receive under Obamacare and Trumpcare. Read on for our findings, commentary from a panel of experts and a full description of our methodology….

Source: WalletHub

Boomtown, Flood Town

Source: Neena Satija for The Texas Tribune and Reveal; Kiah Collier for The Texas Tribune; and Al Shaw for ProPublica, December 7, 2016

Climate change will bring more frequent and fierce rainstorms to cities like Houston. But unchecked development remains a priority in the famously un-zoned city, creating short-term economic gains for some while increasing flood risks for everyone. ….

Evaluation of a Minimum Wage Increase in Minneapolis and Hennepin/Ramsey County

Source: University of Minnesota, The Roy Wilkins Center for Human Relations and Social Justice, Humphrey School of Public Affairs, Technical Report, September 2016

The Roy Wilkins Center replicated the techniques used in prevalent economic literature to simulate the relative impact of a local minimum wage increase in the city of Minneapolis and in Hennepin/Ramsey County. These simulated minimum wage changes are at the $12 and $15 per hour levels. The research team finds the following:
– The industries with the largest number of persons likely to be affected by the change in minimum wage are food service, retail, non-hospital health, and administrative support ….

Minimum wage earners in Minneapolis often
o Have at least some college education
o Are not currently in school
o Work at least 35 hours per week
o Are over age 25

Firms that currently pay the $9.50 minimum wage in Minneapolis often
o Are eligible to pay the current lower minimum wage of $7.75 as a small business
o Will increase prices of food by less than 5% to cover labor costs of a $12/$15 minimum wage
o Face lower employee turnover after an increase in the minimum wage

Current literature on the minimum wage suggests
o Increases in average employee monthly earnings vary by industry
o Average employee monthly earnings in the Minneapolis metropolitan area are more sensitive to the minimum wage than the country as a whole
o Most estimates of the change in workforce participation find no statistically significant change after a minimum wage increase

Households with minimum wage earners in Minneapolis
o Are currently less likely than the general public to meet their food needs
o Are likely to spend $27 more a week to meet their food needs after the proposed increase in the
minimum wage
o Would face food insecurity 4-7% less often under the proposed policy

Immigrant workers earning the minimum wage in Minneapolis
o Are slightly more responsive to an increase in the minimum wage than the general population
o Are especially more responsive to an increase in the minimum wage if they are recent immigrants in a low skill job

Nonwhite employees are more likely to be affected by an increase in the minimum wage than white workers, when controlling for the number of workers in each group
o Minority Owned Business Enterprises are, however, likely to face smaller changes in payroll costs after a change in the minimum wage, as fewer minority owned enterprises qualify to pay their workers a reduced minimum wage

Firms within industries with relatively few minimum wage workers are not very likely to see a large change in their operating costs as a result of the proposed minimum wage

Firms within industries with relatively many minimum wage workers may see an increase in their operating costs, however, if employee earnings increase by a smaller rate than we simulate, the change in labor cost would be smaller as well…..

The 2016 State of Wisconsin’s Cities and Villages

Source: Wisconsin Taxpayers Alliance, 2016

From the press release:
Since the Great Recession, Wisconsin’s cities and villages have maintained critical services despite no significant increases in local or state revenue. But challenging times are just around the corner for local road systems, and Wisconsin’s smallest communities are still waiting for the economy to recover fully, according to a new report sponsored by the League of Wisconsin Municipalities.

The inaugural edition of “The State of Wisconsin’s Cities and Villages” is a combination of data analysis and local government survey information prepared for the League of Wisconsin Municipalities by the Wisconsin Taxpayers Alliance (WISTAX). ….

….The report’s key findings include:
• Wisconsin’s local governments have been great stewards of limited tax dollars. From 2011 to 2014, total revenues to cities and villages grew just 2.1%, which when adjusted for inflation represented a real decline in funding. Additionally, cities and villages absorbed a 12.8% cut in state support. This contrasts with state revenues, which grew by more than 8% during the same period.
• Cities and villages managed by focusing on public safety. Despite flat revenues, police and fire response times were unchanged. There were reductions in snow plowing response time; street maintenance was flat; and other non-life-safety city services were cut. Yet local leaders reported high levels of citizen satisfaction with municipal services.
• Maintenance of local roads remains a long-term challenge. While 68% of city and village streets ranked “good,” “very good,” or “excellent,” this percentage has been declining since 2009 while the percentage of “fair,” and “poor or worse,” has been increasing.
• Delaying street maintenance projects raises costs exponentially. While basic street resurfacing costs $606,000 per mile, the cost quadruples if the work is deferred and streets need to be reconstructed.
• Municipal borrowing is a growing concern. The report found that local debt service payments have skyrocketed. Municipal budgets now allocate $1 of every $5 to paying off loans for work done in the past. Debt service hovered around 15% between 1986 and 2000. Paying off old debts reduces money available to undertake current street projects and other municipal needs….

Blue Cities, Red States

Source: Abby Rapoport, American Prospect, August 22, 2016

As cities have moved left and states have moved right, the conflicts between them have escalated. ….

…..“PREEMPTION” LAWS ARE not new, nor are they necessarily about undoing local legislation. But with some notable exceptions, past preemption laws have generally enforced what can be called “minimum preemption”: They force localities to do something where they might otherwise have done little or nothing. As it’s often said, they set a “floor” for regulation. For instance, the federal government has been setting minimum standards of environmental protection for years, preempting the states from allowing lower environmental standards. Similarly, states often set a floor for various local regulations, whether regarding pollution, trade licensing, gun ownership, or other matters.

Most current preemption laws, by contrast, are what one might call “maximum preemption.” These laws aren’t about setting minimums; instead, they prohibit local regulation. States have prevented localities from creating paid sick leave requirements for businesses, or raising the minimum wage. Many who oppose these measures blame their proliferation on the conservative American Legislative Exchange Council, known as ALEC, which has drafted “model” preemption bills for state lawmakers to use. “Pretty much anything you can think of that matters to the American family is under assault by local preemption,” says Mark Pertschuk, the director of Grassroots Change, which fights preemption laws around the country……