Author: Dave Hoffman

2

The Dignity of the Minimum Wage?

[A brief note of apology: it's been a terrible blogging summer for me, though great on other fronts.  I promise I'll do better in the coming academic year. In particular, I'd like to get back to my dark fantasy/law blogging series. If you've nominations for interviewees, email me.]

WorkDetroitThis is one I’ve been meaning to write for a while.

One of the major lessons of the cultural cognition project is that empirical arguments are a terrible way to resolve value conflicts. On issues as diverse as the relationship between gun ownership and homicide rates, the child-welfare effects of gay parenting, global warming, and consent in rape cases, participants in empirically-infused politics behave as if they are spectators at sporting events. New information is polarized through identity-protective lenses; we highlight those facts that are congenial to our way of life and discounts those that are not; we are subject to naive realism.  It’s sort of dispiriting, really.  Data can inflame our culture wars.

One example of this phenomenon is the empirical debate over minimum wage laws. As is well known, there is an evergreen debate in economics journals about the policy consequences which flow from a wage floor.  Many (most) economists argue that the minimum wage retards growth and ironically hurts the very low-wage workers it is supposed to hurt. Others argue that the minimum wage has the opposite effect. What’s interesting about this debate -to me, anyway- is that it seems to bear such an orthogonal relationship to how the politics of the minimum wage play out, and the kinds of arguments that persuade partisans on one side or another. Or to put it differently, academic liberals in favor of the minimum wage have relied on regression analyses, but I don’t think they’ve persuaded many folks who weren’t otherwise disposed to agree with them. Academic critics of the minimum wage too have failed to move the needle on public opinion, which (generally) is supportive of a much higher level of minimum wage than is currently the law.

How to explain this puzzle?  My colleague Brishen Rogers has a terrific draft article out on ssrn, Justice at Work: Minimum Wage Laws and Social Equality. The paper urges a new kind of defense of minimum wages, which elides the empirical debate about minimum wages’ effect on labor markets altogether. From the abstract:

“Accepting for the sake of argument that minimum wage laws cause inefficiency and unemployment, this article nevertheless defends them. It draws upon philosophical arguments that a just state will not simply redistribute resources, but will also enable citizens to relate to one another as equals. Minimum wage laws advance this ideal of “social equality” in two ways: they symbolize the society’s commitment to low-wage workers, and they help reduce work-based class and status distinctions. Comparable tax-and-transfer programs are less effective on both fronts. Indeed, the fact that minimum wage laws increase unemployment can be a good thing, as the jobs lost will not always be worth saving. The article thus stands to enrich current increasingly urgent debates over whether to increase the minimum wage. It also recasts some longstanding questions of minimum wage doctrine, including exclusions from coverage and ambiguities regarding which parties are liable for violations.”

I’m a huge fan of Brishen’s work, having been provoked and a bit convinced by his earlier work (here) on a productive way forward for the union movement. What seems valuable in this latest paper is that the minimum wage laws are explicitly defended with reference to a widely shared set of values (dignity, equality). Foregrounding such values I think would increase support for the minimum wage among members of the populace.  The lack of such dignitary discussions in the academic debate to date has level the minimum wage’s liberal defenders without a satisfying and coherent ground on which to stand. Worth thinking about in the waning hours of Labor’s day.

 

 

1

Temple Law Hiring Announcement

On behalf of this year’s committee, I pass along the following:

Temple University James E. Beasley School of Law invites applications from both entry-level and lateral candidates for full-time, tenure-track faculty positions to commence in the Fall Semester 2014.  We welcome applications from candidates with a wide variety of interests.  Although areas of need are subject to change, priority areas are likely to include health law, business and commercial law, civil procedure, intellectual property, law and technology, trust and estates, torts, and employment law/employment discrimination.

Lateral candidates should contact Professor Gregory Mandel, Lateral Faculty Appointments Subcommittee (gmandel@temple.edu).  Entry level candidates should contact Professor Donald Harris, Faculty Appointments Subcommittee (donald.harris@temple.edu).  Temple University is committed to a policy of equal opportunity for all in every aspect of its operations.  The University has pledged not to discriminate on the basis of an individual’s age, color, disability, marital status, national or ethnic origin, race, religion, sex (including pregnancy), sexual orientation, gender identity, genetic information or veteran status.

 

0

Guest Post: Jonathan Lipson on the Mess in Detroit

Lipson_WebPhotoSorry to interrupt the symposium, but this is in the way of a breaking law-news update.  I asked Jonathan Lipson (Temple), a former guest blogger here and all-around bankruptcy superstar, to offer our readers some thoughts on the recent decision out of the Detroit bankruptcy.  Here are his views:

Detroit: Kicking the Federalism Question Down the Rhodes

Yesterday, Bankruptcy Judge Steven Rhodes stayed a state court suit to derail Detroit’s chapter 9 bankruptcy.  While Judge Rhodes may ultimately dismiss the bankruptcy petition on his own, the decision forestalls one of the harder questions underlying the filing: To what extent may an Article I bankruptcy judge approve a bankruptcy plan that (may) conflict with state constitutional protections for municipal union members?

The answer will be difficult for several reasons, mostly having to do with the recursive interactions between federal and state law in this context. Bankruptcy Code § 943(b)(4) permits a bankruptcy judge to approve a “plan of adjustment” (as it is called) if the “debtor is not prohibited by law from taking any action necessary to carry out the plan.”

While chapter 9 case-law is sparse, one court has interpreted this to mean that it could not approve a plan that altered state-law priority-protections for bondholders. In re Sanitary & Improv. Dist. #7, 98 B.R. 970 (Bankr. D. Neb. 1989). Municipal union members may cite this, and then point to Michigan’s constitution, which provides:  “The accrued financial benefits of each pension plan and retirement system of the state and its political subdivisions shall be a contractual obligation thereof which shall not be diminished or impaired thereby.” Mich. Const. Article IX, § 24.

Because the plan proposed by Detroit’s emergency financial manager, Kevyn Orr, apparently reduces accrued benefits significantly, retirees would argue that the plan would diminish and impair their contractual rights.

But Orr may respond in three ways. First, he may cite the recent City of Stockton case, and argue that state law cannot prevent a municipal debtor from “adjusting” (i.e., reducing) debts, because federal law is supreme.  See In re City of Stockton, 478 B.R. 8, 16 (Bank. E.D. Cal. 2012).  Of course, if the federal law in question (the Bankruptcy Code) defers to conflicting state law, this argument doesn’t get him very far.

So, his second move may be to argue that a plan that diminished accrued contractual benefits would not violate the law, because it has long been accepted that the Bankruptcy Power is far greater with respect to contract rights than property rights.

As I (and others) have explained elsewhere, this distinction seems foundational.  Michigan’s constitution may protect municipal union members’ contract rights, in other words, but that’s all they are: contract claims, subject to “adjustment” under federal bankruptcy law.  If municipal retirees had really wanted solid protection, Michigan’s constitution should have characterized their accrued benefits as “property,” not “contract,” rights.

Third, and most instrumentally, the Michigan constitution does not appear to prevent Orr from exiting current agreements prospectively.  Bankruptcy Code section 365 would give Detroit the power to reject such contracts if they are burdensome (there are actually a couple different rejection standards, but it seems likely he could meet them).  Even if Orr’s hands are tied as to accrued obligations, the argument would go, he could terminate large numbers of current employees, some of whom he may rehire at lower wages.  If municipal employees want their jobs back, they (or their unions) would have to compromise accrued benefits claims.

This would in effect pit current employees against former ones (retirees).  Like those who have successfully reorganized mass-tort, Orr may be able to use this tension to extract concessions from the unions.  Or, the unions may be able to use this same tension to get a better deal than the one that’s on the table.

Either way, setting up these sorts of bargains is, in my view, one of the most important federal interests here.  I have argued in the context of the Catholic Church bankruptcies, for example, that that should be the system’s overarching goal, especially in normatively difficult cases.

Yet, further confounding the analysis are the mixed signals the Supreme Court has sent on the interaction between Congress’ Article I powers (especially bankruptcy court power, in cases such as Stern v. Marshall) and “states’ rights.”  On one hand, cases such as Seminole Tribe and Alden (and, indirectly, Stern) suggest that the Court takes state sovereignty seriously:  the federal government has limited powers to intrude into states’ affairs, which may include interpreting their constitutions (okay, let’s ignore Bush v. Gore).  On the other hand, cases such as Hood and Katz suggest that the Court will make an exception for bankruptcy, discharging state claims and permitting suits against states to recover preferential transfers, respectively (okay, let’s ignore Stern).  Perhaps Judge Rhodes will have a relatively free hand here.

How this will unwind in Detroit is difficult to predict, but seems likely to matter to the outcome. In the meantime, we will have to wait for Judge Rhodes to decide whether to permit Detroit’s case to go forward at all.  Bankruptcy Code section 921(c) provides that the bankruptcy “order for relief” cannot be entered until resolving objections to the petition.  This can include an objection that the filing “does not meet the requirements of this title.”

The unions are likely to argue that Detroit’s bankruptcy petition flunks because Orr’s plan would violate the state constitution, as “incorporated” by Bankruptcy Code section 943(b)(4).  Orr would respond by arguing the supremacy of federal bankruptcy law, perhaps along the lines noted above . . . . And so on.

Given these complexities, it would be understandable if Judge Rhodes wanted to kick the federalism question further down the road, in the hope that all major stakeholders—e.g., bondholders and employees—can avoid the costs of litigating these questions, and settle them in a plan they agree on.

10

What Would Happen if USNews Didn’t Weigh Money?

no-money-300x300-150x150Recently the ABA announced that it will no longer collect expenditures data from law schools: Leiter and Merritt offer thoughts on how that decision will influence the USWR rankings.  Both posts are interesting, though somewhat impressionistic.  Leiter thinks that state schools will benefit and Yale will lose it’s #1 spot; Merritt believes that USWR should reconfigure its method. [Update: Bodie adds his two cents.]

It’s well known that the influence of particular categories of data on the ranking can’t be determined simply by reading the charts that the magazine provides. Paul Caron notes that the rankings depend on on inputs that aren’t displayed (like expenditures). But it gets worse: (1) the point accumulation of each school influences that of every other school; (2) USWR changes the raw data through manipulations that are not well explained (placement discounts for law school funded positions) or are simply obscure (CoL adjustments for expenditures); (3) many schools don’t report information and USWR doesn’t advertise their missing-data imputation method; etc. etc. Bottom line: the rankings are very, very fragile.  (Many would say they are meaningless except at 10,000 feet.)  Luckily, Ted Seto’s work enables everyone to give their best shot to approximating each year’s ranking.  Seto argues that variance within a category turns out to influence the final scores as much as the purported weight that USWR assigns to it.

As thought experiment, I decided to estimate what would happen if each school’s expenditure data was set to average school’s expenditure.  I then used Seto’s method on 2011-2012 historic data to estimate the rankings in the absence of expenditure variance.  This basically eliminates the influence of expenditure as a category.  (A perhaps better, but more time consuming, approach would be to eliminate the expenditure categories altogether and re-jigger the equation accordingly). My back-of-the-napkin approach produces some wacky results, particular at the lower end of the ranking scale.  To keep it simple, after the jump I’ll focus on the top ten winners and losers from the elimination of expenditure variance in the 2013 t100 and then offer some thoughts.

Read More

15

The Humble Justice Scalia

Justice Scalia isn’t often justly lauded for his humility.  Today’s opinion in Molecular Pathology v. Myriad (the gene patenting case) provides an opportunity. His concurrence reads, in its entirety:

“I join the judgment of the Court, and all of its opinion except Part I–A and some portions of the rest of the opinion going into fine details of molecular biology. I am un-able to affirm those details on my own knowledge or even my own belief. It suffices for me to affirm, having studied the opinions below and the expert briefs presented here, that the portion of DNA isolated from its natural state sought to be patented is identical to that portion of the DNA in its natural state; and that complementary DNA (cDNA) is a synthetic creation not normally present in nature.”

There’s something heart-warming about this short opinion — a bit like Justice Steven’s ode to jalopies and country roads in Scott.  It’s also a useful model of rhetorical humility in the face of pretty complex science. Justice Scalia is ordinarily celebrated for his caustic wit & slashing attacks: we should be happy when he takes a different approach.

10

Sherlock and the Law

sherlockLike many, I’ve been watching the BBC’s Sherlock, a modern re-telling of Arthur Conan Doyle’s detective series. I’m only mostly finished the first series, but thus far it has been striking how little role law (and its constraints) play in the narrative.  Basically, although Sherlock is a “consulting detective” (and under US rules, certainly an agent of the State), he routinely behaves in unlawful ways.  He often breaks into dwellings (and cellphones, and cars) to get information; he is resistant to writing up his methods (and consequently, a defense attorney would not be able to effectively examine them); he browbeats suspects and witnesses; etc.  In the States, quite obviously, all of the confessions produced by his methods would be thrown out as poisoned fruit.

There’s nothing earth-shaking here – and it’s not the only time that law is devalued by storytellers – but I wondered whether and to what extent a series based primarily in the UK can avoid barnacled procedural discussions in a way that a series based in the US obviously can not.  That would then suggest that Elementary, a CBS show that apparently apes Sherlock in many ways, would spend more time talking about law (and the rules of criminal procedure) than Sherlock does. I haven’t seen the former show, so I’d love to be disabused of my fear that Elementary’s Sherlock spends most of his time filling out paperwork and discoursing on the complicated rules of electronic surveillance.

0

Introducing Guest Blogger Stephen Galoob

I’m pleased to introduce Stephen Galoob as a guest for the month of June.

Stephen is (as of June 1) an assistant professor at the University of Tulsa College of Law. He is a graduate of UVA law school and is finishing his Ph.D. at U.C. Berkeley’s Jurisprudence and Social Policy program.

Stephen’s scholarly work examines fundamental questions in criminal law, torts, contracts, and professional responsibility. (Although let’s be honest- does anyone ever claim that his work examines peripheral questions?)

Stephen’s dissertation, A Liberal Theory of Reparation, examines the significance of wrongs and injustices, as well as proposing an account of the justification for reparation based on the contractualist liberalism of John Rawls and T.M. Scanlon.

Stephen also writes in the field of legal ethics. His work in this area examines how professional roles in general (and the lawyer’s role in particular) have normative significance—that is, how they change what their occupants are permitted, forbidden, or required to do. Stephen examines these questions using tools from both philosophy and empirical social science. For example, his article Are Legal Ethics Ethical? (co-authored with Su Li, and forthcoming in the Georgetown Journal of Legal Ethics) uses a survey-experiment to examine the connection between legal ethics rules and lay moral judgments.

0

Introducing Guest Blogger Katie Eyer

We’re delighted to welcome Katie Eyer, of Rutgers-Camden Law School, as a guest for the month.

Katie joined the Rutgers Camden law faculty as an Assistant Professor in June 2012.  Her work, which takes multidisciplinary approaches to questions of contemporary anti-discrimination law, has appeared or is forthcoming in journals such as the University of Pennsylvania Law Review, the Minnesota Law Review and the Yale Law & Policy Review.  Her most recent work-in-progress, titled “Constitutional Colorblindness and the Family,” was recently awarded Honorable Mention in the 2013 AALS Scholarly Papers Competition, where it was described by the selection committee as “saying something new and compelling about constitutional colorblindness.”

Prior to coming to Rutgers, Katie was a Research Scholar and Lecturer at the University of Pennsylvania, where she conducted research in conjunction with the Alice Paul Center for Research on Women, Gender and Sexuality and taught Disability Law.  Katie also litigated civil rights cases prior to entering academia full time, and secured a number of precedents in the Third Circuit expanding the legal rights of LGBT and disabled employees, including Prowel v. Wise Business Forms, 579 F.3d 285 (3d Cir. 2009) and Miller v. American Airlines, 632 F.3d 837 (3d Cir. 2011).

Katie clerked for the Hon. Guido Calabresi in 2004-2005, and was a Skadden Fellow at Equality Advocates Pennsylvania from 2005-2007.  She was a litigator with the private firm of Salmanson Goldshaw, PC until April 2012.

Her recent work includes:

Constitutional Colorbindness and the Family, 162 U. Pa. L. Rev. __ (2013) (forthcoming, selected as Honorable Mention in the 2013 AALS Scholarly Papers Competition).

Essay, Marriage This Term: On Liberty and the “New Equal Protection”, 60 UCLA L. Rev. Disc. 2 (2012) 

That’s Not Discrimination: American Beliefs and the Limits of Anti-Discrimination Law, 96 Minn. L. Rev. 1275 (2012) (reviewed here by Charles Sullivan on JOTWELL).

 

 

2

Contract Evolution

There’s a fantastic symposium issue out of NYU this month, devoted to evolution and innovation in contract terms.  There are articles by the ridiculously productive trinity of Choi/Gulati/Posner, a wild piece by Kevin Davis on Contracts as Technology, and a very cool empirical paper by Marotta-Wurgler and Taylor on evolving terms in standard form contracting online.  I’m obviously biased toward empirical work on this exact topic, so I’m a sucker for this stuff.  But I do think that this kind of empirical and theoretical work is where contract scholarship should be heading in the next 10-20 years.  Check it out.

 

13

Is it better for one student to get a job than n students to fail the bar?

A student’s final law school GPA predicts bar passage better than other independent variables. But the relationship isn’t causal: raising the mean GPA of all students does not promote bar passage.  Indeed, some investigators have suggested that the inverse is more likely to be true. When GPA rises for all students, individuals at the bottom of the class aren’t sufficiently signaled that their grades are really and truly bad, and consequently such badly-warned students don’t approach bar study with the requisite degree of seriousness. That is, if a school has a mean of a 3.3 at graduation, the bottom 20% of the class probably has GPA of around a B-.  B- students may well say to themselves “sure, I’m at the bottom of the class, but I’m not a C student!  I’m not in danger of failing the bar!”  But they are.  In this perverse way, raising the mean increases the rate at which weaker students fail the bar, even as overall, grades are positively correlated with passing!

The puzzle deepens. Students often argue that employers focus on mean GPA to the exclusion of class rank.  Given that students are competing with other schools (nationally and regionally), there are race-to-the-bottom pressures on each law school’s curve generated by employment markets.  A school that produces students at the 50th percentile with a 3.5 mean will obtain better employment outcomes than one that produces students at the 50th percentile with a 3.0 mean. All else equal, schools should reduce barriers to employment.  (Of course this result depends on employers indeed acting in the irrational manner described – ignoring or downplaying class rank and focusing on absolute GPA.  This would be very, very difficult to test empirically, though I imagine someone could give it a shot using nifty studies.)

You see the tension, right?  A higher mean simultaneously could boost employment in the middle and higher end of the class while also depressing bar passage at the lower end of the class. These contrasting outcome effects turn on psychological biases resulting from overemphasizing raw grades over percentile rank, but simply providing class rank instead of grades would cause employers to balk. The tension may lead administrators and faculty to an uncomfortable question: when the two conflict, should we privilege bar passage over employment? What is the appropriate calculus? Could we live with one additional student failing the bar if two got a job?

My own view is that the price for bar failure is so high that the number of jobs won in this calculus would have to be unrealistically high.  Consequently lower means are to be preferred to higher ones at some schools.  What do you think?