Category: Law and Inequality

10

Reds

One of the certainties of being a tax policy scholar who is not opposed to all taxes is that I am called names on a regular basis. The most common epithets are the standby favorites of the Cold War era: commie, pinko, commie-pinko, socialist, red, Marxist, Marxist/socialist . . . you get the idea. It pretty much does not matter what one says — again, unless one says that all taxes are theft — but the most surefire way to become subject to this kind of name-calling is to advocate any kind of income redistribution. Thus, while giving a talk last year, someone asked me if my argument might suggest that we should increase the estate tax. When I said yes, another academic (!) in the room said, “Oh, I see, so you believe in ‘from those who have the ability to those who have the need,’ right?”

I bring this up now because of the recent

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The New Gilded Age

Larry Bartels’s new book Unequal Democracy: The Political Economy of the New Gilded Age helps explode some persistent myths about income inequality. We are frequently told that inequality–even the extreme growth in inequality witnessed over the past 30 years–is an inevitable concomitant of globalization, or is necessary for economic growth, or can’t be remedied by politics. Bartels’s work complements the growing consensus–led by people like David Cay Johnston, Jacob Hacker, Stephen Gosselin, Barbara Ehrenreich, and Robert Frank, among many others–that all these complacent contentions are not merely unsupported, but actually reverse the true causes and effects at work. Political change has accelerated US inequality–and only political change can address it.

This quote doesn’t do Bartels’s book justice, but it discloses one foundation of his argument:

[T]he real incomes of middle-class families have grown twice as fast under Democrats as they have under Republicans, while the real incomes of working poor families have grown six times as fast under Democrats as they have under Republicans. These substantial partisan differences persist even after allowing for differences in economic circumstances and historical trends beyond the control of individual presidents. . . .

[E]scalating in equality is not simply an inevitable economic trend—. . .a great deal of economic in equality in the contemporary United States is specifically attributable to the policies and priorities of Republican presidents. . . . .Voters’ seemingly straightforward tendency to reward or punish the incumbent government at the polls for good or bad economic performance turns out to be warped in ways that are both fascinating and politically crucial.

Insights like this should not be news–one need only to look at how lopsidedly the tax cuts of 2001 and 2003 helped the very wealthy in order to see real partisan differences in attitudes about inequality. But it turns out that the same political ignorance that libertarians like Ilya Somin and Bryan Caplan have been complaining about turns out to be quite helpful to their fiscal strategy:

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Who Owes What to the Very Poor?

That’s the subtitle of a new book edited by Thomas Pogge (on a theme that I tried to tackle a few years ago). Bookforum brought two good reviews to my attention. James Sterba of Notre Dame admires the book, but thinks the authors should be more radical:

[Many contributors] seem particularly concerned to empirically demonstrate that social institutions, particularly global ones, have the effect of depriving the poor of the resources they need for a decent life. Pogge, for example, frequently compares current practices to the historical examples of Stalin’s disastrous economic plan of 1930–33 . . . But why is it not enough just to point out that the rich are interfering with the poor by keeping them from using the surplus resources that the rich possess?

The poor clearly are coercively restricted from using the surplus of the rich to meet their own basic needs; and if the poor have no other way to meet those needs, why are these obvious social facts not enough to show that the rich are harming the poor by interfering with them? Suggesting that some complicated empirical argument is needed here, when in fact none is required, may weaken the strong case that exists for a right to freedom from poverty based on a negative right of noninterference. . . .

I would think that recognizing a right to freedom from poverty applicable both to existing and future people requires us to use up no more resources than are necessary for meeting our own basic needs here and now, securing for ourselves a decent life but no more. To use up more resources than this, it would seem, would be to deprive at least some future generations of the resources they would require to meet their own basic needs.

Here’s an excerpt from a review by Brian Harward:

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Taking Inequality Personally

The Washington Times has accused Barbara Ehrenreich of being a Marxist for her work exposing the effects of inequality in the US. (Maybe they bought into that scurrilous Facebook app “What German Philosopher is She“?) I wonder if intellectuals’ attitudes toward inequality are rooted in encounters like these:

In the first meeting of my first seminar of my first year, [real-estate developer Charles] Kushner’s son Jared entered my classroom and promptly took the seat across from mine, sharing the room, so to speak. I was drawing an annual salary of $15,500 and borrowing the remainder for survival in Cambridge, in order that he might be given the best possible education. [About 5 years later] Jared . . . purchased The New York Observer for $10 million, part of which he made buying and selling real estate while also attending my seminar. As publisher, one of his first moves was to reduce pay for the Observer‘s stable of book reviewers. I had been writing reviews for the Observer in an effort to pay my debts.

I guess somebody isn’t going to be supporting estate tax repeal.

Faces in the Immigration Debate

spiderman.jpgStates are passing more immigration laws, and the federal government has done some extraordinary raids recently:

[On May 12] [f]ederal immigration agents raided the Agriprocessors factory, arresting nearly 400 workers, most of them men, for being in the United States illegally. Within minutes of the raid, with surveillance helicopters buzzing above the leafy streets, the wives and children of Mexican and Guatemalan families began trickling into St. Bridget’s Church, the safest place they knew. . . .

Father Ouderkirk [of St. Bridget's] said in an interview . . . . “This has happened after 10 years of stable living. These people were in school. They were achieving. It has ripped the heart out of the community and out of the parish. Probably every child I baptized has been affected. To see them stunned is beyond belief.”

I have no idea what our general policy on immigration should be–suffice it to say that the Wall Street Journal editorial page’s emphatic support for nearly open borders leaves me leery of that kind of extremism. But I also agree with Father Ouderkirk that sudden interventions like the Iowa raid are in no one’s best interests. The dream of providing a better life for one’s family by working hard is the most genuine and pervasive form of heroism available today, as artist Dulce Pinzon writes:

The Mexican immigrant worker in New York is a perfect example of the hero who has gone unnoticed. It is common for a Mexican worker in New York to work extraordinary hours in extreme conditions for very low wages which are saved at great cost and sacrifice and sent to families and communities in Mexico who rely on them to survive.

The Mexican economy has quietly become dependent on the money sent from workers in the US. Conversely, the US economy has quietly become dependent on the labor of Mexican immigrants. Along with the depth of their sacrifice, it is the quietness of this dependence which makes Mexican immigrant workers a subject of interest.

The randomness of raids like that on Agriprocessors seems to make them less about realizing the rule of law than about striking fear into those at the bottom of America’s economic pyramid.

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The Great Risk Shift Continues

Mentioned in these pages in May and fresh off a positive NYT review today, Peter Gosselin has a good editorial in the L.A. Times explaining how law can intensify market-based trends toward inequality:

“People who try to claim their employer-sponsored benefits are worse off than they were two or three decades ago,” said Judge William Acker Jr., who was appointed by President Reagan to the U.S. District Court for the Northern District of Alabama in Birmingham and who has written extensively about ERISA. “The law that was supposed to protect them has been turned on its head.” . . .

[O]ver the last two decades — with relatively little notice and almost no awareness on the part of the buying public — the insurance industry has changed the nature of its policies in ways that leave homeowners on the hook for vastly more than they used to be on the hook for. . . Similar changes — with similar shifts of economic risk from business and government to families — have occurred in retirement, where the switch from traditional pensions to 401(k)s has left individuals largely on their own to provide for old age.

The current recession is less a discontinuity than an intensification of trends that have left more and more Americans feeling financially vulnerable.

Respect for the Troops = Benefits Now

Bilmes & Stiglitz’s book The Three Trillion Dollar War explains in depth how aggressively the Administration has denied benefits to many returning veterans. It’s a natural consequence of going to war while cutting taxes–and given Jonathan Chait’s work, I’m not terribly surprised to see the Social Darwinist wing of the Administration trump the military on this issue. I’m happy to see that some are now starting to challenge these policies in court:

Berkeley-based Disability Rights Advocates filed a lawsuit that could affect thousands of veterans returning from Iraq and Afghanistan. They allege that the Department of Veterans Affairs is unable to provide timely mental health treatment for returning veterans.

Bipartisan resistance to courts’ evisceration of the ADA may also benefit a large number of veterans:

Advocates for people with disabilities say that recent court rulings have made the employment protections of the disability civil rights law almost meaningless, especially to people with diabetes, epilepsy, cancer, and mental illness. . . . Last year, a version of [the ADA Restoration Act] quickly got support from more than half of the House of Representatives. That forced the business community to negotiate. [Now the] bill’s backers hope to give President Bush something he can sign by the end of July.

As any viewer of Iraq: Alive Day Memories knows, many returning veterans will appreciate these developments.

15

Maternity Leave Means Fathers Too

A Commissioner at the Massachusetts Commission Against Discrimination (the Commission) has announced that effective immediately the Massachusetts Maternity Leave Act (MMLA) will apply to new parents of either sex. This means that both mothers and fathers (or both parents in gay marriages) in Massachusetts will be entitled under state law to eight weeks of unpaid leave upon the birth or adoption of their child. (The MMLA applies to employers with six or more employees.)

This announcement by the MCAD is startling for many reasons. First, it appears that the Commission, has rewritten a statute that is clearly gender-based (“maternity” rather than “parental”) to be gender-neutral. The Commissioner admitted as much when he said the reason for the Commission’s interpretation is to avoid the following problem:

“If two women are married [as is legal in Massachusetts] and adopt a child, then they are both entitled to leave under the [MMLA], and yet if two men are married and adopt a child, they would be entitled to no leave under a strict reading of the statute. That result was troubling to us, and we didn’t think it was in keeping with our mandate by statute, which is to eliminate, eradicate and prevent discrimination in Massachusetts.”

The Commission says it “enjoys broad discretion” and so it is applying the statute to avoid what it considers to be a state constitutional problem. Of course, the Commission must apply the law in a constitutional manner, but it does seem to have taken a radical step in this instance without a notice and comment period that most major legislation (or legislative changes) undergo before passage. As some lawyers have said, it creates significant obligations for employers overnight, which obligations may not be what the legislature has intended.

Second, the Commission’s interpretation of the statute appears to understand the “discrimination” the MMLA seeks to eradicate as discrimination against parents rather than against women. I don’t know the history behind the MMLA, but its title (and language) suggests that the gist of the law was not to eradicate discrimination against parents but against mothers. (The word “female employee” is all over the statute.)

The big question for me, however, as I read this news is whether I care how startling it is and whether instead I should jump for joy that finally FINALLY some official legal body has recognized in a brave (however radical and oblique) way that gender equality requires that fathers/spouses be equal parents of newborns with mothers. I don’t think it a radical idea (although people I mention it to think it novel and curious) that the disparity in child care in our society — where most women are in charge of child care in their household despite more than sixty percent of mothers working outside of the home — is rooted in maternity leave, a gendered leave policy that creates inequality in the competence and expectations for child care. (To be sure, the FMLA is gender neutral and passed under congress’s section five powers as a remedial and prophylatic measure to combat sexism. But the MMLA targets infant child care specifically where as the FMLA covers diverse family relationships. For a quick comparison of the MMLA and FMLA see here.) By interpreting the MMLA in this way, the Commission has given most fathers/spouses in the Commonwealth the right to stay home with their newborn.

I have long lamented the accommodation of maternity leave – not because I think it unnecessary for mothers but because it creates an expectation that mothers (and not fathers/spouses) will stay home with the baby when born or adopted. In addition to providing time to physical recuperate from labor (which for most women takes between two and four weeks), maternity leave (especially for new moms) is a form of boot-camp, teaching women how to care for an infant by forcing the togetherness. Most women don’t know any better than most men how to calm a fussy baby, how to feed a baby, how to swaddle a baby or put her to sleep. These skills are gender-neutral. When do women become more competent than men at these tasks? When they care for their own newborn during maternity leave (or, admittedly, when they have taken a job caring for children or cared for a sibling or friend’s child prior to having their own child). Maternity leave is a three month (sometimes more) “head start” in the child-care department. And this head-start often sets the parameters for child-care duties in the future. At four months when a mother is back at work, that mother is typically better at soothing and dressing and feeding the baby because she has done it so often the past twelve weeks while her husband/spouse was at work. It makes sense, therefore, at the end of the work day, that when the baby is fussy or hungry that she calms and feeds the baby because she is better at it. This is an efficient division of labor. But it also relegates her to the “second shift,” one that mothers have historically complained about, whereby she works in the office all day and in the house all night. And this gendered child care dynamic is entirely avoidable if fathers/spouses became as competent as mothers in the earliest days of their baby’s life. Three months of total immersion in child care is a long time. Ask any parent: the learning curve is a steep one. And when the baby is crying, you want the most skilled person to calm that baby (i.e., the person who can succeed the fastest at the task). This is often the person who stayed home with the baby, and it is usually the woman.

So back to the Commission’s announcement. What it might accomplish if applied to both parents is to encourage them to become equally competent at caring for their newborn at an early enough stage in the parenting relationship to prevent gender inequality in child care in the future. And it sends the message that both parents are crucial to nurturing the child – which is of course true. How will it apply in practice? Does it allow for the possibility that one parent might stay home for the first eight weeks and the other parent for the second eight weeks? Would it allow for both parents to stay home at the same time? Either way, I hope this significantly changes the parental leave landscape in Massachusetts – for the better. It is long overdue that fathers/spouses be expected to care for their newborns as mothers are expected to. I would bet that many fathers/spouses would relish the idea of a three month leave to care for their new child. And I have no doubt that children will be better off for it. I applaud the Commission.

The Curiously Non-Ideological Debate over the “Falling Down Professions”

Over the past year, law and medicine have been characterized as the “falling down professions“–losing both status and economic clout to “masters of the universe” in CEO suites and Wall Street offices. We now better understand some of the sources of those Wall Street profits. But as doctors and lawyers in training lament their plights on message boards, I’m struck by the curiously non-ideological nature of their complaints. Most appear to believe themselves afflicted by economic forces as natural and unavoidable as a tsunami–when in fact it’s political decisions that have led us to where we are.

Whatever complaints the young lawyer or doctor has today, they must be contextualized in a larger economy. As Nan Mooney’s new book (Not) Keeping Up With Our Parents: The Decline of the Professional Middle Class argues, most young professionals today feel more financially pressed than their boomer parents. Basic costs of health, education, and housing have skyrocketed. In the health arena, politicians are adopting policies that allow more and more of the costs of health care to be shifted from the government and employers to individuals. Alan Greenspan disastrously inflated the housing market, and anyone in a big urban area on the coast is caught up in the uncertainty of wondering whether an inflation-fearing Fed will shock prices back to normal or if “Helicopter Ben” Bernanke will keep the easy money flowing.

I could go on and on, but just look at the recent spate of books on new middle class anxiety:

*Elizabeth Warren and Amelia Warren Tyagi, The Two-Income Trap.

*Jared Bernstein, Crunch.

*Steven Greenhouse, The Big Squeeze.

*Peter Gosselin, High Wire: The Precarious Financial Lives of American Families.

*Barbara Ehrenreich, Bait and Switch.

*Jacob Hacker, The Great Risk Shift.

Each of these authors examines particular political and legal decisions to shift risk from government and business and onto individuals. So those who feel economically insecure today shouldn’t think their worries are the bane of a particular profession or region, or the inevitable result of global economic change that could be remedied if they could just get a bit more education. And a final note for practicing attorneys: it would be quite surprising if an ideological movement to shut the courthouse door to the injured failed to threaten your livelihood. Just as primary care doctors should not be surprised if their incomes suffer in the face of extraordinary efforts by the federal government to avoid spending money to help those entitled by law to care.