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Article Artículo

Charles Lane Comes Out Against Freedom of Contract

Washington Post columnist Charles Lane took great leaps in philosophical thinking today, coming down firmly against freedom of contract when it comes to public sector unions. In the course of the discussion Lane develops several new principles for guiding public sector policy.

The starting point is whether public sector workers can sign contracts that require all the workers who are represented by a union to pay for that representation. The courts have long upheld that workers could negotiate such contracts. The remedy for workers who feel so strongly opposed to unions that they don't want anything to do with them is to work for a different employer.

It is difficult to see why other workers should be forced to pay for a worker's representation. Under the law, non-union workers not only get the same pay and benefits as everyone else covered by the union contract, they also are entitled to representation by the union in a grievance or disciplinary action. This is the rationale for requiring them to pay for representation even though they do not have to pay for union activities, such as supporting political candidates.

But Lane is going beyond just this issue that the Supreme Court is now considering. He apparently wants to outlaw public sector unions. He writes:

"Is public-sector collective bargaining in the public interest?

"The answer is no. All members of the public use schools, roads, parks and other government services — and pay taxes to support them. Their interest lies in receiving the highest-quality services at the lowest feasible cost. Period."

I kind of like this one. The public's interest is in the highest-quality services at the lowest feasible cost. Period."

Let's see, the government pays for lots of things like computers, paper, desks and chairs for school kids. Why should we pay for them? Why not just take them from the companies that produce them? After all, "the public's interest is in the highest-quality services at the lowest feasible cost. Period." 

Do you think that might be wrong, that it might be stealing? What part of Lane's declaration don't you understand?

Maybe we could get people to work for lower pay if we threatened them or their families. Remember "the public's interest is in the highest-quality services at the lowest feasible cost. Period."

Dean Baker / January 28, 2014

Article Artículo

Inequality

Workers

SOTU Minimum Wage FAQ
In Tuesday's State of the Union address President Obama will likely repeat the call made he made in last year's speech to raise the federal minimum wage. Just in case, here's an FAQ on the minimum wage.

John Schmitt / January 27, 2014

Article Artículo

Workers

Cities and Minimum Wages

In recent months, the minimum wage has moved to the center of the economic policy debate. Proposals for minimum-wage increases are being introduced at the local, state, and national levels of government. Nationally, President Obama is working alongside Congressional Democrats on a push to raise the federal minimum wage from its current level of $7.25 to $10.10 by 2016.

At the state level, 20 states and the District of Columbia have minimum wages above the federal level, and on January 1, 2014, 13 states raised their minimum wage, with California set to follow suit with an increase to $9 in July. Of these 14 state increases, 9 are automatic adjustments based on indexing the value of the minimum wage to the cost of living, while 4 (NJ, CT, NY, RI) are the product of either ballot-measures or legislative action.

CEPR and Jeffrey Gianattasio / January 27, 2014

Article Artículo

Brazil

Latin America and the Caribbean

Venezuela

World

Brookings Institution Calls on Obama to Support a Hypothetical Coup Against Venezuela's Maduro

On Thursday, the Brookings Institution issued a memo to President Obama titled “Venezuela Breaks Down in Violence.” As might be expected from the title, the memo (and an accompanying video) depicts an alarming situation where

Venezuela is experiencing declining export revenues, accelerating inflation and widespread shortages of basic consumer goods. At the same time, the Maduro administration has foreclosed peaceful options for Venezuelans to bring about a change in its current policies.

But, contrary to the alarmist title, the violence is only a possibility in the future: “Economic mismanagement in Venezuela has reached such a level that it risks inciting a violent popular reaction,” and further on the reader learns that actually “[t]he risk of a violent outcome may still be low…”

The possibility of such chaos is troubling to the author, Harold Trinkunas since “it is in the U.S. interest that Venezuela remain a reliable source of oil,” while “[p]opular unrest in a country with multiple armed actors, including the military, the militia, organized crime and pro-government gangs, is a recipe for unwelcome chaos and risks an interruption of oil production.”

Trinkunas, who “previously served as an associate professor and chair of the Department of National Security Affairs at the Naval Postgraduate School in Monterey, California” urges the Obama administration to take action. At the top of his recommendations is for the U.S. to enlist Brazil – “whose interests are also at risk” - in an attempt “to convince the Maduro administration to shift course.”

Trinkunas makes clear what course he wants the U.S. government to take should a crisis result in Maduro being removed from power. While one might think that such a hypothetical scenario would indeed be one when the Inter-American Democratic Charter should be invoked (Trinkunas suggests that it be used against Maduro now), that would be naïve. Instead:

…we should also begin quiet conversations with others in the hemisphere on what steps to take should Venezuela experience a violent breakdown of political order. Such an event could potentially fracture the regional consensus on democracy on a scale much greater than that of the Honduran coup in 2009. Maduro’s allies in the region would most likely push for his immediate restoration, but in the absence of functioning democratic institutions, this would only compound Venezuela’s internal crisis. The United States would need to work with key states in the region—Brazil, Mexico, Chile, Peru and Colombia—on a regional consensus in favor of rebuilding democracy in Venezuela.

CEPR / January 25, 2014