Saturday, August 30, 2014

[NJFAC] Poverty Capitalism Expands

The Expanding World of Poverty Capitalism Thomas B. Edsall, NY Times, 8/26/14

In Orange County, Calif., the probation department's "supervised electronic confinement program," which monitors the movements of low-risk offenders, has been outsourced to a private company, Sentinel Offender Services. The company, by its own account, oversees case management, including breath alcohol and drug-testing services, "all at no cost to county taxpayers."

Sentinel makes its money by getting the offenders on probation to pay for the company's services. Charges can range from $35 to $100 a month.....

Sentinel is a part of the expanding universe of poverty capitalism. In this unique sector of the economy, costs of essential government services are shifted to the poor.

In terms of food, housing and other essentials, the cost of being poor has always been exorbitant. Landlords, grocery stores and other commercial enterprises have all found ways to profit from those at the bottom of the ladder.

The recent drive toward privatization of government functions has turned traditional public services into profit-making enterprises as well.....

As N.P.R. reported in May, services that "were once free, including those that are constitutionally required," are now frequently billed to offenders: the cost of a public defender, room and board when jailed, probation and parole supervision, electronic monitoring devices, arrest warrants, drug and alcohol testing, and D.N.A. sampling. This can go to extraordinary lengths: in Washington state, N.P.R. found, offenders even "get charged a fee for a jury trial — with a 12-person jury costing $250, twice the fee for a six-person jury."

This new system of offender-funded law enforcement creates a vicious circle: The poorer the defendants are, the longer it will take them to pay off the fines, fees and charges; the more debt they accumulate, the longer they will remain on probation or in jail; and the more likely they are to be unemployable and to become recidivists.....

Last year, Ferguson, Mo., the site of recent protests over the shooting of Michael Brown, used escalating municipal court fines to pay 20.2 percent of the city's $12.75 million budget. Just two years earlier, municipal court fines had accounted for only 12.3 percent of the city's revenues.....

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National Jobs for All Coalition
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Tuesday, August 26, 2014

[NJFAC] At Amazon.com "cheap" comes at a very hefty price, reports Hightower LowDown

It's time to pay attention to what Jeff Bezos and his online retail colossus are doing

Like Walmart, only with supercomputers and drones: At Amazon.com "cheap" comes at a very hefty price

....The warehouses are dehumanizing hives in which Bezos has produced his own Kafkaesque sequel to Modern Times.

Consider the job of "picker." In each warehouse, hundreds of them are simultaneously scrambling throughout a maze of shelves, grabbing products. This is hard, physically painful labor, for two reasons. First, pickers must speed-walk on concrete an average of a dozen miles a day, for an Amazon warehouse is shockingly big-- more than 16 football fields big, or eight city blocks--and pickers must constantly crisscross the expanse. Then, there are miles of seven-foot-high shelves running along the narrow aisles on each floor of the three-story buildings, requiring the swarm of pickers to stoop continuously. They are directed by handheld computers to each target. For example, "Electric Flour Sifters: Dallas sector, section yellow, row H34, bin 22, level D." Then they scan the pick and must put it on the right track of the seven miles of conveyor belts running through the facility, immediately after which they're dispatched by the computer to find the next product.

Secondly, the pace is hellish. The pickers' computers don't just dictate where they're to go next, but how many seconds Amazon's time-motion experts have calculated it should take them to get there. The scanners also record the time each worker actually takes--information that is fed directly into a central, all-knowing computer. The times of every picker are reviewed and scored by managers who have an unmerciful mandate to fire those exceeding their allotted seconds.
....
Likewise, the two 15-minute breaks awarded by the Amazonians include the mass of co-workers scampering a half mile or more to the break room, waiting in line to pass through the despised metal detector and another line if you need to pee. The fifteen-minute "break" is usually reduced to a harried hiatus of under seven minutes.
....

There's even a category of uniquely vulnerable Americans that Amazon goes after: "Workampers," they're called. These are modern day migrants who could've stepped right out of a Steinbeck novel or Woody Guthrie song. Unable to get stable jobs, they travel in RV campers, taking whatever temporary work they can get, then move on down the road. ....

The temp agencies that are, in essence, the hiring offshoots of Amazon, have long lines of hard-up applicants waiting for every job in its warehouses, so oppressive conditions and ruthless work requirements that constantly cause workers to quit, be fired, or pass out are no problem for Bezos. By paying just one notch above McDonald's, he draws tens of thousands of people willing to get in line for exploitation.

Amazon smells today's mass desperation, preys on it, and thrives on it. That is the "magic" behind its super-cheap prices and super-efficient delivery system.

....Phase two is to take advantage of recent advances in artificial intelligence and ultimately replace all floor workers with robots.

....

Yes, you can say there's no humanity in Amazon warehouse jobs anyway, so who cares? Well, those workampers and others who have nowhere else to go care. It's a barren and wretched social vision that posits abusive jobs or no jobs as our choice. Last November, Amazon placed 1,382 Kiva robots on the floors of three of its warehouses. In addition, Amazon/Kiva is developing automated fulfillment systems for such other retail giants as Gap, Staples, and Walgreens.

The future of work is not creeping up on us, it's sprinting past us.

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National Jobs for All Coalition
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Tuesday, August 19, 2014

[NJFAC] Inversion: "'Competitiveness' Has Nothing to Do With It"

Have you wondered why corporations with some of the industrial world's lowest tax rates, are shifting ownership abroad?

"Competitiveness" Has Nothing to Do With It Edward D. Kleinbard

ABSTRACT
The recent wave of corporate tax inversions has triggered interest in what motivates these taxdriven transactions now. Corporate executives have argued that inversions are explained by an "anti-competitive" U.S. tax environment, as evidenced by the federal corporate tax statutory rate,
which is high by international standards, and by its "worldwide" tax base. This paper explains why this competitiveness narrative is largely fact-free, in part by using one recent articulation of that narrative (by Emerson Electric Co.'s former vice-chairman) as a case study.

The recent surge in interest in inversion transactions is explained primarily by U.S. based multinational firms' increasingly desperate efforts to find a use for their stockpiles of offshore cash (now totaling around $1 trillion), and by a desire to "strip" income from the U.S. domestic tax base through intragroup interest payments to a new parent company located in a lower-taxed foreign jurisdiction. These motives play out against a backdrop of corporate existential despair over the political prospects for tax reform, or for a second "repatriation tax holiday" of the sort
offered by Congress in 2004.

The paper can be downloaded at http://papers.ssrn.com/sol3/Papers.cfm?abstract_id=2476453 with a free registration.

Thanks to a NY Times article, "Report Suggests Tax Burden Is Not So Heavy."

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National Jobs for All Coalition
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Sunday, August 10, 2014

[NJFAC] government role in technological innovation

Jeff Madrick review. Innovation: The Government Was Crucial After All:

Mariana Mazzucato "shows in detail that, while Steve Jobs brilliantly imagined and designed attractive new commercial products, almost all the scientific research on which the iPod, iPhone, and iPad were based was done by government-backed scientists and engineers in Europe and America. The touch-screen technology, specifically, now so common to Apple products, was based on research done at government-funded labs in Europe and the US in the 1960s and 1970s."

See her

THE ENTREPRENEURIAL STATE

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National Jobs for All Coalition
http://www.njfac.org/

Tuesday, August 5, 2014

[NJFAC] Unemployment Benefits Prevented 1.4 Million Foreclosures

Extending Unemployment Benefits During The Recession Prevented 1.4 Million Foreclosures

by Bryce Covert August 4, 2014

"Extending Unemployment Benefits During The Recession Prevented 1.4 Million Foreclosures"

Extending unemployment insurance during the recession didn't just give the unemployed some extra income, but actually prevented millions from being foreclosed on, according to a new study from Joanne W. Hsu, David A. Matsa, and Brian T. Melzer.

Given that different states have different amounts they'll pay out in unemployment benefits — in 2011 it ranged from $6,000 in Mississippi to $28,000 in Massachusetts — the researchers looked at what impact more generous benefits had on mortgage delinquency. They found that for every $1,000 extra in maximum benefits, the likelihood that an unemployed worker's mortgage would go into delinquency declines by 25 basis points. Getting benefits for a longer period has a similar effect, as each additional week decreases the chance of delinquency by 34 basis points. "Based on this variety of tests, we conclude that the estimated effect of UI generosity is causal," they write, meaning that bigger checks reduce the chances of going into delinquency directly.

They also found that the effect isn't just a temporary forestalling of an inevitable foreclosure, but that it has a lasting impact on keeping people in their homes. "The effect seems to be long term," they write, "as UI [unemployment insurance] benefits not only mitigate loan delinquency, but also reduce homeowner relocations and evictions." Each additional $1,000 in benefits reduces the chance of an unemployed person's mortgage going into default by 2.4 to 11 basis points. "We find that UI helps not only to postpone delinquency but also to keep laid off homeowners in their homes," they conclude.

Extrapolating out from their findings, the authors estimate that the expansions in the unemployment benefits program during the recession prevented about 1.4 million foreclosures.

The research shows that bigger unemployment benefit checks have a positive effect for the people who receive them, proving that "[h]aving a source of income following job loss can enable households with credit obligations, such as mortgage payments, to continue making loan payments rather than defaulting," as they write. The other option would have been that bigger benefits reduced the incentive for recipients to look for work, prolonging their unemployment spell and increasing the risk of default, but that's not what their research shows.

Other research from the Government Accountability Office in 2010 comports with the new study, filling in the picture on the other side for people who don't get unemployment benefits. Their poverty rate spiked and 40 percent had incomes below 200 percent of the poverty line. More than a third relied on government programs, while others relied on family members or savings.

The new research cuts against one argument in favor of letting the federal long-term unemployment benefits program lapse, as it did in December, which is that it would take away a cushion keeping people from job hunting and push more to get jobs. There's other evidence that disproves that view. In Illinois, more than 80 percent of the long-term unemployed still had no income two months after being cut off from benefits.

And North Carolina has served as a testing ground, as it was cut off from the federal program months before it lapsed. There is no evidence that the cutoff helped the state's labor force and in fact it is now experiencing the largest contraction in its workforce ever.

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National Jobs for All Coalition
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