EPI: Welcome developments on limiting non-compete agreements: A growing consensus leads to new state laws, a possible FTC rule making, and a strong bipartisan Senate bill [feedly]

This is a big deal in all "human capital" occupations where the employer plunges the employee into indentured servitude as long a "proprietary idea" resides in his head -- even if the employee is the author or co author of the IDEA. Ideas should NOT be property.

Welcome developments on limiting non-compete agreements: A growing consensus leads to new state laws, a possible FTC rule making, and a strong bipartisan Senate bill
https://www.epi.org/blog/welcome-developments-on-limiting-non-compete-agreements-a-growing-consensus-leads-to-new-state-laws-a-possible-ftc-rule-making-and-a-strong-bipartisan-senate-bill/

There is a growing bipartisan consensus that non-compete agreements harm workers and the economy. This bipartisanship scarcely seemed possible back in 2015 when we were government lawyers coordinating investigations by the Offices of the Illinois and New York Attorneys General into Jimmy John's use of non-compete agreements for sandwich makers and delivery drivers. But earlier this month, in what seems like the first bipartisan federal effort in far too long, Senators Todd Young (R-Ind.) and Chris Murphy (D-Conn.) introduced a bipartisan bill that would effectively stop the abuse of non-compete agreements. This builds on a year in which six state legislatures also passed significant non-compete reforms.

The growing use of non-compete agreements

Employer use of non-compete agreements has mushroomed in recent years. These agreements prevent people from working for their former employer's competitors, and they were once used sparingly to prevent, for example, executives with trade secrets or confidential business information from sharing them with new employers. Now, they're often used indiscriminately to chill job mobility for employees with no access to such information. A 2015 study found that 40% of Americans have had a non-compete agreement at some point in their career. As lawyers, we've worked on cases involving non-compete agreements used for janitors, receptionists, customer service workers, fledgling journalists, even employees of a day care center.

Why are non-compete agreements so bad? They fly in the face of our fundamental American belief that anyone can work hard, gain skills, and move on to a better opportunity to build a better life. Non-compete agreements can trap workers in jobs they want to leave—whether because of sexual harassment or other poor working conditions, or even just a bad boss. They limit the talent pool, preventing employers from hiring the best worker for the job. Non-compete agreements can also stifle economic dynamism, blocking people from starting their own businesses.

Workers' inability to leave their jobs because of non-compete agreements and similar limitations has also contributed to the wage stagnation of recent decades. Two studies released just last month found that non-compete agreements adversely affected wages and job mobility. This makes sense, given that the agreements erode the leverage that workers typically get from the threat of leaving their jobs to work elsewhere. That threat is now empty for millions of Americans subject to these provisions, showing that non-compete agreements aren't really about trade secrets anymore. They're about limiting workers' bargaining power.

A new Senate bill could restore bargaining power

The new Senate bill, the Workforce Mobility Act of 2019, is notably robust, and should attract bipartisan support, from legislators motivated by concerns about economic liberty and entrepreneurialism as well as those focused on job quality and workers' rights. The bill contains the following key provisions:

• Prohibition of non-compete agreements: The bill would prohibit use of non-compete agreements in almost all situations. The bill also declares that non-compete agreements are unenforceable. (While the bill does not explicitly address whether non-compete agreements already entered into would be automatically rendered unenforceable on the effective date, the plain language suggests that they would not be grandparented in.)
• Limited exceptions: The bill contains limited exceptions that in our view are minimal and sensible, allowing for use of non-compete agreements with regard to owners and senior executives in the sale of a business.
• Trade secrets: The bill explicitly permits employers to protect trade secrets by requiring workers to sign more limited agreements not to disclose such secrets.
• Enforcement: If enacted, the law against non-compete agreements would be enforced collaboratively by both the Federal Trade Commission (FTC) and the United States Department of Labor (DOL). The bill also provides for civil fines of $5,000 per week of violation, and creates a private right of action, with damages and attorneys' fees available for successful lawsuits.
• Public education and outreach: Given the lack of knowledge of many workers about workplace rights, the bill sensibly contains outreach and public education provisions, requiring employers to post a notice and also requiring the Labor Secretary to conduct outreach specifically on this issue.
• Regulations: The bill would allow the Labor Secretary to promulgate regulations.
• Reporting: The bill requires a report from the two enforcement agencies one year after the Labor Secretary issues regulations.

Other efforts to curb non-compete agreements

This strong bill comes in the context of many other efforts to curb non-compete agreements. At the federal level, the FTC is reviewing a petition submitted by the Open Markets Institute along with numerous labor groups and law professors, seeking a rule prohibiting non-compete agreements; a group of senators also urged the FTC to take this action. The FTC appears to be seriously considering the petition. Although last month in congressional testimony, FTC Chairman Joseph Simons saidhis team "couldn't find enough existing economic literature to justify a rulemaking," he also noted that the Commission would continue to examine the issue.

Meanwhile, in the past several years, over 10 states have passed laws limiting employers' ability to impose non-compete agreements on their employees. Many of these laws, including those reforms passed in Illinois, Maine, Maryland, Massachusetts, New Hampshire, Oregon, Rhode Island, and Washington, ban non-compete agreements or make them unenforceable for some or most workers in the state based on their income. States like Illinois exclude only low-wage workers while others, like Washington, bar non-compete agreements for any worker earning up to $100,000 annually. Other states have recently limited use of non-compete agreements for certain professions such as physicians (like in Florida), broadcasters (like in Utah), and home health care aides (like in Connecticut). State reforms also vary in terms of whether they specify a time limit for the duration of non-compete agreements and whether an employer has to pay money to workers while a non-compete agreement is in effect.

In addition, some states have other types of limitations for non-compete agreements. They've long been unenforceable in California; also, in most states, even without a statute on point, courts will generally only uphold a non-compete agreement if it protects an employer's legitimate business interest and is reasonably limited in duration and geographic scope. The issue, of course, is that non-compete agreements are rarely reviewed by courts so this case-by-case approach is insufficient.

State and federal policy recommendations

At the federal level, the Senate bill and FTC petition are both positive developments that have the potential to address the abuse of non-compete agreements in a nationwide and holistic way that addresses both their individual and market harms.

Meanwhile, more states can and should continue to act on this issue. Indeed, a bill was just introduced in the District of Columbia to ban non-compete agreements for individuals paid below $87,654 (3 times D.C.'s minimum wage). Here are some important considerations as policymakers consider their options:

• Non-compete agreements should be prohibited, not just unenforceable. This distinction is important, because if they are unenforceable, this just means that they won't be upheld if they are challenged in court. But most non-compete agreements never make it to court: workers assume they are valid or, even if they suspect the non-compete is too broad, most workers can't afford to take on the risk and expense of possible litigation. This results in a chilling effect, as workers stay in their jobs regardless of the actual legality of their non-compete agreement. It also fails to disincentivize employers from using overly broad non-compete agreements; the worst that can happen is that the provision would be found invalid.
• For this same reason, there should be penalties available for employers that include illegal or unenforceable non-compete agreements in their employment contracts.
• Non-compete agreements should be prohibited ideally for all workers, or for the vast majority of workers. Some states have limited the prohibition only for very low-wage workers. This approach does not address the larger impact on job mobility and competition, as well as basic fairness, as we have previously written. Non-compete agreements should also be prohibited for independent contractors and interns, as states like Washington have done.
• Given limited public enforcement resources, laws should include a private right of action with attorneys' fees. Legislators concerned about excessive litigation should note that this is not a complex topic and should be easy for employers to comply with: all they have to do is not include a non-compete agreement in their employment contracts.
• States that do decide to permit non-compete agreements for certain categories of workers or in certain circumstances, should consider:
  • Adopting a relatively high, and also very clear, income cutoff below which employees cannot be subject to a non-compete agreement. This kind of bright-line rule is much more administrable for employers, workers, and enforcers, and leads to less litigation.
  • Specifying that non-compete agreements must be clearly and fully disclosed to workers at the time a job offer is made, not after a job is accepted or after work has begun.
  • Requiring, as Washington does, that employers pay workers a mandatory set amount (a reasonable percentage of their salary) during the time any non-compete agreement is in effect. This type of payment, known as "garden leave," serves two important purposes: it provides income to a worker whose earnings are limited or nonexistent because of a non-compete agreement, and it creates a disincentive for employers to include such terms in their contracts, causing them to actually consider whether a non-compete agreement is truly needed to protect business interests.
  • Clarifying that all non-compete agreements must still conform to that state's case law, used only to protect a legitimate business interest, and reasonable in terms of duration and geographic scope.

Whether the new federal proposals gain traction or the states continue to lead on non-compete agreements, it's good to see that there are still some issues so fundamental to our economic well-being that policymakers can find allies across the aisle.

 -- via my feedly newsfeed

Larry Summers: Warren’s plan to finance Medicare-for-all pushes into dangerous and uncharted territory [feedly]

This post is a perfect illustration of why it is always a mistake NOT to read Larry Summers. His critique is highly skeptical of Senator Warren's (and also Senator Sanders and other M4A advocates) health care universality programs. Further he is just as skeptical of the other very large regulatory, financial and labor market shocks embedded in the large scale economic restructuring envisioned in the emerging progressive Democratic Party platform agenda. The blowback from markets, it can be inferred, is not going to be abstract or academic.

On the other hand, Summers, kinda like Biden, has really ONLY a return to Obamacare enhanced with a public option. I am good with that as a pause in the DROP in coverage going on now. But is there really a path back to that state that the Rs cannot sabotage in the manner already demonstrated?

Summers cautions should be taken VERY seriously. He knows what he is talking about to the Nth degree. But there is no challenge here greather than that faced by the depression and World War II, is there? If the country is mobilized to reform, train, defend against climate change, bring MORE equality and lift all boats, mountains can be climbed and crossed. But THATS what its gonna take, seems to me.

Warren's plan to finance Medicare-for-all pushes into dangerous and 

uncharted territory
Larry Summers

http://larrysummers.com/2019/11/07/warrens-plan-to-finance-medicare-for-all-pushes-into-dangerous-and-uncharted-territory/

Warren's plan to finance Medicare-for-all pushes into dangerous and uncharted territory

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November 5, 2019

Democratic presidential candidate Elizabeth Warren last week mounted a passionate defense of universal government-provided health care and made a detailed case that it can be paid for without burdening the middle class. The vision of Medicare-for-all is immensely attractive and evokes health systems in other countries that perform much better than ours does. I could easily imagine supporting a well-designed Medicare-for-all plan.

However, no other country offers as broad coverage as Medicare-for-all would or claims to provide universal health insurance without taxing its middle class. With respect to the admirably detailed plan the Massachusetts senator laid out, there will, I suspect, be serious questions about the accuracy of her arithmetic, the impact on labor markets, the feasibility of applying Warren's full set of proposed taxes to the rich, and the financial and economic impacts of the plan.

Campaign arithmetic is always optimistic, but errors are highly consequential with respect to a program that on some measures is eight times as large as the Trump tax cut. Warren estimates the revenue potential of increased Internal Revenue Service enforcement as being about 65 times as large as the Congressional Budget Office's enforcement proposal. The University of Pennsylvania's Natasha Sarin and I have been working to make the case that the CBO is far too pessimistic in its estimates of the potential for better enforcement to generate revenue. But the most optimistic scenario we can envision is still more than $1 trillion short of the Warren estimate.

Further, Warren's plan would double the 3 percent tax on wealth over $1 billion that she has already proposed. Many experts believe the Warren wealth-tax revenue estimates are too high, perhaps by a factor of two, because they overestimate the wealth of the very rich and, as Sarin and I have argued, underestimate potential avoidance. Whatever the merits of these arguments, it is hard to see a defense for assuming — as the Warren proposal does — that wealth taxes can be doubled with no impact on avoidance, or that annual capital gains taxes can be levied without reducing the wealth tax base. The estimates are also infected by erroneous transcription of the CBO's 10-year growth estimates and by a general failure to take account of interactions between the different tax measures proposed.

Second, there will be large labor market effects: Warren's plan will discourage hiring, particularly of low-skilled workers, by firms that currently provide generous benefits. These firms will face the most burdensome taxes when they increase hiring and will gain the greatest cost savings by laying off workers. In addition, workers' incentives to take jobs will be dulled because they will no longer be compensated with health benefits (which will become available regardless of what they do). There are further potential economic perversities as well: To cut costs, firms will be incentivized to get below the 50-employee threshold and scale back on current health benefits. And all the efforts that employers have engaged in to contain costs and to encourage prevention will become pointless.

Third, the combined tax impact of Warren's various plans is extreme. While the case for more tax progressivity is compelling, and each of the Warren measures can be defended in isolation, there is the concern that their cumulative impact may be excessive should, as the Warren campaign repeatedly claims, they be borne only by the very wealthy. Here is a suggestive comparison: The total after-tax adjusted gross income of all those earning more than $1 million or more, as last reported by the IRS in its Statistics of Income publication, was under $1.1 trillion. The sum of all the new taxes on the wealthy proposed by Warren is of comparable magnitude: adding together around $310 billion a year in new wealth taxes; $330 billion a year in corporate taxes from her new proposals and her previous real corporate profits taxes; $240 billion a year from her new capital gains and finance tax proposals; at least $90 billion from her across-the-board 14.8 percent taxes of labor and investment income; and $190 billion in increased compliance. This totals nearly $1.2 trillion — more than millionaires' total after-tax income.

Of course, this calculation is an oversimplification. Different taxpayers are situated differently and will be affected differently by any set of proposals. There will be tax collections from those who are not middle class but still earn less than $1 million a year. There are sources of "income" that will be taxed under the Medicare-for-all proposal that do not show up in current adjusted gross income — unrealized capital gains or corporate retained earnings, for example. On the other hand, it's highly problematic given the avoidance and other bad incentives likely to result, to be anywhere in the ballpark of confiscatory taxation of high-income taxpayers.

Finally, what of the economic and financial effects of Warren's proposals? A place to start is by thinking about the potential impact on the stock market. The market is valued as investors' claim on future corporate earnings, which the Bureau of Economic Analysis estimates are about $1.8 trillion this year. As a result of all the tax claims just described, the Warren program would reduce investors' claim on these earnings. Recognizing that some of these taxes fall on salary income or non-corporate business, it is reasonable to estimate that investors will pay an extra $500 billion to $600 billion in taxes related to corporate profits. Then, Medicare-for-all proponents cite a severe hit to health industry profits, currently on track to be over $200 billion this year. Then, there will be the broader impacts of overhauling regulation, often to serve vital social interests, in initiatives such as banning fracking and reforming the energy industry, stepping up financial regulation, a major increase in antitrust enforcement and the regulation of technology companies, and filling corporate board seats with labor representatives. It is hard to see an argument that investors' claim on profits would fall less than a third. The figure could be considerably greater.

Because of abnormally high valuations, along with increased uncertainty and volatility, loss of business confidence and selling pressure from those in distress, the market would likely fall more than proportionally to earnings. Accurate market predictions are impossible and will in any event depend not on what is proposed but on what the market expects will actually take place. There is, however, the real risk of economic contraction following a sharp market decline, especially given that the current very low level of interest rates puts the Fed in a weak position to pursue counter-cyclical policy.

For decades, I have emphasized that corporate profits and the market do better when progressives are in power and have dismissed conservative fear-mongering about progressive policies.

This time seems different. Judged relative to gross domestic product, the Medicare-for-all program dwarfs the federal spending hikes of the New Deal and the Great Society. Presidents Franklin D. Roosevelt and Lyndon B. Johnson emphasized that their new benefits would be paid for by contributions from their middle-class beneficiaries. With Warren's plan, it is the combination of vast new entitlements with total reliance on the top 1 percent for revenue that puts us in uncharted and, I fear, dangerous territory.

 -- via my feedly newsfeed

The Roundup Case: Problems with Implementing Science-Based Policy [feedly]

The Roundup Case: Problems with Implementing Science-Based Policy
http://conversableeconomist.blogspot.com/2019/11/the-roundup-case-problems-with.html

The Roundup Case: Problems with Implementing Science-Based Policy

Imagine, just for the sake of argument, that you are open-minded about the question of whether the weed-killer Roundup (long produced by Monsanto, which was recently acquired by Bayer AG) causes cancer. You want to make a decision based on scientific evidence. However, you aren't a scientist yourself, and you don't feel competent at trying to read scientific studies.

Geoffrey Kabat asks "Who's Afraid of Roundup?" in the Fall 2019 issue of Issues in Science and Technology. More broadly, he uses the controversy over Roundup as a way to ask about the role of science in decision-making.

When it comes to Roundup and its active ingredient glyphosate, the Environmental Protection Agency has continually said that "there are no risks to public health when glyphosate is used in accordance with its current label and that glyphosate is not a carcinogen." As Kabat points out:

The US Environmental Protection Agency's recent assessment is only the latest in a succession of reports from national regulatory agencies, as well as international bodies, that support the safety of glyphosate. These include Health Canada, the European Food Safety Authority (EFSA), the European Chemicals Agency, Germany's Federal Institute for Risk Assessment, and the Food and Agriculture Organization of the United Nations, as well as health and regulatory agencies of France, Australia, New Zealand, Japan, and Brazil.

But just when you find yourself deeply relieve that the experts have reached a consensus, you ind that one agency disagrees. In 2015, International Agency for Research on Cancer listed glyphosate is a "probable carcinogen." There are lots of reasons to be dubious about the IARC decision, and to believe the consensus of all the other agencies around the world, and Kabat runs through quite a list. Here are a few of his points:

• Unlike the other health-and-safety agencies, the IARC ignores the size of the dose. Thus, for example, when IARC evaluated 500 agents and chemicals while ignoring the size of the dose, it found that 499 of them were possible carcinogens. Other agencies take the dose into account.
• The IARC evaluation looked only at certain parts of some studies of how glyphosate affected rodents. Reanalysis of the same studies found that the "IARC Working Group that conducted the assessment selected a few positive results in one sex and used an inappropriate statistical test to declare some tumor increases significant."
• There is a major study funded by the National Cancer Institute looking at 54,000 pesticide applicators in Iowa and North Carolina. " Indeed, when the results for glyphosate and cancer incidence  ... were finally published in the Journal of the National Cancer Institute, in 2018, the paper reported no significant increases ..." 
• A key scientist for the IARC process both led the way in designating glyphosate as a substance to be studied and in writing the IARC report. Then two weeks after the report came out, this scientist "signed a lucrative contract to act as a litigation consultant with a law firm—Lundy, Lundy, Soileau, and South—engaged in bringing lawsuits against Monsanto for Roundup exposure."

In a bigger picture sense, the actual science over Roundup and glyphosate becomes almost irrelevant  to the public disputes. The scientific question of whether glyphosate is a carcinogen is treated as identical to the question of whether one is anti-pesticide, anti-genetic modification, and anti-Big Agriculture.

The result is  what the head of the European Food Safety Authority called "the Facebook age of science." As background, the European agencies are well-known for their willingness to invoke the "precautionary principle"--basically, if we aren't sure and it might cause a problem, we should prohibit it. In this spirit, a group of almost 100 scientists wrote to EFSA to complain about their decision allowing glyphosate. Here's how Bernhard Url, the head of EFSA, responded:

You have a scientific assessment, you put it on Facebook, and you count how many people 'like' it. For [EFSA], this is no way forward. We produce a scientific opinion, we stand for it, but we cannot take into account whether it will be liked or not. ... People that have not contributed to the work, that have not seen the evidence most likely, that have not had the time to go into the detail, that are not in the process, have signed a letter of support [for a ban on glyphosate]. Sorry to say that, for me, with this you leave the domain of science, you enter into the domain of lobbying and campaigning. And this is not the way EFSA goes.

Roundup is of course just one product, but the issue of how science will be used in public policy is of course much broader. For example, if a lawsuit alleges that Roundup causes cancer, the truth of that accusation presumably matters. As Kabat points out, it "should come as no surprise that the same factors that are at work here are at work in many other areas, whether electromagnetic fields, cell phone `radiation,' so-called endocrine disrupting chemicals, numerous aspects of diet, cosmetic talc, GMOs, vaccines, nuclear power, or climate change."

In my own contentious way, I find it especially interesting when people make strong appeals to a  scientific consensus in one area, but then dismiss it in other areas. For example, those who  believe that action should be taken to reduce greenhouse gas emissions sometimes accuse their opponents of denying "the science." But on occasion, it then turns out that those who wrap themselves in the mantle of "the science" when it comes to climate change turn out to oppose vaccinations or Roundup. The idea of whether to build the Keystone XL oil pipeline across Canada and into the United States went through multiple environmental reviews during the Obama administration, each one finding it would not have a negative effect. For those protesting the pipeline, like for those writing group letters to the European regulators about glyphosate, the "science" was only acceptable if it supported their prior beliefs.

One of my favorite examples about the "science" and popular beliefs involves the irradiation of food. For a quick overview, Tara McHugh describes "Realizing the Benefits of Food Irradiation" in the September 2019 issue of Food Technology Magazine. As she notes, the Food and Drug Administration recently approved irradiation for fresh fruits and vegetables, and it had already been approved for a range of other food products. McHugh writes:

The global food irradiation market was valued at $200 million in 2017 and was projected by Coherent Market Insights to grow at a 4.9% combined annual growth rate from 2018 to 2026. This projects the market size to rise to $284 million by 2026. This high growth rate was envisioned due to increased consumer acceptance since the U.S. Food and Drug Administration (FDA) approved phytosanitary treatment of fresh fruits and vegetables by irradiation. The food irradiation market in Asia is also growing very rapidly owing to approval of government agencies in India and other countries. Presently over 40 countries have approved applications to irradiate over 40 different foods. More than half a million tons of food is irradiated around the globe each year. About a third of the spices and seasonings used in the United States are irradiated.

It would be interesting to see a Venn diagram showing how many of those who believe in "the science" when it comes to climate change also believe in "the science" when it comes to the safety of Roundup, vaccinations, or irradiating food. Or perhaps there is a human cognitive bias which is more prone to believe "the science" when it warns of danger, but less likely to believe "the science" when it tells us that something we believe to be dangerous (or something that we oppose on other grounds) is actually safe. 

 -- via my feedly newsfeed

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Dean Baker: Elizabeth Warren's Excellent Opening Gambit on Medicare for All [feedly]

Elizabeth Warren's Excellent Opening Gambit on Medicare for All
http://cepr.net/publications/op-eds-columns/elizabeth-warren-s-excellent-opening-gambit-on-medicare-for-all

Dean Baker
CNN, November 1, 2019

See article on original site

Sens. Elizabeth Warren and Bernie Sanders have set themselves apart from the Democratic presidential field in explicitly advocating Medicare for All proposals. Under their plans, an expanded Medicare system would fully cover everyone in the country. There would be no co-pays, deductibles and premiums — and no private insurance.

Warren has repeatedly been asked how she would pay for this plan. She had resisted saying that she would raise taxes and insisted that costs for the middle-class would go down. On Friday she outlined how this can be done.

The first part of her plan proposes cutting administrative costs. The administrative costs of private insurers are more than 25% of what they pay out in benefits each year. By contrast, the administrative costs of Medicare are less than 3% of what is paid in benefits. The potential savings from getting administrative costs for the whole system down to that of Medicare is close to $3 trillion over the next decade.

The current system imposes large administrative costs on hospitals, doctors' offices, nursing homes and other facilities that need additional staff to deal with complex billing arrangements. These unnecessary administrative expenditures can exceed 20% of total payments. If administrative costs at providers were reduced to Canada's levels (a country with universal coverage), it could save another $2.1 trillion over the next decade.

Warren also proposes large reductions in payments to health care providers. Patients in the US pay drug companies, medical equipment manufacturers, doctors and other providers on average roughly twice as much as in other wealthy countries.

The biggest chunk of her projected savings is on prescription drugs, where she proposes to reduce prices for brand drugs by 70% and generic drugs by 30%. She has likely underestimated the potential savings from these price reductions, since her calculations leave out the roughly $100 billion spent annually on drugs by hospitals, nursing facilities and other providers.

Even with these and other cost savings, Warren projects that the federal government will need another $20 trillion to cover her Medicare for All proposal. She calculates that $9 trillion of this gap will come from the premiums that employers now pay for their workers' health insurance. Employers, she reasons, should not care whether they are paying this money to insurers or the federal government.

This still leaves a gap of $11 trillion, or roughly 5% of GDP. She proposes to fill it with a financial transactions tax, an increase in the corporate income tax, reduced tax avoidance and a wealth tax on the country's very richest people.

Does it all add up?

There are a lot of moving parts here, each of which involves practical as well as political problems. Squeezing payments for pharmaceutical companies (we should do the same for medical equipment companies) will lead to lower spending on research. The government can make this up with additional funding to the National Institutes of Health and other government agencies. Still, the prospect of reduced privately funded research is an issue.

Similarly, lower payments for doctors may lead some to try to practice outside the system. Warren would want to make this difficult, but most likely doctors will have the legal option to practice on their own and charge whatever they want. Some well-connected doctors will likely do this.

There are issues with the planned funding mechanisms. It makes more sense just to charge employers a set percentage of wages rather than base payments on historic insurance premiums. In addition, a wealth tax may prove problematic for a variety of reasons.

However, we should realize this is an opening gambit, not a finished product. The final version of the Affordable Care Act was 2,300 pages when it went to a vote. It is unlikely that a Medicare for All bill will be any shorter.

Warren's proposal is not the final word. But it is an excellent first draft that provides a basis for future debate.

 -- via my feedly newsfeed

Counting on Class: The Continuing Appeal of Meritocracy [feedly]

Interesting discussion of the "meritocracy" trap. However, there is no other principle, if it could ever be "fairly" defined, around which political and economic negotiations between capital and labor, in both the economic and political realms, is sustainable.

Counting on Class: The Continuing Appeal of Meritocracy
https://workingclassstudies.wordpress.com/2019/11/04/counting-on-class-the-continuing-appeal-of-meritocracy/

Counting on Class: The Continuing Appeal of Meritocracy

Posted on November 4, 2019 by deindustrial

Neither faith in nor critiques of the idea of meritocracy is new. Michael Young's famous 1958 book he Rise of Meritocracy argued that class privilege and advantage were likely to be amplified as financial and cultural capital passed across generations in families. Each new generation would benefit from existing structural advantage created by their parents and even grandparents. They might be talented individuals, hardworking and driven to succeed, but they would owe their achievements in part to a myriad of inherited class advantages. Young intended the title of his book as a satire, but for many, it seems to promote the ideal of egalitarian opportunity.

A recent rash of books critically revisit the ideas in Young's now six-decade-old book. In The Class Ceiling: Why it ays to be Privileged, Sam Friendman and Daniel Laurison provide a wonderfully accessible account of contemporary class analysis in the UK, examining the complex ways in which class influences life chances. The authors leaven the numbers with fascinating vignettes from the field showing how successful middle-class professionals are sometimes aware of their own class privilege. As one put it, "I was lucky to have a following wind". The book does not offer a crude demonization of privilege. Instead, the study gets to the heart of how talent and hard work don't sufficiently explain how good jobs get allocated. Often times, as The Class Ceiling shows, it's the lucky breaks that already privileged people enjoy that allow them to achieve yet more success.

Take 'Mark' for example, a successful TV executive in his late thirties. Mark relates to Friedman and Laurison his own 'following wind'. The son of successful educated professionals, he was privately educated before gaining a place at Oxford. While he was at Oxford, Mark's parents paid for him to go on a holiday to New York to do research for his undergraduate dissertation. He stayed in Manhattan for free in an apartment owned by a contact his father had met on the side-lines of a rugby match.  This same contact then provided Mark with an introduction to the television industry. The upside of the anecdote is that Mark is full aware of his privilege and luck.The Class Ceiling is peppered with similar tales of advantage and their mirror image, such as the pairing of Nathan and Jim. Nathan's CV is littered with prestigious roles in TV and film.  He attributes his success to "just working incredibly hard" and "making good decisions" like turning down jobs he didn't believe in.  As he explains, "No job is worth sacrificing yourself for". Jim, by contrast, has decided to leave the acting profession after 'sacrificing' himself and his career by taking the kind of parts Nathan can afford to avoid. Jim's working-class origins still constrain him in his forties.  He struggled so hard to get into the acting profession, but the typecast jobs he has to take ultimately end up damaging his career and lead to offers drying up altogether. Class both constrains and enables after all.

The old formula so loved of politicians and defenders of the status quo that success can be reduced to Talent + Hard Work = Success is well and truly nailed by The Class Ceiling and its intimate stories of success and failure, which show how the safety net allows some to take chances and enjoy opportunities.  What emerges is a profound story of wasted, unrealised talent for those from working-class backgrounds.

This theme is picked up in another important recent book, The Meritocracy Trap by Daniel Markovits. For Markovits, meritocracy isn't working for either the losers or the winners. For middle-class families, the stress involved in 'making it', even for those with privilege, involves constantly monitoring children's progress, pushing them to excel in a bewildering array of extracurricular activities so that they can compete for the jobs or opportunities in the future. The Meritocracy Trap highlights the effect this has on both parents and their off-spring, creating profound and enduring anxiety and mental health issues. I wrote about my own experience of using middle class cultural and economic capital in terms of my own kids in a previous blog. The solution for Markovits involves radically improving education for all social classes to take away incentives to leverage class privilege in schools and colleges.

In The Rise of Meritocracy, Young described precisely the 'following wind' that Friendman and Laurison talk about in The Class Ceiling seven decades later. Sheer talent and hard work wasn't then, and isn't now, going to allow those further down the social scale the chances they need to really succeed. One of my colleagues who researches drugs policy has this neat formulation that politicians 'need to follow the available evidence, not what people would prefer to be true'.  This is also true for commentators who defend the common sense view of meritocracy that talent and hard work will out. In study after study, social scientists repeatedly show that class and other forms of stratification get in the way of merit. Privilege, or the lack of it, shapes individuals' merit, and it can undermine someone with great talent and commitment, or give someone an extra push. So what do we do in the face of the enduring attraction of meritocracy? It helps to keep repeating the inconvenient truth to anyone that will listen. Books like The Class Ceiling and The Meritocracy Trap help enormously by making complex arguments accessible to a wider public, providing the numbers but also giving names and faces to what those the numbers represent.

Tim Strangleman, University of Kent

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The Impeachable Offense That Democrats Should Stop Ignoring [feedly]

I like adding bread and butter crimes to the impeachment charges..

The Impeachable Offense That Democrats Should Stop Ignoring
http://cepr.net/publications/op-eds-columns/the-impeachable-offense-that-democrats-should-stop-ignoring

Jeff Hauser and Eleanor Eagan
Talking Points Memo, November 1, 2019

See article on original site

For the better part of this year, House Democrats have been consumed by a battle over how best to use their newfound power. One side called for impeachment from the start. The other side insisted that Democrats focus on kitchen table issues like health care. But the choice has always been false; the House can and should do both. In addition to the active impeachment inquiry into Trump's efforts to influence the 2020 election, there should be a second, no less serious impeachment inquiry into Trump's efforts to undermine Obamacare.

The Ukraine scandal merits the sort of no-holds-barred response that House Democrats have been so reluctant to deliver since taking power. Yet, acting as if it's Trump's only impeachable offense risks downplaying the severity of his other, serious misconduct. And fixating on a single story that necessarily involves classified information and international intrigue, rather than corruption of domestic policy matters, is not a savvy political choice.

Trump's attacks on the Affordable Care Act are among his most severe and broadly salient offenses, and his actions are arguably impeachable.

House Speaker Nancy Pelosi (D-CA) has been clear that she considers health care disputes to be best considered outside of the context of impeachment. However, if you look at the Constitution, that assessment quickly falls apart.

Specifically, look to Article II, which states that the president must "take care that the laws be faithfully executed." That's a fancy way of saying that the president has to carry out the laws that Congress writes. How to determine what is faithful execution is a matter of ongoing debate, but it is pretty clear that Trump isn't faithfully administrating the ACA.

In fact, Trump was never coy about his intentions to destroy the law. Mere hours after taking office, he signed an executive order directing members of his administration to undermine Obamacare. Since then, they have happily complied with that order's underlying intent while conveniently ignoring the demand that their actions be "consistent with law." And while the courts have repeatedly affirmed that the president has wide discretionary latitude to decide how to enforce the law, they have not recognized a president's right to effectively repeal laws through executive action.

And that's essentially what Trump is doing.

While the ACA's intent was to "expand coverage in the individual health insurance market," Trump and his administration have openly defied that goal and instead sought to limit healthcare coverage through the ACA exchanges. As former senior White House staffer Steve Bannon bragged, Trump ended payments to health insurance companies subsidizing health care for the poorest Obamacare customers in order to "blow" up the Affordable Care Act.

The Trump administration also decided to cut the ACA's marketing budget by 90%, despite robust evidence from a Center for Medicare Services (CMS) study showing "that paid outreach was responsible for 40 percent of all enrollments." In addition to cutting down on outreach, the administration made it harder for people to find accurate, comprehensive information about the law and its guarantees. The Sunlight Foundation's Web Integrity Project found at least 26 instances in which the administration had censored information about the ACA by removing it from official webpages. No amount of obfuscation could possibly make a convincing case that these actions were undertaken with any goal except to undermine enrollment.

That's not all. In June 2017, Health and Human Services used money that Congress had appropriated for Obamacare outreach efforts to produce and publicize 23 video testimonials "from people who said they had been 'burdened by Obamacare,' including families, health care professionals and small business owners."

Then there's the administration's use of state waivers. While Obamacare made room for state-level innovation through waivers, it set clear parameters. The statute clearly states that the secretary of Health and Human Services may only grant a state waiver request if the state plan "'will provide coverage that is at least as comprehensive as' ACA-compliant coverage." The Trump administration has repeatedly violated this basic restriction by granting state waivers that, for example, impose work requirements on adults seeking medicaid coverage.

Given all of this, Congress has more than adequate grounds to justify an impeachment inquiry to flesh out the already vivid public case that Trump has intentionally sought to undermine, rather than execute, the Affordable Care Act.

We are far from the first to make this case. Last year, four cities and the organization Democracy Forward filed a lawsuit in federal court alleging that Trump's actions constituted a violation of his constitutional duty to "take care." This also wouldn't be the first time that Congress moved to impeach a president on the basis of such a violation. Among the articles of impeachment drawn up and approved against President Andrew Johnson was one accusing him of failing to "take care" to execute the Tenure of Office Act.

There is, therefore, little question that the House has everything it needs to open an impeachment inquiry against Trump for his failure to "take care" in executing the ACA.

They cannot, of course, stop there. In order to build the case for Trump's conviction on this count, they must dig deeper and demonstrate that Trump's actions are indeed motivated by the goal of undermining the law of the land, not just the product of an ideological approach to administering the law within the discretion of the president.

Subpoenas to government officials might reveal even clearer evidence of the direct links between Trump's stated intent to destroy the law and the administration's specific actions that undermined it. A robust investigation might also elicit even more damning evidence by reassuring would-be whistleblowers within the government who believe coming forward is worth the risks. The current impeachment inquiry has already made abundantly clear that a serious investigation with real potential consequences attracts public servants willing to tell the truth. Finally, hearings with witnesses affected by Trump's attacks on the ACA could build public awareness about the severity of Trump's actions. Congress needs to make clear that these abuses are not just reprehensible but likely unconstitutional.

Some may worry that an investigation would be too logistically challenging, and that pursuing such an inquiry might risk taking resources from the Ukraine-focused inquiry, thereby jeopardizing both. But this should not be a concern. As the House Intelligence Committee investigates Trump's actions with regards to Ukraine, the House Judiciary or Energy and Commerce Committees could pursue the line of inquiry we propose.

Democratic lawmakers have spent years talking about the threat Trump and Republicans pose to Americans' healthcare coverage, yet they have been surprisingly reticent to use their power to do anything about it. It is not enough that House Democrats' mere presence in the House majority has stopped Congress from repealing the Affordable Care Act. As should be clear by now, Trump is pursuing repeal through other means, and House Democrats have done nothing to stop him. However, they can still show that their campaign promises to protect voters' healthcare were serious by opening an impeachment inquiry into Trump and his associates' unconstitutional efforts to undermine the ACA.

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Jeff Hauser is the director of the Revolving Door Project at the Center for Economic and Policy Research (CEPR), which aims to increase scrutiny on executive branch appointments.Eleanor Eagan is a research assistant at the Revolving Door Project.

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