Recalled But Not Repaired: Why we have millions of cars with unfixed safety recalls — and Germany has none.

Originally published in the Fall 2014 issue of The American Prospect.
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On May 30, Angela Davidson, her husband Clarence, and their twelve-year-old daughter Kira drove a 2010 Dodge Ram down Highway 15 in California, when they heard a loud knock, followed by a popping sound. Seconds later, their truck came to a screeching halt. After seeing smoke rolling into the truck, Angela opened the door to jump out, though one of her legs was quickly burned. Clarence barely had time to get Kira out before the entire truck became engulfed in flames. The truck kept rolling backwards, causing a brush fire that burned more than three acres before the firefighters could put it out. Highway 15 was closed for almost four hours.

Eleven days earlier, the Davidsons had purchased the Dodge Ram from a CarMax dealer in Irvine; CarMax is the nation’s largest retailer of used cars and trucks. Angela says her family went to CarMax specifically because they advertise that all their vehicles are thoroughly examined, with expert technicians stamping a “Certified Quality Inspection” on each one.

When the Davidsons signed a contract on May 19 and drove their truck off the lot, they believed they had just purchased a safe vehicle for their family. A few days later, they contacted Dodge customer service with a question, and the representative informed them that, oh, by the way, there appears to be a July 2013 safety recall issued for the pinion in your truck’s rear axle, and it’s very important to get it fixed right away.

“When I found out it was under recall I was furious,” said Angela. “I just felt like, this is so wrong, why would you guys sell us a car with an open recall like that? I thought of course CarMax would apologize and take the truck back.”

But CarMax—both the Irvine dealer and corporate headquarters—refused to take responsibility and told the Davidsons that it was up to them to repair their truck. Although the Davidsons then took the car to a local Dodge dealer, which may hold some responsibility for the ultimate explosion, CarMax apparently sold the Davidsons an unsafe vehicle. “How did they know that we wouldn’t be killed the same day we bought it?” Angela wrote in a draft testimony of the experience. “The answer is, they didn’t know. They just left it up to chance that we would even find out about the safety recall.”

Stories about vehicles like the Davidsons’ take on added significance in light of this year’s General Motors scandal, in which the automaker finally recalled nearly 2.6 million cars for an ignition switch defect known to company officials for more than a decade and linked to at least 54 crashes and 13 deaths. But six months after the recall, Automotive News reported that roughly 1 million car owners had yet to contact a dealership to fix their flawed ignition switches, and GM was struggling to track down contact information for many of those people.

In the United States, about one in every six cars on the road, or 37 million vehicles, has an unfixed safety recall. These are not minor problems; in safety recalls, the manufacturer or the National Highway Traffic Safety Administration (NHTSA) has determined that a car or piece of motor vehicle equipment poses an unreasonable risk to safety or fails to meet minimum safety standards. When a recall is in effect, manufacturers are legally obligated to do the repairs for free. Consumers, however, are not required to fix their car, regardless of the defect’s severity. In 2011, the Government Accountability Office (GAO) found the annual recall compliance rate in the United States averages 65 percent.

The latest GM episode is not the first major auto recall crisis to prompt public concern about unrepaired safety hazards. In August 2000, Ford Motor Company and Bridgestone/Firestone jointly announced a recall of 6.5 million tires after they linked them to more than 200 deaths and at least 700 injuries. Six years after the recall announcement, however, experts estimated that more than 200,000 faulty tires had yet to be replaced. An investigative reporter in Georgia even found some of the recalled tires still for sale in 2013.

In direct response to the tire recall, Congress passed the Transportation Recall Enhancement Accountability and Documentation Act (TREAD). TREAD established a new early warning reporting system, which requires manufacturers and their suppliers to regularly submit information about possible safety issues to NHTSA. “The TREAD Act represents an important first step towards strengthening our nation’s motor vehicle laws,” President Bill Clinton declared when he signed the bill in 2000. “And its vigorous and quick implementation will help save lives and prevent injuries.”

But recalls haven’t fallen. In fact, the number hit a new record this past July, with the most vehicles—39.85 million—ever recalled in a single year. “The problem is only growing,” said Chris Basso, a spokesman for Carfax, a web-based service that tracks the history of every vehicle based on its Vehicle Identification Number (VIN). “We have a recall [compliance] rate that leaves 35 percent of cars unrepaired and that number is likely to go up.”

“I want every vehicle fixed, and I’ve been clear about that all along,” GM chief executive Mary Barra said on CNBC, adding, however, that “ultimately it’s the consumer who makes that choice.”

But why are the repairs on safety recalls optional? The risk, after all, is not just to the car owners but also to those who ride with them and others on the road. In light of the public safety hazard, some countries have decided that it makes little sense for consumers to choose whether or not to repair defects on recalled cars. Germany, for example, makes those repairs mandatory. The German Federal Motor Transport Authority enforces that rule by refusing to renew the vehicle registrations of owners who fail to fix their cars. In 2010, Germany revoked owners’ registration due to outstanding safety recalls more than one thousand times. Consequently, the German annual recall compliance rate is 100 percent. Moreover, although German manufacturers aren’t legally required to bear the cost of the repair as they are in the United States, they do so nearly 100 percent of the time.

This combination of full compliance by the customer and full cost paid by the manufacturer creates an economic incentive for German car companies to build better cars the first time around. “There is a popular saying in Germany: Quality is if the customer comes back—not the product,” said Stephan Immen, a spokesman for the German agency. “The one responsible for the product knows what it means and acts corresponding to that.”

The United States could follow Germany’s example and make car registration renewal contingent on auto recall completion. Such a policy would be easy to carry out because DMVs can check each car’s VIN at the time of registration. Some states are already doing this successfully for energy emission standards. In California, if a vehicle owner fails to respond to an energy emission recall notice or the car fails to meet the state standard, the owner’s registration renewal will be denied until the repair is complete. Organizations like the Center for Auto Safety favor applying this same concept to auto safety recalls.

While taking time out of one’s busy life to get a car repaired isn’t something people are excited to do, states typically give owners 30 to 60 days to get it done, and in these cases, the owners have to pay for the cost of the emissions repair themselves. In contrast, if a similar system were applied to auto safety recalls, the repairs would be done at the manufacturer’s expense. Of course, giving up one’s car, even for just a few hours, may cause frustration and anxiety—often to the point where not fixing the car feels like the more sensible option. But manufacturers already sometimes provide free rental or loaner vehicles to individuals while their car is being repaired. GM recently offered this option to consumers who need to fix their car’s defective ignition switch.

Some auto safety reformers hope that small policy changes—like using particularly urgent language in the mailed notice letters—will motivate more owners to fix their cars. “Some manufacturers send pablum [recall notices], so people don’t really think they’re that important,” said Joan Claybrook, a veteran auto safety advocate who headed NHTSA from 1977 to 1981. “NHTSA has the authority to review those letters before they go and make sure they say ‘Alert! Alert!’”

Others have tried to raise the recall compliance rate by hiking penalties for irresponsible manufacturers. One bill introduced in Congress would require key management officials to disclose serious dangers with their products or face a fine and up to five years in prison. Another would require manufacturers to submit accident reports to federal regulators, who would need to make those documents immediately available to the public. And a third would eliminate the cap on civil fines—now $35 million—that the Department of Transportation can levy on automakers for failing to report known defects.

The sponsors of these measures hope that a combination of harsher manufacturer penalties and heightened efforts to disseminate information to the public will lead, eventually, to safer roads. But they have shied away from the most direct approach: making registration renewal dependent on getting the safety defects repaired. The battle over two more limited measures—requiring recall repairs in used cars and rental cars—suggests where the political problems lie.

Rental cars present what might seem to be an easy case for auto recall reform. After all, the rental car companies should be concerned about protecting their reputation for quality and the value of their fleets. But until recently, rental car companies could and would lease cars that were subject to safety recalls. In 2004, sisters Raechel and Jacqueline Houck, 24 and 20 respectively, rented a Chrysler PT Cruiser from an Enterprise Rent-A-Car dealer. This model had been recalled a month earlier after experts realized that the steering hose could leak and cause a fire. But the women were unaware because rental companies aren’t legally required to disclose safety recall information to customers. Driving down Highway 101 in northern California, the Houck sisters’ rental car caught fire and hit an oncoming semi-tractor trailer; they died instantly. After the accident, Enterprise tried to settle the scandal quietly, with a $3 million offer in exchange for the family’s confidentiality. The Houcks rejected the proposal and have been leading consumer safety efforts since.

Rental companies at first adamantly opposed changing their lenient recall policies, but activists and legislators continued to apply pressure. As a result, the four largest companies—accounting for 93 percent of the rental car market—now pledge not to rent vehicles that are subject to a safety recall.

But consumer groups insist that without a law requiring recall repairs, individuals are forced to just trust rental companies to abide by their public commitments. Thus reformers are fighting for the passage of a Senate bill, the Raechel and Jacqueline Houck Safe Rental Car Act, which would bar rental car companies from renting recalled vehicles to consumers. Even the American Car Rental Association, the policy voice representing the rental car industry, now supports the legislation.

But some powerful groups have worked hard to prevent the bill from becoming law. The Alliance of Automobile Manufacturers, the auto industry’s trade association, has refused to support the bill on the grounds that “it would give rise to a myriad of anti–consumer impacts” like increased rental costs for consumers. The real reason, though, is a concern that such a law would expose them to lawsuits.

“If Avis or Hertz has to take a car out of service for a week to get it fixed, particularly if it’s subject to a recall and the repair is not available, the rental companies may be looking at a car being out of service for three months,” said Clarence Ditlow, executive director of the Center for Auto Safety. “The auto companies are fearful that if this bill goes through they will be sued by the rental companies for the loss of use.”

The powerful National Automobile Dealers Association (NADA), representing sixteen thousand new car and truck dealerships with about thirty-two thousand domestic and international franchises, also opposes requiring rental companies to get defective cars fixed, arguing that the bill fails to differentiate one recall from another. (NHTSA does not distinguish recalls.) NADA says rental companies should only agree not to lease or sell defective vehicles if manufacturers issue “Do Not Drive” letters for recalls they deem to be the most serious. Rosemary Shahan, executive director of Consumers for Auto Reliability and Safety (CARS), says this is a cheap rhetorical trick because it is “extremely rare” for a manufacturer to voluntarily issue “Do Not Drive” letters—getting a company to issue a recall notice is hard enough as it is.

NADA’s political power also helps explain why Congress hasn’t passed a used car safety bill—a version of the Safe Rental Car Act, but for used cars. In California, a bill—S.B. 686—was introduced in 2013 that would have prohibited auto dealers from selling recalled used vehicles to consumers. Statewide polling revealed that 88 percent of Californians backed this policy. Angela Davidson testified about her CarMax experience at an S.B. 686 hearing in June. But the California New Car Dealers Association, CarMax, and others managed to kill the bill. Activists are now considering a 2016 California ballot initiative, but gathering enough signatures to qualify could cost nearly $1.5 million.

NADA insists publicly that increasing financial penalties for manufacturers who delay recall notices, rather than barring dealers from selling unsafe vehicles, would “better result in consumer safety.” But dealers, like manufacturers, are no doubt worried that new legislation would hurt their ability to sell cars, and consequently cut into their profit margin.

The recall problem is compounded by the growing shortage of qualified mechanics and technicians able to diagnose issues and make the necessary repairs. According to the Auto Care Association, demand for auto technicians has outstripped supply since 2010, and the nation is short about ninety thousand mechanics given what is needed. One of the reasons Germany has done so well in retaining its manufacturing base is its investment in vocational educational programs. Germany’s ability to produce high-quality cars—and to fix them when problems arise—is undoubtedly linked to its strong commitment to train people to build, maintain, and repair them.

Withholding car registrations makes the most sense as a way to raise compliance with safety recalls, but other alternatives have also surfaced to fix the unfixed-vehicle problem.

Shahan says, “First, we’ve got to focus on things that don’t penalize the consumer who didn’t make the defective product.” CARS supports legislation requiring DMVs to issue recall warnings when vehicle registration notices get sent in the mail. Car insurance companies could also help by sending reminder notices to customers when they see evidence of an outstanding safety recall. “What we’ve found is that the reason a lot of the unfinished recalls are not done is because the consumer doesn’t know about it,” said Ditlow. Research shows that newer cars are repaired in higher numbers than older cars, so the sooner a recall is announced and the sooner the owner learns about it, the greater chance there is that it will actually be repaired.

This past February, NHTSA announced that it would institute a new mandatory label to help owners clearly identify recall mailings. But relying on the mail is proving increasingly difficult, as owners change addresses or hand off their cars, and the DMV often lacks reliable, updated records.

In light of these challenges, NHTSA and manufacturers are exploring new ways to reach vehicle owners through such means as text messaging, mobile apps, and emails. But some auto safety advocates worry about the growing digital divide. “Not everyone has access [to the Internet],” said Shahan, who also says that government agencies need to do more to reach people who speak languages other than English.

Despite the political hurdles, momentum is building for more substantial auto recall reform. In April, the Obama administration recommended that Congress ban the sale and rental of unfixed recalled vehicles. Then this summer, New York City became the first city to prohibit the sale of recalled used cars. Jay Rockefeller, the outgoing chairman of the Senate Commerce Committee, also recently introduced legislation that would give NHTSA new authority to order unsafe vehicles off the road, rather than merely suggesting they get repaired. His bill, the Motor Vehicle Safety Act of 2014, would also bar the sale of unrepaired used cars.

In the public policy world, there are a lot of intractable problems for legislators, activists, and reformers to tackle. Unfixed auto safety recalls are not one of them. This is a problem we can solve. It is not a fantasy to imagine a decent system that helps vehicle owners expediently take care of their safety problem with as little inconvenience as possible, so millions of unsafe cars are no longer on the road. It may take several steps; perhaps dealing with rental cars first, then used cars, and then all cars. But eventually, we could see an improvement in public safety and perhaps even higher-quality automotive manufacturing.

Auto safety reform has produced some of the most important public health advances in the last half-century; the advent of seatbelts, airbags, and drunk-driving legislation has saved hundreds of thousands of lives. Each time the government took steps to tighten safety regulation, the auto industry argued that the proposed changes were too costly, unfair, or futile. But the changes have been accepted, and hardly anyone wants to go back. The poll showing 88 percent of Californians favoring the Safe Rental Car Act ought to encourage politicians to tap into the public support for reform. As Shahan says, “These days, there isn’t much that polls at 88 percent.”

City Coffers, Not Police Budgets, Hit Hard By the High Cost of Brutality

Originally published in The American Prospect on September 26, 2014.
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A
s the national conversation around racism and police brutality quickly fades—ramped up briefly in the wake of Michael Brown’s death—U.S. taxpayers remain stuck footing the bills for their local law enforcement’s aggressive behavior. This week alone, Baltimore agreed to pay $49,000 to man who sued over a violent arrest in 2010, Philadelphia agreed to pay $490,000 to a man who was abused and broke his neck while riding in a police van in 2011, and St. Paul agreed to pay $95,000 to a man who suffered a skull injury, a fractured eye socket, and a broken nose in 2012.

In 2013, Chicago paid out a stunning $84.6 million in police misconduct settlements, judgments, and legal fees. Bridgeport, Connecticut, paid a man $198,000 this past spring after video footage captured police shooting him twice with a stun gun, then stomping all over him as he lay on the ground. And in California, Oakland recently agreed to pay $4.5 million to settle a lawsuit a man filed after being shot in the head, leaving him with permanent brain damage. You get the picture.

The thing is, these steep payments rarely come from the police department budgets—instead they’re financed through the city’s general coffers or the city’s insurance plan. It’s the taxpayer, not the law enforcement agency, who pays the price.

“That’s why these enormous financial penalties do not seem to actually impact what police do,” said David Harris, a law professor at the University of Pittsburgh who specializes in criminal justice issues. “Conceivably, if cities didn’t want this to happen, they could say this will come out of your [police] budget.”

Other scholars have proposed this, too. Between 2006 and 2011, the total number of claims filed for offenses like false arrest and police brutality in New York City increased by 43 percent. So Joanna Schwartz, a law professor at UCLA, suggested the city could take money from its police budget to pay the associated legal costs. “Perhaps if the department held its own purse strings, it would find more to learn from litigation,” Schwartz wrote in the New York Times. This past June, Schwartz published a study that concluded individual cops almost never pay for their misconduct—rather, “governments paid approximately 99.98 percent of the dollars that plaintiffs recovered in lawsuits alleging civil rights violations by law enforcement.”

But the politics of pushing police departments to change or make concessions can be difficult. A recent Gallup poll found that across the country, 56 percent of adults hold “a great deal or quite a lot of confidence” in the police as an institution. If a majority of Americans feel positively about law enforcement, gathering the political will needed to compel change becomes tough.

“Most political leaders don’t have the guts for it, or the stomach for it, so we go around and around and cities pay out buckets of money from their own funds or they buy insurance,” said Harris. “As a result, the settlement costs do not act as a deterrence.”

Video footage might help to change this: The vast proliferation of video recording devices—ranging from individual cell phones to police surveillance cameras—have forced many citizens to watch incidents they might have otherwise tried to deny ever happened. Law enforcement and city officials, too, can’t as easily obfuscate brutal incidents from the record.

It’s possible that the combination of accessible video footage and increasingly expensive lawsuits might at last force cities to re-evaluate the cost of police brutality. This month, a disturbing video surfaced of a Baltimore police officer repeatedly punching a man in June; a $5 million lawsuit was then filed against the cop and the footage will be used as evidence. After seeing the video, Baltimore Mayor Stephanie Rawlings Blake criticized the police department and directed the commissioner to develop a “comprehensive” plan to address his agency’s systemic brutality.

The following week, two city council members proposed legislation that would require every Baltimore police officer to wear a body camera, in order to reduce instances of improper behavior.

This is all mildly encouraging, but as long as the cost of the jury verdicts, settlements and legal fees fall outside of the police budgets, the economic incentives for departmental reform will stay low. It’s also important to note that filing a civil rights lawsuit is not easy; the overwhelming majority of claims do not result in huge payouts nor is it easy to secure legal representation—even if the plaintiff was clearly wronged, notwithstanding all the new technological means to collect evidence. The cases take a long time and the pay can be precarious. David Packman, a private researcher who established The National Police Misconduct Reporting Project says that both the lack of financial penalties “sufficient to outrage taxpayers” and the fact that “fewer and fewer lawyers take on police misconduct cases” helps explain why localities don’t feel much pressure to introduce meaningful systemic reforms.

Unfortunately, as long as these trends persist, the taxpayer bill is likely to grow.

The Politics of Pre-K in the Pennsylvania Governor Race

Originally published in The American Prospect on September 22, 2014.
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In Pennsylvania’s gubernatorial race, education has emerged as one of the most heated issues. A Quinnipiac University poll released this month found education ranked as the most important issue for voters, after jobs and the economy. Despite contentious politics surrounding reform of public education from kindergarten through twelfth grade, Republican incumbent Tom Corbett and Democratic challenger Tom Wolf have discovered that plugging expansion of pre-kindergarten programs wins them political points without treading into treacherous waters. That is, as long as they don’t mention the mothers who will inevitably benefit, too.

The governor’s record is haunted by his 2011 budget, from which he cut nearly $900 million in public education funds—a decrease of more than 10 percent. The severe cuts have garnered national attention, particularly for Philadelphia—the state’s largest school district—which wrestled with a $304 million cut this past school year. Last year, a GOP research firm conducted a secret poll and found 69 percent of Pennsylvanians felt the state’s public education system is on the “wrong track;” 64 percent blamed Corbett.

Corbett, in turn, is trying to blame his predecessor, Democrat Ed Rendell, who infused temporary economic stimulus money into the education budget. But many voters don’t have patience for these defenses: They understand that class sizes have increased, that art, music and advanced placement offerings have been reduced, and that thousands of teachers—not to mention many counselors, nurses, librarians, and administrative staffers—have lost their jobs on Corbett’s watch.

Given education’s importance to Pennsylvania voters, the Corbett campaign has released ads lauding the governor for having “increased spending in the education department by $1.5 billion.” But this increase really came about because Pennsylvania is now paying more toward employee retirement plans, an obligationset by the state legislature.

While education debates typically center on polarizing issues such as charter schools, standardized tests and teacher unions, both candidates have found modest political respite by promoting a seemingly innocuous preschool agenda. Each campaign has created TV ads and sent direct mailings to voters about its candidate’s commitment to early-childhood education. Wolf’s platform includes the creation of a universal program, and Corbett has advertised the $10 million budget increase he oversaw to expand pre-K access.

None of this would have been possible without the launch of the Pre-K for PA campaign, a well-organized nonpartisan effort designed to educate the Pennsylvania public, policymakers, and those running for public office about the benefits of early-childhood education. According to Donna Cooper, executive director of Public Citizens for Children and Youth, none of the candidates running in the gubernatorial primaries were taking up this issue at all until the Pre-K for PA campaign started to organize at campaign stops and hold their own public events in areas of high voter concentration.

“By the time we reached the Democratic primaries, [the candidates] all started falling all over each other in support of pre-K,” said Cooper. “And then Corbett did it, too, because it was seen as a safe issue.”

Although President Barack Obama has called for the creation of a universal pre-K program, the influx of business groups that support early childhood education on the grounds of workforce preparation has turned it into a relatively bipartisan aim. Some of the most highly regarded models of quality preschool in the nation, in fact, are in two red states: Oklahoma and Alabama. In April, the president and CEO of the Business Council of Alabama came to Philadelphia to discuss the ways in which Alabama’s business community worked to develop his state’s pre-K system.

Although President Barack Obama has called for the creation of a universal pre-K program, the influx of business groups that support early childhood education on the grounds of workforce preparation has turned it into a relatively bipartisan aim. Some of the most highly regarded models of quality preschool in the nation, in fact, are in two red states: Oklahoma and Alabama. In April, the president and CEO of the Business Council of Alabama came to Philadelphia to discuss the ways in which Alabama’s business community worked to develop his state’s pre-K system.

Pre-K for PA has also employed economic rhetoric. In an open letter sent to both candidates in May, the campaign stressed:

Pre-K for PA has the support of many business leaders throughout the commonwealth. Among those leaders we are proud that [Comcast Executive Vice President] David L. Cohen penned an op-ed published last month in The Philadelphia Inquirer that stated: “Early-childhood education is not just a ‘nice to have’—it is an educational, moral and societal imperative essential to building the workforce of the future.”

But advocates know that early childhood education would impact far more than just our future labor market. While studies have documented the role pre-K can play in aiding the intellectual development of children, research has also shown how a pre-K expansion would significantly benefit low-income families, particularly poor women.

Mothers who have regular childcare are far more likely to stay employed. Moreover, a continuous work history correlates with better pay and benefits, but women often have to interrupt their careers because of a lack of steady childcare. An expansion of high quality pre-K would mean women would not only be more likely to keep their jobs, but also advance their careers.

Yet the candidates generally avoid these talking points. Even Wolf, with a 24-point lead, is quick to tell audiences that pre-K is “not just about social welfare.” In policy papers, leaders of the Pre-K for PA campaign have acknowledged that early childhood education is a boon to needier families, but they, too, seek to frame their public messaging to encompass all families, not just those that are low-income or headed by single parents.

“We don’t want to create a class conflict around this,” said Cooper, who points out that it’s a “broad coalition” that goes to the polls. Citing the pre-K model of New York City mayor Bill de Blasio, which aimed to make pre-K available to everyone, Cooper said that universal pre-K “makes every family a stakeholder.”

No doubt, given the Keystone State’s education budget crisis, enacting a major pre-K plan would be politically challenging. One could reasonably argue that ignoring mothers on the campaign trail, in a state with a large conservative contingent, is perhaps the only way to build critical support for early childhood education.

But this shouldn’t be taken at face value; the terms in which pre-K is framed, and the justifications provided for it, will inevitably affect the substance of the policy. Early childhood education has garnered tremendous political momentum, but it may have come at a price.

“I wish candidates would make that connection between women’s need to work and families’ need to have access to quality early childhood education, because it’s critical,” said Tam St. Claire, the president of the Bucks County Women’s Advocacy Coalition, a Pennsylvania coalition of non-profits and individuals that serve women and girls. “If we are expecting women to be economically self-sufficient, then we have to have systems and institutions that support the demands women have on themselves now.”

Debasri Ghosh, the director of education and communications at Women’s Way, a Philadelphia-based women’s and girls’ advocacy organization, points out that not only is pre-K important for children but “it’s also an incredibly stabilizing force for women and their families.” And a lack of accessible and affordable childcare, Ghosh explains, “can perpetuate the existing wage gap between men and women.”

Looking beyond Corbett and Wolf, the Pre-K for PA campaign is working to move big political donors, as well as candidates for the Senate and House of Representatives in Pennsylvania and nearby states. And a new survey reveals that 64 percent of voters support increased funding for pre-K programs in Pennsylvania. The stakes are high: In a state where only 18 percent of three- and four-year-olds currently have access to high quality early-childhood education—and where 13.6 percent of single mothers with minor children are unemployed—the campaign’s outcome could dramatically impact not only those in Pennsylvania, but children, families and women across the country.

Market Value

Originally published in Baltimore City Paper on August 29th, 2014.
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Walk into Reading Terminal Market, an enclosed public market in downtown Philadelphia, and you’ll find yourself surrounded by an assortment of rich smells and bright colors. You’ll see fresh produce and sushi, specialty cheeses, artisanal scarves, and natural oils. On occasion, you’ll even spot someone playing classical music on an electric keyboard. The central dining area is lined with flat-screen TVs.

Founded in 1893 but redeveloped in the 1990s, Reading Terminal has rebranded itself as a bustling hub of healthy food, community events, and tourist attractions. It has that liberal, “multicultural” feel to it—offering a wide variety of ethnic foods, incorporating patchworks of Pennsylvanian history, and acting as a significant food stamp redeemer for the city. There are customers spanning the socio-economic spectrum, but the average patron earns an annual income in the $35-60,000 range. Come around noon and you’ll catch a cluster of men dressed in black fancy suits standing by the famous Dutch Eating Place, awaiting Amish specialties like hamloaf and corn mashed potatoes.

Why care? Well, this all matters because Reading Terminal stands as a prime model for the Lexington Market redevelopment plan. Baltimore’s historic public market, which was described as “where you want to be for heroin” on National Geographic TV’s recent report on Baltimore, seeks to change its customer base, its food selections, and its reputation as a notorious drug hub.

Though many are quick to insist no “cut-and-paste approach” will be used, Reading Terminal’s general manager Paul Steinke is working directly with Lexington Market and the Maine-based consulting firm, Market Ventures, to help Baltimore through these transitional times.

Reading Terminal is a fun place, but the idea of using it as a model for Lexington Market’s future raises questions about the city’s larger objectives. In contrast to Philly’s Reading Terminal, most of Lexington Market’s visitors are black and earn less than $25,000 per year. It’s no secret that part of the redevelopment plan is to help “expand its offerings” in order to attract wealthier customers.

The plans for the market are ambitious. Although the figure $25 million has been thrown around in press reports, Ted Spitzer, president of Market Ventures, tells City Paper he “has no idea” where that number came from, and that he would not be surprised if the cost substantially exceeds that amount.

“Construction is not cheap,” he says.

Officials are careful to say that throughout the redevelopment they want to preserve Lexington Market’s “historic character.”

But when pressed on what that means, specifically (there’s been a lot of history since 1782), vague answers abound. “It means different things for different people,” Spitzer says. “That’s one of the things we’re trying to discover, what are those [important, historical] elements?”

“There’s a plan that’s going to help us figure that out,” Lexington Market’s executive director, Robert Thomas, says. “We’re just beginning with the consultant now to answer those very questions.”

From preliminary conversations, reports, interviews, and surveys, one can reasonably guess that Lexington Market will get a new physical structure (maybe keeping its iconic entrance sign) and work to bring in businesses that cater to shoppers with greater disposable incomes. “We’re looking at local niche branding, niche talent, niche entrepreneurs,” Thomas says. Likely no chain stores. After more than 5,000 people filled out Market Venture’s online survey in March, and 600 more participated in in-person interviews, officials say customers want options like freshly baked bread, locally grown produce, finer cheese, and gourmet coffee. Some existing businesses will surely be kicked out along the way, though officials say they haven’t begun to figure out exactly which ones those will be.

One of the major goals of Lexington Market’s rebranding is figuring out how to make it feel “more inviting” to wealthier consumers, such as hospital workers, area students, and tourists visiting the Inner Harbor.

But Lexington Market already has a security budget of $900,000—for cops and surveillance—which is off the charts compared to markets around the country. And the city increased the number of police dispatched to the market back in 2012, resulting in more arrests. Spitzer told The Sun that drawing in more affluent customers is one way to get rid of the area’s “negative behavior.” In the same Sun report, Kirby Fowler, president of the nonprofit Downtown Partnership of Baltimore, said, “the environment that’s conducive to the sale of prescription drugs is not conducive to drawing tourists to the market on a daily basis.”

Ultimately, the plan is to make more arrests, “clean up the area,” and get that “seedy stuff” out of sight, out of mind. The plan, it seems, is not to eradicate poverty; it’s to mitigate the unseemly sight of it. Mayor Stephanie Rawlings-Blake has said she envisions the future Lexington Market to be a “thriving mixed-use, mixed-income community.”

The city is investing a lot of money in Baltimore’s development. Local colleges are putting forth financial backing, too—UMBC is renovating a building on the southern edge of Lexington Market—but the city’s track record of reinvesting money derived from courting richer consumers back into the lives of the city’s poorest has been less than stellar.

On a recent Wednesday during the crowded midday hour, Lexington Market stalls sell snickerdoodles, vape pens, customized gym socks, grills, and endless lunch options, as workers mingle with or watch customers milling around the market. The hungry people of Baltimore chatter idly over Faidley’s famed crabcakes or a stall offering its “Super Breakfast”—two jumbo eggs, toast, potatoes, and bacon for a mere two dollars. Signs welcoming Independence Cards hang prominently at most stands. It smells awesome and greasy. But for many stall owners, some of whom will probably not make it into the new market, the future remains unclear.

“They don’t say nothing,” says Mike Houvardas, who has run the Bergers cookie stand, which serves the famous handmade cakes and cookies, for over 40 years. “We know nothing. Everybody says, the radio says, the television says, the newspaper says they’re gonna redo the market, but we know nothing.”

Elliot, a vendor at Mary Mervis Delicatessen who would not give his last name, is more optimistic about the changes. “It seems things are getting better already, I see a difference,” he says. “The walls, the floors, it’s cleaner. And we’re bringing in new people, bringing in new merchants. Come back in six months, it’ll be nothing like it is now.”

Additional reporting by Gianna DeCarlo.

The RAD-ical Shifts to Public Housing

 Originally published in The American Prospect on August 28th, 2014. 
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Traditional public housing is out of favor and substantially out of funds. It’s bureaucratic, concentrates the very poor, and is literally crumbling due to a huge backlog of deferred maintenance. Yet despite real catastrophes—such as Chicago’s bleak, crime-ridden Robert Taylor Homes, dynamited over a decade ago—public housing provides low-rent apartments to some 2.2 million people, and much of it is reasonably well run by local authorities.

For half a century, presidents, legislators and housing developers have sought alternatives, involving supposedly more efficient private market incentives. However, these alternatives, too, have been far from scandal-free. The Johnson-era Section 236 program (named for part of the housing code) gave private developers tax benefits and direct payments to build low-rent housing, underwritten by subsidized thirty-year mortgages. But then, as the mortgages started being paid off in the 1990s, many developers kicked out poor tenants and converted the buildings to middle-class and even luxury apartments—taking low-rent units that had been built and maintained with taxpayer money and removing them from the pool of affordable housing.

Attempts to de-concentrate big public housing projects, such as the Clinton-era “HOPE VI” program (Home Opportunities for People Everywhere), ended up evicting thousands. The Robert Taylor site, which at its peak housed 27,000 low-income Chicagoans, was replaced, using over $500 million in HOPE VI funds, with a low-rise mixed-income development of just 2,300 units.

Now comes the latest attempt to save public housing by injecting private capital. The idea is to bring in private developers—drawn by tax breaks and subsidies—and have them refurbish and manage the buildings. The end result is to be some kind of hybrid, where rents will stay low (at least for a time), tenants may have more mobility but fewer rights, and the total stock of affordable housing could shrink yet again. The approach is not cheap, and it may be more cost-effective to just appropriate more direct funds to the program and thereby keep it in the public sector—but Congress is not about to do so.

The new plan, promoted by HUD, developers and some city governments with few alternatives, is known as the Rental Assistance Demonstration, or RAD. It is set to transfer 60,000 public housing units across the country to the control of private developers. While billed as a limited test program, many participating cities are taking far-reaching gambles on their city’s affordable housing stock. In Baltimore, 43 percent of all public housing units will be converted through RAD, and in San Francisco, roughly 75 percent.

RAD is a second cousin to everything from privatized highways to the Affordable Care Act, which keeps the public provision and modest expansion of health insurance mostly private.

RAD is an emblematic case of this era’s intensified push to use privatization in the pursuit of social goals—not because that approach is necessarily better policy, but because it is politically possible. In that respect, RAD is a second cousin to everything from privatized highways to the Affordable Care Act, which keeps the public provision and modest expansion of health insurance mostly private.

Public housing—a program financed through direct government subsidies since its inception in the late 1930s—has been severely underfunded by Congress for decades. The dearth of funds has translated into a housing stock decline: Since the mid-1990s, more than 260,000 dilapidated units have been demolished or removed from the program. And despite long waiting lists around the country, agencies have only built new units to replace about one-sixth of those that were removed. HUD estimates that nearly $30 billion is needed to repair and restore the nation’s 1.2 million remaining public housing units.

“Primarily because of Congress’s failure to fund public housing, and so many long-term repairs and rehabilitation needs going unmet, RAD was an idea to get a new flow of capital and funds into the program,” says Megan Haberle, policy counsel at the Poverty Race and Research Action Council (PRRAC).

In effect, RAD turns public housing into something like the Section 8 program: low-rent housing that is privately managed or owned, and publicly subsidized.

RAD alters public housing’s funding and ownership structure to one that experts hope will be more politically sustainable over time. For example, a local housing authority could either sell or lease a public housing building to a private developer; the developer in turn would agree to make certain renovations, and to respect tenants’ rights. The traditional funding mechanism—direct subsidies to local housing authorities—would be replaced by tax credits and housing vouchers under the program known as Section 8. The total subsidy would be lucrative enough to entice the developer yet still maintain low rents for tenants. In effect, RAD turns public housing into something like the Section 8 program: low-rent housing that is privately managed or owned, and publicly subsidized.

Some cities, like Chicago, Philadelphia, Tampa and Charlotte, applied to convert thousands of their public housing units through RAD, but given the program’s demonstration cap, they’re stuck, for now, on a waitlist. (Chicago had the largest RAD application in the country, with nearly 11,000 units.) Other cities that were approved for conversion have taken a more cautious approach: Omaha will convert only 306 units, and Houston just eighty-nine.

Tenants and housing rights activists share deep concerns about RAD. These include the risk of increased rent costs, the fate of tenant legal rights, and the need to ensure affordable housing for generations to come. In addition, building trade unions see the potential for eliminating unionized middle-class jobs under these new private deals. Yet no formal national coalition has formed to address all these fears, in part because of the highly localized nature of the program. Since the RAD legislation was designed for regional flexibility, the risks and stakes for tenants and workers can vary considerably from city to city. The strength of local housing activist networks, civil rights lawyers and unions will ultimately shape RAD’s impact.

“Everyone is working on their own programs. Some of them are doing things this way or that way, some are a little bit more transparent, others are not,” says David Prater, an attorney at the Maryland Disability Law Center. Prater has been involved with the RAD program in Baltimore, fighting to ensure that protections for disabled tenants are preserved under the new regime.

 

RAD has garnered great controversy in Baltimore—the largest East Coast city to participate—due to its cagey rollout. While Baltimore Housing Commissioner Paul T. Granziano has pitched RAD as the only feasible way to salvage the old units, advocates are left with many questions and few details. In mid-June, some sixty Baltimore tenants and union workers organized a protest against RAD outside the Housing Authority of Baltimore County (HABC). Demonstrators raised concerns of resident displacement, middle-class job cuts and public housing loss.

“We’ve been at a number of residential information meetings that [the Housing Authority] organized, and they’ve yelled at residents who have tried to ask questions about long-term affordability and said it was inappropriate for them to even ask those questions,” said Jessica Lewis, an organizer at the Right to Housing Alliance, an advocacy group led by low-income Baltimore residents. At another public meeting, residents invited Karen Wabeke, a lawyer working for the Homeless Persons Representation Project, to ask legal questions on their behalf, but the housing commissioner refused to even take her questions.

Cheron Porter, director of communications for HABC, says that they are proud of the efforts they have made to engage residents and housing advocates throughout the RAD process. Porter adds that Baltimore’s version of RAD “goes far beyond the requirements under the federal law and is much closer to public housing than programs in other parts of the country.”

In other cities such as San Francisco, RAD has met less opposition. The San Francisco Housing Authority, with a $270 million backlog in deferred maintenance costs, has been in a state of organizational tumult for years. Its last director was fired in 2013 after alleged involvement in a host of corruption and discrimination scandals. While some activists and union workers have raised questions, ultimately the Bay Area pushback has been mild in comparison to Baltimore. Many residents eagerly welcome the promise of improved physical conditions.

Deborah Thrope, a lawyer with the National Housing Law Project, a policy organization concerned with preserving affordable housing and tenant rights, says the response was tamer in part because everyone agreed the status quo was untenable. While Thrope hopes to safeguard tenant rights in San Francisco then disseminate those principles nationally, she acknowledges that San Francisco is different than the rest of the country because of its well-mobilized advocacy organizations that collaborate with the city in ways unique to the northern California progressive scene.

Despite significant concerns, many housing policy experts remain cautiously optimistic. One promising feature of the program is a “mobility” option not currently permitted for tenants in traditional public housing. For example, some families that want to move and switch school districts could do so using a voucher obtained through RAD. “We see [RAD] as an opportunity not only to inject capital,” says Phil Tegeler, executive director of PRRAC, “but as a break with that whole history of residential segregation and concentrated poverty.”

Given the funding crisis, the large public housing authorities are among RAD’s most enthusiastic boosters. “This was not something that was a brainchild of a developer,” stressed Sunia Zaterman, executive director of the Council of Large Public Housing Authorities (CLPHA). “This is very intentional in its approach as a preservation and reinvestment strategy.” 

Nonetheless, critics’ concerns about tenant displacement appear justified, given the government’s track record with privatizing public housing. HOPE VI projects deliberately decreased the number of public housing units. Many tenants lost their homes through rescreening and thousands were permanently displaced during the rehab process.

“The housing authorities just didn’t try hard enough to keep in touch with many residents during that year or two that units were getting fixed up, and people were just lost and never had an opportunity to return,” says Ed Gramlich of the National Low Income Housing Coalition.

In an effort to avoid the pitfalls of Hope VI, policymakers have tried to design RAD in a way that would prevent some of the worst possible outcomes. For example, unlike in HOPE VI conversions, no tenant will have to be re-screened to establish eligibility to live in RAD properties.

And under RAD, an implicit commitment exists to have a “one-to-one replacement policy,” meaning that any demolished units must be replaced with the same number of units as was originally there. But advocates such as Gramlich worry that developers and local authorities could exploit loopholes in the statute. Exceptions to the one-to-one rule include allowing public housing authorities to reduce the number of assisted units by up to 5 percent without HUD approval, consolidate units (such as converting efficiencies to one-bedroom apartments), and remove units that have been vacant for at least twenty-four months. This last exception is particularly troubling, as housing authorities sometimes intentionally leave units empty in an effort to lessen their administrative fees or anticipate eventual demolition.

Erosion of tenant legal protections also worries advocates. For example, under current public housing law, if a landlord or housing authority mistreats a tenant, the tenant may pursue redress without resorting to expensive and lengthy lawsuits. But under RAD, the contracts will be between private developers and housing authorities, which could make it much more difficult for tenants to hold landlords accountable. Some, like David Prater of the Maryland Disability Law Center, want housing authorities to formally add tenants to the housing contracts as “third party beneficiaries.” This change would strengthen tenants’ ability to pursue grievances.

Prater sees potential for an unholy alliance between housing authorities that want to save money by limiting tenant appeals and private developers who seek to avoid liability. Cheron Porter, speaking for the Baltimore housing authority, says, “While we certainly understand the residents’ point of view,” giving tenants third party status “could potentially lead to unduly lengthened processes and less certainty among the parties’ roles.”

As long as these developers receive HUD subsidies, the units will be subjected to federal audits and monitoring. Still, the regulations leave room for legal sidestepping. “I think legal advocates rightly see that the RAD notice HUD drafted did not completely replicate the protections that people already have under the public housing regulations and handbooks,” says Gramlich.

A further concern is possible changes to RAD under future administrations. For now, the Obama administration has sought to balance developer incentives with tenant protections. But future administrations, facing different political considerations, might opt to shift this balance.

Although this housing experiment was to be tried first on only 5 percent of the nation’s public housing stock, HUD is now pushing to eliminate the program’s cap entirely. (In other words, gut the “demonstration” part of “Rental Assistance Demonstration.”) Zaterman of CLPHA argues that RAD’s long waitlist “demonstrates its demand and feasibility.” Other affordable housing advocates, however, urge for a more gradual approach in case there are unforeseen ruinous consequences.

With cash-strapped cities lacking the dollars needed to renovate, repair and maintain their public housing, many more are likely to apply for RAD conversions in the future.

If implemented carefully with robust federal oversight, RAD may actually advance the goal of more affordable housing. Decrepit and dangerous buildings could be upgraded and more families may have the opportunity to move into the areas they want. However, if the public looks away or if crafty private developers evade government supervision, the state of affordable housing could look even worse than it does today.

“All of these deals between housing authorities and developers are made behind closed doors,” says Gramlich. “That’s how deals are done in the private marketplace, and that runs against the whole notion of public assets. It’s hard to assess what might happen, and by the time the negotiations are settled, residents might be stuck with a done deal. And the done deal might be great, or it might not be. The people who have the biggest stake in it are left out.”

How to Find a Career With Uncle Sam

Originally published in The Washington Monthly for their September/October 2014 issue
——

Juny Canenguez was just beginning her junior year at Virginia’s George Mason University in 2012 when she heard that the Obama administration was offering paid internships in the federal government through a new initiative called the Pathways Programs. Eager for what she calls “real-life experience” and interested in foreign affairs, she went to the State Department’s career website and applied for a Pathways internship. She was accepted, and for the next two years she worked two days a week at State while finishing her degree in business management. One of the highlights of her internship, Canenguez says, was getting to meet foreign and civil service officers, hear about their experiences, and take in their advice. Now out of college, she’s in the process of being converted to a formal federal employee, thanks to her time as an intern. “It was amazing,” says Canenguez. “I’m now being recruited to Civil Service, and my long-term plan will be to join the Foreign Service,” which, if she succeeds, will allow her to be posted as a diplomat overseas.

Working for the government can be a great career choice—maybe not as remunerative as a job on Wall Street, but potentially far more rewarding and socially useful. There are federal jobs available for almost every interest and skill, whether that’s politics, physics, art, or even event planning. And, contrary to popular conception, 84 percent of federal government jobs are outside of the Washington, D.C., area, so you can tailor your employment opportunities around where you most want to live. (Fifty thousand federal government employees work abroad, in more than 140 foreign countries.)

President Obama signed an executive order in 2010 creating the Pathways Programs with the expressed aim of attracting greater numbers of talented and diverse young adults into government work. The Pathways Programs are comprised of three divisions.

The Internship Program, designed for current students, provides paid work opportunities in federal agencies for a limited period of time. Interns can work either on a part-time or full-time basis.

Next there is the Recent Graduates Program, which is open to individuals who have completed, within the previous two years, an associate’s, bachelor’s, master’s, professional, doctorate, vocational, or technical degree or certificate from a qualifying educational institution. These recent graduates can work in federal agencies while also taking advantage of substantial career training and mentorship opportunities.

Lastly, the Presidential Management Fellows Program is a leadership and career-development program for those with newly minted graduate degrees.

In all three divisions of the Pathways Programs, if you successfully complete the term of service you can receive what is known as “noncompetitive eligibility” when applying for federal jobs. This means that your employer can convert you straight from a Pathways participant into a permanent employee or you can apply for other federal positions without having to go through the standard, and highly competitive, USAJOBS application process.

Channing Martin, a former Pathways intern in the Office of Personnel Management (OPM), was hired immediately after her internship ended into a permanent, full-time position at the OPM; she now works as a program and management analyst. “As a high schooler I was always really interested in diversity and inclusion issues,” Channing said, “and when I realized this intern program existed, I was really attracted to that.” Channing spent her yearlong internship on a rotation between different departments within the OPM, having the chance to get her feet wet in a broad range of governmental duties and responsibilities, experimenting with tasks ranging from understanding the role of performance management to supporting efforts to expand equal pay to learning how to write requirements for database systems. Channing did all this while balancing her time as a full-time student; she spent her second year at Carnegie Mellon’s public policy graduate school living in D.C., interning during the day and taking classes by night.

“Interning for the federal government allows you to check out exactly what kind of work they do and decide if it resonates with you,” said Tim McManus, vice president for education and outreach at the Partnership for Public Service, a nonprofit that advocates for the reinvigoration of the civil service workforce. “If you go and do an internship at the EPA or the Department of Energy, you’ll be exposed to not just the mission but the way the agency works. Is the culture one that is good for you? Is it fast-paced? Is it too slow? You have the ability to see for yourself.”

Can Big Pot and Big Alcohol Get Along?

Originally published in Talking Points Memo on August 15, 2014.
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On a chilly Sunday evening in early February, as tens of thousands of fans converged on the MetLife Stadium in East Rutherford, New Jersey, America’s first “Bong Bowl” began. The Seattle Seahawks and Denver Broncos—teams representing the only two states in the nation to have legalized recreational marijuana—were facing off to determine who would take home the coveted national football title. As they played, a static spectacle at the edge of the field raised eyebrows: massive advertisements slyly championing the merits of cannabis. Two billboards, one in the blue and green color scheme of the Seahawks, the other cloaked in Broncos’ orange and blue, read, “Marijuana is less harmful to our bodies than alcohol. Why does the league punish us for making the safer choice?”

Five months later the New York Times editorial board is asking the same question: why do we still prohibit marijuana? And the grey lady’s decision – to pit weed against alcohol – fits right up with some of the most vociferous advocates of repealing marijuana prohibition in America.

The Marijuana Policy Project (MPP), the country’s largest national advocacy organization solely committed to ending marijuana prohibition, purchased five billboard advertisements to surround the stadium for America’s most-watched football game. The organization’s goal was to challenge the NFL’s anti-pot policy and provoke a national conversation about the health benefits of marijuana—long-stigmatized and barely legal—compared to that of legal and relatively celebrated alcohol. One advert argued that marijuana is safer than both alcohol and football. Yet another demonstrated that the number of attendees to the last ten Super Bowls was roughly equal to the number of marijuana related arrests in 2012.

Celebrating smoking might have ruffled a few feathers, but the choice that caused the most consternation was to denigrate alcohol in favor of weed. “Marijuana is less toxic, less addictive, and less harmful to the body than alcohol,” said MPP Director of Communications Mason Tvert in a press release just days before the Super Bowl. “Why would the NFL want to steer its players toward drinking and away from making the safer choice to use marijuana instead?”

Once the pipe dream of Deadheads and aging hippies, marijuana is having a moment in State Houses – and editorial boardrooms – across the country. As marijuana goes mainstream, the alcohol industry is guardedly watching to see whether Team Pot can play nice. While not all cannabis advocates push for weed over beer, the voices who do claim weed is, indeed ‘better for you’ are loud, provocative and well-funded. And should it get ugly? The alcohol industry is preparing to fight back and challenge pot’s increasingly anodyne image.

A Growing Movement

Marijuana’s reputation – especially in comparison to alcohol – has undergone a radical change in a very short amount of time.

Nothing better exemplifies the public’s perception of pot during the early and mid-twentieth century than the now infamous 1930s propaganda film, Reefer Madness, where marijuana smokers actually lose their minds. Basically illegal beginning in 1937—when the federal government began taxing cannabis sales—by 1970, the federal government had passed the Controlled Substances Act which officially designated marijuana as illegal, and classified it as a Schedule I drug.

Beer, wine, and liquor reps, on the other hand, benefitted from the sheer American-ness of a good drink at the end of a hard day—a beer at the game, a cocktail at the bar, a glass of wine on a date. What could be more normal? Alcohol was everything, and weed was the margin.

But a lot can happen in forty-five years.

After so long in the shadows, the speed at which legalization is suddenly capturing the support of the American public is impressive; a recent Pew research poll found that 54% of Americans think that the drug should be legalized, up 2% from last year, and up 13 percentage points since 2010. When Gallup first began polling the public on this question in 1969, an era when marijuana had come to represent counter-culture, just 12% of Americans backed legalization.

It’s not just polling data. In July, Governor Andrew Cuomo signed legislation which made New York the 23rd U.S. state to legalize medical marijuana, following Missouri, which passed its own version in May. Over the last eighteen months, 36 states and Washington, D.C. have considered bills that would create new medical marijuana laws, lessen the penalty for possessing marijuana, or regulate marijuana more comparably to alcohol. Come this November, Alaskan voters will decide whether or not to join Washington and Colorado in legalizing recreational adult-use marijuana, with Oregon likely to follow suit.

And then, of course, there’s the New York Times editorial board, which just called for federal legalization, a move that delights marijuana advocates, and lobbyists.

But while for many of us the idea of legalized marijuana falls somewhere between inevitable and fairly distant as a political reality—the alcohol industry is way, way past that. Beer, wine and liquor do not care that legalization isn’t technically on the books. For them, it’s already a foregone conclusion. And that means that weed is already a real competitor.

 

PASS THE DUTCHIE ON THE LEFT HAND SIDE

If alcohol ignored marijuana as a real player in the world of party politics – small p – it’s no surprise. The world of pot smokers has been, for decades, a rag tag assemblage of Americans who smoke on the sly. But all of them shared one thing in common – they were toking up illegally and very few of them were lobbying to change their habit into something that could run as an advert on TV.

Even now, political momentum towards legalization aside, there is no such thing, really, as a “marijuana movement.” Instead, there are movements, and factions. And those divisions – to the degree they are really fissures – will not only determine the future availability of weed, but also how marijuana positions itself vis-à-vis the alcohol industry – both in terms of advertising, but also as a means of what helps this country loosen up.

“There are really two different sets of players on the cannabis side,” said Mark Kleiman, a professor at UCLA and leading marijuana policy expert. “There’s the weed movement and there’s the weed lobby.” Camps that are, themselves, internally divided.

For a long time, the pro-marijuana scene was part of the US counter-culture movement. The first campus legalization group began in 1967 at SUNY-Buffalo college: LEMAR, short for LEgalize MARijuana, was comprised of, as The Washington Post’s Marc Fisher puts it, “15 longhaired hippies who thought they could change the world.”

The “movement” to legalize really got its start though with the founding of the National Organization for the Reform of Marijuana Laws (NORML) in 1970. But at that time, no one would touch their cause, monetarily or otherwise. Indeed, the organization’s financial hurdles were almost its undoing. It was Hugh Hefner, a former alcohol-drinker-turned-pot-smoker, who decided to take a risk and offer NORML a small $5000 investment through the Playboy Foundation. Today NORML functions as a grassroots network with over 150 chapters across the country, promoting marijuana legalization with an emphasis on consumer needs.

In 1995, after months of infighting over strategy and tactics at NORML, some employees left the organization to found the Marijuana Policy Project. The new millennium brought still more players. Americans for Safe Access (ASA) founded in 2002, specifically advocates for medical marijuana on K Street. In 2010, came the baby – the National Cannabis Industry Association, (NCIA) – which promotes the trade interests of the burgeoning ‘cannabusiness’ sector- the likes of which would blow your Woodstock-era parents’ minds. NCIA represents more than 400 companies—like vaporizer sellers and automated rolling machine makers—in 20 states, a number that is projected to rise quickly.

This past June, 1,200 entrepreneurs, consultants, investors, accountants, attorneys and more came out to Denver, Colorado for NCIA’s first ever marijuana business summit.

Jazmin Hupp, a business and marketing specialist from New York City who grew up with a father who used medical marijuana for pain relief and “artistic mind expansion,” was there. Determined to challenge misconceptions around marijuana and those who use it, Hupp gives talks and workshops about marijuana myths; she’s also writing a book about effective branding strategies for cannabis companies. “One of the greatest parts of the conference for me was just the show of professionalism,” said Hupp who is weary of seeing marijuana users portrayed as dudes in dreadlocks smoking weed in dark basements. “I felt really inspired. This is a real industry.”

Cooperation and Conflict

A real industry, maybe, but one that hadn’t, until very, very recently had any perch on Capitol Hill, or anywhere near mainstream America.

That’s changing. In May, all the cannabis organizations lobbied to help pass an appropriations amendment in the House, offered by Rep. Dana Rohrabacher (R-Calif.). The amendment, which barred the DEA from spending funds to arrest state-licensed medical marijuana patients, was tacked on to the Commerce, Science and Justice Appropriations bill for fiscal year 2015. It passed 219-189. ASA issued a statement calling the House amendment “arguably the biggest victory yet in the contemporary fight for medical cannabis rights.”

“Rohrabacher was a real landmark, nobody had expected that quite yet,” said Dale Gieringer, state coordinator of California NORML. “We’ve been working on that bill for years.” Indeed: the first version of the Rohrabacher amendment was introduced in 2003, defeated in a vote 273-152. Five years before that a House Joint Resolution passed explicitly opposing statewide efforts to legalize medical marijuana under a doctor’s supervision. That 1998 resolution marked the first time in recent history that Congress formally took on medical marijuana as an issue.

But looking at the recent Rohrabacher win as proof that the marijuana organizations speak as a united front would be a mistake; some significant differences have emerged between the groups, and more seem likely to materialize in the future.

Marijuana organizations also anticipate fights with the other party drug – alcohol. In part that’s because even as marijuana begins to make positive inroads in public opinion, it can’t touch the role of alcohol in Western society, or Judeo-Christian culture writ large. MPP’s decision to bash alcohol was a gamble; poking the bear.

The Super Bowl was not the first time MPP attacked alcohol in such a high-profile way, and it likely won’t be the last. As an organization whose stated mission is to end marijuana prohibition and replace it with a system that is regulated like alcohol, MPP sees the comparison between the two substances as necessary and strategic.

Last summer, outside the NASCAR Brickyard 400 in Indianapolis, MPP purchased airtime to show an advertisement on the racetrack’s Jumbotron, touting marijuana’s safety compared to alcohol. It was no secret that two major sponsors of the race were Crown Royal Whiskey and Miller Lite. “Our goal is to make this weekend’s event as educational as it will be enjoyable,” said Tvert, of MPP, in a press release. “We simply want those adults who will be enjoying a beer or two at the race this weekend to think about the fact that marijuana is an objectively less harmful product.” The video ad presented marijuana as the “New Beer” –a substance “without all the calories or serious health problems”, that doesn’t contribute to hangovers, and is “not linked to violence or reckless behavior.” While the ad had the potential to reach hundreds of thousands of fans throughout the weekend, the Drug Free America Foundation, a group opposed to marijuana legalization, convinced the owners of the Jumbotron to pull it shortly after it first went up. No matter, its work was done: MPP’s advert racked up more than a million views on YouTube.

MPP has also been leading major state-level efforts to push for marijuana reform. In 2012, they funded the Campaign to Regulate Marijuana Like Alcohol, which was the historic Colorado grassroots effort to legalize recreational marijuana through a ballot initiative. Provocative billboards cropped up throughout the state, like one across from the Sports Authority Field at Mile High featuring a happy woman stating, “For many reasons, I prefer marijuana over alcohol. Does that make me a bad person?” The ad was positioned above a liquor store.

“The Colorado campaign was not run by us at all,” said Gieringer, who stressed that NORML prefers to maintain neutral relations with the alcohol industry. “They took swipes at the alcohol industry and tried to antagonize governors who took money from beer manufacturers.” The campaign took shots at Colorado Governor John Hickenlooper who opposed the amendment to legalize marijuana, arguing that as a former microbrewery owner, he was a hypocrite.

I ONLY SMOKE WHEN I DRINK.

Unlike the squabbling factions of the marijuana world, the alcohol industry long ago learned to speak with a unified voice in Washington D.C. “A lot of the policy vision and positions of all the groups are pretty much the same,” said Mike Kaiser, of Wine America, the trade association representing American wineries. On most regulatory issues, the alcohol industry tends to work together, bringing together brewers and oenologists to file joint comments to the Food and Drug Administration and to the Alcohol and Tobacco Trade Bureau.

Big alcohol, officially, is neutral on cannabis legalization. This hasn’t always been true: back in 2010, the California Beer and Beverage Distributors donated $10,000 towards an effort to defeat a marijuana legalization proposition on the ballot.

Yet, sanguinity on legalization doesn’t mean they will remain neutral on MPP’s rhetoric, or even with the idea of being grouped in the same category as marijuana.

Each industry has a slightly different way of framing the reputational risk to their product. Here the friendly kumbaya bits of the alcohol lobby starts to fall apart. The wine industry for example, feels that cannabis advocates are more focused on marketing weed as an alternative to other forms of alcohol, but not necessarily wine. “I think it’s more of an issue for beer,” said Kaiser of Wine America. “We’re monitoring the situation, but wine is generally considered to be more like a food than a beverage.”

Craft brewers, too, claim marijuana doesn’t scare them. “Craft brewers themselves are generally trying to change the paradigm of what beer looks like in this country, so the marijuana movement is not seen as a competitive thing for us, as it might be with larger brewers,” said Paul Gatza, Director of the Brewers Association, the trade group representing small independent American brewers. (He pointed out that there is often overlap between the populations who drink craft beer and those who blaze.)

Big beer, too, wants to draw a bright line between marijuana and beer. Beer, the implication, is wholesome – it reminds us of picnics, and parades, and baseball. It’s a socially acceptable way to unwind. Indeed the Beer Institute of America’s spokesman, Chris Thorne goes so far as to say it is “misleading to compare marijuana to beer, because beer is distinctly different as a product and industry.” Thorne doesn’t much like to see the two words – beer and marijuana – in the same sentence.

Robert Dupont, a long-time drug policy researcher and founding president of the Institute for Behavior and Health, says he regularly finds the alcohol industry to be quite unhappy when lumped together with marijuana. “They are very upset,” said Dupont, of those comparisons which equate alcohol and marijuana. “It’s really a problem for them, it’s tarring their product with the bad image. I see it all the time in my work with drunk driving, [alcohol folks] don’t like it when I say ‘alcohol and other drugs’ they wish I’d just say ‘alcohol and drugs.’”

And yet, of course, phrasing isn’t really the issue.

According to Pew research released this past April, about seven in ten Americans already believe alcohol is more harmful to a person’s health than marijuana. Moreover, 63% believe alcohol would still be more harmful to society, even if marijuana were as widely available.

DIME BAG BLUES

The billion-dollar question for the alcohol industry is literally that: cash. Will legal weed cut a deep hole into their bottom line? And if weed pushes the point – and wins it – that it’s a cleaner, safer high, what will that do to alcohol sales?

In 2012, the U.S. alcohol industry brought in $197.8 billion in retail sales dollars. If even a small percentage of Americans changed their substance-intake habits, the result would mean billions of dollars lost for the alcohol industry.

Problem is: no one knows what will happen if weed is legal. There is no historical data – even the Netherlands doesn’t have full legalization– so there is no way to judge, exactly how – or really, if – drinking habits will change with marijuana legalization. Are marijuana and alcohol substitutes rather than complementary substances as some studies suggest? Or will – as some researchers maintain – drinking actually increase as marijuana becomes more available? It’s impossible to know what the impact on alcohol use will be, if weed is sold similarly – available, controlled, but accessible, at every bodega.

The only thing researchers do know for sure is that marijuana, if legal, will be cheap. Given the low production costs associated with marijuana—(it’s basically just growing a plant)—experts like Beau Kilmer, Co-Director of the RAND Drug Policy Research Center, estimate that marijuana intoxication could, in a legalized world, cost pocket change. While we’re years away from this reality, you can just picture your high school brother making those economic tradeoffs in his head; weighing which controlled substance he and his friends should try and get next time your parents go out of town.

BREWSKIES AT THE GAME

Beer and wine may be as American as a baseball game, but Big Alcohol doesn’t feel at all relaxed about this debate. At alcohol trade association meetings, pot is already spoken of as a key competitor. A vigorous internal discussion has been taking place within the industry to figure out how they can establish working relationships with the marijuana world, and what to do if they can’t.

“I don’t think there’s necessarily any working together, but there’s certainly been some communication,” said Tvert, of MPP, who has spoken at several alcohol events, like the annual Wine and Spirits Daily Summit, which draws top executives in the wine and spirits industry. “But it’s generally been a matter of curiosity.”

Curiosity is a bit of a euphemism.

At the National Alcohol Beverage Control Association’s annual legal symposium, which draws state regulatory agency officials, corporate counsel, industry policymakers and private attorneys, a representative from the Marijuana Policy Project spoke. Attendees said that during the Q&A, “a couple people stood up and kind of attacked her” about MPP’s alcohol-bashing tactics.

“[T]he marijuana advocates are very unapologetic,” said William Earle, president of the National Association of Beverage Importers, (NABI), the trade association representing U.S. alcoholic beverage importers. “They are basically saying we’re going to continue to demonize alcohol because we think that’s a way to advance our message.”

Indeed, cannabis advocates feel very little pressure. “I’m not really too concerned about the alcohol industry,” said Tvert in an interview. “We are ending marijuana prohibition and it really has nothing to do with them.”

Since alcohol has been such a highly regulated industry ever since the end of prohibition in 1933, alcohol executives wonder, and worry, whether legal marijuana would be subjected to similar oversight. In the mean time, some are quietly reviewing and collecting all the available scientific literature, many of which challenge what they feel to be the public’s one-sided impression of marijuana’s health and safety effects.

For example, in July, Kane’s Beverage News Daily, an influential trade publication, published a piece entitled, “Why Does Marijuana Get a Pass on Pitching to Youth?” It argued that despite research suggesting young people are especially susceptible to social media influence, public health authorities go mum on things like Weed Tweets™, (@stillblazingtho), an unabashed pro-marijuana twitter account with over a million followers, 73% of whom are under 19. A team of researchers at Washington University School of Medicine in St. Louis, led by principal investigator Patricia A. Cavazos-Rehg, has been leading the social media research.

“I think there’s a concern that we’ve gotten our regulatory act together but would we be competing against an entity that does not,” said Earle of NABI. While groups like NORML welcome tight regulations for safe and consumer-friendly marijuana, other groups are interested more by the prospect of self-regulating their industry.

“We’re looking for regulation that’s fair,” said Taylor West, deputy director of NCIA, the marijuana trade association. West insists her organization understands the fragile nature of public opinion, the high level of scrutiny they’re all under, and the need to build a mature industry. “We are encouraging our members to adopt responsible practices from the outset, I think it’s more sustainable.”

With concerns over potential regulatory double standards, hesitant alcohol folks note that it’s much more difficult to monitor and punish drivers who are high than drivers who are drunk, which could hinder law enforcement’s ability to regulate it. It may already be happening: a National Institute on Drug Abuse study released in July showed high school seniors were more likely to drive high than drunk – but what that meant – in terms of affect on drivers, let alone penalty for the crime – was uncertain.

While Big Alcohol has expressed that they would prefer to co-exist amicably in the marketplace, in their minds, the marijuana industry has to make a choice: pot can choose to be their friend, or to be their enemy. And if Big Pot decides they want to continue to launch regular attacks on alcohol, then alcohol will ultimately fight back.

Earle says he finds marijuana’s attitude towards alcohol neither wise nor strategic. “It’s like you have the new kid on the block who thinks they can gain traction by just besmirching everyone else’s reputation.”

And perhaps they can. Or, another likely scenario is that MPP’s strategy could backfire. While there is no known fatal dose for marijuana, the drug is substantially more potent than it used to be. The University of Mississippi Potency Monitoring program found that the average THC level of all seized cannabis increased from 3.4% in 1993 to 8.8% in 2010. Researchers expect it will be only get easier to create and market highly potent marijuana, especially to teenagers, as legalization advances.

Everyone in the party biz knows one dirty little secret: A legal for-profit marijuana industry would, likely, be built around catering to the heaviest users. That’s how the alcohol industry works too: the top 20 percent of drinkers consume four out of five of total drinks sold.

Although the industry’s marketing efforts might feature a successful business executive who smokes occasionally on the weekends with her colleagues, and indeed, most users in a legalized world would only be casual users, the volume of drug consumption doesn’t depend very much on the total number of users. As writers of the book, Marijuana Legalization: What Everyone Needs to Know, put it, “One eight-joint-a-day smoker is more important to the marijuana industry—legal or illegal—than fifty people who smoke a joint a week…if we create a licit market, we should expect the industry’s product design, pricing, and marketing to be devoted to creating as much addiction as possible.”

“The minute you unleash the opportunity to make millions and millions of dollars, no matter how dangerous that is, people are going to try to do it,” said Alex Wagenaar, an alcohol policy researcher at the University of Florida. “Our capitalist system is great for a lot of things, but it’s not a great thing for drugs that are habit-forming, addictive, and have huge health care and social costs attached.”

And once you have more heavy users, you run the risk of greater problems. People who toke up, obviously, like the feeling: the relaxation, the blurring of lines, the mellowing out. Because, let’s face it, we’re not talking about sodas; this is not sobriety. A member of the alcohol industry who asked to speak on background put it like this: “Marijuana is still a drug. Something will inevitably happen, and they have made a huge misjudgment. No industry with any sense of the tort system, or how civil court damages work in this country would be making the health claims they’re making.” Whether that’s a car accident, injury or death—the potential for drug-related accidents certainly looms large.

In other words, while tobacco is, in many ways, far less risky than alcohol, these days, at least, you don’t see tobacco manufacturers putting up billboards calling it safe.

“I kind of view it as naïve,” added Earle, of NABI. “If [marijuana advocates] were good stewards of their lobbying efforts you’d think they’d realize that we’re both in the same regulatory wheelhouse.”

The marijuana lobby, though, is still in its infancy. NCIA hired its first full time industry lobbyist just in the past year. Compare that to the over 200 lobbyists in DC who lobby on behalf of wine, beer and liquor.

“The alcohol industry is massive and dwarfs us,” said West of NCIA, who thinks they are a long way off from the point where they might need to start worrying about their relationship to alcohol. “We’re also just in a completely different place right now in terms of still teaching people about why it makes sense to end prohibition.”

To some extent it’s true that the conflicts have not yet bubbled to the surface, but given the political momentum around legalization the country has seen recently, conflict might not be as far off as perhaps NCIA would like to suggest. The Arcview Group, a San Francisco investment and research firm that focuses on cannabis, valued the national legal market this year at $2.57 billion. They project that number to rise to $10.2 billion in the next 5 years.

That’s the kind of money that will buy a lot more billboards in years to come.

Julian Castro Should Visit Baltimore on the Way to His New HUD Secretary Desk

Originally published in Next City on July 11, 2014. 
—–

“It’s not just about housing,” said Michelle Green. “They try to help low-income people branch out and do their best.” Green, who had moved to Columbia, Maryland from one of Baltimore’s most crime-ridden public housing projects in order to enroll her four sons in better public schools, was talking about Baltimore’s Housing Mobility Program.

After following 110 Baltimore Mobility participants since 2003, sociologist Stefanie DeLuca concluded that when housing choice vouchers are combined with sustained counseling, training and support, families will be more likely to move away from poor residential areas and not return. (DeLuca’s report on the program was published in theJournal of Public Policy Analysis and Management.)

Previous studies suggested that even with substantial subsidies, poor families would not leave their impoverished communities. Yet with the Baltimore approach, more than two-thirds of the families that moved from the city to the suburbs remained there one to eight years later, and many mothers who previously expressed no interest in leaving the city later declared they’d changed their minds. The increased support helped individuals change their expectations of what different environments could provide for their children and themselves.

Unlike other housing experiments, Baltimore’s program is more than just a rent subsidy; it has provided more than 2,400 families with extensive support before, during and after their moves. (The program was created as part of a remedy for a lawsuit filed in 1995 by the ACLU in which the court ruled that HUD failed to provide housing residents equal access to integrated, low-poverty neighborhoods across Baltimore.) Accepted applicants who pass background checks and meet other eligibility criteria are given intensive counseling, financial literacy and credit repair training, and housing search assistance.

“I take my hat off to MBQ. [Metropolitan Baltimore Quadel is the company that oversees the program.] They let you know everything you need to know before they even let you sign on the dotted line of the lease. They’re helping a lot of lives,” said one participant.

Another key difference between Baltimore Mobility and traditional housing choice vouchers is that the Baltimore vouchers are regionally administered and therefore connect city residents to suburban housing options. If a Baltimore resident wants to move to the adjacent Anne Arundel County, she doesn’t need to apply to the suburban housing authority. This coordination between housing authorities offers significant bureaucratic relief.

Erika Poethig, a housing policy expert at the Urban Institute, says that regionally administered vouchers like those in Baltimore are rare but may become more prevalent in the future as policymakers search for ways to conserve a declining pool of financial resources. A 2013 Brookings report on the housing choice/housing voucher program argues that the current “balkanized system” of disparate housing authorities “creates duplication, overlap and inefficiency” while also “raising administrative costs.”

Of course, politics can get in the way. The creation of regionally administered programs would inevitably take some power away from local authorities. The shift would require that local agencies — with their separate boards and separate staffs — cooperate with neighboring towns and counties and have less control within their own communities. Phil Tegeler, executive director of the Poverty & Race Research Action Council, believes such a change would require some serious incentives at the federal level. But moving in this direction “would also impact the idea of local housing authorities acting as a community gatekeeper,” said Tegeler. “If you had a much more fluid system regionally, I think it could overcome a lot of the segregation problems that we see now.”

Indeed, Baltimore’s encouraging results have the potential to change the way policymakers think about traditional housing choice vouchers. Tegeler says his organization regularly cites the success in Baltimore in its advocacy efforts with HUD.

Other cities are modeling elements of Baltimore’s success, too. In Philadelphia, HUDrecently pledged $500,000 to develop a new mobility program, with goals to increase housing search assistance and to provide low-income families the chance to rent in higher-opportunity areas. In Seattle, the King County Housing Authority has launched a new mobility program aimed at providing families with more information about neighborhood and school quality as they move. Quadel played a direct role in helping programs get off the ground in other cities too.

DeLuca’s study suggests that with certain policy revisions, the housing choice voucher program could do more to overcome economic and racial segregation in U.S. cities and better assist the more than two million households that use the program. Moreover, it’s within HUD’s jurisdiction — Julian Castro take note — to make many of these policy changes independent of Congressional approval.

This wouldn’t come without a financial cost. Currently, a housing authority might have to choose between allocating resources to help fewer families move to low-poverty neighborhoods or helping more families move in general. Joel Johnson, executive director of the Montgomery County Housing Authority in Southeastern Pennsylvania explains that, “we receive a fixed dollar amount from HUD to support voucher participants, so that money can only go so far. If everyone moved to the [finest neighborhoods], we’d serve fewer people.”

The majority of housing authorities across the country already have long waiting lists, and money for low-income housing and voucher programs has been increasingly tight in recent years. Between 2005 and 2011, the average cost per voucher went up less than rents, and the sequestration cuts of 2013 were particularly detrimental.

Poethig notes that “unless the resource outlet changes, it will be really difficult to figure out how to get the significant investment.”

DeLuca doesn’t dispute the heft of the investment, but after her study, she’s a believer in Baltimore’s results. “If you want to have a housing voucher program that works,” she says, “this is what it takes.”

Baltimore Since Beth Steel: Hopkins Hospital Workers Fight for 15

Originally published in Dissent on June 26, 2014, co-authored with Shawn Gude.
———————–

In July 1959, workers at the world’s largest steel mill—the Baltimore-area Sparrows Point plant—went on strike. Hundreds of thousands of United Steelworkers members from across the country joined them, flatlining production for months. When they finally returned to work, they’d achieved another substantial wage increase, the latest in a series of impressive postwar wins. In working-class cities like Baltimore, it paid to be a steelworker.

This Friday, fifty-five years later, about ten miles northwest of Sparrows Point in East Baltimore, 2,000 low-wage workers at the internationally renowned Johns Hopkins Hospital are expected to begin their own strike—the second in as many months. Represented by 1199SEIU, the health care workers union Martin Luther King, Jr. famously referred to as his favorite union, they, too, seek higher pay. Despite working full-time hours, many earn too little to support themselves and their families—leaving them no choice but to scramble for Medicaid, food stamps, and housing assistance.

One of those workers is Kiva Robbins. Although she’s worked at Johns Hopkins Hospital for the past twelve years, Robbins, an environmental services employee, earns just $12.20 an hour. When her rent increased last fall, she found herself unable to pay the bills for herself and her two sons and was forced to move into a relative’s tiny apartment. Prior to losing her home, she had already been relying on food stamps and other forms of public assistance to supplement her Hopkins pay.

SEIU, still in negotiations with Hopkins Hospital, is fighting for a contract that would relieve such economic insecurity by mandating a minimum wage of $14, or $15 for employees with at least fifteen years of experience. (Currently, a quarter of unionized employees make less than $11.47 an hour.)

With Johns Hopkins Hospital and Health System, in conjunction with Johns Hopkins University, ranking as Baltimore’s largest private employer, the outcome of the SEIU campaign holds tremendous implications for the future of the Baltimore economy—and countless other struggling postindustrial cities.

                                                                                  * * *

On May 10, thousands convened in Baltimore’s downtown Inner Harbor to support the hospital workers’ efforts. Dubbed the “Mother’s March & Rally for Justice,” the event took place at McKeldin Square, the same spot where Occupy Baltimore camped out three years ago. Buses of SEIU members and supporters from New Jersey, Massachusetts, New York, and Washington, D.C. joined the local community, hoisting signs that read Prestige Doesn’t Feed Our Families! and Honor Mothers! End Poverty Pay for Families at Hopkins! Annie Henry, an elderly instrument processor who has been working with Johns Hopkins Medicine for forty-five years, recalled when Coretta Scott King came to Baltimore in 1969 to help the hospital workers in their initial unionization campaign. “Never in forty-five years did I think I’d still be doing this,” Henry said. “We want to be paid our worth.”

In 2010, Johns Hopkins employed nearly 34,000 workers in Baltimore, including 20,000 at the hospital. So great is Hopkins’ clout in the labor market that a substantial concession on wages would likely boost pay across the city. “It would have a great effect,” said John Reid, executive vice president of 1199 and leader of the negotiations with Hopkins. “Other employers would have to be as competitive as Johns Hopkins to recruit and retain staff in Baltimore.”

The economic picture in Baltimore ranks among the worst in the nation. U.S. Census Bureau data reveals that the poverty rate in Baltimore has risen by about 5 percentage points since the 2008 recession, leaving a quarter of all residents, and more than 37 percent of all children, living in poverty. The median annual income among Baltimoreans is $33,000; for those without a high school degree, that number drops down to $20,000. Of the nearly one-fifth of all adults in Baltimore without a high-school degree, some two-thirds are unemployed or do not participate in the labor force at all.

According to the Jobs Opportunities Task Force (JOTF), a policy organization that conducts research on the Maryland workforce, the Baltimore metro area lost more than 140,000 jobs between 1969 and 2009 —95,000 of them in Baltimore alone. Today, just 4 percent of Baltimore area jobs are in manufacturing.

Baltimore’s service sector—comprised primarily of the hospitality, retail, health care, and human services industries—has steadily grown while every other sector has declined. Requiring very little education or formal training, modern service sector jobs also offer few opportunities for career advancement and require skills not easily transferable to other fields. And, in contrast to the goods-producing jobs of the manufacturing era, service jobs are typically non-unionized and low-paying. The increase in demand has been greatest for health care workers; JOTF found that as of 2009, a full 20 percent of Baltimore jobs were in the health care and social assistance sector.

Former manufacturing hubs like Baltimore have given way to “eds and meds” economies, or cities where universities, colleges, and medical facilities are now some of the largest private employers. In Rochester and Baltimore, “eds and meds” make up more than 13 percent of the city’s total employment. In Philadelphia, that number hits 37 percent, and in Camden, New Jersey, a staggering 43 percent. In Cleveland, meanwhile, four of the top five employers fall into the “eds and meds” category.

An “eds and meds” unionization battle similar to the one at Hopkins Hospital is taking place at the University of Pittsburgh Medical Center (UPMC), where SEIU is working to organize more than 10,000 of UPMC’s workers, and to push the hospital system—the region’s largest employer—to increase their pay. Health care workers in Pittsburgh echo their Baltimore counterparts, decrying the “poverty pay” that leaves them unable to afford basic necessities. “[W]hen UPMC workers succeed,” Neal Bisno, president of SEIU Healthcare PA, told the Pittsburgh Post-Gazette, “it will spark workers across the country.”

                                                                           *   *   *

Bethlehem Steel’s Sparrows Point plant anchored the Baltimore economy for decades. Built in the late nineteenth century and purchased by “Beth Steel” in 1916, the mill steadily churned out steel through the 1920s, but it wasn’t until WWII that production really ramped up. Steel, central to the fight against fascism, was a coveted commodity. The increased production brought more jobs to the region, attracting thousands of workers. Black steelworkers, many of whom had migrated from southern states, endured deplorable racial discrimination—Sparrows Point was segregated until the early 1960s, and blacks were systematically passed over for promotions—but the pay was still better than down South. It was tough, grimy, dangerous work for blacks and whites alike. Longtime steelworkers bore the marks of their years in the mill—small face hemorrhages, indelible gashes, missing fingers. Its redeeming quality was the remuneration.

Yet the high pay hadn’t come without struggle. When radicals and progressive unionists split from the more conservative American Federation of Labor in the 1930s to establish the Committee for Industrial Organization (later renamed the Congress of Industrial Organizations), organizing steel—then the country’s largest industry—was at the top of their list. Sparrows Point workers faced severe intimidation during the organizing drive. Beth Steel, as veteran Baltimore journalist Mark Reutter documents in his 2004 book Making Steel, equipped company police with “several boxcars of guns and ammunition” and hired Pinkertons to spy on organizers and assemble dossiers on union-sympathizing workers. In 1941, two years after the National Labor Relations Board ordered the company to cease its illegal anti-union chicanery, Sparrows Point workers voted overwhelmingly to unionize. Over the next twenty years—abetted by absent foreign competition and hefty profits across the industry—they repeatedly struck for higher wages, better working conditions, and more generous benefits.

Industry-wide unionization and centralized labor-management bargaining—in which the negotiated contract between the United Steelworkers and U.S. Steel set the standard for the entire industry—gave steelworkers tremendous collective power. And they weren’t shy about exercising it. Between the end of WWII and 1959, steelworkers walked out six times, in work stoppages so crippling that the president repeatedly intervened. It took these militant, habitual strikes—not simply high profits or a monopolistic industry—to boost living standards; nothing was conferred on workers through sheer management magnanimity.

Sparrows Point loomed large over Baltimore, both physically and economically. Located in an unincorporated community just southeast of Charm City, the steel mill was the world’s largest by the late 1950s. Employment eclipsed 30,000. Even twenty years later, after foreign imports eroded American steel’s dominance and company shortsightedness caused Beth Steel to lose ground to competitors, Sparrows Point still employed well over 15,000, strengthening the hand of workers across the labor market. In its heyday, and even in decades of relative decline, the plant provided a “family wage”—compensation sufficient to raise a family on a single income. No doubt there was a low-paying periphery. And the model, which rendered wives economically dependent on their husbands, reinforced patriarchy in the home. But the high-wage, heavily unionized center—of which Sparrows Point was the archetype—provided the foundation for working-class prosperity.

Bethlehem Steel, in other words, played the economic role that Johns Hopkins University could play today.

                                               *   *   *

Union officials estimate that raising the wages of their members to a $14 minimum wouldadd only an extra $3 million to the Hopkins’s annual payroll expenses, when the non-profit hospital last recorded an operating surplus of $145 million. But the administration has been recalcitrant. “Hopkins has been using the excuse that the ‘economy is too uncertain’ to raise wages,” said 1199 spokesperson Jim McNeill.

Johns Hopkins Medicine spokeswoman Kim Hoppe said in an email that the hospital “strives to provide a positive work experience” for their employees through competitive salaries and benefits. And Ronald Peterson, president of Johns Hopkins Hospital, wrote in the Baltimore Sun that their “commitment to fair compensation” includes a benefits package that, among other things, supports professional development classes and money to offset the cost of their children’s college tuition. Yet, for many who live in poverty, unable to afford rent or child care, those types of benefits often look better on paper than they turn out to be in practice. “It would be almost impossible for me to take advantage of the college tuition benefits President Peterson mentions,” Kiva Robbins wrote in a response in the Sun.

Despite the workers’ compelling moral case for a raise, they could stand to be in a stronger position at the bargaining table. To be sure, SEIU membership is growing: in 2001, the last year SEIU workers at Hopkins Hospital went on strike, there were 1,600. Today, 2,000 are represented by the union. And in 2009, 1199 launched their “Heart of Baltimore” campaign, an attempt to increase the visibility and wages of area health care workers. But over the past decade, Reid admitted, “there’s been no real organizing at Johns Hopkins,” and the union still only represents one-tenth of the hospital’s total workforce.

Moreover, in contrast to other SEIU locals, 1199 has never organized Hopkins nurses. This is in part due to the general difficulty of organizing—unfavorable labor law and company intimidation doom many such attempts—but according to McNeill, there has never been a serious effort in the local’s forty-five-year history to try and bring nurses into their union. “It would make us stronger, without a doubt,” Reid acknowledged. While increasing membership anywhere in the hospital would build worker power, organizing nurses—the most sizable bloc of skilled, difficult-to-replace employees in a hospital—is especially important. It’s not an overstatement to say that organizing nurses could be the fulcrum by which Hopkins workers’ middling pay becomes standard-setting.  

Hopkins appears to recognize this as-yet-untapped power. In an April statement, the hospital said, “Our patients and their families are always our first priority, so it is important they understand that the employees represented by 1199SEIU work primarily in service and maintenance jobs and are not involved in providing direct patient care.” Employing a strategy in which SEIU would represent both nurses and maintenance workers—those responsible for “providing direct patient care” and those who do other essential, but poorly compensated work—is the only way health care workers can approximate the might that Sparrows Point workers once had.

Johns Hopkins Hospital, fulfilling its avowed mission of improving community health, could be the bulwark of a broadly prosperous, union-dense local economy. While some have charged that employment growth will eventually plateau in “eds and meds” economies, Johns Hopkins already employs enough workers to raise wages throughout Baltimore. But workers themselves must midwife this alternative model. For all its rhetoric about healthy communities, Hopkins won’t willingly pay every worker a decent wage, any more than Bethlehem Steel would have. And while in some ways the contemporary workplace is less amenable to unionization, workers at places like Hopkins Hospital do have one thing on their side: “eds and meds” institutions can’t pack up and leave. The outsourcing threat, so chastening to manufacturing workers, isn’t in play.

The endpoint of these postindustrial economies isn’t predetermined. Essential to effecting a pro-worker sea change will be dogged organizing, collective action, and political support. The right to live with dignity and economic security, in Baltimore and elsewhere, won’t be secured without a fight.

Marginalized Economists: Revisiting Robert Heilbroner

Originally published on the US Intellectual History blog on May 25th, 2014.
—————

While historians have begun to take interest in the history of economic thought, the tendency to research the most influential figures, the “historical winners”, has persisted as the predominant scholarly trend. But there are merits to studying the dissenters, too. Following not only how the economics profession took the turn it did but also looking at those who tried to advocate for an alternative vision, can help to clarify the seeming intellectual hegemony of our economic times.

Robert Heilbroner, arguably the most prominent dissenting American economist of the late twentieth century, followed his changing discipline with despair. So great was his anxiety over the powerful trends capturing the minds of his colleagues, championed by individuals like Paul Samuelson, Milton Friedman and Gregory Mankiw, that he dedicated himself to addressing what he felt were economics’ existential threats. Yet despite his efforts, with over twenty books to his name, Robert Heilbroner never gained recognition and mainstream respect. Even in 2014, there remains little work written about him. [1]

Born into an affluent German-Jewish family in 1919, Robert Heilbroner was no stranger to privilege. Yet when his father died when he was just five years old, and his family’s chauffeur then became his surrogate father, Heilbroner developed a nascent sense of class-consciousness. Heilbroner “sensed the indignity of [his driver’s] position as a family intimate yet a subordinate.”[2] Later in life Heilbroner would say that he felt the experience “explains something about my…personality and hence about my work. I’ve found myself pulled between conservative standards on the one hand, and a strong feeling for the underdog on the other.”[3]

Heilbroner went on to Harvard in 1936, and became interested in economic thought after readingThe Theory of the Leisure Class during his sophomore year. He called the experience “an awakening” and went on to graduate with majors in history, government and economics. [4] (Fortuitously: read Andy Peal’s recent post on Veblen’s “iconoclasm”.) Throughout his life one could spot the Veblenian influence in Heilbroner’s work; it was his central conviction that the “search for the order and meaning of social history lies at the heart of economics.”[5]

Heilbroner worked during an era of great political and cultural upheaval. In the late 1940s and 50s, while other European countries were suffering from the harsh ramifications of the war, American economics grew rapidly. Not only was America’s economy growing strong, but employment opportunities for economists were also expanding ever since the passage of the New Deal. Moreover, when many war veterans went off to college on the GI Bill of 1944, many of them chose to study the social sciences, creating a new demand for economics professors. Thus, economics departments grew to a size that American universities had never before seen.

Additionally, partly due to the influence of wartime planning, statistical study and empirical work became increasingly interwoven. After 1945, economics grounded itself more firmly within the confines of quantitative methods, including algebraic procedures, theoretical models, and economic statistics. When Paul Samuelson published Foundations of Economic Analysis in 1947, he constructed a persuasive framework that would guide the economic discipline towards a field defined much more through the development of testable propositions. The influence of John Maynard Keynes also helped to establish mechanisms that could be analyzed formally, setting the stage for the transition to math. [6] Economists like Milton Friedman also followed up on all this in the early 1950s, pushing for a “positivist” economic movement that would be “in principle independent of any particular ethical position or normative judgments.”[7]

As economics drifted in a more mathematical direction, the former stronghold of the institutionalist camp began to falter. Universities espousing the new mathematical approach like MIT, the University of Chicago and Berkeley rose to prominence, while former bastions of institutionalism, like Columbia and the University of Wisconsin-Madison, declined dramatically in relevance and influence. [8]

Robert Heilbroner’s most famous book, The Worldly Philosophers, provides insight into what he thought about these new professional trends. Published in 1953, the book which traces the lives of economists like Adam Smith, Karl Marx and others, became one of the most widely-read texts ever written on the history of economic thought. Although Heilbroner self-described politically as a democratic socialist, he reserved immense admiration for economists like Smith and Schumpeter. In fact, realistically, he hoped to see a return to economic conversations rooted in the spirit of thinkers like Smith. That would demand, for example, that to really theorize on markets and businesses, as Smith does in The Wealth of Nations, one must also delve into topics like justice, virtue and conscience, as Smith does in The Theory of Moral Sentiments. [9] In a 1999 New York Times interview, just six years before his death, Heilbroner said, ”The worldly philosophers thought their task was to model all the complexities of an economic system—the political, the sociological, the psychological, the moral, the historical… modern economists, au contraire, do not want so complex a vision. They favor two-dimensional models that in trying to be scientific leave out too much.” [10]

To be sure, Robert Heilbroner did not oppose the entry of mathematics into economics. He felt a quantitative approach could augment the thick, social and philosophical analysis already (or at least formerly) employed. And he recognized that math is simply the only tool economists have available to answer certain questions. Heilbroner differed from his colleagues not over whether math was useful, but over what math was capable of explaining. Where colleagues like Friedman pushed a positivist agenda to avoid “normative” answers to some of society’s toughest questions, Heilbroner tried to show that all decisions carry inherently normative judgments. And when individuals like Greg Mankiw asserted that economists were capable of tackling economics with the same objectivity as that of a natural scientist, Heilbroner pushed back.

“What does it mean to be “objective” about such things as inherited wealth or immissterating poverty? Does it mean that those arrangements reflect some properties of society that must be accepted, just as the scientist accepts the arrangements studied through a telescope or under a microscope? Or does it mean that if we were scrupulously aware of our own private endorsements or rejections of society’s arrangements we could, by applying an appropriate discount, arrive at a truly neutral view? In that case, could one use the word “scientific” to describe our findings, even though the object of study was not a product of nature but of society? The answer is that we cannot.”

Heilbroner also strove for economic conversations that ended the “precipitous decrease” in the presence of the word capitalism. Without referring to the economic system by name, Heilbroner argued, we encourage individuals to forget what the system is for and in whose interests it is working. He looked to Joseph Stiglitz, who penned a 997-paged economic textbook, and found in it a grand total of zero references to the word “capitalism.” These types of absences reinforced Heilbroner’s angst that society was losing sight of a fundamental descriptor necessary to conceptualize modern economics. [11]

If these were Heilbroner’s only academic critiques, perhaps he would not have been so marginalized. But Heilbroner went further in his attempts to push social analysis into economics, suggesting that, “indeed the challenge may in fact require that economics come to recognize itself as a discipline that follows in the wake of sociology and politics rather than proudly leading the way for them.” This suggestion of inverting the disciplinary hierarchies highlighted an epistemological modesty not shared by many other economists in the field. [12]

While Robert Heilbroner never lived to see economics revert to a broader, more social analytical framework, his work nevertheless may have had some tangential influence over areas outside of economics. Cornell sociologist Richard Swedberg observed that “one of the most important developments” for the social sciences in the past few decades “has been the race to fill the void created by mainstream economics’ failure to do research on economic institutions.” For example, a new academic field began to take form in the 1980s—that of economic sociology. In 1985, Stanford sociologist Mark Granovetter published an article entitled, “Economic Action and Social Structure: The Problem of Embeddedness”, laying an intellectual base for the new field. Granovetter’s goal, echoing Heilbroner’s rhetoric, was to push economics from its knee-jerk emphasis on rationality towards a greater focus on the ways in which social structure and social relations factor into economic systems and power hierarchies. As Granovetter said, “there is something very basically wrong with microeconomics, and that the new economic sociology should make this argument loud and clear especially in the absolutely core economic areas of market structure, production, pricing, distribution and consumption.” [13]

New programs within graduate history departments have also emerged, designed to focus more specifically on the relationship between historical events and economics. Duke University’s Center for the History of Political Economy was founded in 2008 and Harvard University’s Joint Center for History and Economics was founded in 2007.  And, just this past springthe New School launched a new center, the Robert L. Heilbroner Center for Capitalism Studies, which seeks to blend “the history of capitalism, economic sociology, international political economy, heterodox economics, critical theory, economic anthropology, and science and technology studies.”[14]

There is some evidence that suggests that even the economics profession might be changing. When Thomas Piketty published Capital in the Twenty-First Century, in the spirit of the worldly philosophers, he advanced an argument for a global wealth tax not only based on his analysis of quantitative data, but also from his engagement with philosophy, history, and even 19th century literature. And the Institute for New Economic Thinking, founded in 2009, is meant to support economic projects and research that challenge the traditional paradigms of rational models and markets.

More aspects of Robert Heilbroner’s work deserve revisiting. His attentiveness to history and his fundamental humility led to some very fascinating writings about the future, technology, business civilization and the capitalist order. His rich 40-year career leaves us much more in which to sift and question.

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[1] The best, albeit limited, secondary sources I could find included Loren J. Okroi’s Galbraith, Harrington, Heilbroner: Economics and Dissent In an Age of Optimism (Princeton: Princeton University Press1988), Mathew Forstater’s “”In Memoriam: Robert L. Heilbroner The Continuing Relevance of The Worldly Philosophy” in Economic Issues 10.1 (March 2005) and Robert Pollin’s “Robert Heilbroner: Worldly Philosopher” in Challenge (May/June 1999).

[2] Pollin, “Heilbroner”, 34.
[3] Okroi, Heilbroner, 183.
[4] Ibid.
[5] Heilbroner, Robert L. The Worldly Philosophers. (N.p.: F. Watts, 1966.) 16.
[6] Backhouse, Roger and Philippe Fontaine. History of the Social Sciences Since 1945. (Cambridge: Cambridge University Press, 2010) 39, 40, 46, 52.
[7] Friedman, Milton. Essays in Positive Economics.(Chicago: UChicago Press, 1953) 4
[8] Backhouse, History of the Social Sciences, 42.
[9] Dieterle, David Anthony, Economic Thinkers: A Biographical Encyclopedia. (Greenwood, 2013) 131.
[10] Backhouse, Roger; Bateman, Bradley. “Worldly Philosophers Wanted.” New York Times.November 5, 2011.
[11] Heilbroner. The Worldly Philosophers. 314, 318, 315, 318.
[12] Heilbroner, Robert L., and William S. Milberg. The Crisis of Vision in Modern Economic Thought. (New York: Cambridge UP, 1995) 126.
[13] Swedberg, Richard. “A New Economic Sociology: What Has Been Accomplished, What is Ahead?” Acta Sociologica.(1997), 161, 163, 164.
[14] Ott, Julia, and William Milberg. “Capitalism Studies: A Manifesto.” Public Seminar RSS. Graduate Programs at NSSR, 17 Apr. 2014.