Jobs

The “jobs” shell game

Jesse Hawthorne Ficks
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The “jobs” shell game

Written with Nima Maghame

news@sfbg.com

While many San Francisco city officials have been trying to figure out how to close a projected budget deficit of more than $520 million, Mayor Gavin Newsom has spent the last month trying to make that spending gap even larger by aggressively pushing a variety of business tax cuts that economists say will do little to improve the local economy and could actually make it worse.

Newsom first proposed his so-called “local economic stimulus package” a year ago during his ill-fated run for governor, just as President Barack Obama was pushing his own economic stimulus plan. But unlike the federal government’s $787 billion plan, about a third of which involved tax cuts demanded by conservatives, Newsom proposed to cut local business taxes while also deeply slashing local government spending and laying off hundreds of city workers.

Most economists say that’s a terrible idea. In fact, a report issued at the time by Moody’s Investor Services made it clear that every dollar of direct government spending adds about $1.60 into the economy (or $1.73 if it’s on food stamps, the most stimulative spending government can make), whereas business tax cuts add only about $1 to the economy for every dollar spent.

We clashed with the Mayor’s Office at the time on our Politics blog (see “Mayor Newsom doesn’t understand economics,” 2/13/09), with Newsom’s spokesperson telling us the mayor was relying on the input of City Economist Ted Egan. But when we interviewed Egan about the issue, he agreed that it’s a bad idea to slash government spending to pay for tax cuts.

“We were in no way saying you should cut taxes to stimulate the economy, particularly if it means reducing government spending,” Egan told us then. And when we asked directly whether it’s better for San Francisco’s economy for the city to directly spend a dollar on payroll or to give that dollar away in a private sector tax break, he told us, “The consensus among economists is that most of the time government spending stimulates the economy more.”

The Board of Supervisors basically ignored Newsom’s proposal. But he revived it last month, expanding the proposals with even more private sector subsidies and making them the centerpiece of his Jan. 13 State of the City speech, publicly pushing it since then with a series of public events at businesses located in the city.

And this time — with the local economy still slow, projected city budget deficits bigger than ever, and little serious talk about how the city can bring in more money — it appears the proposals will be the subject of a series of hearings before Board of Supervisors’ committees in the coming weeks.

Newsom’s tax cut proposals include a proposal to waive the 1.5 percent payroll tax (the city’s main business tax) for all new hires; extend and expand the payroll tax exemption for biotech companies (see “Biotech’s bonanza,” p. 12); give small businesses tax credits for their spending on health plans; and allow developers to pass one-third of their affordable housing in-lieu fees onto future homeowners.

Newsom and his Press Secretary Tony Winnicker have spoken euphorically about the proposals, saying they’re desperately needed to spur the local economy. “We believe that enacting these tax incentives, particularly the payroll tax credit for new hires, is one of the single biggest things we can do for economic growth,” Winnicker said.

Despite repeated questions about the economists’ concerns over financing tax cuts with government spending cuts, we couldn’t get them to address the tradeoff directly. “The mayor will support critical public services,” was all Winnicker would say about the deep cuts that Newsom is expected to announce in his June 1 budget.

Sup. John Avalos, who chairs the Board of Supervisors Budget and Finance Committee, expressed more skepticism about the mayor’s proposals. “Do tax breaks have the intended effect of stimulating the economy? As we underfund government services, are we getting a net gain or are we getting something taken away? For the very small businesses in my district, it’s going to be trickle-down economics. It’s very unrelated and unmeasurable in benefit,” he told us.

David Noyola, board aide to President David Chiu, said his boss is supporting the biotech tax credit but reserving judgment on the rest. “It’s going to be a cost-benefit analysis,” Noyola said. “When we’re talking about jobs, we’re talking about public and private sector jobs, always.”

While Egan’s economic analysis predicts tax cuts will encourage some economic growth, even he is circumspect about the good it will do, particularly without finding a way to avoid deep cuts in city spending. “The truth of the matter is that our stimulus efforts are small because the city has relatively small power to affect the local economy,” Egan told us.

That’s the consensus economic opinion. Huge federal spending can help a national economy a little bit, but local economies are just different animals that local governments are largely powerless to really alter, particularly through tax cuts.

“I agree with Egan: city government has little power over the local economy,” Mike Potepan, an urban development economist at San Francisco State University, told the Guardian.

Both economists agree that tying tax cuts to job creation or development stimulus is better than general tax cuts, but that neither is good if it means laying off more city workers.

“Research shows that by cutting taxes you have more business activity where studies show it is likely to effect employment,” Potepan said. “On the other side, you have to think about revenue. Cities are going to have to balance their budgets, which could mean a cut in services.”

Author Greg LeRoy expresses a more critical perspective in his book The Great American Jobs Scam: Corporate Tax Dodging and the Myth of Job Creation (1995, Berrett-Koehler), amassing evidence from economic studies and CEO surveys that corporate tax breaks, even those tied to new job creation, have almost no effect on private companies’ decisions about where to locate and whether to hire.

“How can companies get away with this? Because the system is rigged. Corporations have it down to a science. They have learned how to chant ‘jobs, jobs, jobs’ to win huge corporate tax breaks — and still do whatever they wanted all along,” LeRoy writes. “That’s the Great American Jobs Scam: an intentionally constructed system that enables corporations to exact huge taxpayer subsidies by promising quality jobs — and lets them fail to deliver. The other benefit often promised — higher tax revenues — often proves false as well.”

While proposing to forgo collecting millions of dollars in payroll taxes (the Controller’s Office is still working on a projected total for the tax cut package), the Mayor’s Office also wants to spur development of new housing with a proposal that would delay collection of needed affordable housing money by more than a decade.

After hearing mostly from a large crowd of desperate developers and construction workers during a Jan. 21 hearing on the proposal, the Planning Commission approved the package on a 4-3 vote, with the mayor’s appointees in agreement and the board’s appointees in dissent. It will be considered by the Board of Supervisors Land Use Committee sometime after Feb. 12.

The most controversial part of the fee reform package involves reducing the fee developers pay to support affordable housing by 33 percent, then charging a 1 percent transfer tax to subsequent buyers of those homes. Egan estimates developers would save almost $20,000 per housing unit, and that it would take an average of 16 years for the city to recover that money. But for high-rise luxury condos, the city would eventually recover about $27,000 per unit.

“It’s a classic make-an-investment-now-to-get-more-later strategy,” Michael Yarne, who crafted the policy for the Mayor’s Office of Economic and Workforce Development at Newsom’s direction, told the Guardian.

“If it makes it feasible for projects to be started, then it is worth passing,” Tim Colen, a representative of San Francisco Housing Action, said at the Planning Commission hearing, expressing hope that it will help create desperately needed construction jobs and new market rate housing.

But affordable housing advocates and some progressives criticize the policy as completely backward, saying that affordable housing development is desperately needed now, during these tough economic times, rather than a policy that encourages more market rate housing and bails out bad investments made at the height of the real estate bubble.

“What the city needs to do is directly build affordable housing, for which there is a demand,” affordable housing activist Calvin Welch told us. “The problem is that the banks don’t want to lend these guys money because they know nobody can afford to buy houses at the prices that these guys are demanding.”

Debra Walker, who is running for supervisor from District 6 and voted against the proposal when it came before the Building Inspection Commission (the sole vote on a commission dominated by mayoral appointees), agrees.

“The whole argument is that it stimulates development, but it doesn’t,” Walker said, arguing that the incremental gains (about 25 housing units per year, Egan estimates) will be offset by delayed affordable housing construction. “There would be more economic stimulus by using the fee to build more affordable housing.”

Instead, it simply shifts resources to favored entities: from home owners to developers, in the case of the affordable housing fees, or in the case of the tax credits, from the public to the private sector. But Newsom’s office just doesn’t see it that way.

“The Guardian believes in protecting public sector employees over private sector employees,” was how Winnicker formulated our understanding of what the economists are saying. “Most people don’t work for the city, and if we can support private sector jobs, that adds to sales tax revenues and benefits the economy. Despite a short-term impact of the tax credit, that’s a benefit.”

Adam Lesser contributed to this report

 

Biotech’s bonanza

Jesse Hawthorne Ficks
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Biotech’s bonanza

By Adam Lesser

news@sfbg.com

It’s difficult to measure the value a biotechnology company receives from locating in San Francisco. Most measures are qualitative: scientists talk about synergy with other biotech companies in the area, the intellectual community that thrives at the University of California-San Francisco, and support offered at the California Institute for Quantitative Biosciences (QB3).

But the quantitative costs are easier to calculate, beginning with rents that often are two to three times higher than in the East Bay or South Bay. Add San Francisco’s 1.5 percent payroll tax, and companies can begin to attach a dollar figure to the premium of being in San Francisco.

To incentivize biotech companies to locate in San Francisco, Mayor Gavin Newsom is asking the Board of Supervisors to extend the six-year-old Biotech Payroll Tax Exemption. The exemption allows any new biotech company to get a full 7.5 years without paying local business taxes as long as it files for the exemption by Dec. 31, 2014.

At a time when San Francisco city officials are struggling to close a budget deficit of more than $500 million — for which Newsom hasn’t offered any significant revenue proposals to help bridge the gap — some are questioning why the city should continue giving millions of dollars in tax breaks to the thriving biotech industry.

The core question of whether the payroll tax credit has worked in bringing more biotech companies to San Francisco is complex. While Newsom boasted of attracting 54 new biotech companies in the last five years during his Jan. 13 State of the City address, analysis of the credit by Ted Egan, the city’s chief economist, indicated that only eight companies had applied for the credit by the end of 2008.

The thriving research environment at UCSF-Mission Bay and the establishment of the state taxpayer-funded California Institute for Regenerative Medicine have played significant roles in creating a favorable environment for young biotech companies. The last five years also have seen broad growth in biotech as scientific discoveries have accelerated. Would biotech companies have come to San Francisco regardless of the payroll tax exemption?

The city’s Office of Economic Analysis looked at the question of how effective the payroll tax exclusion actually has been in spurring biotech growth. Because the size of the incentive — an exemption from paying a 1.5 percent tax on its total payroll — is relatively small, Egan felt that there could not be a conclusive link between the exemption and biotech growth. But he did feel there was some benefit, writing in his analysis that “in fact, the primary worth of the incentive may lie in its marketing value and how it signals to the industry that San Francisco is a credible location for biotechnology.”

Between 2004 and 2008, the biotech tax credit cost the city $1.2 million. If costs stay on pace with 2008, the existing Biotechnology Tax Exclusion will cost at least an additional $2 million. There are no cost estimates yet on extending the credit to give all biotech companies the full 7.5 years of payroll tax exclusion.

The extension faces opposition. Sup. John Avalos, chair of the Board of Supervisors Budget and Finance Committee, has expressed concern about the effectiveness of tax credits.

“I’m not sure the city is going to be able to show a direct connection between taxes and the growth of the biotech industry. The verdict is still out for me,” Avalos told the Guardian. “We’ve created the whole infrastructure for the industry around Mission Bay. That could have a lot to do with companies coming to San Francisco.” The city donated a portion of the land the UCSF-Mission Bay campus was built on.

Allopartis Biotechnologies is a small biotech startup in QB3 at UCSF-Mission Bay that has received venture capital funding. It saved $3,670 in 2009 by qualifying for the payroll exclusion. Allopartis has six employees and focuses on developing technologies to convert biomass into sustainable fuels.

“You pay a premium to be in the city, and it’s worth it,” said Robert Blazej, cofounder of Allopartis. “We’d like to stay close to this nexus of innovation and collaborators. But it’s going to be challenging with the cost of square footage.”

Interviews with other growing San Francisco businesses showed that their biggest concern was the cost and availability of commercial real estate. Zynga, a social gaming company in Potrero Hill, plans to add 800 jobs over the next two years. Newsom has asked for an additional waiver on payroll taxes for all new hires over the next two years, regardless of industry.

“We considered moving out of San Francisco for a couple reasons. One is the availability of commercial real estate. The other is the payroll tax,” said Chief Financial Officer Mark Vranesh. “The large blocks of space we would be looking for are hard to find.”

But as the city tries to plug gaps in dwindling city services, concerns are mounting about how much the city can give away to companies under the premise that tax credits create new jobs. In the debate about the biotech tax credit, objections have been raised about the fundamental fairness of giving a tax break to one industry while others still pay their share. Similar next generation industries with large up-front research and development costs such as solar energy or fiberoptic Internet do not receive payroll tax waivers.

Economists such as the Tax Foundation’s Patrick Fleenor are quick to point out that there are no political advantages to taxing everyone equally. “The problem is a political one. If you tax everyone the same, there aren’t politicians creating little fiefdoms. There aren’t ribbon-cutting ceremonies,” he said.

Avalos has equated judging the effectiveness of tax credits at creating jobs to looking into a crystal ball. But the price tag of each tax credit is borne in the present as the city contemplates laying off hundreds of city workers.

Adding to the political infighting have been public complaints by Sup. Michela Alioto-Pier that Newsom is trying to take credit for the biotech payroll exclusion, which she originally proposed and helped legislate in 2004. She requested an extension for the biotech tax credit in November. Her office has defended the bill. “We’re creating a hub so that other biotech companies can come to San Francisco,” said Bill Barnes, Alioto-Pier’s legislative aide. “When she was courting biotech, she was hearing that the payroll tax was an impediment.”

But other cities charge local business taxes comparable to San Francisco’s payroll tax. And if there was ever an industry that has been heaped with support from the public sector, it is biotech.

Proposition 71 passed with 59 percent voter support in 2004 and established the CIRM, which provides grants and loans for stem cell research. Stem cell research is an area within biotech that has seen significant political support, particularly since the time of the Bush administration, when federal funding for embryonic stem cell research was heavily restricted.

But appearing to be doing something about the economy remains politically important, even if the actual benefits are somewhat dubious.

“It’s a big political game that the mayor is playing. He wants to paint progressives as anti-jobs, which is ridiculous, and paint himself as the mayor for jobs,” Avalos told us. “We would be cannibalizing government services for the private sector.”

Newsom has been vague about whether he accepts that tradeoff or even understands its implications to city coffers and the local economy. Newsom Press Secretary Tony Winnicker recently told us, “He thinks it’s good policy to spur private sector job growth.”

Later, he added: “While not every company has taken advantage of it, we feel extending it sends the right message,”

Editor’s Notes

David Talbot
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Editor’s Notes

tredmond@sfbg.com

Progressives don’t have to be afraid of economic development, don’t have to be afraid of promoting business and creating private-sector employment. And we don’t have to be terrified of a mayor who wants to label anyone who opposes Reagan-era economic policies as anti-jobs.

The thing is, San Francisco needs to promote the biggest engine of new employment — small business — and needs to encourage entrepreneurship and innovation. But there’s enough good economic science out there, enough evidence of what works and what doesn’t, that we don’t have to be stupid.

The most obvious example of that is tax cuts. We talk about the mayor’s tax plans this week — and what’s most remarkable is the consensus among economists, even the city’s own economist, that what Newsom is proposing won’t work.

If cutting specific taxes for certain businesses — say, waiving the 1.5 percent payroll tax for biotech — would actually lead local companies to hire hundreds of new people, it might be worth the budget pain. But that’s not going to happen. If allowing developers to pay their affordable housing fees years down the road would put thousands of construction workers back on the job, you could make the case for it — but nobody with any sense really thinks that’s likely.

What do we know would create employment opportunities? Well, a giant affordable housing bond, hundreds of millions in city money going to build new apartments, would generate construction jobs. But what most small businesses really need, what would really encourage hiring, is credit. If San Francisco took the money it’s going to expend (and tax cuts are an expense; let’s be honest) and put all of it into a revolving microloan fund for community businesses, we’d get a lot more jobs. In fact, almost any way that San Francisco spends that money on direct services would create more jobs than these tax cuts.

That’s not politics or ideology or anything else. It’s just reality.

Newsom’s perplexing attack on San Francisco’s economy

Sasha Cuttler
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Newsom’s perplexing attack on San Francisco’s economy

There’s a crazy disconnect in City Hall these days over how to help the local economy. Mayor Gavin Newsom has spent much of the last month focusing on “jobs” and “local economic stimulus,” proposing to give a few million dollars in tax breaks to local companies while refusing to discuss new tax measures to help close the city’s $522 million budget deficit.

As we explain in detail in tomorrow’s Guardian, economists just don’t think the tax cuts will help the economy much at all – particularly if the city is reducing its spending and payroll to do so — but even some progressive supervisors are playing along to appease the anxious business community. For example, Board of Supervisors President David Chiu supports an extension of the biotech tax, denying city coffers the benefit of efforts by the city and UCSF to become an important hub for the industry.

Then, in today’s Chronicle, Newsom floats the idea of unilaterally shortening the workweek for city employees in order to save $50 million in payroll costs, firing 10,000 workers and then rehiring most of them to do so. But let’s be clear about this: that means removing $50 million from San Francisco’s economy, or even more once you figure in the multiplier effect that would more than double that loss.

As much as Newsom and his Chamber of Commerce allies love to bash government, the city is one of San Francisco’s largest employers, a clean industry with good-paying jobs. And it just makes no sense why they prefer to inflict mass layoffs on that employer – not to mention the reduced city services that will hurt even private sector productivity — rather than increase taxes on large corporations that ship their profits out of the city and therefore offer minimal benefits to this city’s economy.   

 

Dick Meister: Combating workplace violence

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Organized labor and its allies are rightly alarmed over the high incidence of on-the-job accidents that have killed or maimed many thousands of workers. But they haven’t forgotten – nor should we forget – the on-the-job violence that also afflicts many thousands.

Consider this: Every year, almost two million American men and women are the victims of violent crime at their workplaces. That often forces the victims to stay off work for a week or more and costs their employers more than $60 billion a year in lost productivity.

The crimes are the tenth leading cause of all workplace injuries. They range from murder to verbal or written abuse and threatening behavior and harassment, including bullying by employers and supervisors.

Women have been particularly victimized. At least 30,000 a year are raped or otherwise sexually assaulted while on the job. The actual total is undoubtedly much higher, since it’s estimated that only about one-fourth of such crimes are reported to the police.

Estimates are that more than 900,000 of all on-the-job crimes go unreported yearly, including a large percentage of what’s thought to be some 13,000 cases annually that involve boyfriends or husbands attacking women at their workplaces.

The Retail, Wholesale & Department Store Union (RWDSU), which represents many of the victimized workers, cites that as an example of the job violence problem that is often distorted by media coverage that “would lead us to believe that most workplace violence involves worker against worker situations.”

The union says that has focused many employers “on identifying troubled employees or disgruntled workers who might turn into violent predators at a moment’s notice. But in fact, 62 percent of all violence at worksites is caused by outsiders.”

As you might expect, those most vulnerable to the violence are workers who exchange money with the public, deliver passengers, goods or services, work alone or in small groups during late night or early morning hours in high-crime areas or wherever they have extensive contact with the public.

That includes police, security guards, water meter readers and other utility workers, telephone and cable TV installers, letter carriers, taxi drivers, flight attendants, probation officers and teachers. Convenience store clerks and other retail workers account for fully one-fifth of the victims.

The American Federation of Teachers is so concerned that it has provided each of its 1.4 million members a $100,000 life insurance policy payable if the teacher dies as the result of workplace violence.

The major violence victims also include health care and social service workers such as visiting nurses, and employees of nursing homes, psychiatric facilities and prisons. They suffer two-thirds of all physical assaults. Many of the victims regularly deal with volatile, abusive and dangerous clients, often alone because of the understaffing that’s become all too common.

It could get even worse, at least for some workers. The RWDSU warns that today’s troubled economic times create additional threats. The danger is especially great for retail workers whose stores are likely to face increased incidents of theft, some involving gun-wielding robbers.

The RWDSU and other unions have been pushing for recognition of workplace violence as an occupational as well as criminal justice issue. That would put it under the purview of the federal Occupational Safety and Health Administration (OSHA) and state job safety agencies.

The federal and state agencies could then issue enforceable regulations designed to lessen the on-the-job dangers of violence, as they do for other hazardous working conditions. A few states do that already, but only for a very limited number of industries.

OSHA has issued guidelines for workers in late-night retail jobs, cab drivers and some healthcare workers, but the guidelines are strictly voluntary. Although the unions’ top priority is for legally binding regulations, they also are pressing employers to meanwhile voluntarily implement violence prevention programs.

Currently, only about one-fourth of them have such programs or any guidelines at all. The RWDSU ‘s Health and Safety Department is offering to help the other employers develop programs.

We have federal and state standards, laws and regulations designed to protect working Americans from many of the serious on-the-job hazards they face daily. Yet we have generally failed to lay down firm guidelines for protecting workers from the workplace violence that’s one of the most dangerous hazards of all.

Dick Meister, former labor editor of the SF Chronicle and KQED-TV Newsroom, has covered labor and politics for a half-century. Contact him through his website, www.dickmeister.com, which includes more than 250 of his recent columns.

Joseph Stiglitz: Muddling Out of Freefall

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Joseph Stiglitz: Muddling Out of Freefall

Here is our monthly installment of Joseph E. Stiglitz’s Unconventional Economic Wisdom column from the Project Syndicate news series. Stiglitz is University Professor at Columbia University and the winner of the 2001 Nobel Prize in economics. His new book is Freefall.

NEW YORK – Defeat in the Massachusetts senatorial election has deprived America’s Democrats of the 60 votes needed to pass health-care reform and other legislation, and it has changed American politics – at least for the moment. But what does that vote say about American voters and the economy?

It does not herald a shift to the right, as some pundits suggest. Rather, the message it sends is the same as that sent by voters to President Bill Clinton 17 years ago: “It’s the economy, stupid!” and “Jobs, jobs, jobs.” Indeed, on the other side of the United States from Massachusetts, voters in Oregon passed a referendum supporting a tax increase.

The US economy is in a mess – even if growth has resumed, and bankers are once again receiving huge bonuses. More than one out of six Americans who would like a full-time job cannot get one; and 40% of the unemployed have been out of a job for more than six months.

As Europe learned long ago, hardship increases with the length of unemployment, as job skills and prospects deteriorate and savings gets wiped out. The 2.5-3.5 million foreclosures expected this year will exceed those of 2009, and the year began with what is expected to be the first of many large commercial real-estate bankruptcies. Even the Congressional Budget Office is predicting that it will be the middle of the decade before unemployment returns to more normal levels, as America experiences its own version of “Japanese malaise.” 

As I wrote in my new book Freefall, President Barack Obama took a big gamble at the start of his administration. Instead of the marked change that his campaign had promised, he kept many of the same officials and maintained the same “trickle down” strategy to confront the financial crisis. Providing enough money to the banks was, his team seemed to say, the best way to help ordinary homeowners and workers.

When America reformed its welfare programs for the poor under Clinton, it put conditions on recipients: they had to look for a job or enroll in training programs. But when the banks received welfare benefits, no conditions were imposed on them. Had Obama’s attempt at muddling through worked, it would have avoided some big philosophical battles. But it didn’t work, and it has been a long time since popular antipathy to banks has been so great.

Obama wanted to bridge the divides among Americans that George W. Bush had opened. But now those divides are wider. His attempts to please everyone, so evident in the last few weeks, are likely to mollify no one.

Deficit hawks – especially among the bankers who laid low during the government bailout of their institutions, but who have now come back with a vengeance – use worries about the growing deficit to justify cutbacks in spending. But these views on how to run the economy are no better than the bankers’ approach to running their own institutions.

Cutting spending now will weaken the economy. So long as spending goes to investments yielding a modest return of 6%, the long-term debt will be reduced, even as the short-term deficit increases, owing to the higher tax revenues generated by the larger output in the short run and the more rapid growth in the long run.

Trying to “square the circle” between the need to stimulate the economy and please the deficit hawks, Obama has proposed deficit reductions that, while alienating liberal democrats, were too small to please the hawks. Other gestures to help struggling middle-class Americans may show where his heart is, but are too small to make a meaningful difference.

Three things can make a difference: a second stimulus, stemming the tide of housing foreclosures by addressing the roughly 25% of mortgages that are worth more than the value the house, and reshaping our financial system to rein in the banks.

There was a moment a year ago when Obama, with his enormous political capital, might have been able to achieve this ambitious agenda, and, building on these successes, go on to deal with America’s other problems. But anger about the bailout, confusion between the bailout (which didn’t restart lending, as it was supposed to do) and the stimulus (which did what it was supposed to do, but was too small), and disappointment about mounting job losses, has vastly circumscribed his room for maneuver.

Indeed, there is even skepticism about whether Obama will be able to push through his welcome and long overdue efforts to curtail the too-big-to-fail banks and their reckless risk-taking. And, without that, more likely than not, the economy will face another crisis in the not-too-distant future.

Most Americans, however, are focused on today’s downturn, not tomorrow’s. Growth over the next two years is expected to be so anemic that it will barely be able to create enough jobs for new entrants to the labor force, let alone to return unemployment to an acceptable level.

Unfettered markets may have caused this calamity, and markets by themselves won’t get us out, at least any time soon. Government action is needed, and that will require effective and forceful political leadership.

Joseph E. Stiglitz, winner of the 2001 Nobel Prize in economics, served as Chairman of the Council of Economic Advisers from 1995 to 1997. He is the author of the recently published bestseller, Freefall: America, Free Markets, and the Sinking of the World Economy.

Copyright: Project Syndicate, 2010.
www.project-syndicate.org
For a podcast of this commentary in English, please use this link: http://media.blubrry.com/ps/media.libsyn.com/media/ps/stiglitz122.mp3

 

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Who wants to be a biotech tax idiot?

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By Tim Redmond

So Sup. Michela Alioto-Pier wants credit for the really dumb idea of extending the payroll tax waiver for biotech companies.

I guess she’d rather look like an idiot than let Newsom grab that dubious spotlight. Because as I pointed out in a column this week, the biotech tax break won’t create a single private-sector job in San Francisco, not one — and because it will reduce the city’s revenue, it will lead to more service cuts, which means more public sector jobs lost.

So the net impact of this plan is fewer jobs in the city. You want to be the one whose name is on that, Michela? Go for it.

The importance of being earnest

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The importance of being earnest

FILM Say what you will about films adapted from Nicholas Sparks novels: there’s no denying they attract some genuine talent. Channing Tatum and Amanda Seyfried know that many will dismiss Dear John as a “chick flick,” but both believe there’s more to the movie than that. “It’s not just Channing Tatum without a shirt on,” Seyfried insisted during a recent visit to San Francisco with her costar. “It’s a real movie. It has a real message. It has a really good theme. I think everybody’s going to leave feeling a little inspired.”

And while Tatum admitted it’s likely not the kind of film he’d go out and see with his group of male friends, he maintains that the story will appeal to a wider audience than just young girls. “It’s the ultimate date movie,” he said. “I really do think people will go and like it for that.”

Talking to Tatum and Seyfried, it’s clear that these are two actors committed to their work. With their careers on the rise, they’re receiving plenty of offers. That’s why both express the importance of playing characters they can connect with. For Seyfried, the role of Savannah in Dear John was one she’d been waiting for. “When this script came about, I thought, ‘Wow, how amazing would it be to play a romantic lead.’ That’s like my dream,” she explained. “I wanted to be Claire Danes in Romeo + Juliet (1996) when I was 12. This is finally my chance to inspire other young girls to be in love.”

Tatum plays John Tyree, the third soldier he’s taken on after roles in Stop-Loss (2008) and G.I. Joe (2009). He’s had a lifelong “fascination with the military and what it takes to be a soldier.” But his interest in Dear John reflected the film’s treatment of its soldier character, which focuses more on his relationships than on wartime violence or politics. “We try to take a lot of the war and soldiering out of it,” he said. “Any time we could take John out of a uniform or not show him in a military atmosphere, we did.”

But while Dear John‘s leads enjoyed their experience filming the movie, don’t expect to see the pair doing the same thing next time. They’re looking for variety: eclectic roles that will surprise audiences. “We all want to be challenged in our jobs,” Seyfried said. “It’s more satisfying at the end of the day when you’re connecting with somebody you don’t know.”

DEAR JOHN opens Fri/5 in Bay Area theaters.

Editor’s Notes

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Editor’s Notes

The mayor of San Francisco is mad that the Board of Supervisors won’t even schedule a hearing on his proposals to stimulate business and job creation in San Francisco. He ought to be happy. If this loopy plan ever gets to the point of open, full discussion, Gavin Newsom will wind up with a real political embarrassment.

Let’s analyze, for example, the suggestion that the city waive payroll taxes for biotech companies. That’s supposed to make those companies more likely to hire new people. After all, any economist knows that taxing something discourages people from doing it, so taxing a payroll ought to make companies less likely to hire. And getting rid of that tax ought to create jobs.

Well, since one of the things I do is help run a small business in San Francisco, let me explain how it actually works.

Say you’re a biotech company that wants to hire a new entry-level worker at a modest $35,000 a year. Can you afford it? Let’s cost it out.

There’s the salary, of course. Then there’s the 7.5 percent you’re paying in federal Social Security tax. That’s $2,626 more. And since you’re in San Francisco, you’re paying for health insurance; that’s probably between $2,000 and $4,000 a year, depending on the plan, but let’s peg it at the city’s minimum mandate, which is $1.09 an hour, or $2,267.

So now your $35,000 worker costs $39,893. Then there’s unemployment and disability insurance and workers’ compensation. The person’s going to need a desk and a chair, or a lab bench and a stool (and they have to be ergonomically correct), and probably a computer, a phone line, and software. And you’re going to have to spend some money on training. You’re going to offer a couple weeks of paid vacation, right? And you have to give sick days. So you have to account for the money you’re spending to cover your new worker when he or she isn’t working. If it all pencils out at less than $42,000, you’re doing well.

Oh, wait, I forgot — there’s the damn city payroll tax. That job-killing factor that could make the difference between hiring and not hiring. Better account for that; it could be a deal breaker.

Are you holding your breath? Ready for the ax to fall? Here you go: the payroll tax on your new hire is a whopping $525 a year. About $10 a week. You probably spent more on the help wanted ads.

So let’s be honest — the payroll tax may sound awful (and actually, I think a gross receipts tax would be more fair, for a lot of reasons). But suspending it won’t create a single new job. It’s too small a factor to count as more than decimal dust in anyone’s hiring decisions.

Here’s what suspending the payroll tax for biotech companies will do: reduce city revenue, almost certainly by enough to force more program cuts, and that means more job cuts for city workers. So you gain no private sector jobs — zero — and you lose public sector jobs. How, exactly, is that encouraging employment growth?

Quit complaining, Mr. Mayor — the last thing your proposals need is real public scrutiny.

Meister: Obama’s promise to women

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It’s time to enact the Paycheck Fairness Act that would allow women to negotiate with employers for equal pay with men

By Dick Meister

(Dick Meister, former labor editor of the SF Chronicle and KQED-TV Newsroom, has covered labor and politics for a half-century.)

One of the most important promises made by President Obama in his State of the Union address has been largely overlooked – his promise to “crack down on violations of equal pay laws, so that women get equal pay for an equal day’s work.”

The need for that is great. Despite the 47-year-old law that promises women equal pay, their earnings remain well below men’s pay. They average only 77 cents for every dollar earned by men, even though their work is obviously every bit as valuable to employers and society at large as the work of men.

The pay discrepancy is even greater for women of color. African American women earn 63 cents and Latinas 52 cents for every dollar earned by men.

It’s estimated that if women were granted equal pay, they could earn as much as $2 million more over the whole of their working lives. It’s also estimated that if women were paid equally, the number of families living in poverty could be reduced by as much as half. Women’s earnings are needed by most families, and in many cases, women are their family’s only breadwinner.

Even women doing the same work as men, or work that’s as valuable to employers as that of their male counterparts, almost always are paid less. It’s as bad for women in the professions as for others. Female nurses, for instance, physicians and surgeons, professors, school teachers and lawyers earn as much as 30 percent less than men in their fields.

President Obama already has signed a bill that should help narrow the male-female pay gap. It was, in fact, the very first bill he signed after taking office – the Lilly Ledbetter Fair Pay Restoration Act. It’s named for a retired tire plant supervisor in Alabama who discovered after nearly 20 years on the job that she was being paid less than male supervisors.

Ms. Ledbetter sued for discrimination under the 1964 Civil Rights Act. But the Supreme Court ruled in 2007 that the law requires workers to sue no later than 180 days after their discriminatory pay rate was set – even if, like Ms. Ledbetter, they don’t discover the pay discrimination until years later. As the result of the decision, hundreds of pay discrimination cases were thrown out of court.

Shortly after the Supreme Court acted, the House passed a bill that would have overturned the court’s outrageous decision. But Senate Republicans, claiming the bill would lead to a flood of unfounded suits against employers, blocked a vote, and President Bush vowed to veto the bill if it ever crossed his desk.

The bill that finally reached Obama’s desk for signing provides that the 180-day time limit for filing lawsuits under the Civil Rights Act doesn’t begin to run until the last discriminatory act by an employer.

What’s most needed now is enactment of the Paycheck Fairness Act that’s been pending for a dozen years. The bill made it through the House last year, but was blocked by Senate Republicans. Obama, who voted for the bill as a senator, is certain to sign the new bill – if it’s not kept from him by a Republican filibuster in the Senate.

The Fairness Act would close loopholes in the 1963 Equal Pay Act that have made it relatively easy for employers to pay women less than their male co-workers holding the same jobs. The law would empower women to negotiate with employers for equal pay; prohibit retaliation against workers who share salary information with co-workers; strengthen government outreach, education and enforcement, and generally make the law much stronger.

There ‘s no doubting President Obama’s firm support for the act. As he’s said, “We won ‘t truly have an economy that puts the needs of the middle class first until we ensure that when it comes to pay and benefits at work, women are treated like the equal partners they are.”

Dick Meister, former labor editor of the SF Chronicle and KQED-TV Newsroom, has covered labor and politics for a half-century. Contact him through his website, www.dickmeister.com

Scraping bottom

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Scraping bottom

The job of scrubbing down a city bus after it’s gone out of service is no picnic. At a Jan. 20 Budget and Finance Committee hearing called by Sup. Chris Daly to discuss health and safety impacts related to Municipal Transportation Agency layoffs, supervisors took a virtual tour of a Muni bus that was trashed on multiple levels: tagged inside and out, soiled with vomit, and strewn with garbage. Among the roughly 100 Muni workers who will lose their jobs to midyear budget cuts are 10 “car cleaners” — those unsung heroes who scrub away late into the night, tackling the residue left behind by the Sharpie-wielding, litterbug masses.

“We do send out all of our vehicles clean,” MTA spokesperson Judson True told the Budget and Finance Committee members at the hearing. “We do not send out any of our vehicles with any health issues … and we will not.” Despite his assurances, members of the Board of Supervisors and some Muni staffers voiced fears that with fewer and more overworked car cleaners, the overall experience of riding public transit could suffer.

It’s just one small example of on-the-ground impacts of painful budget cuts inflicted to solve a steep shortfall affecting the city’s transit agency. The fiscal woes aren’t unique to Muni. In coming months, San Francisco city departments across the board will have to contend with revenue shortfalls and find ways to continue providing services with diminished resources.

But with layoffs and other proposals such as raising fares, reducing service, and charging more for discount passes on the table, many are raising objections — including several members of the MTA Board of Directors, a body that is wholly appointed by Mayor Gavin Newsom. In a rare show of defiance at a Jan. 19 MTA Board meeting, several directors even resuscitated the idea of extending parking-meter hours and raising meter fees to generate new transit revenue, an idea Newsom previously rejected.

$49 MILLION IN THE RED

Muni has lost $180 million in state funding over the last three years due to “the nightmare in Sacramento,” as True put it, and no one seems to believe the fiscal crisis can be resolved without some degree of pain.

At the Jan. 19 MTA Board meeting, transit agency Chief Financial Officer Sonali Bose outlined the dismal financial picture, explaining that Muni has been hit hard by declining parking and taxi fees and impacts to the city’s general fund, leaving it about $49 million in the hole for the current budget cycle. After the layoffs, Muni will still face a $17 million problem. To solve it, suggestions include jacking up the historic F Line trolley fare from $3 to $5, charging $30 for discount monthly passes for seniors and passengers with disabilities, and reducing service.

Even against the gloomy fiscal backdrop, the prospect of eliminating jobs to make up for the losses drew serious concerns from MTA directors. “Once somebody’s gone, they’re gone,” Director Shirley Breyer Black noted. “I think moving forward with cuts in these classifications will send us into deeper fiscal crisis.”

All the affected workers — most of them frontline employees — are slated to lose their jobs by May 1, and around one-third of them were dismissed Jan. 22.

Muni Executive Director and CEO Nathaniel Ford emphasized that the decision to cut jobs was not made lightly. But at a Budget and Finance Committee meeting the following day, progressive members of the Board of Supervisors expressed alarm after hearing union members sound off about how the cuts disproportionately affect lower-paid classifications. The majority of layoffs target members of Service Employees International Union Local 1021, San Francisco’s largest labor union, which represents frontline workers across city departments.

“I understand that there are no good decisions,” Daly told the Guardian, adding that a certain group of workers seem to bearing the brunt of the cuts. “What progressive supervisors are calling for is for the budget to be handled more evenly,” he said.

A single Municipal Executives’ Association (MEA) employee — an MTA manager earning between $105,950 and $135,200 per year — was let go during this latest round of about 100 Muni layoffs, according to an agency memo. In the past year, MTA reduced its upper-level management team from 108 to 96 employees. In contrast, 33 members of SEIU Local 1021 — the majority frontline workers earning between $45,656 and $64,272 a year — will be affected by the cuts.

“Unfortunately, when MTA discovered that they had a budget problem, they didn’t bring all parties to the table,” SEIU Organizer Leah Berlanga testified at the Budget and Finance Committee hearing. “The way we got invited was via pink slips. That’s the only time they will talk to people who do direct services.”

When asked whether Muni had assessed mid- and upper-management level jobs to even the scales, True responded that a few mid-level managers were included in the latest round of cuts. One reason the layoffs seem disproportionate, he added, is that there are so many more frontline workers than others. “The budget picture has affected the entire agency,” he said. “No one is happy about these decisions.”

But SEIU Local 1021 characterized the layoffs as misguided, and attempted to identify waste and mismanagement within the agency in a packet of alternative cost-saving measures it submitted to MTA. At the top of the list was the suggestion that the agency eliminate 35 retired Muni employees, who are allowed to work up to 960 hours per year and earn wages in addition to their pensions. And according to the union, there are 21 temporary workers in the agency who’ve exceeded a two-year limit for short-term employment. SEIU recommended that those temps be dismissed too.

SEIU also criticized the decision to lay off 24 parking control officers (PCOs) — uniformed workers who have the unenviable job of issuing parking citations to bring in revenue for the city. “To me, if you do the simple math, it doesn’t make any sense. They make most of the money for the MTA,” said a PCO who testified at the hearing.

According to SEIU’s calculations, eliminating 24 employees who dole out parking tickets could result in a $7.2 million loss for the city in parking revenue. But True said MTA disagrees with this figure, and pointed to an internal memo showing how revenue from parking citations dropped in recent years even as more PCOs were hired. Nonetheless, at the urging of SEIU, the MTA Board agreed to postpone those 24 layoffs until February to buy time to study the impact. For other positions, negotiations between MTA and the union are ongoing. The details on still more layoffs, which will affect transit operators, is yet to come.

Sup. David Campos is asking for a management audit to see if Muni is spending its money efficiently. “I think we should look at best practices and how we’re operating before we finalize any cuts,” he said.

THE PARKING POLITICS

During a round of MTA budget talks last fall, the idea of extending city parking meter hours and raising meter fees was floated as a means of recouping losses — but Newsom balked at the idea, saying higher parking fees could harm small businesses. Now MTA Director Bruce Oka has revived — and endorsed — the concept.

“I can hold my nose and vote on anything, but I refuse to vote on something when I believe we have not looked under a rock for every source of funding,” Oka said at the meeting. “We have to extend the parking meter hours — we have to find dollars. If Room 200 [i.e. Newsom] doesn’t want that to happen, well then … he’s got to come up with a way to do what we need to do. If he’s not going to raise parking meters or extend parking meter time, he’s got to come up with some money.”

Tom Radulovich, executive director of nonprofit Livable City and one of the individuals who helped to create MTA in 1999, summed up Oka’s comments with a note of surprise: “He really called out the mayor,” he said. “I haven’t seen MTA Board members do that — they usually cover for him.”

Radulovich — who is also on the BART Board — says targeting motorists for more revenue instead of transit riders would be more equitable, sustainable, and in keeping with the city’s Transit First goals in the long run. Proposition A, passed November 2007, established “a strong mandate to reduce transportation-related greenhouse gas emissions,” he pointed out. But, he noted, with layoffs that could affect the qualify of service and possibly deter people from riding, “We don’t see how MTA is going to get to those voter-mandated transit goals.” *

MUNI MEETINGS

PUBLIC MEETINGS ON SFMTA BUDGET

Saturday, Feb. 6, 10 a.m. to noon

Tuesday, Feb. 9, 6 p.m. to 8 p.m.

Saturday, Feb. 20, 10 a.m. to noon

One South Van Ness Ave. at Market Street, 2nd Floor Atrium

SFMTA BOARD MEETINGS

Friday, Jan. 29, 10 a.m.; discussion of FY10 options, including Muni service reductions

Tuesday, Feb. 16, 11 a.m.; public hearing on proposed FY10 budget actions

Tuesday, Mar. 2, 2 p.m.; public hearing and possible board approval of FY10 budget actions

Location: City Hall, 1 Dr. Carlton B. Goodlett Place, Room 400

Editor’s Notes

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Editor’s Notes

When Ronald Reagan took office as president in 1981, Democrats controlled the House of Representatives and the Republicans only had a narrow majority in the Senate. Yet Reagan was able to undertake a series of profound, far-reaching and radical policy changes that transformed the United States. He cut taxes on the rich, deregulated industries, drove up the military budget (and the deficit) and reshaped the Supreme Court — all without seeking bipartisan unity or offering major concessions to the Democrats.

That, I think, is why so many people are so mad at the Obama administration — and why we shouldn’t panic about the loss of a Senate seat in Massachusetts. Yeah, it’s terrible (and historic) to lose Ted Kennedy’s seat to a weak and lame Republican. And it’s alarming to think the Democrats could lose several more Senate seats this fall.

But that shouldn’t either stop Obama from pushing a legislative agenda or terrify the Democrats into paralysis.

Look, the Democrats still control Washington. The Republicans still have no ideas of their own, and are doing nothing but obstructing progress so the Obama administration will fail. And nobody seems to be calling them on it. The Democrats were a lot more vocal (and acted a lot more like Democrats) when Bush was in office.

I can’t get too agitated about the loss of a 60-vote majority in the Senate; the Democrats never really had that anyway. One of the 60 was Joe Lieberman, who isn’t even a Democrat in name anymore and who held Obama hostage, demanded concessions and cave-ins for his vote on health care, and still couldn’t be trusted. Now there are 58 Democrats instead of 59; most Democratic presidents in the past century would have loved those numbers. So would most Republicans.

And let’s remember — the economy was almost as bad during Reagan’s first year as it is now, and it wasn’t showing any signs of getting better.

Reagan was a Hollywood-trained actor who’d been a pitchman for cigarette companies; he knew how to look into a camera and make an emotional case for his positions. Obama is by far the best speaker the Democrats have had in decades, and he has the natural ability to go beyond what Reagan did. He can go after the Republicans, make the case for legislative action, push the voters to push their senators and Congress members to approve his agenda, and turn this political funk around. But he’s got to give up the bipartisan rhetoric (been there, tried that), convince the millions of people who put their hopes in him that there’s still reason to believe, and stop looking at the Massachusetts vote as a rejection of progressive policies.

The mood in the country is anxious, restive, impatient, and displeased — not with the ideas Obama presented during his campaign, but with his failure to make them happen. He can still turn this around by talking about the economy, creating (public sector) jobs — now — and using the still-solid majorities in Congress.

Or he can get all defensive and change course. We know how well that’s going to work.

alt.sex.column: The old triangle

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By Andrea Nemerson. Email your questions to andrea@mail.altsexcolumn.com. Read more of Andrea’s columns here.

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Dear Andrea:

I seem to find myself being one-third of a long-term, stable threesome. Or is there no such thing?

I was dating “Jill,” who is bi but was only dating me. We decided to try a threesome just for fun and invited her friend “Jen.” It turned out not to be one-time thing. Jen came back, and came back again, and she and Jill started to fall in love, and so did we (Jen and me), and before you knew it, we had this thing that looks weird from the outside but feels very normal and even simple to us. Only a few close friends know, and we are worried about what parents and others would say if they knew. Jill and I were planning on getting married and having a kid, and we still want to, but now Jen would be part of our family too. And we’d like to get a house together, but wouldn’t people know then?

I know “one guy, two girls” sounds like a porno fantasy, but it isn’t like that really. We all have jobs and lives, and it’s not like we hang around the pool having crazy three-way sex all the time. But we do want to stay together. What do you think? Is such a thing possible?

Love,

Equilateral

Dear Equ:

Clearly so, since you are doing it. As for the future, who can tell?

 

An equilateral triangle is about as stable a shape as you can find, but even triangles suffer stresses. You are still in the two-honeysmoon phase and everyone is, I am sure, on his or her best behavior. This is certain not to last. Sooner or later someone will feel neglected or insufficiently supported and will not repress the urge to make that snappish comment, and somebody else will come back with a “Yeah? If you’re so ____ing _____ why don’t you ______instead of ______ing?” and somebody else will roll his or her eyes and somebody will yell at the eye-roller for eye-rolling. It is inevitable. And soothing three egos and salving three sets of hurt feelings is exponentially more complicated.

I would also not discount the lack of societal support for nontraditional unions as a source of yet more stress. I hesitate to draw a direct parallel to gay couples, but not having people beam at you when you announce your intentions and not having all the aunts tear up at the sight of the lovely bride (groom) and not having the chair dance and the “mazel tov and siman tov” can be a real loss. It isn’t all about the health insurance and the tax breaks or even about commitment — marriage is also about societal support and approval, and that support and approval does help solidify a union. As I said, not exactly the same thing, though. Your situation is worse.

What? No. I don’t disapprove. But other people will, so strenuously that you will feel obligated to keep it a secret. And while secrets can be sexy and sharing them can be bonding, living in hiding (or in a situation generally misunderstood or despised) is ultimately pretty destructive. Which is certainly no reason not to do it.

The complications of a multiple marriage (equivalent) go far beyond potential threats to peace on the home front like jealousy, possessiveness, and schedule difficulties. (Have you never watched Big Love? Even if you’re not planning on founding your own splinter sect, you might want to.) Spouses are family, but what are second spouses? What happens if Jen has a family emergency, is ill herself, or otherwise in need of immediate succor? Your boss understands “My wife’s mother died, I’ll be out this week.” She doesn’t give a damn about your wife’s girlfriend’s mother. What if Jen wants to have a baby too? The three of you may fall easily into a family pattern that works for you, with one mommy and one mama, or whatever — children never seem to find unusual arrangements the least bit troublesome, since they have no idea what “usual” is and what’s normal is what’s normal for them. Schools and soccer coaches and other authorities, however, will have Opinions.

In other, fewer words, sure, you can do this. Jill can do it. Jen can do it. But living a life that sounds like somebody else’s dirty joke is not going to be easy. If I’m sick of hearing “You’ve really got your hands full!” when I walk by with my twins — imagine how tired of it you’re going to get. You might want to get in practice now: “How do you figure out which one to do first?” sniggers the office wit when you let slip that you’re finding your home life complicated, “I wish I had your problems.”

“Dude,” you’ll sigh, as you attempt to side-step him to get to the copier, “You have noidea.” And he won’t.

Love,

Andrea

 

Who will fight corporate America?

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By Steven T. Jones
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This morning’s U.S. Supreme Court landmark decision overturning a 103-year-old law limiting corporate spending on elections is a huge setback for the people’s ability to counter the power of Wall Street and multi-national corporations, a development exacerbated by signals that the Democratic Party is retreating from even its nominally left-of-center initiatives in the wake of Tuesday’s loss of its Massachusetts seat in the U.S. Senate.

If this morning’s front page San Francisco Chronicle story is to be believed, Democratic congressional leaders are essentially abandoning health care reform and climate change legislation, shifting instead to focus on “creating jobs and cutting the enormous federal deficit.”

And if Mayor Gavin Newsom’s recent initiatives here are any indication, job creation is synonymous with corporate tax breaks, while deficit reduction probably means the elimination of even more government jobs, further enabling private sector excesses. Yes, the political climate in this country is turning as bleak and stormy as the California weather this week.

But at least downpours provide needed water. With progressive institutions from the anti-war movement to minor political parties at their weakest point in many years, it’s unclear who will unite and lead a public that is growing increasingly frustrated with this country’s political dysfunction and uneven economic recovery (that is, corporations are recovering but most people aren’t).

There are a few faint glimmers of hope. The Chron reports on an alliance between UC students and administrators to push for a reversal of deep cuts to education spending. And spending by labor unions was also unshackled by today’s court decision, which could be helpful if that movement wasn’t in such disarray right now and was willing and able to help lead a broad people’s movement.

But the question facing the country right now is this: who can effectively fight corporate America, and who is willing to do so?

Some Muni layoffs postponed for a month

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By Rebecca Bowe

Two dozen Muni parking control officers (PCOs) can hold onto their jobs for another month, the Municipal Transportation Agency Board decided Tuesday. The PCOs are those ever-popular uniformed workers who go around issuing parking citations (maybe you’ve seen the bumper-sticker slogan — “Good people, Tough jobs” — just after getting slammed with an outrageous parking ticket). A round of 24 PCO layoffs was previously scheduled to go into effect at the end of this week, as part of midyear cuts made to balance the city budget. But the MTA Board agreed to push the layoff date back to Feb. 26, according to Steve Stallone, a spokesperson for Service Employees International Union Local 1021, which represents the workers. MTA spokesperson Judson True confirmed that the layoffs were postponed.

The PCO layoffs represented a hot topic at last Tuesday’s Board of Supervisors meeting, when a long line of city employees formed during public comment to raise objections. Abraham Davis, a PCO, told supervisors that each officer issues an average of 30 citations a day, which he said brings in roughly $2,000 for the city. Accounting for all 24 workers, “that’s $960,000 a month,” he said, “and that’s a low average.” He described one of his own bad days: “That’s the day I got spit on, almost run over, and came back to the hall with 60 citations,” he said. “Do the math.”

Stallone says today’s MTA Board decision was made because SEIU Local 1021 presented new figures outlining why cutting city workers who generate revenue for the city is a bad business decision. “We crunched the numbers differently,” he told the Guardian. “[MTA] staff just plain had it wrong.” We haven’t heard back yet on how SEIU’s numbers differ from MTA’s numbers — but it’s clear that the MTA Board is willing to look at what the union brought to the table.

At Sup. Chris Daly’s request, a hearing will be held at Wednesday’s Budget & Finance Committee meeting to discuss Muni layoffs and “the impacts on public health and safety concerns,” according to the meeting agenda. Some of those concerns revolve around the fact that PCOs direct traffic in emergency situations or special events when they aren’t issuing parking tickets, Stallone explained. And since another group of affected Muni workers includes the people who clean the buses, maybe the case will be made that riding around in grimy buses won’t exactly help San Franciscans combat swine flu and other contagious maladies. That’s just a guess. “It’s a good guess,” Stallone said. But he took a broader view, saying, “You’re going to lose ridership if the buses suck.”

Newsom’s faith-based economic plan

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By Steven T. Jones
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The theory that cutting taxes on corporations and the rich creates wealth that eventually trickles down to help everyone — a policy that drastically widened the income gap — is back, and in San Francisco of all places.

Is it “ideological” to question whether the business tax cuts that Mayor Gavin Newsom is proposing will exacerbate the city’s huge budget deficit, potentially doing far more harm than good? Press Secretary Tony Winnicker, who finally returned my call about the proposal, told me that it is.

But Winnicker denied that conservative economic ideology is behind Newsom’s belief in the healing power of business tax cuts, calling it simply “practical” and telling me, “The mayor doesn’t share your hostility toward the private sector.”

That may be true, but I don’t share his hostility toward the public sector, which would lose even more of the “jobs” that Newsom claims to value so highly in order to pay for his experiment in trickle-down economics. Winnicker grudgingly acknowledged that short-term fiscal reality – and the fact that they didn’t study how much revenue will be lost before proposing the plan, or in the year since it was first pitched — but argued that it will somehow help the city over the long run.

“We believe that enacting these tax incentives, particularly the payroll tax credit for new hires, is one of the single biggest things we can do for economic growth,” Winnicker said.

But he couldn’t cite any evidence supporting that belief, which is a matter of faith for economic conservatives. Yet even the city’s fairly conservative economist, Ted Egan, says that reducing government spending in order to cut business taxes just isn’t smart.

Newsom’s corporate giveaway

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By Steven T. Jones
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After going through a ridiculous security check (I waited 15 minutes for an “escort,” but they never even inspected my bag) to get into Mayor Gavin Newsom’s invite-only State of the City speech last night in the Asian Art Museum, I chatted with my colleague Melissa Griffin, the blogger and Examiner columnist, as Newsom worked the room.

The mayor eventually wound his way over to me, and when I turned to greet him, he gave me a playful shove, knocking me off balance and telling me, “Be nice!” Just minutes into his speech, in which he promoted corporate tax breaks and a discredited “local economic stimulus package,” I understood what he meant.

When he introduced this trickle-down economics initiative almost a year ago, we cited studies showing that it was a political gimmick that didn’t work and shot down Newsom’s claim that the city’s economist supported this giveaway of public funds to the private sector.

But last night, Newsom chided the Board of Supervisors for not scheduling hearings on his proposal to waive payroll taxes for new businesses and new jobs, create tax credits for health insurance costs, and extend current tax breaks for biotech companies, seemingly oblivious to the fact that such actions will add to the massive budget deficit that he barely mentioned.

The Chronicle today quoted gleeful Chamber of Commerce head Steve Falk and the chilly reaction that this strange initiative got from supervisors, but San Francisco Democratic Party chair Aaron Peskin went even further, this morning telling us, “I am so disappointed that the mayor of San Francisco is taking a page from the playbook of the Republican Party. This sounds like Ronald Reagan’s trickle down economics. In an era when some of the richest corporations have made zillions of dollars and the U.S. government just gave them zillions more, now we’re going to close hospitals and say we can’t pave our streets.”

Meister: Get off the bandwagon, Willie

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City employees and working people generally need all the friends they can get in these perilous times. Willie Brown is not likely to be one of those friends in need.

By Dick Meister

(Dick Meister, former labor editor of the SF Chronicle and KQED-TV Newsroom, has covered labor and politics for a half-century.)

As former Mayor Willie Brown suggested in his Sunday Chronicle column on Jan. 3, “it’s time for politicians to begin an honest dialogue” about civil service. For starters, Willie should get his facts straight and get off the anti-public employee bandwagon that so many politicians are riding these days.

Brown said, for instance, that “the deal used to be that civil servants were paid less than private sector workers in exchange for an understanding that they had job security for life.”

Not so, Willie. Public employees were paid less because, if they were qualified for their jobs – as shown by civil service tests and other means – they were more likely to continue working for the government and were willing to accept long-term benefits – primarily health care and pensions – in lieu of higher pay.

Editorial: The mayor’s race starts now

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Ross and Jeff and any other progressive candidates need to decide soon if they are serious about running for mayor and either announce that they are running or step out of the way so someone else can step forward

EDITORIAL Back in 2007, when no leading progressive stepped in to run against Gavin Newsom, Sup. Chris Daly called a convention in the hope that someone would come forward and take up the challenge. All the major potential candidates showed up and spoke, but none announced a campaign.

Let’s not go there again.

We’re two years into Newsom’s second term, and the city’s a mess. After absorbing a round of brutal cuts last year, the budget’s still half a billion dollars out of whack. The mayor’s only answer at this point is to cut more (then raffle off to landlords the right to get rich by evicting tenants and turning apartments into condos). The Newsom agenda hasn’t created jobs or addressed the housing crisis or resolved the unfairness of the tax code or taken even the first steps toward energy self-sufficiency. Over the past year, he’s been largely inaccessible and hostile to the press, a mayor who won’t even tell the public where he is and what he does all day.

A candidate who wants to change the direction at City Hall should have no problem getting political traction in 2011. But the progressives are still floundering. And while the race is two years away, the more centrist candidates are already out the door. Sup. Bevan Dufty has announced he’s in the race, and state Sen. Leland Yee might as well have announced since everyone knows he’s running. Same for City Attorney Dennis Herrera. And at a certain point — in the not-too-distant future — those candidates will be starting to line up endorsers and making promises to major financial backers and constituency groups, which aren’t going to wait around forever for the progressives to settle on someone willing to make the immense effort to mount a serious campaign for mayor.

So the potential candidates — starting with Sup. Ross Mirkarimi and Public Defender Jeff Adachi — need to decide, soon, whether they’re serious about this or not, and either announce that they’re running or step out of the way so someone else can step forward.

With public financing, a candidate in San Francisco doesn’t have to be as well-heeled as Newsom was his first time around. It won’t take $6 million in contributions to win. But a progressive who wants to be the next mayor needs to demonstrate he or she can do a few key things, including:

•<\!s>Motivate and unite the base. Labor (or at least the progressive unions), the tenants, the left wing of the queer community (represented to a great extent by the Harvey Milk LGBT club), the environmentalists, and the progressive elected officials have to be fairly consistent in backing a candidate or downtown’s money will carry the day. So Mirkarimi and Adachi (and anyone else who’s interested) ought to be making the rounds, now. If that critical mass isn’t there, the campaign isn’t going to work.

•<\!s>Develop and promote a signature issue. Newsom won in part because he came up with the catchy “care not cash” initiative. Voters frustrated with years of failed homeless policies (and an incumbent, Willie Brown, who said the problem could never be solved) were willing to try something new (however bogus it turned out to be). Nobody’s developed a populist way to approach city finance. Nobody’s got a workable housing or jobs plan. What’s the central issue, or set of issues, that’s going to define the next progressive mayoral campaign?

•<\!s>Put together a central brain trust. This city’s full of smart progressives who have experience and ideas and can help put together a winning platform and campaign strategy. A good candidate will have them on board, early.

•<\!s>Herrera, Yee, Dufty, and others who might run (including Assessor-Recorder Phil Ting) are already out there looking for progressive supporters and allies, but none has yet offered an agenda the city’s left can support. Dufty pissed off the tenants by refusing to back stronger eviction protections. Herrera pissed off immigrant advocates by refusing to be as aggressive in supporting the city’s sanctuary law as he was in defending same-sex marriage (and because he hasn’t officially announced yet, he’s still not taking stands on political issues). Yee tried to sell off the Cow Palace. Ting has taken some great initiatives (forcing the Catholic Church to pay its fair share of property transfer taxes), but hasn’t developed or spoken out on the broader issues of city revenue. More of those candidates have been leaders in the public power movement.

It would be inexcusable if the progressives, who control the Board of Supervisors, are forced to pick a mayoral candidate by default. It’s time to end the speculation and dancing and find a candidate who can carry the progressive standard in 2011.

Prison report: The other side of the story

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By Just A Guy

Editor’s note: Just A Guy was recently released from a California state prison. He continues to report and comment on corrections and law-enforcement issues. You can read his most recent post here.

I want to be clear about something: I don’t hate corrections officers or staff members that work for the California Department of Corrections and Rehabilitation and are trying to make a living. I don’t really hate anyone; it’s a tremendous waste of time and energy and harms me more than the person being hated.

I truly believe that most COs and administrators are just people trying to get by in this world, and my intention has never been to condemn anyone. My intention with this blog has always been to reveal the truth from MY PERSPECTIVE. To talk about things that don’t get talked about, to represent the under-represented. While there are certainly groups that represent inmates, they are the minority and their voices are like someone calling for help from the middle of the ocean at a rescue plane passing overhead.

A favorite adage of mine is, “Those who stand for nothing, fall for anything” – Alexander Hamilton. Not that my priority in life is to stand for inmates, but to stand for reason.

This blog is dedicated to all the COs out there that are doing their jobs, that aren’t corrupt, that aren’t apathetic haters. You have a hard job; I wouldn’t want to do it. You have a necessary job. Unfortunately, it’s never the good ones that stand out, but the bad. Just as you rarely hear two sides of the story with an inmate accused of something in prison, you rarely hear the COs side of the story that when one of them is allegedly bringing in contraband or has “assaulted” an inmate. That’s the way it is. The public doesn’t want to hear everything; people just want to hear the dirt, it’s more entertaining.

The unfortunate side of the whole process for both inmates and guards is the “wall of silence.” Just as an inmate can’t inform on his fellow inmates without severe repercussions, a guard can’t report another guard’s misconduct without being ostracized (or worse) by his fellows. It’s a real catch 22 across the board. I am not justifying when guards cover things up, but saying I understand why they do, just as I understand why inmates don’t inform. The Us vs. Them mentality has been instilled upon both groups. It takes a huge amount of courage to break beyond that mentality, and, quite frankly, from both perspectives (I think), the consequences may not be worth the act. An inmate puts his life on the line by informing and a guard (though it shouldn’t be this way) his/her livelihood. Can you imagine going into work every day and having all your fellow workers looking at you with derision? That would be very uncomfortable, and I imagine that’s why many CDCR employees keep their mouths shut in the face of what they would really like to do or say.

One of my desires, with this blog, is to open up a dialogue between inmates (ex or not), CDCR staff, and the general public that reveals the truth from individual perspectives. I don’t want people to read my blog and immediately go into a defensive posture. I would like for people to read Prison Report and question the state of criminal justice/prison policy in California and the rest of the country. Idealistic, sure. But idealism is what founded this country.

We have all been given an opportunity by the San Francisco Bay Guardian to speak freely and anonymously; shall we not take advantage of it in 2010 to air OUR truth?

Early releases are going to happen. Crime will continue. Parole will be, essentially, eradicated. The foibles of CDCR will continue. The foibles of felons most certainly will too. But changing the way people think about things begins with one voice — is it yours?

The Big Zero – SF version

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By Steven T. Jones
bfz001.jpg
I can’t stop thinking about Paul Krugman’s wonderfully biting recent commentary, “The Big Zero,” and his persuasive point that in the last decade, “we achieved nothing and learned nothing.” The Nobel laureate economist was talking about the national economy, but I think his point can also be applied to other realms as well, and specifically to San Francisco.

Sprawl development and over-reliance on the automobile have strained public resources and contributed to global warming, bad air quality, and diminished quality of life. The bursting of the housing bubble and its related lies shows clearly that most people can’t afford to buy a home and must rent. Stagnant wages, decimated 401Ks, and the dead promise that we’ll be OK if we work hard and play by the rules show that we’re all in the same boat, equally vulnerable to hard times and ultimately dependent on government and each other if things really get bad.

So what are we doing with these lessons learned? The core of this city’s housing policy is to simply let an untrustworthy, financially weak corporation, Lennar, build 16,000 homes – the vast majority for sale at pricey market rates – in the two most isolated parts of the city: southeast SF and Treasure Island (which will need to be severely hardened against rising seas). And to make it worse, Mayor Gavin Newsom’s big revenue idea is to let rich people buy their way out of the condo conversion lottery, further depleting the rental stock relied on by two-thirds of city residents.

We’re promoting shitty private sector jobs at all cost (including refusing to adequately tax big corporations) and cutting public sector jobs that have good pay and benefits without a thought, in the process hurting our public health and social service functions. Newsom is still taking his cues from the realtors, landlords and Chamber of Commerce – who have all been so obviously wrong in their advocacy this decade – and refusing to even meet with advocates for tenants, immigrants, environmentalists, and the working class, the very people who most need the help and attention of the Mayor’s Office.

To me, being a progressive simply means that we can do better, that we can progress, that we can learn from the past to improve the future. So Krugman’s insightful column should be a wake-up call, a needed reminder that the economic conservatives like Newsom have been dangerously wrong and that we need to chart a new course.

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