Third and State This Week: Corporate Tax Avoidance, Insurance Rate Review and Prevailing Wage

This week, we blogged about a new report on state tax avoidance by some of the largest U.S. corporations, how to really save money on public construction projects, and legislation that undermines the state’s ability to review most health insurance rate hikes.


More blog posts next week. Keep us bookmarked and join the conversation!

Morning Must Reads: The Failure of School Choice and the Food Industry Eats Your Tax Dollars

An op-ed in The New York Times this morning points out that "school choice" has increased educational inequality.

If you want to see the direction that education reform is taking the country, pay a visit to my leafy, majority-black neighborhood in Washington. While we have lived in the same house since our 11-year-old son was born, he’s been assigned to three different elementary schools as one after the other has been shuttered. Now it’s time for middle school, and there’s been no neighborhood option available.

Meanwhile, across Rock Creek Park in a wealthy, majority-white community, there is a sparkling new neighborhood middle school, with rugby, fencing, an international baccalaureate curriculum and all the other amenities that make people pay top dollar to live there.

Such inequities are the perverse result of a 'reform' process intended to bring choice and accountability to the school system. Instead, it has destroyed community-based education for working-class families, even as it has funneled resources toward a few better-off, exclusive, institutions.

On Sunday, another op-ed detailed how food manufacturers and food service companies are allegedly fleecing taxpayers while delivering food with little or no nutritional content. 

The money is ill spent. The Center for Science in the Public Interest has warned that sending food to be processed often means lower nutritional value and noted that 'many schools continue to exceed the standards for fat, saturated fat and sodium.' A 2008 study by the Robert Wood Johnson Foundation found that by the time many healthier commodities reach students, 'they have about the same nutritional value as junk foods.' ...

Roland Zullo, a researcher at the University of Michigan, found in 2008 that Michigan schools that hired private food-service management firms spent less on labor and food but more on fees and supplies, yielding 'no substantive economic savings.' Alarmingly, he even found that privatization was associated with lower test scores, hypothesizing that the high-fat and high-sugar foods served by the companies might be the cause. In a later study, in 2010, Dr. Zullo found that Chartwells was able to trim costs by cutting benefits for workers in Ann Arbor schools, but that the schools didn’t end up realizing any savings.

The Pittsburgh Post-Gazette continues its series on inequality this morning with a review of the impact of the recession on African-American households.

Third and State This Week: The Costs of Child Poverty, Too-Good-to-Be-True Liquor Privatization and Temp Workers

This week, we blogged about the economic costs of child poverty, a privatization study that is too good to be true, what the trends in temporary worker services suggest for Pennsylvania's economy, and much more.


  • On poverty, Chris Lilienthal blogged about an analysis estimating that child poverty costs the United States' economy $500 billion every year in foregone earnings, healthcare expenses, and crime involvement. 
  • On privatization, Stephen Herzenberg highlighted testimony presented by researchers with the Keystone Research Center this week making the point that privatization of Pennsylvania's wine and spirits stores would not benefit state revenues but could increase alcohol-related social problems. 
  • On jobs and unemployment, Sean Brandon explained what the employment trends of temporary workers could mean for Pennsylvania as an indicator of broader job market trends. 
  • And in the Morning Must Reads this week, Mark Price wrote about news report on $7.7 trillion in loans and guarantees the Federal Reserve provided to troubled banks, the growing number of elementary school students who qualify for subsidized school lunches, and the real root of high unemployment among today's youth
More blog posts next week. Keep us bookmarked and join the conversation!

Morning Must Reads: Retired Business Editor To Unemployed Youth "Get Off My Lawn!"

Jack Markowitz, a retired editor, has a column in the Pittsburgh Tribune-Review this morning where he argues that high unemployment among today's youth is the result of poor personal habits and values. Markowitz bases this argument on a story he tells about two young men — one employed with a failed marriage and living with his parents rent free, and the other an unemployed ex-convict. Markowitz is, in effect, arguing that the rise in unemployment is the result of a wholesale outbreak of vice among the young which happened to coincide with the beginning of the recession.

This is absurd. Youth unemployment is at record highs because unemployment generally in the economy is at record highs.

Third and State This Week: A $56 million Marcellus Oops, Fiscal Austerity and Why It's Good to Be King

We hope you enjoyed your Thanksgiving holiday and are ready to take a break from the shopping mall to see what you missed this week at Third and State.

We blogged about the Pennsylvania Department of Revenue's Britney Spears moment, the challenges of reading all the way to the end, and why it's good to be king (or at least a well-paid CEO).


  • On the Marcellus Shale, Michael Wood blogged about a $56 million "oops" by the Pennsylvania Department of Revenue in estimates it made earlier this year of Marcellus Shale industry tax contributions in 2010.
  • On jobs and the economy, Mark Price explained why it's a good idea to read to the end before criticizing the work of others. He also highlighted in the Morning Must Reads The Philadelphia Inquirer's series "America: What Went Wrong" and the Pittsburgh Post-Gazette's series on what happened to the middle class.
  • In other Morning Must Reads, Mark Price shared news stories on the fallout of fiscal austerity across the Commonwealth and wrote about the big bucks the new CEO of Pittsburgh-based American Eagle Outfitters will be making. As King Louis XVI of France was fond of saying, it's good to be king.
More blog posts next week. Keep us bookmarked and join the conversation!

Morning Must Reads: Fiscal Austerity Means Higher Taxes, Job Losses, Fewer Resources to Help Abused Kids

The Congressional Budget Office (CBO) has released new estimates of the American Recovery and Reinvestment Act's impact on employment and output (the quantity of goods and services in the economy). Commenting on the new ARRA estimates, Paul Krugman argues that the U.S. has been practicing austerity since the middle of 2010.

  • Paul Krugman, The Conscience of a Liberal — The Big Drag:

...the U.S. federal government has been practicing destructive fiscal austerity since the middle of 2010 (and that’s not even talking about what’s happening at the state and local level). Here’s the average of CBO's high and low estimates of the impact of the ARRA on the level (not the rate of growth) of [Gross Domestic Product] by quarter:

Failing to do more to boost employment growth means tax revenues remain depressed for state and local governments. And this means higher local taxes and more layoffs at a time when the unemployment rate remains higher in most cities and counties in Pennsylvania than it was even at the worst of the last two recessions.

Third and State This Week: Income Inequality, Stagnant Wages and Putting the Brakes on PA's Recovery

This week we blogged about how public-sector job losses are putting the brakes on the state's economic recovery, the top paid executives in Central Pennsylvania, and wage stagnation. In the Morning Must Reads, we also highlighted news stories on the economics of fracking, a new report on campaign contributions made by gas companies, new data on job openings, and much more.


  • On income inequality, Mark Price blogged that between 2000 and 2007, while Pennsylvania's per capita output grew, workers' wages remained stagnant. Stephen Herzenberg also had a post on Central Pennsylvania's highest-paid executives.
  • On jobs and the economy, Stephen Herzenberg wrote about a new policy brief from the Keystone Research Center showing that public-sector job losses are putting the brakes on Pennsylvania’s economic recovery.
  • In the Morning Must Reads this week, Mark Price highlighted new data on job openings, noting that there are 4.2 unemployed workers competing for each new job opening. He also wrote about a bleak employment outlook from Dean Baker and J-1 visas and teacher layoffs in Pittsburgh.
  • Mark Price also focused three Morning Must Reads this week on the Marcellus Shale. He highlighted a new study by Common Cause on campaign contributions made by natural gas companies in Pennsylvania; blogged about a news report stating that taxpayers could be stuck with most of the $100,000 it costs to plug an abandoned Marcellus gas well; and shared Paul Krugman's primer on the basic economics of fracking.

More blog posts next week. Keep us bookmarked and join the conversation!

Putting the Brakes on Pennsylvania’s Recovery

Public-sector job losses are putting the brakes on Pennsylvania’s economic recovery, endangering private-sector job gains

Those are the findings in a new Keystone Research Center policy brief that I co-authored with Mark Price. (You can read the press release here.)

Over the last year, Pennsylvania has lost 21,000 public-sector jobs, including some 13,000 education jobs. The impact is being felt well beyond the public sector, slowing the pace of private-sector job growth as the ripple effects of out-of-work teachers and laid-off government workers take a toll on the broader economy.

Morning Must Reads: J-1 Visas, Teacher Layoffs In Pittsburgh & High Unemployment in Cumberland County

The U.S. State Department has announced that it will not accept new sponsoring organizations and that it will hold the number of J-1 visas steady at 103,000 in 2012.

If that sounds to you like not much of a reform of the J-1 visa program, you are not alone.

It was an existing sponsor of the Council for Educational Travel (CETUSA) and the employers Exel North American Logistics Company, SHS Onsite Solutions and The Hershey Company that are alleged to have violated the law regarding "discrimination, forced labor, substandard conditions of work, wage theft, and infringement on associational rights."

Despite protective measures added to a foreign guest worker program, many international students who came to the U.S. for jobs and culture this year again compared their experiences to slavery...

The new measures fall short, according to a University of Pennsylvania law professor who heads the school’s international human rights and immigration clinic.

'It’s not enough that [the department] has launched an investigation. There has to be transparency and accountability in the process,' Sarah Paoletti said.

She said sponsors like Council for Educational Travel, USA, should be supervised by an independent body that could conduct spot checks and hold exit interviews with students.

Some Summer Work Travel participants have earned as little as $1 an hour, the AP said, and have wound up in homeless shelters during their U.S. stays.

After the Hershey workers' protest, the U.S. Labor Department said it had opened two investigations into conditions at the company's warehouse: one by the Wage and Hour Division, the other by the Occupational Safety and Health Administration.

Third and State This Week: Weak Drilling Fee, More Bad Employment News and Ranking Social Well-being

This week, we blogged about the latest developments in enacting a Marcellus Shale drilling fee, more bad employment news for Pennsylvania and a new study ranking nations based on indicators of social well being (the U.S. doesn't do so good).


  • On the Marcellus Shale, Sharon Ward provided an update on legislative developments in the Pennsylvania House, and Michael Wood shared a new fact check from the Pennsylvania Budget and Policy Center comparing the effective rates of leading drilling tax and fee plans before the General Assembly.
  • On inequality, Stephen Herzenberg blogged about a new study that ranks the 31 Organization for Economic Co-operation and Development (OECD) countries on eight indicators of social well-being. The U.S. ranks 27th.
  • On jobs and unemployment, Mark Price wrote about more bad employment news for Pennsylvania, including a revised outlook from the Philadelphia Federal Reserve signaling that the state's economy will be shrinking through the first quarter of 2012.
  • In the Morning Must Reads this week, Mark Price summed up local unemployment data, shared an amusing video from The Daily Show suggesting that it is time for the 1% to go on strike, wrote about rising college tuition and budget strains for local governments, highlighted a lack of political will for fixing the broken economy, and noted that some in the U.S. Senate would just prefer that people that have to drive over structurally deficient bridges would just drop dead.

More blog posts next week. Keep us bookmarked and join the conversation!

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