Drayage blues

The cycle in which port truck drivers are stuck:

Costs are externalized from the shipping industry onto port truck drivers and the state. The drivers earn very little income, and, as independent contractors, have very little bargaining power and no health insurance. To compete for business, they reduce their costs by whatever means possible, generally running very old, dirty trucks. The surrounding communities bear the brunt of the pollution from these trucks. The surrounding communities are, of course, low-income communities. It goes without saying that the greater metropolitan area (and ultimately the atmosphere of our planet) suffer for the pollution, as well.

The port - charged with the responsibility of being an economic engine for Washington state - fears losing business to other, cheaper, west coast ports if the cost of shipping goes up as a result of increased driver wages and/or truck regulation. Their proposed solution is to use public money to subsidize a clean trucks program that will be only marginally effective, at best, rather than put the costs on the international shippers via fees at the port terminals. So, WalMart (for example) doesn't pay the real costs of shipping, and continues to use its profits to expand its own business, making it that more capable of out-competing its competitors as well as its own labor.

Moreover, the argument that WalMart is creating jobs is a fallacy. They are edging out smaller stores and replacing those jobs with their jobs. Their full-time employees earn on average under $20,000/year and must spend 20% of that income on health care before their insurance kicks in. It is clear that their incomes and their jobs are not doing much for the dynamism of our economy. The GDP grows, but so does inequality. The power and the resources accumulate at the top.

Thoughts on this?

"Further, an informed respondent is one who knows the benefits and negative externalities of a public good, and it therefore becomes easier for the respondent to accurately assess the maximum amount he/she is willing to pay for a good. Research has also demonstrated that informing respondents of the negative externalities of a good on society prior to surveying has a higher impact on the marginal WTP estimate than does informing respondents of the societal benefits of the good (Marette et al., 2004) That is, people respond more to the harm a good can cause than to the benefits that good may bring to society."

From here.

This makes me think about creating negative laws - can't do this, can't do that - rather than positive laws - must do this, must do that. This bears some resemblance to libertarian or Hayek-style laws for regulating the economy and other human affairs. There's some sense to it. Not being able to do something doesn't feel as controlling to people as having to do something.

With the exception, perhaps, of gun control. Hm, this needs further consideration....

Albert Einstein on the deal with American capitalism

"Private capital tends to become concentrated in few hands, partly because of competition among the capitalists, and partly because technological development and the increasing division of labor encourage the formation of larger units of production at the expense of smaller ones. The result of these developments is an oligarchy of private capital the enormous power of which cannot be effectively checked even by a democratically organized political society. This is true since the members of legislative bodies are selected by political parties, largely financed or otherwise influenced by private capitalists who, for all practical purposes, separate the electorate from the legislature. The consequence is that the representatives of the people do not in fact sufficiently protect the interests of the underprivileged sections of the population. Moreover, under existing conditions, private capitalists inevitably control, directly or indirectly, the main sources of information (press, radio, education). It is thus extremely difficult, and indeed in most cases quite impossible, for the individual citizen to come to objective conclusions and to make intelligent use of his political rights."

From here.

Interesting Ideas

"From both a liberal and a mildly libertarian perspective, it would be preferable to have big, decisive, well-defined programs that fully guarantee key public goods--such as Social Security, defense, national health insurance, or anti-trust regulation--on one side, and a fairly open field for human activity on the other, with the line between public and private, regulated and unregulated domains, fairly obvious and well-guarded."

Interestingly, this encapsulates my recent thoughts that certain services - health care, education, social security, etc. - should be universal and guaranteed, and innovation and entrepreneurship allowed free reign after this.

I would add that environmental protections have to be as rigorously maintained as anti-trust laws. And that money has to be kept entirely out of politics, and perhaps entirely out of media, as well.

From here

"We are fully convinced that every human being is endowed with enormous capacity to contribute to the economy and society. By one’s own effort one can pull himself/herself out of poverty.… The poor do not need charity or a handout. The only thing that the poor need is a supportive set of institutions and rules. Charity and handouts were invented to avoid the issue of poverty alleviation. Handouts carry the message that the society is ignoring you. It is not interested in your ability. (p. 8)"

- Muhammad Yunus, founder of Grameen Bank, from this article by David Stoaz, advocating asset-building institutions rather than income-subsidized welfare policies.

Gardening

As I am a gardener (it's a job I've had on the side for a while), please indulge my use of the following metaphor: if an intact, healthy culture is the equivalent of good soil, economic opportunity is the equivalent of ample light, fair access to health and education is the equivalent of adequate water, then “welfare”-style policy is like fertilizer, most effective when selectively but consistently and appropriately applied.

Black-owned businesses in America: another way to measure economic inequality

Income inequality between Blacks and Whites in America is bad, but in itself offers an incomplete picture of the real economic inequality between the two races.

Median per capita Black income, circa 2008, was $34,218.
Median per capita White (non-Hispanic) income was $55,530.

This means that Blacks, on average, made about 62% what whites made.

As dismal as this income disparity is, however, it is not representative of the extent of economic inequality.

When we look at economic inequality in terms of business ownership, a more disturbing picture emerges.

In 2002 (according to the U.S. Census' Survey of Business Owners):

White Americans, though only 69.1 percent of the population, owned 86.6 percent of business firms. Black Americans, despite making up 12.8 percent of the American population, owned 5.2 percent of firms. White-owned firms accounted for 36.6 percent of the total sales and receipts in the American market (excluding publicly held and other unclassifiable firms), while Black-owned firms accounted for only 0.4 percent of total sales and receipts.

This means that Whites are over-represented as business owners (per their proportion of the population) by 25%, while Blacks are under-represented by nearly 60%.

One of the most startling numbers in this analysis, however, is this: the total sales and receipts of White-owned firms are nearly 100 times that of Black-owned firms.

Considering that Blacks make up nearly 13 percent of the U.S. population and Whites make up about 70 percent, if all was fair the total sales and receipts of Black-owned firms would account for about 6.8 percent. In other words, Black businesses are making less than 6 percent of what they should be, in a just and fair world.

Finally, Whites are three and a half times more likely to own businesses with paid employees than Blacks; three and a half times more likely to be boss. And since Blacks make up a disproportionate number of employees (considering the relative lack of business ownership), we can guess that Whites are probably far, far more likely to boss around Black folks than the other way around.

This pattern is perpetuated outside of business ownership as well, where Blacks and Whites compete for positions of authority in businesses they don't own. According to the 2002 Census CPS, the percent of Blacks in the workforce who were working as administrators or in executive and managerial occupations in March of 2002 was 9.9 percent, compared to 17.2 percent of Whites. In 2003, Blacks made up 18.7 percent of social and community service workers but only 11 percent of social and community service managers. Similarly, while Blacks made up 13.9 percent of production, transportation, and material moving workers, they accounted for only 5.9 percent of transportation, storage, and distribution managers. The trend here is that Blacks make up a disproportionately low number of managers even within industries in which they are represented disproportionately higher than other races.

Correlation of economic growth with resource depletion and/or environmental degradation

If the reduction of poverty comes at the expense of the natural environment, can it actually be considered a reduction of poverty?

I ask this question because it potentially undermines the basic legitimacy of economic growth as a means to reduce poverty, and not only the neo-liberal/neo-con version of the argument, but the social liberal version of the argument as well.

My social work readings so far tend to support the following analysis: though an increase in economic growth, as measured by GDP, does not necessarily correspond to a decrease in poverty, a decrease in economic growth is consistently correlated with an increase in poverty. The problem - so most of the readings say - is in the unequal distribution of that growth.

However, whether economic growth is distributed equally or not, if it occurs at the expense of the natural environment and/or involves the depletion of unreplenishable natural resources, then it cannot be considered a valid long-term gain, for either the rich or the poor.

There are social costs to environmental degradation that are crucial for a social worker to consider. It seems clear that the costs of environmental degradation accrue to the most vulnerable members of society, while the profits accrue to the wealthy or otherwise privileged. Of course, all pay in the end.

This analysis also (obviously) trumps the classic neo-liberal/neo-con argument that, as markets are consistently deregulated, the rich not only get richer (receiving a bigger piece of the pie) but the poor also get richer, or at least don't get poorer (because the overall pie gets bigger). Even if or when it's true (1949-1969, for example), this an invalid argument if the result of such deregulated market activity is resource depletion and environmental degradation.

It should be noted that natural resources and the quality of the environment are shared resources which industry consistently plunders for little or no cost, and at the expense of everyone. The so-called "tragedy of the commons" is as much its abuse by the wealthy as its neglect by the poor.

I would like to figure out the historical relationship of economic growth to environmental degradation/resource depletion. Have any scholars or economists attempted to measure the historical consumption of resources? Are there estimates as to the accrued cost of resource loss so far? It seems this would be easier to measure than environmental degradation - one might, for example, conceivably measure the amount of forested land lost and translate that to real dollars, even if this takes only partial account of the bigger, long-term costs to the environment.

In particular, if one could measure resource loss between 1949-1969, the same years which Iceland (Ch. 6) identifies as the most prosperous for all Americans including the poor, how much would the costs of resource loss impact the overall real gains for the poor?