Saturday, December 7, 2013

Reading between the lines: economic failure in a Blue State that's really a Red State

Sunday's WNJ will publish a major article on job losses and the changing nature of employment in Delaware.

This comes fast on the heels of the Fast Food Thursday demonstrations for a higher minimum wage, and Representative Byron Short's sudden public conversion to that cause.

There's an awful lot, however, hidden between the lines of the story, including stunning admissions by the state's political and economic leaders that actually doing anything about the plight of Delaware's low-wage workers is really nowhere on their radar.

In fact, what you discover is that, at least from the perspective of our top political and economic leaders, Delaware is NOT a Blue State.

Think I'm kidding?  Take a look.

First, let's examine the descriptions of the recent and current economy:

Boom, bust and breathtaking change have transformed Delaware’s workforce and wage scales, shrinking the pool of middle income jobs while expanding the number of lower paying positions. That shift in the state’s employment ranks occurred as a smaller segment of higher-paying positions for the more educated worker increased, The News Journal analysis of wage and job data from 2002 to 2012 found. 
The changes worsened state income disparities, increasing pay for those better off and decreasing wages for the poor.
And there's this:
Fast-food jobs in Delaware skyrocketed in the last decade, with low-paying food prep and service jobs seeing 29 percent growth — or more than 8,600 jobs added during the period. At the same time, better paying construction jobs have fallen by 30 percent, or losing more than 5,000 jobs, and production occupations fell by almost 27 percent, a loss of more than 5,300, according to a News Journal analysis of data from the U.S. Department of Labor. 
Meanwhile, top-salaried positions for the more educated jumped 12.3 percent, adding more than 7,200 jobs. 
And, finally, this:
Nearly 38 percent of Delaware’s workforce is concentrated in the bottom 20 percent of jobs paying a maximum median wage of $13.42 an hour. 
OK, so now you've got the picture, right?  Delaware's economy has seen 38% of its workforce dropped into a median salary level that is roughly $25K/year.  I know about this salary level and its frustrations:  my oldest daughter, as a Certified Nursing Assistant, sits at just above $14/hour, and can't afford to pay out for health insurance or invest in a pension plan while she tries to make ends meet and raise her son. Someday, maybe, she'll be able to move out of the house.  Maybe.

We'll take a look, as we go, at how the economic elites' strategic plan might affect her.

What do the elites think we need to do in Delaware?

First, Governor Markell:
Markell has focused on improving education and training as a way to build job opportunities for Delawareans. Others have advocated increasing the state’s minimum wage, to help those at the bottom of the workforce earn a better living.
Then, let's hear from a top corporate leader:
 Mark A. Turner, chief executive officer of WSFS, said Delaware is well into a rebound, but needs to do more to support the recovery. Top priorities, he said, include improving the state’s educational system, creating an attractive tax and regulatory environment for businesses and diversifying the economy with an emphasis on start-ups and new ventures.
The first thing to note here is that the suggestion to increase the state's minimum wage DOES NOT come from either Governor Markell or corporate leaders.  In fact, political insiders will tell you that Markell and Economic Director of Corporate Charity Alan Levin both had a hand in torpedoing any raise in the minimum wage last year.

[An aside:  my libertarian friends and I will consistently tell you that we don't believe changing the minimum wage is the route to prosperity, either, albeit for much different reasons.  Nonetheless, I am following this track because one of the core values of the Democratic Party has always been--at least rhetorically--raising the minimum wage.  We're going to find out here that there is talk, and there is action.]

And, in point of fact, the "others" who support raising the minimum wage are so apparently inconsequential to the corporate house organ of the Markell administration that the WNJ never names a single supporter of the idea.

So, according to our economic elites, what's going to pull us out of the quagmire?

We get exactly four items:

1.  Education

2.  Training programs

3.  An attractive tax and regulatory environment for business

4.  Diversifying economy with an emphasis on start-ups and new ventures.

First, let's note that the best that Delaware's corporate/Democratic elite can come up with is the Republican Party platform of about 1990 vintage.  In fact, they might has well have hired Mike Castle or Pete DuPont to ghostwrite the thing.

Now let's interject a does of reality into this list, and rewrite it to reflect what's actually happening:

1.  Education:  this means corporate driven education reform that focuses on stimulating the economy by grabbing Federal bucks to use paying consultants and data analysts while essentially abandoning low-income children in Wilmington and elsewhere.

2.  Training programs:  for the people in the bottom 38% discussed above (like my daughter), this is by and large pure bullshit.  My daughter even qualifies for assistance from the Department of Vocational Rehabilitation because she has some special needs.  You know what their training program/ employment assistance consists of?  Three times they've invited her to come to a group that meets once a week (for which she'd have to take off work and lose four hours' pay) to sit there and go through the want ads with a counselor who is apparently not in the 38% because she drives a brand-new Audi.  Yes, we have a great community college system in Delaware, but my daughter's already been through the CNA program and passed her national boards there ... and this is the job she got:  $14/hour (after two raises) ...

3.  An attractive tax and regulatory environment for business:  folks it doesn't get much more attractive than letting Fisker stiff New Castle County and Red Clay to the tune of $1.1 million, skip out on $7.4 million in back state taxes, and default on tens of millions in loan guarantees.  It doesn't get any better than having Bloom Energy getting to leach off my electric bill.  It doesn't get any better than using secret AG opinions to gut the Coastal Zone Act in favor of a refinery.

4.  Diversifying economy with an emphasis on start-ups and new businesses:  this is Markell/Levin code for handing out millions in tax dollars as corporate welfare, whether (Fisker, Bloom, Bluewater, AstraZeneca) any of it actually pays off or not.

Now notice what's missing from these prescriptions that would always have seemed to be part and parcel of the Democratic Party agenda since way back when:

A.  Neither our corporatist or Democratic political elites seem to have much interest in listing building new infrastructure as a method of growing the economy and providing jobs.  Fascinating:  Markell puts union representation on the Pension Benefits Board (to keep those union votes), and keeps the Prevailing Wage Law in place (while in reality awarding damn few state projects), but has never once proposed a wage increase for any of the workers covered by any of the state employee unions.  And many of those workers, by the way, are just as far down the low end of the scale and part of the 38% as the people taking your order at the drive-through.  How much do you really think the custodian or the cafeteria lady at your kid's school is making, anyway?  I know senior secretaries in higher education institutions in Delaware who have worked for 10-15 years to get up to the $25K mark that my daughter makes at the nursing home.

B.  There is no emphasis on the kinds of large-scale training programs that Democrats have always favored to take those fast food workers out of the ditch.  Yes, there are subsidies available to help you get trained at Del Tech.  You can get your tuition, in some cases, completely waived.  So what?  Consider again my daughter's case.  [We paid her tuition; she'd have to have waited six months for a "free" slot if we hadn't, by the way.]  So her tuition is covered.  Big deal.  In order to complete the class she had to quit her existing job because the eight-work course was full-time (8 hours/day, 5 days/week) with homework and practicum.  Then, even with a 95% on her national boards, it took six weeks of full-time job hunting to get a part-time job in the new field, and another six weeks to find something full-time.  How many of the people who need this kind of training can afford to quit their jobs and go without any real income coming in for several months in order to retrain?

C.  Our corporatist/Democratic elites, particularly those in New Castle County, don't actually do a great deal of investing in Delaware's economy.  This is a dirty little secret, but you will find them spending a great deal of their time shopping and dining and spending their money in Philadelphia, Baltimore, Washington DC, or New York.  Yes, they pay lip service to showing up for events at the Grand, or the Hotel DuPont, but they are neither pouring their disposable income nor their personal portfolios back into Delaware.  They want you and me to do that for them via our taxes.

D.  Delaware has become a grant-farming economy instead of an entrepreneurial one.  Between the State Government, UD, DSU, and Del Tech, guess what?  One of our major pastimes is contorting ourselves to acquire Federal money.  We're really pretty good at it.  Race to the Top.  An optics lab.  Delaware Information Analysis Center.  Etc. Etc.  But you know what?  Almost all those grants bring in money that goes predominantly to existing bureaucracies and the top 10% of the income pack.  There's damn little evidence that any of these millions and millions of dollars do one damn thing to help the people at the bottom of the scale.

Why is nobody from the Markell administration championing "progressive" economic legislation?

I'll tell you why in a sentence everybody can understand.

jason at Delawareliberal (and countless others) have a wry habit of describing Libertarians as "Republicans who like to smoke pot."

It took me a long time to realize that, in Delaware, the definition of most Democrats is "Republicans who favor marriage equality."

In a State where most of your Republicans are Tea Partiers, and most of your Democrats are moderate Republicans, how exactly do you get to call yourself a Blue State?


Anonymous said...

Lol. We're a red state that holds it's breath until it turns blue....

Once inside an office, it's like a bubble. The only people one sees are those paid to talk to you...

Until that changes.....

Jay said...

I know exactly what you're daughter went through Steve with DVR. I used them twice, the first case worker told me, if I didn't have a degree it would be easier for them to find a job.
One person they assigned to me was basically a head-hunter; and my thought being these people had previously established some type of relationship with Delaware employers and people with limitations. The second just wanted me to drive around aimlessly and fill out applications and hand out my resumé. The whole process was enlightening.

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