QUOTE OF THE DAY
Tech Crunch: Silicon Valley’s Real Estate Crunch Is A Golden Opportunity For Other American Cities
When Curse CEO Hubert Thieblot told his employees last year that he was moving the company’s San Francisco headquarters to Huntsville, Alabama last year, they thought he was crazy.
About 20 of his employees quit because they didn’t want to relocate.
Washington Post: A federal court is about to answer the question: Who do you actually work for?
One of the most fundamental obstacles the American labor movement faces could get torn down in the coming weeks — and it’s terrifying management, in industries from fast-food to manufacturing.
Right now, the National Labor Relations Board is weighing the very question of what it means to be an “employer,” and therefore who has to come to the bargaining table when workers organize for better treatment.
The problem: Over the past few decades, the labor market has undergone a profound “fissuring,” with workers being insulated from the people who effectively dictate the terms of their employment. Vertical integration is so 1950s; outsourcing is the new hotness. Some big companies barely “employ” anybody at all, hiding behind the franchises, temp staffing agencies and contractors that actually do the hiring and firing (or work for themselves). That makes it nearly impossible for unions to gain any leverage in their fights for better wages and working conditions: If a hospital or a property manager or an automaker can just swap out one contractor for another that charges less, what’s the point?
City Journal: Why the State and Local Pension Problem Will Get Worse
When unions agreed to a deal last month with Detroit city government to freeze the city’s underfunded pension system and create a new, less expensive one, some experts hailed it as a model that other troubled cities might adopt. News reports prominently mentioned governments with deep retirement debt, including Chicago and Philadelphia, as candidates for similar reforms. But the agreement came about under a Michigan emergency law that applies to struggling cities like Detroit, which is in bankruptcy. In many states, by contrast, local laws and state court rulings have made it virtually impossible to cut back retirement benefits for current government employees, even for work that they have yet to perform. These state protections, which go far beyond any safeguards that federal law provides to private-sector workers, are one reason why so many states and localities are struggling to dig themselves out of pension-system debt, amid sharp increases in costs. It will take significant reforms to state laws—or bigger and more painful bankruptcy cases—to make a real dent in the pension crisis.
The Detroit plan, negotiated by unions with the city’s emergency manager,Kevyn Orr, freezes the city’s current underfunded retirement plan so that workers will receive benefits for new work at a reduced rate. Under the old plan, an employee who worked for the city for 35 years and retired at 62 with a final salary of $60,000 could qualify for a pension of nearly $40,000. By contrast, if that same employee works the final ten years of his career under the new plan, his annual pension would be about $35,000. In addition, if the new plan becomes underfunded, the employee will have to contribute more of his own money to help cover the costs.
Huffington Post: The Excellent But False Messaging of the Common Core Standards
Have you ever wondered about the amazingly effective campaign to sell the Common Core standards to the media, the business community, and the public? How did it happen that advocates for the standards used the same language, the same talking points, the same claims, no matter where they were located?
The talking points sounded poll-tested because they were. The language was the same because it came from the same source. The campaign to have “rigorous,” “high standards” that would make ALL students “college and career-ready” and “globally competitive” was well planned and coordinated. There was no evidence for these claims but repeated often enough in editorials and news stories and in ads by major corporations, they took on the ring of truth. Even the new stories that reported on controversies between advocates and opponents of the Common Core used the rhetoric of the advocates to describe the standards.
This was no accident.
Crain’s: Moody’s says Illinois Supreme Court casts doubt on pension reform
A Wall Street credit rating agency said a recent Illinois Supreme Court decision that upheld constitutional protection for the healthcare benefits of retired state employees makes it more likely that last year’s state pension law will be found unconstitutional.
The 6-1 ruling on July 3 is “credit negative” for the State of Illinois and the City of Chicago, according to Moody’s Investors Service in a Friday report. The Illinois General Assembly in May passed legislation overhauling two of Chicago’s pension plans.
“The majority of the justices expressed views that run counter to the rationale used in recent pension reform legislation for certain city and state plans,” Moody’s said. “We therefore perceive increased risk that the Illinois Supreme Court will rule the pension reform legislation unconstitutional, which would jeopardize $32.7 billion of pension liability reduction.”
WSJ: The Teachers Union With a Math Problem
The National Education Association drew headlines with its call for the resignation of Education Secretary Arne Duncan at its annual gathering in Denver last week. Yet seeking Mr. Duncan’s ouster—he has been deemed too focused on “high-stakes testing”—was just one of 110 “new business items” on the convention agenda.
Like the anti-Duncan measure, many of the items had a fatuous air that suggests why teachers unions are losing favor with parents, Democrats and even many teachers. In fact, much of the new business had nothing to do with schools or teaching.
One resolution approved by the attendees—about 7,000 delegates—called for the NEA to support an International Day of Peace Campaign. Another would have the union “educate its members about the environmental and health effects of shale gas fracking.” New-business items come with cost estimates; the anti-fracking effort will cost $9,750. (Demanding Mr. Duncan’s head came cheap at $2,500.)
Reason: Unemployment Numbers Improve, But Are Still Dreadful for Millennials
A generally encouraging jobs report was released Thursday, inspiring some confidence that the limping economy was recovering. According to Forbes:
The Bureau of Labor Statistics released a surprisingly strong jobs report Thursday morning.
Employers added 288,000 jobs in June, significantly more than the 215,000 economists were anticipating. The unemployment rate, which is drawn from a different survey of households, dropped from 6.3% to 6.1% the lowest rate since September 2008.
Immediately following the news the S&P 500, The Dow Jones Industrial Average and Nasdaq Composite were in the green, continuing positive trends seen leading up to the pre-bell release. The Dow crossed 17,000 for the first time ever seconds after the opening bell before settling around 17,050.
CARTOON OF THE DAY
