Wonkbook: How Labor lost in Tennessee

February 17

Welcome to Wonkbook, Wonkblog’s morning policy news primer by Evan Soltas. To subscribe by e-mail, click here. Send comments, criticism, or ideas to Wonkbook at Washpost dot com. To read more by the Wonkblog team, click here.

Wonkbook's Number of the Day: 626-712. That was the vote that stopped unionization of a Volkwagen plant in Tennessee, a severe defeat for labor unions.

Wonkbook's Graph of the Day: The long decline of the union in America.

Wonkbook's Top 5 Stories: (1) a very costly loss for Labor; (2) U.S. economy says "Brr"; (3) bigotry and the bench; (4) here comes the second-term climate agenda; and (5) the struggles of the health care policy debate.

1. Top story: How Labor lost in Tennessee

Auto union loses historic election at Volkswagen plant in Tennessee. "The United Auto Workers was dealt a stinging defeat tonight, with a majority of employees at a Volkswagen plant here voting against joining the union after a high-profile opposition campaign led by Republican politicians and outside political groups. Company and union executives announced the outcome at a news conference at the plant, hours after polls closed. The results, still to be certified by the National Labor Relations Board, were close: With 89 percent participation, 712 workers voted no, and 626 voted yes. The loss came in spite of an unprecedented level of support from the company being organized. Frank Fischer, CEO and chairman of Volkswagen Chattanooga -- who had encouraged the idea of starting a German-style "works council" at the plant, like those in place at Volkswagen's other factories -- even seemed saddened by the outcome." Lydia DePillis in The Washington Post.

Bob Corker's unusual role in the fight with labor. "Sen. Bob Corker (R, Tenn.) says his campaign against unionizing workers at a Volkswagen AG plant was an attempt to prevent his home state from being hurt by a powerful union. Unions say it was an unwanted interference... It potentially represented something larger: another high-profile victory for the GOP and its effort to curtail union activity... Mr. Corker said his stance was driven both by his understanding of the community and his experience on the Senate Banking Committee during the federal bailout of the auto industry. He said he came to feel that the UAW had damaged the industry in Detroit and would have a similar effect in Tennessee." Siobhan Hughes in the Wall Street Journal.

@AlecMacGillis: Let's admit, it's kinda nuts that the "future of organized labor" rode on an election w/ as many voters as a small-town mayoral race.

Now, this is a precedent. "'I don’t see how the UAW recovers from this in the southern plants,' [labor historian Erik Loomis] said. 'The failures to organize the auto plants in Kentucky and Tennessee in the ’90s were pretty devastating, but this might be even more so because it demonstrates fairly strongly that workers simply aren’t going to join the UAW under even the most favorable organizing circumstances. And I absolutely think Republican state politicians will see this as a precedent.'" Ned Resnikoff in MSBNC.

Labor's defeat has its leaders thinking inward. "Labor leaders are gathering in Houston this week to plot out their strategy for the year, but much of their focus will be almost 700 miles away, in Chattanooga, Tenn., where workers on Friday rejected the United Auto Workers attempt to organize under the union's label at a Volkswagen plant... The question is how labor will wage that fight. Some organized labor experts and affiliates say an important part of the unions' strategy will be deciding how it can counter the outside forces with some political clout of its own in the South — and whether it needs to make those political inroads before it undertakes new major organizing attempts." Melanie Trottman in the Wall Street Journal.

@mattyglesias: Per @ModeledBehavior, seems like this would be a smart time for Bob Corker to push to legalize non-union works councils.

The two-wage-tier system is ending traditionally high pay in the auto industry. "Data from the US Bureau of Labor Statistics show that average hourly wages for auto industry production-line workers were $28.06 in December – down 6 per cent from their $29.96 peak in February 2008...The growing number of such lower-paid workers in the industry means that, despite the industry’s robust recovery in the US – consumers are expected to buy 16m vehicles this year compared with 10m in 2009, average wages are likely to keep falling." Robert Wright in the Financial Times.

In a car industry that's ever less unionized, what's the future of the UAW? "The ballot was 'a matter of life and death' for the union, Nelson Lichtenstein, director of the centre for the study of work, labour and democracy at the University of California, Santa Barbara, told the Financial Times in October. If the union could not organise workers in such non-unionised, foreign-owned factories – which account for a growing number of jobs in the US car industry – the industry would have effectively a 'non-union pay structure,' Prof Lichtenstein said...In the defeat’s immediate aftermath, union officials criticised the interference from outside conservative lobbyists and politicians in the vote. But the longer-term issue for the union may be a practical one: it was unable to persuade workers that they would be better off with union membership than without." Robert Wright in the Financial Times.

KAHLENBERG AND MARVIT: Want to realize the Civil Rights Act's dream? Then apply it to unions, too. "While it used to be unacceptable to fire based on union participation, and acceptable to fire based on race, today, employers are reluctant to openly discriminate based on race, given the social stigma and legal sanctions associated with violating the Civil Rights Act. But firms routinely discriminate against people trying to form a union, and few people outside the labor movement raise concerns when individuals are illegally terminated. This rise in union discrimination and decline in union membership hurts all workers, but it hurts African American workers disproportionately. At the precise historical moment when blatant racial discrimination began to wane, black workers began to lose what had been for white workers a key ladder enabling social mobility: access to a union job with good wages." Richard D. Kahlenberg and Moshe Z. Marvit in the New Republic.

DIONNE: Why the right should love increasing the minimum wage. "There is a magnificent public policy that achieves many of the goals conservative politicians regularly extol. These include promoting work over dependency, reducing the cost of social welfare programs, fostering economic growth and strengthening families. The policy in question is raising the minimum wage. The only mystery is why so few conservative politicians see the issue this way." E. J. Dionne in The Washington Post.

Music recommendations interlude: Kishi Bashi, "Bright Whites," 2011.

Top opinion

SUMMERS: America is going "Downton Abbey." "Given the widespread frustration with stagnant incomes, and an increasing body of evidence suggesting that the worst-off have few opportunities to improve their lot, demands for action are hardly unreasonable. The challenge is knowing what to do. If income could be redistributed without damping economic growth, there would be a compelling case for reducing incomes at the top and transferring the proceeds to those in the middle and at the bottom. Unfortunately this is not the case...It is not enough to identify policies that reduce inequality. To be effective they must also raise the incomes of the middle class and the poor. Tax reform has a major role to play...[A] host of policies favour the rich, such as the capital gains exemption, the ability to defer tax on unrealised capital gains, and the fact that gains on assets passed on at death are not taxed at all. Similarly, the corporate tax system allows value to flow through it like a sieve...The estate tax can be more or less avoided with sophisticated planning." Lawrence Summers in the Financial Times.

MANKIW: Yes, the wealthy can be deserving. "A typical chief executive is overseeing billions of dollars of shareholder wealth as well as thousands of employees. The value of making the right decisions is tremendous...A similar case is the finance industry, where many hefty compensation packages can be found. There is no doubt that this sector plays a crucial economic role. Those who work in banking, venture capital and other financial firms are in charge of allocating the economy’s investment resources. They decide, in a decentralized and competitive way, which companies and industries will shrink and which will grow. It makes sense that a nation would allocate many of its most talented and thus highly compensated individuals to the task." N. Gregory Mankiw in the New York Times.

KRUGMAN: Barons of broadband. "The big concern about making Comcast even bigger isn’t reduced competition for customers in local markets — for one thing, there’s hardly any effective competition at that level anyway. It is that Comcast would have even more power than it already does to dictate terms to the providers of content for its digital pipes — and that its ability to drive tough deals upstream would make it even harder for potential downstream rivals to challenge its local monopolies." Paul Krugman in the New York Times.

BERNSTEIN: Before blaming the robots, get the policy right. "With constant output growth, more efficient production (faster productivity growth) means fewer jobs, which is pretty commonsense: If we can produce the same output in fewer hours, we need less work to hold steady. But of course output has been anything but constant. The intervening variable, which has always glued those two lines together, is greater demand for the additional goods and services we can produce by dint of our increasing productivity. The fact that more efficient production typically lowers prices is a key part of the demand boost. Therefore, the first thing your average macroeconomist would think when looking toward the end of the figure above is not 'robots!' It’s 'weak growth!'" Jared Bernstein in the New York Times.

ROSS AND ZIMMERMAN: Real discipline in school. "[T]oo many schools still use severe and ineffective practices to address student misbehavior. Large numbers of students are kicked out, typically for nonviolent offenses, and suspensions have become the go-to response for even minor misbehavior...Rather than teaching kids a lesson, these practices increase dropout rates and arrest rates — with severe social and economic consequences. They also disproportionately affect students of color and students with learning disabilities." Robert K. Ross and Kenneth H. Zimmerman in the New York Times.

KRISTOF: Professors, we need you! "[T]here are, I think, fewer public intellectuals on American university campuses today than a generation ago. A basic challenge is that Ph.D. programs have fostered a culture that glorifies arcane unintelligibility while disdaining impact and audience. This culture of exclusivity is then transmitted to the next generation through the publish-or-perish tenure process. Rebels are too often crushed or driven away." Nicholas Kristof in the New York Times.

ROBIN: Look who Nick Kristof's saving now. "The problem here isn’t that typically American conceit of 'culture' v. nonconformist rebel. It’s the very material pressures and constraints young academics face, long before tenure. It’s the job market. It’s the rise of adjuncts. It’s neoliberalism. Jacoby understood the material sources of the problem he diagnosed. Kristof doesn’t." Corey Robin on his blog.

Today in astroturf lobbies interlude: Group tries to slow federal government’s move away from paper to the Web.

2. You can hear the U.S. economy say "Brr"

U.S. industrial output slid 0.3 percent in icy winter. "The nation's industrial output is the latest economic measure to skid off course this winter. Unusually cold weather in January chilled factories' output and froze up some mining operations but boosted utility consumption as Americans huddled for warmth...It was the first decline for the reading since July. The unexpected drop was "partly because of the severe weather that curtailed production in some regions of the country," the central bank said. Manufacturing output, the largest component of industrial production, fell 0.8% in January" Eric Morath in the Wall Street Journal.

Winter's not just cold and snowy. It's expensive. "The mighty $16 trillion American economy can easily shrug off a snowstorm or two, even in regions unaccustomed to wintry snow and ice. But a prolonged bout of unusual weather is taking a toll, especially on small businesses like Abbadabba’s, a shoe store chain in Atlanta, which has weathered two major storms this year...Many weather effects are either transient (a snowstorm may keep you from the car dealership for a day or two, but it probably won’t cancel your plans to buy a car) or self-balancing (a hardware store may sell less paint and drywall but more shovels and salt). If a factory shuts down for a couple of days, chances are it will simply fill its orders a little later. But in some industries, losses cannot be made up so easily. A restaurant forced to shutter on a Tuesday is not going to sell twice as many burgers on Wednesday." Shaila Dewan in the New York Times.

Winter is also breaking some state budgets. "The exceptionally cold and stormy winter battering the Midwest, South and Northeast has forced cities and states to put road crews on double shifts and step up purchases of asphalt, trying to keep up with an epidemic of potholes. They have also bought and spread so much salt that there is a shortage in the Mid-Atlantic States, with more storms expected. With revenues and staffing still below pre-recession levels, many local and state governments face a new financial strain from storm-related increases in spending on overtime pay, contractors and supplies." Jesse McKinley and Richard Perez-Pena in the New York Times.

How workers respond to changes in state minimum wages. "Their experiences underscore what many proponents of raising the wage assert: that even seemingly small increases in pay can galvanize people’s lives, allowing workers to quit second jobs, buy cars or take vacations. And while some business owners along the border said raising the minimum wage could keep them from adding extra employees, they also said larger economic forces were more important. For example, minimum-wage service jobs in stores, restaurants and motels have boomed on the Oregon side, despite its higher rate, mostly because Oregon has no sales tax. The competition for workers has in turn forced many businesses on the Idaho side to raise their wages." Kirk Johnson in the New York Times.

U.S. issues guidelines for weed banking. "The Obama administration on Friday issued guidelines intended to give banks confidence that they will not be punished if they provide services to legitimate marijuana businesses in states that have legalized the medical or recreational use of the drug, even though it remains illicit under federal law. The guidance, which requires banks to vigorously monitor their marijuana-industry customers, was provided by the Treasury Department and the Justice Department in separate advisories. The policy does not grant immunity from prosecution or civil penalties to banks that serve legal marijuana businesses. But it directs prosecutors and regulators to give priority to cases only where financial institutions have failed to adhere to the guidance." Serge F. Kovaleski in the New York Times.

Yellen's husband Akerlof resigns role. "The husband of Federal Reserve Chairwoman Janet Yellen has resigned from the board of an academic center funded by UBS AG, days after The Wall Street Journal reported that some experts regarded his unpaid board seat there as representing a conflict of interest... 'My service on this board is wholly academic in nature and is uncompensated,' Mr. Akerlof wrote in an email to the Journal. 'There is no actual conflict of interest. However, to avoid even the appearance of a conflict, I have stepped down from the academic advisory board.'" John Letzing in the Wall Street Journal.

Well, this is just impossibly cute interlude: Adorable puppies.

3. "If judges rule against same-sex marriage their grandchildren will regard them as bigots"

A steady path to the Supreme Court as gay marriage gains momentum in the states. "A sweeping decision on Thursday night struck down Virginia’s ban on same-sex marriage and continued a remarkable winning streak for gay rights advocates, putting new pressure on the Supreme Court to decide the momentous question it ducked last summer: whether there is a constitutional right to same-sex marriage. Since June, when the Supreme Court ruled that same-sex couples are entitled to equal treatment in at least some settings, federal judges in Oklahoma, Utah and Virginia have struck down laws barring same-sex marriages. In state legislatures and state courts, too, supporters of same-sex marriage have been winning." Adam Liptak in the New York Times.

In Kansas, right joins left to halt anti-gay bill. "A bill that would have allowed individuals to refuse to provide business services to same-sex couples in Kansas because of religious beliefs met a surprising and quick end last week when conservative senators sided with liberal advocates in saying that the measure promoted discrimination...Susan Wagle, a conservative Republican who is president of the Kansas Senate, raised opposition to the House measure, saying she had 'grown concerned about the practical impact of the bill” and “my members don’t condone discrimination.'" John Eligon in the New York Times.

A question of where protesters take a stand. "The whole city block on which the Supreme Court sits is off-limits to protesters, save for the sidewalks that ring it...But the restrictions on protests at the Supreme Court are under legal attack all over the city, following a decision last June by a federal judge that the 1949 statute went too far...Washington attorney Jeffrey Light has challenged the restrictions on behalf of Occupy DC protesters who were arrested at the Supreme Court and has brought a lawsuit against the regulation prohibiting protests that Chief Justice John G. Roberts Jr. approved after Howell’s decision." Robert Barnes in The Washington Post.

Justice Department defends its conduct on evidence. "The Justice Department has told a federal judge in Oregon that it did not engage in misconduct when prosecutors failed to tell a defendant that he faced evidence derived from warrantless wiretapping before his trial last year on terrorism-related charges. In a brief filed late Thursday, the department also denied that it misled the Supreme Court in 2012 during a high-profile case challenging the constitutionality of the FISA Amendments Act of 2008, the law that authorizes the National Security Agency’s warrantless wiretapping program." Charlie Savage in the New York Times.

This is your captain speaking interlude: Prepare for a bumpy landing.

4. Here comes the second-term climate agenda

Kerry begins climate blitz. "Secretary of State John Kerry will begin a series of speeches on Sunday that will call on the world to tackle climate change. The blitz will begin in Jakarta, Indonesia, where Kerry will give the 'first in a series of speeches on climate change this year,' according to a State Department official. Kerry will lay out the 'compelling and undeniable scientific case' of the growing climate change challenge that is 'pushing the planet towards a tipping point of no return,' the official said. Kerry will highlight the impacts of climate change on Asia specifically during his remarks, which will be broadcast via lifestream across Indonesia." Laura Barron-Lopez in The Hill.

Obama launches climate change fund. "President Obama announced a new climate change 'resiliency fund' in a Friday night speech in drought-struck California. The fund, which would need to be approved by Congress, is intended to help communities dealing with negative weather like drought, wildfires, and floods that are the result of climate change. Obama picked the trip to California to announce the fund proposal, which is to be included in his budget. California is experiencing a drought that is threatening its agriculture producers and has led Gov. Jerry Brown to call on people to conserve water." Laura Barron-Lopez in The Hill.

Some scientists disagree with linking drought to global warming. "In delivering aid to drought-stricken California last week, President Obama and his aides cited the state as an example of what could be in store for much of the rest of the country as human-caused climate change intensifies. But in doing so, they were pushing at the boundaries of scientific knowledge about the relationship between climate change and drought. While a trend of increasing drought that may be linked to global warming has been documented in some regions, including parts of the Mediterranean and in the Southwestern United States, there is no scientific consensus yet that it is a worldwide phenomenon. Nor is there definitive evidence that it is causing California’s problems." Justin Gillis in the New York Times.

How new tech could help drought-stricken farmers. "The giant solar receiver installed on a wheat field here in California’s agricultural heartland slowly rotates to track the sun and capture its energy. The 377-foot array, however, does not generate electricity but instead creates heat used to desalinate water. It is part of a project developed by a San Francisco area start-up called WaterFX that is tapping an abundant, if contaminated, resource in this parched region: the billions of gallons of water that lie just below the surface. Financed by the Panoche Water District with state funds, the $1 million solar thermal desalinization plant is removing impurities from drainage water at half the cost of traditional desalinization, according to Aaron Mandell, a founder of WaterFX.Todd Woody in the New York Times.

Olympics interlude: What the heck is curling, anyway?

5. The frustrations of debating health care policy

In debate over health care, 'real people' become human volleyballs. "The 'real people' political prop is a durable ingredient in politics, first popularized at the State of the Union address when Ronald Reagan invited Lenny Skutnik, who had dived into the icy Potomac River to rescue victims of a plane crash, to serve as an example of Everyman heroism. It is a trope that every president since has used. But with the continuing fight over the Affordable Care Act, it has become a blood sport for both parties. Every real face is fact-checked, every perceived distortion attacked. And real people have been caught in the crossfire." Jonathan Weisman in the New York Times.

The political terms of argument over Obamacare in 2016: Mend it or end it. "As Democrats approach the 2014 midterm elections, they are grappling with an awkward reality: Their president’s health care law — passed almost entirely by Democrats — remains a political liability in many states, threatening their ability to hold on to seats in the Senate and the House. As a result, party leaders have decided on an aggressive new strategy to address the widespread unease with the health care law, urging Democratic candidates to talk openly about the law’s problems while also offering their own prescriptions to fix them." Ashley Parker in the New York Times.

Amazing interlude: Where would 8.8 million displaced Syrians fit?

Wonkblog Roundup

The 21st century belongs to soybeansLydia DePillis.

Obamacare’s sign-up period is ending. Here’s how Enroll America is getting readySarah Kliff.

Happy #healthpolicyvalentines daySarah Kliff.

When squirrels attack! There’s a medical code for thatSarah Kliff.

Fewer Americans are celebrating Valentine’s Day. But don’t blame the economyAmrita Jayakumar.

Auto union loses historic election at Volkswagen plant in TennesseeLydia DePillis.

Et Cetera

For more than 25 years, it’s never been the right time for immigration reformDavid Nakamura in The Washington Post.

Eavesdropping ensnares U.S. law firmJames Risen and Laura Poitras in the New York Times.

For Democrats looking to post-Obama era, how populist a futureDan Balz and Philip Rucker in The Washington Post.

Got tips, additions, or comments? E-mail us.

Wonkbook is produced with help from Michelle Williams.

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Lydia DePillis · February 17