The American Prospect #319

DAVID DAYEN: MUSIC AND MONOPOLIES

HAROLD MEYERSON: ECONOMISTS AND INEQUALITY

I D E A S, P O L I T I C S & P O W E R

SUN, WIND & WATER BUILDING A GREEN ECONOMY Gabrielle Gurley • Brittany Gibson • Joan Fitzgerald

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WOMEN IN LAW The late Justice’s last book is the curation of her own legacy, tracing her life’s work for gender equality and a “more perfect Union” “Every word Ruth Bader Ginsburg left us is precious, and this book is a treasure trove. Don’t live your days without it.”

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Celebrates the first wave of trailblazing female law professors and the stage they set for American democracy “Herma has a quality that cannot be conveyed in words. . . . Something that magically makes you want to be on her side.”

—Ruth Bader Ginsburg, from the Foreword

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contents

VOLUME 32, NUMBER 2 MA R /A PR 2021 PAGE 6

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COLUMNS 4 PROSPECTS WILL BIDEN BE RADICAL ENOUGH? BY ROBERT KUTTNER

NOTEBOOK 6 A YEAR OF BORDER LOCKDOWN, AND COUNTING BY MARCIA BROWN 9 WORKERS MAKING COVID TEST KITS EXPOSED TO COVID BY LUIS FELIZ LEON

SUN, WIND & WATER

SUN, WIND & WATER 12 SOMETHING IN THE WATER BY GABRIELLE GURLEY 18 THE PROMISE OF OFFSHORE WIND BY BRITTANY GIBSON 23 THE CASE FOR TAKING BACK SOLAR BY JOAN FITZGERALD

FEATURES 28 ISLANDS IN THE STREAM BY DAVID DAYEN MUSICIANS ARE IN PERIL, AT THE MERCY OF GIANT MONOPOLIES THAT PROFIT OFF THEIR WORK. 40 THE BERKELEY SCHOOL BY HAROLD MEYERSON IN RECENT YEARS, ECONOMICS HAS GROWN MORE CONCERNED ABOUT INEQUALITY AND HOW TO FIX IT. THE INSTIGATORS OF THIS EPOCHAL PROGRESSIVE SHIFT PLY THEIR TRADE AT UC BERKELEY. 48 DOWN AND OUT IN EVICTION COURT BY BOB IVRY DESPITE THE PANDEMIC, EVICTION FILINGS AND PROCEEDINGS CONTINUE. PHILADELPHIA HAS FOUND A BETTER WAY—FOR NOW.

CULTURE 55 IN BEZOSWORLD BY ALEXANDER SAMMON 59 CHANGE OUR MINDS, CHANGE THE WORLD BY ZEPHYR TEACHOUT 62 RECONCEIVING THE AMERICAN FUTURE BY CHRISTOPHER JENCKS 64 PARTING SHOT AMAZON HAS A GOOD JOB FOR YOU BY MATT LUBCHANSKY

SUN, WIND & WATE

Cover art by Christiane Grauert

1

from the Editor

W

e are finally on the downslope of one of the worst public-health crises in American history. More than half a million of our fellow citizens are dead.

Too much had to go wrong for that much tragedy to ensue. But amid all that, we reconnected with a long-forgotten precept that government has the power to be a force for good in people’s lives.

It was government that devoted trillions of dollars to arrest the economic fallout from the lockdowns and the inability to congregate. The last couple trillion, in President Biden’s American Rescue Plan, leverages fiscal action to create a much speedier economic recovery than we’ve endured in the past, and establishes the principle that poor and middle-class families deserve help raising their children. The government, through direct grants, purchase guarantees, and interventions to support supply chains, brought a vaccine for COVID-19 from development into people’s arms in less than a year. After the Trump administration left distribution to the states, with predictably incoherent consequences, government under Biden stepped in, and the accelerated rollout is on pace to return us to normalcy by the summer.

In all of these things, government had to lead, and drive policy goals forward through active management, not reliant on the whims of the free market. And that makes the crisis a well-timed test run for another looming crisis: the imminent boiling of our planet.

In our cover package, we look at how supporting the transition to renewable energy and safe and durable infrastructure will need government in a lead role. joan fitzgerald lays out what we can do to support domestic solar manufacturing, which would not only reduce dependence on China but also increase reliability and efficiency. Hand in hand with that is making the transition pay economic dividends by boosting good-paying jobs at home, and brittany gibson looks at how that’s playing out in the offshore wind space.

Finally, these are government functions, and they need to stay with government. gabrielle gurley reports on a fight in Chester, Pennsylvania, over the privatization of water to make that point. If we follow the model that has dug us out of the pandemic, we can fend off the worst that faces us in the climate crisis, and build broad prosperity simultaneously. bob kuttner notes that these interventions have worked before, in the New Deal era, to improve the lot of labor, roll back the dominance of finance, and foreground opportunity for the next generation to go further than the previous one. Rethinking the role of government is also the subject of a review from zephyr teachout, where she sketches out a vision of a mission-driven public sector, unencumbered by the deeply embedded concept that improving the fortunes of Black people in society diminishes whites. And harold meyerson shows how revolutions in the purpose and power of government can start in the academy, and have, in a place known as a hotbed for revolution, the University of California at Berkeley.

Americans are still paying the price for those areas in which government has been either too inattentive or too captured to act. bob ivry gives us a taste of this by visiting eviction court, and seeing the stacked deck tenants face when fighting the loss of their shelter. luis feliz leon shows how a manufacturing plant in New Jersey operates with such poor conditions that workers making COVID test kits keep contracting COVID. marcia brown highlights an obscure health order being used by both the Trump and Biden administrations to keep out asylum seekers fleeing repression. alex sammon sees these failures of government action coming together to facilitate systemic abuses from one of the world’s most dominant corporations, Amazon.

My piece for this issue brings this analysis to the music industry, where overbearing monopolies at every turn extract the value of artist creativity and personal expression.

Public support for the arts is a missing ingredient in ensuring a vibrant culture. And maybe we’re learning that these kinds of public interventions are foundational to support a healthy, thriving, and free society. –david dayen One of the Prospect’s most generous and long-standing benefactors, Alan Dworsky, died in January at the age of 90. Alan had two careers, first as an architect and then as a money manager for endowments and foundations. Through his charitable giving, Alan supported social-justice organizations. His other passion and charity was supporting choral music, which he viewed as the most democratic art form. He was a lovely man, and a deeply principled citizen.

2 PROSPECT.ORG MAR /APR 2021

EXECUTIVE EDITOR DAVID DAYEN FOUNDING CO-EDITORS ROBERT KUTTNER, PAUL STARR CO-FOUNDER ROBERT B. REICH EDITOR AT LARGE HAROLD MEYERSON DEPUTY EDITOR GABRIELLE GURLEY ART DIRECTOR JANDOS ROTHSTEIN MANAGING EDITOR JONATHAN GUYER ASSOCIATE EDITOR SUSANNA BEISER STAFF WRITER ALEXANDER SAMMON WRITING FELLOWS MARCIA BROWN, BRITTANY GIBSON EDITORIAL INTERNS JAROD FACUNDO, AMELIA POLLARD, PREM THAKKER CONTRIBUTING EDITORS MARCIA ANGELL, GABRIEL ARANA, DAVID BACON, JAMELLE BOUIE, HEATHER BOUSHEY, JONATHAN COHN, ANN CRITTENDEN, GARRETT EPPS, JEFF FAUX, MICHELLE GOLDBERG, GERSHOM GORENBERG, E.J. GRAFF, BOB HERBERT, ARLIE HOCHSCHILD, CHRISTOPHER JENCKS, JOHN B. JUDIS, RANDALL KENNEDY, BOB MOSER, KAREN PAGET, SARAH POSNER, JEDEDIAH PURDY, ROBERT D. PUTNAM, RICHARD ROTHSTEIN, ADELE M. STAN, DEBORAH A. STONE, MICHAEL TOMASKY, PAUL WALDMAN, SAM WANG, WILLIAM JULIUS WILSON, MATTHEW YGLESIAS, JULIAN ZELIZER PUBLISHER ELLEN J. MEANY PR DIRECTOR ANNA GRAIZBORD CONTROLLER SALLY FREEMAN COMMUNICATIONS SPECIALIST STEPHEN WHITESIDE BOARD OF DIRECTORS MEHRSA BARADARAN, DAAIYAH BILAL-THREATS, CHUCK COLLINS, DAVID DAYEN, STANLEY B. GREENBERG, JACOB S. HACKER, AMY HANAUER, DERRICK JACKSON, ROBERT KUTTNER, ELLEN J. MEANY, MILES RAPOPORT, JANET SHENK, ADELE SIMMONS, GANESH SITARAMAN, WILLIAM SPRIGGS, PAUL STARR, MICHAEL STERN SUBSCRIPTION CUSTOMER SERVICE STEPHEN WHITESIDE, 202-753-0937, INFO@PROSPECT.ORG PRINT SUBSCRIPTION RATES $36 (U.S.), $42 (CANADA), AND $48 (OTHER INTERNATIONAL) REPRINTS PROSPECT.ORG/PERMISSIONS VOL. 32, NO. 2. The American Prospect (ISSN 10497285) is published bimonthly by The American Prospect, Inc., 1225 Eye Street NW, Ste. 600, Washington, DC 20005. Periodicals-class postage paid at Washington, DC, and additional mailing offices. Copyright © 2021 by The American Prospect, Inc. All rights reserved. No part of this periodical may be reproduced without the consent of The American Prospect, Inc. The American Prospect® is a registered trademark of The American Prospect, Inc. Postmaster: Please send address changes to The American Prospect, 1225 Eye St. NW, Ste. 600, Washington, DC 20005. PRINTED IN THE U.S.A.

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Prospects

Will Biden Be Radical Enough?

ROBERT KUTTNER

W

e can all celebrate President Biden’s first hundred days. His appointments have been mostly better than feared. He is dreaming big on everything from COVID relief and recovery to a large-scale infrastructure program. His $1.9 trillion rescue program achieves goals that have long eluded progressives, most notably a much enlarged temporary child tax credit, which will be difficult to terminate next year once experienced by so many Americans. Activist government is back, and it’s broadly popular. And the deficit hawks have been banished from the temple.

He, and we, also benefit from the kind of splits in the Republican Party of which Democrats only dream. Biden’s program is far more popular with Republican voters than with Republican politicians. Mitch McConnell and Donald Trump are at each other’s throats.

The Republican schisms bode well for 2022. Normally, Democrats would lose seats in a new president’s first midterm.

Another 10 to 15 Democratic House seats are at risk from redistricting. However, this loss could be offset by Republican fratricide. If center-right Republicans in swing districts are ousted in primaries by farright Trumpers, Democrats could pick up those seats.

The amazing on-the-ground efforts of 2017–2018 helped the Democrats pick up 41 House seats in 2018. That upsurge of

4 PROSPECT.ORG MAR /APR 2021

organizing was short-circuited by the pandemic in 2020, while Trump went right on with live, infectious campaigning. But Trump will not be on the ballot in 2022.

With the GOP fractured, Democratic turnout could easily exceed Republican. The Senate also looks good, with more vulnerable Republican seats than Democratic ones. As I reported in a feature piece in our last issue, the Democrats now have a party chair in Jaime Harrison who believes in local partybuilding and long-term organizing, Howard Dean style.

Economic tailwinds, and the massive relief of the pandemic being over, will also help the Democrats hold their own, maybe even make gains. Analysts expect the economy to grow as much as 7 percent this year.

All that said, the challenges go much deeper than Democratic prospects for the midterms. The big risk is that Biden will not be able to transform the American political economy, Roosevelt fashion, in a fashion that transforms life chances for working people. And if that is the case, despite Biden’s popularity the grievances that helped propel the Tea Party and Trump will remain to reinfect the polity.

THE NEW DEAL did three big, extraordinary things. First, it imposed a salutary straitjacket on capital. Second, it empowered labor. And third, it used government in visible and dramatic ways to help regular people.

Due to the historical accident of World War II, the 1940s did even more of this than the 1930s.

By the time war broke out, Roosevelt had pretty well purged abuses from the big banks and brokerage houses. The war buildup required a great deal of public capital, as well as income surtaxes as high as 93 percent on the wealthy. The need for wartime debt financing put speculative capital markets on hold, and pegged interest rates on government bonds. This further tilted the balance against concentrated private wealth.

The war buildup also produced overfull employment.

Wages were controlled, but companies bid for scarce workers with good health and pension benefits. The wartime no-strike pledge required government to redouble its alliance with organized labor. Defense contractors—every large corporation that mattered—were required to recognize unions.

The big wage gains, built on these structural changes, came in the postwar period.

By the time the war ended, the relationship between capital, labor, and government had been transformed. Ordinary people could live a middle-class lifestyle on one income. The power of unions meant that rising productivity translated into regularly rising earnings, well beyond the minimum wage (which was far higher in real terms then than now).

Most jobs were regular payroll jobs. Temp work was rare, and gig work hadn’t been invented.

The tax system remained steeply progressive through the late 1970s. In the three prosperous postwar decades, the distribution of income and wealth became more equal.

Some of the economic security of the working middle class was a one-time happy convergence. Cheap farmland could be converted to affordable housing within commuting distance of large cities. It was possible for people to attend public university for free, without too much toll on the public treasury, because far fewer went to college. Trade was simply not an issue, because there wasn’t much.

Yet attributing the good package of jobs, housing, and education to a one-time lucky convergence of events lets politics off the hook too easily. Much of the postwar social contract was the result of deliberate policies, which in turn transformed power relations. Government intervened on the side of labor, against capital. Speculative transnational movements of money were prohibited. Public universities were tuition-free as a matter of state policy. The GI Bill even paid living stipends as well as covering college tuition, public or private. Those interventions were not happy accidents. They reflected a profound power shift.

This basic social compact continued through the 1970s, when the combination of stagflation, globalization, and the resurgence of corporate power set in motion its reversal. The erosion became more explicit

Prospects

with the advent of Reaganism, and then with the Democratic me-too embrace of a lot of the neoliberal formula.

A shift back to the power relations of the era that spanned FDR through Johnson will require a transformation as revolutionary as that of the New Deal, in far less auspicious circumstances. Prospect co-editor Paul Starr has given us the concept of entrenchment—the tendency of politics and policies to be self-reinforcing. The New Deal revolution stayed entrenched for more than a generation. It changed norms as well as laws, reinforcing the entrenchment. But now the Reagan Revolution has been entrenched for longer than FDR’s, with aid and comfort from Wall Street Democrats.

And it will be a bear to reverse.

BIDEN, MERCIFULLY, has broken with many of the neoliberal shibboleths that characterized the Clinton and Obama presidencies. He supports massive public investment, and rethinking orthodox trade and fiscal policy. That’s a promising start.

But what would Biden’s administration have to do in order to restore anything like the Roosevelt-Johnson era’s distribution of income, wealth, power, and life chances? The grotesque inequality and insecurity of today’s economy operates at both the bottom and the top. Let’s start with the liberation of capital.

The wreckage of the New Deal regulatory model has allowed the hyperconcentration of finance, with proliferation of business models such as hedge funds and private equity that do little to help the real economy but allow astronomical incomes at the top as well as intensified turbulence for ordinary companies and workers. The financial collapse provided both a reason and an occasion for the Obama administration to perform

Roosevelt-style surgery on Wall Street. But Obama’s team settled for tinkering around the edges. High incomes are more highly concentrated than ever.

Another source of grotesque income concentration is the evisceration of antitrust. Many of the world’s wealthiest people are tech monopolists.

Getting serious about competition policy is necessary to moderate these supernormal profits.

The abuse of patent, trademark, and copyright laws also promotes income extremes at the top, most dramatically in pharma and tech but elsewhere as well.

To seriously undertake these reforms, Biden would need to declare war on the excesses of concentrated capital, much as FDR did. But despite the COVID economic crisis, Biden doesn’t have Roosevelt’s sort of national emergency or Roosevelt’s large working majority in Congress. And he is chummier with Wall Street donors than Roosevelt was. He doesn’t welcome their hatred.

Biden is spending money to combat the crisis, but is not shaking the dominance of capital. These opportunities to drastically constrain the excesses of capitalism come once or twice in a century. FDR met his rendezvous with destiny. Obama missed his.

There is a similar story at the middle and bottom of the income scale. To restore anything like the living standards and life prospects for ordinary people of the postwar boom, government would need to radically intervene on the side of labor, starting with the labor movement. John L. Lewis could say, with only slight poetic license, “President Roosevelt wants you to join the union.”

Biden finally got around to saying that, indirectly, he supports the organizing drive at an Amazon warehouse in Alabama. He needs to go further.

A $15 minimum wage, still a long shot, is a bare beginning.

Given the cost of living, it should be at least $20. Beyond that, government policy should make it illegal or at least uneconomic for corporations to convert payroll jobs to gigs. And government would need to supplement all that with massive job creation at good wages, such as making every human-service job a middle-class profession, as well as income supports. The good news is that the pandemic’s emergency measures took some steps toward a universal basic income, and opened the door to bolder experimentation, one of Roosevelt’s favorite concepts.

Lasting gains on the worker income and security front will require a massive revival of the labor movement. Strong unions are a direct source of worker power. They are a constituency for a progressive, worker-focused Democratic Party; and a source of worker education about how capitalism really works, and thus a partial inoculation against the false allure of Trumpism. Even with a supportive Biden administration, building back labor will be trench warfare.

HERE IS THE practical litmus: How much would have to change about the workaday economy and government’s role in it for Trump voters to give progressive populism a second look? One would have to be a giddy optimist to expect a Rooseveltian transformation by 2022 or 2024. But perhaps some plausible steps in that direction can give voters confidence that more are on the way?

On top of all this is the challenge of race. The New Deal social contract, disgracefully, could get the necessary legislative support of Dixiecrats who controlled key congressional committees only by doubling down on Jim Crow. The New Deal not only denied nearly all Blacks the protections of Social Security and the Wagner Act, by excluding such occupations as farmworker and domestic

worker. It deliberately introduced racial segregation to places that had been integrated in the North, via racially separate public housing and racially restricted covenants mandated by the Federal Housing Administration.

Today, the long-deferred demand for racial justice is due and payable. So Biden will not only need to take radical steps to rebalance labor, capital, and government. He will need to succeed in a project whose success eluded Abraham Lincoln and Lyndon Johnson—creating a durable transracial political coalition. Heather McGhee’s superb new book, The Sum of Us, reviewed in these pages, points to a hopeful if paradoxical strategy of anti-racism as coalition: to remind whites of all the ways that racism hurts them too, by denying them policies of common class uplift.

If that strategy could ever succeed, Trumpism is finished.

But for it to prevail, the other economic transformations must prevail as well. In short, to succeed as a liberal, Biden must govern as a radical.

The campaigns of Bernie Sanders and Elizabeth Warren gave us a taste of what progressive populism looks like.

In 2016, Sanders did succeed in peeling off some voters who eventually defected to Trump.

Biden is not Sanders. Neither, of course, is Biden FDR. However, even FDR, who began as an advocate of budget balance, got radicalized in office.

To some extent, events make the president. One has to hope that pressure from the party left, combined with the political logic of the situation and Biden’s own growing boldness, will keep pushing his administration deeper in the direction of progressive populism.

Even so, just about everything will have to break right— in a fateful race between a radically transformed economy and the next incarnation of Donald Trump. n

MAR /APR 2021 THE AMERICAN PROSPECT 5

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A Year of Border Lockdown, and Counting How Biden is defending a Trump-era immigration policy

BY M A R C I A BR O W N IN MARCH 2020, AS the pandemic raged around the world, America closed its doors. The Trump administration used a 1940s public-health ordinance to turn away virtually all immigrants, even blocking wouldbe asylum seekers that international law requires the U.S. to admit. Even Trump’s meager and unnecessarily cruel immigration entry policies were shut down by this order. Nearly all metering lists, which limit the number of people who can request asylum per day at a port of entry, were shut down. Few were added to the “Remain in Mexico,” or MPP, program, which required asylum seekers to wait in Mexico for their asylum hearing.

One year later, the Biden administration is peeling back the layers that block asylum. Biden in January stopped all additions to the MPP program. In February, he began to slowly process and admit at least 29,000 asylum seekers with open cases in the Remain in Mexico program. But President Biden has left that key Trump border closure policy in place.

Its endurance means that there is still virtually no asylum at the border for anyone who has arrived since March 2020.

The Centers for Disease Control and Prevention (CDC) order Trump invoked, known as Title 42 after the section of U.S. Code dealing with public health, allows for temporary entry suspensions, which U.S. Customs and Border Protection (CBP) has used to expel any migrant, without screening for human trafficking or fear of return. An agreement with Mexico’s government allows the U.S. to expel Mexicans and Central Americans across the border, but other nationals are immediately deported to their country of origin. Those with humanitarian visas or residency in Mexico are also sent to Mexico.

Combined with the Remain in Mexico program, this led to thousands of migrants waiting at the border throughout 2020. Human Rights First tracked at least 816 reports of

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murder, torture, rape, kidnapping, and other violent attacks on migrants and asylum seekers returned to Mexico in MPP’s first year.

Biden has kept the Title 42 order in place. CBP recorded more than 400,000 Title 42 expulsions in fiscal year 2020. To date, CBP has carried out nearly 300,000 expulsions in fiscal year 2021, which began October 1, 2020. The data does not disaggregate recidivism, but immigration advocates say that many of these expulsions are people who, in desperation, try to cross repeatedly. Most people expelled are single adult men, but some are families, too.

Some of the deportation flights carried out by the new administration have also included those expelled under Title 42. Although not everyone attempting to cross the border is an asylum seeker, for those who are seeking protection, the Title 42 ban is creating desperation—with no end in sight.

“There is no right to seek asylum.

There is no process to seek asylum for anybody who doesn’t have an open MPP case,” said Alex Mensing, an organizer with Pueblos Sin Fronteras, a human rights group. “The only information is ‘Wait.’ That’s the only message and that’s just not good enough for people who have been waiting in really horrible conditions for years.”

Most public-health experts say that Title 42 is a bogus health order that does little to stop the spread of COVID-19. While asylum seekers are expelled and deported at the border, millions of Americans have been able to cross into other countries and back freely. Even CDC officials have long objected to the policy. One former CDC official told CBS News, “We were forced to do it.” The Associated Press reported that Vice President Mike Pence overruled a top CDC doctor in order to close the borders.

Since its implementation, advocates have sought to enjoin the policy.

In November 2020, a district court

issued a nationwide order blocking the administration from deporting unaccompanied children under Title 42, but a federal court in January overturned this. Last month, the ACLU of Massachusetts announced a new challenge to the Title 42 ban, arguing that the government’s expulsions did not adhere to U.S. immigration law.

The main difference in Biden’s implementation is that border officials are no longer deporting unaccompanied children under Title 42. That decision, combined with confusion about Biden’s border policies among migrants, has led to a dramatic increase in the number of unaccompanied children taken into custody, transferred to the refugee office, and placed with a sponsor.

In February, shelters received more than 7,000 unaccompanied children, double the number accepted in February 2020.

But this was not what immigrant rights’ advocates and public-health experts sought when Biden took office; they urged a quick reversal of the entire order. A February 2 letter asked Biden to keep his campaign promises and end “inhumane Trump administration border policies.” Public-health experts added to the chorus.

“Our letter really was seeking to pull the fig leaf off of [the publichealth] argument,” said Michele Heisler, medical director for Physicians for Human Rights. “It was always an ideologically oriented, politically motivated effort to deter asylum seekers, against international law, against national law, against our values.”

But in a press briefing on March 1, Homeland Security Secretary Alejandro Mayorkas defended the order. “If families come, if single adults come to the border, we are obligated to, in the service of public health, including the health of the very people who are thinking of coming, to impose the travel restrictions under the CDC’s Title 42 authorities and return them to Mexico,” he said.

A week later, Ambassador Roberta Jacobson, who is the coordinator for the southern border, directly said at a White House press briefing, in

DENISE CATHEY / AP PHOTO

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Spanish, “The border is closed.”

The administration’s public statements on Title 42 have put the administration in the bizarre position of defending a public-health order they know to be bogus. Even their own processing of unaccompanied children and of asylum seekers in the MPP program belies their public-health rationale; those admitted are COVID-19 tested and placed in quarantine if they test positive. (Very few test positive at all.)

Indeed, the Title 42 order appears to be an excuse, an effort to buy the administration time to untangle the web of Trump border restrictions. But it’s also creating the very border chaos Biden has publicly vowed to stop.

THIS IS HARDLY THE first time the U.S. has turned would-be migrants away under a health rationale; migration control policies

date back to before America was a country. The Immigration Act of 1891 banned entry to anyone “suffering from a loathsome or a dangerous contagious disease.” This was a more common scenario at the time. “It was business as usual to have some kind of epidemic,” said David FitzGerald, a professor at the University of California, San Diego, who studies migration controls.

European immigrants traveling by boat in the 19th century experienced medical screening, but the degree of scrutiny varied from steerage to first class. The opening scene of The Godfather Part II depicts a young Don Corleone, fleeing violence in Sicily, forced to quarantine on Ellis Island, a common practice but applied almost exclusively to poor immigrants.

At European ports of departure, FitzGerald explained, even shipping companies hired doctors to

The U.S. is allowing over 29,000 asylum seekers with open cases under the Migrant Protection Protocols to cross the border. But no one new has been added to the program since last March.

examine emigrants before they boarded boats to America, because if someone was turned away at Ellis Island, the shipping company was liable for returning that person to Europe. In some countries, the U.S. government stationed government doctors abroad for health examinations. Using “buffer” countries for screening and quarantine is also a long-standing practice. Some European immigrants arrived via Halifax or Quebec, where they quarantined before entering other parts of Canada or the U.S. But the Title 42 order stands out.

“What’s different about it is the way that it’s been used,” said FitzGerald. “I’m not aware of other precedents of that, the way that asylum seekers have been expelled back into Mexico.”

Immigration rights advocates say that enforcing the Title 42 ban is a violation of non-refoulement, an

MAR /APR 2021 THE AMERICAN PROSPECT 7

international principle of the 1951 U.N. Refugee Convention banning governments from deporting people to countries where they may be persecuted.

“Under the Trump administration, it absolutely was refoulement,” Heisler said. It’s unclear, as of publication, how it’s any different under the Biden administration; in Reynosa, a border city in Mexico, new asylum seekers and migrants are expelled every day and linger in a plaza near the port of entry. Reynosa volunteers who spoke to the Prospect described the situation as cyclical, explaining that they bring food and supplies to new people every day. Nearby migrant shelters are full.

When the order was initially signed, one stated concern of the Trump administration was that migrants would be detained in congregate settings, a petri dish for the spread of COVID-19. But advocates point out that there’s no law requiring the government to detain asylum seekers. The government can parole migrants with a hearing date and connect them with family and sponsors in the U.S. The state of California has budgeted for hotel rooms for asylum seekers admitted in the MPP program to quarantine before traveling to their final destination.

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Advocates are skeptical that the administration can’t do more because of pandemic-related restrictions. “The administration is saying they can’t process a handful of asylum seekers a day at some of the largest ports of entry in the world,” said Kennji Kizuka, a policy analyst for Human Rights First. “Just boggles the mind that they can’t find ways to do that safely.”

Tom Cartwright, a volunteer who tracks deportations for Witness at the Border, said that given Biden’s focus on COVID-19 safety, anything that even looks like it could be a risk will be heavily scrutinized. He added, “I think that there is an innate fear, mostly fueled by the right wing, of a surge, a crisis, all of these inflammatory words about people coming to the border, and that they won’t be able to handle them in a humane way.” Mainstream news outlets have been reporting high numbers of Border Patrol apprehensions, but often leaving out a big part of the story. It’s true there are high numbers of new arrivals at the border, hoping the new administration with more humane rhetoric might allow them to cross, but it’s also true that many of the apprehensions are people who are trying to cross three, four, five times

Migrants gather at the border in Tijuana. The Biden administration’s use of Title 42 is creating an artificial pause in migration.

and are summarily returned.

As of early March, the administration was only processing asylum seekers at three ports of entry at a rate of roughly 25 people per port per day. There are 29,000 open MPP cases that are eligible for admission, according to the administration’s plans for phase one. At this rate, it will take months to process them. Then there are another 40,000 people whose cases have been closed, but for whom the administration has expressed support for allowing to appeal. And these are the historical cases. Since March 2020, only those who cannot be deported under Title 42—mostly individuals whose governments refused to accept deportees—have been added to the MPP program. With no guidelines for those expelled under Title 42, thousands of asylum seekers still on preCOVID metering lists and those who have approached the border since the program’s end are in limbo, with no status, no place in line, and no communication from the administration except to wait without indication of for how long.

On the campaign trail and since the inauguration, Biden has taken pains to emphasize that his immigration policies will be more humane than Trump’s, or even President Obama’s. But his administration has maintained a virtual ban on asylum. The border is still closed, officials say repeatedly.

That message isn’t getting through, however, and new migrants and asylum seekers arrive daily, hoping Biden’s tone might be reflected in his border policies.

Instead, the Title 42 health order appears to be a tool for the Biden administration to create an artificial pause in migration, perhaps to allow for reconstruction of a system dismantled by Trump. But instead of achieving that, the order has contributed to confusion and suffering, forcing migrants back into treacherous Mexican border towns.

The administration has applied a “tourniquet” to the border, said Cartwright. “It has essentially destroyed any ability of migrants to assert their legal right to protection in the United States.” n

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Workers Making COVID Test Kits Exposed to COVID At Access Bio in New Jersey, mostly Latina immigrant temp workers lacking protections on the job face hazardous conditions.

BY L U I S F E L I Z L E O N NEW BRUNSWICK, NEW JERSEY – Late in the afternoon of February 19, more than 50 temporary workers disembarked from 15-passenger vans, bearing signage like “The Beginning Transportation LLC” and “Eagle Cleaning Services.” Clad in heavy layers of clothing, the workers were about to begin their second shift at the Access Bio plant. The facility specializes in producing test kits for COVID-19, malaria, and dengue fever, part of a global supply chain that includes the World Health

Organization, Doctors Without Borders, and the Bill and Melinda Gates Foundation, according to the company’s website.

Workers assemble six-by-six boxes for COVID-19 and antibody tests, pack them with a swab stick, 2.74-gram liquid vials, and instructions. They sit in tight clusters at tables, packaging boxes and placing them on an assembly line to be stacked on pallets for delivery. The repetitive motions are physically exhausting and sometimes require prolonged periods of

Workers inside the Access Bio facility in Plainfield, New Jersey. Managers don’t enforce social distancing, provide staggered breaks, or schedule routine cleaning, workers allege.

standing, resulting in swollen legs and backaches.

As snow wafted gently in the biting winter air, another 50 workers left from Access Bio’s loading dock and boarded the same vans after finishing up their first shift, which runs from 5 a.m. to 3 p.m.

“Either we die of COVID or we die of hunger,” says Karen Romero, who has been driving workers to the biomedical plant for over ten years.

“We all got COVID,” Romero says, her voice muffled by two masks covering her mouth. She points to the passenger seat to illustrate where one worker who got the virus spread it to everyone else in the van in March of last year.

Since then, she’s taken extra precautions. She shows me bottles of Microban sanitizing spray, flasks of sanitizer, and bundles of masks.

Masks were scarce in March, so she keeps a supply in the van’s glove compartment, handing them out to workers if they leave theirs at home.

The vans serve as a perfect vector for the spread of the virus, with people huddled tightly together on halfhour trips between Plainfield and the biomedical plant in New Brunswick.

The round trips cost $6 daily. As we speak, workers are settling their accounts with Romero, who scribbles in a composition notebook, as if running a numbers racket.

“It’s what everybody does. They get sick, and they return,” says a passenger riding in Romero’s van, who asked for anonymity because she’s undocumented. She contracted the virus last year, and returned to work in November. She was unable to collect unemployment insurance or even use three paid sick days she had accrued.

“I like the job,” she says, adding she’d prefer to work permanently at the plant, where she’s been employed off and on as a “temporary” worker for over ten years.

Workers across the country are on the front lines of the pandemic, sacrificing their lives for the safety of others while lacking the most elemental labor protections. For temp workers, with fewer protections than full-time employees, the hazards are even more acute. And the fact that

MAR /APR 2021 THE AMERICAN PROSPECT 9

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making it responsible as an employer along with the temp agency.

The U.S. Occupational Safety and Health Administration (OSHA) is clear in its guidance on joint responsibility for worker health and safety on worksites. But staffing agencies and the companies they contract with dodge them at every turn.

FIRST-SHIFT WORKERS drive off in Romero’s van, and others head for JM Staffing Solution’s office in downtown New Brunswick to collect their weekly paychecks. JM Staffing is one of the temp agencies that employ most of the 200 workers at Access Bio. The line on the sidewalk outside JM Staffing stretches past the T-Mobile store on the corner. Most are Latinas from Central American countries. At first, they are reluctant to speak with a reporter, but when offered anonymity, they open up, using the names of famous telenovela actresses as pseudonyms.

A 23-year-old worker, “Thalía,” says she got the job through her aunt, who has worked at Access Bio for over a decade as a “temp.”

Others complain of plant supervisors preventing them from using the bathroom, shoving them, and screaming at them.

JM Staffing is one of the temp agencies employing most of the 200 workers at Access Bio. Workers here wait for their paychecks.

ON FEBRUARY 9, New Labor, a workers’ rights group, and groups in the Protect NJ Workers Coalition delivered a complaint letter to Access Bio, demanding that management improve health and safety conditions at the plant in response to workers’ complaints. The demonstration quickly grew tense.

The action followed up on a complaint New Labor filed with the state Department of Labor and Workforce Development in December, charging that Access Bio was violating Gov. Phil Murphy’s Executive Order 192, issued last year to mandate workplace health and safety standards during the pandemic.

That complaint was supposed to trigger an investigation by the state Department of Health, followed by sanctions for employers found to be violating the executive order, including even shutting down facilities. But

LUIS FELIZ LEON

workers at Access Bio are producing test kits to keep other people around the world safe from COVID adds a cruel irony.

Workers and advocates allege that the plant doesn’t enforce social distancing, provide staggered breaks, or schedule routine cleaning to disinfect bathrooms and work areas. The temporary employees are left at the mercy of Access Bio supervisors, who ignore their responsibilities for workplace safety and point fingers at the temp agencies.

The workers, caught between this punting, continue to report to work, while Access Bio insulates itself from the consequences for violating labor law, advocates say.

“The ‘triangular’ employment relationship, which means that temp agencies serve as temp workers’ employer even though the onsite or client company supervises and controls most of the working conditions, allows onsite companies to avoid responsibility,” says Laura Padin, a senior staff attorney for the National Employment Law Project. Padin believes Access Bio, which controls virtually every aspect of working conditions—including determining and supervising temp workers’ assignments, hours, and break schedules— should be treated as a joint employer,

“They yell at us in front of everybody,” says another second-shift worker. “They think they are working with animals. They are racist. They are bad.” She adds that it is routine for supervisors to tap workers on the shoulder to signal that they should go home. These summary dismissals occur even after workers have clocked in.

“Who’s going to pick us up?” she asks. The vans don’t return until the end of a given shift.

But she’s remained at Access Bio because, since the pandemic began last March, the work has been steady.

A single mom, she’s endured the mistreatment and disrespect for $12.25 an hour, to support her four children.

Other complaints I hear include management forcing workers to clock in under one name for one shift and under another if they stay on for the next shift, to circumvent the laws requiring overtime pay.

Inside JM Staffing’s office, more than a dozen people crowd the entrance, as agency clerical workers stand maskless behind a plexiglass shield, with signs that read “Face Mask Required Prior to Entry” and “Attention: Please Maintain Social Distance.”

JM Staffing didn’t respond to a request for comment.

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New Labor executive director Louis Kimmel says neither the Health nor Labor Department has the bandwidth to enforce the rules against employers. “Currently, there are around 600 cases that haven’t been resolved,” Kimmel tells me.

Labor Department spokesperson Angela Delli Santi said in a statement that the complaint is currently under investigation, adding that the department “does not comment on pending investigations.”

With government action lagging, New Labor and coalition partners have brought the pressure. At the action, organizers demand that Access Bio enforce social-distancing guidelines, and provide personal protective equipment and COVID-19 testing for workers (the same type of tests made inside the plant).

A Facebook video shows organizers handing a supervisor a copy of Executive Order 192 and the complaint letter.

At one point, a supervisor attempts to slam the door shut as organizers are speaking. Moments later, another supervisor steps in and asks if the organizers have proof of their allegations. They respond that they do.

Photos from inside the plant show workers packed together, much closer than six feet apart, as they enter and exit the facility. They assemble the COVID kits while sitting practically shoulder to shoulder.

The supervisor says he didn’t receive the complaint or notification from the Department of Labor, to which organizers respond that the department tried reaching them via phone multiple times.

After multiple supervisors materialize at the doorway into the plant, talks soon stall, and the police arrive on the scene.

One employee told me that the New Labor action, despite the lack of resolution, had a positive effect.

“Now they are giving us gloves, filling the sanitizer dispensers with liquid,” the employee said. But there’s no guarantee that will continue.

IN JANUARY ALONE, according to the U.S. Bureau of Labor Statistics, temporary jobs rose 80,900 to a total of 2.7 million, highlighting explosive growth.

Temp workers face greater risks that employers will force them into unsafe work conditions.

“Typically, temp work bounces back,” says Heidi Shierholz, senior economist and director of policy at the left-leaning Economic Policy Institute, explaining the typical pattern during recessions. Temp jobs are traditionally the first to go, but also the first to return once the economy improves.

Temp workers have fewer rights on the job, and therefore face greater risks that employers will steal their wages or force them into unsafe work conditions. The arrangement “allows both temp agencies and client companies to degrade workplace standards,” according to Padin, “and create divisions in their workforce, which hurts permanent workers as well.”

David DeSario, director of the national advocacy organization Temp Worker Justice, told me his organization surveyed 500 temp workers nationally during the pandemic, finding that temp workers often must “put their financial needs above their health,” making decisions that put themselves, their families, and their communities in harm’s way. “This is even worse overall for immigrant temp workers,” DeSario added.

The findings from Temp Worker Justice reveal that 90 percent of temp workers lack access to paid sick leave, while 50 percent lack health insurance and expected to lose their job if they quarantined per CDC guidelines of 10 to 14 days.

In 2015, JM Staffing’s predecessor Olympus Management Services was forced to pay back $131,000 in wage theft claims brought by temporary workers at Access Bio and other companies. The owners of the staffing

agency were charged with fraud, money laundering, and tax evasion in an effort to squirrel away more than $30 million in income.

As The Progressive reported, workers protested in June 2020 outside JM Staffing’s office because the agency refused to pay workers for time off due to quarantining at home with the virus, despite federal legislation like the Families First Coronavirus Response Act, requiring them to provide up to two weeks off.

In January, President Joe Biden signed an executive order instructing the Department of Labor to issue guidance that, as a fact sheet states, clarifies: “[W]orkers have a federally guaranteed right to refuse employment that will jeopardize their health and if they do so, they will still qualify for unemployment insurance.”

Kimmel, from New Labor, responds that it’s not enough, as it’s a mere “suggestion and not a mandate.” New Labor and its coalition partners are advocating for a statelevel Bill of Rights for Temp Workers, as part of a Responsible Employer Pact. The proposed Bill of Rights would eliminate the second-class status of temp workers, and require equal pay for equal work, among other protections.

Along with a new executive order with the right to refuse, created in partnership with Protect NJ Workers Coalition, the Responsible Employer Pact would be a game-changer, Kimmel explains. Critically, it would provide a co-enforcement mechanism through the creation of workplace and health and safety committees driven by workers themselves, rather than relying on management oversight alone.

“Trained workers are the experts of their own realities, the eyes and ears of the workplace, and have built community trust as part of respected community organizations,” Kimmel says. Because the formal process hasn’t led to results at Access Bio, workers are trying to get justice on their own. n Luis Feliz Leon is an organizer, journalist, and independent scholar in social-movement history.

MAR /APR 2021 THE AMERICAN PROSPECT 11

SUN, WIND & WATER

Octoraro Reservoir, the drinking water source for Chester, Pennsylvania, and neighboring towns

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SUN, WIND & WATER

Something in the Water

Should a water authority be privatized to rescue a municipality’s finances? The story of Chester, Pennsylvania, and its environs is an alarming harbinger of things to come.

By Gabrielle Gurley ONLY A FEW LAWMAKERS were on hand

for a February budget hearing in the palatial chamber of the Pennsylvania House of Representatives. Dennis Davin, the state secretary of community and economic development, appeared remotely on a large monitor, for a second round of questions about the bid for the public Chester Water Authority (CWA) by Aqua, a private water company.

The first round of questions with state Rep. John Lawrence, a testy Chester/Lancaster Republican, did not go well and the secretary’s mood had not improved. Asked to share his department’s view on the sale, Davin claimed that he did not know what it was. Lawrence, irritated, reminded the

secretary that he had been trying to get some answers for more than a year. Davin agreed to get back to him, later, with an answer. As Lawrence’s time at the podium wound down, Davin continued his evasive tactics. Finally, Lawrence noted he and his constituents opposed the sale, as did every Democratic and Republican legislator in the counties served by the CWA. Chester, a depressed city 20 miles from Philadelphia, has been in fiscal receivership since 2020, a victim of poverty, mismanagement, and the impact of the pandemic. The Department of Community and Economic Development appoints and supervises the receiver. Many at the department are said to view the one-time cash infusion from sale

of the public water utility as a needed fiscal boost for the city.

The battle over the Chester Water Authority is a departure from the more familiar scenario of a private enterprise parachuting into a struggling community to salvage a utility that has fallen into MAR /APR THE AMERICAN PROSPECT such disrepair that2021 privatization is the least-bad option—the worse off the utility and the more desperate the city, the easier the acquisition for a private company. But CWA is well run and award-winning. Four years ago, the authority’s board of directors rejected a bid by Aqua 9 to 0. The company then did an end run around the water utility and initially offered to buy CWA directly from the hard-pressed city for about $400

MAR /APR 2021 THE AMERICAN PROSPECT 13

49

SUN, WIND & WATER million. Whether it can do so, and on what terms, is now tied up in court.

The drinking water authority is now Exhibit A in a web of lawsuits, petition drives, and wars of words to determine who controls this vital natural resource.

It’s a cautionary tale, too, about how private companies prime the pump in statehouses to capture public goods like water from residents who are mostly disengaged from state and local politics. But that disengagement comes with a high price for the region’s residents in the debate to preserve access to drinking water at affordable rates.

Privatization of the Chester Water Authority is under consideration only because of special-interest legislation enacted by the state legislature in 2016, known as Act 12. The measure amended the state public-utility statute to allow municipalities to sell public utilities at fair market value—rather than their depreciated value.

Act 12 was a gift for firms like Aqua. In 2017, the company made its bid for the Chester Water Authority. So pleased was Essential Utilities, Aqua’s parent company, with this result that officials took the show on the road to encourage “fair market value” legislation in other states, especially ones where they operate, including Ohio, Texas, and Virginia. A second change struck out the prohibition on the sale of public utilities by municipalities in distress.

The change in the law meant that a distressed municipality could sell any public utility regardless of its financial condition. “With the economic pressures that are undoubtedly arising from the COVID-19 crisis, we are anticipating that many more municipalities will be looking for solutions to their financial problems,” Essential Utilities CEO Chris Franklin said last May in a 2020 Q1 earnings call.

“I estimated that the privatization of CWA, the potential privatization of DELCORA, our wastewater company, and the creation of a new stormwater authority [means that] people who used to pay a combined $100 a quarter may be paying $100 a month overnight,” says Stefan Roots, a community blogger running for city council who works for the Delaware County Regional Water Authority (DELCORA), a wastewater system

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Aqua is fighting to acquire. “That’s a lot to ask for a poor community.”

GOVERNMENT EFFORTS to provide safe

and abundant water supply for citizens date to antiquity. In 18th- and 19th-century America, water was seen as a public good.

The first public waterworks was established not far from Chester, in Bethlehem, Pennsylvania, in 1755. In the 19th century, as cities grew, New York, Boston, and Baltimore pioneered municipal water systems, though some city systems remained private.

Renewed water privatization began in the 1980s, one part ideology, one part corporate opportunism, and one part a response to fiscal stress. In the aftermath of the 2008 financial collapse, the International Monetary Fund and the European Union conditioned financial aid to Greece and Portugal on drinking water and wastewater privatization.

Chile under the Pinochet dictatorship privatized the country’s water systems. Last October, Chileans voted to replace the 1980 document, and the right to water is a key issue that a constitutional convention is set to re-examine this spring. Venezuela’s now contaminated drinking water shows how disinvestment and political chaos can destroy vital infrastructure.

In the United States, most of the country’s water systems are public but need significant upgrades. Where government investment lags, water systems are primed for privatization. The federal government provided 63 percent of funding for capital improvements to water systems in 1977; in 2017, that figure was just 9 percent. The 2021 Infrastructure Report Card from the American Society of Civil Engineers gave American drinking water infrastructure a C-. Wastewater and stormwater systems are in worse shape.

In healthier communities, a private company can assume maintenance costs

or arrange contracts for specific services in a public-private partnership. But when an entire water system is sold by a distressed city, ratepayers are in for a shock. Private water systems must make profits, as well as earn back what they paid to acquire the water system, and shareholders always come before ratepayers. Quality can suffer. The Pittsburgh Water and Sewer system contracted with a private water company that fired employees charged with budget, engineering, and water safety elements and then used a cheaper chemical to counteract corrosion. Lead levels in the water increased.

Pennsylvania is a petri dish for publicutility privatization. It has many municipally owned utilities, a huge swath of distressed communities, and lawmakers at all levels who can’t get adequate funding for maintenance and upgrades. Just 1 percent of the state’s general fund expenditures could be met by existing rainy day funds, one of the smallest in the country.

Pennsylvania local and state officials tolerate an alarming amount of fiscal negligence and mismanagement.

While citizens may not grasp all the details of legislative corruption, they are suspicious of government. “Pennsylvania is a very hard place to have a penny increase in taxes,” says Beverly Cigler, a professor emerita of public policy and administration at Penn State Harrisburg.

AQUA IS A SUBSIDIARY of Essential Utilities, a $10 billion drinking water, wastewater, and natural gas infrastructure company, headquartered in Bryn Mawr, a suburb west of Philadelphia. It has 1.4 million customers in 32 counties in Pennsylvania and operates in ten states.

More political operators than captains of industry, Essential officials have a deep understanding of the state’s key players. They

Where government investment lags, water systems are primed for privatization.

SHOSHANA DR AINE

Shoshana Draine (lower left), a Save CWA volunteer, goes door-to-door in Chester with her children and a friend to spread the word about keeping the water supply public.

can scout out the best political deals, and craft legislative strategies that can speed up their acquisitions or provide new opportunities.

Nicholas DeBenedictis, Essential Utilities’ chairman emeritus of the board of directors, is a former state secretary of environmental resources (now environmental protection) in the 1980s and served on Democratic Gov. Tom Wolf’s 2014 transition team. The firm (then Aqua America) contributed $10,000 to his 2015 inaugural festivities. DeBenedictis’s protégé Chris Franklin, the current CEO, succeeded him when he retired in 2015.

That same year, Rep. Mike Turzai, a Trump Republican, became Speaker of the House of Representatives. A fracking champion from the Western Pennsylvania town of McCandless, he once pushed through a law forcing communities to allow fracking that some

localities have ignored. Act 12, promoting privatization of water systems, soon followed.

Last June, after Essential Utilities bought People’s Gas of Pittsburgh, Turzai resigned from the legislature. The next day, Turzai, a Franklin confidant, announced his new job, general counsel of Essential Utilities.

SITUATED BETWEEN Philadelphia and

Wilmington on the banks of the Delaware River, Chester sounds familiar notes of urban decline. During the First Great Migration after World War I, African Americans moved to Chester to escape Jim Crow and find jobs in the bustling riverside shipyards. Employment surged again during World War II in industries like steel and iron manufacturing, and the Korean War provided another boomlet. Beginning in the 1950s, the Rust Belt patina spread as jobs

disappeared and the people who could left for Philadelphia or Pittsburgh.

Racial tensions long plagued the city. Martin Luther King spent 1948 to 1951 at Chester’s Crozer Theological Seminary (now the Colgate Rochester Crozer Divinity School in New York), navigating white elites and the Black churches where he preached. Major race riots broke out in 1917 and exploded in the “Birmingham of the North” during the 1960s. Black people lay down in the streets to integrate schools and strode into movie theaters to desegregate those public places.

After King’s assassination in 1968, Chester spiraled into the decline that it is still trying to escape. One-third of the 34,000 residents in the overwhelmingly African American city live below the poverty line.

Republicans had dominated Chester government since the early 20th century,

MAR /APR 2021 THE AMERICAN PROSPECT 15

SUN, WIND & WATER

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Lawn signs to save the Chester Water Authority were as ubiquitous during the 2020 presidential campaign as Trump and Biden signs.

ed Supreme Court decision on government transparency.

Despite Secretary Davin’s coy testimony, the Department of Community and Economic Development is enthusiastic about the proposed sale. Aqua would get an attractive, healthy asset for its growing portfolio. State officials in Harrisburg would get a respite from the Chester headache and can steer state dollars to other distressed cities. It’s a winning solution for everyone—except the humans who rely on CWA water.

Instead of stonewalling under oath in the legislature, Davin could have pointed Lawrence to the caveats in the DCED’s own publication, Municipal Authorities in Pennsylvania: he one-time inf lux of a large sum of T money is just that, a one-time influx of cash. The decision of how to distribute, spend, or invest this windfall may determine the future financial fate of a

municipality. However, now a prime cashgenerating local asset is gone forever, as is the local control over the resource or project. Any local control over rates to the customer base, rates which now may have to satisfy stockholders and private investors, is also lost. A private entity invariably raises the rates formerly charged by a public entity, often dramatically in a short period of time. [emphasis added] Essential Utilities CEO Chris Franklin says his company’s offer represents “social justice” for “a very poor black community.”

“If the fathers of the city, the mayor, the city council, believe that this is the optimal path to get back in a situation where they’re solvent,” he told The American Prospect, “that is their right.”

A REVIEW OF ABOUT 150 Better Business

Bureau complaints from Aqua customers in several states including Pennsylvania found rampant dissatisfaction with high

SAVE CWA

bringing in economic-development prizes like the Philadelphia Union soccer stadium and Harrah’s Casino. For the last decade, City Hall has been run by Democrats.

Chester has several elements that an upand-coming city needs: Widener University, Crozer-Chester Medical Center, a waterfront ripe for development, and Philadelphia, the state’s eastern economic engine, less than 20 miles away. What the city lacks is the leadership to pull these elements and residents together and move forward.

The current mayor, Thaddeus Kirkland, a former state representative, took office in 2016 with old-school Democratic Party– boss ways of doling out favors and knuckle raps. Budget deficits exploded. Pension plan payments went unmet. Municipal employee health insurance payments were late. When the pandemic first hit Chester, soccer fans and gamblers stayed home, delaying anticipated revenues.

Aqua’s unwelcome bid in 2017 alarmed the independent CWA board of directors enough to come up with a plan they hoped would placate the city of Chester. They proposed a 10 percent rate increase, which suburban customers who comprise nearly 80 percent of CWA ratepayers supported, to raise the $60 million to help Chester patch up its atrocious finances. But Aqua, which buys water from CWA for some of its customers, sued CWA and the city over the plan in 2019. In the meantime, Chester officials decided that they wanted to try to sell the utility outright for the one-time fiscal windfall. Both the rate hike and the proposed sale are now tied up in court.

State courts will decide whether the city alone can sell the authority and retain the money, or if it must do so in consultation with neighboring counties and redistribute the proceeds. If Chester sells, the city could end up with only enough money to cover its budget for about a year if it has to divide the $400 million with all the CWA communities. A lower court ruled that the city had to obtain the consent of the suburban member communities. The city appealed and the case is now in Commonwealth Court, a step below the state Supreme Court. In all, 16 court cases related to Chester Water Authority are in play, including an expect-

bills and meter problems in the company’s water systems. Asked about the complaints, Franklin says, “With the massive need for infrastructure rehabilitation in the country, water rates are coming up.”

Social-justice declarations cannot obscure the fact that if the Pennsylvania courts rule in favor of the communities surrounding Chester, the city’s mostly Black residents won’t get much more than a year’s worth of fiscal security. Even if Chester gets the entire pot, funds will evaporate quickly, while Chester residents will funnel many more of their hard-earned dollars to Aqua and its shareholders.

During the fall campaign season, Trump and Biden voters had one common element—“Save CWA” signs. New Garden Township resident Geoff Meyer, a retired corporate attorney in a CWA community whose sewer system has been acquired by Aqua (even before the Aqua sale was finalized, the rates went up 10 percent in 2018), helps circulate CWA petitions urging the governor and state lawmakers to support ratepayer referenda on proposed sales of

public utilities to private companies and transparency measures to require utilities to publish annual reports. Most residents know few details about the fight over water.

Meyer fills them in, and they sign on.

Construction worker Shoshana Draine, a Chester single mother, volunteers to talk to friends, neighbors, co-workers, and others. Few are aware of the proposed sale or the city’s financial problems. “We are slowly getting to a better place,” she says, “but families have their own things going on.”

Last year, Norristown, a Philadelphia suburb, preserved its public wastewater utility from a sale to Aqua by digging deep into the city’s home rule charter. Norristown Opposes Privatization Efforts (NOPE), the citizens group opposed to the sale, found that if they could get enough signatures on a petition to repeal two city ordinances (one that dissolved the sewer authority and conveyed the assets to direct control of the municipality of Norristown, and a second that set up the purchase agreement between the municipality and Aqua Pennsylvania), they could stop the sale. They succeeded on their third attempt last November, and Aqua abandoned its bid. Each effort heightened public awareness and made residents more alert to when early moves to facilitate a sale (such as the conveyance of assets to the selling entity) have already been made.

“These deals are best accomplished with no one knowing that they’re going on,” says NOPE volunteer David McMahon.

In another closely watched case, a state administrative law panel has recommended that the Pennsylvania Utility Commission reject an Aqua bid for DELCORA, which provides wastewater services for Chester and some of the communities that CWA also serves, citing legal problems with the agreement itself, the lack of a rate stabilization plan, and a failure to fully outline the public benefits, throwing a wrench in what would be the state’s largest proposed transfer of a public water system to private control.

The rate hikes that accompany these acquisitions promise to be even more devastating as people lose jobs and experience water shutoffs, tax liens, and other financial hardships as they try to recover from the pandemic recession. A community that

pursues a one-time multimillion-dollar deal to plug budget holes could face the prospect of water flight of residents to communities with lower rates, and creeping gentrification that a soccer stadium, a casino, and interest in waterfront development represent, replacing longtime residents with people who can afford to pay higher rates.

“The situation in Chester speaks to a larger national issue about why we need to make sure that we’re supporting publicly controlled water systems,” says Mary Grant, the Public Water for All campaign director for Food and Water Watch, “and making sure our water systems have the resources they need to continue to operate and provide a service at rates that people can afford.”

The threat posed by rising water bills prompted Congress to create the new Low Income Household Water Assistance Program (LIHWAP) last year. LIHWAP would provide funds to public drinking and wastewater systems to lower rates and arrearages to assist low-income households. The latest COVID-19 relief package adds another $500 million to the Department of Health and Human Services program. The reintroduced Water Affordability, Transparency, Equity, and Reliability (WATER) Act of 2021 includes nearly $35 billion for a trust fund to address critical drinking water and sewer infrastructure upgrades and directs the EPA to study water equity issues.

The latest stimulus package steers $31 million to Chester, which could take some financial pressure off the city. For the moment, however, all the parties—CWA, the city of Chester, and Aqua—have dug in for a protracted litigious journey. For Chester officials, the hundreds of millions that Aqua has offered sounds like deliverance, but the short-term infusion of funds only glosses over deep systemic problems that will re-emerge with a vengeance when the money is gone. Only then will city leaders and residents realize that they’ve given up local control of a natural resource of incalculable value for a one-time, one-shot deal that won’t solve the city’s problems but will force them to think long and hard about how they plan to keep water flowing from their taps. n

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SUN, WIND & WATER

The Promise of Offshore Wind

We can create good jobs and clean, cheap power by bringing back production as well as accelerating installation.

WIND FARMS IN 42 states provided about 7 percent of U.S. power needs in 2019, a figure that is expected to grow. But offshore wind is the exciting growth area for technology and jobs, as well as renewable energy.

The East Coast’s geography, in particular, is ideal for offshore wind energy: The ocean is shallow enough for anchored turbine towers; and because so many people live near the coast, offshore wind energy could be an easier way to bring an energy source closer to where demand is greatest.

According to Mike Fishman, president and executive director of the Climate Jobs National Resource Center, “We see this as kind of the inflection point for the whole system and paradigm from oil and gas to renewables. And on the East Coast, there’s going to be a massive amount of offshore wind. Probably we’ll see 2,000 to 4,000 towers being built over the next 10 or 20 years.”

The United States has the potential to harness more than 2,000 gigawatts of energy from offshore wind, according to the Global Offshore Wind Report. The Department of Energy estimates that East Coast offshore has the potential to provide about 35 percent of power needs for the entire country by 2050. But that will require supportive policies and a politics to match.

Rhode Island was the first state, in 2016, to install its five turbines off about 16 miles of coastline near Block Island. The 30-megawatt project supplies more than enough energy to the 1,000 year-round residents on the island and even sends some energy to the rest of the state when there are surpluses. While the project did at first meet some resistance from local residents who weren’t keen on the aesthetics of the

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windmills on their coastline, the commitment from the state government in partnership with the local electrical and steel workers unions prevailed.

Virginia quickly followed with the country’s second offshore wind farm. But the boldest visions for offshore wind have come from New York state and New Jersey, where the political clout of unions has even inspired other states to retroactively add better prevailing-wage standards to their offshore wind projects.

New York state’s windmill plan will depend on the installation and maintenance of hundreds of wind turbines, many of which will be around New York City and Long Island. The proximity of the wind turbines to the urban center that has the highest demand for energy will be a visual reminder of another benefit of costal wind farms. Gov. Andrew Cuomo signed a mandate in 2019 to procure nine gigawatts of energy from offshore wind by 2035, of which 4.2 gigawatts has already been contracted.

Neighboring New Jersey has a 7.5-gigawatt commitment by 2035 signed into order

by Gov. Phil Murphy, and the 1.1-gigawatt project 15 miles into the ocean from Atlantic City should be in operation by 2024. And adding to the Mid-Atlantic interest now are Massachusetts, Maryland, and Connecticut. (Maine is also delving into offshore wind energy, but the oceans are deeper and the state will be using a different kind of floating wind turbine technology.)

These projects will also require new investment in ports in the Mid-Atlantic, like at the South Brooklyn Marine Terminal, in addition to building totally new sites, as in New Bedford, Massachusetts (the first

port built specifically for offshore wind in the U.S.). This backing comes from the state governments, which also sign commitments to buy the energy at an agreed-upon price per kilowatt-hour from the private companies that are contracted to harness the energy and construct the massive windmills.

The private companies, some domestic and some European, then become clients of the state government and can ask for certain labor standards, called “project labor agreements,” to be included in the project proposals. Plans from competing companies that want to be involved in this budding sector get ranked on a point system, where more points can be earned for better labor practices.

These agreements are a result of strategic union organizing and politicking.

“The main goal for us was to get an institutional framework to address the dual crises of income inequality with the creation of good jobs but also helping to address climate change, and we see the two as being interconnected,” says Vinny Alvarez, president of New York City’s Central Labor Council. “And [the objective] continues to be: create good jobs with labor standards along with ongoing effort to help assist with climate change.

“Sometimes it’s ensuring labor standards are in the legislation, sometimes it’s in RFPs [requests for proposal] that are going out for work, but it’s always ensuring that wherever the work is being done that the workers have a right to have a voice at work,” Alvarez adds. “We see much of this work [in green energy] going to non-union sectors, typically to low-wage jobs. And we want to make sure that we reverse that trend. We think

JENS B’T TNER / PICTURE-ALLIANCE / DPA / AP PHOTO

By Brittany Gibson

The East Coast’s geography in particular is ideal for offshore wind energy.

MAR /APR 2021 THE AMERICAN PROSPECT 19

SUN, WIND & WATER it’s possible to do and we are just focused on that effort like a laser here in the city.”

WITH OFFSHORE WIND, consumers get the benefits of increasingly more affordable energy. On Block Island, the price of wind energy is now less than oil and gas.

Union members can get access to goodpaying jobs in a growing sector. And everyone benefits from the shift to renewable energy in the fight against human-caused climate change.

The novelty of offshore wind energy meant that unions had an opportunity to create the labor terms for this sector, setting the expectation that these programs will have project labor agreements as the industry grows. This is in contrast with most of the United States’ onshore wind farms, many of which rely on the wind production tax credit, a financial incentive that doesn’t have any labor standards attached to it.

Offshore wind development, with these labor standards in place from the start, has the potential to bring high-wage, high-skill work, starting with the steel work of welding, and assembly of wind turbines, which happens both at ports near the installation sites and then on ships off the U.S. coasts.

Wind turbines can be up to 400 feet tall, with their blades measuring the length of about eight school buses, a massive project that requires whole teams of workers. The process of getting that electricity from a wind generator to a transmission grid is done onshore. With the offshore wind plans currently committed to by states, the work will lead to about 3,000 jobs year-round for installation and maintenance, Fishman explains, and more as the sector expands.

While unions are now connected to the installation of these new wind turbines, the parts and components are currently not being made in the United States. Labor leaders say they definitely could be. “It’s great to get the construction work to put the turbines up, but there’s a lot of work— most studies say twice as much work—in the manufacturing and assembly,” says Lara Skinner, director of Cornell University’s Labor Leading on Climate Initiative.

“So as we build up an offshore wind industry in the U.S., we don’t want it to be just

20 PROSPECT.ORG MAR /APR 2021

the construction; we want it to be doing a significant amount of manufacturing and assembly as well.”

Denmark is among the leaders in the offshore wind sector, supplying nearly half of the country’s electricity consumption with wind energy. And the New York labor movement has leaned on the Danes’ expertise.

There have been several trips to Denmark to learn from the workers and companies supported by Cornell after Hurricane Sandy, and more visits could be part of American union member training in the future.

States and the federal government have the power to bring those manufacturing jobs to the U.S., Skinner says. With the same power and political determination that included project labor agreements and prevailing-wage agreements in the initial offshore wind goals, elected officials can include requirements that the components to make turbines are themselves made in the United States.

“To get to the point where the towers are out in the ocean, there’s a lot of onshore work that needs to be done to support the construction and then ultimately the maintenance of those towers and some of the component parts on the supply chain to build the amount of towers that New York and other states are committed to,” Alvarez says.

For the initial projects from New York and New Jersey, which are just a fraction of their longer-term projections, about 400 wind turbines need to be built.

“One of the potentials is the tremendous economic impact for this region in support of an industry that’s going to be here for many years,” says Alvarez. “[With] the volume of work that New York and other states are committing to, there’s an opportunity for us to ensure that there is an economic

impact that’s going to be felt in the cities, in the state that is close to where the assembly is of these offshore wind turbines.”

So far, there is no federal commitment to invest in offshore wind energy. While the federal government leases out the coastal space for these projects, there isn’t a larger national strategy. States, instead, are left to handle their energy ambitions in a piecemeal fashion.

With a large green infrastructure plan on the table for later this year, the Biden administration has already announced an ambitious plan to support domestic production of electric vehicles with requirements that those vehicles are made in the United States. Skinner says this is encouraging because a similar commitment could be made for offshore wind.

First steps from the federal government could come from simply setting a national goal for offshore wind energy production in the U.S. and opening up more areas for federal leasing, says Ethan Elkind, director of the Climate Change and Business Program at UCLA and UC Berkeley Schools of Law. Permitting, in fact, is one way the federal government slows down the implementation of offshore wind projects that states want to pursue.

There are many other ways the federal government could get more involved, Skinner says, from smaller changes like leasing more ocean space to states for the individual projects to bolder planning projects like negotiating directly with offshore wind companies to create national commitments to the clean-energy source.

The U.S. government could even buy the turbines outright and begin operating them itself.

Additionally, continuing tax credit programs, like the wind energy production

The novelty of offshore wind energy meant that unions had an opportunity to create the status quo for this sector.

XU CONGJUN / AP PHOTO

Wind turbine manufacturing needs a similar commitment as the Biden administration is giving domestic production of electric vehicles.

tax credit that was renewed in 2020, could continue to boost the economic benefits of investing in offshore wind. This tax incentive has bipartisan support in Washington, but it then puts the onus on the labor movement to fight for project labor and prevailing-wage agreements on the state level. This also leaves manufacturing decisions to the states.

Smaller-scale efforts, however, have the potential to be equally as effective when it comes to upping the usage of all forms of renewable energy, Elkind says. Policies implemented by different government agencies and by different sectors can increase the “durability” of the Biden administration’s efforts.

Looking at Block Island’s wind farm as an example, even with such a small project (30 megawatts and five turbines), workers earn between $28 and $40 per hour plus benefits. During construction, it also created 300 local jobs.

But unions are not without their own internal challenges.

As organized labor promotes project labor agreements and its alliance with climate activists, it also has to reckon with its own issues of inclusion: Historically, some craft unions have excluded people who aren’t white and aren’t male, sometimes unintentionally and other times deliberately. To truly combat the dual crises of climate change and inequality, trade unions have to

actively work to improve their outreach to a wider group of people.

“The leadership still tends to be white guys, but that will change over time,” Fishman says. “And I think around the country especially now in this last year of fighting, especially now in the big cities, there’s been a real effort to make sure that the building trades are making sure that they’re reaching out into communities.”

Unions offer one of the largest education and training programs in the country, second only to the U.S. military. The recognition that those services haven’t always been accessible to all people has led to more conscious efforts today. People of color, women, veterans, and formerly incarcerated peo-

MAR /APR 2021 THE AMERICAN PROSPECT 21

SUN, WIND & WATER ple are among today’s targeted groups for recruitment into pre-apprenticeship and apprenticeship programs.

North America’s Building Trades Unions of the AFL-CIO collectively have 175 different training programs and before the pandemic put more than 7,000 people through their paid training course on the path to a career in the trades. President Sean McGarvey explains that there are also efforts to partner with local and regional community groups, urban leagues, and youth projects.

On Long Island, where residents may see offshore wind turbines sending power to their homes as early as next year, Climate Jobs New York organizer Mariah Dignan focuses on engaging union members on the future offshore wind projects and opportunities, as well as the community. Prior to COVID-19, there were events and forums as well as partnerships with local officials and other trusted community leaders, like pastors and small-business owners.

In New York City alone, there are four specific programs to help with outreach to more diverse and underserved demographics through the Building and Construction Trades Council of Greater New York, which represents 15 different locals. Nontraditional Employment for Women, also called NEW, prepares women for careers in the building trades; New York Helmets to Hardhats does specific outreach to veterans and activeduty National Guard members; and Pathways to Apprenticeship (P2A) and CSKILLS (Construction Skills) both provide apprenticeship readiness programs with courses and mentorship for people from low-income communities and high school seniors in public schools across the city.

There are similar programs in unions across the country targeting outreach to people of color, women, veterans, and formerly incarcerated people that all work in synergy with broader community organizing and outreach.

The potential to engage a more diverse set of recruits into the trades is also strengthened by projects that are more local or community-centered compared to offshore wind energy, such as retrofitting buildings and schools. Fishman says retrofitting schools with solar panels and other

22 PROSPECT.ORG MAR /APR 2021

Most green-energy jobs that are currently available in the country are low-wage work.

infrastructure upgrades is an example of the kind of work that can benefit underserved communities while also providing good-paying jobs in the process.

But projects branded as “green” or “climate friendly” can also face a more political kind of pushback within unions. During the past two presidential elections, in 2016 and 2020, issues were often framed, especially by the right, as being either good for labor or good for the environment, not both.

The New York Times’ flagship podcast focused an episode on unionized workers harvesting natural gas in Pennsylvania who wouldn’t vote for Democrats if they supported policies focused on climate change.

And President Trump spent much of his rhetorical energy pledging to save coal mining jobs (which are now substantially automated operations that employ a shrinking number of people per year) while also claiming that windmills cause cancer.

With the right mix of policies, the supposed choice between retaining middleclass, union jobs and confronting the climate crisis is false. But there’s still work to be done to show union members across the country that leaders are serious about a just transition for workers who stand to lose good-paying jobs in fossil fuel industries.

For starters, the definition of what a “green job” is needs to be expanded, says Anna Fendley, director of regulatory and state policy for the United Steelworkers. Her organization represents workers in manufacturing, including those in oil refineries.

“It’s really important that manufacturing workers in those jobs see themselves as part of the economy of the future,” Fendley says. “[In terms of] clean manufacturing, jobs [should be] part of the conversation [and] the broad definition of what is a clean job or

green job. If you’re making lightweight aluminum to make cars more efficient, that’s a green job. How we define green jobs is really important.”

Most green-energy jobs, such as weatherization, retrofitting, and installation of solar panels, that are currently available in the country are relatively low-wage work, especially compared to well-paid work in refineries or on pipelines. Many workers have a low regard for climate jobs. Offshore wind’s collaboration with unionized labor is atypical in the U.S. green-energy sector.

“When you tell people that they need to transition into the new green economy, it’s pretty hard to do when they’re not middleclass family-sustaining wages and you’re asking people to take pretty dramatic pay cuts and lose benefits and pensions to go work in this new green economy as it stands right now,” McGarvey says.

Working-class people across the country, unionized and not, know that wages have been stagnant for decades, and they’ve heard the promises about “green jobs” for just as long. McGarvey argues that at least a portion of both Trump and Biden supporters could agree on a lot when it comes to economic opportunity.

But again, Biden’s commitments to the working class are giving the labor movement hope that things will be different this time.

“He understands better than most what it takes for a family to achieve the American dream in the United States,” McGarvey says, of President Biden. “You know from what’s going on in this country in the last several years, in particular this last year, the frustration and the anger [which] for the most part on both sides has to do with economic opportunity.” n

The Case for Taking Back Solar Installing a lot more solar is part of the path to clean, renewable energy. But we also need to be producing the entire supply chain.

By Joan Fitzgerald SOLAR HAS BEEN the fastest-growing

source of electric power in the United States for several years. The cost of energy produced by solar photovoltaic panels declined by 82 percent between 2010 and 2019 and became cheaper than coal and natural gas in 2018. Solar now comprises 3 percent of total electricity generation, totaling 43 percent of new generating capacity in 2020.

But almost all of the panels and their component parts are made in China. That has to change.

We need to re-create a solar panel manufacturing industry for national-security, economic, environmental, and ethical reasons. Building a solar manufacturing industry will require changes in our current trade policy, as well as coordinated procurement to require a domestic solar supply chain, and R&D support for accelerating the development of more efficient panels. These interconnected elements also need to be linked to job training and placement for people with employment barriers and those losing their jobs in the transition from renewable to fossil fuel industry jobs.

The United States employs about 250,000 workers in the solar industry—about 162,000 in installation and 34,423 in manufacturing. The remainder are in operations and maintenance and other supportive jobs.

If we combine a strategy to transition to renewables with one to build a domestic solar industry and supply chain, employment could increase dramatically. A ten-

gigawatt increase in production would add 62,500 direct and 75,000 total manufacturing jobs and would increase installation employment as well.

But China currently dominates in manufacturing all components of solar modules.

A solar module begins with refined and melted polysilicon. A hair-thin wafer of the polysilicon forms the basis of a solar cell, which converts light energy to electricity.

There are several types of cell structures, the most common being single cell (monocrystalline) and polycrystalline, which is used in what are called thin-film solar panels because they are built from flexible materials. China dominates in the production of each element—the refined silicon, the wafers, the cells, and the completed module enclosed in glass and metal or all glass (bifacial panels).

CHINA’S SHADY SOLAR STRATEGY

China has a long-term strategic vision for dominating essential industries—and solar is one of them. In 2016, I wrote in the Prospect about how China used a combination of subsidies and free land to attract U.S. solar companies. They stipulated, however, that they couldn’t sell their products in China, which violated free-trade principles and the promises China made to other WTO countries in its WTO accession protocols, but the U.S. government did not make an issue of it and many U.S. companies found it to be an offer they couldn’t refuse.

China started developing its own solar industry and dumped products on the world market at below-cost prices—something that also violates trade law. By 2011, prices began falling dramatically and many U.S. and German producers couldn’t compete.

Now, China produces 75 percent of solar modules globally.

It’s a similar story with polysilicon. The U.S. was the world’s leader in polysilicon production until China used similar policies to gain dominance. A polysilicon plant uses an energy-intensive process that refines metallurgical-grade silicon to the high purity levels needed for solar cells and semiconductors. Although it took China a while to develop the manufacturing knowledge to be competitive, once it did the industry took off. In 2017, China imposed stiff tariffs on American and South Korean polysilicon, which meant the growing Chinese solar panel production sector had to use domestic polysilicon.

Investment and tariffs have been effective—China’s polysilicon industry, all of it in western China, has grown 27-fold in the past ten years. Since 2017, 91 percent of new capacity worldwide has been in China. Twothirds of the world’s polysilicon market will be controlled by five companies in China and Hong Kong by 2021.

And it’s the same story with wafers and cells. The U.S. currently has almost no production capacity for cells, while China produces 80 percent of the world’s output.

MAR /APR 2021 THE AMERICAN PROSPECT 23

SUN, WIND & WATER In 2020, China accounted for 99 percent of global wafer production, 80 percent of global cell production, and 75 percent of global module production—all substantial increases over its market share in 2010.

A March 2020 U.S. International Trade Commission report estimates that U.S. cell production dropped 75 percent between 2016 and 2018. U.S. cell imports jumped from 308 megawatts from January–June 2018 to 951 megawatts during that same period in 2019, an increase that coincided with the ramping up of new domestic module manufacturing.

Many U.S. states, cities, companies, and individuals are installing solar to avoid carbon emissions. They would be surprised to know that the majority of the solar panels installed in the United States come from dirty coal–fired factories and that some components of their panels are made with forced labor.

About 45 percent of the world’s solarquality polysilicon is produced in the Xinjiang region of China. Transforming silica into silicon for solar panels is an energyintensive process that relies on electricity produced from dirty coal. Further, some manufacturers in western China have been accused of dumping toxic wastewater produced in the process into rivers. These practices produce significant air and water pollution that affects agricultural production and human health in the central and western regions of China where it is commonly produced.

The Australian Strategic Policy Institute has documented detention, re-education, and forced labor of Muslims in the Xinjiang region, where many inputs to solar panels are produced. A 2021 Horizon Advisory report names Chinese solar giants Daqo New Energy, East Hope Group, GCL-Poly, and Jinko Solar among the companies in the Xinjiang region using forced labor.

These companies are still exporting to the United States. American law bans importation of goods produced with forced labor, and there is considerable evidence that many of these goods make their way into the solar supply chain. The U.S. has banned cotton and tomato imports from the region and placed restrictions on hair

24 PROSPECT.ORG MAR /APR 2021

products and computer inputs from Xinjiang, but to date, not polysilicon or other components of solar panels produced in the region.

The China Photovoltaic Industry Association not only denies the use of forced labor in the industry but uses threatening language to warn against restricting imports: “We also solemnly tell some American association and companies that if they intend to use this as an excuse to restrict and suppress relevant parties and companies in China, interfere with normal business cooperation and competition, and seek personal gain from it, they will not only violate international trade rules and market economic principles, but also destroy them.”

U.S. SOLAR POLICY: FITS AND STARTS

In dramatic contrast with China’s policy for supporting every element of the solar production industry, U.S. policy has been scattershot.

Rather than engage in long-term industrial planning, the main federal approach to support the solar industry has been tax credits, offered intermittently, while the Department of Energy has funded research and the government intermittently has subsidized some production and installation.

At the state and municipal level, we have a hodgepodge of renewable mandates and subsidies focused on installation. The main policy instrument is the renewable portfolio standard (RPS), which requires utilities to purchase a set percentage of their power from renewable sources by a set date. Currently, 38 states plus Washington, D.C., have an RPS (or similar program). While state subsidies have supported the record-breaking growth of solar energy deployment, they have done nothing to support manufacturing of solar components.

The American Recovery and Reinvest-

ment Act (ARRA) of 2009 demonstrates the effectiveness of a direct federal subsidy of the clean-energy sector. Of its total investment of $840 billion, ARRA spent $92 billion on cleanenergy technologies, including clean-energy generation, grid modernization, electric vehicles, transit, energy efficiency, and workforce training to support these industries.

To jump-start projects, the $25.7 billion invested for clean-energy generation paid developers 30 percent of their project costs in cash rather than as a tax credit between 2009 and 2015. Another $4.6 billion was provided for guaranteed loans to companies investing in renewable energy.

Although Solyndra became the poster child for those arguing that the government can’t pick winners, total interest payments to the government from the loans exceeded losses from loans by $30 million. The program invested in 183 projects, which leveraged private investment of nearly $5.4 billion.

Of the 183 clean-energy projects, 58 went to solar equipment manufacturers, totaling $1.1 billion. Before the stimulus, solar provided less than 1 percent of the nation’s electricity. As a result of the stimulus, solar more than doubled to 2.3 percent.

We need that scale of investment, and more, to expand domestic solar capacity.

Currently, there are 21 solar panel manufacturers in the United States, 15 of which are American-based.

Some existing U.S. companies demonstrate how to reclaim domestic supply chains by building on established regional competence. When Tempe, Arizona–based First Solar opened its first factory in Perrysburg Township, Ohio, in 2001, it was the country’s largest solar panel manufacturer. It was part of a solar boom in the Toledo area, building off research at the University of Toledo and historical strength in glass technology

China has a long-term vision for dominating strategic industries— and solar is one of them.

DAVID DAYEN

A solar array in Palm Springs, California. China produces around three-quarters of solar modules globally.

and manufacturing. Eighteen years later, the company opened a second factory nearby to produce its new Series 6 line. Representing a cumulative investment of over $1 billion, the new factory expanded First Solar’s domestic capacity to 1.9 gigawatts. This larger line of panels is designed for commercial, industrial, and utility-scale uses.

The new plant added about 500 jobs, with the company now employing approximately 1,450 employees at both Ohio factories. The factory was in production 18 months after breaking ground, illustrating how quickly the country could ramp up domestic production. The company has said that it will exit 2021 with 2.6 gigawatts of capacity in Ohio as a result of process improvements.

First Solar sources all of its inputs for its production in Ohio from a diverse range of suppliers that, notably, does not include companies in China. “We operate a diversified supply chain and, wherever possible, source domestically produced content,”

said Mike Koralewski, First Solar’s chief manufacturing officer. “Solar manufacturing at scale is a significant job creator, but its real impact often gets lost in the narrow focus on jobs directly created on the factory floor. Our manufacturing operations in Ohio indirectly support as many as 7,000 supply-chain jobs across America.”

First Solar’s expansion motivated the NSG Group to build a $265 million specialty coated-glass plant nearby with about 70 percent of its production going to First Solar.

The 511,000-square-foot facility employs 110 hourly workers and 40 in salaried positions. It’s the first glass furnace to be built in the United States in four decades. NSG, in turn, sources materials such as soda ash from Wyoming and sand from Michigan.

The cadmium telluride (CdTe) based thin-film panels First Solar makes are the second-most prevalent type of solar panel after crystalline. They are comparable or better than crystalline panels, and because

they don’t use silicon they are easier and cheaper to produce and have a lower carbon footprint. The company also leads the industry internationally in providing recycling of its modules, which it has been doing for the past decade. Recycling recovers more than 90 percent of the CdTe from every module, which can be used repeatedly. First Solar is the only solar manufacturer to achieve the coveted EPEAT ecolabel of the Green Electronics Council for energy and water efficiency of the production process and use of recycled material.

First Solar is a member of the Ultra LowCarbon Solar Alliance, launched in October 2020 with the goal of increasing market demand for solar panels manufactured with low embedded carbon. Its members include ten solar companies representing the full spectrum of the solar value chain.

THE ALLIANCE HOPES to have a thirdparty-verified embodied-carbon-specific

MAR /APR 2021 THE AMERICAN PROSPECT 25

SUN, WIND & WATER

The Solar Manufacturing Value Chain China has a near monopoly on most solar manufacturing.

Solar-Grade Polysilicon Capacity

Solar Ingot Capacity

China 64%

China 95% USA 0%

Solar Cell Capacity Others 1%

Others 5%

Others 25% USA 11%

Solar Wafer Capacity

China 99%

Others 19%

China 80%

Solar Module Capacity USA 1%

Others 22%

USA 3%

China 75%

USA 0%

SOURCE: REC SILICON ASA

ecolabel intended to complement existing sustainable-product labels. To be certified, a solar module company and its suppliers have to submit to lifecycle analysis to disclose their embedded carbon emissions.

France already has a version of this certification in place, and the European Commission is considering a requirement that all PV modules include carbon footprint information.

Alliance Executive Director Michael Parr is talking to federal and state agencies and other large purchasers of solar to encourage a preference for modules with the ecolabel.

The strategy does not violate trade agreement rules against preferencing domestic suppliers because any company is eligible to seek certification. An ecolabel will initially privilege U.S. and European producers since there’s roughly twice as much embodied energy in Chinese modules, according to Parr. And it wouldn’t raise the price of solar projects—more than 60 percent of the embodied carbon in a given project is in the polysilicon and wafer, which is only about 6 to 8 percent of its cost.

While preferencing certified ecolabel producers is one approach to building a clean domestic solar supply chain, we also need a combination of trade policy, procurement policy under Buy American, manufacturing tax credits, and continued research and development.

THE TRADE POLICY CONUNDRUM

Members of the World Trade Organization (WTO) agree not to discriminate among

26 PROSPECT.ORG MAR /APR 2021

trading partners and to treat imported and locally produced goods equally. That means the U.S. can’t give preference to domestically made renewable-energ y products and also follow WTO rules. One or the other has to give.

Other nations have used targeted industrial policies, and have been the subject of complaints by—of all nations—China. (Do as I say, not as I do.) China actually won a major case in which the WTO ruled in its favor. In 2013, Japan and the European Union mostly won a case against Ontario for paying higher prices for solar energy from locally produced equipment. In 2016, the U.S. brought a case against India before the WTO for its buy-local provisions for cells and modules. India retaliated by bringing a case against eight U.S. states with solar subsidies and buy-local policies. The WTO ruled against the U.S. and required changes in the policies. But with Trump having refused to appoint WTO appellate judges, enforcement of rulings is effectively impossible.

Several manufacturing advocates told me that the U.S. should give preference to domestic solar despite the fact that it violates the WTO. It took two years after Japan and the EU brought the case against Ontario for the WTO disputes settlement mechanism to issue its first ruling. The party can then appeal the decision, and if still found in violation, the party can protest the sanctions. If sanctions are applied, they don’t start retroactively from when the rule was broken, but only after the final decision has been rendered. All this assumes that the

WTO has appellate-system judges to hear appeals. Last week, the Biden administration indicated that it would not appoint a judge, putting all trade cases on hold.

At some point, the president will need to decide whether domestic industrial goals take priority over a badly flawed trading system that his predecessors of both parties have long promoted, at the expense of U.S. manufacturing.

While deliberately violating WTO rules may seem extreme, our dependence on China for solar deployment is no less dire than our dependence on semiconductors, on which the Biden administration is beginning to act. Due to increased demand for computers and other tech products during the pandemic, along with Trump’s banning imports from Chinese companies suspected of using semiconductor technology for spying, the nation is experiencing a shortage of semiconductors that are in many consumer goods. Because the industry is so vital to the U.S. economy, Biden is expected to sign an executive order soon to offer financial support to the industry. This same sense of urgency should apply to the solar supply chain.

The tariffs that the Trump administration placed on foreign solar modules, under Sec. 201 of the Trade Act, which allows retaliation against dumped imports, motivated three foreign producers (Hanwha Q Cells, Jinko, and LG) to open U.S. module plants in response to the tariffs. While the Solar Energy Industries Association (SEIA) claims the U.S. lost 62,000 jobs and $19 bil-

lion in investment due to the higher prices of solar modules resulting from these tariffs, these figures are misleading. In fact, Wood McKenzie counted 19 gigawatts of new solar capacity in 2020, a 43 percent increase from 2019.

The SEIA posture reflects the fact that it is more a creature of companies that install solar (which want low prices) than those committed to domestic manufacturing (which resist unfair Chinese-subsidized competition). Short term, there is a tension between the goal of installing more solar at the lowest possible price and the goal of expanding domestic production. But long term, if the U.S. can rebuild supply chains and domestic technological leadership, prices will keep falling.

PUTTING IT ALL TOGETHER

FEATURECHINA

One tool a president can use is the Buy American Act of 1933, which imposes domestic-production rules on federal procurement and federal grants to states and counties for procurement. Another is the Buy America Act (the two are often confused). The latter is a set of rules that apply to purchases of iron, steel, and manufactured goods used in Department of Transportation–funded infrastructure projects.

The Buy America rules for DOT spending haven’t been committed under our freetrade agreements and don’t allow waivers for trading partners that are signatories of free-trade agreements with the U.S., while the Buy American Act does. Currently, the WTO Agreement on Government Procurement (GPA) gives the other 47 countries in the agreement the same Buy America status as domestic producers.

President Biden’s Buy America executive order calls for renegotiating those rules, as did Katherine Tai in her confirmation

A Chinese worker assembles solar panels in Jiangxi province. The U.S. cannot preference its domestic solar manufacturers without rebuffing the World Trade Organization.

hearing to become the United States trade representative.

In practice, the U.S. can unilaterally exclude certain goods from GPA in trade agreements with a simple declaration that we are taking this category of goods out of commitments. We should do that with the solar supply chain. As one trade restriction supporter noted, “We can’t let trade policy be set in Geneva.”

Infrastructure build-out can promote domestic solar production. The Coalition for a Prosperous America proposes public investment in electric charging infrastructure for the national highway system using domestic solar and battery storage equipment. The proposal points out that the Federal-Aid Highway Program, with average annual spending of $40 billion between 2016 and 2020, is exempt from the WTO government procurement agreement. The U.S. also needs a major public investment in battery storage.

Our dependence on China for solar deployment is no less dire than our dependence on its semiconductors.

Congress should also reinstate the Department of Energy 48C Advanced Manufacturing Tax Credits offered under the American Recovery and Reinvestment Act to offset subsidized producers in China.

This credit provided a 30 percent investment tax credit to clean-energy manufacturers and required that they pay prevailing wages. The value of the credits could be adjusted to target producers that locate in places that will be hard-hit as the fossil fuel industry declines and in environmentaljustice communities. These credits should be extended over decades to create a sustained investment environment that produces innovation.

These disparate initiatives on research, installation, domestic production, trade, and incentives for utilities to shift to solar cry out for a coherent and coordinated national strategy. President Biden’s commitment to a green transition, a large-scale infrastructure investment, and a turning away from past, America-last trade policies, creates the opportunity. Now we need to put it all together. n Joan Fitzgerald is a professor in the School of Public Policy and Urban Affairs at Northeastern University. Her latest book is Greenovation: Urban Leadership on Climate Change.

MAR /APR 2021 THE AMERICAN PROSPECT 27

Islands in the Stream Musicians are in peril, at the mercy of giant monopolies that profit off their work.

By David Dayen ILLUSTRATIONS BY HUGH D’ANDRADE

A

s soon as they crossed into Serbia, the map on his phone went blank.

Damon Krukowski was driving with his wife, Naomi Yang. They were two-thirds of the late-’80s indie rock band Galaxie 500, touring through Eastern Europe as a dream-pop outfit called Damon & Naomi. After years of war in the former Yugoslavia, Belgrade was still under economic sanctions, and off the grid; tech firms had no access to street maps. “We entered the noncorporate world, out of the reach of the West for political reasons,” Krukowski told me.

He had to find a pay phone and write down directions on paper, a crude throwback to the early days of touring. The venue was behind a radio station that had resisted the Milošević regime. And when Damon & Naomi took the stage and started to play, in a city severed from

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every method for a band to reach an audience, Krukowski realized that everyone in the room knew their songs.

“It was so moving, but it was about piracy,” he said.

The Serbian radio station had downloaded Damon & Naomi’s files and broadcast them, creating a fan base.

And Krukowski didn’t really have a problem with that.

“Who could complain that their music had been able to reach people who had no means of purchasing it?” he asked. “It was amazing and we could play a show.”

It was the kind of story sold to millions of music acts about the global reach of the internet. In a connected world, ideas, thoughts, and yes, songs could break across borders, building audiences where none before existed.

It was a dream that appealed to the do-it-yourself ethos of independent artists. They could play the music they wanted, find their own niche, and thrive. It might even change the world.

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But that promise of success soon ran into the reality of the digital age. Krukowski doesn’t indulge in that fantasy anymore. “We’re funneling more of the money in the industry to fewer and fewer hands,” he said. “It’s not designed to democratize music or make a million people a living. It’s just a handful and it’s shrinking.”

The music industry was once sprawling enough to accommodate a wide spectrum of artists. But artists today are beset on all sides by monopolists and oligopolists. Like so many sectors of our economy, government inaction has allowed the music business to consolidate, with devastating effects on musicians.

Radio is to a shocking degree in the hands of one company, Liberty Media. Two companies, Live Nation and Anschutz Entertainment Group (AEG), control a large number of venues and artist management services, with Live Nation dominating ticketing. The major labels have been whittled down to three. Record stores, alt-weeklies, and other elements that nurtured local music scenes are largely gone.

Dwarfing all that in significance is streaming, which has become the industry’s primary revenue source, despite giving a pittance to the vast majority of artists. For the main streaming companies—YouTube and Spotify—music is really a loss leader, incidental to data collection, the advertising that can be sold off that data, and the promise of audience growth to investors. “Spotify is benefiting from every single artist on the platform driving fans to them,” said Chris Castle, an entertainment attorney who used to work at A&M Records. “The labels say they give you exposure. The line is that you can die of exposure.”

This radical upending of the industry’s business model has benefited a few stars, while the middle-income artist, like so much of the middle class in America, struggles to survive. The ubiquity of digital recording tools and social media masks this pain; it feels like music is as vibrant as ever. It’s hard to discern an artist’s suffering, until they’re gone.

Like so many sectors of our economy, government inaction has allowed the music business to consolidate, with devastating effects on musicians.

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The pandemic has cruelly brought this home. Performers who subsisted on touring saw their livelihoods vaporized. Some quit the business; others suffered in silence.

But a funny thing happened. Musicians who would pass each other on the road began to organize about how to ensure fair compensation for their work.

“We’re trying to continuously put artist needs and rights into the conversation,” said Maggie Vail, a musician, label manager for Bikini Kill Records, and board member with the Artist Rights Alliance, a coalition challenging industry consolidation. “If you don’t have healthy musicians, you don’t have a healthy industry.”

You can go gold and still owe the record label … –Ice-T

The notion of a music “business” is relatively new. For centuries, working musicians required patronage, either through churches or royalty or performances for the aristocracy. Mass production of sheet music in the 19th century allowed money to more broadly flow, and this expanded with Thomas Edison’s invention of the phonograph, and later Guglielmo Marconi’s radio. Musicians could record, package, and sell songs as a commodity, and earn money for more than just playing live.

A byzantine system evolved to obtain royalties for songwriters from wherever music is played—on a record, over the radio, in a movie, at a club, or a bar, or a department store, or an elevator. Performance rights organizations (PROs) collect these royalties, and distribute the money to copyright holders. A consent decree between the Justice Department and dominant PROs BMI and ASCAP, in place since the 1940s, attempts to ensure equitable royalty treatment for all artists.

But artists needed to first get their music heard. “You had thousands of stores and physical products,” said Danny Goldberg, a band manager who was the president of Atlantic Records, and later the indie label Artemis.

“You had to have major distribution to get records into stores, and the front of the store instead of the back.”

Goldberg described the record label as “the investment banker for an artist’s career.” Labels would front the costs of production and marketing, and give advances to artists against performance royalties (there are two royalties, one for songwriting and one for the underlying performance; because songwriting royalties are separate from label advances, writers and publishers make a lot more money). Some labels even provided funding for tour support. A hit record would finance speculation on other singers and bands.

From the outset, this system led to exploitation, as often is the case when art collides with commerce. Labels had a clear information advantage: They controlled the books, and defined profits and expenses. There’s a long

ground functions when we’re allowed to pay rent and keep engaging in our passion.”

For an independent artist, the economics were narrow but understandable. Lower-cost tools allowed for professionalquality recordings in garages. You could press your own CDs and sell them above cost at shows. Independent distributors, labels, and record stores could allow for a national following. You played in your hometown and networked elsewhere, through like-minded venues and community radio and fan zines. “We had a robust industry outside of the mainstream culture,” said Maggie Vail, who spent 17 years at Kill Rock Stars, an indie label that featured Elliott Smith, Sleater-Kinney, and The Decemberists. Artists weren’t getting rich, but they could play music and pay the rent, and maybe get a big break and go national.

And then Napster came around.

I will upload you, you can download me … –Warren Zevon

history of crooked record deals, Black artists having their music ripped off and sold to white audiences, top bands seeing nothing beyond their advance because the label had to “recoup” costs. The first deal was always bad, and hitmakers would fight to renegotiate. But what made the marriage somewhat tolerable was the flood of money available. Records were a cash cow, and fans were continually updating their catalogs as new technologies like cassettes and compact discs rolled out. Sales increased for three decades; at the peak in the 1990s, music was a $40 billion per year industry.

Nevertheless, there was always an undercurrent of rebellion. In 1994, Pearl Jam filed suit against Ticketmaster for using its dominant position in ticketing to gouge fans. Condemnations against major labels and corporate rock flowed from the punk and alternative scenes, even if some of them signed with the majors eventually. “There was always a sub-music business underneath the ugly one,” said singer-songwriter Kristin Hersh (Throwing Muses, 50FootWave). “The under-

A lot of the artists I spoke to for this story were unmoved by the early days of file sharing. They compared it to superfans taping Grateful Dead shows or songs off the radio. Some even saw its promise. “I was like, this isn’t great, but wow, we can directly distribute to our fans now,” said David Lowery, lead singer of Camper van Beethoven and later Cracker. “Maybe enough of them will pay that the net result is we get paid better as artists.”

The labels, however, flipped out, with good reason.

“Digital distribution of singles and the mp3 format would unbundle the album,” said Stephen Witt, author of How Music Got Free. “Think of a song like ‘Ice Ice Baby.’ They sold 20 million albums. There were 14 other songs on the album, nobody listened to them.” You simply couldn’t get people to pay $15 for a CD anymore if the only song they wanted to listen to was available by itself.

Napster only lasted a couple of years, though imitators like LimeWire and Kazaa persevered through the 2000s.

The labels sued them out of existence, but hesitated to offer an alternative to instant music downloads. Meanwhile, in 2001, Apple released the iPod. “If music piracy

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YouTube is the largest music streaming platform in the world, accounting for 47 percent of all ondemand play time globally. was the pot trade, then Apple was the vaporizer,” Witt said. The iPod had storage for 15,000 songs, but nobody owned that many. As Witt explained, “the model was, go steal everything and load it on your iPod.” The labels, in denial for years over losing their lucrative business model, needed a solution. So they licensed per-track music sales to Apple’s iTunes Store. “iTunes looks just like Napster, but with one more column added, which was ‘99 cents,’” Damon Krukowski said. “Napster’s window was designed for piracy. It was only title, artist, and file size. iTunes added price. No credits, no information that serves the music community.”

With the album unbundled, record company revenues began a 15-year slump, which filtered down to artists. The labels consolidated, seeking safety in market share. For years there was a Big Five; then Sony bought BMG and Universal bought EMI, narrowing to a Big Three that by 2016 controlled two-thirds of the music market. (Warner Music is the other.)

Recording and marketing budgets started to dip.

Advances decreased. Promotional staffs were sacked.

Labels invented the “360 deal,” entitling them to a share of all revenue from an artist under contract, in addition to what they could recoup from composition rights.

This quickly became the industry standard. The labels compensated for the death of the album by sticking their hands in their artists’ pockets.

I’m like a faucet, monopoly’s the object … –The Roots

Apple’s digital distribution killed record stores, a node in any local music scene. Physical sales became a dinosaur, limited to sentimentalists and collectors. The concurrent decline of alt-weeklies, which featured music listings and interviews and show reviews, inflicted similar damage.

Music-focused magazines also suffered from cutbacks.

“The first thing that happened is we stopped advertising in small publications,” said Vail. “That just radiated out.”

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Radio, another way to reach fans, was also transforming. The Telecommunications Act of 1996 allowed consolidation across terrestrial radio, with two big networks, Cumulus Media and Clear Channel, dominating the airwaves. Sirius and XM launched satellite radio networks in the early 2000s, and then merged with one another.

In a concentrated radio landscape, formats narrowed, diverse artists couldn’t break through, and local content became nonexistent. Local stations became ghost towns; programmers in remote office buildings determined playlists, and robots replaced the DJs. Even that level of concentration didn’t work. Cumulus and Clear Channel, now known as iHeartMedia, fell into bankruptcy. And one company picked up the pieces. Liberty Media bought SiriusXM, and then bought Pandora, an online radio company. Liberty has a one-third stake in Live Nation, the venue and ticketing giant. And in 2020, it took a controlling stake in iHeartMedia, which owns 850 AM/FM stations (more than any other company) and the nation’s largest online radio network and commercial podcast producer. They’re pushing to loosen restrictions on local radio ownership even further.

A company this vertically integrated, combining terrestrial, satellite, and online radio, streaming, artist management, ticketing, venues, and concert promotion, makes airplay an impossibility for all but a handful of artists. “At this point, it’s something I ignore as a label,” said Vail. “I’m not going to spend any time or effort pushing.”

In place of that offline network that nurtured artists was the internet, pitched as a connection point for fan discovery and artist access. There’s a kernel of truth there. Pitchfork and music blogs opened up weird genres and niche artists, and Myspace and later Facebook gave bands a home on the web. If you collected social media users, you could message them about upcoming shows and record sales. But an early shift signaled how the web would inevitably change. “Facebook did this crazy bait and switch,” Lowery said. “We built these band pages where we had access to friends. But when we posted to our page, they didn’t show it to our fans. Then we had to start paying Facebook to access our fans.”

That signaled how artists were wading into the deep end of the pool, where so much about their livelihoods would slip out of their control. “The rhetoric of the early days of the internet was triumphalist bullshit,” said Astra Taylor, a writer, filmmaker, and activist whose husband, Jeff Mangum, fronts the lo-fi rock band Neutral Milk Hotel. (Astra has occasionally played with the group.)

“Nothing’s free of political economy. It was obvious to me ten years ago that something like Spotify was endgame and nothing like cultural democracy.”

And that’s exactly what happened. Chris Castle could see it coming when he caught wind of an advertisement

for a rebooted version of Napster that operated as a primitive streaming service. The tagline was: Own Nothing, Have Everything. Castle recalled: “I thought right there, that’s the end.”

Type it in, Google’s your friend bruh … –Jay-Z

David Lowery, who now lectures at the University of Georgia in addition to making music, described the internet as reassembling all the gatekeepers that kept artists away from fair compensation. “We celebrated disintermediation, and went through a process of reintermediation,” he said.

This started in 2005 with YouTube, a repository for virtually all recorded music, accessible to anyone with a broadband connection, for free. YouTube encouraged users to post content, and almost immediately that included songs. Before Google bought YouTube in 2006 for just $1.65 billion, it alleged that the site was “a rogue enabler of content theft.” Google estimated that over 60 percent of all YouTube views were of “premium” copyrighted material.

Google’s investment was protected thanks to the Digital Millennium Copyright Act, Section 512, which granted a safe harbor from prosecution to tech companies whose users post copyrighted materials, as long as they institute a process of taking down infringing content when asked. But for a platform as massive as YouTube, “notice and takedown” is an exercise in futility. Five hundred hours of video are uploaded to YouTube every minute. As soon as you take one down, another pops up.

“YouTube has a kind of protection scheme,” said Jon Taplin, former tour manager for Bob Dylan and The Band.

“They say, ‘Record company, your content will be up here whether you like it or not.’”

YouTube does run a service called Content ID, a “digital fingerprint” that compares uploaded videos to existing copyrighted material provided by the major labels, and automatically takes down copies. But smaller artists are inexplicably barred from the Content ID system. “The rights of large creators with the resources to take [YouTube] to court on their own are protected,” reads a class action lawsuit against YouTube filed last year, “while smaller and independent creators … are deliberately left out in the cold.” The lawsuit argues that this two-tiered system should invalidate YouTube’s safe harbor. It’s still in litigation.

Though not always thought of in this fashion, YouTube is the largest music streaming platform in the world, accounting for 47 percent of all on-demand play time globally, according to the 2018 report of the International Federation of the Phonographic Industry (IFPI), a nonprofit trade group. Most of the views cycle through a continuous auto-playing stream based on a proprietary algorithm, unbundled from the album. This tends to

concentrate who gets played, as YouTube serves up reliable crowd-pleasers to keep people addicted. “It becomes a winner-take-all business,” Taplin says. “You get this crowding at the bottom, people getting their mother and their girlfriend to listen to their music and that’s it.”

YouTube’s complicated and opaque payment structure changes dynamically based on various factors, including time of day, location of the listener, and ad revenues tied to the stream. But the average money that comes back to an artist can barely be calculated. An estimate from the Trichordist’s most recent Streaming Price Bible shows that YouTube’s Content ID, with songs connected mostly to the major labels, yields $0.00022 per stream. Combined with rates given to uploaders who monetize their videos, you get something closer to what Chris Castle supplied to a U.K. parliamentary committee, showing $0.00074 per stream. At that rate, 10,000 streams—that’s 10,000 different people listening to an artist’s music—translates to about $7, less than the price of one album on iTunes.

Maria Schneider is a Grammy-winning jazz and classical artist and the lead plaintiff in the YouTube lawsuit.

“They pushed this discourse that it was good for artists to monetize their works by putting ads on them,” she said.

“I’ve talked to people I know that are very bright people.

When I tell them what the money really looks like, they’re just shocked, they have no idea.”

You can certainly view YouTube as more of a promotional consideration for live performances. The company constantly touts success stories about artists who broke through thanks to its streams. And even grizzled veterans can benefit. Stephen Witt recounted a conversation he had with Geoff Barrow of the trip-hop outfit Portishead. “He was complaining that he’d have some songs with 200 million, 300 million views on YouTube and he made $30,” Witt said. “But the next year, Portishead headlined the Glastonbury Festival. They hadn’t had an album in ten years. I said, ‘Jeff, you wouldn’t have this headline gig if YouTube wasn’t around.’”

That narrative would be easier to swallow if streaming hadn’t cut off other revenues like music sales, and if YouTube’s parent company Google wasn’t one of the most valuable and rapacious businesses on the planet.

Google takes all the data collected from YouTube and agglomerates it with other information it captures, using that to target ads. Artists don’t share in their contribution to data collection; that money is generated outside their videos and sometimes off the YouTube website. But they’re responsible for attracting the eyeballs that make Google fabulously rich.

“The platforms have driven the price of content to zero,” said William Deresiewicz, author of The Death of the Artist. “This demonetized content is still generating a fortune. But the artists aren’t getting that money.”

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No one man should have all that power … –Kanye West

Daniel Ek, co-founder and CEO of Spotify, promoted what he called an artist-friendly streaming solution. An extension of the internet radio craze of the early 2000s, Spotify would license content from record labels, and then support artists as people listened to their music.

The “freemium” service requires users to either listen with ads or pay a subscription fee for ad-free streaming.

Users can’t upload, avoiding piracy and guaranteeing tracking of royalties.

What made it work was having practically all the music in the world for one low price, or no price on the adsupported tier. That meant getting the major labels on board to give up the copyrights. They agreed for one key reason: Spotify gave the majors 18 percent stock equity in the company, before its initial public offering, in exchange for streaming rights. Even Merlin, a network representing thousands of indie labels, got 1 percent equity.

Danny Goldberg related it to those old Columbia House record clubs, where consumers could get eight CDs for a penny. “These companies would pay the labels advances of $50 million at the beginning of the year,” Goldberg explained, along with a low royalty rate. But the royalty rate had to be shared with the artists; the advances did not. Similarly with Spotify, the labels minimized the royalty through a revenue-sharing deal, and maximized their share of equity, money they weren’t obligated to pass on.

Artists had no say in this development. “There’s not as much money in ads in digital broadcasting, and the (performance) royalty is often calculated as a percentage of revenue,” said David Lowery. The songwriting royalty is a percentage of the performance royalty, so this brings the entire level down. The royalty system was designed for negotiating equitably with thousands of small radio stations, Lowery explained. “That rationale doesn’t work today. You have these huge digital monopolies.”

Spotify also pays out absurdly low per-stream rates,

though not as bad as YouTube. “Last year, the COVID year, Galaxie 500 had 8.5 million streams on Spotify,” Damon Krukowski explained. “We also released a 2,000-copy, limited-edition LP. They raised the same amount of money. Neither is enough to live on.” Krukowski calculated that to earn the equivalent of a $15-an-hour living wage, a band would have to get 650,000 streams per month per band member.

The Trichordist Streaming Price Bible estimated that Spotify revenue actually went down in 2019, to $0.00348 per stream. Cellist Zoe Keating corroborated this trend by revealing her declining revenues on Twitter. “If ya’ll could listen to my music an additional 48,000 streams per month,” Keating wrote, “then I will be able to use Spotify royalties to cover the $924 per month health insurance premium for me and my son.”

Spotify and YouTube even appealed a decision to increase the “mechanical” royalty rate for songwriting, set by a government body called the Copyright Royalty Board. A federal appeals court ruled that the Copyright Royalty Board must consult streaming companies before raising rates.

Several artists, like Taylor Swift, have been angered enough by low rates and artist exploitation to take their music off Spotify. But you have to be Taylor Swift, or someone equally famous, to do that. (Even Swift, er, swiftly put her music back on the service.)

Swift is among the few big winners from Spotify, whose playlists, often focused on a mood or activity rather than a particular artist, really only pay off for the already famous. (This partially explains the strange gold rush in back catalogs, where veteran artists like Bob Dylan and Neil Young have sold their songwriting to publishing companies that expect decades of micropayments from streams.) The concept of the “infinite shelf,” where every artist would be able to find a niche fan base, never materialized. “People never go below the first page of a search engine or recommendation algorithm,” said Jon Taplin. “It’s set to give you what you like.”

Fractions of a Penny Per-stream royalty rates for artists Amazon Unlimited: $0.01123 Apple Music: $0.00675 Deezer: $0.00562 Spotify: $0.00348 (SOURCE: TRICHORDIST STREAMING PRICE BIBLE, 2019–2020)

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Pandora: $0.00203 YouTube: $0.00154 YouTube Content ID: $0.00022

Though the secret sauce of human and algorithmic playlist creation is obscure, there’s a lot of talk of payola, something that’s been tightly restricted in radio since pay-to-play DJ scandals in the 1950s. Money changing hands can push an artist up the lists, where a song is more likely to be played. The major labels own companies that create many of the playlists, pushing their established artists. Last November, Spotify announced an “artist recommendation” program that would lead to more streams for artists who accepted a lower “promotional” royalty rate. Federal payola rules do not apply to streaming.

While artists struggle, Daniel Ek has gotten rich off their boundless creativity. Spotify had 345 million monthly active users at the end of 2020 (a 27 percent annual increase), and 155 million paid subscribers. The company pays 70 percent of all revenue out to artists, and it has almost never turned a profit, but according to Castle, that’s not the goal. He has assembled what he calls the “COVID Misery Index,” a selection of tech

stocks whose prices have soared as people stay home.

Spotify has outperformed Facebook, Amazon, Apple, Netflix, and Google between January 2020 and January 2021, reaching a market cap of $57.65 billion. Ek owns 9 percent of the shares (but through a special mechanism, 37 percent of the voting shares) and had a net worth at the end of February of $5.3 billion.

Musicians, despite supplying virtually all the value for Spotify, share in none of that value. Ek could deposit some of those billions into accounts of the artists that keep Spotify successful, but that’s not on the table.

“Daniel Ek says he’s the savior of the music business,” Castle said. “I think the music business is the savior of Daniel Ek.” If Spotify released the data of who streamed music to the artists, then they could at least use it for direct marketing or planning tour schedules. They could share in the data’s value. But that’s all hidden. “Maybe you find out you have 25 people listening to your music in Seattle, but you don’t know who they are,” said Maria Schneider. “Musicians are underwriting this streaming experiment and it’s not working.”

Perhaps most distressing of all, Spotify has changed how we listen to music, and maybe even what gets made.

Albums used to be taken home and savored, played with headphones on, free from distractions. The ubiquitous stream is more background noise, one device among many screaming for attention.

The pressures of being noticed above the din overtake the instincts of the musician, diminishing it to the level of fast food or fast fashion. Hooks must be simpler and more immediate within the song, to prevent skipping ahead.

Hastily produced pop or dance music that grabs the listener gets foregrounded. And the beast must be constantly fed with newer tracks, working at Spotify speed to constantly attract notice. Ek himself counseled this in an interview last year, warning artists, “You can’t record music once every three to four years and think that’s going to be enough.” It’s the attention economy, embedded in the songs.

“Daniel Ek says if you want to make more money,

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make more music,” Schneider said. “Make it cheaper and shorter and make more. It’s antithetical to artistry. It’s the death of creative music.”

I need a dollar, dollar, dollar that’s what I need … –Aloe Blacc

In a little over a decade, streaming has swallowed the music industry. Though total industry revenue has finally begun to increase, streaming now accounts for 83 percent of all recorded income in the U.S., according to the most recent report from the Recording Industry Association of America. Soundtracks for movies and television, radio play, physical products, and everything else sits in that other 17 percent. Streaming even killed iTunes; last year, digital music downloads returned less revenue than vinyl.

This has severed the traditional relationship between musicians and commerce. Artists used to rely on labels, and while that could get antagonistic, the labels still needed hit music to stay alive. “Apple stepped in, if they abandoned music tomorrow, it wouldn’t change their bottom line,” said Damon Krukowski. “They’re not a music company, Spotify is not a music company, YouTube is not a music company. None of them need me, but I need them. That is unsustainable for music.”

Indeed, Spotify appears to be pushing away from music by becoming a podcasting juggernaut. Reduced music listening on Spotify reduces royalties. Recently, Spotify shut down a live jazz performance podcast that had permission from artists, songwriters, and labels to play their music. Spotify told the podcasters, “Regardless of the licensing status of the music, our podcast service is not intended to be a music distribution tool.”

While there were options before for staying outside the mainstream, which is now the stream, those have narrowed. “Think of the indie music movement of the 1990s as an anti-monopoly moment,” said Kevin Erickson, director of the Future of Music Coalition, an advocacy group for musicians. “We’re seeing now the limitations of that approach. In 1996, you could put out your own record and go around major labels, put it in stores, have a little mail-order business. You can’t go around Spotify.

The dominant businesses have too much market power.”

Some artists have figured out how to make it work, through a digital-age throwback to the old patronage system. Back in the late 1990s, rocker Todd Rundgren created “PatroNet,” a subscription-based service that delivered unreleased tracks and works in progress to fans. PatroNet didn’t last long, and Rundgren is now on Spotify. But the model lives on.

In 2007, Kristin Hersh helped launch CASH (Coalition of Artists and Stakeholders) Music, a nonprofit that offered free tools for artists to manage digital distribu-

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“Spotify is not a music company, YouTube is not a music company. None of them need me, but I need them.” –Damon Kukowski, Galaxie 500, Damon & Naomi tion and merchandising, with open-source, customizable software. Hersh set up a subscription service, where members received album releases, downloads, and guest list passes for concerts, in exchange for a suggested fee.

At the highest level of $5,000 a year, subscribers could get visits with Hersh in the studio and an executive producer credit on her albums.

CASH Music folded, unable to sustain funding. But Hersh still uses the direct-to-consumer model, now named Strange Angels. “Strange Angel listener-supporters treat me like a human because I treat them like humans and we lose no self-respect in our engagement,” she told me over e-mail. “They pay my studio costs and I give them free music. I don’t know any true musicians or songwriters for whom this isn’t the dream.”

The slightly more corporate version of this is Bandcamp, a kind of virtual underground record store for fans, and a way to directly support artists. Bandcamp claims that between 80 and 85 percent of everything sold on its website—from vinyl to downloads to concert tickets to T-shirts—goes directly to creators, with payouts on a daily basis. As of the end of February, this had generated $684 million for artists since its inception in 2007. The more they make, the more Bandcamp makes, so the interests are aligned.

Artists retain the data on their fans at Bandcamp, and can choose what to charge for music. Damon & Naomi records are free on the site, with an option to pay. “Our income went up when we lifted the prices on our downloads,” Krukowski told me. “People are really decent. Nobody has cornered the market treating people as decent, but you can make a living that way.”

Rock group Kings of Leon innovated even further, becoming the first to release an album as a non-fungible token (NFT), a cryptocurrency bundled with digital art and concert tickets. The NFT can be collected and traded, while giving direct proceeds to the artists.

Some musicians doubt these are scalable solutions for

anyone without a built-in audience, or for session players who rely on appearance fees, or songwriters who used to make their year by having a credit on a hit record, which has gone away as the album unbundled. Plus, the economics of these crowdfunding sites are fragile. PledgeMusic, a British-based service, went dark in 2019 and fell into bankruptcy, leaving artists owed thousands of dollars.

Marc Ribot, a guitarist who has played with Tom Waits and Elvis Costello, doubts that these direct-to-consumer sites are much more than a Band-Aid. “The same neoliberals in anarchist drag boosting indie labels in the ’90s are now boosting Bandcamp,” he said. “I love Bandcamp. I love the food co-op too. They’ve been around since the 1930s, they’re 3 percent of the market, will never be any bigger.”

The patronage model, Ribot argued, is really a tipping model for musicians, which isn’t sustainable. “If you go to Bandcamp and pay, that’s great,” he said. “But we don’t need voluntary charity. We need to either tear the whole thing down and create real socialism where I get an apartment for my good looks, or a functioning market.”

I just can’t wait to get on the road again … –Willie Nelson

After a century or so of living off recorded music, the economics of the business has returned musical artists to their original state as troubadours, with touring making up the bulk of their income. Where touring was previously done to promote records, now records are made to support the tour. The multi-billion-dollar industry of selling studio-recorded music is now a sidelight. The phrase “gig economy” was derived from musicians playing a gig.

Now musicians have gone back to being gig workers.

But concentrated power exists in touring as well. Live Nation and AEG control a substantial number of stages and venues in the U.S. They are also the two biggest concert promoters and artist management companies in the world, and control most of the nation’s biggest music festivals.

Live Nation added to their market power with the 2010 merger with Ticketmaster, which still boggles the mind, since Ticketmaster was already a notorious monopolist that artists and fans loathed. Ticketmaster controls 80 percent of the ticketing market, and a 2018 Government Accountability Office report found that ancillary fees attached to every sale total out to 27 percent of the face value of a ticket. About half of Live Nation’s total revenue has historically come from these overages.

The 200 venues and 500 major artists that Live Nation manages give them leverage to make Ticketmaster the exclusive broker for those sites and musical acts. It took AEG, the only other big player in the space, to complain about this anti-competitive behavior, which violated the Justice Department’s consent decree from when they

approved the merger. However, that led only to a slapon-the-wrist modification of that consent decree. Ticketmaster was also recently fined $10 million for hacking into a competitor’s computer systems, in a scheme to collect intelligence and limit that rival’s business.

The Live Nation/AEG duopoly also funnels revenue to the top: 60 percent of worldwide concert revenue went to the top 1 percent of performers in 2017. But even given that reality, independent venues and artists still had a means to earn a living. “2020 was going to be everybody’s best year,” said Audrey Fix Schaefer, whose company manages the 9:30 Club and other venues in Washington, D.C. “It’s the thirst for live entertainment, the thirst for community.”

And then the pandemic hit, and the live music industry vanished overnight. A year later, it still hasn’t come back.

Marc Ribot archly notes that Live Nation waited until a few hours after the U.N. announced a global pandemic to cancel tours. This triggered force majeure clauses in the contracts so Live Nation didn’t have to pay artists for the postponed shows.

In a sense it was a final blow, the capper for an industry that seemingly reconstructed itself over the past 20 years to screw over the working-class musician. “They said you don’t make money on records, you can tour,” Ribot said.

“Now the people who produced that music are literally starving. I lost friends, I’m sure everybody did.”

Ribot told me about a COVID-related survey, which found that 71 percent of the musicians and DJs who responded had lost over three-quarters of their income.

“That’s over twice the rate of average unemployment during the Great Depression,” he said. The hardest-hit were not the up-and-coming artists trying to break through, but the musical middle class, those who had worked consistently enough to make music their sole profession.

There’s almost been a conspiracy of silence about it.

“The music business is about stories,” said Maggie Vail.

“You don’t want to tell people you’re not doing as well.

People would say, ‘I don’t want to talk about it.’” But the pandemic eliminated the one piece of the business monopolists couldn’t fully take away—the live show. Vail told me about her friend Sean Tillmann, a songwriter who records under the alter ego Har Mar Superstar. “He became a mailman,” she said. “He said, ‘It’s a good union job and I’ll do this until my industry comes back.’”

Live Nation has not had such worries. Despite not hosting a live show in a year, the company’s stock exceeded pre-pandemic highs this January, and only has grown since then. Live Nation has done about 1,000 ticketed live-stream concerts, and has planned to cut artist payouts for 2021 shows by 20 percent. But many fear that investors expect the company to capitalize on diminished competition after vaccinations proceed, either through attrition or through a mass buying spree. “The fear is

MAR /APR 2021 THE AMERICAN PROSPECT 37

you have imperiled small businesses and the big guys see an opportunity to scoop everything up,” said Erickson.

In an earnings call in February, Live Nation said it had $2 billion in “total liquidity” that it could use to make a series of acquisitions. CEO Michael Rapino told market analysts, “We will be aggressive on a bolt-on, continued consolidation path while we are able to.”

But after seeing income dip, opportunities slashed, live concerts shutter, and careers threatened, musicians finally recognized that all they had left was each other.

Come together, right now, over me … –The Beatles

Music organizing has always been difficult because the workers are so segregated, always out on the road, never in communication with one another. The pandemic changed that; people were stuck in quarantine, with a moment to contemplate the rotten deal they were getting for their creative output.

Damon Krukowski explained to me how he and some friends started a weekly Zoom meeting, discussing vari-

38 PROSPECT.ORG MAR /APR 2021

ous issues in the industry, comparing notes on contracts, streaming rates, and other issues. Out of those calls originated the Union of Musicians and Allied Workers (UMAW).

More than 1,000 music workers have been involved with the group and its various subcommittees. UMAW mobilized for expanded unemployment during the pandemic, and they have expressed solidarity over progressive issues like Medicare for All and the Green New Deal. But the overarching goal is to change the current state of the music industry.

The Justice at Spotify campaign is a first step. Over 27,000 musicians have signed the petition, which demands at least a one-cent payment per stream, public disclosure of all licensing deals, an end to digital payola, and full credits on all streamed recordings. “Spotify should be fighting for the artists who built it, instead of further undercutting our economic well-being,” the petition reads.

So far, Spotify has ignored UMAW. “They’re stonewalling because they don’t think they need to listen to musicians,” Krukowski said. “We want a seat at the table. I really believe we’re going to get it.”

Marc Ribot and Olympia Kazi, an activist who had

A united front of artists could prove key to raising public sympathies against exploitation and toward basic fairness. gotten New York City’s onerous cabaret law repealed, co-founded another group, the Music Workers Alliance.

Like many pandemic-era organizing efforts, MWA concerned itself first with mutual aid for struggling artists.

But while better streaming royalties, an end to copyright infringement, and basic fairness in the digital marketplace are on MWA’s agenda, they’re also concerned about working conditions at live venues, minimum pay rates, protections against discrimination and harassment, and a piece of any live-streaming club revenue. An initial rally was held in Manhattan in February.

“I went on a nonconsensual strike and I’m alive, it makes me a little braver,” Ribot said. “It’s more militant than I’ve ever seen. It’s no accident that the CIO started in the 1930s in the middle of the Depression.”

The Future of Music Coalition and the Artist Rights Alliance, two older organizations, helped win a $100-a-week “mixed earner” boost for artists who get artificially low benefits benefits due to non-employee income playing music. Both groups have dialed in on corporate power as a huge barrier to a healthy music industry. “Anti-monopoly has always been a thread running through the work, but it’s more central now,” said Kevin Erickson, who worked at college radio stations and music venues before directing FMC. Perhaps the biggest victory for independent music workers was the Save Our Stages legislation, organized by a brand new coalition. After the pandemic struck, Audrey Fix Schaefer of the 9:30 Club got a call from Dayna Frank, owner of First Avenue in Minneapolis. “She said, ‘You’re in D.C., do you know a lobbyist, we have to lobby for federal aid,’” Schaefer recalled. “Of course I thought that was ludicrous, so I said ‘When can we start?’” A week later, the National Independent Venue Association had 500 members, and now it’s up to 3,000, in every state.

Everyone knew the stakes: secure funding, or see a mass collapse of independent venues. Nearly all workers have been furloughed, and 90 percent of the membership said they would not reopen if new funding didn’t come through. Schaefer said that hundreds of clubs are unlikely to ever reopen, including storied jazz venues.

NIVA motivated fans to contact Congress, sparking two million emails. At the same time, it ran fundraisers online that brought in $3 million. Last December, Save Our Stages finally passed, with $15 billion for venues of all kinds, from music clubs to movie houses to museums. “Most everyone else who tries to get laws passed, it takes six, seven years,” said Schaefer. But within nine months, NIVA had secured the biggest federal funding for the arts in U.S. history. Since it was established in 1965, the National Endowment for the Arts has collectively only received a little more than one-third of Save Our Stages.

That points to one option to save music creators. Author William Deresiewicz points out that public funding for the arts in America is about $4 per person, including a program in Minnesota that devotes a portion of its sales tax to arts and culture. Annual U.S. government support for the arts comes in at less than the budget of a Mission: Impossible film. “In Europe, as a percentage of GDP, it’s like 63 times higher,” Deresiewicz said. It’s no accident that Sweden has an outsized number of recording stars given its size, because of its massive investment in the arts.

Beyond direct funding, an artist has space to work when there’s a generous enough society to allow for risktaking, from health care as a human right and cheap housing and basic social services. Creativity flourishes amid security. The New Deal’s Works Progress Administration Federal Art Project gave artists a living wage in exchange for producing art regularly. An offshoot, the Federal Music Project, employed composers and musicians to perform thousands of concerts and music festivals. This spirit could be summoned again.

But funding for the arts has been a longtime issue.

Music worker organizing is relatively new, especially at this level. It remains to be seen whether movement building from all stakeholders, from musicians to fans, will be able to force platform monopolies to give creators just compensation. But the winds are shifting in Washington around Big Tech, and a united front of artists could prove key to raising public sympathies against exploitation and toward basic fairness.

Artists would rather think of themselves as outside the system. “The wonderful thing about the DIY vision is also its weakness,” Astra Taylor noted. But the system has come for them, and toppled the structures that allowed them to create. Everyone loves music, and most of us now have the capacity to listen to anything, anywhere, at any time. We can’t hear through the noise that the people who brought us this musical bounty are in trouble.

“I’ve been relatively fortunate in my career,” said Marc Ribot. “I got to work with great people. But one thing I think about at every moment is, if I can feel the water at my navel, it’s going to be over a lot of people’s heads.” n

MAR /APR 2021 THE AMERICAN PROSPECT 39

The Berke In recent years, economics has grown more concerned about inequality and how to fix it.

The instigators of this epochal progressive shift ply their trade at UC Berkeley.

By Harold Meyerson

40 PROSPECT.ORG MAR /APR 2021

eley School

MAR /APR 2021 THE AMERICAN PROSPECT 41

“P

“Practical men, who believe them-

selves to be quite exempt from any intellectual influence,” the great economist John Maynard Keynes once wrote, “are usually the slaves of some defunct economist.”

Today, however, practical men—and women—ain’t what they used to be.

Jerome Powell, the Trump-appointed chair of the Federal Reserve, says he’s more concerned about unemployment than he is about inf lation—by the historic standards of the Fed, an act of high heresy. Congress just passed President Biden’s economic-rescue package, which does more for poor Americans than any program since it enacted Medicaid 56 years ago. Congress may yet enact a $15 minimum wage, while its most progressive members advocate a tax on wealth.

The powers that be are not getting these ideas from dead economists, or from the mainstream American economists who have dominated the field between the 1970s and the past few years (though they remain a considerable force). They are getting these ideas from a group of labor and public-policy economists who’ve surged to the forefront of the profession over the past decade. And more than anyplace else, these economists are clustered at the University of California, Berkeley.

Much of the work that shaped the groundbreaking child benefits in the $1.9 trillion stimulus bill, and directed those benefits for the first time to the genuinely poor, was done by Hilary Hoynes, a professor in both Berkeley’s economics department and its public-policy school. As Hoynes has documented in a series of studies, both the welfare reform of the 1990s and the reliance on tax credits to provide

42 PROSPECT.ORG MAR /APR 2021

the child benefits largely, and perversely, excluded children in poverty. The benefits in the new stimulus bill are specifically targeted to include poor kids.

As for scholarly work that made the case for the $15 minimum wage, the multiple studies produced over the past quartercentury by Michael Reich—like Hoynes, a Berkeley professor of both economics and public policy—have documented that the presumed downsides of mandating such a raise are largely fictitious. The senators who tried to persuade the Senate parliamentarian that the raise would have a positive effect on the federal budget over the next decade relied on Reich’s fiscal estimates that it would net an additional $65 billion to federal revenues.

And the wealth tax? When Elizabeth Warren and Bernie Sanders began advocating for it while on the presidential campaign trail in 2019, they based their advocacy on the research of two other Berkeley economists, Emmanuel Saez and Gabriel Zucman, whose studies had concluded that the wealthiest 0.1 percent of Americans held 19.3 percent of the nation’s wealth—three times what that group had held in 1979.

Saez and Zucman also reported that the total tax rate for billionaires in 2018 was 23 percent; while for all taxpayers, it was 28 percent. Warren’s proposal, updated this February, called for a 2 percent tax on families with wealth exceeding $50 million, with an additional 1 percent surcharge on wealth exceeding $1 billion—which the Berkeley

duo estimated would raise roughly $3 trillion over ten years.

What, we may wonder, has been going on at Berkeley?

In brief, a historic change. Over the past two decades, Berkeley’s economics department and associated institutes have been at the forefront of two critical changes in the practice of economics: a heightened emphasis on empirical research, and an increasing focus on inequality.

For non-economists like me, these epochal changes in methodology and focus were largely invisible until the 2014 publication of French economist Thomas Piketty’s Capital in the Twenty-First Century, still the most surprising best-seller of its eponymous century. Piketty’s presentation of income tax data from a range of nations— with Saez’s help on the U.S. data, dating back to 1913—documented the growing concentration of income among the very rich, and the corresponding stagnation or decline of income shares among everyone else. The work was relatively light on equations (other than the one showing that the return on investment was almost invariably higher than the growth rate of the overall economy) and jam-packed with tables and graphs showing the upward distribution and redistribution of income.

While the book had not caused a great stir when initially published in France, it certainly did when, in translation, it came across the pond. To a nation that had been through the 2008 crash and ensuing K-shaped recovery, that had had Occupy Wall Street encampments in most major cities, and that was soon to witness the breakout presidential campaign of avowed socialist Bernie Sanders, Capital in the Twenty-First Century provided a definitive picture, a compelling analysis, and a plausible remedy for an economy that no longer worked for the majority of Americans.

For economists not tethered to the doctrine that markets generally work for the general good, the book was less of a revelation; Piketty and Saez had begun their deep dive into previously unseen U.S. tax data as far back as the turn of the 21st century, when they began publishing their joint studies. Over the subsequent two decades,

the economics departments at three other leading universities—Harvard, MIT, and Princeton—also began turning in more empirical directions focusing on inequality. But Berkeley, then as now, led the pack.

“Introductory economics courses are about 12 or 13 weeks long,” says Berkeley economics professor Brad DeLong, who worked in the Treasury Department during the Clinton administration. “At Chicago Emmanuel Saez

and similar institutions, they teach 11 weeks on how great markets are and one week on market failures. We teach three weeks on market successes and ten weeks on market failures. They neglect the problem of income distribution and have fuzzy thinking about the asymmetry of information that impedes the knowledge that people need for markets to work.”

In a sense, the evolution of the Berkeley

brand of economics and the substance of liberal and Democratic thought are both reactions to the end of the “Great Compression,” the period of World War II and the postwar decades during which income gaps between rich, middle, and poor grew narrower. The work of Berkeley economists and their peers at those three other universities and a handful of progressive think tanks certainly informed the larger zeitgeist, and did so in opposition to many of the non– empirically based theorems taught in most economics departments. “But I don’t want to exaggerate our role,” Saez says. “It was the facts that drove the story.”

Merely to access verifiable facts, though, required a methodological change. “The transformation of economics into a more empirical subject with no reliance on pseudoscience has taken a long time and required people to step back from earlier assumptions,” says David Card, who chairs Berkeley’s economics department and whose own work heralded that change.

“Maybe that’s what we’ve done at Berkeley.”

COURTESY OF EMMANUEL SAEZ

“HARDLY ANYONE TAKES data analysis seriously,” economist Edward Leamer wrote in 1983. “Or, perhaps more accurately, hardly anyone takes anyone else’s data analysis seriously.”

At the time Leamer was writing, main-

E

Emmanuel Saez’s 2001 summer at Berkeley convinced him to move across the country; that and his passion for surfing.

MAR /APR 2021 THE AMERICAN PROSPECT 43

3 201

3 200

3 199

3 198

3 197

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192

3

191

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3

Percentage of Wealth held by top 0.1%, 1913–2013

stream economics thought it was doing just fine with30% out data. The “saltwater” school—chief ly, Harvard a nd MIT—pra c ticed a watered-down Keynesianism which held that government could inter20% vene to boost purchasing power during a downturn, and that, with some exceptions, intervention in markets wouldn’t do much good 10% at other times. The “freshwater” school—Chicago, where Milton Friedman and his apostles ruled the roost—held that any such 0% interventions disrupted the smooth operations of a market guided by Adam Smith’s “invisible hand.”

In the 1960s, ’70s, and ’80s, much of Berkeley economics had also exemplified what Leamer noted as the great data aversion. The department had excelled in theory, no one more so than Gerard Debreu, who won the Nobel Prize in economics in 1983 for his work on how prices balance supply and demand. In the early 1990s, however, the department was compelled to downsize, as revenues to the state plummeted due to the decimation of the aerospace industry—then California’s largest private-sector employer—in the wake of the Cold War’s end. The old theorists left, and when the state’s budgets began to recover, the department began hiring.

“The modern renaissance in empirical microeconomics was driven by David Card relocating to Berkeley [in 1997] and poaching Emmanuel Saez from us,” says Harvard economist Lawrence Katz, himself one the nation’s leading empirical microeconomists, specializing in labor. “Berkeley had been a complete desert in labor economics,” Card says, in the years before he arrived.

Card’s arrival ended that particular drought. Three years earlier, he had coauthored a groundbreaking paper with his Princeton colleague Alan Krueger, which looked at the effect of different minimumwage levels in two adjoining counties—one

SOURCE: SAEZ /ZUCMAN

in New Jersey, the other in Pennsylvania— and concluded that there was no job loss or shift due to the wage differentials. The prevailing theory on the disruptive effect of minimum-wage laws on labor markets had failed to stand the test of an empirical experiment. Another paper Card had authored on the effects that the arrival of 100,000 Mariel boatlift expellees from Castro’s Cuba had on wage levels in South Florida also showed that wages didn’t drop, in violation of time-honored if untested formulas on labor supply.

“The problem in economics,” says Reich, “is always separating causality from correlation; it’s hard to do in the social world.

These papers shocked a lot of people. They went against expectations. And they showed a way to tease out causality from correlation”—through the empirically based data analysis whose previous absence Leamer had noted.

Once at Berkeley, Card turned his interest to other researchable topics like education; and Reich took up the task of studying different minimum-wage rates in proximate jurisdictions. Card began hiring other economists with an empirical bent. Saez arrived in 2001 for a summer visit and was “poached” the following year.

“When Saez gave his first seminar paper,

I virtually fell off my chair,” says Reich. “We were still considered by some as being on the fringes of the profession for our empirical research, but Saez had the kind of data that no one had had, and it made a real difference.”

Saez had received his doctorate from MIT in 1999, and for the next three years worked at Harvard. “I was a mainstream economist,” he says, “but some of the work I did that wasn’t encumbered by the standard models pushed me a little bit outside of the mainstream. It was a slow process.”

The process was accelerated by his beginning to work with Piketty while he was at Harvard. “There had been a tradition of looking at tax data, but it had fallen out of favor,” Saez says. “Then Piketty began to look at it, and the trend of income concentration had become so extreme that it forced economists to notice it.”

His 2001 summer at Berkeley convinced Saez to move across the country (that and his passion for surfing; California’s waves completely rolled over New England’s piddling tides). “I preferred the feeling in Berkeley to that then in Boston; it was a view of economics that had entertained more doubt about some of the standard models.”

Both by himself and later with his col-

“

league Gabriel Zucman, whom Berkeley hired in 2016, Saez has produced not only scholarly papers on both income and wealth concentration, but short, journalist-friendly annual summaries of income concentration. The 2020 edition of “Striking It Richer” documents that from 1993 through 2018, the real income growth for the wealthiest 1 percent of Americans came to 100.5 percent, while the other 99 percent had to settle for an increase of 18.3 percent. During this time, the wealthiest 1 percent captured 48 percent of the nation’s total increase in income.

“This is a place that does empirical economic research not tied to any particular theory,” Zucman says. “No one framework, like the neoclassical at Chicago, can make sense of everything. Neoclassical economics can’t deal with questions of income and wealth distribution, and so it can’t understand the U.S. economy since 1980.”

“During the postwar decades,” Zucman continues, “economics was almost entirely about questions of efficiency, about demonstrating that a market economy worked better than a planned one. But this was a historical parenthesis, economics in a Cold War context. Historically, economics was about questions of distribution—it’s in Ricardo, it’s in Marx. Now, in the 21st century, we’re rediscovering the importance of distributional issues.”

Saez readily admits that his kind of focus on inequality and taxation is only part of the

“W

“We’re here not just to study the economy because it exists, like the stars in the sky,” says Gabriel Zucman.

picture. Many of his colleagues do empirical research on labor economics and labor policy, which is another leading component of Berkeley economics, bound up in the same post-1980 history. “After all, the Reagan ‘Revolution’ destroyed both progressive taxation and unions,” Saez says.

ZUCMAN IS ANOTHER Berkeley economist

with a joint appointment at the university’s Goldman Public Policy School. “We’re here not just to study the economy because it exists, like the stars in the sky,” says Zucman. “The motivation for many of us is to do research in social science that improves public policy.”

One of the Goldman School’s divisions is the Institute for Research on Labor and Employment (IRLE)—formerly the Institute for Industrial Relations, one of many such centers founded at the nation’s universities in response to the great strike wave of 1945–1946, with the intent of incorporating labor into the nation’s economic order in less disruptive ways. Nonetheless, the IRLE has long been a fount of progressive economic studies and policy advocacy. In October of last year, for instance, as Californians prepared to vote on Proposition 22, a measure conceived and funded by Uber and other employers of gig workers to repeal a state law that compelled them to treat their drivers as employees entitled to such commonplace privileges as the minimum wage, Reich authored an IRLE study showing that defeating the measure would enable the drivers to increase their incomes by 30 percent, which would require fare increases of only between 5 and 10 percent.

Reich was the director of the IRLE until 2015, when he was succeeded by another joint appointee in the economics department, Jesse Rothstein. For Rothstein, working at Berkeley was a homecoming of sorts: He’d received his doctorate there in 2003, with a dissertation on the shortcomings of school choice. (Writing on anything related to education, he says, was the last thing he wanted to do when he arrived, as his father, frequent Prospect contributor Richard Rothstein, was then the education columnist for The New York Times. Nonetheless, the younger Rothstein became a research

assistant for Card, for whom he ran a study concluding that when offered a choice of schools for their children, parents tended to select those whose students were disproportionately well-off, rather than schools that were disproportionately well run. The study morphed into his dissertation, and he’s been writing about education and labor issues ever since.)

Rothstein began his teaching career at Princeton, then moved to Washington to serve as the chief economist in Barack Obama’s Labor Department. When he left, he took the joint appointment at Berkeley.

As the head of the IRLE and as an economics professor, he has mentored a wide range of budding labor economists. One lesson that he and his colleagues try to instill is “being careful with the data. The mantra here,” he says, “is ‘Let the data speak.’ If you find a result, it should be clear how you found it, what your research strategy was, and that it should be replicable.”

Berkeley’s emphasis on data isn’t limited to labor and public-policy economists. Professors and students focused on development and trade now routinely are researching large data sets for their work.

“Trade has gone from a theoretical subject to an empirical one,” says Card; “the younger trade economists all do empirical work.”

Rothstein also founded and heads the IRLE’s California Policy Lab, which studies such problems as homelessness and lowwage work, and advises the legislature on those and other issues. According to Ken Jacobs, who directs Berkeley’s Labor Center (yet another IRLE division), both Saez and Zucman have “helped us grapple with possible revenue strategies for the state,” which is home to more billionaires than any of the other 49. “We have a set of relationships with the state’s unions and other groups on the ground,” says Jacobs, “and with an extraordinary group of academics. It’s one of the privileges of being at Berkeley.”

“Department boundaries here are very porous,” says Robert Reich (no relation to Michael Reich), one of the three founding editors of the Prospect, who’s long been one of the nation’s leading public intellectuals focused on issues of economic inequality, and has been a Goldman professor since

MAR /APR 2021 THE AMERICAN PROSPECT 45

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class (a case that Democratic elites disastrously ignored).

Even before its turn to empirically based labor and policy economics, Berkeley had occasionally been home to economists who dealt with market failures. George Akerlof’s 1970 paper “The Market for Lemons” dealt with the problem that sellers of used cars knew a lot more about those cars’ clunkier attributes than their buyers did. Though the paper was in no way based on empirical research, it was still sufficiently heterodox in its acknowledgment and study of information asymmetry that it was rejected by a number of academic journals before it found one that would publish it. Years later, it proved to be the foundation of Akerlof’s study of this particular branch of market failure, which won him a Nobel Prize.

Akerlof’s wife was also a Berkeley economist, who branched out while there to serve

on the regional board of the San Francisco Federal Reserve Bank. In time, Janet Yellen would serve as chair of the President’s Council of Economic Advisers, then the first woman to chair the Federal Reserve, and now the first woman Treasury secretary—a post in which her concern for the victims of market failure, be they unemployed, underpaid, and/or victims of discrimination against women and minorities, stands in sharp contrast to her predecessors’ unvarying and bipartisan concern for the care and feeding of Wall Street.

“

BERKELEY HASN’T GONE it alone over the

past three decades. Two Washington-based think tanks—the Economic Policy Institute and the Center for Economic Policy Research—have played key roles in studying our increasingly dysfunctional economy and developing policies to create more

Gabriel Zucman

COURTESY OF GABRIEL ZUCMAN

2006. That his courses are among the most popular on campus—800 students are enrolled in his current course, “Wealth and Poverty”—testifies not only to Reich’s pedagogical charisma but also to the interests of Berkeley’s undergrads.

Goldman isn’t the only Berkeley graduate school with which the economics department works. Some of its professors have joint appointments at the Haas School of Business, among them Sydnee Caldwell, one of the three new assistant professors the department hired last year, all of them women. Much of Caldwell’s work deals with the effect of monopsony (excess market power on the part of a dominant buyer, an increasingly pervasive and pernicious form of market failure) on men and women in the labor market.

What Rober t Reich descr ibes a s “porous boundaries” has long been a feature of Berkeley’s academic life. The most prominent economist ever to receive a Berkeley doctorate, John Kenneth Galbraith, was nominally a student in agricultural economics, which was then distinct from the economics department proper. Before he completed his course of study in 1933, however, Galbraith was able to take many courses in the economics department, where he encountered a range of professors who had a more tolerant, even occasionally supportive, view of New Deal economics—a viewpoint, his biographer Richard Parker has noted, that he would not have encountered in the more classical laissez-faire departments of Harvard and Yale.

Berkeley was also ahead of the game when it came to trade and industrial policy.

In the 1980s, economist Laura Tyson, political scientist John Zysman, and planning school professor Stephen Cohen formed the Berkeley Roundtable on the International Economy, better known by its cheesy acronym, BRIE. In 1992, Tyson authored one of the first serious challenges to orthodox globalization, Who’s Bashing Whom?

In 1987, Cohen and Zysman published the path-breaking Manufacturing Matters, making the case that manufacturing was essential to the national interest and the economic fortunes of the nation’s working

“E

“Economics has not been the discipline at the forefront of understanding racism,” says Ellora Derenoncourt. broadly shared prosperity. EPI, which was founded in 1986, has chiefly served as a tribune for the interests of American workers.

In its long-running annual reports on The State of Working America and in a host of other papers, it has created some memorable explanations of the rise in inequality, including its graph charting the increases in productivity and income since the end of World War II (which rose in tandem until the 1970s, after which productivity continued to increase while median wages flatlined) and its yearly reports on the ratio of CEO pay to median worker pay. For its part, CEPR has highlighted a range of concerns, not least the several years of pre-2008-crash warnings from economist Dean Baker that the housing market had become a bubble that would soon and calamitously pop.

Berkeley builds on one other valuable and unsung tradition. Beyond the rarified debates of freshwater versus saltwater economics in elite universities, a few heroic radical economics departments kept alive the tradition of historical inquiry and critique of market folly. At the University of Massachusetts at Amherst, the New School in New York, and the University of California at Riverside, neo-Marxists and institutionalists created centers of scholarly dissent. Other schools, such as the Levy Institute at Bard College, were hospitable to the radicalism of Keynes, as opposed to watered down neo-Keynesianism. These critics proved prescient about the failure of markets and influenced the new main-

stream at Berkeley and beyond. Heather Boushey, now on President Biden’s Council of Economic Advisers, has her Ph.D. from the New School.

WITHIN THE CIRCUIT of Berkeley, Har-

vard, MIT, and Princeton, there are frequent migrations of professors and newly minted Ph.D.s. “I have eight former Ph.D. students now on the Berkeley faculty,” says Harvard’s Katz. Sometimes, the migrations flow west to east, as in the case of Harvard’s Raj Chetty, one of the discipline’s leading empirical economists on such topics as intergenerational mobility (or the lack thereof), who began such work at Berkeley and is now continuing it in Cambridge.

That said, Berkeley sounds increasingly confident about its hard-won place in the economics ecosystem. “If you want to do labor economics, or public [policy] economics, you can make the case that Berkeley is the place to come,” says Rothstein. Ellora Derenoncourt, who was hired last year as an assistant professor both in the economics department and the Goldman School, says she came because Berkeley offered “a space to combine inequality studies with policy solutions.” Since she’s been on staff, she’s talked to a number of students who’d been admitted to several graduate economics programs at top-ranked schools and were deciding which to attend. For many, she says, “it’s the inequality issue that pushes them to come to Berkeley.”

Increasingly, that issue isn’t seen as one simply of income, education, and class.

“Economics has not been the discipline at the forefront of understanding racism,” Derenoncourt notes, and, indeed, economics departments have long been the whitest and most male of any of the social sciences. Not surprisingly, a growing number of professors and graduate students are now working on issues of racial and gender inequality, and the experience of immigrants as well.

Nina Roussille is one of those students; she just completed her doctoral studies after five years at Berkeley and as an IRLE associate. Her dissertation used the database provided by Hired.com to research gender differences in salary, where she found that

mid-career women generally ask for lower salaries than their male counterparts seeking the same jobs, as their networks tend to include more experienced women workers who’ve been accustomed to lower salaries than their male co-workers.

At Berkeley, she says, the emphasis in choosing your dissertation topic is often on whether the topic could address a question in a way that could change the way people work, or the policies that shape their work.

“It’s certainly not the case in departments across the nation,” she says, “but at Berkeley, everyone is trying to be on that frontier.”

And that frontier may just be spreading. “Berkeley, Harvard, MIT, and Princeton are the leaders, but there’s a broad shift toward a more empirical focus,” says Harvard’s Katz. “You see it in young European economists. Even the young people at Chicago are using these methods.”

Indeed, a paper issued this February confirms Katz’s assessment. Using “anonymized bank account data covering millions of households,” the paper examined whether the federally funded increase in unemployment insurance benefits during the pandemic actually discouraged the recipients of the more-generous-than-usual UI from seeking work, as the standard economic models predicted (and as West Virginia Sen. Joe Manchin said he suspected).

Instead, the authors wrote, while “simple job search models predict a sharp decline in search in the wake of a substantial benefit expansion … we instead find that the jobfinding rate is quite stable.”

In not discouraging job hunting and in boosting economic activity generally, they concluded, “benefit expansions during the pandemic were a more effective policy than predicted by standard structural models.”

And the authors of this bit of empirically derived heresy? Three economists from the JP Morgan Chase Institute and three from the University of Chicago. And, the unkindest cut of all, the paper was published by Chicago’s Becker Friedman Institute, named after the university’s celebrated laissez-faire apostles Gary Becker and Milton Friedman.

The age of Berkeley economics may just be getting started. n

MAR /APR 2021 THE AMERICAN PROSPECT 47

IN EVICTION COURT

48 PROSPECT.ORG MAR /APR 2021

boys are in town than from three middle-aged women who’d known each other for years. Because Philadelphia Municipal Court’s sixth floor is built more like a Department of Motor Vehicles office than a vaunted temple of American justice, the sound of the fight bled through the wall and into Judge David H. Conroy’s Courtroom 3. You couldn’t tell exactly what Jefferson, Cottman, and Grant were saying, but you didn’t have to.

By the time the deputy arrived to restore order, attorneys Jermaine D. Harris, for the landlord, and Vikram A. Patel, for the tenants, had separated their clients and were beginning the cooling-off process. An hour later, they had an agreement. The tenants would move out in three months and the landlord would forgive unpaid back rent.

EXPECT MORE SHOUTING IN the coming months. The coun-

try’s eviction courts were a flaming mess before the pandemic, so imagine the chaos when tenant protections are lifted and an estimated ten million Americans face getting booted from their homes. The virus revealed the nation’s landlord-tenant

BOB IVRY

PHILADELPHIA – Eviction court during COVID-19 is boring, boring, boring, and then all of a sudden, BOOM! A door gets slammed, voices rise, and someone has to call the sheriff.

That kind of case doesn’t happen often, but on a raw January morning in Philadelphia, it did.

The court encourages adversaries to resolve disputes before they reach a judge, so a landlord named Francine Jefferson and two women who’d been her tenants for eight years, Benita Cottman and Carol Grant, ducked out of the courtroom with their lawyers, into an area reserved for mediation. Their quarrel centered on issues that, even with dockets shortened due to the pandemic, the court hears every day. The landlord said the tenants hadn’t paid rent since August. Also they’d promised to move out but didn’t. The tenants said the landlord had allowed a small water leak to grow into a big problem.

Also part of the stairs was broken. Also the landlord was a liar. The landlord said no, actually the tenants were liars. It escalated from there.

Their language was laced with the kind of viciousness more likely to come from the cheap seats when the Dallas Cow-

Despite the pandemic, eviction filings and proceedings continue.

Philadelphia has found a better way—for now.

BY BOB IVRY

MAR /APR 2021 THE AMERICAN PROSPECT 49

50 PROSPECT.ORG MAR /APR 2021

complete the right documentation on time. Getting evicted might seem like a harsh punishment for not filling out the right forms, but the rule, written by the CDC during the Trump administration, lingers in the Biden era.

Philadelphia is a little different. The city council has ruled that no tenants can be locked out of their homes for any reason during the pandemic. The policy has kept thousands of people out of the virus’s path. It’s also enabled some epic apartmenttrashing. But the effort has only slowed, not stopped, eviction filings. In Philadelphia before COVID, landlords petitioned for 1,500 evictions a month. This January, as cases and deaths spiked, the tally was still about 20 cases a day. The ongoing filings, and the ban on carrying out eviction orders, has created a ballooning backlog of cases for the time when court officers can get back to throwing tenants out of their homes.

According to the Municipal Court, there are now more than 560 renters on Philly’s toss-out queue who, when the time comes, should expect a knock on the door.

IN OTHER U.S. CITIES, EVICTION courts are chugging along.

Pre-pandemic, Baltimore had more eviction filings annually than it had rental units, according to the court—an astonishing 1,100 a day. A crowd of that size jamming into

COURTESY VIKR AM PATEL

system as such a reliable rubber stamp for property owners that only a full stop could keep people from dying. A national eviction moratorium and numerous local variations have saved more than 55,000 lives, approximately, according to the National Bureau of Economic Research. That protection may be coming to an end soon. The current Centers for Disease Control eviction ban expires March 31.

Philadelphia, which not long ago had the fourthhighest eviction filing rate in the U.S., is a special case. It was able to construct a safety net that other jurisdictions, a year into the pandemic, still don’t have.

But even Philly’s system has its quirks.

National programs to help tenants pay rent and keep landlords afloat have had mixed success. In March 2020, the CARES Act earmarked $12.4 billion in federal funds for rental assistance, but many eligible people never saw a dime. A further $25 billion effort passed in December has been even more frustrating to access. Arduous documentation requirements, overburdened staff, a confusing patchwork of state and local processes, and halting participation have slowed help to a trickle.

In Pennsylvania, lawmakers bungled the emergency response in especially slapstick fashion. They created impenetrable hoops for recipients to jump through, then found that getting the money to the right places required a system that didn’t exist. The commonwealth ended up spending only $54 million of the $150 million in federal money it received. Because the funding was use-it-or-lose-it, and no one likes writing a check to Washington, the legislature opted to dump the remaining funds into its prisons. One might be tempted to call that ironic.

Philadelphia, however, was able to move faster. The city, helped by existing relationships it had with nonprofit housing organizations, dispersed a total of $61.8 million in CARES Act rental assistance. It also started an Eviction Diversion Program that matches tenants with housing counselors, attorneys, and money to bridge rent payment gaps. City leaders hope the infrastructure they built to minimize evictions will survive the pandemic and create a model for others.

“It’s absolutely harder now to get evicted in Philadelphia than it used to be,” says attorney David H. Denenberg, who represents both landlords and tenants. “What good is it to put tenants out on the street? We all end up paying for that.”

Around the country, states, counties, and cities—sometimes even different judges in the same towns—have followed their own interpretations of what constitutes an eviction moratorium. In most places, the ban shields tenants who can’t pay rent, provided they submit paperwork identifying COVID as the reason. Landlords can still bounce renters for things like criminal activity, property damage, or failure to

Vikram Patel serves as a Lawyer of the Day for low-income tenants in Philadelphia facing eviction.

He usually has 20 minutes to devise a defense.

the courthouse for eviction hearings was impossible during COVID. Before shutting down for a second time late last year due to surging cases, Baltimore shrank its daily dockets to about 120. That’s still 2,300 a month. New York City landlords have filed for more than 40,000 evictions since March 15, 2020, according to Princeton University’s Eviction Lab. In Houston, the number topped 25,000. In just the last week of February, Phoenix had 859 filings and Indianapolis 242.

America’s country cousins are doing their best to keep up.

Last year, Iowa landlords filed in 95 of the state’s 99 counties. “It’s not uncommon in Iowa for someone to be on the street within two weeks of receiving their first notice,” says Alex Kornya of Iowa Legal Aid. Two parts of Michigan were among the Eviction Lab’s top five in rural evictions. In some areas of Idaho, landlords work with tenants on pre-court mediation. In others, they’re still issuing three-day “pay or quit” notices to delinquent tenants.

“Some tenants simply move out to avoid court,” says Ali Rabe, an Idaho state senator and executive director of Jesse Tree, an advocacy group for the homeless. Because a certain percentage of renters are known to treat the first notice they get from their landlords not as a warning or a summons to court, but as a threat that they’ll get kicked out unless they pack up and go, it can look in some places as if no moratoriums ever existed.

The volume of cases in more normal times overwhelmed courts to such an extent that verdicts proceeded on what seemed like assembly lines. The situation would have overwhelmed the courts if it weren’t for default judgments, which occur when one side fails to show up in court. That side is almost always the tenant.

In Philadelphia’s Courtroom 3, when there’s no tenant present, Judge Conroy, a solidly built, ginger-haired man in a black robe and matching face mask, glances at the wall clock and calculates how much time has passed since the hour the tenant was asked to appear. The proceedings are constantly behind schedule, so the judge will likely determine it’s late enough that waiting any longer would be fruitless. The gavel comes down. The whole thing takes a minute, tops. Default judgments make up one-third of Philadelphia’s eviction cases.

Though tenants seem to have a chronically hard time showing up, the landlord is almost never there either. That’s because an attorney usually handles the property owner’s case. Philadelphia landlords were represented by legal coun-

sel in 82 percent of eviction cases from 2015 to 2020, according to a study by Community Legal Services. By contrast, only 10 percent of tenants had attorneys. And that’s an impressive rate of lawyering up compared with other cities. Only 4.4 percent of Detroit tenants in court had lawyers in 2017, according to financial advisory firm Stout Risius Ross. In Kansas City, 1.3 percent of tenants were represented from 2006 to 2016, while 84 percent of landlords had lawyers, according to the KC Eviction Project.

Say what you will about the legal profession, but it can be handy to have an attorney standing next to you when you’re facing a judge. Landlords won 99.7 percent of Kansas City eviction cases that made it to court in 2017. That’s not a typo.

Given this context, the number of default judgments makes more sense. “Eviction court has been a lopsided forum for so long that a lot of tenants feel like, what’s the point in showing up,” says Eric Dunn, director of litigation for the National Housing Law Project.

To help recalibrate the scales of justice, Philadelphia, like some other places, has made room for a handful of nonprofit organizations to provide free legal counsel to tenants whose incomes fall within a certain percentage of the federal poverty line. To make sure clients qualify, attorneys carry around a cheat sheet that does the math for them. Demand overwhelms resources, even with the COVID-reduced caseload.

Community Legal Services, one of the lawyer groups, says it gets as many as 50 calls a day.

For tenants who come to court without first consulting counsel, the groups provide on-site representation they call Lawyer of the Day. There are usually two or three of them in court. The advocacy has to be instant, as the tenant usually has about 20 minutes to relate the particulars of the case and, with the attorney, devise a defense. No other legal proceeding in the U.S. with such dire consequences has this kind of supermarket-sweep frenzy. But just having professional support makes a difference.

“It’s very scary in the courtroom,” says Leslie Stokes, a nursing assistant and single mom of four who worked out her landlord issues with the help of a Lawyer of the Day. “I feel like they’re family.” Stokes’s attorney, Kadeem Morris of Community Legal Services, says about three-quarters of his cases end up being settled before they reach a judge. “Tenants come to court in crisis,” he says. “Landlords have something the tenants need, and there will always be an imbalance. I prefer to go in front of a judge only if my client can get a clear judgment in their favor.”

FOR TENANTS, EVICTIONS CAN be devastating. To be poor is a crime in this country, says one tenant advocate. Even if the court’s judgment goes their way, an eviction filing—just the filing—can show up on background checks for seven years, making it harder to rent again. That can be crucial when the alternative is a highway overpass. “It’s a lot cheaper

MAR /APR 2021 THE AMERICAN PROSPECT 51

52 PROSPECT.ORG MAR /APR 2021

lie awake nights thinking about when they’ll have to double up on payments or face a balloon payment at the end of the term. They fret over property damage they can do little about, and they loathe the paperwork they have to complete for their tenants to get rental assistance that sometimes never comes.

And they say they’re sick of policymakers determined to help tenants without taking them into account.

“We have a hard-left-leaning group of city councilpeople who really have it out for the landlords,” says Greg Wertman, president of the Homeowners Association of Philadelphia, a small-landlord advocacy group. “I’m not saying there aren’t good tenants out there. I’m saying why are we protecting the bad ones?”

Organizing nonprofit groups to help distribute rental assistance and putting together a diversion program to work out solutions helps landlords as well as tenants, says City Councilmember Helen Gym, whom Philadelphia Magazine called the most popular politician in town last year. “The pandemic needed bold and visionary action and I think Philadelphia is a model of that,” she says. “In a city where evictions were devastating, we’ve shown there’s a different path.”

But there’s no doubt smaller landlords have had a tough time. Nationally, 40 percent of rental units are owned by individual investors, according to a Brookings Institution study.

Many of them bought property to supplement retirement income or to help pay their own mortgages. A month or more without collecting rent is enough to push many of them to the brink. Rental assistance, if it comes at all, can be too late.

Some advocates say they worry about the availability of

COURTESY REBECCA GOINS

to pay someone’s rent for a month than pay for a shelter stay,” says Nick DiNardo of the Legal Aid Society of Greater Cincinnati. A homeless shelter in New York City in 2018 cost $187 a night for a family and $117 for a single adult, according to data compiled

by Baruch College.

Of course, not all evicted tenants find themselves homeless. But working 40 hours a week for Pennsylvania’s $7.25 minimum hourly wage will yield a monthly gross of $1,160, which after taxes would pay for a one-bedroom, as long as you don’t eat or turn on the heat that month. Forget about being able to come up with first, last, and security. In July, Philadelphia’s minimum wage goes up to $12 an hour, but it’s still a question whether the extra money compensates for the city’s higher rents. The answer might be a subsidized apartment, but landing one is like hitting the Powerball jackpot. Even with federal programs and thousands of housing agencies across the country catering to folks unable to pay rent at full market rates, only one in four qualifying American families get the housing help they need.

Skin color is the surest indicator that you may one day have all your earthly possessions sitting on the sidewalk in Hefty bags while your former landlord changes the locks. In Philadelphia, Black people occupy a little more than 40 percent of the city’s 280,000 rental units but are more than 60 percent of eviction defendants, according to the Eviction Lab. In 2019, the filing rate remained more than twice as high in Philadelphia’s Black neighborhoods than in predominately white ones, according to a report from the Reinvestment Fund, a policy research firm. The statistics are just as dismal in other American cities. Black women have it worst of all. As Matthew Desmond, a founder of the Eviction Lab and author of Evicted: Poverty and Profit in the American City, put it: Poor Black men are locked up; poor Black women are locked out.

Some of the more optimistic housing advocates say the pandemic gives the country a chance to fix the eviction process and sketch out better ways to keep roofs over people’s heads. “The future depends entirely on what we do in the next few months,” says Diane Yentel, president of the National Low Income Housing Coalition. “If we were to have a system where housing assistance was available to all eligible people who needed it, we wouldn’t be in this crisis in the first place.”

Still, Philadelphia landlords say the city’s eviction restrictions go too far. They bemoan tenants who say they can’t pay rent because of COVID, but are still working and haven’t suffered any obvious financial pain. They complain about negotiating forbearance on their mortgages, and say they

Rebecca Goins is a homeless landlord with a squatter tenant who refuses to leave her house.

low- and moderate-income housing if landlords get fed up and sell to bigger, out-of-town property owners, who have the deep pockets to accelerate gentrification. Even though tenant activists, such as Kaelin Mae Miller of the Pennsylvania Landlord Watchlist Project, show little mercy—“Evicting in a pandemic can happen under any landlord, big or small,” she says—many small landlords are in a different financial situation than corporate real estate managers. “The shape some of these folks are in is not that much better than their tenants,” says Kenneth L. Baritz, a longtime lawyer for landlords in Philadelphia.

Rebecca Goins, one of Baritz’s clients, is an extreme example. Goins, 34, became a foster kid at two, lost her birth mother at eight, and worked for years to save enough to buy a duplex in Northeast Philadelphia in December 2015. She rented the ground floor to a foster care agency that used the apartment for housing older teenagers ready to graduate from the foster system. She thought of it as giving back.

Goins lived on the second floor until March 2020, when she had back surgery and needed live-in help. She moved in with a friend. An old high school acquaintance begged her for a place to live. “He looked like he would cry when I told him he could move into my apartment,” Goins says. They agreed on a month-to-month lease. Goins planned to return home September 1, but her tenant refused to leave, she says, and stopped paying rent. She hired Baritz, whom she says she couldn’t really afford. Goins filed for eviction, but because she hadn’t registered as a landlord she couldn’t legally force him out. She now says she was duped and considers her former classmate a squatter.

“He’s sleeping in my bed,” she says. “He’s eating off my dishes.”

Attempts to reach the tenant were unsuccessful. The next hearing is in May. Meanwhile, Rebecca Goins is a homeless landlord.

“I’ve been doing this for 45 years,” her lawyer says. “This situation is new.”

“There’s a lot of people screaming for the tenants,” Goins says. “Nobody is screaming for me.”

BACK IN COURTROOM 3, Marisol Santiago is fighting one

of the city’s bigger landlords to stay in her apartment. Her flaming-pink hair and bright-yellow sweatshirt provide wel-

come color in a courtroom dominated by the dark blue of lawyers’ suits and the putty-hued walls.

The windows of the courtroom look out on Philadelphia City Hall, the city’s tallest building until 1986, resplendent in its acid-trip limestone statuary and its 37-foot bronze replica of William Penn at its zenith. Gazing at this psychedelic wonder of civic design, which took more than two decades at the turn of the 20th century to complete, it’s hard not to see the dingy Courtroom 3 as a wordless but eloquent comment on what the city thinks of the judicial proceedings that go on there, even if the stakes are high for tenants.

Santiago’s case takes less than a minute to come to a verdict. Her Lawyer of the Day, Vikram Patel of Community Legal Services, reveals that Santiago’s landlord never bothered to renew his rental license, annual fee of $56 per unit.

For the first time all day, the tenant wins.

“It actually feels amazing,” Santiago says.

But there’s little time to celebrate. Santiago says her landlord has taken her to eviction court four times since 2016 and she knows he’ll try again. She’s had enough. She says she’ll have to move. The only alternative would be staying in her apartment and waiting for the knock on the door.

Bob Ivry is an award-winning reporter and editor based in New Jersey.

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CULTURE In Bezosworld Amazon achieved its world-historical dominance thanks to failed policy and government largesse. BY ALEXANDER SAMMON B

J

O O

eff Bezos is unique among his cohort of robber barons.

Unlike Bill Gates, he is not really given to global-health, humanitarian, or philanthropic endeavors. He was one of the only American billionaires to resist signing the Giving Pledge, a soft commitment to give away half of one’s wealth that none of its signatories have gotten anywhere near to observing thus far. Mark Zuckerberg endowed a major American hospital; Andrew Carnegie founded a prestigious American college.

No one is checking in at Bezos General or enrolling at Bezos U. His ex-wife has been aggressively generous with the family fortune post-separation; Bezos himself has not.

After Henry Ford handed off the presidency of Ford Motor Company, he began work on Fordlandia, his idealized society carved out of the Amazon rain forest, drawing on his development of Dearborn, Michigan. Bezos, at a similar age and endowment and recently “retired” from Amazon, has made no such commitment. He has extraterrestrial interests, but seemingly only by process of elimination. “The only way that I can see to deploy this much financial resource is by converting my Amazon winnings into space travel.

That is basically it,” he said in 2018.

What motivates

K

S

Bezos? A Wall Streeter by trade, he moved into a house with a garage so he could claim to have started Amazon in a garage. He

chose Seattle, because Washington was small, and no sales out of state would be subject to sales tax. He sold books, not because he cared about literature, but because there were a lot of them. His mission was not to deliver Eden, but to create an empire. “Right a social wrong?

Are you fucking kidding me?

Jeff Bezos is a straight-up libertarian,” was how early Amazon

investor Nick Hanauer put it.

Amazon is the world’s fourthmost-valuable company, which drastically understates the enormity of its operation. In 2005, when the company introduced Amazon Prime and free twoday shipping, it had just three American warehouses. Now, it is responsible for 50 percent of all e-commerce. Amazon has overhauled retail, cloud computing, groceries, logistics, entertainment, newspapers, pharmaceuticals, and even doorbells. It’s the second-largest private employer in the United States, and that doesn’t count its extreme reliance on subcontractors. According to one estimate, as many as 82 percent of U.S. households have Amazon Prime, and more people use it than voted for either major-party candidate in the most recent presidential election. Which is to say: Jeff didn’t need a patch of tropical rain forest to enact his vision for society. Bezosworld is a place on Earth, and we’re living in it.

Alec MacGillis takes full stock of what exactly that world looks like in his new book Fulfillment: Winning and Losing in One-Click America. Calling on a sweeping array of personal vignettes and tracing out lengthy historical through lines, MacGillis chronicles life across Amazonia through the eyes of drivers, pickers, sorters, corrugated-cardboard manufacturers, politicians, lobbyists, activists, artists, and more.

Fulfillment also tells the story of how Bezos built Bezosworld.

To understand Amazon is to understand trade policy, deindustrial-

MAR /APR 2021 THE AMERICAN PROSPECT 55

CULTURE

ization, the collapse of unions, the demise of antitrust enforcement, the death of newspapers, campaign finance laws, the history of lobbying, real estate prices, regional inequality, and tax policy. Amazon, of course, is the Everything Store; is it not, too, the Everything Story? What part of America’s economy, its political climate, its empire in decline, or its spiritual injury doesn’t factor in?

And if this chapter in our history is new, is it better?

F

ulfillment begins with the pseudonymed Hector Torrez moving into a basement.

Torrez once made $170,000 a year doing white-collar tech work. Now he makes $15 an hour at an Amazon warehouse, moving boxes in the dead of night, physically grueling work made worse by the coronavirus. Torrez has likely been exposed repeatedly, but the company has not made any effort to inform or protect workers.

Tales of downward mobility recur repeatedly in the book. Todd Swallows, whose father ran a reasonably remunerative trucking business in Ohio, spends a decade bouncing around at low-wage jobs before finally settling in as a temp at a plant making cardboard Amazon boxes, which pays just $10 an hour, the same rate he was getting as a 17-year-old at a pizza joint. Bill Bodani Jr., a retired union worker, works a forklift at a warehouse for $12 an hour, at the very same Baltimore site he once worked for Bethlehem Steel at $35 per. We know it’s true, because we know that wages, especially for people outside of the top 10 percent of earners, haven’t budged in 40 years, when they’re not going in reverse.

Worse, Jody Rhoads, who drives a pallet mover, gets accidentally killed in a Pennsylvania warehouse. She’s not the only worker whose story in the book ends in gruesome death.

Repeatedly, Amazon does not inform fellow workers, or their families, of these outcomes. Sometimes regulators help the company craft a credible, exculpatory explanation.

First- and third-person accounts of Amazon’s warehouses of horrors have become books, magazines, podcast episodes, and more. MacGillis

56 PROSPECT.ORG MAR /APR 2021

FULFILLMENT: WINNING AND LOSING IN ONECLICK AMERICA

BY ALEC MACGILLIS

Farrar, Straus and Giroux

leaves unsaid that this was not Amazon’s invention. Warehousing was low-paid, grueling, and heavily reliant on temp workers before Amazon became shorthand for the entire industry. Workers at the Walmart warehouse cluster in Will County, Illinois, are no better or worse off than their counterparts at the Amazon cluster up the road. If the company has contributed any innovation to the sector, it’s the amount of technology it has committed to surveilling employees and minimizing their bathroom breaks.

In MacGillis’s telling, where it happens is as important as what happens. The small cities of Ohio and Pennsylvania thrived under the monopolistic giants of the industrial age, manufacturing steel and iron and the products they went into.

These towns have not been passed over by Amazon. But the new jobs are terrible, worse than their previous employment at long-gone manufacturers and newer firms run out of town by the Amazon machine. Rural and exurban Virginia has received data centers, which consume a lot of energy but provide no jobs at all.

And even if Amazon doesn’t show up, the corralling of third-party sellers onto its platform can savage the local economy from a distance. El Paso, far from the Rust Belt, has seen its office supply sector decimated, as small-business owners are forced to pay extortionate percentages of their sales to the company, if they can manage to get their prices low enough to beat Amazon’s own submarket rates. By 2018, Amazon’s cut of third-party sales made up a fifth of its revenue.

Meanwhile, places like Seattle, Manhattan, and Washington, D.C., don’t have to store the stuff. Instead, they get to house the programmers, lobbyists, and white-collar workers who make the real decisions—and the real money. Like its goods, Amazon funnels money out of forgotten places and into the gilded urban centers of choice, helping contribute to the stunning rise in real estate prices and the cost of living. Which means that people who thought they had nothing to do with the company, like Seattle artist Milo Duke, one of

the book’s closest captures, are being chased out via soaring rents, in houses lapped up as investments by wellpaid white-collar workers.

The warehouse clusters have opioid addiction and pollution; the centers of capital get gentrification and platitudinous liberals. One area votes for Trump, the other for Biden. To tell all of that at once requires a wide scope, and sometimes the aperture does seem too wide (I’m not convinced that we need to know about the early career of David Rubenstein, who founded the Carlyle Group and then became president of the Economic Club of Washington, which eventually hosted Jeff Bezos for an event), but it allows us to see that this is indeed a closed loop. Amazon really is that big.

A

mazon was hardly the only company to think up selling things over the internet—we could just as easily be talking about buy.com. What set Amazon apart was its merciless arbitraging of the American tax system, novel not in its conception but in its astonishing scale.

From the outset, the company refused to levy sales tax on almost all of its website orders, giving it an insurmountable pricing advantage over brick-and-mortar retailers. The company pushed this to extremes, putting warehouses just across the border of states that had the temerity to suggest it should pay taxes, and printing business cards for employees without the company name to obscure the workers’ presence. By the time America ditched the fanciful notion that sales tax evasion equals innovation, it was 2018, when the Supreme Court mercifully compelled e-retailers to collect taxes on in-state sales via a 5-4 decision. But at that point, physical retail was already deep into its well-catalogued apocalypse. And Amazon had spent over two decades draining astonishing resources from state and local governments, which in turn became less and less capable of regulating companies like Amazon.

If only that were all. Amazon double-, triple-, and quadruple-dipped in the public purse. It engorged itself

RON ADAR / SOPA IMAGES VIA AP

CULTURE.

on massive government contracts, running huge data storage programs for the Pentagon and building websites to sell governments pencils and other basic items. When it came time to expand to fulfill promises like two-day shipping, Amazon demanded public subsidies for the new facilities, threatening implausibly to otherwise build them elsewhere. Soon, already enervated state and local governments were actively paying Amazon to build warehouses and data centers, situated right alongside the public roads and water pipes and power lines municipalities spend billions to create and maintain, where the company had to build

and expand regardless. MacGillis chronicles these tax deals in excruciating detail. Governments arranged sundry property and payroll tax abatements, gave the company land for free, or kicked in straight-up cash. Amazon even created a secret internal target of $1 billion per year in local tax subsidies.

When a delivery route was prohibitively expensive, Amazon would simply let the publicly funded and price-controlled United States Postal Service handle it. And, of course, the federal government was already generously subsidizing the company’s rock-bottom wages. In Ohio, 1 in 10 Amazon employees is on food

A rally for Amazon warehouse workers attempting to unionize. In at least five states, Amazon is one of the top employers of food-stamp recipients.

stamps; in at least five states, the company is one of the top employers of food-stamp recipients.

If Bezos had any particular ingenuity, it was in realizing that not only could Amazon avoid paying taxes to get a leg up over its competitors, but it could rely on witless local, state, and federal government representatives to actively grubstake the company’s growth. As a result, in 2018 Amazon contributed $0 in corporate tax on $11 billion in profit, and actually bagged a $129 million tax rebate. “[F]rom 2009 to 2018, the company paid an effective tax rate of 3 percent on profits totaling $26.5 billion,” writes MacGillis. Amazon wove a

MAR /APR 2021 THE AMERICAN PROSPECT 57

CULTURE

new social fabric by threading an astonishing number of loopholes in the American tax system.

And the company took that money right back to the nation’s capital in the form of lobbying. “Between 2012 and 2017, Amazon’s spending on lobbying quintupled; by 2018, it had the largest lobbying office of any tech firm in Washington,” MacGillis notes.

Bezos also bought up the city’s paper of record, The Washington Post, for $250 million, and didn’t meddle prominently in its affairs or offload its staff, securing him favorable status from the city’s press corps. It was an ingenious stroke of shadow lobbying, earning implicitly favorable treatment by flattering the fourth estate.

What becomes clear, finally, is that Amazon is a creation born of failure.

Failed policy on trade, labor, and competition; failed ideas on the role of government in American society; a failed press corps that didn’t meet the moment with a sense of rightful opposition. A man who loves small government built a company on the bedrock of government largesse, and now it sits as a quasi-government, taxing every economic transaction for its own corporate treasury. There’s a temptation to believe that all these economic and social forces coincided to create this situation, but they did not. Bezos did this. And we, via our elected representatives at all levels of government, assisted him. We did it to ourselves.

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oday, Amazon is a behemoth of such incomparable size that it can treat government as a subordinate rather than a rule-setter.

When New York Attorney General Letitia James announced she’d been investigating workplace safety concerns at the company’s Staten Island warehouse, they sued her in a failed attempt to stop her from bringing charges, and asked the court to force her to declare that she does not have authority to regulate workplace safety. It was a stunning act of preemption, one that announced a new era of Amazon corporate citizenry, gnashing teeth behind the smiley face logo.

Amazon’s vision synced perfectly with the pandemic. As we stay at home watching caseloads and real estate prices soar, packages pile up on

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MacGillis’s book demonstrates that Amazon is a creation born of policy failure.

the doorstep and imperiled workers take more and more life-threatening risks. Do we like living like this? Is this definitely progress? Something is clearly amiss in American society, where lifespans are plummeting and the suicide rate inches ever higher.

Maybe going to the store, talking to the checkout person, and paying sales tax wasn’t so bad.

What, then, can be done? Directing enough resources to aggressively enforce workplace safety standards would be a good start. A resurrection of organized labor would make a big difference, which is why Amazon has so fiercely opposed union drives. Some semblance of an antitrust regime would certainly go a long way. We could spin off Amazon Web Services, the company’s cloud computing arm that has become so profitable that it helped underwrite the rest of the business. (And gave

it a deeply anticompetitive advantage. When companies come to AWS, Amazon knows they’re growing; if it’s a rival, Amazon can act accordingly.)

But with an empire built and sustained by public money, reliant on public infrastructure, and altogether imbricated in American life, it’s time to think seriously about one of the most forbidding words in American political discourse: nationalization.

Amazon has worked hard to position itself as a public utility—think about how it has petitioned to facilitate the vaccine rollout. Why shouldn’t we treat it as we would any other?

Essential public infrastructure is very much the ambition Bezos had from the outset. That, presumably, and getting rich. With the latter entirely secured, it’s time for the rest of us to reclaim the giant we’ve unwittingly bred. n

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Change Our Minds, Change the World Two new books on the false narratives undermining public policy BY ZEPHYR TEACHOUT B

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magination drives policy, and until we address deeply rooted yet flawed presumptions embedded in our political imaginations, we’re stuck with austerity, fragility, and inequality. That’s the core argument of two major books by Heather McGhee and Mariana Mazzucato.

McGhee and Mazzucato argue that two separate false constructs must be directly and explicitly addressed. For McGhee, it’s the belief that gains made by Black people must mean white people’s loss; for Mazzucato, the belief that government’s job is to reactively correct market failures, instead of being an exciting, creative force.

The books fit together like pieces of a puzzle. The failure to take bold public action with real investment in communities started in the 1970s, alongside an ongoing civil rights backlash. Together, McGhee and Mazzucato seek to overthrow both these frameworks, and offer a vision of an activist government with the drive to work to everyone’s betterment.

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cGhee’s outstanding new book, The Sum of Us, argues that zero-sum thinking is behind decades of unnecessary suffering for all Americans, white, Black, and brown. While it may seem obvious how racism, and racialgroup competition, hurts Black Americans, she shows how it also hurts most white people.

McGhee, the former leader of the think tank Demos, peppers her deeply researched causal argument with intimate moments taken from three years traveling around the United States, talking to mostly white people who have been beaten up by America’s policy failures, and connecting their struggles to strategically deployed racial divisiveness.

The figurative device at the heart of The Sum of Us is a drained swimming pool. In the 1950s, parents

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who had spent their summers lounging around public swimming pools suddenly demanded that their cities and towns shut them down.

Cement filled what had once been a center of joy and community and relaxation. Communities drained these pools to avoid integration, and went to court (and won) to defend their right to do so.

The swimming pool example reveals the first way racism hurts white voters. It leads them to oppose public programs when they have to share them with people of color, even if that leads to those beneficial programs shutting down.

A second effect of racial stereotyping and group identification is the zero-sum belief, which leads many white people to believe that they are harmed by anything that helps Black people. McGhee shares research showing that this does not work in the other direction; Black Americans do not assume that they are in competition with their white counterparts. She argues the zero-sum approach toward racial advancement has been a major driver behind our failures to fund higher education, address climate change, provide affordable housing, protect the right to vote, and provide health care to everyone.

A third effect is that white people—here McGhee highlights those in power—aren’t able to identify broken policies. The tendency is to ignore warning signs from communities of color, coding them as “their fault” instead of as a systemic failure. When the canary in the coal mine dies, they don’t treat it as an oxygen problem when the canary is Black.

For instance, 9.3 million homes were lost in the Great Recession, what McGhee calls the “far-reaching and permanent” impact of the “explosion on Wall Street.” This explosion led to metaphorical contagion—lowered home values, lowered

THE SUM OF US: WHAT RACISM COSTS EVERYONE AND HOW WE CAN PROSPER TOGETHER

BY HEATHER MCGHEE

One World

MISSION ECONOMY: A MOONSHOT GUIDE TO CHANGING CAPITALISM

BY MARIANA MAZZUCATO

HarperCollins

tax bases, weakened school funding and public services—and literal contagion, like demolitions of blighted properties that sent lead toxins into the atmosphere, as well as a rise in suicide, increased morbidity, and declining fertility.

There’s no question that homeowners of color were disproportionately impacted by the Great Recession, mainly because Black and Latino homeowners had more wealth attached to their homes. But in raw numbers, most foreclosed homes were white-owned. McGhee interviews some of the devastated victims. We feel we are sitting with her as she talks to Amy Rogers, a white woman who has gone from a homeowner with a city job to losing most of her belongings and working three jobs to make $24,000 a year, anxious about whether she’ll be able to pay rent.

The proximate cause of Amy Rogers’s precarity looks like a bad mortgage. The ultimate cause, McGhee argues, was a series of choices in the financial sector dating back to the 1840s, where racism and greed combined to create systems that exploited both people of color and white Americans. Clear warning signs of the Wall Street explosion were there by the early 2000s. The United States could have prevented the crash, McGhee says, if white decision-makers had translated abuses of Black homeowners as abuses instead of seeing them as something happening to the other.

In other words, racism cost Amy Rogers her house. White people should want to address racism not just because it hurts others, but because it is hurting them.

What is to be done? Racial identification and zero-sum thinking is a social fact. McGhee argues that, to erode it, lawmakers, organizers, and thought leaders must present an alternate framework. Research that McGhee commissioned when at Demos shows that a huge number of white Americans are more likely to support policies when race is explicitly addressed. They are more supportive of a policy that “puts the interest of working people first,” whether white, Black or brown” than

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a policy that “puts the interests of working people first.”

McGhee is speaking directly to white people who don’t talk about race when they talk about policy, especially those who believe that emphasizing racial salience will increase zero-sum thinking, and make it harder to get more public investments. That’s a dangerous approach, she argues. Not talking about the racial impact of policies, when racism has been the defining feature of American political life for hundreds of years, has the impact of ceding the argument to the zero-sum crew. It also builds up false stories

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(see the infamous “welfare queen” trope) and leads to false explanations of current inequality, explanations that put the blame on those who are struggling.

There is a place for zero-sum thinking, of course, as McGhee demonstrates throughout the book.

When it comes to competition between Wall Street or corporate monopolies and all Americans, the big guys really are taking a giant share of the pie at the expense of the rest of us. But unlike the zerosum thinking about race that dominates our current thinking, the Wall Street/monopolist concept

The figurative device at the heart of The Sum of Us is a community swimming pool, drained to avoid integration.

is true. They benefit directly from racial division.

When, instead of silence, explicit connections between races are emphasized, it leads to what McGhee calls the “solidarity dividend.” It is a brilliant book, and its argument is liberatory. Truth-telling about race and the opponents of progress, and collectively building toward a community-based, multiracial future, doesn’t mean losing public-policy battles—it means gaining solidarity.

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have been a longtime admirer of Heather McGhee, ever since I got to work with her in 2009–2010,

R . C. HICKMAN PHOTOGR APHIC ARCHIVE, THE UNIVERSITY OF TEXAS AT AUSTIN

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when I was a new associate professor and she was the director of the Washington office at Demos, the think tank she later ran. She gave me guidance in D.C. etiquette and credit default swaps. During that time, we both attended an important event at the Roosevelt Institute called “Make Markets Be Markets,” with speakers including then-professor Elizabeth Warren and Joseph Stiglitz.

While economist Mariana Mazzucato would likely have agreed with many of the particular proposals put forward at the event, the title would have attracted her maximum ire, as her new book about political imagination, Mission Economy: A Moonshot Guide to Changing Capitalism, explains. The phrase “make markets be markets” presupposes a baseline functioning world of markets, which have the job to innovate, create, drive, and build. Subsequently, the job of government is to correct misfires in all of this generative activity, and then, only when absolutely necessary.

This market failure theory (MFT), Mazzucato argues, is wrong, dangerous, and getting in the way of a thriving economy. Government has been unfairly cast as an unimaginative, reactive partner or disciplinarian, constantly taming and filling in the gaps of the private sector, which may be potentially dangerous but is also the active, leading edge to which we owe all of our gratitude. In our current mental map, governments just “derisk and facilitate.” In reality, only the government has the capacity for radical transformation of our economy.

We must imagine government differently, and doing so requires us to also imagine markets differently. There is no such thing as the Platonic form of the market, which the government can bring about through tinkering and nudging.

Instead, Mazzucato argues, there are things that need doing, and the government should do them, not just in the face of a “market failure,” but because they are valuable, important achievements.

Mazzucato’s figurative device is the trip to the moon, which takes on new life in her very able hands.

She uses the Apollo program, where

aeronautics, textiles, electronics, and medicine joined together in a grand mission that had extraordinary success and thousands of by-products, kick-starting technologies that are used throughout society today. This was not the government “regulating” moon travel, or “facilitating” it, but leading it, embracing the risk and uncertainty.

When we talk about public-private partnerships, we’re often in the world of Tim Geithner circa 2009, where big hedge funds are given a sweetheart, low-risk deal in exchange for helping out a little. But Mazzucato imagines aggressive project management on the government side, engaging private industries on an agile, as-needed basis.

What happened to the government that led that fight to the moon, she asks? Since Reagan and Thatcher, the state has been typecast as slow, bureaucratic, and reactive, and the private sector as fast, flexible, and creative. This typecasting shapes our bizarrely low expectations from the state. It’s as if we thought the role of cars was to make music instead of drive. Inasmuch as the market failure theory has a tinge of morality to it—you’ve heard the peculiar phrasing about what government should and shouldn’t do—it suggests that driving a car approaches the sinful. Why not drive the car? Why not go to the moon? Why not, in the last year, manufacture COVID-19 vaccines directly? Why spend all our time nudging markets when, in many cases, the state is better equipped, and state involvement will have enormous innovation benefits?

The MFT is not a single thesis, but a worldview that leads to a series of myths. Mazzucato punctures the idea that outsourcing improves effectiveness, or that government should be run like a business. These are all lazy theories that haven’t worked out in practice. Cost-benefit analysis, another mythically superior concept, treats policy questions as if they are scientifically answerable, instead of asking basic political questions like “What society do we want?”

Mazzucato is not interested in the government running all aspects of industry ad infinitum, but vigorously

leading by ambitiously setting targets. The line between the two isn’t always clear. What’s also unclear is whether the kind of public-private partnership she envisions can work in the modern world, where the corporation is (as she knows) part of a massive, financialized web.

She is at her most persuasive with her impatience with our habits of fiddling around the margins, relying on corporate social responsibility to address massive problems that we have the power to take head-on.

We must put government back in the driver’s seat, in fact and in our imaginations.

Mazzucato’s book brought to mind the big push at the beginning of the pandemic to get Donald Trump to use the Defense Production Act. Our political imagination was limited to demanding that the president use an existing law to nudge markets, instead of immediately calling on the government to produce masks, ventilators, and other key forms of equipment itself, to take on the mission of the moment.

The synergies between the two books are resonant. For example, the American public investments that Mazzucato holds up as models of public missions with big privatesector investments—from the mission to the moon to DARPA-backed funding that led to the internet—are examples of an investment where the imagined recipients and heroes were white.

But while they are both critiques, these are profoundly hopeful books.

If we can recast government as a creative, mission-driven force, if we identify the deep racial divisiveness underpinning austerity arguments, if we recast a booming multiracial society as an equal boon for all races, then the possibilities for a thriving economy and democracy open up, letting us imagine a country we have never yet seen. n Zephyr Teachout is a law professor at Fordham University and author of Corruption in America: From Benjamin Franklin’s Snuff Box to Citizens United and Break ’Em Up: Recovering Our Freedom From Big Ag, Big Tech, and Big Money.

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Reconceiving the American Future A new book argues that the vision of the United States as a ‘majorityminority’ society is a statistical illusion. BY CHRISTOPHER JENCKS B

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he idea that whites are inexorably becoming a minority in the United States has become a fixed assumption of American politics, celebrated by some on the left and feared by many on the right. But in this new book, the sociologist Richard Alba, a leading scholar of immigration and ethnicity, tells us that the prospect of America becoming a “majorityminority” society is a statistical illusion and the wrong way to think about how America is changing.

Responsibility for this perception, Alba argues, falls mainly on what he calls America’s “demographic data system,” which is controlled by the federal Office of Management and Budget. OMB’s rules require the Census Bureau to classify and count individuals by ethnicity and race in ways that magnify the apparent size of minority groups relative to whites.

In 2011, the Census Bureau reported on the basis of the OMB rules that a majority of babies born in the United States were members of minority groups. The next year, the Census Bureau made headlines by projecting that America would hit a crossover point in 2043, when non-Hispanic whites would fall below 50 percent of the population. As one might expect, many white Americans found these reports alarming.

These projections, Alba explains, overestimate the number of nonwhites for three reasons. First, when people report on official forms that they are both Hispanic (in answer to a question about ethnicity) and white (in answer to a question about race), the Census Bureau counts them as members of minority groups, not white. The media follow suit.

Second, since the 2000 census, people have been able to report more than one race, and most who do have reported being both white and some other race. These people, according to OMB’s rules, have been counted in the nonwhite category, so as not to diminish minority groups for

62 PROSPECT.ORG MAR /APR 2021

THE GREAT DEMOGRAPHIC ILLUSION: MAJORITY, MINORITY, AND THE EXPANDING AMERICAN MAINSTREAM

BY RICHARD ALBA

Princeton University Press

purposes of judging discrimination.

OMB made this decision at the behest of civil rights groups.

Counting all such people as nonwhite, however, departs from American social practices. Although American law in the late 1800s began following a “one-drop” rule in classifying people as Black, it has not followed that rule for Native Americans, Latinos, or other minorities.

But census data now count those minority groups as though they were subject to a one-drop rule too.

Third, when a non-Hispanic white has a child with a member of some other racial or ethnic group, the census relies on the parents’ reports of their children, which usually respect both sides of the family. The census counts the children reported as mixed (and all of the child’s projected descendants) as nonwhite. This practice has enormous implications for population projections because of the surging number of Americans from mixed backgrounds. “By the 2050s,” Alba writes, “one of every three babies with white ancestry will also have Hispanic or racially nonwhite ancestry when second-generation mixes are counted.”

The trouble with the “majorityminority” narrative, in Alba’s view, is that many people whom the census is counting as minority belong to an increasingly diversified “mainstream.” During the 20th century, the white Anglo-Protestant mainstream diversified with the integration of Catholics and Jews. Today, Alba argues, the mainstream is diversifying again, with the integration of more-recent immigrants and their children, including the rising number from mixed marriages with non-Hispanic whites. Alba recognizes, however, that mixed Black-white Americans face more discrimination and tend to identify with the minority side of their background and that many Latinos face barriers because of their citizenship status. He sees

whites as part of an enlarging mainstream, not a shrinking minority.

As a result, Alba wants us to stop using terms like “majority-minority” nation. His alternative is to revise the census and reconceptualize the mainstream as multicultural. This seems right.

Changing the census involves redesigning the two questions the census currently uses for ethnoracial classification. The first asks

about “Hispanic, Latino, or Spanish origin,” the second about “race.” Putting everyone who answers the first question in a minority group, even when they later say their “race” is white, puts immigrants from Spain (but not Portugal or Italy) in the “minority” category. Forcing everyone to choose their “race,” beginning with “white” and “Black,” focuses attention on color. Yet mainstream America is becoming ever more diverse, with people from other parts of the globe mixing, intermarrying,

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and living intermingled with “nonHispanic white” neighbors.

More specifically, Alba urges the Census Bureau to adopt a new version of the question about ethnoracial identity that the bureau tested successfully in 2015. That version would eliminate the first question on “Hispanic, Latino, or Spanish” origin and include that category with the other existing geographic/national ethnicities, such as “Chinese,” “Asian

to those who check off both white (or “European”) and another category.

We could count them on both sides, keeping the white numbers high to counter the threatened-white narrative while also keeping the nonwhite numbers high to provide a baseline against which to judge the equity of government or other distributions.

But if we do that, the total will add up to more than 100 percent. Although that decision seems defensible, it

positions. The census, he says, should drop the binary between non-Hispanic whites and “minorities.” The data can tell a different story. Growing rates of intermarriage and increasingly diverse neighborhoods suggest the United States is accommodating demographic change. We need to ditch the old vision of assimilation in which immigrant groups become “white,” welcome a mainstream that looks different from the old one, and

We need to ditch the old vision of assimilation in which immigrant groups become “white.”

Indian,” “Pakistani,” “Hmong,” and “Samoan” (now called “races”). It would make “Middle Eastern or North African” a separate group in this category, a move advocated by groups from those regions. Alba does not argue, but I take his suggestion to imply, that the census might then replace the color categories “White” and “Black” with “European” and “African,” and call them “ethnic,” “national,” and “geographic origins” rather than “races.”

Yet there are complications related

would complicate record-keeping, making it unlikely to be adopted.

Another possibility would be for the census to do what Alba does himself: present a range of numbers based on different assumptions, instead of a single count or projection of America’s ethno-racial makeup.

Most of all, Alba wants to change the narrative about the future. He cites studies showing that when whites are told they will become a minority, they react with fear and anger and adopt more right-wing

rejoice in the diverse multicultural nation we are creating. n Christopher Jencks is Malcolm Wiener Professor of Social Policy, Emeritus, at Harvard University and the author of such books as The Academic Revolution (with David Riesman), Inequality: Who Gets Ahead?, Rethinking Social Policy, and The Homeless. A longtime member of the board of The American Prospect, he has played a major role in the development of the magazine.

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Parting shot

“Amazon has posted anti-union messaging in bathroom stalls in its Bessemer, Alabama, warehouse, where employees are next week set to begin voting on unionization.”—Business Insider, February 3, 2021

—Matt Lubchansky

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Most of us don’t think about infrastructure all that much – until it fails.

More than 4.5 million people lost power in Texas and other states during recent winter storms. Many didn’t have electricity for days, and that caused water pipes to burst in countless homes and buildings. The power came back on, but the water didn’t.

This cannot happen again.

It’s time to modernize American infrastructure like the electric grid.

Doing so will create millions of new jobs, including in manufacturing, and literally lay the groundwork for an economic recovery.

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