A turning point for public sector unions

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Labor Day weekend is a time for last trips to the beach, first trips to apple orchards, and getting into heated political arguments over the role organized labor in the 21st century.

Ah, autumn.

This is the first Labor Day after the U.S. Supreme Court’s famous June 27 Janus decisionin which the court held that “(t)he First Amendment is violated when money is taken from nonconsenting employees for a public-sector union; employees must choose to support the union before anything is taken from them.”

The media’s instant reaction was to predict huge financial losses for unions. That’s a reasonable short-term take. A Josiah Bartlett Center right-to-know request found this summer that unions representing New Hampshire state employees stand to lose $1 million a year in agency fees they had been confiscating from non-union employees.

But the Janus ruling also presents a growth opportunity for public-sector unions.

By devoting themselves so wholeheartedly to political activism, public-sector unions have alienated members of the public as well as many government employees who might otherwise be inclined to join.

In a state like New Hampshire, where state and local government employees are often registered Republicans (including the current and immediate past chairmen of the state Republican Party), partisan political activity can serve to suppress union membership.

Yet, as Josiah Bartlett Center President Andrew Cline writes in a column published in USA Today this weekend:

“Public sector unions can serve either their members or the Democratic Party, not both. On a Labor Day weekend more than two months after a stinging Supreme Court defeat, it isn’t clear that their leaders realize this yet.”

Union leaders don’t seem to realize something critical about the Janus ruling: It created a competitive marketplace for public-sector union representation.

Now that public-sector unions can no longer rely on forced financial support from unwilling government employees, they must behave as other organizations in competitive marketplaces do.

“To win new members,” Cline writes, “they have to prove that they offer public employees a valuable service at a great price. If they do that, the can not only survive, they can also grow.”

Please read the whole column online here as you’re taking that last stroll on some sandy shore or stuffing your mouth with delicious grilled meat. It’s the perfect way to show your friends and family that you’re dedicated to maintaining the true spirit of Labor Day as they try to get you to pay attention to them.

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Diversifying New Hampshire

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New Hampshire, Vermont, and Maine are so white that if a map of the United States were colored according to the skin pigmentation of its residents, Northern New England would look like a snow-covered peak. We could go as a ghost for Halloween without even dressing up. And that’s a potential problem.

Some New Hampshire business and civic leaders recently held a conference to discuss ways to make the state more diverse. This drew nationwide media coverage, including a story in The New York Times. And a lot of shouting. When it comes to anything that touches on race, people really like to shout.

Some of the hostile reactions were knee-jerk racism. Others were labeled racist unfairly. (NHPR summarizes many of the responses here.)

We suspect that had the forum been purely a community or business effort, it would have been little noticed. But once the state gets involved in a cultural initiative, residents have a sense of ownership over it. Government involvement instantly politicizes anything.

People hear that the state is pursuing a diversity initiative, and they read into that all kinds of things. First, they hear the word “race” instead of “diversity.” That’s because the left has conditioned people to think of the latter as a code word for the former.

And because “diversity” has become a political buzzword of the left, it would be easy to assume that the end result, if not the goal, of a diversity initiative would be to make New Hampshire more politically liberal by recruiting people who have a tendency to vote for liberal politicians.

Diversity also implies cultural changes, and that always generates concern that community values will be shifted.

But the message from the forum that generated all the yelling and name calling was decidedly uncontroversial. It’s a message New Hampshire has to take seriously because the state’s future depends on dealing with diversity, broadly defined.

New Hampshire’s economic growth is probably at a turning point. Our tax policy has given us the foundation for having a great economy, but our workforce shortage is threatening our economic future. Simply put, we don’t have enough people.

(People bring not just bodies, but ideas.)

As this newsletter has pointed out before, New Hampshire’s economic growth has for decades been driven not just by low taxes, but by in-migration fueled by those low taxes. That in-migration has slowed, and that’s a huge problem.

Our population is older, our young people prefer to spend early adulthood in more urban areas with higher concentrations of young adults. This is a universal human tendency.

To grow, we need new immigrants. As the nation’s population becomes less white, New Hampshire’s whiteness becomes a potential economic problem. If the state is seen as unwelcoming to non-white Americans, a shrinking percentage of the U.S. population will be interested in moving here.

New Hampshire is not “too white” in any abstract sense. There is no perfect racial or ethnic ratio by which government can judge a state’s population. But the fact that our state is remote, rural, and largely ethnically homogeneous does pose economic challenges.

The term “diversity” has been used for so long as a political weapon that many of us lose sight of its broader meaning. The historical truth is that places that are more open to people from different cultural backgrounds are places that enjoy greater prosperity and create more complex and vibrant cultures of their own.

Great civilizations grow from trade. But it’s not just the economic aspect of trade that benefits a city, state or nation. The exchange of ideas and cultures that comes from a mixing of diverse peoples stimulates new ideas and enterprises. It essentially incubates entrepreneurship and innovation.

This is why remote, mountainous regions of the world are generally less economically prosperous than port cities and communities built at the intersections of trade routes. It’s not just that it’s harder for wagons or ships or trucks to reach those places. It’s that they don’t get to drink from the cultural stew created in the melting pot coastal cities and crossroad communities.

It turns out that diversity itself is a driver of prosperity and growth.

Granite Staters can and should discuss (or shout about) the proper role of the state in pursuing “diversity,” however we choose to define that word. There’s a case to be made that the state shouldn’t try to manage the racial or ethnic makeup of its people in any way because even taking a few small steps down that path is dangerous.

But that doesn’t mean that Granite Staters shouldn’t be concerned about the perception other people have of our great state, and their willingness to move here. Just as New Hampshire’s economy depends on tourism, its economic future depends on the intellectual, cultural and economic exchanges that will or will not take place here in the years to come. Generally speaking, our economic future will be stronger if the people who participate in those exchanges come from a broadly diverse set of backgrounds.

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State employees to save $1 million a year after Janus ruling

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The top two contributors to the re-election campaign of U.S. Rep. Annie Kuster, D-N.H., in this quarter are public-sector labor unions: the Service Employees International Union (SEIU) and the American Federation of State, County, and Municipal Employees (AFSCME). Each union has given Rep. Kuster $5,000 this quarter (not 5,000 quarters).

And until June 27, each of those unions used agency fee provisions in their collective bargaining contracts to take money without consent from public employees who did not wish to give it.

The State Employees Association of New Hampshire is otherwise known as SEIU Local 1984. As of June 27, when the U.S. Supreme Court ruled in Janus vs. American Federation of State, County, and Municipal Employees, the SEA was collecting agency fees from 2,104 state employees, according to data obtained by the Josiah Bartlett Center for Public Policy through a state right-to-know request.

An agency fee is money a public-sector union could take out of a non-member’s pay, ostensibly to cover the cost of collective bargaining. Officially, unions could not use agency fees for political activities. But the extra revenue made these organizations larger and more politically powerful, even if they never spent it directly on lobbying, campaign donations or political ads.

Mark Janus, the Illinois state employee who sued AFSME and won his Supreme Court case last month, successfully argued that being forced to contribute to the union violated his First Amendment rights not just because the union endorsed candidates and policies with which he disagreed. He disagreed with the union’s collective bargaining activities too, and its goal of pushing government spending ever higher.

The Supreme Court agreed with him that the “extraction of agency fees from nonconsenting public-sector employees violates the First Amendment.”

On the date of the ruling, 2,161 New Hampshire state employees were unconstitutionally being compelled to pay $37,913.60 per pay period to unions they chose not to join, according to state data.

From July 6, 2017 to July 6, 2018, state employees were forced against their will to contribute a total of $1,012,055.83 from their paychecks to just two unions, the State Employees Association and the Teamsters.

The payroll records show that through unconstitutional contracts that allowed the state to collect union fees from non-members, public-sector unions in New Hampshire were able to inflate their budgets by nearly 1/5 and their number of financial contributors by nearly 1/3.

This was a forced transfer of money and power from individual state employees to labor unions. That transfer compelled employees to support political positions they did not consent to support.

The Janus ruling made those agency fee clauses immediately null. As a result, individual state employees will have greater leverage when deciding whether to join a union. From now on, the choice of whether any of their pay goes to support a labor union is theirs and theirs alone.

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New Hampshire can’t freeze the timber industry in time

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Economic progress, like progress in any field, cannot be achieved by freezing the status quo in place. Government attempts to do so result only in delaying rather than advancing progress.

Following Gov. Chris Sununu’s June 19 veto of two bills to subsidize New Hampshire’s biomass power plants, three of those plants announced that they were winding down their operations. Some blame the governor for the plants going idle. That’s like blaming the National Endowment of the Arts for the demise of jazz.

Jazz, once America’s dominant form of music, in 2014 tied classical as the least popular genre. Chuck Berry, a huge jazz fan, released Maybellene in 1955, dooming the genre that put the “roll” in rock ’n’ roll.

Musical tastes changed, and no subsidy from Washington elites could’ve protected the big bands of the 1940s or the quartets of the 1950s from the rock ’n’ roll revolution.

In the economy, industries rise and fall too, moved by forces that are beyond the control of public officials or elite taste-makers.

The forest products industry in New Hampshire has suffered a decades-long decline triggered by cultural and economic changes no government meddling can reverse.

In 1957, when Berry released his classic song “Rock and Roll Music,” 7,810 people were employed in paper manufacturing in Coos County alone. By 2013, when Robin Thicke topped the charts with “Blurred Lines,” UNH’s Cooperative Extension service reportedthat 7,756 people were employed in the forest products, maple and Christmas tree sectors combined in the entire state. That year, 3,000 more people were employed in forest-based tourism occupations than in production.

(By the way, by 2013 rock ’n’ roll had all but vanished from the Billboard Hot 100, replaced by pop and hip-hop. Only one rock band, Paramore, had a year-end top 100 song that year. If only federal taxpayers had subsidized Guns n Roses….)

Cake, one of the last great alternative rock bands, had a single on its last album called “Federal Funding” in which it mocked government funding for the well-connected. Cake got it what many people don’t. Government subsidies benefit political insiders at the expense of everyone else.

No one wants loggers to lose jobs they love. But the notion that the state’s timber industry can be saved by forcing electricity ratepayers to subsidize a handful of inefficient biomass power plants was never based in a realistic assessment of the New Hampshire economy, the forest products industry, basic economics or clever alternative rock lyrics.

New Hampshire’s economy has evolved over the centuries, as all economies have done since the rise of capitalism and democratic governance. Subsidies for favored industries can only delay the inevitable, and at a high cost.

A report last year concluded that Maine has spent $250 million to prop up its fading biomass industry. New Hampshire, which has for years forced electricity ratepayers to subsidize the industry, would make its economy weaker, not stronger, by continuing this practice.

Biomass plants are in trouble because it’s cheaper to create electricity by burning natural gas than by burning wood. If forcing people and businesses to buy more expensive wood-generated electricity was good for the economy, then we would have the best economy in the country simply by passing laws mandating that people buy only New Hampshire-made goods and services.

Imagine. Instead of driving dangerous automobiles, we could all be riding around in luxurious Concord Coaches. Instead of using national airline companies, we could sail to Europe on gorgeous tall ships built in Portsmouth. Sure, it would be hugely expensive and wasteful for consumers, but think of all the jobs that would be saved!

Sadly, that’s not how the economy works. States can only hurt economic growth by forcing people to pay higher prices for locally made goods and services.

Trying to freeze some economic sectors in time is never good policy, but it’s especially bad when the state has so many job openings that it’s experiencing a severe worker shortage. The best move is to let people transition from jobs in declining industries to jobs that are in higher demand and offer a brighter future.

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Expanded Medicaid’s permanence

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The case advocates make for reauthorizing expanded Medicaid is exactly the same as the case for rejecting it: Nearly 53,000 Granite Staters are now dependent on the program.

Supporters don’t use the word “dependent.” They say people “rely on” Medicaid. Functionally, the meanings are the same, like “inebriated” and “intoxicated” or “asparagus” and “disgusting.” Expanded Medicaid has made 52,726 Granite Staters (as of March 31) dependent on government health insurance.

Of course, as the dart said to the dartboard when it complained about the pain, “that was the point.”

When New Hampshire passed expanded Medicaid in 2014, state Sen. Andy Sanborn, R-Bedford, said “I have never seen, in the political realm, any entitlement program ever end. And I think the suggestion that they would end is frankly ludicrous.”

The votes for expanded Medicaid would appear to bear that out.

In 2014, Medicaid Expansion passed the Republican-controlled state Senate 18-5 and the Democratic-controlled House 202-132.

In 2016, Republicans controlled both chambers. Reauthorization passed 216-145 in the House and 16-8 in the Senate.

This year, with Republicans again in charge, reauthorization passed 17-7 in the Senate and 222-125 in the initial House vote, with the final outcome this week so obvious that the House passed the bill on a voice vote.

Such consistent support can be explained by the program’s constituency of dependents, which reaches every community. Supporters on Wednesday roamed the State House wearing T-shirts that stated how many people in their town were on expanded Medicaid.

It doesn’t matter that the Medicaid population is not static. A UNH study found that 29 percent of New Hampshire’s expanded Medicaid population stayed in the program for two full years. The biggest reason people left was that a rising income made them ineligible. (Watch for this to eventually be the basis for an argument to further expand eligibility.)

What matters is that tens of thousands of people at any given time depend upon the government, rather than the private sector, for their health insurance. That’s enough to make it permanent.

There are only two ways New Hampshire legislators will rethink keeping this program. One is if the federal government announces a reduction in federal support so large and so sudden that the state cannot absorb the cost or reduce eligibility enough to avoid the immediate creation of a massive broad-based tax. Even then, it might stay.

The other is if the health insurance markets are reformed to the point that competition explodes and premium prices collapse, falling to levels that are affordable for low-income families. Again, even then it might stay.

OK, there’s also a third way expanded Medicaid could end. SMOD could strike New Hampshire and destroy everything.

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On housing and energy, putting consumers first

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Housing and utilities comprise the largest portion of household budgets. In only nine other states and the District of Columbia do residents spend more on those two items than Granite Staters do, per Bureau of Economic Analysis data. Yet legislators have not been keen to reduce those costs for the people who elect them.

On the contrary, they often prefer to pass laws that make those items more expensive.

So the release this week of a new 10-Year State Energy Strategy that set cost efficiency as its primary goal was a big deal. The previous strategy, set in 2014, focused on manipulating energy markets to favor expensive and inefficient priorities such as renewable energy, with little attention given to the cost that would fall to consumers.

To understand the magnitude of the shift, imagine a hippie folk rock act ditching the acoustic guitars, cutting their hair and putting out an R&B album — a good R&B album.

“Addressing energy costs is a critical goal for New Hampshire. Expensive energy – or pursuing policies that raise the cost of energy – directly and negatively impacts New Hampshire families and businesses and the quality of life in our state,” the new energy plan states. “As such, the priority of this Strategy is to organize goals around cost-effective energy policies.”

The plan does not oppose all subsidies for renewable energy initiatives. It does advocate limiting any such subsidies to the start-up period to prevent ongoing cost-shifting.

This consumer-focused approach to energy policy is at odds with several bills in the Legislature this session to continue or expand subsidies of inefficient biomass power plants. Senate Bill 446 would further subsidize biomass facilities and solar arrays. Senate Bill 365 would further subsidize biomass facilities. Senate Bill 577 would further subsidize biomass facilities.

The permanent ratcheting up of electricity rates by compelling ratepayers to subsidize politically favored businesses is a long-standing New Hampshire practice. The new energy strategy discourages this. Its focus on lowering rates has drawn praise from the state’s ratepayer advocate. Whether legislators will respond by reconsidering their support for higher rates is the question.

Local housing regulations vs. consumers

As with energy, housing costs are rising when they could be stabilizing. There is huge demand for new housing in New Hampshire, and builders are eager to fill it. The problem is that local regulations make it extremely difficult to build new homes or apartments to respond quickly to surges in demand.

Those regulations also add costs that make it hard, if not impossible, in many communities to build residences that lower-income families can afford.

New Hampshire’s average monthly rental rates are higher than Maine’s, Vermont’s and Rhode Island’s and are comparable to Connecticut’s. Average rental rates in Connecticut are only $68 higher than in New Hampshire for a one bedroom and $63 higher for a two-bedroom. Median rents in Manchester are higher than in many larger cities such as Philadelphia, Atlanta and Orlando.

With a booming economy, thousands more jobs than we can fill, and a statewide rental vacancy rate below 5 percent for 18 of the last 20 years and below 2 percent for the last years, the rate of home construction in the state should be rising aggressively. It is rising, but not at rates that would come close to filling demand. Local housing restrictions are in the way.

A fix to help builders navigate these restrictions more quickly and less expensively is offered in Senate Bill 557. It would create a housing appeals board to which developers could appeal decisions of local boards, committees and commissions. Now, appeals go to the superior court. It often takes years for an appeal of a local housing decision to reach a resolution in court.

The housing appeals board would take these appeals out of the court system and resolve them quickly. The board would be required to hold a hearing within 90 days of receiving an appeal and make a decision within 60 days of the hearing. This would dramatically speed the appeals process while eliminating expensive legal costs for both builders and municipalities (taxpayers).

At a hearing in the House Finance Committee this week, no one spoke against the bill and the New Hampshire Municipal Association did not oppose it. Nonetheless, the committee voted to refer it to interim study. It will come before the full House on Thursday.

If legislators followed the lead of the Office of Strategic Initiatives and made reducing costs a top priority in both of these areas, the impact on Granite Staters could be dramatic. Making the state a lower-cost place to live and work would bring economic benefits far exceeding any that could come from propping up obsolete power plants or ignoring the costs of local land use regulations.

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The licensing juggernaut rolls on

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Can you define “art therapy?” More specifically, can you define it well enough to criminalize the unauthorized practice of it?

The state Senate thinks it can.

This coming Wednesday, the House Executive Departments and Administration Committee continues its hearing on Senate Bill 535, to establish state licensure of art therapists. (The bill passed the Senate on March 15.)

If SB 535 becomes law, it will be a misdemeanor for any individual to practice art therapy for pay without a state license. For corporations, it would be a felony.

What is art therapy? According to Art Therapy Journal, the practice originated in the 1940s when artist Adrian Hill, being treated for tuberculosis, thought to teach art to his fellow sanitarium patients as a means of therapy. Early practitioners were not therapists, but artists who realized that the artistic process had various therapeutic uses. Only much later did art become adopted as a treatment method by therapists, as the journal recounted.

SB 535 assumes, contrary to the history of art as therapy, that highly specialized training is an essential foundation for blending art and therapy. To get a license under the bill, one would have to obtain a master’s or doctorate in art therapy and accumulate “not less than 2 years, with a minimum of 2,000 hours, of supervised experience in art therapy.”

One need not try to practice unlicensed psychology to fall afoul of the law under this bill, but merely use integrate basic psychotherapeutic principles into the creative process for the purpose of helping people feel better or cope with stress or trauma.

Not all of these techniques are a part of a new, highly specialized scientific field. “Throughout recorded history, people have used pictures, stories, dances, and chants as healing rituals,” a major 2010 review in the American Journal of Public Health concluded.

No doubt there are highly trained specialists who can do wonders with art therapy and who deserve handsome compensation for their services. The problem with this bill, as with so many licensing bills, is its assumption that anything short of the work of the most highly trained expert is so dangerous that it must be banned.

Importantly, SB 535 does not ban the unlicensed practice of psychology. That is already illegal. The bill makes it illegal to apply the principles of psychotherapy to art instruction.

In the beginning of this legislative session there was hope that lawmakers would reduce licensing burdens. Part of that hope came from the huge shortage of licensed substance abuse counselors relative to demand.

New Hampshire’s opioid addicts are going without treatment in part because state licensing requirements have kept the supply of counselors artificially low. Senate Bill 487, which mandates that the state waive licensing requirements for substance abuse counselors who have licenses from other states, was, surprisingly, not killed by the Senate. It is slowly making its way through the House.

But despite shortages in other fields, the Senate has killed bills that address similar problems. This week the Senate killed House Bill 1217, which would have reversed the mandate, passed in 2016, that all school nurses have a bachelor’s degree. Nurses in any other setting need only an associate’s degree. School officials testified that they face serious nursing shortages and that the bachelor’s requirement has made the problem worse. They were no match for the lobbying power of Big Nurse.

And as this Unnamed Newsletter has noted before, the Senate killed House Bill 1685, which would have reformed the occupational licensing process to make it less burdensome.

Maybe, like a Rolling Stones fan who unwittingly hopped into an Uber driven by a Beatles obsessive, you’re tired of hearing this tune. Fine. We’ll cue up something cooler. In just a second. First, we’ll remind you that, unlike John Lennon’s songwriting ability, occupational licensing remains a huge issue, as the number of bills dealing with it suggests. And highlighting its problems is the only way for people to understand how damaging licensing can be. Roughly a third of the U.S. workforce faces occupational licensing requirements. That figure was only about 5 percent in the 1950s. By contrast, about 11 percent of the workforce is unionized.

Licensing can be a significant barrier to upward mobility and economic opportunity. In New Hampshire, legislators continue to block reform and pass new requirements, making these problems worse. Relief typically comes only when a crisis develops, as in the case of licensed substance abuse counselors.

There are real consequences to inaction. Schools are short of nurses. Opioid addicts get worse while waiting for counselors. But requirements keep being piled on, as if everything is fine.

Things aren’t fine, and they’re getting worse. Without some action by legislators to control the growth of these requirements, they will continue to spread like a plague of job-eating, wage-eroding, state licensed locusts.

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Will the legalization craze extend to everyday jobs?

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On Tuesday, the august members of the New Hampshire House of Representatives will consider House Bill 287, which would create a commission to study legalizing prostitution. It comes with an “ought to pass” recommendation from the House Criminal Justice and Public Safety Committee. (The jokes really are so obvious, you’ve probably already thought of a better one than this newsletter would.)

HB 287 is part of a growing trend toward legalizing behavior once considered taboo or at least distasteful. From same-sex marriage to marijuana use to prostitution, government-imposed restrictions on private behavior are being abolished. There is even a new movement to make marijuana use a 10th Amendment issue and get the federal government out of it altogether.

(Honestly, 10th Amendment advocates are making a big strategic mistake here. Marijuana should be at the end of the list. It does the 10th Amendment movement no good for everyone to be too complacent after the first victory to put down the Doritos, get off the couch and continue fighting.)

While Granite Staters this year hear a lot about the pros and cons of legalizing “sex work” (that’s what it’s called in the bill), lots of other non-controversial occupations will remain illegal to practice for pay without state approval. For instance, auctioneering.

RSA 311-B makes it “unlawful” for any person to “knowingly engage in, or offer to engage in, auctioneering for a fee, commission, or other consideration unless such natural person has a valid license under this chapter or such other person is an authorized business organization.”

Unless you have a license, you break the law just by claiming you are “able to perform auctioneering.”

In New Hampshire, this is a criminal offense. Auctioneering for pay, or merely claiming the ability to perform auctioneering, is a misdemeanor for an individual and a felony for a business.

The “Occupations and Professions” section of state statutes is peppered with criminal penalties for working without state permission.

RSA 314 makes it a misdemeanor to practice eletctrolysis without a license.

RSA 323 makes it a misdemeanor to sell lightning rods without a license. (We are not making this up.)

RSA 328-H makes it a violation on first offense, a misdemeanor on second, to practice “Asian bodywork therapy” without a license.

RSA 331-A makes it a misdemeanor to engage in real estate brokerage without a license.

RSA 332 makes it a misdemeanor to “practice veterinary medicine” without a license. The statute defines “practice of veterinary medicine” as: “To diagnose, treat, correct, change, relieve, or prevent animal disease, lameness, deformity, defect, injury, or other physical or mental conditions….”

It is not always a criminal offense to work in certain fields without permission. Sometimes the state just makes it really hard to enter the field.

To become a cosmetologist, one must complete 1,500 hours of schooling or 3,000 hours of training under a licensed cosmetologist.

To become a pastoral psycotherapist, one must have a master’s in divinity, a Ph.D. in pastoral therapy, and 3,000 hours of supervised experience.

To become a “shampoo assistant apprentice,” one must first “work under the direct supervision of a licensed barber or cosmetologist for at least 150 hours” and pay a $25 fee. This is for a job that consists exclusively of “shampooing, rinsing and removing rollers or permanent rods, rinsing treated or untreated hair, and other cleansing or sink-related functions not requiring the skill of a cosmetologist or barber.”

If not the state, who will save us from unregistered shampoo apprentices?

Thankfully, some people have noticed that the state’s occupational licensing regime has become exceedingly burdensome. Rep. Bill Ohm, R-Nashua, has introduced a bill to create an occupational regulation review commission that would examine whether licensing boards use the least restrictive means to achieve their goals. It’s not as sexy a media topic as prostitution, but (presumably) it would have a bigger impact on the average Granite Stater.

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