Pay gap between men and women does not need further regulation or legislation.

According to an article in the Des Moines Register, The American Association of University Women (AAUW) issued their annual report on the “pay gap” between women and men.  According to the report, women in Iowa earn about $10,000 less per year than men. This article, and the related report, are excellent examples of misuse of meaningless statistics.  (See link below.)   Comparing the median pay for all women with the median pay for all men tells us nothing about whether or not sex discrimination is taking place. A valid analysis would compare the pay of women and men who do the same work for the same employer.  The report by the AAUW did not do that.
This report tells us more about the bias of the AAUW than it does about bias in the workplace.  As you reported, Kim Churches, chief executive officer of AAUW, said, “It’s unacceptable. There is no gender differentiation when it comes to quality, skills, and talent.  It’s time to close this gap and give every woman in Iowa and across the country the salaries they deserve.”  She advocated for more regulation.
Based on the facts given in the article, and assuming that women and men can and do perform equally, then it is fair to presume that the AAUW would agree that if any woman wants to earn the same pay as a man, then they should go for the same jobs that men go for.   When the relevant qualifications, working conditions, and job duties are accounted for, the difference in pay between women and men reduces dramatically.  The pay gap has been reducing for years.  Our current laws are working.  We don’t need to add more regulations.

Link to AAUW report: https://www.aauw.org/aauw_check/pdf_download/show_pdf.php?file=The_Simple_Truth

Advertisements

Iowa Public Employees’ Retirement System needs to be changed to a defined contribution plan.

Recently, candidates for office in Iowa have been asked to promise future Iowa public employees that they will make no changes to the Iowa Public Employment Retirement System (IPERS) retirement plan.  Instead, politicians need to state clearly that they make no promises to future employees about their retirement benefits.  The fact that IPERS is currently underfunded by about $7 billion shows clearly that we already have over-promised benefits when compared to what we expected taxpayers and public employees to pay.

(When government has a defined benefit plan, the participants seem to think that any over-funding is their asset, but any under-funding is a liability of the taxpayers.  In the past, when IPERS was over-funded, benefits were increased!)

The way to make sure that we don’t make retirement benefit promises that turn out to be more expensive than we expect to pay is to put new government employees on a defined contribution retirement plan – just like most employees in the private sector.  This will cause the unfunded liability to come due over the next 50+ years, but at least it won’t get worse.

 

 

Stop Defined Benefit Plan for Public Employees. It’s a Ponzi Scheme!

In a recent Iowa View essay in the Des Moines Register, Josh Mandelbaum wrote that Republican proposals to move the Iowa public employee’s pension plan (IPERS) away from a defined benefit plan and toward a defined contribution plan are, “ideologically driven”.  If by that term he means an ideology under which employee pensions should be financially sustainable and fair to both employees and taxpayers, then count me as ideologically driven also… and that’s a good thing.

In our political/government employment environment, defined contribution plans have mostly been significantly underfunded and unsustainable. In an actuarially sound defined benefit plan, the balance in the fund should have a surplus as often as it has a deficit.  But, as we have seen in the past, when there appears to be a funding surplus, politicians increase benefits rather temporarily lowering the contributions paid by both taxpayers and employees.  There is a built-in tendency for politicians to over-promise and under-fund because future benefits will not be paid out until many years later.  Supporters of the current IPERS system like to say that Iowa has one of the most financially sound retirement systems in the U.S.  IPERS is only about $7 billion short of the funds necessary to keep its promises!  It has only about 81 cents for each dollar that it owes.

Defined contribution plans can have most of the same benefits, and potentially more, for employees.  It does shift significant responsibility and risk to the employee to invest wisely and to not spend retirement money too fast during retirement.  But, under a defined contribution plan the employees own the money in their retirement account, and can take it with them if they decide to change employers, and can leave it to anyone they wish after they die.

There will be a significant fiscal challenge that must be met if we were to make the change from a defined benefit to a defined contribution plan: If new employees put their retirement contributions into a defined contribution plan and don’t contribute to the existing defined benefit plan, the already-existing $7 billion of under-funding of IPERS will come due and need to be paid out over the next 50 – 60 years. In a big way, IPERS is still operating like a giant Ponzi Scheme – taking money from new investors to payoff old investors.  (Illegal if done in the private sector.)  It is time for us to lock-in the under-funding liability and stop making it worse. We need to put new government employees into a defined contribution plan.

Link to Register letter: https://www.desmoinesregister.com/story/opinion/columnists/iowa-view/2018/06/12/dont-jeopardize-ipers-ideologically-driven-changes/692231002/

Don’t increase Iowa Sales Tax to fund Natural Resources and Outdoor Recreation Trust Fund

I agree with Iowa Senator Ken Rozenboom that people who voted for the Iowa Constitutional Amendment which created the Natural Resources and Outdoor Recreation Trust Fund were expressing their “feel-good” support for cleaner water and expanded recreation opportunities in Iowa.  The Register’s opinion polls also make it pretty clear that a majority of Iowans are willing to pay a higher sales tax to fund these priorities.

As a long-time river canoe paddler, I want clean waters in Iowa as much as anyone.  But raising the sales tax is the wrong approach to pay for the prevention and clean-up.  Here are three good reasons why Iowans and the Iowa Legislature should not increase the sales tax in order to fund the Trust Fund, and why the Constitutional Amendment should be repealed:
First, much if not most of the money will go to pay for subsidies or other incentives to the polluters to encourage them to stop polluting.  (Only 7% is guaranteed to go to trails.  All other categories are not guaranteed to go to recreation.)   Historically, we have required polluters to stop polluting our common environment or otherwise pay fines or other penalties to force them to stop polluting and to pay for cleanup of pollution they caused.  Taxpayers should not be bailing out polluters.  Taxpayers should especially not pay rent to farmers to temporarily “set aside” land from production in order to reduce run-off.  As we’ve seen under the federal program, if the payments stop or crop prices get too high, many farmers put fragile land right back into production.
Second, if we were to increase the sales tax,the only way to stop the spending would be to repeal the Constitutional Amendment.  Eventually, the need for tax money to pay for pollution prevention or clean-up will come to an end.  But the Constitutional Amendment has no sunset provision so money put into the Trust Fund will be required to be spent according to the fixed formula until the amendment is repealed.  We really need the flexibility of a legislative solution rather than a rigid Constitutional Amendment to solve our water pollution problem.  The Constitutional Amendment should be repealed.
Third, the sales tax is a regressive tax that is disproportionately paid by relatively poorer people.  Poorer people pay a larger percentage of their income in sales taxes than do higher income folks.
It is true that Iowa’s waterways are unacceptably polluted.   This is a problem that we need government regulation to solve.   A more just and fair way to finance the clean-up of our waters would be to put a tax on the pollutants – namely farm fertilizers and other chemicals.  All such taxes collected could be put into a clean water trust fund, which a majority of Iowans support.  There should also be appropriate fines to pay the cost of cleanup related to livestock sewage or other pollutants that are spilled into our waters.  The basic and just principle is that polluters should pay the costs of prevention and cleanup, not general taxpayers.
Regarding improving recreational opportunities, we have already made significant progress  toward providing more and better quality outdoor recreational opportunities for Iowans.  We should continue on our current incremental path that has worked well rather than significantly increasing taxes.

Free Iowa Car Dealers!

 

It is not surprising that the Iowa Automobile Dealers Association has registered its opposition to Iowa Senate Study Bill 3139 which would allow RV dealers to sell RVs on Sundays.  (See Register link below.)  I’m sure they think if RV sales are allowed Sundays, then car sales might be next.  It would be nice if that were true.  The only reason that it remains a crime to sell RVs or cars on Sundays in Iowa is because of the lobbying power of the dealers.  If RV and car sales were allowed on Sundays in Iowa, it would not require any dealer to be open for business on Sundays.  The decision would be left up to the owner, just like every other business.  I urge Iowans to let there elected representatives know that Iowa should stop making it a crime for RV and auto dealers to be open for business on Sundays.

Link ro Register article:  https://www.desmoinesregister.com/story/money/business/2018/02/07/its-illegal-buy-car-rv-sunday-iowa-new-law-might-change/315016002/

Average pay for men and women working for State of Iowa need not be the same.

In Des Moines Register’s recent article about the pay gap between men and women working for the State of Iowa, the headlines and introductory paragraphs seemed to imply that there is something wrong about the fact that men working for the State get paid, on average, about $5,300 more than women.  (See link below.)  The proper question that needs to be asked and answered is: Are men and women with substantially the same job and qualifications paid differently or treated differently?
The full article was fairly balanced.  Toward the end of the fairly lengthy article the Register reported: “A 2006 study at the University of Iowa found that almost all faculty pay variations were the result of known factors that were expected to affect salary, including the discipline taught, seniority, tenure status and faculty rank.”  “When those factors were taken into account, ‘there were no overall statistically significant gender- or minority-status based salary differences,’ Jeneane Beck, a University of Iowa spokeswoman, said.”  Also further down in the article the Register quoted Iowa State University economist, Dave Swensen, saying, “It remains that large fractions of administrative support employment are female, which do earn substantially less than management, technical and other professional occupations,”
So, although there may or may not be some isolated problems, overall there appears to be no overall problem with the pay difference that was reported.

Is our government responsible for the opioid crisis?

The Des Moines Register recently reported that 36 Iowa counties have joined in a law suit against opioid makers.  (See link to Register article below.)  Two law firms are enlisting counties across the country to go after drug manufacturers and others for the costs of the opioid crisis.  There is no cost to the counties.  If successful, the “Lawyers will  be awarded a portion of the settlement, …”  (Interesting that the word “settlement” is used instead of “judgment”.)

What is often missing in much of the opioid crisis discussion is how our government’s policy of prohibition has made a bad situation even worse.  When a person becomes physically addicted to opioids, they will do almost anything to get the drugs they want.  If the drugs are not available legally, or if legal drugs cost too much, addicts will find illegal alternatives. According to the CDC, 60% of opioid deaths do not involve prescription opioids.  That is, in 60% of opioid deaths the person who died was using illegal opioids.  (See CDC reference below.)  A significant problem with illegal drugs is that is no way to assure the quality and potency of the drugs.  In the case of opioids, that leads to inadvertent over-doses because the illegal drug was much more powerful than thought.

If opioid addicts were able to readily get prescription methadone or other FDA approved opioids at reasonable costs, many deaths would be prevented.  That would also take the profit out of the illegal opioid drug trade.  If opioid addicts were treated under a medical model rather than a criminal model, it is likely that more opioid addicts would seek help to solve their addiction problem.  But as it is, under our drug war, prohibition policy, addicts have good reason to not seek help.

CDC reference: https://www.cdc.gov/drugoverdose/data/overdose.html

Link to Register article: https://www.desmoinesregister.com/story/news/crime-and-courts/2018/01/05/iowa-counties-file-lawsuits-against-opioid-manufacturers/1008522001/