RI General Assembly Freedom Index

Download: Freedom Index 2012 Scorecard; legislator votes, bill explanations, and rankings ; Click here for the Media Release

Radio:  Stenhouse discusses Index on Dan Yorke radio show ; and on the Helen Glover show (@ the 13:00 minute mark)

The first-annual General Assembly Freedom Index by the RI Center for Freedom & Prosperity scores Ocean State lawmakers on their level of support for principles of freedom as proven by their votes on the floors of the House and Senate.

The index examines legislators’ votes in terms of their likely effect on the free market, the size and scope of government, the balance of residents’ interests against those of public employees and beneficiaries, and the constitutional structure of a divided government with limited power over the people whom it represents. The Center reviewed every bill that received a roll-call vote by the full membership of either chamber and selected 96 that fit its understanding of these criteria. (Companion bills only count once.)

The resulting scores give a detailed sense of each legislator’s priorities beyond a few high-profile issues.

The Center further divided the bills into five categories:

  • Tax & budget:  bills that affect the tax structure in Rhode Island and/or that relate to government expenditures, just driving or relieving the pressure on taxation
  • Regulatory environment: bills that make it more or less difficult to live and do business in the state by imposing regulations
  • Constitutional government: bills that affect the structure of the government, as well as the scope of government in its authority over residents’ lives
  • Public sector labor: bills related to the relationship between its employees and itself and the electorate
  • Education reform: bills that advance or impede the reform of the state’s public education system, in terms of both cost and quality

Most legislation has implications for more than one of these categories.  For the purposes of this index, we applied our subjective sense of the area of core effect and sorted the bills accordingly.  If, for example, a bill having to do with education seemed to us intended to secure the role of public employees, we classified that bill as Public Sector Labor, not Education Reform.

Download: Freedom Index 2012 Scorecardlegislator votes, bill explanations, and rankings

2012 Freedom Index Findings

Ninety-six (96) different pieces of legislation (counting companion bills once) were evaluated.  The Center judged 70 of them as having a negative effect on freedom.

The average legislator index score of -25.4 indicates that the General Assembly moved Rhode Island in the wrong direction, and that Rhode Islanders are less free than they were in 2011. This index underscores our Center’s view that the 2012 RI General Assembly did not positively address the dire business climate of our state.

Top and Bottom 10

House Senate
Top 10 Bottom 10 Top 10 Bottom 10
1 Costa 59.2 113 Bennett -46.0 1 Kettle 15.5 113 Tassoni -44.8
2 Gordon 58.7 112 Fox -45.3 2 Shibley 14.0 112 Lanzi -44.8
3 Newberry 42.0 111 Ajello -45.3 3 Moura 8.6 111 DaPonte -43.1
4 Chippendale 41.7 110 McNamara -45.3 4 Hodgson 5.2 110 Miller -42.0
5 Watson 33.5 109 Valencia -45.3 5 Maher 4.1 109 Lynch -42.0
6 Trillo 28.8 108 Blazejewski -45.3 6 Algiere -7.8 108 Perry -41.6
7 Morgan 15.3 107 Cimini -45.3 7 Pinga -12.1 107 Ruggerio -41.4
8 Ehrhardt 15.1 106 Silva -45.3 8 Bates -14.7 106 Goodwin -41.4
9 Reilly 13.2 105 Mattiello -44.6 9 Ottiano -17.0 105 McCaffrey -41.4
10 Palumbo 0.5 104 Ucci -44.6 10 Cote -17.7 104 Fogarty -41.4

 

General Assembly Freedom Index 2012 by Party

 

Other findings include;

  • Average House index of -24.1
  • Average Senate index of -27.9
  • Average Democrat index of -33.5
  • Average Republican index of 16.5
  • Average Regulatory Environment index of -49.0
  • Average Tax & Budget index of -26.0
  • Average Constitutional Government index of -9.1
  • Average Public Sector Labor index of 16.7
  • No bills directly related to Education Reform were scored in this index

 

General Assembly Freedom Index 2012 and Category by Chamber and Party

 

Tax & Budget Category, Top and Bottom 10

House Senate
Top 10 Bottom 10 Top 10 Bottom 10
1 Newberry 68.8 75 Silva -67.2 1 Kettle 44.8 38 Pichardo -59.5
2 Chippendale 68.8 74 Bennett -62.5 2 Shibley 44.8 37 Lynch -54.3
3 Watson 68.0 73 Fox -62.5 3 Hodgson 44.8 36 Crowley -54.3
4 Trillo 67.2 72 Ajello -62.5 4 Moura 31.0 35 Tassoni -51.7
5 Costa 66.4 71 McNamara -62.5 5 Maher 24.1 34 Lanzi -51.7
6 Gordon 66.4 70 Valencia -62.5 6 Algiere 17.2 33 DaPonte -51.7
7 DaSilva 54.7 69 Blazejewski -62.5 7 Felag 10.3 32 Miller -51.7
8 Morgan 43.8 68 Cimini -62.5 8 Pinga 10.3 31 Perry -51.7
9 Reilly 43.8 67 Mattiello -62.5 9 Bates 10.3 30 Ruggerio -51.7
10 Lima 43.8 66 Ucci -62.5 10 Ottiano 10.3 29 Goodwin -51.7

 

Regulatory Environment Category, Top and Bottom 10

House Senate
Top 10 Bottom 10 Top 10 Bottom 10
1 Gordon 66.9 75 Mattiello -66.9 1 Hodgson -18.0 38 Miller -76.3
2 Costa 55.2 74 Tarro -66.9 2 Kettle -23.1 37 Tassoni -74.4
3 Watson 52.2 73 Naughton -66.9 3 Shibley  -23.1 36 Lanzi -74.4
4 Chippendale 27.2 72 Corvese -66.9 4 Moura   -23.1 35 Lynch -74.4
5 Newberry 23.5 71 Bennett -64.7 5 Maher -31.4 34 Perry -74.4
6 Trillo 17.6 70 Fox -64.7 6 Bates -33.3 33 Ruggerio -74.4
7 Ehrhardt  15.4 69 Ajello -64.7 7 Algiere  -35.9 32 Goodwin -74.4
8 Reilly 0.0 68 McNamara -64.7 8 Pinga -41.7 31 McCaffrey -74.4
9 Morgan -7.4 67 Valencia -64.7 9 Lombardo -43.0 30 Fogarty -74.4
10 MacBeth   -7.4 66 Blazejewski -64.7 10 Cote -43.6 29 Sosnowski -74.4

 

Constitutional Government Category, Top and Bottom 10

House Senate
Top 10 Bottom 10 Top 10 Bottom 10
1 Costa 61.2 75 Hearn -31.0 1 Kettle 29.7 38 DaPonte -29.1
2 Gordon 38.8 74 Jacquard -25.0 2 Shibley 24.3 37 Perry -19.6
3 Chippendale 36.2 73 MacBeth -22.4 3 Moura 18.9 36 Tassoni -18.9
4 Newberry 32.8 72 Bennett -19.8 4 Maher 18.9 35 Lanzi -18.9
5 Morgan 12.9 71 Hull -19.0 5 Pinga 6.1 34 Miller -18.9
6 Palumbo 6.0 70 Fox -17.2 6 Cote 6.1 33 Lynch -18.9
7 Flaherty 6.0 69 Ajello -17.2 7 Sheehan -2.0 32 Ruggerio -18.9
8 DeSimone 5.2 68 McNamara -17.2 8 Ottiano -4.1 31 Goodwin -18.9
9 Trillo 4.3 67 Valencia -17.2 9 Hodgson -8.1 30 McCaffrey -18.9
10 Schadone 3.5 66 Blazejewski -17.2 10 Algiere -8.1 29 Fogarty -18.9
(Note: Insufficient votes were cast in the Education Reform and Public Sector Labor categories for meaningful comparisons.)

Index Overview

The Center selected legislative bills for inclusion in the Freedom Index if they were deemed to have an effect on free-market, small-government, or constitutional principles, with each bill assigned a positive or negative weighting based on the criteria listed below. Weighted points for each bill were given to each legislator based on his or her roll-call vote on it.

Each legislator’s final Freedom Index was calculated as his or her score’s percentage of the total possible points. A positive score indicates a 2012 voting record that generally protected individual and economic freedoms, while a negative score reflects the opposite.

Disclaimer: It should be noted that the total Freedom Index score generated for each legislator is a direct reflection of the perspective of the RI Center for Freedom & Prosperity when it comes to the weighting of each bill. The Freedom Index is not an absolute measure of a legislator’s merit and does not constitute any endorsement or individual criticism. The Freedom Index is a tool designed for general research and for accountability, giving voters some quantitative metrics for their own assessments as to their elected legislators’ performance. 

Methodology

1) Determine weighting: Each selected bill received a weight ranging from +3 to -3, as determined by the RI Center for Freedom & Prosperity. Negative weights indicate legislation that creates or expands an agency, government program/function, or tax; creates new regulatory burdens; is hostile to constitutional principles; or otherwise conflicts with the principles that guide the Center. Positive factors were assigned to bills in line with those principles. Companion bills in the House and Senate were weighted identically. To determine the weightings, the Center requested reviews of all chosen legislation from a half dozen engaged Rhode Islanders with similar principles and combined the range of results for a final weighting.

2) Determine vote: Each legislator received a +1 or -1 vote factor, depending on whether he or she voted FOR or AGAINST a particular bill, respectively. If a legislator did not vote on a bill, he or she received a +0.25 if the bill passed or a -0.25 if the bill failed. Legislators who abstained from voting received a +0.75 or a -0.75 vote factor depending on if the bill passed or failed.

3) Calculate weighted vote: Multiplying the weighting factor and the vote factor produced a weighted vote score for each legislator for each bill.

4) Calculate the legislator score:  The cumulative score for all bills for each legislator determined that legislator’s overall score.

5) Calculate Freedom Index: Dividing each legislator’s total score by the maximum possible for the appropriate chamber provided his or her Freedom Index, or a percentage of the best possible score he or she could have achieved. In 2012, the “perfect” scores are 106 for the House and 116 for the Senate.

For example, consider a bill that would increase the regulatory burden significantly in Rhode Island and that the Center therefore weighted as a -2. Legislator A voted for the bill. His or her weighted vote would be calculated as follows: -2 x 1 = -2. Conversely, the weighted vote for Legislator B, who voted against the bill, would be: -2 x -1 = 2.

If Legislator A, in the House chamber, earned a total legislator score of -33, his or her Freedom Index would be calculated as: -33 ÷ 106 x 100 =  -31.1.  If Legislator B in the Senate had a total score of +23, his or her Freedom Index would be calculated as: 23 ÷ 116 x 100 = 19.8.

To rank the legislators, the Center sorted them by their Freedom Index scores and then, in the cases of ties, by their scores in each category, in the following order: Regulatory Environment, Tax & Budget, Constitutional Government, Public Sector Labor, and Education Reform. When legislators’ results were still identical, the Center adjusted them in order of their apparent stature and power within their chambers.

Criteria

In determining each bill’s weighting, the following questions were considered:

  • Does the bill create or eliminate an agency, program, or function of government?
  • Does it give the government new or expanded power to prohibit or restrict activities in the free market? Examples may include licensure and other restrictions on legal business practices.
  • Is it unconstitutional or does it do violence to our concepts of federalism or separation of powers? Does it restrict property, speech, gun, or other constitutionally recognized rights or freedoms? Conversely, does it restore balance between the state and federal government, resume state authority over an issue under the 10th Amendment, or remove restrictions on constitutionally protected rights?

Other considerations were also brought into question:

  • Does the bill redistribute wealth or use tax policy or other incentives to reward specific interest groups with special favors or perks? Conversely, does it eliminate special favors and perks in the tax code or public policy?
  • Does it perform a function that can and should be performed by the private sector or restore functions to the private sector?
  • Does it grow or shrink the regulatory scope of an agency?
  • Does it directly or indirectly create/reduce taxes, fees, or other assessments?
  • Does it increase or decrease control of the private sector through rules, regulation, or statute?
  • Does it increase or decrease long-term debt or override or restore statutory or constitutional protections against long-term debt?
  • Does it give or reduce special benefits for government employees or politicians?
  • Does it promote government transparency and openness or does it restrict access to information that should be in the public domain?

It should be noted that the complexity not only of the law but of political theory in general can make assessments of the sort described above subjective and very difficult. People reviewing the index should consider the results to be the best judgment of the Center, given our collected experience and expertise.

Download: Freedom Index 2012 Scorecardlegislator votes, bill explanations, and rankings

Policy Reform: Enact Collective Bargaining Reforms

Up to $250 million per year can be saved in RI

 

 

Collective Bargaining Costs

All workers deserve  fair compensation. However, it is not fair that taxpayers, struggling in a poor state economy, must also be forced to pay for excessively high compensation packages for unionized government workers. With reforms to collective bargaining, undue union influence and election cronyism can be reduced.

The ever-increasing total cost of employment for unionized government labor — annual  compensation plus benefits — is a cost item we simply can no longer afford.

It’s time to face the facts: public-sector unions drain precious resources away from Rhode Island’s sick, elderly, youth, and poor.

See “Collective Bargaining Reform” policy brief …

 

 

 

 

 

Policy Reform: Repeal the Estate Tax

High death tax puts Rhode Island economy further into grave

The Ocean State should be the ideal location to raise a family, run a business, and build an estate that endures for generations. Our state benefits when wealthy people live within our borders, expanding our tax base, paying more taxes, increasing potential investment in businesses, and making greater contributions to local charities.
Why do we keep driving our rich to other states with one of the most punitive death taxes in the country? Financial planners openly state that they advise their wealthy clients to leave the Ocean State if they want to maximize their financial situation.

 

Recent analysis of migration data shows that Rhode Island is losing people and money to other states, especially Florida, which does not have an estate tax.

In fact, after Florida’s estate tax was eliminated in 2004, the average out-migration of income from Rhode Island to Florida leapt by 77 percent. Removing the estate tax would help level the playing field with Florida, and all states, and perhaps convince a few ex-residents to return home.

(click image to view larger size)

View OSPRI’s landmark “Leaving RI” report here (see page 13 for Estate Tax discussion) … 

Policy Reform: Require Accuracy In Pension Accounting

 

Municipalities are understating the true cost of unfunded pension liabilities

Government employees need to properly plan for their retirements. Municipal officials need to have predictable budgets from which to provide quality education and city services. Taxpayers need to know that budget shortfalls will not raise their property taxes. Before local pension funding formulas can be effectively developed, it is essential that Accuracy in Pension Accounting be required of all municipalities.

The assumed rate of return that most government entities have traditionally used to estimate pension liabilities has been widely discredited as overly optimistic. A more conservative market rate, similar to what is used in the private sector, is generally seen as a more accurate measurement.

When a private company, like Enron, used improper accounting practices, the wrong-doers ended up in jail. When our local governments understate pension liabilities, retirement plans are put at risk, our schools suffer, local services are cut, and taxpayers pay more from their pockets.

At an October 2012 pension forum state and local officials openly admitted that it would be politically inconvenient to disclose the true scope of the problem to their constituencies.

This can all change with accurate accounting.

Read more about our “Truth in Pension Accounting” movement here … 

 

Policy Reform: Reduce State Minimum Wage to Federal Level

Teen Employment and Weekly Hours worked are steadily dropping in RI

 

Minimum wage increases helping to sink teen employment in the Ocean State

As teens transition into adulthood and self-reliance, the likelihood of developing crucial career skills, of building their personal networks and résumés, and of earning valuable spending money is diminishing in Rhode Island. Moreover, a higher minimum wage is drag on jobs development for everyone looking for entry-level work.

See our “Teen Employment” policy brief here … 

 

 

Policy Reform: Reduce Occupational Licensing Mandates

Occupational licensing laws hurt low income workers in Rhody

The quid-pro-quo cycle of Cronyism

The quid-pro-quo cycle of Cronyism

Rhode Island workers should be free of unnecessary fees and licensing requirements when pursuing an opportunity to earn a living, especially lower income workers hoping to embark on a new career path. Consumers will enjoy lower prices when some of these barriers are torn down.

 

With the 2nd most burdensome level in New England and 13th nationally, Rhode Island makes it more difficult and costly for many of us to embark on new careers. During these trouble economic times in the Ocean State, it is especially important that RI workers have enhanced freedom and face fewer barriers when beginning gainful employment.

A. Eliminate the Annual Minimum Corporate (Franchise) Tax

While formally a tax, this entrepreneur-killing law is really more of a licensing fee. It requires all corporate entities – brand new or not; profitable or not – to pay a minimum fee of $500 per year to the state in order to retain its license to do business – yet another disincentive to start a business that can create jobs.

B. Other Occupational Licensing Reforms:

  1.  Create a “sunrise” provision that requires advocates of new licensing proposals to prove their need before they are approved.
  2.   Ensure that all licensing boards have a super-majority of members drawn from the general public rather than the profession itself.
  3.   Replace mandatory licensing with voluntary certification in professions that do not directly affect the safety of the general public.
  4.   Implement a “sunset” provision that requires all other current licensing laws to expire, unless they are periodically reauthorized after a rigorous review process.
  5.   Enact legislation protecting the right to earn a living.

View the Center’s “Occupational Licensing” policy brief here … 

View Occupational Licensing Study by the Institute for Justice … “(Licensing) Boards Behaving Badly”

Policy Reform: Enact Changes to Civil Justice Laws

Legal Sharks in the Ocean State

Do state laws attract shark activity in the Ocean State?

An important part of creating a better and less risky business climate in Rhode Island is to lessen the threat of litigation for legitimate business practices. Doing so would lower the cost of liability insurance for most businesses, reduce consumer costs for many products and services, and free up businesses to become more creative and innovative in developing new concepts.

Specific Recommendations:

 A) Medical malpractice and product liability reform: Enact laws that limit the amount of non-economic and punitive damages that judges and juries may award to injured people (policy brief TBD).

 B) Implement “criminal intent” provision: Enact a law that protects citizens against prosecution for non-criminal or non-intentional activities … as dozens of other states have done.

See ‘Criminal Intent’ policy brief here …

 

 

 

 

 

 

Prosperity Agenda for Rhode Island

Vision

Imagine route I-95 as freeway where human and capital resources start flowing into our state instead of out. Imagine Rhode Island as the most dramatic turnaround state in the USA, with restored economic competitiveness and renewed pride for our citizens. Imagine a reinvigorated economy, new jobs, a world-class educational system, and a return to statewide prosperity.

Unleashing Rhode Island by Tearing Down the Barriers to Success

Rhode Island’s jobs outlook is uniquely dismal in the nation. Further, our state’s failing Report Card demonstrates that a bold, new policy path must be blazed, one that leads us to renewed opportunity and economic growth. In order to enhance the Ocean State’s business climate and to become more competitive with our regional and national neighbors,  we must exit from our current public policy direction.

A handful of major policy reforms and numerous other policy reforms can provide a catalyst for systemic change. For too long, policymakers have focused on providing more government services for more people, attempting to present a balanced budget, but in the end, unwittingly creating even more barriers to economic prosperity. Instead a new public policy course should focus on economic growth and enhancing our capacity to attract and maintain people, investment capital, and businesses.

The recommendations below are merely a starting point. There are dozens of other reforms that are also needed. Over the coming months and years, our Center will add new policy recommendations to this Prosperity Agenda.

High-Impact Policy Reforms:

Among the handful of  “game changing” reforms that would result significant near-term gains for the Ocean State, our Center recommends that Rhode Island:

1) Eliminate the State Sales Tax:  the centerpiece of our Prosperity Agenda; would create over 20,000 new jobs.

2) Establish RI as a “Right to Work” state:  would provide increased worker freedom and would be a major competitive advantage in attracting new businesses to our state.

3) Implement Market-based reforms within Obamacare and Health Insurance Exchange Laws:  As Rhode Island and the nation move forward with implementation of the Affordable Care Act, significant challenges remain regarding access to affordable, quality care while many other issues will be left un-addressed … solution? A  Health Care Freedom Act.

(click on an item above or below to learn more) 

Other Policy Reforms

Rhode Island also suffers from “death by a thousand cuts” syndrome, where dozens upon dozens of laws create barriers to economic growth in our state. Tearing down some of the barriers suggested below are a good start:

4) Bright Today Educational Reformswould increase the educational opportunities and freedom of Rhode Island’s students, especially the disadvantaged.

  1. School Voucher program: would provide special-needs students with a scholarship to attend the school of their choice.
  2. Real Grading of Schools: would grade all public schools in straightforward, universally understood method: A, B, C, D, F.

5) Eliminate Corporate Welfare: would reduce cronyism and corruption, maintain a level playing field, and defund the EDC’s capacity to risk taxpayer dollars on private sector businesses.

6) Implement Tort Reform: would include medical malpractice reforms and a criminal intent provision that protects the innocent.

7) Repeal the Estate Tax: would help keep more wealthy taxpayers in our state, expanding our tax base.

8 ) Lower the Minimum Wage to the Federal Level: would create more jobs, especially for teens, and would reduce the cost of doing business in Rhode Island for many businesses.

9) Reduce Occupational Licensing Mandates: includes five ideas that would open career opportunities and reduce the costs of services without sacrificing consumer safety.

10)  Reform or Repeal Renewable Energy Mandates: would reduce cost of energy for households and businesses, now artificially raised by unreasonable green energy portfolio mandates.

11) Require “Truth in Pension Accounting”: would require municipal and state governments to utilize more realistic accounting assumptions in evaluating and reporting pension liabilities.

12) Enact Collective Bargaining Reforms for Public Employees: would encourage public versus private sector compensation parity, limit the scope of labor contracts, and reduce monopolistic negotiating advantages, potentially saving over $250 million per year for Rhode Island.

PODCAST: 790AM 9-6-12 Stenhouse Podcast ; Mike Stenhouse discusses the PROSPERITY AGENDA on “Positively RI”

Policy Reform: Reform Renewable Energy Mandates

Laws maneating that a certain portion of our energy must be derived from renewable sources actually force households and businesses to pay higher energy costs, creating another drag on our already failing state economy. These laws are based on false assumptions. The cronyism and rate-payer funding of related special-interest projects are examples of corruption that are needlessly encouraged by such laws.

Rhode Island’s energy prices are among the highest in the nation. During these difficult economic times, we must do everything we can, no matter how small, to enhance our business climate and to reduce the cost of living for everyone. To this end, renewable energy mandates must be repealed or reformed.

Further, there is a new energy reality in America, with less of the perceived green benefit that inspired these laws in the first place. Most of these mandates were ushered into law during a period when many original assumptions, which have since proven to be false, were the mainstream thinking. Almost a decade later, there is a new energy reality that we must consider.

FALSE ENERGY ASSUMPTIONS that were a basis of RI’s renewable energy mandate laws:
  • Global warming would be great danger to our Earth: Whether global warming exists or whether the contribution of human beings to climate change and the ability of tolerable behavioral changes to make a decisive difference are now in open dispute, with conflicting data recently surfacing and increasing questions about original data.
  • Fossil fuel sources would become scarce in the near future: New natural gas, shale, and crude discoveries throughout the world have debunked this concern for the foreseeable future.
  • Fossil fuels would become increasingly expensive: Coal and natural gas continue to be the least expensive sources of electricity and will continue to be the most cost-efficient sources of energy in the coming decades.
  • Renewable energy would be abundantly plentiful: The inconsistency of wind and solar sources means that additional fossil-fuel plants must often be built as a “backup” systems.
  • Renewable energy would be more cost-efficient: Renewable energy costs remain significantly higher than conventional sources, and there are few near-term expectations that this will change.
  • Renewable energy would spur a boom in green jobs: There has been no such boom; many once-promising green companies have gone out of business because of low market demand. Some European countries that invested heavily in the green revolution suffered through more job losses than gains.
  • Renewable energy is better for the environment: Maybe not. The need for backup power plants decreases environmental efficiency. Better air quality can be achieved via natural gas, which is significantly cleaner than coal.  “Energy sprawl” is a popular term among environmentalists to describe the massive amount of land or sea area required for wind or solar farms, considered eye-pollution, and the miles of transmission lines required that often cut through pristine landscapes. Further, windmills are a danger to birds and bats.

 

 Reform or repeal of these mandates would save money for every family and business and would no longer be a drag on our state’s economy.

Specific Recommendations:

In light of the new energy reality, our state must enact reforms that would allow utilities, and thereby consumers, to better adapt to next-generation energy technologies:

  1. Review all renewable energy mandate laws to determine their viability
  2. Repeal the most unreasonable mandates
  3. Broaden the standards in some laws to include all next-generation energy technologies including nuclear, combined cycle natural gas, geothermal, etc.
  4. Adjust the compliance schedule to provide greater flexibility through altering deadlines or percentage targets
  5. Make the program voluntary and waive all noncompliance penalties

Policy Brief by the Center to be posted in the near future …

Related Studies:

Manhattan Institute study demonstrates that Renewable Power Mandates Drives Up Electricity Prices

New survey disputes “consensus” claims about man-made climate changes

North Kingstown Employees Strike to Maintain Public-Sector Premium

One question lost in the heat of this school year’s example of the annual opening-day labor dispute is: Why should school children pay more for janitorial services than anybody else would?  The practical answer is that parents are very sensitive to the treatment of their children, and that’s just one of the points of leverage that public-sector unions have.

According to the North East Independent, writing in July, janitors in North Kingstown used to make $19.47 per hour. Since the school committee voted to switch from the in-house union to the private GCA Services Group, while keeping the same workers, that hourly rate has fallen to $15.17. That’s a substantial drop of 22%, and it comes with greatly inferior benefits.  But in Rhode Island’s continuing jobs recession and apparent economic decline,  it isn’t clear that public-sector jobs, especially in schools, ought to be notably inviolable.

Data from the U.S. Bureau of Labor Statistics, last compiled in May 2011, shows the median hourly wage for “janitors and cleaners, except maids and housekeeping cleaners” in Rhode Island at $11.82. The average wage is $13.03, indicating that a small number of janitors make much more than that.  Despite the substantial cut, the North Kingstown crew is still among those high-wage outliers.

In this regard, the North Kingstown School Department is merely providing the latest example of a fact that the RI Center for Freedom & Prosperity highlighted in January: public-sector unions drive labor costs well above the market rate. The Center cited a study by the Goldwater Institute finding that a ban on collective bargaining and contracts in the public sector could save the state $252 million.  Keep in mind that this total is state workers only.

Goldwater found that, overall, the nationwide premium that taxpayers pay for the workers under their employ is 44% over the private sector.  Before the North Kingstown School Committee’s action, this summer, the janitors on its payroll were well above even that.