Goldman School of Public Policy - University of California, Berkeley

Featured Research

Workers’ Compensation Eligibility Among Residential Day Laborers

The day labor workforce serves as an important resource in many metropolitan areas, providing valuable services to homeowners and residential contractors. The variety of tasks day laborers perform in residential settings—construction, renovation, moving, landscaping—contribute to the safety, security, and beautification of residential properties and surrounding communities. Workers themselves often take pride in these contributions.

As with other work environments, residential worksites can pose the potential for serious injury to workers. In some rare instances, dangerous day labor assignments have led to worker deaths. Yet, the information nature of most day labor work means that injuries largely go unreported and remain hidden from official public view.

This research brief summarizes findings from recent efforts by the UCLA Labor Occupational Safety and Health Program (UCLA-LOSH) and the National Day Laborer Organizing Network (NDLON) to document the experiences of residential day laborers in California. Interviews with 64 day laborers who were injured while working in residential worksites in the past five years show that:

  1. workers face a wide range of hazards at residential worksites,
  2. the injuries they experience can be serious in nature, and
  3. these injuries often result in substantial costs to workers and their families. 

Many of these workers may be eligible for workers’ compensation when injuries occur, but few injured workers benefit from these resources.

The report includes a discussion of the common barriers day laborers face in accessing workers’ compensation resources, and it consider the impact of proposed legislation in California to streamline workers’ compensation eligibility requirements for this workforce.

Read the full report here.
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Jesús Guzmán (MPP '18) wrote this report through the UCLA Labor Occupational Safety & Health program.

Affordable Housing Can Save Money, Water, and Energy with this Innovative Finance Tool

Like many booming cities, Texas’ capital is experiencing overwhelming demand for affordable housing. Austin’s Mayor Steve Adler highlighted the affordable housing crisis shortly after taking office in January 2015, and urged the use of Property Assessed Clean Energy (PACE) to help encourage affordability. PACE enables commercial, industrial, and multifamily property owners to improve the water or energy efficiency of their buildings—without having to worry about steep upfront costs. Investing in these types of upgrades can reduce a property’s operating costs, as well as tenants’ utility bills.

That’s why I spent this past summer with Environmental Defense Fund (EDF), as an EDF Climate Corps Fellow with Texas PACE Authority, the PACE program administrator in the state. In June 2016, Mayor Adler created a committee of housing experts to determine how to leverage PACE for affordable housing. Alongside the committee, I worked to size up the opportunity, benefits, and challenges of using PACE to help pay for upgrades to affordable multifamily-housing properties.

After conversations with officials and program administrators from over 30 public for-profit and non-profit entities, we found there are significant opportunities—in Texas and nationwide—for the affordable multifamily-housing sector to leverage PACE. We are proud to present a new whitepaper that can serve as a guide to unlocking water, energy, and cost savings.

Using PACE for Texans’ affordable housing

The affordable-housing sector desperately needs upgrades: The U.S. Department of Housing and Urban Development (HUD) reports a $26 billion nationwide backlog of deferred maintenance projects in public housing authorities alone.

In Texas, one potential solution lies in PACE, a market-based financing program. Local governments and the private sector work together to fund energy and water savings projects, using a property assessment that ties the financing obligation to the property itself.

Prior to accepting this fellowship opportunity, I hadn’t worked in the affordable housing sector. My years in the finance industry, however, taught me to cash in on a good deal when I see one. It became clear that PACE, as a standalone or complementary tool, can enhance housing affordability, the living conditions of tenants, and property owners' net operating income.

Plus, there are undeniable environmental rewards from investing in energy and water efficiency retrofits, as well as onsite power generation: PACE projects can significantly cut a building’s energy or water footprint (or both!), which lowers waste and pollution. All of these benefits are realized with no out-of-pocket costs for property owners.

EDF explores these opportunities for affordable multifamily-housing properties in the whitepaper, which does the following:

  1. Introduces PACE as a financing tool for energy and water efficiency retrofits and investments in distributed energy resources, like home solar;
  2. Provides guidance to stakeholders in the affordable multifamily-housing sector for using PACE to help finance rehabilitation projects; and
  3. Identifies potential pilot projects in Central Texas that serve as examples of how PACE financing might be used within the affordable multifamily-housing sector.
Accelerating PACE

Despite the many benefits of PACE financing to property owners and tenants, barriers to its widespread use remain. One critical barrier has been the lack of information and experience with new PACE programs. The affordable multifamily housing sector contains complex layers of funding – from local, state, and federal funds, to private capital – which can make adding new financial structures appear difficult or cumbersome.


In the above depiction of public subsidies, TDHCA is the Texas Department of Housing & Community Affairs; USDA RD is the U.S. Department of Agriculture Rural Development; and PHA is Public Housing Authorities.

To address these concerns, the paper makes several recommendations on how to effectively utilize PACE and the role policymakers can play in this effort. For one, Texas should amend the Texas PACE Act to make government-owned affordable housing buildings – both existing and new — eligible for PACE financing.

Nationally, HUD should revise its methodology for utility allowance formulas so property owners have economic incentives to invest in energy and water efficiency. These are just two ways we can accelerate PACE’s progress.

A cleaner, more affordable future

Beyond the environmental benefits of clean energy and water conservation projects, there is a clear economic value in making PACE investments. It was impressive this summer to see how receptive the community was, from property owners to private lenders and associations. That said, policymakers have a long way to go. Public agencies, at the local and state level, have created regulatory hurdles in the financing structure of affordable housing properties, which discourage property owners from investing in energy and water efficient solutions.

There remains a huge opportunity in Texas and nationwide to activate PACE as a financing tool for energy and water savings projects in affordable housing. Although the EDF whitepaper focuses on the Texas market, other states can use the approach taken here—creating a coalition of public and private entities to explore PACE opportunities—to determine the benefits the program can offer.

Armed with the right tools and information, governments, property owners, and PACE administrators across the country can maximize the potential of PACE, leading to cleaner, more affordable housing for all. We hope this whitepaper will help achieve that future.

Learn more in our PACE for affordable housing factsheet.

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Laura Sanchez is a Master’s of Public Policy candidate at UC Berkeley’s Goldman School of Public Policy focusing on energy markets and sustainability. She has conducted research for American Jobs Project, a partnership between the Berkeley Energy & Climate Institute and the US DOE and DOC. Before graduate school, she worked in the finance industry for over six years. 

This article first appeared on the Environmental Defense Fund's Texas Clean Air Matters blog.

Public Sector Employees are Highly Educated, Underpaid

Public workers are overpaid.

Most public servants have heard this at some point, whether from an opinionated relative or a high-profile politician. Mitt Romney had this to say in the 2011 New Hampshire Republican presidential debate (emphasis added):

“If we’re going to finally pull back the extraordinary political power government unions are exerting in this country, we’re going to have to say that people who work for the government, government workers, should have their compensation tied to that which exists in the private sector. People who are government servants, public servants, should not be paid more than the taxpayers who are paying for it.

Unfortunately for Romney, there is no evidence to support the claim that public-sector employees are being paid more than their private-sector counterparts. It’s not hard to find examples of staggeringly high pay in the public sector – 347 state employees in my home state of Texas earned more than President Obama in 2009 – but is the average mid-level public servant out-earning her private-sector counterpart at the taxpayers’ expense? This discussion will be limited to employees at the state and local level.

It’s possible to argue that the data supports Romney’s point of view, if you’re willing to disregard the educational backgrounds of public- and private-sector employees. According to the Economic Policy Institute, about 54% of public servants at the state and local level have a college degree, compared to 35% in the private sector. Consequently, to compare the total value of compensation – wages and benefits – of each sector without controlling for educational attainment is to ignore a critical piece of how earnings are determined.

How does California measure up? According to a 2010 brief from the Center on Wage and Employment Dynamics here at UC Berkeley, state and local workers in the Golden State aren’t overpaid. California public employee wages are 7% lower, on average, than those of comparable private sector workers. When considering wages and benefits for similar workers, Allegretto and Keefe found “no significant difference” between compensation costs in the California public and private sectors. Public employers in California contribute a higher share of compensation expenses to benefits than private employers, but public employees end up with “considerably less supplemental pay and vacation time.”

California is, of course, above average when it comes to public sector compensation. The Economic Policy Institute concludes that, when comparing employees with similar education and other characteristics, state and local workers across the country are underpaid relative to workers in the private sector. Estimates of the gap between public- and private-sector compensation vary, but a 2010 study found that total compensation for state workers in the U.S. was, on average, 6.8% lower than compensation for comparable private-sector workers. Public workers at the local level, meanwhile, were be 7.4% less than their private-sector counterparts.

To examine a more conservative assessment of compensation differentials, I used estimates from a 2014 American Enterprise Institute report. The authors of this report used wages, benefits, job security, and working conditions to rank states, but exclude public safety employees from their analysis. Note that only the dark red areas indicate states deemed to have a public-sector compensation penalty; white states indicate a match or near-match with market compensation, and green states are considered to have above-market public employee compensation. Unfortunately, Wyoming was not included in the authors’ table of compensation categories, so I was unable to include it in this map.

AEI: Public Sector Compensation by State

Google GeoChart visualizations are not supported by BPPJ’s website. The author has posted this article with interactive maps on her GitHub site.

AEI’s compensation rankings should be taken with a grain of salt. First of all, their data excludes public employees in public safety roles, such as police and firefighters, which make up a large portion of the total public workforce. It’s also worth noting that their analysis includes valuations of certain intangibles such as job security and retirement benefits. As older workers retire and so-called millennials begin to make up a larger share of the public-sector workforce, job security and retirement benefits may be of less importance to younger workers. A measure of compensation that includes these factors may not be as relevant to workers who change jobs with more frequency, so I compiled rounded wage differential numbers from the same report to take a look at just the wage gap between public and private employees:

AEI: Wage Differentials by State

It’s clear that public sector employees in most states receive lower wages than their private-sector counterparts, and that there’s plenty of room for debate around the value of benefit packages and less-tangible measures of job value. The Economic Policy Institute’s finding that public-sector employees are undercompensated is supported by three different studies on the subject, each of which accounted for education and other worker characteristics to arrive at the same conclusion.

Public-sector unions have too much power.

Private-sector employees have, since the passage of the Wagner Act in 1935, had the right to unionize, bargain, and strike. Federal employees gained unionization and bargaining (but not striking) rights in 1978.

What about state and local government employees? Regulations vary both by state and by occupation. According to a 2014 report from the Center for Economic and Policy Research (CEPR), nearly half of all unionized public-sector workers across the country are firefighters, police, and teachers. Sanes and Schmitt examined the legality of public-sector collective bargaining for these professions across all 50 states and the District of Columbia, sorting into three categories: states where collective bargaining is illegal, states where it is legal, and states where no statute or case law exists. I’ve applied these categorizations to the following map; green indicates a state where collective bargaining is legal for all three occupations, and red indicates that collective bargaining is illegal for all three. Yellow states indicate a more complicated situation; hover your mouse over those to view the legal status of collective bargaining for each occupation. Remember, collective bargaining can still be severely constrained even in states where it remains legal; more on this later.

CEPR: Collective Bargaining Rights by State

In 1960, just 2% of the public-sector workers at the state/local level had the right to collective bargaining. As of 2010, 63% of the public-sector workforce had that right.

I’ve put together a similar map to illustrate the CEPR’s compilation of the right to strike for these professions in each state. The right to strike is treated differently, as states tend to prioritize public safety. However, there is still some variation; Ohio and Hawaii permit strikes by all three, and many states allow teachers to strike. Striking rights have now been extended to around 20% of public employees in non-public safety positions.

CEPR: Right to Strike by State

How do rights associated with unionization affect worker compensation? Keefe finds that “employees covered by the right to strike earn about 2 percent to 5 percent more than those without it.” Keefe’s 2015 paper on public-sector collective bargaining argues that collective bargaining and the right to strike have led to neither public safety crises nor excessive compensation; his work also examines the effects of binding interest arbitration, mediation, fact-finding, and agency-shop provisions.

The incidence of public-sector unionization (in states where organization is permitted) may have something to do with monopsony power, the model in which a sector of the market is dominated by one employers. California’s high public employee unionization rates are consistent with public employee unionization rates in a study of 27 developed countries, which found that, just like in California, “union density is negatively correlated with education in the private sector and positively correlated in the public sector.” The prevalence of union participation for U.S. public-sector workers has led to “a floor on earnings for some lesser-skilled workers, while the earnings floor for those workers has collapsed in the private sector.” So even though average compensation for public-sector employees still lags behind the private sector, unionization of this sector has improved wage conditions for an economically vulnerable portion of the workforce.

The difference in compensation between states that allow public-sector unionization and “right-to-work” states is clear: “While public-sector employees in right-to-work states suffer a 10 percent public-sector pay penalty, their counterparts in non-right-to-work states suffer only a 1 percent penalty.”

Ironically, one of the most notorious attempts to restrict the bargaining rights of public employees in recent years has come from the first state to grant union rights to that workforce: Wisconsin. In 1959, twenty-four years after the Wagner Act, Wisconsin Governor Gaylord Nelson signed a law that granted similar rights to public sector unions. In March 2011, Scott Walker and the Wisconsin Legislature stripped many of those rights away, depriving child care workers and university faculty/staff of bargaining collectively, and severely limiting the bargaining ability of most public employees. Governor John Kasich of Ohio signed a similar bill into law that same month, and other states followed suit. Though Wisconsin played a key role in expanding labor rights to the public sector, it’s also been at the forefront of a larger effort to reverse those gains across the country.

Public employee unions do have the power to address the wage gap between public- and private-sector compensation, but unionization has not resulted in exorbitant wages or threats to public safety. Rather, unsubstantiated fears about the power of these unions has led a contemporary push to limit the collective bargaining rights of public employees.
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Celeste Middleton is a Master of Public Policy candidate at the Goldman School of Public Policy with six years of professional experience in the Texas public sector. 

This article was originally posted on Berkeley Public Policy Journal, the graduate student publication from GSPP.

Clinton Energy Plan Stands Head and Shoulders Above Her Competitors’

This week’s inaugural Presidential debate unsurprisingly lacked all but the briefest mention of the candidates’ stances on energy policy. However, it doesn’t take much sleuthing to see that the presidential candidates nominated by the four major political parties propose widely-varying policies to guide the direction of US energy development. While meaningful details as to each candidate’s policy proposals are largely absent from their published plans, let’s take a look at the information they’ve provided to get a sense of their energy priorities and proposed policies in this area, with a specific focus on their approach to renewable energy.

Hillary Clinton

Relative to other candidates in the race, Hillary Clinton has provided considerable detail on her proposed renewable energy policies. She has identified two goals that she aims to achieve: 1) reaching the milestone of five hundred million installed solar panels in the US by the end of her first term as president; and 2) increasing renewable electricity generation capacity to power every home in the country within ten years of her taking office.
 
In order to reach these goals, Hillary Clinton has proposed a number of policies focused on increasing incentives for renewable energy development “without relying on climate deniers in Congress to pass new legislation.” Several noteworthy examples are her Clean Energy Challenge and associated Climate Action Competition, which would attempt to incentivize states and local governments to exceed federal emissions standards through grants and “other market-based incentives”, and her Public Lands and Infrastructure initiative, which proposes to expand renewable energy production on federal lands and public buildings tenfold within a decade. Clinton’s proposed energy policies also address her support for natural gas as a transition fuel (given its low carbon content relative to other fossil fuels), revitalizing coal communities impacted by the shift towards cleaner energy sources, and reforming leasing practices for federal lands.
 
An area that is neglected in Clinton’s official policy proposals is the contentious question of nuclear power’s future in the US. While historically somewhat inconsistent as to her stance on this issue, Clinton was recently quoted by Scientific American as supporting nuclear power given its importance in the fight against climate change, an interesting development as this puts her official policy stance at odds with many traditionally Democratic environmentalists. This support, however, aligns Clinton’s perspective more closely with those who view nuclear as an essential, carbon free energy source which will be critical in limiting greenhouse gas emissions from the power sector.
 
Together, Hillary Clinton’s policies promote the broad scale-up of renewable energy through continued and enhanced incentives for renewable sources, increased research and development in clean energy technologies, and infrastructure investment to prepare the electric grid for higher levels of renewable generation.

Donald Trump

Unlike Clinton, Donald Trump has not clearly articulated his approach to renewable energy, but has instead focused on his plans to increase domestic fossil fuel production by removing barriers he claims stem from “Obama’s job-killing energy restrictions.” He is clear that he does not support renewables more than any other form of energy, and the implications from his rare comments on this issue are that he sees little value in them; in fact, the majority of Trump’s proposed energy policies are simply the elimination of programs and standards designed to protect the environment and promote the development of renewable energy. Donald Trump has criticized both solar and wind as too expensive to be viable generation technologies, and has also questioned the potential human health and wildlife effects of wind turbines, claiming at a rally in Pennsylvania last month that “the wind kills all your birds. All your birds, killed.”
 
Donald Trump has also proposed to “cancel” the Paris climate deal, meaning he intends to revoke the commitments made by President Obama during the Conference of Parties (COP) in 2015, commitments which implicitly included significant investment in renewable energy and energy efficiency. Despite his adamant support for expanding domestic oil and gas drilling, activities consistently linked to significant environmental damage, Trump promises to do so “while taking proper regard for rational environmental concerns.” How he defines “rational environmental concerns”, however, is unclear.
 
The lack of clarity in Trump’s proposals has not gone unnoticed. Due largely to the lack of specifics, Trump’s energy policy was recently given a score of 0 out of 5 by Scientific American (by contrast, Clinton was given 5 out of 5—the only candidate to break the “2” mark in this category).


Gary Johnson

Gary Johnson and his Libertarian party provide a clear (albeit brief) ideology regarding energy and environmental regulation, yet sparse information as to the policy mechanisms by which this vision would be achieved under their leadership. Consistent with the Libertarian party’s general stance on government intervention, Gary Johnson opposes “all government control of energy pricing, allocation, and production.” Under his leadership, the United States could therefore presumably expect executive efforts to eliminate incentives for the development of renewable energy, such as the Investment Tax Credit and Production Tax Credit recently extended by Congress. Should Johnson adhere strictly to party ideology, a simultaneous removal of the (largely tax-based) incentives provided for conventional energy development could also be expected. However, during his 2012 presidential campaign Gary Johnson indicated support for government underwriting of nuclear power plants due to the lack of private-sector interest in taking on the risk, implying that his free-market approach to energy policy may not be absolute.
 
Interestingly, Johnson recently indicated his support for a carbon tax—a “revenue-neutral ‘fee’ on carbon dioxide emissions”, should current regulations on greenhouse gases be repealed—only to rescind his support for such a policy shortly thereafter. Given that broad-based emissions regulations such as a carbon tax or a cap-and-trade program are often viewed as the most direct mechanism for supporting the development of renewable energy, Johnson’s wavering stance on such programs makes his support for augmenting or replacing conventional energy sources with renewables questionable, at best.

Jill Stein

Of the four candidates, the renewable energy policies proposed by Jill Stein of the Green Party strive for the most aggressive scaling of renewable energy. However, no readily-accessible material provided by Stein or her party discusses these aggressive targets—for example, transitioning to one hundred percent renewable energy by 2030—in much detail.
 
A cornerstone of Stein’s proposed reforms to the energy sector is her Green New Deal program, intended to create 20 million jobs via a transition to one hundred percent “clean renewable” energy by 2030 and investments in public transit, sustainable agriculture, conservation, and restoration of critical infrastructure. Specific policies to catalyze this plan are not laid out, but reporting from The Washington Post suggests that the combination of a carbon tax and the elimination of subsidies for the nuclear and fossil fuel industries would be fundamental parts of Stein’s energy policy platform.

So, who do I vote for?

The lack of details provided by some of the candidates makes a thorough evaluation of their proposed renewable energy policies somewhat difficult, and forces us to interpret general stances as a proxy for more concrete policies. Summarized briefly, Hillary Clinton promotes a significant increase in renewable energy generation, stimulated by a variety of incentives; Donald Trump does not provide any clear plan regarding renewable energy, although his support for conventional fuel sources, his contention that climate change is a hoax, and his claims as to the unjustifiable expense of wind and solar strongly imply a lack of support for renewables; Gary Johnson proposes that renewables fend for themselves alongside conventional energy sources; and Jill Stein advocates for the implementation of a carbon tax and the elimination of fossil fuel subsidies as drivers for transitioning to renewable energy. Given these proposals, Clinton’s approach is most likely to significantly bolster the renewable energy industries; both Johnson’s and Trump’s platforms would almost certainly decimate the growth of renewables; and Stein’s plan would create significant uncertainty in the renewable energy industries given its reliance on the difficult task of creating a national carbon tax in today’s political climate.
 
So, as a citizen concerned especially with climate change, if you ask me: yes, I’m with her.

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Ben Shapiro is Master of Public Policy candidate at the Goldman School of Public Policy and an Editor at PolicyMatters Journal, where this article was originally posted.