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Organizations Representing Corporations Pass Regressive Legislation in the Shadows

Corporations have pushed legislation in state governments, often bypassing Congress, explains political economist Gordon Lafer.

A protester displays a sign at the Solidarity Sing Along Group Gathering in opposition to Scott Walker's corruption in Madison, Wisconsin, January 12, 2014. (Photo: Joe Brusky)

Most of us are all too aware of the power that a tiny handful of the superrich now has to influence the law of the land. So just what are they doing with this power? The One Percent Solution provides a comprehensive account of how corporate lobbies across all 50 state legislatures are eroding labor rights, deepening inequality and ultimately threatening democracy. Get your copy of this vital book by making a donation to Truthout now!

Corporations and the organizations representing them have pushed legislation in state governments, often bypassing Congress, explains political economist Gordon Lafer in this exclusive interview with Truthout. This is made possible, in part, by the minimal coverage that state legislatures generally receive from the corporate media.

Mark Karlin: Why do organizations representing corporations and corporations themselves find states so useful in advancing their agenda?

Gordon Lafer: The power of the corporate lobbies is greatest at the level of state legislatures. While most people understandably find state politics too boring to pay attention to, the states have tremendous power to shape our economic lives. Starting with President Reagan, a host of policies that used to be the responsibility of the federal government have been turned over to the states. Even things that the federal government funds are carried out by the states. States control education funding, Medicaid funding, unemployment insurance, funding for health clinics and mass transit. They determine labor law for public employees and establish the minimum wage, [including the] special wage for [servers] and construction workers, and the right to paid sick leave.

While the federal government is often deadlocked and typically passes only a few significant bills in a given two-year period, the states pass thousands of laws, partly because there is no filibuster in most states. Almost no one is paying attention to state politics — less than one-quarter of Americans can even name their state representative — and this leaves moneyed interests a freer hand. Money also goes further: Most state legislative races can be bought for cheap. In North Carolina, for instance, supermarket magnate and Koch collaborator Art Pope put $2.3 million into 20 targeted legislative races in 2010, effectively doubling the campaign budgets of his chosen candidates. He won 80 percent of those races, helping that state’s legislature become all-Republican for the first time since Reconstruction.

Finally, gerrymandering of district lines is even more intense at the state level, meaning most Republicans run in districts where the GOP primary is the only real election. This gives the corporate lobbies a realistic threat of primarying someone from the right if they don’t do what the donors want — meaning the money people have increased influence no only over who gets elected but also over how they act once in office. All of these factors combine to explain why “purple” states like Wisconsin, Michigan, Pennsylvania, Ohio, North Carolina and Florida have radical right-wing state legislatures even though the population as a whole is evenly split between Democrats and Republicans, as seen in presidential elections.

Can you name some of the corporate lobbying groups that are particularly active at the state level?

The three biggest corporate lobbies in the country are the US Chamber of Commerce, the National Association of Manufacturers and the National Federation of Independent Business. All of these have state affiliates that are among the most active in their state’s politics. It’s important to differentiate between local chambers of commerce — which are mostly non-political organizations aimed at boosting local tourism and economic development — and national or state-level organizations, which focus on politics and lobbying. In recent years, these traditional “big three” have been joined by Americans for Prosperity, which is the Koch brothers’ primary vehicle for state legislative activity.

In addition, a host of employer associations from specific industries are often active on issues that affect their own interests. This includes the Retail Association, Restaurant Association, Grocers’ Association, Associated Builders and Contractors, and more. These groups have lobbied for priorities such as lower minimum wages, dismantling unions, eliminating rights to paid sick leave, and replacing adults with teenage labor.

The American Legislative Exchange Council (ALEC) is particularly adept at offering similar template legislation to states. Can you explain why they are so effective at it?

ALEC is the main vehicle through which corporate politics are coordinated at the state level. Hundreds of the biggest corporations in the country have been active in ALEC, including many household-name companies such as GM and Ford, Facebook and Amazon, Blue Cross/Blue Shield, Home Depot and Walmart, Coca-Cola, Koch Industries and other oil firms, banks, pharmaceutical companies, private prison corporations, and more. In addition, many national organizations such as [the Pharmaceutical Research and Manufacturers of America], the National Restaurant Association and the US Chamber of Commerce are members of ALEC and coordinate their state-level politics through this organization.

Roughly one-quarter of all state legislators in the country are members of ALEC — they pay $50 [per] year in dues, and the rest of the expenses are paid by the corporations. ALEC holds several meetings a year in which members sit in committees made of equal numbers of state legislators and corporate lobbyists, where they write model bills that are then introduced in cookie-cutter fashion in state after state. The same corporations that write the laws also contribute to these politicians’ campaigns; fund their own political ads on radio, TV and digital media; and fund state-level advocacy groups to write briefing papers and supply paid experts for legislative testimony or media interviews. It’s an intelligent, well-coordinated and very well-funded campaign. ALEC estimates that close to 200 of its bills are adopted into law each year.

Gordon Lafer (Photo: Cornell University Press)Gordon Lafer (Photo: Cornell University Press) How did Wisconsin become a model for dismantling the government and whittling away at the rights of labor?

In January 2010, the Supreme Court ruled [in Citizens United] that corporations can spend unlimited money on politics. Just a few months after that, the US Chamber of Commerce and some allies created something called Project RedMap, which aimed to make use of the newly unlimited corporate cash in order to win Republican control of state legislatures. The elections that fall were particularly important because, following the 2010 census, those legislators would redraw the district boundaries for both congressional and state legislative districts. Drawing on corporate cash, Project RedMap succeeded in turning 11 states that had been mixed Democratic-Republican to all-Republican control — including Wisconsin. Gov. Scott Walker and dozens of Wisconsin legislators have been ALEC members, and the Koch brothers were one of the largest donors to the Walker campaign. Shortly after Walker took office, the president of the Koch-funded Americans for Prosperity visited Madison and told Walker he wanted to provide a “showdown” with public employee unions. The next month, Walker introduced legislation that effectively ended collective bargaining for the state’s 175,000 public employees.

There are several telling things about the Wisconsin “model.” First, while [Governor] Walker claimed to be attacking public employees in the name of hard-working, non-union taxpayers in the private sector, the $2 billion in tax cuts that were paid for by layoffs and wage and benefit cuts for public employees did not go to hard-working families struggling to make ends meet in the private sector — it went predominantly to the rich and privileged. Furthermore, Walker continually sought to play one group of workers off against the other. When he attacked public employees, he declared that he liked private sector unions, labeling them his “partners” in economic development. After the public sector unions were largely done away with, he turned to killing off private sector unions through a so-called “right-to-work” law — but vowed to keep good relations with construction unions. After this, [Governor] Walker lowered wages on public sector construction work. And throughout this time, he also attacked non-union workers — doing away with the right to paid sick leave in Milwaukee and making it illegal for any other city to vote to establish such a law; and even eliminating the state law guaranteeing workers one day’s rest in seven. Part of the lesson from Wisconsin is for working people not to be fooled into turning against each other and realizing that all workers are in the crosshairs of the corporate lobbies.

Is the war on public schools a major goal on the state level of these corporate and right-wing organizations?

The attack on public education is like the “perfect storm” of right-wing politics, because it brings together several major organizations whose interests coalesce around destroying teachers’ unions and doing away with the public school system. These include political strategists who believe teachers’ unions fund Democrats and want to cut off support for their opponents; religious school movements who want to capture public tax dollars for themselves; and financial and technology firms who stand to make huge profits from privatization.

The corporate lobbies are pushing legislation that fundamentally reshapes education. Children of the elite will continue to be taught a broad curriculum by experienced teachers in small classes. For everyone else, the corporate model includes younger, untrained, short-term and high-turnover teachers, who will teach canned lesson plans in large classes increasingly limited to reading and math — with human teachers replaced wherever possible by digital instruction. The push to replace humans with technology rests on ALEC’s success in passing state laws mandating that virtual classes receive the same dollars per student as regular classes taught by licensed teachers in physical classrooms. For this reason, the profit margins are enormous, and have drawn investment banks, hedge funds and venture capitalists flocking to the education market. Wall Street views the school system the same way it views Social Security: $500 billion of government-guaranteed funding flowing through the economy every year, that they can get their hands on if only they can change the laws. This is the overriding goal of “disruption.”

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The One Percent Solution: How Corporations Are Remaking America One State at a Time

How are members of the economic elite using their influence to push legislation across all 50 states?

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Beyond this, corporate lobbies that view America as an economy in irreversible decline are looking to lower everyone’s expectations, as part of the process of normalizing the experience of downward mobility for the majority. A central part of that is gradually erasing from consciousness the idea that we have a right for our kids to get a decent education, simply by dint of living here and being citizens. Privatization through charter schools or voucher programs serves not only to divert public money into the private sector — it also undermines the very idea of education as a public good, which the government is responsible for providing to all citizens.

What are some of the other key goals of the corporate lobbying efforts on the state level?

When you have unlimited cash, you can promote a very wide-ranging agenda, and this is what the corporate lobbies have done. Most people don’t pay attention to these things until they affect our personal lives, but there is a growing number of aspects of our personal lives that will be impacted by corporate activism. The corporate lobbies are passing laws making it easier for corporations to force employees to sign non-compete clauses banning them from taking higher-paying jobs at competitors; to waive your right to sue if you’re a victim of race or sex discrimination; or to be classified as “independent contractors” rather than “employees,” thus losing the right to overtime pay, sick leave, pension or unionization.

ALEC pushes to lower the minimum wage, cut wages for [servers], prohibit cities from enacting a right to paid sick leave or creating a mechanism to recover wages stolen by one’s employers. They have passed laws cutting unemployment insurance and requiring that people out of work take jobs paying much less than they used to make, or get kicked off unemployment insurance. They do everything possible to destroy unions, to do away with tenure for both school teachers and university faculty, and to eliminate civil service protections even for non-union workers in the public sector. They are working hard to lower wages for both union and non-union workers in the construction industry, and to ban states from regulating occupational hazards such as repetitive motion injuries. They are pushing laws to replace adult labor with teenagers and to promote more NAFTA-style free trade treaties. They work ceaselessly to create more tax cuts for corporations and the rich and to defund schools, libraries, public transit, public health and virtually every other public service that poor, working- and middle-class families rely on.

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