Download Free The Weathering Magazine Issue 01 Pdf To Excel

Worship Him Power Edition Keygen Download - Dvd Installer 3.4 Wii - Local Business Extractor Serial Mom. Defender Faith Philip Roth Pdf Download - Caddy Electrical 3 82 Keygen Crack - Download Free The Weathering Magazine Issue 01 Pdf Creator. BibMe Free Bibliography & Citation Maker - MLA, APA, Chicago, Harvard.

LAST UPDATED 8/07/2017 Where to start? • If you don’t know where to start, we’ve put together a list of must-read resources for value investors. The list can be. • We’ve also picked out the best value-orientated studies and research papers. This list can be. Several Selected Publications: (see very bottom of page for hundreds of more research papers on value investing) Warren Buffett, one of the world’s most famous and successful investors and CEOs, has granted permission to author/entrepreneur Mark Gavagan to publish “Gems from Warren Buffett – Wit and Wisdom from 34 Years of Letters to Shareholders”.

The Brandes Institute provides some very well written and value oriented research from a partner institute for the well-established value investor.. Insights from Some of Todays Leading Investment Min Famous Speech by Warren Buffett on Value Investing. I would call this the Gettysburg Address of Value Investing.

This is a must read for any value investor. • • • • • • • • • Graham and Doddsville Newsletter Archives CBS Resource websites • • • • • • The Outstanding Investor Digest. • A journal of interviews with famous value investors Value Investor Insight. VII distributes monthly issues and online bonus content each week.

Each monthly issue contains two feature pieces on major value investors and articles on value investing today. • Boston Fed Research Richard Ivey School of Business • • • • • • • • • • • • • • • • • • • • • (Great value site in Swedish) • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •. Value insights from Redfield, Blonsky & Starinsky, LLC (A great resource website for value investors) • November 14, 2014 • November 6, 2014 This is a link with a video interview of Ronald Redfield by The Manual of Ideas on January 31, 2014. Ron discusses value investing, investor influences and other specific investing issues. A tremendous thank you to Manual of Ideas! • October 15, 2014 • March 4, 2014 • February 26, 2014 • February 11, 2014 • January 15, 2014 • June 24, 2013 • June 7, 2013 • May 31, 2013. • May 23, 2013 • May 22, 2013 • May 21, 2013 • April 16, 2013 This is a link with an interview of Ronald Redfield by The Manual of Ideas during April of 2013.

Ron discussed value investing and how the investment section of our firm evolved. • February 27, 2013 • February 27, 2013 I found, but could not source. Very Interesting. • February 27, 2013 • February 27, 2013 • February 27, 2013 • February 27, 2013 • February 26, 2013 • October 10, 2012 • August 24, 2012 • December 9, 2011 • November 30, 2011 • October 26, 2011 • August 10, 2011 • June 24, 2011 • November 24, 2010 • October 11, 2010 • August 24, 2010 • July 9, 2010 • May 17, 2010 • March 22, 2010 • December 9, 2009 • November 18, 2009. • HF1041.G74. 1944 • “World Commodities and World Currency”.

(Review) Prentice N. (Mar., 1945), p. • “World Commodities and World Currency” (Review) John T. (Jan., 1945), pp. • “World Commodities and World Currency” (Review) Henry C.

(Sep.,1945), pp. • “World Commodities and World Currency”.

(Review) Donald Fergusson, Vol.18, No. (Jul., 1945), pp. • “Commodity Reserve Currency”.

(Review) Ralph Hawtrey Vol. (Sep., 1960), pp.570-571. • HG4521.G665 1949 (and various editions) • “The Intelligent Investor”. (Review) Kenneth D. (Sep., 1955), pp.406-407. • “A Classic Stock Guide is 50,”, Michael Blumstein,, May 18, 1984.p.D1.

• “The Intelligent Investor at 80,” Milton Moskowitz, • HG4028.B2G7 1964 (and various editions) • “The Interpretation of Financial Statements” (Review) Theodore Lang, Vol. (Dec., 1937), p.434. • HG4910.R44 1974 • HG4521.G67 1988 For a good review of the 5th edition of this book and the 4th edition of The Intelligent Investor see “The Theory and Practice of Value Investing,” by Martin Mittelstaedt in the Globe and Mail, Dec.20, 1988, p.B8. (It is available electronically). • HG172.G68A3 1996 For reviews of this book see: “Timeless Tips,” The Economist, Vol.341, No.7988, Oct. 19, 1996, p.S12.

“Graham & Dodd and the Dow 6000,” Roger Lowenstein, the Wall Street Journal, Oct. 17, 1996, p.C1. “Master Investor,” Jeffrey Laderman, Business Week, No.3493, Sept.

16, 1996, p.18. “Benjamin Graham.”, Canadian Investment Review, Vol.9, No.4, Winter, 1996/97, p.41.

• HG4522.G63 1999 The result of in-depth research, The Rediscovered Benjamin Graham brings together the very best the investment legend had to offer, including such incisive works as: * “Inflated Treasuries and Deflated Stocks: Are Corporations Milking Their Owners?” * “The Ethics of American Capitalism”. * “Proposals for an International Commodity-Reserve Currency”. * “The New Speculation in Common Stocks”. * “Is American Business Worth More Dead Than Alive?”. * “The Simplest Way to Select Bargain Stocks”.

For a review see: “The Rediscovered Benjamin Graham: Selected Writings of the Wall Street Legend,” Victor F.Morris, •, Vol.55, No.6,Nov/Dec 1999, p.127. Selected articles by Benjamin Graham (in chronological order) • “Some Calculus Suggestions by a Student” Benjamin Graham, Vol.

(Jun.,1917), pp. • “The Undistributed Profits Tax and the Investor” Benjamin Graham, Vol. (Nov., 1936), pp.1-18. • The Undistributed Profits Tax, by Alfred G. Buehler (Review) Benjamin Graham, Vol.

(Jun., 1937), pp.1049-1051. • The Theory of Investment Value, by John Burr Williams (Review) Benjamin Graham, Vol. (Apr.,1939), pp. • “The Critique of Commodity-Reserve Currency: A Point-by-Point Reply” Benjamin Graham, Vol. (Feb.,1943), pp.

• “Financial Statements From the Viewpoint of the Financial Analyst, Benjamin Graham,Vol.15, No.5, May 1945, p.231. • “Money as Pure Commodity” Benjamin Graham, Vol. 2, Papers and Proceedings of the Fifty-ninth Annual Meeting of the American Economic Association.

(May, 1947), pp.304-307. • “National Productivity: Its Relationship to Unemployment-in-Prosperity” Benjamin Graham, Vol. 2, Papers and Proceedings of the Fifty-ninth Annual Meeting of the American Economic Association. (May, 1947), pp. 384-396 • “Stock Dividends:They Can Save the Investor Many a Tax Dollar,” Benjamin Graham, Vol.

33, No.31, Aug. 3, 1953, p.4 • “Stock Dividends:An Analysis of Some of the Major Obstacles,” Benjamin Graham Vol.33, No.32, Aug. 10, 1953, p.5 • “STOCK MARKET WARNING: DANGER AHEAD!” Benjamin Graham Vol.2, No.3, Spring 1960, p.34 • “Some Investment Aspects of Accumulation Through Equities” Benjamin Graham, Vol. (May, 1962), pp.203-214.

• “Ben Graham Revisited” Benjamin Graham, Vol.146, No.1, July 1978, p.77. Graham-Newman Partnership Letters (oldest first) • • • • • • • • • • • • • The Benjamin Graham Centre for Value Investing: Speeches and presentations (in chronological order) 2013 Guest Speakers • Vito Maida, Founder and President, Patient Capital Management Inc., Toronto, ON (March 14, 2013) • Robert Robotti, Founder and CIO, Robotti & Company Advisors LLC., New York, NY (January 24, 2013) 2012 Guest Speakers • Mr. Mohnish Pabrai, Managing Partner, Pabrai Investment Funds, Irvine, California (February 15, 2012) (right click, save as) • Mr. Thomas A. Russo, Partner, Gardner Russo & Gardner, Lancaster, Pennsylvania (January 26, 2012) (right click, save as) 2011 Guest Speakers • Mr. Richard Rooney, CFA, Burgundy Asset Management Ltd., Toronto, Ontario (March 10, 2011) (right click, save as) • Mr. Prem Watsa, Chairman and Chief Executive Officer, Fairfax Financial Holdings Ltd. (February 16, 2011) (right click, save as) • Mr. Tim McElvaine, CA, CFA, founder and President of McElvaine Investment Management Ltd., Vancouver, BC.

(January 27, 2011) (right click, save as) 2010 Guest Speakers • Mr. Irwin A. Michael, MBA, CFA, I. Michael Investment Council Ltd., Toronto, Ontario (August 16, 2010) (right click, save as) • Mr. Robert Tattersall, MBA, CFA, Howson Tattersall, Toronto, Ontario (April 26, 2010) • Mr. Winters, Managing Director, Wintergreen Advisers, LLC, Milwaukee, WI (March 23, 2010) (right click, save as) • Mr.

Stacey, Partner, Stacey Muirhead Capital Management, Waterloo, Ontario(February 10, 2010) (right click, save as) 2009 Guest Speakers • Mr. Francis Chou, CFA, Chou Associates Management Inc., Toronto, Ontario (August 18, 2009) (right click, save as) • Seth A. Klarman, MBA, The Baupost Group, Boston, Massachusetts (March 17, 2009) – Video conference (right click, save as) • Kim Shannon, CFA, MBA, Sionna Investment Managers, Toronto, Ontario(February 9, 2009) (right click, save as) 2008 Guest Speakers • Mr. Francis Chou, CFA, Chou Associates Management Inc., Toronto, Ontario(August 19, 2008) (right click, save as) • Mr. Robert Tattersall, Howson Tattersall, Toronto, Ontario (March 18, 2008) (right click, save as) • Mr. Schloss, CFA, Walter & Edwin Schloss Associates, New York, New York (February 12, 2008) – Videoconference (right click, save as) 2007 Guest Speakers • Mr.

Francis Chou, CFA, Chou Associates Management Inc., Toronto, Ontario(August 1, 2007) (right click, save as) • Mr. Avner Mandelman, BSc, MA, MBA, Giraffe Capital Corp., Toronto, Ontario (March 27, 2007) (right click, save as) • Mr. Irwin A. Michael,MBA, CFA, I. Michael Investment Council Ltd., Toronto,Ontario (March 13, 2007) (right click, save as) • Mr. Martin Whitman,CFA, Third Avenue Management LLC, New York, New York (February 13, 2007) – Videoconference (right click, save as) 2006 Guest Speakers • Mr. Charles Brandes, CFA, Brandes Investment Partners LP, San Diego, California(March 28, 2006) – Videoconference (right click, save as) • Mr. Richard Rooney, CFA, Burgundy Asset Management Ltd., Toronto, Ontario (March 7, 2006) (right click, save as) • Mr.

Francis Chou, CFA, Chou Associates Management Inc., Toronto, Ontario(February 13, 2006) (right click, save as) 2005 Guest Speakers • Mr. Mark Holowesko, Templeton Funds (now Franklin Templeton), The Bahamas (March 29, 2005) (right click, save as) • Mr. Peter Cundill, FCA, CFA, The Cundill Group, Vancouver, British Columbia (March 28, 2005) (right click, save as) • Mr. Mason Hawkins, MBA, Southeast Asset Management, Memphis, Tennessee (March 22, 2005) (right click, save as) • Mr.

Irving Kahn, CFA, Kahn Brothers & Company Inc., New York, New York (March 7, 2005) (right click, save as) The Benjamin Graham Centre for Value Investing: Conferences, symposiums and seminars (in chronological order) April 10, 2013 The Ben Graham Centre’s 2013 Value Investing Conference •, President, A. Gary Shilling & Co., Inc. • Morning Keynote Speech • Thorsten Heins, President & CEO, BlackBerry July 20, 2012 Seminar on Value Investing and the Search for Value • Mr. Stacey, Partner, Stacey Muirhead Capital Management April 25, 2012 The Ben Graham Centre’s 2012 Value Investing Conference • Ms. Lauren Templeton, Principal, Lauren Templeton Capital Management, LLC Keynote Speech June 29, 2009 Symposium on Value Investing:Value Premium and Market Inefficiencies • Mr. Joseph Potvin, Senior Economist, Treasury Board of Canada Secretariat Keynote Speech • Dr. George Athanassakos, Professor of Finance & Ben Graham Chair in Value Investing, The University of Western Ontario • Dr. Philip Gharghori, Monash University • Dr. Georgios Papanastasopoulos, University of Piraeus • Dr. Joseph Ogden, University of Buffalo – SUNY May 25, 2007 Symposium on Intelligent Investing: Value vs.

Growth – Traditional vs. Fundamental Indexing • Dr. George Athanassakos, Professor of Finance & Ben Graham Chair in Value Investing, The University of Western Ontario • Dr.

John Bart, Founder, Canadian ShareOwner • Question and Answer Period with Dr. Athanassakos and Dr. Bart • Mr. Prem Watsa, Chairman and Chief Executive Officer, Fairfax Financial HoldingsLtd. • Mr. Howard Atkinson, President, Horizons BetaPro ETFs • Mr. Rob Arnott, Chairman, Research Affiliates, LLC • Question and Answer Period with Mr. Atkinson and Mr.

MBA & Executive Classes Starting in the fall of 2001, Aswath Damodaran's corporate finance and equity classes have been web cast. You can track the current semester’s classes and use the presentations that go with the class. If the current semester is ongoing, the previous semester’s classes are also archived. If you are trying to take this class online, you will probably have better luck accessing the archived semester’s classes (rather than the current one). Spring 2013 • • Fall 2012 • Spring 2012 (archived) • • Fall 2011 (archived) • Spring 2011 (archived) • Fall 2007 (archived) Financial Management (Corporate Finance for undergraduates) (Links were finally removed, but watch the sessions for the Corporate Finance class instead. It is the same class) The webcasts of a shorter executive ( two-day) MBA valuation seminar and a three-day corporate finance seminar can also be downloaded.

The formet covered primarily DCF valuation and is available in 4 3-hour sessions and the latter is a condensed version of my regular corporate finance class and is composed of six 3-hour sessions. • • Aswath Damodaran: Valuation research papers Paper Listing (Click on the paper to see a short abstract.

You can download the paper as a pdf file) Estimation Issues in DCF valuation • • The Equity Risk Premium (,,,, ) • • • • • • • • Valuation: Special situations • • (2002 version) • • Valuation: Different sectors (Crisis version: 2009) • • • • • Loose ends in valuation • • • • • • • • • • Corporate finance • • • • Relative valuation and real options • • A closer look at risk • • • • General papers • Valuation across the life cycle • (Dot-com version: 2000) • • What if? Aswath Damodaran: All research papers -- details and downloads Title Description Download Equity Risk Premiums: The 2010 Edition Equity Risk premium paper, updated to reflect data through the start of 2010. Equity Risk Premiums: Post-Crisis Edition This is an updated version of the equity risk premium paper that takes a detailed look at how the equity risk premium and other risk measures have evolved since September 2008 (the date of the last version of the paper). Valuing commodity and cyclical companies Commodity and cyclical companies pose special challenges when doing valuation, because their earnings and risk measures move with commodity and economic cycles. In this paper, we examine techniques and approaches that we can use to compensate for this volatility. Valuing financial service firms (2009 version) It is difficult to estimate cash flows at financial service companies.

As a consequence, they remain one of the last bastions for the dividend discount model. Inherent in the use of this model are two assumptions – that financial service companies pay out what they can afford to in dividends and that the regulatory constraints that they operate under will keep risk under control. In the crisis of 2008, both assumptions came under assault. In this paper, we look at ways of adapting to the changed enviornoment, when valung banks, insurance companies and invstment banks.

Valuing young and start-up companies How do you value a young or start-up business with little to show in terms of operating performance? In this paper, we examine ways in which we can adapt valuation approaches to account for the absence of historical information and the possibility that many of the young firms that we value will not make it through to success. Valuing Declining and Distressed Companies (The 2009 edition) We face two key problems in valuing declining and distressed companies. The first is that these firms rather than growing over time may shrink, both in terms of revenues and margins. The second is that many of these firms will not survivie as going concerns. In this paper, we deal with both issues and how to reflect them in valuation.

Valuing emerging market companies Companies in emerging markets often face additional risks, relative to their developed market counterparts, from polticial and economic turmoil in the countries in which they operate. In this paper, we look at how to incorporate this risk both into discounted cash flow and relative valuation models. Valuing companies with intangible assets Many companies derive their values from intangible assets, ranging from brand names to patents to technological know how. In this paper, we look at how accounting numbers may need to be mofified when valuing these companies and how we capture the full effects in value. Valuing the Octopus: The multinational, multibusiness company As globalization becomes a reality, many companies have operations spread over many different businesses across multiple countries. In this paper, we examine the ways of dealing with the tangle of different currencies and risk profiles that coexist within each company.

In particuar, we look at the viability of sum of the parts valuation as opposted to valuting the aggregated company. Leases, Debt and Value When leases are categorized as operating leases, the expenses associated with them are treated as operating expenses and leases become as source of off-balance sheet debt (and assets). As the debate about this practice become heated, we look at the consequences of this practice for widely used measures of profitability and financial leverage as well as inputs into valuation models. Estimating Riskfree Rates The riskfree rate is a fundamental input to most risk and return models.

In practice, estimating riskfree rates becomes difficult when there are no default-free securities. In addition, the question of what riskfree rate to use (short term or long term, dollar or foreign currency) is a critical one. This paper examines these issues. The Equity Risk Premium (2008 Edition) The equity risk premium (ERP) is a central input into discounted cash flow models, and more than any other number, it captures what investors think about stock prices in the aggregate. In this paper, we examiine the determinants of equity risk premiums and the three basic approaches used to estimate the number – surveys, historical returns and implied values. We look at why the approaches give you different answers and how to pick the right number to use in analysis.

Valuing Multiple Claims on Equity Equity claims can vary on a number of different dimensions – voting rights (control), liquidity and cash flows. We examine how to allocate the value of equity across multiple claims on equity in this paper.

In the process, we examine the premium that should be paid for voting shares, the discount to be applied to illiqudid shares and the effect of contingent claims. The Origins of Growth One of the most difficult challenges in valuing a business is estimating the expected growth rate in future years. In this chapters, we look at the three ways in which this growth rate can be estimated – from history, from analyst or management estimates and from fundamentals. We look at the pluses and minuses of each approach and why they may generate different estimates.

Measuring Returns: ROE, ROC and ROIC The value of a firm ultimately depends on its capacity to earn returns on its investment that exceed its cost of funding those investments. Accounting measures of returns, primarily return on equity and capital, are significnant determinants of value. In this paper, we examine the motivation behind the focus on returns and how best to clean up accounting numbers to estimate and forecasts returns. A Survey Paper on Valuation People have been valuing businesses for as long as businesses have been around.

We examine how valuation techniques have evolved over time and the common foundatation that different approaches share. (Download paper) Simulations, Decision Trees and Scenario Analysis: Probabilistic Approaches to Risk With the advent of simulation software (like Crystal Ball and @Risk), a full-fledged simulation or scenrio analysis is well within the grasp of any analyst valuing a company or analyzing a project. However, what rold should simulations and scenario analysis play in valuation? And what is the relationship between these analysis and traditional expected value calculations (where we adjust for risk in the discount rate)? (Download paper) Value at Risk (VaR) Value at Risk has acquired a cache, especially among financial service firms, as a new and sophisticated way of analyzing risk. We look at the basis for VaR, its pluses and minuses. (Download paper) To Hedge or Not to Hedge?

That is the question. Dism Install Drivers Online. Investors and businesses have more options and opportunities than ever before to hedge risk. But should firms hedge risk? What is the payoff to doing so? If a business or investor chooses to hedge risk, what is the best way to hedge risk (derivatives or insurance, for instance)? (Download paper) Exploiting Risk: A Strategic View of Risk Management Firms become successful, not by avoiding risk, but by seeking it out.

Developing a template for deciding which risks to exploit is key to success. In this paper, we examine the potential competitive advantages that a firm can exploit to advantage. (Download paper) The Value of Intangibles Intangibles are a large and growing part of many company’s assets. Starting with the presumption that current accounting standards do not do a good job of assessing their value, we look at whether intangible assets can be reasonably valued, and if so, the best ways of accomplishing this task. We categorize intangible assets into three groups – independent, cash generating intangibles (like trademarks and franchises) that can be valued with conventional DCF models, composite intangibles that affect the sales of many products and not just cash flows (such as brand name) that are more difficult to isolate and value and intangibles with the potential to generate cash flows in the future that are best valued using option pricing models.

(Download paper): Spreadsheet for valuing brand name Marketability and Value: The Illiquidity Discount Investors prefer more liquid assets to otherwise similar illiquid assets, but how much at they willing to pay for liquidity? In this paper, we beign by examining our definition fo liqhidity and the empirical evideence on how much markets value liquidity.

We consider the empirical evidence on the consequences of illiquidity for equity, fixed income and private equity markets and how best to inrorporate illiquidity into estimated value. Finally, we consider practical ways of estimating the illiquidity premium for illiquid companies (and ssets).

(Download paper): Spreadsheet to value liquidity The Value of Cash, Cross Holdings and Other Non-operating Assets Most businesses carry cash on their balance sheets, though the motives for holding cash vary widely across firms. Some of the cash is held to cover operating needs (transactions), some to cover contingencies (precautionary motive) and some reflects managerial incentives. We consider how best to value cash in both discounted cash flow and relative valuations, and consider the net debt and gross debt approaches in valuation. We also examine how to incorporate the value of cross holdings, both majority and minority, into business valuations. (Download paper): Resolving the differences between gross and net debt approaches The Value of Control How much is control worth? The answer to that question affects how much the control premium should be in acquisitions, how much of a premium voting shares should trade at and the discount that should be applied to minority stakes in private companies. This paper looks at how best to measure the value of control and how this can be useful in answering a variety of valuation questions.

(Download paper): Spreadsheet to value control Employee Stock Options, Restricted Stock and Value Companies use employee stock options (ESOPs) and restricted stock issues to compensate employees. In this paper, we examine why their usage has increased over the last two decades and how best to deal with the option overhang in valuation.

We also look at ways of incorporating future option grants into value per share today. The Value of Synergy Often promised, seldom delivered is the best description for synergy, the most widely used rationale in corporate mergers. In this paper, we explore how synergy is created and how to value it. We also examine why companies miscalculate so often when it comes to synergy.: Spreadsheet to value synergy Every valuation analyst has faced one or more of these questions in real world valuations and has had to come up with an answer. These are my very opinionated (and not necessarily correct) answers to the 25 top questions that we face in DCF valuation. Take it for a spin!

Value and Risk We take far too narrow a view of risk in finance. When we talk about risk management, we often only talk about risk hedging and when we estimate value, the discount rate is the only place where we reflect risk. In reality, risk is both a threat and an opportunity and successful firms not only protect themselves against some types of risk but actively exploit other types of risk to establish competitive advantages. In this paper, we present a way of considering risk management in this broader sense and consider ways in which we can bring risk into the other components of value. We also consider what types of firms are most likely to benefit from risk hedging and from risk management.

Measuring Company Risk Exposure to Country Risk It is common practice in valuation to assume that companies within an emerging market are all equally exposed to country risk and that companies that are incorporated and trade in developed markets like the United States are immune from it. This is clearly at odds with common sense, since companies within an emerging market can be exposed to different degrees to country risk and multinationals like Coca Cola and Nestle can be exposed to significant emerging market risk. In this paper, we propose a measure of company exposure to country risk called lambda and suggest ways in which we can estimate lambda. Dividends and Taxes In January 2003, President Bush proposed that dividends be tax exempt to investors. While the ultimate shape of the tax reform is not clear, changing the tax rate on dividends can have significant effects on both equity values and on the corporate finance decisions – investment, capital structure and dividend policy- of companies.In this paper, I estimate the effect of making dividends tax exempt on the overall value of equity in the market (13-14%) and argue that there will be profound changes in the use of debt and stock buybacks, with both declining. Information Transparency and Value: Can you value what you can’t see? It is clear that some firms are more forthcoming about their financial affairs than other firms, and that the financial statements of some firms are designed to obscure rather than reveal information about the firms.

No matter how strict accounting standards are, firms will continue to use their discretionary power to spin and manipulate the news that they convey to financial markets. The questions we face in valuation are significant ones. How do we reflect the transparency (or the opacity) of a firm’s financial statements in its value? Should we reward firms that have simpler and more open financial statements and punish firms that have complex and difficult-to-understand financial statements?

If so, which input in valuation should be the one that we adjust? ‘Valuing Distressed Firms Traditional valuation techniques- both DCF and relative – short change the effects of financial distress on value. In most valuations, we ignore distress entirely in valuation and make implicit assumptions about the consequences of a firm being unable to meet its financial obligations and these assumptions often are unrealistic. Even those valuations that purport to consider the effect of distress do so incompletely. In this paper, we begin by considering how distress can be explicitly considered in both discounted cashflow and relative valuation models. (estimate the likelihood of default from bond price) The Dark Side of Valuation Valuing a firm is difficult when it has negative earnings, a limited history or few comparables. When all three of these components come together, as is the case with many young start-up firms (Did someone say internet firms?), analysts all too often either assume that they cannot be valued or that new valuation models have to be devised.

In this paper, we make an argument that these firms can be valued, albeit with noise, and use Amazon.com as a case study to illustrate the principles involved. Real Option Applications in Corporate Finance and Valuation Are there options embedded in investment decisions?

There are also options in financing and valuation. The real question is whether these options have value, and how much they are worth. In this paper, I examine the whole range of real option applications, from the options to expand, delay and abandon in investment options to the option to liquidate in the equity of the firm. I also look at potential applications of real options in R&D and valuing undeveloped natural resources, and suggest that real options need to pass a three-part test to have value. Valuing Private firms The fundamentals that determine value for private firms as the same as those that determine publicly traded companies, but there are three critical issues.

The first relates to the scarcity of information about private firms. The second issue is that of illiquidity and how it affects value. The final issue is the question of control and whether there should be a premium for control or a discount for the lack of it. Valuing Financial Service Firms Financial service firms – banks, insurance companies and investment banks – are often difficult to value because cash flows cannot be easily estimated.

In this paper (which is a chapter in the second edition of my valuation book), I look at the questions involved in valuing financial service firms. Valuing Acquisitions This paper (which is a chapter from my corporate finance book) looks at how best to deal with the valuation of control and synergy in acquistions and related issues. Valuation Multiples: First Principles This paper (which is a chapter from my investment valuation book) looks at the first principles that we need to follow when using multiples Estimating Risk Parameters The beta or betas in risk and return models measure an asset’s relative risk. We look at the limitations of standard approaches to beta estimation (such as regressions) and consider alternative approaches. Dealing with Operating Leases Many firms lease the assets that they use.

If the leases qualify as operating leases, they affect operating income and do not show up as part of capital. In this paper, we argue that this can distort measures of profitability and can affect the valuation of firms with substantial operating leases, and suggest ways in which we can correct earnings and cash flow measures.

Oplease.xls: Convert operating leases from operating to financial expenses Dealing with R& D Expenses Accounting standards in the United States and in much of the rest of the world require that R&D be expensed. Since these are expenses that are designed to generate future growth, it is much more logical to treat them as capital expenditures. In this paper, we explore ways in which R&D expenses can be capitalized and the implications for earnings, cash flows, valuations and multiples.

R&Dconv.xls: Convert R&D from operating to capital expense Financing Innovations The last two decades have seen a stream of innovation in financial markets, especially in the corporate bond arena. Some of these innovations were designed to give firms more flexibility in designing cash flows on borrowings, allowing them to match up cash flows on financing more closely to cash flows on assets, thus increasing their debt capacity. Some firms are issuing these new and more complex securities for the wrong reasons – to keep up with other firms in their peer group, and to take advantage of loopholes in the way ratings agencies and regulatory agencies define debt and equity. In this paper, we take a big picture view of financing innovations, and some of the good and bad reasons for innovations. Beyond Dividends This is a chapter from the second edition of my corporate finance book on spin offs, divestitures, equity carve outs and tracking stock. It is not path-breaking, by any stretch of the imagination, but it provides a comparison of the different actions, and why a firm may choose one over the other.

Value Enhancement: Back to Basics Value enhancement has become a hot topic of late. This paper examines the fundamentals of value creation and enhancement, from a valuation framework, and then considers the merits of EVA and CFROI as value enhancement devices. Aswath Damodaran: Webcasts/podcasts The following are short podcasts (webcasts), ranging from 20-40 minutes to length that cover multiple topics in valuation. Topic Webcast Supporting Presentations/ Material.

Over the past two years, state legislators across the country have launched an unprecedented series of initiatives aimed at lowering labor standards, weakening unions, and eroding workplace protections for both union and non-union workers. This policy agenda undercuts the ability of low- and middle-wage workers, both union and non-union, to earn a decent wage. This report provides a broad overview of the attack on wages, labor standards, and workplace protections as it has been advanced in state legislatures across the country.

Specifically, the report seeks to illuminate the agenda to undermine wages and labor standards being advanced for non-union Americans in order to understand how this fits with the far better-publicized assaults on the rights of unionized employees. By documenting the similarities in how analogous bills have been advanced in multiple states, the report establishes the extent to which legislation emanates not from state officials responding to local economic conditions, but from an economic and policy agenda fueled by national corporate lobbies that aim to lower wages and labor standards across the country. In 2011 and 2012, state legislatures undertook numerous efforts to undermine wages and labor standards: • Four states passed laws restricting the minimum wage, four lifted restrictions on child labor, and 16 imposed new limits on benefits for the unemployed. • States also passed laws stripping workers of overtime rights, repealing or restricting rights to sick leave, undermining workplace safety protections, and making it harder to sue one’s employer for race or sex discrimination.

• Legislation has been pursued making it harder for employees to recover unpaid wages (i.e., wage theft) and banning local cities and counties from establishing minimum wages or rights to sick leave. • For the 93 percent of private-sector employees who have no union contract, laws on matters such as wages and sick time define employment standards and rights on the job. Thus, this agenda to undermine wages and working conditions is aimed primarily at non-union, private-sector employees. These efforts provide important context for the much-better-publicized moves to undermine public employee unions.

By far the most galvanizing and most widely reported legislative battle of the past two years was Wisconsin Gov. Scott Walker’s “budget repair bill” that, in early 2011, largely eliminated collective bargaining rights for the state’s 175,000 public employees. Following this, in 2011 and 2012: • Fifteen states passed laws restricting public employees’ collective bargaining rights or ability to collect “fair share” dues through payroll deductions. • Nineteen states introduced “right-to-work” bills, and “right-to-work” laws affecting private-sector collective bargaining agreements were enacted in Michigan and Indiana.

The champions of anti-union legislation often portrayed themselves as the defenders of non-union workers—whom they characterized as hard-working private-sector taxpayers being forced to pick up the tab for public employees’ lavish pay and pensions. Two years later, however, it is clear that the attack on public employee unions has been part of a broader agenda aiming to cut wages and benefits and erode working conditions and legal protections for all workers—whether union or non-union, in the public and private sectors alike. This push to erode labor standards, undercut wages, and undermine unions has been advanced by policymakers pursuing a misguided economic agenda working in tandem with the major corporate lobbies. The report highlights legislation authored or supported by major corporate lobbies such as the Chamber of Commerce, National Federation of Independent Business, and National Association of Manufacturers—and by corporate-funded lobbying organizations such as the American Legislative Exchange Council (ALEC), Americans for Tax Reform, and Americans for Prosperity—in order to draw the clearest possible picture of the legislative and economic policy agenda of the country’s most powerful economic actors. To make the most clear-eyed decisions in charting future policy directions, it is critical to understand how the various parts of these organizations’ agenda fit together, and where they ultimately lead. This report begins by examining the recent offensive aimed at public-sector unions in order to point out the tactics commonly employed by corporate lobbies such as ALEC and the Chamber of Commerce; it establishes that their agenda is driven by political strategies rather than fiscal necessities.

The paper then examines the details of this agenda with respect to unionized public employees, non-unionized public employees, and unionized private-sector workers. Finally, the bulk of the report details the corporate-backed agenda for non-union, private-sector workers as concerns the minimum wage, wage theft, child labor, overtime, misclassification of employees as independent contractors, sick leave, workplace safety standards, meal breaks, employment discrimination, and unemployment insurance. Contextualizing the legislative efforts to undermine wages and labor standards Before analyzing the legislative measures recently promoted to undermine U.S. Wages and labor standards, it is useful to understand where the measures come from, and why they have appeared where they have. Using the recent attacks against public employee unions as a case study, the following subsections show how model legislation has been written by the staffs of national corporate-funded lobbies and introduced in largely cookie-cutter fashion in multiple states across the country. The most aggressive actions have been concentrated in a relatively narrow group of states that, though they did not necessarily face the most pressing fiscal problems, offered the combination of economic motive and political possibility to warrant the attention of the nation’s most powerful corporate lobbies. Anti-unionism: A broad national agenda When Wisconsin Gov.

Scott Walker proposed sharply curtailing union rights in 2011, he presented his legislation as a response to the particular fiscal conditions facing Wisconsin. Indeed, in each state where anti-union legislation was advanced, voters typically perceived it as the product of homegrown politicians and a response to the unique conditions of their state. In fact, however, broadly similar legislation was proposed simultaneously in multiple states, whose fiscal conditions often had little in common. As depicted in Figure A, in 2011 and 2012, 15 state legislatures passed laws restricting public employees’ collective bargaining rights or ability to collect “fair share” dues through payroll deductions (or, in one state, restricting the collective bargaining rights of private-sector employees who are nonetheless covered under state labor law). Beyond Wisconsin, for instance, collective bargaining rights were eliminated for Tennessee schoolteachers, Oklahoma municipal employees, graduate student research assistants in Michigan, and farm workers and child care providers in Maine. Michigan and Pennsylvania both created “emergency financial managers” authorized to void union contracts.

New Jersey’s and Minnesota’s legislatures both voted to limit public employees’ ability to bargain over health care. Ohio legislators adopted a law—later overturned by citizen referendum—largely imitating Wisconsin’s, prohibiting employees from bargaining over anything but wages, outlawing strikes, and doing away with the practice of binding arbitration (the only impartial means of settling a contract dispute without a right to strike) in favor of the state agencies’ right to set contract terms unilaterally. Indiana, which had already eliminated most collective bargaining rights for state employees in 2006, adopted new legislation that prohibits even voluntary agreements with state employee unions.

Copy the code below to embed this chart on your website. Thus the most striking feature of the pattern of state legislation—relating not just to union rights but also to a wide range of labor and employment standards, as will be outlined in greater detail later in this paper—is the extent to which similar legislation has been introduced, in largely cookie-cutter fashion, in multiple legislatures across the country. Furthermore, the pattern of which states adopted which laws suggests that legislation was driven by politics rather than economics. While similar laws were proposed and adopted in many states, the states that adopted these laws are not necessarily those where problems were most severe. The most sweeping public employee pension reforms, for instance, did not occur in the states with the greatest unfunded liabilities. Wisconsin, Florida, and North Carolina all had among the best-funded and most solvent public employee pension funds at the start of 2011, yet all enacted dramatic cutbacks in pension benefits. So too, laws restricting the collective bargaining rights of schoolteachers were not targeted at states with the highest dropout rates or lowest achievement scores.

As shown in Table 1, a majority of the states that passed legislation restricting teachers’ collective bargaining rights in 2010–2011 scored in the top half of states, as measured by the share of fourth- and eighth-graders performing at or above basic achievement levels in reading and math. Only two of the 11 states passing such laws scored in the lowest-performing third of the nation. Copy the code below to embed this chart on your website. Perhaps most strikingly, the largest cutbacks in public services and layoffs of public employees did not take place in the states with the largest budget deficits. In 2011, state employment fell more sharply than in any year since the government began keeping track in 1955. Yet these cuts were not correlated with where state officials faced the largest fiscal challenges.

From January through December 2011, 230,000 jobs were eliminated in state and local government. Texas alone cut 67,900 jobs, accounting for 31.3 percent of the total. An additional 87,900 positions—40.5 percent of the total—were eliminated in the 11 states that in November 2010 had newly put Republicans in control of all branches of state government. These 11 newly “all-red” states—Alabama, Indiana, Kansas, Maine, Michigan, Ohio, Oklahoma, Pennsylvania, Tennessee, Wisconsin, and Wyoming—laid off an average of 2.5 percent of their government employees in a single year; by comparison, the other 39 states together averaged cutbacks only one-fifth as large. As depicted in Figure B, these 11 states plus Texas accounted for 71.8 percent of the public jobs eliminated in 2011, yet in that same year, these 12 states accounted for just 12.5 percent of the aggregate state budget shortfall. Thus, the relationship is exactly the opposite of what one would expect if decisions were based on economics: More than two-thirds of total job cuts came from states that accounted for just one-eighth of the total state budget shortfall. Copy the code below to embed this chart on your website.

These data suggest that legislation was driven by a national agenda, and that the pattern of which laws were passed was based not on where they were economically necessary, but on where they were politically feasible. Understanding national legislative patterns The state-by-state pattern of public employment cuts, pension rollbacks, and union busting makes little sense from an economic standpoint. But it becomes much more intelligible when understood as a political phenomenon. As previously noted, in November 2010, 11 states gave Republicans new monopoly control over their state government, putting them in charge of both houses of the legislature as well as the governor’s office. These historic gains were part of the Tea Party–inspired “wave” election that, at the federal level, saw the GOP regain control of the U.S.

House of Representatives. They also reflected the impact of unlimited corporate spending, as the Supreme Court’s Citizens United decision overturned restrictions on campaign spending at the state as well as federal levels. In Wisconsin, for instance, long-standing restrictions that limited corporate political spending were ruled invalid. As a result, the 2010 elections were the most expensive in the state’s history, with money flooding in from out-of-state business interests. The officials who took office in January 2011 represented the first crop of legislators elected under the new rules of unlimited spending. Much of the most dramatic legislation since 2011 has been concentrated in these 11 states.

Particularly in states such as Michigan, Wisconsin, Ohio, and Pennsylvania, which have traditionally upheld high labor standards, the 2010 election provided a critical opportunity for corporate lobbies to advance legislative goals that had long lingered on wish lists. Where Republicans found themselves in total control of states whose statutes had been shaped by a history of strong labor movements, employer associations and corporate lobbyists were eager to seize on this rare and possibly temporary authority to enact as much of their agenda as possible.

Who is behind this agenda? Speaker of the House Tip O’Neill once famously quipped that “all politics is local”—suggesting that even U.S. Senators and representatives ultimately run for election based on their reputation for solving local problems. The past few years, however, have stood this axiom on its head: Local politics has become nationalized, with state legislation written by the staffs of national lobbies, funded in a coordinated effort by national and multinational corporations.

The attacks on labor and employment standards have been driven by a powerful coalition of anti-union ideologues, Republican operatives, and corporate lobbies. Republican strategists such as Grover Norquist have long identified public employees, labor unions, and trial lawyers as three “pillars” of the Democratic Party—unions and lawyers providing campaign funds and public employees providing the army of volunteers making phone calls and knocking on doors in support of “big-government” Democrats.

It is no accident that the hardest-fought anti-union campaigns have been waged in so-called battleground states. If Republicans cut off union funds and campaign volunteers in tossup states such as Michigan, Indiana, Pennsylvania, and Ohio, they could conceivably alter control of the federal government. But behind the Republican operatives, the most important force spurring this agenda forward is a network of extremely wealthy individuals and corporations. The anti-union campaigns have been primarily funded by a coalition of traditional corporate lobbies such as the Chamber of Commerce and National Association of Manufacturers, along with newer and more ideologically extreme organizations such as the Club for Growth and the Koch brothers–backed Americans for Prosperity. Recent trends have conspired to endow this coalition with unprecedented political leverage. Economy has grown dramatically more unequal over the past few decades, it has produced a critical mass of extremely wealthy businesspeople, many of whom are politically conservative. At the same time, elections for public office have become more expensive than ever, leaving politicians increasingly dependent on those with the resources to fund campaigns.

Finally, the Citizens United decision abolished longstanding restrictions on corporate political spending. In this way, the dramatically unequal distribution of wealth has translated into similarly outsized political influence for those at the top. The 2010 elections saw record levels of spending by business political action funds. In large part, the series of anti-union attacks launched in 2011 reflects the success of that strategy.

Copy the code below to embed this chart on your website. What occurred in that short timespan was not any increase in state spending, but rather, as shown in Figure F, a dramatic falloff in revenues, caused by the collapse of the housing market and the onset of the Great Recession. Budget deficits struck nearly every state, regardless of their public employees’ union status. Statistical analysis shows no correlation whatsoever between the presence of public employee unions and the size of state budget deficits.

Indeed, Texas—which prohibits collective bargaining for nearly all public employees—faced a massive, two-year budget shortfall of $18 billion, or 20 percent of state expenditures. Copy the code below to embed this chart on your website. Because unions did not cause the deficits, it is clear that undermining unions’ bargaining power was not undertaken as a strategy for solving states’ fiscal problems. There may be times when employee concessions are needed to help close budget gaps, but such concessions in no way require curtailing bargaining rights. Nowhere was this made clearer than in Wisconsin itself.

Indeed, at the start of 2011, Wisconsin was one of the few states not facing a budget crisis; on the eve of Gov. Walker’s inauguration, the state’s nonpartisan legislative research office announced that Wisconsin would start 2011 with a surplus of $121 million. The budget went into the red only after the governor, as one of his first acts in office, enacted large new tax cuts for the business community. The disconnect between union-busting and fiscal necessity became painfully clear during debate over the governor’s budget proposal.

When Wisconsin unions announced they had agreed to all of Gov. Walker’s economic proposals—including significant benefit reductions—Walker declared that, despite having been granted everything he claimed was needed to close the budget gap, no deal would be acceptable as long as workers retained the legal right to bargain. Under questioning by members of the U.S. Congress two months later, Walker conceded that some of the most draconian provisions in his legislation would not save the state anything.

So too, the governor of Ohio—which adopted a law similar to Wisconsin’s, only to see it overturned by a subsequent voter referendum—conceded that his proposed law “does not affect our budget.” In short, as noted earlier, the attack on collective bargaining rights was not a fiscal strategy, but a political agenda unrelated to budget requirements. The effort to diminish public services The efforts to undermine public employee unions are part and parcel of a broader strategy to diminish public services.

Legislators faced truly stark budget shortfalls in 2011, forcing them to contemplate drastic cuts to essential services. In Arizona, for instance, the governor proposed cutting off health insurance for nearly 300,000 people—including some in the middle of chemotherapy or dialysis treatments. Texas eliminated over 10,000 teaching jobs; cut funding that supported full-day pre-kindergarten programs for 100,000 at-risk kids; and announced plans to consider Medicaid cuts that could lead to the closing of 850 of the state’s 1,000 nursing homes, potentially forcing frail, low-income elderly residents into the streets. The city of Camden, N.J.—one of the most dangerous in the country—laid off half its police force. Budget cuts were particularly widespread—and particularly devastating—in the country’s school systems. In 2010–2011, 70 percent of all U.S.

School districts made cuts to essential services. Despite widespread evidence of the academic and economic value of preschool education, 12 states cut pre-K funding that year, including Arizona, which eliminated it completely. Ohio repealed full-day kindergarten, and cut its preschool program to the point that the number of four-year-olds enrolled in state-supported preschool is now 75 percent less than in 2001. Pennsylvania also cut back from full-day to half-day kindergarten in many districts—including Philadelphia, which also eliminated 40 percent of its teaching staff, cut its English-as-a-second-language program in half, and increased elementary school class sizes from 21 to 30. More than half the nation’s school districts have changed their thermostat settings—making classrooms hotter in summer and colder in winter—to reduce energy costs.

In Florida, the Seminole County school board proposed raising thermostats to 78 degrees, the maximum allowed by law. The Tuscon, Arizona, school district eliminated geometry, art, drama, and photography classes, increased class sizes to up to 40 students, and was still fined $1.9 million for failing to provide the minimum required instruction hours for seventh and eighth graders. North Carolina cut its textbook budget by 80 percent. Yet it is striking that even in the face of such drastic cuts, lawmakers often treated retrenchment not as an undesirable, temporary necessity, but rather as an opportunity to make what they perceived as overdue cuts. It would have been easy, for instance, to structure these cuts as temporary measures, with services set to be restored when economic growth reached a given level or state coffers were replenished. But no legislature took this route.

Indeed, if elected officials were simply concerned with closing budget gaps, they had many alternative methods for achieving this end without cutting essential services. For instance, in 2011 the deficits in all 50 states could have been erased entirely through two simple policy changes: effectively undoing the Bush tax cuts for the top 2 percent of income earners by imposing an equivalent income tax at the state level, and taxing capital gains at the same rate as ordinary income. Both of these policies are within the power of states to enact, without waiting for Congress to act. Yet none of the states even seriously explored this road to fiscal balance.

On the contrary, many legislatures enacted new tax giveaways to corporations and the wealthy while simultaneously slashing funding for schools, libraries, and health care. Twelve different states that enacted dramatic service cuts in 2011 also provided large new tax cuts. Michigan, for example, adopted a bill, authored by an ALEC member, that eliminated the state’s primary business tax and substituted a flat 6 percent corporate tax—costing the state $1 billion per year in lost revenue—even while cutting K–12 funding by $470 per student.

Despite the dire impact on education, the corporate tax cut was vigorously supported by the Chamber of Commerce, National Federation of Independent Business, and Michigan Restaurant Association. Likewise, Florida eliminated its corporate income tax for nearly half the state’s businesses, adopting a bill co-sponsored by a quartet of ALEC legislators and hailed by the Chamber of Commerce as the first step toward a complete phase-out of corporate income taxes. And Ohio phased out its inheritance tax—which had only ever affected the wealthiest 7 percent of estates—forgoing almost $300 million a year in funds that had been primarily dedicated to local government services.

This bill, too, received the avid support of the Chamber of Commerce (which hailed the bill as “the culmination of a decade-long advocacy effort”), National Federation of Independent Business (celebrating it among its “key victories”), and Americans for Prosperity (which applauded legislators’ “political courage” in abolishing inheritance taxes). Similarly, several states that enacted drastic cuts maintained significant “rainy day” funds that they chose to leave untouched, including Louisiana, South Carolina, and Iowa—whose rainy day fund was more than three times as large as its 2012 budget deficit. Texas’s $18 billion budget gap could have been partially offset by tapping a portion of the state’s $6 billion rainy day fund, but the governor left those reserves intact even while imposing steep cuts to education, health care, and other public services. Finally, rather than seeking paths to eventually restore essential services, corporate lobbyists sought to lock in these cuts and guarantee that services would never be restored to a more robust level. Corporate-funded lobbies such as ALEC and Americans for Prosperity have long advocated measures, such as a so-called taxpayer bill of rights (TABOR), that constitutionally limit future state spending to the rate of population growth plus inflation. There are multiple concerns with such formulae. For example, they prevent states from effectively aiding those in need or adopting countercyclical measures during economic downturns.

Additionally, because the cost of core public services such as health care and education increases faster than the general rate of inflation, spending limits tied to the consumer price index force real (inflation-adjusted) reductions in service levels over time. Colorado is the only state to have adopted a TABOR provision to date, and its impacts were so troubling that the state’s citizens voted in 2005 to suspend the TABOR formula. But to enact such measures in the depths of recession would entail even greater pain. TABOR-style proposals would take cuts made in response to record budget deficits caused by the worst economic downturn in 70 years, and lock these in as the new high-water mark of public services that could never be exceeded, even after economic recovery. Yet this is exactly what the nation’s most active corporate lobbies advocated, and what several states pursued.

In Michigan, legislators adopted a ballot referral asking voters to amend their state’s constitution to require a two-thirds supermajority approval for any future tax increases. The proposal was strongly supported by the National Federation of Independent Business (NFIB), which explained that it wanted to “lockdown some pretty substantive tax reforms” that the legislature had recently made. The budget crises of recent years were greeted not as tragedy, but as opportunity—a chance to advance long-held agendas and to lock in new restrictions on public services and workers’ rights. The desire to lock in budget cuts rather than restore services as revenues rebound was recently evident in Texas, a state frequently touted as a national model by both the Chamber of Commerce and ALEC. Texas enacted draconian cuts in 2010–2012. But by January 2013, the economy had rebounded, state revenues had increased by 12.4 percent, and budget officials were projecting an $8.8 billion surplus. Rather than restoring cut services, however, Gov.

Rick Perry insisted the state had “[brought] in more than we need” and used his State of the State address to call for a constitutional amendment allowing “excess tax receipts” to be rebated to taxpayers. Thus, for the corporate lobbies that constitute the single most powerful force driving conservative politics, the budget crises of recent years were greeted not as tragedy, but as opportunity—a chance to advance long-held agendas and to lock in new restrictions on public services and workers’ rights. Undermining public employees—union or not Beyond undermining public employee unions and reducing public services, corporate lobbies are also attempting to remove civil service protections and reduce public employee pay even in states with no government worker unions. Starting in the late 1990s, ALEC began promoting model legislation calling for the elimination of civil service protections and the conversion of public employees to at-will status. In 2012, this goal was achieved in Arizona, when the state adopted a law—authored by ALEC Task Force member Rep. Justin Olson—that largely abolishes the state’s civil service system.

Arizona public employees have no right to collective bargaining; thus, the attack on public employees there has nothing to do with union contracts. The Arizona governor’s office projects that within four years of the law’s passage, over 80 percent of state employees will be stripped of civil service protections and converted to at-will status. The bill eliminates the system of regular across-the-board raises for employees, making raises instead dependent on supervisors’ discretion. It also abolishes the requirement that job openings be widely advertised and that a wide range of qualified applicants be given an opportunity for consideration—practices designed to avoid political favoritism and facilitate affirmative action. It instead allows supervisors to simply pick their favorites with minimal procedural requirements.

Jan Brewer trumpeted the fact that abolishing civil service protections would allow state managers to proceed with additional measures that accelerate work requirements and decrease employee compensation. The law “will usher in a host of HR practices modeled after those that are commonplace in the private sector,” the governor’s office stated, including “changes in administrative leave; overtime and compensatory leave; workers’ compensation; and hiring practices.” As public employee compensation is cut back, it is likely that the new law will have a negative ripple effect in the private-sector labor market. The State of Arizona is the single largest employer in both Phoenix and Tucson, the state’s two largest cities. Where public employment plays a leading role in local labor markets, it influences wage and benefit standards in the broader private economy.

If secretaries at the University of Arizona get overtime pay and reasonable family leave rights, for instance, this increases pressure on private employers to approach those standards—if not match them—if they hope to attract the most skilled employees. Conversely, cutting state employee compensation reduces the competitive pressure on private-sector employers. Thus, at least in those areas where the state is a leading employer, the degradation of public-sector labor standards will weaken workers’ bargaining leverage in the labor market as a whole. Beyond its impact on compensation, the abolition of civil service protections threatens to undermine the ability of public servants to independently administer and enforce state law without fear of retribution from politically connected corporations. Many Arizonans spoke out against this bill, noting that civil service protections were created as a response to the long history of corrupt patronage practices and cronyism in government hiring and administration.

But the bill was strongly supported by the business community, with the Chamber of Commerce designating it a top legislative priority. The National Federation of Independent Business likewise explained, in an editorial titled “Rewarding the Worth, Removing the Worthless,” that much of “business owners’ frustrations with the bureaucracy” stems from “entrenched middle managers in state employ who use and abuse their discretion within a regulatory environment.” Stripping these bureaucrats of civil service protections will make government “more responsive,” the NFIB argued. However, the civil service was established, in part, precisely to avoid the type of “responsive” government in which a wealthy supporter’s phone call to the governor’s office can result in regulatory staff overlooking violations, going light on fines, or approving questionable practices.

For the corporate lobbies, it appears that a return to past practice may be a welcome change. In this sense, the Arizona statute sheds important light on the extent to which corporate lobbies’ attacks on public-sector unions are not necessarily driven by anti-unionism per se, but by a broader agenda of freeing business owners from public regulations and lowering labor standards for non-union and union workers alike. From the public sector to the private The attacks on public employees that have become so commonplace since 2011 have largely been framed as a call for fiscal austerity, insisting that government live within its means and not overburden taxpayers. However, when one pulls back from these particular battles to examine the full agenda of the leading corporate lobbies, it becomes clear that restricting the rights and compensation of public employees is only one component of a much broader agenda aimed at transforming labor standards across the economy. Most of this agenda has little to do with unions and nothing to do with public budgets.

In state after state, the same corporate lobbies that have played leading roles in fighting public employee unions have also launched equally vigorous attacks against the union rights of private-sector workers—an issue utterly unrelated to budget deficits or the size of government. Scott Walker himself famously confided to an investor that his attack on public employee unions was part of a “divide and conquer” strategy that would ultimately enable him to undermine private-sector unions as well, through so-called “right to work” legislation. In 2011–2012, 19 states introduced legislation mandating “right to work” laws, and both Indiana and Michigan adopted such laws in 2012. Virtually all the major employer associations and corporate lobbies embraced “right to work” as a top legislative priority. The Orwellian-named “right to work” laws do not guarantee anyone a job. Rather, they make it illegal for a union to require that employees who benefit from a collective contract contribute their fair share of the costs of administering that contract.

By weakening unions’ ability to sustain themselves financially, such laws aim to undermine the bargaining power of organized workers, and ultimately to drive private-sector unions out of existence. The corroding effects of “right to work” are the same for unions as they would be for any other type of organization. Under federal law, unions are required to provide all services to any worker covered by a union contract, for no charge—regardless of whether that person chooses to pay dues.

Inevitably, when “right to work” laws guarantee employees can benefit from union contracts with no requirement to pay their share of the costs of producing that benefit, some will choose to avoid paying. Indeed, the Chamber of Commerce itself would not agree to live by the rules it seeks to impose on unions through “right to work” laws. Thus, when one former member of the Owensboro, Kentucky, Chamber of Commerce chose to stop paying dues—perhaps out of disagreement with the Chamber’s political advocacy—the member asked if it would be possible to continue to receive member benefits without paying dues.

Absolutely not, the Chamber replied. “It would be against Chamber by-laws and policy to consider any organization or business a member without dues being paid,” the Chamber explained. “The vast majority of the Chamber’s annual revenues come from member dues, and it would be unfair to the other 850+ members to allow an organization not paying dues to be included in member benefits.” The Chamber’s logic is irrefutable: If it provided services without requiring dues, it could not sustain itself as a viable organization. This, then, is the goal of “right to work” laws—to make unions financially unviable, so that corporations can avoid having to negotiate with their own employees. Case study: An offensive aimed at both union and non-union private-sector workers—Lowering labor standards in the construction industry In addition to the “right to work” assaults on private-sector unions as a whole, the past two years have brought a series of attacks aimed specifically at lowering labor standards in the construction industry. Although these are often framed as attacks against unionized workers, the actual legislative proposals aim at non-union as well as union workers. Construction plays a critical role in the U.S.

Labor market as one of the most important sources of skilled, decently paying jobs that do not require a college degree and that cannot be shipped abroad. In addition, construction is projected to be one of the fastest-growing industries during the current decade, second only to health care. Efforts to lower wages, benefits, and working conditions in this industry are likely to have far-ranging impacts on working- and middle-class communities across the country where—particularly as manufacturing jobs have disappeared—construction is an increasingly critical source of work for those looking to support their families at a minimally decent living standard. The organizations representing anti-union construction owners and investors—including the Chamber of Commerce, Business Roundtable, and Associated Builders and Contractors—have sought for decades to lower labor standards and diminish workers’ bargaining power in the industry.

The elections of 2010 and subsequent state fiscal crises provided a political opening for advancing these longstanding goals. For the past two years, these organizations have focused on restricting or prohibiting both project labor agreements and prevailing wage laws.

Project labor agreements A project labor agreement (PLA) is an agreement established at the start of large, complex construction projects involving multiple types of contractors that sets the terms of employment for all contractors’ employees. PLAs were first used on the big public works projects of the 1930s. At Grand Coulee and Hoover dams, project managers sought to avoid a potentially endless series of labor negotiations as one contract after another came up for renewal, causing expensive delays and generating a steady threat of strikes. The elegant solution to the problem was to put all workers under a single, umbrella contract that was tailor-made for that specific project. In recent years, government agencies have also negotiated cost-saving concessions, such as no-strike clauses or reduced premium pay, as part of the terms of a PLA.

Any contractor—union or non-union—can work on projects under a typical PLA, as long as it abides by the established terms of employment. For example, 30 percent of the contractors on Boston’s Central Artery/Tunnel project—the “Big Dig”—were non-union.

Generally, workers are hired for these projects through a union hiring hall, but both union and non-union workers may be hired through the hall, and non-union contractors are often specifically authorized to bring their core employees with them onto a PLA project. Nevertheless, because they perceive that PLAs benefit unions, non-union contractors generally want the law to prohibit PLAs. PLAs ensure a steady flow of highly trained construction labor, and agencies typically look to them as a mechanism for achieving cost savings on complex projects. New York State’s School Construction Authority, for instance, was estimated to have saved $44 million over a five-year period through the use of PLAs. PLAs also often serve as a mechanism for boosting local hiring and community development.

Over the past two decades, more than 100 PLAs have been implemented that include requirements for local hiring, establishment of local apprenticeship programs, and preferential job access for women and minorities. One such example is the construction of Nationals Park in Washington, D.C., which was built under a PLA, was completed in record time, and achieved the distinction of being the first professional sports facility certified as “green.” Roughly 600 District of Columbia residents worked on the ballpark project, and 91 percent of all new apprentices brought onto the job were District residents. Thus, the PLA enabled the District to leverage its construction dollars into nurturing the city’s skilled workforce of the future. Further, the Nationals Park PLA fostered a commitment of over $200 million in contracts to local, minority-owned firms. None of this would have occurred without a PLA. PLAs are not limited to the public sector; a significant number of private corporations—including Boeing, Disney, General Motors, Inland Steel, ARCO, Pfizer, and Yale University—have chosen to use PLAs because they see them guaranteeing high quality craftsmanship and timely, safe, and cost-efficient construction. Toyota has used a PLA on every plant it has constructed in the United States.

Despite these advantages, 10 states passed laws outlawing or restricting the use of project labor agreements in 2011–2012. PLAs have never been required by statute; rather, they are an available option that state agencies may use if desired. Each of the bills passed, then, does not overturn a government mandate but, on the contrary, imposes one by prohibiting public agencies from using PLAs even if those responsible for the project think a PLA is warranted. Furthermore, the statutes adopted in the past two years generally prohibit local governments—towns, counties, school districts, and other local entities—as well as states from using PLAs.

For example, Arizona’s SB 1403—passed with strong support from the state chapter of the Associated General Contractors—prohibits any public entity from using PLAs. Many of these laws mandate harsh penalties for violations—public agencies in Idaho, for instance, face fines of up to $100,000 for using PLAs.

Thus, legislators have stripped from both state and local officials the right to use one tool of construction management that private corporations as well as public agencies have historically found to increase efficiency. Hypocritically, the ALEC-affiliated Associated Builders and Contractors attacks laws that enable PLAs, such as one in California that prohibits local government bans on PLAs, because they “interfere with local control” even as ALEC and ABC promote bans on PLAs that constitute much greater interference with the rights of local governments.

The real issue is hostility to collective bargaining as a route to higher wages. The attack on prevailing wage laws Prevailing wage laws were first adopted by state legislatures in the late 19th and early 20th centuries as a means of guaranteeing that publicly funded construction does not undermine wage standards in local communities. Thirty-two states plus the District of Columbia now uphold some form of prevailing wage law.

Such laws require that states survey construction employers to determine the wages and benefits provided for various skilled occupations. The typical rate for each occupation is deemed the “prevailing” wage for that local area. Publicly funded construction projects are then required to pay these wage levels to all workers employed on the project.

Prevailing wage laws in no way require that work be performed by union members or under a union contract. Rather, by establishing a level playing field regarding employee compensation, such laws encourage a constructive competition—based on high skills, effective management, and business acumen—rather than a destructive competition based on cutting wages to the lowest level possible. Perhaps unsurprisingly, non-union contractors whose primary competitive advantage lies in low wage rates have long advocated the repeal of prevailing wage laws. In 2011–2012, five states passed laws that significantly scaled back prevailing wage standards, ranging from complete repeal to modifying the extent of the law’s coverage or the method of calculating mandated wage rates.

In Louisiana, Arizona, Iowa, and Idaho—all states that have no prevailing wage laws—legislators adopted statutes proactively prohibiting cities, counties, or school districts within the states from adopting their own local wage standards. Conexant Smartaudio Hd Driver Windows 8.1. Even where prevailing wage laws were modified rather than repealed, this action appears to have been taken as a first step toward the ultimate goal of repeal.

ALEC’s explicit goal is to abolish all prevailing wage laws in all jurisdictions, and it promotes model legislation to that end. Where that is not politically possible, however, the organization embraces half-measures as steps along the way toward the end goal. For example, Wisconsin retained its prevailing wage law, but legislators in 2011 raised the threshold at which wage requirements apply, insisted that private projects built with public funding are not required to pay prevailing wages, and prohibited localities from enacting their own wage standards—including retroactively striking down a Milwaukee ordinance that established local prevailing wages and gave local contractors preference in bidding on large projects. The broad pattern of legislation across the states suggests that such half-measures do not constitute true alternative policy solutions, but merely rest stops and halfway houses on the road to a future where construction workers will bid against each other, with no wage floor and no public standards defining fair pay. Economic impact of repealing prevailing wage laws It is critical to note that prevailing wage laws are not strictly a union issue. They benefit both union and non-union employees as well as their broader communities, as affected workers’ increased purchasing power leads to expanded consumer demand in the local economy.

There is no central data source that measures the share of state and local construction performed by union and non-union workers. Data from the Bureau of Labor Statistics show that, in the states with prevailing wage laws, unions represent an average of 18.8 percent of the construction workforce. This estimate is likely low because it includes administrative and managerial employees employed by firms in this industry. The union share of actual construction workers is thus likely closer to 25 percent. As a conservative estimate, one might project that unionization on public works is double the rate in the industry as a whole, which would mean that 50 percent of publicly funded construction work in these states is done by non-union workers. Collectively, the states with prevailing wage laws include a total of just over 800,000 unionized construction workers. If prevailing wage work were equally spread out across this workforce, along with an equal number of non-union workers, this would mean that state prevailing wage laws affect over 1.6 million construction workers across the country—half union, half non-union.

Based on estimates from the conservative Mackinac Center, whose report serves as one of corporate advocates’ primary measures of prevailing wage impacts, the effect of these state laws would be to increase annual earnings by over $2,800 for each of those 1.6 million workers. Thus, if the Mackinac Center’s methodology is accurate, those who call for repeal of prevailing wage laws are advocating a wage cut amounting to nearly $3,000 per year for hundreds of thousands of non-union as well as union construction workers, spread all across the country in communities that look to this industry as a key source of decently paying jobs. If attacking prevailing wage laws is not simply an anti-union strategy, what explains the vehemence of corporate lobbies’ activism on this issue? The campaign to dismantle prevailing wages doubtless reflects non-union contractors’ desire to drive higher-wage competitors out of business.

In addition, prevailing wages threaten to raise the economic expectations of the non-union workforce. One conservative think tank explains that “many contractors who are paying market wages to their employees are reluctant to bid on public works construction projects. It is difficult to explain to an employee why he or she is making more money one day working on a public works project than the next day, doing exactly the same work on a private job.” The difficulty is doubtless increased by employees’ realization that union workers get paid the higher wage every day of the year, while they—as soon as the public works project is over—will go back to earning much less. By eliminating prevailing wage laws, non-union employers may hope to muffle their own employees’ demand for improved treatment. In addition, the attacks on PLAs and prevailing wage laws must be seen in the context of broader efforts to dismantle labor market protections for both union and non-union employees in the construction industry—beginning with eliminating state licensing requirements for electricians and plumbers. Licensing requirements limit the supply of skilled labor and enable licensed tradespeople to command higher wages.

The minimum wage is one of the few areas of bipartisan consensus. Yet the corporate lobbies have been fierce, and largely successful, in their opposition to any increase in the minimum wage.

Indiana heeded ALEC’s call and passed legislation—strongly supported by the state Chamber of Commerce—that prohibits local governments from adopting a minimum wage higher than the state’s; Indiana followed the model set earlier by Florida legislators, who adopted a similar ban in 2003. In 2013, Mississippi—which has no state minimum wage—went even further, adopting a law that bans cities and counties within the state from adopting any minimum wage, living wage, or paid or unpaid sick leave rights for local workers.

In other states, the business lobbies tried but failed to advance legislation repealing or restricting state minimum-wage laws. However, these attempts serve to some degree as guideposts for the continuing campaign of the corporate lobbies, and we may expect to see these efforts resurrected in coming years. Most tellingly, in Nevada, Missouri, and Arizona, legislators sought to undo the will of voters who, in previous ballot initiatives, had approved indexing their state minimum wage to the inflation rate. In Nevada, the Retail Association joined the Las Vegas and Reno Chambers of Commerce in promoting a bill that would have removed minimum-wage standards—previously established by popular referendum—from the state constitution.

In Missouri, the Chamber of Commerce and other corporate lobbyists presented Republican leaders with a six-point plan that included capping minimum-wage increases, effectively cancelling a 2006 referendum that linked the minimum wage to the CPI. In Arizona, 71 percent of voters supported a 2004 proposal indexing their state minimum wage, but in 2012 legislators attempted to abolish this requirement.

This time, despite the vocal support of the Restaurant Association, legislators were forced to relent when the move generated broad popular criticism. Minimum wage for tipped employees The failure of minimum wages to keep pace with inflation has had particularly stark consequences for the 3.3 million Americans who work as waiters, waitresses, bartenders, and bussers. In 1966, the federal government established a subminimum wage for tipped employees, on the theory that tips would bring them up to the level of the standard minimum wage. At the time, the tipped wage was set at 50 percent of the regular minimum. However, the tipped wage has been frozen at $2.13 per hour for more than 20 years, and now amounts to just 29.4 percent of the regular minimum wage.

The country’s tipped employees are overwhelmingly female, and nearly half are 30 years old or older. How these employees are treated varies by state. In 18 states, tipped workers are entitled only to the federal subminimum wage of $2.13 per hour. Twenty-five states have established a tipped wage below the regular minimum wage, but higher than the federal subminimum. Only seven states mandate that tipped employees be paid the regular minimum wage. The economic impact of subminimum wages is dramatic for these employees and their families. The poverty rate for waiters and waitresses—who comprise the bulk of all tipped employees—is 250 percent higher than that of the workforce as a whole.

Furthermore, the share of waitstaff in poverty is directly related to state wage laws. In states where waitstaff receive the full minimum wage, 13.6 percent are poor; in states with a tipped wage set somewhere between $2.13 and the federal minimum, waitstaff poverty is 16.2 percent; and in states that apply the federal subminimum wage of $2.13, waitstaff poverty rises to 19.4 percent. Furthermore, even the subminimum wage for tipped employees is often extremely difficult to enforce.

By law, if the combination of an employee’s tips and wages do not add up to the regular minimum wage, the employer must make up the difference. However, responsibility for monitoring compliance typically rests with employees, who must record exactly how much they receive in tips during a workweek and how many hours they work, and then petition their employer to make up the difference if they are short. In the normal disorder of everyday life, most employees are unlikely to maintain records that would stand up to legal challenge. This is all the more true for non-native English speakers and those with limited education. Even for those who do keep exact records, however, this simply enables them to make a request of their employers, who regularly reject such claims.

Enforcing workers’ rights even with proper documentation becomes a laborious, costly, and uncertain process. For this reason, a 2008 survey suggests that as many as 30 percent of tipped employees do not receive even the subminimum wage from their employer.

Yet corporate lobbies routinely resist attempts to increase the tipped minimum wage or strengthen employees’ ability to effectively enforce their rights under law. In the past two years, two states sought to lower the tipped minimum wage, two others worked to redefine “tips” in ways that weaken employees’ right to keep what they earn, and one state, while insisting that tips count as wages for income tax purposes, attempted to declare that they must not be counted for purposes of calculating workers’ compensation benefits for waitstaff who are injured on the job. Legislators in both Arizona and Florida sought to lower their states’ tipped minimum wage. Both states maintain tipped minimum-wage standards below the regular minimum wage but higher than the federal tipped rate; the objective of legislators in both cases was to push tipped wages closer to the federal tipped rate. Neither state presented evidence that the current wage levels create economic harm.

On the contrary, the National Restaurant Association identified Florida as having the third fastest-growing restaurant industry in the country, with record sales projected for 2012. Furthermore, legislators in both states acted in direct contradiction to the will of voters, who had established state tipped minimum wages by popular referendum.

In 2006, 65 percent of Arizonans voted to raise their state minimum wage to $6.75, with future increases based on the CPI. Since pre-existing law set the tipped rate at $3 per hour below the regular minimum wage, the 2006 vote set a floor of $3.75 for tipped wages. Yet in 2012, House Majority Leader and ALEC member Rep. Steve Court introduced a bill that would have cut that rate by one-third, to $2.53—in effect transferring $1.22 of hourly earnings from employees to owners. Ultimately the bill proved too unpopular and was withdrawn.

In Florida, the Restaurant and Lodging Association—whose national parent organization is an active ALEC member—worked with legislative allies to introduce a bill that would have effectively cut the state’s tipped minimum wage from $4.65 to $2.13. This would appear to have been a violation of the state constitution, which was amended in 2004 when voters approved by 72 percent to 28 percent a clause setting the state’s tipped minimum wage at $3.02 less than the state regular minimum wage, which itself is indexed to inflation. Nevertheless, the Restaurant Association protested that the state’s $4.65 tipped wage was “very unfair,” insisting that “it’s just going to be a matter of time before the back of this industry breaks. Minimum wage is killing them.” Thus, with the avid support of both the Florida Chamber of Commerce and Associated Industries of Florida, the Restaurant Association set out to contravene both the voters’ will and the state constitution. While neither state’s bill was enacted, they both provide a measure of how far employer associations may go to cut employee wages, and perhaps serve as a warning of future legislative offenses that should be anticipated. A different strategy was attempted in Wyoming and Maine, where legislators sought to revise the legal definition of wages in order to divert tip income from employees to employers.

In Wyoming, a bill co-sponsored by a group of ALEC-affiliated legislators and backed by the Restaurant Association would have given employers the right to force employees to pool their tips. While employees may have previously pooled tips, this was done voluntarily. In many restaurants, bussers, who are legally considered tipped employees, in fact receive little tip income. In such cases, employers are required to pay them the regular minimum wage. By forcing more highly tipped wait staff to pool earnings, employers may avoid this obligation—essentially cutting the take-home pay of wait staff by making them pay the bussers’ wages, with employers pocketing the difference as increased profits. In 2011, Maine legislators adopted a new law declaring that “service charges” do not legally constitute tips, and that they are therefore not the property of wait staff and may be taken by the employer. The statute—sponsored by an ALEC task force member and supported by the Restaurant Association—does not require restaurants to notify customers that the “service charge” does not go to servers; many patrons likely believe this charge constitutes the gratuity, and therefore provide little if any additional tip.

As in Wyoming, then, the Maine law constitutes a direct transfer of income from employees to owners, accomplished through the latter’s political power. Finally, Montana’s legislature passed a law mandating that tips could not be counted as wages for purposes of workers’ compensation claims. This law—supported by the Montana Chamber of Commerce and celebrated as “historic” by the Restaurant Association but ultimately vetoed by the state’s Democratic governor—would have thus allowed employers to pay subminimum wages on the grounds that tips constitute wages; then, if waitstaff are injured, it would have prevented customary tip income from being counted when calculating workers’ compensation benefits. The bill would additionally have made it nearly impossible for tipped employees to qualify for permanent, partial disability benefits unless they suffered a particularly severe injury. Legislators had earlier adopted a more far-reaching bill that declared minimum-wage workers ineligible for permanent, partial disability payments if they suffered only minor injuries; the bill reasons that they would still be able to find minimum-wage employment and thus could not have suffered any wage loss from the injuries. By declaring that tips could not be counted in workers’ compensation calculations, the new law would have designated all tipped employees as minimum-wage workers and thus ineligible for permanent, partial compensation for minor workplace injuries.

Wage theft While low wages pose a critical problem, millions of Americans face an even more elemental challenge: the inability to obtain even those wages they have legally earned. The country suffers an epidemic of wage theft, as large numbers of employers violate minimum-wage, overtime, and other wage and hour laws with virtual impunity. An extensive multi-city survey in 2009 revealed alarming patterns of illegally withheld earnings.

Fully 64 percent of low-wage workers have some amount of pay stolen out of their paychecks by their employers every week, including 26 percent who are effectively paid less than minimum wage. Fully three-quarters of workers who are due overtime have part or all of their earned overtime wages stolen by their employer. In total, the average low-wage worker loses a stunning $2,634 per year in unpaid wages, representing 15 percent of their earned income.

Indeed, the amount of money stolen out of employees’ paychecks every year is far greater than the combined total stolen in all the bank robberies, gas station robberies, and convenience store robberies in the country, as shown in Figure G. It is hard to imagine an employment policy that would have a greater impact on hard-working, low-wage Americans than rigorously enforcing already-existing laws. Copy the code below to embed this chart on your website. Enforcement of wage and hour laws has long been strikingly lax.

When the federal minimum-wage law was first established in 1941, there was one federal workplace inspector for every 11,000 workers. By 2008, the number of laws that inspectors are responsible for enforcing had grown dramatically, but the number of inspectors per worker was less than one-tenth what it had been in 1941, with 141,000 workers for every federal enforcement agent. With the current staff of federal workplace investigators, the average employer has just a 0.001 percent chance of being investigated in a given year. That is, an employer would have to operate for 1,000 years to have even a 1 percent chance of being audited by Department of Labor inspectors. Budget cuts and political choices have exacerbated this crisis even further at the state level.

A majority of states have reduced the number of staff dedicated to enforcement of wage and hour laws over the past five years. In some states, this has been a consequence of broader budget cuts, while in others, enforcement of workplace laws has been singled out for defunding. Ohio’s General Assembly, for instance, voted to completely eliminate funding for labor inspectors in 2011, leaving no staff to enforce state minimum-wage, overtime, child labor, or prevailing wage laws. Funding was subsequently restored by the state’s Controlling Board, but even so, the state was left only six inspectors for the entire workforce. A seventh inspector was slated to begin work later in 2011, at which point each agent would have responsibility for 616,000 private-sector workers. Yet in that same year, the Ohio House adopted a budget that would cut the workplace enforcement budget by 25 percent over the next two years.

Missouri House Speaker Steven Tilley likewise called for the complete elimination of funding for the state’s nine labor investigators. In 2010, Missouri’s labor department collected $200,000 in restitution for minimum-wage violations and $500,000 for prevailing-wage violations, and issued 1,714 citations for child-labor violations. Yet Tilley charged that investigators were being “overzealous,” particularly in prosecuting complaints of employers cheating on prevailing wages. Ultimately, Tilley compromised with the state’s Democratic governor, and the adopted budget eliminated only two of the Division of Labor Standards’ nine investigators rather than the entire staff. In either case, meager enforcement staff means there is little meaningful protection for employees’ rights under law. Indeed, because the enforcement mechanisms are so weak and the penalties for stealing wages are generally so modest, even employers who have been found guilty and forced to pay penalties for wage theft are often undeterred from continuing these practices. Department of Labor investigation found that one-third of employers who had previously violated wage and hour laws continued to do so.

The battle over wage theft ordinances The Progressive States Network—a national organization of state legislators—has identified the key elements of effective policy for combating wage theft. These include requirements that employers keep detailed pay records and allow employees to receive a thorough explanation of how each paycheck was calculated; the right of state authorities to inspect employers’ records; workers’ private right of action to sue for unpaid wages as individuals or in class actions; protection of complainants against retaliation by their employers; and the provision of attorney fees, damages, and penalties as part of the enforcement process. Yet corporate lobbies have been working hard to prohibit enforcement mechanisms such as these. In the past two years, these efforts were most highly visible in Florida. A recent study from Florida International University estimates that $60–90 million per year is stolen out of Florida workers’ paychecks. Yet since Florida’s legislature abolished the state’s Department of Labor in 2002, there are no state enforcement personnel to combat this problem.

Further, the state attorney general has failed to bring a single case of wage theft in recent years. Thus, the only means for seeking enforcement under current law is for employees to turn to the Legal Aid Society, which relies entirely on volunteer attorneys. In 2010, Miami-Dade County responded to this crisis by instituting the nation’s first broad municipal wage theft law. Enforcement is carried out by the Department of Small Business Administration through a streamlined process similar to small claims courts; employers pay the costs of county hearings—thus enforcement is costless to taxpayers—and employees are entitled to recover up to double damages. In its first year, the county prosecuted over 600 claims of stolen wages, and recovered over $1.7 million in illegally withheld pay. Based on this success, Broward County adopted a similar statute, and the model seemed poised to spread across the state.

Corporate lobbies seek to deny employees any effective mechanism for ensuring they receive the wages they have legally earned. Almost immediately following the adoption of the Miami-Dade ordinance, however, business lobbies began pushing legislators to overturn the ordinance and ban other localities from adopting similar laws. The Florida Retail Federation filed a lawsuit—ultimately rejected by the court—arguing that the wage theft ordinance was unconstitutional.

At the same time, business lobbyists set out to prevent other counties from taking action. In 2011, Palm Beach County debated establishing a system similar to that of Miami-Dade. In one five-month period in 2011, Miami-Dade had recovered 46 percent of the disputed wages brought to its attention; by comparison, Palm Beach County, relying on Legal Aid volunteers, had recovered only 2.5 percent. Business lobbyists suggested that the proposed Palm Beach County ordinance would create a costly new bureaucracy—despite county administrators reporting they could operate the program at little to no additional cost. Florida Retail Federation spokeswoman Samantha Padgett further argued that “in these economic times it doesn’t encourage business development to add additional regulations.” At the end of 2012, county commissioners sided with business lobbyists and rejected the new ordinance in favor of an alternative proposal—promoted by the Business Forum and Associated Builders and Contractors and widely criticized by religious, immigrant, and labor organizations—that simply provides Legal Aid $100,000 per year to supply volunteer attorneys for victims of wage theft. While local employer associations fought the Palm Beach ordinance, their statewide organizations pursued legislation that would repeal existing wage theft ordinances and prohibit similar measures in the future. The legislation—avidly supported by the Chamber of Commerce, Retail Federation, and other business lobbies—stipulates that “a county, municipality, or political subdivision of the state may not adopt or maintain in effect any law, ordinance, or rule that creates requirements, regulations, or processes for the purpose of addressing wage theft.” The legislation was not ultimately adopted into law, and corporate lobbies received widespread criticism for the effort.

Nevertheless, business advocates began gearing up for further preemption efforts. In 2013, a similar bill passed the state House of Representatives, with the Florida Retail Federation naming Rep. Tom Goodson “Representative of the Year” for his sponsorship, but it died in the Senate. Thus, in perhaps the single most impactful policy area for hard-working employees struggling to get by in the non-union private sector, corporate lobbies seek to deny employees any effective mechanism for ensuring they receive the wages they have legally earned. ALEC’s “Economic Civil Rights Act” insists that all Americans have a fundamental “right to earn an honest living,” invoking this right as an argument against licensing requirements for plumbers and electricians. But if the “right to earn an honest living” means anything, it must include a right to be paid what you earn.

Child labor In the debates among the 2012 Republican presidential candidates, Newt Gingrich famously criticized child labor laws as “stupid,” and specifically called for schools to replace unionized custodians with lower-wage student employees. Idaho was the first state to make Gingrich’s vision reality when it adopted a law allowing kids as young as 12 to be employed for up to 10 hours per week cleaning and performing other manual labor around their schools. In the Meridian district—which championed the new law—school district spokesman Eric Exline touted the program as a means of saving money by avoiding having to hire adults, and of teaching middle school students that “you have to be on time [and] you have to do what you’re asked, what your supervisor is telling you.” Wisconsin focused on older students—age 16 and over—but enacted much more sweeping legislation, abolishing all restrictions on the number of hours minors are permitted to work during the school year. Previously, 16- and 17-year-olds could not work more than five hours a day on school days, more than 26 hours per week during the school year, and more than six days in a row. Despite substantial evidence that increased workloads make it more difficult for students to concentrate in school, the new law frees 16- and 17-year-olds to work an unlimited number of hours per week, seven days a week, throughout the school year.

The bill’s passage was celebrated by the Wisconsin Grocery Association, which explained that grocers are not “trying to overwork these kids or create a sweatshop,” but “want to give kids that great first opportunity you get in a grocery store.” Maine followed in Wisconsin’s footsteps, if not going quite so far. The legislature first considered the “Enhance Access to the Workplace for Minors” Act, which would have created a subminimum wage of $5.25 for anyone under 20 years of age and lifted all restrictions on the number of hours teenagers can work; the bill’s author argued that many youth “have no experience, and perhaps no work ethic, and don’t merit the minimum wage until they learn a job.” This bill, however, proved too extreme even for Maine’s conservative legislature. Instead, legislators adopted a less ambitious law that—with the strong support of the Maine Restaurant Association—expands the number of hours high school students can work from four to six per school day and from 20 to 24 per school week. One of the bill’s sponsors explained that students “could get home from school at 3:00 and could work from 4:00–9:00. They’d still have plenty of time for homework. Most of these kids are generally up well past 10:00.

They could work a 3:00–9:00 shift.” Indeed, this legislator suggested that the very concept of child labor codes might be objectionable. “Kids have parents,” insisted Rep. Bruce Bickford. “It’s not up to the government to regulate everybody’s life and lifestyle.

Take the government away. Let the parents take care of their kids.” Michigan likewise increased, from 15 to 24, the number of hours students may work during a school week.

The bill, sponsored by the House majority leader, was championed by a wide range of business lobbies and low-wage employers’ associations, including the Chamber of Commerce, Small Business Association, NFIB, Grocers Association, Lodging and Tourism Association, Licensed Beverage Association, and Association of Home Builders. Perhaps most outspoken was the Michigan Restaurant Association which, despite a statewide unemployment rate of 10.6 percent, told legislators that “many restaurants cannot find enough adult labor to fill available positions” and need the teenagers in order to stay afloat. While Idaho, Wisconsin, Michigan, and Maine are the only states to have actually passed legislation rolling back child labor protections in the past two years, similar proposals were advanced in a variety of other states, including Ohio, Utah, Minnesota, and Missouri, where State Sen. Jane Cunningham proposed allowing children of any age to work unlimited hours, and removing the state’s authority to inspect children’s working conditions.

Thus, the corporate lobbies seeking to undermine collective bargaining and unions’ political strength are also actively working to promote longer work hours for youth, and to use this labor force to undermine wage standards for adult employees. Unsurprisingly, like the construction industry, many of those advocating for expanded youth work hours—including the Restaurant Association, Hotel and Lodging Association, and Association of Home Builders—are also urging the federal government to allow them to import increased numbers of low-wage guestworkers. Overtime In several states, corporate lobbies sought to undo legal requirements to pay overtime rates for employees working more than 40 hours per week. Maine stripped truck drivers and their helpers of the right to overtime pay, as long as companies pay them on a non-hourly basis. Overtime pay is not only a critical source of income for truck drivers, but also an important brake on the incentive for drivers to operate extreme shifts. By contrast, the new law—sponsored by a representative who also opposed the minimum wage—provides an incentive to pay drivers per load delivered or mile driven, which in turn may encourage drivers to push themselves to unsafe limits of endurance.

An Ohio bill promoted by the Chamber of Commerce would have given private employers the option to deny overtime pay for employees, and instead provide them “compensatory time” on a straight time, hour-for-hour basis. The bill, which was introduced by two ALEC members and ultimately died in committee, allowed such a substitution only if employees requested it in writing. But the bill had no guarantee that employers would not condition preferable shifts on employees’ signing such statements, and was more generally riddled with loopholes. For instance, while employees could have accrued up to six weeks of compensatory time, the employer was not required to ensure that employees had the opportunity to actually use this time; thus, one might have accrued several weeks of compensatory time, but never have been granted permission to use it.

If one had unused compensatory time left at the end of any given year, the bill stipulated that employees be paid for that time at a straight time rate. In this case, rather than paying employees a 50 percent wage premium for time worked over 40 hours per week, the employer would have paid them nothing until the end of the year and then pocketed the 50 percent overtime premium that would have been required under the old law.

In Nevada, one of the few states that still require overtime pay for employees who work more than eight hours per day, business lobbyists sought to repeal this right. The bill, co-sponsored by four ALEC-affiliated senators, did not ultimately become law. It did, however, receive vocal support from Chamber of Commerce officials, who noted that the U.S. Chamber of Commerce graded Nevada’s employment law “very poorly,” in part because it required overtime after eight hours’ work. Abolishing the right to daily overtime, the Las Vegas Chamber of Commerce argued, “would significantly aid both employers and employees in achieving efficient and flexible scheduling.” As in Ohio, though this initiative was not adopted into law, it helps identify the goals that corporate lobbies continue to pursue through state legislation. Misclassification of employees as “independent contractors” One of the most common means by which employment standards are lowered or evaded is the reclassification of employees as “independent contractors”—often leaving employees ineligible for unemployment insurance or workers’ compensation, and removing them from minimum-wage, overtime, and labor law protections. It is common for employers to inaccurately and illegally declare employees to be contractors.

A 2000 study by the U.S. Department of Labor, for instance, found that 10–30 percent of audited employers misclassified workers.

In many states, there is no mechanism for workers to challenge their bosses’ designation except for filing unemployment or workers’ compensation claims—meaning one must be fired or injured before there is any legal avenue for contesting one’s status. In some industries, misclassification has become so commonplace that well-meaning employers are under pressure to wrongly classify their employees in order to not be undercut by less ethical competitors.

For employers, misclassification offers the added incentive of avoiding payroll, unemployment insurance, and workers’ compensation taxes; thus, misclassification affects state revenue as well as employees’ livelihoods. A study of New York State’s trucking industry, for instance, found that 18 percent of drivers are misclassified, resulting in the state losing $88 million per year in workers’ compensation payments. At the federal level, a 2009 report from the Government Accountability Office estimated that misclassification costs the federal government nearly $3 billion per year. Yet the same corporate lobbies that stress the overriding importance of deficit reduction when cutting public services seem unconcerned by this expansion of deficits through illegal employer classification schemes. States vary in their legal tests for distinguishing between employees and independent contractors, but the most common standard is the “ABC test.” By this definition, a person must satisfy three tests to be deemed an independent contractor: • No outside party controls or directs his work, either on paper or in fact.

• The service he provides is either outside the normal type of work that the client performs, or is outside the normal geographic area where the client performs services. • The individual is customarily engaged in an independently established business, often measured by the fact that the contractor works for more than one client. National corporate lobbies are seeking to dismantle this definition, thereby making it easier to classify employees as contractors. ALEC’s “Independent Contractor Definition Act,” for example, eliminates two of the three traditional criteria: It allows independent contractors to do work that is typically part of the employer’s work, and allows them to work for one employer only.

Chamber of Commerce likewise urges states to give employers wide leeway in determining employment status. The Chamber’s national ranking of state employment policy grades states on “the strength of acceptance of the independent-contractor relationship,” with the highest scores reserved for states that allow employers free rein in classifying the workforce. Colorado, by contrast, was graded poorly for its “presumption of employee status,” and for having “created a complaint process for workers who believe they have been misclassified as independent contractors.” Recently, both Maine and New Hampshire took steps to put the ALEC and Chamber of Commerce philosophy into law. Until 2010, Maine maintained the traditional “ABC test.” In 2012, however, the state adopted a new test that eliminates the requirements that employees work for more than one client and perform work outside the core functions of the firm. The new law was championed by both the Maine Chamber of Commerce and the National Federation of Independent Business.

The Chamber praised the bill for loosening the requirement that contractors exert complete control over their work process and for abandoning the requirement that contractors work for more than one client. Corporate lobbies have worked to defeat efforts at establishing a right to paid sick leave in New York City, Seattle, and Washington, D.C., and in the states of Connecticut, Maryland, Massachusetts, and Vermont. In Florida, legislators in 2013 acted preemptively, enacting a statewide ban that prohibits any city or county from establishing a local right to paid sick leave. The bill followed a campaign by community activists who gathered 50,000 petition signatures for a 2012 referendum that would have established sick leave rights for workers in Orange County, which includes Orlando. In response, the Orange County GOP chairman contacted a member of the county’s Board of Commissioners asking for “one good faith straight face test reason to at least delay it long enough to keep it off the ballot in November. After that, the Legislature can deliver the kill shot.” Following intense opposition to paid sick leave rights by the Walt Disney Co., among others, the Board of Commissioners voted 4 to 3 to keep the proposal off the ballot.

However, a judicial panel found the commissioners had violated the county charter and ordered the proposal placed back on the ballot; it was slated to be voted upon in August 2014. To head off this vote by Orange County residents—and the possibility this might set an example for other counties—Disney, Darden (owner of the Olive Garden restaurant chain), and other corporations threw their weight behind House Majority Leader and ALEC member Rep. Steve Precourt, who successfully championed legislation that denies any county’s voters the right to vote for local sick leave laws. The corporate lobbies have likewise sought to preemptively block the establishment of sick leave rights for new classes of employees, and to scale back those rights already on the books. In New Hampshire, for instance, the legislature in 2012 considered a bill that would have required employers to provide health benefits to part-time employees on a pro-rated basis. The Chamber of Commerce publicly opposed the bill, and it died in the legislature. In Wisconsin, the state Family and Medical Leave Act (FMLA) provides employees with certain benefits that do not exist under federal FMLA law.

With SB 8—co-sponsored by a pair of ALEC-affiliated legislators—lawmakers sought to strip Wisconsin employees’ right to those more generous benefits. Similarly, in 2011 Pennsylvania legislators—including a number of ALEC members—introduced a bill to roll back a provision in the state’s Public School Code providing school employees up to 10 paid sick days per year.

Thus employer associations and corporate lobbies have sought not only to lower the wage standards of non-union employees, but also to reduce their benefits and increase their insecurity. Workplace safety standards As corporate lobbies sought to roll back the union rights of both public- and private-sector employees, so too they worked to scale back regulations governing workplace safety and health. Like the offensive against working standards generally, these efforts were concentrated in states that had traditionally been relatively labor-friendly, but where corporate-backed legislators suddenly found themselves in a new position of unilateral political control. In Michigan, the legislature adopted a package of bills—supported by the Chamber of Commerce, NFIB, and Michigan Manufacturers Association—that make it nearly impossible for state authorities to issue any workplace safety regulation that is more strict than existing federal Occupational Safety and Health Administration (OSHA) rules. Michigan further prohibited state authorities from issuing any regulation protecting workers from repetitive motion injuries—a prohibition strongly supported by the state Chamber of Commerce, Restaurant Association, and NFIB. In recent years, the dangers of repetitive motion injuries—which had not been identified or understood at the time the initial OSHA regulations were adopted—have been widely documented. It is estimated that 28,000 Americans a year suffer repetitive motion injuries on the job, with a majority losing more than 20 days of work as a result of their injuries.

The Institute of Medicine estimates that between $45 billion and $54 billion is lost each year due to forgone wages, taxes, and productivity for employees who suffer from work-related repetitive motion injuries or other musculoskeletal disorders. Yet the business lobbies are determined to resist the expansion of OSHA regulations beyond the types of injuries that were identified when the legislation was first enacted in the 1970s. The corporate political agenda includes one-sided access to the courts, in which citizens are free to file suit to undermine labor standards but not to enforce them. In the past two years, both Wisconsin and Missouri passed laws reflecting these views. In Wisconsin, legislation introduced by seven senators—all ALEC members—repealed the right of victims of employment discrimination to sue for compensatory and punitive damages. This bill—signed by Gov. Walker in 2012—was passed with the vocal support of employer associations.

It is challenging to identify a single piece of corporate-backed legislation that would strengthen rather than undermine the wages and working conditions of workers, union or non-union. Conservative officials frequently tout the importance of local control.

Yet this principle is routinely ignored in the interest of lowering labor standards, with local wage laws a particularly common target. In 2011–2012, conservative legislators used their power at the state level to try to prevent any local governments from setting a higher standard for wages or benefits. This included banning localities from establishing their own minimum wages, prevailing wages, or living wages. In Wisconsin it also included banning localities from establishing sick leave policies more generous than the state’s.

The bill specifically abolished the right to sick leave that had been established in Milwaukee, approved by 69 percent of voters in a 2008 referendum. The corporate lobbies are thus engaged in an effort to reshape the economy by reshaping democracy. Were a state to adopt the entire package of corporate-backed legislation, it would create a polity in which citizens could vote to prohibit the use of PLAs, but could not vote to require that PLAs remain an option for local government. Local residents could vote to turn a public school into a charter school—thereby voiding union contracts—but would be prohibited from voting to establish a living wage level for school employees, or to institute a preference for locally based contractors, or to establish a right to sue for unpaid wages. With each such bill that is adopted, corporate advocates are constructing a system of selective democracy in which the ability to improve labor standards through legislation is increasingly restricted.

If the well-publicized attacks on public employee unions were not driven primarily by fiscal prudence, nor by a concern to safeguard the interests of hard-working non-union employees in the private sector, what does explain the breadth and vigor of such attacks? Why have large private corporations spent time, money, and energy attacking public employee unions? In part, public employment often raises wage and benefit standards in a local labor market that private employers are then pressured to meet; cutting public employee compensation makes it easier, in turn, to also reduce the pay of their private-sector counterparts. In addition to the impact on wages, it is important to note that the corporate lobbies’ efforts to curtail public services dovetail with anti-unionism, but are independent of it, as these efforts are undertaken with equal vigor in states where public employees have no right to bargain.

With a few narrow exceptions—such as transportation infrastructure and public safety spending in some jurisdictions—the corporate lobbies have pursued an agenda that shrinks vital public services, including education, health care, libraries, recreation, parks, communications, and others. In part, it may be that corporate lobbyists are seeking to engineer what might be termed a “revolution of falling expectations” among the public—with the elimination of public services being part of that.