IPS Blog

Iran Deal: A Game-Changer for the Middle East

Rainbow over Iran

(Image: marsmet545 / Flickr)

Negotiators in Lausanne, Switzerland just won a huge victory for diplomacy over war.

The hard-fought first-stage negotiations resulted in the outlines of an agreement that will significantly limit Iran’s nuclear program in return for significant relief from crippling economic sanctions imposed by the United States, the European Union, and the United Nations.

Both sides made major concessions, though it appears Iran’s are far greater.

Tehran accepted that U.S. and EU sanctions will not be lifted until after the UN’s watchdog agency verifies that Iran has fully implemented its new nuclear obligations — which could be years down the line. It agreed to severe cuts in its nuclear infrastructure, including the reduction of its current 19,000 centrifuges for enriching uranium to just over 6,000.

Tehran also consented to rebuild its heavy water reactor at Arak so that it will have no reprocessing capacity and thus cannot produce plutonium. Its spent fuel will be exported. The Fordow nuclear plant, moreover, will be turned into a technology research center without fissile material. And crucially, the UN’s International Atomic Energy Agency will be allowed to conduct unannounced inspections.

In return, the United States and its partners — the UK, France, Germany, Russia, and China — agreed that the UN resolution imposing international sanctions on Iran would be replaced by a new resolution that would end those sanctions but maintain some restrictions.

The framework didn’t specify whether the new resolution would be enforceable by military force, but it did reject an earlier demand by the United States and some of the Europeans for a “snap-back” trigger that would automatically re-impose sanctions if they claimed Iran wasn’t keeping its part of the bargain. Without that, a new Security Council decision — one subject to potential vetoes by at least Russia or China — will have to be voted on.

Additionally, while it didn’t explicitly reaffirm Iran’s rights under the Non-Proliferation Treaty, which include the right to pursue “nuclear energy for peaceful purposes without discrimination,” the agreement did acknowledge Iran’s “peaceful nuclear program” and sought to limit, not to end, Iran’s enrichment capacity.

Most importantly for skeptics of the talks, there’s no question that the broad parameters announced in Lausanne would qualitatively prevent any future Iranian decision — which all U.S. intelligence agencies still agree Iran hasn’t ever made — to try to build a nuclear bomb.

The restrictions impose a year-long “break-out” period, meaning it would take at least that long for Iran to even theoretically enrich enough uranium to build a bomb. And, as my colleague Stephen Myles at Win Without War reminds us, “The Iranians would still have to, ya know, build a bomb, figure out a way to hide it all from the inspectors all over their country, and convince the international community to sit idly by without responding while they broke the terms of a deal for one whole year.”

Reshaping the Middle East

Hardliners in both the United States and Iran opposed the agreement, but so far it appears that the pro-war faction in the U.S. Congress (mainly though not only Republicans) poses a far greater threat to the survival of the accord than the hawkish factions in Iran — especially since Ayatollah Ali Khameini, Iran’s Supreme Leader, has continued to support the nuclear negotiators.

For some of the U.S. opponents, the issue is purely partisan. They want President Obama to fail, and they’ll oppose anything he supports.

For many others, military intervention and regime change remain the first choice towards Iran — Senator John McCain already urged Israel to “go rogue” and attack Iran. Republicans in the Senate, following their 47-strong letter to Iran threatening to undermine any agreement signed by Obama, continue to lead efforts to impose new sanctions and to demand a congressional vote to accept or reject the agreement.

But the global potential for this agreement is far more important than the partisan posturing of right-wing militarists and neoconservative ideologues. If it holds — and if the final agreement, with all its technical annexes, can be completed as scheduled in three months — Lausanne can set the stage for an entirely new set of diplomatic relationships and alliances in the Middle East.

Indeed, the region could be significantly transformed by an end to the decades of U.S.-Iran hostility. With Washington and Tehran maintaining normal if not chummy diplomatic relations, joint efforts to end the fighting in Iraq, stop the catastrophic escalation underway in Yemen, and create a real international diplomatic campaign to end the Syrian civil war all become possible. A U.S. diplomatic posture that recognizes Iran as a major regional power would make a whole set of current challenges much easier to resolve.

Defending Progress

Regardless of whether that kind of grand bargain in the Middle East becomes possible, the current diplomatic initiative must be defended.

Efforts to undermine the Lausanne agreement are already underway.

Senate Republicans are hoping to win over enough Democrats to override Obama’s certain veto of a bill that would let Congress vote to reject the agreement. Fortunately, Democratic opposition to Israeli Prime Minister Benjamin Netanyahu’s blatant campaign to undermine the Iran negotiations has made that Republican effort more difficult. Defense of President Obama’s diplomacy by the Black Caucus and Progressive Caucus of Congress has pulled more Democrats away from the anti-negotiations, pro-war position.

But at the end of the day it will be public opinion that matters. A Washington Post poll in the last days before the agreement found 59-percent support for a negotiated settlement — with 70 percent of liberals, two-thirds of Democrats, and at least 60 percent of independents and self-described “moderates” all supporting a deal. Even Republicans — divided more or less evenly — are far more supportive than their party’s war-boostering representatives in Congress.

What’s required now is mobilizing that public support. That means strengthening the backbone of uncertain or wavering members of Congress, challenging extremist anti-diplomacy positions in the media, and most of all reminding everyone of the consequences of failure.

In Lausanne we saw a crucial victory of diplomacy over war. Now we’ve got to protect it.

Will Congress Be Duped Again on Offshore Taxes?

Cracked paved road

(Image: Shutterstock)

Like a savvy bargainer on a used car lot, big multinational corporations have mastered the art of feigning indifference and walking away.

What they walk away with is their profits, stockpiling them abroad where they legally remain untaxed until returned to the United States. Then these corporations threaten to keep the cash offshore permanently unless Uncle Sam gives them a deep discount on their tax rates.

It’s a timeworn, but effective trick. While the rest of us are stuck paying the sticker price, Congress is considering a special deluxe tax rate for these giant corporations.

Congress last fell for the old “walk away” in 2004. And the American people got burned.

That year, legislators gave 843 giant firms an 85-percent discount on offshore profits they “repatriated.” This reduced their long-term tax bills by nearly $100 billion.

Legislators opted for this one-off revenue bump in part because they believed, naively, that the companies would create U.S. jobs with the repatriated funds. They even called the tax break legislation the “American Job Creation Act.”

Like new owners of a bargain basement Beemer, though, the companies basically squealed their tires and sped away. Rather than hiring more workers, many simply used the money to boost shareholder dividends and executive pay.

Meanwhile, the profit-shifting revved up again, as firms maneuvered to create leverage for further discounts.

Big pharmaceutical companies, which are particularly good at tax-dodging tactics like registering their patents in tax haven countries, were some of the biggest abusers of the 2004 tax break.

Pfizer, for example, repatriated $40 billion to take advantage of the discount. Instead of boosting jobs, the drug company laid off more than 51,000 employees over the next six years.

Legislators appear to have learned little from the 2004 boondoggle. Pending bills in both the House and Senate would once again offer deeply discounted rates on offshore profits.

President Barack Obama has a slightly stronger proposal: All overseas stockpilers would pay a mandatory 14 percent rate on offshore profits they currently hold, and then 19 percent thereafter. But that’s still a huge reduction over the ordinary 35 percent corporate tax rate, giving companies a powerful incentive to continue to shift profits overseas.

A handful of corporate giants stand to reap the vast majority of benefits from this trick.

According to a new report I co-authored for the Institute for Policy Studies and the Center for Effective Government, just 26 companies account for more than half of the $2.1 trillion in untaxed profits U.S. corporations currently hold offshore. Since 2004, these 26 firms’ overseas stashes have grown more than five-fold.

Lawmakers claim that short-term revenue from a discount tax on offshore profits is needed to pay for urgent investments in public infrastructure. But if we’re serious about fixing our crumbling bridges, roads, and dams, we should start by fixing our broken corporate tax system.

The taxes Pfizer and six other drug companies currently owe on their offshore profits, for example, would be enough to fix the 1 out of every 9 U.S. bridges in disrepair. We need to insist that all U.S. businesses pay their fair share of infrastructure and other public services.

Otherwise, we’ll just be taken for a ride.

From Gold Country to the Golden Triangle

El Salvador rally in front of the World Bank in Washington, DCThree environmental and human rights heroes came to Washington from gold country in El Salvador this week to protest in front of the oversized World Bank headquarters, at the southern corner of what is known as the “Golden Triangle” in Washington, DC.  One hundred-plus people from a range of organizations from the AFL-CIO to Casa denounced a secret tribunal housed in the Bank that is getting ready to rule on a case that could determine the future of El Salvador’s water supply.

The International Centre for Settlement of Investment Disputes (ICSID), housed at the World Bank, is hearing the case, which was filed by a Canadian company, Pacific Rim. That company (which was recently purchased by Australian-based Oceana Gold) is suing El Salvador for hundreds of millions of dollars because the government has not granted the company a permit for a gold mining project. Because of concerns that cyanide-based gold mining could pollute the country’s major river system, the government has placed a de facto moratorium on all mining projects.

At a rally in front of the World Bank, Vidalina Morales, a member of the Salvadoran Roundtable against Metallic Mining, said “We are not willing to let the Salvadoran government pay one single dollar. It is the mining company who should pay El Salvador for the violation of environmental and human rights. These courts only defend the interests of large corporations, not the people of El Salvador. Imagine what you could do with that money in El Salvador for social programs to alleviate poverty.”

Elvis Zavala and Cristina Starr, two journalists with the independent radio station Radio Victoria, also attended the rally.  Zavala noted that he has received death threats for his reporting on the Pacific Rim dispute.

A diversity of faith, labor, and environmental leaders, as well as representatives of the Salvadoran community in the Washington region, joined the rally in solidarity with the people of El Salvador who are fighting the Pacific Rim case. They also used the opportunity to draw attention to the investment rules in trade agreements that allow private corporations to sue governments.

The Obama administration is trying to expand these corporate rights in new agreements with Asia (the Trans-Pacific Partnership) and Europe (the Transatlantic Trade and Investment Partnership), and is pushing to “Fast Track” these controversial deals through Congress. As Bill Waren, from Friends of the Earth US, said “this is a perfect example of what can happen when we prioritize free trade over the rights of people and the planet.”

Cathy Feingold, the AFL-CIO’s Director of International Affairs, said that U.S. workers stand in solidarity with the people of El Salvador and against free trade agreements that allow these abuses.

A climactic moment during the rally took place when the World Bank’s Civil Society Adviser came out to receive 174,000 signatures, collected from all over the world, urging Pacific Rim/Oceana Gold to drop the suit against El Salvador and asking the World Bank to examine whether ICSID and such “investor-state” cases are consistent with the Bank’s official mission of combating poverty.

On March 21, the three Salvadoran heroes received an award from the Washington Ethical Society, the Institute for Policy Studies and others, for their courage, commitment and service in bringing international attention to the issue of precious metal mining in developing countries worldwide.

Keeping Up With the Waltons

Dollar General storefront

(Photo: Judy Baxter / Flickr)

Walmart’s news-making decision to raise wages put pressure on other discount retailers to make similar announcements. Less than a week later, T.J. Maxx and Marshall’s discount chains announced they would do the same. Target is the latest retailer to say it will also match Walmart’s new wage of $9 an hour.

In the retail world, keeping up with the Walton’s is nothing new. For better or for worse, Walmart has long set standards in the industry that competitors emulate.

But one retailer’s announcement in the wake of Walmart’s decision was a bit unusual. Rather than raise workers’ wages, Dollar General announced it would increase hours and make schedules smoother.

Top executives at Dollar General acknowledged a tightening labor market and the need to stay competitive when it comes to attracting and retaining employees.

So why did they stop short of raising their own workers’ wages?

As Fortune.com recently pointed out, dollar stores exploded during the Great Recession as more Americans suffered financially and depended on extreme bargains to buy anything, including food.

These stores (Dollar General, Dollar Tree, Family Dollar) are smaller-scale than Walmart but have more stores overall. Their business model is to focus on items that cost between $1 and $5. They only have a few employees per store, but they keep labor costs to a minimum to support their low prices.

They also target the lowest-income shoppers. Dollar General CEO Richard Dreiling explained to analysts on a recent conference call that his company was still doing well because his “core customers are still far from being out of the woods” despite other indicators that Americans are doing much better financially.

Did Dollar General’s CEO just admit that a core group of financially distressed Americans is built into the success of his company?

Um, yeah.

Maybe Dollar General decided not to raise wages because that would support a trend that is against the company’s self-interest?

Regardless, at least Dollar General is doing something about erratic schedules, which has been elevated in recent campaigns as an issue that many workers care about deeply.

But it’s still odd that Dollar General, the giant of the extreme discount retailers, would refuse to raise wages while acknowledging the tightening labor market that Walmart’s decision helped exacerbate.

One thing is clear: discount retailers are finally feeling the pressure from workers’ demands. And as those demands become greater and greater, extreme discount retailers like Dollar General are going to get squeezed.

And that isn’t going to feel good. Just ask the middle class.

‘House of Cards’ Makes a Wonk’s Day

House of Cards Season 3

(Image: Netflix)

I’m embarrassed to admit I’m one of the few people in Washington who has never watched House of Cards. But this sorry state of affairs is soon about to change.

That’s because this hot Netflix show has just delivered me a pleasant surprise. A new episode uses figures from a report I co-authored last year on one of the wonkiest of all issues: the tax deductibility of executive “performance pay.”

As explained in this Yahoo Finance article and video, Season 3, Episode 8 features a scene where — mild spoilers — a presidential candidate fires up a crowd by bashing Walmart over its low wages. The candidate then goes on to add: “Walmart’s top executives have reaped almost $300 million in tax-deductible performance pay over the last six years. That needs to stop!”

Huh? That was the reaction of Yahoo Finance reporter (and House of Cards fan) Aaron Task. He called me after his curiosity prompted him to trace that line to a report we co-published last year with Americans for Tax Fairness.

Indeed, my IPS colleagues and I have been going after this “performance pay” loophole for about 15 years now.

Here’s how the loophole works: A 1993 amendment to the tax code capped the total executive pay corporations can deduct off their taxes at no more than $1 million. But so-called “performance” pay is exempted. So corporations can simply declare stock-based rewards they lavish on executives “performance-based” and deduct them as a basic business expense.

The more corporations pay their CEO, the less they pay in taxes. And the rest of us get stuck making up the difference.

Several legislative efforts are now pending to fix this perverse incentive for overpaying executives. Rep. Chris Van Hollen (D-Md.) recently introduced the “CEO/Employee Pay Fairness Act,” a bill that would deny corporate tax deductions for any executive compensation over $1 million — unless the firm raises salaries for lower-level workers.

Rep. Barbara Lee (D-Calif.) has championed the Income Equity Act. This bill sets a deductibility cap of $500,000 or 25 times a company’s median worker compensation.

Are your eyes glazed over now? Well, that’s why we need popular media like House of Cards to make this issue sexy.

Or better yet, maybe one of our real-life 2016 presidential candidates would like to take this on? 


Privatizing Public Services

shutterstock_178332941 (1)The federal government alone, a new Congressional Budget Office report calculates, is now annually spending $500 billion — half a trillion dollars — to purchase goods and services from private companies. State and local governments spend many billions more.

We’re not talking trickle here. We’re talking cascade. Over recent years, our elected leaders have been rushing to privatize services that public employees previously provided.

This massive privatization — of everything from prisons to public education — hasn’t done much of anything to make the United States a better place to live. On the other hand, this privatization has paid off quite handsomely for America’s most affluent. They’re collecting ever more generous paychecks, courtesy of the tax dollars the rest of us are paying. 

In Washington, D.C., for instance, top officials of the private companies that run many of the city’s charter schools are taking in double, triple, and more what their counterparts in public schools take in. The CEO at one company that runs five of these charter schools, the Washington Post recently reported, pulled in $1.3 million in 2013, nearly five times the pay that went that year to the top public official responsible for the District of Columbia’s over 100 traditional public schools.

CEOs in America’s taxpayer-funded defense industry would, of course, consider D.C.’s lavish charter school executive paychecks no more than chump change. The CEO at Lockheed Martin, for one, personally pocketed over $25 million in 2013.

So how do you feel about all this? Do you like the idea of executives in power suits raking in multiple millions, all thanks to your tax dollars?

Rhode Island state senator William Conley certainly doesn’t. He and four of his colleagues have just introduced legislation in the Rhode Island Senate that would stop the stuffing of tax dollars into the pockets of wildly overpaid corporate executives.

Conley’s bill directs Rhode Island to start “giving preference in the awarding of state contracts” to business enterprises whose highest-paid execs receive no more than 25 times the pay of their median — most typical — workers.

Back in the middle of the 20th century, only a handful of top corporate executives ever made more than 25 times the pay of their most typical workers. Today, by contrast, only a handful of top execs make less than 100 times America’s median pay.

Last year the Rhode Island Senate passed a bill similar to Senator Conley’s new proposal, but that bill never made it to the Rhode Island House for a vote. If Conley’s 25-times bill should have better luck this year and become law, the ramifications could be huge.

That’s because we may soon know, for the first time ever, the exact ratio between CEO and median worker pay at every major American corporation that trades on Wall Street.

Five years ago, legislation that mandates this disclosure passed Congress and made it into law. Incredibly intense corporate lobbying has been stalling this new legislation’s enforcement, but the stall may soon end. The federal Securities and Exchange Commission finally appears about ready to issue the regulations needed to enforce full pay ratio disclosure.

CEO-worker pay comparisons for individual companies will likely start hitting the headlines the year after next. With these new stats, taxpayers will be able to see exactly which corporations feeding at the public trough are doing the most to make America more unequal.

With this information, average taxpayers could then do a great deal. They could, for starters, follow Senator Conley’s lead in Rhode Island and urge their lawmakers to reward — with our tax dollars — only those corporations that pay their workers fairly. 

Taxing the Chesapeake Bay

Pollution and trash in a river

(Photo: Clean Bread and Cheese Creek / Flickr)

Growing up in Jarrettsville, I didn’t realize how lucky I was to live close to many wonderous parks, farms and other natural wonders. And I remember becoming a Brownie in the Girl Scouts by crossing the bridge at Friendship Park in Forest Hill. It symbolized growing up and moving onto the next level of life. We celebrated by camping and exploring the great outdoors.

I hope that as my son — now 2 years old — grows, he too will discover the Maryland forests and creeks that I roamed across as a child. Now settled in Catonsville, we frequently visit the beautiful Pataspco State Park. As his little feet get sturdier, he’ll go further along the park’s dirt paths. When he grabs a pile of leaves in his chubby hands, I don’t want to worry about whether they’re coated with toxic dust.

But our creeks, streams, rivers and Chesapeake Bay aren’t as pristine as they once were. After heavy rains, scientists warn that it’s not safe for us to swim or wade in these waterways due to stormwater pollution.

And that same stormwater flows off our driveways, parking lots and sidewalks straight into the drains that wind up in our local creeks and streams. That water eventually gets funneled into the Chesapeake Bay.

When I began my career as a community organizer with the Maryland League of Conservation Voters, my primary motivation was to preserve these great areas. In 2012, the environmental community made great progress by passing the Stormwater Management Program into law, mandating that the state’s most urban and developed areas levy and collect fees based upon systems designed by local governments. Through these pooled funds, local governments are beginning to clean up this pollution in their own communities.

Now, through a cynical ploy to brand this crucial policy tool as some kind of “rain tax,” Maryland’s Bay cleanup progress is jeopardized.

This approach has succeeded in other states, including some of the country’s most conservative bastions. In Texas, dedicated fees helped stop flooding and minimize water damages to homes and businesses. This money collected in Texas can cover the costs of retrofitting pavement into porous pavement to reduce runoff and creating rain gardens and rain barrels.

The fact is, we need to clean up our act by capturing water at its source and using it where it lands. We need to cherish our water and protect it for future generations of Marylanders.

This state must put money into protecting this precious resource, and programs that do this well reflect our best values. We need to get more serious about protecting the Chesapeake Bay. Paying small fees that give local governments the money they need to do their fair share is a step in the right direction.

One of Gov. Larry Hogan’s first actions was to introduce legislation to repeal the stormwater runoff program. Some counties are repealing the program entirely or significantly reducing the fee and others are standing behind this proven program to move us forward. I hope that after all the grandstanding and arguing, we can work together to get these programs right and get Maryland’s Bay cleanup efforts back on track.

Maryland is standing at the foot of a bridge to our future. We can stay here, looking at the “Keep Out” signs posted along the shores of our polluted waterways and wondering where we went wrong. Or we can cross it, securing a safe and clean place where our children can grow and explore our remarkable rivers, streams and the Chesapeake Bay.

Let’s cross the bridge.

We Owe You Nothing!


Inequality and student debt

(Photo: DonkeyHotey/Flickr)

The small group of debtors with loans from the now defunct for-profit Corinthian College — the “Corinthian 15” — have a simple message for the Department of Education: We owe you nothing.

The 15 students declared in late February that they won’t be paying back their student debt and, with that move, sparked a media frenzy as journalists, pundits, and policy makers rushed to make sense of this unprecedented act of defiance.

Organized by the Debt Collective, a volunteer-run offshoot of Occupy Wall Street, the Corinthian 15 opened their letter to the Department of Education calling themselves “the first generation made poor by the business of education.” 

Support for the strikers has so far come from a number of prominent activists, including Barbara Ehrenreich, Bill McKibben, Frances Fox Piven, and Sarita Gupta. The strikers have also received explicit support from Congresswoman Maxine Waters (D-Calif.), the ranking member of the powerful House Financial Services Committee. 

The potential for serious negative personal consequences makes the strikers’ defiance, as the Washington Post notes, particularly “startling.” Unlike other forms of debt, student debt is not discharged during bankruptcy. Loan servicers can garnish the strikers’ wages, tax refunds, and disability payments — and essentially destroy their credit.

Yet the strikers’ resolve remains strong in the face of these consequences. As striker Mallory Heiny, age 21, puts it: “The repercussions are intimidating, but without dissonance there will be no change.”

The driving idea behind the Corinthian 15 student protest — that students with debt from Corinthian College and similar schools like Everest College should have their debt forgiven — has become increasingly realistic.

A group of thirteen Senate Democrats led by Senator Elizabeth Warren has called on the Department of Education to forgive such loans, and the Consumer Financial Protection Bureau announced it would forgive $480 million in similar student loans in February.

The strike highlights perhaps the most egregious aspect of the country’s student debt problem: the recklessness of for-profit colleges that provide very low-quality education for high tuition. These colleges only exist because they can collect billions from federal student aid programs.

Overall, over 40 million Americans are now struggling to pay off an average of $27,000 in student debt. Over seven million have gone into default, a figure steadily rising.

In a move to address growing concerns about student debt, President Obama announced the creation of a Student Aid Bill of Rights during a speech at Georgia Tech Tuesday. The plan leverages the President’s executive authority to create a central online portal for student debt repayment and aims to help debtors better understand and pay their loans.

The President’s announcement comes in the wake of a recent announcement that the Department of Education will be cutting ties with five private loan servicers for misleading consumers.

But more comprehensive action on student debt will require congressional action, something hard to imagine in the short term. Most effective would be to simply make public universities tuition-free, a move that could cost a mere $15 billion more than what’s currently being spent on higher education.

President Obama’s new Student Aid Bill of Rights does rate as a welcome development and has received praise as a step in the right direction from the United States Student Association as well as the American Association of State Colleges and Universities. We need, as the Corinthian 15 make clear, many more steps — and more activism will certainly speed them.

Walmart Needs a Maximum Wage

WalmartWalmart’s recent decision to raise the pay of almost half its US employees should be lauded on many fronts. As my colleague Karen Dolan pointed out in her column this week, it’s important to acknowledge when corporations do something right—not just when they screw up.

In a letter to associates, CEO Doug McMillon announced that Walmart would increase starting wages to $9 an hour by April and to at least $10 an hour by early next year.

Other changes included the launching of new employee retention and promotion programs and providing more fixed schedules for some of its employees.

But the pay raise is the most immediate and sweeping of the changes.

After years of protests and strikes from Walmart employees, the company is responding with concrete improvements that should be applauded.

But there are also some serious limitations. McMillon’s announcement was embarrassingly tone deaf in relation to inequality. After saying that one of Walmart’s “highest priorities” will be “investing in our people this year,” McMillon says to his associates: “Let’s take care of one another.”

Is McMillon including himself in this communal portrait of Walmart? I sure hope not. As CEO of the company, McMillon’s compensation rose a whopping 168 percent to $25.6 million in 2014 alone.

Even with the recent raise for workers, Walmart still has the highest CEO-to-worker pay ratio (more than 1,000 to 1) among Fortune 500 companies, as Jobs with Justice recently pointed out.

And the Walton family—owners of Walmart—hold the same wealth as the bottom 42 percent of Americans combined.

In other words, Walmart raised wages so as not to be downright embarrassing for the mega-wealthy corporation, but it still outpaces the pack when it comes to inequality within their own company.

As other companies such as Costco have helped reveal, low wages are connected to excessive pay at the top. Bringing down the top is just as important—and just as necessary—as pulling up the bottom.

If Walmart is serious about creating a communal environment in which all employees care for one another, its next announcement ought to be a maximum wage for executives.

Until that day, Walmart hasn’t changed all that much: Always low prices. Occasionally a little bit higher wages. Always the highest inequality.

Teaching, Testing and ‘Filling the Pail’


Taking a scantron "bubble" test

(Photo: Shutterstock)

One of the “hard truths” described by FBI Director James Comey in his now viral Georgetown University speech about race had to do with the “disproportionate challenges faced by young men of color.” Recruiting and training police better to avoid racial bias or “mental shortcuts” that they adopt — often unintentionally — when policing minority neighborhoods won’t be enough, he said.

One problem is path dependency: “Those neighborhoods,” he pointed out, drawing upon federal data, “too often inherit a legacy of crime and prison.” The other is that “so many minority families and communities are struggling, so many boys and young men grow up in environments lacking role models, adequate education and decent employment.” This challenge is significantly harder than simply changing police attitudes because this hard truth means that we have to address the environment in which crime takes place.

Wouldn’t it be great if someone in the federal government made a clarion call like this about the environment in which public education takes place?

The problems are familiar and generally well-documented. According to the Council of Great City Schools, only 13 percent of African-American eighth-graders and 16 percent of Latino eighth-graders meet the minimum standards of proficiency on the reading portion of the National Assessment of Educational Progress, compared with 39 percent of their white eighth-grade peers.

Imagine a discussion about education in America that begins with the communities where these children come from, and considers the effects of such tests on students. Instead of targeting teachers for lagging student achievement and using data dumps from for-profit testing companies, we would connect and equip classrooms, homes and neighborhoods as inspired, integrated learning environments.

This would mean fully funding Head Start and early childhood development, and probably doing some big rethinking about the structure and goals of secondary education (I nominate Matthew Crawford, author of Shop Class as Soulcraft, for the commission). It would also mean replacing some standardized testing with tools and time for teachers to teach students with different needs, interests and skills.

“Yes, we need better schools,” writes Darlene Leiding in Winds of Change: Declaring War on Education, but “the achievement gap starts at birth.” High-stakes testing drives good teachers and principals away, it has led to huge cheating scandals (among teachers and administrators!) and ultimately “it holds people accountable for factors over which they have little or no control.”

The testing industry has responded with statistical algorithms that attempt to weight environmental factors, track student progress and then assess teachers based on anticipated, predicted progress. That’s a defensible statistical technique, and one that I’ve used to study corruption in the developing world, but it requires lots of data points. And this means more tests for your 6-year-old.

Summarizing some of the academic research on these “value added” measurement techniques in his new book, Fear and Learning in America, John Kuhn points out that they do not just assess teachers on how well they teach; they end up rewarding and punishing teachers based on whom they teach.

I have taught students at three different universities over the last decade, so the students I teach have already survived the SAT, the ACT and Common Core. I worry, though, not just about the achievement gap for those who do and do not make it into college, but also about a gap between students’ learning experience in secondary school and their college encounter.

While high schools keep piling on more tests, higher education is substituting practice for term papers, integrating Twitter into classrooms, and sending students abroad like never before to discover knowledge and become passionate about experiential learning; the number of U.S. students spending a summer or a semester overseas has tripled over the last two decades, according to the Institute for International Education.

Last semester, I asked Jeff Selingo, author of the bestselling College (Un)Bound: The Future of Higher Education and What It Means for Students, what happens to the student who arrives in college having come to equate learning with filling out bubbles on a test sheet, or who sees teachers as bland authority figures?

William Butler Yeats was on my mind, since he said, “Education is not the filling of a pail, but the lighting of a fire.” Unfortunately, Selingo said, it’s going to be up to us college professors to fix the gap between testing in high school and learning in college, and he’s probably right. We are going to have to show students how to enjoy learning again, and to associate knowledge with passion.

The popular image of the school reform movement was a broom, a metaphor for cleaning up schools systems. I worry, though, that it is looking more and more like a pail. So when we set out to fix the achievement gap, let’s also try to address any emerging gaps between testing and learning.

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