The Buckeye Institute’s president speaks at U.S. Supreme Court on Friedrichs case

Robert Alt, president of The Buckeye Institute, speaking about the Friedrichs case on the steps of U.S. Supreme Court.

Robert Alt, president and chief executive officer of The Buckeye, spoke on the U.S. Supreme Court steps today following oral arguments in Friedrichs v. California Teachers Association, a case that could end the practice of forcing non-union members to pay fees to public sector unions.

Alt said: “Today’s case is about securing the First Amendment rights for all public employees. It is about not being forced to pay for political speech with which you disagree. And, make no mistake, collective bargaining speech for public sector unions is political speech.”

“For example, in Ohio, the unions negotiated to decide layoff decisions by a coin flip, instead of merit, which is of course blatantly unfair to good teachers and to their students.”

A decision is expected in June.

Alt wrote an amicus brief in September for The Buckeye Institute in support of Rebecca Friedrichs and nine other California teachers who want to stop paying fees to have the union bargain for them.

Alt also published six articles on the Friedrichs caseover the last week on National Review‘s Bench Memos blog.  

Professor Epstein to SCOTUS: Set the Workers Free

A Response to Justice Kagan: Ending Agency Fees Won’t End Unions (Part 1)

A Response to Justice Kagan: Ending Agency Fees Won’t End Unions (Part 2)

Not Inexorable: Why Stare Decisis Doesn’t Require Adherence to Abood

The Money Behind the Friedrichs Case

Why Friedrichs Matters

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The Buckeye Institute’s CEO Robert Alt: Worker freedom not death knell for public sector unions

Should government workers be forced to pay fees to a union they didn’t join to subsidize policies with which they disagree? On Monday, the U.S. Supreme Court will hear oral arguments in a potentially landmark First Amendment case: Friedrichs v. California Teachers Association. The Court’s decision could reshape public-sector labor law and extend freedom to 318,000 public employees in Ohio and millions more around the country.

Robert Alt, president of The Buckeye Institute and a well-regarded constitutional lawyer, filed a friend-of-the-court brief with the Supreme Court in September supporting teacher Rebecca Friedrichs. Robert challenged the factual basis of a key union claim: that public-sector union membership will collapse if workers have the right to stop paying “agency fees” and not be represented.

Today, in a two-part article on National Review’s legal blog, Bench Memos, Robert explains that—contrary to what unions and even some conservatives might assume—worker choice isn’t a death knell for public-sector unions. Instead, when forced to compete for workers’ affection (and money!), unions become more responsive to the needs of their members.

As a lawyer, Robert prefers actual evidence to assumptions. Currently, each state decides whether its public employees—like school teachers and state troopers—must pay for union representation. (Ohio requires it.) Fifty flavors of labor law offers a lot of variety and provides a classic example of the “laboratory of democracy” in action.

Robert examines the data from Michigan, Indiana, Wisconsin, and Oklahoma that show what really happens to unions when government employees have the freedom to withdraw from union representation. These four states have recently changed their labor laws from forced representation to worker choice—and all four of them have demonstrated that, for good or ill, public-sector unions don’t go into a death-spiral when government employees are no longer forced to pay agency fees. The doom-and-gloom prophecies for public-sector unions are an unfounded myth, Robert concludes.

Teacher Rebecca Friedrichs

What, then, is the purpose of the lawsuit? Robert notes that a ruling in favor of Rebecca Friedrichs would provide relief for the minority of workers who disagree with their unions but are forced to pay the union or be fired. “For these employees, admittedly a minority, [a win for Friedrichs] would not put an end to their unions, but it would put an end to the violation of their First Amendment rights.”

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Just in Time for Christmas Buckeye Gives President Obama a Lump of Coal

On Tuesday morning, The Buckeye Institute announced that it is suing the Obama Administration over the Clean Power Plan (CPP), which is an illegal rule to regulate carbon dioxide emissions from power plants.  As Ohio’s leading voice for free-market public policy solutions, Buckeye is joining the Competitive Enterprise Institute (CEI) in asking the Court to review the CPP rule.

The Buckeye Institute’s President and CEO Robert Alt said, “As someone who boasts that he taught constitutional law, President Obama ought to know better than to engage in yet another unlawful Washington power grab. The Buckeye Institute believes the appropriate Christmas gift for this action is a lawsuit to stand up for the millions of Ohioans who would pay the price for this ill-conceived and illegal regulation.”

Buckeye’s William and Helen Diehl Energy and Transparency Fellow Joe Nichols added, “This regulation would fulfill President Obama’s promise to make electricity prices ‘necessarily skyrocket’ and would cost thousands of Ohioans their jobs.  The Buckeye Institute is taking appropriate legal action to stop these disastrous effects from happening.”

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New Analysis: Ohio job growth in November

By Rea S. Hederman Jr. and Joe Nichols

Ohio’s jobs report was generally favorable in November. Total employment increased by 9,900 during the month. Private businesses added 7,000 jobs, and governments added another 2,900.

High oil and gas production in Ohio and other states has driven gasoline prices to six-year lows, giving consumers extra spending money in time for the all-important fourth quarter and Christmas season. This has helped the leisure and hospitality industry to prosper, leading to an additional 6,000 workers in November.

The biggest jobs’ loss came in the retail trade, which cut 3,900 employees. The shift to buying consumer goods online is good for delivery service employees but not for retail clerks.

Ohio’s unemployment rate in November was 4.5%, down 0.7% from a year ago. The rate rose slightly from last month but was too small to be considered more than statistical noise. The labor force participation rate—the number of Ohioans either working or looking for a job—has dropped one half-percentage point since last November, continuing a long-term and worrisome trend.

The unemployment rate has declined over the last year, to a large extent, because fewer working-age adults are trying to find jobs. Ohioans who stop looking for work are no longer counted as unemployed. Baby boomers edging closer to retirement age is one reason for the decline, but it is troubling that the participation rate has not increased significantly as the economy strengthens.

Bureau of Labor Statistics data shows that the Cleveland-Elyria metropolitan statistical area has suffered far worse than the rest of Ohio. This area of two million people lost 700 jobs in November while the rest of the state gained 4,200.

Even more startling was a sharp decline in the area’s labor force participation rate. Cleveland-Elyria accounted for three-fourths of the state’s labor force decline. The flood of people leaving the workforce created deceptively good news: the Cleveland-Elyria unemployment fell below the state average. But the cause of the decline—people stopping employment efforts altogether—is not good news at all and signals a struggling economy in northern Ohio.

Next year, policy makers need to focus less on the unemployment rate and more on bringing people back into the labor market.

Low gas prices are boosting consumer spending, which is boosting hiring in some Ohio businesses.

Rea S. Hederman, Jr., is executive vice president of The Buckeye Institute and director of its Economic Research Center. Joe Nichols is the William & Helen Diehl Energy and Transparency Fellow at The Buckeye Institute.

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New report: Ohio scores poorly on economic freedom


Rea Hederman, director of The Buckeye Institute’s Economic Research Center

Ohio ranks 40th among the 50 states in economic freedom, held back by high government spending on public employee pensions, workers’ compensation and social programs, according to a new report released today by The Buckeye Institute and the Fraser Institute of Canada.

Economic Freedom of North America 2015 ranks jurisdictions based on their levels of economic freedom (measured by government spending, taxation and labor market restrictions) using data from 2013, the most recent year of available data.

“Despite recent tax reforms, Ohio’s economy remains shackled to the policies of the past, hurting economic prosperity and freedom,” says Rea Hederman, executive vice president of The Buckeye Institute and director of its Economic Research Center.  “It’s not a coincidence that neighboring states that have become more free are enjoying more economic growth than Ohio in recent years.”

The Fraser Institute has measured economic freedom in every state and province in the United States, Canada and Mexico for eleven years, creating a comprehensive assessment of trends in economic freedom. The Buckeye Institute and its Economic Research Center are co-publishing the prestigious report for the first time and adding in-depth analysis of Ohio’s economy.

The Buckeye Institute’s “Ohio Economic Freedom Fact Sheet,” included in the report, summarizes where Ohio ranks in various economic freedom policies known to increase prosperity. The state’s low overall ranking reinforces the need for reform found in a recent Tax Foundation study, 2015 State Business Tax Climate Index, which placed Ohio at 42nd among the 50 states in tax policies that encourage business growth.

“There is good news in the report,” Hederman says. “Ohio’s tax reforms of the last several years have reduced rates, saved money for families and contributed to more economic prosperity. But when you rank 40th and 42nd in two important reports, there’s clearly more to do.”

The Fraser Institute and The Buckeye Institute are independent think tanks that research and advocate free market economic policies. The Buckeye Institute’s Economic Research Center specializes in data analysis of state-level economic policies.

Posted in Economy, Government, Pensions | 1 Comment

The Hair Salon ‘Manager’s License’ hurts taxpayers and cosmetologists

Finance Guy

Luke Hanks, president of Salon Schools Group, testifies before the Ohio Senate Government Oversight and Reform Committee, in favor of the hair salon manager's license.

Luke Hanks, president of Salon Schools Group, asked Ohio legislators this week to preserve the state’s ridiculous hair salon “manager’s license” requiring 300 hours of training — a requirement from which his schools profit.

Something Hanks didn’t tell legislators: 66 percent of students at his Canal Winchester cosmetology school aren’t repaying the federal student loans taken out to help pay his school’s staggering $19,400 tuition. In other words, nearly two-thirds of students haven’t repaid a single dollar of the money borrowed from the federal government to attend the for-profit Ohio State School of Cosmetology in Canal Winchester, reports ProPublica, a nonprofit investigative journalism organization.

Ohio requires way too much training — 1,500 hours — to become a licensed cosmetologist. Our vocational schools do the job as well, if not better, in 1,125 hours for high school students, and at a fraction of the cost.

The hair salon “manager’s license” isn’t about public safety or cosmetology competence. It’s a way to add 300 hours of training so private cosmetology schools hit the financially magical number of 1,800 “clock hours” — the exact number needed to squeeze every last penny from federal student aid programs.

These 300 hours generate an extra $1,925 in federal money per student. One hour less would leave money on the table; one hour more wouldn’t harvest additional cash.

Ohio’s career technical schools rarely teach this useless license. Instead, our tech teachers properly tell students to get some real-world salon experience and take the manager’s test for $50 when they’re ready.

Of students taking the manager’s license test, 97 percent were sold training by for-profit cosmetology schools. “Manager’s license” training generates more than $5 million a year for private schools.

The state’s role as a student sales funnel to private cosmetology schools in the business of harvesting federal student aid is an unseemly use of state licensing power.

The average Ohio cosmetologist makes $12.16 an hour, reports the Bureau of Labor Statistics. Ninety-five percent are women. Many are single moms.

Stripped to its essence, the story is simple: The state is encouraging young, low-income, working women to pay tithes to wealthy salon school owners. The state-issued license returns to hair stylists what was unfairly taken from them — the right to get a promotion and a $3-an-hour raise, based on merit, at a hair salon.

Is it really surprising that a mother earning $12 an hour can’t repay $10,000 in cosmetology school loans? To ask the better question: What can be done to help Ohioans work and succeed in this creative occupation?

The legislature needs to end the manager’s license immediately and reduce the hours of training required to become a licensed cosmetologist to 1,125 hours — the same as for high school kids in our career technical schools. New York requires just 1,000 hours, cutting the cost of obtaining a cosmetology license in half and causing no decline in safety or quality.

At a certain point, cosmetologists benefit most from experience in the real world, not school. Let Great Clips and other salons train their own workers.

Let salon owners promote based on merit. If salons need better managers, let them pay more.

As for Luke Hanks, one might think a “manager’s license” would be necessary to run his cosmetology schools. But one would be wrong, because he’s not even a licensed cosmetologist. As he says, he’s a “finance guy.”

On that much, we agree.

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The Buckeye Institute testifies on eliminating unnecessary salon “manager’s license.”

Greg Lawson testifies before the Ohio Senate in favor of eliminating the salon manager’s license.

“Ohio law requires a cosmetologist to have 10 times the training of EMTs. The case for licensing reform doesn’t get much clearer.”

Greg Lawson, statehouse liaison at The Buckeye Institute, gave that testimony today before the Ohio Senate’s Government Oversight and Reform Committee.

The legislature is considering eliminating Ohio’s salon manager’s license as well as a requirement that hair salons have a specially licensed manager on the premises at all times.

Ohio is the only state with this burdensome requirement. Private cosmetology schools are fighting to preserve the license because it requires students to get 300 hours of extra training, beyond the 1,500 hours already required to become a licensed cosmetologist, if they want to manage a salon. Greg testified on a day when opponents of reform outnumbered those who supported it.

Why is licensing reform so important?

The Buckeye Institute’s recent report, Forbidden to Succeed: How Licensure Laws Hold Ohioans Back, detailed 31 low- to moderate-income occupations that should have licensing burdens reduced or eliminated altogether, to make it easier for Ohioans to work.

As Greg said to the Ohio Senate Government Oversight Committee:

“Onerous licensing burdens—essentially requiring workers to ask the government for a permission slip to earn a living—make Ohio less competitive, less prosperous, and less attractive to entrepreneurs and their employees.”

Click to read testimony

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