Term
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Definition
| Church and state mix when regulations conflict with religiously motivated practices, blurring the lines between individuals and firms. This is a contentious field of regulation |
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Term
| (C,S,&B: 11/2) the constitution |
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Definition
• First amendment says:
o Congress shall make no law respecting an establishment of religion (the establishment clause)
o Or prohibiting the free exercise thereof (the free exercise clause)
o Both are open to interpretation |
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Term
| (C,S,&B: 11/2) three issues: Regulation of religious practices and business activities usually focuses on one or more of these: |
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Definition
o Traits vs. conduct
o Corporate personhood
o Implied consent |
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Term
| (C,S,&B: 11/2) trait versus conduct |
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Definition
• Is it legal to discriminate on the basis of conduct rather than a trait?
o Refusing to hire LGBT job candidates (trait?)
o Refusing to cater a same-sex wedding (conduct?)
• Are these regulated the same? Should they be? |
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Term
| (C,S,&B: 11/2) corporate personhood |
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Definition
• To what extent are businesses granted the same rights as individuals
• For instance:
o Freedom of speech? Freedom of religion? Freedom of association?
• Does the size of the business matter? Why/why not? How is this measured? |
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Term
| (C,S,&B: 11/2) implied consent |
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Definition
• To what extent do you accept an organization’s beliefs by choosing to interact with them, and hence lose your ability to claim discrimination?
• A lot of organizations are not strictly regulated because it is implied by your participation that you consent to what the group does/believes/says
• Does this apply to employee/employer? Customer/business? |
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Term
| (C,S,&B: 11/2) Religious Freedom Restoration Act (RFRA) |
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Definition
• Few specific laws on church/business
• Summary:
o “Government shall not substantially burden a person’s exercise of religion even if the burden results from a rule of general applicability.”
• But the government CAN burden exercise of religion if it convinces a judge/court:
o The law in question serves a compelling state interest
o The law in question is the least restrictive way to achieve interest
o MUST demonstrate both
• Partially struck down in 2003; does not apply to state/local actions
• Many states then passed their own versions of RFRA; created dual regulation
• Federal component reaffirmed
• Congress passed RFRA in response to Supreme Court decision in Employment Division vs. Smith (1990)
• The case:
o Two native American men fired from drug counseling jobs and denied unemployment by Oregon after consuming peyote, which is used in native American religious ceremonies
o SC sided with Oregon, said it is legal to prohibit use of drugs for religious purposes as long as the law applies to everyone (and this one did) |
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Term
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Definition
• Partially struck down in 2003; does not apply to state/local actions
• Many states then passed their own versions of RFRA; created dual regulation
• Federal component reaffirmed
• Congress passed RFRA in response to Supreme Court decision in Employment Division vs. Smith (1990)
• The case:
o Two native American men fired from drug counseling jobs and denied unemployment by Oregon after consuming peyote, which is used in native American religious ceremonies
o SC sided with Oregon, said it is legal to prohibit use of drugs for religious purposes as long as the law applies to everyone (and this one did) |
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Term
(C,S,&B: 11/2) QUICK CASE study: Hobby Lobby et al the Contraception Mandate
the mandate |
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Definition
The Mandate:
• Forms with 50+ employees, you must provide insurance that covers sterilization services and FDA-approved contraceptives (with no copays)
• Non-profit, religious employers that exist to inculcate their beliefs are exempt
• Religious ________ are not exempt
o Schools and universities
o Hospitals
o Publishers
o Nursing homes
o Charities
• Firms owned by individuals opposed to contraception also not exempt |
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Term
(C,S,&B: 11/2) QUICK CASE study: Hobby Lobby et al the Contraception Mandate
the conflict |
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Definition
• The sticking point: forms of contraception that are viewed as abortofacients
o Instead of preventing contraception, these act end a pregnancy (destroy embryos or force a miscarriage)
• 4 of 16 FDA-approved methods in this category
o These 4 prompted 50+ lawsuits in 2012
o HHS said employers could shift the cost to insurance companies
o But, ore sticking points:
• Employers then had to pay higher premium
• Some employers are self-insured |
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Term
(C,S,&B: 11/2) QUICK CASE study: Hobby Lobby et al the Contraception Mandate
Supreme Court here we come |
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Definition
• Sebilius vs. Hobby Lobby Stores, Inc.
• Owned by a Baptist family; 28,000 employees; not open on Sundays; opposes abortofacients
• Justice Department argued firm isn’t religious and could:
o Comply with law and cover abortofacients
o Close
o Remain open, cancel insurance, and pay penalties
o Remain open, don’t cover abortofacients and pay penalties ($1.3 million per day)
• Oral arguments heard in 2014
• Question over RFRA and whether not it applied to this mandate |
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Term
(C,S,&B: 11/2) QUICK CASE study: Hobby Lobby et al the Contraception Mandate
Supreme court here we come (for mandate) |
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Definition
• For mandate:
o Opponents offer no limiting principle (if contraception does not have to be covered by employer’s insurance, then what else? Vaccines? Cancer treatment?)
o Firm owners can voice opposition but should still pay
o Hobby Lobby isn’t a religious institution in the first place
o Religious freedoms don’t extent to for-profit entities (or any institution) |
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Term
(C,S,&B: 11/2) QUICK CASE study: Hobby Lobby et al the Contraception Mandate
Supreme court here we come (against mandate) |
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Definition
• Against mandate:
o It results in a Hobson’s Choice; firm owners can either violate their beliefs, pay a fine, or close down (this is a “substantial burden”)
o Employees are not forced to work for Hobby Lobby
o Obama Administration granted dozens of waivers to the mandate, so it must not be “compelling state interest” (waivers cover 80 million people)
o Employees can still access contraception |
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Term
(C,S,&B: 11/2) QUICK CASE study: Hobby Lobby et al the Contraception Mandate
the decision |
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Definition
• Split 5-4 in favor of Hobby Lobby
• “Closely tied” FOR PROFIT firms do not have to comply with contraception mandate if they have religious objections
• Defining, “closely held…”
o IRS: >50% of firms is owned by <5 individuals |
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Term
| (reg. vices 11/4) core idea |
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Definition
| • The government has a long and inconsistent history of regulating the vices. Externalities, paternalism, and morality shape laws in this area |
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Term
| (reg. vices 11/4) context |
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Definition
• What is vice?
o A habit or practice viewed as immoral or evil
• What makes them immoral/evil?
o Latin root vitium means defect, fault, of flaw; reflect personal weakness; may have negative externalities
• Include alcohol(ism), gambling, drugs, prostitution |
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Term
| (reg. vices 11/4) context (what is vice?) |
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Definition
| A habit or practice viewed as immoral or evil |
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Term
| (reg. vices 11/4) context (what makes them evil?) |
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Definition
| Latin root vitium means defect, fault, of flaw; reflect |
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Term
| (reg. vices 11/4) context (includes?) |
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Definition
| alcohol(ism), gambling, drugs, prostitution |
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Term
| (reg. vices 11/4) alcohol (history) |
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Definition
• 18th amendment: Ban on the sale, production, and importation of alcohol from 1920-1933
• Substance vs. practice
o Belief: alcohol wasn’t inherently bad, but excess consumption was bad
o Linked with poverty, laziness, crime, violence, and the lower class
• Woman’s Christian Temperance Union formed in 1873; lobbied for prohibition to as a solution to domestic abuse
o Women said that the men would abuse them under the influence and this tears up the family and government should do something about it
• A few states pursued prohibition on their own (dry states)
• Other activists lobbied for prohibition and monitored saloons (e.g., Carrie Nation)
o Nation would take the axe where the alcohol was and would axe them down because this was either illegal or that it was not wanted.
• Women’s suffrage helped build support for 18th amendment; public opinion in favor
• Ratified and takes effect in 1920
• The “Prohibition Era” begins
• During prohibition:
o Many people still drank; they stockpiled it in advance
• This can lead to price increases
o Illegal smuggling explodes (“rum running”) from Canada and Mexico
o Major increases in urban crime
o Tens of millions in revenue for organized crime (mafias)
• Federal enforcement was poor
• Public opinion shifted quickly
• 18th amendment repealed: 1933 (21st amendment)
• 21st amendment sent regulation of alcohol back to state/local governments
• Three areas:
o Distribution
o Retail
o Drinking age |
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Term
| (reg. vices 11/4) alcohol (during prohibition) |
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Definition
o Many people still drank; they stockpiled it in advance
• This can lead to price increases
o Illegal smuggling explodes (“rum running”) from Canada and Mexico
o Major increases in urban crime
o Tens of millions in revenue for organized crime (mafias) |
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Term
| (reg. vices 11/4) alcohol (three areas; 21st amendment) |
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Definition
o Distribution
o Retail
o Drinking age |
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Term
| (reg. vices 11/4) alcohol: distribution |
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Definition
• Many states created a “three layer” distribution system for alcohol
o Production: breweries, distilleries, wineries
o Retail: liquor stores; bars; restaurants; grocery stores
o And in between…a middleman (two kinds…)
• Middleman #1: the state government itself, which controls the distribution of alcohol (either entirely or partially)
• These are liquor control states
• Middleman #2: Beer Distributors
• In these states, most alcohol cant be bought directly from the producer
• Distributors (and state agencies) increase the cost of alcohol to consumers
• Why not allow direct sale?
• Many of these laws were passed immediately after Prohibition ended
• Dry activities worried about “tied houses”
o A producer-owned bar/pub/etc. that would “lure” people in with free food just to get them to buy alcohol
• Giving them salty foods to get them to buy alcohol
• This is why we need a middle man
• Activists worried that tying food to alcohol would cause drunkenness on the job
• “There’s no such thing as a free lunch”
• Fighting the three layer system (unsuccessfully?)
o Craft Breweries
o Costco
o Walmart
• These people wanted to lower the cost for their customers and wanted to eliminate the middleman |
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Term
| (reg. vices 11/4) alcohol: distribution: states "three layer" alcohol distribution system |
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Definition
• Many states created a “three layer” distribution system for alcohol
o Production: breweries, distilleries, wineries
o Retail: liquor stores; bars; restaurants; grocery stores
o And in between…a middleman (two kinds…) |
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Term
| (reg. vices 11/4) alcohol: distribution: middleman #1 |
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Definition
• Middleman #1: the state government itself, which controls the distribution of alcohol (either entirely or partially)
• These are liquor control states |
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Term
| (reg. vices 11/4) alcohol: distribution: middleman #2 |
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Definition
• Middleman #2: Beer Distributors
• In these states, most alcohol cant be bought directly from the producer
• Distributors (and state agencies) increase the cost of alcohol to consumers |
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Term
| (reg. vices 11/4) alcohol: distribution: why not direct sale? |
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Definition
• Many of these laws were passed immediately after Prohibition ended
• Dry activities worried about “tied houses”
o A producer-owned bar/pub/etc. that would “lure” people in with free food just to get them to buy alcohol
• Giving them salty foods to get them to buy alcohol
• This is why we need a middle man |
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Term
| (reg. vices 11/4) alcohol: distribution:tying food to alc |
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Definition
• Activists worried that tying food to alcohol would cause drunkenness on the job
• “There’s no such thing as a free lunch” |
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Term
| (reg. vices 11/4) alcohol: retail |
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Definition
• Many states also have blue laws, or Sunday laws, that govern the sale/consumption of alcohol
• Examples:
o Arkansas: no alcohol purchases allowed on Sunday
o Michigan: one from 2-7 am Monday-Saturday or before 12pm Sundays |
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Term
| (reg. vices 11/4) alcohol: age |
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Definition
• Minimum Legal Drinking Age (MLDA) set by states following repeal of prohibition
• Initially: most states set MLDA = 21
• 1970s: many changed their MLDA = 18
• Why?
o Match with voting age
o Allow servicemembers right to drink
• Those that go to the army
• With no national standard, Congress passed National Minimum Drinking Age Act (1984)
o States with age <21 would lose 10% of federal highway funding
• Most bumped MLDA back to 21, but…
• Lots of exceptions |
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Term
| (reg. vices 11/4) alcohol: wrap up |
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Definition
• Why does so much regulation of alcohol endure over 80 years following the end of prohibition?
• My thoughts:
o Policy momentum and vestigial regulations
• The longer the law is in the books the more they know about it the more they accept it
o Special interest advocacy (MADD, etc.) with no counter-mobilization
• Mothers Against Drunk Driving
o Alcohol still causes health and other problems
o Paternalism |
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Term
| (reg. vices 11/4) gambling (overview) |
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Definition
• Federal Wire Act (1961) banned interstate betting via wired communication
o Devices include: phones
• Bradley Act (1992) banned most sports betting
• Internet Gambling Enforcement Act (2006) made it illegal to participate in gambling activities via the Internet that are otherwise illegal
o Fantasy sports, state lotteries are exempt
• These are governed by native American organizations
• What about online poker?
o Mixed legal history; mostly a state-by-state issue
• If you are playing online poker and there is money at stake the legality is through the state government
o Can get entangled with federal banking laws
• Government took some online gambling sites, and they were charged with bank fraud, not for gambling
• Main legal/regulatory question:
o Is game a game of chance? (More regulation)
o Or is it a game of skill? (Less regulation)
• What about fantasy sports?
• Lawsuit galore:
o Redskins WR Pierre Garcon has filed a lawsuit against FanDuel for using his image without permission
o Class action suit in Ohio says its gambling and should be regulated by the state
o Class action in New York claims negligence- FanDuel and DraftKings did not tell customers that employees were also participating
• Outcomes to be determined
• In FD/DK favor: all customers agree to arbitrate their disputes; waive right to sue
• Against FD/DK: states and federal government starting to investigate
• Is it a game of skill…or chance?
o That should not be regulated… or should it be regulated |
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Term
| (reg. vices 11/4) gambling: Laws |
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Definition
• Federal Wire Act (1961) banned interstate betting via wired communication
o Devices include: phones
• Bradley Act (1992) banned most sports betting
• Internet Gambling Enforcement Act (2006) made it illegal to participate in gambling activities via the Internet that are otherwise illegal
o Fantasy sports, state lotteries are exempt
• These are governed by native American organizations |
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Term
| (reg. vices 11/4) gambling: What about online poker? |
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Definition
o Mixed legal history; mostly a state-by-state issue
• If you are playing online poker and there is money at stake the legality is through the state government
o Can get entangled with federal banking laws
• Government took some online gambling sites, and they were charged with bank fraud, not for gambling
• Main legal/regulatory question:
o Is game a game of chance? (More regulation)
o Or is it a game of skill? (Less regulation) |
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Term
| (reg. vices 11/4) gambling: main legal/ reg. question: |
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Definition
o Is game a game of chance? (More regulation)
o Or is it a game of skill? (Less regulation) |
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Term
| (reg. vices 11/4) gambling: what about fantasy sports? |
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Definition
• Lawsuit galore:
o Redskins WR Pierre Garcon has filed a lawsuit against FanDuel for using his image without permission
o Class action suit in Ohio says its gambling and should be regulated by the state
o Class action in New York claims negligence- FanDuel and DraftKings did not tell customers that employees were also participating
• Outcomes to be determined
• In FD/DK favor: all customers agree to arbitrate their disputes; waive right to sue
• Against FD/DK: states and federal government starting to investigate
• Is it a game of skill…or chance?
o That should not be regulated… or should it be regulated |
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Term
| (reg. vices 11/4): outcomes to be determined (FD/ DK) |
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Definition
• In FD/DK favor: all customers agree to arbitrate their disputes; waive right to sue
• Against FD/DK: states and federal government starting to investigate
• Is it a game of skill…or chance?
o That should not be regulated… or should it be regulated |
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Term
| (reg. vices 11/4) alcohol: 18th to 21st amendments |
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Definition
• 18th amendment: Ban on the sale, production, and importation of alcohol from 1920-1933
• 18th amendment repealed: 1933 (21st amendment)
• 21st amendment sent regulation of alcohol back to state/local governments
• Three areas:
o Distribution
o Retail
o Drinking age |
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Term
| (reg. vices 11/4) fighting 3 layer system? |
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Definition
(unsuccessfully?)
o Craft Breweries
o Costco
o Walmart
• These people wanted to lower the cost for their customers and wanted to eliminate the middleman |
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Term
| (reg. vices pt2: 11/9) Marijuana (two facts) |
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Definition
o Growth, possession, and distribution of weed are each federal crimes
o Still a $30+ billion market |
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Term
| (reg. vices pt2: 11/9) Marijuana: Policy Climate |
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Definition
• 23 states have decriminalized for medical purposes; first was CA in 1996
• 4 states have decriminalized for recreational purposes; also tax and regulate
• Public opinion growing favorable |
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Term
| (reg. vices pt2: 11/9) Marijuana: Brief History |
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Definition
• 1860: NY allows pharmacies to sell weed if labeled “POISON” in red letters
• 1880: CA legislature tries to ban weed; fails
• 1920: several states pass weed bans |
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Term
| (reg. vices pt2: 11/9) Marijuana: today (overview) |
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Definition
• 1970: Controlled Substances Act classifies weed as a Schedule I Substance
o High likelihood of abuse
o No accepted use in medical treatment
o Unsafe under medical supervision
• Others: LSD, heroin, E, Quaaludes, peyote (!)
• Regulatory conflict: weed “activity” is the only activity with dual status
o Dual status: it is illegal at one level of government but is legal in another
o Completely prohibited under federal law
o Degrees of legalization under states laws
• Supreme Court has said:
• Should be federally-regulated (Supremacy clause)
• Growing weed at home impacts the interstate weed market and is interstate commerce
• Federal government cannot force states to enforce federal regulations
• But federal enforcement is poor/inconsistent and almost always relies on local police
• A recent history of federal directives on weed
o 2009: DOJ memo hints Obama Administration will be “hands off” on enforcing federal weed ban
o 2010: DOJ threatens to sue CA if the state legalizes
o 2011: DOJ says it will enforce federal ban
o 2013: DOJ says state/local enforcement is best way to regulate weed |
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Term
| (reg. vices pt2: 11/9) Marijuana: today (1970) |
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Definition
Controlled Substances Act classifies weed as a Schedule I Substance
o High likelihood of abuse
o No accepted use in medical treatment
o Unsafe under medical supervision |
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Term
| (reg. vices pt2: 11/9) Marijuana: today (Regulatory conflict) |
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Definition
weed “activity” is the only activity with dual status
o Dual status: it is illegal at one level of government but is legal in another
o Completely prohibited under federal law
o Degrees of legalization under states laws |
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Term
| (reg. vices pt2: 11/9) Marijuana: today (supreme court has said?) |
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Definition
• Should be federally-regulated (Supremacy clause)
• Growing weed at home impacts the interstate weed market and is interstate commerce
• Federal government cannot force states to enforce federal regulations |
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Term
| (reg. vices pt2: 11/9) Marijuana: a recent history of fed. directives on weed |
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Definition
o 2009: DOJ memo hints Obama Administration will be “hands off” on enforcing federal weed ban
o 2010: DOJ threatens to sue CA if the state legalizes
o 2011: DOJ says it will enforce federal ban
o 2013: DOJ says state/local enforcement is best way to regulate weed |
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Term
| (reg. vices pt2: 11/9) Marijuana: Industry (lack of banking services) |
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Definition
• Weed producers/retail often cannot find banking services
o Federal governments regulate banks heavily, and where they come from. If you bring in large amounts they ask where did you get this from
o Banks wont open accounts (fear of money laundering)
o This pushes industry toward a cash-only model, which is thus harder to regulate |
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Term
| (reg. vices pt2: 11/9) Marijuana: Industry (limited tax deductions) |
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Definition
• Federal law limits weed producers/retailers from using most tax deductions
o Can’t deduct overhead, labor costs
o The only thing you can deduct is the cost of what you are selling
o Some Colorado dispensaries have federal tax rates >50% |
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Term
| (reg. vices pt2: 11/9) Marijuana: Industry (overview) |
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Definition
• Often underground because of uncertainty over jurisdiction and criminal punishments
• Weed producers/retail often cannot find banking services
o Federal governments regulate banks heavily, and where they come from. If you bring in large amounts they ask where did you get this from
o Banks wont open accounts (fear of money laundering)
o This pushes industry toward a cash-only model, which is thus harder to regulate
• Federal law limits weed producers/retailers from using most tax deductions
o Can’t deduct overhead, labor costs
o The only thing you can deduct is the cost of what you are selling
o Some Colorado dispensaries have federal tax rates >50% |
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Term
| (reg. vices pt2: 11/9) Marijuana Frontier |
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Definition
• Marijuana Tourism: about 44% of Colorado marijuana sales are to non-Colorado residents who live nearby
• 2014: Nebraska and Oklahoma sue Colorado
o Allege Colorado-bought weed is increasing their law enforcement and court costs
o Allege CSA pre-empts Colorado voters
o Allege interstate commerce
o Asking for federal enforcement, not damages
• Other lawsuits against Colorado:
o Small businesses allege that allowing dispensaries to open lead to drops in their business (e.g., cancelled hotel reservations, cancelled commercial real estate deals) |
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Term
| (reg. vices pt2: 11/9) Marijuana Frontier (Co lawsuits) |
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Definition
• 2014: Nebraska and Oklahoma sue Colorado
o Allege Colorado-bought weed is increasing their law enforcement and court costs
o Allege CSA pre-empts Colorado voters
o Allege interstate commerce
o Asking for federal enforcement, not damages
• Other lawsuits against Colorado:
o Small businesses allege that allowing dispensaries to open lead to drops in their business (e.g., cancelled hotel reservations, cancelled commercial real estate deals) |
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Term
| (reg. vices pt2: 11/9) prostitution (overview) |
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Definition
• “The worlds oldest profession”
• Long history in the US- during Revolutionary War; 19th century brothels; Gold Rush towns
• Tended to correlate with alcohol and crime, especially in densely-populated areas
• Public against legalization
• Growth driven by technology:
o Invention of the telephone
o Birth control
o Internet
• Regulated by states; illegal in all but parts of Nevada
o Brothels in Nevada pay local taxes
• Federal government may intervene if activity is illegal AND involves interstate commerce
• Example: DHS shutdown of online escort service
o $2 million/year revenue
o Owners said it was an “ad listing” service; DHS disagreed
o Seized web domain; arrested CEO and 6 employees
• Trafficking Victims Protection Act (2000)
o Made human trafficking a federal crime
o Created a T-Visa for victims to stay in the US for up to 4 years in exchange for their help with prosecuting offenders (usually)
o Increased monitoring efforts
o No federal contracts with international companies that may engage/benefit from trafficking |
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Term
| (reg. vices pt2: 11/9) prostitution: growth driven by tech |
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Definition
o Invention of the telephone
o Birth control
o Internet |
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Term
| (reg. vices pt2: 11/9) prostitution: Ex (DHS shutdown of online escort service) |
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Definition
o $2 million/year revenue
o Owners said it was an “ad listing” service; DHS disagreed
o Seized web domain; arrested CEO and 6 employees |
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Term
| (reg. vices pt2: 11/9) prostitution (trafficking Victims Protection Act 2000) |
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Definition
o Made human trafficking a federal crime
o Created a T-Visa for victims to stay in the US for up to 4 years in exchange for their help with prosecuting offenders (usually)
o Increased monitoring efforts
o No federal contracts with international companies that may engage/benefit from trafficking |
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Term
| (axation: 11/11) core idea |
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Definition
• Governments use taxes to regulate behavior- nudging individuals and firms- and use revenue to fund government programs
o You raise taxes on cigarettes to nudge them from not using it
• In fiscal year 2015, federal corporate tax revenue was $344 billion or about 11% of all federal revenue |
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Term
| (taxation: 11/11) history |
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Definition
• Early federal taxes were on individuals
• In the late-19th century, some democrats complained firms weren’t paying their “fair share”
• First enacted in 1894 (2%); overturned in 1895
• Permanent since 1909
→ Why your business/entity pay a tax? Exam question |
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Term
| (taxation: 11/11) motivations/ "pros" |
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Definition
• Some thought it would prevent an individual income tax (or higher taxes in general)
• Yields revenue for government programs
• Desire to tax business owners
• Desire to regulate profits and redistribute wealth
• Makes corporate finances public |
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Term
| (taxation: 11/11) calculation |
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Definition
• Net taxable income is often used to determine tax liability; difference between
o Inputs: Sales + capital gains + other revenues
o Outputs: Labor + materials + equipment + depreciation + other costs
• Tax credits and other special arrangements may further reduce net taxable income
• An S-Corporation is a flow-through entity under federal law (does not pay federal income taxes). Income, losses, etc. are passed directly to owners and taxed at their rate. But they pay corporate taxes in CA.
• A C-Corporation is a traditional corporation that pays corporate taxes (both federal and state). |
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Term
| (taxation: 11/11) consequences of different tax rates in the U.S (three total) |
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Definition
• Consequence #1: Multi-national firms scour the world for favorable policy; create subsidiaries with no tax residence
• Consequence #2: Nations (and American states) compete against each other with lower taxes or higher subsidies
• Consequence #3: A rise in bipartisan debate over eliminating or reducing corporate taxes |
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Term
| (taxation: 11/11) Apple's corporate structure simplified |
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Definition
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Term
| (taxation: 11/11) other examples (of tax evasion?) |
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Definition
• Pfizer may merge with Allergan (Irish firm)
• One reason: execute a tax inversion
o Occurs when two firms HQ’ed in different nations merge keep the combined HQ in the lower tax nation
• Last year, Burger King merged with Tim Horton’s and kept their HQ in Canada (for lower taxes) |
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Term
| (taxation: 11/11) tax competition (overview) |
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Definition
• Governments seek to create competitive advantage through their tax codes
• Studies show that some firms do relocate to lower-tax jurisdictions (to other nations or states)
o Within the US, states compete with lower tax rates and higher tax credits/deductions
• Within the states, evidence suggests tax credits are ineffective at generating economic growth
o Competitive advantage is temporary
o Another state may create larger credit; firms can easily move
o Political conflicts from government picking “winners and losers”
o Many tax incentives favor hiring, not developing long-term industries
• They incentivize the wrong things |
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Term
| (taxation: 11/11) tax competition (Within the states, evidence suggests tax credits are ineffective at generating economic growth) |
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Definition
o Competitive advantage is temporary
o Another state may create larger credit; firms can easily move
o Political conflicts from government picking “winners and losers”
o Many tax incentives favor hiring, not developing long-term industries
• They incentivize the wrong things |
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Term
| (taxation: 11/11) tax competition: do firms relocate for lower tax purposes? |
|
Definition
• Studies show that some firms do relocate to lower-tax jurisdictions (to other nations or states)
o Within the US, states compete with lower tax rates and higher tax credits/deductions |
|
|
Term
| (taxation: 11/11) "cons" of corporate taxes |
|
Definition
• Corporations are legal entities and nothing more; their tax burden is passed to customers, shareholders, and employees
• Many firms are not paying the tax because the owner includes profits on his/her individual tax return (S-corporations)
• Taxes incentivize corporate lobbying
• Taxes mean wasted resources on tax avoidance
• There are too many loopholes, credits, deductions; efforts to fix these “holes” only create more problems |
|
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Term
| (taxation: 11/11) net taxable income (calculation) |
|
Definition
• Net taxable income is often used to determine tax liability; difference between
o Inputs: Sales + capital gains + other revenues
o Outputs: Labor + materials + equipment + depreciation + other costs
• Tax credits and other special arrangements may further reduce net taxable income |
|
|
Term
| (taxation: 11/11) flow through entity (calculation) |
|
Definition
• An S-Corporation is a flow-through entity under federal law (does not pay federal income taxes). Income, losses, etc. are passed directly to owners and taxed at their rate. But they pay corporate taxes in CA.
• A C-Corporation is a traditional corporation that pays corporate taxes (both federal and state). |
|
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Term
| (taxation: 11/11) main (top) branch of apple |
|
Definition
|
|
Term
| (taxation: 11/11) (three branches under Apple Inc) |
|
Definition
Apple Operations International
Apple Operations Europe
Apples Sales International |
|
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Term
| (taxation: 11/11) (Apple Operations International) |
|
Definition
Incorporated in 1980
Has no physical presence in Ireland
Has no employees
All meetings in CA
Assets management in Nevada |
|
|
Term
| (taxation: 11/11) (Apple Operations Europe) |
|
Definition
• Irish corporate taxes only apply to firms that are managed in Ireland
• US corporate taxes only apply to firms registered or incorporated in the US
• As companies managed in the US but incorporated in Ireland, Apple subsidiaries have no tax residence and they pay nothing (or very little)
• Note: this arrangement would not work on individual taxpayers |
|
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Term
| (taxation: 11/11) (Apples Sales International) |
|
Definition
Owns share of IP used in offshore sales
Buys finished products from vendors
Sells to other Apple affiliates in Europe, Africa, Asia, and elsewhere at significant markup
Has no employees |
|
|
Term
| (employment reg.: 11/16) Core Idea |
|
Definition
| • Employment regulations seek to prevent discrimination in hiring, pay, and promotion |
|
|
Term
| (employment reg.: 11/16) (Discrimination) overview |
|
Definition
• Government allows “permissible discrimination”
• Bona Fide Occupational Qualifications: Permit discrimination if certain traits are “reasonably necessary to the normal operation of the particular business”
• Race/color cannot be used as a BFOQ
• Examples?
o Religious organizations can refuse to hire other religions
o Federal Aviation Administration (FAA) can require mandatory retirement for pilots
o Disney can refuse to hire a man to dress as a female characters and vice versa
o “Exotic clubs” can refuse to hire applicants of age, height, weight, gender deemed inappropriate
• Case #1: Dothard v. Rawlinson (1977)
o Rawlinson (woman) not hired as a prison guard due to her height and weight; sued Alabama for discrimination
o State used BFOQ as a defense
• SC Decision
o Height/weight requirement is discriminatory and was not proven as necessary to the job
o Acceptable to bar women from jobs where they may be at risk (e.g., all male prisons)
• Case #2: Hooters gender discrimination
• Several lawsuits; no established legal answer
• In 1997: Group of men files class action lawsuit
o EEOC would not complete an investigation
o Hooters settled out of court
o Set aside $2M for men denied jobs because of their gender
• Beyond permissible discrimination, laws tend to regulate discrimination in these categories:
o Sex/gender
o Race
o National origin
o Miscellaneous |
|
|
Term
| (employment reg.: 11/16) (Discrimination) examples of what can/ can't use as hire practice |
|
Definition
o Religious organizations can refuse to hire other religions
o Federal Aviation Administration (FAA) can require mandatory retirement for pilots
o Disney can refuse to hire a man to dress as a female characters and vice versa
o “Exotic clubs” can refuse to hire applicants of age, height, weight, gender deemed inappropriate |
|
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Term
| (employment reg.: 11/16) (Discrimination) Bona Fide Occupational Qualifications |
|
Definition
Permit discrimination if certain traits are “reasonably necessary to the normal operation of the particular business”
• Race/color cannot be used as a BFOQ |
|
|
Term
| (employment reg.: 11/16) (Discrimination) Case #1: Dothard v Rawlinson |
|
Definition
(1977)
o Rawlinson (woman) not hired as a prison guard due to her height and weight; sued Alabama for discrimination
o State used BFOQ as a defense
• SC Decision
o Height/weight requirement is discriminatory and was not proven as necessary to the job
o Acceptable to bar women from jobs where they may be at risk (e.g., all male prisons) |
|
|
Term
| (employment reg.: 11/16) (Discrimination) Case #2: Hooters' Gender Discrimination |
|
Definition
• Case #2: Hooters gender discrimination
• Several lawsuits; no established legal answer
• In 1997: Group of men files class action lawsuit
o EEOC would not complete an investigation
o Hooters settled out of court
o Set aside $2M for men denied jobs because of their gender |
|
|
Term
| (employment reg.: 11/16) (Discrimination) laws tend to regulate discrimination in these categories: |
|
Definition
o Sex/gender
o Race
o National origin
o Miscellaneous |
|
|
Term
| (employment reg.: 11/16) (sex/gender) overview |
|
Definition
• The Equal Pay Act of 1963 prohibits wage discrimination on the basis of sex/gender
• Equal pay must be given for work requiring equal:
o Skill
o Effort
o Responsibility
o Working conditions
• Unequal pay for equal work allowed if
o Employer has a seniority system
o Or a merit system
• You are rewarding performance
o Pay is based on “quantity or quality” of work
o Factors other than sex (like geography)
• To prove discrimination, employee must establish a prima face case, showing:
o Wages differ by gender
o Work is of equal skill, effort, etc.
o Working conditions are similar
• Don’t have to prove intent (Exam question)
• Tradeoff: dispute is a strict liability tort |
|
|
Term
| (employment reg.: 11/16) (sex/gender) Equal pay must be given for work requiring equal: |
|
Definition
o Skill
o Effort
o Responsibility
o Working conditions |
|
|
Term
| (employment reg.: 11/16) (sex/gender) Unequal pay for equal work allowed if |
|
Definition
o Employer has a seniority system
o Or a merit system
• You are rewarding performance
o Pay is based on “quantity or quality” of work
o Factors other than sex (like geography) |
|
|
Term
| (employment reg.: 11/16) (sex/gender) To prove discrimination, employee must establish a prima face case, showing: |
|
Definition
o Wages differ by gender
o Work is of equal skill, effort, etc.
o Working conditions are similar
• Don’t have to prove intent (Exam question) |
|
|
Term
| (employment reg.: 11/16) Race |
|
Definition
• Regulated by Civil Rights Act of 1964
• Discrimination based on race or color is prohibited in recruitment, hiring, and promotion
• Policies with a disparate racial impact are also prohibited
o “Fair in form, but discriminatory in operation” |
|
|
Term
| (employment reg.: 11/16) (National origin) |
|
Definition
• Often deals with alleged hiring discrimination, e.g. Muslim-Americans claiming they were not hired due to their ancestry
• Language…?
o EEOC does not allow firms to require employees to speak English at all times
o EEOC does not allow firms to require employees speak English when needed for safety or efficiency |
|
|
Term
| (employment reg.: 11/16) (National origin) language? |
|
Definition
• Language…?
o EEOC does not allow firms to require employees to speak English at all times
o EEOC does not allow firms to require employees speak English when needed for safety or efficiency |
|
|
Term
| (employment reg.: 11/16) Miscellaneous |
|
Definition
• Sexual orientation not covered by Civil Rights Act or any other federal law
• Covered by some state and local laws
• Some apply only to government employees; some apply to all employees
• Age Discrimination in Employment Act (1967) prohibits age discrimination in hiring, firing, layoffs, and wages
• Typically applies >40 years old
• Also can’t require certain age for job
o But you can require a license (which have many age floors)
• Prohibits most (but not all) mandatory retirement
• Genetic Information Nondiscrimination Act (2008) prohibits firms from using employees’ genetic information to hire, fire, or promote
• Also applies to group health insurance
• Favored by privacy advocates
• Americans with Disabilities Act (1990) prohibits discrimination due to physical/mental disability
o Employer must make reasonable accommodations for employees
o Allowed to discriminate if it will cause undue burden on business
• Can’t charge disabled customers/employees for these accommodations
• Tax credits available to defray costs |
|
|
Term
| (employment reg.: 11/16) Miscellaneous: Laws/ acts? |
|
Definition
Age Discrimination in Employment Act (1967) prohibits age discrimination in hiring, firing, layoffs, and wages
• Typically applies >40 years old
• Also can’t require certain age for job
o But you can require a license (which have many age floors)
• Prohibits most (but not all) mandatory retirement
Genetic Information Nondiscrimination Act (2008) prohibits firms from using employees’ genetic information to hire, fire, or promote
• Also applies to group health insurance
• Favored by privacy advocates
Americans with Disabilities Act (1990) prohibits discrimination due to physical/mental disability
o Employer must make reasonable accommodations for employees
o Allowed to discriminate if it will cause undue burden on business
• Can’t charge disabled customers/employees for these accommodations
• Tax credits available to defray costs |
|
|
Term
| (employment reg.: 11/16) Core Idea |
|
Definition
| • Governments also enforce regulations on wages, work hours, and child labor; most of these are contained in the Fair Labor Standards Act (FLSA) |
|
|
Term
| (employment reg.: 11/16) Minimum Wage |
|
Definition
• Current: $7.25/hour (Federal); $9/hour (CA)
• Federal exceptions:
o If under 20, firm can pay $4.25/hour for first 90 days
o Vocational education students
o Individuals with disabilities
• “Real” minimum wage caries by state
• Many firms pay above minimum wage on their own
• NYT Article: Gravity Payments in Seattle
o Some customers left
o Some employees left; others frustrated
o New customers, but a pricey transition
o A pending lawsuit |
|
|
Term
| (employment reg.: 11/16) (Minimum Wage) federal exceptions? |
|
Definition
o If under 20, firm can pay $4.25/hour for first 90 days
o Vocational education students
o Individuals with disabilities |
|
|
Term
| (employment reg.: 11/16) (Minimum Wage) NY article: Gravity Payments in Seattle |
|
Definition
o Some customers left
o Some employees left; others frustrated
o New customers, but a pricey transition
o A pending lawsuit |
|
|
Term
| (employment reg.: 11/16) Work Week/ Over time Pay |
|
Definition
• FLSA instituted:
o 40-hour work week
o OT pay of at least 1.5X regular wage rate
o “White collar” jobs mostly exempt
• Roots: European Socialism; trade unions
• Intent was to punish employers and create jobs
• States can modify these rules
• In CA (for non-exempt jobs):
o OT must be paid beyond 8/hours day
o Working four 10 hour days= 8 hours of OT
o Unions lobbying against change to this regulation, unless it is in a union contract
o Employees not allowed “flextime” arrangement |
|
|
Term
| (employment reg.: 11/16) Work Week/ Over time Pay (FLSA instituted what?) |
|
Definition
o 40-hour work week
o OT pay of at least 1.5X regular wage rate
o “White collar” jobs mostly exempt |
|
|
Term
| (employment reg.: 11/16) Work Week/ Over time Pay (in CA: for non exempt jobs) |
|
Definition
o OT must be paid beyond 8/hours day
o Working four 10 hour days= 8 hours of OT
o Unions lobbying against change to this regulation, unless it is in a union contract
o Employees not allowed “flextime” arrangement |
|
|
Term
| (employment reg.: 11/16) Child Labor (overview) |
|
Definition
• General FLSA regulations
o Must be >14 to work
o Limited #/hours (age 14-16); unlimited if age >16
o Must pay at least minimum wage
• Exceptions include: family-owned business; agriculture jobs
• States also regulate child labor |
|
|
Term
| (employment reg.: 11/16) Child Labor (general FLSA regs) |
|
Definition
o Must be >14 to work
o Limited #/hours (age 14-16); unlimited if age >16
o Must pay at least minimum wage |
|
|
Term
| (employment reg.: 11/16) Work Week/OT Pay: roots of regulations instituted? |
|
Definition
|
|
Term
| (employment reg.: 11/16) FSLA: |
|
Definition
Fair Labor Standards Act
• Passed in 1938 • Major Provisions o Federal minimum wage o Length of work week/overtime pay o Limitations on child labor • Applies to interstate commerce |
|
|
Term
| (employment reg.: 11/16) FSLA (1938): Major provisions of? |
|
Definition
o Federal minimum wage
o Length of work week/overtime pay
o Limitations on child labor |
|
|
Term
| (employment reg. pt2: 11/18) core idea |
|
Definition
• State governments have instituted multiple “occupational regulations.” These require varying levels of state oversight on working in specific jobs.
• Share of workers with a state occupational license has gone up since the 1950s.
• Less manufacturing and more service type work
o Health care practitioner has requirement that you need a state license
o Highly regulated |
|
|
Term
| (employment reg. pt2: 11/18) occupational regs (3 levels of occupational regulation) |
|
Definition
o Registration (less)
o Certification (in between)
o Licensure (most strict) |
|
|
Term
| (employment reg. pt2: 11/18) registration |
|
Definition
| • Occurs when state requires all individuals in a particular occupation to keep their name, contact information, and qualifications on file |
|
|
Term
| (employment reg. pt2: 11/18) certification |
|
Definition
• Occurs when an individual must pass an exam administered by a state agency (or a job-related group)
• Otherwise, work may still be performed but is looked at as lower in quality
o CPA versus non-CPAs |
|
|
Term
| (employment reg. pt2: 11/18) licensure |
|
Definition
• Individual must meet education and testing requirements and pay a fee
• Without government-granted license, it is illegal to work in that particular job
• Examples?
o Healthcare fields, teaching, physicians |
|
|
Term
| (employment reg. pt2: 11/18) why? (arguments in favor) |
|
Definition
o Sets minimum education/training standards
o Serves as a screening service
o Reduces information asymmetry |
|
|
Term
| (employment reg. pt2: 11/18) why not (arguments against?) |
|
Definition
o Paternalism
o Licensing limits supply of labor, causing an increase in prices
o Licensed individuals/groups lobby against competition (regulatory capture)
o Licensing has a disproportionate impact on low-income occupations |
|
|
Term
| (employment reg. pt2: 11/18) quick case study: regulating personal trainers in Washington DC (context) |
|
Definition
o ACA incentivizes wellness programs, which may involve use of personal trainers
o But no state licenses or regulates personal trainers
o Policymakers starting to wonder… should we?
o DC first out of the gate |
|
|
Term
| (employment reg. pt2: 11/18) quick case study: regulating personal trainers in Washington DC (2014) |
|
Definition
City passes law to regulate personal trainers, delegates job to the “Board of Physical Therapy”
• Chief regulator said:
o Anecdotal accounts of injury and sexual misconduct
o DC should be the first to try this |
|
|
Term
| (employment reg. pt2: 11/18) quick case study: regulating personal trainers in Washington DC (proposal #1) |
|
Definition
require 4-year degree; test; license fee
o 4-year degree limits the amount of people entering, especially low income |
|
|
Term
| (employment reg. pt2: 11/18) quick case study: regulating personal trainers in Washington DC (proposal #2) |
|
Definition
require at least 1 day of training
• Fitness industry cries fowl; why should people regulating our competitors also regulate us?
• After controversy, regulator is not reappointed and proposals appear “dead” |
|
|
Term
| (employment reg. pt2: 11/18) quick case study: regulating personal trainers in Washington DC (overview) |
|
Definition
• Context:
o ACA incentivizes wellness programs, which may involve use of personal trainers
o But no state licenses or regulates personal trainers
o Policymakers starting to wonder… should we?
• DC first out of the gate
• 2014: City passes law to regulate personal trainers, delegates job to the “Board of Physical Therapy”
• Chief regulator said:
o Anecdotal accounts of injury and sexual misconduct
o DC should be the first to try this
• Proposal #1: require 4-year degree; test; license fee
o 4-year degree limits the amount of people entering, especially low income
• Proposal #2: require at least 1 day of training
• Fitness industry cries fowl; why should people regulating our competitors also regulate us?
• After controversy, regulator is not reappointed and proposals appear “dead”
• What do you think? |
|
|
Term
| (employment reg. pt2: 11/18) quick case study: Hair Braiding in Iowa |
|
Definition
• Two women suing Iowa over licensing requirement for African hair braiders
• State requires a cosmetology license:
o HS diploma
o 2,100 hours of cosmetology school
o Pass a $58 state exam
• The women say:
o We are not cosmetologists!
o One spent $18,000 on cosmetology school but dropped out because it did not teach hair braiding
o Afraid of fines ($1,000 per violation)
o Laws discriminate: only people who charge money are covered under the law |
|
|
Term
| (employment reg. pt2: 11/18) quick case study: Hair Braiding in Iowa (context) |
|
Definition
• Two women suing Iowa over licensing requirement for African hair braiders
• State requires a cosmetology license:
o HS diploma
o 2,100 hours of cosmetology school
o Pass a $58 state exam |
|
|
Term
(employment reg. pt2: 11/18) quick case study: Hair Braiding in Iowa
(the women say?) |
|
Definition
o We are not cosmetologists!
o One spent $18,000 on cosmetology school but dropped out because it did not teach hair braiding
o Afraid of fines ($1,000 per violation)
o Laws discriminate: only people who charge money are covered under the law |
|
|
Term
| (employment reg. pt2: 11/18) Core idea |
|
Definition
| Employment regulations raise questions about the role of government in contractual relationships (employer-employee and business-customer). |
|
|
Term
(employment reg. pt2: 11/18) Minimum Wages
(overview) |
|
Definition
• 1918, Congress passed a minimum wage law that applied to women in Washington D.C.
• Lawsuit filed; reached Supreme Court in 1923
• Question: was minimum wage law legal?
• An unemployed woman filed lawsuit because she lost her job
o 21 years-old
o Elevator operator for a hotel
o $35/month salary + 2 meals/day (about $500/month in 2015)
o She liked the job; hotel liked having her as an employee
• This was less than minimum wage, and hotel could not afford to meet the requirement, so she was dismissed
• SC said minimum wage was unconstitutional
o Liberty and property rights imply that individuals have a right to form contracts to acquire property
o Preventing contracts from forming deprives people of property and liberty
o But in 1937, Court reversed itself |
|
|
Term
(employment reg. pt2: 11/18) Minimum Wages
(An unemployed woman filed lawsuit because she lost her job) |
|
Definition
o 21 years-old
o Elevator operator for a hotel
o $35/month salary + 2 meals/day (about $500/month in 2015)
o She liked the job; hotel liked having her as an employee |
|
|
Term
(employment reg. pt2: 11/18) Minimum Wages
(SC said....?) |
|
Definition
minimum wage was unconstitutional
o Liberty and property rights imply that individuals have a right to form contracts to acquire property
o Preventing contracts from forming deprives people of property and liberty
o But in 1937, Court reversed itself |
|
|
Term
| (employment reg. pt3: 11/23) Core idea |
|
Definition
| • Federal and state laws shape the bargaining process between employees and employers |
|
|
Term
| (employment reg. pt3: 11/23) history |
|
Definition
• Union demand grew during and after the industrial revolution
o Knights of Labor (1869)
o American Federation of Labor (1886)
• Usually opposed to capitalism
o KOL goal: “greatest good to the greatest amount of people”
o Strong ties to socialism; communism |
|
|
Term
| (employment reg. pt3: 11/23) (traits) overview |
|
Definition
• Definition?
o Organization that bargains on behalf of employees’ collective interest
• Collective bargaining for what?
o Wages
o Benefits
o Working conditions
o Dispute resolution procedures
• Collect dues from members; perhaps also representation fees from non-members
o Money used for contract negotiations/organizing
o Money used for lobbying
• Might lobby for or against minimum wage laws, budget/pension cuts, immigration
o Money used for campaign support
• Exempt from antitrust laws
o Granted monopoly over bargaining
• Why give them monopoly?
• If you didn’t give them monopoly there would be many unions, when we only want a few
o Greater bargaining power for employees
o Theory: collective bargaining rights act as counterweight to employer’s upper-hand in setting pay
• A union’s greatest threat…?
o Going on strike or a “work stoppage” |
|
|
Term
| (employment reg. pt3: 11/23) (traits) definition? |
|
Definition
| o Organization that bargains on behalf of employees’ collective interest |
|
|
Term
| (employment reg. pt3: 11/23) (traits) collective bargaining for what? |
|
Definition
o Wages
o Benefits
o Working conditions
o Dispute resolution procedures |
|
|
Term
| (employment reg. pt3: 11/23) (traits) Collect dues from members; perhaps also representation fees from non-members |
|
Definition
o Money used for contract negotiations/organizing
o Money used for lobbying
• Might lobby for or against minimum wage laws, budget/pension cuts, immigration
o Money used for campaign support |
|
|
Term
| (employment reg. pt3: 11/23) (traits) Exempt from antitrust laws |
|
Definition
o Granted monopoly over bargaining
• Why give them monopoly?
• If you didn’t give them monopoly there would be many unions, when we only want a few
o Greater bargaining power for employees
o Theory: collective bargaining rights act as counterweight to employer’s upper-hand in setting pay |
|
|
Term
| (employment reg. pt3: 11/23) (traits) A union’s greatest threat…? |
|
Definition
| o Going on strike or a “work stoppage” |
|
|
Term
| (employment reg. pt3: 11/23) Main laws |
|
Definition
• National Labor Relations Act (1935)
o “Wagner Act”
o Pro-union
• Labor Management Relations Act (1947)
o “Taft-Hartley Act”
o Pro-business |
|
|
Term
| (employment reg. pt3: 11/23) Wagner Act (overview) |
|
Definition
• Provisions:
o Established collective bargaining rights- i.e., employees can elect reps that negotiate on their behalf
o Allowed:
• Union Shops: union can negotiate that all employees eventually join
• Closed Shops: only existing union members can be hired
o Established National Labor Relations Board (NLRB) to enforce Wagner and resolve disputes
• Made certain business practices illegal
o Interference with union organizing activities
o Retaliation against pro-union employees
o Refusing to bargain with a recognized union
• Law does not apply to federal employees
o Why not?
• Conflict of interest
Aftermath:
• Membership grew during WW2
• Strike Wave of 1945-1946
o Multiple strikes; involved ~5 million employees
o Industries: oil, auto, rail, mining, shipping, film industry, meatpacking
o Several general strikes
• Even if you were not affected by the employer, you would still go on strike
• This prompted demand for reducing union power |
|
|
Term
| (employment reg. pt3: 11/23) Wagner Act (provisions) |
|
Definition
o Established collective bargaining rights- i.e., employees can elect reps that negotiate on their behalf
o Allowed:
• Union Shops: union can negotiate that all employees eventually join
• Closed Shops: only existing union members can be hired
o Established National Labor Relations Board (NLRB) to enforce Wagner and resolve disputes |
|
|
Term
| (employment reg. pt3: 11/23) Wagner Act (made certain business practices illegal?) |
|
Definition
o Interference with union organizing activities
o Retaliation against pro-union employees
o Refusing to bargain with a recognized union |
|
|
Term
| (employment reg. pt3: 11/23) Wagner Act (does law apply to federal employees?) |
|
Definition
does not
o Why not?
• Conflict of interest |
|
|
Term
| (employment reg. pt3: 11/23) Wagner Act (aftermath) |
|
Definition
• Membership grew during WW2
• Strike Wave of 1945-1946
o Multiple strikes; involved ~5 million employees
o Industries: oil, auto, rail, mining, shipping, film industry, meatpacking
o Several general strikes
• Even if you were not affected by the employer, you would still go on strike
• This prompted demand for reducing union power |
|
|
Term
| (employment reg. pt3: 11/23) Wagner Act (aftermath: Strike Wave) |
|
Definition
1945-1946
o Multiple strikes; involved ~5 million employees
o Industries: oil, auto, rail, mining, shipping, film industry, meatpacking
o Several general strikes
• Even if you were not affected by the employer, you would still go on strike |
|
|
Term
| (employment reg. pt3: 11/23) taft hartley act |
|
Definition
• Targets unfair union practices
• Major provisions:
o Outlawed closed shops
o Banned certain strikes
• You could not go on strike and expect to keep your job unless there is a reason to go on strike (meatpacking going on strike because of rail)
o Allowed businesses to state opposition to union
o States allowed to pass right-to-work laws (“RTW”)
• You cant require people to be previous union workers to be able to work, this opens open ships and closes union shops |
|
|
Term
| (employment reg. pt3: 11/23) R.t.w (over view) |
|
Definition
• A right-to-work law bans union shops
o Employees cant be forced to join union, pay dues, or other fees as a condition of employment
• Not federal law, state-by-state
• As of 2015, 25 states are “RTW states”
• Unions oppose RTW laws
• Arguments:
o Undermines union power
o Possible free rider problem
• You get the benefits without the dues or work
o Lower wages and benefits (?)
• Most research does not find this the case, the costs are lower for housing and taxes and lower wages
• Supporters say:
o Requiring union membership violates freedom of association, right to contract, and possibility freedom of speech
o No minority rights; everyone has to agree to what union negotiates (or quit)
o People can still join unions if the want, but unions can’t force them (makes unions more accountable) |
|
|
Term
| (employment reg. pt3: 11/23) R.t.w (supporters say?) |
|
Definition
o Requiring union membership violates freedom of association, right to contract, and possibility freedom of speech
o No minority rights; everyone has to agree to what union negotiates (or quit)
o People can still join unions if the want, but unions can’t force them (makes unions more accountable) |
|
|
Term
| (employment reg. pt3: 11/23) R.t.w (arguments; why unions opposed R.t.w laws? ) |
|
Definition
o Undermines union power
o Possible free rider problem
• You get the benefits without the dues or work
o Lower wages and benefits (?)
• Most research does not find this the case, the costs are lower for housing and taxes and lower wages |
|
|
Term
| (employment reg. pt3: 11/23) *Unions Evolve (overview)* |
|
Definition
• Membership has:
o Decreased in size
o Shifted toward public sector from private sector
• Unions remain top contributors to political campaigns (local, state, and federal)
• Political positions on key issues have changed
o Healthcare
o Immigration
• Unions are funding “Fight for $15”
• Service Employees International Union (SEIU) is major backer
o >$20 million spent in 2014
• Some reasons:
o Public relations
o Looking for new members
o Many union contracts index wages to the minimum wage
• SEIU also trying to unionize more college faculty
• Why?
o More use of adjuncts
o Target population agrees politically
o Public concern over cost of higher education
o Low bar for authorizing representation (<50%)
• Ongoing issue at USC
• Also efforts underway to unionize college athletes
• Northwestern football players tried (unsuccessfully)
o Issue: are college athletes university employees or not?
o NLRB refused to determine; did not get involved
• Bigger picture:
o NCAA?
• Supposed to represent the best interest of college athletes
• If they unionize, how does the NCAA fit in this picture?
o Type of representation: school-level or team-level?
o What to do about teams that lose money? |
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Term
| (employment reg. pt3: 11/23) Unions Evolve (membership has?) |
|
Definition
o Decreased in size
o Shifted toward public sector from private sector |
|
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Term
| (employment reg. pt3: 11/23) Unions Evolve (some reasons?) |
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Definition
o Public relations
o Looking for new members
o Many union contracts index wages to the minimum wage |
|
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Term
| (employment reg. pt3: 11/23) Wagner Act: allowed? |
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Definition
• Union Shops: union can negotiate that all employees eventually join
• Closed Shops: only existing union members can be hired |
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Term
| (employment reg. pt3: 11/23) taft hartley act (major provisions) |
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Definition
o Outlawed closed shops
o Banned certain strikes
• You could not go on strike and expect to keep your job unless there is a reason to go on strike (meatpacking going on strike because of rail)
o Allowed businesses to state opposition to union
o States allowed to pass right-to-work laws (“RTW”)
• You cant require people to be previous union workers to be able to work, this opens open ships and closes union shops |
|
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Term
| (employment reg. pt3: 11/23) taft hartley act: states allowed to pass what laws? |
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Definition
o States allowed to pass right-to-work laws (“RTW”)
• You cant require people to be previous union workers to be able to work, this opens open ships and closes union shops |
|
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Term
| (deregulation: 11/30) core idea |
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Definition
| A movement toward deregulation began in the US and elsewhere during the 1970s. This impacted the airline and trucking industries, among others |
|
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Term
| (deregulation: 11/30) what is deregulation? |
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Definition
| o Reducing number of regulations that apply to a certain industry |
|
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Term
| (deregulation: 11/30) deregulation could be? |
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Definition
o Eliminating regulations altogether
o Consolidating regulations |
|
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Term
| (deregulation: 11/30) why deregulate? |
|
Definition
o Economic efficiency
• Because of overregulation, you don’t know which ones apply and which ones don’t
o Belief that regulations are not doing any good/don’t make sense
o Political motivations
o Reaction against regulatory capture
o Reaction against paternalism |
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Term
| (deregulation: 11/30) Examples of deregulation? |
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Definition
• Airline industry
• Trucking industry |
|
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Term
| (deregulation: 11/30) airline deregulation |
|
Definition
• Civil Aeronautics Authority Act (1938) created the Civil Aeronautics Board, which regulated
o Passenger fares
o Assign routes to airlines
o Control entry of new airlines into market
• Airline Deregulation Act (1978) deregulated airlines |
|
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Term
| (deregulation: 11/30) trucking deregulation |
|
Definition
• Regulated by Motor carrier Act (1935); result of lobbying by Interstate Commerce Commission and railroad industry
• Included:
o Federal government licensed trucking firms (controlling market entry)
o Required firms to file proposed charges 30 days in advance; competitors could see the charges
o Heavy route controls
• Controls on how you can get from one city to another (what highways you can use)
• Partially deregulated by Motor Carrier Act (1980)
• Effects:
o Greater competition as more trucking firms entered market
o Lower shipping costs
o Lower wages for truck drivers
• We still have the Federal Motor Carrier Safety Administration |
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Term
| (deregulation: 11/30) trucking deregulation (included?) |
|
Definition
o Federal government licensed trucking firms (controlling market entry)
o Required firms to file proposed charges 30 days in advance; competitors could see the charges
o Heavy route controls
• Controls on how you can get from one city to another (what highways you can use) |
|
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Term
| (deregulation: 11/30) trucking deregulation (partially deregulated by?) |
|
Definition
|
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Term
| (deregulation: 11/30) trucking deregulation (effects?) |
|
Definition
o Greater competition as more trucking firms entered market
o Lower shipping costs
o Lower wages for truck drivers |
|
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Term
| (deregulation: 11/30) core idea |
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Definition
| • Deregulation is relatively rare but there are continual calls for reduced government roles in the economy |
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Term
| (deregulation: 11/30) regulatory permanence |
|
Definition
• Most regulations stay in effect once they’re passed
• Why?
• Paternalism
• Regulations create winners (people/firms better off) and losers (worse off)
o Winners: Have more money to lobby for regulation
o Losers: Have less money to lobby against regulation
o Basically: Regulatory capture
• Once regulations become complex, policymakers shift attention to enforcement and ‘forget’ to determine if regulation yields social utility
• This leaves vestigial regulations
o Old regulations stay on the books; people forget about them
• We have this thing in the books now but we don’t really need it now, we needed it in the past
o These may be ‘resurrected’ and applied to related, but different, issues |
|
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Term
| (deregulation: 11/30) regulatory permanence (Regulations create winners (people/firms better off) and losers (worse off)) |
|
Definition
o Winners: Have more money to lobby for regulation
o Losers: Have less money to lobby against regulation
o Basically: Regulatory capture |
|
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Term
| (deregulation: 11/30) regulatory permanence (This leaves vestigial regulations? What are those?) |
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Definition
o Old regulations stay on the books; people forget about them
• We have this thing in the books now but we don’t really need it now, we needed it in the past
o These may be ‘resurrected’ and applied to related, but different, issues |
|
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Term
| (deregulation: 11/30) future? |
|
Definition
• Keep an eye on:
o Disruptive Innovations, like ride sharing |
|
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Term
| (deregulation: 11/30) what is disruptive innovation? |
|
Definition
• A product or service built from “off-the-shelf components” that is simpler or more convenient than existing offerings
• ‘New’ product gradually displaces the ‘old’
• Examples:
o Amazon, online apps for banks |
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Term
| (deregulation: 11/30) über lawsuit? |
|
Definition
• Accuses Uber of deceptive advertising that has caused harm to taxi companies
• Deception:
o Taxi drivers must submit to background checks; claim Uber drivers do not and $1 ‘safe ride’ fee is misleading
• Harm:
o Damaged reputation, lower revenue (20-40% drop) and lower profits |
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Term
| (deregulation: 11/30) Uber responds |
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Definition
| • This lawsuit was filed by an industry that for decades has ignored the safety of riders and drivers- and that in San Francisco, allows up to 2 drug or alcohol offense… |
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Term
| (deregulation: 11/30) Uber in NYC (overview) |
|
Definition
• Ride-sharing has disrupted the city’s government-controlled taxi medallion market
• How it works:
o City sells a limited number of ‘medallions’- or permits- to operate a taxi within the city
o Low supply + high demand = high price (up to $1 million each)
o Investment companies often buy and then lease medallions
o Medallions can be bought with loans but serve as collateral
• Ridesharing has caused a ‘massive’ decline in demand for traditional taxis
• Medallion prices have plummeted
• Those who paid high medallion rates finding it hard to make payments
• Lenders are now foreclosing on some medallion owners, who blame ridesharing for their problem
• And they now want more regulation of Uber and similar companies
• …But why not deregulate taxis? |
|
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Term
| (deregulation: 11/30) Uber in NYC (how works) |
|
Definition
o City sells a limited number of ‘medallions’- or permits- to operate a taxi within the city
o Low supply + high demand = high price (up to $1 million each)
o Investment companies often buy and then lease medallions
o Medallions can be bought with loans but serve as collateral |
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Term
|
Definition
• Ratified and takes effect in 1920—in context; G.D.= 1930
• The “Prohibition Era” begins |
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Term
|
Definition
o 18th amendment repealed; 1933 (21st Amendment)
sent regulation of alcohol back to state/ local govt’s |
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Term
| BLUE LAWS, or SUNDAY LAWS |
|
Definition
govern the sale. Consumption of alcohol
• EX’s
Arkansas; No alcohol purchases allowed on Sunday
Michigan; None from 2-7am M-Sa or before 12PM Sundays |
|
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Term
| EX’s of BLUE LAWS, or SUNDAY LAWS |
|
Definition
Arkansas; No alcohol purchases allowed on Sunday
Michigan; None from 2-7am M-Sa or before 12PM Sundays |
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Term
|
Definition
o MINIMUM LEGAL DRINKING AGE (MLDA) set by states following repeal of prohibition
o Initially: most states set MLDA at 21
o 1970s: many changed their MLDA to 18
o With no national standard, Congress passed NATIONAL MINIMUM DRINKING AGE ACT (1984)
• States with age < 21 would lose 10% of federal highway funding
o Most bumped MLDA back to 21, but… |
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Term
|
Definition
o With no national standard, Congress passed NATIONAL MINIMUM DRINKING AGE ACT (1984)
• States with age < 21 would lose 10% of federal highway funding
o Most bumped MLDA back to 21, but…
o LOTS OF EXCEPTIONS |
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Term
|
Definition
| (1961) banned interstate betting via wired communication |
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Term
|
Definition
| banned most sports betting |
|
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Term
| Internet Gambling Enforcement Act (2006) |
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Definition
| made it illegal to participate in gambling activities via internet that are otherwise illegal |
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Term
| o Class action in NY claims negligence—Fan Duel and DraftKings |
|
Definition
didn’t tell customers that employees were also participating
• OUTCOMES; TBD
• In FD/DK favor; all customers agree to arbitrate their disputes; waive right to sue
• Against FD/DK; states and federal gov’t starting to investigate
• Is it a game of skill.. or chance? |
|
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Term
| Controlled Substances Act |
|
Definition
Classifies Marijuana as a Schedule I Substance (1970)
o High likelihood of abuse
o No accepted use in medical treatment
o Unsafe under medical supervision
• Others: LSD, heroin, ecstasy, Quaaludes, peyote |
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Term
| Regulatory conflict FEDv.State (marijuana) |
|
Definition
• Marijuana “activity” is the only activity with DUAL STATUS
o Completely prohibited under federal law
o Degrees of legalization under state laws
• Supreme Court has said:
o Should be federally-regulated
• Growing marijuana at home impacts the interstate marijuana market and is interstate commerce (possibly even inter-national)
o Federal gov’t cannot force states to enforce federal regulations
• A recent history of federal directives on marijuana
o 2009; DOJ memo hints Obama Administration will be “hands off” on enforcing federal marijuana ban
o 2010; DOJ threatens to sue CA if the state legalizes
o 2011; DOJ says it will enforce federal ban
o 2013; DOJ says state/ local enforcement is best way to regulate marijuana |
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Term
| Regulatory conflict FEDv.State (marijuana) DUAL STATUS |
|
Definition
o Completely prohibited under federal law
o Degrees of legalization under state laws |
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Term
| Regulatory conflict FEDv.State (marijuana)Schedule I Substance |
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Definition
o High likelihood of abuse
o No accepted use in medical treatment
o Unsafe under medical supervision |
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Term
| Regulatory conflict FEDv.State(marijuana) SC has said (fed vs. state) |
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Definition
o Should be federally-regulated
• Growing marijuana at home impacts the interstate marijuana market and is interstate commerce (possibly even inter-national)
o Federal gov’t cannot force states to enforce federal regulations |
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Term
| difficulties levied on weed industry (results of regulations/ regulatory issues) |
|
Definition
• Often underground b/c of uncertainty over jurisdiction and criminal punishment
• Marijuana producers/ retail often cannot find banking services
o Banks wont open accounts (fear of money laundering)
o This pushes industry toward a cash-only model, which is thus harder to regulate
• Federal law limits marijuana producers/ retailers from using most tax deductions
o Cant deduct overhead, labor costs
o Some Colorado dispensaries have federal tax rates >50% |
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Term
| Trafficking Victims Protection Act (2000) (prostitution) |
|
Definition
o Made human trafficking a federal crime
o Created a T-Visa for victims to stay in the US for up to 4 years in exchange for their help with prosecuting offenders (usually)
o Increased monitoring efforts
o No Fed contracts with international companies that may engage/ benefit from trafficking |
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Term
| exceptions (businesses) to discrimination based on usual categories (sex/ gender, race, nationality, miscellaneous) |
|
Definition
• Exotic clubs
• Size/ weight/ gender for heavy lifting
• Hooters type locals |
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Term
|
Definition
regulates racial discrimination
• Discrimination based on race or color is prohibited in recruitment, hiring, and promotion
• Policies with a disparate racial impact are also prohibited
o “Fair in form, but discriminatory in operation” |
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Term
|
Definition
(Equal Employment Opportunity Commission) does not allow firms to require employees to speak English at all times
o EEOC does allow firms to require employees speak English when needed for safety or efficiency
• Often deals w/ alleged hiring discrimination, e.g. Muslim Americans claiming they were not hired due to their ancestry |
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Term
| Age Discrimination in Employment Act |
|
Definition
(1967) prohibits age discrimination in hiring, firing, layoffs, and wages
o Typically applies >40 years old
o Also can’t require certain age for job
• But you can require a license (which may have age floors)
Drivers
Certain kinds of state licenses
o Prohibits most (but not all) mandatory retirement |
|
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Term
| Genetic information nondiscrimination Act |
|
Definition
(2008) prohibits firms from using employees’ genetic information to hire, fire, or promote
o Also applies to group health insurance
o Favored by privacy advocates |
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Term
| Americans W/ Disabilities Act |
|
Definition
(1990) prohibits discrimination due to physical/ mental disability
o Employer must make reasonable accommodations for employees
o Allowed to discriminate if it will cause undue burden on business
o Can’t charge disabled customers/ employees for these accommodations
o Tax credits available to defray costs |
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Term
|
Definition
instituted: (Fair Labor Standards Act)
o 40 hour work week
o Ot pay of at least 1.fiveX regular wage rate
o “white collar” jobs mostly exempt
• Roots; European socialism; trade unions
• Intent was to punish employers and create jobs |
|
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Term
|
Definition
• CPA v. non CPA
• Lesser if not certified
• MORE
• Ex’s
o Architecture
o Plumber |
|
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Term
|
Definition
|
|
Term
|
Definition
• Individual must meet education and testing requirements and pay a fee
• W/o gov’t granted license, it is illegal to work in that particular job
• Examples?
o RE Brokers
o Civil Servants
o Doctors
o Teachers
o Barbers/ hair coloring/ cosmetology
• Why would state be involved?
o Arguments in favor: (all seem to be forms of consumer protection)
• Sets minimum education/ training standards
• Serves as a screening service
• Reduces information asymmetry
o Arguments against:
• Paternalism
• Licensing limits supply of labor, causing an increase in prices
• Licensed individuals/ groups lobby against competition (regulatory capture)
• Licensing has a disproportionate impact on low income occupations |
|
|
Term
|
Definition
o RE Brokers
o Civil Servants
o Doctors
o Teachers
o Barbers/ hair coloring/ cosmetology |
|
|
Term
| Why would state be involved? Arguments in favor |
|
Definition
(all seem to be forms of consumer protection)
• Sets minimum education/ training standards
• Serves as a screening service
• Reduces information asymmetry |
|
|
Term
| Why would state be involved? Arguments against: |
|
Definition
• Paternalism
• Licensing limits supply of labor, causing an increase in prices
• Licensed individuals/ groups lobby against competition (regulatory capture)
• Licensing has a disproportionate impact on low income occupations |
|
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Term
| Lawsuit filed regarding minimum wage? |
|
Definition
reached Supreme Court in 1923
o Question; Was minimum wage law legal?
o An unemployed woman filed lawsuit b/c she lost her job
• 21yr old
• Elevator operator for a hotel
• $3five/ month salary + 2 meals/day (about $fivehundred/ month in twenty fifteen)
• She liked the job; hotel liked having her as an employee
• An amount less than minimum wage, hotel couldn’t afford to meet requirements, so she was dismissed
o SC said minimum wage was unconstitutional
• Liberty and prop. Rights imply that individuals have a right to form contracts to acquire property
• Preventing contracts from forming deprives people of property and liberty
• In 37, court reversed itself |
|
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Term
| Examples of Disruptive Innovation? |
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Definition
o Really any brick and mortar stores (old) = replaced
• Book stores= replaced
o Online colleges (new)
o Old fashioned encyclopedias = replaced |
|
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Term
|
Definition
| o Taxi drivers must submit to background checks; claims Uber drivers do not and $1 “safe ride” fee is misleading |
|
|
Term
|
Definition
| damaged reputation, lower revenue (20 to 40 percent drop) and lower profits |
|
|
Term
| Results of “Uber Issue” (relating 2 medallions) |
|
Definition
o Ridesharing has cause “massive” decline in demand for traditional taxis
o Medallion prices have plummeted
o Those who paid high medallion rates finding it hard to make payments
o Lenders are now foreclosing on some medallion owners, who blame ridesharing for their problem
o And they now want more reg. of Uber and similar companies
o … but why not dereg. Taxis? |
|
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Term
| First amendment says: (C,S,B) |
|
Definition
o Congress shall make no law respecting an establishment of religion (the establishment clause)
o Or prohibiting the free exercise thereof (the free exercise clause)
o Both are open to interpretation |
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Term
|
Definition
Religious Freedom Restoration Act
• Few specific laws on church/business
• Summary:
o “Government shall not substantially burden a person’s exercise of religion even if the burden results from a rule of general applicability.”
• But the government CAN burden exercise of religion if it convinces a judge/court:
o The law in question serves a compelling state interest
o The law in question is the least restrictive way to achieve interest
o MUST demonstrate both
• Partially struck down in 2003; does not apply to state/local actions
• Many states then passed their own versions of RFRA; created dual regulation
• Federal component reaffirmed
• Congress passed RFRA in response to Supreme Court decision in Employment Division vs. Smith (1990)
• The case:
o Two native American men fired from drug counseling jobs and denied unemployment by Oregon after consuming peyote, which is used in native American religious ceremonies
o SC sided with Oregon, said it is legal to prohibit use of drugs for religious purposes as long as the law applies to everyone (and this one did) |
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Term
| Hobby Lobby et al. and the Contraception Mandate (overview) |
|
Definition
The Mandate:
• Forms with 50+ employees, you must provide insurance that covers sterilization services and FDA-approved contraceptives (with no copays)
• Non-profit, religious employers that exist to inculcate their beliefs are exempt
• Religious ________ are not exempt
o Schools and universities
o Hospitals
o Publishers
o Nursing homes
o Charities
• Firms owned by individuals opposed to contraception also not exempt
The Conflict:
• The sticking point: forms of contraception that are viewed as abortofacients
o Instead of preventing contraception, these act end a pregnancy (destroy embryos or force a miscarriage)
• 4 of 16 FDA-approved methods in this category
o These 4 prompted 50+ lawsuits in 2012
o HHS said employers could shift the cost to insurance companies
o But, ore sticking points:
• Employers then had to pay higher premium
• Some employers are self-insured
Supreme Court Here We Come:
• Sebilius vs. Hobby Lobby Stores, Inc.
• Owned by a Baptist family; 28,000 employees; not open on Sundays; opposes abortofacients
• Justice Department argued firm isn’t religious and could:
o Comply with law and cover abortofacients
o Close
o Remain open, cancel insurance, and pay penalties
o Remain open, don’t cover abortofacients and pay penalties ($1.3 million per day)
• Oral arguments heard in 2014
• Question over RFRA and whether not it applied to this mandate
• For mandate:
o Opponents offer no limiting principle (if contraception does not have to be covered by employer’s insurance, then what else? Vaccines? Cancer treatment?)
o Firm owners can voice opposition but should still pay
o Hobby Lobby isn’t a religious institution in the first place
o Religious freedoms don’t extent to for-profit entities (or any institution)
• Against mandate:
o It results in a Hobson’s Choice; firm owners can either violate their beliefs, pay a fine, or close down (this is a “substantial burden”)
o Employees are not forced to work for Hobby Lobby
o Obama Administration granted dozens of waivers to the mandate, so it must not be “compelling state interest” (waivers cover 80 million people)
o Employees can still access contraception
The Decision:
• Split 5-4 in favor of Hobby Lobby
• “Closely tied” FOR PROFIT firms do not have to comply with contraception mandate if they have religious objections
• Defining, “closely held…”
o IRS: >50% of firms is owned by <5 individuals |
|
|
Term
Hobby Lobby et al. and the Contraception Mandate
(“Closely tied” FOR PROFIT) |
|
Definition
do not have to comply with contraception mandate if they have religious objections
• Defining, “closely held…”
o IRS: >50% of firms is owned by <5 individuals |
|
|
Term
Hobby Lobby et al. and the Contraception Mandate
(Justice Department argued firm isn’t religious and could:) |
|
Definition
o Comply with law and cover abortofacients
o Close
o Remain open, cancel insurance, and pay penalties
o Remain open, don’t cover abortofacients and pay penalties ($1.3 million per day) |
|
|
Term
Hobby Lobby et al. and the Contraception Mandate
(Religious ________ are not exempt) |
|
Definition
o Schools and universities
o Hospitals
o Publishers
o Nursing homes
o Charities
• Firms owned by individuals opposed to contraception |
|
|
Term
Hobby Lobby et al. and the Contraception Mandate
(Supreme Court Here We Come: case) |
|
Definition
• Sebilius vs. Hobby Lobby Stores, Inc.
• Owned by a Baptist family; 28,000 employees; not open on Sundays; opposes abortofacients
• Justice Department argued firm isn’t religious and could:
o Comply with law and cover abortofacients
o Close
o Remain open, cancel insurance, and pay penalties
o Remain open, don’t cover abortofacients and pay penalties ($1.3 million per day)
• Oral arguments heard in 2014
• Question over RFRA and whether not it applied to this mandate
• For mandate:
o Opponents offer no limiting principle (if contraception does not have to be covered by employer’s insurance, then what else? Vaccines? Cancer treatment?)
o Firm owners can voice opposition but should still pay
o Hobby Lobby isn’t a religious institution in the first place
o Religious freedoms don’t extent to for-profit entities (or any institution)
• Against mandate:
o It results in a Hobson’s Choice; firm owners can either violate their beliefs, pay a fine, or close down (this is a “substantial burden”)
o Employees are not forced to work for Hobby Lobby
o Obama Administration granted dozens of waivers to the mandate, so it must not be “compelling state interest” (waivers cover 80 million people)
o Employees can still access contraception
The Decision:
• Split 5-4 in favor of Hobby Lobby
• “Closely tied” FOR PROFIT firms do not have to comply with contraception mandate if they have religious objections
• Defining, “closely held…”
o IRS: >50% of firms is owned by <5 individuals |
|
|
Term
Hobby Lobby et al. and the Contraception Mandate
(The Conflict:) |
|
Definition
• The sticking point: forms of contraception that are viewed as abortofacients
o Instead of preventing contraception, these act end a pregnancy (destroy embryos or force a miscarriage)
• 4 of 16 FDA-approved methods in this category
o These 4 prompted 50+ lawsuits in 2012
o HHS said employers could shift the cost to insurance companies
o But, other sticking points:
• Employers then had to pay higher premium
• Some employers are self-insured |
|
|
Term
Hobby Lobby et al. and the Contraception:
exempt from mandate? |
|
Definition
| • Non-profit, religious employers that exist to inculcate their beliefs are exempt |
|
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Term
|
Definition
is often used to determine tax liability; difference between
o Inputs: Sales + capital gains + other revenues
o Outputs: Labor + materials + equipment + depreciation + other costs
• Tax credits and other special arrangements may further reduce net taxable income |
|
|
Term
|
Definition
an "s corp" under federal law (does not pay federal income taxes). Income, losses, etc. are passed directly to owners and taxed at their rate. But they pay corporate taxes in CA.
• A C-Corporation is a traditional corporation that pays corporate taxes (both federal and state). |
|
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Term
|
Definition
| under federal law (does not pay federal income taxes). Income, losses, etc. are passed directly to owners and taxed at their rate. But they pay corporate taxes in CA. |
|
|
Term
|
Definition
| a traditional corporation that pays corporate taxes (both federal and state). |
|
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Term
| • Collective bargaining for what? |
|
Definition
o Wages
o Benefits
o Working conditions
o Dispute resolution procedures |
|
|
Term
| • National Labor Relations Act |
|
Definition
(1935)
o “Wagner Act”
o Pro-union |
|
|
Term
| • Labor Management Relations Act |
|
Definition
(1947)
o “Taft-Hartley Act”
o Pro-business |
|
|
Term
|
Definition
o Established collective bargaining rights- i.e., employees can elect reps that negotiate on their behalf
o Allowed:
• Union Shops: union can negotiate that all employees eventually join
• Closed Shops: only existing union members can be hired
o Established National Labor Relations Board (NLRB) to enforce Wagner and resolve disputes
• Made certain business practices illegal
o Interference with union organizing activities
o Retaliation against pro-union employees
o Refusing to bargain with a recognized union |
|
|
Term
| (unions evolve) Membership... |
|
Definition
o Decreased in size
o Shifted toward public sector from private sector |
|
|
Term
| (unions evolve) Political positions on key issues have changed |
|
Definition
o Healthcare
o Immigration
• Unions are funding “Fight for $15”
• Unions remain top contributors to political campaigns (local, state, and federal) |
|
|
Term
| (unions evolve) Service Employees International Union (SEIU) |
|
Definition
is major backer
o >$20 million spent in 2014
• Some reasons:
o Public relations
o Looking for new members
o Many union contracts index wages to the minimum wage
• SEIU also trying to unionize more college faculty
• Why?
o More use of adjuncts
o Target population agrees politically
o Public concern over cost of higher education
o Low bar for authorizing representation (<50%)
• Ongoing issue at USC
• Also efforts underway to unionize college athletes
• Northwestern football players tried (unsuccessfully)
o Issue: are college athletes university employees or not?
o NLRB refused to determine; did not get involved
• Bigger picture:
o NCAA?
• Supposed to represent the best interest of college athletes
• If they unionize, how does the NCAA fit in this picture?
o Type of representation: school-level or team-level?
o What to do about teams that lose money? |
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Term
| (unions evolve) Service Employees International Union (SEIU): Some reasons major backer of unions? |
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Definition
Public relations
o Looking for new members
o Many union contracts index wages to the minimum wage |
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Term
| (unions evolve) Service Employees International Union (SEIU): also trying to unionize more college faculty: Why? |
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Definition
o More use of adjuncts
o Target population agrees politically
o Public concern over cost of higher education
o Low bar for authorizing representation (<50%) |
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Term
| (unions evolve) Service Employees International Union (SEIU) players unionizing/ college athletes |
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Definition
• Northwestern football players tried (unsuccessfully)
o Issue: are college athletes university employees or not?
o NLRB refused to determine; did not get involved
• Bigger picture:
o NCAA?
• Supposed to represent the best interest of college athletes
• If they unionize, how does the NCAA fit in this picture?
o Type of representation: school-level or team-level?
o What to do about teams that lose money? |
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Term
|
Definition
| Service Employees International Union |
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Term
| (unions evolve) NCAA/ athletes unionizing |
|
Definition
• Supposed to represent the best interest of college athletes
• If they unionize, how does the NCAA fit in this picture?
o Type of representation: school-level or team-level?
o What to do about teams that lose money? |
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