States For Sale

States For Sale

Since Citizens United, corporate America has been pushing its agenda through state legislatures at record pace. To defeat this onslaught, we need to look closely at how it works.

Iowa Governor Terry Branstad speaking at the Iowa Growth & Opportunity Party in Des Moines, October 2015 (Gage Skidmore)

The One Percent Solution: How Corporations Are Remaking America One State at a Time
by Gordon Lafer
ILR Press, 2017, 272 pp.

I write this review sitting a few blocks away from the golden dome of the Iowa state capitol, under which newly elected GOP majorities are introducing a raft of bills slashing the minimum wage, union rights, and access to the ballot box that look similar, if not identical, to measures passed in many other Midwestern states over the past few years. Supported by Governor Terry Branstad, a GOP hard-liner, one of the Iowa legislature’s first moves in 2017 was to enact a slew of measures aimed at the state’s public unions. Those measures were modeled after Wisconsin’s controversial government employee reforms, which have decimated the Badger State’s public labor movement. For years, Iowan public unions could bargain with their employers over working conditions, rules about promotions and dismissals, and standard workplace concerns like health insurance and pensions. No longer. The new reform signed into law earlier this year bars most public unions from negotiating anything beyond wages with their employers (and even those wage increases are capped). Unions will now also have to comply with a number of costly and restrictive new regulations or face decertification. Close on the heels of that reform, Governor Branstad has now signed into law a bill stopping local governments from setting minimum wages higher than the statewide floor—clearly taking aim at liberal enclaves, like Iowa City, that sought to improve working conditions for their residents. That strategy of “preempting” local minimum wages is one that has been adopted by twenty-one other mostly GOP-controlled states since 2010.

What explains the hard-right turn across states like Iowa, Wisconsin, Indiana, North Carolina, Kansas, and Michigan? And why are lawmakers in those states pursuing conservative reforms from exactly the same playbook? These are the questions that University of Oregon labor scholar Gordon Lafer tackles in The One Percent Solution. Working “one state at a time,” Lafer argues that companies have aggressively lobbied legislatures to slash social benefits, privatize public services, undermine labor standards, and weaken unions across the public and private sectors.

Lafer traces the roots of the “one percent solution” to massive shifts in partisan control since the 2010 midterm elections. Heading into those races, Democrats held control of more than half of all state legislatures; that commanding lead was nearly halved after Election Day. In all, Republicans went into the following legislative session in full control of twenty states, while Democrats had legislative majorities and governorships in only eleven. The One Percent Solution attributes GOP gains in 2010 to the loosening of campaign finance limits after the landmark Citizens United Supreme Court decision. In Lafer’s estimation that ruling, which permitted companies to spend freely from their own coffers on elections, “ushered in a new legislative era.” Armed with those large legislative majorities and eager to reward their corporate benefactors, GOP lawmakers quickly enacted bill after bill written by powerful business lobbies.

Lafer’s focus on the states is important. He documents in persuasive detail that state and local governments are responsible for a range of policies directly affecting the lives of Americans. Can you get unemployment benefits if you are laid off? If you work in Wyoming, West Virginia, or Massachusetts, your odds are fairly good, with well over half of all unemployed workers in those states receiving such benefits. But if you have the misfortune of living in Washington, Tennessee, or Vermont, you might not be so lucky. Fewer than one in ten unemployed workers in these states claim jobless benefits. What about how easily your managers can steal your wages? In Massachusetts, New Mexico, and California, employers face steep legal obstacles to wage theft. In Louisiana, Mississippi, and Alabama, on the other hand, state laws barely protect workers whose managers refuse to pay them their legally earned wages. Does your state offer health insurance coverage to those living in poverty? Again, the answer varies by state: nineteen states have yet to expand their Medicaid programs as part of the Affordable Care Act, leaving nearly 3 million poor adults—disproportionately from racial and ethnic minorities—without access to health insurance. These are all decisions made by state and local elected officials—officials whose names most Americans do not even know. According to results from the 2016 Cooperative Congressional Election Study, around four in ten Americans said that they “weren’t sure” which party controlled either their state’s lower or upper chamber.

While depressing from the perspective of democratic representation, the lack of public scrutiny of state-level decisions is an appealing feature for the deep-pocketed corporate interests that Lafer describes in his book. Operating out of the spotlight that typically characterizes national politics, corporate-backed advocacy groups like the American Legislative Exchange Council (ALEC), Americans for Prosperity (AFP), and state Chambers of Commerce are free to pressure lawmakers into voting for their preferred measures. Indeed, in some cases the organizations Lafer describes have quite deliberately sought to keep their activities out of the public eye. The Iowa bill gutting public-sector collective bargaining, for instance, was rammed through the state legislature in a matter of days, with little time for public input or debate. In fact, the only representative confirmed present for the signing of the law was the state’s powerful head of Americans for Prosperity—the billionaire-backed organization that had lobbied for the legislation in the first place.

The One Percent Solution, then, brings into focus several important patterns in American politics. It emphasizes the growing relevance of the states as battlegrounds for wealthy and corporate interests to stymie expansions of social and economic rights and benefits for working Americans. It shows persuasively that those wealthy donors and businesses often encounter little resistance in their efforts. And the book also helps us to understand that we should see the hard-right economic reforms pursued in states like Iowa, Wisconsin, and Michigan not as one-off skirmishes, but rather as parts of a larger campaign waged across the country. The corporate lobbies that Lafer describes view each state as one piece of a broader strategy to retrench the role that the U.S. government has played in building the economic security and well-being of working Americans.

Yet even as The One Percent Solution starts to pull back the curtain on these lobbies—especially ALEC and AFP—Lafer’s analysis of cross-state advocacy is at once too broad and too narrow. The One Percent Solution is overly broad in that Lafer draws together very different groups representing different interests under the same banner of “corporate lobbies” without taking into account their variegated—and sometimes divergent—strategies and objectives. Lafer is also quick to label any bill that achieves business-friendly objectives as the product of corporate lobbying. But attributing influence in this manner sometimes obscures more than it reveals—bringing me to where the book is too narrow. If (nearly) everything is business lobbying, then nothing is. As a result, readers never get a specific explanation of what ALEC or AFP do to be so successful in pushing policy across the states. Nor do readers get an understanding of where these organizations came from, and what those origins imply for how proponents of better working standards and labor rights might organize a counter-mobilization of their own.

In The One Percent Solution’s first chapter, Lafer introduces the reader to the constellation of organizations that he will study in the rest of the book, which represent “a network of extremely wealthy individuals and corporations.” The full list includes the U.S. Chamber of Commerce, state Chambers of Commerce, the National Association of Manufacturers (NAM), the National Federation of Independent Business (NFIB), Americans for Prosperity, the State Policy Network (SPN), the Club for Growth, FreedomWorks, the Koch brothers, and above all, the American Legislative Exchange Council. By treating all of these groups as the same corporate lobby, much detail is lost about how these organizations actually operate. The U.S. Chamber, NAM, and NFIB are national trade groups ostensibly representing the interests of individual firms. AFP, on the other hand, is a conservative federated advocacy group run by the Koch brothers—individual businesses do not participate. The Club for Growth aggregates contributions from wealthy donors to elect anti-tax politicians. SPN, for its part, is a network not of individuals, but rather of state-focused conservative think tanks. And ALEC is an association not just of private-sector businesses—as Lafer emphasizes—but also of conservative activists and state lawmakers.

These are not merely academic distinctions. Take the striking story that Lafer uses to open the book. Lafer describes how Tennessee’s popular GOP governor, Bill Haslam, unveiled plans to expand his state’s Medicaid program to cover previously uninsured poor adults as part of the Affordable Care Act. Yet as soon as his plan was announced, Haslam was met with intense opposition from AFP. After weeks of a concerted campaign from AFP, Haslam backed down and Tennessee has yet to expand its Medicaid program. What Lafer leaves out of that story, however, was that the Medicaid expansion in Tennessee pitted AFP, as well as ALEC and SPN, against the state’s Chamber of Commerce and major hospital associations. The last two groups—as much of a corporate lobby as one can imagine—were going head-to-head against ALEC, SPN, and AFP. If we take The One Percent Solution’s approach and think about the troika of ALEC, SPN, and AFP as being part of the same corporate lobby as state Chambers of Commerce, then this civil war makes little sense.

If, instead, we recognize that AFP, SPN, and ALEC are not just corporate lobbies but rather coalitions of conservative activists, wealthy donors, and businesses, the picture becomes clearer. On some issues we ought to expect that business interests will dominate, explaining why ALEC has backed narrow provisions that benefit specific companies and industries—like promoting deregulation of the energy markets in the 1990s at the behest of Enron. But in other areas, conservatives will rule. That helps us to explain why ALEC and AFP have vehemently opposed the expansion of Medicaid as part of the health reform law, even going up against state business interests that recognize the strong economic case for new federal funding for hospitals and doctors. The picture that emerges from this richer perspective of groups like ALEC and AFP, then, is not of an unfailing and all-powerful lobby as in The One Percent Solution, but rather complicated and sometimes-fractured political coalitions.

That brings me to the second limitation of The One Percent Solution. Although Lafer says he will provide a “comprehensive account of . . . the nation’s biggest corporate lobbies,” the book focuses surprisingly little on the specific ways that groups like ALEC, SPN, or AFP are shaping legislation. We are told, for instance, that “corporate lobbyists have conducted vigorous battles” against paid sick leave or that states have attacked workplace standards “at the urging of corporate lobbyists.” But what does this mean in practice? Why were lawmakers in those specific states so attuned to the bills pushed by ALEC or AFP?

Lafer says that it is “simply not possible given data constraints” to identify “the conditions under which corporate-backed bills are most likely to be adopted.” That’s not entirely accurate. Using plagiarism detection methods more typically employed to detect lazy students, I have searched nearly all state legislation introduced or enacted from 1996 to 2013 to pinpoint cases where lawmakers copied their bills from ALEC models. That method revealed the exact moments where ALEC has been especially successful at turning its proposals into law—and also lets me look for the factors that best predict why legislators decide to copy and paste from ALEC model bills. Across all of the states I studied, one explanation stood out again and again, even independently of partisanship: lawmakers who had fewer staffers to rely upon and less time to consider legislation were substantially more likely to turn to ALEC. The simple fact is that in many states “citizen legislatures” are part-time, understaffed, and under-resourced. Lawmakers in those states need help coming up with ideas for bills, doing the research necessary to develop that legislation, and marshalling political support to enact the bill. Without resources of their own, lawmakers are all too willing to turn to ALEC. ALEC, in turn, has been more than happy to provide exactly those services to state legislators.

Understanding how and why groups like ALEC work helps to pin down specific cases where they have been successful at changing state policy and where they were not actually involved. And it also illuminates the ways that citizens and activists can resist conservative and corporate advocacy going forward. In the case of ALEC, for example, knowing that the group thrives on the under-staffed and part-time nature of many state legislatures means that progressive reformers ought to focus on bolstering the resources that state lawmakers can access. Giving lawmakers a raise (so that they have to spend less time in outside employment), increasing the length of legislative sessions (so that lawmakers can have more time to develop and study bills), and increasing staff help would all go far in reducing the appeal of ALEC, even to conservative and GOP lawmakers.

Even if we disagree on the exact nature of the conservative and corporate forces operating across the states, however, I believe Lafer is exactly right in summing up the net effect of their advocacy on social, economic, and political life. The deep cuts in valuable government programs, workplace protections, and union rights sought by the troika of ALEC, SPN, and AFP should be worrying for all Americans. These changes will exacerbate poverty, inequality, and economic insecurity. They also threaten the quality of our democracy. By limiting Americans’ abilities to express their collective voice through unions, advocacy from the right-wing troika undermines one of the few means of political representation possessed by rank-and-file workers.

Against that gloomy picture, the good news is that much of the conservative and corporate agenda recounted by The One Percent Solution is highly unpopular. Large majorities of adults, even Republicans, support efforts to take care of the environment, bolster social programs for families and children, improve our nation’s infrastructure, and expand labor rights, even union rights. The bad news is that opponents to the right-wing, business-friendly troika have been slow to mobilize counterweights of their own. The One Percent Solution should thus be a wake-up call to anyone concerned about the economic well-being of working Americans.

Alexander Hertel-Fernandez is assistant professor of international and public affairs at Columbia University. He is the author of the forthcoming book Politics at Work (Oxford University Press, 2018).

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