Our Progressive Vision: State and local governments play a powerful role in regional economies as employers and contractors. They can make or destroy jobs. They can also encourage the creation of stable, well-paying positions—or positions that leave workers’ families in poverty. A progressive government will: (1) ensure that the workers of both the government and its contractors are paid wages and benefits that support a decent standard of living; (2) guarantee that economic development subsidies are used sparingly and only to create middle-class jobs; and (3) operate with transparency and the highest ethical standards.
Government as employer
Most state and local governments encourage a “race to the bottom” system of hiring, meaning they pay their employees and the employees of government contractors as little as possible. But this makes no economic sense. Low-wage, low-benefit jobs don’t build the tax base, they drain it by forcing workers to rely upon taxpayer-funded programs, such as subsidized housing, health care, child care and school lunches. Public dollars should be spent to promote the public good. A progressive government accomplishes this by avoiding the privatization of government services unless there is a clear showing of substantial savings, paying a living wage, guaranteeing basic benefits like health insurance and earned sick leave, not accepting bids from contractors with a history of fraud, waste, abuse or illegal practices, and ensuring that contractors deliver what they’ve promised.
Progressive economic development
States and localities desperate for economic growth have typically allowed any company promising jobs to access economic development subsidies or other benefits, no matter how few or low-paying these jobs might be. All too often, development subsidies constitute little more than welfare for the rich. A progressive government reserves subsidies for development that fits a narrow and long-term strategy (e.g., a bio-tech cluster), requires the jobs to pay middle-class wages and benefits, and ensures that companies that receive subsidies and then fail to deliver on their promises must refund to the government some or all of the monies received.
Open and ethical government
A democracy cannot function properly unless its citizens know what policies are being considered by the government, hear the arguments being made from all sides, and have the opportunity for timely input on these matters. Similarly, a democracy does not function when decisions are based on any type of corruption or undue influence. Even the appearance of secrecy or impropriety can poison the public goodwill that is necessary for self-government. A good government, therefore, will have a vigorous open meetings law, a broad freedom of information act, as much online disclosure as possible, and tight restrictions on both direct and indirect gifts to public officials.
Restrictions on privatization
Since the Reagan era, state and local governments have been handing over a myriad of public functions to private corporations. The main argument for privatization is that it reduces costs. But this argument is rarely true, either because the contractor simply charges more than civil servants would cost or because the contractor pays such low wages that the employees and their families have to be supported by SNAP, Medicaid, Earned Income Tax Credits, and other programs. State and local governments should create a truly competitive bid process that does not assume outsourcing is always best.
Raising standards for firms receiving government support
Economic development subsidies, by definition, give special preference to one business over others. So when such subsidies are granted, they should meet a high standard for creating quality jobs that will provide long-term benefits to the community. The Job Creation and Job Quality Standards Act lays out minimum requirements for any kind of subsidy program. The Taxpayer Protection Act provides citizens with a money-back guarantee if a company, after receiving subsidies, fails to meet its promised economic development goals.
Job piracy cease-fire
It is not unusual for states, cities or counties to use economic development subsidies to lure businesses from neighboring jurisdictions, and this can degenerate into tit-for-tat job piracy. These government-against-government disputes hurt taxpayers and are unnecessary. The state of Missouri passed a law offering to stop subsidies to Kansas businesses along the border if Kansas does the same. This is a terrific model that could apply to either state or local governments.
Both state and local governments are realizing that online disclosure has become cheaper than ever and, once posted, it obviates the need for government workers to spend a lot of time satisfying document requests. Governments can and should disclose online: information about proposed laws and regulations; RFPs; contracts or subsidies granted; real estate, zoning and property-tax records; licenses and permits; and which government services are available and how to access them.