Economic Inequality

  • July 5, 2017

    by Kaiya Lyons

    At the 2017 ACS National Convention, Professor William Yeomans concluded the breakout panel on whether to serve in an unfriendly administration by emphasizing to the room of current, former and aspiring government lawyers that public service “really is a lawyer’s highest calling.” But for too many law students, the choice to pursue that higher calling comes at a high price, as student loan debt continues to rise well beyond most public interest wages. Later in the day, ACS Board member David Frederick had a simple solution—“make law school less expensive.”

    During the “Progressive Federalism” plenary, Frederick declared that massive student loan debt is the “number one impediment to law students going out and doing public service jobs.” To support his assertion, Frederick pointed to the time-honored tradition of public interest-minded grads spending two to three years in BigLaw to pay down their student loans before entering public service. Frederick explained that, instead of starting in public service, “law students are often forced into corporate law firms” for years to pay off their loans, a practice he characterized as a type of “indentured servitude.” While this image sparked laughter and jokes from the other panelists, Frederick maintained the veracity of his comparison and went on to stress that legal education must be more affordable in order for young lawyers to pursue public interest.

    Forgiveness in Exchange for Services Rendered

    However, much to our collective disappointment, law school tuition hikes show no signs of decreasing, nor does a decrease in tuition rates seem likely. Therefore, law students and recent grads have two options: (1) take the tried-and-true path of their predecessors and enter the corporate sector for a few years with the hope that they will be able to move into the public sector later, or (2) take advantage of the government’s Public Service Loan Forgiveness program and be able to work in public interest law immediately after graduation and have their debt erased after ten years.

  • May 30, 2017
    Guest Post

    *This piece is part of the ACSblog Symposium: 2017 ACS National Convention. The symposium will consider topics featured at the three day convention, scheduled for June 8-10, 2017. Learn more about the Convention here

    by Brishen Rogers, Associate Professor of Law, Temple University Beasley School of Law and Visiting Professor, Spring 2017, Washington University in St. Louis and European University Institute, Florence Italy

    The rise of platform economy firms such as Uber, Lyft and TaskRabbit have drawn public attention to the fact that more and more workers today are financially insecure, lack even basic statutory employment rights and have little or no job security. While this public attention is welcome, these issues are not new.  They are rooted in the long-running shift of power in the economy away from workers and unions and toward large corporations and financial firms. 

    Take the fissuring of employment. This has resulted from a set of conscious choices to reorganize firms or production strategies so as to economize on labor costs. And the incentives to take such steps have increased dramatically in recent years. An individual commercial building owner with only a bank mortgage to service may be perfectly happy to collect marginally lower profits in exchange for a harmonious relationship with her janitors and security guards. A real estate investment trust with dozens or hundreds of buildings and external shareholders has different priorities, and may seek to keep wages down or — failing that — to outsource and de-unionize the workforce. 

    Many low-wage sectors have such dynamics today, particularly where firms have few options to enhance labor productivity. This is the case in logistics (where FedEx drivers and warehouse workers in Walmart’s supply chain are often independent contractors or temps); in fast food (where workers are often employed by McDonalds and Burger King franchisees rather than parent companies); in hospitality (where individual Marriotts and Hiltons are independently operated, sometimes with subcontracted services); and of course in the platform economy, where Uber drivers and Handy workers are misclassified as independent contractors. 

  • May 2, 2017
    Guest Post

    *This piece originally appeared on StateAG.org.  

    by James Tierney, Former Maine Attorney General and Lecturer in Law at Columbia Law School

    In a letter sent last week, 21 state attorneys general and the Office of Consumer Protection of Hawaii urged Secretary of Education Betsy DeVos to immediately reconsider “the Department of Education’s revocation of critical student loan service reforms.” The policy and guidance memoranda withdrawn by the Department addressed industry-wide procedures by student loan servicing companies that were the subject of investigations and enforcement actions by the Illinois and Washington state attorneys general, among others.

    The April 24 letter highlights some of the industry practices that contributed to more than a quarter of borrowers being delinquent or in default on a student loan, according to a report by the Consumer Financial Protection Bureau (CFPB):

    “In its 2015 report, the CFPB identified troubling student loan servicer practices – including paperwork processing errors and failure to provide accurate information – that discourage the use of income-driven repayment plans. By reforming service incentives and strengthening consumer protections, the rescinded guidance sought to eliminate the loan servicing failures that keep borrowers from entering affordable repayment plans.” — April 24 letter from 21 state attorneys general to Department of Education

    According to Forbes, 44 million borrowers owe approximately $1.3 trillion in student loan debt, making it the second-largest type of consumer debt behind mortgages.

  • April 27, 2017
    Guest Post

    *This piece is part of the ACSblog Symposium: 2017 ACS National Convention. The symposium will consider topics featured at the three day convention, scheduled for June 8-10, 2017. Learn more about the Convention here

    by Orly Lobel, Professor of Law, University of San Diego School of Law

    I am pleased to be a speaker at the ACS 2017 National Convention, which takes place in June 8-10 in Washington D.C. My talk, which will be part of a panel discussion entitled A Second Gilded Age? The Consolidation of Wealth and Fracturing of Employment, will bring together several lines in my research: the gig economy, platform regulation and governance, human capital, intellectual property and antitrust law. In April 2016, I had the honor to deliver the 12th Annual Pemberton Lecture at the 9th Circuit Court of Appeals. I delivered a paper called The Gig Economy and the Future of Employment and Labor Law, which was later published in the USF Law Review and can be read here. I ask: What is the future of employment and labor law protections when reality is rapidly transforming the ways we work? What is the status of gig work and what are the rights as well as duties of gig workers? I propose four paths for systematic reform, where each path is complementary rather than mutually exclusive to the others.

  • April 11, 2017
    Guest Post

    *This piece is part of the ACSblog symposium: "The Future of the U.S. Constitution

    by Walter Dellinger, ACS Board of Advisors Member, Douglas B. Maggs Professor Emeritus of Law, Duke University School of Law and Dawn Johnsen, ACS Board of Advisors Member and Walter W. Foskett Professor of Law, Indiana University Maurer School of Law

    America’s increasing economic inequality threatens our liberal democracy. Economic inequality translates into political inequality and corrodes our democratic institutions and the viability of our Constitution. Ganesh Sitaraman describes these threats in his excellent new book, The Crisis of the Middle Class Constitution: Why Economic Inequality Threatens Our Republic. We need urgently to find innovative tools to counter the erosion of our foundational, shared belief in opportunity and fairness, the American Dream.

    It is time to begin a serious national debate about the wisdom and constitutionality of a federal tax on wealth – an annual tax of a small percentage of an individual taxpayer’s net worth in excess of some large minimum. Just for example:  a 1 percent annual tax on wealth in excess of 10 million dollars, which would affect less than 1 percent of Americans. We leave the details to those skilled in economic and tax policy. Nor do we have in mind the short-term political viability of such a tax in the current Congress – though we will note that in 1999 Donald Trump suggested a one-time 14.25 percent tax on net worth in excess of 10 million dollars.