There's a Sexual-Harassment Epidemic on America’s Farms
Marlyn Perez had no choice but to take the job at C&C Agricultural Farms in Clewiston, Florida. She was new to farming, new to America, undocumented, and desperately in need of money.
Perez had just come from Guatemala. She had worked briefly at another farm in North Carolina, harvesting sweet potatoes, but when she got to C&C, a farm located in a remote area called Devil’s Garden, she “saw pretty quickly this was a different situation.” When she didn’t receive her full pay the first week, she went to the crew leader, Reyes Tapia-Ortiz, who told her he couldn’t do anything about it. “This is what I’m paying you. There’s no way to negotiate it differently,” she told me over the phone through a translator from the Coalition of Immokalee Workers (CIW), a farmworker-rights organization. Tapia-Ortiz could not be reached for comment.
The work was grueling, Perez and six other workers alleged in a 2014 lawsuit against Tapia-Ortiz, C&C, and the farm’s owners, Ernesto Ruben Cordero Jr. and Carlos Rodriguez. Ten- to 12-hour days with the threat of no pay from Tapia-Ortiz if they didn’t work the shifts he assigned, including those at night in the packinghouse and overtime, according to the lawsuit. No breaks except for a short pause for lunch, no bathroom nearby, no shelter from the Florida sun. Pesticides burned their eyes, according to the lawsuit, which also said the workers had limited access to food and water, and were instead charged $2.50 for beer and $1.50 for soda, as well as $7.00 for lunch by Tapia-Ortiz’s common-law wife. The workers were also charged for transportation to and from the farm by Tapia-Ortiz, $5 a day.
Perez told me that when she asked the owner about the pay situation, they said she had to figure it out with Tapia-Ortiz, who was a contractor hired to recruit laborers, and when she brought it up with him again he became angry. He told her she had no rights and no papers, so she shouldn’t complain.
Undocumented workers without papers and workers on temporary visas are extremely vulnerable to exploitation in the workplace. This exploitation takes many forms, including unfair labor practices, working without fair pay, and sexual harassment and assault. The agricultural industry in the United States is full of workers who are undocumented or on temporary work visas, people who are particularly vulnerable to exploitation. A report by Polaris, an anti-trafficking organization that runs the National Human Trafficking Hotline and the BeFree Textline, on the typology of modern slavery, found that 91 percent of the cases involving modern-day slavery in agriculture involved foreign nationals. The organization, which used data from the hotline and textline to generate the report, defines modern-day slavery as human-trafficking situations where workers are coerced, forced, or victims of fraud. Many of these workers are on “guest-worker” visas, or temporary work visas associated with an employment role, as is common with agriculture workers, who come on a visa called the H-2A. In another report, Polaris identified nearly 300 H-2A visa holders who had been potential victims of labor trafficking and exploitation in an 12-month period. Eighty-five percent of the victims worked in agriculture, with Florida being the state where the most cases were reported.
Perez kept pushing for what she believed she was owed. As the situation escalated, Tapia-Ortiz sexually harassed Perez, according to the lawsuit. In 2011, she says, he promised to pay her more if she had sex with him, grabbed her from behind, and fondled her breasts. In August, according to the lawsuit, she says when she rejected his advances and threatened to call the police, he threatened to get her deported. In the fall of 2011, according to the lawsuit, he made sexual advances while she was working in a secluded area among tall tomato plants. After she rejected him, he showed her his pistol in his waistband, she says. He would often wave a rifle or show the pistol to the workers to threaten them, according to the complaint. “Truly I did feel very intimidated and very fearful. I just arrived and I didn’t know anything about the laws or who to call or what I could say or how to say it,” Perez said to me.
One thing she did know: The money was not enough. According to the case, she was making on average $35 a day. (The gender pay gap exists even at the very bottom of the labor market—the men on the farm were making an average of $45, according to the lawsuit.) What she wasn’t spending on food or rent she was sending back home. “My family was really desperately in need of financial support and I was worried about them,” she said. She felt it was hard to bring it up with other workers because the crew manager was always lurking, and when she did ask about it the others repeated the same refrain: He has papers and you don’t, so there’s nothing you can do. She threatened to quit; he threatened to kill her if she did, she says. “I was really scared and felt like I couldn’t leave,” she said.
In recent months, stories of sexual harassment and assault have been flowing on a daily basis from the entertainment, media, and tech industries. But low-wage workers, who are disproportionately women of color, are extremely susceptible to harassment in the workplace, and their stories receive far less attention. According to data compiled by the Center for American Progress (CAP) from the U.S. Equal Employment Opportunity Commission (EEOC), more than one-quarter of sexual-harassment charges were filed in industries with large numbers of low-wage service-sector jobs. This is particularly stunning given that low-wage workers often have few other opportunities, and may not have much padding if they lose their jobs in response to filing a complaint. The analysis by CAP found that almost three-quarters of the harassment cases include an allegation of retaliation.
In a 2012 Human Rights Watch report, nearly all of the farmworkers interviewed said they had experienced sexual violence or harassment or knew someone who had. In 2010, a study found that of 150 Mexican women working in the Central Valley in California, 80 percent had experienced sexual harassment. “Eighty percent—that’s a pandemic,” Noelle Damico, from the National Economic and Social Rights Initiative, told me. After explosive allegations of sexual assault against the Hollywood mogul Harvey Weinstein, Alianza Nacional de Campesinas, an association of farmworker women, submitted a signed letter of solidarity with the women of Hollywood: “We wish that we could say we’re shocked to learn that this is such a pervasive problem in your industry. Sadly, we’re not surprised because it’s a reality we know far too well.”
“The history of agriculture in the U.S. always been one of sexual violence,” said Mónica Ramírez, the president of Alianza Nacional de Campesinas, who comes from a family of farmworkers. “On farms, conditions are ripe for it.”
“This entire industry was founded on a system of slaves, who were brought over and who suffered more greatly than we do even today, “ said Nely Rodriguez, a former farmworker who now is a senior staff member and leader of the Coalition of Immokalee Workers (CIW). “Those roots remain generation after generation,” she told me over the phone through a translator.
In the second half of the 19th century, on the heels of the Mexican–American War and the abolition of slavery, Mexican immigrants grew as a share of the American agricultural workforce. Tens of thousand of migrant workers traveled between the U.S. and Mexico with few restrictions.
In 1942, the U.S. and Mexico created the Bracero Program, which allowed for millions of Mexican men to come across the border for short-term work, predominantly in agriculture. Although the program has long been abolished, the modern guest-worker visas perpetuate the industry’s reliance on inexpensive, plentiful foreign labor in agriculture. The H-2A visa, a temporary work visa issued for seasonal agricultural work, offers limited protection to workers, creating a power dynamic that sets the stage for labor exploitation and sexual harassment. Recruitment is a major pressure point with this visa, which permits an employee to only work for a single employer. If a worker is unhappy and wants to quit, her only way out is to leave the country altogether. “The H-2A program is very difficult program because the employer has control,” Damico said. “When you put that much control in the hands of an employer the situation is ripe for exploitation, through it doesn’t mean it happens all the time.”
For agricultural workers who are totally undocumented, the situation is even worse. In 2010 the Southern Poverty Law Center interviewed 150 immigrant women who were undocumented or spent time as undocumented workers in agriculture and food-processing jobs; all of them said harassment was a problem, and the majority had experienced it. Like Perez, these workers often don’t know their rights and work in isolation. “They are in different parts of the country and don’t even know where they are. Particularly for a migrant relying on a crew leader or someone to literally drive them state to state,” Ramirez said. They are reliant on the job to meet their basic needs for food and shelter, and they don’t speak English, and often don’t speak Spanish, but an indigenous language, such as Mayan. “They can’t access information to be able to get help. We have this huge problem with the immigration system and individuals don’t have a pathways. Perpetrators use their migration status to victimize them.”
For Perez, relief came with a flyer for the Coalition of Immokalee Workers, given to her by a woman in a store. She called a hotline and two women came to her home. In April 2014, Perez and six of her co-workers at C&C Farms filed a federal lawsuit against the farm, its owners, and Tapia-Ortiz, alleging violations of four federal statutes, including the Trafficking Victims Protections Act, as well as various state-law claims. All seven workers were named only as John and Jane Does in the initial complaint because they feared for their safety.
In 2015, the workers settled with the farm and its owners—but not Tapia-Ortiz—for full payment of back wages plus an equal amount in damages (the total sum to be paid was not disclosed). The attorney who represented the farm and its owners declined to comment beyond confirming in an email that “the matter was resolved fairly to the mutual satisfaction of the parties without any liability admitted” by his clients. But although the farm and its owners did not admit liability, they agreed to change practices on the farm by hiring laborers directly instead of through contractors and implementing new policies in regard to sexual harassment, according to a press release issued by the law firm that represented the workers. The farm has since gone out of business.
Tapia-Ortiz, meanwhile, did not participate in the lawsuit. After being personally served with the complaint against him in April 2014, neither he nor any attorney representing him ever appeared in the case. In June 2016, the court awarded a default judgment against Tapia-Ortiz—a finding of liability based on his failure to appear—to the five workers who alleged that Tapia-Ortiz recruited them to the farm job. In February 2017 those five workers were awarded $3.5 million in damages from Tapia-Ortiz. The claim has yet to be paid, according to Susan French, the lawyer for the workers and the Coalition of Immokalee Workers.
There are signs of change in the industry. Organizations such as Alianza Nacional de Campesinas and the Coalition of Immokalee Workers have stepped in and pushed for important reforms and efforts within the industry. The Coalition of Immokalee Workers has developed the Fair Food Program to ensure major food suppliers purchased tomatoes from farms with good practices. It is a worker-developed partnership among farms, farmworkers, students, the faith community, and corporations. “We took deep experiential knowledge of what the issues are and turned that into a code of conduct and then went on to create all the necessary mechanisms to really change that power dynamic,” Rodriguez, the former farmworker and leader of the Coalition of Immokalee Workers, said.
Fair Food farms have a code of conduct and a series of mechanisms for workers to report sexual harassment and a monitoring system to make sure farms comply. The effort also leverages the power of large corporations to help individual farmworkers. There are 14 companies on board so far, including Walmart, McDonald’s, Subway, Whole Foods and Trader Joe’s. The system could be easily adapted to other industries, and CIW has already introduced it to dairy farms in Vermont. It represents hope for workers in an industry where, for generations, there’s been very little.
Trump Misunderstands Jay-Z and the Black Community
Capitalism has worked out really well for Jay-Z. So well, in fact, that he recently dedicated an entire song to promoting capitalism as a tool of black empowerment. But even with promises of lowered taxes, and financial incentives for the wealthy—things that a wealthy capitalist should in theory love— Sean “Jay-Z” Carter still doesn’t think that President Trump is doing that much good for the black community.
In an interview with the CNN* host Van Jones on Saturday, Jones brought up reports that Trump referred to a number of countries, including many in Africa, as “shithole countries” and then asked if it was okay for Trump to “say terrible things but put money in our pockets.” Carter unequivocally said no, adding “it’s not about money at the end of the day. Money doesn’t equate to happiness. It doesn’t. That’s missing the whole point.”
Trump took umbrage at the remarks, tweeting, “Somebody please inform Jay-Z that because of my policies, Black Unemployment has just been reported to be at the LOWEST RATE EVER RECORDED!” As I’ve written before, Trump touting the black unemployment rate ignores some crucial context about the economy: First, the black unemployment rate has been dropping for the past eight years. Trump has only been president for one of them. Second, even at 6.8 percent, the black unemployment rate remains nearly twice as high as that of whites.
Trump’s response to Carter confirms precisely what the rapper was trying to say in the first place—that the president fundamentally misunderstands the aims of the black capitalism and the needs of the black community. Jay-Z, and many before him, have espoused capitalism and economic empowerment as a means to an end: racial equality. Being rich is a secondary benefit to the power, stability, and peace of mind that money can provide in a country that has forced blacks into poverty and segregation.
The president seems to think that a record-low unemployment rate for black Americans is a demonstration of how much he—Donald Trump himself—is improving the lives of black Americans, despite the fact that there’s no evidence that the decline is the result of his policies or leadership. But black Americans still earn significantly less than their white counterparts, even with similar levels of education. Their wealth is still around 13 times less. They are more likely to live in poverty and in poor housing conditions. They are more likely to be imprisoned, seriously hampering their earning potential for the rest of their lives. Those are all issues that Trump’s policies don’t even begin to tackle. And that’s to say nothing of persistent inequalities in other critical areas such as health care, mortality, and police violence.
Trump has frequently been criticized for his misreading of black America. He has talked constantly and inaccurately about the plight of black people living in “inner cities.” He has misrepresented his level of support in the black community. His tweet referencing Jay-Z is just the latest in an ongoing pattern of publicly feuding with prominent black Americans who don’t support him. Again and again, Trump has displayed an inability to grasp the actual problems that black Americans must contend with, and the fact that his policies do virtually nothing to address them.
*This article previously stated that Van Jones is a host on MSNBC. He is a host on CNN. We regret the error.
Trump Declares America 'Open for Business'
President Trump told the world’s elite business leaders gathered in Davos that “America is open for business” as he tried to balance that message with the “America First” policies that he has put in place over the past year.
“The world is witnessing the resurgence of a strong and prosperous America,” Trump told the audience at the World Economic Forum. “There has never been a better time to hire, to build, to invest, and to grow in the United States.”
Trump, who campaigned for the presidency as a voice opposed to globalization and the global elites, is the first sitting American president to attend Davos since Bill Clinton in 2000. He told the audience that as president he “will always put America first,” but added “America first does not mean America alone. When the U.S grows, so does the world.”
The remarks, which were closely watched by an audience alarmed by what many in the global elite see as a U.S. retreat from the global trading system the country created, is at odds with the policies the Trump administration has enacted after the president took office in January 2017. Trump pulled the U.S. out of the Trans-Pacific Partnership, a Pacific region free-trade zone that included the region’s largest economies and was viewed as a counterweight to China’s growing influence in the region. Trump hasn’t hidden his disdain for the North American Free-Trade Agreement and has been ambiguous about whether the U.S. will stay in the agreement that also includes Canada and Mexico. Last week, he imposed tariffs on washing machines and solar panels made overseas, an action reminiscent of the trade wars of the 1980s. More such moves are expected.
The president says his actions are aimed solely at helping American workers; that the free-trade deals of the past hurt American workers more than it helped the U.S. economy; and that the tariffs were aimed at the advantage, in his view unfair, that countries like China and South Korea enjoyed in their dealings with the U.S.
“We will enforce our trade laws and restore integrity to the trading system,” Trump said Friday. “Only by insisting on fair and reciprocal trade can we create a system that works not just for the United States but for all nations.”
That might be the case, but the president’s rhetoric on trade and his seeming support for bilateral agreements over multilateral ones has alarmed other world leaders. Davos, which has been a cheerleading club for globalization, has seen much indirect criticism of the U.S. from its allies. German Chancellor Angela Merkel this week said unilateral solutions “would ultimately promote isolation and protectionism” and U.K. Prime Minister Theresa May said globalization had “delivered the greatest advances in prosperity we have ever known.”
Earlier this week, Trump said he was open to the U.S. re-entering the TPP if it was fairer to the U.S. It’s something he has said about NAFTA, as well, which the U.S. is renegotiating with the pact’s other signatories. It’s uncertain though whether the world will wait for the U.S. to re-engage with multilateral systems. Canadian Prime Minister Justin Trudeau said this week that his country would join the TPP without the U.S.—joining Australia, Japan, and other Pacific Rim nations.
But if the audience at Davos is concerned by Trump’s position on free trade, it appeared positively giddy at the president’s overhaul of the tax system. Introducing Trump on Friday, Klaus Schwab, the WEF’s founder, said the overhaul would stimulate economic growth in both the U.S. and the world. Trump, citing the economic gains made during his year in office—to the economy, to the stock market, and the unemployment rate, welcomed the world’s investors.
“America is the place to do business,” he said. “So come to America where you can innovate, create, and build.”
Organized Labor’s Growing Class Divide
Lately it seems that, every week, a new group of media employees votes to join a union. On Tuesday, a majority of employees at Slate voted to join the Writers Guild of America, East. This came a few days after newsroom employees of the Los Angeles Times voted to join the NewsGuild–Communications Workers of America. Two weeks before that Vox Media recognized the Writers Guild of America, East, as the union representative of their editorial and video staff.
These efforts are the latest in a slew of successful campaigns to unionize educated workers, not the traditional targets for labor organizers. In the past three years, employees of Vice Media, ThinkProgress, HuffPost, The Intercept, Salon, Thrillist, and the now-defunct Gawker have all joined unions. Graduate students at Columbia, Yale, Tufts, and Brandeis have also voted to join unions. Adjunct professors at Seattle University formed a union in 2016, and employees at the legal group Lambda Legal voted to form a union in December.
Labor advocates are declaring the wins for white-collar workers a new front for organizing, and indeed, labor has been making some progress in expanding its reach among educated workers. The number of people employed in professional and technical occupations who are members of unions grew by almost 90,000 last year, according to numbers released last week by the Bureau of Labor Statistics. The fields of law, arts, design, entertainment, sports, and media all saw substantial gains in the share of workers who are in unions, ticking up from around 4 percent in 2010 to around 7 in 2017.
But these gains for unions are in stark contrast to the many high-profile failed efforts to organize less-educated workers in other parts of the country, usually outside cities. In 2017, after years of organizing, the United Auto Workers lost a bid to form a union at a Nissan plant in Mississippi. They failed to organize a Chinese-owned auto-glass plant in Ohio in November. The UAW similarly lost a bid to organize a Volkswagen plant in Tennessee in 2014. On January 19, for example, the NLRB announced that media employees at the Los Angeles Times and professional employees at a Pennsylvania charter school each voted to join a union. That same day the NLRB announced that drivers at a bakery in New Jersey, drivers at a freight company in New York, and drivers for the Hy-Vee grocery chain in Iowa all voted against joining a union, according to NLRB data.
And while labor groups trying to organize low-wage workers in industries like fast food and the on-demand economy have made some gains in recent years, they have not created formal unions, but rather established informal arrangements that help workers. The share of workers who were members of unions in production, transportation, and material-moving occupations fell to 13.6 percent, from 16.2 percent in 2010, according to Bureau of Labor Statistics data. In service occupations, that share fell to 9.9 percent from 11 percent in 2010.
The contrast, between the growing numbers of educated workers joining unions and the shrinking pool of blue-collar workers doing so, is yet another dynamic of an increasingly bifurcated American economy. As jobs for educated workers continue to proliferate in this economy, educated workers feel secure, sure that they’ll be able to find more work if they lose their jobs. In some cases, that security may mean they feel they can advocate for a union, or stand up to employer threats to shut the workplace down if a union forms. Blue-collar workers, by contrast, are competing for a smaller and smaller share of jobs in the economy, and thus may feel less willing to commit to labor drives. Of the nearly 12 million jobs created after the recession, more than 8 million went to those with a bachelor’s degree, according to the Georgetown Center on Education and the Workforce. “Blue-collar workers may want a union, but fear defines union election to a troubling degree,” Harley Shaiken, a labor expert at the University of California, Berkeley, told me. “You have the same fear among white-collar workers, but they know they have other options. If they lose their job, they’ll have something two days later. That could give them more confidence about turning towards a union.”
This difference in who is joining unions could create further bifurcation in the economy, as workers who are already relatively stable become even more protected by unions, while workers who feel themselves in a tenuous position have fewer places to turn for problems like wage and hour violations, sexual-harassment claims, or unfair termination. Union employees are also better positioned to negotiate wage increases than non-union employees—non-union employees make 80 percent of what union employees do, according to the Bureau of Labor Statistics.
Lowell Peterson, the executive director of the Writers Guild, East, who has organized both blue-collar and white-collar workers in his career, said that organizing skilled workers might be easier in today’s economic climate. “If you’re a semiskilled or unskilled worker, your leverage is a little different,” he told me. Skilled employees are hard for employers to replace, and they know it, he said. While employers think they’ll be able to hire another worker off the street to stock shelves for Amazon or work on a car assembly line, they worry about being able to find enough skilled and educated workers to do the white-collar jobs they’re trying to fill. “[Managers in media] can’t just say, I don’t care who does this job, as long as someone does it,” Peterson said.
White-collar workers may also have an easier time doing the work to organize a union. Many Gothamist workers were young and didn’t have children, so were able to go to meetings after work, Scott Heins, 29, who worked full-time as a photographer and reporter for Gothamist for two years and was on the Gothamist organizing committee, told me. Blue-collar workers are often older, and have families to support. And, since white-collar employees don’t work on the factory floor all day, they are less physically exhausted at the end of the day. Additionally, the access to information technology that white-collar workers have can make it easier to communicate with other employees throughout the company.
Of course, white-collar workers still risk losing their jobs if a union forms—that’s what seems to have happened to 115 employees of DNAinfo and Gothamist, two websites owned by Joe Ricketts, a billionaire who founded TD Ameritrade, after 25 New York staff members voted to join the Writers Guild of America, East. But many of those employees have since found other jobs, and Peterson told me that the people who lost their jobs didn’t regret organizing. Heins told me that’s how he feels. “If forced into the same situation, I would do the same thing again,” he said. Heins said he and others knew the risks when they organized, especially when Ricketts, who is vocally anti-union, purchased Gothamist.
But Heins also landed on his feet. He is now working as a freelance photographer in New York, and said that it was going pretty well, in part because of support from groups like the Economic Hardship Reporting Project, which established a $5,000 fund to help laid-off reporters from Gothamist and DNAinfo. “I am very fortunate in that photography lends itself well to freelancing,” he told me.
In contrast to Heins’ ability to find work after losing his job, many blue-collar workers can’t afford to risk such a change. They are more likely to be living paycheck to paycheck, and tend to have less savings because their salaries are lower in the first place. “People were really terrified that they were going to lose their job,” Robert Hathorn, a pro-union worker at Nissan in Mississippi, told the website Labor Notes in the aftermath of the UAW’s organizing loss in August.
Part of the divergence between white- and blue-collar workers may also have to do with where union drives are taking place. Many white-collar workers live in big cities like New York and Los Angeles, where workers are likely to be more liberal and supportive of unions than in other places, and where owners (with obvious exceptions) may be less likely to embark on anti-union campaigns because of public pressure. But increasingly, manufacturing and production jobs are located in the South, where anti-union attitudes are most persistent. Boeing located its Dreamliner aircraft assembly line in South Carolina rather than Washington State to reduce the leverage of the machinists’ union, analysts told The New York Times. And the failure of the United Auto Workers to organize plants in Mississippi and Tennessee was closely related to anti-union attitudes there, as I found in previous reporting, attitudes that are less prevalent in automakers’ home turf of Michigan and Ohio.
Educated workers weren’t always as open to organizing campaigns. In the past, educated workers eschewed unions for two main reasons: They had negative opinions about unions, and they felt that they had enough of a voice in their jobs that they didn’t need union representation. Both of those factors have changed in the millennial generation, according to Ruth Milkman, a professor of sociology at the City University of New York Graduate Center. Today, 45 percent of Millennials think labor unions have a positive impact on the country, up from 32 percent in 2010, according to the Pew Research Center. That’s partly because Millennials are much more progressive than previous generations.
The current climate for media jobs may also be motivating some of the media-unionization drives, she said. While college-educated Millennials know that they can get all sorts of jobs in today’s booming economy, they are disappointed with the quality of the jobs in the media sector. “These are people who were led to expect that if they did their part, the world would be handed to them on a silver platter,” she told me. “And then they find that these are crummy jobs.”
Of course, thousands of blue-collar workers are also finding that the jobs available to them in today’s economy are crummy as well. But for them, the alternative to a crummy job—nothing—is even more terrifying.
More Taxes, Less Death?
Sugar is having a tobacco moment, not just here, but around the world.
Urbanization, falling poverty rates, and growing global trade have changed the diets and expanded the waistlines of the world’s poor, with processed food and sweetened drinks becoming household staples. Even very low-income communities are seeing rising rates of obesity, diabetes, cancer, and heart disease as a result. But many countries lack the tax revenue and medical infrastructure to treat such conditions, leading to a burgeoning global-health crisis. To tackle it, a new task force of well-known academics and advocates is encouraging developing nations to treat candy and soft drinks as many of them treat alcohol and cigarettes—and to tax them.
The idea might seem counterproductive, or even cruel. Cheap calories have contributed to falling rates of undernourishment and a reduced incidence of famine. Taxes increase costs, with a burden that falls most heavily on the most poor. And the relationship between added sugar and worse health is not a clear-as-day causal one. But promoting empty calories might be crueler, experts argue. “People say these taxes are regressive,” Lawrence Summers, a leader of the task force and a former Treasury secretary, told me. “But I say premature death is regressive.”
Summers is co-chairing the new coalition along with Michael Bloomberg, the former mayor of New York City and the current World Health Organization ambassador for noncommunicable diseases, an honorary position. Joining Summers and Bloomberg are, among others, Tabaré Vázquez, the president of Uruguay, Margaret Chan, the former director-general of the World Health Organization (WHO), and Nicola Sturgeon, the first minister of Scotland. The group of politicians, health experts, and economists plans to study fiscal measures that can improve public health and to urge lower-income countries to adopt them.
Its creation comes as international organizations and individual governments are increasingly worried about the prevalence and cost of lifestyle diseases. The rate of obesity has tripled in lower-income countries that have adopted Western diets and lifestyles, with doctors warning that the threat of diabetes has become pandemic. There are immense costs in terms of human suffering. And there are immense costs in terms of lost productivity, lost wages, increased health expenditures, and a smaller labor force. Five main noncommunicable medical conditions—cardiovascular disease, cancer, chronic respiratory disease, diabetes, and mental-health conditions—are estimated to cost China $27.8 trillion between 2012 and 2030, and India $6.2 trillion. The price tags will be in the millions and billions for many poorer countries as well.
“There’s a set of lower-income countries, like Bangladesh and Ethiopia and Myanmar, that will go in the span of 40 years from basically having no burden of noncommunicable diseases to having a similar burden as the United States or the United Kingdom. That’s three or four times as fast as high-income countries had to make that epidemiological transition,” said Thomas Bollyky, a global health expert at the Council on Foreign Relations, the New York–based think tank. “If you can’t slow this down and give countries time to adapt, they’re dealing with a problem coming four times as fast with a quarter of the resources.”
Some noncommunicable conditions might best be targeted with low-cost medical interventions: vaccines for HPV and hepatitis, inexpensive medicines for people with hypertension. For others, taxes might be part of the answer. “For the first time in the history of the world, more people are having their health affected by eating too much, rather that too little. That’s a sea change for humanity,” Summers said, adding, “It’s going to be a while before the developing world is able to afford open-heart surgery on a massive scale. Fiscal measures are super-efficacious, both because prices matter particularly for younger and poorer people and because taxes are educative.”
Taxes do have a clear record of curbing the consumption of, and thus the public-health impact of, tobacco and alcohol. The WHO estimates that raising excise taxes on cigarettes by $1 per pack would push up the cost of cigarettes by an average of 63 percent in low-income countries. After such an increase, projections indicate, the prevalence of daily cigarette smoking among adults would fall from 14.1 percent to 12.9 percent, leading to 15 million fewer smoking-attributable deaths. The group argues that “tobacco-tax increases are the single most effective policy to reduce tobacco use.”
Studies are similarly clear about the effect of alcohol taxes, if fewer countries have them as an explicit public-health policy. “Nearly all studies, including those with different study designs, found that there was an inverse relationship between the tax or price of alcohol and indices of excessive drinking or alcohol-related health outcomes,” one survey published in the American Journal of Preventive Medicine found. Making alcohol more expensive does not just cut down on rates of cirrhosis and cancer, researchers have learned, but also reduces the incidence of car crashes, suicides, domestic violence, workplace accidents, house fires, and so on. At the same time as these kinds of vice taxes reduce the consumption of dangerous products, they boost government coffers—providing a potential revenue stream for health spending.
Then there is sugar. “Sugar is where tobacco was in 1972,” Summers told me. “The equivalent of the surgeon general’s report has been written, but there has not been much that has happened yet to reduce demand.” He was gesturing to a growing body of studies showing that taxing sugar leads to reduced consumption—with a potential knock-on effect on obesity rates and health expenditures. Perhaps the best evidence comes from Mexico, which instituted a one-peso tax on every liter of sugar-sweetened beverages back in 2014, leading to a 5.5 percent drop in consumption in the first year and 9.7 percent in the second year.
“These taxes help, and the people who consume the most are most affected,” said Barry Popkin, an economist and nutrition expert at the University of North Carolina, who studied the effect of the sugar tax in Mexico. He said that while the burden of the tax might have hit lower-income people the hardest, the benefits might help them the most, too. “The poor do pay more, but they’re the ones who can’t afford health care. They’re not being treated much at all in terms of chronic disease—diabetes is not something you can treat cheaply.” He added that the study did not show that Mexicans facing higher prices for soda and sports drinks seemed to shift their calories into other kinds of junk food.
Still, not all research shows such promising results—nor is it clear that sugar taxes will lead to less consumption, and thus to lower rates of obesity, and thus to a lower incidence of noncommunicable disease, and thus to reduced long-term public-health spending, in part because such tax initiatives have not been around long enough to know. “Studies looking at the effect of actual soda taxes implemented at the state level find that, while the taxes do lead to a moderate decrease in soda consumption, the net effect on obesity is next to zero,” reads one review of the literature in the United States.
Moreover, critics have questioned whether such policies are fair—pumping up prices for the poor with a questionable benefit for public health. Others oppose them on the grounds that they are paternalistic and interfere with free markets. “Individuals’ decisions about what risks they are willing to take and how much they are willing to trade pleasure for diminished health are incredibly personal and should not be overly politicized,” argues Peter Van Dorn of the Cato Institute, the libertarian think tank. Plus, junk-food and soda taxes are often unpopular, raising the ire of grocery stores and food producers, along with citizens themselves.
In spite of all that, many countries have moved in recent years to use taxes to try to improve their citizens’ diets and cut down on health costs. Thailand recently instituted a tax on sugary beverages, with Hungary putting one on junk food and Vanuatu putting in place significant import restrictions. That should provide more data on the efficacy of such measures, and the best way to design them.
If they work, the impact on public health could be considerable, in terms of lower costs and higher revenue. “You’re also seeing massive demographic changes in these countries,” Bollyky said. “It isn’t that people in developing countries have grown fat and lazy and intemperate in their habits, and now they have these health conditions. It’s because of fairly dramatic shifts in their populations as well as in lifestyles, and their health systems need time to accommodate them. They’re having to do it faster than we did and with fewer resources.”
The United States might stand to implement more vice taxes too, Summers added. “This is some of the lowest-hanging fruit for potential policy improvement.”
The CFPB’s New Mission
Since the day in late November when he showed up at the Consumer Financial Protection Bureau, doughnuts in hand, Mick Mulvaney has said that things were going to change. For almost two months, the acting director appointed by Trump has implemented seemingly small, but important, shifts that indicate what the bureau will look like in the years ahead. In a memo to bureau staff made public by ProPublica, Mulvaney finally laid out his vision for the agency: a government entity that doesn’t “push the envelope.”
In an email to the bureau’s staff, Mulvaney said that he had been struggling to come up with a central thesis for how exactly the agency would change. Mulvaney wrote that the philosophy of the previous director, Richard Cordray, was “to aggressively ‘push the envelope’ in pursuit of the ‘mission;’ that we were the ‘good guys’ and the ‘new sheriff in town,’ out to fight the ‘bad guys.’” The acting director then declared, “That is what is going to be different.”
Mulvaney went on to say the “entire governing philosophy of pushing the envelope frightens me a little ... it’s not appropriate for any government entity to ‘push the envelope.’” The acting director described concerns that the bureau would overstep and create long-lasting damage to individuals, reputations, and businesses. What will this new philosophy look like in practice? Mulvaney vowed to only pursue lawsuits if evidence of “quantifiable and unavoidable harm” is found. And the agency will rely more heavily on its rulemaking efforts as the engine of change, instead of enforcement, meaning that the bureau won’t focus on fines or lawsuits to cull bad behavior. Instead, the CFPB will primarily look to the creation and implementation of new rules, in hopes of changing dangerous practices—a process that is less punitive and more time-consuming.
This memo is in line with the plan that Mulvaney has already started enacting. In the nearly two months that Mulvaney has been at the helm of the bureau, he has instituted policies that have pulled back on the agency’s rulemaking, enforcement, and collection of personal data. According to Nick Bourke, the director of the consumer-finance project at the Pew Charitable Trusts, this strikes at some of the key areas of success for the bureau. “Enforcement has been the biggest impact the CFPB has had so far,” Bourke told me during an interview in November. And thus far, the implementations of new rules for prepaid cards, payday lenders, and mandatory arbitration clauses—all considered big victories for the bureau—have been slowed or killed since Mulvaney took on leadership of the bureau.
The process of paring back the scope of the bureau’s enforcement efforts is already underway, and already questions have been raised about Mulvaney’s close relationships with some of the entities that he is now in charge of regulating. On Monday, Mulvaney shuttered an investigation of World Acceptance Corporation, a small-dollar loan operation from his home state of South Carolina that contributed an estimated $4,500 to his political campaigns over a three-year period. Earlier this month, Mulvaney dropped a lawsuit against a group of payday lenders in Kansas accused of misleading customers and charging interest as high as 950 percent. Campaign donation records show between 2012 and 2016, Mulvaney received contributions totaling more than $60,000 from groups in the payday-lending industry.
This new trajectory of the agency will almost certainly ruffle longtime advocates of the bureau and supporters of its work under Cordray. Many have feared that Mulvaney, who has been a vocal critic of the CFPB, would shut down the agency, or, short of that, gut it from the inside. Tuesday’s memo didn’t exactly assuage those concerns. “When I arrived at the CFPB, I told folks that despite what they might have heard, I had no intention of shutting down the Bureau,” Mulvaney writes. “Indeed, the law doesn’t allow that.”
In January, the acting director asked the Federal Reserve to refrain from giving the agency any money for the second quarter of 2018, saying that instead, the bureau could use some of the $177 million reserve fund accrued during Cordray’s tenure to operate. “The request—or lack thereof—will serve to reduce the federal deficit by the amount that the Bureau might have requested under different leadership,” Mulvaney wrote.
With a new mission for the bureau articulated, Mulvaney has cemented the Trump administration’s vision of the CFPB: a smaller, quieter, and less active financial regulator—one that looks a lot more like the regulators of the pre-recession era.
Source: http://www.theatlantic.com/business/