Monday, April 28, 2008

Lens of "constrained choice" can foster new policy options

A new book by RAND sociologist Chloe Bird and Harvard sociologist Patricia Rieker presents a fresh way of viewing individual choices about health that could provide a useful way of examining a range of social policy issues. In their book Gender and Health: The Effects of Constrained Choices and Social Policies, a model of “constrained choice” reveals how family, work, community and government shape individuals’ opportunities, thus constraining their choices.

The constrained choice model shows how policy decisions can have unintended effects on individual behavior. Thus, traits like health are not only an individual responsibility, but one that is also shared by decision-makers at each level of social policy, community actions, work and family. The researchers’ examples show that constrained choice related to health can result from:
  • National-level social policies that focus on the needs of women and children over those of men

  • Community decisions about neighborhoods that limit opportunities for walking and exercise

  • Workplace actions that limit employees’ autonomy over their work and schedule

  • Health research that overlooks the consequences of the growing complexity of balancing work and family.
With their focus on gender and health, Bird and Rieker use the constrained choice model to answer the question, “Why are some women and men able to create and maintain healthy lifestyles, while others are not?” This model, however, could be applied to other policy areas in which it is helpful to view outcomes as resulting from a web of complex inputs rather than solely individual decision-making.

For instance, the answer to a policy-related question like, “Why don’t all people stay in school so they will earn more money in the long-run?” is not, simply, that some people are irrational decision-makers. Rather, such an answer might be seen more clearly through a lens that analyzes the constraints on the choices of the decision-maker that are created by social/government policy, community and family factors.

A constrained choice lens changes the way one searches for policy solutions. While the goal of policy reform would be the same (a healthy society, for example, or increased high school graduation rates), the route to creating policy interventions would have to include questioning whether other policies create unintended negative consequences or disincentives. Additionally, interventions would seek to increase opportunities for people to pursue the positive action in question, thus loosening the constraints on their choices and decision-making.

Individual responsibility’s importance cannot be underestimated, but models that reflect the complex forces that impact decision-making could yield new strategies for addressing social policy problems.

Thursday, April 24, 2008

Smoking ban research: policy kills

A recent issue of The Economist includes a small blurb on new research published in the Journal of Public Economics by two Wisconsin economists. Scott Adams, of UWM, and Chad Cotti, of UW-Oshkosh, have found that when public smoking bans are implemented at the county level, drunk driving fatalities in adjacent counties can rise. Presumably, this is due to smokers no longer patronizing local establishments and driving to and from bars in the counties that have not prohibited public smoking.

For instance, they found that when Colorado's Boulder County banned smoking, fatal accidents in Jefferson County, between Boulder and Denver, went up by 40%.

Smoking ban opponents will find this research useful in arguing that the ban's benefits may not be outweighed by its other impacts. Smoking ban proponents may use the findings to argue that a statewide ban is the most appropriate, so as to reduce the potential for cross-county drunk-driving by smokers.

However, the economists also looked at statewide bans, finding, for instance, that accidents increased 26% in Pennsylvania's Delaware County after the neighboring state of Delaware introduced a smoking ban in 2002.

However, it's unclear which way this finding cuts for Wisconsin, as our neighbors Minnesota and Illinois both have new smoking bans in effect this year, while Iowa's goes into effect soon. Would a statewide smoking ban endanger our citizens on the road, forcing them to drive to Michigan's Upper Peninsula? Or, without a statewide ban are we (at least in our southern and western border counties) about to see an influx of intoxicated drivers from the Twin Cities and Chicagoland?

Tuesday, April 22, 2008

Impacts of Increasing Jail Populations Often Overlooked

A report released this month by the Justice Policy Institute speaks to the rapid growth in jail populations across the country and the impacts on taxpayers and communities. This is not just the typical report arguing that "lock-em-up" policies are expensive; instead, this one focuses on the distinction between those held in jails and in prisons, including fiscal considerations that are directly relevant to Wisconsin.

Many are unaware of the distinction between jails and prisons, but from the perspective of local property taxpayers, it's an important one. Jails, which are typically administered by county governments, once were reserved specifically for defendants awaiting trial or those receiving very short sentences. Today, county jails also have become receptacles for overcrowded state prisons, and they themselves have become overcrowded with individuals with substance abuse problems and/or mental illness, the result of de-institutionalization policies and tougher penalties on drug use.

The report's primary statistical point is that the jail population nationwide is increasing at a much faster rate than prisons and driving overall increases in incarceration. It notes that 10% of those held in jails nationwide were actually sentenced to prison; that 25% of those in jail are held on drug crimes; and that a staggering 60% suffer from mental health problems.

Numerous concerns are raised by this data, not the least of which is that jails are not funded or otherwise well equipped to handle people with physical or mental health issues. As the report notes, however, there is also a significant fiscal concern for local taxpayers:
"Jail incarceration is an expensive proposition for counties, with hidden financial costs...When small counties cannot manage an overcrowded jail properly, they can face multimillion-dollar lawsuits over poor conditions—lawsuits whose judgments create more fiscal obligations that the community must shoulder...Even when counties try to offset costs by leasing jail beds to the state or federal government, some communities are still awaiting the cash windfall. Several communities have been stuck with million-dollar tabs because they must pay for jail beds they do not need even as state and federal contracts vanish."
Interestingly, both of those concerns are playing out in Milwaukee. As the Journal Sentinel has reported, the County is being sued for violating a decree on overcrowding by allegedly holding dozens of people in jail holding areas for more than 30 hours in 2003. A January court ruling -- now under appeal -- ordered the County to pay individual compensation to inmates for physical and emotional suffering, a proposition that could have significant implications on the County's already dire fiscal situation.

Meanwhile, the County's Jail and House of Correction now house hundreds of federal and state inmates for whom no room exists in overcrowded prisons. This year's county budget ups the number of state inmates by 192, which seemingly produces needed revenue for the county, but which makes it vulnerable to the whims of state corrections officials, who have been known to abruptly pull out of such contracts.

As Milwaukee County struggles to properly maintain its parks and cultural institutions, run its transit system, and provide an appropriate safety net for the poor, the fiscal impacts of its growing corrections budgets often get overlooked. In 2008, property taxpayers will provide $96.6 million to fund detention activities in the Sheriff's budget and the House of Correction, which amounts to 39% of the total county property tax levy. That is up from $80.2 million in 2004.

To their credit, Milwaukee law enforcement, judicial and political leaders have formed a Community Justice Council to grapple with a variety of issues facing the criminal justice system, including those that are impacting corrections populations. From the perspective of local property taxpayers and those concerned with the County's ability to fund its "quality of life functions", there is a lot riding on their success.

Monday, April 21, 2008

Lake Michigan wind could power Milwaukee

As recently reported in the Daily Reporter, the Washington Post, and Jim Rowen's The Political Environment blog - the Public Service Commission of Wisconsin has initiated a study "assessing the wind power generation potential of the Great Lakes."

Offshore wind farms are not the stuff of science fiction. In fact, I see them twice a year when I fly into Copenhagen, Denmark to visit my girlfriend's family. From the air they look like tiny white specks set against a giant blue canvass. From land, they look much the same. For those who dislike the idea of huge turbines obstructing their lake views, the fact that from the shore such turbines are nearly invisible might be a relief.

A group by the name of Radial Wind plans to erect 390 turbines in the water's of Lake Michigan. The group's website, freshly posted in 2008, claims that "Radial Wind Farm will be the largest supply of offshore wind energy in the world" generating 1,950 megawatts of electricity for customers in Wisconsin, Illinois, Indiana, and Michigan (for context, Wisconsin's largest wind farm currently under development measures will produce 145 megawatts). The Radial Wind Farm would be located in the Mid-Lake Plateau region of Lake Michigan - a former island in the middle of Lake Michigan which lies directly east of Milwaukee at "at depths less than 90 meters and extends upward to minimum depths of 40-60 meters at three localities." Again, according to the website, the nearest turbine to Wisconsin's coast would be approximately 18 miles east of Milwaukee. That would be far enough away to be invisible to onlookers from the Milwaukee shore. It should be noted that the Radial Wind project has yet to be formally proposed or publicly vetted.

One inherent advantage to turbine siting on lakes versus on land is the fact that smooth lake surfaces fuel steady winds. A 2004 report entitled, "Lake Michigan Offshore Wind Resource Assessment," which was partially funded by Wisconsin's Focus on Energy program, found the Mid-Lake Plateau region to be an "excellent offshore wind resource" with steady 20mph winds and the energy potential of the site "in excess of 10,000 megawatts."

Tapping Lake Michigan's wind energy could be one way for the Milwaukee region to bolster its economic competitiveness. With "green" quickly replacing "silicon" as the holy-grail of economic development, such a vast well of untapped clean energy would seem to be a priceless commodity in a low-carbon future. The role that this could play in recruiting industry and business could be substantial if businesses are able to offset carbon emissions with carbon-credits from their consumption of clean energy derived from Milwaukee wind. Of course, the flip-side of this argument is that clean energy could lure "dirty" industries not unlike the 2003 decision by Alcoa to construct a $1.1 billion aluminum smelter in pristine, carbon-free, Iceland. Beyond recruitment, the construction of such a large offshore wind farm could spur job-creation in Wisconsin's nascent wind manufacturing industry (Tower Tech Systems, Magnetek, Cooper Power Systems, and American Superconductor).

The technology to erect wind turbines in the relatively deep waters of Lake Michigan's Mid-Lake Plateau has yet to arrive. However, developers seem to believe that this is both a money-making and environmentally friendly proposition. Will Wisconsin citizens and government regulators agree?
Update: Since the posting of this blog, an article covering the above story has appeared on the front page of the Milwaukee Journal Sentinel.

Wednesday, April 16, 2008

Worth the risk for some female small business owners

The Women’s Initiative for Self-Employment, a nonprofit program in California that helps low-income women start their own businesses, presented findings at this month's Summit on Economic Justice for Women in Atlanta showing microenterprise to be a successful strategy for increasing household income and wealth.

It seems that starting a small business would be even riskier for low-income women with no prior business experience, but some evidence shows the growth in business equity could be a worthwhile strategy to break the cycle of intergenerational poverty.

While many anti-poverty efforts focus on increasing income, emphasis on building asset ownership and wealth could prevent "asset poverty" and provide a safety net for long-term self-sufficiency. Business ownerhip is an important route to increasing assets: as a share of overall household wealth, business equity ranks second to homeownership.

Research cited by the Small Business Association is grim, showing that over half of new small businesses do not survive four years. Despite the risky environment, Women’s Initiative clients, all of whom are low-income at program entry and 78% of whom are women of color, are doing well. Seventy percent of program graduates are in business within a year of training, and 133 graduates report businesses grossing a combined $2.9 million, with net profits of $1.3 million. Annual household income for participants entering the business training program is just $14,000, but two years after training, average income is $37,000.

One key to the Women’s Initiative’s success may be cultural competency. Training is available in Spanish, and with microenterprise, it may be easier than in a traditional corporation to maximize cultural ties as an asset rather than a barrier. For instance, women of color may choose to start businesses that relate to their cultural backgrounds or feature their non-English language skills (46 percent of Women's Initiative clients are Spanish-speaking).

Minority groups in the U.S. have larger shares of women business owners, including 31 percent of Asian American and 46 percent of African American business owners. The Women’s Initiative organization found the greatest gains from their intervention for women of color, especially from Latina clients whom, as a group, tended to begin the program in debt with an average net worth of -$5,684. African American clients reported the greatest average absolute growth in business equity, while Latinas saw the largest relative gains in business equity, growing over 300%, and the largest gains in average overall household wealth. Rates of home ownership (a key marker of asset wealth) increased most rapidly for Latina clients as well, growing from 11 percent before training to 32 percent after participation.

Nationally, women own 28 percent of non-farm U.S. firms. Only 14 percent of these firms employ workers, and almost 80 percent had receipts totaling less than $50,000 in 2002. While those dollar figures are small, Wisconsin's 104,200 women-owned small businesses generated a substantial $17.6 billion in revenue in 2002, the latest year available. A 2004 study showed that Wisconsin is a good place for African American women entrepreneurs. Wisconsin ranked among the top states in survival and employment of businesses owned by African American women. Female business owners in Wisconsin receive support from the Wisconsin Women's Business Initiative Corporation.

Some skepticism about microenterprise as a route to wealth may still be warranted, given that many Women’s Initiative clients created their ventures in fields with traditionally low profits, such as child care, housekeeping, and food service. The fact remains that female-dominated professions like child care and housekeeping tend to be less lucrative than, say, defense contracting, or financial trading. Following Women’s Initiative training, nearly 17 percent of clients still lacked health insurance, though that share is fairly low for a recently-low-income group.

While microenterprise efforts might not lead women to head firms in traditionally male-dominated, highest-net-worth arenas, low-income women can make impressive leaps in assets in the risky small business ownership environment.

Tuesday, April 15, 2008

Milwaukee's mortgages compare favorably

Sometimes a picture is worth...well, you know. The New York Times recently had a graphic mapping the subprime mortgage foreclosure crisis nationally, using data from major metropolitan areas. The map indicates Milwaukee isn't experiencing the crisis to the extent of many of our neighbors.

What it shows (in less than a thousand words) is that in metro Minneapolis/St. Paul, between 9% and 12% of all mortgages are subprime mortgages, and of those, 17.1% are in foreclosure. It's worse in metro Detroit, where over 15% of all mortgages are subprime and 20.6% of the subprime mortgages are in foreclosure.

The map indicates that in Wisconsin, metro Green Bay has been hit the hardest, with 12.8% of subprime mortgages in foreclosure, although less than 9% of the total mortgage market in Green Bay is subprime.

Reasons southeastern Wisconsin may weather the subprime crisis: The two accompanying maps show we were below the national average in new housing construction from 2004 to 2007 and had a lower unemployment rate than the national average during the same period.

Wednesday, April 9, 2008

PPF Pearls: Federal health funds not a shot-in-the-arm for Wisconsin

A report released this week confirms yet again that our state receives far fewer federal dollars than the average state.

This time the Trust for America's Health analyzed funds from three federal health agencies and found Wisconsin ranks 45th in terms of per capita spending by the Center for Disease Control, 48th in spending by the Health Resources and Services Administration, and 31st in spending by the Hospital Preparedness Program.

While most of these federal funds are distributed on a formula basis, according to each state's population, some are competitive grants. As the Forum's past research has shown, these grants are a very important piece of the federal funding pie; compared to formula funding, local policymakers have much more control over their ability to attract competitive funds.

In the area of public health, one reason Wisconsin may not be competitive for these grants is because of the low priority our state places on public health spending. The same report finds Wisconsin spends just $9.16 per person annually on public health, ranking us 50th out of the 50 states and D.C. The national median for annual state public health spending: $33.26 per capita.

Monday, April 7, 2008

Parents and policymakers may disagree over child care quality

The Public Policy Forum recently surveyed 430 parents in southeastern Wisconsin. We find the vast majority are satisfied with the quality of their child care arrangements and their options for child care. In fact, most say they would not change anything about their child care arrangement if they had the chance.

This contradicts much of the research on early childhood education in our region, which has found that most providers are of mediocre quality.

The implication is that parents may be satisfied with what experts deem lower quality child care. Why? Either because they are not aware the quality is not optimal, or because they value different aspects of quality than do researchers and policymakers. The survey results indicate it is likely a little of both.

Parents are uncertain about state regulations and not very knowledgeable about child care accreditation. In addition, parents rank safety and the warmth and lovingness of a provider above the provider's skills and the learning environment, although all these facets of quality score highly among parents in our region.

We conclude that future efforts to regulate child care quality should take into account the high levels of parent satisfaction and acknowledge that, in some ways, the priorities of parents, the state, and experts in the field are not the same. While parents may seek and be most satisfied with a warm and loving caregiver, state policymakers have been considering new incentives that emphasize the educational quality of caregivers.

In addition, there were significant demographic and geographic differences among the sample with regard to the type of child care used and the affordability of care. For example, Hispanic parents were much less likely to utilize child care, and urban residents were much less likely to feel they had enough affordable child care options. Policymakers must take these differences into account and not attempt to craft a one-size-fits-all policy solution.

The full survey report is now available on our website.

Thursday, April 3, 2008

Time for a new Kettl Commission?

A Democratic governor, tired of complaints from municipalities about cuts in state aids, says the whole municipal aid formula should be scrapped and vows to come up with a new one by the end of the year. While he's at it, he says he'll tackle the state's school aid formula and figure out a better way of compensating its urban hospitals for indigent care.

Governor Jim Doyle, perhaps? No, but perhaps it could be and should be. The governor in question is Jon Corzine of New Jersey, who says in a recent New York Times article that while the existing formulas "may have very well served the state at one point," they "don't relate to the realities of the world today."

Many would argue that our state's shared revenue and school aid formulas similarly are far removed from today's realities. Just ask Milwaukee Mayor Tom Barrett, who noted in a recent Journal Sentinel candidate questionnaire that "erosion" in the city's shared revenue payments has left its 2008 payment "23% lower in inflation-adjusted terms than its 1996 payment". Or Milwaukee County Executive Scott Walker, who noted in his questionnaire that he would gladly forsake a portion of the County's shared revenue in return for moving "the cost of courts entirely to the state".

The state's school aid formula, meanwhile, has been a source of controversy for years, particularly in terms of how it affects Milwaukee and accounts for the city's voucher program. And the issue of compensating hospitals for indigent care recently has moved to the forefront in light of the Governor's proposed hospital assessment.

Eight years ago, Governor Tommy Thompson vowed to do something about these issues by appointing the "Blue-Ribbon Commission on State-Local Partnerships for the 21st Century", otherwise known as the "Kettl Commission" (after its chairman, Donald F. Kettl). The Commission's report, released in January 2001, contained numerous recommendations, the most prominent of which was to establish and define a "Badger Basics" package of education, human needs and justice services that the State would commit to fully funding.

Unfortunately, as many anticipated, the Kettl Commission recommendations have largely remained just that. Having staffed a member of the Commission, I believe this was due in large part to its composition and agenda, both of which were far too big. Perhaps today we need a more focused effort that would concentrate first on the issues of human services and justice funding.

Why those two? For one thing, voters across the state have voted overwhelmingly in referenda to have these mandated areas fully funded by the state. And for another, several recent developments create a crying need to review not only the funding, but also the existing roles and responsibilities of all levels of government in administering and providing services in those two areas.

In human services, the state's takeover of child welfare and privatization of W-2 in Milwaukee County, its move toward privatization and/or regionalization of family care throughout the state, and the creation of its new Department of Children and Families, make the time ripe for reconsideration of who does and pays for what. And with regard to justice services, recent movement toward community corrections and alternatives to incarceration across the state and nation, combined with increased understanding of the need to better link these initiatives and human services, makes this an ideal time to consider better coordination, as well as more logical funding mechanisms.

While I've never had much faith in blue ribbon commissions, we need to do something to bring better logic and accountability to these two state-mandated functions. Could a smaller Kettl Commission with a more narrow focus turn out something actionable this time around?