Category: Law
Options for health care coverage reform
This topic has been reconsidered much as of late, so I thought I would do a summary post on some of the possible options. I suspect I have covered all or most of this ground in 2009 or so, but here goes:
1. Universal health insurance vouchers on exchanges, with means-tested subsidies and also a mandate. The logic of this can work just fine, but it is quite expensive as it would exist in the United States and we end up spending too much on health care. Over time it would be accompanied by say a five percent VAT.
2. Single payer systems. I don’t want to repeat the usual debates, but perhaps we can agree single payer won’t come anytime soon in the United States. I also think they work least well in the land of medical innovation, and best in small countries such as New Zealand, but that consideration doesn’t even rise to the fore here.
3. The Singapore system, involving single payer for catastrophic expenses and health savings accounts for smaller expenditures. To varying degrees you can combine this with forced savings for the HSAs and price controls on service provision, both of which you will find in Singapore. Where “catastrophic” starts can vary as well. This is my first choice, although if you wish to dismiss it as “utopian” for the United States you have a point. I’ll get back to that.
4. One particular path for how ACA could evolve into a (relatively inefficient) form of a Singapore system. Imagine that the mandate becomes fairly narrow with time, while at the catastrophic end insurance companies evolve into (inefficient) public utilities. Health savings accounts are reintroduced through new legislation, perhaps under a Republican administration, and can be supplemented with cash transfers when desired. Here is one discussion of that path.
5. The mandate and subsidized exchanges under Obamacare prove unworkable and eventually they are abandoned either partially or in full, or in some states but not others. Their place is taken by a Medicaid expansion. Coverage is not universal, though it is higher than pre-ACA, and of course coverage under the status quo is not going to be universal either.
6. The status quo of Obamacare.
7. More managed care. We should remove the legal restrictions and barriers which penalized managed care in the first place, as it is a feasible and desirable means of bending the health care cost curve. You will note that this option is not a strictly rival alternative to 1-6, but rather can be combined with them in varying degrees. Still, it seems appropriate to list it as an option.
Now, if I am allowed to be utopian, I favor #3 over the status quo. If I am asked to be less utopian, I see #4, #5, and #7 as some of the better versions of what ACA could evolve into. I would not predict that those options come to pass, nor would I say those options are better than the rather unrealistic version of ACA as envisioned by its proponents, but I think they follow from the dictates of reality as the better options on the table, #3 aside of course. And I do not feel I am being utopian in holding them as alternatives to the status quo. They are not so far away from the status quo in the policy space.
I don’t think ACA in its current form is stable. Too many moving parts, too many margins of danger, too many jerry-rigged incentives, too many “it worked OK in Massachusetts so it has to work at the national level even if it doesn’t appear to be maximizing” requirements, and too little recognition that the whole system is poorly geared for a world of stagnant median wages and rising inequality. The higher is inequality and the lower are lower-tier wages, the harder it is to guarantee near-equal consumption of health care through employment institutions. The greatest single danger to ACA is eventual massive employer-shedding of health care obligations, penalties or no, which at best evolves us into #1, which I do not favor. On top of that there is state shedding of Medicaid obligations, which again pushes us into #1. Most generally, the national health care systems which work are much more consolidated in nature than is the U.S. status quo.
It is a Denkfehler when people write “you don’t have an alternative to ACA” or “the Republicans don’t have a health care plan,” and so on. You can take such pronouncements as leading indicators that ACA is not going well. #3 aside, you can take the relevant alternatives as a mix of #4, #5, and #7. Those are not so much alternatives “given by the Republicans (or whoever else),” as much as they are given by reality. I don’t see “ACA as envisioned by its propnents” as on the table either, so in this sense it is also the Democrats who don’t have an actual health care plan.
I view the real choice before us as #1 vs. some mix of #4, #5, and #7. And in that setting I do not favor #1 and I still can dream of and advocate #3.
Addendum: Here is my earlier post on how to debate health care policy. Let’s see how many of its strictures you all violate.
Where this all is leading
I.B.M.’s Watson, the supercomputing technology that defeated human Jeopardy! champions in 2011, is a prime example of the power of data-intensive artificial intelligence.
Watson-style computing, analysts said, is precisely the technology that would make the ambitious data-collection program of the N.S.A. seem practical. Computers could instantly sift through the mass of Internet communications data, see patterns of suspicious online behavior and thus narrow the hunt for terrorists.
Both the N.S.A. and the Central Intelligence Agency have been testing Watson in the last two years, said a consultant who has advised the government and asked not to be identified because he was not authorized to speak.
There is more here, pointer is from Claudia Sahm.
Do U.S. tech companies now have legal troubles in the EU?
Laws in this area can be tricky to interpret, so digest this caution, but I found this analysis from Bloomberg BusinessWeek of interest:
The Safe Harbor scheme (not recognized by the Germans, incidentally) allows U.S. tech firms such as Google to self-certify, to say that they conform to EU-style data protection standards even if their country’s laws do not. It’s not quite that simple—these companies really do need to jump through some hoops before they claim compliance; just ask Heroku—but it does largely come down to trust.
EU data protection regulators have already called for the system to be toughened up through the introduction of third-party audits, but frankly it now looks like the whole system is in tatters. U.S. companies claiming Safe Harbor compliance include Google, Yahoo, Microsoft (MSFT), Facebook, and AOL (AOL), all of which now appear to be part (willingly or otherwise) of the NSA’s PRISM scheme.
As EU data protection rules don’t say it’s OK for foreign military units to record or monitor the communications of European citizens—heck, even local governments aren’t supposed to be doing that—the Safe Harbor program now looks questionable to say the least. A lot of people have already pointed to the U.S. Patriot Act as a threat, and now the effects of that legislation are plain to see.
The update at the beginning of the article reads:
I’ll admit I am shocked to have received this response from the European Commission’s Home Affairs department to my request for comment, with particular regard to the impact on EU citizens’ privacy: “We do not have any comments. This is an internal U.S. matter.”
I don’t see kicking U.S. tech companies out of Europe as a promising way of starting U.S./EU free trade negotiations. One possible legal “out” is discussed here. If anyone is going to drive this issue forward, it is likely the European public, who of course still can insist on tougher standards. Here is one description of Safe Harbor policies. The tech companies themselves may fear a loss of international competitiveness, or that Safe Harbor standards will be toughened, you will find a discussion of commercial worries and their potential impact here.
Restrictions on student athlete transfer
When an athlete chooses to transfer, three sets of rules can be involved: those of the NCAA.; those of the conference in which the university competes; and those that accompany the national letter of intent, a contract that athletes sign while still in high school to announce their intention to attend a university.
“It’s entirely slanted to the coach’s side,” said Don Jackson, a lawyer who runs the Sports Group in Montgomery, Ala., and who has represented dozens of athletes attempting to transfer to a university of their choice. “Once the student-athlete signs that national letter of intent, it’s essentially a contract of adhesion. They have limited rights.”
Universities have long sought to block student-athletes from transferring to a rival program. Alabama’s football team, for example, would not be expected to let a star player go to Auburn. But the impulse to limit the student-athlete’s options has been heightened to the point that coaches are now blacklisting dozens of universities.
From the NYT, here is more, none of it pretty, but of course lower-tier universities will claim they are making big investments in improving the quality of diamonds in the rough. The funny thing is — if I may sound Caplanian for a moment — no one at these schools seems to demand similar restrictions on transfers of the students.
The loss of privacy and the collapse of creative ambiguity
Remember the regime of creative ambiguity when it came to Fed bailouts? You kind of expected one, but weren’t totally sure what might come, and so the banking sector felt safe but not absolutely guaranteed on the side of the creditors. Post-Lehman, those days seem to be over and now the moral hazard problem looms larger.
Perhaps we had a regime of creative ambiguity when it came to privacy and government surveillance. You (or at least I) thought the government was spying on you, but there was some ambiguity as to how much. You could acquiesce to the previous status quo, without fearing it would get worse, because it was not commonly recognized public knowledge that so much spying was going on. Maybe you figured you could tolerate a 0.8 probability of that level of spying because there were checks on it becoming worse, more extensive, more selective, and so on.
But now that previous level of spying is common knowledge (or at least part of it is common knowledge, I suspect there are further revelations to come). At the same time, the IRS, Verizon, and other scandals are common knowledge too, all of a sudden.
The old equilibrium is perhaps no longer stable. People may even be fine with that level of spying, if they think it means fewer successful terror attacks. But if they acquiesce to the previous level of spying too openly, the level of spying on them will get worse. Which they do not want.
On top of all that, the common knowledge of the old spying also may make the old spying less effective in purely practical terms, as potential suspects adjust their behavior. That also may lead a risk-averse government to pursue additional and more intrusive means of spying.
So if the status quo of a few weeks ago is no longer an equilibrium, what happens next?
I predict we will see more spying and more intrusive spying. You should not think that recent events will simply cement a previous status quo in place, rather it moves us down a very particular path and probably makes the entire problem worse. The age of creative ambiguity in surveillance is over and probably not for the better.
Our government will end up thwarting tech innovation and balkanizing the web
…Google Glass + NSA PRISM essentially amounts to a vision in which a foreign country is suddenly going to be flooded with American spy cameras. It seems easy to imagine any number of foreign governments having a problem with that idea. More broadly, Google is already facing a variety of anti-trust issues in Europe where basic economic nationalism is mixing with competition policy concerns. Basically various European mapping and comparison and shopping firms don’t want to be crushed by Google, and European officials are naturally sympathetic to the idea of not letting local firms be crushed by California-based ones. Legitimate concern that US tech companies are essentially a giant periscope for American intelligence agencies seem like they’d be a very powerful new weapon in the hands of European companies that want to persuade EU authorities to shackle American firms. Imagine if it had come out in the 1980s that Japanese intelligence agencies were tracking the location of ever Toyota and Honda vehicle, and then the big response from the Japanese government was to reassure people that Japanese citizens weren’t being spied upon this way. There would have been—legitimately—massive political pressure to get Japanese cars out of foreign markets.
The intelligence community obviously views America’s dominance in the high-tech sector as a strategic asset that should be exploited in its own quest for universal knowledge. But American dominance in the high-tech sector is first and foremost a source of national economic advantage, one that could be undone by excessive security involvement.
That is from Matt Yglesias.
The Washington Post is on a roll
Here is one excerpt from their latest investigation:
It is possible that the conflict between the PRISM slides and the company spokesmen is the result of imprecision on the part of the NSA author. In another classified report obtained by The Post, the arrangement is described as allowing “collection managers [to send] content tasking instructions directly to equipment installed at company-controlled locations,” rather than directly to company servers.
Government officials and the document itself made clear that the NSA regarded the identities of its private partners as PRISM’s most sensitive secret, fearing that the companies would withdraw from the program if exposed. “98 percent of PRISM production is based on Yahoo, Google and Microsoft; we need to make sure we don’t harm these sources,” the briefing’s author wrote in his speaker’s notes.
An internal presentation of 41 briefing slides on PRISM, dated April 2013 and intended for senior analysts in the NSA’s Signals Intelligence Directorate, described the new tool as the most prolific contributor to the President’s Daily Brief, which cited PRISM data in 1,477 items last year. According to the slides and other supporting materials obtained by The Post, “NSA reporting increasingly relies on PRISM” as its leading source of raw material, accounting for nearly 1 in 7 intelligence reports.
Edward Luce is what I call “prescient plus”
A few days ago he wrote this subtitle in the FT:
Self-interest guides the Big Data companies, and the same is often true of the White House
And this:
Big data’s agenda is not confined to immigration reform. Among other areas, it has a deep interest in shaping what Washington does on privacy, online education, the school system, the internet, corporate tax reform, cyber security and even cyber warfare. Big data is also likely to be influential in the US-European trade partnership talks, which start this month. Whether the sector becomes a thorn in the side of the process remains to be seen. Either way, Americans should be relieved someone is making the case for privacy.
He closes with this:
A century ago, Theodore Roosevelt pushed back against the power of the rail barons and oil titans – the great technological disrupters of his day. Mr Obama should pay closer heed to history. And he should become wary of geeks bearing gifts.
Don’t forget this line:
One of the geekocracy’s main characteristics is a serene faith in its own good motives.
The general problem is the unholy government and tech alliance, based on a mix of plutocracy, information-sharing, and a joint understanding of the importance of information for future elections. Which current politician wouldn’t want to court the support of tech, and which major tech company can today stand above politics?
I will add this: if you were surprised by today’s revelations, shame on you!
Should states jump on the Medicaid expansion bandwagon?
Carter C. Price and Christine Eibner have a new study in Health Affairs suggesting a definite “yes,” and I have seen this piece endorsed numerous times in the blogosphere and on Twitter. I do understand that part of their argument is a normative one, given the desire to expand insurance coverage for the currently uninsured. But they and their endorsers also seem to be making a state-level financial prudence argument, as if there were no possible reason for a state not to expand participation behind sheer ideological stubbornness. On that matter I don’t think they have pondered the problem deeply enough and they fail an intellectual Turing test.
Let’s start with a simple observation, namely that a Republican may win the next Presidential election. There is also quite a good chance that such a victory would be accompanied by a Republican Senate (and House), given the distribution of vulnerable seats. That means a very real chance that the federal government will scale back its commitment to Medicaid expansion, for better or worse. States don’t want to be left holding the bag, and governors know it is hard to take back benefits once granted.
I often interpret the Republicans as operating in a “they don’t really mean what they say” mode, but on Medicaid I think they basically do mean it and we already can see some of the demonstrated preference evidence. Furthermore a new Republican President would face very real pressure to “repeal Obamacare,” yet we all know that the “three-legged stool” centered around the mandate is hard to undo selectively. That ups the chance Medicaid will be the target and much of the rest will be relabeled (“repealed,” in the press release) but in some manner kept in place in its essentials.
Another possibility is that a Republican administration would somehow restructure the deal to, in some way, favor the holdout red states, relative to the deal already on the table. (Why not reward your supporters?) That increases the prospective return to being a holdout red state.
On top of all this, there is option value. The chance to jump on the Medicaid expansion bandwagon won’t go away tomorrow. Even if the cost-benefit ratio > 1, you still might want to play wait and see. There is even a chance that in the meantime you are somehow offered a better deal yet.
Now if someone wants to argue that, given these considerations, Medicaid expansion still makes financial sense for a state, fine, I would be keen to read such an analysis. But that is not what I am seeing. The Price and Eibner piece doesn’t analyze these considerations or even bring up most of them. Governors are not stupid, or their chiefs of staff are not stupid, and many governors are far less ideological than they let on. They are politicians. And they are politicians who understand that the federal government is not to be trusted and yes if you wish you really can blame that on the Republicans, or indeed on any prospective switch of power. That is why we are not seeing more states do the Medicaid expansion. In the meantime, the debate needs to catch up to the reality.
Is there ACA rate shock in California?
I wasn’t going to weigh in on this, but enough of you have asked me what I think of Avik Roy’s claim that California insurance premiums, under ACA, will go up 64% to 146%. Let me start by telling you this: based on a reading of the secondary commentary, I cannot tell you how much rates in California will be going up (and my original inclination was not to blog it for this reason).
Still, the question having been raised, let’s go back in time. In 2009, the CBO wrote (pdf):
CBO and JCT estimate that the average premium per person covered (including dependents) for new nongroup policies would be about 10 percent to 13 percent higher in 2016 than the average premium for nongroup coverage in that same year under current law.
About half of those enrollees would receive government subsidies that would reduce their costs well below the premiums that would be charged for such policies under current law.
If you read their subsequent discussion, it seems fairly clear to me they are not averaging “higher premia for those still getting insurance” with “a price decline from infinity, for those who couldn’t get any insurance in the pre-ACA days,” in some kind of complicated index number fashion. They are talking about price increases on already-existing policies and what kind of continuation one can expect.
I will treat this as the canonical estimate, and stipulate that we will have had “rate shock” if the percentage increases are three times higher than had been forecast by the CBO.
You will note that these higher rates still may be an efficient form of lump sum taxation, or they may be unsustainable price hikes which cause the mandate to unravel (read Will on this point) by encouraging non-participation, or perhaps a bit of both. Megan McArdle considers some public choice implications of unpopular and unexpected high rates.
In 2009, you will find a claim by Jonathan Gruber:
What we know for sure the bill will do is that it will lower the cost of buying non-group health insurance.
Maybe he had in mind an index-number weighting where the “price decline from infinity” weighs heavily in the calculation and in that sense such a claim can always be true if even one person receives extra coverage. Still, I am more likely to call it a misspoken sentence, a Denkfehler, an excess enthusiasm, and most of all a highly inexact way of describing the issue no matter what is the truth. It was always the case that the median and modal individual premium was likely to go up, even with full political cooperation from the Republicans. After all, that is part of the “efficient lump sum taxation” idea behind the use of the mandate in the first place. And yes I do understand that a competitiveness effect and a transparency effect still may push prices down but that is not the way I would bet it and for sure it is not “for sure,” to quote Gruber, that such prices are going to fall. (By the way here is an Indiana estimate of rate increases in the range of 70-90%; I can’t vouch for the underlying data. It also seems that price declines are highly likely for New York state, in part because the current system has so many problems. So we also need to be disaggregating the different states here. Also, here is some informal poll evidence for a 30-40% rate increase at the individual level, with some higher increases for some other groups. Caveat emptor, but those would be higher rates and they might even surpass the 3x standard I have set up.)
If you add in President Obama’s varied comments on the matter, I absolutely do see the real truth behind conservative and Republican complaints of “bait and switch.” The median and modal cost of buying non-group health insurance is likely to go up, not down, and not everyone will enjoy the option of keeping the status quo, as had been promised. And that whole matter is being given a different spin today than it was say in 2009. On that Roy is entirely correct.
(In passing, I see employer shedding of coverage as a greater danger to ACA at the macro level, so in my view it is a mistake to see too much of ACA as turning on this issue.)
On the other side of the debate, you will find criticisms of Roy here, here, here, here, and here, among many others. At least two points of the critics seem to stick, first that these may be teaser (status quo) rates sampled by Roy and second we don’t know actually which individuals can end up getting those rates, once they fill out the questionnaires about the earlier medical histories. But even there we are left with “we don’t know” more than “I have better numbers which show Roy to be wrong.” The level of subsidies is relevant too. I think also that Roy’s response undercounts the number of uninsurable people. The worry is not that the market price for insurance is infinite, but rather at the prevailing market price one is simply paying one’s medical bills, plus a processing premium to the insurance company, rather than obtaining ex ante insurance.
To raise two other points critical of Roy’s position, first I am uncomfortable with putting so much emphasis on percentage rate increases, when some of these sums in question may be relatively small. (I find the emphases in Megan’s presentation of the numbers more useful.) I also think it requires a lot more argumentation to measure the number of “those who can’t get useful insurance” than by looking at the number of applications for the high-risk pools, even if that argument ultimately succeeds.
That all said, I find the screeds of most but not all of Roy’s critics to be inappropriate or in some cases beyond inappropriate. It is disturbing how much space and emotional energy is devoted to attacking Roy, and to attacking conservative policy wonkery, relative to trying to calculate the actual extent of rate shock or possible lack thereof. That is not how good policy wonks go about their job.
I think there is quite a good chance we will see rate shock, as I have defined it above. I also think we still don’t know. I also see rhetorical bait and switch from ACA defenders. I also see that Roy is too quick to jump on possible negative information about the California rates without nailing down the case. I also don’t think these are the most important issues for ACA, though they are issues worth discussing.
Overall this is not a debate which is going very well.
Do Japanese companies have banishment rooms?
This seems speculative, but of interest nonetheless:
Basically, banishment rooms are departments where companies transfer surplus employees and give them menial or useless tasks or even nothing to do until they become depressed or disheartened enough to quit on their own, thus not getting full benefits, unlike if they were actually let go. Imagine having to stare at a TV monitor for 10 hours at a time each day, in order to look for “program footage irregularities.” Of course companies would not admit to doing this, and instead will make up generic (or even creative) titles and department names like “Business & Human Resource Development Center” or “career development team”. And it’s not small companies that are doing this, but big ones like Hitachi Ltd., Sony Corp., Toshiba Corp., Seiko Instruments Inc., a NEC Corp. subsidiary, and two subsidiaries of Panasonic Corp.
A public relations from the main office of Panasonic said that the BHC section is “training employees to acquire new skills so they can work at different sections,”. 468 employees were added to this department in April, mostly coming from sections that were doing poorly. In short, 1 in 10 workers at the company are at the BHC. So far, only 35 employees have left the company while 29 got transferred to other departments.
Via Mark Thorson, the story is here. Here is another article about banishment rooms, with more documentation and more legal detail about the difficulties of firing employees.
Elsewhere from Japan, a new and possibly very effective malaria vaccine has been invented. Here is electronic Samurai sword quick draw and cut trainers. Here is an argument that competitive vending machines make Japanese inflation more difficult to achieve.
Very good sentences
This raises an interesting, tangentially related question. Liberals fulminate constantly against outrageous conservative obstruction, yet often seem nevertheless surprised by its effectiveness. Why is that? My guess is that liberals are sometimes deceived by assumptions about the scope of liberalising moral progress. Modern history is a series of conservative disappointments, and the trend of social change does have a generally liberal cast. The surprisingly rapid acceptance of legal gay marriage is a good example. Liberals are therefore accustomed to a giddy sense of riding at the vanguard of history, routed reactionaries choking in their dust. But all of us, whatever our colours, overestimate the moral and intellectual coherence of our political convictions. We’re inclined to see meaningful internal connections between our opinions—between our views on abortion and regulatory policy, say—when often there’s no connection deeper than the contingent expediencies of coalition politics. For liberals, this sometimes plays out as a tendency to see resistance to all liberal policy as an inevitably losing battle against the inexorable tide of history. This occasionally leads, in turn, to a slightly naive sense of surprise when a hard-won political victory isn’t consolidated by a decisive, validating shift in public opinion, but instead begins to be ratcheted back.
That is from Will Wilkinson.
Titling of Property
The NYTimes has an excellent piece on Greece’s broken property system:
In this age of satellite imagery, digital records and the instantaneous exchange of information, most of Greece’s land transaction records are still handwritten in ledgers, logged in by last names. No lot numbers. No clarity on boundaries or zoning. No obvious way to tell whether two people, or 10, have registered ownership of the same property.
As Greece tries to claw its way out of an economic crisis of historic proportions, one that has left 60 percent of young people without jobs, many experts cite the lack of a proper land registry as one of the biggest impediments to progress. It scares off foreign investors; makes it hard for the state to privatize its assets, as it has promised to do in exchange for bailout money; and makes it virtually impossible to collect property taxes.
… less than 7 percent of the country has been properly mapped, officials say. Experts say that even the Balkan states, recovering from years of Communism and civil war, are far ahead of Greece when it comes to land registries attached to zoning maps — an approach developed by the Romans and in wide use in much of the developed world since the 1800s.
Here from our course on development economics at MRUniversity is our video which covers the theory and empirical research on titling from Peru to Palau:
http://youtu.be/1CFqK_lHngs
Oops, and double oops…
Au pair programs are in danger of ending, a possible victim of legislation now moving through Congress…
At issue is a provision of the bill that would bar any labor contractor from charging a fee to foreign workers being brought into the country. Supporters say the measure is aimed at preventing the exploitation of foreign workers.
The roughly 13,000 au pairs who enter the U.S. each year are considered participants in an “exchange visitor program” run by the State Department. The Senate bill would change their status to “workers,” meaning the new bar on charging upfront fees would apply to them.
The story is here. I predict they will find some semi-legal way around this stipulation, should the bill pass, but still this is a big mistake. Au pairs should not be considered controversial immigrants.
The second oops is this, from the Detroit Institute of Arts:
Museum officials here said Friday they strongly opposed any forced art sales, after the powerful emergency manager of the city indicated that its prized holdings could be sold to pay off creditors in the event of a bankruptcy filing…legal experts say that in a municipal bankruptcy, it is possible for a city to sell assets, even cultural icons. James Spiotto, a bankruptcy attorney and author on municipal-finance issues based in Chicago, said that “in order to provide essential government services like public safety, roads and education, certain other programs are going to be curtailed or eliminated. So it’s not surprising that the sale of art is on the table.”
Putting that museum into private hands would not have been a bad idea. You also can take this as an illustration of the more general point, which I am fond of stressing, that once you consider wealth, hardly anywhere is actually bankrupt or insolvent. Debt problems are most of all problems of politics.
Prisoner unemployment is rising in California
Prison labor, once best known for making license plates, has grown to 57 factories doing such work as modular building construction, toner cartridge recycling, shoemaking and juice packaging, according to its latest annual report. Convicts supply closed-captioning for television and transcribe movies into Braille…
Yet even with workers paid 35 to 95 cents an hour, business is off. Sales are exclusively to state and local governments, almost all under budget pressure. The biggest customer, the Corrections Department, has 43,000 fewer inmates since 2006, many shifted to county jails to ease crowding. Revenue slipped 18 percent to $173 million in the fiscal year that ended in June, from almost $210 million five years earlier.
“We are statutorily required to be self-sufficient,” said Eric Reslock, a spokesman for the California Prison Industry Authority. Some work programs have been scaled back and all are being reviewed, he said.
That is from James Nash of Bloomberg. Here is one specific report for Bakersfield.
You can see that the initial shock to this system is largely demand-side. Yet there is still a relevant supply-side reason why many of these laid-off workers remain unemployed.