Carpool Karaoke Hamilton

The Utah House of Representatives would like to congratulate Lin-Manuel Miranda and Hamilton cast, on their success on Broadway and at the Tony Awards!

What better way to show our appreciation and excitement that the musical is coming to Salt Lake City on its first run to the new Eccles Theater than to put five politically opposed super fan politicians in the same car! This idea was inspired by James Corden’s carpool karaoke but instead of stars who can sing we have policy wonks from across the political spectrum.

“The Hamilton musical connected our nation’s history, its founding fathers and what makes America what it is to the younger generation,” said Utah House Speaker Greg Hughes. “I’m pretty much convinced that it is going save this country.”

The Utah Legislature passed a concurrent resolution, H.C.R. 12, to honor Lin-Manuel Miranda for his contributions to art and civics education through his composition of the musical “Hamilton.” Copper Hills high school students performed Cabinet Battle for the House Education Committee during the 2016 General Session, click here to watch.

A group of “Super Fans” awaiting your arrival and apparently already camping out for tickets to this must-see musical.

 

Short on time? Watch to see how five politically opposed super fan politicians express their excitement and appreciation that the Hamilton musical is coming to Utah in under 2 minutes!

 

Who was in the car:
Speaker Greg Hughes, R
Mayor Ben McAdams, D
Senator Jim Dabakis, D
Representative Kim Coleman, R
Representative Ken Ivory, R

 

#Wonks4Ham

 

The Utah House does not own the rights to this music. All ownership goes to the producers.

Senate Committee on Commerce and Consumer Protection

Senate Committee on Commerce and Consumer Protection 

by 

Massachusetts Institute of Technology

Sloan School of Management

Friday, February 06, 2015

9:45 a.m.

State Capitol, Conference Room 229

Greetings Chair Wakai, Vice Chair Slom, Members of the Committee on Judiciary & Labor, Chair Baker, Vice Chair Taniguchi, and Members of the Committee on Commerce and Consumer Protection:

My name is Matt Marx. I am the Assistant Professor of Technological Innovation, Entrepreneurship, and Strategic Management at the MIT Sloan School of Management.  My research, supported by others in my field, concludes regional “brain drains” are directly related by public policy affecting employee mobility.  I strongly support SB 1279, as a means for Hawaii to retain its top talent.

2014 marked an inauspicious anniversary: 600 years since the first employee non-compete lawsuit was filed. It was in northern England, in the very high-tech industry of clothes-dyeing. An apprentice was sued by his master for setting up his own clothes-dyeing shop in the same town in 1414. The judge, appalled that the master would try to prevent his own apprentice from practicing his profession, threw out the case and threatened the plaintiff with jail time.

Much has changed in 600 years, but employee non-compete agreements still bear painful resemblance to medieval practices. As a professor at the MIT Sloan School of Management, my research focuses on the implications of non-competes for individuals, firms, and regions. I am not alone in this effort; during the last ten years, several scholars have contributed to a body of work including

  • Toby Stuart of the University of California at Berkeley
  • Olav Sorenson of Yale University
  • Mark Garmaise of UCLA
  • Mark Schankerman of the London School of Economics
  • Lee Fleming of the University of California at Berkeley
  • Jim Rebitzer of Boston University
  • April Franco of the University of Toronto
  • Ronald Gilson of Stanford University
  • Ken Younge of Purdue University
  • Sampsa Samila of the National University of Singapore
  • Ivan Png of the National University of Singapore

My work, as well as that of those of these scholars, has almost universally found non-competes to be detrimental to individual careers and regional productivity. Non-competes, do not, as is often claimed, spur R&D investment by companies. Just to summarize a few points:

  • Although it is frequently claimed that non-competes are usually only a year in duration, a survey I conducted of more than 1,000 members of the IEEE engineering organization revealed that fully one-third of these are longer than one year and 15% are longer than two years.
  • An article of mine in the American Sociological Review reveals that firms rarely tell would-be employees about the non-compete in their offer letter. Nearly 70% of the time, they wait until after the candidate has accepted the job and, consequently, has turned down other job offers. Half the time the non-compete is given on or after the first day at work. At this point it is too late for the employee to negotiate—indeed, I found that barely one in ten survey respondents had a lawyer review the non-compete.
  • Several articles including my own with Lee Fleming and Debbie Strumsky in Management Science, by Jim Rebitzer and two Federal Reserve economists in the Review of Economics and Statistics, by Mark Garmaise in the Journal of Law, Economics, and Organization find that non-competes make it difficult for employees to change jobs. Instead, workers are trapped in their jobs with little possibility of moving elsewhere.

In the remainder of my testimony I wish to comment on the “chilling effect” non-competes can have regardless of the best intentions of judges and the possible implications for regional economic performance.

Jay Shepherd of the Shepherd Law Group reports that there were 1,017 published non-compete decisions in 2010. The Bureau of Labor Statistics reported that there were 154,767,000 workers in the U.S. as of June 2010. If the effect of non-competes were limited to the courtroom, simple math would suggest that 0.0007% of workers were affected by non-competes. Yet data from my IEEE survey indicate that nearly half of engineers and scientists are required to sign non-competes (including states where they are unenforceable). Why are 50% of workers asked to sign non-competes when barely a thousandth of a percent of them ever involve a court case? It is because of the chilling effect—because non-competes affect worker behavior even in the absence of a lawsuit. Thus it is essential to account for and anticipate how non-competes affect workers outside the courtroom.

In my own research including interviews with dozens of workers, I have rarely if ever come across an actual lawsuit. However, I have seen several instances where workers have taken a career detour, leaving their industry for a year or longer due to the non-compete. They took a pay cut and lost touch with their professional colleagues—not because they were sued, but for other reasons. They may have been verbally threatened by their employer; they may not have been threatened but have assumed that if they were sued, they would lose due to the expense of defending themselves; in some cases they felt that they were under obligation to honor the agreement they had signed—no matter how overreaching it might have been.

Non-compete reform is not just about protecting workers; it is also about growing the economy.  Some will say it is impossible to operate their business without non-competes. Perhaps it is easier not to worry about people leaving, but one need look no further than California’s Silicon Valley or the San Diego biotech cluster for proof that a thriving economy does not depend on non-competes. Non-competes have been banned in California for more than 100 years. Again, I acknowledge that as a manager life is easier when you can rely on employees not leaving for rivals thanks to the non-compete they were required to sign. When I was managing a team of engineers in Boston, I never really worried about people quitting. Whereas when I managed a team in Silicon Valley, I realized that we as a company had to keep them engaged. We had a saying: “you never stop hiring someone.” I think it made us a better company, and it made me a better manager.

Non-competes hurt the economy because it is more difficult to start new companies and also to grow those companies. Professors Olav Sorenson of Yale University and Toby Stuart of the University of California at Berkeley published a study in 2003 showing that the spawning of new startups following liquidity events (i.e., IPOs or acquisitions) is attenuated where non-competes are enforceable. Professor Sorenson followed up this study with a more recent article, coauthored with Professor Sampsa Samila at the National University of Singapore. They show that a dollar of venture capital goes further in creating startups, patents, and jobs where non-competes are not enforceable. Their finding is moreover is not just a Silicon Valley story but holds when Silicon Valley is excluded entirely.

Non-competes not only make it more difficult to start a company; they make it harder to grow a startup. One of the randomly-selected interviewees in my American Sociological Review article said that he “consciously excluded small companies because I felt I couldn’t burden them with the risk of being sued.  [They] wouldn’t necessarily be able to survive the lawsuit whereas a larger company would.” Also, whereas large companies are able to provide a holding-tank of sorts for new hires to work in a different area while waiting for the non-compete to expire, this is more difficult for smaller firms.

Finally, and perhaps of even greater concern, is that non-competes chase some of the best talent out of a region. I have included my research on a 1985 change in public policy in Michigan to start enforcing noncompetition agreements.   My research indicated that the change accelerated the emigration of inventors from the state and moreover to other states that continued not to enforce non-compete agreements.  This finding is not simply an artifact of the automotive industry or general westward migration; in fact, it is robust to a variety of tests including pretending that the policy change happened in Ohio or other nearby, mid-sized Midwestern states. Worse, this “brain drain” due to non-compete agreements is greater for the most highly skilled workers. It stands to reason that a change in public policy like SB 1279 would promote the retention of top talent in Hawaii.

References

Fallick, Bruce, Charles Fleischman, and James Rebitzer, “Job-Hopping in Silicon Valley: Some Evidence Concerning the Micro-Foundations of a High Technology Cluster,” The Review of Economics and Statistics, 88 (2006), 472-481.

Garmaise, Mark, “The Ties That Truly Bind: Noncompetition Agreements, Executive Compensation, and Firm Investment,” Journal of Law, Economics, and Organization, 27(2):376-425.

Gilson, Ronald, “The Legal Infrastructure of High Technology Industrial Districts: Silicon Valley, Route 128, and Covenants Not to Compete,” New York University Law Review, 74.

Marx, Matt, Deborah Strumsky, and Lee Fleming, “Mobility, Skills, and the Michigan Non-Compete Experiment,” Management Science, 55 (2009), 875-889.

Marx, Matt, “The Firm Strikes Back: Non-compete Agreements and the Mobility of Technical Professionals.” American Sociological Review 76(5):695-712.

  1. Marx and L. Fleming. “Non-compete Agreements: Barriers to Entry…and Exit?” in J. Lerner and S. Stern, eds., Innovation Policy and the Economy 12. (2012)

Samila, Sampsa, and Olav Sorenson. “Noncompete covenants: Incentives to innovate or impediments to growth.” Management Science 57.3 (2011): 425-438.

Stuart, Toby E., and Olav Sorenson. “Liquidity events and the geographic distribution of entrepreneurial activity.” Administrative Science Quarterly 48.2 (2003): 175-201.

Thank You Veterans

Thank You Veterans

Each year we set aside a day to honor the men and women who have served our country in uniform. It is an opportunity for us to extend our gratitude for the sacrifices made by those who serve in many places throughout the world, often in less-than-comfortable circumstances, in order to protect our way of life.

While levels of freedom around the world are on the decline, we can thank our soldiers and veterans for safeguarding us and protecting our liberties – for without those who fight for what is good and right, only those who fight for power would remain.

Richard Watson Gilder, an American poet, declared that, “Better than honor and glory and History’s iron pen, was the thought of duty done and love of his fellow-men.” Those are the military men and women we have known, and to each of you we express our deepest appreciation and thanks on this Veterans Day.

Daw:  Why Don’t Payday Lenders Give Us All The Facts?

Daw: Why Don’t Payday Lenders Give Us All The Facts?

Click here to read the published op-ed

In a recent Salt Lake Tribune op-ed on payday lending, national payday lender executive Dennis Shaul is correct in pointing out that just because a payday loan is stretched out to 10 weeks does not mean the borrower has defaulted. What does this mean for the borrower? Have they rolled the original loan over several times? Do they now have several outstanding loans to cover the building interest? Are they being hit with excessive fees and interest?

For reasons that defy common sense, the state of Utah has never required, and payday lenders have never volunteered, this important piece of information. This leaves the state and public with an information gap when determining whether or not the payday lending industry is behaving in a responsible and ethical manner. All we know from the newly released state Department of Financial Institutions’ report is that more than 45,000 loans have been charged five times the original interest, which could amount to more than 400 percent APR.

If payday lenders aren’t going to be transparent, then we must turn to other sources that shed additional light on the number of defaulting loans and the resulting consequences. Utah State Court documents show that in 2014, payday lenders filed more than 14,000 debt collection cases in the small claims (9,754) and district (4,759) courts.

A typical payday lender claim runs $2,000 to $3,000, according to my contacts in the court system, but it’s not at all uncommon to also find claims well in excess of $10,000. Furthermore, my court contacts assure me that those large dollar amount cases are the result of payday lending, not payday lenders providing other types of loans.

What makes those amounts so frightening is how they fly in the face of what two payday lending representatives told me: That it’s impossible for what begins as a $350 payday loan to balloon to $10,000 or more. They point out that after 10 weeks, a $350 loan will only have accrued around $260 in interest, at which point state law prohibits any further interest, so the total claim would have to be under $650.

This is true. Therefore, in my view, the only way a payday lender could be suing a client for thousands of dollars would be if they had given them multiple loans and allowed each one to accrue the maximum amount of interest before default. This leads us to draw two conclusions: the default rate could be much higher than the 14,000-plus court cases would indicate; and the real problem with payday lenders is doling out multiple loans simultaneously to one individual.

Shaul seems to agree with this last point when he states that the majority of borrowers take out one or two loans at a time and pay them back in full. So my question is this: If the real problem landing borrowers and lenders in court comes from borrowers having multiple loans on the books at the same time, why allow this practice? Regulation limiting multiple loans has worked remarkably well in other states. It does not cripple the industry, as some have contended, but it has stopped the abuse of financially vulnerable people.

Surprisingly, even though this type of regulation has clearly been an effective deterrent to irresponsible lending (and borrowing), and has not prevented customers from receiving a single loan and paying it off in full, the payday lending industry has spent hundreds of thousands of dollars lobbying against such regulation, preventing a similar commonsense solution from being passed in Utah.

Which begs one final question. Why?

Rep. Bradley Daw serves on the Social Services Appropriations subcommittee and represents District 60 in Orem.

Prison Relocation Commission

Prison Relocation Commission

Over 70 years ago, as the state was looking to relocate the prison in Sugarhouse beyond the urban sprawl of the time, they settled on a 700 acre site in Draper. At the time it was a rural community far enough away to allow for future population growth, while still close enough to courts, prison personnel, volunteers and hospitals to effectively serve those housed there.

 

As the population of the Salt Lake Valley has continued to expand, the current prison location is now at the intersection of the state’s two most populous counties and four growing cities. The 700 acre property is flanked by major campuses of eBay to the north and Adobe to the south and has the potential to generate significant tax revenue if developed, as well as bring many high-paying jobs to our state.
The old, dilapidated structures at the prison must be repaired or rebuilt, at significant cost to taxpayers either way. The current prison design is expensive to maintain and to utilize, and is less effective than newer designs in accommodating the training which leads to lower rates of recidivism among prisoners.

 

Historically, prison moves occur about every 70 years. In 2011, I sponsored and passed legislation to further evaluate the relocation of the prison from Draper, as it seemed as though its time had come.

 

While state law allows for a relocation study to be performed without much public participation and no public meetings, I chose to pass legislation that facilitated all of the stakeholders, bringing them together in the most transparent way possible.

 

There are a few facts that need to be considered regardless of what steps the state chooses to take next:

 

1.   Choosing to do nothing is not an option. Maintenance, repair and expansion of the current prison is projected to cost taxpayers $783 million; relocation will cost approximately $1 billion, with a serious economic upside.

2.   New prison designs allow for prison programming that has been shown to reduce recidivism and return offenders to society more prepared to be productive, as well as reduce operating costs.

3.   Much interest has been expressed regarding the development of a high-tech corridor between Adobe and eBay, which would provide many well-paying jobs for Utahns.

4.   When the prison is moved, new development will take place in a robust, high-growth area, adding to the tax base of a city that is already doing its share by housing the Utah National Guard and a water treatment plant for other areas of the valley, for which it receives no tax dollars.

5.   Annual state and local tax revenues associated with the full development of the current prison location are projected to be $94.6 million, while estimates of annual economic development to the state are $1.8 billion.
The Prison Relocation Commission has been looking for a site with natural barriers to encroachment that would prevent the reoccurrence of the situation in Draper. No attempt has been made by anyone associated with the commission to manipulate the screening scores in any way. Independent experts with many years of national experience in siting correctional facilities have calculated these criteria and narrowed the list of potential locations from 26 to six.

 

During the December 3rd PRC meeting discussion on these six remaining locations, I proposed new assessment guidelines to be used in our evaluations to ensure that the locations we were considering wouldn’t be economically harmed by housing the prison.  The commission unanimously agreed, and these new guidelines will be used to help further narrow the list:

 

 

1.   Have any issues been discovered with the site to date that would make the site unreasonably difficult or costly to develop?

2.   Is there an identified, compelling state interest that would likely be impaired by locating the correctional facility on the site being assessed?

3.   Is the proposed site in the path of expected concentrations of population growth and increasing population density that will likely occur in the foreseeable future?

4.   What is contemplated in the land use plan of the local community where the proposed site is located?
We appreciate the participation and feedback from the public on this very important issue and believe that an open and transparent process is the way to most effectively achieve our goals.  We have confidence that the site ultimately selected will be the one that best meets the needs of the state, the prisoners and the surrounding communities.

 

We appreciate the participation and feedback from the public on this very important issue and believe that an open and transparent process is the way to most effectively achieve our goals.  We have confidence that the site ultimately selected will be the one that best meets the needs of the state, the prisoners and the surrounding communities.

 

-Speaker-elect Greg Hughes

Screen Shot 2014-12-22 at 7.16.05 PM

Speaker-Elect Selects Senior Staff

Speaker-Elect Selects Senior Staff

For Immediate Release

Contact: Greg Hartley

(801) 231-2756

gregmhartley@gmail.com

 

Speaker-Elect Greg Hughes Selects Senior Staff

 

SALT LAKE CITY – (12/10/2014) Speaker-elect Greg Hughes announced today that he has selected political veHartleyteran Greg Hartley to serve as the Chief of Staff to the Utah House of Representatives.

“Greg Hartley is a seasoned veteran of the legislative and political process,” said Speaker-elect Hughes. “Nobody thinks more strategically and nobody works harder. Greg’s experience as a key staffer to Governors Huntsman and Herbert will serve the House well, as will his experience in Utah and other states representing a variety of government affairs clients.”

“Greg has also managed and consulted several successful campaigns at all levels of politics,” Hughes continued. “His understanding of the electorate and his grasp of policy issues will bring solid leadership to the House of Representatives.”

“It’s an honor to work alongside Speaker Hughes and the Utah House of Representatives,” said Hartley. “I look forward to helping them develop good public policy in a way that will position the State of Utah for long term success.”Selin

Hartley will be joined by Megan Selin, who will serve as Deputy Chief of Staff. Selin is also well known to Utah legislators, having first interned with Representative Hughes in 2008. Additionally, Megan’s experience includes internships with the Utah Division of Housing and Community Development and the USDA in Washington, as well as study abroad at Xiamen University in China. Megan holds a bachelor’s degree in Business Management Finance and a Master of Public Administration degree, both from BYU.

Hartley and Selin have already begun working on the transition for the new house leadership team in preparation for the upcoming General Legislative Session.

“These two are trusted advisors and will complement our exceptional leadership team,” said Hughes.

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