From Human Capital

The Plan

A five-point proposal to transform U.S. water ​system governance

As daunting as the challenges in the U.S. water sector are, solutions are possible and within our grasp. Thanks to legions of smart, creative scientists and engineers, we know a lot about the threats to environmental quality and health, and we’re pretty good at finding ways to address them. Today the principal barriers to progress in the water sector are not environmental or technological; they are social, economic, and political.

Fixing the water sector—really fixing the water sectormeans more than government money for pipes. The crazy quilt of institutions that govern, regulate, and manage water in the United States hinders effective, lasting solutions. Fortunately, institutions are human creations, which means we can do something about them. There’s nothing wrong with water governance in America that can’t be solved.

Over the past few months I’ve written a series advancing five broad institutional reforms to the U.S. water sector that ought to accompany any big federal investment.* This post summarizes them. They’re a package deal: each reform complements the others, and each is unlikely to be successful without the others. It’s an ambitious plan, but it’s rooted in empirical research, and together the five parts are technically and politically feasible. Here they are (click each heading for the full post on each):

1. Consolidation

There are more than 50,000 community water systems and 15,000 sanitary sewer systems in the United States. Virtually every aspect of America’s water sector is worse because there are so many systems. Let’s reduce the number of water systems to fewer than 5,000 by 2030. Consolidation can happen by merging neighboring systems into a regional utility, creating new authorities or nonprofit organizations, or when an investor-owned firm purchases small systems. To make it happen:

  • Federal funding for water, sewer, and stormwater systems must be contingent on small system consolidation.
  • Laws governing utility mergers and acquisitions should remove barriers to and create incentives for consolidation. Consolidation laws should ensure that struggling systems are consolidated and guard against “cherry-picking.”
  • All systems must be held to the same environmental standards. Exemptions and waivers for small systems should be eliminated and regulators should be empowered to force condemnation and consolidation for perennially failing systems.
  • State and federal agencies should provide technical and legal assistance to facilitate the consolidation process.

Reducing the number of water and sewer utilities through consolidation is the single best thing we can do to improve water utilities in the United States.

2.Regulatory reform

​Let’s follow regulatory regimes used in New Jersey and Wisconsin to change the incentives for utility leaders to invest in their systems adequately and manage them responsibly.

Specifically:

​Best of Both Worlds

  • Regulatory authorities should collect and publicly report performance metrics for each water and sewer system,
  • Water, sewer, and stormwater systems must develop comprehensive asset management plans, and demonstrate that capital assets are adequately maintained.
  • Public Utilities Commission pricing and service quality regulation should be extended to all utilities, not just investor-owned systems.

The great promise of the regulatory regimes pioneered in New Jersey and Wisconsin is that transparency and fairness can make buried infrastructure more visible, and so shift the political and economic incentives for sound management of water systems.

3. Technological transformation

America’s water systems need a technological leap forward with comprehensive deployment of information technology. Let’s get our systems out of the 19th and 20th centuries and into the 21st and 22nd. Funding for water, sewer, and stormwater systems should support data collection and analytical capacity for more effective and efficient investment and operations.

4. Human capital

The water sector needs a stronger supply of human capital, and we need to streamline the labor market. To that end, let’s:

  • Invest in the next generation of water professionals with new and rejuvenated educational and training programs.
  • Create national standards for operator licensing and certification.
  • Build a body of rigorous, data-driven social science research on effective utility management, leadership, and organizations.

5. Environmental justice

Let’s build environmental justice into water, sewer, and stormwater policy. Specifically:

  • Federal and state authorities must establish standard metrics to assess racial, ethnic, and socioeconomic equity in environmental conditions and infrastructure investments.
  • Utilities must collect and publicly report data on service shutoffs and restorations, and work toward an end to shutoffs.
  • Regulators must demonstrate equity in inspections and enforcement actions.
  • Eligibility for federal infrastructure funds must be contingent on utilities demonstrating equity or progress toward equity.
  • Channel extra funding and technical assistance to communities that suffer from significant disparities due to historical or structural disadvantages.

The way forward

Just over a year from now Americans will head to the polls for a pivotal federal election. With water on the national political agenda in a way it hasn’t been since the 1970s, we are, perhaps, an election away from a major federal investment in infrastructure, and with it an opportunity to reimagine water governance. Let’s use that opportunity do more than rebuild pipes; let’s rebuild institutions. If we do it right, those institutions will keep the pipes working for generations to come, and our legacy will be a cleaner environment and healthier, more prosperous people.


*The five-part plan debuted in a talk I gave at as part of the University of Rhode Island’s Metcalf Institute public lecture series last summer. You can catch the whole talk here if you’re so inclined.

Smart People

Water Sector Reform #4: Human Capital

People + Pipes

​With a major federal investment in water infrastructure possibly on the horizon, the United States has a once-in-a-generation opportunity to leverage that money into a structural transformation of America’s water sector. This is the fourth in a series of five posts outlining broad proposals to reform the management, governance, and regulation of U.S. drinking water, sewer, and stormwater systems. The first proposed reform was consolidation of water utilities; the second was an overhaul of financial regulation; the third was investment in information technology.

​My fourth proposal is to invest in water sector human capital through workforce development and streamlining labor markets.

Working for Water

The U.S. water sector’s workforce challenge has been evident for a long time; as early as 2005 observers identified a slow-rolling retirement tsunami washing over utility organizations and recognized that the supply of workers was insufficient to meet the nation’s needs. In many ways, the water sector’s workforce issues mirror those of the wider public sector workforce. But addressing water workforce challenges isn’t just about quantity, it’s about quality.

Once upon a time, water system operations was a semi-skilled job. If you had a strong back, could turn a wrench, and operate a backhoe, you could probably do it. Until recently, a water operator ​could get by with limited reading comprehension and little​ to no aptitude ​for math or science.

This all looks complicated.

​​That’s no longer true. Today water and sewer system operations are highly skilled jobs. Regulations and technology are ever-advancing. Modern water systems require operators who can interpret complex regulations. Operators must have a solid working understanding of physics, chemistry, and biology, and a good command of math. And they have to be able to communicate with management and engage directly with the public.

Water systems are getting smarter; water operators have to be smarter, too.

But highly-skilled operators are in short supply and human capital isn’t evenly distributed. Training up a utility operator takes a lot of time, and in rural or remote parts of the US it can be especially hard to find an adequate supply of educated workers who can be trained to operate water systems.

Human capital & utility performance

Labor availability has measurable effects on effects on water quality. A few years ago David Switzer and I analyzed the relationship between SDWA compliance and the availability of skilled workers in a labor market. We found a strong relationship between labor force education and utility performance.

We also found that larger organizations are more effective in leveraging human capital than small ones. The reason is pretty clear: if you’re a smart, ambitious person interested in a water career, a small utility is at best a stepping stone, at worst a dead-end job. There may be only a handful of employees and the only opportunity for advancement is to wait for another operator to leave—or to leave yourself. So small systems struggle to attract and retain good employees. I heard directly from one utility manager that systems sometimes deliberately choose not to invest in training because they fear that a well-trained employee will leave. It’s a kind of strategic mediocrity.

Licensing labyrinth

Making matters worse, each state has different training and licensing regimes for water operators. There are separate licensing systems for water and sewer. There are separate licensing programs for treatment, distribution, and collection systems. Sometimes states set up reciprocal licensing agreements, but it’s a confusing and frustrating patchwork. All those rules are sand in the gears of the labor market and discourage smart, ambitious people from entering or building careers in the water sector.

Human capital investment

We need to grow the supply of human capital, and we need to streamline the labor market. So proposal number four is to invest in workforce development, and create national certification standards for operators.

This isn’t a particularly new idea—it’s a revival of an old one. Discussions of the 1972 Clean Water Act tend to focus on the pollution controls in Titles III and IV (for obvious reasons). But importantly, the Clean Water Act included a huge federal investment in research and training. In the 1960s environmental engineering was in its infancy as a field, and when Congress passed the Clean Water Act it wasn’t exactly sure how to make the nation’s waters fishable-and-swimmable.* So Uncle Sam built human capital for the water sector as it was building physical infrastructure. It’s telling that Title I of the Clean Water Act was an investment in people, and Title II was an investment in pipes.

Folks in the water sector sometimes refer to the generation of water professionals who emerged in the 1970s and 80s as the “Class of 72,” recognizing that in many ways the field of environmental engineering came of age due to that federal investment. We need a similar investment today to build the next generation of water professionals. We need careful, data-driven research on effective utility management, leadership, and organizations. We need rigorous degree and certificate programs to funnel talent into the water sector. America’s land grant universities (like Texas A&M!) are great institutional venues for these efforts, but there are other good models out there, too.

Freeing the market

Labor markets—like most other markets—work best when buyers and sellers can exchange freely. Along with investments in research and training, we need to harmonize, liberalize, and streamline licensing regimes for water and sewer operations. Instead of a crazy patchwork of training programs and licensing requirements, let’s establish national standards and a national accreditation system for both individuals and training institutions. Organizations like ANSI and AWWA have processes in place to craft water technology standards; the same model could be applied to licensing and certification. With national training and licensing standards in effect, a smart, ambitious person could enter the water sector with the prospect of building a career that could take her anywhere.


*Political scientists call that “speculative augmentation,” which is a polite way of saying “Congress has no idea what to do, so it’s going to kick the problem to experts and hope they can figure it out.” In the case of environmental regulation, it’s worked out reasonably well.

Public Administration & the Border Crisis

Public Administration Professionalism at the Flashpoint

Presidents issue orders, Congress passes laws, and courts make judgments, but immigration policy really succeeds or fails when bureaucrats interact with people seeking entry to the United States. Immigration policy is what happens when an ICE agent detains an individual (or doesn’t), separates children from parents (or doesn’t), and puts kids in cages (or doesn’t). Immigration policy is what happens when a DHS contractor attends to a wailing toddler, or leaves frightened children to their own devices in adherence to administrative guidelines. In the end, human rights are protected or violated not by politicians, but by the men and women who put regulations into action.

What drives bureaucratic behavior?

Although public attention tends to fixate on laws and rules when trying to understand public policy, decades of public administration research indicates that organizational norms and values determine what public servants do. Public employees from soldiers to teachers to police officers look to their peers for informal guidance on what is honorable, acceptable, or forbidden. Monitoring systems and the threat of disciplinary action turn out to be lousy predictors of public administrators’ actions. When bureaucrats enforce (or refuse to enforce) rules, it’s because their fellow bureaucrats sanction that behavior. Smart public agency leaders do not rely solely on orders, but rather seek to instill systems of ethics and build a sense of mission in their organizations.

Professionalization in public administration is an effort to enhance this kind of peer accountability by building loyalty to principles of public service. America’s military academies are excellent examples: they seek to build within officers not only respect for chain-of-command, but also a system of ethics that defines military professionalism. In the ideal, professions provide an “inner-check,” enforced by social approbation or disdain by fellow professionals, that guides individuals to uphold shared norms and resist unethical orders.

Administration at the border

The agencies at the flashpoint of America’s current immigration crisis give plenty of reason to worry. The main bureau charged with implementation of immigration laws is the Immigration and Customs Enforcement (ICE) agency, which was formed fifteen years ago when the US Customs Service (part of the Treasury Department) and Immigration and Naturalization Service (Justice Department) were consolidated within the new Department of Homeland Security as part of the post-9/11 reforms. Organizational culture and professionalization take time to develop, but this young agency has been charged with implementing some of the country’s most vexing and incendiary policies, even as its nascent culture is still forming. In early 2017 the Trump Administration ordered the hiring of 10,000 new ICE agents. Simply hiring and training that many people quickly is a daunting task; professionalizing and building a sense of mission in each new agent even more so. The Federal Bureau of Investigation (FBI) provides a useful contrast. ICE and FBI agents each receive 20 weeks of training upon entry into their agencies. But new FBI agents must also be accomplished college graduates, and upon appointment they enter a highly-professionalized agency with thousands of experienced agents, a storied history, and deep sense of organizational identity. It is not surprising that FBI officials have been more defiant, and ICE officials more acquiescent, in their relationships with the Trump White House.

DHS also relies heavily on private contractors to operate detention facilities, and some of the most troubling accounts of child migrant treatment emerge from these privately-operated facilities. If public administration professionalism implies loyalty to professional norms and ethics, then private contracting does just the opposite. A contractor’s livelihood depends upon satisfying a client (in this case, DHS executives), adhering to regulations, and fulfilling contracts. A contractor whose personnel refuse to treat migrant children as specified in a contract is likely to find that contract terminated.

Administrative evil and public professionalism

Governments can do great good and evil because bureaucratic agencies provide the capacity to put policy into action, as Guy Adams has observed. Administrative evil is not a consequence of inefficiency (the usual bureaucratic lament), but rather a result of a technical rationality that is the very hallmark of bureaucracy. Without professionalism, bureaucrats pass accountability for their actions to political superiors. Indeed, a naïve view of democratic accountability would demand dutiful compliance by ICE agents to orders (or tweets?) issued from above. Public service professionalism implies that a federal employee’s primary duty is to the public good, not to the whims of the person at the top of the organizational chart. Without a foundation of professional ethics and systems of accountability to professional peers, the rational administrator can find himself or herself participating in destructive acts.

So long as the United States has borders, it will need an agency to make those borders meaningful. But building a sense of professionalism and peer-accountability to ethical principles is crucial to ICE’s or any other border enforcement agency’s role in a democratic state. In 1952, political scientist Norton Long reflected on the lessons of the Second World War for American public administration:

It is a fortunate fact of our working constitution that it is complemented by a bureaucracy indoctrinated with the fundamental ideals of constitutionalism… In a real and important sense, it provides a constitutional check on both legislature and executive. It is no neutral instrument like the German bureaucracy, available to Nazi and democrat alike, pleading its orders from ‘die hohe Tiere’ as an excuse for criminal acts.

The decency of the agents charged with implementing public policy is a crucial check against government abuse. Professional public servants are the first line of defense and the last best hope for protecting human dignity in times of political turmoil.