Outten & Golden: Empowering Employees in the Workplace

Archive for December, 2005

Peace and Good Will Towards Workers: It Starts at Home

Tuesday, December 20th, 2005

It’s the holiday season, where you can read all kinds of heart-warming stories designed to make you feel all warm, fuzzy, and generous inside. However, if you’re an American worker, there isn’t that much good news around right now: a New York City transit strike, massive corporate layoffs among former industry leaders, and an increasing willingness by employers generally to lay off workers during the holidays. But a couple of recent stories indicate that there are some executives out there keeping their workers’ interests in mind. Why? These stories indicate it all starts at home.

It’s hard not to be a little depressed right now in thinking about the world of work. Whether you’re watching the transit strike in New York City wondering whether this is another strike that will leave its members worse off, or a worker in NYC just trying to get to work, the strike is rough on everyone involved. As one stranded commuter pointed out, “They [transit workers] are always suffering,” she said, “but this time it is the working people and the public suffering together.” (See Newsday article.) The transit workers labor under some pretty harrowing conditions (see New York Times article), but also can wield significant power, by virtue of the reliance so many New Yorkers have on transit. One commentator points out, “[A transit strike] is not absolutely devastating in a life-or-death way, but on the other hand is incredibly potent as a weapon.” (See New York Times article.) Stay tuned: it’s likely to stay ugly for a little while.

It used to be that companies, fearing a enduring reputation as Grinches or Scrooges, would hesitate to lay workers off during the holiday season. Not any more, John Challenger, chronicler of job trends, tells us. (See CNN/Money article.) In fact, he says, “It used to be taken for granted that you wouldn’t do layoffs during the holidays, but that hasn’t been the case for at least several years,” pointing out that an employee is actually 54 percent more likely to be laid off in the fourth quarter than any other time of year (especially as companies strive to clean up their books during the fourth quarter. (See Waterbury Republican-American article.) In the last month, we’ve seen such industry titans as General Motors, Merck, Whirlpool and Time Magazine announce significant layoffs.

The only consolation is that it’s also a good time to look for a job, according to Challenger: “January is one of the strongest hiring times of the year, and a lot of the work upfront that leads to those hires goes on now. There are industry parties to go to meet people, and about 20 percent of the people out there stop looking because they think there’s nothing going on. All of which makes this a good time to be looking for a job.” (See CNN/Money article.)

So where’s the good news, you may ask. There may not be so much of it this holiday season, but at least a couple of recent articles remind us that there are still corporate executives out there working very hard to do right by their workers. One headline reflects the utter incredulousness by which most people would view this statement: The Boss Actually Said This: Pay Me Less (available only to TimesSelect readers). The New York Times story by Gretchen Morgenson, the paper’s, if not the nation’s, leading journalist watchdog on corporate pay issues, tells of one Ethan Berman, founder and chief executive of RiskMetrics. The company, based in Manhattan, helps institutions and corporations assess risk in their investments; it is owned by its employees and three private equity firms. It will generate revenue of $100 million this year — hardly chump change in an era of much red ink on corporate profit and loss statements.

What makes Berman’s story so remarkable? In a two-page letter to his board of directors, Berman expresses disappointment in his compensation package for the prior year. Because it was too generous. Yes, that’s right: Berman asked for no increase in salary, zero stock options, a smaller bonus than last year and a piece of the company’s profit-sharing pie equal to that received by all employees — in a year when his company’s revenue grew by more than 40 percent. Contrast Berman to the executives profiled in this column by Ben Stein, hardly an apologist for the free market, called Executives Gone Wild: It’s Not a Pretty Sight. Stein’s right: it’s not a pretty sight when a Delphi executive calls for his workers’ pay to be cut from $25 an hour to $9 or $10, then turns around and asks the bankruptcy court for $510 million to pay its executives during Delphi’s transition out of bankruptcy. And that’s just one example.

What makes Berman a different model from more avaricious corporate executives? One clue resides in the article: it seems to have started at home. When Berman received his first large bonus (more than his annual salary) for toiling in the corporate world, he proudly called his father, merely to receive a sobering response: “The first words out of his mouth were ‘don’t ever feel that you are worth it.’ I don’t want him to say that to me again.” So Berman has become a “hard grader” of his own performance, saying to his board, “My job at this point is developing people, developing success plans to make sure this company will continue to grow and be successful 5 to 10 years from now, and I didn’t get that done.” I hope Dad is proud of his son now, as Ethan Berman is probably worth much more to his company and his workers than he will ever again give himself credit for.

An increased sensitivity to workers also starts at home for W. Douglas Parker, chief executive of the newly-merged America West and US Airways, who is in the midst of overseeing a complicated meshing of different corporate cultures. Parker must listen to an extremely influential flight attendant, his wife Gwen Parker, a former flight attendant and active union member. (See New York Times article.) Mr. Parker says, “In this business you’ll hear, ‘Well, what else are we going to do?’,” referring to repeated management demands to cut workers’ pay, increase their work and reduce benefits. “I was guilty of it in the past.” But, he added: “You can’t say to Gwen, ‘What else are we going to do?’ It’s not going to make for a nice evening at home.”

Mrs. Parker acknowledges that her support of unions caused some conflict early on in their relationship. But after her experience as a flight attendant at American Airlines, where, she says, “They always gave you the feeling you were so easily replaced,” she “helped Doug understand that…you want to be respected for the job you do.” (See New York Times article.) Mr. Parker now has the unenviable task of facing workers fearful of losing seniority and promotional opportunities and being asked for wage concessions and pension cutbacks. Unlike some executives, he’s taking his case directly to workers in employee meetings, attempting to honestly address workers’ fears about working for the post-merger airline. There are difficult post-merger concerns his workers face, and the solutions aren’t going to be easy. But Mr. Parker has already learned at home that you can’t just solve all problems at the expense of your employees.

Thanks to the people in their lives keeping them real, Ethan Berman and Doug Parker provide some examples worth emulating. We can only hope that more executives will be so honest, straightforward, and considerate of their people who make their earnings possible during this holiday season. And if you’re now feeling all warm and generous about Workplace Fairness, who brings these kinds of stories to your attention throughout the year, it’s not too late to contribute to our year-end campaign. Thanks for all your generosity!

Should Corporations Be Responsible for Health Care and Pensions?

Monday, December 12th, 2005

The headline for a column in Monday’s Des Moines Register says it all: Rethink entrusting health care, pensions to corporations. It’s starting to sound like something we need to revisit, considering the states of both the health care and pension systems. However, if employers stop being the primary source of health care and retirement benefits, such as they are — will employers pay more taxes to make that happen? pay higher wages? Or will it just be another instance of employees working more and getting less?

The statistics are startling: While twenty years ago, more than 114,000 U.S. companies provided traditional, defined-benefit pensions to their employees, now only about 30,000 do, and the number keeps falling. (See Des Moines Register article.) Now approximately 1.3 million Americans get their pension checks from the government’s Pension Benefit Guarantee Corp., because their company pension funds went bust. More companies have defaulted on their pension promises in the last three years than in the previous 27 years of the PBGC’s existence.

The health care statistics aren’t much better. In 1979, 70% of private-sector jobs provided health benefits; by 2004, only 60% did. In the last four years, workers’ health premiums increased 50%, about $1,000 per family, three times the average increase in income. (See Short-Changed: Critical Condition).

If we’re expecting corporations to ensure that the American worker had adequate health care coverage while working, and adequate retirement savings once he or she stops working, it’s just not happening like it used to. The expectation that workers’ needs will be taken care of by their employers is no longer necessarily a reasonable one. So it makes sense to question, as Register columnist Richard Doak does, whether you can count on a corporation to be there when you really need it. He astutely points out: “[W]e’ve built much of our lives in this country around the presumption that corporations are benevolent and eternal. They’re neither, as millions of former employees have learned to their dismay in recent years.” (See Des Moines Register article.)

Whether it’s avoiding bankruptcy or maximizing profits at stake, it’s clear that many companies are concluding that they no longer have to provide health benefits and/or a pension plan to stay competitive. In fact, the opposite is fast becoming true, where corporations seeking to eliminate benefits, either unilaterally or through union negotiations, claim that they cannot maintain such benefits and remain competitive.

Just last week, Verizon Communications, in a move that it certain to ripple through the telecommunications industry, announced that in mid-2006, it would stop contributing to pension plans for managers. (See USA Today article.) Verizon is hardly facing bankruptcy: it reported in October that its third-quarter earnings were $1.9 billion and “sustained overall revenue and customer growth” in the quarter. Nonetheless, the company claims that in order to stay competitive, it has to make the pension plan cuts. Verizon workers who have counted on the plans are outraged: one manager, 25-year veteran Maureen Aeckerle, responded, ”I was crying for two days because I just felt so betrayed. I just felt they look at us as being so worthless.” (See Associated Press article.) Other healthy companies looking to cut costs are certain to follow suit.

There are many similarities between the national declines in pension coverage and health care coverage. Workers who formerly could count on such coverage being available in most full-time jobs are now forced to make difficult decisions about when and if retirement is even possible, and stay in unfulfilling jobs just to maintain benefit coverage. Even then, they may have little protection if their company goes bankrupt, has massive layoffs, or even decides to follow the lead of other sector leaders to cut benefits, knowing that many workers have no choice but to swallow the changes and keep working for less money.

But what will crop up in its place? Pensions have normally been part of a three-part retirement strategy for Americans, coupled with private savings (becoming less and less possible in a time of slow wage growth) and Social Security (whose own future is increasingly uncertain?)

Will corporations pay higher taxes to support seniors, or will we again accept the very status quo that Social Security was created to counteract: that seniors should not be forced to live in extreme poverty once they are no longer able to work. Will corporations pay higher taxes to support better public health care and/or universal coverage, or will the working poor continue to cause the ranks of the uninsured to swell further?

Now that it is increasingly difficult to file for personal bankruptcy, what will happen to those impoverished by huge health care bills? Will our national mortality rate increase because we can’t figure out a way to ensure that costly medical care is available to everyone who needs it?

Tough questions for tough times: who will pick up the slack here? If not corporate America, and not our government, then who?

More Information:

Workplace Fairness: Short-Changed
Critical Condition: healthcare
Broken Promises: retirement

Making a Difference this Holiday Season

Tuesday, December 6th, 2005

Fed up with the commercialism of the holiday season? Want to make sure your purchases go toward helping workers, rather than exploiting them? While we can’t wave a wand and make all of the excesses of this time of year go away, we have some suggestions for making a difference with your holiday shopping, if like me, you’re not one of those hyper-organized people who have all of their holiday purchasing completed before Halloween.

Of course, we have to start with ways that you can support Workplace Fairness. Through our partnership with Powell’s Books, a progressive unionized bookstore in Portland, Oregon, every purchase you make will not only support Workplace Fairness, but will support Powell’s mission, as well: “We have a social responsibility to the community and to our industry to fight censorship, promote literary awareness and encourage authors and their works.” While you’re at it, please contribute to our “Recommended Reading List,” where our site visitors share what great books they’re reading these days.

There are a couple of books that we recommend that you don’t have to purchase from Powell’s: our publications Your Rights in the Workplace, and the Federal Employee’s Legal Survival Guide. Available here at our site, our publications are a great gift for anyone who wants to know more about their rights or who may be currently encountering problems at work. Published by Nolo Press, Your Rights in the Workplace is an invaluable reference for every worker in every state, covering all of your rights as an employee, from the first day on the job to the last.

The new 2nd Edition of the Federal Employee’s Legal Survival Guide, already the definitive how-to guide for enforcing the rights of federal employees, has 100 new pages of additional and useful information that no government employee should be without. And if there’s an employment lawyer on your holiday gift list, a subscription to the Employee Rights and Employment Policy Journal, with its diverse perspectives on legal and law related issues that affect the well-being of employees in the workplace, makes a great gift.

This holiday season, alternative gift fairs are cropping up as a way for those who want to honor friends and relatives with donations to causes that fit their values. The fairs provide critical support for a diverse collection of organizations with established track records of helping people and the environment. In a room filled with tables staffed by representatives of local, national and international charities, you can purchase tax-deductible gifts, ranging from $5 to $100, such as garden plots for urban families in the United States, microenterprise loans to Haitian families, solar cookers for refugees in Kenya, solar water systems for hurricane victims in Honduras, and cargo bicycles for South Africans. (See Alternative Gift Fairs Description.) Here’s where you can find an alternative gift fair near you: Events Calendar, or if there aren’t any upcoming fairs near you, check out the site’s Holiday Shopping Guide.

The Union Shop, hosted by the AFL-CIO, is your source for union-made-in the USA gear and gifts. Whether it’s a “Rosie the Riveter” t-shirt for her, or an “I’m a Little Wobbly” shirt for your little rabblerouser-to-be, you’ll find lots of fun union-related gear here. The Union Shop has links to other union online stores, so you can support whatever union is nearest and dearest to your heart (including our friends at the United Steelworkers — their associate membership program would also be a great gift).

You can also stock up on your anti-Wal-Mart products here, as it should go without saying that you want to avoid at all costs shopping at this mega-retailer over the holidays. (See Wal-Mart: Bad for Workers, Bad for America.) (For those of you who return over the holidays to rural areas where Wal-Mart reigns supreme, this time of year presents a great opportunity for you to educate your friends and family about how Wal-Mart hurts American workers.) If you’re interested in labor books, check out labor’s bookstore, Union Communication Services.

It’s also the time of year when many worthwhile charities make their annual fundraising pitches, and Workplace Fairness is no exception. If over the past year, you’ve derived some benefit from our daily and weekly e-newsletters, our premiere website for workers, or this blog, Today’s Workplace, or you support our work to restore a sense of fairness to working people everywhere, then your contribution to our continued growth and success would be very much appreciated. If you’re involved in litigation, either as an attorney or plaintiff, please join our 1% for Justice program, where your success helps us build a better climate for employee rights advocacy as well as a better future for working people. In the next year, with your support, we will:

  • complete the 2nd generation of our website;
  • use our acclaimed website technology to mobilize workers everywhere;
  • translate our website into Spanish and other languages to serve millions more workers who need help; and
  • leverage our alliances with like-minded organizations to further advance the rights of employees everywhere.

Thanks for your continued support, and happy shopping, everyone!

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