Outten & Golden: Empowering Employees in the Workplace

Archive for August, 2010

Target Wall Street Greed, Not Public Employees

Tuesday, August 31st, 2010
Credit: Joe Kekeris

Credit: Joe Kekeris

Too often when economic times get tough, scapegoats are found in the wrong places. Wall Street greed and double-dealing sparked much of the nation’s recent near-financial collapse, yet many in the chattering classes instead are attacking public employees for this rolling recession.

Economist Dean Baker puts the situation in perspective:

Fifteen million people are not out of work because of generous public employee pensions. Nor is this the reason that millions of homeowners are underwater in their mortgages and facing the loss of their home. In fact, if we cut all public employee pensions in half tomorrow, it would not create a single job or save anyone’s house. The reason that millions of people are suffering is a combination of Wall Street greed and incredible economic mismanagement.

Even as a consensus is emerging among economists that the United States should put job growth ahead of deficit cuts, a new study focused on New England finds that the region no longer can afford to spend scarce resources on tax credits and other business giveaways. Instead, it needs to channel economic development efforts to rebuilding neglected infrastructure and improving education for people at all levels. “Prioritizing Approaches to Economic Development in New England” provides

ample evidence that infrastructure (roads, bridges, dams, energy transmission systems, drinking water, and the like) and education are effective approaches for creating jobs and generating economic growth.

The study, by the Political Economy Research Institute at the University of Massachusetts-Amherst, finds the New England states have too long viewed funding for public services and economic development as competing interests—and that’s a false dichotomy. Sounds like the study can apply to the rest of the country as well.

Demonizing the public sector harms the U.S. middle class, writes Drum Major Institute for Public Policy (DMI) Research Director Amy Traub, who reminds us how fundamental the jobs they do are to our everyday lives:

It’s easy to lose sight of the other ways that a strong public sector supports our economy. Middle-class Americans and the businesses they work for rely on good schools, clean and safe streets, and high quality public services and infrastructure. In so doing, they depend on the dedicated teachers, police, firefighters, librarians, sanitation workers, parks employees, and support staff that keep states and cities running.

States and cities face very real fiscal challenges, but the cause is falling tax revenue due to the deepest recession in decades—not excessive spending or lavish compensation for public workers.

Further, Traub has a recommendation for Congress, some Democrats included:

Trashing our middle class in an effort to cut costs is short sighted. Downgrading the middle-class pay and benefits of public workers only speeds their erosion in the private sector, undermining everyone who works for a living….Rather than attacking public pensions that afford retirees a middle-class standard of living, [lawmakers] should be thinking about how to increase retirement security for millions of private-sector employees with meager savings.

As Progressive States Network points out, extremist anti-worker organizations like the American Legislative Exchange Council have been trying to gut public employee pensions for years—and they are using the recession as a public relations platform.

There is no crisis in most state retirement systems, even according to the numbers of the researchers demanding state leaders take unneeded action to cut the incomes of retirees.  And despite the hype from a few carefully selected anecdotes of retirees gaming pension systems, the reality is that the overwhelming number of public employees receive pretty bare-bones benefits, in some cases not enough even to keep them out of poverty.

Corporate backed anti-worker groups are the winners when the public taps into public-employee blame game. Wall Street is another big winner. The CEOs of Big Banks and the financial industry are happy to see the finger pointed at public employees. It means America’s workers are fighting each other and not united in targeting the real culprit of our economic misfortunes.

This article was originally posted on AFL-CIO NOW Blog.

About the Author: Tula Connell got her first union card while she worked her way through college as a banquet bartender for the Pfister Hotel in Milwaukee (they were represented by a hotel and restaurant local union—the names of the national unions were different then than they are now). With a background in journalism—covering bull roping in Texas and school boards in Virginia—she started working in the labor movement in 1991. Beginning as a writer for SEIU (and OPEIU member), she now blogs under the title of AFL-CIO managing editor.

We Shall Overcome

Monday, August 30th, 2010

Image: Bob RosnerSure, times are tough. One of the most interesting discussions I’ve ever read about surviving tough times comes from a book called, “The Lessons of Experience: How successful executives develop on the job” by McCall, Lombardo and Morrison (Lexington Books, 1988).

The book was a result of extensive interviews with executives on many topics. The most interesting section was on hardship. Five specific hardships were identified by the executives:

·      A personal trauma threatening the health and well-being of the executive or the executive’s family

·      A career setback involving demotions and missed promotions

·      Changing jobs, in which some executives risked their careers to get out of a dead end job

·      Business mistakes, in which bad judgment and poor decisions led to failure

·      A subordinate performance problem forcing the executive to confront people with issues of incompetence or with problems such as alcoholism

What did the researchers find after talking with the executives about hardship?

“As research has shown, the recognition and acceptance of limitations, followed by an effort to redirect oneself, are characteristic of successful people in general. It was how the executive responded, then, not the event itself, that is the key to understanding hardships.”

Duh! Could anything be more obvious?

Maybe, and maybe not.

Tough times have a funny way of eroding your foundation. Causing you to question yourself, lose confidence and get tentative. All of the things that make it harder to respond to challenges at work.

It’s important to remember that tests come with the turf. We’re all tested.

It’s not bad luck. Or a hassle. It’s part of the dance. Pardon another cliché, but this too shall pass.

About The Author: Bob Rosner is a best-selling author and award-winning journalist. For free job and work advice, check out the award-winning workplace911.com. Check the revised edition of his Wall Street Journal best seller, “The Boss’s Survival Guide.” If you have a question for Bob, contact him via [email protected]

The Terrible Public Pension Threat

Friday, August 27th, 2010

Natasha ChartIt’s time for a class war over public union pensions. So says Ron Lieber, writing in the New York Times. Okay, let’s rumble. What’s the score, so far?

Despite defined benefit (DB) pensions, like the ones public employees get, being more economically efficient [pdf] and offering better returns, private employers have mostly switched to 401(k) plans, or defined contribution (DC) plans [pdf], because they’re cheaper. Between 1979 and 2001, the portion of the workforce covered by defined benefit pensions dropped by half. By 2008, only 20 percent of private workers had such a pension.

Businesses saved a lot of money by either switching to low cost 401(k) plans or dumping their pension obligations on the government [pdf]. Did they use their savings to create jobs? Not lately. These days, businesses are firing more people than they need to and sitting on the cash.

If recent history is any guide, those business savings still won’t go to average employee wages, which have been stagnant since the 1970s when union membership started declining to its current 12.3 percent of the labor force. Since 1979, extra savings have gone to the richest 1% of Americans who’ve seen their income go up 281 percent, with CEO pay going up 298 percent as the value of the minimum wage dropped 9.3 percent in value, and the pay of manufacturing and maintenance workers had gone up by only 4.3 percent, as of 2005.

Clearly, the investor class won that round.

The rich were positioned to get richer, even during this recession. It isn’t that there’s no money, it’s that money has been steadily taken out of circulation to be uselessly hoarded by the top one percent of income earners. And now, with government revenues starved by tax cuts for the rich and wage declines for most everyone else, the proposed solution is to break pension obligations to the few people who still have them.

Funny how big a threat pensions are supposed to be, now that they’re so rare. Ha ha.

“Who took our pensions and what do we have to do to get them back?” – Rep. Alan Grayson at Netroots Nation, July 24, 2010

You can see how it would have been harder 50 years ago to attack pensions, as Lieber does, as an unjustified, “terrifying” and “titanic” waste of resources. More people would have agreed with Rep. Grayson’s statement last month that, “everyone who works in America for 30 years should have a pension,” because more of them had decent pensions of their own.

Now, pensions are almost surprising. And about that, Jonathan Cohn had the best next question, emphasis mine:

But ask yourself the same question you should have been asking [during the debate about auto worker pensions]: To what extent is the problem that the retirement benefits for unionized public sector workers have become too generous? And to what extent is the problem that retirement benefits for everybody else have become too stingy?

For their age and education level, public employees receiving pensions make less than comparable private sector workers. They may even be excluded from Social Security benefits, as Dean Baker points out, adding that they tend to make no more than $40,000 to $50,000 per year and that the shortfall in their pension funds comes to less than two percent of government spending over the next 30 years.

One thing that about half of all public employees do for their not-very-princely salaries is educate children. On that score, it’s hard to argue with Paul Krugman’s statement that, “Everything we know about economic growth says that a well-educated population and high-quality infrastructure are crucial.” Not crucial enough to get them 281 percent pay raises, but crucial.

At present, 62 percent of US jobs now require some sort of special training beyond high school and in a decade, that might go up to 75 percent of jobs. Maybe some of these requirements are excessive, but it’s weird to hear anyone say we need less education.

Cut teachers’ lifetime compensation and, one way or another, less education is exactly what we’ll get.

And as for complaining about the pensions of all the other people who make less than their experience and education might be worth, our public police, fire department, emergency, maintenance, construction and engineering workers, you might as well come out in opposition to law and order and in favor of all the trains being late.

The pension alarmists would have us believe that the debate is about whether the public can afford to honor promises to retirees, which is bad enough. Though what it’s actually about is whether ordinary taxpayers should have to either pay for private schools, private bodyguards and private groundskeepers in private real estate developments, or accept that their cities and towns are going to keep falling apart around them because it isn’t anyone’s job to hold them together anymore.

Which is nothing less than a threat to price the average taxpayer out of all the benefits of civilization so that the top one percent of income earners won’t have to suffer the return of Clinton-era tax rates.

About the Author: Natasha Chart has been blogging about the environment, social justice and various other political topics since 2002. She currently writes at MyDD.com and works as an online marketing consultant in Philadelphia.

More Salvos in the False “Class War” on Public Pensions

Thursday, August 26th, 2010

amytraub4Repeat something often enough and it becomes, if not true, at least a solid bit of conventional wisdom. Consider Ron Lieber’s column in Saturday’s New York Times, which neatly recycles an editorial the Wall Street Journal ran back in March. The issue: the pensions that guarantee public employees a middle-class standard of living in retirement have become more difficult for cities and states to afford. This, according to Lieber and the chorus of conservatives singing the same tune, means a “class war” pitting sanitation workers who deferred compensation so that they could retire with dignity against “have-not” taxpayers who would like some retirement security of their own. Lieber even knows the outcome: public workers should to get ready for many more states and municipalities to engage in “rare acts of courage” and break their promises to pensioners.

Jonathan Cohn at the New Republic asks the obvious question “to what extent is the problem that retirement benefits for everybody else have become too stingy?”

It’s a point I’ve been making as well:

One out of three working Americans has no retirement savings to rely on beyond Social Security, many others have saved very little, especially now that the value of their homes has been destroyed. When it’s public pensions that are falling short, it’s very visible. When it’s the private savings of millions of individual households, it’s easy to overlook. But when we start to hear that it has become “too expensive” to provide teachers and police officers with a decent retirement, we know no one else has a chance at retirement security either.

Former Colorado Governor Richard Lamm, quoted in Lieber’s article, takes the point to its logical conclusion, arguing that “the New Deal is demographically obsolete.” Translation: we’d all better get used to the new normal of low pay, few benefits, and no retirement, sooner rather than later. After all, demographics are inexorable. Resistance is futile.

As Paul Krugman points out in today’s Times, the same air of inevitability hangs over the provision of critical state and city services. Cities and states are broke, the argument goes, there’s nothing we can do. We can neither keep streetlights on nor let teachers retire. Except that in both cases the argument is false:

We’re told that we have no choice, that basic government functions — essential services that have been provided for generations — are no longer affordable. And it’s true that state and local governments, hit hard by the recession, are cash-strapped. But they wouldn’t be quite as cash-strapped if their politicians were willing to consider at least some tax increases.

Krugman’s point about how we got here is equally true of the debate around public employees and their pensions:

It’s the logical consequence of three decades of antigovernment rhetoric, rhetoric that has convinced many voters that a dollar collected in taxes is always a dollar wasted, that the public sector can’t do anything right.

Unfortunately, Lieber’s column effectively adds to that rhetoric.

About the Author: Amy Traub is the Director of Research at the Drum Major Institute. A native of the Cleveland area, Amy is a Phi Beta Kappa graduate of the University of Chicago. Before coming to the Drum Major Institute, Amy headed the research department of a major New York City labor union, where her efforts contributed to the resolution of strikes and successful union organizing campaigns by hundreds of working New Yorkers.

Unemployment: The Economists Just Don't Get It

Wednesday, August 25th, 2010

Martin FordLately, there has been a fair amount of buzz in the economics blogosphere about the issue that I’ve been discussing here: Structural Unemployment.

Paul Krugman touches on it here. Brad DeLong says this. Mark Thoma has a post in a forum focusing on structural unemployment at The Economist.

If you read through these posts, however, you won’t see a lot of discussion about the case I’ve been making, which is that advancing technology is the primary culprit. I’ve been arguing that as machines and software become more capable, they are beginning to match the capabilities of the average worker. In other words, as technology advances, a larger and larger fraction of the population will essentially become unemployable. While I think advancing information technology is the primary force driving this, globalization is certainly also playing a major role. (But keep in mind that aspects of globalization such as service offshoring–moving a job electronically to a low wage country–are also technology driven).

The economists sometimes mention technology, but in general they find other “structural” issues to focus on. One that I have seen again and again is this idea that people can’t move to find work because their houses are underwater (the mortgage exceeds the equity). The emphasis given to this issue strikes me as almost silly. Are there any major population centers in the U.S. that have really low unemployment?

Even if people could sell their homes, would they really be motivated to load up the U-haul and move from a city with say 12% unemployment to one where it is only 9%? Have the economists lost sight of the fact that 9% unemployment is still basically a disaster? The few locales I’ve seen with unemployment significantly lower than that are rural or small cities (Bismark ND, for example)–places that are simply incapable of absorbing huge numbers of hopeful workers. Let’s get real: playing musical chairs in a generally miserable environment is not going to solve the unemployment problem.

Another thing the economists focus on is the idea of a skill mismatch. Structural unemployment, they say, occurs because workers don’t have the particular skills demanded by employers. While there’s little doubt that there’s some of this going on, again, I think this issue is given way too much emphasis. The idea that if we could simply re-train everyone, the problem would be solved is simply not credible. If you doubt that, ask any of the thousands of workers who have completed training programs, but still can’t find work.

Economists ought to realize that if a skill mismatch was really the fundamental issue, then employers would be far more willing to invest in training workers. In reality, this rarely happens even among the most highly regarded employers. Suppose Google, for example, is looking for an engineer with very specific skills. What are the chances that Google would hire and then re-train one of the many unemployed 40+ year-old engineers with a background in a slightly different technical area? Well, basically zero.

If employers were really suffering because of a skill mismatch, they could easily help fix the problem. They don’t because they have other, far more profitable options: they can hire offshore low wage workers, or they can invest in automation. Re-training millions of workers in the U.S. is likely to make a killing for the new for-profit schools that are quickly multiplying, but it won’t solve the unemployment problem.

Why are economists so reluctant to seriously consider the implications of advancing technology? I think a lot of it has to do with pure denial. If the problem is a skill mismatch, then there’s an easy conventional solution. If the problem’s a lack of labor mobility, then that will eventually work itself out. But what if the problem is relentlessly advancing technology? What if we are getting close to a “tipping point” where autonomous technology can do the typical jobs that are required by the economy as well as an average worker? Well, that is basically UNTHINKABLE. It’s unthinkable because there are NO conventional solutions.

In my book, The Lights in the Tunnel: Automation, Accelerating Technology, and the Economy of the Future, I do propose a (theoretical) solution, but I would be the first to admit that any viable solution to such a problem would have to be both radical and politically untenable in today’s environment. That’s why I don’t spend much time suggesting solutions here: what would be the point? (but please do read the book–it’s free). I think the first step is to get past denial and start to at least seriously think about the problem in a rational way.

The few economists that have visited my econfuture.wordpress blog and commented on my previous posts have generally barricaded themselves behind economic principles that were formulated more than a century ago (see the comments on my posts about these economic concepts: lump of labour fallacy and comparative advantage).

Most economists seem to be unwilling to really consider this issue–perhaps because it threatens nearly all the assumptions they hold dear. I wrote about this in my first blog post . We’ll see how long it takes for the economists to wake up to what is really happening.

About The Author: Martin Ford is the founder of a Silicon Valley-based software development firm.  He holds a computer engineering degree from the University of Michigan, Ann Arbor and a graduate business degree from the University of California, Los Angeles. He is the author of The Lights in the Tunnel: Automation, Accelerating Technology and the Economy of the Future (available from Amazon or as a FREE PDF eBook) and has a blog at econfuture.wordpress.com.

I recognize you do amazing work, but you're still not getting minimum wage

Tuesday, August 24th, 2010

Image: Richard NegriSomeone sent me an email earlier entitled, “U.S. Senate Declares National Direct Support Professionals Recognition Week.”

The big week of recognition is slotted to begin September 12th.

In the announcement for “Recognition Week,” Senator Ben Nelson says, “Direct support professionals provide an invaluable service to the millions of Americans living with disabilities. I’m proud to honor these hard-working individuals who give so much to help those in need. Their dedication to service is an example to us all.”

So, bravo to the Senate for marking a week in September to honor these workers, but honor and a week of applause doesn’t pay the bills. Surely, they must know this.

While the Senate “recognizes” these workers, more than 1.5 million home care workers are currently living at near-poverty level earning a median income of $17,000 a year. Most of these workers, who both love their work and are good at their work, must have two and three jobs to just make ends meet. Many of these workers need food stamps to put food on their tables. All this ultimately hurts the consumer, who often finds it difficult to find and retain high quality home care services.

Home care workers–the folks who provide essential care and services to more than 13 million seniors and people with disabilities every day–are legally excluded from federal minimum wage and overtime protections.

While we should definitely celebrate these workers’ contribution to society, we should also recognize their needs as working people. Perhaps we should help them get out from near poverty levels and give them the right to have a day off from time to time to take care of their own families? Why shouldn’t they be paid overtime when they work 70 and 80 hours a week with sleepovers as part of the gig?

I’ve mentioned this before in other entries but it is worth repeating: the U.S. Department of Labor has the authority to make this long overdue regulatory change and do the right thing for home care workers and the individuals and families who depend on their services. In other words, they have the authority to turn this around so that home care workers can enjoy the same benefits many take for granted.

What we need to do to bring this change about is let people know that this issue even exists, and second, we need take some very basic actions online.

On Facebook, become a fan of the Department of Labor’s Facebook page and post this message:

Secretary Solis, home care workers deserve minimum wage and overtime protection. It’s time to change the companionship exemption regulations: http://bit.ly/a5pF1e

On Twitter, copy, paste, and tweet this message:

@HildaSolisDOL, it’s time to end the exclusion of home care workers from minimum wage and overtime exemption: http://bit.ly/a5pF1e

On Facebook, you should also become a fan of this campaign’s page:

Homecare Workers Deserve Minimum Wage Protection.

Here’s some legal background on how home care workers came to be legally excluded from federal minimum wage and overtime protections:

* 1938 – The federal Fair Labor Standards Act (FLSA) is enacted to ensure a minimum standard of living for workers through the provision of a minimum wage, overtime pay, and other protections — but domestic workers are excluded.

1974 – The FLSA is amended to include domestic employees such as housekeepers, full-time nannies, chauffeurs, and cleaners. However, persons employed as “companions to the elderly or infirm” remain excluded from the law.

1975 – The Department of Labor (DOL) interprets the “companionship exemption” as including almost all home care workers , even those employed by third parties such as home care agencies.

2001 – The Clinton DOL finds that “significant changes in the home care industry” have occurred and issues a “notice of proposed rulemaking” that would have made important changes to the exemption. The revision process is terminated, however, by the incoming Bush Administration.

2007 – The US Supreme Court, in a case brought by New York home care attendant Evelyn Coke, upholds the DOL’s authority to define exceptions to FLSA.

Today: We are calling on DOL Secretary Hilda Solis to ensure that home care workers receive basic labor protections.

Together we can create the same labor protections for home care workers that virtually ever other worker in the economy enjoys.

About the Author: Richard Negri is the founder of UnionReview.com and is the Online Manager for the International Brotherhood of Teamsters.

Who Wins at Work?

Monday, August 23rd, 2010

Image: Bob RosnerAt a friend’s urging, I recently bought a bike to commute to the new job. I can’t believe how having the wind in my face takes me back to being nine years old.

Okay, I can hear what many of the women reading this are thinking. Jeez, that’s the last thing we need, something to make guys even less mature.

That aside, my friend also gave me a great bit of sage advice. “Cars win.”

After a week of bike riding, I’ve been very safe because of those wise words. Which got me thinking, what else wins at work?

Clearly companies win today. With all the salary cuts, benefit reductions and layoffs, most workers are running scared. But even there, savvy employees can still negotiate with employers to get what they need. The best way to negotiate with your employer? Do it when you first get offered the job. That’s when you have maximum leverage. The next best way to negotiate, have a competing job offer in hand.

Bosses mostly win. Again, when I’ve had a boss, I usually have been able to get what I needed from them. Not because I’m a terrific negotiator, but because I always ask when they’re in a good mood. Trust me, this goes further than you realize.

Coworkers should win. I know the phrase is hackneyed, but doing random acts of kindness for coworkers is so darn wise. Doing favors before you need them in return. Most people take coworkers for granted, I always try to do the exact opposite.

Customers need to win. Really.

I guess I’m naïve enough to think that we don’t have to always have losers just so someone can win.

About The Author: Bob Rosner is a best-selling author and award-winning journalist. For free job and work advice, check out the award-winning workplace911.com. Check the revised edition of his Wall Street Journal best seller, “The Boss’s Survival Guide.” If you have a question for Bob, contact him via [email protected]

Does the Fair Labor Standards Act Hate Home Care Workers?

Friday, August 20th, 2010

Image: Richard NegriFor the last few months I’ve been thinking about and writing about home care workers. In my work, I find that if folks haven’t had to hire a homecare worker for themselves or their family, it appears that most of these workers fall off the radar.

The problem here is somewhat circular. The demand for homecare services is exploding as the baby boomer generation ages and more seniors and people with disabilities choose to live at home rather than in a nursing home. Low wages, no federal minimum wage or overtime protections, and no benefits contribute to homecare workers leaving their profession (turnover is estimated to be as high as 60% per year). Consumers and patients have difficulty finding and keeping homecare services as a result. Which leads to – yes – increasing demand for homecare workers.

How did this happen?

scales-250.jpgWell, it goes all the way back to 1938 when the Fair Labor Standards Act (FLSA) was enacted to ensure a minimum standard of living for workers through the provision of minimum wage, overtime pay, and other protections – but domestic workers, for some reason, were excluded.

Then 36 years later, in 1974, the FLSA was amended to include domestic employees, such as housekeepers, full-time nannies, chauffeurs, and cleaners. However, people who were described as “companions to the elderly or infirm” were for some reason excluded from the law. They were compared to “babysitters.” Weird, huh?

The following year, in 1975, the Department of Labor (DOL) goes on to interpret this “companionship exemption” as including all direct-care workers in the home, even homecare workers employed by third parties, such as home care agencies.

So, in 2001, the Clinton DOL finds that “significant changes in the home care industry” have occurred and issues a “notice of proposed rulemaking” that would have made important changes to this weird exemption. They agreed that it made no sense to exclude this whole industry, as if they were just like “babysitters.”

Clinton’s findings were unfortunately short-lived because the incoming Bush Administration terminated the revision process. Thank you, Mr. Bush.

In 2007 something else happened worth noting: The US Supreme Court, in a case brought by New York home care attendant Evelyn Coke, upheld the DOL’s authority to define this exception to the FLSA. This means, this crazy archaic law can easily be reversed by the DOL.

Meanwhile more than 1.5 million homecare workers are currently living at near poverty level earning a median income of $17,000 a year. Most of these workers, who both love their work and are good at their work, must have two and three jobs to just make ends meet. Many of these workers need food stamps to put food on their tables. All this ultimately comes back to the consumer who often finds it difficult to find and retain high quality homecare services.

The injustice here is, as was said in a June 6 NY Times Op-Ed, ” …while nannies and caregivers make it possible for professional couples to balance the demands of family and work, they often cannot take time to be with their own families when sickness or injury strikes.”

Though I inherently know that we can fix this problem together, I am keen to know what you think is the best way to make this happen.

This article originally appeared on the SEIU Blog.

About the Author: Richard Negri is the founder of UnionReview.com and is the Online Manager for the International Brotherhood of Teamsters.

A Worldwide Revolt Against Poverty Wages

Thursday, August 19th, 2010

Jonathan TasiniYesterday, I wrote about how the decline of U.S. wages has made workers here cheaper to hire than workers in India, at least in the call center industry. Today, the news hails from Asia where workers are rising up against poverty-level wages.

From the Financial Times (and, as a side observation, the FT gives far better insight on a regular basis on these trends than anything you can read in the U.S. traditional press):

Bangladeshi garment workers, who make clothes for western brands such as H&M, Gap and Marks & Spencer, greeted a recent 80 per cent pay rise by rampaging angrily through the capital Dhaka burning cars and looting shops.

For the world’s lowest- paid garment workers, the increase in the minimum wage, effective from November, takes their pay from $23 to $43 (€33, £27.50) a month. It was their first pay rise for four years, a period of soaring food and fuel prices. However, the workers were enraged that Dhaka had not agreed to the $75 a month they had demanded.

“This is not enough for the survival of workers and their families,” said Amirul Haque Amin, president of Bangladesh’s National Garment Workers’ Federation, which has about 23,000 members. “Living costs – including food, clothes, shelter and medical care – are going higher and higher.”

….Demands for better pay across Asia reflect improving job opportunities in economies that are growing faster than their western markets.

….
In Cambodia, Phnom Penh recently raised the minimum wage by 21 per cent  – from $50 a month to $61. That was below what the more activist of Cambodia’s 273 unions demanded, although a three-day, industry-wide strike did not materialise.

Vietnam recorded 200 strikes last year by workers hit by inflation of 9 per cent. In April, for example, nearly 10,000 workers walked out of a Taiwan-owned shoe factory, demanding better pay.

In Indonesia – where powerful trade unions with millions of members play a crucial role in negotiating with employers – minimum wages, set by regional authorities, have been increasing.

In 2008, Jakarta raised the local minimum wage by 10 per cent to nearly $100 a month, although wages in the country’s remoter regions are half that.
….
“There are no industrial relations,” says Mr Alam. “The whole attitude is arrogant and feudal. Owners and government think they are helping the workers. The workers are not treated like workers – they are treated like beggars.”[emphasis added]

What is going on here?

There is a thread that connects the anger coursing throughout the globe about the entire failed economic model foisted upon the world’s workers for decades. Here, people have had it with working hard for decades and seeing all that hard work–productivity has been rising for 30 years–turn into a steady stream of money into the pockets of CEOs and the richest one percent. Republicans and Democrats have supported a bankrupt economic system based on the “free market” and “free trade”, leveraged buyouts that obliterate middle-class jobs and a campaign finance system that greases a knee-jerk granting of tax cuts for business before making sure that regular people can form unions to act as a counter-weight to the rapacious nature of the market.

And what of those jobs flowing abroad? Well, the FT article shows the reality: slave labor. No surprise. Those stories have been surfacing for years–yet, despite the growing poverty around the world, we still have a bi-partisan support (including from our president) for the very so-called “free trade” policies that have bred substandard wages.

Where this leads is not easy to tell. It is easy to talk about worldwide solidarity–and a whole lot harder to make it happen, because of cultural and language differences, the massive physical distances between one slave-wage haven and another, the inability of the poorest to have enough resources to organize on a daily basis…a whole host of reasons.

But, it is clear–the people have had it. They cannot, and should not, put up with the siphoning of the world’s wealth and resources into the hands of a few.

About the Author Jonathan Tasini: is the executive director of Labor Research Association. Tasini ran for the Democratic nomination for the U.S. Senate in New York. For the past 25 years, Jonathan has been a union leader and organizer, a social activist, and a commentator and writer on work, labor and the economy. From 1990 to April 2003, he served as president of the National Writers Union (United Auto Workers Local 1981).He was the lead plaintiff in Tasini vs. The New York Times, the landmark electronic rights case that took on the corporate media’s assault on the rights of thousands of freelance authors.

“But I Signed An Independent Contractor Agreement…”

Wednesday, August 18th, 2010

Patrick KitchinThe Ninth Circuit Court of Appeals Weighs In On Workforce Classification Under California Law

Every time I review an independent contractor agreement I find myself humming George and Ira Gershwin’s song, It Ain’t Necessarily So from Porgy and Bess. In California, at least, such agreements do not prove that a worker is an independent contractor. (“The label placed by the parties on their relationship is not dispositive, and subterfuges are not countenanced.” SG Borello & Sons v. Dept. of Industrial Relations)

Were it otherwise, of course, companies and individuals who hire workers would have an incentive always to require workers to sign independent contractor agreements so they might avoid the costs associated with maintaining a workforce made up of employees. Complying with minimum and overtime wage requirements, paying workers’ compensation insurance premiums, and making rest and meal breaks available are significantly more burdensome and expensive than maintaining a workforce made up of independent contractors. Further, because independent contractors generally are not protected by federal or state anti-discrimination laws, maintaining a workforce comprised of independent contractors can shield companies from civil rights lawsuits.

California’s Multi-Factor Approach

Under California law the existence of an independent contractor agreement is only one of over a dozen factors used by the courts to evaluate whether a worker has been properly classified under the law. The most important factor is the “right to discharge at will, without cause.” In a state where employment is “at will,” but where contracts often include specific provisions pertaining to the termination of the contractor’s services, the right to fire a worker without apparent consequence is a prime indicator of an employment relationship. As the California Supreme Court ruled back in 1989, other factors crucial to the classification determination are:
• whether the one performing services is engaged in a distinct occupation or business;
• the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision;
• the skill required in the particular occupation;
• whether the principal or the worker supplies the instrumentalities, tools, and the place of work for the person doing the work;
• the length of time for which the services are to be performed;
• the method of payment, whether by the time or by the job;
• whether or not the work is a part of the regular business of the principal;
• whether or not the parties believe they are creating the relationship of employer-employee;
• the alleged employee’s opportunity for profit or loss depending on his managerial skill;
• the alleged employee’s investment in equipment or materials required for his task, or his employment of helpers;
• the degree of permanence of the working relationship; and
• whether the service rendered is an integral part of the alleged employer’s business.

California courts are required to evaluate the specific terms of engagement carefully and analyze the conditions under which a person works for another before reaching a classification determination in a wage and hour or discrimination lawsuit. Further, under California law, one who works for another is presumed to be an employee, unless the employing party proves otherwise. The burden of proving the existence of an independent contractor relationship shifts to the “employer” to demonstrate its classification is proper once a worker presents sufficient evidence that he or she performed work for the company. Robinson v. George. This burden shifting is set out in the California Labor Code at section 2750.50.

While determining the proper classification of a worker is extremely fact intensive, and not every factor always points in the same direction, California appellate courts have been consistent in their use of the multi-factor approach set out more than 20 years ago by the California Supreme Court.

The Ninth Circuit Court of Appeals Weighs In

On August 5, 2010, the federal Ninth Circuit Court of Appeals analyzed California’s employment classification law in a lawsuit brought by “independent contractors” of a freight pick-up and delivery service who claimed they had been misclassified as independent contractors.

In Narayan v. EGL, Inc. the Ninth Circuit rejected the defendant’s contention that because its workforce signed independent contractor agreements, the court was compelled as a matter of law to find that its workers were properly classified as such.  The court applied the appropriate California classification test to the facts of the case and ruled that the relationship between the drivers and the freight-handling company was one of employment.  The independent contractor agreement was only one of several factors the court considered in coming to its Porgy and Bess conclusion:  Call it what you may, It Ain’t Necessarily So.

Evaluating the many factors deemed relevant to the determination of the nature of the relationship between the drivers and the company, the Court found, among other indices of an employment relationship, that EGL:
• trained the workers;
• provided them some tools of the trade;
• required them to wear company uniforms;
• required them to paint their vehicles in company colors;
• assigned them routes;
• required them to attend company meetings;
• required them to arrive at a company facility at a set time each day; and
• required them to apply for vacation time;

Based on its analysis of all of these characteristics of the relationship between the drivers and EGL, the Ninth Circuit determined that the lower court’s dismissal of the worker’s employment-based claims was contrary to California law. Though the drivers had signed independent contractor agreements with EGL, the facts demonstrated the workers were employees from start to finish.

While the Ninth Circuit decision in Narayan v. EGL is not earth-shattering or unexpected, the decision is important for California workers whose lawsuits are often transferred (“removed”) from state courts to U.S. District Courts within the Ninth Circuit . The decision re-affirms the Ninth Circuit’s recognition that its District Courts, like California’s Superior Courts, are obliged to use the multi-factor test set out by the California Supreme Court in S.G Borello & Sons v. Department of Industrial Relations many years ago. This is good news for California workers.

About the Author: Patrick Kitchin is a labor rights attorney with offices in San Francisco and Alameda, California. He has represented thousands of employees in both individual and class action cases involving violations of California and federal labor laws since founding his firm in 1999. According to retail experts and the media, his wage and hour class actions against Polo Ralph Lauren, Gap, Banana Republic, and Chico’s led to substantial changes in the retail industry’s labor practices in California. Patrick is a 1992 graduate of The University of Michigan Law School and is personally and professionally committed to the protection of workers’ rights everywhere.

Your Rights Job Survival The Issues Features Resources About This Blog