Archive for September, 2016
Friday, September 30th, 2016
In the late 1970s, my early years at the University of Massachusetts Boston (UMB), the Department of Economics had two secretaries. When I retired, in 2008, the number of faculty members and students in the department had increased, but there was only one secretary. All the faculty members had their own computers, with which they did much of the work that secretaries had previously done.
I would guess that over those thirty years, the number of departmental secretaries and other secretaries in the university declined by as many as 100, replaced by information technology—what has now become the foundation of artificial intelligence. As I started writing this column, however, I looked on the university’s web site and counted about 100 people with jobs in various parts of the Information Technology Department. Neither this department nor those jobs existed in my early years at UMB. The advance in technology that eliminated so many secretaries also created as many jobs as it eliminated—perhaps more.
My little example parallels the larger and more widely cited changes on U.S. farms in the 20th century—a century when the diesel engine, artificial fertilizers, and other products of industry reduced the percentage of the labor force working on farms from 40% to 2%. No massive unemployment resulted (though a lot of horses, mules, and oxen did lose their jobs). The great expansion of urban industrial production along with the growth of the service sector created employment that balanced the displacement of workers on the farms.
Other cases are cited in debates over the impact of artificial intelligence, examples ranging from handloom weavers’ resistance to new machinery in the early stages of the Industrial Revolution to a widespread concern about “automation” in the 1960s. Generally, however, the new technologies, while displacing workers in some realms of production, also raised productivity and economic growth. There has, as a result, been increased demand for old products and demand for new products, creating more and different jobs.
Historically, it seems, each time prophecies foretold massive unemployment resulting from major technological innovations, they turned out to be wrong. Indeed, often the same forces that threatened existing jobs created new jobs. The transitions were traumatic and harmful for the people losing their jobs, but massive unemployment was not the consequence.
Is This Time Different?
Today, as we move further into the 21st century, many people are arguing that artificial intelligence—sophisticated robotics—is different from past technological shifts, will replace human labor of virtually all types, and could generate massive unemployment. Are things really different this time? Just because someone, once again, walks around with a sign saying, “The world is about end,” doesn’t mean the world really isn’t about to end!
In much of modern history, the substitution of machines for people has involved physical labor. That was the case with handloom weavers in the early 19th century and is a phenomenon we all take for granted when we observe heavy machinery, instead of hand labor, on construction sites. Even as robotics entered industry, as on automobile assembly lines, the robots were doing tasks that had previously been done with human physical labor.
“Robotics” today, however, involves much more than the operation of traditional robots, the machines that simulate human physical labor. Robots now are rapidly approaching the ability, if they do not already have it, to learn from experience, respond to changes in situations, compare, compute, read, hear, smell, and make extremely rapid adjustments (“decisions”) in their actions—which can include everything from moving boxes to parsing data. In part, these capabilities are results of the extreme progress in the speed and memory capacity of computers.
They are also the result of the emergence of “Cloud Robotics” and “Deep Learning.” In Cloud Robotics, each robot gathers information and experiences from other robots via “the cloud” and thus learns more and does so more quickly. Deep Learning involves a set of software that is designed to simulate the human neocortex, the part of the brain where thinking takes place. The software (also often cloud-based) recognizes patterns—sounds, images, and other data—and, in effect, learns.
While individual robots—like traditional machines—are often designed for special tasks, the basic robot capabilities are applicable to a broad variety of activities. Thus, as they are developed to the point of practical application, they can be brought into a wide variety of activities during the same period. Moreover, according to those who believe “this time is different,” that period of transition is close at hand and could be very short. The disruption of human labor across the economy would happen virtually all at once, so adjustments would be difficult—thus, the specter of massive unemployment.
People under thirty may take much of what is happening with information technology (including artificial intelligence) for granted, but those of us who are older find the changes awe-inspiring. Nonetheless, I am persuaded by historical experience and remain skeptical about the likelihood of massive unemployment. Moreover, although big changes are coming rapidly in the laboratories, their practical applications across multiple industries will take time.
While the adoption of artificial technology may not take place as rapidly and widely as the doomsday forecasters tell us, I expect that over the next few decades many, many jobs will be replaced. But as with historical experience, the expansion of productivity and the increase of average income will tend to generate rising demand, which will be met with both new products and more of the old ones; new jobs will open up and absorb the labor force. (But hang on to that phrase “average income.”)
Even if my skepticism is warranted, the advent of the era of artificial intelligence will create real problems, perhaps worse than in earlier eras. Most obvious, even when society in general (on average) gains, there are always losers from economic change. Workers who get replaced by robots may not be the ones who find jobs in new or expanding activity elsewhere. And, as has been the case for workers who lost their jobs in the Great Recession, those who succeed in finding new jobs often do so only with lower wages.
Beyond the wage issue, the introduction of new machinery—traditional machines or robots—often affects the nature and, importantly, the speed of work. The mechanized assembly line is the classic example, but computers—and, we can assume, robotics more generally—allow for more thorough monitoring and control of the activity of human workers. The handloom weavers who opposed the introduction of machines in the early 19th century were resisting the speed-up brought by the machines as well as the elimination of jobs. (The Luddite movement of Northwest England, while derided for incidents of smashing machines, was a reaction to real threats to their lives.)
More broadly, there is the question of how artificial intelligence will affect the distribution of income. However intelligent robots may be, they are still machines which, like slaves, have owners (whether owners of physical hardware, patents on the machines, or copyrights on the software). Will the owners be able to reap the lion’s share of the gains that come with the rising productivity of this major innovation? In the context of the extremely high degree of inequality that now exists as artificial intelligence is coming online, there is good reason for concern.
As has been the case with the information technology innovations that have already taken place—Microsoft, Apple, Google, and Facebook leap to mind—highly educated or specially skilled (or just lucky) workers are likely to share some of the gains from artificial intelligence. But with the great inequalities that exist in the U.S. educational system, the gains of a small group of elite workers would be unlikely to dampen the trend toward greater income inequality.
Income inequality in the United States has been increasing for the past 40 years, and labor’s share of total income has fallen since the middle of the last century—from 72% in 1947 to 63% in 2014. The rise of artificial intelligence, as it is now taking place, is likely to contribute to the continuation of these trends. This has broad implications for people’s well-being, but also for the continuation of economic growth. Even as average income is rising, if it is increasingly concentrated among a small group at the top, aggregate demand may be insufficient to absorb the rising output. The result would be slow growth at best and possibly severe crisis. (See “Are We Stuck in an Extended Period of Economic Stagnation?” D&S, July/August 2016.)
Over the long run, technological improvements that generate greater productivity have yielded some widely shared benefits. In the United States and other high-income countries, workers’ real incomes have risen substantially since the dawn of the Industrial Revolution. Moreover, a significant part of the gains for workers has come in the form of an increase in leisure time. Rising productivity from artificial intelligence holds out the possibility, in spite of the trends of recent decades, for a shift away from consumerism towards a resumption of the long-term trend toward more leisure—and, I would venture, more pleasant lives.
Yet, even as economic growth over the past 200 years has meant absolute gains for working people, some groups have fared much better than others. Moreover, even with absolute gains, relative gains have been limited. With some periods of exception, great inequalities have persisted, and those inequalities weigh heavily against the absolute rises in real wages and leisure. (And in some parts of the last two centuries—the last few decades in particular—gains for working people have not followed from rising productivity and economic growth.)
So even though I’m skeptical that artificial intelligence will generate massive unemployment, I fear that it may reinforce, and perhaps increase, economic inequality.
This article originally appeared at dollarsandsense.org on September 29, 2016. Reprinted with permission.
Wednesday, September 28th, 2016
Workers employed by candy manufacturer, Just Born Quality Confections, in Bethlehem, Pennsylvania, are on strike over the company’s pension plan proposal. The strike, workers allege, hits the company—which makes Peeps, as well as Mike and Ike and Hot Tamales candies—just as next year’s Easter orders are meant to be made.
“This is my livelihood,” says Alex Fattore, a mechanic who has been at Just Born since 1980. “We make Easter happen. I want to go back in there and make Easter happen.”
Roughly 400 workers walked off the job September 7, drawing a hard line against the company’s attempt to switch new hires to a 401(k), instead of the multiemployer pension plan that workers are presently a part of. They are represented by the Bakery, Confectionery, Tobacco Workers and Grain Millers (BCTGM) Union Local 6.
The company claims that it’s concerned about the pension plan’s long-term viability. The plan reported assets of $5 billion and liabilities of $8 billion, and projected insolvency within 14 years, according to the company. The union, however, counters that the company is not allowed to put pension details on the negotiating table, per pension fund rules. The company is pushing its plan as a part of collective bargaining negotiations for an agreement that expired in June.
“The company is growing,” says chief shop steward Keith Turner, a machinist with 21 years of Just Born experience, alluding to its claims of double-digit growth. “It’s kind of ironic that they would turn around now and tell us that they can’t afford anything.”
Workers additionally claim that if the move to a 401(k) plan for new hires were to go into effect, it would only further weaken the multiemployer pension fund, forcing the fund’s trustees to reduce retiree benefits.
Just Born did not respond to a request to comment, but it released a statement that read, in part: “Our proposal—to have existing associates remain in the current pension plan and to have future hires participate in a 401(k) plan—provides a respectful path that honors our current associates’ existing benefits, and provides a sustainable retirement benefit for our future hires.”
“It’s the equivalent of—let’s say you signed a 30-year mortgage, and after 20 years you decide, you know I don’t want to pay this part of it anymore so I’m just not going to—and you just can’t do that,” Turner tells In These Times.
The Pennsylvania AFL-CIO has called for a boycott of Just Born products.
While this is the first strike at a Just Born facility in decades, this is not the first time the company has attempted to impose a change in pension plans, according to union officials. Last year, the company implemented a final contract including the same 401(k) plan proposed at the Bethlehem plant, after declaring an impasse in its contract negotiations with the roughly 35 workers at its Goldenberg’s Peanut Chews factory in Philadelphia. BCTGM challenged the change with the National Labor Relations Board but was denied, leading the union to take the matter to federal court in a case that is still pending, a year and a half later.
“We’ll say, a few years from now, if we didn’t stand up and stand our ground—that we had the opportunity to stand our ground with this company and say we aren’t going to take this,” Fattore tells In These Times. “We’re going to stand our ground and we’re going to fight (for) what’s right.”
Since workers voted to strike, they have tried to keep up morale. An unfair labor practice charge was filed by Local 6 after allegedly discovering that an individual affiliated with Just Born contacted striking workers, posing as a union official, telling them to return to work. The complaint, filed with the National Labor Relations Board, is pending.
Another, more public, company action that is causing substantial worry among striking Just Born workers is the hiring of replacement workers at the facility, with about 175 reportedly attending a job fair and another 600 applying for jobs online. As of press time, both sides have agreed to come back to the bargaining table alongside a federal mediator this week.
“We pretty well know from people inside, and from what we can see on the outside, that they haven’t made a Peep yet,” says Turner. “The longer that this goes on, the more squeezed that they are for their Peep production. We’re hoping that a little bit of hunger from us, and a little bit of hunger from them, makes something happen.”
This blog originally appeared at inthesetimes.com on September 27, 2016. Reprinted with permission.
Mario Vasquez is a writer from southern California. He is a regular contributor to Working In These Times. Follow him on Twitter @mario_vsqz or email him firstname.lastname@example.org.
Monday, September 26th, 2016
Last December, after a long period of keeping the Fed funds rate near zero, the FOMC voted unanimouslyto raise the Fed funds rate by one-quarter to one-half points. It was anticipated that would be the first in a series of increases of similar small amounts. But, over the course of this year, the economy has run rather flat. Employment in the areas sensitive to interest rates like construction and manufacturing, after employment gains during 2015, ran flat. Durable goods manufacturing, which had been declining during 2015, continued to fall. In 2015, the unemployment rate fell from 5.7% in January to 5.0% in October. It has since remained stuck at about that level.
Ideally, when the Federal Reserve gets things right, the economy runs neither too hot or too cold. Eight months of flat unemployment rates and tepid GDP growth would suggest the Fed has clearly succeeded in finding a landing that, so far hasn’t meant crashing the economy. At least, on Wednesday, the evidence from modest GDP growth, flat unemployment and very low inflation convinced the six Board of Governors and the president of the New York Federal Reserve Regional Bank to hold steady; a tribute to Janet Yellen’s leadership to stay focused on the data and the real economy.
But, the other three regional bank presidents, Esther George of Kansas City, Loretta Mester of Cleveland and Eric Rosengren of Boston, all voted to raise the rate now. Another point of context is understanding the global economy is growing slower. The other major world economies, Europe, Japan and China, are struggling with slow growth. Their central banks are operating with either zero or negative interest rates. America’s modest growth looks very good next to their anemic performance. So this is making the dollar very strong. And that helps to explain the weakness of U.S. manufacturing because a strong dollar hurts U.S. exports. So even modest increases in U.S. interest rates are big by global standards and could further disadvantage U.S. manufacturing.
A second context is that the excess level of savings, globally, is chasing down projections of interest rate levels. Currently, the consensus at the Fed is that in the midterm, the Fed funds rate is likely to be around 1.9% at the end of 2018, and in the long run the normal rate is expected to be about 2.9%. On the eve of the Great Recession, the Fed funds rate was 5.25%. Compared to 2.9%, a raise to between one-half and three-quarters is not small. It isn’t like when the “normal” rate was above 5%.
The current tension in the FOMC between the Board of Governors and the regional bank presidents continues the controversy whether banks have too much say. Independence of the Fed from the political process is important. But, so too is Fed independence from the banks they need to regulate and oversee to make sure we have economic stability. The vote from Wall Street was positive. The stock market gains show a consensus the Fed is doing it right.
This blog originally appeared in aflcio.org on September 23, 2016. Reprinted with permission.
William E. Spriggs serves as Chief Economist to the AFL-CIO, and is a professor in, and former Chair of, the Department of Economics at Howard University. Follow Spriggs on Twitter: @WSpriggs.
Friday, September 23rd, 2016
The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) came out this week in support of the Dakota Access Pipeline, the construction of which was delayed last week by an order from the Obama administration—a decision that itself stemmed from months of protests led by the Standing Rock Sioux.
In a statement, Richard Trumka, AFL-CIO president, said, “We believe that community involvement in decisions about constructing and locating pipelines is important and necessary, particularly in sensitive situations like those involving places of significance to Native Americas.”
This week has shown a stark divide between parts of American labor and today’s social movements. Progressive unions face an uphill battle on many issues, within and outside of organized labor. (Peg Hunter/ Flickr)
But it “is fundamentally unfair,” he added, “to hold union members’ livelihoods and their families’ financial security hostage to endless delay. The Dakota Access Pipeline is providing over 4,500 high-quality, family supporting jobs.
“(Trying) to make climate policy by attacking individual construction projects is neither effective nor fair to the workers involved. The AFL-CIO calls on the Obama Administration to allow construction of the Dakota Access Pipeline to continue.”
It’s an open secret in labor that North America’s Building Trades Unions—including many that represent pipeline workers—have an at-times dominating presence within the federation’s 56-union membership. Pipeline jobs are well-paying union construction gigs, and workers on the Dakota Access Pipeline (DAPL) can make some $37 an hour plus benefits. As one DAPL worker and Laborers International Union member told The Des Moines Register, “You’ve got to make that money when you can make it.”
But an old blue-green mantra says, “there are no jobs on a dead planet.” The parts of organized labor that have taken that phrase to heart are far from unified around Trumka’s DAPL backing—even within the AFL-CIO. National Nurses United (NNU) has had members on the ground at Standing Rock protests and others around the country have participated in a national day of action.
“Nurses understand the need for quality jobs while also taking strong action to address the climate crisis and respecting the sovereign rights of First Nation people,” said RoseAnn DeMoro, NNU’s executive director and a national vice president of the AFL-CIO.
In response to the federation’s endorsement, DeMoro cited the work of economist Robert Pollin, who found that spending on renewable energy creates approximately three times as many jobs as the same spending on maintaining the fossil fuel sector.
NNU isn’t alone. As protests swelled this month, the Communications Workers of America (CWA) released a statement in support of the Standing Rock Sioux, stating that “CWA stands with all working people as they struggle for dignity, respect and justice in the workplace and in their communities.”
Unions like the Amalgamated Transit Union and the United Electrical Workers have each issued similar statements supporting protests against the pipeline, and calling on the Obama administration to step in and block the project permanently.
For those who follow labor and the environment, however, the above unions might be familiar names. Many were vocal advocates for a stronger climate deal in Paris, and sent members to COP21 at the end of last year. They were also those most vehemently opposed to the Keystone XL pipeline, and all supported Bernie Sanders’ primary campaign against Hillary Clinton. While friendly to progressives, these unions have tended to have a relatively limited impact on bigger unions, like the American Federation of Teachers and the American Federation of State, County and Municipal Employees (AFSCME).
According to Sean Sweeney, though, this small group of unions might now be gaining strength. “Progressive unions are becoming a more coherent force,” he told In These Times.
Sweeney helped found a project called Trade Unions for Energy Democracy, which works with unions around the world on climate change and the transition away from fossil fuels, including the National Education Association and Service Employees International Union (SEIU) Local 32BJ in the United States. He also runs the International Program for Labor, Climate and the Environment at City University of New York’s Murphy Institute.
“It could be said that it’s just the same old gang making the same old noise, but for health unions and transport unions to go up against the building trades and their powerful message and equally powerful determination to win … that was a bit of a cultural shift in the labor movement,” he said, referencing the fights against the Keystone XL and Dakota Access pipelines. “That suggests that it’s going to continue.”
Sweeney mentioned, too, that it wasn’t until much later in the fight around Keystone XL that even progressive unions came out against it. “A lot of these unions,” he added, “know a lot more about energy and pollution and climate change than they did before.”
Between Trumka’s DAPL endorsement and the Fraternal Order of Police’s endorsement of Donald Trump for president, this week has shown a stark divide between parts of American labor and today’s social movements. Progressive unions face an uphill battle on many issues, within and outside of organized labor. The question now—on the Dakota Access Pipeline—is whether today’s “Keystone moment” can break new ground in the jobs versus environment debate.
This blog originally appeared at InTheseTimes.org on September, 13, 2016. Reprinted with permission.
Kate Aronoff is a writing fellow at In These Times covering the 2016 election and the politics of climate change. Follow her on Twitter @katearonoff
Thursday, September 22nd, 2016
Another day, another scandal at the big banks.
Since the financial crisis, banks like Barclays and UBS have been caught manipulating interest rates; J.P. Morgan has reluctantly handed over billions for its association with Bernie Madoff, illegal hiring practices, and lax oversight of its own traders among its other misdeeds; while Goldman Sachs has been fined billions for selling toxic subprime mortgages to investors. This past week the Consumer Financial Protection Bureau (CFPB) fined Wells Fargo $185 million for creating fake accounts and assigning them to unwitting customers. While this outrage shows the need for tighter regulation, it also exposes the urgent need to end the anti-consumer practice of forced arbitration in financial service agreements. If consumers cannot access the courts, scandals will be harder to uncover and victims will find it nearly impossible to achieve justice.
(Photo by Justin Sullivan/Getty Images)
Over the last decade, Wells Fargo has pioneered a business strategy called “cross-selling.” The idea is to get customers to use other products sold by the bank. If you have a checking account, try out a credit card. If you like our investment services, why not get a mortgage? High level managers bullied subordinates into hitting impossible account-creation targets. The result was massive fraud: according to the CFPB, Wells Fargo opened 1,534,280 deposit accounts and 565,443 credit-card accounts “that may not have been authorized, by using consumers’ information without their knowledge or consent.” More than 100,000 of these accounts were charged fees: in other words, Wells Fargo customers paid late fees for accounts they never opened and never wanted.
The scope of the scandal is breathtaking. Wells Fargo has already fired more than 5,300 employees and the victims of its illegal scheme likely number in the hundreds of thousands. On its face, this would seem the perfect instance for a class action lawsuit (in which similarly situated plaintiffs come together to bring a lawsuit). Wells Fargo, however, has a notoriously stringent arbitration agreement. Instead of allowing those who have a “disagreement” with the company to bring a lawsuit, they force them into an out-of-court arbitration.
Arbitrators aren’t required to follow precedent, nor do they abide by encoded rules of procedure. They can make their decisions on a whim and without a hearing, and these rulings cannot be appealed. Their income depends on being rehired by the companies themselves. Studies consistently show that arbitrators favor their corporate benefactors. This is unsurprising: corporations wouldn’t be rushing to write new forced arbitration agreements if this alternative system was more likely to favor the consumer.
Wells Fargo’s forced arbitration clause is particularly harsh and exceptionally broad. Paul Bland, an attorney at Public Justice, has called it “one of the most anti-consumer, egregious”clauses in the industry while attorney John Keating found it “startlingly unconscionable.” According to Wells Fargo’s 2016 business account agreement, all clients “irrevocably…waive the right to a trial by jury.”
Noting the stark language of the agreement, federal Judge Vincent Chhabria found that the agreement was broad enough to cover any dispute between the bank and its clients, thus denying defrauded clients access to the courts. Never mind that consumers can hardly agree to anything with regard to accounts they never opened or desired in the first place.
Federal agencies are taking steps to curb the use of forced arbitration. The CFPB has released a proposed rule that would prohibit class action bans in arbitration clauses, while the Department of Education is considering similar provisions in education contracts (for-profit colleges are infamous for their iron clad mandatory arbitration clauses). President Obama has signed an Executive Order granting the Labor Department authority to prohibit companies with federal contracts of more than $1 million from enforcing such clauses. The Department of Defense, having seen the unfairness of forced arbitration on our men and women in uniform, has prohibited forced arbitration in credit cards and auto loans to service members.
These steps, if finalized, will not only help ensure justice for those already wronged, but prevent future scandals. If wrongdoing is exposed before a public court of law instead of behind closed doors, corporations will be less likely to cheat their customers. And if companies must confront an impartial judge and jury, wronged consumers are much more likely to win relief.
Ending forced arbitration would not only help the victims of this Wells Fargo scandal, it may prevent the next one.
This blog originally appeared in afj.org on September 20, 2016. Reprinted with permission.
Aaron Jordan serves as a Dorot legal fellow at Alliance for Justice. As a member of the Justice program, he works on and writes about judicial nominations, the Supreme Court, and the civil justice system. Aaron received his B.A. in History from Davidson College and his J.D. from the University of Pennsylvania Law School. At Penn, Aaron was the Articles Editor for the Journal of International Law, a Project Coordinator for the International Human Rights Advocates, and a Teaching Assistant in Constitutional Law for Professor Rogers Smith. During law school, Aaron had internships for the organizations Voices on the Border and Human Rights First, and worked as a law clerk for Congressman Gregory Meeks (D-NY) and Senator Patrick Leahy (D-VT). After graduating from college, Aaron spent a year teaching in Honduras, where he started an ongoing scholarship to fund the education of deserving, underprivileged children.
Wednesday, September 21st, 2016
If you were lamenting that Labor Day’s current day association with leisure has obfuscated the true meaning of the holiday—don’t despair because the working people of Boulder Station Hotel & Casino got together over the Labor Day weekend and after a long battle said, “Union Yes!”
More than 570 Boulder Station workers will now enjoy and exercise their right to come together and make things better at their workplace with the Culinary Workers Union Local 226 and the Bartenders Union Local 165. Boulder Station is the first of Station Casinos’ properties in Nevada to vote yes for unionization.
“It is very simple: We voted for the union because we want to have a union at Boulder Station,” said Rodrigo Solano, a cook at the casino, which opened in 1994. “After all these years of fighting to make our jobs better, it is time for management to listen to us: We want to have fair wages and good health benefits like tens of thousands of other casino workers in Las Vegas.”
At the large casino-hotels owned and operated by Station Casinos in Las Vegas, including the soon-to-be-acquired Palms Casino Resort, workers have been publicly demanding a fair process to exercise their right to choose whether to form a union. Station Casinos responded with a vicious anti-union campaign.Despite the attacks, the working people of Boulder Station came together.
“Our company has enjoyed great success because of the hard work we put in every day to provide great service and hospitality,” said Maria Portillo, a food runner at Boulder Station. “We deserve to have a union contract that gives us job security, fair wages, good health care and a pension so that we can have the opportunity to provide for our families through our hard work.”
In the recent environment of heightened anti-immigrant sentiment spewing from those vying for the highest offices, while also embroiled in concurrent battles with unions of working people, it’s great to see workers stand up and join forces with the Culinary Workers Union. The Culinary Workers Union is Nevada’s largest immigrant organization with more than 57,000 members—a diverse membership that represents just over 50% Latino workers, as well as a membership of about 50% women. Members—who work as guest room attendants, bartenders, cocktail and food servers, porters, bellmen, cooks and kitchen workers—come from 167 countries and speak more than 40 different languages.
“We know about the Culinary Workers Union and Bartenders Union, and the union standard that workers have fought to have for more than 80 years, and we made our decision based on those facts,” said Jeri Allert, a cocktail server at Boulder Station. “I look forward to negotiating a good union contract that protects my co-workers and our families.”
The hardest fought battles can yield the sweetest victories—a bolder #UnionYes and the power of a union to keep fighting for what you deserve.
This blog originally appeared in aflcio.org on September 16, 2016. Reprinted with permission.
Sonia Huq is the Organizing Field Communications Assistant at the AFL-CIO. She grew up in a Bangladeshi-American family in Boca Raton, Florida where she first learned a model of service based on serving a connected immigrant cultural community. After graduating from the University of Florida, Sonia served in the AmeriCorps National Civilian Community Corps and later worked for Manavi, the first South Asian women’s rights organization in the United States. She then earned her Master’s in Public Policy from the George Washington University and was awarded a Women’s Policy Inc. fellowship for women in public policy to work as a legislative fellow in the office of Representative Debbie Wasserman (FL-23). Sonia is passionate about working towards a more just society and hopes to highlight social justice issues and movements through her writing.
Tuesday, September 20th, 2016
Courts have an important responsibility to approve class action settlements and ensure that the plaintiffs and their attorneys are not selling out the class by colluding with the defendants. Sometimes, though, in their zealous protection of the absent class members, courts wind up forgetting the old aphorism attributed to Confucius: “Better a diamond with a flaw than a pebble without.” Uber drivers may wind up with pebbles rather than somewhat flawed diamonds. Crushed pebbles may make concrete, but even flawed diamonds could help pay a lot more bills.
When veteran wage-and-hour litigator Shannon Liss-Riordan sought court approval for a $100 million settlement on behalf of a class of 385,000 Uber drivers in California and Massachusetts, she was denounced by some objectors for the compromise she reached, even after she volunteered to cut her fee in half. Then Judge Edward Chen of the U.S. District Court for the Northern District of California last month denied approval of the proposed settlement of the drivers’ independent-contractor-misclassification claims, finding that the settlement was not “fair, adequate, and reasonable,” as required to grant preliminary approval.
Judge Chen is one of the most careful protectors of absent class members and one of the most thoughtful jurists when it comes to adjudicating wage protections. In denying preliminary approval for the proposed independent-contractor-misclassification settlement, Judge Chen expressly endorsed the view that district court review of class action settlements should not be too lax – and particularly that the court’s review at the preliminary (as opposed to the final) approval stage should be more searching. But, in this case, his decision disapproving the settlement may have unintended consequences.
In disapproving the settlement, Judge Chen acknowledged the risk posed by Uber’s previously-rejected arbitration provisions, stating: “The most obvious risk to Plaintiffs is, of course, that the Ninth Circuit [which sits as the Northern District of California’s reviewing court] will uphold the validity of the arbitration provision contained in the 2013 and/or 2014 agreements, which this Court found was invalid as a matter of public policy.” This is exactly what happened.
Last week’s decision from the Ninth Circuit upholding Uber’s arbitration agreements (which contained class waivers) in another case may mean that the vast majority of those 385,000 drivers will get nothing. The Ninth Circuit ruled that Judge Chen had erred in previously declaring Uber’s arbitration agreements unenforceable, and that in doing so, he had “ignore[d]” circuit precedent.
Now, to get anything at all, each driver may need to bring an individual arbitration against Uber and win, showing that he or she was more like an Uber employee than an independent contractor. This will be a tough showing and, as Uber well knows, the vast majority of drivers will never step forward to assert the risky claims at all.
Denying approval for the $100 million settlement, Judge Chen found that the settlement reflected a 90% discount on the full value of the drivers claims, with the exception of the claim under the Private Attorneys General Act (PAGA), for which the Court indicated that the settlement was a mere 0.1% of their full value. In particular, Judge Chen expressed concern that the PAGA claim had recently been added to the lawsuit to induce Uber to settle. Furthermore, Judge Chen questioned the value of the nonmonetary relief in the settlement, such as the provision that would allow drivers to accept cash tips (as opposed to in-app tipping as with Lyft), suggesting that riders accustomed to a cashless experience are unlikely to reach for their wallets.
It is possible that each of these terms was a compromise that was less than ideal for the Uber driver class members. Of course, any settlement of a wage-and-hour class action (or more broadly, any settlement of any lawsuit) is going to consist of a mix of terms, both good and bad for both sides of the dispute. But surely getting some money in a settlement – even an imperfect settlement – would be much better for hundreds of thousands of Uber drivers than getting nothing at all.
These Uber disputes raise central questions about the level of scrutiny a district court should apply to a class settlement – particularly given Judge Chen’s criticism of “lax review” – and whether the Court or class counsel is in a better position to evaluate the risks of non-recovery. While the court is charged with preventing collusive settlements to protect absent class members, ultimately, seasoned and responsible class counsel and class members both tend to care most about the bottom line, in light of the risks. With the benefit of hindsight, Liss-Riordan appears to have been right about the risks of proceeding with the litigation, and the settlement’s objectors were misguided.
The case is not over. Liss-Riordan has been signing up Uber drivers to pursue individual arbitrations in California. The PAGA claims on behalf of California drivers may not be compelled to arbitration. Nonetheless, the likelihood of a recovery nearing $100 million, or getting money for all 385,000 Uber drivers, looks bleak.
When reviewing class action settlements that were negotiated at arm’s length by experienced class counsel, where class counsel is able to articulate the rationale for their position, courts should be hesitant to second-guess counsel’s risk assessment. The perfect is often the enemy of the good in these cases, where a court – with a single decision – can erase years of work to obtain a successful result, absent some kind of an agreement between the parties. Particularly in the employment context, where workers should be recovering more than nominal amounts in any class resolution, those who do not wish to participate can always opt-out of a deal and pursue their own claims if they are so inclined. For the rest, though, receiving flawed diamonds might be a whole lot better than the alternative – getting dirt.
This blog appeared on Bryan Schwartz Law on September 16, 2016. Reprinted with permission.
Logan Starr is an associate at Bryan Schwartz Law, focusing on employment discrimination, whistleblower, and wage-and-hour claims. Previously, Mr. Starr served two years as a law clerk to the Honorable L. Patrick Auld, United States Magistrate Judge for the Middle District of North Carolina.
Bryan Schwartz Law is an Oakland, California-based law firm dedicated to helping employees protect their rights in the workplace. Mr. Schwartz and his firm have fought to prohibit discrimination, retaliation, and harassment obtained reasonable accommodation for disabled employees, vindicated whistleblowers’ rights and ensured that corporations pay workers all wages they are owed. Bryan Schwartz Law has successfully litigated individual and class action complaints nationwide, helping to recover millions of dollars for thousands of employees, forcing corporations and Government agencies to change their practices and punish wrongdoers. Bryan Schwartz Law is also one of the few Bay Area-based law firms with extensive experience representing Federal employees in their unique Merit Systems Protection Board and Equal Employment Opportunity Commission complaints.
Monday, September 19th, 2016
The average woman who had a full-time, year-round job in 2015 made just 80 percent of what a man did, according to the latest data from the Census Bureau. That’s up from last year’s 79 percent, but the increase is not statistically significant. The wage gap hasn’t closed significantly since 2007.
In 2015, men made $51,212 at the median, compared to $40,742 for women, a $10,470 difference. Both experienced an increase in income—1.5 percent for men and 2.7 percent for women—the first significant raise since 2009.
There are a number of factors that go into the gender wage gap. About 20 percent of it is due to the fact that women often end up in jobs and industries that pay less. Occupations with large numbers of women pay about 83 percent as those with large numbers of men. It’s not just that women choose to be in lower paid work; when a large number of women start to enter a job that was previously held by men, the pay drops.
Another portion of the gap can be explained by the fact that women tend to interrupt their careers or cut back on their hours. They are much more likely than men to do this to care for family members, work that still falls mostly to them. Some may have little choice given how few supports, like paid family leave and affordable child care, the country offers them.
AP Photo/Jessica Hill
But there is a sizable percentage of the gap between women’s and men’s earnings that can’t be explained by various factors—in one comprehensive study, about half of it. Women make less than men in every industry and in virtually every occupation. Even women with the exact same jobs as men earn less than them.
Education can’t close the gap, as female college graduates make less in their first jobs than male ones even when they have the same grades, majors, and other credentials, and women make less than men at every educational level.
There is evidence, however, that women and their work are justundervalued.
This article was originally posted at Thinkprogress.org on September 13, 2016. Reprinted with permission.
Bryce Covert is the Economic Policy Editor for ThinkProgress. Her writing has appeared in the New York Times, The New York Daily News, New York Magazine, Slate, The New Republic, and others. She has appeared on ABC, CBS, MSNBC, and other outlets.
Friday, September 16th, 2016
There’s a lot more going on in this election than the presidential race between Democratic nominee Hillary Clinton and Republican nominee Donald Trump. Borne out of the dedication and hard work of activists, ballot initiatives give citizens the opportunity to vote directly on legislation and constitutional amendments at the state and local level, sometimes even bypassing the legislature.
This year, People’s Action affiliates in four states have seen their hard work pay off by successfully getting initiatives to increase the minimum wage on the ballot.
In Arizona, voters will decide whether to pass The Fair Wages and Healthy Families Initiative. The ballot initiative, if passed, will raise Arizona’s minimum wage to $10 per hour in 2017, and gradually raise it to $12 by 2020. It also provides “earned paid sick time,” which workers can use if they or a family member gets sick, and prohibits retaliation against employees who use the benefit. The measure does, however, retain the state’s law on tipping, which allows employers to pay workers who receive tips up to $3.00 less than minimum wage.
According to Arizonans for Fair Wages and Healthy Families:
– A minimum wage worker in Arizona only earns $17,000 per year.
– More than half of minimum wage workers in Arizona are women.
– More than 27 percent of Arizona’s low-wage earners are parents.
– 45 percent of Arizonans don’t have access to earned sick days.
Those numbers tell the stories of people like Riann Norton, a single mother two, who often has to miss work in order to care for her chronically ill young daughter, or Iraq War veteran Luis Cardenas, who came home only to join the ranks of veterans struggling to meet their basic needs with low wages.
The measure is supported by a number of coalition partners, including Living United for Change in Arizona (LUCHA), which is part of the Fight for $15 movement, and organized community members to petition fast-food chains like McDonald’s and grocery stores like El Super to pay their workers living wages.
Colorado’s State Minimum Wage Amendment will raise the state’s minimum wage to $9.30 per hour effective January 1, 2017, and increase it by $0.90 every January, until it reaches $12 per hour in 2020. After 2020, the wage will be adjusted for increases in the cost of living. The law allows employers to pay employees who also make tips up to $3.02 less than minimum wage.
The Colorado People’s Alliance, which worked to get the initiative on the ballot, says that nearly half a million Coloradans will see their wages increase if the measure passes — including 263,000 women, or 22 percent of female workers in the state. One in five Coloradans would get a raise, and 86 percent of them will be adult workers over 20 years old. Currently in Colorado, full-time minimum-wage workers earn about $300 per week, or $17,000 a year.
According to a recent University of Denver study, increasing Colorado’s minimum wage would pump up to $400 million into the state’s economy and raise the standard of living for one in five households.
About 400,000 Colorado households, half of those families with children, will see higher incomes if the amendment passes.
Colorado’s minimum wage amendment currently holds a 13-point lead in the first publicly released poll on the proposal. Of likely 2016 general-election voters, 55 percent support the amendment, while 42 percent oppose it, and 3 percent remain undecided. That’s good news for workers like Marilyn Sorenson, a home health care worker who finds after more than 20 years, her paycheck hasn’t kept up with her basic expenses; and business owners like Vine Street pub owner Kevin Daily, who says that increasing the wage will boost productivity by lowering workers’ financial stress, and increase the number of people “with more money in their pockets so they can afford a beer and a meal.”
The Minimum Wage Increase Initiative, Question 4 on Maine’s state ballot this year, will increase the general minimum wage to $12 an hour by 2020. The initiative also increases the wage for tipped workers from half of minimum wage to $5 an hour in 2017, then increases it by $1 every year, until it is equal to the general minimum wage by 2024.
Republican Governor Paul LePage joined business groups in an attempt to push a smaller wage increase through the state legislature. Republicans on the legislative budget committee took the budget hostage, saying they would only negotiate new spending if Democrats supported a smaller wage increase. However, none of the competing proposals passed the House, so there is no competing measure on the ballot.
According to a study by the nonprofit poverty relief group Oxfam, Maine has the highest percentage of low-wage workers in the Northeast. “So 32 percent of Maine workers are currently paid less than $12 an hour,” says Mike Tipping of the Maine People’s Alliance. Neighboring states Vermont and New Hampshire came in at 26 and 24 percent, respectively.
Washington state’s Initiative Measure No. 1433 will increase the state’s minimum wage to $11 per hour in 2017, $11.50 in 2018, $12 in 2019, and $13.50 in 2020. The initiative will also require employers to provide paid sick leave and follow related laws. Washington’s Democratic governor Jay Inslee volunteered to help Raise Up Washington collect signatures for the initiative, and spoke out in favor of it:
“No one who works 40 or more hours a week should struggle to make ends meet,” Inslee said. “And no parent should have to choose between staying home to take care of a sick child or losing a paycheck. Initiative 1433 will lift up workers and families across this state and boost our local economies.”
Washington’s initiative will help women in two important ways. Women are the primary breadwinners in almost half of all households with children. But women make up 60 percent of minimum wage workers in Washington state. Women are also 10 times more likely to stay home with a sick child than their male partners.
If the initiative passes, women will earn more, and will no longer have to choose between their jobs and their families.
Increasing minimum wage isn’t the only progressive issue on the ballot this year:
– In Maine, Question 2 will create an additional 3 percent tax surcharge on incomes exceeding $200,000 per year. The revenue from the increase will be earmarked to help fund K–12 public education.
– In Howard County, Maryland, voters will decide if they want a citizen-funded campaign system, to boost the power of small, individual donations, and encourage more candidates to run without the burden of raising major funds. The initiative, Question A, is supported by Fair Elections Howard, Progressive Maryland, and other progressive organizations.
State and local progressive activists are leading the way and not waiting for Congress to act on important issues that impact America’s working families. As a result, this year’s election could yield a number of progressive victories.
This post originally appeared on ourfuture.org on September 15, 2016. Reprinted with Permission.
Friday, September 16th, 2016
The Labor Center at the University of Massachusetts (UMass) at Amherst is in turmoil. Its director, Eve Weinbaum, says she was abruptly pushed out of the position. In an alarming e-mail to alumni, students and allies, she protested funding cuts to teaching assistants and part-time instructors and, more troublingly, threats to the “Labor Studies faculty’s autonomy to make programmatic decisions and to designate a Director.”
Founded in 1964, the Labor Center is one of about 30 labor centers around the country. Most are rooted in the extension programs of land grant public universities. In addition to its extension work—providing trainings for unions and worker centers—the Labor Center runs undergraduate and graduate degree programs in labor studies.
These days it is most renowned for its limited residency Union Leadership and Administration (ULA) program, in which union leaders, staff and rank-and-file activists meet for intense 10-day periods of instruction every summer and winter and can earn a graduate degree in three years if they keep up with readings and assignments from home (or in the field). As you might have guessed, I’m a proud alum of the program.
The response to Weinbaum’s letter produced nearly 500 letters of protest in a few days, according to organizers for a Save the Labor Center campaign. Local union leaders, heads of other labor centers, alumni and current students also expressed alarm about the situation in a prominent article in The Boston Globe. According to Jeff Schuhrke, another UMass alum and writer for In These Times, an organizing committee of at least 30 alumni is holding regular conference calls to plan the next steps of the campaign. The upheaval there has many worried about the future of labor education at public universities nationwide. Changes in the way education programs are funded are setting off a kind of labor center “Hunger Games,” where some programs grow while others die.
Founded in 1964, the Labor Center is one of about 30 labor centers around the country. (Save the Labor Center/ Facebook)
Austerity and the corporatization of higher education
The plight of the Labor Center is rooted in a very common problem: state divestment in public higher education. Public university systems that were once so adequately funded that they charged little-to-no in-state tuition to students have seen their state funding decline over a period of decades.
For a state as wealthy and as liberal as its reputation, Massachusetts’ divestment in its university system is particularly egregious. The state allocates some $508 million to UMass. That’s only 17 percent of the school’s $3 billion budget. And the legislature only increased state funding by 1 percent this June, which will lead to more increases in tuition and student fees.
The skyrocketing tuition and crippling student debt caused by this divestment have been well documented. What is a bit murkier is how it impacts the function of a university, as every academic discipline is forced to generate revenue. This is what critics refer to as the corporatization of higher education.
Science and engineering faculty must secure federal grants, philanthropic funding, corporate contracts and Congressional earmarks in order to gain tenure and get promoted. Those revenue sources fund an army of non-tenured research assistants, postdocs and research professors.
Law and business schools can turn to corporations and wealthy alumni for donations and endowed chairs to fund additional faculty lines. But the humanities and social sciences don’t have the same rich resources to draw upon. Their charge from administration is to drum up student enrollment, particularly for profitable master’s degree programs—hence, the pressure on the Labor Center to recruit more out-of-state students for its residential master’s program.
Labor centers are changing with the times
But not every labor center is struggling. Some, like the ones at Rutgers University and Cornell University, have deftly pursued program grants from unions and philanthropic organizations, allowing them to expand and create new institutes. Cornell’s Worker Institute is partnered with the AFL-CIO on a next generation leadership development program and convenes a workers research network, among other projects. Rutgers’ Center for Innovation in Worker Organization does leadership development work for alt-labor groups and is a key partner in Bargaining for the Common Good, among its other programs.
Bucking the state-funding trend, the City University of New York’s Joseph S. Murphy Institute for Worker Education and Labor Studies has, according to its director, Gregory Mantsios, “received a commitment from the University to elevate the status of the Institute to a CUNY School of Labor and Urban Studies.” With this come more state funding and control over that money. It is the result, according to Murphy professor Stephanie Luce, of a sustained lobbying campaign by local labor leaders that labor should have a school with the same status as CUNY’s business school.
“It reflects that New York City, and the state, and CUNY have decided to invest in the labor school,” she said.
Luce, a former UMass labor professor, recently issued a report that showed that New York City has defied national trends and seen its union density increase to 25.5 percent. The NYC labor movement has both the power and the willingness to exercise it on behalf of labor education.
Another labor center that’s bucking the trend is the Kalmanovitz Initiative for Labor and the Working Poor at Georgetown University. A private Jesuit university, Georgetown didn’t even have a labor center until a few years ago. They had just two labor history professors, Michael Kazin and Joseph McCartin.
Georgetown president John DeGioia sought to create a labor center at the university in 2006. He was eventually connected to the Kalmanovitz Charitable Foundation (which, ironically, was carved out of the estate whose caretakers left a deep scar in the city of Milwaukee by shuttering the unionized Pabst brewery in the mid-1990s). An influential board member, who was steeped in the Catholic social justice tradition and whose children had attended Georgetown, wanted to steer a significant grant to a labor education program in the Washington, D.C. area.
McCartin agreed to head up the new labor center, bringing the influential labor strategist Stephen Lerner along as a fellow. The modestly-funded initiative (its annual budget rarely tops $700,000) served as the incubator for Bargaining for the Common Good—a union coalition effort that aligns bargaining demands with those of other members and with community demands around progressive taxation, affordable housing, youth incarceration and government transparency.
But, if you’re wondering why Kalmanovitz is an “initiative” and not an “institute,” the charitable organization provides rolling grants—not a bequest or an annuity—which leaves the Kalmanovitz Initiative as vulnerable to the fickle priorities of a charity as the public labor centers are to the indifference of state legislators.
The future of labor education at UMass and beyond
John A. Hird, dean of social and behavioral sciences at UMass, assures In These Times, “We have no intention of allowing the ULA program to stand on its own.”
He says the university is working with the Labor Center to increase residential enrollment in both the undergraduate and graduate programs, which have declined in recent years. He sees some promise in the planned “4+1” bachelor’s/master’s program for increasing labor studies enrollment. The program would allow undergraduate students to earn graduate credit in their junior and senior years and walk away with both a bachelor’s and a master’s degree in just five years.
“Rest assured we are doing everything we can to further develop this jewel of a program,” Hird said about ULA.
While UMass is earnestly conducting a search for a new director of the Labor Center, Hird concedes that it is likely the position will go to an internal candidate, and not a new hire, due to the financial picture. Sources at the Labor Center say they hope their campaign might result in a commitment to hire a new tenure-track labor professor to direct the center, or, at a minimum, to win more input for Labor Center faculty and staff in the selection of its next director.
“This crisis is going to bring more attention to UMass and more of a commitment to fund it,” said Paul Mark, a Democratic state representative.
Mark was a shop steward and executive board member of his IBEW local when he was a classmate of mine at ULA. He notes that Massachusetts’ senate president is also an alum of UMass, and that the Democratic legislature is moving a plan to institute a graduated income tax in order to better fund education and transportation. You read that right, the state that Republicans love to malign as “Taxachusetts” has a constitutional flat tax. It will take two successive legislative sessions to vote on a progressive tax amendment before the matter can be put before the voters in 2018.
Mark also reports that he has sat in on strategy meetings this past weekend with Tom Juravich, who is serving as interim director of the Labor Center, and state AFL-CIO president Steven Tolman, among others, to brainstorm ways to direct more union funding and programming to the center. If the current crisis gets Massachusetts’ unions to realize that they cannot take for granted that the Labor Center will always be there, well, that is certainly a silver lining. Although, even this may not be enough. As the Kalmanovitz Initiative’s McCartin laments, “Even if you’re taking care of your labor constituents well, they don’t have the resources they once did to keep you funded.”
Many people I talked to note that the Boston area is thick with private colleges, including elite institutions like Harvard University and the Massachusetts Institute of Technology. Their many graduates have moved on to careers in politics. As a result, UMass doesn’t command quite the same alumni loyalty among legislators that many other state universities do. The other intrinsic challenge for UMass that supporters will note is its physical remoteness. Most of Massachusetts’ labor movement is based in Boston, in the eastern end of the state. The beautiful flagship UMass campus is located “in the sleepy west of the woody east” of Amherst.
I happen to think that remoteness is an asset.
Most of the surviving labor centers sprang up after World War II. They were founded in the spirit of labor-management partnership, a post-war consensus that emphasized mediation, arbitration and respectable political statesmanship. This is a framework that most employers abandoned long ago. But, to this day, most unions approach the labor centers as places for shop stewards and staff representatives to learn how to handle grievances or the finer points of collective bargaining.
What our movement needs from our labor centers is to be a place where leaders, staff and rank-and-file activists, from all kinds of different unions, can get the hell away from their offices and daily grievances and meet together in a retreat-like setting and study, read, discuss and debate—and maybe come up with some potential breakthrough strategies.
A model worth revisiting is the labor colleges of the 1920s. Brookwood Labor College in upstate New York was a bucolic retreat where thoughtful activists studied and debated the big strategic questions of the day. These included how to adapt craft union structure to mass industrial production and organize key sectors of the economy.
Brookwood made a substantial, if underappreciated, contribution to the strike wave that revived labor’s fortunes in the late 1930s. Our current economic order is marked by massive inequality that some call the New Gilded Age, and our current union structures are as ill matched as those were in the 1920s to the ways industry restructured to avoid our reach. Looking backwards to that time makes sense.
We need more spaces like the UMass Labor Center to regroup and reconsider our strategic choices, not fewer. Labor centers are worth fighting for.
This blog originally appeared at InTheseTimes.org on September, 13, 2016. Reprinted with permission.
Shaun Richman is a former organizing director for the American Federation of Teachers. His Twitter handle is @Ess_Dog.