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Put Working People First

Tuesday, January 13th, 2015

Leo GerardThe jobs report Friday set off cheering: a quarter million positions added in December; unemployment declining to 5.6 percent. This good news arrived amid a booming stock market and a third-quarter GDP report showing the strongest growth in 11 years.

It’s all so very jolly, except for one looming factor: wages. They’re not rising. In fact, they fell in December by 5 cents an hour, nearly erasing the 6-cent increase in November.

Hard-working Americans need a raise. Their wages are stuck, rising only 10.2 percent over the past 35 years. Workers are producing more. Corporations are highly profitable. CEOs, claiming all the credit for that as if they did all of the work themselves, made sure their pay rose 937 percent over those 35 years. That’s right: 937 percent!

It doesn’t add up for workers who struggle more every year. Something’s gotta change. The AFL-CIO is working on that. It launched a campaign last week to wrench worker wages out of the muck and push them up.

At a summit called Raising Wages held in Washington, D.C., last week, AFL-CIO President Richard Trumka said, “We are tired of people talking about inequality as if nothing can be done. The answer is simple: raise the wages of the 90 percent of Americans whose wages are lower today than they were in 1997.”

“Families don’t need to hear more about income inequality,” he said; “They need more income.”

The meeting attended by 350 union representatives, community group officials, economic experts and religious leaders was the first of many that will be conducted across the country by the AFL-CIO to spotlight the pain and problems that wage stagnation causes. The AFL-CIO will begin these meetings in the first four presidential primary states – Iowa, New Hampshire, Nevada and North Carolina.

The idea is to ensure that candidates, Republican and Democrat, can’t squirm out of dealing with the issue. And Trumka said labor won’t tolerate sappy expressions of sympathy. The federation will demand concrete plans for resolution.

Also last week, the AFL-CIO launched Raising Wages campaigns with community partners in seven cities – Atlanta, Columbus, Minneapolis, Philadelphia, San Diego, St. Louis and Washington, D.C. In addition to seeking wage increases for all who labor, these coalitions will pursue associated issues such as fighting for paid sick leave and equal pay for equal work.

At the same time, the AFL-CIO and allies will push for federal legislation to seriously punish employers who illegally retaliate against workers and to provide real remedies for workers unjustly treated.

At the summit, workers told their stories alongside experts. Among them was Colby Harris, who suffered illegal retaliation. A member of OUR Walmart, he was fired last year after participating in strikes for better conditions.

“They are trying to silence people for saying we need better wages and benefits. The average Walmart worker makes less than $23,000 a year. These companies have no respect for their workers,” Harris told the group.

Another speaker, Lakia Wilson, said that workers can do everything right, work hard, follow all the rules and still lose out in this economy. The Detroit native earned a bachelor’s degree in education and a master’s in counseling. While serving as a school counselor, she took a second job as an adjunct professor at a community college to make enough money to qualify for a home mortgage.

But then, in a cutback at the college, she was laid off. She lost the extra income, and the bank began foreclosure. It was, she said, a horrible, humiliating experience. She cashed out her retirement to save her home. Now her credit and retirement are shot. This happened to her, and to so many others, she said, even though they “did everything necessary to get a good job and get the American dream.”

U.S. Sen. Elizabeth Warren talked to summit attendees about why the economy does not work for people like Wilson and Harris. Though this economy is splendid for those who own lots of stock, it’s not for the vast majority of workers who get their income from wages.

Sen. Warren pointed out that the economy didn’t always work this way. From the 1930s to the 1970s, she said, workers got raises. Ninety percent of workers received 70 percent of the income growth resulting from rising productivity. The 10 percent at the top took 30 percent.

Since 1980, however, that stopped. Ninety percent of workers got none of the gains from income growth. The top 10 percent took 100 percent. The average family is working harder but still struggling to survive with stagnant wages and growing costs.

“Many feel the game is rigged against them, and they are right. The game is rigged against them,” Sen. Warren said.

The rigging was adoption of Ronald Reagan’s voodoo trickle-down strategy.  That economic plot puts massive corporations, Wall Street and the 1 percent first. Politicians bowed down to them, legislated for them, deregulated for them. In return, the wealthy were supposed to chuck a few measly crumbs down to workers.

They did not. Workers got nothing.

Despite that, workers still get last consideration. That, Sen. Warren said, must be reversed.

Accomplishing that, clearly, is a David vs. Goliath challenge. David won that contest, and workers can as well – with concerted action. Papa John’s worker Shantel Walker told the summit such a story – one of victory against a giant with collective action.

She discovered that a teenager at the New York franchise where she worked was putting in time that was not clocked. The restaurant was stealing wages.

Walker helped organize a protest at the restaurant. Between 80 and 100 people rallied for justice for the young worker. And they won. The restaurant paid the teen. “Now is the time to stop the poverty wages in America,” Walker said; “Raise the wage!”

Trumka said the AFL-CIO and its allies will demand that of lawmakers. He said they would insist that legislators “build an America where we, the people, share in the wealth we create.”

For that to occur, lawmakers must serve the vast majority first. They must stop functioning as handmaidens to the rich in an economic scheme that has failed the 99 percent from the very day the 1 percent got Ronald Reagan to buy it.

The AFL-CIO and its allies intend to help lawmakers see that they must prioritize the needs of America’s workers.

This article originally appeared in ourfuture.org on January 13, 2015. Reprinted with permission.

About the author: Leo W. Gerard, International President of the United Steelworkers (USW), took office in 2001 after the retirement of former president George Becker.

What’s Behind The Gender Inequality In American Boardrooms

Tuesday, January 13th, 2015

Bryce CovertWhen Ellen Costello started out in the financial industry, she was often the only woman in the room. “Especially the times I was in the capital markets business, there were very few women,” she told ThinkProgress. When she served on BMO’s board for seven years, she was one of three women out of 15 seats.

That could be uncomfortable when she was in the early stages of her career. “Sure there were times… I have to think back to the early days, especially when I was really young in my career, when it was uncomfortable,” she said. “But you adapt to it, and people are good at…looking beyond your gender, at what you can contribute.”

She eventually became president and CEO of BMO Financial Corp. and was recently appointed to the board of DH Corporation. And she says times have changes. “I’m happy to say that over the years, that group of women [in finance] has grown.”

The latest numbers released today by the research group Catalyst show that women make up 19.2 percent of board positions on U.S. companies in the S&P 500. Perhaps more impressive is that 131 companies, or 26.2 percent of the S&P 500, have boards that are a quarter or more female. Just 18 companies, or 3.6 percent, have failed to appoint any women to their boards at all.

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While Catalyst can’t judge progress because it has shifted this year from tracking numbers in the Fortune 500 to the S&P 500, so the previous eight years of stalled progress in raising women’s share of board seats aren’t comparable to current figures, Brande Stellings, vice president of Catalyst Corporate Board Services, thinks there’s reason to be optimistic. The number of companies without any women on their boards “is very low and indicative at least of a shift toward companies realizing it is no longer acceptable to have no women board directors in this day and age,” she said. And some companies are actually at or close to parity. Avon’s board is nearly two-thirds female, while Xerox is at exactly 50/50 and 10 companies are in the 40-plus percent range.

The challenge is getting all companies to gender equality. “The critical question is how we get past 19 percent for the S&P 500…to something more approaching critical mass,” Stellings said. “The thing we have to next pay attention to is to make sure companies don’t stop at one and see having one on their board as a safe harbor.”

That’s where the U.S. falls behind international peers. Catalyst found that Norway’s boards are 35.5 percent female, on average; Finland and France are just under 30 percent while Sweden clocks in at 28.8 percent; and the United Kingdom’s boards are 22.8 percent female. Even our northern neighbors beat us: Canada’s boards are 20.8 percent female.

What’s the difference? “When you look at the Europe numbers, you do see many of those tracking higher than the U.S. do have regulatory frameworks in place,” Stellings said. Norway instituted the world’s first gender quota in 2008, requiring boards to be at least 40 percent female, and a number of other European countries have since done the same. The United Kingdom hasn’t put a quota in place, but in 2011 it released the Davies Report that set a target of FTSE 100 boards being 25 percent female by the end of this year, and women’s representation has been at record-breaking levels ever since.

The chances of a quota in the U.S. are slim. But there are ways to prod progress along. Currently, the only requirement in regards to corporate diversity in this country is a Securities and Exchange Commission (SEC) rule that companies disclose whether they consider diversity when picking board members in their proxy statements and, if they do, how the policy is implemented. But the SEC doesn’t define diversity, so just half take it to mean gender or race. Most often, they define it as experience or viewpoint. And complying with the disclosure rule can simply mean a company saying it has no diversity policy on its books. Changing that rule to define diversity and to make it a “comply or explain” rule in which companies either report they have a policy or have to explain why they don’t could have more of an impact.

In the meantime, Costello has some ideas about how companies can increase board diversity on their own. They can “make sure the slates that come forward are representative of a diverse slate, women and people of color, so they can consider others rather than maybe the traditional, those who they know in their network,” she said. Part of that comes down to mentoring and sponsorship. Mentorship “has certainly helped me,” she noted. “The board I recently joined in October came about as a result of a network contact of mine who knew me pretty well and made an intro.” The appointment may not have happened without that connection.

It’s in companies’ best interest to move the numbers along. A huge number of studies have found that those with more women on their boards outperform companies without any women.

This article originally appeared in thinkprogress.org on January 13, 2015. Reprinted with permission.

About the Author: Bryce Covert is the Economic Policy Editor for ThinkProgress. She was previously editor of the Roosevelt Institute’s Next New Deal blog and a senior communications officer. She is also a contributor for The Nation and was previously a contributor for ForbesWoman. Her writing has appeared on The New York Times, The New York Daily News, The Nation, The Atlantic, The American Prospect, and others. She is also a board member of WAM!NYC, the New York Chapter of Women, Action & the Media

 

 

Haiti’s Workers Still Struggling Five Years After Devastating Earthquake

Tuesday, January 13th, 2015

0ba2540[1]Five years ago today an earthquake struck Haiti, killing more than 200,000 people and leaving another 1.5 million homeless. The disaster was followed by a string of tropical storms and a cholera epidemic that killed at least 8,000 people. Haiti is slowly rebuilding, albeit unevenly. More than 85,000 displaced Haitians still live in tent camps. Despite billions of dollars in international aid and philanthropy going to Haiti, poor management of the funds and rampant subcontracting has hindered the recovery. Workers and unions have been on the front lines in the reconstructions efforts in Haiti providing direct assistance, with unions like AFT and the AFL-CIO’s Solidarity Center leading numerous aid and relief projects.

Moreover, Haiti’s workers continue to face obstacles to accessing decent work and a living wage. Nearly 60% of Haitians live in poverty, with 38% of the population living in extreme poverty. Employment offers little opportunity to escape poverty, as 60% of employed Haitians earn less than minimum wage, according to the Center for Economic and Policy Research.

For Haitian workers to lift themselves out of poverty, support their families and help their country recover from the quake and its aftermath, fair wages and the right to form unions are essential.

In Haiti’s rapidly expanding textile industry—the industry has grown by 45% since the earthquake and accounts for 91% of Haiti’s national export earnings—workers receive poverty wages. Employers take advantage of a two-tiered wage system that allows them to pay a “piece rate” and often set unattainable quota to pay workers less than the required 300 Haitian gourde (HTG) per eight-hour day (about $6.96 in U.S. dollars). In recent discussions with export apparel workers in Port-au-Prince, Haiti’s capital, the Solidarity Center found that workers may pay nearly half their daily wage on two daily meals. Sending a child to school can absorb most of their monthly pay.

Haitian unions have sought to secure improvements for workers through labor–employer discussions with the government on reforming the current labor code, boosting social protections and reviewing wage levels, according to the Solidarity Center. See the rest of the Solidarity Center’s post on Haiti here.

This blog originally appeared in aflcio.org on January 12, 2015. Reprinted with permission

About the Author: Charlie Fanning is the Global Advocacy and Research coordinator for the AFL-CIO.

The Dark Side Of the Jobs Report: Shrinking Workforce, Stagnant Wages

Sunday, January 11th, 2015

Image: Dean BakerThe unemployment rate edged down to 5.6 percent in December from 5.7 percent in November (revised from an earlier reported 5.8 percent), the Labor Department reported today. However, the main reason was that 273,000 workers reportedly left the labor force. The employment-to-population ratio (EPOP) was unchanged at 59.2 percent, roughly 4.0 percentage points below the pre-recession level.

The establishment survey showed the economy adding 252,000 jobs in December. With upward revisions to the prior two months’ data, this brings the three-month average to 289,000.

Some of the job growth in December was likely attributable to better than usual weather for the month. For example, construction reportedly added 48,000 jobs; restaurant employment rose by 43,600. But even without these strong gains, there was still healthy job growth. Manufacturing added 17,000 jobs, finance added 10,000, and professional and business services added 52,000. Unlike prior months, the jobs in this sector were mostly (35,200) in the less well-paying administrative and waste services category.

The health care sector added 34,100 jobs. Job growth in this sector has accelerated sharply, averaging 36,500 over the last three months. By comparison, it averaged just 21,200 in the year from September 2013 to September 2014. Retail added just 7,700 jobs. This reflects the earlier than usual Christmas hiring, which added 88,300 jobs the prior two months.

The story on wages is less encouraging. The widely touted November jump in wages was almost completely reversed, with the December data showing a 5-cent drop from a downwardly revised November figure. The average over the last three months grew at a 1.1 percent annual rate compared with the average of the prior three months, down from a 1.7 percent growth rate over the last year. This may be due in part to a shift to lower paying jobs in restaurants, retail, and the lower-paying portions of the health care industry. However, it is also possible that we are just seeing anomalous data. Nonetheless, the claims of accelerating wage growth have no support in the data.

Interestingly, there seems to be some shift to generally less-skilled production and non-supervisory workers. The index of weekly hours for these workers is up 3.6 percent from its year-ago level. By contrast, the index for all workers is up by just 3.3 percent. Since the former group is more than 80 percent of the payroll employees, hours for supervisory workers would have risen by just 2.5 percent. This is consistent with employment data showing much sharper employment gains for workers with high school degrees or less than for college grads. The EPOP for college grads is actually down by 0.2 percentage points over the last year.

Other data worth noting in the household survey include a rise in the employment-to-population ratio for African Americans of 1.8 percentage points over the last year and for African-American men of 2.2 percentage points. The EPOP for African Americans is up by 3.9 percentage points from its low in 2011, although it is still down by 4.0 percentage points from pre-recession levels. The 10.4 percent December unemployment rate for African Americans is down from a recession peak of 16.8 percent.

This report shows some evidence of the labor market effects of the Affordable Care Act. While the number of people choosing to work part-time was down slightly from its November level, it is still 1.1 million above its year-ago level. The number of people who are self-employed is also up from its year-ago level. Averaging the last three months, the number of self-employed workers is up by 480,000 (3.5 percent) from the same months of 2013. (It had been dropping in 2013.) Also, the over-55 age group comprised just 37.6 percent of employment growth in 2014, compared to an average of 65.3 percent in the prior two years. This could indicate that many pre-Medicare age workers now feel they can retire since they can get insurance through the exchanges.

On the whole, this is clearly a very positive report with the strong December jobs number (even if inflated by weather) coupled with upward revisions to the prior two months. However, quit rates are still very low and wage growth remains weak. This should remind the public of how far the labor market has to go before making up the ground lost in the recession.

This article originally appeared in Ourfuture.org on January 9, 2015. Reprinted with permission.

About the author: Dean Baker is an American economist whose books have been published by the University of Chicago Press, MIT Press, and Cambridge University Press.

The 32-Hour Workweek That's Grown One Company By 204 Percent

Wednesday, January 7th, 2015

Bryce CovertWhen Cristian Rennella first co-founded elMejorTrato.com, a Latin American search engine, he and his employees worked five days a week just like nearly all other companies. But then two years in they decided to try something different: they stopped working on Fridays.

“We said we’re going to try it for only three months and if everything is working and the same amount of work is done, we can say three more months,” he told ThinkProgress. “Five years later we haven’t stopped.”

And in that same timespan the company has grown annual revenue by 204 percent.

Rennella credits that growth in large part to the different work schedule. He says it makes everyone at the company get more done in a shorter amount of time. “We know we have Friday off, so we can be more productive because we know we have to focus,” he said. “We only have 32 hours to do all the work.” Rather than spending some work hours on Facebook or doctor’s appointments, he and his employees use all of them for work-related tasks.

His hunches are supported by the data. The most productive workers around the world are those who put in fewer hours. Meanwhile, different studies have found that working more than 60 hours a week can boost productivity in the short term but that boost will disappear after a few weeks.

The model makes particular sense in his sector. “We’re in the technology age, we’re not working in the industrial age,” he pointed out. “In the industrial age, people thought that the more you work the more you will get done. Now for us it’s the opposite. It’s not the most work you do, it’s the quality of the work that matters.” For programmers especially, the quality of the code they write in the shortest amount of time is more important than the hours clocked sitting at a desk. A few other technology companies have tried shorter workweeks, like Treehouse in the U.S.

The policy brings other advantages to his company. “We want to make [work/life balance] a reality,” he said. “It’s impossible to have balance with work and life with your family if you work five days and you have only two days to spend time with family.” The balance he feels they achieve is a big draw for prospective employees. The company has a “competitive advantage…to hire only the best and excellent professionals,” he said. It’s hard to lure the best engineers to a company, but his workweek is a big draw. “Compared to competition with the same salary, they’re happier here and they say it’s an important thing… We can hire better people,” he said. Studies have found that shorter hours do make people happier.

And once they come onboard, his employees rarely leave. “They don’t go to work in another place because they’ve been working so few days,” he said. “Everywhere [else] is five days for eight hours, 40 hours a week.” Here in the United States, the 40-hour week is even a myth: the average full-time American worker puts in 47 hours a week. Retaining employees comes with huge benefits for his company. “When you have a new person on the team or have to replace a person who leaves, you have to start from zero,” he said. Keeping people “allows us to have long-term sustainability. We can grow much more quickly than our competition because we have no problem with members of the team going to another company.”

That’s definitely true for Rennella himself. “If I want to go to a new startup or work for another company, I would like to work four days…because my family is expecting me to be with them Friday.”

This blog originally appeared in Thinkprogress.org on January 5, 014. Reprinted with permission.

About the author: Bryce Covert is the Economic Policy Editor for ThinkProgress. She was previously editor of the Roosevelt Institute’s Next New Deal blog and a senior communications officer. She is also a contributor for The Nation and was previously a contributor for ForbesWoman. Her writing has appeared on The New York Times, The New York Daily News, The Nation, The Atlantic, The American Prospect, and others. She is also a board member of WAM!NYC, the New York Chapter of Women, Action & the Media.

Unfortunately, our “post-racial” society isn’t post-bias

Tuesday, January 6th, 2015

Amy SemmelAccording to a recent study by MTV, the majority of millennials believe that they live in a “post-racial” society.  They cite Barack Obama’s presidency as a great achievement for race relations.  Having a black President even influenced a majority of the study participants to believe that people of color have the same opportunities as white people.  Unfortunately, employment statistics say otherwise. Since 1972 –when the Federal Reserve began collecting separate unemployment data for African-Americans — the black unemployment rate has stubbornly remained at least 60% higher than the white unemployment rate. The gender pay gap has barely budged in a decade, with full-time women employees being paid 78% of what men were paid.  And the gap is worse for women of color, with Hispanic women laboring at the bottom, with only 54% of white men’s earnings. 70% of Google employees are male, with only 2% Black, 3% Latino, and 30% Asian. This from the company whose motto is “Do no Evil.” How can this be? While overt racism or sexism is rarer today in corporate America, implicit biases linger.

Imagine that you are supervisor, with two virtually identical resumes on your desk.  Both candidates are equally qualified.  Do you gravitate toward the one with a white Anglo-Saxon name (think “Emily” or “Brendan”), or a name more likely to belong to an African-American (think “Lakisha” or “Jamal”)? Aware of their bias or not, hiring managers are 50% more likely to call the applicant with the white-sounding name in for an interview.  There is a growing body of research like this that proves that implicit bias is real and is having real-life consequences for people who are considered “other” in terms of race, disability, sexual orientation and other characteristics. (There are even on-line tests you can take to find out about your own implicit biases.)  But even as our understanding of how implicit bias leads to discrimination grows, judges often fail to recognize that discrimination can result from unconscious stereotypes or subtle preferences for people similar to oneself—perhaps today even more than overt bigotry.  To truly provide equal opportunity for all, social science research into how people actually behave in the workplace must inform the enforcement of anti-discrimination laws.

This article originally appeared in celavoice.org on December 4, 2014. Reprinted with permission.

About the author: Amy Semmel devotes her practice to eradicating discrimination and retaliation in the workplace. She advocates for employees seeking remedies for retaliation for whistleblowing, discrimination and wage theft. Ms. Semmel is frequently invited to speak at conferences and seminars throughout the state. Subjects on which she has spoken include discovery issues in employment litigation; liability of successor, electronic discovery, alter ego and joint employers; the Private Attorney General Act, and developments in wage and hour law.

Inequality, Power, and Ideology: An Update

Tuesday, January 6th, 2015

bannerlogo[1]The article “Inequality, Power, and Ideology” was written in early 2009, as the U.S. economy was in the midst of the Great Recession. I argued that the severity of the recession was brought about by a nexus involving three factors:

  • A growing concentration of political and social power in the hands of the wealthy;
  • The ascendance of a perverse leave-it-to-the-market ideology which was an instrument of that power; and
  • Rising economic inequality, which both resulted from and enhanced that power.

Now, in late 2014, there is reason to hope that the perverse ideology, market fundamentalism, has been somewhat weakened. However, income inequality and the concentration power in the hands of the wealthy seem to be firmly in place. Perhaps the most shocking fact about income inequality is the following: Between 2009 and 2012, as the economy grew slowly out of the recession, 116% of the income increase went to the highest income 10% of the population. Yes, that’s right, the income of the top 10% increased more than the income increase for the whole society, which means of course that the income of the rest of society, 90%, declined in this period. This decline shows up in the drop of the inflation-adjusted median household income, down 4.4% between 2009 and 2012, part of a larger picture of a 8.9% decline between just before the recession, 2007, and 2013. (We don’t yet have the figure for 2014 as of this writing.) So, yes, income distribution continues to get more unequal, after the Great Recession as before the Great Recession.

As to the concentration of power, legal developments (the Supreme Court’s decisions in the Citizens United and McCutcheon cases, in particular) have allowed virtually unlimited and often hidden expenditures in elections by wealthy individuals and corporations—as if their expenditures had not already been too large. And recent elections have underscored the importance of these outlays. Then there is the continuing power of financial institutions. While the 2010 Dodd-Frank bill provided some sections that might have curtailed that power, pressure from the financial sector has delayed or weakened the implementation of many of those sections. Indeed, regulators have recently allowed banks to move precisely in the opposite direction from some Dodd-Frank provisions—e.g., allowing mortgages to be issued with low levels of down payment.

The perverse ideology that has justified inequality and buttressed the power of the rich, however, has suffered some setbacks since 2009. This ideology of market fundamentalism has relied on generating the belief that economic inequality is not a problem: that’s just the way markets work, rewarding skills and hard work. And, besides, it isn’t inequality that is important, it’s people’s absolute level of income that matters. At least that’s how the argument went. The Occupy movement that emerged onto the scene in September of 2011, however, was the spark that ignited a growing challenge to this nonsense. The Occupy slogan of “We are the 99%” resonated with a wide spectrum of society. Although the Occupy movement itself has faded, the concern for economic inequality has grown, and, from that, there has developed a widening rejection of the idea that whatever happens through markets is OK.

Nonetheless, government action continues to be severely constrained by the power of the economic elite, which has continued to exploit the zombie-like ideas about the efficacy of markets. No significant steps have been taken that might reverse the trend of rising inequality. Indeed, government policies have both slowed the recovery from the Great Recession and contributed to the rising inequality. By failing to sufficiently use fiscal policy to stimulate the economy, the government was failing to create jobs, and job creation would have at least dampened the rising inequality trend. Without a sufficient fiscal stimulus, the Federal Reserve attempted to stimulate the economy by lowering interest rates. Yet, monetary policy in a severe recession is a weak remedy, and, what’s more, works through providing benefits to financial and other firms. Those benefits are supposed to trickle down to “ordinary people.” Also, from the bailout of the banks in 2008 to the continuing monetary policies of the Fed in late 2014, the government’s approach to aid the financial system has largely ignored any debt relief for the families enmeshed in the housing crisis.

Although the recession came to a formal end by June 2009, when GDP started to grow again, economic conditions have continued to be very poor.

With slow economic growth, unemployment remained high, falling below 8% only in late 2012 and below 6% only in September of 2014; in both 2006 and 2007, the years leading up to the Great Recession, the unemployment rate had been below 5% in every month until December 2007, which was when the Recession was beginning. Moreover, many people simply gave up looking for work, dropped out of the labor force, and were not even counted among the unemployed.

The labor-force participation rate—the percentage of the population 16 years older who are either employed or looking for work—has fallen below 63%, after running above 66% in all years since 1989.

Add to this the high levels of long-term unemployed and people working part-time who would like full-time jobs, and it is clear that the U.S. economy is not generating sufficient jobs and remains weak more than five years after the Great Recession formally ended.

Several factors contribute to an explanation of the weak recovery from the Great Recession. When economic downturns are brought about by financial crises, they tend to be more lasting because the machinery of the credit system and the confidence of lenders have been so severely damaged. Programs to relieve the dreadful damage done to millions of homeowners have been minimal, leaving families in dire straits and leaving the housing market in the doldrums; and people with high debt are reluctant to spend, further restraining economic expansion. Also, while the Great Recession developed in the United States, it spread to much of the rest of the world. Conditions in Europe, especially, have hampered full recovery in the United States.

In late 2014, on the surface, the likelihood of positive change is not auspicious. With the underlying nexus of power-ideology-inequality still in largely in place, economic life is threatened by a new crisis. Moreover, the success of the Republicans in the November 2014 elections would seem to squash possibilities for positive change. Yet, as pointed out above, the ideology of market fundamentalism, which has been both a foundation for that success and a basis for the poor economic conditions that confront the great majority of the populace, is increasingly being rejected. This ideological shift, if it can be maintained, offers a basis for positive developments. The sorts of changes advocated in this article, changes that would improve people’s lives and alter the underlying causes of the economic crisis, continue to be necessary. They also continue to be possible.

This Article originally appeared in dollarsandsense.org in the November 2014 issue. Reprinted with permission.

About the author: Arthur MacEwan is professor emeritus of economics at UMass-Boston and a Dollars & Sense Associate.

USA Today Editorial: Court Secrecy Kills

Tuesday, December 30th, 2014

USA Today has just run a startling and powerful editorial that shines a bright light on a dark practice. All too often, corporations that have manufactured defective and sometimes deadly products, or are engaged in other severely illegal behavior, ask courts to cover up the wrongdoing. Through the excessive use of secrecy orders, far too many courts have sealed evidence and allowed corporations to conceal facts that – if they had become publicly known – would have stopped dangerous and illegal behavior.

In particular, USA Today focuses on the case of Rich Barber, whom we had the privilege of successfully representing in a challenge to abusive court secrecy. Rich’s son was killed because a Remington rifle had fired without the trigger being pulled due to a design defect that Remington knew about and concealed for decades. USA Today argues that a pattern developed over a number of cases: a particular plaintiff would discover key internal documents of the gun manufacturer relating to the defect and its knowledge, and Remington would settle the cases and demand (and get) broad secrecy orders sealing up the evidence. As a result, the public didn’t learn of the defect for many years, and many more people died.

USA Today notes that Rich Barber’s work, and that of Public Justice, helped break down this wall of secrecy. Rich championed important legislation in Montana that now restricts courts from sealing records in cases involving public safety.

I urge you to read USA Today’s editorial in its entirety, and to share it with others. Their editorial board put the entire problem in perspective:

Clever use of court secrecy – confidential settlements and ‘protective orders’ to seal documents – helped keep evidence of the rifle’s potential dangers under wraps. Had court documents been public, injuries might have been prevented and lives saved.

This blog originally appeared in publicjustice.net on December 30, 2014. Reprinted with permission.

About the authors

F. Paul Bland, Jr., Executive Director, has been a senior attorney at Public Justice since 1997. As Executive Director, Paul manages and leads a staff of nearly 30 attorneys and other staff, guiding the organization’s litigation docket and other advocacy.

Leslie A. Bailey represents consumers who have been cheated, advocates for the public’s right of access to court records, and litigates complex public interest appeals in federal and state courts throughout the country.  As a leading expert on the enforceability of arbitration clauses in consumer contracts, she has represented plaintiffs and amici in numerous arbitration-related appeals

Bargaining Power to the People

Sunday, December 28th, 2014

Leo GerardEarlier this month, in the sparsely populated Kentucky county that’s home to Bowling Green, officials voted to convert the place into a right-to-work (for less) sinkhole.

The county officials did it at the bidding of big corporations. They certainly didn’t do it for their Warren County constituents because employees in right-to-work (for less) states get smaller paychecks than those in states that support the right to unionize. They did it at the demand of the American Legislative Exchange Council (ALEC) and the Heritage Foundation, both of which are corporate owned and operated.

They did it despite the fact that there’s no evidence they have any legal authority to create an anti-union bastion on the county level, which means they’ve subjected the residents of Warren County to substantial costs for a legal battle that Warren is likely to lose.

Moving right-to-work (for less) from the state to the county level is the latest tactic in the relentless campaign by CEOs and corporations to reverse gains made by workers in the 1930s New Deal. With laws like the Fair Labor Standards Act (FLSA) and National Labor Relations Act (NLRA), President Franklin D. Roosevelt and a Democratic Congress slightly moved toward workers the lopsided balance of power that heavily favors corporations. Over the next several decades, the middle class thrived and income inequality decreased substantially. Now, however, income inequality is back up to the point where it was in the robber baron days because CEOs and corporations have stuck their fat thumbs back on the scale.

The FLSA created the 40-hour work week by mandating time-and-a-half pay beginning at the 41st hour worked. Before the law, managers could force employees to labor 50, 60 even 70 hours a week at no extra pay. During the Great Depression, bosses could fire those who dared complain and easily replace them. Corporations had all the power. FLSA gave a little of that muscle to workers by enabling them to demand extra pay for extra work. As a bonus, FLSA encouraged businesses to hire rather than pay overtime, which increased employment.

The NLRA provided workers with a pathway to unionize. It established standards for employees to form a union at a workplace and for employers to recognize that union as the collective bargaining agent for the workers. Before the NLRA, Pinkertons, police and national guardsmen all too frequently killed striking workers. After the NLRA, unions multiplied, and collective bargaining achieved better wages, benefits and pensions for workers.

But from the day these laws passed, corporations and lackey groups like ALEC and the Heritage Foundation fought to reverse them. They wanted all power and wealth to remain with the one percent.

They invented right-to-work (for less) laws to do that. When a majority of workers at a factory vote to be represented by a union, federal law requires the union to work for all of them, to negotiate agreements that cover all of them, to file grievances for any worker wronged by management. That costs money. And that’s what union dues pay for.

What right-to-work (for less) laws say is that workers who receive these benefits don’t have to pay for them. Federal law requires unions to continue representing workers who are freeloaders. Unions may even have to pay to hire lawyers to represent freeloaders in grievances. That handicaps the union and strengthens the corporation.

And it’s a big part of the reason that employees in right-to-work (for less) states earn less. They lack bargaining power.

In the case of Kentucky, ALEC, the Heritage Foundation and other anti-worker groups resorted to seeking anti-worker legislation from counties when they failed in November to secure a Republican majority in the House of Representatives to provide it on the state level. They’re pushing this new scheme even though federal law gives right-to-work (for less)  legislative authority to states and territories, but not to counties.

The anti-worker groups formed a new organization to help persuade counties to pass the laws. It’s called Protect My Check. Its purpose is to defend the compensation of CEOs. Right-to-work (for less) legislation means fewer dollars in workers’ paychecks and more in CEOs’, so clearly the role Protect My Check is to pad CEO pay.

Similarly, CEOs are grabbing for themselves the overtime pay that workers once received. Workers are laboring more and more hours, and fewer and fewer of them are getting paid overtime. That’s because the level at which federal law requires overtime pay hasn’t kept pace with inflation. It’s $23,660 a year. An employer who claims fry cooks are supervisors and sets salaries at one dollar more ­– $23,661 – doesn’t have to pay time and a half for 10, 20, even 30 hours worked above 40.

In 1975, Republican Gerald Ford raised the threshold significantly to account for inflation, making 65 percent of salaried workers eligible for overtime pay. Now, only 12 percent qualify. Studies by the Economic Policy Institute have shown that if the threshold had kept pace with inflation since then, it would be $50,440 a year – more than twice the current level.

In the meantime, corporate demands for overtime work have increased. A Gallup poll of workers in August found 60 percent laboring more than 45 hours a week. Sixteen percent said they worked more than 60 hours.

Last spring, President Obama proposed raising the wage under which corporations would have to pay overtime. Immediately, anti-worker groups protested. Daniel Mitchell, a senior fellow with the Cato Institute, said, for example, “If they push through something to make a certain class of workers more expensive, something will happen to adjust.” He suggested that would be pay cuts or layoffs.

A certain class of workers has grown extraordinarily more expensive. That is CEOs. The pay for the top 1 percent rose 31.4 percent in the three years from 2009 to 2012, according to research by Emmanuel Saez, a professor at the University of California at Berkeley. Income for the bottom 99 percent of workers was stagnant, rising only 0.4 percent.

Cato’s Mitchell is right. A certain class of workers is more expensive, and the thing that happened is that 99 percent of workers are suffering for it.

President Obama is trying to rebalance this gross inequality by raising the overtime threshold. But to more permanently tip the scales closer toward equality for workers, he should take measures to support workers’ right to form unions and collectively bargain for a fair share of the profits derived from the sweat of their brows.

This blog originally appeared in ourfuture.org on December 23, 2014. Reprinted with permission.

About the author: Leo Gerard International President of the United Steelworkers (USW), took office in 2001 after the retirement of former president George Becker.

 

Women With The Same Qualifications As Men Get Passed Over For Promotion

Sunday, December 28th, 2014

Bryce CovertEven when women have the same experience, tenure, and jobs as men, they have a much lower chance of being promoted, according to a new study.

Authors Astrid Kunze and Amalia R. Miller examined private sector employment data from Norway, known as a generally women-friendly country, between 1987 and 1997. They found that even when controlling for industry, occupation, age, education, experience, tenure, and whether workers are full or part time, women are 2.9 percentage points less likely to get a promotion than men. On top of that, they found that “[f]or men, fatherhood is associated with a greater chance of promotion,” but for women, “children have a negative effect on promotion rates and that effect is even more negative if they are younger.”

Chances of promotion aren’t much better even if women stick it out with one company. Women experience internal promotion rates that are 34 to 47 percent lower than for men. It also doesn’t matter whether they’re entry-level or at the top of their company: at every level, women are less likely to be promoted to the next rung by the following year.

Given how low their chances are of advancing, it may not be surprising that women are huddled toward the bottom of the hierarchy. The authors found that the lowest rank is over 80 percent female, while men make up more than 90 percent of the employees in the top three highest ranks. This problem is persistent. “Across all years in our data, women are never more than 6 percent of the top three ranks, on average, even as their overall share of the average workplace increases from 25 to 33 percent,” the authors write. Meanwhile, female bosses are rare: more than a quarter of the workers they looked at don’t have any women leaders, while just 1 percent has all female bosses. Here in the U.S., women make up less than 15 percent of executive officers.

The lack of mobility to higher ranking jobs also impacts the gender wage gap. In their data set, women make 76 percent of men’s pay (in the U.S., that ratio is currently a similar 78 percent). But within each job rank, women make between 88 to 98 percent of what men do, and taking job rank into consideration decreases the gap by 59 percent.

Since the data for the study was collected, Norway and some other countries have implemented a gender quotas for women on boards, seeking in part to increase women’s representation in firms generally by promoting women in leadership. That may be a smart way to address it, as the study found that the more female bosses there are, the more likely it is for women below them to get promoted, while men aren’t impacted. Increasing the share of bosses that are women by .24 percent would decrease the gender gap in promotions by more than 40 percent. This “suggests that one reason for women’s slow progress to the top of corporate hierarchies is the historical male domination of those ranks,” the authors conclude.

This blog originally appear in thinkprogress.org on December 22, 2014. Reprinted with permission.

About the author: Bryce Covert is the Economic Policy Editor for ThinkProgress. She was previously editor of the Roosevelt Institute’s Next New Deal blog and a senior communications officer. She is also a contributor for The Nation and was previously a contributor for ForbesWoman. Her writing has appeared on The New York Times, The New York Daily News, The Nation, The Atlantic, The American Prospect, and others. She is also a board member of WAM!NYC, the New York Chapter of Women, Action & the Media.

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