Outten & Golden: Empowering Employees in the Workplace

Union benefits that could save your home

March 10th, 2015 | David Tindell

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One out of every 200 homes will be foreclosed according to the Federal Deposit Insurance Corporation. For a city the size of Washington, DC, that’s as much as 3,000 homes per year. And what does foreclosure look like?

 

According to the Homeownership Preservation Foundation:

  • 32% experienced a job loss.
  • 25% experienced a health crisis.
  • 85% have already missed one mortgage payment.
  • Most have no savings, no available credit, and extended families have limited resources.
  • Most have first-time loans, less than three years old.

These are scary situations, but not necessarily uncommon ones. Although foreclosures and delinquencies have dropped to pre-2007 levels, knowing what to do can be the difference that saves your home. If you are a union member, you have resources available when things go bad, and to help make sure things don’t get worse.

  • Union Plus save my home hotline: This program is provided through the non-profit Money Management Institute (MMI), and is accredited to provide counseling for labor union members facing foreclosure. This program has the largest network of local offices, for those who don’t prefer counseling by phone.

 

  • Union Plus Mortgage Program – The Union Plus Mortgage program can help you purchase a home while also receiving special benefits by virtue of your union membership. Once you have a Union Plus mortgage for a year or more, you’re protected by a unique mortgage assistance program administered through the AFL-CIO Mutual Benefit Plan. The Union Plus Mortgage Assistance provides interest-free loans and grants to help make mortgage payments when you’re disabled, unemployed, locked out or on strike. The program has provided over $10.6 million in assistance to union members.
  • Foreclosure resources from the AFL-CIO – Knowledge is power when it comes to saving your home. The AFL-CIO’s website has a robust list of information regarding what to do in this situation, including:
    • Rights during foreclosure
    • Federally approved housing counselors
    • Legal Assistance
    • And information regarding negotiating a mortgage modification with your bank
  • AFL-CIO Community Services Network – The AFL-CIO Community Services Programs were established to improve the lives of workers and their families by connecting to their human and social services needs. Some of the services they provide include an emergency assistance fund, information and referral services, lay-off & strike preparation, and educational workshops.

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About the Author: David Tindell is a Marketing Assistant for Union Plus. He joined Union Plus in 2012, and has written for the Union Plus Consumer Bargains blog since 2013.

 

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Six Years After the Lilly Ledbetter Fair Pay Act and Still More Work to Do

March 10th, 2015 | Sharon Vinick

Sharon_vinick[1]Six years ago in January, President Obama signed his first piece of legislation — the Lilly Ledbetter Fair Pay Act – to extend the time period in which an employee could file a claim for pay discrimination.  The Act overruled the United States Supreme Court’s decision in Ledbetter v. Goodyear Tire & Rubber, which Ledbetter said allowed her employer to pay her unfairly “long enough to make it legal.”

At the time of its passage, President Obama said that the passage of the Act would “send a clear message that making our economy work means making sure it works for everyone.”

Sadly, in the six years since the passage of the Act, the gender pay gap has – at best – barely budged.  Indeed, by some estimates, the wage gap has actually widened in the last few years.

If the new Congress is truly committed to the goal of pay equity, concrete steps must be taken.  First, Congress should pass the Paycheck Fairness Act, which will strengthen the Equal Pay Act and help secure equal pay for equal work.  Second, Congress must act to increase the minimum wage, as women make up two-thirds of the country’s minimum wage earners.   Third, Congress should enact a universal, government-paid preschool program, as 10% of the wage gap is attributable to time that women spend outside of the workforce.

While the Lilly Ledbetter Fair Pay Act was a step in the right direction, Congress still has a lot of work to do to close the persisting wage gap.  Let’s hope by the Seventh Anniversary of the Act, we are closer to pay equity and an economy that truly works for everyone.

This article originally appeared on celavoice.org on January 29, 2015. Reprinted with Permission.

About the Author: Sharon Vinick is the Managing Partner of Levy Vinick Burrell Hyam LLP, the largest women-owned law firm in the state that specializes in representing plaintiffs in employment cases. In more than two decades of representing employees, Sharon has enjoyed great success, securing numerous six and seven figure settlements and judgments for her clients. Sharon has been named by Northern California Super Lawyers for the past five years. Sharon is a graduate of Harvard Law School and UC Berkeley. In addition to being a talented attorney, Sharon is an darn good cook.

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How Our Trade Policies Kill Jobs

March 9th, 2015 | Dave Johnson

Dave JohnsonTrade is great. We all trade. A lot of us trade labor for money that buys other things. A farmer trades corn for money that buys other things, and so on. No one is “against trade.”

But is anything called “trade” always good for all involved? Imagine you’re a farmer and you make a deal to trade corn and wheat to get money for a new tractor. So the farmer orders a new tractor, but the “trade partner” never buys any corn or wheat. After a while the “trade partner” shows up with a big bill, saying the farmer owes money for the tractor. And then the farmer finds out that the “trade partner” plans to use the proceeds from the sale of the tractor to grow their own corn.

In modern terms, we would say that the farmer was “running a trade deficit.” How much damage do you think that “trade deficit” is doing to that farmer, and the farmer’s ability to make a living in the future? How long do you think that farmer would let that “trade agreement” continue?

Ongoing U.S. Trade Deficits

The U.S. is currently running a net trade deficit of over $500 billion dollars each year with our “trade partners.” We have been running trade deficit every year since the late 1970s. We buy from them, but they don’t reciprocate and buy from us, so the trade is out of balance – way out of balance.

These other countries use the proceeds from our purchases to set up their own industries so they don’t have to buy from us in the future. We let this happen so as our industries move away we will have no choice but to import. In many cases our own so-called “American” corporations are voluntarily “deindustrializing” and sending the factories and equipment to “trading partners” elsewhere.

The Damage

When a country runs a trade deficit it means that the “demand” for goods and services created by that country’s economy is being exported, and people are being hired in other countries instead of that country. It means that the growth of that country’s economy and number of jobs available is lower than it would be. Last week’s Wall Street Journal report, “U.S. Trade Gap Narrows in January,” for example, called our trade deficit “a drag on overall growth.” They quantified how much, reporting that, “Net exports—the difference between exports and imports—subtracted 1.15 percentage point from fourth-quarter gross domestic product.”

In “Stop Currency Manipulation and Create Millions of Jobs,” Robert Scott at the Economic Policy Institute (EPI) writes, “Rising trade deficits are to blame for most of the 5.7 million U.S. manufacturing jobs (nearly a third of manufacturing employment) lost since April 1998.”

John Olen writes at Economy in Crisis in, “Lack of Jobs is Due to Our Trade Deficit“:

Trade policy that encourages businesses to relocate production of goods to other nations without penalizing them for selling those goods back to this nation has resulted in millions of lost jobs. White House estimates show that for every $1 billion in goods exported, the economy creates 5,000 jobs. Unfortunately, that street goes both ways — data from the Economic Policy Institute shows that for every $1 billion in goods imported, the economy loses 9,000 jobs.

In “The Trade Deficit: The Biggest Obstacle to Full Employment,” Dean Baker explains that fixing “…the persistent trade deficit, through which the United States exports labor demand, would help a great deal in moving the job market toward full employment.” (Full employment results in wage growth as employers bid for employees.)

This massive loss of jobs, of course, has an effect on wages. This chart, from the post, “Does Trade Deficit Drive Inequality?” shows the correlation between the trade deficit and the way people’s wages stopped rising along with productivity in the late 1970s – the same time as the trade deficits started putting downward pressure on wages. In other words, regular, working people stopped sharing the benefits of improvements in our economy.

 

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The ongoing trade deficit has hamstrung our economic recovery and continues to threaten to derail it. The Washington Post’s Wonkblog recently explained that danger, using this long headline: “The one thing that could cut the economic recovery short: If you want a picture of the recovery’s future, imagine a trade deficit stamping on the economy’s face—forever.”

… Whenever one part of the economy takes off, like consumer spending has now, another falls off, like net exports. The difference now, though, is that, for the first time, you can see the potential for the recovery to break out of this cycle, and finally take two steps forward. … But there’s only so far these things can grow—people can’t keep spending more unless they save less—which is why we can’t afford for the trade deficit to be a persistent drag on GDP.

Since The 1970s!

How long have we – the United States – been letting that continue? We have been running trade deficits every single year since the late 1970s, when the neoliberal “free market” and “free trade” ideology came to dominate our thinking. This didn’t just happen. It had the help of billions of corporate and billionaire dollars invested in conservative “think tanks” and other PR and marketing efforts to convince the public that privatization and “trickle down” and tax cuts and letting corporations handle things instead of We-the-People government was the best way to do things.

Since the late 1970s American corporations have been closing factories here and replacing with them factories elsewhere. We have been moving entire industries out of the country, and not bothering to compete for new, strategic industries of the future.

Why Does This Continue? Protecting Investments Over People.

Why would a country run trade deficits year after year? Because the trade deficit benefits a few people. In ““Free Trade” Was Never Really About Trade” Stan Sorscher explains, (emphasis added, for emphasis)

Our free trade policy encourages production to leave the country. We’ve lost millions of manufacturing jobs. More than 60,000 manufacturing plants were closed between 2000 and 2010 as production moved overseas. These costs are real.

[…] Free trade agreements are bad for millions of people because they are not really about trade. More importantly, they limit the political process so investors are relieved of responsibility for protecting the environment OR recognizing labor rights or human rights, OR dealing with public health OR worrying about prudent financial regulation.

Sorscher says here that protecting investments over people results in “downward pressure” on everyone except the investors. It means lower environmental protection costs for corporations. It means lower costs for protecting health and safety and rights. It means higher unemployment, which means downward pressure on wages. Lower wages and other such costs are great if you are an employer, but of course are bad for the rest of us.

Mike Collins writes at Forbes, in “America’s Trade Deficit – The Job Killer“:

Trade deficits must be financed. A country simply cannot have a trade deficit unless private or government investors are willing to finance it. This is not simply an accounting convention – it is real debt.

[…] But why isn’t the government, Wall Street, multinational corporations, and many pundits and bloggers worried about the growing trade deficit? Why is the trade deficit largely ignored while everyone is more concerned about the federal deficit? Wall Street, the Multi-national corporations and the Obama Administration have adopted a policy of appeasement where foreign mercantilism seems to be irrelevant and attempts at balancing trade are ignored. It is as if the trade deficit is an open-ended charge account that is simply an accounting summary that will never have to be paid back.

He is not quite saying that Wall Street and our government are financing our trade deficit in order to keep jobs scarce and therefore wages low – just that this is the net result of policies, decisions.

If People Understood The Trade Deficit

This continues because we – the United States as a country – do not have national industrial/economic policies that recognize the U.S. as a country with national economic interests. Instead, our leadership and opinion elite have been convinced by the ongoing conservative campaign that government should not “interfere” and that acting as a country to protect our national economic interests – known as “protectionism” – is bad. Meanwhile other countries are doing exactly that, and their economies and industries benefit from it.

This ongoing trade deficit has transferred trillions of dollars out of our economy. It has cost us millions of jobs, tens of thousands of factories and entire industries. As it continues it is costing us our ability to make a living as a country – except for our financial sector.

This has made a very few people unimaginably wealthy, but it has made the rest of us, and the country, poorer.

If people understood the trade deficit and the harm it does to approximately 99.9 percent of us, they would demand that our politicians do something to fix it. And if that happened, great things would happen for working people and our economy.

This blog originally appeared in Ourfuture.org on March 9, 2015. Reprinted with permission.

About the Author: Dave Johnson has more than 20 years of technology industry experience. His earlier career included technical positions, including video game design at Atari and Imagic. He was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.

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Companies In This Country Now Have To Have At Least 30 Percent Women On Their Boards

March 9th, 2015 | Bryce Covert

Bryce CovertOn Friday, Germany passed a law that will require companies to give 30 percent of supervisory board positions to women.

The quota will apply to the country’s 100 biggest companies by next year, where women currently hold just 18.6 percent of board director seats. Another 3,500 have until September 30 to submit their plans for increasing the share of women on their boards.

The fact that German companies have less than 20 percent women on their boards means that the country is surpassed by many European peers. Norway tops the list with 35.5 percent female boards, followed by Finland, France, and Sweden, which all have just under 30 percent female representation, and Belgium, the United Kingdom, Denmark, and the Netherlands, which all have above 20 percent.

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What makes these countries stand out is the policies they already put in place for board diversity. Noway was the first to pass a gender quota in 2008, while France, Finland, Belgium, the Netherlands, and Denmark have all since followed suit. Sweden and the United Kingdom don’t have binding laws, but the former has threatened to institute one if companies don’t increase diversity, while the UK set a goal of 25 percent women on boards that spurred rapid diversification. Spain, Iceland, and Italy also have quotas.

Women’s global progress toward equality in board representation has been slow. Their share of seats had only increased by 1.7 percent since 2009 as of 2013. Most of that progress has taken place in Europe, where these quotas are common.

In the United States, by contrast, growth has been slower. Women make upless than 20 percent of board positions at S&P 500 companies. A different measure, of companies in the Fortune 500, found in 2013 that women made up less than 17 percent of seats and hadn’t made inroads in eight straight years. There are more men named John, Robert, James and William on American boards than all women combined.

The one rule the U.S. has for gender diversity on boards lies with the Securities and Exchange Commission, which requires them to disclose how they consider diversity when choosing board members. But it’s so vaguely written that few companies take it to mean gender or racial diversity, instead focusing on experience or background. Some also comply with the rule by simply saying they don’t take diversity into account.

Quotas, on the other hand, appear to work, at least when it comes to increasing women’s representation on boards. Norway’s quota hasn’t just significantly increased the number of women on boards, but has also increased the quality of female candidates. Other research has found that since it’s been in place, corporate directors now value women’s contributions and have come to support it.

Companies also stand to benefit from better board diversity. One study found that companies with more than one woman on their boards have seen a 3.3 percent better stock market return since 2005 than those that are all male, while at least two other studies have come to the same conclusion. Gender diversity also leads companies to make decisions that protect company value and performance and away from those that lead to fraud, corruption, or other scandals.

This article originally appeared in thinkprogress.org on March 10, 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.

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Black Equality Doesn't End in February

March 3rd, 2015 | Carmen Berkley

carmen_aflcioBlack History Month is more than just acknowledgement in a newspaper or a special program at your children’s school. It’s an opportunity to reflect on how far black people in the United States have come in their struggle for justice and equal rights, while not forgetting the scores of women and men whose lives have been destroyed by our biased judicial system. The mass criminalization of millions of men and women, mostly people of color who are imprisoned for small infractions, creates a group of second-class citizens who are unable to rebuild a life for themselves even after serving their time.

In 2013, the labor movement passed a resolution recognizing that mass incarceration has become a big business whose product is low wages and ruined lives, and we decided that it’s time for labor to join forces with our allies in the criminal justice community and fight back. Together we are working toward achieving a reformed criminal justice system that offers formerly imprisoned people an economic path forward and restores voting rights—and we are already winning battles. Last year, California passed Prop. 47, a ballot measure that reduced the classification of some low-level nonviolent crimes from felonies to misdemeanors. The crimes covered by the proposal include things like minor drug possession and petty theft, minor offenses that should not define or destroy an individual’s life.

Mass incarceration is not only a civil rights issue, it’s an economics issue. AFL-CIO President Richard Trumka traveled to Los Angeles before Prop. 47 passed to shed some light on the situation. He noted that one-third of African American men will serve time in federal prison during their lifetime. That’s an incarceration rate five times greater than that for white men, even though studies have shown that white men and black men commit crimes at roughly the same rates. Once those men and women get out of prison, they have a harder time finding employment and housing due to their arrest records.

The labor movement is a movement of second chances and firmly believes our criminal justice system needs to offer people another chance to contribute to our society. The AFL-CIO staunchly opposes harmful policies like mandatory sentences for nonviolent crimes and we support programs that help people reintegrate into their communities, such as job training, education, probation and parole. If we are going to raise wages for all workers, we have to ensure that everyone has a fair shot at earning a wage.

Black History Month might be coming to an end, but the struggle to ensure that African Americans have a fair shot lasts until there is equity in our criminal justice system. Let’s focus on ensuring that every member of our communities has a shot at charting his or her own path forward. It’s time for us to wake up, come together and strive to create a criminal justice system that works.

This article originally appeared at The Huffington Post, and reposted at AFL-CIO.org March 3, 2015.

About the author: Carmen Berkley is the Civil, Human and Women’s Rights Director at the AFL-CIO. She also serves as a Principal Consultant at Can’t Stop Won’t Stop, LLC , Lead Trainer for Campus Camp Wellstone, and is a proud member of the Black Youth Project 100.

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Yahoo CEO Doesn’t ‘Play The Gender Card’ Because Gender Isn’t ‘Relevant’ In Tech

March 2nd, 2015 | Lauren Williams

Yahoo CEO Marissa Mayer tries to stay far away from the gender-based stereotypes plaguing the tech industry.

“I never play the gender card…The moment you play into that, it’s an issue,” Mayer told Medium for an article centered on Yahoo’s two-decade legacy and Mayer’s hand in turning the company around. “In technology we live at a rare, fast-moving pace. There are probably industries where gender is more of an issue, but our industry is not one where I think that’s relevant.”

Mayer’s comments go against the consensus from Silicon Valley players and tech employees that name lack of diversity, gender-based discrimination and harassment as persistent problems in the industry.

While gender is certainly an issue when it comes to workplace diversity, it’s even more pronounced when climbing through the ranks. Women only make up 11 percent of all executive positions in Silicon Valley companies, and often deal with hostile work environments, where sexual harassment and innuendo are rampant.

Mayer has been lauded for her hands on approach in leading Yahoo’s transformation from a struggling ad-based model to a tech giant once again. She’s also garnered respect and praise for breaking into the fairly exclusive, male-dominated club of company executives, and even more so, tech CEOs.

She is one of 24 women CEOs at S&P 500 companies, and just one of four female CEOs in the tech industry’s S&P 500 companies — Xerox’s Ursula Burns, Hewlett Packard’s Meg Whitman, Oracle’s Safra Catz, and Virginia Rometty at IBM, according to a report from Catalyst, a business research and strategy firm.

Like other tech companies, including Google and Twitter, looking to diversify and shed the “brogrammer” stereotype, Yahoo employees are overwhelmingly male and white. Women make up 37 percent of of all Yahoo employees, according to the company’s diversity report released last year. Only 15 percent work in tech worldwide, while another 23 percent hold leadership positions.

Those figures are echoed throughout the industry and have led companies to make deliberate efforts to boost racial and gender diversity, weed out harassment and discrimination. For example, Google launched an initiative “Made With Code” to get young girls interested in coding, alongside independent efforts that ramp up outreach efforts through programs like Black Girls Code and Code2040 to make the industry less homogenous.

This article originally appeared on thinkprogress.org on March 2, 2015. Reprinted with permission.

About the author: Lauren C. Williams is the tech reporter for ThinkProgress with an affinity for consumer privacy, cybersecurity, tech culture and the intersection of civil liberties and tech policy. Before joining the ThinkProgress team, she wrote about health care policy and regulation for B2B publications, and had a brief stint at The Seattle Times. Lauren is a native Washingtonian and holds a master’s in journalism from the University of Maryland and a bachelor’s of science in dietetics from the University of Delaware.

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Woman Becomes Homeless After Employer Allegedly Fired Her Over Her Pregnancy

March 2nd, 2015 | Bryce Covert

Bryce CovertBetzaida Cruz Cardona is 32-weeks pregnant, unemployed, and homeless. But just a few months ago, she had a job she was willing and able to do that paid her rent.

Cruz had been a cashier at a Henrietta, New York, Savers since April of 2014 when she got pregnant and visited the doctor frequently for complications. At one visit, her doctor gave her a note saying that she shouldn’t lift more than 25 pounds. But since her job simply required that work at a cash register, she didn’t expect it to interfere with her work.

A half an hour after she handed in that doctor’s note and told her manager she still wanted to keep working, she says she was fired without any explanation except that the corporate human resources department told her manager to do so and she should “stay home and take care of [her] pregnancy.” She wasn’t told it was to do with any disciplinary issues or the days off she had taken to visit the doctor, given that they were excused.

A spokeswoman for the company said its policy is not to comment on specific employment matters, but added, “we have not, do not, and will not tolerate discrimination of any type, including pregnancy discrimination, toward our valued employees.”

Cruz told ThinkProgress “everything basically went bad” after she was fired. “My family, we didn’t have enough money to pay everything. It was just arguments and fights [with her boyfriend] because I had lost my job. So I lost my apartment, I lost everything.”

She’s since has been moving “from house to house to house to house.” Moving around so much while pregnant is “extremely hard because it’s not comfortable,” she said. “It’s stressful, depressing.”

Cruz is now suing Savers with the help of lawyers from A Better Balance and Emery Celli Brinckerhoff & Abady LLP (ECBA). Her lawyers say the company violated the Pregnancy Discrimination Act (PDA), which bans employment discrimination on the basis of pregnancy, given the timing of her termination and the comment that she should stay home, which is “evidence of discriminatory intent,” explained Dina Bakst of A Better Balance. It also violated the PDA by refusing to give her an accommodation so she could keep working, which her lawyers say was given to a different worker with carpal tunnel syndrome. But while the case is about accommodation, “it’s even more so a case of outright discrimination against pregnant people,” said Elizabeth Saylor of ECBA, given that she didn’t need to lift objects to continue doing her job.

Since she had a condition related to her pregnancy that limited her activity, her lawyers say she was also covered by the Americans with Disabilities Act.

The lawyers are also charging the company with a pattern and practice of discrimination against pregnant women. While the company has an express policy against discriminating against workers with disabilities, “unfortunately they don’t have any policy that we’ve seen or anything in the employment manual relating to not discriminating against pregnant women and providing them with accommodations,” said Saylor.

In response to a request for information about the company’s policies, the Savers spokeswoman said, “Savers makes reasonable accommodations for team members when they have a disability that limits their ability to perform their job.” She said that the policy applies to all workers, including those who are pregnant. Bakst argued, “that’s not what the policy says, and that’s not how the policy was applied to Ms. Cruz.”

Cruz’s lawyers also point to the involvement of the corporate human resources department of a sign that Cruz’s firing wasn’t the work of a rogue manager. “One of our express goals is for Savers to adopt a new policy that clearly states it will not discriminate against pregnant employees,” Saylor added.

To add insult to injury, Cruz says that the company claimed she had voluntarily quit for medical reasons on her termination paperwork, which made it very difficult to get unemployment insurance. She filed for the benefits in early September but didn’t start receiving them until January. And while her boyfriend has helped her out financially, her family doesn’t have the resources to help.

“I tried to get a job, but since I’m pregnant it really has been hard,” she said. “I’m planning after I have [the baby] on starting to find a job, but first I have to find somebody that can have her while I’m working.”

Had Cruz lived in New York City, instead of further upstate, the whole incident might not have happened. New York City passed a Pregnant Workers Fairness Act in 2013, which requires employers to give pregnant workers reasonable accommodations, such as light duty, unless they can prove it would mean an undue burden. “It makes it crystal clear that employers have to affirmatively provide reasonable accommodations to workers with pregnancy-related needs,” Bakst explained. The rest of the state doesn’t have such a law, however; one has been passed in its senate but is still pending. “If there was an unmistakably clear law that informed employers of what their obligations are to accommodate workers, this may not have happened,” she added.

Other states have passed similar laws that cover all of their workers, and a federal bill that would apply to the entire country has been introduced multipletimes in Congress. Yet it has failed to move forward.

In the meantime, Cruz’s experience is unfortunately extremely common. An estimated quarter million women are denied their requests for an accommodation for their pregnancy every year, and many more are afraid to even ask. But 80 percent of first-time mothers work into their last month of pregnancy. A number of other employers are facing lawsuits over pregnancy discrimination, from Walmart to Bloomberg TV.

This article originally appeared in thinkprogress.org on March 2, 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

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The Federal Reserve Board’s Plan to Kill Jobs

March 2nd, 2015 | Dean Baker

Image: Dean BakerThere is an enormous amount of political debate over various pieces of legislation that are supposed to be massive job killers. For example, Republicans lambasted President Obama’s increase in taxes on the wealthy back in 2013 as a job killer. They endlessly have condemned the Affordable Care Act as a job killer. The same is true for proposals to raise the minimum wage.

While there is great concern in Washington over these and other imaginary job killers, the Federal Reserve Board is openly mapping out an actual job-killing strategy and drawing almost no attention at all for it. The Fed’s job-killing strategy centers on its plan to start raising interest rates, which is generally expected to begin at some point this year.

The Fed’s plans to raise interest rates are rarely spoken of as hurting employment, but job-killing is really at the center of the story. The rationale for raising interest rates is that inflation could begin to pick up and start to exceed the Fed’s current 2.0 percent target if the Fed doesn’t slow the economy with higher interest rates.

Higher interest rates slow the economy by discouraging people from borrowing to buy homes or cars. They will also have some effect in discouraging businesses from investing. With reduced demand from these sectors, businesses will hire fewer workers. This will weaken the labor market, which means workers have less bargaining power. If workers have less bargaining power, they will be less well-situated to get pay increases. And if wages are not rising there will be less inflationary pressure in the economy.

The potential impact of Fed rate hikes on jobs is large. Suppose the Fed raises interest rates enough to shave 0.2 percentage points off the growth rate, say pushing growth for the year down from 2.4 percent to 2.2 percent. If we assume employment growth drops roughly in proportion to GDP growth, this would imply a reduction in the rate of job growth of almost 10 percent. If the economy would have otherwise created 2.4 million jobs over the course of the year, the Fed’s rate hikes would have cost the economy more than 200,000 jobs in this scenario.

For comparison purposes, we are having a big fight over the Keystone pipeline. The proponents of the pipeline point to the jobs created by building a pipeline as an important justification, even if the oil being pumped through the pipeline may cause enormous damage to the environment. According to the State Department’s analysis, building the pipeline would create 21,000 jobs for two years. This pipeline related jobs gain has been widely touted in the media and is supposed to make it difficult for many members of Congress to go along with President Obama in opposing Keystone.

Yet, the Fed can easily destroy ten times as many jobs with a set of interest rate hikes this year with its actions passing largely unnoticed. In fact, the impact of Fed interest rate hikes on jobs can easily be far larger than this 200,000 number. If the Fed decides that the unemployment rate should not fall below a certain level (5.4 percent is a number is often used), then it could be costing the economy millions of jobs if the economy could actually sustain a considerably lower level of unemployment as it did in the late 1990s.

To be clear, Federal Reserve Board Chair Janet Yellen and her colleagues on the Fed’s Open Market Committee (FOMC), the committee that determines interest rates, are not evil people sitting around figuring out how to ruin the lives of American workers. The Fed has a legal mandate to control inflation, in addition to its mandate to sustain high levels of unemployment. If they raise interest rates it will be because they fear inflationary pressures will build if they let the economy continue to grow and unemployment to fall.

But this is inevitably a judgment call. The call is based on both their assessment of the risk of inflation and also the relative harm from higher rates of inflation as opposed to higher rates of unemployment. It is likely that the members of the FOMC, who largely come from the financial industry, are much more concerned about inflation than the population as a whole. They are also likely to be less concerned about unemployment. These are people who tend to read about unemployment in the data, not to see it themselves or among their friends and family members.

This is why it is important that the public be paying attention to the Fed’s interest rate policies and let them know how they feel about raising interest rates to kill jobs. The Center for Popular Democracy has organized an impressive grassroots campaign around the Fed’s interest rate policies. Those who don’t want to see the government deliberately trying to kill jobs might want to join in.

This article originally appeared on CEPR.Net and on ourfuture.org on March 2, 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.

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Good News for New York’s Tipped Workers: Your Minimum Wage is Going Up

February 26th, 2015 | Kevin Solari

 

in these timesNew York Governor Andrew Cuomo is no friend to labor, but this week his policies helped one of the most vulnerable segments of workers. On February 24, Commissioner of Labor Mario Musolino announced he would be following the earlier recommendation from the Wage Board to increase the minimum wage for tipped workers 50 percent to $7.50 an hour.

The move is the culmination of a process that began when Cuomo appointed the Wage Board last fall. Tipped workers were explicitly exempted from the 2013 minimum wage increase in New York state.

New York’s minimum wage for other workers is currently $8.75, and will be increasing to $9.00 on December 31. While servers are entitled to making at least that same minimum wage, with employers legally obligated to make up any shortfall, the law is often ignored. Cuomo says he would eventually like to see the state minimum wage increase to $10.50 and go as high as $11.50 in New York City.

While a big win for the hospitality industry as a whole, some groups are emphasizing the importance of the measure for women especially. According to the Restaurant Opportunities Centers United (ROC United), a workers organization with groups around the country that has worked to eliminate the two-tier tips-no tips wage system altogether, 71 percent of servers in the food industry are female—workers who, because of the tipped system, often say they face high levels of sexual harassment on the job.

“Today’s announcement is a victory for the thousands of New York women who have been demanding a more just and hospitable work environment in one of the fastest growing and largest economic sectors in the country—the restaurant industry,” said Saru Jayaraman, co-founder and co-director of ROC United, in a statement. Jayaraman said they would continue to work toward the elimination of the two-tiered system.

Seven states have eliminated the two tiered structure already.

The increase will help of thousands of workers. According to ROC’s statistics, one in three tipped workers are parents, one in six of those have children that qualify for free lunch, one in seven tipped workers relies on food stamps.

Tipped workers have been subject to a separate wage in New York since the Minimum Wage Law of 1937. Since then, tips have been taken into account so that employers could pay lower wages. Forty-two other states have a similar system.

This article originally appeared on inthesetimes.com on February 26, 2015. Reprinted with permission.

About the author: Kevin is an educator and freelance writer in Chicago.

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Executive Council Creates Labor Commission on Racial and Economic Justice

February 25th, 2015 | Mike Hall

Image: Mike Hall“America’s legacy of racism and racial injustice has been and continues to be a fundamental obstacle to workers’ efforts to act together to build better lives for all of us,” says the AFL-CIO Executive Council in a statement announcing the creation of a Labor Commission on Racial and Economic Justice.

The statement, released today at the council’s winter meeting in Atlanta, acknowledges “an ugly history of racism in our own movement” and adds:

“Yet at the same time the labor movement has a proud history of standing for racial and economic justice. When we have embraced our better selves we have always emerged stronger in every sense. And whenever we have succumbed to the temptation to see some working people as better than others, we have always ended up weaker.”

Pointing to today’s dramatically increasing economic inequality, decreasing union density and growing instability for the majority of Americans, the council says, “The need for all workers to strengthen common interests in achieving economic justice is clear.”

“At the same time our different experiences organized around race, gender identity, ethnicity, disability and sexual orientation often challenge and complicate this shared experience. If we are to succeed as a movement, the full range of working peoples’ voices must be heard in the internal processes of our movement. To be able to stand together we have to understand where all of us are coming from.”

The council points to the unemployment rate for African Americans—10.3%, more than twice as high as that for whites—the criminal justice system and educational inequities that are large parts of a “world divided in many ways by color lines.”

“At the same time working people share a common experience of falling wages and rising economic insecurity. To build a different, better economy we need power that can only come from unity and unity has to begin with having all our voices be heard, on all sides of those color lines. We have to start by acknowledging our own shortcomings and honestly addressing issues that are faced by the communities in which our members live—both the problems and the solutions. We have to find a way to see with each other’s eyes and address the facts and realities.”

The Labor Commission on Racial and Economic Justice will:

  • Facilitate a broad conversation with local labor leaders around racial and economic disparities and institutional biases, and identify ways to become more inclusive as the new entrants to the labor force diversify;
  • Engage in six to eight labor discussions around the country, with local labor leaders, constituency groups and young workers addressing racial and economic issues impacting the labor movement and offering recommendations for change; and
  • Attempt to create a safe, structured and constructive opportunity for local union leaders to discuss issues pertaining to the persistence of racial injustice today in the workforce and in their communities, and to ensure that the voices of all working people in the labor movement are heard.

This blog originally appeared in aflcio.org on February 25, 2015. Reprinted with permission.

About the Author: Mike Hall is a former West Virginia newspaper reporter, staff writer for the United Mine Workers Journal and managing editor of the Seafarers Log.  He came to the AFL- CIO in 1989 and has written for several federation publications, focusing on legislation and politics, especially grassroots mobilization and workplace safety.

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