Posts Tagged ‘AFL-CIO’
Monday, February 13th, 2017
Sweeping legislation introduced in the Illinois state legislature last month would dramatically improve pay, benefits and working conditions for almost a million of the state’s temp workers toiling in factories, warehouses and offices.
The Responsible Job Creation Act, sponsored by State Rep. Carol Ammons, aims to transform the largely unregulated temporary staffing industry by introducing more than 30 new worker protections, including pay equity with direct hires, enhanced safety provisions, anti-discrimination measures and protection from retaliation.
The innovative law is being pushed by the worker centers Chicago Workers’ Collaborative (CWC) and Warehouse Workers for Justice (WWJ), which say it would restore the temp industry to its original purpose of filling short-term, seasonal labor needs and recruiting new employees into direct-hire jobs.
Across Illinois, there are nearly 850,000 temp workers every year. Nationally, temp jobs are at record highs, with more than 12 million people flowing through the industry per year.
“Instead of temps just replacing people who are sick or coming during periods of higher production, they’re actually becoming a permanent staffing option,” says CWC executive director Tim Bell. “There’s nothing ‘temporary’ about it.”
Mark Meinster, executive director of WWJ, says there has been “an explosion” of temp workers in recent decades, especially in manufacturing and warehousing. “Those sectors are part of large, global production networks where you see hyper competition and an intense drive to lower costs. Companies can drive down labor costs by using temp agencies.”
CWC activist Freddy Amador worked at Cornfields Inc., in Waukegan, for five years. He tells In These Times the company’s direct hires start off making at least $16 an hour, but later get raises amounting to $21 an hour. As a temp, however, Amador was only making $11 an hour after five years on the job.
“As a temp worker, you don’t have vacation days, sick days, paid holidays”—all of which are available to direct hires, Amador says.
In These Times reached out to Cornfields to comment on this story. It did not immediately respond.
“Once a company is using a temp agency, it no longer has to worry about health insurance, pension liability, workers’ comp, payroll and human resources costs,” Meinster explains. “It also doesn’t have to worry about liability for workplace accidents, wage theft, or discrimination because, effectively under the law, the temp agency is the employer of record.”
This arrangement drives down standards at blue-collar workplaces, Bell says. “The company itself doesn’t have to worry about safety conditions because these workers aren’t going to cost them any money if they’re injured.”
“The safety for temp workers is really bad,” Amador says. “Temp agencies send people to do a job, but nobody trains them. Sometimes temp workers are using equipment they don’t know how to use, and they’re just guessing how to use it. I’ve seen many accidents.”
Under the new bill, temps like Amador would receive the same pay, benefits and protections as direct hires.
“This is landmark legislation,” Bell says. “There’s nothing like it in the United States.”
Last year, the Center for Investigative Reporting found a pattern of systemic racial and gender discrimination in the temp industry nationwide. Industry whistleblowers allege that African-American workers are routinely passed over for jobs in favor of Latinos, who employers consider to be more exploitable.
Discrimination can be hard to prove because staffing agencies aren’t required to record or report the demographics of who comes in looking for work. As Bell explains, applications often aren’t even filled out in the temp industry, but rather “someone just shows up to go to a job.”
The new bill would require temp agencies to be more transparent about their hiring practices by recording the race, gender and ethnicity of applicants and reporting that information to the state.
Furthermore, the bill includes an anti-retaliation provision that says if temp workers are fired or disciplined after asserting their legal rights, the burden is on the company and temp agency to prove that it was not done in retaliation.
“There’s this fundamental imbalance in the labor market that leads to a whole range of abuses and then non-enforcement of basic labor rights,” Meinster explains. “The changes we’re proposing in this bill get at addressing that structural issue.”
To craft the bill and get it introduced, CWC and WWJ received research and communications support from Raise the Floor Alliance, a coalition of eight Chicago worker centers. The Illinois AFL-CIO, National Economic and Social Rights Initiative, National Employment Law Project, Latino Policy Forum and Rainbow Push Coalition are among the legislation’s other supporters.
Though the Illinois government is still paralyzed by an unprecedented budget stalemate between the Republican governor and Democratic legislature, organizers are optimistic about the bill’s prospects.
“There’s potential for huge movement around this bill,” Bell says, citing the popularity of the presidential campaigns of Bernie Sanders and Donald Trump, which both touched on the theme of economic insecurity. While Trump focuses on jobs fleeing the country, Bell notes that “jobs here in this country have been downgraded.”
“We need to be talking about job quality, not only ‘more jobs.’ Both are important,” Meinster says. He believes existing temp jobs “could and should be good, permanent, full-time, direct-hire, living wage jobs with stability, respect and benefits.”
The author has worked with WWJ in the past on issues related to the temp industry.
This blog originally appeared at Inthesetimes.com on February 9, 2017. Reprinted with permission.
Jeff Schuhrke is a Working In These Times contributor based in Chicago. He has a Master’s in Labor Studies from UMass Amherst and is currently pursuing a Ph.D. in labor history at the University of Illinois at Chicago. He was a summer 2013 editorial intern at In These Times. Follow him on Twitter: @JeffSchuhrke.
Friday, January 27th, 2017
There are millions of working people who want and need a union but who are being prevented from forming one by their employer. And instead of penalizing bad actors, our outdated labor laws have made union avoidance nothing more than the cost of doing business. This must change.
“The truth is, collective action in America is stronger than ever,” said AFL-CIO President Richard Trumka. “We’ve seen the source of our power in defeating the TPP, even when most people told us we couldn’t. We’ve seen it in successfully raising wages at the state and local levels against great political odds.”
We see this desire for collective action every day from coast to coast, in industries far and wide. Below, we have detailed just a sampling of amazing organizing wins and what happens when people come together to make changes on the job:
Working people at Verizon who went on strike last year made huge gains, including getting a raise and adding 1,300 new call center jobs on the East Coast.
In August, members of the Association of Flight Attendants-CWA at United Airlines voted to ratify a new contract, which provides immediate economic gains, sets a new industry standard and ensures flight attendants can achieve the benefits of a fully integrated airline. The five-year agreement includes double-digit pay increases, enhances job security provisions, maintains and improves health care, protects retirement and increases flexibility.
Also in the month of August, working people at eight Zara locations in New York chose to join the Retail, Wholesale and Department Store Union/UFCW. Zara is owned by Inditex, the world’s largest fashion retailer, and the company did not oppose the union drive. More than 1,000 employees now will be represented by RWDSU/UFCW Local 1102. RWDSU/UFCW represents workers at such retail stores as Macy’s, Saks Fifth Avenue and Bloomingdale’s, and supermarkets, drugstores and car washes.
Hotel workers in Las Vegas took on then-presidential candidate Donald Trump and won a fair contract with their union Culinary Workers Union Local 226 after a high-profile fight in 2016. Watch the video to hear Celia Vargas’ story about what it was like to work at the Trump hotel without a contract.
Also in Las Vegas, working people at the Boulder Station Hotel & Casino voted “union yes!” “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.”
In Cleveland, teachers won a historic union charter school organizing victory when educators and support staff at the University of Cleveland Preparatory School joined the Ohio Federation of Teachers and the AFT to address high turnover and improve education for their students.
Working people who are members of AFSCME saw a net gain of 12,000 new members added to their ranks. AFSCME President Lee Saunders said in a statement:
“AFSCME has made a commitment to getting back to organizing basics, building power at the grassroots level and hearing the unique concerns of every public service worker in one-on-one conversations…. So even in the face of an anti-labor onslaught, despite efforts to manipulate laws against working people, it’s clear that organizing works.”
In Baltimore, more than 1,400 working people at BG&E gained a union voice with IBEW. And in Memphis, Tennessee, a “right to work” state, hundreds of working people at Electrolux voted to join IBEW.
By a nearly 3-to-1 margin, Columbia graduate student employees voted yes for their union—the UAW—in an NLRB election. Many of the 3,500 student workers who will be represented say they chose the union to bargain on their behalf for better health care, benefits for dependents, payment procedures, housing opportunities and grievance procedures. Students who work as teaching and research assistants won the right to join a union after an August ruling by the National Labor Relations Board. Columbia University is challenging the election results, and critics have called the appeal baseless.
In California, after four years of instability and threats of hospital closures or major cuts in patient services, registered nurses voted to approve a new contract covering nearly 1,500 RNs at four former Daughters of Charity hospitals in Los Angeles and the Bay area.
And in the growing digital media field, more than 90% of 70 digital journalists at Fusion Media Group voted to join the Writers Guild of America, East. WGAE also represents several hundred digital journalists at Salon Media, The Huffington Post and ThinkProgress.
Trumka said in a statement today:
“Even though collective action remains strong, we recognize that the labor movement has challenges. The biggest challenges have been put in place by corporations and their hired politicians who have been at the throats of workers for years. The ugly truth is, because of these attacks, we live in a country where working people are constantly denied our right – our constitutional right – to join a union in the first place. With the way the deck is currently stacked, it’s a miracle that brave workers continue to find new ways to organize and that today’s numbers aren’t even worse. But we also recognize our own challenges. We must be a better movement for a changing workforce. We must adapt our structures to fit the needs of today’s workers. We must not be afraid to challenge ourselves to better serve working families. And we know we will succeed because we are committed to doing just that, inspired by the spirit we see in working people every day from coast to coast, in industries far and wide.”
This blog originally appeared at aflcio.org on January 26, 2017. Reprinted with permission.
Jackie Tortora is the blog editor and social media manager at AFL-CIO.
Thursday, January 12th, 2017
Today, as Congress debates the future of the Affordable Care Act, the AFL-CIO sent a letter to Senate Majority Leader Mitch McConnell (R-Ky.), Speaker of the House Paul Ryan (R-Wis.) and all members of the U.S. Senate and House of Representatives.
Signed by AFL-CIO President Richard Trumka, the letter urges Republican leaders to abandon plans to roll back coverage protections and declares it “reckless to repeal the ACA without providing an immediate replacement.” The letter also details how the core components of the Republican health care plan pose serious threats to working people in America.
Some key passages in the letter:
You are now poised to repeal the Affordable Care Act (ACA) with breathtaking speed at the beginning of the new Congress, without providing replacement coverage to the 30 million Americans who will become uninsured as a result. This action appears to mark just the first stage of a massive Republican plan to cut federal support for health coverage….
It is reckless to repeal the ACA without providing an immediate replacement. This approach will cause the individual insurance market to collapse, destroying coverage for millions of Americans, even if Congress provides itself with a “transition period” to try to enact an alternative to the ACA….
Workplace insurance is the leading source of health coverage for Americans, covering 178 million people. The major Republican plans levy destructive new taxes on this coverage; and their sponsors endorse the belief of most economists that these new taxes will drive employers to cut back on the health benefits they provide by increasing the out-of-pocket expenses working people and retirees are required to pay….
Medicare beneficiaries will be forced to pay a greater and greater share of the cost of coverage as excessive health care cost growth outpaces the new Republican limits on federal support for Americans’ earned health benefits. As with the other major rollbacks, the federal government would retreat, leaving beneficiaries to fend for themselves in the hopes that “market forces” will temper the growth of costs….
The major Republican plans also make substantial cuts to Medicaid, even though it currently pays for most nursing home and community-based long-term care for America’s seniors and, in conjunction with the Children’s Health Insurance Program, ensures that more than a third of America’s children can get the medical care they need….
Read the full letter.
This blog originally appeared in aflcio.org on January 9, 2017. Reprinted with permission.
Kenneth Quinnell: I am a long-time blogger, campaign staffer and political activist. Before joining the AFL-CIO in 2012, I worked as labor reporter for the blog Crooks and Liars. Previous experience includes Communications Director for the Darcy Burner for Congress Campaign and New Media Director for the Kendrick Meek for Senate Campaign, founding and serving as the primary author for the influential state blog Florida Progressive Coalition and more than 10 years as a college instructor teaching political science and American History. My writings have also appeared on Daily Kos, Alternet, the Guardian Online, Media Matters for America, Think Progress, Campaign for America’s Future and elsewhere. I am the proud father of three future progressive activists, an accomplished rapper and karaoke enthusiast.
Friday, December 30th, 2016
Today we released a blueprint for how to rewrite NAFTA to benefit working families. This past election there was much-needed discussion on the impact of corporate trade deals on our manufacturing sector and on working-class communities. The outline below puts forward real solutions that should garner bipartisan support if lawmakers are truly serious about realigning our trade policies to help workers.
We need a different direction on trade. This movement has been largely driven by working people. As we approach the inauguration of a new president, it is important that everyday working people’s perspectives lead the debate, starting with how to rewrite NAFTA.
The AFL-CIO has long supported rewriting the rules of NAFTA to provide more equitable outcomes for working families. To date, the biggest beneficiaries of NAFTA have been multinational corporations, which have gained by destroying middle-class jobs in the U.S. and Canada and replacing them with exploitative, sweatshop jobs in Mexico. It doesn’t have to be this way. With different rules, NAFTA could become a tool to raise wages and working conditions in all three North American countries, rather than to lower them.
Key Areas for Improvement
1. Eliminate the private justice system for foreign investors.
NAFTA established a private justice system for foreign investors, thereby prioritizing corporate rights over citizens’ rights, giving corporations even more influence over our economy than they already have. This private justice system, known as investor-state dispute settlement, or ISDS, allows foreign investors to challenge local, state and federal laws before private panels of corporate lawyers. Although these lawyers are not accountable to the public, they are empowered to decide cases and award vast sums of taxpayer money to foreign businesses. Under NAFTA, these panels have awarded millions of dollars to corporations when local and state governments exercise their jurisdictional power to deny things such as municipal building permits for toxic waste processing facilities. ISDS gives foreign investors enormous leverage to sway public policies in their favor. Scrapping the entire system would help level the playing field for small domestic producers and their employees.
2. Strengthen the labor and environment obligations (the North American Agreement on Labor Cooperation and the North American Agreement on Environmental Cooperation), include them in the agreement, and ensure they are enforced.
The NAFTA labor and environment side agreements were not designed to effectively raise standards for workers or to ensure clean air and water. Instead, they were hastily patched together to quiet NAFTA’s critics. These agreements should be scrapped and replaced with provisions that effectively and robustly protect international labor and environmental standards. Violators should be subject to trade sanctions when necessary—so that we stop the race to the bottom that has resulted from NAFTA. Without stronger provisions, environmental abuses and worker exploitation will continue unchecked.
3. Address currency manipulation by creating binding rules subject to enforcement and possible sanctions.
Within months after NAFTA’s approval by Congress, Mexico devalued the peso, wiping out overnight potential gains from NAFTA’s tariff reductions. This devaluation made imports from Mexico far cheaper than they otherwise would have been and priced many U.S. exports out of reach for average Mexican consumers. Countries should not use currency policies to gain trade advantages—something China, Japan and others have done for many years. All U.S. trade agreements, including NAFTA, should be upgraded to create binding rules, subject to trade sanctions, to prevent such game playing.
4. Upgrade NAFTA’s rules of origin, particularly on autos and auto parts, to reinforce auto sector jobs in North America.
NAFTA’s rules require that automobiles be 62.5% “made in North America” to qualify for duty-free treatment under NAFTA. Even though 62.5% seems high compared with the Trans-Pacific Partnership’s inadequate 45%, it still allows for nearly 40% of a car to be made in China, Thailand or elsewhere. The auto rule of origin should be upgraded to eliminate loopholes (through products “deemed originating” in North America) and to provide additional incentives to produce in North America. This, combined with improved labor standards, will contribute to a more robust labor market and help North American workers gain from trade.
5. Delete the procurement chapter that undermines “Buy American” laws (Chapter 10).
NAFTA contains provisions that require the U.S. government to treat Canadian and Mexican goods and services as “American” for many purchasing decisions, including purchases by the departments of Commerce, Defense, Education, Veterans Affairs and Transportation. This means that efforts to create jobs for America’s working families by investing in infrastructure or other projects, including after the financial crisis of 2008, could be ineffective. This entire chapter should be deleted.
6. Upgrade the trade enforcement chapter (Chapter 19).
NAFTA allows for a final review of a domestic anti-dumping or countervailing duty case by a binational panel instead of by a competent domestic court. This rule, omitted from subsequent trade deals, has hampered trade enforcement, hurting U.S. firms and their employees. It should be improved or omitted.
This blog originally appeared at aflcio.org on December 20, 2016. Reprinted with permission.
Jackie Tortora is the blog editor and social media manager at AFL-CIO.
Thursday, November 10th, 2016
In July 2015, the University of California’s student-workers union, United Auto Workers (UAW) 2865, passed a resolution calling on the AFL-CIO to terminate the membership of the International Union of Police Associations (IUPA).
Now, after a series of meetings in Los Angeles throughout October, the same resolution is making its way through Service Employees International Union (SEIU) 721, a local representing public service and nonprofit employees in Southern California. Although SEIU is not part of the AFL-CIO, organizers for the resolution hope it will spark a wider discussion about the role police and their unions play.
The resolution was first approved by the African-American caucus of SEIU 721 on October 6, and later by the local’s Latino caucus on October 19. The endorsements came after collaboration and presentations by Olufemi Taiwo, a UAW 2865 member, and Julia Wallace, a member of SEIU 721.
“When I heard about the UAW’s resolution,” Wallace tells In These Times, “I thought this is great. This is a way for us, as union members to show our support for working-class people, but also to be clear that the police have played a role historically … not just [as] oppressors of Black people, Latino people, LGBT people, disabled people, but also against workers, against working-class people as strike-breakers.”
Wallace says her goal is to get the resolution approved by the executive board of SEIU 721.
“I think the best thing is a politicized, organized and educated workforce,” says Wallace. “That’s the best thing that we could have, because even if it doesn’t get passed through the executive board, then there’s a discussion within our union meetings. ‘Okay, so, what is the role of the police? What are we going to do to organize against them? How are we going to protest?’”
The deaths of Michael Brown, Eric Garner and Freddie Gray at the hands of police, and the subsequent rise of the movement for Black lives, helped push the Black Interests Coordinating Committee (BICC), a UAW 2865 caucus, to write the original resolution.
The AFL-CIO did not officially comment on the resolution, but Carmen Berkley, the federation’s director of civil, human and women’s rights, told Buzzfeed’s Cora Lewis in January:
“We are not in the business of kicking people out of unions … What we are in the business of is having conversations with our law enforcement brothers and sisters about how they can have different practices … I do think there’s a lot of reconciliation that needs to happen between communities of color and law enforcement, and we want to be the bridge that helps them get there.”
When asked about Berkley’s remarks, Taiwo tells In These Times, “She’s posing the issue as if what it is—is there’s individual victims of police violence and individual perpetrators of police that need to sit down and have a mediation.”
“If what they’re for is protecting the ruling class, then it’s not an issue of mediation. It’s not an issue of reconciling individual differences or healing individual acts of violence,” Taiwo says. “It’s an issue of reconciling our union structures with what we’re trying to fight for as unions.”
Wallace says that as long as police side with “bosses” on the picket line and police unions “unequivocally [defend] the police murdering people” then they should not be members of labor organizations.
“They can defend themselves just fine. Their pensions aren’t challenged, their healthcare benefits aren’t cut, their raises continue to happen and ours are always on the chopping block,” Wallace says. “Ours are always in question and there’s a reason for that. It’s because they defend the wealthy.”
The IUPA responded to UAW 2865 shortly after the resolution passed, with IUPA legislative director Dennis Slocumb telling Workers Independent News: “It’s impossible to stand for the rights of working-class people while opposing the people in law enforcement. We are working class. And we think this is nothing but a publicity stunt for a group that’s struggling for some sort of attention.”
Slocumb noted that the resolution did not explicitly call out any other labor groups that represent and bargain for police.
“They don’t call on their own union to disgorge police officers. They haven’t called on AFSCME, or CWA or any of the other organizations that represent police officers within the AFL-CIO. The Teamsters and SEIU, who are outside of the AFL-CIO but certainly labor organizations, also represent police officers,” he said.
Moving forward, Wallace says she hopes to get other unions to endorse the resolution, while also organizing a project to build a general strike against police violence.
“People are talking about this and it’s just the beginning,” she says.
This blog originally appeared at inthesetimes.com on November 3, 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.
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
Tuesday, August 23rd, 2016
The Federal Reserve Open Market Committee (FOMC) that determines U.S. monetary policy met in July. Its job is to weigh the state of the American economy, both the labor market and inflationary pressures to set policy. In an interesting note, its discussion of the labor market explicitly noted the condition of the African American and Hispanic unemployment rates. More than just an aside, reflecting on the status of June’s labor market the minutes of the meeting show the following note:
“The unemployment rates for African Americans and for Hispanics stayed above the rate for whites, although the differentials in jobless rates across the different groups were similar to those before the most recent recession.”
While it is good the FOMC notes the damage its policies may be doing to the African American community, it unfortunately appears too simplistic in understanding the dynamics of the market and how the growth in labor demand affects the African American community. It is simplistic because it appears to say that nothing has changed; that while the African American unemployment rate of 8.6% was on par with its pre-recession level of 8.4% in March 2007, when the white unemployment rate was 3.8%, little different than June’s 4.3%. This suggests, the relative position of African Americans is fixed, immutable by macro-economic dynamics, so this lamentable gap corresponds to the best level of African American unemployment that can be reached. In short, we must be near full employment.
Here is what the June report showed in detail. The unemployment rate for adult African Americans (older than 25) with Associates Degrees was 3.0%, well below the unemployment rate for white high school graduates 4.2% rate. This was a first since the recession began, for better educated African Americans to have unemployment rates lower than less educated whites. In July 2015, African Americans with Associate Degrees had a 4.8% unemployment rate compared to white high school graduates lower 4.4% rate.
Further unnoticed, is that at the depths of the labor market downturn, the employment-to-population ratio for African Americans (the share of people with jobs) fell to 51.0% in July 2011, but had grown by June to 56.1%, a five percentage point gain, but a 10% increase. For whites, on the other hand, the EPOP had grown only from 59.3% to 60.2%, less than one percentage point.
So, the change in unemployment rates is deceptive. The African American unemployment rate is improving on a strong growth in employment and in the relative improvement resulting from less discrimination in hiring. That success has further encouraged the rise in labor force participation for African Americans; which has the perverse effect of fighting against a lower unemployment rate, because it increases the number looking unsuccessfully.
The problem for African Americans is that they face much higher probabilities of enduring long spells of unemployment. African Americans, of the same educational attainment and with the same cognitive skill levels (the so-called test score gap often mistakenly attributed as a measure of inferior schooling) as whites, face a fifty percent greater chance of being thrown into a long spell of unemployment. And, once having fallen into that labor market quicksand, face about a third less chance of escaping. The result is that massive levels of unemployment, like the Great Recession spawned, result in a very long queue of unemployed African Americans. That long line can only clear by a similarly long and sustained recovery to pluck the unemployed back among the employed.
Put it simply, the unemployment rate is a snapshot composed of the probability of becoming unemployed plus the inability to escape unemployment; so it is a much more complex picture when large numbers of people are unemployed for long periods, as they are more likely to be captured by the snapshot. When unemployment spells are very short, people move out of the frame before the snapshot can be taken.
The unemployment gap is not one of skill, it is the very real and present discrimination prevalent in a labor market where demand for workers is low and the power and caprice of employers is high. The relative size of the gap can change, if policies push beyond conventional measures of unemployment and underutilization of workers; it is possible to see another answer is possible.
So, it is good that the FOMC at least is aware that macro-economic policies can have a good or bad effect on African Americans. The next step is for the FOMC to further understand how much a difference it can make.
This is not just important for African Americans. It is important for the health of the national economy. First, everyone benefits if we push the labor market to its true and full level of maximum employment; it means more jobs and opportunities for everyone.
Second, because the African American community has such little wealth, when the economy expands, it is a community very sensitive to the interest rate movements and credit availability to catch-up on purchases like cars and making home improvements. These purchases are fueled by rising employment opportunities and the easing of credit when the FOMC acts to lower interest rates and stimulate economic growth. But, in such a leveraged position, it means that a slowing economy and the loss of jobs quickly turns auto loans and home borrowing into severe household balance sheet nightmares. Those bad effects spill over to the broader the economy.
Since African American employment is more sensitive to a slowing economy, it means the FOMC has to get it right about understanding when African Americans have reached full employment. So far, they have consistently guessed at a number that is too high, ending labor market recoveries too soon—and economic expansions too soon for everyone.
This blog originally appeared in aflcio.org on August 22, 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.
Wednesday, December 16th, 2015
Today, the AFL-CIO released its “Statement of Principles on the On-Demand Economy” laying out ways to protect working people in an ever-changing work environment.
AFL-CIO Director of Policy Damon Silvers said:
“The AFL-CIO is committed to making sure that the on-demand economy leads to better lives for working people. New technologies must not be an excuse for old-style injustice. Workers in the on-demand economy, no matter what their titles, must have decent wages and benefits, safety and, most of all, a collective voice on the job.”
Here are the principles:
1. Use technology to empower, not weaken, workers.
2. Promote economic and social inclusion.
3. Establish rules to achieve binding corporate accountability, regardless of where or how people work.
4. Make portable benefits available to all workers.
5. Safeguard the employment relationship to ensure workers’ job protections.
6. Increase opportunities to access good jobs.
7. Ensure a level playing field for business.
Read more about each of the principles.
The AFL-CIO is committed to working with business, government and communities to find solutions that work for employers and working people in the on-demand economy. Today, AFL-CIO General Counsel Craig Becker is participating in a forum with The Hamilton Project. AFL-CIO Secretary-Treasurer Liz Shuler will speak on a panel at the U.S. Department of Labor’s “Future of Work” symposium on Thursday.
This blog originally appeared at AFL-CIO.org on December 9, 2015. Reprinted with permission.
About the Author: Kenneth Quinnell is a long-time blogger, campaign staffer and political activist. Before joining the AFL-CIO in 2012, he worked as labor reporter for the blog Crooks and Liars. Previous experience includes Communications Director for the Darcy Burner for Congress Campaign and New Media Director for the Kendrick Meek for Senate Campaign, founding and serving as the primary author for the influential state blog Florida Progressive Coalition and more than 10 years as a college instructor teaching political science and American History. His writings have also appeared on Daily Kos, Alternet, the Guardian Online, Media Matters for America, Think Progress, Campaign for America’s Future and elsewhere.
Thursday, August 27th, 2015
The recently released minutes of the last meeting of the Federal Reserve Board’s Open Market Committee revealed there was serious discussion of the fact the labor market still showed signs of weakness. A primary issue was the lack of evidence of strong wage growth, which would be a clear signal the labor market was tightening. This has unleashed the Wall Street bettors, who want a jump on the Fed’s changing monetary policy, giving them more active play on the bond market, where interest rate movements can fuel their gambling addiction. The voices being raised to have the Fed raise interest rates march out lots of theory to predict uncontrolled inflation, despite a global slowdown, falling oil and natural resource prices, and flat real wages. We must hope that the Fed makes policy based on what is good for the economy, not what is good for the reckless gamblers on Wall Street.
The current directive to the Fed comes from the Humphrey-Hawkins Act, which in 1978 established that the nation’s primary economic policy is to achieve full employment, within reason—not by creating unsustainable budget deficits or igniting uncontrollable inflation. Unfortunately, many have twisted the legislation’s purpose to their own ends, changing the act’s intent to balance budgets and maintain low inflation in hopes those policies don’t increase unemployment. The act does not place full employment on equal footing with fighting inflation; it merely constrains full-employment policy to a measure of prudence.
With that in mind, the Fed should understand it is not at full employment. In addition to wages rising with productivity, a main tenant of evidence of full employment, the Fed needs to embrace some additional senses of full employment. One is that discrimination would disappear, since it would become prohibitively costly in a full-employment economy.
A problem for the Fed is that there is little diversity in its staffing, which reflects the low level of diversity among economists. Economists have convinced themselves there is little to explain about the persistence of the disparity in black and white unemployment rates, the ratio of which remains stubbornly at 2-to-1. It is enough to assume there are lower skill levels among African Americans and societal structural issues that permanently disadvantage African Americans, and that these circumstances will persist no matter what the level of unemployment.
Of course, many economists do appreciate that this pat answer is hard to reconcile with the great sensitivity that the black unemployment rate has to the economy—a tightening labor market brings down the black unemployment rate at twice the rate for whites. That makes the structural argument difficult to maintain.
There is another key element. The unemployment rate gaps between blacks and whites are stubborn at every education level, and the gaps are glaring. In fact, what the unemployment rate gaps for blacks suggest is the old adage that blacks must be twice as good to compete in the labor market with whites. The unemployment rate for blacks with more education is similar to that of whites with less education. This is true for blacks at all education levels, from college graduates to associate degree holders to high school graduates. And it is very difficult to argue that those huge gaps do not reflect discrimination.
When the labor market tanks, and the number of unemployed workers per job opening goes up, the gaps faced by better educated blacks to less educated whites get wider. Black college graduates find themselves with unemployment rates closer to white high school graduates, and blacks with associate degrees find themselves with unemployment rates worse than white high school dropouts.
When the labor market tightens, unemployment rates for blacks with more education improve such that they are better than those of less educated whites, though still off the mark compared with equally educated whites. When employers are faced with two unemployed working people for each job opening, many stop seeing color and start seeing qualifications. Employers faced with a growing economy and smaller applicant pools find it would now cost to discriminate by passing over the qualified African American applicant. We don’t know what would happen if the nation maintained its commitment to full employment, because just as the black unemployment rates near parity with whites, our economic policy switches all reverse to slow the economy, increase unemployment and push blacks off the path to equality.
The Fed needs to see that its policies are part of that problem. Slowing the economy before we reach full employment means employers never have to raise wages nor understand the costs of their discriminatory practices.
This blog originally appeared in AFL-CIO on August 21 ,2015. Reprinted with permission.
About the Author: William E. Spriggs is the Chief Economist for AFL-CIO. His is also a Professor at Howard University. Follow Spriggs on Twitter: @WSpriggs.
Friday, June 26th, 2015
Last week, the U.S. Bureau of Labor Statistics issued its numbers for inflation and for real wage movements. The numbers reflected the weak numbers of the first quarter for economic growth: Zero inflation and zero real wage growth in the past three months. The economy is showing signs that it is fragile. It can be spoofed by international developments that raise the value of the dollar and slow U.S. export growth, or by bad weather—events, the Federal Reserve cannot control or easily predict.
So what is the Federal Reserve doing? At its June Open Market Committee Meeting, where Federal Reserve policy is set, the Fed stayed put on interest rates. Yet, it gave indications that it was considering giving in to the stampede for the Fed to act sometime this year to raise interest rates in a deliberate move to slow the economy. A policy to slow the economy is based on beliefs, not on the hard data before us on wages or inflation. This is regrettable.
The deeper reality is that the Fed took unprecedented moves to build up huge reserves of U.S. Treasuries. What is really going on is more that the speculators on Wall Street are nervous. They are afraid that somehow, from some unknown source, inflationary pressures will rapidly appear and the Fed will quickly unwind its position with, for some of them, disastrous consequences on bets they have placed on bond prices. They would prefer the certainty of having the Fed start to unwind its position now, slowly divesting itself of its bond reserves and easing the economy to higher interest rates. This has nothing to do with the economy, and everything to do with Wall Street speculation. Unfortunately, the press plays sycophant to these speculators, who are constantly quoted as giving “economic” advice when they state with certainty the need for the Fed to raise interest rates.
Sources of global instability abound. The discussions over the Greek debt, the Eurozone bankers and the International Monetary Fund are far from a workable solution. In the meantime, the Swiss Franc is rising uncontrollably in response to that uncertainty. Iraq, Syria, Yemen and the ongoing conflict with ISL make the Mideast equally unpredictable. And, if snows were the issue in the first quarter, the California drought, the Texas floods and Midwest tornadoes so far this quarter should not make anyone confident that the current hurricane season is going to be a sleeper. Further incidents in Charleston and now Charlotte with violent attacks on African American churches and the constant stream of discontent with the ongoing and unresolved issue of police misconduct make the domestic situation equally volatile. With so many uncontrollable and unpredictable risk factors that could slow the economy, the fears of Wall Street speculators should and must take a back seat.
These risks are not all unrelated. A more robust U.S. economy will help the world economy and help reduce some risks associated with weak economic performance; especially in the Eurozone. And a more robust U.S. economy will hopefully speed job growth to reduce the economic tensions that overlay the raw social tensions domestically.
The Fed must expand its view of measures of full-employment. The Wall Street gamblers base their assumptions on full employment from a time gone by. For instance, economists today still persist in viewing the high African American unemployment rate as a “structural” issue, since African American workers are assumed to be so low-skilled they cannot find jobs in a modern economy. So, they ignore the warning signs that job growth is frail when the African American unemployment stalls, as it has, at around 10%.
In May, the unemployment rate for adult African American workers (those older than 25) with associate degrees was 5.6%, which was higher or about the same as the unemployment rate for white, Asian and Hispanic high school graduates. Those numbers are inconsistent with full employment. They indicate a market where employers are very free to pick and choose which workers they want. A faster growing economy will force employers to be less choosy.
The slow economy cascaded higher educated workers down into jobs that require less education. If the economy does not speed up, that misallocation of productive capacity could become permanent, as employers may continue to seek only college graduates to serve coffee. This costs us in loss productivity growth. It is another sign of a labor market that is not at full employment.
Locking in high African American unemployment and college degree requirements for entry-level jobs is not in the economy’s interest. And covering Wall Street bets isn’t either.
This blog was originally posted on AFL-CIO blog on June 26, 2015. Reprinted with permission.
About the Author: The author’s name is William E. Spriggs. William E. Spriggs is the Chief Economist for AFL-CIO. His is also a Professor at Howard University. Follow Spriggs on Twitter: @WSpriggs.