Outten & Golden: Empowering Employees in the Workplace

Posts Tagged ‘David Moberg’

With New Overtime Rule, President Obama May Have Given an Estimated 5 Million Workers a Raise

Wednesday, July 1st, 2015

David MobergPresident Obama’s administration took another promised step on Tuesday towards raising the living standards of American workers, and Republicans and business groups are not likely to be able to stop it.

Using the administration’s power to update workplace rules regarding premium pay for overtime work, the Department of Labor on Tuesday began taking steps that could bring higher pay or more leisure time to an estimated 5 million middle-income workers by next year.

Business and conservative groups are likely to try to block the new overtime rules with court challenges and legislation, just as Republicans are still blocking President Obama’s modest proposed legislative increase in the minimum wage to $10.10 for low-income workers. But the political and legal winds favor the administration.

There’s a strong legal and factual case for the Department of Labor’s action. The current regulations are grossly out-of-date and out of sync with the intention of the original legislation.  According to administration calculations, the new rules should give at least 5 million middle-income workers a boost in pay if they work more than 40 hours a week or fewer unpaid hours at work and more time for themselves and their families if they are not forced into overtime work.

Now all hourly workers are guaranteed time-and-a-half pay for working more than 40 hours, but the rules do not require employers to pay time-and-half to salaried workers who make over $23,660 a year—even though that is below the poverty line for a family of four. Salaried workers below the threshold are regarded as being social equivalents to hourly workers. In 1975, 62 percent of salaried workers earned beneath the threshold and were guaranteed overtime pay by law, according to Ross Eisenbray of the Economic Policy Institute, but today the threshold only protects 8 percent of salaried workers. The new rules with a threshold of nearly $51,000 a year would provide overtime protection to about 44 percent of salaried workers.

If a salaried worker earns above the threshold and is a bona fide executive, administrative or professional employee, the employer does not have to pay him or her overtime.  But this “white-collar exemption” is now widely abused, and employers give nominal managerial titles and a few administrative tasks to people in order to avoid paying time-and-a-half for more than 40 hours of work.  Christine Owens of the National Employment Law Project, a pro-worker research and advocacy group, also wants the new rules to more adequately define the kind of work that qualifies for the white collar exemption. At this point, the Labor Department has not proposed such revisions in defining who is a manager or professional.

“While we appreciate that doubling the salary threshold will extend overtime pay protections to millions of currently exempt workers,” she wrote in an organizational statement on the rules, “we are concerned that failure to address the existing tests’ vague definitions, laissez-faire approach to the mix of ‘salaried’ and ‘hourly’ duties required for exempt status and other shortcoming threaten to deny far too many workers the overtime pay protections they deserve and the statute contemplates.”  NELP, for example, wants the rules to state that exempt workers cannot spend more than half of their time on non-exempt work.

With unions at their weakest since the 1920s, more public policy action to raise wages is necessary, not only for minimum-wage workers but also for middle-income workers, such as those protected by overtime rules. Also, inequality continues to grow. University of California at Berkeley economist Emmanuel Saez recently calculated  that despite recent growth in income of workers in the bottom 99 percent (an increase of 3.3 percent from 2013 to 2014), top 1 percent incomes grow faster and families in that sliver of the population captured 58 of real income growth per family from 2009 to 2014.

Overtime protection alone won’t reverse that trend, but it will make a real difference in the incomes and quality of life for millions of working families.

This blog was originally posted on In These Times on July 1, 2015. Reprinted with permission.

About the Author: The author’s name is David Moberg. David Moberg, a senior editor of In These Times, has been on the staff of the magazine since it began publishing in 1976. Before joining In These Times, he completed his work for a Ph.D. in anthropology at the University of Chicago and worked for Newsweek. He has received fellowships from the John D. and Catherine T. MacArthur Foundation and the Nation Institute for research on the new global economy. He can be reached at [email protected]

The List of the Fight for $15’s Victories—Tangible and Intangible—Is Getting Longer

Tuesday, June 16th, 2015

 

David MobergFast food workers and their allies in New York City, supported by protestors elsewhere around the country, flooded public hearings in New York today with the message that they deserve at least $15 an hour. They testified before a wage board appointed at the behest of New York Gov. Andrew Cuomo to determine standards for fast food workers in the state.

The board’s work is taking place as a widening movement to raise minimum wages for the growing share of Americans in ill-paid jobs is both raising expectations and winning concrete victories. But the Fight for $15 campaign has also spurred action by many groups of low-wage workers, from home care aides to university adjunct teachers. And it is generating a complex new current within the broader labor movement that goes far beyond even their ambitious wage goals.

The Los Angeles city council’s vote last month to raise the minimum wage in the nation’s second largest city to $15 an hour by 2010 was the latest—but almost certainly not the last—in a series of major local victories by low-wage workers and their advocates that started last year in SeaTac, Washington. The movement then won victories in Seattle, San Francisco and other local jurisdictions. Popular movements in other cities, such as St. Louis and Kansas City, are close to pressuring local legislators to set a minimum wage of $15 an hour.

Some employers, most recently Chipotle, are apparently reading the writing on the wall and improving pay, benefits and work rules (though generally offering much less than workers want).

In Los Angeles, more than 40 percent of its workforce, which has a high proportion of service workers, earn near California’s current state minimum wage of $9 an hour (or less for some tipped employees and for victims of employers’ wage theft, estimated in Los Angeles as afflicting nearly one-fifth of the low-wage workforce).

They also rely heavily on public assistance programs to survive. Such aid effectively amounts to taxpayer subsidies of nearly $7 billion a year across the country to companies like McDonald’s to support the substandard wages of non-managerial fast food workers in the U.S., according to the University of California at Berkeley Center for Labor Research and Education.

The contemporary movement to “raise the wage” has roots that are often run deep and wide—for example, in Los Angeles, traditional unions, worker centers and other non-union worker organizations, non-profit research and advocacy groups, faith organizations, immigrant and civil rights groups and dozens of other allies are participating in the movement. Last year, Los Angeles Mayor Eric Garcetti advocated raising the minimum to $13.25, but he missed the wave of public opinion that swept away his by then passé proposal. In a poll of Los Angeles residents, 69 percent favored a strong package of workplace improvements, including a minimum of $15.25 an hour.

In Los Angeles, more than 100 groups formed the Raise the Wage coalition. Many of them had been involved in living wage battles or other campaigns to raise wages for specific groups of workers, such as hotel employees or people working at the publicly-subsidized LAX airport, or to raise awareness of how many employers cheated their employees.  As a result of their work, the new law covers every worker and establishes an enforcement agency for the first time.

The coalition drew on studies of the economics of raising the minimum from the Berkeley Center, the Economic Policy Institute and the non-governmental think tank the Economic Roundtable (collaborating with two UCLA research institutes) that promised little or no loss of jobs, an economic shot in the arm (especially in poor areas) and a boost in economic well-being for more than 40 percent of Angelenos.

The minimum wage campaign even drew support from a few small business people. Kevin Litwin, chief operating officer of Joe’s Auto Parks (with 20,000 parking spaces in downtown Los Angeles), was told by his CEO not to fight the wage increase but instead investigate what happened to the company’s branch in Seattle after the local minimum wage rose to $15 an hour. Litwin discovered that revenue increased, workers were more productive, turnover declined, and, he said, “the whole thing seemed to work for us in Seattle. Why not LA? We think this is just good to do, and it was also good for our industry.”

The final legislation rejected requests for exemptions from some businesses, such as the restaurant industry’s standard plea for sub-minimum wages for tipped employees, as well as a labor movement proposal that workers under collective bargaining agreements not be covered.  Business critics pounced on what they claimed was labor hypocrisy and an effort to entice employers to accept unions in order to benefit from the exemption.

But Kent Wong, director of the UCLA Labor Center, said, “The concern of labor is for unionized employees’ varying benefits—sick pay, pensions—with an overall package significantly higher than the minimum wage. It was an attempt to respect existing collective bargaining agreements.” The proposed revision may be taken up later, but many council members seemed unsympathetic to the union argument, even though such exemptions are common in local minimum wage laws.

Even if the Fight for $15 was only one Raise the Wage member among many, the broader movement owes much to the fast food fighters. Starting with a one-day strike action two and one-half year ago by several hundred fast food workers in New York City, the organization has spread throughout the country and to other occupations, though the fast food industry is its priority.

Fight for $15 has contributed to the low-wage worker movement its goals—which at first, seemed to be a far stretch—of at least $15 an hour and the right to join a union without harassment. Its grassroots dynamism and direct action tactics have inspired a variety of ill-paid workers but posed a formidable  threat to its foes, most immediately McDonald’s Corporation, the world’s third largest private employer.

“Once you cut the head off the snake, it all falls in place,” says New York City McDonald’s worker and volunteer organizer Jorel Ware. “McDonald’s is the snake.”

Last weekend more than 1,300 Fight for $15 representatives gathered in Detroit for their second annual convention, and judging from their major resolution—and from the keynote speech by Mary Kay Henry, president of the Service Employees International Union, their financial and organizational backer—the organization is counting on the New York wage board determination to be good enough to become the standard for the industry.

“We believe New Yorkers are leading the way to a new standard for fast-food workers and our families across the country,” the resolution reads (and Henry said that “New York is on the verge of setting a new standard that will change how we think about wages in this country”).

Despite the overwhelming emphasis on higher pay, the Fight for $15 has always been a fight for a union as well. Yet increasingly leaders at all levels are focusing on the need for a union as well as for a minimum wage raise. But Kendall Fells, national organizing director of Fight for $15, acknowledges that the union cannot organize store by store, but it can keep pressure on the company as a whole until there’s an agreement about how to proceed with  recognition.

“The problem is the process of organizing is too small and Fight for $15 is too big,” he says, but there’s the possibility of organizing all of the stores at once, adding community pressure from clergy, allies and other unions to the pressure, including additional legal action on the company’s labor law abuse.

Meanwhile, even without official recognition of their status, the workers can bring some changes by a variety of challenges at work, in the courts, and before the National Labor Relations Board.  “In these workers’ minds, they already have a union because they’re sticking together and bringing change,” Fells says.

Many workers are not only fighting for the $15 an hour and a union that first drew them to the campaign. They’re fighting for a better world. They see their actions as re-directing the course of history, as building a future for their children and grandchildren, and as helping workers not only in other fast food outlets but also in many other jobs and industries. They are exercising newly discovered rights as citizens of the United States and even enjoy a sense of being linked to workers in other countries. In these ways, they have already taken steps beyond developing a simple trade union mentality towards a consciousness of class that is as much ethical and political as economic.

“Our goal is a living wage when we say $15 and a union,” says Ware, an early supporter of Fight for $15. “That’s why we say $15 and a union. It looks like we’ve got the $15 but it may be a long fight for a union.”

But he notes that next year is an election year, which may open possibilities. Indeed, Hillary Clinton called into the convention saying that she wanted to be the “champion” of the organization and its members. Her move may have been simply political positioning, but it at least indicates that some Democrats may feel momentarily comfortable supporting a labor struggle.

Ware sees their demands as “good for the economy,” since their victories will likely encourage other companies to pay a living wage. And the campaign is good for him, helping him do something he had always wanted but did not know how to do.  “I never thought I’d be doing this,” he said. “I always wanted to help people, but I didn’t know how.”

At his second Fight for $15 convention, Antione Hearon, 22, was impressed by how much the movement had grown in a year, spreading across the country and even around the world. Although he hopes to be able to afford to return to community college, he wants to know that McDonald’s will pay a living wage if he has to rely on it.  But he’s in it for more than himself.

“My family [of 14 children] has been without lights, gas, water. At times we didn’t eat,” he said. “I need the money for myself and my family. I’m doing this not just for myself but for the whole country. I didn’t know anything about unions [before joining the campaign]. I didn’t think fast food workers could have a union. … It shocked me: this is a real thing. … Then there’s the unity aspect of this: there are people who I could go to personally, who have my back. I like that unity.”

At the convention, Connie Bennett, 57, an eight-year veteran at McDonald’s, found herself swapping ideas with other workers about how to recruit people—especially young workers—to the Fight for $15, as well as setting up “pen pal” ties with workers in other cities. She realizes some of them feel they need the job badly and are afraid of losing it, but she explains to them that organizing, even striking, “that’s our freedom, and that’s our right as citizens. I tell them that this is not only their fight but a fight for their children and grandchildren.”

She talks up the union at her bus stop and when she stops by the mid-morning daily coffee club of elderly customers. That paid off when workers at her Chicago McDonald’s went out on strike. The coffee club members joined in. “I can’t put into words how that support made me feel,” she said.

Fifteen dollars an hour might mean that she could take a bus to work all the time, not just half the time. More important, she might be able to visit four grandchildren she has never seen. But the experience of solidarity, of being part of a union, is a reward in itself.

“I believe very much in unions,” she said. “If this is a sign of what a union means, I believe a union will bring the $15 to us. I explain to the members that a union is a big part of what they need. A union will give them freedom of speech, and you’re the ones who make the decisions.”

Even without a formal union or a pay raise, the fighting fast food workers have become winners. They’ve won a new sense of their rights and power and a new view of how they fit in the world. And that’s worth at least as much in its own way as the pay raise they need and deserve.

This blog was originally posted on In These Times on June 15, 2015. Reprinted with permission.

About the Author: The author’s name is David Moberg. David Moberg, a senior editor of In These Times, has been on the staff of the magazine since it began publishing in 1976. Before joining In These Times, he completed his work for a Ph.D. in anthropology at the University of Chicago and worked for Newsweek. He has received fellowships from the John D. and Catherine T. MacArthur Foundation and the Nation Institute for research on the new global economy. He can be reached at [email protected]

Harvard Students, HEI Hotel Workers Score Mutual Victory

Thursday, April 12th, 2012

David MobergAs undergraduate students at Harvard, Devi Lockwood and Jia Hui Lee would typically have little reason to know Rosa de la Rosa or Heather Nichols, who work just a few miles from Harvard Yard cleaning guest rooms and staffing the front desk, respectively, at Le Meridien Hotel.

But Lockwood and Lee, overcoming the classic town-gown social divide, have successfully joined with fellow students in the school’s Studet-Labor Action Movement to win a major victory that may help Rosa and Nichols win a union to help change what they describe as appalling working conditions at the hotel.

After several years of campaigning and following student victories at Yale, Brown, Vanderbilt, Princeton and other elite schools, Harvard students persuaded university authorities to review their investment in HEI, a owner and operator of hotels. HEI raises investments primarily from prestigious university funds, then strips down costs and re-sells the hotels at what is promised to be a hefty profit. Harvard has invested around $70 million in HEI, according to researchers with UNITE HERE, the union organizing Le Meridien and other HEI workers, making it HEI’s third largest financial backer.

HEI’s drive for efficiency, profit, and a high price when it flips the hotel leads to overwork, poor pay, abusive treatment and arbitrary supervision of workers like Rosa, 57, and Nichols, 23. “One big reason I want a union is how they treat people–and the pay,” Rosa said. “There are a lot of people being overworked, sometimes given the work of three  people. Then sometimes they don’t give people enough work. They charge a lot for health and dental insurance. I have to pay for rent and food, and there’s just not much money left.”

“One thing our hotel is notorious for is its unclear descriptions of jobs,” Nichols said. “We have job descriptions, but they also say that the job includes anything else management decides. They’ve cut so many people you’re left doing six or seven jobs. It can be exhausting and frustrating.” Compared to her previous hotel job, the pay is low: $13.75 an hour vs. $16 an hour at a locally owned hotel. And compared to the previous management under Hilton, Rosa said, raises are rare and skimpy. Nichols can’t afford the insurance, she said, nor her uninsured medical expenses. “I have a serious illness,” she said. “I have to spend $400 a month on medicine, but I can’t afford it, so I’m continually tired, sick, bleeding and dizzy. It’s frustrating and debilitating.”

Adding to the misery, at first she was hired part-time, then shifted to 40 hours without any benefits of full-time work, and now her hours of work fluctuate. “They play games,” she said about her supervisors, who play “power trips” with workers and ignore them or speak rudely to them. “They just don’t care—don’t care if service is good, don’t care if employees are happy.”

Back at Harvard, students met HEI workers and learned about both their lives and the university’s involvement as part owner.

“There’s a hotel down the road, Le Meridien, and Harvard owns more than 10 percent,” Lockwood, a sophomore who just recently became involved with SLAM, said. “The working conditions are horrific. One man who worked in the kitchen, his hours were so badly scheduled he would have to leave his child around seven years old home alone. These are people’s lives, and as students we’re implicated in what the university does. It’s time for Harvard to live up to its responsibilities.”

That’s the gist of the message Lockwood delivered to Harvard President Drew Faust on March 26, when she signed up for the once-a-semester opportunity for students to talk with the school’s leader. She was so nervous she remembers few details of the meeting, except that Faust was “diplomatic,” and that as Lockwood left,  she gave the president her pin with a slash mark through HEI.

On March 31, Faust’s assistant sent her an e-mail that Harvard Management Company decided not to invest in HEI in the future, a big blow to the private equity firm’s anticipated solicitation of a new round of funds this year. Unlike authorities at Brown, however, which linked its decision not to invest further to HEI labor practices, Harvard said its decision was based on HEI’s portfolio and strategy, “not on concerns about HEI’s practices.”

The same day Lockwood met with Faust, Lee joined with a delegation of HEI workers, who presented a petition for a fair process of union recognition signed by more than 70 percent of Le Meridien workers.

A senior who had been involved with SLAM for three years and had learned how working together students could make the world better, Lee was surprised at how the hotel manager treated the employees and the “power inequalities” in the workplace. At first the manager retreated into his office, then made some phone calls, and came back out but refused to accept the petitions, all the while acting “very confrontational.”

“The workers feel empowered and inspired by the actions students are willing to take,” says Leigh Shelton, a researcher with UNITE HERE on the HEI campaign. “It helps them keep going to know they have the support and a point of pressure.”

HEI may be feeling pressure not only from the withdrawal of its major investors but also from dozens of wage and hour violations and complaints from the National Labor Relations Board. UNITE HERE is increasing the number of hotels being organized and bargaining at a Hollywood HEI property, where local economic development regulations kept management neutral. And more campaigns are developing at universities like Michigan, Notre Dame and Chicago, says UNITE HERE researcher Riddhi Mehta-Neugebauer.

“In this country, the first thing is the money,” housekeeper Rosa said of the latest campus interruption of investment flowing to HEI. “So a shift in investment could make the difference. Hopefully, by getting the money out, it will help the workers to change things.” And that’s what both the workers and students want.

This blog originally appeared in Working in These Times on April 11, 2012. Reprinted with permission.

About the Author: David Moberg, a senior editor of In These Times, has been on the staff of the magazine since it began publishing in 1976. Before joining In These Times, he completed his work for a Ph.D. in anthropology at the University of Chicago and worked for Newsweek. He has received fellowships from the John D. and Catherine T. MacArthur Foundation and the Nation Institute for research on the new global economy. He can be reached at [email protected].

Chicago Airport Workers Seek Fairness, Unionization

Wednesday, March 7th, 2012

David MobergCHICAGO—Even more than frustrated airline passengers who find the skies increasingly unfriendly, airline and airport workers—who only walk the airport terminals’ long corridors—are discovering that the air travel business is growing less and less congenial for them. In reaction, workers at Chicago’s O’Hare and Midway airports—the nation’s second and twenty-seventh busiest—are trying to defend and improve the quality of their worklives by forming unions and pushing for more supportive public policy.

Local 1 of UNITE HERE, the hotel and restaurant union, has been successfully organizing workers in the retail concessions of both airports off and on for many years and, thanks to a new surge, now represents about 1,300 of the 2,300 concession workers at both airports. But the turnover of retail concession contracts mandated by Chicago Mayor Rahm Emanuel could threaten the jobs or income of 1,500 of the concession employees in coming months.

Meanwhile, the Service Employees Union’s own Local 1 is organizing a wide range of passenger services workers—the people who push wheelchairs, drive shuttles, clean airplane cabins and do other essential but low-skill tasks.

A new study reveals just how bad their working conditions are: Over one-third, for example, don’t make the Illinois minimum wage, partly because they rely on tips—which many passengers don’t realize, and by federal law the personal service assistants can’t say anything to encourage tipping.

At the same time, even though employers break the law by refusing to bring the combined wage and tips up to the minimum, they report the workers’ income as if they made the minimum, thus taking out a bigger chunk for taxes than warranted by the real income. UNITE HERE promotes legislation—nominally supported by 31 of the city’s 50 aldermen, but indirectly opposed and delayed by Mayor Emanuel’s administration and his hardestcore loyalists in the council—that would help both sets of workers.

The “Stable Jobs, Stable Airports” ordinance would guarantee workers their jobs during a change in concessionaire contracts, require employers to maintain labor peace (not only helping maximize city revenues and increasing convenience for travellers but also restraining anti-union actions), and close an anomalous loophole in the existing living-wage law that exempts airport contractors. Similar rules govern several other major airports, such as those in New York, San Francisco and Los Angeles.

“It’s not like this is a real burden for Chicago to do because other cities have done it successfully,” says UNITE HERE organizer Jim Baker.

The law would immediately boost pay for about two-thirds of the workers to $11.18 an hour (providing on average a pay hike of about 22 percent or $4,000 a year, according to a study by a group of researchers from the University of Chicago and elsewhere). Chicago’s economy would benefit from $3 million to $8 million in new purchasing power. And the cost would be borne by a small reduction in the super-profits of airport sites, a slight increase in passenger costs, and savings in training costs with a more stable workforce.

The provisions for labor peace and transitional job protection would also help workers like Margaret Shields, a 38-year old mother of two boys in high school, who worked 12 years in retail shops at O’Hare’s international terminal building. When the city’s newly hired management firm subcontracted with The Hudson Group, a Swiss-owned airport retailer to run the store where she worked, Shields was the first of 12 workers (out of 21 total employees) who were fired.

Although a member of UNITE HERE, the contract at her store and union recognition had not been re-affirmed. The fired workers were disproportionately more experienced and higher-paid, says Baker. Shields had never been disciplined or criticized for her performance over her dozen years. But she was also a union stalwart. On Monday, January 11, after she had already prepared to leave at the end of her shift, Shields says, she refused to do work her supervisor told her to do, and she was charged with insubordination the next day. That was also the time a leaflet became public about a meeting with management on worker grievances, and Shields’ name was on it. The next day, at the end or her shift, she was fired.

Baker worries about what will happen as more new concession contracts are signed. “There are gains [from the new union presence], while limited, which could be eroded,” he says. But he also worries about the way in which the Stable Jobs, Stable Airports proposal has been buried in the committee of a council floor leader for the mayor. “I would think when an ordinance is introduced, it would get a hearing and vote,” he says.

The personal service workers, whom SEIU Local 1 is organizing in both Chicago and Houston, would gain from the legislation. But workers in both groups need unions and better across-the-board labor law enforcement. Most work for a few contractors who are hired by the airlines, and over half are foreign-born, either from eastern Europe or Latin America.

Beyond finding how many workers report not even receiving the minimum wage, the new study by University of Illinois Labor Education Program researchers reports that employers

  • failed to pay wages owed to one-third of workers at least once a year;
  • paid one-fifth of workers less than legally required overtime;
  • retaliated against 44 percent of workers who expressed some grievance;
  • illegally punished a third for union organizing;
  • illegally interfered with workers compensation rights of half of those injured on the job;
  • verbally abused more than one-fourth of workers;
  • deny over half the workers’ scheduled breaks;
  • either do not offer health insurance or charge so much that 95 percent of workers do not get health coverage through their jobs.

The personal service workers typically have no sick days or vacation and rely on public assistance programs to make minimal ends meet. Now Shields thinks many other airport workers like her are ready to work to change these conditions.

“You’ve got to put hope in the good fight,” she says. “I believe they expect us to give up. But we’ve got to keep it up for the next set of people, so they won’t have to go through this.”

This blog originally appeared in Working in These Times on March 6, 2012. Reprinted with permission.

About the Author: David Moberg, a senior editor of In These Times, has been on the staff of the magazine since it began publishing in 1976. Before joining In These Times, he completed his work for a Ph.D. in anthropology at the University of Chicago and worked for Newsweek. He has received fellowships from the John D. and Catherine T. MacArthur Foundation and the Nation Institute for research on the new global economy. He can be reached at [email protected]

Hotel Workers Challenge Morality of Hyatt Owners: The Billionaire Pritzkers

Friday, March 2nd, 2012

David MobergUNITE HERE gets personal with Penny Pritzker, chief Obama campaign fundraiser

CHICAGO—Thursday, March 2, was the deadline for homeowners in Chicago and the rest of the surrounding county to pay the first installment of their property taxes. It is rarely a cause for celebration, even for those, like Justice Oliver Wendell Holmes, who see taxes as the price of civilization. But on top of that, several dozen people stood outside the Cook County government building, shouting, “Pay your taxes!”

They weren’t hectoring the average bungalow owner but rather one of the most prominent members of probably the city’s wealthiest family–Penny Pritzker. She’s the confidant and fundraising chief for Barack Obama and the heir to part of the multi-billion empire of Hyatt hotels, a manufacturing conglomerate and a now-defunct pioneer in subprime, predatory lending, among many other businesses.

It turns out, according to research released yesterday by UNITE HERE Local 1, the hotel, gaming and food service union, that she also has appealed the property tax assessment on her Chicago mansion ten times since the building was completed (covering four normal lots) in 2007 at a cost of at least $10.4 million.

Using a politically connected former county assessor for the appeals, according to Crain’s Chicago Business, she successfully reduced the market value for tax purposes by 42 percent, from the assessor’s original $9.6 million to $5.6 million. Two more pending appeals could reduce the assessment even further.

Already the reductions have saved her about $176,000 from 2006 to 2010, chicken feed for a billionaire but for hard-strapped schools and parks, it’s a significant sum (and a bad civic example). Penny Pritzker should know something about those budget problems: She sits on the Chicago Public Schools board, and her husband is president of the park district board of commissioners. That’s why the protestors outside the County Treasurer’s office chanted, “Penny Pritzker/Fund our schools.”

Other Pritzker family members (except J.B.) and Hyatt CEO Mark Hoplamazian have successfully pursued similar appeals—a total of 70 since 2003—that cost local government and public services more than $300,000, according to UNITE HERE.

But why was a hotel workers’ union making this point?  Despite selling much of their holdings, the Pritzkers still have majority control over Hyatt, which has resisted agreeing to key parts of a 2009 contract signed by other major hotels in Chicago (and is fighting similar settlements in other cities).

“This [tax avoidance] is another example of where we think the family that owns the Hyatt hotels has gone off the reservation of what’s fair and just,” says Local 1 president Henry Tamarin. “We’re in a dispute with Hyatt Hotels corporation over treatment of both union and non-union workers, and we think this is another example of the family setting the wrong example….The problem is they’re gaming the system, and they’ve been able to do that successfully because as the 1 percent of the 1 percent they can hire the lawyers that permit them to win and take it as far as they can go.” It’s not an issue of the legality of their actions, he says, but of the morality.

Hyatt “has been most aggressive in one of the key problems in the industry, increased subcontracting,” says Local 1 president Henry Tamarin. Hyatt alsorefuses to accept the contractual regulation of subcontracting to which other hotels agreed. It has rejected overtime pay for more than seven days of work without a break, a rule that prohibits mandatory overtime when workers in a particular job category are laid off, and other practices accepted by other hotels, including agreements to remain neutral in some hotels where workers have shown interest in forming a union.

Many of the same workers who are squeezed at work by Hyatts and their counterparts in other businesses are hurt outside work by underfunding of skimpy public services and disproportionately burdened by taxes they can less afford to pay than the Pritzkers.

A new report from the Center on Tax and Budget Accountability says that “far from being progressive, Illinois’ tax policy is regressive, assessing much higher overall tax burdens as a percentage of income on low and middle-income families than on affluent families. Indeed, Illinois has the third highest tax burden on low income families in the nation.”

The Pritzkers have a reputation for their charitable giving, but that is part as well of their gaming the system–whatever the good intentions or even results. The family empire relied repeatedly on favorable governmental deals, from tax breaks to subsidies, and exploited every loophole. But its charitable giving helps innoculate it from attack when ventures go over the line, and they are projects that glorify the Pritzkers doing things they want to do (even if there are often public benefits).

Meanwhile, they shirk their share of public responsibility and try to shortchange the people who create their wealth. “When billionaires pay less taxes, we all pay the price,” says Linda O’Neal, a hotel server, homeowner, and parent of public school students. “I don’t make the kind of money the Pritzkers make, but I pay my fair share of taxes. It’s time for Chicago’s wealthiest family to stand up and stop hurting our communities.”

This blog originally appeared in Working in These Times on March 2, 2012. Reprinted with permission.

About the Author: David Moberg, a senior editor of In These Times, has been on the staff of the magazine since it began publishing in 1976. Before joining In These Times, he completed his work for a Ph.D. in anthropology at the University of Chicago and worked for Newsweek. He has received fellowships from the John D. and Catherine T. MacArthur Foundation and the Nation Institute for research on the new global economy. He can be reached at [email protected].

Jobless Rate Drops, But Pain, Despair Persist in Weak Economy

Monday, December 5th, 2011

David MobergThe headline news on Friday that the unemployment rate in November dropped 0.4 percent to 8.6 percent may help President Obama avoid losing his job next year. But the reality behind the figures will not—and that reality includes a big dose of stress, anger, despair and insecurity even beyond the ranks of the unemployed, according to two new reports.

The number of jobs in the country grew by 120,000 in November, slightly below the rate of the past year (though it could be revised upwards as the Labor Department just did for the previous two months). That’s barely enough to cover the growth of the labor force, and it reflects the loss of 20,000 public sector jobs–a continuing erosion of anemic private sector growth as a result of budget-cutting.

The bad news behind the lower unemployment rate is simply that the labor forcce last month shrank by 315,000 workers, who presumably have given up searching for a job. Although the Great Recession has been particularly rough for men, women–unmarried and disproportionately African-American–more than accounted for November’s labor force decline.

Other trends reinforce the bad news:

* long-term unemployment as a share of joblessness rose, approaching record levels, and the average duration of unemployment reached a record 40.5 weeks;
* underemployment remains fairly steady and high;
* wages are declining for those who have jobs;
* although health care continues to add jobs, most of the new jobs are low-wage, insecure openings in retail and services.

Since the 1980s each recovery from a recession has been slower and more “jobless” than its predecessor. This much deeper recession is no exception; at the current growth rate, economist Dean Baker projects it will take 16 years to return to the less-than-fabulous pre-recession state of the job market.

But the hardships of the recession extend beyond the ranks of the jobless.

Wider Opportunities for Women, just released a report, Living Below the Line: Economic Insecurity and America’s Families. The “line” defines an “economic security” budget level for different households that is higher than the official poverty line but far short of what most Americans might describe as a middle-class standard. (For example, the budget assumes a family of four rents an apartment for $821 a month and has no immediate prospects for buying a house.)

WOW’s study finds that 45 percent of U.S. residents live in a household that lacks economic security. Women, especially single mothers, and then particularly African-Americans and Hispanics, are  most likely to live in economic insecurity. But the study concludes that although it does not directly address the condition of the middle class, there are “fundamental financial weaknesses in the ‘middle’ and problems with the very conception of a middle. That nearly 40 percent of the nation’s adults and 45 percent of adults are their children lack basic economic security incomes suggests that the nation’s economic middle is not very broad and may not, in fact, exist.”

Losing a job is extreme economic insecurity, especially when Republicans are playing “protect the rich” games. In response to the Democratic proposal to finance programs that extend the duration of unemployment compensation through a surtax on millionaires, for example, Republicans reportedly advocate instead funding it by continuing to freeze federal workers’ pay and eliminating many of their jobs.

USAction, a national coalition of citzen groups, captures some of the suffering of the unemployed in a new report based on stories from nearly 1,200 of its laid-off members, “Hardly Working; Stories From Un- and Under-Employed Americans.”
They found three broad themes: frustration at discrimination in hiring (with discrimination on age and against the unemployed standing out, in addition to the usual discriminations; emotional and financial distress; and despair about their futures and the future of the country.

For example, 59-year old Wayne Persons of Mount Laurel, New Jersey, had a successful career as a sales manager until his company went out of business two years ago. “Between the fact that we were in a bad economy with too many people out of work with not enough jobs to go around, combined with my age, combined with the fact that I was unemployed, it became almost impossible for me to get a job interview, let alone get a job,” he said at a teleconference on release of the report, “and I was looking very hard for over two years.”

“I just don’t understand what happened to this country,” says Molly Wasserman, who lost her successful job track when she moved from New York to Ohio to care for her mother, who was ill with cancer. “I don’t recognize my place in it any more. More and more of us are marginalized, ignored or happily forgotten because we’re not working….What exactly is a person supposed to do who is not being hired? Are we just supposed to die? Are we supposed to commit suicide? Are we supposed to die, homeless in the streets?”

Steve Hanken, 61, of Cedar Rapids, Iowa, told In These Times his career has felt like “a steady roll downhill.” Now he has a temporary, part-time job at the local office of the state Department of Human Services where he watches a shrinking staff deal with increased demands as the recession’s toll accumulates. A college drop-out, he moved from one skilled machinst job to another as employers downsized, then switched to an unpredictable career executing archaeological digs, often supervising large crews and doing lab work.

Hanken, a former Democratic party central committee member, now feels like a man without a party—until a third party emerges. “Obama promised to do a lot and did nothing,” he laments. “The other side says they want to do nothing and they will. They’ll protect the wealthy and the rest of us can go to hell.”

“I don’t know where democracy went to in this country,” says Hanken, who wants to see banks more regulated, more bankers and CEOs in jail, and more of the nation’s wealth shared with those who need it and will spend it. “I used to think people in government were looking out for me,” he says. “Now it seems they’re looking out for themselves and their friends. I’m baffled. I don’t know what to do. I think  it’s a matter of time before we little people are all under the bridge.”

This blog originally appeared in Working in These Times on December 2, 2011. Reprinted with permission.

About the Author: David Moberg, a senior editor of In These Times, has been on the staff of the magazine since it began publishing in 1976. Before joining In These Times, he completed his work for a Ph.D. in anthropology at the University of Chicago and worked for Newsweek. He has received fellowships from the John D. and Catherine T. MacArthur Foundation and the Nation Institute for research on the new global economy. He can be reached at [email protected]

Trumka: AFL-CIO Will Support Occupy Wall St. Protest "In Every Way' it Can

Friday, October 7th, 2011

David MobergFinally, anger at the abuses of the rich against the other 99 percent of Americans is bubbling up, giving energy to the Occupy Wall Street protests and their progeny around the country and fueling other actions.  And just as unions are throwing their support behind those demonstrations, they hope the populist upsurge on the left will energize their own planned public demonstrations demanding jobs, many of them starting next week.

Minnesotan Kim Watkins, 40, single mother of a 16-year old daughter, is one of those who wants to see action on jobs. A member of the AFL-CIO community affiliate, Working America, she has worked since she was 15. Now she is employed only part-time at a local Walgreen’s, going to school to help her job-hunting prospects, and “really struggling.“

“I feel very much under attack,” she says. “I see people being fired, wages being reduced, instead of doing things that are really common sense, like creating jobs by building infrastructure. While the top 1 percent are getting all the gains, the 99 percent of us are really suffering, and there aren’t any jobs being created.”  Next week she plans to join a tongue-in-cheek “fundraiser for the struggling rich” featuring nickel hot dogs.

Joblessness continues to be “devastating” to over 16 percent of the workforce and many communities and is “absolutely brutal” to people of color, AFL-CIO president Richard Trumka said Wednesday as he announced the kick-off next Monday of hundreds of events for the federation’s America Wants to Work campaign.

But on Wall Street, he said, “the bonuses keep flowing,” CEO pay was up 23 percent last year, and business as usual prevails—except that corporations and banks are sitting on more than $3 trillion in cash they won’t invest to put Americans back to work and rejuvenate the ailing economy.

The labor actions will push Congress to pass job-creating legislation—especially Obama’s American Jobs Act–and other economic reforms, many of which aim to better regulate the financial sector and make it pay for the damage it inflicted on the real economy and for creation of new jobs.

Trumka also endorsed the Occupy Wall Street protests, as the federation’s executive council did on a Wednesday conference call.  Many local unions in New York had already joined the protests or offered support, but more national unions have issued statements of enthusiastic support, including the Service Employees (which has long had a campaign focused on the financial sector), the Teamsters, the Bakery Workers and others.

“We will support them in every way we can,” Trumka says, noting that unions had mobilized 15,000 marchers on Wall Street a year and a half ago. “We believe as they do that the economy is shutting out 99 percent of the people. It works for the top 1 percent marvelously…But the rest of us with stagnant wages, lost jobs, home foreclosures, kids that can’t go to school, lost health care, pensions taken away and retirement security destroyed, we think there’s a different and better way….We aren’t going to try to usurp them in any way but support them. And we certainly hope they support us on our America Wants to Work campaign.”

Organized labor has three demands that are shared by most Wall Street occupiers, Trumka says. First, corporations and banks should invest their cash in America, creating good jobs. Second, banks and other holders of the 14 million foreclosed or “under water” mortgages and then ten million more expected to go sour should be forced to write down the mortgages to reflect the real, post-bubble value. Finally, the government should impose a “speculation tax,” or financial transactions tax, of one-tenth of one percent. Researchers in Europe figure a similar tax would generate $78 billion a year, and with its larger financial markets, the U.S. could gain as much or more.

A similar campaign by a labor-community coalition, Stand Up, Chicago, will direct actions towards two major financial sector conventions being held next week in Chicago—one of mortgage bankers, the other futures traders—and towards local institutions.  Spearheaded by the Service Employees Union and involving only the Teachers union from the AFL-CIO, the actions nevertheless parallel the AFL-CIO protests.

A study prepared by the Chicago Political Economy Group and released prior to the protests by Stand Up, Chicago, concluded that a twenty-five cent speculation fee paid by both buyer and seller of futures contracts would generate $1.4 billion that could fund creation of 40,000 new jobs. The report proposes a variety of public service jobs, including a community schools corps (rehiring laid-off teachers and other workers, refurbishing and increasing energy efficiency of schools, and making other upgrades) and other worker corps focused on community health, child care, jobs for youth, and neighborhood improvement.

“There’s anger and outrage,” Trumka says, although so far the anger from the right has been better organized along Tea Party lines. “We want to put that outrage to work to create jobs and restore balance to our economy.”

This post originally appeared in Working in These Times on October 6, 2011. Reprinted with permission.

About the Author: David Moberg, a senior editor of In These Times, has been on the staff of the magazine since it began publishing in 1976. Before joining In These Times, he completed his work for a Ph.D. in anthropology at the University of Chicago and worked for Newsweek. He has received fellowships from the John D. and Catherine T. MacArthur Foundation and the Nation Institute for research on the new global economy. He can be reached at [email protected]

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