Posts Tagged ‘Social Security’
Saturday, February 23rd, 2013
Paul Krugman has a pretty straightforward plan to deal with the sequester that’s due to hit March 1. The New York Times columnist and Nobel Prize-winning economist says, “The right policy would be to forget about the whole thing.”
He bases his proposal on what Federal Reserve Vice Chair Janet Yellen said in her keynote address to the Trans-Atlantic Agenda for Shared Prosperity conference at the AFL-CIO headquarters in Washington, D.C., earlier this month. Fiscal austerity, such as the sequester and the latest doomsday alert from the Bowles-Simpson duo, is the enemy of real economic recovery. Writes Krugman:
America doesn’t face a deficit crisis, nor will it face such a crisis anytime soon. Meanwhile, we have a weak economy that is recovering far too slowly from the recession that began in 2007. And, as Janet Yellen, the vice chairwoman of the Federal Reserve, recently emphasized, one main reason for the sluggish recovery is that government spending has been far weaker in this business cycle than in the past. We should be spending more, not less, until we’re close to full employment; the sequester is exactly what the doctor didn’t order.
Read his full column, including his take on Erskine Bowles and Alan Simpson, “the famous fomenters of fiscal fear.”
The arbitrary, across-the-board sequestration cuts in everything from mental health services to public safety kick in next Friday, and House Speaker John Boehner (R-Ohio) and Republican lawmakers say they are willing to toss 750,000 people out of work and cut vital lifeline government services to ring massive concessions in cuts from Social Security, Medicare and Medicaid.
Working families are calling on their elected representatives to protect Social Security, Medicare and Medicaid from benefits cuts, repeal the sequester and make sure corporations and the wealthiest 2% pay their fair share through closing tax loopholes.
This post was originally posted on AFL-CIO on 2/22/2013. Reprinted with Permission.
About the Author: Mike Hall is a former West Virginia newspaper reporter, staff writer for the United Mine Workers Journal and managing editor of the Seafarers Log. He came to the AFL- CIO in 1989 and has written for several federation publications, focusing on legislation and politics, especially grassroots mobilization and workplace safety.
Friday, January 18th, 2013
As if we didn’t already have enough on our plates (having to fend off attacks from the “Fix the Debt” CEOs), now there’s another group of CEOs, the Business Roundtable, telling us we need to “modernize,” a.k.a. cut, Social Security and Medicare benefits by raising the eligibility ages and reducing cost-of-living adjustments (COLAs). How helpful.
R.J. Eskow took on the Business Roundtable in his latest blog, How Extreme Is the Business Roundtable? Check Out Its Attack on the Elderly.
Yesterday, Gary Loveman, CEO of Caesars Entertainment Corp. and head of the Roundtable’s “health and retirement committee,” told Politico that “[a]ny effort to address the country’s fiscal problems has to have as a centerpiece reform of its principal entitlement programs.”
Added Loveman: “None of us [CEOs]—very few of us—are ideologically driven. We’re pragmatists….”
“I am encouraged by how relatively easy these remedies really are,” said Loveman. “… (and) they have a tremendously sanguine effect on the government’s fiscal health.”
That’s true. It is pretty easy. Just kick in a few rich people’s doors, seize their belongings…oh, wait. That’s the other extremist scenario. Loveman’s is the one where people who have paid for Social Security and Medicare coverage throughout their working lives must give some of their benefits up—for him and his friends.
These CEOs are the same people cutting back on pensions and retiree health benefits. Now they want working people to have even more economic insecurity in retirement by cutting the few benefits that keep seniors afloat.
Raising the Social Security retirement age is especially damaging. Not only is it a benefit cut, workers 55 and older have the longest bouts of unemployment. The average time unemployed is nearly a year (51.3 weeks, compared to 34.3 weeks for workers younger than 55).
Eskow points out that 8.9% of American seniors already live in poverty, while 5.4% are on the edge. The average Social Security recipient collects $1,164 per month.
Anyone who claims they can cut those benefits by 3%—and use those meager benefits to end elder poverty—is selling snake oil.
Snake oil indeed. There’s nothing more cynical than calling devastating cuts to vital lifelines “modernization proposals.” Working people know the difference.
This post was originally posted on AFL-CIO on 1/17/2013. Reprinted with Permission.
About the Author: Jackie Tortora is the blog editor and social media manager at the AFL-CIO. Interviewing union musicians was her introduction to the labor movement. Her first job after graduating college was in Syracuse, New York, where she wrote and edited the International Musician, the monthly magazine for the American Federation of Musicians (AFM). Protecting Social Security and Medicare from benefit cuts brought me to Washington, D.C., where she spent two years as a new media coordinator at the National Committee to Preserve Social Security and Medicare. She came to the AFL-CIO in the summer of 2012, just in time to re-elect President Barack Obama. When she’s not tweeting about America’s unions, it’s likely she’s watching Syracuse basketball and football.
Tuesday, October 16th, 2012
Today’s announcement that Social Security recipients will receive a modest increase (1.7%) in their cost-of-living adjustment (COLA) was a small but welcome boost for seniors who are seeing prices increase on necessities, from health care to food. However, even this modest increase could be jeopardized if proposals floating around in Washington to “tweak” the current COLA formula by tying it to the so-called “chained CPI” are passed.
Senior advocates and retirement experts say the current formula, the CPI-W, is already inadequate. Higher health care costs and expenses seniors face are not accurately addressed in the CPI-W.
The Alliance for Retired Americans Executive Director Edward Coyle says:
The current formula, used for today’s announcement, already badly understates the inflation experienced by seniors and disabled Americans, who make up the majority of Social Security beneficiaries. However, the change some in Congress want would exacerbate this flaw in a way that is particularly damaging for women who, because of their greater life expectancy, receive benefits over a longer period of time.
The National Committee to Preserve Social Security and Medicare says:
The typical 65-year-old, who filed for benefits at 62, would lose about $130 per year in benefits. By the time that senior reaches 95, the annual benefit cut will be almost $1,400, which is a 9.2 percent cut.
The AFL-CIO, along with the Strengthen Social Security coalition, sent a letter to Congress today expressing its opposition to the chained CPI:
The purpose of an inflation adjustment is to ensure that the value of Social Security and other modest but vital benefits does not erode over time. The proposal to switch to the chained CPI would, over time, slash the benefits of both current and future beneficiaries. Specifically, it would cut the basic benefit—currently averaging a modest $13,500 for all beneficiaries—and break the bipartisan promise not to cut the benefits of current seniors.
Although some in Congress may say this is a modest tweak or a change to more accurately reflect inflation, nothing could be further from the truth.
A chained CPI means cuts are larger the longer you receive benefits.
Says the Strengthen Social Security coalition:
One of the most problematic aspects of the chained CPI is that the cuts are larger the longer you receive benefits – meaning that the chained CPI would disproportionately hurt many women, veterans, people with disabilities, and others. For example, veterans wounded in combat and others disabled at young ages would be disproportionately hurt. Seniors, especially women, who live long lives would also be hurt disproportionately.
The AFL-CIO Executive Council supports an across-the-board increase in Social Security benefits.
This post originally appeared in AFL-CIO Now on October 16, 2012. Reprinted with permission.
About the Author: Jackie Tortora recently joined the AFL-CIO as the blog/social Media editor. Before that, she was a Social Security and Medicare advocate for a national seniors’ organization.
Wednesday, October 10th, 2012
A total of 84,350 pension plans have vanished since 1985. This figure shocked Pulitzer Prize-winning authors Donald L. Barlett and James W. Steele, who just released their latest book, “The Betrayal of the American Dream.” Their chapter on retirement chronicles the heist of the American dream’s secure retirement by the financial elite and is a very important section of the book, says Steele, who spoke with the AFL-CIO about the retirement crisis. Steele says there is another number we should pay attention to: $17,686. That’s the median value of 401(k) accounts in 2011. For most working people, the amount in their 401(k) account would pay them less than $80 a month for life.
“What’s happening with retirement is almost parallel to what you see happening in other parts of the economy,” says Steele.
The elite has its agenda to eliminate pensions with the shift to 401(k)s, which cost companies less. Now, there’s a revenue stream for Wall Street and an obligation shift to people with little or no experience understanding how to deal with their own retirement issues….This is typical of all the other things the economy elite has been doing for decades with deregulation, unrestricted free trade and tax cuts—these things are all related.
“In the ’50s, ’60s and ’70s, the amount of workers with access to pensions was significantly rising,” says Steele. “We fully underestimated the speed in which the downturn would occu, and how Congress went along and encouraged it.”
Barlett and Steele write that the shift from defined-benefit pension plans to 401(k)s began in the 1980s. Companies realized 401(k)s would substantially reduce corporate costs. Workers were told that pensions no longer made sense and were outdated since people moved around from job to job. The 401(k) was marketed as more “portable.”
Steele says 401(k)s were engineered by corporations as another way for the wealthy executives to set aside money. They were never intended to be a principal retirement plan, only a supplement.
“Once corporate America got on to this, the idea took root,” says Steele. “The entire obligation shifted to the employees.”
Congress ignored the concerns raised by trade unions and other pension rights organizations. And the consequences are dire for middle- and lower-income workers.
“This is so typical of what has been happening over the last two to three decades,” says Steele. “This is the slow, steady erosion of economic security Americans had (or thought they had)….Now economic pundits, corporate folks and Wall Street people are saying people just have to work longer, in part because retirement plans now in place will not provide much security to people as they get older.”
Barlett and Steele feature stories of average people who did everything right (saved, worked hard) but are still living on the edge of poverty because of policies that enhance the rich at the expense of everyone else.
Over and over again, people thought they had something good. They were working hard and then, through no fault of their own, lost it all. Most people we talked to in the book are employed.
People thought it was something they had done to lose their job or benefits….They didn’t realize it was part of a broader pattern. There are great swaths of working people who are affected and we think it’s our fault. For most of these people, it’s not their fault, it’s just the way policy has been organized. Systematically dismantling pensions and retirement is the perfect example.
With the decline of pensions, it’s even more important to strengthen, not cut, Social Security benefits. Although the country dodged a bullet in 2005, when Bush’s plan for Social Security privatization fizzled, Steele says we still need to be vigilant to protect our benefits from the Wall Street casino.
Don and I make this point that the 2008 recession wouldn’t look a whole lot different from the Great Depression if we didn’t have Social Security and Medicare because there was no safety net then.
The economic elite, says Steele, attack Social Security because it’s a large pool of money for Wall Street to play with.
Nobody should kid themselves that they’re not going to come back and try to implement some parts of that [privatization]….The amount of money at stake is too good and that’s all they care about—access to that money, not American workers.
You can purchase “The Betrayal of the American Dream,” on Amazon.com and Barnesandnoble.com.
This post originally appeared in AFL-CIO Now on October 7, 2012. Reprinted with permission.
About the Author: Jackie Tortora recently joined the AFL-CIO as the blog/social Media editor. Before that, she was a Social Security and Medicare advocate for a national seniors’ organization.
Wednesday, June 20th, 2012
Leon Burzynski, president of the labor-backed Alliance for Retired Americans in Wisconsin, is someone who appreciates the steps that Barack Obama has taken to bring the economy back from the brink of disaster. But he remains deeply concerned about the plight of workers aged 50 to 64. These workers—eager to work and too young to afford retirement—remain marginalized in an economy where cash-laden corporations are still reluctant to retrain full-time employees.
“It’s a dark time for older workers,” said Burzynski. “I don’t see the economy coming around for older people who want to work.”
With hiring in the private sector slow and the Republicans systematically blocking each and every stimulus measure, the prospects for older workers are bleak indeed. At a point in their lives when they expected to be making their peak earnings, this group of workers finds themselves navigating a complex minefield of problems without significant social support.
JOB INSECURITY: While the pace of layoffs has slowed considerably, corporations continue to reduce their workforces unpredictably and to send both manufacturing and white-collar professional work overseas.
PAY INSTABILITY: Even though profits have achieved record levels for major corporations, firms like General Electric are imposing pay cuts of as much as 45 percent on long-term workers. The wage-cutting wave that began immediately after the Wall Street meltdown is persisting.
REDUCED SAVINGS: Falling wages have reduced the ability of Americans to save. Meanwhile, dropping home values have been a central factor in shrinking the net worth of American families, reported The Los Angeles Times:
The typical American family lost nearly 40% of its wealth from 2007 to 2010 as the Great Recession reduced household net worth to a level not seen since the early 1990s.
The net worth of the median U.S. family — one with an equal number of families richer and poorer — fell to $77,300 in 2010 from $126,400 three years earlier, after adjusting for inflation, the Federal Reserve said in a new report.
Among working families, “most folks have all their net worth tied up in their homes,” Burzynski says.
LONG STRETCHES OF UNEMPLOYMENT
When laid off, older workers face especially long periods of unemployment, the Urban Institute found:
Job loss during the Great Recession is upending retirement savings plans for many older workers. Fewer than a quarter of workers age 50 and older who lost their jobs between mid-2008 and the end of 2009 found work within 12 months.
Another study revealed, “The median duration of unemployment for those 55 and older was 34.1 weeks in May, according to the Labor Department, in contrast to 22 weeks for all jobless people over 16.”
Prolonged periods of unemployment are remarkably stressful to both physical and mental health, with one noted British doctor equating the effects of long-term joblessness with the death of a spouse.
FORCED TO OPT FOR SOCIAL SECURUTY: With job-hunting stretching out and exhausting older workers’ savings, many older workers find that they need to opt for Social Security before age 66. This means a permanent reduction of 20 to 30 percent in benefits for the rest of their lives, but some find themselves with no other alternative, The New York Times reported:
Even as most Americans are delaying retirement to bolster their savings accounts, the recession and its protracted aftermath have forced many older people who are out of work to draw Social Security much earlier than they had planned.
According to an analysis by Steve Goss, chief actuary for the Social Security Administration, about 200,000 more people filed initial claims in 2009 and 2010 than the agency had predicted before the recession and he said the trend most likely continued in 2011 and 2012, though that is harder to quantify. The most likely reason is joblessness.
TRADITIONAL PENISONS DISAPPEARING FAST: For decades, Americans have relied on pensions that provided a predictable source of income in combination with Social Security and savings. But various Individual Retirement Account and 401(k) plans—infinitely cheaper for employers—have taken their place. As Jacob Hacker and Paul Pierson point out in their excellent book, The Great Risk Shift, “As recently as twenty-five years ago, more than 80 percent of large and medium-sized firms offered a defined–benefit plan; today, less than a third do.”
The funds being accumulated in IRA-type accounts are hardly sufficient to provide a secure and fulfilling retirement, says Burzysnki. “The average IRA contains only $55,000 to $60,000—that’s not enough for what I what I call a quality retirement.”
The lack of support for workers aged 50 and over is exacerbated by the unpredictable circumstances that can lead some to retire, often without the necessary savings and a solid plan. As Hacker and Pierson point out, “Four in ten retired workers today report that they left their jobs earlier than planned because of layoffs health problems, or sick family members.”
This blog originally appeared in Working in These Times on June 18, 2012. Reprinted with permission.
About the Author: Roger Bybee is a Milwaukee-based freelance writer and progressive publicity consultant whose work has appeared in numerous national publications, including Z magazine, Dollars & Sense, Yes!, The Progressive, Multinational Monitor, The American Prospect and Foreign Policy in Focus. His e-mail address is email@example.com.
Thursday, May 24th, 2012
Written by CEPR
Former White House adviser Ezekiel Emanuel offered in a recent New York Times column his bipartisan solution to Medicare, Medicaid and Social Security reform: Graduated eligibility for Social Security and Medicare, or linking “the age of eligibility to lifetime wealth.” The idea, according to Emmanuel, is that “[t]he richer you are, the older you would have to be to be eligible for Social Security and Medicare.”
As Dean Baker notes over at Beat the Press, there are two problems with this approach. First, the budget deficit is a health care problem, not a Social Security problem. Lumping Social Security in with Medicare and Medicaid certainly makes it look like a problem, but if you replace “Social Security” with “muffins,” suddenly we are experiencing explosive growth with muffin costs.
Second, Emanuel’s proposal states:
People in the bottom half of the lifetime earnings distribution would become eligible for normal retirement benefits at age 65 for Medicare and 66 for Social Security, just as they are today. But people in the next quarter of the lifetime earnings distribution would become eligible for the respective programs at 67 and 68, and those in the top quarter would become eligible at 70 and 71. All eligibility ages would increase over time, as they are scheduled to now.
Dean points out that “Emanuel’s proposed cuts in these programs would hit people with average lifetime earnings of $40,000 and above.”* Dean and Hye Jin Rho wrote a paper about means testing last year, which you can find here.
* See Social Security data on Average and Median Amounts of Net Compensation.
This blog originally appeared in Center for Economic and Policy Research on May 22, 2012. Reprinted with permission.
Tuesday, July 26th, 2011
“We are in the midst of the most dangerous threat to Social Security I have seen in my lifetime,” exclaimed Ross Eisenbrey, Vice President for the Economic Policy Institute during opening remarks last Wednesday for a panel discussion on young people and Social Security. As discussions got underway it became apparent that while Social Security may be threatened, the youth of America thought it was one of the most important benefits the government provided and Social Security would stay strong as long as politics allowed it.
Celinda Lake, one of the panel members from Lake Research Partners, shared her findings with the audience explaining younger generations were fearful of the economy because of the recent economic crisis, and therefore, opposed any cuts to Social Security, even with the growing deficit. She explained if Social Security wasn’t offered, the older generations would stay in their positions even longer not allowing for the younger generations to take their places in the workforce. She found in her research that younger voters, whom have been hit the hardest by the economy are more supportive towards Social Security, and think it should be guaranteed because employees pay taxes on it. Lake explained that young people do agree with Social Security, so the question needs to be: how do we mobilize them and get that message heard through the polls? Her bottom line was that we can entrust Social Security to young people in the country even if we can’t trust the people in Washington.
The next speaker, Teresa Ghillarduci, author of When I’m 64, The Plot Against Pensions and Plan to Save Them, explained that the days of the 1960’s when men had to continue to work to define themselves has ended. People want the freedom to retire and enjoy life after working 45 years. If we erode retirement savings plans then people will have to stay in the workplace longer and their health and well being is at risk. People who retire when they want to enjoy a much healthier and stress free life, and get to enjoy the freedoms retirement is meant for.
Finally, Kathryn Edwards, author of the Economic Policy Institute’s Young Persons Guide to Social Security, got up and shared her experience when dealing with young people and their views of Social Security in a nutshell. She referred to this idea as the “Youth Challenge: because they don’t think they’ll need it and they don’t think they’ll get it.” She was quick to point out that Social Security is not, “just money for old people but a system of social insurance.”
Social Security is a program utilized more strongly by the middle class than people think. It is not simply to provide for the elderly who do not have good retirements already, but it is a tool people can rely on and a promise made to them to provide a supplement to them when they are in need and unable to work. Social Security is all about the risk associated with not being able to work whether you are disabled, elderly or suffer from an untimely death. But, the main difference between Social Security and other forms of privatized insurance is that Social Security only spends $.01 for every dollar on administrative costs. This figure would be unheard of in a private insurance provider.
Kathryn’s message was simple in that you cannot outsmart risk, so the bottom line is that you need protection from it. People have fears about the future of Social Security, including the idea that people are living longer and we will run out of money to support them. But, life expectancy increasing over the years is a reason to celebrate Social Security, as it is working and allowing people to live longer because they can live out their elder years more stress free.
According to the research conducted at the Economic Policy Institute, to continue Social Security working smoothly and as promised for the over 53 million people receiving its’ benefits, it would cost only 1.5% of the GDP, which was the same amount spent on national defense between 2001 and 2007. Social Security is a well thought out and functioning plan which has provided people with their chance at enjoying retirement since 1935. The younger generations need to step up and ensure politics don’t get in the way of this honorable American program and break the promise made to millions of American workers.
About the Author: Jesci Drake is a current law student and legal intern for WorkPlace Fainess.
Friday, April 22nd, 2011
There was a time on this country when We, the People were in charge, and our government worked for us. Through our government we did things for each other and for our economy, and when we had economic success we paid back toward more such investment. Things are different today and We, the People are no longer in charge. In fact, We, the People are thought of now as “the help.” And lately the Powers That Be have been thinking they aren’t getting quite enough work out of us. So they want to make us Work ‘Till We Die.
The country has a budget deficit caused by tax cuts for the rich, huge increases in military spending, wars, covering problems caused by the Great Recession, and interest on the Reagan/Bush debt. To address these deficits the Powers That Be are coming up with plans to raise the retirement age, eliminate Medicare and cut the rest of the things We, the People do for each other — while, of course, dramatically cutting taxes on the rich.
In response the Strengthen Social Security campaign is launching Don’t Make Us Work ‘Til We Die — a website, actions, video and petition.
Check out the following Video:
Work \’Til We Die
Local Actions April 28!
Click here to find an event near you.
If there is no event near you, you can participate in their Virtual Rally.
This is great. Print out a sign and take a picture of yourself holding the sign. Email it to: firstname.lastname@example.org with your City & State in the subject line, and be part of the Virtual Rally.
* Don’t Make Me Work ‘Til I Die
* Don’t Make My Kids to Work ‘Til They Die
* Make Your Own
What Others Are Saying
Left In Alabama: Don’t Make Us Work ‘Til We Die,
There will be rallies in 18 states — 52 of them at last count — on April 27 and 28 where current retirees will demonstrate how hard or even impossible it would be for them to continue working at the jobs they retired from.
Digby: Don’t Make Us Work Until We Die.
Evidently, this is the new fate for many more of the elderly. Between raising the retirement age, skimping on the benefits, wage stagnation and economic wipe-outs like the Great Recession, young and old alike will be competing for all those low paying jobs. But since three and four generations will all have to live under the same roof, perhaps they can come up with some sort of job share concept so that they can work in shifts and someone will be at home to take care of the children. As long as it doesn’t inconvenience the employer, of course.
Richard Eskow at Ourfuture.org: Work ‘Til You Die: The Alternate American Reality — And The Reality
The retirement age is already scheduled to increase, and raising it even more is nothing less than cruel. That idea’s part of the political trend toward “austerity economics,” a resurgent anti-government ideology that’sengendered a wave of enthusiastic — no, make that orgiastic prose — from well-fed pundits. Their display of almost snuff-movie-like excitement should have been predictable, but I found it shocking anyway.
AFL-CIO Now Blog: Tell Lawmakers, ‘Don’t Make Us Work ‘Til We Die’,
There is a scary scenario in store if the Republican budget, drafted by Rep. Paul Ryan, is ever implemented. Take a look at this new video from Strengthen Social Security, Don’t Cut It, that takes us to a new dimension where “politicians are cutting our Social Security and Medicare and forcing us work until we die.”
The Serlingesque video is part of a new campaign to fight back against the Republican budget and other proposals to raise the retirement age, turn Medicare over to Big Insurance and slash Medicaid for seniors, children and people with disabilities.
Next week on April 27 and 28 in more than 50 cities in 18 states, activists from the Strengthen Social Security, Don’t Cut It coalition—the AFL-CIO and the Alliance for Retired Americans are part of the coalition—will hold events at congressional district offices to tell their lawmakers hands off Social Security. Click here to find an event near you.
The Main Street blog
Everyone who has worked in a physically demanding job knows what increasing the retirement age will mean. It’s one thing to preach the necessity of this from behind a desk in a cushy office. It’s another thing to be a miner, nurse, truck driver, cook, carpenter, janitor, or a waiter at age 67 — if our bodies last that long. For those who are among the still unemployed/underemployed, and over the age of 55, the promise of Social Security in the future is what keeps us going. We can’t let them pull the rug out from under seniors who have worked long and hard, and paid in to the Social Security Trust Fund.
Dean Baker at CEPR: Why Do Real Men Want to Cut Social Security?
It really speaks volumes about the nature of politics in Washington that in order to be accepted as a serious participant in the budget debates, it is now necessary to affirm a willingness to cut Social Security. This is bizarre from many different angles.
Ellen’s Illinois Tenth Congressional District Blog: Days of Action to Protect Social Security/Medicare,
April 27th and 28th will be days of action to protect Social Security and Medicare. The themes are “Don’t Make Me Work Until I Die” and “Don’t Make My Kids Work Until They Die.” Here’s the video:
… If you’re ok with foregoing retirement and health care when you need it most so some CEO of a multinational can walk away with billions (trillions) and take his jobs to India, China and Pakistan, then go ahead and vote for Republicans and do nothing on April 27th and 28th, but if you want US jobs and a US middle class that provides for a dignified retirement, then join Strengthen Social Security for its events, virtually if you cannot make a meeting.
About the Author: Dave Johnson is Dave Johnson (Redwood City, CA) is a Fellow at Campaign for America’s Future, writing about American manufacturing, trade and economic/industrial policy. He is also a Senior Fellow with Renew California. Dave has more than 20 years of technology industry experience including positions as CEO and VP of marketing. His earlier career included technical positions, including video game design at Atari and Imagic. And he was a pioneer in design and development of productivity and educational applications of personal computers.
This blog originally appeared in Dirty Hippies on April 21, 2011. Reprinted with Permission
Wednesday, September 8th, 2010
This Labor Day feels gloomy. It’s a celebration of work when there is not enough of it, a day off when too many desperately seek a day on.
America has commemorated two Labor Days since this brutal recession began near the end of George Bush’s presidency in December of 2007. Now the relentless high unemployment, the ever-rising foreclosures, the unremitting wage and benefit take-backs have replaced American optimism and enthusiasm with fear and anger.
Happy Labor Day.
On this holiday, we can rant with Glenn Beck, kick the dog and hate the neighbor lucky enough to retain his job. Or we can do something different. We can join with our neighbors, employed and unemployed, our foreclosed-on children, our elderly parents fearing cuts in their Social Security lifeline and our fellow workers worrying that the furlough ax will strike them next. Together we can organize and mobilize and create a grassroots groundswell that gives government no choice but to respond to our needs, the needs of working people.
We can do what workers did during the Great Depression to provoke change, to create programs like Social Security and achieve recognition of rights like collective bargaining. These changes were sought by groups to benefit groups. In a civil society, people care for one another. And America is such a society – one where people routinely donate blood to aid anonymous strangers, children set up lemonade stands to contribute to Katrina victims and working families find a few bucks for United Way.
The self-righteous Right is all about individuals pulling themselves up by their bootstraps. That proposition – the do-it-all- by-yourself-winner-takes-all philosophy – clearly failed because so many Americans are jobless, homeless and too penniless to afford boots.
Over the past decade, the winner who took all was Wall Street. The banksters gambled on derivatives and other risky financial tomfoolery and won big time. Until they lost. And crashed the economy. After the American taxpayer bailed them out, those wealthy traders returned to making huge profits and bonuses based on perilous schemes.
Still, they believe they haven’t taken enough from working Americans. They’re lobbying to end aid for those who remain unemployed in a recession caused by Wall Street recklessness. And they’re demanding extension of their Bush-given tax breaks. This is the nation’s upper 1 percent, people who earn a million or more each year, the 1 percent that took home 56 percent of all income growth between 1989 and 2007, the year the recession began.
Since 2007, 8.2 million workers have lost jobs. Millions more are underemployed, laboring part-time when they need full-time jobs, or barely squeaking by on slashed wages and benefits. Since the recession began, the unemployment rate nearly doubled, from 5 percent to 9.6 percent, and that does not include those so discouraged that they’ve given up the search for jobs, a decision that is, frankly, understandable when there are only enough openings to re-employ 20 percent of the jobless. Five unemployed workers compete for each job created in this sluggish economy.
And American workers weren’t prepared for this downturn, having already suffered losses in the years before it began. The median income, adjusted for inflation, of working-age households declined by more than $2,000 in the seven years before the recession started.
At the same time, practices like off-shoring jobs and signing regressive international trade deals contributed to the loss of middle class, blue collar jobs. A new report, “The Polarization of Job Opportunities in the U.S. Labor Market,” by the Center for American Progress and The Hamilton Project, says:
“The decline in middle-skill jobs has been detrimental to the earnings and labor force participation rates of workers without a four-year college education, and differentially so for males, who are increasingly concentrated in low-paying service occupations.”
The recession compounded that, the report says:
“Employment losses during the recession have been far more severe in middle-skilled white- and blue-collar jobs than in either high-skill, white-collar jobs or low-skill service occupations.”
What that means is high roller banksters are living large; lawn care workers and waitresses subsist on minimum wage, and working class machinists and steelworkers are disappearing altogether.
The researchers found the U.S. economy is increasingly polarized into high-skill, high-wage jobs and low-skill, low wage jobs. America is losing the middle jobs and with them its great middle class.
No wonder the rising anger in middle America.
But fury doesn’t solve the problem. This Labor Day, we must organize to save ourselves and our neighbors. We must stop America from descending into plutocracy. We must demand support for American manufacturing and middle class jobs. That means terminating tax breaks for corporate outsourcers, ending trade practices that violate agreements and international law and punishing predator countries for currency manipulation that subverts fair trade by artificially lowering the price of products shipped into the U.S. while artificially raising the price of American exports.
We must demand support for American industry, particularly manufacturers of renewable energy sources like solar cells and wind turbines that create good working class jobs, increase America’s energy independence and reduce climate change.
We must insist on policies that support the middle class, including preserving Social Security and Medicare, extending unemployment insurance while joblessness remains high, and enforcing the health care reform law so that every American worker and family can afford and is covered by insurance.
On this Labor Day, we should all have a picnic, invite neighbors, friends and family, and over hot dogs and potato salad, organize to save the American middle class.
Mobilize to end the gloom and restore American optimism.
For help: the Union of the Unemployed, the AFL-CIO, USW, Working America. Join the One Nation March for jobs Oct. 2 in Washington, D.C.
About The Author: Leo Gerard is the United Steelworkers International President. Under his leadership, the USW joined with Unite -the biggest union in the UK and Republic of Ireland – to create Workers Uniting, the first global union. He has also helped pass legislation, including the landmark Canadian Westray Bill, making corporations criminally liable when they kill or seriously injure their employees or members of the public.
Wednesday, June 2nd, 2010
Lawmakers Go After Employers Who Misclassify Workers as Contractors
Nearly three years ago, Warren, Ohio, Local 573 Business Manager Mark Catello found out the hard way how rampant is the illegal practice of misclassifying workers as independent contractors to circumvent labor law and cheat on taxes.
The local tried organizing cable workers at Baker Communications, a subcontractor for Time Warner Cable. Organizers got the majority of the 40-person unit to sign union authorization cards, but the National Labor Relations Board killed the unionization drive after agreeing with the company that most of its employees were independent contractors, making them exempt from the right to collectively bargain. “It’s a scam,” Catello said. “All the employees had to follow the company’s manual, wear the company’s uniform with the Baker Communications logo on it and follow their work schedule.”
San Francisco labor activists protest a construction contractor found guilty of cheating its employees out of wages and benefits.
Federal and state officials are now starting to aggressively crack down on employers who mislabel their employees as independent contractors—an act that cheats both taxpayers and workers out of billions of dollars.
According to Steven Greenhouse of the New York Times, more than two dozen states are stepping up their enforcement of employment laws by increasing penalties for employers who misclassify workers as contractors. And Congress recently introduced tougher legislation to punish lawbreakers.
The practice is extensive, says James Parrott, chief economist of the Fiscal Policy Institute in New York. He testified earlier this year before the state Senate that an estimated 10 percent of the state’s workers are misclassified as independent contractors.
According to the Bureau of Labor Statistics, that number has been estimated to be as high as 30 percent in some states. Lax enforcement of the rules has only encouraged the practice.
In 2007, the Government Accountability Office reported that 10 million workers were classified as independent contractors, an increase of more than 2 million in just six years.
Misclassification ends up costing federal and state authorities billions in lost revenue. Companies that report employees as independent contractors avoid paying Social Security, Medicare and unemployment insurance taxes.
But misclassifying workers also cheats workers out of their rights and benefits. Laws regarding overtime, workers’ compensation, sick days and minimum wage don’t apply to independent contractors.
“This denies many workers their basic rights and protections and means less revenues to the Treasury and competitive advantage for employers who misclassify,” Jared Bernstein told the New York Times. Bernstein is a noted economist and aide to Vice President Joseph Biden. “The last thing you want is to give a competitive advantage to employers who are breaking the rules.”
The practice is particularly common in trucking and some sectors of the construction industry. It is also found in the telecommunications industry, particularly in satellite dish and cable installation.
And it’s not just fly-by-night operations that are guilty. Corporate giants FedEx, Target and Comcast have all been sued for misclassifying workers.
Counting their workers as contractors has also proven to be an easy way for employers to prevent unionization.
‘Keeps Them From Joining a Union’
For Eighth District Organizer Bob Brock, a crackdown on industry violators is long overdue.
Brock has been trying to organize workers who install home satellite dishes for more than a year. Many of these workers—located mostly in Idaho, Montana and Colorado—endure long hours, low pay, draconian work rules and unsafe working conditions. But according to their employers—including Direct TV and Star West Satellite—they are their own bosses.
“Most of these (satellite) companies operate a whole separate wing, which they staff with what they call independent contractors,” Brock said. “But they have to follow the companies’ regulations, their work hours and use their equipment. What kind of boss is that?”
Brock says that the IBEW has been successful in getting many of these workers to talk with organizers, but until their job status is changed, they can’t legally form a union.
He says he has seen workplaces where two different workers are doing the exact same job, but one is labeled an employee while the other is an independent contractor. “It’s a selective way for the company to get out of paying benefits and taxes and to keep them from joining a union.”
Educating Workers on Their Rights
But the IBEW hasn’t given up on organizing the satellite sector. The Eighth District has started an organization—Satellite Techs Allied for a New Direction—which brings together satellite workers to improve their working conditions. Organizers help workers document what’s going on in their workplace so they have evidence to back up their claims that they are full-time employees.
STAND also helps misclassified workers with tax advice and how to avoid being preyed on by unscrupulous insurance agents who try to sell them overpriced liability policies. It’s a long-term strategy, Brock says, but the campaign is starting to pick up steam. “The word is spreading throughout the industry. A lot of them don’t know about their rights and they are hungry to find out.”
The campaign is now moving into lobbying mode, with organizers talking to state leaders about rampant abuses in the satellite installation industry. “This is a good time, because with the budget shortfalls, politicians are more eager to crack down on tax cheats,” Brock said.
Broadcasting is another industry where the practice has become widespread. “Many broadcast technicians will work for one of the big networks, be considered an employee, but then go work for another network, do the exact same job, and all of a sudden they become contractors,” said Broadcasting Department Director Ro Wratschko.
Many smaller production companies are also notorious for misclassifying employees to give them unfair advantage over local signatory companies. “They are bidding for the same work as our union shops but they are illegally getting out of paying the same taxes we do, so they have a leg up,” he said.
While not as rampant in the electrical construction industry as it is in other trades, many inside locals have confronted nonunion contractors trying to pass off their employees as contractors. Last fall, Dublin, Calif., Local 595 helped bring to light one Bay Area contractor who cost the state and her employees millions of dollars by illegally misclassifying them.
“It’s the primary means for nonunion contractors to get out of their responsibilities to their employees and try to cut into our market share,” said Kirk Groenendaal, Special Assistant to the International President for Membership Development.
Federal prosecution of companies that misclassify their workers as contractors was nonexistent under the Bush administration, says Political and Legislative Department International Representative Dan Gardner, but the tide is turning.
President Obama has promised to hire an additional 100 investigators to look at companies accused of misclassifying workers and the Internal Revenue Service announced in February that it was launching a three-year nationwide investigation of the practice.
On Capitol Hill, Massachusetts Sen. John Kerry (D) has introduced the Taxpayer Responsibility, Accountability, and Consistency Act of 2009—with Rep. Jim McDermott (D-Wash.) sponsoring a House version—which beefs up enforcement of worker classification regulations and closes tax loopholes used by unscrupulous employers.
In April, Ohio Sen. Sherrod Brown (D) introduced a similar bill—the Employee Misclassification Act—that focuses on tougher enforcement of the Fair Labor Standards Act.
The Department of Labor also recently announced tougher regulations of worker classification regulations, calling on employers to disclose to their employees their work status.
State authorities are also intensifying their crackdown. In Iowa, a six-month investigation by the labor department recently found more than 100 companies guilty of misclassifying employees, while in California, Attorney General Jerry Brown is aggressively going after lawbreakers, recently filing a $4.3 million lawsuit against a construction company with several public works contracts that he says cheated workers out of wages.
In Nebraska, a bill is under serious consideration that would target trucking and construction companies that abuse the independent contractor label.
Gardner said that the IBEW is working closely with NECA contractors and other businesses to push Congress to endorse Sens. Kerry’s and Brown’s legislation to crack down on lawbreakers. “It’s wrong for workers, wrong for taxpayers and wrong for the businesses that play by the rules and follow the law.”
This post originally appeared in IBEW.org on June 2, 2010. Reprinted with permission.
About the Author: Alexander Hogan is Communications Specialist for the IBEW.