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Posts Tagged ‘Trump’

Workers' lives take a back seat under Donald Trump

Wednesday, January 10th, 2018

America’s bad bosses can’t help but get the message from the Trump administration: your workers’ safety is not a priority.

In the months after President Donald Trump took office, the Occupational Safety and Health Administration lost 40 inspectors through attrition and made no new hires to fill the vacancies as of Oct. 2, according to data obtained through a Freedom of Information Act request.

The departing inspectors made up 4 percent of the OSHA’s total federal inspection force, which fell below 1,000 by early October.

In 2015, OSHA only had enough inspectors to inspect workplaces once every 845 years, according to the AFL-CIO’s Death on the Job report, which meant that most workplaces would only see an inspector after something terrible happens. At this rate, even that won’t be a sure thing in a few years.

This blog was originally published at DailyKos on January 8, 2018. Reprinted with permission. 

About the Author: Laura Clawson is labor editor at DailyKos.

Trump took credit for airline safety in 2017. What about the surge in coal miner deaths?

Wednesday, January 3rd, 2018

President Donald Trump is taking credit for what a new study is calling the safest year on record for commercial aviation. The president, however, is refusing to take responsibility for what his mine safety agency is saying was a year where almost twice as many coal mine workers died on the job than the final year of the Obama administration.

On Tuesday morning, Trump tweeted: “Since taking office, I have been very strict on Commercial Aviation. Good news — it was just reported that there were zero deaths in 2017, the best and safest year on record!”

Over the past 20 years, the average number of airliner accidents has shown a steady and persistent decline, thanks to “safety-driven efforts” by international aviation organizations and the aviation industry, according to the Aviation Safety Network, an independent research group. Nowhere in the analysis did the researchers mention efforts by the Trump administration as a reason for the airline safety improvement.

In the coal mining sector, data from the Trump administration’s Mine Safety and Health Administration (MSHA), the federal government’s mine safety agency, show coal mining deaths nearly doubled in 2017. But unlike the aviation statistics, Trump isn’t taking any personal responsibility for the coal mining deaths. What’s more, he tapped a former coal executive with a record of safety violations to head MSHA.

The death of a coal miner in Fayette County, West Virginia, on December 29 brought the total number of U.S. coal mining fatalities in 2017 to 15, according to MSHA’s website. Eight of the 15 coal mining deaths last year occurred in West Virginia. The remaining deaths occurred in Kentucky, Montana, Wyoming, Alabama, Pennsylvania, and Colorado. In the previous year, under President Barack Obama, the coal industry saw its lowest number of coal mining fatalities to date, with eight deaths recorded across the country.

A number of factors could have led to the rise in coal mining deaths. The nation saw an uptick in coal production last year. Estimated coal production for the first 11 months of 2017 totaled 719 million short tons, 54 million short tons, or 8 percent, more than production for the same period in 2016. For 2018, though, the U.S. Energy Information Administration is forecasting a drop in production due to a decrease in exports and slower domestic demand.

Employment in the coal mining sector reached about 51,700 in September, about 3,000 more than the year before. But since then, the sector’s job numbers have declined slightly each month.

Under the Trump administration and a Republican-controlled Congress, mining companies could be taking more risks under the assumption that enforcement will be more lax. The House of Representatives wants to cut MSHA’s coal enforcement budget by $11 million, or almost 7 percent, after cutting the division’s budget by $7.9 million in FY 2017.

During his presidential campaign, Trump reached out to coal miners, telling them that he would bring jobs back to their communities, despite widespread consensus that coal will continue to decline in the long run. In return, the miners have put a lot of faith in Trump to fulfill his promise.

As part of his focus on coal, Trump selected David Zatezalo, a former coal mining executive who has faced criticism over his company’s safety record, to serve as the head of MSHA. Zatezalo, who was confirmed by the Senate in November, retired in late 2014 as chairman of coal producer Rhino Resources after serving in various top posts at the company.

Zatezalo was head of Rhino Resources when the company was issued two “pattern of violations” letters from MSHA over safety and health issues at its mines in West Virginia and Kentucky. At the time, the Obama administration was seeking to improve enforcement of mine safety following the Upper Big Branch Mine disaster.

Last month, the Trump administration also announced plans to examine whether it should weaken rules aimed at fighting black lung among coal miners, a move the administration says could create a “less burdensome” regulatory environment for coal companies.

Most coal miners understand the increased dangers they face when the government steps back from safety enforcement. But the miners also see limited employment alternatives, unless they choose to uproot their families and relocate.

“We have all witnessed friends and family fight in vain for compensation after suffering from permanent injuries and black lung,” Nick Mullins, an author and former coal miner, wrote in an op-ed for HuffPost last month. “Few people seem to realize the lack of choices miners face. They do not realize that many miners would jump at the chance to earn a decent living without risking their life and sacrificing their health.”

This article was originally published on January 2, 2018. Reprinted with permission. 

About the Author: Mark Hand is a climate and environment reporter at ThinkProgress. Send him tips at mhand@americanprogress.org

OSHA Is Bleeding: Shrinking Government and Killing Workers

Monday, January 1st, 2018

Washington Post reporters Lisa Rein and Andrew Ba Trim published an excellent front page article today chronicling Donald Trump’s largely successful effort to shrink the federal government: “By the end of September, all Cabinet departments except Homeland Security, Veterans Affairs and Interior had fewer permanent staff than when Trump took office in January — with most shedding many hundreds of employees.”

Trump hasn’t succeeded yet in passing a budget with significant cuts, so most of the reductions have come from hiring freezes, failure to hire political appointees, and increased retirements (accelerated by buy-outs) of disillusioned and frustrated career employees.

While some people who reflexively think that government is bad are cheering, the fact is that these reductions mean less protections for workers, the environment, consumers, communities, children, the poor and just about everything that makes life in this country “great.”

The Impact on OSHA and on Workers

But you’re not reading this to understand the national cataclysm; you want to know about the effects on workers and workplace safety and health.

Anti-government activist Grover Norquist was famously quoted as saying “I don’t want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub.”

But tragically, what we’re looking at is not just government being drowned in a bathtub, but more workers actually dying in a bathtub.

Because when it comes to workplace safety, cutting the bureaucracy means undermining enforcement, protection for whistleblowers, support for vulnerable workers and help for small businesses.  Some of OSHA’s regional staff state that because of the hiring freeze, OSHA’s enforcement and whistleblower programs are “falling apart at the seems.” The agency is “just bleeding.”

OSHA’s enforcement and whistleblower programs are “falling apart at the seems.” The agency is “just bleeding.”

When President Trump came into office almost a year ago, he implemented a government-wide hiring freeze. That freeze stayed in place at OSHA until recently, when Secretary of Labor Alex Acosta, apparently alarmed that OSHA inspection number had dropped precipitously in 2017, partially lifted the hiring freeze at OSHA, announcing in his opening remarks at a Senate hearing last month that “In August 2017, I provided OSHA with blanket approval to hire OSHA Compliance Safety and Health Officers (CSHOs), streamlining the hiring process to bring new OSHA staff on board in an expedited manner to ensure that OSHA has the necessary personnel to carry out its important work.”

But while it is true that Acosta lifted the hiring freeze for OSHA inspectors, the process is anything but streamlined from what I hear from OSHA staff. Approvals for CSHO hiring are trickling out at a snail’s pace, barely keeping up with retirements.

Second, the agency doesn’t live by CSHOs alone.

I discussed these problems with Lisa Rein, part of which she related in today’s article:

In some agencies, the number of people leaving has been crippling, according to former officials. At the Occupational Safety and Health Administration, a wave of recent retirements has depleted the managerial staff at the enforcement agency’s 70 field offices, said Jordan Barab, who was a top OSHA official in the Obama administration. In all, the agency shed 119 permanent workers by the end of September, a 6 percent drop, personnel data shows.

“It’s starting to create major problems,” Barab said. Enforcement actions must be reviewed by supervisors in multiple offices, he said, and if too many months pass, they can be thrown out. “You can’t run an enforcement agency with no managers.”

As usual, with interviews, that was only a small part of how I described the impact on OSHA.

OSHA is, first and foremost an enforcement agency. That means that in order to ensure safe workplaces, the agency must have sufficient staff to inspect workplaces to ensure that employers are in compliance with OSHA standards and other safe workplace procedures. And, ideally, the agency should have sufficient, up-to-date standards to provide a floor for workplace safety. The agency also has a robust compliance assistance program which formerly had a Compliance Assistance Specialist (CAS) in every one of OSHA’s 100 regional and area offices. Because of budget cuts over the past several years, however, many OSHA offices no longer have CASs.  OSHA also needs enough whistleblower investigators to ensure that workers are allowed to exercise their health and safety rights without fear of retaliation.

OSHA has never had enough staff to perform all of those functions adequately. The AFL-CIO reports that if OSHA were to inspect every workplace in the nation just once, it would take 159 years. And the situation has gotten significantly worse. Since 1980 when Ronald Reagan was elected, the number of workers in the economy has increased by 50% and the number of OSHA inspectors has shrunk by more than 45%. OSHA had 5.3 compliance officers per million workers in 2016, compared with 14.8 in 1980.

So where are we today and what is the impact of Trump’s efforts to shrink government?

Just hiring inspectors only addresses part of the problem. The hiring freeze continues for OSHA managers, administrative staff, whistleblower investigators and others. And this presents a major problem for workers.

As I said above, OSHA has only 6 months to complete an inspection. One day more, and the gets thrown out. Now, I’m not too worried about OSHA cases being thrown out for running over the deadline. I’m more concerned about the quality, speed and scope of the investigations. Too much work and too little staff will mean a number of things, none of them good:

  • In a quest to keep the inspection numbers up, OSHA inspectors may focus on the “easy” cases. A construction site, for example, will yield more and faster inspections and citations than a workplace violence case, a major chemical release or a case involving musculoskeletal injuries.
  • Just hiring CSHO’s and not filling managerial, administrative or legal staff just moves the bottleneck from the inspection itself, up the ladder.The larger and more complicated a case is, the more levels of OSHA (and Solicitor) review it must go through, and the greater likelihood that it will be challenged in court. If OSHA doesn’t have all of its ducks in a row, the case will be lost and if cases are lost in court because there isn’t enough managerial or legal staff to conduct a thorough review, it’s not just a legal problem, it’s a safety problem. The hazards will not  be eliminated and more workers will get injured, ill or killed.
  • And the failure to hire administrative staff means that instead of inspecting workplaces and managing cases, CSHO’s and supervisors spend their shrinking time inputting data, filing reports and doing all of the other administrative work that would better be done by administrative staff. Not exactly a good use of taxpayer dollars.
  • And even if cases aren’t dropped for failure to meet the 6-month deadline, they will take longer to issue. And being as employers don’t have to fix the problems in their workplaces until the citations are issued, workers will be exposed to dangerous conditions for longer.
  • A shortage of inspectors means that many offices only have time to react to worker fatalities and hospitalizations after they happen, rather than putting resources into pro-active planned (or programmed) inspections of high-hazard workplaces.
  • Retirements don’t happen evenly across the agency. Some area and regional offices are hit much harder than others. But a hiring freeze reduces OSHA’s ability to staff up  in those offices that are having the most shortages.   Either the workers covered by those offices are under-served, or staff has to be temporarily assigned to the problem offices, further increasing the agency’s budget problems.

The Post also notes that the Department of Labor “declined to comment on the current number of OSHA managers but said that new inspectors have been hired in recent months, helping increase the number of safety and health inspections in 2017 — the first such boost in five years.”

This is patently false. OSHA hasn’t had a budget increase since 2010,  and I can’t find anyone inside or outside of OSHA who can tell me what they’re talking about.

Whither The Whistleblower Program?

The hiring freeze also remains for whistleblower investigators. About 60% of OSHA whistleblower cases address retaliation against a worker for exercising their health and safety rights, the other 40% fall under 21 additional whistleblower laws that Congress has given OSHA to enforce — everything from environmental laws, rail safety, nuclear power plants, the Sarbanes-Oxley Act and many others.

Until the Obama administration, the whistleblower program had been neglected stepchild at OSHA — underfunded and ignored. Enormous progress was made over the 8 years of the Obama administration, creating a separate directorate, a separate budget item, making it easier to file complaints on-line, increasing staff, modernizing procedures, re-organizing management and reducing the backlog of open cases. Nevertheless, even with significant progress, the program remains troubled and underfunded, and the continuing hiring freeze threatens much of the progress made during the Obama administration with the backlog of open cases rising back to unacceptable levels.

Agencies on Death Row

The Post also discusses the impact of Trump’s — as yet unsuccessful — plan to eliminate the Chemical Safety Board. The reports of the death of the CSB is most likely premature as both the House nor the Senate budget bills fully fund the agency for FY 18, but the threat nevertheless has an effect. Aside from the obvious hit on the staff’s morale, Board Chair Vanessa Sutherland describes how the CSB’s tiny staff has to spend time planning for its own demise, even while conducting its normal business of investigating chemical plant incidents.  And although it’s not raised in the article, it will inevitably make it harder to attract (or retain) talented staff while the Sword of Damocles weighs over its head.

Conclusion

So, you might ask, how does any of this make sense?

Fourteen workers a day were killed in the workplace last year, and the number of workers killed annually has gone up for the last three years.  Workplace deaths and injuries are estimated to cost between $250 billion and $360 billion a year, and OSHA’s current annual budget is a measly $552 million.

The bottom line is that shrinking government is not just about reducing employees and “bureaucrats,” and saving taxpayer dollars; it means limbs severed and lives lost.

Post journalist Juliet Eilperin in a short article in today’s “2018: The Year in Preview” section predicts that “Trump’s war on the bureaucracy will hit some limits — it’s hard to shrink government and also keep it operating.”

But that doesn’t make me feel better.

Because maybe they don’t want to keep it operating.

This blog was originally published at Confined Space on December 31, 2017. Reprinted with permission.

About the Author: Jordan Barab was Deputy Assistant Secretary of Labor at OSHA from 2009 to 2017, and spent 16 years running the safety and health program at the American Federation of State, County and Municipal Employees (AFSCME). He has also worked for the House Education and Labor Committee, the Chemical Safety Board, the AFL-CIO and an earlier stint at OSHA during the Clinton administration.

2017 was a year of eroding workers’ rights

Thursday, December 28th, 2017

There have been a series of victories for labor rights in recent years. Graduate student workers at private colleges and universities now have the right to unionize. In New York, employers are no longer allowed to ask for an employee’s salary history — a question that often hurts women and people of color. And the Fight for 15 has scored wins in cities across the country.

But the Trump administration stands in the way of much of the progress labor activists are demanding. It may not be as noisy or ripe for attention-grabbing headlines as Betsy DeVos’ education department or Scott Pruitt’s Environmental Protection Agency, but Alexander Acosta’s labor department has rolled back a number of key Obama-era labor advances.

“Acosta is not a bomb-thrower,” said Jeffrey Hirsch, law professor at University of North Carolina at Chapel Hill. Unlike some of Trump’s other less traditional choices for agency heads, Acosta had already been confirmed by the Senate for three previous positions and was considered a safe choice for labor department secretary.

Still, it’s clear the department is now under a Republican administration.

The National Labor Relations Board (NLRB), which enforces fair labor practices, has an employer-friendly majority. The General Counsel of the NLRB is Peter Robb, a lawyer who management-focused firm Jackson Lewis wrote would “set the stage for the board to reverse many of the pro-labor rulings issued by the Obama board”. The Senate also confirmed to the NLRB William Emanuel, whose nomination was supported by corporate donors and industry groups like the National Retail Federation, U.S. Chamber of Commerce, and National Restaurant Association. Emanuel’s work previous focused on union avoidance tactics and among his former clients were Amazon, Target, Uber, and FedEx.

With these new additions, the Department of Labor has been busy dismantling protections for workers. Here are some of the biggest ways the Trump administration rolled back workers’ rights in 2017:

Less accountability for corporations like McDonald’s

One of the labor rollbacks that gained the most attention this year was the board’s decision to overturn the new joint employer standard that was supposed to make it easier for corporations to be held accountable for unfair labor practices at their franchises. Labor advocates expected the decision for some time after the department rescinded guidance that defines who a joint-employer is.

The Obama administration’s standard on joint employers went beyond simply looking at who sets wages and hires people, and considered a worker’s “economic dependency” on the business. McDonald’s has tried to avoid responsibility for violations like wage-theft for years. In 2016, McDonald’s settled a wage-theft class action and released a statement that said it “reconfirms that it is not the employer of or responsible for employees of its independent franchisees.”

“Under the previous rule, you only needed to show [McDonald’s] had a theoretical amount of control. They reserve the right to control terms and conditions of work and controlled those conditions in an indirect manner like setting policies that other companies have to follow,” Hirsch explained. “The new case has said that no, you need actual direct control. When push comes to shove, it’s a matter of evidence and how much proof you have, so you may well still have a case against McDonald’s but you’re going to have to show that there is more actual control.”

Reduced protections for quality investment advice

In August, the Labor Department said it would like to delay a rule that would require financial advisors to act in the best interest of their customers and their retirement accounts. According to a federal court filing, the department wanted to delay implementation of the rule to July 2019. The full implementation of the rule is currently set for January 2018.

There are two standards investors have to be aware of right now: the fiduciary standard and suitability standard. A financial adviser operating under what is called the “suitability standard” is only required to make sure a client’s investment is suitable for the client’s finances, age, and risk tolerance at that point in time, but they don’t have a huge legal obligation to monitor the investment for the client. Under the fiduciary standard, an adviser must keep monitoring the investment and keep the customer’s overall financial picture in mind. In addition, advisers must disclose all of their conflicts of interest, fees, and commissions under the fiduciary standard. Right now, it’s easier for advisers to push investments that will make them money but are not necessarily in clients’ best interest, said Paul Secunda, professor of law and director of the labor and employment law program at Marquette University Law School.

“That rule has been substantially cut back, though how far back we’re still waiting to see. The current admin is in a holding pattern right now and my sense is that it could be cut back fairly dramatically even further,” Secunda said.

None of these labor department actions have been good enough for the financial industry, however. Plaintiffs in a lawsuit that included the Securities Industry and Financial Markets Association, the Financial Services Institute, the Financial Services Roundtable and the U.S. Chamber of Commerce, sent a Dec. 8 letter to the U.S. Court of Appeals for the Fifth Circuit. The plaintiffs said the delay of regulation shouldn’t hold up their appeal, where they argue the department does not have the authority to promulgate the rule, according to InvestmentNews.

Reduced worker safety

Experts on labor violations and the Occupational Safety and Health Administration told ThinkProgress they were concerned about how OSHA would respond to Hurricanes Harvey and Irma, especially since the Trump administration has slashed worker safety rules from the Obama administration. 

Trump’s OSHA has left behind regulations on worker exposure to construction noise, combustible dust, and vehicles backing up in factories and construction sites, according to Bloomberg BNA. It also abandoned a rule that would change the way the agency decides on permissible exposure limits for chemicals. The July regulatory agenda did not list any new rule-making. The president’s 2018 budget would have killed OSHA’s Chemical Safety Board, which looks into chemical plant accidents, as well as the Susan Harwood grant program, which benefits nonprofits and unions that provide worker safety training.

“OSHA is taking a turn we usually see during Republican administrations, which means a lot less inspections and enforcement and a lot more trying to get employers to self-regulate or voluntarily comply which has not really worked that well historically,” Secunda said. “People who participate in these voluntary participation programs are usually employers who are already in compliance and those who continue to be bad actors are not really impacted by these voluntary programs. OSHA is about to be run by corporate America, which is obviously not good for employees.”

Deciding to let go of Obama-era overtime rule

In July, the labor department moved to roll back an Obama administration rule that would have expanded the number of workers eligible for overtime pay by 4.2 million. The department has not appealed a U.S. District Court in Texas that gave business groups the temporary injunction they wanted.

The current threshold for overtime pay is at just $23,660 a year, and the Obama-era rule would have nearly doubled that. In 1974, 62 percent of full-time salaried workers had a salary that allowed them to be eligible for overtime, but today, only 7 percent of full-time salaried workers earn a salary below this level, according toDavid Weill, dean of the Heller School for Social Policy and Management at Brandeis University who headed the Wage and Hour Division of the department during the Obama administration.

Referring to Acosta, Weill wrote in U.S. News, “Failure to appeal this flawed decision will leave millions working long hours with low pay and abrogate his responsibility to protect the hardworking people he and the Trump administration profess to care so much about.”

Labor department focus on ‘harmonious workplaces’

In one of the NLRB’s less discussed decisions this month, it overruled the Bush-era standard Lutheran Heritage Village-Livonia. This standard went into further detail on whether facially neutral workplace rules, policies, and handbook provisions could unlawfully interfere with Section 7 of the National Labor Relations Act. (Under Section 7, it’s unlawful for employers to interfere with employees’ organizing rights.) The NLRB provides the example of employers threatening, interrogating, or spying on pro-union employees or promising employees benefits if they stay away from organizing as unlawful activity under Section 7.

Under the 2004 standard, employers could have the violated the National Labor Relations Act by instituting workplace rules that could be “reasonably construed” to prohibit workers from accessing these rights even if the employers don’t explicitly prohibit the activities.

Hirsch said he was surprised by the decision to reverse a Bush-era decision. “To me, it seems like they’re doing more than they needed to, which makes me wonder if they’re trying to make a point.”

Hirsch added that the decision appeared to carve out certain types of rules, such as a civility code in the workplace, and say they were permissible. The decision referred to employers who wanted “harmonious workplaces” and cast any opposition to such a requirement to be impractical, but Hirsch said there needs to be a balance in NLRB decisions between clarity and flexibility.

“That can be problematic bevause they’re rules that depending on the history of what has happened in that particular workplace and it could actually be viewed as fairly chilling for those employees,” Hirsch said. “… Labor and management relations aren’t always harmonious. In fact, they are designed not to be in a  lot of ways. Sometimes harsh language is used by both sides and sometimes that is OK, or we’re willing to tolerate that as part of the collective bargaining process rather than having violent strikes, like we did before the NRLA.”

‘Micro-unions’ are out of luck

The NLRB made another business-friendly decision this month when it decided that a unionized group of 100 welders and “rework specialists” at a manufacturing company with thousands of workers was improper. This means it will be easier for employers to oppose what are referred to as “micro unions” even though it can be advantageous for workers to organize this way. The decision went against eight federal appeals court rulings, according to Reuters.

LGBTQ workers’ not protected by Title VII

There is ongoing debate over whether LGBTQ workers have rights to ensure that they are treated fairly in the workplace under Title VII, part of the Civil Rights Act of 1964. Title VII prohibits employers from discriminating against employees on the basis of sex, race, color, national origin, and religion. In July, the Department of Justice undermined rights for LGBTQ people when it filed a brief arguing that prohibition of sex discrimination under federal law does not include the prohibition of discrimination on the basis of sexual orientation.

The Trump Labor Board Just Made It Harder for Fast-Food Workers to Hold Corporate Bosses Accountable

Wednesday, December 20th, 2017

On December 14, the National Labor Relations Board (NLRB) overturned a 2015 policy that had made it easier for workers—particularly fast-food workers—to unionize and challenge their employers over unfair labor practices.

The Obama-era standard sprung from a 2013 case involving workers attempting to unionize at a recycling plant in Milpitas, Calif. The recycling company, Browning-Ferris Industries, owned the building but used a small staffing agency called Leadpoint to provide and manage workers. The local Teamsters union was trying to organize the employees, but it didn’t want to merely negotiate with Leadpoint: It wanted Browning-Ferris to be considered a joint employer and party to any labor contract. A regional director determined that Leadpoint was the sole employer, but the Teamsters requested a review, and the NLRB’s general counsel sided with union in a 3-2 vote.

The vote was hailed by unions and labor advocates for making it more difficult for corporations to distance themselves from certain legal violations—and for strengthening the bargaining power of subcontracted gig-economy workers.

The Browning-Ferris decision was also good news for fast-food workers and organizations like Fight for $15. Most fast-food companies use a franchising model, and Browning-Ferris made it easier for workers to hold corporations responsible for wage theft and union busting at individual locations. In 2014, the NLRB’s general counsel had already ruled that the McDonald’s Corporation could be considered a joint employer in various labor cases brought against the company’s franchises. But Browning-Ferris provided an entirely new legal dimension to the proceedings.

The Browning-Ferris decision was predictably criticized by industry groups, which immediately launched an all-out assault on the new rule. International Franchise Association lobbyist Matt Haller declared that the decision was “a knife-to-the throat issue,” pro-business organizations pressured Congress to block its implementation in their subsequent spending bill, and Browning-Ferris Industries challenged the decision in a federal appeals court.

Industry nervousness ended up being alleviated by the surprising election of Donald Trump, who successfully tipped the NLRB back to a Republican majority in September—and has sought to overturn the labor victories which occurred under his predecessor. The Trump administration recently ended Obama’s extension of federal overtime pay, and it’s preparing to eradicate a 2011 rule which protects the tips of wait staff. All of Trump’s NLRB appointees were connected to anti-union policies at their previous positions, but the confirmation process was fast-tracked, and they easily made it through GOP-controlled Senate. In overturning the Browning-Ferris precedent, the board claimed that the 2015 decision was responsible for “upending decades of labor law precedent and probably centuries of precedent in corporate law.”

In a statement, National Employment Law Project executive director Christine Owens called the reversal “just one more example of the Trump Administration favoring corporations over working people.”

“In this economy, employers are increasingly subcontracting out vital parts of their business to other contractors and/or using temporary employment agencies to fill vital positions,” said Owens. “The Browning-Ferris decision recognized that in these arrangements, companies that contract out work may still retain control over the conditions and standards that govern the work and how the workers doing the jobs are treated … the Trump NLRB has decided to let them off the hook.”

While there is no evidence that Trump was directly involved in the case, we do know that one his companies was impacted by the 2015 decision. In May 2016, catering workers at the Trump National Doral golf resort in Florida won a $125,000 settlement after suing for unpaid wages. As a result of the joint-employer liability, the workers were able to hold Trump Miami Resort Management responsible, even though an outside staffing agency had hired them.

It is likely that the Trump administration will soon work to overturn a number of additional Obama-era NLRB decisions. To the surprise of many, the board ended up adapting to the complexities of a changing economy under Obama and forcefully asserted the rights of workers in a number of important votes. Recent NLRB decisions have given graduate students the right to unionize at private universities, increased the bargaining power of workers at charter schools and made it easier for smaller groups of workers to unionize at companies. However, the term of the NLRB’s Republican chairman, Philip A. Miscimarra, ended just days after the board’s vote. Trump will at least have to wait until the Senate confirms his next nominee and reestablishes the Republican majority before he’s able to undo any of these changes.

This article was originally published at In These Times on December 21, 2017. Reprinted with permission.

About the Author: Michael Arria covers labor and social movements. Follow him on Twitter: @michaelarria

How Business Unionism Got Us to Janus

Friday, November 10th, 2017

In September, the Supreme Court agreed to hear Janus vs. AFSCME, a case that has the potential to undermine public sector unions by curtailing unions’ right to charge non-members an “agency fee.” This fee covers the protection and services the union is obligated to provide all employees in the bargaining unit.

Many labor leaders and pundits have identified unions’ loss of revenue as the most dire consequence of an unfavorable ruling in the Janus case. Others have pointed out that the forces behind Janus don’t only aim to weaken public employee unions: they are seeking to destroy the public sector and public ownership of resources across the board.

However, the Right’s deeper, darker strategic purpose has been mostly ignored, even by unions: Janus fits in with a larger project, led by the State Policy Network—a network of right-wing think tanks—that aims not only to “defund and defang” unions but to “deliver the mortal blow to permanently break” the Left’s “stranglehold on our society.”

Anyone who cares about democracy and the social and economic well-being of workers has a stake in how unions will respond to the Court’s decision. And with Trump-appointee Neil Gorsuch now sitting on the bench, it appears likely that the ruling will not go in labor’s favor.

The real crisis at hand

The tacit assumption of Janus supporters and foes alike is that, when faced with a choice between being a union member and paying dues or not, significant numbers of members will bolt, and non-members who have been paying “agency fees” will not join. Because unions understand the danger posed by Janus as largely financial, they have focused on saving money, cutting staff and pursuing mergers. Some have also determined that they must be proactive to stave off mass desertions and are reaching out to members to solidify their support as dues payers.

Belt-tightening and talking to members may temporarily fortify union apparatus, but this approach ignores the question Janus demands we ask: Why is labor predicting members will desert their unions and that agency-fee payers will refuse to join?

These assumptions labor holds around Janus exemplify the real crisis unions confront—one not often discussed, even behind closed doors. In defining their purpose primarily as protecting members’ narrowly conceived economic interests and shaping the organization to function like a business, unions construct a very limited role for the workers they represent. Under this status quo, members are generally considered passive, with limited authority and voice. Their sole “power” is to pay dues and cast votes in what are generally uncontested elections for officers.

The right-wing forces behind Janus have used their frighteningly vast financial resources to exploit this weakness. The Janus brief, filed by the National Right to Work Foundation on behalf of Illinois public employee Mark Janus, articulates anti-union arguments familiar to any union activist who has tried to recruit skeptical co-workers. The plaintiff’s claims interrogate AFSCME’s purposes, its presence as a political force and whether it serves as a collective voice for working people on the job and in the larger society.

The brief reads:

Janus objects to many of the public-policy positions that AFSCME advocates, including the positions that AFSCME advocates for in collective bargaining. For example, he does not agree with what he views as the union’s one-sided politicking for only its point of view. Janus also believes that AFSCME’s behavior in bargaining does not appreciate the current fiscal crises in Illinois and does not reflect his best interests or the interests of Illinois citizens.

In building support for Janus, the Right has questioned the meaning of union membership while also criticizing public employee unions’ engagement in politics. Unions have frequently been ineffective in responding to the charge that they are just another special interest group, buying politicians for their members’ benefit. Unions have disarmed themselves in this assault by adopting the mentality and tactics of special interests. Labor has by and large accepted the Right’s definition of the contest (winning over “friendly” politicians in either party), the weapons (campaign donations), and the opponents (workers in other countries as our competitors). In doing so, labor has turned its back on its unique and most powerful resource—an informed, empowered and mobilized membership.

Instead, labor has countered the Right’s arguments on narrow grounds, railing against “free riders,” who they say will require unions “to represent non-members, who would be paying nothing at all, passing that burden off to dues-paying members.”

But this argument has little resonance to workers who already feel they are not well-represented. Like Mark Janus, they don’t feel their voices count. The “union” exists apart from them, with staff and officials insulated from even hearing, let alone responding to, members’ opinions and needs. The economic payoff from union dues can be hard to see when your paycheck hasn’t increased or in some cases, has decreased, despite your union having bargained in your name.

And this argument also avoids addressing the larger case made by the Right: that joining a union is not in workers’ best interest. The Right has confused workers by selling an individualistic, competitive ideology. And unions have been too slow to address why this ideology is harmful and antithetical to principles of collective action and solidarity. As others have observed, organized labor has by and large forgotten the grammar and vocabulary of class struggle.

From “it” to “we”

Though we shouldn’t adopt their methods or mentality, labor can learn a great deal from the Right’s victories. To move from defense to offense, labor needs to develop a new mindset. The strategies being discussed to avoid disaster post-Janus reflect many unions’ unwillingness to reimagine themselves.

One of these strategies is to eschew the legal responsibility to be “exclusive representative” of the bargaining unit, thereby creating competition between unions. Multiple unions representing workers for a single employer is the norm in other countries, where unions are allied with political parties. And some might consider it an idea worth pursuing. But encouraging competition among unions is a disaster, as Chris Brooks demonstrates in a close study of what occurred in Tennessee when an NEA affiliate lost exclusive representation. Workers turn against one another, viewing one another as rivals. Company unions, masquerading as professional groups that offer low insurance rates, compete, successfully, against traditional unions.

Is a “Workers’ Bill of Rights” an answer to Janus and the anticipated loss of collective bargaining in more states, as has been proposed in this publication? This is an interesting strategy but its limitation is that it’s a legalistic solution, not a political one. It doesn’t speak to the reasons workers choose not to join unions when they have that right, or to why they vote them down in elections.

Further, as Nelson Lichtenstein points out, the “rights discourse” is limited by being individual. What makes unions unique is that they represent members’ individual interests through struggle for their collective interests. Moreover, such a bill of rights ignores social oppression that workers experience on the job and separates their lives and rights outside the workplace from those they have inside. This strategy’s major flaw is not in what it tries to do but that it substitute for labor’s ability to critically analyze its losses.

One way to understand what adopting a new mindset would mean is looking to what occurred when the Caucus of Rank and File Educators (CORE), the reform caucus of the Chicago Teachers Union (CTU), won the union’s leadership. This caucus conceived of the CTU as a member-driven union that served members’ economic interests best when it supported social justice issues across the board. The newly elected leadership altered the way the union made its purpose evident and worked to make all the union’s operations support this new mindset.

CORE put the people it represented, employees of the Chicago Public Schools, at the center of its organizing, as Jane McAlevey puts it. A member-driven union gives people a reason to be union members and not agency fee payers. The goal? Shift the union from being an “it” to being “we.”

Democracy or bust

Putting workers at the center of organizing requires union democracy. It also demands moving towards international solidarity. What Kim Moody calls “labor nationalism” has weakened the unions by allowing workers to fall prey to Trump’s xenophobia. “’Buy American” is very close to “Make America Great Again.” Such slogans lead workers to become hostile to their counterparts in other countries rather than to the transnational corporations and elites that set economic policy.

Overcoming the fallout from Janus will require reimagining union membership by inverting hierarchical relations that replicate disempowerment on the job. To do this, unions need to grapple with a number of pressing questions:

Why have professional negotiators or paid staff sent to the bargaining table by national- or state-level unions rather than members who have been elected based on their leadership and ideas? Should union organizers be elected rather than being hired and appointed? Why aren’t members allowed to know how their representatives vote in the unions’ executive council meetings? Should endorsements for political office be made by the membership in a referendum? Should unions use “participatory budgeting” to have members decide priorities for where their dues are allocated? What is a member’s responsibility for recruiting and educating co-workers about the union?

Activists who have tried to recruit co-workers to their union know that changing people’s minds about joining can be slow and hard work. It requires listening and a deep commitment to union ideals because people often hold beliefs that are inimical to collective action. This work also requires having a union you trust will make a difference in the lives of its members. Like democracy anywhere, union democracy is difficult to obtain and fragile. It can be inefficient and it creates tensions. But it’s also the key to union power. Vibrant democracy and a mobilized membership are crucial to winning at the bargaining table and to enforcing any agreement in the workplace. Like all legal rights, the contract is only as strong as members’ knowledge of its provisions and willingness to protect it.

This is a moment of truth for unions and their supporters. We need to look in the mirror and see that Janus has two faces. The case could reduce organized labor to a shell, or it could be the start of a remarkable revitalization that draws strength from the widespread social movements that have emerged from both the Bernie Sanders campaign and Trump’s election. The latter is possible, but it will be up to all of us to make it a reality.

This article was originally published at In These Times on November 10, 2017. Reprinted with permission. 

About the Author: Lois Weiner is a professor of education at New Jersey City University who is on the editorial board of New Politics. Her newest book is The Future of Our Schools: Teachers Unions and Social Justice.

This Lawyer Helped Reagan Bust the Air Traffic Controllers Union. Now Trump Wants Him on the NLRB.

Friday, September 22nd, 2017

Former President Ronald Reagan had a long history of clashing with organized labor, but his most infamous moment came in 1981, when he busted the Professional Air Traffic Controllers Organization (PATCO) and fired more than 11,300 air traffic controllers who were on strike. This act weakened the power of U.S. unions and set the stage for an all-out assault on organizing rights.

Thirty-six years later, Reagan’s lead attorney in the air traffic controllers case is poised to make decisions about thousands of unfair labor practices throughout the country.

As anticipated, President Donald Trump has nominated the management-side labor attorney Peter Robb, of Downs Rachlin Martin in Vermont, to serve as general counsel for the National Labor Relations Board (NLRB). This is a four-year position, and the individual who holds it is responsible for investigating unfair labor practices. Obama administration general counsel Richard Griffin’s term expires this November and, if confirmed, Robb would take over the position.

In 1981, Robb filed unfair labor practice charges against PATCO on behalf of the Federal Labor Relations Authority (FLRA) after a court ruled that the air traffic controllers’ strike was illegal. The FLRA case led to the decertification of PATCO, and Reagan subsequently banned most striking workers from federal service for their rest of their lives.

Reagan’s move set a new precedent for employers, emboldening them to attack labor more openly. In an interview with The Real News Networkfrom 2014, Joseph McCartin, Georgetown history professor and author of Collision Course: Ronald Reagan, the Air Traffic Controllers, and the Strike that Changed Americaexplained the long-term impact. “When Ronald Reagan replaced the air traffic controllers [in] 1981, it was still not common for American employers in the private sector to deal with strikes by trying to break them and by permanently replacing workers who’d gone out on strike,” said McCartin, “Employers saw that Reagan was able to do this and, in effect, get away with it. Many private-sector employers took a similarly hard line when workers went out on strike in the private sector.”

Robb’s connections to union busting certainly don’t end with the landmark PATCO case. In 2014, he was hired by the Dominion Nuclear power plant when the International Brotherhood of Electrical Workers (IBEW) began organizing workers. The Downs Rachlin Martin website contains a blurb boasting that Robb “represented a major national corporation in a National Labor Relations Board representation case proceeding, which had 34-days of hearing over 3 months to resolve 80 contested classifications covering hundreds of employees.”

In an interview this September, John Fernandes, a business manager for IBEW Local 457, told Bloomberg BNA that Robb represented used “scorched earth” tactics to thwart the organizing efforts. Fernandes says the plant added workers to the proposed unit in order to water down the union vote and sent videos of managers explaining the dangers of unionizing to the homes of employees. Ultimately, the plant was able to add more than 150 workers to the original petition and defeat the organizing drive.

“[Robb] handled most of the direct examinations, and his witnesses were well-schooled in advance—he’d ask one question and they’d go on forever,” Fernandes told Bloomberg BNA. “I was at a disadvantage, not being an attorney, but [the legal fees] would’ve been overwhelming for our local to pay … we certainly viewed it as union busting—it was a very long case.”

Robb also has previous connections to the NLRB. He worked as an NLRB field attorney in Baltimore during the late 1970s. He returned to the agency in 1982 as a staff lawyer and chief counsel for former member Robert Hunter. As a Republican, Hunter was an important ally to then-Chairman Donald Dotson, a staunchly anti-union member. In 1985, Rep. Barney Frank (D-Mass.) told The Washington Post that Hunter had been the, “most loyal supporter of Donald Dotson in the transformation of the NLRB into a fundamentally anti-union entity.”

More recently, Robb’s firm harshly criticized the Obama-era NLRB, as captured in a slideshow compiled by Robb and Downs Rachlin attorney Timothy Copeland Jr. The presentation took aim at some of the pro-labor positions made by the NLRB under the previous administration. “The [Democratic] NLRB majority continues to narrowly define NLRB supervisory status, sometimes defying all common sense,” one slide reads. New Republican members are “likely to agree that the Obama board went too far,” the slideshow explained.

One of the decisions that Robb objects to is a 2014 rule that cuts back the amount of time between the filing of a unionization petition and the union vote to 11 days. The GOP has been attempting to extend the number of days to at least 35. This move would give businesses more time to construct a plan to stomp out union activity, like the aforementioned Dominion Nuclear strategy.

“The NLRB has made it clear that the intent of the new regulations is to run an election as quickly as possible which, of course, will give the employer the shortest period of time to respond to a union election petition,” Robb and three other Downs Rachlin lawyers wrote in a 2015 advisory.

The Trump administration has already quietly laid the groundwork for the NLRB to emerge as a much more business-friendly entity. This reality was underscored in August, when Labor Secretary Alexander Acosta announced that Ronald Reagan would be inducted into the department’s hall of fame. Trump’s previous NLRB nominees all have connections to union-busting, and the expected nomination of Robb would effectively make the NLRB—responsible for enforcing labor law—an anti-labor agency.

This article was originally published at In These Times on September 21, 2017. Reprinted with permission.

About the Author: Michael Arria covers labor and social movements. Follow him on Twitter: @michaelarria

When the Parades Are Over, Who Stands With Unions?

Wednesday, September 6th, 2017

The Labor Day parades are over. The bands have packed up. The muscular speeches celebrating workers are finished. The trash is getting collected from parks across the country.  And now conservative politicians from Trump on down will revive their systematic efforts to weaken unions and undermine workers.

Trump – despite all the populist bunting that decorates his speeches – sustains the deeply entrenched Republican antipathy to organized workers. Their attack is relentless.

Trump’s budget calls for deep cuts in the Labor Department, eviscerating job training programs and cutting – by 40 percent – the agency that does research on workplace safety. It would eliminate the program that funds education of workers on how to avoid workplace hazards. It even savages money for mine safety enforcement for the miners Trump claims to love.

Trump is systematically reversing any Obama rule that aided workers. He signed legislation scrapping the rule that required federal contractors to disclose violations of workplace safety and employment and anti-discrimination laws. His Labor Secretary has announced his intention to strip millions of workers of the overtime pay they would have received under Obama DOL regulations.

Trump is creating a pro-business majority at the National Labor Relations Board, which will roll back Obama’s efforts to make it easier for workers to organize, and make it possible to hold home companies responsible for the employment practices of their franchisees.

The GOP’s Anti-Union Strategy

This is simply standard operating procedure for today’s Republican party. Long ago, Republicans realized that organized labor was a central “pillar,” as Grover Norquist described it, of Democratic Party strength. Now Republican office holders at every level – from county officials to statehouses to judges – know that their job is to weaken labor unions. From right to work laws to administrative regulations to court challenges, Republicans sustain an unrelenting attack.

And aided by our perverse globalization strategies, they’ve been remarkably successful. Unions are down to about 7 percent of the private workforce. Public employee unions, a relative stronghold, are facing court challenges – essentially allowing workers to enjoy the benefits of union negotiations without paying dues — that will decimate their membership.

True conservatives would embrace unions. They are a classic “mediating institution,” a voluntary civic organization between government and the individual. Unions increase the voice and power of workers in the workplace, helping to keep executive accountable, and to protect workers from abuse. They also educate their members, teach democracy, and are central to community volunteer and service efforts. They teach and practice democratic citizenship.

The modern Republican Party, of course, is the party of big business and big money. It isn’t conservative; it is partisan. And weakening unions is a constant target.

While Republicans understand how important unions are to Democrats and to workers, Democrats don’t seem to get it. Sure, they line up to get union donations; most will vote to defend unions and worker programs. But as the money in politics has gotten bigger and the unions have gotten weaker, the Wall Street wing of the Democratic Party has become more powerful.

The result is clear. When Republicans get control, they attack unions relentlessly. When Democrats gain control, as they did in 2012 with the election of Barack Obama and Democratic majorities in both houses, labor law reform, empowering workers to organize is not a priority. Obama essentially told unions that if they could get the votes, he’d sign the law, but he wasn’t leading the charge. And so as under Carter and Clinton, changing the law to make it easier for workers to organize and bargain collectively didn’t happen.

Unions Under Siege

Now unions are under siege. Yet it is hard to imagine how a small “d” democracy can be robust, or a large D Democratic Party can regain its mojo without a revived movement of workers. It’s time for Democrats at every level to realize: strengthening workers and their unions isn’t an elective; it’s a requirement and a first priority.

The loop works like this: Unions are in decline. As a result, unions lose influence inside the Democratic Party. The Democrats then feel no pressure to stem unions’ decline, and the economically disadvantaged lose what was once their most powerful advocate. Then the cycle continues. We cannot revive unions, and we have no template for egalitarian politics without them.

Unions aren’t simply economic actors. They’re political actors. Labor still needs the Democrats. The Democrats, more than they realize, still need labor. But most of all, all those who want to build a fairer society need their partnership.

Republican elites understand the doom loop. Big business, small business, and Tea Party alike have pushed hard against unions. As the parties have polarized, Republicans have taken the gloves off, risking the votes of the 40 percent of union members who back Republicans in order to crush a pillar of the Democratic coalition. Even President Bernie Sanders would have real trouble rebuilding unions in the face of a Republican Congress and a federal judiciary eager to swat down pro-labor executive action.

Even without Republican politicians digging their graves, labor unions face deep challenges. In the private sector, unions must sign contracts workplace by workplace. Gawker writers here and home-care workers there will continue to organize their workplaces, but the barriers remain dauntingly high. In the public sector, unions have stood steady. But cops and teachers alike face blowback for putting their own prerogatives above the public interest. And if the Supreme Court bans the collection of agency fees in the public sector (thus imposing “right to work”), public-sector union membership could halve in a decade.

This blog was originally published at OurFuture.org on September 5, 2017. Reprinted with permission. 

About the Author: Robert Borosage is the founder and president of the Institute for America’s Future and co-director of its sister organization, the Campaign for America’s Future. The organizations were launched by 100 prominent Americans to develop the policies, message and issue campaigns to help forge an enduring majority for progressive change in America. Mr. Borosage writes widely on political, economic and national security issues. He is a Contributing Editor at The Nation magazine, and a regular blogger at The Huffington Post. His articles have appeared in The American Prospect, The Washington Post,Tthe New York Times and the Philadelphia Inquirer. He edits the Campaign’s Making Sense issues guides, and is co-editor of Taking Back America (with Katrina Vanden Heuvel) and The Next Agenda (with Roger Hickey).

Why Defending Workers’ Rights Means Fighting ICE’s Deportation Machine

Friday, August 25th, 2017

Last month, California Labor Commissioner Julie Su distributed a memo instructing her staff to turn away any Immigration and Customs Enforcement (ICE) agents who show up at labor offices without a federal warrant. This action came in response to three recent cases in which ICE sought workers’ information shortly after they filed claims against their employers. Su told The Los Angeles Times that, in two of these cases, ICE officials showed up at the employees’ labor hearing. In case ICE continues to show up at such hearings, Su provided suggested scripts to guide the interaction. “Would you please leave our office? The Labor Commissioner does not consent to your entry or search of any part of our office,” reads one portion of the text.

ICE’s targeting of labor hearings falls into a much broader pattern of workplace immigration raids. The second term of the George W. Bush administration saw a boom in such policies, with authorities carrying out hundreds of sweeps targeting workers. In May of 2008, hundreds of Homeland Security agents swooped into Postville, Iowa and arrested 389 employees at a kosher meatpacking plant. Nearly 300 of those workers spent five months in jail before being deported. In a town with a population of just 2,300 people, this meant that more than 10 percent of all residents were incarcerated as the result of one raid. “They don’t go after employers. They don’t put CEOs in jail,” said Postville Community Schools superintendent David Strudthoff at the time. “[This] is like a natural disaster—only this one is man-made. In the end, it is the greater population that will suffer and the workforce that will be held accountable.”

While Barack Obama deported more people than any other president, the tactic of targeting workers fluctuated on his watch. Data from ICE indicates that workplace immigration arrests peaked for Obama in 2011—but never reached the levels seen under Bush. The National Employment Law Project’s (NELP) Haeyoung Yoon told In These Times that, while we haven’t seen widespread examples of workplace raids under the Trump administration, this doesn’t mean they’re not coming eventually. “These efforts take a lot of time to plan,” said Yoon.

Underscoring Yoon’s point, 55 undocumented workers were detained in February in a series of Mississippi restaurant raids. After the arrests, ICE public affairs officer Thomas Byrd said that the federal search warrants were part of a year-long investigation.

State organizations like the Illinois Business Immigration Coalition are training employers to prepare for the possibility of such sweeps. NELP and the National Immigration Law Center have created a helpful guide for businesses concerned about ICE raids, which includes details on how to keep agents out, what to do if they enter and what actions can be taken after they leave. “Employers and their employees have rights when it comes to immigration enforcement in the workplace,” wrote NELP staff attorney Laura Huizar shortly after the guide was published. “Employers can and should take steps now to protect those rights and do what’s best for their business and their teams.”

In California, where almost half of the state’s farmworkers are undocumented, there have been recent legislative efforts to combat workplace raids. The SEIU-sponsored Immigrant Worker Protection Act (AB 450) is a bill, introduced this March, that would require all employers to demand a federal warrant if ICE shows up. The legislation, which was introduced by San Francisco Assemblymember David Chiu, would also prevent businesses from handing over personal employee information unless they were subpoenaed.

But what is to be done about employers who willingly collude with ICE? While explaining her memo, Julie Su told the Los Angeles Times that she suspected businesses of tipping agents off to labor hearings, events where only the employer and employee would be aware of the scheduled time. Earlier this year, Jose Flores, a 37-year-old Massachusetts man, was arrested by ICE shortly after a workers’ compensation meeting. Flores’ lawyers believe that the arrest might have been retaliation from Flores’ employer, Tara Construction, looking for a way to get out of paying out the claim. Stephen Murray, a lawyer for Tara Construction, insists that his client made no contact with ICE and had no reason to believe Flores’ was undocumented.

A recent investigation by ProPublica and NPR reveals that this is hardly an isolated case. Their review focuses on Florida, where a 2003 law made it illegal to for workers to file compensation claims using false identification. In the 14 years since, at least 130 injured workers were arrested under the law. At least one in four of those workers was detained by ICE or deported. “State fraud investigators have arrested injured workers at doctor’s appointments and at depositions in their workers’ comp cases,” reads the report. “Some were taken into custody with their arms still in slings.”

The report also points out that the Florida model could be a preview of widespread things to come under the Trump administration. If this is true, then the labor movement could end up taking a closer look at Tom Cat Bakery in Queens, where a Homeland Security inquiry and promise of subsequent firings sparked radical protests. Employers who openly collude with Trump’s deportation machine might soon be targets of the same resistance.

 This article was originally published at In These Times on August 21, 2017. Reprinted with permission.
About the Author: Michael Arria covers labor and social movements. Follow him on Twitter: @michaelarria

Labor Department wants to reward financial advisors at the expense of consumers

Thursday, August 10th, 2017

The Labor Department would like to delay a rule that would require financial advisors to act in the best interest of their customers and their retirement accounts.

The federal court filing, made on Wednesday, said the department wants to delay implementation of the rule to July 2019. The full implementation of the rule is currently set for January 2018.

In February, President Donald Trump ordered a review of the Obama-era regulation. Financial companies and lobbyists representing them have opposed the rule. On the same day of the order, White House advisor Gary Cohn, who is a former Goldman Sachs executive, told the Wall Street Journal he thought it was a “bad rule.” Congress has introduced bills trying to kill the rule on multiple occasions.

Right now, there are two standards investors must be aware of — the fiduciary standard and suitability standard. A financial advisor operating under what is called the “suitability standard” is only required to make sure a client’s investment is suitable for the client’s finances, age, and risk tolerance at that point in time, but they don’t have a great legal obligation to monitor the investment for the client.

But under the fiduciary standard, an advisor has to keep monitoring the investment as well as the customer’s overall financial picture. Under the fiduciary standard, advisors also must disclose all of their conflicts of interest, fees, and commissions. Essentially, this makes it more difficult for advisors to push investments that will make them money but may not be in the best interest of their clients.

Retirement plans have changed a lot since the 1970s, when more private workers were enrolled in defined-benefit plans funded by their employers that promised a certain monthly benefit once they retired. Now more people have defined-contribution plans, which don’t promise a specific benefit for people when they retire, requiring them to contribute money to an account they are responsible for. Only 10 percent of workers older than 22 have a traditional pension and only 6 percent of Millennials do. Most workers have to choose how to invest these contributions and manage their own retirement savings but most Americans aren’t knowledgeable on investment decisions.

A 2016 Prudential Investments survey of more than 1,500 Americans showed 42 percent of Americans surveyed didn’t know how their assets were allocated in their portfolios, and 40 percent said they didn’t know how to prepare for retirement. Investment terms are often difficult to understand and investors may be overwhelmed by choices.

The financial industry argument against the rule is essentially that a commission system is necessary to pay for financial advice for the average investor, despite the adverse incentives it creates. Gary Burtless, an economist and senior fellow at the Brookings Institution, has disputed this argument.

“This claim does not seem terribly compelling. There are alternative ways to compensate financial advisors that do not create an obvious conflict between the interests of advisors and retirement savers,” Burtless writes.

The financial industry tried to persuade the public that investors were up in arms over the rule. The Financial Services Institute claimed that consumers sent over 100,000 letters with opinions on the rule. But Money reviewed 100 of the letters FSI claimed were from investors, and found that 64 percent came from financial advisors and people involved in financial companies.

The Trump administration would have to jump through numerous hoops to reverse the progress made on the rule, however, just as Obama officials did when they first wanted to advance the rule. The final rules were issued last year, but first the department took thousands of public comments, held four days of hearings, and 100 stakeholder meetings. The administration would have to field all of these comments and go through this process again to justify whatever changes it would make. It took about six years for the Obama administration to advance the fiduciary rule.

This article was originally published at ThinkProgess on August 10, 2017. Reprinted with permission.

About the Author: Casey Quinlan is a policy reporter at ThinkProgress. She covers economic policy and civil rights issues. Her work has been published in The Establishment, The Atlantic, The Crime Report, and City Limits.

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