Outten & Golden: Empowering Employees in the Workplace

Posts Tagged ‘wages’

When three days sick means losing a month's grocery budget

Monday, July 3rd, 2017

Nearly two-thirds of private-sector workers in the U.S. have access to paid sick leave, but as with so many labor and economic statistics, that masks serious inequality: 87 percent of the top 10 percent of earners have paid sick leave, while just 27 percent of the bottom 10 percent do. And what that means is that the people who can least afford to take a day off without pay are the ones who are forced to do so if they’re too sick to go to work. A new Economic Policy Institute analysis shows how devastating that choice can be:

Without the ability to earn paid sick days, workers must choose between going to work sick (or sending a child to school sick) and losing much-needed pay. For the average worker who does not have access to paid sick days, the costs of taking unpaid sick time can make a painful dent in the monthly budget for the worker’s household:

  • If the worker needs to take off even a half day due to illness, the lost wages are equivalent to the household’s monthly spending for fruits and vegetables; lost wages from taking off nearly three days equal their entire grocery budget for the month.
  • Two days of unpaid sick time are roughly the equivalent of a month’s worth of gas, making it difficult to get to work.
  • Three days of unpaid sick time translate into a household’s monthly utilities budget, preventing the worker from paying for electricity and heat.
  • In the event of a lengthier illness—say, seven and a half days of unpaid sick time—the worker would lose income equivalent to a monthly rent or mortgage payment.

State-level paid sick leave laws are starting to make a difference—in 2012, when the first such law was passed, in Connecticut, just 18 percent of low-wage private-sector workers had paid sick days. But workers outside of the five states with such laws need the federal government to act, and that’s not going to happen under Republican control.

This blog was originally published at DailyKos on July 1, 2017. Reprinted with permission.

About the Author: Laura Clawson is labor editor at Daily Kos.

Davis-Bacon Is Not Racist, and We Need to Protect It

Thursday, June 29th, 2017

In 1931, a Republican senator, James Davis of Pennsylvania, and a Republican congressman, Robert Bacon of New York, came together to author legislation requiring local prevailing wages on public works projects. The bill, known as Davis-Bacon, which was signed into law by President Herbert Hoover, also a Republican, aimed to fight back against the worst practices of the construction industry and ensure fair wages for those who build our nation.

 Davis-Bacon has been an undeniable success—lifting millions of working people into the middle class, strengthening public-private partnerships and guaranteeing that America’s infrastructure is built by the best-trained, highest-skilled workers in the world.

Yet today, corporate CEOs, Republicans in Congress and right-wing think tanks are attacking Davis-Bacon and the very idea of a prevailing wage. These attacks reached an absurd low in a recent piece by conservative columnist George Will who perpetuated the myth that Davis-Bacon is racist.

“As a matter of historical record, Sen. James J. Davis (R-PA), Rep. Robert L. Bacon (R-NY) and countless others supported the enactment of the Davis-Bacon Act precisely because it would give protection to all workers, regardless of race or ethnicity,” rebutted Sean McGarvey, president of North America’s Building Trades Unions, on the Huffington Post.

“The overwhelming legislative intent of the Act was clear: all construction workers, including minorities, are to be protected from abusive industry practices,” he continued. “Mandating the payment of local, ‘prevailing’ wages on federally-funded construction projects not only stabilized local wage rates and labor standards for local wage earners and local contractors, but also prevented migratory contracting practices which treated African-American workers as exploitable indentured servants.”

The discussion surrounding Davis-Bacon and race is a red herring. The real opposition to this law is being perpetrated by corporate-backed politicians—including bona fide racists like Rep. Steve King (R-Iowa)—who oppose anything that gives more money and power to working people. For decades, these same bad actors have written the economic rules to benefit the wealthiest few at our expense. King and nine Republican co-sponsors have introduced legislation to repeal Davis-Bacon, a number far smaller than the roughly 50 House Republicans who are on record supporting the law. King and his followers simply cannot fathom compensating America‘s working people fairly for the fruits of their labor. Meanwhile, after promising an announcement on Davis-Bacon in mid-April, President Donald Trump has remained silent on the issue.

So the question facing our elected officials is this: Will you continue to come together—Republicans and Democrats—to protect Davis-Bacon and expand prevailing wage laws nationwide? Or will you join those chipping away at the freedom of working men and women to earn a living wage?

We are watching.

This blog was originally published at AFLCIO.com on June 28, 2019. Reprinted with permission.

About the Author: Tim Schlittner is the AFL-CIO director of speechwriting and publications and co-president of Pride At Work.

Trump reversal of Obama-era labor rule is great news for corporations

Friday, June 23rd, 2017

A transgender woman is suing McDonald’s and the owner of the franchised restaurant she worked for after allegedly experiencing sexual harassment and discrimination.

La’Ray Reed said a coworker asked if she were a “boy or girl,” “top or bottom,” or what her “role” was “in the bedroom.” She said she was groped and spied on while using the public toilet.

But for Reed to hold McDonald’s responsible for her alleged mistreatment, her lawyers have to prove that McDonald’s should be held responsible as a joint employer—not just the owners of the franchised restaurant. There is a question of whether the Labor Department’s recent decision to rescind the standard for determining who is a joint employer will hinder her ability to seek justice. The Obama administration’s standard went beyond simply looking at who sets wages and hires people, and considered a worker’s “economic dependency” on the business.

McDonald’s has resisted this legal responsibility for many years, and says it does not have control over things like pay and working conditions at franchised restaurants. In 2016, McDonald’s settled a wage-theft class action through a $3.75 million payment that allowed it to dodge responsibility. McDonald’s released a statement that said it “reconfirms that it is not the employer of or responsible for employees of its independent franchisees.”

Industry groups have been pushing against efforts to call businesses like McDonald’s joint employers for many years now. In 2015, Matt Haller, a lobbyist at the International Franchise Association called a 2015 National Labor Relations Board ruling on whether a recycling company could be called a joint employer, “a knife-to-the throat issue for the franchise model.” He told the Washington Post, “You’d be hard pressed to find a business that shouldn’t be concerned about the impact of this joint employer standard.” Haller said IFA was “pleased” at the department’s decision to rescind guidance this month.

But there is certainly hope for La’Ray Reed, and other workers like her who are experiencing discrimination or issues such as wage theft at work. Since the joint employer guidance does not have the full force of law, it is not as important to these cases as existing tests for determining if an employer relationship exists. Under the economic realities test, applied under Title VII of the Civil Rights Act of 1964 and the Fair Labor Standards Act, among other laws, a relationship exists if someone is economically dependent on that business. Paul Secunda, professor of law at Marquette University, who teaches on employment discrimination law, said this test will play a much bigger role in determining whether an employee can hold McDonald’s responsible for discrimination.

“Just the Trump administration withdrawing this guidance does not mean in any way that these claims are doomed to failure or are otherwise are not plausible,” Secunda said. “Because what matters the most with employment law is focusing on employment discrimination under Title VII and what other state laws apply there.”

‘This control standard is the standard that has been in place since the 1950s and ‘60s, and so it doesn’t make sense to have different standards under different laws. It only makes sense to hold liable those who control what happens in the workplace,” Secunda added.

Representatives of Fight for $15, a group of fast food workers, teachers, and adjunct professors advocating for better pay backed by the Service Employees International Union, said McDonald’s has failed to enforce its own policies.

“The growing number of allegations suggests a failure by McDonald’s to enforce the zero-tolerance policy against sexual harassment outlined in its Operations and Training and Policies for Franchisees manuals,” the labor group told BuzzFeed.

“There are terms and conditions that are set by the national parent McDonald’s,” Secunda said. “It has a policy on sexual harassment and equal opportunity that all its franchisees have to meet: that it will not tolerate sexual harassment whether based on transgender status or otherwise in the workplace. [The argument is] that McDonald’s parent company exercises meaningful control—that is being free from sexual harassment and demeaning conduct in the workplace.”

None of this means that any parent corporation is responsible for any franchisees’ lability, Secunda said, since every case must be decided on its facts, but where employers do exercise meaningful control over employees, there should be a possibility that they will be held responsible.

The decision to rescind this joint-employer guidance will by no means kill any possibility of holding a corporation, such as McDonald’s, responsible, and a judge would be more likely to consider the rule of law first, Secunda said, but the joint employer guidance would still be a helpful resource for the defendant to have in its arsenal.

“If I were a conservative jurist who wanted it to come out on the corporate conservative side of the world, I see that they could use this. ‘You know they’re the expert agency, so they can’t be wrong,’” Secunda said. “But I just think that would be disingenuous, because the agency has obviously changed its position based on the politics on the administration. And this should be an answer that has nothing to do with politics. It should be based on rule of law.”

This blog was originally published at ThinkProgress on June 22, 2017. Reprinted with permission. 

About the Author: Casey Quinlan is a journalist covering education, investments, politics, crime, and LGBT issues.

Foundations of Inequality are in Wages

Wednesday, May 31st, 2017

While rising capital share and greater concentration of wealth explain some of the story of economic inequality, the largest part of the story is the growth in wage inequality over the last several decades. Available data from the Social Security Administration unfortunately doesn’t go past 1990, overlooking considerable upward distribution of wages beginning in 1980. However, wage distributions from 1990 to 2015 show a clear, and unequal, upward trend.

The share of wages earned by the top 0.1 percent of wage earners increased 36 percent in that time period, from 3.5 percent of all wages earned to 4.8 percent. These earners are largely Wall Street bankers and top executives from private companies, as well as hospitals, universities, and other non-profits. Although the data from such a small pool of workers is erratic, they show soaring gains over ordinary workers that coincide with stock market peaks. Wages at this income level are likely paid in part in stock options, so that connection is unsurprising, but the magnitude of wage increases for this group compared to the others supports the argument that wages are part of the inequality picture.

The top 1 percent of wage earners (excluding the 0.1 percent) are largely doctors, dentists, and other highly paid professionals with an average pay of around $333,000 a year. These workers have experienced impressive gains in their share of wages, although they do not compare to those of the 0.1 percent. From 1990 to 2015 the share of wages earned by this group increased 24 percent from 10.7 percent to 13.2 percent.

Lawyers, general practitioners, university professors, and other professionals with advanced degrees make up the top 5 percent of earners (excluding the aforementioned groups). Since 1990 their share of wages earned has grown 18 percent, from 24.0 percent to 28.5 percent. Most of the difference between the share of wages earned by this group and the next lowest, the 90th to the 95th percentile, was gained between 1994 and 2000. Prior to that period both percentile groups’ share of wages grew at a similar rate, and since 2000 the two groups have had similar growth.

The final group of workers included in this analysis adds those who mostly have college degrees but not necessarily advanced degrees. The share of wages earned by the top 10 percent taken as a whole grew 14 percent from 35.5 percent in 1990 to 40.3 percent in 2015.

This blog originally appeared at CEPR.net on May 30, 2017. Reprinted with permission.

About the Authors: Sarah Rawlins is a Domestic Program Intern at the Center for Economic and Policy Research. Dean Baker co-founded CEPR in 1999. His areas of research include housing and macroeconomics, intellectual property, Social Security, Medicare and European labor markets. He is the author of several books, including Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer. His blog, “Beat the Press,” provides commentary on economic reporting. He received his B.A. from Swarthmore College and his Ph.D. in Economics from the University of Michigan.

Thousands of Piece Rate Workers in California’s Salon Industry Are Likely Owed Unpaid Wages

Thursday, April 20th, 2017

Salon owners in California who pay employees on commission are subject to liability for failing to pay all wages due.  Under California law, “commissions” are a form of wages applicable only to an employee who sells a product or service, not to an employee who makes a product or provides a service to the employer’s customers.  Keyes Motors v. DLSE 197 Cal.App.3d 557 (1987). Salon employees in California whose job is to cut and/or color hair, must therefore be paid on an hourly basis, a piece rate basis, or a combination of those.  Salon technicians who have been paid on a typical net commission basis are likely due unpaid wages and statutory penalties.

Piece Rate Wages for Hair Stylists and Colorists

California Assembly Bill 1513 (AB 1513) went into law on January 1, 2016, adding section 226.2 to the California Labor Code to address compensation for piece rate work.  Piece rate workers are paid according to the number of units they complete.  Piece rate units might be defined by the numbers of widgets assembled by a factory worker, the number of cars washed by a car washer or the number of haircuts given by a barber or cosmetologist.

AB 1513 did not create new wage obligations, but instead codified the legal obligations described in two important appellate decisions that addressed the wages of piece rate workers back in 2013: Gonzales v. Downtown LA Motors, 215 Cal. App. 4th 36 (2013) and Bluford v. Safeway, Inc., 216 Cal. App. 4th 864 (2013).

In Gonzales, the court held that mechanics who worked on a piece rate basis must be paid for their non-productive time (time during a shift when the worker was not actively engaged in compensable work). An employer, the court explained, cannot average the wages worked by an employee to show that the employee received at least minimum wage for all hours she was under the employer’s control.  The employer must pay no less than the applicable minimum wage for every minute an employee is under its control, including time when no compensable work is being performed under a piece rate system.

In Bluford, the court held that piece rate workers must also be paid separately for rest periods because rest periods under California law are deemed on-the-clock, compensable work time.  If a piece rate worker is only paid by the unit, then she is not being compensated for rest periods in accordance with California law.

So, although AB 1513 did not modify the duties described in the Gonzales and Bluford cases, it provided employers a “safe-harbor” period during which the employer could take steps to limit its liability to certain types of claims or lawsuits arising out of its misclassification of technicians as commissioned employees.  To take advantage of the safe harbor protections, however, the employer was required to:  (1) notify the California Department of Industrial Relations no later than July 1, 2016 that it would pay wages due to employees who had not been compensated for non-productive time or rest periods (back to July 1, 2012); and (2) make the wage payments no later than December 15, 2016.  Many piece rate employers failed to take advantage of these safeguards. A list of employers who notified the DIR of their intention to participate in the safe harbor provision can be found at the DIR website.

Labor Code § 226.2, the product of AB 1513, places specific duties on employers of piece rate workers including:

(a) For employees compensated on a piece-rate basis during a pay period, the following shall apply for that pay period:

(1) Employees shall be compensated for rest and recovery periods and other nonproductive time separate from any piece-rate compensation.

(2) The itemized statement required by subdivision (a) of Section 226 shall, in addition to the other items specified in that subdivision, separately state the following, to which the provisions of Section 226 shall also be applicable:

(A) The total hours of compensable rest and recovery periods, the rate of compensation, and the gross wages paid for those periods during the pay period.

(B) Except for employers paying compensation for other nonproductive time in accordance with paragraph (7), the total hours of other nonproductive time, as determined under paragraph (5), the rate of compensation, and the gross wages paid for that time during the pay period.

(3)          (A) Employees: shall be compensated for rest and recovery periods at a regular hourly rate that is no less than the higher of

(i) An average hourly rate determined by dividing the total compensation for the workweek, exclusive of compensation for rest and recovery periods and any premium compensation for overtime, by the total hours worked during the workweek, exclusive of rest and recovery periods.

(ii) The applicable minimum wage.

(B) For employers who pay on a semimonthly basis, employees shall be compensated at least at the applicable minimum wage rate for the rest and recovery periods together with other wages for the payroll period during which the rest and recovery periods occurred. Any additional compensation required for those employees pursuant to clause (i) of subparagraph (A) is payable no later than the payday for the next regular payroll period.

These statutory mandates codify the wage rights set out in Gonzales and Bluford.  Given the common salon industry practice of paying stylists and colorists as commissioned employee, it is likely that thousands of salon employees in California have been underpaid during the past four years.

Salon Class Action

In early 2016 Kitchin Legal filed a class action lawsuit (on behalf of 231 employees) against five jointly-owned Northern California hair salons.  The case is based on the salons’ alleged failure to abide by a wide range of California employment laws, including Labor Code § 226.2.  After months of negotiations and the exchange of thousands of lines of employee data, our clients entered into a proposed class-wide settlement valued at over $1 million.  We are now in the process of seeking court approval for the class action settlement.

Top Rated San Francisco Salon

In late 2016 Kitchin Legal filed an individual lawsuit on behalf of a stylist against one of the top ranked hair salons in San Francisco. [The lawsuit is based on the salon’s alleged violations of several California wage and hour laws, including Labor Code § 226.2.]  The salon owner, who either was ignorant of the law, or chose to ignore his legal duties, is facing a six-figure wage claim, one of the largest components of which is based on the allegation that our client was improperly paid as a commissioned employee.

Risk and Consequences

For Salon Owners

Nearly every year California passes new legislation or enacts new regulations pertaining to the duties of employers to their workers. Employers who do not have a sophisticated human resources professional on staff or a competent employment attorney on retainer to help them keep abreast of these changes can become particularly vulnerable to employment-related claims.

An employer who decides to risk non-compliance with any aspect of California’s employment laws can face significant financial consequences, including a class action lawsuit by a group of employees.  The worst decision a salon owner can make is to remain ignorant of California labor laws or to ignore its legal obligations hoping its employees will not challenge its illegal practices through a lawsuit.

The best decision a salon owner can make at any time is to have a skilled California employment attorney review its policies and practices for compliance with California labor laws, including in particular, Labor Code § 226.2.

For Salon Employees

The biggest risk facing an employee whose compensation rights have been violated is delay.  All of these claims are governed by specific statutes of limitations.  Employees can generally seek recovery of unpaid wages for up to four years (under California’s unfair completion laws).  Once the statute of limitations runs on a claim, it is gone forever, however.   Salon employees who have been paid as commissioned employees and who have not been paid separately for non-productive time and rest periods should talk with an employment attorney right away.

Patrick R. Kitchin is the founder of Kitchin Legal APC, a San Francisco, California employment law firm. He has represented tens of thousands of employees in both individual and class action cases involving violations of California and federal labor laws since founding his firm in 1999. According to retail experts and the media, his wage and hour class actions against Polo Ralph Lauren, Gap, Banana Republic, and Chico’s led to substantial changes in the retail industry’s labor practices in California. Patrick is a graduate of The University of Michigan Law School and is personally and professionally committed to the protection of workers’ rights everywhere.

Day 1 in the Newly Seated Kentucky Legislature Is About Attacking Working People

Monday, January 9th, 2017

Kentucky Republican leaders, led by Gov. Matt Bevin, gained control of the state House, giving them control of the executive and legislative branches. Their first order of business? Go after working families. Bevin and the Republicans are pushing forward with several anti-worker resolutions. In the process, they have given more say in the state’s future to outsider billionaires and CEOs than the people of the state.

Kentucky Republicans abused their power, changing the rules to move the anti-working people bills as “emergency legislation,” even though the only emergency happening is the one they are creating for working families. Legislators don’t even have time to read the bills, much less take the time to fully understand the impact of the legislation. New legislators don’t even have phones or offices yet, and they’re being asked to quickly vote yes or no on dangerous, destructive bills.

Even worse, by bending the rules in their favor, Republicans have given the public no chance to weigh in on the legislation. The bills have been reported out of committee and could be voted on the floor of the legislature as early as Saturday.

The Kentucky State AFL-CIO condemned the sneaky move:

The so-called right to work and prevailing wage repeal bills passed (out of committee) today will deny economic opportunities for Kentucky’s working families.
Kentucky’s working families are suffering. They are facing employment, health care access and education challenges. The Kentucky GOP not only ignored their plight, they made them worse with these anti-worker bills.

Kentucky Governor Matt Bevin and House Republican leadership made hurting working Kentuckians their number one priority. They did not advance bills to increase education funding, raise wages, or fund vital services in our community. Instead they chose to give multi-national corporations more power to outsource jobs, cut wages, and reduce benefits at the expense of our workers, small businesses, and the local economy. This is shameful.

The Kentucky labor movement will continue to fight for the rights of Kentucky’s working families, like we have been doing for more than 100 years. We will demand government transparency and accountability. And we will continue to fight for better wages, reasonable hours and safer working conditions. We will take this opportunity to grow the labor movement and organize like hell!

Politicians didn’t create the labor movement and politicians aren’t going to destroy the labor movement.

Other working family advocates agree. Bill Finn, director of the Kentucky State Building and Construction Trades Council, said: “A lot of working people voted for change in this election. They didn’t vote for this. They didn’t vote for a pay cut.”

Learn more at Kentucky State AFL-CIO.

This blog originally appeared in aflcio.org on January 4, 2017.  Reprinted with permission.

Kenneth Quinnell: I am a long-time blogger, campaign staffer and political activist.  Before joining the AFL-CIO in 2012, I worked as labor reporter for the blog Crooks and Liars.  Previous experience includes Communications Director for the Darcy Burner for Congress Campaign and New Media Director for the Kendrick Meek for Senate Campaign, founding and serving as the primary author for the influential state blog Florida Progressive Coalition and more than 10 years as a college instructor teaching political science and American History.  My writings have also appeared on Daily Kos, Alternet, the Guardian Online, Media Matters for America, Think Progress, Campaign for America’s Future and elsewhere.  I am the proud father of three future progressive activists, an accomplished rapper and karaoke enthusiast.

Enormous, Humongous August Trade Deficit Prompts Trade Deficit Bill

Tuesday, October 11th, 2016

dave.johnsonThe U.S. Census Bureau reported Wednesday that the August trade deficit rose 3 percent to $40.73 billion from July’s $39.5 (slightly revised). Both exports and imports rose, with imports rising more than exports. August exports were $187.9 billion up $1.5 billion from July. August imports were $228.6 billion up $2.6 billion.

The goods deficit was $60.3 billion, offset by a services surplus of $19.6 billion.

Imports from China increased 9.5 percent.

Is Increased “Trade” Good If It Really Means Increased Trade Deficits?

“Trade” is generally considered a good thing. But consider this: closing an American factory and firing its workers (not to mention the managers, supply chain, truck drivers, etc affected) and instead producing the same goods in a country with low wages and few environmental protections, then bringing the same goods back to sell in the same stores increases “trade” because now those goods cross a border. This is how “trade” results in a structural trade deficit. Goods once made here are made there, the economic gains move from here to there.

Offshoring production can be a good thing, but only in a full-employment economy. This is because with everyone employed companies can’t find people to do things that need to be done. Meanwhile workers in other countries need the jobs. The people there can afford things made here, and trade balances. Everyone benefits.

But since the 1970s the US has used “trade” and other policies to intentionally drive unemployment up and wages down, to the benefit of “investors” (Wall Street) and executives, who then pocket the wage differential. This pushes the economy’s gains to a few at the top, increasing inequality, which increases the power of plutocrats to further influence policy in their favor.

The US has run a trade deficit since the 1970s. Coincidentally, see this chart:

The stagnation of wages for working people just happens to correspond with the introduction of the intentional “trade” deficit. Again, “trade” in this case means deindustrialization: closing factories here, opening them there and bringing the same goods across a border to sell in the same stores.

Trade Deficit Reduction Act

This week Rep. Louise Slaughter (D-NY) introduced a bill designed to identify and reduce our enormous, humongous trade deficits. RochesterFirst.com has the story, in Slaughter introduces legislation to reduce trade deficits,

On Monday, Congresswoman Louise Slaughter unveiled the Trade Deficit Reduction Act, which calls for a change in how we approach international trade in order to benefit our workers.

The legislation would put a government-wide focus on addressing the most significant trade deficits that exist between the United States and other countries. The U.S. has run trade deficits since the 1970s.

… “The last thing our community needs as we work to reignite our manufacturing base with advanced technologies like optics and photonics is to undo this progress by enacting another NAFTA-style trade deal. We need a whole new direction in our trade policy, which is why I am standing with workers from PGM Corp. today to unveil the Trade Deficit Reduction Act. This legislation will change how we approach international trade and make it benefit our workers and manufacturers,” said Slaughter.

The bill would require the administration to identify the countries with which the U.S. has the worst trade deficits.

The bill also directs the administration to develop plans of action to address the trade deficits with those countries, with strict deadlines and oversight from Congress.

The intentional trade deficit and other policies to drive up unemployment and drive down wages greatly enrich a few, but history tells us the consequences are dangerous to society. For example, the rising support for Trump and other far-right populists like him around the world.

This post originally appeared on ourfuture.org on October 6, 2016. Reprinted with Permission.

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

New Rules Needed to Solve Steel Crisis

Friday, September 9th, 2016

China is gorging itself on steelmaking. It is forging so much steel that the entire world doesn’t need that much steel.

Companies in the United States and Europe, and unions like mine, the United Steelworkers, have spent untold millions of dollars to secure tariffs on imports of this improperly government-subsidized steel. Still China won’t stop. Diplomats have elicited promises from Chinese officials that no new mills will be constructed. Still they are. Chinese federal officials have written repeated five-year plans in which new mills are banned. Yet they are built.

All of the dog-eared methods for dealing with this global crisis in steel have failed. So American steel executives and steelworkers and hundreds of thousands of other workers whose jobs depend on steel must hope that President Barack Obama used his private meeting with China’s President XI Jinping Saturday to press for a novel solution. Because on this Labor Day, 14,500 American steelworkers and approximately 91,000 workers whose jobs depend on steel are out of work because China won’t stop making too much steel.

A new report on the crisis, titled “Overcapacity in Steel, China’s Role in a Global Problem,” by the Duke University Center on Globalization, Governance & Competitiveness flatly concludes that existing policies to stop China from building excessive steel capacity have failed.

steel-overcapacity-table

Since 2007, China has added 552 million metric tons of steel capacity – an amount that is equivalent to seven times the total U.S. steel production in 2015. China did this while repeatedly promising to cut production. China did this while the United States actually did cut production, partly because China exported to the United States illegitimately subsidized, and therefore underpriced, steel.

That forced the closure or partial closure of U.S. mills, the layoffs of thousands of skilled American workers, the destruction of communities’ tax bases and the threat to national security as U.S. steelmaking capacity contracted.

Although China, the world’s largest net exporter of steel, knows it makes too much steel and has repeatedly pledged to cut back, it plans to add another 41 million metric tons of capacity by 2017, with mills that will provide 28 million metric tons already under construction.

None of this would make sense in a capitalist, market-driven system. But that’s not the system Chinese steel companies operate in. Chinese mills don’t have to make a profit. Many are small, inefficient and highly polluting. They receive massive subsidies from the federal and local governments in the form of low or no-interest loans, free land, cash grants, tax reductions and exemptions and preferential access to raw materials including below market prices.

That’s all fine if the steel is sold within China. But those subsidies violate international trade rules when the steel is exported.

These are the kinds of improper subsidies that enable American and European companies to get tariffs imposed. But securing those penalties requires companies and unions to pay millions to trade law experts and to provide proof that companies have lost profits and workers have lost jobs. So Americans must bleed both red and green before they might see limited relief.

The Duke report suggests that part of the problem is that market economies like those in the United States and Europe are dealing with a massive non-market economy like China and expecting the rules to be the same. They just aren’t.

Simply declaring that China is a market economy, which is what China wants, would weaken America’s and Europe’s ability to combat the problems of overcapacity. For example, the declaration would complicate securing tariffs, the tool American steel companies need to continue to compete when Chinese companies receive improper subsidies.

The Duke report authors recommend instead delaying action on China’s request for market economy status until China’s economic behavior is demonstrably consistent with market principles.

The authors of the Duke report also suggest international trade officials consider new tools for dealing with trade disputes because the old ones have proved futile in resolving the global conflict with China over its unrelenting overcapacity in steel, aluminum and other commodities.

For example, under the current regime, steel companies or unions must prove serious injury to receive relief. The report suggests: “changing the burden of proof upon a finding by the World Trade Organization (WTO) dispute settlement panel of a prohibited trade-related practice, or non-compliance with previous rulings by the WTO.”

It also proposes multilateral environmental agreements with strict pollution limits. Under these deals, companies in places like the United States and Europe that must comply with strong pollution standards would not be placed at an international disadvantage as a result, and the environment would benefit as well.

In addition to the family-supporting steelworker jobs across this country that would be saved by innovative intervention to solve this crisis, at stake as well are many other jobs and the quality of jobs.

The Congressional Steel Caucus wrote President Obama before he left last week on his trip to Hangzhou for the G-20 Summit asking that he secure the cooperation of China and pointing out the large number of downstream jobs that are dependent on steel.

Also last week, the Economic Policy Institute issued a report titled “Union Decline Lowers Wages of Nonunion Workers.” It explained that the ability of union workers to boost nonunion workers’ pay weakened as the percentage of private-sector workers in unions fell from about 33 percent in the 1950s to about 5 percent today.steel-overcapacity-table-2

The EPI researchers found that nonunion private sector men with a high school diploma or less education would receive weekly wages approximately 9 percent higher if union density had remained at 1979 levels. That’s an extra $3,172 a year.

Many steelworkers are union workers. If those jobs disappear, that would mean fewer family-supporting private sector union jobs. And that would mean an even weaker lift to everyone else’s wages.

America has always been innovative. Now it must innovate on trade rules to save its steel industry, its steel jobs and all those jobs that are dependent on steel jobs.

This post originally appeared on ourfuture.org on August 25, 2016. Reprinted with Permission.

Leo Gerard is the president of the United Steelworkers International union, part of the AFL-CIO. Gerard, the second Canadian to lead the union, started working at Inco’s nickel smelter in Sudbury, Ontario at age 18. For more information about Gerard, visit usw.org.

Domestic Workers in Ill. Win Bill of Rights: “Years of Organizing Have Finally Paid Off”

Monday, August 22nd, 2016

Domestic workers in Illinois are celebrating a new bill of rights.

Gov. Bruce Rauner signed the bill into law last week, capping a 5-year campaign and making Illinois the 7th state to adopt such a protection.

Sponsored by Sen. Ira Silverstein (D-8th District) in the Senate and Rep. Elizabeth Hernandez (D-24th District) in the House, the Illinois Domestic Workers Bill of Rights gives nannies, housecleaners, homecare workers and other domestic workers a minimum wage, protection from discrimination and sexual harassment and one day of rest every seven days for workers employed by one employer for at least 20 hours a week.

The law amends four other Illinois state laws—the Minimum Wage Law, the Illinois Human Rights Act, the One Day Rest in Seven Act and the Wages of Women and Minors Act—to include domestic workers.

Over the past five years, the Illinois Domestic Workers Coalition has campaigned to demand that domestic workers be provided with the same workplace protections that others have had for decades. Members gathered Tuesday at the Sargent Shriver National Center on Poverty Law in Chicago to celebrate.

“Finally, some of the hardest working people in the state of Illinois will receive the dignity and respect they deserve from their work environment,” said Rep. Hernandez.

Magdalena Zylinska, a domestic worker and board member of Arise Chicago, spoke about how demanding domestic work is.

“I have struggled to get by from low wages, wage theft and disrespect on the job,” Zylinska said. “But today I am here to celebrate that our years of organizing have finally paid off.”

In 2010, New York became the first state to sign such a bill into law. Illinois is now the seventh, joining Massachusetts, California, Oregon, Hawaii and Connecticut. While domestic workers have achieved victory in those states, the fight continues for a national bill of rights for domestic workers.

Worldwide, 90 percent of domestic workers—the vast majority of whom are women—do not have access to any kind of social security coverage, according to the International Labour Organization. In the United States, an estimated 95 percent of domestic workers are female, foreign born and/ or persons of color. They frequently lack protections and face near constant adversity.

“Women are an essential pillar of our society and our families, as you all have seen. The House listened to us. The Senate listened to us, and now the governor has listened to us,” said Maria Esther Bolaños, a domestic worker and leader from the Latino Union of Chicago.

She recalled days where she worked 12 hours and got paid just $12.00.

Grace Padao of AFIRE Chicago echoed Bolaños’ statements with struggles of her own, describing days of being isolated and alone in homes that were not her own, working seven days a week to provide for her family.

“From this day forward, domestic workers in Illinois will never have to face the conditions that I did,” Padao said.

In 2010, New York became the first state to sign such a bill into law. Illinois is now the seventh, joining Massachusetts, California, Oregon, Hawaii and Connecticut. (Parker Asmann)

This article was originally posted at Inthesetimes.com on August 16, 2016. Reprinted with permission.

Parker Asmann is a Summer 2016 Editorial Intern at In These Times. He is an Editorial Board Member for the Chicago-based publication El BeiSMan as well as a regular contributor to The Yucatan Times located in Merida, Mexico. He graduated from DePaul University in 2015 with degrees in journalism and Spanish, as well as a minor in Latin American Studies.

 

Jobs Report: Change Still Needed

Friday, July 8th, 2016

The June jobs report – a cheery 287,000 new jobs, with unemployment ticking up to 4.9 percent – is cause for both relief and concern.

The relief is that jobs creation picked up after the slowdown of April (revised upward to 144,000) and May (revised downward to 11,000). Even subtracting the 35,000 jobs “created” by striking Verizon workers returning to work, the June report suggests an economy that is continuing to grow and generate jobs.

The continuing concern is the pace of that growth. Jobs creation is slowing, down from a monthly average of 229,000 last year, to 196,000 in the first quarter, and now to 147,000 in the second quarter. Yet over 15 million people are still in need of full-time work. The percentage of Americans of working age who are employed or looking for work is at 62.7 percent, still below pre-Great Recession levels. Average hourly wages ticked up by 2 cents in June, and wage growth remains slow – 2.6 percent over the past year – far below the levels associated with previous recoveries.

This is the last jobs report before the political conventions formally kick off the presidential campaign (which already feels like a recurring and unending nightmare). For Clinton and Democrats, the report provides some relief that the economy isn’t slowing dramatically. For Donald Trump and the Republicans, it provides continued evidence that the economy isn’t soaring. Working families are likely to continue to wonder when they will begin to share in the recovery.

For Democrat Hillary Clinton, these conditions pose particular perils. President Obama will want Democrats to tout his success – record months of private sector jobs growth, over 14 million jobs created since 2010, seven years of economic growth, unemployment down by more than half since the Great Recession he inherited, the strongest economy in the industrial world.

But most Americans aren’t sharing in the rewards. Median family incomes haven’t recovered to pre-recession levels. The wealthiest 1 percent captured a staggering 52 percent of the rewards of growth from 2009 to 2015. And now a weaker Europe post-Brexit and a stronger dollar suggest that our trade deficits will worsen, putting more pressure on jobs and wages.

Americans are looking for change, not for more of the same. Trump will be spouting that message, with a mix of bluster and preposterous policy to support it (build the wall, slash trillions in taxes, renegotiate the debt, and so on). Clinton and Democrats need to make a clear case on how they will change this economy to work for the many – generating more good jobs, higher wages, and a better deal for working people. More of the same offers no way out.

This blog originally appeared in ourfuture.org on July 8, 2016. Reprinted with permission.

Robert Borosage is a board member of both the Blue Green Alliance and Working America.  He earned a BA in political science from Michigan State University in 1966, a master’s degree in international affairs from George Washington University in 1968, and a JD from Yale Law School in 1971. Borosage then practiced law until 1974, at which time he founded the Center for National Security Studies.

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