Outten & Golden: Empowering Employees in the Workplace

Archive for August, 2012

Minimum Wage Boost Could Create 100,000 Jobs

Wednesday, August 15th, 2012
Credit: Joe Kekeris

Credit: Joe Kekeris

ib341-figureA.png.538When wages rise, workers and communities benefit. So imagine how improved our national economy would be if the wages of nearly 30 million workers got a boost?

If Congress acted to raise the federal minimum wage to $9.80 by July 1, 2014, some 28 million workers would see a pay increase, according to the Economic Policy Institute’s (EPI) latest report on the minimum wage. Further, those workers would receive nearly $40 billion in additional wages over the phase-in period.

During an across the board phase-in period of the minimum-wage increase, the U.S. gross domestic product (GDP) would increase by roughly $25 billion, resulting in the creation of approximately 100,000 net new jobs, according to EPI (click on chart at left to expand).

Maybe that’s because raising the minimum wage is a matter of fairness and basic American values: The minimum wage would be $10.55 an hour if it matched the inflation rate. Now it’s $7.25 an hour.

Maybe that’s because raising the minimum wage is a matter of fairness and basic American values: Now at $7.25 an hour, the minimum wage would be $10.55 an hour if it matched the inflation rate.

The newest EPI report reiterates some of its earlier findings, which refute the stereotypes often associated with minimum-wage workers.

  • Women would comprise nearly 55 percent of those who would benefit.
  • Nearly 88 percent of workers who would benefit are at least 20 years old.
  • Although workers of all races and ethnicities would benefit from the increase, non-Hispanic white workers comprise the largest share (about 56 percent) of those who would be affected. About 42 percent of affected workers have at least some college education.
  • Around 54 percent of affected workers work full time, over 70 percent are in families with incomes of less than $60,000, more than a quarter are parents and over a third are married.
  • The average affected worker earns about half of his or her family’s total income.

On July 26, Sen. Tom Harkin introduced a stand-alone minimum-wage bill, S. 3453, The Fair Minimum Wage Act of 2012. On the same day,
Rep. George Miller (D-Calif.) introduced legislation in the House of Representatives, H.R. 6211, mirroring Harkin’s minimum-wage legislation.

Congress is home for summer vacation right now, but lawmakers will be back. And when they return, the AFL-CIO urges them to pass the Fair Minimum Wage Act of 2012 (read letter here), as are noted economists.

This blog originally appeared in AFL-CIO on August 15, 2012. Reprinted with permission.

About the Author: Tula Connell got her first union card while she worked her way through college as a banquet bartender for the Pfister Hotel in Milwaukee they were represented by a hotel and restaurant local union (the names of the national unions were different then than they are now). With a background in journalism (covering bull roping in Texas and school boards in Virginia) she started working in the labor movement in 1991. Beginning as a writer for SEIU (and OPEIU member), she now blogs under the title of AFL-CIO managing editor.

Why You Should Know Your Rights Under FMLA

Tuesday, August 14th, 2012

lizabethThere is a common misconception that the Family and Medical Leave Act only include provisions that apply to pregnancy and childbirth. In fact, there are many scenarios that working people face which could benefit from leave guaranteed under FMLA laws. It is important for all workers to be aware of FMLA and what it covers, because this 12 week allotment of unpaid leave may be of great assistance in many situations.

FMLA does cover issues pertaining to pregnancy and childbirth. But, what about other parenting situations? For example, what if an employee adopts a child? Or, what if a parent has a sick child? FMLA can be applied in these situations as long as the situation qualifies. Furthermore, FMLA does not have to be used as a single extended period of leave. If, for example, a parent has a child who must be taken to the doctor regularly for treatment, that parent may take leave in small increments to do this. Even if the time needed is only an hour, FMLA can be used. All an employee has to do is provide the employer with sufficient information to explain why the leave is needed and when it will be taken.

What if there is a family member other than a child who is having significant health issues? Can an employee have leave under FMLA to care for them? Unequivocally yes as long as the employee qualifies. To qualify the employee must work for a qualifying organization, have worked at least 1,250 hours in a year, give an explanation of why and when the leave is needed, and provide medical certification to prove the need for leave. When an employee needs time to care for the needs of a child, spouse, or parent, FMLA provides it. Leave may be used to take a family member for medical treatments, such as chemotherapy and dialysis. It may also be used to care for a family member with a chronic condition such as Alzheimer’s.

There are other situations where FMLA may be applied that are less well-known. For example, many people don’t realize that FMLA makes special provisions that apply to military personnel, including those in the Reserves or National Guard. If an employee has a spouse, child, or parent who is in the military, they may take FMLA leave to cover the needs that arise if that person is called to duty. These could include financial preparations, handling legal arrangements, and attending military functions. FMLA can also be used for the purpose of spending time with a serviceperson who is on short-term, temporary leave during deployment.

Lastly, people should remember that FMLA can be used in order to care for an employee’s own serious health issues. This doesn’t mean that you can use FMLA to recuperate from a cold. But, if you have a significant health situation arise, or if you have a chronic issue like asthma or arthritis, FMLA can help you. Employees will need to provide a medical certification form completed by a physician to document the need for leave.

If you need to take time off for a significant health reason, for a parenting issue, or for something relating to active military duty, you need to examine FMLA leave. The requirements to be eligible for the leave are surprisingly few.  They are:

• An employee must work for a covered employer
• An employee have worked for the employer for a total of 12 months
• An employee must have worked at least 1,250 hours over the previous 12 months
• An employee must work at a location in the United States or in any territory or possession of the United States where at least 50 employees are employed by the employer within 75 miles.

FMLA is an extremely helpful protection for all employees. Those who are not completely familiar with the laws should make an attempt to familiarize themselves with its contents. The Department of Labor provides employees with resources that explain FMLA. A small investment of time learning about the rules could be a lifesaver if the need for leave arises.

About the Author: Lizabeth C. S. Bell has a background in English and library science. Currently, she does research, analysis and writing for EmploymentLaw HQ, a site dedicated to providing employees with free information about their legal rights. Insatiably curious, Lizabeth is interested in pursuing further intellectual challenges and loves sharing new knowledge with others.

Looking for answers on the jobs crisis? Look at businesses, not workers.

Monday, August 13th, 2012

Laura Clawson

job_seekers_to_openings_june_2012

The campaign to shift the economic narrative from businesses not creating jobs to workers not being good enough to deserve jobs continues. Sometimes it’s wholly cynical. Other times it seems to be done with good intentions. But ultimately, however good the intentions, workers—whether currently employed or struggling to find jobs—are harmed when powerful people promote the idea that the big reason for unemployment lies in the deficiencies of unemployed people.

Arianna Huffington, for instance, is getting on board with what appears to be a well-intentioned version of this storyline:

More than 20 million Americans are currently unemployed or underemployed, yet 3.4 million available jobs remain unfilled because job seekers lack the necessary skills.

This sentence should, for most readers, refute itself. There are more than 3 million jobs that not one of the more than 20 million unemployed or underemployed people can’t fill because they, the unemployed people, aren’t skilled enough? It’s a common line, and if it’s true, it points to a need for huge government investment in higher education and technical training. But the evidence suggests it’s just not true that skills and training are the real issue here.
For one thing, we have the data showing that recruiting intensity—how hard businesses are actually trying to find people to fill the jobs they claim they want to fill—is very low, far below what it was before the recession.

recruiting_intensity

Other studies, too, find “limited evidence of skills mismatch”; in other words, in a few areas there may be a scarcity of workers already trained to do vacant jobs, but it’s not widespread, certainly not enough so to explain the levels of unemployment we see. That’s pretty clearly visible when you look at a breakdown of jobless people and job openings by industry:

unemployed_and_job_openings_by_industry

Another measure of how workers—currently employed workers—feel about the actual, real-life availability of jobs lies in how many of those workers quit their jobs. Usually you quit one job either because you have another, better job prospect, or because you feel like it won’t be too hard to find an equally good job. But, the Economic Policy Institute’s Elise Gould writes, that’s not the case:

If the economy were healthier, we would expect a larger number of voluntary quits, which would signal that workers are more confident about outside job opportunities. Voluntary quits are also on a general upward climb, having increased 20.7 percent since June 2009. But they too have a long way to go; they are still 26.8 percent below their 2007 average.

Yet despite evidence piling on evidence that high unemployment is because of a lack of available jobs and that if allegedly available jobs go unfilled, it’s only very rarely because of a lack of skilled workers, we still hear a lot about how the problem is that workers need more training.

Many of the people involved in the campaign to highlight “what we the people can do to accelerate job creation and fill job openings” that Arianna Huffington is promoting doubtless have good intentions. And the campaign as she describes it does focus some on job creation, mainly through small business. (That’s a focus that may help some, but again fails to challenge the big businesses that are the real culprits in the jobs crisis.) But as long as the idea that there are millions of for-real job openings that American workers just aren’t good enough to fill is as central a focus as the idea that America needs job creation, this effort will do more to scapegoat workers than to make a dent in unemployment.

This blog originally appeared in Daily Kos Labor on August 12, 2012. Reprinted with permission.

About the Author: Laura Clawson is labor editor at Daily Kos. She has a PhD in sociology from Princeton University and has taught at Dartmouth College. From 2008 to 2011, she was senior writer at Working America, the community affiliate of the AFL-CIO.

Research Raises More Toxic Health Concerns for Popcorn Workers

Friday, August 10th, 2012

Michelle ChenThe aroma of hot buttered popcorn evokes all sorts of childhood nostalgia, but for many workers, those savory vapors pose a modern industrial health hazard.

Evidence has been building over the years of a respiratory illness primarily afflicting factory workers exposed to the microwave-popcorn butter flavorant, diacetyl (DA). Now, researchers have discovered another potential hazard related to DA: long-term risk of Alzheimer’s disease.

Researchers with the University of Minnesota’s Center for Drug Design studied the effect of the “ubiquitous butter-?avoring agent” and detected an association with “long-term neurological toxicity,” particularly among industrial workers who are smothered in the stuff every day.

The federal government has in recent years urged the industry to limit potentially toxic workplace exposures to DA, but it has not defined an explicit regulatory exposure limit. Federal authorities have published advisories for employers to control DA exposure, but like many chemicals wafting across the country’s assembly lines and pervading our processed foods, DA (and similar chemical substitutes) are still amply used, with little restriction on behalf of public health.

Dr. Swati More, one of the study’s authors, says the findings should raise concerns that, in addition to posing respiratory risks, DA exposure “may lead to brain deterioration. The question that needs to be answered is, how much of diacetyl does one need to consume and for how long.”

Though the University of Minnesota study focuses on long-term effects related to beta-amyloid protein clumping in the brain, and was conducted at only the cellular level (not on humans), it adds to a growing body of research on the toxic impacts linked to DA exposure. Academic, media and government investigations have revealed both anecdotal and epidemiological evidence of “popcorn lung.”

The main occupational health issue surrounding popcorn lung, which has been acknowledged by the National Institute for Occupational Safety and Health (NIOSH), is bronchiolitis obliterans. (There is also some evidence of respiratory risk for extreme popcorn eaters.)

An extensive 2006 investigation by the Baltimore Sun’s Andrew Schneider revealed the potential health harms linked to DA exposure at workplaces. On top of the buttery scourge, which could impact many thousands nationwide, was the barrier of intimidation that workers felt under the pressure of their bosses:

The difficulty of assessing workplace illness is further complicated by employees who fear reprisal for complaining about hazards to anyone and by physicians who lack the training to recognize bronchiolitis obliterans and other occupational threats. ….

Their wellbeing falls to physicians, scientists and industrial hygienists trained in occupational medicine, which is the study of workplace hazards — chemical and otherwise. They are the ones who have linked lung disease to exposure to flavorings.

The report notes that efforts to protect workers were constrained by the industry’s tight grip over the regulatory regime. DA was among the many chemicals that the FDA labeled as “Generally Regarded as Safe,” but according to the Sun, “[The FDA] took the word of a panel of scientists hired by the Flavor and Extract Manufacturing Association. Diacetyl was declared safe decades ago because the industry said it was safe, according to a spokesman for the FDA.”

This kind of bureaucratic opacity trickles down to the workers on the factory floor in a devastating way. A 2007 Washington Post story described a worker from a California flavoring factory, Irma Ortiz, who was crippled by the mysterious illness:

Ortiz kept working until one day in December 2005 when she felt, she said, “I put all my strength into the job and I can’t do no more.”…

“Before, I used to do a lot of exercise. I ran from place to place,” she said, her sentences broken into panting phrases as if she were hiking a steep hill. Now, she does not like to be in public because long, body-shaking coughing fits could overcome her at any time. …

The loss of her $17-an-hour job makes keeping up with house payments difficult, said Ortiz’s husband, Victor Mancia.

They are waiting for a lung transplant. “I was perfectly fine when I started,” Ortiz said. “I want to be the same. But my doctor says I’m not going to be the same.”

While the regulatory process on the federal level has stagnated, California has moved ahead by issuing a rule on occupational flavoring exposures.

Dr. Celeste Monforton, a professor at the Department of Environmental & Occupational Health at George Washington University, says the latest research on the popcorn-Alzheimer’s connection is not likely to spur further federal action on popcorn flavoring, as regulators are already focused (though still largely inactive) on the larger epidemiological studies on respiratory effects due to workplace exposures. But Monforton, who has worked with scientific colleagues to press for stronger regulation of DA, sees the results as further proof of how industrial chemicals shape people’s health in ways that researchers have only begun to explore.

“We have this regulatory system, or market system, that basically says, ‘We can expose people to whatever the hell we want, and then, if we find out something’s bad about it, some smart researchers out there will figure out what it’s going to do to you,’” Monforton says.

The diacetyl dilemma, she adds, “is probably one of the worst-best examples of how screwed up our worker protection system is.”

This blog originally appeared in Working In These Times on August 9, 2012. Reprinted with permission.

About the author: Michelle Chen work has appeared in AirAmerica, Extra!, Colorlines and Alternet, along with her self-published zine, cain. She is a regular contributor to In These Times’ workers’ rights blog, Working In These Times, and is a member of the In These Times Board of Editors. She also blogs at Colorlines.com. She can be reached at michellechen @ inthesetimes.com.

NASA Firefighters Protest Steep Cuts

Thursday, August 9th, 2012

mike elkThis week, photos of NASA engineers joyously celebrating their successful Mars rover mission went viral on the Internet. However, for another set of NASA workers–the firefighters at NASA’s Kennedy Space Center in Florida–there has been little joy in the face of imminent slashes to their retirement benefits by NASA contractor G4S.

Last year, G4S, the third largest employer in the world (and the troubled provider of security for the London Olympics), took over the contract to provide firefighting services at NASA’s Kennedy Space Center. G4S continued to employ the 90 firefighters who worked there but demanded contract concessions. For the last year the firefighters have been working under the terms of their previous contract, as negotiated by their union, Transport Workers Union Local 525. But now that the year is coming to an end, G4S is pushing for steep cuts.

Upon taking over the contracts last November, G4S immediately froze the firefighters’ pensions and converted them from a defined pension plan to a 401(k). Now, in negotiations with workers, G4S wants to double workers’ out-of-pocket medical expenses. The company also proposes an 80 percent reduction in its contributions to the firefighters’ retirement plan, forcing workers to pay more out of their own paychecks. The company’s new retirement scheme would cut workers’ retirement income by a minimum of 30 percent, and possibly more for workers who have been there fewer years. Retirement is an important issue for firefighters, who typically retire in their early 50s because of their physically demanding jobs.

“Firemen are walking off [the job] because they are disgusted by [the benefit cuts]. They are finding jobs in other places. Firemen go to work where they know there is a decent wage and they can retire,” says TWU Local 525 President Kevin Smith. “Now the company is giving them such a terrible package that there is no way they can retire like normal firefighters across the country.”

G4S refused to respond to interview requests, saying it could not comment on ongoing negotiations “other than to say that we continue to negotiate with the Transport Workers Union to work towards a successful resolution.“

However, according to TWU Local 525, G4S has said at the bargaining table that the cuts are necessary in order for them to make a profit on the contract, since they can’t get additional money from NASA.“In a lot of contracts, you have a vehicle to get equitable adjustments to meet contract costs. This is a fixed price contract and there is no way to get an adjustment,” explains TWU Local 525 President Kevin Smith.

However, NASA has refused to get involved in the negotiations, saying that legally they cannot do so as a neutral third party.

“I am upset with NASA,” says Smith. “They accepted the bid, so they are responsible for it, but they have no way to fix it. They have a fault with no remedy.”

For now, workers are stepping up their militancy in an attempt to engage NASA. The union firefighters are picketing Kennedy Space Center twice a day, five days a week, demanding simply to maintain the contract they currently have.

“If we don’t stand up to them and fight them, all the other shops are coming through behind us on negotiations,“ says David McGaha, a paramedic and firefighter. “Before you know we are going to be working for minimum wage with no benefits.”

Despite the ongoing picketing, Smith remains pessimistic that the union by itself can successfully pressure NASA to clean up the mess.

“I am certainly not a big enough person to put pressure on NASA,” says Smith. “I have been picketing them for three years and I’m getting nowhere. It’s going to take a Senator or President Obama to step up.”

This blog originally appeared in Working In These Times on August 8, 2012. Reprinted with permission.

About the Author: Mike Elk is an In These Times Staff Writer and a regular contributor to the labor blog Working In These Times. He can be reached at mike@inthesetimes.com.

Decline of Good Jobs Tied to Workers’ Decreased Bargaining Power

Wednesday, August 8th, 2012
Credit: Joe Kekeris

Credit: Joe Kekeris

Many U.S. workers don’t have jobs—nearly 13 million. Less known, however, is that many more don’t have good jobs—fewer than one-quarter of America’s workforce, according to a new report from the Center for Economic and Policy Research (CEPR). The center defines a good job as one that pays at least $18.50 an hour, or $37,000 per year, equal to the inflation-adjusted earnings of the typical male worker in 1979. A good job also includes employer-provided health insurance and a retirement plan (click on chart at left to expand).

The lack of available good jobs is not new. As CEPR finds, compared with 1979, the U.S. economy has lost about one-third (28 percent to 38 percent) of its capacity to generate good jobs.

But why?

The report, “Where Have All the Good Jobs Gone?” outlines how the decline in the economy’s ability to produce good jobs is directly related workers’ declining bargaining power. The study points to the fall in the inflation-adjusted value of the minimum wage, the decline in union representation, trade deals, high unemployment and other factors that reduce the bargaining power of workers relative to their employers.

“The standard explanation for this loss of the economy’s ability to create good jobs is that most workers skills have not kept up with the pace of technological change,” says John Schmitt, senior economist at CEPR and one of the report’s co-authors.

But it is hard to reconcile that view with the fact that even workers with a college degree are less likely to have a good job now than at the end of the 1970s.

Further, according to the report, more than one-third of U.S. workers had a four-year college degree or more, up from just one-fifth in 1979.

Given that older and better-educated workers generally receive higher pay and better benefits, we would have expected the share of “good jobs” in the economy to have increased in line with improvements in the quality of workforce. Instead, the share of “good jobs” in the U.S. economy has actually fallen.

Get the full report here.

This blog originally appeared in AFL-CIO on August 1, 2012. Reprinted with permission.

About the Author: Tula Connell got her first union card while she worked her way through college as a banquet bartender for the Pfister Hotel in Milwaukee they were represented by a hotel and restaurant local union (the names of the national unions were different then than they are now). With a background in journalism (covering bull roping in Texas and school boards in Virginia) she started working in the labor movement in 1991. Beginning as a writer for SEIU (and OPEIU member), she now blogs under the title of AFL-CIO managing editor.

End of Extended Jobless Benefits Hits More than 500,000

Tuesday, August 7th, 2012

Image: Mike HallThis month marks the end of the federal extended unemployment insurance benefits program for 35 states with the nation’s highest jobless rates. More than half a million long-term jobless workers have lost their unemployment lifeline.

Chad Stone of the Center on Budget and Policy Priorities (CBPP) says:

As we’ve explained previously, EB [extended benefits] will no longer be available in any state, not because most states’ economies have improved to anywhere near pre-recession conditions, but because they have not significantly deteriorated in the past three years.

The end of the program that provided up to 20 additional weeks of jobless benefits—in addition to the states’ usual 26 weeks—and the additional weeks available under the federal Emergency Unemployment Compensation (EUC), was part of legislation passed in February to keep the EUC alive through 2012.

That bill reduced the number of weeks of available to jobless workers and also changed the formulas that would trigger extra federal jobless benefits, in effect, cutting benefits even further by setting higher thresholds for unemployment pain. Click here for a closer look from the National Employment Law Project (NELP).

The cuts, a recent report in USA Today notes:

are nudging some Americans into poverty, straining social services just as states and localities face their own budget woes and further crimping weak economic growth as those who lose benefits spend less.

The average unemployed American has been out of work 40 weeks, according to the Labor Department, and there are still about three jobless people for every job opening.

If Congress doesn’t act when it returns after August recess, the situation for long-term jobless workers will grow even more dire because the entire federal EUC expires at the end of the year, leaving workers only state benefits upon which to rely.

Legislation to keep the EUC operating is expected. But with the Republican lawmakers’ track record of blocking, filibustering and other delaying tactics in previous attempts to extend the federal unemployment insurance benefits, the outlook is uncertain.

NELP’s George Wentworth told USA Today:

There’s going to be lots of people without any income still unable to find a job. You’re going to see these people not be able to feed their families and not able to pay their mortgages. It will have a devastating impact on a lot of local economies.

This blog originally appeared in AFL-CIO on August 7, 2012. Reprinted with permission.

About the author: Mike Hall is a former West Virginia newspaper reporter, staff writer for the United Mine Workers Journal and managing editor of the Seafarers Log. He came to the AFL-CIO in 1989 and has written for several federation publications, focusing on legislation and politics, especially grassroots mobilization and workplace safety.

Tax breaks for businesses led to state unemployment funds going broke

Monday, August 6th, 2012

Laura ClawsonOver the past four years, a whopping 36 states have had to borrow from the federal government to pay unemployment insurance benefits. Obviously a recession with high unemployment has a lot to do with that, but not as much as you might think. Tax breaks for businesses (PDF) are once again a hidden culprit for state budget problems.

A new report from the National Employment Law Project shows that, recession or not, many states could have avoided borrowing for unemployment payments if they hadn’t spent a decade weakening their unemployment insurance trust funds by slashing employer contributions:

Between 1995 and 2005, 31 states reduced employer contribution rates by at least one?fifth (Henchman 2011, 16), causing the nation’s average employer contribution rate over the decade leading up to the Great Recession to fall to its lowest point in the program’s 75?year history.

As a result, going into the recession, state unemployment insurance funds were short of recommended minimum solvency standards by a combined $38 billion, and 30 of the 34 states not meeting that minimum standard ended up borrowing, combined with just six of 19 states that started the recession with adequate funds. Adequate unemployment insurance reserves could have reduced borrowing to 13 states borrowing $9 billion rather than what ended up happening, with 31 states borrowing $42 billion.

But while the funding shortfalls came from employers contributing less than at any point in the previous 75 years, it’s been jobless people who’ve gotten the blame and felt the pinch, with “At least ten states [passing] legislation to reduce the number of weeks of benefits available, severely restrict eligibility, or impose measures designed to discourage people from filing UI claims.” Taxpayers, too, are paying, since states have already paid $3 billion in interest and penalties on what they’ve borrowed for unemployment, with more to come.

Businesses paid less when the economy was decent (not even good for many of the years of contribution cuts). Then the bad economy hit unemployed people first when they lost their jobs, second when their benefits were cut despite ongoing high unemployment. Again and again we’re told that a bad economy is not the time to raise taxes on businesses or the wealthy—apparently it’s never the moment for that, always the moment to cut another hole in the safety net.

This blog originally appeared in Daily Kos Labor on August 3, 2012. Reprinted with permission.

About the Author: Laura Clawson is labor editor at Daily Kos. She has a PhD in sociology from Princeton University and has taught at Dartmouth College. From 2008 to 2011, she was senior writer at Working America, the community affiliate of the AFL-CIO.

New Report Reveals The Extent of For-Profit Colleges’ Corruption

Friday, August 3rd, 2012

Roger BybeeCutbacks in public technical school and university programs have created new opportunities for for-profit colleges, which have skillfully used public money to churn displaced workers and other students through their machinery, leaving them worse off than before, according to the findings of a two-year investigation of 30 for-profit colleges released this week by Sen. Tom Harkin (D-Iowa).

The report from Harkin, chair of the Senate’s Health, Education, Labor, and Pensions (HELP) Committee, confirms what Michael Rosen, president of American Federation of Teachers (AFT) Local 212 at Milwaukee Area Technical College, has been witnessing in recent years. Laid-off workers desperate for a new career, Iraq and Afghanistan war veterans hoping to re-start their lives, and recent high school graduates have all been frustrated by long waiting lines for programs at public technical schools and universities. Rosen has been a passionate critic of public technical-college cutbacks, the distortion of technical education as it falls under increasing corporate influence, and the growth of for-profit colleges like the University of Phoenix, Kaplan and others.

“The losers are students who are paying four to five times as much for a public education, but wind up with an inferior education that doesn’t help them in today’s job market,” Rosen says. “In this economy, we are seeing layoffs in every occupation—whether flight attendants or factory workers—so the number of people looking for training has increased, but the funding for technical schools has decreased. This leaves some people out [unable to find the program they want in public institutions], and these people are preyed upon by for-profit colleges.”

And Rosen notes it’s not only the students who are losing out, but also U.S. taxpayers. “The for-profit schools get over $32 billion or 80% of their revenue from federal funds via student loans and grants,” Rosen says. “They cash in on up to 25% of federal financial aid, but account for just 13% of college students.”

The HELP report makes for a thorough indictment of the for–profit college industry, which has expanded exponentially over the last few years. Enrollment more than tripled from 1998 to 2008 to about 2.4 million students. Fully three-quarters are enrolled at colleges owned by huge publicly traded companies with a mission of maximizing profit. Increasingly, private equity firms are buying into the industry.

Among its appalling findings, Harkin’s investigation revealed:

FEDERAL FUNDING THE FOUNT OF PROFITS: Over 80% of the for-profit colleges’ revenue comes from taxpayers. Since veterans’ benefits do not count against a 90% ceiling on federal funding, veterans have become a target for for-profit college recruiters.

PROFITS EXCEED INSTRUCTIONAL COSTS: “Among the 30 companies, an average of 22.4 percent of revenue went to marketing and recruiting, 19.4 percent to profits and 17.7 percent to instruction,” reported Tamar Lewin in an excellent New York Times piece on the report.

FIND ‘EM AND FORGET ‘EM: The for-profit schools also have an extraordinarily miserable record in retaining and educating their students: “the majority of students they enroll leave without a degree, half of those within four months,” Lewin wrote.

And recruiting practices—until some recent reforms—stressed enlisting students without regard to their suitability for the schools, with recruiters formerly paid on a “piecework”-style basis for each student they recruited, Rosen points out. The 30 for-profits studied have roughly a 9-1 ratio between recruiters and support staff to assist the students in planning their careers.

“Enrolling students,” wrote Lewin, “and getting their federal financial aid is the heart of the business, and in 2010, the report found, the colleges studied had a total of 32,496 recruiters, compared with 3,512 career-services staff members.”

Meanwhile, according to the AFT’s Rosen, the quality of teaching in the for-profits is generally abominably low.

“For students in medical fields like nursing, they don’t work under an instructor and actually have direct patient contact,” says Rosen. “The education is just in the classroom environment, and even there, they don’t even have the proper equipment. For the relatively small percentage of students who manage to graduate from for-profit schools, they discover soon that their degree is generally not taken seriously by prospective employers.”

ULTRA-COSTLY FOR STUDENTS: The report found that associate-degree and certificate programs at for-profit colleges averaged about four times the cost of those at community colleges and public universities.

“And tuition decisions seem to be driven more by profit-seeking than instructional costs,” Lewin wrote. An internal memo from the finance director of a Kaplan nursing program in Sacramento, for example, recommended an 8 percent increase in fees, saying that “with the new pricing, we can lose two students and still make the same profit.”

The students who drop out are left to make loan payments without having gained any credentials. It is not surprising, then, that former students of for-profit schools account for 45% of college loan delinquencies.

Despite the overwhelming evidence amassed by the investigation, Republican members of the HELP Committee claimed that the study showed antipathy to the sacrosanct “free market” (as if an industry that gets more than 80% of its funding is part of the “free market”!). They also objected to the inclusion of some testimony and documents damaging to the industry. As Lewin noted:

The Republicans on the Senate committee criticized the Democrats’ investigation for including testimony from Steve Eisman, the hedge fund manager who was one of the first to compare for-profit colleges to the subprime mortgage industry; for making public the internal company documents that the committee gathered; for refusing to broaden the investigation to include abuses by nonprofit colleges; and for being what they said was a hostile partisan effort.

The Republicans’ unwillingness to confront the industry’s corruption—enabled by the clear misuse of taxpayer dollars—is more testimony to the GOP’s slavish servitude to corporate donors and lobbyists. But the for-profit schools’ loyal protectors have been drawn from both parties. As David Halperin pointed out,

There is stalemate in Washington on holding this industry accountable, because the big money that it spends on lobbying, lawyering, and campaign contributions has bought the allegiance of many congressional Republicans and Democrats and has thwarted federal regulations.

And so, for the forseeable future, the for-profit schools’ hustle will continue to squeeze earnings out of America’s most vulnerable citizens—displaced workers, recently discharged veterans, and naive high school graduates—with an assist from U.S. taxpayers.

This blog originally appeared in Working In These Times on August 3, 2012. Reprinted with permission.

About the Author: Roger Bybee is a Milwaukee-based freelance writer and progressive publicity consultant whose work has appeared in numerous national publications, including Z magazine, Dollars & Sense, Yes!, The Progressive, Multinational Monitor, The American Prospect and Foreign Policy in Focus. His e-mail address is winterbybee@gmail.com.

One In Four American Workers Will Be In Low-Wage Jobs For The Next Decade

Thursday, August 2nd, 2012

waldron_travis_bioThe share of the economy made up by low-wage jobs has grown since the Great Recession, and according to one new study, it won’t shrink in the future even as the economy continues to recover. The number of Americans working in low-wage jobs — those that pay wages equal to or below the poverty line — will remain steady over the next decade, according to the Economic Policy Institute, as CNNMoney reports:

Some 28% of workers are expected to hold low-wage jobs in 2020, roughly the same percentage as in 2010, according to a study by the Economic Policy Institute.

The study defines low-paying jobs as those with wages at or below what full-time workers must earn to live above the poverty level for a family of four. In 2011, this was $23,005, or $11.06 an hour.

The study is the latest to detail the growth of low-wage occupations in the United States. A recent report from the National Employment Law Project found that more than one in four private sector workers now make less than $10 an hour, an even lower threshold than was used in the EPI study. The five industries that are comprised mostly of low-wage workers, meanwhile, are growing faster than the overall American economy.

While the number of low-wage jobs has increased, so has the gap between low-wage workers and the executives who employ them. The federal minimum wage would need to be raised by more than $3 an hour to match the buying power it had in 1968, and overall wages in the U.S. have been virtually stagnant for decades, even as pay for chief executives has risen exponentially. At the 50 companies that employ the largest number of low-wage workers, chief executives made an average of $9.4 million last year.

This blog originally appeared in Think Progress on August 2, 2012. Reprinted with permission.

About the Author: Travis Waldron is a reporter/blogger for ThinkProgress.org at the Center for American Progress Action Fund. Travis grew up in Louisville, Kentucky, and holds a BA in journalism and political science from the University of Kentucky. Before coming to ThinkProgress, he worked as a press aide at the Health Information Center and as a staffer on Kentucky Attorney General Jack Conway’s 2010 Senate campaign. He also interned at National Journal’s Hotline and was a sports writer and political columnist at the Kentucky Kernel, the University of Kentucky’s daily student newspaper.

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