Category Archives: labor market

The Wrong Way to Do Paid Family Leave

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From today’s New York Times:

Senator Marco Rubio just made a small bit of history: He became the first of his party to put forward a national paid family leave program. On Aug. 2, he introduced a bill that would allow any American to take paid time off to be with a new child.

It marks a surprising step forward: Paid family leave has become bipartisan. Unfortunately, smart policy design has not. Instead of creating a new, desperately needed benefit, Mr. Rubio’s bill would make parents cash in their retirement to take care of their children today.

All developed countries — except for the United States — guarantee at least some paid maternity leave, ranging from six weeks in Portugal to 43 weeks in Greece. Americans are only entitled to up to 12 weeks of unpaid leave.

Even securing unpaid time off was a bruising political battle. The former speaker of the House, John Boehner, called unpaid family leave “another example of yuppie empowerment,” and Representative Cass Ballenger reportedly smeared it as “socialism.” The unpaid Family and Medical Leave Act suffered two vetoes from President George H.W. Bush, a Republican, and was signed into law only after Bill Clinton, a Democrat, won the White House.

Read the complete article here.

In America, wage growth is getting wiped out entirely by inflation

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From today’s Washington Post:

Rising prices have erased U.S. workers’ meager wage gains, the latest sign strong economic growth has not translated into greater prosperity for the middle class and working class.

Cost of living was up 2.9 percent from July 2017 to July 2018, the Labor Department reported Friday, an inflation rate that outstripped a 2.7 percent increase in wages over the same period. The average U.S. “real wage,” a federal measure of pay that takes inflation into account, fell to $10.76 an hour last month, 2 cents down from where it was a year ago.

The stagnant pay comes despite accelerating U.S. growth, which has increased in the past year and topped 4 percent in the second quarter of 2018 — the highest rate since mid-2014.

The lack of raises have befuddled economists and policymakers, who hoped that after job openings hit record highs and the unemployment rate dipped to the lowest level in decades, employers would give beefy raises to attract and retain employees. But so far, gains have been slight, and small recent increases are now being eclipsed by rising prices.

Inflation hit a six-year high this summer, driven in part by a jump in energy costs. The price of a gallon of gas has increased 50 cents in the past year, up to a national average of $2.87, according to AAA. Some analysts expect the climb in energy prices to halt soon, which should bring the overall inflation rate down and possibly lift real wages slightly.

Consumers are also paying more for housing, health care and car insurance, the federal government reported Friday. Additional price hikes could be coming as President Trump’s new tariffs boost prices of cheap imported products U.S. consumers rely on. And many economists warn that growth might have peaked for this expansion.

Read the complete article here.

‘Too Little Too Late’: Bankruptcy Booms Among Older Americans

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From today’s New York Times:

For a rapidly growing share of older Americans, traditional ideas about life in retirement are being upended by a dismal reality: bankruptcy.

The signs of potential trouble — vanishing pensions, soaring medical expenses, inadequate savings — have been building for years. Now, new research sheds light on the scope of the problem: The rate of people 65 and older filing for bankruptcy is three times what it was in 1991, the study found, and the same group accounts for a far greater share of all filers.

Driving the surge, the study suggests, is a three-decade shift of financial risk from government and employers to individuals, who are bearing an ever-greater responsibility for their own financial well-being as the social safety net shrinks.

The transfer has come in the form of, among other things, longer waits for full Social Security benefits, the replacement of employer-provided pensions with 401(k) savings plans and more out-of-pocket spending on health care. Declining incomes, whether in retirement or leading up to it, compound the challenge.

Cheryl Mcleod of Las Vegas filed for bankruptcy in January after struggling to keep up with her mortgage payments and other expenses. “I am 70, and I am working for less money than I ever did in my life,” she said. “This life stuff happens.”

As the study, from the Consumer Bankruptcy Project, explains, older people whose finances are precarious have few places to turn. “When the costs of aging are off-loaded onto a population that simply does not have access to adequate resources, something has to give,” the study says, “and older Americans turn to what little is left of the social safety net — bankruptcy court.”

Read the complete article here.

Employers Are Finally Ready to Talk About How Much They Pay

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From today’s Bloomberg News:

Up until last week, none of the 170 employees working at Verve, a marketing company, knew what anyone else made. Now, everyone’s salary is listed on an internal document for everyone to see.

By 2019, all 1,100 employees at CareHere, a Nashville based health-care company, will know the pay ranges for all positions in the company. Fog Creek, a New York-based software company with about three dozen employees, did the same last year. As did Hired, an online job search network in San Francisco that employs 200 people.

Employers have long discouraged talking about money at work, in part because obscuring salary information keeps compensation costs down. But that attitude is starting to change. In a survey of almost 2,000 employers by the consulting firm Willis Towers Watson, more than half of the respondents said they plan to increase transparency around pay decisions in the next year.

Pay transparency can mean a lot of things. A minority of companies are taking the most extreme approach, where everyone knows what everyone else makes. A larger share of companies are letting employees in on the voodoo behind their pay practices and explaining what goes into compensation decisions. Others are revealing pay ranges for positions and posting that information alongside job listings.

“Many of us who entered the workforce a longer time ago entered into a culture where you didn’t talk about pay,” said Sandra McLellan, who heads Willis Towers Watson’s North America rewards practice. “Today, people are much more comfortable discussing what they earn.”

Employees now have more access to compensation data than ever before—just not necessarily from their employer. Sites such as Glassdoor and Fairygodboss aggregate and list pay information for thousands of jobs across industries, giving workers a clearer picture of how their pay stacks up against that of their co-workers. Even LinkedIn has a feature that breaks down pay by job title and location.

The proliferation of information is leading to some issues for employers. More than anything, people want to feel like they’re being paid fairly, surveys have found. Armed with this new information, many of them are going to their managers and complaining that they’re not.

Read the complete article here.

Disneyland reaches a tentative contract settlement with workers, ending a heated battle that lasted months

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From today’s Los Angeles Times:

Walt Disney Co. reached a tentative settlement Monday with four unions at the Disneyland Resort, putting an end to a contentious dispute that attracted the attention of Sen. Bernie Sanders and prompted a ballot measure to require the Burbank media giant to pay resort workers a “living wage.”

Although details of the settlement were not disclosed, the agreement appears to end a heated, months-long contract dispute with about 9,700 employees who work in the eateries and retail shops, operate the attractions and provide maintenance at the two Anaheim theme parks, the Disney hotels and nearby shopping district.

“The Disneyland Resort and Master Services Council are proud to have reached a tentative agreement, which we are hopeful will be ratified later this week,” the park and the council that represents the workers said in a joint statement. “We have had a successful history of working together since Disneyland Park opened in 1955, and this contract continues that shared commitment to cast members.”

Union members vote on the proposed contract Thursday. Negotiations began in April for the contract that was set to end in June. Employees have been working under an extension to the contract.

The unions have been pushing Disney to pay a “living wage” by, among other tactics, commissioning a study that looked at the economic hardship of the workers and sponsoring a rally featuring Sanders, who called on Disney to share its wealth with employees who are struggling to make ends meet.

The unions were successful in collecting at least 13,185 valid signatures — or at least 10% of the city’s voters — to put on the Nov. 6 ballot a measure requiring large hospitality companies that accept a subsidy from the city to pay at least $15 an hour, with salaries rising $1 an hour every Jan. 1 through 2022. Once the wage reaches $18 an hour, annual raises would then be tied to the cost of living.

Read the complete article here.

Tariffs Imperil Workers in South Carolina, Deep in the Heart of Trump Country

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From today’s New York Times:

In the middle of David Britt’s campaign to get BMW to put a car factory here, a man grabbed him by the tie while he was in a restaurant.

“Don’t give that land to the Germans,” the man hissed to Mr. Britt, a county official.

Two decades later, the automaker has become the most important local job creator, earning the affection of a deep-red county where one in 10 people earns a living making vehicles or their parts.

The Spartanburg plant is BMW’s biggest in the world. It has helped draw more than 200 companies from two dozen countries to Spartanburg County. And the German company — not an American icon like Ford or General Motors — is now the largest exporter of cars made in the United States, turning the port of Charleston, S.C., into a hub for global trade.

But by setting off a global trade battle, President Trump is threatening the town’s livelihood. People aren’t happy.

“BMW saved Spartanburg and transformed South Carolina into a manufacturing mecca to the world,” said Mr. Britt, a member of the County Council. “When you mess with the golden goose, they’re family, and you’re messing with me.”

On Thursday, the Commerce Department is holding a hearing in Washington on whether imported cars and car parts harm national security, the premise of an administration plan to impose hefty duties. If imposed, the tariffs would most likely have deeper and wider-reaching repercussions for the economy than levies on fish or steel. Cars don’t come together in one plant, with one work force — they’re the final result of hundreds of companies working together, in a supply chain that can snake through small American towns and cross oceans.

Automakers have lined up to oppose the measure, which they say would make it more expensive to build cars here and would prompt other countries to respond in kind, hurting exports.

Read the complete article here.

Breaking: Uber Is Target of Sex Discrimination Inquiry by EEOC

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From today’s New York Times:

Federal officials are investigating allegations that Uber discriminated against women in hiring and pay, another federal inquiry into a company that has been rocked by scandals over its workplace culture and other issues.

The Equal Employment Opportunity Commission, which polices work force discrimination, began investigating Uber last August, according to two people familiar with the inquiry who declined to be identified because they were not authorized to discuss an active investigation.

The commission is examining whether Uber systematically paid women less than men and discriminated against women in the hiring process, among other matters, one of the people said. The Wall Street Journal earlier reported the investigation.

The investigation shows how difficult it has been for Uber to move past its tumultuous 2017. The company faced numerous accusations of workplacesex discrimination and harassment last year, as well as allegations of illegal behavior by its executives, such as spying on and stealing secretsfrom rivals. The scandals forced out Uber’s co-founder and chief executive, Travis Kalanick. His successor, Dara Khosrowshahi, has pledged to reformthe company.

 Last week, The New York Times reported that Uber’s new chief operating officer, Barney Harford, a handpicked deputy of Mr. Khosrowshahi’s, was under scrutiny for making racially insensitive comments. Also last week, Uber’s chief people officer, Liane Hornsey, resigned amid accusations that she improperly handled complaints of racial discrimination at the company.

Read the complete article here.

In #MeToo Era Companies Embrace Rolling Background Checks at Work

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From today’s Bloomberg News Service:

Jay Cradeur takes pride in his 4.9 driver rating on Uber Technologies Inc.’s five-star scale and the almost 19,000 rides he’s given in the capital of ride sharing, San Francisco. So he was puzzled — and more than a little annoyed — when Uber kicked him off its platform last December.

Little did he know that he had fallen victim to a growing practice among U.S employers: regular background checks of existing workers in addition to the routine pre-employment screening. Uber’s post-hiring check had thrown up a red flag on Cradeur, an issue that took six weeks to resolve and which the company later attributed to a “technical error.”

The number of companies constantly monitoring employees isn’t known, but the screening industry itself has seen explosive growth in recent years. Membership in the National Association of Professional Background Screeners more than quadrupled to 917 last year from 195 members when it was formed in 2003, said Scott Hall, the organization’s chairman and also chief operating officer of the screening company, FirstPoint.

“I think the concern is coming from a fear that either something was missed the first time around or a fear of, ‘Really do we know who’s working for us?’” said Jon Hyman, a Cleveland employment lawyer who has seen a pick-up in calls from manufacturers in the past six months inquiring about continuous checks.

“I think the MeToo movement plays into this, too, because they wonder, ‘Do we have people who might have the potential to harass?” he added.

Companies are trying to balance privacy concerns with mounting pressure to do a better job in rooting out workers who might steal, harass or even commit violent acts in the workplace. Some high-profile incidents among Uber drivers are helping spook employers into taking action, including an Uber Eats driver in Atlanta who allegedly shot and killed a customer in February.

Healthcare and financial service workers have gone through extra screening for years, but the practice of running periodic checks or continuous checks is spreading to other sectors including manufacturing and retailing within the past six to 12 months, said Tim Gordon, senior vice president of background-screening company, InfoMart Inc.

Read the complete article here.

Record numbers of folks age 85+ are working. Here’s what they’re doing.

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From today’s Washington Post:

Seventy may be the new 60, and 80 may be the new 70, but 85 is still pretty old to work in America. Yet in some ways, it is the era of the very old worker in America.

Overall, 255,000 Americans 85 years old or older were working over the past 12 months. That’s 4.4 percent of Americans that age, up from 2.6 percent in 2006, before the recession. It’s the highest number on record.

They’re doing all sorts of jobs — crossing guards, farmers and ranchers, even truckers, as my colleague Heather Long revealed in a front-page story last week. Indeed, there are between 1,000 and 3,000 U.S. truckers age 85 or older, based on 2016 Census Bureau figures. Their ranks have roughly doubled since the Great Recession.

America’s aging workforce has defined the post-Great Recession labor market. Baby boomers and their parents are working longeras life expectancies grow, retirement plans shrink, education levels rise and work becomes less physically demanding. Labor Department figures show that at every year of age above 55, U.S. residents are working or looking for work at the highest rates on record.

At the lower end of the age curve, the opposite holds true. Workers age 30 and younger are staying on the sidelines at rates not seen since the 1960s and ’70s, when women weren’t yet entering the workforce at the level they are today.

Read the complete article here.

Further Thoughts on a Job Guarantee

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From today’s New York Times “Opinion” Section by Paul Krugman:

As I wrote the other day, Alexandria Ocasio-Cortez may call herself a socialist and represent the left wing of the Democratic party, but her policy ideas are pretty reasonable. In fact, Medicare for All is totally reasonable; any arguments against it are essentially political rather than economic.

A federal jobs guarantee is more problematic, and a number of progressive economists with significant platforms have argued against it: Josh Bivens, Dean Baker, Larry Summers. (Yes, Larry Summers: whatever you think of his role in the Clinton and Obama administrations, he’s a daring, unconventional thinker when not in office, with a strongly progressive lean.) And I myself don’t think it’s the best way to deal with the problem of low pay and inadequate employment; like Bivens and his colleagues at EPI, I’d go for a more targeted set of policies.

But I’m fine with candidates like AOC (can we start abbreviating?) proposing the jobs guarantee, for a couple of reasons. One is that realistically, a blanket jobs guarantee is unlikely to happen, so proposing one is more about highlighting the very real problems of wages and employment than about the specifics of a solution. Beyond that, some of the critiques are, I think, off base.

Here’s the way some of the critiques seem to run: a large share of the U.S. work force – Baker says 25 percent, but it looks like around a third to me – makes less than $15 an hour. So offering these workers a higher wage would bring a huge rush into public employment, implying a very expensive program.

What’s wrong with this argument? The key point is that all those sub-$15 workers aren’t just sitting around collecting paychecks: they’re producing goods and (mostly) services that the public wants. The public will still want those services even if the government guarantees alternative employment, so the firms providing those services won’t go away; they’ll just have to raise wages enough to hold on to their employees, who would now have an alternative.

Now, that doesn’t mean zero job loss. Employers might replace some workers with machines; they would have to raise prices, meaning that they would sell less; so private employment might go down.

But all this is true about increases in the minimum wage, too. And we have a lot of evidence on what minimum wage increases do, because we get a natural experiment every time a state raises its minimum wage but neighboring states don’t. What this evidence shows is that minimum wage hikes have very little effect on employment.

So if we think of a job guarantee as a minimum wage hike backstopped by a public option for employment, we should not expect a mass migration of workers from private to public jobs.

Read the complete article here.