Supreme Court delivers blow to organized labor in fees dispute

From Reuter’s News Service:

The U.S. Supreme Court on Wednesday dealt a big blow to organized labor, ruling that non-members cannot be forced in certain states to pay fees to unions representing public employees such as teachers and police, shutting off a key union revenue source.

The 5-4 ruling overturned a 1977 Supreme Court precedent that had permitted these so-called agency fees, which have been collected from millions of workers who opt not to join unions in lieu of union dues to fund non-political activities such as collective bargaining. The court’s conservative justices were in the majority, with the liberal justices dissenting.

Forcing non-members to pay these fees to unions whose views they may oppose violates their rights to free speech and free association under the U.S. Constitution’s First Amendment, the court said in the ruling authored by Justice Samuel Alito.

“States and public-sector unions may no longer extract agency fees from non-consenting employees,” Alito wrote. In a dissent, Justice Elena Kagan accused the court’s conservatives of “weaponizing the First Amendment” to intervene in economic and regulatory policy.

“This case was nothing more than a blatant political attack to further rig our economy and democracy against everyday Americans in favor of the wealthy and powerful,” public-sector unions including the American Federation of State, County and Municipal Employees (AFSCME), the union directly involved in the case, said in a statement.

Two dozen states had required agency fees. The ruling means that the estimated 5 million non-union workers for state and local governments who have paid them can stop. Agency fees do not involve federal or private-sector employees.

The decision represented a major victory for conservative activists who long have sought to curb the influence of public-sector unions, which often support the Democratic Party and liberal causes.

With the U.S. organized labor movement already in a diminished state compared to past decades, the ruling now deprives unions of a vital revenue stream, undercuts their ability to attract new members and retain current members, and undermines their ability to spend in political races.

Republican President Donald Trump, whose administration backed the challenge to the fees, welcomed the ruling, writing on Twitter, “Big loss for the coffers of the Democrats!”

Read the complete article here.

Robots or Job Training: Manufacturers Struggle to Improve Economic Fortunes

From today’s New York Times:

For Anthony Nighswander, rock-bottom unemployment is both a headache and an opportunity. For businesses and workers, it could be the key to reversing one of the country’s most vexing economic problems: slow productivity growth.

Mr. Nighswander is president of APT Manufacturing Solutions, which builds and installs robotic equipment to help other manufacturers automate their assembly lines. Lately, business has been booming: With the unemployment rate now below 4 percent, he says he gets calls every day from companies looking for robots to help ease their labor crunch.

The problem is that Mr. Nighswander faces a hiring challenge in his own business, especially because, in this town of fewer than 4,000 people near the Indiana border, the pool of skilled workers is shallow. But rather than turn to robots himself, he has adopted a lower-tech solution: training. APT has begun offering apprenticeships, covering the cost of college for its workers, and three years ago it started teaching manufacturing skills to high school students.

 “I never thought that I would be training high school students in our facilities,” Mr. Nighswander said. “What I knew was that I was in survival mode. I knew the orders for robots and for automation were coming in faster than I could get the jobs out.”
That kind of urgency could prove to be a powerful economic force. The investments in training and automation by Mr. Nighswander and his customers should, over time, make their companies more productive. Multiplied across thousands of companies, those decisions could have benefits for companies and workers that endure even after today’s hot economy inevitably cools.
Productivity — how much value the economy generates in an average hour of work — gets less public attention than more intuitive economic concepts such as employment and wages, but it may be even more fundamental.
Rising productivity — whether through better technology, more educated workers or smarter business strategies — is why people’s economic fortunes, on average, improve over time. When productivity growth is strong, companies can afford to pay workers more without eating into their own profit margins, letting a rising tide lift all boats.
Since the end of the Great Recession, however — and, to a lesser extent, even during the stronger economic times that preceded it — productivity growth has been confoundingly weak, forcing business owners and workers to compete over a relatively meager sliver of economic growth. There have been peaks and valleys, but not since the dot-com boom of the late 1990s and early 2000s has the American economy consistently delivered productivity growth above 2 percent a year.
Now some economists think a rebound could be on the way. For most of the recovery, wage growth has been anemic, suggesting companies faced relatively little pressure to invest in automation or to find other ways to squeeze more production out of workers. But as the labor market tightens, companies’ incentives could be changing.

Read the complete article here.

In parts of America, Department of Labor hasn’t updated “prevailing wage” for taxpayer-funded work in decades

From Bloomberg News Network:

Thanks to a web of loopholes and limits, the federal government has been green-lighting hourly pay of just $7.25 for some construction workers laboring on taxpayer-funded projects, despite decades-old laws that promise them the “prevailing wage.”

Over the past year, the U.S. Department of Labor has formally given approval for contractors to pay $7.25 for specific government-funded projects in six Texas counties, according to letters reviewed by Bloomberg. Those counties are among dozens around the nation where the government-calculated prevailing wage listed for certain work—such as by some carpenters in North Carolina, bulldozer operators in Kansas and cement masons in Nebraska—is just the minimum wage.

That’s in part because, according to publicly available data from the Labor Department’s Wage and Hour Division, the agency is relying on wage survey data in more than 50 jurisdictions that’s from the 1980s or earlier. Experts said that’s a far cry from what Congress intended when, starting with the Depression-era Davis Bacon Act, it passed a series of laws meant to ensure that private companies contracted for government-backed projects pay their workers at least in the vicinity of what others get for the same work in the same geographic area.

In an emailed statement, the Labor Department didn’t address whether the decades-old data is a problem.

“The Wage and Hour Division carefully plans where to survey on an annual basis to ensure that prevailing wage rates reflect the reality of construction pay practices in a locality. The division identifies potential survey areas based on a number of criteria, including where available data on active construction projects in an area reveal changes in local pay practices such that a survey is necessary,” the department said.

Because government contracts are often required to go to the “lowest responsible bidder,” supporters say prevailing wage rules prevent a “race to the bottom” in which exploitative companies who pay workers less outbid safer, higher-quality firms, and in turn drive down industry standards to pocket more taxpayer dollars. Opponents of prevailing wage rules counter that they’re intrusive mandates that waste money, inflating construction costs in order to help unionized firms beat non-union competitors.

In recent years, the opposition—largely Republicans and industry groups—scored a series of wins, successfully pressing state governments in Arkansas, Indiana, Kentucky and West Virginia to repeal their own “little Davis Bacon” rules. By contrast, the federal statutes remain in place, despite the efforts of Representative Steve King, Republican of Iowa, who said last year  that “no one can claim to be a fiscal conservative if they think the federal government needs to inflate the cost of wages.”

Read the complete article here.

Democrats’ Next Big Thing: Government-Guaranteed Jobs

From today’s New York Times:

Prominent Democrats — stung by their eroding support from working-class voters but buoyed by the deficit-be-damned approach of ruling Republicans — are embracing a big idea from a bygone era: guaranteed employment.

The “job guarantee” plans, many of them pressed by Democratic White House hopefuls, vary in scope and cost, but they all center on government-sponsored employment that pays well above the $7.25-an-hour federal minimum wage — a New Deal for a new age, absent the bread lines and unemployment rates of the Great Depression. The most aggressive plans seek to all but eradicate unemployment and to set a new wage floor for all working Americans, pressuring private employers to raise wages if they want to compete for workers.

How such guarantees would be paid for is still largely unresolved. And criticism of the idea has emerged not only from conservatives who detect a whiff of socialism but also from liberals who say guaranteed employment is the wrong way to attack the central issue facing workers in this low-unemployment economy: stagnant wages.

But Democratic leaders hope the push will help their party bridge the growing political divide between white and minority workers, and silence the naysayers who accuse the party of being devoid of new, big ideas.

The employment plans, along with single-payer “Medicare for all” health care, free college, legalized marijuana and ever less restrictive immigration rules, are parts of a broader trend toward a more liberal Democratic Party in the Trump era.

“It’s going to create a more competitive labor market where people are going to start getting living wages, not just minimum wage,” said Senator Cory Booker, Democrat of New Jersey, who unveiled a job-guarantee planin April. “Giving people the dignity of work, of being able to stand on their own two feet, there’s such a strengthening element of that.”

Read the complete article here.

SCOTUS Upholds Workplace Arbitration Contracts Barring Class Actions

From today’s New York Times:

 The Supreme Court on Monday ruled that companies can use arbitration clauses in employment contracts to prohibit workers from banding together to take legal action over workplace issues.

The vote was 5 to 4, with the court’s more conservative justices in the majority. The court’s decision could affect some 25 million employment contracts.

Writing for the majority, Justice Neil M. Gorsuch said the court’s conclusion was dictated by a federal law favoring arbitration and the court’s precedents. If workers were allowed to band together to press their claims, he wrote, “the virtues Congress originally saw in arbitration, its speed and simplicity and inexpensiveness, would be shorn away and arbitration would wind up looking like the litigation it was meant to displace.”

Justice Ruth Bader Ginsburg read her dissent from the bench, a sign of profound disagreement. In her written dissent, she called the majority opinion “egregiously wrong.” In her oral statement, she said the upshot of the decision “will be huge under-enforcement of federal and state statutes designed to advance the well being of vulnerable workers.”

Justice Ginsburg called on Congress to address the matter.

Brian T. Fitzpatrick, a law professor at Vanderbilt University who studies arbitrations and class actions, said the ruling was unsurprising in light of earlier Supreme Court decisions. Justice Gorsuch, he added, “appears to have put his cards on the table as firmly in favor of allowing class actions to be stamped out through arbitration agreements.”

As a result, Professor Fitzpatrick said “it is only a matter of time until the most powerful device to hold corporations accountable for their misdeeds is lost altogether.”

But Gregory F. Jacob, a lawyer with O’Melveny & Myers in Washington, said the decision would have a limited impact, as many employers already use the contested arbitration clauses. “This decision thus will not see a huge increase in the use of such provisions,” he said, “but it does protect employers’ settled expectations and avoids placing our nation’s job providers under the threat of additional burdensome litigation drain.”

Read the complete article here.

Opinion: When Companies Supersize, Paychecks of Workers Shrink

From today’s New York Times:

Anyone with a cellphone should have paid attention to the big merger news on April 29: T-Mobile and Sprint announced their intention to tie the knot after years of speculation. If it goes through, it will leave the country with just three major wireless carriers instead of four.

Less noticed, on the same day, about a dozen other corporate marriages were announced worldwide, worth a combined $120 billion. So far this year, $1.7 trillion worth of deals have been declared globally, higher than the pre-financial-crisis record set in 2007. This year’s big-dollar mergers in the United States range from Cigna’s purchase of Express Scripts, oil refiner Marathon Petroleum buying rival Andeavor, and Dr Pepper Snapple cozying up to Keurig Green Mountain. That’s in addition to AT&T’s play for Time Warner in 2016, CVS’s offer for Aetna, and Amazon swallowing up Whole Foods.

All this activity means fewer companies, which means less competition. For consumers, that can raise prices if the merged companies face less pressure to keep things cheap. That’s the main test these deals have to pass: whether regulators, including the Justice Department and Federal Trade Commission, think consumers will fare worse.

That narrow focus on consumer prices hides another, potentially more dangerous side effect. A growing body of evidence has found that as mergers thin the ranks of businesses, workers have fewer options when they look for jobs. That reduces their bargaining power and, in turn, is part of why wages have stagnated.

Read the complete article here.

Massive UC workers’ strike disrupts dining, classes and medical services

From today’s Los Angeles Times:

A massive labor strike across the University of California on Monday forced medical centers to reschedule more than 12,000 surgeries, cancer treatments and appointments, and campuses to cancel some classes and limit dining services.

More than 20,000 members of UC’s largest employee union, the American Federation of State, County and Municipal Employees Local 3299, walked off their jobs on the first day of a three-day strike. They include custodians, gardeners, cooks, truck drivers, lab technicians and nurse aides.

Two altercations involving protesters and people driving near the rallies were reported at UCLA and UC Santa Cruz. At UCLA, police took a man into custody Monday after he drove his vehicle into a crowd, hitting three staff members. They were treated for minor injuries at the scene and released, said Lt. Kevin Kilgore of the UCLA Police Department.

The system’s 10 campuses remained open, largely operating on regular schedules, and protests were peaceful and even festive.

At UCLA, workers marched through campus in green union shirts that said “We run UC” and held signs calling for equality, respect and more staff. Some brought children and walked dogs. Drivers honked in solidarity. Hundreds of workers rallied in front of the Ronald Reagan UCLA Medical Center, taking taco breaks under green balloons.

Oscar Rubio, a UCLA food services worker, said that staffing at some dining hall stations has been cut from five workers to three, leading to more injuries for those who remain.

Top UC officials “make more money … while we suffer,” Rubio said. “We’re not asking to make like they make. We’re asking to support us enough to pay our rent.”

Read the complete article here.

Opinion: Treating Workers Fairly at Rent the Runway

From today’s New York Times:

I am ashamed to say that until recently I was part of the majority: I am the chief executive of a company that gave different benefits to different groups of employees.

Like so many companies before us, my company, Rent the Runway, had two tiers of workers. Our salaried employees — who typically came from relatively privileged, educated backgrounds — were given generous parental leave, paid sick leave and the flexibility to work from home, or even abroad. Our hourly employees, working in Rent the Runway’s warehouse, on the customer service team and in our retail stores, had to face life events like caring for a newborn, grieving after the death of a family member or taking care of a critically ill loved one without this same level of benefits.

I had inadvertently created classes of employees — and by doing so, had done my part to contribute to America’s inequality problem.

When you’re founding a business, you take your cues on corporate culture from larger, already successful organizations. In America, some of the biggest companies have decided to handle the dual pressures of keeping costs down while retaining “corporate talent” by ramping up benefits packages. Companies like Starbucks and Walgreens compete for top-tier candidates by offering cushy policies in areas like parental leave or vacation.

But the best benefits are reserved for corporate talent, for whom the competition is considered steepest; employees who work at hourly rates are an afterthought (and that doesn’t begin to factor in companies like Uber that opt to consider the people they work with “contractors”). When I started Rent the Runway, I simply followed suit.

But over the years, I began to reflect on how the system that I and others had constructed may have been perpetuating deep-seated social problems. Last month, I equalized benefits for all of our employees at Rent the Runway. Our warehouse, customer service and store employees now have the same bereavement, parental leave, family sick leave and sabbatical packages that corporate employees have.

We know the grim statistics, such as only 14 percent of civilian workers in the United States have access to paid family leave; one in every four new mothers go back to work just 10 days after giving birth; and people who make more than $75,000 a year are twice as likely as those who make less than $30,000 to get paid leave.

Of course, chief executives and their leadership teams have outsize salaries as well as outsize benefits. C.E.O.s at the 350 largest companies make 271 times the earnings of the typical worker. The people with the most means have the most flexibility in their lives, not only because they have the ability to throw money at their problems but also because their companies grant them this flexibility to keep them happy.

Read the complete article here.

Striking teachers in Arizona win 19 percent raise and end walkout

From today’s Los Angeles Times:

The Arizona governor signed a plan Thursday to give striking teachers a 19% pay raise, ending their five-day walkout after a dramatic all-night legislative session and sending more than a million public school students back to the classroom.

Gov. Doug Ducey’s signature awarded teachers a 9% raise in the fall and 5% in each of the next two years. Teachers did not get everything they wanted, but they won substantial gains from reluctant lawmakers.

Striking Arizona teachers win 19% raise, end walkout

“The educators have solved the education crisis! They’ve changed the course of Arizona,” Noah Karvelis of Arizona Educators United shouted to several thousand cheering teachers. “The change happens with us!”

Hours after Ducey acted, strike organizers called for an end to the walkout. Some schools planned to reopen Friday, with others likely to resume classes next week.

The Senate approved the pay raises just before dawn as hundreds of red-shirted teachers followed the proceedings from the lobby, many sitting on the cold stone floor.

The night before, the teachers, who are among the lowest paid in the country, held a candlelight vigil in a courtyard outside the original neoclassical Capitol building. They stood together with their right hands over their hearts and sang “America the Beautiful.”

Wrapped in blankets or sleeping bags, they napped on the ground or in folding metal chairs, occasionally using cellphones to monitor an online video stream of the legislative debate in the chambers.

Ducey said the teachers had earned a raise and praised the legislation as “a real win” for both teachers and students. The pay increases will cost about $300 million for the coming year alone.

Some teachers returned to the Capitol on Thursday as lawmakers debated the rest of the state’s $10.4 billion budget plan. Among them was Wes Oswald, a third-grade teacher from Tucson who made the two-hour drive for a sixth day.

Oswald said the budget still does not address serious issues such as the need for higher per-pupil spending, raises for support staff and a smaller-student-to-counselor ratio.

Teachers must still fight for those problems to be addressed, Oswald said, adding that “the worst thing would be for this movement to dissolve.”

Arizona Education Assn. President Joe Thomas said Thursday that educators now should focus on a campaign for a November ballot measure that would seek more education funding from an income tax increase on the wealthiest taxpayers.

“The budget is a significant investment, but it falls far short” of what the movement demanded, Thomas said.

Education cuts over the last decade have sliced deeply into Arizona’s public schools. Teachers wanted a return to pre-recession funding levels, regular raises, competitive pay for support staff and a pledge not to adopt any tax cuts until per-pupil funding reaches the national average.

Read the complete article here.

California’s top court makes it more difficult for employers to classify workers as independent contractors

From today’s Los Angeles Times:

In a ruling that could change the workplace status of people across the state, the California Supreme Court made it harder Monday for employers to classify their workers as independent contractors.

The unanimous decision has implications for the growing gig economy, such as Uber, Lyft and other app-driven services — but it could extend to nearly every employment sector.

In recent years, the hiring of workers as independent contractors — not subject to government rules on minimum wage, overtime and rest breaks — has exploded. A 2016 study by economists at Harvard and Princeton universities estimated 12.5 million people were considered independent contractors, or 8.4% of the U.S. workforce.

The ruling is likely to lead many employers in California to immediately question whether they should reclassify independent contractors rather than face stiff fines for misclassification, employment lawyers said.

“A huge number of businesses will be calling their lawyers saying ‘What should I do?'” said Michael Chasalow, a professor at the USC Gould School of Law.

To classify someone as an independent contractor, the court said, businesses must show that the worker is free from the control and direction of the employer; performs work that is outside the hirer’s core business; and customarily engages in “an independently established trade, occupation or business.”

“When a worker has not independently decided to engage in an independently established business but instead is simply designated an independent contractor … there is a substantial risk that the hiring business is attempting to evade the demands of an applicable wage order through misclassification,” Chief Justice Tani Cantil-Sakauye wrote for the court.

A worker may be denied the status of employee “only if the worker is the type of traditional independent contractor — such as an independent plumber or electrician — who would not reasonably have been viewed as working in the hiring business,” the court said.

Instead, an independent contractor would be understood to be working “in his or her own independent business,” Cantil-Sakauye wrote.

The court offered examples: A plumber temporarily hired by a store to repair a leak or an electrician to install a line would be an independent contractor. But a seamstress who works at home to make dresses for a clothing manufacturer from cloth and patterns supplied by the company, or a cake decorator who works on a regular basis on custom-designed cakes would be employees.

Read the complete article here.