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.

The Case for a Federal Jobs Guarantee

From the New York Times “Opinion” Section by Eric Loomis:

Employment numbers may look solid now, but economists, physicists and industrial engineers all say that automation will, in the not-so-distant future, drive higher unemployment. The Columbus Dispatch recently calculated that in Ohio, out of total state employment of about 5.5 million workers, 2.5 million jobs are at risk of automation.

How do we prepare for such disruption and the future of work? We might revisit an idea from the 1970s: a federal guarantee of employment. In recent weeks, three Democratic senators (and likely presidential contenders) — Kirsten Gillibrand of New York, Cory Booker of New Jersey and Bernie Sanders of Vermont — have either expressed their approval of the idea or unveiled initial ideas about how an updated version could work.

They are building on the legacy of the Humphrey-Hawkins Act, introduced in the 1970s by Senator Hubert Humphrey, Democrat of Minnesota, and Representative Augustus Hawkins, Democrat of California. In addition to the guarantee of employment, their initial bill allowed citizens to sue the government if they could not find a job.

Resurrecting Humphrey-Hawkins can help pre-empt a technology crisis and even future labor dislocation from globalization. In the original Humphrey-Hawkins bill — not the watered-down version that ultimately passed in 1978 — the president would submit an annual plan to Congress to achieve full employment, and local committees would coordinate job needs in their communities. The bill would have spurred private-sector job creation and a New Deal-style federal job creation program. Private employment would limit government investment, while federally mandated wage and price controls would fight inflation.

The final bill fell far short of this. Unions stripped out the wage and price controls in exchange for their support and put a priority on negotiating better contracts for their members over the fate of the nation’s poor. The Carter administration fretted about the potential impact on inflation from a bill without those controls. President Jimmy Carter never truly supported it, and the bill that passed committed the nation to ending inflation more than to full employment. Since then, the idea of full employment has largely disappeared from the American political system.

The arguments against Humphrey-Hawkins in 1978 are largely irrelevant today. After decades of low inflation, wage and price controls are unlikely to be problems. Mr. Booker’s pilot plan to test these ideas in 15 areas of the country builds on the Great Society belief in community control over federal resources.

Read the complete article here.

Local: Jobs and work support could curtail LA’s stubborn homeless crisis

From today’s LA Times:

Providing jobs and other aid to Los Angeles County residents soon after they land in the streets could help prevent 2,600 to 5,200 people a year from falling into persistent homelessness, according to a new study from a liberal think tank.

The “Escape Routes” study from the nonprofit Economic Roundtable zeroes in on a key dilemma in Los Angeles’ homelessness crisis: Even as officials have moved 33,000 homeless people into permanent housing since 2013 and launched a $1.2-billion construction program, high rents, job loss and medical crises continue to push people out of their homes.

Without early intervention, thousands of these people will become mired in chronic homelessness, deepening the region’s stubborn problem, the study found.

“Housing alone is not enough to end homelessness. The steady flow of new people into chronic homelessness keeps moving the goalposts back,” Dan Flaming, president of Economic Roundtable, said in a statement.

The researchers combined 26 data sources — including county healthcare and social services records, the U.S. Census and homeless counts and demographic surveys — to sketch what experts called a novel portrait of people at risk of falling into chronic homelessness, as well as recommendations of how to help them.

For several years running, Los Angeles has topped the nation in chronically homeless people, with 16,576 in the 2017 count, the most recent available.

Dennis Culhane, a University of Pennsylvania professor and a leading researcher of homeless demographics, said one of the most important findings was that 150,000 people in L.A. County are homeless in a year, although many resolve their crises on their own.

Because more than three-quarters of L.A.’s homeless people live outdoors in camps or vehicles, the official homeless count — a three-day snapshot of people living in the streets and shelters — has always been suspect, Culhane said.

The study says the number of people languishing in homelessness can be reduced, but not without a big investment. Many homeless people are eager to work, particularly those with children, but they need childcare, transportation, temporary housing, training and in some cases government-funded jobs to bring them into the work force, study said.

Read the complete article here.

Public Servants Are Losing Their Foothold in the Middle Class

From today’s New York Times:

The anxiety and seething anger that followed the disappearance of middle-income jobs in factory towns has helped reshape the American political map and topple longstanding policies on tariffs and immigration.

But globalization and automation aren’t the only forces responsible for the loss of those reliable paychecks. So is the steady erosion of the public sector.

For generations of Americans, working for a state or local government — as a teacher, firefighter, bus driver or nurse — provided a comfortable nook in the middle class. No less than automobile assembly lines and steel plants, the public sector ensured that even workers without a college education could afford a home, a minivan, movie nights and a family vacation.

In recent years, though, the ranks of state and local employees have languished even as the populations they serve have grown. They now account for the smallest share of the American civilian work force since 1967.

The 19.5 million workers who remain are finding themselves financially downgraded. Teachers who have been protesting low wages and sparse resources in OklahomaWest Virginia and Kentucky — and those in Arizona who say they plan to walk out on Thursday — are just one thread in that larger skein.

The private sector has been more welcoming. During 97 consecutive months of job growth, it created 18.6 million positions, a 17 percent increase.

But that impressive streak comes with an asterisk. Many of the jobs created — most in service industries — lack stability and security. They pay little more than the minimum wage and lack predictable hours, insurance, sick days or parental leave.

The result is that the foundation of the middle class continues to be gnawed away even as help-wanted ads multiply.

Read the complete article here.

Deadline Is Today in McDonald’s Labor Case That Could Affect Millions

From today’s New York Times:

The Trump appointee charged with enforcing federal labor rights is scrambling to head off a court ruling in a case against McDonald’s that could redefine the accountability of companies for the labor practices of their franchisees.

The official, the general counsel of the National Labor Relations Board, has been exploring settlement terms with workers at the center of the board’s complaint against McDonald’s, according to lawyers involved in the case. A judge had halted the trial until Monday to give the agency a chance to do so.

If no settlement is reached and the judge were to rule against the company, the decision could have enormous implications for the franchise business model, affecting millions of workers in the fast-food industry and beyond. Corporations could be required to bargain with unionized workers at disparate franchise locations.

The National Labor Relations Board did not respond to a request for comment. A McDonald’s spokeswoman said that “settlement discussions are a normal part of any litigation process.”

The case was brought during the Obama administration, when the board was under Democratic control. Since President Trump’s election, Republican members have regained a majority, steering the board away from a pro-labor orientation.

Read the complete article here.

MLK Day 2018, A Time to Reflect on Socio-Economic Injustice In All Forms

In honor of MLK Day, we post a short educational video here with excerpts from Martin Luther King, Jr. and James Baldwin that draw the connection between racial injustice and economic inequality in the United States. Their insights are as true today as they were fifty years ago, showing just how far we’ve come and how far we have to go. If we want peace, we must work for justice in all its forms.

Robots Are Coming, and Sweden Is Fine

From New York Times:

From inside the control room carved into the rock more than half a mile underground, Mika Persson can see the robots on the march, supposedly coming for his job here at the New Boliden mine.

He’s fine with it.

Sweden’s famously generous social welfare system makes this a place not prone to fretting about automation — or much else, for that matter.

Mr. Persson, 35, sits in front of four computer screens, one displaying the loader he steers as it lifts freshly blasted rock containing silver, zinc and lead. If he were down in the mine shaft operating the loader manually, he would be inhaling dust and exhaust fumes. Instead, he reclines in an office chair while using a joystick to control the machine.

He is cognizant that robots are evolving by the day. Boliden is testing self-driving vehicles to replace truck drivers. But Mr. Persson assumes people will always be needed to keep the machines running. He has faith in the Swedish economic model and its protections against the torment of joblessness.

“I’m not really worried,” he says. “There are so many jobs in this mine that even if this job disappears, they will have another one. The company will take care of us.”

In much of the world, people whose livelihoods depend on paychecks are increasingly anxious about a potential wave of unemployment threatened by automation. As the frightening tale goes, globalization forced people in wealthier lands like North America and Europe to compete directly with cheaper laborers in Asia and Latin America, sowing joblessness. Now, the robots are coming to finish off the humans.

Read the complete article here.

Labor Board Reverses Ruling That Helped Workers Fight Large Chains

From today’s New York Times:

The National Labor Relations Board on Thursday overturned a key Obama-era precedent that had given workers significant leverage in challenging companies like fast-food and hotel chains over labor practices.

The ruling changes the standard for holding a company responsible for labor law violations that occur at another company, like a contractor or franchisee, with which it has a relationship.

The doctrine also governs whether such a corporation would have to bargain with workers at a franchise if they unionized, or whether only the owners of the franchise would have to do so.

While most labor law experts expected the labor board, which gained a Republican majority only in late September, to overturn the board’s so-called joint-employer decision from 2015, the speed of the change came as a surprise to many.

“Frankly, it’s shocking,” said Wilma B. Liebman, a former Democratic appointee on the board who once served as its chairwoman.

The board’s 3-to-2 vote, along party lines, restores the pre-2015 standard, which deemed a fast-food corporation a joint employer only if it exercised direct and immediate control over workers at the franchise, and in a way that was not limited.

Employer groups had been agitating to undo the standard that was set under President Barack Obama almost from the moment it was decided, and they applauded the decision on Thursday.

The key question in determining whether a company, like a fast-food corporation, is a joint employer of workers employed by another company, like one of the chain’s franchisees, is the degree of control exercised by the corporation over workers at the franchise. The ruling on Thursday declared that such control must be direct.

Under the Obama-era doctrine, the fast-food corporation could be held liable for labor violations that occurred at the franchise even if the control it exerted was indirect — for example, if it required the franchisee to use software dictating certain scheduling practices — or if it had the right to exercise control over workers that it nonetheless didn’t exercise.

The reversal could have important implications for the ability of workers to win concessions from employers through collective bargaining. In many cases, a contractor or franchisee has such low profit margins that it could not afford to raise wages or improve benefits even if it wanted to.

Read the complete article here.

Proof Retail Jobs Don’t Need to Be Bad

From today’s New York Times by Eduardo Porter

Bethamy Magrow is grateful that the minimum wage in New York City is rising to $13 at the end of next month. Earning the current minimum of $11 an hour at a Times Square fashion retailer and scheduled to work some weeks for only 19 hours, the 25-year-old sales worker realizes she doesn’t quite clear New York’s poverty line.

It would be nice if her schedule didn’t change so much from week to week, she told me, so she could set up her doctors’ appointments in advance. But at least New York bars retailers from changing the schedule from one day to the next. In any case, jobs she has had at Whole Foods and Pokéworks, a restaurant on Union Square, were no better or worse.

Millions of Americans have similar stories to tell. For all the talk about the “end of retail,” it is one of the largest employers in the country, accounting for about one in eight workers in the private sector. For every miner toiling in the United States, there are almost 25 retail workers. Manufacturing, the apple of President Trump’s eye, doesn’t employ nearly as many.

Typically paying full-time employees less than $33,000 a year, well below the midpoint across the economy, retail jobs have become the work of the lower class, the main source of support for Americans left behind by economic change.

This raises a fairly urgent question: If retail work sets the living standard for so many low-income families, why doesn’t it get more attention?

Read the entire article here.

Employees do want their job to matter, but meaning at work can be hard to find

From today’s Chicago Tribune by Alexia Elejalde-Ruiz:

Jennifer Ruiz holds her patient’s trembling hand as she presses a stethoscope to the frail woman’s chest and belly. She compliments the woman on her recently painted fingernails. She cheerfully asks how she’s feeling, knowing she’ll get no answer from the little curled body in the big hospital bed but for a penetrating stare.

Ruiz, a hospice nurse, finds her work deeply meaningful, in part for reasons that are obvious: “We get to be there for people during some of the most tragic and tough times in their lives,” she said.

But even those who shepherd the dying and their families through the fear, heartbreak and mystery of the end of life can lose sight of a job’s meaning in the stress of the day-to-day, if their employer doesn’t foster it.

“You have to fan that flame,” said Brenda McGarvey, corporate director of program development at Skokie-based Unity Hospice, where Ruiz works. “It’s your responsibility.”

A job’s meaningfulness — a sense that the work has a broader purpose — is consistently and overwhelmingly ranked by employees as one of the most important factors driving job satisfaction. It’s the linchpin of qualities that make for a valuable employee: motivation, job performance and a desire to show up and stay.

Meaningful work needn’t be lofty. People find meaning picking up garbage, installing windows and selling electronics — if they connect with why it matters.

But many Chicago-area employers seem to be missing an opportunity to tap this critical vein.

In a survey conducted by Energage for the Chicago Tribune’s 2017 Top Workplaces magazine, local employees regarded their employers more positively than the national average on nearly all measures, but companies fell significantly short in response to this statement: “My job makes me feel like I am part of something meaningful.” Meaningfulness also was the only measure that did not see any improvement among Chicago-area respondents this year, compared with last.

Read the article here.