Employers Are Finally Ready to Talk About How Much They Pay

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.

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.

Better Your Chance For Equal Pay – What You Need To Know Now

From today’s Forbes Magazine:

The gender pay gap is the most entrenched barrier to equality women face. It seems so simple: equal pay for equal work. But the formula is complicated in many companies because men outnumber women in C-suites, in leadership and management, in the most lucrative industries like banking, and in the higher-risk, higher-reward jobs – all of which skews the data and creates a rationale that is used to justify the pay gap.

The fact is, there is no valid reason for paying women less for equal performance, and doing so hamstrings the growth of our economy. A 2017 report by the Institute for Women’s Researchdemonstrates how equal pay for women could increase the U.S. economy by an incredible $512.6 billion.

Meanwhile, a confluence of factors continues to inhibit a woman’s ability to earn her worth, though many of them can be changes. Here are four things all women need to know to better their chances for equal pay:

1.Where you live and work dramatically impacts your potential for equal pay.

Smart Asset researched the pay gap in 507 metro areas around the country and found that nationally, women make an average 70% of what men do in the same jobs. However, there are 51 Metro areas where the gap closes to 80% or better. Cities like LA, Las Vegas, Flagstaff, Arizona; Jefferson City, Missouri; and Bangor, Maine all have narrower pay gaps than average. But the title goes to Rochester, Minnesota as the top place for working women for the second year in a row. Women in that metro earn the highest income in the nation, after deducting housing costs.

If you live in a state capitol, you have an even better chance of equal pay: nearly half of the top 12 metros were around capitals.

The women who live in Tallahassee, Florida’s state capital, will be relieved to know that they enjoy one of smallest pay gaps in the nation, with the average woman in the metro area earning roughly 94% of what the average man does. Florida, overall, had the most metros in the top 51, with 13 cities outperforming the national average. Gainesville, Tampa, Fort Meyers, and Miami all did better than 80%.

But there’s bad news for the women of Utah. Provo-Orem is the worst-performing metro area in the study. Smart Asset’s data shows that the average woman there earns about 42% of what the average man does.

Read the complete article here.

More Workers Are Claiming ‘Wage Theft’

From NYT “Business Day” August 31, 2014 by Steven Greenhouse:

Week after week, Guadalupe Rangel worked seven days straight, sometimes 11 hours a day, unloading dining room sets, trampolines, television stands and other imports from Asia that would soon be shipped to Walmart stores.

Even though he often clocked 70 hours a week at the Schneider warehouse here, he was never paid time-and-a-half overtime, he said. And now, having joined a lawsuit involving hundreds of warehouse workers, Mr. Rangel stands to receive more than $20,000 in back pay as part of a recent $21 million legal settlement with Schneider, a national trucking company.

“Sometimes I’d work 60, even 90 days in a row,” said Mr. Rangel, a soft-spoken immigrant from Mexico. “They never paid overtime.”

The lawsuit is part of a flood of recent cases — brought in California and across the nation — that accuse employers of violating minimum wage and overtime laws, erasing work hours and wrongfully taking employees’ tips. Worker advocates call these practices “wage theft,” insisting it has become far too prevalent.

Some federal and state officials agree. They assert that more companies are violating wage laws than ever before, pointing to the record number of enforcement actions they have pursued. They complain that more employers — perhaps motivated by fierce competition or a desire for higher profits — are flouting wage laws.

Many business groups counter that government officials have drummed up a flurry of wage enforcement actions, largely to score points with union allies. If anything, employers have become more scrupulous in complying with wage laws, the groups say, in response to the much publicized lawsuits about so-called off-the-clock work that were filed against Walmart and other large companies a decade ago.

Here in California, a federal appeals court ruled last week that FedEx had in effect committed wage theft by insisting that its drivers were independent contractors rather than employees. FedEx orders many drivers to work 10 hours a day, but does not pay them overtime, which is required only for employees. FedEx said it planned to appeal.

Julie Su, the state labor commissioner, recently ordered a janitorial company in Fremont to pay $332,675 in back pay and penalties to 41 workers who cleaned 17 supermarkets. She found that the company forced employees to sign blank time sheets, which it then used to record inaccurate, minimal hours of work.

David Weil, the director of the federal Labor Department’s wage and hour division, says wage theft is surging because of underlying changes in the nation’s business structure. The increased use of franchise operators, subcontractors and temp agencies leads to more employers being squeezed on costs and more cutting corners, he said. A result, he added, is that the companies on top can deny any knowledge of wage violations.

“We have a change in the structure of work that is then compounded by a falling level of what is viewed as acceptable in the workplace in terms of how you treat people and how you regard the law,” Mr. Weil said.

His agency has uncovered nearly $1 billion in illegally unpaid wages since 2010. He noted that the victimized workers were disproportionately immigrants.

Guadalupe Salazar, a cashier at a McDonald’s in Oakland, complained that her paychecks repeatedly missed a few hours of work time and overtime pay. Frustrated about this, she has joined one of seven lawsuits against McDonald’s and several of its franchise operators, asserting that workers were cheated out of overtime, had hours erased from timecards and had to work off the clock.

“Basically every time that I worked overtime, it didn’t show up in my paycheck,” Ms. Salazar said. “This is time that I would rather be with my family, and they just take it away.”

Business advocates see a hidden agenda in these lawsuits. For example, the lawsuit against Schneider — which owns a gigantic warehouse here that serves Walmart exclusively — coincides with unions pressuring Walmart to raise wages. The lawyers and labor groups behind the lawsuit have sought to hold Walmart jointly liable in the case.

Walmart says that it seeks to ensure that its contractors comply with all laws, and that it was not responsible for Schneider’s employment practices. Schneider said it “manages its operations with integrity,” noting that it had hired various subcontractors to oversee the loading and unloading crews.

Business groups note that the lawsuits against McDonald’s have been coordinated with the fast-food workers’ movement demanding a $15 wage. “This is a classic special-interest campaign by labor unions,” said Stephen J. Caldeira, president of the International Franchise Association. In legal papers, McDonald’s denied any liability in Ms. Salazar’s case, and the Oakland franchisee insisted that Ms. Salazar had failed to establish illegal actions by the restaurant.

Michael Rubin, one of the lawyers who sued Schneider, disagreed, saying there are many sound wage claims. “The reason there is so much wage theft is many employers think there is little chance of getting caught,” he said.

Commissioner Su of California said wage theft harmed not just low-wage workers. “My agency has found more wages being stolen from workers in California than any time in history,” she said. “This has spread to multiple industries across many sectors. It’s affected not just minimum-wage workers, but also middle-class workers.”

Many other states are seeing wage-theft cases. New York’s attorney general, Eric T. Schneiderman, has recovered $17 million in wage claims over the past three years. “I’m amazed at how petty and abusive some of these practices are,” he said. “Cutting corners is increasingly seen as a sign of libertarianism rather than the theft that it really is.”

In Nashville last February, nine housekeepers protested outside a DoubleTree hotel because the subcontractor that employed them had failed to pay a month’s wages. “The contractor said they didn’t have the money, that the hotel hadn’t paid them,” said Natalia Polvadera, a housekeeper. “We went to the hotel manager — he showed receipts that they had paid the contractor.”

Nonetheless, the protests persuaded DoubleTree to pay the $12,000 in wages owed.

Mr. Weil said some executives had urged him to increase enforcement because they dislike being underbid by unscrupulous employers.

His agency has begun cracking down on retaliation against workers who complain, suing a Texas company that fired a janitor when he refused to sign a statement that falsely said he had already received back wages due him from a Labor Department investigation.

“This is just not acceptable,” Mr. Weil said. “You can’t threaten people to lose their jobs because they are asserting rights that go back 75 years.”

Review: Lost Jobs, Missing Workers, and Stagnant Wages

From NYT’s “Business Day” by ALICIA PARLAPIANO, SHAILA DEWAN and NELSON D. SCHWARTZ:

In the five years since the United States began its slow climb out of the deepest recession since the 1930s, the job market has undergone a substantial makeover. The middle class has lost ground as the greatest gains have occurred at the top and bottom of the pay scale, leaving even many working Americans living in poverty. The housing industry, once the primary engine of growth and a fountain of jobs, has shrunk, while health care, technology and energy have led the recovery.

After a long climb from the valley, the number of jobs has finally reached the previous peak of January 2008, with gains of more than 8.5 million jobs since early 2010. Still, the working-age population has grown substantially in the last six years, and the nation’s economy, by reliable estimates, is at least seven million jobs below its potential. That has cost Americans hundreds of billions of dollars in lost output.

With the weak recovery from the recession, more than four million people are still considered among the long-term unemployed, out of work for at least half a year. They face considerably dimmer prospects of finding another job as their skills deteriorate and their contact with the world of work fades.

And that does not count the more than six million who have opted out of the labor force altogether, even taking into account demographic factors like the aging of the population.

Economists hope that many such people will be lured back to work as business improves and that wages will rise as the labor market tightens. But for now, the slack in the economy has served to hold down pay; wages for roughly four-fifths of American workers have declined since 2007, after adjusting for inflation.

Read the entire article and review the interactive graphs here.

The Economy May Be Improving. Worker Pay Isn’t.

From NYT’s “The Upshot” by Neil Irwin:

The latest economic data out Tuesday morning was generally good. Home building activity remained above the one million a year rate. Consumer prices rose 0.4 percent in May, such that inflation over the last year is now 2.1 percent, about in line with what the Federal Reserve aims for.

But that inflation news carried with it a depressing side note. Now that the Consumer Price Index for May has been published, it is possible to determine inflation-adjusted hourly earnings for the month. And the number is not good.

Average hourly earnings for private sector American workers rose about 49 cents an hour over the last year, to $24.38 in May. But that wasn’t enough to cover inflation over the year, so in real or inflation-adjusted terms, hourly worker pay fell 0.1 percent over the last 12 months. Weekly pay shows the same story, also falling 0.1 percent in the year ended in May.

Pause for just a second to consider that. Five years after the economic recovery began, American workers have gone the last 12 months without any real increase in what they are paid.

Read the entire article here.

The Downward Ramp

From NYT’s “Opinion” by Thomas Edsall:

With the bursting of the tech bubble at the start of the 21st century, two decades of growth at the high end of the job market — once the province of college graduates with strong cognitive abilities — came to an abrupt halt, according to detailed studies of employment and investment patterns by three Canadian economists. We are still feeling the ramifications.

New evidence produced by Paul Beaudry and David A. Green of the University of British Columbia, and Ben Sand of York University, demonstrates that the collapse, between 1980 and 2000, of mid-level, mid-pay jobs — gutted by automation or foreign competition (and often both) — has now spread to the high-skill labor market.

The U-shaped pattern of job growth characteristic of recent decades – strong at the top and bottom, but weak throughout the middle — has now become “a bit more like a downward ramp,” according to David Autor, an economist at M.I.T. who documented the decline in mid-level jobs in the 1980s and 1990s.

Preliminary findings suggest that this trend is alarming in almost every respect. Just one example: the drying up of cognitively demanding jobs is having a cascade effect. College graduates are forced to take jobs beneath their level of educational training, moving into clerical and service positions instead of into finance and high tech.

This cascade eliminates opportunities for those without college degrees who would otherwise fill those service and clerical jobs. These displaced workers are then forced to take even less demanding, less well-paying jobs, in a process that pushes everyone down. At the bottom, the unskilled are pushed out of the job market altogether.

Read the entire article here.

The Clear Benefits of a Higher Wage

From the New York Times Editorial Board:

Republicans sputtered with outrage when the Congressional Budget Office said that immigration reform would lower the deficit, strengthen Social Security and speed up economic growth. They called for the office to be abolished when it dared to point out that tax cuts raise the deficit or when it highlighted the benefits of health care reform. But now that the budget office has predicted (and exaggerated) the possibility that an increase in the minimum wage might result in a loss of jobs, Republicans think it’s gospel.

“This report confirms what we’ve long known,” said a spokesman for the House speaker, John Boehner. “While helping some, mandating higher wages has real costs, including fewer people working.”

What Republicans fail to mention is that Tuesday’s report from the budget office, a federal nonpartisan agency, was almost entirely positive about the benefits of raising the minimum wage to $10.10 by 2016, as President Obama and Congressional Democrats have proposed.

But the report said there could be a cost to the wage increase, and most of the headlines have focused on the possible loss of 500,000 jobs, or about 0.3 percent of total employment. That bears further scrutiny, because, unlike the benefits, the employment estimates have been disputed by a wide variety of nonpartisan economic studies.

What the report actually says is that there is a two-thirds chance that a $10.10 wage would produce job losses in a range from just above zero to one million. The number 500,000 was simply picked as a midpoint. (There is a one-third chance the wage increase would lead to more than a million job losses or actually increase employment.) A range that big is essentially the budget office’s way of saying it doesn’t really know what would happen to employment if the wage goes up, because, as the report says, there is vast uncertainty about how much wages will go up on their own over the next three years, and uncertainty about how employers would react to a higher minimum.

The budget office didn’t do its own research on those variables. It surveyed the economic literature on the subject, and chose a figure more conservative than the most recent and rigorous studies have found. That means the job-loss figure needs to regarded skeptically, as a careful reading of the report shows, while the benefits are undisputed.

Those benefits to millions of low-wage workers overwhelmingly outweigh the questionable possibility of job losses. Lawmakers who focus only on the potential downside of an enormously beneficial policy change are the same ones who never wanted to do it in the first place.

Report shows American workers worse off from Great Recession

According to a report released today by the Economic Policy Institute American workers are worse off than they were a decade ago, with underemployed and underpaid workers struggling to makes ends meet. “The State of Working America” documents the statistical evidence as well as personal stories of these deteriorating work conditions, revealing some startling findings about work in an unfriendly environment to both skilled and unskilled workers.

  • Adjusted for inflation the median hourly wage was lower last year (2011) than it was a decade earlier.
  • 2.1 million individuals quit their jobs in March 2012, down slightly from 2.9 million in December 2007, signaling a tight labor market with little to no mobility.
  • Due to the housing bubble and market crash, the median income of the American family in 2010 declined to levels from the early 1990s, showing that workers have lost almost two decades of built equity in their homes.
  • Tuition for education is rising faster than either inflation or wages, and the total debt from student loans is reaching an epidemic proportion that cannot be paid back.
  • Entry-level hourly wages for men who recently graduated from high school fell to $11.68 last year, from $15.64 in 1979.
  • The percentage of jobs that offer health insurance has plummeted to 22.8 percent, from 63.3 percent in 1979.

“Unfortunately, the wage problems brought on by the recession pile on top of a three-decade stagnation of wages for low- and middle-wage workers,” said Lawrence Mishel, the president of the Economic Policy Institute. “In the aftermath of the financial crisis, there has been persistent high unemployment as households reduced debt and scaled back purchases. The consequence for wages has been substantially slower growth across the board, including white-collar and college-educated workers.”

Who is to blame for the decline of American work? Democrats and Republicans alike have both failed to find sustainable solutions to these problems, in part, because both parties have become complicit actors in a corporate agenda that has delivered record profits for many of the nation’s largest companies, as well as widened the income gap to its largest point since the Great Depression

American voters are also to blame for being bamboozled into believing that periphery social differences between the parties—abortion, civil rights for gays and lesbians, and flag-burning—are litmus tests for public office. They have turned a blind eye to the great robbery that has become American capitalism:  with armies of lobbyists and lawyers, Washington has become the center of nearly legalized political corruption where corporations can spend vast amounts of money to ensure the public agenda is shaped to benefit them rather than everyone—particularly average American workers.