Category Archives: American economy

Unions Fighting Vax Mandates Endanger Public Health & Economic Recovery

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From today’s New York Times:

As New York pushes forward with some of the toughest and farthest-reaching vaccine mandates in the nation, thousands of health care workers in the state appear to be willing to be fired rather than get vaccinated.

So, too, do thousands of people who work in New York City’s public schools.

How sad that many of these vaccine holdouts are supported by their unions. Talk about a lack of solidarity.

For years, these unions defended the health and safety of their members. They fought for better wages and protected workers’ rights. They built the middle class. Now they are fighting state and city vaccine mandates aimed solely at keeping workers and communities safe and healthy. So much for the old union idea that an injury to one is an injury to all.

At least city and state government officials have the best interests of the public in mind, even if some in the labor movement have forgotten which side they’re on.

The state’s mandate, requiring vaccination of health care workers, went into effect at midnight on Monday. The city’s, which requires the same of all Department of Education employees, goes into effect at 5 p.m. on Friday. A court upheld the city mandate on Monday.

Some unions, like New York’s nurses’ union, took a reasonable approach, expeditiously negotiating over the vaccine mandate and fighting for other workplace safety measures related to the pandemic, like proper protective gear. Local 32BJ, a New York unit of the Service Employees International Union, which represents health care aides, janitors and many other lower-wage employees, has taken a similar approach and pushed hard to vaccinate its members.

But other New York unions have sought to stymie or delay the vaccine mandates. Some have argued that vaccination shouldn’t be a condition of employment at all.

Read the complete story here.

Pres. Biden to require federal workers and contractors to get vaccinated

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From today’s New York Times:

President Biden on Thursday will sign executive orders requiring the vast majority of federal workers and contractors who do business with the government to get vaccinated against the coronavirus. They are part of an aggressive new plan that will also put pressure on private businesses, states and schools to enact stricter vaccination and testing policies as the Delta variant continues its spread across the United States.

The mandate will apply to employees of the executive branch, including the White House and all federal agencies and members of the armed services — a work force that numbers more than four million — but not to those who work for Congress or the federal court system, according to a person familiar with the plan.

The spread of the highly infectious variant had pushed the country’s daily average caseload over 150,000 for the first time since late January, overwhelming hospitals in hard-hit areas and killing roughly 1,500 people a day. The surge has alarmed Mr. Biden and his top health advisers, who see mass vaccination as the only way to bring the pandemic under control.

Mr. Biden, who was briefed by his team of coronavirus advisers on Wednesday afternoon, is set to deliver a speech at 5 p.m. Eastern that will address about six areas where his administration can encourage — or, at this point, push — more eligible Americans to receive vaccines.

Mr. Biden had already pushed federal workers to get vaccinated by announcing that those who refused would have to undergo regular coronavirus testing. But the surge, coupled with last month’s decision by the Food and Drug Administration to grant full approval to the Pfizer-BioNTech vaccine to those 16 and older, has made him decide to take more aggressive steps, eliminating the option of testing, the officials said.

At least one federal workers’ union has already indicated that the new requirements should be subject to the bargaining process. On Thursday, the American Federation of Government Employees, the largest federal-worker union, stopped short of offering full-throated support for Mr. Biden’s plan.

“Put simply, workers deserve a voice in their working conditions,” Everett Kelley, the union’s president, said in a statement. We expect to bargain over this change prior to implementation, and we urge everyone who is able to get vaccinated as soon as they can do so.”

Read the complete story here.

Post-COVID, Americans Don’t Want to Return to Lousy Low Wage Jobs

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From today’s New York Times:

The hopes for a booming pandemic recovery — growth led by jobs gains in the millions every month — were dealt a blow in recent weeks by a disappointing April jobs report. Perhaps we will see better when results for May are released this week, on Friday. But, for weeks, many in Democratic policy and political circles have been queasy about addressing the connection between federally supplemented unemployment insurance benefits and the slowing pace of re-employment at this stage of the recovery from the pandemic. There is almost certainly a common sense connection: If you were a low-wage worker, why aggressively attempt to go back to work at a lousy, low-paying job, when you can make more money collecting unemployment benefits.

Still, Republican politicians are getting it wrong too. They are citing countless news reports that businesses are struggling to fill certain positions as both a reason to end federal unemployment benefits and as evidence that the extra benefits were too generous in the first place. They worry that the ability of some workers to stay on the sidelines of the labor market, unless employers offer wages that trump jobless benefits, could result in dangerous “wage inflation” — a potential increase in labor costs that, they believe, consumers will pay for in the form of higher priced goods and services.

That argument simply does not hold water either: Over the coming weeks and months as this aid for the jobless phases out, there will be a flood of anxious job seekers pouring into labor markets. Even if a significant share of workers are temporarily avoiding taking low-paying jobs while benefits remain generous, then there is no true “labor shortage,” as many economists and market commentators are calling it.

When Congress passed the CARES Act last May and the American Rescue Plan Act this March, it was hard, even impossible, for policymakers to forecast the demand for labor or the pace of the economic recovery. The pandemic was still stubbornly lurking. The economic (and humanitarian) risk of doing too little far exceeded the risk of being generous. And in spite of some recent comments from Democrats facing political pressure, the entire point of the enhanced unemployment checks, at least originally, was to tide Americans over until it was safe for more people to work again.

Now enhanced benefits are ending every day for the millions of Americans who have benefited from the Pandemic Emergency Unemployment Compensation, or PEUC, program, which extends unemployment insurance for 13 weeks to those who exhausted their conventional state and federal unemployment benefits. All extra federal supplements for the unemployed will end on Sept. 6, including the general $300 weekly benefit, as well as the Pandemic Unemployment Assistance, or PUA, program, which provides aid to those who were self-employed. (Some states are in the process of cutting them early.)

Republican-controlled states, as well as some more politically mixed states, are doing this because they presume there is a macroeconomic upside to millions of workers returning to lower-income jobs. They shouldn’t be so sure.

Read the complete article here.

U.S. unions lodge first Mexico labor grievance under new NAFTA

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From today’s Reuters Online:

U.S. unions on Monday filed the first labor rights petition against Mexico under a new regional trade pact, vying to bring a complaint against an auto parts company on the border that they say has denied workers the right to independent representation.

The petition – filed by the biggest U.S. labor federation, the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) – states that workers at Tridonex in Matamoros, across from Texas, were blocked from electing a union of their choice.

The United States-Mexico-Canada Agreement (USMCA) that replaced NAFTA last year, enshrines that right as part of its aim to give more power to workers to demand better salaries. It was also meant to prevent low labor costs from leeching more U.S. jobs.

Since the 1994 NAFTA, which had few enforcement tools for labor rules, wages in Mexico have stagnated and now rank as the lowest in the Organisation for Economic Cooperation and Development (OECD), a club of 37 industrialized nations.

Reuters reported last week that hundreds of workers had sought to be represented by a new union led by activist-attorney Susana Prieto since 2019, yet state labor officials never scheduled an election. Prieto said 600 of her supporters at Tridonex last year were fired, in what some workers described as retaliation for their efforts to switch unions. read more

Tridonex’s parent is Philadelphia-based Cardone Industries, which is controlled by Canadian company Brookfield Asset Management (BAMa.TO).

Cardone said it did not agree with the AFL-CIO’s assertions, but would address any concerns that could arise in the complaint process.

“We do not believe that the allegations in the complaint are accurate and welcome a full inquiry so that the facts can be disclosed,” the company said in a statement, without detailing which elements it disputed.

Read the complete article here.

Labor Secretary Says Gig Workers Should Be Converted to Employees

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From today’s Forbes Magazine:

President Joe Biden positioned himself as the champion of the American worker during his campaign, as well as an ardent proponent of unions. On Thursday, Biden’s Labor Secretary, Marty Walsh, told Reuters that gig workers should be treated as employees.

This simple statement could become an existential threat to app-based technology companies, such as Uber, Lyft, Instacart, DoorDash and dozens of others that heavily rely upon gig-economy workers.

The tech companies are basically built on the backs of contract workers. However, these gig workers are not classified as employees. Without the designation, contractors don’t qualify for traditional benefits, rights and privileges that are afforded to full-time permanent employees.

This sector represents a significant part of the economy. About 55 million Americans work in the gig economy, comprising around 36% of the workforce. If the Biden administration decides to take action based upon Walsh’s plan, it could have devastating consequences. 

Walsh seeks to rectify the situation by reclassifying contract workers as “employees.” The labor secretary said, “We are looking at it, but in a lot of cases, gig workers should be classified as employees…in some cases they are treated respectfully and in some cases they are not and I think it has to be consistent across the board.” Based upon this news, shares of Uber fell as much as 8%, while Lyft took a dive by 12%. Doordash fell nearly 9% and Grubhub was down 3.3%.

There are concerns raised by opponents of the gig-economy structure who say, similar to Walsh, it doesn’t seem fair to workers. Venture capitalists, institutions and wealthy individuals have flooded capital into this sector. When the tech companies went public, the investors, CEOs and top executives reaped vast fortunes. Contractors serve as cheap labor. If they acquiesce to critics like Walsh, they risk losing multimillions or billions of dollars. 

While many people earn a livelihood driving cars, delivering food and offering creative services through on-demand companies, there is a dark side. The contractors work long, hard hours for little pay and no real benefits. Near-monopolies have been created that crush or drive out the competition. Look at what happened to the once-ubiquitous yellow taxi cabs when Uber came to New York City. 

Uber, Lyft, DoorDash, Grubhub and other similar gig-based companies are highly dependent upon independent contractors. They have a financial self-interest in classifying drivers or workers as contractors. This model enables corporations to avoid paying payroll taxes, FICA (Social Security and Medicare), disability, federal and state-level unemployment and health insurance benefits. They are not required to comply with minimum-wage laws nor offer vacation days. 

Read the complete article here.

Fintechs Need Strong Consumer Protections, Diversity, Inclusion Asserts Key Congressman

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From tdoay’s Forbes Magazine:

Fintechs need to include strong consumer protections, diversity, and inclusion, Rep. Ed Perlmutter (D-CO), chair of the House Financial Services Committee’s panel on consumer protection and financial institutions said at a hearing on banking innovation today.

“Most banks and credit unions have been a source of strength in the pandemic in part because of the stringent capital, liquidity, and other regulatory requirements we place on these financial institutions,” he asserted.

The financial stability risks, consumer protection issues, market fairness questions, and potential benefits of unconventional banking charters needs to be explored, Perlmutter said.

Financial Services Committee Chairman Maxine Waters (D-CA) said she was alarmed the Office of the Comptroller of the Currency (OCC) overstepped its authority by creating a fintech charter and expressed concern it could lead to a regulatory race to the bottom.

The New York State Department of Financial Services has sued the agency, claiming it lacks the legal authority to issue that type of charter. In a memo prepared for the hearing, the Committee’s Democratic staff noted in recent years, OCC, and the Federal Deposit Insurance Corporation (FDIC) have taken steps to allow firms to engage in banking activities while being subject to less regulations and supervision compared to most other banks and credit unions.

At the same time Wyoming, which was mentioned frequently at the hearing, and other states have ventured into unconventional bank charters aimed at allowing cryptocurrency and blockchain to provide bank-like services.

Financial Services Committee lead Republican, Patrick McHenry of North Carolina, said regulators should be advancing advances in banking innovation and not hindering them.

Brian Brooks, who headed up the agency as Acting Comptroller of the Currency during the Trump administration praised the potential of fintechs to expand credit and economic opportunity with additionally providing better alternatives to payday lenders.

Read the complete article here.

In Biden, Labor Leaders See a President Who ‘Is Not Playing’ Games

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From today’s New York Times:

As Richard Trumka stepped out of the Oval Office last month after meeting with President Biden and a group of his fellow labor leaders, he had an unfamiliar feeling.

“He got it,” Trumka, the president of the A.F.L.-C.I.O., said of Biden.

“Many times you go into meetings like that and you have to start with the basics about why collective bargaining is important, and then you get to the end, and they still really don’t get it,” Trumka, whose organization represents the largest federation of labor unions in the United States, said in a phone interview today. “None of that was necessary with him. He already had that going in. So we talked about solutions.”

As the Biden administration kicks into gear, it is putting organized labor at the heart of its push to rebuild the economy to a greater degree than any president — Democrat or Republican — in well over half a century.

The administration has indicated that a sweeping infrastructure bill is likely to be its next major focus, after Biden signs the $1.9 trillion relief package that appears on its way to passage in Congress. The president has repeatedly said that “good-paying union jobs” will be at the core of his infrastructure plan, a commitment that he reiterated during his meeting with labor leaders last month. He has also thrown his support behind the PRO Act, which would represent the most comprehensive piece of federal labor reform in a century.

And last week Biden turned heads when he released a short video announcing his support for Amazon workers’ push to unionize in Bessemer, Ala. He did not name Amazon, but he expressed support for “workers in Alabama,” and insisted that the right to unionize was essential to a healthy work force throughout the country.

“That’s something very new: No president since Harry Truman has made a statement as forcefully in favor of unions,” Robert Reich, a professor of public policy at the University of California, Berkeley, and a former labor secretary under President Bill Clinton, said in an interview.

Biden “didn’t just say workers have a right to unionize — he went beyond that,” Reich said. “He reiterated that the National Labor Relations Act puts responsibilities on employers not to interfere in an election, not to intimidate, and he went through a list of employer responsibilities. And that really struck a new note.”

Certainly the Biden administration is facing headwinds as it pushes against longstanding trends. Labor union membership has eroded across the country since the middle of the 20th century, when one-third of the private-sector work force was unionized. Nowadays, that number is well below one in 10. And even within Biden’s administration, there are officials with close ties to corporate interests who have a history of fighting to keep organized labor out of emerging industrial sectors as Big Tech revolutionizes the job market.

And last week Biden turned heads when he released a short video announcing his support for Amazon workers’ push to unionize in Bessemer, Ala. He did not name Amazon, but he expressed support for “workers in Alabama,” and insisted that the right to unionize was essential to a healthy work force throughout the country.

“That’s something very new: No president since Harry Truman has made a statement as forcefully in favor of unions,” Robert Reich, a professor of public policy at the University of California, Berkeley, and a former labor secretary under President Bill Clinton, said in an interview.

Biden “didn’t just say workers have a right to unionize — he went beyond that,” Reich said. “He reiterated that the National Labor Relations Act puts responsibilities on employers not to interfere in an election, not to intimidate, and he went through a list of employer responsibilities. And that really struck a new note.”

Certainly the Biden administration is facing headwinds as it pushes against longstanding trends. Labor union membership has eroded across the country since the middle of the 20th century, when one-third of the private-sector work force was unionized. Nowadays, that number is well below one in 10. And even within Biden’s administration, there are officials with close ties to corporate interests who have a history of fighting to keep organized labor out of emerging industrial sectors as Big Tech revolutionizes the job market.

Read the complete article here.

Biden throws support behind Amazon workers holding milestone union vote

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From today’s CNN Online:

President Joe Biden on Sunday night lent his support to Amazon workers who are pushing to unionize — and appeared to warn Amazon (AMZN) not to deter them.

In a video posted on Twitter, Biden didn’t mention the company by name, but he did reference workers in Alabama, where a milestone union election is underway at an Amazon facility in Bessemer. Eligible workers at the facility are currently voting by mail to decide whether to form Amazon’s first US-based union.”Today and over the next few days and weeks, workers in Alabama, and all across America, are voting on whether to organize a union in their workplace,” Biden said in the video.

“There should be no intimidation, no coercion, no threats, no anti-union propaganda,” Biden continued. “No supervisor should confront employees about their union preferences. You know, every worker should have a free and fair choice to join a union. The law guarantees that choice.”

Biden’s remarks reflect the high profile of the Amazon vote, which has garnered national attention and support from prominent Democrats including Senators Elizabeth Warren and Bernie Sanders as well as Stacey Abrams. A group of 50 Congresspeople sent a letter last month urging Amazon’s outgoing CEO, Jeff Bezos, to “treat your employees as the critical asset they are, not as a threat to be neutralized or a cost to be minimized.”

Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union, which is conducting the union drive for Amazon workers at the Bessemer facility, thanked Biden “for sending a clear message of support” for the workers.

“As President Biden points out, the best way for working people to protect themselves and their families is by organizing into unions. And that is why so many working women and men are fighting for a union at the Amazon facility in Bessemer, Alabama,” Appelbaum said in a statement.

Read the complete article here.

The Jobs the Pandemic May Devastate

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From todays’ New York Times:

Projecting how many people will work in hundreds of detailed occupations in 2029 is a bold exercise — even without the uncertainty of the pandemic.

But labor experts within the U.S. government try to do just that. And their latest assessment of which jobs will grow over the next decade has alarming implications for jobs requiring less education — while also forecasting a boom for epidemiologists and other health-science jobs.

That assessment, from the Bureau of Labor Statistics, emphasizes all the uncertainty that accompanies projections, and it stresses that these are estimates of structural changes, not forecasts of cyclical booms and busts. Long-term projections are often wrong, especially for more volatile sectors like mining and construction, but the agency’s estimates are typically well reasoned and sober.

The original B.L.S. projections, made last year without taking pandemic effects into account, called for cumulative economywide job growth of 3.7 percent from 2019 to 2029. The new pandemic-informed projections cut that to 2.9 percent in the “moderate impact” pandemic outlook and 1.9 percent in the “strong impact” one.

Both of these new outlooks assume more remote work and higher demand for relevant technology services; less in-person entertainment and travel; and more investment in public health than would have happened without the pandemic.

In the “strong impact” projection, there would be 25 percent more epidemiologists in 2029 than the original baseline projection for 2029, the largest increase among nearly 800 detailed occupations. The 10 occupations with the biggest increase in projected employment relative to the baseline projection are all in medical, health-science and technology fields. The 10 occupations with the largest declines relative to the baseline projection include restaurant, hotel and transportation jobs.

Read the complete article here.

Robinhood ‘buried’ info on consumer rights in runup to GameStop saga

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From today’s MarketWatch.com:

Sen. Elizabeth Warren denounced online broker Robinhood’s practices for disclosing its customer rights in a statement Wednesday, while calling on the Securities and Exchange Commission to ban the practice of requiring new customers to forfeit their right to sue their stock brokers in court.

“Robinhood promised to democratize trading, but hid information about its prerogative to change the rules by cutting off trades without notice — and about customers’ inability to access the courts if they believe they’ve been cheated — behind dozens of pages of legalese,” the Massachusetts Democrat said.

Robinhood’s user agreement, like those of its largest competitors, requires new customers to agree that disputes between them and the company must be resolved through binding arbitration. Robinhood did not immediately respond a request for comment.

She also criticized the firm’s decision to temporarily restrict trading of a number of so-called meme stocks, including GameStop Inc. GME, -7.21% and AMC Entertainment Inc., AMC, -1.77% once their volatility triggered large clearinghouse deposit requirements. Warren said the company “did not have enough cash on had to manage a surge in trading and buried important information about consumers’ rights.”

Along with the statement, Warren released Robinhood’s response to a Feb. 2 letter in which she asked for a detailed description of the broker’s relationship with market makers, hedge funds and other entities that may have influenced its decisions. Robinhood executives have said in sworn statements that its decision to restrict trading was due solely to its need to manage risk and meet clearinghouse requirements, though Warren does not appear fully satisfied with this explanation.

“What’s still not clear from Robinhood’s response to my questions is the full extent of Robinhood’s ties to giant hedge funds and market makers,” Warren explained. “I’m going to keep pushing regulators to use the full range of their regulatory tools to ensure the fair operation of our markets, particularly for small investors.”

Read the complete article here.