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

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.

A proposed California law, AB 257, could transform fast-food work for the better

From today’s Fortune Magazine:

A new policy strategy emerging in California holds the potential to transform fast-food work from some of the lowest-paying jobs in the state into good jobs, with solid wages, benefits, and a voice at work. Workers, employers, and policymakers in the state and around the country should pay close attention to this model, because setting and enforcing high standards in the fast-food industry is notoriously challenging—due to the industry’s franchising model, its numerous small employers with little ability to profitably raise standards, and its largely non-union workforce.

LOS ANGELES, CALIFORNIA - APRIL 16: Flags are flown at a car caravan and rally of fast food workers and supporters for passage of AB 257, a fast-food worker health and safety bill, on April 16, 2021 in the Boyle Heights neighborhood of Los Angeles, California. The rally was held outside of a McDonald’s location where a worker lodged public health complaints and a wage theft complaint. Some fast food workers are on strike in Los Angeles County today in support of the bill. (Photo by Mario Tama/Getty Images)

Fast food workers earn some of the lowest wages in California—$13.27 an hour, according to the Bureau of Labor Statistics—with only farm workers earning less in the state. Benefits are also meager: Researchers have estimated that just 13% of fast-food workers receive health benefits through their employer. A 2021 study found that more than two-thirds of the families of fast-food workers in California were enrolled in at least one public-safety net program, such as the Supplemental Nutrition Assistance Program (SNAP) or Medicaid, at a public cost of $4 billion a year.

Compounding these problems is that nearly 9 in 10 fast food-workers, say they are subject to illegal working conditions—refused overtime pay, forced to do off-the-clock work, denied breaks, or placed in unsafe situations.

At the heart of the strategy to improve conditions for fast food workers in California is a “sectoral council,” which would bring together representatives of workers, employers, and public-sector regulators to make recommendations regarding minimum compensation, safety, scheduling stability, and training standards for the industry.  A hearing on the FAST Recovery Act—a bill that would establish the sectoral council—was held on April 22, and some think the bill could pass this year.

Sectoral councils and similar bodies have succeeded in helping raise working standards in a number of industries and regions. The state of New York used a wage board to bring together representatives of workers, employers, and the public to raise wages for fast-food workers;  the city of Seattle Domestic Workers Standards Board provides a forum for domestic workers, employers, private households, worker organizations, and the public to improve conditions for that sector; and a number of countries, including Australia and Britain, have used similar bodies in labor relations.

A fast-food sectoral council could form the backbone of fundamental change in the industry: It could not only raise standards for workers but also provide a way for workers as well employers—both franchisees and franchisors—to have a strong voice on the standards in their industry, while helping ensure standards are actually implemented and complied with.  These features are critical, because the structure of the fast-food industry makes it difficult to improve working conditions with traditional measures that have succeeded in other industries, such as actions by high-road employers that want to provide good compensation, the push of collective bargaining, or stand-alone legislated standards.

Read the complete article here.

Labor Secretary Says Gig Workers Should Be Converted to Employees

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.

Break down employment barriers with training, education programs

From today’s CalMatters Online:

“You can’t have just one job in America,” says a gig worker in Los Angeles County, and “you could get replaced like this. ‘Say one wrong thing to me? You’re fired …There is a line outside the door who wants your job.’”

That is one of several perspectives from struggling workers in California captured in a new report by the Institute for the Future, which interviewed a cross-section of Californians paid less than $15 an hour last fall. The report, released March 24, explores troubling trends that preceded the pandemic but now are worsening. 

And it comes on the heels of another report by the state’s Future of Work Commission that calls for a new social compact for workers based on some staggering statistics. For example, nearly one-third of all  workers in California make less than $15 per hour, and a majority are over age 30. Women and people of color also are paid, disproportionately, the lowest wages in our state.

Beyond wages, fewer than half of workers in California report having a “quality job,” which the Future of Work Commission describes as “a living wage, stable and predictable pay, control over scheduling, access to benefits, a safe and dignified work environment, and opportunities for training and career advancement.”

The commission also notes how a decrease in worker power and organizing relates to job quality, inequality and violations of workers’ rights. The percentage of Californians in a labor union has dropped from 24% in 1980 to 15% in 2018, and membership in a union reduces the likelihood of low-wage employment more so than a college degree (39% versus 33%).

The futurists at the Institute for the Future outline how COVID-19 has accelerated instability and insecurity for workers. This is now an all-hands on deck moment, requiring consensus and collaboration across sectors – government, business, labor, education, workforce development, philanthropy and community organizations. This is difficult, complicated, and even expensive work, but it is essential if we are to make the California Dream real and attainable for all.

Despite collaborative efforts, we need more employers and labor organizations at the table. Industry has a critical role, and they must be closely involved every step of the way, not as an afterthought.     

The good news is that some promising efforts are underway. If passed, Assembly Bill 628, introduced by Assemblymember Eduardo Garcia, a Democrat from Coachella, will build upon the Breaking Barriers to Employment Initiative by assisting individuals in obtaining the skills necessary to prepare for jobs in high-demand industries. The program would support individuals who face systemic barriers to employment with training and education programs aligned with regional labor market needs.

Read the complete article here.

With a Huge Victory, UK Uber Driver Moves on to Next Gig Worker Battlefront

From today’s Inequality.org:

In recent weeks, courts in multiple countries have delivered huge victories for gig workers by establishing the principle that these workers are, in fact, employed by digital platforms and are thus entitled to basic worker rights and protections.

The most stunning win was the UK Supreme Court’s recent scathing judgement against Uber. While lower courts had ruled again and again that UK-based drivers are in fact workers, the company had refused to comply with this classification until this final ruling.

James Farrar, a former Uber driver and a lead plaintiff in the case, is celebrating this huge victory, which means that gig workers will have the right to wage protections, holiday pay, and other basic benefits. But during six years of litigation against Uber, Farrar and his colleagues realized that gig workers would need to fight on additional fronts. Right now, these employees lack access to the data that their app-based employers gather about them.

To take on this critical battlefront for worker rights in the 21st Century, Farrar has founded Worker Info Exchange. I asked Farrar to explain why he started this new nonprofit organization and what it hopes to achieve.

How did you come to realize the need for a data rights strategy?

When we brought the employment case, Uber challenged me with my own data and they came to the tribunal with sheaves of paper that detailed every hour I worked, every job I did, how much I earned, whether I accepted or rejected jobs. And they tried to use all this against me. And I said we cannot survive and cannot sustain worker rights in a gig economy without some way to control our own data.

So I used Europe’s General Data Protection Regulation (GDPR) to try to extract my data from Uber. And it began by asking questions, what data do you have and what can you give me? And I began to understand that Uber was unwilling or unable or both to give it to me. And I needed an entity behind me to get that to happen.

How will access to their data help workers?

Gig workers need access to data to see how they are being managed and paid. Right now companies are using automated decision making. This means allocation of work, performance management, and dismissals are decided based on data that the app gathers and feeds into algorithms. We need to understand the code behind those because sometimes those decisions are unfair. When decisions are unfair we can’t just let company executives say it wasn’t intentional. We need to expose and challenge the logic fed into the algorithm. Very few people are doing this right now.

GDPR is useful because it doesn’t just give you the right to data, it’s access to logic of processing. I have a right to fairness of processing under GDPR. So data rights are more comprehensive than just simple access to raw information. What we have done so far is challenge Uber to disclosure — what data the app collects, things like GPS trace. But what we really want are inference data. What decisions has it made about me? How has it profiled me? How does that affect my earnings? This is what Uber has not given us.

Read the complete article here.

Silicon Valley’s essential workers form new group to fight for work rights

From today’s San Jose Spotlight:

A group of six essential workers and labor leaders stood in front of McDonnell Hall in San Jose Wednesday—the same church labor activist Cesar Chavez started his now-iconic labor organizing more than 50 years prior.

The workers are looking to craft the future of the labor movement among essential workers for the next 50 years, starting with combating unfair treatment from employers, elected officials and corporations during the COVID-19 pandemic.

They announced Wednesday the launch of a new initiative called the Essential Workers Council, a collective of 14 members from diverse professional fields in the South Bay, including medical workers, security, grocery workers, childcare, construction and education. The council has been established by Silicon Valley Rising, a collective of leaders who advocate for workers’ rights and affordable housing.

“As workers on the front lines of this crisis, we need to be the ones setting the agenda for recovery,” said Deo Agustin, a childcare worker and member of the new council. “We can’t let business leaders decide how things should be run.”

The group, with local labor leaders’ help, hopes to lobby elected leaders for more essential worker protections during and after the pandemic, such as higher wages, more widespread hazard payrent relief, stronger eviction protections and affordable childcare.

“Even as mostly Black and brown people put their lives at risk, dying at disproportionately higher rates, too many corporate executives and elected leaders have ignored their needs and their voices,” said Maria Noel Fernandez, director of Silicon Valley Rising, on Wednesday. “They call this work essential, but not the people, their families and our communities.”

The coronavirus has killed Black and Latino residents in the county at a far higher rate than other races. Latinos in particular make up 25% of the county’s population but account for 51% of cases and nearly 29% of deaths, according to county numbers. Those racial groups are overrepresented in essential work.

The council, frustrated by the lack of clear leadership from their employers to combat COVID-19, such as providing enough personal protective equipment and socially-distanced workspaces, spoke out about their experiences in working while living in fear that they would contract the coronavirus.

Read the complete article here.

The Unionization Vote at Amazon

From today’s New York Times:

The most closely watched union election in recent history is underway in Alabama, where almost 6,000 workers at an Amazon warehouse near Birmingham are voting on whether they want to form a union. The election has attracted attention from President Biden, N.F.L. players and Hollywood actors, making it a high-stakes test of whether a union has a role in one of the country’s biggest employers.

The unionization effort, which began last summer, is the largest and most viable organizing campaign among Amazon workers in the United States. Here is what you need to know about it.

The unionization push came from a group of largely Black workers at the Amazon fulfillment center in Bessemer, Ala., which is just outside Birmingham. Late last summer, they approached a local branch of the Retail, Wholesale and Department Store Union, which has grown in the South, particularly in poultry, an industry with traditionally dangerous jobs and many Black employees.

The union deployed organizers who worked at nearby warehouses and poultry farms to focus full time on talking to workers at the Amazon warehouse. By late December, more than 2,000 workers signed cards indicating they wanted an election, the union said. The National Labor Relations Board determined that those signatures signaled “sufficient” interest in holding a vote.

Two big forces have helped drive the unionization effort: the pandemic’s focus on essential workers and the racial reckoning brought on by Black Lives Matter protests.

Amazon opened the Bessemer warehouse in March 2020, just as the coronavirus was taking hold in America. The pandemic made clear the critical role essential workers, many of whom were Black and paid hourly, played in serving customers and the economy broadly. Amazon had extraordinary growth last year, as people turned to online shopping instead of venturing into stores. It went on a huge hiring spree, ending the year with 1.3 million employees and $386 billion in sales.

In early summer, George Floyd’s killing prompted calls for racial justice, and the union has focused its organizing on issues of racial equality and empowerment. It has a decades-long history of working on civil rights and labor issues in the region. Around the same time, Amazon ended the extra pay it had given workers earlier in the pandemic. The workers who started the organizing said their pay was not commensurate with the risks they took and the productivity they must maintain.

Read the complete article here.

Senators who voted against $15 minimum wage represent three-quarters of workers who would benefit

From today’s Business Insider:

Of the 32 million workers who would receive a raise under a $15 minimum wage, 24 million are in states where senators voted against it, according to a new report from the left-leaning Economic Policy Institute (EPI).

That works out to 75% of all the workers who would benefit from a higher federal minimum. The 32 million workers who would be impacted represent 21% of the overall workforce, according to the report.

Sen. Bernie Sanders’ push to include a provision for raising the wage to $15 by 2025 was voted down on Friday. Seven Democrats — including the moderates Joe Manchin and Kyrsten Sinema — joined Republicans in voting down the measure. Also voting against was independent Angus King of Maine, who caucuses with the Democrats.

The EPI report found that increasing the minimum wage to $15 by 2025 would also benefit America’s essential and frontline workers. It would be a wage hike for 19 million of them, around 60% of all workers impacted. 

As Insider’s Grace Dean previously reported, almost a third of Black workers would get a raise under the policy; EPI also found that 26% of Hispanic workers would benefit from the bump.

A $15 minimum wage has broad support. In an Insider poll, over 60% of respondents said they would definitely or probably support a $15 minimum wage. Respondents were more split on when an increase should come into effect: 39% said that, were the increase to go into effect, a “$15 minimum wage should be implemented immediately.” Conversely, 50% would “prefer a phased rollout, gradually raising the minimum wage annually to $15 in 2025.”

Sanders’ Raise the Wage Act would have raised the federal minimum wage to $15 by 2025. Even that schedule wasn’t quick enough for some minimum wage workers.

Cynthia Murray, a Walmart associate and member of United for Respect, testified at a Senate budget committee hearing on the proposed increase

Read the complete article here.

L.A. County approves ‘hero pay’ of $5 an hour for grocery store workers

From today’s Los Angeles Times:

Hundreds of grocery store workers in unincorporated Los Angeles County will receive $5 an hour in hazard pay on top of their regular wages as part of the county’s “hero pay” mandate that goes into effect Friday and lasts 120 days.

The L.A. County Board of Supervisors voted 4-1 Tuesday to mandate the pay bump for publicly traded grocery store or retail drug companies, or companies that have at least 300 employees nationwide and more than 10 employees per store site. The measure applies only to unincorporated areas, benefiting about 2,500 hourly grocery store workers.

“These workers … have put their lives on the line since the beginning of the pandemic to keep our food supply chain running and provide access to medicine our families need,” Supervisor Hilda Solis, who authored the motion, said in a statement. “Many are working in fear and without adequate financial support, while their employers continue to see profits grow and top executives receive steep pay bonuses.”

Supervisor Kathryn Barger voted against the measure, saying she felt that it leaves out many essential workers and that it could have unintended consequences.

Barger said officials have worked hard to bring retailers to food deserts in unincorporated areas, such as Grocery Outlet in Altadena, which has donated food for food drives during the pandemic.

“I would hate to think we’re driving [out of business] the very businesses we fought so hard to locate in unincorporated areas, many of which are working class neighborhoods … and that’s why I can’t vote for this,” said Barger, the only Republican on the board.

Since January, several cities, including Santa Monica, San Jose, Berkeley and West Hollywood, have considered or passed some level of hazard pay mandates.

The county’s ordinance will probably be challenged in court in the coming days by the California Grocers Assn., which has sued the city of Long Beach after it passed its “hero pay” measure.

Read the complete article here.

San Jose passes mandatory $3-an-hour pay raise for grocery workers

From today’s San Jose Mercury News:

Thousands of San Jose grocery store workers will soon receive a $3-an-hour boost on their paychecks, as San Jose became the latest city to pass a new ordinance compelling large grocers to offer their employees  hazard pay for their high risk of catching COVID-19 at work.

The San Jose City Council voted 7-3 Tuesday night for a new ordinance temporarily requiring corporate grocery stores, chain supermarkets and retail stores that sell groceries and employ at least 300 people nationwide to pay workers an additional $3 an hour on top of their regular wages. The ordinance will last for 120 days after it goes into effect. Small businesses and franchises with less than 300 employees are exempt.

The ordinance failed to clear a requirement that it must be backed by at least eight members of the council to become effective immediately. Instead, the majority vote means that the new ordinance will be enacted in about two months.

Councilman Sergio Jimenez, who crafted the ordinance, said he had hoped that it would have garnered more support but was nonetheless pleased that the city will provide relief to front line grocery workers.

“I feel strongly that this is the right thing to do in my gut,” Jimenez said. “And I’m hoping that in 120 days, the sky didn’t fall, stores didn’t close, the economy is looking up and these companies continue to do well.”

San Jose will soon join the cities of Oakland, Long Beach, Santa Monica and Seattle, which have all passed similar ordinances in recent weeks to mandate increased wages for grocery store workers. Santa Clara County will vote later this month on a $5-an-hour boost on the paychecks of workers in grocery stores and fast-food restaurants everywhere in the county, except for San Jose.

San Jose Mayor Sam Liccardo and council members Dev Davis and Matt Mahan voted against the ‘hazard pay’ legislation Tuesday night, citing an inadequate analysis of the possible financial effects, concerns over potential store closings and increased grocery prices and a disagreement over exactly which companies should be affected by the legislation. Councilmember Pam Foley recused herself from the vote because she holds stock in Amazon, the owner of Whole Foods, which would be affected by the ordinance.


Read the complete story here.