Today’s News and Commentary — May 25, 2017

The Department of Labor has taken formal steps towards repealing the ‘persuader rule,’ a regulation that has been in full effect for less than a year.  As we summarized last May, the persuader rule was the Obama Department of Labor’s attempt to plug a loophole in the Labor Management Reporting and Disclosure Act: it extends reporting requirements to management consultants who are involved in anti-union campaigns but don’t have direct contact with employees.

President Trump released his proposed budget on Tuesday, and analyses continue to emerge.  Sharon Block argues in Democracy Journal that proposed allocations for the National Labor Relations Board and the Office of Labor-Management Standards confirm President Trump’s anti-union stance.  The New York Times observes that the proposed budget–and the Trump Administration more generally–see unemployment as the result of choice.  This explains the budget’s cuts to public benefits and limited appropriations for support and job training.  We recapped early coverage yesterday.

Emmanuel Macron won the French presidency on a platform emphasizing pro-business reforms to the labor market.  Now, he is trying to deliver.  His proposal would make it easier to hire and fire workers and would replace sector-wide negotiation with company-wide negotiation.  Employers are urging speed while union leaders have called for slower consideration.  Reuters notes that France’s private sector has grown quickly since Macron’s election, with companies attributing that growth to optimism associated with his victory.

“The big divide in America is not between the coasts and the interior. It’s between strong communities and weak communities.”  The New York Times’ Thomas Friedman makes this pronouncement in a travelogue-style op-ed about three communities in middle America.  Friedman visited towns and cities in Tennessee, Kentucky, and Indiana and found three main sources of optimism: forward-thinking local governments, collaboration between business and educational institutions, and the potential for emerging technologies like 3D printers to decentralize manufacturing.

Today’s News & Commentary — May 24, 2017

President Trump released his budget yesterday, and it proposed sharp reductions in spending for entitlement programs.  The budget also included a cut of 19.8 percent in funding for the Department of Labor.  Despite decreases in funding to the Department, the budget includes a proposal for a paid family leave program, which would allow states to grant six weeks of paid maternity and paternity leave.  The program would be funded through changes to unemployment insurance.  Although the New York Times reports that President Trump’s budget “stands absolutely no chance of being enacted by Congress,” the article notes that congressional Republicans might “seize the moment to impose some austerity of their own without going nearly as far as [Mick Mulvaney, director of the Office of Management and Budget] or Mr. Trump would like.”

Yesterday, Uber announced that it made a mistake calculating its drivers’ commissions in New York.  The company based payments to drivers on fares after taxes were taken out instead of basing drivers’ pay on fares before taxes were deducted.  Last year, the New York Taxi Workers Alliance filed a suit alleging that the company had been taking taxes out of workers’ pay even though the drivers’ contracts with Uber only allow the company to take its 25 percent cut out of payments to drivers.  The New York Times suggests that the mistake impacted tens of thousands of drivers and these inappropriate deductions could amount to more than $200 million.  Read more here.

Politico reported that Secretary of Labor Alexander Acosta will not delay the partial implementation date of the fiduciary rule scheduled for June 9th.  In an op-ed in the Wall Street Journal, Acosta stated that the Department has “found no principled legal basis to change the June 9 date while [it] seek[s] public input.  Respect for the rule of law leads [the Department] to the conclusion that this date cannot be postponed.”  However, the Department of Labor has pledged to review the rule despite the initial implementation date going forward as planned.  Politico predicts that given the length  of the rulemaking process the rule’s second implementation date will also remain in place.

The Wall Street Journal published an article reporting on the Fight for $15’s success in achieving its goal of a $15  minimum wage despite its inability to achieve its other goal, unionization of the workers involved in the campaign.  California, New York, and numerous cities are all on the path to a $15 minimum wage.  The article explores the SEIU’s strategy in funding the Fight for $15.  The union has put more than $16 million into regional organizing and public relations, even though the campaign has not translated into increased union membership and dues.  Despite the questions raised by the Wall Street Journal, SEIU president Mary Kay Henry says that the Fight for $15 is an important part of the union’s agenda, stating that the Fight for $15 “makes ‘the labor movement understand that you can make a bold demand.’”

Today’s News & Commentary—February 10, 2016

President Obama has released his budget, and House Republicans have already rejected it.  As Reuters notes, the $4.1 trillion spending plan includes some measures that could (at least in theory) garner bipartisan support: over $11 billion for the Departments of Defense and State, for example, as well as increased funds for cancer research and opioid addiction programs.  Nonetheless, other proposals, like a $10.25-per-barrel crude oil tax “were clear non-starters.”  The budget also includes, among other measures, $5.5 billion to help young people obtain jobs and $2 billion for an apprenticeship training fund. Politico has further coverage of the budget here and here.

The Hawaii House of Representatives has introduced a bill that would require the state to contribute funds to a public employee collective bargaining fund.  The legislation is a response to Friedrichs: its purpose “is to ensure that public employees are able to effectively collectively bargain with the public employer by establishing a mechanism that will provide the exclusive bargaining representative with the resources necessary to adequately represent public employees.”

At the Washington Post, Lydia DePillis and Joby Warrick report on a potential crisis: the United Mine Workers of America’s pension plan is on the verge of failure.  In response to calls for federal intervention, Democrats and Republicans alike supported a budget deal that would protect the pension funds — until Mitch McConnell blocked it.  McConnell has simultaneously attacked Obama’s Clean Power Plan for the loss of coal-mining jobs, leading union officials and worker advocacy groups to accuse him “of showing indifference to miners even as he campaigns on behalf of coal interests.”

A Cambridge-based networking site aims to target workers left out of LinkedIn.  According to the Boston Globethe site — Jobcase.com — is meant to serve as an alternative for workers without without four-year college degrees.  In addition to job listings, Jobcase also provides forums where people ask questions and share advice.  The site currently has 48 million members, and around 1 million new people visit it each month.

Today’s News & Commentary — January 27, 2016

According to the New York Times, Lyft has agreed to settle a class-action lawsuit with California drivers.  Under the terms of the settlement, Lyft will pay $12.25 million to the drivers represented in the suit.  The company has also agreed to adjust the terms of service that drivers agree to when signing up to work so that those terms are consistent with the definition of a contractor.  In addition, Lyft agreed to pay arbitration fees and other costs in claims initiated by the company or drivers, and the company will not longer be able to fire drivers at-will.  Uber has yet to settle the similar class-action suit in which it is involved.

A report on New York City’s pension system, covered by the New York Times, has found the pension system to be seriously deficient.  The report notes that the system, which includes $160 billion in retirement funds, lacks sufficient resources, staff, and many basic tools.  Some managers, for example, rely on fax machines to send and receive vital information.  According to the report, “operational risk is very high and an operational failure is likely.”  Although the report included recommendations for improvement, it concluded that the system currently “has little or no capacity to implement many of the recommendations of this report.”

Politico gives the rundown on Obama’s forthcoming budget.  According to National Economic Council Director Jeff Zients and Labor Secretary Tom Perez, the budget will include a number of proposals to increase access to retirement accounts.  Some of the proposals are new, like a measure that would fund pilot programs for nonprofits and States to make retirement benefits more portable.  Other parts of the proposed budget include ideas that President Obama has proposed to Congress on previous occasions, such as a federal auto-IRA program requiring employers that do not maintain a retirement plan to automatically enroll employees into an IRA.

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Today’s News & Commentary — December 18, 2015

According to the Wall Street Journal, 100 workers at Southwest Airlines were suspended without pay for attending union meetings in November. Transport Workers Union Local 555 represents 12,300 Southwest Airlines workers in the Dallas-based airline company. Southwest has also filed a complaint in federal court in Dallas, alleging TWU helped organize efforts to disrupt flights. This comes amid contract negotiations between Southwest and the TWU local that have been in works since 2011.

According to Lydia DePillis at the Washington Post, Republicans in Congress failed to attach their “laundry list” of attempts to block the Obama administration’s employment reform efforts to the final negotiated budget deal. Republican proposals included cuts to labor agencies and workforce development funding, but the only employer-backed rider that made it into the final deal was restricting the implementation of the administration’s “Fair Pay and Safe Workplaces” order, dealing with safety rules in handling fertilizer and enforcing minimum wage for seasonal contractors on federal lands. Other employer-friendly provisions remain in the 2,000-page bill, but it seems this is a battle the employer lobby has lost.

The Wall Street Journal takes a look into Lincoln, Nebraska, a Midwestern metropolitan area with a 2.3% unemployment rate, to examine what life looks like in a city with steady job creation and higher wages. Some employers have trouble finding workers, in a labor market where it’s easy for workers to find and switch jobs, earn higher wages and better benefits, including hiring bonuses, gym memberships, and creative perks. This summer, average hourly earnings in the Lincoln metropolitan area increased 11% from a year earlier, compared to the country’s overall growth of 2.5%. Some employers are hoping to recruit people from the coast, where cost of living is higher, to grow the labor force. Full employment may be great, but if companies are going to continue to grow, they need the labor force to grow, too. 

Politico reports that Bernie Sanders has won his biggest union endorsement yet in the Communications Workers of America (CWA), which represents over 300,000 members working in technology, news media, broadcast and cable television, and airline industries. This is his third national union endorsement, adding to National Nurses United and the American Postal Workers Union. Hillary Clinton’s union support includes AFSCME and SEIU, and amounts to over 10 million of the 14.6 million dues-paying union members in the country.

Today’s News & Commentary — February 5, 2015

In immigration news, Congress and President Obama continue to fight over immigration reform. Senate Democrats blocked a Republican-backed bill that would fund the Department of Homeland Security on the condition that none of the money go toward implementing President Obama’s executive action on immigration, according to the Los Angeles Times. The President’s executive action would “defer deportation for more than 5 million” undocumented immigrants. The President, meanwhile, hosted six “Dreamers,” undocumented immigrants who came here as children and have since been granted legal status, and pledged to veto any legislation that would roll back his immigration initiatives, according to the Wall Street Journal.

The New York Times reports that Illinois Governor Bruce Rauner used his “State of the State” address to announce his support for a state “right to work” law and to argue that political contributions from public employee unions should be banned. Governor Rauner is the first Republican in that office in twelve years. Roberta Lynch, the executive director of the local AFSCME union, said “public servants will be disappointed to learn that the governor is pursuing an aggressive agenda to undermine their rights[.]”

The Washington Post reports that Ford is moving 500 employees into a higher-paid tier of workers. Under Ford’s contract with the United Auto Worker’s union, only 20% of its workforce can be paid at the entry-level wage. Ford will hire 1,550 new workers this quarter to increase pickup truck production, and must move some workers into a higher wage tier to stay within the 20% limit.

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Today’s News and Commentary – October 1

The Washington Post reports that the federal government shut down early this morning due to an impasse in Congress over the budget. The New York Times explains which federal employees continue to work and which employees must stay home. The Times reports on one likely casualty of the shutdown in particular: the scheduled Friday release of data for unemployment and job creation in September. The Post also reports that Gregory Junemann, President of International Federation of Professional & Technical Engineers (IFPTE), which represents some federal workers, is calling on all federal employees to “take to the streets” to protest the leadership in the U.S. House of Representatives for failing to prevent the shutdown.

In light of today’s launch of the health insurance marketplaces under Obamacare, Charles Lane of the Washington Post argues that Republican opposition to the law misses the fact that it has the potential to undermine collective bargaining, since workers will no longer need to rely on their unions to negotiate access to attractive health coverage.

Daniel Alpert argues in the New York Times that these headlines are distractions from “the real problems afflicting our economy” – an oversupply of global labor, productive capacity, and capital – which have prevented the world from fully recovering from the economic crisis. He emphasizes that “[h]undreds of millions of people who once lived in sleepy or sclerotic statist and socialist economies now compete directly or indirectly with workers in the United States, Europe and Japan, in a world bound by lightning-fast communications and transportation.”

Edward Lazear argues in the Wall Street Journal that the reason the Federal Reserve did not scale back its extraordinary measures to boost the economy earlier this month despite the falling unemployment rate is because the employment rate—the proportion of the working-age population that has jobs—has made little progress.  He agues that the employment rate is the best single indicator of labor-market health, and notes that it is still hovering at around 58.5 percent, down significantly from its pre-recession levels of over 63 percent.

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