Today’s News and Commentary — December 6, 2016

New York City is on the verge of passing historic legislation that would pave the way for representation of fast food workers by advocacy organizations.  According to Buzzfeed, “the law would require fast food employers to automatically deduct fees from the pay checks of workers who choose to be represented.  The money would go a member organization of their choosing, tasked with advocating on the worker’s behalf.  It looks and sounds an awful lot like a union, in an industry where unionization is all but impossible under the current system.”  Notably, such a law would allow for worker representation without overcoming the substantial obstacles to unionization of fast food workers.  Organizations would not represent workers in collective bargaining negotiations, but would be able to organize and lobby on their behalf.  Payroll deductions would “look more like recurring donations than union dues, with workers able to choose how much they wish to contribute from each paycheck.  Organizations receiving the funds will need to be non-profits, registered with the city’s Department of Consumer Affairs, that advocate on behalf of workers.”  Council members expressed confidence that the legislation will pass.

Amazon is on the verge of significantly automating retail shopping, by announcing plans to open a grocery store with no cashiers or checkout lines.  Quartz reports that Amazon “will open a grocery store in Seattle, Washington, in early 2017, where customers will be able to walk in, pick up the items they want to buy, and walk out.  To achieve this, Amazon will launch an app called Amazon Go (also the name of the store) which hungry customers will use to register that they’re in the store.”  Given that the Bureau of Labor Statistics estimates there are nearly 3.4 million cashiers employed in the United States, such automation could have a significant effect on jobs.  CNBC notes that the New York Post ran a front page today calling Amazon’s foray “the end of jobs.”  Business Insider predicts that such automation will be much more difficult for President-elect Donald Trump to counter-act that the outsourcing of manufacturing jobs, and represents much more of a threat to jobs than outsourcing.

Continue reading

Today’s News & Commentary — May 24, 2016

Nowadays, you can order a pizza by tweeting an emoji and have it delivered to you in a car equipped with a built-in pizza warmer. But technology hasn’t just changed the way that pizza arrives on your doorstep; apparently, it has changed the way that employers underpay workers as well. The New York Times reports that New York Attorney General Eric Schneiderman has filed a lawsuit against Domino’s Pizza alleging that the computer system it provides its franchisees “systematically undercounted hours worked by employees, shortchanging them hundreds of thousands of dollars.” The suit comes on the heels of a number of recent legal victories against Domino’s franchisees in the Empire State, but differs from those actions in that it targets the franchiser for “forcing franchisees to use a computer accounting system even though it was aware it was flawed.” In fact, Schneiderman claims, “Domino’s corporate executives knew about the violations, denied responsibility and failed to take action.” Accordingly, Schneiderman promises to “prove that the Domino’s corporate franchiser is legally responsible for rampant wage theft occurring at its stores.” Exactly how rampant is the problem? According to Schneiderman’s office, “78 percent of franchisees listed instances of subminimum wages, and 86 percent . . . listed instances of unlawfully low overtime rates.”

As the recent dust-up over SEIU’s proposed agreement with Airbnb suggests, the growing gig economy has forced a bit of an existential crisis upon organized labor. Writing in Fast Company, Sarah Kessler takes a closer look at how unions are responding to rapidly advancing technology and its spiraling effects on the economy. On the one hand, says SEIU president Mary Kay Henry, “technology gives [unions] a leg up in being able to connect people to each other and activate them.” Some unions have also expressed willingness to organize gig workers, even if the shape of that organization does not fit the contours of a traditional union. On the other hand, however, “[e]ncouraging on-demand companies to rely on a workforce of independent contractors who lack the rights and protections of employees” may be “bad public policy.” That’s why the AFL-CIO — of which SEIU is no longer a part — continues to insist that “working people in the gig economy share a single common designation: employees.”

Continue reading

Weekend News and Commentary — January 17, 2016

Per the New York Times, bad news symptomatic of low returns this winter continues to pour in on the retail front. Joining Macy’s, JC Penney, and Sears, Walmart announced on Friday that it will be closing 269 stores, 154 of which are in the United States (102 of these are Walmart Express stores). As many as 10,000 domestic employees and 6,000 empoyees abroad could lose their jobs. Weak holiday sales are not just attributable to warmer weather but also a notable shift in the way consumers prefer to shop – Amazon and other online merchants continue to enjoy substantial sales even despite the warm weather. The stores are scheduled to shut down by the end of January.

The NYT reports that Morgan Stanley is pushing forward with its plan to lay off hundreds of employees from its fixed-income division (bond and commodity desks). On Thursday, the firm announced that it will be making changes to the division’s managemant ranks. Since 2010, the firm has run through four different leadership teams in the division with little success.

The Wall Street Journal’s Robert Litan adds to the conversation about wage insurance inspired by Obama’s brief reference to the idea in his State of the Union address. In his view, such a safety net system has potential to attract bipartisan support – Democrats worried about falling incomes triggered by unemployment would view this as an effective way to subsidize those cornered into taking jobs that pay less than their previous positions while Republicans would appreciate the resultant decrease in unemployment costs (wage insurance would only kick in when those who are unemployed obtain another job).

Continue reading

Today’s News and Commentary — January 8, 2016

Per the LA Times, an Automatic Data Processing report released this week shows that companies in the private sector accelerated their hiring in December 2015, finishing out the year strong by adding 257,000 new jobs.  This figure, which exceeded even analysts’ projections, is up from the 211,000 positions created in November and constitutes the largest monthly increase since December 2014.  A broader jobs report assessing both private and public employment is scheduled to be released today by the Department of Labor.  While some economists expected the report to show slowed job growth (around 200,000), this ADP data may indicate otherwise.

This lines up with the Labor Department report released yesterday showing that the number of Americans who are filing for unemployment benefits has continued to decrease.  Initial claims dropped 10,000 to 277,000 for the week ending January 2, and the 4-week average dropped 1,250 to 275,750.  Some economists are optimistic that this is a signal of healthy labor markets — we’ll know more after the monthly federal employment report is released today.

Retail employees may be facing uncertain fates after a slumping holiday season.  The New York Times reports that Macy’s has announced a plan to restructure its operations, which will result in the elimination of 3% of its workforce (approximately 4,500 jobs — 3,000 store employees, 165 senior execs, and 650 back-office jobs).  Macy’s attributes its declines in sales to the unseasonably warm weather experienced across the country this winter that kept demand for winter clothes low.  The retailer has also confirmed that it will be closing 36 stores in the U.S.

Continue reading