Today’s News & Commentary — August 29

The New York Times reports that a group of former FedEx drivers in California and Oregon have been cleared by the U.S. Court of Appeals for the Ninth Circuit to proceed with employment law claims. This comes after the court declared the workers to have been employees, not independent contractors. The court reasoned that the drivers were assigned delivery areas, worked under the employer’s instructions, were evaluated by the employer, and used their own vans which were painted with FedEx’s logo and shade. In other states, courts have said that FedEx workers are independent contractors. The difference matters as employees are given more protection under federal and state labor laws. FedEx has said that it would appeal the determination.

Businesses remain the primary beneficiary of continued economic growth in the U.S. The economy has gained improvements since the recession with low unemployment rates and high projected annual growth rates. However, while corporate profits increased 8% in the second quarter, workers’ income rose only 5.8%. According to economists, workers may obtain more bargaining power if the unemployment rate continues to decrease. Despite the drop in the unemployment rate from 8.2% two years ago to 6.2% now, there remains “little incentive for employers to substantially raise wages to retain and attract workers.”

In international news, SNPL France Alpa, the main union of Air France’s pilots announced that it would seek a one-week strike next month. The pilots are protesting the airline’s possible cutback on cockpit crew as it struggles to compete with budget airlines such as Ryanair and easyJet. SNPL France Alpa has described the situations as “a complete lack of dialogue” with management. Air France reported a net loss of about $808 million in the first half of 2014, but says that it is committed to speaking with the union. The strike comes after Lufthansa, a German rival airline, said it would cancel more than 100 flights today because of a labor dispute over retirement benefits. 

The activist group China Labor Watch reported that it discovered labor violations at a Chinese factory of a supplier for Samsung Electronics and the Lenovo Group. The group, which is based in New York, said that it found more than 10 children workers as well as more than 100 student workers who had not been paid overtime or a subsidy for working at night. Samsung said that it would undertake its own investigation regarding the allegations. 


Today’s News & Commentary — August 28

The NLRB is considering another joint employer case. After the Board’s decision to treat McDonalds as a joint employer (which we covered extensively) the agency is inviting parties in a subcontracting case for input on whether it should reevaluate its joint employer standard. The Sanitary Truck Drivers and Helpers Local 350, a Teamsters local union, has asked the NLRB to declare Browning-Ferris Industries of California, Inc. and Leadpoint Business Services, a staffing agency, joint employers for the purpose of collective bargaining. The union says that, “the difficulties presented by this triangulated workforce structure has created a second-tier workforce of employees working for lower wages and fewer benefits than the standard employees performing the exact same work.” The Wall Street Journal calls the joint employer cases “the latest battle over the application of labor laws.”

In Boston, workers of the supermarket chain, Market Basket, have succeeded in reinstating the company’s former president, Arthur T. Demoulas, according to the New York Times. Demoulas’ cousin and allies have agreed to sell their stake in the company and Demoulas will be reinstated immediately. The governors of Massachusetts and New Hampshire intervened in the dispute after shoppers abandoned the store in solidarity with workers.

In New York, Mayor Bill de Blasio and Teamsters Local 237 have come to a tentative agreement in a pay equity lawsuit, the New York Times reports. Under the city’s policy, special officers, who are largely male, are eligible to earn over $7,000 more annually than safety agents, who are overwhelmingly female. The proposed settlement raises the pay for both classes of employees and accelerates the salaries of agents whose pay fell behind officers. Continue reading

Today’s News and Commentary — August 27

In a victory for a postal workers’ union, an administrative law judge has ruled that the United States Postal Service must hand over a copy of its confidential agreement with the retailer Staples, according to the Wall Street Journal.  The union has argued that the agreement, under which Staples provides postal services at its own stores and through its own employees, violates the union’s contract with the USPS.  The president of the American Postal Workers Union praised the ruling, saying ““We think this is a secret, dirty deal between the postal service and Staples and we want transparency for this country and the postal workers.”

The Huffington Post reports that the SEIU has prevailed in an election making it the bargaining representative for 27,000 Minnesota home-care workers.  According to the paper, “[t]he union is holding up its Minnesota victory as a sign that it will continue to organize home care workers despite the Supreme Court’s recent Harris v. Quinn decision.”

Meanwhile, the Associated Press reports that members of the International Longshore and Warehouse Union have voted to ratify a contract with three Northwest grain merchants, bringing an end to what had been a long and contentious labor dispute.

The Washington Post reports that in seeking the top position at the National Football League Players’ Association, Sean Gilbert, a former player, has proposed a major overhaul to the players’ current contract with the league.  If elected, Gilbert said that he would seek to void the current collective bargaining agreement and would agree to a longer, 18-game season in exchange for concessions to the players, including a higher minimum salary and earlier free agency.


Today’s News & Commentary — August 26

The Wall Street Journal reports that Lufthansa has entered new talks with its pilots’ union, in an attempt to avert a strike. The union – Vereinigung Cockpit – objects to the airline’s plan to raise the early retirement age. If negotiations are unsuccessful, Lufthansa will face the fourth labor strike this year. 

The New York Times highlights new academic research which suggests unemployment rate statistics have become less accurate over the last two decades, in part because of a rise in non-response. According to the Pew Charitable Trusts, response rates for relevant polls were 36 percent in 1997 – by 2012, they had fallen to 9 percent. 

Michigan’s new right-to-work law may face its first major test this week, as over 100,000 teachers finalize their decisions on whether or not to stay in their union. In August, a 31-day window began during which teachers could decide whether or not to stay in the state’s largest public-sector union. At the end of this month, the union will see what membership rolls look like when members voluntarily pay dues.  The Huffington Post / AP reports.

The Department of Labor is under scrutiny for an alleged pattern of “frivolous spending.” The House Committee on Oversight and Government Reform, chaired by Rep. Darrell Issa (R-Calif.), is investigating more than half a million dollars in reported agency expenditures for informational elevator posters, “public relations contests” and book club promotion. The Hill reports. 

Today’s News & Commentary — August 25

The consulting firm PwC has published a new report, “The Future of Work: A Journey to 2022.” The report offers three scenarios, or “worlds,” for life in the future workplace: the transformation of large corporations into mini-states, the development of collaborative networks due to increased specialization, and the influence of the environmental and social agenda on corporate practice. Most workplaces will include a mix from these three scenarios. The report predicts that companies will monitor employees’ health and personal lives, utilize data tools to quantify employees’ performance (especially relative to each other), expand compulsory corporate culture programs, and replace full-time employees with contract workers. Summary and analysis are available here and here.

At a recent economic policy conference, central bankers expressed a commitment to reducing unemployment and spurring job growth. This commitment marks a shift from central banks’ previous focus on reducing inflation, according to the New York Times.

Japanese corporations are increasing efforts to hire international students, the New York Times reports. 48% of midsize to large companies reported plans to hire foreign college graduates. Unlike many Western businesses, Japanese corporations do not hire to fill a specific position but recruit a number of graduates annually and invest extensive training in their new employees.

Paul Krugman argues that affordable housing, rather than lack of business regulation, is behind migration from the Northeast to Texas and other Sunbelt states.

Weekend News & Commentary — August 23-24

Several labor unions participated in a demonstration on Saturday over the death of Eric Garner, a black Staten Island resident who died in police custody. The New York Times reports that the police officer’s union and some members of the United Federation of Teachers criticized labor groups for joining the protest.

New York Mayor Bill de Blasio is facing criticism over a recently passed initiative to supplement the wages of school bus drivers, monitors, and mechanics. During the 2013 mayoral election, de Blasio and other candidates promised the Amalgamated Transit Union to revisit contracts that reduced workers’ salaries.

A new paper presented by two economists on Friday argues that job losses suffered during the Great Recession were caused by issues that predate the Recession, such as a slowdown in small business creation and an increase in occupational licensing requirements. At the same conference, a leading scholar of labor markets predicted that computers do not pose a threat to middle-skill jobs. He argued that humans will still be needed for decision-making, problem-solving, and adaptability, the New York Times reports. Continue reading

Today’s News & Commentary — August 22

The New York Times Editorial Board critiques the role of for-profit educational institutions in the federal job-training system, highlighting the predatory nature of many proprietary colleges. The Federal Workforce Investment Act, created in 1998, has poured $3.1 billion dollars into creating tuition vouchers which individuals can redeem for job training. This steady source of income to for-profit colleges usually only covers a fraction of students’ cost of attendance, meaning students often emerge from these institutions saddled with debt and with unclear job-placement prospects.

Federal Reserve Chair Janet Yellen discussed labor market strength at the annual Jackson Hole Economic Policy Symposium. In prior remarks, Yellen had cited stagnant wage growth as a sign that the labor market is still weak. At Jackson Hole, she pointed to research that suggests “wage growth has been subdued because employers were unable to cut salaries deeply enough during the recession, a phenomenon dubbed ‘pent-up wage deflation.’” If this is the case, Yellen noted, the labor market may be stronger than previously believed. The Washington Post reports.

The Department of Labor has reinstated a whistleblower at a former nuclear weapons complex, determining that the termination of her employment had been retaliation for reporting violations of record keeping and safety codes. The L.A. Times reports.

The New York Times highlights the research of economist Claudia Goldin, whose recent work has uncovered a “pay penalty” that disproportionately hurts working mothers. According to Goldin, people in professions like law and finance get paid disproportionately more when they work extra-long hours, while people in low-wage jobs get paid disproportionately less per hour when they work fewer than 40 hours a week. Though the penalty is the same for men and women, women are ultimately impacted more as they are more likely to take reduced hours or breaks in their careers to handle child care.

The Wall Street Journal questions whether President Obama’s Fair Pay and Safe Workplaces Executive Order will also apply to unions. Unions such as the American Federal of Government Employees and the National Federation of Federal Employees are technically government contractors, and “unions as well as corporations can be guilty of violating labor laws.”