How Bad Could it Get (Legally)?

It’s a good moment to think creatively and expansively about how to revitalize the U.S. labor movement.  This important work is underway, with contributions from academics, labor lawyers, union organizers, and others.  Substantive debates about the future of labor law and labor organizing now populate the pages of publications ranging from the Yale Law Journal to Boston Review.  Much of this writing evidences an appropriate degree of optimism – the pieces assume a future in which, for example, progressive law reform might be possible, or in which workers can regain power through increased use of strikes even in the absence of law reform, or in which fundamental aspects of U.S. political economy (and political ideology) might be transformed.  This kind of optimism is necessary to visionary thinking, and it’s badly needed today.

But, I thought it might also be worth writing from the opposite perspective and asking how bad it might really/plausibly get over the next handful of years.  Most of us know much of this already, so you might wonder what the point of such a morose exercise would be.  The idea is not to wallow.  To the contrary, the idea is that putting in one place the major pieces of what could go wrong (legally) over the next few years could help as we continue to imagine and build a better future for the labor movement. As Van Jones put it recently, “hope for the best but expect and prepare for the worst.”

Some caveats.  One, and most important, what follows are not predictions, and I do not mean to suggest that these things are likely.  Instead, these are thoughts about the kinds of negative developments that seem within the realm of the possible (even though, with respect to every one, I think the better arguments are on the other side). Two, given the limits of my expertise, I focus exclusively on how bad labor law could get, leaving to others the question of how bad things could get on other fronts.  Three, I may be wrong in two directions: omitting other possible problems and including things that aren’t plausible.  For that reason, we invite follow-on posts that offer either kind of corrective. Four, and finally, it might be worth saying that this exercise goes against my own nature, which, for better or worse, skews optimistic (as I’ve been critiqued for being).

All that said, here’s what seems within the realm of the plausible: Continue reading

Pensions v 401(k)s: An Illinois Case Study

Illinois’ pension liability is estimated to stand at more than $130 billion.  The reason behind Illinois’ ever-growing pension liability is one of debate.  Some attribute the deficit to legislators voting on pension bills they didn’t fully understand.  Others argue that politicians chose to kick the pension ball down the road to avoid raising taxes or cutting spending on their watch.  Still others, like Illinois Governor Bruce Rauner, argue the structure of the pension system itself is to blame: employees change jobs as a way to qualify for more than one pension and many seek raises in their final years as that guarantees them higher payouts during retirement

While there is much debate about the cause of the deficit, its existence is certain.  Despite being in the top 1/3 of the nation’s wealthiest states, Illinois has one of the most poorly funded retirement systems in the country.  Illinois has only funded 39 cents for every dollar it has promised to pay out in pensions. The pensions of similarly populated states like New York and Pennsylvania are far better funded, with New York at 89 percent and Pennsylvania at 62 percent, respectively.  It is clear that Illinois needs to rethink its current pension scheme.  Some groups like Illinois Policy, a conservative think tank, advocate for Illinois to adopt 401(k)s for new government workers, but the idea has not received much traction among state employees.  While the traditional debate has been between keeping traditional defined benefit plans like pensions or moving to a defined- contribution plan like a 401(k), there is a lesser explored option as well: the hybrid 401(k)-pension plan.  The hybrid plan combines the guaranteed income of a pension while lowering employer contributions with a 401(k).

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Today’s News & Commentary — May 26, 2017

Maryland’s governor vetoed a paid sick leave bill yesterday, saying the measure would be  “disastrous to our state’s economy.”  The bill would have required employers with over 15 workers to provide at least five days of paid sick leave.  The bill, which garnered enough votes to overcome a veto, may be overridden in the 2018 legislative session.  Governor Larry Hogan had supported an alternative bill, which would have covered companies of 50 employees or larger.

Tesla announced a new VP of HR earlier this week, on the heels of a new report about unsafe working conditions at the sustainable car company’s Fremont, California factory.  As Buzzfeed News reports, Tesla has recently dealt with revelations about hazardous working conditionsracial and sexual harassment, and unfair labor practices.  (You can find some of our previous coverage about the UAW organizing efforts that led to the unfair labor practice allegations here.)  This was the third Tesla HR executive to leave this year.

The reports about President Trump’s budget continue.  AP highlights the proposed elimination of the Senior Community Service Employee Program, a 50 year-old program that gives unemployed seniors training and part-time minimum-wage jobs.  The New York Times details myriad proposals with implications for undocumented immigrants.

Boston Review published an essay about the right to strike, along with a dozen responses. Its most recent issue also features a series debating a universal basic income.

Sign of the Times?

Notable that as commentators in the U.S. call for a move from enterprise to sectoral-level bargaining, relying in part on the the French example, France’s new President wants his country to move from sectoral to enterprise-level bargaining.

Today’s News and Commentary — March 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.’”

Workers Need a Bill of Rights

Except for about a month in the summer of 2009 when the Democrats had 60 votes in the Senate, for the entire twenty-first century any proposal to substantially increase workers’ rights at the national level has had to be prefaced by the comment that, “of course, this is not politically feasible now.”  But rather than just spending the next four years fending off misguided Republican legislation, I think it’s time to step back and focus on principles that should guide workplace legislation.  Toward that end, here are some thoughts on a potential workplace bill of rights.

There might be some other rights that should be included in this list, and maybe folks have ideas about better ways to phrase the various rights.  But, I think it would be helpful for the labor movement, worker advocates, and the Democratic party to start talking about this bill of rights in order to refocus our discussion about jobs.  The measure of a good job, whether it is in manufacturing or the service sector, should be whether it provides these rights to workers.  In addition, we should be thinking about what changes we need to see in our laws to ensure that all workers enjoy these basic rights on the job.  Some of these issues can be addressed at the state level, although of  course, that would mean that these rights would exist in only a handful of states.  Here’s my proposed worker bill of rights – let the debate begin.

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