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—May 11, 2017

The New York Times reports that Canada’s technology sector may benefit from the Trump Administration’s efforts to restrict immigration and immigration’s increased centrality in the American political debate.  After the travel ban was announced, Canada received an increase in temporary and student visa requests.  While not enough time has elapsed to determine whether the “Trump effect” has staying power, early signs indicate that fields, such as artificial intelligence, will benefit by attracting foreign workers.  The Atlantic suggests Canada is well-positioned to capitalize on these developments.  The country has publicly welcomed immigrants and invested in its technology sector.  Read more here.

Uber is piloting a personal injury insurance program for drivers in eight states.  The insurance program will be funded by a mix of increased fares for customers and a fee for drivers who opt-in.   Customers will pay five cents more a mile in these states, and drivers will contribute 3.75 cents per mile.  Maximum benefits will equal $1 million for medical expenses, $150,000 in survivor benefits, and wage replacement of fifty percent of a driver’s weekly earnings.  However, Uber has not escaped criticism by instituting this program.  Commenting on this development, Rebecca Smith, the deputy director of the National Employment Law Project, objected to the optional nature of the program and stated that “[i]f Uber valued its workers, it would simply pay its workers’ compensation premiums and cover all of them.”

In other gig economy news, the New Yorker published a piece on liberals embrace of the gig economy.  Nathan Heller details the connections between Democratic political operatives and companies, such as Airbnb and Uber.  While showing that the gig economy is a source of wealth for some, the article highlights evidence suggesting that those who benefit the most from the gig economy are not the same people who benefited from the service industries being disrupted.  Describing the findings of Boston College Sociology Professor Juliet B. Schor, Heller observes,

“[i]nstead of simply driving wealth down, it seemed, the gigging model was helping divert traditional service-worker earnings into more privileged pockets—causing what Schor calls a ‘crowding out’ of people dependent on such work.  That distillation-coil effect, drawing wealth slowly upward, is largely invisible.”

In light of these effects, Heller asks what can be done to make the gig economy viable over the long-term.  Read more here.

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The Department of Justice May Be Reevaluating Its Stance in Class Action Waiver Cases

This post is part of OnLabor’s continuing analysis of National Labor Relations Board v. Murphy Oil USA.

Although opening briefs in the consolidated cases of Murphy Oil, Ernst & Young, and Epic Systems were due on April 28th, last week, the Supreme Court extended the briefing schedule following a request from the Acting Solicitor General.  The due date for opening briefs is now June 9th.  An article from the National Law Review suggests that the Justice Department might be reconsidering its stance in these cases.  Writing to request an extension, the Acting Solicitor General stated, “‘[T]he current briefing schedule is no longer adequate for the government [because] . . . [t]he Acting Solicitor General is engaged in a process of reviewing the position of the United States in these cases’ and that he ‘must . . . consult with new leadership within the government.’”

Today’s News & Commentary — April 27, 2017

Politico reports that the Senate will likely vote to confirm President Donald Trump’s nominee for labor secretary, Alexander Acosta, today.  President Trump also appointed current National Labor Relations Board member Philip A.  Miscimarra to serve as chairman of the National Labor Relations Board.  Miscimarra has been serving as acting chairman of the Board beginning in January 23, 2017.  The National Law Review suggests that being named to this position “while largely administrative, may bode well for Miscimarra’s renomination to a new term.”  His term expires in December of 2017.

Yesterday, President Donald Trump assured Mexican President Enrique Peña Nieto and Canadian Prime Minister Justin Trudeau that he would seek to renegotiate NAFTA rather than exit the agreement right away.  The White House had indicated earlier on Wednesday that President Trump would sign an executive order officially withdrawing from the trade agreement.  The New York Times suggested the initial White House announcement on withdrawal was “an example of Mr. Trump’s deal-making in real time.”  Under NAFTA Article 2205, the United States must provide six months advanced warning before terminating the trade agreement.  It remains unclear whether President Trump might still sign an executive order initiating withdrawal from the agreement at some point in order to begin the notification process and gain leverage in negotiations.  Read more here.

In other news from the White House, President Donald Trump vowed to appeal an order by Judge William H. Orrick of the Federal District Court for the Northern District of California.  The order temporarily restrains the Administration from withholding federal funds from sanctuary cities.  Although the federal government has yet to flesh-out the definition of a sanctuary city, the term is generally defined as a jurisdiction that does not fully cooperate with efforts by the federal government to enforce its immigration policy.  Read more about the decision here.


Today’s News & Commentary — April 13, 2017

Yesterday, the Office of Management and Budget (OMB) issued a memorandum calling on the heads of federal agencies to “begin taking immediate actions to achieve near-term workforce reductions.”  This memorandum replaces the federal hiring freeze President Trump put in place after taking office.  The document set a deadline of September 30, 2017 for the agencies to deliver plans to the White House describing how they will reduce staff and accommodate long-term budget cuts in accordance with President Trump’s “skinny budget.”  Mick Mulvaney, the director of OMB, described the move as “a big part of draining the swamp,” which was a “centerpiece of [President Trump’s] campaign.”  Although most administrative agencies face cuts, Mulvaney singled out Defense and Veterans Affairs to increase staffing.

Politico reports that Democratic leaders in the House and Senate are working to create an affirmative economic agenda drawing on the populist ideas of Bernie Sanders.  Senate Minority Leader Chuck Schumer and House Minority Leader Nancy Pelosi have had two meetings to discuss the project, and their staffs have met many times.  Democrats have not been in a hurry to roll out their revamped economic platform.  Many in the party are inclined to try and capitalize on the disagreement among Republicans over health care and on the controversy over President Trump’s connections to Russia.  Furthermore, Democrats have already released a major infrastructure plan and a proposal on paid family leave, which has decreased the sense that they need to rush to put forth new policy proposals.

It has been a busy week for the Writers Guild of America, East.  The New York Times reports that a majority of journalists at Gothamist and DNAinfo indicated their support for the union.  These workers join the growing number of writers and editors organizing at online media companies.  DNAinfo acquired Gothamist last month and laid-off a number of writers.  The merger has raised questions about the future of the merged media companies.  One reporter involved in the organizing effort, Katie Honan, explained that “the reason we want to unionize is to have a voice in these decisions.”  Yesterday, the reality television writers represented by the Writers Guild of America, East staged a walkout in their attempt to obtain a separate contract from scripted television writers, who restarted negotiations with studios for a new contract on Monday.  The union reported that at least 100 employees participated in the walkout.  Read more here.

Today’s News and Commentary — March 30, 2017

The New York Times reports that Ivanka Trump, daughter of President Trump, “is becoming an official government employee.”  She will serve as an unpaid adviser with the title of assistant to the president.  This move appears to have been spurred by criticism from ethics experts, including former White House ethics lawyers, Norman L. Eisen and Richard W. Painter, who served in the Barack Obama and George W. Bush administrations, respectively.  In a letter to the White House counsel, the two ethics experts suggested that “[Ivanka Trump’s informal advising] arrangement appears designed to allow Ms. Trump to avoid the ethics, conflict-of-interest and other rules that apply to White House employees.”  In a statement released yesterday, Ms. Trump said, “I have heard the concerns some have with my advising the president in my personal capacity while voluntarily complying with all ethics rules, and I will instead serve as an unpaid employee in the White House Office, subject to all of the same rules as other federal employees.”  Ms. Trump’s issue portfolio appears to include maternity leave and affordable child care, two issues she supported during the campaign.

This week President Trump called for review of President Obama’s Clean Power Plan.  The controversial Clean Power Plan established carbon pollution standards and requires the states to create and enact plans to reach these emission targets.  At the ceremony where President Trump signed this executive order, Trump told miners present that this executive action means they are “going back to work.”  Trump’s statements have come under attack because they “den[y] economic realities.”  The demand for coal has slowed because of the availability of less expensive and cleaner burning natural gas and increasingly affordable alternative energy sources.  Automation of coal jobs has also lead to decreased employment in the industry.  These market conditions suggest that even if Trump is successful in rolling back the Clean Power Plan, the coal jobs that President Trump has promised to revive will not be returning to historic highs.  Read more about the impact of the Clean Power Plan on jobs from OnLabor here.

In international news, the New York Times published a piece highlighting legislation in Iceland that would require employers to show that they are paying men and women equally.  Despite having equal pay laws on the books for the past fifty years, government figures suggest that Icelandic women earn 14 percent to 20 percent less than men.  Although Icelandic companies have embraced voluntary measures to decrease the gender wage gap, they have been resistant to mandatory measures.  The legislation would require the country’s largest companies and government agencies to be audited beginning in 2018 and receive certificates of compliance with pay parity rules from auditors.  Businesses with more than 25 employees would have until 2022 to conform to the law’s requirements.  Read more here.

Today’s News & Commentary — March 16, 2017

Federal judges in Hawaii and Maryland dealt a blow to President Trump’s revised travel ban yesterday.  In Honolulu, U.S. District Court Judge Derrick K. Watson granted a nationwide temporary restraining order preventing the Trump Administration’s executive order from taking effect.  Hours later, U.S. District Court Judge Theodore D. Chuang in Maryland issued an order preventing the key provision, which would have stopped the U.S. from issuing visas from six countries for 90 days, from being implemented.  Read more here.

The Federal Reserve raised the benchmark interest rate yesterday for the third time following the financial crisis.  It opted to raise the benchmark by a quarter of a percentage point and continues to predict two additional rate increases this year.  In a press conference regarding the decision, Janet Yellen, chairwoman of the Federal Reserve, showed confidence in the economy stating “[w]e’re closing in, I think, on our employment objective; we’re coming closer on our inflation objective. … It looks to us to be appropriate to gradually raise the federal funds rate to neutral.”   A historical examination of the Federal Reserve’s involvement in rate increases can be found here.

Yesterday, the Senate voted 51-48 to repeal an Obama Administration regulation restricting the sectors in which states could require a drug test for unemployment benefits.  President Trump is expected to sign the repeal into law.  Because the regulation was repealed under the special procedures outlined in the Congressional Review Act, Congress only requires majorities in both chambers to undo recently finalized regulations.  This regulation is the eighth Obama regulation to be repealed under the Congressional Review Act.

At the New Yorker, Jonathan Blitzer suggests that the case of Daniel Ramirez, a recipient of the Deferred Action for Childhood Arrivals (DACA) program, demonstrates how the Trump Administration could undermine the program without formally abolishing it.  Ramirez and his legal team have alleged that Ramirez’s due process rights were violated when he was arrested.  The government has responded that DACA status can be revoked at any time if a DACA beneficiary is convicted of a crime or considered to be a threat to public safety.  Ramirez has not been convicted of a crime, and he and his legal team maintain that the government has no evidence that he is a threat to public safety.  The article questions whether DACA’s protections and the emphasis on high-priority immigration enforcement will prove illusory in the face of such broad discretion delegated to immigration enforcement officials.  Blitzer states that “[w]hile the Trump Administration may preserve DACA on paper, honoring the policy in practice would require being clear about who is and isn’t a priority for detention by immigration agents.”