Today’s News & Commentary — May 4, 2017

The New York Times reports that Apple plans to create a $1 billion fund for the advancement of manufacturing jobs in the United States. In an interview with CNBC, Apple’s chief executive Timothy D. Cook noted, “Those manufacturing jobs create more jobs around them because you have a service industry that builds up around them.” The company hopes to announce its first investment from the new fund sometime this month.

The House Rules Committee will meet this week to discuss an amendment to the FLSA. The Working Families Flexibility Act is a Republican-sponsored bill that would create the option for employers to offer one-and-a-half hours of paid time off in lieu of one hour’s worth of time-and-a-half overtime wages. The bill recommends capping the paid time off hours available at 160. A blog post notes that the House Education and Workforce Committee approved the bill last week.

The Circuit Court for the District of Columbia reversed an NLRB decision last week in the case of Bellagio LLC v. National Labor Relations Board, finding that the Bellagio Hotel and Casino did not interfere with a bellhop’s “Weingarten rights” under the NLRA. Weingarten rights assert that employees have the right under the NLRA to have union representation during any investigatory interviews. This right must be affirmatively requested by the employee, after which an employer may (1) grant the request, (2) end the interview, or (3) offer the employee the option between holding an interview without representation or not having an interview.

Following a complaint from a hotel guest about the bellhop, Bellagio management attempted to interview the bellhop, Gabor Garner, who requested union representation. Bellagio suggest Garner contact a union representative on his own, but he refused. The hotel then attempted to find a representative, but was unsuccessful. Upon returning to the interview room where Garner was waiting, management asked Garner if he would like to make a written statement instead, which he also refused. Management then ceased the interview and placed Garner on paid suspension pending investigation until Garner returned the following day with his union representative to conduct the interview. Continue reading

The Current State of Overtime

The New Rule

In May 2016, the Department of Labor, under the direction of President Obama, issued a final rule updating the overtime provisions of the Fair Labor Standards Act.  The Department raised the minimum annual salary for employees exempt from overtime pay from $23,660 to $47,476.  The Department set December 1, 2016 as the effective date for the new rule, implementation of which would have affected over 4 million employees.

Underlying the new overtime rule is the desire to protect workers from being over-worked and under-paid.  As the United Food and Commercial Workers union stated in 2015, the previous threshold of $23,660 is below the poverty line, and reflects only one salary threshold increase since 1975.  As long as employers could classify their workers as “managers,” they could avoid paying them overtime.  The new rule would have required employers to either raise the salaries of low-level managers to meet the $47,476 threshold, or reclassify them as hourly employees entitled to overtime pay.  It was intended to encourage employers to spread employment, and hire multiple workers to perform a job rather than forcing a single worker to work 70 hours a week.  Critics argue the rule would hurt small businesses and reduce jobs.

As many employers were making changes to come into compliance with the new rule by the approaching December 1 deadline, a federal judge in Texas ordered a preliminary injunction barring nationwide enforcement of the rule.  A number of private business groups and 21 states had challenged the rule as an overreach of executive power.  The district judge agreed, claiming Congress, not the Department of Labor, should be responsible for making changes to the minimum salary requirement.

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Today’s News & Commentary — December 26, 2016

USA Today has a survey of what will happen to worker pay and benefits in 2017. The short version: States may continue to raise minimum wages, and there’s a small chance the federal minimum wage will rise to $10 an hour. Regarding overtime pay, a federal judge’s potential overturning of the Obama Administration’s mandate may have a dampened effect: “Many businesses already have increased managers’ salaries to the $47,476 threshold to avoid paying overtime or converted salaried staffers to hourly employees so their hours can be tracked for overtime.” The article goes on to predict the future of the joint employer rule, paid family and sick leave, and subsidized child care.

CNBC explores this “staying power” of the overtime rule in some more detail. Despite the lawsuit, the article notes, the rule’s effects were already underway. Compensation information and research company PayScale analyzed over 500 jobs that offered salaries between the new and old thresholds and “found that the number making in between those two numbers dropped sharply over the past two quarters.” Furthermore, 40 percent of the corporate clients of Salary.com, a compensation and software analytics firm, had made raises over the threshold or had reclassified workers.

For those of you into “very wonkish” economics, Paul Krugman at the New York Times has an analysis of trade deficits’ effects on manufacturing jobs. For those of us who are not, his bottom line: “yes, trade deficits reduce manufacturing production and jobs. They played a significant although far from dominant role in manufacturing job losses after 2000.”

Weekend News & Commentary — Nov. 26-27, 2016

In the wake of the recent election, unions — which spent over $100 million campaigning against Donald Trump — now have some tough questions to face.  Republicans are eager to build momentum on right-to-work legislation (a conservative Supreme Court pick will no doubt help), and President-elect Trump is expected to roll back much of the Obama administration’s labor-related reforms — including the Department of Labor’s overtime rule, which a federal court blocked earlier this week with a nationwide injunction (read more here).  Steven Greenhouse, writing for The New York Times, speculates that with a White House that is more hostile to labor, unions will have to focus on local battles (for example, state minimum-wage referendums) while workers experiment with new methods of organizing (taking their cue, perhaps, from the Fight for 15 movement).

Meanwhile, President-elect Trump has not forgotten his campaign promises to keep American jobs from moving overseas.  Over Thanksgiving he reached out to air conditioner manufacturer Carrier, which plans on shuttering two factories in Indiana and moving over 2,000 jobs to Mexico.  “I am working hard, even on Thanksgiving, trying to get Carrier . . . to stay in the U.S.,” Trump tweeted (“MAKING PROGRESS,” he added).  If negotiations succeed, it’ll be a big political win for the President-elect.  Read more here.

Local governments are stepping up efforts to give part-time workers more predictable, more remunerative schedules.  Seattle, New York City, and other cities are considering “fair scheduling” legislation that will provide workers with more notice of their schedules, The Wall Street Journal reports.

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Picking the New Secretary of Labor: A Backgrounder on Andrew Puzder

 
President-elect Donald Trump met this weekend with Andrew Puzder, one of his rumored candidates for Secretary of Labor.  Like Trump, Puzder is a Washington outsider: he’s the longtime CEO of CKE Restaurants, the company that owns fast-food chains Hardee’s and Carl’s, Jr.  Puzder has been one of Trump’s staunchest supporters — advising him and fundraising for him on the campaign trail — as well as an outspoken critic of the Obama administration.  On his personal blog and elsewhere, Puzder has made no secret of his pro-business stance on labor issues.  Here’s what we know.
 
Minimum Wage
 
As The Atlantic reports, Puzder has voiced strong opposition to a higher minimum wage.  He has argued (more than once) that raising the minimum wage and mandating benefits (like paid leave and health insurance) will end up hurting workers, predicting that businesses will respond to higher labor costs with “price increases, more efficient labor management, and automation.”  (He himself has decided to invest in automation at Carl’s, Jr. restaurants, replacing workers with machines because “[machines] never take a vacation, they never show up late, there’s never a slip-and-fall, or an age, sex, or race discrimination case.”)  
 
Benefits
 
Puzder has also taken aim at government benefits.  His proposed solution to sluggish job growth is “more work, less welfare” — according to him, programs like SNAP and Medicaid have distorted incentives, creating a “welfare cliff” that discourages low-income workers from working more for fear of losing their benefits.
 
Puzder has also complained about Obamacare’s impact on the economy, claiming that Americans are spending less because of higher health insurance premiums.

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Would Earlier Implementation of the New Overtime Rule Have Changed the Election Outcome?

Since the Presidential election was so close, it’s very tempting to engage in thought experiments about how different actions might have changed the outcome.  And for all of Hillary Clinton’s flaws as a candidate, exit polls suggest that the election can be viewed as a referendum on the Obama Administration.  For instance, 63% of the electorate said that the condition of the national economy was either “not good,” or “poor,” and Trump carried this group by a 63% to 31% margin.  In addition, only 31% of voters said that their financial situation was better now than it was four years ago.

While the economy has improved significantly since the devastation caused by the 2008 financial crisis, many workers still have not caught up to where they were before the financial crisis.  And for workers struggling to make ends meet in a small town in Florida, Michigan, Pennsylvania, or Wisconsin, it can be hard to see the ways in which President Obama has improved their lives.  It may well be that they are benefitting from the Affordable Care Act, but if they had insurance before the ACA passed, they may feel that the law has not done enough to contain costs, and they may not notice some of the benefits the law given them. As I have thought about the concrete ways that workers stand to lose when Donald Trump replaces President Obama, one thing that has jumped out at me is the new Department of Labor overtime rule.  The new rule, which goes into effect on December 1st (unless it is enjoined), will extend overtime protections to 4.2 million workers by raising the salary threshold for overtime eligibility from $23,660 a year to $47,476 a year.  This means that in small towns across America, assistant managers of retail stores, low-level supervisors, and other moderate income workers who are paid on a salary basis will either experience a reduction in hours or a wage increase.  These individuals can no longer be required to work a nine or ten hour day without receiving any extra compensation.

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Weekend News & Commentary — November 12-13, 2016

The postmortem continues, as commentators seek to understand the reasons behind Donald Trump’s win this week.  Writing for The Wall Street Journal, Professor Michael Kazin argues that the decline of unions had an important role, creating an institutional vacuum that left white working-class workers vulnerable to Trump’s brand of populism.  NPR breaks down the numbers, suggesting that the GOP’s huge gains in certain states — especially among uneducated white voters — are a sign of the Democrats’ “cratering with blue-collar white voters.”

Meanwhile, questions abound over what a Trump presidency will mean for workers.  On the campaign trail, President-elect Trump talked tough on trade and promised to keep jobs in the United States.  Now, his supporters are counting on him to keep those promises.  The Christian Science Monitor takes a look at whether Trump can deliver on his promise to coal country to “bring the . . . industry back 100 percent.”  And The New York Times shares the perspective of factory workers in Indiana who — having cast their ballots for Trump — now expect him to stop their plants from moving overseas.

Commentators have also started to speculate over the details of the next President’s labor policies.  Fast Company offers a few predictions, including new restrictions on hiring foreign workers and a potential reshaping of the NLRB.  POLITICO weighs the chances that the Labor Department’s overtime rule, set to take effect this December, will survive the Trump administration unscathed.  JD Supra looks at how the Trump administration could shake up the EEOC, starting with personnel changes and a tighter budget.

And finally, lest we forget another big winner in this week’s election, The National Review discusses the renewed momentum of the right-to-work movement.  Republicans who campaigned on right-to-work platforms in three states — Kentucky, Missouri, and New Hampshire — could now be in a position to pass legislation making union dues optional.  Moreover, now that the GOP will be filling the vacant seat on the Supreme Court, the 4-4 split in Friedrichs could also tilt in their favor, extending right-to-work to government employees nationwide.