News & Commentary

December 16, 2013

Joan Walsh in Salon connects America’s “low-wage work swamp” to the Democratic Party’s persistent failure in recent years to supplement its support of public assistance programs with a robust defense of the labor movement. The U.S. now has the highest percentage of low-wage workers in the developed world. A quarter of people who have jobs in America today make so little money they must rely on some form of public assistance. Walsh argues that starting in the mid 1990’s, Democrat support of welfare programs made it easier for companies to offer low wages, knowing that the worst effects of poverty would be mitigated by public assistance programs. Yet by not prioritizing raising the minimum wage or supporting worker organizing, Democrats have not provided workers with the support they need to lift themselves out of the increasingly stagnant low-wage labor pool. Democrats have thereby contributed to America’s crisis of low-wage work, increasing inequality, and reduced social mobility.

The New York Times reports on efforts to resolve the worsening problem of worker misclassification. Employers have an economic incentive to classify employees as independent contractors to avoid paying certain taxes and providing benefits guaranteed to employees such as worker’s compensation, overtime pay, minimum wage protections, and unemployment insurance. In 2000, a Department of Labor study concluded that up to 30 percent of employers misclassify workers. This year, the Treasury Department’s inspector general concluded that the problem had worsened. Fifteen states have now teamed up with the Department of Labor and the IRS to reduce misclassification through information sharing and joint investigation.

The New York Times also reports on a recent development in a labor dispute between Amazon and employees at its fulfillment centers in Germany. The workers contend that Amazon has misclassified them as logistics workers instead of higher-earning retail employees. They also seek more control over their working conditions, alleging that Amazon treats workers “more as robots than human.” In recent months, the Amazon employees at the fulfillment centers have engaged in a number of wildcat strikes. Today, they take the battle to Amazon’s Seattle headquarters. A rally is scheduled for 10 a.m.

Slate comments on the recent vote by graduate students at NYU to join the United Auto Workers. The University has agreed to recognize the union, such that graduate teaching assistants will now have the power to collectively bargain with the university. The graduate students will not receive the full protection of federal labor laws, however, because of a 2004 ruling by the National Labor Relations Board that graduate teaching assistants are not employees under the National Labor Relations Act—they are more like apprentices “learning their craft.” According to a labor activist interviewed by Slate, the unionization of graduate students at NYU could weaken the power of this 2004 ruling while inspiring a new wave of graduate student organizing around the country.

According to the Wall Street Journal, the productivity of U.S. workers grew at the fastest pace in nearly four years in the third quarter of this year, rising at a 3% annual rate. Despite this increase, unit labor costs fell 1.4%.

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