Today's News and Commentary — June 24
Yesterday, The Chicago Tribune covered Sen. Dick Durbin’s announcement of the “Patriot Employer Tax Credit Act”, a bill that aims to rewards with carrots in the form of tax credits those companies that pay workers fair wages and provide good benefits, and gives the stick to corporations that take jobs out of the country, by closing tax loopholes. The bill, while unlikely to pass in the Republican-controlled House, is politically important in Durbin’s home state of Illinois, where two major employers, Walgreen Co. and AbbiVie Inc. “are said to be considering moving their headquarters overseas.” Durbin’s bill would precondition tax credits on companies maintaining their headquarters in the U.S. or require that they increasing the number of U.S. workers over the number of workers overseas.
The Chicago Tribune reports that thousands of employees of Gap Inc. will receive a little more in their envelope this week, as the company’s pledge to increase its minimum wage to $9 goes into effect. By June 2015, the company has promised a minimum wage increase of $10 an hour for all its workers across Gap, Banana Republic, Piperlime, Athleta and Intermix. Of the increase, the company has said that internal analysis indicates that the wage hike “can strengthen our ability to attract and retain a skilled, enthusiastic and engaged workforce.” President Obama, who has called for a raise in the federal minimum wage from $7.25 to $10.10, has praised the company’s increase.
The LA Times Editorial Board applauds the State Department’s decision to demote Thailand to the lowest tier of its Trafficking in Persons report. The demotion follows the uncovering of a high-seas slavery system, covered extensively by The Guardian earlier this month. Human traffickers draw workers from poor Southeast Asian countries with the promise of employment, and then sell these men and women to ships that “trawl” international waters for fish. This fish is later ground into fishmeal and sold to prawn farms, whose products end up on dinner tables in the UK and US. Government oversight and intervention could make a difference, but is unlikely to emanate from Thailand alone, where there is currently rampant and multi-tiered collusion in this slave trade, lax enforcement of labor laws, and the rumors of a military crack down on migrants that is resulting in the exodus of tens of thousands and causing a labor shortage. As a result, the Times argues, international action is necessary, and this action by the State Department could signal a move towards more international involvement.
Reuters reports Japan’s Prime Minister Abe has been met with strong opposition domestically for his labor market deregulation plans. Foreign investors are pushing for more flexibility in hiring, firing, and pay. Japan has robust pro-workers laws, with strict rules on firing and wage laws that allow almost all workers to claim overtime if they work more than eight hours a day or 40 hours a week. “Labor unions say the rules prevent abuses and “Karoshi”, the coined-in-Japan term for death by overwork.” In response to political pressure, Trade ministry officials have narrowed their advisory opinion, recommending an overtime pay exemption only for those who earn more than $100,000 in year, the threshold taken from precedent in the United States. Foreign investors like GE and IBM continue to call for wider reaching reform of Japan’s labor laws, and Japanese labor unions are “girded for a fight”.