News & Commentary

March 26, 2014

A labor dispute between a state regulator, a shipping association, and the longshoremen’s union in New York Harbor has escalated to federal court, the Wall Street Journal reports. On one side of the fight is the Waterfront Commission of New York Harbor, which was formed in 1953 to root out mob influence and is responsible for overseeing the waterfront industry’s hiring plan, which mandates that 51% of employees be returning military veterans. On the other side are the New York Shipping Association and the International Longshoremen’s Association, which have sued in New Jersey district court alleging that the commission is slowing the pace of hiring so dramatically that there is a shortage of up to 800 workers at the port, driving up costs and leading some firms to move business elsewhere. For its part, the commission blames the waterfront industry for lagging behind on “sponsorship forms” for prospective employees while mostly training their own referrals instead of relying on veterans.

On the Washington Post‘s Wonkblog, Emily Badger reports that the federal minimum wage has not only failed to keep pace with inflation, but in many cities it has also failed to keep up with rent. Citing a new report from the National Low Income Housing Coalition, Badger notes that a Washington D.C. worker would need a $28.25-per-hour wage to support a modest 2-bedroom apartment; alternatively, the worker could work 137 hours per week on the current $8.25 minimum wage in D.C. USA Today has a chart of how many minimum-wage hours workers in each state would need to afford a similar 2-bedroom apartment; the numbers range from lows in Montana (69), Ohio (70), and Kentucky (70) to highs in California (130), D.C. (137), Maryland (138), and Hawaii (174). The L.A. Times reports that the single most-expensive market is the San Francisco Bay Area, where a worker would need a $37.62-per-hour wage to afford a two-bedroom apartment. Meanwhile, the Wall Street Journal reports that Connecticut’s Democratic-controlled legislature is expected to raise the state’s minimum wage to $10.10 per hour, which would give the state the highest minimum wage in the United States.

Congressional Democrats plan to propose and advance a series of bills affecting “pocketbook” issues in the next few weeks — such as a bill to increase the minimum wage to $10.10 per hour and another bill to boost federal-worker pay by 3.3 percent next year — the New York Times and Washington Post report. The Times suggests that the planned votes are part of a plan to reverse the Republican momentum that threatens their control of the Senate, as the votes will be timed to coincide with campaign-style trips by President Obama. The Times also notes that the proposals have little chance of passing, but Democrats simply want to force Republican lawmakers to vote against them. In the Wall Street Journal, Andy Puzder, CEO of CKE Restaurants, criticizes a related proposal: President Obama’s recent order directing the Labor Department to expand the class of employees entitled to overtime pay. Puzder argues that any increased overtime wages for managers “has to come from somewhere, most likely from reduced hours, reduced salaries or reduced bonuses” — all of which will hurt the very managers President Obama intends to help.

In sports news, the Washington Post reports that the Los Angeles Dodgers have ended the New York Yankees’ 15-year streak atop the highest payrolls in baseball: the Dodgers project to pay $235 million, far surpassing the Yankees’ second-place $203 million and Houston’s last-place $45 million. In a stark three paragraphs, the article contrasts the average U.S. wage of $42,498 against the rise in opening-day average salaries for professional baseball players — $3.65 million, up from $1.07 million when Derek Jeter first reached the major leagues in 1995. When the Yankees began their streak in 1998, their opening-day payroll of $85,054,360 barely eclipsed the Dodgers’ second-place $79 million (relatively speaking).

Internationally, the German labor union Verdi has called on public sector workers at Germany’s major airports to take part in a strike over a wage dispute, the Wall Street Journal reports. The strike, over a demand for a 3.5% wage hike, will affect airports in Frankfurt, Munich, Hamburg, and four other cities.

In its upcoming Sunday issue, the New York Times offers a brief profile of worker-owned cooperatives: a reemerging business structure in which workers own the business and decide what to do with the profits. The Times notes that while worker co-ops are an effective and politically palatable means of addressing the root cause of economic disparity — by distributing a relatively greater share of profits to workers than investors — this advantage makes it difficult for them to attract investments or loans.




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