Today's News and Commentary – October 1

Published October 1st, 2013 -  - 10.01.132


The Washington Post reports that the federal government shut down early this morning due to an impasse in Congress over the budget. The New York Times explains which federal employees continue to work and which employees must stay home. The Times reports on one likely casualty of the shutdown in particular: the scheduled Friday release of data for unemployment and job creation in September. The Post also reports that Gregory Junemann, President of International Federation of Professional & Technical Engineers (IFPTE), which represents some federal workers, is calling on all federal employees to “take to the streets” to protest the leadership in the U.S. House of Representatives for failing to prevent the shutdown.

In light of today’s launch of the health insurance marketplaces under Obamacare, Charles Lane of the Washington Post argues that Republican opposition to the law misses the fact that it has the potential to undermine collective bargaining, since workers will no longer need to rely on their unions to negotiate access to attractive health coverage.

Daniel Alpert argues in the New York Times that these headlines are distractions from “the real problems afflicting our economy” – an oversupply of global labor, productive capacity, and capital – which have prevented the world from fully recovering from the economic crisis. He emphasizes that “[h]undreds of millions of people who once lived in sleepy or sclerotic statist and socialist economies now compete directly or indirectly with workers in the United States, Europe and Japan, in a world bound by lightning-fast communications and transportation.”

Edward Lazear argues in the Wall Street Journal that the reason the Federal Reserve did not scale back its extraordinary measures to boost the economy earlier this month despite the falling unemployment rate is because the employment rate—the proportion of the working-age population that has jobs—has made little progress.  He agues that the employment rate is the best single indicator of labor-market health, and notes that it is still hovering at around 58.5 percent, down significantly from its pre-recession levels of over 63 percent.

Meanwhile, in the U.K., the New York Times reports that the long-term unemployed could be forced to do community work to keep their unemployment payments under a plan announced yesterday by Britain’s top economics minister, George Osborne—the latest in a series of moves to tighten benefits rules and crack down on “welfare dependency.”

In another European labor law development, the New York Times reports that France’s Socialist prime minister suggested yesterday that, due to weak economic growth and high unemployment, the government is prepared to discuss changes to rules that more than a century ago established Sunday as a mandatory day of rest for most workers. These rules have long been championed by powerful French unions, which have traditionally been major supporters of Socialist politicians. A former government official is scheduled to propose a list of changes by late November.

Finally, as the holidays approach, the Wall Street Journal reports that UPS is caught in a rift between the leadership of the Teamsters union and some of its rank-and-file members over labor contracts. The domestic package-delivery employees, who are a majority of the company’s U.S. workers, approved a new five-year national master contract in June that included wage increases as well as revised health and pension benefits, but UPS is still negotiating separately with many local bargaining units across the country—including Teamsters that work at the UPS hub in Louisville, KY and employees in the company’s freight division—over issues like health-care benefits, wages for part-time workers and restricting overtime.

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