Today’s News & Commentary — July 12, 2019


Published July 12th, 2019 - 07.12.197


Yesterday, the American Federation of Teachers filed a lawsuit against the Department of Education over the public service loan forgiveness (PSLF) program.  The lawsuit alleges that PSLF is so dysfunctional that it violates federal law and the Fifth Amendment right to due process.  The program is supposed to forgive the remainder of federal student debt loan for graduates who work for 10 years in a qualifying public service job (this includes teachers, nurses, firefighters, and police)—but only 1 percent of people who think they’ve made their payments and apply for loan forgiveness are getting approved.  “The promise is broken, virtually all the time,” said AFT President Randi Weingarten to NPR.  “This is a debacle.”  The complaint states that the Department of Education “knows of—but completely disregards—repeated misrepresentations made by [loan] servicers to borrowers who are attempting to qualify for PSLF . . . resulting in unwarranted denials of loan forgiveness.”

Amazon announced that it plans to spend $700 million to retrain 100,000 workers—one third of its U.S. workforce—in the face of increasing automation and technological advances.  Ardine Williams, Amazon’s vice president of people operations, told The New York Times, “When automation comes in, it changes the nature of work but there are still pieces of work that will be done by people . . . You have the opportunity to up-skill that population so they can, for example, work with the robots.”  Amazon is calling the plan “Upskilling 2025,” and the hope is that it will allow workers to transfer into more advanced positions within or outside the company—for example, warehouse workers could be trained for technical roles.  Broadly, machines are expected to displace about 20 million manufacturing jobs over the next decade, and automation already plays a central role in Amazon warehouses.  Amazon has also faced criticism and come under scrutiny for its treatment of workers: as Ryan discussed earlier this week, workers at an Amazon warehouse in Minnesota are planning a 6 hour work stoppage on July 15 to draw attention to the company’s harsh working conditions and lack of advancement opportunities. 

AB-5, the California bill codifying and expanding the 2018 Dynamex decision, was passed by the State Senate’s Labor, Public Employment and Retirement Committee, 4-1, at a hearing on Wednesday.  The bill would make it more difficult for employers to claim that workers are independent contractors and seeks to end misclassification of workers.  Missclassification allows employers to sidestep laws about compensation, overtime, and benefits. The bill passed the California Assembly earlier this summer

Finally, the Wall Street Journal describes this summer as a “nightmare” for American Airlines, as its cancellations have skyrocketed in part due to a contract feud with its mechanics union.  This June, American canceled 4% of its schedule, or over 7,500 domestic and international flights—a cancellation rate 18 times Delta’s.  The airline has been negotiating with the International Association of Machinists and Aerospace Workers and Transport Workers Union since December 2015, but talks have stalled.  Yesterday, a federal judge granted American’s motion to modify a temporary restraining order to put in place stricter compliance conditions for mechanics, essentially threatening them with fines if they carry out what American claims is an “illegal work slowdown.”  The Wall Street Journal piece notes that when Judge John McBryde ordered American’s lawyers to meet in person with the mechanics union, American’s top lawyers didn’t show up—because their flights were canceled.

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