Weekend News & Commentary — June 9 – 10, 2018
Starting tomorrow, no Costco employee will earn below $14 an hour. While some locations already saw a $13.50 an hour minimum wage, the new mark, which nearly doubles the federal minimum of $7.25, signals that the “fight for $15” is edging forward, and the nation’s largest employers are taking it seriously. (Employees at these higher-minimum locations will see a starting wage of $14.50; all hourly employees will receive a $ .25 or $ .50 raise.) As the Wall Street Journal reported, the raised wages will cost the company more than $110 million – a cost offset by the lower corporate tax rate and made more worthwhile by the low unemployment rate and steepening competition for workers. Costco employs about 130,000 hourly workers and is the second largest U.S. retail chain, after Walmart.
The Boston Globe reports that the Massachusetts Legislature has “reached a stalemate” on a $15 an hour state minimum wage, paid family and medical leave, and a sales tax cut. If the lawmakers cannot negotiate a compromise, voters will address all three issues in November. Raise Up Massachusetts, a “grassroots coalition of community organizations, religious groups, and labor unions,” is leading the fight for $15, up from the current $11, while the Retailers Association of Massachusetts charges that the harm to employers should be mitigated by a sales tax cut.
In Bozeman, Montana, a member of the City Commission has proposed a $15 an hour minimum wage for city employers. Bozeman would follow Missoula if it advocated such a raise, and would help to attract and retain workers in a competitive economy as the city’s cost of living rises. Critics and skeptics doubt that the raise would affect many employers, who already see wages near or at that level, if not significantly higher.
Many workers do not take their promised wages home, according to a new study from the Corporate Research Project of Good Jobs First and Jobs with Justice Education Fund. The report’s lead author, Philip Mattera, sees wage theft not just as an anomaly but as, reprehensibly, the way business is done in corporate America. The persistence and prevalence of theft have outraged worker advocates and particularly alarmed Californians. While the state is home to some of the worst offenders, the Orange County Register explains that its stronger labor code may mean more offenses.
Meanwhile, in Massachusetts, a construction business owner who pleaded guilty to more than one hundred wage-and-hour-related charges has been sentenced to pay $91,743 in restitution. The defendant also received three years’ probation and will be barred from bidding on public works for five years.
McDonald’s aims to “modernize its business” by taking some humans out of it, the company announced last week. The company is significantly expanding self-service ordering kiosks and will introduce mobile ordering and possibly delivery. To adjust to changes in customer behavior for food purchasing, the company is looking to “add more choice and variety,” CEO Steve Easterbrook told CNBC, and to “build a better McDonald’s.” While many commentators have framed automation as an indictment on higher minimum wages – kiosks don’t get paychecks, Fast Company highlighted – “free marketeer” Christian Britschgi argues that “the main draw of these devices is not savings on labor costs” – a position supported by McDonald’s, which is also experimenting with new modes of customer engagement, like table service. Easterbrook has touted the fact that customers tend to order more food from a touchscreen, where they linger and might enjoy the process, than at a crowded and fast-moving counter. McDonald’s has more than 14,000 locations in the U.S., all of which should see self-serving kiosks by 2020.
Late last week the Bureau of Labor Statistics released data that indicated that traditional jobs are not going by the wayside. Despite years of scholarly and policy analysis of the dramatic effects of gig work on the labor market, BLS’s numbers indicate that “[t]he old-fashioned remains king,” as the New York Times summarized on Thursday. The percentage of U.S. workers in an “alternative work arrangement” – including Uber drivers and freelancers in a wide variety of industries – has declined slightly from 2005, from 11 percent to 10 percent. But the BLS’s numbers do not include workers who supplement traditional employment with gig work. Moreover, the study did not include workers who are employed by subcontracting firms. Its late-arrival to the scene, too – the numbers have not been updated since 2005 – might occlude the extent to which the “boom in gig-type jobs” was certainly real for a time, though it is now dissipating in a stronger labor market.
In New York City’s taxi industry, concerns about the gig economy have not been tempered. Michael Goldstein in Forbes has thoroughly described the impact of Uber and Lyft on taxi drivers, whose medallions have dropped in value from one million dollars in 2014 to $170,000 today. Once “a stepping stone to the middle class,” taxi and livery drivers are now facing evictions, foreclosures, bankruptcies, and stress-related illnesses. (Goldstein reports that since the start of 2018, at least five New York drivers have committed suicide, a startling number that correlates with the recent grim news of an uptick in suicides nationally.)
A crackdown on online sale of sex has motivated sex workers to advocate publicly for their professional interests. The New Yorker describes a “large-scale mobilization of sex workers across the country,” bringing marginalized and much maligned workers to the fore of calls for decriminalization, collective action, and trans, queer, and black rights. Emily Witt, author of Future Sex, documents the creative, and, even, at times, jubilant, efforts of activists who are advocating for bodily autonomy and community support funds, and fighting against criminal prosecution as well as feminist and liberal shaming. Since Trump signed HR-1865, the Fight Online Sex Trafficking Act (FOSTA) and the Stop Enabling Sex Trafficking Act (SESTA), websites that have advertised sex have lost protection from liability, and sex workers have lost reliable, safe, and potentially lucrative online platforms.
Minnesota’s “strong presumption” of at-will employment is difficult to overcome, the Eighth Circuit maintained last week in Ayala v. CyberPower Systems, Inc.. Affirming summary judgment dismissal of a suit alleging breach of contract, fraud, and unpaid wages, the court held that a multiyear compensation scheme, designed to remain in place until a specific sales target was reached, did not modify an employee’s initial at-will agreement. To modify an agreement, the parties must have “clearly intended” to do so. Twice the written agreement states that the “plan will remain in place until sales reach $150 million USD,” but the text also clarifies that the outlined plan “is not a multiyear commitment or employment contract for either party.” To overcome the strong presumption of at-will employment, “‘the employee must establish clear and unequivocal language by the employer evidencing an intent to provide job security.’” To reach a jury, the contract language must be ambiguous. Judge Beam dissented, alone finding ambiguity in this agreement, which, unlike prior agreements, did not refer expressly to at-will status.
Wisconsin’s Leader-Telegram pays tribute to Milan “Mike” Stone, “probably the most prominent labor leader in Chippewa Valley history,” who died in March at age 90. Stone served as president of the 140,000-strong United Rubber Workers International Union, after growing up on a dairy farm, working in an Eau-Claire tire factory, and serving in World War II. His presidency tenure, from 1981 – 1990, was marked by a call for peaceful settlements at an increasingly “turbulent” time in the tire industry and in labor. Friends and former union brothers honored Stone’s life wistfully, finding in his passing the symbolic “loss of an idea” of strength in collective action.