From the Pew Research Center: 10 facts about American workers

Just in time for labor day.

- Click here for the article.

Curious result: While fewer workers belong to labor unions, support for the right to unionize is high.

The NLRB issues a rule redefining what it means to be an employee

This is a major story that applies to a variety of topics in 2305 - and a few in 2306 as well. It involves a controversy stemming from the actions of a company based in Houston - Browning-Ferris Industries.

Here's the issue put simply: Is Browning-Ferris responsible for the treatment of contracted employees? The decision by the NLRB was yes, but by only a 3-2 vote. This means that all employees of companies contracted by another (like temporary workers), have the same legal rights and protections as those employed by that company.

- Click here for the decision.

- Click here for background from The Hill:

The Obama administration is redefining what it means to be an employer. The National Labor Relations Board (NLRB) on Thursday handed down one of its biggest decisions of President Obama’s tenure, ruling that companies can be held responsible for labor violations committed by their contractors.

While the ruling from the independent agency specifically deals with the waste management firm Browning-Ferris, the so-called “joint employer” decision could have broad repercussions for the business world, particularly for franchise companies. Opponents of the action warn the ruling could hurt businesses as diverse as restaurants, retailers, manufacturers and construction firms, as well as hotels, cleaning services and staffing agencies.

. . . The NLRB ruling is a sharp departure from previous decisions that stated companies were only responsible for employees who were under their direct control. Without the power to set hours, wages or job responsibilities, the earlier rulings held, companies could not be held responsible for the labor practices of the contractors.

But the National Labor Relations Board charted a new course Thursday, saying the old standard is “increasingly out of step with changing economic circumstances.”

One argument made in favor of the decision is that current employment trends suggest more and more people will be temporary workers or contractors in the future. Uber drivers are an example. This decision is meant to guarantee they have the same rights - such as collective bargaining - as regular employees.

For further background:

- NYT: Labor Board Ruling Eases Way for Fast-Food Unions’ Efforts.
- NPR: NLRB Ruling Could Pave The Way For Fast-Food Unions.
- Forbes: Controversial NLRB Ruling Could End Contract Employment As We Know It.

Here's where this story applies to class topics: The National Labor Relations Board was not only created during the New Deal, it was found constitutional in a highly consequential case which redefined "commerce" as including manufacturing and labor. Otherwise the national government has no ability to pass and implement such a law. The NLRB has since been hugely controversial in an ideological sense because conservative business owners tend to oppose its efforts to strengthen workers rights, while liberals support it. The agency is a constant lightning rod and a repeated focus of political dispute. Conservatives - members of the Republican Party - would be happy in getting rid of it - but that has proven tough to do. Instead they've tried to weaken it. They've had better success there.

More on this soon - I think this story might be with us a while.

From the Atlantic Cities: Minimum Wage Was Once Enough To Keep a Family of 3 Out of Poverty

From Emily Badger:

Amid protests across the country over retail and service jobs that pay little better than the minimum wage, it's easy to forget that this income benchmark once meant something slightly different. In the past, a minimum-wage job was actually one that could keep a single parent out of poverty.

Since the 1980s, the federal minimum wage has kept pace with neither inflation, nor the rise of the average worker's paycheck. That means that while a federal minimum wage in 1968 could have lifted a family of three above the poverty line, now it can't even do that for a parent with one child, working full-time, 40 hours a week and 52 weeks a year (yes, this calculation assumes that the parent takes no time off).

From the Atlantic: U.S. Income Inequality: It's Worse Today Than It Was in 1774

3 week students will be looking at the political history of the founding era beginning Monday, this might help tie the paper topic into that subject.

American income inequality may be more severe today than it was way back in 1774 — even if you factor in slavery.

That stat's not actually as crazy (or demoralizing) as it sounds, but it might upend some of the old wisdom about our country's economic heritage. The conclusion comes to us from an newly updated study by professors Peter Lindert of the University of California - Davis and Jeffrey Williamson of Harvard. Scraping together data from an array of historical resources, the duo have written a fascinating exploration of early American incomes, arguing that, on the eve of the Revolutionary War, wealth was distributed more evenly across the 13 colonies than anywhere else in the world that we have record of.

Suffice to say, times have changed.

Fair Labor Standards Act of 1938

The minimum wage was established - along with a variety of other rules related to labor - in the Fair Labor Standards Act, a piece of New Deal legislation passed in 1938.

The proposal . . . adopted an eight-hour day and a forty-hour workweek and allowed workers to earn wage for an extra four hours of overtime as well. According to the act, workers must be paid minimum wage and overtime pay must be one-and-a-half times regular pay. Children under eighteen cannot do certain dangerous jobs, and children under the age of sixteen cannot work during school hours.

If I'm not mistaken, the bill was responsible for creating what we now know as a weekend.

The Kuznets Curve

In a story about rising inequality in the US - and the fact that domestic workers earn far less now than a hundred years back - this author mentions the Kuznets Curve which graphically describes the "natural forces" of economic equality.

The logic of it goes something like this:

. . . agrarian economies started out very poor but not-so-unequal. Then as they started industrializing, inequality would explode. Because rural productivity is extremely low, early industrialists can earn enormous profits paying highly productive factory workers wages that are only barely above the subsistence-level earnings of the farmers. But the very profitability of this sweatshop industrialism ensures that people will build more and more factories. That creates excess demand for industrial labor, and . . . rising wages and falling inequality.

It's Labor Day!

Here are a couple links that provide some background info on the holiday and its relationship to the labor movement in the US which picked up steam in the late 19th century, but has since withered.

- Wikipedia.
- US Labor Department.

The celebration fits into a broader discussion we will have on the evolution of ideology over history - especially that dating back to the French Revolution. The labor movement is part of a series of movements and ideologies - the socialists, progressives and populists among them - that responded to the inequities that emerged as a consequence of the classical liberalism, capitalism and the industrial revolution.

More on these soon enough.

From The Hill: Labor fight one front in GOP war

The Hill describes the strategies congressional Republicans are using to thwart President Obama's ability to both govern and influence the judiciary through appointments. 2305's might fuind these strategies reminiscent of this semester's Ornstein book. It shows how a concentrated disciplined minority can reign in the majority, both involve preventing nominees of executive agencies and the courts from going forward. Their principle focus is on limiting the National Labor Relations Board and the DC Circuit Court.

Just as GOP filibusters have stalled President Obama’s legislative agenda in the Senate, the party is pursuing a parallel strategy of preventing the administration from governing by blocking nominees for boards and agencies.

. . . The NLRB, along with the Consumer Finance Protection Bureau and appellate courts, is a key target for the GOP’s cynical — but successful — strategy of negating the American people’s decision to twice elect a liberal Democrat as president. Republicans are trying to deny him the control he should rightfully have over who should run government agencies.

Destroying the NLRB is only a secondary effort in the overall GOP strategy.

The more audacious move is to choke off the president’s power to put people of his choosing on the federal courts.

There are now 17 appeals court vacancies and Republicans in the Senate have blocked confirmation votes for six nominees.

That strategy is so brassy that Sen. Chuck Grassley (R-Iowa), the top Republican on the Senate Judiciary Committee, has written a bill to cut the number of seats on the D.C. Circuit from 11 to eight. His clear intent is to stop Obama and the Democrats from ever having a majority on the court.

Blocking the second highest court in the nation from properly functioning is a double win for the GOP. Not only do the Republicans keep the White House nominees off the court but they are also halting rulings on the activities of federal agencies. Without court decisions to back them up, the agencies can be blocked at any turn by threats of litigation.

From Wonkblog: The incredible shrinking labor force, in one chart

Here's a positive observation: The U.S. labor force is shrinking. Back in 2007, 66 percent of Americans had a job or were actively seeking work. Today, that number is at 63 percent and falling.

Here's what this looks like by age group:




The labor force is shrinking for the young but increasing for the old. These might be related. Fewer retirees means fewer job openings.

Are corporate profits keeping unemployment high?

A NYT piece from last month points out that corporate profits are soaring while unemployment remains high.

With millions still out of work, companies face little pressure to raise salaries, while productivity gains allow them to increase sales without adding workers.

“So far in this recovery, corporations have captured an unusually high share of the income gains,” said Ethan Harris, co-head of global economics at Bank of America Merrill Lynch. “The U.S. corporate sector is in a lot better health than the overall economy. And until we get a full recovery in the labor market, this will persist.”

The result has been a golden age for corporate profits, especially among multinational giants that are also benefiting from faster growth in emerging economies like China and India.

These factors, along with the Federal Reserve’s efforts to keep interest rates ultralow and encourage investors to put more money into riskier assets, prompted traders to send the Dow past 14,000 to within 75 points of a record high last week.

Here's a graphical description of the shift:




And while sequestration might cost jobs, they will not affect corporate profits.

With $85 billion in automatic cuts taking effect between now and Sept. 30 as part of the so-called federal budget sequestration, some experts warn that economic growth will be reduced by at least half a percentage point. But although experts estimate that sequestration could cost the country about 700,000 jobs, Wall Street does not expect the cuts to substantially reduce corporate profits — or seriously threaten the recent rally in the stock markets.

“It’s minimal,” said Savita Subramanian, head of United States equity and quantitative strategy at Bank of America Merrill Lynch. Over all, the sequester could reduce earnings at the biggest companies by just over 1 percent, she said, adding, “the market wants more austerity.”

A writer in the Atlantic argues these two factors are causally related.

Here are two things that are true about the economy today.
(1) The Dow Jones industrial average is poised to set a new record as corporate profits stretch to all-time highs.
(2) There are still fewer working Americans today than there were before the start of the Great Recession.
The fact that these two things can be true at the same time might outrage you. But it shouldn't surprise you. In the last 30 years, there has been a great divergence between growth and workers' incomes, as the New York Times reminds us today. Corporate profits have soared, in the last decade especially, particularly because of three things: Globalization has pushed down the cost of labor available to multinational corporations; technology has allowed companies to make more with fewer workers, in general; and Big Finance has gobbled up the economy, as the banks' share of total corporate profits has tripled to about one-third since the middle of the last century, according to Evan Soltas.

Republicans Vote to Defund the NLRB

Which would undermine collective bargaining in general.

Are Weak Unions the Reason that So Many Jobs Have Been Lost and Are Slow to Return?

In 2301, we will be discussing Federalist #10 soon enough along with the ongoing conflict between factions in society. Each interest in society, it is assumed, forms a groups - a faction - to fight for its interests. But some are more able to do this effectively than other a case in point recently has been labor unions.

Here's an argument that the decreasing power of labor in the US helps explain why unemployment is higher in the United States than in other countries. Here's a qualifier.

And for good measure, is American Exceptionalism a myth?

Where Does Wealth Come From

This is a very provocative piece. It comments on an important dispute underlying politics in the United States, though it is never stated in this cleanly:

Who Are the Wealth Creators?

Is it labor? Is it the investment class? Is it management? Entrepreneurs? This is a vital question because one's answer will determine which groups one is likely to favor, and which public policy choices they are likely to make.

Happy May Day

A big deal in most other countries, not so much around here. Apparently the day was not a hit with the Puritans, plus there's the connection with the labor movement which makes it a bit too red for many in these parts. Plus there's all that peculiar dancing around poles and stuff.

Still, have a happy one.