Image from Daily Kos
By: Cogan Schneier
The Obama administration threw Donald Trump a regulatory curve ball as he makes his final pitch to working-class voters.
The National Labor Relations Board, the agency charged with enforcing federal labor law, ruled Thursday that the Trump International Hotel in Las Vegas violated the National Labor Relations Act by refusing to bargain with a union that represents more than 500 housekeeping, food and beverage and guest services workers there.
The NLRB's decision orders Trump Ruffin Commercial LLC to recognize and bargain with the workers, who are represented by Nevada's powerful Culinary Workers Union Local 226, an affiliate of UNITE HERE. The NLRB also ordered the company, owned by Trump and casino owner Phillip Ruffin, to post notices to hotel employees about the violation.
"Mr. Trump is breaking federal law and Trump Hotel Las Vegas is operating illegally," said Culinary Union Secretary-Treasurer Geoconda Arguello-Kline. "Mr. Trump should accept the federal government’s order to negotiate and treat his workers with respect.”
Trump’s Las Vegas hotel has been wrangling with the Culinary Workers for two years. Trump Ruffin spent more than half a million dollars last year on an anti-union consulting firm. The workers nonetheless voted to affiliate with the Culinary Workers in December 2015, and the NLRB certified the election in March. Since then, the hotel has refused to bargain with the union.
UNITE HERE and the Culinary Workers have since held rallies and protests at the Vegas hotel, and have picketed at other locations like the Trump National Golf Course in Los Angeles. In September, the union initiated a boycott against all of Trump’s properties, including his new hotel at the Old Post Office Pavilion in the nation's capital. The boycott is backed by the AFL-CIO.
The Las Vegas hotel settled with the union in July over separate allegations of unfair labor practices. Union members said the company fired one union supporter, denied transfer to a full-time job to another, and promised job opportunities to any employees who declined to support the union. The hotel agreed to a settlement of $11,200 in the case.
Trump’s support among union members has been declining. Last week, AFL-CIO internal polling showed it fell from an average 41 percent in June to 33 percent in October in the battleground states of Ohio, Pennsylvania and Florida.
The AFL-CIO and UNITE HERE have endorsed Hillary Clinton.
Read the full article from Politico.
By: Laura J Keller, Dakin Campbell, Kartikay Mehrotra
After Wells Fargo & Co. executive John Sotoodeh handed off more than a hundred branches in Southern California to a colleague in 2009, problems surfaced quickly.
His successor, Kim Young, addressing rumors that some employees were opening bogus accounts, called an introductory meeting with staff and warned she wouldn’t tolerate misconduct. Within a few days, managers recall, sales crumbled across her new turf.
Sotoodeh, who started as a teller in 1990, has since climbed even higher. He’s now one of three regional chiefs running the firm’s nationwide consumer-banking empire. Young spent the final years of her four-decade career at Wells Fargo weeding out bad employees, retiring in 2014.
In interviews, more than a dozen past and current Wells Fargo employees -- many of them senior managers -- chronicled how a generation of executives thrived in its ambitious sales culture, winning accolades and promotions, while being held aloft as examples to colleagues. All the while, people under them were opening legions of unwanted accounts for customers.
As Wells Fargo grew, some stars fanned out from Southern California, described by colleagues and in congressional testimony as a focal point of the rampant misconduct, spreading a culture that lionized boosting sales.
Wells Fargo declined to make managers available for interviews but said in a statement that its leaders are closely examining the abuses and are “intently focused” on restoring customers’ trust. Many of those mentioned in this story, including Sotoodeh, referred questions to company spokesmen. Others declined to comment or didn’t respond to messages.
Company executives already have identified some current managers to be fired, according to a person with knowledge of an internal investigation. The terminations are being delayed so employees can aid inquiries, said the person, who asked not to be named discussing the matter. The person declined to specify who may be poised to lose their jobs.
No one interviewed said they heard senior executives instruct underlings to open bogus accounts, though more than a half-dozen bankers said low-level managers privately coached them to do so. More often, employees said, managers taught underlings to use misleading sales pitches -- such as telling customers a checking account came with a credit card -- or they balked when subordinates raised concerns. At the least, former managers say, many executives failed to stamp out misconduct for years despite ample signs it was flourishing below them as their own careers advanced.
“No one was ever penalized for doing the wrong thing until there was critical mass,” said Michael Bruns, a banker at Wells Fargo branches in Silicon Valley from 2009 to 2012. “Instead, they were promoted. They became our bosses and the people who are running the company today.”
Bruns said he was fired two months after complaining to the bank’s ethics hotline about his colleagues’ sales practices.
In the statement, Wells Fargo said it takes allegations such as Bruns’s seriously and will examine them thoroughly. The San Francisco-based bank has policies prohibiting retaliation for reporting suspected misconduct, and it’s conducting an “an end-to-end review” of the hotline process. The company said Thursday in a quarterly regulatory filing that the Securities and Exchange Commission is among the authorities examining its sales practices.
More broadly, the lender said it’s taking a hard look at what happened.
“The company’s leadership is intently focused on restoring trust in its community bank, making things right with customers and taking actions intended to ensure sales-practices issues do not happen again,” Wells Fargo said. “Actions have included naming a new head of retail banking, eliminating product-sales goals and changing the retail bank’s risk-management processes and protocols for customer-account activity. As we have disclosed, there are multiple investigations under way to address sales-practice issues, including by an independent committee of the board of directors. The integrity of these investigations is not served by commenting on speculation and rumor. The company will take accountability actions, as appropriate, once it has the facts necessary to act.”
The scandal exploded in September with the announcement of $185 million in fines, prompting John Stumpf to step down weeks later as chairman and chief executive officer. Carrie Tolstedt, who oversaw the consumer unit from 2006 until July this year, also left. Together, they’re giving up about $60 million of unvested stock. Neither responded to messages seeking comment.
The bank’s board has publicly promised to investigate how fake accounts proliferated, potentially punishing more executives as warranted.
That’s a monumental task: The firm’s most recent annual report shows the community bank’s three U.S. regional chiefs oversee more than 50 regional presidents. Below them, there are about 120 area presidents, each with their own cluster of branches.
The bank terminated only one member of that army -- an area president -- for improper sales over half a decade while firing more than 5,000 lower-level workers, Stumpf said while testifying to a U.S. Senate panel in September.
One question lawmakers want answered is whether any of those who remain ever directed employees to open accounts without customers’ permission or ignored such misconduct, which authorities have said was widespread. The board’s review is expected to take months, according to a person with knowledge of the process. A board spokesman declined to comment.
“We failed to acknowledge the role leadership played and, as a result, many felt we blamed our team members,” Stumpf’s successor as CEO, Tim Sloan, said in a speech to staff on Oct. 25. “That one still hurts, and I am committed to rectifying it.”
At the heart of Wells Fargo’s sales culture was a metric developed by top brass more than a decade ago, tracking how many financial products and accounts -- now dubbed “solutions” -- branch employees sold daily. Back then, the focus appeared to be different.
Les Biller, chief operating officer from 1998 to 2002, mainly used the figure to set staffing levels, one former senior manager said. If employees fielded more than a certain number of solutions daily, it might signal more tellers were needed at an overworked branch. Biller didn’t respond to messages seeking comment.
Under Tolstedt, 56, sales volume was the ultimate measure of performance, former employees said. Managers urged workers to boost daily sales and persuade each customer to sign up for more Wells Fargo products, a practice known as cross-selling.
Tolstedt ran the division with a style that former colleagues describe as intense and driven, and unrelentingly focused on numbers showing growth. Branch personnel were assigned sales targets that, for years, kept climbing. Their progress was tracked in what some called a “Motivator Report,” which circulated daily to managers. It set the tone for conference calls, in which supervisors pressed people below them to meet quotas.
Stumpf brought them up, too, e-mailing high-performing managers to congratulate them and often citing their figures when stopping by local offices, according to one former manager.
The bank has said it took steps to prevent cheating, such as increasing ethics training and lowering targets to win bonuses. One manager credited Tolstedt for introducing more metrics to track customer service and satisfaction, emphasizing a need for quality.
But for many, the focus on hitting or beating quotas was a monster that underperformers dreaded and the ambitious tried to lasso. Managers who boosted sales typically rose fastest, and some talked incessantly about strategies for doing that, the employees said.
Stories of Southern California bankers opening 42 debit cards in a single day percolated among astonished managers in other areas, one person recalled. Several managers who tried to gauge their progress relative to peers said California and Florida often stood out for their new accounts, though many of them were hardly used.
After some managers alerted their bosses that the numbers seemed suspicious, they said they were told to mind their own results. Some said they then watched their supervisors climb higher, or at least continued to hold senior posts within the division.
Wells Fargo’s three U.S. consumer-banking chiefs report to Tolstedt’s successor, Mary Mack.
Two of them built their careers in California: Lisa Stevens, 46, was promoted to run the state in 2009, and later expanded her territory to cover the Pacific Midwest region, which arcs eastward toward Ohio. She also heads small-business banking. Sotoodeh, 46, oversaw Los Angeles and Orange County before his promotion to lead other Southwest states from Texas.
The third region, the East Coast, was run by another former California chief, Laura Schulte, from 2009 until her retirement in 2014. Tolstedt moved her to Charlotte, North Carolina, just after Wells Fargo bought Wachovia Corp., giving her a key role in integrating the companies. Schulte said in an e-mail to Bloomberg that executives picked her “due to my extensive experience as a transition manager over several years and acquisitions, rather than anything related to sales practices.”
Still, she’s remembered by some staff for an internal sales promotion called “Schulte’s All Stars.” A 2010 copy of the list obtained by Bloomberg ranks managers by a mix of metrics, all gauging volume in different ways. Some were on track to be in the “Schulte Hall of Fame.”
Such lists were “scrubbed carefully so that any one of my winners did not include anyone who was known to be under scrutiny for sales practices,” Schulte said in her e-mail. She said she wasn’t focused primarily on sales numbers, and that she also ran “recognition events” tied to employee satisfaction, turnover, customer service and other measures of quality. Promotions, too, were based on a variety of criteria, she said.
Schulte also brought along a pair of California all-stars. Darryl Harmon became head of Georgia, Alabama, Mississippi and Tennessee, and Shelley Freeman ran Florida.
Freeman, who previously oversaw metropolitan Los Angeles, soon tried to duplicate its sales-centric culture, former employees said. Every Monday, she wrote an e-mail to thousands of Florida personnel to encourage them to sell, sometimes describing the kind of lifestyle they might hope to achieve. She mentioned her Super Bowl tickets and buying an $800 pair of sunglasses at the beach, one former manager recalled. The messages went to tellers making $12 an hour.
Freeman now heads the bank’s consumer credit-card business. She said she couldn’t immediately comment when reached by phone, and later didn’t respond to messages.
Forty-five people who worked in Wells Fargo’s Florida branches have stepped forward to join a wrongful termination and retaliation lawsuit filed in September by Los Angeles employment lawyer Jonathan Delshad. It was the first such case to be brought after the fines. He provided Bloomberg with a state-by-state breakdown of the roughly 500 potential plaintiffs vetted by his firm so far, showing only California has more, with 144.
The complaint, filed in Los Angeles Superior Court, seeks class-action status for employees ousted or demoted for missing sales quotas while refusing to cheat customers.
Some of Sotoodeh’s team also got involved with new branches in the Southeast. In 2010, members of his staff went to train Wachovia bankers working under Harmon. Soon after the coaches left, the Wachovia staff discovered debit cards in their mailboxes for Wells Fargo accounts they hadn’t requested, one person said. The bankers learned months later that members of Sotoodeh’s team had used local customers’ identities to help meet sales goals, the person said.
Wells Fargo’s internal crackdown intensified in the years after Sotoodeh handed Young the swath of branches stretching from San Bernardino County to San Diego.
In 2011, the bank created a “report card” to help track sales practices in California, and it delegated a team to sift data for patterns suggesting accounts were bogus, Stumpf told the Senate panel. Two years later, that group launched an “intensive investigation” in Los Angeles and neighboring Orange County into a practice known as “simulated funding,” he said. At the time, Sotoodeh oversaw both areas.
Employees were opening bogus accounts, then depositing funds temporarily to make it look like customers were using them, Stumpf testified. He conceded to lawmakers that sales abuses were especially prevalent in Southern California, and not just because the bank’s presence there was large. Both the report card and funding review later expanded nationwide.
Other managers from California also assumed leadership posts overseeing broader U.S. regions. Pam Conboy supervised the San Gabriel Valley to the east of Los Angeles when Tolstedt was picked to run the state in 2000. Tolstedt promoted Conboy within the state, and later flew her around the country to teach strategies for increasing sales, managers say. She now oversees Arizona, Nevada and Utah. Conboy didn’t respond to messages seeking comment.
Conboy, Sotoodeh and Stevens have outlasted many of their colleagues. Of the almost 70 regional supervisors listed in the company’s 1999 annual report, they’re among fewer than 10 whose names still appeared in an updated hierarchy posted this year.
A number of other managers who came up under Sotoodeh around Los Angeles and Orange County are now regional presidents overseeing parts of California and Texas. David DiCristofaro runs greater Los Angeles. Ben Alvarado runs the region that Sotoodeh once handed to Young. Reza Razzaghipour manages an area stretching from Ventura and Santa Barbara inland to Tulare County, while his spouse, Marla Clemow, presides over metropolitan Los Angeles. They declined to comment or didn’t respond to messages.
One of their peers, Darryl Montgomery, leads Houston. He was the most senior manager below Tolstedt named in a lawsuit by ex-Wells Fargo employees claiming they were unfairly pressed to meet sales quotas, according to a Bloomberg review of more than 40 court cases. While that 2014 complaint against Wells Fargo is continuing in Los Angeles Superior Court, claims against Montgomery were extinguished in July. He didn’t respond to phone messages.
Wells Fargo has said it scaled back, and ultimately eliminated, sales goals that regulators faulted for encouraging abusive cross-selling. A new performance plan for retail bankers will be introduced next year. It’ll be based on customer service, growth and risk management.
The company created a human resources team to help rehire employees who left for performance reasons, Sloan told staff in his speech. And it will hire consultants to review sales practices and address “cultural weaknesses that need to be strengthened or fixed,” he said.
“I think it all begins with understanding where things broke down, and where we failed -- as a culture, a company and as leaders,” he said.
Still, there’s “a risk of over-correcting" the bank’s sales practices, Sloan told investors Thursday at an investors’ conference in Boston. “There’s nothing wrong with cross-sell done right," he said, adding that its businesses outside of the retail bank are performing well.
Six years ago, former Wachovia banker Joe Coyne helped run some of Schulte’s programs on the East Coast to drive up numbers, such as one called “Jump Into 2010.” To many managers back then, his was a voice of encouragement, singling out those who beat targets and spurring them to do more.
“The performance you both planned for and delivered is nothing short of incredible,” he wrote in a staff update on the 2010 campaign. “You have raised the bar higher than many thought possible.” He referred questions about that work to the bank’s spokesmen.
Last year, Wells Fargo promoted him to a key post within its risk office. Coyne now oversees sales practices across the company’s divisions, looking for any conduct that might cause problems.
Read the full article from Bloomberg.
Photo from the Odyssey Online
From the New York Times.
By: Noam Scheiber
To explain their infatuation with Trader Joe’s, fans of the offbeat grocery chain typically cite three factors: low prices, an appealing selection of high-end products and, perhaps above all, irrepressibly friendly employees.
The company’s workers are urged to walk customers to any item they couldn’t locate, tear open bags of food for impromptu tastings and accept returns with no questions asked.
That they go the additional step of doing it all with a smile is no accident. John Shields, the longtime chief executive who died two years ago and had personally interviewed prospective managers, once said he eliminated any candidate who didn’t flash a grin within 30 seconds.
Trader Joe’s also backed up its preference for cheerfulness with cash. Workplace experts have praised the company for its “good jobs” strategy of offering generous pay and benefits and recouping the cost through lower turnover and higher sales.
But in recent years, the patina of good cheer has masked growing strife and demoralization in some stores on the East Coast, far from the company’s base in California. A number of workers, known at Trader Joe’s as “crew members,” complain of harsh and arbitrary treatment at the hands of managers, of chronic safety lapses and of an atmosphere of surveillance.
Above all, some employees say they are pressured to appear happy with customers and co-workers, even when that appearance is starkly at odds with what is happening at the store.
“We are committed to maintaining a great and safe environment in which to work,” the company responded. “We promote an open and honest environment that encourages questions, suggestions or concerns to be raised.”
According to an unfair labor practices charge filed on Thursday with a National Labor Relations Boardregional office, Thomas Nagle, a longtime employee of the Trader Joe’s store on Manhattan’s Upper West Side, was repeatedly reprimanded because managers judged his smile and demeanor to be insufficiently “genuine.” He was fired in September for what the managers described as an overly negative attitude.
The morale issues appear concentrated at some of the company’s largest and busiest stores, including one where a union is trying to organize. Tensions have been heightened, according to several employees, by the pressure to remain upbeat and create a “Wow customer experience,” which is defined in the company handbook as “the feelings a customer gets about our delight that they are shopping with us.”
Still, many employees think of the company fondly, some former crew members say. Maggie Dunham Jordahl, who has worked at three Trader Joe’s stores, said managers were nurturing and helpful.
But in interviews, Mr. Nagle, who recorded several performance reviews with his managers and made the recordings available to The New York Times, described stockrooms piled high with products that fell on workers and harsh fumes that sometimes wafted through the store and sickened workers.
He said managers would typically use the public address system to instruct workers to avoid talking to one another while they stocked shelves. He also said managers appeared to harass workers for the sport of it.
As an example, Mr. Nagle said a manager chastised him over the public address system for returning a sweatshirt to his locker after unloading goods in a freezer. “If anyone’s confused, there’s no product to work in the locker room,” the manager announced, he said.
Mr. Nagle’s filing challenges policies that appear in the Trader Joe’s crew handbook and job bulletins, and which were read aloud to him. One of the latter required employees to maintain a “positive attitude.”
Some labor experts say such policies may be illegal because federal labor law gives employees the right to discuss working conditions and the merits of joining a union with one another, and to complain about working conditions to the public, including customers. Any company rule that an employee would reasonably interpret as discouraging these activities is most likely to be illegal, according to Wilma Liebman, a former chairman of the National Labor Relations Board.
In a decision involving T-Mobile earlier this year, the labor relations board struck down a rule in that company’s handbook that said: “Employees are expected to maintain a positive work environment by communicating in a manner that is conducive to effective working relationships.”
For its part, Trader Joe’s said in a statement: “We do not fire crew members for trivial reasons. We pride ourselves on operating our business with integrity and adhering to the law at all times.”
Mr. Nagle said that as conditions deteriorated at his store, workers reached out to organizers at the Retail, Wholesale and Department Store Union, who helped them begin making the case to co-workers for unionizing. The union is providing Mr. Nagle’s legal representation.
Other employees in stores across the Northeast and Middle Atlantic regions, who spoke on the condition of anonymity to protect their jobs, echoed Mr. Nagle’s description of stockroom hazards and managers’ behavior. A former worker in Brooklyn said that if two workers spoke to one another for more than a minute or two while on the job, often a manager would appear and ask, “What’s going on?”
Gammy Alvarez, who works at the Manhattan store where Mr. Nagle did, described being reprimanded for sipping water while working at the checkout because, a manager said, she was taking too long between customers.
Workers at two other stores, including one in Brooklyn, said that good employees who committed minor infractions or asked managers legitimate questions disappeared with no explanation. Weeks or months later, their co-workers learned they had been fired.
The treatment, which may not be unusual for the retail sector, is at odds with Trader Joe’s reputation for positivity, and with the image the company takes pains to project.
Managers were determined to have employees remain cheery with colleagues as well their customers. Mr. Nagle’s girlfriend, Vanessa Erbe, also worked in the store and said she once gently complained to a manager about being stranded at a demonstration stand for 20 minutes after her eight-hour shift ended. The next day, a second manager asked her to write the first manager a letter of apology. “It was demoralizing,” she said.
Transcripts of three of Mr. Nagle’s semiannual performance reviews leading to his ouster, after nearly three years of what he said were positive reviews, show managers praising his aptitude for the work but criticizing him for not being friendly enough with co-workers or customers.
After one review in which a manager said he was making “little effort in executing Trader Joe’s processes,” Mr. Nagle asked for an example. A second manager responded: “I don’t remember the last time I’ve seen you like genuinely smile.”
In Mr. Nagle’s final review before he was fired, he was criticized for not greeting a manager with sufficient feeling. “It’s not like, ‘Hey what’s going on,’ it’s like ‘Heh,’” the manager said. Mr. Nagle said that when he asked if the manager if he wanted a longer acknowledgment, he responded, “Yeah, but it’s got to be genuine. You have to want to be here.”
Mr. Nagle said that his work ethic never flagged — which his co-worker Ms. Alvarez affirmed — though he conceded he became more terse with managers as they largely ignored workers’ pleas to address the increasingly difficult work environment.
Mr. Nagle’s managers seemed to view him as one of the keys to his colleagues’ morale. “You have a lot of influence over the mood of the store,” a manager told him during a review. “Work to create a more fun and energetic experience for both our customers and your fellow crew.”
Trader Joe’s began in Pasadena, Calif., in 1967 as a convenience store that sold a variety of provisions, including deeply discounted wine. It later added health and gourmet food.
As the chain expanded to more than 150 stores across the country by the early 2000s, the founder Joseph H. Coulombe and his successor as chief executive, Mr. Shields, were adamant about preserving its quirky neighborhood vibe.
But with more than 400 stores generating over $10 billion in sales, according to estimates, the company culture appears to have evolved from an aspiration that could be nurtured organically to a tool that can be used to enforce discipline and stifle criticism.
“The environment in this job is toxic, but they’re trying to create this whole false idea that everything is cheery and bubbly,” Ms. Alvarez said. “I think they want us to be not real people.”
Read the full article from the New York Times.
From AP: The Big Story
By: Paul Wiseman
Donald Trump blames Mexico and China for stealing millions of jobs from the United States.
He might want to bash the robots instead.
Despite the Republican presidential nominee's charge that "we don't make anything anymore," manufacturing is still flourishing in America. Problem is, factories don't need as many people as they used to because machines now do so much of the work.
America has lost more than 7 million factory jobs since manufacturing employment peaked in 1979. Yet American factory production, minus raw materials and some other costs, more than doubled over the same span to $1.91 trillion last year, according to the Commerce Department, which uses 2009 dollars to adjust for inflation. That's a notch below the record set on the eve of the Great Recession in 2007. And it makes U.S. manufacturers No. 2 in the world behind China.
Trump and other critics are right that trade has claimed some American factory jobs, especially after China joined the World Trade Organization in 2001 and gained easier access to the U.S. market. And industries that have relied heavily on labor — like textile and furniture manufacturing — have lost jobs and production to low-wage foreign competition. U.S. textile production, for instance, is down 46 percent since 2000. And over that time, the textile industry has shed 366,000, or 62 percent, of its jobs in the United States.
But research shows that the automation of U.S. factories is a much bigger factor than foreign trade in the loss of factory jobs. A study at Ball State University's Center for Business and Economic Research last year found that trade accounted for just 13 percent of America's lost factory jobs. The vast majority of the lost jobs — 88 percent — were taken by robots and other homegrown factors that reduce factories' need for human labor.
"We're making more with fewer people," says Howard Shatz, a senior economist at the Rand Corp. think tank.
General Motors, for instance, now employs barely a third of the 600,000 workers it had in the 1970s. Yet it churns out more cars and trucks than ever.
Or look at production of steel and other primary metals. Since 1997, the United States has lost 265,000 jobs in the production of primary metals — a 42 percent plunge — at a time when such production in the U.S. has surged 38 percent.
Allan Collard-Wexler of Duke University and Jan De Loecker of Princeton University found last year that America didn't lose most steel jobs to foreign competition or faltering sales. Steel jobs vanished because of the rise of a new technology: Super-efficient mini-mills that make steel largely from scrap metal.
The robot revolution is just beginning.
The Boston Consulting Group predicts that investment in industrial robots will grow 10 percent a year in the 25-biggest export nations through 2025, up from 2 or 3 percent growth in recent years.
The economics of robotics are hard to argue with. When products are replaced or updated, robots can be reprogrammed far faster and more easily than people can be retrained.
And the costs are dropping: Owning and operating a robotic spot welder cost an average $182,000 in 2005 and $133,000 in 2014 and will likely run $103,000 by 2025, Boston Consulting says. Robots will shrink labor costs 22 percent in the United States, 25 percent in Japan and 33 percent in South Korea, the firm estimates.
CEO Ronald De Feo is overseeing a turnaround at Kennametal, a Pittsburgh-based industrial materials company. The effort includes investing $200 million to $300 million to modernize Kennametal's factories while cutting 1,000 of 12,000 jobs. Automation is claiming some of those jobs and will claim more in the future, De Feo says.
"What we want to do is automate and let attrition" reduce the workforce, he says.
Visiting a Kennametal plant in Germany, De Feo found workers packing items by hand. He ordered $10 million in machinery to automate the process in Germany and North America.
That move, he says, will produce "better quality at lower cost" and "likely result in a combination of job cuts and reassignments."
But the rise of the machines offers an upside to some American workers: The increased use of robots — combined with higher labor costs in China and other developing countries — has reduced the incentive for companies to chase low-wage labor around the world.
Multinational companies are also rethinking how they spread production across the globe in the 1990s and 2000s, when they tended to manufacture components in different countries and then assemble a product at a plant in China or other low-wage country. The 2011 earthquake and tsunami in Japan, which disrupted shipments of auto parts, and the bankruptcy of the South Korean shipping line Hanjin Shipping, which stranded cargo in ports, exposed the risk of relying on far-flung supply lines.
"If your supply chain gets interrupted and your raw materials are coming from offshore, all of a sudden shelves are empty and you can't sell product," says Thomas Caudle, president of the North Carolina-based textile company Unifi.
So companies have been returning to the United States, capitalizing on the savings provided by robots, cheap energy and the chance to be closer to customers.
"They don't have all their eggs in that Asian basket anymore," Caudle says.
Over the past six years, Unifi has added about 200 jobs, bringing the total to over 1,100, at its automated factory in Yadkinville, North Carolina, where recycled plastic bottles are converted into Repreve yarn. Unmanned carts crisscross the factory floor, retrieving packages of yarn with mechanical arms — work once done by people.
In a survey by the consulting firm Deloitte, global manufacturing executives predicted that that the United States — now No. 2 — will overtake China as the most competitive country in manufacturing by 2020. (Competitiveness is measured by such factors as costs, productivity and the protection of intellectual property.)
The Reshoring Initiative, a nonprofit that lobbies manufacturers to return jobs to the United States, says America was losing an average of 220,000 net jobs a year to other countries a decade ago. Now, the number being moved abroad is roughly offset by the number that are coming back or being created by foreign investment.
Harold Sirkin, senior partner at Boston Consulting, says the global scramble by companies for cheap labor is ending.
"When I hear that (foreigners) are taking all our jobs — the answer is, they're not," he says.
Read the full article from AT: The Big Story.
Photo from Flickr / Matthew Stroup
From The American Prospect
By James Parrott
It has been five years since the Occupy movement focused attention on the gap in income between the top 1 percent and other Americans. During Barack Obama’s first term, Democrats made federal taxes more progressive and expanded health insurance for low- and middle-income people. But since those changes were adopted, conservative forces in Washington have stifled further progress toward greater income equality.
Many liberals have therefore focused on local measures, despite some clear limitations to going local. Legally, cities and counties are creatures of their respective states and often face strict statutory limits on what they can do, including laws preempting local initiatives (see Abby Rapoport, “Blue Cities, Red States,” The American Prospect, Summer 2016).
Cities and counties also face competition from other localities that offer tax abatements and other incentives for business, which make it difficult to raise enough revenue to carry out progressive policies in fighting inequality.
The constraints on local governments, however, are often exaggerated. Localities can do a great deal to improve incomes and living standards in low-income communities. And contrary to the conservative insistence that progressive taxation will drive away the wealthiest taxpayers, recent research on “millionaire taxes” by Charles Varner and Cristobal Young of Stanford shows that the rich are generally so tied in to local economic and social networks that they have not moved out of the states that have imposed higher taxes on them.
Today, some cities enjoying strong economies have more leeway for progressive policies than they did in leaner times. With an economic output greater than that of 46 states, New York City has been in a singular position. It has also had a political leadership committed to reducing inequality since the election of Bill de Blasio as mayor in 2013. But considering all the obstacles to local progressive policies and the difficulties of doing anything about inequality, is de Blasio having a meaningful impact?
NEW YORK CITY IS the most economically polarized of the 25 largest U.S. cities. As the nation’s largest financial center, it is home to bankers and hedge fund and private-equity managers, who enjoy sky-high levels of compensation. From 2009 to 2013, as the economy recovered from the Great Recession, the wealthiest 1 percent took nearly half of all New York City income growth, according to an analysis of income tax data by the Fiscal Policy Institute. The top 1 percent’s share of total income rose to 40 percent in 2014, nearly twice the share of the 1 percent nationally. While New York City workers have seen some wage gains in the past two years, median family income in 2014 was still nearly 6 percent below pre-recession levels.
Poverty was also higher in 2014 than in 2008. Especially telling is the estimate by University of Washington researchers that 42 percent of all New York City households lack sufficient income to meet minimum basic family needs such as shelter, food, child care, and health care. Among black and Asian households, nearly half don’t make enough to meet that standard, and the incomes of three out of every five Latino households fall short of sufficiency.
If the dividends of economic growth had been more equally shared, the difference would have been enormous. Median family income in 2014 would have been $97,000, two-thirds higher than it actually was, if median incomes had grown since 1990 as fast as the city’s economy (as measured by the increase in per capita gross product).
Running for mayor in 2013, de Blasio highlighted New York’s “tale of two cities,” the city of the rich and the city of the struggling. Since taking office, he has acted in concert with a progressive city council led by Speaker Melissa Mark-Viverito to lift low wages, expand benefits for low-wage workers, institute universal pre-kindergarten, increase affordable housing, and bolster funding for programs serving the poor. In several areas, such as taxes, state law circumscribes local autonomy, and Governor Andrew Cuomo and the Republican-controlled state senate have blocked de Blasio’s initiatives. Most notably, they prevented the city from instituting an income tax surcharge on the 1 percent to pay for universal pre-K.
Even with those constraints, New York City hasn’t had such a progressive government in a long time. In his first year in office, de Blasio mandated five paid sick days for all workers at businesses with five or more employees. He increased the living-wage level required for workers at companies receiving city subsidies and expanded coverage to the employees of business tenants in subsidized developments. He also pushed aggressively for an increase in the state minimum wage, or the authority from the state to set a higher wage floor in New York City.
At first, Governor Cuomo chided de Blasio for proposing a higher wage level for the city. But as the Fight for 15 campaign built momentum, Cuomo changed course, using his executive authority to establish a wage board that recommended a $15 floor for all fast-food workers in the state, with a faster phase-in for New York City. By early 2016, the governor proposed and aggressively pushed for the enactment of a minimum-wage increase for all workers that would reach $15 by 2019 in New York City and later in the rest of the state. Since de Blasio has been mayor, Cuomo has alternated between thwarting de Blasio’s proposals and seeking to outdo them. In one area, the mayor still occupies the high ground. Unlike Cuomo, de Blasio has included funding in his latest budget for nonprofit agencies under city contract to enable them to keep up with rising minimum wages.
While public-sector workers have met hostility from elected officials elsewhere in the country, de Blasio has resolved almost all of the city’s contracts with its own workforce. Michael Bloomberg had left office after 12 years as mayor without having settled contracts affecting all 340,000 city employees. In contrast, de Blasio reaffirmed the principle of collective bargaining for public employees and was able to fully cover the cost of labor contracts containing modest wage increases and significant health insurance savings
To date, de Blasio’s crowning achievement as mayor has been the expansion of universal pre-K to serve all 4-year-olds, mainly from low-income families. More than 68,000 children have been enrolled, more students than in the entire public school systems in Boston or San Francisco.
In addition to substantially increasing funding of a range of human services such as homelessness prevention and immigrant, youth, and senior programs, de Blasio and his social services commissioner, Steve Banks, reversed two decades of punitive welfare policies. Banks had been a Legal Aid attorney who frequently sued the city to compel better treatment for vulnerable populations.
The city’s economy and its private-sector jobs have continued to grow faster than the nation’s under de Blasio, business confidence and investment evidently undiminished by a progressive in City Hall. Construction activity and private employment are at record levels and thriving tech, professional services, cultural, and tourism industries have helped make the current economic expansion the first in New York since the 1960s that has not been driven mainly by Wall Street. Strong revenue growth has certainly aided de Blasio in enacting much of his agenda, but he has also built up budget reserves to cushion any eventual slowdown.
De Blasio’s most ambitious policy is his plan to preserve and create 200,000 units of affordable housing. Rents have risen much faster than wages in New York since 2000. Two-thirds of city households are renters and one-third of all renters pay more than half of their income in rent, including nearly half of all low-income renters.
In its first two years, the de Blasio administration financed the preservation and construction of more than 40,000 affordable apartments and put nearly $7.5 billion in the city’s ten-year capital plan for affordable housing. Many of the new units already built or under construction have benefited from a long-standing lucrative tax break known as “421-a,” which also subsidized a lot of high-priced condo units and padded the profits of developers. The tax break expired earlier this year and it’s not clear whether or in what form it might continue.
De Blasio is relying heavily on a new regime of mandatory inclusionary housing passed by the city council. Developers building housing in areas rezoned for denser development will be required to set aside a portion of units for low- or moderate-income families. (One option would be to require 30 percent of units be affordable for families with incomes at 80 percent of area median income, or about $62,000 for a three-person family. Set-aside requirements are lower for lower-income families.) The plan relies on rezoning low-income neighborhoods such as East New York and East Harlem and has triggered concerns about displacement and gentrification.
Rezoning areas for greater density enables developers to make a lot more money; mandatory inclusion of affordable housing enables the city to require that some of that additional value go to low-income families. Housing advocates argue that the city can increase affordability requirements even further. Some would like to see the city buy up land in advance of rezoning so that it can directly capture more of the city-induced wealth creation, or use a community land trust to permanently insulate housing from market pressures. De Blasio’s efforts to limit displacement of existing tenants and encourage greater community participation in planning may help ensure that the program genuinely advances its equity goals.
De Blasio has also provided funds for long overdue repairs at the city’s public housing projects, and his appointments to the Rent Guidelines Board permitted rent increases of just 1 percent in three years for more than 1.1 million rent-stabilized housing units—the smallest three-year increase in the city’s history of rent stabilization.
DE BLASIO'S POLICIES stand out when compared with those of his immediate predecessors and Governor Cuomo. While they helped make New York one of the safest large cities in the country and contributed to the city’s economic growth, Rudy Giuliani and Michael Bloomberg were not concerned about social and economic inequalities. Giuliani initiated and Bloomberg continued punitive welfare policies that denied or revoked benefits for many poor families and prevented recipients from pursuing a college education. De Blasio has ended those practices, overhauled employment policies to foster skill development, and used temporary assistance to keep people in their homes and prevent evictions and greater homelessness.
While unrelenting in his drive to shrink welfare rolls, Giuliani’s generosity in handing out sizable tax breaks to Wall Street firms and other large corporations cost the city an average of $125 million each year he was in office. He also agreed to give the New York Stock Exchange nearly $1 billion to build a new trading floor, though the deal fell through after the September 11 attacks. (The stock exchange never tried to revive the deal, since computerization soon dramatically shrank the need for trading space.) Bloomberg raised regressive property and sales tax rates in the city while instituting multibillion-dollar property tax breaks for the Hudson Yards district, even though Senator Charles Schumer, among others, argued that such tax breaks were unnecessary because the city was already subsidizing the district through a subway line extension. In contrast, de Blasio firmly rebuffed JPMorgan Chase when the mega-bank sought $1 billion in subsidies to build a new headquarters in Hudson Yards. That would have been on top of $600 million in reduced taxes from the discount scheme Bloomberg had put in place.
The contrast between de Blasio and his predecessors is especially evident on issues affecting low-wage workers. Bloomberg steadfastly opposed the expansion of living-wage requirements, and he severely undermined union labor standards for thousands of low-paid child-care workers and school-bus drivers. Through his housing development and rezoning agenda, Bloomberg enriched developers without putting much priority on affordable housing.
While Cuomo’s support for the $15 minimum wage and paid family leave is to his credit, his budget and tax policies appear to have been inspired by anti-tax conservatives. The governor’s cap on local property tax increases (the lesser of 2 percent or inflation) and his cap of 2 percent on state spending growth have limited the potential for progressive policies. Revenues have been growing—at about the same 4 percent to 5 percent annual rate for both the city and state—but de Blasio and Cuomo have responded differently. De Blasio has increased municipal spending by 5.1 percent annually, while Cuomo has adhered to his self-imposed 2 percent spending cap and used the projected revenue growth exceeding 2 percent to cut taxes. The beneficiaries of those reduced taxes include Wall Street giants and buyers of yachts and private jets. Cuomo also plans to let New York’s “millionaire tax” expire at the end of 2017 to provide a $3.7 billion windfall to the richest 1 percent.
New York City’s experience under de Blasio affirms that progressive mayors can reduce inequality, especially by helping low-income people. The city could do more with a supportive state government, not to mention changes in national policy affecting unions, financial market regulation, and other issues. But New York City under de Blasio ought to be a model for progressive leaders in other cities.
Read the full article from The American Prospect.
Image from Flickr / gato-gato-gato
From the Chicago Tribune
The Chicago regional office of the National Labor Relations Board filed a complaint against on-demand delivery service Postmates last week alleging labor violations against its drivers, raising a question that has dogged the gig economy since the rise of Uber: Are the drivers employees?
The complaint — which challenges the legality of the company's mandatory arbitration agreements, another controversial matter — does not explicitly address whether Postmates drivers are independent contractors versus employees entitled to protections under the National Labor Relations Act, such as the right to unionize and engage in concerted activity.
But the fact that the complaint was filed at all means that the NLRB is assuming the drivers are employees, a classification many gig economy employers have rejected because it would require them to pay for overtime, workers' compensation and other benefits tied to employee status.
Postmates declined to comment on pending litigation, but spokeswoman April Conyers said the company considers its delivery couriers to be independent contractors. The company, based in San Francisco, has until Oct. 20 to respond to the complaint.
Postmates operates a technology platform that "connects customers with local couriers who can deliver anything from any store or restaurant in minutes," according to its website, which lists dozens of restaurants it works with in Chicago and several suburbs.
Worker misclassification is a long-standing issue, but it has gained steam with the rise of on-demand technology platforms that dispatch with the push of a button chauffeurs, delivery drivers, house cleaners and masseuses to customers.
Chicago-based GrubHub was named in a federal lawsuit this past summer over misclassification of its drivers. The NLRB is investigating whether Uber's drivers are employees after several brought charges of unfair labor practices. Uber has been sued repeatedly over the issue and this past spring agreed to pay $100 million to settle two class-action lawsuits, which allowed it to continue to classify drivers as independent contractors.
Though the Postmates complaint's relevance to the misclassification debate is speculative at the moment, it does directly address another controversial topic.
In the complaint against Postmates, the NLRB alleges the company violated the National Labor Relations Act by requiring that workers enter arbitration agreements as a term of employment, thus waiving their right to pursue class or collective actions. It stems from a charge filed by a worker in October 2015. A news release from the NLRB stated that the affected parties were "employee drivers."
The complaint also alleges workers were warned not talk to other employees about work terms and conditions, including safety issues, which the NLRB says violates federal law protecting concerted activity.
The legality of mandatory arbitration agreements is a hot topic that legal experts say is likely on its way to the Supreme Court. The circuit courts have been split.
"The NLRB says those (agreements) are unlawful," said Fred Schwartz, a partner in the Chicago office of Barnes & Thornburg who represents management in employment cases. "Federal courts encourage those types of provisions because it reduces litigation in courts."
Companies like arbitration agreements because they can save money and risk if they can pay people off individually and avoid going to court.
The NLRB previously ruled that requiring employees to sign arbitration agreements that prevent them from joining together to pursue employment-related legal claims in any forum violates federal labor law that protects concerted activity, said Alex Marks, an attorney with Chicago-based Burke, Warren, MacKay & Serritella who represents management.
Most circuit courts of appeals and federal district courts have not deferred to the NLRB on the issue, but the 7th Circuit in Chicago recently affirmed the NLRB's position and rendered arbitration agreements within its jurisdiction unenforceable under the national act, Marks said.
"While the Supreme Court in the past has appeared to sanction class action waivers in arbitration agreements and is generally deferential to arbitration, it has not yet opined on the interplay between the Federal Arbitration Act and the NLRA, the latter of which the NLRB argues should trump," Marks said. "This is a significant issue to monitor for all employers who utilize mandatory arbitration agreements."
Read the full article from the Chicago Tribune.
Photo: Jennifer Ludden/NPR
From NPR / All Things Considered
By: Jennifer Ludden
In the two-story breakfast room on the 25th floor of Hilton's Conrad Miami, Florance Eloi mans the omelet stand in front of a panoramic view of the sunrise over the Atlantic Ocean. The bubbly Miami native says, laughing, that guests routinely tell her, "Stop making the omelets, you need to turn around and look!"
When Eloi, 31, found out she was pregnant late last year, she wondered how she would balance her job with a baby. She was lucky to have a few weeks of paid vacation, since about half of lower-wage workers do not.
Still, it would be hard to come back to work so soon. And if she stayed home longer without a paycheck, Eloi says, she and her husband would have had to dip into savings.
Then Eloi's manager told her some good news: By the time Eloi gave birth, a new policy would guarantee her 10 weeks of fully paid parental leave.
"It was right on time!" she says.
Recent years have seen a boom in paid parental leave in parts of corporate America. Silicon Valley, especially, is in a benefits war to diversify and attract female workers, with companies announcing new leave policies or expanding existing ones.
But overall, the Labor Department says only 13 percent of workers in the private sector have paid parental leave, and by far, most of them are white-collar professionals.
By contrast, overall this year Hilton Hotels and Resorts began offering paid parental leave to all of its 40,000 U.S. "team members," from top managers to those who clean guest rooms or serve them breakfast, like Eloi.
"There was absolutely no peer pressure in this regard," says Matt Schuyler, the chief human resources officer for Hilton Worldwide. "In our industry we are first and now quite out in front with respect to this."
He says the new policy was driven by employee demand. Millennials — adults younger than 35 — are nearly half of Hilton's workforce and will soon be three-quarters. Research, including Hilton's own surveys, shows that both millennial women and men care a lot about paid leave.
Schuyler says the paid parental leave policy was not about a "cost-benefit analysis" as much as "being able to attract and retain the workforce of today and the workforce of tomorrow."
But while advocates give Hilton props, they say the policy is a little stuck in the past. Men get only two weeks of leave, far less than women. And the leave can only be used to care for a new child. (Adoptive parents get two weeks.)
Advocates also talk of a looming "caregiving tsunami" as the population ages and more workers must tend to older parents. They say it's becoming best practice to offer broad paid leave policies that employees can use for all kinds of family caregiving.
Schuyler says he doesn't rule out changes at some point. Meanwhile, he says Hilton has also introduced a 10-day advance scheduling policy and — starting next year — will reimburse employees for adoption expenses, up to $10,000 per child.
Schuyler says another push for Hilton was that it operates globally and saw the disparity in policies. The company provides paid parental leave in most countries it does business in, so "it wasn't an unnatural thing to administer," he says. With the growing push for paid leave in the U.S., the company decided "let's not wait for the mandate, let's do the right thing."
One possible hitch: Hilton has not budgeted extra money for this. If there were, say, a baby boom in housekeeping at a particular hotel, Schuyler says the manager there would have to cut back elsewhere to pay for temp workers. That's probably far more feasible for a multinational company than it would be for a small business.
In Eloi's case, her boss, chef Virgile Brandel, says filling in for her was easy. He cross-trained the rest of the staff members who work the morning shift.
"They all know the [omelet] station and they can rotate every day," he says.
Eloi says she intended to work until her due date last March.
"But of course," she says, "I didn't know, first-time mom, how tired and fatigued I'd be."
She says it became hard to stand all day, so she stopped working one week before the birth. She also wrapped in vacation time, taking a total of 13 weeks off, and says it was a lifesaver.
Her husband is a chef at a local restaurant and has no paternity leave. She is grateful for the time to bond with her son, Caleb, getting "to know him, what makes him cry, what makes him calm."
There may be no bigger sign of the shift on paid parental leave than the fact that both presidential candidates are proposing it.
Donald Trump calls for six weeks for women, paid through unemployment insurance. Hillary Clinton wants 12 weeks, for both men and women, funded by a tax increase.
"The conversation has really shifted," says Vicki Shabo, vice president at the National Partnership for Women and Families. She has seen it change over the past half-dozen years, as several statesand a string of cities have passed their own paid parental or family leave policies.
"I think the private sector's anticipating that policy changes may be coming," she says, "and trying to get ahead of that curve."
Editor's Note: Hilton Hotels is among NPR's financial supporters. But NPR makes its own decisions about what stories to cover and how to report them. (The Conrad N. Hilton Foundation, a family foundation that also supports NPR, is not connected to the hotel chain.)
Read the full article from NPR / All Things Considered.
From Forbes / Next Avenue
By John Schall
When employers force their employees with caregiving duties to choose between work and family, everyone loses. This can be particularly true for women, who still make up 60% of the family caregiver population (though men are increasingly shouldering the responsibility).
Two out of every five adults — tens of millions of Americans — are family caregivers of loved ones. Most of the people caring for someone at home are also working full- or part-time jobs. But increasingly, working women over 50 are leaving their jobs in order to provide the necessary care.
Stepping Away From Work for Caregiving
After studying 18 years of data, Sean Fahle of the State University in Buffalo and Kathleen McGarry of UCLA recently found that taking care of a parent significantly reduces the chances that women in their early 50s to early 60s are working, according to the Squared Away blog from Boston College’s Center for Retirement Research.
“We see a precipitous decline in earnings with caregiving” and a “significant effect of caregiving on the probability of work,” the authors wrote. The steady decline in labor force participation among the caregiving women is due solely to a decline in full-time employment.
This important study discovered that one-third of boomer women are currently caring for an elderly parent, devoting eight to 30 hours per week to caregiving in addition to their time at work. Caregiving for parents peaks in the mid 50s, the authors say.
At the Caregiver Action Network, we’ve seen that all this caregiving can have a tremendous financial impact, not to mention the emotional and physical stress. Most caregivers feel their career is negatively impacted by their caregiving situation.
That’s more than just a belief; the impact is very real. Losses can come in the shape of lost wages or in sacrifices of future pay raises or promotions.
Grim Statistics for Working Women Who Are Caregivers
The Fahle and McGarry study confirms some rather grim statistics from other sources about working women who are caregivers:
- The average income lost by caregivers each year is a whopping 33%.
- Caregivers pay for many caregiving expenses out of their own pockets, to the tune of $10,000 a year.
- Overall, 11% of caregivers end up having to quit their job to care for someone at home around-the-clock.
- If a woman does have to leave her job due to caregiving needs, the lost wages, pensions and Social Security benefits over her lifetime total more than $300,000.
Far too often, women may leave a job in order to provide care if they are not supported or accommodated at work. But if they drop out of the labor, it can become quite difficult for them to rejoin the workforce once their caregiving obligations have ceased.
This is unfortunate, and employers could do a lot to prevent such situations. Trying to retain highly-trained and valuable employees is good for business and everyone involved.
A Few Firms Are Assisting Caregiving Employees
The giant professional service firm Deloitte clearly gets it. Deloitte recently began offering employees up to 16 weeks of paid leave for all caregiving, including elder care.
And a few months ago, Nike said it would offer up to eight weeks of paid leave for workers caring for a sick relative.
The federal Family and Medical Leave Act provides up to 12 weeks of unpaid leave. But it doesn’t apply to businesses with fewer than 50 employees and part-time workers typically are not eligible.
As Americans are living longer, the issue of how tojuggle work and caregiving is becoming increasingly important. The number of adult children caring for an elderly parent has tripled over just the past 15 years. And the population of 35 million elders will double by 2030. So the number of people who need elder care will continue to grow rapidly as the population ages.
Family caregiving is today’s issue just as child care was in the 1980s. Employers need to recognize and accommodate the reality that so many workers today have significant caregiving responsibilities at home.
Because when it comes to choosing between work and family, there is really no choice at all.
Read the full article from Forbes / Next Avenue.
Photo credit: Joe Valbuena
From Civil Eats:
by Elizabeth Grossman
The average American ate more than 90 pounds of chicken last year—more than ever before. At the same time, the United States’ top two chicken producers—Tyson Foodsand Pilgrim’s Pride—are reaping record sales and profits. Last year, Tyson reported more than $41 billion in sales and double-digit profits while Pilgrim’s Pride’s profits rose 17 percent in the same year. Yet missing from these enthusiastic sales reports is any mention of the enormous toll this industry takes on its workers.
In fact, poultry processors work in some of the most dangerous conditions in the food system. They suffer serious work-related injuries and illnesses at rates almost double those for other private industry workers, says Eric Harbin, Occupational Safety and Health Administration (OSHA) Dallas Region deputy regional administrator. And these injuries are often “gruesome,” says the Department of Labor.
In August, an OSHA investigation of such an incident—a finger amputation at the Tyson Foods chicken processing facility in Center, Texas—led to one of the biggest fines against the industry. While investigating the amputation, OSHA discovered 15 serious and two repeated violations at the plant. Among these were a lack of safety guards on moving machine parts, like the one where a worker lost his finger while trying to remove chicken parts that had jammed a conveyor belt. The company now faces $263,000 in proposed fines.
“These are some of the largest fines given in one inspection to a poultry company,” explained Deborah Berkowitz, National Employment Law Project senior fellow and former OSHA chief of staff.
OSHA inspectors also found Tyson Foods had failed to provide the Texas plant workers with protective equipment or training for using peracetic acid, a disinfectant that can cause burns and respiratory illness. In addition, OSHA cited the company for slippery floors, falling crates, and trip-and-fall hazards. Tyson Foods was also cited for fire hazards posed by improper chemical storage—also repeat violations—and unsafe levels of carbon dioxide at the plant.
“As one of the nation’s largest food suppliers, [Tyson] should set an example for workplace safety rather than drawing multiple citations from OSHA for ongoing safety failures,” said David Michaels, assistant secretary of labor for OSHA in a statement.
An Industry Plagued by Hazards
Tyson is far from alone in their approach to labor. A look at OSHA inspection records show that Pilgrim’s Pride, Perdue, Foster Farms, Sanderson Farms, and Wayne Farms all have records full of chronic safety hazards.
“It is horrifying,” Southern Poverty Law Center (SPLC) deputy legal director Naomi Tsu told Civil Eats. In addition to amputations and chemical exposure, poultry processing workers regularly encounter “heightened noise levels and exposure to musculoskeletal hazards,” Tsu explained.
“It seems like there’s a culture in this industry of treating workers as replaceable,” she said. According to the Government Accountability Office, the industry’s workers typical earnings barely clear federal poverty levels for a family of four.
What also makes this work so dangerous are the incredible speeds at which workers must process poultry—more than 100 chickens per minute. (The Department of Agriculture proposed raising this speed to 175 birds per minute back in 2012 and this proposal may creep into an amendment to the 2017 federal budget bill.) Workers are also often crowded, leading to what Berkowitz calls “neighbor cuts.” In one such accident at a Foster Farms plant, a worker’s liver was punctured with a 5-inch blade when he and a coworker bumped into each other and one slipped.
“The pace of work is so fast. It is cold, it is slippery, there’s water and peracetic acid being sprayed on the meat,” said Berkowitz. “There’s a relentless drive to produce chicken at the cheapest possible cost. And they go at inhuman speeds,” she said.
Kendrick, a young African-American man who was interviewed by SPLC for their recent report on poultry processing, developed carpal tunnel syndrome as he worked the deboning line at a plant. The report reads:
When he asked the nurse for a lighter work assignment, she let him know there were consequences for such a request. “Do you want your job?” she asked him. “It’s a house of pain in there,” Kendrick said.”
Recent changes in U.S. Department of Agriculture (USDA) meat inspection rules also means companies now use more disinfectants than they did previously, Berkowitz explained. “Chicken gets repeatedly dipped in these vats of chemicals.”
These speeds and production pressure has also led to chronic lack of break time—including bathroom breaks—for poultry plant workers, as Oxfam America recently documented.
A Tyson foods poultry plant worker named May with whom I spoke for a recent story forIn These Times, explained that the company only allows her to use the bathroom twice per night. “That is not enough for people,” she said.
“The lack of bathroom breaks is representative of the larger lack of respect for the workforce,” Oxfam U.S. domestic program director, Minor Sinclair told Civil Eats.
New OSHA Program Leads to Inspections—and Citations
These problems are far from new. Given this history, to help address these ongoing safety hazards, in October 2015, OSHA began what’s called a “regional emphasis program,” focusing on poultry processing plants in the Southeastern U.S., home to several of the country’s top chicken-producing states. The year-long program is designed to reduce employee injuries and illness and to ensure that the industry properly records all work-related injuries and illnesses.
OSHA’s recent announcement of Tyson Foods’ Texas plant violations is a result of this program. So is OSHA’s unprecedented citation of Pilgrim’s Pride—announced in July—for 22 safety and health violations, including failure to ensure workers use hearing protection, a lapse that caused 16 Pilgrim’s Pride workers to suffer hearing loss in 2015. But what made the citation record-setting was the fact that for the first time, OSHA cited the poultry industry for failing to make timely medical referrals for workers injured on the job.
Again, Pilgrim’s Pride is not alone in its failure to make such medical referrals. One notable case occurred at a Wayne Farms plant in Jack, Alabama, where OSHA found one worker who was seen by the company’s nursing station 94 times before being referred to an outside physician.
Violations May Jeopardize Federal Contracts
OSHA’s citations of Tyson Foods and Pilgrim’s Pride occurred shortly before President Obama’s recent Executive Order, which requires federal contractors to fully disclose labor law violations. Both companies are major federal contractors, noted Oxfam’s Sinclair.
“These violations will trigger the new rules,” he explained. The rule is aimed at getting companies that supply food to federal institutions such as the U.S. Defense Departmentand USDA to clean up their acts—and make sure those who, as Secretary of LaborThomas Perez said, “cut corners at the expense of their workers,” don’t “benefit from taxpayer-funded federal contracts.”
Tyson’s labor and safety record has already lost the company contracts with the Los Angeles Unified School District under the district’s Good Food Policy. “The procurement rules are going to have even a bigger bite than the enforcement rules,” said Sinclair. But he adds that even the biggest fines OSHA can levy may not be “significant given the companies’ earning.”
When asked about the OSHA citations, Tyson Foods said in a statement to Civil Eats, “We never want to see anyone hurt on the job, which is why we’re committed to continual improvement in our workplace safety efforts.” Tyson Foods’ statement also said it “fully cooperated” with OSHA’s inspection and intends “to meet with OSHA officials in an effort to resolve these claims.” Similarly, Pilgrim’s said via email, “We are working with OSHA to review the allegations in detail, with the goal of continuously improving our ability to provide a safe work environment for our team members.”
A Role for Consumers, Say Labor Advocates
Until recently, poultry industry labor issues have not attracted much widespread consumer attention, said Sinclair. But that’s starting to change. Oxfam’s recent report received a significant amount of media attention with frank headlines such as “‘I had to wear Pampers’: The cruel reality the people who bring you cheap chicken allegedly endure.” Oxfam also delivered to Tyson headquarters a petition with 150,000 signatures demanding safe, fair working conditions.
“We need to make the case to consumers and retailers that this is something they need to think about,” said Berkowitz. Consumer pressure has changed animal welfare practices, she noted. “We need to elevate consumer awareness not only of inhumane treatment of animals but also of workers.”
The powerful poultry industry “is definitely pushing back,” said Tsu, alluding to a Georgia poultry company’s lawsuit seeking to limit an OSHA inspection. But she added, “Once consumers start engaging, changes may happen.”
Read more from Civil Eats.
Photo credit: World Economic Forum 2009
From The Huffington Post:
by Brian E Konkol
In both religion and economics, absurd belief too often leads to atrocious action.
While the consequences of misguided belief are well-documented in the study of religion, we rarely use comparable standards to critique the religious-like faith bestowed upon our current economic system. We believe that economic “growth” is the single most important key to unlocking the sacred doors of life, liberty, and the pursuit of happiness. However, the facts of the matter and narratives of the masses reveal a far different picture. As our globalized fiscal cycle is now calibrated to impose repeated tragic failures, and because it seems to legitimize inequality and destruction of the Earth as virtuous and inevitable, the time is long overdue to expose the false beliefs and oppressive impact surrounding our contemporary economic edifice.
Our present condition, often known as “neoliberal capitalism”, which rose to prominence through Margaret Thatcher and Ronald Reagan, seeks to transfer control of the global economy from public to private sector under the belief that such a transition will produce a more efficient government and improve the livelihood of all nations. Through the International Monetary Fund (IMF), World Bank, and World Trade Organization (WTO), neoliberal policies are currently imposed - often without civic consent - upon much of the world, to the detriment of both people and the planet. As Naomi Klein accurately stated, “our economy is at war with many forms of life on earth, including human life”. Through massive tax cuts for the rich and methodical annihilation of trade unions, the neoliberal movement has led to massive consolidations of power and privilege, thus multinational enterprises - motivated by profit and mostly unaccountable to any electorate - use their strong financial influence to push governments into deregulation-orientated policies for the steady flow of products, currency, and factories. While such strategies have created tremendous financial wealth, the distribution of positive and negative consequences is increasingly disproportionate, and the current world population of seven billion is mostly controlled by an overlap of a few hundred billionaires.
As Jim Wallis correctly indicated, we possess an “un-Economy” that is un-fair, creates a world that is both un-stable and un-sustainable, and leaves the far majority of global citizens totally un-satisfied. Why do we continue to believe in such a damaging arrangement? The negative consequences are both ethically alarming and empirically clear, yet similar to the ways in which some people of faith are conditioned not to interrogate their longstanding religious customs, it appears that far too many citizens are forcibly encouraged not to examine the basic practices of our dominant and destructive economic structure. Furthermore, just as there is sparse awareness of alternative approaches to the organized religion of certain faith traditions, there is insufficient knowledge of diverse methods in the realm of economics. For too many of us, we simply cannot imagine another way. In the midst of it all, our collective and blind faith in the divine-like invisible hand remains strong, and we relate to it like an omnipotent deity that must be piously and repeatedly praised and pleased. As a result, one can persuasively argue that we are increasingly “Economistic”, as production and consumption has become our communal worship, because rising gross domestic product is our salvation, the market is our god, and “Economism” is now our most popular and prosperous religious practice.
Economism, a term coined by Joel Kassiola in 1990 and later used by Paul Ekins and Manfred Max-Neef in 1992, is our most organized and flourishing popular religion. As theologian John B. Cobb wrote at the turn of our current century, religion is ultimatley “whatever binds the multiple aspects of human existence together”, and faithfulness to the holy creeds of economism redefines citizens into consumers and affirms competition as the defining characteristic of all human interactions. In doing so, Economism requires people as homo economus to believe that economic growth will somehow directly solve any and all of our most pressing problems, and ultimately, provide the resources needed to pursue any and all of our most important values. The dogmas of economism require, both directly and indirectly, that the structures and systems we set are all designed in such a way that our faithfulness is judged primarily in financial terms, as if our deliverance is somehow determined by whether or not the invisible hand is worshipped and pleased. Our ultimate concern, therefore - especially in times of difficulty - becomes a narrowly and erroneously defined notion of public health and personal wellbeing, and our prayers are most zealously offered to the real god of our communal devotion: the almighty market.
During a previous time of economic transition, Victor Lebow stated that “our enormously productive economy ... demands that we make consumption our way of life, that we convert the buying and use of goods into rituals, that we seek our spiritual satisfaction, our ego satisfaction, in consumption ... we need things consumed, burned up, replaced and discarded at an ever-accelerating rate.” Is this a redeemable description of life, liberty, and the pursuit of happiness? As is the case with other destructive beliefs and practices, in order to break free from such chains we must recognize consequences and propose alternatives. Thankfully,resistance and revolution is already happening, as more people are awakening to the knowledge that what they have been sold in recent decades is contrary to what reality can actually deliver. In addition to the popularizing of democratic socialism, we also hear more about a “sharing economy” or the “commons” and “peer production”, all in order to shape our society around innovative and life-giving metrics such as the Genuine Progress Indicator (GPI) and Economic Bill of Rights. By providing such means to organize and assess our global household, together we might re-learn how to define human interactions not by what we buy or sell to and from one another, but through a collective affirmation that our lives ultimately do belong to each other.
Our religion of Economism is bankrupt, yet the spirit of our human community is overflowing with abundance, and a more liberating collective faith can point us toward a more authentic flavor or freedom. The rules which were made can also be unmade, and the ill-advised trust that supports such repressive rules can also be rejected and transformed. We are better together when we share a vision of a more benevolent and balanced economic order - based on representative planning and cooperative market mechanisms - to achieve an equitable distribution of resources, meaningful work, a nourishing environment, sustainable development, gender and racial equity, and non-oppressive relationships. The scales which blind us to such emancipating truths must fall off our eyes, to imagine and ignite new ways of being, and to experience the gift of life in its fullness. Since our beliefs do indeed lead to our actions, the most important step forward might be to believe that such a way is indeed possible.
Read more from The Huffington Post.