Was the Weird Labor Dustup over Airbnb Housekeepers a Trojan Horse?

Protesters at a rally against illegal hotels Jan. 21. (Photo: Jaime Cone)

Protesters at a rally against illegal hotels Jan. 21. (Photo: Jaime Cone)

New Orleans   Over recent weeks there has been a spit fight involving the controversial in-home rental app, Airbnb, and various labor unions, including the frequently controversial Service Employees International Union and its even more controversial former president, Andy Stern, and the now much less widely known hotel workers union, Unite HERE, and a bunch of housing groups. At issue was a potential deal, now scuttled, that would have had Airbnb recommending union cleaners to its hosts and guaranteeing that they would be paid at least $15 per hour and “green” certified. What in the world was this all about, other than perhaps the easier work of making a mountain out of a mole hill?

What’s the beef? SEIU has been the driving force in the “fight for $15” campaign and they have long “owned” the jurisdiction on many types of cleaners. This could not have been a big deal for them. Maybe they would have gained a couple of members or more likely a couple of more hours for work for already existing members, and that only in jurisdictions like New York and California where they have fought and won high union density for such workers. Largely though this would have been little more than a press flurry for a couple of days that then would disappear from consciousness. For Airbnb operators this would have been a fix looking for a problem, since most are either cleaning their own places or already have cleaners, many, if not most of whom are already making more than $15 per hour since they are on-demand workers with more individual bargaining power.

What SEIU seems not to have fully realized is that the fight around Airbnb in tight housing markets like San Francisco, New York, and others where there are active housing groups is intense and polarized, and there is no demilitarized, neutral zone. But, SEIU certainly was well aware that these same areas are also areas where Unite HERE has significant organization among hotel workers, so they have common cause in seeing Airbnb or any service that takes guests out of a union hotel as the anti-Christ. Going back to the jurisdictional wars within labor what was a close labor partnership between the unions went way, way south, when SEIU offered a safe haven for parts of UNITE and its former leader, Bruce Raynor, in an internecine struggle with John Wilhelm. To put another finger in Unite HERE’s eyes, the architect of that shotgun merger was Andy Stern, who reportedly was also representing Airbnb in these preliminary negotiations about this deal.

Neither Airbnb nor SEIU had much to gain other than a couple of props and press releases from this deal, so it is no surprise that current SEIU President Mary Kay Henry, saw this as a distraction, and quickly went to current Unite HERE president’s Dee Taylor’s Las Vegas stronghold to, in all likelihood, get her hand slapped, apologize, and hope the whole mess would die like other things in Vegas. This was all much ado about nothing.

Unfortunately, this let’s-make-a-deal love affair between some unions and Silicon Valley tech operations is worrisome still. Airbnb doesn’t really have a labor problem in any classic sense, but something like Uber, the ride sharing app really does. In a recent court settlement on Uber, in exchange for pretending their drivers were not employees, Uber agreed to some vague language about being willing to meet with – or help create a forum – for associations of their drivers to discuss issues. Actual unions of Uber drivers have been in formation in Seattle and other West Coast cities. Was it a lawyer or a union advisor that thought these meetings and company “unions” were a good idea as anything but a union-avoidance strategy? Certainly, the campaign master and deal maker for Uber is someone with rich Democratic politics experience from the Obama campaigns and relationships with a lot of current – and former – union leaders. I would worry that Airbnb might have been a Trojan horse for an Uber type problem, since too many are painfully fuzzy about the hard core anti-labor, job destroying, disruption philosophy that is the dominant ideology of Silicon Valley.

The next shoes that fall could hurt a lot more than this one.

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Payday Lending is a Huge Money Maker for Big Banks

111-2New Orleans The Consumer Financial Protection Bureau (CFPB) released a recent report in the United States with the boring title “Online Payday Loan Payments,” but despite that, wake-up, this is important.

The report is ostensibly directed at online payday lenders, and there’s nothing wrong with that; they need a hard look. Many of them have created a business model out of trying to skirt state regulations designed to at least try to reduce predatory practices. The Attorney General in New York got a lot of publicity by going after a gang of them, including some that were adding insult to injury by operating from Indian reservations to claim yet another layer of impunity.

Anyway the top line of the report got a couple of seconds of attention over the fact that based on the CFPB findings the average payday lending victim in addition to paying the vig on the loan and a host of other penalties and fines that lard up the total price of the repayment, also pays an average of about $185 over 18-months in bank charges when the lender hits their account for payment and hits the account dry. They found that the average overdraft fee for these desperate consumers was $34 a hit. The report, examining 2012 data, determined that the overdrafts and NSF (non-sufficient funds) were routinely triggered by the payday lenders and the banks:

“Of the average of $185 in fees, $97 on average are charged on payment requests that are not preceded by a failed payment request, $50 on average are charged because lenders re-present a payment request after a prior request has failed, and $39 on average are charged because a lender submits multiple payment requests on the same day.”

The report also illustrates how this collusion of payday lenders and banks stubbornly victimizes the consumer. CFPB found that normal collections succeed 94% of the time, but of the 6% that fail, when the lenders keep hitting the account multiple days, 70% fail on the second hit, and subsequent hits or re-presentations, as they call them, bounce even higher and harder. Often in fact they found that they only succeed because the bank covers the hit, incurring yet more charges to the consumers. It’s kind of a surprise that they found about one-quarter of consumers with a payday loan had their accounts closed within a one-year period, because for banks this was a cash cow. They likely only pulled out because they couldn’t get any more blood from these stones.

If you wonder why banks have deserted the business of low-level consumer loans, the picture becomes clearer with this study: they make more with less risk by fleecing the customer on the overdrafts and NSFs, thanks to their buddies in the payday loan business and their computer programs. Although the CFPB work studied online payday lenders, most payday lenders require automatic account deductions for their payments as well, so it’s really the same mess, just with a physical address.

Studies in recent years by the FDIC found that banks make over $17 billion from overdrafts and NSF charges. The big three banks made more than $1 billion just between themselves. Besides making money from payday lending on the front end by loaning the money to the payday lenders to re-loan as predatory as they can get away with, banks are exploiting their victims with their partners help on the back end with these charges.

At the least we need to stop the pyramiding of fees and force the fees to represent real costs to the banks. Furthermore, when someone’s account runs dry, why allow them to keep going back to that well, unless it’s to lard on more fees. We also need to make all financial institutions come clean about how much they have their hands in these rip offs of cash-poor low and moderate income families.

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Magic Math Won’t Beat Money In-Hand on Airbnb Urban Battles

Wall Street Journal 2015 numbers

Wall Street Journal 2015 numbers

New Orleans    Airbnb, Uber, Twitter, Facebook, whatever, you pick what new phone app-driven techno billionaire wannabes, you worry about, and I’ll pick mine. Deep in your heart, you know Uber is taking advantage of its drivers and ripping everyone off on taxes and Social Security, but perhaps more deeply, the taxicab industry seemed be asking for it. Airbnb is worrisome in a different way, but once again, who can defend the low-wage, tip-based exploitation of workers that is at the heart of the hotel industry, especially in a city like New Orleans where the hospitality industry drives the economy, making the per capita income for the city among the lowest for the largest one-hundred cities in the United States.

All of which brought me to watch and listen to an interview being organized by the Lens,  a local internet news operation, that was billed as an opportunity to get at the heart of the controversy. Sadly, the reporter was interviewing a stone cold anti-advocate, and that’s fine, here we defend advocates of all stripes and sizes without reservation, but he was so confused about whether he was a reporter or an advocate himself with his own axes to grind, that there were nothing but softballs thrown, and no challenge to even the most preposterous comments. That’s life, sometime we win, and sometimes we lose, but we still have to show up, and I did.

I also learned some things inadvertently that were disturbing and, unfortunately, convinced me that Airbnb, come what may, is going to win most of these fights wherever it goes. The unassailable proposition for the anti-Airbnb folks is that no one wants to wake up one day and find that their block is now populated by revolving door mini-motels. On that we can probably all agree, but after that, when the fur starts flying, we’re going downhill trying to hold Airbnb in check, and that’s not just because there’s no clear target or face of the enemy like there is in most corporate fights, but it doesn’t help that the dividing line of the anti’s is also against many of their own neighbors, who aren’t running underground motels, but are renting out spare rooms from time to time.

Where the anti’s are going to fall hard is trying to use magic math to fight the company against its promises of cash on the barrel to money-starved cities, like New Orleans.

The tripping point that catches anti’s is that they start their argument against the company around the lack of data, and then use fabricated data to make their case. That’s not a winning tactic! In thirty minutes, I heard wild claims that Airbnb folk make $250 a night: heck, hotels in New Orleans don’t even do that well! People pretended that folks in the French Quarter have not bemoaned the “loss of neighborhood” for the last 50 years or more, which certainly they have. Some claimed bed-and-breakfasts were upright, licensed taxpayers, which has been an issue in the city – and with the hotel industry — for decades. And, the notion that a huge part of the city’s population hasn’t tried to rent out spare rooms or whole houses for Mardi Gras, Jazz Fest, and Super Bowls in New Orleans since before smartphones or apps were even invented is just crazy. Couple that with the common knowledge that Katrina doubled rents – and housing prices, and they have stayed that way, especially in unflooded neighborhoods, and no one sober is going to believe that it’s Airbnb that has accelerated gentrification and pushed many affordable units into the stratosphere. Mix all that in the gumbo with exaggerated claims based on a Brooklyn-based website called Inside Airbnb on the number of properties and the percentage that were full houses, and what do you have?

A lot of this magic math falls apart if anyone takes the time to actually see how Airbnb works. The listed or hoped for price, is not the same as the price someone gets if they book a guest. Furthermore, if anyone monitors this, the prices have gone down because Airbnb now gives recommended prices that often differ from the “list” price, just like hotels do, obviously. Furthermore, it seems almost anyone who wants to list a place with more than one bedroom in a funny twist of the Airbnb system, almost has to list the property as a full house, throwing off all the so-called statistics yet again. In our coffeehouses we see a lot of younger people, and we are located in some of the “hot” neighborhoods in the city. There’s no question that anyone who thinks that they might have even a shot at having a guest, lists with Airbnb, but talking to many of them, even if they are part of the “listed” statistics, they have never had a paying guest in over a year.

Meanwhile, when Airbnb offers a city a “deal” that they will collect the taxes on actual rents, slap on some rules, and turn over the money every month, who believes they won’t take it? The city ends up ahead with a minimum of expenditure on staffing and enforcement, which they are failing at anyway, especially when other, richer cities are reporting abysmal enforcement rates. That’s going to be a hard argument to beat with magic math, exaggerations, random stories, and finger pointing. To have a chance with something like Airbnb, we need an “app for that” works better than yelling that the sky is falling.

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Corporate Impunity, Shareholder Farce

062314-nabors-industries-ignores-shareholder-votes-cartoonNew Orleans   I love these big, fat whoopers that the big corporate whoops stand and piously tell about working for their little shareholders, pensioners, and old ladies in Des Moines, especially because it is crystal clear that if they don’t treat these publicly owned companies as private preserves, they are only accountable to the big hedge funds and institutional investors. This is the season when they start rolling out their annual reports on performance over the last fiscal year and pretending that there is some kind of shareholder “democracy.” What a hoot!

It’s the season when shareholders get to try to vote and be heard. An interesting article the other day went through the list of some of big companies where CEOs and directors routinely ignore the votes of the stockholders. Not surprisingly Oracle, the computer and software company, was listed as a prime example where its CEO and big shareholder, Larry Ellison, always among the ten richest billionaires in the world, and often a leading figure on any lists of overpaid executives, is the big dog. Shareholders there have voted multiple times against the compensation program and the inflated pay packages, but their votes are ignored so the good times can roll.

The myth is more important than the reality when Wall Street pretends they are accountable to shareholders. It’s another example of democratic farce before tragedy. Meanwhile conservatives wonder why “little” shareholders have left the market. In some ways the answer is simple: casinos have now created more gambling options closer to home than Wall Street.

Not that they really care.

Simple things like a company’s annual reports, a rare piece of business journalism requiring special skills for the initiated to plow through the numbers hidden in the marketing and promotion, is no longer required to be sent to individual holders. Instead they get a notice that tells them that the report is done and the annual meeting is coming, but if they really, really want a copy, they can go on a website and see if they can request one, and just maybe it will be sent along. I bet we can almost count on one hand the number of people who will go to the trouble. Meanwhile, they want the shareholder to vote for their slate of directors and follow the directors’ instructions on other ballot issues.

Actually Vegas probably does a better job at regulating gambling than the SEC does. In Vegas it’s important for the punter to believe that there is a fair deal and that the game is not fixed by the house. With computer trading, Wall Street machinations, and kid glove regulation by the SEC, no one will ever pretend that Mom and Pop little shareholders with a couple of shares of stock where they used to work isn’t playing in a rigged game that always favors the big houses.

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Affordable Housing Versus Any Housing at All

16th_m_post_card

http://www.sfbarf.org/pages/pictures.html

New Orleans    There’s starting to be an emerging pressure confronting housing activists and organizations, or so it seems: the fight between affordable housing versus any housing at all. The fight is particularly pronounced in the “executive” cities where most people can no longer afford to live, like New York, London, San Francisco, Vancouver, and the rest, but it also is being waged neighborhood to neighborhood under pressure of gentrification.

A recent article in The New York Times featured a self-proclaimed anarchistic, contrarian voice from San Francisco called BARF, the Bay Area Renters’ Federation. Yes, they thought the name was funny. These activists, what can you say? Essentially, they had adopted a position in the desperation of the situation in San Francisco that was essentially “anything goes,” as long as it means more housing, affordable, luxury, whatever. Longstanding tenant organizations in San Francisco called BARF, the “Tea Party” of housing groups in the city, which pretty much defines a “how low can you go” put down.

There may be worse though, and I stumbled on these notions reading a column in The Economist reporting some of the bright ideas that economists have. This is The Economist though so don’t be surprised that the argument starts from a position, similar to BARF, that development is good, and even alleges that everybody loves development, the problem is that no one wants it where they live, they want it somewhere else in the city.

Nonetheless, the ideas were, to say the least, novel. One was a straight “pay to play” proposition. Developers wanting to build in a particular area where they might counter community opposition would offer to pay neighbors in the area in cash money for the inconvenience and upset they had about the development. The exchange there was almost the equivalent of paying for “mental anguish” or some such. Taking it a logical next step though, neighbors willing to have their silence or support bought could also try to trade their position for whatever they believed the loss of value in their property might be.

In some ways this proposal isn’t so novel. Forever big developments in rural areas have bought out landowners wholesale to split communities. Developers reportedly buy out tenants in cities where they have protected leases in order to redevelop buildings in “executive” cities now, so what may seem on its face absurd, actually may be a more common practice than we realize. Many so-called neighborhood associations are so dominated by local real estate interests and individuals that it can be hard not to see them already as developer lapdogs. And, of course, when politics and money mix, this kind of business is also routine. The Mayor of New Orleans in a pique over a competing developers complaint that another developer won a bid to deal with a city building, is trying to get legislation through the state that would force any litigator in the future to have to put up a bond for the lost revenue, etc, etc, etc. You get the picture.

Another unique proposal offered was a sort of community “blackmail.” If a neighborhood fought a development in their area, essentially an ordinance or statute would require them to support a development elsewhere in the city of equivalent value and impact. The premise behind the proposition is, once again, that all development is good and beneficial, any opposition is narrow and selfish, so if you protest, you eventually pay the piper and have to saddle up to screw another community elsewhere in the city. Either way, the one thing that is certain is that the development gets built.

We might think some of these proposals are just ridiculous, but doing so is at some peril. Take a quick look at the political contributions in virtually any city for the municipal officeholders, and usually you will see the who’s who of all the local and many national developers lining up with cash, usually for candidates on both sides in the election so that they have markers down on all the candidates, as well as of course the eventual winner.

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UK’s Unite is Another Case Study of the Difficulty of Union Transformation

005-15-reasonsNew Orleans    Unite is the largest union in the United Kingdom with almost 1.4 million members launched a brave and exciting experiment four years ago to organize the unorganized. In this case it was not the unorganized who were workers, but the unorganized in communities. They established Unite Community with minimal dues (50 pence or about 75 cents per month), hired or assigned ten organizers, one to each region of the union, and set about building local chapters around a host of self-directed issues. Now, four years later, they have about 10,000 members, more or less, in over 100 branches around the country, so perhaps it’s time for a good look, and luckily they allowed University of Leeds professor, labor expert, and community activist, Jane Holgate, a front row seat and access to their process and people to evaluate, academically, their progress.

Professor Holgate’s analysis is tentative and still a work-in-progress that she is sharing with colleagues and graciously allowed me to also take a peek, having been an advocate and organizer of many of these union-community amalgamations. Even tip-toeing around her early conclusions, being a cheerleader for Unite’s efforts for better or worse, and not wanting to step on Professor Holgate’s toes, her work, when it is finished, is going to be something organizers, and, perhaps even more importantly, union leaders will want to read and study closely if they are serious not just about community organizing, but the duty of transforming unions to meet the difficult challenges for our organizations in the 21st century.

At a fundamental level a look at Unite’s experiment with Unite Community and community organizing is an example of the organizing principle I’ve often argued that “the beginnings prejudice the ends” in organizing. Professor Holgate makes the case, as she has in her past work that a union has to be clear about its purpose. She invokes earlier work that positions a union’s identity between market, class, and society that synthesizes its ideology accordingly and informs its internal and external practice. It seems simple and obvious to say, before a union – or any organization – can transform itself, it has to understand who and what it is and what it is trying to do, but that doesn’t understate the importance. Furthermore without an operating consensus on these issues that aligns leadership and staff, especially in the complex bureaucracy of large organizations, the success of any new project, particularly one that would be historically unique and potentially transformative, would be difficult to achieve.

Having met with Unite’s leadership and staff on this project, I would say that they have found real utility in Unite Community, but it has been grafted to the union as an appendage, rather than integrated fully, thereby lessening its value immensely and leaving its future somewhat confused and uncertain. Professor Holgate finds this separation of the community project from the basic worker organizing operation equally stunting, and makes a more important point from her closer perspective that the inability to fully integrate the membership of Unite Community with the larger Unite membership has been critical. Though she is not ready to say this yet, a reader would conclude that this problem could be terminal to the project, and at the least means that even if the community efforts were successful and continued robustly, they would not be transformative in terms of the union’s identify, practice, or future.

Normally, I would say, none of this is fatal, and that Unite – and other unions – might learn tons from this work and allow it to be another building block in the critical transformation that has to happen. Unfortunately, Holgate anticipates my Pollyannaish hope here by noting, too starkly for me to avoid, that the separation of Unite Community from the rest of the organization, means that there has also been little “learning,” as she calls it, throughout the union. Sadly, I’ve reflected similarly on how much we have learned as organizers from work we have done with Walmart, hotel workers, and labor-community alliances in the past, and how we have often failed to effectively communicate the lessons or have them stick sufficiently to influence leaders and organizers later, so, what can I say, but here’s hoping. We have no choice, but to try and try again, lest these organizations all die on our watch.

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