Precarious Employment Spreading in USA

working-at-living-croppedNew Orleans       Unstable and precarious employment and income is something that every union organizer in labor unions involved in the service sector recognizes as a daily fact of life for workers.

In Walmart, 1o years ago, just as it is today, we organized Walmart workers in Florida against the computer scheduling from Bentonville, Arkansas that would take them from 40 hours to 24 hours to 16 then back to 32 and anywhere they felt based on their algorithms.

In nursing home, home care, mental health centers, head start work, childcare centers, schools, and countless other service sector work, our members and other workers live with seasonal work, and sometimes no unemployment benefits, standard shifts are often 35 hours or 32 hours, and with the pressure of the Affordable Care Act mandate dipping below 30 on an average to escape payment.

Now new reports are coming down on us like a hard rain as others discover and document this increasing precariousness.

· A 2012 study by government and university economists found that “household income became noticeably more volatile between 1970 and the late 2000s” despite a period of “increase stability throughout the economy as a whole.”
· A 2013 Federal Reserve report according to the New York Times, “suggests the problem has not only persisted as the economy recovers, but may even have worsened. More than 30 percent of Americans reported spikes and dips in their income. Among that group 42 percent cited an irregular work schedule; and additional 27 percent blamed a span of joblessness or seasonal work.”
· U.S. Financial Diaries has released an in-depth report on low-and-moderate income families and finds that almost all of them “experienced a drop in monthly income of at least 25 percent in a single year.”
· There are now 7 million people working part time in the US who indicate that they would prefer full-time work but can’t find it, accounting for 4.5% of the workforce, almost double the figure before the recession.

Given this internal, hidden inequality it should not come as a surprise, as organizers also find routinely, that many lower income, lower waged families view financial stability as a higher priority than higher wages or advancement. The bird in the hand can be eaten, while the bird in the bush, no matter how close, can easily disappear leaving the family in bad straits.

Is there a plan? No way!

In fact, a Department of Labor study of the records of 300,000 minimum wage workers in New York State and California found that employers routinely short pay 3.5 to 7% of all such workers. Extended and supplemental unemployment benefits have been caught repeatedly in Congressional deadlocks as well. Families caught in these crises are then caught in cycle of dependence on our families, relatives, predatory loans, and whatever it takes to pay the bills.

Are we responding by organizing these workers aggressively? Not so much.

All of which indicates that this is a mess that stands to continue to worsen since there still appears to be no light at the end of the deep tunnel where so many US families are currently falling.

Raising Retirement Age is the Poor Subsidizing the Rich!

New Orleans   Before complacency sets in and you pinch yourself and say, “Hey, I’m feeling ok, I can make it some more years, so if they cave in and let the Republicans raise the retirement age, maybe it’s no big deal,” you need to pinch yourself harder where you keep your wallet or pocketbook and remember that those extra years really may be a matter of little more than how much money you have.  A story recently by Michael Fletcher in the Washington Post brought the numbers all back home.

            All of the talk about how we’re living longer so we should shore up Social Security by stretching out the retirement age is based on a myopic view of class status.  Listen to this:

“’People who are shorter-lived tend to make less, which means that if you raise the retirement age, low-income populations would be subsidizing the lives of higher-income people.  Whenever I hear a policymaker say people are living longer as a justification for raising the retirement age, I immediately think they don’t understand the research or, worse, they are willfully ignoring what the data say.’”  Maya Rockeymoore, Global Policy Solutions.

The Social Security Administration in a fairly recent study Fletcher cited found that life expectancy for male workers had gone up 6 years in the top half of the income brackets but only up 1.3 years in the bottom half.   In the last 30 years as income inequity has accelerated the gap in life expectancy based on income, according to the Congressional Budget Office, has risen from 2.8 years to 4.5 years for the rich.

Eric Kingston of Syracuse University and co-chair of Social Security Works, which opposes reducing the old-age benefits, makes the great point that the income gap of life expectancy it “…would mean a benefit cut that falls heavily on people who generally are most reliant on Social Security for their retirement income.”  He added unnecessarily, “It is totally class-based.”  Amen!

In fact according to Health Affairs, Fletcher cites the fact that “in half of the nation’s counties, women younger than 75 are dying at rates higher than before.”  This is true particularly of lower income white women, and women in the rural South and West, where poorer women are getting worked too hard and hung up wet.

When the subject is Social Security, the pencil pushers working for the richer “haves” are literally killing us at the lead point of their budget discussions.  This is neither right, nor fair, to working people in America who should have the right to retire with the same dignity that they tried to live.

Protecting Insurance Company Profits under Obamacare

New Orleans   I had to read the article by Robert Pear of the New York Times  three or four times to completely understand the contradictions that now seem to exist under the new Affordable Care Act or Obamacare.  The headline said, “Employers with Healthy Workers Could Opt Out of Insurance Market, Raising Others’ Costs.”  What’s the issue here?

The article seemed to highlight a contradiction somewhere between the chicken and the egg.

Facing the requirement that employers with over 50 workers mandatorily have to provide health insurance by January 2014, some employers who are not currently providing insurance are initiating plans to do so.  I thought that was a good thing and how could it be anything other than a social benefit for the workers.

Some employers with relatively healthy and presumably younger workforces are initiating self-insurance plans rather than paying the exorbitant and escalating prices of private insurers.  The Township of Freehold in New Jersey with 260 workers began self-insuring and said, “We expect to stabilize our rates and keep the money we save, rather than giving it to health insurance companies as profit.”  That sounds exactly right to me.

In fact thirty years ago that is exactly the “what” and “why” of what ACORN did after a premature baby skyrocketed the group coverage rates from Liberty Mutual to unaffordable levels.  We moved to create a separate fund fueled by the same contributions we were making to Liberty Mutual and paid out at the same standards they had used.  We bought stop-loss coverage on the health fund against the re-occurrence of catastrophic claims and then several years later converted the plan to a Taft-Hartley multi-employer fund for various reasons.  That fund paid for a score of children born to the staff and handled a raft of serious claims successfully until it went out of business with ACORN.  We could do that largely because the initial group being insured was relatively young and the fund was allowed to grow with steady contributions as the organizations became larger and some of the group got older.

It seems this is now a problem.  The concerns Pear was reporting were that small employers with younger workforces would do just as ACORN did, begin self-insuring and buying stop-loss coverage.  Huh?  Isn’t this still a good thing?  The companies were not offering insurance and now are providing their workers with health care.

One issue raised in the article was that stop-loss insurers are regulated differently under the law than other insurers so that they can decline coverage to groups where they assess the risk as higher.   In my way of thinking that means that they will be forced into the pool with everyone else.  So what’s the problem?

The issue seems to be that too many relatively healthy groups might go outside of the private insurers’ shakedown game and therefore reduce their profits.  If it became a movement for the healthy groups to go rouge on the insurance companies, then costs might rise and profits decrease for insurers because their groups are a little less healthy, according to this theory.

I’m not sure that this is actuarially the case or simply some Cassandra screaming.   Many companies and employers don’t want to manage their own programs and pay the premiums to make this someone else’s problem, which the insurance companies are glad to handle.  Self-insurance and stop-loss programs are not for the faint of heart, I’ll assure you.

We could have solved this with a single-payer system rather than one dominated and managed by the private insurance companies.  Now this article claims the insurers may press for restrictions on self-insurance in order to continue to line their pockets.

Come on, man!

Shore up Social Security: Remove Payroll Tax $113,000 Cap!

New Orleans    Eventually reading all of this point, counterpoint baloney about the fiscal cliff, debt ceilings, bankrupt social security system, and national debt just makes your head hurt.  It’s at that point that you start stumbling around and miss the simple things, like this:  “Why in blue blazes is there a payroll tax cap on wages at $113,000 now?”

It was hard to miss the fact that regular working stiffs and pretty well paid swells up to the 6-figure level were all going to return to paying 2% of their share of Social Security payments.   The math is easy on this.  A $25,000 per year worker will cough up another $500, a $50K worker over the median wages in the USA, will pony up a another cool grand, and a solid executive in most businesses or longshoreman or autoworker with overtime making $100,000, will once again pay another $2000 in order to have real Social Security benefits when they are older.  I had to warn most of the folks that work with me about the share they should expect would once again be missing from their checks in 2013.

There are some things that are not so easy to explain.

The first is this cap on payroll taxes at $113,000 making these social security contributions even more regressive.  By regressive I mean that salary earners making over $113,000 will pay a smaller and smaller percentage of their annual wage in contributions, as will their employers, compared to what they make.  Once again simple math says that if your share of the Social Security contributions is 6.2% of $113,000, you will pay $7006 per year as your share of this government retirement benefit.  If you make $400,000 then you will still only pay $7006, so what was 6.2% of your income is only 1.75% at that level.  Like I said, regressive, making this another windfall for the richer!

The second is that despite all of this whining and carrying on about Social Security running out of money, if the cap did not exist, then conservative estimates (I’m talking Fox News numbers for cryeye!) say that it would raise $1.3 trillion or more over the next 10 years.  That’s $130+ billion a year sports fans, which ought to silence some of the Social Security Cassandras out there.

The third is wonder why Social Security, which is paid for exclusively by employee and employer contributions is conflated by the Republicans and way too many Democrats as if it were a federally financed entitlement, which and somehow connected to the national debt, none of which is true in the least.  This isn’t an apples and oranges confusion, this is the outright equivalent of a political P.T. Barnum stunt of trying to fool a certain gross percentage of the public a disgusting amount of the time.

And, given that is exactly what is going on, fourthly, what gives them the nerve to think that they get to raise the age for workers to access the benefits after their lifetimes – and their employers – making contributions towards their retirement, just because they want to grease their own palms with more campaign contributions from their higher earning 6-figure friends?

Let’s left payroll tax cap, make the system more progressive, and see how much of a problem, if any, we have with Social Security then, and onto to some real problems next.