Members of Unite Here Local 11 in the Los Angeles City Council chambers on Tuesday before the Council voted to increase the city’s minimum wage from $9. Credit Jenna Schoenefeld for The New York Times
Little Rock Lower wage workers might not be reading the paper, but it won’t take long before the word gets to everyone that Los Angeles, the nation’s second largest city, just took a giant leap forward by almost unanimously passing an ordinance to raise wages from $9 per hour where they stand now to $15 by 2020. They join Seattle, San Francisco, and Emeryville, California in the Bay Area in moving the needle forward. For some, and maybe for many, this could be a game changer.
Besides raising wages, the LA move knocks down some other barriers as well. The wage is indexed to inflation so even after 2020, it will “keep giving” and stay up with the economic times. There might just be a knife, or at least a pinprick, as well in the heart of the tip-regime for servers, which would be huge in changing the culture of the workplace for restaurants, coffeehouses, and similar locations. California is one of a minority of states, eight to be exact, that do not allow a sub-minimum or tip-credit wage, so literally all boats will rise to $15, rather than just some. The restaurants are already whining that they want to be able to add a “service charge” to help pay for the increase, and if they are successful, that will be an even deeper plunge into the heart of the servile versus service tipping culture, because the customers will get the message even more clearly that they are being asked to directly pay the wages of the restaurants’ workforce. Only the rich and Hollywood big spenders are going to willingly agree to essentially pay twice. This is almost as exciting as living wages!
Will it cost jobs? Will it raise prices? My answer would be “maybe, but….”
Most studies have established that the job loss numbers will be minimal to marginal. In places dominated by the service industry, they can’t move, so they have to stay where the customers are. In other lower wage jobs, like small manufacturing, warehousing, and the like, most of them have already moved out of Los Angeles into the Imperial Valley or Nevada where land costs are cheaper. Others need to be close to the port corridor so for them it’s location, location, location as well. The more interesting question for Los Angeles and other cities that take the plunge will be the impact on “wage compression,” as it’s called: will wages between $9 and $15 also push up towards the $6 number in coming years in order to hold onto valuable staff that are now being paid $10, $12, or $14 and told to like it and they’re lucky not to be at $9? This will be an important and interesting fight for labor in Los Angeles, so well worth watching.
That’s jobs, so how about pricing? The nice thing about an area-wide increase like this one is that everyone is in the same stew, so there is no competitive disadvantage to raising prices to reflect real costs as opposed to the problem that places like our own Fair Grinds Coffeehouse face. The fact that we are fairtrade only and therefore pay a premium for our coffee that is many multiples higher than all of our competition does not mean that we can charge the true price for a cup of coffee. In Los Angeles, prices will rise to some level, but luckily they are rising in reaction to wages, rather than this being Buenos Aires where prices are rising and wages are stagnant. We could all live with this and in fact the New York’s, Sydney’s, London’s, and elsewhere that prices seem sky high while people continue to stream in prove something as well.
The Lakers and Dodgers might not be all that anymore, but the Los Angeles City Council is a team worth watching and rooting for!
Dallas Moving around Texas from place to place between Beaumont, Houston, and Dallas and beyond is a reminder that, like India, Texas is a separate planet in the global universe as well, and on this trip, I’ve compiled more and more evidence of this strange set of phenomena.
Take for example the big humbug in Washington about the renewal of the Export-Import Bank which now turns out to be all over the airwaves in Texas as well. Delta Airlines and some number of Republican Congressman are foaming at the mouth wanting to put an end to this bank because they argue it is giving advantages that are helping their competition. In Delta’s case, they don’t like the intrusion of some of the new Middle Eastern carriers and the fact that the Export-Import Bank is helping these airlines with loans to buy from US-aircraft manufacturers. Are you still following me? Well, all over the radio in East Texas were ads about the thousands of Texas jobs that were going to be lost without renewal of the Bank. The kicker was that the ads were being paid for by the United States Chamber of Commerce of all people, and if the Chamber isn’t the best friend of the Republican Party, no one is, but there you have it. Is this a falling out among thieves?
On the other hand one of the more unique messages I heard between Houston and Dallas was an ad for $10 per month “firearm protection” insurance. You might wonder, rightly, what that might be. Well, the lady said that in Texas we know we have to protect our families so we have firearms and cherish the right to use them. The “firearm protection” insurance is what you would need if you actually used them and the person you killed or wounded sued you for your error in aim or judgment. This insurance would somehow protect you, your family, and your business according to the report when you exercised your “right to bear arms,” and hurt the wrong person. Land of the bizarre or what? Meanwhile the next item in the news involved a motorcycle gang that was cancelling the 18th edition of its rally in a local county, because they were involved in the bloodshed of contending motorcycle gangs in Waco recently. The sheriff said that the head of the gang had called him and both were regrettably shelving the rally because there’s “bad blood” everywhere now. I guess the gangs need some of this firearm protection insurance?
We helped on the original HOPE organizing drives to unionize city workers in Houston in a joint project between SEIU and AFSCME almost a decade ago. Recently they traded out their partnership in HOPE for a group of workers in Colorado. Long running SEIU advertisements in the Dallas area for organizers to mount of drive among city workers there are no longer on the listings. It seems SEIU may have had enough of public employees in Texas. I wonder if gaining close at hand experience with the strange planet of Texas hasn’t sent them running?
Texas is always an experience, but admittedly, it’s not for everyone!
Houston Seven years after the wheels started coming off the bank’s mad money train, it seems clear that settlements for mortgage abuse, which is euphemism for fraud, Dodd-Frank legislation, and what should have been the awesome weight of having collapsed the US and world economy and upended the lives of millions, have essentially been water off a duck’s back for the banking industry and Wall Street.
Let’s just tick off a few recent cases in point.
The City of Los Angeles, yes, not the Justice Department, SEC, or Federal Reserve, sued Wells Fargo for pressuring employees in its retail bank with sales quotas to fraudulently enroll people in new customer accounts without their approval. Plain and simple, shake and bake, no permission needed.
Two big banks rather than settling for some hand slaps and big fines, Nomura, a Japanese bank, and the Royal Bank of Scotland, both presumably figuring their home country customers probably didn’t give much of a flip about whether or not they had packaged bad mortgages in the USA, went to trial claiming the dog-ate-their-homework, the economy did it, not them. The judge found against these miscreants and essentially said their behavior was disgusting.
And of course there is the whole cabal of banks that engaged in price fixing and chicanery to fudge the LIBOR rate for interbank and corporate lending including HSBC, JP Morgan Chase, Citi, and a rogues’ gallery of the biggest banks in the world. Their fines are in the billions, and reportedly they are going to finally have to actually plead guilty as institutions.
Many have argued that part of the problem was the legal double standard that found law enforcement playing paddy cake with the criminal enterprise that banking has become rather than prosecuting them aggressively from the top down. If anything was administered more than simple detention, it was from the bottom-up. The bigger the guy at the top of the bank, the bigger and more obscene the paycheck continued to be.
More proof that bad behavior and thuggery is the norm in banking is emerging in a new study as well. According to the Andrew Ross Sorkin at TheNew York Times,
“...about a third of the people who said they made more than $500,000 annually contend that they ‘have witnessed or have firsthand knowledge of wrongdoing in the workplace.’ Just as bad: ‘Nearly one in five respondents feel financial service professionals must sometimes engage in unethical or illegal activity to be successful in the current financial environment.’”
Such statements take your breath away. Not only has it not gotten better, it may have gotten worse! And, the President wonders why Senator Elizabeth Warren is willing to go to the wall on a trade bill that had hardly interested her until she noticed the language leading her to believe that it would allow even more transnational banking criminality?
There oughta be a law, but there probably are plenty of them, just no one seems to care, and the party goes on, and we all pay for it.
Vinod Shetty of ACORN Foundation of India and the Dharavi Project
New Orleans In one of those rare and marvelous coincidences, I had foregone my annual trip to Mumbai, because Vinod Shetty of ACORN Foundation of India and the Dharavi Project was amazingly going to be in New Orleans when I returned, giving us days to catchup on events there and elsewhere in India.
Invariably at the Fair Grinds Coffeehouse Dialogue and elsewhere, the subject would come around to Prime Minister Modi’s first year in office and the prospects for the country in the years to come. Shetty could not have been more pessimistic or clearer in his continued warning of the dangers to come under Modi as his increasingly rightwing, conservative BJP party continues to consolidate power.
As a lawyer or advocate who practices still before the Bombay Labor Court, Shetty said that in meetings he had attended to discuss the Modi proposed labor law clawbacks of union and worker rights, even HMS, now the country’s largest union, and the union traditionally allied with the BJP as their patron, has been strident in arguing its case in opposition
to the changes. Shetty was convinced that not all of the package will be approved, but also believed that Modi and the government will be relentless in trying to erode these rights.The primary example is the state of Rajasthan, where many of these so-called reforms have already been implemented in modified ways where the state could act in areas not preempted by the central government. There, in order to allow layoffs in enterprises with 100 workers or more, Rajasthan had extended the severance payments from 30 to 45 days in exchange for eliminating the state approval of the layoff. The Modi proposal is to eviscerate protections for workers from redundancy below 300 in a workplace.
The message being sent by the attack on NGOs from the Modi government is essentially, shut up or starve.The clear objective of the government is to silence opposition to development and business wherever possible. The exceptional inclusion of action against the Ford Foundation is a signal in Shetty’s view to one and all that the government will only approve grants that are pristinely free of anything remotely like advocacy. Toe the government line or else!
Shetty predicts that underlying some of the government initiatives will be special emphasis on curtailing NGOs and other efforts by religious organizations of all stripes other than Hindu. The Modi record from Gujarat is frightening, and Shetty believes more is coming.
Meanwhile The Wall Street Journal accuses Modi of not moving quickly enough to force the coal industry to be more productive and efficient, citing numerous business interests throughout India, contrary to the hopes of environmentalists around the world who had thought they were seeing something different in the early signs from Modi. Others are
clamoring for a change in tax rules, a cutback in subsidies to the poor, and other radical changes.
Modi probably thinks that opening a front against NGOs and labor will be enough red meat to quiet his business backers demanding more radical changes, but for the Indian people none of this seems like good news to come.
New Orleans In Florida, there is a well-publicized breech between the Republican Governor and the Republican-controlled legislature over their budget shortfalls and the need to bridge the gaps by expanding Medicaid. The governor, Rick Scott, has gone to wild extremes of suing the federal government to try to force a change in the already settled matters of disproportionate share funding and blaming the federal government rather than adding Florida to the list of Affordable Care Act states. Scott believes the hospitals, desperate for more funding and some in danger of closing, are lined up against him.
Interestingly in Louisiana much the same Republican-on-Republican division has also quietly broken out over disagreements over budget gaps and health care needs. The legislative session is almost over, but rifts are huge. Governor Bobby Jindal is so dedicated to his ambition to fail as a Republican presidential candidate in hopes some other Republican will win and give him a job, that he has chained himself to the hospital door to prevent the expansion on Medicaid for the 400,000 uninsured in the state. Interestingly, the Jindal “no-tax” pledge of the state’s health to Grover Norquist has created devastating economic consequences in Louisiana especially with the cataclysmic dip in oil prices.
Public education is more popular in Louisiana than poor people or their health care, and the evisceration of the higher education funding under Jindal has also reached crisis proportions. In a slick political move in the funding chess game, House leaders, who are obviously disproportionately Republican decided to fund higher education – against the Governor’s budget recommendations – in the next year leaving the state’s health care system at least $200 million short. And, this starves a health care system that is invariably ranked near the worst in the country, and also threatens dubious agreements that Governor Jindal concocted with private companies to take over Louisiana’s public facilities. Another $33 million in state is also needed to leverage federal funds to finish building the new hospital facility in downtown New Orleans that was designed to replace the Charity Hospital, shuttered after Katrina.
Tellingly the Advocate reported that “…Capitol insiders said they believe House leaders left health care alone on a limb to create pressure for the Legislature to expand Medicaid…a proposal that Jindal and the Republican controlled Legislature have rejected so far.” The same report, referencing again unnamed “Capital insiders” added that they “…also suggested that House leaders left health care unfunded to cause hospital and other health care lobbyists to rev up their considerable sway to pressure anti-tax lawmakers to approve more tax measures.”
Regardless of what the Supreme Court decides about subsidies under Obamacare and any number of other issues, it seems the only thing stopping expansion of Medicaid, even among hardcore “hospital door” politicians trying to block health care for the poor, is political stalling and logrolling as Republicans try to position their “never Obamacare” positions with the desperate needs of their own health care systems and their longtime supporters and friends in their state hospital facilities with their deep community support and large payrolls. Last minute, Hail Mary, lawsuits and meaningless pledges to DC power players are not going to be enough to protect the ideologues from their own citizens and their needs. It seems the clock is ticking in our favor, if people can live long enough to make it.
This song goes out to a faithful reader who made the suggestion of posting this great video on the next blog about health care. Thanks Mike.
Delhi After eight days on the ground in India and two days in the air and endless discussions of the formally named THE STREET VENDORS (PROTECTION OF LIVELIHOOD AND REGULATION OF STREET VENDING ACT, 2014, which has become our primary organizing tool since formal passage and enactment on May 1, 2014, it was clearly time for me to read the full Act and understand the handles completely. This is where the promise and problems with the Act become clearer.
At most levels the Act is everything we had hoped – and said – in one market place after another and used effectively in the first year of its enactment. Where the licensing of street vendors had largely disappeared years ago leaving the vast majority of vendors technically operating illegally, the Act allows them a path to legalization. Key in paving this road is something the Act calls the Town Vending Committee, which is responsible for putting together the plan, surveying the spaces, monitoring the whole operation, and hearing potential grievances. These committees were to be appointed with some permanent members like the area’s medical officer and other governmental officials, but also members of the nonprofit community, local unions and associations of vendors. Most importantly the published bill specified that forty percent of the committee, including thirty percent women, would be composed of vendors themselves to be elected through a locally created procedure by their comrades.
The vending committees were all supposed to be up and running within six months of the Act’s implementation and have their work ready for primetime within a year after passage, and here is where we start to find the rough edges dragging. A year later most of the town vending committees have not been established, and the draft bill’s protections and process for forty percent vendor representation may not have emerged in the final form of the Act, leaving even more confusion and more responsibility in local Indian states and cities to freelance the process within the overall guarantees of vendor protection. The Act is also murky on what point the central government steps in to assure the rights if local authorities fumble.
The protections are real. There will be vending areas. The vendors will have a right to the streets, sidewalks, and other areas. There is a guarantee of a licensing process and some flexibility allowing there to be a number of licensed vendors up to a ceiling of 2.5% of the population of the ward, city, and so forth, which would allow legalization, identification, and protection against harassment.
The problems though are equally real. There is no definition of “public purpose” that would allow removal, even though there is a guarantee of alternate locations. The vendors’ protections are mainly familial on license transfers and the definitions require the vending be the primary income for the vendor, some of which doesn’t align with the realities on the street. The grievance procedure is silent on whether the vendor can be represented by his or her union, which is critical to us obviously.
In short, we have a rough handle which seems certain to force us into innumerable fights in order to translate the general protections into realistic and workable safeguards at the local level. The Act at best is a skeleton that needs to be fleshed out. It’s no wonder our union has been growing so rapidly in south India over the last year. Vendors can see the future with hope, but are realistic that without a union their chances at getting there in one piece are close to zero. To make this work for the vendors in any way, shape or form will take years and years of difficult battles place to place, space to space, town to town, city to city, and state to state.