Tag Archives: employment

Workers and Bosses are Caught in a Reopening Catch-22

Pearl River     In the United States when dealing with a program that is touted as a lifesaver for what will likely be fifty million unemployed workers and another program that is designed, ostensibly, to help small businesses retain their workers, we all know the topline horrors.  For workers, the stimulus checks are still on their way and estimates have 50% more workers trying to get unemployment than have succeeded, making thirty million applications received by the states with their outdated technology and draconian rules, the “lucky” ones.  For small businesses, websites crashing and a first-come, first-serve policy that favored banks and their premier customers, who were often anything but small business, has been a scandal in both the first and second rounds.  As various states and cities begin to now reopen, we are about to confront even more devils in these details.

The stimulus gives those workers unemployed through layoffs and furloughs triggered by the coronavirus an extra $600 through the end of July, another full three months.  No question, that’s a great thing.  In fact, because so many state benefits are so meager, and wages of the vast majority of service workers in the early cohorts of the unemployed are paid such miserly wages, in two-thirds of the states, a worker will be making more money on unemployment with the supplement, than they were making while working.  For minimum wage workers, many will be making double what they were making by not working.  Conservatives will be gnashing their teeth and rending their clothes for years when, and if, this is ever over.

In our union, Local 100 United Labor Unions, we’re already seeing the first signs of this conflict, even before reopening in most of our geography.  A worker laid off from a workshop facility for the differently abled was called back to a community independent living facility run by the company.  The commute was longer from her home.  She didn’t have a car.  The employer accommodated, saying, come to the center, and we’ll provide you a car.  Her workshop is unlikely to open until the fall.  She wants the job in the by and by, there’s a depression after all, but there’s no doubt that she’s done the math and would love to find a way to not have to go back to work.  Maybe the boss will give her a break.  Either way, this is not a grievance.  In fact, i

n Louisiana, Texas, and a bunch of other states, if she doesn’t return to work, she would be disqualified for unemployment, and then she’s really stuck.  If it weren’t for the fact that this will happen to millions of workers, if the employer gave her a break, the state could either prosecute both for fraud if she kept getting benefits or force her to pay back the money.  Texas is already leaning on employers to notify them of workers who refuse to return.

Many of these companies and other smaller operations will be getting Paycheck Protection Program monies from the government.  They are the lucky ones, but the primary requirement is that 75% of the money goes to retain and rehire workers with only 25% spendable on a short list of other bills.  The money is a forgivable loan, but to be waived, the employer has to spent all the money within two months.  Working with some employers we have been able to negotiate essentially premium or hazardous duty pay that adds more than one-hundred bucks in wages and a bonus of $1000.   Others are resistant or are less sure of winning the PPP roulette.

A certain collision is coming.  Bosses have to get workers to come back to work in order to not payback their PPP money and get their businesses back in operation. Workers are both scared of coming back with inadequate protections and have done the math and know that they will make more over the next three months not working than they will make going back, taking the risks, and making the boss happy.

In this kind of gamble, the only safe bet is with the house, and that means that workers are likely to lose both going and coming.

2020 State Minimum Wages

Raising Minimum Wages, Good So Far

New Orleans       While much of the country is stuck at the level of the federal minimum wage, there are enough states and cities that have nudged the numbers up that economists and others are starting to be able to tell with certainty whether the competing claims are correct.  Opponents argue that raising wages above plantation level reduces the number of jobs.  Proponents, and I’m in that number, have claimed that the benefits of increasing wages, lowering inequality, and putting more money into local economies, wildly offsets any small job loss, if in fact, any jobs at all are lost.

Arindrajit Dube, an economist at the University of Massachusetts at Amherst, did a study of state minimum wage increases in California, Oregon, Washington, Colorado, Massachusetts, and New York.  These states had bumped up the numbers in recent years to at least $10.50 per hour through 2018.  The impact would have been directly felt by 20% of the workforce, not counting the multiplier impact of increases for other workers in order to prevent compression of wages causing non-minimum wage workers to feel crimped and resentful of the increases.  Professor Dube found that the job losses were minimal, although not painless.  He found that some businesses raised prices, others improved production methodology, and some actually absorbed the increases by reducing their profit margins.

All of this is good news for our case.  Additional studies in New York State, as well as reporting by the New York Times, seem to confirm that even in the border counties between New York, with an escalating minimum wage now, and Pennsylvania still stuck at $7.25, there were minimal adverse impacts for workers on job losses.  Obviously, it helps that the economy has been good and unemployment low, making this an ideal time, economically, to push wages up from the bottom.

In the days of ACORN’s living wage campaigns, we have gone back and forth over the years with Professor David Neumark, an economist at the University of California at Irvine, who has long studied minimum wage impacts on workers.  He cautions that the results in these relatively higher wage states might not translate in the South “where low-wage workers aren’t evenly distributed across industries and ‘you have fewer and fewer avenues of adjustment.’”  Since there’s absolutely no immediate danger of Southern states getting the raise wages religion for workers, it will be awhile before we have to struggle with this problem.  Meanwhile we are forced to live through the galloping gap between lower wage and higher wage states that is occurring with no action on the federal minimum wage, meant to cope with this problem.

Now, if only the reason that wages weren’t rising was based on the facts, rather than stone cold ideology, we would be in good shape.