I just heard Mr. Trump has nominated a man named Andrew Puzder to be the new Secretary of Labor. He was described in the Washington Post [Labor Department pick is a critic of $15 minimum wage, WP, December 9, 2016] as an executive of two fast food restaurants: Hardee’s and Carl’s Jr. The article called him a supporter for the Trump policy of “lowering taxes for corporations and the wealthy and loosening regulations for businesses can boost job creation” the standard slogan of Republicans for decades.
Several other comments outlined in the article stand out. First, the article said Mr. Pudzer is an “opponent of the Affordable Care Act, claiming higher health premiums have left consumers with less money to spend and hurt the restaurant business.” Apparently Mr. Pudzer prefers to have Americans eat hamburgers and french fries as a substitute for health care coverage since that will increase profits in his fast food empire.
However, Mr. Trump promised to create jobs so Mr. Pudzer might like to know that 28.4 percent of new jobs since 1990 have come in the health care industry. The share of America’s establishment employment in health care as published by the Bureau of Labor Statistics has increased just under 5 percent since 1990 to 13.3 percent of establishment jobs, both percents more than any other industry sector. The fast food industry has 2.9 percent of establishment jobs, up only .67 percent since 1990. If new jobs are the Trump goal, then health care is the best sector, not to mention the higher pay in health care than the low wage fast food industry.
The Washington Post article also quoted a previous comment of Mr. Pudzer that new overtime rules “add to the extensive regulatory maze the Obama Administration has imposed on employers.” The overtime rules are part of administration of the Fair Labor Standards Act. The current rules he ridicules were drafted by the George W. Bush Administration in 2003 specifically to eliminate overtime pay for millions of Americans. President Obama has proposed changing one, and only one, number but nothing else. He wants to raise eligibility for overtime from a salary of $23,660 to $47,776 to make several million people eligible for overtime pay that are denied overtime by people like Mr. Pudzer.
Mr. Pudzer also opposes raising the minimum wage, but that too is part of regulations written for the Fair Labor Standards Act and so the rules he ridicules are the exact rules that allow him to keep wages low and convert costs to profits to put in his pocket. I would say his views show a conflict of interest since he expects to profit from a government policy he intends to control.
Mr. Puzder also invoked a standard corporate threat against higher wages. He said it “encourages automation!” We learn fast food executives are investing in automation and considering machines that could tackle simple tasks such as taking customer orders. “If you’re making labor more expensive and automation less expensive- this is not rocket science.”
Organized labor lost jobs to automation in the 19th century. Over the last thirty years millions have been forced out of jobs from computer automation, but fast food wages are already so low his work force can leave him to be self employed mowing grass or baby sitting compared to the pathetic wages he pays. He ought to remember a bully needs better threats.
A hundred years ago there was no fast food industry but people who worked in low skill, low paid jobs called themselves wage slaves. Apparently the working class voted for Mr. Trump, but Mr. Puzder’s comments give the clearest sign yet the working class will continue to be wage slaves in the Trump Administration.
Saturday, December 10, 2016
Saturday, November 5, 2016
History, Politics, the working class, and the vote for 2016
The Sorry State of the working class
On April 13, 2016 the New York Times ran an op-ed piece entitled “Foiling Obama, Congress Made Trump.” Republican successfully blocked every effort Obama made to benefit the working class with constructive proposals: a cut in the payroll tax, an infrastructure bank to create construction jobs, a larger child tax credit, community college investments, an expanded earned income tax credit, making retirement plans portable across employers, tax credits for manufacturing communities, wage insurance.
Presidential election night commentary repeatedly mentioned the angry working class and how they voted for Donald Trump, apparently in large enough numbers to swing a few key states and the election. Many of the Trump voters were characterized as working class whites with a high school education struggling to get by on low paid jobs. A corporate decision to close a factory and move to Mexico or China often figured in their low income and loss of employment. The loss of jobs then figured in the collapse of their local housing market and empty strip malls sprinkled about in cities and towns across the mid western states.
Trump campaigned with many Democratic proposals the Republican establishment hates and blocked during the Obama years. He attacked American business moving jobs overseas during the campaign along with the NAFTA trade agreement. Neither the Republican or Democratic parties or any of its presidents have ever challenged the absolute right of corporate America to shut down plants and operations in the United States and move them to Mexico or China or anywhere they want to go. Neither party does a thing to slow it down, or appears to care about places like Detroit, decimated by autocratic corporate decisions. The best the Democrats have ever done is to offer trade assistance or retraining for those who lose their jobs.
For Trump to keep his promises to the people who elected him he will have to fight the Republican Party establishment and propose more aggressive policies than the modest efforts of the Democrats. The Democrats have already organized an agenda around his campaign pledges in what shapes up into a three cornered discussion, that is if Trump really meant what he said during the campaign.
The Trump and Democratic proposals can help generate new spending which in turn helps create jobs, but they do almost nothing to stem the surplus of labor or fix the policies accepted by both parties. More spending won’t be enough; the supply of labor has to be addressed.
Trump’s proposals include a demand to cut immigration and reduce the supply of professional foreign labor under the H1-b program, but H-1b is only one of several other programs that bring in foreign labor. Otherwise I have heard nothing about changes to the Fair Labor Standards Act. President Obama tried to amend the overtime rules and get more people a chance to earn time and half for work over forty hours, but the Republicans howled against it and filed suits to stop it.
As of now the minimum wage remains at $7.25 an hour for a forty-hour week and anyone earning over $23,660 has no right to overtime if an employer chooses to put them on a salary. Two people working sixty hour weeks equal three people working forty hour weeks. Unpaid overtime helps restrict new jobs and add to the already massive oversupply of labor. Two decades of higher productivity has eliminated millions of jobs and helped generate an even bigger surplus of labor working a forty-hour week. The full time workweek will need to be decreased to 30 hours phased in over several years.
Trump will have to lower federal income taxes on the modest wages and salaries of the low paid working class. In 2015 a single person earning $25,000 had to pay $1,743.75 in federal income tax even though it is not possible to live on such a low salary and that is before social security and state taxes. A couple both earning $25,000 pay $3,487.50 in federal income tax. If their income had been corporate dividends they would have paid nothing, not a cent in federal taxes.
It was the working class that put Trump in office, but it will be easy to tell if they get something for it. They got nothing from Reagan or the two Bush presidents. Republicans are pickpockets, but Trump refuses to sound like a Republican so maybe now will be different. Maybe.
On April 13, 2016 the New York Times ran an op-ed piece entitled “Foiling Obama, Congress Made Trump.” Republican successfully blocked every effort Obama made to benefit the working class with constructive proposals: a cut in the payroll tax, an infrastructure bank to create construction jobs, a larger child tax credit, community college investments, an expanded earned income tax credit, making retirement plans portable across employers, tax credits for manufacturing communities, wage insurance.
Presidential election night commentary repeatedly mentioned the angry working class and how they voted for Donald Trump, apparently in large enough numbers to swing a few key states and the election. Many of the Trump voters were characterized as working class whites with a high school education struggling to get by on low paid jobs. A corporate decision to close a factory and move to Mexico or China often figured in their low income and loss of employment. The loss of jobs then figured in the collapse of their local housing market and empty strip malls sprinkled about in cities and towns across the mid western states.
Trump campaigned with many Democratic proposals the Republican establishment hates and blocked during the Obama years. He attacked American business moving jobs overseas during the campaign along with the NAFTA trade agreement. Neither the Republican or Democratic parties or any of its presidents have ever challenged the absolute right of corporate America to shut down plants and operations in the United States and move them to Mexico or China or anywhere they want to go. Neither party does a thing to slow it down, or appears to care about places like Detroit, decimated by autocratic corporate decisions. The best the Democrats have ever done is to offer trade assistance or retraining for those who lose their jobs.
For Trump to keep his promises to the people who elected him he will have to fight the Republican Party establishment and propose more aggressive policies than the modest efforts of the Democrats. The Democrats have already organized an agenda around his campaign pledges in what shapes up into a three cornered discussion, that is if Trump really meant what he said during the campaign.
The Trump and Democratic proposals can help generate new spending which in turn helps create jobs, but they do almost nothing to stem the surplus of labor or fix the policies accepted by both parties. More spending won’t be enough; the supply of labor has to be addressed.
Trump’s proposals include a demand to cut immigration and reduce the supply of professional foreign labor under the H1-b program, but H-1b is only one of several other programs that bring in foreign labor. Otherwise I have heard nothing about changes to the Fair Labor Standards Act. President Obama tried to amend the overtime rules and get more people a chance to earn time and half for work over forty hours, but the Republicans howled against it and filed suits to stop it.
As of now the minimum wage remains at $7.25 an hour for a forty-hour week and anyone earning over $23,660 has no right to overtime if an employer chooses to put them on a salary. Two people working sixty hour weeks equal three people working forty hour weeks. Unpaid overtime helps restrict new jobs and add to the already massive oversupply of labor. Two decades of higher productivity has eliminated millions of jobs and helped generate an even bigger surplus of labor working a forty-hour week. The full time workweek will need to be decreased to 30 hours phased in over several years.
Trump will have to lower federal income taxes on the modest wages and salaries of the low paid working class. In 2015 a single person earning $25,000 had to pay $1,743.75 in federal income tax even though it is not possible to live on such a low salary and that is before social security and state taxes. A couple both earning $25,000 pay $3,487.50 in federal income tax. If their income had been corporate dividends they would have paid nothing, not a cent in federal taxes.
It was the working class that put Trump in office, but it will be easy to tell if they get something for it. They got nothing from Reagan or the two Bush presidents. Republicans are pickpockets, but Trump refuses to sound like a Republican so maybe now will be different. Maybe.
Tuesday, October 11, 2016
The Middle Class, the Working Class and American Politics
The Middle Class, the Working Class and American Politics
The term middle class works especially well for millionaires and billionaires. They find it useful as a way to get families and individuals to envy the rich and identify with them. People who think their middle class are more likely to feel superior to people identified as working class.
Many stories in the media cite middle class criteria for you to evaluate your personal status. Are you in the middle class? Money Watch published a typical list on the Internet. It lists eight criteria: 1. You earn between $36,000 and $109,000 a year, 2. You own a home, 3. You have a secure job, 4. You have health insurance, 5. You invest for retirement, 6. You went to college, 7. You take family vacations and 8. You think you’re middle class.
It’s instructive that five of the eight criteria – 1, 2, 4, 5, 6 and 7 - apply to how much you earn and what you can afford. In a consumer oriented society business wants everyone to define themselves and their class by what they earn, own and buy. People who compare their income with others might forget about job rights and what they go through to earn a living.
Equating class to what you earn and buy ignores the power to control the political system. If you answer yes to the following four statements you are in the privileged upper class. If you answer no, then you are in the working class.
1. You sit on the board of directors of an American corporation with more than $100 million in assets.
2. Your lawyer and accountant have set up your non-profit foundation that gives away more than a million dollars a year.
3. You do not pay more than 15 percent marginal personal income tax and have in one or more years in the past decade paid no federal personal income tax.
4. You can easily support yourself and your family in the manner you expect without working for a wage or salary.
Political power determines the economic rules that allow and perpetuate the upper class. As Warren Buffet likes to tell the press from time to time wage earners pay taxes at more than double the rate he pays for corporate stock dividends or capital gains. If we define the working class as people who have to support themselves working for a wage or salary, the current tax rules create a decided disadvantage for the working class. I am unaware of working class influence on Congress that might change that.
There is a famous quote of Jay Gould, the American tycoon from the 19th century: "I can hire one half the working class to kill the other half." Back in the 19th century tycoons like Jay Gould did hire working class guards to shoot at picketing strikers; Mr. Gould was not making idle threats. Lately Governors like Scott Walker of Wisconsin get the under paid, over worked, over taxed members of the working class to attack public school teachers who they are encouraged to think are over paid and privileged members of the middle class. The working class who vote for a Scott Walker vote for a politician who steadily works to lower their standard of living.
The working class has always been divided because some people think they’re in the middle class when there’s no such thing as the middle class. The term is deliberate deception and diversion. If you work for wages, or you’re retired and live on the savings and Social Security from your wages, you’re in the working class. Your income means nothing in that classification; it’s how you earn a living, not how much. If Americans know who they are, there will be changes in American politics that uplift the miserable and powerless lot of wage earners.
What class are you in?
The term middle class works especially well for millionaires and billionaires. They find it useful as a way to get families and individuals to envy the rich and identify with them. People who think their middle class are more likely to feel superior to people identified as working class.
Many stories in the media cite middle class criteria for you to evaluate your personal status. Are you in the middle class? Money Watch published a typical list on the Internet. It lists eight criteria: 1. You earn between $36,000 and $109,000 a year, 2. You own a home, 3. You have a secure job, 4. You have health insurance, 5. You invest for retirement, 6. You went to college, 7. You take family vacations and 8. You think you’re middle class.
It’s instructive that five of the eight criteria – 1, 2, 4, 5, 6 and 7 - apply to how much you earn and what you can afford. In a consumer oriented society business wants everyone to define themselves and their class by what they earn, own and buy. People who compare their income with others might forget about job rights and what they go through to earn a living.
Equating class to what you earn and buy ignores the power to control the political system. If you answer yes to the following four statements you are in the privileged upper class. If you answer no, then you are in the working class.
1. You sit on the board of directors of an American corporation with more than $100 million in assets.
2. Your lawyer and accountant have set up your non-profit foundation that gives away more than a million dollars a year.
3. You do not pay more than 15 percent marginal personal income tax and have in one or more years in the past decade paid no federal personal income tax.
4. You can easily support yourself and your family in the manner you expect without working for a wage or salary.
Political power determines the economic rules that allow and perpetuate the upper class. As Warren Buffet likes to tell the press from time to time wage earners pay taxes at more than double the rate he pays for corporate stock dividends or capital gains. If we define the working class as people who have to support themselves working for a wage or salary, the current tax rules create a decided disadvantage for the working class. I am unaware of working class influence on Congress that might change that.
There is a famous quote of Jay Gould, the American tycoon from the 19th century: "I can hire one half the working class to kill the other half." Back in the 19th century tycoons like Jay Gould did hire working class guards to shoot at picketing strikers; Mr. Gould was not making idle threats. Lately Governors like Scott Walker of Wisconsin get the under paid, over worked, over taxed members of the working class to attack public school teachers who they are encouraged to think are over paid and privileged members of the middle class. The working class who vote for a Scott Walker vote for a politician who steadily works to lower their standard of living.
The working class has always been divided because some people think they’re in the middle class when there’s no such thing as the middle class. The term is deliberate deception and diversion. If you work for wages, or you’re retired and live on the savings and Social Security from your wages, you’re in the working class. Your income means nothing in that classification; it’s how you earn a living, not how much. If Americans know who they are, there will be changes in American politics that uplift the miserable and powerless lot of wage earners.
What class are you in?
Monday, September 26, 2016
Donald Trump on Coal Mining Jobs
Donald Trump on Coal Mining Jobs
Lately I heard Candidate Trump blaming the Democrats for the loss of jobs in coal mining. Since he does not believe in global warming it follows that enforcement of clean air regulations for coal fired electric plants makes people like Hillary Clinton responsible for these job losses.
Maybe not.
Back in the early 1920’s just under 800,000 worked as coal miners in the coal industry. It was a time when inter city transportation came entirely from the use coal burning, steam locomotives. It was a time when nearly everyone used coal for home heating. It was a time when the steel industry needed mountains of coal. It was early in the mechanizing use of high productivity machinery.
It was also the beginning of the mordant and mournful decline in coal mining jobs. By 1990 the coal industry employed 136 thousand in surface and underground mining of bituminous coal and anthracite coal. Steam locomotives are gone; few heat their homes with coal; the steel industry uses scrap in electric furnaces. By the end of 2000 jobs were down to 71.6 thousand; by the end of 2010 they recovered to 84.3 thousand; by the end of 2015 the coal industry was down to 60.7 thousand jobs; by August 2016 jobs were 52.4 thousand.
Just over 64 percent of the jobs in coal mining are in construction, extraction and material moving occupations and five of these occupations are partly to mostly specialized to the coal industry. These five are continuous mining machine operators, mine cutting and channeling machine operators, roof bolters, loading machine operators in underground mining and shuttle car operators.
All employed in these occupations operate highly productive mining machinery; they do not use a pick and shovel. For example, 90 percent of shuttle car operators work in the coal industry. The median wage reported for 2015 was $55,320 and that wage has increased faster than inflation since 2008, right after the Obama administration took office. Given the specialized nature of the work it would be next to impossible for laid off shuttle car operators to find a similar job in another industry and similarly for the other four occupations mentioned above.
Other occupations in the coal industry in management, finance, construction, maintenance and repair have employment in many industries and those losing these jobs in the coal industry can seek employment in many other industries just like the rest of us. Since the end of 2008 the five specialized coal mining occupations have lost an average of 859 jobs a year through 2015.
It is worth mentioning that employment in oil and gas extraction and support activities for oil and gas extraction have increased in the years of the Obama presidency from 2008 to 2015 by 27.1 percent, or an additional 102.2 thousand jobs, more than the loss of coal industry jobs. Even if we assume the last eight years of decline in coal demand results solely from clean air regulations applied to coal fired power plants, there is no need to weigh clean air against the loss of jobs in this instance. It doesn’t matter what Trump says or does; coal employment will not be going up, no matter how dirty the air.
Lately I heard Candidate Trump blaming the Democrats for the loss of jobs in coal mining. Since he does not believe in global warming it follows that enforcement of clean air regulations for coal fired electric plants makes people like Hillary Clinton responsible for these job losses.
Maybe not.
Back in the early 1920’s just under 800,000 worked as coal miners in the coal industry. It was a time when inter city transportation came entirely from the use coal burning, steam locomotives. It was a time when nearly everyone used coal for home heating. It was a time when the steel industry needed mountains of coal. It was early in the mechanizing use of high productivity machinery.
It was also the beginning of the mordant and mournful decline in coal mining jobs. By 1990 the coal industry employed 136 thousand in surface and underground mining of bituminous coal and anthracite coal. Steam locomotives are gone; few heat their homes with coal; the steel industry uses scrap in electric furnaces. By the end of 2000 jobs were down to 71.6 thousand; by the end of 2010 they recovered to 84.3 thousand; by the end of 2015 the coal industry was down to 60.7 thousand jobs; by August 2016 jobs were 52.4 thousand.
Just over 64 percent of the jobs in coal mining are in construction, extraction and material moving occupations and five of these occupations are partly to mostly specialized to the coal industry. These five are continuous mining machine operators, mine cutting and channeling machine operators, roof bolters, loading machine operators in underground mining and shuttle car operators.
All employed in these occupations operate highly productive mining machinery; they do not use a pick and shovel. For example, 90 percent of shuttle car operators work in the coal industry. The median wage reported for 2015 was $55,320 and that wage has increased faster than inflation since 2008, right after the Obama administration took office. Given the specialized nature of the work it would be next to impossible for laid off shuttle car operators to find a similar job in another industry and similarly for the other four occupations mentioned above.
Other occupations in the coal industry in management, finance, construction, maintenance and repair have employment in many industries and those losing these jobs in the coal industry can seek employment in many other industries just like the rest of us. Since the end of 2008 the five specialized coal mining occupations have lost an average of 859 jobs a year through 2015.
It is worth mentioning that employment in oil and gas extraction and support activities for oil and gas extraction have increased in the years of the Obama presidency from 2008 to 2015 by 27.1 percent, or an additional 102.2 thousand jobs, more than the loss of coal industry jobs. Even if we assume the last eight years of decline in coal demand results solely from clean air regulations applied to coal fired power plants, there is no need to weigh clean air against the loss of jobs in this instance. It doesn’t matter what Trump says or does; coal employment will not be going up, no matter how dirty the air.
Friday, July 22, 2016
Jobs as Chefs
Chefs and Head Cooks
Standard Occupational Classification #35-1011 Chefs and Head Cooks
SOC Definition - Direct the preparation, seasoning, and cooking of salads, soups, fish, meats, vegetables, desserts, or other foods. May plan and price menu items, order supplies, and keep records and accounts. May participate in cooking. Also known as: Executive Chef; Pastry Chef; Sous Chef
Chefs and head cooks are classified as food preparation and serving related occupations with the majority working in the accommodations and food services industry. For chefs and head cooks 45.1 percent work in full service restaurants, another 7 percent at limited service eating places like cafeterias, grills and buffets, snack and non-alcoholic beverage bars, 10.6 percent in accommodations including traveler accommodations, casino hotels, RV parks and recreational camps, and 6.0 in the amusement, gambling and recreation industry. Education employs 1.5 percent and hospitals about .9 percent and private households 4.9 percent as self-employed chefs.
National employment as chefs and head cooks was 129,370 in 2015. Jobs are up since 2000 when jobs were 122,860. The annual average job increase equals 434 per year since 2000 at a growth rate of .34 percent. The Bureau of Labor Statistics is forecasting job growth for chefs and head cooks of 1,130 per year through 2024 at a growth rate of .85 percent a year.
Job openings make a better measure of new hiring than job growth. Job openings are job growth and the number of net replacements. Net replacements are people who permanently leave an occupation for another occupation or retirement and must be replaced before there can be job growth. Job openings for chefs and head cooks are forecast to be 3,000 a year through 2024.
The recently updated BLS Education and Training Classification assignments list high school diploma or equivalent skills as necessary for entry into jobs as chefs and head cooks. However, percentages from survey data are published for chefs and head cooks showing an educational distribution where 29.2 percent have a high school degree, 17.6 percent have less than a high school degree, 22.5 percent some college, but no degree, 16.9 percent have an associates degree, 12.3 percent have BA degrees, and 1.6 percent have an advanced degree. Five years of experience in a related occupation is considered necessary to a chef or head cook but on-the-job training should not be necessary for new hires.
The National Center for Education Statistics reports degree data for America’s colleges and universities. There were 1,138 BA degrees granted in personal and culinary arts in 7 programs in June 2012, the last year of complete degree data. These include baking and pastry arts-baker-pastry chef , culinary arts-chef training, restaurant, culinary, and catering management, and meat cutting-meat cutter. Degrees are up from 2006 when 736 finished similar degrees.
The basic wage data from the BLS occupational employment survey includes a wage distribution. Averages are not used much in wage data. A few high wages pull up the average and make it unrepresentative. Instead a distribution range of wages is published with the 10th, 25th, median, 75th, and 90th percentiles of wages. A 10th percentile wage means 10 percent working in this job have wages equal to or less than the 10th percentile wage and so on. Annual wages are converted to hourly wages by dividing annual wages by 2080
The entry wage for the national market in the 10th percentile for chefs and head cooks is reported as $23,150 in 2015. The 25th percentile wage equals $30,840. The median wage is $41,500, the 75th percentile wage equals $57,110 and the 90th percentile wage is $74,170.
The wages of chefs and head cooks have kept up with inflation for the last decade. For example, to have the buying power of the 2006 median wage of $34,670 in 2015, the chefs and head cooks wage would need to be $40,408.09. In stead it was $41,500, a 2.70 percent increase in the real wage for those 9 years.
Some employers pay a salary to their chef employees in lieu of an hourly wage in order to avoid paying overtime at time and a half. For an employer to pay a salary and be exempt from overtime pay the employee must be paid at least $23,660 a year, or $455 a week, and meet the definition of their work defined in the regulations of the Fair Labor Standards Act as amended. The regulations have always included managerial, professional and educational occupations.
When the Fair Labor Standards Act regulations were revised in 2004 by the Bush administration a new list of specific occupations was included as exempt. Chef was on the list. I have given the regulations that define the work of a chef that an employer needs to meet to pay a salary and be exempt from overtime pay if they pay at least $23,660 a year.
Overtime exemption defined for Chefs---Chefs, such as executive chefs and sous chefs, who have attained a four-year specialized academic degree in a culinary arts program, generally meet the duties requirements for the learned professional exemption. The learned professional exemption is not available to cooks who perform predominantly routine mental, manual, mechanical or physical work.
It is common for employers to title and define someone’s employment to fit the overtime exemption definitions, but it can be exploitive, sometimes bluntly so. If a salary is set close to the 10th percentile wage of $23,150 or less it is a real abuse, but less so the closer pay gets to the median of $41,500.
The Obama Administration has raised minimum salary required for exemption from overtime from $23,660 to $47,467. If a chef’s salary is below $47,467 then his employer will have to pay time and half for overtime beginning December 1, 2016 to be in compliance with the Fair Labor Standards Act. The only way to avoid paying overtime by paying a salary will be to pay an annual salary more than $47,467.
Standard Occupational Classification #35-1011 Chefs and Head Cooks
SOC Definition - Direct the preparation, seasoning, and cooking of salads, soups, fish, meats, vegetables, desserts, or other foods. May plan and price menu items, order supplies, and keep records and accounts. May participate in cooking. Also known as: Executive Chef; Pastry Chef; Sous Chef
Chefs and head cooks are classified as food preparation and serving related occupations with the majority working in the accommodations and food services industry. For chefs and head cooks 45.1 percent work in full service restaurants, another 7 percent at limited service eating places like cafeterias, grills and buffets, snack and non-alcoholic beverage bars, 10.6 percent in accommodations including traveler accommodations, casino hotels, RV parks and recreational camps, and 6.0 in the amusement, gambling and recreation industry. Education employs 1.5 percent and hospitals about .9 percent and private households 4.9 percent as self-employed chefs.
National employment as chefs and head cooks was 129,370 in 2015. Jobs are up since 2000 when jobs were 122,860. The annual average job increase equals 434 per year since 2000 at a growth rate of .34 percent. The Bureau of Labor Statistics is forecasting job growth for chefs and head cooks of 1,130 per year through 2024 at a growth rate of .85 percent a year.
Job openings make a better measure of new hiring than job growth. Job openings are job growth and the number of net replacements. Net replacements are people who permanently leave an occupation for another occupation or retirement and must be replaced before there can be job growth. Job openings for chefs and head cooks are forecast to be 3,000 a year through 2024.
The recently updated BLS Education and Training Classification assignments list high school diploma or equivalent skills as necessary for entry into jobs as chefs and head cooks. However, percentages from survey data are published for chefs and head cooks showing an educational distribution where 29.2 percent have a high school degree, 17.6 percent have less than a high school degree, 22.5 percent some college, but no degree, 16.9 percent have an associates degree, 12.3 percent have BA degrees, and 1.6 percent have an advanced degree. Five years of experience in a related occupation is considered necessary to a chef or head cook but on-the-job training should not be necessary for new hires.
The National Center for Education Statistics reports degree data for America’s colleges and universities. There were 1,138 BA degrees granted in personal and culinary arts in 7 programs in June 2012, the last year of complete degree data. These include baking and pastry arts-baker-pastry chef , culinary arts-chef training, restaurant, culinary, and catering management, and meat cutting-meat cutter. Degrees are up from 2006 when 736 finished similar degrees.
The basic wage data from the BLS occupational employment survey includes a wage distribution. Averages are not used much in wage data. A few high wages pull up the average and make it unrepresentative. Instead a distribution range of wages is published with the 10th, 25th, median, 75th, and 90th percentiles of wages. A 10th percentile wage means 10 percent working in this job have wages equal to or less than the 10th percentile wage and so on. Annual wages are converted to hourly wages by dividing annual wages by 2080
The entry wage for the national market in the 10th percentile for chefs and head cooks is reported as $23,150 in 2015. The 25th percentile wage equals $30,840. The median wage is $41,500, the 75th percentile wage equals $57,110 and the 90th percentile wage is $74,170.
The wages of chefs and head cooks have kept up with inflation for the last decade. For example, to have the buying power of the 2006 median wage of $34,670 in 2015, the chefs and head cooks wage would need to be $40,408.09. In stead it was $41,500, a 2.70 percent increase in the real wage for those 9 years.
Some employers pay a salary to their chef employees in lieu of an hourly wage in order to avoid paying overtime at time and a half. For an employer to pay a salary and be exempt from overtime pay the employee must be paid at least $23,660 a year, or $455 a week, and meet the definition of their work defined in the regulations of the Fair Labor Standards Act as amended. The regulations have always included managerial, professional and educational occupations.
When the Fair Labor Standards Act regulations were revised in 2004 by the Bush administration a new list of specific occupations was included as exempt. Chef was on the list. I have given the regulations that define the work of a chef that an employer needs to meet to pay a salary and be exempt from overtime pay if they pay at least $23,660 a year.
Overtime exemption defined for Chefs---Chefs, such as executive chefs and sous chefs, who have attained a four-year specialized academic degree in a culinary arts program, generally meet the duties requirements for the learned professional exemption. The learned professional exemption is not available to cooks who perform predominantly routine mental, manual, mechanical or physical work.
It is common for employers to title and define someone’s employment to fit the overtime exemption definitions, but it can be exploitive, sometimes bluntly so. If a salary is set close to the 10th percentile wage of $23,150 or less it is a real abuse, but less so the closer pay gets to the median of $41,500.
The Obama Administration has raised minimum salary required for exemption from overtime from $23,660 to $47,467. If a chef’s salary is below $47,467 then his employer will have to pay time and half for overtime beginning December 1, 2016 to be in compliance with the Fair Labor Standards Act. The only way to avoid paying overtime by paying a salary will be to pay an annual salary more than $47,467.
Saturday, June 18, 2016
Jobs in Public Relations
Public Relations Managers and Public Relations Specialists
Standard Occupational Classification #11-2031 Public Relations Managers
Standard Occupational Classification #27-3031 Public Relations Specialists
SOC Definition for Public Relations Managers #11-2031 -- Plan and direct public relations programs designed to create and maintain a favorable public image for employer or client; or if engaged in fundraising, plan and direct activities to solicit and maintain funds for special projects and nonprofit organizations. Also known as: Fundraising Director, Public Information Director, Publicity Director
SOC Definition for Public Relations Specialists #27-3031 – Engage in promoting or creating good will for individuals, groups, or organizations by writing or selecting favorable publicity material and releasing it through various communications media. May prepare and arrange displays, and make speeches. Also known as Account Executive, Communications Director, Communications Specialist, Corporate Communications Specialist, Media Relations Specialist, Public Affairs Specialist, Public Information Officer, Public Information Specialist, Public Relations Coordinator or Specialist
Respond to requests for information from the media. Write press releases or other media communications to promote clients and an organization's accomplishments, agenda, or environmental responsibility. Establish or maintain cooperative relationships with representatives of community, consumer, employee, or interest groups. Coach client representatives in effective communication with the public or with employees. Update and maintain content posted on the Web. Prepare or edit organizational publications, such as employee newsletters or stockholders' reports, for internal or external audiences. Coordinate public responses to management incidents or conflicts.
Public Relations Managers are classified as managerial occupations with 24.2 percent working in the non-profit Religious, Grantmaking, Civic, Professional, and Similar Organizations, 16.6 percent working in Junior Colleges, Colleges, Universities, and Professional Schools, 8.2 percent working in Advertising, Public Relations, and Related Services, 9.3 percent working in Management of Companies and Enterprises and a scattering of small percents in many industries.
For Public Relations Specialist are classified as Arts, design, entertainment, sports, and media occupations with 21.6 percent working in Religious, Grantmaking, Civic, Professional, and Similar Organizations, 9.5 percent working in Junior Colleges, Colleges, Universities, and Professional Schools, 14.9 percent working in Advertising, Public Relations, and Related Services, 7.3 percent working in hospitals and social assistance, 6.9 percent working in state and local government, excluding education and hospitals and a scattering of small percents in many industries.
National employment as Public Relations Managers was 60,380 in 2015. Jobs are down since 2000 when jobs were 68,000. The annual average job decrease equals 508 per year since 2000 at a growth rate of -.79 percent. The Bureau of Labor Statistics is forecasting job growth for Public Relations Managers at 470 per year through 2024 at a growth rate of .69 percent a year.
National employment as Public Relations Specialists was 218,910 in 2015. Jobs are up since 2000 when jobs were 128,570. The annual average job increase equals 6,023 per year since 2000 at a growth rate of 3.61 percent. The Bureau of Labor Statistics is forecasting job growth for Public Relations Specialists at 14,900 per year through 2024 at a growth rate of .60 percent a year.
Job openings make a better measure of new hiring than job growth. Job openings are job growth and the number of net replacements. Net replacements are people who permanently leave an occupation for another occupation or retirement and must be replaced before there can be job growth. Job openings for Public Relations Managers are forecast to be 610 a year through 2024.
Job openings make a better measure of new hiring than job growth. Job openings are job growth and the number of net replacements. Net replacements are people who permanently leave an occupation for another occupation or retirement and must be replaced before there can be job growth. Job openings for Public Relations Specialists are forecast to be 2,620 a year through 2024.
The recently updated BLS Education and Training Classification assignments lists BA degree skills as necessary for entry into jobs as Public Relations Manager. However, percentages from survey data are published for Public Relations Managers showing an educational distribution where 49.2 percent have a BA degree, 23.6 percent have advanced degrees, 13.9 percent some college, but no degree, and almost 5.6 percent have an associate’s degree. High school skills were sufficient for 7.6 percent who work here and .6 percent have less than a high school degree. Previous experience is considered unnecessary, but moderate on-the-job training is expected to be necessary for new hires.
BA degree skills are necessary for Public Relations Specialists. Percentages from survey data are published for Public Relations Specialists showing an educational distribution where 56.2 percent have a BA degree, 22.4 percent have advanced degrees, 11.2 percent some college, but no degree, and almost 4.3 percent have an associate’s degree. High school skills were sufficient for 5.4 percent who work here and .6 percent have less than a high school degree. Previous experience is considered unnecessary, but moderate on-the-job training is expected to be necessary for new hires.
The National Center for Education Statistics reports degree data for America’s colleges and universities that can be compared with job growth and openings. Relevant BA degree programs include Public relations/image management, advertising, political communication, health communication, public relations, advertising and applied communications specialties. There were 11,126 BA degrees granted in the 5 programs in public relations, advertising and applied communications in June 2013, the last year of complete degree data. These are up slightly from June 2011 when they were 10,027 and June 2012 when they were 9,948. There were also 1,004 MA degrees granted and 11 Ph.D degrees granted in June 2013. The ratio of relevant BA degree to openings equals 3.44, or 11,126/(610+2620), assuring more than three qualified candidates to fill job openings.
The basic wage data from the BLS occupational employment survey includes a wage distribution. Averages are not used much in wage data. A few high wages pull up the average and make it unrepresentative. Instead a distribution range of wages is published with the 10th, 25th, median, 75th, and 90th percentiles of wages. A 10th percentile wage means 10 percent working in this job have wages equal to or less than the 10th percentile wage and so on. Annual wages are converted to hourly wages by dividing annual wages by 2080
The entry wage for the national market in the 10th percentile for Public Relations Manager is reported as $56,890 in 2015. The 25th percentile wage equals $76,000. The median wage is $104,140, the 75th percentile wage equals $147,590 and the 90th percentile wage is $187,200.
The wages of Public Relations Manager have kept up with inflation for the last decade. For example, to have the buying power of the 2008 median wage of $89,430 in 2015, the Public Relations Manager wage would need to be $98,448.40. In stead it was $104,140, a 5.78 percent increase in the real wage for those eight years.
The entry wage for the national market in the 10th percentile for Public Relations Specialist is reported as $31,690 in 2015. The 25th percentile wage equals $41,520. The median wage is $56,770, the 75th percentile wage equals $78,340 and the 90th percentile wage is $110,080.
The wages of Public Relations Specialist have kept up with inflation for the last decade. For example, to have the buying power of the 2008 median wage of $51,280 in 2015, the Public Relations Specialist wage would need to be $56,451.23. In stead it was $56,770, a 0.56 percent increase in the real wage for those eight years.
Standard Occupational Classification #11-2031 Public Relations Managers
Standard Occupational Classification #27-3031 Public Relations Specialists
SOC Definition for Public Relations Managers #11-2031 -- Plan and direct public relations programs designed to create and maintain a favorable public image for employer or client; or if engaged in fundraising, plan and direct activities to solicit and maintain funds for special projects and nonprofit organizations. Also known as: Fundraising Director, Public Information Director, Publicity Director
SOC Definition for Public Relations Specialists #27-3031 – Engage in promoting or creating good will for individuals, groups, or organizations by writing or selecting favorable publicity material and releasing it through various communications media. May prepare and arrange displays, and make speeches. Also known as Account Executive, Communications Director, Communications Specialist, Corporate Communications Specialist, Media Relations Specialist, Public Affairs Specialist, Public Information Officer, Public Information Specialist, Public Relations Coordinator or Specialist
Respond to requests for information from the media. Write press releases or other media communications to promote clients and an organization's accomplishments, agenda, or environmental responsibility. Establish or maintain cooperative relationships with representatives of community, consumer, employee, or interest groups. Coach client representatives in effective communication with the public or with employees. Update and maintain content posted on the Web. Prepare or edit organizational publications, such as employee newsletters or stockholders' reports, for internal or external audiences. Coordinate public responses to management incidents or conflicts.
Public Relations Managers are classified as managerial occupations with 24.2 percent working in the non-profit Religious, Grantmaking, Civic, Professional, and Similar Organizations, 16.6 percent working in Junior Colleges, Colleges, Universities, and Professional Schools, 8.2 percent working in Advertising, Public Relations, and Related Services, 9.3 percent working in Management of Companies and Enterprises and a scattering of small percents in many industries.
For Public Relations Specialist are classified as Arts, design, entertainment, sports, and media occupations with 21.6 percent working in Religious, Grantmaking, Civic, Professional, and Similar Organizations, 9.5 percent working in Junior Colleges, Colleges, Universities, and Professional Schools, 14.9 percent working in Advertising, Public Relations, and Related Services, 7.3 percent working in hospitals and social assistance, 6.9 percent working in state and local government, excluding education and hospitals and a scattering of small percents in many industries.
National employment as Public Relations Managers was 60,380 in 2015. Jobs are down since 2000 when jobs were 68,000. The annual average job decrease equals 508 per year since 2000 at a growth rate of -.79 percent. The Bureau of Labor Statistics is forecasting job growth for Public Relations Managers at 470 per year through 2024 at a growth rate of .69 percent a year.
National employment as Public Relations Specialists was 218,910 in 2015. Jobs are up since 2000 when jobs were 128,570. The annual average job increase equals 6,023 per year since 2000 at a growth rate of 3.61 percent. The Bureau of Labor Statistics is forecasting job growth for Public Relations Specialists at 14,900 per year through 2024 at a growth rate of .60 percent a year.
Job openings make a better measure of new hiring than job growth. Job openings are job growth and the number of net replacements. Net replacements are people who permanently leave an occupation for another occupation or retirement and must be replaced before there can be job growth. Job openings for Public Relations Managers are forecast to be 610 a year through 2024.
Job openings make a better measure of new hiring than job growth. Job openings are job growth and the number of net replacements. Net replacements are people who permanently leave an occupation for another occupation or retirement and must be replaced before there can be job growth. Job openings for Public Relations Specialists are forecast to be 2,620 a year through 2024.
The recently updated BLS Education and Training Classification assignments lists BA degree skills as necessary for entry into jobs as Public Relations Manager. However, percentages from survey data are published for Public Relations Managers showing an educational distribution where 49.2 percent have a BA degree, 23.6 percent have advanced degrees, 13.9 percent some college, but no degree, and almost 5.6 percent have an associate’s degree. High school skills were sufficient for 7.6 percent who work here and .6 percent have less than a high school degree. Previous experience is considered unnecessary, but moderate on-the-job training is expected to be necessary for new hires.
BA degree skills are necessary for Public Relations Specialists. Percentages from survey data are published for Public Relations Specialists showing an educational distribution where 56.2 percent have a BA degree, 22.4 percent have advanced degrees, 11.2 percent some college, but no degree, and almost 4.3 percent have an associate’s degree. High school skills were sufficient for 5.4 percent who work here and .6 percent have less than a high school degree. Previous experience is considered unnecessary, but moderate on-the-job training is expected to be necessary for new hires.
The National Center for Education Statistics reports degree data for America’s colleges and universities that can be compared with job growth and openings. Relevant BA degree programs include Public relations/image management, advertising, political communication, health communication, public relations, advertising and applied communications specialties. There were 11,126 BA degrees granted in the 5 programs in public relations, advertising and applied communications in June 2013, the last year of complete degree data. These are up slightly from June 2011 when they were 10,027 and June 2012 when they were 9,948. There were also 1,004 MA degrees granted and 11 Ph.D degrees granted in June 2013. The ratio of relevant BA degree to openings equals 3.44, or 11,126/(610+2620), assuring more than three qualified candidates to fill job openings.
The basic wage data from the BLS occupational employment survey includes a wage distribution. Averages are not used much in wage data. A few high wages pull up the average and make it unrepresentative. Instead a distribution range of wages is published with the 10th, 25th, median, 75th, and 90th percentiles of wages. A 10th percentile wage means 10 percent working in this job have wages equal to or less than the 10th percentile wage and so on. Annual wages are converted to hourly wages by dividing annual wages by 2080
The entry wage for the national market in the 10th percentile for Public Relations Manager is reported as $56,890 in 2015. The 25th percentile wage equals $76,000. The median wage is $104,140, the 75th percentile wage equals $147,590 and the 90th percentile wage is $187,200.
The wages of Public Relations Manager have kept up with inflation for the last decade. For example, to have the buying power of the 2008 median wage of $89,430 in 2015, the Public Relations Manager wage would need to be $98,448.40. In stead it was $104,140, a 5.78 percent increase in the real wage for those eight years.
The entry wage for the national market in the 10th percentile for Public Relations Specialist is reported as $31,690 in 2015. The 25th percentile wage equals $41,520. The median wage is $56,770, the 75th percentile wage equals $78,340 and the 90th percentile wage is $110,080.
The wages of Public Relations Specialist have kept up with inflation for the last decade. For example, to have the buying power of the 2008 median wage of $51,280 in 2015, the Public Relations Specialist wage would need to be $56,451.23. In stead it was $56,770, a 0.56 percent increase in the real wage for those eight years.
Wednesday, June 8, 2016
The New Overtime Rules and the Deceptive Response
The New Overtime Rules and the Deceptive Response
New overtime rules for the Federal Labor Standards Act (FLSA) will begin December 1 of this year. Current overtime rules only apply to someone paid a salary equal to or less than $23,660 a year or to someone paid an hourly wage, a decision entirely at the discretion of the employer. FLSA rules calls for pay at a rate of time and a half for hours over forty hours a week. Over time pay gives employers the incentive to hire additional people rather than pay overtime; two people working sixty hours a week equals three people working forty hours a week.
The current overtime pay exemptions date from August 23, 2004 following a substantial revision of Fair Labor Standards regulations by the Bush Administration. The revision added lots of new language that made it easier to exempt executive, administrative and professional employees from overtime pay as long as they work for a salary above $23,660.
The new rules are sometimes called white-collar rules because exemptions to overtime pay have never applied to “manual laborers or other ‘blue collar’ workers who perform work involving repetitive operations with their hands, physical skill and energy.” For example, with the current white collar rules an employee can be denied overtime pay if employed in a bona fide executive, administrative or professional capacity and compensated by salary at a rate of not less than $455 per week ($23,660 a year) exclusive of board, lodging or other facilities, whose primary duty is the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer's customers and whose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.
On December 1 the minimum annual salary requirement for overtime pay goes up to $47,476, but does not change the regulations like the one paraphrased above. The new minimum is high enough that some employees previously exempted from - denied - the right to overtime pay will be entitled to it.
Opponents
Business owners, managers and those who identify with business owners and managers will not like the change. It will raise wage costs and lower profits; the changes redistribute income to wage earners at the expense of individual business profits. The people who do not like the policy do not generally mention how much easier it was to avoid paying overtime after the Bush administration revisions of 2004, or how stagnant wages reduce buying power and limit economic growth.
The Department of Labor estimates the new rules will apply to 4.2 million people and if overtime pay raises buying power enough to increase total spending, more production and sales will increase collective business profits. In that way the rules might improve the economy for the larger society but individual businesses will have higher net profits if they can get essential work done by avoiding over time pay.
Opposition comments published in the newspapers (Washington Post, May 21, 2016, “The potential pitfalls of new overtime rule”) and the Internet avoid confronting the redistribution issue or the abuses so common to overtime. The Washington Post article cites the ominous proviso offered by unnamed business groups that “ what workers will probably see a lot less of is flexibility on the job.” … “As an employer, you will have to think about how much time did the person really work … It’s a headache and because it’s a headache, the employer’s first reaction is going to be: ‘No, you can’t work from home. Sorry.’ ”
Beware the deception. Compliance with the FLSA already requires tracking hours worked, whether they are at an office or work from a remote computer. The first sentence of the Fair Labor Standards Act requires that all hours of work will be compensated. Executive, administrative and professional occupations are exempt from overtime pay, but they are entitled to regular pay for work over forty hours a week. Flexibility for salaried people should not turn overtime hours into free work. People who get pressured into working fifty and sixty hours a week who get paid a full time salary based on legally designated full time workweek of forty hours giveaway overtime hours for free.
The Washington Post article cites a lawyer who suggests “some employers may choose to bump workers above the salary threshold, avoiding the problem entirely. But many employees will probably be “re-classified” as hourly workers at which time the number of hours they work might be limited or carefully monitored and tracked.” That translates to some employees can expect reprisals to convince them the new rules are bad for them, as well as business.
These new rules offer modest help to a modest share of working people living on their wages. It is a conservative change, albeit in the right direction, to reduce income inequality. It highlights class conflicts between working people and business owners. Business fights every effort to improve wages as they have here even to the point where low wages are so low they drag down the economy and reduce economic growth. These are new rules, but it’s an old battle.
New overtime rules for the Federal Labor Standards Act (FLSA) will begin December 1 of this year. Current overtime rules only apply to someone paid a salary equal to or less than $23,660 a year or to someone paid an hourly wage, a decision entirely at the discretion of the employer. FLSA rules calls for pay at a rate of time and a half for hours over forty hours a week. Over time pay gives employers the incentive to hire additional people rather than pay overtime; two people working sixty hours a week equals three people working forty hours a week.
The current overtime pay exemptions date from August 23, 2004 following a substantial revision of Fair Labor Standards regulations by the Bush Administration. The revision added lots of new language that made it easier to exempt executive, administrative and professional employees from overtime pay as long as they work for a salary above $23,660.
The new rules are sometimes called white-collar rules because exemptions to overtime pay have never applied to “manual laborers or other ‘blue collar’ workers who perform work involving repetitive operations with their hands, physical skill and energy.” For example, with the current white collar rules an employee can be denied overtime pay if employed in a bona fide executive, administrative or professional capacity and compensated by salary at a rate of not less than $455 per week ($23,660 a year) exclusive of board, lodging or other facilities, whose primary duty is the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer's customers and whose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.
On December 1 the minimum annual salary requirement for overtime pay goes up to $47,476, but does not change the regulations like the one paraphrased above. The new minimum is high enough that some employees previously exempted from - denied - the right to overtime pay will be entitled to it.
Opponents
Business owners, managers and those who identify with business owners and managers will not like the change. It will raise wage costs and lower profits; the changes redistribute income to wage earners at the expense of individual business profits. The people who do not like the policy do not generally mention how much easier it was to avoid paying overtime after the Bush administration revisions of 2004, or how stagnant wages reduce buying power and limit economic growth.
The Department of Labor estimates the new rules will apply to 4.2 million people and if overtime pay raises buying power enough to increase total spending, more production and sales will increase collective business profits. In that way the rules might improve the economy for the larger society but individual businesses will have higher net profits if they can get essential work done by avoiding over time pay.
Opposition comments published in the newspapers (Washington Post, May 21, 2016, “The potential pitfalls of new overtime rule”) and the Internet avoid confronting the redistribution issue or the abuses so common to overtime. The Washington Post article cites the ominous proviso offered by unnamed business groups that “ what workers will probably see a lot less of is flexibility on the job.” … “As an employer, you will have to think about how much time did the person really work … It’s a headache and because it’s a headache, the employer’s first reaction is going to be: ‘No, you can’t work from home. Sorry.’ ”
Beware the deception. Compliance with the FLSA already requires tracking hours worked, whether they are at an office or work from a remote computer. The first sentence of the Fair Labor Standards Act requires that all hours of work will be compensated. Executive, administrative and professional occupations are exempt from overtime pay, but they are entitled to regular pay for work over forty hours a week. Flexibility for salaried people should not turn overtime hours into free work. People who get pressured into working fifty and sixty hours a week who get paid a full time salary based on legally designated full time workweek of forty hours giveaway overtime hours for free.
The Washington Post article cites a lawyer who suggests “some employers may choose to bump workers above the salary threshold, avoiding the problem entirely. But many employees will probably be “re-classified” as hourly workers at which time the number of hours they work might be limited or carefully monitored and tracked.” That translates to some employees can expect reprisals to convince them the new rules are bad for them, as well as business.
These new rules offer modest help to a modest share of working people living on their wages. It is a conservative change, albeit in the right direction, to reduce income inequality. It highlights class conflicts between working people and business owners. Business fights every effort to improve wages as they have here even to the point where low wages are so low they drag down the economy and reduce economic growth. These are new rules, but it’s an old battle.
Saturday, April 16, 2016
Taxes, Preferences and Privileges
If two people or two families have the same income but pay different income taxes, it is worth asking why? The 2015 federal income taxes have much higher tax rates for wage income than dividend income or capital gains. For a new college graduate fortunate enough to find a job earning a salary of $40,000, their income will be taxed as wages with federal tax liability of $3,973.75, assuming the standard deduction and one exemption.
If the $40,000 wages were taxed as dividends are taxed they would have paid nothing; no federal income tax at all. That is because a single tax payer can earn up to $47,750 of dividend income, or capital gains, or a combination, and after allowing for the $4,000 exemption and the standard deduction of $6,300 there is no tax on the remaining taxable income of $37,450.
If two college graduates find $40,000 a year jobs, marry and file a joint return on their $80,000 wage income they will pay $7,987.50 in federal taxes. If the $80,000 wages were taxed as dividends are taxed they would have paid nothing; no federal income tax at all. That is because a married couple with no children can earn up to $95,500 of dividends, capital gains or a combination, and after allowing for two $4,000 exemptions and the standard deduction of $12,600 there is no federal income tax on the remaining taxable income of $74,900.
Dividends or capital gains for an individual filer have no tax up to $47,750 of taxable income but only a 15 percent tax rate above that for dividend and capital gains. While zero tax makes for great savings a 15 percent tax rate saves at least 10 percent and up to 24.9 percent on tax rates compared to the tax rates on wage income above $47,750.
For an individual filer with $75,000 of wage income their federal tax will be $11,968.75, assuming one exemption and the standard deduction. If the income was $50,000 of salary and $25,000 of dividends, their tax drops to $9,806.25, a saving of $2,162.50. If the couple above each earned $35,000 salaries and $10,000 of dividend income their tax would drop from $7,987.50 to $6,487.50, a saving of $1,500.
A tax advantage for dividends and capital gains gives wage earners an incentive to save and invest in stocks: better to earn some of that tax free income. Tax free dividends favors older people with more years to save, but the law applies to everyone and so amounts to a preference for dividend income over wage income. I would call it a preference for dividend income rather than a privilege because everyone has the chance to adopt their personal finance to take advantage of the preference. It’s not always that way.
Some of the wealthy and the well placed have the ability to define their income. Wage earners get a w-2 form and have to pay tax on wages. Corporate Boards and corporate officers have the ability to define their pay in non-wage types of stock option arrangements to avoid the w-2 and convert income to be reported on Form 1099. The privileged have the ability to opt for the 15 percent tax rate instead of the 36.9 percent tax rate that applies to taxable wages at or above $464,850.
A million dollars of wage income for a married couple with a joint return and standard deduction pays a federal income tax of $319,865.44, but only $135,675.00 for 1099 income a saving of $184,190.40. I hear people say wealth has its privileges, but wealth creates the privileges for a selected few who use their tax privileges to perpetuate an upper class and the growing income inequality.
If the $40,000 wages were taxed as dividends are taxed they would have paid nothing; no federal income tax at all. That is because a single tax payer can earn up to $47,750 of dividend income, or capital gains, or a combination, and after allowing for the $4,000 exemption and the standard deduction of $6,300 there is no tax on the remaining taxable income of $37,450.
If two college graduates find $40,000 a year jobs, marry and file a joint return on their $80,000 wage income they will pay $7,987.50 in federal taxes. If the $80,000 wages were taxed as dividends are taxed they would have paid nothing; no federal income tax at all. That is because a married couple with no children can earn up to $95,500 of dividends, capital gains or a combination, and after allowing for two $4,000 exemptions and the standard deduction of $12,600 there is no federal income tax on the remaining taxable income of $74,900.
Dividends or capital gains for an individual filer have no tax up to $47,750 of taxable income but only a 15 percent tax rate above that for dividend and capital gains. While zero tax makes for great savings a 15 percent tax rate saves at least 10 percent and up to 24.9 percent on tax rates compared to the tax rates on wage income above $47,750.
For an individual filer with $75,000 of wage income their federal tax will be $11,968.75, assuming one exemption and the standard deduction. If the income was $50,000 of salary and $25,000 of dividends, their tax drops to $9,806.25, a saving of $2,162.50. If the couple above each earned $35,000 salaries and $10,000 of dividend income their tax would drop from $7,987.50 to $6,487.50, a saving of $1,500.
A tax advantage for dividends and capital gains gives wage earners an incentive to save and invest in stocks: better to earn some of that tax free income. Tax free dividends favors older people with more years to save, but the law applies to everyone and so amounts to a preference for dividend income over wage income. I would call it a preference for dividend income rather than a privilege because everyone has the chance to adopt their personal finance to take advantage of the preference. It’s not always that way.
Some of the wealthy and the well placed have the ability to define their income. Wage earners get a w-2 form and have to pay tax on wages. Corporate Boards and corporate officers have the ability to define their pay in non-wage types of stock option arrangements to avoid the w-2 and convert income to be reported on Form 1099. The privileged have the ability to opt for the 15 percent tax rate instead of the 36.9 percent tax rate that applies to taxable wages at or above $464,850.
A million dollars of wage income for a married couple with a joint return and standard deduction pays a federal income tax of $319,865.44, but only $135,675.00 for 1099 income a saving of $184,190.40. I hear people say wealth has its privileges, but wealth creates the privileges for a selected few who use their tax privileges to perpetuate an upper class and the growing income inequality.
Wednesday, January 27, 2016
Only One Thing Can Save Us
Thomas Geoghegan, Only One Thing Can Save Us: Why America Needs a New Kind of Labor Movement, (New York: The New Press, 2014), 244 pages, $25.95.
Labor lawyer and union attorney Thomas Geoghegan has returned with another book that starts with a question. “Do you think labor will ever come back?” Geoghegan never answers yes or no, but as the title suggests, he argues the economy and the middle class will never do well if the labor movement does not revive.
The book has twelve chapters divided into three sections. The six chapters in the first section identify and discuss a variety of specific problems that plague the labor movement and the middle class.
We learn early the author is sixty-five years old and thinking how much longer he will have to work to keep living in the disappearing middle class. The stories and discussion in Chapter One introduce matters Geoghegan takes up later in detail. Include in this list the Democratic party that does so little for labor; that more education alone will not reduce inequality; that Senate filibuster rules and gerrymandering U.S. House districts help prevent labor law reform; that organized or unorganized labor should consider a variety of hit-and run political style strikes and disruptions. And most important America has to restore the labor movement to keep what’s left of the middle class.
Chapter two, entitled “There’s No Middle Class,” suggests the low and stagnate wages eroding the middle class result from deliberate policies of business. Management expects to hire and fire at will without regard for the effect on the middle class. Discussion compares practices and attitudes at American companies like Boeing and Caterpillar with business operations in Germany. In the U.S. innovation comes only from the top; in Germany it also comes from the bottom.
In Chapter three Geoghegan declares labor too weak to fight, at least with the old and conventional methods. Too many legal and constitutional limitations along with too much hostility in bad press generate fear or indifference in the working class. Here he describes building a labor movement that targets short-term strikes and disruptions.
Geoghegan continues with the disruption argument in Chapter four by writing about the 2012 Chicago teachers strike. This chapter is the first of two lengthy discussions of Chicago’s public education, which comes up again in Chapter nine. Georghegan lives in Chicago and he was the attorney for the Chicago teachers union for two years before the strike so readers get a detailed discussion of education and labor abuses by Democrat Rahm Emanuel and his cronies. He concludes strikes today must be political strikes, as opposed to demands for economic negotiations. With disruption and publicity the Democrats might get embarrassed enough and nervous enough to actually do something for labor.
In Chapter five Geoghegan offers a personal story from his run for the U.S. House in a Chicago district. He tells readers only 11 thousand votes were cast for the winning candidate when there were more union members than that who could have given him a victory. Here he blames labor leaders when the rank and file split their vote or didn’t vote at all; he hopes they will stop fretting about right to work states and confront reality. He makes the charge that organized labor acts at times like a bunch of elite academics.
Next lawyer Geoghegan becomes economist Geoghegan by discussing John Maynard Keynes book, General Theory of Employment Interest and Money. The General Theory is not a general theory at all, but a theory of special cases. The book was published in 1936 in the middle of worldwide depression, but economists still insisted economies operate as self-regulating markets where unemployment would be temporary until lower wages and interest rates restore full production and employment. Keynes identified potential conditions where markets fail and do not work. He cautioned falling wages might not restore full employment for decades, or ever.
Geoghegan uses several of Keynes special case discussions to warn readers that America’s ever bigger personal debt, government debt, and foreign debt are symbols of today’s market failures. Geoghegan expects the failures to continue unless the labor movement recovers to restore middle class buying power.
Part Two entitled Education and Democracy has three chapters. Here Geoghegan ask why demoralize the party base by pushing college education as a savior for the working class? Census data show about 35 percent of adult Americans have a BA degree or above and Bureau of Labor Statistics data show only about 25 to 26 percent of Americans jobs need college degree skills. By acting like college degrees will solve the country’s problems, Obama and the Democratic Party ignore and disenfranchise 65 percent of the working class. The Democratic base votes Republican and Geoghegan argues they will continue unless the Democrats work to restore the labor movement in the way the government built the labor movement in the great depression.
Chapter eight reviews the educational principles of John Dewey, an early twentieth century writer and educator. Dewey believed schools in a democracy should teach children to act collectively as part of a community. Successful education gives children the confidence to extend democracy everywhere into politics, work, schools, and neighborhoods. Chapter nine looks at the dismal record of employee participation and democracy in the workplace and at the growing demand by corporate America to privatize the schools.
Part III has three chapters of hope and policy. Geoghegan begins this section by declaring labor must come back as something different if it can come back at all. The new labor movement needs to involve members who can and will do more for themselves and with less dues revenue.
Then he makes three proposals for change. The first suggests amending the Civil Rights Act of 1964 by adding to the list of discrimination from race, creed, color, age, and gender with the phrase “and on the basis of union membership.” The legal differences of labor law and civil rights law get a thorough review and evaluation. Here there is excellent discussion of Martin Luther King’s efforts to link civil rights with the goals of organized labor and end the legacy of slavery.
The second proposal wants to end the filibuster rule, which Geoghegan thinks of as the “ultimate” labor law in that historically it assured the defeat of Congressional efforts to end slavery, the ultimate system of cheap labor. More recently it was used to defeat labor law reform and to neutralize labor law enforcement by blocking nominees for the National Labor Relations Board. Here discussion becomes a speculative conversation of problems and possibilities with an emphasis on hope.
The third proposal wants to change corporate law, which is broken because there is no stockholder influence, nor input from employees that work in a dictatorship. Geoghegan recommends that states require corporations to have elected work committees to monitor compliance with labor law and contracts, or to have employees serve on corporate boards to increase managerial accountability. Here the pros are assumed; cons do not exist in a discussion of political possibilities and the chances it can result.
That concludes Chapter ten, which brings two more proposals for change in Chapter eleven, entitled if “All Else Fails.” The two additional proposals are not overt legislation like those in Chapter Ten, but they amount to a change of attitude and practice by organized labor. The first proposal recommends that organized labor work toward more employee participation in managerial decision making. He describes German labor relations that include a thorough discussion of the UAW efforts to organize works councils in the VW plant at Chattanooga, Tennessee.
The second proposal in Chapter Ten suggests giving up on exclusive representation and organizing a minority in the workplace willing to pay their dues. Here Geoghegan raises a variety of political, legal and practical pros and cons. He parcels blame to the right wing that wants to bust organized labor, and to organized labor for getting complacent with the money from agency shop fees and exclusive representation. There is also some more dark discussion of Supreme Court rulings. Geoghegan finishes part III with a short Chapter Eleven confined to hope, as the title “Why We Live in Hope” implies.
The book has the elements of a serious academic tract but tilts away from academia in a chatty conversational voice, which could be unique. There is technical discussion of labor law. Also the book does not use references or supply a bibliography, although reference to some authors and titles appear in the text. The book does have an index.
Geoghegan likes to summarize the merits and demerits of back and forth conversations with peers, colleagues and friends. At one point he is having dinner with a friend in a Washington restaurant and the conversation turns to labor reform. He recounts the conversation, but his friend’s conclusions leave him in shock; he did not realize how few Democrats in high places are friends of labor.
He also likes to ask questions and sometimes doubts his answers as in “Of course, I’m being ridiculous” and go on to elaborate the complications. He likes to repeat controversial conclusions others tend to avoid and then to add another jab or two for good measure as when he mentions the GOP stole the 2000 election, and then adds but nobody cares.
Books like this need hope and this one has hope, but I also read his first book, “Which Side Are You On?” That book maps out the many problems for organized labor as of 1991 with a clear discussion of the elements of labor law and the problems of negotiating and administering collective bargaining contracts. He did that in much the same conversational style he uses now, but I do not recall lots of optimism in his earlier work. In the twenty-five years since 1991 labor, and organized labor, has continued in decline, but I feel relieved he did not measure hope then with hope now. I hope what’s left is not as small as it appears to be in 2016.
Labor lawyer and union attorney Thomas Geoghegan has returned with another book that starts with a question. “Do you think labor will ever come back?” Geoghegan never answers yes or no, but as the title suggests, he argues the economy and the middle class will never do well if the labor movement does not revive.
The book has twelve chapters divided into three sections. The six chapters in the first section identify and discuss a variety of specific problems that plague the labor movement and the middle class.
We learn early the author is sixty-five years old and thinking how much longer he will have to work to keep living in the disappearing middle class. The stories and discussion in Chapter One introduce matters Geoghegan takes up later in detail. Include in this list the Democratic party that does so little for labor; that more education alone will not reduce inequality; that Senate filibuster rules and gerrymandering U.S. House districts help prevent labor law reform; that organized or unorganized labor should consider a variety of hit-and run political style strikes and disruptions. And most important America has to restore the labor movement to keep what’s left of the middle class.
Chapter two, entitled “There’s No Middle Class,” suggests the low and stagnate wages eroding the middle class result from deliberate policies of business. Management expects to hire and fire at will without regard for the effect on the middle class. Discussion compares practices and attitudes at American companies like Boeing and Caterpillar with business operations in Germany. In the U.S. innovation comes only from the top; in Germany it also comes from the bottom.
In Chapter three Geoghegan declares labor too weak to fight, at least with the old and conventional methods. Too many legal and constitutional limitations along with too much hostility in bad press generate fear or indifference in the working class. Here he describes building a labor movement that targets short-term strikes and disruptions.
Geoghegan continues with the disruption argument in Chapter four by writing about the 2012 Chicago teachers strike. This chapter is the first of two lengthy discussions of Chicago’s public education, which comes up again in Chapter nine. Georghegan lives in Chicago and he was the attorney for the Chicago teachers union for two years before the strike so readers get a detailed discussion of education and labor abuses by Democrat Rahm Emanuel and his cronies. He concludes strikes today must be political strikes, as opposed to demands for economic negotiations. With disruption and publicity the Democrats might get embarrassed enough and nervous enough to actually do something for labor.
In Chapter five Geoghegan offers a personal story from his run for the U.S. House in a Chicago district. He tells readers only 11 thousand votes were cast for the winning candidate when there were more union members than that who could have given him a victory. Here he blames labor leaders when the rank and file split their vote or didn’t vote at all; he hopes they will stop fretting about right to work states and confront reality. He makes the charge that organized labor acts at times like a bunch of elite academics.
Next lawyer Geoghegan becomes economist Geoghegan by discussing John Maynard Keynes book, General Theory of Employment Interest and Money. The General Theory is not a general theory at all, but a theory of special cases. The book was published in 1936 in the middle of worldwide depression, but economists still insisted economies operate as self-regulating markets where unemployment would be temporary until lower wages and interest rates restore full production and employment. Keynes identified potential conditions where markets fail and do not work. He cautioned falling wages might not restore full employment for decades, or ever.
Geoghegan uses several of Keynes special case discussions to warn readers that America’s ever bigger personal debt, government debt, and foreign debt are symbols of today’s market failures. Geoghegan expects the failures to continue unless the labor movement recovers to restore middle class buying power.
Part Two entitled Education and Democracy has three chapters. Here Geoghegan ask why demoralize the party base by pushing college education as a savior for the working class? Census data show about 35 percent of adult Americans have a BA degree or above and Bureau of Labor Statistics data show only about 25 to 26 percent of Americans jobs need college degree skills. By acting like college degrees will solve the country’s problems, Obama and the Democratic Party ignore and disenfranchise 65 percent of the working class. The Democratic base votes Republican and Geoghegan argues they will continue unless the Democrats work to restore the labor movement in the way the government built the labor movement in the great depression.
Chapter eight reviews the educational principles of John Dewey, an early twentieth century writer and educator. Dewey believed schools in a democracy should teach children to act collectively as part of a community. Successful education gives children the confidence to extend democracy everywhere into politics, work, schools, and neighborhoods. Chapter nine looks at the dismal record of employee participation and democracy in the workplace and at the growing demand by corporate America to privatize the schools.
Part III has three chapters of hope and policy. Geoghegan begins this section by declaring labor must come back as something different if it can come back at all. The new labor movement needs to involve members who can and will do more for themselves and with less dues revenue.
Then he makes three proposals for change. The first suggests amending the Civil Rights Act of 1964 by adding to the list of discrimination from race, creed, color, age, and gender with the phrase “and on the basis of union membership.” The legal differences of labor law and civil rights law get a thorough review and evaluation. Here there is excellent discussion of Martin Luther King’s efforts to link civil rights with the goals of organized labor and end the legacy of slavery.
The second proposal wants to end the filibuster rule, which Geoghegan thinks of as the “ultimate” labor law in that historically it assured the defeat of Congressional efforts to end slavery, the ultimate system of cheap labor. More recently it was used to defeat labor law reform and to neutralize labor law enforcement by blocking nominees for the National Labor Relations Board. Here discussion becomes a speculative conversation of problems and possibilities with an emphasis on hope.
The third proposal wants to change corporate law, which is broken because there is no stockholder influence, nor input from employees that work in a dictatorship. Geoghegan recommends that states require corporations to have elected work committees to monitor compliance with labor law and contracts, or to have employees serve on corporate boards to increase managerial accountability. Here the pros are assumed; cons do not exist in a discussion of political possibilities and the chances it can result.
That concludes Chapter ten, which brings two more proposals for change in Chapter eleven, entitled if “All Else Fails.” The two additional proposals are not overt legislation like those in Chapter Ten, but they amount to a change of attitude and practice by organized labor. The first proposal recommends that organized labor work toward more employee participation in managerial decision making. He describes German labor relations that include a thorough discussion of the UAW efforts to organize works councils in the VW plant at Chattanooga, Tennessee.
The second proposal in Chapter Ten suggests giving up on exclusive representation and organizing a minority in the workplace willing to pay their dues. Here Geoghegan raises a variety of political, legal and practical pros and cons. He parcels blame to the right wing that wants to bust organized labor, and to organized labor for getting complacent with the money from agency shop fees and exclusive representation. There is also some more dark discussion of Supreme Court rulings. Geoghegan finishes part III with a short Chapter Eleven confined to hope, as the title “Why We Live in Hope” implies.
The book has the elements of a serious academic tract but tilts away from academia in a chatty conversational voice, which could be unique. There is technical discussion of labor law. Also the book does not use references or supply a bibliography, although reference to some authors and titles appear in the text. The book does have an index.
Geoghegan likes to summarize the merits and demerits of back and forth conversations with peers, colleagues and friends. At one point he is having dinner with a friend in a Washington restaurant and the conversation turns to labor reform. He recounts the conversation, but his friend’s conclusions leave him in shock; he did not realize how few Democrats in high places are friends of labor.
He also likes to ask questions and sometimes doubts his answers as in “Of course, I’m being ridiculous” and go on to elaborate the complications. He likes to repeat controversial conclusions others tend to avoid and then to add another jab or two for good measure as when he mentions the GOP stole the 2000 election, and then adds but nobody cares.
Books like this need hope and this one has hope, but I also read his first book, “Which Side Are You On?” That book maps out the many problems for organized labor as of 1991 with a clear discussion of the elements of labor law and the problems of negotiating and administering collective bargaining contracts. He did that in much the same conversational style he uses now, but I do not recall lots of optimism in his earlier work. In the twenty-five years since 1991 labor, and organized labor, has continued in decline, but I feel relieved he did not measure hope then with hope now. I hope what’s left is not as small as it appears to be in 2016.
Thursday, January 21, 2016
Ted Cruz, Donald Trump and the GOP keys to the White House
A recent article in the Washington Post from January 14, 2016 wants to know if working-class whites are the GOP keys to the White House? Reporters Philip Rucker and Robert Costa ventured to New Hampshire to find out how the GOP will try to persuade many more white working class Americans to vote Republican. Ted Cruz campaign manager, Jeff Roe said, “Some of them have never voted.” … “If they can be convinced to come out and vote, we win.”
For some decades now the GOP has pushed one policy: cut taxes and spending and everyone will prosper. During the same decades the Democrats have pushed one policy: get education. Go to college and everyone will prosper. Maybe the working class doesn’t vote because they recognize both Republicans and Democrats ignore them with useless slogans?
Campaign Manager Roe is right though, the working class vote could determine an election because they are the biggest voting block of any voting block. Census data shows 65 percent of the working age adult population does not have college degrees, which suggests the Republicans and Democrats have ignored the economic circumstance of at least 65 percent of the working class.
The Democrats lost the working class in the 1980’s when Ronald Reagan got their vote talking patriotism and a selection of social issues like abortion and gun control, along with lower taxes and union busting. President Obama has done next to nothing to get them back. He finally endorsed a higher minimum wage and a tiny improvement in overtime rules, while stagnant wages and the union busting going on around him.
Over the past thirty years the Republicans have done a good job getting the working class worked up and angry with someone, or something, while getting them to forget the low wages they earn from private sector employers. Now though Rucker and Costa assure their readers Republican see the need for new strategies. They quoted Roe again, he told them “The Republican argument can no longer be just about taxes and spending. It’s got to speak to the working poor and the culture.”
Trump told voters in New Hampshire “You people know better than anybody about jobs leaving an area. Look at what happened to you?” He is the bluntest of all the candidates with his opposition to immigration and the shift of jobs abroad. His campaign manager Corey Lewandowski said “People don’t feel like these jobs have disappeared, they’ve been stolen, and they don’t mind if someone is speaking forcefully about taking them back for blue-collar America.”
When Cruz and Trump pitch trade protection and limits to immigration and foreign investment they speak to the working class, but not to business and corporate America. That part of the Republican party wants all the immigration they can get to keep their supply of cheap labor flowing. That part of the Republican Party expects to roam the world looking for investment opportunities in countries with cheap labor. That part of the Republican party ignores decades of $400 and $500 billion dollar trade deficits, and ignores how much U.S. debt and deficit spending supports employment abroad. But then again the Democrats ignore it too.
The idea that Trump and Cruz will take over the Republican Party to impose policies business does not want sounds too far fetched to consider in spite of the polls that show them leading. I find it ironic that Donald Trump would have a television show, the Apprentice, where he casts an imperious eye around the board room table and fires one person on each episode of the show.
Trump knows that Americans work at will, a euphemistic term for getting fired at any time, and for any reason, at the whim of an employer. Could there be anyone who likes to be the boss more than Donald Trump?
The only way to have job rights in the United States is to negotiate an employment contract. Big time athletes and their coaches have them. Movie stars and celebrities get them. Unions negotiate them, but the Republicans work hard to bust organized labor while the Democrats look on, mostly in silence. Private sector unions have sunk to six or seven percent of private sector jobs. Few of the remaining millions who work at will seem to realize unions are the only means available to negotiate job rights or protect their declining standard of living.
The Democrats know that and so do the Republicans. Unions are dead; long live unions.
For some decades now the GOP has pushed one policy: cut taxes and spending and everyone will prosper. During the same decades the Democrats have pushed one policy: get education. Go to college and everyone will prosper. Maybe the working class doesn’t vote because they recognize both Republicans and Democrats ignore them with useless slogans?
Campaign Manager Roe is right though, the working class vote could determine an election because they are the biggest voting block of any voting block. Census data shows 65 percent of the working age adult population does not have college degrees, which suggests the Republicans and Democrats have ignored the economic circumstance of at least 65 percent of the working class.
The Democrats lost the working class in the 1980’s when Ronald Reagan got their vote talking patriotism and a selection of social issues like abortion and gun control, along with lower taxes and union busting. President Obama has done next to nothing to get them back. He finally endorsed a higher minimum wage and a tiny improvement in overtime rules, while stagnant wages and the union busting going on around him.
Over the past thirty years the Republicans have done a good job getting the working class worked up and angry with someone, or something, while getting them to forget the low wages they earn from private sector employers. Now though Rucker and Costa assure their readers Republican see the need for new strategies. They quoted Roe again, he told them “The Republican argument can no longer be just about taxes and spending. It’s got to speak to the working poor and the culture.”
Trump told voters in New Hampshire “You people know better than anybody about jobs leaving an area. Look at what happened to you?” He is the bluntest of all the candidates with his opposition to immigration and the shift of jobs abroad. His campaign manager Corey Lewandowski said “People don’t feel like these jobs have disappeared, they’ve been stolen, and they don’t mind if someone is speaking forcefully about taking them back for blue-collar America.”
When Cruz and Trump pitch trade protection and limits to immigration and foreign investment they speak to the working class, but not to business and corporate America. That part of the Republican party wants all the immigration they can get to keep their supply of cheap labor flowing. That part of the Republican Party expects to roam the world looking for investment opportunities in countries with cheap labor. That part of the Republican party ignores decades of $400 and $500 billion dollar trade deficits, and ignores how much U.S. debt and deficit spending supports employment abroad. But then again the Democrats ignore it too.
The idea that Trump and Cruz will take over the Republican Party to impose policies business does not want sounds too far fetched to consider in spite of the polls that show them leading. I find it ironic that Donald Trump would have a television show, the Apprentice, where he casts an imperious eye around the board room table and fires one person on each episode of the show.
Trump knows that Americans work at will, a euphemistic term for getting fired at any time, and for any reason, at the whim of an employer. Could there be anyone who likes to be the boss more than Donald Trump?
The only way to have job rights in the United States is to negotiate an employment contract. Big time athletes and their coaches have them. Movie stars and celebrities get them. Unions negotiate them, but the Republicans work hard to bust organized labor while the Democrats look on, mostly in silence. Private sector unions have sunk to six or seven percent of private sector jobs. Few of the remaining millions who work at will seem to realize unions are the only means available to negotiate job rights or protect their declining standard of living.
The Democrats know that and so do the Republicans. Unions are dead; long live unions.
Tuesday, January 12, 2016
Friedrichs v. California Teachers Association
Friedrichs v. California Teachers Association et al.
In Friedrichs v. California Teachers Association ten teachers filed suit because they claim that many union stances taken in collective bargaining are bad for public schoolteachers and bad for the children they teach. They want the Court to rule that individuals have a right to choose whether or not they join a union. California and twenty-two other states require them to pay agency fees in lieu of union dues to support collective bargaining.
In all states that have adopted the option of a right-to-work as specified by the Taft-Hartley Amendments to the National Labor Relations Act the matter in question is irrelevant. Those states have already banned unions from collecting agency fees. California is not a right to work state and so anti-union groups like the Center for Individual Rights keep encouraging lawsuits hoping to bust unions.
On the Center for Individual Rights web site, Plaintiffs make a number of statements and claims that ignore two important previous Supreme Court cases: Abood v. Detroit Board of Education from 1977 and Harris v. Quinn from 2014. The new suit repeats the same claims just finished in Harris v. Quinn.
Abood v. Detroit Board of Education
In the case Abood v. Detroit Board of Education some public school teachers objected to the requirement in the Detroit Public School's collective bargaining agreement that required non-union members to pay a service charge in lieu of union dues. The Supreme Court allowed the requirement as payment for a non-member's "fair share" as long as the union used the non-member funds only for contract negotiations, contract administration and grievance procedures rather than for political or ideological activities.
Section 9(a) of the National Labor Relations Act (NLRA) of 1935 as amended and administered by the National Labor Relations Board requires the union to represent all employees in the bargaining unit not just its members following a majority vote in a democratic election to establish a union. Because United States labor law forces a certified union to represent all employees the Supreme Court declared a compulsory surcharge fairly distributes "the cost of the union among those who benefit" and "counter acts the incentive that employees might otherwise have to become 'free riders.' "
The court acknowledged in its Abood opinion that such a "fair share" provision has an impact on public employee first amendment rights of free speech, which is why they did not allow an agency fee to include any union dues that support lobbying or political expenses. The Supreme Court requires a partial refund of agency fees equal to the percentage of a union budget that goes for political uses. Plaintiffs in the new Friedrich v. CTA suit acknowledge the refund. I also note that corporate shareholders confront the same free speech issues when corporate boards pay to lobby, but without compensation where profits become a lobbying expense.
Harris v. Quinn
In the case of Harris v. Quinn concluded in 2014 the state of Illinois used federal funds for a Medicaid Rehabilitation Program. The Rehabilitation program provides federal funds for states to pay personal assistants chosen from a state approved pool of personal assistants who provide the in-home care. Three personal assistants in a bargaining unit of the Service Employees International Union petitioned a federal court for an injunction to end the non-union agency fee as a violation of their rights to free speech under the constitution. Petitioners wanted the court to abandon the doctrine established in the Abood case.
The Court voted 5 to 4 that the agency fee could apply to “full fledged” employees, only not to the special case of Illinois personal assistants. The majority opinion included a discussion of objections to the Abood opinion, but the majority decided not to overturn it.
In their written opinion the majority admitted “the wages and benefits of personal assistants have been substantially improved; orientation and training programs, background checks, and a program to deal with lost and erroneous paychecks have been instituted; and a procedure was established to resolve grievances arising under the collective-bargaining agreement . . . and we will assume that this is correct.”
Justice Kagen wrote a 25 page dissent that supported the Abood doctrine because “The only point in dispute is whether it matters that the personal assistants here are employees not only of the State but also of the disabled persons for whom they care.” A final point in the minority opinion suggested the majority found it too difficult to write a legal justification to throw out compulsory fees for labor unions when the court has relied on “fair share” rules in deciding cases involving compulsory fees outside the labor context.
Fredrichs v. California Teachers Association et al
In the present case of Friedrichs v. CTA anti union groups refuse to accept Harris v. Quinn when they can develop another claim that might destroy the agency shop in all the states. In Friedrichs v. CTA plaintiffs claim that collective bargaining amounts to a political act even though they admit those in the bargaining unit can get a refund for their part of the agency fee. In this way they want the Supreme Court to agree that contract negotiations, contract administration and grievance procedures are politics, which require a 100 percent refund of agency fees.
The court will have to overrule itself after just two years, since the Harris v. Quinn decision came June 30, 2014. Since both plaintiff and defendant alike know the court acts as a divided political body, the decision could go either way. However, the anti union groups have taken a few liberties in their public statements about their case.
The Center for Individual Rights writes on its web site that in collective bargaining the union claims to speak for all teachers. Instead Federal labor law requires the union to represent all employees in a bargaining unit of a certified union. The claim made by the Center for Individual Rights contradicts Section 9(a) of the Taft-Hartley Act. Section 9(a) reads “Representatives designated or selected for the purposes of collective bargaining by the majority of the employees in a unit appropriate for such purposes, shall be the exclusive representatives of all the employees in such unit for the purposes of collective bargaining in respect to rates of pay, wages, hours of employment, or other conditions of employment: …”
The labor movement has endured free speech attacks for over a hundred years, nothing is new in Friedrich v. CTA. A hundred years ago business owners blamed strikes on outside agitators. Outsiders would come in and stir up the benevolent owner's happy and contented employees and cause a strike, but he was not going to speak with any labor agitators because he intended to faithfully defend and protect the liberty and free speech for his loyal employees who did not want to join a union.
If employees in a union can be free to drop out as part of a right to work and free speech, then the Supreme Court ought to end the compulsory legal requirement for unions to represent free riders, or really freeloaders. A lawsuit that ends the agency shop but not the “exclusive representatives of all the employees” requires the Supreme Court to deny free speech and free association to unions and their members.
But There’s More
There’s more because one of the plaintiffs in the Friedrich v. CTA suit, a teacher named Harlan Elrich made a variety of personal complaints about unions in an op-ed piece in the January 3 Wall Street Journal. He complains because his “union spends resources pushing for ever-higher teacher salaries.” He favors “decent salaries” but claims teachers are “already well paid compared with everyone else in the Central Valley.”
He complains because the union negotiates policies for “discipline, grievances and seniority” when he knows many of his colleagues are incompetent and the union represents them anyway. It does not seem to occur to him that the union has negotiated a procedure for internal due process to prevent arbitrary firings without cause and that given their legal obligation to represent all employees imposed on them by Federal labor law the union has no choice but to defend all members of the union.
He doesn’t like seniority either because he thinks younger teachers can be better than older teachers, but he ignores that younger teachers are also cheaper teachers and management may find advantage firing higher paid older teachers to replace with lower paid younger teachers, or replace them with even lower paid substitute teachers.
Mr. Elrich adopts each and every point of the upper class attack on teacher unions. His op-ed piece reads like a check list of points supplied by the staff at the Center for Individual Rights or the National Right to Work Legal Defense Foundation. Unions would do better getting their members more involved and lowering their dues, but organized labor will always have to confront divisive people like Mr. Elrich who can’t accept he’s just one of millions in the exploited working class, something he will always be. He seems not to know the wealthy upper class howl with laughter at fools like him.
In Friedrichs v. California Teachers Association ten teachers filed suit because they claim that many union stances taken in collective bargaining are bad for public schoolteachers and bad for the children they teach. They want the Court to rule that individuals have a right to choose whether or not they join a union. California and twenty-two other states require them to pay agency fees in lieu of union dues to support collective bargaining.
In all states that have adopted the option of a right-to-work as specified by the Taft-Hartley Amendments to the National Labor Relations Act the matter in question is irrelevant. Those states have already banned unions from collecting agency fees. California is not a right to work state and so anti-union groups like the Center for Individual Rights keep encouraging lawsuits hoping to bust unions.
On the Center for Individual Rights web site, Plaintiffs make a number of statements and claims that ignore two important previous Supreme Court cases: Abood v. Detroit Board of Education from 1977 and Harris v. Quinn from 2014. The new suit repeats the same claims just finished in Harris v. Quinn.
Abood v. Detroit Board of Education
In the case Abood v. Detroit Board of Education some public school teachers objected to the requirement in the Detroit Public School's collective bargaining agreement that required non-union members to pay a service charge in lieu of union dues. The Supreme Court allowed the requirement as payment for a non-member's "fair share" as long as the union used the non-member funds only for contract negotiations, contract administration and grievance procedures rather than for political or ideological activities.
Section 9(a) of the National Labor Relations Act (NLRA) of 1935 as amended and administered by the National Labor Relations Board requires the union to represent all employees in the bargaining unit not just its members following a majority vote in a democratic election to establish a union. Because United States labor law forces a certified union to represent all employees the Supreme Court declared a compulsory surcharge fairly distributes "the cost of the union among those who benefit" and "counter acts the incentive that employees might otherwise have to become 'free riders.' "
The court acknowledged in its Abood opinion that such a "fair share" provision has an impact on public employee first amendment rights of free speech, which is why they did not allow an agency fee to include any union dues that support lobbying or political expenses. The Supreme Court requires a partial refund of agency fees equal to the percentage of a union budget that goes for political uses. Plaintiffs in the new Friedrich v. CTA suit acknowledge the refund. I also note that corporate shareholders confront the same free speech issues when corporate boards pay to lobby, but without compensation where profits become a lobbying expense.
Harris v. Quinn
In the case of Harris v. Quinn concluded in 2014 the state of Illinois used federal funds for a Medicaid Rehabilitation Program. The Rehabilitation program provides federal funds for states to pay personal assistants chosen from a state approved pool of personal assistants who provide the in-home care. Three personal assistants in a bargaining unit of the Service Employees International Union petitioned a federal court for an injunction to end the non-union agency fee as a violation of their rights to free speech under the constitution. Petitioners wanted the court to abandon the doctrine established in the Abood case.
The Court voted 5 to 4 that the agency fee could apply to “full fledged” employees, only not to the special case of Illinois personal assistants. The majority opinion included a discussion of objections to the Abood opinion, but the majority decided not to overturn it.
In their written opinion the majority admitted “the wages and benefits of personal assistants have been substantially improved; orientation and training programs, background checks, and a program to deal with lost and erroneous paychecks have been instituted; and a procedure was established to resolve grievances arising under the collective-bargaining agreement . . . and we will assume that this is correct.”
Justice Kagen wrote a 25 page dissent that supported the Abood doctrine because “The only point in dispute is whether it matters that the personal assistants here are employees not only of the State but also of the disabled persons for whom they care.” A final point in the minority opinion suggested the majority found it too difficult to write a legal justification to throw out compulsory fees for labor unions when the court has relied on “fair share” rules in deciding cases involving compulsory fees outside the labor context.
Fredrichs v. California Teachers Association et al
In the present case of Friedrichs v. CTA anti union groups refuse to accept Harris v. Quinn when they can develop another claim that might destroy the agency shop in all the states. In Friedrichs v. CTA plaintiffs claim that collective bargaining amounts to a political act even though they admit those in the bargaining unit can get a refund for their part of the agency fee. In this way they want the Supreme Court to agree that contract negotiations, contract administration and grievance procedures are politics, which require a 100 percent refund of agency fees.
The court will have to overrule itself after just two years, since the Harris v. Quinn decision came June 30, 2014. Since both plaintiff and defendant alike know the court acts as a divided political body, the decision could go either way. However, the anti union groups have taken a few liberties in their public statements about their case.
The Center for Individual Rights writes on its web site that in collective bargaining the union claims to speak for all teachers. Instead Federal labor law requires the union to represent all employees in a bargaining unit of a certified union. The claim made by the Center for Individual Rights contradicts Section 9(a) of the Taft-Hartley Act. Section 9(a) reads “Representatives designated or selected for the purposes of collective bargaining by the majority of the employees in a unit appropriate for such purposes, shall be the exclusive representatives of all the employees in such unit for the purposes of collective bargaining in respect to rates of pay, wages, hours of employment, or other conditions of employment: …”
The labor movement has endured free speech attacks for over a hundred years, nothing is new in Friedrich v. CTA. A hundred years ago business owners blamed strikes on outside agitators. Outsiders would come in and stir up the benevolent owner's happy and contented employees and cause a strike, but he was not going to speak with any labor agitators because he intended to faithfully defend and protect the liberty and free speech for his loyal employees who did not want to join a union.
If employees in a union can be free to drop out as part of a right to work and free speech, then the Supreme Court ought to end the compulsory legal requirement for unions to represent free riders, or really freeloaders. A lawsuit that ends the agency shop but not the “exclusive representatives of all the employees” requires the Supreme Court to deny free speech and free association to unions and their members.
But There’s More
There’s more because one of the plaintiffs in the Friedrich v. CTA suit, a teacher named Harlan Elrich made a variety of personal complaints about unions in an op-ed piece in the January 3 Wall Street Journal. He complains because his “union spends resources pushing for ever-higher teacher salaries.” He favors “decent salaries” but claims teachers are “already well paid compared with everyone else in the Central Valley.”
He complains because the union negotiates policies for “discipline, grievances and seniority” when he knows many of his colleagues are incompetent and the union represents them anyway. It does not seem to occur to him that the union has negotiated a procedure for internal due process to prevent arbitrary firings without cause and that given their legal obligation to represent all employees imposed on them by Federal labor law the union has no choice but to defend all members of the union.
He doesn’t like seniority either because he thinks younger teachers can be better than older teachers, but he ignores that younger teachers are also cheaper teachers and management may find advantage firing higher paid older teachers to replace with lower paid younger teachers, or replace them with even lower paid substitute teachers.
Mr. Elrich adopts each and every point of the upper class attack on teacher unions. His op-ed piece reads like a check list of points supplied by the staff at the Center for Individual Rights or the National Right to Work Legal Defense Foundation. Unions would do better getting their members more involved and lowering their dues, but organized labor will always have to confront divisive people like Mr. Elrich who can’t accept he’s just one of millions in the exploited working class, something he will always be. He seems not to know the wealthy upper class howl with laughter at fools like him.
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