Copyright Capital & Main
Publisher’s Note: The premise of Rick Wartzman’s new book is a provocative one—that the long, painful decline of the American middle class can be traced in large part to business leaders’ betrayal of their own workers. In The End of Loyalty: The Rise and Fall of Good Jobs in America, Wartzman explores his thesis through the lens of four iconic U.S. companies: General Motors, General Electric, Kodak and Coca-Cola.
But Wartzman, a contributor to Fortune, the former business editor of the Los Angeles Times and a director at the Drucker Institute (as well as a board member of this publication and host of our podcast, The Bottom Line), is hardly an anti-capitalist flame-thrower. He gives full consideration to all the other factors that have eroded the middle class, from automation to the weakening of unions. His scrupulously fair and comprehensive analysis lends all the more power to his conclusion that a narrow-minded embrace of shareholder interests has perilously frayed the nation’s social contract.
— Danny Feingold
Darryl Holter: You begin your narrative with a meeting of American business leaders, who were part of the Committee for Economic Development, at the Harvard Club in 1943. There was a consensus on a new social compact between employers and employees. What were the factors that brought these people together at this moment and what did they really hope to achieve?
Rick Wartzman: There were several things going on. First of all, there was great fear. There were tens of millions of servicemen about to return home from war. And there was concern that there wouldn’t be enough jobs for them and that America might tumble back into a depression even worse than the Great Depression of the 1930s. There was, in turn, the fear that if we had another Great Depression that the country might tip into socialism or, God forbid, even into communism. It was Harrison Jones, the chairman of Coca-Cola, who said, “A great unemployment wave becomes a sea bed for -isms.”
I think the other thing, though, is that there was a feeling of responsibility that corporate leaders then exhibited toward their workers and toward their workers’ families, wanting to provide for them a decent life. This extended all the way through things like health care and retirement security, as well as good job security. Some of this could be chalked up to paternalism. But there was also an ethic that, “We’re all in this together.” America had just come through the Depression and the war, and it was more of a “we” culture than an “I” culture back then.
DH: Don’t you also think that the enhanced position of organized labor was a big difference? They won the right to do union shop agreements in exchange for the no-strike pledge during the war. They were really in a new position.
RW: Absolutely. At the beginning of the book, I focus on organized labor, especially the United Auto Workers led by Walter Reuther, and the Electrical Workers led by Jim Carey. I focus on labor so much not because I wanted this to be a labor versus management book. It transcends that. I focus on unions because they were so important in forging the social contract in this postwar Golden Age.
The lesson, I think, is that when we reached a tipping point of 25 percent to 35 percent of the private sector workforce being union members, there was a tremendous spillover effect through the rest of the economy. The upshot was that even those who didn’t carry union cards benefited greatly from what unions were able to win at the bargaining table. Even white-collar workers’ benefit structures were patterned after what unions were able to win. The gains by the big industrial unions really helped lift everybody’s boat.
DH: I detect that there was also the business antipathy to government—they feared if we don’t provide these programs, the government will do it, and that would be worse.
RW: That’s right. This really was an effort among business leaders to set up a private welfare state. They wanted the government to have some role, but they wanted it to be limited. Marion Folsom at Kodak, for example, was instrumental in the founding of Social Security back in 1935. He wanted some government safety net, but that was meant to be minimal. Companies really saw it in their own interests to provide for their workers. They did this in part for ideological reasons where they didn’t want too much of a government footprint in the economy.
DH: You describe in the book these strikes—at General Motors, at GE—that really challenged the notion of labor-management cooperation. They were resolved, but they were volatile.
RW: I think what that shows is that while there was a brief period of industrial peace, signified by the so-called Treaty of Detroit between General Motors and the Auto Workers in 1950, companies were always uneasy about organized labor. Some didn’t like unions cutting into their profits. Others didn’t want this third party intruding on their ability to communicate directly with their workers.
During this brief period of labor peace, which lasted only about a decade, there were certainly some advantages to business. Some companies, for instance, began to appreciate that five-year contracts could bring about stability, allowing them to plan a little more easily. Grievance systems were set up so that workers could have an outlet for their frustrations.
Ultimately, though, those positives weren’t enough to overcome a deep distrust and disdain for organized labor that most of management has always had. And by the late 1950s, management began to take a hard line against unions—and it would only get harder over time. Today, fewer than seven percent of private-sector workers are union members. And while some of this can be blamed on organized labor’s own missteps, the biggest reason for the decline of unions is that companies have set out to beat the hell out of them. Corporate America has really ground down organized labor through means both legal and illegal.
DH: It seemed to me also that labor itself was somewhat more institutionalized and somewhat tamed in a sense that now there was a structure for its grievances. I think a lot of people were happy to get back to work.
RW: There is an argument that in the ’30s and ’40s, this formative period for these big unions, they had a lot to fight for. Conditions were terrible. Pay was terrible. Inflation was actually running high at the end of the war, and workers needed to catch up with high prices. So people were literally willing to spill blood to get the kinds of gains that they and their families needed. Once a lot of those things began to be won, unions got a little fat and happy. Their very clear raison d’etre disappeared in some way, and even Walter Reuther would fret, “Maybe we’ve lost our soul a little bit.” You become a victim of your own success.
I think that happened to corporate America, as well, by the way. For a few decades after the war, we had no global competition; we had bombed the Japanese and Germans largely out of existence. But by the 1970s, that caught up with U.S. companies. They became victims of their own success. They got lazy and stopped investing. You could say the same for unions, which really stopped investing in membership drives and doing some of the spadework that they needed to do. They were slow to recognize changes in the economy.
DH: I wanted to ask you this question, and maybe this is in your book and I missed it. Who first coined the phrase, “We’re all Keynesians now”?
RW: I don’t know about the phrase. But there is an interesting Keynesian element to the postwar Golden Age. It was very much a Keynesian notion that if we pump higher wages into the pockets of our front-line laborers, guess what they’re going to do? They’re going to spend, and it’s going to create this virtuous cycle and keep the economy humming. This was Henry Ford’s great insight about raising his workers’ pay in a single day in 1914 from one dollar to five dollars. Suddenly, they could afford to buy his cars. That same Keynesian notion drove a lot of executives in this postwar period. They explicitly wanted to provide decent pay to their workers so as to fuel this virtuous cycle. And it fascinates me today how far companies have gotten from that. There are some very smart people, like Larry Summers, the former Treasury secretary, who say that this is a major weakness in the American economy right now. There just isn’t enough consumer spending to fuel economic growth. And that’s because front-line workers—low-wage service workers in particular—don’t have enough money in their pockets.
DH: In your book, you note that some of the better wages and benefits of that Golden Age didn’t really accrue to all segments of the working class equally. I especially like the comment, “Women and people of color were invited to the party, but they were put at the worst table.”
RW: Well, they weren’t invited for a long time. Finally, women and blacks entered the workforce in much greater numbers in the 1960s. But it still wasn’t easy. The level of bald-faced discrimination that blacks and women faced at major companies—the four companies I write about—was astonishing. Just awful.
DH: Postwar America and Europe, particularly Western Europe, departed ways when it came to building a social welfare system versus our private employer-based welfare system. I think we understand the sources of it, but what about the consequences of it, particularly in respect to health care?
RW: That’s the big one. Through the Golden Age, when companies could afford it, there was just an astonishing rise of employer-provided health care. This was one of those things where companies very explicitly didn’t want too much government intrusion into the system. It was a benefit that they could offer to attract workers, and sometimes the best workers. This was certainly true through the war where the government kept a lid on higher wages to hold down inflation but allowed more generous benefits, and so health care became one means for companies to attract labor.
It set up this precedent where you got your health care through your employer. It rose dramatically from the ’40s, when something like 16 percent of workers had basic medical coverage, to the 1970s, when more than 70 percent did. The result is that today, most Americans have health care through this employer-based system. Over the last 30 years or so, however, more and more of the costs of that system have been shifted from companies onto the shoulders of their workers and their families. In other words, the employer-provided health system has been slowly bleeding to death for 30 years—with shrinking benefits, higher premiums and higher deductibles.
DH: I always assumed that there were big differences in the economic policies between Democrats and Republicans during the ’60s and ’70s. Your treatment of economic policy suggests a surprising similarity of concerns and responses, especially with respect to inflation.
RW: Another way to say it is that Richard Nixon was the last great liberal president in America. This was a guy who raised the minimum wage. He created the EPA.
DH: And OSHA.
RW: He pushed for universal health coverage in some form.
DH: He looks pretty good nowadays.
RW: Yes, in some ways, I guess. With respect to trying to tame inflation, he intervened directly in the market with wage and price controls. Can you imagine? Some called Barack Obama a socialist. Imagine if he had done half the things that Richard Nixon actually did. I think what that illustrates is that from the 1930s until Ronald Reagan, politically and ideologically, America played on the Roosevelt playing field. Republicans pushed the ball more to the right side of the field, and Democrats pushed it more to the left, but it was the FDR playing field. Ronald Reagan ripped up the field and moved to a different stadium. Suddenly, even Democrats were playing on the Reagan playing field, with much more of a nod toward the marketplace having solutions as opposed to government having solutions. And that’s still our dominant orientation today.
DH: One of the things that your work shows is that the social compact that we talked about at the  Committee for Economic Development meeting was built on a foundation where business leaders saw the mission of business in a certain sense to provide value to shareholders, employees, customers and communities. As you show, over the course of several decades the interest of shareholders steadily pushed its way to the top of the heap. The rest of them were pushed to the side. Even customers have got the short end of the stick. It’s a long, complicated evolution, but give us a couple of the high points of this shift.
RW: What you’re talking about can’t be overstated. There are all kinds of reasons that the social contract has fallen apart. We touched on one major one, the decline of unions. Automation has also had a huge effect. So have globalization and trade. You also have a really important shift from a blue-collar-centered economy, where people with limited education and skills could find a path to the middle class. Now, as we’ve moved to a knowledge economy, people without education and skills don’t have a clear path to the middle class anymore.
All of these giant forces—globalization, automation, the shift to knowledge work—are beyond anyone’s control. If you’re an executive, you can’t really control them.
But one thing that corporate leaders can control is whether or not they embrace a stakeholder model—a model that says we’re going to take care of our shareholders, sure, but also the communities in which we operate, our customers and our workers. Instead, corporate leaders have embraced a very different model: “maximizing shareholder value.” Under this paradigm, executives aren’t trying to balance the interests of all of their stakeholders. They cast themselves as agents of the shareholders, and their only goal is drive up the value of the company’s stock. As much as anything else, corporate America’s adherence to this philosophy, which emerged in the mid-1970s, has been absolutely devastating for workers.
DH: Is there a legal basis for that?
RW: No. You will hear a lot of very smart people and very sincere executives say, “Oh, it is our fiduciary duty to maximize shareholder value.” But that’s a myth. I’ve looked at case law from the Chancery Court in Delaware, where a lot of corporations are incorporated, and this “fiduciary duty” idea just isn’t true. Some of the leading scholars in this area, like Lynn Stout from Cornell Law School, also completely demolish the idea that there’s any legal basis for this.
Nonetheless, this belief that executives have a legal obligation to maximize shareholder value is something that has become standard thinking in business schools. And it’s perpetuated by the fact that companies now link a huge percentage of CEO compensation to share price. So it is in the interest of these executives to drive up their company’s stock. But this often comes at the expense of investing for the long term, including investing in their workers. Suddenly, job security and higher compensation and training all just look like costs. And so you cut these things because that drives up profits—which, in turn, lifts the company’s shares and fattens your own paycheck—at least in the short term. But that’s not very good for most companies in the long term, and it’s certainly not good for society.
DH: Do you think there’s any chance that any of that will reverse?
RW: It’s not going to be easy. But one thing that I learned from researching this book is that sometimes counterforces begin very quietly under the surface. One counterforce that may be developing today is that more and more companies are beginning to realize that they do need to put more money into people’s pockets or they’re just going to kill the goose that laid the golden egg. You can only grind your workers into the ground so much before it actually does hurt their ability to serve your customers well, and, in turn, you lose business. This is at least some of the impulse behind Walmart finally raising its workers’ wages and instituting some training for them. I still think Walmart can do way more, but if Walmart’s starting to get it, maybe it’s a sign that others will come along.
There are also some counterforces building in terms of socially responsible investing, where dollars are being directed to those companies that think more in a long-term way and treat both the planet and their people well. That’s now a $9 trillion market—one of every five investment dollars under management in the U.S.
These trends are all very early, and there’s a lot pushing back against them, but at least some positive things are happening.
DH: Some of the policies that you described that might lead to a return to good jobs—things like raising the minimum wage, paid family leave, enforcement of labor standards, an expanded earned income tax credit—really can be only implemented by government.
RW: That’s right. And I’d add another one to that list by the way, which is portable benefits, which are becoming really important because now the fastest-growing segment of the
At the same time, one of the underlying premises to my book is that government is hugely important, but ultimately its role is limited. It sets the guardrails and provides a base safety net. But companies are the main actors. They are the ones that really have to shift their culture and practices, and we have to push them through our actions as investors and as consumers—shopping at companies that share our values and staying away from those that don’t, if we can afford to do so. You also see a lot of college-educated Millennials who want to take their talent to companies that share their values, who only want to work for those employers. We’ve got to put pressure on companies in all of these ways, pushing them to recognize that they need to share their prosperity more broadly. It’s important to note that corporate profits across America have been at record highs in recent years. The pie is not tiny. Companies across the board are just not sharing it the way they used to. They have to start sharing gains more broadly again.
DH: I think that just as we shouldn’t think of working people as being homogeneous, the same is true of business.
RW: You make a really good point. Certainly, not all business leaders think the same way. Alan Murray, who was until recently the editor of Fortune magazine and is now the chief content officer at Time Inc., is a really keen observer of all of this, and he says there are more and more CEOs who are concerned about these issues. They’re concerned in some of the same ways that those leaders at the Committee for Economic Development were concerned after World War II. There’s so much distrust of capitalism now, they realize that unless we figure out how to turn people’s perceptions from feeling like the system is rigged, and I can’t get ahead, and my kids are going to live worse off than I do, business as an institution may not survive. There’s a great Peter Drucker quote where he says, “A healthy business cannot exist in a sick society.” I think there is at least a growing recognition among some corporate leaders that this is the case.
Landslide Union Victory at Los Angeles Times
By 11:30 a.m. Friday morning the votes were tallied in the first-ever union vote taken by L.A. Times editorial staffers: 248 in favor, 44 opposed.
All was quiet nine floors above the noisy corner at Figueroa and Ninth Streets in downtown Los Angeles Friday morning. There, in a National Labor Relations Board hearing room packed with spectators, two NLRB staff members began counting ballots in the first union vote by editorial staff in the Los Angeles Times’ 136-year history. (The newspaper’s pressroom has had union representation since 2007.)
L.A. Times newsroom writers and editors who had worked for months building support for NewsGuild CWA representation watched (and tweeted) in silence as the counting began at 10:16 a.m., with union and company representatives present.
By 11:30 a.m. the vote tally revealed a landslide union victory— 248 in favor, 44 opposed. The election had been held in the Times‘ headquarters January 4, but the NLRB count was conducted today to include mail-in ballots.
The room erupted. “The ‘yes’ column was crazy!” said data journalist Anthony Pesce.
“I had this urge to laugh and cry—we had been working towards this for months,” said copy editor Kristina Toi. “This was a day we all knew was coming but at the same time it felt like it was never going to come.”
The Los Angeles Times is owned by Tronc, formerly Tribune Publishing Company. Editorial staff argued that Tronc management has challenged both working and journalistic standards, causing tumult at the top and eroding pay and benefits. Tronc’s chairman, tech CEO Michael Ferro, took a $5 million consulting fee for himself late last year, and the company also paid $4.6 million for him to use a private plane over seven months. “That $9.6 million could have been used to hire more than 70 reporters,” Steven Greenhouse, a former longtime New York Times labor reporter, wrote in an email to Capital & Main.
If Tronc executives continue trimming the size of the L.A. Times‘ newsroom, Greenhouse said, the resulting product “could result in an accelerated loss of subscribers, whether digital or paper. And any further reduction of the editorial staff will be bad for the citizens of Los Angeles,” who count on the coverage of neighborhoods, City Hall, Sacramento and Washington. He called the vote “an emphatic statement that the staff “wants more of a voice in the future of the newspaper to which they’ve devoted so much of their talent and energies.”
It will take about a week to get formal NLRB certification, Pesce said. Union activists don’t expect ballot challenges from Tronc management and will begin surveying the newsroom to determine member priorities. “After that we need to move right into bargaining,” said Pesce.
In a statement, Tronc expressed support for the outcome, despite emails and leaflets it sent out during the Guild’s organizing campaign opposing the union:
“We respect the outcome of the election and look forward to productive conversations with union leadership as we move forward. We remain committed to ensuring that the Los Angeles Times is a leading source for news and information and to producing the award-winning journalism our readers rely on.”
Copyright Capital & Main
Trump Businesses Could Profit From Supreme Court Case
Co-published by International Business Times
Justice Stephen Breyer has said a case pending before the Supreme Court could cut out “the entire heart of the New Deal.” It could also enrich the Trump Organization.
The Trump Organization’s reported requirement of mandatory arbitration agreements makes it part of a growing trend of private employers requiring their workers to sign such agreements as a condition of employment.
Co-published by International Business Times
An upcoming U.S. Supreme Court decision could strip key rights from tens of millions of American workers — and also be a boon to the Trump Organization, which could benefit from the Trump administration’s reversal of the government’s position on the case. At stake in the case is whether employers can require their employees to sign arbitration agreements in which they give up their right to file class action lawsuits.
A ruling in management’s favor in National Labor Relations Board v. Murphy Oil would be no mere tweak of American labor law. Justice Stephen Breyer has said it could cut out “the entire heart of the New Deal,” which put in place the modern framework for labor and management relations.
In arbitration agreements employees surrender their right to file a lawsuit and must take complaints to a third-party arbitrator paid for by the employer. About 60 million people—more than half of the non-union private sector workforce—are covered by mandatory arbitration agreements, according to an Economic Policy Institute study. An estimated 25 million of these arbitration agreements also include “class action waivers,” in which employees give up their rights to band together to bring class action suits to address workplace disputes in the courts.
Celine McNicholas, an EPI labor counsel, said that without the ability to bring joint actions, workers often lack the means to bring wage, sexual discrimination and other claims forward — or to even attract the interest of lawyers.
“It’s very difficult for individual workers, particular low-wage workers, to find attorneys for those cases if they can’t aggregate their claims,” she said.
Attorneys arguing in favor of retaining the class action waiver say that the 1925 Federal Arbitration Act supports their position that such contracts are legally binding. The NLRB, which brought the suit against Murphy Oil—and labor attorneys like Michael Rubin—argue that employees’ rights are protected by the National Labor Relations Act and can’t be signed away.
Since 2003 Trump’s business ventures have been the target of at least seven lawsuits involving allegations of unpaid wages and overtime, missed lunch breaks, age discrimination and retaliation.
The class action waiver “strips workers” of basic rights established by federal labor law and therefore constitutes an “illegal contract,” according to Rubin, a partner at Altshuler Berzon, which filed a friend-of-the-court brief on behalf of 10 international labor unions in the court cases. (The court consolidated arguments in the Murphy case with arguments from two other similar cases, Epic Systems Corporation v. Lewis, Ernst and Young v. Morris.)
In a blog post, EPI’s McNicholas added there are serious policy implications to a ruling that favors employers, as many significant cases dealing with workers’ rights have been brought as collective or class actions.
“Murphy Oil may be the last workers’ rights case the Supreme Court has the opportunity to consider for the foreseeable future,” she wrote.
Last June, the case’s defendants received a powerful boost from the Trump administration. That this happened says as much about the embrace of big business and this administration as it does about the precarious status of American labor.
Murphy Oil attracted media attention when President Trump’s acting solicitor general, Jeffrey Wall, reversed the government’s position last June. Under the Obama administration, the solicitor general had filed a petition supporting the NLRB’s view that the right to collective action was protected under federal labor law. (Unlike the solicitor general’s office, Trump’s NLRB has not changed the agency’s position on the Murphy case.)
Because of the government’s reversal, the Murphy case pits the solicitor general’s office against the NLRB. Seeing two representatives of the federal government argue opposite sides in a case was a first for Justice Ruth Bader Ginsburg in her 25 years on the bench, she told Georgetown University law students last fall.
What’s drawn less scrutiny is the degree to which this decision could potentially benefit the Trump Organization, the holding company for the president’s many business enterprises.
The degree to which the acting solicitor general’s reversal could potentially benefit the Trump Organization has drawn little scrutiny.
Since 2003, according to a Capital & Main review, Trump’s business ventures have been the target of at least seven lawsuits in which Trump employees achieved or sought class action status. These involved allegations of unpaid wages and overtime, missed lunch breaks, age discrimination and retaliation.
A USA Today investigation found 130 state and federal employment cases involving Trump companies dating back to the 1980s, a figure that Jill Martin, a vice president and assistant general counsel for the Trump Organization, insists is small for an organization of its size.
CBS News has reported the Trump Organization has tried to keep employee complaints out of the courts: Last August—two months after the acting solicitor general reversed his agency’s position on Murphy Oil — Trump Organization employees were told they must sign arbitration agreements if they wanted to keep their jobs.
It’s not been disclosed whether those arbitration agreements include the class action waivers at issue in the Murphy Oil lawsuit. But Capital & Main has viewed a copy of an arbitration agreement between a Trump Organization employee and management that contains a class action waiver. The worker at the Trump National Golf Club in Rancho Palos Verdes, California signed the agreement as a condition of employment in the spring of 2011, two and a half years into litigation against the oceanside golf club, according to the agreement that was viewed.
By signing the arbitration agreement containing the class action waiver, this employee gave up the right to go to court to address violations of the labor code, age discrimination statutes, Title VII of the Civil Rights Act, and the Fair Employment and Housing Act, a California statute used to fight sexual harassment and other forms of discrimination in employment and housing, according to the document that was viewed.
The Palos Verdes lawsuit received significant media attention during the 2016 presidential campaign because of sworn testimony by its lead plaintiff, Lucy Messerschmidt, who said she was fired after she complained about not being scheduled to work when Trump was on the premises, allegedly because of his “preference for young pretty women in the hostess position.”
Her claims were backed up in court documents by former employees, including Hayley Strozier, who said that Trump told managers “many times” that “hostesses were ‘not pretty enough’ and that they should be fired and replaced with more attractive women.”
The case, settled in 2013 for almost half a million dollars, resulted in service workers with little individual clout joining together to address a work environment where employees said they were regularly denied rest breaks, and where female employees claimed they faced discrimination. The lawsuit also led to lasting changes in the club’s operating practices, said Jeffrey Cowan, one of the attorneys who brought the suit against the club.
At the time Cowan filed the lawsuit, the club “was not being run in a very controlled or careful way,” he said. Now “they’ve got someone there who is riding herd on the managers and on the general business operations to make sure that California and federal law is followed.” The club’s management did not admit to any fault in the lawsuit, according to court documents.
The Trump Organization did not respond to a request for comment on this story.
Whether conditions at the club have improved would be hard for an outsider to verify. Some club staff say they have been told not to talk to the press, and, according to CBS News, employees throughout the Trump Organization were asked to sign non-disclosure agreements, which require them to keep any information about the Trump family confidential. It is not known whether the class action waivers are still in place at the Palos Verdes club, how many workers were asked to sign the agreement at the time or whether they are widespread in the Trump Organization.
The gag order may be unusually stringent, but the Trump Organization’s reported requirement of arbitration agreements makes it part of a growing trend of private employers requiring their employees to sign arbitration agreements as a condition of employment. The high court could issue a ruling as early as this month.
Additional research by Roxane Auer and Stephanie Rosenfeld.
Copyright Capital & Main
The Most Successful Union Organizer in America Thinks Traditional Organizing Is a Lost Cause
On the latest episode of “The Bottom Line” podcast, David Rolf of the SEIU explains why worker advocates need to move to a different model.
If anyone has shown a keen understanding of how to unionize workers in America, it’s David Rolf.
In the 1990s, he was a key player in the Service Employees International Union winning the right to represent some 74,000 home care aides in Los Angeles—the largest union organizing campaign since the 1940s. In his present post, as president of SEIU Local 775 in Seattle, he has spearheaded growth from 1,600 to 45,000 members. In 2014, The American Prospect called Rolf “the most successful union organizer of the past 15 years.”
All of which makes Rolf’s take on the collective-bargaining system—that it is a relic, and that those who truly care about workers should stop focusing their efforts on promoting it—particularly provocative.
“I think we made a valiant . . . bet that if we put enough talent and enough resources behind traditional union organizing that we could somehow bring back the old model,” Rolf told me on the latest episode of my podcast, The Bottom Line. “It wasn’t the wrong theory to try necessarily. . . . But ultimately, when you try something over and over again and cannot achieve the results you want, it’s time to try something new.”
Instead of being sufficiently innovative, Rolf adds, most labor leaders have been “reinvesting and doubling down on our American system of enterprise-based collective bargaining since the union movement started to shrink in the early 1950s.” The result: “Through decades . . . we’ve seen unions grow weaker and weaker every year while continuing to repeat the same strategic directions.”
Today, less than 6.5% of the private-sector workforce in the United States is unionized, a steady drop from nearly 35% in 1955, 26% in 1975, and 10% in 1995.
To move forward, Rolf has plenty of ideas, including promoting worker ownership and introducing “ethical workplace” certification and labeling programs designed to appeal to socially conscious consumers.
Especially important, he believes, is to supplant firm-by-firm bargaining with a European-style paradigm in which representatives of the employees, employers, and the government set standards for wages and benefits throughout an entire industry or across a geographic area.
“The more there’s bargaining centralization,” Rolf says, “the less anti-union the culture is, the more union coverage you have in the workplace, the lower inequality is within the overall society, the lower the level of gender wage inequality is, and the more time people get for social and leisure activity.”
Another part of Rolf’s strategy has been to build advocacy organizations like the Fight for $15, which, in his words, has put forth a “bold and morally compelling demand” to elevate the pay of more than 20 million low-wage workers.
Whether a critical mass of labor leaders will ever agree with Rolf and push hard to replace the status quo is far from certain. But nobody, he says, should interpret the organizing triumphs that he and a relatively small number of others around the country have enjoyed as a sign that 20th century trade unionism can survive the 21st.
“Overall, the trend lines are not good,” Rolf says, suggesting that the current system is simply “marking time until its eventual extinction.”
“It’s not to say that you can’t find a few dozen black rhinos left in the wild somewhere,” he continues, “but that shouldn’t make us think that they’re suddenly going to take over the world.”
You can listen to my entire interview with Rolf here, along with Marty Goldensohn reporting on the state of employee stock ownership plans, and Kanyi Maqubela reflecting on why the toughest obstacle facing driverless cars is psychological, not technical.
Study: California Economy Unhurt by Progressive Policies
A new report shows that California, with its higher minimum wage, Medicaid expansion and ambitious climate policy, has done better than 19 Republican-led states with lower taxes and fewer regulations.
Reducing carbon emissions, raising low-wage workers’ incomes and increasing access to health insurance have not, as critics warned, led to job stagnation and lower GDP.
In a direct rebuke to anyone using the term “job-killing regulations,” a recent study shows that a group of progressive policies enacted since 2011 have had no negative impact on the California economy. If anything, the report, “California is Working: The Effects of California’s Public Policy on Jobs and the Economy since 2011,” shows that California has done better than several states that have lower taxes and fewer regulations.
The report’s author, University of California, Berkeley Labor Center researcher Ian Perry, examined 51 progressive policy measures – including environment, safety net, taxation, infrastructure and housing – that Perry coins the “California Policy Model,” or CPM. These policies include laws that provide a path to a higher minimum wage, expand Medicaid as part of the Affordable Care Act, raise taxes on corporations and promote California’s comprehensive and ambitious climate policy.
Perry chose 2011 as a starting point because that’s when Democrats captured majorities in the legislature as well as the governor’s office. Also that year, Proposition 25, which let Democrats approve a state budget with a simple majority vote rather than a two-thirds requirement, went into effect. That opened the floodgates to a wave of progressive policies that have been scorned by conservative politicians, pundits and think tanks.
Perry told Capital & Main that he set out to see whether critics of California’s progressive policies were correct — that, for example, California’s higher minimum wage would increase unemployment, or whether the state’s strict regulations on carbon would send businesses to other states in droves.
To do so, Perry compared wage growth and employment growth in California with statistics from 19 Republican-controlled states. But he also had to create a legitimate control group to weight factors like California’s tech boom, which might have skewed economic results, or a Republican-controlled state’s downturn, which may not have been due to conservative policies. To combat an apples-to-avocados comparison, Perry used a “synthetic control” method to weight data from Republican states to create an alternate California (or alt-California) in which CPM had not been enacted.
Perry found that California – the real California with its CPM – enjoyed higher total employment, private sector employment and GDP than the 19 Republican states and alt-California.
The study, by design, looked at the cumulative impact of policies instead of evaluating specific policies. “Still, one policy stood out to me,” Perry said. “My study found that the expansion of Medicaid through the ACA was one of the more pro-growth policies because it led to a greater demand in health care services and a growth in health industry jobs.”
The biggest takeaway from the study, Perry said, was that policies that make up the CPM – reducing carbon emissions, improving income for low-wage workers and helping more people access health insurance – have not, as critics warned, led to negative economic effects like job stagnation and lower GDP.
“There are warnings from conservatives that [progressive policies] will slow down economic growth, but California is a big piece of evidence that the fears are unwarranted,” Perry said.
Kansas, which went all in on supply side economics under Governor Sam Brownback, showed that the converse is true, that cutting taxes can sometimes kill growth, Perry said.
In a Washington Post op-ed, Jared Bernstein, chief economist to former Vice President Joe Biden, praised the study. He said that, while it didn’t convince him that there’s a direct line between progressive laws and job growth (a relationship Perry did not set out to prove), the study did, “in tandem with tons of other research, convince me that these progressive interventions do not hurt growth.”
The Berkeley study was released as Republicans on Capitol Hill pushed a tax bill heavily weighted to tax cuts for corporations and wealthy individuals, legislation that a majority of Americans are firmly against.
Despite the report’s generally rosy economic picture, Perry points out that some issues threaten California’s prosperity. First, progressive labor standards need to be enforced to combat rampant wage theft in California’s low-wage industries. Second, the effect of very high housing prices in much of the state could undermine some economic gains.
“High housing prices and lack of supply could force more people to live farther away from their jobs, which would increase carbon emissions and make it harder for [businesses] to attract workers,” he said.
And the possible repeal, or undermining of, the Affordable Care Act, could undo some of the economic benefits of the past seven years, Perry said. Another study from the UC Berkeley Labor Center earlier this year showed that California would have lost more than half a million jobs if the Graham-Cassidy repeal-and-replace legislation had passed.
Copyright Capital & Main
Sessions Announcement Throws Cannabis Industry Into the Weeds
Co-published by International Business Times
The U.S. Attorney General threw a curveball to California’s nascent marijuana industry by rescinding a tolerant federal policy known as the Cole Memo.
Because cannabis remains a Schedule I drug, any financial institutions dealing with marijuana businesses risk losing accreditation and could even face money laundering charges.
Co-published by International Business Times
On January 1, customers lined up outside California dispensaries to legally buy recreational marijuana in the state for the first time. Three days later, Attorney General Jeff Sessions threw a curveball to the nascent industry which the California Legislative Analyst’s Office predicted would pull in $1 billion in taxes in its first year.
But by rescinding a 2013 policy known as the Cole Memo, which recommended that U.S. attorneys not prosecute legitimate cannabis users and businesses in states where weed is legal, Sessions is now giving those 93 attorneys latitude to prosecute as they see fit. The Cole Memo, though vague in its wording, is widely believed to have allowed the industry to flourish.
“The cultivation, distribution, and possession of marijuana has long been and remains a violation of federal law.” Adam Braverman, the U.S. attorney in San Diego, said in a written statement. “We will continue to utilize long-established prosecutorial priorities to carry out our mission to combat violent crime, disrupt and dismantle transnational criminal organizations, and stem the rising tide of the drug crisis.”
A spokesman for the U.S. attorney in San Francisco issued a similar statement in an email to Capital & Main.
Rohrabacher is the co-author of the Rohrabacher-Farr amendment, now called Rohrabacher-Blumenauer, attached to the 2014 federal budget to prohibit the Justice Department from interfering with state medical cannabis laws. Because it’s an amendment, it must be reauthorized every year. In open defiance of Sessions, Congress voted to extend Rohrabacher-Blumenauer through stopgap spending bills twice in 2017, and it is now in effect through January 18. But Congress hasn’t settled on a long-term spending bill. If an impasse leads to a government shutdown, medical marijuana businesses will be operating in a legal gray area.
Some industry watchers think U.S. attorneys probably won’t waste their time and resources prosecuting legitimate businesses – including retail operations and growers – or their customers.
But Pamela Epstein, founder of Green Wise Consulting, a Los Angeles law firm assisting cannabis businesses, said she has received dozens of calls from panicked clients whose investors were getting cold feet.
“Sessions cut the industry off at the knees when it was starting to take off and act like a traditional business,” Epstein said. “That was just by the act of saying he was doing something. A lot of companies will be taken out due to [Sessions’] personal vendetta.”
Even before the Sessions’ announcement, there were uncertainties about how the legal marijuana industry will work in California.
The biggest sticking point is banking. Because cannabis remains a Schedule I drug and illegal at the federal level, there are heavy regulatory burdens on banks that do business with cannabis companies. Any financial institutions dealing with marijuana businesses risk losing accreditation and could even face money laundering charges.
Daniel Yi, a spokesperson for MedMen, a company managing medical marijuana dispensaries, said larger businesses like his had an easier time finding banking options. “But for a two- or three-person operation, it’s hard to get a bank to want to do business with you,” he said.
Banks willing to do business with cannabis companies charge high fees to cover compliance, which include disclosure of the weed’s journey from seed to sale. Most smaller cannabis businesses still pay their employees in cash, a dangerous practice for employees and customers.
Jason Thomas, a former deputy town marshal for Holly, Colorado, now sells real estate to cannabis companies in that state. He said some companies resort to legally questionable means of getting bank accounts. “Sometimes a company will use a parent company with a non-cannabis name to get around banking regulations,” Thomas said.
Some California state legislators understand the problems with a cash-only pot industry. In December, 2016 state treasurer John Chiang started the 16-member Cannabis Banking Working Group with representatives from law enforcement, banks, regulators and local governments to find a solution to the state and federal conflict. Late last year the group published a report proposing possible solutions to the weed industry’s banking problem, including the use of armored cars – which the businesses would pay for – to make bank deposits and pay taxes, and a state bank for businesses shut out of federal banking institutions.
There is general agreement that the only thing that would make the cannabis industry fully compliant, and allow cannabis operators and consumers to breathe easy, is decriminalization of weed at the federal level. And there’s a school of thought that suggests Sessions’ move last week, inadvertently made it a little more likely that the U.S. Congress could legalize pot.
“I think [Sessions] is going to galvanize actors in the federal government to legalize cannabis,” Yi said.
Copyright Capital & Main
L.A. Times Staffers Await Union Vote Tally
Thursday’s vote by Los Angeles Times editorial staffers to choose or reject unionization was overseen by the National Labor Relations Board at the paper’s downtown building and Orange County offices.
Thursday’s first-ever union vote among editorial staff in the 136-year history of the Los Angeles Times was hailed as a landmark event by other news media observers, although it appears that the voting itself was a fairly low-key affair.
There had been a buzz of activity, along with rising tensions between management and the union effort in the weeks leading up to the daylong January 4 vote, which was overseen by the National Labor Relations Board at the downtown building and Orange County offices.
Union newsroom supporters had met with fellow journalists to discuss what the on-the-job priorities of editorial staffers might be and distilled a list of negotiation goals. There were phone calls to editorial staff to beef up union support and pro-union signs sprang up around the newsroom.
Management of the Los Angeles Times, which is owned by Tronc, sent out an anti-union eblast to its reporters touting the newspaper’s history and implying that workplace flexibility would be threatened by a collective bargaining structure, and that the union couldn’t guarantee pay hikes or protections against layoffs. It was not the first such email and matched the messaging in management-distributed flyers.
Despite that, one Times writer, speaking on condition of anonymity, described voting day in the Times Spring Street headquarters in anti-climactic terms.
“There was no line, really. I think I heard that at 10 o’clock on the dot [when polls opened] there was a bit of a line. It took 10 seconds to vote. You just marked an X, Yes or No, behind the curtain then dropped your ballot in the box.”
Given that slightly over 350 staffers are in the bargaining unit and eligible to vote in two locations (and some by mail-in ballot), there was little potential for a stampede. Observers included a National Labor Relations Board officer, a NewsGuild-CWA union agent and another representing management.
Thursday evening, pro-union staffers who had been involved in the organizing retreated after work to Birds & Bees, a nearby watering hole, no doubt to relax a little after the past months fight and discuss next steps — outside media were not invited.
The drama now will lie in awaiting the results, not due until the mail-in ballots are counted and the NLRB announces the results on January 19.
There had been some skepticism in the newsroom, the Times staffer said, but “the opposition hadn’t organized. So, it’s tempting to think, Oh well, it’s going to be overwhelming [for the union], but I just don’t know. I can’t predict — I wouldn’t assume it’s a done deal.”
Copyright Capital & Main
L.A. Times: Will Union Vote Conk Tronc?
Today, over 350 Los Angeles Times reporters and editorial staff will vote on whether to allow NewsGuild CWA to represent them at the famously anti-union company.
Editorial staffers say they have been driven to unionize by a management that has undermined both working and journalistic standards.
Co-published by The American Prospect
Los Angeles Times readers who have been unaware of the paper’s endless management turmoil and policy changes can always view the damage in its print edition. Thinner news sections, a dwindling number of bylines and the wrap-around advertising that disguises the front-page all hint at the ongoing upheaval at the top.
Front-line reporters who bear the brunt of the turmoil have organized a union drive in response. As the Los Angeles Times Guild organizing committee announced in an October 24th 2017 letter signed by 44 editorial staff: “We wanted to stem the flight of talent and halt the steady erosion of pay and benefits.”
It’s the first time in the famously anti-union paper’s history that editorial staff members have taken such a step — driven, they say, by a management that has undermined both working and journalistic standards. (The Times’ press operators are represented by the Teamsters union.)
Today, over 350 Los Angeles Times reporters and editorial staff will vote on whether to allow NewsGuild CWA to represent them. About 70 percent of the newsroom signed union authorization cards, organizers say. Voting takes place at the Times‘ downtown headquarters and at its Orange County offices, with observers in place; some remote employees will submit mail-in ballots. The National Labor Relations Board will release the results January 19.
Organizers want a unified voice to formally set work standards so Tronc can’t make unilateral changes to employment conditions — such as the recent policy shift that eliminated accrued vacation days.
“What really kicked this off was, as we’re dealing with this tumult at the executive levels, the reporters are still doing the work,” said Carolina Miranda, who has seen management change at least three times in the three and a half years she has been at the paper.
One pivotal moment came recently when it became public that Michael W. Ferro, the technology entrepreneur and company chairman who changed the Tribune name to Tronc (Tribune online content), flies on a private plane that cost Tronc $4.6 million–$8,500 an hour– in seven months to sublease. The plane is subleased from a Ferro-owned company, Merrick Ventures.
“That tipped wavering [employees] toward the union,” said one L.A. Times journalist who, like most staffers interviewed by Capital & Main, spoke on condition of anonymity.
According to another Times staffer, one incident that roiled editorial staff—and much of the industry–was management’s behavior during a recent stand-off with the Walt Disney Company. Disney refused to provide advance copies or screenings of films to the L.A. Times because of the paper’s two-part series about the cozy business relationship between the city of Anaheim and Disneyland that has garnered the theme park more than $1 billion in “subsidies, incentives, rebates and protections from future taxes.” Disney found the stories unfair.
An L.A. Times staffer cited management’s tepid response as a turning point. National critics associations condemned the ban and threatened to disqualify Disney films from awards consideration. D’Vorkin met with Disney for what it called “productive discussions,” although the Times offered no public defense for the reporting that had sparked Disney’s ire.
Part of the paper and website’s chaos is evidenced in the kinds of cuts and changes in workplace conditions that have become common in newsrooms around the country as publishers grapple with changing technological models and a shifting economic landscape. In Southern California, the LA Weekly’s new owner recently eliminated all but four of 13 editorial staff members; former OC Weekly editor Gustavo Arellano resigned after refusing to cut staff.
“We’re the eyes and ears of the community,” Carolina Miranda said of the pressure to keep reporter staffing levels low. “You need someone writing about the water. You need someone writing about electeds, sitting in interminable City Hall and CalTrans meetings. That’s where the news comes from. It’s important to protect our role in that ecosystem.”
L.A. Times employees describe several more clear turning points in a years-long, accelerating momentum toward unionization. In 2016 the Chicago-based Tribune company, which had acquired the paper in 2000, announced its name change to Tronc, along with its mission as a “content curation and monetization company.”
In August 2017 Tronc fired publisher and editor Davan Maharaj. Newsroom staff hadn’t been that happy about Maharaj’s management style, given his predilection for encumbering and delaying some of the Times‘ best reporting. The staff organized against him after “fabulous journalists, one after the other, kept leaving,” one union supporter said.
The organizers had high hopes that a new editor would promote quality journalism. Then Tronc brought in Ross Levinsohn, formerly an interim chief executive at Yahoo, as chief executive publisher, and former Forbes editor Lewis D’Vorkin, as editor.
The emphasis, Levinsohn told the New York Times, would not be on investing in reporting staff but to expand the L.A. Times on “all platforms.” New management pushed for budget cuts.
Organizers are looking to create a unified voice to set work standards and formally codify them so Tronc can’t make unilateral changes to employment conditions — such as the recent policy shift that eliminated accrued vacation days. They also hope to stabilize the pay structure with a tiered approach that gradually increases pay for new hires as well as to improve health benefits and parental leave policies.
Union contracts also frequently include grievance processes that protect journalists’ freedom to report and write by assuring that terminations are for just cause rather than “at will” whims.
“We hope it will unify the newsroom behind quality journalism instead of watching one person after the other leave,” said one staffer who signed on to the October 2017 letter. The publications that will survive have invested in maintaining quality, she added, citing the Washington Post and New York Times. (Editorial staff from both publications are part of the NewsGuild’s 25,000 nationwide members.)
The Los Angeles Times responded to a request for comment about the union drive via email with a statement from L.A. Times CEO and publisher Levinsohn. “For 136 years, the Los Angeles Times has served the community of Los Angeles and the world with dynamic, important and Pulitzer Prize winning journalism. It is the core foundation of our brand. Whether our newsroom unionizes or not, we will remain committed to ensuring the L.A. Times is a leading source for news and information across all media touchpoints.”
Felix Gutierrez, professor emeritus at the University of Southern California’s Annenberg School for Communication and Journalism, who writes about media and racial, ethnic and gender groups, has followed the L.A. Times development for decades as the paper, he said, focused on expanding toward white suburbs and “bypassing other communities. If they had adapted a demographic imperative as aggressively as they grasped the technological, they could be in a different place right now.
“The reporters are closer to what’s happening in the communities than the higher-ups. They should listen to them. I don’t know if they’ll do that without a union.”
Copyright Capital & Main
Serfing USA: New ‘Bracero’ Bill Could Cut Agriculture Workers’ Rights and Wages
A new Congressional bill would reduce a broad range of agriculture workers to the status of “guest workers.” California’s dairy owners are ecstatic. Co-published by International Business Times.
The AG Act would prevent the government from inspecting worksites without first checking in with the employer, transfers all travel and housing costs to employees and allows employers to pay workers at a lower wage scale.
Co-published by International Business Times
On a cool December afternoon, Luis Alberto Echeverria Melchor approached a dusty corral on the western outskirts of Turlock, a city in California’s Central Valley. Several young cows ambled over to greet him. “They are very intelligent,” he said, reaching out to stroke the face of an animal. “Sensitive, too.” Melchor should know. The 38 year old has spent half his life milking and feeding the cows of Stanislaus County, a mostly rural region whose landscapes are dominated by sprawling dairy farms that produced half a billion gallons of milk in 2016 worth more than $600 million.
During the 20-minute drive south from Melchor’s Modesto apartment, we had passed more than a dozen dairies, including several where he had once worked. From the passenger’s seat, Melchor, whose soft oval face is framed by a neatly trimmed beard, narrated the experiences in a sort of CliffsNotes of labor abuses: The boss who stiffed him a week’s pay; the boss who refused to give breaks; the boss who yelled too much. But it was this Turlock dairy that Melchor remembered best, for it was here that he finally decided to complain about labor abuses, and those complaints would eventually result in his deportation to Mexico.
He had worked at the dairy for eight months when, in March of 2008, a cow kicked him in the chest. He didn’t remember the kick, only that he woke up staring at the barn’s ceiling while a coworker fanned his face with a shirt. His chest throbbed and he was unable to speak above a whisper. Melchor alleged that the dairy owner, Joe Sallaberry, took a glance at him and told Melchor to go back to his trailer, located on the property, and rest. “You’ll be fine,” Sallaberry said. (Sallaberry did not respond to multiple requests for comment.)
CRLA Attorney: “We’ve had workers who have been smashed by cows. The response from employers is often, ‘Walk it off.’ Many people won’t complain, because they fear retaliation.”
Melchor didn’t feel fine. His wife drove him to the hospital, where he said he learned that his rib was fractured. That night, he handed Sallaberry a doctor’s note that stated he couldn’t work. The next day, Sallaberry fired him. “I only had three days to move out,” Melchor recalled. On the third day, as he struggled to pack his things—the injury made even the slightest upper-body movement painful—two officers from the Sheriff’s Department drove up and reminded him that he needed to vacate by sundown.
Stories like Melchor’s are familiar to Esmeralda Zendejas, an attorney at California Rural Legal Assistance (CRLA) who has represented numerous dairy workers over the years. She told me that wage theft is routine in the dairy industry, and that employer-provided housing, often onsite, tends to be less than optimal. There can be serious safety hazards for children, like open manure lagoons, and injuries are common. “We’ve had workers who have been smashed by cows,” she said. “The response from employers is often, ‘Walk it off.’ Many people won’t complain, because they fear retaliation.”
Yet if the dairy industry gets its way, the workforce they rely upon will soon become even more vulnerable to exploitation. This fall, Republican representative Bob Goodlatte of Virginia introduced the Agricultural Guestworker Act, or AG Act, which was voted out of the House Judiciary Committee in October. The proposal would replace the H-2A guestworker program, which currently only covers farmworkers, to include dairy workers and meat and poultry processors, while also gutting many of the existing worker protections.
Guest workers are even less likely than undocumented immigrants to lodge complaints about wage theft or dangerous workplaces, because their employers can quickly have them deported and replaced. Added to that power imbalance is the problem of debt. Saket Soni is the head of the National Guestworker Alliance, which in recent years has helped dozens of guest workers escape from labor camps patrolled by armed guards. He told me that many guest workers are charged illegal fees by labor brokers in their home countries, and so arrive in the U.S. “in virtual, and sometimes literal, debt peonage.” Such workers, he said, “are afraid of being deported into debt, and so can’t blow the whistle on unsafe and abusive conditions.”
Critics often liken the current guest worker system to the Bracero Program, which brought in Mexicans from 1942 to 1964, and was notorious for labor abuses and lax oversight. But Adrienne DerVartanian of Farmworker Justice, a Washington, DC-based advocacy organization, told me that there “are even fewer protection in Goodlatte’s bill than in the original Bracero program.” The AG Act, which would create a new visa, the H-2C, prevents the government from inspecting worksites without first checking in with the employer, transfers all travel and housing costs to employees, has no provisions to outlaw labor recruitment fees and allows employers to pay workers at a lower wage scale. It also allows companies to prevent their workers from suing, instead forcing them into mandatory arbitration—an arbitration for which the guest workers have to shoulder half the costs. (Even a successful wage theft case would be partly paid for by the employee who was owed money.)
Perhaps most crucially, the new program would be overseen by the Department of Agriculture, not the Department of Labor. When Goodlatte announced the AG Act, he described the USDA as “an agency that clearly understands the unique needs of America’s farm and ranch operations.” The agency is certainly more closely aligned with the needs of farm operators than is the DOL. What it isn’t is an agency that enforces labor laws. In fact, the USDA can be outright indifferent to worker safety. Several years ago, the USDA tried to increase the already dizzying line speeds at poultry plants from 140 to 175 birds a minute, a move that was supported by the National Chicken Council. Investigations by the National Institute of Occupational Safety and Health, an arm of the Centers for Disease Control, have found that carpal tunnel syndrome is widespread among poultry workers. But the USDA’s speedup promised to save poultry companies $256 million a year, and the agency only caved when faced with sustained public outcry from groups that included Oxfam America and the Southern Poverty Law Center.
All of which helps explain why the AG Act is being championed by the American Dairy Coalition and the National Milk Producers Federation, and why donors to Goodlatte this year included California Dairies, Inc., a 400-member cooperative that produces 43 percent of the state’s milk. “You would create a temporary workforce with no ability to become legal immigrants, who are completely dependent on their employers, and who have extremely minimal protections,” DerVartanian of Farmworker Justice told me. “The lack of respect it shows towards hard-working people is really stunning.”
Dairy Worker: “[Bosses] look at a worker as a machine. They don’t want the worker to get sick or injured, or they’ll get rid of you and look for someone else.”
She said that the prospects of AG Act weren’t clear, but that it represented what had been “on the agribusiness wish list for a long time,” and what the industry now hoped to push through in the Trump administration. Indeed, the breadth of support for the proposal is impressive. The bill is backed by the American Farm Bureau Federation, the North American Meat Institute, the California Strawberry Commission and dozens of other food-related groups, along with the Cato Institute and the U.S. Chamber of Commerce.
During our tour of local dairy farms, Melchor told me that he had heard a supervisor talk about dairy owners hoping to some day bring workers directly from Mexico. He believed the reason was simple: abusive bosses had a hard time finding enough willing workers. “They look at a worker as a machine,” he said. “They don’t want the worker to get sick or injured, or they’ll get rid of you and look for someone else. You are an instrument.” He said that if people are faced with only two options—stay quiet on the job or be deported to Mexico—many will stay and endure all manner of labor abuses.
To illustrate how far some bosses will go, he referred to his own case. During his hospital visit, a nurse had passed along the CRLA number. Melchor called and told his story to Esmeralda Zendejas, who filed a case in 2010 against Joe Sallaberry for wrongful termination and back wages. The following year, they met for a deposition in Stockton. After the deposition had begun, Sallabery’s lawyer, Anthony Raimondo, apologized and said that he had to take an urgent phone call. He returned several minutes later.
After the deposition, Melchor stopped to get gas before driving home. As he was leaving the station, two unmarked vehicles pulled him over, lights flashing. He was handcuffed and driven to Bakersfield, where he was put on a flight to San Diego and bused across the border. “Listen, I’ve been deported and I’m in Tijuana,” he told Zendejas over the phone. “I don’t know what happened.”
Zendejas eventually pieced it together: Raimondo, who frequently represents dairy workers, had tipped off a contact at Immigration and Customs Enforcement. This was a tactic that he would employ numerous times against dairy workers who filed suits against his clients; as Raimondo admitted in an email to the Legal Services Corporation, “The attorneys find out when their clients are already gone.”
Raimondo initially told me by email that he had not wanted Melchor deported, but did later admit that he had told ICE that Melchor would be at the deposition.
He also wrote that shortly before the deposition, Sallaberry claimed that Melchor, then an undocumented immigrant using the last name “Masedo,” had attempted to murder Sallaberry. In a court document, Sallaberry said that, around midnight on April 3, 2011, he discovered “Masedo” outside his house with another man. Both fled, Sallaberry said, but not before one of them allegedly fired a bullet that nearly struck Sallaberry. A judge later issued a temporary restraining order against Masedo/Melchor based on Sallaberry’s testimony, and set a future date for a hearing in which both sides could present their sides. By the time of the hearing, Melchor was in Mexico.
Melchor laughed when I asked him about the allegations, calling them “complete lies.” (Neither “Masedo” nor “Melchor” was listed as a suspect in the police report of the incident.)
After several months of failed attempts, Melchor was able to crawl through a tunnel than ran along the border and return to California. As Raimondo had hoped, CRLA had been forced to settle the case in Melchor’s absence, but Zendejas began a U visa application for her client, alleging that he had been intimidated while trying to assert his legal rights. He was granted the U visa in October 2016 and can now legally work in the country. He left a dairy job several months ago, after experiencing what were likely the early signs of carpal tunnel, and now is employed by a tile fabrication company in Stockton.
As for Raimondo, CRLA and the non-profit Legal Aid at Work filed a federal lawsuit against him in 2013, arguing that as a representative of the employer, he had violated the Fair Labor Standards Act by retaliating against another dairy worker named José Arias. Last June, the 9th U.S. Circuit of Appeals reversed an earlier decision and ruled against Raimondo, finding that the act applied not only to the employer but the employer’s representatives as well. To protect his right to continue to use ICE to quash labor disputes, Raimondo has retained a powerhouse appellate firm, Horvitz & Levy, which recently petitioned the Supreme Court to hear the case.
Whether Raimondo is able to gain a Supreme Court audience, the dairy industry will continue to seek new sources of pliant labor. On his website, Raimondo describes himself as the “primary labor and employment resource for California’s Western United Dairymen,” a trade association based in Modesto. Anja Raudabaugh, the group’s CEO, recently told a reporter with the investigative website FairWarning that her members considered Raimondo “something of a hero” for his work. She emailed me that her organization “considers having the AG Act pass out of committee a major step forward” and that it looks forward to working with House members “as legislation now moves to the floor for a vote.” It is perhaps no surprise that the group, whose members produce 70 percent of California’s milk, are excited by the AG Act. It is an act, after all, that has no protections against retaliation and that shifts labor enforcement to an agency that has never enforced labor laws. It is an act that Raimondo himself could have written.
Copyright Capital & Main
Report: Cash Bail System Hurts Poor and Communities of Color in L.A.
A UCLA report says the state’s money bail system takes “tens of millions of dollars annually in cash and assets from some of L.A.’s most economically vulnerable persons, families and communities.”
“Many people don’t even have $100 in the bank, so paying 10 percent to a bond agent means that money won’t be going toward rent or food.”
In advance of a legislative battle over reforming California’s cash bail system, a new report shines light on which Los Angeles communities pay the most bail and by how much. The Price for Freedom, published by the University of California, Los Angeles’ Ralph J. Bunche Center for African American Studies, analyzed arrest data from 2012 through 2016. The authors concluded that the money bail system takes a “multi-billion dollar toll that demands tens of millions of dollars annually in cash and assets from some of L.A.’s most economically vulnerable persons, families and communities.”
Using the Los Angeles County Superior Court’s misdemeanor and felony bail schedules, researchers discovered that bail set for more than 374,000 people arrested by the Los Angeles Police Department for misdemeanors and felonies over that five-year period was $19.4 billion.
Bail agents typically charge seven to 10 percent of the total bail; money going to bail bondsmen, whether upfront or through installments, is nonrefundable, even if defendants are found not guilty or have their charges dropped by the prosecutor.
The Bunche Center study also found that the cash bail system disproportionately affects lower income Angelenos and communities of color. During the period covered by the study, black Angelenos paid bond agents $40.7 million in non-refundable fees — 21 percent of total fees paid to bond agents in a population that represents only nine percent of the population. Latinos paid just over $92 million, and whites just under $38 million over the same period. Figures for Asian Americans were unavailable to researchers.
The Bunche Center study is the first comprehensive look into the size and impact of the bail system in the city of Los Angeles. Researchers plan to release a similar report for Los Angeles County in 2018, saying that the numbers they compiled should show lawmakers what’s at stake in the escalating debate over cash bail reform.
Comprehensive legislation to eliminate California’s bail system failed in the Legislature this year. Twin bills, Senate Bill 10 authored by Sen. Bob Hertzberg (D-Van Nuys), and Assembly Bill 42, authored by Assemblyman Rob Bonta (D-Oakland), would throw out the California bail schedules and mandate counties to conduct pretrial assessments to determine whether a defendant poses a safety threat to the community or a flight risk. The bills would also mandate counties to develop plans to ensure low-risk defendants show up for their court dates. Bonta and Hertzberg have vowed to bring back bail reform legislation early in 2018. And their efforts have the support of Gov. Jerry Brown, who has said “inequities exist” in the system, and of Chief Justice Tani Cantil-Sakauye, who cited the state’s bail system as “unsafe and unfair,” and created a working group to recommend changes.
UCLA Professor Kelly Lytle Hernandez, one of the authors of The Price of Freedom, told Capital & Main that her study showed 70 percent of the bail amount levied went unpaid, and as a result 223,366 people remained behind bars until their arraignment.
“Many of these people don’t even have $100 in the bank, so paying 10 percent to a bond agent means that money won’t be going toward rent or food. If the breadwinner stays behind bars, the family suffers from lack of income.”
And it is most often female family members who, when they are able, engage bail agents. A 2015 study led by the Ella Baker Center for Human Rights found that incarceration takes a toll on all family members through debt, mental and physical ailments, and severed family ties.
For Isaac Bryan, a graduate researcher in the UCLA Department of Public Policy and a co-author of The Price of Freedom, the issue of cash bail is personal. Eight months ago he received a call from a bond agent saying that a family member had been arrested for alleged property crime and drug possession. The bail was set at $25,000, and would he be able to cover it? As a struggling student, Bryan didn’t have the 10 percent upfront fee.
Supporters of cash bail say it ensures defendants will show up to court. If they fail to appear, they forfeit their bail money. Critics answer that only works when an arrestee puts up the entire bail amount. If they pay a bail agent, they lose their down payment regardless of whether they show up. The agent is on the hook for the rest of the bail.
Bail reform advocates also point to a 2017 report, Selling Off Our Freedom, published by the ACLU and the nonprofit Color of Change, which showed that much of the money collected by bail agents goes to big underwriters, including Japan-based Tokio Marine and Toronto-based Fairfax Financial, and that insurers offload most of the risk to bond agents.
Efforts to reform the cash bail system have met strong resistance from law enforcement, prosecutors and, not surprisingly, the bail industry, whose representatives say that eliminating cash bail would pose considerable harm to the public.
“Bail bond is of no expense to the taxpayer,” said Zeke Unger, owner of Lil’ Zeke’s Bail Bonds in Los Angeles’ San Fernando Valley. “But if you let defendants out, not only do they have no motivation to go to court, you’ll have to invest in manpower to keep track of them while they’re out.”
Cash-bail advocates also point out that agents help defendants, who otherwise could not afford to do so, exercise their constitutional right to bail. But the question reformers ask, and what’s at the heart of the reform debate is: Why should freedom be determined by a person’s bank account?
Margaret Dooley-Sammuli, senior campaign strategist for the ACLU’s Campaign for Smart Justice and a contributor to both Selling Off Our Freedom and The Price for Freedom reports, said that cash bail is supposed to make sure people return to court, but because of the high bail, in many cases, “it’s a way of keeping people in jail. Bail is not supposed to be a punishment. Right now the bail system is wealth-based detention.”
“We know that people of color are over-policed and over-represented in jails,” she added. “These reports show one more piece of the scale of economic drain of the criminal justice system on those communities.”
Across the U.S., states and courts are starting to rethink their cash bail systems. Earlier this year, New Jersey implemented an overhaul in its bail structure, and New Mexico is deciding how to address a voter-backed bail reform measure. In July, an Illinois judge ordered the reform of the bail system in Cook County, which includes Chicago. Now defendants who cannot pay bail and pose no flight risk or danger to the public do not remain behind bars before trial.
At the federal level, Senators Kamala Harris (D-CA) and Rand Paul (R-KY) introduced a bill to encourage states to reform the practice of using money bail as a condition of pretrial release in criminal cases.
Supporters of cash bail may see the reform writing on the wall, at least in California. Jeff Clayton, executive director of the American Bail Coalition, told Capital & Main that, although his organization will continue lobbying to fight the abolition of cash bail in Sacramento, it might acquiesce to some reforms.
“Bail is set way too high in California right now, and without the bail industry hardly anyone in the state would get out,” Clayton said. “Even bail on misdemeanors is higher than for felonies in Colorado. This market imbalance needs to be corrected and doing so wouldn’t have a big impact on us.”
Bail in California is set by a schedule for each crime, but varies county by county, though judges have the discretion to alter the bail amount. The Selling Off Our Freedom report found that bail amounts as late as the 1980s were much lower than today, and many people arrested for felonies were released without paying bail. That report also showed that, nationally, between 1990 and 2009, the share of arrestees required to post money bail grew from 37 to 61 percent, and the share of releases depending on bail bond companies doubled in that same period. The report said bail bondsmen and the insurance industry used high crime rates to bolster their argument for laws requiring bail, and lawmakers bought that argument.
Clayton added that sensible reforms could simply do away with bail for minor crimes that don’t present a public danger, like loitering, which often impact homeless and low-income people. “We shouldn’t detain a person who can’t make bail for longer than [what] the actual sentence might be. A 60-day sentence on a fine-eligible offense doesn’t make any sense.”
Copyright Capital & Main
TV Legend Norman Lear: Maximizing Shareholder Value Is the ‘Central Disease of Our Time’
In a special edition of The Bottom Line podcast, the hit sitcom creator zeroes in on a topic that has long interested him: business and its connection to society.
Through hit sitcoms such as All in the Family, Good Times and Maude, Norman Lear has taken on all kinds of contentious topics during his legendary television career: civil rights, women’s rights, the Vietnam War and more.
But as it turns out, the 95 year old has long had his eye on another issue with huge societal implications: the way that many businesses push to rake in ever bigger financial returns—often in the short term—with little regard for anything else.
“This is the greatest fallacy I think I know,” Lear told me on the latest episode of my podcast, The Bottom Line. “When nothing in nature suggests anything can grow forever, the American corporation is dedicated to a profit statement this quarter larger than the last. . . . Even as I repeat it, it sounds just ruinous.”
Of course, this relentless pursuit of profit stems in large measure from the fact that, over the past 30 years, companies have embraced an ethos of “maximizing shareholder value.” Says Lear: “I think of it as the central disease of our time.”
Lear became directly involved in promoting a cure when he co-founded the Business Enterprise Trust, which during the 1990s recognized companies that tried to solve social problems as a part of their core business strategy. The program was very much in the spirit of the Shared Value Initiative launched by Harvard’s Michael Porter and Mark Kramer—only Lear’s effort came some 20 years earlier.
One corporation that has consistently impressed Lear is Starbucks. It’s “a company,” he says, “that thinks about its employees a great deal.”
But Lear makes clear that this is the exception. Most companies have kept wages flat and gutted worker benefits over time, leaving many Americans anxious and angry. Indeed, analysts believe that one reason Donald Trump won the White House was that he was able to tap into these feelings among the white working class—a group known as the “Archie Bunker vote” in a nod to Lear’s irascible blue-collar lead character in All in the Family.
Yet Lear says he actually isn’t sure whom Archie would have cast his ballot for—Trump or Hillary Clinton. “Either way is possible,” he says. Getting inside Archie’s head, he adds, “would take 11 scripts leading up to the vote, and I haven’t thought that through.”
As for the business he’s in, Lear—who serves as chairman of Act III Communications, a multimedia holding company—stresses that entertainment can have a positive social impact.
He’s excited about a pilot that he’s doing for NBC, Guess Who Died, which will look at the lives of the elderly—a demographic that, in Lear’s words, has “not been represented ever on television in any way that reflects their numbers and importance in our culture.” He also points to the current reboot of his 1970s show One Day at a Time, which last season grappled with a teenage girl coming out as a lesbian to her single mother and grandmother.
“The lack of acceptance for people who are very different from you . . . this show will help a conversation about it,” says Lear, who was one of those celebrated this year at the Kennedy Center Honors for his lifetime achievement in the arts—set to be broadcast on CBS on Dec. 26. “And there is no way conversation doesn’t aid in the long run.”
You can listen to my entire interview with Lear here:
- EducationSeptember 7, 2016
Moonlighting Teachers Learn Hard Lessons from Uber
- Conversations on Trump’s AmericaNovember 29, 2016
Conversations on Trump’s America: Robert Reich Previews a New Era of Savage Inequality
- Labor & EconomyNovember 16, 2017
Robert Reich on Trump’s ‘Dangerous Tax Bill’
- Labor & EconomyNovember 20, 2017
Saving Private Enterprise: Director Jacob Kornbluth on His New Robert Reich Film
- Andrew Puzder NominationFebruary 14, 2017
Investigating Labor Secretary Nominee Andrew Puzder’s Fast Food Empire
- Labor & EconomyMay 25, 2016
Aging in the Fields: Retirement Followed by a Return to Work
- EnvironmentAugust 26, 2016
California Doubles Down on Its Green Economy, But Kicks Cap-and-Trade Down the Road
- Labor & EconomySeptember 25, 2017
Kicked to the Curb: How USC Drove a Bicycle Repairman Into the Street