On Tuesday, the Los Angeles City Council voted 14-1 to adopt a citywide minimum wage of $15/hour by 2020. The next day, marching behind a giant banner that read, “McDonald’s: $15 and Union Rights, Not Food Stamps,” 5,000 cooks and cashiers show up at the company’s corporate headquarters in Oak Brook, Illinois, to kick off the largest-ever protest to hit the burger giant’s annual shareholder meeting.
These events represent the two battlegrounds in the growing war over wages taking place across the country. One strategy focuses on getting elected officials in local and state governments to adopt minimum wages above the federal level. The other strategy involves putting pressure on major employees — typically highly visible companies that depend on positive public relations to gain consumers’ dollars — to raise the wages of their employees.
The two strategies complement rather than compete with each other, creating an increasingly powerful movement that involves both low-wage workers and their middle class allies. Even some business leaders understand that raising wages among the working poor is good for the economy because it increases consumer demand for goods and services.
Activists in an increasing number of cities — including Seattle, Chicago, Oakland, San Francisco and now Los Angeles — have pushed their local governments to pass municipal minimum wage laws. Today, 22 cities and counties set their minimum wages above the federal threshold of $7.25 an hour. Twenty-nine states also set their minimum wages above the federal level. Fifteen states index their minimum wages to rise automatically with the cost of living. In just the past two years, thirteen states and the District of Columbia have enacted minimum wage increases. Even voters in so-called conservative “red” states have expressed their frustration with stagnating wages. Last November, in Arkansas, Alaska, South Dakota and Nebraska, voters by very wide margins approved ballot initiatives to raise their state minimum wages.
Washington State’s $9.47 minimum wage is currently the highest among the 50 states, but it will soon be overtaken by California, whose statewide minimum wage will jump to $10 next year.
The Economic Policy Institute recently released an issue brief regarding the projected impacts of the increased minimum wages in 20 U.S. states. The size of the increases ranged from Florida’s $0.12/hour to a $1.25 increase in South Dakota.
According to the Economic Policy Institute (EPI), the increases would provide workers with $1.6 billion in additional wages in 2015. The study estimated that roughly 2.5 million workers would be directly impacted by the increases in 2015. That figure would be even higher if the EPI estimate included the minimum wage hikes in Seattle, San Francisco, and other cities. In Los Angeles, almost half of the city’s private and public work force earns less than $15 an hour. Under the plan approved Tuesday, the minimum wage will rise from $9 to $15 over five years, a 66 percent boost. After 2020, the minimum wage would increase each year based on the inflation rate.
Simultaneously, low-wage workers for fast-food chains, big box retailers, janitors, security guards and others have forged a grassroots movement to pressure their employers to raise starting salaries and benefits. Over the past three years, workers at fast-food chains such as McDonald’s, Taco Bell and Burger King have gone on strike and demanded a base wage of at least $15 per hour. Walmart workers have engaged in one-day work stoppages and protests as part of an escalating grassroots campaign to demand that the nation’s largest private employer pay its workers at least $25,000 a year. Walmart workers and their community allies have organized highly visible protests at hundreds of Walmart stores on Black Friday — the day after Thanksgiving — the biggest shopping day of the year. Some workers and allies have engaged in civil disobedience and been arrested, similar to the tactics of the union movement of the 1930s, the civil rights movement of the 1960s, and the environmental and community organizing movements of the past quarter century.
These protests have won some important victories. In February, for example, Walmart — the nation’s largest private employer with 1.3 million workers — announced that it would pay even its lowest-level workers at least $9 an hour starting this spring and raise that to $10 next year. The company also said that it would boost the pay of department managers’ pay to at least $13 this year and $15 next, thus offering its low-wage “associates” a clearer path to advancement. Walmart estimated that about 500,000 employees will receive a raise, totaling roughly $1 billion a year.
Just one week after the Walmart announcement, TJX Cos, the owner of T.J. Maxx, Marshalls and Home Goods stores, said it would also pay employees to at least $9/hour in June, 2015. By, 2016, the company said that workers who had at least six months’ seniority would receive at least $10 hour. This is nearly identical to the Walmart plan. A recent Credit Suisse analyst report estimated TJX’s average hourly pay at $8.24/hour. TJX has 191,000 employees worldwide, including an estimated 150,800 in the United States. The company’s new wage policy would increase employees’ incomes by an estimated $75 million in the first year alone.
In March, the Wall Street Journal reported that Target planned to increase wages to at least $9/hour. A Target spokesperson said the company’s goal was to “always be competitive with the marketplace.” Target has 347,000 employees in the United States. The company had previously stated that it paid all employees more than the federal minimum wage of $7.25/hour, but the company did not disclose how many employees were earning less than $9/hour. A March 2015 report from investment firm Stifel, estimated that Target’s announced changes would total an increase of $250 million a year in workers’ wages.
In April, McDonald’s announced its own wage increases. The company said that, beginning July 1 of this year, starting wages at company-owned McDonald’s would be one dollar over the locally mandated minimum wage. The company also said that “the wages of all employees up to restaurant manager will be adjusted accordingly.” The company said that these changes would impact more than 90,000 employees (at about 10 percent of McDonald’s restaurants nationwide.)
Increasing Public Support for Higher Wages
The radical ideas of one generation often become the common sense ideas of the next generation. In the case of the minimum wage, the shift in public opinion has occurred much more quickly. The workers’ protest is gaining public sympathy. Polling by Hart Research Associates has found that in just two years, strikes and other protests by low-wage workers have significantly changed public opinion. A poll conducted by Hart in January discovered that 63 percent of Americans support raising the federal minimum wage to $15.
Growing activism by low-wage workers around the country — assisted primarily by SEIU, UNITE HERE and the United Food and Commercial Workers union — has put a public face and sense of urgency over the plight of America’s working poor. The proportion of American workers in unions has fallen to 11 percent — and to 6 percent in the private sector. Union activists view these campaigns among low-wage employees — disproportionately women, people of color and immigrants — as a potential catalyst to rebuild the labor movement as a force for economic justice and as a way to regain public support.
Two years ago, President Barack Obama called for an increase in the federal minimum wage to $9. Last year, he upped the ante to $10.10. Earlier this year, the Democrats in Congress announced their support for a $12 federal threshold. The momentum is so great that even some Republicans are jumping on board. When he ran for president in 2012, Mitt Romney opposed an increase in the federal minimum wage, but a year ago, in an interview on MSNBC’s “Morning Joe,” Romney urged Republicans to endorse a $10.10 minimum wage, arguing that it would help GOP candidates “convince the people who are in the working population, particularly the Hispanic community, that our party will help them get better jobs and better wages.”
Given the current gridlock in Washington — where Congress hasn’t boosted the federal minimum wage, stuck at $7.25 an hour, since 2009 — no one expects the Republican-controlled House and Senate to raise the wage floor. In April, 41 Senators — all Republican — voted to block a bill to raise the federal minimum wage to $10.10 per hour over three years.
But the dramatic changes in public opinion, growing grassroots activism and the escalating number of local and state minimum wages guarantee that this will be an issue in next year’s races for President and Congress. Democrats and Republicans alike will be forced to answer the question, “Which side are you on?” in the growing debate over widening economic inequality, persistent poverty and stagnating wages.
An increase in the federal minimum wage to $12 would pump billions of dollars into the U.S. economy, according to a report by EPI and the National Employment Law Project (NELP). Workers who are both directly and indirectly affected would see nearly $80 billion in increased earnings over the next five years. Because low-wage workers tend to spend increased earnings locally on basic needs, this will benefit Main Street businesses that rely on consumer spending.
When employers don’t pay their workers a living wage, taxpayers are forced to pick up the tab in the form of government assistance. A NELP study revealed that the low wages paid to employees of the 10 largest fast-food chains cost taxpayers an estimated $3.8 billion a year by forcing employees to rely on public assistance to afford food, health care and other basic necessities.
American taxpayers pay $153 billion in public assistance to working families each year, according to a recent study conducted by the University of California’s Berkeley Center for Labor Research and Education. This is more than the annual budgets of the U.S. Department of Education and Health and Human Services combined.
Some states are considering telling the poor-paying companies to pick up the tab instead. Advocates call this the “Walmart tax.”
“It’s time for us to stop subsidizing these corporations. It’s time they redesign their business models to pay their employees a wage they can live on,” wrote Connecticut state representative Peter Tercyak, a Democrat who sponsored legislation to charge large companies a fee of $1 per hour, per worker, for all workers who make less than $15 an hour. Only companies with more than 500 employees would pay, with the money raised going into state programs for early childhood development and social services.
On Wednesday, in the midst of the protests at McDonald’s’ corporate headquarters, four U.S. public pension fund officials warned that McDonald’s and other companies may be jeopardizing their own futures by returning excessive amounts of cash to investors via share buybacks. The four officials — New York City Comptroller Scott Stringer, New York State Comptroller Thomas DiNapoli, Chicago Treasurer Kurt Summers and California Controller Betty Yee — are fiduciaries to pension funds with $860 billion in assets.
Growing Momentum for Change
This upsurge in the wage wars hasn’t come about all of a sudden. It is the result of years of both changing conditions, effective grassroots organizing, and changing public views about the poor.
Throughout his presidency (1981-1988), Ronald Reagan often told the story of a so-called “welfare queen” in Chicago who drove a Cadillac and had ripped off $150,000 from the government using 80 aliases, 30 addresses, a dozen Social Security cards and four fictional dead husbands. Journalists searched for this welfare cheat and discovered that she didn’t exist. Nevertheless, Reagan kept using the anecdote to demonize the poor.
Reagan’s bully pulpit, and the increasing success of right-wing think tanks and writers in dominating public discussion about poverty, led to a protracted political debate about welfare. To show that he was a different kind of Democrat, Bill Clinton campaigned in 1992 to “end welfare as we know it,” in part by “making work pay.” Congress enacted so-called welfare reform in 1996, limiting the time people can receive assistance.
Although liberals understandably decried this approach, it ironically helped shift public opinion and stereotypes about the poor. According to historians and sociologists, the public distinguishes between the “undeserving” and the “deserving” poor. The latter are viewed as more responsible, hard-working, and victims of circumstances beyond their control. Increasingly, Americans came to view low-income people as the “working poor,” a group considered more sympathetic than the so-called “welfare poor.”
In the 1990s, the mainstream news media began to pay more attention to the working poor, while academics and journalists expressed growing concern about the “Walmart-ization” of the economy — the growing number of low-wage jobs with few benefits. Barbara Ehrenreich’s 2001 book, Nickel and Dimed: On (Not) Getting By in America, recounted her experiences toiling alongside hard-working low-wage employees who couldn’t make ends meet. It soon became a national bestseller. In the 1990s and early 2000s, community and union organizers successfully pushed local governments in more than 100 cities to adopt “living wage” laws, narrowly targeted to employees of firms that had contracts and subsidies from local governments.
In 2004, San Francisco and Santa Fe, New Mexico were the first two localities to adopt citywide minimum wage laws, now $10.74 and $10.66, respectively. Then, in November 2013, 66 percent of the voters in Albuquerque, New Mexico, voted in favor of establishing a citywide wage that would automatically adjust in future years to keep up with the rising cost of living; it is currently $8.60 an hour.
That same day, 59 percent of voters in San Jose, California approved a citywide $10 an hour wage that would also increase with the cost of living. The San Jose victory created a regional momentum. In May of last year, the City Council of Sunnyvale — a San Jose suburb of over 140,000 residents — voted by a 6-1 margin to establish a local minimum wage of at least $10/hour, and to increase it annually with the cost of living. That same month, in a remarkable display of regional cooperation, Washington, D.C. and its suburban neighbors, Montgomery and Prince Georges County, Maryland, all adopted laws establishing a minimum wage of $11.50. The joint effort was forged to counter business warnings about an exodus of jobs if the nation’s capital moved on its own. In 2012, Long Beach, California voters passed a ballot measure that raised the minimum wage for hotel workers in that tourist city to $13 per hour and guarantees hotel workers five paid sick days per year.
In November 2013, voters in the suburb of SeaTac approved a union-sponsored Good Jobs Initiative’ to raise the minimum wage to $15 an hour for workers in Seattle-Tacoma International Airport and at airport-related businesses, including hotels, car-rental agencies and parking lots. The new law applied to only 6,000 workers, but the victory had huge ripple effects. Seattle Mayor Mike McGinn and his chief challenger Ed Murray both supported the SeaTac initiative and raised the possibility of doing the same thing in Washington’s largest city.
On the same day that the SeaTac measure won, so did Murray and Kshama Sawant, a socialist candidate for Seattle City Council who had made the $15/hour minimum wage a centerpiece of her campaign. After his victory, Murray followed through. He appointed a 24-person Income Inequality Committee — co-chaired by Howard Wright, CEO of Seattle Hospitality Group, and David Rolf, president of SEIU Local 775, who had been a major force behind the minimum wage proposal. Rolf was adept at playing the inside/outside game. While pushing to forge an agreement among the task force members, he worked with Seattle’s labor movement and community activists to keep the pressure on city officials and to keep the issue in the media. He made sure that economists and other experts were available to educate the public, politicians and journalists and to rebut the business leaders’ warnings that the $15 minimum wage would kill local jobs.
Both Rolf and Mayor Murray discovered that socialist Sawant was a useful, though unpredictable, ally. She was working with a group called 15 Now that threatened to put an initiative on the November 2014 ballot to raise the minimum wage to $15 an hour on January 1, 2015 for all businesses. Murray told business leaders that unless they reached an agreement with the unions, he would announce his own plan that was closer to Sawant’s proposal than the phased-in plan that was being discussed in the mayoral task force.
Seattle’s progressives clearly had the political momentum. Even after a series of compromises, the unions and their allies won a huge victory. They agreed to a three- to seven-year phase-in, with large businesses — those with at least 500 workers — required to reach the $15 wage first.
The combination of worker protests against stingy corporate employers and battles to get politicians to enact local and state minimum wage laws is part of a broader movement to address America’s widening inequality. A recent study by the Institute for Policy Studies found that the bonuses handed to 165,200 executives by Wall Street banks in 2013 — totaling $26.7 billion — would be enough to more than double the pay for all 1,085,000 Americans who work full-time at the current federal minimum wage of $7.25 per hour.
The Occupy Wall Street movement, which began in New York City in September 2011 and quickly spread to cities and towns around the country, change the national conversation. At kitchen tables, in coffee shops, in offices and factories, and in newsrooms, Americans began talking about economic inequality, corporate greed, and how America’s super rich have damaged our economy and our democracy. Occupy Wall Street provided Americans with a language — the “one percent” and the “99 percent” — to explain the nation’s widening economic divide, the super-rich’s undue political influence, and the damage triggered by Wall Street’s reckless behavior that crashed the economy and caused enormous suffering and hardship.
A national survey by the Pew Research Center conducted in January 2014 found that 60 percent of Americans — including 75 percent of Democrats, 60 percent of independents, and even 42 percent of Republicans — think that the economic system unfairly favors the wealthy. The poll discovered that 69 percent of Americans believe that the government should do “a lot” or “some” to reduce the gap between the rich and everyone else. Nearly all Democrats (93 percent) and large majorities of independents (83 percent) and Republicans (64 percent) said they favor government action to reduce poverty. Over half (54 percent) of Americans support raising taxes on the wealthy and corporations in order to expand programs for the poor, compared with one third (35 percent) who believe that lowering taxes on the wealthy to encourage investment and economic growth would be the more effective approach.
Even after the Occupy protestors moved out of parks and public spaces, the movement’s excitement and energy were soon harnessed and co-opted by labor unions, community organizers, and progressive politicians like mayors Ed Murray of Seattle, Bill de Blasio of New York, Betsy Hodges of Minneapolis, Eric Garcetti of Los Angeles, and many others, who have embraced the idea of using local government to address income inequality and low wages.
Business Lobby Groups Are Crying Wolf
Major business lobby groups routinely oppose raising the minimum wage at local, state and federal levels. But a recent survey of business executives suggests that these trade associations may not be speaking for the majority of their members. In fact, a majority of business executives surveyed by CareerBuilder.com actually favor raising the minimum wage, saying it would raise the standard of living among their employees and give the companies a better chance to hold on to their workers. A whopping 62 percent of employers said the minimum wage in their state should be increased. A mere 8 percent of those surveyed said that the current minimum wage of $7.25 an hour is fair. The majority of employers, 58 percent, said a fair minimum wage is between $8 and $10 an hour, while others nearly 20 percent said a fair minimum wage is between $11 and $14. And another 7 percent believed that minimum wage workers should make $15 or more per hour. (The study was based on a survey of 2,188 full-time hiring and human resource managers).
In other words, progressives have clearly won the moral argument. Americans believe that people who work should not live in poverty. So business groups have to resort to persuading the public that raising the federal minimum wage — or adopting a living wage or minimum wage plan at the local level — will hurt the economy. Business lobby groups and business-funded think tanks – including the U.S. Chamber of Commerce and its local affiliates, the National Restaurant Association, the American Legislative Exchange Council, the Employment Policies Institute (an advocacy group funded by the restaurant industry) and other industry trade associations — typically dust off studies by consultants-for-hire warning that firms employing low wage workers will be forced to close, hurting the very people the measure was designed to help.
But such dire predictions have never materialized. That’s because they’re bogus. In fact, many economic studies show that raising the minimum wage is good for business and the overall economy. Why? Because when low-wage workers have more money to spend, they spend it, almost entirely in the local community, on basic necessities like housing, food, clothing and transportation. When consumer demand grows, businesses thrive, earn more profits and create more jobs. Economists call this the “multiplier effect.”
Moreover, most minimum-wage jobs are in “sticky” (immobile) industries — such as restaurants, hotels, hospitals and nursing homes and retail stores — that can’t flee.
Business arguments against raising the minimum wage — particularly that it is a “job killer” — are crumbling. An analysis by Fortune magazine concluded that Wal-Mart can afford to give its employees a 50 percent raise without hurting the company’s profits or stock price. The analysis explained that “[b]etter-paid employees are likely to work harder and stick around longer. If employees made more, they would have more to spend at Wal-Mart.”
A recent University of Massachusetts study concluded that fast-food giants like McDonald’s could raise wages to $15 without shedding jobs, which flies in the face of the National Restaurant Association claims that,”$15 would clearly jeopardize opportunities for existing and prospective employees.” In a paper published in the Harvard Business Review, William Lazonick, a University of Massachusetts economist, and two colleagues documented that McDonald’s has spent over $30 billion on share buybacks in the last decade. McDonald’s, the world’s largest fast-food chain, has 36,200 retail outlets in 119 countries, 6,700 of which are owned by the corporation; the rest are run as franchises. In the U.S., the company owns 1,500 of the 12,500 McDonald’s restaurants with a total of 840,000 employees. Lazonick and his co-authors argue that McDonald’s should have spent that money raising worker pay, or invested it in the company, instead of using it to “manipulate” its stock price and enrich executives and short-term investors.
(This feature was crossposted on the Huffington Post with permission.)
Golden State Green Rush: A Grower’s Story
Bryant Mitchell drove the 450 miles between Los Angeles and Guerneville twice a week, learning, among other facets of horticulture, how distillation practices could be applied to making marijuana concentrates. In time he would become a master grower.
“This is not something people welcome a lot of blacks into. We’re the guy who’s selling it. That’s all we are, and that’s the way they look at us.”
A slim hall leads into a dark room where one enters the soul of the Blaqstar Farms cannabis grow, a 30-light operation rooted in East Los Angeles. On the other side of this warehouse where the lighting is standard luminosity, a couple of cool brown cats in their forties trim a strain called Birthday Cake and fill bags with the fluffy, freshly coiffed green nuggets. But it’s in this dark room where Blaqstar begins. Its owner Bryant Mitchell, 40, shows the soul of his business, a clutch of genetics — prime cannabis plants for breeding.
“Dah-nale,” Mitchell says in his Texas drawl, “all these plants here come from those plants back there.” He points to some weed that’s ready to join the cool brown guys at the breakdown table. The plants, he says, “come from buddies, from respect, from people trying to see if I could grow their old stuff.”
If the cannabis equity movement in America is to ever be more than just Green Rush theater —an inconsequential sideshow to the emerging multibillion-dollar legal marijuana industry — it’s going to need a lot of anomalies like Mitchell. Black people didn’t get our 40 acres and a mule after the Civil War, and we’ve yet to gain the trust and money to be brought into the cannabis industry at a foundational level. In a world where black celebrities endorse cannabis brands that people of their racial heritage don’t own, Mitchell is the rare black grower operating at the 30-light level and in the light of adult-use legal scrutiny. Necessity brought Mitchell from dispensary owner to grower after he hired someone who couldn’t repeat what he’d previously cultivated. In only a few years, Blaqstar has earned the endorsement of the popular rap act Migos and the admiration of cannabis equity supporters.
This grower is not blind to the turnabout he represents.
“This is not something people welcome a lot of blacks into,” says Mitchell. “We’re the guy who’s selling it. That’s all we are, and that’s the way they look at us.”
The enabling real estate, money and cannabis have not come together for the hundreds of aspiring legitimate cannabis entrepreneurs presently struggling to get in.
Who is this cash-rich black dude whose eyes shine with intelligence? He’s not a rapper or actor or a man who plays with a ball. Bryant Mitchell is a master marijuana grower. Cross the street from his warehouse for a cup of coffee — where his neighbors “know, but they don’t know” — and the joy that folks show from just seeing him is apparent. They won’t let him be, and it’s not just because of the pot.
Sit down with Mitchell over that coffee and see him let loose a single tear while running through the list of family and friends he’s lost to the war on drugs. That lone tear tells a story with dimensions the nation’s only beginning to comprehend.
Mitchell comes from sales, but in a first-class sense. The son of a cop, he’s taken operations and strategy as the basis of his training. After graduating from historically black Prairie View A&M University, just outside of Houston, he received an MBA from the University of Chicago. Mitchell flew around America pointing out to corporate executives whom to fire, telling his clients the time while using their own expensive wristwatches to do so.While he was in the Bay Area in his twenties and consulting for Chevron, Mitchell complained to a colleague that travel aggravated his sciatica, and the colleague introduced cannabis to his world. Not long after, Mitchell began buying and growing for himself, both in California and at his home in Houston. His oil industry consulting after the 2010 Deepwater Horizon spill brought the trove of money that allowed Mitchell to buy and invest in cannabis so heavily. In a sense, that Birthday Cake in East L.A. comes from hours billed to British Petroleum, a kind of bonus treat.
Women Abuv Ground CEO: “Most underground growers don’t want to come out. It took me years to find a lot of black growers.”
He bought a medical marijuana dispensary in the San Fernando Valley called Valley High. It was a smash hit, but Valley High was raided in 2014. Mitchell says he lost $250,000.
But he had $600,000 banked, he says, part earned from consulting, part earned from his dabbling in the marijuana market. He’d put another $400,000 into building an indoor grow. But Mitchell’s cultivator was proving unable to repeat the dope work he had done for Valley High.
“Here’s my chance to do it,” he said. “I don’t know how to grow at this volume. As a consultant, one thing you learn is how to learn. I’ve got to learn fast as I can, and I can’t learn from my grower because he doesn’t know how to grow.”
Mitchell resigned from his day job and decided to go all-in on cultivating cannabis, big time. Then he headed to Sonoma County and Guerneville, California, 75 miles north of San Francisco.
Most Californians couldn’t find Guerneville on a map. Mitchell drove the 450 miles between Los Angeles and Guerneville twice a week. He started off watering plants at a partner’s 78-acre outdoor grow. He also volunteered at Sonoma County wineries, learning, among other facets of horticulture, how distillation practices could be applied to making marijuana concentrates. In Sonoma County the newbie Mitchell unearthed the goods to become a master grower.
After Bryant did a second harvest, this MBA learned that he still needed to learn.
“I’d go out with the Hispanic guys and would be like, ‘Hey, I’m gonna help,’” he says. “They’d say, ‘Come on in.’ No roadblocks. I’d be out for a week and would be one of the best trimmers. Never told ‘em I was growing.
“I wanted to see the plant from start to finish.”
Back at the East L.A. indoor grow, the first post-Guerneville harvest came in. The first large-scale weed came out larfy — immature and lacking in structural density.
“You ever cook eggs?” he says. “Easiest thing in the world, right? Ya throw ‘em in the pan, you get ‘em out. But cook eggs for 200 people, it’s a lot more complicated — even though it’s not that complicated. You’re not going to be consistent.”
He did a second harvest. The pot came out better. But then the thing that sets this MBA apart kicked in yet again. He learned that he still needed to learn.
“I’m doing these damn [harvests] every six months,” he says. “I gotta change that shit. Why does everybody do it that way? It’s a project. So why don’t I make every room a project —stagger it, and make sure I can deal with cash flow issues. It was out of necessity, but when I staggered it, guess what? My learning curve turned over so much quicker.”
It’s a characteristically African-American approach, turning necessity into productivity. Improvisational like basketball, if not as innovative as jazz.
“Bryant represents what we want to see in the culture, someone who’s compliant and doing business the right way,” said Bonita Money, CEO of Women Abuv Ground, a networking organization assisting people of color enter the cannabis industry. “Most underground growers don’t want to come out. It took me years to find a lot of black growers.”
Compliance has come because Mitchell’s money is cleaner than most. His techniques are organic, so his marijuana is also compliant. He says that living in the warehouse with his product nudged him toward clean growing; if spraying chemicals made him sick, the stuff could not in the end be good for customers, he surmised. Most black-market growers don’t know what he knows.
The legion of small-time pot farmers knows nothing of Guerneville tactics. Certainly, they don’t have multi-acre, outdoor Cali grow money, prompting this question: Until the state’s cannabis equity programs set aside opportunities for those with no legacy of having land, are we just doing theater?
“They are; I’m not,” Mitchell says. Cannabis equity programs “don’t know how to make sure social equity is delivered. Not defined, but delivered.”
The enabling real estate, money and cannabis have not come together for the hundreds of aspiring legitimate cannabis entrepreneurs presently struggling to get in. Oakland, Los Angeles, San Francisco and Sacramento have defined the strategy of a business initiative, but the means for realizing the goals aren’t yet in place. Help connecting investors and developers and building relationships with money sources is still missing in action.
So, too, are relationships with the weed veterans still deep in the black market.
“You treat adult-use marijuana like a business, then forget that there’s been a business here for 35 years,” Mitchell says, growing animated. The fact is that the underground pot market, in large part popularized by Californians of color, is far, far older than that.
“Today I’m gonna learn how to do this,” he continues. “And I’m going to share this. We need an ecosystem. That ecosystem doesn’t preclude white people participating. I want to include. But I want them to understand: You’re coming to us, ya dig?
“We made it because once they got our shit, they had to keep getting it,” Mitchell goes on. “Once you get into a motherfucker’s spot, and they’ve got to have your shit? They’ve got to have it. You turn from a want to a necessity. That’s what I had to position Blaqstar as — a necessity.”
Tomorrow: The Trimmigrant’s Tale
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Golden State Green Rush: Cannabis’ Promise and Problems
Will the marijuana El Dorado bring new wealth to California and its inhabitants, or will it produce an historic buzz kill?
Although medical marijuana use had been legal in California since 1996, it wasn’t until New Year’s Day that adults in this state could lawfully light up a joint for the sheer pleasure of it. Yet unlike the end of Prohibition 85 years before, the response was surprisingly subdued, and ever since then life in California seems to be business as usual. Except that it isn’t.
Everything is going to radically change, and probably sooner than later. For the legalization of pot is slowly unleashing a new gold rush — the so-called Green Rush — that, like many gold rushes before it, will likely lead to environmental dangers, racial injustices and economic disparities that we can only dimly perceive today. Will the cannabis El Dorado bring new wealth to California and its inhabitants, or will it produce an historic buzz kill?
Nearly two years ago Capital & Main presented a series of stories examining some of the possible effects of legalization, and this week, as the pot-centric date of 4/20 approaches, veteran journalist Donnell Alexander looks at the ways some Californians are preparing for the coming wave of change. As he notes, “No state has a relationship dynamic remotely like the one between California and marijuana.” Partly that’s because annually we consume 2.5 million pounds of the drug, while producing more than 13 million pounds of it.
In a report from Oakland, Alexander writes of the attempts by that city to legislate “cannabis equity” in order to prevent marijuana’s perennially victimized neighborhoods of color from being completely left out of the Green Rush. The strategy is to give would-be pot entrepreneurs there a leg up on deep-pocketed competitors.
Alexander also profiles an African-American grower, Bryant Mitchell, whose journey has taken the University of Chicago MBA from being a Chevron consultant to a master grower whose Blaqstar operation in East Los Angeles has produced an artisanal strain of weed called Birthday Cake. And, in a third story, Alexander interviews an Emerald Triangle bud trimmer, a woman living on the lowest-paying and most exploited rung in the cannabis hierarchy. “Matilda” describes a world of guns, loutish bosses, outhouses and wild bears. And yet marijuana’s legalization may offer the nomadic workers employed by larger pot farms hope in the form of state-enforced workplace protections and the chance to join a union.
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Is a Conflict-Minerals Law Helping or Harming African Miners?
A Dodd-Frank rule requires Silicon Valley tech companies and others to reveal whether minerals in their supply chains fund conflicts in Central Africa. Why do some progressives oppose this requirement?
The conflict-minerals law’s opponents include progressive journalists and academics who say the rule rests on an overly simplistic analysis of a complex crisis.
By the end of next month Intel, HP and more than a thousand publicly traded companies are expected to report to the U.S. Securities and Exchange Commission on whether the minerals in their cellphones, laptops or other products were used to fund armed conflict in Central Africa.
This, despite concerted attempts by the Trump administration and Republicans in Congress to do away with an Obama-era rule that requires them to reveal whether their supply chains include tin, tantalum, tungsten or gold from the Democratic Republic of Congo (DRC) and surrounding countries.
The survival of Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act may look at first glance like a case of blue-state resistance with California’s tech companies—backed by their ethically minded consumers—standing strong against Republicans bent on destroying progressive, forward-looking regulations.
“The legislation has actually made the situation worse for these [miners].”
“Tech companies are the ones leading the way,” says Annie Callaway, deputy director of advocacy at the Enough Project, a Washington, DC-based human rights organization that led the campaign to pass the conflict mineral law. Their due diligence efforts have been among the best arguments against those who say the law is too burdensome, she says.
But the law’s opponents include progressive journalists and academics who say the rule rests on an overly simplistic analysis of a complex crisis. Some say it has done more harm than good to Eastern Congolese mining communities, whose livelihoods are already precarious.
The law has deprived “very vulnerable populations, already very poor people, of their sole means of livelihood,” says Séverine Autesserre, a political science professor at Barnard College and Columbia University, and a former humanitarian aid worker who studies the DRC. “The legislation has actually made the situation worse for these people.”
The law seems to have staying power, nonetheless. Eight years after its passage, tech companies have changed their sourcing practices, making it unlikely that the law’s repeal would alleviate companies’ concerns about having their products associated with violent militias, supporters and a critic of the measure say.
There are “very strong business reasons” to maintain the relationships and programs connected to Dodd-Frank, according to Michael Rohwer, who worked on conflict minerals for the Electronic Industry Citizenship Coalition, now known as the Responsible Business Alliance.
Companies increasingly recognize the efficiencies as well as the “risk mitigation” benefits, says Rohwer, now with BSR, a non-profit business network focused on sustainability.
The risks of sourcing from the DRC were made clear to companies in 2008 when U.S. human rights organizations launched a campaign that highlighted the role that the minerals found in jewelry and electronics play in funding violence, including sexual violence used as a weapon of war against women and girls, in the eastern DRC.
The goals of multinational companies—and their ethically-minded consumers—are not identical to those of any region, war-torn or otherwise.
That campaign drafted high profile celebrities, like actors Ben Affleck and Robin Wright, as well as idealistic college students eager to leverage their buying power and social media prowess to help a region that has seen millions die over the last two decades in the deadliest conflict since World War II.
Last fall, the Enough Project, a lead organization in the campaign, released a progress report that ranked the 20 largest jewelry retail and consumer electronics companies—industries that consume the most tin, tantalum, tungsten and gold–on their sourcing practices. Four of the five best performers—in terms of responsible sourcing practices–were Silicon Valley-based tech companies, with Apple securing the lead spot.
Thus far, the rule has withstood a lawsuit brought by the National Association of Manufacturers, a threatened executive order and House legislation aimed at its elimination. (The biggest threat to the rule remains the attachment of a rider to a continuing resolution in Congress, according to Arvind Ganesan of Human Rights Watch.)
The law has also withstood criticism from more than 70 critics who signed an open letter in 2014 that blamed Dodd-Frank for driving some unemployed miners to join militias or to turn to smuggling, and for misunderstanding the cause of the conflict. Last year, a journalist completed a two-part investigative series that found that the law imposed a monopoly on miners that suppressed prices and forced some to trade their wares illegally.
Both the rule’s advocates and critics agree that its roll-out was problematic. The DRC’s president, Joseph Kabila, instituted a six-month ban on mining shortly after the law was passed in 2010 but before it was implemented. A United Nations Working Paper, published in 2016, attributed a child mortality increase of 143 percent in mining communities to the implementation of the Dodd-Frank conflict mineral rule.
The Enough Project’s Callaway argues that most of the criticism of the Dodd-Frank rule relies on information from 2014 and earlier, in the aftermath of its implementation. “Since then, there’s been tons of progress,” she says. She points out that of miners producing tin, tantalum and tungsten, 79 percent of those surveyed in 2016 by the International Peace Information Society are no longer working under threat of armed groups and that less violence can pave the way for other improvements, “once the conflict is out of the mines.”
But “overall, armed presence at mining sites has persisted over the last years in eastern DRC,” according to the study by the Belgian International Peace Information Service that Callaway cites. That’s because the majority of gold mines – the most important mining sector in the region – remain under the influence of armed actors, even as the tin, tantalum and tungsten mines have seen dramatic reductions in violence, according to the report.
The law has supporters from the region. Representatives from more than a 100 Congolese civil society organizations signed letters in support in of the rule when SEC commissioner Michael Piwowar opened up public comment to explore whether it should be implemented early last year. “The people who are most impacted by these changes are saying please don’t mess with this,” Callaway said.
Ben Radley, a British doctoral student, who helped make a 2015 documentary sharply critical of the Enough Project, remains a skeptic of the law. But he argues that repealing it would also constitute “a backward step” and a futile one at a time when the DRC and the European Union are creating sourcing standards for mining.
It’s very difficult to measure the impacts of the law because information is so hard to come by in the region, adds Radley, who lives in Kinshasa. “The numbers are so easily manipulated from both sides of the debate” because of lack of quality data, he says.
Furthermore, the Dodd-Frank rule is not the only force affecting miners’ livelihoods for better or worse. The price of minerals has been falling in recent years. Meanwhile, a U.N. peacekeeping force of 18,000, the world’s largest, is stationed in the eastern part of the country.
The laws’ critics say there are lessons to be learned for consumers and businesses that want to make a positive difference in the region. Autesserre would like to see Western advocacy groups do a much better job consulting Congolese mining communities as they develop their policy agenda. Radley suggests that advocates focus on labor and human rights issues instead of ensuring products are “conflict free.”
The Enough Project’s report calls for increased investment in “livelihood projects” on the part of end-user companies doing business in the region. So far, such investment has been inadequate . Apple, Microsoft Corp., Google, Signet and Tiffany contributed a paltry $500,000 toward improvements in Congolese mining communities in the last fiscal year, a mere “rounding error of the more than $3 trillion combined market capitalization of the 20 companies Enough ranked,” as the report points out.
Most of the due diligence work conducted by multinational corporations happens outside the DRC, at smelters, the factories that extract the minerals from the ore. Radley says companies would have more credibility if they undertook the more resource-intensive approach of working directly at the mine site, where advocates hope to improve conditions.
Some companies are already moving in that direction. Bloomberg reported in February that Apple is in negotiations to secure cobalt, a mineral used in batteries, directly from miners. Cobalt is not covered under the Dodd-Frank rule, but a 2016 investigation conducted by Amnesty International found cobalt was mined by child laborers.
Still, the goals of multinational companies—and their ethically-minded consumers—are not identical to those of any region, war-torn or otherwise. Perhaps partly with the tangled politics and human rights landscape of Central Africa in mind, Apple pledged last April to one day end its reliance on mining entirely and make products only from renewable resources or recycled material.
That has BSR’s Rohwer feeling optimistic. “I’m eager to see more companies get involved in product reuse, repair, refurbishment and recycling,” he says. “I think that would be a huge benefit for the tech sector.”
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Salinas Farm Workers March to Oppose Immigration Raids
Protest marches, which also commemorated the birthday of UFW co-founder Cesar Chavez, follow several months of UFW activity opposing immigration enforcement, and of organizing workers to defend themselves against it.
All photos by David Bacon
In Salinas, California, last Sunday, over a thousand farm workers and allies filled the streets of its working-class barrio to protest the Trump administration’s immigration policies, including an increase in immigration raids that, according to United Farm Workers President Arturo Rodriguez, are “striking terror in rural communities across California and the nation.” It was one of six marches taking place this month in agricultural communities around California, Texas and Washington state.
Highlighting the cost of the immigration crackdown were the deaths last month in Delano of husband and wife Santos Hilario Garcia and Marcelina Garcia Porfecto. On March 13, the couple, both farm workers, had just dropped off their daughter at school on their way to work when two black, unmarked Jeeps with tinted windows, driven by Immigration and Customs Enforcement (ICE) agents, stopped them. The couple drove off, but lost control of their car, hit a utility pole and flipped over, killing them both. They leave six children behind.
According to a police report obtained by the Los Angeles Times, immigration agents told police that they were not in “pursuit with emergency lights/sirens,” but that surveillance footage appears to show the ICE vehicles following the couple with emergency lights flashing. The Delano Police Department has asked Kern County prosecutors to investigate the discrepancies in the immigration agents’ accounts of the incident. On Monday, ICE spokesperson Richard Rocha sought to divert blame in a statement to the Times that sanctuary policies, “have pushed ICE out of jails,” and “force our officers to conduct more enforcement in the community — which poses increased risks for law enforcement and the public … It also increases the likelihood that ICE will encounter other illegal aliens who previously weren’t on our radar.”
The marches, which also commemorated the birthday of UFW co-founder Cesar Chavez, follow several months of UFW activity opposing immigration enforcement, and of organizing workers to defend themselves against it. The union has distributed fliers in the fields that tell workers, “Don’t sign anything and demand to speak with a lawyer. Take photographs, videos, and notes about what happens, including names, and license plates.” It lists a toll-free number to call for help.
Organizers are advised by the UFW Foundation to tell employers that ICE cannot enter the private area of their business without a signed judicial warrant, that in I-9 audits, employers have three work days to produce the forms, and that employers also have the right to speak to an attorney before answering questions or signing ICE documents.
In March, UFW protesters in Hanford, Visalia and Modesto picketed the offices of Republican Congressmen David Valadao, Devin Nunes and Jeff Denham, respectively. General meetings denouncing ICE actions were also held in Salinas and Orosi, and protests in Merced and Bakersfield.
“Do growers who supported and financed the campaign that put Donald Trump in office condone the climate of fear that is gripping farm worker communities?” a union statement asks. It points out that growers are currently supporting bills in Congress to remove protections from guest workers recruited in Mexico. “Such legislative schemes are aimed at driving down the wages and working conditions of all agricultural workers. We will fight them.”
The Center for Immigration Studies, an arm of the anti-immigrant lobby in Washington, DC, used Cesar Chavez’ birthday to announce the launch of National Border Control Day “in tribute to the late labor leader and civil rights icon’s forceful opposition to illegal immigration and support for strong border enforcement.”
UFW spokesperson Marc Grossman called that “an abomination.” A UFW statement in response said, “There are two separate and distinct issues — immigration reform and strikebreaking.” The union had a controversial history of trying to use immigration enforcement to remove undocumented strikebreakers in strikes during the late 1960s and ‘70s, but the statement says that from the first grape strike “the UFW welcomed all farm workers into its ranks, regardless of immigration status.”
It noted that the union opposed employer sanctions, which made it illegal for undocumented immigrants to work, and lobbied for the amnesty provision in the 1986 Immigration Reform and Control Act that enabled one million undocumented farm workers to become legal residents. Given that the union’s membership reflects the composition of farm workers generally, most of whom have no papers according to Farmworker Justice, a farm worker advocacy group in Washington DC, it is possible that a majority of the union’s members are undocumented.
According to Rodriguez, protesting immigration enforcement is part of defending farm laborers generally, both union and non-union. At the Salinas rally, Rodriguez told workers and supporters “Santos Hilario Garcia and Marcelina Garcia Porfecto, and their six orphaned children, are casualties of the Trump administration’s targeting of hard-working immigrant farm workers who toil and sacrifice to feed all of us.”
The Big Money: Revealing the Chasm Between CEO and Worker Pay
Co-published by Fast Company
Thanks to Dodd-Frank, companies are now required to publicly disclose their CEOs’ pay in comparison to their median employees’ salaries.
Co-published by Fast Company
If you’re among the roughly half of all Americans who don’t own stock, you may not care that April is the peak of proxy filing for stockholders. But if you have a 401(k) or investments in a pension or mutual fund, you do own stock and therefore have some say in the operations of the biggest corporations in the world.
This year you may want to pay a little extra attention. Eye-popping new information about outsize CEO pay is coming out in proxy statements filed with the Securities and Exchange Commission. Last year’s SEC rule mandated by Dodd-Frank Wall Street reform legislation for the first time requires companies to disclose CEO’s pay in comparison to the median employee salary range.
Now you can go online and see that Indra Nooyri, CEO of PepsiCo, purveyor of Cheetos, Doritos and an array of beverages, was compensated at a rate of 650-to-1—her payout of $31,082,648 compares to the median salary of $47,801. PepsiCo emphasizes that more than half of its employees are overseas in “developing and emerging markets such as Mexico, Russia, Brazil, China and India,” where market trends and the cost of labor can influence employee compensation rates.
Fresh Del Monte Produce CEO Mohammad Abu-Ghazaleh was paid $8.5 million last year, contrasted with the median worker salary of $5,833 annually, a ratio of 1,465 to 1. Factored into the equation are the 80 percent of employees who work in economies where the pay scales are at the low end–Costa Rica, Kenya, Guatemala and the Philippines.
The multi-million-dollar executive compensation figures (which include bonuses, cash and pension boosts) are on display in the fourth annual report on CEO pay released in March by the non-profit As You Sow. The foundation promotes corporate social and environmental responsibility through shareholder advocacy.
High CEO pay “over-emphasizes the impact of a single individual at a company, rather than rewarding the work of the many company employees,” the report says. “It raises economic inequality to such a level that it becomes increasingly incompatible with a well-functioning economic system.” Pay scales don’t correlate to CEO performance and higher returns for investors, the report notes.
Pay tables are sortable by company name and total compensation, but there’s no pay ratio data yet. Information is just trickling out as proxy season gets underway, one of the authors, Rosanna Landis Weaver, CEO Pay program manager at As We Sow, told Capital & Main. She has been busily gleaning it for the report next year from the 14A schedules that companies are required to file with the SEC to make available for the SEC website.
“This is fairly new,” she said. “Investors didn’t get to vote on pay until Dodd-Frank.”
The As You Sow Foundation suggests investors exert pressure in the direction of pay equity during proxy voting season and provides a how-to guide.
“One of the things you can do is move your money to a social investment fund,” Landis Weaver said. “You could talk to your adviser and say ‘I’m looking to move my money to a fund that votes against these pay packages more often.’”
There are other resources online. FundVotes.com explains proxy voting and tracks investment policies by issues such as gender pay equity.
It’s not a mass movement but as more information comes out, Landis Weaver said, “people are beginning to figure out how to use this and [are] making more and more noise about this stuff.”
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Study: Forced Arbitration Contracts Cover 60 Million Workers
According to Economic Policy Institute research, more than 67% of California’s non-union, private-sector workplaces are governed by mandatory arbitration agreements, compared to a national average of 54%.
Images of Oklahoma teachers in the streets demanding pay raises and education funding, and of hotel workers and Hollywood celebrities fighting sexual harassment in the workplace may have cheered labor advocates. But a new study, released today by the Economic Policy Institute, offers a sobering reminder of the eroding bargaining power of U.S. workers.
In a trend made possible by a series of Supreme Court decisions, American employers are increasingly requiring their employees to give up their rights to pursue claims in court by requiring them to sign arbitration agreements as a condition of employment, according to the study.
Those agreements push disputes over pay and discrimination into privately-funded and confidential arbitration proceedings that labor-side attorneys and some researchers say favor employers. Since the early 2000s, the share of workers subject to mandatory arbitration agreements has more than doubled and now covers 60 million private-sector workers, according to the EPI report.
“Mandatory employment arbitration,” the report claims, “has expanded to the point where it has now surpassed court litigation as the most common process through which the rights of American workers are adjudicated and enforced.”
Mandatory arbitration agreements are widespread in consumer contracts for everything from cellphones to nursing homes. Employee arbitration agreements have drawn less attention. But the “Me Too” movement shone a light on employment contracts that advocates say protect workplace predators from accountability.
Fox News anchor Gretchen Carlson, who ultimately won a settlement from the network for $20 million over sexual harassment, said last year that ending mandatory arbitration in employment contracts “has become my mission.” Her campaign, however, has been an uphill battle while Republicans are still in control of Congress.
The EPI report, an expanded version of one published last September, finds that such agreements are most common in workplaces with more women, African-American and low-wage workers.
California is one of three states where mandatory arbitration agreements are especially prevalent. More than 67 percent of non-union, private-sector workplaces in the state are covered by mandatory arbitration agreements, compared to a national average of 54 percent.
California’s employers’ embrace of arbitration agreements has long been viewed as a reaction to the state’s robust employee protections. But the EPI study points out that Texas, which is generally considered more generous to employers, has essentially the same proportion of workplaces covered by mandatory arbitration agreements.
The study, by Alexander Colvin, a Cornell University professor of Labor Relations and Conflict Resolution, reported on another growing trend among employers — requiring workers to give up their right to file class action lawsuits. Colvin found that 25 million workers who signed arbitration agreements as a condition of employment also waived their right to join together in a lawsuit.
That’s a right that labor lawyers say cannot be signed away. This spring, the Supreme Court will decide National Labor Relations Board v. Murphy Oil USA, Inc., a case that determines whether these so-called class action waivers are a violation of the National Labor Relations Act.
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Why a Pioneering Green Energy Investor is Optimistic About the Future of the Planet
Daniel Weiss, managing partner of Angeleno Group, describes on the latest episode of “The Bottom Line” podcast how clean energy has moved from the realm of politics and policy to that of the markets and economics.
When Daniel Weiss co-founded Angeleno Group in 2001 to fund green energy companies, few would have regarded him as a master of timing.
Oil was trading at a lowly $23 per barrel. The California electricity crisis had recently triggered large-scale blackouts across the state. Enron had just gone belly-up.
“To launch an investment firm and raise capital to invest in this space . . . maybe we ought to have had our heads examined, ” Weiss, one of Angeleno Group’s two managing partners, told me on the latest episode of my podcast, The Bottom Line.
Seventeen years and $2.5 billion worth of investments later, Weiss and his colleagues have proven that they were lot more savvy than silly.
Along the way, they’ve kept their eyes on four fundamental drivers: an urgent need to replace an aging and inadequate power infrastructure in the United States and elsewhere; the steadily increasing demand for fuel and electricity as ever more of the world’s population enters the middle class and becomes urbanized; a push by different nations to secure their own energy independence; and the rise of global warming and other environmental issues as a major social concern.
“You add those four things up,” Weiss notes, “and we thought, ‘These are not 10-, 20-, 30-month trends. These are 20-, 30-, 40-year trends. And they’re going to create massive investment opportunities.’”
Plus, Weiss adds, the field was pretty wide open back then. “Not a lot of folks were focused on the next generation of energy,” he says.
At least not in the private sector. Two decades ago, most of those paying close attention to our biggest energy and environmental problems — and how we might overcome them—were public officials, nonprofit leaders, and scholars.
Not any longer, however. “We really are shifting,” Weiss says, “from a world in which adoption of some of these technologies is driven by politics and policy to a world . . . being driven by markets and economics.”
Actually, among Angeleno Group’s greatest strengths is its ability to draw on the assistance of those who have deep experience in both arenas—corporate and government. The firm’s advisory board includes John Browne, the former chief executive of British oil giant BP; Ernest Moniz, who served as Energy Secretary under President Obama; Bennett Johnson, the long-time senator from Louisiana who chaired the Energy and Natural Resources Committee; and nine others with similarly golden credentials.
Motivating these heavy-hitters — who take a very active role in helping Angeleno Group and its portfolio companies — is the belief “that this $6 trillion vertical of the global economy is an important one,” Weiss says, and that “technology, science, and entrepreneurship in this sector can make a really positive difference.”
Despite the ongoing threat of climate change and a number of backward steps on the environment made by President Trump and his administration, Weiss thinks so too. He points out that the companies Angeleno Group has invested in — a range of enterprises offering products and services in wind and solar, clean transportation, energy efficiency, and more — have had the effect in terms of reduced carbon of taking the equivalent of 50 million cars off the road per year.
But there’s another metric that hits even closer to home. In 1977, when Weiss was growing up in Los Angeles, there were more than 120 Stage 1 smog alerts. “You couldn’t go out and play on the blacktop” because the air was so nasty, he recalls. But now, “in my kids’ experience in elementary school . . . in Los Angeles there were zero Stage 1 smog alerts” — even though there’s far more traffic on the road.
What made things better, says Weiss, was a steady progression in which politics and policy helped to drive the adoption of new technology (in that case, the catalytic converter) until, eventually, market forces took over and spurred truly widespread change.
“I’m optimistic,” he says, “because of that track record and history that we have of innovating our way against some of these challenges.”
You can listen to my entire interview with Weiss here, along with Marty Goldensohn reporting on Coca-Cola’s “World Without Waste” sustainable packaging campaign, and Rachel Schneider pondering whether the United States can ever have lasting full employment.
Battery Blood: California Has Worse Lead Standards Than Arkansas and Texas. Why?
Battery recycling is considered one of the most potentially hazardous industries. Yet Vernon’s Exide workers were routinely being poisoned with nearly nonexistent intervention by Cal/OSHA.
How could California, the model state when it comes to tough environmental regulations, have failed to assess lead-contamination dangers at a battery-recycling facility?
In the summer of 2008, California’s Department of Occupational Safety and Health (Cal/OSHA) inspected Exide Technologies’ vehicle-battery recycling plant in Vernon, California, an industrial suburb of Los Angeles. The ensuing laboratory analysis of air from the plant’s smelter room, where batteries are melted down to reclaim their lead, revealed that levels of the neurotoxin exceeded federal standards by a factor of 13. Despite the toxic air, Cal/OSHA found no serious violations at Exide, issuing only a token fine of $150 for what it deemed a low-level violation.
Asked today about that inspection, Cal/OSHA spokesperson Erika Monterroza told Capital & Main that it was “handled appropriately,” adding that the high level of lead that smelter-room workers were exposed to would only have been excused if other safety measures, such as “protective clothing, onsite showers, clean change rooms, proper housekeeping, clean lunchrooms, medical surveillance, effective training and implementation of engineering and administration controls” were deemed effective in reducing “exposures to as low as feasible.” However, there is little to no evidence that Cal/OSHA’s 2008 inspection included the measures Monterroza cited.
How could California, perceived by many as the model state when it comes to tough environmental regulations, have fallen so short when it came to assessing lead-contamination dangers at the Vernon battery-recycling facility?
Part of the answer stems from how the Occupational Safety and Health Administration (OSHA) works in the Golden State. In 29 states, workers at private companies such as Exide are are protected by federal OSHA, which is administered by the U.S. Department of Labor. In the remaining 21 states, including California, state-run OSHA programs protect workers employed by private industry. Even so, according to Monterroza, “Cal/OSHA’s program is required to be, and is, at least as effective as federal OSHA.”
In California, communication about workers with high levels of lead in their blood was nearly nonexistent between Cal/OSHA and the Department of Public Health.
But our investigation found that when it comes to protecting workers from lead, California operates in a different universe from states with federal OSHA oversight. While workers were routinely being poisoned in Vernon, with nearly nonexistent intervention by Cal/OSHA, battery-recycling plants in federal OSHA states were facing inspections so robust they amounted to an existential threat to the plants. The message to these lead polluters seemed simple: Either clean up your act or be fined out of business. A case in point: The same summer as Cal/OSHA’s 2008 Vernon inspection, another Exide battery-recycling plant, in Fort Smith, Arkansas, was hit with $71,000 in fines for having high levels of lead in its smelting department, and for other serious violations, including poorly fitted respirators. All told, inspectors found 22 “serious violations” at the Arkansas plant. A serious violation, an OSHA press release about the Fort Smith citations noted, is “one in which the hazard could cause death or serious physical harm to employees, and the employer knew or should have known about it.”
And after a 2012 inspection of a Johnson Controls battery plant in Ohio, federal OSHA issued 20 citations for “serious”and “willful” health violations, and issued $188,600 in fines. At yet another Exide facility, in Frisco, Texas, OSHA fined the plant $77,000 in 2011. That same year, Exide reached an agreement with Texas officials to pay $20 million for improvements to its engineering systems at the Frisco plant to cut down on lead emissions.
In Vernon, Cal/OSHA required no engineering changes that would impact levels of lead in the plant.
“OSHA is supposed to have workers’ backs,” said Rania Sabty-Daily, an expert in industrial hygiene and an assistant professor at California State University, Northridge. Sabty-Daily said Cal/OSHA completely failed to take into account a fundamental fact in its 2008 Exide inspection.
“The records you dug up showed that lots of workers were being exposed to lead at levels high enough that their health was being compromised,” she said. “That should have led inspectors to seek out the safety problems causing the health problems. Any occupational hygienist knows that a real-world factory is imperfect — we can’t just rely on respirators, which are often not fitted properly. And there are other avenues for exposure. What happens when the worker takes off their boots? Are the shower facilities adequate?”
Making workplaces safer became a central OSHA focus in 2001, when the agency launched the National Emphasis Program on lead. This ambitious initiative sought to eliminate the conditions that had caused lead-related health issues in workers. The lead-reduction program was reinforced with even more stringent standards in 2008.
The directive legally mandates that when workers are found to have blood-lead levels above those considered by the U.S. Centers for Disease Control and Prevention (CDC) to represent a serious health risk (25 micrograms per deciliter or above), those cases “shall be considered high-gravity, serious and must be handled by inspection.” And it wasn’t just the 29 federal OSHA states that adopted the tough inspection standards. Nine states that have their own OSHA programs, including Indiana, Oregon and North Carolina, chose to adopt the same federal standards. For unexplained reasons, California did not adopt lead standards required by 38 other states.
Elsewhere, others saw a profound improvement. “Without question it’s an absolutely essential program that I saw make a difference when it came to protecting workers from being exposed to lead,” Clyde Payne, who retired in 2014 as the area director of U.S. OSHA’s Jackson, Mississippi office, told Capital & Main
“People were getting lead-poisoned in just a few months on the job. That tells you a lot about what conditions were like inside [Exide].”
While OSHA’s national directive remains largely intact today, President Donald Trump has made good on his promise to scale back all government regulations; OSHA’s current leadership has chipped away at the get-tough approach of the lead directive, changing its language to make some elements of the rules optional rather than mandatory.
Coordination with State Public Health Departments
Battery recycling is considered one of the most potentially hazardous industries for workers. Consequently, plants are almost always required to test workers’ blood for lead at least a couple of times per year. Most states’ departments of health — including California’s — are legally required to maintain those blood-lead results in what are called “blood-lead registries.”
A key component of the 2001 National Emphasis Program on lead is coordination with the custodians of blood-lead registries, the states’ individual public health departments. Scott Allen, a spokesperson for federal OSHA’s regional office in Illinois, underscored the importance of communication with state health departments. “Related to blood-lead levels, these medical referrals often come from health departments, medical providers or hospitals,” Allen stated in an email.
Workers Became Lead-Poisoned at Exide in a Matter of Months
Our investigation found that in California, communication about workers with high levels of lead in their blood was nearly nonexistent between Cal/OSHA and CDPH, the two agencies responsible for keeping workers safe from lead hazards. Between 1994 and 2014, CDPH tracked over 2,300 cases of workers with blood-lead levels at or above 25 micrograms per deciliter at Exide’s Vernon plant; yet CDPH referred the Vernon plant for an inspection to Cal/OSHA just once, in 1996.
Along the way, there were health experts who saw warning signs.
The Oakland-based Center for Environmental Health (CEH), which was concerned about airborne lead spreading from smokestacks at the Vernon plant to surrounding L.A. neighborhoods like Boyle Heights, filed a 2008 lawsuit to force the state to warn residents about lead that was known to be escaping the plant. “We also wanted to know what was going on inside the plant,” Caroline Cox, a CEH staff scientist, told Capital & Main. To figure that out, the nonprofit asked CDPH in 2009 for a year’s worth of blood-lead tests of Exide’s Vernon employees.
CDPH provided Cox with this data for more than 152 workers. Most employees had several tests per year. “What I was most struck by were results from workers who clearly were brand-new employees,” Cox said. “These people started out like an average person — whose blood-lead level is around two micrograms per deciliter. After a few months on the job, [I saw that] in some cases these readings shot up to alarming levels. Essentially, people were getting lead-poisoned in just a few months on the job. That tells you a lot about what conditions were like inside, and you just worried that the workers perhaps had no idea what they were getting into.”
An Obscure Department Failed To Sound the Alarm
The Occupational Lead Poisoning Prevention Program (OLPPP) is a department within CDPH that tracks blood-lead levels and offers advice and expertise to companies to reduce lead-based health risks.
“You have an organization receiving data about spikes in blood-lead levels. That should spur some sort of action. If that didn’t happen, why?”
Our investigation found that between 1994 and 1996, OLPPP managers were very concerned about the Vernon plant’s lead problem. For example, in 1995, OLPPP determined that, at what was then called GNB Technologies, “compliance plan and medical surveillance plan are seriously deficient; written respiratory protection program is confusing and inconsistent; GNB has no protocol for systematically reviewing BLL [blood-lead levels].” In 1996, OLPPP referred the case to Cal/OSHA for inspection.
That 1996 referral inspection appears to be the last time the two agencies teamed up to limit worker exposure to lead at the Vernon site. CDPH remained aware of lead-exposed workers, yet appears not to have communicated concern or crucial data with the one agency that could levy fines or shut down the plant if it were deemed to be too hazardous.
Mariano Kramer, a former Cal/OSHA district manager who was in charge of the 1996 inspection, said he was troubled to learn that CDPH did not continue to refer information about lead-poisoned workers to Cal/OSHA. “What concerns me is that you have an organization [CDPH] receiving data about spikes in blood-lead levels. That should spur some sort of action or reporting. If that didn’t happen, I’m wondering, Why? What’s the point of medical surveillance if you don’t use it?”
CDPH declined repeated requests for interviews and declined to answer specific questions by email for this story.
After being provided with documents obtained by Capital & Main and the University of Southern California’s Center for Health Journalism program, Assemblyman Ash Kalra (D-San Jose) wants to change the system that California has been operating under, to make it correspond to the federal lead directive. Last month, based on our research, Kalra introduced Assembly Bill 2963, which would require the “State Department of Public Health to report to the Division of Occupational Safety and Health any instance where a worker’s blood-lead level is at or above a certain amount.”
Joe Rubin wrote this story while participating in the California Data Fellowship, a program of USC’s Center for Health Journalism.
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Battery Blood: How California Health Agencies Failed Exide Workers
California’s Department of Public Health and Cal/OSHA didn’t protect workers from lead contamination at a battery recycling plant. A state Assembly member will hold hearings for a worker-protection bill based on our investigation.
Even as health agencies in other states issued six-figure fines and ordered multimillion-dollar safety improvements of battery recycling plants, California’s enforcement was strangely anemic.
For nearly a century a hulking industrial plant near downtown Los Angeles melted down car batteries to reclaim their lead. The facility, most recently owned by Exide Technologies, was shut down in 2015 in a deal the company made with the U.S. Justice Department to avoid criminal prosecution for polluting nearby residential communities. Neighborhood activists have criticized California’s Department of Toxic Substances, which allowed Exide to continue operating for years with a temporary permit, despite evidence it was a major polluter. But a year-long investigation by Capital & Main and the University of Southern California’s Center for Health Journalism has found that two other agencies, the California Department of Public Health (CDPH) and the Division of Occupational Safety and Health (Cal/OSHA), failed to take action during a simmering public health crisis involving hundreds of lead-poisoned workers at the plant.
Between 1987 and 2014, according to records we obtained from CDPH, California health officials were aware of more than 2,300 blood tests from the plant’s workers revealing blood-lead levels above 25 micrograms per deciliter — high enough to cause miscarriages, tremors, mood disorders and heart disease. While CDPH lacks the power to levy fines or mandate changes, it may refer cases to Cal/OSHA, which has that authority. But except for one fleeting moment in 1996, the agencies have operated in virtual silos, failing to coordinate actions or share incontrovertible evidence that the facility was a potential death trap.
“It’s distressing to know that Exide workers were exposed at that level and chronically,” said Dr. Bruce Lanphear, a physician and leading lead researcher with Simon Fraser University in Vancouver, Canada. “We’ve known for decades that lead at those levels can lead to hypertension and chronic renal failure [kidney disease]. California regulators were aware of this information and should have better protected these workers.”
In contrast to the anemic enforcement by California officials, regulators in much of the rest of the nation have, thanks to a strict federal lead directive issued in 2001, cracked down on perilous battery recycling plants — issuing six-figure fines and requiring multimillion-dollar safety improvements. Although the federal lead directive is legally binding in states where workers are directly protected by federal OSHA and eight other state-run programs that adopted these standards, California, the nation’s most populous state, never embraced them.
Exide appealed a $280 Cal/OSHA fine. It was ultimately reduced to $150 — less than the cost of a speeding ticket.
Despite California’s seemingly lower standards, Cal/OSHA told Capital & Main that “Cal/OSHA’s program is required to be, and is, at least as effective as federal OSHA.” However, despite hundreds of workers who developed lead poisoning at the plant, the only fine specifically related to lead that we found issued by Cal/OSHA at the site, which recycled about 25,000 lead-acid car batteries a day, was a 2008 citation for $150 — less than the cost of a speeding ticket.
The lead problem at the Vernon plant, which was acquired by Exide in 2000, goes back a long time. In the 1970s Jim Dahlgren, today a retired physician, treated 120 severely lead-poisoned workers from the plant, then owned by National Lead, and helped qualify them for disability insurance. Dahlgren, who worked for the University of California, Los Angeles, at the time, claimed that nearly all of those men died prematurely from complications due to lead exposure and that several patients fell into lead-induced comas. Dahlgren said his patients’ blood levels routinely measured above 100 micrograms per deciliter (μg/dL), a potentially lethal level. “Every single organ system of the body is impacted adversely by lead,” Dahlgren said. “These men had symptoms that ran the spectrum — severe abdominal pain, vomiting, diarrhea, palpitations, chest pains, trouble thinking, headaches.”
Dahlgren’s account was echoed in a 1973 Los Angeles Times article headlined “Plant Fumes Poisoning Plant Workers, Union Chiefs Say,” and an obscure 1976 documentary, Lead Smelter, which interviewed Dahlgren, along with gaunt, bedridden workers and their families.
Luis Rodriguez, a poet and writer who achieved fame with his memoir about escaping gang life, “Always Running, La Vida Loca, Gang Days in L.A.,” spent six months in 1978 working in the Vernon plant as a smelter. The plant’s huge furnaces melted down car batteries and separated out the lead into what is called slag.
“After you use the furnace, all the lead would fall to the bottom and there was a hole in the back called a slag hole,” Rodriguez said. “I had to use a jackhammer to hammer it open, and pull the slag out and put it into carts. A good friend of mine said, ‘You know you got to get out of there. Lead will kill you and your family.’ That woke me up, might have saved my life.”
California Department of Public Health warnings about the Vernon plant, which Exide Technologies purchased in 2000, took on the look of an annual form letter.
The CDPH declined interview requests or to answer specific questions by email, and instead issued a statement that read in part, “CDPH takes seriously any incidents that may affect the public health of the people in California,” adding that “there are always lessons to be learned, especially in the case of long-running complex community public health issues.”
Exide’s lead-poisoning problem, however, was well known to state officials. Because battery recycling involves potentially lethal exposure to lead, the company was required to test workers’ blood several times per year and to report the results to the CDPH. (Exide did not respond to emails and phone messages requesting comment.)
Despite the fact that CDPH was aware of more than 2,300 concerning blood lead tests among workers at the Vernon site, our investigation found that CDPH referred the company to Cal/OSHA only a few times in the 1990s, and that between 1990 and 2013, inspections of the plant related to lead by Cal/OSHA occurred only in 1995, 1996 and 2008. Records we obtained show the 1995 inspection was triggered by a complaint to Cal/OSHA from a private physician who had treated a plant worker with symptoms of lead poisoning and alarming blood-lead levels. Cal/OSHA determined “no serious injuries or illnesses detected” and issued no fines. The company, according to the inspection report, also told Cal/OSHA that “engineering controls were not feasible at the plant.”
By then the plant had changed hands and was owned by GNB Technologies. Despite the new ownership, lead poisoning among workers was still a huge problem. Blood-lead testing tracked by CDPH showed that in 1995, 135 workers at the site that year had seriously elevated levels of lead in their blood, and 33 workers had blood-lead levels above 40 μg/dL.
The same year Cal/OSHA’s inspection report dismissed concerns about fundamental safety at the plant, CDPH was expressing extreme concern. In 1995 CDPH’s Occupational Lead Poisoning Prevention Program chief, Barbara Materna, wrote a letter to GNB’s regional director, David Wesley, noting that the Vernon workers had blood-lead levels high enough to cause “increased blood pressure, damaged sperm, and impaired learning ability in children exposed to lead during pregnancy.” CDPH also expressed grave concerns that airborne levels of lead found in parts of the plant were more than 50 times above federal safety standards.
By 1996 CDPH had had enough. “Our policy is to work cooperatively with those who are improving health and safety conditions in their workplace,” Materna wrote GNB. “However, if serious conditions are not addressed in a timely manner we are obligated to make referrals to Cal/OSHA for enforcement actions.”
Capital & Main spoke to Mariano Kramer, then a Los Angeles-area Cal/OSHA district manager, who CDPH sent the referral letter to. In 1996, after receiving a referral from CDPH, he supervised the only inspection we could find that appears to have had any teeth behind it.
Former Cal/OSHA Manager: “The agency is a battleground between those who see the prime directive as protecting workers and others who are fearful of hurting the bottom line of industry.”
Cal/OSHA told us it was unable to locate records related to the 1996 inspection. Kramer recalls the case vividly, however: “It was a very messy situation at the plant and a lengthy process. We required them to make substantial safety improvements.” The fines and required safety upgrades, which Kramer said were levied, seemed to make a difference at the plant. Lead poisoning cases dropped 25 percent the following year.
However, the monitoring of the Vernon plant, which Exide Technologies purchased in 2000, became less frequent and appears to have amounted to an annual form letter. In 2005 CDPH told Exide, “We recently received one or more reports of elevated blood-lead levels at or above 40 μg/dL for employees of Exide Technologies.” The letter continued, “Elevated BLLs indicate serious problems with your lead safety program that should be corrected. They may also indicate violations of the Cal/OSHA Lead Standard.”
By then, according to records provided to Capital & Main by CDPH, about 40 workers per year continued to show alarming levels of lead in their blood. It wasn’t until 2008 that Cal/OSHA performed a new lead-safety inspection at the site. The inspection stemmed from an anonymous complaint from an Exide worker, and the inspectors don’t appear to have been armed with any of the information collected by CDPH. When inspectors arrived at the sprawling Vernon plant, records show, they took just one swipe of a surface in search of evidence of lead dust. The sample was taken on a shelf next to a telephone — in an office that was designated a lead-free zone, where workers were supposed to be able to take breaks without wearing any protective equipment. While the shelf had lead levels far in excess of federal standards, Cal/OSHA fined Exide just $280 for the safety violation it labeled “low” in severity. Exide appealed the fine and the violation was ultimately reduced to $150.
Cal/OSHA appeared even less concerned with the toxic air to which workers were exposed in the plant’s smelting room. Alvin Richardson, a 20-year plant veteran, said he remembers Cal/OSHA coming to inspect the site in 2008 and affixing an air monitor to his clothing to measure the amount of lead that he and other workers were being exposed to. Richardson says he wasn’t told the results, even though he had become a canary in the coal mine.
Experts we spoke to, including Kramer, say the results from Richardson’s air monitor, which measured airborne lead more than 13 times above levels federal limits, could have required the evacuation of workers and at a minimum should have resulted in stiff penalties.
But when the results came back, Cal/OSHA may have employed some creative math. (See equation below.) Because Richardson was wearing a respirator mask, Cal/OSHA’s report reasoned its inspectors could divide the level of exposure by a factor of 50. (See formula below.) After the airborne lead levels were divided by 50, the inspection gave the smelting operation a clean bill of health, no fines were issued for the airborne lead, and the company was allowed to keep up its operation without making any engineering changes.
Cal/OSHA declined repeated requests for in-person interviews about its lead-related protocols or to comment on former workers who claim to be suffering today. In response to queries about the seemingly inadequate 2008 inspection, Cal/OSHA spokeswoman Erika Monterroza responded via email, “The division can only issue citations when it finds sufficient evidence of violations. The inspection was handled appropriately.”
But Clyde Payne, who for 23 years was the area director of U.S. OSHA’s Jackson, Mississippi, office, said that applying the equation employed by Cal/OSHA violated a fundamental OSHA principle. “The principle,” Payne said, “is you are not allowed to use the respirator to excuse toxic air. You have to implement other controls like ventilation and proper hygiene.”
Payne explained that the equation which Cal/OSHA employed is intended to be used to determine if employers are using proper respirators, or if they need to provide a better respirator. “Because we assume that workers are going to get exposed in other ways, you don’t utilize that type of division to excuse violations of the air standards.” Payne added, “There is no question it’s challenging for companies to get those levels of airborne lead down, but if you do not have somebody riding your rear end, you won’t try.”
Mariano Kramer retired in 2011 and today works as an instructor at the Dominguez Hills OSHA Training Center. After reviewing the report of the 2008 inspection of the plant, he said the levels of airborne lead that Alvin Richardson and other workers were exposed to were completely unacceptable. “One of the basic tenets of safety and health is the hierarchy of controls,” Kramer said. “You start with administrative and engineering, and the last thing that you do is personal protective equipment. Because with ventilators, you are doing nothing to correct the hazard. All you’re doing is putting a barrier to the hazard.”
First Amendment Project Lawyer: The Public Health Department “ends up being a shield for companies which expose the public and workers to toxins.”
A review of federal OSHA inspections carried out around the same time as Cal/OSHA’s 2008 inspection of Exide in Vernon does show that dramatically different standards were employed. For example, during their 2012 inspection of a Johnson Controls battery recycling plant in Ohio, OSHA inspectors affixed air monitors to workers just as they did with Richardson in California. The level of lead detected was one-third what Richardson and other Exide workers were exposed to. But because the OSHA inspectors did not employ the division formula utilized in California, they deemed the exposure levels as a “serious” violation of OSHA regulations. All told, OSHA issued to Johnson Controls Battery Group Inc. fines of $188,000, more than 1,200 times the $150 fine issued to Exide during Cal/OSHA’s 2008 inspection for violating lead standards.
Alvin Richardson told us that when he left the company in 2011 he suffered from what he believed to be lead-related symptoms, including exhaustion and tremors. After he departed his daily routine at Exide, Richardson hoped his symptoms would improve, but they worsened. Today the 53-year-old suffers from chronic weakness and kidney problems. “He can’t stand for very long,” Alvin’s wife LaShawn Richardson told us, adding that her husband had just received state disability status after a seven-year struggle.
Kramer believes that two long-running problems at Cal/OSHA likely contributed to an inadequate inspection in 2008. “The agency is kind of a political football, a battleground between those who see the prime directive as protecting workers and others who are fearful of hurting the bottom line of industry. Some staff also have a poor understanding of health-related safety issues like lead. The agency is better at recognizing a crane that might fall. When it comes to nearly invisible toxins like lead dust, that can be a problem.”
Rania Sabty-Daily, an expert in industrial hygiene and an assistant professor at California State University, Northridge, told Capital & Main that one of the stumbling blocks preventing better protection of California workers is long-delayed changes to the state’s lead standards. The standards formulated in the 1970s allow employees to continue working even with blood lead levels up to 50 μg/dL. Health experts consider those standards out of date because the U.S. Centers for Disease Control and other authorities say permanent damage can occur at levels as low as 10 μg/dL. In 2009 CDPH issued new recommendations and asked Cal/OSHA to call for removing workers with lead levels above 20 μg/dL and not returning them until they fall to below 15 μg/dL. In addition CDPH proposed that a more protective standard be applied to airborne lead.
Because CDPH can only make recommendations, CDPH petitioned Cal/OSHA in 2010 to adopt the new standards. In a statement, Cal/OSHA told us it agreed with the necessity to make some changes. “The existing lead standard is based on pre-1978 data and subsequent research has shown significant adverse effects at lower levels. The advisory committee met six times from 2011-2015 to draft a proposed industrial regulation that will lower the blood-lead removal level (BLL) and Permissible Exposure Limit (PEL). That process is ongoing.”
But the process to change California regulations appears to have bogged down. Cal/OSHA invited companies like Exide and other stakeholders to participate in advisory meetings over the new standards. During one advisory meeting in 2011, industry representatives, particularly from battery recycling companies, hammered the proposal. According to minutes from the sessions, Terry Campbell, an executive from U.S. Battery, said that one-fourth of the company’s Corona workers would have to be pulled from their jobs because of high blood-lead levels. Ultimately, the company said, it could be forced to close up shop and move to Mexico. Representatives from Exide echoed similar sentiments.
“It’s a totally dysfunctional system,” said Sabty-Daily. “We debate the toughest standards in the country — meanwhile, Cal/OSHA enforces what are among the weakest standards in the nation.”
There appears to be an even larger problem to fix. Our investigation found that workers protected by Cal/OSHA under the outdated standards continue to be harmed by unsafe lead conditions with little or no consequences.
In October we made a public records request asking CDPH for lists of workers who had lead levels at or above 20 μg/dL for the last 30 years. According to the data we received, the agency was aware of more than 26,000 blood tests from workers from more than 260 companies across the state. Workers were counted once per year at their highest level according to CDPH. We also learned that between 2010 and 2017, even as California’s regulatory agencies continued to debate toughening lead standards, CDPH was aware of an additional 2,256 blood tests at or above 20 μg/dL. Despite those alarming numbers, finding the locations of the workplaces that have had large numbers of lead poisoned workers is for the moment impossible.
Although CDPH previously provided year-by-year anonymous data for lead-poisoned workers at Exide, the agency turned down our request for information about where those other cases in the state were occurring. Citing a “constitutional right to privacy,” CDPH says it is concerned that providing anonymous details about the extent of the problem at specific companies could somehow lead to identifying the individual workers. When there is “a high risk of re-identification, statistical masking must be applied,” the agency said in a March 14 statement.
Dr. Bruce Lanphear, the lead-poisoning expert, also was troubled by the withholding of specific numbers for where the lead poisoning incidents were occurring. “That’s just hogwash. One of the basic functions of public health is to make clear the extent of the problem and where it’s occurring. You can’t protect the public if you’re not armed with the information.”
James Wheaton, senior counsel for the First Amendment Project and a media-law professor at the University of California, Berkeley, called the agency’s rationale for keeping the information secret “bogus” and said he believed the agency had violated California law with its refusal to disclose the information.
“CDPH unfortunately has a tendency to jealously guard information which is vital to the public,” Wheaton said. “The net result is the agency ends up being a shield for companies which expose the public and workers to toxins.”
While Exide closed in 2015, several battery recycling plants continue to operate in the greater Los Angeles area, and they appear to represent an ongoing problem when it comes to workers exposed to lead. While CDPH would not provide Capital & Main with information about where the most serious cases are occurring, in response to a public records request the agency did provide similar data to the Los Angeles Times in 2016 for worker exposures in Los Angeles County from 2008 to 2014.
The data, provided to Times reporter Tony Barboza, show that Quemetco, another Los Angeles-area recycling plant which, unlike Exide, is still up and running, had 254 workers with elevated blood-lead levels (at or above 10 g/dL) between 2008 and 2014. By comparison, Exide had 175 workers during that same time period with similarly elevated levels. Quemetco also appears to have another Exide-like problem. Soil samples taken from homes within a quarter-mile of the plant, according to data we obtained from the Department of Toxic Substances Control, also show that surface soil is on average four times above acceptable levels, suggesting a multimillion-dollar cleanup could be necessary.
Prior to publication of this article we shared data we had gathered with several lawmakers and Bill Allayaud, the California director of the Environmental Working Group, a science-based watchdog organization. Allayaud’s group has spearheaded several proposed lead laws in California. “We all know how the neighborhoods around Exide were polluted with toxic lead over the long term, and now we are finding out how workers on the frontlines were neglected by the agencies that are supposed to monitor and demand that hazardous conditions be eliminated,” Allayaud said. “This needs to be fixed so this never happens again.”
Allayaud collaborated with San Jose Assemblyman Ash Kalra, who introduced legislation sponsored by the Environmental Working Group that would require CDPH and Cal/OSHA to follow federal standards recognized in other states. Kalra’s measure, Assembly Bill 2963, would legally require the “State Department of Public Health to report to the Division of Occupational Safety and Health any instance where a worker’s blood-lead level is at or above a certain amount.”
In a statement to Capital & Main, Kalra said, “Lead poisoning is a serious matter and we need to consider the gravity of this hazard by ensuring that our state agencies are properly scrutinizing cases involving workers’ exposure to high levels of lead — this means that adequate inspections need to be carried out whenever there is evidence of serious lead-related exposure.”
Kalra plans to hold hearings in April for his worker-protection bill based on our investigations. He told Capital & Main that he would like to have Alvin Richardson and other workers testify to educate the public about what it’s like to experience lead poisoning.
“Alvin’s a proud man,” said Richardson’s wife, LaShawn. “Going through this has been a long, incredibly difficult struggle for our entire family.” She said she was speaking to us in the hope that future workers wouldn’t have to endure what her husband has.
Joe Rubin wrote this story while participating in the California Data Fellowship, a program of USC’s Center for Health Journalism.
Copyright Capital & Main
Why 24 Hour Fitness Is Going to the Mat Against Its Own Employees
Co-published by Fast Company
24 Hour Fitness’ policies have brought the fitness chain in the crosshairs of the National Labor Relations Board, which has said the company’s employee arbitration agreements violate federal labor law.
Relentless pressure to sign up new members made one man question the chain’s commitment to changing people’s lives.
Co-published by Fast Company
On its website, 24 Hour Fitness says it has thousands of job openings. That’s great news for fitness buffs hunting for work. Or is it?
Disgruntled former employees of the San Ramon, California-based company have filed hundreds of cases over almost two decades, some resulting in settlements in the millions of dollars.
And the large payouts appear to have made 24 Hour Fitness one of the nation’s more aggressive advocates for curtailing workers’ ability to defend their rights in court, labor lawyers say. That advocacy has also put the almost four-million-member-strong fitness chain in the crosshairs of the National Labor Relations Board, which has said the firm’s employee arbitration agreements violate federal labor law.
The company’s dispute with the NLRB may make it to the U.S. Supreme Court, which could hear oral arguments next term as to whether the contracts the firm asks workers to sign when they are hired violate historic worker protections put in place as part of New Deal legislation adopted in the 1930s. Those contracts ask employees to waive their right to come together to file class action lawsuits.
Attorney: “24 Hour Fitness has been pretty aggressive in stripping workers of their rights.”
Some workers say the company’s single-minded focus on selling memberships caused it to run afoul of wage and hour law.
“We worked basically 8 to 8 every day no matter what, and if you got a lunch break it was usually at the club, or you went out and came right back,” said Gabe Beauperthuy, a former general manager, who worked in fitness centers in Colorado before leaving the company in 2006.
At first, Beauperthuy said, he loved the work and embraced the company’s philosophy of personal transformation. But the long days and relentless pressure to sign up new members made him question the company’s commitment to changing people’s lives, and even his own priorities. He developed a single-minded focus on bringing in the “almighty dollar” for the company because, he explained, “you’re a product of your environment.”
“I’m thankful that I realized that, and I’m thankful that I’m no longer there,” said Beauperthuy, now a competitive amateur wrestler and coach.
24 Hour Fitness declined to comment for this story.
Beauperthuy was one of more than 900 managers, sales counselors and trainers to bring a collective action lawsuit under the Fair Labor Standards Act, alleging the company had misclassified them and denied them overtime pay. After the class was decertified and following seven years of litigation, the group settled for $17.5 million in 2013, according to published reports. The company settled another lawsuit involving thousands of California employees for $38 million, the nation’s sixth largest wage and hour class action settlement of 2006.
Those cases may have made 24 Hour Fitness more steadfast in defending their employee arbitration agreement that asks employees to waive their right to bring class action lawsuits in NLRB v. 24 Hour Fitness, which the U.S. Supreme Court may review next year, depending on the outcome of a related case. The fact that 24 Hour Fitness has an employee arbitration agreement with a “class action waiver” does not make it unusual. But the company has been especially aggressive in defending its arbitration agreement in the courts, labor advocates say.
“Historically, there have been a few companies who went out of their way to fight and defend arbitration,” says Cliff Palefsky, a San Francisco attorney who filed the unfair labor practice case resulting in the NLRB’s finding that 24 Hour Fitness had violated the law. “They’ve been pretty aggressive in stripping workers of their rights.”
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. These agreements require employees to resolve disputes through private arbitrators chosen by employers, rather than go through the courts.
An estimated 25 million of these arbitration agreements also include class action waivers, like those used by 24 Hour Fitness, in which employees give up their rights to band together to bring class action suits to address workplace disputes in the courts.
The contract language has received attention in recent months as the “Me Too” campaign has gained steam, and advocates pointed to the difficulty of raising workplace concerns individually in confidential arbitration proceedings that are crafted by the employer. Last year, U.S. Rep. Cheri Bustos (D-IL) introduced a bi-partisan bill that would prevent companies from keeping sexual harassment and sex discrimination claims from going to court, where the proceedings are typically in the public record.
A landmark case expected to be decided by the U.S. Supreme Court this term, National Labor Relations Board v. Murphy Oil USA, will determine whether class action waivers will be a continuing feature of employment contracts. It will also decide the fate of NLRB’s dispute with 24 Hour Fitness.
“If the NLRB loses Murphy Oil, then our case would suffer the same fate, essentially,” says Palefsky. In its Supreme Court brief, 24 Hour Fitness distinguishes its employment agreements from those at issue in the Murphy Oil case because the fitness employees are given 30 days to opt out of the class action ban.
But Palefsky counters that the rarely-used “opt out” provision is irrelevant because a worker’s right to act collectively is one that cannot be signed away.
The argument about class action waivers might seem an academic one to job seekers if 24 Hour Fitness is now complying with the law.
There have been 621 employment cases filed in the federal courts against 24 Hour Fitness since 2000. On a per-establishment basis, that’s more than eight times as many as have been filed against its competitor, Gold’s Gym, during the same time period, according to a Capital & Main review of federal court records.
The disproportionately large number of cases is likely linked to the battle that took place between 24 Hour Fitness and Beauperthuy’s attorney, Richard Donahoo, who continued to fight for his 900 or so clients even after a federal judge in San Francisco granted a 24 Hour Fitness motion in 2011 to decertify the class. (The judge’s ruling that the plaintiffs’ claims were not sufficiently similar prevented the case from moving forward as a collective action—not the class action decertification language–but the effect was similar.)
“Many times that means it’s the death of the case because people don’t want to proceed individually,” said Donahoo, who is based in Orange County. “Attorneys can’t do it economically.”
Nevertheless, Donahoo and his colleagues decided to “swallow hard” and fight for each plaintiff individually. They filed hundreds of individual petitions in federal court to compel the company to arbitrate claims in Northern California, where 24 Hour Fitness is headquartered, and successfully fended off 24 Hour Fitness’s efforts in 21 federal courts across the country to force the arbitration proceedings to take place near the clubs where each of the former employees had worked.
“Our case became a ‘careful what you wish for’ scenario for the company,” Donahoo said. The company ultimately agreed to a settlement that resolved the individual claims at once.
Since then, 24 Hour Fitness has changed ownership. AEA Investors LP, a New York-based private equity firm, Fitness Capital Partners of Palm Beach, Florida, and the Toronto-based Ontario Teachers’ Pension Plan purchased the firm in 2014 in a leveraged buyout. But reasons remain to be concerned about the practice of the fitness company, which employs about 20,000 workers and operates in a highly competitive industry.
In November, the company agreed to pay restitution and settled a lawsuit for $1.3 million filed by Orange County prosecutors, stemming from allegations the company increased annual renewal rates on prepaid memberships beginning in 2015 in violation of its contracts with customers. Customers were sold prepaid memberships and charged upfront fees with the guarantee of a low life-time renewal rate in 2006 but saw their rates rise as much as 300 percent nine years later, according to the Orange County Register. The company admitted no wrongdoing in the settlement agreement.
Last May, the ratings agency Moody’s changed 24 Hour Fitness’ investment outlook from “stable” to “negative.” In justifying the downgrade, the report pointed to the growing number of fitness centers and the fact that the company is highly leveraged. The purchase of the company in 2014 was financed with $1.35 billion in debt, about 75 percent of the total cost, according to the Moody’s report.
Moody’s also singled out rising labor costs due to increases in the minimum wage in many of the regions where 24 Hour Fitness operates, suggesting the company employs a large number of low wage workers. Most of the clubs are concentrated in three states — California, Texas and Colorado.
“The company should be able to offset some of the pressure from minimum wage increases by using labor optimization, and reallocating the labor force within clubs based upon their age and member profile,” according to Moody’s report.
The economic pressures 24 Hour Fitness faces may explain the experience of one Ms. Randle, a former Kids’ Club attendant, who asked that her first name not be used. She worked at a 24 Hour Fitness in Orange County from 2014 to 2016.
She said managers told her not to leave her post to take a break or use the rest room during her four-hour shift because the other staff on duty lacked the necessary clearance to work with children. She complained to managers and eventually to the human resources department, but had to file a complaint with the California Labor Commissioner’s Office to resolve the issue and secure back pay for missed rest breaks, she said.
Ms. Randle thought that one of her co-workers endured repeated urinary tract infections that could have been caused by not being able to take bathroom breaks. Randle felt the managers lacked proper training. “They were always focused on selling memberships,” she said. “They didn’t care too much about their employees.”
Roxane Auer provided additional research for this story.
Copyright Capital & Main
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