Democrats Need Pelosi to Promote Progressive Policies as House Speaker [feedly]

Democrats Need Pelosi to Promote Progressive Policies as House Speaker
http://cepr.net/publications/op-eds-columns/democrats-need-pelosi-to-promote-progressive-policies-as-house-speaker

Dean Baker
Newsday, November 14, 2018

Tribune News Service, November 14, 2018

See article on original site

Since the election, many Democrats have been debating whether Nancy Pelosi should serve another term as speaker.

With no obvious second choice candidate, this is the wrong debate to be having. The better debate is over the policies that the Democrats will pursue with their new majority in the House.

First, people should recognize Pelosi's skills in maneuvering among her colleagues to get key legislation passed. With our decentralized political system, Pelosi has relatively little ability to force recalcitrant members to support legislation.

Nonetheless, when the Democrats last held a majority she was able to push through the Affordable Care Act, the Stimulus Package and the Dodd-Frank financial reform bill.

She also got the House to support legislation on global warming, which would have imposed a cost on carbon emissions. This died in the Senate.

None of these bills were dream legislation from a progressive standpoint, but all represented serious progress. It's not clear that another speaker would have been able to get them through the House.

Being elected speaker is not a reward for past performance. It is necessary to ask whether she is the best person going forward to be the face of the Democrats in Congress.

While age is a factor - she will be turning 79 shortly after taking the job - Pelosi seems to be in good health and as sharp mentally as ever.

More important is that she be prepared to promote positions that fit the times, and this means using her role as speaker to push a progressive agenda.

The Democratic caucus and the country have moved considerably to the left since Pelosi's last term as speaker. The conservative "Blue Dogs," who were mostly from the South and border states, are almost all gone. In their place, the Democrats have dynamic young progressives like Alexandria Ocasio-Cortez and Rashida Tlaib.

These newcomers have pushed policies like Medicare for All, free college, and a $15 an hour minimum wage.

Obviously, these sorts of proposals have no chance of becoming law with Republicans firmly in control of the Senate and Donald Trump in the White House, but the next two years can be a period in which the Democrats use their control of the House to build momentum on such issues.

This can mean, for example, holding hearings on Medicare for All. Such hearings would call attention to the proposal and lay out more explicitly what the program would be and what a transition would look like.

That should make it harder for Donald Trump and other Republicans to say that extending Medicare to everyone would somehow destroy the Medicare program that seniors depend upon.

The same story would apply to numerous other items on the progressive agenda. The right has long tried to scare the public away from progressive positions by lying about what they mean. As speaker, Pelosi can use truth to undercut these lies.

In addition to promoting a progressive agenda, the Democrats have to restore the House's oversight responsibilities.

The Trump administration has already won the gold medal for corruption as top officials, starting with Trump himself, openly engage in practices that involve blatant conflicts of interests.

When the Republicans controlled Congress they basically gave a green-light to all manner of corruption, since they were mostly concerned about giving rich people tax cuts and getting far right-wingers on the Supreme Court.

The Democrats must seriously investigate issues like whether the IRS is giving favored tax treatment to hedge fund billionaire and big Republican donor Robert Mercer.

And we need to know how much the Trump family is profiting from deals with Saudi Arabia and other Trump allies.

Most of all, we need a speaker who will take the lead in pushing a progressive agenda.

We absolutely do not need the Nancy Pelosi who said the Democrats are committed to "pay-as-you-go" or paygo deficit reduction rules. This is not a good path forward at this point for either policy or politics.

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China Is About to Shake Up the World of Electric Cars [feedly]

China Is About to Shake Up the World of Electric Cars
https://www.bloomberg.com/news/articles/2018-11-14/china-is-about-to-shake-up-the-world-of-electric-cars-quicktake

China is set to unleash a seismic shakeup of the automotive industry when it introduces stringent rules to promote new-energy vehicles. From 2019, major manufacturers will be punished unless they meet quotas for zero- and low-emission cars or they buy credits from other companies that exceed the quotas. The so-called cap-and-trade system is designed to spur the market for electric cars at the expense of gas guzzlers, all part of China's quest to clean its air and reduce dependence on imported oil. Another major driver: Helping develop a homegrown electric-vehicle industry.

1. How is China's electric vehicle push going?

China is not only the biggest global car market but the world leader in electric cars, with sales seen topping 1 million this year for the first time. Since the first models hit the streets more than a decade ago, the country has overtaken other markets partly through its sheer size and partly by luring consumers with subsidies and tax breaks. Nonetheless, electric vehicles account for just 3 percent of sales, leaving ample room for growth. Having previously focused on stimulating demand, the government is changing lanes and shifting policy toward propelling supply.

Gearing Up for Cleaner Cars

China leads the charge as electric-vehicle sales seen surging globally

Source: Bloomberg New Energy Finance (forecasts from 2018)

2. What are the new rules?

Complicated. Automakers that produce more than 30,000 vehicles will have to obtain a new-energy vehicle (NEV) credit of at least 10 percent in 2019, rising to 12 percent in 2020. To confuse matters, a score of 10 percent doesn't mean that a full one-tenth of a company's vehicles must be new-energy varieties (battery-powered electric vehicles, plug-in gasoline-electric hybrid vehicles or fuel-cell vehicles). In fact, the total will probably be lower.

3. Why lower?

Because vehicles are awarded credit scores depending on their green credentials, such as how far they go without needing a charge. The least eco-friendly NEV will receive a credit score of two, while the greenest will get a maximum credit of six. So, to meet the 2019 credit target of 10 percent, a carmaker producing 100,000 gasoline-based vehicles would need 10,000 credits. Those could be earned by manufacturing 2,000 cars with an NEV score each of five. If the automaker produced more than 2,000, it could sell the extra credits; fewer than 2,000, and it would need to buy credits. If it failed to top up its credits, the company would face sanctions, such as new models not being approved or production halts for gasoline cars. The government is also introducing new fuel consumption guidelines in 2019. Carmakers that do not comply will be able to use the credit system to address any shortfall.

4. What impact will the quotas have?

It's a milestone policy, says the International Council on Clean Transportation. "Since China is the world's largest auto market, this NEV mandate policy will undoubtedly speed up the global transition to a zero-emission fleet, which will be vital for the climate and for urban air quality," the non-profit group said. According to Bloomberg NEF, the 12 percent target for 2020 would translate to about 4 percent to 5 percent of actual car sales, based on the current average NEV score of 3 per vehicle. China hasn't announced targets beyond 2020.

5. How are credits calculated?

To qualify for a credit, a battery-electric vehicle needs a range of at least 100 kilometers (62 miles) on one charge and a top speed of at least 100 kilometers per hour. A plug-in hybrid vehicle needs an electric range of at least 50 kilometers. The NEV credit score is calculated in two stages: First, a formula is applied (0.012 multiplied by the range + 0.8) to get a base score. (For a 300km range, the score is 4.4.) Second, that figure is multiplied by a so-called adjustment factor -- ranging from 0.5 to 1.2 -- derived from the vehicle's energy consumption and weight, yielding a maximum total of six.

6. How does the credit-trading system work?

Companies that fail to meet the 10 percent mark next year will need to purchase credits from competitors or face the aforementioned penalties. Trading of the credits will take place on a platform set up by the industry regulator, with pricing negotiated by the companies themselves and determined through supply and demand.

7. Who are the winners and losers?

Companies that have a head start on producing NEVs have the highest credit scores. Those include BYD Co., BAIC BluePark New Energy Technology Co. and Geely Automobile Holdings Ltd., according to the Ministry of Industry and Information Technology. The highest negative fuel consumption credits were Ford Motor Co.'s China venture with Chongqing Changan Automobile Co., leading SUV maker Great Wall Motor Co. and Dongfeng Motor Corp. Most global brands, such as Toyota, Volkswagen and General Motors, were somewhere in between. Though their volumes are still small, upscale electric-car makers Tesla Inc. and NIO Inc. are eventually set to obtain high scores.

China's Automakers Better Prepared

The sheer size of the global giants slows their transition to electric vehicles

Source: Bloomberg New Energy Finance's EV Exposure Index, which rates carmakers by their readiness for electric vehicles

8. What are carmakers doing to prepare?

Auto companies that focus on NEVs need do nothing different. But almost all global brands that have traditionally relied on gasoline remain far away from China's requirements and have started to accelerate the introduction and production of electric models. Some have also struck pacts with local partners that have NEV expertise; Ford has tied up with Zotye Automobile Co. and BMW agreed to work with Great Wall in producing electric Minis. Toyota, Honda, Mitsubishi and Fiat Chrysler are planning to sell what's essentially the same electric SUV, developed by local partner Guangzhou Automobile Group Co.

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By banning mandatory arbitration clauses and class and collective action waivers, Congress could restore a fundamental workers right [feedly]

By banning mandatory arbitration clauses and class and collective action waivers, Congress could restore a fundamental workers right
https://www.epi.org/blog/by-banning-mandatory-arbitration-clauses-and-class-and-collective-action-waivers-congress-could-restore-a-fundamental-workers-right/

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Beyond the Caravan: Why We Must Protect Workers Covered by TPS [feedly]

Beyond the Caravan: Why We Must Protect Workers Covered by TPS
https://workingclassstudies.wordpress.com/2018/11/12/beyond-the-caravan-why-we-must-protect-workers-covered-by-tps/

In recent weeks, President Trump has been warning of an "invasion" of a caravan of 3,000 Central Americans, mostly from Honduras, heading north towards the Mexico-U.S. border. In October, these immigrants set out on a journey of more than 2500 miles to seek asylum in the United States, fleeing violence, corruption, and poverty in their home countries.  In response to thousands of families, including babies and elders,  our government has deployed more than 5000 soldiers to the border in anticipation of their arrival.

All this attention on the border means that many have forgotten what is happening to immigrants who are already here, including more than 320,000 people who are threatened by the ending of Temporary Protected Status(TPS).  Congress created TPS as part of  the Immigration Act of 1990 to provide temporary immigration relief for members of countries facing ongoing armed conflict, natural disasters, or other extraordinary and temporary conditions. TPS allows beneficiaries to receive temporary relief from deportation, an Employment Authorization Document, and the possibility to travel abroad. TPS applies to people from 10 countries, including El Salvador, Haiti, Honduras, Nepal, Nicaragua, Somalia, South Sudan, Sudan, Syria, and Yemen. Nearly three decades later, many TPS recipients have been living in the United States for many years, but they still do not have a pathway to legal permanent resident status. Some TPS recipients, like those from El Salvador, have been renewing their status for more than 15 years.

TPS recipients are not just immigrants, they are also an important part of the U.S. workforce. The Center for Migration Studies reports that 81% to 88% of TPS recipients are working, predominately in construction, restaurants and other food industries, landscaping services, child day care services, and grocery stores. They are part of the American working class and an essential part of many local communities. Despite their economic contributions, Congress has not take any action to extend TPS or to provide recipients the opportunity to become permanent residents or citizen.

For the Trump administration, the solution is to end the TPS for citizens from the Caribbean and Central American countries that have suffered natural disasters or state sponsored terrorism. In May 2018, Homeland Security Secretary Kirstjen Nielsen determined that the impact of natural disasters or political violence had lessened enough in some countries to warrant the suspension of TPS for their citizens. About 2500 Nicaraguans and 45,000 Haitians were ordered to leave by January and July 2019 respectively. In January 2018, the Trump administration cancelled protection for 200,000 Salvadorans, notifying them to depart by September 2019.

But some TPS recipients are facing deportation even sooner. For immigrants from Sudan, TPS was originally set to end November 2, but a court ruling focused on whether the end of TPS reflects racial bias on the part of the Trump administration ordered the program to remain in place for TPS recipients of Sudan, El Salvador, Haiti and Nicaragua until April 2,  2019. Once that extension expires, the President will  have the authority to terminate TPS based on the arbitrary recommendation of the State Department. If Trump continues to insist on ending TPS, hundreds of thousands of people will be required to return to countries they left years ago or face deportation.

Ending TPS will not only affect these immigrants, it will also have a devastating impact on the U.S. Most TPS recipients have been in the U.S. for many years. They have learned English, paid taxes, bought homes, made a life here. According to a report from the Center for American Progress, "A recent survey of Salvadoran and Honduran TPS holders demonstrates that they are active community members, with 29.7 percent of respondents reporting participation in a variety of organizations, including neighborhood and work associations, schools, and sports teams."

Here in DC, we have an especially large community of TPS recipients from El Salvador – about  32,000 people. According to the Executive Director of the Central American Resource Center, Abel Nunez, about 20% of construction workers in this city have TPS. This means that many projects within the city would come to a halt if they were to lose their status and thus the work permits allowing them to work legally. Along with construction workers, D.C. would lose many of its restaurant and other food industry workers, landscapers, nannies, and employees at grocery stores. While Trump touts his anti-immigration stance as defending American jobs, ending TPS would cripple the U.S. economy by deporting workers who provide some of our most basic necessities.

Ending TPS would also further destabilize Central America as countries would face an influx of 195,000 Salvadorians and 57,000 Hondurans. These countries do not have the infrastructure to provide employment to so many returnees. According to the Inter-American Dialogue report,  Central America Migration: Current Changes and Development Implications, 70% of the labor force in El Salvador and 80% in Honduras are part of the informal economy. These economies also depend on remittances – money sent to family members in Central America from TPS recipients in the U.S.  According to the report, "Remittances alone amounted to $17 billion in 2015 and represented over 50% of household income in some 3.5 million households in the region." Ending TPS will devastate Central American economies, which would in turn spur further migration out of these countries – including more people trying to enter the U.S. to find employment. If we want to stabilize Central America and reduce illegal immigration to the U.S., Congress should propose a bill that would grant a pathway for TPS recipients to remain in the country permanently.

Proposing such a bill would let Democrats show that they really stand behind immigrants. As Democrats prepare to take control of the House, I hope they will include plans to provide permanent protection for TPS Recipients on their agenda. Winning protection for TPS recipients will also create an opportunity for the immigrant rights community to advocate for other working families and make clear how immigrant workers contribute not only to the economy but also to American communities. To make this happen, we all need to get informed, to support organizations that focus on TPS, and finally make sure that Democrats in Congress don't get distracted from TPS by the Republican anti-immigrant fear campaign.

Juan L. Belman Guerrero

Juan L. Belman Guerrero is a DACA recipient who is the Program Manager at the Kalmanovitz Initiative for Labor and the Working Poor at Georgetown University. He has organized in Austin, Texas with the University Leadership Initiative and is originally from Juventino Rosas, Guanajuato, Mexico.

VISIT WEBSITE
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From Economic Crisis to World War III [feedly]

Moderator: This is a serious warning to contemplate, and the author is not the only one thinking it. More profound, it is a serious matter against whose catastrophic scope human mitigation efforts may seem of little weight. An accumulation of bad karma moving down the Mountainside. Does globalization have enough safety nets to break the plunging avalanche of destruction? 

From Economic Crisis to World War III
https://www.project-syndicate.org/commentary/economic-crisis-military-conflict-or-structural-reform-by-qian-liu-2018-11

From Economic Crisis to World War III

Nov 8, 2018 QIAN LIU

The response to the 2008 economic crisis has relied far too much on monetary stimulus, in the form of quantitative easing and near-zero (or even negative) interest rates, and included far too little structural reform. This means that the next crisis could come soon – and pave the way for a large-scale military conflict.

BEIJING – The next economic crisis is closer than you think. But what you should really worry about is what comes after: in the current social, political, and technological landscape, a prolonged economic crisis, combined with rising income inequality, could well escalate into a major global military conflict.



The 2008-09 global financial crisis almost bankrupted governments and caused systemic collapse. Policymakers managed to pull the global economy back from the brink, using massive monetary stimulus, including quantitative easing and near-zero (or even negative) interest rates.

But monetary stimulus is like an adrenaline shot to jump-start an arrested heart; it can revive the patient, but it does nothing to cure the disease. Treating a sick economy requires structural reforms, which can cover everything from financial and labor markets to tax systems, fertility patterns, and education policies.1

Policymakers have utterly failed to pursue such reforms, despite promising to do so. Instead, they have remained preoccupied with politics. From Italy to Germany, forming and sustaining governments now seems to take more time than actual governing. And Greece, for example, has relied on money from international creditors to keep its head (barely) above water, rather than genuinely reforming its pension system or improving its business environment.

The lack of structural reform has meant that the unprecedented excess liquidity that central banks injected into their economies was not allocated to its most efficient uses. Instead, it raised global asset prices to levels even higher than those prevailing before 2008.

In the United States, housing prices are now 8% higher than they were at the peak of the property bubble in 2006, according to the property website Zillow. The price-to-earnings (CAPE) ratio, which measures whether stock-market prices are within a reasonable range, is now higher than it was both in 2008 and at the start of the Great Depression in 1929.


If history is any guide, the consequences of this mistake could extend far beyond the economy. According to Harvard's Benjamin Friedman, prolonged periods of economic distress have been characterized also by public antipathy toward minority groups or foreign countries – attitudes that can help to fuel unrest, terrorism, or even war.As monetary tightening reveals the vulnerabilities in the real economy, the collapse of asset-price bubbles will trigger another economic crisis – one that could be even more severe than the last, because we have built up a tolerance to our strongest macroeconomic medications. A decade of regular adrenaline shots, in the form of ultra-low interest rates and unconventional monetary policies, has severely depleted their power to stabilize and stimulate the economy.

For example, during the Great Depression, US President Herbert Hoover signed the 1930 Smoot-Hawley Tariff Act, intended to protect American workers and farmers from foreign competition. In the subsequent five years, global trade shrank by two-thirds. Within a decade, World War II had begun.

To be sure, WWII, like World War I, was caused by a multitude of factors; there is no standard path to war. But there is reason to believe that high levels of inequality can play a significant role in stoking conflict.3

According to research by the economist Thomas Piketty, a spike in income inequality is often followed by a great crisis. Income inequality then declines for a while, before rising again, until a new peak – and a new disaster. Though causality has yet to be proven, given the limited number of data points, this correlation should not be taken lightly, especially with wealth and income inequality at historically high levels.

This is all the more worrying in view of the numerous other factors stoking social unrest and diplomatic tension, including technological disruption, a record-breaking migration crisis, anxiety over globalization, political polarization, and rising nationalism. All are symptoms of failed policies that could turn out to be trigger points for a future crisis.

Voters have good reason to be frustrated, but the emotionally appealing populists to whom they are increasingly giving their support are offering ill-advised solutions that will only make matters worse. For example, despite the world's unprecedented interconnectedness, multilateralism is increasingly being eschewed, as countries – most notably, Donald Trump's US – pursue unilateral, isolationist policies. Meanwhile, proxy wars are raging in Syria and Yemen.

Against this background, we must take seriously the possibility that the next economic crisis could lead to a large-scale military confrontation. By the logicof the political scientist Samuel Huntington , considering such a scenario could help us avoid it, because it would force us to take action. In this case, the key will be for policymakers to pursue the structural reforms that they have long promised, while replacing finger-pointing and antagonism with a sensible and respectful global dialogue. The alternative may well be global conflagration.


QIAN LIU

1 Commentary

Qian Liu is an economist based in China


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The Myth of China’s Forced Technology Transfer [feedly]

The Myth of China's Forced Technology Transfer
https://www.project-syndicate.org/commentary/myth-of-forced-technology-transfer-china-by-daniel-gros-2018-11

Nov 8, 2018 DANIEL GROS

One of the Trump administration's chief complaints against China is that its trade practices rely on what US authorities call "forced technology transfer." But the impact of this policy on both foreign companies and China's economy – not to mention the amount of "force" it actually entails – is vastly overestimated.

BEIJING – Even as observers in developed countries criticize US President Donald Trump's use of blunt tools such as tariffs against China, many believe that he is responding to a real problem. China, they argue, really is engaging in unfair trading practices. But is it?


One of the chief complaints against China is that it relies on what US authorities call "forced technology transfer": foreign companies seeking access to the Chinese market are required to share their intellectual property with a domestic "partner." But the word "forced" suggests a degree of coercion that does not make economic sense. American and European companies do not have to invest in China; if they choose to do so, knowing that it will require them to share their technology, it is because they still expect to earn a profit.

The technology-transfer requirement should help foreign companies secure better deals with Chinese firms, which will include the technology's value in their overall appraisal of a foreign investor's contribution to a joint venture. In exchange, the local partner and local government eager to foster growth would provide cheap land, infrastructure, tax exemptions, or loans on favorable terms.

In short, the transferred technology is priced into any foreign direct investment (FDI). This is reflected in the continued high profitability of companies with foreign investors.

It is only natural that American and European companies declare in surveys that they would be better off had they not been "forced" to transfer their technology. But these statements assume that the terms on which the initial investment was made would be the same without the technology transfer, and that is not the case.

Of course, if technology transfer were not a requirement, the most efficient investment deal in many cases would involve a licensing agreement or the payment of royalties. But that should be only a secondary consideration, because the present value of the foregone licensing fees or royalties would figure implicitly in any investment deal.

But while the costs to Western companies imposed by the technology-transfer requirement are probably being vastly overstated, so, too, are the benefits that the policy brings to China. So why do the Chinese authorities insist on linking market access to technology transfer?

China's main official argument is that, as a developing country, domestic firms are at a disadvantage vis-à-vis foreign investors, which possess advanced technologies that the local companies do not understand. But while this argument may hold water in some of the less developed countries that use it to justify restrictive FDI regimes, China's technological capabilities have exploded over the last couple of decades.

In fact, China's expenditure on research and development is now higher both as a percentage of GDP and in absolute terms than the level in Europe and many other OECD countries. With the country's capacity for indigenous R&D – not to mention technological absorption – having progressed substantially, there is little need to continue protecting Chinese "infant" industries.

It is this progress that has driven Western companies to become more vocal in their complaints about "forced" technology transfer. Previously, they were more willing to transfer their technology, based on the expectation that Chinese competitors would be unable to adapt and master it, anyway. With China now producing more graduates with bachelor's degrees in science and engineering than the US and Europe combined, that expectation is no longer tenable.

Despite rising resistance to technology transfer, however, the Chinese authorities remain reluctant to abandon their policy, probably for much the same reason the US is angry: they overestimate its impact. They fail to recognize that Western companies might be offering worse terms to Chinese partners than they would if they could keep their technology and use licensing agreements instead.

Yet these other forms of technology transfer are already becoming increasingly prevalent: recorded royalties payments from China have skyrocketed, and now amount to close to $30 billion per year. With China now second only to the US in terms of paying for foreign technology, it is clear that a large and growing share of technology transfer is not "forced."

For Trump, however, that may not be the point. What his administration is really worried about is that China is about to surpass the US and lock down technological leadership in a number of sectors considered critical for national security (on both sides of the Pacific). Yet forcing China to eliminate its technology-transfer requirements will not change this.

An end to that policy may actually be in China's best interests. The US and China account for a large share of global trade, but they do not dominate the global economy. The bilateral trade war will be won by the side that can gain the support of the neutral powers (such as Europe and Japan) by appearing more reasonable. For China, this would mean abolishing all restrictions on foreign ownership, including the requirement that technology be shared, rather than licensed.

Such a move would underscore the strength of the Chinese economy, without costing China nearly as much as its leaders or US policymakers seem to think. Perhaps more important, it would force the US either to stop its China bashing or to admit that the underlying motivation is not economics, but geopolitical rivalry.

1. 
   

DANIEL GROS

Writing for PS since 2005 
114 Commentaries

Daniel Gros is Director of the Brussels-based Center for European Policy Studies. He has worked for the International Monetary Fund, and served as an economic adviser to the European Commission, the European Parliament, and the French prime minister and finance minister. He is the editor of Economie Internationale and International Finance.

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The Law Versus Worker Rights [feedly]

The Law Versus Worker Rights
https://economicfront.wordpress.com/2018/11/08/the-law-versus-worker-rights/

Organizing a union is no easy task in the United States.  Although organizing a union is supposed to be a protected right, businesses regularly fire union supporters knowing that they face minimal punishment even if found guilty for their actions.  In fact, the rights of all workers, regardless of their interest in unionization, are being whittled down. Simply put, US law doesn't work for workers.

Moshe Z. Marvit, writing in the newspaper In These Times, provides a recent example of the ongoing legal attack on union rights, in this case those of unionized janitors.  As he explains, the National Labor Relations Board, using a provision of the 1947 Taft-Hartley Act designed to weaken labor solidarity:

ruled [in October 2018] that janitors in San Francisco violated the law when they picketed in front of their workplace to win higher wages, better working conditions and freedom from sexual harassment in their workplace.

The provision in question is one that prohibits workers from engaging in actions against a so-called "secondary" employer.  The provision makes it illegal for workers to organize boycotts or pickets directed against an employer with which the union does not have a dispute in order to get that firm to pressure the union's employer to settle its dispute with the union.

The NLRB's ruling dramatically stretches the meaning of this provision, in that the San Francisco janitors were actually engaged in workplace actions against an employer that had significant influence over their terms of employment.  However, Board members were able to justify their ruling thanks to the complexities generated by the increasingly common corporate strategy of subcontracting.

In this case, the janitors were employed by Ortiz Janitorial Services, which was in turn subcontracted by Preferred Building Services, to work in the building of yet a third company. An administrative law judge had previously ruled that Preferred Building Services had meaninful control over the employment terms of the janitors hired by Ortiz Janitorial Services.

More specifically, the judge found "that Preferred Building Services was involved in the hiring, firing, disciplining, supervision, direction of work, and other terms and conditions of the janitors' employment with Ortiz Janitorial Services." That made Ortiz and Preferred joint employers of the janitors, and the worker's actions legal.  Undeterred, the NLRB simply rejected the administrative law judge's ruling, declaring instead that the janitors worked only for Ortiz which made the worker's actions, which were also aimed at Preferred, illegal.

As Marvit summarizes:

The NLRB's recent case restricting the picketing rights of subcontractors, temps and other workers who do not have a single direct employment relationship is a further sign that the labor board will continue limiting its joint employer doctrine. This will make it more difficult or even impossible for many workers to have any meaningful voice in the workplace. But the case also highlights some of the core problems of labor law as it currently exists. By being included under the NLRA, workers lose basic rights that all other Americans enjoy.

Given how important the use of subcontracted labor has become, it should surprise no one that Trump's appointees to the National Labor Relations Board are actively working to tighten the standard under which workers can claim to face, and organize against, a joint employer.

But the attack on worker rights is not limited to efforts to weaken union power.  The Supreme Court, in a 5-4 vote in May, ruled in Epic Systems Corp v. Lewis, that employers can include a clause in their employment contract requiring nonunion workers to arbitrate their disputes individually, a ruling that eliminates the ability of workers to sue a company for workplace violations or use collective actions such as class action suits. The ruling resolved three separate cases–Epic Systems Corp. v. Lewis, Ernst & Young LLP v. Morris, and National Labor Relations Board v. Murphy Oil USA–that were argued together in front of the Court on the same day because they all raised the same basic issue.

Marvit explains what led to Lewis's decision to sue Epic Systems:

On April 2, 2014, Jacob Lewis, who was a technical writer for Epic Systems, received an email from his employer with a document titled "Mutual Arbitration Agreement Regarding Wages and Hours." The document stated that the employee and the employer waive their rights to go to court and instead agreed to take all wage and hour claims to arbitration. Furthermore, unlike in court, the employee agreed that any arbitration would be one-on-one. This "agreement" did not provide any opportunity to negotiate, and it had no place to sign or refuse to sign. Instead, it stated, "I understand that if I continue to work at Epic, I will be deemed to have accepted this Agreement." The workers had two choices: immediately quit or accept the agreement. . . .

When Lewis tried to take Epic Systems to court for misclassifying him and his fellow workers as independent contractors and depriving them of overtime pay, he realized that by opening the email and continuing to work, he waved his right to bring a collective action or go to court.

As the Court saw it, the case pitted the Federal Arbitration Act against the National Labor Relations Act.  The former established a legal foundation for using one-on-one arbitration to settle disputes while the latter gives workers the right to work together for "mutual aid and protection." The Court's ruling priviledged arbitration.

Jane McAlevey, writing before the Supreme Court combined the cases and decided Epic Systems Corp v. Lewis, highlights the likely anti-worker consequences of the Court's decision:

As for loud liberal voices — union and nonunion — that declare unions as a thing of the past, the forthcoming SCOTUS ruling on NLRB v Murphy Oil will prove most of the nonunion "innovations" moot. Murphy Oil is a complicated legal case that boils down to removing what are called the Section 7 protections under the National Labor Relations Act, and preventing class action lawsuits.

Murphy Oil blows a hole through the legal safeguards that non-union workers have enjoyed for decades, eviscerating much of the tactical repertoire of so-called Alt Labor, such as class-action wage-theft cases, and workers participating in protests called by nonunion community groups in front of their workplaces. The timing is horrific and uncanny: As women are finally finding their voices about sexual harassment at work, mostly in nonunion workplaces (as the majority are), Murphy Oil will prevent class action sexual harassment lawsuits.

The Epic Systems decision is a big deal, since there is a growing and already sizeable use of mandatory arbitration by employers.  A study by the Economic Policy Institute found that:

• More than half—53.9 percent—of nonunion private-sector employers have mandatory arbitration procedures. Among companies with 1,000 or more employees, 65.1 percent have mandatory arbitration procedures.
• Among private-sector nonunion employees, 56.2 percent are subject to mandatory employment arbitration procedures. Extrapolating to the overall workforce, this means that 60.1 million American workers no longer have access to the courts to protect their legal employment rights and instead must go to arbitration.
• Of the employers who require mandatory arbitration, 30.1 percent also include class action waivers in their procedures—meaning that in addition to losing their right to file a lawsuit on their own behalf, employees also lose the right to address widespread rights violations through collective legal action.
• Large employers are more likely than small employers to include class action waivers, so the share of employeesaffected is significantly higher than the share of employers engaging in this practice: of employees subject to mandatory arbitration, 41.1 percent have also waived their right to be part of a class action claim. Overall, this means that 23.1 percent of private-sector nonunion employees, or 24.7 million American workers, no longer have the right to bring a class action claim if their employment rights have been violated.
• Mandatory arbitration is more common in low-wage workplaces. It is also more common in industries that are disproportionately composed of women workers and in industries that are disproportionately composed of African American workers.

The Court's decision means that workers without unions will have little power. The NLRB's decision weakens the laws that are supposed to protect union rights. The only effective response to this trend is, as the recent wave of teacher strikes demonstrated, militant, rank and file-led union organizing, with strong community involvement and support.  Hopefully, exposing the class-biased nature of US laws may help encourage this kind of activism.

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