What to watch on jobs day: An improving labor market, but rising long-term unemployment and a significant jobs shortfall are still causes for concern [feedly]

What to watch on jobs day: An improving labor market, but rising long-term unemployment and a significant jobs shortfall are still causes for concern
https://www.epi.org/blog/what-to-watch-on-jobs-day-an-improving-labor-market-but-rising-long-term-unemployment-and-a-significant-jobs-shortfall-are-still-causes-for-concern/

When the April jobs report comes out tomorrow from the Bureau of Labor Statistics, I expect another month of strong job growth. Progress on the production and distribution of the vaccine, as well as forthcoming aid to state and local governments and direct assistance to workers and their families, means that the labor market should pick up steam. And that's much needed, because the U.S. economy is still facing a significant jobs shortfall between 9.1 million and 11.0 million jobs, as I show below.

As of the latest March 2021 data, employment is down 8.4 million jobs from its pre-pandemic level in February 2020. In addition, thousands of jobs would have been added each month over the last year without the pandemic recession.

I consider two plausible counterfactuals for how many jobs may have been created if the recession hadn't hit, as shown in the figure below. First, we could simply add enough jobs to keep up with population growth. There was a noticeable slowdown in ages 16+ population growth early in the pandemic; however, on average, we still would have needed a minimum of 54,000 jobs a month just to keep up with that growth.

Alternatively, we could count how many jobs may have been added if we took pre-recession growth in payroll employment and extended that forward. Average monthly job growth over the 12 months prior the recession was 202,000. Using these reasonable counterfactuals, we are now short between 9.1 million and 11.0 million jobs since February 2020. When the latest job numbers are released tomorrow, we should not only look at the difference in jobs between now and February 2020, but also what could have been if the economy continued growing over the last year.

Jobs day

While the overall jobs shortfall is useful to track, we also need to pay attention to the latest numbers across various sectors of the economy. In March, we started to see a significant uptick in low-wage leisure and hospitality employment. If we get continued job growth like we saw last month in this sector, it will provide further evidence against mostly anecdotal claims of labor shortages. As my colleague Heidi Shierholz explains, claims of labor shortages are likely overblown. Wage growth would be accelerating if there were actual labor shortages as employers compete for workers, but that isn't happening. It is plausible that some workers may be staying out of the labor force because they are unwilling to accept low wages with the added risks of physically going to work while the pandemic continues to spread, but, again, we'd be seeing accelerating wage growth to entice these workers if this were happening in large numbers. Furthermore, on the specific question of whether the pandemic unemployment insurance programs' increased generosity is keeping workers out of the labor force, Heidi points to several rigorous papers that find no evidence that these programs have kept people from taking jobs in the recent past.

As the recovery takes hold, we also need to continue tracking which workers are being left behind. The pandemic exacerbated stark and persistent racial and ethnic disparities that remain in the labor market today. One example is seen by looking at the unemployment rate across race and ethnic groups. Before the pandemic, the unemployment rate for Black workers was higher than the current unemployment rate for white workers. Now, the current unemployment rate for Black workers is 9.6%, almost as high as the peak for all workers in the aftermath of the Great Recession.

Jobs Day

Elevated unemployment rates are concerning as are the growing numbers of workers who are unemployed for longer and longer spells. In September and October 2020, the number of workers unemployed for 27+ weeks shot up as the pandemic recession dragged on for over six months. In the last couple of months, the number of workers with unemployment durations of at least 52 weeks rose dramatically from 915,000 in January 2021 to 2.3 million in March 2021. The figure below breaks out the unemployed population by length of unemployment spell. Although all expectations are for a strong growth in jobs, I fear that those who are 52+ weeks unemployed will also continue to grow.

As it becomes safe to expand employment—as public health indicators continue to improve with vaccine distribution—we need to make sure that job opportunities improve for all corners of the labor market.

Economic indicators

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The consequences of job displacement for U.S. workers [feedly]

The consequences of job displacement for U.S. workers
https://equitablegrowth.org/the-consequences-of-job-displacement-for-u-s-workers/

Overview

More than a year into the coronavirus recession, unemployment in the United States remains high, and there are 8.4 million fewer jobs than prior to the pandemic. As the U.S. economy begins to recover from the recession caused by this historic public health crisis, some of those who lost their jobs are experiencing what economists refer to as job displacement, where their prior positions no longer exist even as the economy recovers. These workers face unique circumstances when seeking to rejoin the labor force and to reestablish economic security for themselves and their families.

The consequences of job displacement for U.S. workersDownload

Job displacement is generally understood as a form of job loss that stems from shifting economic and business conditions. For instance, workers can be displaced from their jobs due to a plant closure, a corporate downsizing, insufficient work, or the outsourcing of positions. Job displacement is generally outside of the control of individual workers, but it nonetheless can break down career ladders, dissolve valuable worker-employer relationships, and widen existing racial disparities in labor market outcomes because the research shows that workers of color, and especially Black workers, are most often first in line when job displacement occurs.

All of these consequences of job displacement lead to deep and persistent harmful effects for those who experience it and cause damage to the entire U.S. economy. This issue brief reviews the academic literature on job displacement and offers labor market policies that could help mitigate the negative effects of job displacement. We examine each of the following:

• The long-lasting effects of job displacement
• The especially severe labor market outcomes for workers who are displaced during recessions
• The higher likelihood of severe job displacement for workers of color, and particularly for Black workers
• The effects of job displacement rippling through the entire economy

We then close with several policy ideas that could prevent and mitigate the negative consequences of job displacement. Among these policies are ramping up Short-Time Compensation for workers who work for firms that reduce their hours without displacing them, extending Unemployment Insurance to enable displaced workers to find better job matches, and making it easier for workers to organize and join unions.

The consequences of job displacement are long-lasting

Since the early 1990s, researchers have used administrative data to track displaced workers' job market trajectories through time, finding that post-displacement earnings losses are substantial, experienced across a variety of economic sectors, and persist even after reemployment. Using Social Security records, for example, a team of economists analyzed the earnings and employment trajectories of men who were separated from their jobs as their employers underwent mass layoff events in the early 1980s. They find that those displaced workers experienced initial earnings losses of 30 percent, relative to workers who remained attached to their jobs in the same firms. After 15 to 20 years, the displaced workers continued to have earnings 20 percent below those of their nondisplaced counterparts.

Then, there is the more recent research by Marta Lachowska of the W.E. Upjohn Institute for Employment Research, Alexandre Mas of Princeton University, and Stephen Woodbury of Michigan State University. They use linked employee-employer data from administrative records to examine how displacement between 2008 and 2010 affected workers' short- and long-term earnings. They find that in the first few months after the loss of long-tenure jobs, workers' earnings were nearly half of what they were prior to displacement. After 5 years, workers' earnings were, on average, still 15 percent below their pre-displacement earnings.

What is driving these earnings losses after job displacement? The team of economists finds that most of the decline in earnings can be attributed to the dissolution of valuable worker-employer relationships. For those displaced from a long-tenure position, the disintegration of good job-worker matches explains a greater chunk of the long-term earnings decline than other factors, such as lost seniority, the erosion of their so-called human capital, or the possibility of transitioning to a lower-paying employer.

In addition, the consequences of this form of involuntary job loss go beyond the loss of earnings. Evidence shows that workers who experience displacement go on to hold jobs with less occupational status, diminished job authority, and fewer employer-provided benefits than otherwise-similar workers who were not displaced.

Workers who are displaced during recessions face especially tough labor market outcomes

Recessions are especially bad times to lose a job. During economic downturns, employers tend to hire fewer workers, offer lower wages, and increase posted requirements for a given position. When unemployment rates are high, job-seekers have to compete with more workers, employment is harder to find, and workers are more likely to go through long spells of unemployment.

Consequently, researchers find that the negative consequences of job displacement are even more severe when experienced amid an economic slump. For instance, Steven Davis at the University of Chicago's Booth School of Business and Till von Wachter at the University of California, Los Angeles find that men who were displaced when the U.S. unemployment rate was higher than 8 percent experienced earnings losses twice as large as those who were displaced when the overall unemployment rate was lower than 6 percent.

Deeper economic contractions can therefore lead to even worse labor market outcomes for U.S. workers. When studying the Great Recession, for example, Henry Farber of Princeton University finds that the rate of job loss, the difficulty of finding new employment, and the probability of finding only part-time work were all higher in the 2007–2009 crisis than in the economic contractions of the 1980s, 1990s, and early 2000s. The labor market consequences of job loss, Farber finds, were unusually severe and long-lasting.

Workers of color, and Black workers in particular, are especially likely to experience displacement

Research stretching back decades demonstrates that workers of color are more likely to experience job displacement than their White counterparts. There is evidence, for instance, that Black workers are the first to be fired as the U.S. economy contracts—a finding that holds even when accounting for characteristics such as education, occupation, and industry. This evidence underscores the importance of strengthening the enforcement of workplace anti-discrimination laws during economic downturns.

Alarmingly, the Black-White job displacement divide is more severe today than it was in the 1990s. Using data from the Displaced Worker Survey of the Current Population Survey, Elizabeth Wrigley-Field of the University of Minnesota and Nathan Seltzer of the University of Wisconsin-Madison analyze racial disparities in job displacement between 1981 and 2017. They find not only that Black workers were nearly always more likely to be displaced than their White counterparts, but also that sectors in which Black workers are overrepresented and which used to provide a higher degree of job security—especially jobs in the public sector—no longer do. The authors also find that these disparities exist when controlling for education level, meaning that being White reduces the likelihood of displacement as much as having a college degree.

The effects of job displacement and mass layoffs can ripple through the entire U.S. economy

Job displacement hurts not only those who experience it, but could also harm the entire U.S. economy by causing recessions to last longer and be more severe. As noted above, workers who experience a displacement tend to have lower job-finding rates and are more likely to be unemployed for longer periods of time. Research shows, in turn, that high levels of long-term joblessness can suppress overall wage growth and lead to lower economywide employment levels.  

In addition, the income volatility associated with job loss threatens the economic security of key consumers in the U.S. economy. The spending of workers who are historically more exposed to job displacement—workers of color, younger workers, and workers without a college degree—is also particularly sensitive to income shocks. As a result, the unequal exposure to displacement and income loss more generally can trigger a feedback loop where important consumers have to cut back their spending dramatically, reducing demand for goods and services and leading to further job losses.

Policies to prevent and mitigate the negative consequences of displacement  

Job displacement is a hugely disruptive labor market outcome for U.S. workers. To protect them from negative consequences associated with displacement, policymakers should consider ramping up Short-Time Compensation—a program within the broader Unemployment Insurance system that helps workers avoid displacement by allowing employers to temporarily cut labor costs while keeping workers attached to their jobs. Under Short-Time Compensation, employers can reduce the number of hours of work for a group of workers who, in turn, receive prorated jobless benefits that replace a portion of their lost wages, allowing both workers and employers to withstand a temporary drop in business. 

When job displacement happens, income-support programs, such as extended Unemployment Insurance, can give workers the time and economic security they need to find employment that is a good match for their skills and interests. Research by Adriana Kugler and Umberto Muratori at Georgetown University and Ammar Farooq at Uber Technologies Inc. shows that during the Great Recession of 2007–2009, workers who had access to Unemployment Insurance benefits for a greater number of weeks were more likely to experience upward occupational mobility and earn higher reemployment wages. These findings thus point to the need to make jobless benefits accessible for longer and to tie the duration of the Extended Benefits program to improved automatic triggers.

Expanding workers' abilities to organize and join unions may also help reduce some of the harms of job displacement. So-called reduction in force clauses in collective bargaining agreements can help mediate the level of job displacement, as well as provide other supports for workers when job loss is unavoidable, such as requiring employers to rehire the laid-off workers if and when business conditions improve. Proposals to enable wider unionization across the U.S. labor market will help workers on many fronts, including when they may be at risk for losing their jobs.

The central factor across these and other policies to mitigate the harms of job displacement is maintaining employees' attachments to their jobs when at all possible and supporting workers' incomes when job loss is unavoidable to improve their long-term earnings outcomes. Long-term restructuring of the U.S. economy is inevitable and ultimately fosters a robust economy, and ensuring workers are supported through these shifts is essential for ensuring broadly shared growth.

The post The consequences of job displacement for U.S. workers appeared first on Equitable Growth.

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Avineri on Marx as social democrat [feedly]

Avineri on Marx as social democrat
http://feedproxy.google.com/~r/Understandingsociety/~3/sRVdOr5-I6I/avineri-on-marx-as-social-democrat.html

  Shlomo Avineri is one of the interpreters of Marx's thought for whom I have had a great deal of respect since the publication of Social and Political Thought of Karl Marx in 1968. (I also greatly admire his book on Hegel's political philosophy, Hegel's Theory of the Modern State.) Avineri has recently published Karl Marx: Philosophy and Revolution, and this book constitutes a very useful contribution to the question of Marx's relevance to our current situation in the twenty-first century. (Here is an earlier post that attempts to assess Marx's continuing relevance; link.)

The recent book is presented as a fairly brief intellectual biography -- an account of the influences and preoccupations through which Marx's intellectual framework took shape. (A side theme is the role that Marx's family history of Jewish identity may have played in his own development.) In many ways the current book covers much of the same ground as the earlier Social and Political Thought of Karl Marx -- the background in Hegel's political philosophy, the conception of human beings as homo faber, the idea of the proletariat as the universal class, the "dialectic" of capitalist development, the limits of revolution, even the skeptical view Marx took of the Paris Commune. In effect, one might look at the current book as an updated and streamlined edition of the earlier book. But the current book has a liveliness and readability that distinguishes it. And crucially, the current book is quite explicit in its most striking claim: that Marx is a much more measured and nuanced theorist of socialism and proletarian emancipation than he is usually thought to be. Marx is fundamentally a social democrat and gradualist. Consistent with the intellectual and political interest of twenty-first century readers who want to find a source of new and non-dogmatic ideas on the basis of which to rethink the failures of our contemporary world, Avineri presents Marx as just such a thinker.

In a nutshell, Avineri argues in Karl Marx: Philosophy and Revolution that Marx is not the rigid and uncompromising "revolutionary" activist that he has often been understood to be -- both by supporters and critics. "What is usually called 'Marxism' is what Engels decided to include in the corpus and the way he interpreted it" (kl 81). Rather, according to Avineri, Marx's key idea, and the key motivating impetus of critique of modern capitalist society, is the idea of emancipation. And Avineri argues that this is, most fundamentally, an affirmation of radical Enlightenment values that were deeply thwarted in the nineteenth century. Here Avineri makes a complicated and crucial point. Marx's social location as the son of Jewish parents -- and therefore himself a Jew -- was not a defining fact for the young Karl Marx (according to Avineri); Marx rarely referred to his Jewish identity. But what was defining was the double earthquake in nineteenth-century Europe, first of the political emancipation of the Jews in the Rhineland following its absorption by France in post-revolutionary France, and then the reversal of this emancipation in 1814-15 when the Rhineland returned to Prussian political control according to the terms of the Congress of Vienna. Revolutionary France was the first European country to emancipate its Jewish citizens, granting them equal political and civic rights. So the Jews of the Rhineland experienced a short two-decade period of emancipation and equal citizenship, followed by a return to juridical and social discrimination. 

After some deliberations, the Prussian authorities in the Rhineland revoked Jewish emancipation and imposed on the Jews in the newly annexed territories the status of Jews in Prussia proper. The major principle, following the precepts of what it meant to be a Christian state, implied that Jews could not be in a situation of authority over Christians: they could not serve as lawyers, judges, civil servants, teachers in schools or universities. In other words, the Rhenish Jews were de-emancipated, thrown back to where they—or their parents—had been a generation ago. (5)

Marx was born in 1818; so this social and political trauma was fresh in the experience of his parents, including the forced conversion to Christianity reluctantly accepted by his father. And Avineri believes that this experience created a unique kind of alienation for a generation of well-educated Jewish intellectuals from this region -- including Marx.

In the years between 1815 and 1848 one can discern a deep feeling of alienation and consequent political radicalization among members of the Jewish intelligentsia in the Rhineland and the emergence among them—much more than among the more quietistic Jewish communities in Prussia proper—of radical politics; some did convert under that pressure, but this did not make them more supportive of the system imposed on them; others, while distancing themselves from orthodox Judaism, did try to maintain their Jewish identity in one way or another. (7)

The most striking element of Avineri's interpretation of Marx's evolving position is what he takes to be Marx's preference for a gradual and non-violent transition to a kind of social democracy.

In a significant but somehow neglected passage in Das Kapital, Marx argues that in England there is a distinct possibility for the working class to reach power peacefully, not only because of the extension of the suffrage, but also due to various aspects of factory and social legislation, adding that "for this reason … I have given so large a space in this volume to history, details, and the results of English factory legislation." (140)

The grounds of this view can be found in Marx's rejection of Jacobinism and the Terror in the French Revolution.

In a surprising critique of the Jacobins, Marx argues that the Reign of Terror was itself a testimony of the failure of Jacobin politics because of their wrongheaded fascination with classical Rome, encapsulated in Saint-Just's call to "Let revolutionary men be Romans" or his nostalgic complaint that, since the Romans, "the world is a void, and only their memory fills it and prophesizes liberty." This to Marx is not only empty romanticism but would also be responsible for the Jacobins' shift toward terrorism: the Roman republican tradition focused exclusively on political arrangements in the state, whereas modern societies have to grapple with the tension between civil, bourgeois society and the political realm—an issue totally unknown in Roman history. ... any attempt to use force when conditions are not ripe for internal change are doomed to the tragedy—and cruelty—of the Jacobin terror. (61)

The closing sentence of this passage can be read as a firm rejection of the impulses that led to the cruelties and intransigence in pursuit of "revolution" of Lenin, Stalin, and Mao.

Also important in Avineri's view of Marx's development as an advocate for revolution is the new direction Marx took following the failures of the revolutions of 1848. In place of the bold and sweeping view of the future for proletarian revolution outlined in the Communist Manifesto, Marx articulates a more nuanced and historically contextualized conception of "class" in his writings of the 1850s. In The Class Struggles in France, for example, Avineri finds this change of perspective:

The detailed study from 1850 suggests a very different picture of a complex, multilayered society, where many conflicting interests crisscross each other, bringing about shifting coalitions among multiple groups and subgroups and thus impeding the emergence of a clear-cut, polarized class warfare. (109)

And in the 18th Brumaire Avineri finds that Marx accords much greater complexity to the relationship between economic interests and political power:

He admits that the relationship between economic interests and political power is much more complex and not as simplistic or linear as he himself had maintained in the Manifesto.

Avineri also gives a good deal of attention to Marx's rejection of historical determinism and the idea that there is only one path of historical development. He emphasizes Marx's view, consistent from early to late, that social change must be understood in its particular social context, and that there is great contingency in historical change. Avineri seems to believe that this sensitivity to historical context is one result of Harx's critique of Hegel's philosophical methods: rather than looking for a philosophical theory that explains history, it is necessary to look to historical circumstances to explain change. Avineri provides a very interesting discussion (178) of several drafts of Marx's letter to Vera Zasulich (link) in which Marx denies that his theories have definitive implications for the course of Russian social and political development. (For further discussion of the Zasulich correspondence see an earlier post here.)

Avineri also argues for a reassessment of Marx's view of the Paris Commune in 1871 (a theme he develops in the 1968 book as well). He describes the published version of The Civil War in France as an official report from the International Workingmen's Association (IWA), and a document that is tailored to the radical working class orientation of IWA; whereas Avineri documents that the drafts that Marx prepared prior to publication of the piece are much more measured, nuanced, and critical. In particular, Avineri argues that Marx viewed the Commune's rebellion as both ill-conceived and primarily "petty-bourgeois" rather than proletarian:

Yet there is a fundamental difference between the drafts and the final published essay. In the drafts Marx tries to identify the social structure of the Commune and its political aims, and concludes that it was basically a lower-middle-class affair, with scant proletarian input. ...

Marx's drafts clearly and unequivocally identify the rising of the Commune with its petty-bourgeois leadership, and note in great detail the immediate circumstances of the insurrection. During the growing tension between the provisional government in Versailles and the Commune, which controlled Paris, Versailles proclaimed a provisional moratorium on all outstanding bills of payments and rents. The aim of this moratorium was obvious—to get the support of the lower middle class, mainly in Paris, for Versailles, and for a time it worked. The moratorium was to expire on 13th March 1871, and representatives of Paris middle-class associations tried to press for its extension, but the provisional government in Versailles under Thiers refused. Marx recounts that between 13th and 18th March more than 150,000 demands for payment of bills and rents were reactivated, and then on 18th March the insurrection of the Commune broke out. Marx goes on to note that the demand for a further, or definite, extension of the moratorium—obviously an interest of lower-middle-class groups—continued to figure as a major plank of the Commune. The drafts also contain further analysis of the social structure of the Commune leadership, pointing to its petty-middle-class composition. (155)

Avineri finds these same doubts about the Commune expressed by Marx in a letter to Leo Fränckel, a central committee member of the IWA and leader of the Commune, during the final days of the suppression of the uprising (155). Avineri's view is unequivocal:

Marx never retreated from his view that the Commune was not a socialist uprising and that, by implication, it had set back the chances of the working-class movement in Europe. Ten years later, in a letter of 22nd February 1881 to the Dutch socialist Ferdinand Domela-Nieuwenhuis, Marx reiterated his view that a socialist government can come into power only if conditions enable it to take all possible measures necessary for transforming society radically, and then, referring to the Commune, added: 

"But apart from the fact that it was merely the rising of a city under exceptional conditions, the majority of the Commune was in no way socialist, nor could it be. With a modicum of common sense, however, it could have reached a compromise with Versailles useful to the whole mass of the people—the only thing that could have been reached at the time. The appropriation of the Bank of France alone would have been enough to put an end with terror to the pretensions of the Versailles people, etc." (161)

This demystification of Marx's view of the Commune is important because of the iconic role that the Commune played in the drama and rhetoric of Communist rhetoric throughout much of the following century. The heroic proletarian nature of the Commune and Marx's important role in its origins are both defining myths of the Communist narrative; but Avineri demonstrates that they are fundamentally incorrect.

So what was Marx's view of "proletarian revolution" in the final decades of his life? In Avineri's view, it was a fairly moderate view that urged the party of the proletariat to find non-violent, non-terrorist avenues to political power. Avineri offers a great deal of evidence to support this interpretation. For example, he highlights Marx's speech to the IWA in Amsterdam in 1872, when the IWA was deeply divided between the anarchists (Bakunin) and socialists (Marx):

The speech is a powerful insistence on the need to gain political power but also expresses a highly pluralist approach to the question of how gaining political power would come about—through violent revolution or through peaceful means, shocking the anarchists by maintaining that in some significant cases orderly electoral politics might be the handmaid of socialism. 

"The workers must one day conquer political supremacy in order to establish the new organization of labor. … But we do not maintain that the attainment of this end requires identical means. We know that one has to take into consideration the institutions, mores [Sitten] and traditions of the different countries, and we do not deny that there are countries like England and America, and if I would be familiar with your institutions, also Holland, where labor may attain its goal by peaceful means." (163)

Here we find Marx the social democrat -- an advocate for proletarian revolution who recommends seizure of power through a gradual process of legal and peaceful means. And it is important to underline, as Avineri does, that this is not the counsel of despair following the failures of 1848 and 1871, but rather a fundamental view of Marx's, that social change is not a putsch. "A movement based on terror, intimidation, and blackmail will ultimately produce a society based on these methods as well" (165). Here is Marx's rebuttal to Bakunin's philosophy in Statism and Anarchy and his derisory term, barracks communism:

What a wonderful example of barracks communism! Everything is here—common pots and dormitories, control commissioners and control offices, the regulation of education, production, consumption—in one word, control of all social activity; and at the same time, there appears Our Committee, anonymous and unknown, as supreme authority. Surely, this is most pure anti-authoritarianism! (165)

Avineri supports this reading of Marx's analysis of the Paris Commune with several relatively little-known statements by Marx in 1867 following enactment of the Second Reform Act in Britain that reinforce this preference for a peaceful transition to socialism:

It is possible that the struggle between the workers and the capitalists will be less terrible and less bloody than the struggle between the feudal lords and the bourgeoisie in England and France. Let us hope so. (167)

and:

In England, for example, the way is open for the working class to develop their political power. In a place where they can achieve their goal more quickly and more securely through peaceful propaganda, insurrection would be a folly. (167)

Avineri is a remarkably learned reader of Marx, and a lucid interpreter. The distance is great between his interpretation of Marx as a principled advocate of a peaceful transition to power by the proletarian majority and Marxist orthodoxy since Engels. And yet Avineri's case is deeply informed by a close reading of a broad swath of Marx's writings throughout Marx's career. It is moreover consistent with Marx's famous statement -- "If that is Marxism, then I am not a Marxist!". Rather, Marx displays a sociological imagination that reflected a nuanced, historically minded theorist, constantly aware of the contingencies and contextual differences of historical settings. Further, Avineri makes a powerful case for believing that Marx regarded a strategy of violent seizure of power as deeply self-defeating. Unlike Communist orthodoxy since Lenin, Marx did not believe that successful social and political transformation could be achieved by fiat, force, and ruthless party discipline; in a word, he rejected the premises of Soviet-style communism. And given the crimes that have been committed in the name of revolution in the past century and a half, that is a good thing.

(Bruce Robbins' review of the book in The Nation (link) is well worth reading.)

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Companies are stealing billions from workers—and getting away with it [feedly]

stories that need telling...

Companies are stealing billions from workers—and getting away with it
https://www.peoplesworld.org/article/companies-are-stealing-billions-from-workers-and-getting-away-with-it/

Already battered by long shifts and high infection rates, essential workers struggling through the pandemic face another hazard of hard times: employers who steal their wages.

When a recession hits, U.S. companies are more likely to stiff their lowest-wage workers. These businesses often pay less than the minimum wage, make employees work off the clock, or refuse to pay overtime rates. In the most egregious cases, bosses don't pay their employees at all.

Companies that hire child care workers, gas station clerks, restaurant servers, and security guards are among the businesses most likely to get caught cheating their employees, according to a Center for Public Integrity analysis of minimum wage and overtime violations from the U.S. Department of Labor. In 2019 alone, the agency cited about 8,500 employers for taking about $287 million from workers.

Major U.S. corporations are some of the worst offenders. They include Halliburton, G4S Wackenhut, and Circle-K stores, which agency records show have collectively taken more than $22 million from their employees since 2005.

Their victims toil on the lower rungs of the workforce. People like Danielle Wynne, a $10-an-hour convenience store clerk in Florida who said her boss ordered her to work off the clock, and Ruth Palacios, a janitor from Mexico who earned less than the minimum wage to disinfect a New York City hospital at the height of the pandemic.

Companies have little incentive to follow the law. The Labor Department's Wage and Hour Division, which investigates federal wage-theft complaints, rarely penalizes repeat offenders, according to a review of data from the division. Public Integrity obtained the records through a Freedom of Information Act request covering October 2005 to September 2020.

The agency fined only about 1 in 4 repeat offenders during that period. And it ordered those companies to pay workers cash damages—penalty money in addition to back wages—in just 14% of those cases.

On top of that, the division often lets businesses avoid repaying their employees all the money they're owed. In all, the agency has let more than 16,000 employers get away with not paying $20.3 million in back wages since 2005, according to Public Integrity's analysis.

"Some companies are doing a cost-benefit analysis and realize it's cheaper to violate the law, even if you get caught," said Jenn Round, a labor standards enforcement fellow at the Center for Innovation in Worker Organization at Rutgers University.

The federal data provides a revealing—though incomplete—look at a practice that pushes America's lowest-paid workers further into poverty. The data doesn't include violations of state wage-theft laws or cases where employees sued. And it misses all the workers who don't file complaints, either because they're afraid to or are unaware of their rights.

But some economists say wage theft is so pervasive that it's costing workers at least $15 billion a year—far more than the amount stolen in robberies.

Companies are more prone to cheating employees of color and immigrant workers, according to Daniel Galvin, a political science professor and policy researcher at Northwestern University. His research, based on data from the Census Bureau's Current Population Survey, shows that immigrants and Latino workers were twice as likely to earn less than the minimum wage from 2009 to 2019 compared with white Americans. Black workers were nearly 50% more likely to get ripped off in comparison.

Through much of the Jim Crow era, the federal government ignored racial disparities in pay. It wasn't until the Great Depression that Congress first tried to establish a national minimum wage and overtime pay for workers. To get Southern Democrats to vote for the Fair Labor Standards Act of 1938, Northern Democrats agreed to exclude agricultural laborers, nannies, and housekeepers from the law's protections. In the South, most of those workers were Black. Out west, a large number were Mexican Americans.

Congress amended the act during the 1960s and '70s to cover most of these excluded workers, but their employers often flout the law anyway. Galvin reports in his forthcoming book, Alt-Labor and the New Politics of Workers' Rights, that the lowest-paid workers lost roughly $1.67 per hour—about 21% of their income—to wage theft from 2009 to 2019.

Yuri Callejas, a 40-year-old single mother, cleaned hotel rooms at a Fairfield Inn & Suites franchise in Pelham, Ala. Callejas complained to her boss that he was paying her only $9 an hour when she was hired at $10 an hour, according to a lawsuit filed in January 2020 in federal court. Though she said she was working more than 40 hours a week, she wasn't getting paid overtime, either, according to the complaint. Her boss refused to change her pay rate, the complaint said, so she quit. Her accounting of how much she was owed: $1,272.

Workers Centers like Adelante Alabama are essential but overstretched resources for workers who are victimized by employers. | via Adelante Alabama Facebook

With help from an attorney at Adelante Alabama Worker Center, Callejas sued the owner of the hotel, AUM Pelham LLC. The company denied that Callejas was hired at $10 an hour or that she worked overtime, but it agreed to a settlement. Company owner Rakesh Patel did not respond to requests for comment.

Callejas walked away with $2,500 in back wages and damages. But that didn't wipe away the memories of her struggle. "Every time I paid my bills," she recalled, "I never had enough money."

Isaac Guazo, an economic justice organizer for Adelante Alabama, said fewer workers have reported wage theft during the pandemic, but that doesn't mean it's happening less. "It's the opposite, actually," he said. "Workers will tolerate a lot more abuse right now because it's so hard to find another job and they need to pay rent."

Ruth Palacios and Arturo Xelo, a married couple from Mexico, work at their fruit stand in the Corona neighborhood of Queens, April 13, 2021. They worked seven days a week for months disinfecting COVID-19 patient rooms but weren't paid overtime. | Marshall Ritzel / AP

Ruth Palacios and Arturo Xelo, a married couple from Mexico, disinfected COVID-19 patient rooms at the Memorial Sloan Kettering Cancer Center in New York City. They worked seven days a week for months, Palacios said but weren't paid overtime. At the start of the pandemic, they earned the local minimum wage of $15 an hour, she said, but after a few months, their boss lowered their pay to $12.25, she said.

"The little guys have to speak up because people—the bosses—are taking advantage of their workers," Palacios said in a video call from her home in Queens.

Palacios, Xelo, and two of their former co-workers filed a federal lawsuit against the contractor that hired them, BMS Cat, in January. The company did not respond to requests for comment. In court records, it denied that it paid the cleaners less than the minimum wage or that it owed them overtime pay. The hospital did not respond to requests for comment, either.

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Danielle Wynne rang up customers at a Circle-K gas station in Brevard County, Fla., during shifts that started at 4:30 a.m. and ended in the early afternoon. Before and after clocking in, Wynne said, her manager made her work for free, according to a lawsuit she filed in federal court in February 2020. She counted cash in the register, brewed coffee, cleaned the store, set out condiments, and refilled the lottery machine — all while off the clock.

The unpaid work added up to about $1,250 in one year, according to the court filing. For someone earning $10 an hour, that's about three weeks of pay.

Wynne said in court records that she didn't complain at the time because she was scared of her "vindictive" boss.

Circle-K Stores denied the underpayment allegations in court filings, though it ended up settling the case for $2,500 in October. But data from the Labor Department shows that the company repeatedly takes wages from its employees, with few repercussions.

Federal investigators caught Circle-K stores underpaying employees 22 times since 2005, most recently in February 2020. The total: $54,069 taken from 120 employees. But the Labor Department only fined the company four times and ordered it to pay damages to employees in two cases. In six cases, the company didn't pay all the money it owed employees, known as back wages. The agency closed those cases anyway without further action. Circle-K Stores did not respond to multiple requests for comment.

Public Integrity found that Labor Department investigators are just as lenient with other repeat offenders.

The oilfield services company Halliburton illegally withheld $18.7 million from 1,050 employees, Labor Department records show, but staff investigators never ordered the company to pay cash damages on top of the back wages. The department fined Halliburton in only three of eight cases it brought against the company.

Halliburton declined to comment on the cases. But in a 2015 statement to Inside Energy, a spokesperson for the company said it had misclassified employees as exempt from overtime pay.

"The company re-classified the identified positions, and throughout this process, Halliburton has worked earnestly and cooperatively with the U.S. Department of Labor to equitably resolve this situation," wrote Susie McMichael, a public relations representative for Halliburton.

G4S Wackenhut and its subsidiaries, which provide security services to companies and courthouses, illegally denied nearly $3.3 million to 1,605 employees. Federal investigators never ordered the company to pay damages to employees and only issued a fine in nine of 47 cases, totaling less than $41,000. Though G4S Wackenhut later repaid employees in nearly all the cases, it didn't pay full back wages on two occasions, and the Labor Department closed those cases anyway.

Sabrina Rios, a spokeswoman for the company, said most of the money owed involved G4S subsidiaries that were under independent management. She added that the claims do not reflect the company's business practices and that some of the cases date back more than 22 years.

"The company worked with the DOL in order to investigate each case and made appropriate payments to the individuals totaling about $3.3 (million)," she wrote.

A Labor Department official said the agency orders companies to pay damages when appropriate, determined on a case-by-case basis. Fines are usually assessed when a company repeatedly, or willfully, breaks the law. The department tries to resolve cases administratively to avoid taking employers to court.

"The department exercises its prosecutorial discretion in determining whether to litigate specific cases, based upon careful consideration of our priorities, resources, and mission," Jessica Looman, principal deputy administrator for the agency's Wage and Hour Division, wrote in a statement.

Nancy Leppink, former head of the Wage and Hour Division during the Obama administration, said the agency doesn't have enough lawyers to take every employer to court when they don't pay up. Although the division hired 300 new investigators during her tenure, it had only about 787 to enforce wage theft laws as of February.

That's about one investigator per 182,000 employees covered by the Fair Labor Standards Act, far below the one investigator per 10,000 workers recommended by the United Nations' International Labour Organization.

Leppink, now commissioner of the Minnesota Department of Labor and Industry, said she pushed investigators to demand cash damages for workers in every possible federal case. For example, if an employer took $1,000 from an employee, the agency could demand that amount in back wages and an extra $1,000 in damages.

"If all you do is collect wages, why would a company bother complying until (an investigator) walks through the door?" she said.

While the percentage of cases with damages jumped during Leppink's tenure, it has never surpassed 15%, the data shows. The agency's decision about whether to pursue damages sometimes is dictated by the strength of the evidence, the urgency in getting workers their back wages, and the level of noncompliance by the employer, Leppink said—and sometimes simply by a lack of staff resources.

Last year, in response to the coronavirus pandemic, the Trump administration ordered federal investigators to stop seeking damages in most cases for workers. In April, the Biden administration reversed that decision, Looman said.

Lawyers who represent workers in wage theft cases say they often discourage clients from filing a complaint with the Labor Department because they rarely get paid damages or see quick results. The typical case took 108 days to investigate, according to the agency's data.

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At a 2015 hearing in Philadelphia, a law professor from Temple University told the City Council that employers stole wages from tens of thousands of Philadelphia workers every week. The professor, Jennifer Lee, was pointing to findings from a study by the university's Sheller Center for Social Justice.

"This tells us that wage theft is no accident," Lee told city lawmakers. "It's not a few bad apple employers or a few new businesses that don't understand the law, but rather a calculated approach by employers to maximize their profits on the backs of their workers."

The hearing helped launch a local wage-theft law that allows workers to get their money back more quickly than they would by filing a complaint with the state or federal government.

The ordinance, which went into effect in 2016, sets a 110-day limit for city staff to investigate and close a wage theft case. It also gives workers three years to file a complaint with the city, compared with the two-year statute of limitations under federal law. And the penalties are steep. The city can revoke or deny local permits and licenses to companies that steal wages.

Fidel Martinez stands at one of his former worksites in Minneapolis, April 18, 2021. Martinez worked for a demolition contractor in the fall of 2020, demolishing several Walgreens stores and other structures. Martinez said the contractor owed him and his co-workers more than $20,000. His boss kept telling him the money was coming, but he would get his paychecks weeks late, and many of them he didn't get at all. | John Minchillo / AP

Legal experts and community groups point to strong local wage theft laws as an effective way to get around lax enforcement at the federal level and in some states. Chicago passed such a law in 2013. Minneapolis followed in 2019.

But other workers' rights advocates want to see federal reforms, considering that the Labor Department protects the largest number of workers. They want Congress to boost funding to the Wage and Hour Division so it can double the number of investigators, hire more attorneys, and take on additional wage theft cases. They also want lawmakers to extend the federal statute of limitations beyond two years.

Leppink, the Minnesota labor commissioner, said the federal government could revoke franchise licenses and federal contracts from companies with a history of wage theft.

At the very least, the Wage and Hour Division can order employers to pay damages in every possible case, said Jennifer Marion, a former policy adviser with the division.

"If you know you are likely to pay double than what you owed," she said, "that changes everything."

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