Labor and Jobs

More stories

  • 75 Shares189 Views

    in Economy

    Can Progress on Diversity Be Union-Made?

    by

    Staring at the wall of glass clawing its way up the unfinished facade of the Winthrop Center in downtown Boston — 53 floors of commercial and residential space soaring 690 feet — Travis Watson isn’t interested in the grandeur of the thing. He wants to know who’s working on it.“It doesn’t pass the eye test,” he scoffs: In a city whose non-Hispanic white population has dwindled to 45 percent, it’s hard to see Black and brown faces on the site.He has more than his eyesight to go by. In 2018, Mayor Martin J. Walsh — now President Biden’s labor secretary — appointed Mr. Watson to lead the Boston Employment Commission, the body created to monitor compliance with the Boston Residents Jobs Policy. The policy mandates giving a minimum share of work to city residents, women and people of color on large private construction projects and those that are publicly funded.The latest version of the ordinance, from 2017, requires that Asian, Black and Latino workers get at least 40 percent of the work hours on sanctioned projects to better reflect the city’s demographics. (It also mandates that 51 percent of the hours go to city residents and 12 percent to women.) Mr. Watson complains that while many projects fail to meet the benchmarks, nobody is penalized.When the commission reviewed the Winthrop Center project in mid-September, when it was roughly halfway done, only 32 percent of the hours worked had gone to people of color. Other downtown projects have similar shortfalls. In September, even a project to renovate City Hall — the building where the targets were written and the Employment Commission meets — was shy of the mark.“We should be going higher,” Mr. Watson said. “This is a floor.”Boston is one of the nation’s most solidly Democratic cities. It just elected Michelle Wu, an outspoken progressive, as mayor by a resounding margin. She campaigned heavily on a promise to expand opportunities for minority businesses and to empower workers and communities of color with the sort of policy proposals that led to the creation of the Employment Commission — proposals aimed at ensuring that lucrative opportunities are fairly distributed. But the projects underway in Boston show how much harder it is to deliver on goals of racial equity than to set them.In Boston and beyond, building is one of the last American industries offering good jobs to workers without a college degree. The prospect of trillions of dollars of new federal funding for infrastructure projects under Mr. Biden’s Build Back Better program is raising hopes that roads, bridges, railways, wind farms, electric grids and water mains could provide millions of good construction jobs for a generation or more.What infuriates Mr. Watson is that, as he views it, unions for the building trades are the main impediment keeping people of color from building sites. He recalls one of his appearances before Boston’s City Council: “A councilor got up to say this is a union city,” he said. “For me, he was saying this is a white city, a city for white workers.”This tension has opened an uncomfortable rift between elements of the nation’s traditional Democratic coalition. Prominent advocates of racial equity push for Black and Hispanic contractors, whose operations are often small and nonunion but hire a lot of workers of color.Unions push back against the charges, sometimes forcefully, arguing that the growing number of apprentices of color indicates an embrace of diversity. In the first three months of this year, for example, nearly 30 percent of apprentices across the building trades in Massachusetts were nonwhite, up from 24 percent six years earlier.The unions also contend that nonunion contractors and their allies are cynically using a discussion of racial diversity to exploit workers.“The most vocal critics of our vigorous, intentional and ongoing efforts to improve our diversity, equity, and inclusion practices are often directly employed, funded, or formally aligned with nonunion special interest groups,” Renee Dozier, business agent of a Boston area local of the International Brotherhood of Electrical Workers, said in a statement. Many critics, she added, “have a direct profit motive to see wage and safety conditions watered down in one of America’s most dangerous industries, construction.”Mr. Watson shrugs off such criticism.The 38-year-old son of a white mother and a Black father, a graduate of Brandeis University with a major in African and African American studies, Mr. Watson is a former community organizer in the predominantly Black neighborhood of Roxbury and North Dorchester, south of downtown.He is employed as a director of racial equity and community engagement at the Massachusetts Housing Investment Corporation, a nonprofit group that offers financing for affordable housing and other community projects.He is deeply frustrated by what he views as the naked discrimination barring Black and Latino workers from the high-paying construction jobs that offer a path into the middle class. He is exasperated that unions generally won’t disclose the racial and ethnic mix of the workers in their halls — aside from apprentices, which they are obliged to report — and suggests that it is because the numbers would show their lack of diversity.He also grew frustrated by the inability of the Employment Commission to do anything about all this. As the law stands, he noted, contractors must only go through the motions to prove they are making an honest effort to comply.By last month, he had had enough. He resigned.Travis Watson, who resigned as the head of the Boston Employment Commission, views unions as the primary obstacle keeping people of color from building sites.The Pipeline IssueUnions for the building trades — laborers and electricians, plumbers and metalworkers — are largely to thank for ensuring that construction work is a middle-class job. The unions have bargained successfully for decent wages, and for health and pension benefits. They train workers and monitor safety conditions on building sites.Gatekeeping is also one of their functions, particularly in a union-friendly city like Boston. Unions run apprenticeships, which confer and certify the requisite skills, controlling the pipeline of workers into the profession.Who gets a job at downtown projects like the Winthrop Center or the City Hall renovation, where large unionized contractors and subcontractors do a vast majority of the work, is often decided in the union hall, which handles calls from contractors and makes assignments from a list of out-of-work journeymen and women.City data suggests that workers of color got 38 percent of the hours on projects subject to the ordinance last year. This year, between April and September, the share actually hit the target of 40 percent, it said. But there’s a stark difference in the jobs that whites and nonwhites get: Minority workers in 2020 did 76 percent of the work removing asbestos, where the mandated base wage set for projects like the City Hall renovation is usually around $40 an hour. By contrast, they got only 22 percent of the plumber hours, which pay around $60.“The pipeline issue is a real one, and I do think there’s a lack of diversity in the pipeline,” said Celina Barrios-Millner, the chief of equity and inclusion in Boston’s departing city government. “Any time you see outcomes that are so skewed, you have to understand there is discrimination somewhere down the line.”Some union officials acknowledge the issue. When the City Hall project came up for discussion at the Boston Employment Commission in May, Commissioner Charles Cofield, an organizer for the North Atlantic States Regional Council of Carpenters, which covers New York and New England, argued that “the main part of the pressure needs to go to the people supplying the manpower.” That means the business agents at the union locals.Elmer Castillo, an immigrant from Honduras who rose to be vice president of Local 723 of the carpenters’ union for a couple of years, has long experience with the ways of the building trades unions. “Unions are good if you know how to work with them,” he said. But equality of opportunity between white and minority workers? Mr. Castillo says, “That doesn’t exist.”Workers are supposed to be selected for a job based largely on how long they’ve been unemployed. But nepotism rules in the union hall, Mr. Castillo contends. Business agents trade favors with contractors. They will place their sons, cousins and nephews in the good jobs, and they will make sure that those sons, cousins and nephews follow them up the union ranks.“This builds a chain that never ends, a chain of whites,” Mr. Castillo said. “One will never have the opportunity to achieve what they achieve.”Craig Ransom, now the business manager at Local 346 of the carpenters’ union, offers his career as an example of the glass ceiling Black workers face. After rising to business manager at Local 723, he got stuck — blocked from what he says would be his natural progression to regional manager. “Unions are good for people that look like me,” Mr. Ransom said. “But at the very top level, there is no one that looks like me.”The conflict between white insiders and Black or Hispanic outsiders clamoring for an opportunity has bedeviled unions since the dawn of the labor movement. Even after the Civil Rights Act of 1964 ended officially sanctioned discrimination, race often trumped class solidarity. Many unions discriminated against workers of color, and many employers turned to workers of color to cross union picket lines.A few years later, President Richard M. Nixon leaned into the conflict between unions and African Americans, embracing the so-called Philadelphia Plan, which required federal contractors to prove they were hiring minority workers to match the ethnic composition of the area where work was being done. It would create “a political dilemma for the labor union leaders and civil rights groups,” said John Ehrlichman, a Nixon adviser, driving a wedge between two pillars of Democratic politics.“Unions are good for people that look like me,” said Craig Ransom, the business manager at Local 346 of the carpenters’ union. “But at the very top level, there is no one that looks like me.”Labor unions have come a long way since then. One reason is that far more workers of color are in the labor force, and many unions want to organize them, including the Service Employees International Union and UNITE HERE, which covers leisure and hospitality workers.The other reason is that organized labor doesn’t have the clout it once had. “The old bastions of exclusion with strong seniority systems that favored white workers have been decimated,” said Nelson Lichtenstein, a historian of labor at the University of California, Santa Barbara.In the fiscal year that ended Sept. 30, the Equal Employment Opportunity Commission reported fewer than 100 racial-discrimination complaints against unions, about one-third the number brought a decade before. “They don’t have the power they used to have in being involved in hiring,” said Gwendolyn Young Reams, the commission’s acting general counsel.Unions in the building trades remain something of an exception. They are strong, compared with other unions, and retain control over training and hiring, especially in public projects and the large, more heavily regulated construction in union-friendly urban areas. Nearly 13 percent of construction workers are unionized, about double the overall rate across private industries.‘Driving the Ship’Maven Construction is not a union contractor. It is an open shop, meaning it has not signed a deal to employ only union workers. Its founder and chief executive, JocCole Burton, a Black woman, knows that limits the kind of work she can do. But she also understands the cost of signing up with the unions.“Every single college or university in the region, every hospital and all public work requires union labor,” said Ms. Burton, who founded Maven in Atlanta and moved it to Boston four years ago. “Anything that is downtown and most work in the Boston metro is going to require union labor.”The exception is affordable-housing projects, which bring in nonunion contractors to keep costs down, Ms. Burton said. Still, open-shop contractors are mostly limited to smaller projects. “The largest project we’ve done is $35 million,” she said, with jobs worth $5 million to $10 million more typical.She is seeking to make Maven a “signatory” contractor, to have a shot at more lucrative work. But the arrangement is expensive: The benefits and other obligations add up, and they are hard to afford if you don’t have a steady stream of big projects.More problematic for Ms. Burton is that she expects unions to provide few workers of color. “The unions are in the business of making sure that the union halls get all the work, but they don’t have enough Black and brown bodies in their halls,” she said.Ms. Burton says she is shocked by what she sees as overt discrimination in such a liberal city. “The racism experienced 50 years ago in Atlanta is the same we see in Boston today,” she said. “It’s subtle — not as overt — but it is the same.” A crucial problem, she argues, “is the unions are driving the ship when it comes to equity.”Union officials contend that much of the criticism is unfair. A report from Local 103 of the International Brotherhood of Electrical Workers noted that while people of color made up only 4 percent of retired electricians drawing a pension in the last five years, they accounted for almost 30 percent of their apprentices, a testament to how much it has evolved.“There is no denying that unions in many industries, including construction, just like corporations in many industries, have a troubling past when it comes to diversity, equity and inclusion,” said Ms. Dozier, the business agent for Local 103. “But we are doing more every day to increase the diversity of our membership than almost any other industry — and frankly, it is unethical of the nonunion lobbyists and their mouthpieces to try and turn that important work into an excuse to further their own exploitative practices.”The site of the City Hall renovation project. In Boston and beyond, building is one of the last American industries offering good jobs to workers without a college degree. Mark Erlich, who retired in 2017 as executive secretary-treasurer of the New England Regional Council of Carpenters and is now a research fellow with the Labor and Worklife Program at Harvard Law School, argues that construction unions have become more welcoming to nonwhites in the last few decades.Mr. Erlich is one of the authors of a book addressing the history of racial exclusion in the building trades. He notes that the original Boston Residents Jobs Policy in 1983 came out of the fight by Black workers for jobs on building sites. But it had to include residents and women to gain white political support and overcome the opposition of union leadership.“There is a legacy of racism, which by no means has been eliminated,” Mr. Erlich said. “I respect folks in the community that complain that things are not changing fast enough. And they are not changing fast enough.” Still, he argues, unions realize that “they need to become less homogeneous and reflect the demographics of the city.”And he warns that the nonunion contractors that will hire workers of color do not generally provide training or a career path, as unions do. The work is often more dangerous, he says, and it pays nothing like the wages in union shops.The Limits of PatienceWorkers of color who make it into the unions acknowledge the opportunities that membership provides. On a sunny October afternoon in Dorchester, a roomful of apprentices and journeymen and women, assembled by Local 103 to talk to a reporter, lauded the union’s efforts to broaden its ranks and called for patience.“Diversity doesn’t happen overnight,” said Sam Quaratiello, a recent graduate of the apprenticeship program who is of Asian descent. Walter Cowhan, a Black journeyman, argued that the union had become far more diverse in his 20 years of experience. Still, he said, if workers of color are to become more prominent on job sites, training is essential. “If you don’t prepare the work force, directly bringing in Black and brown workers could undermine the whole process,” he said.But among some of those pushing for racial equity, patience is wearing thin. Mr. Watson offered the words of the Black author and activist James Baldwin: “You’ve always told me it takes time,” Mr. Baldwin said in the 1989 documentary “The Price of a Ticket.” “How much time do you want, for your progress?”The building unions are “huge obstacles” to that progress, said Angela Williams-Mitchell, who heads the Boston Jobs Coalition, a community organization dedicated to increasing opportunities for people of color. “They do not open their doors to create access for communities that have historically been excluded.”If they are so committed to diversity, she says, why do unions refuse to provide data on the share of minority journeymen and women, even as they disclose the racial and ethnic breakdown of apprentices? “Break it down for us so we know what needs to be done,” she urges.Unions remain essential to maintain construction’s track record of lifting workers up, Mr. Erlich says. He recalls one of Mr. Watson’s heroes, the late Chuck Turner, a community activist who fought to increase Black employment in the building trades. “He was the ultimate radical — his attitude was, let’s drive the unions into the sea,” Mr. Erlich said. “But he came around to the position that without unions, construction would become a low-wage job.”Mr. Watson, in fact, agrees. “Unions are great,” he said. “But they have to give us an opportunity.” More

  • 125 Shares99 Views

    in Economy

    Labor force participation is static, a conundrum for the Fed.

    by

    Millions of employees remain on the job market’s sidelines and are only slowly trickling back — posing a serious challenge for the Federal Reserve as its policymakers try to assess how far the United States economy remains from their full employment goal.The labor force participation rate, a measure of how many people work or are actively looking for jobs, has been holding steady for months at 61.6 percent, down 1.7 percentage points from its February 2020 level.Participation of people in their prime working years is ticking up gradually, rising to 81.7 percent in October from 81.6 percent in September, but that too remains depressed compared with the rate before the pandemic. In February 2020, 82.9 percent of those 25 to 54 years old were in the labor force.Prime-age labor force participation improved slightly.Share of those ages 25 to 54 who are in the labor force (employed, unemployed but looking for work or on temporary layoff) More

  • 125 Shares149 Views

    in Economy

    Workers' Pay Is in a Tug of War With Inflation

    by

    American workers are taking home bigger paychecks as employers pay up to attract and retain employees. But those same people are shelling out more for furniture, food and many other goods and services these days.It is not yet clear which side of that equation — higher pay or higher prices — is going to win out, but the answer could matter enormously for the Federal Reserve and the White House.There are a few ways this moment could evolve. Wage growth could remain strong, driven by a tight labor market, and overall inflation could simmer down as supply chain snarls unravel and a surge in demand for goods eases. That would benefit workers.But troubling outcomes are also possible, and high on the list of worries is what economists call a “wage-price spiral.” Employees could begin to demand higher pay because they need to keep up with a rising cost of living, and companies may pass those labor costs on to their customers, kicking off a vicious cycle. That could make today’s quick inflation last longer than policymakers expect.The stakes are high. What happens with wages will matter to families, businesses and central bankers — and the path ahead is far from certain.“It’s the several-trillion-dollar question,” said Nick Bunker, director of research for the hiring site Indeed.Inflation-Adjusted Wages and SalariesOver the past five years, wages are up sharply in leisure and hospitality even after adjusting for inflation. During the pandemic, total private wage growth has struggled to keep up with prices.

    .dw-chart-subhed {
    line-height: 1;
    margin-bottom: 6px;
    font-family: nyt-franklin;
    color: #121212;
    font-size: 15px;
    font-weight: 700;
    }

    Cumulative Change in Employment Cost Index Wages and Salaries From 2016
    Note: Adjusted for inflation using the Consumer Price Index.Source: Bureau of Labor StatisticsBen Casselman and Jeanna SmialekFor now, wage growth is rapid — just not fast enough to keep up with prices. One way to measure the dynamic is through the Employment Cost Index, which is reported by the Labor Department every quarter. In the year through September, the index’s measure of wages and salaries jumped by 4.2 percent. But an inflation gauge that tracks consumer prices rose by 5.4 percent over the same period.A different measure of pay, an index that tracks hourly earnings, did rise faster than inflation in August and September after lagging it for much of the year.And an update to that gauge, set for release in the jobs report on Friday, is expected to show that wages climbed 0.4 percent in October, which is roughly in line with recent monthly price increases. But the data on hourly earnings have been distorted by the pandemic, because low-wage workers who left the job market early in 2020 are now trickling back in, jerking the average around.The upshot is that the tug of war between price increases and pay increases has yet to decisively swing in workers’ favor.Whether wage gains eventually eclipse inflation — and why — will be crucial for economic policymakers. Central bankers celebrate rising wages when they come from productivity increases and strong labor markets, but would worry if wages and inflation seemed to be egging each other upward.The Federal Reserve is “watching carefully,” for a troubling increase in wages, its chair, Jerome H. Powell, said on Wednesday, though he noted that the central bank did not see such a trend shaping up.Recruiters do report some early signs that inflation is factoring into pay decisions. Bill Kasko, president of Frontline Source Group, a job placement and staffing firm in Dallas, said that as gas prices in particular rise, employees are demanding either higher pay or work-from-home options to offset their increased commuting costs.“It becomes a topic of discussion in negotiations for salary,” Mr. Kasko said.But for the most part, today’s wage gains are tied to a different economic trend: red-hot demand for workers. Job openings are high, but many would-be employees remain on the labor market’s sidelines, either because they have chosen to retire early or because child care issues, virus concerns or other considerations have dissuaded them from working.Emily Longsworth Nixon, 27 and from Dallas, is one of Mr. Kasko’s employees. She tried to recruit a woman to an executive assistant position at a technology company that would have given her a $30,000 raise — and saw the candidate walk away for a counter offer of no additional pay but three work-from-home days each week.Understand the Supply Chain CrisisCard 1 of 5Covid’s impact on the supply chain continues. More

  • 88 Shares159 Views

    in Economy

    U.S. Economy Added 531,000 Jobs in October

    by

    The American economy added 531,000 jobs in October, the Labor Department said Friday, a sharp rebound from the prior month and a sign that employers are feeling more optimistic as the latest coronavirus surge eases.Economists polled by Bloomberg had been looking for a gain of 450,000 jobs. The unemployment rate declined to 4.6 percent, from 4.8 percent.The October gain was an improvement from the 312,000 positions added in September — a number that was revised upward on Friday.Hiring has seesawed this year along with the pandemic, especially in vulnerable sectors like hospitality and retail, where workers must deal face to face with customers. White-collar employees have fared better, since many can work remotely.Some employers are complaining of a shortage of workers, as many people remain on the sidelines of the job market. The labor force participation rate — the share of the working-age population employed or looking for a job — was flat in October.In theory, the demand for workers should be drawing more people into the labor force, but the participation rate is nearly two percentage points below where it was before the pandemic. Early retirements have been a factor.A federal supplement to unemployment benefits expired in early September, and experts are watching whether the end of that assistance — and a depletion of savings accumulated from other emergency programs — increases the availability of workers.So far, those effects have been muted, as health concerns and child care challenges have continued to affect many families. At the same time, the labor shortage has given workers a measure of leverage they’ve not experienced in recent years.“For the last 25, maybe 30 years, labor has been on its back heels and losing its share of the economic pie,” said Mark Zandi, the chief economist at Moody’s Analytics. “But that dynamic is now shifting.”Supply chain problems are another headache for employers. Automobile manufacturers have been particularly hurt by a shortage of semiconductors, while many companies are dealing with rising prices for raw materials and transportation.The Commerce Department reported last week that the economy grew by 0.5 percent in the third quarter, compared with 1.6 percent in the second quarter. Economists attributed the slowdown to the resurgent pandemic and the supply chain holdups.Still, there are reasons to be optimistic. The Federal Reserve said Wednesday that it would begin winding down the large-scale bond purchases that have been underway since the pandemic struck, signaling that it considers the economy healthy enough to be weaned from the extra stimulus.“The labor market is tight,” said Scott Anderson, chief economist at Bank of the West in San Francisco. “Consumers are in good shape, and the willingness to spend is certainly there.” More

  • 113 Shares189 Views

    in Economy

    Federal Reserve Announces Plan to Slow Bond Buying Program

    by

    The Federal Reserve is dealing with high inflation at a time when millions of workers remain on the job market’s sidelines. Wednesday’s announcement that it will slow bond purchases is a step toward more normal monetary policy.Jerome H. Powell, the Federal Reserve chair, laid out a plan to slow the asset-buying program as the economy continued to heal from pandemic disruptions and inflation remained sharply elevated.Sarahbeth Maney/The New York TimesThe Federal Reserve on Wednesday took its first step toward withdrawing support for the American economy, saying that it would begin to wind down a stimulus program that’s been in place since early in the pandemic as the economy heals and prices climb at an uncomfortably rapid pace.Central bank policymakers struck a slightly more wary tone about inflation, which has jumped this year amid booming consumer demand for goods and supply snarls. While officials still expect quick cost increases to fade, how quickly that will happen is unclear.Fed officials want to be prepared for any outcome at a time when the economy’s trajectory is marked by grave uncertainty. They are not sure when prices will begin to calm down, to what extent the labor market will recover the millions of jobs still missing after last year’s economic slump, or when they will begin to raise interest rates — which remain at rock-bottom to keep borrowing and spending cheap and easy.So the central bank’s decision to dial back its other policy tool, large-scale bond purchases that keep money flowing through financial markets, was meant to give the Fed flexibility it might need to react to a shifting situation. Officials on Wednesday laid out a plan to slow their $120 billion in monthly Treasury bond and mortgage-backed security purchases by $15 billion a month starting in November. The purchases can lower long term interest rates and prod investors into investments that would spur growth.Assuming that pace holds, the bond buying would stop altogether around the time of the central bank’s meeting next June — potentially putting the Fed in a position to lift interest rates by the middle of next year.The Fed is not yet saying that higher rates, a powerful tool that can swiftly slow demand and work to offset inflation, are imminent. Policymakers would prefer to leave them low for some time to allow the labor market to heal as much as possible.But the move announced on Wednesday will leave them more nimble to react if inflation remains sharply elevated into 2022 instead of beginning to moderate. Many officials would not want to lift interest rates while they are still buying bonds, because doing so would mean that one tool was stoking the economy while the other was restraining it.“We think we can be patient,” Jerome H. Powell, the Fed’s chair, said of the path ahead for interest rates. “If a response is called for, we will not hesitate.”Congress has given the Fed two jobs: achieving and maintaining stable prices and maximum employment.Those are tricky tasks in 2021. Twenty months into the global coronavirus pandemic, inflation has shot higher, with prices climbing 4.4 percent in the year through September. That is well above the 2 percent price gains the Fed aims for on average over time.At the same time, far fewer people are working than did before the pandemic. About five million jobs are missing compared to February 2020. But that shortfall is hard to interpret, because businesses across the country are struggling to fill open positions and wages are quickly rising, hallmarks of a strong job market.For now, the Fed is betting that inflation will fade and the labor market will lure back workers, who might be lingering on the sidelines to avoid catching the coronavirus or because they have child care or other issues that are keeping them at home.“There’s room for a whole lot of humility here,” Mr. Powell said, explaining that it was hard to assess how quickly the employment rate might recover. “It’s a complicated situation.”Officials have already been surprised this year by how much inflation has surged and how long that pop has lasted. They had expected some run-up in prices as the cost of dining out and air travel bounced back from pandemic-lockdown lows, but the severity of the supply chain disruptions and the continued strength of consumer demand has caught Fed officials and many economists by surprise.In their November policy statement, Fed officials predicted that this burst of inflation would fade, but they toned down their confidence on that view. They said previously that factors causing elevated inflation were transitory, but they updated that language on Wednesday to say that the drivers were “expected to be” transitory, acknowledging growing uncertainty.“Supply and demand imbalances related to the pandemic and the reopening of the economy have contributed to sizable price increases in some sectors,” the statement added.The Fed is willing to tolerate a temporary bout of quick inflation as the economy reopens from the pandemic, but if consumers and businesses come to expect persistently higher prices, that could spell trouble. High and erratic inflation that persists would make it hard for businesses to plan and might eat away at wage increases for workers who lack bargaining power.“We have to be aware of the risks — particularly now the risk of significantly higher inflation,” Mr. Powell said. “And we have to be in position to address that risk should it create a threat of more-persistent, longer-term inflation.”Understand the Supply Chain CrisisCard 1 of 5Covid’s impact on the supply chain continues. More

  • 138 Shares179 Views

    in Economy

    John Deere Says Contract That Workers Rejected Was Its Final Offer

    by

    One day after workers at the agriculture equipment maker Deere & Company voted down a second contract proposal, the company said Wednesday that the proposal was its best and final offer and that it had no plans to resume bargaining.The rejection of the contract by roughly 10,000 workers extended a strike that began in mid-October, after workers based primarily in Iowa and Illinois voted down an earlier agreement negotiated by the United Automobile Workers union.The company confirmed its position in an email after it was reported by Bloomberg. A U.A.W. spokesman said only that the union’s negotiating team was continuing “to discuss next steps.”Marc A. Howze, a senior Deere official, said in a statement Tuesday night that the agreement would have included an investment of “an additional $3.5 billion in our employees, and by extension, our communities.”“With the rejection of the agreement covering our Midwest facilities, we will execute the next phase of our Customer Service Continuation Plan,” the statement continued, alluding to Deere’s use of salaried employees to run facilities where workers are striking.Many workers had complained that wage increases and retirement benefits included in the initial proposal were too weak given that the company — known for its distinctive green-and-yellow John Deere products — was on pace for a record of nearly $6 billion in annual profits.According to a summary produced by the union, wage increases under the more recent proposal would have been 10 percent this year and 5 percent in the third and fifth years. During each of the even years of the six-year contract, employees would have received lump-sum payments equivalent to 3 percent of their annual pay.That was up from earlier proposed wage increases of 5 or 6 percent this year, depending on a worker’s labor grade, and 3 percent in 2023 and 2025.The more recent proposal also included traditional pension benefits for future employees and a post-retirement health care fund seeded by $2,000 per year of service, neither of which were included in the initial agreement.Chris Laursen, a worker at a John Deere plant in Ottumwa, Iowa, who was president of his local there until recently, said he voted in favor of the new agreement after voting to reject the previous one.“We have the support of the community, we have the support of workers all around the country,” Mr. Laursen said. “If we turned down a 20 percent increase over a six-year period, substantial gains to our pension plan, I’m afraid we would lose that.”But Mr. Laursen said he still had concerns about the vagueness of the company’s commitment to improving its worker incentive plan, and such concerns appeared to weigh on his co-workers, 55 percent of whom voted to reject the newer contract.Another Iowa-based worker, Matt Pickrell, said that some co-workers skeptical of the second proposal had expressed a desire for a larger initial increase than the 10 percent the company offered.Mr. Pickrell said that he, too, had opposed the initial agreement but had voted in favor of the more recent one because of the improvements in retirement benefits.Larry Cohen, a former president of the Communications Workers of America, said the second “no” vote could indicate that members felt that the strike was working and that further gains were possible, despite the company’s declaration that it was finished bargaining.“They’re saying what they believe — their feelings are hurt,” Mr. Cohen said of Deere. “But what are they going to do about it? They’re not going to get the workers back.”Mr. Cohen said that Deere employees were among the relatively rare group of workers in the United States able to bargain on a companywide scale and that that, along with their stature in the communities where plants are situated, gave them considerable leverage.The work stoppage at Deere was part of an uptick in strikes around the country last month that also included more than 1,000 workers at Kellogg and more than 2,000 hospital workers in upstate New York.Overall, more than 25,000 workers walked off the job in October, versus an average of about 10,000 in each of the previous three months, according to data collected by researchers at Cornell University. More

  • 150 Shares99 Views

    in Economy

    Fed Expected to Announce Plan to Slow Bond Buying Amid Rapid Inflation

    by

    The Federal Reserve is expected to announce a plan to taper off its bond buying. With inflation surging, economists’ eyes are already turning to rates.Jerome H. Powell, the Federal Reserve chair, is on the cusp of accomplishing something that would have seemed like a victory a year ago: Central bankers are expected to announce a plan to wean the economy off their asset-buying program on Wednesday without roiling markets, a delicate maneuver that was in no way assured.Instead, Mr. Powell and his colleagues face pressing questions about their next steps.Inflation is running at its fastest pace in roughly three decades, and hopes that the jump in prices will quickly fade have dimmed as supply chain snarls deepen and fuel costs rise. Wages are increasing swiftly, and consumers and businesses are coming to expect faster price increases, pumping up the risk that high inflation will become a fixture as employers and workers adjust their behavior.Though the Fed is expected to announce this week that it will slow the $120 billion in asset purchases it has been carrying out each month to support the economy, Wall Street economists have already turned their attention to how worried the central bank is about brisk inflation and whether — and when — it might start raising interest rates in response.“The question in the mind of the market is 100 percent what comes next,” said Roberto Perli, a former Fed economist who is now head of global policy at Cornerstone Macro.Slowing bond buying could lead to slightly higher long-term borrowing costs and take pressure off the economy at the margin. But raising interest rates would likely have a more powerful effect when it comes to cooling off the economy. A higher federal funds rate would cause the cost of buying a car, a house or a piece of equipment to rise and would slow consumer and business demand. That could tamp down price gains by allowing supply to catch up to spending, but it would slow growth and weigh on hiring in the process.The Fed has signaled that bond buying could wrap up completely by the middle of next year. Economists increasingly expect the Fed to move its policy rate up from near-zero, where it has been since March 2020, as soon as next summer.Goldman Sachs economists now expect a rate increase to come in July 2022, a full year earlier than they had previously anticipated. Deutsche Bank recently pulled its forecast forward to December 2022. Investors as a whole now put better than 50 percent odds on a rate increase by the Fed’s June 2022 meeting, based on a CME Group tool that tracks market pricing.But raising rates poses a risky trade-off for Fed policymakers. If inflation moderates as the economy gets back to normal and pandemic-related disruptions smooth out, higher borrowing costs could leave fewer people employed for little reason. And with a smaller number of paychecks going out each month, demand would likely weaken over the longer run, which could drag inflation back to the uncomfortably low levels that prevailed before the start of the pandemic.“The risk is not really about the Fed beginning its rate hikes behind the curve,” said Skanda Amarnath, executive director of Employ America, a group focused on encouraging policies that help the work force. “The risk is that the Fed overreacts to this.”That markets are penciling in rate increases more quickly could suggest that they are optimistic about the economy’s chances, said Neil Dutta, head of U.S. economics at Renaissance Macro. The Fed has said that before lifting rates, it wants to see the economy return to full employment and inflation that exceeds its 2 percent target and is on track to average it over time. Investors might think those targets will be met by the middle of next year.“If it was a problem, why aren’t stocks falling?” Mr. Dutta said of the earlier rate increase expectations. “The economy has done better than anticipated.”Still, millions of jobs remain missing from the labor market, and employment growth has slowed sharply. Payrolls expanded by just 194,000 jobs in September, and while fresh hiring data due on Friday is expected to show that companies added 450,000 workers in October, the trajectory is anything but certain.If workers take a long time to come back to the job market, either because they lack child care or fear contracting the coronavirus, it could be the case that the Fed finds itself in a conundrum where inflation is high but full employment remains elusive. Mr. Powell has signaled that such a situation, in which the Fed’s goals are in conflict, is a risk. But he has also said the economy is not there yet.The future of Jerome H. Powell as the Fed chair is being debated within the Biden administration, complicating the decision on rates.Stefani Reynolds for The New York Times“I do think it’s time to taper,” Mr. Powell said at a recent virtual conference. “I don’t think it’s time to raise rates.”Understand the Supply Chain CrisisCard 1 of 5Covid’s impact on the supply chain continues. More

  • 100 Shares159 Views

    in Economy

    How the Pandemic Has Added to Labor Unrest

    by

    While big companies wield considerable power, Covid’s economic disruption has given workers new leverage, contributing to a recent upturn in strikes.When 420 workers at the Heaven Hill spirits bottling plant near Louisville went on strike in September, they were frustrated that the company’s proposed contract could reduce their overtime pay. Many had earned extra income working seven days a week during the pandemic.“We were essential,” said Leslie Glazar, recording secretary of the local union representing spirits workers. “They kept preaching, ‘You get us through that, we’ll make it worth your time.’ But we went from heroes to zero.”The recent strike at Heaven Hill, which ended in late October after the company softened its overtime proposal, appears to reflect the current moment: Buoyed by shortages in labor and supplies that leave employers more vulnerable, and frustrated by what they see as unfair treatment during the pandemic, workers are standing up for a better deal.Data collected by the School of Industrial and Labor Relations at Cornell University shows the number of workers on strike increased in October, to more than 25,000, versus an average of around 10,000 in the previous three months.“Labor market leverage and the fact that workers have been through incredibly difficult working conditions over the past year and a half with the pandemic are combining to explain a lot of this labor activism now,” said Johnnie Kallas, a Ph.D. student and the project director of Cornell’s Labor Action Tracker.Large companies continue to have considerable power, and it is not clear that the recent job actions point to a new era of widespread strikes. Many workers who were nearing a strike appear to have pulled back from the brink, including 60,000 film and television production workers, whose strike threat was at least temporarily defused when their union reached tentative agreements with production studios. And even a doubling or tripling of strike activity would fall well below levels common in the 1960s and 70s.But the fitful economic recovery from the pandemic has eroded management’s advantages. Employers are having unusual difficulty in filling jobs — this summer, the Labor Department recorded the highest number of job openings since it began keeping such data in 2000. And for some companies, supply-chain disruptions have taken a toll on the bottom line.In a recent survey by IPC, a trade association representing the electronics industry, nine out of 10 manufacturers complained that the time it takes to make their goods had increased. Nearly one-third reported delays of eight weeks or more.Workers at Kellogg in Battle Creek, Mich., have been on strike since early October.Nicole Hester/The Grand Rapids Press, via Associated PressMany workers also contend that their employers have failed to share enormous pandemic-era profits, even as they sometimes risked their lives to make those earnings possible. Striking workers at John Deere, whose union announced a tentative agreement with the company over the weekend, have pointed out that Deere is on pace to set a record profit of nearly $6 billion this fiscal year even as it sought to end traditional pensions for new hires. The United Automobile Workers said a vote on the contract was expected this week.Workers say that when companies do offer raises, the increases are often limited and don’t make up for the weakening of benefits that they have endured for years.That helps explain why the upturn in labor action dates back to 2018, when tens of thousands of teachers walked off the job in states like West Virginia and Arizona, though the lockdowns and layoffs of the pandemic initially suppressed strike activity. With workers in both Democratic and Republican states feeling wronged, the strike impulse tends to transcend partisan divides.One increasingly common complaint is the so-called two-tier compensation structure, in which workers hired before a certain date may earn a higher wage or a traditional pension, while more recent hires have a lower maximum wage or receive most of their retirement benefits through a variable plan like a 401(k).Frustration with the two-tier system helped propel a six-week strike at General Motors in 2019, and has loomed over several strikes this year, including Kellogg and Deere. Deere workers hired after 1997 have much smaller traditional pensions.In some cases, workers have even grown skeptical of their union leadership, worrying that negotiators have become too remote from the concerns of the rank and file.This is particularly true at the United Automobile Workers, which has been wracked by a corruption scandal in which more than 15 people have been convicted, including two recent presidents. Some Deere workers cited discontent with their union’s leadership in explaining their vote against the initial contract the union had negotiated.It is also a feeling that some Hollywood crew members have expressed about negotiations handled by their union, the International Alliance of Theatrical Stage Employees. “They’re not bad people, they’re working in good faith,” said Victor P. Bouzi, a sound mixer and IATSE member based in Southern California. “But they’re not seeing what’s happening to people and how we’re getting squeezed down here.”The International Alliance of Theatrical Stage Employees prepared for a strike before negotiators reached tentative agreements with film and television studios.Jenna Schoenefeld for The New York TimesYet for every force pushing workers toward a strike, there are others that push in the other direction.Union leaders can be reluctant to strike after having negotiated a deal for workers. IATSE leaders are endorsing the tentative agreements they reached with the studios in October, and even those who oppose them believe it will be a long shot for the membership to vote them down.Matthew Loeb, the IATSE president, said that 36 locals were closely involved in developing the union’s bargaining objectives and that “our members demonstrated incredible union solidarity that stunned the employers and helped us to achieve our stated goals.”For their part, companies often pre-empt a labor action by improving compensation, something that appears to be happening as employers raise wages, though that is also to attract new workers. (It’s less clear if the wage increases are keeping up with inflation outside leisure and hospitality industries.)Manufacturing workers contemplating strikes may have jobs that are relatively sought-after in their cities and towns, making workers less keen to risk their jobs in the event of a strike, and potentially easier to fill than a quick glance at the number of local openings would suggest.And the mere act of striking can exert an enormous psychological and financial toll in an economy where workers have a limited safety net. When unionized workers receive strike pay, it’s typically a fraction of their usual pay, and they must often picket outside their workplace to receive it.Companies can use the legal system to place restrictions on them — as with Warrior Met Coal in Alabama, where about 1,000 workers represented by the United Mine Workers of America have been on strike for seven months. The company recently won a court order prohibiting picketing within 300 yards of entrances..css-1xzcza9{list-style-type:disc;padding-inline-start:1em;}.css-3btd0c{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-3btd0c{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-3btd0c strong{font-weight:600;}.css-3btd0c em{font-style:italic;}.css-1kpebx{margin:0 auto;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-family:nyt-cheltenham,georgia,’times new roman’,times,serif;font-weight:700;font-size:1.375rem;line-height:1.625rem;}@media (min-width:740px){#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-size:1.6875rem;line-height:1.875rem;}}@media (min-width:740px){.css-1kpebx{font-size:1.25rem;line-height:1.4375rem;}}.css-1gtxqqv{margin-bottom:0;}.css-1g3vlj0{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-1g3vlj0{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-1g3vlj0 strong{font-weight:600;}.css-1g3vlj0 em{font-style:italic;}.css-1g3vlj0{margin-bottom:0;margin-top:0.25rem;}.css-19zsuqr{display:block;margin-bottom:0.9375rem;}.css-12vbvwq{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;}@media (min-width:740px){.css-12vbvwq{padding:20px;width:100%;}}.css-12vbvwq:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-12vbvwq{border:none;padding:10px 0 0;border-top:2px solid #121212;}.css-12vbvwq[data-truncated] .css-rdoyk0{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-12vbvwq[data-truncated] .css-eb027h{max-height:300px;overflow:hidden;-webkit-transition:none;transition:none;}.css-12vbvwq[data-truncated] .css-5gimkt:after{content:’See more’;}.css-12vbvwq[data-truncated] .css-6mllg9{opacity:1;}.css-qjk116{margin:0 auto;overflow:hidden;}.css-qjk116 strong{font-weight:700;}.css-qjk116 em{font-style:italic;}.css-qjk116 a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;text-underline-offset:1px;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:visited{color:#326891;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:hover{-webkit-text-decoration:none;text-decoration:none;}As difficult as a strike can be when workers are unionized, it is far more difficult when they’re not. Nonunionized workers often find strikes harder to organize and harder to endure because of the lack of pay. They are typically more vulnerable to potentially unlawful responses by employers, which unions have the legal muscle to resist.It is perhaps no surprise that as the rate of union membership has fallen, so has the number of strikes. Until the early 1980s, the country typically saw more than 200 a year involving 1,000 or more workers, versus 25 in 2019, the highest in almost two decades. Far fewer than 20 began this year.Striking workers outside a John Deere plant near Des Moines. The company’s pension system has been an issue in the strike.Kelsey Kremer/The Des Moines Register, via Associated Press“The volume is quite minimal,” said Ruth Milkman, a sociologist of labor at the Graduate Center of the City University of New York. “That’s partly because only 6 percent of the private sector is organized.”The recent strike at Heaven Hill in Bardstown, Ky., illustrates the complicated calculus facing workers. An analysis by the employment site ZipRecruiter showed that when the strike vote was taken in September, job postings in the Louisville area had increased by almost twice the percentage they had nationwide during the pandemic.After the company threatened to bring in replacement workers, the employees were dismissive. “No one can find workers now — where do they think they’ll find 400?” Ms. Glazar, the local union official, said shortly before the strike ended. “That’s the only thing that keeps us smiling out there.”There were also indications that Heaven Hill was running low on inventory as the strike wore on, crimping the company’s ability to age and bottle alcohol that it produced in Louisville. “We could see the truck movement had slowed down from week one to week six — there were not near as many trucks in and out,” Ms. Glazar said.Josh Hafer, a company spokesman, said, “There may have been some small-scale products impacted, but not to any large degree.”Still, the workers were under enormous stress. Their health benefits ended when their contract expired, and some workers found their insurance was no longer valid while trying to squeeze in a final doctor’s appointment.And while jobs in the area appeared plentiful, many workers preferred to stay in the whiskey-making business. “I like what I do, I enjoy everything about bourbon,” said Austin Hinshaw, a worker who voted to strike at the Heaven Hill plant. “I have worked at a factory before, and it’s not my thing.” In late October, Mr. Hinshaw accepted a job at a distillery in town where he had been applying for months.A few days earlier, Heaven Hill management had worked out a new agreement with the union. The proposed contract included a commitment to largely maintain the existing overtime pay rules for current workers, though it left open the possibility that future workers would be scheduled on weekends at regular pay, which grated on union members. The company also offered a slightly larger pay increase than it had offered just before the workers’ contract expired in September.In a statement, Heaven Hill pointed to the generous health benefits and increased wages and vacation time in the new contract.The company’s proposal divided the members, many of whom wanted to keep fighting, but more than one-third voted in favor of the contract, the minimum needed to approve it and end the strike.“There are a lot of mixed emotions,” Ms. Glazar said. “Some of them are just disappointed. They thought that it would have been better.”Peter S. Goodman More