Showing posts with label wage theft. Show all posts
Showing posts with label wage theft. Show all posts

29 December 2014

Mandatory Benefits Enforce Slavery

Freelance work is becoming a big deal in the U.S. for several reasons.  One reason is that the currently very poor economy (yeah, they claim it is improving, but really it is only getting better for the wealthy but no one else) is still making it extremely difficult to find decent work.  Right, you heard on TV that unemployment is decreasing, but did they bother to mention that most of the new jobs are low paying jobs?  Did they even point out that wages are staying stagnant while inflation is still increasing?  A lot of Americans are finding that freelance work is easier to get than permanent employment.  That is not the big driver of freelancing though.  Over half of freelancers are doing it entirely voluntarily.  They have chosen freelance work over long term full-time work because they like being their own boss.  They like setting their own hours.  They like the ability to choose what work they will do and what work they will leave to someone else.  Many even like the fact that they do not have to work a full 40 hours a week to get by.  Freelancing comes with a cost though: No benefits.

Aside from social pressure, wage slavery is primarily driven by mandatory benefits.  I know many people who would like to start their own businesses, but they cannot, because they cannot afford private health insurance.  Other benefits are a problem as well, but health insurance is, by far, the biggest problem.  I even know a few people who have their own businesses and work a regular job for the health insurance.  Businesses, like Lowe's, that offer these benefits even to part-time employees are a great blessing to business owners who cannot afford private health insurance.  (Years ago I worked at a Lowe's store, and at least two other employees there owned their own businesses, but worked 10 hours a week at Lowe's for the health insurance package.)  This is a problem, because it discourages freelance work and the creation of new businesses.  For the most part, only independently wealthy people can really even afford to start their own business, and I am not just talking about businesses with really expensive startup costs.  I have several computers, I have access to all of the tools I needed, I have all of the necessary knowledge and training, but I still cannot afford to start a software company, because I am stuck spending nearly all of my time working for someone else.  Even most middle class employees are stuck in this situation.

What is the solution?  Get rid of mandatory benefits.  In fact, ideally, all non-monetary compensation should be prohibited.  Someone still has to take responsibility for health insurance, because costs are still too high.  Obamacare made health insurance mandatory, but it did not solve the underlying problem, which is that it just plain costs too much.  At this point, a single payer system seems like the best option, and the retirement of Medicare and Medicaid would go a very long way in funding it (actually, if you add all the costs of the multiple Obamacare failures, it might make up the difference).  Further though, if there was still a deficit, another side effect of this would cover that and then a whole lot more.  The single most abused benefit is stock options.  Eliminate those and tax revenues (especially from CEOs and such) would increase dramatically.

Taking the burden of health insurance off of employment would release millions of Americans from wage slavery.  Of course, they still have to work to survive, but they would have much more control over that work.  Without employer provided health insurance, more people would be motivated to start new businesses, and more people would be willing to work for those businesses.  More people would be able to go the freelance route.  In addition, one more awesome benefit of this is that more people would feel free to choose part-time work instead of feeling compelled to work full-time, making more jobs available for others.  More Americans would be free to choose their own paths than ever before.

Now, I am sure you are aware that I endorse a basic income in addition to this, and a basic income would free Americans to a degree never before seen in all of human history (accepted history, anyhow).  Even without a basic income though, eliminating all non-monetary benefits would go a long way to increasing freedom in the U.S..  Of course, if stock options were eliminated, the increase in tax revenue would likely cover a large chunk of the costs of the basic income.  I just wanted to point that out.

27 December 2014

Unions

I have a problem with unions.  It comes down to two things: Unions are too powerful and too easy to abuse.  Unions are currently absolutely necessary to take care of problems that the government refuses to treat fairly.

The recent Supreme Court ruling on a dispute between an Amazon contractor and its warehouse employees (which I have discussed in more detail in a previous post) illustrates the second part of my problem.  Without unions, many workers are just plain not treated fairly.  In the Amazon case, workers were being forced to go through excessively long security checks daily without pay for the time spent.  Our Supreme Court justices (whom I must assume are idiots, because the only other option is that they are deliberately helping to enslave and oppress innocent Americans, and I want to give them the benefit of the doubt) declared that businesses do not have to pay workers for time spent doing anything that is not, in essence, part of the job description.  At this point, this declaration now counts as an infallible part of U.S. law.  The government offers no protection for what amounts to blatant wage theft.  There is only one solution: unions.

Unions were originally created in response to government inability to enforce fair labor practices.  In the early U.S., it was common for employers to underpay workers and to require far more hours of work than is healthy or fair.  Unsafe work conditions were more common than safe ones by a very wide margin.  People were regularly inured or killed in workplace accidents that could have easily been prevented, because owners were too cheap to spend even small sums to ensure safety.  Children were treated as slaves, working 16 hours days in these conditions, for so little money that entire families had to work, and that was still not enough to get by.  The government was not powerful enough to do anything to stop these unfair practices, and in many cases, the government did not have enough reach to even be aware of them.  The solution was labor unions.

Workers in these conditions eventually banded together, demanding fair treatment.  Their employers refused the the demands and threatened to fire anyone who continued to dissent.  Eventually the workers realized that if all of them dissented at once, their employers would be unable to replace them all fast enough to avoid financial catastrophe.  The worker strike was born (it was actually born in France, but it was quickly adopted by oppressed U.S. workers).  Nearly all of the workers in one or more factories refused to continue work until conditions, hours, and wages were improved.  Employers were powerless against the unions because they were dependent on the employees.  Firing them all would result in financial ruin for the company.  Initially the government panicked: Worker's unions threatened the U.S. economy.  If workers had so much power, they could easily force businesses to pay so much that it would cause rampant inflation.  Besides that, even short strikes resulted in production halts, and in factories that produced necessities, those halts could result in serious harm.  This did something else very important though: It put the problem of workers right in the face of the government, where it could no longer be overlooked or ignored.

The government realized that treatment of workers was a major problem.  It also recognized its responsibility in doing something about it.  The government still did not have the power or reach to handle the problem on its own.  It did have the power to protect the workers in their own attempts to deal with the problem.  Business owners lobbied the government to make unions and worker strikes illegal.  Their claim was that these things caused economic instability.  Their claims seemed reasonable, however, the government eventually recognized that the underlying problem was not the strikes, but the unsustainable hours and pay, as well as the often deadly work conditions provided by employers.  Laws were passed to protect unions and striking workers from retaliation.  Currently, workers cannot be fired for discussing unionization, actually unionizing, or for striking.  Workers who are striking on economic grounds (wages, other compensation, or work hours) can be "permanently replaced" (they cannot be fired, but if a willing replacement can be found, the strikers hours can be reduced to 0 indefinitely, which is approximately the same as being laid off).  The government also created a set of safety and treatment requirements and guidelines for how employees may be treated.  Strikes related to these issues are further protected, prohibiting even permanent replacement.  When it comes to safety and other government protected employee rights, replacements hired during a strike must be fired to make room for striking employees returning to work once the dispute has been resolved.

The potential for abuse of unions was still clear, so some restrictions have been added.  Closed shops, where the company may only hire union members, was strictly prohibited.  Closed shops allow the union to control all hiring decisions by restricting admittance into the union.  This gives the union veto power over any hiring action.  In the U.S., closed shops are illegal.  Union shops, where new hires are required to join the union after being hired, are legal, as well as agency shops, where non-union members must still pay union dues, and open shops, where employees may choose but are not required to pay dues if they are not union members, are all legal in the U.S..  Prohibition of closed shops prevented the most obvious abuses of unions, but it still left some loopholes, most of which still exist.


When unions were originally created, they were necessary.  They were very useful, and they did a great deal of good.  Since then, many things have changed.  The biggest change is power and reach of the government.  Workplace safety is no longer a serious union issue, because OSHA, a government agency, defines and enforced workplace safety.  If a workplace is unsafe, it is faster and easier for an employee to report the violation to OSHA than it is for a union to try to resolve the issue, and the penalties for those violations are enforced by the government, making workplace safety violations fairly rare.  Wages are still a problem, but not because the government is not powerful enough to do anything about it.  They are a problem because the government refuses to do anything about it.  Worse, the most common places for wage issues are not well suited to unions, because employee turnover is too high.  In the past several decades, most union wage issues were not problems of employers paying unfair wages.  Most of the issues were greedy employees who were already being paid far higher than the U.S. average wanting more than their fair share (and, in the case of the U.S. steel industry, this was one of the blows that ultimately killed it).  Unions are no longer useful tools for enforcing fair wages.  Instead they are tools for overpaid employees to rip off their employers even more.

Work hours were another major thing that unions were good for.  Twelve to sixteen hour work days were common.  Unions pulled the U.S. work week down to 40 hours and the work day to 8, requiring extra pay for any time worked beyond that.  Of course, the goal was actually closer to 35 or 30 hours a week (20 according to some), but unions lost sight of that goal almost a century ago.  Unions are no longer necessary to enforce this though, because the government has enacted laws prohibiting employers from giving employees more than 8 hours of work in a day and 40 in a week, with an additional requirement that when this is violated, employees are paid extra for time beyond those limits.  This is no longer a union problem; it is now a government problem.  Worse, despite unions and government, the average American voluntarily works an average of 50 hours a week and often the overtime goes entirely unpaid.  When the workers don't care, there is little unions can do to fix the problem.

Overall, unions have lost most of their usefulness.  They still have potential for abuse though.  Unions have a great deal of lobbying power.  In Alaska, in the mid '90s I believe, the workers at some of the power plants went on strike.  I don't know all of the details, but I do know that the labor union exercised power that belongs only to government and individual citizens, by manipulating the state government in making some very harmful laws.  The power plants hired electrical workers from Washington state, as temporary workers until the strike was resolved.  In retaliation, the union lobbied the state government to change certification laws to require electrical workers in Alaska state to have gone through their training in-state.  In other words, a journeyman or master electrical worker in Washington state could only be hired as an apprentice in Alaska, without going through all of the time required for certification within the state of Alaska.  The union did this to put more pressure on the power company by denying them well qualified temporary workers (the law specifically prohibited hiring them into positions that normally required journeyman certification).  Besides being a low and very unethical blow, this has some severe economic implications.  I am certain the argument given to the legislature and governor was that hiring out-of-state workers would drain money from the state economy.  I don't think this justifies using the law to lie about a person's job qualifications, but besides that, this economic justification was incomplete.  The end result was that the workers got most of their demands.  The economic consequences of that was increased cost for power, which resulted in economically damaging inflation in a state where the cost of living is already quite high.  There may have been short term economic costs of hiring out-of-state workers, but the long term costs of not doing so were far worse.  There is also another long term economic cost: The electrical workers union in Alaska now has a legally enforced monopoly on electrical labor.  The political power held by unions has not just been harmful in Alaska.  In other places in the U.S., unions have used the law or other political influence to merge with other unions against their will (by "merge," I mean "hostile takeover").

Unions have largely become for-profit institutions in the U.S..  Their primary goal is no longer doing what it best for the workers or even representing the workers.  Their goal now is to do whatever gets the union the most money.  This frequently means demanding higher pay even when it is not needed or fair.  It also preempts any requests for reduced hours, because reduced hours means lower gross pay, which means lower dues.  By allowing union and agency shops, the government has allowed unions to force employees to become union members and to pay union dues against their will.  Unions in the U.S. typically have a number of permanent employees who are not actually members of the union.  In many unions, this includes a CEO and other administrative positions, who make decisions about what the employees want, without actually having any experience of being one of those employees.  Some of these positions, like lawyer and accountant, are justified, but full-time administrative positions in a union are absurd.  Unions are now run primarily by people who are totally disconnected from the union members and their work environment.  Frankly, a union that is a for-profit business should not have any degree of legal protection beyond what is normal for any other for-profit business.  Otherwise, it is even more prone to abuse.

So, now we come down to the problem: The government now has the reach and power to make unions entirely obsolete, and it has already made them mostly obsolete.  Instead of doing that though, it is actually making unions more necessary.  Unions should no longer exist, because they should no longer be needed.  When they were created, the potential for good outweighed the potential for abuse.  This is no longer true...except, when the government fails to do its primary job of representing the will and best interest of the people.

The Amazon case is prime example of where unions are useful.  The employees are being robbed by their employer.  They could unionize and strike, demanding pay for their time worked, demanding that the security check be listed in the job description (making it an essential part of the job, and thus legally part of paid work time), or demanding that the security checks be discontinued.  They could even unionize and heavily lobby Congress to repeal the highly constitutionally questionable law the Supreme Court used to justify its appallingly oppressive decision (even abuses of power can have legitimate non-abusive uses).  The problem I have with this is that they should not need to unionize to get paid for all of the time they spend doing work required by their employer.

An employer should have the right to require employees to do worthless work (plenty already do it anyhow), but employees should have the right to get paid regardless of whether the work required is profitable or not.  This should be legally protected.  What free society has a law that explicitly permits employers to blatantly and openly require work time from an employee that does not need to be compensated?

16 December 2014

Legalized Wage Theft

This article discusses a recent Supreme Court ruling that Amazon does not have to pay hourly employees for time spent in mandatory security checks.  The case involved several workers at Amazon warehouses, where post-shift security checks are mandatory to prevent theft, and the time spent waiting in line routinely takes more than 30 minutes.  The justification was an ill advised law from the middle of last century stating that work that is not essential and integral to the job position does not have to be paid.  The Supreme Court concluded that since the security checks could be eliminated without harming the work of the employees, Amazon (or rather, the company they pay to manage the warehouses) does not have to pay employees for this time.

This is an absurd case of legalized wage theft.  In this case, the verdict should be simple: The security checks are mandatory.  This makes them an integral part of the job.  Even by that old law, the employees should be paid.  Any mandatory activity that is part of a job should be part of the job description.  If it is not, then it should not be mandatory.  And, if it is part of the job description, then it is an integral and essential part of the job and thus should be compensated.

This ruling leads to other problems though.  It sets a legal precedent for allowing businesses to squander employee time without compensating them for it.  Some easy examples that have been given include sharpening knives in meat packing.  This is an important task, because it affects efficiency and safety, but, unless a knife will no longer cut, it is not essential or integral to the task.  The Supreme Court has said that their ruling does not apply to things done for safety or efficiency, but as a legal precedent, it does apply, because the law in question does not say otherwise.  Given this, another major concern is time spent putting on and taking off safety equipment.  Legally, employers no longer have to pay employees for these things, because the Supreme Court has ruled that something which can be eliminated without removing the ability to do the job does not need to be compensated.

The real problem here is that employers have been given a level power over employees that is entirely abusive.  What if Amazon's security checks get longer?  What if employees are now stuck in line for 2 hours?  It is still not essential to the job, and the Supreme Court has declared that it is permissible to detain employees on pain of firing without paying them for that time.  What if that time goes to 4 hours?  Now, most employees are staying at work for long enough to get significant overtime, but according to the Supreme Court, it is still totally legal to detain them without paying them for that time.

Frankly, I don't care about that old law.  It was a bad idea, but the problem is far deeper:  The Supreme Court has more or less signed over the right to hold employees against their will indefinitely, without any accountability.  At least requiring employees to be paid for the time is an effective deterrent.  If that security check is not part of the job description, employees should be able to easily bypass it without any adverse consequences.  If the employer tries to detain the employee, then the employer should be charged with and convicted of holding the employee against her will.  If it is part of the job description, then by definition, it is an integral and essential part of the job and should be paid as such.  Really, there should be criminal charges going on in this case, not just a question of getting paid for that time.