A Hundred Years Later, Henry Ford Comes to China

American automobile pioneer Henry Ford is famous for many things, including the introduction of assembly-line production and, to make sure workers could endure the boredom of his assembly lines, the $5-a-day pay rule, which was unheard of in 1914. (At the same time, he reduced the workday from nine to eight hours, but we haven’t progressed much since.)

When Ford revolutionized industry with his two implementations, he not only doubled the average worker’s take-home pay, but he also launched the creation of the middle class.

Now, his innovations have come to China, partially anyway. There is no death of assembly lines and other boredom-inducing work conditions in the People’s Republic, but there is also no $5-a-day pay standard either.

Now, at least one labor consultant in China is urging that the nation adopt a minimum daily wage of $5 to spur consumerism in the face of economic hard times. Call it “trickle up,” as the article reporting it did.

All is not well in the PRC. Some 18,000 (some say 60,000) factories have closed since the start of 2008, and at least 10 million (some say 50 million) migrant workers are now out of work and threatening social instability. Officials are worried.

Actually, officials are more than worried–they scared s’less and wreaking havoc on those who would try to organize workers to protest for their rights.

Take the case of migrant worker legal advocate Xiao Qingshan.

On January 9, Xiao said, 14 security officers from the local labor bureau broke into his office, confiscated 600 legal case files, 160 law books, his computer, his photocopier, his television set and 100,000 yuan in cash.

“That evening I was ambushed near the office by five strangers who forced a black bag over my head and then threw me into a shallow polluted canal,” he said. His landlord has since given him notice to quit his rented home.

And meanwhile, all U.S. Treasury Secretary Timothy Geithner worries about is the exchange rate of the yuan.

Years of sweatshop wages and income equality are coming home to threaten China’s stability–and its leaders. Protests have swept the nation even as Premier Wen Jiabao gets a shoe, Bush style, hurled at him in London.

The prestigious Far Eastern Economic Review headlined its latest edition, “The coming crack-up of the China Model.”

And you thought we had it rough here.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
GoTo top Top

Group Says Single-Payer Can Be Created for $50 Billion

A group going by the name of Progressive Democrats of America (PDA) has solved the Riddle of the (Health Care) Sphinx, or so it proclaims.

The PDA folk claim that, by just extending Medicare to all Americans (thereby jettisoning, one would presume, all other current health care delivery systems), the country could–bugles blaring, drums rolling–create 2,613,495 million new, permanent, good-paying jobs; boost the economy by $317 billion in increased business and public revenues; add $100 billion in employee compensation; and infuse public budgets with $44 billion in new tax revenues.

First, as for these “new, permanent, good-paying jobs,” you don’t just pick up doctors, nurses or skilled technicians off the street, and just about every study out there shows that there is already a complete dearth of these professionals to suddenly cover the estimated 47 million Americans who lack health insurance. In Massachusetts, under its new so-called universal health care plan, most of the newly insured can’t find a doctor–and can’t afford the premiums (which the state has found itself paying or subsidizing).

But what is most disturbing about this proclamation of health heaven just over the horizon is the disingenuous financing figures–just $44 billion (or $63 billion–the distinction between these figures is not entirely clear) more than what is currently being spent on health care in America, and you get this single-payer nirvana.

Sounds like a bargain, huh? Problem is, the PDA people never say how the government will transfer the other $2.1 trillion (yes, with a T) being spent yearly on the current, mostly private system, a sum which includes insurance premiums, co-pays, deductibles, out-of-pocket expenses, and so on.

The group’s obvious point is, “How could anyone object to spending about $44 (or $63) billion when we’ve bailed out all those banking, stock market and mortgage sleazeballs for several hundred billion?”

It would be hard to so object if it were the only factor, but it would be harder still to find a way to transfer the current $2.1 trillion being spent on health care. Remember, a lot of that money is money that taxpayers are paying themselves–and which they don’t want to pay under any so-called “health care reform.” The public wants out-of-pocket expenses to disappear, and then to be able to walk into any doctor’s office on whim and get treated–without any inconvenience, waiting time or personal money spent.

The public, in short, wants a pipe dream, and sites like this, which make insuring the whole country seem like it costs less than one day in Iraq, only contribute to the daydreaming American public’s fantasies.

As the PDA site proclaims, this $63 billion–they waffle back and forth with $44 billion–is one-sixth the size of the bailout for CitiGroup and half the bailout size for AIG.

Unless my math (and PC calculator) are faulty, if you divide $2.1 trillion by 300 million people, that comes out at $7,000 per person each year. Hardly free–and certainly a lot more than $66 billion, or $220 per person per year. Hell, I’ll write a check for $220 now if I can get that seamless, faultless health care system everyone dreams of.

Unfortunately, this being the real world, it’ll cost each of us $6,780 more a year–and that’s just to get Medicare.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
GoTo top Top

Minimum Wage Laws Cost Busboys Their Jobs

The Wall Street Journal, which has been chronicling the nation’s economic woes industry by industry, today ran a a piece about the latest cost-cutting strategy being employed at some restaurants–letting the busboys go.

Of course, this means that the wait staff must now clear tables and scrape dishes clean, tasks that most of them frown on and that some have even refused to do, leaving their places of work either voluntarily or involuntarily.

But here’s the rub: Since busboys usually don’t receive tips, they must be paid the full minimum wage, but wait staff generally fall under the “tipped employee” category and can be paid as little as $2 or $3 an hour, depending on the state.

Here we see an excellent example of the minimum wage law’s backfiring, but you won’t hear any politician denouncing such laws. Instead, they’ll blame the heartless restaurateurs and pass a law limiting their profits (to go along with executive pay and bonus laws coming out this week).

The really ironic thing is that, for at least one group of 570 restaurants all called Bob Evans (which seems to be a Midwestern chain), spoons are disappearing and must be replaced at an alarming rate.

Theories abound, all the way from wait staff revenge to a simpler cause–the spoons, being lighter and handier, are used to scrape the plates but they end up getting discarded into the trash can with the leftovers.

Anyway, we can only hope that the cost of the spoon replacements outweighs the cost of the previous bus staff.

Karmic revenge, you know.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
GoTo top Top

Car Washes Targeted by ICE for Immigration Raids

News item from the blogosphere:

Earlier this year, Car Care Inc., a subsidiary of Mace Securities Inc., was ordered to pay a fine of $100,000 and to forfeit $500,000 to the U.S. Immigration and Customs Enforcement (ICE) following a 2006 investigation. (At one time, Mace, a manufacturer of security and personal defense products, was one of the largest carwash chains in the nation.) Car Care Inc., based in the Northeast, had employees on the payroll who were using false identification cards to show legal status to work. $600,000! On top of that, five managers are awaiting criminal actions against them, personally.

Actually, I found this little tidbit while following a Google Alert on the I-9 employment verification form that employers must keep on file for each employee. The quoted tidbit is both newsworthy and instructional in and of itself, but it’s also part of a blog posting by labor law attorney Jacob Monty.

Monty’s whole point is how much safer and easier an employer’s life becomes when he or she uses the E-Verify online database to check the “legal to work in the U.S.” status of each new employee. The system is free, he says, works in about 10 seconds, and produces a document to file with each employee’s I-9 that virtually guarantees you won’t get fined by the government. Using E-Verify, you’ve done your due diligence, in other words.

The blog where Monty posted this was one for the carwashing and detailing industry, and he blithely warns his readers that car washes are “low-hanging fruit” when it comes to ICE illegal worker raids.

For his final advice, Monty warns, “ICE knows which companies are using the system and which are not—and they target those who are not using E-Verify.”

I personally always rely on Personnel Concepts to keep compliant with the various laws and regulations of the nation, and that long-time labor law compliance company has issued an instructive and useful I-9 Compliance Kit. Highly recommended.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
GoTo top Top

Unemployment Benefits for Strikers? Court Says Yes

The New Jersey State Supreme Court, in a 6-1 ruling, has authorized striking nurses to receive unemployment benefits, overturning just about every precedent concerning unemployment insurance.

The lone dissenting justice, Roberto Rivera-Soto, called the decision “perverse,” noting that it “upends the common-sense notion that striking employees have left their employment voluntarily and, hence, should be disqualified from unemployment compensation benefits.”

Unemployment insurance was included in the Social Security Act of 1935, which created the Federal-State Unemployment Compensation Program. The act listed the goal as “to provide temporary and partial wage replacement to involuntarily unemployed workers who were recently employed.”

It seems pretty clear that eligible workers have to be “involuntarily” out of work, which is not the case with the strikers at Lourdres Medical Center of Burlington County.

And catch this, as reported on MyCentralJersey.com, “[T]he decision upheld a backward state law that says strikers can receive unemployment benefits so long as their company remains open.”

Can you imagine the implications of this if other state courts, or politicians, apply the same standards? And what of already-strapped employers who will now have guns held to their heads if they don’t settle quickly.

Fighting the strikers and hiring temporary help, under this scenario, could prove to be prohibitively expensive. Though employers don’t have to pay unemployment benefits directly, their state UI taxes go up proportionately (or dispropotionately, as the case may be) as their unemployed worker total rises.

I can see it now: “I was forced to strike when my employer refused to raise my wages 300 percent.”

Involuntarily on strike and out of work–the new standard for unemployment.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
GoTo top Top

Vicky Crawford: Six Years to Get Her Day in Court

This week the U.S. Supreme Court reversed lower-court rulings in the case of Vicky* Crawford, allowing her suit against Metro Nashville Public Schools in Tennessee to go to trial. (*I’ve also seen her first name spelled Vicki, don’t know which is correct.)

The way I read things, Ms. Crawford got royally screwed both by her employers and by the courts.

In 2001, Gene Hughes was hired as the employee relations manager for the school district, and by 2002 complaints had already begun to surface that Hughes was sexually harassing some of the female employees. An investigation was launched, and Ms Crawford told of her experience. She said Hughes had frequently asked to see her breasts, had grabbed his genitals in front of her, and on one occasion had even pulled her head toward his crotch.

Other female employees lodged similar complaints.

Result?

Nothing ever happened to Hughes*, but Vicky was let go on charges of embezzlement and drug use. Two other female complainants were also dismissed. (*However, Hughes was later forced to resign for resume fraud in claiming he was a lawyer, former professional football player and Navy SEAL.)

Now, for part two in this ironic story. Ms. Crawford sued on grounds of being retaliated against in violation of the 1964 Civil Rights Act. Lower courts ruled that she had no case since she had not properly filied a complaint but just answered questions from the human resources department.

When her appeal got to the Supreme Court, the ruling was unanimous–in her favor.

Wrote Justice David Souter:

“Nothing in the statute requires a freakish rule protecting an employee who reports discrimination on her own initiative but not one who reports the same discrimination in the same words when her boss asks a question.”

So, she can finally get her day in court. Let justice prevail.

(Employers, don’t get yourselves into binds like these. Bone up on all applicable harassment and discrimination laws and regulations through the invaluable tools offered by Personnel Concepts.)


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
GoTo top Top

President to Sign Lilly Ledbetter Fair Pay Act Today

No doubt emblematic of his entire time in office, President Barack Obama will sign his first piece of legislation today–a labor law that overturns a Bush-era Supreme Court decision.

Lilly Ledbetter, who was the subject of that Supreme Court ruling, will be there when Obama inks the Lilly Ledbetter Fair Pay Act into law.

The legislation reverses the court’s decision in the Ledbetter case that the 180-day statute of limitations on pay discrimination cases starts ticking when the initial decision is made to pay unfairly. The Fair Pay Act amends the 1964 Civil Rights Act and mandates that the statute starts ticking again every time a paycheck is issued to the victim.

(Pay discrimination is defined as an employee’s being paid less for the substantially same job and same set of job responsibilities, figuring in length of service, etc., based on age, race, gender and factors besides experience.)

Opponents fear that this will just open up the spigot for lawyers to march an endless stream of employees into court and win two years of backwardly adjusted pay.

They’re probably right.

N.B.: Catch this, the law is worded to “take effect as if enacted on May 28, 2007.” This is curious for a couple of reasons. First, I believe there’s a Constitutional ban on ex post facto laws (backdated laws), and this date is one day before the Supreme Court heard the Ledbetter case. Evidently, it’s been so written as to enable Lilly to go back to the Supreme Court and reopen her case. If so, I hope the court rules that the start date is unconstitutional.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
GoTo top Top

Unemployment Nearing 20 Percent If You Count Everyone

unemploymentOkay, forget the official figure of 7.2 percent that the media quote for U.S. unemployment.

As the accompanying graphic from Shadow Stats shows, what the media report is called the U3 unemployment rate–the officially unemployed shown on the bottom red line. When you add in “discouraged” and “marginally attached” workers, you get the middle line on the graph, which is trending toward 14 percent. Throw in areas that the Bureau of Labor Statistics doesn’t even consider–unemployed farm workers, the idle self-employed, and home workers–and you’re up to 18 percent on the top blue line.

That’s how I got my rather startling title for this post.

All told, 48 percent of U.S. companies downsized in 2008, and a whopping 60 percent are planning reductions in 2009, according to a Society of Human Resource Management survey.

Economists predict a total of 1.5 million to 2 million or more jobs will vanish in 2009, and the “official” unemployment rate could hit 9 to 10 percent, underscoring the challenges that new U.S. President Barack Obama will face and the tough road ahead for job seekers.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
GoTo top Top

Can the NLRB Force a Company to Reopen?

According to employer attorney George Lenard on his blawg, the answer is yes, no, and “it depends,” though he does say it’s not a very realistic outcome.

The company in question is the now-infamous Republic Windows and Doors, late of Chicago but now reincarnated in a place called Red Oak, Iowa, and renamed Echo Windows.

The difference? No United Electrical, Radio and Machine Workers union in Iowa.

Recall back in December, when Republic abruptly closed down due to a “credit crunch,” the employees refused to vacate the premises until the owner of Republic, a man named Richard Gillman, obtained a line of credit to pay the workers all money due them, including eight weeks of pay under the WARN (Worker Adjustment and Retraining Notification) Act.

Sure enough, along with a Chapter 7 bankruptcy filing to cease operations, Gillman provided $1.75 million to settle with the employees.

Case closed, big victory for the union, right?

Not quite, the United Electrical, Radio and Machine Workers union smelled a rat and filed an unfair labor practice complaint with the National Labor Relations Board (NLRB). The filing requested that the machinery that had been ferreted out of the Chicago plant in the dead of the night to Red Oak and the new factory be returned to Chicago, where Republic might be put back in operation under a potential new owner.

Now, here’s where it gets tricky. If Gillman did indeed move his operations to another state to bust the union, then previous court cases (cited by Lenard) grant the NLRB the right to order the old factory to be reinstated with the employees and union in tow.

Lenard doesn’t give this reopening-of-Republic scenario much chance of playing out, but he concludes that it’s not outside the realm of possibility.

With new appointees to the NLRB under Obama surely to be highly pro-labor, I’d say anything is indeed possible.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
GoTo top Top

Good to Great, Then Gone or Gobbled Up

An associate introduced me to a book entitled Good to Great by Jim Collins, who is widely regarded as a management guru. His book examines the traits and disciplines that separate the great enterprises from the merely good ones.

(If you want a good explanation of what propels the great companies, Jim provides a downloadable good-to-great diagnostic tool, which pretty much summarizes his book in the process.)

Beginning on page 101 of Good to Great, Collins lists several companies that went from good to great by focusing on what they truly could be best in the world at.

The second listed great company, following Abbott Laboratories, is Circuit City. CC is now bankrupt and liquidating, so I e-mailed Collins to see if he could tell me where they blew it, but it’s been a few days and I’ve heard nothing back. Understandable since the man is no doubt busy with more important matters (see below). At any rate, Collins pegged CC as going from good to great because it became the best at “implementing the ‘4-S’ model (service, selection, savings, satisfaction) applied to big-ticket consumer sales.”

Mind you, I’m in no position to speak for Collins, but if I were answering my own e-mail to him, I’d say, “Best Buy” happened. The latter retailer seemed to ace out CC on savings, for sure, and probably on selection as well.

Now, coming in third (the list is actually alphabetical, so the ordering is ironic as much as anything) is Fannie Mae, which got taken over by Uncle Sam in September along with its sibling Freddie Mac. Fannie and Freddie are both hemorrhaging red ink after years of insuring “affordable housing.” (Don’t get me started on that topic.)

Collins says that Fannie Mae went from good to great by realizing it could become “the best capital markets player in anything that pertains to mortgages.”

Yeah, but it couldn’t survive a real estate bubble, which it created in the first place, of course.

Anyway, I promised to update you on what Collins is doing these days. Turns out, well before the current economic panic, he and a partner began researching how companies survive in hard times.

Too late for Circuit City and Fannie Mae, I guess, but I look forward to his conclusions, which he hinted at in this Fortune magazine interview.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
GoTo top Top