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.
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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.
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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.
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Some New Year’s for the People’s Republic of China

China ushered in the Year of the Ox yesterday (today in the U.S.) amid deepening economic and social woes.

It’s hard to get the truth out of the People’s Republic, which is anything but a republic, but the year just closed saw some 18,000 businesses close, mostly in the southeast, and at least 2 million (some would say 10 million) workers laid off. Economic growth has slowed to about 7 percent or so (again, the truth is hard to ascertain since the government concocts, er, tabulates the growth rate), and all these woes have put the government on edge.

In the U.S., we have the WARN Act (Worker Adjustment and Retraining Act) that applies to businesses with 50 or more employees, requiring them to give 60 days’ advance notice of undertaking mass layoffs or ceasing operations. In the PRC, there’s the new Labor Contract Law and other initiatives that require businesses to alert the government in advance of any layoffs of 20 employees, or 10 percent of the workforce.

However, the laws are proving hard to enforce as many business owners simply shut down shop and disappear, leaving their workers without jobs or the money owed them. In some cases, local governments have had to move in and pay the workers themselves to quell potential rioting.

Since many of the plant closings involved operations staffed mostly by migrant workers, hundreds of thousands, perhaps millions (again, who knows for sure?), of these roving employees are being forced back to the hinterlands from the industrialized cities, adding to a cadre of malcontented citizens. In addition, there are at least 1.5 million college graduates from summer 2008 who have yet to find jobs, with another few million set to join their ranks this summer. It could portend an explosive mix in a land that touts economic freedom but practices political and civil repression.

We’ll just have to wait and see if the Year of the Ox ends up seeing the unelected lords of China–who last year had to suppress an uprising in Lhasa, Tibet–getting themselves gored by an unhappy, suppressed population.


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.
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Stop Making Sense; No One Is Going to Listen Anyway

If you’re been following the ongoing cyber-debates about how to reform health care, you’ve no doubt run into a lot of wishful thinking, as in, “If the government pays for health care, then it’s free.”

Wrong for all kinds of obvious reasons, most notable of which is that either you or your employer is going to have to pay for your coverage–unless you qualify under a government program because of age, disability or low income.

However, one savvy professor of health policy (and attorney) writing for the New England Journal of Medicine has figured out a quick and simple method that will provide health care for all without a huge national bureaucracy. In fact, this health care delivery vehicle already exists.

It’s called–hold the drum rolls please–Medicaid.

I can sense shivvers going up and down everyone’s spine just upon hearing the word, which bespeaks poverty and welfare. However, it could be aptly renamed and expanded at the same time. MediCure is available, as is MedAdvantage and all kinds of nifty titles.

Anyway, this is an idea that’s so sensible and easy to implement that no one in Washington, D.C., would ever consider it. After all, the whole point of health care reform is to create legions of bureaucrats (read: the politicians’ cronies and supporters) and put them into lifetime sinecures.

(One compelling, negative factor in Medicaid, as the author admits in his proposal, is its low payment schedule for doctors. In fact, many doctors refuse to accept Medicaid patients, forcing them to rely on emergency rooms, as the American Enterprise Institute points out.)

I strongly suggest reading “Medicaid and the Path to National Health Insurance” by Michael Sparer, Ph.D. and J.D. His plan cuts to the quick and solves a zillion problems in one stroke.

Problem is, practicality has nothing to do with politics. Money and power do.


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.
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Will Health IT Solve This Regulatory Mess?

I‘m usually not a fan of the stuff in the Huffington Post since it’s–let’s just say–a bit past center politically, but in my ongoing research on HIPAA (the Health Insurance Portability and Accountability Act), I came across a first-person account of how HIPAA and other medical regulations affect the delivery of health care in America.

This was a real eye-opener.

The author, Deane Waldman, is a pediatric cardiologist. In his article, he recounts some regulatory horror stories that help explain why health care delivery is such a mess in the U.S.

Let me just cite a couple of incidents:

Because of mandates by the Joint Commission on Accreditation of Hospitals (JCOAH), Dr. Waldman must ask each patient if he or she smokes (and plans to quit) and whether he or she has suicidal thoughts. The irony here is that many of his patients are in diapers.

Another fine example involves a letter he received mandating that he attend a training session on Part D of Medicare even though, again, his patients have nothing to do with Part D or even Medicare. At stake, should be not complete the training, was the accreditation of the entire hospital, or at the very least potential fines and/or sanctions.

Read “The Bane of My Existence: Come With Me to Work” for further horror stories.

Now, Dr. Waldman is one guy who can truly subscribe to my motto, “Get off my back.”


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.
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Lilly Ledbetter Gets Her Revenge on Supreme Court

I‘m not sure how the Lilly Ledbetter Fair Pay Act, which zoomed through the Senate last night and is now on its way to the House for reconciliation, will benefit the law’s namesake, but it sure must be sweet to pull one over the head of Supreme Court justices. Five of the latter ruled in 2007 that Ms. Ledbetter’s claim for pay discrimination against Goodyear, though just, was filed beyond the statute of limitations and thus invalid.

Her friends in the Democratic party rushed to her aid with the aforementioned bill. It never got out of the Senate the past two years when the place had more Republicans and the bill faced a sure Bushian swat-back, but the times they are a-changin’. Now the Dems are within one vote of being filibuster proof, and indeed for this bill they invoked cloture (ending any filibuster) by the comfortable margin of 61-36. (Maine’s Olympia Snowe, for one, is a Republican in name only.)

The eponymous law now mandates that the statute of limitations (180 or 300 days, depending) begins anew each time a paycheck is issued or, ambiguously, “when an individual is affected by application of a discriminatory compensation decision.”

Though Ms. Ledbetter is now retired and not receiving paychecks, depending on how a judge might interpret “affected by,” she could well be back in court looking for her lost wages (men in similar positions were paid more, basically). Goodyear should just write a check and end all the publicity that led to this new law in the first place, but we’ll see.

Lilly Ledbetter and her legislation are now poised to enrich trial lawyers throughout the country (they being one of the two biggest donors, along with organized labor, to the Democrats and Barack Obama in the last election), while sending businesses into a funk and whetting the legal appetites of many a female employee. (One blog post I read predicted that this would lead to companies’ hiring only, or mainly, men. Not sure that would cut it legally, though.)

So, to borrow an old Klingon saying, “Revenge is a dish best served with the force of law.”

(Employers, I’ve found a convenient source for mastering all the discrimination and other laws and regulations you face. Get a copy of Personnel Concepts’ Equal Employment Opportunity Compliance Program.)


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.
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Proposed Law Extends FMLA Leave to Part-Time Workers

Under the existing provisions of the Family and Medical Leave Act, employees at a firm with 50 or more employees within a 75-mile radius need to have worked 1,250 hours in the previous 12-month period to qualify for 12 weeks of unpaid leave (26 weeks if related to military service).

Representative Tammy Baldwin (D-Wisc.), however, has now introduced the Family Fairness Act of 2009 (H.R. 389) to eliminate the “hours of service” requirement, but not the 12 months of employment, so that both part- and full-time workers would qualify for FMLA leave.

“An important piece of labor law, the Family and Medical Leave Act, contains deficiencies that are harmful to working women, especially those with young children or elderly parents who rely on them,” Baldwin said. “The Family Fairness Act will move us closer toward equality for all workers.”

In 2007, almost 25 million people worked part-time and represented 16 percent of the workforce with two-thirds of these part-time workers being women. Many of them have small children or are attending school full time and do not have any choice but to work fewer than 35 hours a week, according to Baldwin.

What next, 12 weeks of paid leave?

Anything’s possible in the current political environment, so if you’re an employer, hang on for a wild ride–or just retire now and enjoy the view from afar.


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.
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Health IT Funds Included in Stimulus Package

The latest version of the economic stimulus legislation includes 187 pages called the Health IT for Economic and Clinical Health Act, or HITECH, with $20 billion in funding to implement a nationwide system of electronic health records (EHRs).

This is something that President Obama spoke of frequently during his campaign, and now it appears to be coming into fruition.

The Congressional Budget Office (CBO) envisions that, within a decade, some 90 percent of physicians and 70 percent of hospitals and other providers will become electrified (that word doesn’t quite work, does it?) as a result of HITECH. In other words, they will be using electronic health records (EHRs).

HIPAA, the Health Insurance Portability and Accountability Act of 1996, comes into play here, but when HIPAA was written, no one was really envisioning a nationwide data base of health records available online. However, here it all comes.

The law also creates an Office of the National Coordinator for Health IT to oversee matters and enforce rules.

Finally, the law comes with a stick as well as a $20-billion carrot. At some point in the future, those who choose not to go electronic will get docked in their Medicare and Medicaid payments.

Ouch. That’ll teach ’em.


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.
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New I-9 Form: Paperwork Reduction in Action?

The United States Customs and Immigration Service (USCIS), formerly INS until becoming part of the Department of Homeland Security (DHS), has issued a new form I-9, which is used by employers to verify that potential employees have the legal right to work in the United States.

The form has been revised to comply with new USCIS regulations concerning which documents can be used for verification. Out are any expired documents (which implausibly were acceptable until these new regs), and in is a new Passport Card (which can also be used in lieu of a full passport when traveling to and from Canada or Mexico, but just by car).

The new form, which goes into effect Feb. 2, is a five-page document, and in the middle of the document is one entire page of white with one lone, shaded box called “Paperwork Reduction Act.” The box advises users that the form will take, on average, 12 minutes to fill out, and then it asks that suggestions on improving the process be sent to a certain address.

One whole page of paper for one paragraph of information in the name of paperwork reduction!

I quickly gave a call to a compliance and labor law researcher at Personnel Concepts by the name of Dave Daniels. We both got a chuckle out of that virtually blank page, and he said he had called USCIS about the form (just released on Tuesday) to see whether that reduction-notice page needs to be submitted with the form. He was told no. He also asked why the new I-9 had an expiration date of July 2009, and the USCIS person expressed surprise at the early expiration date and said this was the first time he’d noticed it!

“Our government hard at work,” we both concluded.


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.
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