Thursday, May 19, 2016

Georgia Labor Commissioner Mark Butler responds to labor force problems by threatening unemployed workers

Yesterday, I posted a blog on this site detailing a number of news reports about Georgia’s labor force, most of them negative.

Georgia Labor Commissioner Mark Butler chose to respond by posting a YouTube video threatening workers over the smaller issue of unemployment insurance fraud in a response that could be considered both tone-deaf and irresponsible.



From the University of California Berkeley Center for Labor Research and Education’s report on “Producing Poverty: The Public Cost of Low-Wage Production Jobs in Manufacturing”, to the New York Times’s story on “Hiring Hurdle: Finding Workers Who Can Pass a Drug Test,” the message is that Georgia’s labor force needs the same positive approach that the state puts towards economic development.

The AAUW’s finding on the large pay inequality between men and women in Georgia, or the U.S. Department’s view that tightening the rules on overtime will affect more than 158,000 low wage workers in Georgia, are additional measures that the state’s workforce needs positive reinforcement.

That should not be a hard message for state officials to understand, as they should know that attracting employers to Georgia depends on supplying companies with good quality workers.

Yes, unemployment insurance fraud is a problem in Georgia, as it is elsewhere, and Georgia has done a reasonable job of enforcing the rules, but focusing on this story to the exclusion of the more critical challenges facing Georgia workers is a misplaced priority.

He could just as easily made a video addressing worker misclassification that costs Georgia workers millions of dollars each year in lost wages, but I don’t think we will see that video anytime soon.

There are simply bigger issues facing Georgia’s workers, and it makes Mr. Butler’s choice of topics look like an attempt to distract the citizens of Georgia from the more important issues facing the state’s workers.

Wednesday, May 18, 2016

Time for Georgia to take a positive approach to labor development

Low wages, pay equity, public assistance, and drug use are related issues for Georgia.

This month, a series of reports have been published concerning Georgia’s labor force, most of them negative. The UC Berkeley Center for Labor Research and Education published a study titled “Producing Poverty: The Public Cost of Low-Wage Production Jobs in Manufacturing”. 

In it they found that 47 percent of production workers in manufacturing and temporary services relied on some form of public assistance:


Earned Income Tax Credit
Medicaid/CHIP
Food Stamps
TANF
Total Participation
Georgia
39%
15%
22%
1%
47%
(Some workers participate in more than one public assistance program.)

The study also provides an explanation for these high rates of public assistance. “Historically, blue collar jobs in manufacturing provided opportunities for workers without a college education to earn a decent living. For many manufacturing jobs, this is no longer true. While employment in manufacturing has started to grow again following the great recession, the new production jobs created are less likely to be union and more likely to pay low wages. When jobs do not pay enough for workers to meet their basic needs, they rely on public assistance programs to fill the gaps,” according to the report.

This past Tuesday, the U.S. Department of Labor issued its new rules for overtime. In a map accompanying the announcement, USDOL indicated that the updated protections would extend protections for an additional 158,000 workers in Georgia. This in a state where 4.4 percent of workers were already at or below the minimum wage, a figure much higher than the national average.

The American Association of University Women published a study showing the median earnings for men and women across the nation. In Georgia, the gap was widest in Congressional Districts 6 (Price, R-GA) and 11 (Loudermilk, R-GA). In the 6th Congressional District, women earned on average 27.4 percent less than men. In the 11th Congressional District, the difference was 25.8 percent. This compares to a 21 percent gap nationally.

Georgia Congressional Districts with widest earnings gaps between men and women (2014)
Member of Congress
District
Earnings Ratio
Price (Republican)
GA-6
72.6%
Loudermilk (Republican)
GA-11
74.2%
Scott, A. (Republican)
GA-8
75.6%
Westmorland (Republican)
GA-3
76.3%
Hice (Republican)
GA-10
77.0%



As it happens, the two Congressional districts are side-by-side, with the 6th District including much of the northern suburbs of Atlanta including portions of Cobb, Fulton, and Dekalb counties. The 11th District is located in the northwestern part of the Atlanta metro area and includes Cartersville, Marietta, and Woodstock proving that the worse problems were not just in the traditionally rural parts of South Georgia.

Finally, The New York Times published a story this week on “Hiring Hurdle: Finding Workers Who Can Pass a Drug Test.” In the story, Georgia officials and company managers were dismayed to find that companies in Georgia are having trouble finding workers due to the number who fail company drug tests.

Taken individually, the stories can be read as a series of “what’s wrong with Georgia”, but they should not be read as unrelated issues.

Low wages, low rates of unionization (only 4 percent of workers in Georgia are members of unions), and significant problems in pay equity between men and women feed on each other. The results show up as social problems including greater need for public assistance and greater drug use.

Georgia has done an excellent job of luring companies, and most recently the film industry, to the state. Now they need to commit to raising their labor force, not by creating more rules and barriers but by taking a positive approach to developing its workforce by supporting efforts at great pay equity and higher wages for both men and women even if that means taking a less confrontational approach towards unions. 

The same positive approach Georgia officials take to economic development should be applied to labor development.






Friday, May 6, 2016

New Georgia law protects franchisors from being treated as joint employers

Governor Nathan Deal has signed Georgia Senate Bill 277, the “Protecting Georgia Small Business Act.”

The one-page bill amends the Official Code of Georgia to provide that “neither a franchisee nor a franchisee’s employee shall be deemed to be an employee of the franchisor for any purpose,” excepting as it relates to workers’ compensation.

Sponsors of the new law are listed as State Senators John Albers (56th District), Charlie Bethel (54th), William Ligon, Jr. (3rd), David Shafer (48th), Fran Millar (40th), and Mike Crane (28th).

The law comes as the National Labor Relations Board continues to consider whether McDonald’s USA (a franchisor) should be regarded as a joint employer with certain McDonald’s franchisees and therefore responsible for any unfair labor practices of its franchisees. 

McDonald’s USA has argued that it did not exercise sufficient control over franchisees’ employment policies and practices to be regarded as a joint employer.

While the NLRB has not yet issued a final ruling, the current board seems to be headed towards a decision to treat McDonald’s USA as a joint employer, although changes to the Board that may come after the November Presidential and Senate elections may result in changes to the Board's composition and alter this course of action. 

Labor unions reportedly involved in this case include the Service Employees International Union (SEIU), Fast Food Workers Committee, Pennsylvania Workers Organizing Committee, Workers Organizing Committee of Chicago, Los Angeles Organizing Committee, and Western Workers Organizing Committee.

While most franchisors and franchisees oppose the joint-employer concept, some individuals have argued that making franchisors joint employers strengthens the bargaining hand of franchisees.

Franchisee lawyer Robert Zarco is quoted on the Blue MauMau web site as saying to Dunkin' Donuts franchisees that with the potential NLRB ruling "You can level the playing field. Here is your opportunity to level the playing field on a silver platter. Franchisors, many of them have crossed the line. They have crossed the line from giving you guidance and recommendations and suggestions to dictating, mandating and requiring what you should do as an independent business owner."

Zarco argues that up until the NLRB ruling, most franchisors had the best of both worlds. They were able to effectively control everything from hiring to how a tomato is sliced at their franchised locations, yet – at the same time – could claim they were not at fault when injuries or things went wrong at their restaurants.

The state’s new law is largely symbolic as it does not apply to federal decisions, such as those of the NLRB, but places the state squarely on the side of franchisors.

Georgia is home to several corporate fast-food franchisors, not the least being Chick-fil-A.


You can read the text of the new law here.