Giving Jobs

Our current political debate is often dismissive of workers.  Unions are seen as a burden on the economy, a job killer.  Unemployment benefits, a program that workers pay into, has been equated with welfare.  Recently, the debate over taxing the top 2% of American income earners has sparked a new term “job givers.”  We can’t take the rich because they create jobs.  The claim is debatable.  The language and thought used to promote this idea are even worse. 

This term “job givers” bothers me because it warps the relationship between employers and employees.  A job is not a gift.  It is an exchange.  In return for work and skill, employers pay a wage to their workers.  No company hires people as a gift.  If we have seen anything over the past few years, it is that companies will shed labor costs (and the people who do the work) as quickly as they can. 

I am not criticizing employers.  Sometimes it is necessary to downsize or even shut down an operation.  What we should not do is look at the employer as a kindly uncle or aunt who rewards employees with a job.  If anything, many employers over the past few years could be called “salary takers” as they have cut wages and hours, imposed furlough days, and altered models for bonuses and commissions. 

We need to be honest about why companies hire:  There is work to be done and existing employees can’t get it all done.  Over the past two years, as unemployment has gone up, so has worker productivity, which means people with jobs are working harder and working longer hours – often for less pay or fewer benefits.  How can that be called a gift?

Another Wage Shell Game

I’ve written about several forms of salary cuts: furlough days, changes in commission, reduced hours, and wage reductions.  I met with a client today who faced a different sort of problem.  He is a union employee who manages a building.  When a new owner purchased the building, he told my client that he could keep his job if he went on salary at half his normal annual income. My client, who is loyal to his union, walked away from this offer.  But let’s examine what he was being offered.

On the surface, it’s bad enough.  If my client had taken this job, he’d be cutting his annual income by 50%.  Worse still, by being on salary he would have given up all overtime payments.  Building managers are frequently called in on nights and weekends to address maintenance emergencies.  That work would now be done with no compensation.

My client said no.  He thinks one of his co-workers accepted this devil’s bargain.  I have no respect for employers that exploit workers.  In most cases, I have less for workers who accept these “deals.”  Yes, jobs are difficult to get in this economy.  But, when workers accept lower pay and fewer benefits, they are telling employers that they should offer even less next time.  We need to find a way to stand together as working people.  If we act separately, driven by fear, we will win the race – to the bottom.

Let’s Blame the Bosses

Today’s Chicago Sun-Times reports that the Chicago Transit Authority expects to lay off 70 employees next year and cut $50 million from its budget.  Non-union employees face a wage freeze and 18 furlough days, which means a pay cut of more than 6%.  The article notes that just last year, the CTA cut bus service by 18% and rail service by 9% while laying off 1,000 employees. 

Rather than blame union contracts, let’s ask another question: What’s wrong with the people running this company and all of the other companies crying poor?  Over the last ten years, CTA has raised fares, cut service, cut staff, increased revenue from advertising, and increased the number of riders.  CTA also receives funding from the state to support mass transit systems.  Any normal business would probably be doing quite well with lower costs and increased revenue.  What’s wrong with CTA management that they are always facing some kind of “Doomsday?”  Maybe they’re laying off the wrong people.

Too often print and electronic media repeat the same clichés, blaming working people for the economic downtown.  Let’s take a hard look at the people running the show, the ones who get “golden parachutes” for running companies into the ground, the ones who move from million dollar job to million dollar job based on their network.  Working people don’t have that power or those advantages.  Don’t blame the victims.

Pay Cuts for Government Workers

Steven Greenhouse reports in the New York Times that many governments are asking employees to take pay cuts rather than furlough days.  Many companies are doing the same.  I hate furlough days because they nothing more than are rolling layoffs.  They do have one benefit – time off.  Pay cuts require employees to work the same amount for less money.  I’ve heard several stories of pay cuts from my clients, and it is often the middle level workers (managers, administrative assistants) who take the biggest pay cuts. 

Who doesn’t take a hit?  The people at the top.  They still get bonuses.  If they are let go (like some executives at Tribune Media may be), they are given “golden parachutes.”  John Edwards may be a jerk, but he was right about “Two Americas.”  Most of us are living in the America where life is getting harder and less secure.  For the lucky few, America is still the land of opportunity (the opportunity to feed off your fellow citizens like a blood-starved vampire).

Salaries Up?

Today’s Chicago Sun-Times claims that salaries across the board are expected to go up 3% this year.  This figure is based on a survey conducted by the Hay Group.  This might sound good, but as the short article cites, the Hay Group says that salary increases averaged 4.5%-5% at the beginning of the decade. 

I’d take this point one step further.  Yes, people who have kept their jobs might average a 3% increase.  This forecast is broad.  Many people will receive a larger raise, while many others have experienced pay cuts, hour cuts, and furlough days.  Put on top of that increased contributions for health care, and we have poorer people across the U.S.

California Public Workers Held Hostage

According to today’s Los Angeles Times, Governor Arnold Schwarzenneger is attempting to cut state workers to minimum wage to force the legislature to deal with him on the budget.  California politics are hamstrung by propositions which limit taxing powers.  In a sense, this means that both the governor and legislators can claim some victim status. 

The governor, however, seems focused on attacking public employees as his way out of the problem.  The minimum wage strategy means to get the legislature’s attention.  More serious would be his threat to furlough employees.  The people of California (Kal – ee – for – nee – yuh in the Terminator’s language) will be rid of this “leader” soon.  The question remains if they will replace him with the former CEO of EBay, who will probably be worse. 

At some point, working people have to look in the mirror and admit that they often vote against their own best interest.

Chicago Teachers Fight Back

In These Times Magazine reports on changes in the Chicago Teachers Union.  While the incumbent leadership group won the first round of a recent election, it faces a new faction CORE (Congress of Rank and File) in a run off.  This group opposes the system’s recent move to replace traditional schools with charter schools.  The 30,000 member union has lost 6,000 members over recent years in which the number of charter schools have expanded. 

As I’ve written before, experts in the media and representatives of employers pack all the blame for their problems on employee salaries, usually salaries of working class and middle class workers.  Hopefully, CORE is a sign that working people are fed up with layoffs, salary cuts, and furlough days.  May working people in other industries follow the example of these brave teachers.

Follow this link to read the article.

Pay Issues at Chicago Public Schools

The Reader’s outstanding political reporter Ben Joravsky has investigated salaries at Chicago Public Schools.  Teachers and other employees that serve students are being laid off.  Assistant coaches are asked to work without pay.  Meanwhile, CEO Ron Huberman has added salaried staff.  According to Joravsky, 133 employees make $100,000 or more.  Several of these people formerly worked with Huberman at the CTA.

What bothers me most about this story is hypocrisy.  Huberman and his aides have no qualms about asking schools to tighten their belts, to cut staff and programs.  They want the teachers and their unions to agree to furlough days.  At the same time, the CEO and his staff have increased their salaries.  It’s nice to hear administrators say they want what’s best for students.  Stories like this indicate that they really care more about themselves.

Follow this link to read Joravsky’s story.

Scary News on Savings

The Chicago Sun-Times reports that 54% of Americans have saved no money in the last year.  The article goes on to tell people how to save:  Make a budget, don’t eat out, and save for retirement.

Good advice – however, what if half of Americans are living so close to the edge that they can’t save?  As I’ve written, many of my clients have taken pay cuts, furlough days, or shortened work weeks.  How can people save if they’re barely paying the bills.

This is a link to the article.  I’m not enthusiastic about recommending it.

Short Term Jobs: A Smart Option?

Today’s New York Times reports on the trend of  working people who prefer temporary jobs.  The article profiles Michael Sinclair of Atlanta, Georgia, who likes “contingent work” because it provides flexibility and time off between assignments.  For many other workers, temporary positions are all they can find.  The number of people who call themselves self-employed (a.k.a. contract workers) has more then doubled over the course of the recession. 

Mr. Sinclair’s fervor for short term jobs is a minority opinion.  As the article states, most workers are not happy with this trend.  Contract work offers no security.  It is a one way street designed and built by the employer.  As I’ve written before, this recession is not unique in a heavy number of layoffs.  What makes it different is changing models of compensation:  10%-20% pay cuts, lower commissions, and furlough days.  Add “short term jobs” to the list. 

Follow this link to read the article in the New York Times.