Category Archives: Labor

This $586.56 San Francisco Lawsuit Could Destroy The Entire ‘Gig Economy’, by Tyler Durden

Posted on September 12, 2017 | Leave a comment

If employer duties towards their “gig” workers, who are now considered independent contractors, must include the full panoply of obligations that they must assume if those workers are considered employees, then the “gig economy” is pretty much out the window. From Tyler Durden at zerohedge.com:

When Raef Lawson filed his $586.56 lawsuit in San Francisco he probably didn’t realize he could potentially end up disrupting the entire ‘gig economy’ that subsidizes a plethora of Silicon Valley tech giants from Uber to DoorDash, but that could very well end up being the outcome.

As Yahoo points out today, Lawson used to be a delivery driver for GrubHub but now he finds himself at the epicenter of an ongoing legal battle over whether 1099 contractors working for firms GrubHub and Uber should really be counted at employees rather than independent contractors.

In a windowless, 15th-floor courtroom in downtown San Francisco last week, GrubHub was defending its 1099 independent contractor employment model for its delivery drivers.

There’s no verdict yet, and there probably won’t be for at least another week. This trial, Lawson vs. GrubHub, is looking to determine whether or not plaintiff Raef Lawson, an ex-GrubHub driver, was misclassified as an independent contractor while delivering food for GrubHub.

Lawson’s lawyer, Shannon Liss-Riordan (pictured below), has spent a good chunk of time in this trial focusing on the amount of control she perceived GrubHub to have over Lawson during the time he delivered food for them. She’s trying to prove that Lawson’s employment met the conditions of the Borello test, which looks at circumstances like whether the work performed is part of the company’s regular business, the skill required, payment method and whether the work is done under supervision of a manager. The purpose of the test is to determine whether a worker is a 1099 contractor or a W-2 employee.

To continue reading: This $586.56 San Francisco Lawsuit Could Destroy The Entire ‘Gig Economy’

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The Truth About Labor Day, by Gary Galles

Posted on September 5, 2017 | 1 comment

Organized labor probably has hurt more workers than it has helped. From Gary Galles at mises.ca:

Labor Day is supposed to honor all American workers. And every year, union Labor Day rhetoric does just that. Unfortunately, it then makes the false leap to the claim that unions advance the interests of all American working men and women, not just their members. In fact, despite unions’ pro-worker rhetoric, the effect of most union activities and union-backed policies is to harm most American workers.Unions succeed by preventing competition from other workers who are willing to do the same work for less. Those workers either become unemployed or must go elsewhere to find jobs, increasing the supply of labor services in non-union employment, pushing down wages for all workers in such jobs as a result. The resulting union wage premium does not come out of the pockets of employers as much as from the pockets of other workers, as a result. Since less than 10 percent of the American private-sector workers are unionized, this means that more than 90 percent of private-sector workers are injured by this most basic exercise of union power.

Anti-worker effects are also vividly illustrated by the history of union violence and threats against “non-cooperative” employees. There have been thousands of attacks against such workers in recent decades, and well more than 100 deaths.

Aware that their government protection against workers who are willing to do the same job for less stops at the border, unions have also been the primary movers behind government protectionism of all stripes. But protectionism undermines the interests of all those workers who would have gained from expanded exports, as well as those who, as consumers, would have gained from access to lower cost and superior quality imports.

To continue reading: The Truth About Labor Day

 

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Minimum Wage Cruelty, by Walter E. Williams

Posted on July 12, 2017 | 2 comments

Virtue signalling, preening, and patting themselves on the back, proponents of minimum wages rarely give a thought to those who lose their jobs. From Walter E. Williams at lewrockwell.com:

There are political movements to push the federal minimum hourly wage to $15. Raising the minimum wage has popular support among Americans. Their reasons include fighting poverty, preventing worker exploitation and providing a living wage. For the most part, the intentions behind the support for raising the minimum wage are decent. But when we evaluate public policy, the effect of the policy is far more important than intentions. So let’s examine the effects of increases in minimum wages.

The average wage for a cashier is around $10 an hour, about $21,000 a year. That’s no great shakes, but it’s an honest job for full- or part-time workers and retirees wanting to earn some extra cash. In anticipation of a $15-an-hour wage becoming federal law, many firms are beginning the automation process to economize on their labor usage.

Panera Bread, a counter-serve cafe chain, anticipates replacing most of its cashiers with kiosks. McDonald’s is rolling out self-service kiosks that allow customers to order and pay for their food without ever having to interact with a human. Momentum Machines has developed a meat-flipping robot, which can turn out 360 hamburgers an hour. These and other measures are direct responses to rising labor costs and expectations of higher minimum wages.

Here’s my question to supporters of higher minimum wages: How compassionate is it to create legislation that destroys an earning opportunity? Again, making $21,000 a year as a cashier is no great shakes, but it’s better than going on welfare, needing unemployment compensation or idleness. Why would anybody work for $21,000 a year if he had a higher-paying alternative? Obviously, the $21,000-a-year job is his best-known opportunity. How compassionate is it to call for a government policy that destroys a person’s best opportunity? I say it’s cruel.

To continue reading: Minimum Wage Cruelty

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Posted in Business, Economics, Economy, Government, Labor, Uncategorized

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The Minimum Wage — Science Strikes Back, by Paul Jacob

Posted on July 2, 2017 | 1 comment

The headline should have said, “Reality Strikes Back,” because minimum wage laws having nothing to do with science. However, as with the outcome of certain scientific demonstrations, the outcomes of minimum wage laws are known before they’re enacted. From Paul Jacob at townhall.com:

It should shock no one: denying unskilled workers the opportunity to sell their labor for less ends up disadvantaging those unskilled workers against better-skilled ones.

That’s precisely what standard economic theory predicts. It’s what common sense should tell you.

And it’s what a major new study — with access to more data sets than ever before — says does happen. Minimum wage laws put workers at the lowest rung of the economic ladder out of work.

But, but . . . I hear the sputtering: minimum wage laws are nearly everywhere, and sure are popular.

Well, not every popular idea about policy is good. Or bad.

So how do we tell the difference?

One way is evidence.

The modern administrative state was promoted heavily by social scientists who thought that piecemeal social engineering should be tested. A few even thought that the older experiment in limited-government federal republicanism gave Americans a near-ideal testing ground: “the laboratoriesof democracy.”

Which is why the new study is so interesting. Activists and politicians have been pushing big increases in the minimum wage in cities around the country. Seattle, Washington, has been one of those, establishing an $11.00/hour legal minimum in April of 2015, then raising that minimum by two dollars in 2016. The City of Seattle commissioned a study of “the wage, employment, and hours effects of the first and second phase-in of the Seattle Minimum Wage Ordinance,” and it shows clear results.

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Manufacturing Companies Struggle To Recruit Workers For High-Paying Management Jobs, by Tyler Durden

Posted on June 28, 2017 | 1 comment

There are jobs out there for those who know things that are useful to employers. From Tyler Durden at zerohedge.com:

Americans who are hoping to avoid the shackles of student debt and proceed straight from high school into the workforce have more options for well-paid gainful employment than they might think. Even as the ROI on college degrees continues to decline, employers in certain blue-collar industries are struggling to fill management jobs that pay as much, or more, than jobs that require a college degree.

One such employer, 84 Lumber Co, is spending millions on advertising to spread its message that a management-track job at one of its stores can be more valuable than a college degree. The company pays trainees $40,000 a year, but employees in charge of top-grossing stores can earn as much as $200,000 a year. And some of those stores, managers earn more than $1 million. All without paying $60,000 a year in tuition to double major in art history and women’s studies, according to Bloomberg.

And 84 Lumber is hardly alone in it recruiting push: Associated General Contractors of Colorado is spending $2 million on recruiting and apprenticeships. Carpentry Contractors Co. in Minnesota hired a comedian to star in recruiting videos that have racked up a quarter-million views on YouTube.

One trainee quoted by Bloomberg was supposed to be the first person in his family to graduate from college, but he dropped out of Kent State and took a job at 84 Lumber instead. When asked why he left, he said he believes the experience of his management-training job with 84 Lumber is more valuable than that conferred by a college degree.

“Sabastian Kleis, the son of a waitress from Rust Belt Ohio, was supposed to be the first person in his family to graduate from college. Instead, he dropped out of Kent State University after two years. By most accounts, Kleis, 24, should be flipping burgers. But on a recent afternoon a lumber company was grooming him for a management job

“You can go to college and learn the theology of the Roman Empire,” says Kleis, who just completed a three-day training program at 84 Lumber’s rural Pennsylvania headquarters. “You learn all this ridiculous nonsense, and when you get out, what are you applying that to? I know how to frame a house.”

To continue reading: Manufacturing Companies Struggle To Recruit Workers For High-Paying Management Jobs

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Seattle Min Wage Hikes Crushing The Poor: 6,700 Jobs Lost, Annual Wages Down $1,500 – UofW Study, by Tyler Durden

Posted on June 26, 2017 | 1 comment

If you increase the price of a good or service, including labor, you reduce the demand. From Tyler Durden at zerohedge.com:

Just last week we noted that McDonalds launched plans to replace 2,500 human cashiers with digital kiosks like the ones below (see: McDonalds Is Replacing 2,500 Human Cashiers With Digital Kiosks: Here Is Its Math):

Of course, no matter how much anecdotal and/or hard evidence is presented to liberals on the negative consequences on higher minimum wages they simply can’t be convinced it’s a bad idea.  Somehow, the basic economic concept that raising the price of good (i.e. wages) would somehow destroy demand (i.e. employment levels) for that good just does not compute in the minds of progressives.

Never the less, below is yet another study from economists at the University of Washington that reveals some fairly startling takeaways about Seattle’s minimum wage.  Per the chart below, minimum wages in Seattle increased from $11 in 2015 to $13 in 2016 and $15 in 2017 for large employers.

To our total shock, the study found that higher minimum wages caused a 9.4% reduction to total hours worked by low-skilled workers, or roughly 14 million hours per year.  Given that a full-time employee works 2,080 hours per year, that’s equivalent to just over 6,700 full-time equivalents who have lost their jobs, just in the city of Seattle, courtesy of moronic politicians who don’t seem to grasp basic mathematical concepts.

Our preferred estimates suggest that the Seattle Minimum Wage Ordinance caused hours worked by low-skilled workers (i.e., those earning under $19 per hour) to fall by 9.4% during the three quarters when the minimum wage was $13 per hour, resulting in a loss of 3.5 million hours worked per calendar quarter. Alternative estimates show the number of low-wage jobs declined by 6.8%, which represents a loss of more than 5,000 jobs. These estimates are robust to cutoffs other than $19.45  A 3.1% increase in wages in jobs that paid less than $19 coupled with a 9.4% loss in hours yields a labor demand elasticity of roughly -3.0, and this large elasticity estimate is robust to other cutoffs.

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The U.S. Economy is a Perverted, Neo-Feudal, Rent-Seeking Abomination, by Michael Krieger

Posted on June 23, 2017 | Leave a comment

From GE funding share buybacks (which supports the price of executive stock options) instead of its underfunded pension, to trucking companies that indenture their drivers, it’s a nasty world out there, and it’s getting nastier. From Michael Krieger at libertyblitzkrieg.com:

The banker bailouts of the 2008/09 period changed my life forever. I was working on Wall Street at the time, and the way in which the government rallied around the financial institutions that torched the world and left its victims in the dust threw my entire delusional worldview into disarray. Prior to that, I had bought into the absurd assumption that I was financially successful at a young age primarily because I was hard-working and talented. The ensuing bailouts and the government’s emphasis on obsessively rescuing some of the most degenerate people in our society made me realize once and for all how completely rigged and sleazy the U.S. economy really is. As you might expect, it only got worse under Obama’s oligarch-coddling policies and will surely continue to deteriorate under Trump (Goldman Sachs is not your friend).

Ever since I left my cushy financial services job to do the challenging and often draining work of chronicling our ongoing crime scene, I’ve spent the vast majority of my free time trying to further educate myself on exactly how this system works. What I’ve discovered over and over again is that it is far more abusive than even I imagined.

Today’s post highlights two important articles that came to my attention over the past couple of days. Both are extremely disturbing, and both should be seen as completely unacceptable in a remotely ethical civilization (which we are not).

First, here’s a short excerpt from a recent Bloomberg article highlighting GE’s pension shortfall, and how it’s gotten worse as executives focused on share-buybacks as opposed to funding the pension.

It’s a problem that Jeffrey Immelt largely ignored as he tried to appease General Electric Co.’s most vocal shareholders.

But it might end up being one of the costliest for John Flannery, GE’s newly anointed CEO, to fix.

At $31 billion, GE’s pension shortfall is the biggest among S&P 500 companies and 50 percent greater than any other corporation in the U.S. It’s a deficit that has swelled in recent years as Immelt spent more than $45 billion on share buybacks to win over Wall Street and pacify activists like Nelson Peltz.

To continue reading: The U.S. Economy is a Perverted, Neo-Feudal, Rent-Seeking Abomination

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