Cultural awareness or corporate exploitation? From the October 16, 2011 NY Times:
The college student from Moldova was in the United States on a cultural exchange program run for half a century by the federal government, a program designed to build international understanding by providing foreign students with a dream summer of fun in America. So he summoned his best English for the e-mail he sent to the State Department in June.
“Pleas hellp,” wrote the student, Tudor Ureche. He told them about “the miserable situation in which I’ve found myself cought” since starting a job under the program in a plant packing Hershey’s chocolates near the company’s namesake town in Pennsylvania.
Students from other countries pay as much as $6,000 to come to the US as part of this program. They’re expecting to be able to make friends, work on their English speaking skills, sightsee, and have a summer job. A combination of education, work, and fun, in other words. The fun seems to have been left out of the equation.
Instead, many students who were placed at the packing plant found themselves working grueling night shifts on speeding production lines, repeatedly lifting boxes weighing as much as 60 pounds and financially drained by low pay and unexpected extra costs for housing and transportation. Their complaints to the contractor running the program on behalf of the State Department were met with threats that they could be sent home.
The students, who were earning about $8 an hour, said they were isolated within the plant, rarely finding moments to practice English or socialize with Americans. With little explanation or accounting, the sponsor took steep deductions from their paychecks for housing, transportation and insurance that left many of them too little money to afford the tourist wanderings they had eagerly anticipated.
Essentially, these students paid to come here and be exploited for the summer. After they’re gouged for housing and transportation costs they earn next to nothing, and in this case, they were working in unsafe conditions. It seems likely that this is NOT the kind of “international understanding” that the State Dept. was hoping to foster.
Hershey’s packing subcontractor is fined for safety violations. From the February 21, 2012 NY Times:
After a six-month investigation prompted by the protests of student workers on an international exchange program, the Labor Department on Tuesday issued fines of $283,000 for health and safety violations against a company that operates a plant in Pennsylvania packing Hershey’s chocolates, saying it had covered up serious injuries to workers.
The 24-page citation by the Occupational Safety and Health Administration found that the company, Exel, intentionally failed to report 42 serious injuries over four years to workers at the plant in Palmyra, Pa., or 43 percent of all such injuries in that period at the plant. The injuries, which were discovered by safety inspectors during their investigation, required medical treatment, and many were related to lifting and moving big boxes of Hershey’s chocolates along a packing line.
OSHA found that Exel (the subcontractor) had not recorded dozens of injuries. They also determined that that failure was not the result of ignorance, that they were deliberately not recording injuries. OSHA also determined that in 6 of the 9 violations, Exel willfully failed to protect workers; hence the high fines. Naturally, Exel is going to appeal the fines.
Labor officials said they had found an e-mail in which Exel managers explicitly decided not to provide audio protection for workers in the noisy plant, even though they were aware of the problem.
Jennifer J. Rosenbaum, legal director of the Guestworker Alliance, said the packing was too strenuous for an American worker to perform for a long time. “It was just another way they were turning long-term factory jobs into a job that even a 20-year-old student could not survive for more than a few months.”
The only reason we know anything about this, is because some 200 of the students walked off the job in Palmyra, some carrying signs. It was the first labor strike at the anti-union plant. Fining Excel is a good first step, but this entire program program is in need of an overhaul.
For more on the way these foreign students are exploited, check out this 2010 Associated Press investigation.
Tags: Pennsylvania, Rights At Work
A new report on gender inequity in the restaurant industry called Tipped Over the Edge was recently released. The executive summary and the full report are available at those links, in PDF form.
This is a 40 page report, and I’ve just skimmed the surface of it. All of this is very familiar territory to me–I worked in the restaurant industry for 20 years.
There are over 10 million restaurant workers in the United States. Approximately 52% of them are women. 66% of tipped workers are women. Tipped workers can be payed a sub minimum wage, which creates legalized gender inequity. From the report:
The restaurant industry is one of the only sectors in which predominately male positions have a different minimum wage than predominately female positions: non-tipped work- ers (52 percent male) have a federal minimum wage of $7.25, while tipped workers (66 percent female) have a federal subminimum wage of $2.13.
The federal rate is $2.13, though some states have a higher rate. Alaska, Montana, Minnesota, and California have eliminated the sub minimum wage. The federal sub minimum wage of $2.13 has been the same since 1991.
Female restaurant workers are paid less than their male counterparts for two primary reasons. First, they are concentrated in lower-paying segments such as quick-serve and family style, and second, they are not able to access the highest-paying positions in the industry. Women fill only 19 percent of chef positions, one of the highest paying restaurant positions with a median wage of $19.23. And at the lowest end of the pay scale, women are highly concentrated in four of the ten lowest paid occupations of any industry: host, counter attendant, combined food prep and serving worker, and server.
(Maryland Rep. Donna Edwards has filed the Wages Act, which would increase the federal minimum wage for tipped employees. The subminimum wage has been frozen at $2.13 for 21 years. An increase would provide a little more financial security for tipped employees in a bad economy.)
Then there’s health care, or lack thereof:
These wage inequities are exacerbated by lack of benefits that prevent restaurant workers from properly caring for their health and their families.Of the more than 4,300 restaurant workers ROC surveyed across the country, 90 percent lack paid sick days and 90 percent do not receive health insurance through their employers. One third of all female restaurant workers (33.4 percent) lack any kind of health care, whether provided by their employer or otherwise. More than a quarter (26.8 percent) of all female restaurant workers are mothers,and more than one in ten are single mothers,25 so the lack of paid sick leave and workplace flexibility creates an additional burden for women in the industry.
Sick people who can’t afford to take a day off go to work, where they prepare and serve food.
The low pay isn’t the only problem:
A recent MSNBC review of Equal Employment Opportunity Commission (EEOC) data revealed that from January to November 2011, almost 37 percent of all EEOC charges by women regarding sexual harassment came from the restaurant industry, even though less than 7 percent of employed women work in the restaurant industry.
The EEOC has identified the restaurant industry as the largest source of sexual harassment claims.
What I’ve seen in the report confirms what I learned from my own experiences in restaurants. I started out as a server, but quickly learned where the real money was, and learned to bartend and cook.
The flexible schedule worked fairly well for me as a single mother, but restaurant scheduling is often subject to last minute change, which can be` a real problem for women who have child care or elder care responsibilities. Many restaurants consistently overstaff the dining room, in case it gets busy. It’s not unusual to get sent home halfway through a shift, having made very little money. That subminimum wage paycheck doesn’t pay the bills.
Sexual harassment is certainly plentiful, as is discrimination. I worked in one kitchen where postcards of bare chested women adorned the walls. The chef had giant posters of scantily clad, silicone enhanced women in his office. To call it a hostile work environment doesn’t really do the situation justice. He didn’t want women working in his kitchen, and I didn’t stay long.
To be fair, I’ve also worked in a few great restaurants where the staff were treated like family, and even a few that offered health care benefits, which is a rarity.
As a server, getting sent home on a slow night, with little or no tip money was both painful and frightening. The industry is able to pay substandard wages because servers are tipped. Relying on the whims of the public for a paycheck can also be painful and frightening. One can provide excellent service and still receive no tip. The type of restaurant one works in is also a big factor. The tips are better in fine dining – but that isn’t an option for everyone.
The restaurant industry isn’t just “able” to pay substandard wages. They RELY on paying substandard wages, and they lobby fiercely for their right to do so. Right now in Florida, the legislature is considering a bill that would cut the subminimum wage for tipped employees in half. From Raw Story:
A Florida Senate committee has followed the advice of a restaurant association and passed a bill that would cut the minimum wage for tipped workers by more than half.
The bill, SB 2106, would slash the current Florida tipped minimum wage of of $4.65 an hour to the federal standard of of $2.13 an hour.
“We are being brave and bold and being statesmen and not politicians,” Republican state Sen. Nancy Detert, the committee’s chair, asserted, adding that the bill had been requested by the Florida Restaurant and Lodging Association.
Associated Industries of Florida and the Florida Chamber of Commerce have also expressed support for the bill.
I wasn’t aware that cutting the subminimum wage qualified one as a “statesman.”
One of those restaurant employees, Charles Spencer, is working at Raglan Road Irish Pub and Restaurant in Orlando to pay for his education. He told the Sentinel that the $11 or $12 an hour he currently makes barely pays the bills.
“It’s a lot of canned vegetables and grilled chicken and ramen noodles,” Spencer explained. “I was rather appalled by the fact they’re going to try to cut a wage standard in this economy.”
The Florida AFL-CIO’s Rich Templin said that the bill would effectively mean a more than $2.50 an hour pay cut for a waitress currently making $14 an hour.
This is shocking – in a bad economy, they would cut an already substandard subminimum wage? How very Dickensian.
To bring it back to the original topic; that cut in the subminimum wage in Florida would disproportionately hurt women, who make up the majority of tipped employees. At a time where people are dining out less, and tips aren’t as big as they once were, it’s a remarkable show of greed on the part of the restaurant industry, to try to cut an already criminally low wage.
Photo by avlxyz on Flickr, via Creative Commons
Tags: Florida, Jobs, wages
San Francisco recently carried out an audit on a number of foreclosures. Their findings were released in a report this week that shows just how rampant mortgage fraud has been. From Reuters:
The audit of almost 400 foreclosures in San Francisco found that 84 percent of them appeared to be illegal, according to the study released by the California city on Wednesday.
Similar studies around the country show comparable results. These numbers are astounding. And worse, they’ve essentially gotten away with it.
In many cases during the housing bubble that burst in 2008, original mortgages were repackaged and sold to so many investors that it is now unclear who actually holds the loans. O’Brien could only find the current owners of the mortgages he studied in 287 out of 473 cases.
In the San Francisco study, which studied properties subject to foreclosure sales between January 2009 to November 2011, 45 per cent were sold to entities improperly claiming to be the owner of the loan.
“It is not impossible that there are homeowners who are alleged to have defaulted on loans to which they never fully agreed to and, further, are being foreclosed upon by lenders that might not even own such loans,” the report stated.
This should be unimaginable. Instead it is chilling – the story of a largely unregulated financial industry gone amuck. The consequences to homeowners and their families is devastating. Of course the most chilling aspect of the whole mess is that the banks have never admitted to any wrongdoing. There have been no prosecutions. No banksters are wearing orange prison jumpsuits as a result of their role in defrauding millions of US homeowners.
Seth is right. The banks did get off too easy in the foreclosure/fraud settlement.
Tags: economy, Housing
As part of health care reform, the Dept. of Justice and the Dept. of Health and Human Services have taken serious action to combat Medicare fraud—and it’s working. From the Huffington Post:
Federal authorities say they recovered $4.1 billion in health care fraud judgments last year, a record high which officials on Monday credited to new tools for cracking down on deceitful Medicare claims.
The recovered funds are up roughly 50 percent from 2009.
“Fighting fraud is one of our top priorities and we have recovered an unprecedented number of taxpayer dollars,” Sebelius said in a statement. “Our efforts strengthen the integrity of our health care programs, and meet the president’s call for a return to American values that ensure everyone gets a fair shot, everyone does their fair share, and everyone plays by the same rules.”
Officials credited the spike in recovered funds in part to strike force teams set up in fraud hot spots around the country, including Miami, Detroit and Los Angeles.
The teams charged 323 defendants, who collectively billed the Medicare program more than $1 billion last year. That includes a massive bust in February 2011, in which more than 100 doctors, nurses and physical therapists were charged with fraud in nine states. Stopping Medicare’s budget from hemorrhaging that money will be key to paying for President Barack Obama’s health care overhaul.
By focusing on eliminating Medicare fraud, the Justice Dept, and the DHHS have recovered $4.1 million, up 50% from 2009. It’s a success of the Affordable Care Act we can already see. That’s good news for Medicare, for the Obama administration, and most of all, good news for U.S. taxpayers.
Maine legislators vote to kill Voter ID. From Think Progress:
Though Republicans enjoy full control over Maine’s lawmaking process, they’ve dropped a push to require certain photo identification in order to vote.
Though Maine Republicans were considering voter ID legislation at the beginning of the year, Democrats vociferously objected because the bill could prevent thousands of Mainers from voting, particularly elderly individuals. On Friday, Republicans acceded to those objections, striking the voter ID language from an election law bill. This is the second time voter ID has failed to pass the GOP-controlled Maine legislature. Last year, a voter ID bill failed in the Senate after first being passed by the House.
It does speak well for them that they were concerned about disenfranchising elderly voters. But:
Maine Republicans were chastened during the 2011 session after they passed a bill to eliminate the state’s 38 year-old law allowing for Election Day registration, only to see their move overturned by a citizens veto in November. More than 60 percent of Mainers rebuked the legislature and voted to restore Election Day registration.
This is the real bottom line. Over 60 percent of Maine voters trounced them with a citizen’s veto. They don’t want to get that kind of a public spanking again any time soon.
In place of this bill, the legislature voted in favor of a resolution. From Maine Public Broadcasting Network:
Put in its place was a resolve calling on the Secretary of State to study changes that might need to be made to Maine’s election system, “So that when we do do something there won’t be this tugging back and forth and running out to a people’s veto,” says Republican Committee member Sen. Deb Plowman of Hampden.
Plowman is referring to a vote that happened over another voting rights issue. In November, Maine voters soundly overturned a new law pushed by Republicans that banned the decades-old practice of allowing Election Day voter registration.
But Shenna Bellows of the American Civil Liberties Union of Maine challenged the need for legislators to call for a study. “In these difficult economic times, it’s irresponsible to waste taxpayer resources on a study to tell the secretary of state to do his job. It is not necessary to use a study to fix clerical errors or administrative errors,” Bellows says.
Summers says his primary concern is people voting when they shouldn’t be. He says his office is actively investigating instances of non-citizens participating in elections.
In September 2011, I wrote about Maine’s GOP Chair trying to create proof of widespread voter fraud by coming up with a list of 200 students that he claimed were voting fraudulently in Maine. This proved to be untrue, in all 200 cases – but this was the “reasoning” used to gin up folks to support a Voter ID law.
The resolution isn’t necessary, given that the Secretary of State was the one who investigated the nonexistent student voter fraud From the Bangor Daily News:
After a two-month investigation into possible voter fraud by college students and noncitizens, Maine Secretary of State Charlie Summers said Wednesday his evidence showed that none of the students committed fraud and only one noncitizen voted in Maine.
Nevertheless, Summers said his investigation confirmed his belief that Maine’s election system is “fragile and vulnerable,” and he vowed to submit legislation in January to fix some of the problems
Given that Summers has already announced his intention, the legislative resolution really isn’t needed.
This is good news for Maine voters and taxpayers – who really taught their legislature a lesson with the people’s veto of the bill to eliminate same day registration.
Voter ID continues to be a solution looking for a problem.
Tags: Maine, voting rights
From the New York Times:
This winter has been especially austere. As part of the drive to cut spending, the Obama administration and Congress have trimmed the energy-assistance program that helps the poor — 65,000 households in Maine alone — to pay their heating bills. Eligibility is harder now, and the average amount given here is $483, down from $804 last year, all at a time when the price of oil has risen more than 40 cents in a year, to $3.71 a gallon.
As a result, Community Concepts, a community-action program serving western Maine, receives dozens of calls a day from people seeking warmth. But Dana Stevens, its director of energy and housing, says that he has distributed so much of the money reserved for emergencies that he fears running out. This means that sometimes the agency’s hot line purposely goes unanswered.
So Mainers try to make do. They warm up in idling cars, then dash inside and dive under the covers. They pour a few gallons of kerosene into their oil tank and hope it lasts.
In cold climates, people with outside oil tanks burn kerosene, because regular heating oil turns into a gel when it freezes, and clogs up the pipes. Kerosene doesn’t freeze. It’s also even more expensive than regular heating oil.
For older Mainers who live in drafty houses, that $483 isn’t going to go very far. It’s not even enough to fill up the tank once. A standard oil tank holds 275 gallons. Right now in Maine the cost of oil is approximately $4.00 a gallon.
From the Huffington Post:
How the cuts affect low income households varies by state. In Vermont, the effect will be minimal: State lawmakers are dipping into reserves to make up the shortfall from Washington’s cuts.
No such luck in Maine, which saw its allotment drop from $56 million to $38.5 million. Last year 64,000 Maine households received LIHEAP assistance, with an average benefit of $804. The quasi-state agency that manages LIHEAP will make sure no fewer people receive assistance, partially by shifting funds and partially by slashing the average benefit to $483.
John and Joan McAdams, a Maine couple in their 70′s, are doing this:
“At night we leave it down to 50 and during the day right now we run it at 60 degrees,” he said. “This is ludicrous. The wealthy can handle it. We haven’t got any money. I go to the food bank. All I get is outdated cans and a lot of spaghetti. There’s a rich versus poor situation in this country. It’s bad.”
He’s right. This is bad. This is the end result of the austerity we heard mentioned so proudly: older people freezing in their homes in what is considered the wealthiest country in the world.
Tags: austerity, Maine
A new report by the Corporation for Enterprise Development (CFED)shows a major increase in what they call “asset poor” households:
In the United States, 27 percent of all households are “asset poor,” meaning they lack the savings or other assets to cover basic expenses for just three months if a layoff or other emergency leads to loss of income, according to the 2012 Assets & Opportunity Scorecard, released today by the Corporation for Enterprise Development (CFED). Since the release of the 2009-2010 Assets & Opportunity Scorecard, the number of asset poor families has increased by 21 percent from one in five families to one in four families. The asset poverty rate is now nearly twice as high as the Census Bureau’s official income poverty rate of 15.1 percent.
An increase of 21% is certainly significant.
“Growing numbers of families have almost no savings or other assets to see them through if they lose their jobs or face a medical crisis,” said Andrea Levere, president of CFED. “Without savings, few will be able to build a more economically secure future, including buying a home, saving for their children’s college educations or building a retirement nest egg.”
Levere added that the Scorecard findings are “particularly disturbing in the context of precipitous drops in incomes for many Americans and widening of the wealth gap between the richest and poorest households.”
Last year Business Insider provided us with fifteen graphs looking at income inequality and wealth in the US. Graph #5 above illustrates the flat wages many of us have experienced since at least 1990.
A look at key findings from the report shows something of crucial importance:
One in five jobs (22 percent) is low wage and nearly half of employers (46 percent) do not offer health insurance. Most workers (55 percent) do not have or participate in retirement plans. These low- quality jobs make it harder for families to both meet their needs today and create a reserve for tomorrow.
As wages continue to stagnate, good paying jobs are replaced with low wage jobs, and the costs of housing, food, transportation, heating oil, and everything else continue to rise, how will people save for the future, when they can’t even make ends meet in the present?
And why aren’t the presidential candidates talking about this?
Photo by woodleywonderworks on Flickr, via Creative Commons
In July I wrote about folk stampeding for Section 8 housing vouchers in Dallas, when thousands of people showed up, some waiting all night, to get vouchers for subsidized housing. It was a terrible story.
Since then, nothing much has changed, other than the fact that even more people are in need of affordable housing. From The Nation:
In Oakland, California, which opened its waiting list in January, officials expected as many as 100,000 people to apply for 10,000 vouchers. In Atlanta, sixty-two people were injured in 2010 at an East Point shopping center where 30,000 lined up after the local housing authority opened its waiting list for the first time in eight years. Even small communities like Aiken, South Carolina, saw hundreds queuing up in October for a chance at housing aid about as likely as seeing three cherries in a row on a Vegas slot machine.
Another way you can find tangible evidence of the housing affordability crunch is by visiting one of New York City’s exploding number of homeless shelters, where a record 41,000 homeless people bed down each night, including more than 17,000 children. The New York Times recently told the story of one of those children, fourth-grader N-Dia Layne, who travels two and a half hours each day between her Upper Manhattan shelter and her school in Brooklyn’s Brownsville neighborhood. In Cleveland, the number of homeless families and kids grew so rapidly this past summer that for the first time shelters were forced to eliminate daytime meals, housing-search assistance and other services in order to move workers to the overnight shifts, according to Brian Davis of the Northeast Ohio Coalition for the Homeless.
I had to read those New York numbers a few times. I can’t imagine that there are over 17,000 homeless children in New York City and this isn’t an issue being discussed in the endless presidential debates?
By nearly any measure, there are fewer and fewer homes affordable to working-class and poor Americans. The federal housing agency’s annual assessment finds that “worst-case housing needs” grew by 42 percent from 2001 to 2009, and nationwide there is a shortfall of nearly 3.5 million housing units for the poorest households. According to Harvard University’s Joint Center for Housing Studies, the share of renter households with the most severe cost burdens—that is, where more than half of income goes to rent and utilities—grew from a fifth to a quarter over the past decade and has doubled in the past half-century. And as household incomes stagnated for most of the past decade and then dropped during the economic crisis, the nation saw its already inadequate stock of cheap rental housing shrink even faster.
It’s pretty simple, really. The cost of living is increasingly high, while wages are increasingly low. It’s not a recipe for keeping a roof over one’s head.
All of the plans to “end homelessness in 10 years,” either are, or will be abject failures. The programs were all underfunded, and as the budget for federal housing programs continues to shrink, their failure is guaranteed. In the name of “deficit reduction” these programs are being cut, and cut again – with the goal being to eliminate them all together.
Despite the bleak policy landscape and the worsening affordability crisis, many local advocates and people working on the front lines talk about the renewed energy and hope generated by the nascent Occupy movement and the revived national discourse about income inequality. Donovan talks hopefully about the “other 1 percent”—the homeless and poor—saying that the concentration of wealth and power in the hands of the superrich 1 percent is “causing the other 1 percent to agitate, and to show that homeless people are something other than a herded mass. They’re saying, Enough is enough.”
The Occupy movement changed the national discussion when it began last fall. Instead of deficits and debt, we’re now hearing about income inequality, joblessness, and a host of other issues that weren’t even on the horizon over the summer. It is my hope (as someone living with housing insecurity) that Occupy brings housing to the forefront of our national dialogue.
Tags: California, Housing, New York
We hear a lot of talk about job creation, and bringing jobs back to America. We hear nothing about the kind of jobs we need the most: jobs that provide decent wages.
From the Los Angeles Times:
While productivity has grown by more than 80% over the last 30 years, wages have effectively been flat for 80% of Americans. So, although we’re making stuff faster and more efficiently, the benefits of that hard work have not trickled into the pockets of the people who do it.
In other words, more work for less pay.
First, companies are coming back to the United States because wages here are dropping, in real terms. At the same time, lower-wage corporate nirvanas such as China are no longer as cheap an alternative as they once were, partly because the sea of people who worked for next to nothing for so long have had enough and are rising up in protest.
The US is becoming the place to outsource low paying jobs to.
Second, most of the jobs coming back are not high-wage, union jobs with full healthcare and pensions. In fact, with concerted efforts by Republican governors in the Midwest to eviscerate union rights, times have never been better for corporate leaders seeking to lower labor costs. With labor costs in the U.S. dropping relative to those in the Third World, the president’s offer of tax incentives to other companies that in-source is unnecessary. As Citizens for Tax Justice points out, using a 2007 Bush administration study, corporations based in the United States already have plenty of tax incentive to locate here because “the United States takes a below-average share of corporate income in taxes compared to other developed countries.”
If you add those people to the people who have full-time work at or just above the minimum wage, at least 1 in 5 Americans — 30 million people — does not have a decent job. Which explains why, according to the Census Bureau, 46 million people — or about 15% of Americans — live in poverty, the highest percentage since 1993.
This is a nasty reality that politicians shy far, far away from, when they talk about jobs. Many of us (I’m one of that 15 percent) are relying on part time jobs, or low paying jobs that result in us not having enough to live on. This means more people relying on the shrinking safety net, and the kindness of family and friends.
We need the kind of jobs that will rebuild the middle class.
Tags: income inequality, Jobs
Food banks in Nevada are trying to reach small communities in rural areas by setting up mobile food pantries. A truck comes in, volunteers unload, and begin to distribute the food. By the time they finish, nothing is left.
From the Las Vegas Sun:
The mobile pantries differ from traditional pantries because they’re scheduled, mass-distribution events that can quickly serve thousands of people, said John Livingston, Three Square’s chief operating officer.
As the Sandy Valley operation proved successful, Three Square officials scouted other locations that would benefit based on factors such as access to grocery stores, nutritious food availability and existing agencies’ capacity to feed those in need, Livingston said.
Without having to rely on a fixed location, the trucks can travel to the areas that have the greatest need.
Grace Immanuel sits in ZIP code 89106, where 27 percent of residents may go hungry despite food stamps and other services already provided in the area, according to a Feeding America report using 2010 data. It’s the same situation in neighboring ZIP codes.
Other mobile pantries began in surrounding rural areas known as “food deserts”: Pahrump, Mesquite and, earlier this month, Laughlin, Livingston said. A Caliente location will begin in February, he added.
Given that Nevada consistently has the highest unemployment rates in the US, it’s good to see organizations working together to provide assistance to folks in small communities that are often underserved. This is truly a creative solution.