New “Fair Pay” Law for 2016 is “Fairly” Opaque

Since statistics tracked the difference in pay for men and women, women have been paid about 76 to 84 cents for every dollar earned by a man, holding constant factors such as education and skill. A federal law—the Equal Pay Act— was intended to address this but has been a bust because women in similar jobs to men cannot prove the disparity is due to gender differences. California will implement a new law in 2016 that aggressively tackles this problem. My take? The intentions are commendable, but no law can sort out the complex array of factors that affect pay. Research has shown, over and over, that men bargain more aggressively for starting pay and pay raises than women. Is that evidence of discrimination? No. The labor market consistently undervalues female dominated professions such as HR management, and pays more for accounting and financial management— male dominated fields. Controlling for education and managerial discretion, California employers might need to pay HR professionals (mostly women) more. My concern is that employers will actually go the other way, and pay men less. Is that progress? My ultimate worry is that this law will unleash a flood of “fair pay” lawsuits, leading some employers to classify workers as independent contractors, thereby avoiding this misguided employment law.

Japan Apolgizes for Comfort Women

After decades of denial and foot-dragging, Japan has directly and formally apologized to South Korea for using women as sex slaves for soldiers. It's another type of holocaust that is worsened by denial and obfuscation. Kudos to Prime Minister Abe for reversing course. Here's to a new year of healing for the victims and their families.

JFK and Trump: Are Americans "the Watchmen on the Walls of World Freedom?"

"We in this country, in this generation, are-- by destiny rather than by choice-- the watchmen on the walls of world freedom." Visiting the site of JFK's assassination, I found this memorial from a speech the president was scheduled to deliver the afternoon he was murdered. In JFK's never-delivered speech, he speaks of walls and the American people and exceptionalism. More than 50 years later, his "watchmen on the walls of world freedom" is replaced by a vision of Americans who build walls of fear and isolation.

Should the U.S. Allow Trademarks of Racial Slurs?

The "Slants" is an Asian-American music group that applied for a trademark of its edgy name. The U.S. government agency that grants trademarks rejected their application because of its racial overtones. The Washington Redskins have a similar dispute with the same office. This agency also has rejected the trademarking of anti-Islam groups. But is this an infringement of First Amendment rights? There are two main views to consider: 1. The government has no business in filtering free speech. 2. The government has no business to lend its legal protection to speech that promotes the degradation of a race or religion. A federal appeals court, in a split vote, has sided with the Slants. See here.

Is Arbitration Perverting Justice?

Arbitration is an ancient method to resolve disputes outside court. It dates to King Solomon’s private resolution of a maternity dispute. Today, it is a method for large corporations to gain huge leverage over workers, consumers, tenants and other “little people.” Investors are buying up uncollected debt on the cheap. They sue in court, and win a garnishment order. In the story below, the little guy has his Social Security benefits docked. The problem for the little guy: He wanted to challenge the debt he accrued but was denied access to court because he was compelled to agree to arbitration. The investor who bought up his debt had no such restriction, however. He went to court—with minimal forum fees—and won an enforceable order. Bottom line: Access to courts is determined, to a growing degree, by a person’s wealth—not by their need. (Thanks to Alan for this lead, here. )

Working with Advanced Cancer

Many people with advanced cancer still want to work. A new study finds that about one-third of patients with metastatic cancer, under age 65, continue to work. Dr. Michael Hassett, a researcher at Harvard Medical School and Dana-Farber Cancer Institute in Boston who wasn't involved in the study, said that “[p]atients may continue to work because they have to maintain their income and/or health care insurance coverage. Others may get a sense of normalcy from working, they enjoy their jobs, or they benefit from the time they spend with co-workers.” Dave Benton, pictured above, anchored WCIA news until a few days before he died with brain cancer. He-- and others who work through terminal cancer-- inspire us, as do their generous employers. For more, read here.

Incentive to Cheat by Misclassifying a Worker

Before Congress and states raise taxes, how about getting employers who cheat to pay employment-related taxes? See this U.S. Department of Labor report. For a typical worker whose annual income is $43,007, an employer can save $3,710 in employment taxes by misclassifying this person as an independent contractor. To illustrate: This type of cheating cost Texas $1.2 billion a year in employment-related taxes. See here. 

Misguided Faculty Resolution Opposes Criminal Background Checks

Too many employers indiscriminately require job applicants to disclose criminal convictions. This has an adverse effect on minority applicants—and more importantly, does not inquire as to the nature of the offense, how long ago it occurred, and how it relates to the job today. Thus, a person’s pot-possession or DUI or disorderly conduct conviction can prevent them from being considered for a job. The AFL-CIO— the main federation of American labor unions— favors a public policy that “bans the box,” and instead, allows employers to conduct a background check only after the individual has been selected for hiring. The AFL-CIO position states: ‘“Fair chance’ means policies like postponing background checks until later in the hiring process, so applicants can be judged by their qualifications first. It means weighing relevant factors, such as the age of the offense, its relatedness to the job and evidence of rehabilitation, before rejecting a qualified applicant because of a past record. Through executive action, the president can transform the federal government into a model employer for people with records.” 

UIUC has adopted the exact policy for faculty and staff that is favored by the American labor movement. It mandates a “criminal background check must be conducted after the selected candidate accepts a written contingent offer but prior to beginning employment.” If there is a conviction history, a campus committee must make “an individualized assessment of the conviction history and the job responsibilities in order to determine if the criminal conviction poses a level of risk that might preclude clearing the candidate for employment in the position, considering, but not limited to: i. the nature and seriousness of the underlying offense/conduct; ii. the relatedness of the offense/conduct to the position being sought; iii. the length of time that has elapsed since the conviction, end of sentence, and the offense/conduct, and iv. demonstrated rehabilitative efforts.” A faction of the UIUC Senate remains impervious to the reasonableness of the new policy. Their resolution—which passed on a no-confidence vote— claims “it is inequitable to include considerations of arrest or conviction record of an otherwise successful applicant.” By implication, they also oppose the policy endorsed by America’s largest and most progressive labor unions. To compare the UIUC and AFL-CIO policies, click on the UIUC Policy and the AFL-CIO Policy.

Research Update on “Boob Jobs in the Share Economy”

My study, "Boob Jobs in the Share Economy," focuses on 74 cases involving exotic dancers (all but one involve women). In these cases, the dancers are suing for wages (including overtime). The problem? Clubs don't pay them anything, and treat them as independent contractors. They work for tips. Dancers win more than 90% of the rulings. Why care about them? Apart from objectification of their sexuality, women are often forced into “landlord-tenant” relationships in order to rent dressing rooms and also stage time. Some pay a fee to enter the club each night. They frequently are required to pay tips to house moms, DJs, emcees, bar tenders, and bouncers. In other words, they don't earn wages and they are forced to pay their co-workers! Some earn "negative wages" (quote from a lawsuit) on a nightly basis.

I argue that this exploitation is indicative of a growing phenomenon where businesses shift costs to workers while avoiding employment taxes and other legal duties that are part of the formal employment relationship. In other words, the strip club is a more advanced form of Uber-style exploitation, where a woman’s body is treated as a just-in-time corporate asset to be shared with paying customers. Will you be the next asset who is objectified in a work relationship?

Keep Your Boss Out of Your Genes … Please

Would you use an online dating service from your employer? Of course not. It’s too personal ... none of your employer’s business. So why would people sign-up for genetic screening from their employer? Because it’s available and partially funded by your company? Because you cannot access genetic screening on your own by contacting these same providers? 

Today’s Wall Street Journal (click here) has a mostly positive view of this emerging employee benefit. For instance: “Twenty-nine Jackson Laboratory employees took ‘spit tests,’ sending small amounts of saliva in vials to be tested for variations on three genes—DRD2, an ‘eating behavior’ gene; MC4R an ‘appetite’ gene and FTO, a ‘body fat’ gene—associated with higher body fat and weight.” So far, I’m not impressed. The boss wants you to lose weight because it could cost him. He’s not testing you for cancer. The following is really disturbing: “Along with test results, Newtopia offers coaching based on the findings. For example, the company would advise more high-intensity exercise for a person whose ‘body fat’ gene suggests they are likely to retain fat.” Bottom line: Keep your boss out of your love life and your genes.

Menards: 60% Pay Cut to Managers Who Lose Union Drives

My interview with Bloomberg News is here (click to read). 

Will You Need to Incorporate to Work?

The Bureau of Labor Statistics groups self-employed workers into two categories: incorporated and unincorporated. Their most recent estimate shows there are 5.3 million self-employed workers who are incorporated, and 9.5 million self-employed workers who are unincorporated. See here (at bottom of data table). Given the growing reliance on “contract work” (see Uber)— and the increasing leverage that corporations have over many workers— will firms insist that individuals incorporate before they perform work for the organization? It would be a great way to shift the risks that inhere with employment—injury on the job, accidents and intentional torts by workers, sickness and injury, and so on— to the incorporated individual. And, it would add false allure to the idea of being your own boss. 

New Labor Laws for Gig Economy? Sure, If More Wealth Disparity Is the Goal

Greg Ip, a writer for the Wall Street Journal, is wrong when he writes about Uber’s legal problems: “The controversy highlights a little-appreciated gap in the U.S. economy: its labor laws and institutions haven’t kept up with how the needs of businesses and workers have changed. In the U.S., you are either an employee, or you aren’t. What the U.S. needs, a new study says, is a new category for gig-economy jobs that blends elements of both.” See here. For now, these rebuttal points: The latest take-down of unions in the American economy paves the way to emerging state legislation that allows Uber and similar firms to structure work as something other than employment. Second, the Uber trend exacerbates growing wealth inequality. Uber brags that its drivers make $20 per hour—but they fail to factor in the cost of owning, maintaining, and insuring a vehicle. And they don’t factor in the 100% cost of the Social Security tax that is borne by their contract drivers (instead of a 50%-50% split on the Social Security contribution). Third, Uber’s market capitalization is now over $50 billion—a figure that signals that shareholders and lenders expect to extract enormous profits from this arrangement. If the employment relationship is so overtaxed that employers want to shed jobs for this reason (a valid complaint!), why not tax jobs less and other things more—for example, consumption of goods and services above and beyond the basics of life (e.g., groceries)? 

A Precedent for Prejudice: Chae Chen Ping v. U.S. (1889)

Donald Trump’s desire to prevent all Muslims from entering the U.S. has a shameful precedent. The excerpt below captures the events that led up to enactment of the Chinese Exclusion Act. In this case, the Supreme Court upheld the authority of the U.S. to prevent all Chinese workers from entering the country. If a Muslim Exclusion Act is passed into law, will the current Supreme Court follow this precedent? That is the question posed here.

In December, 1878, the convention which framed the present constitution of California, being in session, took this subject up, and memorialized congress upon it, setting forth, in substance, that the presence of Chinese laborers had a baneful effect upon the material interests of the state, and upon public morals; that their immigration was in numbers approaching the character of an Oriental invasion, and was a menace to our civilization; that the discontent from this cause was not confined to any political party, or to any class or nationality, but was well nigh universal; that they retained the habits and customs of their own country, and in fact constituted a Chinese settlement within the state, without any interest in our country or its institutions; and praying congress to take measures to prevent their further immigration. This memorial was presented to congress in February, 1879. So urgent and constant were the prayers for relief against existing and anticipated evils, both from the public authorities of the Pacific coast and from private individuals, that congress was impelled to act on the subject. A statute was accordingly passed appropriating money to send commissioners to China to act with our minister there in negotiating and concluding by treaty a settlement of such matters of interest between the two governments as might be confided to them. The limitation or suspension shall be reasonable, and shall apply only to Chinese who may go to the United States as laborers, other classes not being included in the limitations. Legislation taken in regard to Chinese laborers will be of such a character only as is necessary to enforce the regulation....  

Toll in Workplace Violence: 749 Deaths in 2014

The U.S. Department of Labor collects data on workplace deaths. One category: violence. In 2014, 749 people died at work as a result of a violent attack. The data for these deaths—and others is searchable here.

Lessons About Anti-Immigrant “Fever”

The governor of Texas is threatening to sue a private agency that has resettled 180 Syrians since the civil war began in 2011, if the group continues to aid Syrians who are approved for refugee status by U.S. authorities. Governor Abbott cites safety concerns.

In 1942, Taroa Takahashi— a Japanese immigrant who was lawfully in the U.S. as a permanent resident—was taken to a U.S. concentration camp by military authorities. When he returned to his home in California, he was barred by a state law that denied non-citizens the right to fish. Takahashi was a commercial fisherman. He sued, claiming that the California denied him the right to equal protection under its laws. The Supreme Court agreed with him, and struck down the anti-immigrant law. Here is an excerpt from Justices Murphy and Rutledge:

The statute in question is but one more manifestation of the anti-Japanese fever [emphasis added] which has been evident in California in varying degrees since the turn of the century…. For some years prior to the Japanese attack on Pearl Harbor, these protagonists of intolerance had been leveling unfounded accusations and innuendoes against Japanese fishing crews operating off the coast of California. These fishermen numbered about a thousand and most of them had long resided in that state. It was claimed that they were engaged not only in fishing but in espionage and other illicit activities on behalf of the Japanese Government. As war with Japan approached and finally became a reality, these charges were repeated with increasing vigor. Yet full investigations by appropriate authorities failed to reveal any competent supporting evidence; not even one Japanese fisherman was arrested for alleged espionage. Such baseless accusations can only be viewed as an integral part of the long campaign to undermine the reputation of persons of Japanese background and to discourage their residence in California…. During the height of this racial storm in 1943, numerous anti-Japanese bills were considered by the California legislators…. We should not blink at the fact that Section 990, as now written, is a discriminatory piece of legislation having no relation whatever to any constitutionally cognizable interest of California. It is directed in spirit and in effect solely against aliens of Japanese birth. It denies them commercial fishing rights not because they threaten the success of any conservation program, not because their fishing activities constitute a clear and present danger to the welfare of California or of the nation, but only because they are of Japanese stock, a stock which has had the misfortune to arouse antagonism among certain powerful interests. The case is here.