Some real “job killers”: Executive salaries, bullying managers, health care costs, and demanding stockholders

The Chamber of Commerce and other powerful trade organizations are fond of using the term “job killer” to denigrate virtually any proposed legislation or regulation that protects workers, consumers, or the environment. They claim that costs of prevention and compliance drain monies that otherwise would be used to create jobs.

Sort of true, but not really

Technically, perhaps they can make a case: If one assumes there’s a fixed pot of money marked “for wages, salaries, and benefits,” and the costs of complying with pesky labor, consumer, and environmental protections must come out of that pot, then I suppose the regulations can be called job killers.

But one does not have to be a corporate accountant to know that organizational budgeting doesn’t work that way. The costs of social responsibility can come out of other buckets of money as well.

Instead, take a look

In any event, in the interest of fair play, let’s consider an alternate list of job killers:

Executive salaries — Exorbitant executive salaries and accompanying perks surely kill jobs, especially when the high pay isn’t merited due to poor performance. A mediocre CEO earning $300,000 is just as good as a mediocre CEO earning $1 million, except that with the $300,000 CEO, there’s another $700,000 left over to hire more workers.

Bullying managers — Workplace bullying increases employee attrition, absenteeism, and health care costs, while driving down employee morale and productivity — all of which have negative bottom line impacts. In the U.S., the significant majority of workplace bullying is perpetrated by managers and supervisors.

Health care costs — Attempts to create affordable, quality health care for all are continually thwarted by corporations, insurance companies, and pharmaceutical companies that lobby Congress and state legislatures and form political action committees to reward their friends in elected office.

Demanding stockholders — Stockholders who pressure corporations to post sky-high profits rather than reasonable ones are, in essence, drawing from monies that could be used to hire workers and pay them a living wage.

It’s not quite so easy

Okay, I admit, it’s more complicated than that. The business, labor, and regulatory climate in the U.S. is multifaceted, to say the least. Fixing unemployment and a huge earnings gap, among other things, requires more than serving up competing bullet points.

But if we’re even going to consider the claim that safeguarding workers, consumers, and our planet kills jobs, then at least let’s look at other major factors that curb job creation and preservation.

Our low “spirit level”: America ranks 27th out of 31 nations in global social justice study

Based on measures of social justice, America ranks 27th among 31 member nations of the Organization for Economic Co-Operation and Development (OECD), according to “Social Justice in the OECD — How Do the Member States Compare?,” a report released last week by Bertelsmann Stiftung, a private German foundation.

Here are some of the low points for the U.S. in the report:

  • 28th in income inequality
  • 29th in poverty prevention
  • 28th in child poverty
  • 22nd in unemployment and long-term unemployment
  • 20th in access to education
  • 23rd in health care
  • 25th in debt levels

In no category does the U.S. place in the higher ranks.

Overall, the four nations ranked immediately above the U.S. are Portugal, Slovakia, South Korea, and Spain. Only Greece, Chile, Mexico, and Turkey rank below the U.S.

“We should be ashamed”

New York Times columnist Charles M. Blow references the study and writes:

We have not taken care of the least among us. We have allowed a revolting level of income inequality to develop. We have watched as millions of our fellow countrymen have fallen into poverty. And we have done a poor job of educating our children and now threaten to leave them a country that is a shell of its former self. We should be ashamed.

The Times also prepared an excellent graphic that highlights selected measures in the report. The full report is only 50+ pages, with lots of easy-to-read charts and summaries.

America’s “spirit level”

In The Spirit Level: Why Greater Equality Makes Societies Stronger (rev. ed. 2010), British epidemiologists Richard Wilkinson and Kate Pickett examined comparative economic and social data and found that social and health problems worsen as inequality grows.

In fact, overall wealth is less predictive than distribution of wealth in forecasting the well-being of a populace. In terms of public health, they found that while the poor are the biggest beneficiaries of greater equality, the wealthy make gains as well. Here’s a short YouTube video of Wilkinson and Pickett explaining their book:

The U.S. fares poorly in The Spirit Level as well, mirroring the findings of the OECD study.

Conclusion

What else is there to say? America, we’ve got our work cut out for us.

Unpaid interns for “Black Swan” file wage claim against Fox Searchlight Pictures

Two unpaid interns who worked on the crew of the movie “Black Swan,” Alex Footman and Eric Glatt, are suing Fox Searchlight Pictures, alleging that the failure to pay them violated minimum wage and overtime rules.

As reported by Steven Greenhouse for the New York Times (link here):

One plaintiff, Alex Footman, a 2009 Wesleyan graduate who majored in film studies, said he had worked as a production intern on “Black Swan” in New York from October 2009 to February 2010.

He said his responsibilities included preparing coffee for the production office, ensuring that the coffee pot was full, taking and distributing lunch orders for the production staff, taking out the trash and cleaning the office.

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The other named plaintiff, Eric Glatt, 42, who has an M.B.A. from Case Western Reserve University, was an accounting intern for “Black Swan.” He prepared documents for purchase orders and petty cash, traveled to the set to obtain signatures on documents and created spreadsheets to track missing information in employee personnel file.

This is a welcomed development.  I have long argued (see link to law review article below) that most unpaid internships violate minimum wage laws and other labor standards.

In addition, the failure to pay interns leaves them more vulnerable to discrimination and sexual harassment. At least one federal court has held that unpaid interns cannot bring a claim under the Civil Rights Act because they are not employees within the meaning of the law.

This will be an interesting case. Stay tuned!

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Additional information

For more blog posts on interns and the law, go here.

To download, without charge, a copy of my 2002 Connecticut Law Review article, “The Employment Law Rights of Student Interns” — hailed by Ross Perlin’s Intern Nation (2011) as “the best single source of information” on student internships and the law — go here.

Fresno school superintendent Larry Powell gives up salary, seeks to protect kids from bullying

This story sounds too good to be true, but I’ll run with it anyway: It’s about a public school superintendent who (1) gave up most of the remaining $800,000 on his contract; (2) serves as a leader in the anti-bullying movement for kids; and (3) earns praise from a leader of a union that negotiates with the school district.

Meet Larry Powell, age 63, the Fresno County (CA) School Superintendent. Tracie Cone of the Associated Press files this story about him (link here):

Some people give back to their community. Then there’s Fresno County School Superintendent Larry Powell, who’s really giving back. As in $800,000 — what would have been his compensation for the next three years.

Until his term expires in 2015, Powell will run 325 schools and 35 school districts with 195,000 students, all for less than a starting California teacher earns.

“How much do we need to keep accumulating?” asks Powell, 63. “There’s no reason for me to keep stockpiling money.”

Cone further reports that Powell “serves on the board of a national anti-bullying group that sprang from the Columbine shootings” and “is so popular he even counts among his friends his contract bargaining nemesis, the former head of the employees’ union.”

Early adversity

It has been a recurring theme on this blog to tout the impact of personal resilience and overcoming adversity in creating society’s difference makers. As Cone adds, Powell fits the bill:

He even sees as an asset his childhood contraction of polio, which left him with a limp and a brace, and now a lingering post-polio syndrome.

“It’s the most spectacular thing that has happened to me in all my life,” he said. “People stepped up to help me be successful.”

Giving back

News accounts indicate that Powell and his wife are secure for retirement and that he’s already reached the maximum pension under the California system. So it’s not as if he’s taking a vow of poverty by giving up most of his remaining salary.

But that doesn’t mean we should dismiss the significance of this gesture.

Right now we’re witnessing a mini-debate over whether America’s super rich should pay higher income taxes, sparked by Warren Buffett’s recent op-ed piece positing that he and other billionaires should be taxed at a higher rate for the betterment of society. By comparison, Larry Powell — a well-compensated public servant — has taken an immediate action route, opting to forgo most of his remaining salary. Bingo. Done.

We need such role models in visible positions, and it appears that Powell is one of those rarities. Take a look at Cone’s article and see if you don’t feel a little bit better about the ability of individuals to inspire others and serve as positive examples.

Post-meltdown America: An economic recovery for the wealthy

As our economy teeters on the brink of another recession (even as the “old” one never seems to have disappeared), here are three indicators that the wealthiest among us have been the primary beneficiaries of any recovery from the big meltdown:

1. Executive raises make a comeback

Matt Krantz and Barbara Hansen of USA Today report that executive raises in 2010 made a comeback after a leaner 2009 (link here):

The heads of the nation’s top companies got the biggest raises in recent memory last year after taking a hiatus during the recession.

At a time most employees can barely remember their last substantial raise, median CEO pay jumped 27% in 2010 as the executives’ compensation started working its way back to prerecession levels, a USA TODAY analysis of data from GovernanceMetrics International found. Workers in private industry, meanwhile, saw their compensation grow just 2.1% in the 12 months ended December 2010, says the Bureau of Labor Statistics.

2. Many of the new jobs aren’t good jobs

We know that the unemployment rate remains at a high level. Unfortunately, it gets worse: A National Employment Law Project report, The Good Jobs Deficit (pdf here), informs us that jobs created since the meltdown have been concentrated in lower wage tiers:

In the weak recovery to date, employment growth has been concentrated in lower-wage occupations, with minimal growth in mid-wage occupations and net losses in higher-wage occupations. From the first quarter of 2010 through the first quarter of 2011, lower-wage occupations grew by 3.2 percent, with retail salespersons, office clerks, cashiers, food preparation workers  and stock clerks topping the list.  Mid-wage occupations grew by only 1.2 percent and higher-wage occupations declined by 1.2 percent. 

3. I shop, therefore I am

Stephanie Clifford reports for the New York Times that the rich are once again whipping out their platinum cards (link here):

Even with the economy in a funk and many Americans pulling back on spending, the rich are again buying designer clothing, luxury cars and about anything that catches their fancy. Luxury goods stores, which fared much worse than other retailers in the recession, are more than recovering — they are zooming.

And everyone else?

Just about everyone else in America (not to mention around the world) is in a state of economic anxiety, if not downright struggle. And until we understand that a small number of people are benefiting from this insecurity and want, backed by complicit public policy makers who gratefully accept their campaign contributions, we will not be able to forge a national and global consensus for humane change.

Ross Perlin’s Intern Nation explores the internship phenomenon

The first book-length examination of the sociological, economic, educational, and legal aspects of internships, Ross Perlin’s Intern Nation: How to Earn Nothing and Learn Little in the Brave New Economy (2011), has been published by Verso.

This is a badly needed book. As Perlin writes, internships are “a new and distinctive form, located at the nexus of transformations in higher education and the workplace.” During the past few decades, internships have become a virtual requirement for undergraduate, graduate, and professional students in many fields. Perlin estimates that “between 1 and 2 million people participate in internships each year in the U.S.”

In other words, we’re talking about a practice that involves a lot of people, mostly younger folks readying themselves for entry into a profession.

“Intern Bill of Rights”

In an Appendix, Perlin sets out his “Intern Bill of Rights,” a statement of nine provisions concerning compensation, fair treatment, legal protections, and personal dignity. It’s an excellent starting place for developing best practices and sound public policies covering interns.

“A Lawsuit Waiting to Happen”

Unfortunately, many interns are unpaid — as I have written, often in apparent violation of minimum wage laws. Perlin takes this thread and builds it into a chapter examining the many legal implications of internships.

Perlin makes special note of situations involving sexual harassment of unpaid student interns. He concludes, “This is the part you didn’t know; when something does happen, unpaid interns are largely on their own, without protection or recourse, caught in a frightening legal limbo.”

We concur!

I raised many of these legal concerns in my 2002 law review article, “The Employment Law Rights of Student Interns,” which Perlin graciously cites as the “best single source of information for American internships and the law.” You can download a free copy here.

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Related posts

On the practice and legality of unpaid internships

News flash! Unpaid internships may be illegal

The legality and ethics of unpaid internships 

Workers aren’t reaping the benefits of America’s productivity gains

A new Economic Policy Institute report indicates that shareholders, not everyday workers, have reaped the lion’s share of the benefits from America’s considerable productivity gains over the past 20 years. According to Zachary Roth, writing for Yahoo! News (link here):

Despite large gains in productivity over the last two decades, the report finds, wages for American workers have been stagnating.

The study… by Lawrence Mishel and Heidi Shierholz of the Economic Policy Institute, found that productivity grew by a whopping 62.5 percent between 1989 and 2010, but that real hourly wages increased by just 12 percent over the same period. That suggests that companies are giving far more of their profits to shareholders, and far less to workers. Indeed, corporate profits are 22 percent above where they were before the recession.

Perhaps there are no big surprises here, as the EPI study merely documents what a lot of workers have been experiencing in their paychecks. Still, it’s useful to assemble this data to show how our economic system has been rigged to benefit the most fortunate.

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The full report by Mishel and Shierholz, The Sad but True Story of Wages in America, can be downloaded here.

Ezra Klein comments further about the EPI report for the Washington Post, here.

Are you addicted to low-paying jobs?

(Image courtesy pdclipart.org)

(Image courtesy pdclipart.org)

Anne Kadet, in a piece for the Wall Street Journal (link here, via Yahoo! Finance), suggests that for some educated and capable people, the quest to earn a decent income may be frustrated by “a compulsive addiction to low-paying work.” For example:

“Jean” . . . has a typical story. She’s attractive, ridiculously articulate and has a master’s degree from Columbia. When she “hit bottom,” the 30-something writer was earning $10,000 a year doing freelance work and falling behind on the rent. Her solution? She applied for a job at Staples.

And for “Jean” and others like her (at least those in New York), there’s now a support group to help them out:

A tiny but growing fellowship of New Yorkers might suggest that the problem isn’t the economy. The problem is you. . . . . And they have a 12-step program to help you recover: Underearners Anonymous.

Kadet describes Underearners Anonymous as “an intensely practical program” designed to help members realize their earning potential. Peer counseling, workshops, and homework are among the pieces of the UA approach.

Uncomfortable topic…at least for me!

Is this wacky or what? A 12-step program for people who don’t want to earn more money?!

But wait a minute. I get this. Indeed, I confess that talking about money makes me uncomfortable. Part of it stems from growing up in a family that struggled financially at times. Another part of it is rooted in my knee-jerk belief that making too much money is morally wrong — while conceding that my definition of “too much” has risen with my own income.

Those attitudes have impacted some of my choices. During my last year of law school, I turned down an offer to join the large corporate law firm that I had interned with during the previous summer. Instead — with great delight and not a small amount of self-congratulations — I took a job as a Legal Aid lawyer starting at $20,000.

As my income has gone up, it has been accompanied by a greater sense of (1) security (phew, I can buy a condo and save some money!); (2) possibilities (it’s nice to be able to buy some toys); (3) insecurity (I could lose this all); and (4) guilt (by earning more, I am less virtuous than that young Legal Aid lawyer earning 20K in 1985).

So yes, I understand inner turmoil about money — and I agree that there is a genuine psychological component accompanying the moral, economic, and political questions about income and wealth.

The real problem is more systemic

But hold on for another minute. All the Underearners Anonymous sessions in the world won’t recreate the decent jobs that have disappeared during the Great Recession. Furthermore, there is ample reason to be alarmed about the distribution of wealth and income, especially here in America, where the gaps are among the highest in our history and the developed world.

We may disagree on the causes of, and solutions for, our current economic mess, but the fact remains that there simply aren’t enough good jobs to go around right now. And in the meantime, a very small number of people continue to rake in untold sums of money. So…when it comes to rescuing this economy, our main priorities must be to help the people hurt by it, create good jobs, and narrow the wealth gap.

But as a side focus, I think there’s something to what Underearners Anonymous is doing. True, coaching cohorts of income-resistant Ivy Leaguers shouldn’t be our highest therapeutic priority. However, more than a few talented people regardless of educational pedigree have very ambivalent feelings about money, and this may be preventing them from earning a better living for themselves and their families.

“I’ll write for free!”

I grew up with the assumption that if you could write well, you’d never be wanting for life’s necessities.  But last year I posed the question of whether journalism was becoming a form of volunteer work:

Are the Internet and the blogosphere turning journalism into volunteer work, an avocation instead of a vocation?

…As the Information Age continues to go digital, we now expect online content to be freely accessible without charge.  But we rarely think of this as a labor issue, failing to consider, say, that free online access may be depressing reporters’ salaries and eliminating paid positions in newsrooms.  The digital highway certainly has created a lot of jobs, but ironically it may be contributing to the demise of journalism as vocation.

And now fiction

Yesterday I stumbled onto a blog post by T.A. Olivia in Darksculptures speculating on whether good fiction will go the same way:

My question is will readers who have become accustomed to getting free material once again pay to read your work?  Or, will they move on to the next free rising star? There is a deluge of good stories to read. Jennifer Lawler admits this in an article titled 5 Myths You Shouldnt Believe About Agents that appeared in on Writer’s Digest website. Jennifer said,

“My problem isn’t how much bad writing crosses my desk. That’s easy to recognize and reject. The problem is how much good writing I see.”

Great for exposure, bad for the bank account

The Internet is a wonderful medium for circulating one’s work.  Even a modest blog can attract a readership well beyond those of the small circulation “little magazines” and zines that we so romanticize and associate with new voices and waiting-to-be-discovered talent.

But it is not necessarily translating into opportunities to be paid for one’s writing, at least at the level of a living wage.

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