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Economy

Low-Wage Workers Strike In Washington, Sixth City In Wave Of Actions

Service workers at four buildings in Washington, D.C., are going on strike Tuesday, putting a human face on a recent report about federally-contracted workers stuck with unlivable wages. Starting at the Ronald Reagan Building and moving through two Smithsonian museums and Union Station, the city’s commuter rail and Amtrak hub, the strikes are the latest in a wave of low-wage worker actions designed to make service sector employment economically sustainable. The local progressive radio station WeAct Radio is maintaining a livestream of the day’s actions here.

The strike follows similar actions by private-sector workers in other major cities. Fast food and retail workers in New York City, St. Louis, Milwaukee, Detroit, and Chicago have walked off the job in recent weeks to demand wage hikes. Like those workers, the men and women striking in the capital Tuesday are struggling to tread water economically, even while working full-time. The difference for these most recent participants in the spreading service worker action is that they are paid, indirectly, by the federal government.

As the policy think tank Demos reported in early May, federal dollars are connected to more low-wage jobs than Walmart and McDonalds combined:

We find that nearly two million private sector employees working on behalf of America earn wages too low to support a family, making $12 or less per hour. […]

These workers represent a large spectrum of occupations, from workers sewing military uniforms to hospital aides funded by Medicare, security guards with contracts to protect public buildings, and food cart vendors at the National Zoo.

President Obama has proposed hiking the federal minimum hourly wage to $9, from its current $7.25 level. While opponents point to gradual increases from 2008-2010 as sufficient, the reality is the minimum wage still has less buying power than it did in the 1970s.

This public policy failure is also a major component of the gender wage gap that persists today. Working Americans in six major cities are now organizing to combat Congress’ failure to ensure that service work is livable.

Health

Ex-CEO Claims She Was Fired For Being ‘Disabled’ After Being Diagnosed With Breast Cancer

Kathleen Mason, ex-CEO of Tuesday Morning (Credit: Lubbock Avalanche-Journal)

Shortly after informing the board of directors of her breast cancer, former CEO of Tuesday Morning was ousted as the head of the furniture retail company last June. Kathleen Mason, who served as CEO for 12 years, has filed a lawsuit against the company, claiming she was discriminated against.

The Wall Street Journal reports this may be an unprecedented lawsuit among cases over alleged discrimination:

While employee suits over alleged discrimination are common, it is rare for one to come from a former CEO. Ms. Mason’s lawsuit, filed on Thursday in county court in Dallas, claims the board wrongfully dismissed her because “it regarded her as being disabled” after she informed some fellow directors about her diagnosis.

Mason, 64 years old, said that she informed board members of her cancer in March and she was asked to resign in mid-May. The board eventually released a letter criticizing Mason hours before she was fired that read, “[she] led an extraordinary destruction of shareholder value.” The company denies her allegations, noting the company’s stock fell nearly 60 percent before she was fired.

Though the law is very clear that gender and health discrimination is illegal, women in the workplace still regularly face repercussions over getting pregnant, taking birth control, or contracting diseases that affect predominantly women. And based on the strong reactions to Angelina Jolie’s recent news that she had a preventative double mastectomy to reduce her risk of breast cancer, it’s clear that the stigma over health issues that affect a woman’s anatomy still exists.

It is unclear whether Mason experienced her own discrimination, but the issue is hardly a women-only issue. Examples abound where employees have lost their jobs over perceived weakness after they developed cancer or recovered from surgery.

Economy

More Questions Than Answers From Monthlong Investigation Of West, Texas Fertilizer Explosion

While the Bureau of Alcohol, Tobacco, Firearms and Explosives (AFT) has concluded its excavation of the site where a fertilizer plant exploded in West, Texas, killing 15 and injuring hundreds, it has yet to determine the cause of the accident, officials announced on Thursday evening. Potential causes thus far include criminal activity, a problem with its 120 volt electrical system, or an old golf cart located on the premises. They have ruled out the ignition of anhydrous ammonia or smoking as potential causes.

What is clear is that something started a fire in a seed room in the fertilizer and seed building, and the fire kept burning hotter, increasing the chances that ammonium nitrate at the facility would explode. When debris and equipment from the burning building made impact, it set off a detonation that in turn set off another. In total, about 28 to 34 tons of ammonium nitrate exploded with the power of 15,000 to 20,000 pounds of TNT. Most debris fell within 3,000 feet but some traveled as far as 2.5 miles.

This investigation has taken much longer than is usual: most last three to seven days, but the agency has spent a month looking into the causes and still has yet to determine the exact one. It has also spent nearly $1 million on the investigation in West.

That cost will be added to the estimated $100 million in property damage that the explosion caused, plus federal aid promised by President Obama. Yet because the plant only carried $1 million in liability insurance, many victims may not see their losses covered. Texas overall has the highest rate of workplace fatalities in the country and a high rate of fires and explosions, which come with very high costs: The fires and explosions at Texas’s chemical and industrial plants cost as much in property damages as in all other states combined. Overall, workplace accidents cost the economy around $250 billion a year.

Whether gaps in regulatory oversight might be to blame is also yet to be determined and is at the core of a separate, ongoing investigation by the Chemical Safety Board. What is clear, however, is that the plant hadn’t been inspected by the Occupational Safety and Health Administration since 1985, and it also slipped by six other regulatory agencies.

Economy

Abercrombie & Fitch Signs Bangladesh Safety Agreement While Other American Companies Hold Out

Credit: The Associated Press

Late on Wednesday, American retailer Abercrombie & Fitch announced it would sign a safety upgrade plan that has been signed by six major European retailers and one other American company, PVH, owner of Calvin Klein, Tommy Hilfiger, and Izod. The agreement, which is legally binding, includes independent factory inspections and requires companies to help underwrite building upgrades and repairs.

Many other American retailers have yet to sign on, including Walmart and Gap. Gap has voiced concerns that the plan could be used to sue it in American courts and Walmart objected to governance and dispute resolution mechanisms. Walmart announced on Wednesday that it would instead use its own voluntary plan that includes inspecting all of its Bangladesh facilities and providing fire safety training to workers. Gap also sent a letter to employees at its headquarters saying that it has hired a fire inspector to examine factories in Bangladesh and will commit $22 million in loans to factories to make upgrades.

Meanwhile, other retailers are already looking to pull operations in Bangladesh and move them to other countries. The New York Times reports that Western executives are looking into sourcing production in Vietnam, Cambodia, and Indonesia. But pulling operations out of Bangladesh could only harm workers further:

Garment manufacturing makes up a fifth of the economy in Bangladesh and four-fifths of its exports, which means that one of the world’s poorest, most densely populated countries is desperately dependent on continued export orders to stave off soaring unemployment and possibly further political unrest. Some executives say that many multinationals will continue buying from Bangladesh, although some may diversify their orders to more countries.

Executives may also struggle to find safer working conditions elsewhere. A shoe factory in Cambodia collapsed on Thursday morning, killing two workers and injuring seven. An initial investigation showed that the ceiling lacked the materials to support heavy weight.

Rather than pulling operations, some companies are indicating that they will stay and make further investments in the country. In an interview on Wednesday with the Financial Times, H&M CEO Karl-Johan Persson said he supports Bangladesh’s recent announcement that it would raise the minimum wage for garment workers, saying that he wants salaries to be revised yearly. The company has also agreed to pay as much as $500,000 per year toward factory improvements and inspections by signing onto the safety agreement.

Although some retailers fear the costs of upgrades, they could pass them on entirely to consumers and only raise prices by 10 cents per garment.

Economy

Walmart And Gap Refuse To Sign Broad Safety Agreement In Bangladesh

After six major European retailers announced on Monday and Tuesday that they would sign onto a broad safety upgrade agreement in Bangladesh, American companies Walmart and Gap announced that they would not sign on. Gap has been the most outspoken about its opposition, reports the New York Times:

By far, Gap has been the most vocal company opposed to the plan, expressing concerns that overzealous American lawyers could seize on the agreement to sue American companies on behalf of aggrieved factory workers in Bangladesh — perhaps in the event of a factory fire. Gap said it supported much of the plan, but it proposed changes that would greatly limit any legal liability for a company that violated the plan.

Walmart cited “requirements, including governance and dispute resolution mechanisms” in the agreement as its reason not to sign on, saying they are “appropriately left to retailers, suppliers and government, and are unnecessary to achieve fire and safety goals.”

The company plans to instead use its own safety plan. It began its own factory inspections of 279 Bangladesh facilities this year after the fire in November that killed 110 and it will release the names and inspection information as well as provide fire safety training for every worker in the factories that produce its goods. The inspection results will be posted on June 1.

Labor groups criticized Walmart’s plan, which is voluntary. The broader plan signed by the other companies is legally binding. Labor groups characterized Walmart’s proposal as merely aspirational.

Meanwhile, documents provided to the New York Times show that Walmart sourced clothing from the collapsed factory that killed 1,127:

The Bangladesh Center for Worker Solidarity has provided The New York Times with photos of several documents not disputed by Wal-Mart that were recovered in the building’s rubble, showing that a Wal-Mart contractor from Canada had produced jeans last year at the Ether Tex factory, which had been situated on the fifth floor of the collapsed Rana Plaza building.

The only American company to sign onto the agreement thus far is PVH, owner of Calvin Klein, Tommy Hilfiger, and Izod. A handful of smaller European companies also signed on Tuesday: Benetton, Marks & Spencer, and El Corte Inglés.

Economy

House And Senate To Re-introduce Bill To Protect Pregnant Workers

The Pregnant Workers Fairness Act is expected to be re-introduced in the Senate and House today, a bill that would require employers to “make reasonable accommodations to employees stemming from pregnancy, childbirth, or related medical conditions, unless the accommodation would impose an undue hardship on the employer,” according to the National Women’s Law Center (NWLC). It is sponsored by Sens. Robert Casey (D-PA) and Jeanne Shaheen (D-NH) and Reps. Jerrold Nadler (D-NY), Carolyn Maloney (D-NY), Jackie Speier (D-CA), Susan Davis (D-CA), and Marcia Fudge (D-OH).

While it may sound outrageous, women can be fired today for being or becoming pregnant. Despite the Pregnancy Discrimination Act of 1978 barring discrimination based on “the basis of pregnancy, childbirth, or related medical conditions,” pregnant workers can be forced out of their jobs or denied accommodations that would allow them to keep working. Some of these might include modifying a policy prohibiting food and drink on the job, providing a stool, assigning heavy lifting duties to other workers, or giving a light-duty position to a pregnant employee.

Stories from around the country illustrate how employers fire or force pregnant women out who need accommodations:

  • Laura works as a program counselor at a facility for people with developmental disabilities. When she was pregnant, her doctor recommended that she not bend or twist when securing wheelchairs to a bus. She asked her supervisor to allow her to make this minor adjustment to her job duties. Her supervisor responded by forcing Laura on to unpaid leave for the rest of her pregnancy, even though she was not disabled and could do her job with this minor accommodation. Her employer also threatened to fire her if she didn’t return to work in four months.
  • Maria,* a security worker in California, requested a stool to sit on and more frequent assignment rotation when she discovered she was pregnant. Her employer initially refused to accommodate her pregnancy limitations and placed her on involuntary early leave. (*Name changed to protect privacy.)
  • Jane Doe worked at a casual eatery in Washington, D.C., preparing food and working “on the line” serving customers. After Jane became pregnant, she needed more frequent bathroom breaks and to be allowed to drink water and eat on her scheduled breaks. Her supervisor yelled at her publicly when she returned from the bathroom, ordering her – but no one else – to notify all of the other employees and to get his consent before using the bathroom… Her supervisor also denied her access to water during her four-hour shifts. When Jane asked for advance permission to leave early from a shift to attend a prenatal medical appointment, she got no response from her supervisor, despite asking him repeatedly for an answer. The day of the appointment her supervisor told her she could not leave and threatened to fire if she did… She kept the appointment, and when she returned to work, he immediately fired her.
  • Diana Teigland has been a letter carrier for the United States Postal Service for the past 9 years in Minnesota, but this past summer her doctor put her on a heat restriction—limiting her time outside on extremely hot days—because of her pregnancy. Unfortunately, this past summer had a great number of very hot days. Even though her employer provides indoor work for work-related conditions, they will not provide inside duties for her.
  • The problem is widespread: 3,745 pregnancy discrimination charges were filed with the Equal Employment Opportunity Commission last year. Complaints with the agency rose 65 percent between 1992 and 2007.

    But many women work while pregnant: 62 percent of the women who gave birth in a one-year period worked while they were pregnant. If a woman is forced out of her job or fired, she loses income and will also likely struggle to re-enter the job market, particularly because new mothers often face discrimination. The stress of job loss is also associated with an increased risk of premature birth and/or low birth weight.

    Economy

    Six Major Retailers Sign Factory Safety Upgrade Plan In Bangladesh

    Credit: The Associated Press

    After H&M, the largest purchaser of garments in Bangladesh, announced on Monday that it would sign a fire and safety upgrade plan in the country, four other retailers have similarly signed on: Spanish retailer Inditex, owner of Zara, Dutch retailer C&A, and British retailers Primark and Tesco. Europe accounts for 60 percent of the country’s clothing exports. American company PVH, which owns Calvin Klein, Tommy Hilfiger, and Izod, also signed onto the deal, a more expansive version of one it had already signed, and pledged to contribute $2.5 million to underwrite factory safety improvements.

    As the New York Times reports, “The agreement calls for independent, rigorous factory safety inspections with public accountability and mandatory repairs and renovations underwritten by Western retailers. It also enhances the roles played by workers and unions to ensure factory safety.” It will last for five years.

    But even as large European retailers signed on, major companies in the U.S. stayed on the sidelines. Gap said it was ready to sign the agreement “today” but first wanted a change in how disputes are resolved. Walmart stayed silent on the agreement but called on the country to shut a factory and examine another after its inspections found “structural concerns.”

    The country also announced on Monday that it would raise the minimum wage in the garment industry within three months and allow workers to form a union without first getting permission from factory owners.

    The death toll from the Rana Plaza factory collapse has reached 1,127, and rescue crews have now stopped searching the rubble for survivors.

    Update

    Carrefour, a major French retailer, has joined the other companies in signing the agreement.

    Economy

    Wage And Hour Lawsuits Against Employers Rise For The Fifth Year In A Row

    A new report says the number of wage-and-hour lawsuits filed against U.S. employers in federal court has increased 10 percent this year. It’s the fifth year in a row that the suits have increased, according to law firm Seyfarth Shaw.

    The report notes that this is a fairly recent trend:

    The first major spike in cases occurred in 2003, when the number of such suits nearly doubled from 2,035 to 4,055. They shot up again in 2007, to 6,786 suits.

    Though the number of actions dropped off the following year, to 5,302 in 2008, they have been climbing steadily ever since.

    The climb can be seen in this graphic:

    These are cases alleging violations of the Fair Labor Standards Act and typically fall under three categories: salaried employees claiming they are owed overtime pay, hourly workers who claim they weren’t paid for all of their hours, and restaurant workers who claim they weren’t given additional pay to make up for when tips didn’t bring their overall pay to the minimum wage.

    Violations of wage and hour laws have become widespread in today’s economy. Sixty-eight percent of low-wage workers interviewed for a report in 2009 said they had experienced a pay violation in the previous work week, including 26 percent who were paid under the minimum wage and 76 percent who didn’t receive overtime pay.

    Suits have similarly risen, jumping 400 percent in the last decade. And they’ve seen a surge during the recession in particular as employers cut corners looking to cut costs.

    Economy

    Workplace Accidents Cost The Economy Billions Of Dollars Each Year

    The fertilizer plant explosion in West, Texas that killed 15, injured hundreds, and caused property damages that could reach $100 million has some talking about the need for increased workplace safety regulations to prevent future disasters. The facility hadn’t been inspected by the Occupational Safety and Health Administration since 1985 and slipped by six other regulatory agencies.

    But as the New York Times reported, lawmakers in Texas worry that new regulations would be too costly and endanger the state’s high ratings for a business friendly environment:

    Asked about the disaster, [Gov. Rick] Perry responded that more government intervention and increased spending on safety inspections would not have prevented what has become one of the nation’s worst industrial accidents in decades.

    “Through their elected officials,” he said, Texans “clearly send the message of their comfort with the amount of oversight.” […]

    Even in West, last month’s devastating blast did little to shake local skepticism of government regulations. Tommy Muska, the mayor, echoed Governor Perry in the view that tougher zoning or fire safety rules would not have saved his town. “Monday morning quarterbacking,” he said. […]

    Texas has always prided itself on its free-market posture. It is the only state that does not require companies to contribute to workers’ compensation coverage. It boasts the largest city in the country, Houston, with no zoning laws. It does not have a state fire code, and it prohibits smaller counties from having such codes. Some Texas counties even cite the lack of local fire codes as a reason for companies to move there.

    Meanwhile, Texas ranks at the top of the country for the number of workplace fatalities, experiencing more than 400 every year over the last decade. It also has a high rate of fires and explosions: over 1,300 chemical and industrial plants have caught fire or exploded.

    These accidents come with a huge cost: the fires and explosions at Texas’s chemical and industrial plants cost as much in property damage as those in all other states combined from 2007 to 2012. Texas experiences more than three times the number of accidents and four times the number of injuries and deaths as the second-ranking state in the country, Illinois, resulting in 300 times the property damage costs.

    The cost of workplace accidents doesn’t just impact Texas, though. They cost the U.S. economy billions of dollars a year. A study conducted by the Department of Health and Human Services, Centers for Disease Control and Prevention, and the National Institute for Occupational Safety and Health found that between 1992 and 2002, 64,333 workers died from workplace injuries, which cost society a total of $53 billion, or an average of $831,000 per death. Another study by J. Paul Leigh for the Milbank Quarterly found that in just 2007 alone, there were 5,600 fatal workplace injuries and 8,559,000 nonfatal ones, while there were 53,000 fatal illnesses and 427,000 nonfatal illnesses. These cost society a total sum of $250 billion due to medical and indirect expenses.

    The lack of safety regulations can also cost businesses directly. They spend $170 billion a year on costs associated with injuries and illnesses sustained on the job, including more than $40 billion a year in worker’s compensation benefits. A report from the American Society of Safety Engineers found that having inadequate safety, health, and environmental protocols can cost a company in benefit claims, liability damages, litigation expenses, and the potential to lose bids and government contracts. It also notes that “having a solid safety and health management program with senior management commitment will improve productivity and employee morale.”

    The Dallas Morning News has reported that West Fertilizer Co. only had $1 million in liability insurance, and Texas doesn’t require such facilities to have insurance that could cover the potential damage they might cause. That could mean that the costs of this disaster will be borne by those whose property was damaged, as they can expect little from the company itself. President Obama has also authorized federal aid to help the community recover. The costs of the explosion are already affecting more than the company itself.

    Economy

    H&M Agrees To Factory Safety Upgrade Plan In Bangladesh

    After the death toll from the factory collapse in Bangladesh soared past 1,100, H&M announced today that it has signed a fire and building safety agreement in the country, Reuters reports. The agreement was initiated by IndustryALL and UNI Global Union. The company said in a statement that it hopes for “a broad coalition of signatures in order for the agreement to work effectively on the ground.” The company didn’t use any of the suppliers that were operating out of the collapsed factory.

    In the wake of the tragedy, the country has also announced that it plans to raise the minimum wage for garment workers, the Associated Press reports:

    A new minimum wage board will issue recommendations for pay raises within three months, Textiles Minister Abdul Latif Siddiky said Sunday. The Cabinet will then decide whether to accept those proposals.

    The wage board will include representatives of factory owners, workers and the government, he said.

    The garment industry’s minimum wage was last raised in 2010 by 80 percent following protests from workers, rising to 3,000 takas, or $38, a month.

    Working conditions in the country have long been dismal thanks to the corruption of government officials, a failure to commit to higher standards from companies in the industry, and a glut of workers desperate to work. After a fire that killed 112 workers in November, major retailers refused to implement a union-proposed safety plan, citing costs. That may now change following the leadership of H&M.

    American demand for cheap clothing has also fueled the garment industry boom in Bangladesh without ensuring better working conditions. As the Wall Street Journal reports, “Americans last year devoted just 3% of their annual spending to clothing and footwear, compared with around 7% in 1970 and about 13% in 1945, according to Commerce Department data.” Spending has decreased in part because clothing prices have fallen over the last two decades after rising from the 1950s to the 1970s. Prices for clothing have risen just 10 percent since 1889, while food prices, in contrast, have gone up more than 80 percent.

    But the cost of safety may not even be noticeable to many consumers. The price tag for safety upgrades in the country’s factories, if passed on entirely to the consumer, could cost as little as 10 cents per garment. Companies may also be able to absorb a minimum wage increase as they did when cotton prices rose in 2011.

    Update

    The New York Times reports that H&M is the largest purchaser of garments in Bangladesh, putting even more heft behind its decision. The agreement it has signed “calls for independent, rigorous factory safety inspections with public reports; for mandatory repairs and renovations – with Western retailers underwriting those repairs; and for retailers to stop doing business with any factory that refuses to make necessary safety improvements.”

    Update

    Inditex, the Spanish apparel brand that owns Zara, has signed onto the agreement. The country also announced today that it would allow its garment workers to form unions without first getting permission from factory owners.

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