Tuesday, September 30, 2008
The Department of Labor has just announced issuance of a new rule governing information about union trusts. According to the DOL press release:
The U.S. Department of Labor's Office of Labor-Management Standards (OLMS) today posted at www.olms.dol.gov a final rule that enhances financial reporting and provides union members with more complete information about finances held in union trusts. The final rule, issued under the authority of the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA), further implements the LMRDA goal of securing the right of labor union members to have meaningful information about union finances and expenditures. The final rule also will be published in the Federal Register shortly.
"This final rule builds on the administration's commitment to transparency and accountability for corporations, pension funds and labor unions. Union members expect access to relevant and useful information in order to make fundamental investment, career and retirement decisions, evaluate options and exercise legally guaranteed rights," said Don Todd, deputy assistant secretary for labor-management programs. "With meaningful disclosure, the department hopes to deter potential misuse of union trusts that have occurred in the past and allow union members to know exactly where their hard-earned dollars are being spent." . . . .
The Form T-1 will use the same basic template as the existing Form LM-2, which has been in effect since Jan. 1, 2004, and unions have experience with filing. OLMS also has limited the burden on smaller unions that are unlikely to have significant funds in LMRDA-covered trusts. Only labor unions with total annual receipts of $250,000 or more will need to file a Form T-1. Additionally, labor unions will not be required to file a Form T-1 on trusts subject to certain other disclosure requirements.
The rat is gone, at least in western New York. Various unions' use of the inflatable rat has raised the ire of employers--and confusion of the NLRB--for years. But at least one group of unions have given it up. According BNA's Daily Labor Report (subscription required):
Building and construction trade unions in western New York state have decided that they need a new public image and will no longer display a 12-foot-tall inflatable rat on picket lines and at union demonstrations.
During a rally in Buffalo, N.Y., on Sept. 14, union leaders punctured the gray rat and cut it into pieces, announcing that they were giving up use of the symbol in labor disputes because it was inconsistent with their hope for more cooperative union-management relations.
One of the rally organizers, Paul Brown, president of the Buffalo Building & Construction Trades Council, told BNA Sept. 23 that "instead of being confrontational we'll be working for more participation in jobs." Brown said that by publicly destroying the inflatable rat, the council was offering "a symbolic gesture to show we're trying to work with everybody now." . . .
Michael McNally, business manager of Plumbers and Steamfitters Local 22, told BNA Sept. 23 that publicly destroying the inflatable rat, a symbol he called "offensive," already has improved organized labor's image in Buffalo. "It shows the business community and politicians this is a new era for organized labor in the Buffalo area," McNally said, adding that "[w]e've had a positive response" to abandoning use of the inflatable rat.
Emmett L. Reilly, president of John W. Danforth Co., a western New York mechanical contracting firm, told BNA Sept. 24 that he was happy to see the rat symbol discarded. "It was not a tactic we were in favor of," Reilly said, stating that "30- and 40-year-old tactics" are no longer effective. But Reilly said that "[t]he issue with the building trades is they aren't competitive on price." Destroying the inflatable rate was a positive "step," Reilly said, but he cautioned that union-management relations still have "a long way to go."
All joking aside, I'm happy to see unions take the opportunity to improve relations with employers (although a more confrontational approach may be appropriate in certain situations). However, Reilly's comments is a reminder that the rat's demise isn't a silver bullet.
Hat Tip: Dennis Walsh
Earlier this week, the Department of Justice's Office of the Inspector General and Office of Professional Responsibility issued a nearly 400-page report criticizing the firings of nine United States Attorneys as at the very least arbitrary and fundamentally flawed. The report also detailed the ways that the White House failed to cooperate with the investigation.
Although the special prosecutor has not been charged with investigating the other hiring problems that we've noted here and here, it would not be surprising to me if the special prosecutor's investigation turned up further details on those issues. Taken together, the DOJ under Gonzalez appears to have been thoroughly infected with partisan political decisionmaking. This is the right step to reassert a culture of independence from partisan politics.
Jill Hasday (Minnesota) recently posted on SSRN her article, Fighting Women: The Military, Sex, and Extrajudicial Constitutional Change, 93 Minn. L. Rev. 1 (2008). Here's the abstract
The Supreme Court in Rostker v. Goldberg (1981) upheld male-only military registration, and endorsed male-only conscription and combat positions. Few cases have challenged restrictions on women's military service since Rostker, and none have reached the Supreme Court. Federal statutes continue to exclude women from military registration and draft eligibility, and military regulations still ban women from some combat positions. Yet many aspects of women's legal status in the military have changed in striking respects over the past quarter century while academic attention has focused elsewhere. Congress has eliminated statutory combat exclusions, the military has opened many combat positions to women, and the public has become more enthusiastic about women's military service, including in combat.
This Article brings long overdue attention to the record of women's legal status in the military in order to make three broad theoretical and historical points. First, women's continued exclusion from registration, draft eligibility, and some combat positions undermines the common assumption that legalized sex inequality has faded into history. Second, the record of women's legal status in the military helps illuminate how extrajudicial events can shape the Supreme Court's constitutional interpretation and then render that interpretation much less plausible over time. Rostker reflected contemporaneous understandings of sex equality. The extrajudicial transformation in women's military role since Rostker has undercut the factual premises and cultural assumptions behind Rostker's interpretation of constitutional equal protection, making clear that Rostker is inconsistent with the rest of the Court's sex discrimination jurisprudence. Third, and most strikingly, the record of women's legal status in the military illustrates how extrajudicial actors can develop and enforce their own evolving understanding of sex equality norms, sometimes becoming a more important source of those norms than courts. The extrajudicial transformation in women's military role has shifted the foundational normative commitments that shape the evolving meaning of constitutional equal protection. This transformation makes limits on women's military service that seemed just and reasonable in the 1970s and 1980s, even to many proponents of sex equality in constitutional and statutory law, now appear increasingly wrong, inequitable, and invidious. Over time, that shift in perspective is likely to affect demands for further change and judgments that both courts and extrajudicial decisionmakers reach about how the Constitution's open-textured language of equal protection applies to specific questions about women's military role. The Article concludes by exploring some of the practical consequences of the extrajudicial shift in perspective on women's military service.
This is an important article about the process of social change and the involvement of the Supreme Court.
Employee Rights and Employment Policy Journal
Volume 12, Number 1, 2008
Symposium: The Electronic Workplace
Foreword by symposium editors:
- Richard Warner, The Employer's New Weapon: Employee Liability Under the Computer Fraud and Abuse Act, p. 11.
- Wendy R. Carroll, The Effects of Electronic Performance Monitoring on Performance Outcomes: A Review and Meta-Analysis, p. 29.
- William A. Herbert, The Electronic Workplace: To Live Outside the Law You Must Be Honest, p. 49.
- Steven E. Abraham, The Arizona Employment Protection Act: Another 'Wrongful Discharge Statute' That Benefits Employers?, p. 105.
- M. Neil Browne & Mary Allison Smith, Mobbing in the Workplace: The Latest Illustration of Pervasive Individualism in American Law, p. 131.
Monday, September 29, 2008
Lawrence Rosenthal (Chapman) has posted on SSRN his article (Fordham) The Emerging First Amendment Law of Managerial Perogative. Here's an excerpt from the abstract:
In Garcetti v. Ceballos, the Supreme Court, by the narrowest of margins, held that allegations of police perjury made in memoranda to his superiors by Richard Ceballos, a supervisory prosecutor in the Los Angeles County District Attorney's office, were unprotected by the First Amendment because his expressions were made pursuant to his duties.... The academic reaction to this holding has been harshly negative; scholars argue that the holding will prevent the public from learning of governmental misconduct that is known only to those working within the bowels of the government itself.
This article rejects the scholarly consensus on Garcetti. The critics' claim that Garcetti undervalues the role of whistleblowers in enhancing the quality of public discussion and debate is misconceived, I will argue, because Garcetti is not properly understood as a whistleblower case. Ceballos did not take his case against the district attorney's office to the public; therefore his speech could not have advanced the public's understanding and evaluation of the district attorney's performance. Moreover, although the Court's opinion is admittedly undertheorized, its holding is consistent with fundamental principles of First Amendment law. Rather than stifling public discussion and debate about public institutions, Garcetti rests on an understanding of the First Amendment's commitment to free speech as a means of achieving political accountability - an understanding with powerful roots in First Amendment jurisprudence. The Court's opinion contains a sketch - concededly partial and somewhat obscure - of managerial control over employee speech as essential if management is to be held politically accountable for the performance of public institutions. This article endeavors to fill out the sketch.
I had the pleasure of seeing Lawrence present this paper at last year's LEL Scholars' Colloquium. It will come as no surprise to readers of this blog that Paul Secunda disagrees with Lawrence's thesis (see Garcetti's Impact on the First Amendment Speech Rights of Federal Employees). Lawrence is definitely swimming against the academic current -- but it's as yet unclear whether the academic current is merely an eddy, or a tide that will persuade the judiciary to take a different course.
- Megan E. Mowrey, Discriminatory Pay and Title VII: Filing a Timely Claim, 41 John Marshall L. Rev. 325 (2008).
- Franita Tolson (photo above), The Boundaries of Litigating Unconscious Discrimination: Firm-Based Remedies in Response to a Hostile Judiciary, 33 Delaware J. Corp. L. 347 (2008).
- Amy Kathryn Brown, Baghdad Bound: Forced Labor of Third-Country Nationals in Iraq, 60 Rutgers L. Rev. 737 (2008).
Sunday, September 28, 2008
BNA's Daily Labor Report (subscription required) reported on a House hearing last week looking into the election procedures of the National Mediation Board. The focus was on a recent NMB decision involving Delta Flight Attendants' unsuccessful attempt to unionize. According to the DLR:
Rep. Tim Bishop (D-N.Y.) said that NMB's policies seem intended to thwart union efforts to organize workers in the airline and railroad industries. Bishop said that its policy of allowing carriers to withhold the addresses of employees eligible to vote in a representation election from unions while mailing "propaganda" to the workers is "profoundly unfair."
In response to the criticism, NMB Chairman Read Van de Water defended the board's decisions and policies, some of which have been practiced since 1935, as fair and unbiased. "The Board and the [Railway Labor] Act have functioned successfully for over 70 years," Van de Water said. Both the airline and railroad industries are highly organized, with 60 percent of airline employees and 84 percent of railroad workers represented by unions, she said. . . .
NMB since 1935 has required a union to receive a majority among all workers eligible to vote in a representation election, not just a majority of those who cast ballots, as in elections in other industries governed by the National Labor Relations Act or elections for Congress and other public office. Under repeated questioning on the rule requiring a majority vote of all eligible workers, Van de Water said that unlike the NLRA, the RLA does not provide a process for workers to decertify a union as their collective bargaining representative.
Several NMB decisions during the Delta Air Lines election that were criticized by AFA, raise serious concerns, [Rep. James Oberstar (D-Minn.)] said. . . . Most importantly, NMB allowed more than 1,700 Delta flight attendants who were on furlough or intended to retire from the carrier shortly after the election to remain eligible to vote, he said. A total of 13,380 Delta flight attendants were eligible to vote in the five-week election, which ended May 28, but only about 40 percent, or fewer than 5,400 of them cast ballots, with 99 percent in favor of AFA representation.
I understand that the NMB essentially has a different take than the NLRA on both the entry and exit of a union. However, something doesn't seem right when 99% of voting employees express a desire for a union, but that's not enough. Especially with such a large unit, it seems unreasonable to insist on a majority of eligible voters, rather than simply a majority vote rule (especially when furloughed and near-retired employees are included). Moreover, as Dennis Walsh noted when flagging this story, the "pro-democracy" statements by EFCA opponents seem to be lacking here. It's obviously not an identical situation, but I'm guessing that the 99% of employees who voted for the union aren't feeling like the process was particularly democratic.
NPR has a recent story on another major immigration raid. This time the raid, in Laurel, Miss., directly involves a local union. According to the story, the employer, Howard Industries, had been involved in tense negotiations with the union representing a significant number of its workers. A major part of the dispute was the union's objections to the company's use of undocumented workers, despite what the union asserted was a labor market that had a surplus of American workers ready to fill the jobs. Soon after talks broke down, the ICE raided the plant and arrested hundreds of the undocumented workers. There's no hard evidence that the union called the ICE, but reports of union members watching the raid and applauding seems a pretty strong indication that that's what happened.
I understand the frustration of union members with the use of undocumented workers, but some of the ugliness described in the story was over the line. It also shows that, although the national union leaders have turned a corner of their view of immigrant labor, that hasn't necessarily filtered down everywhere.
Hat Tip: Dennis Walsh
Christine Cimini (Denver) has just posted on SSRN her article (forthcoming Stanford) Ask Don't Tell: Ethical Issues Surrounding Undocumented Workers' Status in Employment Litigation. Here's the abstract:
The presence of an estimated 11.5 million undocumented immigrants in the United States, of which an estimated 7.2 million are working, has become a flashpoint in the emerging national debate about immigration. Given these statistics, it is not surprising that many undocumented workers suffer injuries in the workplace that are typically legally cognizable. Even though undocumented workers are entitled to a number of legal remedies related to their employment, seeking legal relief often raises heightened concerns about the disclosure of their status.
This article explores lawyers' increasingly complex ethical obligations with regard to a client's immigration status in the context of employment litigation. The complexity regarding the nature and scope of a lawyer's obligation is due, in large part, to two recent developments. The first is the United States Supreme Court's 2002 decision in Hoffman Plastic Compounds v. National Labor Relations Board, in which the Court addressed the scope of lawful relief due to an injured undocumented worker and ultimately left open the question of relevancy of immigration status in general civil litigation. The second factor creating this complexity relates to existing legislation that criminalizes various acts by undocumented immigrants as well as the ongoing legislative debates regarding immigration reform which have included proposals to criminalize the mere status of undocumented immigrants.
This article addresses both of these developments in the context of lawyers' ethical obligations and analyzes several questions. First, in light of ethical prohibitions on lawyers assisting in conduct that is criminal or fraudulent, are there any ethical limitations upon a lawyer's ability to represent undocumented workers in employment litigation? Second, once representing an undocumented worker, how do lawyers balance their duty of confidentiality against disclosure obligations? And, finally, despite this article's conclusion that the ethical rules do not mandate disclosure of a client's immigration status, this article explores the strategy of disclosure and whether the decision to disclose belongs to the lawyer or the client. In light of the potentially catastrophic consequences of an improperly made disclosure, lawyers need to be mindful of the special ethical obligations that arise when representing undocumented workers in employment related civil litigation. The article proposes a framework and analysis to guide lawyers through these difficult ethical quandaries.
Saturday, September 27, 2008
This past week, the U.S. Senate Judiciary Committee heard "extensive" testimony on the increasing struggles employees face in achieving workplace equality. Federal courts have increasingly refused to hear employment discrimination claims. According to Senator Patrick Leahy (D-Vt), statistics show that the Federal Courts of Appeal are five times more likely to overturn an employee's favorable trial verdict against her employer than to overturn a verdict in favor of the employer. The Ledbetter v. Goodyear Tire & Rubber Co. decision is an example of this misfortune. At trial, Lilly Ledbetter, who discovered that she had been compensated substantially less than her male co-workers, successfully brought suit against Goodyear. A jury found that Goodyear owed her over $200,000 in pay. But Ms. Ledbetter's victory was short-lived. The U.S. Supreme Court overturned the verdict on appeal.
Additionally, a new study released by the American Constitution Society, which I mentioned in a previous post, revealed that the hostility to plaintiffs' employment discrimination claims has resulted in "an absolute drop in employment discrimination cases of 37 percent from fiscal years 1999-2007." Is it a coincidence that between 1999-2007 the economy began to weaken? Maybe this is just a case of what is "good for the employee is not good for a weakened economy." And when faced with two countervailing interests, one has to give to the benefit of the other. If this is so, then the federal courts will continue to be "out of order" for aggrieved employees for some time to come, or at least until the economy shapes up. Perhaps what we need is for Congress to continue to amend the anti-discrimination statutes to correct erroneous court decisions?
- Richard L. Kaplan, A Guide to Starting Social Security Benefits (1118).
- Marcos Pompeu Pareto, The Health Care Crisis in the United States: The Issues and Proposed Solutions by the 2008 Presidential Candidates (157).
- Robert Novy-Marx & Joshua D. Raugh, The Intergenerational Transfer of Public Pension Promises (135).
- Kenneth M. Casebeer, At-Will Employment (87).
- Orly Lobel (photo above), Intellectual Property and Restrictive Covenants (79).
- Matthew T. Bodie, Mother Jones Meets Gordon Gekko: The Complicated Relationship Between Labor and Private Equity (76).
- Jonah B. Gelbach, Jonathan Klick, & Lesley Wexler, Passive Discrimination: When Does It Make Sense to Pay Too Little? (74).
- Robert Flannigan, Fiduciary Mechanics (71).
- Jared D. Harris, What's Wrong with Executive Compensation? (62).
- Dwight Steward & Stephanie Botello, Back Pay and Front Pay Calculations in Employment Termination Cases: Accounting for Re-Employment and Mitigation Efforts (60).
The Kaiser Family Foundation's Employer Health Benefits 2008 Annual Survey finds:
Premiums for employer-sponsored health insurance rose to $12,680 annually for family coverage this year – with employees on average paying $3,354 out of their paychecks to cover their share of the cost – and the scope of that coverage has changed, with many more workers now enrolled in high-deductible plans, according to the 2008 Employer Health Benefits Survey released today by the Kaiser Family Foundation and the Health Research & Educational Trust (HRET). Key findings from the benchmark annual survey of small and large employers were also published today as a Web Exclusive in the journal Health Affairs.
Premiums rose a modest 5 percent this year, but they have more than doubled since 1999 when total family premiums stood at $5,791 (of which workers paid $1,543). During the same nine-year period, workers’ wages increased 34 percent and general inflation rose 29 percent.
This year many workers are also facing higher deductibles in their plans, including a growing number with general plan deductibles of at least $1,000 – 18 percent of all covered workers in 2008, up from 12 percent last year. This is partly, but not entirely, driven by growth in consumer-directed plans such as those that qualify for a tax-preferred Health Savings Account.
Hat tip: Carol Furnish.
Friday, September 26, 2008
Although public law scholars have long addressed the problems of accountability generated by private decision-making and "privatization," they have largely ignored this phenomenon in the immigration context. Our ignorance is increasingly indefensible. Millions of employers - private parties - are required by law to screen their workers for unauthorized immigrants, and growing evidence suggests that they use their screening power to ignore workplace protections and to otherwise exploit these workers. This article is the first attempt to apply the insights generated by the privatization literature to immigration law. It argues that our nation's employers have emerged as private immigration screeners who, like airport inspectors screening for ineligible entrants and law enforcement officers screening for criminal noncitizens, assist the Department of Homeland Security in identifying unauthorized workers for removal. More than just agents of exploitation, reframing employers as private screeners demonstrates that they are also agents of the state. Borrowing analytical concepts developing in the privatization literature, I argue that the high risk of abuse and the lack of readily available mechanisms for reducing that risk raise troubling implications over the kind of power that employers wield as private immigration screeners in the workplace. Reframing our nation's employers as private screeners gives theoretical coherence to the discretionary decision-making authority they actually wield, and explains why they have used that authority to exploit workers - as private parties carrying out public duties, they are incentivized to serve their own interests instead of verifying the immigration status of their workers in good faith. Examining the problem of private immigration screening also forces us to reconsider two aspects about immigration screening generally. First, although immigration law tends to reward unauthorized immigrants who lay low and tends to punish those who draw attention to themselves, I suggest that we ought to rethink this logic at least in the context of the workplace. Because workplace violations committed by employers are typically enforced by private parties, punishing unauthorized immigrants who attempt to assert these rights and thus draw attention to themselves, only encourages workplace violations by employers and fosters a culture of lawlessness. Second, thinking about how decision-making authority within immigration law should be allocated between the public and the private contributes to the current conversation over how similar decision-making authority should be allocated between federal entities and local entities. Although questions of accountability have lingered in the backdrop of the immigration federalism debate, I suggest that scholars would be well served to foreground these questions and answer them head-on.
Thursday, September 25, 2008
That's no typo; it's now official--the President signed today the ADA Amendments Act of 2008. As a bonus, my colleague, Alex Long (University of Tennessee), has just posted on SSRN his essay forthcoming in the Northwestern University Law Review Colloquy, Introducing the New and Improved Americans with Disabilities Act: Assessing the ADA Amendments Act. It's a great summary of the changes in the Act and their impact. Rest assured that this will be my go-to source when I'm scrambling to include the new Act when I teach the ADA in a few weeks.
Two new pieces are recently posted on SSRN by new scholar Joe Seiner of the South Carolina School of the Law.
In the first one, The Trouble with Twombly: A Proposed Pleading Standard for Employment Discrimination Cases, 2009 U. Ill. L. Rev. (forthcoming), the article discusses the possible employment discrimination implications of the Supreme Court’s plausibility standard as set forth in Twombly, and proposes a uniform framework for pleading Title VII cases.
In the second, The Failure of Punitive Damages in Employment Discrimination Cases: A Call for Change, 50 Wm. & Mary L. Rev. (2008) (forthcoming), Seiner examines the effectiveness of punitive damages in Title VII claims and proposes a different framework for relief in employment discrimination cases.
Joe, relying on his past background as an EEOC appellate attorney, takes on two issues that do not get as much attention as they should. Especially with punitive damages under Title VII, I can relate from first-hand trial experience that the Kolstad standard is indeed confusing and badly needs to be reconsidered. I have called for a similar punitive damages reform under ERISA in a recent paper of my own.
Wednesday, September 24, 2008
William Herbert (Deputy Chair, NY PERB) has published in the Employee Rights and Employee Policy Journal his new piece: The Electronic Workplace: To Live Outside the Law You Must be Honest, 12 EREPJ 49 (2008) (Westlaw subscription required).
From the Introduction:
The use of new communication technologies in the performance of work continues to grow at an exponential pace, resulting in the creation of massive amounts of workplace electronic data. According to the United States Department of Labor's Bureau of Labor Statistics, in October 2003, 55.5 percent of all employees in the United States used a computer at work. Over three quarters of those employees utilized workplace computers to access the internet and to send and receive emails. American employees spend approximately one quarter of their workday writing and reading email. A Canadian study found that 60 percent of all employees engage in personal web surfing while at work.
Employer concerns regarding employee productivity, along with fears associated with potential litigation and regulatory requirements such as the Sarbanes-Oxley Act of 2002, have led the vast majority of employers to issue computer use policies and utilize various means to monitor employee email, instant messaging, and internet surfing. Many employers have also installed filters to restrict employee access to particular websites. In one study, more than 25 percent of the employers surveyed had terminated employees for misusing either email or the internet . . . .
Despite employee perceptions to the contrary, interpretations of constitutional, common law, and statutory provisions establish only minimal employee rights relating to email and internet use in the workplace. In light of this gap between perception and legal reality, “it is time the American people had an open and honest debate on the relative importance of privacy and security.” Without a reasoned and nuanced debate and discussion in legislatures, in the public square, and in the office, employee workplace computer use will continue to live outside the scope of legal protections.
This article will examine various legal issues relating to the use of computer-based electronic technologies in the workplace. Specifically, the article will discuss employee internet and email use at work under the Fourth Amendment, common law torts, the ECPA, and the NLRA . . . .
The article concludes with a call for integrity-based solutions, including legal changes and employer policies that balance employer interests and employee privacy rights, thereby encouraging the most beneficial use of technology without sacrificing important zones of privacy in our society.
Given the growing prevalence of email/internet firings, the NLRB's new rules concerning use of workplace computers for union organizing purposes, and just the overall civil liberties environment in this country associated with this Administration's War on Terror, this article poses the exact questions that need to be asked in determining what workplace privacy law should like in the coming decades.
Teresa Ghilarducci, Bernard L. and Irene Schwartz Chair of Economic Policy Analysis The New School for Social Research, and author of “When I’m Sixty-Four: The Plot Against Pensions and the Plan to Save Them," has penned this response to the recent blog post we did on Zelinsky and the 401(k) Lessons from the Crash of 2008.
I appreciate Zelinsky calling like it is -- the so-called 2006 Pension Protection Act and the DOL regulations privilege a faddish approach to investing which is overweighted towards stock. (Zelinsky calls it a “enshrining stock-based approach in the law.”) Government paternalism, though is not the problem as Zelinsky characterizes it. He calls the government’s default option for automatic 401(k) contributions, "paternalism." The problem actually is the government’s lack of caring. The Paulson – Bernacke plan proposes a bailout of the investment firms with very little new regulation and maintaining the same legal biases toward 401(k).
The government should do a lot more, I call for a democratic “paternalism.” Instead of giving investment banks a way out – the government is providing a market for their junk assets – it should be giving near retirees and retirees the option to clear the junk out of their accounts and transfer them to government guaranteed bonds. I describe these vehicles in my new book; they are called “Guaranteed Retirement Accounts.” Every worker would get $600 annually from the government in exchange for investing 5% of their pay every pay period to invest in a retirement account that the government would pay 3% indexed for inflation.
The government is now pursuing a misguided message – retirement security can be achieved through 401(k) accounts. What all workers need is access to the same investment vehicles that most public sector workers have, including all federal workers, and most unionized workers. All workers need a secure vehicle, like a defined benefit plan. All workers deserve to put their retirement dollars in a vehicle that guarantees a low–fee and safe return. If we swap tax breaks for 401(k) plans (70% got to the top 20% of wage earners) for a $600 contribution to a guaranteed account for all workers it would cost the government nothing and help the people who need help the most– unlike all the other proposals swirling around.
Please feel free to send your comments to me if you would like to add your two cents to this most timely of debates.
Working Mother Magazine has released its annual list of the 100 best companies. Although the name is "working mother," the magazine's focus in this ranking is not gendered. As the magazine's blurb states,
We’ve hit the working-mother lode this year with our 100 Best Companies. From flextime and telecommuting to backup child care and parental leave, these winners are expanding the concept of family-friendly benefits to make sure they cover adoptive parents, fathers and grandparents as well as working mothers—even as the economy stumbles. “It is particularly important to continue enhancing benefits precisely when families are getting squeezed the hardest,” says James Rishwain, firm chair at Pillsbury Winthrop Shaw Pittman, one of this year’s Top 10 companies. We couldn’t agree more.
I couldn't agree more, either, and I particularly support the fact that the magazine appears to recognize that gendering parenting responsibilities and limiting legitimate parenting relationships to biology or direct parentage hurts women and men both.
Tuesday, September 23, 2008
Rightfully pissed off after reading news like this:
Up to 10,000 staff at the New York office of the bankrupt investment bank Lehman Brothers will share a bonus pool set aside for them that is worth $2.5bn (£1.4bn), Barclays Bank, which is buying the business, confirmed last night.
The revelation sparked fury among the workers’ former colleagues, Lehman’s 5,000 staff based in London, who currently have no idea how long they will go on receiving even their basic salaries, let alone any bonus payments. It also prompted a renewed backlash over the compensation culture in global finance, with critics claiming that many bankers receive pay and rewards that bore no relation to the job they had done.
A spokesman for Barclays said the $2.5bn bonus pool in New York had been set aside before Lehman Brothers filed for chapter 11 bankruptcy in the United States a week ago. Barclays has agreed that the fund should continue to be ring-fenced now it has taken control of Lehman’s US business, a deal agreed by American bankruptcy courts over the weekend.
I'm really at a loss of words. One can see the cupidity inherent in the current American system through this example alone. And also the need for direct oversight of executive compensation, as companies have shown an inability to provide any meaningful limits on such payments.
Wall Street badly needs a culture change at the top. Its leaders must come to view themselves as stewards of institutions for the long term, not as temporary operators of vehicles proficient at finding new ways to throw off wealth, with everything else – including impact on the public interest – a mere detail. Institutional stewardship will mean, in practice, forgoing some opportunities for making a killing when the downside of a bet gone bad may be to jeopardize a franchise . . . .
The most objectionable aspect of CEO compensation isn't primarily the unfairness of the few at the top taking more than their appropriate share, nor that CEOs could cash in their personal gains based on ephemeral financial value, nor even the absurdity of massive "golden parachutes" paid out in cases of failure. The worst affront to the national interest is that these compensation arrangements created incentives for CEOs to "roll the dice" in search of the biggest possible scores for the company (and, not coincidentally, themselves), with too little regard for the downside risk if they bet wrong. And with no appreciation for the potentially dangerous consequences of such gambles, in the aggregate, for the economic security of the American people.
Hat Tip: folo