Etats-Unis: la Fed reçoit des défenseurs d’une économie “plus équitable”
Euronews - November 14, 2014, by Agence France-Presse - Fait rare pour un dirigeant de la Réserve fédérale des Etats-Unis, la présidente de la Fed Janet Yellen a reçu vendredi des représentants d’...
Euronews - November 14, 2014, by Agence France-Presse - Fait rare pour un dirigeant de la Réserve fédérale des Etats-Unis, la présidente de la Fed Janet Yellen a reçu vendredi des représentants d’associations qui réclament une reprise économique plus équitable et une banque centrale plus transparente.
Une vingtaine de représentants d’organisations sociales et syndicales se sont entretenus pendant une heure avec Janet Yellen dans la salle de réunion du Comité monétaire de la Fed à Washington, ont-elles indiqué.
Celles-ci sont réunies au sein de la coalition baptisée “Fed up”, jeu de mot entre le sigle de la Fed et l’expression anglaise signifiant “ras-le-bol”.
Outre Mme Yellen, les gouverneurs Stanley Fischer, Lael Brainard et Jerome Powell ont participé à la rencontre.
“Nous avons eu une bonne discussion. Ils nous ont écoutés très attentivement”, a indiqué à l’AFP après l’entretien Ady Barkan, représentant du Center for Popular Democracy. “Les gens ont apporté leurs témoignages sur l‘économie d’aujourd’hui et Mme Yellen les a interrogés sur leur expérience personnelle”, a-t-il précisé.
La coalition a remis aux représentants de la Fed une liste de six propositions pour rendre la Réserve fédérale “plus transparente et démocratique”.
“Economiquement, ça ne marche pas pour une vaste majorité de la population”, avait affirmé Ady Barkan lors d’une conférence de presse organisée peu avant l’entretien, devant le massif bâtiment de la banque centrale. – Processus transparent –
“La Fed a une énorme influence sur le nombre de gens qui ont un emploi, sur les salaires (...) et pourtant nous n’avons pas les discussions et les échanges que nous devrions avoir sur ce que devrait être la politique monétaire”, avait-il ajouté.
Vêtus de T-shirts verts estampillés “Quelle reprise?”, ces activistes dénoncent une banque centrale “isolée” qui a besoin “d‘être à l‘écoute” des citoyens.
Il est très rare qu’un dirigeant de la Fed s’entretienne avec des représentants d’organisations sociales et syndicales. La coalition “Fed up” avait déjà interpellé Mme Yellen lors d’une conférence de banquiers centraux cet été et lui avait demandé un futur entretien à cette occasion.
“Je ne trouve plus d’emploi à plein temps”, a témoigné Amador Rivas, un New-Yorkais d’origine cubaine qui a travaillé en usine pendant vingt ans.
“Nos salaires stagnent depuis trente ans”, a dénoncé Anthony Newby, directeur d’une association sociale de Minneapolis qui réclame que la Fed prête sans intérêt aux villes pour qu’elles créent des emplois dans la construction d’infrastructures.
Alors que deux des présidents de Fed régionales sont sur le départ – Charles Plosser pour la Fed de Philadelphie et Richard Fisher pour celle de Dallas -, la coalition réclame un processus transparent pour la nomination de leurs remplaçants.
La Fed de Philadelphie a innové vendredi en indiquant sur son site qu’elle avait engagé un cabinet de recrutement pour trouver le nouveau président et publié une adresse email où le public peut s’exprimer.
“Nous voulons que la Fed passe du temps dans les quartiers où vivent les gens qui travaillent”, a lancé Kati Sipp, directrice de l’association Pennsylvania Working Families.
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Lobbyists Know the Fed Has Political Power
Lobbyists Know the Fed Has Political Power
Your editorial is exactly right about the lack of impartiality with “The Federal Reserve’s Politicians” (Aug. 29). While created by Congress, the Fed continues to act as though it is completely...
Your editorial is exactly right about the lack of impartiality with “The Federal Reserve’s Politicians” (Aug. 29). While created by Congress, the Fed continues to act as though it is completely unaccountable to the people’s representatives.
As I pointed out to Chairwoman Janet Yellen during a congressional hearing last year, her own calendar reflects weekly meetings with political figures and partisan special-interest groups. Even more troubling, there is a long history of Fed chairs or governors serving as partisan figures in the Treasury or the White House before their appointment. So while the Fed is quick to decry any attempts at congressional oversight, it cannot credibly claim to be politically independent.
We need a rules-based monetary policy that doesn’t leave the Fed with the potential to push an ideologically driven agenda. To make the Fed truly free from politics, the Fed Oversight Reform and Modernization Act of 2015, which my colleagues and I have passed through the House, should be signed into law. The American people deserve transparency at the Fed and market-driven monetary policy that can finally restore confidence in our economy.
Rep. Scott Garrett (R., N.J.)
Glen Rock, N.J.
Your editorial accuses Fed Up, a group representing low-income black and brown communities, of politicizing the Fed, when big banks have always had undue access and influence over the Fed’s policies.
In fact, commercial banks literally own the Federal Reserve. Unlike nearly every other central bank in the world, the Fed isn’t a public institution but instead operates as a joint venture with the banking sector. It is not true that as long as this status quo of Wall Street domination continues, then the Fed is “independent,” but when the Fed Up campaign’s low-income people of color dare to join the monetary-policy conversation, then the Fed’s “independence” has been compromised.
You mention that retirees living off their retirement plans are suffering from a decade of near-zero interest rates. Presumably this refers to retirees who might have a hundred thousand or two tucked away for retirement. This is already far more than the low-wage workers who have joined our campaign will be able to accrue over a lifetime of working.
But let’s take the argument at face value. Even if the Fed were to raise interest rates up to 2%, that’s a mere $2,000 on $100,000 savings over a year. That won’t make much of a difference to how well a middle-class retiree lives, but hiking rates to that level prematurely could cut off struggling families—who are disproportionately people of color—from the added jobs and higher wages they so desperately need.
Shawn Sebastian
Fed Up Campaign
Brooklyn, N.Y.
Lobbying the Federal Reserve as if it is a legislature began with the Humphrey-Hawkins legislation and the Federal Reserve Reform Act of 1977. The chair of the Fed became politicized and conflicted as the act included mandated congressional grilling of the Fed chair, who is now required to stabilize prices, moderate long-term interest rates, while at the same time delivering low unemployment. These lofty goals can’t necessarily be simultaneously executed, as Paul Volcker showed so well when he attacked inflation, effectively saying that employment would rise with a solid economy that had price stability.
Mr. Volcker had the courage to take the abuse and address his critics as he followed a logical path and publicly explained it, but successive chairs have gradually focused more on pleasing the president who appointed them.
Rep. Kevin Brady’s idea for a commission to rethink the idea of the Fed is a good start. We now have about 40 years of increasing monetary, fiscal and employment messes, with a paralyzed Fed, unsustainable deficits and underemployment because politics tramples economic common sense.
Larry Stewart
Vienna, Va.
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Group Blasts Fed for Lack of Diversity in Leadership
Source: Wall Street Journal
Federal Reserve leadership is overly...
Source: Wall Street Journal
Federal Reserve leadership is overly male, almost entirely white and drawn too frequently from the banking community, according to a group critical of the central bank.
A new report from the Center for Popular Democracy’s Fed Up campaign analyzes the types of people populating the Fed’s Washington-based board of governors, the regional bank presidencies and the regional bank boards of directors.
The report notes that all voting members of the central bank’s rate-setting Federal Open Market Committee and nearly all the regional bank presidents are white. Just two of the 12 presidents and two of the five governors are women.
“These key decision-making bodies remain dramatically unbalanced and unrepresentative of the vast majority of people who participate in the economy,” said the group, which has called for more public input into the selection of regional bank presidents and their performance evaluations.
The center said the composition of the Fed’s leadership bodies violates the spirit of the law that created the central bank, which calls for membership drawn from many different industries and interests.
A Fed spokesman responded to the criticism about the regional bank boards by saying the central bank has “focused considerable attention” to finding directors “with diverse backgrounds and experiences” that represent agriculture, commerce, industry, services, labor and consumers, as the law requires.
“We also are striving to increase ethnic and gender diversity,” the spokesman said, noting a rise in minority representation on the boards from 16% in 2010 to 24% today. Female representation has risen from 23% to 30% over the same period, and all told, 46% of regional directors now are either a woman or a member of a racial minority, the spokesman added.
Fed Chairwoman Janet Yellen is the central bank’s first female leader.
The Fed Up group, with a membership drawing heavily from labor unions and community organizations, is a regular critic of the central bank. It has argued in recent months that the Fed shouldn’t raise short-term interest rates and has pressed its case in private meetings with Fed officials. Several of its members appeared outside the central bank’s research conference in Jackson Hole, Wyo., last year to call attention to their views.
The group’s concern about a dearth of diversity at the Fed has been echoed by former Minneapolis Fed chief Narayana Kocherlakota. He argued in a blog post last month the central bank has appeared to give short shrift to racial concerns in part because there have been almost no African-Americans in its policy-making ranks. He wrote that the concerns of racial minorities have been “underemphasized” at the Fed.
The last African-American to serve on the Fed board was Roger W. Ferguson Jr., who served as a governor between 1997 and 2006 and as vice chairman from 1999 to 2006. The first African-American to serve as a Fed governor was Andrew Brimmer, from 1966 to 1974.
The report showed particular concern about the directors on the regional Fed bank boards, which are drawn from the private sector. It said 83% are white, compared with around two-thirds of the total U.S. population.
“The diversity of regional board members is meant to inform the bank presidents, who in turn, participate in discussions and vote at the FOMC,” the report said. “However, the boards, the presidents, and the FOMC fail to represent their region’s racial diversity.”
The report also said its analysis found that representatives of banking and what it calls commercial interests have increased their share of regional Fed board seats in recent years. Representatives of community groups and labor unions account for fewer than 5% of the available board seats, according to the center.
Among the regional Fed bank boards’ most high-profile roles is selecting their bank presidents. Recent regulatory changes now bar directors from participating in that process if their firms are regulated by the bank.
The directors also provide information to bank officials about local economic conditions and give advice on running the banks.
A Democratic Contender For Florida Governor Appears To Own Millions In Puerto Rican Debt
A Democratic Contender For Florida Governor Appears To Own Millions In Puerto Rican Debt
“If you are running to represent Puerto Ricans, and potentially harming Puerto Ricans through investments, then Puerto Ricans will hold you accountable,” said Julio López Varona of the Center for...
“If you are running to represent Puerto Ricans, and potentially harming Puerto Ricans through investments, then Puerto Ricans will hold you accountable,” said Julio López Varona of the Center for Popular Democracy, one of the leading activist groups on the Puerto Rican debt crisis. “There’s a question about what are those investments, and if that question is not answered that is extremely concerning.”
Read the full article here.
Meet the Ordinary People Who Are Mobilizing around Monetary Policy
The Washington Post - August 19, 2014, by Ylan Q. Mui - District resident Shemethia Butler never finished college or studied finance. But she plans to fly to Wyoming this week for one of the most...
The Washington Post - August 19, 2014, by Ylan Q. Mui - District resident Shemethia Butler never finished college or studied finance. But she plans to fly to Wyoming this week for one of the most elite economic conferences in the world. Her goal: schooling the central bankers gathered among the Grand Tetons in Jackson Hole about the hard realities of her own kitchen-table economics.
There’s $899 in monthly rent for the two-bedroom apartment she shares with her 5-year-old daughter, $83 to $90 for electricity, $40 for her cell phone. Meanwhile, Butler brings in less than $700 a month from her part-time job at McDonald’s. She doesn’t need a spreadsheet to know that the numbers don’t add up.
“I’m going to Wyoming to let these bankers in Jackson Hole know that we are not in recovery,” said Butler, 34. “I need them to understand. I need them to see where I’m coming from.”
The three-day meeting in Jackson Hole, sponsored by the Federal Reserve Bank of Kansas City, includes a keynote by Fed Chair Janet Yellen. In the past, notable speakers have included Columbia University economist Michael Woodford and Bank of India Gov. Raghuram Rajan. The atmosphere is decidedly academic, with strict rules governing the presentation and debate of research papers that can run 50 pages or longer -- not the typical setting for a populist uprising.
This year the conference is focused on the health of labor markets, a key consideration for the Fed as it weighs when to end its unprecedented support for the American economy. And activist groups have become increasingly worried that workers themselves are not included in the discussion.
The Center for Popular Democracy is slated to release a letter Tuesday signed by more than 60 left-leaning organizations, ranging from community groups to bigger players such as the Economic Policy Institute, Public Citizen and Demos. They are calling on the Fed to keep its easy-money policies in place until wages start to rise and what has been an exceptionally uneven recovery begins to broaden out. Butler, along with several other workers and activists, intend to trek through the mountains to deliver that message in person before the conference begins Thursday.
“We are writing to remind you that the American economy is not working,” the letter reads. “We hope that in the coming months and years, the Federal Reserve’s leaders will make a more concerted effort to listen to our voices.”
The Fed is an unusual target for this type of grassroots campaign, more typical in protests against big companies such as Wal-Mart or around issues like voting rights. Monetary policy can be an abstract concept, rife with jargon and inscrutable acronyms. Criticism of the Fed has typically come from economists debating its mathematical models, politicians bristling over the independent central bank’s powers or frustrated investors attempting to divine its intentions.
“Most people don’t really understand much about what the Fed does and certainly not why it does what it does,” said Allan Meltzer, a professor at Carnegie-Mellon University and Fed historian. “It’s rather remote from most people’s current experience and interests. It’s very hard to summon public outrage, whether it’s deserved or not.”
The Fed’s charge is to keep prices stable and encourage maximum employment. It operates by setting the interest rate at which banks lend to each other overnight. That rate, in turn, influences the cost of borrowing throughout the economy. Lower rates help stimulate consumer and business spending -- and with any luck, create jobs -- while higher rates help quell an overexuberent economy and rising prices.
The Fed slashed its target for interest rates to zero in 2008 to combat the financial crisis and has kept it there ever since. It has pumped trillions of dollars into the economy for an additional boost. But now, the unemployment rate is falling faster than many at the Fed expected. Job growth is reaching into higher-wage industries after years of being concentrated in low-paying sectors. For the first time since the recession, the central bank is seriously debating if the economy is ready to stand on its own.
That is enough to worry activist groups -- particularly since hope of federal legislation on issues such as the minimum wage, extending unemployment benefits and paid leave stand little chance of passing in a polarized Congress. The Fed is one of the only games left in town.
“Monetary policy is central to our economy and our society, and the discourse around monetary policy needs to be democraticized,” said Ady Barkan, senior attorney for the Center for Popular Democracy. “We can’t leave the debate about Fed policies up to academics and elite bankers and corporate executives.”
The unusually contentious battle last year over who would lead the Fed also help stoke interest in the institution, he said. President Obama had initially planned to nominate former Treasury Secretary and close adviser Lawrence H. Summers for the post. But Democrats balked at Summers’ role in deregulating the financial industry during the Clinton administration and his disparaging comments about women made when he was president of Harvard University.
The pressure from liberal groups helped ensure that Summers could not secure the votes to win confirmation in the Senate. He eventually withdrew his name, and Obama instead nominated Yellen, who was the second-in-command at the Fed.
Yellen may be particularly sympathetic to the activists’ arguments, at least relative to previous Fed chairmen. In a speech Chicago in March, she invoked individual stories of struggling workers to illustrate the human toll of high unemployment -- an unorthodox move in an institution more famousfor obfuscation. The next month, she met with representatives from the AFL-CIO, which did not sign the joint letter, and has repeatedly cited the high number of involuntary part-time workers and those who have given up looking for a job as reasons to be patient in withdrawing the Fed’s support. Yellen is slated to speak about the labor markets Friday in Jackson Hole.
"These and other indications that significant slack remains in labor markets are corroborated by the continued slow pace of growth in most measures of hourly compensation," she said in congressional testimony last month.
It is unclear how much grassroots opposition may influence Fed thinking -- particularly since it occurs so rarely. Meltzer said he could not recall activists ever gathering at Jackson Hole. The last public campaign mobilized against the Fed was in the 1980s, when then-Chairman Paul Volcker was hiking interest rates to stem double-digit inflation. Though he successfully brought prices under control, the economy went into recession as a result. Farmers and construction workers were particularly hard hit by the rate hikes, and they mailed blocks of wood to the Fed in protest and blocked its entrances with tractors.
The measures did little to sway Volcker, according to Stephen Axilrod, who worked at the Fed for three decades and was among Volcker’s key aides. His course had been set.
“None of that, in my head, had much to do with anything,” Axilrod said.
But he and other Fed watchers acknowledge that the central bank is in a new era. Public confidence in government and financial institutions is shaky at best. The Fed has made a concerted effort to increase transparency and connect with Main Street. At the same time, lawmakers have launched several efforts to curtail the Fed’s powers -- or even get rid of it altogether. Though such proposals stand little chance of passing, they can shift public perception of the central bank.
“Part of it is part of a reputational issue,” said Sarah Binder, a professor at George Washington University and senior fellow at the Brookings Institution. “The Fed’s credibility depends on people believing that they’re going to do what they say they’re going to do.”
And right now, the Fed’s next step is not all that clear. Prominent economists outside of the institution -- and several top officials within it -- are arguing that the Fed has goosed the economy to its limit. Some worry it could be even laying the groundwork for the next bubble: The major U.S. stock indexes have roughly doubled in value since the depths of the recession. The Dow Jones Industrial Average has hit 15 record highs this year alone.
But Butler still has a long way to go to before rebuilding her life after losing her job at the Golden Corral due to budget cuts a few years ago. At McDonald’s, she makes $9.50 an hour, and she pulls in extra money by baby-sitting or doing her friends’ hair. It’s still not enough to make ends meet.
“Things may be fine on Wall Street, but they are not fine on my street,” Butler said. “And if [central bankers] lived on my street, they would definitely change their mind.”
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Still We Rise march peacefully denounces inequality
Still We Rise march peacefully denounces inequality
Despite a week of police-related violence, Still We Rise: The 2016 People’s March peacefully trailed through downtown Pittsburgh Friday afternoon, filling the streets with bright colors and music...
Despite a week of police-related violence, Still We Rise: The 2016 People’s March peacefully trailed through downtown Pittsburgh Friday afternoon, filling the streets with bright colors and music in the process.
About 40 organizations — including New York Communities for Change, Common Good Ohio and Action United — and more than 1,000 people marched from the David L. Lawrence Convention Center to the Station Square office of Sen. Pat Toomey, R-PA, in protest of inequality and hate.
Friday’s march was part of the People’s Convention — a two-day convention discussing social issues such as climate justice, immigration and economic inequality. The Center for Popular Democracy and CPD Action presented the convention, which runs Friday through Saturday at the Convention Center.
Emily Terrana from Open Buffalo, a civic initiative in Buffalo, New York, focused on improving equity and justice, said collaborative actions show “the outside world” and people within the organizations the importance of their work.
“It really shows how much power we have when we come together,” Terrana said. “Oftentimes, folks can feel really isolated in the work that they do. [Actions like the march] give life to one another so that we can continue to exist and fight on.”
La’tasha Mayes, the executive director of New Voices Pittsburgh: Women of Color for Reproductive Justice and a Pitt alum, said marches such as Still We Rise are important because “we have so far to go” on social issues.
“Every time you have an action like this, it’s to bring awareness,” Mayes said. “It’s supposed to mobilize people who are most impacted by these issues. We have to have leaders, we have to have advocates, we have to have organizers to make a difference.”
A large phoenix puppet with a 35-foot wingspan was at the head of the march. The CPD asked KT Tierney, a Pitt alum, and a group of others who make puppets for marches and similar events. Tierney said the phoenix, which also appeared on flags and shirts organizers distributed to demonstrators, symbolizes rising from the ashes.
“People face oppression, and from that oppression, they can still triumph,” Tierney said. “It’s kind of a rebirth.”
Before reaching its final destination, the march leaders stopped at several Downtown locations to protest corporate and governmental offices. Among the stops were the Allegheny County Courthouse, Bank of New York Mellon, the U.S. Steel Tower — where protesters held signs decrying UPMC’s treatment of employees — and the Federal Reserve Bank of Cleveland offices.
JoEllen Chernow, the director of special projects at CPD, said the CPD has been planning the convention for a year, while the march has been in development for about five months.
“This is a really important moment for people to be coming together,” Chernow said. “People are afraid already in their communities. These [issues] are things keeping every one of these people up at night.”
Before reaching Station Square, marchers crossed the Smithfield Street Bridge and waved to kayakers in the Monongahela River. A sign reading “Stop Oil Trains” floated across the water, tied to each of the kayaks.
Outside of Toomey’s offices, a wall of Styrofoam “Toomey stones” served as the backdrop for a series of speakers, including Teresa Hill of Action United and Debbie Soto of Organize Now from Orlando, Florida.
The wall of Toomey stones read, “Here lie profits over people, homophobia, divisive politics and empty promises, racism and hate, climate change denial.” Following the speeches, members of the crowd cheered as the wall fell, symbolizing the necessity of overcoming institutional obstacles.
As part of the march’s finale, rappers Jasiri X, LiveFromTheCity and Tyhir Frost performed as representatives of 1Hood Media, a Pittsburgh collective of socially conscious hip-hop artists and activists.
“When we say ‘Black Lives Matter,’ we’re not saying only black lives matter,” Jasiri said before starting his performance. “We say ‘Black Lives Matter’ because if you watch the news, if you watch television, it’s black people that are being shot down.”
The march and convention happened to coincide with the fatal police shootings of Alton Sterling and Philando Castile, which sparked controversy after videos connected to the incidents went viral on social media.
Micah Johnson, a black man angered by the deaths of Sterling and Castile, shot and killed five Dallas police officers, injuring seven other officers and two civilians during a Black Lives Matter march Thursday night.
On Friday afternoon, Mayor Bill Peduto announced plans to hold a communitywide peace summit next week “to work together to address fear and violence.” Peduto, in collaboration with Allegheny County Executive Rich Fitzgerald, plans to gather leaders in law enforcement, faith-based organizations, activist groups, corporations and government.
“We are all affected by the violence in our communities — whether it be here in Pittsburgh, in Dallas or so many other cities — and we all must do everything we can to stop it,” Peduto said in a release. “Pittsburgh is a strong and resilient place, and our bonds are even stronger when all of us in the city work together.”
The Pittsburgh Downtown Partnership will also host a Town Hall meeting July 13 with the city police to discuss Downtown stakeholders’ safety concerns.
Renata Pumarol of New York Communities for Change said the organizations behind Still We Rise, as well as the individual demonstrators, were there to “learn from each other” and show they are a “strong force.”
“We wanted to take to the streets to send a big message here that we’re stronger than ever,” Pumarol said. “We face the same issues across the nation. It’s very important for us to be united and fight together.”
By Alexa Bakalarski
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Two Federal Reserve Openings Provide One Chance to Counter Trump
The Federal Reserve is facing a significant change in leadership that goes beyond the installation of a new chairman. It is also awaiting the appointment of two other top officials who will play a...
The Federal Reserve is facing a significant change in leadership that goes beyond the installation of a new chairman. It is also awaiting the appointment of two other top officials who will play a crucial role in shaping Fed policy.
President Trump, who has already nominated Jerome H. Powell as the Fed’s next chairman, also gets to pick a new vice chairman. But the other open position, the presidency of the Federal Reserve Bank of New York, is not Mr. Trump’s choice to make.
Read the full article here.
The Fed has a rare chance to prove it's not Wall Street's bank
The Fed has a rare chance to prove it's not Wall Street's bank
William Dudley, president of the Federal Reserve Bank of New York, is retiring early, creating another vacancy at a central bank already in a flux of personnel changes. Here’s a suggestion to the...
William Dudley, president of the Federal Reserve Bank of New York, is retiring early, creating another vacancy at a central bank already in a flux of personnel changes. Here’s a suggestion to the the New York Fed’s board of directors, which will select Dudley’s successor: Try to avoid picking another banker.
Read the full article here.
A puzzle for central bankers: Solid growth but low inflation
A puzzle for central bankers: Solid growth but low inflation
Against a backdrop of strengthening growth but chronically low inflation, Federal Reserve Chair Janet Yellen and other central bankers are taking their measure of the global economy at their...
Against a backdrop of strengthening growth but chronically low inflation, Federal Reserve Chair Janet Yellen and other central bankers are taking their measure of the global economy at their annual conference in the shadow of Wyoming's Grand Teton Mountains.
With the prospect of new leadership at the Fed within months, investors will be listening for any hint of shifting interest rate plans from the policymakers. The most watched events will come Friday, when Yellen and Mario Draghi, head of the European Central Bank, will each address the conference.
Read the full article here.
Quit Your Job and Go to Work
This spring, Michanne was striding out of a San Francisco apartment lobby in her...
This spring, Michanne was striding out of a San Francisco apartment lobby in her Google Express jacket, fresh off delivering a mirror. Her van beckoned at the curb. It was branded in Google’s playful primary colors and logo, and on the side was the image of a package getting dropped from a parachute, easy-peasy. Michanne’s job was to make same-day, seamless deliveries of bottled water and kitty litter for Google Express, but she doesn’t actually work for Google Express — not directly, anyway. If you looked carefully, just below the van door, a few small, gray letters spelled out something most people didn’t realize: this vehicle wasn’t Google’s after all. It belonged to a company called 1–800Courier.
That day had actually been a good one. Michanne, who is 27, had worked the full eight hour shift that she’d been scheduled by 1–800Courier — one of several companies that delivers for Google Express in the Bay Area, Washington, D.C., Los Angeles, and New York City. But full days like that were becoming rare. (She didn’t want to use her last name for privacy reasons.)
When I called her back a month later and asked her to rate her job from 1 to 10, she was more upfront about her level of annoyance: “If 1 is a nightmare, I’m like a 1.5.” In fact, she’d quit.
Her complaint came down to this: she says 1–800Courier had verbally assured her full-time work when she started with the company back in October. It was a paycheck the new mother was counting on, one that didn’t leave her time to work another job. And in the company’s scheduling app she was technically scheduled for 40 hours a week for weeks in advance.
Yet, increasingly, her actual hours were decided the day of work. Michanne had to check her email an hour and a half before her first shift started to see if she would actually get to work the hours she’d been allotted. Many times she did not. She was a supposedly full-time employee who was, effectively, on-call. She’d put aside the day so she could work, but when it turned out they didn’t need her, that meant no work — and no pay.
In April, an email plunked into Michanne’s inbox, describing what she says was business as usual:
Even when she got the go-ahead to turn up for the day, Michanne’s shifts would often be cut once she was already at work. Around 5 p.m., as she ate in her van during an hour-long meal break, she would frequently get a call from the dispatcher, telling her to go home early without working her scheduled second shift. She’d still get paid something— California law mandates payment of between two hour and four hours of “reporting time” depending on the length of a cancelled shift. But it was still a huge issue: Although she was expected to be on-call for 40 hours a week, shift changes meant she was regularly dipping down to 25 hours of paid work, and even once as low as 17 hours, she recalls. At $13 an hour, she was hoping for $520 of work each week — but 17 hours is just $221.
Google pointed questions towards its contractor, which manages all scheduling for its deliveries. 1–800Courier’s California Director of Operations David Finney said that across the industry, the delivery business slows down after the holidays. “I personally empathize with that,” he said about employees whose hours get cut. “But at the same time, look at any industry in the state of California — especially in the service industry — and some days it’s just like ‘Hey, we’re sorry, we don’t need you to come in.’”
Another employee of 1–800Courier, who asked to remain anonymous so as to not irk the company, says the scheduling problems were sometimes bad for the company, too. Back in January and February, when business seemed especially slow, this worker would clock in and sit in the delivery car near the hub for hours, waiting to be dispatched. “I’d have movies picked out to watch, I got a pillow and took naps, and had stuff I wanted to read and write. I’m getting paid to do nothing. But I wouldn’t call
[dispatch] and say, ‘I need a route.’ It didn’t bother me at all.”
What did bother the Netflix-watching worker was this: more than 10 times during seven months on the job, their first shift was cut while it was already happening. But the worker was booked on to a second shift, and was made to wait around until that started. Since driving the vehicle back to the parking lot in Silicon Valley from the San Francisco dispatch hub would eat up most of the time, the worker would often drive to the movies or the mall in the city to kill time until the second shift. (The worker once got written up for taking the vehicle to Safeway during that time — saying they expected employees to just wait in the vehicle for the next shift, or drive it back to the Silicon Valley lot.)
The complaint is echoed by another former 1–800Courier worker who recently quit: “I was really getting irritated. They said ‘it’s not as high demand right now, we don’t have a lot of orders coming through, so we’re cutting the hours.’” A couple times, while the worker was in a carpool on the way to work, the dispatcher would call and say, “Oh, we removed you from the 12–5 window, you can just work for 5:30 to 10. I’d just go home and say ‘Remove me from the last window.’” The current driver says things have picked up lately, especially after a major lay-off of drivers in March that has given those who remain more work to do. 1-800's David Finney wouldn’t confirm a layoff, but said drivers are now regularly working overtime hours.
The whole idea behind the on-demand economy — touch-of-a-button delivery, often guaranteed within minutes — creates the potential for a sudden rush or dearth of customers at any moment. So how does a company make sure that the right amount of workers are around at the moment it needs them to be?
You’d think that this is something that Google, the emperor of analytics, might be able to figure out. But the company it had chosen to organize the deliveries, 1–800Courier, had not. Sometimes workers lucked out and watched movies in their cars, but more often they suffered for their employer’s failure. There may have been an abundance of employees scheduled for shifts, but ultimately the people were just as on-demand as the Costco kitty litter they delivered.
Outside of Silicon Valley, American labor is looking a lot like this already. The old, sanctified status of “employee” is getting egged in the face. The days of blue-collar job, suburban tract home, Disney vacay, and pension awaiting at the end of the 9–5 rainbow looks like a curious blip on the way to a more profit-maximized, capitalist future. It’s the age of the precariat: unions are nearly kaput, many will only know pensions from history books, and most “at will” workers can be fired as easily as Uber can kick its drivers off the app. Now many old titans of industry have latched onto this idea of on-call shift work — which many call “just-in-time scheduling,” — a grayish labor abuse tailored for the age of the text message that has lawmakers hustling to curb it.
Since the recession, millions of workers have taken part-time gigs when they’d prefer to have full-time ones — especially in hospitality and retail. And those part-time jobs increasingly jerk the workers around: In a University of Chicago study of young workers in hourly jobs, 41 percent said they got their shifts a week or less in advance. It gets worse from there: as a recent story in Harper’s Magazine laid out, companies use software to track customer flow down to the minute; resulting in managers who ask workers to be on call for work shifts, or clock out while on the job and hang around without pay during slow times to see if the workflow will pick up. Sarah Leberstein is a senior staff attorney from the National Employment Law Project, which has been monitoring the hellish scheduling practices. “The companies want to unload all the flexibility onto the workers, but workers can’t afford to live in such a state of flux.”
This spring, New York Attorney General Eric Schneiderman sent letters to 13 national retailers including Urban Outfitters to Target to Gap to Sears, questioning them about using software tracking systems and whether they made employees get the go-ahead for work less than a day before a shift:
Re: Request for Information Regarding “on call shifts”
Our office has received reports that a growing number of employers, particularly in the retail industry, require their hourly workers to work what are sometimes known as “on call shifts” — that is, requiring their employees to call in to work just a few hours in advance, or the night before, to determine whether the worker needs to appear for work that day or the next. If the employee is told that his or her services are not needed, the employee will receive no pay for that day, despite being required to be available to appear on the job site the next day or even just a few hours later on the same day. For many workers, that is too little time to make arrangements for family needs, let alone to find an alternative source of income to compensate for the lost pay.
If “just-in-time scheduling” sounds a whole lot like on-demand work, that’s because it is.
It’s not just in America that this practice is increasing. In Europe, it’s called the “zero hour” job — you’re promised work, but guaranteed nothing. And these contracts have been causing controversy in Britain ever since the financial crisis, which saw a dramatic rise in the number of just-in-time jobs as employers offloaded their risks onto the workforce. Today, almost 2 million jobs in the U.K. are now on-call. In some cases, workers are denied the benefits of full-time employees, or are prevented from finding other paying gigs without the permission of their employer — even if that employer cancels all of their shifts.
And it’s not just service industry jobs: zero hours have spread into other areas of the British economy, too. Recent figures suggest 13 percent of all healthcare workers and 10 percent of all education jobs are now in the same kind of hole that Michanne found herself in. (Finney from 1–800 said he does not consider the company’s scheduling to fall into the “just-in-time” trend.)
“The writing on the wall is we’re going to see more of an Uber and Lyft approach to workforce management in more industries,” says Carrie Gleason from the Center for Popular Democracy, a Brooklyn-based labor and social justice nonprofit. “You can see that in the just-in-time scheduling — you only want to pay for people when they’re doing the most productive work. The cost of doing business is put on the worker, so any time they’re not producing a car fare or a retail sale, it’s the worker paying for that time, not the company.”
On-demand companies pitch themselves as ultimate disrupters, breaking free of stuffy, old-world straitjackets of work. For many companies in this exploding area, there are no zero hour jobs — because the jobs have no set hours at all. The workers are independent contractors, not employees, and, at many companies, can log into work when they choose. In fact, Silicon Valley’s Chief Optimism Officer, Marc Andreessen — the venture capitalist who is funding Lyft and Instacart to build our app-based freelancer future —recently waved away a reporter’s comment about the precarious app workers in the New Yorker:“Maybe there’s an alternate way of living,” he said. “A free-form life where you press the button and get work when you want to.”
It also saves companies payroll taxes, wages, benefits — and the headache of scheduling workers. (“What other job out there can you just turn it on when you want to start and off when you want to stop — whenever you feel like it?” asked Uber CEO Travis Kalanick in his five-year company anniversaryspeech last week.)
“Uber doesn’t care if 100 or 200 are reporting to work because Uber will get the same percentage of the fare” says Leberstein, the National Employment Law Project attorney. “They’re shifting the burden of deciding whether there’s enough work onto the workers.” Many companies go so far as to give drivers a weekly breakdown on the most high-earning hours — in fact, there are entire apps dedicated to helping workers track that for themselves.
Companies claim these freedom-loving toilers will flee the moment they’re pinned down by shifts or bureaucracy. Their own internal studies suggest this is true: one Uber-commissioned poll of drivers showed more than 70 percent preferred to be their own boss rather than work a 9-to-5. About 50 percent of Lyft’s drivers drive five hours a week or less. A survey by the Freelancer’s Union found 42 percent went freelance to have more flexibility in their schedule.
“If everybody has to work a certain amount of hours, then it would put the model at risk because then it would be a very rigid model,” says Pascal Levy-Garboua, the head of business at Checkr, and organizer of a conference about the on-demand economy held in San Francisco last month. He has driven for Lyft in the past anywhere from 10 to 20 hours a week to see how it works for himself — then goes months without driving at all. “That would be the opposite of on-demand. Demand and supply are elastic, and the model works because there’s an equilibrium. If supply” — the industry’s term for what the rest of the world usually calls “workers” — “is not elastic, the model breaks.”
Yet a survey of more than 1,000 workers released last month by Requests for Startups, a tech-booster newsletter, popped a hole in what had been the great selling point of contract work in the new economy:
Work hours are demand-dependent despite the touted schedule flexibility. Although schedule flexibility is the #1 stated reason for joining a company as a contractor, ‘Peak hours / demand’ ranked highest amongst influencers of their work schedules, with nearly 50% selecting it as a very important influencer (‘My Family’ was the 2nd highest at 35%). This influence is particularly glaring when comparing current vs. ideal hours of ridesharing respondents, whose responses suggest that their ideal working hours aren’t too far off from the traditional 9–5.
Among the top reasons for leaving the job were insufficient pay (43 percent) and — spoiler alert for industry cheerleaders — insufficient flexibility (26 percent). In short, while the apps may be good for people who have another job and merely want to pad their income, if workers want to make a living on these apps, they actually have little flexibility — they need to work full-time or more, and they better be signed into work during the peak times.
The on-demand workplace is not one-size-fits-all: while complete flexibility works well for driving services with a 24-hour demand and a ready stable of drivers, companies dependent on burritos and Thai take-out reaching hungry customers have to be a bit more organized about who is on hand at meal times.
To get around this problem, many companies have started doing to their independent contractors exactly what 1-800Courier does to its employees: schedule them onto shifts.
At Postmates, an on-demand food delivery company, contractors sign up the week before for shifts in down-to-the-hour increments — those who confirm their availability are offered potential jobs first, meaning they can end up making substantially more than those hopping on the app to work spontaneously. As further motivation, Postmates also guarantees couriers who sign up for shifts a minimum of $15 an hour on weekends — if their jobs don’t add up to that, Postmates will pay them directly.
Scheduling contractors is a legally gray thing to do — since shifts are one of the IRS’ criteria in determining that a worker is an employee. (Indeed, Postmates, like many companies, is currently facing a lawsuit over classifying the couriers as contractors.)
Postmates says they aren’t shifts, exactly: workers aren’t bound to the hours they pre-select — they could just not sign into the app during the shift. Yet there are consequences. If they miss five of their allotted hours in a week, they’ll be suspended from work for 48 hours, as this email forwarded by one courier warns:
In order to avoid banishment, Postmates contractors ask for swaps on the app, much like employees have to do when they can’t make a shift.
And, like ridesharing companies, Postmates has another mechanism to get unscheduled contractors out on the road during peak times: its own surge-pricing model called “blitzes.” While the courier’s take of the delivery fee always stays the same —80 percent — blitzes increase that fee two or even three times the usual amount.
Postmates also polices the workers once signed in: one courier in New York City who asked not to be named (he didn’t want to get kicked off the app) showed me texts from the company: sometimes Postmates asks him why he’s not accepting more jobs, sometimes it commands him to stop only accepting jobs that he determines will be worth his time, and sometimes it suspends him temporarily from the app entirely. A Postmates spokeswoman says the real-time texts are aimed at getting feedback on why certain jobs aren’t attractive to couriers.
The take-away: as traditional jobs are looking more on-demand, on-demand contractor ones aren’t looking as flexible as they claim.
So where does that leave us? Employment and contractor labor models already seem to be converging at some sort of semi-flexible purgatory.
In the eyes of those who cry that companies like Uber or Lyft or Postmates are getting rich off exploiting a labor loophole — blithely skipping out of paying wages, benefits, and expenses like gas because they classify workers as freelancers—companies like 1–800Courier are actually playing the good guy. (Or at least the less evil guy.) The company has official employees which it pays $12.50 to $13 an hour, plus worker’s comp, overtime, and expenses, including gas and the occasional parking ticket.
“I do want to go on the record to say we try really hard to do right by our employees,” Finney from 1–800Courier says. “We’re not going to pass that cost onto someone else so we can save a buck… We’re practically one of the only companies in the state of California that uses the employee model. It’s the right thing to do, and, in the long run, it will be the best solution because we’ll be able to provide the best service because we have employees. With independent contractors, there’s a lot of control you give up because you can’t tell independent contractors what to do.”
Still, 1–800Courier's own problems show that employers in the on-demand economy have to be adept at managing their workflow. Otherwise they’ll lose money on wasted labor when there’s low demand, or be caught short when there’s a sudden surge.
This is not impossible. Already some on-demand companies claim to have figured it out.
One vocal proponent of employees in the industry is Managed by Q’s CEO Dan Teran, who has written about the decision to employ its workers to clean and manage offices in New York City. Their workers get to choose their work days and receive a steady schedule, and the company books them at worksites that are on convenient subway routes from their home or other job sites. Still, the company gets off easy since most of the workflow is pre-determined and consistent week to week.
The San Francisco food service Munchery has been also held up as one of the good guys in the new push-button delivery business — one of a short list that employs its couriers. One San Francisco bike messenger named Jennifer told me Munchery pays $18-an-hour plus tips from a collective tip pool — much higher than minimum wage. Still, Munchery experienced its own trip-ups. Jennifer told me that after she started working for them at the beginning of the year, there were too many messengers working the four-and-a-half hour dinner delivery window. “They were just sitting around waiting. I was told that it had been really slow for many months,” she says.
Around the end of January, Jennifer says Munchery laid off 11 bike messengers. (CEO Tri Tran would not give details of the company’s staffing, but says the layoffs were not a huge correction considering the size of his payroll: “Ten people we need to shift around — that’s a very small number for the workforce we have.”) Munchery also gets out ahead of its demand by putting parameters on how instantaneously “on-demand” it can be: outside of San Francisco’s city limits, you have to have ordered dinner by 2:00 in the afternoon, and choose an hour-long delivery window.
The workflow problems seem to be resolved for now. Since the layoffs, Jennifer says she’s delivered a steady flow of meals with little loafing.
Still, Munchery has a strong advantage: people generally eat dinner at a predictable time. Consistency is a harder promise in truly in-the-moment businesses, like Uber and Lyft, Postmates, or Google Express. How can employees ever be scheduled with perfect accuracy in those businesses? Does an hourly employee have to work rigid shifts?
Shannon Liss-Riordan is a Boston-based labor attorney suing many on-demand companies over their attempts to classify workers as contractors. She says flexible shifts aren’t incompatible with employee status: “That’s total BS. Employees can have flexible work schedules, employers are doing that all the time. All of these arguments being made are real red herrings that they’re trying to throw out there. It’s part of the whole ‘Oh, the workers love this, because they love the flexibility.’ You can give them flexibility, andpay their worker’s comp. It doesn’t have to be one or the other.” She cites one precedent-setting California case about cucumber growers who were found in California Supreme Court to be employees, even though they could set their own hours.
Of course, salaried, white-collar workers — who can call their own shots and rarely earn overtime — often have a great deal in flexibility at work. That’s harder for employees getting paid by the hour. Could part-time employees log in and out of work willy nilly, paid by the hours they actually work? Highly unlikely. If companies have to pony up for the workers, there’s little benefit to them for allowing workers to come and go as they please. Shelby Clark, executive director of Peers, which helps on-demand workers find and manage their workload, has done some back-of-the-envelope calculations on the base cost of having employees. Companies only start recovering their employee costs if workers are putting in a baseline of hours, but not overtime, “so you’d probably have a floor and a cap [on hours], and then not more than eight hours a day. You’d start to see a lot of constraints that defeat why people work in the sharing economy.”
That’s exactly what the disgruntled New York City Postmates courier told me. Despite getting pestered by texts to accept more jobs and bad tips, he explained why he stayed: “The only thing I like about this job is the freedom and flexibility.” Take away that, and he’d do what companies fear the most, especially as the competition for these workers grows: he’d never sign in for work again.
Which was exactly what Michanne at 1-800Courier did, after being forced to be flexible when she wanted stable work. In late April, she quit. Ironically, even though she was an employee, her reasons for leaving were the same as all those on-demand workers who were surveyed: lack of flexibility and low pay. She now works at a car dealership, 9-to-6.
It appears 1–800, on the other hand, is only ramping up. In the last month, the company has blanketed Craigslist with job ads for Google Express drivers to deliver for a “new upscale concierge service,” “a really cool company” to deliver retail items to homes and businesses around Silicon Valley. “It makes me wonder why they fired all those people, if they’re just going turn around and hire more,” the current employee told me while sitting in her van waiting
for a second shift to begin last week. “Just so you can fire everyone again?”
Among the listed perks in the ad? “Stable schedules” and “multiple shift choices.”
Source: Mic
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